Stock Options and Warrants |
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| Stock Options and Warrants |
Note 6 – Stock Options and Warrants The Company has one active stock-based equity plan at November 30, 2016, the CytoDyn Inc. 2012 Equity Incentive Plan (the “2012 Plan”) and one stock-based equity plan that is no longer active, but under which certain prior awards remain outstanding, the CytoDyn Inc. 2004 Stock Incentive Plan (the “2004 Plan” and, together with the 2012 Plan, the “Incentive Plans”). The 2012 Plan was approved by stockholders at the Company’s 2012 annual meeting to replace the 2004 Plan. The 2012 Plan was amended by stockholder approval in February 2015 to increase the number of shares available for issuance from 3,000,000 to 5,000,000 shares of common stock and in March 2016 to increase the number of shares available for issuance from 5,000,000 to 7,000,000 shares of common stock. As of November 30, 2016, the Company had 550,930 shares available for future stock-based grants under the 2012 Plan. Stock Options During the six-months ended November 30, 2016, the Company granted annual stock option awards to directors to purchase a total of 300,000 shares of common stock with an exercise price of $1.09 per share. These option awards vest quarterly over one year and have a ten-year term. The grant date fair value related to these options was $0.78 per share. An additional stock option covering 100,000 shares of common stock was granted to a director. The option has an exercise price of $0.68 and vests 25% immediately with the remainder ratably over one year. The grant date fair value related to the option award was $0.53 per share. During the six-months ended November 30, 2016, the Company granted options covering an aggregate of 1,050,000 shares of common stock to executive management and certain employees with exercise prices of $1.09 and $1.10 per share. The options vest annually over three years, have a ten-year term and grant date fair values of $0.75 and $0.76 per share, respectively. Warrants During the six-months ended November 30, 2016, in connection with private equity offerings, as fully described in Note 10, the Company issued common stock warrants covering 182,375 shares of common stock to investors. The warrants have a five-year term and an exercise price of $1.35 per share. During the six months ended November 30, 2016, holders of warrants covering 774,097 shares of common stock exercised the right to purchase such shares at either $0.50 or $0.75 per share and the Company received proceeds of approximately $398,000. Additionally, warrants covering 138,864 shares with an exercise price of $0.75 per share were exercised pursuant to a cashless exercise provision. During the six-months ended November 30, 2016, in connection with a registered direct equity offering completed in September 2016, as fully described in Note 11, the Company issued common stock warrants covering 6,666,667 shares of common stock to investors. The investor warrants have a five-year term and an exercise price of $1.00 per share. In connection with this offering, the Company also issued common stock warrants covering 1,066,667 shares of common stock to the placement agent. The placement agent warrants have a five-year term and an exercise price of $0.825 per share. Compensation expense related to stock options and warrants for the three and six-months ended November 30, 2016 and November 30, 2015 was approximately $335,000 and $688,000 and $239,000 and $591,000, respectively. The grant date fair value of options and warrants vested during the three and six-month periods ended November 30, 2016 and November 30, 2015 was approximately $279,000 and $530,000 and $123,000 and $324,000, respectively. As of November 30, 2016, there was approximately $1,124,000 of unrecognized compensation expense related to share-based payments for unvested options, which is expected to be recognized over a weighted average period of 1.83 years.
The following table represents stock option and warrant activity as of and for the six-months ended November 30, 2016:
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