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StockBased Compensation
 6 Months Ended
Dec. 31, 2021
StockBased Compensation  
8. StockBased Compensation

8. Stock-Based Compensation

 

Our directors, officers, and key employees are granted stock-based compensation through our Amended and Restated Omnibus Incentive Plan, as amended (the “Omnibus Plan”), through October 2018 and after that date, the 2018 Stock and Incentive Compensation Plan (the “SICP”), including incentive stock options, non-qualified stock options, and restricted stock unit (“RSU”) awards. The stock-based compensation expense is based primarily on the fair value of the award as of the grant date, and is recognized as an expense over the requisite service period.

 

The following table shows total stock-based compensation expense for the three and six months ended December 31, 2021 and 2020 included in selling, general and administrative (“SG&A”) expenses in the accompanying unaudited Condensed Consolidated Statements of Comprehensive Income:

 

 

 

Three Months Ended December 31,

 

 

Six Months Ended December 31,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock options

 

$25,879

 

 

$19,021

 

 

$50,007

 

 

$34,241

 

RSUs

 

 

158,659

 

 

 

87,146

 

 

 

251,122

 

 

 

208,775

 

Total

 

$184,538

 

 

$106,167

 

 

$301,129

 

 

$243,016

 

 

 

We also adopted the LightPath Technologies, Inc. Employee Stock Purchase Plan (the “2014 ESPP”). The 2014 ESPP permits employees to purchase Class A common stock through payroll deductions, subject to certain limitations. A discount of $2,155 and $1,091 for the six months ended December 31, 2021 and 2020, respectively, is included in SG&A expenses in the accompanying unaudited Condensed Consolidated Statements of Comprehensive Income, which represents the value of the 10% discount given to the employees purchasing stock under the 2014 ESPP.

 

Grant Date Fair Values and Underlying Assumptions; Contractual Terms

We estimate the fair value of each stock option as of the date of grant, using the Black-Scholes-Merton pricing model. The fair value of 2014 ESPP shares is the amount of the discount the employee obtains at the date of the purchase transaction.

 

Most stock options granted 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 RSU grants was 0%, and the assumed forfeiture rates used in calculating the fair value of options for performance and service conditions were 20% for each of the six months ended December 31, 2021 and 2020. 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.

 

No stock options were granted during the six months ended December 31, 2021. For stock options granted in the six-month period ended December 31, 2020, we estimated the fair value of each stock option as of the date of grant using the following assumptions:

 

Weighted-average expected volatility

 

 

71.2%
Dividend yields

 

 

0%
Weighted-average risk-free interest rate

 

 

0.74%
Weighted-average expected term, in years

 

 

7.49

 

 

 

 

 

 

Information Regarding Current Share-Based Compensation Awards

 

A summary of the activity for share-based compensation awards in the six months ended December 31, 2021 is presented below:

 

 

 

 Stock Options

 

 

 Restricted Stock Units (RSUs)

 

 

 

 

 

 

Weighted-

 

 

Weighted-

 

 

 

 

 

Weighted-

 

 

 

 

 

 

Average

 

 

Average

 

 

 

 

 

Average

 

 

 

 

 

 

Exercise

 

 

Remaining

 

 

 

 

 

Remaining

 

 

 

 Shares

 

 

 Price

 

 

 Contract

 

 

 Shares

 

 

 Contract

 

June 30, 2021

 

 

432,927

 

 

$2.01

 

 

 

8.8

 

 

 

1,761,885

 

 

 

0.9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Granted

 

 

-

 

 

$-

 

 

 

 

 

 

 

318,461

 

 

 

1.5

 

Exercised

 

 

-

 

 

$-

 

 

 

 

 

 

 

(27,341)

 

 

 

 

Cancelled/Forfeited

 

 

(15,526)

 

$1.86

 

 

 

 

 

 

 

(5,534)

 

 

 

 

December 31, 2021

 

 

417,401

 

 

$2.02

 

 

 

8.3

 

 

 

2,047,471

 

 

 

0.9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Awards exercisable/

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

vested as of

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2021

 

 

109,630

 

 

$1.60

 

 

 

7.5

 

 

 

1,334,978

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Awards unexercisable/

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

unvested as of

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2021

 

 

307,771

 

 

$2.16

 

 

 

8.6

 

 

 

712,493

 

 

 

0.9

 

 

 

 

417,401

 

 

 

 

 

 

 

 

 

 

 

2,047,471

 

 

 

 

 

 

RSU awards vest immediately or from one to four years from the date of grant.

 

As of December 31, 2021, there was approximately $1.4 million of total unrecognized compensation cost related to non-vested share-based compensation arrangements (including stock options and RSUs) granted. We expect to recognize the compensation cost as follows:

 

Fiscal Year Ending:

 

Stock Options

 

 

RSUs

 

 

Total

 

June 30, 2022 (remaining six months)

 

$53,361

 

 

$378,642

 

 

$432,003

 

June 30, 2023

 

 

115,881

 

 

 

455,653

 

 

 

571,534

 

June 30, 2024

 

 

94,196

 

 

 

190,864

 

 

 

285,060

 

June 30, 2025

 

 

33,885

 

 

 

54,308

 

 

 

88,193

 

 

 

$297,323

 

 

$1,079,467

 

 

$1,376,790