Quantum Computing Inc. Stock Compensation Disclosure

Note 13 – Stock-based Compensation

 

Incentive Plans

 

The Quantum Computing Inc. 2019 Equity and Incentive Plan, as amended in 2021 (the “2019 Plan”) enabled the Company to grant incentive stock options or nonqualified stock options and other equity awards to employees, directors and consultants of the Company up to a total of 3.0 million shares of common stock, all of which have been issued.

 

On July 5, 2022, the Board of Directors adopted the Quantum Computing Inc. 2022 Equity and Incentive Plan (the “2022 Plan”) and was approved by a majority of the shareholders in September 2022. The 2022 Plan initially provided for the issuance of up to 16.0 million shares of the Company’s common stock and includes provisions for annual automatic evergreen increases of 1,000,000 shares of common stock. As of December 31, 2025, the total number of shares of our common stock reserved for issuance under the 2022 Plan is 19.0 million and a total of 17.3 million shares, including 7.1 million shares underlying options, were issued and outstanding under the 2022 Plan.

 

Options

 

The following table summarizes the Company’s option activity for the year ended December 31, 2025, 2024 and 2023 (in thousands, except exercise price and contractual life data):

 

		Number Outstanding				Weighted Average Exercise Price per Share				Weighted Average Remaining Contractual Life (Years)
Balance as of January 1, 2023			9,165			$	3.51				4.2
Granted			5,340				1.38				5.0
Forfeited			(662	)			4.41				-
Balance as of December 31, 2023			13,843				2.64				3.7
Granted			830				0.92				5.0
Forfeited			(1,690	)			4.14				-
Balance as of December 31, 2024			12,983			$	2.34				2.9
Granted			1,630				11.09				4.7
Exercised			(7,204	)			2.30				-
Forfeited			(346	)			8.11				-
Balance as of December 31, 2025			7,063			$	4.11				2.6
Vested and exercisable as of December 31, 2025			4,563			$	3.68				2.3
Vested and exercisable as of December 31, 2024			9,646			$	2.66				2.7

 

The following table presents the assumptions used in the Black-Scholes option-pricing model to determine the grant-date fair value of stock options granted during the years ended December 31, 2025 and 2024:

 

		Year Ended
		December 31,
		2025				2024
Exercise price		$	1.00 – 21.78			$	0.46 – 1.12
Risk-free interest rate			3.6  – 4.2	%			4.2 – 5.2	%
Expected volatility			130 – 138	%			90 – 105	%
Expected dividend yield			0	%			0	%
Expected life of options (in years)			5.0				5.0

The following table summarizes the exercise price range as of December 31, 2025 (in thousands):

 

Exercise Price		Outstanding Options				Exercisable Options
$0.00 – 1.00			610				390
$1.00 – 2.00			3,191				1,611
$2.00 – 3.00			1,260				1,260
$3.00 – 6.00			158				38
$6.00 – 8.00			962				937
$8.00 – 12.00			302				227
$12.00 – 22.00			580				100
			7,063				4,563

 

The weighted average grant-date fair value of stock options granted during the years ended December 31, 2025 and 2024 was $11.09 per share and $0.92 per share, respectively. As of December 31, 2025, total unrecognized compensation cost related to common stock options was $8.6 million, which is expected to be recognized over a period of 3 years.

 

Restricted Stock

 

As of December 31, 2025, there were 700 thousand shares of the Company’s common stock issued and unvested, which had been awarded as stock-based compensation under the 2022 Plan. The following table summarizes the Company’s activity for restricted stock tied to vesting schedules for the year ended December 31, 2025, 2024 and 2023 (in thousands):

 

		Number Outstanding				Weighted Average Fair Value
Unvested as of January 1, 2023			50			$	5.70
Granted			2,429				1.36
Vested			(1,046	)			1.48
Forfeited			(24	)			1.28
Unvested as of December 31, 2023			1,409				1.42
Granted			904				1.58
Vested			(1,049	)			1.82
Unvested as of December 31, 2024			1,264				1.20
Granted			150				10.95
Vested			(698	)			2.14
Forfeited			(16	)			0.67
Unvested as of December 31, 2025			700			$	5.62

Stock-based compensation

 

The Company recognized stock-based compensation expense related to common stock options and restricted shares of common stock in the following expense categories of its consolidated statements of operations (in thousands):

 

		Year Ended December 31,
		2025				2024				2023
Research and development		$	2,701			$	4,024			$	2,080
Selling and marketing			214				301				(279	)
General and administrative			5,744				1,457				2,470
Total stock-based compensation		$	8,659			$	5,782			$	4,271

 

For the years ended December 31, 2025, 2024 and 2023, the statement of stockholders’ equity was higher by $1.5 million, lower by $1.5 million and lower by $33 thousand, respectively, as compared to the statement of cash flows for timing differences between award dates and the realization of stock-based compensation expense.

