16. Stock-Based Compensation

2021 Equity Incentive Plan

In July 2021, the Company’s board of directors adopted, and the Company’s stockholders approved the 2021 Equity Incentive Plan (the “2021 Plan”). The 2021 Plan provides for the grant of incentive stock options (“ISOs”) to employees and for the grant of nonstatutory stock options (“NSOs”), stock appreciation rights, restricted stock awards, restricted stock unit awards, performance awards and other forms of stock awards to employees, directors and consultants. Upon the approval of the 2021 Plan, no further grants were allowed under the prior equity incentive plan (the “2017 Plan”).

The number of shares of Class A Common Stock initially reserved for issuance under the 2021 Plan is 2,091,528. As of December 31, 2025, 178,154 shares were reserved for issuance and those shares remain available for future grant under the 2021 Plan. The number of shares reserved for issuance will automatically increase on January 1 of each year, for a period of 10 years, from January 1, 2022 through January 1, 2031, by 4.0% of the total number of shares of Celularity common stock outstanding on December 31 of the preceding calendar year, or a lesser number of shares as may be determined by the Company’s board of directors. On January 1, 2026, the number of shares reserved for issuance increased by 1,153,511 and those shares remain available for future grant under the 2021 Plan. The shares added to the 2021 Plan on January 1, 2026, remain subject to an effective registration statement on Form S-8. Shares subject to stock awards granted under the 2021 Plan that expire or terminate without being exercised in full will not reduce the number of shares available for issuance under the 2021 Plan. Additionally, shares issued pursuant to stock awards under the 2021 Plan that are repurchased or forfeited, as well as shares that are reacquired as consideration for the exercise or purchase price of a stock award or to satisfy tax withholding obligations related to a stock award, will become available for future grant under the 2021 Plan.

The 2021 Plan is administered by the Company’s board of directors. The Company’s board of directors, or a duly authorized committee thereof, may delegate to one or more officers the authority to (i) designate employees other than officers to receive specified stock awards and (ii) determine the number of shares to be subject to such stock awards. Subject to the terms of the 2021 Plan, the plan administrator has the authority to determine the terms of awards, including recipients, the exercise price or strike price of stock awards, if any, the number of shares subject to each stock award, the fair market value of a share, the vesting schedule applicable to the awards, together with any vesting acceleration, the form of consideration, if any, payable upon exercise or settlement of the stock award and the terms and conditions of the award agreements for use under the 2021 Plan. The plan administrator has the power to modify outstanding awards under the 2021 Plan. Subject to the terms of the 2021 Plan and in connection with a corporate transaction or capitalization adjustment, the plan administrator may not reprice or cancel and regrant any award at a lower exercise price, strike price or purchase price or cancel any award with an exercise price, strike price or purchase price in exchange for cash, property or other awards without first obtaining the approval of the Company’s stockholders.

Stock Option Valuation

Awards with Service Conditions

The following table presents, on a weighted average basis, the assumptions used in the Black-Scholes option-pricing model to determine the grant-date fair value of stock options granted during the years ended December 31, 2025 and 2024:

 Schedule of Weighted Average Grant Fair Value of Stock Options Using Black-Scholes Option-Pricing Model

The weighted average grant-date fair value per share of stock options granted during the years ended December 31, 2025 and 2024 was $1.16 and $2.66, respectively.

The following table summarizes option activity with service conditions under the 2021 Plan and the 2017 Plan:

 Schedule of Stock Option Activity

The aggregate intrinsic value of options is calculated as the difference between the exercise price of the stock options and the fair value of the Company’s Class A common stock for those options that had exercise prices lower than the fair value of Class A common stock.

The Company recorded stock-based compensation expense relating to option awards with service conditions of $5,081 and $8,336 for the years ended December 31, 2025 and 2024, respectively. During the years ended December 31, 2025 and 2024, the aggregate intrinsic value was $0 and $8, respectively, for the stock options exercised. As of December 31, 2025, unrecognized compensation cost for options issued with service conditions was $2,409 and will be recognized over an estimated weighted-average amortization period of 1.67 years.

Strategic Advisory Agreement

On May 19, 2025, the Company entered into a twelve-month strategic advisory agreement with a consultant for business development and strategic advisory services. The agreement may be terminated by the Company upon 30 days’ notice.

As consideration for the services, the Company issued 50,000 shares of common stock upon execution of the agreement. The fair value of the common stock upon issuance was $108. These shares carry piggyback registration rights in connection with any future registration of Company securities. In addition, the Company issued warrants to purchase an aggregate of 1,500,000 shares of the Company’s common stock, subject to the following terms and vesting conditions:

 Schedule of Warrants Purchase Agreement

The Company accounts for share-based compensation in accordance with ASC 718. The fair value of the restricted shares issued upon execution was measured using the market price of the Company’s common stock on the grant date. For warrants subject only to the passage of time (Tranches 1 and 4), compensation expense is recognized over the applicable vesting periods. For Tranches 2 and 3, vesting is contingent upon the successful closing of a strategic transaction. As of the filing date, management has determined that the closing of such a transaction is not yet probable. Therefore, no compensation expense has been recognized for Tranches 2 and 3. The Company will begin recognizing the expense for these tranches once achievement of the vesting condition becomes probable, measured at the grant-date fair value when that determination is made. During the year ended December 31, 2025, a total of $1,259 was included in compensation expense related to the warrants within selling, general and administrative expenses on the consolidated statement of operations and comprehensive loss.

