Stock Based Compensation

6 Months Ended

Mar. 31, 2012

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 is estimated at the date of grant using the Black-Scholes option pricing model. The weighted average assumptions for grants during the six months ended March 31, 2012 and 2011 used in the Black-Scholes option pricing model were as follows:

	Six Months Ended			Six Months Ended
	March 31, 2012			March 31, 2011
Expected term in years		5 years			3 years
Risk-free interest rate		2.64	%		3.95	%
Expected volatility		93.62	%		85.21	%
Expected dividend yield		0.00	%		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. The dividend yield is expected to be 0.00% because historically the Company has not paid dividends on common stock.

During the three months ended March 31, 2012, 43,960 stock options were granted at the exercise price of $3.03 per share. These options were granted as Directors’ Compensation for the twelve months ending January 31, 2013 and were fully exercisable when granted, and expire five years from the grant date. The stock-based compensation expense of $58,876 will be recognized over the requisite service period. During the three months ended March 31, 2012, 138,373 options were exercised at an exercise price of $1.58 per share in a cashless exercise, resulting in 41,205 common shares issued. During the three months ended March 31, 2012, 20,000 stock options were cancelled with an exercise price of $1.66.

During the three months ended March 31, 2012 and 2011, 500 and 0 shares of restricted stock vested with the value of $2,430 and $0, respectively. During the six months ended March 31, 2012 and 2011, 38,000 and 2,500 shares of restricted stock vested with the value of $152,505 and $9,375, respectively.

Stock Compensation Expense for the three months ended March 31, 2012 and 2011 is as follows:

	Three Months Ended		Three Months Ended
Stock Compensation Expense	March 31, 2012		March 31, 2011
Stock Grants		48,760		70,862
Restricted Stock Grants		157,426		-0-
Option Grants		66,866		14,529
Employee Stock Purchase Plan		32,268		-0-
Total	$	305,320	$	85,391

During the six months ended March 31, 2012, 43,960 stock options were granted at an exercise price of $3.03 per share. These options were granted as Directors’ Compensation for the twelve months ending January 31, 2013 and were fully exercisable when granted, and expire five years from the grant date. The stock-based compensation expense of $58,876 will be recognized over the requisite service period. During the six months ended March 31, 2012, 138,373 options were exercised at an exercise price of $1.58 per share in a cashless exercise, resulting in 41,205 common shares issued. During the six months ended March 31, 2012, 10,000 unvested stock options were cancelled with an exercise price of $5.65and 20,000 vested stock options were cancelled with an exercise price of $1.66.

Stock Compensation Expense for the six months ended March 31, 2012 and 2011 is as follows:

	Six Months Ended		Six Months Ended
Stock Compensation Expense	March 31, 2012		March 31, 2011
Stock Grants		109,041		132,251
Restricted Stock Grants		305,751		7,625
Option Grants		131,469		167,089
Employee Stock Purchase Plan		32,268		-0-
Total	$	578,529	$	306,965

At March 31, 2012, there was $232,710 in unrecognized stock compensation expense based on 396,213 unvested options to purchase common stock and $1,310,259 in unrecognized stock compensation expense based on 326,138 shares of unvested restricted stock. At March 31, 2011, there was $300,603 in unrecognized stock compensation expense based on 579,861 unvested options to purchase common stock and $28,211 in unrecognized stock compensation expense based on 6,708 shares of unvested restricted stock.

A summary of restricted stock activity for the six months ended March 31, 2012 and 2011 is presented below:

Restricted Stock Activity for the  Six Months ended March 31, 2012	Shares		Weighted-Average Grant-Date Fair Value
Nonvested at September 30, 2011		403,000	$	4.02
Granted		-0-		-0-
Vested		38,000	$	4.01
Cancelled		-0-		-0-
Nonvested at March 31, 2012		365,000	$	4.02

Restricted Stock Activity for the Six Months ended March 31, 2011	Shares		Weighted-Average Grant-Date Fair Value
Nonvested at September 30, 2010		7,500	$	3.75
Granted		3,000	$	4.95
Vested		2,500	$	3.75
Cancelled		-0-		-0-
Nonvested at March 31, 2011		8,000	$	4.20