Stockholders' Equity | Note 7. Stockholders’ Equity Stock Options In December 2007, we established the 2007 Equity Compensation Plan (the “Plan”). The Plan was approved by our board of directors and stockholders. The purpose of the Plan is to grant stock and options to purchase our common stock to our employees, directors and key consultants. On November 10, 2016, the maximum number of shares of common stock that may be issued pursuant to awards granted under the Plan increased from 5,000,000 7,000,000 2,161,160 The majority of awards issued under the Plan vest immediately or over three years, with a one year cliff vesting period, and have a term of ten years. Stock-based compensation cost is measured at the grant date, based on the fair value of the awards that are ultimately expected to vest, and recognized on a straight-line basis over the requisite service period, which is generally the vesting period. All Options Vested Options Unvested Options Shares Weighted Shares Weighted Shares Weighted Outstanding at July 1, 2015 2,466,836 $ 1.22 2,256,254 $ 1.21 210,582 $ 1.29 Granted 520,982 0.83 299,750 0.77 221,232 0.68 Options vesting - - 226,798 0.87 (226,798) 0.87 Exercised - - - - - - Forfeited/Cancelled (270,625) 1.04 (265,469) 1.03 (5,156) 1.80 Outstanding at June 30, 2016 2,717,193 1.16 2,517,333 1.17 199,860 1.06 Granted 630,117 1.11 542,000 1.12 88,117 1.05 Options vesting - - 152,518 1.04 (152,518) 1.04 Exercised - - - - - - Forfeited/Cancelled (217,000) 1.23 (217,000) 1.23 - - Outstanding at June 30, 2017 3,130,310 $ 1.15 2,994,851 $ 1.15 135,459 $ 1.07 Years Ended June 30, 2017 2016 Expected dividend yield 0 % 0 % Risk-free interest rate 1.27% - 2.06 % 1.17% - 1.87 % Expected life (in years) 5 - 6 5 - 6 Expected volatility 76.9% - 81.4 % 80% - 84 % The weighted average remaining contractual life of all options outstanding as of June 30, 2017 was 5.11 4.93 91,111 91,111 During the year ended June 30, 2017, the Company granted 630,117 362,531 375,244 263,870 111,374 77,487 During the year ended June 30, 2016, the Company granted 520,982 256,256 305,734 On June 30, 2017, options originally issued to employees to purchase an aggregate of 173,237 40,387 82,430 On December 4, 2015, options originally issued to former directors to purchase an aggregate of 250,000 29,815 Option Options Remaining Options $ 0.59 8,150 5.00 8,150 0.60 5,000 5.00 5,000 0.65 6,150 5.00 6,150 0.70 225,000 8.44 225,000 0.77 59,500 6.26 59,500 0.80 16,000 8.15 16,000 0.90 25,667 6.81 25,667 0.97 6,000 5.00 6,000 1.00 375,249 2.87 372,747 1.02 287,000 3.36 287,000 1.05 507,529 8.27 435,530 1.07 53,898 5.30 53,898 1.09 166,165 8.48 105,207 1.10 255,000 3.50 255,000 1.14 3,674 5.00 3,674 1.15 228,000 4.41 228,000 1.20 31,414 6.69 31,414 1.25 32,000 5.63 32,000 1.30 263,000 4.68 263,000 1.50 380,000 1.75 380,000 1.75 1,067 5.00 1,067 1.80 169,425 5.96 169,425 1.85 24,000 5.59 24,000 1.97 1,422 5.00 1,422 Total 3,130,310 2,994,851 Warrants Number of Weighted Outstanding, June 30, 2015 305,000 $ 1.26 Granted 1,785,000 1.25 Exercised - - Expired/Cancelled (100,000) 1.22 Outstanding, June 30, 2016 1,990,000 1.25 Granted - - Exercised - - Expired/Cancelled (5,000) 3.75 Outstanding, June 30, 2017 1,985,000 $ 1.25 Exercisable, June 30, 2016 1,990,000 $ 1.25 Exercisable, June 30, 2017 1,985,000 $ 1.25 There was no intrinsic value for all warrants outstanding as of June 30, 2017, based on the fair value of the Company’s common stock on June 30, 2017. Warrant Warrants Remaining Warrants $ 1.19 100,000 4.48 100,000 1.25 1,885,000 3.95 1,885,000 Total 1,985,000 1,985,000 Restricted Common Stock Prior to July 1, 2015, the Company issued 889,321 971,897 405,504 During the year ended June 30, 2016, the Company issued 414,366 314,577 0.59 1.09 During the year ended June 30, 2017, the Company issued an additional 269,510 276,600 0.97 1.14 The total fair value of restricted common stock vested during the year ended June 30, 2017 was $ 366,291 412,938 Number of Fair Value Weighted Non-vested, June 30, 2015 736,747 $ 566,393 0.96 Granted 414,366 314,577 0.76 Vested (444,471) (378,341) 0.99 Forfeited - - - Non-vested, June 30, 2016 706,642 502,629 0.82 Granted 269,510 276,600 1.03 Vested (462,958) (366,291) 0.82 Forfeited - - - Non-vested, June 30, 2017 513,194 $ 412,938 $ 0.92 Issuance of Common Stock On June 23, 2016, we entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with an institutional investor, each member of our board of directors and certain of our executive officers (collectively, the “Investors”) pursuant to which we sold to the Investors, on June 24, 2016, an aggregate of 5,200,000 1.00 5,200,000 1.25 4,783,830 In connection with the financing we entered into a Registration Rights Agreement with the Investors (the “Registration Rights Agreement”) on June 24, 2016, pursuant to which we agreed to register for resale by the Investors the Shares, the shares of common stock issuable upon exercise of the Warrants and the shares of common stock issuable upon exercise of the Placement Agent Warrants (as defined below). We committed to file the registration statement no later than July 24, 2016 and to cause the registration statement to become effective no later than October 22, 2016. On July 22, 2016, we filed a registration statement with the SEC pursuant to the Registration Rights Agreement, and the registration statement was declared effective on October 19, 2016 Common Stock Repurchase and Retirement On March 10, 2015, the Compensation Committee of our Board of Directors authorized the repurchase, over a 12-month period on the last day of each trading window and otherwise in accordance with our insider trading policies, of up to $ 139,181 1.60 On May 24, 2016, the Compensation Committee of our Board of Directors authorized the repurchase, over a 12-month period on the last day of each trading window and otherwise in accordance with our insider trading policies, of up to $ 100,000 1.60 On February 16, 2017, the Compensation Committee of our Board of Directors authorized the repurchase, over a 12-month period on the last day of each trading window and otherwise in accordance with our insider trading policies, of up to $ 300,000 2.00 During the years ended June 30, 2017 and 2016, we repurchased 195,958 46,898 1.02 0.80 199,323 37,747 175,050 Shares repurchased are retired and deducted from common stock for par value and from additional paid in capital for the excess over par value. Direct costs incurred to acquire the shares are included in the total cost of the shares. Period Total Number 1 Average Total Number of Shares Approximate Dollar Value September 2015 1,848 $ 0.95 - - December 2015 27,450 $ 0.67 - - June 2016 17,600 $ 1.00 - - Year ended June 30, 2016 46,898 $ 0.80 - - September 2016 25,508 $ 1.04 - - December 2016 54,200 $ 1.03 - - March 2017 7,250 $ 1.10 - $ 292,025 June 2017 109,000 $ 1.00 - $ 175,050 Year ended June 30, 2017 195,958 $ 1.02 - $ 175,050 1 |