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Stockholders' Equity | 12 Months Ended
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Dec. 31, 2021
Stockholders' Equity Note [Abstract] |
STOCKHOLDERS' EQUITY | NOTE 6 - STOCKHOLDERS’ EQUITY Common Stock During the years ended December 31, 2021 and 2020, the Company issued 0 and 42,475 shares of common stock for cashless exercise of 0 and 60,513 warrants, respectively. During the years ended December 31, 2021 and 2020, the Company issued 433,856 and 1,159,989 shares of common stock for the exercise of warrants for proceeds of $2,628,061 and $8,056,416, respectively. During the year ended December 31, 2021 and 2020, the Company issued 0 and 90,204 shares of common stock for cashless exercise of 0 and 98,370 options, respectively. During the year ended December 31, 2021 and 2020, the Company issued 174,619 and 155,558 shares of common stock for the exercise of options for proceeds of $668,431 and 735,514, respectively. On May 15, 2020, the Company entered into an Open Market Sale Agreement with Jefferies LLC, as sales agent (“Jefferies”), pursuant to which the Company may offer and sell, from time to time, through Jefferies, shares of the Company’s common stock, having an aggregate offering price of up to $75,000,000. The Company is not obligated to sell any shares under the agreement. During the years ended December 31, 2021 and 2020, the Company issued 651,674 and 427,700 shares of common stock for net cash proceeds of $23,416,036 and $19,791,644 under the agreement, respectively. On December 8, 2021, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Goldman Sachs & Co. LLC and Jefferies LLC, as representatives of the several underwriters, in connection with an underwritten public offering (the “Offering”) of 8,823,530 shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”) issued and sold by the Company at a price to the public of $17.00 per share (with a price to the Underwriters of $15.98 per share). Pursuant to the Underwriting Agreement, the Underwriters were granted an option for a period of 30 days to purchase from the Company up to an additional 1,323,529 shares of Common Stock, at the same price per share, which was exercised in full on December 9, 2021. The Offering, including the issuance and sale of shares pursuant to the Underwriters’ exercise in full of their option to purchase additional shares, closed on December 13, 2021. Net proceeds from the offering totaled $161,226,945. During the years ended December 31, 2021 and 2020, there were no common stock shares issued for issuances of restricted common stock. Stock-based compensation - options In December 2014, the Board of Directors adopted and the shareholders approved Relmada’s 2014 Stock Option and Equity Incentive Plan, as amended (the “2014 Plan”), which allows for the granting of 5,152,942 common stock awards, stock appreciation rights, and incentive and nonqualified stock options to purchase shares of the Company’s common stock to designated employees, non-employee directors, and consultants and advisors. In May 2021, the Company’s Board of Directors adopted and shareholders approved the Company’s 2021 Equity Incentive Plan (the “2021 Plan”), which allowed for the granting of 1,500,000 options or other stock awards. These combined plans allowed for the granting of up to 6,652,942 options or other stock awards. Stock options are exercisable generally for a period of 10 years from the date of grant and generally vest either over four years or upon achievement of certain specified corporate or other milestones. As of December 31, 2021, there were no shares available to be granted under either the 2014 or 2021 Plan. The shareholders will vote at their annual meeting in 2022 on a management proposal to increase the shares available to be issued under the 2021 Plan by 3,900,000 shares; there can be no assurance such amendment will be approved. As of December 31, 2021, options for 3,821,118 shares of common stock had been issued subject to approval by the shareholders of this amendment. If the amendment is not approved, such options will be void. The Company uses the simplified method for share-based compensation to estimate the expected term for