STOCKHOLDERS' EQUITY

12 Months Ended

Jun. 30, 2021

Disclosure Text Block Supplement [Abstract]

Shareholders' Equity and Share-based Payments [Text Block]

NOTE 12. SHAREHOLDERS’ EQUITY

The Company has three classes of common equity: class A, class B, and class C common stock. The Company’s class A common stock is traded over-the-counter and is quoted daily under NASDAQ’s Capital Markets under the symbol “GROW.” There is no established public trading market for the Company’s class B and class C common stock. There are no shares of class B stock issued as of June 30, 2021, or 2020.

The Company’s class A and class B common stock have no voting privileges.

Dividends

Dividends totaling $552,000 and $390,000 were paid to holders of class A common stock in fiscal years 2021 and 2020, respectively. Dividends of $88,000 and $62,000 were paid to holders of class C common stock in fiscal years 2021 and 2020, respectively. The dividend rate for both classes was $0.0025 per month during fiscal year 2020 and through January 2021 and $0.0050 from February 2021 through June 2021.

As of June 30, 2021, the Board has authorized a monthly dividend of $0.0050 per share through September 2021, at which time it will be considered for continuation by the Board. Payment of cash dividends is within the discretion of the Company’s Board of Directors and is dependent on earnings, operations, capital requirements, general financial condition of the Company and general business conditions. On a per share basis, the holders of the class C common stock and the nonvoting class A common stock participate equally in dividends as declared by the Company’s Board of Directors. See Note 19 for subsequent change in monthly dividend.

Share Repurchase Plan

The Company has a share repurchase program, approved by the Board of Directors, authorizing the Company to annually purchase up to $2.75 million of its outstanding common shares, as market and business conditions warrant, on the open market in compliance with Rule 10b-18 of the Securities Exchange Act of 1934 through December 31, 2021. The repurchase program has been in place since December 2012, and the Board of Directors has annually renewed the repurchase program each calendar year. The acquired shares may be used for corporate purposes, including shares issued to employees in the Company’s stock-based compensation programs. As of June 30, 2021, approximately $2.5 million remains available for repurchase under this authorization.

During fiscal years 2021 and 2020, the Company repurchased 53,151 and 105,721, respectively, of its class A shares on the open market using cash of $314,000 and $113,000, respectively. To date, the Company has repurchased a total of 719,682 class A shares under the repurchase program using cash of $1.8 million.

Other Activity

During fiscal year 2021, the Company granted 4,000 shares of class A common stock to certain employees at a weighted average fair value of $2.50. No shares were granted in fiscal year 2020.

The Company granted 3,300 and 3,600 of class A common stock at a weighted average fair value of $2.68 and $1.61 per share to its non-employee directors in fiscal years 2021 and 2020, respectively.

The Company granted 50,000 shares of class A common stock at a weighted average fair value of $1.95 per share to a key advisor in fiscal year 2020. No shares were granted to outside parties in fiscal year 2021.

All stock grants vest immediately after issuance.

Issuances of treasury stock for grants, bonuses, and the share repurchase plan are accounted for using the weighted-average cost basis of the shares issued. During fiscal years 2021 and 2020, shares were issued, as described above, with a weighted-average cost basis greater than current fair value, which resulted in a combined positive (negative) adjustment to additional paid-in capital of approximately $11,000 and ($17,000), respectively.

Shareholders of class C shares are allowed to convert to class A. During fiscal year 2021, no shares were converted from class C to class A. During fiscal year 2020, 162 shares were converted from class C to class A. Conversions are one class A share for one class C share and are recorded at par value. There are no restrictions or requirements to convert.

Stock Option Plans

In November 1989, the Board of Directors adopted the 1989 Non-Qualified Stock Option Plan (“1989 Plan”), amended in December 1991, which provides for the granting of options to purchase 1,600,000 shares of the Company’s class A common stock to directors, officers and employees of the Company and its subsidiaries. Options issued under the 1989 Plan vest six months from the grant date or 20 percent on the first, second, third, fourth, and fifth anniversaries of the grant date. Options issued under the 1989 Plan expire ten years after issuance. There were 231,000 options granted during the year ended June 30, 2021, with a weighted-average grant date fair value price of $3.36 and a vesting period of six months. The fair value is estimated at the date of the grant using a Black-Scholes option pricing model.

