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Stock-Based Compensation
 6 Months Ended
Dec. 31, 2023
Stock-Based Compensation [Abstract]  
STOCK-BASED COMPENSATION

14. STOCK-BASED COMPENSATION

 

In October 2022, the directors and stockholders of the Company approved the 2022 Equity Incentive Plan (the “Plan”) pursuant to which up to 15,000,000 shares of common stock may be issued pursuant to options, restricted stock or RSUs grants. The Plan will be administered by the Compensation Committee of the Board of Directors. Awards under the Plan may be granted to officers, directors, employees and those consultants who qualify as a consultant or advisor under the instructions to Form S-8 filed with U.S. Securities and Exchange Commission on July 26, 2023. The Compensation Committee has broad discretion in making awards; provided that any options shall be exercisable at the fair market value on the date of grant.

 

Restricted stocks

 

During the six months ended December 31, 2023, 56,976 shares of common stock were issued to the Company’s board of directors and consultants in settlement of restricted stock granted under the Plan. Restricted stocks granted to directors are vested over three months and fully vested as of December 31, 2023. Restricted stocks granted to consultants are vested over their respective service periods from six months to one year. The unrecognized compensation expenses related to unvested restricted stocks were $29,242 as of December 31, 2023.

 

During the six months ended December 31, 2023, 2,910,000 stock options and 587,235 RSUs were granted to the Company’s employees under the Plan. See below for details.

 

Stock Options

 

The following is a summary of stock option activity transactions as of and for the period ended June 30, 2023 and December 31, 2023:

 

   Number of
options		   Weighted
average
exercise
price		   Weighted
average
fair value
per option		 
Outstanding at June 30, 2023    -   $ -   $ - 
Granted    2,910,000   $9.63   $5.45 
Exercised    
-
   $
-
   $
-
 
Expired    
-
   $
-
   $
-
 
Forfeiture    65,000   $9.76   $5.54 
Outstanding at December 31, 2023    2,845,000   $9.63   $5.45 

 

The aggregate intrinsic value of options outstanding with an exercise price less than the closing price of the Company’s common stock as of December 31, 2023 was $7,263,425. The aggregate intrinsic value of options exercisable with an exercise price less than the closing price of the Company’s common stock as of December 31, 2023 was $400,875. Aggregate intrinsic value represents the value of the Company’s closing stock price on the last trading day of the period in excess of the weighted-average exercise price multiplied by the number of options outstanding or exercisable.

 

Total expense of options vested for the three months ended December 31, 2022 and 2023, was $0 and $1,201,114, respectively. Total expense of options vested for the six months ended December 31, 2022 and 2023, was $0 and $1,707,093, respectively. The options granted during the six months ended December 31, 2023 were valued using the binomial option pricing model based on the following range of assumptions:

 

   Six months
ended
December 31,
2023		 
Risk-free interest rate   4.062% - 4.812% 
Time to expiry   4 - 10 years 
Expected volatility   50% - 55% 
Expected dividend yield   0% 

 

RSUs

 

RSUs granted to employees vest cumulatively as to one-third of the restricted stock units on each of the first three anniversaries of the date of grant based on continues service. Each vested RSU entitles holder to receive one share of common stock upon exercise. RSUs are accounted for as equity using the fair value method, which requires measurement and recognition of compensation expense for all awards granted to employees, directors and consultants based upon the grant-date fair value.

 

   Shares   Weighted average
grant date
fair value		 
Unvested, June 30, 2023   
-
   $
-
 
Granted   587,235    9.76 
Vested   
-
    
-
 
Canceled and forfeited   (13,095)   9.76 
Unvested, December 31, 2023   574,140   $9.76 

 

Total expense for the RSUs during the three and six months ended December 31, 2023 was $468,361 and $604,325.

 

The following table summarizes the allocation of stock-based compensation in the accompanying consolidated statements of operations:

 

   Three months ended
December 31,		   Six months ended
December 31,		 
   2022   2023   2022   2023 
General and administrative expenses  $
     -
   $1,850,380   $
     -
   $2,802,033 
Sales and marketing expenses   
-
    32,541    
-
    48,447 
Total  $
-
   $1,882,921   $
-
   $2,850,480