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Stock Options

12 Months Ended

Jun. 30, 2025

Stock Options

NOTE 10 - Stock Options

The Company follows ASC 718 (“Share-Based Payment”), which requires that all share-based payments to employees, including stock options, be recognized as compensation expense in the consolidated financial statements based on their fair values and over the requisite service period. For the fiscal years ended June 30, 2025, 2024 and 2023, the Company recorded non-cash compensation expense of $1,513,000 ($.04 per basic and diluted share), $1,733,000 ($.05 per basic and diluted share) and $1,464,000 ($.04 per basic and diluted share), respectively, relating to stock-based compensation which are included in SG&A in the consolidated statements of income.

The fair value of each option granted was estimated on the date of grant using the Black-Scholes option-pricing model. The Company uses a weighted-average expected stock-price volatility assumption that is a combination of both current and historical implied volatilities of the underlying stock. The implied volatilities were obtained from publicly available data sources. For the weighted-average expected option life assumption, the Company considers the exercise behavior of past grants. The average risk-free interest rate is based on the U.S. Treasury Bond rate for the expected term of the options and the average dividend yield is based on historical experience.

2012 Employee Stock Option Plan

In December 2012, the stockholders approved the 2012 Employee Stock Option Plan (the “2012 Employee Plan”). The 2012 Employee Plan authorizes the granting of awards, the exercise of which would allow up to an aggregate of 1,900,000 shares of the Company’s common stock to be acquired by the holders of such awards. Under this plan, the Company may grant stock options, which are intended to qualify as incentive stock options (ISOs), to valued employees. Any plan participant who is granted ISOs and possesses more than 10% of the voting rights of the Company’s outstanding common stock must be granted an option with a price of at least 110% of the fair market value on the date of grant.

Under the 2012 Employee Plan, stock options may be granted to valued employees with a term of up to 10 years at an exercise price equal to or greater than the fair market value on the date of grant and are exercisable, in whole or in part, at 20% per year beginning on the date of grant. An option granted under this plan shall vest in full upon a “change in control” as defined in the plan. At June 30, 2025, 361,036 stock options were outstanding, 277,636 stock options were exercisable and no further stock options were available for grant under this plan after December 2022.

The fair value of each option granted was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions:


		2025		2024		2023
Risk-free interest rates		n/a		n/a		3.03	%
Expected lives		n/a		n/a		7.27 Years
Expected volatility		n/a		n/a		43	%
Expected dividend yields		n/a		n/a		0	%

The following table reflects activity under the 2012 Plan for the fiscal years ended June 30,:


		2025						2024						2023
					Weighted average						Weighted average						Weighted average
		Options			exercise price			Options			exercise price			Options			exercise price
Outstanding, beginning of year			363,036		$	21.47			521,580		$	19.37			523,080		$	18.59
Granted			—			—			—			—			37,500		$	26.94
Forfeited/Lapsed			—			—			(11,000)		$	(3.16)			—			-
Exercised			(2,000)		$	(26.94)			(147,544)		$	(15.43)			(39,000)		$	(10.44)
Outstanding, end of period			361,036		$	21.44			363,036		$	21.47			521,580		$	19.37
Exercisable, end of period			277,636		$	20.87			190,960		$	20.87			247,628		$	17.16
Weighted average fair value at grant date of options granted			n/a						n/a					$	13.36
Total intrinsic value of options exercised		$	35,000					$	3,972,000					$	822,000
Total intrinsic value of options outstanding		$	2,980,000					$	11,067,000					$	7,968,000
Total intrinsic value of options exercisable		$	2,448,000					$	5,936,000					$	4,330,000

0, 0 and 37,500 options were granted during the fiscal years ended June 30, 2025, 2024 and 2023, respectively. 2,000, 147,544 and 39,000 options were exercised during the fiscal years ended June 30, 2025, 2024 and 2023, respectively. 109,544 of the 147,544 stock options exercised during the fiscal year ended June 30, 2024 were settled by the Company withholding 46,570 from the shares issuable on exercise of the options. The withheld shares of Common stock had an aggregate fair market value on the date of exercise equal to the purchase price being paid. 29,600 of the 39,000 stock options exercised during the fiscal year ended June 30, 2023, were settled by the Company withholding 10,150 from the shares issuable on exercise of the options. The withheld shares of Common stock had an aggregate fair market value on the date of exercise equal to the purchase price being paid. $54,000, $427,000 and $84,000 was received from the remaining option exercises for the fiscal years ended June 30, 2025, 2024 and 2023, respectively, and the actual tax benefit realized for the tax deductions from option exercises was $0, $119,000 and $0 for the years ended June 30, 2025, 2024 and 2023, respectively.

The following table summarizes information about stock options outstanding under the 2012 Employee Plan at June 30, 2025:


		Options outstanding							Options exercisable
				Weighted average
		Number		remaining		Weighted average			Number		Weighted average
Range of exercise prices		outstanding		contractual life		exercise price			exercisable		exercise price
$10.02 ‑ $26.94		361,036		6.15		$	21.44		277,636		$	20.87
		361,036		6.15		$	21.44		277,636		$	20.87

As of June 30, 2025 and 2024, there was $275,000 and 1,094,000 of unearned stock-based compensation cost related to share-based compensation arrangements granted under the 2012 Employee Plan, respectively. 88,676, 101,876 and 109,876 options vested during the years June 30, 2025, 2024 and 2023, respectively. The total grant date fair value of the options vesting during the fiscal years ended June 30, 2025, 2024 and 2023 under this plan was $847,000, $946,000 and $981,000, respectively.

2012 Non-Employee Stock Option Plan

In December 2012, the stockholders approved the 2012 Non-Employee Stock Option Plan (the “2012 Non-Employee Plan”). This plan authorizes the granting of awards, the exercise of which would allow up to an aggregate of 100,000 shares of the Company’s common stock to be acquired by the holders of such awards. Under this plan, the Company may grant stock options to non-employee directors and consultants to the Company and its subsidiaries.

Under the 2012 Non-Employee Plan, stock options may be granted with a term of up to 10 years at an exercise price equal to or greater than the fair market value on the date of grant and are exercisable in whole or in part at 20% per year beginning on the date of grant. An option granted under this plan shall vest in full upon a “change in control” as defined in the plan. At June 30, 2025, 20,400 stock options were outstanding, 18,480 stock options were exercisable and 0 stock options were available for grant under this plan after December 2022.

The following table reflects activity under the 2012 Non-Employee Plan for the fiscal years ended June 30,:


		2025						2024						2023
					Weighted average						Weighted average						Weighted average
		Options			exercise price			Options			exercise price			Options			exercise price
Outstanding, beginning of year			20,400		$	14.39			20,400		$	14.39			20,400		$	14.39
Forfeited/Lapsed			—			—			—			—			—			—
Exercised			—			—			—			—			—			—
Outstanding, end of period			20,400		$	14.39			20,400		$	14.39			20,400		$	14.39
Exercisable, end of period			18,480		$	13.50			16,560		$	12.41			13,920		$	10.99
Weighted average fair value at grant date of options granted			n/a						n/a						n/a
Total intrinsic value of options exercised			n/a						n/a						n/a
Total intrinsic value of options outstanding		$	312,000					$	766,000					$	413,000
Total intrinsic value of options exercisable		$	299,000					$	655,000					$	329,000

No options were exercised or granted during the fiscal years ended June 30, 2025, 2024 and 2023, respectively. No cash was received from the remaining option exercises for each of the fiscal years ended June 30, 2025, 2024 and 2023, and the actual tax benefit realized for the tax deductions from option exercises was $0 for each period.

