Rezolute, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Stock-Based Compensation and Warrants

Stock-Based Compensation and Warrants

9 Months Ended

Mar. 31, 2019

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation and Warrants

Note 8. Stock-Based Compensation and Warrants

Stock Options

As of March 31, 2019, the Company had outstanding stock options for 16.8 million shares under the Company’s stock options plans (the “Plans”), and approximately

9.2

million shares were available for future grants. As discussed in Note 13, on April 24, 2019 the Company’s stockholders voted to approve an increase in the authorized shares by

13.0

million shares whereby a total of 39.0 million shares are now authorized for grants under the Plans.

The following table sets forth a summary of stock option activity under Plans for the nine months ended

March 31, 2019

				Weighted		Weighted Average
	Number of			Average		Remaining
	Options			Exercise Price		Contractual Life

Outstanding, June 30, 2018		19,415,246		$	1.55	7.8
Granted		1,125,000			0.52
Forfeited		(3,672,100	)		1.58
Outstanding, March 31, 2019		16,868,146			1.61	6.6

Exercisable, March 31, 2019		12,215,439			1.82	6.0

Effective

July 1, 2018

, the Company adopted ASU

2016

recognize

forfeitures in the period that the forfeiture occurs rather than estimating the number of awards that are not expected to vest. The unrecognized stock-based compensation expense as of

March 31, 2019

$3,041,487

and this amount is expected to be recognized over a weighted average period of

1.1

years.

Stock-based compensation expense is included in compensation and benefits under the following captions in the unaudited condensed consolidated statements of operations:

	Three Months				Nine Months
	Ended March 31,				Ended March 31,
	2019		2018		2019		2018

Research and development	$	117,594	$	289,645	$	308,266	$	870,464
General and administrative		578,453		1,184,070		2,081,147		3,305,029
Total	$	696,047	$	1,473,715	$	2,389,413	$	4,175,493

The aggregate fair value of stock options granted for 1,125,000 shares of Common Stock for the nine months ended March 31, 2019 amounted to $445,189, or $0.40 per share as of the grant date. Fair value was computed using the Black-Scholes valuation model and will result in the recognition of compensation cost ratably over the vesting period of the stock options which approximates the requisite service period. For the nine months ended March 31, 2019, the fair value of each stock option grant was estimated on the date of grant using the Black-Scholes option-pricing model, with the following weighted-average assumptions:

Expected volatility	84	%
Risk free interest rate	2.83	%
Expected term (years)	7
Dividend yield	0	%

Warrants

The Company has issued warrants in conjunction with various debt and equity financings and for services. For the nine months ended March 31, 2019, no warrants expired, and none were exercised. As discussed in Note 11, during the three months ended March 31, 2019, the Company modified one of the outstanding warrants held by a member of the Board of Directors which resulted in an increase in the number of shares subject to the warrant from 500,000 shares to 1,207,146 shares, and a decrease in the exercise price from $0.52 per share to $0.18 per share. Presented below is a summary of warrant activity for the nine months ended March 31, 2019:

				Weighted		Weighted Average
	Number of			Average		Remaining
	Warrants			Exercise Price		Contractual Life
Outstanding, June 30, 2018		45,635,217		$	1.37	3.4
Warrants issued for consulting services		46,872			1.00
Issuance of warrant modification		1,207,146			0.18
Modified warrant replaced		(500,000	)		0.52
Outstanding, March 31, 2019		46,389,235			1.35	2.6