VivoSim Labs, INC.

The following discussion is designed to provide our stockholders with an understanding of our compensation philosophy and objectives as well as an overview of the analysis that our Compensation Committee performed in setting the compensation of our executive officers for Fiscal 2026 (i.e., the period from April 1, 2025 to March 31, 2026).

This discussion summarizes the Compensation Committee’s determination of how and why, in addition to what, compensation actions were taken for our named executive officers, as follows:

•

Keith Murphy, our Executive Chairman and Principal Executive Officer;

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Norman Staskey, our Chief Financial Officer and Principal Financial Officer;

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Tony Lialin, our Chief Commercial Officer(1); and

•

Amar Sethi, our Chief Scientific Officer(2)

(1)

Mr. Lialin was hired by the Company on August 11, 2025.

(1)

Dr. Sethi was hired by the Company on November 24, 2025.

These four individuals are collectively referred to in this Annual Report as our “named executive officers”.

Recent “Say-on-Pay” Votes

Our recent stockholder advisory votes, commonly referred to as a “Say-on-Pay” vote, to approve the compensation of our named executive officers for Fiscal 2025 (i.e., the period from April 1, 2024 to March 31, 2025) was approved by our stockholders, with approximately 90% of stockholder votes cast in favor of the proposal.

During Fiscal 2026, our Executive Chairman and Chief Financial Officer maintained significant stockholder engagement efforts to monitor how our investors vote, obtain their views on key corporate governance and disclosure matters and determine how best to respond to feedback each year going forward. Specifically, we reached out to our stockholders representing over 95% of our institutional stock holdings multiple times. None of the stockholders indicated a need or desire to engage with the Company to discuss or express any concerns.

Going forward, we plan to continue to:

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at least annually, reach out to institutional stockholders representing a majority of the shares held by our institutional stockholders; and

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invite them to engage and participate in calls to discuss our executive compensation programs, their feedback and questions and how we may best address them.

One or more members of executive management are expected to be active participants on all such calls, as will one or more members of our Compensation Committee. All such feedback will be shared with our Board.

In evaluating potential changes to our executive compensation programs’ structure and disclosure, the Compensation Committee will closely examine, and aim to understand further, our stockholders’ feedback, including any common themes from our stockholders’ feedback. The Compensation Committee will also seek the advice of independent compensation consultants with respect to the design of our executive compensation program.

Compensation Philosophy and Objectives

Our executive compensation program focuses on creating alignment between our stockholders and executive officers by including both performance- and incentive-based compensation elements. Our compensation package also combines both short- and long-term components (cash and equity, respectively) at the levels the Compensation Committee determined to be appropriate to motivate, reward, and retain our executive officers. Our executive compensation program is designed to achieve the following key objectives:

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Attract, retain, and reward talented executives and motivate them to contribute to the Company’s success and to build long-term stockholder value;

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Establish financial incentives for executives to achieve our key financial, operational, and strategic goals;

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Enhance the relationship between executive pay and stockholder value by utilizing long-term equity incentives; and

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Recognize and reward executives for superior performance.

Use of Market Data and Benchmarking

The Compensation Committee endeavors to set compensation at competitive levels. In order to do this, the Compensation Committee compares our compensation packages with the packages offered by other peer companies that are similarly situated, and with which we compete for talent. Selection criteria includes:

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Industry, specifically biotechnology and medical research,

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Company focus, with an emphasis on technology platforms,

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Stage of leading drug candidate, with an emphasis on Phase II/III,

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Market capitalization, targeting less than $100 million,

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Number of employees, targeting less than 50 employees, and

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Location, specifically nationwide.

For Fiscal 2026, the Compensation Committee engaged Anderson Pay Advisors ("Anderson"), an independent compensation consultant, as the Compensation Committee’s advisor reporting directly to the chair of the Compensation Committee. The Compensation Committee determined that no conflict of interest exists that would preclude Anderson from serving as an independent consultant to the Compensation Committee.

The Compensation Committee requested that Anderson conduct a review and analysis of our executive compensation programs as compared against competitive benchmarks. This included a benchmarking analysis against prevailing market practices of a peer group of comparable companies approved by the Compensation Committee and broader industry trends and benchmarks. The analysis included a review of the “Total Direct Compensation” (which includes salary, cash incentives, and equity awards) of our executive officers, and was based on an assessment of market trends covering available public information as well as proprietary information provided by Anderson.

