XML 34 R16.htm IDEA: XBRL DOCUMENT v3.23.2
Subsequent Events
12 Months Ended
Jun. 30, 2023
Subsequent Events  
Subsequent Events

Note 10. Subsequent Events

Acquisition

On July 28, 2023, the Company acquired 100% of the outstanding stock of Resolute Innovation, Inc. (“Resolute Innovation”), a Delaware corporation, an advanced search platform that equips organizations with search, discovery and knowledge management tools that are powered by artificial intelligence (“AI”) and neuro-linguistic programming (“NLP”) technologies.  The initial purchase consideration, net of cash acquired, was approximately $2.9 million. In addition, the acquisition agreement includes an earnout that will be based upon the product of three and one half multiplied by ending annual recurring revenue as of January 31, 2025 less the agreed upon Enterprise Value of $3.4 million. The Resolute Innovation acquisition will be accounted for under the purchase method, and accordingly, the results of operations will be included in the Company's financial statements from the date of acquisition. The acquisition is not expected to have a material impact on the Company's consolidated financial statements and notes thereto.

Stock Options

On September 1, 2023, the Company issued 3,578 shares of common stock upon the exercise of stock options underlying 17,000 shares of common stock on a cashless basis.

Restricted Common Stock

On August 25, 2023, the Company issued 5,000 shares of restricted stock to an employee. These shares vest over a three year period, with a one year cliff vesting period, and remain subject to forfeiture if vesting conditions are not met. The aggregate value of the stock award was $11,200 based on the market price of our common stock of $2.24 per share on the date of grant, which will be amortized over the three-year vesting period.

On August 25, 2023, the Company granted, under the 2017 Plan, restricted stock awards in the amount 100,000 shares to key employees in accordance with its long-term equity bonus program (the “LTEBP”). The LTEBP spans 5 years

and is designed to better serve stockholder interests by aligning key executive compensation with stockholder value.  Awards under the LTEBP will vest as follows, upon the 30-day volume weighted average price (VWAP) of our common stock reaching the following targets:

20% at a 30-day VWAP of $3.00 per share;

20% at a 30-day VWAP of $3.75 per share;

20% at a 30-day VWAP of $4.50 per share;

20% at a 30-day VWAP of $5.25 per share; and

20% at a 30-day VWAP of $6.00 per share.

Upon a change of control vesting will accelerate with respect to that portion of the award that would vest if the target 30-day VWAP was achieved at the level above the per share price in such change of control transaction. For example, if we granted an award of 100,000 shares under the LTEBP, 20,000 shares would vest upon our stock price achieving a 30-day VWAP of $3.00 per share, and 20,000 shares would vest upon our stock price achieving a 30-day VWAP of $3.75 per share. If the per share price in a change of control transaction was $5.00 per share, vesting would accelerate for 40,000 shares under the same award (i.e. the number of shares that would vest for our stock price achieving a 30-day VWAP of $5.25 per share). As a condition to receiving awards under the LTEBP, recipients will be required to hold at least 75% of all vested shares during the term of their employment. Applicable target 30-day VWAPs must be achieved within 5 years following the grant of awards under the LTEBP, and all unvested awards under the LTEBP will be forfeited upon expiration of such 5-year period. Recipients will also forfeit unvested awards in the event their service with our company terminates for any reason.