Stockholders' Equity |
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| Stockholders' Equity | Note 4. Stockholders’ Equity Stock Options In December 2007, we established the 2007 Equity Compensation Plan (the “2007 Plan”) and in November 2017 we established the 2017 Omnibus Incentive Plan (the “2017 Plan”), collectively (the “Plans”). The Plans were approved by our board of directors and stockholders. The purpose of the Plans is to grant stock and options to purchase our common stock, and other incentive awards, to our employees, directors and key consultants. On November 10, 2016, the maximum number of shares of common stock that may be issued pursuant to awards granted under the 2007 Plan increased from 5,000,000 to 7,000,000. On November 21, 2017, the Company’s stockholders approved the adoption of the 2017 Plan (previously adopted by our board of directors on September 14, 2017), which authorized a maximum of 1,874,513 shares of common stock that may be issued pursuant to awards granted under the 2017 Plan. From November 2019 to November 2021, the Company's stockholders approved increases in the maximum number of shares of common stock that may be issued pursuant to awards granted under the 2017 Omnibus Incentive Plan from 1,874,513 to 6,874,513. Upon adoption of the 2017 Plan we ceased granting incentive awards under the 2007 Plan and commenced granting incentive awards under the 2017 Plan. The shares of our common stock underlying cancelled and forfeited awards issued under the 2017 Plan may again become available for grant under the 2017 Plan. Cancelled and forfeited awards issued under the 2007 Plan that were cancelled or forfeited prior to November 21, 2017 became available for grant under the 2007 Plan. As of December 31, 2025, there were 571,577 shares available for grant under the 2017 Plan, and no shares were available for grant under the 2007 Plan. All incentive stock award grants prior to the adoption of the 2017 Plan on November 21, 2017 were made under the 2007 Plan, and all incentive stock award grants after the adoption of the 2017 Plan on November 21, 2017 were made under the 2017 Plan. The majority of awards issued under the Plan vest (i) immediately or (ii) in installments over three years, with a one-year cliff, and have a term of ten years. The following table summarizes vested and unvested stock option activity:
The weighted average remaining contractual life of all options outstanding as of December 31, 2025 was years. The remaining contractual life for options vested and exercisable at December 31, 2025 was years. Furthermore, the aggregate intrinsic value of options outstanding as of December 31, 2025 was $1,877,744, and the aggregate intrinsic value of options vested and exercisable as of December 31, 2025 was $1,841,453, in each case based on the fair value of the Company’s common stock on December 31, 2025. The aggregate intrinsic value of options outstanding as of June 30, 2025 was $2,265,673, and the aggregate intrinsic value of options vested and exercisable as of June 30, 2025 was $2,229,827, in each case based on the fair value of the Company’s common stock on June 30, 2025. During the six months ended December 31, 2025, the Company granted 260,000 options to directors with a fair value of $382,200 which amount will be amortized over the vesting period. The total stock options expense during the six months ended December 31, 2025 and 2024 was $149,262 and $88,045, respectively, and is included in selling, general and administrative expenses in the accompanying condensed consolidated statement of operations and comprehensive income (loss). As of December 31, 2025, the amount of unvested compensation related to the unvested options was $647,801 which will be recorded as an expense in future weighted average vesting periods of years. During the six months ended December 31, 2025, the Company issued 245,469 net shares of common stock upon the exercise of options underlying 268,500 shares of common stock, resulting in net cash proceeds of $157,500. The aggregate intrinsic value of options exercised during the six months ended December 31, 2025 was $562,170. During the six months ended December 31, 2024, the Company issued 37,507 net shares of common stock upon the exercise of options underlying 111,821 shares of common stock. The aggregate intrinsic value of options exercised during the six months ended December 31, 2024 was $116,212. The following table presents the assumptions used to estimate the fair values based upon a Black-Scholes option pricing model of the stock options granted during the six months ended December 31, 2025 and 2024.
