STOCK-BASED COMPENSATION AND WARRANTS (Tables)
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3 Months Ended |
Sep. 30, 2019 |
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| STOCK-BASED COMPENSATION AND WARRANTS |
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| Schedule of the number of shares authorized, outstanding, and available for future grants under stock option |
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):
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Termination
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Number of Shares
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Description
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Date
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Authorized
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Outstanding
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Available
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2014 Plan
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March 2019
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2,185
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2,185
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—
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2015 Plan
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February 2020
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6,850
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2,610
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4,240
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2016 Plan
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October 2021
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28,000
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26,630
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1,370
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2019 Plan
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July 2029
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15,000
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15,000
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—
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Total
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52,035
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46,425
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5,610
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| Schedule of options granted to executive officers and other employees |
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):
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Time-Based Vesting
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Hybrid
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Number of Shares
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Vesting
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Vested
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Unvested
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Shares
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Total
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Executive officers
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3,588
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(1)
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11,562
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(1)(3)
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7,550
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(2)(3)
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22,700
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Other employees
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921
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(1)
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6,629
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(1)
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3,700
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(2)
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11,250
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Total
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4,509
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18,191
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11,250
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(6)
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33,950
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Total fair value
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$
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817
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(4)
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$
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3,297
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(5)
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(1)
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Stock options are subject to time-based vesting in two tranches, whereby (i) 25% of such options are immediately exercisable for employees who have been employed by the Company for more than one year, and for employees that have been employed by the Company less than one year, 25% of such options will vest on the one year anniversary of the employee’s start date, and (ii) the remaining 75% of the stock options will vest ratably over a period of 36 months beginning on the vesting date for the initial 25% tranche.
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(2)
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Stock options that commence vesting upon the achievement of market, performance and service conditions (‘Hybrid” terms). These options will vest ratably over a period of 36 months beginning when all of the following have occurred: (i) the option recipient has been employed by the Company for at least one year, (ii) the Company’s shares of Common Stock have been listed for trading on a national stock exchange, and (iii) such date no later than July 31, 2023, when the Company’s closing stock price exceeds $0.58 per share for 20 trading days in any consecutive 30 day period.
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(3)
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In August 2019, an executive officer terminated employment which resulted in forfeiture of stock options shown in the table above with time-based vesting for 0.8 million shares and performance vesting for 0.4 million shares.
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(4)
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Represents the aggregate grant date fair value for stock options that were immediately vested on the grant date, which is included in stock-based compensation expense for the three months ended September 30, 2019.
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(5)
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Represents the aggregate grant date fair value for stock options that were not immediately vested on the grant date and will be charged to expense from the grant date through the respective vesting dates through July 2023.
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(6)
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A Monte Carlo valuation model will be used to determine the grant date fair value of these stock options that commence vesting upon the achievement of market, performance and service conditions. The Company has not recognized any expense related to these stock options for the three months ended September 30, 2019, since it is not yet probable that the performance criterion will be achieved. The Company will begin recognizing compensation expense at such time that the performance criterion is achieved and continuing through the end of the requisite service period which will also be determined upon completion of the Monte Carlo valuation.
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| Schedule of summary of combined stock option activity |
The following table sets forth a summary of the combined stock option activity under all of the Company’s stock option plans for the three months ended September 30, 2019 (shares in thousands):
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Shares
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Price (1)
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Term (2)
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Outstanding, beginning of period
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13,865
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$
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1.60
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6.4
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Granted
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33,950
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0.29
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Forfeited
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(1,390)
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0.47
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Outstanding, end of period
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46,425
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0.68
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8.8
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Vested, end of period
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16,365
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1.27
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7.1
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(1)
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Represents the weighted average exercise price.
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(2)
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Represents the weighted average remaining contractual term for the number of years until the stock options expire.
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| Schedule of the fair value of stock options was estimated on the date of grant using the BSM option-pricing model using following weighted-average assumptions |
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Valuation Inputs
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Fair value of common stock on grant date
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$
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0.21
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Exercise price of stock options
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0.29
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Expected volatility
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118
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%
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Risk free interest rate
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1.9
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%
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Expected term (years)
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6.5
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Dividend yield
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0
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%
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| Schedule of Stock-based compensation expense |
Stock-based compensation expense is included in compensation and benefits under the following captions in the unaudited condensed consolidated statements of operations (in thousands):
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Three Months Ended
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September 30,
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2019
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2018
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Research and development
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$
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574
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$
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130
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General and administrative
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820
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748
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Total
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$
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1,394
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$
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878
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| Summary of warrant activity |
Presented below is a summary of warrant activity for the three months ended September 30, 2019 (shares in thousands):
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Shares
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Price (1)
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Term (2)
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Outstanding, beginning of period
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45,997
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$
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1.34
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2.3
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Warrant expirations
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(451)
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1.85
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Outstanding, end of period
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45,546
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1.33
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2.1
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(1)
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Represents the weighted average exercise price.
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Represents the weighted average remaining contractual term for the number of years until the warrants expire.
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