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Stockholders' Equity

6 Months Ended

Jun. 30, 2020

Stockholders' Equity

Stockholders' Equity

7. Stockholders’ Equity

At-The-Market Sales Facility

On September 28, 2017, the Company entered into an at-the-market sales agreement (the September 2017 Sales Agreement) with Cowen and Company, LLC to sell up to $100.0 million of the Company’s common stock registered under a shelf registration statement filed with the U.S. Securities and Exchange Commission in September 2017. During the quarter ended June 30, 2020, the Company issued and sold 3,126,709 shares of common stock under the at-the-market sales agreement. The shares were sold at a weighted average price per share of $3.16, for aggregate net proceeds of $9.6 million, after deducting commissions and offering expenses. There were no shares sold under the September 2017 Sales Agreement during the six months ended June 30, 2019. As of June 30, 2020, $70.1 million remained available to be sold under the terms of the September 2017 Sales Agreement. The shelf registration statement under which the shares to be sold under the September 2017 Sales Agreement are registered expires on October 6, 2020.

Subsequent to June 30, 2020, the Company has issued and sold an additional 1,010,033 shares of common stock under the September 2017 Sales Agreement at a weighted average price per share of $4.65, for aggregate net proceeds of $4.6 million, after deducting commissions and offering expenses.

2003 Stock Incentive Plan

The 2003 Stock Incentive Plan (the 2003 Plan) provided for the grant of incentives and nonqualified stock options and restricted stock awards. The exercise price for incentive stock options must be at least equal to the fair value of the common stock on the grant date. Unless otherwise stated in a stock option agreement, 25% of the shares subject to an option grant will vest upon the first anniversary of the vesting start date and thereafter at the rate of one forty-eighth of the option shares per month as of the first day of each month after the first anniversary. Upon termination of employment by reasons other than death, cause, or disability, any vested options shall terminate 60 days after the termination date. Stock options terminate 10 years from the date of grant. The 2003 Plan expired on May 21, 2013.

A summary of the Company’s stock option activity under the 2003 Plan for the six months ended June 30, 2020 is as follows:


							WEIGHTED-		AGGREGATE
				WEIGHTED-			AVERAGE		INTRINSIC
				AVERAGE			REMAINING		VALUE
		OUTSTANDING		EXERCISE			CONTRACTUAL		(IN
		OPTIONS		PRICE			TERM (YEARS)		THOUSANDS)
Outstanding as of December 31, 2019		382,337		$	1.33		1.3
Options exercised		(121,056)			1.12
Options forfeited		—			—
Outstanding, Vested and Exercisable as of June 30, 2020		261,281			1.43		1.0		$	608

As of June 30, 2020, outstanding options under the 2003 Plan were fully expensed and all shares underlying outstanding options were fully vested. Total intrinsic value of the options exercised during the six months ended June 30, 2020 and 2019 was $468,458 and $129,250, respectively, and total cash received for options exercised was $135,583 and $12,320 during the six months ended June 30, 2020 and 2019, respectively.

2013 Equity Incentive Plan

The Company’s board of directors adopted, and its stockholders approved, its 2013 Equity Incentive Plan (the 2013 Plan) effective on January 9, 2014. The 2013 Plan provides for the grant of incentive stock options within the meaning of Section 422 of the Internal Revenue Code to the Company’s employees and its parent and subsidiary corporations’ employees, and for the grant of nonstatutory stock options, restricted stock awards, restricted stock unit awards, stock appreciation rights, performance stock awards and other forms of stock compensation to its employees, including officers, consultants and directors. The 2013 Plan also provides for the grant of performance cash awards to the Company’s employees, consultants and directors. Unless otherwise stated in a stock option agreement, 25% of the shares

subject to an option grant will typically vest upon the first anniversary of the vesting start date, with the balance of the shares vesting in a series of thirty-six successive equal monthly installments as of the first day of each month measured from the first anniversary of the vesting start date. Upon termination of employment by reasons other than death, cause, or disability, any vested options will terminate 90 days after the termination date, unless otherwise set forth in a stock option agreement. Stock options generally terminate 10 years from the date of grant.

Authorized Shares

The maximum number of shares of common stock that initially could be issued under the 2013 Plan was 1,000,000 shares, plus any shares subject to stock options or similar awards granted under the 2003 Plan that expire or terminate without having been exercised in full or are forfeited or repurchased by the Company. The number of shares of common stock reserved for issuance under the 2013 Plan automatically increases on January 1 of each year until January 1, 2023, by 3% of the total number of shares of common stock outstanding on December 31 of the preceding calendar year, or a lesser number of shares as may be determined by the Company’s board of directors. The maximum number of shares that may be issued pursuant to exercise of incentive stock options under the 2013 Plan is 20,000,000 shares. As of January 1, 2020, the number of shares of common stock that may be issued under the 2013 Plan was automatically increased by 1,304,007 shares, representing 3% of the total number of shares of common stock outstanding on December 31, 2019, increasing the number of shares of common stock available for issuance under the 2013 Plan to 6,466,823 shares.

Shares issued under the 2013 Plan may be authorized but unissued or reacquired shares of common stock. Shares subject to stock awards granted under the 2013 Plan that expire or terminate without being exercised in full, or that are paid out in cash rather than in shares, will not reduce the number of shares available for issuance under the 2013 Plan. Additionally, shares issued pursuant to stock awards under the 2013 Plan that the Company repurchases or that are forfeited, as well as shares reacquired by the Company as consideration for the exercise or purchase price of a stock award or to satisfy tax withholding obligations related to a stock award, will become available for future grant under the 2013 Plan.

