Pulmonx Announces Inducement Grants under Nasdaq Listing Rule 5635(c)(4)

Rhea-AI Summary

Pulmonx (Nasdaq: LUNG) announced that on December 1, 2025 it granted equity awards under its 2025 Inducement Plan totaling 1,625,000 shares to two executives hired in Q4 2025, including CFO Derrick Sung.

The awards comprise 1,225,000 RSUs (Mr. Sung received 1,200,000 RSUs) that vest 25% after one year and then quarterly over three years. Mr. Sung also received up to 400,000 PSUs subject to a time-based vesting schedule (33% at one year, then quarterly over two years) and a 60-trading-day average closing price performance condition. The Inducement Plan was adopted by the board in November 2025 and complies with Nasdaq Rule 5635(c)(4).

Positive

• 1,625,000 shares granted under Inducement Plan (Dec 1, 2025)
• 1,200,000 RSUs awarded to CFO Derrick Sung
• 400,000 PSUs include a price-linked performance condition
• RSUs vest 25% after one year, remainder over three years

Negative

• 1,625,000 shares potentially dilutive to existing shareholders
• High concentration: 1,200,000 RSUs awarded to one executive

News Market Reaction

+8.00%

17 alerts

+8.00% News Effect

+17.4% Peak in 29 hr 47 min

+$7M Valuation Impact

$89M Market Cap

0.8x Rel. Volume

On the day this news was published, LUNG gained 8.00%, reflecting a notable positive market reaction. Argus tracked a peak move of +17.4% during that session. Our momentum scanner triggered 17 alerts that day, indicating notable trading interest and price volatility. This price movement added approximately $7M to the company's valuation, bringing the market cap to $89M at that time.

Data tracked by StockTitan Argus on the day of publication.

Key Figures

Total inducement shares: 1,625,000 shares Total RSUs granted: 1,225,000 RSUs RSUs to CFO/COO: 1,200,000 RSUs +5 more

8 metrics

Total inducement shares 1,625,000 shares Equity awards under 2025 Inducement Plan granted Dec 1, 2025

Total RSUs granted 1,225,000 RSUs Aggregate RSUs to two new employees under Inducement Plan

RSUs to CFO/COO 1,200,000 RSUs Portion of RSUs granted to Derrick Sung

PSUs to CFO/COO 400,000 PSUs Performance stock units awarded to Derrick Sung

RSU initial vest 25% Vests on first anniversary of Grant Date, remainder quarterly over 3 years

PSU time vest 1 33% First tranche of PSUs vests after one year, then quarterly over 2 years

Performance window 60 trading days Average closing price period for PSU performance condition

Inducement plan shares 3,200,000 shares Registered on Form S-8 for 2025 Inducement Plan

Market Reality Check

Price: $1.45 Vol: Volume 951,879 is about 0...

normal vol

$1.45 Last Close

Volume Volume 951,879 is about 0.8x the 20-day average of 1,191,152, not indicating heavy trading relative to recent activity before this news. normal

Technical Shares at $2.51 were trading below the 200-day moving average of $3.24 and were down sharply from the $9.37 52-week high but above the $1.31 52-week low.

Peers on Argus

Before this inducement grant news, LUNG was up 5.58% while key medical-device pe...

Before this inducement grant news, LUNG was up 5.58% while key medical-device peers like ICCM, APYX, TELA, VNRX, and XTNT were all down between about -0.99% and -5.04%, indicating a stock-specific move rather than a sector-wide trend.

Historical Context

5 past events · Latest: Dec 03 (Neutral)

5 events

Date	Event	Sentiment	Move	Catalyst
Dec 03	Inducement equity grants	Neutral	+8.0%	Announced <b>1,625,000</b> inducement equity awards to two senior hires.
Nov 12	Q3 2025 earnings	Neutral	-6.2%	Reported Q3 revenue of <b>$21.5M</b> with ongoing losses and updated 2025 guidance.
Oct 27	Mgmt change & prelim rev	Neutral	-4.9%	Reappointed CEO, named new COO/CFO, and gave prelim Q3 revenue of <b>$21.5M</b>.
Oct 15	Earnings call scheduling	Neutral	-2.5%	Announced date and webcast details for Q3 2025 earnings release and call.
Aug 26	Investor conferences	Neutral	+5.1%	Outlined participation in two September 2025 investor conferences and webcasts.

