EMPLOYEE AND DIRECTOR EQUITY INCENTIVE PLANS

12 Months Ended

Jun. 30, 2018

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

EMPLOYEE AND DIRECTOR EQUITY INCENTIVE PLANS

NOTE 9 - EMPLOYEE AND DIRECTOR EQUITY INCENTIVE PLANS

The Company previously adopted the 2007 Equity Incentive Plan (“2007 Plan”) that authorized the board of directors or a committee to grant up to 300,000 shares to employees and directors of the Company. Unless defined in an employment agreement or otherwise determined, the stock options vest ratably over a three-year period. Stock options expire 10 years after the date of grant. No shares are available to be issued for future awards under the 2007 Plan.

In November 2010, the Company adopted the 2010 Omnibus Long-Term Incentive Plan (“2010 Omnibus Plan”), which authorizes a committee of the board of directors to grant stock options, stock appreciation rights, restricted stock, RSUs, unrestricted stock, other stock-based awards and cash awards. The 2010 Omnibus Plan, as amended, authorizes up to 13,950,000 shares plus shares of Common Stock underlying any outstanding stock option of other awards granted by any predecessor employee stock plan of the Company that is forfeited, terminated, or cancelled without issuance of shares, to employees, officers, non-employee members of the board of directors, consultants and advisors. Unless otherwise determined, options vest ratably over a three-year period and expire eight years after the date of grant. At the annual meeting of shareholders held on December 19, 2017, the Company’s shareholders approved an amendment of the 2010 Omnibus Plan which increased the number of shares of the Company’s Common Stock available for issuance pursuant to awards under the 2010 Omnibus Plan by 2,000,000 to 13,950,000.

In November 2012, the Company adopted the 2012 Non-Employee Director Equity Compensation Plan, as amended (“2012 Director Equity Plan”), under which the Company may issue up to 4,400,000 RSUs and other equity awards to our non-employee directors pursuant to the Company’s director compensation policy. At the annual meeting of shareholders held on November 14, 2016, the Company’s shareholders approved an amendment of the 2012 Director Equity Plan which increased the number of shares of the Company’s Common Stock available for issuance pursuant to awards under the 2012 Director Equity Plan by 1,200,000 to 4,400,000.

As of June 30, 2018, there were a total of 2,980,693 shares available to be issued for future awards under the 2010 Omnibus Plan and 446,651 shares available to be issued for future awards under the 2012 Director Equity Plan.

Stock Options

The fair value of each stock option granted is estimated on the date of grant using the Black-Scholes option-pricing method. The Company uses historical data to estimate the expected price volatility, the expected option life and the expected forfeiture rate. The Company has not made any dividend payments nor does it have plans to pay dividends in the foreseeable future. The following assumptions were used to estimate the fair value of stock options granted during the years ended June 30, 2018 and June 30, 2017 using the Black-Scholes option-pricing model:

	Year ended June 30,
	2018			2017
Expected life of option (years)		4			4
Risk-free interest rate		1.59 - 2.71%			1.14 - 1.7%
Assumed volatility		95.51 - 113.98%			107.7 - 113.55%
Expected dividend rate		0.00	%		0.00	%
Expected forfeiture rate		6.15 - 21.29%			6.23 - 9.18%

Time-vested and performance-based stock options are accounted for at fair value at date of grant. Total fair value of stock options granted for the years ended June 30, 2018 and June 30, 2017 was $414,795 and $1,142,187, respectively. Compensation expense is recognized over the requisite service and performance periods. The amount recognized in the consolidated financial statements related to stock options was $353,584 and $1,017,330, based on the amortized grant date fair value of stock options granted under its various equity incentive plans, during the years ended June 30, 2018 and June 30, 2017, respectively. At June 30, 2018, there was $428,513 in unrecognized compensation cost related to unvested stock options, which is expected to be recognized over a weighted average period of 1.4 years.

Information with respect to stock option activity is as follows:

	Number ‎of ‎Options			Weighted ‎Average ‎Exercise Price		Average ‎Remaining ‎Contractual Life ‎(in years)
Balance at June 30, 2016		6,111,360		$	0.88		6.96
Options granted		2,654,100			0.59
Options exercised		(124,252	)		0.56
Options forfeited		(391,910	)		2.55
Balance at June 30, 2017		8,249,298			0.71		6.50
Options granted		1,407,000			0.40
Options forfeited		(2,781,483	)		0.71
Balance at June 30, 2018		6,874,815			0.65		5.87

The following table summarizes information relating to the stock options outstanding as of June 30, 2018:

