Stockholders' Equity | 9 Months Ended |
Mar. 31, 2015 |
Stockholders' Equity | -3 | Stockholders’ Equity | | | | | | | | | | | | | | | |
Common Stock |
As of March 31, 2015, the Company had 112,293,486 shares of common stock issued and 112,213,396 shares of common stock outstanding. |
During the nine months ended March 31, 2015, the Company: |
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| • | | issued 64,000 shares of common stock for the exercise of stock options and received cash proceeds of $0.1 million | | | | | | | | | | | | | |
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| • | | issued 653,322 shares of common stock for vested restricted stock units at par value | | | | | | | | | | | | | |
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| • | | retired 539,045 shares of treasury stock with a book value of $1.0 million | | | | | | | | | | | | | |
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| • | | acquired 161,421 shares of common stock at a cost of $0.2 million, which is included in treasury stock. | | | | | | | | | | | | | |
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Employee and Director Stock Compensation |
During the nine months ended March 31, 2015 and 2014, the Company recognized stock-based compensation for employees and directors of $1.5 million and $1.6 million, respectively. |
Options |
The fair value of options is estimated on the date of grant using the Black-Scholes-Merton option pricing model. No options were granted during the nine months ended March 31, 2015. |
The table below illustrates the range of assumptions used in estimating the fair value of the options granted during the nine months ended March 31, 2014: |
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Expected volatility | | 64.6% - 68.6% | | | | | | | | | | | | | | |
Expected dividends | | - | | | | | | | | | | | | | | |
Expected term (years) | | 2.60 - 3.04 | | | | | | | | | | | | | | |
Risk-free rate | | 0.49% - 0.9% | | | | | | | | | | | | | | |
A summary of option activity from July 1, 2014 to March 31, 2015 is presented below (in thousands except per share and year amounts): |
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Options | | Shares | | | Weighted | | | Weighted | | | Aggregate | |
Average | Average | Intrinsic |
Exercise | Remaining | Value |
Price | Contractual Term | |
| (years) | |
Outstanding at July 1, 2014 | | | 3,152 | | | $ | 1.68 | | | | | | | | | |
Options granted | | | — | | | | — | | | | | | | | | |
Exercised | | | (64 | ) | | | 1.39 | | | | | | | | | |
Forfeited, cancelled or expired | | | (449 | ) | | | 1.82 | | | | | | | | | |
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Outstanding at March 31, 2015 | | | 2,639 | | | $ | 1.66 | | | | 3.03 | | | $ | — | |
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Exercisable at March 31, 2015 | | | 2,229 | | | $ | 1.66 | | | | 2.04 | | | $ | — | |
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The estimated grant date fair value of options granted during the nine months ended March 31, 2014 was $0.4 million. |
Restricted Stock Awards and Units |
A summary of the activity of the Company’s restricted stock awards from July 1, 2014 to March 31, 2015 is presented below (in thousands except per share amounts): |
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Restricted Stock Awards | | Shares | | | Weighted Average | | | | | | | | | |
Grant Date Fair | | | | | | | | |
| | Value Per Share | | | | | | | | |
Outstanding July 1, 2014 | | | 24 | | | $ | 1.57 | | | | | | | | | |
Vested | | | (18 | ) | | | 1.67 | | | | | | | | | |
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Outstanding March 31, 2015 | | | 6 | | | $ | 1.29 | | | | | | | | | |
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A summary of the activity of the Company’s restricted stock units from July 1, 2014 to March 31, 2015 is presented below (in thousands except per share amounts): |
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Restricted Stock Units | | Restricted Stock | | | Weighted Average | | | | | | | | | |
Units | Grant Date Fair | | | | | | | | |
| Value | | | | | | | | |
Outstanding at July 1, 2014 | | | 1,153 | | | $ | 1.42 | | | | | | | | | |
Granted | | | 1,151 | | | | 1.65 | | | | | | | | | |
Vested | | | (653 | ) | | | 1.45 | | | | | | | | | |
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Outstanding at March 31, 2015 | | | 1,651 | | | $ | 1.56 | | | | | | | | | |
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As of March 31, 2015, there was $2.0 million of total unrecognized compensation cost related to all unvested share awards and options. |
