Annual report pursuant to Section 13 and 15(d)

STOCK OPTIONS AND WARRANTS

v3.22.1
STOCK OPTIONS AND WARRANTS
 12 Months Ended
Dec. 31, 2021
Disclosure Text Block [Abstract]  
STOCK OPTIONS AND WARRANTS
NOTE G – STOCK OPTIONS AND WARRANTS

2010 Stock Plan

 
In 2010, the Company’s Board of Directors adopted the Global Clean Energy Holdings, Inc. 2010 Equity Incentive Plan (the “2010 Plan”) wherein 2,000,000 shares of the Company's common stock were reserved for issuance thereunder. Options and awards granted to new or existing officers, directors, employees, and non-employees vest ratably over a period as individually approved by the Board of Directors generally over four years, but not in all cases. The 2010 Plan provides for a three-month exercise period of vested options upon termination of service. The exercise price of options granted under the 2010 Plan is equal to the fair market value of the Company’s common stock on the date of grant. Options issued under the 2010 Plan have a maximum term of ten years for exercise and may be exercised with cash consideration or through a cashless exercise in which the holder forfeits a portion of the award in exchange for shares of common stock of the remaining portion of the award. The 2010 Plan expired in April 2020 and was replaced with the 2020 Equity Incentive Plan.

2020 Equity
I
ncentive Plan
 
In April 2020, the Company’s Board of Directors adopted the Global Clean Energy Holdings, Inc. 2020 Equity Incentive Plan (the “2020 Plan”) wherein 2,000,000 shares of the Company’s common stock were reserved for issuance thereunder. Options and awards granted to new or existing officers, directors, employees, and non-employees vest ratably over a period as individually approved by the Board of Directors generally over three years, but not in all cases. The 2020 Plan provides for a three-month exercise period of vested options upon termination of service. The exercise price of options granted under the 2020 Plan is equal to the fair market value of the Company’s common stock on the date of grant. Options issued under the 2020 Plan have a maximum term of ten years for exercise and may be exercised with cash consideration or through a cashless exercise in which the holder forfeits a portion of the award in exchange for shares of common stock of the remaining portion of the award. As of December 31, 2021, there were 390,178 shares available for future option grants under the 2020 Plan.
 
During the year ended December 31, 2021
,
the Company granted stock options for the purchase of a total of 543,240 shares of Common Stock under the 2020 Plan, of which 483,240 were to employees and 60,000 to directors.
 
For the years ended December 31, 2021 and 2020, the Company recognized stock compensation expenses related to stock option awards of $692,000 and $326,000, respectively. The Company recognizes all stock-based compensation in general and administrative expenses in the accompanying consolidated statements of operations. As of December 31, 2021, there was approximately $436,000 of unrecognized compensation cost related to option awards that will be recognized over the remaining service period of approximately 3.3 years.
The Company previously granted stock options that were not issued under the 2010 or 2020 Plan. All of such options that were issued outside of the 2010 and 2020 Plans are fully vested, and 16 million options that were awarded to two of GCEH’s executive officers had a market capitalization vesting arrangement, 500,000 options were issued to a consultant that had a transaction success arrangement, and 1,175,714 options were awarded to an executive officer that had a merit arrangement and 200,000 options were issued to two directors that were time based.
A summary of the option award activity in 2021 and awards outstanding at December 31, 2021 (includes 100,000, 17,975,714 and 1,571,806 options under the 2010 Equity Incentive Plan, the non-plan and the 2020 Plan, respectively) is as follows:
 
 
 
Shares Under
Option
 
 
Weighted Average
Exercise Price
 
 
Weighted Average
Remaining
Contractual Life
(Years)
 
 
Aggregate Intrinsic
Value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Outstanding at December 31, 2019
 
 
19,902,732
 
 
$
0.16
 
 
 
3.60
 
 
$
14,360,463
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Granted
 
 
1,554,500
 
 
 
0.75
 
 
 
 
 
 
 
-
 
Exercised
 
 
(1,447,018
)
 
 
0.06
 
 
 
 
 
 
 
-
 
Forfeited
 
 
(600,000
)
 
 
0.75
 
 
 
 
 
 
 
-
 
Expired
 
 
(180,000
)
 
 
0.10
 
 
 
 
 
 
 
-
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Outstanding at December 31, 2020
 
 
19,230,214
 
 
$
0.16
 
 
 
2
.
81
 
 
$
30,044,649
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Vested and exercisable at December 31, 2020
 
 
17,913,083
 
 
$
0.16
 
 
 
2.90
 
 
$
28,160,815
 

 
 
Shares Under
Option
 
 
Weighted Average
Exercise Price
 
 
Weighted Average
Remaining
Contractual Life
(Years)
 
 
Aggregate Intrinsic
Value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Outstanding at December 31, 2020
 
 
19,230,214
 
 
$
0.16
 
 
 
2.81
 
 
$
30,044,649
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Granted
 
 
543,240
 
 
 
5.58
 
 
 
 
 
 
 
-
 
Exercised
 
 
(112,432
 )
 
 
0.04
 
 
 
 
 
 
 
616,314
 
Forfeited
 
 
(109,878
 )
 
 
5.63
 
 
 
 
 
 
 
-
 
Expired
 
 
(3,624
)
 
 
4.76
 
 
 
 
 
 
 
-
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Outstanding at December 31, 2021
 
 
19,547,520
 
 
$
0.36
 
 
 
2.11
 
 
$
87,636,744
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Vested and exercisable at December 31, 2021
 
 
18,743,542
 
 
$
0.25
 
 
 
2.04
 
 
$
85,801,930
 
 
 
The fair value of stock option grants with only continued service conditions for vesting is estimated on the grant date using a Black-Scholes option pricing model. The following table illustrates the assumptions used in estimating the fair value of options granted during the
year ended December 31, 2021:
 
 
 
 
 
Expected Term (in Years)
 
 
3.278
 
Volatility
 
 
85.766
%
Risk Free Rate
 
 
0.511
%
Dividend Yield
 
 
0
%
Aggregate Grant Date Fair Value
 
$
1,758,816
 
 
 
Stock Purchase Warrants and Call Option
 
During the year ended December 31, 2021, the Company issued warrants to investors that invested $3.1 million in a private transaction in April 2021 to purchase 19,840 shares of common stock. The warrants have an exercise price of $6.25 per share, a five-year term and are fully vested. If the warrants are exercised, the Company will receive additional proceeds of $124,000.
 
In 2020, the Company issued, to a party interested in Camelina development, a non-transferable warrant for the purchase of an approximately
eight-percent
interest in its subsidiary, Susoils, for approximately $20 million. The warrant had an expiration date of June 1, 2021, and was not exercised. The value of the warrant upon issuance was determined to be immaterial.