STOCK-BASED COMPENSATION

9 Months Ended

Jun. 30, 2013

STOCK-BASED COMPENSATION

The 2008 Stock Option Plan ("the Plan") is used to promote our long-term interests by providing a means of attracting and retaining officers, directors and key employees and aligning their interests with those of our shareholders. The Plan is described more fully in Note 10 in the Notes to the Consolidated Financial Statements in our Form 10-K/A for the year ended September 30, 2012. All options granted under the Plan had an exercise price equal to the market value of the underlying common shares on the date of grant. We expense the estimated fair value of stock options over the vesting periods of the grants. We recognize expense for awards subject to graded vesting using the straight-line attribution method, reduced for estimated forfeitures. Forfeitures are revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates and an adjustment is recognized at that time. The Compensation Committee may also issue non-qualified stock option grants with vesting periods different from the 2008 Plan. As of June 30, 2013, there are 125 shares outstanding that were granted outside of the Plan. The assumptions used are detailed in Note 10 to the Consolidated Financial Statements in our Form 10-K/A for the year ended September 30, 2012. Stock based compensation expense for the three and nine months ended June 30, 2013 was $52 and $187, respectively. Stock based compensation expense for the three and nine months ended June 30, 2012 was $46 and $119, respectively.

A summary of our stock option activity for the nine months ended June 30, 2013 is as follows (shares in thousands):

	Options (shares)			Weighted- Average Exercise Price		Weighted- Average Grant Date Fair Value

Outstanding - October 1, 2012		354		$	1.99	$	1.46
Exercised		(7	)		1.35		1.14
Granted		179			1.46		1.20
Terminated		(35	)		2.71		1.82
Outstanding - June 30, 2013		491		$	1.76	$	1.34

During the nine months ended June 30, 2013, we granted options for 179 common shares under the Plan. The fair value of each option grant is estimated on the date of the grant. The weighted-average assumptions used to compute the fair value of these options were as follows:

Risk-free interest rate			1.00% - 1.95%
Dividend yield			0.00%
Expected volatility			93.55% - 93.71%
Expected life of the options (years)			8.0
Forfeitures			3.00%

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

+ References+ Details