EQUITY

3 Months Ended

Sep. 30, 2020

WARRANTS

The Company had 23,978 warrants outstanding as of September 30, 2020 and June 30, 2020, all of which were exercisable at $5.00 per share. The warrants have an expiration date of March 29, 2021.

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 uses the simplified method to determine expected term, as the Company does not have adequate historical exercise and forfeiture behavior on which to base the expected life assumption. 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.

During the three months ended September 30, 2020, the Company granted stock options to certain employees which vest each year over a three-year period. Certain of those stock options are also subject to the achievement of performance goals to be established by the Company for each fiscal year. Because the performance conditions of those stock options granted have not yet been established as of September 30, 2020, a measurement date under ASC 718, Compensation - Stock Compensation, has not yet been established for those stock options and compensation cost will not be measured and recorded until the date on which those specific performance terms are established and mutually understood with the awardee.

The fair value of all options granted during the three months ended September 30, 2020 was determined using the following assumptions and includes only options with an established measurement date under ASC 718:


	Three months ended September 30,
	2020
Expected volatility (percent)	76.6% - 77.3%
Expected life (years)	4.5
Expected dividends	0.0		%
Risk-free interest rate (percent)	0.2% - 0.3%
Number of options granted	467,500
Weighted average exercise price	$	7.49
Weighted average grant date fair value	$	4.41

Stock based compensation related to all stock options for the three months ended September 30, 2020 and 2019 was $1.1 million and $0.2 million, respectively.

COMMON STOCK

There were no significant new common stock awards granted during the three months ended September 30, 2020.

The total expense recognized for all common stock awards for the three months ended September 30, 2020 and 2019 was $0.4 million and $42 thousand, respectively.