STOCKHOLDERS' EQUITY

3 Months Ended

Mar. 31, 2025

STOCKHOLDERS’ EQUITY

Registered Offering

On March 21, 2024, we completed an underwritten public offering of 41,999,998 shares of our common stock and a pre-funded warrant to purchase 8,002,668 shares of our common stock, or the 2024 pre-funded warrant. All of the securities were issued separately. The public offering price of the common stock was $3.00 per share. The public offering price of the 2024 pre-funded warrant was $2.99 per share. The 2024 pre-funded warrant has an exercise price of $0.001 per share and may be exercised at any time until the 2024 pre-funded warrant is exercised in full. The net cash proceeds from the March 2024 offering were approximately $141.0 million, after deducting the underwriting discount and other offering expenses paid by us, and excluding any future proceeds from the exercise of the pre-funded warrant. As of March 31, 2025, 5,380,000 pre-funded warrants issued in connection with our 2024 underwritten public offering have been net exercised, which resulted in the issuance of 5,378,199 shares of our common stock.

Upon the issuance of the 2024 pre-funded warrant, we evaluated the warrant terms to determine the appropriate accounting and classification pursuant to FASB Accounting Standards Codification Topic 480, Distinguishing Liabilities from Equity, and FASB Accounting Standards Codification Topic 815, Derivatives and Hedging. Warrants are classified as liabilities when the warrant terms allow settlement of the warrant exercise in cash and classified as equity when the warrant terms only allow settlement in shares of common stock. The terms of the 2024 pre-funded warrant include certain provisions related to fundamental transactions and a cashless exercise provision in the event registered shares are not available, and do not include any mandatory redemption provisions. Based on our evaluation, we concluded the 2024 pre-funded warrant should be classified as equity with no subsequent remeasurement as long as such warrant continue to be classified as equity.

Warrant Exercises

In the first quarter of 2025, 30,380,000 pre-funded warrants issued in connection with our underwritten public offerings have been net exercised, which resulted in the issuance of 30,369,830 shares of our common stock. The warrants were issued in connection with underwritten public offerings of common stock and pre-funded warrants. As of March 31, 2025, the following warrants remained outstanding from our offerings:

•pre-funded warrants with an exercise price of $0.001 per share to purchase 29,053,145 shares of our common stock, which have no expiration date; and

•stock purchase warrants with an exercise price of $1.30 per share to purchase 1,402,522 shares of our common stock, which expire on December 31, 2025.

Net Loss Per Share

Basic net income (loss) per share is calculated by dividing net income (loss) by the weighted-average number of shares of common stock outstanding for the periods presented without consideration of potential common

shares. In connection with previous public offerings, we issued pre-funded warrants to purchase shares of our common stock.

Diluted net income per share would be calculated by adjusting the weighted-average number of shares of common stock outstanding for the dilutive effect of additional shares of common stock that would have been outstanding if potentially dilutive securities had been issued, as determined using the treasury-stock method. Potential dilutive securities consist of outstanding stock options and warrants to purchase our common stock. Diluted net loss per share excludes potential dilutive securities for all periods presented as their effect would be anti-dilutive. Accordingly, basic and diluted net loss per share is the same for all periods presented in the accompanying condensed consolidated statements of operations. Since we incurred a net loss for the three months ended March 31, 2025 and 2024, the diluted net loss per share calculation excludes potential dilutive securities of 80,776,089 and 84,430,455, respectively, related to outstanding stock options and warrants as their effect would have been anti-dilutive.

Stock-Based Compensation

We maintain various stock incentive plans under which stock options and restricted stock awards and units can be granted to employees, non-employee directors and consultants, as applicable. We also have an employee stock purchase plan for all eligible employees. We recognize stock-based compensation expense based on grant-date fair values of service-based stock options and restricted stock units ("RSU") on a straight-line basis over the requisite service period, which is generally the vesting period. For performance-based stock options ("PSO") with vesting based on the achievement of certain strategic milestones, stock-based compensation expense is recognized over the period from the date the performance condition is determined to be probable of occurring through the date the applicable condition is expected to be met and is reduced for estimated forfeitures, as applicable. If the performance condition is not considered probable of being achieved, no stock-based compensation expense is recognized until such time as the performance condition is considered probable of being met, if at all. If the assessment of probability of the performance condition changes, the impact of the change in estimate would be recognized in the period of the change. The determination of grant-date fair values for our service-based and performance-based stock options and employee stock purchases using the Black-Scholes option‑pricing model is affected by our stock price as well as assumptions regarding a number of complex and subjective variables. The grant-date fair value for service-based restricted stock awards is determined using the fair value of our common stock on the date of grant. We evaluate whether an adjustment to the assumptions of fair value of our common stock and historical volatility are required if observed prices of our common stock materially differ from historical information.

