| Share-Based Compensation |
19. Share-Based Compensation
The following table summarizes the components of share-based compensation expense in the Consolidated Statements of Operations (in thousands):
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|
|
|
|
Year Ended |
|
|
June 30, |
|
|
2022 |
|
2021 |
Research and development |
|
$ |
573 |
|
$ |
185 |
General and administrative |
|
|
3,804 |
|
|
1,401 |
Total |
|
$ |
4,377 |
|
$ |
1,586 |
Stock Options
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 140,000 shares to 260,000 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 was 260,000. Stock options granted under the 2018 Plan could 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 was determined by the Board of Directors and stated in the award agreements. In general, vesting 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 was satisfied. The Company used historical data to estimate forfeiture rates. The 2018 Plan was terminated with the adoption of the iBio, Inc. 2020 Omnibus Equity Incentive Plan (see below).
iBio, Inc. 2020 Omnibus Equity Incentive Plan (the “2020 Plan”)
On December 9, 2020, the Company adopted the 2020 Plan for employees, officers, directors and external service providers. The total number of shares of Common Stock reserved under the 2020 Plan is 1,280,000 shares of Common Stock for issuance pursuant to the grant of new awards under the 2020 Plan. The 2020 Plan allows for the award of stock options, stock appreciation rights, restricted stock, restricted stock units, unrestricted stock, cash-based awards, and dividend equivalent rights. The value of all awards awarded under the 2020 Plan and all other cash compensation paid by the Company to any non-employee director in any calendar year may not exceed $500,000; provided, however, that such amount shall be $750,000 for the calendar year in which the applicable non-employee director is initially elected or appointed to the Board of Directors and $1,500,000 for any non-executive chair of our Board of Directors should one be appointed. Notwithstanding the foregoing, the independent members of the Board of Directors may make exceptions to such limits in extraordinary circumstances. The term of the 2020 Plan will expire on the tenth anniversary of the date the Plan is approved by the stockholders.
Vesting of service awards are determined by the Board of Directors and stated in the award agreements. In general, vesting occurs 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 occurs when the performance criteria is satisfied. The Company uses historical data to estimate forfeiture rates.
Issuances of stock options during the year ended June 30, 2022 were as follows:
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● |
On July 12, 2021, the Company granted a stock option agreement to an employee to purchase 1,000 shares of Common Stock at an exercise price of $33.75 per share. The options vest over a period of three years and expire on the tenth anniversary of the grant date.
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● |
On July 19, 2021, the Company granted a stock option agreement to an employee to purchase 1,000 shares of Common Stock at an exercise price of $33.25 per share. The options vest over a period of three years and expire on the tenth anniversary of the grant date.
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● |
On August 23, 2021, the Company granted a stock option agreement to a new member of its Board of Directors to purchase 4,000 shares of Common Stock at an exercise price of $31.50 per share. The options vest over a period of three years and expire on the tenth anniversary of the grant date.
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● |
On August 23, 2021, the Company granted stock option agreements to various employees to purchase an aggregate of 157,488 shares of Common Stock at an exercise price of $31.50 per share. The options vest over a period of three years and expire on the tenth anniversary of the grant date.
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● |
On September 13, 2021, the Company granted a stock option agreement to an employee to purchase 2,000 shares of Common Stock at an exercise price of $29.00 per share. The options vest over a period of three years and expire on the tenth anniversary of the grant date.
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● |
On September 23, 2021, the Board of Directors approved an option grant award to Mr. Isett to purchase 80,000 shares of Common Stock with an exercise price of $29.25, which vest in equal monthly installments over a 36-month period following the grant date.
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● |
On September 30, 2021, the Company granted a stock option agreement to an employee to purchase 4,000 shares of Common Stock at an exercise price of $26.50 per share. The options vest over a period of three years and expire on the tenth anniversary of the grant date.
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● |
On November 29, 2021, the Company granted a stock option agreement to a consultant to purchase 4,000 shares of Common Stock at an exercise price of $21.25 per share. The options vest over a period of eight months commencing in April 2022 and expire on the tenth anniversary of the grant date.
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● |
On December 9, 2021, the Company granted stock option agreements to various directors to purchase an aggregate of 34,880 shares of Common Stock at an exercise price of $17.25 per share. The options vest over a period of one year commencing in January 2022 and expire on the tenth anniversary of the grant date.
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● |
On January 16, 2022, the Company granted stock option agreements to two consultants to purchase an aggregate of 1,200 shares of Common Stock at an exercise price of $13.00 per share. The options vest over a period of 12 months and expire on the tenth anniversary of the grant date.
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● |
On February 21, 2022, the Company granted a stock option agreement to an employee to purchase 16,000 shares of Common Stock at an exercise price of $8.50 per share. The options vest over a period of three years and expire on the tenth anniversary of the grant date.
