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Note 3 - Equity
 3 Months Ended
Dec. 31, 2022
Notes to Financial Statements  
Stockholders' Equity Note Disclosure [Text Block]

NOTE 3.  EQUITY

 

Restricted Stock Units

  

Restricted

Stock Units

    

Weighted Average
Grant Date
Fair Value

($/share)

  
                 

Outstanding at June 30, 2022

     906,155     $ 5.34  

Granted

     50,994       4.82  

Vested and issued

     (12,950 )    

5.71

  

Forfeited

     (2,568

)

     5.84  

Outstanding at December 31, 2022

     941,631     $ 5.30  

 

As of December 31, 2022, there were 19,202 restricted stock units outstanding that had vested but for which shares of Common Stock had not yet been issued pursuant to the terms of the applicable agreement.

 

As of December 31, 2022, there was approximately $5.0 million of unrecognized stock-based compensation expense under our equity compensation plans, which is expected to be recognized on a straight-line basis over a weighted average period of 1.36 years.

 

Warrants

 

Outstanding warrants were issued in connection with private placements of the Company’s Common Stock and with the restructuring of the Series B Preferred that occurred in March of 2018. The following table summarizes information about fixed stock warrants outstanding at December 31, 2022:

 

Warrants Outstanding

at December 31, 2022

    

Warrants Exercisable

at December 31, 2022

  

Range of

exercise

prices

   

Number

Outstanding

    

Weighted average

remaining
contractual

life (years)

    

Weighted

average

exercise price

    

Number

exercisable

    

Weighted

average

exercise price

  
$ 4.00       1,085,068       0.10     $ 4.00       1,085,068     $ 4.00  
$ 10.00       23,737       0.07     $ 10.00       23,737     $ 10.00  
          1,108,805       0.10     $ 4.13       1,108,805     $ 4.13  

 

 

 

Preferred Stock

 

The Company’s articles of incorporation currently authorizes the issuance of up to 30,000,000 shares of ‘blank check’ preferred stock, par value $0.01 (“Preferred Stock”), with designations, rights, and preferences as may be determined from time to time by the Company’s Board of Directors, of which 700,000 shares are currently designated as Series B Preferred Stock (“Series B Preferred”) and 550,000 shares are designated as Series B-1 Preferred Stock (“Series B-1 Preferred”). Both classes of Series B Preferred Stock pay dividends at a rate of 7% per annum if paid by the Company in cash, or 9% if paid by the Company by the issuance of additional shares of Series B-1 Preferred, or Series B-1Preferred, as applicable.

 

The Company does business with some of the largest retailers and wholesalers in the world. Management believes the Series B-1 Preferred favorably impacts the Company’s overall cost of capital in that it is: (i) perpetual and, therefore, an equity instrument that positively impacts the Company’s coverage ratios; (ii) possesses a below market dividend rate relative to similar instruments; (iii) offers the flexibility of a paid-in-kind (PIK) payment option; and (iv) is without covenants. After exploring alternative options for redeeming the Series B-1 Preferred, management determined that alternative financing options were materially more expensive, or would impair the Company’s net cash position, which management believes could cause customer concerns and negatively impact the Company’s ability to attract new business.

 

Section 4 of the Company’s First Amended and Restated Certificate of Designation of the Relative Rights, Powers and Preferences of the Series B-1 Preferred Stock, as amended (the “Series B-1 COD”) provides the Company’s Board of Directors with the right to redeem any or all of the outstanding shares of the Company’s Series B-1 Preferred for a cash payment of $10.70 per share at any time upon providing the holders of Series B-1 Preferred at least ten days written notice that sets forth the date on which the redemption will occur (the “Redemption Notice”).

 

As of December 31, 2022, a total of 625,375 shares of Series B Preferred and 212,402 shares of Series B-1 Preferred were issued and outstanding.

 

Share Repurchase Program

 

On May 9, 2019, our Board of Directors approved the repurchase of up to $4.0 million in shares of our Common Stock, which repurchases may be made in privately negotiated transactions or in the open market at prices per share not exceeding the then-current market prices (the “Share Repurchase Program”). Under the Share Repurchase Program, management has discretion to determine the dollar amount of shares to be repurchased and the timing of any repurchases in compliance with applicable laws and regulations, including Rule 12b-18 of the Exchange Act.

 

On March 17, 2020, the Board, given the extreme uncertainty due to COVID-19 at the time, suspended the Share Repurchase Program.

 

On May 18, 2021, our Board of Directors resumed its Share Repurchase Program, and increased the Program by an additional $4 million bringing the total authorized under the Share Repurchase Program to $8 million.

 

On August 31, 2021, our Board of Directors approved a further increase to its Share Repurchase program to $12 million in shares of our Common Stock which added an additional $4 million to the Share Repurchase Program.

 

On May 10, 2022, our Board of Directors approved an increase to its Share Repurchase Program with an additional $9 million in shares of our Common Stock.

 

Since inception of the Share Repurchase Program through December 31, 2022, a total of $21,000,000 in shares of Common Stock have been approved under the Share Repurchase Program, and 1,823,669 shares of Common Stock have been repurchased at an average purchase price of $5.89, resulting in $10,265,181 remaining available to repurchase under the current Share Repurchase Program. From time-to-time, our Board of Directors may authorize further increases to our Share Repurchase Program. The Share Repurchase Program may be suspended for periods of time or discontinued at any time, at the Board’s discretion.

 

 

 

The following table provides information about repurchases of our Common Stock registered pursuant to Section 12 of the Exchange Act, during the three months ended December 31, 2022:

 

Period (1)

   Total
Number of
Shares
Purchased		     Average
Price Paid
Per Share		    

 

Dollars Expended by Period Under the Plans or
Programs		     Remaining
Amount
Available
for Future
Share
Repurchases
Under the
Plans or
Programs 		 

July 1, 2022 – September 30, 2022:

     20,859     $ 4.97     $ 103,657     $ 10,713,447  

October 1, 2022 – December 31, 2022:

     88,741     $ 5.05     $ 448,266     $ 10,265,181  

 

(1)

We close our books and records on the last calendar day of each month to align our financial closing with our business processes.