Company: AWRE
Filing Date: 2025-03-13
Form Type: 10-K
Source: 0000950170-25-038714
Chunk: 124

Company: AWARE INC /MA/
Filing Date: 2025-03-13
Form: 10-K
Item: Item 8
Chunk 124
---
 Research and development

        156

        309

        Selling and marketing

        63

        88

        General and administrative

        913

        1,128

        Stock-based compensation expense
         
        $
        1,132

        $
        1,525

       Stock-based compensation expense in the preceding table includes expenses associated with grants of: i) stock options, ii) unrestricted shares of our common stock; and iii) performance share awards.  The methods used to determine stock-based compensation expense for each type of equity grant are described in the following paragraphs.Stock Option Grants. During the year ended December 31, 2024, we granted 640,000 common stock options to purchase our common stock under the 2023 plan.  We did not grant any stock options during the year ended December 31, 2023.  We estimate the fair value of stock options using the Black-Scholes valuation model.  The Black-Scholes valuation model takes into account the exercise price of the award, as well as a variety of significant assumptions. The assumptions used to estimate the fair value of stock options include the expected term, the expected volatility of our stock over the expected term, the risk-free interest rate over the expected term, and our expected annual dividend yield. We account for forfeitures as they occur. We believe that the valuation technique and the approach utilized to develop the underlying assumptions are appropriate in calculating the fair values of stock options granted.  Estimates of fair value are not intended to predict actual future events or the value ultimately realized by persons who receive equity awards.   On January 17, 2024, our stockholders approved a stock option exchange program (the “Exchange Offer”) pursuant to which eligible employees, primarily consisting of our executive officers and senior management, were able to exchange certain stock options (the “Eligible Options”) for replacement stock options with modified terms (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,