The following table presents the information regarding stock options outstanding and exercisable as of December 31, 2025:
Restricted Common Stock During the six months ended December 31, 2025, the Company issued an additional 95,000 shares of restricted stock to employees. These shares vest over a three-year period, with a one-year cliff vesting period, and remain subject to forfeiture if vesting conditions are not met. The aggregate fair value of these stock awards was $247,950 based on the market price of our common stock at $2.61 per share on the date of grant, which will be amortized over the three-year vesting period. During the six months ended December 31, 2024, the Company issued an additional 590,000 shares of restricted stock to an employee with an aggregate fair value of $1,309,240. The shares were granted, under the 2017 Plan, as restricted stock awards to key management in accordance with its long-term equity bonus program (the “LTEBP”). The LTEBP replaces the previous restricted stock compensation program for executives. It first became effective on August 19, 2022, and grants under the program span from the grant date. The LTEBP is designed to better serve stockholder interests by aligning key executive compensation with stockholder value. Awards under the LTEBP will vest as follows, upon the 30-day volume weighted average price (VWAP) of our common stock reaching the following targets:
•20% at a 30-day VWAP of $3.75 per share (vesting occurred on January 3, 2025); •20% at a 30-day VWAP of $4.50 per share; •20% at a 30-day VWAP of $5.25 per share; and •20% at a 30-day VWAP of $6.00 per share. Upon a change of control, vesting will accelerate with respect to that portion of the award that would vest if the target 30-day VWAP was achieved at the level above the per share price in such change of control transaction. For example, if we granted an award of 100,000 shares under the LTEBP, 20,000 shares would vest upon our stock price achieving a 30-day VWAP of $3.00 per share, and 20,000 shares would vest upon our stock price achieving a 30-day VWAP of $3.75 per share. If the per share price in a change of control transaction was $5.00 per share, vesting would accelerate for 40,000 shares under the same award (i.e. the number of shares that would vest for our stock price achieving a 30-day VWAP of $5.25 per share, pursuant to a tier round up provision in the Plan effective upon a change in control). As a condition to receiving awards under the LTEBP, recipients will be required to hold at least 75% of all vested shares during the term of their employment. Applicable target 30-day VWAPs must be achieved within 5 years following the grant of awards under the LTEBP, and all unvested awards under the LTEBP will be forfeited upon expiration of such period. Recipients will also forfeit unvested awards in the event their service with our company terminates for any reason. As the vesting of the 590,000 shares of restricted common stock under the LTEBP is subject to certain market conditions, pursuant to current accounting guidelines, the Company determined the fair value, with the assistance of a valuation specialist, to be $1,309,240, computed using the Monte Carlo simulations on a binomial model with a derived service period ranging from 0.64 to 2.33 years. The total restricted common stock expense related to amortization of all fair value of the restricted stock awards were $276,669 and $864,266 during the six months ended December 31, 2025 and 2024, respectively, and is included in selling, general and administrative expenses in the accompanying condensed consolidated statements of operations and comprehensive income (loss). As of December 31, 2025, the amount of unrecognized compensation related to issuances of restricted common stock was $608,448, which will be recognized as an expense in future weighted average vesting periods of years. When calculating basic net income (loss) per share, these shares are included in weighted average common shares outstanding from the time they vest. When calculating diluted net income per share, these shares are included in weighted average common shares outstanding as of their grant date, using the treasury method. From the 32,875,476 shares and outstanding on the condensed consolidated balance sheets, 1,037,752 shares are subject to vesting and are not considered outstanding for accounting purposes. The following table summarizes restricted common stock activity:
Common Stock Repurchases Effective as of March 19, 2024, the Compensation Committee of our board of directors authorized the repurchase, on the last day of each trading window during which the outstanding awards remain outstanding and otherwise in accordance with our insider trading policies, of an aggregate value not exceeding $750,000 (the “Repurchase Cap”), in addition to the prior remaining balance of outstanding common stock of $330,774 (at prices no greater than $4.00 per share) (the “Repurchase Price Cap”)) from our employees to satisfy their tax obligations in connection with the vesting of stock incentive awards through the end of fiscal year 2025. Effective as of December 19, 2024, the Compensation Committee of our board of directors authorized an increase in the Repurchase Cap to an aggregate value not exceeding $1,500,000 and the Repurchase Price Cap to a price no greater than $5.50 per share. Effective as of May 6, 2025, the Compensation Committee of our board of directors authorized the repurchase of shares of common stock in satisfaction of tax withholding obligations at any time during a trading window during which outstanding awards remain outstanding and otherwise in accordance with our insider trading policies. The actual number of shares repurchased will be determined by applicable employees in their discretion and will depend on their evaluation of market conditions and other factors. As of June 30, 2025, $162,316 remained under the current authorization to repurchase our outstanding common stock from our employees. During the six months ended December 31, 2025, the Company repurchased 11,982 shares of our common stock from employees at an average market price of approximately $3.30 per share for an aggregate amount of $39,549. As of December 31, 2025, $122,767 remains under the current authorization to repurchase our outstanding common stock from our employees. During the six months ended December 31, 2024, the Company repurchased 53,889 shares of our common stock from employees at an average market price of approximately $3.81 per share for an aggregate amount of $205,278. As of December 31, 2024, $891,615 remained under the current authorization to repurchase our outstanding common stock from our employees. Shares repurchased are retired and deducted from common stock for par value and from additional paid in capital for the excess over par value. Direct costs incurred to acquire the shares are included in the total cost of the shares. |
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