Equity Awards

6 Months Ended

Jul. 31, 2011

Equity Awards [Abstract]

EQUITY AWARDS

NOTE C — EQUITY AWARDS

During the six months ended July 31, 2011, the Company granted 858,000 options with a weighted average exercise price of $1.94 per share. During the same period 115,916 options expired with an average exercise price of $1.84 per share and 32,598 options were exercised under all plans.

The fair value of each option grant during the six months ended July 31, 2011 was estimated at the date of the grants using a Black-Scholes option pricing model with the following weighted average assumptions:

	For the three			For the six
	months ended,			months ended,
	April 30, 2011			July 31, 2011
Risk-free interest rate		2.50	%		2.17	%
Dividend yield		—			—
Current weighted-average volatility factor of the expected market price of Common Stock		0.53			0.65
Weighted-average expected life of stock options	5 years			5 years
Forfeiture rate		0	%		0	%

During the six months ended July 31, 2011, the Company granted 110,412 restricted stock shares with a weighted average fair value of $1.68 per share. These shares are subject to the 2005 Incentive Compensation Plan as amended, and are granted to certain independent members of the Board of Directors. The shares have an approximate one-year restriction period. During the same period 223,090 restricted shares had their restriction period lapse; these shares had a weighted average fair value of $1.92 per share.

During the six months ended July 31, 2011, the Company granted 25,000 restricted stock shares as executive inducement grants with a weighted average fair value of $1.91 per share. The restrictions lapsed immediately upon the grant of the shares, and the Company recognized $48,000 of compensation expense for the six months ended July 31, 2011 relating to these inducement grants. These executive inducement grants were approved by the board pursuant to Nasdaq Marketplace Rule 5635(c)(4). The terms of the grants are nearly as practicable identical to the terms and conditions of the Company’s 2005 Incentive Compensation Plan.