Quarterly report pursuant to Section 13 or 15(d)

STOCKHOLDERS' EQUITY

v2.4.0.6
STOCKHOLDERS' EQUITY
 3 Months Ended
Sep. 30, 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 that 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. The Company reviews its agreements and the future performance obligation with respect to the unvested options or warrants for its vendors or consultants. 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, or 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. There are 3,420,000 options available for future issuance 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 for options and warrants was recorded as follows:


 

 

 

 

 

 

 

 

 

 

Three Months
Ended September 30,

 

 

 

 

 

 

2012

 

2011

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

$

131,452

 

$

(15,270

)

General and administrative

 

 

322,147

 

 

321,585

 

 

 

 

 

Totals

 

$

453,599

 

$

306,315

 

 

 

 

 


A summary of the changes in options outstanding during the three months ended September 30, 2012 is as follows:


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of
Shares

 

Weighted
Average
Exercise
Price
Per Share

 

Weighted
Average
Remaining
Contractual
Term
(Years)

 

Aggregate
Intrinsic
Value

 

 

 

 

 

 

 

 

 

Outstanding and expected to vest at June 30, 2012

 

 

5,510,000

 

$

1.56

 

 

8.1

 

$

493,800

 

Granted

 

 

1,070,000

 

$

1.10

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Outstanding and expected to vest at September 30, 2012

 

 

6,580,000

 

$

1.48

 

 

8.2

 

$

1,031,300

 

 

 

 

 

 

 

 

 

 

 

 

 

Options exercisable at September 30, 2012

 

 

3,770,599

 

$

1.60

 

 

7.6

 

$

826,487

 

 

 

 

 

 

 

 

 

 

 

 

 


The weighted average fair value of options granted during the three months ended September 30, 2012 was $0.96 per share on the date of grant using the Black-Scholes option-pricing model with the following assumptions:


 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

 

 

 

 

2012

 

 

2011

 

 

 

 

 

 

 

 

Minimum

 

Maximum

 

 

 

 

Risk free interest rate

 

 

1.4

%

 

 

 

2.0%

 

3.0%

Dividend yield

 

 

None

 

 

None

 

 

 

 

Volatility

 

 

100.8

%

 

 

 

94.8%

 

95.3%

Expected term (in years)

 

 

9

 

 

 

 

8.6

 

8.8


The unrecognized compensation expensation expense as of September 30, 2012, approximately $2,853,000 of total expenses 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 three months ended September 30, 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 September 30, 2012

 

 

21,040,796

 

$

1.39

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercisable at September 30, 2012

 

 

21,040,796

 

$

1.39

 

 

 

 

 


The Company issued 100,000 fully vested warrants to a consultant for investor relation 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.