	Outstanding						Exercisable
Range of Exercise Prices	Number ‎of ‎Options		Average ‎Remaining ‎Contractual Life ‎(in years)		Weighted ‎Average ‎Exercise ‎Price		Number ‎of ‎Options		Average ‎Remaining ‎Contractual Life ‎(in years)		Weighted ‎Average ‎Exercise ‎Price
$0.28 to $1.00		6,140,365		6.10	$	0.50		3,070,032		5.57	$	0.52
$1.01 to $2.50		645,000		4.31		1.47		533,000		4.17		1.56
$2.51 to $5.00		40,200		1.42		3.93		40,200		1.42		3.93
$5.01 to $6.95		49,250		1.24		5.71		49,250		1.24		5.71
Balance at June 30, 2018		6,874,815		5.87		0.65		3,692,482		5.26		0.77

During the year ended June 30, 2018, stock options to purchase 1,407,000 shares were granted to employees exercisable at $0.34 to $0.51 per share based on various service-based vesting terms from July 2017 through June 2021 and exercisable at various dates through June 2026. During the year ended June 30, 2017, stock options to purchase 2,654,100 shares were granted to employees exercisable at $0.35 to $1.02 per share based on service-based and performance-based vesting terms from July 2016 through June 2020 and exercisable at various dates through June 2025.

The aggregate intrinsic value of outstanding stock options totaled $14,779 and was based on the Company’s adjusted closing stock price of $0.37 as of June 30, 2018.

Information with respect to unvested employee stock option activity is as follows:

	Number ‎of  ‎Options			Weighted ‎Average ‎Grant Date ‎Fair Value ‎Per Share		Average ‎Remaining ‎Contractual Life ‎(in years)
Balance at June 30, 2016		4,852,367		$	0.54		7.42
Options granted		2,654,100			0.59
Options vested		(2,110,085	)		0.57
Options forfeited		(199,284	)		0.80
Balance at June 30, 2017		5,197,098			0.54		6.93
Options granted		1,407,000			0.40
Options vested		(1,581,266	)		0.56
Options forfeited		(1,840,499	)		0.48
Balance at June 30, 2018		3,182,333			0.51		6.57

RSUs

The Company compensates its directors with time-vested RSUs and cash. On June 26, 2018, 119,444 RSUs were granted to the Company’s directors in lieu of cash based directors fee payments of $43,000 for services rendered during the fourth quarter of fiscal 2018. The RSUs vested immediately on the date of grant. On November 14, 2017, 1,163,075 RSUs were granted to the Company’s directors in partial payment of director’s fees through November 2018 under the 2012 Director Equity Plan. As of June 30, 2018, 872,310 of the RSUs from the November 14, 2017 grant had vested.

On November 14, 2016, 581,816 RSUs were granted to the Company’s directors in partial payment of director’s fees through November 2017 under the 2012 Director Equity Plan. As of September 30, 2017, 563,635 of the RSUs from the November 14, 2016 grant had vested and 18,181 had forfeited.

On November 17, 2015, 864,000 RSUs were granted to the Company's directors in partial payment of director's fees through November 2016 under the 2012 Director Equity Plan. As of September 30, 2016, all of the RSUs from the November 17, 2015 grant had vested.

The Company also compensates its key employees with time-vested and performance-based RSUs. 3,060,000 and 1,090,000 RSUs were granted to the Company’s employees under the 2010 Omnibus Plan and inducement awards during the years ended June 30, 2018 and June 30, 2017, respectively.

Time-vested and performance-based RSUs are accounted for at fair value at date of grant. Total fair value of RSUs granted for the years ended June 30, 2018 and June 30, 2017 was $1,785,400 and $1,917,598, respectively. Compensation expense is recognized over the requisite service and performance periods. The amount recognized in the consolidated financial statements related to RSUs was $789,165 and $1,128,435, based on the amortized grant date fair value of RSUs granted under its various equity incentive plans, during the years ended June 30, 2018 and June 30, 2017, respectively. As of June 30, 2018, there were 4,145,765 of unvested RSUs and $1,748,243 in unrecognized compensation cost. Generally, shares of Common Stock related to vested RSUs are to be issued six months after the holder’s separation from service with the Company.

Information with respect to RSU activity is as follows:

	Number of ‎Restricted ‎Stock Units			Weighted ‎Average ‎Valuation ‎Price Per Unit
Balance at June 30, 2016		4,029,244		$	1.03
RSUs granted		1,671,816			1.15
Shares issued		(144,728	)		0.75
Balance at June 30, 2017		5,556,332			1.07
RSUs granted		4,342,519			0.41
RSUs forfeited		(1,147,231	)		0.75
Shares issued		(1,041,152	)		1.42
Balance at June 30, 2018		7,710,468			0.70