Share-Based Compensation

12 Months Ended

Sep. 30, 2011

Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract]

Share-Based Compensation

5.         Share-Based Compensation

The Company issues options to purchase common stock to its employees, certain consultants, and certain of its board members. Options are generally granted with an exercise price equal to the closing market value of a common share at the date of grant, have five- to ten-year terms and typically vest over periods ranging from immediately to three years from the date of grant. There are 1,075,000 authorized shares remaining for granting of future options.

The estimated fair value of equity-based awards, less expected forfeitures, is amortized over the award's vesting period on a straight-line basis. Share-based compensation expense recognized in the statements of operations for fiscal years ended September 30, 2011 and 2010 related to common stock options was $ 25,300 ($0.55 per share) and $49,600 ($0.73 per share), respectively. The Company did not record income tax benefits related to the equity-based compensation expense as deferred tax assets are fully offset by a valuation allowance.

A summary of nonvested shares at September 30, 2011 and changes during the fiscal year then ended follows:

		Shares	Weighted Average Grant Date Fair Value
Nonvested shares at October 1, 2010		56,250	$1.01
	Granted	90,000	$0.66
	Vested	(68,750)	$0.66
	Forfeited/Expired	(52,500)	$0.89
Nonvested shares at September 30, 2011		25,000	$0.56

A summary of changes in common stock options outstanding under the equity-based compensation plans for the fiscal years ended September 30, 2011 and 2010 follows:

		Common Stock Options	Weighted Average Exercise Price	Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value
Outstanding at September 30, 2009		354,500	$1.250	3.38	$32,400
	Granted	90,000	$1.376
	Exercised	(5,000)	$0.60		$3,000
	Forfeited/Expired	(76,000)	$1.458
Outstanding at September 30, 2010		363,500	$1.246	3.97	$13,900
	Granted	90,000	$1.376
	Exercised	–	–
	Forfeited/Expired	(167,500)	$1.123
Outstanding at September 30, 2011		286,000	$1.134	3.48	$13,900
Exercisable at September 30, 2011		261,000	$1.168	2.89	­
Exercisable at September 30, 2010		307,250	$1.293	3.06	$11,900

The weighted average fair value of options granted during the fiscal years ended September 30, 2011 and 2010 was $0.66 and $1.03, respectively. As of September 30, 2011, there was $11,500 of total unrecognized compensation cost related to nonvested options granted under the plans. The cost is expected to be recognized over the next three years. The total fair value of options vested during the fiscal years ended September 30, 2011 and 2010 was $25,300 and $49,600, respectively.