Stock-Based Compensation Plans

9 Months Ended

Mar. 31, 2018

Equity [Abstract]

Stock-Based Compensation Plans

8. Stock-Based Compensation Plans

Stock Option Awards

For the nine months ended March 31, 2018 and 2017, the compensation cost relating to stock option awards that has been charged against income for the Company’s stock option plans was $1,405,152 and $532,341 respectively, which included a charge to modify certain stock options of $81,765 and a reversal of stock compensation from prior periods due to forfeitures of unvested options of $616,239, for the nine months ended March 31, 2017. As of March 31, 2018, there was approximately $2,703,462 of total unrecognized compensation cost related to non-vested share-based compensation arrangements to be recognized over a weighted-average period of 2.6 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 nine months ended March 31, 2018 was $5.50. There were options to purchase 305,500 and 327,500 shares granted during the nine months ended March 31, 2018 and 2017, respectively. The fair value was estimated based on the weighted average assumptions of:

	For nine months ended March 31,
	2018			2017
Risk-free interest rates		1.98	%		1.80	%
Expected option life in years		5.95			6.25
Expected stock price volatility		57.42	%		54.68	%
Expected dividend yield		0	%		0	%

A summary of option activity under the Company’s equity plans as of March 31, 2018, and changes during the nine months ended March 31, 2018 is presented below:

	Outstanding Shares			Average Exercise Price		Aggregate Intrinsic Value
Outstanding at June 30, 2017		1,191,236		$	7.66	$	2,748,956
Granted		305,500		$	10.10
Exercised		(45,300	)	$	5.04
Forfeited		(13,000	)	$	7.67
Expired		(75,000	)	$	4.87
Outstanding as of March 31, 2018		1,363,436		$	8.45	$	2,738,327
Vested and exercisable at March 31, 2018		692,434		$	7.50	$	2,083,907

The total fair value of stock options vested during the nine months ended March 31, 2018 was $1,418,743. The number and weighted-average grant-date fair value of non-vested stock options at the beginning of fiscal 2018 was 673,875 and $4.77, respectively. The number and weighted-average grant-date fair value of stock options which vested during the nine months ended March 31, 2018 was 299,373 and $4.74, 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 and compensation expense recorded in the nine months ended March 31, 2018 related to these awards was $675,869. As of March 31, 2018, there was approximately $2,473,117 of total unrecognized compensation cost related to non-vested restricted stock awards to be recognized over a weighted-average period of 3.1 years. As of March 31, 2018, 26,800 shares from this set of awards have vested.