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SHARE-BASED COMPENSATION

9 Months Ended

Mar. 31, 2014

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

NOTE 9. 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 a director, as the case may be. At March 31, 2014, 527,214 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 March 31, 2014 and 2013 was $10,000 and $42,000, respectively, and for the nine months ended March 31, 2014 and 2013 was $42,000 and $107,000, respectively.

Stock Options

The following assumptions were used in the calculation of share-based compensation expense for options granted during the three and nine months ended March 31, 2013:

	Three Months Ended			Nine Months Ended
	March 31, 2013			March 31, 2013
Dividend rate		None			None
Price volatility		92	%		89	%
Risk-free interest rate		0.8	%		0.86	%
Expected Life		5.2 years			5.7 years

No options were granted during the three or nine months ended March 31, 2014.

As of March 31, 2014, there was an aggregate of $19,000 of unrecognized compensation cost under the Stock Option Plans related to 26,667 non-vested outstanding stock options with a per share weighted average value of $1.76. The unrecognized expense is anticipated to be recognized on a straight-line basis over a weighted average period of 11.5 months. Following is a summary of stock option activity for the nine months ended March 31, 2014 and 2013:

	2014					2013
	Number of Shares			Weighted-Average Exercise Price		Number of Shares			Weighted-Average Exercise Price
Outstanding at beginning of period		292,504		$	2.35		591,672		$	2.48
Options granted		—			—		60,000			1.90
Options exercised		(4,695	)		1.96		(33,334	)		1.50
Options forfeited		(118,640	)		2.09		(213,334	)		2.35
Outstanding at end of period		169,169		$	2.43		405,004		$	2.34
Stock Options Exercisable at March 31,		142,502		$	2.55		274,726		$	2.88
Weighted-average fair value per option granted during the period				$	—				$	1.34

Following is a summary of information regarding options outstanding and options exercisable at March 31, 2014:

		Options Outstanding				Options Exercisable
Range of Exercise Prices	Number Outstanding	Weighted-Avg. Remaining Contractual Life		Weighted-Avg. Exercise Price		Aggregate. Intrinsic Value	Number Outstanding	Weighted-Avg. Remaining Contractual Life		Weighted-Avg. Exercise Price		Average Intrinsic Value
$0 to 2.50	147,500	7.50	$	1.87	$	19,950	120,833	7.38	$	1.89	$	13,833
2.5 to 5.00	3,334	3.13		4.38		—	3,334	3.13		4.38		—
5.01 to 7.50	10,001	0.24		5.61		—	10,001	0.24		5.61		—
7.51 to 10.00	8,334	1.77		7.65		—	8,334	1.77		7.65		—
Total	169,169	6.70 years	$	2.43	$	19,950	142,502	6.46	$	2.55	$	13,833

Restricted Stock

The following is a summary of restricted share activity for the nine months ended March 31, 2014 and 2013:

	2014			2013
	Number of Shares		Weighted-Average Grant Date Fair Value	Number of Shares		Weighted-Average Grant Date Fair Value
Outstanding at beginning of period	32,500	$	1.73	—	$
Granted	—		—	35,000		1.73
Vested	(9,166)		1.73	—		—
Forfeited	(8,334)		1.73	—		—
Outstanding at end of period	15,000	$	1.73	35,000	$	1.73

As of March 31, 2014, there was $10,000 in unrecognized compensation cost related to non-vested outstanding restricted shares. The unrecognized expense is anticipated to be amortized over the next 1.45 years.

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

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