Note 5 – Stock-based Payments

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 2,162 shares of the Company’s Common Stock. As of June 30, 2023, grants of restricted stock and options to purchase 1,406 shares of Common Stock have been issued pursuant to the 2013 Plan, and 756 shares of Common Stock remain available for issuance.

2016 Stock Incentive Plan

On December 21, 2016, the shareholders approved, and the Company adopted the 2016 Stock Incentive Plan (“2016 Plan”). The 2016 Plan provides for the issuance of up to 50,000,000 shares of the Company’s Common Stock. As of June 30, 2023, no grants of any kind remain outstanding pursuant to the 2016 Plan, and 0 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 3,516 shares of the Company’s Common Stock. As of June 30, 2023, grants of restricted stock and options to purchase 2,538 shares of Common Stock have been issued pursuant to the 2017 Plan, and 978 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 560,063 shares of the Company’s Common Stock. As of June 30, 2023, grants of RSUs and restricted stock to purchase 263,026 shares of Common Stock have been issued pursuant to the 2018 Plan, and 297,037 shares of Common Stock remain available for issuance.

2021 Stock Incentive Plan

On April 15, 2021, the shareholders approved, and the Company adopted the 2021 Stock Incentive Plan (“2021 Plan”). The 2021 Plan provides for the issuance of up to 7,228,184 shares of the Company’s Common Stock. As of June 30, 2023, grants of RSUs and stock options to purchase 5,894,207 shares of Common Stock have been issued pursuant to the 2021 Plan, and 1,333,977 shares of Common Stock remain available for issuance.

Stock Options

The following table summarizes the activities for MyMD stock options for the three months ended June 30, 2023:

 Summary of Stock Options Activity

The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the closing stock price of $1.50 for the Company’s common shares on June 30, 2023 and the closing stock price of $1.15 for the Company’s common shares on December 31, 2022.

On April 4, 2023, the Company issued 750,000 options to a key employee. The cumulative fair market value of $978,675 as calculated using Black-Scholes (exercise price $1.55 per share, stock price $1.55 per share, volatility of 122.12%, discount rate of 3.39% and a five-year term). 1/3 of the options vested on the grant date, 1/3 vest on the first anniversary of the grant and 1/3 vest on the second anniversary of the grant. The fair-market value of the options is amortized over the 24-month vesting cycle.

On June 7, 2023, the Company issued 1,995,000 options to the directors and key employees. The cumulative fair market value of $3,128,759 as calculated using Black-Scholes (exercise price $1.66 per share, stock price $1.66 per share, volatility of 115.94%, discount rate of 3.79% and a ten-year term). 1/3 of the options vested on the grant date, 1/3 vest on the first anniversary of the grant and 1/3 vest on the second anniversary of the grant. The fair-market value of the options is amortized over the 24-month vesting cycle.

During the three months ended June 30, 2023 and 2022, the Company incurred stock option expenses totaling $1,677,271 and $132,246, respectively. During the six months ended June 30, 2023 and 2022, the Company incurred stock option expenses totaling $1,746,339 and $213,248, respectively.

The unamortized stock option expenses as of June 30, 2023 and 2022 totaled $3,175,696 and $703,772, respectively.

Restricted Stock Units

On October 14, 2021, the Compensation Committee of the Board of Directors approved grants totaling 2,795,000 Restricted Stock Units to the Company’s six directors and seven key employees. Each RSU had a grant date fair value of $8.09 which will be amortized upon vesting into administrative expenses within the Condensed Consolidated Statement of Comprehensive Loss. Such RSUs were granted under the 2021 Plan. Vesting of each RSU is:

As of June 30, 2023, none of the vesting milestones have been met.

On June 28, 2023, 73,776 vested restricted stock units were exchanged for 73,776 shares of the Company Common Stock.

The following is the status of outstanding unvested restricted stock units outstanding as of June 30, 2023 and the changes for the six months ended June 30, 2023:

 Summary of Restricted Stock Units Activity

As of June 30, 2023, the unamortized value of the RSUs was $22,611,550.