Quarterly report pursuant to Section 13 or 15(d)

Share-Based Compensation

v3.20.1
Share-Based Compensation
9 Months Ended
Mar. 31, 2020
Share-Based Compensation  
Share-Based Compensation

13.   Share-Based Compensation

The following table summarizes the components of share-based compensation expense in the condensed consolidated statements of operations (in thousands):

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

March 31, 

 

    

2020

    

2019

Research and development

 

$

(5)

 

$

 6

General and administrative

 

 

68

 

 

43

Total

 

$

63

 

$

49

 

 

 

 

 

 

 

 

 

 

Nine Months Ended

 

 

March 31, 

 

    

2020

    

2019

Research and development

 

$

 7

 

$

22

General and administrative

 

 

161

 

 

160

Total

 

$

168

 

$

182

 

Stock Options:

2008 Omnibus Equity Incentive Plan (the “2008 Plan”)

On August 12, 2008, the Company adopted the iBioPharma 2008 Omnibus Equity Incentive Plan for employees, officers, directors and external service providers. The 2008 Plan provided that the Company may grant options to purchase stock and/or make awards of restricted stock. Stock options granted under the 2008 Plan were either incentive stock options (as defined by Section 422 of the Internal Revenue Code of 1986, as amended) or non-qualified stock options at the discretion of the Board of Directors. Vesting of service awards occurred ratably on the anniversary of the grant date over the service period, generally three or five years, as determined at the time of grant. Vesting of performance awards occurred when the performance criteria had been satisfied. The Company used historical data to estimate forfeiture rates. The 2008 Plan had a term of ten (10) years and, as a result, the 2008 Plan expired by its terms on August 12, 2018.

iBio, Inc. 2018 Omnibus Equity Incentive Plan (the "2018 Plan")

On December 18, 2018, the Company’s stockholders, upon recommendation of the Board of Directors on November 9, 2018, approved the 2018 Plan. On March 5, 2020 at the Company's 2019 Annual Meeting of Stockholders, the Company's stockholders approved an amendment to the 2018 Plan to increase the number of shares of common stock authorized for issuance thereunder from 3.5 million shares to 6.5 million shares and to incorporate changes to include restricted stock units and performance-based awards as grant types issuable under the 2018 Plan. The total number of shares of common stock reserved under the 2018 Plan is 6.5 million. Stock options granted under the 2018 Plan may be either incentive stock options (as defined by Section 422 of the Internal Revenue Code of 1986, as amended), non-qualified stock options, or restricted stock and determined at the discretion of the Board of Directors.

Vesting of service awards will be determined by the Board of Directors and stated in the award agreements. In general, vesting will occur ratably on the anniversary of the grant date over the service period, generally three or five years, as determined at the time of grant. Vesting of performance awards will occur when the performance criteria has been satisfied. The Company uses historical data to estimate forfeiture rates. The 2018 Plan has a term of ten (10) years and expires by its terms on November 9, 2028.

In addition, on December 18, 2018, the Company’s stockholders, upon recommendation of the Board of Directors, also approved an amendment to the Company’s 2008 Plan to allow the Company to permit a one-time option exchange program under which the Company would offer eligible employees and non-employee directors the opportunity to exchange certain outstanding options on a four-for-three basis for new stock options exercisable at a lower price under the 2018 Plan (the “Option Exchange”).

On January 22, 2019, the Company filed with the Securities and Exchange Commission a Tender Offer Statement on Schedule TO defining the terms and conditions of the Option Exchange, whereby the Company was offering eligible employees and non-employee directors (“Eligible Option Holders”) the opportunity to exchange for new options covering a lesser number of shares of the Company's common stock (“Replacement Options”), at a ratio of four-for-three (the “Exchange Ratio”), any options issued by the Company prior to January 22, 2019 that were outstanding under its 2008 Plan that had an exercise price greater than the closing price per share of iBio’s common stock on the NYSE American on the grant date of the Replacement Options (“Eligible Exchange Options”), so that for each four shares of common stock subject to an Eligible Exchange Option, the option holder would receive a Replacement Option to purchase three shares under the 2018 Plan. On February 20, 2019, the completion date of the Option Exchange (the “Replacement Option Grant Date”), the Company canceled the options accepted for exchange and granted 874,310 Replacement Options in exchange for 1,165,750 options issued under the 2008 Plan.

