Common Stock and Common Stock Equivalents

12 Months Ended

Jun. 30, 2023

Common Stock and Common Stock Equivalents

Common Stock and Common Stock Equivalents [Text Block]

Note 10. Common Stock and Common Stock Equivalents

The Company is a party to an equity distribution agreement (as amended, the “Equity Distribution Agreement”) originally with Canaccord Genuity LLC and Roth Capital Partners LLC (the “Agents”), pursuant to which the Company may offer and sell up to $3,875,150 of its common stock in one or more “at the market offerings” through the Agents under our Registration Statement on Form S-3 (File No. 333-256280), which was declared effective by the SEC on July 1, 2021 (the “2021 Registration Statement”), subject to applicable limitations on the aggregate market value of securities that may be sold during any 12 calendar month period imposed by Form S-3 on registrants having an aggregate market value of securities of less than $75 million. Under the terms of the Equity Distribution Agreement, the Company has agreed to pay the Agent(s) participating in an applicable offering a fixed commission rate equal to 3.0% of the gross sale price per share of common stock sold in such offering. On April 7, 2023, the Company filed a prospectus supplement to the base prospectus included in the 2021 Registration Statement for the sale of up to $2,671,513 of its common stock pursuant to the terms of the Equity Distribution Agreement (the “ATM”). As of the date hereof, the Company has not commenced any sales under the ATM.

The Company maintains an equity incentive plan for the benefit of employees. On December 3, 2018, the shareholders approved the 2018 equity incentive plan ("2018 Equity Plan"), setting aside 120,000 shares of common stock. On December 10, 2020, the shareholders approved a new 2020 equity incentive plan ("2020 Equity Plan"), setting aside 200,000 shares of common stock. Shares remaining available under the 2018 Equity Plan are eligible for use under the 2020 Equity Plan. Incentive and nonqualified stock options, restricted common stock, stock appreciation rights, and other share-based awards may be granted under the plans including performance-based awards. As of June 30, 2023, 198,084 shares of common stock (including shares previously available under the 2018 Equity Plan) remained authorized and reserved for issuance, but were not granted under the terms of the 2020 Equity Plan.

For the year ended June 30, 2023, the Company granted 10,000 shares of restricted common stock to directors in connection with compensation arrangements and 26,048 shares to employees. For the year ended June 30, 2022, the Company granted 12,000 shares of restricted common stock to directors in connection with compensation arrangements and 12,001 shares to employees.

The Company had not granted any options for the purchase of shares of common stock under its equity incentive plans during fiscal years 2023 and 2022, respectively.

No options were granted during fiscal year 2023 and 2022. The following table summarizes the Company's stock option activity during the reported fiscal years:

	2023						2022
	Number of shares		Weighted average exercise price			Weighted average remaining contractual term	Number of shares		Weighted average exercise price
Options outstanding at beginning of the year	28,000	$			7.80	4.75 years	28,000	$			7.80
Options granted	-				n/a		-				n/a
Options canceled or expired	-				n/a		-				n/a
Options outstanding at end of the year	28,000	$			7.80	3.75 years	28,000	$			7.80
Options exercisable at end of the year	22,250	$			8.26		15,500	$			9.00
Range of exercise prices at end of the year		$	4.65	-	13.50			$	4.65	-	13.50

The Company recognized $131,336 and $178,148 in stock-based compensation for the years ended June 30, 2023 and 2022, respectively, which is included in selling, general, and administrative expenses in the consolidated statements of operations. The stock-based compensation includes amounts for both restricted stock and stock options.

As of June 30, 2023, there was $41,808 of unrecognized stock-based compensation cost that is expected to be expensed over the next two years.

No options were exercised during fiscal years 2023 and 2022. The aggregate intrinsic value of the outstanding options as of both June 30, 2023 and 2022 was $0.