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STOCK-BASED COMPENSATION
 9 Months Ended
Sep. 30, 2025
Share-Based Payment Arrangement [Abstract]  
STOCK-BASED COMPENSATION

NOTE 8. STOCK-BASED COMPENSATION

 

In connection with the Closing, the Company adopted the Tevogen Bio Holdings Inc. 2024 Omnibus Incentive Plan (the “2024 Plan”) and no longer grants awards pursuant to the 2020 Equity Incentive Plan (the “2020 Plan”). Each restricted stock unit (“RSU”) award granted under the 2020 Plan that was outstanding and unvested as of the Closing Date was automatically canceled and converted into an award under the 2024 Plan with respect to the common stock of the Company (the “Rollover RSUs”). Such Rollover RSUs remain subject to the same terms and conditions as set forth under the applicable award agreement prior to the Closing.

 

In addition to covering the Rollover RSUs, under the 2024 Plan, the Company is authorized to grant awards up to an aggregate of 40,000,000 shares of common stock plus an annual increase on the first business day of each calendar year for up to 10 years, which increase was 8,899,568 shares in 2025. The 2024 Plan provides for the grant of options, stock appreciation rights, restricted common stock (“Restricted Stock”), RSUs, and other equity-based awards. As of September 30, 2025, awards for 9,469,839 shares remained available to be granted under the 2024 Plan.

 

The Company has issued RSUs that are subject to either service-based vesting conditions or service-based and performance-based vesting conditions. Compensation expense for service-based RSUs is recognized on a straight-line basis over the vesting period of the award. Compensation expense for service-based and performance-based RSUs (“Performance-Based RSUs”) is recognized when the performance condition, which is based on a liquidity event condition being satisfied, is deemed probable of achievement.

 

On the Closing Date, the Company issued an aggregate of 19,348,954 RSUs under the 2024 Plan to Dr. Saadi (the “Special RSU Award”). Such RSUs immediately converted into shares of Restricted Stock, the restrictions on which lapse in four equal annual installments beginning on February 14, 2031 (“Special RSU Vesting Period”). Pursuant to the terms of the Special RSU Award, Dr. Saadi will be entitled to vote the Restricted Stock, but the shares may not be sold, assigned, transferred, pledged, hypothecated, or otherwise encumbered, subject to forfeit. Dr. Saadi will automatically forfeit all unvested Restricted Stock in the event he departs the Company. The fair value per share for the Special RSU Award was determined to be $4.51 per share, equivalent to the Company’s stock price on the Closing Date, resulting in a total grant date fair value of $87,263,783. In accordance with ASC 718, Compensation - Stock Compensation (“ASC 718”), the Company will recognize compensation expense on a straight-line basis from the Closing Date until the completion of the Special RSU Vesting Period.

 

On June 27, 2025, the Company issued an aggregate of 9,250,000 shares of Restricted Stock under the 2024 Plan to the Company’s executive officers, including a grant of 8,000,000 shares of Restricted Stock to Dr. Saadi. The shares of Restricted Stock granted to Dr. Saadi will vest in four equal annual installments beginning on June 27, 2032 and the shares of Restricted Stock granted to each other grantee will vest in three equal annual installments beginning on June 27, 2030 (the “RSA Vesting Period”), subject in each case to the applicable grantee’s continuous service with the Company through the vesting date, and provided that the shares will automatically vest in full in the event of termination due to death or disability. Pursuant to the terms of these awards, the Company’s executive officers are entitled to vote the Restricted Stock, but the shares may not be sold, assigned, transferred, pledged, hypothecated, or otherwise encumbered, subject to automatic forfeit. The Company’s executive officers will automatically forfeit all unvested Restricted Stock in the event they depart the Company for any reason, unless termination of their service triggers accelerated vesting pursuant to the terms of the applicable award agreement or the 2024 Plan. The fair value per share for these awards was determined to be $1.24 per share, equivalent to the Company’s stock price on the grant date, resulting in a total grant date fair value of $11,470,000. In accordance with ASC 718, the Company will recognize compensation expense on a straight-line basis from the grant date until the completion of the RSA Vesting Period.

 

 

TEVOGEN BIO HOLDINGS INC.

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

 

Restricted Stock and RSU activity was as follows:

 

   Service-Based Restricted Stock and RSUs 
   Shares  

Weighted average

grant-date fair value

 
Nonvested as of January 1, 2025   26,690,254   $3.54 
Granted   10,099,847    1.25 
Vested   (5,723,022)   0.98 
Forfeited   —    — 
Nonvested as of September 30, 2025   31,067,079   $3.27 

 

   Service-Based Restricted Stock and RSUs 
   Shares   Weighted average
grant-date fair value		 
Nonvested as of January 1, 2024   —   $— 
Granted   20,239,804    4.33 
Vested   (12,000)   0.59 
Forfeited   —    — 
Nonvested as of September 30, 2024   20,227,804   $4.33 

 

   Performance-Based RSUs 
   Shares   Weighted average
grant-date fair value		 
Nonvested as of January 1, 2025   1,289,578   $3.70 
Granted   —    — 
Vested   (1,000,320)   3.27 
Forfeited   —    — 
Nonvested as of September 30, 2025   289,258    5.18 

 

   Performance-Based RSUs 
   Shares   Weighted average
grant-date fair value		 
Nonvested as of January 1, 2024   10,900,128   $2.97 
Granted   —    — 
Vested   (9,178,656)   2.85 
Forfeited   —    — 
Nonvested as of September 30, 2024   1,721,472    3.19 

 

There was $2,950,772 and $12,105,980 of compensation cost related to shares of service-based Restricted Stock and service-based RSUs during the three and nine months ended September 30, 2025, respectively. There was $86,093,086 of unrecognized compensation cost related to shares of service-based Restricted Stock and service-based RSUs as of September 30, 2025, which will be expensed over a weighted average period of 8.6 years. There was $294,145 and $1,670,971 of compensation cost related to Performance-Based RSUs during the three and nine months ended September 30, 2025, respectively. There was $1,313,938 of unrecognized compensation cost related to Performance-Based RSUs as of September 30, 2025, which will be expensed over a weighted average period of 1.7 years.

 

 

TEVOGEN BIO HOLDINGS INC.

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

 

The Company recorded stock-based compensation expense in the following expense categories in the accompanying unaudited consolidated statements of operations:

 

   2025   2024 
   Three months ended 
   September 30, 
   2025   2024 
Research and development  $2,036,276   $2,185,958 
General and administrative   1,208,641    1,141,693 
Total  $3,244,917   $3,327,651 

 

   2025   2024 
   Nine months ended 
   September 30, 
   2025   2024 
Research and development  $5,583,289   $24,932,798 
General and administrative   8,193,662    8,870,322 
Total  $13,776,951   $33,803,120