NOTE 9 — STOCKHOLDERS’ EQUITY

As of January 31, 2022, authorized capital stock consisted of 200,000,000 shares of common stock, par value $0.001 per share, and 50,000,000 shares of “blank check” preferred stock, par value $0.001 per share, of which 1,300,000 shares are designated as Series A Convertible Preferred Stock, 400,000 shares are designated as Series B Convertible Preferred Stock, 45,002 shares are designated as Series C Convertible Preferred Stock, 7,402 shares are designated as Series D Convertible Preferred Stock, 2,500 shares are designated as Series E Convertible Preferred Stock, 1,250 shares are designated as Series F Preferred Stock, 127 shares are designated as Series G Preferred Stock, 106,894 shares are designated as Series H Preferred Stock, and 921,666 shares are designated as Series I Preferred Stock. The Company’s Board has the authority, without further action by the stockholders, to issue shares of preferred stock in one or more series and to fix the rights, preferences, privileges and restrictions granted to or imposed upon the preferred stock.

Common Stock Issued, Restricted Stock Awards, and RSU’s Granted for Services

On June 1, 2021, the Company granted 2,097 Restricted Stock Units (“RSU’s”) to a consultant for consulting services rendered. The 2,097 RSU’s had a fair value of $25,000 or $11.92 per share of common stock based on the quoted trading price on the date of grant. The RSU’s fully vested and expensed immediately.

On June 9, 2021, the Company issued 25,000 shares of common stock to a consultant in connection with an investor relations agreement for services to be rendered from April 2021 to April 2022. The 25,000 shares of common stock had a fair value of $258,500, or $10.34 per share, based on the quoted trading price on the date of grant, to be amortized over the term of the consulting agreement.

U.S. GOLD CORP. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2022

On July 19, 2021, the Company granted 15,322 RSU’s to an employee pursuant to his employment agreement. The 15,322 RSU’s had a fair value of $150,000 or $9.79 per share of common stock based on the quoted trading price on the date of grant. The RSU’s vested 25% on the date of issuance, and the remaining shall vest one-third over a three-year period from the date of issuance.

On October 20, 2021, the Company issued 1,116 shares of common stock to a former employee in connection with vested RSU’s on the date of termination of service.

On October 22, 2021, the Company issued an aggregate of 2,162 shares of common stock to a consultant in connection with a consulting agreement for services rendered from May 2021 to October 2021. The 2,162 shares of common stock had a fair value of $22,500, or $10.41 per share, based on the quoted trading price on the date of grants, which was fully vested and expensed immediately.

On October 22, 2021, the Company issued an aggregate of 2,824 shares of common stock to a consultant in connection with an advisory consulting agreement for services rendered from April 2021 to September 2021. The 2,824 shares of common stock had a fair value of $30,000, or $10.62 per share, based on the quoted trading price on the date of grants, which was fully vested. In connection with this issuance, the Company reduced accrued liabilities by $5,000 and recognized stock-based consulting of $25,000 during the nine months ended January 31, 2022.

On January 24, 2022, the Company issued an aggregate of 47,108 RSU’s to certain employees of the Company for services rendered. The 47,108 RSU’s had a fair value of $326,475, or $6.93 per share, based on the quoted trading price on the date of grants, which was fully vested and expensed immediately.

On January 24, 2022, the Company issued an aggregate of 13,852 RSU’s to the directors of the Company for services rendered. The 13,852 RSU’s had a fair value of $96,000, or $6.93 per share, based on the quoted trading price on the date of grants, which was fully vested and expensed immediately.

On January 24, 2022, the Company issued an aggregate of 25,685 RSU’s to certain consultants of the Company for services rendered. The 25,685 RSU’s had a fair value of $178,000, or $6.93 per share, based on the quoted trading price on the date of grants, which was fully vested and expensed immediately.

Total stock compensation expense for awards issued for services of $785,007 and $1,145,595 was expensed for the three months ended January 31, 2022 and 2021, respectively. Total stock compensation expense for awards issued for services of $1,201,981 and $1,243,061 was expensed for the nine months ended January 31, 2022 and 2021, respectively. A balance of $1,584,229 remains to be expensed over future vesting periods related to unvested restricted stock units issued for services to be expensed over a weighted average period of 1.91 years.

Equity Incentive Plan

In August 2017, the Board approved the Company’s 2017 Plan including the reservation of 165,000 shares of common stock thereunder.

On August 6, 2019, the Board approved and adopted, subject to stockholder approval, the 2020 Plan. The 2020 Plan reserves 330,710 shares for future issuance to officers, directors, employees and contractors as directed from time to time by the Compensation Committee of the Board. The 2020 Plan was approved by a vote of stockholders at the 2019 annual meeting. With the approval and effectivity of the 2020 Plan, no further grants will be made under the 2017 Plan. On August 31, 2020, the Board approved and adopted, subject to stockholder approval, an amendment (the “2020 Plan Amendment”) to the 2020 Plan. The 2020 Plan Amendment increased the number of shares of common stock available for issuance pursuant to awards under the 2020 Plan by an additional 836,385, to a total of 1,167,095 shares of the Company’s common stock. The 2020 Plan Amendment was approved by the Company’s stockholders on November 9, 2020.

U.S. GOLD CORP. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2022

Stock options

The following is a summary of the Company’s stock option activity during the nine months ended January 31, 2022:

SCHEDULE OF STOCK OPTION ACTIVITY 

At January 31, 2022 and April 30, 2021, the aggregate intrinsic value of options outstanding and exercisable were de minimis for each period.

On January 24, 2022, the Company granted an aggregate of 26,200 options to purchase the Company’s common stock to certain employees of the Company. The options have a term of 5 years from the date of grant and are exercisable at an exercise price of $6.93. The options vest 25% on the date of grant and 25% each next three years from the date of grant.

On January 24, 2022, the Company granted an aggregate of 21,240 options to purchase the Company’s common stock to the directors of the Company. The options have a term of 5 years from the date of grant and are exercisable at an exercise price of $6.93. The options fully vested and was expensed immediately.

On January 24, 2022, the Company granted an aggregate of 10,620 options to purchase the Company’s common stock to certain consultants of the Company. The options have a term of 5 years from the date of grant and are exercisable at an exercise price of $6.93. The options fully vested and was expensed immediately.

The Company used the Black-Scholes model to determine the fair value of stock options granted during the nine months ended January 31, 2022. In applying the Black-Scholes option pricing model to options granted, the Company used the following assumptions:

 SCHEDULE OF STOCK OPTION

Stock-based compensation for stock options recorded in the unaudited consolidated statements of operations totaled $176,073 and $2,925 for the three months ended January 31, 2022 and 2021, respectively. Stock-based compensation for stock options recorded in the unaudited consolidated statements of operations totaled $176,073 and $191,837 for the nine months ended January 31, 2022 and 2021, respectively. A balance of $86,350 remains to be expensed over future vesting periods related to unvested stock options issued for services to be expensed over a weighted average period of 2.98 years.

U.S. GOLD CORP. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2022

Stock Warrants

A summary of the Company’s outstanding warrants to purchase shares of common stock as of January 31, 2022 and changes during the period ended as presented below:

 SCHEDULE OF STOCK WARRANT ACTIVITY

As of January 31, 2022, the aggregate intrinsic value of warrants outstanding and exercisable was $475,650.