Stock Based Compensation

9 Months Ended

Jun. 30, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

Note 10 - Stock Based Compensation

The fair value of the stock options granted is estimated at the date of grant using the Black-Scholes option pricing model.

The expected volatility was determined with reference to the historical volatility of the Company's stock. The Company uses historical data to estimate option exercise and employee termination within the valuation model. The expected term of options granted represents the period of time that the options granted are expected to be outstanding. The risk-free interest rate for periods within the contractual life of the option is based on the U.S. Treasury rate in effect at the time of grant. The dividend yield is expected to be zero because historically the Company has not paid dividends on common stock.

The Company’s Xcede joint venture adopted an Equity Incentive Plan in 2013 which provides for, among other incentives, the granting to officers, directors, employees and consultants options to purchase shares in Xcede’s common stock. The options granted vest over a range from immediately to a period of five years. The fair value of the stock options granted is estimated at the date of grant using the Black-Scholes option pricing model using assumptions generally consistent with those used for the Company’s stock options. Because Xcede is not publicly traded, the expected volatility is estimated with reference to the average historical volatility of a group of publicly traded companies that are believed to have similar characteristics to Xcede.

 

Stock compensation expense for the three and nine months ended June 30, 2016 and 2015 is as follows:

	Three Months Ended		Three Months Ended
Stock Compensation Expense	June 30, 2016		June 30, 2015
Stock Grants	$	74,000	$	106,000
Restricted Stock Grants		13,000		7,000
Option Grants		12,000		6,000
Employee Stock Purchase Plan		1,000		1,000
Subsidiary Stock Grants		210,000		-
Subsidiary Option Grants		19,000		21,000
Total	$	329,000	$	141,000

	Nine Months Ended		Nine Months Ended
Stock Compensation Expense	June 30, 2016		June 30, 2015
Stock Grants	$	259,000	$	243,000
Restricted Stock Grants		33,000		21,000
Option Grants		29,000		10,000
Employee Stock Purchase Plan		2,000		3,000
Subsidiary Stock Grants		210,000		-
Subsidiary Option Grants		59,000		21,000
Total	$	592,000	$	298,000

At June 30, 2016 there was approximately $200,000 in unrecognized stock compensation cost for Dynasil, which is expected to be recognized over a weighted average period of fifteen months.

 

In June 2016, Xcede issued 239,000 shares of Xcede Common Stock to the Mayo Foundation for Medical Education and Research (“Mayo”) per the anti-dilution clause in the existing licensing agreement between Xcede and Mayo on the first $3.0 million dollars of financing raised by Xcede. In doing so, Xcede incurred a charge of $0.2 million in stock compensation expense for the third quarter 2016.

Restricted Stock Grants

A summary of restricted stock activity for the nine months ended June 30, 2016 is presented below:

Restricted Stock Activity for the Nine Months ended June 30, 2016	Shares		Weighted-Average Grant-Date Fair Value
Nonvested at September 30, 2015		27,000	$	1.04
Granted		100,000		1.73
Vested		(27,000)		1.04
Cancelled		-		-
Nonvested at June 30, 2016		100,000	$	1.73

Stock Option Grants

The weighted average assumptions used in the Black-Scholes option pricing model for the stock option grant during the nine months ended June 30, 2016 were as follows:

	Nine Months Ended June 30, 2016
Expected term in years		3 years
Risk-free interest rate		1.05	%
Expected volatility		78.53	%
Expected dividend yield		0.00	%

A summary of stock option activity for the nine months ended June 30, 2016 is presented below:

	Options Outstanding		Weighted Average Exercise Price per Share		Weighted Average Remain Contractual Term (in Years)
Balance at September 30, 2015		58,212	$	2.28		1.96
Outstanding and exercisable at September 30, 2015		58,212		2.28		1.96
Granted		64,935		2.33		2.59
Exercised		-		-
Cancelled		-		-
Balance at June 30, 2016		123,147		2.30		1.94
Outstanding and exercisable at June 30, 2016		123,147	$	2.30		1.94

Subsidiary Stock Option Grants

During the nine months ended June 30, 2016, 136,961 Xcede stock options were granted at an exercise price of $1.00 per share. These options vest over the next three years and expire ten years from the grant date. The weighted average assumptions for grants during the nine months ended June 30, 2016 used in the Black-Scholes option pricing model were as follows:

 

Expected term in years	10 years
Risk-free interest rate	1.94	%
Expected volatility	83.06	%
Expected dividend yield	0.00	%

A summary of Xcede stock option activity for the nine months ended June 30, 2016 is presented below:

	Options Outstanding		Weighted Average Exercise Price per Share		Weighted Average Remain Contractual Term (in Years)
Balance at September 30, 2015		780,258	$	1.00		8.85
Outstanding and exercisable at September 30, 2015		180,293		1.00		8.50
Granted		136,961		1.00
Exercised		-		-
Cancelled		(315,024)		1.00
Balance at June 30, 2016		602,195		1.00		8.57
Outstanding and exercisable at June 30, 2016		268,450	$	1.00		8.09

At June 30, 2016, the Company’s Xcede joint venture had $160,000 of unrecognized stock compensation expense associated with stock options expected to be recognized over a weighted average period of eighteen months and $13,500 of unrecognized stock compensation expense that begin to vest upon the attainment of specific capital raising targets.