NOTE 10 — STOCKHOLDERS’ EQUITY

As of April 30, 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.

Series H Convertible Preferred Stock

Northern Panther Merger Agreement

On August 10, 2020, the Company entered into the Merger Agreement with Acquisition Corp., NPRC and the Stockholder Representative named therein, pursuant to which the Company agreed to issue (i) 581,053 shares of the Company’s common stock, and (ii) 106,894 shares of the Company’s Series H Preferred Stock in exchange for all the issued and outstanding shares of NPRC with NPRC becoming a wholly owned subsidiary of the Company. The Merger closed on August 11, 2020 (see Note 4).

On August 11, 2020, the Company filed a Certificate of Designations, Preferences and Rights of the Series H Preferred Stock with the Secretary of State of the State of Nevada amending its Articles of Incorporation to establish the Series H Preferred Stock and the number, relative rights, preferences and limitations thereof. Pursuant to the Certificate of Designations, 106,894 shares of preferred stock have been designated as Series H Preferred Stock.

The Series H Preferred Stock was convertible into common stock on a 1 for 10 basis upon the receipt of the approval by the requisite vote of the Company’s stockholders at the Company’s 2020 annual meeting, which was held on November 9, 2020. The Company’s stockholders approved such conversion on November 9, 2020. On November 13, 2020, the Company issued an aggregate of 1,068,940 shares of the Company’s common stock in exchange for the conversion of all 106,894 outstanding shares of Series H Preferred Stock.

In connection with the Merger, Luke Norman Consulting Ltd. received a finder’s fee equal to the quotient of (a) 5% of the purchase value for the Merger and (b) the 30-day Volume Weighted Average Price (“VWAP”) of a share of the Company’s common stock as reported on the Nasdaq Capital Market prior to the execution Merger Agreement, which was paid in 82,500 shares of restricted common stock on August 11, 2020.

U.S. GOLD CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

APRIL 30, 2022

The total consideration given consist of the shares of common stock and common stock equivalents of 1,650,000 shares, valued at the Volume Weighted Average Price for the 30-day period immediately prior to the date of the Merger Agreement of $7.6612 per share of common stock, or $12,640,980.

During the year ended April 30, 2021, all Series H Preferred Stock had converted and there were no shares of Series H Preferred Stock outstanding as of April 30, 2022.

Series I Convertible Preferred Stock

Securities Purchase Agreement

In connection with the Merger, on August 10, 2020, the Company entered into a securities purchase agreement (the “SPA”) with certain investors, pursuant to which the Company sold to such investors in a private placement (i) an aggregate of 921,666 shares of the Company’s Series I Convertible Preferred Stock, par value $0.001 per share (the “Series I Preferred Stock”) and (ii) warrants to purchase an aggregate of 921,666 shares of common stock at an exercise price of $6.00 per share for aggregate consideration of $5,530,004.

On August 11, 2020, the Company filed a Certificate of Designation of Rights, Powers, Preferences, Privileges and Restrictions of the Series I Preferred Stock (the “Series I Certificate of Designation”) with the Secretary of State of the State of Nevada amending its Articles of Incorporation to establish the Series I Preferred Stock and the number, relative rights, powers, preferences, privileges and restrictions thereof. Pursuant to the Series I Certificate of Designations, 921,666 shares of preferred stock have been designated as Series I Preferred Stock. The Series I Preferred Stock has substantially the same terms as the Series H Preferred Stock, except that each share of Series I Preferred Stock is convertible into one share of common stock. The Warrants are exercisable in whole or in part at any time, from time to time following the initial exercise date, and terminate five years following the issuance. The sale of the Series I Preferred Stock and warrants under the SPA closed on August 11, 2020. The conversion of the Series I Preferred Stock and the warrants into common stock was subject to the Company’s stockholders’ approval, which was received on November 9, 2020. On November 17, 2020, the Company issued an aggregate of 921,666 shares of the Company’s common stock in exchange for the conversion of all 921,666 outstanding shares of Series I Preferred Stock.

