14. STOCK BASED COMPENSATION PLANS

The Company has three active stock based compensation plans at June 30, 2017 as shown in the table below:


			Authorized
Date Approved	Name of Plan	Type of Plan	Shares

June 2013	2013 Stock Incentive Plan	Stock	500,000
June 2014	2014 Stock Option Incentive Plan	Stock Options	750,000
June 2015	2015 Stock Incentive Plan	Stock & Stock Options	1,250,000
			2,500,000

As of June 30, 2017, the Company had reserved shares of Common Stock for future issuance for the following:


Exercise of Common Stock Warrants		23,978
Conversions of Preferred Stock and cumulative Preferred Stock dividends		100,667
Issuance under 2013 Stock Incentive Plan		9,004
Issuance under 2014 Stock Option Incentive Plan		1,447
Issuance under 2015 Stock Incentive Plan		1,052,000
Issuance to former Chief Executive Officer upon the occurrence of a USA Transaction		140,000
Total shares reserved for future issuance		1,327,096

STOCK OPTIONS

The Company estimates the grant date fair value of the stock options it grants using a Black-Scholes valuation model. The Company’s assumption for expected volatility is based on its historical volatility data related to market trading of its own common stock. The Company bases its assumptions for expected life of the new stock option grants on the life of the option granted, and if relevant, its analysis of the historical exercise patterns of its stock options. The dividend yield assumption is based on dividends expected to be paid over the expected life of the stock option. The risk-free interest rate assumption is determined by using the U.S. Treasury rates of the same period as the expected option term of each stock option.


	Year ended	Year ended	Year ended
	June 30, 2017	June 30, 2016	June 30, 2015

Expected volatility	48-50%	59-66%	78-79%
Expected life	4 years	4.5 years	7 years
Expected dividends	0.00%	0.00%	0.00%
Risk-free interest rate	1.06-1.90%	1.46-1.49%	1.59-2.04%

Stock based compensation related to stock options for the years ended June 30, 2017, 2016 and 2015 was $264 thousand, $338 thousand, and $370 thousand respectively. Unrecognized compensation related to stock option grants as of June 30, 2017, 2016, and 2015 was $450 thousand, $167 thousand, and $297 thousand respectively.

The following tables provide information about outstanding options for the fiscal years ended June 30, 2017, 2016, and 2015:


	For the Twelve Months Ended June 30,
	2017
		Weighted
		Average Grant		Weighted Average
	Shares	Date Fair Value		Exercise Price

Outstanding options, beginning of period	610,141	$	1.35	$	2.07
Granted	303,079	$	1.80	$	4.30
Forfeited	—	$	—	$	—
Exercised	—	$	—	$	—
Expired	—	$	—	$	—
Outstanding options, end of period	913,220	$	1.51	$	2.82


	For the Twelve Months Ended June 30,
	2016
		Weighted
		Average Grant		Weighted Average
	Shares	Date Fair Value		Exercise Price

Outstanding options, beginning of period	538,888	$	1.33	$	1.86
Granted	199,586	$	1.63	$	3.21
Forfeited	(95,000)	$	1.80	$	3.38
Exercised	—	$	—	$	—
Expired	(33,333)	$	1.27	$	1.80
Outstanding options, end of period	610,141	$	1.35	$	2.07


	For the Twelve Months Ended June 30,
	2015
		Weighted
		Average Grant		Weighted Average
	Shares	Date Fair Value		Exercise Price

Outstanding options, beginning of period	120,000	$	1.49	$	2.05
Granted	438,888	$	1.30	$	1.82
Forfeited	(20,000)	$	1.49	$	2.05
Exercised	—	$	—	$	—
Expired	—	$	—	$	—
Outstanding options, end of period	538,888	$	1.33	$	1.86

The following table provides information related to options as of June 30, 2017:


	Options Outstanding		Options Exercisable
		Remaining Contractual	Shares	Remaining Contractual	Weighted Average
Range of Exercise Prices	Options Outstanding	Life	Exercisable	Life	Exercise Price

$1.62 to $1.68	75,000	4.51	50,001	4.51	$	1.65
$1.80 to $2.00	295,555	4.16	245,555	4.16	$	1.80
$2.05	100,000	3.97	100,000	3.97	$	2.05
$2.09	10,000	4.58	6,666	4.58	$	2.09
$2.75	25,000	4.77	16,666	4.77	$	2.75
$2.94	75,000	5.53	25,000	5.53	$	2.94
$3.38	29,585	5.06	29,586	5.06	$	3.38
$4.00	75,000	6.69	—	—	$	—
$4.05	30,000	6.61	10,000	6.61	$	4.05
$4.40	178,000	6.78	—	—	$	—
$4.98	20,080	6.17	—	—	$	—
	913,220	5.18	483,474	4.36	$	2.08

The following table provides information about unvested options:


	For the Twelve Months Ended June 30,
	2017			2016			2015
		Weighted			Weighted			Weighted
		Average Grant			Average Grant			Average Grant
	Shares	Date Fair Value		Shares	Date Fair Value		Shares	Date Fair Value

Unvested options, beginning of period	311,248	$	1.39	505,553	$	1.32	120,000	$	1.49
Granted	303,079	$	1.80	199,586	$	1.63	438,888	$	1.30
Vested	(184,581)	$	1.42	(298,891)	$	1.31	(33,335)	$	1.49
Forfeited	—	$	—	(95,000)	$	1.80	(20,000)	$	1.49
Unvested options, end of period	429,746	$	1.67	311,248	$	1.39	505,553	$	1.32

The following table provides information about options outstanding and exercisable options:


	As of June 30,
	2017				2016				2015
	Options		Exercisable		Options		Exercisable		Options		Exercisable
	Outstanding		Options		Outstanding		Options		Outstanding		Options
Number		913,220		483,474		610,141		298,893		538,888		33,335
Weighted average exercise price	$	2.82	$	2.08	$	2.07	$	1.87	$	1.86		2.05
Aggregate intrinsic value	$	2,173,464	$	1,508,439	$	1,341,828	$	717,343	$	452,666		21,668
Weighted average contractual term	$	5.18		4.36		5.42		5.17		6.21		5.97
Share price as of June 30	$	5.20	$	5.20	$	4.27	$	4.27	$	2.70	$	2.70

STOCK GRANTS

A summary of the status of the Company’s nonvested common shares as of June 30, 2017, 2016, and 2015, and changes during the years then ended is presented below:


		Weighted-Average
		Grant-Date
	Shares	Fair Value

Nonvested at June 30, 2014	43,811	$	1.59
Granted	155,927		2.00
Vested	(181,134)		1.89
Nonvested at June 30, 2015	18,604	$	1.88
Granted	131,558		3.04
Vested	(21,664)		2.70
Nonvested at June 30, 2016	128,498	$	2.97
Granted	135,585		4.25
Vested	(141,527)		3.33
Nonvested at June 30, 2017	122,556	$	3.96