Note 14 - Share-Based Compensation Plans

Stock Options

The Company utilizes ASC 718, Stock Compensation, related to accounting for share-based payments and, accordingly, records compensation expense for share-based awards based upon an assessment of the grant date fair value for stock options and restricted stock awards. The Black Scholes option pricing model was used to estimate the fair value of the options granted. This option pricing model requires a number of assumptions, of which the most significant are: expected stock price volatility, the expected pre-vesting forfeiture rate, and the expected option term (the amount of time from the grant date until the options are exercised or expire). The Company estimated a volatility factor utilizing a weighted average of comparable published volatilities of its peers. The Company applied the simplified method to determine the expected term of stock-based compensation grants.

In prior years, the Company had granted time vested options to purchase shares of common stock with exercise prices ranging from $0.52 - $1.80 on the date of grant by the Board. These options vest ratably over a period of three years and expire ten years from the date of grant and the fair value of these options was calculated using the Black-Scholes Merton model.

On April 1, 2024, the Company granted stock options to purchase an aggregate of 1,425,171 shares of its common stock at an exercise price of $3.74 per share to employees, directors, consultants and non-employee service providers pursuant to its 2021 Equity Incentive Plan.

On September 27, 2024, the Company granted stock options to purchase an aggregate of 250,000 shares of its common stock at an exercise price of $4.00 per share to employees, directors, consultants and non-employee service providers pursuant to its 2021 Equity Incentive Plan. These options vest ratably over a period of three years and expire ten years from the date of grant and the fair value of these options was calculated using the Black-Scholes-Merton model.

On April 2, 2025, the Company granted stock options to purchase an aggregate of 479,648 shares of its common stock at an exercise price of $7.25 per share to employees and directors pursuant to its 2021 Equity Incentive Plan. These options vest ratably over a period of three years and expire ten years from the date of grant and the fair value of these options was calculated using the Black-Scholes-Merton model.

On October 16, 2025, the Company granted stock options to purchase an aggregate of 58,708 shares of its common stock at an exercise price of $9.51 per share to employees and directors pursuant to its 2021 Equity Incentive Plan. These options vest ratably over a period of three years and expire ten years from the date of grant and the fair value of these options was calculated using the Black-Scholes-Merton model.

On May 31, 2026, in connection with a four-year consulting agreement, the Company granted a non-employee consultant a nonqualified option to purchase 100,000 shares of common stock under the Company’s Amended and Restated 2021 Equity Incentive Plan at an exercise price of $11.11 per share. The option expires on the tenth anniversary of the date of grant and vests in 48 equal monthly installments, subject to acceleration in full upon a change in control of the Company, a termination of the consultant by the Company without cause, or the Company’s current Chief Executive Officer ceasing to serve in that capacity.

Options exercised during the three months ended September 30, 2026 exclude 1,505 options exercised on June 30, 2026, which are included in the option activity for the fiscal year ended June 30, 2026; the related 1,505 shares of common stock were issued on July 1, 2026 (see Note 12). A summary of the activity related to stock option units granted is as follows:

Summary of Stock Option Units Granted  

A summary of the activity related to vested and unvested stock option units granted is as follows:

Summary of Vested and Unvested Stock Options Units Granted  

The Company valued options issued in April 2024 using the Black Scholes model utilizing volatility 45%, and a risk-free rate of 4.18%. The fair value of the options was $1.84 per option.

The Company valued options issued in September 2024 using the Black Scholes model utilizing volatility 45%, and a risk-free rate of 3.75%. The fair value of the options was $1.94 per option.

The Company valued options issued in April 2025 using the Black Scholes model utilizing volatility 55%, and a risk-free rate of 4.01%. The fair value of the options was $4.05 per option.

The Company valued options issued in October 2025 using the Black Scholes model utilizing volatility 58%, and a risk-free rate of 3.65%. The fair value of the options was $5.46 per option.

The Company valued options issued in May 2026 using the Black Scholes model utilizing volatility 60%, and a risk-free rate of 4.20%. The fair value of the options was $6.61 per option.

The Company recorded share-based compensation expense of $337,270 and $269,246 during the three months ended September 30, 2026 and 2025, respectively, which is included in educational services in the consolidated income statements. Unamortized compensation expense associated with unvested options was $2,084,500 as of September 30, 2026. The weighted average period over which these costs are expected to be recognized is approximately 1.10 years.