2. STOCK-BASED COMPENSATION

12 Months Ended

Jun. 30, 2012

Equity [Abstract]

STOCK-BASED COMPENSATION

2. STOCK-BASED COMPENSATION

The Company has several employee stock option and officer and director stock option plans that have been approved by the shareholders of the Company.  The plans require that options be granted at a price not less than market on date of grant.

The Company uses the Black-Scholes option pricing model to estimate fair value of stock-based awards.

           Assumptions for awards of options granted during the years ended June 30, 2012 and 2011 were:

	Awards Granted in the Years Ended
Assumption	June 30, 2012	June 30, 2011
Dividend yield	0%	0%
Expected volatility	62%	62%
Weighted-average volatility	62%	62%
Risk-free interest rate	2%	2% - 4%
Expected life of options (in years)	3.75	2.0 - 3.75
Weighted average grant-date Black Scholes calculated fair value	$0.31	$0.61

 The following table summarizes the Company’s stock option activity during fiscal year 2012:

				Weighted  Average
			Weighted Average	Remaining		Aggregate		Aggregate
	Number of		Exercise Price	Contractual		Fair		Instrinsic
	Shares		Per Share	Term (1)		Value		Value
Outstanding July 1, 2011 (4)	661,800	$	1.62	1.78	$	394,100	$	210,700
Granted	635,000		0.75	4.78		196,900		-
Exercised	(100,800)		1.50	-		(45,500)		45,600	(2) (3)
Forfeited, expired or cancelled	(521,900)		1.64	-		(328,400)		-
Outstanding June 30, 2012	674,100	$	0.80	4.58	$	217,100	$	-	(2)
Exercisable June 30, 2012	102,600	$	1.08	3.47	$	40,000	$	-	(2)
(1) Remaining contractual term presented in years.
(2) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards
and the closing price of the Company's common stock as of June 30, 2012, for those awards that have an
exercise price currently below the closing price as of June 30, 2012 of $0.69.
(3) This value is calculated as the difference between the exercise price and the market price of the stock on the
date of exercise.  The market price of the Company's common stock as of the various exercise dates ranged
from $1.77 to $2.02.
(4) Includes 23,400 options previously excluded.

The Black Scholes value of the 635,000 options granted during the fiscal year ended June 30, 2012 was $170,900 of which $17,100 had been recognized.  As of June 30, 2012, the Company has approximately $153,800 of unamortized Black Scholes value related to the above stock option grants which is scheduled to be expensed during fiscal year 2013.

As of June 30, 2012, the Company had 150,400 warrants outstanding with a weighted average exercise price of $6.24.  The expiration date of the outstanding warrants extends through July 9, 2013.  The following table summarizes the Company’s warrant activity during the twelve months ended June 30, 2012:

				Weighted
		Number of		Average
		Shares		Exercise Price
Warrants Outstanding, June 30, 2011		201,100	$	5.77
	Granted	-		-
	Exercised	-		-
	Canceled/Expired	(50,700)		4.38
Warrants Outstanding, June 30, 2012		150,400	$	6.24