Quarterly report pursuant to Section 13 or 15(d)

Stock-Based Compensation

Stock-Based Compensation
3 Months Ended
Mar. 31, 2019
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Stock-Based Compensation


We use broad-based stock plans to attract and retain highly qualified officers and employees and to help ensure that management’s interests are aligned with those of our shareholders. We have also granted equity-based awards to nonemployees and certain employees of Cellectis.

In December 2014, we adopted the Calyxt, Inc. Equity Incentive Plan (the 2014 Plan), which allows for the grant of stock options, and in June 2017, we adopted the 2017 Omnibus Plan (the 2017 Plan).

As of March 31, 2019, 896,478 shares were registered and available for grant under effective registration statements, while, 4,159,660 shares were available for grant in the form of stock options, restricted stock, and restricted stock units under the 2017 Plan. Stock-based awards currently outstanding also include some granted under the 2014 Plan, under which no further awards will be granted.

Stock Options

The estimated fair values of stock options granted and the assumptions used for the Black-Scholes option pricing model were as follows:


     Three months ended March 31,  
     2019      2018  



Estimated fair values of stock options granted

   $ 9.45         $ 10.39  



Risk-free interest rate

     2.5%        2.5% - 2.7%  

Expected volatility

     78.9%        40.9% - 53.7%  

Expected term (in years)

         6.9 years        6.5 – 9.2 years  



We estimate the fair value of each option on the grant date or other measurement date if applicable using a Black-Scholes option-pricing model, which requires us to make predictive assumptions regarding future stock price volatility, employee exercise behavior and dividend yield. The risk-free interest rate for periods during the expected term of the options is based on the U.S. Treasury zero-coupon yield curve in effect at the time of grant. We estimate our future stock price volatility using the historical volatility of comparable public companies over the expected term of the option. Our expected term represents the period of time that options granted are expected to be outstanding determined using the simplified method. We have not nor do we expect to pay dividends for the foreseeable future.

Option strike prices are set at 100 percent or more of the closing share price on the date of grant, and generally vest over six years following the grant date. Options generally expire 10 years after the date of grant.

Information on stock option activity follows:









Price Per









Price Per





Balance as of December 31, 2018

     1,278,038      $ 7.45        3,201,887       $    10.67  


           180,000       13.01  


           (34,402     3.63  

Forfeited or expired

           (2,205     13.29  



Balance as of March 31, 2019

     1,340,631      $ 7.59        3,345,280       $    10.87  



Stock-based compensation expense related to stock option awards was $0.8 million for the three months ended March 31, 2019, and $0.1 million for the three months ended March 31, 2018. The aggregate intrinsic value of options outstanding and exercisable at March 31, 2019, was $23.3 million and the weighted average remaining contractual term was 8.0 years as of that date.


Net cash proceeds from the exercise of stock options less shares used for minimum withholding taxes and the intrinsic value of options exercised were as follows:


     Three months ended March 31,  
In Thousands    2019      2018  



Net cash proceeds

   $ 125      $ 714  



Intrinsic value of options exercised

   $ 353      $ 3,260  



Restricted Stock Units

Units settled in stock subject to a restricted period may be granted to key employees under the 2017 Plan. Restricted stock units generally vest and become unrestricted over five years after the date of grant.

Information on restricted stock unit activity follows:



Number of

Restricted Stock

Units Outstanding



Grant Date Fair





Unvested balance at December 31, 2018

     1,051,414     $ 10.15  


     (8,894     14.91  

Unvested balance at March 31, 2019

     1,042,520     $ 9.64  



The total grant-date fair value of restricted stock unit awards that vested was $0.1 million for three months ended March 31, 2019, and zero for three months ended March 31, 2018.

As of March 31, 2019, unrecognized compensation expense related to non-vested stock options and restricted stock units was $10.2 million. This expense will be recognized over 51 months on average for stock options and over 45 months on average for restricted stock units, assuming no change in the remeasurement value of grants made to non-employees in this calculation.

We treat stock-based compensation awards granted to employees of Cellectis as deemed dividends. We recorded deemed dividends of $0.4 million for the three months ended March 31, 2019, and $0.7 million for the three months ended March 31, 2018.

Cellectis Equity Incentive Plan

Prior to 2018 Cellectis granted stock options to our employees. Compensation costs related to these grants have been recognized in the statements of operations with a corresponding credit to stockholders’ equity, representing Cellectis’ capital contribution to us. The fair value of each stock option was estimated at the grant date using the Black-Scholes option pricing model.

We recognized stock-based compensation expense related to Cellectis’ grants of $0.1 million for the three months ended March 31, 2018. Expenses in 2019 were immaterial.