STOCK-BASED COMPENSATION AND WARRANTS
|9 Months Ended|
Mar. 31, 2020
|STOCK-BASED COMPENSATION AND WARRANTS|
|STOCK-BASED COMPENSATION AND WARRANTS||
NOTE 6 — STOCK-BASED COMPENSATION AND WARRANTS
Stock Option Plans
The Company currently has two active stock option plans consisting of the 2016 Non-Qualified Stock Option Plan, as amended (the “2016 Plan”), and the 2019 Non Qualified Stock Option Plan (the “2019 Plan”). On July 31, 2019, the 2019 Plan was adopted by the Board of Directors and provides authority to grant non-qualified stock options for up to 15.0 million shares of the Company’s Common Stock. The Company also has stock options outstanding to purchase up to approximately 2.2 million shares of Common Stock under the 2014 Stock and Incentive Plan (the “2014 Plan”) that terminated on March 21, 2019 and approximately 4.8 million shares of Common Stock under the 2015 Stock and Incentive Plan (the "2015 Plan") that terminated on February 23, 2020. Stock options outstanding under the 2014 Plan expire pursuant to their contractual provisions on various dates in 2021. Presented below is a summary of the number of shares authorized, outstanding, and available for future grants under each of the Company’s stock option plans (in thousands):
July 2019 Grants
On July 31, 2019, the Board of Directors granted stock options for an aggregate of approximately 34.0 million shares of Common Stock to certain officers and employees at an exercise price of $0.29 per share. The closing price of the Company’s shares of Common Stock on the date of grant was approximately $0.21 per share. The option grants were designated for approximately 19.0 million shares under the 2016 Plan and 15.0 million shares under the 2019 Plan. As of July 31, 2019, the number of shares subject to stock options, the related fair value and compensation that was immediately recognized for vested options are as follows (in thousands):
In November 2019 and January 2020, the Company granted options for an additional 2,145,000 shares to certain employees, a director and members of the scientific advisory board at an exercise price of $0.29. These options were granted under the 2015 Plan, vest ratably over periods ranging from 36 to 48 months and expire ten years after the grant date. The estimated fair value of these stock options was $0.2 million as of the grant date.
Stock Options Outstanding
The following table sets forth a summary of the combined stock option activity under all of the Company’s stock option plans for the nine months ended March 31, 2020 (shares in thousands):
Stock-based compensation expense is included in compensation and benefits under the following captions in the unaudited condensed consolidated statements of operations (in thousands):
Unrecognized stock-based compensation expense related to stock options that provide solely for time-based vesting as of March 31, 2020 is approximately $4.0 million. This amount is expected to be recognized over a remaining weighted average period of 2.0 years. Unrecognized compensation cost for the Hybrid Options will be recognized beginning on the date that the performance condition becomes probable using the grant date fair value. However, based on preliminary estimates using the BSM option-pricing model, management believes the aggregate fair value will be approximately $2.1 million before adjusting for forfeitures.
For the nine months ended March 31, 2020, the aggregate fair value of stock options granted for approximately 24.8 million shares of Common Stock that provide solely for time-based vesting, amounted to $4.2 million or approximately $0.17 per share as of the grant date. Fair value was computed using the BSM option-pricing model and will result in the recognition of compensation cost ratably over the expected vesting period of the stock options. For the nine months ended March 31, 2020, the fair value of each time-based option was estimated on the date of grant using the BSM option-pricing model, with the following weighted-average assumptions:
The Company has issued warrants in conjunction with various debt and equity financings and for services. For the three and nine months ended March 31, 2020, no warrants were exercised. Presented below is a summary of warrant activity for the nine months ended March 31, 2020 (shares in thousands):
The entire disclosure for share-based payment arrangement.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef