NOTE 7 – STOCK BASED COMPENSATION PLANS

The Company follows Accounting Standard Codification (ASC) Topic 718 “Compensation – Stock Compensation”, which addresses accounting for equity-based compensation arrangements, including employee stock options and restricted stock units.

Please refer to Note 16 – Stock Based Compensation Plans in the Company's Form 10-K for the year ended June 30, 2017 for more detail information on the Company’s stock-based compensation plans.

During the three months ended December 31, 2017 and 2016, the Company recorded stock option compensation cost of $60,000 and $66,000, respectively, related to stock options that were previously issued. For the six months ended December 31, 2017 and 2016, the Company recorded stock option compensation cost of $122,000 and $140,000, respectively, related to stock options that were previously issued. As of December 31, 2017, there was a total of $181,000 of unamortized compensation related to stock options which is expected to be recognized over the weighted-average period of 2.90 years.

Option-pricing models require the input of various subjective assumptions, including the option’s expected life and the price volatility of the underlying stock. The expected stock price volatility is based on analysis of the Company’s stock price history. The Company has selected to use the simplified method for estimating the expected term. The risk-free interest rate is based on the U.S. Treasury interest rates whose term is consistent with the expected life of the stock options. No dividend yield is included as the Company has not issued any dividends and does not anticipate issuing any dividends in the future.

The following table summarizes the stock options activity from July 1, 2016 through December 31, 2017:

		Shares		Exercise Price		Remaining Life	Intrinsic Value

Oustanding at	July 1, 2016		350,000	$	16.70	5.95 years	$	3,082,000
Granted			18,000		27.30
Exercised			-		-
Forfeited			-		-
Exchanged			-		-
Oustanding at	June 30, 2017		368,000	$	17.21	5.17 years	$	3,046,000
Exercisable at	June 30, 2017		286,000	$	16.19	5.20 years	$	2,635,000
Vested and Expected to vest at	June 30, 2017		368,000	$	17.21	5.17 years	$	3,046,000

Oustanding at	July 1, 2017		368,000	$	17.21	5.17 years	$	3,046,000
Granted			-		-
Exercised			-		-
Forfeited			-		-
Exchanged			-		-
Oustanding at	December 31, 2017		368,000	$	17.21	4.67 years	$	2,500,575
Exercisable at	December 31, 2017		318,000	$	16.47	4.80 years	$	2,345,000
Vested and Expected to vest at	December 31, 2017		368,000	$	17.21	4.67 years	$	2,500,575