Virtuix Holdings Inc. Stock Compensation Disclosure

Note 14. Stock Compensation Expense

The Company accounts for stock-based compensation under the provisions of Topic 718, Compensation – Stock Compensation, which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees and non-employee officers based on estimated fair values as of the date of grant. Stock-based compensation expense is recognized on a straight-line basis over the requisite service period.

As mentioned in Note 13, the Company has a stock-based employee compensation plan, the Long Term Incentive Plan (the “Plan”), for which 2,500,000 shares of common stock were reserved for issuance under the Plan. Awards granted under the Plan typically expire ten years after the grant date. The Plan expired on April 6, 2024. During the fiscal year ended March 31, 2026, 10,720 options were exercised (See Note 13), and 19,258 option awards expired. As such, 553,750 issued awards remained outstanding as of March 31, 2026.

On January 22, 2025, the Company adopted a new Long Term Incentive Plan (the “2025 Plan”), providing for the issuance of up to 1,850,000 shares of Common Stock of the Company upon the exercise of options or the issuance of restricted stock awards under the 2025 Plan. The Company approved the issuance of option grants to employees of the Company under the 2025 Plan totaling 1,635,000 optioned shares as of March 31, 2025. During the fiscal year ended March 31, 2026, the Company did not grant any options under the 2025 Plan, and there were no exercises, forfeitures, or expirations.

On August 6, 2025, the Company adopted the 2025 Omnibus Incentive Plan. The 2025 Omnibus Plan initially reserved 4,000,000 shares of the Company’s common stock for issuance, subject to adjustment for stock splits, recapitalizations and similar events. During the year ended March 31, 2026, the Company issued 2,179,992 restricted stock units to employees, executives, and directors under the plan. The Company accounts for restricted stock units under ASC 718. Stock-based compensation expense related to shares issued under this plan for the years ended March 31, 2026 and 2025, was $400,456 and $0, respectively. As of March 31, 2026 the restricted stock units have an unrecognized expense totaling $3,434,603, and a weighted average period remaining of 38 months. The Company expects this expense to be included in the Consolidated Statement of Operations over the four years following the Listing Date.

Incentive Stock Options (“ISOs”) are granted to certain employees of Virtuix, Inc. from time to time. As of March 31, 2026 and 2025, 1,590,823 ISO options were granted since inception.

As of March 31, 2026 and 2025, respectively, 227,500 and 159,258 ISO options were vested. As of March 31, 2026 and 2025, 1,255,940 ISO options were forfeited. As of March 31, 2026 and 2025, respectively, 1,296,913 and 95,625 ISO options were expired.

From time to time, the Company grants NQSOs to various other non-employees with exercise prices based on current stock valuations. As of March 31, 2026 and 2025, 3,254,000 total NQSO options had been granted since inception, and 1,805,625 and 1,910,303, respectively, NQSO options were vested. As of March 31, 2026 and 2025, 112,500 NQSO options were forfeited. As of March 31, 2026 and 2025, 1,182,030 NQSO options were expired.

Compensation expense pertaining to ISOs of $26,016 and $24,545, and compensation expense pertaining to NQSOs of $15,480 and $1,188,650 was recorded for the years ended March 31, 2026 and 2025, respectively, in general and administrative expenses in the consolidated statements of operations.

Total compensation cost related to non-vested awards not yet recognized as of March 31, 2026 and 2025, was $24,405 and $65,902, respectively, and will be recognized over a weighted-average period of approximately 12 months.

The amount of future stock option compensation expense could be affected by any future option grants or by option holders leaving the Company before their grants are fully vested or exercised.

Note 14. Stock Compensation Expense (continued)

Determining the appropriate fair value of stock-based awards requires the input of subjective assumptions, including the fair value of the Company’s common stock, and for stock options, the expected life of the option, and expected stock price volatility. The Company used the Black-Scholes option pricing model to value its stock option awards. The assumptions used in calculating the fair value of stock-based awards represent management’s best estimates and involve inherent uncertainties and the application of management’s judgment. As a result, if factors change and management uses different assumptions, stock-based compensation expense could be materially different for future awards.

The expected life of stock options was estimated using the “simplified method,” which is the midpoint between the vesting date and the end of the contractual term, as the Company has limited historical information to develop reasonable expectations about future exercise patterns and employment duration for its stock options grants. The simplified method is based on the average of the vesting tranches and the contractual life of each grant. For stock price volatility, the Company uses comparable public companies as a basis for its expected volatility to calculate the fair value of options grants. The risk-free interest rate is based on U.S. Treasury notes with a term approximating the expected life of the option. The estimation of the number of stock awards that will ultimately vest requires judgment, and to the extent actual results or updated estimates differ from the Company’s current estimates, such amounts are recognized as an adjustment in the period in which estimates are revised.

The assumptions utilized in determining the fair value of option grants during the years ended March 31, 2026 and 2025, are as follows:

Vesting generally occurs over a period of three to four years for employees and two to three years for non-employee consultants. A summary of information related to stock options for the years ended March 31, 2026 and 2025, is as follows:

The total intrinsic value of the stock options at March 31, 2026 and 2025, respectively, is $11,791,550 and $580,843.

On April 5, 2024, the Company reissued shares held in Treasury Stock to an advisor under an award agreement. Stock compensation expense related to this new award was $4,647,500 for the year ended March 31, 2025. The Company relieved Treasury Stock of $2,750, recording the remaining $4,644,750 to additional paid-in capital. The advisor receiving the award was appointed to the Company’s Board of Directors on the same date.