Note 6. Equity Awards and Warrants

The Company has one active stock-based equity plan at August 31, 2021, the CytoDyn Inc. Amended and Restated 2012 Equity Incentive Plan (the “2012 Plan”) and one stock-based equity plan that is no longer active, but under which certain prior awards remain outstanding.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 2012 Plan coverered a total of 50 million shares of common stock. Effective June 1, 2021, the amount covered and available shares under the 2012 Plan increased approximately by 6.3 million shares resulting from a provision in the 2012 Plan under which the total number of shares available to be issued automatically increases on the first day of each fiscal year in an amount equal to 1% of the total outstanding shares on the last day of the prior fiscal year, unless the Board determines otherwise before the fiscal yearend. As of August 31, 2021, there were approximately 26.1 million shares remaining available for future stock-based grants under the 2012 Plan.

Stock Options and Other Equity Awards

During the three months ended August 31, 2021, the Company granted stock options, covering a total of approximately 3.0 million shares of common stock, to employees with an exercise price of $1.32 per share. These stock options vest in three equal installments beginning on the first anniversary of the grant date and have a ten-year term and a grant date fair value of $1.00 per share.

During the three months ended August 31, 2021, the Company issued approximately 0.3 million shares of common stock in connection with the exercise of stock options. The stated exercise price was $0.63 per share, which resulted in aggregate gross proceeds of approximately $0.2 million to the Company.

During the three months ended August 31, 2021, the Company issued approximately 0.4 million shares of common stock in connection with the vesting of performance stock units (“PSUs”) awarded in June 2020. The PSUs were subject to the Compensation Committee’s determination of the level of achievement of certain performance conditions set forth in the respective award agreements. The original awards covered a total of 4.35 million PSUs, of which approximately 3.9 million PSUs were forfeited. In connection with the approximate 0.4 million shares of common stock that vested, the Company recognized approximately $1.3 million in stock-based compensation expense in the fourth quarter of fiscal year 2021.

During the three months ended August 31, 2021, the Company issued approximately 0.4 million shares of common stock in connection with the time-based vesting of restricted stock units (“RSUs”). The Company incurred $0.3 million in stock-based compensation expense during the three months ended August 31, 2021 related to RSUs. Also, during the three months ended August 31, 2021, certain members of management received shares of fully vested common stock in lieu of a portion of their cash bonus for services in fiscal year 2021 totaling approximately 0.2 million shares of common stock. The Company recognized $0.3 million of expense for these shares in lieu of cash bonus during the fourth quarter of fiscal year 2021.

Warrants

In connection with private warrant exchange agreements entered into during the three months ended August 31, 2021, the Company issued a total of approximately 0.7 million shares of common stock in connection with the exercise of warrants for the purchase of 0.7 million shares issued in 2018 and 2019. The stated exercise price of the original warrants ranged from $0.45 to $1.35 per share. Gross proceeds of the private warrant exchange transactions totaled approximately $0.5 million. See Note 10 below for additional information.

Compensation expense related to stock options and warrants, for the three months ended August 31, 2021 and August 31, 2020, totaled approximately $2.6 million and $2.0 million, respectively. Additionally, during the three months ended August 31, 2021, the Company settled a dispute in part by the issuance of warrants covering 1.6 million shares of common stock that expire in seven years and have a stated exercise price of $0.40 per share.

The following table represents stock option and warrant activity as of and for the three months ended August 31, 2021:

As of August 31, 2021, approximately 10.7 million outstanding stock options were vested, approximately 6.8 million outstanding stock options were unvested, and all outstanding warrants were exercisable.