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Note 6 - Common Stock Options
 6 Months Ended
Jun. 30, 2022
Notes to Financial Statements  
Share-Based Payment Arrangement [Text Block]

6.

Common Stock Options

 

On November 11, 2005, the Board of Directors of the Company adopted the XBiotech Inc. 2005 Incentive Stock Option Plan (the “2005 Plan”), and on March 24, 2015, the board of directors of the Company adopted the XBiotech Inc. 2015 Equity Incentive Plan (the 2015 Plan”) pursuant to which the Company may grant incentive stock and non-qualified stock options to directors, officers, employees or consultants of the Company or an affiliate or other persons as the Compensation Committee may approve.

 

All options under both Plans will be non-transferable and may be exercised only by the participant, or in the event of the death of the participant, a legal representative until the earlier of the options’ expiry date or the first anniversary of the participant’s death, or such other date as may be specified by the Compensation Committee.

 

The term of the options is at the discretion of the Compensation Committee, but may not exceed 10 years from the grant date. The options expire on the earlier of the expiration date or the date three months following the day on which the participant ceases to be an officer or employee of or consultant to the Company, or in the event of the termination of the participant with cause, the date of such termination. Options held by non-employee Directors have an exercise period coterminous with the term of the options.

 

The number of common shares reserved for issuance to any one person pursuant to the 2005 Plan shall not, in aggregate, exceed 5% of the total number of outstanding common shares. The exercise price per common share under each option will be the fair market value of such shares at the time of the grant. Upon stock option exercise, the Company issues new shares of common stock.

 

A summary of changes in common stock options issued under the 2005 Plan and under the 2015 Plan is as follows:

 

  

Options

 

Exercise Price

 

Weighted-Average
Exercise Price

Options outstanding at December 31, 2020

  

5,327,425

  

$2.71

-

$21.99

 

$

6.09

 

Granted

  

130,000

  

15.83

-

17.49

  

16.69

 

Exercised

  

(743,279

)

 

2.71

-

21.99

  

6.87

 

Forfeitures

  

(88,374

)

 

4.14

-

19.30

  

9.55

 

Options outstanding at June 30, 2021

  

4,625,772

  

$2.71

-

$21.99

 

$

16.30

 

 

  

Options

 

Exercise Price

 

Weighted-Average
Exercise Price

Options outstanding at December 31, 2021

  

4,656,677

  

$2.71

-

$21.74

 

$

10.68

 

Granted

  

146,600

  

5.62

-

11.50

  

7.16

 

Exercised

  

-

  

-

  

-

 

Forfeitures

  

(97,308

)

 

$4.95

-

$21.74

  

14.06

 

Options outstanding at June 30, 2022

  

4,705,969

  

$2.71

-

$21.74

 

$

10.50

 

 

As of June 30, 2021, there was approximately $5.1 million of unrecognized compensation cost, related to stock options granted under the Plans which will be amortized to stock compensation expense over the next 1.58 years.

 

As of June 30, 2022, there was approximately $5.4 million of unrecognized compensation cost, related to stock options granted under the Plans which will be amortized to stock compensation expense over the next 1.41 years.