The fair value of the Series I Preferred Stock and warrants if converted on the date of issuance was greater than the value allocated to the Series I Preferred Stock and warrants. As a result, the Company recorded a BCF of approximately $5.5 million that the Company recognized as deemed dividend to the holders of Series I Preferred Stock and accordingly, an adjustment to net loss to arrive at net loss available to common stockholders and a corresponding increase in additional paid in capital upon issuance of the Series I Preferred Stock and warrants. The Company accounted for the deemed dividend resulting from the issuance of Series I Preferred Stock and warrants using the relative fair value method.

During the year ended April 30, 2021, all Series I Preferred Stock had converted and there were no shares of Series I Preferred Stock outstanding as of April 30, 2022.

Common Stock issued for cash

Pursuant to the February 2021 Purchase Agreement closed on February 1, 2021, the Company issued and sold to the Purchasers (i) in the Offering an aggregate of 914,136 shares of the Company’s common stock at a price of $10.54 per share and (ii) in a concurrent private placement warrants to purchase an aggregate of 457,068 shares of common stock at an exercise price of $14.50 per share for aggregate gross proceeds from the Offering of $9,635,967 before the deduction of total placement agent fees, and legal related offering expenses of approximately $636,890. Pursuant to the February 2021 Purchase Agreement, the warrants are exercisable six months following the date of issuance and terminate five years following the initial exercise date. A holder of such warrant will not have the right to exercise any portion of its warrants if the holder, together with its affiliates, would beneficially own in excess of 4.99% (or 9.99% at the election of the holder prior to the date of issuance) of the number of shares of common stock outstanding immediately after giving effect to such exercise (the “Beneficial Ownership Limitation”); provided, however, that upon 61 days’ prior notice to the Company, the holder may increase the Beneficial Ownership Limitation, provided that in no event shall the Beneficial Ownership Limitation exceed 9.99%.

On January 27, 2021, the Company entered into an amendment to that certain engagement agreement (“Engagement Agreement Amendment”) with Palladium Capital Group, LLC (“Palladium”), dated March 29, 2020, in connection with the Offering, among other things. Pursuant to the Engagement Agreement Amendment, the Company agreed to pay Palladium a cash fee equal to 8% of the aggregate gross proceeds received by the Company in the Offering from investors introduced to the Company by Palladium. In addition, the Company issued to Palladium warrants to purchase up to 46,490 shares of common stock which are identical in all material respects to the warrants issued pursuant to the February 2021 Purchase Agreement.

U.S. GOLD CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

APRIL 30, 2022

On February 14, 2022, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) with certain institutional and accredited investors in connection with a registered direct offering of 384,741 shares of the Company’s common stock at a price of $6.50 per share and warrants to purchase 192,370 shares of the Company’s common stock at an exercise price of $8.00 per share (the “Registered Offering”). The warrants are exercisable immediately following issuance and will expire five years from the issuance date. The aggregate gross proceeds of the Registered Offering was $2,500,817 before deduction of legal related offering expenses of $30,767. The closing of the Registered Offering occurred on February 16, 2022.

On March 15, 2022, the Company entered into a definitive agreement (the “Definitive Agreement”) with a single institutional investor in connection with a registered direct offering of 625,000 shares of the Company’s common stock at a price of $8.00 per share and warrants to purchase 625,000 shares of the Company’s common stock at an exercise price of $8.60 per share (the “Securities”), resulting in total gross proceeds of $5 million before the deduction of placement agent fees of $415,000 and legal related offering expenses of $25,399 for a total of $440,399. The warrants are exercisable six months following the date of issuance and will expire 5 years following the initial exercise date. The closing of the sale of the Securities occurred on March 18, 2022. These 625,000 warrants were recorded as warrant liability as of April 30, 2022 (see Note 9) and was allocated to the proceeds as follows:

SCHEDULE OF WARRANT LIABILITY 

Pursuant to ASC 470-20-25, if the warrants are classified as liability, the proceeds should be allocated first to the warrants based on their fair value (not relative fair value). The residual should be allocated to the remaining equity instruments.

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

On July 31, 2020, the Company granted to four former directors of the Company an aggregate of 1,875 shares of common stock for board services. The shares of common stock vested immediately on the date of grant. The total 1,875 shares of common stock had a fair value of $15,244, or $8.13 per share, based on the quoted trading price on the date of grant, which was fully vested and expensed immediately.