employee option awards for share-based compensation in its option-pricing model. On December 22, 2021, the Company awarded a total of 65,000 options to various consultants with an exercise price of $21.11 and a 10-year term, vesting over a 1 to 4-year period. The options have an aggregate fair value of approximately $1.1 million, calculated using the Black-Scholes option-pricing model. Variables used in the Black-Scholes option-pricing model include: (1) discount rate of 1.23 – 1.31% (2) expected life of 5.5 – 6.25 years, (3) expected volatility of 96 – 98%, and (4) zero expected dividends. These awards are subject to shareholder approval of the above-described amendment to the 2021 Plan. On December 17, 2021, the Company awarded a total of 5,477,004 options to the board or directors, various employees, and consultants with an exercise price of $19.03 and a 10-year term, vesting over a 1 to 4-year period. The options have an aggregate fair value of approximately $81.6 million, calculated using the Black-Scholes option-pricing model. Variables used in the Black-Scholes option-pricing model include: (1) discount rate of 1.18 - 1.26% (2) expected life of 5.2 - 5.00 years, (3) expected volatility of 97 - 99%, and (4) zero expected dividends. 3,821,118 of the awards are subject to shareholder approval of the above-described amendment to the 2021 Plan. On February 18, 2021, the Company awarded a total of 25,000 options to an employee with an exercise price of $35.15 and a 10-year term, vesting over a 4-year period. The options have an aggregate fair value of $701,000 calculated using the Black-Scholes option-pricing model. Variables used in the Black-Scholes option-pricing model include: (1) discount rate of 0.75% (2) expected life of 6.25 years, (3) expected volatility of 101%, and (4) zero expected dividends. On January 6, 2021, the Company awarded a total of 1,490,000 options to employees and directors with an exercise price of $33.43 and a 10-year term vesting over a 4-year period. The options granted include time based vesting grants and performance vesting based on the Company’s achievement of performance metrics. The options have an aggregate fair value of $39.7 million calculated using the Black-Scholes option-pricing model. Variables used in the Black-Scholes option-pricing model include: (1) discount rate of 0.59% (2) expected life of 6.25 years, (3) expected volatility of 101%, and (4) zero expected dividends. As of December 31, 2021, six performance metrics for 520,000 options were met. Vesting of such options is subject to the passage of time. At December 31, 2021, the Company incurred expense of $3,392,419 related to these options. During the year ended December 31, 2020, the Company awarded a total of 1,000,000 options to employees with exercise prices ranging from $28.00- $45.61 and a 10-year term vesting over 4-year period. The options have an aggregate fair value of $32.4 million calculated using the Black-Scholes option-pricing model. Variables used in the Black-Scholes option-pricing model include: (1) discount rate of 0.36%-0.83% (2) expected life of 6.25 years, (3) expected volatility of 101%-108%, and (4) zero expected dividends. During the year ended December 31, 2020, the Company recognized additional compensation expense of approximately $1,500,000 related to acceleration of vesting and a nominal amount related to the modification of certain options in connection with the separation and settlement agreement with Dr. Ottavio Vitolo (see note 10). During the year ended December 31, 2020, the Company recognized compensation expense of approximately $484,000 related to the extended period of time to allow for some options to vest under the separation and settlement agreement with Dr. Thomas Wessel. This was considered a Type III modification and as a result the total expense of $1.8 million previously recognized was reversed as the options would not have vested prior to the modification (see note 10). A summary of the changes in options outstanding for the years ended December 31, 2021 and 2020 is as follows:
|  | Number of Shares |  |  | Weighted Average Exercise Price Per Share |  |  | Weighted Average Remaining Contractual Term (Years) |  |  | Aggregate Intrinsic Value |
