NOTE 11 STOCK OPTION PLAN
In 2015 a Stock Option Plan was adopted to advance the interests of the Company and its shareholders by helping the Company obtain and retain the services of employees, officers, consultants, independent contractors and directors, upon whose judgment, initiative and efforts the Company is substantially dependent, and to provide those persons with further incentives to advance the interests of the Company. Eligible participants include employees, officers, certain consultants, or directors of the Company or its subsidiaries.
The aggregate number of shares of Option Stock that may be issued pursuant to the exercise of Options granted under this Plan will not exceed fifteen percent (15%) of the total outstanding shares of the Company's common stock, par value $.001 per share.
On March 7, 2019, The Company entered into an agreement with a consultant for business development services. In consideration for these services, the Company granted options to the consultant exercisable for 3,500,000 shares of the Company’s common stock with a strike price equal to the closing price of the Company’s common stock on the date of grant. Options to acquire 1,000,000 shares vested upon issuance, and 750,000 vest upon the Company’s listing on a major stock exchange. The remaining 1,750,000 options vest in five equal quarterly tranches of 350,000 options starting on September 1, 2019. The warrants expire five years from the date of issuance.
A summary of option activity is as follows for the fiscal period ended March 31, 2019 and the fiscal year ended June 30, 2018:
March 31, 2019
June 30, 2018
Number
of
shares
Weighted average exercise price
Number
of
shares
Weighted
average exercise price
Options outstanding at beginning of period
5,613,500
$
0.80
300,000
$
1.00
Options granted
7,070,000
1.17
5,313,500
0.79
Less:
Options exercised
(3,333)
.94
-
-
Options canceled or expired
(1,092,667)
.93
-
-
Options outstanding at end of period
11,587,500
$
1.02
5,613,500
$
0.80
Options exercisable at end of period
6,103,125
$
0.93
3,008,000
$
0.75
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Share based compensation expense for the 3 and 9 month periods ended March 31, 2019 was $2,634,969 and $4,238,790, respectively. Share based compensation expense for the 3 and 9 month periods ended March 31, 2018 was $2,919,232 and $8,369,120, respectively. Share based compensation expense is included in selling, general, and administrative expense on the consolidated statement of operations.
As of March 31, 2019, there was $8,244,839 of total unrecognized share-based compensation expense related to stock options and warrants that will be recognized over a weighted-average period of 2.2 years