On August 11, 2020, the Company issued 82,500 shares of common stock to a consultant for finder’s fee related to the Merger. The 82,500 shares of common stock had a fair value of $786,225, or $9.53 per share, based on the quoted trading price on the date of grant, which was fully vested and expensed immediately.

On September 16, 2020, the Company and David Rector, the Company’s former Chief Operating Officer, agreed by mutual understanding that Mr. Rector’s employment as an officer and employee of the Company would terminate, effective as of October 31, 2020 (the “Separation Date”). In connection with Mr. Rector’s departure, the Company entered into a General Release and Severance Agreement with Mr. Rector (the “Separation Agreement”), pursuant to which Mr. Rector provided certain transition services to the Company from the Separation Date until December 31, 2020. Pursuant to the Separation Agreement, Mr. Rector received (i) a prorated annual bonus for the 2020 calendar year and through the Separation Date equal to $150,000 (the “Prorated Bonus”), which was paid in the number of fully vested shares of restricted common stock of the Company equal to the Prorated Bonus determined based on the common stock’s fair market value on the date of grant, and subject to the terms and conditions of the Company’s 2020 Stock Incentive Plan (the “2020 Plan”) and the Company’s standard form Restricted Stock Award Agreement; and (ii) any equity awards granted to Mr. Rector by the Company pursuant to its 2014 Equity Incentive Plan (the “2014 Plan”), 2017 Equity Incentive Plan (the “2017 Plan”), or 2020 Plan (the 2014 Plan, 2017 Plan, and 2020 Plan are collectively referred to herein as, the “Equity Plans”) during the term of Mr. Rector’s employment, were 100% vested and retained by Mr. Rector, notwithstanding any terms in an award agreement or plan document regarding forfeiture of such awards under the Equity Plans upon termination of employment provided that the foregoing did not in any way extend the awards beyond their original term. The $150,000 bonus was paid in 18,502 shares of restricted common stock and had a fair value of $150,000, or $8.11 per share, based on the quoted trading price on the date of grant, which were fully vested and expensed immediately. Additionally, the Company recognized stock-based compensation of $77,250 due to the accelerated vesting of the 7,500 RSUs granted on September 18, 2019. Accordingly, the Company issued 7,500 shares in November 2020 in connection with the vested 7,500 RSUs.

On September 17, 2020, the Compensation Committee of the Board awarded five directors of the Company an aggregate of 12,500 shares of common stock. The shares of common stock vested immediately on the date of grant. The total 12,500 shares of common stock had a fair value of $140,125, or $11.21 per share, based on the quoted trading price on the date of grant, which was fully vested and expensed immediately.

U.S. GOLD CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

APRIL 30, 2022

On September 17, 2020, the Company issued 30,107 shares of common stock to Edward Karr, former Chief Executive Officer, as bonus in connection with the consummation of the acquisition by the Company of the NPRC (see Note 4). The Company agreed to pay Mr. Karr a bonus in the amount of $450,000 payable as follows: (i) 75% or $337,500 of the bonus payable in fully vested shares of common stock and (ii) the remaining 25% or $112,500 in cash which was paid in October 2020. The $337,500 bonus was paid in 30,107 shares of common stock and had a fair value of $337,500, or $11.21 per share, based on the quoted trading price on the date of grant, which was fully vested and expensed immediately.

On October 31, 2020, the Company granted four former directors of the Company an aggregate of 1,875 shares of common stock for board services. The shares of common stock vested immediately on the date of grant. The total 1,875 shares of common stock had a fair value of $15,206, or $8.11 per share of common stock, based on the quoted trading price on the date of grant, which was fully vested and expensed immediately.

On October 31, 2020, the Company paid its former Chief Financial Officer for accounting services rendered from February 2020 to September 2020 by issuing 1,857 shares of common stock at an average price of $7.08 per share of common stock based on the quoted trading prices on the date of grants. In connection with this issuance, the Company recorded stock-based accounting fees of $13,145 during the year ended April 30, 2021. The common stock issued to the former Chief Financial Officer were fully vested and expensed immediately.