For Fiscal 2026, based on recommendations from Anderson, our Compensation Committee determined that our peer group should be modified to better reflect our current market valuation as well as the growing importance of our therapeutics program to our overall business model. With input from Anderson, our Compensation Committee added a group of companies focused on technology platforms, with comparable size, revenues, market valuations, and stage of leading drug candidate. Our Compensation Committee also replaced some of the companies previously included in our peer group because their market valuations had grown too high for direct comparison to our Company, and/or their business focus had become less relevant for direct comparison to our Company. Our Compensation Committee then used the compensation data from this revised peer group in setting executive compensation for Fiscal 2026.

The peer group for Fiscal 2026 included:

Determination of Executive Compensation

In addition to peer group data, the Compensation Committee considered relevant publicly available market data and surveys and the compensation reports it received from Anderson. The Compensation Committee also reviewed and considered the compensation recommendations of our Executive Chairman, the Company’s overall performance during Fiscal 2026, the Company’s financial status and operating runway, each executive officer’s responsibilities and contribution to the Company’s achievement of the Fiscal 2026 corporate goals, and each executive officer’s individual performance during Fiscal 2026. With respect to new hires, our Compensation Committee considered the executive officer’s background and historical compensation in lieu of prior year performance in addition to benchmark data for the newly hired executive’s position.

Commitment to Good Compensation Governance Practices

In designing our executive compensation program, our Compensation Committee intends to create alignment between our stockholders and executive officers and to implement good compensation governance by:

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Annual Advisory Vote on the Compensation of our Named Executive Officers – We provide our stockholders with the ability to vote annually on the compensation of our named executive officers.

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Independent Compensation Consultant – The Compensation Committee engaged Anderson during Fiscal 2025 to serve as its independent compensation consultant. Anderson did not provide any other services to the Company during the periods it served as a consultant to the Compensation Committee.

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Performance and Incentive Based – Approximately 40% of the Total Direct Compensation our executive officers could earn was performance and incentive based, thereby aligning the interests of our executive officers with our stockholders’ interests. As both our Executive Chairman and Chief Financial Officer are retained through consulting firms, neither are eligible for performance based compensation.

•

Compensation Risk Assessment – The Compensation Committee oversees and evaluates an annual risk assessment of the Company’s compensation program. The Compensation Committee believes that the performance goals established for incentives do not encourage excessive risk-taking or have the potential to encourage behavior that may have a material adverse effect on the Company.

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Prohibitions on Hedging, Pledging and Margin Activities– Our insider trading policy prohibits hedging transactions by Company employees. Under the policy, all short-term, speculative or hedging transactions in VivoSim securities are prohibited by all employees. In addition, the policy specifically prohibits the use of VivoSim securities for pledging and margin activities.

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No Single Trigger Change in Control Vesting- We do not provide for the acceleration of vesting solely upon the occurrence of a change in control in our equity awards for our directors and executive officers.

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No Excise Tax Gross Ups – We do not include excise tax gross ups for any change in control payments.

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Director and Executive Officer Stock Ownership Guidelines – We have adopted stock ownership guidelines that require each director and executive officer to accumulate and hold a specified value of our stock within five years of most recently starting employment with us or becoming a director.

The Compensation Committee believes that the program and policies described above demonstrate the Company’s commitment to, and consistent execution of, an effective performance-oriented executive compensation program.

Components of Executive Compensation

The framework established by the Compensation Committee, based on the data provided by Anderson, for our executive compensation program consists of a base salary, performance-based cash incentives and long-term equity-based incentives. The Compensation Committee endeavors to combine these compensation elements to develop a compensation package that provides competitive pay, rewards our executive officers for achieving our commercial, operational and strategic objectives and aligns the interests of our executive officers with those of our stockholders.

