Note 8 - Equity Transactions and Stock-based Compensation

9 Months Ended

Mar. 31, 2022

Notes to Financial Statements

Stockholders' Equity Note Disclosure [Text Block]

Note 8. Equity Transactions and Stock-Based Compensation

In November, 2021, the Board of Directors authorized the issuance of 564,700 stock options to Company officers, employees and directors with an exercise price ranging from $0.95 to $1.045, vesting over one or three years, with terms of either five or ten years. For the three and nine months ended March 31, 2022 and 2021, the Company incurred stock-based compensation expense of $49 and $94, and $290 and $162, respectively. The Company expects to record additional stock-based compensation of $616 over the remaining vesting period of approximately three years. 

The Company used the following assumptions to calculate the fair value of the stock option grants using the Black-Scholes option pricing model on the measurement date during the nine months ended March 31, 2022:

Risk Free Interest Rate		0.01% to 0.78	%
Volatility		115.1% to 169.0	%
Term	4 1/2 to 10 years
Dividend Rate		0.00	%
Closing Price of Common Stock	$	0.95

The Company calculates expected volatility for a stock-based grant based on historic daily stock price observations of its common stock during the period immediately preceding the grant that is equal in length to the expected term of the grant. The expected term of the options is estimated based on the Company’s historical exercise rate and forfeiture rates are estimated based on employment termination experience. The risk free interest rate is based on U.S. Treasury yields for securities in effect at the time of grants with terms approximating the term of the grants. The assumptions used in the Black-Scholes option valuation model are highly subjective, and can materially affect the resulting valuations.

A summary of the Company’s stock option activity, and related information for the nine months ended March 31, 2022 follows:

				Weighted
				Average
				Exercise
	Options			Price
Outstanding as of June 30, 2021		3,916,666		$	0.26
Granted		564,700			0.97
Exercised		(29,667	)		0.25
Terminated		(30,633	)		0.30
Outstanding as of March 31, 2022		4,421,066		$	0.35
Exercisable at March 31, 2022		3,404,799		$	0.25

On May 6, 2022, 100,000 vested stock options, with a strike price of $0.23, dated May 24, 2019 were exercised by E Gerald Kay, the Company's Executive Chairman and President.