Stock-Based Compensation

9 Months Ended

Sep. 30, 2016

Stock-Based Compensation [Abstract]

Stock-Based Compensation

Note 5 — Stock-Based Compensation

We have a stock incentive plan for employees and others called the VirnetX Holding Corporation 2013 Equity Incentive Plan (the "Plan"), which has been approved by our stockholders.  The Plan provides for grants of 14,124,469 shares of our common stock, including stock options and restricted stock units (“RSUs”), and will expire in 2023.  As of September 30, 2016, 421,221 shares remained available for grant under the Plan.

During the three months ended September 30, 2016 and 2015, we granted no options.

During the nine months ended September 30, 2016, we granted options for a total of 429,000 shares. The weighted average fair values at the grant dates for options issued during the nine months ended September 30, 2016 was $3.25 per option.  The fair values of options at the grant date were estimated utilizing the Black-Scholes valuation model with the following weighted average assumptions for the nine months ended September 30, 2016 (i) dividend yield on our common stock of 0 percent (ii) expected stock price volatility of 80 percent (iii) a risk-free interest rate of 1.84 percent and (iv) an expected option term of 6 years.

During the nine months ended September 30, 2015, we granted options for a total of 294,000 shares with a weighted average grant date fair value of $4.19. The fair values of options at the grant date were estimated utilizing the Black-Scholes valuation model with the following weighted average assumptions for the nine months ended September 30, 2015 (i) dividend yield on our common stock of 0 percent (ii) expected stock price volatility of 86 percent (iii) a risk-free interest rate of 2.21 percent and (iv) an expected option term of 6 years.

During the three months ended September 30, 2016 and 2015, we granted no RSUs.

During the nine months ended September 30, 2016 and 2015, we granted 219,331 and 162,665 RSUs, respectively. The weighted average fair values at the grant dates for RSUs issued during the nine months ended September 30, 2016 and 2015 were $4.75 and $5.57 per RSU, respectively.  RSUs, which are subject to forfeiture if service terminates prior to the shares vesting, are expensed ratably over the vesting period.

Stock-based compensation expense included in general and administrative expense was $1,423 and $3,979 for the three and nine months ended September 30, 2016, respectively, and $1,889 and $5,326 for the three and nine months ended September 30, 2015, respectively.

As of September 30, 2016, the unrecognized stock-based compensation expense related to non-vested stock options and RSUs was $4,890 and $2,796, respectively, which will be amortized over an estimated weighted average period of approximately 2.86 and 2.70 years, respectively.

During the nine-month period ended September 30, 2016 we issued 135,102 new shares of common stock as a result of RSUs which vested and were paid out and issued 50,357 shares of common stock as a result of stock options that were exercised during the period.