Rani Therapeutics Holdings, Inc. Stock Compensation Disclosure
11. Stock-Based Compensation
Stock Options
A summary of stock option activity during the periods indicated is as follows:
|
|
Number of Stock Option Awards |
|
|
Weighted Average Exercise Price |
|
|
Weighted |
|
|
Aggregate Intrinsic Value (in thousands) |
|
||||
Balance at December 31, 2023 |
|
|
6,639,811 |
|
|
$ |
6.37 |
|
|
|
8.48 |
|
|
$ |
13,377 |
|
Granted |
|
|
4,204,325 |
|
|
$ |
3.72 |
|
|
|
9.25 |
|
|
$ |
— |
|
Exercised |
|
|
(18,757 |
) |
|
$ |
2.72 |
|
|
|
|
|
|
|
||
Canceled |
|
|
(599,946 |
) |
|
$ |
5.10 |
|
|
|
|
|
|
|
||
Balance at December 31, 2024 |
|
|
10,225,433 |
|
|
$ |
5.52 |
|
|
|
8.18 |
|
|
$ |
— |
|
Exercisable at December 31, 2024 |
|
|
5,162,703 |
|
|
$ |
7.52 |
|
|
|
7.58 |
|
|
$ |
— |
|
Nonvested at December 31, 2024 |
|
|
5,062,730 |
|
|
$ |
3.46 |
|
|
|
8.79 |
|
|
$ |
— |
|
The Company uses the Black-Scholes option pricing model to estimate the fair value of each stock option award on the date of grant. The assumptions and estimates are as follows:
The following table sets forth the weighted average assumptions used in estimating the fair value of stock option awards on the grant date:
|
|
Year Ended December 31, |
||||||||
|
|
2024 |
|
|
|
2023 |
|
|
||
Expected volatility |
|
|
87.6 |
|
% |
|
84.0 - 85.8 |
|
% |
|
Risk-free interest rate |
|
|
4.30 |
|
% |
|
3.73 - 3.93 |
|
% |
|
Expected term (in years) |
|
|
6.0 |
|
|
|
5.1 - 5.9 |
|
|
|
Expected dividend yield |
|
|
— |
|
% |
|
|
— |
|
% |
As of December 31, 2024, there was $18.4 million of unrecognized stock-based compensation expense related to stock options which is expected to be recognized over a weighted-average period of approximately 2.6 years.
Restricted Stock Units
A summary of RSU activity during the periods indicated is as follows:
|
|
Number of Restricted Stock Units |
|
|
Weighted Average Grant-Date Fair Value per Share |
|
||
Balance at December 31, 2023 |
|
|
1,276,111 |
|
|
$ |
7.16 |
|
Vested |
|
|
(394,760 |
) |
|
$ |
7.29 |
|
Forfeited |
|
|
(69,458 |
) |
|
$ |
7.42 |
|
Balance at December 31, 2024 |
|
|
811,893 |
|
|
$ |
7.08 |
|
As of December 31, 2024, there was $4.9 million of unrecognized stock-based compensation expense related to RSUs which is expected to be recognized over a weighted-average period of approximately 2.0 years. The total fair value of RSUs vested was $1.1 million for the year ended December 31, 2024.
Restricted Stock Awards
A summary of RSA activity during the periods indicated is as follows:
|
|
Number of Restricted Stock Awards |
|
|
Weighted Average Grant-Date Fair Value per Share |
|
||
Balance at December 31, 2023 |
|
|
33,586 |
|
|
$ |
6.15 |
|
Vested |
|
|
(30,002 |
) |
|
$ |
6.14 |
|
Forfeited |
|
|
(327 |
) |
|
$ |
6.13 |
|
Balance at December 31, 2024 |
|
|
3,257 |
|
|
$ |
6.17 |
|
As of December 31, 2024, unrecognized stock-based compensation expense related to RSAs was de minimis which is expected to be recognized over a weighted-average period of approximately 0.1 years. The total fair value of RSAs vested was $0.1 million for the year ended December 31, 2024.
ESPP
As of December 31, 2024, 0.2 million shares of Class A common stock have been issued under the ESPP. During the years ended December 31, 2024 and 2023, the Company recognized $0.2 million and $0.3 million, respectively, of stock-based compensation expense related to the ESPP. As of December 31, 2024, unrecognized stock-based compensation expense related to the ESPP was de minimis which is expected to be recognized over a weighted-average period of approximately 0.1 years. As of December 31, 2024, contributions withheld from employees was de minimis and are recorded as a component of accrued expenses and other current liabilities in the consolidated balance sheet.
Stock-Based Compensation Expense
The following table summarizes the components of stock-based compensation expense resulting from the grant of stock options, RSUs, RSAs, and the ESPP, recorded in the Company’s consolidated statement of operations and comprehensive loss (in thousands):
|
|
Year Ended December 31, |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
Research and development |
|
$ |
4,700 |
|
|
$ |
6,407 |
|
General and administrative |
|
|
11,331 |
|
|
|
12,601 |
|
Total stock-based compensation |
|
$ |
16,031 |
|
|
$ |
19,008 |
|
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.