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LONG-TERM INCENTIVE PLAN AWARDS
 3 Months Ended
Sep. 30, 2023
Share-Based Payment Arrangement [Abstract]  
LONG-TERM INCENTIVE PLAN AWARDS

NOTE 7 - LONG-TERM INCENTIVE PLAN AWARDS

 

We apply the provisions of ASC 718, “Compensation - Stock Compensation,” to all of our stock-based compensation awards and use the Black-Scholes option pricing model to value stock options. The fair value of each share option award on the date of grant was estimated using the Black-Scholes method based on the following weighted average assumptions: The risk-free interest rate is based on the U.S. treasury yield curve in effect at the time of grant for periods corresponding with the expected term of options award; the expected term represents awards granted are expected to be outstanding giving considerations vesting schedules and historical participant exercise behavior; the expected volatility is based upon historical volatility of the dividend yield is based upon the company’s dividend rate at the time fair value is measure and future expectations. Under this application, we record compensation expense for all awards granted.

 

In July of 2020, the Board of Directors adopted the 2020 Franklin Wireless Corp. Stock Option Plan (the “2020 Plan”), which covers 800,000 shares of Common Stock. The 2020 Plan provides for the grant of incentive stock options, non-qualified stock options and restricted stock to our employees, directors, and independent contractors. These options will have such vesting or other provisions as may be established by the Board of Directors at the time of each grant.

 

The estimated forfeiture rate considers historical turnover rates stratified into employee pools in comparison with an overall employee turnover rate, as well as expectations about the future. We periodically revise the estimated forfeiture rate in subsequent periods if actual forfeitures differ from those estimates. There were $51,589 and $180,745 compensation expenses recorded under this method for the three months ended September 30, 2023 and 2022, respectively.

 

A summary of the status of our stock options is presented below as of September 30, 2023:

                    
           Weighted-     
           Average     
       Weighted-   Remaining     
       Average   Contractual   Aggregate 
       Exercise   Life   Intrinsic 
Options  Shares   Price   (In Years)   Value 
Outstanding as of June 30, 2023   647,001   $4.24    2.88   $130,200 
Granted   –    –    –    – 
Exercised   –    –    –    – 
Cancelled   –    –    –    – 
Forfeited or expired   (16,000)   4.77    –    – 
Outstanding as of September 30, 2023   631,001   $4.23    2.63   $– 
                     
Exercisable as of September 30, 2023   478,642   $4.49    2.44   $– 

  

The aggregate intrinsic value in the preceding table represents the total pretax intrinsic value, based upon the Company’s closing stock price of $3.20 as of September 30, 2023, which would have been received by the option holders had all option holders exercised their options as of that date. The weighted-average grant-date fair value of stock options outstanding as of September 30, 2023, in the amount of 631,001 shares was $3.34 per share. As of September 30, 2023, there was unrecognized compensation cost of $432,617 related to non-vested stock options granted.

 

A summary of the status of our stock options is presented below as of September 30, 2022:

           Weighted-     
           Average     
       Weighted-   Remaining     
       Average   Contractual   Aggregate 
       Exercise   Life   Intrinsic 
Options  Shares   Price   (In Years)   Value 
Outstanding as of June 30, 2022   766,001   $3.85    3.37   $183,270 
Granted   –    –    –    – 
Exercised   –    –    –    – 
Cancelled   –    –    –    – 
Forfeited or expired   (10,000)   5.40    –    – 
Outstanding as of September 30, 2022   756,001   $3.86    3.11   $158,000 
                     
Exercisable as of September 30, 2022   399,089   $3.90    2.36   $158,000 

 

The aggregate intrinsic value in the preceding table represents the total pretax intrinsic value, based upon the Company’s closing stock price of $2.92 as of September 30, 2022, which would have been received by the option holders had all option holders exercised their options as of that date. The weighted-average grant-date fair value of stock options outstanding as of September 30, 2022, in the amount of 756,001 shares was $3.17 per share. As of September 30, 2022, there was unrecognized compensation cost of $1,102,036 related to non-vested stock options granted.