Equity Transactions and Share-Based Compensation | 6 Months Ended |
Dec. 31, 2013 |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ' |
Equity Transactions and Share-Based Compensation | ' |
4. Equity Transactions and Share-Based Compensation |
The Company recognized share-based compensation expense related to equity awards to employees, directors and consultants of $2.6 million and $2.9 million during the three months ended December 31, 2013 and 2012, respectively and $5.3 million and $4.5 million during the six months ended December 31, 2013 and 2012, respectively. |
During the three months ended December 31, 2013 the Company granted certain directors 227,500 shares of common stock which may not be sold or transferred until such time as the director leaves the board for any reason, including a change in control, or other permitted circumstances. The weighted average grant date fair value of the shares was $3.95 per share. |
Stock Options and Warrants |
The Company has granted stock options to certain employees and directors under the Employee Share Option Plan (the “Plan”). The Plan is designed to assist in the motivation and retention of employees and to recognize the importance of employees to the long-term performance and success of the Company. The Company has also granted stock options to certain consultants outside of the Plan. The majority of the options to purchase common stock vest on the anniversary of the date of grant, which ranges from one to three years. Additionally, certain stock options vest upon the closing price of the Company’s common stock reaching certain minimum levels, as defined in the agreements. Share-based compensation expense related to options granted to employees is recognized on a straight-line basis over the related vesting term. Share-based compensation expense related to options granted to consultants is recognized ratably over each vesting tranche of the options. |
In November 2009, the Company adopted the 2009 Stock Incentive Plan (the “Stock Incentive Plan”). The Stock Incentive Plan initially provided for a maximum of 6,000,000 shares of common stock to be reserved for the issuance of stock options and other stock-based awards. Commencing on January 1, 2012, and on each January 1st thereafter, through January 1, 2019, the share reserve automatically adjusts so that it equals 17.5% of the weighted average number of shares of common stock outstanding reduced by the sum of any shares of common stock issued under the Stock Incentive Plan and any shares of common stock subject to outstanding awards under the Stock Incentive Plan. |
In January 2010, the Company issued 1,000,000 options to purchase common stock to a consultant under the Stock Incentive Plan in consideration for various services to be performed for the Company. The options to purchase common stock are exercisable at A$6.33 per share and vest upon the trading price of the Company’s CHESS Depositary Interests reaching certain minimum levels on the Australian Securities Exchange, which range from A$1.75 to A$3.22 per share. The options are re-measured each reporting date and as of December 31, 2013 were valued at $0.97 per option, which is being expensed ratably over the vesting period of each tranche, which ranges from 0.61 years to 0.78 years. The options will be re-valued on a quarterly basis and marked to market until exercised. |
|
The following is a summary of activity related to stock options held by employees and directors during the six months ended December 31, 2013: |
|
| | | | | | | | | | | | | | | | |
| | Number of | | | Weighted | | | Weighted | | | Aggregate Intrinsic | |
Options | Average | Average | Value |
| Exercise Price | Remaining | |
| | Contractual | |
| | Life (in years) | |
| | | | | | | | | | | (in thousands) | |
Outstanding as of July 1, 2013 | | | 5,121,807 | | | $ | 4.05 | | | | | | | | | |
Cancelled | | | (74,396 | ) | | | 5.55 | | | | | | | | | |
Exercised | | | (1,250,000 | ) | | | 1.76 | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Outstanding as of December 31, 2013 | | | 3,797,411 | | | $ | 4.77 | | | | 5.5 | | | $ | 2,068 | |
| | | | | | | | | | | | | | | | |
Exercisable as of December 31, 2013 | | | 1,666,024 | | | $ | 4.8 | | | | 5.7 | | | $ | 755 | |
| | | | | | | | | | | | | | | | |
The following is a summary of activity related to stock options and warrants held by persons other than employees and directors during the six months ended December 31, 2013: |
|
| | | | | | | | | | | | | | | | |
| | Number of | | | Weighted | | | Weighted | | | Aggregate Intrinsic | |
Options | Average | Average | Value |
| Exercise Price | Remaining | |
| | Contractual | |
| | Life (in years) | |
| | | | | | | | | | | (in thousands) | |
