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LONG-TERM INCENTIVE PLAN AWARDS
 3 Months Ended
Sep. 30, 2024
Share-Based Payment Arrangement [Abstract]  
LONG-TERM INCENTIVE PLAN AWARDS

NOTE 8 – LONG-TERM INCENTIVE PLAN AWARDS

 

We apply the provisions of ASC 718, “Compensation - Stock Compensation,” to all of our stock-based compensation awards and use the Black-Scholes option pricing model to value stock options. The fair value of each share option award on the date of grant was estimated using the Black-Scholes method based on the following weighted average assumptions: The risk-free interest rate is based on the U.S. treasury yield curve in effect at the time of grant for periods corresponding with the expected term of options award; the expected term represents awards granted are expected to be outstanding giving considerations vesting schedules and historical participant exercise behavior; the expected volatility is based upon historical volatility of the dividend yield is based upon the company’s dividend rate at the time fair value is measure and future expectations. Under this application, we record compensation expense for all awards granted.

 

In July of 2020, the Board of Directors adopted the 2020 Franklin Wireless Corp. Stock Option Plan (the “2020 Plan”), which covers 800,000 shares of Common Stock. The 2020 Plan provides for the grant of incentive stock options, non-qualified stock options and restricted stock to our employees, directors, and independent contractors. These options will have such vesting or other provisions as may be established by the Board of Directors at the time of each grant.

 

The estimated forfeiture rate considers historical turnover rates stratified into employee pools in comparison with an overall employee turnover rate, as well as expectations about the future. We periodically revise the estimated forfeiture rate in subsequent periods if actual forfeitures differ from those estimates. There were $87,384 and $51,589 compensation expenses recorded under this method for the three months ended September 30, 2024 and 2023, respectively. 

 

A summary of the status of our stock options is presented below as of September 30, 2024:

                               
                Weighted-        
                Average        
          Weighted-     Remaining        
          Average     Contractual     Aggregate  
          Exercise     Life     Intrinsic  
Options   Shares     Price     (In Years)     Value  
Outstanding as of June 30, 2024     627,001     $ 4.24       2.88     $ 130,200  
Granted     –       –       –       –  
Exercised     –       –       –       –  
Cancelled     –       –       –       –  
Forfeited or expired     (7,000)       3.96       –       –  
Outstanding as of September 30, 2024     620,001     $ 4.22       1.63     $ 434,400  
                                 
Exercisable as of September 30, 2024     590,605     $ 4.26       1.60     $ 399,125  

  

The aggregate intrinsic value in the preceding table represents the total pretax intrinsic value, based upon the Company’s closing stock price of $4.58 as of September 30, 2024, which would have been received by the option holders had all option holders exercised their options as of that date. The weighted-average grant-date fair value of stock options outstanding as of September 30, 2024, in the amount of 620,001 shares was $3.33 per share. As of September 30, 2024, there was unrecognized compensation cost of $83,199 related to non-vested stock options granted.

 

A summary of the status of our stock options is presented below as of September 30, 2023:

                                 
                Weighted-        
                Average        
          Weighted-     Remaining        
          Average     Contractual     Aggregate  
          Exercise     Life     Intrinsic  
Options   Shares     Price     (In Years)     Value  
Outstanding as of June 30, 2023     647,001     $ 4.24       2.88     $ 130,200  
Granted     –       –       –       –  
Exercised     –       –       –       –  
Cancelled     –       –       –       –  
Forfeited or expired     (16,000)       4.77       –       –  
Outstanding as of September 30, 2023     631,001     $ 4.23       2.63     $ –  
                                 
Exercisable as of September 30, 2023     478,642     $ 4.49       2.44     $ –  

  

The aggregate intrinsic value in the preceding table represents the total pretax intrinsic value, based upon the Company’s closing stock price of $3.20 as of September 30, 2023, which would have been received by the option holders had all option holders exercised their options as of that date. The weighted-average grant-date fair value of stock options outstanding as of September 30, 2023, in the amount of 631,001 shares was $3.34 per share. As of September 30, 2023, there was unrecognized compensation cost of $432,617 related to non-vested stock options granted.