EQUITY

6 Months Ended

Dec. 31, 2020

WARRANTS

The Company had 23,978 warrants outstanding as of December 31, 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 and six months ended December 31, 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 goals to be established by the Company for each fiscal year. Because the performance conditions of those stock options granted had not yet been established as of December 31, 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. In January 2021, the Compensation Committee of the Board of Directors established and approved the performance metrics applicable to the above mentioned stock options.

The fair value of all options granted during the six months ended December 31, 2020 and 2019 was determined using the following assumptions and includes only options with an established measurement date under ASC 718:


	Six months ended December 31,
	2020			2019
Expected volatility (percent)	76.3% - 77.3%			74.6% - 90.1%
Weighted average expected life (years)	4.5			3.5 - 4.5
Dividend yield (percent)	0.0		%	0.0		%
Risk-free interest rate (percent)	0.2% - 0.4%			1.4% - 1.6%
Number of options granted	650,000			340,760
Weighted average exercise price	$	8.00		$	6.85
Weighted average grant date fair value	$	4.69		$	6.84

Stock based compensation related to stock options for the three and six months ended December 31, 2020 was $1.4 million and $2.5 million, respectively, and for the three and six months ended December 31, 2019 was $1.1 million and $1.4 million, respectively.

COMMON STOCK

There were no significant new common stock awards granted during the three and six months ended December 31, 2020.

The total expense recognized for all common stock awards for the three and six months ended December 31, 2020 was $0.3 million and $0.7 million, respectively, and for the three and six months ended December 31, 2019 was $0.5 million.