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● |
On March 28, 2022, the Company granted stock option agreements to two employees to purchase an aggregate of 8,000 shares of Common Stock at an exercise price of $11.50 per share. The options vest over a period of three years and expire on the tenth anniversary of the grant date.
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Issuances of stock options during 2021 were as follows:
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● |
On October 14, 2020, the Company granted three new members of its Board of Directors stock option agreements under the 2018 Plan whereby each director has the option to purchase up to 4,000 shares of the Company's common stock at an exercise price of $51.25 per share. The options vest over a period of three years and expire on the tenth anniversary of the grant date;
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● |
Effective December 1, 2020, the Company granted an officer a stock option agreement under the 2018 Plan whereby the officer has the option to purchase 18,600 shares of the Company's common stock at an exercise price of $36.25 per share. The option expires on the tenth anniversary of the grant date and vests as follows: (1) 25% of the option granted will vest after one year of employment with the Company; and (2) after one year of employment with the Company, 6.25% of the option granted will vest for each additional three (3) months of employment;
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● |
On January 15, 2021, the Company granted two consultants stock option agreements for each to purchase 600 shares of the Company's common stock at an exercise price of $36.75 per share. The options expire on the tenth anniversary of the grant date and vest over a one-year period;
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● |
Effective January 18, 2021, the Company granted an officer and an employee stock option agreements whereby the officer and employee have the option to purchase an aggregate of 24,000 shares of the Company's common stock at an exercise price of $36.75 per share. The options expire on the tenth anniversary of the grant date and vest as follows: (1) 25% of the options granted will vest after one year of employment with the Company; and (2) after one year of employment with the Company, 6.25% of the options granted will vest for each additional three (3) months of employment;
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● |
Effective March 4, 2021, the Company granted an officer a stock option agreement whereby the officer has the option to purchase 14,000 shares of the Company's common stock at an exercise price of $35.75 per share. The option expires on the tenth anniversary of the grant date and vest as follows: (1) 25% of the option granted will
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vest after one year of employment with the Company; and (2) after one year of employment with the Company, 6.25% of the option granted will vest for each additional three (3) months of employment;
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● |
On April 30, 2021, the Company granted an officer a stock option agreement whereby the officer has the option to purchase 120,000 shares of the Company's common stock at a price of $34.25 per share. The option expires on the tenth anniversary of the grant date and vest as follows: (1) 25% of the option granted will vest after one year of employment with the Company; and (2) after one year of employment with the Company, 6.25% of the option granted will vest for each additional three (3) months of employment;
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● |
In May 2021, the Company granted stock option agreements to various employees, to purchase an aggregate of 10,800 shares of the Company's common stock at exercise prices of $32.25 to $41.25 per share. The options expire on the tenth anniversary of the grant date and vest as follows: (1) 25% of the options granted will vest after one year of employment with the Company; and (2) after one year of employment with the Company, 6.25% of the options granted will vest for each additional three (3) months of employment;
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● |
In June 2021, the Company granted stock option agreements to a new member of its Board of Directors and one employee, to purchase an aggregate of 9,000 shares of the Company's common stock at exercise prices of $35.25 to $39.25 per share. The options expire on the tenth anniversary of the grant date and vest as follows: (1) 25% of the options granted will vest after one year; and (2) after one year, 6.25% of the options granted will vest for each additional three (3) months.
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The following table summarizes all stock option activity during the years ended June 30, 2022 and 2021:
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Weighted- |
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Weighted- |
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average |
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average |
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Remaining |
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Aggregate |
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Stock |
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Exercise |
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Contractual |
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Intrinsic Value |
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Options |
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Price |
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Term (in years) |
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(in thousands) |
Outstanding as of July 1, 2020 |
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139,031 |
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$ |
29.50 |
|
8.2 |
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$ |
4,042 |
Granted |
|
209,600 |
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|
36.00 |
|
— |
|
|
— |
Exercised |
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(2,147) |
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|
25.50 |
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— |
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|
— |
Forfeited/expired |
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(4,798) |
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|
61.25 |
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— |
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— |
Outstanding as of June 30, 2021 |
|
341,686 |
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$ |
32.75 |
|
8.8 |
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$ |
1,995 |
As of June 30, 2020, vested and expected to vest |
|
340,814 |
|
$ |
32.75 |
|
8.3 |
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$ |
1,988 |
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Exercisable as of June 30, 2021 |
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77,338 |
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$ |
27.75 |
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6.4 |
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$ |
890 |
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Outstanding as of June 30, 2021 |
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341,686 |
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$ |
32.75 |
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8.8 |
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$ |
1,995 |
Granted |
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313,568 |
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|