Recent Company History

Over the last six months, Pulmonx issued a mix of corporate, financial, and investor-relations updates. These included leadership changes with detailed compensation and PSU price targets on October 27, 2025, Q3 2025 results with $21.5M revenue on November 12, 2025, and adoption of the 2025 Inducement Plan, now used for the 1,625,000-share equity grants. Investor conferences and earnings-date announcements filled out the calendar, showing steady communication but varied short-term price reactions.

Regulatory & Risk Context

Active S-3 Shelf · $200,000,000

Shelf Active

Active S-3 Shelf Registration 2025-11-24

$200,000,000 registered capacity

Pulmonx has an effective Form S-3/A shelf, filed on 2025-11-24, allowing it to issue up to $200,000,000 of various securities over time. No usage is recorded yet (usage_count 0), but this capacity could facilitate future capital raises for working capital, R&D, and other corporate purposes as described in the filing.

Market Pulse Summary

The stock moved +8.0% in the session following this news. A strong positive reaction aligns with the...

Analysis

The stock moved +8.0% in the session following this news. A strong positive reaction aligns with the market rewarding Pulmonx’s leadership build-out and clarified equity incentives. The inducement grants under the 2025 Inducement Plan and prior PSU awards tie compensation to multi-year service and share-price targets. However, investors also faced potential dilution and a $200,000,000 effective shelf that could support future capital raises, factors that might temper the durability of any sharp upside move.

Key Terms

nasdaq listing rule 5635(c)(4), restricted stock units, performance stock unit, performance vesting condition, +1 more

5 terms

nasdaq listing rule 5635(c)(4) regulatory

"in accordance with Nasdaq Listing Rule 5635(c)(4)"

NASDAQ Listing Rule 5635(c)(4) is a rule that requires a company to get approval from its shareholders before selling a large amount of its shares, usually over 20%. This helps protect investors by making sure the company doesn't flood the market with new shares without their say, which could lower the stock's value.

restricted stock units financial

"The employees received, in the aggregate, 1,225,000 restricted stock units"

Restricted stock units are a type of company reward where employees are promised shares of stock, but they only fully own these shares after meeting certain conditions, like staying with the company for a set time. They matter because they can become valuable assets and are often used to motivate employees to help the company succeed.

performance stock unit financial

"Mr. Sung also received a performance stock unit (“PSUs”) award for up to 400,000 shares"

A performance stock unit is a type of reward companies give to employees, usually managers, that depends on how well the company performs over time. If the company hits specific goals, the employee earns shares of stock, like earning a prize for reaching certain levels in a game. It motivates employees to work hard because their rewards are tied to the company's success.

performance vesting condition financial

"and (ii) a performance vesting condition, pursuant to which the average closing price"

A performance vesting condition is a rule attached to stock awards or options that says the recipient only earns the right to keep shares if the company or the individual meets specific financial or operational goals—think of it as a milestone that unlocks a prize. Investors care because these conditions align management pay with results, affect when and how many shares may be issued (which can dilute existing holders), and signal how a company motivates long-term performance.

inducement plan financial

"granted equity awards under its 2025 Inducement Plan (the “Inducement Plan”)"

An inducement plan is a program a company creates to encourage employees or new hires to stay or join by offering special benefits or rewards. It’s like a company giving extra bonuses or perks to persuade someone to choose their job over others, helping the company attract and keep talented workers.

AI-generated analysis. Not financial advice.

