Annual report pursuant to Section 13 and 15(d)

Stock Compensation Plan

v3.22.1
Stock Compensation Plan
12 Months Ended
Dec. 31, 2021
Retirement Benefits [Abstract]  
Stock Compensation Plan

8. Stock Compensation Plan

 

The Company originally adopted the Oragenics, Inc. 2002 Stock Option and Incentive Plan (the “Stock Incentive Plan”) in September 2002 which was subsequently amended on several occasions until it was amended and restated as the Company’s 2012 Equity Incentive Plan, as amended (the “2012 Incentive Plan”). The aggregate number of shares of the Company’s common stock currently authorized pursuant to its Plan, as amended, is 8,250,000 and the Company’s Plan, as amended continues to provide that the maximum number of shares that may be subject to stock options and stock appreciation rights granted to any individual in a calendar year is 1,000,000 shares. The Plan also provides that the maximum number of shares that may be subject to awards (other than stock options and stock appreciation rights) intended to qualify as “performance-based compensation” under Section 162(m) of the Internal Revenue Code that may be granted to any individual in one calendar year is 1,000,000 shares (however, the exception for “performance-based compensation” under Code Section 162(m) was repealed in the Tax Cuts and Jobs Act of 2017, unless the awards intended to qualify for such exception were granted before November 2, 2017). As of December 31, 2021, an aggregate of 6,724,402 shares of common stock are covered by outstanding option awards and 528,305 shares of common stock are available for future awards under the 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 can generally vest either immediately or over a period of up to three years from their respective grant dates and expire 10 years from the date of grant. As of December 31, 2021, and 2020, 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, 2021 and 2020:

 

    2021     2020  
Expected dividend yield     0 %     0 %
Weighted-average expected volatility     146-149 %     149-150 %
Weighted-average risk-free interest rate     1.29-1.48 %     0.61-1.66 %
Expected life of options     10 years       10 years  

 

Total compensation cost related to stock options was $1,688,022 and $1,491,165 for the years ended December 31, 2021 and 2020, respectively. As of December 31, 2021, there was $401,783 of unrecognized compensation costs related to stock options, which is expected to be recognized over a weighted average period of approximately two years.

 

The following table represents stock option activity for the year ended December 31, 2021:

 

   

Number of

Options

    Weighted Average Exercise Price     Weighted Average Contractual Term (In Years)     Aggregate Intrinsic Value  
Outstanding at December 31, 2020     5,801,349     $ 0.90       8.52     $ 2,773  
Expired     (2,180 )     19.13                  
Forfeited     (638,227 )     1.20                  
Granted     2,320,000       1.01                  
Exercised     (756,540 )     0.48                  
Outstanding at December 31, 2021     6,724,402     $ 0.95       7.99     $ 2,773  
Exercisable at December 31, 2021     5,702,734     $ 0.97       7.80     $ 2,773  

 

The following table summarizes the weighted average grant date fair value of stock options granted per share, the total intrinsic value of stock options exercised and the grant date fair value of stock options that vested during the years ended December 31, 2021 and 2020:

 

    2021     2020  
Weighted average grant date fair value of stock options granted per share   $ 0.99     $ 0.49  
Intrinsic value of stock options exercised   $ 117,211        
Grant date fair value of stock options that vested   $ 1,775,810     $ 1,212,483