Company: AWRE
Filing Date: 2025-03-13
Form Type: 10-K
Source: 0000950170-25-038714
Chunk: 125

Company: AWARE INC /MA/
Filing Date: 2025-03-13
Form: 10-K
Item: Item 8
Chunk 125
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 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 the expected term of the stock options.(3) The risk-free interest rate for each grant is based on the U.S. Treasury yield curve in effect at the time of grant for a period equal to the expected term of the stock option. Restricted Stock Units.  The 2023 Plan permits us to grant restricted stock units to our directors, officers, and employees. Upon vesting, each restricted stock unit entitles the recipient to receive a number of shares of common stock as set forth in the relevant restricted stock unit agreement. Stock-based compensation expense for restricted stock units is