As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(v) of Regulation S-K, we are providing the following information about the relationship between executive compensation actually paid and certain financial performance of Talphera. This disclosure is intended to comply with the requirements of Item 402(v) of Regulation S-K applicable to “smaller reporting companies.” For further information concerning our compensation philosophy and how we seek to align executive compensation with our performance, refer to “Executive Compensation—Narrative Disclosure to Summary Compensation Table and Outstanding Equity Awards Table.”
| Year(1) | Summary Compensation Table Total for PEO(2) | Compensation Actually Paid to PEO(3) | Average Summary Compensation Table Total for Non-PEO NEOs(2)(4) | Average Compensation Actually Paid to Non-PEO NEOs(5) | Value of Initial Fixed $100 Investment Based on Total Stockholder Return(6) | Net Income (Loss) (thousands)(7) |
|---|
| (a) | (b) | (c) | (d) | (e) | (f) | (g) |
|---|
| 2024 | $1,038,992 | $844,558 | $642,908 | $587,468 | $4.68 | $(13,004) |
| 2023 | 1,211,994 | 1,012,310 | 778,440 | 712,415 | 6.56 | (18,397) |
| 2022 | 1,297,016 | 692,475 | 788,772 | 595,505 | 20.17 | 47,755 |
| (1) | For each of the three years presented in the above table, Mr. Angotti was our Principal Executive Officer, or PEO. For 2024, our Non-PEO Named Executive Officers, or the Non-PEO NEOs, were Messrs. Asadorian and Dasu. For 2023 and 2022, the Non-PEO NEOs were Mr. Asadorian and Dr. Palmer. |
| (2) | See the Summary Compensation Table above for details on the Summary Compensation Table total compensation for our PEO for 2024 and 2023. The average compensation for the Non-PEO NEOs for 2024 and 2023 was calculated using the Summary Compensation Table above. The total compensation for our PEO and the average compensation for the Non-PEO NEOs for 2022 was calculated using the Summary Compensation Table as disclosed in our proxy statement filed with the Securities and Exchange Commission in calendar year 2023. |
| (3) | For purposes of this table, the compensation actually paid, or Compensation Actually Paid, or CAP, has been computed in accordance with Item 402(v) of Regulation S-K under the Exchange Act and does not reflect the actual amount of compensation earned by or paid to the NEOs during the applicable year. These amounts reflect total compensation as reflected in the above Summary Compensation Table for the applicable year less the grant date fair values of stock option awards included in the “Option Awards” column of the Summary Compensation Table for the NEO for the applicable year, and adjusted as follows for each stock option award granted to each NEO: |
| Year | Reported Summary Compensation Table Total for PEO | Reported Value of Equity Awards(a) | Equity Award Adjustments(b) | Compensation Actually Paid to PEO |
|---|
| 2024 | $1,038,992 | $(356,443) | $162,009 | $844,558 |
| 2023 | 1,211,994 | (196,982) | (2,702) | 1,012,310 |
| 2022 | 1,297,016 | (390,477) | (214,064) | 692,475 |
| (a) | The grant date fair value of equity awards represents the total of the amounts reported in the “Stock Awards” and “Option Awards” columns in the Summary Compensation Table for the applicable year. |
| (b) | The equity award adjustments for each applicable year include the addition (or subtraction, as applicable) of the following: (i) the year-end fair value of any equity awards granted in the applicable year that are outstanding and unvested as of the end of the year; (ii) the amount of change as of the end of the applicable year (from the end of the prior fiscal year) in fair value of any awards granted in prior years that are outstanding and unvested as of the end of the applicable year; (iii) for awards that are granted and vest in same applicable year, the fair value as of the vesting date; (iv) for awards granted in prior years that vest in the applicable year, the amount equal to the change as of the vesting date (from the end of the prior fiscal year) in fair value; (v) for awards granted in prior years that are determined to fail to meet the applicable vesting conditions during the applicable year, a deduction for the amount equal to the fair value at the end of the prior fiscal year; and (vi) the dollar value of any dividends or other earnings paid on stock or option awards in the applicable year prior to the vesting date that are not otherwise reflected in the fair value of such award or included in any other component of total compensation for the applicable year. The valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of grant. The amounts deducted or added in calculating the equity award adjustments are as follows: |
| Year | Year End Fair Value of Outstanding and Unvested Equity Awards granted in the Year | Year over Year Change in Fair Value of Outstanding and Unvested Equity Awards Granted in Prior Years | Fair Value as of Vesting Date of Equity Awards Granted And Vested in the Year | Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year | Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year | Total Equity Award Adjustments |
|---|
| 2024 | $158,630 | $(9,589) | $— | $12,968 | $— | $162,009 |
| 2023 | 68,300 | (59,040) | — | (11,962) | — | (2,702) |
| 2022 | 91,372 | (247,985) | — | (57,451) | — | (214,064) |
| (4) | The dollar amounts reported in column (d) represent the average of the amounts reported for our NEOs as a group (excluding Mr. Angotti, who has served as our CEO since 2017) in the “Total” column of the Summary Compensation Table in each applicable year. Messrs. Asadorian and Dasu were our NEOs (excluding Mr. Angotti) included for the purpose of calculating the average amounts in 2024. Mr. Asadorian and Dr. Palmer were our NEOs (excluding Mr. Angotti) included for the purpose of calculating the average amounts in 2023 and 2022. |
| (5) | The dollar amounts reported in column (e) represent the average amount of Compensation Actually Paid to our Non-PEO NEOs as a group, as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual average amount of compensation earned by or paid to the non-PEO NEOs as a group during the applicable year. The following adjustments were made to average total compensation for the Non-PEO NEOs as a group for each year to determine the compensation actually paid, using the same methodology described above in Note 3: |
| Year | Average Reported Summary Compensation Table Total for Non-PEO NEOs | Average Reported Value of Equity Awards | Average Equity Award Adjustments(a) | Average Compensation Actually Paid to Non-PEO NEOs |
|---|
| 2024 | $642,908 | $(99,237) | $43,797 | $587,468 |
| 2023 | 778,440 | (60,610) | (5,415) | 712,415 |
| 2022 | 788,772 | (120,143) | (73,124) | 595,505 |
| (a) | The amounts deducted or added in calculating the total average equity award adjustments are as follows: |
| Year | Average Year End Fair Value of Outstanding and Unvested Equity Awards granted in the Year | Average Year over Year Change in Fair Value of Outstanding and Unvested Equity Awards Granted in Prior Years | Average Fair Value as of Vesting Date of Equity Awards Granted And Vested in the Year | Average Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year | Average Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year | Average Total Equity Award Adjustments |
|---|
| 2024 | $44,164 | $(3,907) | $— | $3,540 | $— | $43,797 |
| 2023 | 21,015 | (18,249) | — | (8,181) | — | (5,415) |
| 2022 | 29,686 | (69,895) | — | (32,915) | — | (73,124) |
| (6) | Total Stockholder Return represents the return on a fixed investment of $100 in Talphera common stock for the period beginning on the last trading day of 2021 through the last trading day of the applicable fiscal year. |
| (7) | The dollar amounts reported represent the amount of net income (loss) reflected in the Company’s audited financial statements for the applicable year. |
