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Compensatory Equity Incentive Plan and Other Equity Incentives
 3 Months Ended
Sep. 30, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Compensatory Equity Incentive Plan and Other Equity Incentives

6. Compensatory Equity Incentive Plan and Other Equity Incentives

Share-Based Compensation Arrangements—The Plan includes several available forms of stock compensation of which incentive stock options and restricted stock awards have been granted to date.

The 2004 Employee Stock Purchase Plan (“ESPP”) permitted employees to purchase common stock through payroll deductions, not to exceed 15% of an employee’s compensation, at a price not less than 85% of the market value of the stock on specified dates (June 30 and December 31). In no event could any participant purchase more than $25,000 worth of shares of Class A common stock in any calendar year and an employee could purchase no more than 4,000 shares on any purchase date within an offering period of 12 months and 2,000 shares on any purchase date within an offering period of six months. The ESPP expired on December 6, 2014, and was replaced by the LightPath Technologies, Inc. Employee Stock Purchase Plan (“2014 ESPP”), which was adopted by our Board of Directors on October 30, 2014 and approved by our stockholders on January 29, 2015.

The 2014 ESPP permits employees to purchase common stock through payroll deductions, which may not exceed 15% of an employee’s compensation, at a price not less than 85% of the market value of the stock on specified dates (June 30 and December 31). In no event can any participant purchase more than $25,000 worth of shares of Class A common stock in any calendar year and an employee cannot purchase more than 8,000 shares on any purchase date within an offering period of 12 months and 4,000 shares on any purchase date within an offering period of six months. This discount of $846 and $502 for the three months ended September 30, 2015 and 2014, respectively, is included in the selling, general and administrative expense in the accompanying consolidated statements of comprehensive income (loss).

These two plans are summarized below:

      Award Shares  Available for
   Award Shares  Outstanding  Issuance
   Authorized  at Sept. 30,  at Sept. 30,
Equity Compensation Arrangement     2015  2015
 Amended and Restated Omnibus Incentive Plan   3,915,625    1,792,545    1,484,016 
 Employee Stock Purchase Plan   400,000    —      395,298 
                
    4,315,625    1,792,545    1,879,314 

 

Grant Date Fair Values and Underlying Assumptions; Contractual Terms— We estimate the fair value of each stock option as of the date of grant. We use the Black-Scholes-Merton pricing model. The ESPP or the 2014 ESPP fair value is the amount of the discount the employee obtains at the date of the purchase transaction.

There were no stock options or restricted stock units granted in the three month periods ended September 30, 2015 and 2014.

Most options granted under the Plan vest ratably over two to four years and are generally exercisable for ten years. The assumed forfeiture rates used in calculating the fair value of options and restricted stock unit grants with both performance and service conditions were 20% for each of the three months ended September 30, 2015 and 2014. The volatility rate and expected term are based on seven-year historical trends in Class A common stock closing prices and actual forfeitures. The interest rate used is the U.S. Treasury interest rate for constant maturities.

Information Regarding Current Share-Based Compensation Awards—A summary of the activity for share-based compensation awards in the three months ended September 30, 2015 is presented below:

       Stock Options  

Restricted

Stock Units (RSUs) 

           Weighted    Weighted         Weighted 
           Average    Average         Average 
           Exercise    Remaining         Remaining 
           Price    Contract         Contract 
       Shares     (per share)    Life (YRS)     Shares     Life (YRS) 
 June 30, 2015    722,483   $2.08    5.3    1,075,300    0.9 
                            
 Granted    —      —      —      —      —   
 Exercised    —      —      —      —      —   
 Cancelled/Forfeited    (5,238)  $2.80    —      —      —   
                            
 September 30, 2015    717,245   $2.08    5.1    1,075,300    0.8 

 

Awards exercisable/                         
vested as of                         
September 30, 2015   492,745   $2.44    3.6    671,430    —   
                          
                          
Awards unexercisable/                         
unvested as of                         
September 30, 2015   224,500   $1.29    8.3    403,870    0.8 
    717,245              1,075,300      

The total intrinsic value of options outstanding and exercisable at September 30, 2015 and 2014 was $45,590 and $31,529, respectively.

The total intrinsic value of RSUs exercised during the three months ended September 30, 2015 and 2014 was $0 and $0, respectively.

The total intrinsic value of RSUs outstanding and exercisable at September 30, 2015 and 2014 was $1,000,431 and $737,936, respectively.

The total fair value of RSUs vested during the three months ended September 30, 2015 and 2014 was $0 and $0, respectively.

The total fair value of option shares vested during the three months ended September 30, 2015 and 2014 was $0 and $0, respectively.

As of September 30, 2015, there was $389,138 of total unrecognized compensation cost related to non-vested share-based compensation arrangements (including share options and restricted stock units) granted under the Plan. We expect to recognize the compensation cost as follows:

 

           Restricted      
           Stock      
      Stock    Share/      
      Options    Units    Total 
                  
 Nine months ended June 30, 2016   $31,193   $151,753   $182,946 
                  
 Year ended June 30, 2017    34,682    120,513    155,195 
                  
 Year ended June 30, 2018    20,915    24,906    45,821 
                  
 Year ended June 30, 2019    5,176    —      5,176 
     $91,966   $297,172   $389,138 

 

Restricted stock unit awards vest immediately or from two to four years from the date of grant.

We issue new shares of Class A common stock upon the exercise of stock options. The following table is a summary of the number and weighted average grant date fair values regarding our unexercisable/unvested awards as of September 30, 2015 and changes during the three months then ended:

Unexercisable/unvested awards  Stock Options Shares  RSU Shares  Total Shares 

Weighted-Average

Grant Date Fair Values

(per share)

June 30, 2015   224,500    403,870    628,370   $1.23 
Granted   —      —      —      —   
Vested   —      —      —      —   
Cancelled/Forfeited   —      —      —      —   
September 30, 2015   224,500    403,870    628,370   $1.23 

 

 

Financial Statement Effects and Presentation—The following table shows total stock-based compensation expense for the three months ended September 30, 2015 and 2014 included in the consolidated statements of comprehensive income (loss):

 

   (Unaudited)  (Unaudited)
   Quarter ended  Quarter ended
   September 30,  September 30,
   2015  2014
           
 Stock options  $13,232   $13,313 
 RSU   60,178    49,950 
      Total  $73,410   $63,263 
           
 The amounts above were included in:          
 General & administrative  $70,143   $60,869 
 Cost of sales   79    —   
 New product development   3,188    2,394 
   $73,410   $63,263