XML 23 R12.htm IDEA: XBRL DOCUMENT v3.4.0.3
Compensatory Equity Incentive Plan and Other Equity Incentives
 9 Months Ended
Mar. 31, 2016
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”) 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 shares of our Class A 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 our Class A common 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. A discount of $2,303 and $1,356 for the nine months ended March 31, 2016 and 2015, respectively, is included in the selling, general and administrative expense in the accompanying consolidated statements of comprehensive income (loss), which represents the value of the 10% discount given to the employees purchasing stock under the 2014 Plan.

These plans are summarized below:

      Award Shares  Available for
   Award Shares  Outstanding  Issuance
   Authorized  at March 31,  at March 31,
Equity Compensation Arrangement     2016  2016
 Amended and Restated Omnibus Incentive Plan   3,915,625    2,126,055    1,144,429 
 Employee Stock Purchase Plan   400,000    —      390,094 
                
    4,315,625    2,126,055    1,534,523 

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.

For stock options granted in the nine month periods ended March 31, 2016 and 2015, we estimated the fair value of each stock option as of the date of grant using the following assumptions:

   Nine months ended  Nine month ended
   March 31, 2016  March 31, 2015
Expected volatility  68% - 103%  118%
Weighted average expected volatility  68% - 103%  118%
Dividend yields  0%  0%
Risk-free interest rate  0.37% - 1.49%  1.76%
Expected term, in years  4.29 - 7.50  7.50

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 (“RSU”) grants with both performance and service conditions were 20% for each of the nine months ended March 31, 2016 and 2015. 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 nine months ended March 31, 2016 is presented below:

            Restricted
      Stock Options     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   150,592   $1.48    9.6    236,495    2.6 
Exercised   (6,077)  $1.07    3.3    —      —   
Cancelled/Forfeited   (52,738)  $3.26    —      —      —   
                          
March 31, 2016   814,260   $1.90    5.8    1,311,795    1.0 
                          

Awards exercisable/vested as of

March 31, 2016

   637,010   $2.06    5.1    870,196    —   
                          

Awards unexercisable/unvested as of

March 31, 2016

   177,250   $1.34    8.3    441,599    1.0 
    814,260              1,311,795      

The total intrinsic value of options outstanding and exercisable at March 31, 2016 and 2015 was $250,348 and $1,198, respectively.

The total intrinsic value of RSUs exercised during the nine months ended March 31, 2016 and 2015 was $0 and $0, respectively.

The total intrinsic value of RSUs outstanding and exercisable at March 31, 2016 and 2015 was $1,757,796 and $658,673, respectively.

The total fair value of RSUs vested during the nine months ended March 31, 2016 and 2015 was $388,858 and $199,825, respectively.

The total fair value of option shares vested during the nine months ended March 31, 2016 and 2015 was $37,415 and $8,908, respectively.

As of March 31, 2016, there was $577,653 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
Three months ended June 30, 2016  $12,083   $74,953   $87,036 
                
Year ended June 30, 2017   41,429    237,187    278,616 
                
Year ended June 30, 2018   27,661    141,580    169,241 
                
Year ended June 30, 2019   11,923    29,153    41,076 
                
Year ended June 30, 2020   1,684    —      1,684 
   $94,780   $482,873   $577,653 

RSU 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 March 31, 2016 and changes during the nine 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   $1.10 
Granted   150,592    236,495    387,087   $1.39 
Vested   (197,842)   (198,766)   (396,608)  $1.20 
Cancelled/Forfeited   —      —      —      —   
March 31, 2016   177,250    441,599    618,849   $1.35 

 

Financial Statement Effects and Presentation — The following table shows total stock-based compensation expense for the nine months ended March 31, 2016 and 2015 included in the consolidated statements of comprehensive income (loss):

 

   (Unaudited)  (Unaudited)
   Nine months ended  Nine months ended
   March 31,  March 31,
   2016  2015
 Stock options  $37,125   $40,343 
 RSU   224,489    171,172 
      Total  $261,614   $211,515 
           
 The amounts above were included in:          
 Selling, general & administrative  $260,449   $203,214 
 Cost of sales   238    79 
 New product development   927    8,222 
   $261,614   $211,515