REVIVA PHARMACEUTICALS HOLDINGS, INC. Stock Compensation Disclosure

5.   STOCKHOLDERS' EQUITY, STOCK OPTION PLANS, AND STOCK-BASED COMPENSATION

 

Our authorized capital stock consists of:

 

•

315,000,000 shares of common stock, par value $0.0001 per share; and

 

•

10,000,000 shares of preferred stock, par value $0.0001 per share.

 

As of December 31, 2024 there were 46,579,199 shares of our common stock outstanding, and no shares of preferred stock outstanding. As of December 31, 2023, there were 27,918,560 shares of our common stock outstanding, and no shares of preferred stock outstanding. 

 

Common Stock

 

Voting. The holders of our common stock are entitled to one vote for each share held of record on all matters on which the holders are entitled to vote (or consent pursuant to written consent). Directors are elected by a plurality of the votes present in person or represented by proxy and entitled to vote.

 

Dividends. The holders of common stock are entitled to receive, ratably, dividends only if, when and as declared by our board of directors out of funds legally available therefor and after provision is made for each class of capital stock having preference over the common stock.

 

Liquidation Rights. In the event of the Company’s liquidation, dissolution or winding-up, the holders of common stock will be entitled to share, ratably, in all assets remaining available for distribution after payment of all liabilities and after provision is made for each class of capital stock having preference over the Common Stock.

 

Conversion Right. The holders of common stock have no conversion rights.

 

Preemptive and Similar Rights. The holders of common stock have no preemptive or similar rights.

 

Redemption/Put Rights. There are no redemption or sinking fund provisions applicable to the Common Stock. All of the outstanding shares of common stock will be fully-paid and nonassessable.

 

Preferred Stock

 

Our board of directors has the authority to issue shares of preferred stock from time to time on terms it may determine, to divide shares of preferred stock into one or more series and to fix the designations, preferences, privileges, and restrictions of preferred stock, including dividend rights, conversion rights, voting rights, terms of redemption, liquidation preference, sinking fund terms, and the number of shares constituting any series or the designation of any series to the fullest extent permitted.

 

On May 29, 2024, the Company closed the sale of 1,898,734 shares of common stock and the May 2024 Warrants, pursuant to the securities purchase agreement entered into between the Company and several purchasers on May 28, 2024. Refer to Note 4, Warrants, for additional details.

 

On August 22, 2024, we completed an underwritten offering for the issuance and sale of 3,276,262 shares of our common stock, the August 2024 Warrants and the August 2024 Pre-funded Warrants. Refer to Note 4, Warrants, for additional details. 

 

On December 18, 2024 the Company close the sale of the December Underwriting Agreement for the offering, issuance and sale of 12,000,000 shares of common stock and December 2024 Common Stock Warrants. Refer to Note 4, Warrants, for additional details.

 

As of December 31, 2024, the Company has shares of common stock reserved for future issuance as follows:

 

Shares underlying outstanding warrants			47,751,368
Shares reserved for future issuance under the 2020 Equity Incentive Plan			3,060,506
Stock options outstanding			2,559,440
Total common stock reserved for future issuance			53,371,314

 

2006 and 2020 Equity Incentive Plans

 

Following the December 31, 2023 balance sheet date, in accordance with the “evergreen” provision in our 2020 Equity Incentive Plan (the "Evergreen Provision"), an additional 2,791,856 shares were automatically made available for issuance on the first day of 2024, which represents 10% of the number of shares of common stock outstanding on December 31, 2023. As a result, as of December 31, 2024, the Share Reserve available for future awards under the 2020 Equity Incentive Plan stood at 3,060,506 shares, after accounting for the above described 2024 Evergreen Increase, options forfeited and options granted during 2024. Following the December 31, 2024 balance sheet date, in accordance with the Evergreen Provision, an additional 4,657,919 shares were automatically made available for issuance under the plan on the first day of 2025, representing 10% of the number of shares of common stock outstanding on December 31, 2024.

 

As of December 31, 2024, there were no outstanding awards under the 2006 Equity Incentive Plan and no new grants of awards are permitted under the 2006 Equity Incentive Plan.

 

Stock-Based Compensation Expense

 

The Company records stock-based compensation expense based on the fair value of stock options granted to employees, non-employee consultants and non-employee directors. During the years ended December 31, 2024 and 2023, the Company recorded stock-based compensation expense of approximately $1.6 million and $3.4 million, respectively. As of December 31, 2024, the Company had unrecognized stock-based compensation expense of $2.3 million, which is expected to be recognized over a weighted-average period of 1.9 years.

 

Determining Fair Value

 

Refer to Note 2, Summary of Significant Accounting Policies and Basis of Presentation, for details related to the determination of fair value for option awards.

 

The fair value of options granted during the years ended December 31, 2024 and 2023 used the following assumptions and key inputs:

 

Black-Scholes-Merton Inputs
		December 31, 2024						December 31, 2023
Risk-free interest rate range			3.4%	-	4.2%				3.4%	-	4.6%
Expected term range (in years)			5.0	-	5.6				5.4	-	6.1
Expected volatility range			111%	-	118%				86.5%	-	89.5%
Expected dividend yield					—%						—%

 

The weighted average fair value of stock options granted for the years ended December 31, 2024 and 2023, was $1.01 and $4.59, respectively. The options have a contractual term of 10 years.

 

Activity under the stock plans for the years ended December 31, 2024 and 2023 is as follows:

 

		Shares Available for Grant				Number of Options Outstanding				Weighted Average Exercise price per share				Weighted Average Remaining Contractual Term in Years				Aggregate Intrinsic Value
Balance, December 31, 2022			2,600,063				244,774			$	6.32				8.62			$	—
Granted			(1,595,800	)			1,595,800				6.30				—				—
Expired			—				(260,000	)			5.04				—				—
Balance, December 31, 2023			1,004,263				1,580,574				6.51				9.11				300,969
Granted*			(1,095,613	)			1,095,613				1.21				—				—
Expired/Cancelled			360,000				(116,747	)			10.27				—				—
Evergreen plan increase			2,791,856				—				—				—				—
Balance, December 31, 2024			3,060,506				2,559,440			$	4.07				8.88			$	683,016
Options vested and exercisable at December 31, 2024							1,643,102			$	4.48				8.70			$	362,892

 

* For the year ended December 31, 2024, the Company settled certain accrued bonus amounts through the issuance of a total of 332,813 stock options to certain employees, in lieu of cash bonuses The fair value of those stock options was approximately $330,816 and this amount was recorded directly to additional paid-in capital on the consolidated balance sheet as the stock options were issued to settle an accrued bonus amount for which the associated expense was previously recognized in the consolidated statement of operations This amount is not included within the expenses disclosed below.

 

For the years ended December 31, 2024 and 2023, the amount of stock-based compensation expense included within research and development and general and administrative expenses was as follows:

 

		Year Ended December 31,
		2024				2023
Research and development		$	950,247			$	1,449,982
General and administrative			680,094				1,963,372
Total stock-based compensation expense		$	1,630,341			$	3,413,354