Share-Based Compensation

12 Months Ended

Jun. 30, 2014

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

Share-Based Compensation

9. Share-Based Compensation

Stock Option Plans

Through June 2014, we had two active stock option 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” and, collectively with the Employees Stock Option Plan, the “Option Plans”), pursuant to which (i) options to purchase shares of common stock, or (ii) restricted shares of common stock, could 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 Option Plans were 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 of Directors 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 June 30, 2014, options to purchase an aggregate of 531,381 and 173,334 shares under the Employees Stock Option Plan and the Directors Stock Option Plan, respectively, were available to grant in future years. Aggregate share-based compensation expense under the Plans for the years ended June 30, 2014 and 2013 were $50,000 and $100,000, respectively.

There were no stock options granted during the fiscal year ended June 30, 2014. The following weighted average assumptions were used in the calculation of share-based compensation expense for options granted during the year ended June 30, 2013:

	Year Ended
	June 30, 2013
Weighted average risk-free interest rate		0.9%
Expected life (in years)		5.7
Expected stock price volatility		89%
Dividend yield		None

As of June 30, 2014, there was an aggregate of $11,000 of unrecognized compensation cost under the Option Plans related to 19,167 non-vested outstanding stock options with a per share weighted average value of $1.56. The unrecognized expense is anticipated to be recognized on a straight-line basis over a weighted average period of 10 months.

The following is a summary of stock option activity under the Option Plans for the years ended June 30, 2014 and 2013:

	Outstanding Options
	Number of Shares			Weighted-Average Exercise Price
Balance, July 1, 2012	591,672		$	2.48
Options granted	70,000			1.92
Options canceled or expired	(325,834	)		2.61
Options exercised	(43,334	)		1.53
Balance, July 1, 2013	292,504		$	2.35
Options granted	—			—
Options canceled or expired	(123,398	)		2.22
Options exercised	(4,104	)		2.33
Balance, June 30, 2014	165,002		$	2.40
Stock Options Exercisable at June 30, 2014	145,835		$	2.49

The following table summarizes information regarding options outstanding and options exercisable under the Option Plans at June 30, 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	145,500	7.23	$1.87	$33,600	125,833	7.13	$1.89	$26,917
2.5  to 5.00	3,334	2.88	4.38	—	3,334	2.88	4.38	—
5.01  to 7.50	8,334	0.02	5.58	—	8,334	0.02	5.58	—
7.51 to 10.00	8,334	1.52	7.65	—	8,334	1.52	7.65	—
Total	165,002	6.49 years	$2.40	$33,600	145,835	6.31	$2.49	$26,917

In June 2014, our Board of Directors terminated the Employees Stock Option Plan, with the provision that options outstanding under the Employees Stock Option Plan will remain outstanding in accordance with their respective terms. In September 2014, our Board approved the inclusion in our proxy statement for approval by our shareholders at the 2014 Annual Meeting of Shareholders its recommendation to terminate the Directors Stock Option Plan.

Employee Stock Purchase Plan

Also in September 2014, our Board approved the establishment of an Employee Stock Purchase Plan (the “ESPP”). The ESPP conforms to the provisions of Section 423 of the Internal Revenue Code, has coterminous offering and purchase periods of six months, and bases the pricing to purchase shares of our common stock on a formula so as to result in a per share purchase price that approximates a 15% discount from the market price of a share of our common stock at the end of the purchase period. The Board of Directors also approved the provision that shares formerly reserved for issuance under the Employee Stock Option Plan in excess of shares issuable pursuant to outstanding options be reserved for issuance pursuant to the ESPP.

Restricted Stock

The following is a summary of restricted share activity for the years ended June 30, 2014 and 2013:

	Outstanding Restricted Stock Units
	Number of Shares			Weighted-Average Stock Price On Grant Date
Balance, June 30, 2012	—		$	—
Granted	35,000			1.73
Forfeited	(2,500	)		1.73
Vested	—			—
Balance, June 30, 2013	32,500		$	1.73
Granted	—			—
Forfeited	(10,001	)		1.73
Vested	(9,166	)		1.73
Balance, June 30, 2014	13,333		$	1.73

As of June 30, 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 1.2 years.