Note 3 - Basic and Diluted Net Income Per Share

9 Months Ended

Mar. 31, 2022

Notes to Financial Statements

Earnings Per Share [Text Block]

NOTE 3. BASIC AND DILUTED NET INCOME (LOSS) PER SHARE

Basic net income (loss) per share is based upon the weighted average number of common shares outstanding. This calculation also includes the weighted average number of Series B Convertible Preferred shares outstanding as they are deemed to be substantially similar to the common shares and shareholders are entitled to the same liquidation and dividend rights. Diluted net income (loss) per share is based on the assumption that all dilutive convertible shares and stock options were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period. The Underwriter’s Warrants, as defined in Note 12, may be exercised at $2.40 per share beginning on September 14, 2022, which is the date that is 180 days after the commencement of sales of the common stock issued in connection with public offering, and expire on March 14, 2027, which is five years from their initial issuance date. The Company does not have any other outstanding options or exercisable warrants or other dilutive financial instruments as of March 31, 2022 and 2021. As of March 31, 2022, the exercise price of the warrants exceeded the closing price of the Company's stock, and not dilutive, as such, basic and diluted earnings per share are the same. 

On August 25, 2021 the Company adopted the 2021 Omnibus Equity Incentive Plan (the "Plan") and had not issued any awards under the Plan as of March 31, 2022. The Company has also authorized a reverse stock split of its Common Stock by a ratio of not less than 1-for-1.5 and not more than 1-for-2.75 (the “Reverse Stock Split”) at any time prior to the one year anniversary of filing of a definitive Information Statement on Schedule 14C with the Board of Directors (the "Board") having the discretion as to whether or not the Reverse Stock Split is to be effected, and with the exact ratio of any Reverse Stock Split to be set within the above range as determined by the Board in its discretion.

Basic and diluted net income per share reflects the effects of shares actually potentially issuable upon conversion of convertible preferred stock.

The components of basic and diluted earnings per share were as follows: 

	For the Three Months Ended March 31, 2022
	Net Income		Shares		Per Share
Basic income per share:
Net income available to common shareholders	$	848,013		37,844,376	$	0.02
Net income available to preferred shareholders		22,121		987,200	$	0.02
Basic and diluted income per share	$	870,134		38,831,576	$	0.02

	For the Three Months Ended March 31, 2021
	Net Income		Shares		Per Share
Basic income per share:
Net income available to common shareholders	$	1,541,724		37,474,535	$	0.04
Net income available to preferred shareholders		41,084		998,624	$	0.04
Basic and diluted income per share	$	1,582,808		38,473,159	$	0.04

	For the Nine Months Ended March 31, 2022
	Net Income		Shares		Per Share
Basic income per share:
Net income available to common shareholders	$	12,157		37,574,336	$	0.00
Net income available to preferred shareholders		319		987,200	$	0.00
Basic and diluted income per share	$	12,476		38,561,536	$	0.00

	For the Nine Months Ended March 31, 2021
	Net Income		Shares		Per Share
Basic income per share:
Net income available to common shareholders	$	5,014,672		37,432,889	$	0.13
Net income available to preferred shareholders		139,359		1,040,270	$	0.13
Basic and diluted income per share	$	5,154,031		38,473,159	$	0.13