Stockholders' Equity

6 Months Ended

Jun. 30, 2022

Stockholders' Equity Note [Abstract]

STOCKHOLDERS' EQUITY

NOTE 5 - STOCKHOLDERS’ EQUITY

Common Stock

During the six months ended June 30, 2022, the Company issued 124,392 shares of common stock, for cash exercises of warrants for proceeds of $895,356.

During the six months ended June 30, 2022, the Company issued 65,812 shares of common stock for cash exercises of options for proceeds of $417,544.

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 was not obligated to sell any shares under the agreement. During the six months ended June 30, 2022, the Company issued 2,094,243 shares of common stock for net cash proceeds of $42,728,599 under the agreement.

Options and Warrants

In December 2014, the Board of Directors adopted and Company’s shareholders approved Relmada’s 2014 Stock Option and Equity Incentive Plan, as amended (the “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 Relmada’s 2021 Equity Incentive Plan which allows for the granting of 1,500,000 options or stock awards. In May 2022, the Company’s Board of Directors adopted and Shareholders approved an amendment to the 2021 Equity Incentive Plan to increase the shares of the Company’s common stock available for issuance thereunder by 3,900,000 shares.

Stock options are exercisable generally for a period of 10 years from the date of grant and generally vest over four years. As of June 30, 2022, there were 125,632 shares available for future grants under the combined Equity Incentive Plans.

As of June 30, 2022, no stock appreciation rights have been issued.

The Company utilizes the Black-Scholes option pricing model to estimate the fair value of stock options and warrants. The risk-free interest rate assumptions were based upon the observed interest rates appropriate for the expected term of the equity instruments. The expected dividend yield was assumed to be zero as the Company has not paid any dividends since its inception and does not anticipate paying dividends in the foreseeable future. The expected volatility was based on historical volatility. The Company routinely reviews its calculation of volatility changes in future volatility, the Company’s life cycle, its peer group, and other factors.

The Company uses the simplified method for share-based compensation to estimate the expected term for equity awards for share-based compensation in its option-pricing model.

On January 1, 2022, 50,000 options were issued to a consultant with an exercise price of $22.53 and a 10-year term, vesting over a 1-year period. The options granted include performance vesting based on the Company’s achievement of performance metrics. The options have an aggregate fair value of $847,583, calculated using the Black-Scholes option-pricing model. Variables used in the Black-Scholes option-pricing model include: (1) discount rate of 1.53% (2) expected life of 5.5 years, (3) expected volatility of 96%, and (4) zero expected dividends.

From January 1, 2022  through March 14, 2022, 110,000 options were issued to various consultants with an exercise price ranging from $18.00 to $21.46 and a 10-year term, vesting over a 4-year period. The options granted include time-based vesting grants. The options have an aggregate fair value of approximately $1.6 million, calculated using the Black-Scholes option-pricing model. Variables used in the Black-Scholes option-pricing model include: (1) discount rate of 1.53 – 2.00% (2) expected life of 6.25 years, (3) expected volatility of 98%, and (4) zero expected dividends.

On March 28, 2022, the Company awarded a total of 15,000 options to an employee with an exercise price of $25.76 and a 10-year term vesting over a 4-year period. The options granted include time-based vesting grants. The options have an aggregate fair value of $307,845 calculated using the Black Scholes option-pricing model. Variables used in the Black-Scholes option-pricing model include: (1) discount rate of 2.55% (2) expected life of 6.25 years, (3) expected volatility of 98%, and (4) zero expected dividends.

From April 25, 2022  through May 5, 2022, 260,000 options were issued to various consultants with an exercise price ranging from $22.40 to $25.52 and a 10-year term, vesting over a 4-year period. The options granted include time-based vesting grants. The options have an aggregate fair value of approximately $4.6 million, calculated using the Black-Scholes option-pricing model. Variables used in the Black-Scholes option-pricing model include: (1) discount rate of 2.85 – 3.04% (2) expected life of 6.25 years, (3) expected volatility of 95%, and (4) zero expected dividends.

At June 30, 2022, the Company has unrecognized stock-based compensation expense of approximately $122.7 million related to unvested stock options over the weighted average remaining service period of 2.51 years.

Options

A summary of the changes in options during the six months ended June 30, 2022 is as follows:

	Number of Options			Weighted Average Exercise Price For Share		Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value
Outstanding and expected to vest at December 31, 2021		10,330,622		$	22.52		9.00	$	46,088,534
Granted		435,000		$	21.65		9.75	$	-
Exercised		(65,812	)	$	6.34		-	$	-
Forfeited		(272,500	)	$	29.30		-	$	-
Outstanding and expected to vest at June 30, 2022		10,427,310		$	22.41		8.60	$	19,951,999
Options exercisable at June 30, 2022		3,252,058		$	21.43		7.30	$	18,294,480

Warrants

A summary of the changes in outstanding warrants during the six months ended June 30, 2022 is as follows:

	Number of Shares			Weighted Average Exercise Price Per Share
Outstanding and vested at December 31, 2021		3,208,777		$	16.45
Granted		-		$	-
Exercised		(124,392	)	$	7.20
Outstanding at June 30, 2022		3,084,385		$	16.82
Vested at June 30, 2022		2,763,948		$	14.93

At June 30, 2022, the Company had approximately $7.7 million of unrecognized compensation expense related to outstanding warrants.

At June 30, 2022, the aggregate intrinsic value of warrants vested and outstanding was approximately $22.9 million.

Stock -based compensation by class of expense

The following summarizes the components of stock-based compensation expense which includes stock options and warrants in the unaudited consolidated statements of operations for the six months ended June 30, 2022 and 2021 (rounded to nearest $00):

	Six Months Ended June 30, 2022		Six Months Ended June 30, 2021
Research and development	$	2,494,800	$	2,506,700
General and administrative		21,730,900		11,613,000
Total	$	24,225,700	$	14,119,700