Equity

9 Months Ended

Jun. 30, 2021

Equity Plans

We provide long-term incentives to eligible officers, directors, and employees in the form of equity-based awards. We maintain three equity incentive compensation plans, collectively described as our “Equity Plans”:

•the 2010 Equity Incentive Plan,

•the 2012 Equity Incentive Plan, and

•the 2019 Equity Incentive Plan.

We issue new shares of common stock to satisfy awards issued under our Equity Plans. In March 2021, our shareholders approved the Amended and Restated EMCORE Corporation 2019 Equity Incentive Plan, which was adopted by the Company’s Board of Directors in December 2020 and increased the maximum number of shares of the Company’s common stock that may be issued or transferred pursuant to awards under the 2019 Equity Incentive Plan by an additional 2,138,000 shares.

Stock-Based Compensation

The effect of recording stock-based compensation expense was as follows:


By Award Type	For the three months ended June 30,				For the nine months ended June 30,
(in thousands)	2021		2020		2021		2020
Employee stock options	$	1	$	4	$	3	$	13
Restricted stock units and awards	573		403		1,505		1,331
Performance stock units and awards	403		255		989		910
Employee stock purchase plan	85		52		258		145
Outside director equity awards and fees in common stock	114		65		255		226
Total stock-based compensation expense	$	1,176	$	779	$	3,010	$	2,625


By Expense Type	For the three months ended June 30,				For the nine months ended June 30,
(in thousands)	2021		2020		2021		2020
Cost of revenue	$	220	$	166	$	564	$	504
Selling, general, and administrative	752		488		1,830		1,564
Research and development	204		125		616		557
Total stock-based compensation expense	$	1,176	$	779	$	3,010	$	2,625

401(k) Plan

We have a savings plan that qualifies as a deferred salary arrangement under Section 401(k) of the Internal Revenue Code. Under this savings plan, participating employees may defer a portion of their pretax earnings, up to the Internal Revenue Service annual contribution limit. Since June 2015, all employer contributions are made in cash. During each of the three

months ended June 30, 2021 and 2020, our matching contribution in cash was $0.2 million. During the nine months ended June 30, 2021 and 2020, our matching contribution in cash was $0.8 million and $0.7 million, respectively.

Income (Loss) Per Share

The following table sets forth the computation of basic and diluted net income (loss) per share:


	For the three months ended June 30,				For the nine months ended June 30,
(in thousands, except per share data)	2021		2020		2021		2020
Numerator:
Income (Loss) from continuing operations	$	13,615	$	(1,287)	$	20,568	$	(7,703)
Undistributed earnings allocated to common stock shareholders for basic and diluted net income (loss) per share	13,615		(1,287)		20,568		(7,703)
Denominator:
Denominator for basic net income (loss) per share - weighted average shares outstanding	36,768		29,295		33,069		29,052
Denominator for fully diluted net (income) loss per share - weighted average shares outstanding	38,893		29,295		34,777		29,052
Net income (loss) per basic share	$	0.37	$	(0.04)	$	0.62	$	(0.27)
Net income (loss) per fully diluted share	$	0.35	$	(0.04)	$	0.59	$	(0.27)

Weighted average antidilutive options, unvested restricted stock units and awards, unvested performance stock units and ESPP shares excluded from the computation	2,138		1,410		1,947		1,316

Basic earnings per share is computed by dividing net income (loss) for the period by the weighted-average number of common stock outstanding during the period. Diluted earnings per share is computed by dividing net income (loss) for the period by the weighted average number of common stock outstanding during the period, plus the dilutive effect of outstanding restricted stock units and awards, performance stock units, stock options, and shares issuable under the employee stock purchase plan as applicable pursuant to the treasury stock method. The anti-dilutive stock options and shares of outstanding and unvested restricted stock were excluded from the computation of net loss per share for the three and nine months ended June 30, 2020 due to the Company incurring a net loss for such periods.

Employee Stock Purchase Plan

We maintain an Employee Stock Purchase Plan (“ESPP”) which provides employees an opportunity to purchase common stock through payroll deductions. The ESPP is a 6-month duration plan with new participation periods beginning on approximately February 25 and August 26 of each year. The purchase price is set at 85% of the average high and low market price of our common stock on either the first or last trading day of the participation period, whichever is lower, and annual contributions are limited to the lower of 10% of an employee’s compensation or $25,000.

Public Offering

On February 16, 2021, we closed our offering of 6,655,093 shares of our common stock, which included the full exercise of the underwriters’ option to purchase 868,056 additional shares of common stock, at a price to the public of $5.40 per share, resulting in net proceeds to us from the offering, after deducting the underwriting discounts and commissions and other offering expenses, of approximately $33.1 million. The shares were sold by us pursuant to an underwriting agreement with Cowen and Company, LLC, dated as of February 10, 2021.

Future Issuances

As of June 30, 2021, we had common stock reserved for the following future issuances:


			Number of Common Stock Shares Available for Future Issuances
Exercise of outstanding stock options			19,869
Unvested restricted stock units and awards			1,851,187
Unvested performance stock units and awards (at 200% maximum payout)			1,934,000
Purchases under the ESPP			186,197
Issuance of stock-based awards under the Equity Plans			1,774,341
Purchases under the officer and director share purchase plan			88,741
Total reserved			5,854,335