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Stock-based Payments | 9 Months Ended
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Sep. 30, 2022
Share-Based Payment Arrangement [Abstract] |
Stock-based Payments | Note 6 – 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 September 30, 2022, 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 September 30, 2022, grants of options to purchase 4,188,315 shares of Common Stock have been issued 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 September 30, 2022, 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 September 30, 2022, 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 September 30, 2022, grants of RSUs and stock options to purchase 3,149,207 shares of Common Stock have been issued pursuant to the 2021 Plan, and 4,078,977 shares of Common Stock remain available for issuance. Stock Options The following table summarizes the activities for MyMD stock options for the nine months ended September 30, 2022: Summary of Stock Options Activity
|  |  |  |  |  |  |  |  |  |  | Weighted |  |  |  |
|  |  |  |  |  |  |  |  |  |  | Average |  |  |  |
|  |  |  |  | Weighted |  |  | Weighted |  |  | Remaining |  |  |  |
|  | Number |  |  | Average |  |  | Average |  |  | Contractual |  |  | Aggregate |
|  | of |  |  | Exercise |  |  | Grant Date |  |  | Term |  |  | Intrinsic |
|  | Shares |  |  | Price |  |  | Fair Value |  |  | (years) |  |  | Value |
Balance at December 31, 2021 |  |  | 4,176,737 |  |  | $ | 2.59 |  |  | $ | 2.59 |  |  |  | 1.29 |  |  | $ | 14,493,284 |
Granted |  |  | 300,000 |  |  |  | 3.41 |  |  |  | 3.41 |  |  |  | 5.80 |  |  | $ | 31,000 |
Exercised |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Forfeited |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Canceled/Expired |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Balance at September 30, 2022 |  |  | 4,476,737 |  |  |  | 2.64 |  |  |  | 2.64 |  |  |  | 0.89 |  |  | $ | 114,535 |
Exercisable as of September 30, 2022 |  |  | 4,376,737 |  |  |  | 2.61 |  |  |  | 2.61 |  |  |  | 0.77 |  |  | $ | 114,535 |
The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the closing stock price of $2.61 for the Company’s common shares on September 30, 2022 and the closing stock price of $6.06 for the Company’s common shares on December 31, 2021. On January 28, 2022, the Company’s Compensation Committee approved the issuance of 200,000 stock options under the 2021 Stock Incentive Plan. These shares had a grant date fair value of $3.59 per share or a cumulative fair market value of $717,660 as calculated using Black-Scholes (exercise price $3.96 per share, stock price $3.96 per share, volatility of 124.43%, discount rate of 1.74% and seven-year term). The grant was segmented into four vesting tranches triggered by performance achievements and expire on January 28, 2029. The Company is amortizing the expenses over the vesting cycles of the individual tranches. On June 21, 2022, the Company granted 100,000 stock options under the 2021 Stock Incentive Plan to a third-party consultant in consideration of services rendered. These shares had a grant date fair value of $2.30 per share or a cumulative fair market value of $199,360 as calculated using Black-Scholes (exercise price $2.30 per share, stock price $2.30 per share, volatility of 130.51%, discount rate of 3.24% and five-year term). The grant vested immediately and expire on June 21, 2027. The Company is amortizing the expense over twelve months, the term of the consulting agreement. During the three months ended September 30, 2022 and 2021, the Company incurred stock option expenses totaling $135,620 and $0, respectively. During the nine months ended September 30, 2022 and 2021, the Company incurred stock option expenses totaling $348,868 and $15,036,051, respectively. The unamortized stock option expenses as of September 30, 2022 and 2021 totaled $568,152 and $0, respectively. Assumption of MyMD Florida Stock Options In 2016, pre-Merger MyMD Florida adopted the MyMD Pharmaceuticals, Inc. Amended and Restated 2016 Equity Incentive Plan (the “2016 Plan”). The 2016 Plan provided for the issuance of up to 50,000,000 shares of pre-Merger MyMD Florida common stock. As of September 30, 2022, options to purchase 4,188,315 shares of common stock have been issued pursuant to the plan and 0 shares of common stock remain available for issuance. Pursuant to the Merger Agreement, effective as of the effective time of the Merger, the Company assumed pre-Merger MyMD Florida’s Second Amendment to Amended and Restated 2016 Stock Incentive Plan (the “2016 Plan”), assuming all of pre-Merger MyMD Florida’s rights and obligations with respect to the options issued thereunder. As of the effective date of the Merger, no additional awards could be issued under the 2016 Plan. In addition, under the terms of the Merger Agreement, the Company assumed all of pre-Merger MyMD Florida’s rights and obligations under pre-Merger MyMD Florida’s stock options that were outstanding immediately prior to the effective time of the Merger, and each such stock option, whether or not vested, was converted into a stock option representing the right to purchase shares of Company Common Stock, on terms substantially the same as those in effect immediately prior to the effective time, except that the number of shares of Company Common Stock issuable and the exercise price per share of such stock options was adjusted by the Exchange Ratio. Additionally, the number of shares and exercise price per share of Company Common Stock under the assumed pre-Merger