Note 20 - Stock Options

6 Months Ended

Dec. 31, 2023

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

20. STOCK OPTIONS

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 of time;

● A risk-free interest rate varying from 0.11% to 4.59% (2023: 0.11% to 4.17%);

● No expected dividend payments; and

● Expected volatility of 52.2% to 73.85% (2023: 47.3% to 73.85%).

2017 Employee Stock Option Plan

The Company’s 2017 Employee Plan permits the grant of stock options to its employees covering 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 installments 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 first two quarters of Fiscal 2024, 48,000 stock options were granted under the 2017 Employee Plan. There were 63,875 stock options exercised during the six-month period ended December 31, 2023. The Company recognized $90 in stock-based compensation expense during the six months ended December 31, 2023.

During the first two quarters of Fiscal 2023, 25,000 stock options were granted under the 2017 Employee Plan. There were 5,000 stock options exercised during the six-month period ended December 31, 2022. The Company recognized $54 in stock-based compensation expense during the six months ended December 31, 2022.

As of December 31, 2023, there were vested stock options granted under the 2017 Employee Plan covering a total of 88,250 shares of Common Stock. The weighted-average exercise price was $5.59 and the weighted average remaining contractual term was 3.08 years.

As of December 31, 2022, there were vested stock options granted under the 2017 Employee Plan covering a total of 134,500 shares of Common Stock. The weighted-average exercise price was $4.78 and the weighted average remaining contractual term was 1.73 years.

A summary of option activities under the 2017 Employee Plan during the six months period ended December 31, 2023, is presented as follows:

				Weighted		Weighted Average Remaining
				Average		Contractual		Aggregate
	Options			Exercise Price		Term (Years)		Intrinsic Value
Outstanding at July 1, 2023		216,375		$	4.89		2.92	$	140
Granted		48,000			4.88		-		-
Exercised		(63,875	)		3.12		-		-
Forfeited or expired		(3,500	)		3.75		-		-
Outstanding at December 31, 2023		197,000		$	5.48		3.51	$	39
Exercisable at December 31, 2023		88,250		$	5.59		3.08	$	16

A summary of the status of the Company’s non-vested employee stock options during the six months ended December 31, 2023, is presented below:

				Weighted Average
	Options			Grant-Date Fair Value
Non-vested at July 1, 2023		81,750		$	5.53
Granted		48,000			4.88
Vested		(21,000	)		-
Non-vested at December 31, 2023		108,750		$	5.38

A summary of option activities under the 2017 Employee Plan during the six months period ended December 31, 2022, 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		25,000			5.18		-		-
Exercised		(5,000	)		3.75		-		-
Forfeited or expired		(40,000	)		-		-		-
Outstanding at December 31, 2022		216,375		$	5.16		2.49	$	96
Exercisable at December 31, 2022		134,500		$	4.78		1.73	$	75

A summary of the status of the Company’s non-vested employee stock options during the six months ended December 31, 2022, is presented below:

				Weighted Average
	Options			Grant-Date Fair Value
Non-vested at July 1, 2022		75,875		$	5.98
Granted		25,000			5.18
Vested		(9,000	)		-
Forfeited		(10,000	)		-
Non-vested at December 31, 2022		81,875		$	5.79

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. In October 2023, the Company’s Board of Directors approved an amendment to the 2017 Directors Plan to increase the shares covered thereby from 600,000 shares to an aggregate of 900,000 shares, which amendment was approved by the Company’s shareholders at the annual meeting held in December 2023.

Under the 2017 Directors 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 first two quarters of Fiscal 2024, the Company did not grant any options pursuant to the 2017 Directors Plan. There were no stock options exercised and the Company did not recognize any stock-based compensation expense during the six months ended December 31, 2023 and 2022.

As all the 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 December 31, 2023, or December 31, 2022.

As of December 31, 2023, there were vested stock options granted under the 2017 Directors Plan covering a total of 420,000 shares of Common Stock. The weighted average exercise price was $4.91 and the weighted average remaining contractual term was 2.41 years.

As of December 31, 2022, there were vested stock options granted under the 2017 Director Plan covering a total of 420,000 shares of Common Stock. The weighted-average exercise price was $5.10 and the weighted average remaining contractual term was 2.34 years.

A summary of option activities under the 2017 Directors Plan during the six months ended December 31, 2023, is presented as follows: 

			Weighted		Weighted Average Remaining
			Average		Contractual		Aggregate
	Options		Exercise Price		Term (Years)		Intrinsic Value
Outstanding at July 1, 2023		420,000	$	4.91		2.91	$	309
Granted		-		-		-		-
Exercised		-		-		-		-
Forfeited or expired		-		-		-		-
Outstanding at December 31, 2023		420,000	$	4.91		2.41	$	352
Exercisable at December 31, 2023		420,000	$	4.91		2.41	$	352

A summary of option activities under the 2017 Directors Plan during the six months period ended December 31, 2022, 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		-		-				-
Exercised		-		-		-		-
Forfeited or expired		-		-		-		-
Outstanding at December 31, 2022		420,000	$	5.10	$	2.34	$	255
Exercisable at December 31, 2022		420,000	$	5.10	$	2.34	$	255