STOCKBASED COMPENSATION

6 Months Ended

Dec. 31, 2023

STOCKBASED COMPENSATION

Stock-Based Compensation

Note 8 - STOCK-BASED COMPENSATION

The Company adopted a Stock Incentive Plan on April 18, 2021. This plan is intended to provide incentives which will attract and retain highly competent persons at all levels as employees of the Company, as well as independent contractors providing consulting or advisory services to the Company, by providing them opportunities to acquire the Company’s common stock or to receive monetary payments based on the value of such shares pursuant to Awards issued. While the 2021 Plan terminates 10 years after the adoption date, issued options have their own schedule of termination. Options to acquire shares of common stock may be granted at no less than fair market value on the date of grant. Upon exercise, shares of new common stock are issued by the Company.

Under the 2021 Stock Incentive Plan, the Company has issued options to purchase 11,852 shares at an average price of $20.25 with a fair value of $0.00. For the six months ended December 31, 2023 and 2022, the Company did not issue any options to purchase shares, respectively. Upon exercise, shares of new common stock are issued by the Company.

For the six months ended December 31, 2023 and 2022, the Company did not recognize any, respectively, of non-cash compensation expense (which would be included in General and Administrative expense in the accompanying Consolidated Statement of Operations) determined by application of a binomial option pricing model with the following inputs: exercise price, dividend yields, risk-free interest rate, and expected annual volatility. As of December 31, 2023, the Company had no unrecognized pre-tax non-cash compensation expense. The Company used straight-line amortization of compensation expense over the one-year requisite service or vesting period of the grant. The Company recognizes forfeitures as they occur. There are options to purchase approximately 2,222 shares that have vested as of December 31, 2023.

The Company uses a binomial option pricing model to estimate the fair value of its stock option awards and warrant issuances. The calculation of the fair value of the awards using the binomial option-pricing model is affected by the Company’s stock price on the date of grant as well as assumptions regarding the following:

	Six months ended December 31,			Year ended June 30,
	2023			2023
Expected volatility		-	%	-		%
Expected term		-			-
Risk-free interest rate		-	%	-		%
Forfeiture Rate		-	%	-		%
Expected dividend yield		-	%	-		%

The expected volatility was determined with reference to the historical volatility of the Company’s stock. The Company uses historical data to estimate option exercise and employee termination within the valuation model. The expected term of options granted represents the period of time that options granted are expected to be outstanding. The risk-free interest rate for periods within the contractual life of the option is based on the U.S. Treasury rate in effect at the time of grant.

A summary of the status of the Company’s outstanding stock options as of December 31, 2023 and June 30, 2023 and changes during the periods ending on that date is as follows:

			Weighted Average		Grant Date		Aggregate		Weighted Average
			Exercise		Fair		Intrinsic		Remaining
	Shares		Price		Value		Value		Term (Yrs)
Options
At June 30, 2023		2,222	$	27.00	$	-	$	0		2.33
Granted		-		-		-		-		-
Exercised		-		-		-		-		-
Forfeiture and cancelled		-		-				-		-
At December 31, 2023		2,222	$	27.00	$	-	$	0		2.33

The following table summarizes information about employee stock options outstanding at December 31, 2023:

		Outstanding Options						Vested Options
		Number						Number
		Outstanding		Weighted		Weighted		Exercisable		Weighted		Weighted
		at		Averaged		Averaged		at		Averaged		Averaged
		December 31,		Remaining		Exercise		December 31,		Exercise		Remaining
Range of Exercise Price		2023		Life		Price		2023		Price		Life
$	27.00		2,222		2.33	$	27.00		2,222	$	27.00		2.33
Outstanding options			2,222		2.33	$	27.00		2,222	$	27.00		2.33

As of December 31, 2023, the Company had approximately $0 of unrecognized pre-tax non-cash compensation expense.

Restricted Stock Awards

Restricted stock awards are awards of common stock that are subject to restrictions on transfer and to a risk of forfeiture if the holder leaves the Company before the restrictions lapse or the vesting conditions of the award are not met. The holder of a vested restricted stock award is generally entitled at all times on and after the date of issuance of the restricted shares to exercise the rights of a shareholder of the Company, including the right to vote the shares. The value of stock awards that vest over time was established by the market price on the date of its grant. A summary of the Company’s restricted stock activity for the six months ended December 31, 2023 is presented in the following table:

				Weighted
				Average
				Grant Date
	Shares			Fair Value
Unvested at June 30, 2023		7,297,475		$	0.06
Granted		35,425,000		$	0.0169
Forfeited		-		$	-
Vested		(42,409,999	)	$	0.022
Unvested at December 31, 2023		312,476		$	0.289

Unrecognized compensation expense related to outstanding restricted stock awards to employees and directors as of December 31, 2023 was $90,208 and is expected to be recognized over a weighted average period of 0.5 years. The recognition of expense related to vested shares is accounted for as stock-based consulting expense and stock-based compensation expense for a total of $916,132 for the six months ended December 31, 2023.