The assumptions utilized to estimate the fair value of options granted under the 1989 Plan are presented in the following table:

Risk-free interest rate	0.9	%
Expected volatility	70.0	%
Expected life (in years)	5.25
Expected dividend yield	1.0	%

The risk-free interest rate is based on a treasury instrument whose term is consistent with the expected life of the stock options. Expected volatility is based on historical volatility of the Company’s common stock. The Company did not have historical post-vesting activity under the 1989 Plan and utilized the simplified method to calculate expected term for stock options granted during the year ended June 30, 2021. The simplified method calculates the expected term as mid-point between the weighted-average time to vest and the contractual maturity. The expected dividend yield is based on the date of grant.

The estimated fair value of options granted is amortized to expense over the options’ vesting period. During the year ended June 30, 2021, $43,000 was recognized as compensation expense and $9,000 was recognized as a deferred tax asset. As of June 30, 2021, $733,000 of total unrecognized compensation costs related to nonvested stock options under the Plan were expected to be recognized over a weighted average period of 0.47 years. There were no options forfeited or exercised during the year ended June 30, 2021. There were 231,000 options outstanding under the 1989 Plan as of June 30, 2021, with a weighted-average grant date fair value price of $3.36.

Stock option transactions under the 1989 Plan for the past fiscal year are summarized below. There were no options forfeited, granted, or exercised during the fiscal year ended June 30, 2020, and no options outstanding as of June 30, 2020.

thousands, except price data)	Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life in Years		Aggregate Intrinsic Value (net of tax)
Outstanding June 30, 2020		-		n/a
Granted		231,000	$	6.05
Exercised		-		n/a
Forfeited		-		n/a
Outstanding June 30, 2021		231,000	$	6.05		9.98	$	26

In April 1997, the Board of Directors adopted the 1997 Non-Qualified Stock Option Plan (“1997 Plan”), which provides for the granting of stock appreciation rights (SARs) and/or options to purchase 400,000 shares of the Company’s class A common stock to directors, officers, and employees of the Company and its subsidiaries. Options issued under the 1997 Plan expire ten years after issuance. There were no options granted during the year ended June 30, 2021. There were no options that were forfeited or exercised during the year ended June 30, 2021. There were 2,000 options that were forfeited, and no options granted or exercised during the year ended June 30, 2020. There were 2,000 options outstanding under the 1997 Plan as of June 30, 2021, and 2020.

The estimated fair value of options granted is amortized to expense over the options’ vesting period. The fair value of these options is estimated at the date of the grant using a Black-Scholes option pricing model.

Stock option transactions under the 1997 Plan for the past two fiscal years are summarized below:

(dollars in thousands, except price data)	Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life in Years		Aggregate Intrinsic Value (net of tax)
Outstanding June 30, 2019		4,000		$	7.53
Granted		-			n/a
Exercised		-			n/a
Forfeited		(2,000	)	$	12.31
Outstanding June 30, 2020		2,000		$	2.74
Granted		-			n/a
Exercised		-			n/a
Forfeited		-			n/a
Outstanding June 30, 2021		2,000		$	2.74		6.72	$	5

Class A common stock options outstanding and exercisable under the employee stock option plans at June 30, 2021, were as follows:

	Options Outstanding							Options Exercisable
	Date of Option Grant	Number Outstanding		Remaining Life in Years		Weighted Average Exercise Price ($)		Number Exercisable		Weighted Average Option Price ($)
1989 Plan Class A	06/21/21		231,000		9.98	$	6.05		-	$	-
1997 Plan Class A	03/21/18		2,000		6.72	$	2.74		2,000	$	2.74
			233,000		9.95	$	6.02		2,000	$	2.74