The following table summarizes information about stock options outstanding under the 2012 Non-Employee Plan at June 30, 2025:


		Options outstanding							Options exercisable
				Weighted average		Weighted					Weighted
		Number		remaining		average exercise			Number		average exercise
Range of exercise prices		outstanding		contractual life		price			exercisable		price
$4.35 - $22.93		20,400		4.65		$	14.39		18,480		$	13.50
		20,400		4.65		$	14.39		18,480		$	13.50

As of June 30, 2025 and 2024, there was $5,000 and $24,000 of unearned stock-based compensation cost related to share-based compensation arrangements granted under the 2012 Non-Employee Plan, respectively. 1,920, 2,640 and 2,640 options vested during the years June 30, 2025, 2024 and 2023, respectively. The total grant date fair value of the options vesting during each of the fiscal years ended June 30, 2025, 2024 and 2023 under this plan was $19,000, $24,000 and $24,000, respectively.

2018 Non-Employee Stock Option Plan

In December 2018, the stockholders approved the 2018 Non-Employee Stock Option Plan (the “2018 Non-Employee Plan”). This plan authorizes the granting of awards, the exercise of which would allow up to an aggregate of 100,000 shares of the Company's common stock to be acquired by the holders of such awards. Under this plan, the Company may grant stock options to non-employee directors and consultants to the Company and its subsidiaries.

Under the 2018 Non-Employee Plan, stock options may be granted with a term of up to 10 years at an exercise price equal to or greater than the fair market value on the date of grant and are exercisable in whole or in part at 20% per year beginning on the date of grant. An option granted under this plan shall vest in full upon a “change in control” as defined in the plan. At June 30, 2025, 64,900 stock options were outstanding, 62,200 stock options were exercisable and 4,000 stock options were available for grant under this plan. No options may be granted under this plan after December 2028.

The following table reflects activity under the 2018 Non-Employee plan for the fiscal year ended June 30,:


		2025						2024						2023
					Weighted average						Weighted average						Weighted average
		Options			exercise price			Options			exercise price			Options			exercise price
Outstanding, beginning of year			68,900		$	14.54			75,000		$	14.83			89,000		$	14.91
Forfeited/Lapsed			(4,000)		$	(22.93)			—			—			—			—
Exercised			—						(6,100)		$	(18.15)			(14,000)		$	(15.32)
Outstanding, end of period			64,900		$	14.02			68,900		$	14.54			75,000		$	14.83
Exercisable, end of period			62,200		$	13.63			59,500		$	13.21			50,720		$	12.87
Weighted average fair value at grant date of options granted			n/a						n/a						n/a
Total intrinsic value of options exercised			n/a					$	141,000					$	209,000
Total intrinsic value of options outstanding		$	1,017,000					$	2,578,000					$	1,486,000
Total intrinsic value of options exercisable		$	999,000					$	2,305,000					$	1,104,000

No options were granted during the fiscal years ended June 30, 2025, 2024 and 2023, respectively. 0, 6,100 and 14,000 options were exercised during the fiscal years ended June 30, 2025, 2024 and 2023, respectively. 6,100 stock options exercised during the fiscal year ended June 30, 2024 were settled by the Company withholding 2,700 from the shares issuable on exercise of the options. The withheld shares of Common stock had an aggregate fair market value on the date of exercise equal to the purchase price being paid. 14,000 stock options exercised during the fiscal year ended June 30, 2023 were settled by the company withholding 7,235 from the shares issuable on exercise of the options. The withheld shares of Common stock had an aggregate fair market value on the date of exercise equal to the purchase price being paid. $0 was received from the remaining option exercises for each of the fiscal years ended June 30, 2025, 2024 and 2023, and the actual tax benefit realized for the tax deductions from option exercises was $0, $30,000 and $44,000 in fiscal 2025, 2024 and 2023, respectively.