Outstanding and expected to vest at December 31, 2019 |  |  | 3,615,602 |  |  | $ | 19.96 |  |  |  | 9.2 |  |  | $ | 74,837,043 |
Granted |  |  | 1,000,000 |  |  |  | 39.50 |  |  |  | 9.3 |  |  |  | - |
Exercised |  |  | (253,927 | ) |  |  | - |  |  |  | - |  |  |  | - |
Forfeited |  |  | (455,938 | ) |  |  | - |  |  |  | - |  |  |  | - |
Outstanding and expected to vest at December 31, 2020 |  |  | 3,905,737 |  |  | $ | 24.32 |  |  |  | 8.4 |  |  | $ | 48,952,339 |
Granted |  |  | 7,057,004 |  |  |  | 21.15 |  |  |  | 9.8 |  |  |  | - |
Exercised |  |  | (174,619 | ) |  |  | - |  |  |  | - |  |  |  | - |
Forfeited |  |  | (457,500 | ) |  |  | - |  |  |  | - |  |  |  | - |
Outstanding and expected to vest at December 31, 2021 |  |  | 10,330,622 |  |  | $ | 22.52 |  |  |  | 9.0 |  |  | $ | 46,088,534 |
Options exercisable at December 31, 2021 |  |  | 2,140,490 |  |  | $ | 20.99 |  |  |  | 7.3 |  |  | $ | 19,511,463 |
At December 31, 2021, the Company has unrecognized stock-based compensation expense of approximately $143,200,000 related to unvested stock options over the weighted average remaining service period of 2.94 years. The weighted average fair value of options granted during the years ended December 31, 2021 and 2020 was approximately $22.15 and $32.45 per share, respectively, on the date of grant using the Black-Scholes option pricing model with the following assumptions:
|  | Years Ended |  |  | Years Ended |
|  | December 31, |  |  | December 31, |
|  | 2021 |  |  | 2020 |
Risk free interest rate |  | 0.59 to 1.31 | % |  | 0.36 to 0.83 | %
Dividend yield |  |  | 0 | % |  |  | 0 | %
Volatility |  |  | 97-101 | % |  |  | 101-108 | %
Expected term (in years) |  |  | 5 to 6.25 |  |  |  | 6.25 |
Warrants A summary of the changes in outstanding warrants during the years ended December 31, 2021 and 2020 is as follows:
|  | Number of Shares |  |  | Weighted Average Exercise Price Per Share |
Outstanding at December 31, 2019 |  |  | 3,646,870 |  |  | $ | 6.83 |
Issued |  |  | 250,000 |  |  | $ | 33.32 |
Exercised |  |  | (1,211,199 | ) |  | $ | 7.27 |
Forfeited/Expired |  |  | (15,040 | ) |  | $ | 16.80 |
Outstanding at December 31, 2020 |  |  | 2,670,633 |  |  | $ | 9.11 |
Issued |  |  | 972,000 |  |  | $ | 31.98 |
Exercised |  |  | (433,856 | ) |  | $ | 6.06 |
Outstanding at December 31, 2021 |  |  | 3,208,777 |  |  | $ | 16.45 |
Warrants exercisable at December 31, 2021 |  |  | 2,767,246 |  |  | $ | 13.92 |
On October 1, 2021, the Company awarded a total of 42,000 warrants to a consultant with an exercise price of $26.74 and a 10-year term, vesting 25% after year one and 6.25% quarterly there after until 100% vested. The warrants have an aggregate fair value of $891,265 calculated using the Black-Scholes option-pricing model. Variables used in the Black-Scholes option-pricing model include: (1) discount rate of 1.10% (2) expected life of 6.25 years, (3) expected volatility of 99%, and (4) zero expected dividends. On July 16, 2021, the Company awarded a total of 500,000 warrants to Arbormentis, LLC with an exercise price of $31.17 and a 7-year term, vesting immediately. The warrants have an aggregate fair value of $10,241,599 calculated using the Black-Scholes option-pricing model. Variables used in the Black-Scholes option-pricing model include: (1) discount rate of 0.48% (2) expected life of 3.50 years, (3) expected volatility of 101%, and (4) zero expected dividends. On July 12, 2021, the Company awarded a total of 10,000 warrants to a consultant with an exercise price of $34.77 and a 5-year term, vesting over a 1-year period. The warrants granted are time-based vesting. The warrants have an aggregate fair value of $212,219 calculated using the Black-Scholes option-pricing model. Variables used in the Black-Scholes option-pricing model include: (1) discount rate of 0.43% (2) expected life of 3.00 years, (3) expected volatility of 99%, and (4) zero expected dividends. On June 25, 2021, the Company awarded a total of 10,000 warrants to a consultant with an exercise price of $34.35 and a 5-year term, vesting over a 1-year period. The warrants granted are time-based vesting. The warrants have an aggregate fair value of $211,653 calculated using the Black-Scholes