Stock Options and Warrants |
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| Stock Options and Warrants |
Note 7 – Stock Options and Warrants The Company has one active stock-based equity plan at May 31, 2020, the CytoDyn Inc. 2012 Equity Incentive Plan (the “2012 Plan”) and one stock-based equity plan that is no longer active, but under which certain prior awards remain outstanding, the CytoDyn Inc. 2004 Stock Incentive Plan (the “2004 Plan” and, together with the 2012 Plan, the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,in March 2016 to increase the number of shares available for issuance from 5,000,000 to 7,000,000 shares of common stock, in August 2017 to increase the number of shares available for issuance from 7,000,000 to 15,000,000 shares of common stock and in May 2019 to increase the number of shares available for issuance from 15,000,000 to 25,000,000 shares of common stock. As of May 31, 2020, the Company had 1,162,511 shares available for future stock-based grants under the 2012 Plan, as amended. Stock Options During the year ended May 31, 2019, the Company granted annual stock option awards to directors to purchase a total of 1,219,726 shares of common stock with an exercise prices ranging between $0.49 and $0.57 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 ranged from $0.29 per share to $0.31 per share.During the year ended May 31, 2019, the Company granted, to executive management and employees, stock options covering an aggregate of 3,715,000 shares of common stock, with exercise prices ranging between $0.48 and $0.57 per share. The option awards vest annually over three years, except for one award covering 950,000 shares, which vests ratably by month over 24 months. All awards have a
ten-year term and grant date fair values ranging from $0.26 per share to $0.41 per share.During the year ended May 31, 2020, the Company granted annual stock option awards to directors to purchase a total of 3,236,815 shares of common stock with an exercise prices ranging between $0.39 and $2.25 per share. The period over which option awards vest vary, 2,512,329 of the options vest immediately at the grant date and 724,486 options vest quarterly over one year. All awards have a
ten-year term and grant date fair values ranging from $0.19 per share to $1.65 per share.During the year ended May 31, 2020, the Company granted, to executive management, employees and consultants, stock options covering an aggregate of 8,690,000 shares of common stock with exercise prices ranging between $0.30 and $1.10 per share. The option awards vesting periods vary, 437,500 options vest quarterly over a one year period, 890,000 options vest annually over a three year period, 1,112,500 vest monthly over a one year period, 1,650,000 vest upon the Company reaching certain performance milestones with regard to its submission of its BLA for HIV combination therapy to the FDA, and 4,600,000 vest immediately at the grant date. All option awards have a
ten-year term and grant date fair values ranging from $0.12 per share to $0.79 per share.During the year ended May 31, 2020, the Company issued 8,723,070 shares of common stock in connection with the exercise of stock options covering an aggregate of 8,753,828 shares. The stated exercise price ranged from $0.39 to $1.09 per share which resulted in aggregate gross proceeds of approximately $5.6 million. Warrants On June 15, 2018, in connection with a registered direct equity offering, as fully described in Note 13, the Company issued warrants covering 1,970,000 shares of common stock to investors. The investor warrants have a five-year term and an exercise price of $0.75 per share. In connection with the registered direct offering, the Company also issued warrants covering 133,600 shares of common stock to the placement agent. The placement agent warrants have a five-year term and an exercise price of $0.55 per share. During the year ended May 31, 2019, in connection with a private equity offering, as fully described in Note 12, the Company issued warrants covering a total of 23,487,585 shares of common stock to investors. The investor warrants have a five-year term and an exercise price of $0.75 per share. In connection with this offering, the Company also issued warrants covering 4,446,917 shares of common stock to the placement agent. The placement agent warrants have a five-year term, an exercise price of $0.50 per share and a cashless exercise provision. During the year ended May 31, 2019 the Company issued compensable warrants covering an aggregate of 300,000 shares of common stock to consultants. The warrants have a five-year term, an exercise price of $0.56 per share and a grant date fair value of $0.30 per share. In addition, the Company issued a warrant covering 500,000 shares of common stock to a director. The warrant has a
ten-year term, an exercise price of $0.51 per share and a grant date fair value of $0.28 per share.During the year ended May 31, 2019 in connection with the offering of 2019 Short-term Convertible Notes, as fully described in Note 5, the Company issued warrants covering a total of 5,460,000 shares of common stock to investors. The investor warrants have a five-year term and an exercise price of $0.30 per share. In connection with this offering, the Company also issued warrants covering 972,000 shares of common stock to the placement agent. The placement agent warrants have a five-year term, an exercise price of $0.50 per share and a cashless exercise provision. On January 31, February 7 and February 13, 2019, in connection with a registered direct equity offering, the Company issued warrants covering a total of 5,364,240 shares of common stock to investors. The investor warrants have a five-year term and an exercise price of $0.50 per share. In connection with this offering, the Company also issued warrants covering 965,563 shares of common stock to the placement agent. The placement agent warrants have a five-year term, an exercise price of $0.50 per share and a cashless exercise provision. During the year ended May 31, 2019, in connection with a Secured Convertible Promissory Note, the Company issued warrants covering a total of 5,000,000 shares of common stock to an investor. The investor warrants have a five-year term and an exercise price of $0.30 per share. During the year ended May 31, 2019, in connection with the sale of Series C Convertible Preferred Stock, the Company issued warrants covering a total of 3,895,000 shares of common stock to investors. The investor warrants have a five-year term and an exercise price of $0.50 per share. In connection with this offering, the Company issued warrants to two lead investors covering an aggregate of 1,000,000 shares of common stock. The lead investor warrants have a five-year term, and an exercise price of $0.50 per share. On April 5, 2019 and April 15, 2019, in connection with a registered direct equity offering, as fully described in Note 13, the Company issued warrants covering 5,465,500 shares of common stock to investors. The investor warrants have a five-year term and an exercise price of $0.50 per share. In connection with the registered direct offering, the Company also issued warrants covering 938,790 shares of common stock to the placement agent. The placement agent warrants have a five-year term and an exercise price of $0.50 per share. On March 13, 2020, in connection with the sale of Series D convertible preferred stock the Company issued warrants covering a total of 275,625 shares of common stock to investor. The investor warrants have an exercise price of $1.00 per share and a five-year term. During the year ended May 31, 2020, the Company issued 42,029,203 shares of common stock in connection with the exercise of 45,305,642 warrants. The stated exercise price ranged from $0.30 to $1.35 per share, which resulted in aggregate gross proceeds of approximately $20.5 million. Compensation expense related to stock options and warrants for the fiscal years ended May 31, 2020, May 31, 2019 and May 31, 2018 was approximately $6.5 million, $3.4 million and $1.3 million, respectively. The grant date fair value of options and warrants vested during the fiscal years ended May 31, 2020, May 31, 2019, and May 31, 2018 was approximately $3.3 million, $2.1 million, and $1.4 million, respectively. As of May 31, 2020, there was approximately $0.8 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 approximately 8.04 years. The following table represents stock option and warrant activity for the years ended May 31, 2019 and May 31, 2020:
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