Stock-Based Compensation Plans

3 Months Ended

Sep. 30, 2017

Equity [Abstract]

Stock-Based Compensation Plans

8. Stock-Based Compensation Plans

Stock Option Awards 

For the three months ended September 30, 2017 and 2016, the compensation cost that has been charged against income for the Company’s stock option plans was $625,293 and $(226,119), respectively, which in the three months ended September 30, 2016 included a charge to modify certain stock options of $60,747 and a reversal of stock compensation from prior periods due to forfeitures of unvested options of $597,196. As of September 30, 2017, there was approximately $5,914,614 of total unrecognized compensation cost related to non-vested share-based compensation arrangements to be recognized over a weighted-average period of 3.0 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 is not expected to do so in the near term.

The weighted average fair value at date of grant for options granted during the three months ended September 30, 2017 was $5.48. There were no options granted during the three months ended September 30, 2016. There were options to purchase 172,500 shares granted during the three months ended September 30, 2017. The fair value was estimated based on the weighted average assumptions of:

	For three months ended September 30,
	2017			2016
Risk-free interest rates		1.86	%		—
Expected option life in years		5.72			—
Expected stock price volatility		59.52	%		—
Expected dividend yield		0	%		—

A summary of option activity under the Company’s equity plans as of September 30, 2017, and changes during the three months ended September 30, 2017 is presented below:

	Outstanding Shares			Average Exercise Price		Aggregate Intrinsic Value
Outstanding as of June 30, 2017		1,191,236		$	7.66	$	2,748,956
Granted		172,500		$	9.99
Exercised		(8,500	)	$	6.61
Forfeited		(7,500	)	$	7.29
Expired		—		$	—
Outstanding as of September 30, 2017		1,347,736		$	7.97	$	3,358,085
Vested and exercisable at September 30, 2017		612,984		$	6.54	$	2,427,225

The total fair value of shares vested during the three months ended September 30, 2017 was $534,644. The number and weighted-average grant-date fair value of non-vested stock options at the beginning of fiscal 2017 was 673,875 and $4.77, respectively. The number and weighted-average grant-date fair value of stock options which vested during the three months ended September 30, 2017 was 106,623 and $5.01, 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 $3.4 million and compensation expense recorded in the three months ended September 30, 2017 related to these awards was $226,934.