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Stockholders' Equity

9 Months Ended

Sep. 30, 2021

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 2017 Sales Agreement) with Cowen and Company, LLC (Cowen) to sell up to $100.0 million of the Company’s common stock registered under a shelf registration statement filed with the U.S. SEC in September 2017. During the nine months ended September 30, 2020, the Company issued and sold 4,136,742 shares of common stock under the 2017 Sales Agreement. The shares were sold at a weighted average price per share of $3.52, for aggregate net proceeds of $14.1 million, after deducting commissions and offering expenses. The shelf registration statement under which the shares that could be sold under the 2017 Sales Agreement were registered expired on October 6, 2020.

On October 7, 2020, the Company filed a prospectus supplement to a shelf registration statement that it filed in May 2019 and entered into a new at-the-market sales agreement (the 2020 Sales Agreement) with Cowen. Under the 2020 Sales Agreement, the Company may sell up to $100.0 million of the Company’s common stock registered under the shelf registration statement that was filed in May 2019. The 2020 Sales Agreement replaced the 2017 Sales Agreement between the Company and Cowen, and the $100.0 million that may be sold under the 2020 Sales Agreement excludes any amounts that were sold under the 2017 Sales Agreement. There were no shares sold under the 2020 Sales agreement during the nine months ended September 30, 2020. During the nine months ended September 30, 2021, the Company issued and sold 2,517,603 shares of common stock under the 2020 Sales Agreement at a weighted average price per share of $3.92, for aggregate net proceeds of $9.6 million, after deducting commissions and offering expenses. As of September 30, 2021, approximately $86.3 million remained available to be sold under the terms of the 2020 Sales Agreement. Subsequent to September 30, 2021, there have been no additional sales under the 2020 Sales Agreement.

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 nine months ended September 30, 2021 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, 2020		97,250		$	1.96		1.3
Options exercised		(3,785)			1.12
Options forfeited		—			—
Outstanding, Vested and Exercisable as of September 30, 2021		93,465			2.00		0.5		$	19

As of September 30, 2021, 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 nine months ended September 30, 2021 and 2020 was $8,668 and $468,458, respectively, and total cash received for options exercised was $4,239 and $135,583 during the nine months ended September 30, 2021 and 2020, 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, RSU 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.

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 nine months ended September 30, 2021 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, 2020		5,753,211		$	8.93		6.6
Options granted		898,100			3.70
Options exercised		—			—
Options forfeited		(829,149)			8.32
Outstanding as of September 30, 2021		5,822,162			8.22		6.4		$	—
Vested or expected to vest as of September 30, 2021		5,822,162			8.22		6.4			—
Exercisable as of September 30, 2021		3,954,324			9.40		5.5			—

As of September 30, 2021, there was $6,702,323 of total unrecognized compensation expense related to unvested options under the 2013 Plan that will be recognized over a weighted-average period of approximately 2.1 years. There were no options exercised under the 2013 Plan during the nine months ended September 30, 2021 and 2020. The total fair value of shares underlying options which vested in the nine months ended September 30, 2021 and 2020 was $4,844,743 and $6,169,748, respectively.

An 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. During the nine months ended September 30, 2021, the Company awarded RSUs under the 2013 Plan to all of its employees. The RSUs granted vest over four years in equal installments on each anniversary of the grant date. Compensation expense is recognized on a straight-line basis. As of September 30, 2021, there was $1,204,644 of total unrecognized compensation expense associated with outstanding RSU grants that will be recognized over a weighted-average period of approximately 3.2 years.

The following is a summary of RSU activity under the 2013 Plan for the nine months ended September 30, 2021:


				Weighted-Average
		Number of Shares		Grant Date
		Underlying RSUs		Fair Value
Unvested at December 31, 2020		192,533		$	4.53
Granted		444,613			3.72
Forfeited		(49,754)			3.85
Vested		(189,792)			4.53
Unvested at September 30, 2021		397,600			3.71

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, RSU 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. In August 2021, the Company’s board of directors adopted an amendment to the Inducement Plan to increase the number of shares reserved to 2,000,000 shares.

A summary of the Company’s stock option activity under the Inducement Plan for the nine months ended September 30, 2021 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, 2020		100,600		$	3.09		9.5
Options granted		1,647,600			2.03
Options exercised		(10,092)			2.06
Options forfeited		(24,508)			2.06
Outstanding as of September 30, 2021		1,713,600			2.09		9.8		$	264
Vested or expected to vest as of September 30, 2021		1,164,400			2.12		9.8			177
Exercisable as of September 30, 2021		18,754			3.57		8.8			—

As of September 30, 2021, there was $1,654,155 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. In August 2021, the Company granted stock options to purchase an aggregate of 1,647,600 shares to its new Chief Executive Officer under the Inducement Plan. This consisted of (a) an option to purchase 1,098,400 shares, subject to vesting as to 25% of the underlying shares on August 3, 2022 and as to the remaining underlying shares in equal monthly installments over 36 months thereafter, subject to the officer’s continued service through each such vesting date, and (b) an option to purchase 549,200 shares that is subject to performance vesting conditions and will vest upon achievement of milestones as follows: (i) one-half of the shares will vest upon FDA approval of uproleselan in patients with relapsed/refractory acute myeloid leukemia and (ii) one-half of the shares will vest upon the first commercial sale of uproleselan in the United States or abroad. The maximum fair value of $798,053 associated with the performance-based option is excluded from the unrecognized compensation expense under the Inducement Plan as the completion of the performance milestones are not probable as of September 30, 2021. The Company will reevaluate each reporting period the probability that the performance conditions will be achieved and record the compensation cost at that time.

The total fair value of shares underlying options which vested in the nine months ended September 30, 2021 was $62,667. There were no options that vested during the nine months ended September 30, 2020. Total intrinsic value of the options exercised during the nine months ended September 30, 2021 was $1,944 and total cash received for options exercised was $20,790 during the nine months ended September 30, 2021. There were no options exercised under the Inducement Plan during the nine months ended September 30, 2020.

The weighted-average fair value of the options granted under the 2013 Plan and Inducement Plan during the nine months ended September 30, 2021 and 2020 was $1.87 per share and $3.17 per share, respectively, applying the Black-Scholes-Merton option pricing model utilizing the following weighted-average assumptions:


		Nine Months Ended September 30,
		2021		2020
Expected term		6.25 years		6.25 years
Expected volatility		84.17%		84.40%
Risk-free interest rate		0.75%		1.41%
Expected dividend yield		0%		0%

Stock-based compensation expense was classified on the statements of operations as follows for the three and nine months ended September 30, 2021 and 2020:


		Three Months Ended September 30,						Nine Months Ended September 30,
		2021			2020			2021			2020
Research and development expense		$	586,001		$	763,081		$	1,884,295		$	2,246,118
General and administrative expense			1,004,859			927,270			2,882,911			3,028,055
Total stock-based compensation expense		$	1,590,860		$	1,690,351		$	4,767,206		$	5,274,173