SIGA TECHNOLOGIES INC Stock Compensation Disclosure

9. Stock Compensation Plans

 

The Company’s 2010 Stock Incentive Plan (the “2010 Plan”) was initially adopted in May 2010. The 2010 Plan provided for the issuance of stock options, restricted stock and unrestricted stock with respect to an aggregate of 2,000,000 shares of the Company’s common stock to employees, consultants and outside directors of the Company. On May 17, 2011, the 2010 Plan was amended to provide for the issuance of RSUs and on February 2, 2012, the 2010 Plan was amended to provide for the issuance of stock-settled stock appreciation rights ("SSARs"). Effective April 25, 2012 and May 23, 2017, the 2010 Plan was amended to increase the maximum number of shares of common stock available for issuance to an aggregate of 4,500,000 shares and 8,500,000 shares, respectively. The vesting period for awards granted under the 2010 Plan is determined by the Compensation Committee of the Board of Directors. The Compensation Committee also determines the expiration date of each equity award; however, stock options  may not be exercisable more than ten years after the date of grant as the maximum term of equity awards issued under the 2010 Plan is ten years.

 

For the years ended December 31, 2025, 2024 and 2023, the Company recorded stock-based compensation expense, including stock options, PSUs, and RSUs, of approximately $3.7 million, $3.6 million and $2.1 million, respectively.

 

Stock Options

Stock option awards provide holders the right to purchase shares of Common Stock at prices determined by the Compensation Committee, at the time of grant, and must have an exercise price equal to or in excess of the fair market value of the Company’s common stock at the date of grant.

 

The fair value of options granted is estimated at the date of grant. Expected volatility has been estimated using the historical volatility of the Company's common stock using historical periods equivalent to the options’ expected lives. The expected dividend yield assumption reflects that the Company does not have a recurring dividend program. The risk-free interest rate assumption is based upon observed interest rates for securities with maturities approximating the options’ expected lives. The expected life was estimated based on historical experience and expectation of employee exercise behavior in the future giving consideration to the contractual terms of the award.

 

The fair value of stock options issued under our stock plan have been estimated with the following assumptions:

 

		Year Ended December 31, 2025
Weighted Average Expected Life (in Years)		10
Risk-free Interest Rate		4.3%
Volatility		74.4%
Dividend Yield		0%

 

A summary of the Company’s stock option activity is as follows:

 

						Weighted				Weighted
						Average				Average				Aggregate
		Number of				Exercise				Remaining Life				Intrinsic
		Options				Price				(in years)				Value
Outstanding at January 1, 2025 (1)			694,914			$	4.99
Granted			34,657				5.50
Exercised			—				—
Canceled/Expired			—				—
Outstanding at December 31, 2025			729,571			$	5.02				7.51			$	956,848
Vested and Expected to Vest at December 31, 2025			729,571			$	5.02				7.51			$	956,848
Exercisable at December 31, 2025			431,183			$	5.13				7.09			$	518,504

 

⁽¹⁾ Balances as of January 1, 2025 differ from those as of December 31, 2024 presented in the Company's 2024 Form 10-K due to the special dividend paid during 2025. In connection with the dividend, the number of options and the weighted average exercise price were adjusted pursuant to the terms of the Company's 2010 Plan.

 

As of December 31, 2025, the remaining unrecognized stock-based compensation cost related to stock options expected to be recognized is $0.6 million. The total fair value of stock options which vested during the years ended December 31, 2025 and 2024 was approximately $1,233,092 and $24,964, respectively.

 

There were no stock options exercised during the years ended December 31, 2025 and December 31, 2024. The stock options exercised during the year ended December 31, 2023 had an intrinsic value of less than $0.1 million. The intrinsic value represents the amount by which the market price of the underlying stock exceeds the exercise price of an option.

 

Restricted Stock Units

RSUs awarded to employees vest on schedules of between one year and three years, and RSUs awarded to directors of the Company vest over a one-year period. A summary of the Company’s RSU activity is as follows:

 

						Weighted
						Average
		Number of				Grant-Date
		RSUs				Fair Value
Outstanding at January 1, 2025 (1)			450,162			$	6.58
Granted (2)			631,560				5.66
Vested and released			(306,833	)			6.92
Canceled/Expired			(1,212	)			5.58
Outstanding at December 31, 2025 (2)			773,677			$	5.69

 

⁽¹⁾ includes 40,075 awards which were settled in cash.

⁽²⁾ includes 50,645 awards which were expected to be settled in cash.

 

As of December 31, 2025, $2.8 million of total remaining unrecognized stock-based compensation cost related to RSUs is expected to be recognized over the weighted-average remaining requisite service period of 1.7 years. The weighted average fair value at the date of grant for restricted stock awards granted during the years ended December 31, 2025, 2024 and 2023 was $5.66, $5.51 and $6.14 per share, respectively. The total fair value of restricted stock and restricted stock units vested and released during the years ended December 31, 2025, 2024 and 2023 was approximately $2.0 million, $2.6 million and $1.9 million, respectively.

 

 

Restricted Stock Units with a Performance or Market Condition

 

In the year ended December 31, 2025, the Company issued PSUs to certain executives, which provided the right to receive shares of common stock, upon achievement of performance milestones to be determined and service over a three-year performance period ending March 2027. A total of 387,762 PSUs were awarded with 1/3 being based on the achievement of a performance condition within the period of one year from issuance. The performance conditions for the remaining 2/3 of the 2025 award will be determined at a future date. The PSUs that are conditionally earned will become vested if the executive remains in service with the Company through the third anniversary of the issuance date.

 

The annual performance conditions are established in March of each year. Therefore, in accordance with ASC 718, Compensation – Stock compensation, the grant date (and fair value measurement date) for each Tranche Year is the date in March of each year when a mutual understanding of the key terms and conditions are reached.

 

At each reporting period, the amount of stock-based compensation is determined based on the probability of achievement against the pre-established performance measures and if necessary, a cumulative catch-up adjustment is recorded to reflect any revised estimates regarding the probability of achievement.

 

The following table summarizes the unvested performance or market condition stock unit activity for the year ended December 31, 2025:

 

						Weighted
						Average
		Number of				Grant-Date
		RSUs				Fair Value
Outstanding at January 1, 2025			139,338			$	3.54
Granted (1)			129,254				5.45
Vested and released			(6,920	)			7.20
Canceled/Expired			—				—
Outstanding at December 31, 2025 (1)			261,672			$	4.39

 

 

⁽¹⁾ excludes 258,508 awards which were not considered granted as the performance condition is not known.

 

As of December 31, 2025, there is no remaining unrecognized stock-based compensation cost related to PSUs outstanding to be recognized. The weighted average fair value at the date of grant for PSUs granted during the years ended  December 31, 2025 and 2024 was $5.45 and $3.35 per share, respectively. There were no PSUs granted during the year ended December 31, 2023. The total fair value of PSUs vested and released during the years ended  December 31, 2025 and 2024 was approximately $0.1 million, and $0.4 million, respectively.