VYNE Therapeutics Inc.VYNE
VYNE Therapeutics Inc. Stock Compensation Disclosure
SHARE-BASED COMPENSATION
2023 Equity Incentive Plan
The Company maintains the 2023 Equity Incentive Plan (the "2023 Plan") and previously maintained the 2019 Equity Incentive Plan (the “2019 Plan”) and 2018 Omnibus Incentive Plan (the "2018 Plan"). Following stockholder approval in December 2023, any shares then available for future grant under the 2019 Plan and 2018 Plan were allocated to the 2023 Plan and no further grants could be made under the 2018 Plan and the 2019 Plan. In December 2024, stockholders approved a proposal to amend the 2023 Plan to further increase shares available for grant under the 2023 Plan by 1,520,000 shares. As of December 31, 2025, 188,100 shares remained issuable under the 2023 Plan.
2024 Inducement Plan
On February 28, 2024, the Board approved the Company's 2024 Inducement Plan (the "Inducement Plan"). Pursuant to the Inducement Plan and Nasdaq Listing Rule 5635(c)(4), the Company is permitted to grant equity awards as an inducement material to an individual's entering into employment with the Company, subject to certain conditions ("Inducement Grants"). In November 2024, the Board reduced the number of shares available to be issued under the Inducement Plan to one share. During 2025, 111,250 shares were returned to the Inducement Plan as a result of forfeited equity awards. As of December 31, 2025, there were 111,251 shares available for future Inducement Grants, which includes shares underlying Inducement Grants that were forfeited.
2019 Employee Share Purchase Plan
The Company has adopted the ESPP pursuant to which qualified employees (as defined in the ESPP) may elect to purchase designated shares of the Company’s common stock at a price equal to 85% of the lesser of the fair market value of the common stock at the beginning or end of each semi-annual share purchase period (“Purchase Period”). Employees are permitted to purchase the number of shares purchasable with up to 15% of the earnings paid (as such term is defined in the ESPP) to each of the participating employees during the Purchase Period, subject to certain limitations under Section 423 of the U.S. Internal Revenue Code.
As of December 31, 2025, 62,419 shares remained available for grant under the ESPP.
During the years ended December 31, 2025 and 2024, 24,703 and 14,080 shares were purchased by employees pursuant to the ESPP, respectively.
Options and Restricted Stock Units ("RSUs") granted to employees and directors
For the years ended December 31, 2025 and 2024, the Company granted options and RSUs to employees and directors as follows:
| Year ended December 31, 2025 | |||||||||||||||||||||||
| Award amount | Exercise price range | Vesting period | Expiration | ||||||||||||||||||||
| Options | 1,662,500 | $0.38 - $2.77 | 1 year - 4 years | 10 years | |||||||||||||||||||
| Year ended December 31, 2024 | |||||||||||||||||||||||
| Award amount | Exercise price range | Vesting period | Expiration | ||||||||||||||||||||
| Options | 870,000 | $1.96 - $2.40 | 1 year - 4 years | 10 years | |||||||||||||||||||
| RSUs | 435,000 | — | 4 years | — | |||||||||||||||||||
During the year ended December 31, 2025 and December 31, 2024, the fair value of options and RSUs granted to employees and directors was $3.6 million and $2.6 million, respectively. The fair value of RSUs granted is based on the share price on grant date. One share of common stock will be issued upon settlement of each RSU that vests.
The fair value of each option granted is estimated using the Black-Scholes option pricing method. The volatility is based on a combination of historical volatilities of companies in comparable stages as well as companies in the industry, by statistical analysis of daily share pricing model. The risk-free interest rate assumption is based on observed interest rates appropriate for the expected term of the options granted in dollar terms. The Company’s management uses the expected term of each option as its expected life. The expected term of the options granted represents the period of time that granted options are expected to remain outstanding and is based on the simplified method. Under the simplified method, the expected life of an option is presumed to be the midpoint between the vesting date and the end of the contractual term. The Company used the simplified method due to the lack of sufficient historical exercise data to provide a reasonable basis upon which to otherwise estimate the expected life of the stock options.
The underlying data used for computing the fair value of the options are as follows:
| Year ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
Exercise price | $0.38 - $2.77 | $1.96 - $2.40 | |||||||||
| Dividend yield | — | % | — | % | |||||||
| Expected volatility | 101.91% - 104.79% | 104.00% - 105.73% | |||||||||
| Risk-free interest rate | 4.19% - 4.58% | 3.95% - 4.32% | |||||||||
| Expected term | 6 years | 6 years | |||||||||
Summary of outstanding and exercisable options and RSUs
The following table summarizes stock option activity for the year ended December 31, 2025:
| Number of options | Weighted Average Exercise Price | ||||||||||
Outstanding at December 31, 2024 | 1,584,304 | $ | 19.65 | ||||||||
| Granted | 1,662,500 | 2.61 | |||||||||
| Forfeited | (220,641) | 2.17 | |||||||||
| Expired | (75,601) | 61.59 | |||||||||
| Outstanding at December 31, 2025 | 2,950,562 | $ | 10.28 | ||||||||
| Exercisable at December 31, 2025 | 838,339 | $ | 29.66 | ||||||||
The weighted average grant date fair value of options granted during the years ended December 31, 2025 and 2024 was $3.6 million and $1.6 million, respectively. The weighted average remaining contractual term of outstanding and exercisable options as of December 31, 2025 was 8.40 years and 7.27 years, respectively. Total unrecognized share-based compensation for options as of December 31, 2025 was $3.6 million, which is expected to be recognized over a weighted average period of 2.83 years.
The intrinsic value of outstanding options was $16.0 thousand as of December 31, 2025. There was no intrinsic value of exercisable options as of December 31, 2025.
The following table summarizes RSU activity for the year ended December 31, 2025:
| Number of RSUs | Weighted Average Grant Date Fair Value | ||||||||||
| Outstanding at December 31, 2024 | 750,715 | $ | 2.77 | ||||||||
| Vested | (299,609) | 3.10 | |||||||||
| Forfeited | (190) | 10.99 | |||||||||
| Outstanding at December 31, 2025 | 450,916 | $ | 2.54 | ||||||||
The weighted average remaining contractual term of outstanding RSUs as of December 31, 2025 was 1.19 years. Total unrecognized compensation expense related to the unvested portion of the RSUs at December 31, 2025 was $1.1 million, which is expected to be recognized over a weighted average period of 2.12 years.
Share-based compensation expenses
The following table illustrates the allocation of share-based compensation expense on the line items on the statements of operations and comprehensive loss:
| Year ended December 31, | |||||||||||
| (in thousands) | 2025 | 2024 | |||||||||
Research and development | $ | 364 | $ | 548 | |||||||
General and administrative | 1,944 | 2,755 | |||||||||
Total | $ | 2,308 | $ | 3,303 | |||||||
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.