27.50 |
|
— |
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|
— |
Exercised |
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(3,380) |
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22.75 |
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— |
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— |
Forfeited/expired |
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(30,068) |
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35.00 |
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— |
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— |
Outstanding as of June 30, 2022 |
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621,806 |
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$ |
30.00 |
|
8.3 |
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$ |
— |
As of June 30, 2021, vested and expected to vest |
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197,404 |
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$ |
30.00 |
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8.3 |
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$ |
— |
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Exercisable as of June 30, 2022 |
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620,810 |
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$ |
29.25 |
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6.7 |
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$ |
— |
The following table summarizes information about options outstanding and exercisable at June 30, 2022:
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Options Outstanding and Exercisable |
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Weighted- |
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Weighted- |
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Average |
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Average |
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Number |
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Remaining Life |
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Exercise |
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Number |
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Outstanding |
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In Years |
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Price |
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Exercisable |
Exercise prices: |
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$8.50 - $13.00 |
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25,200 |
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9.7 |
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$ |
9.75 |
|
500 |
$17.25 - $26.00 |
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112,662 |
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6.4 |
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21.00 |
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85,152 |
$26.50 - $39.75 |
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463,791 |
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8.6 |
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32.50 |
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101,932 |
$41.25 - $62.00 |
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20,000 |
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8.3 |
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|
47.25 |
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9,667 |
$63.25 - $95.00 |
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20 |
|
5.9 |
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|
63.25 |
|
20 |
$182.50 - $273.75 |
|
133 |
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0.4 |
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|
182.50 |
|
133 |
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|
|
|
|
|
|
|
|
|
|
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621,806 |
|
8.3 |
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$ |
28.31 |
|
197,404 |
The total fair value of stock options that vested during 2022 and 2021 was approximately $3,334,000 and $911,000, respectively. The total cash received for stock options that were exercised during 2022 and 2021 was approximately $77,000 and $54,000, respectively. The total intrinsic value of stock options that were exercised during 2022 and 2021 was approximately $19,000 and $165,000, respectively. As of June 30, 2022, there was approximately $9,962,000 of total unrecognized compensation cost related to non-vested stock options that the Company expects to recognize over a weighted-average period of 2.7 years.
The weighted-average grant date fair value of stock options granted during 2022 and 2021 was $23.25 and $31.25 per share, respectively. The Company estimated the fair value of options granted using the Black-Scholes option pricing model with the following assumptions:
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2022 |
|
2021 |
Weighted average risk-free interest rate |
|
|
0.80% - 2.52 |
% |
|
0.39 - 1.02 |
% |
Dividend yield |
|
|
0 |
% |
|
0 |
% |
Volatility |
|
|
119.16 - 120.34 |
% |
|
119.46 - 126.55 |
% |
Expected term (in years) |
|
|
6 |
|
|
6 |
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The aggregate intrinsic value in the table above represents the total intrinsic value, based on the Company’s closing stock price of $6.50 as of June 30, 2022 and $37.75 as of June 30, 2021, which would have been received by the option holders had all option holders exercised their options as of that date.
Restricted Stock Units (“RSUs”):
Issuances of RSUs during the year ended June 30, 2022 were as follows:
On August 23, 2021, the Company issued RSUs to acquire 4,229 shares of Common Stock to various employees at a market value of $31.50 per share. The RSUs vest over a four-year period. The grant-date fair value of the RSUs totaled approximately $133,000.
Issuances of RSUs during the year ended June 30, 2021 were as follows:
Effective December 1, 2020, the Company issued RSUs to acquire 12,360 shares of common stock to an officer at a market value of $36.25 per share. The RSUs vest in even increments on the first three anniversaries of the grant date. The grant-date fair value of the RSUs totaled approximately $448,000.
Effective January 18, 2021, the Company issued RSUs to acquire 2,600 shares of common stock to an employee at a market value of $36.75 per share. The RSUs vest in even increments on the first three anniversaries of the grant date. The grant-date fair value of the RSUs totaled approximately $96,000.
Effective March 4, 2021, the Company issued RSUs to acquire 9,280 shares of common stock to an officer at a market value of $35.75 per share. The RSUs vest in even increments on the first three anniversaries of the grant date. The grant-date fair value of the RSUs totaled approximately $332,000.
On April 30, 2021, the Company entered into a new employment agreement with an officer. The new employment agreement provides that the Compensation Committee will establish certain performance criteria and thereafter the officer will receive a grant of 200,000 performance RSUs, which will also vest subject to achievement of pre-defined performance criteria to be established by the Compensation Committee.
On May 4, 2021, the Company issued RSU’s to acquire 1,600 shares of common stock to an employee at a market value of $32.25 per share. The RSU’s vest over a four-year period. The grant-date fair value of the RSUs totaled approximately $52,000.
As of June 30, 2022, there was approximately $561,000 of total unrecognized compensation cost related to non-vested RSUs that the Company expects to recognize over a weighted-average period of 1.6 years.
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