Note 24 - Stock Options

12 Months Ended

Jun. 30, 2023

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

24.  STOCK OPTIONS

On September 24, 2007, the Company’s Board of Directors unanimously adopted the 2007 Employee Stock Option Plan (the “2007 Employee Plan”) and the 2007 Directors Equity Incentive Plan (the “2007 Directors Plan” and, together with the 2007 Employee Plan, the “2007 Plans”), each of which was approved by the shareholders on December 3, 2007. Each of the 2007 Plans were amended during the term of such plan to increase the number of shares covered thereby. Each of the 2007 Plans terminated by their respective terms on September 24, 2017.

On September 14, 2017, the Company’s Board of Directors unanimously adopted the 2017 Employee Stock Option Plan (the “2017 Employee Plan”) and the 2017 Directors Equity Incentive Plan (the “2017 Directors Plan”) each of which was approved by the shareholders on December 4, 2017.

Assumptions

The fair value for the stock options granted to both employees and directors was estimated using the Black-Scholes option pricing model with the following weighted average assumptions, assuming: 

● An expected life varying from 2.50 to 3.25 years, calculated in accordance with the guidance provided in SEC Staff bulletin No. 110 for plain vanilla options using the simplified method, since our equity shares have been publicly traded for only a limited period and we did not have sufficient historical exercise data at the grant date of the options;

● A risk-free interest rate varying from 0.11% to 4.17% (2022: 0.11% to 2.35%);

● No expected dividend payments and;

● Expected volatility of 47.3% to 73.85% (2022: 45.38% to 55.59%).

The expected volatilities are based on the historical volatility of the Company’s Common Stock. Due to higher volatility, the observation was made on a daily basis for the 12 months ended June 30, 2023 and 2022 respectively. The observation period covered is consistent with the expected life of the options. The expected life of the options granted to employees has been determined utilizing the “simplified” method as prescribed by ASC Topic 718 Stock Based Compensation, which, among other provisions, allows companies without access to adequate historical data about employee exercise behavior to use a simplified approach for estimating the expected life of a "plain vanilla" option grant. The simplified rule for estimating the expected life of such an option is the average of the time to vesting and the full term of the option. The risk-free rate is consistent with the expected life of the stock options and is based on the United States Treasury yield curve in effect at the time of grant.

2017 Employee Stock Option Plan

The Company’s 2017 Employee Plan permits the grant of stock options to its employees, and initially covered up to an aggregate of 300,000 shares of Common Stock. In December 2021, the Company’s Board of Directors approved an amendment to the 2017 Employee Plan to increase the shares covered thereby from 300,000 shares to an aggregate of 600,000 shares, which amendment was approved by the Company’s shareholders at the annual meeting held in December 2021.

Under the 2017 Employee Plan, all options must be granted with an exercise price of no less than fair value as of the grant date and the options granted must be exercisable within a maximum of ten years after the date of grant, or such lesser period of time as is set forth in the stock option agreements. The options may be exercisable (a) immediately as of the effective date of the stock option agreement granting the option, or (b) in accordance with a schedule related to the date of the grant of the option, the date of first employment, or such other date as may be set by the Compensation Committee. Generally, options granted under the 2017 Employee Plan are exercisable within five years after the date of grant, and vest over the period as follows: 25% vesting on the grant date and the remaining balance vesting in equal instalments on the next three succeeding anniversaries of the grant date. The share-based compensation will be recognized in terms of the grade method on a straight-line basis for each separately vesting portion of the award. Certain option awards provide for accelerated vesting if there is a change in control (as defined in the 2017 Employee Plan).

During the year ended June 30, 2023, the Company granted options to purchase 65,000 shares of its Common Stock to employees pursuant to the 2017 Employee Plan, with a weighted average grant-date fair value of $4.84.

There were 5,000 stock options exercised under the 2017 Employee Plan during the year ended June 30, 2023. The Company recognized stock-based compensation expense of $145 in the year ended June 30, 2023 under the 2017 Employee Plan. The balance of unamortized stock-based compensation of $144 based on fair value on the grant date related to options granted under the 2017 Employee Plan is to be recognized over a period of 3 years. The weighted average remaining contractual term for non-vested options outstanding under the 2017 Employee Plan was 1.99 years.

As of June 30, 2023, there were vested employee stock options granted under the 2017 Employee Plan covering a total of 134,625 shares of Common Stock, with a weighted average exercise price was $4.49, and weighted average contractual term of 2.57 years. The total fair value of vested employee stock options outstanding under the 2017 Employee Plan as of June 30, 2023, was $605.

