VirnetX Holding CorpVHC

VirnetX Holding Corp Stock Compensation Disclosure

10-KFiled Mar 24, 20263 min read
Note 6 − Stock-Based Compensation

The following tables summarize information and activity under the plan for the indicated periods.

Options Outstanding
    
Options Vested and Exercisable
  
Range of
Exercise Prices
  
Number
Outstanding
    
Weighted
Average
Remaining
Contractual
Life (Years)
    
Weighted
Average
Exercise
Price
    
Number
Exercisable
    
Weighted
Average
Remaining
Contractual
Life (Years)
    
Weighted
Average
Exercise
Price
  
$ 10.00 - 29.80
    
521,875
      
9.68
    
$
20.78
      
30,750
      
6.43
    
$
28.67
  
$ 47.00 - 138.40 
    
204,093
      
2.96
    
$
88.62
      
204,093
      
2.96
    
$
88.62
  
     
725,968
      
7.79
    
$
39.85
      
234,842
      
3.42
    
$
80.77
  

   
Options
  
   
Number
    
Weighted
Average
Exercise
Price
    
Weighted
Average
Remaining
Contractual
Life (Years)
    
Aggregate
Intrinsic
Value
  
Outstanding, December 31, 2023
    
330,017
    
$
90.63
      
—
    
$
—
  
Options granted
    
—
      
—
      
—
      
—
  
Options exercised
    
—
      
—
      
—
      
—
  
Options cancelled
    
(72,325
)
    
123.61
      
—
      
—
  
Outstanding, December 31, 2024
    
257,692
    
$
81.69
      
4.31
    
$
—
  
Options granted
    
488,000
      
20.22
      
—
      
—
  
Options exercised
    
(625
)
     10.00      
—
      
—
  
Options cancelled
    
(19,099
)
    
103.76
      
—
      
—
  
Outstanding, December 31, 2025
    
725,968
    
$
39.85
      
7.79
    
$
8
  
Options exercisable, December 31, 2025
    
234,842
    
$
80.77
      
3.42
    
$
8
  

   
RSUs
  
   
Number
    
Weighted
Average
Grant
Date
Fair Value
    
Aggregate
Intrinsic
Value
  
Outstanding, December 31, 2023
    
17,450
    
$
60.81
    
$
—
  
RSUs granted
    
—
      
—
      
—
  
RSUs vested
    
(7,971
)
    
70.88
      
—
  
RSUs cancelled
    
(3,376
)
    
58.91
      
—
  
Outstanding, December 31, 2024
    
6,103
    
$
49.20
    
$
—
  
RSUs granted
    
—
      
—
      
—
  
RSUs vested
    
(4,020
)
    
59.67
      
—
  
RSUs cancelled
    
(168
)
    
29.80
      
—
  
Outstanding, December 31, 2025
    
1,915
    
$
29.80
    
$
—
  
   
Restricted Stock
  
   
Number
    
Weighted
Average
Grant Date
Fair Value
    
Aggregate
Intrinsic
Value
  
Outstanding, December 31, 2023
    
32,706
    
$
9.11
    
$
—
  
Restricted stock granted
    
649,000
      
5.91
      
—
  
Restricted stock vested
    
(12,866
)
    
9.35
      
—
  
Restricted stock cancelled
    
(36,025
)
    
7.97
      
—
  
Outstanding, December 31, 2024
    
632,815
    
$
5.95
    
$
1,215
  
Restricted stock granted
    
30,000
      
8.90
      
—
  
Restricted stock vested
    
(131,459
)
    
5.83
      
—
  
Restricted stock cancelled
    
(70,599
)
    
6.15
      
—
  
Outstanding, December 31, 2025
    
460,757
    
$
6.24
    
$
 4,807
  

Intrinsic value is calculated as the difference between the per-share market price of our common stock on the last trading day of 2025, which was $16.69 and the grant price of the awards. For awards exercised, the intrinsic value is the difference between market price and the exercise price on the date of exercise.

Stock-based compensation expense is included in operating expense for each period as follows:

Stock-Based Compensation by Type of Award
  
Year Ended
December 31, 2025
    
Year Ended
December 31, 2024
  
Stock options
  
$
637
    
$
1,240
  
RSUs
    
134
      
333
  
Restricted stock
    
1,199
      
329
  
Total stock-based compensation expense
  
$
1,970
    
$
1,902
  

As of December 31, 2025, there was $9,836 of unrecognized stock-based compensation expense; $7,173 related to unvested stock options, $24 related to unvested RSUs, and $2,639 related to unvested restricted stock. These costs are expected to be recognized over a weighted-average period of 3.42 years for options, 0.43 years for RSUs, and 2.75 years for restricted stock.

The fair value of each option grant was estimated on the date of grant using the Black-Scholes option pricing model using the following weighted average assumptions:

   
Year Ended
December 31, 2025
    
Year Ended
December 31, 2024
  
Expected stock price volatility
    
83.26
%
    
—
%
Risk-free interest rate
    
3.78
%
    
—
%
Expected life term
    
6.25
      
—
  
Expected dividends
    
0
%
    
—
%

Based on the Black-Scholes option pricing model, the weighted average estimated fair value of employee stock options granted was $14.89 per share during 2025. The expected life was determined using the simplified method outlined in ASC 718, “Compensation - Stock Compensation”. Expected volatility of the stock options was based upon historical data and other relevant factors.

Historical Timeline

Fiscal YearFiled
2025Mar 24, 2026Showing above
2024Mar 17, 2025
2023Mar 15, 2024
2022Mar 31, 2023
2018Mar 18, 2019

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.

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