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Equity Instruments | 9 Months Ended
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Mar. 31, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] |
Equity Instruments | Note 7 – Equity Instruments Options Aytu has two approved stock option plans (Luoxis 2013 Stock Option Plan and Vyrix 2013 Stock Option Plan) which we have reserved a total of 4,718,827 million shares of common stock. Pursuant to the Luoxis 2013 Stock Option Plan, 1,102,761 shares of its common stock were reserved for issuance. The fair value of the options was calculated using the Black-Scholes option pricing model. In order to calculate the fair value of the options, certain assumptions are made regarding components of the model, including the estimated fair value of the underlying common stock, risk-free interest rate, volatility, expected dividend yield and expected option life. Changes to the assumptions could cause significant adjustments to valuation. We estimate the expected term based on the average of the vesting term and the contractual term of the options. The risk-free interest rate is based on the U.S. Treasury yield in effect at the time of the grant for treasury securities of similar maturity. The assumptions are as follows:
|  | Years Ended June 30, |  | Nine Months Ended
|  | 2014 |  | 2013 |  | March 31, 2015
|  |  |  |  |  | (unaudited)
Expected volatility |  | 79% - 82% |  | 86% |  | 79% - 108%
Risk free interest rate |  | 0.75% - 1.53% |  | 1.04% - 1.53% |  | 0.75% - 2.09%
Expected term (years) |  | 5.0 - 6.5 |  | 5.0 - 6.5 |  | 5.0 - 7.0
Dividend yield |  | 0% |  | 0% |  | 0%
Stock option activity is as follows:
|  | Number of Options |  |  | Weighted Average Exercise Price |  |  | Weighted Average Remaining Contractual Life |  |  | Aggregate Intrinsic Value |
Outstanding June 30, 2012 |  |  | — |  |  | $ | — |  |  |  |  |  |  | $ | — |
Granted |  |  | 396,994 |  |  | $ | 4.53 |  |  |  |  |  |  |  |  |
Exercised |  |  | — |  |  | $ | — |  |  |  |  |  |  |  |  |
Forfeited/Cancelled |  |  | — |  |  | $ | — |  |  |  |  |  |  |  |  |
Outstanding June 30, 2013 |  |  | 396,994 |  |  | $ | 4.53 |  |  |  | 9.96 |  |  | $ | 1,272,000 |
Granted |  |  | 33,083 |  |  | $ | 4.53 |  |  |  |  |  |  |  |  |
Exercised |  |  | — |  |  | $ | — |  |  |  |  |  |  |  |  |
Forfeited/Cancelled |  |  | — |  |  | $ | — |  |  |  |  |  |  |  |  |
Outstanding June 30, 2014 |  |  | 430,077 |  |  | $ | 4.53 |  |  |  | 9.01 |  |  | $ | 1,374,000 |
Granted |  |  | 195,189 |  |  | $ | 7.25 |  |  |  |  |  |  |  |  |
Exercised |  |  | — |  |  | $ | — |  |  |  |  |  |  |  |  |
Forfeited/Cancelled |  |  | — |  |  | $ | — |  |  |  |  |  |  |  |  |
Outstanding March 31, 2015 (unaudited) |  |  | 625,266 |  |  | $ | 5.40 |  |  |  | 8.61 |  |  | $ | 2,541,000 |
Exercisable at March 31, 2015 (unaudited) |  |  | 206,767 |  |  | $ | 4.54 |  |  |  | 8.26 |  |  | $ | 687,000 |
Available for grant at March 31, 2015 (unaudited) |  |  | 477,495 |  |  |  |  |  |  |  |  |  |  |  |  |
Pursuant to the Vyrix 2013 Stock Option Plan, 616,067 shares of its common stock were reserved for issuance. The fair value of the options was calculated using the Black-Scholes option pricing model. In order to calculate the fair value of the options, certain assumptions are made regarding components of the model, including the estimated fair value of the underlying common stock, risk-free interest rate, volatility, expected dividend yield and expected option life. Changes to the assumptions could cause significant adjustments to valuation. We estimate the expected term based on the average of the vesting term and the contractual term of the options. The risk-free interest rate is based on the U.S. Treasury yield in effect at the time of the grant for treasury securities of similar maturity. The assumptions are as follows:
|  | Year Ended June 30, |  | Nine Months Ended
|  | 2014 |  | March 31, 2015
|  |  |  | (unaudited)
Expected volatility |  | 63% - 76% |  | 63% - 76%
Risk free interest rate |  | 0.90% - 2.02% |  | 0.90% - 2.02%
Expected term (years) |  | 5.0 - 6.5 |  | 5.0 - 6.5
Dividend yield |  | 0% |  | 0%
Stock option activity is as follows:
|  | Number of Options |  |  | Weighted Average Exercise Price |  |  | Weighted Average Remaining Contractual Life |  |  | Aggregate Intrinsic Value |
Outstanding June 30, 2012 |  |  | — |  |  | $ | — |  |  |  |  |  |  | $ | — |
Granted |  |  | — |  |  | $ | — |  |  |  |  |  |  |  |  |
Exercised |  |  | — |  |  | $ | — |  |  |  |  |  |  |  |  |
Forfeited/Cancelled |  |  | — |  |  | $ | — |  |  |  |  |  |  |  |  |
Outstanding June 30, 2013 |  |  | — |  |  | $ | — |  |  |  | — |  |  | $ | — |