option-pricing model. Variables used in the Black-Scholes option-pricing model include: (1) discount rate of 0.43% (2) expected life of 3.00 years, (3) expected volatility of 100%, and (4) zero expected dividends. On June 18, 2021, the Company awarded a total of 10,000 warrants to a consultant with an exercise price of $30.90 and a 5-year term, vesting over a 1-year period. The warrants granted are time-based vesting. The warrants have an aggregate fair value of $190,401 calculated using the Black-Scholes option-pricing model. Variables used in the Black-Scholes option-pricing model include: (1) discount rate of 0.47% (2) expected life of 3.00 years, (3) expected volatility of 100%, and (4) zero expected dividends. On January 6, 2021, the Company awarded a total of 400,000 warrants to consultants with an exercise price of $33.43 and a 10-year term, vesting over 4-year period. The warrants granted include time-based vesting grants and performance vesting based on the Company’s achievement of performance metrics. The warrants have an aggregate fair value of $10.6 million calculated using the Black-Scholes option-pricing model. Variables used in the Black-Scholes option-pricing model include: (1) discount rate of 0.59% (2) expected life of 6.25 years, (3) expected volatility of 101%, and (4) zero expected dividends. As of December 31, 2021, six performance metrics for 200,000 warrants were met. Vesting of such options is subject to the passage of time. At December 31, 2021, the Company incurred expense of $1,304,776 related to these warrants. On December 16, 2020, the Company granted 20,000 warrants to a consultant with an exercise price of $34.87, a 5-year term and vesting over 4 years. The warrants have an aggregated fair value of $479 thousand using the Black-Scholes option-pricing model. Variables used in the Black-Scholes option-pricing model include: (1) discount rate of 0.37% (2) expected life of 3.75 years, (3) expected volatility of 105%, and (4) zero expected dividends On December 16, 2020, the Company granted 108,000 warrants to consultants with an exercise price of $34.87, a 5-year term and vesting based on future events. The warrants have an aggregated fair value of $2.86 million that was calculated using the Black-Scholes option-pricing model. Variables used in the Black-Scholes option-pricing model include: (1) discount rate of 0.37% (2) expected life of 5 years, (3) expected volatility of 105%, and (4) zero expected dividends On April 27, 2020, the Company granted 2,000 warrants to a consultant with an exercise price of $37.67, a 5-year term and immediate vesting. The warrants have an aggregated fair value of $48 thousand that was calculated using the Black-Scholes option-pricing model. Variables used in the Black-Scholes option-pricing model include: (1) discount rate of 0.27% (2) expected life of 2.5 years, (3) expected volatility of 116%, and (4) zero expected dividends. On April 1, 2020, the Company granted 120,000 warrants to consultants with an exercise price of $31.59, a 5-year term and immediate vesting. The warrants have an aggregated fair value of $2.5 million that was calculated using the Black-Scholes option-pricing model. Variables used in the Black-Scholes option-pricing model include: (1) discount rate of 0.26% (2) expected life of 2.5 years, (3) expected volatility of 118%, and (4) zero expected dividends. At December 31, 2021, the Company had $12.4 million of unrecognized stock-based compensation expense related to outstanding warrants. At December 31, 2021, the aggregate intrinsic value of warrants vested and outstanding was $31.3 million. Stock-based compensation by class of expense The following summarizes the components of stock-based compensation expense which includes common stock, stock options, warrants and restricted stock in the consolidated statements of operations (rounded to nearest $00):
|  | Year Ended |  |  | Year Ended |
|  | December 31, |  |  | December 31, |
|  | 2021 |  |  | 2020 |
Research and development |  | $ | 15,835,900 |  |  | $ | 4,038,500 |
General and administrative |  |  | 24,658,600 |  |  |  | 16,738,800 |
Total |  | $ | 40,494,500 |  |  | $ | 20,777,300 |

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