Salary. The Compensation Committee has provided, and will continue to provide, our executive officers with a base salary to compensate them for services provided during the fiscal year. In addition to benchmark data from our peer group, our Compensation Committee considers the Company’s overall performance during the prior fiscal year, cash burn, the Company’s financial status and operating profile, each executive officer’s responsibilities and contribution to the achievement of the prior year’s corporate goals, and each executive officer’s individual performance during the prior fiscal year. The evaluations and recommendations proposed by our Executive Chairman are also considered (other than with respect to determining his own compensation). With respect to new hires, the Compensation Committee considers an executive’s background and historical compensation in lieu of prior year performance as well as benchmark data for the new hire’s position. Our Compensation Committee evaluates and sets the base salaries for our executives following annual performance evaluations, as well as upon a promotion or other change in responsibility. Our Compensation Committee expects to continue to utilize these policies going forward.

Pursuant to the terms of our consulting agreement with Multi Dimensional Bio Insight LLC (“MDBI”), a biotechnology consulting firm through which we retain Mr. Murphy, MDBI has the right, on an annual basis, to increase hourly consultant rates by up to 4%. From January 1, 2021 to May 1, 2022, the hourly rate for Mr. Murphy’s services was $375, which was increased to $413 effective May 1, 2022 and remained the same throughout Fiscal 2026. The cash amount paid to MDBI increased from $726,674 for Fiscal

2025 to $740,210 for Fiscal 2026, with approximately a 2% increase in Mr. Murphy’s hours for Fiscal 2026 as compared to Fiscal 2025.

Pursuant to the terms of our consulting agreement with Danforth Advisors, LLC (“Danforth”), a financial consulting firm through which we retain Mr. Staskey, Danforth has the right, on an annual basis, to increase hourly consultant rates by up to 4%. From January 1, 2025 to March 31, 2026, the hourly rate for Mr. Staskey's services was $450. The cash amount paid to Danforth for Mr. Staskey's services increased from $20,925 for Fiscal 2025 to $119,475 for Fiscal 2026, with approximately a 470% increase in Mr. Staskey's hours for Fiscal 2026 as compared to Fiscal 2025. The significant increase in hours from Fiscal 2025 to Fiscal 2026 is due to Mr. Staskey's hiring on December 30, 2024, which was at the end of the third quarter of Fiscal 2025.

Mr. Lialin was hired by the Company on August 11, 2025. Mr. Lialin's base salary in Fiscal 2026 was $360,000.

Dr. Sethi was hired by the Company on November 24, 2025. Dr. Sethi's base salary in Fiscal 2026 was $360,000.

The cash amounts or base salaries paid to our named executive officers for Fiscal 2026 as compared to Fiscal 2025 are set forth in the following table:

(1)

Mr. Murphy was appointed our Executive Chairman on September 15, 2020. The Company retains Mr. Murphy through MDBI, a biotechnology consulting firm, pursuant to the terms of a consulting agreement, pursuant to which the Company has agreed to pay MDBI $375-390 per hour of services provided by Mr. Murphy, with an annual increase in rates by up to 4%. The amounts reported under “Fiscal 2026 Cash Payments/Base Salaries” and “Fiscal 2025 Cash Payments/Base Salaries” are comprised of the actual amounts paid to MDBI for its consulting services. Mr. Murphy did not directly receive a base salary from the Company in Fiscal 2026 or Fiscal 2025. Mr. Murphy’s increase in base salary was primarily due to additional time commitment of Mr. Murphy in his consulting role as Executive Chairman of the Company. Mr. Murphy also received a one-time performance cash bonus of $73,500 during Fiscal 2026.

(2)

Mr. Staskey was appointed our Chief Financial Officer on December 30, 2024. The Company retains Mr. Staskey through Danforth, a financial consulting firm, pursuant to the terms of a consulting agreement, pursuant to which the Company has agreed to pay Danforth $450 per hour of services provided by Mr. Staskey, with an annual increase in rates by up to 4%. The amounts reported under “Fiscal 2026 Cash Payments/Base Salaries” and “Fiscal 2025 Cash Payments/Base Salaries” are comprised of the actual amounts paid to Danforth for its consulting services related to Mr. Staskey. Mr. Staskey did not directly receive a base salary from the Company in Fiscal 2026 or Fiscal 2025.

(3)

Mr. Lialin was hired by the Company on August 11, 2025. Mr. Lialin's base salary in Fiscal 2026 was $360,000.

