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Note 24 - Stock Options | 12 Months Ended
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Jun. 30, 2024
Notes to Financial Statements |
Share-Based Payment Arrangement [Text Block] | 24. STOCK OPTIONS On September 14, 2017, the Company’s Board of Directors unanimously adopted the 2017 Employee Stock Option Plan (the “2017 Employee Plan”) and the 2017 Directors Equity Incentive Plan (the “2017 Directors Plan”) each of which was approved by the shareholders on December 4, 2017. Assumptions The fair value for the stock options granted to both employees and directors was estimated using the Black-Scholes option pricing model with the following weighted average assumptions, assuming:
● | An expected life varying from 2.50 to 3.25 years, calculated in accordance with the guidance provided in SEC Staff bulletin No. 110 for plain vanilla options using the simplified method, since the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term.
● | A risk-free interest rate varying from 0.20% to 4.59% (2023: 0.11% to 4.17%);
● | No expected dividend payments and;
● | Expected volatility of 47.3% to 72.2 % (2023: 47.3% to 73.85 %).
The expected volatilities are based on the historical volatility of the Company’s Common Stock. Due to higher volatility, the observation was made on a daily basis for the 12 months ended June 30, 2024 and 2023 respectively. The observation period covered is consistent with the expected life of the options. The expected life of the options granted to employees has been determined utilizing the “simplified” method as prescribed by ASC Topic 718 Stock Based Compensation, which, among other provisions, allows companies whose historical share option exercise experience does not provide a reasonable basis upon which to estimate expected term, to use a simplified approach for estimating the expected life of a “plain vanilla” option grant. The simplified rule for estimating the expected life of such an option is the average of the time to vesting and the full term of the option. The risk-free rate is consistent with the expected life of the stock options and is based on the United States Treasury yield curve in effect at the time of grant. 2017 Employee Stock Option Plan The Company’s 2017 Employee Plan permits the grant of stock options to its employees covering up to an aggregate of 300,000 shares of Common Stock. In December 2021, the Company’s Board of Directors approved an amendment to the 2017 Employee Plan to increase the shares covered thereby from 300,000 shares to an aggregate of 600,000 shares, which amendment was approved by the Company’s shareholders at the annual meeting held in December 2021. Under the 2017 Employee Plan, all options must be granted with an exercise price of no less than fair value as of the grant date and the options granted must be exercisable within a maximum of ten years after the date of grant, or such lesser period of time as is set forth in the stock option agreements. The options may be exercisable (a) immediately as of the effective date of the stock option agreement granting the option, or (b) in accordance with a schedule related to the date of the grant of the option, the date of first employment, or such other date as may be set by the Compensation Committee. Generally, options granted under the 2017 Employee Plan are exercisable within five years after the date of grant and vest over the period as follows: 25% vesting on the grant date and the remaining balance vesting in equal installments on the next three succeeding anniversaries of the grant date. The share-based compensation will be recognized in terms of the grade method on a straight-line basis for each separately vesting portion of the award. Certain option awards provide for accelerated vesting if there is a change in control (as defined in the 2017 Employee Plan). During the year ended June 30, 2024, the Company granted options to purchase 122,500 shares of its Common Stock to employees pursuant to the 2017 Employee Plan, with a weighted average grant-date fair value of $4.94. During the year ended June 30, 2023, the Company granted options to purchase 65,000 shares of its Common Stock to employees pursuant to the 2017 Employee Plan, with a weighted average grant-date fair value of $4.84. There were 64,625 stock options exercised under the 2017 Employee Plan during the year ended June 30, 2024. The Company recognized stock-based compensation expense of $246 in the year ended June 30, 2024 under the 2017 Employee Plan. The balance of unamortized stock-based compensation of $196 based on fair value on the grant date related to options granted under the 2017 Employee Plan is to be recognized over a period of 3 years. The weighted average remaining contractual term for non-vested options outstanding under the 2017 Employee Plan was 2.01 years. There were 5,000 stock options exercised under the 2017 Employee Plan during the year ended June 30, 2023. The Company recognized stock-based compensation expense of $145 in the year ended June 30, 2023 under the 2017 Employee Plan. The balance of unamortized stock-based compensation of $144 based on fair value on the grant date related to options granted under the 2017 Employee Plan is to be recognized over a period of 3 years. The weighted average remaining contractual term for non-vested options outstanding under the 2017 Employee Plan was 1.99 years. As of June 30, 2024, there were vested employee stock options granted under the 2017 Employee Plan covering a total of 136,250 shares of Common Stock, with a weighted average exercise price was $5.57, and weighted average contractual term of 2.87 years. The total fair value of vested employee stock options outstanding under the 2017 Employee Plan as of June 30, 2024, was $759. As of June 30, 2023, there were vested employee stock options granted under the 2017 Employee Plan covering a total of 134,625 shares of Common Stock, with a weighted average exercise price was $4.49, and weighted average contractual term of 2.57 years. The total fair value of vested employee stock options outstanding under the 2017 Employee Plan as of June 30, 2023, was $605. A summary of option activities under the 2017 Employee Plan during the years ended June 30, 2024 and 2023, is presented as follows:
|  | Options |  |  | Weighted Average Exercise Price |  |  | Weighted Average Remaining Contractual Term (Years) |  |  | Aggregate Intrinsic Value |
Outstanding at July 1, 2022 |  |  | 236,375 |  |  |  | 5.21 |  |  |  | 2.61 |  |  |  | 87 |
Granted |  |  | 65,000 |  |  |  | 4.84 |  |  |  | - |  |  |  | - |
Exercised |  |  | (5,000 | ) |  |  | 3.75 |  |  |  | - |  |  |  | - |
Forfeited or expired |  |  | (80,000 | ) |  |  | - |  |  |  | - |  |  |  | - |
Outstanding at June 30, 2023 |  |  | 216,375 |  |  |  | 4.89 |  |  |  | 2.92 |  |  |  | 140 |
Granted |  |  | 122,500 |  |  |  | 4.94 |  |  |  | - |  |  |  | - |
Exercised |  |  | (64,625 | ) |  |  | 3.14 |  |  |  | - |  |  |  | - |
Forfeited or expired |  |  | (3,500 | ) |  |  | - |  |  |  | - |  |  |  | - |
Outstanding at June 30, 2024 |  |  | 270,750 |  |  |  | 5.35 |  |  |  | 3.43 |  |  |  | 268 |
Exercisable at June 30, 2024 |  |  | 136,250 |  |  |  | 5.57 |  |  |  | 2.87 |  |  |  | 121 |
A summary of the status of the Company’s non-vested employee stock options during the years ended June 30, 2024 and 2023, is presented below:
|  |  |  |  |  | Weighted Average |
|  | Options |  |  | Grant-Date Fair Value |
Non-vested at July 1, 2022 |  |  | 75,875 |  |  | $ | 5.98 |
Granted |  |  | 65,000 |  |  |  | 4.77 |
Vested |  |  | (49,125 | ) |  |  | - |
Forfeited |  |  | (10,000 | ) |  |  | - |
Non-vested at June 30, 2023 |  |  | 81,750 |  |  | $ | 5.53 |
Granted |  |  | 122,500 |  |  |  | 6.26 |
Vested |  |  | (69,750 | ) |  |  | - |
Forfeited |  |  | - |  |  |  | - |
Non-vested at June 30, 2024 |  |  | 134,500 |  |  | $ | 5.12 |
2017 Directors Equity Incentive Plan The 2017 Directors Plan permits the grant of options to its directors in the form of non-qualified options and restricted stock, and initially covered up to an aggregate of 300,000 shares of Common Stock. In September 2020, the Company’s Board of Directors approved an amendment to the 2017 Directors Plan to increase the shares covered thereby from 300,000 shares to an aggregate of 600,000 shares, which amendment was approved by the Company’s shareholders at the annual meeting held in December 2020. In October 2023, the Company’s Board of Directors approved an amendment to the 2017 Directors Plan to increase the shares covered thereby from 600,000 shares to an aggregate of 900,000 shares, which amendment was approved by the Company’s shareholders at the annual meeting held in December 2023. Under the 2017 Directors Plan, the exercise price of the non-qualified options is required to be 100% of the fair value of the underlying shares on the grant date. The options have five-year contractual terms and are exercisable immediately as of the grant date. During the year ended June 30, 2024, the Company granted options to purchase 100,000 shares of its Common Stock to directors pursuant to the 2017 Directors Plan, with an exercise price equal to the fair market value of Common Stock (as defined under the 2017 Directors Plan in conformity with Regulation 409A or the Internal Revenue Code of 1986, as amended) at the date of grant, and a fair value of approximately $220, based on the fair value of $2.20 per share determined by the Black-Scholes option pricing model. During the year ended June 30, 2023, the Company granted options to purchase 100,000 shares of its Common Stock to directors pursuant to the 2017 Directors Plan, with an exercise price equal to the fair market value of Common Stock (as defined under the 2017 Directors Plan in conformity with Regulation 409A or the Internal Revenue Code of 1986, as amended) at the date of grant, and a fair value of approximately $213, based on the fair value of $2.13 per share determined by the Black-Scholes option pricing model. As all stock options granted under the 2017 Directors Plan vest immediately on the date of grant, there were no unvested stock options granted under the 2017 Directors Plan as of June 30, 2024 and June 30, 2023. There were 89,000 stock options exercised under the 2017 Directors Plan during the year ended June 30, 2024. The Company recognized stock-based compensation expense of $220 in the year ended June 30, 2024 under the 2017 Directors Plan. There were 20,000 stock options exercised under the 2017 Directors Plan during the year ended June 30, 2023. The Company recognized stock-based compensation expense of $213 in the year ended June 30, 2023 under the 2017 Directors Plan. A summary of option activities under the 2017 Directors Plan during the years ended June 30, 2024 and 2023, is presented as follows:
|  |  |  |  |  | Weighted Average |  |  | Weighted Average Remaining Contractual |  |  | Aggregate |
|  |  |  |  |  | Exercise |  |  | Term |  |  | Intrinsic |
|  | Options |  |  | Price |  |  | (Years) |  |  | Value |
Outstanding at July 1, 2022 |  |  | 420,000 |  |  | $ | 5.10 |  |  |  | 2.85 |  |  | $ | 228 |
Granted |  |  | 100,000 |  |  |  | 4.51 |  |  |  | - |  |  |  | - |
Exercised |  |  | 20,000 |  |  |  | 2.53 |  |  |  | - |  |  |  | - |
Forfeited or expired |  |  | (80,000 | ) |  |  | 5.98 |  |  |  | - |  |  |  | - |
Outstanding at June 30, 2023 |  |  | 420,000 |  |  | $ | 4.91 |  |  |  | 2.91 |  |  | $ | 309 |
Granted |  |  | 100,000 |  |  |  | 5.01 |  |  |  | - |  |  |  | - |
Exercised |  |  | (89,000 | ) |  |  | 3.40 |  |  |  | - |  |  |  | - |
Forfeited or expired |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Outstanding at June 30, 2024 |  |  | 431,000 |  |  | $ | 5.24 |  |  |  | 2.88 |  |  | $ | 531 |
Exercisable at June 30, 2024 |  |  | 431,000 |  |  |  | 5.24 |  |  |  | 2.88 |  |  |  | 531 |

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