6.	Stockholders’ Equity

Common Stock

As of June 30, 2014, we had 7,834,632 shares of common stock reserved for future issuance.

On June 18, 2014, we completed a public offering of 7,530,000 shares of common stock at $1.50 per share, together with warrants to purchase up to an aggregate of 2,259,000 shares of common stock. The warrants may be exercised by the holders at a price of $1.55 per share immediately thru June 18, 2019. Net proceeds after expenses from the offering were approximately $10.1 million after underwriting discount and estimated offering expenses.

On January 30, 2014, we completed a private placement of the sale of 3,336,800 shares of our common stock at $2.00 per share, together with warrants to purchase up to an aggregate of 1,668,400 shares of common stock. The warrants may be exercised by the holders at a price of $2.81 per share starting July 30, 2014 continuing through January 29, 2019. Net proceeds after expenses from the offering were approximately $5.9 million.

Warrants

A summary of warrant activity is as follows:

	2014				2013				2012
	Number of Shares		Weighted- Average Exercise Price Per Share		Number of Shares		Weighted- Average Exercise Price Per Share		Number of Shares		Weighted- Average Exercise Price Per Share
Beginning balance		1,125,000	$	2.64		1,125,000	$	2.64		1,125,000	$	2.64
Warrants granted		3,988,420	$	2.09		--		--		--		--
Warrants canceled		--		--		--		--		--		--
Warrants exercised		--		--		--		--		--		--
Outstanding at June 30		5,113,420	$	2.21		1,125,000	$	2.64		1,125,000	$	2.64
Exercisable at June 30		3,445,020	$	1.92		1,125,000	$	2.64		1,125,000	$	2.64

Stock Options

The 2012 Independent Director Plan (“2012 Plan”) permits the grant of stock or options to independent directors. A total of 500,000 shares were approved by the stockholders for issuance under the 2012 Plan. Options are granted at prices that are equal to 100% of the fair market value on the date of grant, and expire over a term not to exceed ten years. Options generally vest immediately, unless otherwise determined by the Board of Directors.

The 2006 Equity Incentive Plan (“2006 Plan”) permits the grant of options, restricted stock, stock bonuses and stock appreciation rights to employees, directors and consultants. Under the 2006 Plan, the number of shares of common stock equal to 6% of the number of outstanding shares of the Company are authorized to be issued. The number of shares available to grant for awards adjusts at the beginning of each fiscal year if additional options to purchase shares of common stock were issued in the preceding fiscal year. As of June 30, 2014, there have been 2,804,819 shares approved under the 2006 Plan for issuance.

The 2002 Independent Directors Equity Incentive Plan (“2002 Plan”) permits the grant of stock or options to independent directors. A total of 87,500 shares were approved by the stockholders for issuance under the 2002 Plan. Options are granted at prices which are equal to 100% of the fair market value on the date of grant, and expire over a term not to exceed ten years. Options generally vest immediately, unless otherwise determined by the Board of Directors. The 2002 Plan, but not the options granted, expired in January 2012.

We issue new shares of common stock upon exercise of stock options. The following is a summary of option activity for the Company’s stock option plans:

	Number of Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life		Aggregate Intrinsic Value
Outstanding at June 30, 2013		1,063,750		$	2.36

Granted		457,235		$	2.06
Forfeited/cancelled		(61,075	)	$	2.35
Expired		(197,500	)	$	3.42
Exercised		(9,375	)	$	2.32
Outstanding at June 30, 2014		1,253,035		$	2.08		3	$	130
Vested and Expected to Vest at June 30, 2014		1,046,930		$	2.01		2	$	113
Exercisable at June 30, 2014		614,296		$	2.39		1	$	43

The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the quoted price of the Company's common stock. There were no options that were exercised during the years ended June 30, 2013 and 2012. During the year ended June 30, 2014, the aggregate intrinsic value of options exercised under the Company's stock option plans was $4 determined as of the date of option exercise.

The following table summarizes information about stock options outstanding at June 30, 2014:

Range of Exercise Prices		Number Outstanding		Weighted- Average Remaining Contractual Life (Years)		Weighted- Average Exercise Price		Number Exercisable		Weighted- Average Exercise Price
$	0.90-$1.13		278,750		2.3	$	0.93		92,398	$	0.93
$	1.37-$2.03		216,250		2.3	$	1.83		136,459	$	1.79
$	2.17-$3.03		748,535		2.7	$	2.45		376,251	$	2.69
$	3.82		1,250		1.5	$	3.82		938	$	3.82
$	14.32		8,250		0.1	$	14.32		8,250	$	14.32
			1,253,035						614,296

Non-vested stock option activity for the year ended June 30, 2014, is as follows:

	Non-vested Stock Options			Weighted-Average Grant Date Fair Value
Outstanding at June 30, 2013		514,474		$	0.97
Granted		457,235		$	1.15
Vested		(289,270	)	$	1.07
Forfeited		(43,700	)	$	1.43
Outstanding at June 30, 2014		638,739		$	1.02

Stock Compensation Expense

At June 30, 2014, the total compensation cost related to options granted to employees under the Company's stock option plans but not yet recognized was $288. This cost will be amortized on a straight-line basis over a weighted-average period of approximately two years and will be adjusted for subsequent changes in estimated forfeitures. The total fair value of options vested during the years ended June 30, 2014, 2013, and 2012 was $309, $356 and $440.

Common Stock Restricted Awards

For the year ended June 30, 2014, the Company’s Compensation Committee granted 692,968 shares of restricted common stock to director level and executive members of management, vesting in three equal installments on the first, second and third anniversary of the grant date.

In March 2013, an officer was granted 50,000 shares of restricted common stock upon hire, vesting in three equal installments on the first, second and third anniversary of the grant date.

For the year ended June 30, 2012, the Company’s Compensation Committee granted 720,000 shares of restricted common stock to director level and executive members of management, vesting in three equal installments on the first, second and third anniversary of the grant date.

Common Stock Restricted Awards (Continued)

The following is a summary of restricted stock activity:

	2014					2013					2012
	Number of Shares			Weighted- Average Grant Date Fair Value		Number of Shares			Weighted- Average Grant Date Fair Value		Number of Shares			Weighted- Average Grant Date Fair Value
Balance at June 30		390,003		$	1.81		540,000		$	1.93		30,000		$	2.25
Granted		692,968		$	1.95		50,000		$	0.91		720,000		$	1.89
Vested		(191,672	)	$	1.86		(174,997	)	$	1.95		(10,000	)	$	2.25
Forfeited		(87,500	)	$	2.00		(25,000	)	$	1.70		(200,000	)	$	1.80
Outstanding at June 30		803,799		$	1.90		390,003		$	1.81		540,000		$	1.93

In connection with the vesting of the restricted stock awards, the election was made by some of the employees to satisfy the applicable federal income tax withholding obligation by a net share settlement, pursuant to which the Company withheld 57,680 and 59,054 shares for the years ended June 30, 2014 and 2013, respectively and used the deemed proceeds from those shares to pay the income tax withholding. The net share settlement is deemed to be a repurchase by the Company of its common stock.

As of June 30, 2014, we had $1,208 in total unrecognized compensation expense related to our restricted stock awards, which will be recognized over a weighted average period of approximately three years.