Cypress Bioscience (CYPB)

Warrants

In June 2005, upon execution of the license agreement with Organon, the Company issued Organon warrants to purchase 62,656 shares of common stock as a license fee. These warrants, which have an exercise price of $15.96 per share and expire in June 2010, were valued at $615,000 using the Black-Scholes valuation model and recorded as a non-cash compensation charge, classified as research and development expenses, during the second quarter of 2005 since the underlying technology still requires substantial development effort.

In May 2004, the Company issued an outside consultant warrants to purchase 50,000 shares of common stock as compensation for services provided. These warrants, which have an exercise price of $13.23 per share and expire in May 2007, were valued at $385,000 using the Black-Scholes valuation model and recorded as a non-cash compensation charge during the second quarter of 2004.

Warrants

On May 21, 2004, the Company issued an outside consultant warrants to purchase 50,000 shares of common stock as compensation for services provided. These warrants, which have an exercise price of $13.23 per share and expire in May 2007, were valued at $385,000 using the Black-Scholes valuation model and recorded as a non-cash compensation charge during the second quarter of 2004.