A summary of the Company’s stock option activity under the 2013 Plan for the six months ended June 30, 2020 is as follows:


							WEIGHTED-		AGGREGATE
				WEIGHTED-			AVERAGE		INTRINSIC
				AVERAGE			REMAINING		VALUE
		OUTSTANDING		EXERCISE			CONTRACTUAL		(IN
		OPTIONS		PRICE			TERM (YEARS)		THOUSANDS)
Outstanding as of December 31, 2019		4,399,606		$	10.43		6.8
Options granted		1,473,100			4.49
Options exercised		—			—
Options forfeited		(57,054)			9.33
Outstanding as of June 30, 2020		5,815,652			8.93		7.1		$	101
Vested or expected to vest as of June 30, 2020		5,815,652			8.93		7.1		$	101
Exercisable as of June 30, 2020		3,318,444			9.69		5.7		$	—

As of June 30, 2020, there was $12,644,390 of total unrecognized compensation expense related to unvested options under the 2013 Plan that will be recognized over a weighted-average period of approximately 2.5 years. There were no options exercised under the 2013 Plan during the six months ended June 30, 2020. Total intrinsic value of the options exercised during the six months ended June 30, 2019 was $97,429 and total cash received for options exercised was $94,001 during the six months ended June 30, 2019. The total fair value of shares underlying options which vested in the six months ended June 30, 2020 and 2019 was $5,014,602 and $4,395,888, respectively.

A restricted stock unit (RSU) is a stock award that entitles the holder to receive shares of the Company’s common stock as the award vests. The fair value of each RSU is based on the closing price of the Company’s common stock on the date of grant. As of June 30, 2020, there was $858,158 of total unrecognized compensation expense associated with outstanding RSU grants that will be recognized over a weighted-average period of approximately 1.2 years.

The following is a summary of RSU activity under the 2013 Plan for the six months ended June 30, 2020:



				Weighted-Average
		Number of Shares		Grant Date
		Underlying RSUs		Fair Value
Unvested at December 31, 2019		324,550		$	4.53
Granted		—			—
Forfeited		(12,382)			4.53
Vested		—			—
Unvested at June 30, 2020		312,168			4.53

Inducement Plan

In January 2020, the Company’s board of directors adopted the GlycoMimetics, Inc. Inducement Plan (the Inducement Plan). The Inducement Plan provides for the grant of nonstatutory stock options, restricted stock awards, restricted stock unit awards, stock appreciation rights and other forms of stock awards to individuals not previously an employee or director of the Company as an inducement for such individuals to join the Company. Unless otherwise stated in an applicable stock option agreement, one-fourth of the shares subject to an option grant under the Inducement Plan will typically vest upon the first anniversary of the vesting start date, with the balance of the shares vesting in a series of thirty-six successive equal monthly installments as of the first day of each month measured from the first anniversary of the vesting start date, subject to the new employee’s continued service with the Company through the applicable vesting dates. Upon termination of employment by reasons other than death, cause or disability, any vested options will terminate 90 days after the termination date, unless otherwise set forth in a stock option agreement. Stock options generally terminate 10 years from the date of grant. There were 500,000 shares of common stock reserved under the Inducement Plan at its adoption date.

A summary of the Company’s stock option activity under the Inducement Plan for the six months ended June 30, 2020 is as follows:


							WEIGHTED-		AGGREGATE
				WEIGHTED-			AVERAGE		INTRINSIC
				AVERAGE			REMAINING		VALUE
		OUTSTANDING		EXERCISE			CONTRACTUAL		(IN
		OPTIONS		PRICE			TERM (YEARS)		THOUSANDS)
Outstanding as of December 31, 2019		—		$	—		—
Options granted		40,600			2.06
Options exercised		—			—
Options forfeited		—			—
Outstanding as of June 30, 2020		40,600			2.06		9.8		$	69
Vested or expected to vest as of June 30, 2020		40,600			2.06		9.8		$	69
Exercisable as of June 30, 2020		—			—		—		$	—

As of June 30, 2020, there was $56,002 of total unrecognized compensation expense related to unvested options under the Inducement Plan that will be recognized over a weighted-average period of approximately 3.8 years. There were no options vested or exercised under the Inducement Plan during the six months ended June 30, 2020.

The weighted-average fair value of the options granted during the six months ended June 30, 2020 and 2019 was $3.19 per share and $7.20 per share, respectively, applying the Black-Scholes-Merton option pricing model utilizing the following weighted-average assumptions:


		Six Months Ended June 30,
		2020		2019
Expected term		6.25 years		6.25 years
Expected volatility		84.39%		71.14%
Risk-free interest rate		1.45%		2.55%
Expected dividend yield		0%		0%

Stock-based compensation expense was classified on the statements of operations as follows for the three and six months ended June 30, 2020 and 2019:


		Three Months Ended June 30,						Six Months Ended June 30,
		2020			2019			2020			2019
Research and development expense		$	747,006		$	578,843		$	1,483,037		$	1,086,665
General and administrative expense			1,014,667			940,552			2,100,785			1,815,174
Total stock-based compensation expense		$	1,761,673		$	1,519,395		$	3,583,822		$	2,901,839