Quarterly report pursuant to Section 13 or 15(d)


3 Months Ended
Mar. 31, 2021
Disclosure Text Block [Abstract]  



2020 Equity incentive Plan


In April 2020, the Company’s Board of Directors adopted the Global Clean Energy Holdings, Inc. 2020 Equity Incentive Plan (the “2020 Plan”) wherein 2,000,000 shares of the Company’s common stock were reserved for issuance thereunder. Options and awards granted to new or existing officers, directors, employees, and non-employees vest ratably over a period as individually approved by the Board of Directors generally over three years, but not in all cases. The 2020 Plan provides for a three-month exercise period of vested options upon termination of service. The exercise price of options granted under the 2020 Plan is equal to the fair market value of the Company’s common stock on the date of grant. Options issued under the 2020 Plan have a maximum term of ten years for exercise and may be exercised with cash consideration or through a cashless exercise in which the holder forfeits a portion of the award in exchange for shares of common stock of the remaining portion of the award. As of March 31, 2021, there were 825,000 shares available for future option grants under the 2020 Plan.


During the first quarter ended March 31, 2021 the Company granted stock options for the purchase of a total of 140,500 shares of Common Stock under the 2020 Plan, of which 100,500 were to employees and 40,000 were to directors.


A summary of the option award activity in 2021 and awards outstanding at March 31, 2021 is as follows:


        Weighted   Average    
    Shares   Average   Remaining   Aggregate
    Under   Exercise   Contractual   Intrinsic
    Option   Price   Life (Years)   Value
Outstanding at December 31, 2020     19,230,214       0.16       3.9     $ 30,044,649  
Granted     140,500       5.92                  
Forfeited     (100,000 )     0.41               —    
Expired                         —    
Outstanding at March 31, 2021     19,270,714       2.56       2.8     $ 116,514,943  
Vested and exercisable at March 31, 2021     18,123,095       1.97       2.7     $ 110,605,999  


The fair value of stock option grants with only continued service conditions for vesting is estimated on the grant date using a Black-Scholes option pricing model. The following table illustrates the assumptions used in estimating the fair value of options granted during the periods presented: 


    Three months ended March 31, 2021
Expected Term (in Years)     2 to 5  
Volatility     85 %
Risk Free Rate     1.4 %
Dividend Yield     0 %
Suboptimal Exercise Factor (1)     1.3  
Exit Rate Pre-vesting (2)     0 %
Exit Rate Post-vesting (3)     0 %
Aggregate Grant Date Fair Value   $ 470,630  


(1) The suboptimal exercise factor estimates the value realized by the holder upon exercise of the option and the estimated point at which an option holder would exercise an in-the-money option. The Company estimated the suboptimal factor based on the holder realizing a pre-tax profit of $500,000.


(2) Assumed forfeiture rate for market condition option awards prior to vesting.


(3) Assumed expiration or forfeiture rate for market condition option awards after vesting.


For the quarters ended March 31, 2021 and 2020, the Company recognized stock compensation expenses related to stock option awards of $102,000 and $25,614 respectively. The Company recognizes all stock-based compensation in general and administrative expenses in the accompanying condensed consolidated statements of operations. As of March 31, 2021, there was approximately $448,000 of unrecognized compensation cost related to option awards that will be recognized over the remaining service period of approximately 3.3 years.


Stock Purchase Warrants and Call Option


In the quarter ended March 31, 2021, the Company did not issue any new warrants to purchase shares of Global Clean Energy Holdings, Inc.


In 2020, the Company issued, to a party interested in Camelina development, a non-transferable warrant for the purchase of an approximately eight-percent interest in its subsidiary, Sustainable Oils, Inc. for approximately $20 million. The warrant expires on June 1, 2021. At the time of issuance, the fair value of the warrant was deemed to be immaterial.


Concurrently with the acquisition of the Bakersfield Biorefinery, GCEH, through its subsidiary, GCE Acquisitions, issued an option right to the seller of the refinery to purchase up to 33 1/3% of the membership interests of GCE Acquisitions. The fair value of the option right on the date of issuance was $5.5 million and expires at ninety days after the refinery meets certain operational criteria.