AIOCF: Stock issueances and options

Since Avigilon is a public Canadian company, its financial statements can be obtained using SEDAR: http://www.sedar.com/FindCompanyDocuments.do

I looked read through some of the annual report. I was post interested in the Company’s us of equity awards because I thought that perhaps upper management might be leaving because of low equity options. The information is available on pages 28-29 of the 2013 year end financial report.

December 31, 2012:
Shares outstanding: 37.7 million
Outstanding options (12/31/2011): 5.38 million (avg exercise price=$1.20)
New options granted (in 2012): 1.3752 million (exercise price=$6.59)
Options exercised (in 2012): 2.5517 million (exercise price=$1.00)
Options forfeited (in 2012): 50K
Options outstanding on 12/31/2012: 4.151 million (avg exercise price=$3.08)
Options exercisable on 12/31/2012: 2.521 million (avg exercise price=$1.21)

December 31, 2013:
Shares outstanding: 43.0 million (up 5.3 mil over 12/31/2012)
Outstanding options (12/31/2012): 4.151 million (avg exercise price=$3.08)
New options granted (in 2013): 1.262 million (exercise price=$14.76)
Options exercised (in 2013): 2.386 million (exercise price=$1.26)
Options forfeited (in 2013): 541K
Options outstanding on 12/31/2013: 2.486 million (avg exercise price=$9.97)
Options exercisable on 12/31/2013: 0.636 million (avg exercise price=$5.58)

So a few comments:

  1. Company is diluting shares through options grants by 3-3.5% per year. That seems reasonable and inline with tech companies.

  2. Many options were exercised in 2012 and 2013 (close to 5 million shares during that period). The average exercise price was $1 in 2012 and $1.26 in 2013. So many of the people with the grants cashed out. So if they didn’t like their job or their boss, or management then they may have stuck around until they could make money on the stock options. The stock price run up combined with vesting options with very low exercise prices could in part explain why people left the company. As of 12/31/2013, there were still 2.486 million options outstanding; these options have exercise prices as follows: 416k between $1 and $4, 858K between $4.50 and $8.62, and 1.21 million between $11.62 and $31.99. I couldn’t find information on to whom and how many options were granted to specific individuals and executives.

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