SHARE-BASED COMPENSATION

3 Months Ended

Sep. 30, 2013

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

SHARE-BASED COMPENSATION

NOTE 8. SHARE-BASED COMPENSATION

We have two equity compensation plans, the Second Amended and Restated 2004 Stock Option Plan (the “Employees Stock Option Plan”) and the Amended and Restated 2004 Directors Stock Option Plan (the “Directors Stock Option Plan”) (collectively, the “Stock Option Plans”), pursuant to which (i) options to purchase shares of common stock, or (ii) restricted shares of common stock, may be granted up to an aggregate amount of 1,333,333 common shares, with 1,066,667 and 266,666 shares distributed between the Employees Stock Option Plan and the Directors Stock Option Plan, respectively. The Stock Option Plans are substantially similar, providing for a strike price equal to the closing price for a share of our common stock as of the last business day immediately prior to the grant date, vesting periods as determined by the Board for the Employees Stock Option Plan and six months for the Directors Stock Option Plan, and terms of up to ten years, subject to forfeit 30 days after the holder ceases to be an employee or 90 days after the holder ceases to be director, as the case may be. At September 30, 2013, 503,330 and 173,334 shares under the Employees Stock Option Plan and the Directors Stock Option Plan, respectively, are available to grant in future years. Share-based compensation expense under the Stock Option Plans for the three months ended September 30, 2013 and 2012 was $20,000 and $30,000, respectively.

Stock Options

The following assumptions were used in the calculation of share-based compensation expense for options granted during the three months ended September 30, 2012:

Dividend rate	None
Price volatility	87%
Risk-free interest rate	0.9%
Expected life	6.0 years

No options were granted during the three months ended September 30, 2013.

As of September 30, 2013, there was an aggregate of $48,000 of unrecognized compensation cost under the Stock Option Plans related to 54,000 non-vested outstanding stock options with a per share weighted average value of $1.40. The unrecognized expense is anticipated to be recognized on a straight-line basis over a weighted average period of 1.5 years. Following is a summary of stock option activity for the three months ended September 30, 2013 and 2012:

	2013					2012
				Weighted-					Weighted-
				Average					Average
				Exercise					Exercise
	Shares			Price		Shares			Price
Outstanding at beginning of period		292,504		$	2.35		591,672		$	2.48
Granted		—			—		35,000			1.73
Exercised		(804	)		1.80		—			—
Forfeited		(97,531	)		2.35		(13,334	)		7.74
Outstanding at end of period		194,169		$	2.36		613,338		$	2.33
Exercisable at end of period		139,729		$	2.57		268,893		$	2.84
Weighted-average fair value per option granted during the period				$	—				$	1.25

Following is a summary of information regarding options outstanding and options exercisable at September 30, 2013:

	Options Outstanding								Options Exercisable
Range of Exercise Price	Number Outstanding		Average Contractual Life		Average Exercise Price		Aggregate Intrinsic Value		Number Outstanding		Average Remaining Contractual Life		Average Exercise Price		Aggregate Intrinsic Value
$1.35 to $2.34….		172,500		8.11	$	$1.87	$	24,625		118,060		7.93	$	1.90	$	14,309
$2.35 to $5.62….		11,668		1.58		5.24	$	—		11,668		1.58		5.24	$	—
$5.63 to $7.76….		10,001		1.99		7.33	$	—		10,001		1.99		7.33	$	—
Total		194,169		7.40	$	$2.36	$	24,625		139,729		6.97	$	2.57	$	14,309

Restricted Stock

The following is a summary of restricted share activity for the three months ended September 30, 2013 and 2012:

	2013					2012
	Shares			Weighted- Average Grant Date Fair Value		Shares	Weighted- Average Grant Date Fair Value
Outstanding at beginning of year		32,500		$	1.73	—
Granted		—			—	35,000	$       1.73
Vested		(9,166	)		1.73	—	—
Forfeited		(5,000	)		1.73	—	—
Outstanding at end of period		18,334		$	1.73	35,000	$1.73

As of September 30, 2013, there was $25,000 in unrecognized compensation cost related to non-vested outstanding restricted shares. The unrecognized expense is anticipated to be amortized over the next 2.0 years.