Note 3 - Equity

3 Months Ended

Dec. 31, 2023

Notes to Financial Statements

Equity [Text Block]

NOTE 3. EQUITY

Restricted Stock Units	Restricted Stock Units			Weighted Average Grant Date Fair Value ($/share)
Outstanding at June 30, 2023		907,451		$	5.30
Granted		13,010			9.99
Vested and issued		(5,945	)		5.89
Forfeited		-			-
Outstanding at December 31, 2023		914,516		$	5.36

As of December 31, 2023, there were 40,837 restricted stock units outstanding that had vested but for which shares of Common Stock had not yet been issued pursuant to the terms of the applicable agreement.

As of December 31, 2023, there was approximately $4.9 million of unrecognized stock-based compensation obligations under our equity compensation plans. The stock-based compensation obligation is in connection with certain employment agreements which have a deferral option at the Board’s discretion. At the end of the deferral period, the stock-based compensation expense associated with the obligation is expected to be recognized on a straight-line basis over a period of three years.

Warrants

Outstanding warrants were issued in connection with private placements of the Company’s Common Stock and with the restructuring of the Series B Preferred that occurred in March of 2018. The following table summarizes information about fixed stock warrants outstanding at December 31, 2023:

Warrants Outstanding at December 31, 2023								Warrants Exercisable at December 31, 2023
Range of exercise prices		Number Outstanding		Weighted average remaining contractual life (years)		Weighted average exercise price		Number exercisable		Weighted average exercise price
$	4.00		1,085,068		2.10	$	4.00		1,085,068	$	4.00
$	10.00		23,737		2.07	$	10.00		23,737	$	10.00
			1,108,805		2.10	$	4.13		1,108,805	$	4.13

During the quarter ended March 31, 2023, the Company’s Board of Directors approved the modification to extend the expiration dates of the Company’s existing January 26, 2023 and February 5, 2023 warrants by an additional three years. Accordingly, all the Company’s outstanding warrants have been extended and are anticipated to expire or be exercised on or before the quarter ending March 31, 2026.

Preferred Stock

The Company’s articles of incorporation currently authorize the issuance of up to 30,000,000 shares of ‘blank check’ preferred stock, par value $0.01 (“Preferred Stock”), with designations, rights, and preferences as may be determined from time to time by the Company’s Board of Directors, of which 700,000 shares are currently designated as Series B Preferred Stock (“Series B Preferred”) and 550,000 shares are designated as Series B-1 Preferred Stock (“Series B-1 Preferred”). Both classes of Series B Preferred Stock pay dividends at a rate of 7% per annum if paid by the Company in cash, or 9% if paid by the Company by the issuance of additional shares of Series B-1 Preferred, or Series B-1 Preferred, as applicable.

Preferred Redemption

Section 4 of the Company’s First Amended and Restated Certificate of Designation of the Relative Rights, Powers and Preferences of the Series B-1 Preferred Stock, as amended (the “Series B-1 COD”) provides the Company’s Board of Directors with the right to redeem any or all of the outstanding shares of the Company’s Series B-1 Preferred for a cash payment of $10.70 per share at any time upon providing the holders of Series B-1 Preferred at least ten days written notice that sets forth the date on which the redemption will occur (the “Redemption Notice”).

On August 29, 2023, the Board approved the redemption and retirement of its Series B Preferred and Series B-1 Preferred for their stated value, or $10.70 for each share of Preferred Stock, resulting in an aggregate purchase price of $8,964,214 (the “Preferred Redemption”). The Preferred Redemption is to occur over the next three years from August 29, 2023.

As of December 31, 2023, a total of 625,375 shares of Series B Preferred and 142,309 shares of Series B-1 Preferred were issued and outstanding.

The following table provides information about the redemption of the Series B Preferred and Series B-1 Preferred during the six months ended December 31, 2023:

	Series B Preferred and Series B-1 Preferred
Period (1)	Total Number of Shares Redeemed		Price Paid Per Share		Dollars Expended by Period under the Preferred Redemption		Remaining Amount Available for Future Preferred Redemption
July 1, 2023 – September 30, 2023:		-	$	10.70	$	-	$	8,964,214
October 1, 2023 – December 31, 2023:		70,093	$	10.70	$	749,995	$	8,214,219
Total		70,093			$	749,995	$	8,214,219

⁽¹⁾ We close our books and records on the last calendar day of each month to align our financial closing with our business processes.

On August 29, 2023, the Board approved the redemption and retirement of its Series B Preferred and Series B-1 Preferred for their stated value, or $10.70 for each share of Preferred Stock, resulting in an aggregate purchase price of $8,964,214 (the “Preferred Redemption”). The Preferred Redemption is to occur over the next three years from August 29, 2023.

The following table provides information about the redemption and retirement of the Series B Preferred and Series B-1 Preferred during the three months ended December 31, 2023:

	Series B Preferred
Period (1)	Total Number of Shares Redeemed		Price Paid Per Share		Dollars Expended by Period under the Preferred Redemption		Remaining Amount Available for Future Preferred Redemption
October 1, 2023 – December 31, 2023:		-	$	10.70	$	-	$	6,691,513
Total		-			$	-	$	6,691,513

	Series B-1 Preferred
Period (1)	Total Number of Shares Redeemed		Price Paid Per Share		Dollars Expended by Period under the Preferred Redemption		Remaining Amount Available for Future Preferred Redemption
October 1, 2023 – December 31, 2023:		70,093	$	10.70	$	749,995	$	1,522,706
Total		70,093			$	749,995	$	1,522,706

⁽¹⁾ We close our books and records on the last calendar day of each month to align our financial closing with our business processes.

Share Repurchase Program

On May 9, 2019, our Board of Directors approved the repurchase of up to $4.0 million in shares of our Common Stock, which repurchases may be made in privately negotiated transactions or in the open market at prices per share not exceeding the then-current market prices (the “Share Repurchase Program”). Under the Share Repurchase Program, management has discretion to determine the dollar amount of shares to be repurchased and the timing of any repurchases in compliance with applicable laws and regulations, including Rule 10b-18 of the Exchange Act.

On March 17, 2020, the Board, given the extreme uncertainty due to COVID-19 at the time, suspended the Share Repurchase Program.

On May 18, 2021, our Board of Directors resumed its Share Repurchase Program, and increased the number of shares of Common Stock available to repurchase under the Share Repurchase Program by an additional $4 million bringing the total number of Common Stock authorized to repurchase under the Share Repurchase Program to $8.0 million.

On August 31, 2021, our Board of Directors approved a further increase to its Share Repurchase program to $12.0 million in shares of our Common Stock which added an additional $4 million to the Share Repurchase Program.

On May 10, 2022, our Board of Directors approved an increase of $9.0 million in the number of shares of Common Stock available to repurchase under the Share Repurchase Program.

Since inception of the Share Repurchase Program through December 31, 2023, a total of $21,000,000 in shares of Common Stock have been approved under the Share Repurchase Program, and 2,122,703 shares of Common Stock have been repurchased at an average purchase price of $6.13, resulting in $7,992,206 remaining available to repurchase under the current Share Repurchase Program. From time-to-time, our Board of Directors may authorize further increases to our Share Repurchase Program. In addition, the Share Repurchase Program may also be suspended for periods of time or discontinued at any time, at the Board’s discretion.

The following table provides information about repurchases of our Common Stock registered pursuant to Section 12 of the Exchange Act, during the three months ended December 31, 2023:

Period (1)	Total Number of Shares Purchased		Average Price Paid Per Share		Dollars Expended by Period Under the Plans or Programs		Remaining Amount Available for Future Share Repurchases Under the Plans or Programs
July 1, 2023 – September 30, 2023		155,025	$	8.53	$	1,322,082	$	8,185,698
October 1, 2023 – December 31, 2023:		22,012	$	8.79	$	193,492	$	7,992,206

⁽¹⁾ We close our books and records on the last calendar day of each month to align our financial closing with our business processes.