Recording an offline exercise or lapse is necessary if these transactions occurred outside of Capdesk.
After you have recorded the equity award on Capdesk, you are then able to record an exercise or lapse. Please note, this is not the same process as online exercise which allows you to complete the transaction through Capdesk.
Exercising options or warrants will convert the equity award into shares and make them a shareholder in the company.
To record the exercise of the equity award, you need to click on the 'Options' or 'Warrants' tab (under 'Equity Awards') -> action button by the specific stakeholder (far right button with the 3 dots) -> 'Register Offline Exercise'.
After clicking on 'Register Offline Exercise', you’ll then be directed to the page where you input the exercise details.
'Exercise Date' - the date your options are exercised (converted into shares).
Choose one of the three below:
- 'Exercise vested options' - to exercise the amount of options that have vested as of exercise date e.g. 5,000 options vested as of 19/02/2019 and 15,000 options yet to vest.
- 'Exercise all outstanding options including any options yet to vest' - to exercise every option in the agreement.
- 'Specify a number of options to exercise' - choose specifically how many options to exercise regardless of the vesting schedule.
'Registration Date' - the official date of entry into the shareholder register.
'Shares Sold or Sales Instructed?' - here you can either choose if the shares were sold on the same day or if the grantholder was given instructions on the sales of their options. Can be left blank.
'Taxable' - tick this for if the options falls under tax regulation.
'NOTE' - add any additional information about the exercise if applicable.
- 'Funding Rounds' - here you can choose your specific funding round for your exercise.
- “Add Document” - we recommend you to add a signed exercise agreement. You can also choose a section 431 election if convenient.
Once you have completed all the exercise details, click on 'Save Draft' or 'Publish' (if you are live).
To lapse / cancel:
To lapse the equity awards you need to click on the equity award -> action button on your specific stakeholder (far right button with the 3 dots) -> 'Register Offline Cancellation'.
After clicking on 'Register Offline Cancellation', you will be directed to the page where you input the lapse (cancellation) details.
'Cancellation reason' - reason for the lapse such as the grantholder leaving or the grandholder’s death. Please find a full list of the cancellation reasons here.
'Cancellation Date' - the date your options are lapsed.
Choose one of the three below:
- 'Cancel options yet to vest' - to lapse the amount of options that have not vested as of exercise date e.g. 15,000 options yet to vest as of 19/02/2019 and 5,000 options vested.
- 'Cancel all outstanding options including any vested options' - to lapse every option in the agreement regardless of the vesting schedule.
- 'Specify a number of options to lapse' - choose specifically how many options to lapse regardless of the vesting schedule.
'Money or Value Received' - tick this is if the grantholder has received anything of direct monetary value or anything that can be converted into money or direct monetary value.
'Note' - you will need to write a note explaining the cancellation e.g. the optionholder has left and decided to lapse all of his remaining options.
- 'Funding Round' - here you can choose your specific funding round for your lapse. You can find out more about how to create a funding round here.
- 'Add Document' - we recommend you to add a cancellation agreement.
Once you have completed all the cancellation details, click on 'Save Draft' or 'Publish' (if you are live).
You’ll then be redirected to the 'Options' page.
From here, you can then view your exercises and lapses by clicking on the stakeholders' transactions.
You'll then be able to view all your transactions including your exercises and lapses.
If you click on the transaction (Exercise), a side panel will appear with more information about the exercise.
If you click on the transaction (Cancellation), a side panel will appear with more information about the cancellation.
If you need further assistance, you can reach out to us by submitting a support ticket.