(4)

Dr. Sethi was hired by the Company on November 24, 2025. Dr. Sethi's base salary in Fiscal 2026 was $360,000.

Performance-Based Cash Incentive Awards. Our executive compensation program includes an annual performance-based cash incentive award, which provides our executive officers with an annual cash incentive opportunity as a percentage of their base salaries based upon the achievement of corporate and individual performance goals evaluated and approved by the Compensation Committee. For Fiscal 2026, the Compensation Committee determined that the annual target bonus opportunity expressed as a percentage of base salary for Mr. Lialin and Dr. Sethi should be 40% of each of their respective base salaries. Each executive officer is eligible to receive an increase in his target bonus amount based on the achievement of individual and corporate goals. If the base performance level is met for a corporate goal, the Compensation Committee has the discretion to assign zero percentage to that performance goal or a bonus percentage on an interpolated basis between zero and 100%, resulting in an actual bonus significantly less than an executive’s target bonus. For performance above a performance goal, the bonus percentage for that performance goal may exceed the target bonus. The Company continues to use an objectives and key results goal-setting framework (“OKRs”) used by individuals, teams, and the Company to define measurable goals and track their outcomes, originally developed and implemented by Andrew Grove at Intel. See: http://www.whatmatters.com.

The Compensation Committee approved bonus payments for Fiscal 2026 as follows:

(1)

Mr. Murphy received a one-time performance based cash bonus during Fiscal 2026.

(2)

Mr. Lialin was hired by the Company on August 7, 2025, and therefore his bonus was pro-rated for Fiscal 2026.

(3)

Dr. Sethi was hired by the Company on November 24, 2025, and therefore his bonus was pro-rated for Fiscal 2026.

Mr. Staskey is retained through Danforth, a financial consulting firm, pursuant to the terms of a consulting agreement. As such, Mr. Staskey is not eligible to receive a bonus for services provided during the fiscal year.

Equity-Based Incentive Awards. In addition to base salaries and annual performance-based cash incentives, the Compensation Committee has provided long-term, equity-based incentive awards to our executive officers. In determining the size and terms of the awards, the Compensation Committee considered benchmark data from our peer group, publicly available market and survey data and the individual performance of the named executive officers.

The Compensation Committee granted the following awards to our executive officers for Fiscal 2026 (neither Mr. Murphy, in his role as Executive Chairman, nor Mr. Staskey received any equity awards during Fiscal 2026 and therefore are not included in this table):

(1) These amounts represent the grant date fair value of time-based and performance-based stock option awards granted by the Company during the periods presented, determined in accordance with FASB ASC Topic 718. All awards are amortized over the vesting life of the award. For the assumptions used in our valuations, see “Note 6 – Stockholders’ Equity” of the Notes to Consolidated Financial Statements in Item 8 of this Annual Report on Form 10-K.

(2) The option vests over a four year period, with 25% of the total number of shares subject to the option vesting on August 11, 2026, and the balance vesting in 12 equal quarterly installments thereafter.

(3) The option vests over a four year period, with 25% of the total number of shares subject to the option vesting on November 24, 2026, and the balance vesting in 12 equal quarterly installments thereafter.

Other Benefits

In order to attract and retain qualified individuals and pay market levels of compensation, we have historically provided, and will continue to provide, our executives with the following benefits:

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Health Insurance – We provide each of our executives and their spouses and children the same health, dental, and vision insurance coverage we make available to our other eligible employees.

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Life and Disability Insurance – We provide each of our executives with the same life and disability insurance as we make available to our other eligible employees.

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Pension Benefits – We do not provide pension arrangements or post-retirement health coverage for our executives or employees. We implemented a 401(k) Plan effective January 1, 2014. We provide a company matching contribution up to 3.5% of compensation for all participants in the 401(k) plan, including our executive officers, to help attract and retain top talent.

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Nonqualified Deferred Compensation – We do not provide any nonqualified defined contribution or other deferred compensation plans to any of our employees.

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Perquisites – We limit the perquisites that we make available to our executive officers. In certain cases, we have reimbursed our executive officers for their relocation expenses on their initial hire.

