TELOS CORP
For the period ended Mar 31, 2025. Filed May 9, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 9, 2025
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11. Stock-Based Compensation
- STOCK-BASED COMPENSATION
The Company grants stock-based compensation awards under the Amended and Restated 2016 Omnibus Long-Term Incentive Plan (the "2016 LTIP"). We have granted stock options, restricted stock units with time-based vesting ("RSUs") and restricted stock units with performance-based vesting ("PSU"). Awards granted under the 2016 LTIP vest over the periods determined by the Board of Directors or the Compensation Committee of the Board of Directors, which has the discretion to establish the terms, conditions and criteria of the various awards. The RSUs granted to eligible employees generally vest in installments over a period of up tothree years. PSUs will vest upon the achievement of a defined performance target or market conditions for the Company's common stock, and certain operational milestones over a prescribed period.
On May 8, 2025, the Company's stockholders approved an amendment to the 2016 LTIP that increased the number of shares available for issuance under the 2016 LTIP by an additional 4,900,000 shares, increasing the total number of shares available for issuance under the 2016 LTIP. As of March 31, 2025, approximately 1.1 million shares of our common stock were available for future grants under the 2016 LTIP.
There were no income tax benefits recognized on the share-based compensation expense for both periods.
| Table 11.1: Details of Stock Compensation Expense by Department | ||
|---|---|---|
| For the Three Months Ended | ||
| March 31, 2025 | March 31, 2024 | |
| (in thousands) | ||
| Cost of sales – services | $190 | $257 |
| Research and development | 40 | 428 |
| Selling, general and administrative | 6,818 | 2,299 |
| Total | $7,048 | $2,984 |
Restricted Stock
| Table 11.2: Restricted Stock Activity | ||||
|---|---|---|---|---|
| Service-Based | Performance-Based | Total Shares | Weighted-Average Grant Date Fair Value | |
| Unvested outstanding units as of December 31, 2024 | 1,952,103 | 10,683,230 | 12,635,333 | $3.52 |
| Granted | — | — | — | — |
| Vested | (109,375) | — | (109,375) | 9.30 |
| Forfeited | (56,380) | (79,043) | (135,423) | 3.47 |
| Unvested outstanding units as of March 31, 2025 | 1,786,348 | 10,604,187 | 12,390,535 | $3.20 |
On February 20, 2025, the Company amended certain previously granted PSUs that could settle in up to 2,462,445 shares of its common stock, and would only vest if the Company achieves certain financial performance targets for fiscal year 2025. The amendment eliminated one of the financial performance targets.
As of March 31, 2025, and 2024, the intrinsic value of the RSUs and PSUs outstanding, exercisable, and vested or expected to vest was $29.5 million and $3.9 million, respectively. There were approximately $11.2 million of total compensation costs related to stock-based awards not yet recognized as of March 31, 2025, which is expected to be recognized on a straight-line basis over a weighted-average remaining vesting period of 0.5 years.
Stock Options
| Table 11.3: Stock Option Activity | ||||
|---|---|---|---|---|
| Stock Options Outstanding | Weighted-Average Exercise Price | Weighted-Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value | |
| Outstanding option balance as of December 31, 2024 | 287,000 | $1.80 | 8.4 | $464,940 |
| Granted | — | — | 0.0 | — |
| Exercised | — | — | 0.0 | — |
| Forfeited, cancelled, or expired | — | — | 0.0 | — |
| Outstanding option balance as of March 31, 2025 | 287,000 | $1.80 | 8.1 | $166,460 |
| Exercisable stock option as of March 31, 2025 | 287,000 | $1.80 | 8.1 | $166,460 |
The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying stock option awards and the quoted closing price of the Company's common stock as of March 31, 2025.
The fair value of the stock options is expensed on a straight-line basis over the vesting period ofone year, including the stock options granted to directors, as the next annual stockholders meeting is expected to occur at the same approximate time each year.
As of March 31, 2025, there wereno unrecognized compensation costs related to non-vested stock options.
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