The measurement of fair value of the warrants were determined utilizing a Black-Scholes model considering all relevant assumptions current at the date of issuance (i.e., share price of $2.17, exercise price of $3.00 and $12.00, term of five years, volatility of 106%, risk-free rate of 4.07%, and expected dividend rate of 0%). The grant date fair value of the warrants was estimated to be $2,158 on issuance.

In addition, the Consultant is entitled to receive a success fee payable in cash (unless mutually agreed for all or part to be paid in shares) based on the net proceeds from the closing of a strategic transaction. As of the filing date, the transaction has not closed, and management has concluded it is not probable that the strategic transaction will occur. Accordingly, no liability or expense has been recorded for this contingent success fee under ASC 450. The Company will recognize the fee when the closing becomes probable, and the amount can be reasonably estimated.

Restricted Stock Units

The Company issues restricted stock units (“RSUs”) to employees that generally vest over a 4four-year period, with 25% vesting on the anniversary of the grant date, and the remainder vesting in equal annual installments thereafter so that the RSUs are vested in full on the four-year anniversary of the grant date. At times, the board of directors may approve exceptions to the standard RSU vesting terms. Any unvested shares will be forfeited upon termination of services. The fair value of an RSU is equal to the fair market value price of the Company’s common stock on the date of grant. RSU expense is amortized straight-line over the vesting period. There are no RSUs outstanding under the 2017 Plan.

The following table summarizes activity related to RSU stock-based payment awards under the 2021 Plan:

 Schedule of Activity Related to RSU Stock-Based Payment Awards

The Company recorded stock-based compensation expense of $3,062 and $3,022 for the years ended December 31, 2025 and 2024, respectively, related to RSUs. As of December 31, 2025, the total unrecognized expense related to all RSUs was $1,497, which the Company expects to recognize over a weighted-average period of 1.07 years.

Stock Units with Market Condition Vesting

In July 2023, the Company granted 174,500 market condition stock unit awards (“MCUs”) under the 2021 Plan to certain members of management. The awards are scheduled to vest over a period of one to three years from the grant date based on continuous employment and specified market conditions based on the Company’s stock price at the time of vest. As of December 31, 2025, 145,835 of the MCUs had been forfeited as a result of the participant’s termination of continuous service. Stock-based compensation expense for the 28,665 MCUs outstanding as of December, 31 2025, is being recognized over the requisite service period based on the award’s fair value on the grant date. The Company recognized stock compensation of $30 and $211 for the years ended December 31, 2025 and 2024, respectively, related to MCU’s.

October 2025 Consultant Warrants

On October 9, 2025, the Company and a third-party consultant signed a consulting agreement pursuant to which the consultant agreed to provide the Company certain services in exchange for consideration of 1,500,000 warrants with an exercise price of $2.50, 1,500,000 warrants with an exercise price of $3.50, and 1,500,000 warrants with an exercise price of $4.50 (collectively known as the “October 2025 Consultant Warrants”) as well as 100,000 shares of common stock. Each of the October 2025 Consultant Warrants contain a performance obligation based on the close of a sale of a property owned by the Company, and has a five5-year term expiring on October 9, 2030 and was granted on October 9, 2025. The October 2025 Consultant Warrants also contain a market condition; and will become exercisable in the event that the thirty day VWAP of the Company’s stock becomes twice the exercise price of the warrant for thirty days.

Given that the October 2025 Consultant Warrants contain a market condition and a performance condition, the compensation cost from the October 2025 Consultant Warrants is recognized as if two awards were granted; one award with the market condition and one award with the performance condition. The fair value of the October 2025 Consultant Warrants market condition award was $5,415, which is recognized on a straight-line basis over the term of the consulting agreement. The Company recognized stock-based compensation cost from the October 2025 Consultant Warrants during the year ended December 31, 2025 of $2,469 as a result of the market condition award. As of December 31, 2025 $2,946 of stock-based compensation remained unrecognized as result of the market condition award. The market condition award had a remaining term of 0.3 years.

The fair value of the Consulting Warrants performance condition award was not recognized as stock-based compensation cost as of December 31, 2025 as the underlying sale of property was not considered probable. The stock-based compensation relating to the performance condition will be recognized in the event that the property sale is deemed probable of occurring. The fair value of the performance condition award was $6,604.

The fair value of the market condition award was determined using a Monte Carlo valuation model. Significant inputs used in the market condition award valuation model were as follows: stock price $2.13, risk-free rate 3.74%, annual volatility 107.1%, exercise price $2.50 – $4:50, and market condition price $5.00 – $9.00.

Stock-Based Compensation Expense

The Company recorded stock-based compensation expense in the following expense categories of its consolidated statement of operations and comprehensive loss:

Schedule of Stock-based Compensation Expense