5. STOCKHOLDERS’ EQUITY

On December 8, 2021, our board of directors authorized the amended and restated Certificate of Incorporation which increased the total authorized shares of common stock from 50,000,000 to 60,000,000 shares. As of June 30, 2026 and 2025, the Company had 33,932,000 and 33,237,000 shares of common stock issued, respectively, and 26,171,000 and 27,083,000 shares of common stock outstanding, respectively.

​

Common Stock

We have reserved shares of common stock for issuance as of June 30, 2026 as follows:

​

Preferred Stock

We are authorized to issue 5,000,000 shares of preferred stock with a par value of $0.001 per share. As of June 30, 2026 and 2025, no shares of preferred stock are issued or outstanding. Our board of directors has the authority, without further action by our stockholders, to issue up to 5,000,000 shares of preferred stock in one or more series and to fix the rights, preferences, privileges and restrictions thereof. These rights, preferences and privileges could include dividend rights, conversion rights, voting rights, terms of redemption, liquidation preferences, sinking fund terms and the number of shares constituting any series or the designation of such series, any or all of which may be greater than the rights of the common stock.

Stock-Based Compensation

We account for stock-based compensation in accordance with ASC 718, Compensation—Stock Compensation. Under the fair value recognition provisions of ASC 718, stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense over the vesting period, net of expected forfeitures. Stock-based compensation expense consists of expenses for stock options and restricted stock units (RSUs) granted under our Amended and Restated 2005 Stock Incentive Plan (the 2005 Stock Incentive Plan), and stock purchase rights granted under our 2017 Employee Stock Purchase Plan.

​

2005 Management Stock Option Plan

​

In May 2005, our board of directors adopted the 2005 Management Stock Option Plan (2005 Management Plan), which was subsequently amended and restated, including in 2014 and 2021, with those amendments and restatements approved by our stockholders. The 2005 Management Plan provides for the grant of non-statutory stock options to common-law employees who are directors, officers and key employees of eGain and its subsidiaries. The expiration date of the 2005 Management Plan was September 30, 2024. Options under the 2005 Management Plan are granted at a price not less than 100% of the fair market value of the common stock on the date of grant. Options granted under the 2005 Management Plan are subject to eGain’s right of repurchase, which right shall lapse with respect to one-forty-eighth (1/48th) of the shares granted to a director, officer or key employee for each month of continuous service provided by such director, officer or key employee to eGain. The options granted under this plan are exercisable for up to ten years from the date of grant.

The following table represents the activity under the 2005 Management Plan:

​

​

​

​

​

2005 Stock Incentive Plan

​

In March 2005, our board of directors adopted the 2005 Stock Incentive Plan which provides for the grant of stock options and RSUs to eGain’s employees, officers, directors and consultants. Our stockholders first approved the 2005 Stock Incentive Plan in December 2005. Our board extended the expiration date of the 2005 Stock Incentive Plan to October 11, 2033 and made certain other changes, which were approved by our stockholders in December 2023. Options granted under the 2005 Stock Incentive Plan are non-qualified stock options. Non-qualified stock options may be granted to employees with exercise prices of no less than the fair value of the common stock on the date of grant. The options generally vest ratably over a period of four years and expire no later than ten years from the date of grant. RSUs granted under the 2005 Stock Incentive Plan contain service-based conditions and are valued at the grant date fair value; our closing stock price on the date of grant. The RSUs generally vest ratably over a period of one year.

The following table represents the activity under the 2005 Stock Incentive Plan:

​

​

During the fiscal year ended June 30, 2026, we did not grant any stock options to consultants.

​

​

​

A summary of RSU activity during the year ended June 30, 2026 is as follows:

​

​

We granted 956 and 2,659 RSUs to consultants during fiscal year ended June 30, 2026 and 2025, respectively.

​

​

The following table summarizes information about stock options outstanding and exercisable under all stock option plans as of June 30, 2026:

​

​

The summary of options vested and exercisable as of June 30, 2026 comprised:

​

​

The aggregate intrinsic value in the preceding table represents the total intrinsic value based on stock options with a weighted average exercise price less than our closing stock price of $6.30 as of June 30, 2026 that would have been received by the option holders, had they exercised their options on June 30, 2026. The total intrinsic value of stock options exercised was $1.6 million and $501,000 during fiscal years 2026 and 2025, respectively.

2017 Employee Stock Purchase Plan

In October 2017, our board of directors adopted the ESPP which provided eligible employees the option to purchase the Company’s common stock through payroll deductions at a price equal to 85% of the lower of the fair market value at the entry date of the applicable offering period or at the end of each applicable purchasing period. Our stockholders approved

the ESPP in November 2017. The offering period, meaning a period with respect to which the right to purchase shares of our common stock may be granted under the ESPP, will not exceed twenty-seven months and consist of a series of six-month purchase periods. Eligible employees may join the ESPP at the beginning of any six-month purchase period. Under the terms of the ESPP, employees can choose to have between 1% and 15% of their base earnings withheld to purchase the Company’s common stock. On December 17, 2021, our board of directors authorized an additional 600,000 shares of common stock to be available for issuance under ESPP. As of June 30, 2026, 445,865 shares of common stock were reserved for future issuance under the ESPP.

