Quarterly report pursuant to Section 13 or 15(d)


3 Months Ended
Mar. 31, 2020
Disclosure Text Block [Abstract]  



2010 Equity Incentive Plan


In 2010, the Company’s Board of Directors adopted the Global Clean Energy Holdings, Inc. 2010 Equity Incentive Plan (the “2010 Plan”) wherein 20,000,000 shares of the Company's Common Stock were reserved for issuance thereunder. As of March 31, 2020 there were no shares available for future option grants under the 2010 Plan. The 2010 Plan expired in April 2020 and was replaced with the 2020 Equity Incentive Plan. See Note J for additional information.


The Company’s Board of Directors has granted stock options to certain officers, directors, employees, and non-employees, which options were not part of the 2010 Plan or any other formal equity incentive plan.


During the first quarter ended March 31, 2020 the Company did not grant any stock options.


A summary of the option award activity and awards outstanding at March 31, 2020 is as follows:


        Weighted   Average    
    Shares   Average   Remaining   Aggregate
    Under   Exercise   Contractual   Intrinsic
    Option   Price   Life(Years)   Value
Outstanding at December 31, 2019     199,027,315       0.016       3.6     $ 14,360,463  
Granted     —         —                    
Exercised     (8,177,315 )     0.009                  
Forfeited     (5,000,000 )     0.090               —    
Expired     (1,300,000 )     0.01               —    
Outstanding at March 31, 2020     184,550,000       0.016       3.6     $ 6,219,550  
Vested and exercisable at March 31, 2020     176,171,212       0.016       3.6     $ 5,889,218  


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 Company estimates the fair value of stock options that have both service and market conditions on the grant date using a lattice model. The following table illustrates the assumptions used in estimating the fair value of options granted during the periods presented: 


    Quarter Ended March, 31 2019
Expected Term (in Years)     2 to 5  
Volatility     123 %
Risk Free Rate     2.8 %
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   $ 120,278  


(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. Used for lattice model purposes only.
(2) Assumed forfeiture rate for market condition option awards prior to vesting. Used for lattice model purposes only.
(3) Assumed expiration or forfeiture rate for market condition option awards after vesting. Used for lattice model purposes only.


During the year ended December 31, 2018 the Company granted options to purchase 110,000,000 shares to the Company’s Chief Executive Officer. The options have both requisite service conditions and market conditions. The requisite service period for the market condition options granted in 2018 was five years and the options vest in three tranches: 28% of the award vests when the market cap exceeds $7 million for a thirty day period; 33% of the award vests when the market cap exceeds $15 million for a thirty day period; and 40% of the award vests when the market cap exceeds $25 million for a thirty day period. As of May 31, 2019, all of the outstanding market condition awards issued during 2018 were fully vested.


For the quarters ended March 31, 2020 and 2019 the Company recognized stock compensation expenses related to stock option awards of $25,614 and $43,008 respectively. The Company recognizes all stock-based compensation in general and administrative expenses in the accompanying consolidated statements of operations. As of March 31, 2020, there was approximately $81,000 of unrecognized compensation cost related to option awards that will be recognized over the remaining service period of approximately 3.6 years.


Stock Purchase Warrants


In May, 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.