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Equity (Tables)

3 Months Ended

Dec. 31, 2013

The following table summarizes stock option activity under the Equity Plans for the three months ended December 31, 2013:



	Number of Shares		Weighted Average Exercise Price	Weighted Average Remaining Contractual Life (in years)	Aggregate Intrinsic Value (*) (in thousands)
Outstanding as of September 30, 2013	1,745,948		$17.78
Granted	3,875		$5.09
Exercised	(1,301	)	$4.31		$	1
Forfeited	(4,564	)	$6.27
Expired	(37,280	)	$20.58
Outstanding as of December 31, 2013	1,706,678		$17.73	4.04
Exercisable as of December 31, 2013	1,524,835		$19.26	3.53	$	151
Vested and expected to vest as of December 31, 2013	1,675,945		$17.97	3.95	$	266

(*) 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. For the three months ended December 31, 2012, the intrinsic value of options exercised was $1,000.

Schedule of Valuation Assumptions

The fair value of each stock option grant was estimated on the date of grant using the Black-Scholes option valuation model, adhering to the straight-line attribution approach using the following weighted-average assumptions, of which the expected term and stock price volatility rate are highly subjective:



	For the Three Months Ended December 31,
	2013		2012
Black-Scholes weighted average assumptions:
Expected dividend rate	—	%	—		%
Expected stock price volatility rate	95.7	%	97.1		%
Risk-free interest rate	1.7	%	0.9		%
Expected term (in years)	6.0		6.0

Weighted average grant date fair value per share of stock options granted:	$3.92		$	3.65

Schedule of Restricted Stock Activity

The following table summarizes the activity related to RSAs and RSUs:



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, 2013	99,561		$5.84	854,928		$4.51
Granted	—		—	60,000		$4.95
Vested	—		$—	(152,300	)	$3.96
Forfeited	(1,227	)	$5.68	(23,419	)	$4.41
Non-vested as of December 31, 2013	98,334		$5.85	739,209		$4.66

Schedule of Stock-based Compensation Expense - By Award Type

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



Stock-based Compensation Expense - by award type	For the Three Months Ended December 31,
(in thousands)	2013		2012
Employee stock options	$	67	$	258
Restricted stock awards and units	678		406
Employee stock purchase plan	120		131
401(k) match in common stock	160		256
Outside director fees in common stock	110		31
Total stock-based compensation expense	$	1,135	$	1,082

Schedule Stock-based Compensation Expense - By Expense Type



Stock-based Compensation Expense - by expense type	For the Three Months Ended December 31,
(in thousands)	2013		2012
Cost of revenue	$	217	$	315
Selling, general, and administrative	641		382
Research and development	277		385
Total stock-based compensation expense	$	1,135	$	1,082

Schedule of Earnings Per Share, Basic and Diluted

Income (Loss) Per Share.

The following table sets forth the computation of basic and diluted net income (loss) per share:



Basic and Diluted Net Income (Loss) Per Share	For the three months ended December 31,
(in thousands, except per share)	2013			2012

Numerator - Net income (loss)	$	(2,054	)	$	2,826
Less: Undistributed earnings allocated to participating securities	—			(23		)
Undistributed earnings allocated to common shareholders for basic net income (loss) per share	$	(2,054	)	$	2,803
Undistributed earnings allocated to common shareholders for diluted net income (loss) per share	$	(2,054	)	$	2,803
Denominator:
Denominator for basic net income (loss) per share - weighted average shares outstanding	29,938			25,977
Dilutive options outstanding, unvested stock units and ESPP	—			259
Denominator for diluted net income (loss) per share - adjusted weighted average shares outstanding	29,938			26,236
Basic net income (loss) per share	$	(0.07	)	$	0.11
Diluted net income (loss) per share	$	(0.07	)	$	0.11
Weighted average antidilutive options, unvested restricted stock units and awards, warrants and ESPP shares excluded from the computation	3,049			2,913
Average market price of common stock	$	5.04		$	4.68

Schedule of Common Stock Reserved for Future Issuances

As of December 31, 2013, we had common stock reserved for the following future issuances:



Future Issuances	Number of Common Stock Shares Available for Future Issuances
Exercise of outstanding stock options	1,706,678
Unvested restricted stock units	739,209
Purchases under the employee stock purchase plan	433,958
Issuance of stock-based awards under the Equity Plans	576,834
Exercise of outstanding warrants	400,001
Purchases under the officer and director share purchase plan	88,741
Total reserved	3,945,421

- Definition

Tabular disclosure of components of a stock option or other award plan under which equity-based compensation is awarded to employees, typically comprised of the amount of unearned compensation (deferred compensation cost), compensation expense, and changes in the quantity and fair value of the shares (or other type of equity) granted, exercised, forfeited, and issued and outstanding pertaining to that plan. Disclosure may also include nature and general terms of such arrangements that existed during the period and potential effects of those arrangements on shareholders, effect of compensation cost arising from equity-based payment arrangements on the income statement, method of estimating the fair value of the goods or services received, or the fair value of the equity instruments granted, during the period, cash flow effects resulting from equity-based payment arrangements and, for registrants that accelerate vesting of out of the money share options, reasons for the decision to accelerate.

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