INNODATA INC
For the period ended Jun 4, 2026. Filed Apr 24, 2026.
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Jun 4, 2026 · Filed Apr 24, 2026
Contents
Dilution Analysis
The table below shows our potential dilution (often referred to as overhang) levels based on the shares of our Common Stock outstanding combined with our total equity awards outstanding, the shares currently available for grant under the 2021 Equity Plan, and our proposal for 600,000 new shares of our Common Stock to be available for awards under the Amended Equity Plan. The 600,000 new shares represent potential dilution of approximately 2% of the Total Potential Overhangplus Shares of Common Stock Outstanding as of March 31, 2026, as described in the table below. We believe that this number of shares of Common Stock under the Amended Equity Plan represents a reasonable amount of potential equity dilution, which will allow us to continue granting equity awards in furtherance of our performance-based compensation practices, the Company’s objectives and the goals of our equity compensation program.
| Potential Overhang as of March 31, 2026 with 600,000 New Shares | |
|---|---|
| Stock Options Outstanding of March 31, 2026 | 2,912,399 |
| Weighted Average Exercise Price of Stock Options Outstanding as of March 31, 2026 | $7.06 |
| Weighted Average Remaining Term of Stock Options Outstanding as of March 31, 2026 | 5.47 |
| Outstanding Time-Based Restricted Stock Units (“RSUs”) and Performance-Based RSUs as of March 31, 2026, granted under the 2021 Equity Plan after the April 2022 Amendment Effective Date(1)(2) | 1,152,644 |
| Total Equity Awards Outstanding as of March 31, 2026(3) | 4,065,043 |
| Shares Available for Grant under the 2021 Equity Plan as of March 31, 2026(4) | 750,986 |
| New Shares Requested | 600,000 |
| Total Potential Overhang of the Amended Equity Plan(1)(5) | 5,416,029 |
| Shares of Common Stock Outstanding as of March 31, 2026 | 32,655,008 |
| Total Potential Overhang plus Shares of Common Stock Outstanding as of March 31, 2026 | 38,071,037 |
| Potential Dilution of 600,000 new shares as a Percentage of the sum of Total Potential Overhang plus Shares of Common Stock Outstanding as of March 31, 2026 | 2% |
| (1) | To the extent that shares underlying time-based RSUs and Performance Based RSUs (“Full Value Awards”) outstanding on the Amendment Effective Date return to the Amended Equity Plan after the Amendment Effective Date, they will return to the plan on the same basis and pursuant to the same ratio as they were originally deducted from the authorized share pool. |
| (2) | Full Value Awards granted between the April 2022 Amendment Effective Date and the Amendment Effective Date have reduced, and will prior to the Amendment Effective Date reduce, the share reserve by 1.5 shares for every one share underlying the award, and following the Amendment Effective Date would return to the Amended Equity Plan on the same basis. Value assumes maximum performance applicable to Performance-Based RSUs. |
| (3) | Represents the sum of shares underlying outstanding options and Full Value Awards as of March 31, 2026. Value assumes maximum performance applicable to Performance-Based RSUs and share recycling provisions described above. |
| (4) | Any shares that remain available for awards under the 2021 Equity Plan will be available under the Amended Equity Plan, if approved, as of the Amendment Effective Date. If the Amended Equity Plan is approved, following the Amendment Effective Date, no further awards will be granted under the 2021 Equity Plan |
| (5) | “Total Potential Overhang” reflects the sum of: (i) shares issuable upon exercise of stock options outstanding as of March 31, 2026; (ii) shares subject to Full Value Awards outstanding as of March 31, 2026 assuming return to the Amended Equity Plan pursuant to the applicable share counting described above; (iii) shares available for grant under the 2021 Equity Plan as of March 31, 2026; and (iv) the newly requested 600,000 shares. |
Based on our current equity award practices, we estimate that the authorized shares under the Amended Equity Plan may be sufficient to provide us with an opportunity to grant equity awards for approximately one year, in amounts determined appropriate by the Leadership and Compensation Committee of the Board of Directors (the “Committee”), which will administer the Amended Equity Plan. This is only an estimate, and circumstances could cause the share reserve to be used more quickly or more slowly. These circumstances include, but are not limited to, the future price of shares of our Common Stock, the type of equity instruments we issue as long-term incentive compensation, any change to our compensation program that involves a different percentage mix of equity-based compensation compared to cash-based compensation, payouts of performance-based awards in excess of target in the event of superior performance, hiring activity, and promotions.
Burn Rate
The table below sets forth the following information regarding the awards granted under the 2021 Equity Plan: (i) the burn rate for each of the last three calendar years and (ii) the average burn rate over the last three calendar years. The burn rate for a year has been calculated as follows:
| (i) | the number of stock options and Full Value Awards granted in the applicable year divided by |
| (ii) | the weighted average number of shares of our Common Stock outstanding for the applicable year. |
For completeness, we have also included in the table below a burn rate calculation based on the number of stock options granteddivided by the weighted average number of shares of our Common Stock outstanding for the applicable year.
| Element | 2023 | 2024 | 2025 | Three-Year Average |
|---|---|---|---|---|
| Stock Options granted | 28,000 | 268,500 | - | 98,833 |
| Total Full Value Awards granted | 49,756 | 549,079 | 844,130 | 480,988 |
| Total Full Value Awards and Stock Options granted | 77,756 | 817,579 | 844,130 | 579,822 |
| Weighted Average Number of Shares of Common Stock Outstanding as of December 31 | 28,131,309 | 29,162,989 | 31,781,755 | 29,692,018 |
| Burn Rate | 0.3% | 2.8% | 2.7% | 2.0% |
The burn rate means that we used a three-year average of 2% of the weighted average shares outstanding for stock option and Full Value Awards granted over the past three years under the existing Equity Plans.
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.