On November 9, 2020, the Company issued an aggregate of 188 shares of common stock for director services rendered from November 1 to November 9, 2020. The total 188 shares of common stock had a fair value of $1,598, or $8.50 per share, based on the quoted trading price on the date of grant, which was fully vested and expensed immediately.

On December 8, 2020, the Company entered into a one-year consulting agreements for investor relation services under which it was required to pay for services either in cash or shares of the Company’s common stock. On December 8, 2020, the Company issued 5,009 shares at a fair value of $56,250 or $11.23 per share of common stock based on the quoted trading prices on the date of grant. The Company recognized stock-based consulting of $23,437 during the year ended April 30, 2021 and recorded prepaid stock-based expense of $32,813 at April 30, 2021. The Company fully amortized the prepaid stock-based expense of $32,813 into stock-based consulting during the year ended April 30, 2022.

On December 9, 2020, the Company granted an aggregate of 254,464 RSUs to two officers and one employee of the Company pursuant to respective restricted stock unit award agreements. The RSUs vested 25% on the date of issuance and 25% vest on each of the first, second and third anniversaries of the date of grant. The 254,464 RSUs had a fair value of $2,852,541 or $11.21 per share of common stock based on the quoted trading price on the date of grant and will be expensed over the vesting period.

On December 9, 2020, the Company granted 50,000 RSUs to Edward Karr, former Executive Chairman, pursuant to restricted stock unit award agreements. The RSUs vesting terms were 25% on the date of issuance and 25% vest on each of the first, second and third anniversaries of the date of grant. The 50,000 RSUs had a fair value of $560,500 or $11.21 per share of common stock based on the quoted trading price on the date of grant. On March 19, 2021, the Company and Edward, agreed by mutual understanding that Mr. Karr’s employment as an officer and employee, and his service as a member of the board of directors, of the Company will terminate, effective as of March 19, 2021. Accordingly, the Company recognized stock-based compensation of $560,500 due to the accelerated vesting of the 50,000 RSUs granted on December 9, 2020 pursuant to the Separation Agreement.

On December 9, 2020, the Company granted an aggregate of 13,392 RSUs to three directors of the Company for services rendered. The 13,392 RSUs had a fair value of $150,124 or $11.21 per share of common stock based on the quoted trading price on the date of grant. The RSUs fully vested and expensed immediately.

On January 7, 2021, the Company entered into another one-year agreement with a director of the Company (see Note 8). On January 7, 2021, the Company issued 3,222 shares at a fair value of $50,000 or $15.52 per share of common stock based on the quoted trading prices on the date of grant. The Company recognized stock-based consulting of $16,667 during the year ended April 30, 2021 and recorded prepaid stock-based expense of $33,333 at April 30, 2021. The Company fully amortized the prepaid stock-based expense of $33,333 into stock-based compensation during the year ended April 30, 2022.

Between January 2021 and April 2021, the Company issued an aggregate of 8,047 shares of common stock to two consultants for business development and advisory, and consulting services rendered. The total 8,047 shares of common stock had a fair value of $95,565, or $11.88 per share of common stock, based on the quoted trading price on the date of grant, which was fully vested and expensed immediately.

U.S. GOLD CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

APRIL 30, 2022

On February 14, 2021, the Company granted an aggregate of 3,946 RSUs to a director of the Company for services rendered. The 3,946 RSUs had a fair value of $50,000 or $12.67 per share of common stock based on the quoted trading price on the date of grant. The RSUs fully vested and expensed immediately.

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. In connection with this issuance, the Company reduced accrued liabilities by $14,203 and recognized stock-based consulting of $244,297 during the year ended April 30, 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 year ended April 30, 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. One of the consultants is Mr. Karr, the Company’s former Executive Chairman (see Note 8).

On April 9, 2022, 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 2022 to April 2023. The 25,000 shares of common stock had a fair value of $157,000, or $6.28 per share, based on the quoted trading price on the date of grant. The Company recognized stock-based consulting of $13,083 during the year ended April 30, 2022 and recorded prepaid stock-based expense of $143,917 at April 30, 2022 to be amortized over the term of the consulting agreement.

