Secondary Transactions – Exercising Options into Certificates
Options are usually given to employees and shareholders of the company. The holder of the option can buy and sell the company’s shares.
Eqvista allows you to exercise options into equities easily on its platform. Here is how you can do it.
Step 1: Log into your Eqvista account and select your company account to exercise options.
You will then reach the company’s dashboard. From here, click on “Securities” from the left-hand side and click on “Options”.
Step 2: Then, you will be redirected to the following page.
Note: On this page, click on “Create New Class” to create an option class and if you have created one, you can issue options and implement a vesting schedule.
Then, you will see all the option pools created as shown below. Click on the option pool that you want to convert to stock. In this case, we will click on “Option Pool 2”.
Step 3: On this page, you will see the number of shares issued under this option pool. In this case, we have one.
Select the option name “OP2-001” to exercise them.
Step 4: Once you click on this, you will be redirected to the next page where you can see all the details of the option issued.
From here, click on the button that states “Actions” on the top right-hand side of the page. A mini drop-down menu will appear, and select “Exercise to equity”.
Step 5: After you have done this, a new panel will appear. The first thing that you need to do is choose if it is a partial or full exercise. The exercise price will automatically be used for the conversion to shares.
In this case, we have selected the full exercise and the equity class to where the shares would be given. Then, the exercise date and exercise grant name will be automatically filled. If the exercise date is not today, then you can edit it.
Note: You can also partially exercise the options issued to you by clicking “Partial Exercise”. Check out the support article to learn how to partially exercise options.
Once done, click on “Submit Exercise”.
Step 6: Then, you will be redirected to the secondary transaction details, and click on the grant name to view the exercised option.
Step 7: With this done, you will be redirected to the page where the option has been exercised in the name “Exer from OP2-001”.
Note: You can add document to the grant by clicking on “Add Document”. Check out the support article to know more about adding documents to grants.
But to see the effect of this on the secondary transaction part of the cap table, you will have to follow the next step.
Step 8: To see the secondary transactions table, click on “Cap table” and from the drop-down menu click on “Secondary transactions”. With this, you will reach the following page.
From here you can see under the tab “Exercises” that the conversion has been posted to the list and all the details updated as well.
Exercise Using Spreadsheet
Step 9: Suppose you want to perform exercise using the spreadsheet feature. At the top of the table, click on “Option Grants”. Under the Secondary Transaction section, the first one is “Secondary Transaction” which provides the different options to choose from. Once you select “Exercise” from the drop-down menu, enter the date, amount, receiving equity class, and grant name.
After adding the details, click on “Check Data”. If you want to cancel the process, click “Discard all Changes”.
Step 10: Once your details have been checked, a data validation message will appear: either the entered details are correct and you can save them, or some information may be missing or incorrect.
When there are some issues or missing information, the validation message will appear in “Red” along with the details of the issue.
Once the details have been checked, click on “Save”.
Step 11: The record of the exercise can be seen by clicking “Cap Table” on the left side to get a drop-down menu and selecting “Secondary Transactions”. On this page, click on “Exercises” to verify if the grant is exercised.
Just like this, you can easily exercise options into shares. To know more about how to use the Eqvista application, check out the support articles here!
