Stock-Based Compensation

6 Months Ended

Sep. 30, 2011

Stock-Based Compensation [Abstract]

Stock-Based Compensation

10. Stock-Based Compensation

Under our 2007 Stock Incentive Plan, or the Option Plan, we may grant options to purchase shares of common stock to employees, executives, directors and consultants at exercise prices not less than the fair market value at date of grant for incentive stock options and not less than 85% of the fair market value at the date of grant for non-statutory options. An aggregate of 12,559,948 shares have been authorized for issuance under the Option Plan. These options generally expire ten years from the date of grant and generally vest 25% twelve months from the date of grant, and ratably over the next 12 quarters thereafter.

There were no stock options granted to purchase shares of common stock for the three and six months ended September 30, 2011 and for the three months ended September 30, 2010.

For the six months ended September 30, 2010, we granted stock options to purchase 2,535,000 shares of common stock with a weighted average grant date fair value of $0.20 per share. We used the Black-Scholes option pricing model to estimate the fair value of stock options granted with the following assumptions:

Expected dividend yield		0	%
Expected volatility		46.65	%
Risk-free interest rates		2.45	%
Expected life	6.8 years

We have elected to use the calculated-value method under FASB ASC 718 to calculate the volatility assumption for the six months ended September 30, 2010. The expected life represents the period of time that stock options are expected to be outstanding, giving consideration to the contractual terms of the awards, vesting schedules, and expectations of future exercise patterns and post-vesting employee termination behavior. Given our limited operating history, the simplified method was applied to calculate the expected term. The risk-free interest rate is based on the U.S. Treasury yield for a term consistent with the expected life of the awards in effect at the time of grant. We have paid no cash dividends and do not anticipate paying any cash dividends in the foreseeable future and therefore used an expected dividend yield of zero in our option-pricing models.

Options activity under the Option Plan is summarized as follows:

	Options Issued and Outstanding
	Options Issued			Weighted Average
	and Outstanding			Exercise Price
Balances at March 31, 2011		6,878,672		$	0.35
Options Granted		—			—
Options Exercised		(103,624	)		0.25
Options Cancelled		(210,893	)		0.38
Balances at September 30, 2011		6,564,155		$	0.35

Options outstanding and exercisable at September 30, 2011 were 2,787,381 at a weighted average exercise price of $0.31.

A summary by exercise price of outstanding options, vested options, and options vested and expected to vest at September 30, 2011, is as follows:

			Weighted Average
Exercise Price and			Remaining Contractual				Number of Options
Weighted Average	Number of Options		Life of Outstanding		Number of Options		Vested and Expected to
Exercise Price	Outstanding		Options (Years)		Vested		Vest
$0.23		1,047,500		7.90		577,340		1,027,719
$0.27		1,294,250		6.16		1,180,187		1,292,024
$0.41		4,222,405		8.98		1,029,854		4,032,747
$0.35		6,564,155		8.25		2,787,381		6,352,490

A summary by outstanding options, vested options and options vested and expected to vest at September 30, 2011, is as follows:

			Weighted Average
			Remaining
	Number of		Contractual Life		Weighted Average
	Options		(Years)		Exercise Price
Options Outstanding		6,564,155		8.25	$	0.35
Vested Options		2,787,381		7.48	$	0.31
Options Vested and Expected to Vest		6,352,490		8.23	$	0.35

No income tax benefit has been recognized relating to stock-based compensation expense and no tax benefits have been realized from exercised stock options.

As of September 30, 2011, total unrecognized compensation cost was $668,977 and these costs are expected to be recognized through 2014.