Note 6. Equity Incentive Plan

Equity Incentive Plan

As of May 31, 2025, the Company had one active equity incentive plan, the CytoDyn Inc. Amended and Restated 2012 Equity Incentive Plan (the “2012 Plan”). The 2012 Plan contains an “evergreen provision” whereby the total number of shares available to be issued automatically increases annually on the first day of each fiscal year in an amount equal to 1.0% of the total outstanding shares on the last day of the prior fiscal year, unless the Board determines otherwise before the fiscal year end. As of May 31, 2025, the 2012 Plan covered a total of 66.8 million shares of common stock.

Stock options

Stock option activity is presented in the table below:

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The fair value of the equity awards granted is estimated using the Black-Scholes option-pricing model based on the closing stock prices at the grant date and the assumptions specific to the underlying award. Expected volatility assumptions are based on the historical volatility of the Company’s common stock. The expected term assumption is based on the contractual and vesting term of the equity award. The risk-free interest rate is based on the U.S. Treasury yield curve with a maturity equal to the expected life assumed at the grant date. The following table summarizes the assumptions used in the determination of fair value:

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In the fiscal years ended May 31, 2025, and 2024, stock-based compensation expense related to equity instruments totaled $1.3 million and $2.4 million, respectively; stock-based compensation expense is presented in general and administrative expense and research and development expense in the Company’s consolidated statements of operations. The grant date fair value of options vested during the same periods was approximately $1.3 million and $3.3 million, respectively. As of May 31, 2025, there was approximately $1.7 million of unrecognized compensation expense related to share-based payments for unvested options, which is expected to be recognized over a weighted-average period of approximately 1.5 years.

During the fiscal year ended May 31, 2025, the Company granted stock options covering a total of approximately 13.0 million shares of common stock to directors, employees, and consultants, with exercise prices ranging between $0.13 and $0.41 per share. Of the options granted during the fiscal year ended May 31, 2025, approximately 7.0 million vest over four years, and approximately 6.0 million vest over one year, with a ten-year term. The grant date fair values of the stock options ranged between $0.11 and $0.37 per share. As of May 31, 2025, and May 31, 2024, there were approximately 28.6 million and 19.7 million vested stock options and approximately 9.7 million and 6.1 million unvested stock options outstanding, respectively.

RSUs and PSUs

The 2012 Plan provides for equity instruments, such as RSUs and PSUs, which grant the right to receive a specified number of shares over a specified period of time. RSUs and PSUs are service-based awards that vest according to the terms of the grant. PSUs have performance-based payout conditions.

The following table summarizes the Company’s RSU and PSU activity:

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In May 2025, the Company awarded 3.5 million PSUs to Robert Hoffman, the Company’s Chief Financial Officer, in connection with the commencement of his employment. The vesting of the PSUs is contingent on the achievement of specified performance-based conditions, with a potential payout percentage ranging from 0% to 100%.

Based on the estimated level of achievement of the performance targets associated with the PSUs as of May 31, 2025, unrecognized compensation expense related to the unvested portion of the Company’s RSUs and PSUs totaled approximately $1.4 million, which is expected to be recognized over a weighted-average period of 1.75 years.

Issuance of shares to consultants

In March 2022, the Board approved the issuance under the 2012 Plan of shares of common stock to consultants as payment for services provided. During the fiscal years ended May 31, 2025 and 2024, a total of approximately 0.4 million and 2.5 million shares of common stock, respectively, were issued pursuant to the respective award agreements with the consultants.