STOCKHOLDERS' EQUITY

12 Months Ended

Feb. 28, 2012

Equity [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

NOTE 7 – STOCKHOLDERS' EQUITY

Equity Awards

     Under the Company's 2004 Incentive Stock Plan (the "2004 Plan"), which was adopted on July 30, 2004 and was amended effective July 30, 2009, various types of equity awards can be made, including stock options, stock appreciation rights, restricted stock, restricted stock units (RSUs), phantom stock and bonus stock. To date, stock options, restricted stock, RSUs and bonus stock have been granted under the 2004 Plan. Options are generally granted with exercise prices equal to market value on the date of grant. Substantially all option grants expire 10 years after the date of grant.

Equity awards to officers and other employees become exercisable on a vesting schedule established by the Compensation Committee of the Board of Directors at the time of grant, generally over a four-year period. The Company treats an equity award with multiple vesting tranches as a single award for expense attribution purposes and recognizes compensation cost on a straight-line basis over the requisite service period of the entire award.

The following table summarizes stock option activity for fiscal years 2012, 2011 and 2010 (options in thousands):

			Weighted
	Number of		Average
	Options		Exercise Price
Outstanding at February 28, 2009	1,869			8.20
Granted	320			1.48
Exercised	(1	)		1.32
Forfeited or expired	(165	)		24.39
Outstanding at February 28, 2010	2,023			5.82
Granted	186			2.34
Exercised	-			-
Forfeited or expired	(101	)		19.23
Outstanding at February 28, 2011	2,108			4.87
Granted	163			3.42
Exercised	(16	)		1.68
Forfeited or expired	(92	)		4.98
Outstanding at February 28, 2012	2,163		$	4.78
Exercisable at February 28, 2012	1,578		$	5.65

Changes in the Company's outstanding restricted stock shares and RSUs during fiscal years 2012, 2011 and 2010 were as follows (shares and RSUs in thousands):

			Weighted
	Number of		Average Grant
	Shares		Date Fair
	and RSUs		Value
Outstanding at February 28, 2009	907			2.50
Granted	1,147			1.81
Vested	(231	)		2.49
Forfeited	(39	)		2.26
Outstanding at February 28, 2010	1,784			2.06
Granted	863			2.34
Vested	(544	)		2.15
Forfeited	(58	)		1.78
Outstanding at February 28, 2011	2,045			2.16
Granted	762			3.59
Vested	(819	)		2.21
Forfeited	(59	)		1.99
Outstanding at February 28, 2012	1,929		$	2.71

   The Company retained 279,764, 169,854 and 71,293 of the vested restricted stock shares and RSUs to cover the required amount of employee withholding taxes in fiscal 2012, 2011 and 2010, respectively.

As of February 28, 2012, there were 717,041 award units in the 2004 Plan that were available for grant.

Under the 2004 Plan as amended, on the day of the annual stockholders meeting, each non-employee director receives an equity award of up to 20,000 award units. Equity awards granted to non-employee directors vest on the date of the next annual stockholders meeting or one year from the date of grant, whichever is earlier.

The fair value of options at date of grant was estimated using the Black-Scholes option pricing model with the following assumptions:

	Year Ended February 28,
Black-Scholes Valuation Assumptions	2012	2011	2010
Expected life (years) (1)	6	6	6
Expected volatility (2)	73%	74%	74%-79%
Risk-free interest rates (3)	1.9%	2.1%	2.0%-3.0%
Expected dividend yield	0%	0%	0%

(1)	The expected life of stock options is estimated based on historical experience.
(2)	The expected volatility is estimated based on historical volatility of the Company's stock price.
(3)	Based on the U.S. Treasury constant maturity interest rate whose term is consistent with the expected life of the stock options.

The weighted average fair value for stock options granted in fiscal years 2012, 2011 and 2010 was $2.22, $1.54, and $1.02, respectively.

The weighted average remaining contractual term and the aggregate intrinsic value of outstanding options as of February 28, 2012 was 5.4 years and $2,312,000, respectively. The weighted average remaining contractual term and the aggregate intrinsic value of exercisable options as of February 28, 2012 was 4.5 years and $1,297,000, respectively.

   Stock-based compensation expense for the years ended February 28, 2012, 2011 and 2010 is included in the following captions of the consolidated statements of operations (in thousands):

	Year Ended February 28,
	2012		2011		2010
Cost of revenues	$	100	$	151	$	164
Research and development		388		339		298
Selling		204		209		133
General and administrative		1,683		1,410		1,386
	$	2,375	$	2,109	$	1,981

     As of February 28, 2012, there was $4.4 million of total unrecognized stock-based compensation cost related to nonvested equity awards. That cost is expected to be recognized over a weighted-average remaining vesting period of  2.7 years.

Stock Warrants

In fiscal 2010, the Company issued a total of 500,000 common stock purchase warrants to the Subordinated Note holders at an exercise price of $4.02 per share, which represents a 20% premium to the average closing price of the Company's common stock for the 20 consecutive trading days prior to December 22, 2009. These warrants are exercisable until December 22, 2012.

In October 2009, the Company issued 20,000 common stock purchase warrants to a key supplier at an exercise price of $1.00 per share. These warrants became vested in April 2010 and are exercisable until October 6, 2012.