STOCK BASED COMPENSATION PLANS

The Company has four active stock based compensation plans at June 30, 2019 as shown in the table below:



Date Approved	Name of Plan	Type of Plan	Authorized Shares

June 2013	2013 Stock Incentive Plan	Stock	500,000
June 2014	2014 Stock Option Incentive Plan	Stock options	750,000
June 2015	2015 Equity Incentive Plan	Stock & stock options	1,250,000
April 2018	2018 Equity Incentive Plan	Stock & stock options	1,500,000
			4,000,000

As of June 30, 2019, the Company had reserved shares of Common Stock for future issuance for the following:



Common Stock		Reserved Shares
Exercise of Common Stock Warrants		23,978
Conversions of Preferred Stock and cumulative Preferred Stock dividends		104,139
Issuance under 2013 Stock Incentive Plan		—
Issuance under 2014 Stock Option Incentive Plan		101,447
Issuance under 2015 Equity Incentive Plan		342,806
Issuance under 2018 Equity Incentive Plan		1,500,000
Total shares reserved for future issuance		2,072,370

STOCK OPTIONS

Stock options are granted at exercise prices equal to the fair market value of the Company's common stock at the date of grant. The options typically vest over a three-year period and each option, if not exercised or terminated, expires on the seventh anniversary of the grant date.

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.

The fair value of options granted during the years ended June 30, 2019, 2018, and 2017 was determined using the following assumptions:



	For the year ended June 30,
	2019	2018	2017

Expected volatility	58.4 - 70.9%	50.2 - 50.9%	49.0 - 50.2%
Expected life (years)	4.2 - 4.5	4.0 - 4.5	3.6 - 4.5
Expected dividends	0.0%	0.0%	0.0%
Risk-free interest rate	2.23-2.91%	1.64 - 1.75%	1.06 - 1.72%

The following tables provide information about outstanding options for the years ended June 30, 2019, 2018, and 2017:



	For the year ended June 30, 2019
	Number of Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)
Outstanding options, beginning of period	904,766		$	3.31	4.3	$	9,664
Granted	470,000		$	8.22
Exercised	(11,669	)	$	5.40		$	—
Forfeited	(235,999	)	$	5.70
Expired	—		$	—
Outstanding options, end of period	1,127,098		$	4.84	4.3	$	2,917
Exercisable options, end of period	638,988		$	2.86	3.4	$	2,923



	For the year ended June 30, 2018
	Number of Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)
Outstanding options, beginning of period	895,221		$	2.79	5.2	$	2,160
Granted	179,047		$	5.66
Exercised	(93,169	)	$	1.92		$	—
Forfeited	(76,333	)	$	4.30
Expired	—		$	—
Outstanding options, end of period	904,766		$	3.31	4.3	$	9,664
Exercisable options, end of period	632,737		$	2.55	3.9	$	7,242



	For the year ended June 30, 2017
	Number of Options	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)
Outstanding options, beginning of period	610,141	$	2.07	5.4	$	1,342
Granted	285,080	$	4.30
Exercised	—	$	—		$	—
Forfeited	—	$	—
Expired	—	$	—
Outstanding options, end of period	895,221	$	2.79	5.2	$	2,160
Exercisable options, end of period	483,474	$	2.08	4.5	$	1,511

The weighted average grant date fair value per share for the Company's stock options granted during the years ended June 30, 2019, 2018, and 2017 was $4.15, $2.42, and $1.80, respectively. The total fair value of stock options vested during the years ended June 30, 2019, 2018, and 2017 was $0.2 million, $0.4 million, and $0.3 million, respectively.

STOCK GRANTS

The Company grants shares of common stock to executive officers pursuant to long-term stock incentive plans ("LTIPs") under which executive officers are awarded shares of common stock of the Company in the event that certain targets are achieved. These achievement targets are typically aligned with specified ranges of year-over-year percentage growth in metrics such as total number of connections and adjusted EBITDA. If none of the minimum threshold year-over-year percentage target goals are achieved, the executive officers would not be awarded any shares. 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 LTIPs typically vest as follows: one-third at the time of issuance; one-third on the one-year anniversary of the fiscal year end for which the shares were awarded; and one-third on the two-year anniversary of the fiscal year end for which the shares were awarded.

The Company also grants shares of common stock to members of the board of directors as compensation for their service on the board. These stock awards to directors typically vest over a two to three year period.

A summary of the status of the Company’s nonvested common shares as of June 30, 2019, 2018, and 2017, and changes during the years then ended is presented below:



	Shares		Weighted-Average Grant-Date Fair Value
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
Granted	275,547		5.31
Vested	(232,267	)	4.92
Nonvested at June 30, 2018	165,836		$	4.85
Granted	40,062		13.90
Vested	(166,927	)	6.01
Nonvested at June 30, 2019	38,971		$	9.19

STOCK BASED COMPENSATION EXPENSE

The Company applies the fair value method to recognize compensation expense for stock-based awards. Using this method, the estimated grant-date fair value of the award is recognized over the requisite service period using the accelerated attribution method. The Company accounts for forfeitures as they occur.

A summary of the Company's stock-based compensation expense recognized during the years ended June 30, 2019, 2018, and 2017 is as follows (in thousands):



	For the year ended June 30,
Award type	2019		2018		2017
Stock options	$	822	$	485	$	264
Stock grants	928		1,309		950
Total stock-based compensation expense	$	1,750	$	1,794	$	1,214

A summary of the Company's unrecognized stock-based compensation expense as of June 30, 2019 is as follows:

As of June 30, 2019

Award type

Unrecognized Expense
(in thousands)

Weighted Average Recognition Period
(in years)

Stock options

Stock grants