Stock-Based Compensation

9 Months Ended

Sep. 30, 2025

Share-Based Payment Arrangement [Abstract]

8. Stock-Based Compensation

Equity Incentive Plan

In August 2018, iMDx shareholders approved an Equity Incentive Plan to replace the 2010 Stock Option Plan (the “2010 Plan”) and in October 2024, iMDx shareholders approved an amendment and restatement of such Equity Incentive Plan (as amended and restated, the “2018 Incentive Plan”). The 2018 Incentive Plan will expire on July 2, 2028. In initially adopting the 2018 Incentive Plan, iMDx terminated the 2010 Plan and ceased to grant any additional stock options or sell any stock under restricted stock purchase agreements under the 2010 Plan; however, stock options issued under the 2010 Plan continue in effect in accordance with their terms and the terms of the 2010 Plan until the exercise or expiration of the individual options. Total remaining stock options outstanding under the 2010 Plan as of September 30, 2025 and December 31, 2024, were 6,152 and 16,217, respectively.

As of September 30, 2025, 4,060,000 aggregate shares of common stock have been reserved for issuance under the equity incentive plans for the grant of stock options or the sale of restricted stock or for the settlement of RSUs. iMDx may also grant stock appreciation rights under the 2018 Incentive Plan. Upon the exercise of stock options, the issuance of RSAs, or the delivery of shares pursuant to vested RSUs or performance-based restricted stock units (“PSUs”), it is iMDx’s policy to issue new shares of common stock. The Board may amend or modify the 2018 Incentive Plan at any time, subject to any required stockholder approval. Shares available for grant under the 2018 Incentive Plan as of September 30, 2025 and December 31, 2024, were 420,536 and 1,026,314, respectively.

Plan Activity

A summary of iMDx’s 2010 Plan and 2018 Incentive Plan activity and related information follows:


	Options								Nonvested RSUs
	Number Outstanding			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life	Aggregate Intrinsic Value		Number Outstanding			Weighted Average Grant Date Fair Value
	(In thousands, except weighted average amounts)
Balance at December 31, 2024		1,091		$	12.42	8.56 years	$	—		100		$	1.73
Awards granted		1,295		$	3.33					837		$	3.14
Options exercised		—		$	—		$	—	n/a			n/a
RSUs vested	n/a			n/a						(20	)	$	3.32
Options forfeited/expired		(27	)	$	56.16				n/a			n/a
RSUs forfeited	n/a			n/a						—		$	—
Balance at September 30, 2025		2,359		$	6.93	9.09 years	$	306		917		$	2.98
Options vested and expected to vest at September 30, 2025		2,359		$	6.93	9.09 years	$	306
Options exercisable at September 30, 2025		518		$	19.60	7.52 years	$	116
Stock-based compensation expense for the period	$	1,023							$	475
Unrecognized stock-based compensation expense	$	4,255							$	2,243
Weighted average remaining recognition period	2.64 years								2.67 years

Option Awards

During the nine months ended September 30, 2025, the Company granted 1,295,000 total stock options with a weighted average grant date fair value of $2.55 per option. During the nine months ended September 30, 2024, the Company granted 362,000 total stock options with a weighted average grant date fair value of $2.37 per option. The assumptions used to calculate the Black-Scholes grant date fair value for such time-based awards were as follows:


	Nine Months Ended September 30,
	2025			2024
Expected life	6.19 years			6.22 years
Risk-free interest rates		3.84	%		4.45	%
Volatility		89.97	%		107.31	%
Dividend yield		0	%		0	%

In October 2024, the Company awarded a 200,000 stock option grant with standard time-based vesting conditions, a grant date market price of $3.05 and an exercise price of $2.87 to a Company executive. The fair value of such award was estimated using the Monte Carlo simulation model and the following assumptions: estimated risk-free interest rate of 4.10 percent; term of 9.7 years; expected volatility of 105.0 percent; and expected dividend yield of 0 percent. The risk-free interest rate was determined based on the yields available on U.S. Treasury zero-coupon issues. The term is based on the contractual life. The expected stock price volatility was determined using historical volatility. The expected dividend yield was based on expectations regarding dividend payments. The grant date fair value of the award was $1.65, amounting to a total fair value of $330,000.

