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Stock-Based Compensation | 12 Months Ended
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Jun. 30, 2022
Share-Based Payment Arrangement [Abstract] |
Stock-Based Compensation | Note 6 - Stock-Based Compensation The Company’s Equity Incentive Plan (the “Plan”) permits the grant of stock options, stock appreciation rights, restricted stock, or restricted stock units to officers, employees, directors, consultants, agents, and independent contractors of the Company. The Company believes that such awards better align the interests of its employees, directors, and consultants with those of its stockholders. Option awards are generally granted with an exercise price equal to the market price of the Company’s stock at the date of grant; those option awards generally vest over two years from the grant date and generally have ten-year contractual terms. Certain option awards provide for accelerated vesting (as defined in the Plan). The Company has reserved 4,600,000 shares of common stock to be available for granting under the Plan. The Company estimates the fair value of each option award using a BSM that uses the weighted average assumptions included in the table below. Expected volatilities used in the BSM assumptions are based on historical volatility of the Company’s stock prices. The expected term of stock options granted has been estimated using the simplified method because the Company is generally unable to rely on its limited historical exercise data or alternative information as a reasonable basis upon which to estimate the expected term of such options. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The Company has not paid any dividends on common stock since its inception and does not anticipate paying dividends on its common stock in the foreseeable future. When calculating the amount of annual compensation expense, the Company has elected not to estimate forfeitures and instead accounts for forfeitures as they occur. The following table summarizes the assumptions used for estimating the fair value of the stock options granted for the year ended:
|  | For the Years Ended June 30, |
|  | 2022 |  |  | 2021 |
Expected term (years) |  |  | 7.00 |  |  |  | 5.00 |
Risk-free interest rate |  |  | 0.12% - 2.2 | % |  |  | 0.12 | %
Expected volatility |  |  | 46.3% - 93 | % |  |  | 45% - 46 | %
Dividend yield |  |  | 0 | % |  |  | 0 | %
A summary of option activity for the years ended June 30, 2022 and 2021 is presented below:
Options |  | Number of Shares |  |  | Weighted Average Exercise Price |  |  | Weighted Average Remaining Contractual Term (in years) |
Outstanding at July 1, 2020 |  |  | 2,962,833 |  |  | $ | 1.82 |  |  |  | 9,06 |
Granted |  |  | 566,000 |  |  |  | 2.97 |  |  |  | 9.65 |
Terminated |  |  | (306,708 | ) |  |  | 2.45 |  |  |  | - |
Outstanding at June 30, 2021 |  |  | 3,222,125 |  |  |  | 1.96 |  |  |  | 8.34 |
Granted |  |  | 129,024 |  |  |  | 1.76 |  |  |  | 9.26 |
Terminated |  |  | (187,959 | ) |  |  | 3.01 |  |  |  | 8.69 |
Outstanding and expected to vest at June 30, 2022 |  |  | 3,163,190 |  |  |  | 1.89 |  |  |  | 7.34 |
The weighted-average grant-date fair value of options granted during the years ended June 30, 2022 and 2021 was $1.76 and $1.29, respectively. The options contained time-based vesting conditions satisfied over one to five years from the grant date. During the years ended June 30, 2022 and 2021, the Company issued 129,024 and 566,000 options, respectively. During the year ended June 30, 2022 and 2021, no options were exercised and 187,959 and 306,708 options were terminated. On September 28, 2021, the Board approved certain stock awards to its board members in the form of stock options and restricted stock. The stock option awards are expected to vest ratably over twelve-month period from beginning September 28, 2021 through September 28, 2022. The restricted stock awards vested over a twelve-month period beginning July 1, 2021 through June 30, 2022. The total approved compensation was $172,702 in stock options and $600,000 in restricted stock. The number of options was determined based on the fair value of the Company’s share price as of the date of grant. The Company determined that there will be 337,078 of restricted shares issued upon vesting, based on the fair value of the Company’s share price on the grant date. Accordingly, $130,486 related to the stock option grants made to the board members, was recognized as stock-based compensation expense for the twelve months ended June 30, 2022. The Company also recognized $600,000 as stock-based compensation expense related to the restricted stock unit grants made to the board members for the twelve months ended June 30, 2022 as part of general and administrative expenses. The cost related to the grants made to board members is expected to be recognized through September of 2022. For the years ended June 30, 2022 and 2021, the Company recognized $1,442,087 and $876,295, in expense related to the Plan, respectively. As of June 30, 2022, there was approximately $280,801 of total unrecognized compensation cost for employees and non-employees related to nonvested options. These costs are expected to be recognized through March 2026.

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