Outstanding as of July 1, 2013 | | | 4,258,937 | | | $ | 6.89 | | | | | | | | | |
Granted | | | 300,000 | | | | 3.11 | | | | | | | | | |
Exercised | | | (155,000 | ) | | | 2.56 | | | | | | | | | |
Expired | | | (2,268,934 | ) | | | 8.65 | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Outstanding as of December 31, 2013 | | | 2,135,003 | | | $ | 4.8 | | | | 1.9 | | | $ | 888 | |
| | | | | | | | | | | | | | | | |
Exercisable as of December 31, 2013 | | | 1,135,003 | | | $ | 4.09 | | | | 2.6 | | | $ | 888 | |
| | | | | | | | | | | | | | | | |
The aggregate intrinsic value is defined as the difference between the market value of the Company’s common stock as of the end of the period and the exercise price of the in-the-money stock options. The total intrinsic value of stock options exercised during the three months ended December 31, 2013 and 2012 was $0 and $0.1 million, respectively. The total intrinsic value of stock options exercised during the six months ended December 31, 2013 and 2012 was $1.8 million and $0.1 million, respectively. |
The Company used the following weighted average assumptions in calculating the fair value of options granted during the six months ended December 31, 2013 and 2012: |
|
| | | | | | | | | | | | | | | | |
| | Six Months Ended | | | | | | | | | |
December 31, | | | | | | | | |
| | 2013 | | | 2012 | | | | | | | | | |
Number of stock options granted | | | 300,000 | | | | 300,000 | | | | | | | | | |
Expected dividend yield | | | 0 | % | | | 0 | % | | | | | | | | |
Risk-free interest rate | | | 1.54 | % | | | 0.91 | % | | | | | | | | |
Expected volatility | | | 55 | % | | | 55 | % | | | | | | | | |
Expected life (in years) | | | 5 | | | | 6 | | | | | | | | | |
The fair value of each stock option was estimated at the grant date using the Black-Scholes option pricing model, with the exception of grants subject to market conditions, which were valued using a Monte Carlo option pricing model. The Company has not historically paid dividends to its stockholders and, as a result, assumed a dividend yield of 0%. The risk free interest rate is based upon the rates of U.S. Treasury bonds with a term equal to the expected term of the option. Due to the Company’s limited Nasdaq trading history, the expected volatility used to value options granted after January 27, 2010 is based upon a blended rate of the historical share price of the Company’s stock on the Australian Securities Exchange and the volatility of peer companies traded on U.S. exchanges operating in the same industry as the Company. The expected term of the options to purchase common stock issued to employees and directors is based upon the simplified method, which is the mid-point between the vesting date of the option and its contractual term unless a reasonable alternate term is estimated by management. The expected term of the options to purchase common stock issued to consultants is based on the contractual term of the awards. |
|
Restricted Stock |
The Company has granted shares of restricted stock to certain employees and consultants under the Stock Incentive Plan. During the period prior to vesting, the holder of the non-vested restricted stock will have the right to vote and the right to receive all dividends and other distributions declared. All non-vested shares of restricted stock are reflected as outstanding; however, they have been excluded from the calculation of basic earnings per share. |
For employees, the fair value of restricted stock is measured on the date of grant using the price of the Company’s common stock on that date. Share-based compensation expense for restricted stock issued to employees is recognized on a straight-line basis over the requisite service period, which is generally the longest vesting period. For restricted stock granted to consultants, the fair value of the awards is re-valued on a quarterly basis and marked to market until vested. Share-based compensation expense for restricted stock issued to consultants is recognized ratably over each vesting tranche. |
The following is a summary of activity related to restricted stock awards during the six months ended December 31, 2013: |
|
| | | | | | | | | | | | | | | | |
| | Number of Restricted | | | Weighted Average | | | | | | | | | |
Stock Awards | Grant Date Fair Value | | | | | | | | |
Unvested as of July 1, 2013 | | | 3,254,403 | | | $ | 3.31 | | | | | | | | | |
Granted | | | 75,000 | | | | 3.54 | | | | | | | | | |
Vested | | | (929,150 | ) | | | 3.35 | | | | | | | | | |
Cancelled | | | (4,500 | ) | | | 3.46 | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Unvested as of December 31, 2013 | | | 2,395,753 | | | $ | 3.3 | | | | | | | | | |
| | | | | | | | | | | | | | | | |