Note 8 - Equity Transactions and Stock-based Compensation

9 Months Ended

Mar. 31, 2024

Notes to Financial Statements

Equity [Text Block]

Note 8. Equity Transactions and Stock-Based Compensation

In November 2023, the Board of Directors authorized the issuance of up to 597,500 stock options to Company officers and employees. The Company issued 582,500 stock options with an exercise price ranging from $0.24 to $0.26, vesting over three years, with expiration terms of ten years from the date of grant. 

Additionally, in July 2023, the Board of Directors authorized the issuance of 200,000 stock options (50,000 each) to the non-executive directors of the Company with an exercise price of $0.33, vesting over one year, 25% at the end of each quarter ending September 30, 2023, December 31, 2023, March 31, 2024 and June 30, 2024.

For the three and nine months ended March 31, 2024 and 2023, the Company incurred stock-based compensation expense of $61 and $73, and $193 and $240, respectively.  The Company expects to record additional stock-based compensation of $267 over the remaining vesting periods of approximately one to three years for all non-vested stock options.

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, 2024:

Risk Free Interest Rate		3.91% to 4.36	%
Volatility		116.9% to 131.7	%
Term	7.5 to 10 years
Dividend Rate		0.00	%
Closing Price of Common Stock	$	0.24
Closing Price of Common Stock	$	0.26
Closing Price of Common Stock	$	0.33

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, 2024 follows:

				Weighted
				Average
				Exercise
	Options			Price
Outstanding as of June 30, 2023		4,3760,284		$	0.35
Granted		782,500			0.27
Exercised		(150,000	)		0.09
Terminated		(9,167	)		0.58
Expired		(241,434	)		0.44
Outstanding as of March 31, 2024		4,758,183		$	0.41
Exercisable at March 31, 2024		3,754,317		$	0.34