On April 22, 2022, the Company issued an aggregate of 2,749 shares of common stock to a consultant in connection with a consulting agreement for services rendered from November 2021 to April 2022. The 2,749 shares of common stock had a fair value of $22,500, or $8.18 per share, based on the quoted trading price on the date of grants, which was fully vested and expensed immediately.

U.S. GOLD CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

APRIL 30, 2022

On April 22, 2022, the Company issued an aggregate of 3,708 shares of common stock to a consultant in connection with an advisory consulting agreement for services rendered from October 2021 to March 2022. The 3,708 shares of common stock had a fair value of $30,000, or $8.09 per share, based on the quoted trading price on the date of grants, which was fully vested and expensed immediately.

On April 22, 2022, the Company issued an aggregate of 5,814 shares of common stock to a director of the Company pursuant to the January 2022 Agreement (see Note 8). The 5,814 shares had a fair value of $50,000 or $8.60 per share of common stock based on the quoted trading prices on the date of grant. The Company recognized stock-based consulting of $16,667 during the year ended April 30, 2022 and recorded prepaid stock-based expense of $33,333 at April 30, 2022 to be amortized over the term of the agreement.

On April 25, 2022, the Company issued 5,168 and 7,353 shares of common stock to Edward Karr, former Executive Chairman of the Company, pursuant to the March 2021 Agreement and the March 2022 Agreement, respectively (see Note 8). The 5,168 shares of common stock had a fair value of $60,000, or $11.61 per share, based on the quoted trading price on the date of grant. In connection with this issuance, the Company reduced accrued liabilities by $7,500 and recognized stock-based consulting of $52,500 during the year ended April 30, 2022. The 7,353 shares of common stock had a fair value of $60,000, or $8.16 per share, based on the quoted trading price on the date of grant. The Company recognized stock-based consulting of $7,500 during the year ended April 30, 2022 and recorded prepaid stock-based expense of $52,500 at April 30, 2022 to be amortized over the term of this agreement.

On April 25, 2022, the Company issued 12,634 shares of common stock to a consultant in connection with a one-year strategic advisory agreement for services to be rendered from March 10, 2021 to March 10, 2022. The 12,634 shares of common stock had a fair value of $130,000, or $10.29 per share, based on the quoted trading price on the date of grant. In March 2022, the Company and the consultant mutually agreed to extend the term of the agreement from March 11, 2022 to March 10, 2023 under the same terms as the initial agreement. On April 25, 2022, the Company issued 14,286 shares of common stock to such consultant for services to be rendered from March 11, 2022 to March 10, 2023. The 14,286 shares of common stock had a fair value of $130,000, or $9.10 per share, based on the quoted trading price on the date of grant. The Company recognized stock-based consulting of $130,000, reduced accrued liabilities by $16,250 during the year ended April 30, 2022 and recorded prepaid stock-based expense of $113,750 at April 30, 2022 to be amortized over the term of this agreement.

Total stock compensation expense for awards issued for services of $1,386,512 and $1,868,368 was expensed for the years ended April 30, 2022 and 2021, respectively. A balance of $1,399,698 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 1.66 years.

Common Stock issued for exercise of Stock Warrants

In October 2020, the Company issued 10,000 shares of common stock for the exercise of stock warrants and received proceeds of $70,000.

In November and December 2020, the Company issued an aggregate of 168,571 shares of common stock for the exercise of stock warrants and received proceeds of $1,179,997.

In December 2020, the Company issued 33,858 shares of common stock for the cashless exercise of 109,688 stock warrants.

Between February 2021 and March 2021, the Company issued an aggregate of 178,571 shares of common stock for the exercise of stock warrants and received proceeds of $1,249,997.

In February 2021, the Company issued 91,894 shares of common stock for the cashless exercise of 166,666 stock warrants.

In April 2022, the Company issued 166,667 shares of common stock for the exercise of stock warrants and received proceeds of approximately $1,000,000.

U.S. GOLD CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

APRIL 30, 2022

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.

