GENELUX Corp Stock Compensation Disclosure

NOTE 8 – STOCK BASED COMPENSATION

 

In August 2009, the Board approved the adoption of the 2009 Equity Incentive Plan (the 2009 Plan). No shares are available for grant under the 2009 Plan.

 

In September 2018, the Board approved the adoption of the 2019 Equity Incentive Plan (the 2019 Plan). No shares are available for grant under the 2019 Plan.

 

In June 2022, the Board approved the adoption of the 2022 Equity Incentive Plan (the 2022 Plan). The 2022 Plan provides for the grant of incentive stock options (ISOs) to employees, including employees of any parent or subsidiary, and for the grant of non-qualified stock options (NSOs), stock appreciation rights, restricted stock awards, RSUs, performance awards and other forms of stock awards to employees, directors, and consultants, including employees and consultants of its affiliates. The 2022 Plan is a successor to the 2019 Plan. The aggregate number of shares of the Company’s common stock initially reserved for issuance under the 2022 Plan is 2,800,000 shares. In addition, the number of shares of the Company’s common stock reserved for issuance under the 2022 Plan automatically increases on January 1 of each calendar year, starting on January 1, 2024 and continuing through and including January 1, 2032, in an amount equal to 5% of the total number of shares of its common stock outstanding on the last day of the calendar month before the date of each automatic increase, or a lesser number of shares determined by the Board. In January 2025, the number of shares available to be issued under the 2022 Plan automatically increased by 1,729,664 shares, as determined by the 2022 Plan. As of December 31, 2025, the total number of shares reserved for issuance was 2,227,576.

 

In September 2023, the Board approved the adoption of the Company’s 2023 Inducement Plan (the Inducement Plan) to reserve 1,000,000 shares of the Company’s common stock to be used exclusively for grants of awards to individuals that were not previously employees or directors of the Company as an inducement material to the individual’s entry into employment with the Company. The Inducement Plan provides for the grant of NSOs, stock appreciation rights, restricted stock awards, RSUs, performance-based cash and stock awards, and other stock-based awards. The terms and conditions of the Inducement Plan are substantially similar to the Company’s stockholder-approved 2022 Plan.

 

In June 2025, the Board approved an amendment of the Inducement Plan to increase the maximum aggregate number of shares of Common Stock issuable by 1,000,000. As of December 31, 2025, the total number of shares reserved for issuance was 1,133,700.

 

The following table presents a summary of awards outstanding:

 SCHEDULE OF AWARDS OUTSTANDING

		December 31, 2025
		2009 Plan				2019 Plan				2022 Plan				Inducement Plan				Total
Stock options			1,555,037				1,637,562				2,653,080				866,300				6,711,979
RSUs			-				-				1,221,432				-				1,221,432
Total awards outstanding			1,555,037				1,637,562				3,874,512				866,300				7,933,411

 

 

The following table summarizes stock-based compensation expenses included in operating expenses:

 SCHEDULE OF STOCK-BASED COMPENSATION EXPENSES

		Year Ended December 31,
		2025				2024
		(in thousands)
General and administrative		$	4,667			$	5,024
Research and development			2,909				3,090
Total stock-based compensation expenses		$	7,576			$	8,114

 

 

		Year Ended December 31,
		2025				2024
		(in thousands)
Stock Options		$	6,599			$	6,072
RSUs			898				2,042
ESPP			79				-
Stock-based compensation expenses		$	7,576			$	8,114

 

Restricted Stock Units

 

The following table summarizes the activity of the Company’s RSUs:

 SCHEDULE OF RESTRICTED STOCK UNITS ACTIVITY

						Weighted
						Average Grant
		Number of				Date Fair
		RSUs				Value
Outstanding as of December 31, 2024			621,364			$	3.06
Granted			960,472				3.55
Vested			(314,042	)			4.99
Forfeited			(46,362	)			2.29
Outstanding as of December 31, 2025			1,221,432			$	4.41

 

As of December 31, 2025, $3.9 million of unamortized stock compensation expense remains.

 

Stock Options Awards

 

Option exercise prices are set forth in the grant notice, without commission or other charge, provided however, that the price per share of the shares subject to the option shall not be less than the greater of (i) 100% of the fair market value of a share of stock on the grant date, or (ii) with respect to awards under the 2019 Plan or 2022 Plan, 110% of the fair market value of a share of stock on the grant date in the case of a Participant then owning more than 10% of the total combined voting power of all classes of stock of the Company or any “subsidiary corporation” of the Company or any “parent corporation” of the Company. Options to employees, directors, and consultants generally vest and become exercisable over a period not exceeding four years. Options typically expire ten years after the date of grant. 