Consultant Stock Compensation |
During the 2015 fiscal year, the Company issued 225,000 restricted stock units to consultant advisors, which will vest annually over two years. For the nine month period ended March 31, 2015, the Company expensed approximately $34,000 for the above awards. |
Incentive Fee |
In February 2013, the Company entered into a contract with a consultant in connection with a transaction with a wholly owned subsidiary of Telefonaktiebolaget L M Ericsson (“Ericsson”). See Note 9 of the Notes to the Condensed Consolidated Financial Statements for more details. The terms of the contract included provisions for issuance of 1.2 million shares of the Company’s stock in two tranches if specified share price conditions were met (hereinafter referred to as the “Incentive Fee(s)”) by certain dates. In August 2014, the Incentive Fee on the first tranche of 500,000 shares expired as the volume weighted average trading price of the Company’s common stock over 20 days did not equal or exceed $3.00 per share. In February 2015, the Incentive Fee on the second tranche of 700,000 shares expired as the volume weighted average trading price of the Company’s common stock over 20 days did not equal or exceed $5.00 per share. |
The Company recognized a gain of $0.3 million and $0.2 million, respectively, for the nine months ended March 31, 2015 and 2014 for the change in the fair value of the liability classified stock awards. |
Adoption of replacement shareholder rights plan |
On January 20, 2015, the Board of Directors of the Company adopted a Tax Benefits Preservation Agreement, dated January 20, 2015, between the Company and Computershare Trust Company, N.A., as Rights Agent (the “Agreement”) to replace the Company’s existing Tax Benefits Preservation Agreement, which expired on January 29, 2015, (the “Expiring Agreement”). The Agreement is substantially the same as the Expiring Agreement. |
The Agreement is designed to preserve the Company’s substantial tax assets associated with net operating loss carry forwards (“NOLs”) and built in losses under Section 382 of the Internal Revenue Code. The Company’s ability to use its NOLs and built in losses would be limited if there was an “ownership change” under Section 382. This would occur if shareholders owning (or deemed under Section 382 of the Internal Revenue Code to own) 5% or more of the Company’s stock increase their collective ownership of the aggregate amount of outstanding shares of the Company by more than 50 percentage points over a rolling three-year period. |
Pursuant to the terms of the Agreement, the Board of Directors declared a dividend distribution of one Preferred Stock Purchase Right (a “Right”) for each outstanding share of common stock, par value $0.001 per share of the Company (the “Common Stock”) to stockholders of record as of the close of business on January 29, 2015 (the “Record Date”). In addition, one Right will automatically attach to each share of Common Stock issued between the Record Date and the Distribution Date (as defined in the Agreement). Each Right entitles the registered holder thereof to purchase from the Company a unit consisting of one ten-thousandth of a share (a “Unit”) of Series A Junior Participating Cumulative Preferred Stock, par value $0.001 per share, of the Company (the “Preferred Stock”) at a cash exercise price of $15.00 per Unit (the “Exercise Price”), subject to adjustment, under certain conditions specified in the Agreement. For additional information, please refer to the Company’s Registration Statement on Form 8-A and the Company’s Current Report on Form 8-K, both filed with the Securities and Exchange Commission on January 21, 2015. |
The Rights are not exercisable until the Distribution Date (as defined in the Agreement) and will expire at the earlier of (i) January 29, 2018, (ii) the time when the Rights are redeemed as provided therein; (iii) the time when the Rights are exchanged as provided therein; (iv) the repeal of Section 382 of the Internal Revenue Code if the Independent Directors determine that this Agreement is no longer necessary for the preservation of Tax Benefits (as defined in the Agreement), (v) the beginning of the taxable year of the Company to which the Board determines that no Tax Benefits may be carried forward, or (vi) the close of business on January 29, 2016, if stockholder approval of the Agreement has not been obtained prior to that time, unless previously redeemed or exchanged by the Company. |