SHARE BASED COMPENSATION

9 Months Ended

Dec. 31, 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 September 15, 2011, shareholders approved an amendment to increase the maximum number of shares of common stock that may be issued to an aggregate of 3,300,000 shares.

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 each 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 nine 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% to 79% for volatility and 0.92% to 2.09% for the risk free interest rate. At December 31, 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 nine months ended December 31, 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 12/31/2011	2,650,662		$	1.027	$	426,127	4.39
Expected to vest at 12/31/2011	1,677,000		$	1.239	$	181,333	4.51
Exercisable at 12/31/2011	973,662		$	0.664	$	244,794	3.13

As of December 31, 2011, there was $582,603 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 $135,452. The following table shows the status of the Company’s non-vested stock options outstanding for the period ended December 31, 2011:

	Number of Options		Weighted Average Exercise Price
Outstanding at 3/31/2011	1,440,000		$	0.783
Granted	647,000		$	1.926
Vested	(410,000	)	$	0.724
Outstanding at 12/31/2011	1,677,000		$	1.239