STOCK OPTIONS

6 Months Ended

Dec. 31, 2020

Share-based Payment Arrangement [Abstract]

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”), each of which was approved by the shareholders on December 3, 2007. Each of those plans was amended during the term of such plan to increase the number of shares covered thereby. As of the last amendment thereof, the 2007 Employee Plan covered an aggregate of 600,000 shares of the Company’s Common Stock and the 2007 Directors Plan covered an aggregate of 500,000 shares of the Company’s Common Stock. Each of those plans terminated by its respective terms on September 24, 2017. These two plans were administered by the Board, which also established the terms of the awards.

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. Each of these plans is administered by the Board of Directors of the Company.

Assumptions

The fair value for the options granted were estimated using the Black-Scholes option pricing model with the following weighted average assumptions, assuming no expected dividends: 

	Six Months Ended December 31,
		2020	2019
Expected volatility		45.38% to 76.85%	45.38% to 97.48%
Risk-free interest rate		0.14% to 2.35%	0.30% to 2.35%
Expected life (years)		0.25 - 4.51	2.5 - 3.25

The expected volatilities are based on the historical volatility of the Company’s stock. Due to lower volatility, the observation is made on a daily basis for the three months ended December 31, 2020. The observation period covered is consistent with the expected life of 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 covering up to an aggregate of 300,000 shares of Common Stock. Under the 2017 Employee Plan, all options must be granted with an exercise price of not 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 year 2021, there were stock options granted under the 2017 Employee Plan covering a total of 11,000 shares of Common Stock. There were no stock options exercised during the six month period ended December 31, 2020. The Company recognized $15 stock-based compensation expenses during the six months ended December 31, 2020.

During the first two quarters of fiscal year 2020, the Company did not grant any options pursuant to the 2017 Employee Plan. There were no stock options exercised during the six-month period ended December 31, 2019. The Company recognized $14 stock-based compensation expenses during the six months ended December 31, 2019.

As of December 31, 2020, there were vested stock options granted under the 2017 Employee Plan covering a total of 104,750 shares of Common Stock. The weighted-average exercise price was $4.40 and the weighted average remaining contractual term was 2.96 years.

As of December 31, 2019, there were vested stock options granted under the 2017 Employee Plan covering a total of 53,000 shares of Common Stock. The weighted-average exercise price was $4.88 and the weighted average remaining contractual term was 3.63 years.

A summary of option activities under the 2017 Employee Plan during the six months period ended December 31, 2020 is presented as follows:

	Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value
Outstanding at July 1, 2020		196,000	$	3.92		3.72	$	36.00
Granted		11,000		3.73		-		-
Exercised		-		-		-		-
Forfeited or expired		-		-		-		-
Outstanding at December 31, 2020		207,000	$	3.91		3.31	$	132.49
Exercisable at December 31, 2020		104,750	$	4.40		2.96	$	45.00

A summary of the status of the Company’s non-vested employee stock options during the six months ended December 31, 2020 is presented below:

	Options			Weighted Average Grant-Date Fair Value
Non-vested at July 1, 2020		98,000		$	3.39
Granted		11,000			-
Vested		(6,750	)		-
Forfeited		-			-
Non-vested at December 31, 2020		102,250		$	3.40

A summary of option activities under the 2017 Employee Plan during the six months period ended December 31, 2019 is presented as follows:

	Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value
Outstanding at July 1, 2019		136,000	$	4.53		4.28	$	-
Granted		-		-		-		-
Exercised		-		-		-		-
Forfeited or expired		-		-		-		-
Outstanding at December 31, 2019		136,000	$	4.53		3.77	$	46.44
Exercisable at December 31, 2019		53,000	$	4.88		3.63	$	12.57

A summary of the status of the Company’s non-vested employee stock options during the six months ended December 31, 2019 is presented below:

	Options			Weighted Average Grant-Date Fair Value
Non-vested at July 1, 2019		87,000		$	4.28
Granted		-			-
Vested		(4,000	)		-
Forfeited		-			-
Non-vested at December 31, 2019		83,000		$	4.30

2007 Employee Stock Option Plan

The 2007 Employee Plan terminated by its terms on September 24, 2017 and no further options may be granted thereunder. However, the options outstanding thereunder continue to remain outstanding and in effect in accordance with their terms. The 2007 Employee Plan permitted the issuance of options to employees.

As the 2007 Plan has terminated, the Company did not grant any options pursuant to the 2007 Employee Plan during the six months ended December 31, 2020 and December 31, 2019 respectively.

There were no options exercised during the six months ended December 31, 2020 and December 31, 2019. The Company did not recognize any stock-based compensation expenses during the six months ended December 31, 2020 and December 31, 2019.

As of December 31, 2020, there were vested stock options granted under the 2007 Employee Plan covering a total of 77,500 shares of Common Stock. The weighted-average exercise price was $3.69 and the weighted average remaining contractual term was 0.71 years.

As of December 31, 2019, there were vested stock options granted under the 2007 Employee Plan covering a total of 68,125 shares of Common Stock. The weighted-average exercise price was $3.62 and the weighted average remaining contractual term was 1.64 years.

A summary of option activities under the 2007 Employee Plan during the six months ended December 31, 2020 is presented as follows:

	Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value
Outstanding at July 1, 2020		77,500	$	3.69		1.22	$	-
Granted		-		-		-		-
Exercised		-		-		-		-
Forfeited or expired		-		-		-		-
Outstanding at December 31, 2020		77,500	$	3.69		0.71	$	28.00
Exercisable at December 31, 2020		77,500	$	3.69		0.71	$	28.00

There were no non-vested employee stock options during the six months ended December 31, 2020.

A summary of option activities under the 2007 Employee Plan during the six months ended December 31, 2019 is presented as follows:

	Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value
Outstanding at July 1, 2019		77,500	$	3.69		2.22	$	-
Granted		-		-		-		-
Exercised		-		-		-		-
Forfeited or expired		-		-		-		-
Outstanding at December 31, 2019		77,500		3.69		1.71	$	29.20
Exercisable at December 31, 2019		68,125	$	3.62		1.64	$	29.20

A summary of the status of the Company’s non-vested employee stock options under the 2007 Employee Plan during the six months ended December 31, 2019 is presented below:

	Options		Weighted Average Grant-Date Fair Value
Non-vested at July 1, 2019		9,375	$	4.14
Granted		-		-
Vested		-		-
Forfeited		-		-
Non-vested at December 31, 2019		9,375	$	4.14

2017 Directors Equity Incentive Plan

The 2017 Directors Plan initially covered an aggregate of 300,000 shares of the Company’s common stock. The Company’s board of directors approved an amendment to the 2017 Directors Plan in September 2020 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. The 2017 Directors Plan permits the grant of options to its directors in the form of non-qualified options and restricted stock. 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 year 2021, the Company did not grant any options pursuant to the 2017 Directors Plan. There were no stock options exercised during the six months ended December 31, 2020. The Company did not recognize any stock-based compensation expenses during the six months ended December 31, 2020.

During the first two quarters of fiscal year 2020, the Company did not grant any options pursuant to the 2017 Directors Plan. There were no stock options exercised during the six months ended December 31, 2019. The Company did not recognize any stock-based compensation expenses during the six months ended December 31, 2019.

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, 2020 or December 31, 2019.

As of December 31, 2020, there were vested stock options granted under the 2017 Directors Plan covering a total of 240,000 shares of Common Stock. The weighted-average exercise price was $3.93 and the weighted average remaining contractual term was 3.24 years.

As of December 31, 2019, there were vested stock options granted under the 2017 Directors Plan covering a total of 160,000 shares of Common Stock. The weighted-average exercise price was $4.63 and the weighted average remaining contractual term was 3.75 years.

A summary of option activities under the 2017 Directors Plan during the six months ended December 31, 2020 is presented as follows:

	Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value
Outstanding at July 1, 2020		240,000	$	3.93		3.75	$	48.00
Granted		-		-		-		-
Exercised		-		-		-		-
Forfeited or expired		-		-		-		-
Outstanding at December 31, 2020		240,000	$	3.93		3.24	$	168.80
Exercisable at December 31, 2020		240,000	$	3.93		3.24	$	168.80

A summary of option activities under the 2017 Directors Plan during the six months ended December 31, 2019 is presented as follows:

	Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value
Outstanding at July 1, 2019		160,000	$	4.63		4.25	$	-
Granted		-		-		-		-
Exercised		-		-		-		-
Forfeited or expired		-		-		-		-
Outstanding at December 31, 2019		160,000	$	4.63		3.75	$	56.80
Exercisable at December 31, 2019		160,000	$	4.63		3.75	$	56.80

2007 Directors Equity Incentive Plan

The 2007 Directors Plan terminated by its terms on September 24, 2017 and no further options may be granted thereunder. However, the options outstanding thereunder continue to remain outstanding and in effect in accordance with their terms. The 2007 Directors Plan permitted the issuance of options to directors.

As the 2007 Plan has terminated, the Company did not grant any options pursuant to the 2007 Directors Plan during the six months ended December 31, 2020 and December 31, 2019.

50,000 shares of stock options were exercised during the six months ended December 31, 2020. The Company did not recognize any stock-based compensation expenses during the six months ended December 31, 2020.

There were no stock options exercised during the six months ended December 31, 2019. The Company did not recognize any stock-based compensation expenses during the six months ended December 31, 2019.

As of December 31, 2020, there were vested stock options granted under the 2007 Directors Plan covering a total of 200,000 shares of Common Stock. The weighted-average exercise price was $3.48 and the weighted average remaining contractual term was 0.47 years.

As of December 31, 2019, there were vested stock options granted under the 2007 Directors Plan covering a total of 250,000 shares of Common Stock. The weighted-average exercise price was $3.32 and the weighted average remaining contractual term was 1.33 years.

A summary of option activities under the 2007 Directors Plan during the six months ended December 31, 2020 is presented as follows: 

	Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value
Outstanding at July 1, 2020		250,000		$	3.32		0.83	$	22.00
Granted		-			-		-		-
Exercised		(50,000	)		2.69		-		-
Forfeited or expired		-			-		-		-
Outstanding at December 31, 2020		200,000		$	3.48		0.47	$	105.00
Exercisable at December 31, 2020		200,000		$	3.48		0.47	$	105.00

A summary of option activities under the 2007 Directors Plan during the six months ended December 31, 2019 is presented as follows: 

	Options			Weighted Average Exercise Price			Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value
Outstanding at July 1, 2019		300,000		$	3.40			1.58	$	9.00
Granted		-			-			-		-
Exercised		-			-			-		-
Forfeited or expired		(50,000	)		(3.81	)		-		-
Outstanding at December 31, 2019		250,000		$	3.32			1.33	$	174.50
Exercisable at December 31, 2019		250,000		$	3.32			1.33	$	174.50