Note 11 - Shareholders' Equity

12 Months Ended

Jul. 28, 2012

Stockholders' Equity Note Disclosure [Text Block]

11.           SHAREHOLDERS’ EQUITY

RIGHTS OFFERING AND STOCK SPLITS –On October 13, 2010, following approval by shareholders at a special meeting, the Company filed with the New York Secretary of State an amendment to the Company’s Certificate of Incorporation to increase the number of shares of Common Stock authorized for issuance by the Company from 50,000,000 to 100,000,000.

On December 22, 2010, the Company completed its rights offering and issued 1,999,938 shares of Common Stock at $7.50 per share for gross proceeds of $15,000.  Expenses of the offering were $660.

On January 6, 2011, the Company effected a one-for-fifty reverse stock split.  The reverse split was immediately followed by a four-for-one forward stock split.  The Company paid $9 for fractional shares resulting from the splits.  All share and per share information presented in these financial statements have been restated to retroactively reflect these splits.

STOCK BASED AWARDS – On March 8, 2011, Company shareholders approved an increase of 300,000 shares under the Company’s 2007 Incentive Stock Plan (the “Plan”).  A total of 380,000 shares may now be granted under the Plan, of which 171,740 shares are still available for future grant as of July 28, 2012.  No additional awards will be granted under the former plan.  Under the Plan, the Company can issue stock options and restricted stock awards.  To date, only stock options and restricted shares have been awarded.  Substantially all of the options granted under this Plan and the prior plan provide for graded vesting and vest generally at a rate of 25% per year, beginning with the date of grant, expiring ten years from the date they are granted, other than the options granted under the Plan to certain directors on December 15, 2011 which vest in full on the first anniversary of the date of grant.  The option price per share is approved by the Board of Directors.  All options have been granted at the fair market value of the Company’s stock at the date of grant.  Restricted shares have been issued with no amounts due from the employee and have therefore been valued at the fair market value on the date of the grant.  No awards can be granted under the Plan subsequent to February 21, 2017.

Restricted Stock:  No restricted stock awards were granted under the Company’s 2007 Incentive Stock Plan during fiscal year 2012.

A summary of activity for restricted stock award for fiscal year 2012 are as follows:

	Shares			Weighted Average Grant-Date Fair Value
Non-vested restricted stock at July 30, 2011		51,100		$	10.00
Awarded		-			-
Vested		(34,100	)	$	10.00
Forfeited		-			-
Non-vested restricted stock at July 28, 2012		17,000		$	10.00

Details regarding the fair value of stock options granted in fiscal 2012, 2011 and 2010 are as follows:

	2012	2011	2010
Estimated life (in years)	7	-	7
Volatility rate	62.6 – 62.8	-	65%-69%
Risk free interest rate	1.31%-1.36%	-	2.77%-3.49%
Dividend rate	-%	-%	0%
Forfeiture rate	2%	-%	2%
Weighted average fair value	$6.11	$-	$5.36

The Black Scholes Option Pricing Model requires the use of various assumptions.  The key assumptions are summarized as follows:

Estimated life:  The Company derives its estimated life based on historical experience.

Volatility rate:  The Company estimates the volatility of its Common Stock at the date of grant based on historical volatility of its Common Stock.

Risk free interest rate: The Company derives its risk-free interest rate on the Barron’s zero coupon bond rate for a term equivalent to the expected life of the option.

Dividend rate:  The Company estimates the dividend yield assumption based on the Company’s historical and projected dividend payouts.

Forfeiture rate:  The Company estimates the annual forfeiture rate based on historical experience.

Stock-based compensation expense recorded for fiscal years:	2012		2011		2010
Restricted stock expense	$	282	$	147	$	-
Stock options	$	246	$	103	$	240

A summary of activity for stock option awards follows:

	JULY 28, 2012					JULY 30, 2011					JULY 31, 2010
	SHARES OUTSTANDING			WEIGHTED AVERAGE EXERCISE PRICE		SHARES OUTSTANDING*			WEIGHTED AVERAGE EXERCISE PRICE*		SHARES OUTSTANDING*			WEIGHTED AVERAGE EXERCISE PRICE*
Granted and outstanding, beginning of year		137,151		$	38.06		205,055		$	36.00		178,905		$	40.50
Granted		52,000			9.98		-			-		33,200			7.75
Exercised		-			-		-			-		-			-
Cancelled and forfeited		(5,143	)		78.27		(67,904	)		31.88		(7,050	)		17.25
Outstanding at end of year		184,008			29.00		137,151			38.06		205,055			36.00
Exercisable at end of year		124,108			38.33		117,721			42.96		169,965			41.00

As of July 28, 2012, the distribution of stock option exercise prices is as follows:

	OPTIONS OUTSTANDING						OPTIONS EXERCISABLE
EXERCISE PRICE RANGE	RANGE NUMBER OF OPTION SHARES		WEIGHTED AVERAGE EXERCISE PRICE		WEIGHTED AVERAGE REMAINING LIFE		SHARES EXERCISABLE		WEIGHTED AVERAGE EXERCISE PRICE		WEIGHTED AVERAGE REMAINING LIFE
$6.25 - $41.75		153,760	$	16.36		6.3		93,860	$	20.63		5.1
$50.00 – $82.50		4,400	$	50.00		0.5		4,400	$	50.00		0.5
$87.50 - $99.25		17,662	$	93.85		1.8		17,662	$	93.85		1.8
$100.00 - $125.00		8,186	$	115.30		1.2		8,186	$	115.30		1.2
		184,008	$	29.00		5.8		124,108	$	38.33		4.2

At July 28, 2012, the aggregate intrinsic value of options outstanding and options exercisable was $117 and $71, respectively.  The intrinsic value is the amount by which the market value of the underlying stock exceeds the exercise price of the option at the measurement date for all-in-the money options.

Future compensation expense related to the vesting of employee stock options granted by July 28, 2012 is expected to be $129 in 2013 and $3 in 2014.  Future compensation expense related to the vesting of shares of restricted stock is expected to be $107 in fiscal 2013.

No stock options were exercised during fiscal 2012, 2011 or 2010.