NOTE 10 — STOCKHOLDERS’ EQUITY

As of January 31, 2023, 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.

U.S. GOLD CORP. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2023

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

Total stock compensation expense for awards issued for services of $553,594 and $1,201,981 was expensed for the nine months ended January 31, 2023 and 2022, respectively. Total stock compensation expense for awards issued for services of $184,531 and $785,007 was expensed for the three months ended January 31, 2023 and 2022, respectively. There is 90,160 unvested restricted stock units which is equivalent to a balance of $846,104 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 0.92 years. There were 343,315 restricted stock units awarded but unissued into common stock as of January 31, 2023.

On November 14, 2022, the Company issued an aggregate of 7,510 shares of common stock to a consultant in connection with an advisory consulting agreement for services rendered from May 2022 to October 2022 and issued 885 shares of common stock for services rendered in April 2022 for a total of 8,395 shares. The 8,395 shares of common stock had a fair value of $35,000, or $4.17 per share, based on the quoted trading price on the date of grants, which was fully vested. The Company reduced accrued liabilities by $5,000 in connection with the issuance of the 885 shares and recognized stock-based consulting of $30,000 in connection with the issuance of the 7,510 shares.

On November 14, 2022, the Company issued an aggregate of 5,425 shares of common stock to a consultant in connection with a consulting agreement for services rendered from May 2022 to October 2022. The 5,425 shares of common stock had a fair value of $22,500, or $4.15 per share, based on the quoted trading price on the date of grants, which was fully vested and expensed immediately.

On December 22, 2022, the Company issued 7,927 shares of common stock to a former director in connection with vested RSU’s on the date of resignation (see Note 8).

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 initially reserved 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. On December 16, 2022 the Company’s stockholders approved another amendment to the 2020 plan increasing the number of shares of common stock available for issuance pursuant to awards under the 2020 Plan by an additional 1,252,476 shares, to a total of 2,419,571 shares of the Company’s common stock.

Stock options

The following is a summary of the Company’s stock option activity during the nine months ended January 31, 2023:

 SCHEDULE OF STOCK OPTION ACTIVITY

U.S. GOLD CORP. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2023

At January 31, 2023 and April 30, 2022, the aggregate intrinsic value of options outstanding and exercisable were de minimis for each period.

On January 12, 2023, the Company granted an aggregate of 48,000 options to purchase the Company’s common stock to certain officers and 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 $5.02 (see table below for the assumptions used). The options fully vested and was expensed immediately.

On January 12, 2023, the Company granted an aggregate of 70,000 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 $5.02 (see table below for the assumptions used). The options fully vested and was expensed immediately.

On January 12, 2023, the Company granted an aggregate of 22,000 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 $5.02 (see table below for the assumptions used). The options fully vested and was expensed immediately. One of the consultants is Mr. Karr, the Company’s former Executive Chairman (see Note 8).

The Company used the Black-Scholes model to determine the fair value of stock options granted on January 12, 2023. In applying the Black-Scholes option pricing model to options granted, the Company used the following assumptions:

SCHEDULE OF STOCK OPTION 

Stock-based expense for stock options recorded in the unaudited consolidated statements of operations totaled $485,605 and $176,073 for the nine months ended January 31, 2023 and 2022, respectively. Stock-based expense for stock options recorded in the unaudited consolidated statements of operations totaled $470,802 and $176,073 for the three months ended January 31, 2023 and 2022, respectively. A balance of $56,744 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 1.98 years.

Stock-based expense for stock options were recorded in the following as reflected in the unaudited statements of operations:

 SCHEDULE OF STOCK-BASED EXPENSE FOR STOCK OPTION

U.S. GOLD CORP. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JANUARY 31, 2023

Stock Warrants

A summary of the Company’s outstanding warrants to purchase shares of common stock as of January 31, 2023 and changes during the period ended as presented below:

SCHEDULE OF STOCK WARRANT ACTIVITY 

As of January 31, 2023, the aggregate intrinsic value of warrants outstanding and exercisable was $0.