SHARE BASED COMPENSATION

6 Months Ended

Sep. 30, 2011

SHARE BASED COMPENSATION

SHARE BASED COMPENSATION

NOTE 12 - SHARE BASED COMPENSATION

In 2006, the directors adopted, and the stockholders approved, the 2006 long-term incentive plan (“Plan”) covering 1,000,000 shares of common stock.  On July 27, 2011, our Board of Directors amended the Plan, subject to our shareholder’s approval, to increase the maximum number of shares of common stock that may be issued to an aggregate of 3,300,000 shares.  We received stockholder approval of such amendment on September 15, 2011. The Plan provides for the grant of incentive and non-qualified options, stock grants, stock appreciation rights and other equity-based incentives to employees, including officers, and consultants.  The Plan is to be administered by a committee of not less than two directors each of whom is to be an independent director.  In the absence of a committee, the Plan is administered by the Board of Directors.  Independent directors are not eligible for discretionary options.

On April 19, 2011, the Company granted stock options to its CEO and CFO to purchase 250,000 and 100,000 shares of common stock, respectively, at an exercise price of $1.96 per share, the fair market value on the date of grant.  The options will vest in equal amounts over three years on the anniversary of the grant date. Also, on April 19, 2011, the Company granted stock options to certain employees to purchase 227,000 shares of common stock at an exercise price of $1.96 per share, the fair market value on the date of grant.  The options will vest in equal amounts over three years on the anniversary of the grant date.

On July 1, 2011, the Company granted stock options to two directors to purchase 10,000 shares of common stock at an exercise price of $1.62 per share, pursuant to the plan provision following the third anniversary date of each director’s first election to the board. Fifty percent of the shares will vest in six months and 50% in eighteen months from the grant date, respectively.

On July 21 and August 17, 2011, the Company granted stock options to certain employees to purchase 50,000 shares of common stock at an exercise price of $1.65 per share, the fair market value on the date of grant.  The options will vest in equal amounts over three years on the anniversary of the grant date.

Fair value is estimated using a Black-Scholes option-pricing model based on the closing stock prices at the grant date and the weighted average assumptions specific to the underlying options.  Expected volatility assumptions are based on the historical volatility of our common stock.  The risk-free interest rate was selected based upon yields of five year U.S. Treasury issues.  The expected life of the option was estimated at one half of the contractual term of the option and the vesting period.  The assumptions utilized for option grants during the period ranged from 67% to79% for volatility and 0.92% to 2.09% for the risk free interest rate. At September 30, 2011 there were 403,840 shares of common stock available for grant under the Plan.  The fair value of stock options granted during the period was estimated at $1.936 per option. The following table summarizes activity for the six months ended September 30, 2011:

	Number Of		Weighted Average		Aggregate Intrinsic		Weighted Average Remaining Contractual Life
	Options		Exercise Price		Value		(in years)
Outstanding at 3/31/2011	2,056,661		$	0.738
Granted	647,000		$	1.926
Exercised	(52,999	)	$	0.285
Outstanding at 9/30/2011	2,650,662		$	1.027	$	1,884,033	5.64
Expected to vest at 9/30/2011	1,693,667		$	1.238	$	879,534	5.73
Exercisable at 9/30/2011	956,995		$	0.654	$	973,701	3.40

As of September 30, 2011, there was $706,731 of total unrecognized compensation cost related to unvested stock options.  These costs are expected to be recognized over the next three years.  The total fair value of shares vested during the period was $396,765. The following table shows the status of the Company’s non-vested stock options outstanding for the period ended September 30, 2011:

	Number of		Weighted Average
	Options		Exercise Price
Outstanding at 3/31/2011	1,440,000		$	0.783
Granted	647,000		$	1.926
Vested	(393,333	)	$	0.703
Outstanding at 9/30/2011	1,693,667		$	1.238