Stockholders' Equity

12 Months Ended

Dec. 31, 2023

Stockholders' Equity [Abstract]

STOCKHOLDERS' EQUITY

NOTE 5 - STOCKHOLDERS’ EQUITY

Common Stock

During the year ended December 31, 2023, the Company did not issue any shares of common stock for the exercise of warrants. During the year ended December 31, 2022, the Company issued 181,336 shares of common stock for the exercise of warrants for proceeds of $1,264,523.

During the year ended December 31, 2023, the Company did not issue any shares of common stock for the exercise of options. During the year ended December 31, 2022, the Company issued 83,698 shares of common stock for the exercise of options for proceeds of $703,720.

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 offered to 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 years ended December 31, 2023 and 2022, the Company issued 0 and 2,094,243 shares of common stock for net cash proceeds of $0 and $42,728,599 under the agreement, respectively. As of December 31, 2023, no shares were available to be issued under this agreement.

On April 6, 2022, the Company entered into a new Open Market Sale Agreement with Jefferies, as sales agent, pursuant to which we may offer and sell, from time to time, through Jefferies, shares of our common stock, having an aggregate offering price of up to $100,000,000. We are not obligated to sell any shares under the agreement. As of December 31, 2023, no shares have been issued under this agreement.

During the years ended December 31, 2023 and 2022, 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.

In May 2022, the Company’s Board of Directors adopted, and shareholders approved an amendment to the 2021 Plan to increase the shares of the Company’s common stock available for issuance thereunder by 3,900,000 shares. 

In May 2023, the Company’s Board of Directors adopted and shareholders approved an amendment to the 2021 Plan to increase the shares of the Company’s common stock available for issuance thereunder by 2,500,000 shares.

These combined plans allowed for the granting of up to 13,052,942 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, 2023, there were no shares available to be granted under either the 2014 or 2021 Plan. The shareholders will vote at their annual meeting in 2024 on a management proposal to increase the shares available to be issued under the 2021 Plan. There can be no assurance such amendment will be approved. As of December 31, 2023, options for 4,363,250 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 forfeited.

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.

From November 13, 2023 through December 15, 2023, the Company awarded a total of 5,010,000 options to consultants and employees with an exercise price ranging from $2.48 to $2.82 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 $10,703,070 calculated using the Black Scholes option-pricing model. Variables used in the Black-Scholes option-pricing model include: (1) discount rate of 3.93 – 4.68% (2) expected life of 6.25 years, (3) expected volatility of 113-114%, and (4) zero expected dividends.

From August 1, 2023 through September 18, 2023, 10,000 options were issued to various employees with an exercise price ranging from $2.56 to $2.96 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 $23,840 calculated using the Black-Scholes option-pricing model. Variables used in the Black-Scholes option-pricing model include: (1) discount rate of 4.20– 4.44% (2) expected life of 6.25 years, (3) expected volatility of 113-114%, and (4) zero expected dividends.

From April 10, 2023 through June 20, 2023, 60,000 options were issued to various employees with an exercise price ranging from $2.28 to $3.32 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 $148,420 calculated using the Black-Scholes option-pricing model. Variables used in the Black-Scholes option-pricing model include: (1) discount rate of 3.43 – 3.91% (2) expected life of 6.25 years, (3) expected volatility of 114%, and (4) zero expected dividends.

From January 6, 2023 through February 21, 2023, 620,000 options were issued to various consultants and employees with an exercise price ranging from $3.18 to $4.30 and a 10-year term, vesting over a 4-year period. The options have an aggregate fair value of approximately $1,933,613 calculated using the Black-Scholes option-pricing model. Variables used in the Black-Scholes option-pricing model include: (1) discount rate of 3.46 – 4.12% (2) expected life of 6.25 years, (3) expected volatility of 115-116%, and (4) zero expected dividends.

From December 16, 2022 through December 21, 2022, the Company awarded a total of 2,800,000 options to consultants and employees with an exercise price ranging from $3.20 to $3.37 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 $8,169,325 calculated using the Black Scholes option-pricing model. Variables used in the Black-Scholes option-pricing model include: (1) discount rate of 3.60 – 3.78% (2) expected life of 6.25 years, (3) expected volatility of 115%, and (4) zero expected dividends.

