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STOCKHOLDERS' EQUITY

6 Months Ended

Dec. 31, 2022

NOTE 8 — STOCKHOLDERS’ EQUITY

In 2019, the Company adopted the 2019 Omnibus Incentive Plan (the “Plan”). The Plan, as amended, provides for the issuance of stock-based awards to employees. As of December 31, 2022, the Plan provides for the issuance of up to 1,500,000 stock-based awards. There are 1,220,000 stock-based awards available to grant under the Plan at December 31, 2022.

In July 2021, MiT Inc. entered into an Exchange Agreement with MiT LLC pursuant to which MiT Inc. agreed to exchange membership units for 2,350,000 shares of Common Stock representing 41.4% of the equity as of such date on a fully diluted basis for no consideration. The shares were exchanged as part of the Exchange Agreement with the Company as described in Note 1.

In July 2021, the Company granted options to non-employee directors to purchase an aggregate of 150,000 shares of its common stock at an exercise price of $3.00 per share. The options vest one year from the date of grant, expire ten years from the date of grant and had an aggregate grant date fair value of $244,200, which was recognized ratably over the vesting period. These options, which were the only options granted during the six months ended December 31, 2021, had a grant-date fair value of $1.63 per share. The Company recognized compensation expense for stock option awards of approximately $62,000 and $118,000 during the three and six months ended December 31, 2021, respectively The Company recognized no compensation expense for stock options during the three and six months ended December 31, 2022.

At December 31, 2022, there was no unrecognized compensation cost related to nonvested stock option awards.

The estimated fair value of each option award granted was determined on the date of grant using the Black-Scholes option valuation model. The following weighted average assumptions were used for option grants during the six months ended December 31, 2021:


Risk-free interest rate	1.32	%
Expected volatility	61.0	%
Dividend yield	0	%
Expected option term in years	5.5

On July 12, 2022, the Company granted 130,000 shares of common stock, with a fair market value of approximately $153,000, to employees as compensation for previously provided service, which was accrued as of June 30, 2022.

NOTE 8 — STOCKHOLDERS’ EQUITY (continued)

A summary of the status of the Company’s stock options as of December 31, 2022 and changes during the six months ended December 31, 2022 are presented below.


		Wtd. Avg.
		Exercise
	Options	Price
Balance, July 1, 2022	150,000	$	3.00
Granted during the period	—		—
Exercised during the period	—		—
Terminated/Expired during the period	—		—
Balance, December 31, 2022	150,000	$	3.00

A summary of the status of the Company’s stock options as of December 31, 2021 and changes during the six months ended December 31, 2021 are presented below.


		Wtd. Avg.
		Exercise
	Options	Price
Balance, July 1, 2021	—	$	—
Granted during the period	150,000		3.00
Exercised during the period	—		—
Terminated/Expired during the period	—		—
Balance, December 31, 2021	150,000	$	3.00

The following table summarizes information about outstanding and exercisable stock options at December 31, 2022:


		Number		Wtd. Avg.
	Range of Exercise Price	Outstanding	Wtd. Avg, Life	Exercise Price
$	3.00	150,000	8.5 years	$	3.00

A summary of the status of the Company’s stock warrants as of December 31, 2021 and changes during the six month period ended December 31, 2021 are presented below.


		Wtd. Avg.
		Exercise
	Warrants	Price
Balance, July 1, 2021	236,667	$	2.76
Granted during the period	241,500		3.75
Exercised during the period	(139,611)		2.76
Terminated/Expired during the period	(97,056)		2.76
Balance, December 31, 2021	241,500	$	3.75

In July 2021, warrants were exercised on a cashless basis resulting in the issuance of 139,611 shares of common stock.

No warrants were outstanding, and there was no warrant activity in the six month period ended December 31, 2022.