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Stock-Based Compensation
 9 Months Ended
Mar. 31, 2022
Stock-Based Compensation  
8. Stock-based Compensation

8. Stock-Based Compensation

 

Our directors, officers, and key employees are granted stock-based compensation through our Amended and Restated Omnibus Incentive Plan, as amended (the “Omnibus Plan”), through October 2018 and after that date, the 2018 Stock and Incentive Compensation Plan (the “SICP”), including incentive stock options, non-qualified stock options, and restricted stock unit (“RSU”) awards. The stock-based compensation expense is based primarily on the fair value of the award as of the grant date, and is recognized as an expense over the requisite service period.

 

The following table shows total stock-based compensation expense for the three and nine months ended March 31, 2022 and 2021 included in selling, general and administrative (“SG&A”) expenses in the accompanying unaudited Condensed Consolidated Statements of Comprehensive Income:

 

 

 

Three Months Ended March 31,

 

 

Nine Months Ended March 31,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock options

 

$25,596

 

 

$17,036

 

 

$75,603

 

 

$51,277

 

RSUs

 

 

214,747

 

 

 

183,025

 

 

 

465,869

 

 

 

391,800

 

     Total

 

$240,343

 

 

$200,061

 

 

$541,472

 

 

$443,077

 

 

We also adopted the LightPath Technologies, Inc. Employee Stock Purchase Plan (the “2014 ESPP”). The 2014 ESPP permits employees to purchase Class A common stock through payroll deductions, subject to certain limitations. A discount of $5,129 and $2,978 for the nine months ended March 31, 2022 and 2021, respectively, is included in SG&A expenses in the accompanying unaudited Condensed Consolidated Statements of Comprehensive Income, which represents the value of the 10% discount given to the employees purchasing stock under the 2014 ESPP.

 

Grant Date Fair Values and Underlying Assumptions; Contractual Terms

We estimate the fair value of each stock option as of the date of grant, using the Black-Scholes-Merton pricing model. The fair value of 2014 ESPP shares is the amount of the discount the employee obtains at the date of the purchase transaction.

 

Most stock options granted vest ratably over two to four years and are generally exercisable for ten years. The assumed forfeiture rates used in calculating the fair value of RSU grants was 0%, and the assumed forfeiture rates used in calculating the fair value of options for performance and service conditions were 20% for each of the nine months ended March 31, 2022 and 2021. The volatility rate and expected term are based on seven-year historical trends in Class A common stock closing prices and actual forfeitures. The interest rate used is the U.S. Treasury interest rate for constant maturities.

 

No stock options were granted during the nine months ended March 31, 2022. For stock options granted in the nine-month period ended March 31, 2021, we estimated the fair value of each stock option as of the date of grant using the following assumptions:

 

Weighted-average expected volatility

 

 

71.2%
Dividend yields

 

 

0%
Weighted-average risk-free interest rate

 

 

0.28%
Weighted-average expected term, in years

 

 

7.49

 

Information Regarding Current Share-Based Compensation Awards

 

A summary of the activity for share-based compensation awards in the nine months ended March 31, 2022 is presented below:

 

 

 

Stock Options

 

 

Restricted Stock Units (RSUs)

 

 

 

 

 

 

Weighted-

 

 

Weighted-

 

 

 

 

 

Weighted-

 

 

 

 

 

 

Average

 

 

Average

 

 

 

 

 

Average

 

 

 

 

 

 

Exercise

 

 

Remaining

 

 

 

 

 

Remaining

 

 

 

Shares

 

 

Price

 

 

Contract

 

 

Shares

 

 

Contract

 

June 30, 2021

 

 

432,927

 

 

$2.01

 

 

 

8.8

 

 

 

1,761,885

 

 

 

0.9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Granted

 

 

-

 

 

$-

 

 

 

 

 

 

 

368,461

 

 

 

1.2

 

Exercised

 

 

-

 

 

$-

 

 

 

 

 

 

 

(27,341)

 

 

 

 

Cancelled/Forfeited

 

 

(23,465)

 

$1.67

 

 

 

 

 

 

 

(5,534)

 

 

 

 

March 31, 2022

 

 

409,462

 

 

$2.03

 

 

 

8.1

 

 

 

2,097,471

 

 

 

0.9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Awards exercisable/

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

vested as of

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31, 2022

 

 

151,691

 

 

$1.61

 

 

 

7.5

 

 

 

1,334,978

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Awards unexercisable/

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

unvested as of

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31, 2022

 

 

257,771

 

 

$2.28

 

 

 

8.4

 

 

 

762,493

 

 

 

0.9

 

 

 

 

409,462

 

 

 

 

 

 

 

 

 

 

 

2,097,471

 

 

 

 

 

 

RSU awards vest immediately or from one to four years from the date of grant.

 

As of March 31, 2022, there was approximately $1.3 million of total unrecognized compensation cost related to non-vested share-based compensation arrangements (including stock options and RSUs) granted. We expect to recognize the compensation cost as follows:

 

Fiscal Year Ending:

 

Stock Options

 

 

RSUs

 

 

Total

 

June 30, 2022 (remaining three months)

 

$26,682

 

 

$214,698

 

 

$241,380

 

June 30, 2023

 

 

115,881

 

 

 

531,851

 

 

 

647,732

 

June 30, 2024

 

 

94,196

 

 

 

190,864

 

 

 

285,060

 

June 30, 2025

 

 

33,885

 

 

 

54,308

 

 

 

88,193

 

 

 

$270,644

 

 

$991,721

 

 

$1,262,365