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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In addition, share-based compensation expense included in loss from discontinued operations totaled approximately $1,528,000 and $419,000 for the years ended June 30, 2023 and 2022, respectively.

Stock Options

iBio, Inc. 2020 Omnibus Equity Incentive Plan (the “2020 Plan”)

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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 is 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, 2023 were as follows:

During the first quarter of Fiscal year 2023, the Company granted stock option agreements to various employees to purchase 303,869 shares of the Common Stock at exercise prices between $6.75 and $9.50 per share. The options vest 25% after one year and then in equal quarterly installments over a 36-month period and expire on the tenth anniversary of the grant date.

During the first quarter of Fiscal year 2023, the Company granted a stock option agreement to a consultant to purchase 4,000 shares of the Common Stock at an exercise price of $6.75 per share. The option vests in equal monthly installments, over a period of 12 months, starting after the second month and expire on the tenth anniversary of the grant date.  During the third quarter of Fiscal year 2023, the Company terminated the consultant’s services.  As a result, none of the 4,000 shares pursuant to the stock option agreement were exercised and as such, all 4,000 shares will be forfeited.  

Issuances of stock options during the year ended June 30, 2022 were as follows:

During the first quarter of Fiscal Year 2022, the Company granted stock option agreements to various employees to purchase 165,488 shares of the Common Stock at exercise prices between $26.50 and $33.75 per share. The options vest

25% after one year and then in equal quarterly installments over a 36-month period and expire on the tenth anniversary of the grant date.

During the first quarter of Fiscal year 2022, 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 option vests monthly over a period of three years and expires on the tenth anniversary of the grant date.

During the first quarter of Fiscal year 2022, 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 vests in equal monthly installments over a 36-month period following the grant date.

During the second quarter of Fiscal year 2022, 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 option vests over a period of eight months commencing in April 2022 and expires on the tenth anniversary of the grant date.

During the second quarter of Fiscal year 2022, 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.

During the third quarter of Fiscal year 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.

During the third quarter of Fiscal year 2022, the Company granted a stock option agreement to various employees to purchase 24,000 shares of Common Stock at exercise prices between $8.50 and $11.50 per share. The options vest 25% after one year and then in equal quarterly installments over a 36-month period and expire on the tenth anniversary of the grant date.

The following table summarizes all stock option activity during the years ended June 30, 2023 and 2022:

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The following table summarizes information about options outstanding and exercisable at June 30, 2023:

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The total fair value of stock options that vested during 2023 and 2022 was approximately $4,828,000 and $3,334,000, respectively. The total cash received for stock options that were exercised during 2023 and 2022 was approximately $0 and $77,000, respectively. The total intrinsic value of stock options that were exercised during 2023 and 2022 was approximately $0 and $19,000, respectively. As of June 30, 2023, there was approximately $2,193,000 of total unrecognized compensation cost related to non-vested stock options that the Company expects to recognize over a weighted-average period of 2.3 years.

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The weighted-average grant date fair value of stock options granted during 2023 and 2022 was $6.30 and $23.25 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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The aggregate intrinsic value in the table above represents the total intrinsic value, based on the Company’s closing stock price of $0.61 as of June 30, 2023 and $6.50 as of June 30, 2022, which would have been received by the option holders had all option holders exercised their options as of that date.

Restricted Stock Units (“RSUs”):

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Issuances of RSUs during the year ended June 30, 2023 were as follows:

On August 29, 2022, the Company issued RSUs to acquire 6,954 shares of common stock to various employees at a market value of $7.06 per share.  The RSUs vest over a four-year period.  The grant date fair value of the RSUs totaled approximately $49,000.

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On November 10, 2022, as previously disclosed in relation to the Employment Agreement with Mr. Isett, the Company’s former CEO, dated April 30, 2021, the Company granted Mr. Isett RSUs to acquire 200,000 shares of Common Stock.  The RSUs vest over a three-year period commencing April 30, 2021 provided the vesting is subject to the following performance conditions: (i) submission to the U.S. Food and Drug Administration (FDA) of an Investigational New Drug (IND) application, or alternatively, if the Board approves not to file an IND, (ii) consummation of a disposition of iBio CDMO, LLC, or (iii) out-licensing, with full global rights, any of its investigational product candidates prior to the submission to the FDA an IND application.  The grant-date fair value of the RSUs totaled approximately $296,000. The performance conditions were not met and the RSUs did not vest.

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On November 11, 2022, the Board of the Company granted Mr. Robert Lutz, the Company’s Chief Financial and Business Officer at the time, RSUs to acquire 100,057 shares of the Company’s Common Stock in exchange for Mr. Lutz’s agreement to continue employment with the Company through July 1, 2023.  The RSUs vest the earlier of: (i) July 1, 2023, or (ii) the successful achievement of the Company’s 2023 objectives, as defined by the Board. The grant-date fair value of the RSUs totaled approximately $175,100. Mr. Lutz resigned from the Company and was no longer an employee of the Company effective February 10, 2023; accordingly, the RSUs did not vest.

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On November 11, 2022, the Board of the Company granted Dr. Martin Brenner, the Company’s Chief Scientific Officer, RSUs to acquire 95,348 shares of the Company’s Common Stock in exchange for Mr. Brenner’s agreement to continue employment with the Company through July 1, 2023.  The RSUs vest the earlier of: (i) July 1, 2023, or (ii) the successful achievement of the Company’s 2023 objectives, as defined by the Board. The grant-date fair value of the RSUs totaled approximately $167,000.

On January 20, 2023, the Board of the Company appointed Dr. Brenner to the position of Interim Chief Executive Officer, effective immediately. Dr. Brenner was granted RSUs to acquire 130,000 shares of the Company’s Common Stock, which RSUs shall vest pro rata over a 12-month period, such vesting to terminate if Dr. Brenner is no longer the Company’s Interim Chief Executive Officer. The grant-date fair value of the RSUs totaled approximately $91,000. Upon appointment of Dr. Brenner to permanent Chief Executive Officer on June 22, 2023, 75,833 of the RSUs terminated and did not vest.

On March 31, 2023, the Compensation Committee (the “Committee”) of the Board of the Company approved a special equity award program pursuant to which it awarded to its employees an aggregate of 225,000 RSUs under the Company’s 2020 Omnibus Equity Incentive Plan, as amended (the “Plan”), which awards included a grant of 50,000 and 37,500 restricted stock units to each of Dr. Brenner, and Felipe Duran, the Company’s Interim, Chief Financial Officer, respectively, vesting quarterly over 12 months commencing April 1, 2023. The grant-date fair value of the RSUs totaled approximately $468,000.

On June 26, 2023, the Board of the Company granted Dr. Brenner RSUs to acquire 75,833 shares of the Company’s Common Stock, which RSUs shall vest pro rata over a seven-month period.  The grant-date fair value of the RSUs totaled approximately $52,000.

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.

As of June 30, 2023, there was approximately $445,000 of total unrecognized compensation cost related to non-vested RSUs that the Company expects to recognize over a weighted-average period of 0.8 years.