Note 11 - Shareholders' Equity

12 Months Ended

Jun. 30, 2026

Notes to Financial Statements

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

NOTE 11. 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 listed and traded on the NASDAQ Capital Market under the symbol “GROW.” The stock is quoted daily on NASDAQ. 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, 2026, or 2025.

The shareholders of class C common stock have voting rights, and the shareholders of class A and class B common stock have no voting rights. Shareholders of class C common stock are allowed to convert to class A common stock. During fiscal years 2026 and 2025, no 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.

 

Dividends

Dividends totaling $955,000 and $1.0 million were paid to holders of class A common stock in fiscal years 2026 and 2025, respectively. Dividends of $186,000 were paid to holders of class C common stock in each of fiscal years 2026 and 2025. The dividend rate per share for both classes was $0.0075 per month during fiscal years 2026 and 2025.

As of June 30, 2026, the Board has authorized a monthly dividend of $0.0075 per share through September 2026, 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.

Share Repurchase Plan

The Company has a share repurchase program, approved by the Company's Board of Directors, authorizing the Company to annually purchase up to $5.0 million of its outstanding common shares, as market and business conditions warrant, on the open market in compliance with Rule 10b-18 and Rule 10b5-1 of the Securities Exchange Act of 1934. The repurchase program has been in place since December 2012, and the Board has annually renewed the repurchase program each calendar year. The Company announced on February 25, 2022, that the Board approved an increase to the limit of its annual share repurchase program from $2.75 million to $5.0 million. The Company announced on September 19, 2024, that the Board approved an update authorizing the Company to repurchase up to $5.0 million of its outstanding common shares between September 13, 2024, and December 31, 2024. As a result, the total amount of shares that may be repurchased under the program was $6.5 million during calendar year 2024 and $5.0 million during each of calendar years 2025 and 2026. The acquired shares may be used for corporate purposes, including shares issued to employees in the Company’s share-based compensation programs. As of June 30, 2026, approximately $4.1 million remained available for repurchase under the calendar year 2026 authorization.

During fiscal years 2026 and 2025, the Company repurchased 733,848 and 801,043, respectively, of its class A shares on the open market, utilizing approximately $2.0 million of cash in each fiscal year. To date, the Company has repurchased a total of 3,523,768 class A shares under the repurchase program using cash of $9.5 million.

The Inflation Reduction Act of 2022 imposes a 1% excise tax on certain repurchases of stock by publicly traded corporations. The Company recognizes any excise tax incurred as part of the cost basis of the shares acquired in the Consolidated Statements of Shareholders' Equity. Excise taxes recognized under these provisions were $18,000 and $19,000 in fiscal years 2026 and 2025, respectively. Except where amounts are specifically presented as including excise taxes, amounts presented in this report related to the Company's share repurchases and share repurchase authorization exclude such excise taxes, to the extent applicable.

Other Activity

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 2026 and 2025, no shares were granted to employees or non-employee directors.

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

The following table summarizes stock option information under the 1989 Plan. No stock options were granted during the year ended  June 30, 2026.

	Year Ended June 30,
	2026		2025
Granted		-		125,100
Weighted Average Grant Date Fair Value per Common Share	$	-	$	1.06
Compensation Expense Recognized	$	9,000	$	124,000
Deferred Tax Recognized	$	2,000	$	26,000

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

Risk-free interest rate	4.1% to 4.2%
Expected volatility	57.1% to 58.2%
Expected life (in years)	5.25
Expected dividend yield	4.1% to 4.4%

The ranges represent the lowest and highest assumptions used for options granted during the period. 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 the 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, 2025. 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 the grant. 

Stock option transactions under the 1989 Plan for the past two fiscal years are summarized below.

				Weighted Average		Weighted Average Remaining		Aggregate Intrinsic
				Exercise		Contractual		Value
	Options			Price		Life in Years		(net of tax)
Outstanding at June 30, 2024		229,000		$	6.05
Granted		125,100		$	2.41
Exercised		-			n/a
Forfeited		(2,000	)		6.05
Outstanding at June 30, 2025		352,100		$	4.76
Granted		-			n/a
Exercised		-			n/a
Forfeited		(200	)		n/a
Outstanding at June 30, 2026		351,900		$	4.76		6.22	$	70,000
Outstanding and exercisable at June 30, 2026		351,900		$	4.76		6.22	$	70,000
Outstanding and non-vested at June 30, 2026		-			n/a

The following table summarizes stock option vesting activity under the 1989 Plan for fiscal 2026.

	Number of Stock Options		Weighted Average Grant Date Fair Value per Common Share		Fair Value		Unrecognized Compensation Expense		Weighted Average Remaining Recognition Period in Years
Non-vested at June 30, 2025		25,000	$	0.99	$	25,000
Granted		-	$	-	$	-
Vested		25,000	$	0.99	$	25,000
Forfeited		-	$	-	$	-
Non-vested at June 30, 2026		-	$	-	$	-	$	-		-

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. The estimated fair value of options granted is amortized as compensation expense over the options’ vesting period. The fair value of options granted 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:

			Weighted Average		Weighted Average Remaining		Aggregate Intrinsic
			Exercise		Contractual		Value
	Options		Price		Life in Years		(net of tax)
Outstanding at June 30, 2024		2,000	$	2.74
Granted		-		n/a
Exercised		-		n/a
Forfeited		-		n/a
Outstanding at June 30, 2025		2,000	$	2.74
Granted		-		n/a
Exercised		-		n/a
Forfeited		-		n/a
Outstanding at June 30, 2026		2,000	$	2.74		1.72	$	1,000
Outstanding and exercisable at June 30, 2026		2,000	$	2.74		1.72	$	1,000
Outstanding and non-vested at June 30, 2026		-		n/a