Quarterly report pursuant to Section 13 or 15(d)

Stockholders' Equity

v3.5.0.2
Stockholders' Equity
3 Months Ended
Sep. 30, 2016
Equity [Abstract]  
Stockholders' Equity

Note 8. Stockholders’ Equity

 

The Company recorded stock–based compensation expense for the shares issued to consultants that have vested, which is a component of general and administrative expenses in the Consolidated Statement of Operations as follows:

 

          Stock Based Compensation  
                   
          For the Three Months Ended  
Month of Original Grant   Shares
Issued
    September 30,
2016
    September 30,
2015
 
                   
December 2015     230,000     $ 166,957     $ -  
March 2016     60,000       46,127       -  
August 2016     40,000       147,600       -  
      330,000     $ 360,684     $ -  

  

As of September 30, 2016 and June 30, 2016, the Company had 15,828,981 and 15,375,981 common shares issued and outstanding, respectively.

 

Stock incentive plan

 

The following is a summary of the option activity:

 

    Options     Weighted
Average
Exercise
Price
 
             
Outstanding – June 30, 2016     160,000     $ 1.50  
Exercisable – June 30, 2016     40,000     $ 1.50  
Granted            
Exercised            
Forfeited/Cancelled            
Outstanding – September 30, 2016     160,000     $ 1.50  
Exercisable – September 30, 2016     40,000     $ 1.50  

 

As of September 30, 2016, the total intrinsic value of options outstanding and exercisable was $444,800 and $111,200, respectively. As of September 30, 2016, the Company has $73,692 in unrecognized stock-based compensation expense attributable to the outstanding options which will be amortized over a period of 2.64 years.

 

For the three months ended September 30, 2016 and 2015, the Company recorded $7,040 and $7,040, respectively, in stock-based compensation related to stock options, which is reflected in the condensed consolidated statements of operations.

 

Issuance of restricted shares – employees and consultants

 

Restricted stock awards are considered outstanding at the time of execution by the Company and the recipient of a restricted stock agreement, as the stock award holders are entitled to dividend and voting rights. As of September 30, 2016, the number of shares granted for which the restrictions have not lapsed was 1,307,836 shares.

 

The Company recognizes the compensation expense for all share-based compensation granted based on the grant date fair value. The grant date fair value of the award is recorded as share–based compensation expense over the respective restriction period. Any portion of the grant awarded to consultants as to which the repurchase option has not lapsed is accrued on the Balance Sheet as a component of accounts payable and accrued expenses. As of September 30, 2016 and June 30, 2016, the accrued stock-based compensation was $183,513 and $179,079, respectively. The Company has the right to repurchase some or all of such shares upon termination of the individual’s service with the Company, whether voluntary or involuntary, for 60 months from the date of termination (“repurchase option”). The shares as to which the repurchase option has not lapsed are subject to forfeiture upon termination of consulting and employment agreements. 

 

In September 2015, the Company amended the original restricted stock agreement for certain award recipients. According to the amendment, 75% of the shares as to which the repurchase option had not lapsed as of September 30, 2015 shall be released from the repurchase option on the third anniversary of the original effective date of the agreement. The remaining 25% of the shares shall be released from the repurchase option on the fourth anniversary of the original effective date. 

  

The following is a summary of restricted shares:

 

Grant Date   Shares
Issued
    Fair
Value
    Shares
Vested
 
June 2014     307,876     $ 633,297       96,211  
July 2014     32,408       2,090       9,452  
August 2014     81,020       205,016       28,020  
September 2014     129,633       256,718       32,408  
March 2015     72,918       228,960       10,128  
June 2015     293,000       439,500       -  
November 2015     36,200       54,300       -  
December 2015     300,000       1,089,400       230,000  
January 2016     40,000       68,000       -  
March 2016     60,000       256,800       60,000  
June 2016     188,000       516,920       -  
August 2016     343,000       1,415,960       40,000  
                         
      1,814,055     $ 5,166,961       506,219  

 

In relation to the above restricted stock agreements for the three months ended September 30, 2016 and 2015, the Company recorded stock–based compensation expense for the shares that have vested of $697,180 and $58,685, respectively.

 

As of September 30, 2016, the Company had $3,553,091 in unrecognized stock based compensation expense related to the unvested shares.