Stockholders' Equity

3 Months Ended

Aug. 31, 2012

Stockholders' Equity [Abstract]

STOCKHOLDERS' EQUITY

5. STOCKHOLDERS’ EQUITY

The authorized capital stock for the Company is 51,000,000, consisting of (i) 50,000,000 shares of common stock, par value $0.0001 and (ii) 1,000,000 shares of preferred stock, par value $0.0001.

Of the authorized shares, 25,575,540 and 25,574,124 shares of common stock were outstanding as of August 31, 2012 and May 31, 2012, respectively.

Stock-Based Compensation

In December 2009, the Company adopted the 2009 Stock Option and Compensation Plan (the “Plan”) pursuant to which the Company may grant restricted stock awards, restricted stock units and stock options to aid in recruiting and retaining employees, officers, directors and other consultants. Restricted stock awards accrue dividends that are paid when the shares vest. Restricted stock unit awards do not accrue dividends prior to vesting. Grants are issued at prices determined by the compensation committee, generally equal to the closing price of the stock on the date of the grant, vest over various terms (generally three years), and expire ten years from the date of the grant. The Plan allows vesting based upon performance criteria. Certain option and share awards provide for accelerated vesting if there is a change in control of the Company (as defined in the Plan). The fair value of stock options granted is calculated using the Black-Scholes option pricing model. Share options issued under the Plan may be incentive stock options or nonqualified stock options. At August 31, 2012, all stock options issued have been nonqualified stock options. A total of 1,300,000 shares were authorized by the Plan. Shares forfeited or canceled are eligible for reissuance under the Plan. At August 31, 2012, 588,182 shares of common stock remain available for issuance under the Plan.

Restricted stock

The fair value of restricted stock awards was calculated using the Company’s stock price as of the associated grant date, and the expense is accrued ratably over the vesting period of the award.

During the quarter ended August 31, 2012, the Company issued 46,088 restricted stock units (“RSUs”) with performance based vesting at a grant date fair value of $4.60 per share. The number of shares to be earned is determined by the Company’s profitability during the year ended May 31, 2013. At August 31, 2012, the Company believes the performance criteria required for vesting of these RSUs will be attained.

During the quarter ended August 31, 2012, the Company also awarded 13,044 restricted stock awards with time based vesting at a grant date fair value of $4.60 per share to the members of the board of directors. Shares vest one year from the grant date and require board service for the entire year.

During the quarter ended August 31, 2011, the Company issued 41,500 RSUs with performance based vesting at a grant date fair value of $10.59 per share. The number of shares earned was determined by the Company’s profitability during the year ended May 31, 2012. The performance criteria required for vesting of these RSUs was not attained resulting in the cancelation of all these awards at May 31, 2012 and no expense was recorded.

During the quarter ended August 31, 2011, the Company also awarded 1,888 restricted stock awards with time based vesting at a grant date fair value of $10.59 per share to the members of the board of directors. Shares vest one year from the grant date and require board service for the entire year. The award agreement calls for acceleration of vesting upon the holder’s death; 472 shares vested in fiscal 2012 due to the death of Mr. Yelick. The remaining 1,416 shares vested in the first quarter of fiscal 2013.

Compensation expenses associated with restricted stock awards and restricted stock unit awards, respectively, totaled $24 and $65 for the quarters ended August 31, 2012 and 2011, respectively. At August 31 2012, unamortized compensation cost of restricted stock and restricted stock unit awards totaled $251. The unamortized cost is expected to be recognized over a weighted-average period of 2.0 years as of August 31, 2012.

