SANUWAVE Health, Inc.SNWV
SANUWAVE Health, Inc. Stock Compensation Disclosure
Stock-Based Compensation
On August 7, 2024, the stockholders of the Company approved the 2024 Equity Incentive Plan (the “2024 Plan”). The 2024 Plan authorizes the issuance of up to 1,376,556 shares of common stock. On August 19, 2025, at our annual meeting of stockholders, an amendment to the 2024 Plan was approved, authorizing an additional 500,000 shares of common stock authorized for issuance under the 2024 Plan. Stock options granted under the 2024 Plan include service-based, performance-based, and market-based awards. Service-based stock options generally vest over a three-year period, expire 10 years from the date of grant, and are forfeited upon separation from the Company. Performance-based stock options vest upon the achievement of pre-established financial or operational performance criteria, as determined by the Company’s Board of Directors or Compensation Committee. These awards generally expire five years from the date of grant and are subject to forfeiture if the performance goals are not achieved within the specified performance period. Market-based stock options vest upon the attainment of certain market conditions, such as specified stock price targets, and also expire five years after the grant date. The fair value of market-based awards is estimated using a Monte Carlo simulation model.
All awards under the 2024 Plan are subject to the terms and conditions of the 2024 Plan and the individual award agreements.
During the fiscal year ended December 31, 2025, the Company granted performance- and market-based option awards to three employees which provide for the vesting of up to 65,500 shares of common stock. Vesting is contingent upon the achievement of specified performance or market conditions, with 100% of the related shares vesting upon satisfaction of each applicable condition.
The performance conditions include the achievement of (a) specific revenue recognized (12,750 shares), (b) specific adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) targets (12,750 shares), (c) listing on Nasdaq (10,000 shares), (d) the refinancing or repayment of certain debt obligations (10,000 shares), and (e) various operations related milestones (10,000 shares). The market condition relates to the attainment of a defined stock price target (10,000 shares).
During the fiscal year ended December 31, 2025, 5,500 shares subject to performance conditions (2,750 shares under criterion (a) and 2,750 shares under criterion (b)) were forfeited due to the termination of one of the employees and 5,000 shares under criterion (e) were forfeited due to the milestone deadline not being achieved. As a result, the maximum number of shares eligible to vest under these awards was reduced to 55,000 shares as of December 31, 2025.
As of December 31, 2025, the Company concluded that the performance conditions related to revenue and adjusted EBITDA were not probable of achievement, and accordingly, no compensation expense was recognized for those awards. The debt refinancing condition, the listing on Nasdaq and half of the various operations related milestones were achieved during the fiscal year ended December 31, 2025, and the related compensation expense was recognized in the year.
The market condition has not been met as of December 31, 2025; however, compensation expense for the market-based award is recognized on a straight-line basis over the requisite service period, regardless of whether the market condition is
ultimately satisfied. If the condition is achieved prior to the end of the service period, any unrecognized expense will be recognized immediately.
On November 1, 2010, the Company approved the Amended and Restated 2006 Stock Incentive Plan of SANUWAVE Health, Inc. effective as of January 1, 2010 (the “Stock Incentive Plan”). Upon the approval of the 2024 Plan by the Company's stockholders, no further awards will be made under the Stock Incentive Plan.
The Stock Incentive Plan permitted grants of awards to selected employees, directors, and advisors of the Company in the form of restricted stock or options to purchase shares of common stock. Options granted may include non-statutory options as well as qualified incentive stock options. The Stock Incentive Plan is administered by the board of directors of the Company. The Stock Incentive Plan gives broad powers to the board of directors of the Company to administer and interpret the form and conditions of each option.
The following table presents stock compensation expense recognized by the Company for the fiscal years ended December 31, 2025 and 2024. Total unrecognized compensation cost related to equity awards as of December 31, 2025 was $10.3 million and is expected to be recognized over a weighted average period of 2.25 years. Total unrecognized compensation cost related to equity awards as of December 31, 2024 was $8.3 million and was expected to be recognized over a period of 3 years. All stock compensation expense from the Stock Incentive Plan was recognized prior to 2024. The first grants from the 2024 Plan were issued in the three months ended December 31, 2024. The Company recognizes compensation expense on a straight-line basis over the requisite service period, net of actual forfeitures.
| Year ended December, 31 | ||||||||||||||
| (in thousands) | 2025 | 2024 | ||||||||||||
| Cost of revenues | $ | 52 | $ | - | ||||||||||
| General and administrative | 3,929 | 1,514 | ||||||||||||
| Selling and marketing | 826 | - | ||||||||||||
| Research and development | 43 | - | ||||||||||||
| Total expense | $ | 4,850 | $ | 1,514 | ||||||||||
The following table presents a summary of stock option activity:
| Number of Options (in thousands) | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (Years) | Aggregate Intrinsic Value (in thousands) | ||||||||||||||||||||
| Outstanding | 43 | $ | 51.55 | 3.4 | $ | - | |||||||||||||||||
| Granted | 1,119 | - | 9.8 | 9,253 | |||||||||||||||||||
| Exercised | - | - | – | - | |||||||||||||||||||
| Forfeited | (25) | - | – | - | |||||||||||||||||||
| Outstanding, December 31, 2024 | 1,137 | $ | 15.97 | 9.5 | $ | 9,305 | |||||||||||||||||
| Exercisable, December 31, 2024 | 117 | $ | 28.71 | 6.8 | $ | 641 | |||||||||||||||||
| Granted | 541 | 31.07 | 7.7 | 617 | |||||||||||||||||||
| Exercised | (38) | 14.67 | - | 575 | |||||||||||||||||||
| Forfeited | (268) | 18.42 | - | - | |||||||||||||||||||
| Outstanding, December 31, 2025 | 1,372 | $ | 21.46 | 8.4 | $ | 13,351 | |||||||||||||||||
| Exercisable, December 31, 2025 | 493 | $ | 20.08 | 7.9 | $ | 5,581 | |||||||||||||||||
Valuation Information for Stock-Based Compensation
The fair value of each stock option award during the fiscal year ended December 31, 2025 was based on the closing price of the Company's common stock on the date of the grant. Expected volatility was based on 100% of the historical realized volatilities of peer companies. The risk-free interest rate was based on the implied yield for U.S. Treasury zero-coupon
issue with the remaining term equal to the expected term. The expected holding period was calculated using the simplified method. No dividend was assumed as the Company does not pay regular dividends on its common stock and does not anticipate paying any dividends in the foreseeable future. The Company's policy is to recognize forfeitures as they occur.
The weighted average assumptions used in the Black-Scholes option pricing model in valuing stock options granted in the years ended December 31, 2025 and December 31, 2024 are summarized in the table below:
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Fair value at grant date | 31.13 | 14.54 | |||||||||
| Expected volatility | 62.9% | 62.8% | |||||||||
| Risk-free interest rate | 4.0% | 4.1% | |||||||||
| Expected holding period, in years | 5.2 years | 6.1 years | |||||||||
| Dividend yield | - | - | |||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 26, 2026 | Showing above |
| 2024 | Mar 20, 2025 | |
| 2023 | Mar 21, 2024 | |
| 2022 | Mar 31, 2023 | |
| 2021 | May 13, 2022 | |
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.