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Stock Options

12 Months Ended

Dec. 31, 2024

Stock Options

11. 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, 2024, there were 3,365,193 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, 2023, 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, 2023, and one and a half shares for every share granted for awards granted on or after April 11, 2023. 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 Year Ended December 31,
		2024			2023

Weighted average fair value of options granted		$	32.07		$	2.56
Risk-free interest rate			4.40	%		4.34	%
Expected term (years)			6.0			6.0
Expected volatility factor			87.69	%		75.35	%
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 option activity under the 2013 Plan and changes during each of the years ended December 31, 2024 and 2023 are presented below.


							Weighted-Average
				Weighted -Average			Remaining
		Number of		Exercise			Contractual Term		Aggregate
		Options		Price			(years)		Intrinsic Value
Outstanding at January 1, 2024		5,339,162		$	3.22		6.38		$	28,640,009
Granted		-			-
Exercised		(2,169,968)			2.54
Forfeited/Expired		(4,001)			6.96
Outstanding at December 31, 2024		3,165,193		$	3.67		6.32		$	113,458,326

Exercisable at December 31, 2024		1,673,966		$	2.54		5.51		$	61,901,891

Vested and Expected to vest at December 31, 2024		3,165,193		$	3.67		6.32		$	113,458,326


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

Outstanding at January 1, 2023		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 2021 Plan and changes during each of the years ended December 31, 2024 and 2023 are presented below.


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

Outstanding at January 1, 2024		923,571		$	3.41		8.76		$	4,786,252
Granted		268,500			42.57
Exercised		(336,264)			3.44
Forfeited/Expired		(13,536)			4.84
Outstanding at December 31, 2024		842,271		$	15.86		8.46		$	20,847,471

Exercisable at December 31, 2024		314,244		$	3.32		7.73		$	11,374,251

Vested and Expected to vest at December 31, 2024		842,271		$	15.86		8.46		$	20,847,471


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

Outstanding at January 1, 2023		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

A total of 268,500 options were granted during the year ended December 31, 2024.

During the year ended December 31, 2024, a total of 2,506,232 options were exercised at an average exercise price of $2.66.

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, 2024 and 2023.

Restricted Stock Units

Restricted stock unit activity under the Equity Plans during each of the years ended December 31, 2024 and 2023 are presented below:


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

Unvested at January 1, 2024		749,756		$	5.77
Granted		549,079			40.61
Vested		(48,761)			8.42
Forfeited/Expired		(995)			8.29
Unvested at December 31, 2024		1,249,079		$	20.98


				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

There were a total of 34,246 restricted stock units granted to non-employees and non-employee directors during the year ended December 31, 2024.

As of December 31, 2024, there were 200,000 and 1,049,079 outstanding restricted stock unit awards under the 2013 Plan and 2021 Plan, respectively.

The stock-based compensation expense is recognized on a straight-line basis over a period of 36 months. The fair value of restricted stock units is based on the closing price of the stock at the time of the grant.

The compensation cost related to non-vested stock options not yet recognized as of December 31, 2024 totaled approximately $9.1 million. The weighted-average period over which these costs will be recognized is 34 months.

The compensation cost related to non-vested restricted stock units not yet recognized as of December 31, 2024 totaled approximately $21.9 million. The weighted-average period over which these costs will be recognized is 16 months.