A summary of restricted shares activity under the Plan as of August 31, 2012 and 2011, and changes during the three month periods then ended is presented below:

Restricted Shares	Shares			Weighted Average Grant Date Fair Value
Non-vested shares at May 31, 2012		1,416		$	10.59
Granted		59,132			4.60
Vested		(1,416	)		10.59
Forfeited		—			—
Non-vested shares at August 31, 2012		59,132		$	4.60
Restricted Shares	Shares			Weighted Average Grant Date Fair Value
Non-vested shares at May 31, 2011		54,166		$	8.62
Granted		43,388			10.59
Vested		—			—
Forfeited		—			—
Non-vested shares at August 31, 2011		97,554		$	9.49

Stock options

The Company accounts for stock option-based compensation by estimating the fair value of options granted using a Black-Scholes option valuation model. The Company recognizes the expense for grants of stock options on a straight-line basis in the statement of operations as operating expense based on their fair value over the requisite service period.

For stock options issued during the three months ended August 31, 2012 and 2011, the following assumptions were used to determine fair value:

	For the three months ended August 31,
Assumptions used:	2012			2011
Expected term (in years)		5.99			6.00
Expected volatility		61.20	%		50.00	%
Weighted average risk free interest rate		0.85	%		1.22	%
Weighted average risk free interest rate range		0.80-0.85	%		1.22	%
Weighted average expected dividend		2.87	%		1.13	%
Weighted average expected dividend range		2.87	%		1.13	%
Weighted average fair value	$	2.01		$	4.56

The volatilities are based on historic volatilities from the traded shares of NAUH over the past 2  ¹/ ₂ years. The Company has analyzed the forfeitures of stock and option grants and has deemed the effect to be immaterial and therefore did not include a forfeiture rate in the expense calculation. The expected term of options granted is the safe harbor period. The risk-free interest rate for periods matching the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. Expected dividend is based on the historic dividend of the Company.

A summary of option activity under the Plan as of August 31, 2012 and 2011, and changes during the three month periods then ended is presented below:

Stock Options	Shares			Weighted average exercise price		Weighted average remaining contractual life (years)		Aggregate intrinsic value
Outstanding at May 31, 2012		223,950		$	9.92		8.7
Granted		156,800			4.60
Exercised		—			—
Forfeited or canceled		(4,000	)		9.35
Outstanding at August 31, 2012		376,750		$	7.71		9.1	$	—
Exercisable at August 31, 2012		141,781		$	9.56		8.2	$	—

Stock Options	Shares			Weighted average exercise price		Weighted average remaining contractual life (in years)		Aggregate intrinsic value ($000)
Outstanding at May 31, 2011		121,750		$	9.17		9.1
Granted		133,500			10.59
Exercised		—			—
Forfeited or canceled		(3,500	)		9.35
Outstanding at August 31, 2011		251,750		$	9.92		9.5	$	15
Exercisable at August 31, 2011		59,125		$	9.17		8.9	$	8

The Company recorded compensation expense for stock options of $55 and $63 for the quarters ended August 31, 2012 and 2011, respectively in the statement of operations. As of August 31, 2012 there was $651 of total unrecognized compensation cost related to unvested stock option based compensation arrangements granted under the Plan. The unamortized cost is expected to be recognized over a weighted-average period of 2.4 years as of August 31, 2012.

The Company plans to issue new shares as settlement of options exercised.

Dividends

On August 27, 2012, the Company declared a dividend totaling $0.04 per share on 25,575,540 shares of common stock outstanding and of record as of the close of business on September 30, 2012, which will pay on or about October 5, 2012.

On August 29, 2011, the Company declared a dividend totaling $0.03 per share on 26,886,071 shares of common stock outstanding and of record as of the close of business on September 30, 2011, which will pay on or about October 7, 2011.

Date declared	Record date	Payment date	Per share
August 29, 2011	September 30, 2011	October 7, 2011	$	0.0300
November 4, 2011	December 31, 2011	January 9, 2012	$	0.0325
January 30, 2012	March 30, 2012	April 6, 2012	$	0.0325
April 30, 2012	June 30, 2012	July 9, 2012	$	0.0325
August 27, 2012	September 30, 2012	(est) October 5, 2012	$	0.0400