On December 16, 2022, the Company awarded a total of 199,432 options to employees with an exercise price of $3.37 and a 10-year term vesting immediately. The options have an aggregate fair value of $561,902 calculated using the Black Scholes option-pricing model. Variables used in the Black-Scholes option-pricing model include: (1) discount rate of 3.61% (2) expected life of 5 years, (3) expected volatility of 120%, and (4) zero expected dividends.

From July 1, 2022 through September 29, 2022, 260,000 options were issued to various consultants with an exercise price ranging from $18.30 to $36.19 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 $5.0 million calculated using the Black-Scholes option-pricing model. Variables used in the Black-Scholes option-pricing model include: (1) discount rate of 2.9 – 3.94% (2) expected life of 6.25 years, (3) expected volatility of 93-94%, 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.

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 January 5, 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 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.

Options

A summary of the changes in options outstanding for the years ended December 31, 2023 and 2022 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, 2021		10,330,622		$	22.52		9.0	$	46,088,534
Granted		3,744,432			7.40		9.8		-
Exercised		(83,698	)		-		-		-
Forfeited		(1,868,750	)		-		-		-
Outstanding and expected to vest at December 31, 2022		12,122,606		$	18.19		8.5	$	417,998
Granted		5,700,000		$	2.61		9.9		-
Forfeited		(406,414	)		-		-		-
Outstanding and expected to vest at December 31, 2023		17,416,192		$	12.99		8.3	$	11,183,370
Options exercisable at December 31, 2023		7,161,748		$	20.25		7.0	$	1,015,520

On September 5, 2023, Dr. Eric Schmidt, a member of the Board of Directors (the “Board”), notified the Company that he would resign from the Board, effective immediately. On September 22, 2023, the Board voted and approved that all of Dr. Schmidt’s unvested options would vest immediately and be exercisable through the original term of the respective grants. In addition, the Board approved the extension of the exercise period for the options which were vested on September 5, 2023 from 90 days to the original term of the respective options. As a result of the modifications, the Company recorded approximately $1.2 million of stock-based compensation during the year ended December 31, 2023.

At December 31, 2023, the Company has unrecognized stock-based compensation expense of approximately $62,386,500 related to unvested stock options over the weighted average remaining service period of 2.5 years. The weighted average fair value of options granted during the years ended December 31, 2023 and 2022 was approximately $2.61 and $7.40 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,
	2023			2022
Risk free interest rate		3.43 to 4.68	%		1.53 to 3.94	%
Dividend yield		0	%		0	%
Volatility		113-116	%		93-120	%
Expected term (in years)		6.25			5 to 6.25

Warrants

A summary of the changes in outstanding warrants during the years ended December 31, 2023 and 2022 is as follows:

	Number of Shares			Weighted Average Exercise Price Per Share
Outstanding at December 31, 2021		3,208,777		$	16.45
Issued		1,452,016			0.001
Exercised		(1,633,352	)		0.77
Outstanding at December 31, 2022		3,027,441		$	17.02
Forfeited		(646,075	)	$	1.50
Outstanding at December 31, 2023		2,381,366		$	20.02
Warrants exercisable at December 31, 2023		2,235,366		$	19.20

There were no warrants issued during the year ended December 31, 2023.

On September 20, 2022, the Company entered into an agreement with an investor to exchange 1,452,016 shares of outstanding common stock for 1,452,016 prefunded warrants. The 1,452,016 shares of common stock were returned. These warrants have an exercise price of $0.001 and a 9.99% beneficial ownership limitation. On October 19, 2022 a cashless exercise of the 1,452,016 prefunded warrants was transacted with 1,451,795 shares of common shares issued and the remaining 221 warrants being cancelled.

At December 31, 2023, the Company had approximately $3,200,000 of unrecognized stock-based compensation expense related to outstanding warrants. At December 31, 2023, the aggregate intrinsic value of warrants vested and outstanding was approximately $19,000.

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,
	2023		2022
Research and development	$	7,224,000	$	7,882,700
General and administrative		36,587,100		36,312,100
Total	$	43,811,100	$	44,194,800