​

Valuation of Stock-based Awards

​

Determining the fair value of the stock options, RSUs, and ESPP awards at the grant date requires significant judgment and the use of estimates, particularly surrounding Black-Scholes valuation assumptions such as stock price volatility and expected option term.

​

The table below summarizes the effect of stock-based compensation (in thousands):

​

The Company recognized $193,000 and $62,000 of tax expense related to stock-based compensation expense for eGain UK and Exony for the fiscal years ended June 30, 2026 and 2025, respectively. There is income tax effect of $151,000 that has been recognized relating to the stock-based compensation expense in the US in the fiscal year ended June 30, 2026.

​

Total stock-based compensation related to non-employee awards were an expense of $12,000 and $37,000 during the fiscal years ended June 30, 2026 and 2025, respectively. A net reversal of stock-based compensation reflects the forfeiture of unvested stock awards due to termination of service.

We utilized the Black-Scholes valuation model for estimating the fair value of the stock-based compensation of options and ESPP stock purchase rights. All shares of our common stock issued pursuant to our stock plans are only issued out of an authorized reserve of shares of common stock, which were previously registered with the Securities and Exchange Commission on a registration statement on Form S-8.

During the fiscal years ended June 30, 2026 and 2025, there were 623,916 and 654,467 options granted, respectively, with a weighted-average grant date fair value of $4.65 and $2.65, per share, respectively.

We used the following assumptions as inputs into the Black-Scholes valuation model to estimate the fair value of the options granted:

​

​

We used the following assumptions as inputs into the Black-Scholes valuation model to estimate the fair value of the ESPP stock purchase right:

​

​

During the fiscal years ended June 30, 2026 and 2025, employees were granted the right and purchased an aggregate of 143,830 and 178,602 shares, respectively, with a weighted average grant date fair value of $2.76 and $1.74, per share, respectively, pursuant to the ESPP. Total stock-based compensation expense related to those purchase rights was $307,000 and $303,000 for the fiscal years ended June 30, 2026 and 2025, respectively.

​

The dividend yield of zero is based on the fact that we have never paid cash dividends and have no present intention to pay cash dividends. We determined the appropriate measure of expected volatility by reviewing historic volatility in the share price of our common stock, as adjusted for certain events that management deemed to be non-recurring and non-indicative of future events. The risk-free interest rate is derived from the average U.S. Treasury Strips rate.

We base our estimate of expected life of a stock option on the historical exercise behavior, and cancellations of all past option grants made by the Company during the time period which its common stock has been publicly traded, the contractual term of the option, the vesting period and the expected remaining term of the outstanding options.

In accordance with Accounting Standards Updates (ASU) 2016-09, Compensation—Stock Compensation: Improvements to Employee Share-Based Accounting, we elected to continue to estimate forfeitures in the calculation of stock-based compensation expense.

The following table summarizes stock-based compensation expense relating to stock options for the years ended June 30, 2026 and 2025, respectively (in thousands):

​

Total unamortized compensation cost, net of forfeitures, for all options granted but not yet vested as of June 30, 2026 was $1.7 million which is expected to be recognized over the weighted average period of 1.55 years.

​

The following table summarizes stock-based compensation expense relating to RSUs for the years ended June 30, 2026 and 2025, respectively (in thousands):

​

​

​

Total unamortized compensation cost, net of forfeitures, for all RSUs granted but not yet vested as of June 30, 2026 was $531,000, which is expected to be recognized over the weighted average period of 0.38 years.

​

The following table summarizes stock-based compensation expense relating to the ESPP for the years ended June 30, 2026

and 2025, respectively (in thousands):

​

​

​

Total unamortized compensation cost, net of forfeitures, for all purchase rights related to ESPP granted but not yet vested as of June 30, 2026 was $135,000, which is expected to be recognized over a weighted average period of  0.42 years.

​

Warrants

​

We account for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in FASB ASC Topic 480, Distinguishing Liabilities from Equity, and ASC Topic 815, Derivatives and Hedging. The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC Topic 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC Topic 815, including whether the warrants are indexed to our own common stock and whether the warrant holders require mandatory cash settlement, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance.

​

For warrants that meet all of the criteria for equity classification, the warrants are recorded as a component of additional paid-in capital at the time of issuance. The grant date fair value of the warrants was estimated using a Black-Scholes valuation model. See Note 11 for discussion of warrants outstanding as of June 30, 2026.