Stock-Based Compensation

12 Months Ended

Dec. 31, 2025

11.

Stock-Based Compensation

VTI has two stock option plans. There is also a legacy Reshape plan that was still in effect at the time of the Merger. The Company is in the process of converting these plans into a comprehensive VHI plan. All share amounts have been adjusted to reflect the reverse stock split discussed above.

2018 ESOP PLAN

On December 14, 2018, VTI authorized an Employee Stock Option Plan 2018 (the “ESOP Plan”) under which 1,719,720 shares of common stock were reserved for issuance to directors, consultants, and employees of the Company. The ESOP plan entitles directors, consultants, and employees of the Company to purchase common stock for each option of the Company at a stipulated price, subject to compliance with vesting conditions, including employees remaining in employment during the vesting period, and directors and consultants continuing to render services during the vesting period. The options of directors and consultants vest as per the schedule prescribed in the grant letter. These can be exercised any time after the vesting period and during the optionee’s tenure with the VTI. However, the exercise period lapses ninety (90) days after the employee, director, or consultant leaves the Company.

The last issuance of an option under the ESOP Plan was in 2024. The Company has estimated the fair value of the 2024 stock option awards as of the date of grant by applying the Black-Scholes option-pricing model, using the following assumptions:

Risk-free interest rate		5.2	%
Expected term		5 years
Expected volatility		76	%
Expected dividends		0
Grant date fair value of common stock	$	4,500

The summary of stock options activity for the years ended December 31, 2025 and 2024, is as follows:

	Number of			Weighted Average Exercise		Weighted Average Time to
	Options			Price		Expiry
Outstanding as of December 31, 2023		165		$	2,750.00		4.0 years
Granted during 2024		129			4,500.00		9.5 years
Expired during 2024		(14	)		5,000.00
Exercised during 2024		-			-
Outstanding as of December 31, 2024		280		$	3,451.03		6.0 years
Granted during year ended December 31, 2025		-			-		-
Expired during year ended December 31, 2025		(1	)		2,400.00		-
Exercised during year ended December 31, 2025

Outstanding as of December 31, 2025		279		$	3,453.05		5.8 years

Exercisable as of December 31, 2024		280		$	3,451.03		6.7 years
Exercisable as of December 31, 2025		279		$	3,453.05		5.6 years

The following outlines the outstanding and vested stock options by exercise price as of December 31, 2025, and December 31, 2024.

Exercise Price	Number of Options Outstanding and fully vested – December 31, 2025		Number of Options Outstanding and fully vested – December 31, 2024
$2,400.00		140		140
$4,500.00		131		131
$5,000.00		8		9
Total		279		280

In June 2024, VTI granted options to purchase 129 shares of common stock in settlement of accrued compensation (see Note 7). There was no expense recorded for these stock option grants since these were issued in lieu of previously recognized compensation. The Company recognized no stock-based compensation expense in the Company’s Consolidated Statements of Operations and Comprehensive loss for the year ended December 31, 2025, and 2024 under the ESOP Plan. As of December 31, 2025, there is no future compensation cost to be recognized in the Consolidated Statements of Operations and Comprehensive Loss related to stock options granted through December 31, 2025. The intrinsic value of vested and outstanding stock options was zero.

2025 Stock Option Plan

In August 2025, VTI authorized an Employee Stock Option Plan 2025 (the “2025 Plan”) under which 2,800,000 shares of common stock were reserved for issuance to directors, consultants, and employees of the Company. The 2025 Plan entitles directors, consultants, and employees of the Company to purchase common stock of VTI at a stipulated price, subject to compliance with vesting conditions including employees remaining in employment during the vesting period and directors and consultants continuing to render services during the vesting period. The options of directors and consultants vest as per the schedule prescribed in the grant letter. These can be exercised any time after the vesting period and during their tenure with the Company. However, the exercise period lapses ninety (90) days after the employee, director or consultant leaves the Company.

In August 2025, VTI issued stock options to employees, consultants, board members, and others to purchase 2,705,779 shares of VTI common stock at an exercise price of $0.41 per share, which vest immediately and 57,122 shares of VTI common stock at an exercise price of $0.41 per share, which vest over a one-year period from the date of grant to employees.

The Company has estimated the fair value of the 2025 stock option awards as of the date of grant by applying the Black-Scholes option-pricing model using the following assumptions:

Risk-free interest rate		4.41	%
Expected term		5 years
Expected volatility		54	%
Expected dividends		0
Grant date fair value of common stock	$	0.41

The summary of stock option activity of the 2025 Plan for the year ended December 31, 2025 is as follows:

	Number of		Weighted Average Exercise		Weighted Average Time to
	Options		Price		Expiry
Outstanding as of December 31, 2024		0	$	-		-

Granted during year ended December 31, 2025		2,762,901	$	0.41		6.0 years
Expired during year ended December 31, 2025		-		-
Exercised during year ended December 31, 2025		-
						-
Outstanding as of December 31, 2025		2,762,901	$	0.41		5.6 years

Exercisable as of December 31, 2025		2,729,580	$	0.41		5.6 years

The Company recognized $577,128 of stock-based compensation expense which is included in Research and Development and Selling, General and Administrative Expenses based on allocation in the Company’s Consolidated Statements of Operations and Comprehensive Loss for the year ended December 31, 2025. As of December 31, 2025, there is a future compensation cost of $7,045 to be recognized related to stock options granted under the 2025 Plan over the next 10 months. The intrinsic value of vested and outstanding stock options was approximately $8.3 million.

Legacy Reshape Plans

At the time of the Merger, the following fully vested options and warrants were outstanding.

●

Stock options to purchase 1 share of common stock, which expired prior to December 31, 2025.

●

Warrants to purchase 817 shares of common stock at exercise prices ranging from $0.92 to $46,400.00 per share. The warrants will expire at various times from June 2026 to December 2029.

Vyome Holdings, Inc 10-K