Stock-Based Compensation Plans

9 Months Ended

Mar. 31, 2020

Equity [Abstract]

Stock-Based Compensation Plans

10. Stock-Based Compensation Plans

Stock Option Awards

For the three and nine months ended March 31, 2020 and 2019, the compensation cost relating to stock option awards that has been charged against income for the Company's stock option plans, excluding the compensation cost for restricted stock, was $359,917 and $263,474, and $862,275 and $896,730, respectively. As of March 31, 2020, there was approximately $3.5 million of total unrecognized compensation cost related to non-vested share-based compensation arrangements to be recognized over a weighted-average period of 2.9 years.

Stock options typically expire 10 years from the date of grant and vest over service periods, which typically are 4 years. All options are granted at fair market value, as defined in the applicable plans. 

The fair value of each option award was estimated on the date of grant using the Black-Scholes option valuation model that uses the assumptions noted in the following table. The expected volatility represents the historical price changes of the Company's stock over a period equal to that of the expected term of the option. The Company uses the simplified method for determining the option term. The risk-free rate was based on the U.S. Treasury yield curve in effect at the time of grant. The expected dividend yield is based upon historical and projected dividends. The Company has historically not paid dividends, and it does not expect to do so in the near term.

There were options to purchase 185,500 and 255,000 shares granted during the nine months ended March 31, 2020 and 2019, respectively. The fair value was estimated based on the weighted average assumptions of: 

	For the nine months ended
	March 31,
	2020			2019
Risk-free interest rates		1.67	%		2.80	%
Expected option life in years		6.25			6.25
Expected stock price volatility		54.69	%		56.01	%
Expected dividend yield		0	%		0	%

A summary of option activity under the Company's equity plans as of March 31, 2020, and changes during the nine months ended March 31, 2020 is presented below:

	Options
				Weighted
				Average		Aggregate
	Outstanding			Exercise		Intrinsic
	Shares			Price		Value
Outstanding as of June 30, 2019		1,163,856		$	10.28	$	17,617,231
Granted		185,500			21.41
Exercised		(143,125	)		8.28
Forfeited		(47,500	)		13.99
Expired		-			-
Outstanding as of March 31, 2020		1,158,731		$	12.16	$	1,002,250
Vested and exercisable at March 31, 2020		686,854		$	9.19	$	947,053

The total fair value of stock options vested during the nine months ended March 31, 2020 was $1,076,997. The number and weighted-average grant-date fair value of non-vested stock options at March 31, 2020 was 471,877 and $8.94, respectively. The number and weighted-average grant-date fair value of stock options which vested during the nine months ended March 31, 2020 was 173,249 and $6.22, respectively.

Restricted Stock Awards

On December 15, 2016, the Company issued 400,000 shares of restricted stock to its Chief Executive Officer. These awards vest over a period of up to five years, subject to meeting certain service, performance and market conditions. These awards were valued at approximately $3.6 million. Compensation expense recorded in the three and nine months ended March 31, 2020 and 2019 related to these awards was $122,286 and $121,114, and $369,664 and $992,445, respectively. As of March 31, 2020, there was approximately $764,079 of total unrecognized compensation cost related to non-vested restricted stock awards to be recognized over a weighted-average period of 1.6 years. The awards contain a combination of vesting terms that include time vesting, performance vesting relating to revenue achievement, and market vesting related to obtaining certain levels of Company stock prices. At March 31, 2020, the Company has estimated that it is probable that the performance conditions will be met. The awards were valued using a Monte Carlo valuation model using a stock price at the date of grant of $9.60, a term of 3 to 5 years, a risk-free interest rate of 1.6% to 2.1% and a volatility factor of 66.5%. As of March 31, 2020, 213,400 shares from this set of awards have vested.