MyMD Florida stock options was further adjusted by the Reverse Stock Split. The Company assumed 4,188,315 MyMD Florida stock options subject to certain terms contained in the Merger Agreement (including, but not limited to, the amendment of such stock option to change the term of such stock option for a period expiring on April 16, 2023, the second-year anniversary of the Merger). The Company recorded expenses of $15,036,051 for the assumption of the options and the modification of the terms which is included on the Condensed Consolidated Statement of Comprehensive Loss for the nine months September 30, 2021. The Company utilized Black-Scholes using an exercise price of $2.59, an issue date fair value of $4.94, a volatility index of 122.31% and a discount rate of 0.16% to determine the fair value of the modification. The pre-Merger MyMD options were valued at $0 on April 16, 2021, as there was no reliable method of determining the fair value given the material events that had occurred since the last arms-length trade of common shares. Restricted Stock Units On September 11, 2020, the Compensation Committee of the Board of Directors approved grants totaling 394,680 Restricted Stock Units to the Company’s four directors. Each RSU had a grant date fair value of $4.48 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. On April 16, 2021, concurrently with the closing of the Merger, pursuant to the terms of the RSU Agreements between the Company and four board of directors, the 394,680 RSUs granted on September 11, 2020 under the 2018 Plan, as amended, accelerated and vested in full. Per the terms of the RSU agreements, the Company, at the Company’s sole discretion, may settle the RSUs in cash, or part cash and part common stock. As there is no intention to settle the RSUs in cash, the Company accounted for these RSUs as equity. Pre-merger Akers Biosciences, Inc. recorded expenses totaling $979,758 for the acceleration of the vesting of 394,680 RSUs, the holders immediately surrendered 139,457 RSUs with a fair market value of $688,913 for the withholding of federal and state income taxes, as directed by the holders, which was recorded as Payroll Taxes Payable on the date of the Merger. The withholding obligations were paid by the Company on June 30, 2021. As of November 10, 2022, the vested RSUs have not been converted to common shares of the Company. 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:
| ● | One-third (33%) of each RSU will vest when the Company’s market capitalization is equal to or greater than $500,000,000 for at least ten trading days during any twenty (20) consecutive trading day period ending on or after December 15, 2021 and the fair market value of the common stock equals or exceeds $5.00 during such trading day period.
| ● | One-third (33%) of each RSU will vest when the Company’s market capitalization is equal to or greater than $750,000,000 for at least ten trading days during any twenty (20) consecutive trading day period ending on or after December 15, 2021 and the fair market value of the common stock equals or exceeds $5.00 during such trading day period.
| ● | The remaining awarded units will vest when the Company’s market capitalization is equal to or greater than $1,000,000,000 for at least ten trading days during any twenty (20) consecutive trading day period ending on or after December 15, 2021 and the fair market value of the common stock equals or exceeds $5.00 during such trading day period.
| ● | In the event that (i) a change in control occurs or (ii) the participant incurs a termination of service by the Company without cause or due to the participant’s death or total and permanent disability, then all unvested units shall become vested units immediately upon the occurrence of such event.
As of September 30, 2022, none of the vesting milestones have been met. On January 28, 2022, the Compensation Committee of the Board of Directors approved a grant of 4,040 RSUs to a sub-contractor with a grant date fair value of $15,998 and vested immediately. Such RSUs were granted under the 2021 Plan. The Company recorded expenses of $0 and $15,998 which is included Stock Based Compensation on the Condensed Consolidated Statement of Comprehensive Loss during the three and nine months ended September 30, 2022. On July 7, 2022, the Compensation Committee of the Board of Directors approved a grant of 50,167 RSUs to a sub-contractor with a grant date fair value of $150,000 and vested immediately. Such RSUs were granted under the 2021 Plan. The Company recorded expenses of $138,587 which is included Stock Based Compensation on the Condensed Consolidated Statement of Comprehensive Loss during the three and nine months ended September 30, 2022. The following is the status of outstanding restricted stock units outstanding as of September 30, 2022 and changes for the nine months ended September 30, 2022: Summary of Restricted Stock Units Activity
|  |  |  |  | Weighted |
|  |  |  |  | Average |
|  | Number of |  |  | Grant Date |
|  | RSUs |  |  | Fair Value |
Balance at December 31, 2021 |  |  | 2,795,000 |  |  | $ | 8.09 |
Granted |  |  | 54,207 |  |  |  | 3.06 |
Exercised |  |  | - |  |  |  | - |
Forfeited |  |  | - |  |  |  | - |
Canceled/Expired |  |  | - |  |  |  | - |
Balance at September 30, 2022 |  | $ | 2,849,207 |  |  | $ | 7.99 |
Exercisable as of September 30, 2022 |  | $ | 54,207 |  |  | $ | 3.06 |
As of September 30, 2022 and December 31, 2021, the unamortized value of the RSUs was $22,622,962 and $22,611,550, respectively.

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