Note 7 - Share-based Compensation

Equity incentive Plans

2013 Stock Incentive Plan

On January 23, 2014, the Company adopted the 2013 Stock Incentive Plan (“2013 Plan”). The 2013 Plan was amended by the Board on January 9, 2015 and September 30, 2016, and such amendments were ratified by shareholders on December 7, 2018. The 2013 Plan provides for the issuance of up to 4,323 shares of the Company’s common stock. As of December 31, 2020, grants of restricted stock and options to purchase 2,813 shares of Common Stock have been issued pursuant to the 2013 Plan, and 1,510 shares of Common Stock remain available for issuance.

2017 Stock Incentive Plan

On August 7, 2017, the shareholders approved, and the Company adopted the 2017 Stock Incentive Plan (“2017 Plan”). The 2017 Plan provides for the issuance of up to 7,031 shares of the Company’s common stock. As of December 31, 2020, grants of restricted stock and options to purchase 3,064 shares of Common Stock have been issued pursuant to the 2017 Plan, and 3,967 shares of Common Stock remain available for issuance.

2018 Stock Incentive Plan

On December 7, 2018, the shareholders approved, and the Company adopted the 2018 Stock Incentive Plan (“2018 Plan”). On August 27, 2020, the 2019 Plan was modified to increase the total authorized shares. The 2018 Plan, as amended, provides for the issuance of up to 1,120,125 shares of the Company’s common stock. As of December 31, 2020, grants of RSUs to purchase 804,963 shares of Common Stock have been issued pursuant to the 2018 Plan, and 315,162 shares of Common Stock remain available for issuance.

Stock Options

The following table summarizes the option activities for the years ended December 31, 2020:

The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the closing stock price of $1.99 for the Company’s common shares on December 31, 2020. As the closing stock price on December 31, 2020 is lower than the exercise price, there is no intrinsic value to disclose.

The Company had no outstanding stock options as of December 31, 2020.

During the years ended December 31, 2020 and 2019, the Company incurred stock option expenses totaling $0 and $0, respectively.

Restricted Stock Units

On March 29, 2019, the Compensation Committee of the Board of Directors approved the grant of 5,201 Restricted Stock Units (“RSU”) to each of the three directors. Each RSU had a grant date fair value of $23.28 which shall be amortized on a straight-line basis over the vesting period into administrative expenses within the Consolidated Statement of Comprehensive Loss. Such RSUs were granted under the 2018 Plan, and vested on January 1, 2020. Upon vesting, such RSUs shall be settled with the issuance of common stock. The Company stock underlying these RSUs are subject to a lock-up/leak-out agreement for a period of 180 days from the effective date of the merger with MyMD (Note 3).

On September 11, 2020, the Compensation Committee of the Board of Directors approved grants totaling 789,360 Restricted Stock Units to the Company’s four directors. Each RSU had a grant date fair value of $2.24 which shall be amortized on a straight-line basis over the vesting period into administrative expenses within the Consolidated Statement of Comprehensive Loss. Such RSUs were granted under the 2018 Plan, as amended. Fifty percent (50%) of each RSU will vest on the first anniversary date of the Grant and the remaining fifty percent (50%) will vest on the second anniversary date; provided that the RSUs shall vest immediately upon the occurrence of (i) a change in control, provided that the director is employed by or providing services to the Company and its affiliates on the closing date of such change of control, or (ii) the director’s termination of employment of service by the Company was without cause.

As of December 31, 2020, the unamortized value of the RSUs was $1,364,879. A summary of activity related to the RSUs for the year ended December 31, 2020 is as follows:

During the years ended December 31, 2020 and 2019, the Company incurred RSU expense of $404,589 and $362,005, respectively.

Common Stock Warrants

The table below summarizes the warrant activity for the year ended December 31, 2020:

The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the closing stock price of $1.99 for the Company’s common shares on December 31, 2020. All warrants were vested on date of grant.

Pre-funded Common Stock Warrants

The table below summarizes the pre-funded warrant activity for the year ended December 31, 2020:

All pre-funded warrants were vested on date of grant and are exercisable at any time. The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying award and the closing stock price of $1.99 for the Company’s common shares on December 31, 2020.

During the year ended December 31, 2020, pre-funded warrants to purchase 795,000 shares of common stock were exercised at an exercise price of $0.0001 per share, yielding net proceeds of $80.

Preferred Series ‘C’ Stock Warrants

The table below summarizes the warrant activity for the year ended December 31, 2020:

The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the closing stock price of $1.99 for the Company’s common shares on December 31, 2020.

All preferred series ‘C’ warrants were vested on date of grant. During the year ended December 31, 2020, 1,935,000 warrants to purchase 1,935,000 shares of the Company’s common stock were exercised yielding net proceeds of $7,740,000.