Kiora Pharmaceuticals, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Equity Incentive Plan

Equity Incentive Plan

3 Months Ended

Mar. 31, 2016

Share Based Compensation Option And Incentive Plan [Abstract]

Shareholders' Equity and Share-based Payments [Text Block]

9. Equity Incentive Plan

In 2005, the Company approved the 2005 Equity Incentive Plan (the “2005 Plan”). The 2005 Plan provides for the granting of options, restricted stock or other stock-based awards to employees, officers, directors, consultants and advisors. During 2010, the maximum number of shares of common stock that may be issued pursuant to the 2005 Plan was increased to 891,222 shares. The Board is responsible for administration of the 2005 Plan. The Board determines the term of each option, the option exercise price, the number of shares for which each option is granted and the rate at which each option is exercisable. Incentive stock options may be granted to any officer or employee at an exercise price per share of not less than the fair value per common share on the date of the grant (not less than 110% of fair value in the case of holders of more than 10% of the Company’s voting stock) and with a term not to exceed ten years from the date of the grant (five years for incentive stock options granted to holders of more than 10% of the Company’s voting stock). Nonqualified stock options may be granted to any officer, employee, consultant or director at an exercise price per share of not less than the par value per share.

The Company’s Board adopted the 2014 Equity Incentive Plan, or the (“2014 Plan”) and the Employee Stock Purchase Plan the (“ESPP”), and the Company’s stockholders approved the 2014 Plan and the ESPP Plan in February 2015. The maximum number of shares of common stock that may be issued pursuant to the 2014 Plan and the ESPP is 1,034,888 and 70,567, respectively.

In January 2016, the number of shares of common stock issuable under the 2014 Plan automatically increased by 306,291 shares pursuant to the terms of the 2014 Plan, which additional shares are included in the total of 1,034,888 shares issuable under the 2014 Plan.

The following is a summary of stock option activity for the three months ended March 31, 2015 and 2016:

	Number of Options		Weighted- Average Exercise Price		Weighted-Average Contractual Life (In Years)
Three months ended March 31, 2015
Outstanding at beginning of year		752,372	$	0.91		4.55
Granted		435,393		5.80		9.88
Exercised		(23,075)	$	0.65
Expired		(8,600)	$	0.65
Outstanding at end of period		1,156,090	$	2.69		5.05

Exercisable at end of period		827,529	$	2.46		6.87

Vested and expected to vest at end of period		827,529	$	2.46		6.87

	Number of Options		Weighted- Average Exercise Price		Weighted-Average Contractual Life (In Years)
Three months ended March 31, 2016
Outstanding at beginning of year		1,277,367	$	2.75		4.94
Granted		210,525		2.91		9.91
Exercised		-	$	-
Expired		-	$	-
Outstanding at end of period		1,487,892	$	2.80		5.48

Exercisable at end of period		975,881	$	2.68		5.51

Vested and expected to vest at end of period		975,881	$	2.68		5.51

On February 24, 2015, the Board approved the issuance of 350,000 stock options under the 2014 Plan to two executives and seven members of the Board. These options vest 25% on the grant date, 25% on the one-year anniversary of the grant date, and the remaining 50% in 24 monthly equal installments thereafter.

On January 25, 2016, the Board approved the grant of options to purchase 48,300 shares of its common stock to two executives and seven members of the Board. On March 7, 2016, in connection with the Jade Acquisition, the Board approved the grant of options to purchase 47,786 shares of its common stock to two executives. On March 29, 2016, the Board approved the grant of options to purchase 114,438 shares of its common stock. In general, options granted under the 2014 Plan vest 33% on the one-year anniversary of the grant date and the remainder ratably over a 24-month period.

The total stock-based compensation expense for employees and non-employees is included in the accompanying condensed consolidated statements of operations and as follows:

	Three Months Ended
	March 31,
	2016		2015
Research and development	$	18,459	$	174,586
General and administrative		94,901		309,954
	$	113,360	$	484,540

The fair value of options granted for the three months ended March 31, 2016 and March 31, 2015 was approximately $375,747 and $443,807, respectively. As of March 31, 2016 and March 31, 2015, there is approximately $1,145,000 and $911,000 of total unrecognized compensation expense related to unvested stock-based compensation arrangements granted, which cost is expected to be recognized over a weighted-average period of 3.00 and 3.63 years, respectively. The fair value of stock options outstanding and exercisable at March 31, 2016 is approximately $1,562,000. There were no stock options exercised during 2016.

At March 31, 2016, there were 209,761 options available under the 2014 Plan.