Note 19 - Stock Options

3 Months Ended

Sep. 30, 2022

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

19.  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 of time 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 3.15% (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%).

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. The Company’s Board of Directors approved an amendment to the 2017 Employee Plan in December, 2021 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 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 quarter of Fiscal 2023, 25,000 stock options were granted under the 2017 Employee Plan. There were 5,000 stock options exercised during the three-month period ended September 30, 2022. The Company recognized $32 in stock-based compensation expense during the three months ended September 30, 2022.

During the first quarter of Fiscal 2022, the Company did not grant any options pursuant to the 2017 Employee Plan. There were no stock options exercised during the three-month period ended September 30, 2021. The Company recognized $12 in stock-based compensation expense during the three months ended September 30, 2021.

As of September 30, 2022, there were vested stock options granted under the 2017 Employee Plan covering a total of 131,750 shares of Common Stock. The weighted-average exercise price was $4.80 and the weighted average remaining contractual term was 1.95 years.

As of September 30, 2021, there were vested stock options granted under the 2017 Employee Plan covering a total of 164,750 shares of Common Stock. The weighted average exercise price was $4.35 and the weighted average remaining contractual term was 2.49 years.

A summary of option activities under the 2017 Employee Plan during the three months period ended September 30, 2022, is presented as follows:

				Weighted		Weighted Average Remaining		Aggregate
				Average		Contractual		Intrinsic
	Options			Exercise Price		Term (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 September 30, 2022		216,375		$	5.16	$	2.74	$	106,419
Exercisable at September 30, 2022		131,750		$	4.80	$	1.95	$	80,314

A summary of the status of the Company’s non-vested employee stock options during the three months ended September 30, 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	(16,250	)		-
Non-vested at September 30, 2022	84,625		$	5.72

A summary of option activities under the 2017 Employee Plan during the three months period ended September 30, 2021, is presented as follows:

			Weighted		Weighted Average Remaining		Aggregate
			Average		Contractual		Intrinsic
	Options		Exercise Price		Term (Years)		Value
Outstanding at July 1, 2021		267,000	$	4.21		3.22	$	290
Granted		-		-		-		-
Exercised		-		-		-		-
Forfeited or expired		-		-		-		-
Outstanding at September 30, 2021		267,000	$	4.21	$	2.97	$	170
Exercisable at September 30, 2021		164,750	$	4.35	$	2.49	$	100

A summary of the status of the Company’s non-vested employee stock options during the three months period ended September 30, 2021, is presented below:

		Weighted Average
	Options	Grant-Date Fair Value
Non-vested at July 1, 2021	102,250	$	2.29
Granted	-		-
Vested	-		-
Forfeited	-		-
Non-vested at September 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 no options exercised during the three months ended September 30, 2022, and September 30, 2021. The Company did not recognize any stock-based compensation expense during the three months ended September 30, 2022, and September 30, 2021.

As of July 1, 2022 and September 30, 2022, there were no vested or unvested stock options outstanding under the 2007 Employee Plan.

As of September 30, 2021, there were vested stock options granted under the 2007 Employee Plan covering a total of 37,500 shares of Common Stock. The weighted average exercise price was $4.14 and the weighted average remaining contractual term was 0.49 years.

A summary of option activities under the 2007 Employee Plan during the three months ended September 30 2021, is presented as follows:

			Weighted		Weighted Average Remaining		Aggregate
			Average		Contractual		Intrinsic
	Options		Exercise Price		Term (Years)		Value
Outstanding at July 1, 2021		37,500	$	4.14		0.75	$	34
Granted		-		-		-		-
Exercised		-		-		-		-
Forfeited or expired		-		-		-		-
Outstanding at September 30, 2021		37,500	$	4.14	$	0.49	$	3
Exercisable at September 30, 2021		37,500	$	4.14	$	0.49	$	3

There were no non-vested employee stock options during the three months ended September 30, 2021.

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 nonqualified options and restricted stock. The exercise price of the nonqualified 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 quarter of Fiscal 2023 and Fiscal 2022, 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 three months ended September 30, 2022 and 2021.

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 September 30, 2022, or September 30, 2021.

As of September 30, 2022, 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 $5.10 and the weighted average remaining contractual term was 2.57 years.

As of September 30, 2021, there were vested stock options granted under the 2017 Directors Plan covering a total of 320,000 shares of Common Stock. The weighted average exercise price was $4.27 and the weighted average remaining contractual term was 2.97 years.

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

			Weighted		Weighted Average Remaining		Aggregate
			Average		Contractual		Intrinsic
	Options		Exercise Price		Term (Years)		Value
Outstanding at July 1, 2022		420,000	$	5.10		2.85	$	228
Granted		-		-				-
Exercised		-		-		-		-
Forfeited or expired		-		-		-		-
Outstanding at September 30, 2022		420,000	$	5.10	$	2.57	$	278
Exercisable at September 30, 2022		420,000	$	5.10	$	2.57	$	278

A summary of option activities under the 2017 Directors Plan during the three months ended September 30, 2021, is presented as follows: 

			Weighted		Weighted Average Remaining		Aggregate
			Average		Contractual		Intrinsic
	Options		Exercise Price		Term (Years)		Value
Outstanding at July 1, 2021		320,000	$	4.27		3.22	$	340
Granted		-		-		-		-
Exercised		-		-		-		-
Forfeited or expired		-		-		-		-
Outstanding at September 30, 2022		320,000	$	4.27	$	2.97	$	210
Exercisable at September 30, 2022		320,000	$	4.27	$	2.97	$	210

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 three months ended September 30, 2022 and 2021. The Company did not recognize any stock-based compensation expense during the three months ended September 30, 2022 and 2021.

As of July 1, 2022 and September 30, 2022, there were no vested stock options outstanding under the 2007 Directors Plan.

As of September 30, 2022, there were no vested stock options granted under the 2007 Directors Plan.

As of September 30, 2021, there were vested stock options granted under the 2007 Directors Plan covering a total of 50,000 shares of Common Stock. The weighted average exercise price was $4.14 and the weighted average remaining contractual term was 0.49 years.

A summary of option activities under the 2007 Directors Plan during the three months ended September 30, 2021 is presented as follows: 

			Weighted		Weighted Average Remaining		Aggregate
			Average		Contractual		Intrinsic
	Options		Exercise Price		Term (Years)		Value
Outstanding at July 1, 2021		50,000	$	4.14		0.75	$	45
Granted		-		-		-		-
Exercised		-		-		-		-
Forfeited or expired		-		-		-		-
Outstanding at September 30, 2021		50,000	$	4.14	$	0.49	$	4
Exercisable at September 30, 2021		50,000	$	4.14	$	0.49	$	4