The Company recognized approximately $0.6 million of
non-cash
gain, due to the changes in the fair value of the liability
associated with such classified redemption provision for the six
months ended November 30, 2019. There was no gain or loss for
the six months ended November 30, 2020
, as
the notes were previously retired.
Note
7
. Stock Options and Warrants
The
Company has one active stock-based equity plan at November 30,
2020, 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Plan (the “2012 Plan”) and one stock-based equity plan that is no
longer active, but under which certain prior awards remain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 CytoDyn Inc. 2004 Stock Incentive Plan (the “2004
Plan” and, together with the 2012 Plan, the “Incentive Plans”). In
September 2020, the stockholders approved the CytoDyn Inc. Amended
and Restated 2012 Equity Incentive Plan to increase the number of
shares available for issuance
from 25
million
to
50
million
shares among other amendments. The total number of shares available
to be issued will increase 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,
and the term of the Plan was extended for an additional 10 years to
September 30, 2030. As of November 30, 2020, the Company
had approximately
15.7
million
shares available for future stock-based grants under the 2012
Plan.
Upon the September 30, 2020 stockholder approval of the
Amended and Restated 2012 Plan, the Company issued to executives of
the Company
non-qualified
stock options covering 3.35
million
shares of common stock, time-vesting restricted stock units
(“RSUs”)
covering 1.12
million
shares of common stock, and performance based RSUs (“PSUs”)
covering 4.35
million
shares of common stock. The stock options have a per share exercise
price of
$3.12, grant date fair value of $2.12 per share, and vest equally
over three years. The RSUs vest equally over three years and grant
date fair value of $3.12 per share. The PSUs will vest over the
next fiscal year only if certain performance conditions set forth
in the awards are met. Concurrent with the stockholder approval,
the Company also issued to its
non-employee
directors stock options covering a total of 506,250
shares
of common stock, or
168,750
shares
of common stock for each director, which represented the remaining
portion of the annual director compensation for the fiscal year
beginning June 1, 2020. The options were issued with a per
share exercise price of
$6.15
, grant
date fair value of $4.20 per share, and vest equally over three
quarterly installments beginning November 30, 2020.
During the six months ended November 30, 2020, the Company
granted stock options, covering an aggregate of 1.3
million
shares of common stock, to employees and consultants with exercise
prices ranging between
$2.60 and $6.15 per share. These stock option awards vest annually
over three years, with
a ten-year term
and grant date fair values ranging between $1.84 and $4.23 per
share.
During the six months ended November 30, 2020, the Company
issued 110,000 shares of common stock in connection with the
exercise of stock options covering an aggregate of 110,000
shares.
The stated exercise price ranged from $0.39 to
$0.98
per
share which resulted in aggregate gross proceeds of
$48,300.
During
the six months ended November 30, 2020, the Company issued
compensatory warrants covering an aggregate of
105,000
shares
of common stock to consultants. The warrants have a five-year term and an
exercise price of $3.07. The grant date fair value of these
warrants was $2.11 per share.
During
the six months ended November 30, 2020, the Company issued
approximately 21.6 million shares of common stock, $0.001 par
value, in connection with the exercise of approximately
21.6
million
warrants. The stated exercise price ranged from
$0.30 to $1.35
per
share, which resulted in aggregate gross proceeds of
approximately $15.2
million. Additionally, during the six months ended
November 30, 2020, the Company issued approximately
8.9 million shares of common stock, $0.001 par value, in
connection with the cashless exercise of approximately
9.6 million warrants with stated exercise prices ranging from
$0.50 to $1.35.
Compensation expense related to stock options and warrants for the
three and six months ended November 30, 2020 and
November 30, 2019 was approximately $3.4 million and
$5.5 million and $1.0 million and $1.5 million,
respectively. The grant date fair value of options, warrants, and
common stock vested during the six months ended November 30,
2020 and 2019 was approximately $3.0 million and
$0.9 million, respectively. As of November 30, 2020,
there was approximately $12.2 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 1.17 years.