The Company has stock-based
compensation plans and reports stock-based compensation expense for all stock-based compensation awards based on the estimated
grant date fair value. The value of the compensation cost is amortized on a straight-line basis over the requisite service periods
of the award (generally the option vesting term).
The Company estimates
fair value using the Black-Scholes valuation model. Assumptions used to estimate compensation expense are determined as follows:
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· |
Expected term is determined under the simplified method using an average of the contractual term and vesting period of the award as appropriate statistical data required to properly estimate the expected term was not available; |
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· |
Expected volatility of award grants made under the Company’s plans is measured using the historical daily changes in the market price of the Company’s common stock over the expected term of the award and contemplation of future activity; |
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· |
Risk-free interest rate is the implied yield on zero-coupon U.S. Treasury bonds with a remaining maturity equal to the expected term of the awards; and, |
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· |
Forfeitures are based on the history of cancellations of awards granted by the Company and management’s analysis of potential future forfeitures. |
The Company has several
employee stock option and officer and director stock option plans that have been approved by the shareholders of the Company. The
plans require that options be granted at a price not less than market on the date of grant and are more fully discussed in our
Form 10-K for the year ended June 30, 2016.
The following table
summarizes the Company’s stock option activity during the first three months of fiscal 2017:
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|
|
|
|
|
|
Weighted |
|
|
|
|
| |
|
|
|
|
Weighted |
|
Average |
|
|
|
|
| |
|
|
|
|
Average |
|
Remaining |
|
Aggregate |
|
Aggregate |
| |
|
|
|
|
Exercise Price |
|
Contractual |
|
Fair |
|
Intrinsic |
| |
|
|
Shares |
|
Per Share |
|
Term (1) |
|
Value (3) |
|
Value (2) |
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|
|
|
|
|
|
|
|
|
|
|
| Outstanding July 1, 2016 |
1,200,000 |
|
$0.58 |
|
2.03 |
$ |
273,500 |
$ |
- |
| |
Granted |
|
- |
|
- |
|
- |
|
- |
|
- |
| |
Exercised |
|
- |
|
- |
|
- |
|
- |
|
- |
| |
Forfeited or expired |
- |
|
- |
|
- |
|
- |
|
- |
| Outstanding September 30, 2016 |
1,200,000 |
|
$0.58 |
|
1.78 |
$ |
273,500 |
$ |
- |
| Exercisable September 30, 2016 |
1,200,000 |
|
$0.58 |
|
1.78 |
$ |
273,500 |
$ |
- |
| |
|
|
|
|
|
|
|
|
|
|
|
| (1) |
Remaining contractual term presented in years. |
| (2) |
The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying |
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awards and the closing price of the Company's common stock as of September 30, 2016, for those awards that |
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have an exercise price currently below the closing price as of September 30, 2016 of $0.18. |
| (3) |
Aggregate Fair Value is calculated using the Black Scholes option pricing model to estimate fair value of stock-based |
| |
compensation on the date of grant. |
As of September 30,
2016, there was no unamortized Black Scholes value remaining to be recognized as stock-based compensation expense.
As of September 30,
2016, the Company had 140,000 outstanding warrants. The following table summarizes the Company’s warrant activity during
the quarter ended September 30, 2016:
| |
|
|
Warrants Outstanding |
|
Warrants Exercisable |
| |
|
|
|
|
Weighted |
|
|
|
Weighted |
| |
|
|
Number of |
|
Average |
|
Number of |
|
Average |
| |
|
|
Shares |
|
Exercise Price |
|
Shares |
|
Exercise Price |
| Warrants Outstanding, July 1, 2016 |
140,000 |
$ |
0.75 |
|
20,000 |
$ |
0.75 |
| |
Granted |
|
- |
|
- |
|
- |
|
- |
| |
Previously Granted, Vested |
- |
|
- |
|
30,000 |
|
0.75 |
| |
Exercised |
|
- |
|
- |
|
- |
|
- |
| |
Canceled/Expired |
- |
|
- |
|
- |
|
- |
| Warrants Outstanding, September 30, 2016 |
140,000 |
$ |
0.75 |
|
50,000 |
$ |
0.75 |
|