Annual report pursuant to Section 13 and 15(d)

Stock Compensation Plan

Stock Compensation Plan
12 Months Ended
Dec. 31, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Stock Compensation Plan

9. Stock Compensation Plan

The Company originally adopted the Oragenics, Inc. 2002 Stock Option and Incentive Plan (the “Stock Incentive Plan”) on September 17, 2002. The Stock Incentive Plan was amended to increase the available shares in May 2004, May 2006, April 2008, October 2009, and on August 29, 2011. On October 23, 2012, the Stock Incentive plan was amended and restated as our 2012 Equity Incentive Plan (the “2012 Incentive Plan”). The 2012 Incentive Plan, as amended and restated has authorized 4,000,000 shares for issuance. To date, 2,087,462 shares have been issued under the 2012 Incentive Plan. As a result of such issuances as of December 31, 2016 there is currently an aggregate of 1,912,538 shares available for issuance under the 2012 Incentive Plan, of which 1,621,523 shares are covered by outstanding option awards and 291,015 shares are available for future awards under the 2012 Incentive Plan.

The purpose of the 2012 Incentive Plan is to advance the interests of the Company by affording certain employees and directors of the Company and key consultants and advisors an opportunity to acquire or increase their proprietary interests in the Company. The 2012 Incentive Plan authorizes the grant of stock options (incentive and non-statutory), stock appreciation rights and restricted stock. Options are granted at the fair market value of the Company’s stock on the date of grant. Options generally vest over a period of two to three years from their respective grant dates and expire 10 years from the date of grant. As of December 31, 2016 and 2015, the Company had not awarded any stock appreciation rights under the 2012 Incentive Plan.

Recipients of stock awards under our 2012 Incentive Plan become the owner of record of the stock immediately upon grant, which may be subject to certain restrictions. The balance of unvested restricted stock will be forfeited and automatically transferred back to us at no cost upon the termination of the recipient’s employment. Upon vesting of restricted stock that is made to recipients who are employees, the recipient has the option to settle minimum withholding taxes by electing to have us withhold otherwise deliverable shares having a fair market value equal to the required tax obligations (“net-settlement”). The net-settlement shares are then immediately cancelled and retired and reduce the shares available for issuance under the Company’s 2012 Incentive Plan.


The Company uses the Black-Scholes option pricing model to estimate the fair value of stock-based awards on the date of grant. The assumptions employed in the calculation of the fair value of share-based compensation expense were calculated as follows for all years presented:


    Expected dividend yield — based on the Company’s historical dividend yield.


    Expected volatility — based on the Company’s historical market price at consistent points in a period equal to the expected life of the options.


    Risk-free interest rate — based on the US Treasury yield curve in effect at the time of grant.


    Expected life of options — based on the Company’s historical life of options exercised, giving consideration to the contractual terms of the grants, vesting schedules and expectations of future employee behavior.

The following table summarizes the assumptions used to estimate the fair value of stock options granted during the years ended December 31, 2016 and 2015:


     2016    2015

Expected dividend yield

   0%    0%

Weighted-average expected volatility

   142% - 147%    147% - 149%

Weighted-average risk-free interest rate

   1.59% - 2.40%    2.14% - 2.27%

Expected life of options

   10 Years    10 Years

Total compensation cost related to stock options was $472,780 and $770,704 for the years ended December 31, 2016 and 2015, respectively. As of December 31, 2016, there was $365,744 of unrecognized compensation costs related to stock options, which is expected to be recognized over a weighted average period of 1.1 years.

The following table represents stock option activity as of and for the two years ended December 31, 2016 and 2015, respectively:


     Number of
Price Per

Outstanding at December 31, 2014

     820,865      $ 0.86 - 17.00      $ 4.03  


     (278,334      1.50 - 17.00        5.71  


     928,500        0.78 - 1.32        1.31  




Outstanding at December 31, 2015

     1,471,031      $ 0.78 - 10.40      $ 2.00  


     (574,758      0.84 - 5.40        2.40  


     725,250        0.55 - 0.84        0.69  




Outstanding at December 31, 2016

     1,621,523      $ 0.55 - 10.40      $ 1.28  




Exercisable at December 31, 2016

     648,163      $ 0.78 - 10.40      $ 1.75  

The total grant date fair value of options vested during the years ended December 31, 2016 and 2015 was $572,786 and $325,361, respectively.