Equity

3 Months Ended

Dec. 31, 2011

Equity [Abstract]

Equity [Text Block]

Equity

We provide long-term incentives to eligible officers, directors, and employees in the form of stock-based awards.  We maintain two equity incentive compensation plans: the 2000 Stock Option Plan, or the 2000 Plan, and the 2010 Equity Incentive Plan, or the 2010 Equity Plan and, together with the 2000 Plan, the Stock Plans. We have also proposed for shareholder approval at our Annual Meeting to be held on March 9, 2012, a 2012 Equity Incentive Plan,which is described in our proxy statement filed with the SEC on January 27, 2012. The 2000 Plan expired in February 2010 and no additional shares are available for grant under this plan. We issue new shares of common stock to satisfy awards issued under our Stock Plans. The total number of stock-based awards that may be granted under the 2010 Equity Plan is 7,000,000 stock-based awards.

Stock Options

Most of our stock options vest and become exercisable over four to five years and have a contractual life of ten years. Certain stock options awarded are intended to qualify as incentive stock options pursuant to Section 422A of the Internal Revenue Code.

The following tables summarize the activity related to stock options under the Stock Plans:

Stock Option Activity	Number of Shares		Weighted Average Exercise Price	Weighted Average Remaining Contractual Life (in years)
Outstanding as of September 30, 2011	9,036,788		$4.44	6.43
Granted	20,250		$1.00
Exercised	—		—
Forfeited	(114,475	)	$2.61
Cancelled	(75,299	)	$3.81
Outstanding as of December 31, 2011	8,867,264		$4.46	6.11
Exercisable as of December 31, 2011	6,024,783		$5.24	5.36
Vested and expected to vest as of December 31, 2011	8,527,526		$4.56	6.03

As of December 31, 2011, there was approximately $3.1 million of unrecognized stock-based compensation expense, net of estimated forfeitures, related to non-vested stock options granted under the Stock Plans which is expected to be recognized over an estimated weighted average life of 1.9 years.

Intrinsic value for stock options represents the “in-the-money” portion or the positive variance between a stock option's exercise price and the underlying stock price. There were no stock options exercised during the three months ended December 31, 2011. The intrinsic value related to fully vested and expected to vest stock options as of December 31, 2011 was approximately $5,300. The intrinsic value related to exercisable stock options as of December 31, 2011 was approximately $2,700.

Restricted Stock

Restricted stock awards (RSAs) and restricted stock units (RSUs) granted under the 2010 Equity Plan typically vest over three years and are subject to forfeiture if employment terminates prior to the lapse of the restrictions. RSAs are considered issued and outstanding shares on the grant date and have the same dividend and voting rights as other common stock. RSUs are not considered issued or outstanding common stock. There were no vested RSAs or RSUs as of December 31, 2011.

The following table summarizes the activity related to RSAs and RSUs under the 2010 Equity Plan:

Restricted Stock Activity	Restricted Stock Awards			Restricted Stock Units
	Number of Shares		Weighted Average Grant Date Fair Value	Number of Shares		Weighted Average Grant Date Fair Value
Non-vested as of September 30, 2011	1,642,600		$1.45	1,232,190		$1.55
Granted	—		—	2,919,465		$0.96
Vested	—		—	—		—
Cancelled	(48,600	)	$1.42	(59,650	)	$1.34
Non-vested as of December 31, 2011	1,594,000		$1.45	4,092,005		$1.53

Restricted stock awards: As of December 31, 2011, there was approximately $1.3 million of remaining unamortized stock-based compensation expense, net of estimated forfeitures, associated with RSAs, which will be expensed over a weighted average remaining service period of approximately 2.0 years.

Restricted stock units: As of December 31, 2011, there was approximately $3.5 million of remaining unamortized stock-based compensation expense, net of estimated forfeitures, associated with RSUs, which will be expensed over a weighted average remaining service period of approximately 2.8 years. Of the 4.1 million outstanding non-vested RSUs, approximately 3.5 million RSUs are expected to vest and have an aggregate intrinsic value of approximately $3.0 million and a weighted average remaining contractual term of 1.4 years. The 4.1 million outstanding non-vested RSUs have an aggregate intrinsic value of approximately $3.5 million and a weighted average remaining contractual term of 1.5 years.

Stock Option Valuation Assumptions

The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option valuation model and the straight-line attribution approach using the following weighted-average assumptions. The option-pricing model requires the input of highly subjective assumptions, including the option's expected life and the price volatility of the underlying stock. The weighted-average grant date fair value of stock options granted during the three months ended December 31, 2011 and 2010 was $0.77 and $0.76, respectively.

Black-Scholes Weighted Average Assumptions	For the Three Months Ended December 31,
	2011		2010
Expected dividend yield	—	%	—	%
Expected stock price volatility	106.1	%	98.1	%
Risk-free interest rate	0.9	%	1.3	%
Expected term (in years)	5.0		4.9

Stock-based compensation

The effect of recording stock-based compensation expense was as follows:

Stock-based Compensation Expense (in thousands, except per share data)	For the Three Months Ended December 31,
	2011			2010
Stock-based compensation expense by award type:
Employee stock options	$	1,047		$	682
Restricted stock awards and units	575			—
Employee stock purchase plan	224			135
401(k) match in common stock	230			233
Outside director fees	104			72
Total stock-based compensation expense	$	2,180		$	1,122
Stock-based compensation expense by expense category:
Cost of revenue	$	476		$	216
Selling, general, and administrative	1,013			631
Research and development	691			275
Total stock-based compensation expense	$	2,180		$	1,122
Net effect on net loss per basic and diluted share	$	(0.02	)	$	(0.01	)

Loss Per Share. Our loss per share amounts were calculated by dividing net loss applicable to common stock by the weighted average number of common stock shares outstanding for the period and it is presented in the accompanying condensed consolidated statements of operations and comprehensive loss. For the three months ended December 31, 2011 and 2010, stock options representing 8,867,264 and 9,154,082 shares of common stock, respectively, and warrants representing 3,000,003 shares of common stock were excluded from the computation of diluted earnings per share since we incurred a net loss for these periods and any effect would have been anti-dilutive.

Future Issuances

As of December 31, 2011, we had common stock reserved for the following future issuances:

Future Issuances	Number of Common Stock Shares Available for Future Issuances
For future exercise of outstanding stock options	8,867,264
For future issuances to employees under the employee stock purchase plan	2,120,760
For future stock-based awards under the 2010 Equity Plan	376,345
For future exercise of warrants	3,000,003
For future issuance under the officer and director share purchase plan	428,883
Total reserved	14,793,255

Reverse Stock Split

See Footnote 16 - Subsequent Event for disclosures related to our recently announced reverse stock split.