SHARE-BASED PAYMENTS

3 Months Ended

Oct. 31, 2011

Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract]

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

NOTE 10 – SHARE-BASED PAYMENTS (in thousands, except per share amounts)

In March 2004 the Company adopted the ITEX Corporation 2004 Equity Incentive Plan (the “2004 Plan”), for which 400 shares of common stock were authorized for issuance. The 2004 Plan provides for the grant of incentive and nonqualified stock options, restricted stock, and stock bonuses to the Company's employees, directors, officers or consultants.

In February 2011, the Board of Directors of the Company approved an amendment to the 2004 Equity Incentive Plan, as amended and restated (the “Plan”), that increased the number of shares of the Company’s common stock, $0.01 par value per share, that may be delivered pursuant to awards granted under the Plan by an additional 400 shares.

In March 2011, the Company issued 197 restricted shares to thirteen of the Company’s employees, valued at the grant date stock price of $4.25 per share, with a vesting period of five years from the date of grant. The fair value of these shares as of the grant date was $837. The grant is to be amortized to compensation expense over the respective requisite service period of five years.

In March 2011, the Company issued 190 restricted shares to the Company’s CEO, valued at the grant date stock price of $4.25 per share, with a vesting period of eleven and one-half years from the date of grant. The fair value of these shares as of the grant date was $808. The grant first vests 19 shares in October 2013 and then another 19 shares vest annually in October of each subsequent year. The grant is to be amortized to compensation expense over the respective requisite service period of eleven and one-half years.

In March 2011, the Company issued 5 restricted shares to a consultant who is also a Board of Director, valued at the grant date stock price of $4.25 per share, with a vesting period of one year from the date of grant. The fair value of these shares as of the grant date was $21. The grant is to be amortized to compensation expense over the respective requisite service period of one year.

In October 2009, the Company issued 39 restricted shares to the Company’s CEO, valued at the grant date stock price of $3.40 per share, with a vesting period of three years from the date of grant. The grant is to be amortized to compensation expense over the respective requisite service period of three years.

Eight shares remained available for future grants under the 2004 Plan for the period ended October 31, 2011.

We account for share-based compensation in accordance with the related guidance. Under the fair value recognition provisions, we estimate share-based compensation cost at the grant date based on the fair value of the award. We recognize that expense ratably over the requisite service period of the award.

The stock-based compensation expense charged against the results of operations was as follows (in thousands):

	Three-months ended October 31,
	2011		2010
Stock-based compensation expense included in:
Corporate salaries, wages and employee benefits	$	76	$	11
Selling, general and administrative		-		-
Total stock-based compensation expense		76		11

At October 31, 2011, 405 shares of common stock granted under the 2004 Plan remained unvested. At October 31, 2011, the Company had $1,556 of unrecognized compensation expense, expected to be recognized over a weighted-average period of approximately seven and one-half years.