In February 2021, the board of directors of BC approved the 2021 Plan to grant options to certain employees and consultants of BC.

The 2021 Plan had a contractual term of seven years. Options granted under the 2021 Plan were accounted for as equity awards and subject to a service condition. Upon the Contributions, BC terminated the 2021 Plan and the BC Options under the 2021 Plan were terminated and replaced with options to purchase Gyre Common Stock granted under the 2023 Omnibus Incentive Plan that are substantially similar in all material respects to the BC Options previously outstanding under the 2021 Plan.

In October 2023, prior to the Contributions, the Board of Directors of BC modified the expiration term of the fully vested BC Options to be extended to February 3, 2028. Following this modification, the total incremental stock-based compensation of $2.0 million was immediately recognized.

In June 2018, stockholders of Catalyst approved a 2018 Omnibus Incentive Plan, as amended in June 2021 (the “2018 Omnibus Incentive Plan”). Each option to purchase shares of Catalyst common stock that was issued and outstanding under the 2018 Omnibus Incentive Plan immediately prior to the Effective Time remains outstanding and unaffected after the Contributions in accordance with its terms.

The 2023 Omnibus Incentive Plan was approved by Catalyst’s stockholders in August 2023 and ratified by Gyre’s Board in October 2023. The 2023 Omnibus Incentive Plan became effective on October 30, 2023. The 2023 Omnibus Incentive Plan permits the Company to deliver up to 17,845,496 shares of Common Stock and will automatically increase by the lesser of (i) 5% of the total number of outstanding shares of Common Stock on December 31st of the preceding calendar year and (ii) such smaller number of shares of Common Stock as determined by the Board on the first day of each fiscal year beginning on January 1, 2024.

After the Contributions, the Company modified the expiration term of the fully vested options originally granted as the BC options to be extended to October 30, 2030. As a result of this modification, the total incremental stock-based compensation of $0.8 million was immediately recognized.

On October 30, 2023, upon closing of the Contributions, the Gyre Board approved grants to five individuals, to be made on October 31, 2023, of an aggregate of 820,824 fully vested stock options in consideration for services rendered in connection with the Contributions transactions. Although the awards were granted for the services in connection with the Contributions, which were direct and incremental costs incurred to complete the reverse asset acquisition, they were issued to Gyre’s employees and consultants who worked on the Contributions instead of third-parties and therefore, do not qualify as transactions costs of the reverse asset acquisition.

The following table summarizes stock option activity considering the conversion of BC Options to Gyre options to purchase shares of Gyre Common Stock upon completion of the GNI USA Contributions:


	Number of Shares Underlying Outstanding Options			Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value (Thousands)
Outstanding at December 31, 2022		17,036,941		$	0.75		5.1	$	12,667
Forfeited		(18,936	)	$	0.75
Deemed issuance of options to former stockholders of Catalyst upon the GNI USA Contributions		435,916		$	20.10
Granted		838,686		$	6.93
Exercised		(12,059	)	$	13.86
Outstanding at December 31, 2023		18,280,548		$	1.49		6.9	$	444,197
Exercisable at December 31, 2023		18,262,686		$	1.48		6.9	$	19,433

The weighted-average grant date fair value of options granted during the year ended December 31, 2023 was $5.45 per share. No options were granted during the year ended December 31, 2022.

The aggregate intrinsic value of options exercised during the year ended December 31, 2023 was $0.1 million. No options were exercised during the year ended December 31, 2022.

The Company estimated the fair value of stock options granted using the Black-Scholes option-pricing formula and a single option award approach. Due to its limited relevant historical data, the Company estimated its volatility considering a number of factors, including the use of the volatility of comparable public companies. The expected term of options granted under the 2023 Omnibus Incentive Plan, all of which qualify as “plain vanilla” per SEC Staff Accounting Bulletin 107, is determined based on the simplified method due to the Company’s limited relevant history. The risk-free rate is based on the yield of a U.S. Treasury security with a term consistent with the option. This fair value is being amortized ratably over the requisite service periods of the awards, which is generally the vesting period.

The fair value of employee stock options granted was estimated using the following weighted-average assumptions:


	Year Ended December 31,
	2023
Expected volatility (%)	84.30-84.30
Risk-free interest rate (%)	3.82-4.77
Expected option life (in years)	5.0-5.8
Expected dividend yield (%)		—
Weighted average share price of the Company (USD per share)	$	6.93

Total stock-based compensation recognized was as follows (in thousands):


	Year Ended December 31,
	2023		2022
Cost of revenues	$	52	$	249
Selling and marketing		344		1,643
Research and development		481		2,301
General and administrative		6,404		9,173
Total	$	7,281	$	13,366

As of December 31, 2023, the Company had an unrecognized stock-based compensation expense of $0.1 million, related to unvested stock option awards, which is expected to be recognized over an estimated weighted-average period of 1.87 years.