The following table summarizes information about stock options outstanding under the 2018 Non- Employee Plan at June 30, 2025:


		Options outstanding							Options exercisable
				Weighted average		Weighted					Weighted
		Number		remaining		average exercise			Number		average exercise
Range of exercise prices		outstanding		contractual life		price			exercisable		price
$8.10 - $22.93		64,900		4.61		$	14.02		62,200		$	13.63
		64,900		4.61		$	14.02		62,200		$	13.63

As of June 30, 2025 and 2024, there was $7,000 and $59,000 of unearned stock-based compensation cost related to share-based compensation arrangements granted under the 2018 Non-Employee Plan, respectively. 2,700, 14,880 and 19,680 options vested during the years June 30, 2025, 2024 and 2023, respectively. The total grant date fair value of the options vesting during the fiscal year ended June 30, 2025, 2024 and 2023 under this plan was $27,000, $124,000 and $149,000, respectively.

2020 Non-Employee Stock Option Plan

In May 2020, the stockholders approved the 2020 Non-Employee Stock Option Plan (the “2020 Non-Employee Plan”). This plan authorizes the granting of awards, the exercise of which would allow up to an aggregate of 100,000 shares of the Company's common stock to be acquired by the holders of such awards. Under this plan, the Company may grant stock options to non-employee directors and consultants to the Company and its subsidiaries.

Under the 2020 Non-Employee Plan, stock options may be granted with a term of up to 10 years at an exercise price equal to or greater than the fair market value on the date of grant and are exercisable in whole or in part at 20% per year beginning on the date of grant. An option granted under this plan shall vest in full upon a “change in control” as defined in the plan. At June 30, 2025, 51,900 stock options were outstanding, 38,520 stock options were exercisable and 45,100 stock options were available for grant under this plan. No options may be granted under this plan after May 2030.

The fair value of each option granted was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions:


		2025		2024		2023
Risk-free interest rates		n/a		n/a		3.03 - 3.40	%
Expected lives		n/a		n/a		7.23 - 7.27 Years
Expected volatility		n/a		n/a		43	%
Expected dividend yields		n/a		n/a		0	%

The following table reflects activity under the 2020 Non-Employee plan for the fiscal year ended June 30,:


		2025						2024						2023
					Weighted average						Weighted average						Weighted average
		Options			exercise price			Options			exercise price			Options			exercise price
Outstanding, beginning of year			56,900		$	23.35			56,900		$	23.35			26,900		$	18.64
Granted			—			—			—			—			30,000		$	27.57
Forfeited/Lapsed			(2,000)		$	(26.94)			—			—			—			—
Exercised			(3,000)		$	(26.94)			—			—			—			—
Outstanding, end of period			51,900		$	23.00			56,900		$	23.35			56,900		$	23.35
Exercisable, end of period			38,520		$	21.79			30,140		$	21.72			18,760		$	20.73
Weighted average fair value at grant date of options granted			n/a						n/a					$	13.74
Total intrinsic value of options exercised		$	32,000						n/a						n/a
Total intrinsic value of options outstanding		$	352,000					$	1,627,000					$	643,000
Total intrinsic value of options exercisable		$	307,000					$	911,000					$	261,000

0, 0 and 30,000 options were granted during the fiscal years ended June 30, 2025, 2024 and 2023, respectively. 3,000, 0 and 0 options were exercised during the fiscal years ended June 30, 2025, 2024 and 2023. 3,000 stock options exercised during the fiscal year ended June 30, 2025 were settled by the Company withholding 2,151 from the shares issuable on exercise of the options. The withheld shares of Common stock had an aggregate fair market value on the date of exercise equal to the purchase price being paid and the actual tax benefit realized for the tax deductions from option exercises was $0 for the year ending June 30, 2025.

The following table summarizes information about stock options outstanding under the 2020 Non- Employee Plan at June 30, 2025:


		Options outstanding							Options exercisable
				Weighted average
		Number		remaining		Weighted average			Number		Weighted average
Range of exercise prices		outstanding		contractual life		exercise price			exercisable		exercise price
$11.40 - $30.71		51,900		6.54		$	23.00		38,520		$	21.79
		51,900		6.54		$	23.00		38,520		$	21.79

As of June 30, 2025 and 2024, there was $85,000 and $215,000 of unearned stock-based compensation cost related to share-based compensation arrangements granted under the 2020 Non-Employee Plan, respectively. 11,380 options vested during each of the years June 30, 2025, 2024 and 2023, respectively. The total grant date fair value of the options vesting during the fiscal year ended June 30, 2025, 2024 and 2023 under this plan was $129,000 each year.