A summary of option activities under the 2017 Employee Plan during the year ended June 30, 2023, is presented as follows:

				Weighted Average		Weighted Average Remaining Contractual		Aggregate
				Exercise		Term		Intrinsic
	Options			Price		(Years)		Value
Outstanding at July 1, 2022		236,375			5.21		2.61		87
Granted		65,000			4.84		-		-
Exercised		(5,000	)		3.75		-		-
Forfeited or expired		(80,000	)		-		-		-
Outstanding at June 30, 2023		216,375			4.89		2.92		140
Exercisable at June 30, 2023		134,625			4.49		2.57		125

A summary of the status of the Company’s non-vested employee stock options during the year ended June 30, 2023, is presented below:

				Weighted Average
	Options			Grant-Date Fair Value
Non-vested at July 1, 2022		75,875		$	5.98
Granted		65,000			4.77
Vested		(49,125	)		-
Forfeited		(10,000	)		-
Non-vested at June 30, 2023		81,750		$	5.53

During the year ended June 30, 2022, the Company granted options to purchase 40,500 shares of its Common Stock to employees pursuant to the 2017 Employee Plan, with a weighted average grant-date fair value of $3.69.

There were 71,125 stock options exercised under the 2017 Employee Plan during the year ended June 30, 2022. The Company recognized stock-based compensation expense of $117 in the year ended June 30, 2022 under the 2017 Employee Plan. The balance of unamortized stock-based compensation of $130 based on fair value on the grant date related to options granted under the 2017 Employee Plan is to be recognized over a period of three years. The weighted average remaining contractual term for non-vested options outstanding under the 2017 Employee Plan was 1.94 years.

As of June 30, 2022, there were vested employee stock options granted under the 2017 Employee Plan covering a total of 160,500 shares of Common Stock, with a weighted average exercise price was $4.93, and weighted average contractual term of 1.98 years. The total fair value of vested employee stock options outstanding under the 2017 Employee Plan as of June 30, 2022, was $632.

A summary of option activities under the 2017 Employee Plan during the year ended June 30, 2022, is presented as follows:

				Weighted Average		Weighted Average Remaining Contractual		Aggregate
				Exercise		Term		Intrinsic
	Options			Price		(Years)		Value
Outstanding at July 1, 2021		267,000			4.21		3.22		290
Granted		40,500			7.76		4.73		-
Exercised		(71,125	)		2.93		-		-
Outstanding at June 30, 2022		236,375			5.21		2.61		87
Exercisable at June 30, 2022		160,500			4.93		1.98		66

A summary of the status of the Company’s non-vested employee stock options during the year ended June 30, 2022, is presented below:

				Weighted Average
	Options			Grant-Date Fair Value
Non-vested at July 1, 2021		102,250		$	2.29
Granted		40,500			3.69
Vested		(66,875	)		-
Non-vested at June 30, 2022		75,875		$	5.98

2007 Employee Stock Option Plan

The Company’s 2007 Employee Plan permitted the issuance of options to employees. As of the last amendment thereof, the 2007 Employee Plan covered an aggregate of 600,000 shares of the Company’s Common Stock. The 2007 Employee Plan terminated by its terms on September 24, 2017 and no further options may be granted thereunder. Options outstanding thereunder continue to remain outstanding and in effect in accordance with their terms.

There were no options exercised during the year ended June 30, 2023 and 37,500 options exercised during the year ended June 30, 2022. The Company did not recognize any stock-based compensation expense in both Fiscal 2023 and Fiscal 2022, under the 2007 Employee Plan.

As of June 30, 2023 and 2022, there were no vested or unvested stock options outstanding under the 2007 Employee Plan.

A summary of option activities under the 2007 Employee Plan during the year ended June 30, 2022, is presented as follows:

				Weighted Average		Weighted Average Remaining Contractual		Aggregate
				Exercise		Term		Intrinsic
	Options			Price		(Years)		Value
Outstanding at July 1, 2021		37,500		$	4.14		0.75	$	34
Granted		-			-		-		-
Exercised		(37,500	)		4.14		-		-
Outstanding at June 30, 2022		-		$	-		-	$	-
Exercisable at June 30, 2022		-		$	-		-	$	-

2017 Directors Equity Incentive Plan

The 2017 Directors Plan permits the grant of options to its directors in the form of non-qualified options and restricted stock, and initially covered up to an aggregate of 300,000 shares of Common Stock. In September 2020, the Company’s Board of Directors approved an amendment to the 2017 Directors Plan to increase the shares covered thereby from 300,000 shares to an aggregate of 600,000 shares, which amendment was approved by the Company’s shareholders at the annual meeting held in December 2020.

Under the 2017 Plan, the exercise price of the non-qualified options is required to be 100% of the fair value of the underlying shares on the grant date. The options have five-year contractual terms and are exercisable immediately as of the grant date.

During the year ended June 30, 2023, the Company granted options to purchase 100,000 shares of its Common Stock to directors pursuant to the 2017 Directors Plan, with an exercise price equal to the fair market value of Common Stock (as defined under the 2017 Directors Plan in conformity with Regulation 409A or the Internal Revenue Code of 1986, as amended) at the date of grant, and a fair value of approximately $213, based on the fair value of $2.13 per share determined by the Black-Scholes option pricing model.

As all stock options granted under the 2017 Directors Plan vest immediately on the date of grant, there were no unvested stock options granted under the 2017 Directors Plan as of June 30, 2023.

There were 20,000 stock options exercised under the 2017 Directors Plan during the year ended June 30, 2023. The Company recognized stock-based compensation expense of $213 in the year ended June 30, 2023 under the 2017 Directors Plan.

A summary of option activities under the 2017 Directors Plan during the year ended June 30, 2023, is presented as follows: 

				Weighted Average		Weighted Average Remaining Contractual		Aggregate
				Exercise		Term		Intrinsic
	Options			Price		(Years)		Value
Outstanding at July 1, 2022		420,000		$	5.10		2.85	$	228
Granted		100,000			4.51		-		-
Exercised		20,000			2.53		-
Forfeited or expired		(80,000	)		5.98		-		-
Outstanding at June 30, 2023		420,000		$	4.91		2.91	$	309
Exercisable at June 30, 2023		420,000			4.91		2.91		309

During the year ended June 30, 2022, the Company granted options to purchase 100,000 shares of its Common Stock to directors pursuant to the 2017 Directors Plan, with an exercise price equal to the fair market value of Common Stock (as defined under the 2017 Directors Plan in conformity with Regulation 409A or the Internal Revenue Code of 1986, as amended) at the date of grant, and a fair value of approximately $353, based on the fair value of $3.53 per share determined by the Black-Scholes option pricing model.

As all stock options granted under the 2017 Directors Plan vest immediately on the date of grant, there were no unvested stock options granted under the 2017 Directors Plan as of June 30, 2022.

There were no options under the 2017 Directors Plan exercised during the year ended June 30, 2022. The Company recognized stock-based compensation expense of $353 in the year ended June 30, 2022 under the 2017 Directors Plan.

A summary of option activities under the 2017 Directors Plan during the year ended June 30, 2022, is presented as follows: 

			Weighted Average		Weighted Average Remaining Contractual		Aggregate
			Exercise		Term		Intrinsic
	Options		Price		(Years)		Value
Outstanding at July 1, 2022		320,000	$	4.27		3.22	$	340
Granted		100,000		7.76		4.73		-
Exercised		-		-		-		-
Forfeited or expired		-		-		-		-
Outstanding at June 30, 2022		420,000	$	5.10		2.85	$	228
Exercisable at June 30, 2022		420,000		5.10		2.85		228

2007 Directors Equity Incentive Plan

The Company’s 2007 Directors Plan permitted the grant of stock options to its directors in the form of nonqualified options and restricted stock. As of the last amendment thereof, the 2007 Directors Plan covered an aggregate of 500,000 shares of the Company’s Common Stock. The 2007 Directors Plan terminated by its terms on September 24, 2017, and no further options may be granted thereunder. Options outstanding thereunder continue to remain outstanding and in effect in accordance with their terms.

There were no stock options exercised during the year ended June 30, 2023. The Company did not recognize any stock-based compensation expense during the year ended June 30, 2023.

There were 50,000 options exercised during the year ended June 30, 2022. The Company did not recognize any stock-based compensation expense during the year ended June 30, 2022.

As of June 30, 2023 and 2022, there were no vested or unvested stock options outstanding under 2007 Directors Plan.

A summary of option activities under the 2007 Directors Plan during the year ended June 30, 2022, is presented as follows:

				Weighted Average		Weighted Average Remaining Contractual		Aggregate
				Exercise		Term		Intrinsic
	Options			Price		(Years)		Value
Outstanding at July 1, 2021		50,000		$	4.14		0.75	$	45
Granted		-			-		-		-
Exercised		(50,000	)		4.14		-		-
Forfeited or expired		-			-		-		-
Outstanding at June 30, 2022		-		$	-		-	$	-
Exercisable at June 30, 2022		-		$	-		-	$	-