REDWOOD CITY, Calif., Dec. 03, 2025 (GLOBE NEWSWIRE) -- Pulmonx Corporation (Nasdaq: LUNG) (the “Company” or “Pulmonx”), a global leader in minimally invasive treatments for lung disease, today announced that on December 1, 2025 (the “Grant Date”), Pulmonx granted equity awards under its 2025 Inducement Plan (the “Inducement Plan”) for an aggregate of 1,625,000 shares of Pulmonx’s common stock to two individuals hired by Pulmonx in the fourth quarter of 2025, including Pulmonx’s Chief Financial Officer and Chief Operating Officer, Derrick Sung. The awards were approved by the Compensation Committee of the Company’s Board of Directors and were granted as an inducement material to the new employees entering into employment with Pulmonx, in accordance with Nasdaq Listing Rule 5635(c)(4). Each award is subject to the terms and conditions of the Inducement Plan and the grant agreements covering the awards.

The employees received, in the aggregate, 1,225,000 restricted stock units (“RSUs”), with Mr. Sung’s grant accounting for 1,200,000 of the total granted RSUs. In each case, one-fourth of the RSUs will vest on the one-year anniversary of the Grant Date, with the remainder vesting in equal quarterly installments over the subsequent three-year period, subject to such employee’s continuous employment on each vesting date.

In addition to his RSU grant, Mr. Sung also received a performance stock unit (“PSUs”) award for up to 400,000 shares of the Company’s common stock issued pursuant to the Inducement Plan. Mr. Sung’s PSUs will be subject to two vesting conditions: (i) a time-based condition, pursuant to which 33% of the PSUs will vest on the one-year anniversary of the Grant Date, with the remainder vesting in equal quarterly installments over the subsequent two-year period, subject to Mr. Sung’s continuous employment on each vesting date; and (ii) a performance vesting condition, pursuant to which the average closing price of a share of the Company’s common stock over a period of sixty (60) consecutive trading days will have achieved a specified price target. Only upon the satisfaction of both the time-based condition and the performance condition will the related portion of the PSUs vest.

The Inducement Plan is used exclusively for the grant of equity awards to individuals who were not previously employees or directors of Pulmonx, or following a bona fide period of non-employment, as an inducement material to such individuals’ entering into employment with Pulmonx, pursuant to Nasdaq Listing Rule 5635(c)(4). The Inducement Plan was adopted by the Company’s Board of Directors in November 2025.

About Pulmonx Corporation
Pulmonx Corporation (Nasdaq: LUNG) is a global leader in minimally invasive treatments for chronic obstructive pulmonary disease (COPD). Pulmonx’s Zephyr® Endobronchial Valve, Chartis® Pulmonary Assessment System and StratX® Lung Analysis Platform are designed to assess and treat patients with severe emphysema/COPD who despite medical management are still profoundly symptomatic. Pulmonx received FDA pre-market approval to commercialize the Zephyr Valve following its designation as a “breakthrough device.” The Zephyr Valve is commercially available in more than 25 countries, is included in global treatment guidelines and is widely considered a standard of care treatment option for improving breathing, activity and quality of life in patients with severe emphysema. For more information on the Zephyr Valves and the company, please visit www.pulmonx.com.

Pulmonx®, Chartis®, StratX®, and Zephyr® are registered trademarks of Pulmonx Corporation

Investor Contact
Brian Johnston
Laine Morgan
Gilmartin Group
investors@pulmonx.com

FAQ

What did Pulmonx (LUNG) announce on December 3, 2025 about equity grants?

Pulmonx announced grants totaling 1,625,000 shares under its 2025 Inducement Plan made on Dec 1, 2025 to two new executives.

How many RSUs did Pulmonx grant to CFO Derrick Sung (LUNG) and when do they vest?

Mr. Sung received 1,200,000 RSUs; 25% vest after one year with the remainder vesting quarterly over the next three years.

What are the terms of the 400,000 PSUs granted to Pulmonx CFO Derrick Sung (LUNG)?

The 400,000 PSUs vest only if both time-based vesting (33% at one year, then quarterly over two years) and a 60-trading-day average price target are met.

When was Pulmonx’s Inducement Plan adopted and under which Nasdaq rule was it used (LUNG)?

The board adopted the Inducement Plan in November 2025 and the awards were granted under Nasdaq Listing Rule 5635(c)(4).

How many total RSUs were granted under Pulmonx’s 2025 Inducement Plan (LUNG)?

A total of 1,225,000 RSUs were granted in the aggregate to the two new employees.