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 August 31, 2019, the CytoDyn Inc. 2012 Equity Incentive Plan, as amended (the “2012 Plan”) and one stock-based equity plan that is no longer active, but under which certain prior awards remain outstanding, the CytoDyn Inc. 2004 Stock Incentive Plan (the “2004 Plan” and, together with the 2012 Plan, the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. At the annual meeting of stockholders held on August 24, 2017, the stockholders approved an amendment to the 2012 Plan to increase the number of shares available for issuance from 7,000,000 to 15,000,000 shares of common stock. At a special meeting of stockholders held on May 22, 2019, the stockholders approved an amendment to the 2012 Plan to increase the number of shares available for issuance from 15,000,000 to 25,000,000 shares of common stock. As of August 31, 2019, the Company had 9,949,144 shares available for future stock-based grants under the 2012 Plan, as amended. Stock Options During the three months ended August 31, 2019, the Company granted annual stock option awards to directors to purchase a total of 600,000 shares of common stock. The exercise price of the stock option awards is $0.52 per share. These stock option awards vest quarterly over one year and have
a ten-year term. The grant date fair value related to these stock options was $0.26 per share.During the three months ended August 31, 2019, the Company granted stock options, covering an aggregate of 275,000 shares of common stock, to executive management and employees with exercise prices ranging between $0.43 and $0.52 per share, except for one award of 50,000 shares which has an exercise price of $0.90 and represented a supplemental award related to a previous rescission, and which vested immediately. The remaining stock option awards vest annually over three years, with
a ten-year term and grant date fair values ranging between $0.23 and $0.30 per share.On August 12, 2019, Gregory Gould, a member of the Company’s Board of Directors, resigned. On September 12
th , Carl Dockery, a member of the Company’s Board of Directors did not stand for re-election. 90 days after the cessation of their service, any vested and unexercised options in their names will be returned to the pool of shares available for future stock-based grants under the 2012 Plan.Warrants On August 29, 2019, in connection with a registered direct offering, as fully described in Note 11, the Company issued warrants covering 2,819,750 shares of common stock to investors. The investor warrants have a five-year term and an exercise price of $0.45 per share. In connection with the registered direct offering, the Company also issued warrants covering 498,105 shares of common stock to the placement agent. The placement agent warrants have a five-year term and an exercise price of $0.40 per share. During the three months ended August 31, 2019, in connection with a Series C convertible preferred offering, as fully described in Note 4, the Company issued common stock warrants covering a total of 2,631,000 shares of common stock to investors. The investor warrants have a five-year term and an exercise price of $0.50 per share. Compensation expense related to stock options, compensatory warrants and common stock reserved for advisory services for the three months ended August 31, 2019 and August 31, 2018 was approximately $581,000 and $283,000, respectively. The grant date fair value of options and compensatory warrants vested during the three month periods ended August 31, 2019 and August 31, 2018 was approximately $542,000 and $692,000, respectively. As of August 31, 2019, there was approximately $1.0 million of unrecognized compensation expense related to share-based payments for unvested options, which is expected to be recognized over a weighted average period of 0.84 years. The following table represents stock option and warrant activity as of and for the three months ended August 31, 2019:
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