Granted |  |  | 117,053 |  |  | $ | 5.68 |  |  |  |  |  |  |  |  |
Exercised |  |  | — |  |  | $ | — |  |  |  |  |  |  |  |  |
Forfeited/Cancelled |  |  | — |  |  | $ | — |  |  |  |  |  |  |  |  |
Outstanding June 30, 2014 |  |  | 117,053 |  |  | $ | 5.68 |  |  |  | 9.54 |  |  | $ | 417,000 |
Granted |  |  | — |  |  | $ | — |  |  |  |  |  |  |  |  |
Exercised |  |  | — |  |  | $ | — |  |  |  |  |  |  |  |  |
Forfeited/Cancelled |  |  | — |  |  | $ | — |  |  |  |  |  |  |  |  |
Outstanding March 31, 2015 (unaudited) |  |  | 117,053 |  |  | $ | 5.68 |  |  |  | 8.79 |  |  | $ | 417,000 |
Exercisable at March 31, 2015 (unaudited) |  |  | 58,526 |  |  | $ | 5.68 |  |  |  | 8.79 |  |  | $ | 208,000 |
Available for grant at March 31, 2015 (unaudited) |  |  | 499,014 |  |  |  |  |  |  |  |  |  |  |  |  |
Stock-based compensation expense related to the fair value of stock options was included in the statements of operations as research and development expenses and general and administrative expenses as set forth in the table below. Aytu determined the fair value as of the date of grant using the Black-Scholes option pricing model and expenses the fair value ratably over the vesting period. The following table summarizes stock-based compensation expense for the years ended June 30 2014 and 2013, and nine months ended March 31, 2015 and 2014:
|  | Years Ended June 30, |  |  | Nine Months Ended March 31, |
|  | 2014 |  |  | 2013 |  |  | 2015 |  |  | 2014 |
|  |  |  |  |  |  |  | (unaudited) |
Research and development expenses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Stock options |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Luoxis |  | $ | 206,000 |  |  | $ | 203,000 |  |  | $ | 297,000 |  |  |  | 155,000 |
Vyrix |  |  | 38,000 |  |  |  | — |  |  |  | 26,000 |  |  | $ | 29,000 |
General and administrative expenses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Stock options |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Luoxis |  |  | 152,000 |  |  |  | 114,000 |  |  |  | 371,000 |  |  |  | 116,000 |
Vyrix |  |  | 104,000 |  |  |  | — |  |  |  | 56,000 |  |  |  | 85,000 |
|  | $ | 500,000 |  |  | $ | 317,000 |  |  | $ | 750,000 |  |  | $ | 385,000 |
Unrecognized expense at March 31, 2015 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Luoxis |  | $ | 1,129,000 |  |  |  |  |  |  |  |  |  |  |  |  |
Vyrix |  | $ | 194,000 |  |  |  |  |  |  |  |  |  |  |  |  |
Weighted average remaining years to vest |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Luoxis |  |  | 2.23 |  |  |  |  |  |  |  |  |  |  |  |  |
Vyrix |  |  | 1.79 |  |  |  |  |  |  |  |  |  |  |  |  |
Warrants Aytu issued warrants in conjunction with its 2013 Private Placement. A summary of all warrants is as follows:
|  | Number of Warrants |  |  | Weighted Average Exercise Price |  |  | Weighted Average Remaining Contractual Life |
Outstanding June 30, 2012 |  |  | — |  |  | $ | — |  |  |  |  |
Warrants issued - Private Placements |  |  | 102,613 |  |  | $ | 4.53 |  |  |  |  |
Outstanding June 30, 2013 |  |  | 102,613 |  |  | $ | 4.53 |  |  |  | 4.41 |
Outstanding June 30, 2014 |  |  | 102,613 |  |  | $ | 4.53 |  |  |  | 3.92 |
Outstanding March 31, 2015 (unaudited) |  |  | 102,613 |  |  | $ | 4.53 |  |  |  | 3.17 |
These warrants were valued using the Black-Scholes option pricing model. In order to calculate the fair value of the warrants, certain assumptions were made regarding components of the model, including the closing price of the underlying common stock, risk-free interest rate, volatility, expected dividend yield, and expected life. Changes to the assumptions could cause significant adjustments to valuation. The Company estimated a volatility factor utilizing a weighted average of comparable published volatilities of peer companies. The risk-free interest rate is based on the U.S. Treasury yield in effect at the time of the grant for treasury securities of similar maturity. The offering costs and the additional paid-in capital for the warrants associated with the common stock offering was valued at $313,000 using the Black-Scholes valuation methodology. Significant assumptions in valuing the Luoxis warrants were as follows:
Expected volatility |  |  | 87 | %
Risk free interest rate |  |  | 0.52 | %
Expected term (years) |  |  | 5 |
Dividend yield |  |  | 0 | %

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- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 40 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6418621&loc=d3e17540-113929 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6406099&loc=d3e25284-112666 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 14 + Details
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