 

In September 2025, the Board approved a reduction in the exercise prices of certain stock options held by employees to purchase shares of the Company’s common stock under the Company’s 2022 Plan, 2019 Plan and 2009 Plan that had exercise prices greater than $5.00 per share. The exercise price for such options was reduced to $3.33 per share, which was the closing price of the common stock on September 1, 2025, the effective date of the reduction. The total cost of the repricing was $1.3 million, of which $0.8 million was recorded as expense during the year ended December 31, 2025. The remainder of the cost will be recorded over the future vesting periods of the options.

 

 

In September 2022, the Board approved a stock option repricing whereby the exercise price of previously granted and unexercised options held by certain employees, directors, and key advisers with exercise prices between $9.00 and $10.50 per share, was adjusted to $6.00 per share, the closing price of the Company’s initial public offering. The total cost of the repricing was $2.73 million, of which $2.72 million was recorded as of December 31, 2024, and the remaining was recorded during the twelve months ended December 31, 2025.

 

The following table presents a summary of stock option activity for the year ended December 31, 2025:

 SCHEDULE OF STOCK OPTION ACTIVITY 

		Number of Option Shares				Weighted Average Exercise Price (Per share)				Weighted Average Remaining Contractual Terms (in Years)				Aggregate Intrinsic Value
Balance, December 31, 2024			5,375,323			$	8.82				5.66				94
Granted			1,805,728				3.06
Cancelled			(154,894	)			9.96
Exercised			(5,000	)			2.75
Expired			(309,178	)			8.76
Balance, December 31, 2025			6,711,979			$	3.92			$	6.51				5,863
Vested and exercisable, December 31, 2025			4,184,735			$	5.04			$	4.06				-
Unvested, December 31, 2025			2,527,244

 

As of December 31, 2025, unvested stock option expense of $11.7 million remained and will be amortized over the remaining vesting period, through December 2029.

 

The assumptions used for the options granted during the period are as follows:

 SCHEDULE OF ASSUMPTIONS USED FOR OPTIONS GRANTED 

		Year Ended December 31,
		2025				2024
Exercise prices		$	2.83 – 4.73			$	1.96 – 7.44
Expected dividends			-				-
Expected volatility			109.0	%			100.0	%
Risk free interest rate			3.6 - 4.4	%			3.9% -4.5	%
Expected life of options			5.5 – 10.0				5.0 - 6.0

 

Stock Warrants

 

The table below summarizes the Company’s warrants activities for the years ended December 31, 2025:

 SCHEDULE OF WARRANTS ACTIVITIES

		Number of Warrant Shares				Exercise Price Range Per Share				Weighted Average Exercise Price
Balance, December 31, 2024			7,897,975			$	3.00 - 9.00			$	5.32
Granted			120,000				4.20				4.20
Cancelled			-				-				-
Exercised			(42,749	)			5.25				5.25
Expired			(44,441	)			5.40				5.40
Balance, December 31, 2025			7,930,785			$	3.00 - 9.00			$	4.92
Vested and exercisable, December 31, 2025			7,930,785			$	3.00 – 9.00			$	4.92

 

Stock warrants to purchase up to an aggregate total of 44,441 shares of its common stock with an exercise price of $5.40 per share issued to certain noteholders in prior years expired in December 2025.

 

 

During the year ended December 31, 2025, warrant holders exercised 42,749 warrants to acquire common stock at an exercise price of $5.25 per share for proceeds of $0.2 million. During the year ended December 31, 2024, the Company issued warrants to purchase 7,500,000 shares of its common stock with an exercise price of $5.25 per share to the underwriters of its second public offering. The warrants expire five years from the date of grant. During the year ended December 31, 2024, warrant holders exercised 76,487 warrants to acquire common stock at an exercise price of $9.00 per share for proceeds of $0.7 million.

 

There was $0.2 million and no aggregate intrinsic value for warrant shares outstanding at December 31, 2025.

 

Employee Stock Purchase Plan

 

The Company’s 2022 Employee Stock Purchase Plan (ESPP) permits eligible employees to purchase Company shares on an after-tax basis in an amount between 1% and 15% of their earnings: (i) on May 16th of each year at a 15% discount of the fair market value of the Company’s common stock on November 17th of the previous year or May 16th of the then-current year, whichever is lower, and (ii) on November 15th of each year at a 15% discount of the fair market value of the Company’s common stock on May 17th or November 15th of the then-current year, whichever is lower. The ESPP includes an “evergreen” feature, which provides that an additional number of shares of common stock will automatically be added to the shares authorized for issuance under the ESPP on January 1st of each year, beginning on January 1, 2024 and ending on (and including) January 1, 2032. The number of shares added each calendar year will equal the lesser of 1% of the Company’s common stock outstanding on December 31st of the preceding calendar year or 2,100,000 or a lesser number as determined by the Board.

 

During the twelve months ended December 31, 2025, 50,463 shares of common stock were purchased for an aggregate purchase price of $0.18 million under the ESPP, and as of December 31, 2025, 1,209,541 shares remain authorized and available for issuance.