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Stock Based Compensation | 3 Months Ended
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Mar. 31, 2024
Share-Based Payment Arrangement [Abstract] |
Stock Based Compensation |
10. | Stock Based Compensation
2023 Omnibus Incentive Plan The 2023 Omnibus Incentive Plan was approved by Catalyst’s stockholders in August 2023 and ratified by Gyre’s board of directors (the “Board”) in October 2023. The 2023 Omnibus Incentive Plan became effective on October 30, 2023. The 2023 Omnibus Incentive Plan permits the Company to issue 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. On January 1, 2024, pursuant to the automatic increase in the number of shares reserved, an additional 3,829,780 shares of common stock were reserved and made available for issuance under the 2023 Omnibus Incentive Plan. The following table summarizes stock option activity considering the conversion of Gyre Pharmaceuticals options to Gyre options to purchase shares of Gyre common stock upon completion of the Contributions:
|  | Number of Shares Underlying Outstanding Options |  |  | Weighted- Average Exercise Price |  |  | Weighted- Average Remaining Contractual Term (Years) |
Outstanding — December 31, 2023 |  |  | 18,280,548 |  |  | $ | 1.49 |  |  |  | 6.9 |
Options granted |  |  | 1,866 |  |  | $ | 17.86 |  |  |  |
Options exercised |  |  | (60,297 | ) |  | $ | 8.15 |  |  |  |
Options forfeited and cancelled |  |  | (3,622 | ) |  | $ | 22.85 |  |  |  |
Outstanding — March 31, 2024 |  |  | 18,218,495 |  |  | $ | 1.46 |  |  |  | 6.7 |
Exercisable — March 31, 2024 |  |  | 18,205,433 |  |  | $ | 1.46 |  |  |  | 6.7 |
Valuation Assumptions 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. Since no stock options were granted during the three months ended March 31, 2023, all weighted-average assumptions for that period were not applicable. The fair value of employee stock options granted during the three months ended March 31, 2024 was estimated using the following weighted-average assumptions:
|  | Three Months Ended March 31,
|  | 2024 |  |  | 2023
Risk-free interest rate (%) |  |  | 4.2 | % |  | n/a
Expected option life (in years) |  |  | 6.0 |  |  | n/a
Expected dividend yield (%) |  |  | — | % |  | n/a
Volatility (%) |  |  | 84.3 | % |  | n/a
Weighted average share price of the Company (USD per share) |  | $ | 17.86 |  |  | n/a
Total stock-based compensation expense recognized was as follows (in thousands):
|  | Three Months Ended March 31, |
|  | 2024 |  |  | 2023 |
General and administrative |  | $ | 11 |  |  | $ | — |
Total stock-based compensation expense |  | $ | 11 |  |  | $ | — |
As of March 31, 2024, 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 2.7 years.

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