Stock options

The following is a summary of the Company’s stock option activity during the years ended April 30, 2022 and 2021:

 SCHEDULE OF STOCK OPTION ACTIVITY

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

In September 2020, the Board approved the acceleration of the vesting terms of the 50,000 stock options granted to Edward Karr, former Chief Executive Officer of the Company, and 25,000 stock options granted to David Rector, former Chief Operating Officer of the Company on December 21, 2017 and therefore the total 75,000 stock options are fully vested. Additionally, the Board of Directors of the Company approved to extend the exercise period of the stock options granted to Mr. Rector and three former directors, to December 21, 2022, the original termination date of the respective stock option agreements. During the year ended April 30, 2021, the Company recognized stock-based compensation of $133,439 due to the accelerated vesting of the 75,000 fully vested stock options granted on December 21, 2017.

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.

U.S. GOLD CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

APRIL 30, 2022

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. 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 during the year ended April 30, 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 consolidated statements of operations totaled $183,475 and $194,761 for the years ended April 30, 2022 and 2021, respectively. A balance of $78,948 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 2.73 years.

Stock Warrants

The following is a summary of the Company’s stock warrant activity during the years ended April 30, 2022 and 2021:

 SCHEDULE OF STOCK WARRANT ACTIVITY

U.S. GOLD CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

APRIL 30, 2022

As of April 30, 2022, the aggregate intrinsic value of warrants outstanding and exercisable were de minimis for each period.

In relation to the issuance of the shares of Series I Convertible Preferred Stock on August 10, 2020, the Company issued 921,666 warrants which are exercisable in whole or in part at any time, from time to time following the initial exercise date, and terminate five years following the issuance. The fair value of the warrants was $5,530,004, as measured on the date of the issuance with a Black-Scholes pricing model using the assumptions noted in the following table:

 SCHEDULE OF WARRANTS ISSUED

The fair value of the warrants was credited to Additional paid-in capital, and also represented a deemed dividend to those shareholders, which was charged to Additional paid-in capital, therefore with no effect on that account.

In October 2020, the Company issued 10,000 shares of common stock for the exercise of stock warrants and received proceeds of $70,000.

In November and December 2020, the Company issued an aggregate of 168,571 shares of common stock for the exercise of stock warrants and received proceeds of $1,179,997.

In December 2020, the Company issued 33,858 shares of common stock for the cashless exercise of 109,688 stock warrants.

Between February 2021 and March 2021, the Company issued an aggregate of 178,571 shares of common stock for the exercise of stock warrants and received proceeds of $1,249,997.

In February 2021, the Company issued 91,894 shares of common stock for the cashless exercise of 166,666 stock warrants.

Concurrent with the sales of common stock on February 1, 2021, the Company issued 457,068 stock warrants. The stock warrants are exercisable six months following the initial exercise date and terminate five years following issuance. The stock warrants have an exercise price of $14.50 per share and each warrant is exercisable to purchase one share of common stock. In addition, the Company issued to Palladium Capital Group, LLC warrants to purchase up to 46,490 shares of common stock which are identical in all material respects to the warrants issued pursuant to the February 2021 Purchase Agreement in connection with the Offering.

Concurrent with the sales of common stock on February 14, 2022, the Company issued warrants to purchase 192,370 shares of the Company’s common stock at an exercise price of $8.00 per share. The warrants are exercisable immediately following issuance and will expire five years from the issuance date.

Concurrent with the sale of common stock on March 18, 2022, the Company issued warrants to purchase 625,000 shares of the Company’s common stock at an exercise price of $8.60 per share. The warrants are exercisable six months following the date of issuance and will expire 5 years following the initial exercise date. These warrants allow for the potential settlement in cash if certain extraordinary events are affected by the Company, including a 50% or greater change of control in the Company’s common stock. Such payment in cash shall be equal to the black-scholes value as defined in the warrant agreement. These 625,000 warrants were recorded as warrant liability as of April 30, 2022 (see Note 9).

U.S. GOLD CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

APRIL 30, 2022

In April 2022, the Company issued 166,667 shares of common stock for the exercise of stock warrants and received proceeds of approximately $1,000,000.