XML 29 R15.htm IDEA: XBRL DOCUMENT

Compensatory Equity Incentive Plan and Other Equity Incentives

12 Months Ended

Jun. 30, 2023

Compensatory Equity Incentive Plan and Other Equity Incentives

Compensatory Equity Incentive Plan and Other Equity Incentives

9. Compensatory Equity Incentive Plan and Other Equity Incentives

Share-based payment arrangements — The Company’s directors, officers, and key employees were granted stock-based compensation through the Omnibus Plan, through October 2018 and after that date, the SICP. The awards include incentive stock options, non-qualified stock options and restricted stock unit (“RSU”) awards.

The LightPath Technologies, Inc. Employee Stock Purchase Plan (“2014 ESPP”) was adopted by the Company’s board of directors on October 30, 2014 and approved by the Company’s stockholders on January 29, 2015. The 2014 ESPP permits employees to purchase 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 the 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. This discount of approximately $4,000 and $5,000 for fiscal years 2023 and 2022, respectively, is included in the selling, general and administrative expense in the accompanying Consolidated Statements Comprehensive Income (Loss), which represents the value of the 10% discount given to the employees purchasing stock under the 2014 ESPP.

These plans are summarized below:

Equity Compensation Arrangement		Award Shares Authorized				Outstanding at June 30, 2023				Available for Issuance at June 30, 2023
SICP (or Omnibus Plan)			7,215,625				2,232,417				1,633,538
2014 ESPP			400,000				—				243,920
			7,615,625				2,232,417				1,877,458

Grant Date Fair Values and Underlying Assumptions; Contractual Terms —The Company estimates the fair value of each equity option as of the date of grant. The Company uses the Black-Scholes-Merton pricing model. The 2014 ESPP fair value 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 years ended June 30, 2023 and 2022. 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 year ended June 30, 2023.

For stock options granted in the year ended June 30, 2022, the Company estimated the fair value of each stock award as of the date of grant using the following assumptions:

		Year Ended June 30, 2022
Weighted-average expected volatility			80.8	%
Dividend yields			0	%
Weighted-average risk-free interest rate			2.09	%
Weighted-average expected term, in years			3.75

Restricted Stock Awards

RSAs are granted primarily to our executive officers, employees and consultants, and typically vest over a one to three year period from the date of grant, although some may vest immediately upon grant. The stock underlying RSAs is issued upon vesting.

Restricted Stock Units

RSUs are granted primarily to our directors, although RSU awards may also be made to executive officers, employees and consultants. RSUs typically vest over a one to four year period from the date of grant, although some may vest immediately upon grant.

Information Regarding Current Share-Based Payment Awards —A summary of the activity for share-based payment awards in the years ended June 30, 2023 and 2022 is presented below:

		Stock Options												Restricted Stock Units (RSUs)								Restricted Stock Awards (RSAs)
						Weighted-				Weighted-								Weighted-								Weighted-
						Average				Average								Average								Average
						Exercise				Remaining								Remaining								Remaining
		Shares				Price				Contract				Shares				Contract				Shares				Contract
June 30, 2021			432,927			$	2.01				8.8				1,761,885				0.9				—

Granted			125,000			$	2.02								368,461				1.2				—
Exercised			-			$	-								(45,143	)							—
Cancelled/Forfeited			(23,465	)		$	1.67								(5,534	)							—
June 30, 2022			534,462			$	2.03				7.0				2,079,669				0.9				—

Granted			-			$	-								611,386								246,942
Exercised			-			$	-								(1,068,291	)							(145,209	)
Cancelled/Forfeited			-			$	-								(26,542	)							—
June 30, 2023			534,462			$	2.03				6.1				1,596,222				1.1				101,733				0.7

Awards exercisable/
vested as of
June 30, 2023			396,202			$	1.96				5.8				938,817				—				—

Awards unexercisable/
unvested as of
June 30, 2023			138,260			$	2.21				7.1				657,405				1.1				101,733				0.7
			534,462												1,596,222								101,733

The intrinsic and fair values for share-based payment awards exercised and vested in the years ended June 30, 2023 and 2022 are presented below:

		Year Ended June 30,
		2023				2022
Intrinsic Value - Exercised
RSUs		$	1,648,874			$	77,284
RSAs			190,720				-

Fair Value - Vested
Stock Options			6,500				24,000
RSUs			793,880				395,223
RSAs			189,473				-

No stock options were exercised during the years ended June 30, 2023 and 2022.

The intrinsic values of share-based payment awards outstanding and exercisable as of June 30, 2023 and 2022 are presented below:

		As of June 30,
		2023				2022

Stock options		$	2,430			$	42,463
RSUs			1,267,403				1,642,023

None of the outstanding RSAs were exercisable as of June 30, 2023, and there were no outstanding RSAs as of June 30, 2022.

As of June 30, 2023, there was approximately $776,000 of total unrecognized compensation cost related to non-vested share-based compensation arrangements, including share options and RSUs, granted under the Omnibus Plan, through October 2018 and after that date, the SICP. The expected compensation cost to be recognized is as follows:

Fiscal Year Ending:		Stock Options				RSAs				RSUs				Total
June 30, 2024			94,196				56,744				416,582				567,522
June 30, 2025			33,885				23,718				130,589				188,192
June 30, 2026			—				—				19,829				19,829
		$	128,081			$	80,462			$	567,000			$	775,543

The table above does not include shares under the Company’s 2014 ESPP, which has purchase settlement dates in the second and fourth fiscal quarters.

The Company issues new shares of Class A common stock upon the exercise of stock options and upon vesting of RSUs and RSAs, unless the recipient has elected to defer receipt of shares under the applicable IRS rules. The following table is a summary of the number and weighted-average grant date fair values, estimated using the Black-Scholes-Merton pricing model, regarding the Company’s unexercisable/unvested awards as of June 30, 2023 and 2022 and changes during the two years then ended:

Unexercisable/Unvested Awards		Stock Options Shares				RSU Shares				RSA Shares				Total Shares				Weighted-Average Grant Date Fair Values (per share)
June 30, 2021			321,984				598,587				-				920,571			$	1.59
Granted			125,000				368,461				-				493,461			$	1.74
Vested			(118,696	)			(216,823	)			-				(335,519	)		$	1.42
Cancelled/Forfeited			(8,967	)			(5,534	)			-				(14,501	)		$	1.97
June 30, 2022			319,321				744,691				-				1,064,012			$	1.71
Granted			-				611,386				246,942				858,328			$	1.24
Vested			(181,061	)			(672,130	)			(145,209	)			(998,400	)		$	1.52
Cancelled/Forfeited			-				(26,542	)			-				(26,542	)		$	-
June 30, 2023			138,260				657,405				101,733				897,398			$	1.40

Acceleration of Vesting —The Company does not generally accelerate the vesting of any stock options, RSUs or RSAs, however in the case of retirements, the Board of Directors may accelerate vesting.

Financial Statement Effects and Presentation —The following table shows total stock-based compensation expense for the years ended June 30, 2023 and 2022, which is included in selling, general and administrative expenses in the accompanying Consolidated Statements of Comprehensive Income (Loss):

		Year Ended June 30,
		2023				2022

Stock options		$	200,854			$	144,682
RSAs			168,673				—
RSUs			941,430				680,568
Total		$	1,310,957			$	825,250