Quarterly report pursuant to Section 13 or 15(d)

STOCKHOLDERS' EQUITY

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STOCKHOLDERS' EQUITY
 6 Months Ended
Dec. 31, 2012
Stockholders' Equity Note Disclosure [Text Block]

NOTE C – STOCKHOLDERS’ EQUITY


Share-Based Compensation - Stock Options and Warrants


The Company accounts for options granted to employees by measuring the cost of services received in exchange for the award of equity instruments based upon the fair value of the award on the date of grant. The fair value of the award is then ratably recognized as expense over the period during which the recipient is required to provide services in exchange for that award. Options and warrants granted to consultants and other non-employees are recorded at fair value as of the grant date and subsequently adjusted to fair value at the end of each reporting period until such options and warrants vest, and the fair value of such instruments, as adjusted, is expensed over the related vesting period. Adjustments to fair value at each reporting date may result in income or expense, depending upon the estimate of fair value and the amount of expense recorded prior to the adjustment. On a basis not less frequently than quarterly, the Company reviews its agreements and the future performance obligation with respect to the unvested options or warrants for its consultants and other non-employees. When appropriate, the Company will expense the unvested options or warrants at the time when management deems the service obligation for future services has ceased.


On August 12, 2008, the Company adopted the iBioPharma 2008 Omnibus Equity Incentive Plan (the “Plan”) for employees, officers, directors, and external service providers. Under the provisions of the Plan, the Company may grant options to purchase stock and/or make awards of restricted stock up to an aggregate amount of 10,000,000 shares. At December 31, 2012, there were 3,340,000 shares of common stock reserved for future grant under the Plan. Options granted under the Plan may be either incentive stock options within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended, or non-statutory stock options at the discretion of the Board of Directors and as reflected in the terms of the written option agreement. Options granted under the Plan vest ratably at the end of each twelve month period and a three or five year period from the date of grant.


Stock-based compensation expense (credit) for options and warrants was recorded as follows


    Three Months Ended
December 31, 		    Six Months Ended
December 31, 		 
    2012     2011     2012     2011  
Research and development   $ (28,239 )   $ 38,457     $ 103,213     $ 23,188  
General and administrative     245,039       1,017,357       567,186       1,370,918  
Totals   $ 216,800     $ 1,055,814     $ 670,399     $ 1,394,106  

A summary of the changes in options outstanding during the six months ended December 31, 2012 is as follows:


    Number of
Shares 		    Weighted
Average
Exercise
Price
Per Share 		    Weighted
Average
Remaining
Contractual
Term (Years) 		    Aggregate
Intrinsic
Value 		 
Outstanding at June 30, 2012     5,510,000     $ 1.56       8.1     $ 493,800  
Granted     1,230,000     $ 1.05                  
Forfeited     (80,000 )   $ 1.55                  
Outstanding at December 31, 2012     6,660,000     $ 1.46       7.9     $ 316,600  
Expected to vest at December 31, 2012     6,633,340     $ 1.46       7.9     $ 316,600  
Options exercisable at December 31, 2012     3,803,992     $ 1.60       7.4     $ 274,600  

The weighted average fair value of options granted during the three and six months ended December 31, 2012 was $0.64 per share and $0.92 per share, respectively, on the date of grant using the Black-Scholes option-pricing model with the following assumptions:


    Three Months Ended
December 31, 		  Six Months Ended
December 31,
    2012   2011   2012   2011
Risk free interest rate   1.6% to 1.8%   1.1% to 2.2%   1.3 to 1.8%   1.1% to 2.2%
Dividend yield   None to None   None to None   None to None   None to None
Volatility   99.2% to 99.7%   94.8% to 96.8%   99.2% to 100.7%   94.8% to 96.8%
Expected term (in years)   9 to 9   5.5 to 9.0   9 to 9   5.5 to 9.0

The unrecognized compensation expense as of December 31 2012, approximately $2,498,000 of total compensation expense related to stock issued to date, is expected to be recognized over a weighted average period of approximately 3 years.


A summary of the changes in warrants outstanding during the six months ended December 31, 2012 is as follows:


    Number of
Shares 		    Weighted
Average
Exercise
Price
Per Share 		 
Outstanding at June 30, 2012     20,940,796     $ 1.39  
Granted     100,000     $ 1.00  
Outstanding at December 31, 2012     21,040,796     $ 1.39  
                 
Exercisable at December 31, 2012     21,040,796     $ 1.39  

The Company issued 100,000 fully vested warrants to a consultant for investor relations services in July 2012. The warrants have an exercise price of $1.00 per share and expire in two years. The fair value of the warrants was $0.33 per share on the date of grant using the Black-Scholes option-pricing model.