Purple Innovation, Inc. Stock Compensation Disclosure
17. Equity Compensation Plans
2017 Equity Incentive Plan
The 2017 Equity Incentive Plan provides for grants of stock options, stock appreciation rights, restricted stock and other stock-based awards. Directors, officers and other employees and subsidiaries and affiliates, as well as others performing consulting or advisory services for the Company and its subsidiaries, will be eligible for grants under the 2017 Equity Incentive Plan. The aggregate number of shares of Common Stock which may be issued or used for reference purposes under the 2017 Equity Incentive Plan or with respect to which awards may be granted may not exceed 7.9 million shares. As of December 31, 2024, 2.4 million shares remain available for issuance under the 2017 Equity Incentive Plan. During the years ended December 31, 2025, 2024 and 2023, stock-based compensation associated with equity awards issued under the 2017 Equity Incentive Plan totaled $1.7 million, $2.8 million and $4.9 million, respectively, while the related tax benefits recognized on these awards were $0.8 million, $0.9 million and $1.5 million, respectively.
Common Stock Awards
There were no stock awards granted in 2025 or 2024.
Employee Stock Options
There were employee stock options granted in 2025 or 2024.
The following table summarizes the Company’s total stock option activity for the years ended December 31, 2025 and 2024:
| Options (in thousands) | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term in Years | Intrinsic Value $ (in thousands) | |||||||||||||
| Options outstanding as of December 31, 2023 | 863 | $ | 8.13 | 2.2 | $ | |||||||||||
| Granted | — | |||||||||||||||
| Forfeited | — | |||||||||||||||
| Expired | (334 | ) | 9.67 | — | ||||||||||||
| Options outstanding as of December 31, 2024 | 529 | $ | 7.17 | 2.2 | $ | |||||||||||
| Granted | — | |||||||||||||||
| Forfeited | — | |||||||||||||||
| Expired | (29 | ) | 13.12 | — | ||||||||||||
| Options outstanding as of December 31, 2025 | 500 | $ | 6.82 | 1.3 | $ | |||||||||||
Outstanding and exercisable stock options as of December 31, 2025 are as follows:
| Options Outstanding | Options Exercisable | |||||||||||||||||||
| Exercise Prices | Number of Options Outstanding (in thousands) | Weighted Average Remaining Life (Years) | Number of Options Exercisable (in thousands) | Weighted Average Remaining Life (Years) | Intrinsic Value (in thousands) | |||||||||||||||
| $ | 6.82 | 500 | 1.3 | 500 | 1.3 | $ | ||||||||||||||
The following table summarizes the Company’s unvested stock option activity for the years ended December 31, 2025 and 2024:
| Options (in thousands) | Weighted Average Grant Date Fair Value | |||||||
| Nonvested options as of December 31, 2023 | 337 | $ | 0.41 | |||||
| Granted | ||||||||
| Vested | (170 | ) | 0.59 | |||||
| Forfeited | ||||||||
| Nonvested options as of December 31, 2024 | 167 | $ | 0.22 | |||||
| Granted | ||||||||
| Vested | (167 | ) | 0.22 | |||||
| Forfeited | — | |||||||
| Nonvested options as of December 31, 2025 | ||||||||
The estimated fair value of Company stock options is amortized over the options vesting period on a straight-line basis. For the years ended December 31, 2025 and 2024, stock-based compensation expense related to stock options was de minimis. As of December 31, 2025, all stock options have been expensed and there is no remaining amount of unrecognized stock compensation expense.
Employee Restricted Stock Units
In 2025 and 2024, the Company granted 1.2 million and 1.8 million, respectively, of restricted stock units under the 2017 Equity Incentive Plan to certain members of the Company’s management team. Of the restricted stock units granted in 2024, 1.2 million, included a market vesting condition. The restricted stock awards granted in 2025, and 2024 that did not have a market vesting condition had weighted average grant date fair values of $1.76 and $1.00 per share, respectively. The estimated fair value of these awards is recognized on a straight-line basis over the vesting period.
The restricted stock awards granted in 2024 that did have a market vesting condition had a weighted average grant date fair value of $1.13 per share. For these awards, the estimated fair value was measured on the grant date and incorporated the probability of vesting occurring. The estimated fair value is recognized over the derived service period (as determined by the valuation model), with such recognition occurring regardless of whether the market condition is met. The Company determined the weighted average grant date fair value of these awards using a Monte Carlo Simulation of a Geometric Brownian Motion stock path model with the following weighted average assumptions:
| Year Ended December 31, 2024 | ||||
| Trading price of common stock on measurement date | $ | 1.50 | ||
| Risk free interest rate | 4.46 | % | ||
| Expected life in years | 3.0 | |||
| Expected volatility | 97.1 | % | ||
| Expected dividend yield | ||||
The following table summarizes the Company’s restricted stock unit activity for the years ended December 31, 2025 and 2024:
| Units (in thousands) | Weighted Average Grant Date Fair Value | |||||||
| Nonvested restricted stock units as of December 31, 2023 | 3,057 | $ | 2.97 | |||||
| Granted | 1,828 | 1.03 | ||||||
| Vested | (571 | ) | 3.57 | |||||
| Forfeited | (506 | ) | 3.31 | |||||
| Nonvested restricted stock units as of December 31, 2024 | 3,808 | $ | 1.91 | |||||
| Granted | 1,150 | 0.66 | ||||||
| Vested | (919 | ) | 2.22 | |||||
| Forfeited | (898 | ) | 2.30 | |||||
| Nonvested restricted stock units as of December 31, 2025 | 3,141 | 1.25 | ||||||
The Company recorded restricted stock unit expense of $1.7 million, $2.8 million and $3.7 million during the years ended December 31, 2025, 2024 and 2023, respectively.
For restricted stock units outstanding as of December 31, 2025, there was $1.3 million of total unrecognized stock compensation cost with a remaining recognition period of 1.5 years.
Aggregate Non-Cash Stock Compensation
The Company has accounted for all stock-based compensation under the provisions of ASC 718 Compensation—Stock Compensation. This standard requires the Company to record a non-cash expense associated with the fair value of stock-based compensation over the requisite service period. The table below summarizes the aggregate non-cash stock compensation recognized in the statement of operations for stock awards, employee stock options and employee restricted stock units (in thousands).
| Years Ended December 31, | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| Cost of revenues | $ | 355 | $ | 398 | $ | 285 | ||||||
| Marketing and sales | 21 | 489 | 616 | |||||||||
| General and administrative | 1,104 | 1,621 | 3,730 | |||||||||
| Research and development | 249 | 307 | 244 | |||||||||
| Total non-cash stock compensation | $ | 1,729 | $ | 2,815 | $ | 4,875 | ||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 31, 2026 | Showing above |
| 2024 | Mar 14, 2025 | |
| 2023 | Mar 12, 2024 | |
| 2022 | Mar 22, 2023 | |
About Stock Compensation Disclosures
Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.
Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.