XML 40 R23.htm IDEA: XBRL DOCUMENT
v3.20.2

STOCK BASED COMPENSATION PLANS | 12 Months Ended
--- | ---
Jun. 30, 2020
Share-based Payment Arrangement [Abstract] |
STOCK BASED COMPENSATION PLANS | STOCK BASED COMPENSATION PLANS The Company has four active stock based compensation plans at June 30, 2020 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 |  | 4,000,000 |
|  |  |  |  |  | 6,500,000 |
As of June 30, 2020, the Company had reserved shares of Common Stock for future issuance for the following:
Common Stock |  | Reserved Shares
Issuance upon exercise of Common Stock Warrants |  | 23,978 |
Conversions of Preferred Stock and cumulative Preferred Stock dividends |  | 104,806 |
Issuance upon exercise of stock options granted to current CEO |  | 1,000,000 |
Issuance of shares to former CEO George Jensen upon the occurrence of a USA Transaction (1) |  | 140,000 |
Issuance under 2013 Stock Incentive Plan |  | — |
Issuance under 2014 Stock Option Incentive Plan |  | 105,687 |
Issuance under 2015 Equity Incentive Plan |  | 255,981 |
Issuance under 2018 Equity Incentive Plan |  | 2,357,192 |
Total shares reserved for future issuance |  | 3,987,644 |
__________________________________________
(1) | Represents 140,000 shares issuable to our former CEO George Jensen upon the occurrence of a USA Transaction as such term is defined in the Jensen Stock Agreement dated September 27, 2011 by and between the Company and George R. Jensen.
WARRANTS The Company had 23,978 warrants outstanding as of June 30, 2020 and 2019, all of which were exercisable at $5.00 per share. The warrants have an expiration date of March 29, 2021. 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 to four-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 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. The fair value of options granted during the years ended June 30, 2020, 2019, and 2018 was determined using the following assumptions:
| For the year ended June 30,
| 2020 |  | 2019 |  | 2018
Expected volatility | 74.6 - 90.1% |  | 58.4 - 70.9% |  | 50.2 - 50.9%
Expected life (years) | 3.5 - 4.8 |  | 4.2 - 4.5 |  | 4.0 - 4.5
Expected dividends | 0.0% |  | 0.0% |  | 0.0%
Risk-free interest rate | 0.3-1.6% |  | 2.23-2.91% |  | 1.64-1.75%
The following tables provide information about outstanding options for the years ended June 30, 2020, 2019, and 2018:
| For the year ended June 30, 2020
Number of Options |  | Weighted Average Exercise Price |  | Weighted Average Remaining Contractual Term (in years) |  | Aggregate Intrinsic Value (in thousands)
Outstanding options, beginning of period | 1,127,098 |  |  | $ | 4.84 |  |  | 4.3 |  | $ | 2,917 |
Granted | 2,075,760 |  |  | $ | 6.47 |  |  |  |  |
Exercised | (440,435 | ) |  | $ | 2.48 |  |  |  |  | $ | (595 | )
Forfeited | (324,998 | ) |  | $ | 6.55 |  |  |  |  |
Expired | — |  |  | $ | — |  |  |  |  |
Outstanding options, end of period | 2,437,425 |  |  | $ | 6.43 |  |  | 6.2 |  | $ | 1,411 |
Exercisable options, end of period | 560,871 |  |  | $ | 6.01 |  |  | 4.8 |  | $ | 559 |
| 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 |
The weighted average grant date fair value per share for the Company's stock options granted during the years ended June 30, 2020, 2019, and 2018 was $3.84, $4.15, and $2.42, respectively. The total fair value of stock options vested during the years ended June 30, 2020, 2019, and 2018 was $1.7 million, $0.2 million, and $0.4 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 restricted common stock and restricted stock units (RSUs) to members of the board of directors as compensation for their service on the board as well as to employees as additional compensation. These stock awards typically vest over a one to three year period. A summary of the status of the Company’s nonvested common shares and RSUs as of June 30, 2020, 2019, and 2018, and changes during the years then ended is presented below:
| Shares |  | Weighted-Average Grant-Date Fair Value
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 |
Granted | 651,715 |  |  | 7.28 |
Vested | (109,050 | ) |  | 7.52 |
Forfeited | (368,622 | ) |  | 7.89 |
Nonvested at June 30, 2020 | 213,014 |  |  | $ | 6.50 |
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, 2020, 2019, and 2018 is as follows (in thousands):
|  | For the year ended June 30,
Award type |  | 2020 |  | 2019 |  | 2018
Stock options |  | $ | 2,181 |  |  | $ | 822 |  |  | $ | 485 |
Stock grants |  | 848 |  |  | 928 |  |  | 1,309 |
Total stock-based compensation expense |  | $ | 3,029 |  |  | $ | 1,750 |  |  | $ | 1,794 |
The Company recognized tax benefits of $0.5 million, $0.3 million, and $0.3 million related to stock compensation expense for the years ended June 30, 2020, 2019, and 2018. A summary of the Company's unrecognized stock-based compensation expense as of June 30, 2020 is as follows:
|  | As of June 30, 2020
Award type |  | Unrecognized Expense (in thousands) |  | Weighted Average Recognition Period (in years)
Stock options |  | $ | 5,807 |  |  | 2.1
Stock grants |  | $ | 1,125 |  |  | 1.3

X
- Definition The entire disclosure for share-based payment arrangement. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 + Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsSharebasedPaymentsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration