Note 23 - Stock Options

12 Months Ended

Jun. 30, 2022

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

23. 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 options granted were estimated using the Black-Scholes option pricing model with the following weighted average assumptions, assuming no expected dividends: 

	For the Year Ended June 30,
	2022			2021
Expected volatility		40.89% to 84	%		40.89% to 69.03	%
Risk-free interest rate		0.11% to 2.35	%		0.14% to 2.35	%
Expected life (years)		2.5 -3.25			2.5 -3.25

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 twelve months ended June 30, 2022 and 2021 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 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 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 $791.

During the year ended June 30, 2021, the Company granted options to purchase 71,000 shares of its Common Stock to employees pursuant to the 2017 Employee Plan, with a weighted average grant-date fair value of $1.88. The total fair value of vested employee stock options granted pursuant to the 2017 Employee Plan was $39 during the year ended June 30, 2021.

There were no stock options under the 2017 Employee Plan exercised during the year ended June 30, 2021. The Company recognized stock-based compensation expense of $105 during the year ended June 30, 2021 under the 2017 Employee Plan. The balance of unamortized stock-based compensation of $71 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 2.00 years.

As of June 30, 2021, there were vested employee stock options granted under the 2017 Employee Plan covering a total of 164,750 shares of Common Stock, with a weighted average exercise price of $4.35, and weighted average contractual term of 2.74 years. The total fair value of vested employee stock options outstanding under the 2017 Employee Plan was $268 as of June 30, 2021.

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

	Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic 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		-		-
Forfeited or expired		-			-		-		-
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:

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

A summary of option activities under the 2017 Employee Plan during the year ended June 30, 2021, 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
Granted		71,000		5.03		4.61		14
Exercised		-		-		-		-
Forfeited or expired		-		-		-		-
Outstanding at June 30, 2021		267,000		4.21		3.22		290
Exercisable at June 30, 2021		164,750		4.35		2.74		173

A summary of the status of the Company’s non-vested employee stock options during the year ended June 30, 2021,

is presented below:

	Options			Weighted Average Grant-Date Fair Value
Non-vested at July 1, 2020		98,000		$	1.79
Granted		71,000			1.88
Vested		(66,750	)		1.83
Forfeited		-			-
Non-vested at June 30, 2021		102,250		$	2.29

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 37,500 options exercised during the year ended June 30, 2022. The Company did not recognize any stock-based compensation expense in the year ended June 30, 2022 under the 2007 Employee Plan.

There were 40,000 options exercised during the year ended June 30, 2021. The Company did not recognize any stock-based compensation expense in the year ended June 30, 2021 under the 2007 Employee Plan.

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

As of June 30, 2021, there were vested employee stock options exercisable covering a total of 37,500 shares of Common Stock under the 2007 Employee Plan, with a weighted average exercise price of $4.14, and a weighted average contractual term of 0.75 years. The total fair value of vested employee stock options under the 2007 Employee Plan as of June 30, 2021 was $61. As of June 30, 2021, there were no unvested employee stock options under 2007 Employee Plan.

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

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

A summary of option activities under the 2007 Employee Plan during the year ended June 30, 2021, 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		(40,000	)		3.26		-		-
Forfeited or expired		-			-		-		-
Outstanding at June 30, 2021		37,500		$	4.14		0.75	$	34
Exercisable at June 30, 2021		37,500		$	4.14		0.75	$	34

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, 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.

During the year ended June 30, 2021, the Company granted options to purchase 80,000 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. The fair value of the options granted to purchase 80,000 shares of the Company’s Common Stock was approximately $143, based on the fair value of $1.79 per share determined by the Black-Scholes option pricing model. As all stock options granted under the 2017 Directors Plan vest immediately at the date of grant, there were no unvested stock options granted under the 2017 Directors Plan as of June 30, 2021. There were no options exercised during the year ended June 30, 2021. The Company recognized stock-based compensation expense of $143 in the year ended June 30, 2021 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: 

	Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value
Outstanding at July 1, 2021		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

A summary of option activities under the 2017 Directors Plan during the twelve months ended June 30, 2021, 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
Granted		80,000		5.27		4.64		-
Exercised		-		-		-		-
Forfeited or expired		-		-		-		-
Outstanding at June 30, 2021		320,000		4.27		3.22		340
Exercisable at June 30, 2021		320,000		4.27		3.22		340

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 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.

There were 200,000 stock options exercised during the year ended June 30, 2021. The Company did not recognize any stock-based compensation expense during the year ended June 30, 2021.

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

As of June 30, 2021, there were vested stock options exercisable covering a total of 50,000 shares of Common Stock under 2007 Directors Plan, with a weighted average exercise price of $4.14 and weighted average remaining contractual term of 0.75 years. The total fair value of vested stock options under 2007 Directors Plan as of June 30, 2021 was $72. As of June 30, 2021, there were no unvested director stock options 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:

	Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic 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		-			-		-		-

A summary of option activities under the 2007 Directors Plan during the twelve months ended June 30, 2021, 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
Granted		-			-		-		-
Exercised		(200,000	)		3.12		-		-
Forfeited or expired		-			-		-		-
Outstanding at June 30, 2021		50,000			4.14		0.75		45
Exercisable at June 30, 2021		50,000			4.14		0.75		45