 

The Company did not issue any shares of common stock as compensation during the year ended December 31, 2025. In terms of new issuances, the Company issued 150 thousand shares of the Company’s common stock to employees in the year ended December 31, 2025 (the “2025 SBC Awards”), 995 thousand shares in the year ended December, 2024 (the “2024 SBC Awards) and 2.3 million shares in the year ended December 31, 2023 (the “2023 SBC Awards”).

 

The 2025 SBC Awards included 150 thousand such shares to an employee per their respective employment agreement. 50 thousand shares were immediately vested and subject to a three-year claw back. The remaining 100 thousand shares are restricted with the following vesting schedule: 25,000 shares vested annually based on the performance of certain milestones through 2029.

 

The 2024 SBC Awards included 218 thousand such shares to former executives per their respective employment and separation agreements (the “Separation Agreement Shares”) and 777 thousand such shares as performance and incentive awards, which included 727 thousand shares of the Company’s common stock issued to 30 employees as payment in lieu of cash for 2023 performance bonuses (the “2024 Performance Incentive Shares”) and 50 thousand shares of common stock as retention bonuses to five employees identified as key technical staff (the “2024 Retention Incentive Shares”). The 2024 Performance Incentive Shares are restricted with the following vesting schedule: one-half vested on December 31, 2024 and one-half vested on December 31, 2025. The 2024 Retention Incentive Shares are restricted and vested on December 31, 2024.

 

The Company recognized $197 thousand and $815 thousand of stock-based compensation expense during the year ended December 31, 2024 in conjunction with the Separation Agreement Shares and 2024 Retention Incentive Shares, respectively, and does not expect future expense related to these offerings as they are fully vested. In conjunction with the 2024 Performance Incentive Shares, the Company recognized $233 thousand of stock-based compensation expense during the year ended December 31, 2025 compared with $244 thousand during the year ended December 31, 2024.

 

The 2023 SBC Awards included 854 thousand shares of the Company’s common stock issued to 35 employees as payment in lieu of cash for 2022 performance bonuses (the “2023 Performance Incentive Shares”) and 1.5 million shares of the Company’s common stock as long-term incentive bonuses to five employees identified as key technical staff (the “2023 Retention Incentive Shares”). The 2023 Performance Incentive Shares are restricted and vested in equal halves on the December 31, 2023 and 2024. As of December 31, 2024, the Company canceled 23,600 of the issued shares that were forfeited by employees no longer with the Company and does not expect future expense related to these offerings as they are fully vested. The 2023 Retention Incentive Shares are restricted and vest annually in equal amounts over a five-year period as follows: twenty percent (20%) vested or will vest on each December 31 of 2023, 2024, 2025, 2026 and 2027, subject to the grantee continuing to perform services for the Company in the capacity in which the grant was received on each applicable vesting date. In conjunction with the 2023 Performance Incentive Shares, the Company recognized $462 of stock-based compensation expense during the year ended December 31, 2025 and does not expect future expense related to these offerings as they are fully vested. In conjunction with the 2023 Retention Incentive Shares, the Company recognized $426 thousand, $533 thousand and $320 thousand of stock-based compensation expense during the years ended December 31, 202 December 31, 2024 and 2023, respectively, and expects future expense related to these offerings to total $852 thousand over the remaining vesting periods. 

Stock-based compensation for services

 

The Company recognized $18 thousand, $23 thousand and $284 thousand during the years ended December 31, 2025, 2024 and 2023, respectively, in stock-based compensation for services in lieu of cash payments to certain consultants, including expenses for both shares issued and stock option awards granted. For the years ended December 31, 2025, 2024 and 2023, the statement of stockholders’ equity was the same, lower by $113 thousand and $2.2 million, respectively, as compared to the statement of cash flows for timing differences between award dates and the realization of stock-based compensation for services expense.

 

In terms of issuances, the Company issued no shares of the Company’s common stock to consultants for services in the year ending December 31, 2025, as compared to 141 thousand shares of the Company’s common stock issued to consultants for market and media advisory services in the year ending December 31, 2024.