|9 Months Ended|
Mar. 31, 2018
Note 9. Stockholders’ Equity
During the quarter ended December 31, 2017, the Company sold a total of 2,640,819 shares of its common stock at $5.50 per share in a private placement for aggregate gross proceeds of $14.5 million before deducting commissions and expenses of approximately $1.3 million. The proceeds of the offering will be used to fund development and commercialization of the Company’s technology, capital expenditures and general corporate expenditures. In addition to the commissions and expenses paid, the Company issued to the placement agents warrants to purchase 154,177 shares of the Company’s common stock. The warrants represent a cost of the offering, have a grant date fair value of $645,757 and are shown as an offset on the consolidated statements of changes in stockholders’ equity.
The fair values of the warrants were estimated at the dates of grant using a binomial option pricing model with the following weighted average assumptions:
During the quarter ended December 31, 2017, the Company also issued 542,450 shares of its common stock to investors in the Company’s private placement offering that closed in May 2017. These issuances were made pursuant to the price-protection provisions granted to such investors in their subscription agreements.
Stock Option Plans
During the nine months ended March 31, 2018, the Company granted employees and directors options to purchase 1,131,859 shares of common stock. The fair values of the Company’s options were estimated at the dates of grant using a Black-Scholes option pricing model with the following weighted average assumptions:
Expected term: The Company’s expected term is based on the period the options are expected to remain outstanding. The Company estimated this amount utilizing the “Simplified Method” in that the Company does not have sufficient historical experience to provide a reasonable basis to estimate an expected term.
Risk-free interest rate: The Company uses the risk-free interest rate of a U.S. Treasury Note with a similar term on the date of the grant.
Volatility: The Company calculates the expected volatility of the stock price using the historical volatilities of the Company’s common stock traded on the Nasdaq Capital Market.
Dividend yield: The Company uses a 0% expected dividend yield as the Company has not paid dividends to date and does not anticipate declaring dividends in the near future.
The following is a summary of the option activity:
As of March 31, 2018, the total intrinsic value of options outstanding and exercisable was $692,800 and $346,400, respectively. As of March 31, 2018, the Company has approximately $3.2 million in unrecognized stock-based compensation expense attributable to the outstanding options, which will be amortized over a period of 2.79 years.
For the three months ended March 31, 2018 and 2017, the Company recorded $540,612 and $6,888, respectively, in stock-based compensation related to stock options, which is reflected in the condensed consolidated statements of operations.
For the nine months ended March 31, 2018 and 2017, the Company recorded $1,025,453 and $20,968, respectively, in stock-based compensation related to stock options, which is reflected in the condensed consolidated statements of operations.
Restricted Stock Units and Restricted Stock Awards
The Company recognizes the compensation expense for all share-based compensation granted based on the grant date fair value for directors and employees and the reporting period remeasured fair value for consultants. Share-based compensation expense is recognized on a straight-line basis over the requisite service period for each separately vesting portion of the award as if the award was, in substance, multiple awards. The fair value of the award is recorded as share-based compensation expense over the respective restricted period. Any portion of the grant awarded to consultants, directors, employees, and other service providers as to which the repurchase option has not lapsed is accrued on the condensed consolidated balance sheet as a component of accounts payable and accrued expenses. As of March 31, 2018 and June 30, 2017, the accrued stock-based compensation was $562,903 and $399,157, respectively.
A summary of unvested restricted stock awards (“RSAs”) and restricted stock unit awards (“RSUs”) outstanding as of March 31, 2018 and changes during the nine months then ended is as follows:
During the three months ended March 31, 2018 and 2017, the Company recorded stock-based compensation expense of $941,505 and $698,103, respectively related to the RSAs and RSUs that have been issued to date. During the nine months ended March 31, 2018 and 2017, the Company recorded stock-based compensation expense of $2,533,495 and $2,931,885, respectively related to the RSAs and RSUs that have been issued to date.
As of March 31, 2018, the Company had approximately $6.1 million in unrecognized stock-based compensation expense related to the unvested shares.
In March 2018 the Company granted 139,500 performance-based restricted stock units (PBRSU) to employees. The PBRSU awards contain performance and service conditions which must be satisfied for an employee to earn the award. The performance condition is based primarily on the achievement of certain performance objectives. Once earned, the PBRSU awards vest 100% on the first anniversary of the grant date. The Company recognizes compensation expense for PBRSU awards using a graded vesting model, based on the probability of the performance condition being met. For the three and nine months ended March 31, 2018, the Company recognized $69,383 of stock compensation expense on PBRSU awards.
As of March 31, 2018, the Company had approximately $0.8 million in unrecognized stock-based compensation expense related to the unvested PBRSU awards.
The entire disclosure for accounts comprising shareholders' equity, comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income, and compensation-related costs for equity-based compensation. Includes, but is not limited to, disclosure of policies, compensation plan details, equity-based arrangements to obtain goods and services, deferred compensation arrangements, and employee stock purchase plan details.
Reference 1: http://www.xbrl.org/2003/role/presentationRef