COMMON STOCK AND COMMON STOCK WARRANTS

6 Months Ended

Dec. 31, 2013

Common Stock And Common Stock Warrants Abstract

COMMON STOCK AND COMMON STOCK WARRANTS

7. COMMON STOCK AND COMMON STOCK WARRANTS

Under the 2010 Stock Incentive Plan, the Company recorded stock compensation expense of $752 and $1,504 during the three and six-months ended December 31, 2013, respectively, related to shares granted to Directors of the Company in July 2012; no shares of Common stock were issued under this plan during the three and six-months ended December 31, 2013.

Under the 2011 Stock Incentive Plan, the Company recorded stock compensation expense of $1,812 and $13,740 and issued 0 and 51,667 shares of Common stock during the three and six-months ended December 31, 2013, respectively, related to shares granted to employees and Directors of the Company in September 2011 and July 2012.

Under the 2012 Stock Incentive Plan, the Company recorded stock compensation expense of $101,900 and $173,612 and issued 70,013 and 81,029 shares of Common stock during the three and six-months ended December 31, 2013, respectively. Of these amounts $57,499 and $114,999 related to vesting of shares for Directors in lieu of cash payment for services on the Board of Directors and 35,713 shares of Common Stock were issued for the three and six-months ended December 31, 2013, respectively. For the three and six-months ended December 31, 2013 the Company recorded stock compensation expense and an expense reduction of $0 and $5,527, respectively, related to non-executive employee incentives as certain performance targets were not achieved, and issued 13,300 shares of Common Stock the three and six-months ended December 31, 2013.

On November 7, 2013, at the recommendation of the Compensation Committee of the Board of Directors of the Company, the Board of Directors approved a stock bonus to the Company’s Chief Financial Officer (“CFO”). The CFO was awarded 21,000 vested shares of common stock of the Company as a bonus in recognition of his performance during the 2013 fiscal year. For the three and six-months ended December 31, 2013, $38,220 was recorded as expense on account of the stock bonus under the 2012 Stock Incentive Plan.

On November 7, 2013, at the recommendation of the Compensation Committee of the Board of Directors of the Company, the Board of Directors approved the Fiscal Year 2014 Long-Term Stock Incentive Plan (the “2014 LTI Stock Plan”). The 2014 LTI Stock Plan provides that each executive officer would be awarded shares of common stock in the event that certain metrics relating to the Company’s 2014 fiscal year would result in specified ranges of year-over-year percentage growth.

If none of the minimum threshold year-over-year percentage target goals are achieved, the executive officers would not be awarded any shares. If all of the year-over-year percentage target goals are achieved, the executive officers would be awarded shares having the following value: Chief Executive Officer (“CEO”) – $341,277 (100% of base salary); and CFO – $175,698 (75% of base salary). If all of the maximum distinguished year-over-year percentage target goals are achieved, the executive officers would be awarded shares having the following value: CEO – $682,554 (200% of base salary); and CFO – $351,396 (150% of base salary). Assuming the minimum threshold year-over-year percentage target goal would be achieved for a particular metric, the number of shares to be awarded for that metric would be determined on a pro rata basis, provided that the award would not exceed the maximum distinguished award for that metric. The shares awarded under the 2014 LTI Stock Plan would vest over a three year period following issuance as follows: one-third on the first anniversary; one-third on the second anniversary; and one-third on the third anniversary. The Company recorded stock compensation expense of $6,181 and $25,920 for the three and six-months ended December 31, 2013 on account of the 2014 LTI Stock Plan under the 2012 Stock Incentive Plan.

During the three and six-month periods ended December 31, 2013, executive officers exercised their rights to cancel shares of common stock awarded to them under prior employment agreements and the Special Equity Plan granted to an executive officer in September 2012 for the payment of payroll taxes, including 21,179 and 28,558 shares of the Company’s Common Stock to satisfy $33,429 and $47,375 of related payroll obligations, respectively.

During the three and six-months ended December 31, 2012, the Company recorded stock compensation expense of $94,893 and $220,224, and issued 30,987 and 262,650 shares of Common Stock, respectively. $19,583 and $35,625 for grants to the executive officers in April and September 2011, respectively; $32,964 of expenses related to vesting of shares granted to employees in April 2012; $5,551, $4,396 and $23,561 of expenses related to vesting of shares granted to Directors of the Company in June 2011, March 2012 and July 2012, respectively; and $85,000 for shares issued to Company Directors in lieu of cash payment.

As of December 31, 2012, the Company recorded a liability of $87,837, and expense for the three and six-months then ended of $43,969 and $87,837, respectively, for the 2013 Performance Plan.

Warrants were exercised during the three and six-months ended December 31, 2013, resulting in the issuance of 1,972,085 and 2,090,226 shares of Common Stock, respectively, at $1.13 per share. The Company received cash proceeds of $1,712,863 and $1,812,462 during the three and six-months ended December 31, 2013, and $549,493 was included in accounts receivable at December 31, 2013 and was collected on January 7, 2014. On December 31, 2013, warrants to purchase 58,527 shares of Common stock, exercisable at $1.13 per share, expired unexercised.

On September 14, 2013 warrants to purchase 903,955 shares of Common Stock, exercisable at $5.90 per share, expired unexercised.