First Breach, Inc. Files S-1: RSU & Capital Gains Tax Exposure Calculator (Sep 3, 2026)

What Changed

First Breach filed its S-1 registration statement on September 2, 2026. The firm expects to price its IPO within 30 to 45 days, creating a direct tax and liquidity decision point for employees holding unvested equity and for accredited investors evaluating early-stage allocations in the security sector.

The Numbers That Matter

IPO Component	Pre-IPO Value	Post-IPO Range (Est.)	Tax Treatment
Employee RSUs (unvested)	$0 taxable event	Ordinary income at vest (up to 37%)	W-2 withholding at vest
ISO exercise pre-IPO	$0 to AMT floor	Fair market value at IPO price	AMT or ordinary income
Accredited investor allocation	Private valuation	IPO price minus lockup discount (10% to 15%)	Short-term capital gains if sold under 1 year
Post-IPO trading liquidity	N/A	Day 1 volume typically 2x to 5x float	Standard brokerage settlement

What This Means for Your Portfolio

If you hold $200K in unvested RSUs at a pre-IPO valuation, your taxable income at vest will be the IPO price multiplied by share count. At an estimated IPO price of $18 per share and a 37% marginal rate, you will owe $74,000 in federal tax on vest, due April 15 of the following year if vesting occurs in Q4 2026. Your broker will withhold 22% at vest, leaving a $35,200 shortfall you must cover from cash or by selling vested shares into a potentially volatile post-IPO market.

Scenario Analysis

Net Worth	Unvested RSU Value	Tax Owed at Vest (37% marginal)	Shares to Sell to Cover Tax (at $18)
$500K	$200K	$74,000	4,111 shares (37% of position)
$1M	$400K	$148,000	8,222 shares (37% of position)
$2M	$800K	$296,000	16,444 shares (37% of position)

All figures assume no state income tax. California residents add 13.3% top marginal rate, increasing total tax owed to 50.3% of vest value.

IPO Lockup and Liquidity Risk

First Breach employees will face a standard 180-day lockup from the IPO pricing date. Your shares vest on the IPO date but cannot be sold until March 2027. If the stock drops 30% during lockup, your $200K vest becomes $140K in sellable value, but your tax bill remains $74K based on the original $18 IPO price. You will owe tax on $200K of income while holding an asset worth $140K. This is a $60K gap risk that compounds if you planned to sell shares to cover the tax bill and no longer have sufficient liquidity.

The table below shows post-lockup value at three price scenarios:

IPO Price	180-Day Price (down 30%)	Tax Owed	Net Proceeds After Tax	Loss from Vest Date
$18	$12.60	$74,000	$66,000	$60,000 (45% of net)
$18	$15.30 (down 15%)	$74,000	$96,000	$30,000 (24% of net)
$18	$18.00 (flat)	$74,000	$126,000	$0

All scenarios assume $200K unvested RSU position and immediate sale at lockup expiration.

Pre-IPO Exercise Decision for ISO Holders

If you hold incentive stock options with a strike price below the expected IPO price, you face a binary decision before the S-1 becomes effective. Exercise now and pay AMT on the difference between your strike price and the 409A valuation, or wait until post-IPO and convert the ISO to ordinary income treatment. On a $300K difference, early exercise triggers $81,000 in AMT. Waiting until post-IPO converts the same difference to $111,000 in ordinary income tax at 37%. The $30,000 savings only materializes if you hold the shares for one year post-exercise to qualify for long-term capital gains treatment on the appreciation. If you sell at lockup expiration, the AMT credit recapture eliminates most of the benefit.

Accredited Investor Allocation Strategy

Brokerage allocations for accredited investors typically range from 100 to 500 shares at the IPO price. At $18 per share, a 300-share allocation costs $5,400. First-day trading premiums for cybersecurity IPOs averaged 22% in 2025, but 60% of those gains reversed within 90 days. If you sell on day one, your $1,188 gain is taxed as short-term capital gains at your ordinary income rate.

Frequently Asked Questions

Q: When do RSUs vest in an IPO?
A: RSUs typically vest on the IPO pricing date, triggering immediate ordinary income tax on the fair market value of the shares.

Q: Can I sell shares on the IPO date to cover my tax bill?
A: No, employees face a 180-day lockup period from the pricing date, preventing any sales until March 2027 for a September 2026 IPO.

Q: How is the tax calculated if the stock price drops during lockup?
A: Tax is calculated on the IPO price at vest, not the sale price, meaning you owe tax on value you may no longer be able to realize.

Q: What is the breakeven holding period for ISO early exercise?
A: You must hold exercised ISOs for one year from exercise and two years from grant to qualify for long-term capital gains treatment on the full appreciation.

Run the Numbers

Use CalcMoney's Calculate Your After-Tax RSU Proceeds to see your exact figures under the current tax threshold.

This article is for informational purposes only and does not constitute professional financial, tax, or legal advice. Consult a qualified tax advisor or financial professional before making decisions regarding RSU vesting, ISO exercise, or IPO allocations.

Run the Numbers: Capital Gains Tax Terminal on CalcMoney — see your exact figures under current market conditions.

Data sourced from SEC EDGAR S-1 Filings (IPO). Rates and thresholds are for informational purposes only. Consult a licensed financial advisor before making mortgage, investment, or tax decisions.

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