Severance Arrangements

As of March 31, 2026, Dr. Sethi is the only named executive officer that has a severance arrangement in place with the Company. In the event of termination of employment for any reason other than for cause, Dr. Sethi is eligible to receive six months of cash severance, based on current salary, or approximately $180,000. Dr. Sethi is also eligible to receive six months of health insurance payments made through the provisions of COBRA.

Potential Payments upon Termination or Change in Control

As of March 31, 2026, Dr. Sethi is the only named executive officer that has a severance arrangement in place with the Company. In the event of termination of employment other than for cause, Dr. Sethi is eligible to receive six months of cash severance, based on current salary, or approximately $180,000. Dr. Sethi is also eligible to receive six months of health insurance payments made through the provisions of COBRA. None of the other Company's named executive officers are entitled to receive any potential payments in the event of termination of employment in connection with a change of control.

Death or Disability Benefits

The outstanding equity awards held by our executive officers provide such executive officers with accelerated vesting if the executive officer terminates services with the Company as a result of death or disability. In order for an equity award to be eligible for accelerated vesting, the executive officer’s death or disability must occur more than 90 days after the date the equity award was granted. With respect to performance-based equity awards, an executive officer will vest at target levels upon the executive officer’s death or disability.

Summary Compensation Table

The following table summarizes the total compensation paid to or earned by each named executive officer for Fiscal 2026 and Fiscal 2025.

(1)

These amounts represent the grant date fair value of time-based and performance-based stock option awards granted by the Company during the periods presented, determined in accordance with FASB ASC Topic 718. All awards are amortized over either the vesting life or requisite service period of the award. For the assumptions used in our valuations, see “Note 6 – Stockholders’ Equity” of the Notes to Consolidated Financial Statements included elsewhere in this Annual Report.

(2)

Includes amounts paid under the Company’s Performance-Based Cash Incentive Award program based on the achievement of corporate and individual performance goals established and measured by the Compensation Committee.

(3)

Mr. Murphy was appointed our Executive Chairman on September 15, 2020. The amounts reported under “Salary” are comprised of the amounts paid to MDBI for its consulting services. Mr. Murphy did not receive a base salary from the Company in Fiscal 2026 or Fiscal 2025. Mr. Murphy also received compensation for services as a member of the Board, which is included in the section entitled “Director Compensation Table” on page 49 of this Annual Report.

(4)

This amount includes $19,701 for expense reimbursements, and $6,600 for office rent in Fiscal 2026.

(5)

Mr. Staskey was appointed our Chief Financial Officer on December 30, 2024. The amounts reported under "Salary" are comprised of the amounts paid to Danforth for its consulting services related to Mr. Staskey. Mr. Staskey did not receive a base salary from the Company in Fiscal 2026 or Fiscal 2025.

(6)

Mr. Lialin was appointed Chief Commercial Officer on August 7, 2025.

(7)

Dr. Sethi was appointed Chief Scientific Officer on November 24, 2025.

Outstanding Equity Awards at Fiscal Year End

The following table shows certain information regarding outstanding equity awards as of March 31, 2026 for our named executive officers:

(1)

The option shares vest in 16 equal quarterly installments beginning August 31, 2022.

(2)

The restricted stock units vest on the earlier of one year from the vesting commencement date, January 28, 2027, or the next annual meeting of stockholders held by the Company.

(3)

The option shares vest in 3 equal annual installments beginning August 5, 2024.

(4)

The option becomes exercisable, if at all, when the Company enters into a definitive agreement for a collaboration or partnership, which in the sole judgment of the Board or a committee thereof, constitutes a major strategic partnership that expands the Company's business relationships.

(5)

The option becomes exercisable, if at all, if the 90-day moving average closing price of the Company's common stock on The Nasdaq Stock Market LLC exceeds $18.36 per share.

(6)

The option becomes exercisable, if at all, if the Company achieves cumulative revenue of $1.5 million from combined cell line sales, IP licensing revenue, including up-front and royalty payments, non-dilutive collaborations, grants and partnerships, as confirmed by the Board or a committee thereof.

(7)

25% of the option shares vest and become exercisable on August 11, 2026 and the remaining shares vest in 12 equal quarterly installments thereafter.

(8)

25% of the option shares vest and become exercisable on November 24, 2026 and the remaining shares vest in 12 equal quarterly installments thereafter.

As of March 31, 2026, Mr. Staskey did not hold any outstanding equity awards.

