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Note 8 - Share-based Compensation
 6 Months Ended
Dec. 31, 2025
Notes to Financial Statements  
Share-Based Payment Arrangement [Text Block]

Note 8. Share-Based Compensation

 

The Company’s share-based compensation plans are described in Note 8 to the financial statements included in the Company’s Annual Report on Form 10-K for fiscal 2025. Share-based compensation expenses were $1,114,000 and $1,652,000 for the six months ended December 31, 2025, and 2024, respectively. This expense is included in selling, general and administrative, research and development, and cost of revenues expense in the Condensed Statements of Operations.

 

Stock Options

 

Stock option transactions during the six months ended December 31, 2025, are summarized as follows:

 

      

Weighted-Average

 
      

Exercise Price

 
  

Number of Shares

  

per Share

 

Outstanding at June 30, 2025

  605,379  $9.75 

Granted

  58,500  $23.95 

Exercised

  (21,396) $10.83 

Cancelled or Forfeited

  (4,988) $22.36 

Outstanding at December 31, 2025

  637,495  $10.92 

 

The following assumptions were used to estimate the fair value of stock options granted:

 

  

Six Months Ended

  

Fiscal Year Ended

 
  

December 31, 2025

  

June 30, 2025

 

Risk-free interest rate

 

3.80%

  

3.69 - 4.14%

 

Expected term (years)

 6  6 

Expected volatility

 

54%

  

53%

 

 

The intrinsic value of an option is the amount by which the fair value of the underlying stock exceeds its exercise price. On December 31, 2025, the weighted average remaining contractual term for all outstanding stock options was 5.9 years and the aggregate intrinsic value of the options was $11,605,000. Outstanding on December 31, 2025, there were 637,495 stock options issued to employees, of which 441,255 were vested and exercisable and had an aggregate intrinsic value of $8,987,000. As of December 31, 2025, $865,000 of total unrecognized compensation expense related to stock options is expected to be recognized over a weighted-average period of approximately 2.3 years.

 

Restricted Stock

 

During the six months ended December 31, 2025, the Company issued restricted stock awards to employees totaling 22,300 shares of common stock, with a weighted average vesting term of 3 years and a weighted average fair value of $23.95 per share. During the six months ended December 31, 2025, the Company issued restricted stock awards to its Board of Directors totaling 21,000 shares of common stock, with a vesting term of 6 months and a fair value of $27.42 per share. There were 65,374 shares of unvested restricted stock with a weighted average fair value of $22.02 per share outstanding as of December 31, 2025. As of December 31, 2025, $1,034,000 of total unrecognized compensation expense related to restricted stock awards is expected to be recognized over a weighted-average period of approximately 1.6 years.

 

During the six months ended December 31, 2025, the Company issued restricted stock units to employees totaling 56,318 shares of common stock, with a weighted average vesting term of 3 years and a weighted average fair value of $23.96 per share. During the six months ended December 31, 2025, there were 6,973 restricted stock units cancelled or forfeited. There were 94,301 shares of unvested restricted stock units with a weighted average fair value of $21.27 per share outstanding as of December 31, 2025. As of December 31, 2025, $1,337,000 of total unrecognized compensation expense related to restricted stock units is expected to be recognized over a weighted-average period of approximately 2.5 years.

 

Performance-Based Restricted Stock Units

 

The Company granted 175,000 performance-based restricted stock units (“PSUs”) to our President and Chief Executive Officer in connection with his commencement of service on July 1, 2023. The PSUs were eligible to vest and settle into shares of common stock based on the extent to which performance goals tied to Total Shareholder Return (“TSR”) of our common stock were achieved. TSR was evaluated from the initial grant date through the end of each subsequent fiscal quarter using the three-month volume-weighted average closing prices in accordance with the underlying award agreement. The PSU's were eligible to vest and settle into shares of common stock on a 1-for-1 basis with respect to one-half of the shares upon achieving a TSR of 50% and the remaining shares upon a TSR of 100%, in each case within four years of the date of grant. The grant date fair value of the awards was determined using a Monte Carlo valuation model with an expected term of four years. As of September 30, 2024, TSR exceeded the 50% target, resulting in a partial vesting and the issuance of an initial 87,500 shares of common stock to our CEO. As of December 31, 2024, TSR exceeded the 100% target, resulting in the vesting of the remaining 87,500 shares of common stock. As a result of both vesting, unrecognized stock-based compensation expense totaling $718,000 was recognized in the six months ended December 31, 2024, which was set to be recognized in future periods. 

 

There were no performance-based restricted stock units issued or outstanding during the six months ended  December 31, 2025.