NOTE 10 — STOCKHOLDERS’ EQUITY

As of April 30, 2024, 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.

There were no shares of Preferred Stock outstanding as of April 30, 2024 and 2023.

Common Stock issued for cash

On April 10, 2023, the Company entered into a definitive agreement with a single institutional investor in connection with a registered direct offering of 870,000 shares of the Company’s common stock at a price of $5.75 per share and warrants to purchase 870,000 shares of the Company’s common stock at an exercise price of $6.16 per share (the “Securities”), resulting in total gross proceeds of $5,002,500 before the deduction of placement agent fees of $415,175 and legal related offering expenses of $37,115 for a total of $452,290. 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 April 10, 2023. 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.

These 870,000 warrants were recorded as warrant liability as of April 30, 2023 (see Note 9) and was allocated to the proceeds as follows:

SCHEDULE OF WARRANT LIABILITY

U.S. GOLD CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

APRIL 30, 2024

Additionally, on April 10, 2023, the Company agreed to amend, effective as of the closing of a registered offering (see above), the 625,000 warrants which were initially granted on March 15, 2022 with an original exercise price of $8.60 per share and a termination date of September 18, 2027, were reduced to an exercise price of $6.16 per share and amended the termination date to April 10, 2028. Accordingly, the Company recorded a change in fair value due to modification of warrants of $262,500 during the year ended April 30, 2023.

On April 19, 2024, 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 1,400,000 shares of the Company’s common stock at a price of $3.50 per share and warrants to purchase 1,400,000 shares of the Company’s common stock at an exercise price of $4.48 per share (the “Registered Offering”). The warrants are exercisable on October 19, 2024 and will expire on October 19, 2029. The aggregate gross proceeds of the Registered Offering was $4,900,000 before deduction of legal related offering expenses of $72,309. The closing of the Registered Offering occurred on April 19, 2024.

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

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 during the year ended April 30, 2023.

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 (see Note 8).

On March 10, 2023, the Company issued 33,419 shares of common stock to a director of the Company pursuant to the March 2023 Agreement (see Note 8). The 33,419 shares had a fair value of $130,000 or $3.89 per share of common stock based on the quoted trading price on the date of grant. The Company recognized stock-based consulting of $113,750 and $5,417 during the year ended April 30, 2024 and 2023, respectively.

On March 10, 2023, the Company issued 15,424 shares of common stock to Edward Karr, former Executive Chairman of the Company, pursuant to the March 2023 Agreement (see Note 8). The 15,424 shares of common stock had a fair value of $60,000, or $3.89 per share, based on the quoted trading price on the date of grant. The Company recognized stock-based consulting of $52,500 and $7,500 during the year ended April 30, 2024 and 2023, respectively.

On April 4, 2023, the Company issued an aggregate of 5,404 shares of common stock to a consultant in connection with an advisory consulting agreement for services rendered from November 2022 to March 2023. The 5,404 shares of common stock had a fair value of $25,000, or $4.63 per share, based on the quoted trading price on the date of grants, which was fully vested and expensed immediately.

On October 24, 2023, the Company issued an aggregate of 7,569 shares of common stock to a consultant in connection with an advisory consulting agreement for services rendered from April 2023 to September 2023. The 7,569 shares of common stock had a fair value of $30,000, or $3.96 per share, based on the quoted trading price on the date of grants, which was fully vested and expensed over each monthly service period from April 2023 to September 2023. 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, 2024.

On October 24, 2023, the Company issued an aggregate of 5,578 shares of common stock to a consultant in connection with a consulting agreement for services rendered from April 2023 to September 2023. The 5,578 shares of common stock had a fair value of $22,500, or $4.03 per share, based on the quoted trading price on the date of grants, which was fully vested and expensed over each monthly service period from April 2023 to September 2023. The Company reduced accrued liabilities by $1,750 and recognized stock-based consulting of $20,750 during the year ended April 30, 2024.

U.S. GOLD CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

APRIL 30, 2024

On October 24, 2023, 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 2023 to April 2024. The 25,000 shares of common stock had a fair value of $144,000, or $5.76 per share, based on the quoted trading price on the date of grant. The Company reduced accrued liabilities by $8,400, recognized stock-based consulting of $135,600 during the year ended April 30, 2024.

Total stock compensation expense for awards issued for services of $446,198 and $738,125 was expensed for the years ended April 30, 2024 and 2023, respectively. There are 23,829 unvested restricted stock units with unvested compensation expense of $215,375 at April 30, 2024 remaining to be expensed over future vesting periods of a weighted average period of 0.22 year. There were 409,646 vested restricted stock units awarded but unissued into common stock as of April 30, 2024. A total of 433,475 restricted stock units are outstanding, vested and unvested, as of April 30, 2024.

A summary of the of changes in restricted stock units outstanding during the years ended April 30, 2024 and 2023, is as follows:

SCHEDULE OF ACTIVITY RESTRICTED STOCK UNITS

Equity Incentive Plan

In August 2017, the Board approved the Company’s 2017 Equity Incentive Plan (the “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 Stock Incentive Plan (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 years ended April 30, 2024 and 2023:

SCHEDULE OF STOCK OPTION ACTIVITY

U.S. GOLD CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

APRIL 30, 2024

At April 30, 2024 and 2023, 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.

The Company used the Black-Scholes model to determine the fair value of stock options granted during the year ended April 30, 2023. In applying the Black-Scholes option pricing model to options granted, the Company used the following assumptions:

SCHEDULE OF STOCK OPTION VALUATION ASSUMPTION

Stock-based compensation for stock options recorded in the consolidated statements of operations totaled $29,608 and $493,008 for the years ended April 30, 2024 and 2023, respectively. A balance of $19,736 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 0.73 years.

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

SCHEDULE OF STOCK-BASED EXPENSE FOR STOCK OPTION

U.S. GOLD CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

APRIL 30, 2024

Stock Warrants

The following is a summary of the Company’s stock warrant activity during the years ended April 30, 2024 and 2023:

SCHEDULE OF STOCK WARRANT ACTIVITY

As of April 30, 2024 and 2023, the aggregate intrinsic value of warrants outstanding and exercisable were de minimis for each period.

Concurrent with the sale of common stock on April 10, 2023, the Company issued warrants to purchase 870,000 shares of the Company’s common stock at an exercise price of $6.16 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 870,000 warrants were recorded as warrant liability as of April 30, 2024 and 2023 (see Note 9).

Additionally, on April 10, 2023, the Company agreed to amend, effective as of the closing of a registered offering, 625,000 warrants which was initially granted on March 15, 2022 with an original exercise price of $8.60 per share and a termination date of September 18, 2027, were reduced to an exercise price of $6.16 per share and amended the termination date to April 10, 2028. These 625,000 warrants were recorded as warrant liability as of April 30, 2024 and 2023 (see Note 9).

Concurrent with the sales of common stock on April 19, 2024, the Company issued warrants to purchase 1,400,000 shares of the Company’s common stock at an exercise price of $4.48 per share. The warrants are exercisable on October 19, 2024 and will expire on October 19, 2029.

U.S. GOLD CORP. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

APRIL 30, 2024