Stock-Based Compensation Plans

9 Months Ended

Mar. 31, 2017

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

Stock-Based Compensation Plans

8. Stock-Based Compensation Plans

Stock Option Awards 

For the three and nine months ended March 31, 2017, the compensation cost that has been charged against income for the Company’s stock option plans was $532,341 and $616,206, respectively, which in the nine month period 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 three and nine months ended March 31, 2016, compensation cost that has been charged against income for the Company’s stock option plans was $446,172 and $1,175,000, respectively. As of March 31, 2017, there was approximately $2,771,938 of total unrecognized compensation cost related to non-vested share-based compensation arrangements to be recognized over a weighted-average period of 2.8 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, 2017 and 2016 was $4.46 and $4.23, respectively. There were options to purchase 327,500 shares granted during the nine months ended March 31, 2017. The fair value was estimated based on the weighted average assumptions of:

	For nine months ended March 31,
	2017			2016
Risk-free interest rates		1.80	%		1.71	%
Expected option life in years		6.25			6.25
Expected stock price volatility		54.68	%		55.41	%
Expected dividend yield		0	%		0	%

A summary of option activity under the Company’s equity plans as of March 31, 2017, and changes during the nine months ended March 31, 2017 is presented below:

	Outstanding  Shares			Average Exercise  Price		Aggregate Instrinsic Value
Vested and exercisable at June 30, 2016		1,790,224		$	6.38	$	1,675,072
Granted		327,500		$	8.34
Exercised		(52,500	)	$	5.78
Forfeited		(376,625	)	$	8.24
Expired		(2,700	)	$	3.45
Outstanding as of March 31, 2017		1,685,899		$	6.37	$	9,324,182
Vested and exercisable at March 31, 2017		980,774		$	4.63	$	7,097,409

The total fair value of shares vested during the nine months ended March 31, 2017 was $1,055,434. The number and weighted-average grant-date fair value of non-vested stock options at the beginning of fiscal 2017 was 976,875 and $4.81, respectively. The number and weighted-average grant-date fair value of stock options which vested during the nine months ended March 31, 2017 was 224,250 and $4.71, 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 and nine months ended March 31, 2017 was $224,498 and $265,063, respectively.