Note 9. Stock-Based Compensation

The Company has long-term compensation plans that permit the granting of equity-based awards in the form of stock options, restricted stock, restricted stock units, stock appreciation rights, other stock awards, and performance awards.

At the 2018 Annual Stockholders Meeting of the Company (“ASHM”) held on May 15, 2018, stockholders approved the Imunon, Inc. 2018 Stock Incentive Plan (the “2018 Plan”). The 2018 Plan, as originally adopted, permitted the granting of shares of Imunon common stock as equity awards in the form of incentive stock options, nonqualified stock options, restricted stock, restricted stock units, stock appreciation rights, other stock awards, performance awards, or in any combination of the foregoing.

Stockholders have since approved amendments to the 2018 Plan at the 2019 ASHM held on May 14, 2019, the 2020 ASHM held on June 15, 2020, the 2021 ASHM held on June 10, 2021, the 2023 ASHM held on June 14, 2023, the 2025 ASHM held on July 11, 2025 and at the 2026 ASHM held on June 16, 2026. As of June 30, 2026, a total of 1,264,665 awards have been approved by the Company’s shareholders for issuance under the 2018 Plan, as amended. There are also 339 awards remaining under prior plans. Following is a schedule of the stock awards approved to the 2018 Plan, as amended:

 Schedule of 2018 ASHM Plan Amendments

The Company has issued stock awards to employees and directors in the form of stock options, restricted stock and common stock. Stock options are generally granted with strike prices equal to the fair market value of a share of Imunon common stock on the date of grant. Incentive stock options may be granted to purchase shares of common stock at a price not less than 100% of the fair market value of the underlying shares on the date of grant, provided that the exercise price of any incentive stock option granted to an eligible employee owning more than 10% of the outstanding stock of Imunon must be at least 110% of such fair market value on the date of grant. Only officers and key employees may receive incentive stock options.

Stock option and restricted stock awards vest upon terms determined by the Compensation Committee of the Board of Directors and are subject to accelerated vesting in the event of a change of control or certain terminations of employment. The Company issues new shares to satisfy its obligations from the exercise of options or the grant of restricted stock awards.

Total compensation cost related to stock options and restricted stock awards was approximately $0.6 million and $0.3 million of expense for the six months ended June 30, 2026 and 2025, respectively. Of these amounts, approximately $0.2 million and $0.4 million for the six months ended June 30, 2026 were charged to research and development expenses and administrative expenses, respectively, compared to $0.1 million and $0.2 million for the same periods of 2025 charged to research and development expenses and administrative expenses, respectively.

During the six-month period ended June 30, 2026, the Company issued 203,785 shares of common stock to employees in payment for $350,498 of their remaining bonuses accrued for 2025. A summary of stock option awards and restricted stock grants for the six-months ended June 30, 2026 is presented below:

 Schedule of Stock Options Awards and Restricted Stock Grants

As of June 30, 2026, there were approximately 803,000 shares remaining for issuance under the 2018 Plan, as amended. As of June 30, 2026, there was a total of $0.3 million unrecognized compensation cost related to non-vested stock-based compensation arrangements. That cost is expected to be recognized over a period of 1.3 years. The weighted average grant date fair values of the stock options granted were $3.74 during the six-month period ended June 30, 2026.

The fair values of stock options granted were estimated at the date of grant using the Black-Scholes option pricing model. The Black-Scholes model was originally developed for use in estimating the fair value of traded options, which have different characteristics from the Company’s stock options. The model is also sensitive to changes in assumptions, which can materially affect the fair value estimate. The Company used the following assumptions for determining the fair value of options granted under the Black-Scholes option pricing model:

 Schedule of Assumptions Used to Determine Fair Value of Options Granted

Expected volatilities utilized in the model are based on historical volatility of the Company’s stock price. The risk-free interest rate is derived from values assigned to U.S. Treasury bonds with terms that approximate the expected option lives in effect at the time of grant.