Stock Based Compensation

9 Months Ended

Jun. 30, 2011

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

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

Note 7 - Stock Based Compensation

The fair value of the stock options granted was estimated at the date of grant using the Black-Scholes options pricing model.  Based on the list of assumptions presented below with numbers shown for the most recent grant, the weighted average fair value of the options granted during the nine months ended June 30, 2011 is $1.62 per share.  No stock options were granted in the three months ended June 30, 2011.

	December 2, 2010	(Date of most recent grant)
Expected term in years	3 years
Risk-free interest rate	3.95%
Expected volatility	85.21%
Expected dividend yield	0.00%

The expected volatility was determined with reference to the historical volatility of the Company's stock.  The Company uses historical data to estimate option exercise and employee termination within the valuation model.  The expected term of options granted represents the period of time that the options granted are expected to be outstanding.  The risk-free interest rate for periods within the contractual life of the option is based on the U.S. Treasury rate in effect at the time of grant.

During the three months ended June 30, 2011, no stock options were granted and 30,000 stock options were exercised.  The stock options were exercised via a net exercise arrangement with an exercise price of $1.73 per share.  The total number of shares issued from this net exercise was 15,973 and the exercise cost of $51,900 was paid through a reduction in the number of shares of common stock issued by 14,027 shares.  For the three months ended June 30, 2011, total stock-based compensation charged to operations for option-based arrangements amounted to $21,948.  Additionally, during the three months ended June 30, 2011, 420,000 shares of restricted stock were issued, of which 25,000 shares were vested with a compensation value of $100,500 and the remaining unvested 395,000 shares have a deferred compensation value of $1,585,900.  The compensation expense for the unvested restricted stock issued within the three months ended June 30, 2011 will be recognized when the shares vest according to the following schedule:

Restricted Stock Vesting Schedule
Year of Vesting	2012		2013		2014		2015		2016
Compensation Value	$	448,231	$	408,030	$	227,139	$	201,000	$	301,500

During the nine months ended June 30, 2011, 69,802 stock options were granted with prices ranging from $5.53 to $7.32 per share with a value of $113,058, of which $67,307 vested when granted.  Of the options granted, 30,000 of the options cannot be exercised until 2012, therefore, the stock-based compensation expense of $45,751 will be recognized in 2012.  Additionally, 6,051 previously granted options vested this period.  During the nine months ended June 30, 2011, 28,357 of the stock options granted were immediately exercisable and 41,445 of previously granted stock options became exercisable. Therefore, stock-based compensation expense of $73,358 was recognized during the nine months ended June 30, 2011.  Of the options exercised in the nine-month period, 20,000 had an exercise price of $2.00 per share with $40,000 paid in cash.  The remaining 420,645 options exercised had a weighted average exercise price of $2.94 per share with $1,235,368 paid through a reduction in the number of shares of common stock issued by 241,011 shares and $11 paid in cash.  During the nine months ended June 30, 2011, 26,471 unvested options were cancelled, with a weighted average exercise price of $2.13.  Additionally, during the nine months ended June 30, 2011, 423,000 shares of restricted stock were issued, of which 25,000 shares were vested with a compensation expense of $100,500 and 398,000 shares were unvested with deferred compensation values of $1,600,760.  The stock compensation expense for these shares issued within the nine months ended June 30, 2011 will be recognized when the shares vest in fiscal years 2012 through 2016 according to the following schedule:

Restricted Stock Vesting Schedule
Year of Vesting	2012		2013		2014		2015		2016
Compensation Value	$	450,661	$	420,460	$	227,139	$	201,000	$	301,500

Also, 58,224 shares of unrestricted common stock were granted as compensation, with a total cost of $273,468.  Of those shares, 51,783 were director compensation which will be expensed over the time period of March, 2011 through January, 2012. For the nine months ended June 30, 2011, total stock-based compensation charged to operations amounted to $497,055.

At June 30, 2011, there was approximately $249,601 of total unrecognized compensation expense related to non-exercisable option-based compensation arrangements under the 2010 Stock Incentive Plan.