Director Compensation

Our directors play a critical role in guiding our strategic direction and overseeing the management of our Company. Ongoing developments in corporate governance and financial reporting have resulted in an increased demand for such highly qualified and productive public company directors. The many responsibilities and risks and the substantial time commitment of being a director of a public company require that we provide adequate incentives for our directors’ continued performance by paying compensation commensurate with our directors’ workload. Our directors are compensated based upon their respective levels of Board participation and responsibilities, including service on Board committees.

Our director compensation is overseen by the Compensation Committee, which makes recommendations to our Board on the appropriate structure for our director compensation program and the appropriate amount of compensation. Our Board is responsible for final approval of our director compensation program and the compensation paid to our directors.

In connection with establishing our director compensation for Fiscal 2026, the Compensation Committee retained Anderson as its independent compensation consultant. With the assistance of Anderson, the Board and Compensation Committee conducted a formal review of our director compensation and incentive programs relative to the same peer group used in benchmarking the compensation for our executive officers.

Fiscal 2026 Director Compensation Framework

For Fiscal 2026, our Director Compensation Framework provided to both non-employee and employee directors annual cash retainers for Board service and for service as the chair or member of one of the standing Board committees. Our directors are not entitled to any Board meeting fees or Board committee meeting fees.

Annual Cash Retainers. For Fiscal 2026, each of our directors was eligible to receive an annual cash retainer of $66,300 for Board membership.

In addition, each of our directors are eligible to receive the applicable annual retainers set forth below for serving as committee chairs and for service as a member of a Board committee, with total cash compensation for each director not to exceed $105,000 per fiscal year:

No additional meeting fees were paid to our directors for Fiscal 2026.

Equity Awards. In addition, in January 2026, each director received a restricted stock unit award with respect to 15,000 shares of common stock (a value of approximately $25,950), which will vest in full on the earlier of (i) January 27, 2027 or (ii) the date of our next annual meeting of stockholders, subject to acceleration in the event of a change of control.

Reimbursement. Our directors are entitled to reimbursement for their reasonable travel and lodging expenses for attending Board and Board committee meetings.

Director Compensation Table

The following table sets forth the compensation earned and paid to each member of our Board for service as a director during Fiscal 2026:

(1)

These amounts represent the grant date fair value of time-based restricted stock unit awards granted by the Board, determined in accordance with FASB ASC Topic 718. All awards are amortized over the vesting life of the award. For the assumptions used in our valuations, see “Note 6 – Stockholders’ Equity” of our Notes to Consolidated Financial Statements included elsewhere in this Annual Report.

(2)

Comprised solely of the compensation received by Mr. Murphy for his service as a member of the Board. Mr. Murphy’s additional compensation for Fiscal 2026 is included in the section entitled “Summary Compensation Table” on page 47 of this Annual Report.

Compensation Committee Interlocks and Insider Participation

No member of our Compensation Committee has at any time been our employee. None of our executive officers serves, or has served during the last fiscal year, as a member of the board of directors or compensation committee of any other entity that has one or more executive officers serving as a member of our Board or our Compensation Committee.

Equity Award Timing Procedures

In accordance with Item 402(x) of Regulation S-K under the Securities Act of 1933, as amended, we are providing information regarding our procedures related to the grant of certain equity awards close in time to the release of material non-public information (“MNPI”). Although we do not have a formal policy, program or plan that requires us to award equity or equity-based compensation on specific dates, we generally expect our Compensation Committee to approve and grant equity awards to our executive officers annually. Additionally, our insider trading policy prohibits directors, officers and employees from trading in our common stock while in possession of or on the basis of MNPI about us. We have not timed, and do not plan to time, the disclosure of MNPI for the purpose of affecting the value of executive compensation.

In the year ended March 31, 2026, the following options were granted to our named executive officers within four business days prior to, or one business day following, the filing or furnishing of a periodic or current report by us that disclosed MNPI.

(1)

We filed a quarterly report on Form 10-Q on August 12, 2025. The percentage change in the closing market price of the securities underlying the award between the trading day ending immediately prior to the disclosure of material nonpublic information and the trading day beginning immediately following the disclosure of material nonpublic information was approximately 6.3%.