2022 Employee Stock Option Plan

In December 2022, the stockholders approved the 2022 Employee Stock Option Plan (the “2022 Employee Plan”). The plan authorizes the granting of awards, the exercise of which would allow up to an aggregate of 950,000 shares of the Company’s common stock to be acquired by the holders of such awards. Under this plan, the Company may grant stock options, which are intended to qualify as incentive stock options (“ISOs”) or non-incentive stock options, to valued employees. Any plan participant who is granted ISOs and possesses more than 10% of the voting rights of the Company’s outstanding common stock must be granted an option with a price of at least 110% of the fair market value on the date of grant.

Under the 2022 Employee Plan, stock options may be granted to valued employees with a term of up to 10 years at an exercise price equal to or greater than the fair market value on the date of grant and are exercisable, in whole or in part, at 20% per year beginning on the date of grant. An option granted under this plan shall vest in full upon a “change in control” as defined in the plan. At June 30, 2025, 130,000 stock options were outstanding, 52,000 stock options were exercisable and 820,000 stock options were available for grant under this plan. No options may be granted under this plan after December 2032.

The fair value of each option granted was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions:


		2025		2024		2023
Risk-free interest rates		n/a		4.42 - 4.62	%	3.84	%
Expected lives		n/a		5.63 - 5.87 Years		7.28 Years
Expected volatility		n/a		56	%	45	%
Expected dividend yields		n/a		.76 - 1.01	%	0.62	%

The following table reflects activity under the 2022 Employee plan for the fiscal year ended June 30,:


		2025						2024						2023
					Weighted average						Weighted average						Weighted average
		Options			exercise price			Options			exercise price			Options			exercise price
Outstanding, beginning of year			130,000		$	41.38			5,000		$	40.01			—			—
Granted			—			—			130,000		$	41.38			5,000		$	40.01
Forfeited/Lapsed			—			—			(5,000)		$	(40.01)			—			—
Outstanding, end of period			130,000		$	41.38			130,000		$	41.38			5,000		$	40.01
Exercisable, end of period			52,000		$	41.38			26,000		$	41.38			1,000		$	40.01
Weighted average fair value at grant date of options granted			n/a					$	21.29					$	19.77
Total intrinsic value of options exercised			n/a						n/a						n/a
Total intrinsic value of options outstanding		$	81,000					$	1,375,000					$	—
Total intrinsic value of options exercisable		$	32,000					$	275,000					$	—

0, 130,000 and 5,000 options were granted during the fiscal year ended June 30, 2025, 2024 and 2023, respectively. No options were exercised during the fiscal year ended June 30, 2025, 2024 and 2023.

The following table summarizes information about stock options outstanding under the 2022 Employee Plan at June 30, 2025:


		Options outstanding							Options exercisable
				Weighted average
		Number		remaining		Weighted average			Number		Weighted average
Range of exercise prices		outstanding		contractual life		exercise price			exercisable		exercise price
$21.60 - $49.39		130,000		8.81		$	41.38		52,000		$	41.38
		130,000		8.81		$	41.38		52,000		$	41.38

As of June 30, 2025 and 2024, there was $1,536,000 and $2,066,000 of unearned stock-based compensation cost related to share-based compensation arrangements granted under the 2020 Non-Employee Plan, respectively. 26,000, 26,000 and 1,000 options vested during the year ended June 30, 2025, 2024 and 2023, respectively. The total grant date fair value of the options vesting during the fiscal year ended June 30, 2025, 2024 and 2023 under this plan was $559,000, $553,000 and $20,000, respectively.