Stock Options

3 Months Ended

Jul. 31, 2019

Share-based Payment Arrangement [Abstract]

15) STOCK OPTIONS

On August 12, 2016, the Company approved the 2016 Stock Option Plan to issue up to 5,000,000 shares to certain key directors and employees. Pursuant to the Plan, the Company has granted stock options to certain directors, consultants and employees. This Stock Option Plan was amended to issue up to 9,200,000 shares. All options granted by the Company under the 2016 Plan vested immediately.

The Stock Option Plan has a fixed maximum percentage of 10% of the Company’s outstanding shares that are eligible for the plan pool, whereby the number of Shares under the plan increases automatically increases as the total number of shares outstanding increase. The number of shares subject to the Stock Option Plan and any outstanding awards will be adjusted appropriately by the Board of Directors if the Company’s common stock is affected through a reorganization, merger, consolidation, recapitalization, restructuring, reclassification dividend (other than quarterly cash dividends) or other distribution, stock split, spin-off or sale of substantially all of the Company’s assets.

The Stock Option plan also has terms and conditions, including without limitations that the exercise price for stock options granted under the Stock Option Plan must equal the stock’s fair value, based on the closing price per share of common stock, at the time the stock option is granted. The fair value of each option award is estimated on the date of grant utilizing the Black-Scholes model and commonly utilized assumptions associated with the Black-Scholes methodology. Options granted under the Plan have a ten-year maximum term and varying vesting periods as determined by the Board.

On June 6, 2019, the Board of Directors authorized the grant of 500,000 options to purchase shares of common stock of the Company for services to an officer of the Company. The Company estimated the fair value of this option grants using the Black-Scholes model with the following information and assumptions:

Options issued		500,000
Exercise price (Weighted average)	$	0.935
Stock price	$	0.075
Expected volatility		217.24	%
Expected term (years)		5 years
Risk free rate		1.88	%
Fair value of options issued	$	48,084

The options vest upon grant, and are exercisable at the following prices:

Options	Exercise price
50,000	$	0.10
50,000		0.20
25,000		0.35
25,000		0.50
50,000		0.75
50,000		1.00
125,000		1.25
125,000		1.50
500,000	$	0.94

The expiration date of the options is June 6, 2024. The fair value of the options is $48,084 and is recognized as stock-based compensation for the three months ended July 31, 2019. These costs are classified as management and administrative expense.

The following is a summary of the Company’s options issued and outstanding in conjunction with the Company’s Stock Option Plans:

	For the three months ended July 31,
	2019				2018
	Options		Price (a)		Options		Price (a)
Beginning balance		8,200,000	$	0.52		9,355,000	$	0.52
Issued		500,000		0.94		-		-
Exercised		-		-		-		-
Expired						-		-
Ending balance		8,700,000	$	0.57		9,355,000	$	0.52
Exercisable at end of period		8,700,000		0.57		9,163,750	$	0.53

(a) Weighted average exercise price.

The following table summarizes additional information about the options under the Company’s Stock Option Plan as of July 31, 2019:

	Options outstanding and exercisable
Date of Grant	Shares		Price		Remaining Term
August 12, 2016		3,700,000	$	0.52		1.97
January 1, 2017		2,800,000		0.14		2.42
March 1, 2017		1,200,000		0.58		3.59
April 30, 2018		500,000		3.00		3.75
June 6, 2019		500,000		0.94		4.85
Total options		8,700,000	$	0.57		2.61

The total value of stock option awards is expensed ratably over the vesting period of the employees receiving the awards. As of April 30, 2019 and 2018, respectively, there was no unrecognized compensation cost related to stock-based options and awards.

The intrinsic value of exercisable options at July 31, 2019 and April 30, 2019, was $Nil and $Nil, respectively.

REGI U S INC 10-Q