How to record an ISO disqualification and convert a grant to NSO status
Use this workflow when an ISO grant has been amended in a way that causes it to lose its ISO status as of a specific date, converting it to a non-qualified stock option (NSO). This is a legitimate amendment scenario — not a data entry correction.
Navigate to Essentials → Manage equity → Options.
Click the three dots to the right of the grant you need to update, then select Modify option grant.
Select a reason for the modification and, if needed, add a note.
Inside the modify workflow, go to the Compliance section.
Locate the ISO disqualification date field and check the box to the left to enable it.
Enter the disqualification date.
Complete the remaining steps in the modify workflow → select a modification reason, then click Apply modifications to save.
Once saved, the grant will display a type of "NSO - ISO Disqualification" on the Options ledger.
What to expect after saving
The grant's type will update to NSO - ISO Disqualification on the cap table.
Because ISO disqualification date is a compliance-related field, an email notification will be sent to the option holder automatically. This cannot be turned off. You may add an explanatory note during the modification to provide context to the holder.
Chronological note
The ISO disqualification date must fall after the grant date and before the expiration date. If you receive a chronological error, review the Chronological errors troubleshooting guide on resolving date sequencing issues.