ProCap Financial, Inc. Stock Compensation Disclosure
On October 29, 2025, the Company’s Board of Directors adopted, and the Company’s stockholders approved the ProCap Financial, Inc. 2025 Equity Incentive Plan whereby it may grant to employees, consultants or non-employee directors an award, such as (1) options and stock appreciation rights, (2) performance stock, (3) performance stock units, (4) restricted stock, and (5) restricted stock units of the Company.
The aggregate number of shares which may be issued or transferred under the plan is equal to the sum of (i) 10% of the shares outstanding post-closing of the Business Combination and (ii) an annual increase on the first day of each year beginning in 2026 and ending in (and including) 2035 equal to the lesser of (A) 5% of the shares outstanding on the last day of the immediately preceding fiscal year and (B) such smaller number of shares as determined by the Board or the compensation committee of the Board.
Restricted Stock Units
For the period from June 17, 2025 (inception) through December 31, 2025, the Company issued restricted stock units (“RSU’S) under the 2025 Equity Plan. Each RSU entitles the recipient to one share of the Company’s common stock upon vesting. The Company measures the grant date fair value of RSU’s based on the nature of the vesting conditions.
For RSU’s subject only to service-based vesting conditions, fair value is measured using the stock price on the grant date. For RSU’s subject to performance-based vesting conditions, including market-based share price targets, grant date fair value is determined using a Monte Carlo valuation model which incorporates assumptions regarding volatility of 60%, risk-free interest rate of 3.9%, expected term of 7 years, and stock price of $4.36 to calculate the probability of achieving the specified performance conditions, consistent with ASC 718. Performance-based RSU’s will be forfeited to the extent any outstanding portion of the award remains unvested as of the seventh anniversary of the date of the grant of the award or upon the employee’s termination of employment for any such reason.
The RSU’s subject to market-based share price targets will be eligible to vest upon the achievement of the following share price vesting conditions as long as the employee remains employed by the Company through the date in which the share price vesting condition is satisfied for any five continuous business days where a share of common stock of the Company closes at or above the applicable share prices below:
| Number of RSU’s eligible to vest | Share price | |||
| 250,000 | $ | 15.00 | ||
| 250,000 | $ | 17.50 | ||
| 250,000 | $ | 20.00 | ||
| 250,000 | $ | 22.50 | ||
| 250,000 | $ | 25.00 | ||
| 500,000 | $ | 27.50 | ||
| 500,000 | $ | 30.00 | ||
| 500,000 | $ | 32.50 | ||
| 500,000 | $ | 35.00 | ||
| 500,000 | $ | 37.50 | ||
| 750,000 | $ | 40.00 | ||
| 750,000 | $ | 42.50 | ||
| 750,000 | $ | 45.00 | ||
| 1,000,000 | $ | 47.50 | ||
| 1,000,000 | $ | 50.00 | ||
The table below presents the summary of activity with respect to, and status of restricted stock units for the period from June 17, 2025 (inception) through December 31, 2025:
Number of Restricted Stock Units | Weighted Average Grant Date Value | |||||||
| Unvested as of June 17, 2025 | ||||||||
| Granted | 8,220,000 | $ | 2.13 | |||||
| Forfeited | ||||||||
| Vested | (201,586 | ) | $ | 2.11 | ||||
| Unvested as of December 31, 2025 | 8,018,414 | $ | 2.13 | |||||
As of December 31, 2025, there were restricted stock units outstanding. As of December 31, 2005, unrecognized compensation cost related to the grant of restricted stock units was $ and had a remaining vesting period of approximately years to years. Stock-based compensation expense related to RSUs recognized during the period from June 17, 2025 (inception) through December 31, 2025 was $, and is included in the accompanying consolidated statements of operations.
About Stock Compensation Disclosures
Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.
Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.