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STOCK-BASED COMPENSATION

12 Months Ended

Dec. 31, 2024

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION

10. STOCK-BASED COMPENSATION

Stock Option Plans

As of December 31, 2024, the Company had two Long Term Incentive Plans (the “2014 Plan” and the “2006 Plan”) to attract, retain, and provide incentives to employees, officers, directors, and consultants. The Plans generally provide for the granting of stock, stock options, stock appreciation rights, restricted shares, or any combination of the foregoing to eligible participants.

In June 2024, the Company amended and restated CytoSorbents Corporation 2014 Long-term Incentive Plan (the “Plan”). The amended and restated CytoSorbents Corporation 2014 Long-term Incentive Plan (the “Plan”) increased the number of shares to be reserved and authorized for issuance under the Plan by 7,500,000 shares to 20,900,000 shares of our Common Stock.

A total of 20,900,000 and 2,400,000 shares of common stock are reserved for issuance under the 2014 Plan and the 2006 Plan, respectively. As of December 31, 2023, there were approximately 647,000 and 654,000 shares of common stock remaining for issuance under the 2014 Plan and the 2006 Plan, respectively. As of December 31, 2024, there were approximately 3,700,000 and 654,000 shares of common stock remaining for issuance under the 2014 Plan and the 2006 Plan, respectively.

Total stock-based compensation expense for the year ended December 31, 2024 amounted to $3.8 million, of which $3.2 million and $0.6 million were for stock options and restricted stock units, respectively. Total stock-based compensation expense for the year ended December 31, 2023 amounted to $4.2 million, of which $3.3 million and $0.9 million were for stock options and restricted stock units, respectively. These amounts are included in selling, general, and administrative expenses on the consolidated statements of operations and comprehensive loss.

The summary of the stock option activity for the years ended December 31, 2024 and 2023 is as follows:


							Weighted
				Weighted			Average
				Average			Remaining
				Exercise			Contractual
		Shares		per Share			Life (Years)

Outstanding, December 31, 2022		9,474,824		$	4.66		7.36
Granted		2,601,880		$	3.43		9.52
Forfeited		(974,555)		$	2.96		—
Expired		(467,332)		$	5.61		—
Exercised		(86,643)		$	2.59		—
Outstanding, December 31, 2023		10,548,174		$	4.49		7.01
Granted		3,982,846		$	0.97		9.32
Forfeited		(1,391,897)		$	2.24		—
Expired		(797,209)		$	5.34		—
Outstanding, December 31, 2024		12,341,914		$	3.55		6.81

The fair value of each stock option was estimated using the Black-Scholes pricing model which takes the following inputs into account.

Grant Date

Expected Life

Expected

Risk Free

Exercise Price

of the Stock

Volatility

Expected

Interest Rate

Year - Ended

Range

Option*

Range

Dividends

Range

December 31, 2023

$

1.17 - $3.71 per share

6 years

70.4% to 75.6

%

—

%

3.50% to 4.76

%

December 31, 2024

$

0.84 - $1.19 per share

6 years

75.6% to 80.1

%

—

%

3.60% to 4.65

%

*The expected term of the options granted is derived using the “simplified method” which computes expected term as the average of the sum of the vesting term plus the contract term.

In addition, the Company recognizes forfeitures as they occur.

The intrinsic value is calculated at the difference between the market value as of December 31, 2024 of $0.91 and the exercise price of the shares.


Options Outstanding
		Number		Weighted			Weighted
Range of		Outstanding at		Average			Average		Aggregate
Exercise		December 31,		Exercise			Remaining		Intrinsic
Price		2024		Price			Life (Years)		Value
$0.84 - $13.20		12,341,914		$	3.55		6.81		$	1,000


Options Exercisable
Number		Weighted
Exercisable at		Average			Aggregate
December 31,		Exercise			Intrinsic
2024		Price			Value
6,107,366		$	5.46		$	—

The summary of the status of the Company’s non-vested options for the year ended December 31, 2024, is as follows:


				Weighted
				Average
				Grant Date
		Shares		Fair Value

Non-vested, January 1, 2024		5,205,736		$	1.89
Granted		3,982,846			0.68
Forfeited		(1,391,897)			1.52
Vested		(1,562,137)			2.26
Non-vested, December 31, 2024		6,234,550		$	1.09

As of December 31, 2024, the Company had approximately $3,035,000 of total unrecognized compensation cost related to stock options which will, on average, be amortized over 32 months.

The summary of the status of the Company’s non-vested options for the year ended December 31, 2023, is as follows:


				Weighted
				Average
				Grant Date
		Shares		Fair Value

Non-vested, January 1, 2023		4,851,739		$	1.84
Granted		2,601,880			2.35
Forfeited		(974,555)			1.95
Vested		(1,273,328)			2.59
Non-vested, December 31, 2023		5,205,736		$	1.89

As of December 31, 2023, the Company had approximately $4,868,000 of total unrecognized compensation cost related to stock options which will, on average, be amortized over 42 months.

Change in Control-Based Awards of Restricted Stock Units:

The Board of Directors has granted restricted stock units to members of the Board of Directors, to the Company’s executive officers, and to employees of the Company. These restricted stock units will only vest upon a Change in Control of the Company, as defined in the Company’s 2014 Long-Term Incentive Plan.

The following table is a summary the outstanding balance of these restricted stock units at the end of each of the past two calendar years:


		Total		Intrinsic Value
December 31, 2022		2,890,500		$	4,480,275
Granted 2023		394,000			—
Forfeited 2023		(461,000)			—
December 31, 2023		2,823,500		$	3,134,085
Granted 2024		331,250			—
Forfeited 2024		(345,250)			—
December 31, 2024		2,809,500		$	2,556,645

Due to the uncertainty over whether these restricted stock units will vest, which will only happen upon a Change in Control, no charge for these restricted stock units has been recorded in the consolidated statements of operations and comprehensive loss through the year ended December 31, 2024.

Other Restricted Stock Units:

The following table outlines the restricted stock unit activity (not related to change in control-based awards) for the year ended December 31, 2024:


				Weighted
				Average
				Grant Date
		Shares		Fair Value
Non-vested, January 1, 2024		430,505		$	3.31
Granted		548,000		$	0.96
Forfeited		(40,000)		$	3.73
Vested		(297,169)		$	3.23
Non-vested, December 31, 2024		641,336		$	1.31

The following table outlines the restricted stock unit activity for the year ended December 31, 2023:


				Weighted
				Average
				Grant Date
		Shares		Fair Value
Non-vested, January 1, 2023		312,092		$	4.42
Granted		385,000		$	3.23
Forfeited		(62,500)		$	3.57
Vested		(204,087)		$	4.79
Non-vested, December 31, 2023		430,505		$	3.31

At December 31, 2024 and December 31, 2023, the remaining weighted average vesting period for restricted stock awards subject to vesting was 43 months and 37 months, respectively and the remaining unrecognized restricted stock unit compensation expense was $538,000 and $842,000, respectively.

Warrants

As of December 31, 2024, the Company had 2,706,561 warrants outstanding related to the Company’s December 13, 2023 Offering. These warrants are immediately cash exercisable at an exercise price of $2.00 per share and expire on December 13, 2028. Another 1,645,569 warrants were issued on June 28, 2024 in connection with the Company’s Loan and Security Agreement with Avenue and these warrants have an exercise price of $0.79 and expire on June 28, 2029. The number of warrants is fixed, however, the exercise price may be adjusted down if the Company raises equity (excluding sales of equity utilizing the Company’s at-the-market equity facility) at a share price that is lower than $0.79. These warrants are exercisable into the Company’s common stock.