In August 2023, the Company awarded 120,000 stock option grants with market-based and time-based vesting conditions, and a grant date market price and exercise price of $3.34 to certain executives. The fair value of such awards was estimated using the Monte Carlo simulation model. Assumptions and estimates utilized in the model include the risk-free interest rate, dividend yield, expected stock volatility and the estimated period to achievement of the performance and market conditions, which are subject to the achievement of the market-based goals established by the Company and the continued employment of the executives through December 31, 2025. These awards vest only to the extent that the market-based conditions are satisfied as specified in the vesting conditions. The grant date fair value and associated compensation cost of the market-based awards reflect the probability of the market condition being achieved, and the Company will recognize this compensation cost regardless of the actual achievement of the market-based conditions. Assumptions utilized in connection with the Monte Carlo valuation technique included: estimated risk-free interest rate of 4.81 percent; term of 6.19 years; expected volatility of 91.0 percent; and expected dividend yield of 0 percent. The risk-free interest rate was determined based on the yields available on U.S. Treasury zero-coupon issues. The expected stock price volatility was determined using historical volatility. The expected dividend yield was based on expectations regarding dividend payments. Based on the market-based conditions, the grant date fair values of these awards ranged from $1.09 to $1.74, amounting to a total fair value of approximately $156,000. As of September 30, 2025, no awards have vested as none of the market-based conditions have been satisfied.

RSU Awards

The weighted average grant date fair value of RSUs granted during the nine months ended September 30, 2025 was $3.14 per unit. No RSUs were granted during the nine months ended September 30, 2024. The aggregate fair value of RSUs vested during the nine months ended September 30, 2025 and 2024, was $68,000 and $11,000, respectively.

During the nine months ended September 30, 2025, the Company issued 20,464 shares of unregistered common stock upon settlement of RSU awards granted from the 2018 Incentive Plan under immediate vest RSU awards in connection with two ongoing investor relations consulting service arrangements for a total fair value of $68,000. No such shares were issued during the nine months ended September 30, 2024. During 2025 and 2024, the Company issued additional restricted shares to these consulting firms under unregistered restricted stock arrangements, refer to Note 7, “Common Stock – Unregistered Restricted Stock Issuance” for additional information. Total shares issued to these consulting firms during the nine months ended September 30, 2025 and 2024, were 26,120 and 26,664, respectively. The total related expense, included in general and administrative expenses, for these consulting firms was $84,000 and $72,000 for the nine months ended September 30, 2025 and 2024, respectively.

In October 2024, the Company awarded 100,000 PSUs with market-based and service-based vesting conditions, and a grant date market price of $3.05 to a Company executive. Vesting is subject to continuous service as an employee of iMDx or a subsidiary thereof from hire date through the applicable vesting date, and shall performance vest as follows: (i) 50% will vest upon the Company’s achievement of an aggregate market value of voting and non-voting common equity held by non-affiliates of the Company of $75.0 million or more, such that the Company is no longer subject to the “Baby Shelf Rules” of Form S-3, and (ii) 50% will vest upon the Company’s achievement of a market capitalization of $200.0 million, which shall be determined based on the 30-day volume weighted average price of the common stock measured as of the end of each full calendar month following the date of grant. No units will vest prior to June 20, 2025, and any units that are not performance vested on December 31, 2026 shall automatically be forfeited. The fair value of such award was estimated using the Monte Carlo simulation model. Assumptions and estimates utilized in the model include the risk-free interest rate, dividend yield, expected stock volatility and the expected period to achievement of the market conditions. The grant date fair value and associated compensation cost of the market-based award reflect the probability of the market condition being achieved, and the Company will recognize this compensation cost regardless of the actual achievement of the market-based conditions. Assumptions utilized in connection with the Monte Carlo valuation technique included: estimated risk-free interest rate of 3.93 percent; term of 2.2 years; expected volatility of 90.0 percent; and expected dividend yield of 0 percent. The risk-free interest rate was determined based on the yields available on U.S. Treasury zero-coupon issues. The expected stock price volatility was determined using historical volatility. The expected dividend yield was based on expectations regarding dividend payments. Based on the two described performance vesting conditions, the grant date fair values were $2.03 and $1.43, respectively, amounting to a total fair value of $173,000. As of September 30, 2025, no awards had vested as none of the market-based conditions were satisfied. On October 31, 2025, 50,000 PSUs vested based on the achievement of an aggregate market value of common equity held by non-affiliates of $75.0 million or more, as described above.

Stock-Based Compensation Expense

iMDx recorded stock-based compensation expense in the following categories on the accompanying consolidated statements of operations:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
	(In thousands)
Cost of revenues	$	—	$	2	$	—	$	—
Research and development		161		198		529		607
Sales and marketing		44		44		124		127
General and administrative		316		206		845		520
Total	$	521	$	450	$	1,498	$	1,254

Total unrecognized stock-based compensation expense as of September 30, 2025 was $6.5 million, which will be amortized over a weighted average remaining recognition period of 2.65 years.

Other Information

The determination of stock-based compensation is inherently uncertain and subjective and involves the application of valuation models and assumptions requiring the use of judgment. If iMDx had made different assumptions, its stock-based compensation expense and results for the periods presented may have been significantly different. Refer to Note 2, “Stock-Based Compensation” for additional information.

iMDx does not recognize deferred income taxes for incentive stock option compensation expense and records a tax deduction only when a disqualified disposition has occurred.

Insight Molecular Diagnostics Inc. 10-Q