Company: AWRE
Filing Date: 2025-03-13
Form Type: 10-K
Source: 0000950170-25-038714
Chunk: 70

Company: AWARE INC /MA/
Filing Date: 2025-03-13
Form: 10-K
Item: Item 5
Chunk 70
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 (the “New Options”) as described below. We commenced the Exchange Offer on January 19, 2024.  

47

The Exchange Offer expired on February 20, 2024. Pursuant to the Exchange Offer, nine employees elected to exchange their Eligible Options, and we accepted for cancellation Eligible Options to purchase an aggregate of 2,180,000 shares of common stock, representing approximately 96% of the total shares of common stock underlying the Eligible Options. Following the expiration of the Exchange Offer, on February 20, 2024, we granted New Options to purchase 933,073 shares of Common Stock, pursuant to the terms of the Exchange Offer and our 2023 Plan. The exercise price per share of the New Options granted pursuant to the Exchange Offer was $2.21 per share. Each New Option will vest and become exercisable, with respect to 50% of the shares of common stock underlying such New Option on the first anniversary of the grant date and, with respect to the remaining shares of common stock underlying such New Option, in twelve equal monthly installments thereafter, subject to the continuous service of the holder. The other terms and conditions of the New Options will be governed by the terms and conditions of the 2023 Plan  and the nonstatutory stock option agreements entered into thereunder.  There was no incremental expense for the New Options as calculated using the Black-Scholes option pricing model.  The unamortized expense remaining on the Eligible Options, as of the modification date, will be recognized over the new vesting schedule. During the year ended December 31, 2024 we expensed an incremental $0.3 million in stock based compensation expense related to the accelerated vesting of stock options of our former Chief Executive Officer. Specific assumptions used to determine the fair value of options granted during the year ended December 31, 2024, using the Black-Scholes valuation model were as follows: 

        Year endedDecember 31,

        2024

        Expected term (1)
         
        6.25 years

        Expected volatility factor (2)

        53
        %

        Risk-free interest rate (3)

        4.2
        %

        Expected annual dividend yield
         
        n/a

       (1) The expected term for each grant was determined based on the simplified method.(2) The expected volatility for each grant is estimated based on an average of historical volatility over