The Replacement Options:

·

have a per-share exercise price of $0.93, which was equal to the closing price per share of the Company’s common stock on the Replacement Option Grant Date;

·

have a five-year term beginning on February 20, 2019 and vest one year later on February 20, 2020. Generally, the Underwater Options had been scheduled to vest over four years following the recipient’s employment start date or the date of grant. As of November 19, 2018, approximately 94% of the shares covered by the Underwater Options already were vested. All other terms and conditions of the new stock options are generally consistent with the terms and conditions of iBio’s standard time-vesting stock option grants;

·

are of the same type of options as the surrendered options. Eligible Option Holders holding nonqualified stock options received Replacement Options in the form of nonqualified stock options and Eligible Option Holders holding incentive stock options received Replacement Options in the form of incentive stock options; and

·

have the terms and be subject to the conditions as provided for in the 2018 Plan and option award agreement.

In March 2020, the Company issued options to acquire 908,300 shares of common stock to various members of management and employees. The exercise price is $1.15 per share. The options vest over a four-year period and expire in ten years. On April 21, 2020, the Company issued to Thomas Isett ("Isett"), the Company's Chief Executive Officer (effective March 2020) and a director of the Company, options to acquire 975,000 shares of the Company's common stock at an exercise price of $0.8953 per share.  The options vest over a three-year period and expire in ten years.

The following table summarizes all stock option activity during Fiscal 2020:

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

    

 

 

    

Weighted-

    

 

 

 

 

 

 

Weighted-

 

average

 

 

 

 

 

 

 

average

 

Remaining

 

Aggregate

 

 

Stock

 

Exercise

 

Contractual

 

Intrinsic Value

 

 

Options

 

Price

 

Term (in years)

 

(in thousands)

Outstanding as of July 1 ,2019

 

1,346,519

 

$

1.45

 

6.1

 

$

 —

Issued

 

908,300

 

 

1.15

 

 

 

 

 

Exercised

 

(3,750)

 

 

0.93

 

 

 

 

 

Forfeited/expired

 

(93,146)

 

 

3.80

 

 

 

 

 

Outstanding as of March 31, 2020

 

2,157,923

 

$

1.22

 

7.2

 

$

171

Vested and, as of March 31, 2020, expected to vest

 

2,111,539

 

$

1.23

 

7.1

 

$

170

 

 

 

 

 

 

 

 

 

 

 

Exercisable as of March 31, 2020

 

899,289

 

$

1.42

 

3.5

 

$

115

 

The following table summarizes information about options outstanding and exercisable at March 31, 2020:

 

 

 

 

 

 

 

 

 

 

 

 

 

Options Outstanding and Exercisable

 

    

 

    

Weighted-

    

Weighted-

    

 

 

 

 

 

Average

 

Average

 

 

 

 

Number

 

Remaining Life

 

Exercise

 

Number

 

 

Outstanding

 

In Years

 

Price

 

Exercisable

Exercise prices:

 

  

 

  

 

 

  

 

  

$0.90 - $2.03

 

2,133,423

 

7.2

 

$

1.02

 

874,956

$2.53 - $4.00

 

1,166

 

3.5

 

 

3.37

 

999

$7.30 - $26.90

 

19,334

 

1.6

 

 

18.06

 

19,334

$28.90

 

4,000

 

1.2

 

 

28.90

 

4,000

 

 

2,157,923

 

7.2

 

$

1.22

 

899,289

 

The total fair value of stock options that vested during Fiscal 2020 was $242,000. As of March 31, 2020, there was approximately $1,030,000 of total unrecognized compensation cost related to non-vested stock options that the Company expects to recognize over a weighted-average period of 3.7 years.

The weighted-average grant date fair value of stock options granted during Fiscal 2020 was $0.99 per share. The Company estimated the fair value of options granted in Fiscal 2020 using the Black-Scholes option pricing model with the following assumptions:

 

 

 

 

 

Risk-free interest rate

    

0.66

%

Dividend yield

 

 —

%

Volatility

 

97.5

%

Expected term (in years)

 

 9

 

 

The aggregate intrinsic value in the table above represents the total intrinsic value, based on the Company’s closing stock price of $1.06 as of March 31, 2020, which would have been received by the option holders had all option holders exercised their options as of that date.

Restricted Stock Units (“RSU's”):

On March 27, 2020, the Company issued RSU's to acquire 41,150 shares of common stock to various employees at a market value of $1.15 per share. The RSU's vest over a four-year period. The grant-date fair value of the RSU's totaled approximately $47,000.