The following table summarizes the stock-based compensation expense included in operating expenses on our condensed consolidated statements of operations related to stock options, restricted stock units, and employee stock purchases for the three months ended March 31, 2025 and 2024, which was allocated as follows:


	Three Months Ended March 31,
(In thousands)	2025		2024
Research and development	$	2,395	$	1,681
Selling, general and administrative	5,013		3,196
Total stock-based compensation expense	$	7,408	$	4,877

Stock-based compensation of $0.3 million and $0.0 was capitalized to inventory for the three months ended March 31, 2025 and 2024, respectively.

As stock-based compensation expense recognized in our condensed consolidated statements of operations for the three months ended March 31, 2025 and 2024 is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures, but at a minimum, reflects the grant-date fair value of those awards that actually vested in the period. Forfeitures have been estimated at the time of grant based on historical data and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

Stock Options

We grant service-based and performance-based stock options under our equity plans to employees, non-employee directors and consultants. The service-based vesting period for employee stock options is generally four years from the date of the stock option grant. Performance-based stock options vest upon the achievement of specified strategic milestones. The fair value of service-based stock options granted during the three months ended March 31, 2025 and 2024 has been estimated at the date of grant using the Black- Scholes option-pricing model with the following assumptions:


	Three Months Ended March 31,
	2025	2024
Dividend yield	0%	0%
Expected volatility range	71.42% to 73.36%	82.94% to 86.68%
Risk-free interest rate range	4.16% to 4.47%	4.05% to 4.32%
Expected term	6 years	6 years

Employee Stock Purchase Plan

The fair value of employees’ stock purchase rights during the three months ended March 31, 2025 and 2024 has been estimated using the Black-Scholes option-pricing model with the following assumptions:


	Three Months Ended March 31,
	2025	2024
Dividend yield	0%	0%
Expected volatility range	44.18% to 93.79%	59.46% to 79.05%
Risk-free interest rate range	4.17% to 5.10%	4.79% to 5.40%
Expected term range	6 months to 12 months	6 months to 12 months

Dividend yield is based on historical cash dividend payments and Geron has paid no cash dividends to date. The expected volatility range is based on historical volatilities of our stock, since traded options on Geron common stock do not correspond to option terms and the trading volume of options is limited. The risk-free interest rate range is based on the U.S. Zero Coupon Treasury Strip Yields for the expected term in effect on the date of grant for an award. The expected term of stock options is derived from actual historical exercise and post-vesting cancellation data and represents the period of time that stock options granted are expected to be outstanding. The expected term of employees’ stock purchase rights is equal to the purchase period.

Restricted Stock Units

We grant service-based RSUs under our equity plans to employees. The service-based vesting period for an employee RSU is generally four years from the date of the grant. We measure the expense of the RSUs based on the grant-date fair value.

Non-Employee Stock-Based Awards

We measure share-based payments to non-employees based on the grant-date fair value of the equity awards. We recognize stock-based compensation expense for the fair value of the vested portion of non-employee stock-based awards on our condensed consolidated statements of operations.

The following table summarizes the activity for stock options, RSUs and PSOs for the three months ended March 31, 2025 (in thousands):


	Stock Options	RSU's	PSO's
Equity awards outstanding, beginning of year	71,180,260	—	4,787,107
Changes during the year
Granted	11,834,500	3,673,750	—
Exercised	(125,999)	—	(29,350)
Expired or Forfeited	(11,558,265)	(586,500)	(350,000)
Equity outstanding, end of period	71,330,496	3,087,250	4,407,757
Unvested portion of equity outstanding, end of period	35,516,641	3,087,250	100,000

As of March 31, 2025, total compensation cost related to unvested awards not yet recognized and the weighted-average periods over which the awards are expected to be recognized were as follows ($ in thousands):


	Stock Options		RSU's	PSO's
Unrecognized compensation cost	$	45,466,916	6,684,077	32,971
Expected weighted-average period in years of compensation cost to be recognized	2.83		3.89	0.22