XML 32 R18.htm IDEA: XBRL DOCUMENT

Stock Options

12 Months Ended

Dec. 31, 2023

Stock Options

12. Stock Options

The Innodata Inc. 2013 Stock Plan (as amended, the “2013 Plan”) expired in accordance with its terms on June 3, 2023. Pursuant to the terms of the 2013 Plan, no further awards may be granted under the 2013 Plan following its expiration. As of December 31, 2023, there were 5,567,966 shares of our common stock underlying outstanding options or rights under the 2013 Plan. Outstanding awards made under the 2013 Plan prior to the 2013 Plan’s expiration will remain in effect until such awards have been satisfied or terminated in accordance with the terms of the 2013 Plan and such awards.

On June 9, 2022, stockholders of the Company approved amendments to the Innodata Inc. 2021 Equity Compensation Plan (as amended, the “2021 Plan”). The number of shares of common stock of Innodata Inc. that may be delivered, purchased or used for reference purposes (with respect to stock appreciation rights or stock units) for awards granted under the 2021 Plan is 4,000,000 (the “Share Reserve”). Shares subject to an option or stock appreciation right granted under the 2021 Plan count against the Share Reserve as one share for every share granted, and shares subject to any other type of award granted under the 2021 Plan count against the Share Reserve as two shares for every share granted for awards granted prior to April 11, 2022, and one and a half shares for every share granted for awards granted on or after April 11, 2022. Any shares withheld, tendered or exchanged by a participant in the 2021 Plan as full or partial payment to Innodata of the exercise price under an option under the 2021 Plan or in satisfaction of a participant’s tax withholding obligations with respect to any award under the 2021 Plan, will not be added back to the Share Reserve.

The fair value of stock options is estimated on the date of grant using the Black-Scholes option pricing model. The weighted-average fair value of the options granted, and weighted-average assumptions were as follows:


		For the Years Ended December 31,
		2023			2022

Weighted average fair value of options granted		$	2.56		$	2.67
Risk-free interest rate			4.34	%		1.94% - 4.09	%
Expected term (years)			6.0			3-6.42
Expected volatility factor			75.35	%		62%-79	%
Expected dividends			None			None

The Company estimates the risk-free interest rate using the U.S. Treasury yield curve for periods equal to the expected term of the options in effect at the time of grant. The expected term of options granted is based on a combination of vesting schedules, term of the options and historical experience. Expected volatility is based on the historical volatility of the Company’s common stock. The Company uses an expected dividend yield of zero since it has never declared or paid any dividends on its capital stock.

Stock Options

2013 Plan

A summary of stock option activity under the Innodata Inc. 2013 Stock Plan, as amended and restated effective June 7, 2016 (the “2013 Plan”) and changes during each of the years ended December 31, 2023 and 2022 are presented below.


							Weighted-Average
				Weighted -Average			Remaining
		Number of		Exercise			Contractual Term		Aggregate
		Options		Price			(years)		Intrinsic Value
Outstanding at January 1, 2022		5,536,896		$	2.66
Granted		1,774,558			4.91
Exercised		(248,763)			1.34
Forfeited/Expired		(372,201)			6.55
Outstanding at December 31, 2022		6,690,490		$	3.09		7.19		$	5,989,709
Granted*		25,000			3.31
Exercised		(1,287,462)			2.37
Forfeited/Expired		(88,866)			6.27
Outstanding at December 31, 2023		5,339,162		$	3.22		6.38		$	28,640,009

Exercisable at December 31, 2023		3,475,780		$	2.18		6.40		$	22,237,334

Vested and Expected to Vest at December 31, 2023		5,339,162		$	3.22		6.38		$	28,640,009

* Includes 25,000 stock options granted to a non-employee member of the Company’s advisory board.

2021 Plan

A summary of option activity under the Innodata Inc. 2021 Equity Compensation Plan, as amended and restated effective as of April 11, 2022 (the “2021 Plan”) and changes during each of the years ended December 31, 2023 and 2022 are presented below.


							Weighted-
				Weighted -			Average
				Average			Remaining		Aggregate
		Number of		Exercise			Contractual		Intrinsic
		Options		Price			Term (years)		Value

Outstanding at January 1, 2022		-		$	-
Granted		1,030,000			3.46
Exercised		-			-
Forfeited/Expired		(2,500)			3.41
Outstanding at December 31, 2022		1,027,500		$	3.46		9.75		$	-
Granted		3,000			13.05
Exercised		(63,595)			4.59
Forfeited/Expired		(43,334)			3.41
Outstanding at December 31, 2023		923,571		$	3.41		8.76		$	4,786,252

Exercisable at December 31, 2023		386,209		$	3.34		8.74		$	2,023,601

Vested and Expected to Vest at December 31, 2023		923,571		$	3.41		8.76		$	4,786,252

Restricted Stock Awards

There were no outstanding awards of restricted stock under the 2013 Plan or the 2021 Plan (collectively, the “Equity Plans”) during each of the years ended December 31, 2023 and 2022.

Restricted Stock Units

Restricted stock unit activity under the Equity Plans during each of the years ended December 31, 2023 and 2022 are presented below:


				Weighted-
		Number of		Average
		Restricted Stock		Grant Date
		Units		Fair Value

Unvested at January 1, 2023		700,000		$	5.59
Granted		49,756			8.29
Vested		-			-
Forfeited/Expired		-			-
Unvested at December 31, 2023		749,756		$	5.77

During the year ended December 31, 2023, a total of 49,756 restricted stock units (“RSUs”) were granted. 28,804 RSUs were granted to employees under the 2013 Plan, and 20,952 RSUs were granted to non-employee directors of the Company under the 2021 Plan. Vesting of the RSUs granted to employees is contingent on continuous employment by the employee for a 12-month period from the date of grant, and each fully vested RSU represents the right to receive one share of the Company’s common stock or the fair market value of one share of common stock, at the Company’s discretion, and is classified as an equity award. Vesting of the RSUs granted to the non-employee directors occurs on the earlier of (i) one year from the date of grant; or (ii) the date of the Company’s 2024 annual meeting of stockholders, and each fully vested RSU represents the right to receive one share of the Company’s common stock and is classified as an equity award.

The stock-based compensation expense is recognized on a straight-line basis over a period of 12 months. The fair value of restricted stock units is based on the closing price of the stock at the time of the grant.


				Weighted-
		Number of		Average
		Restricted Stock		Grant Date
		Units		Fair Value

Unvested at January 1, 2022		-		$	-
Granted		700,000			5.59
Vested		-			-
Forfeited/Expired		-			-
Unvested at December 31, 2022		700,000		$	5.59

During the year ended December 31, 2022, 700,000 performance-based RSUs were granted under the Equity Plans and remain non-vested as of December 31, 2023. Vesting of these RSUs is contingent on the achievement of certain financial performance goals and continuation of employment for a defined period. Each RSU vests pursuant to the vesting schedule found in the respective RSU agreement. The fair value of restricted stock units is estimated on the date of grant using the Binomial option pricing model.

The compensation cost related to non-vested stock options not yet recognized as of December 31, 2023 totaled approximately $3.5 million. The weighted-average period over which these costs will be recognized is 15 months.

The compensation cost related to non-vested restricted stock units not yet recognized as of December 31, 2023 totaled approximately $3.1 million. The weighted-average period over which these costs will be recognized is 14 months.