Shareholders' Equity

12 Months Ended

Jan. 28, 2012

SHAREHOLDERS’ EQUITY [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

SHAREHOLDERS’ EQUITY

PREFERRED STOCK

The Company’s Articles of Incorporation authorize the issuance of up to 1,000,000 shares of preferred stock. The preferred stock may be issued from time to time at the discretion of the Board of Directors without shareholders’ approval. The Board of Directors is authorized to issue these shares in different series and, with respect to each series, to determine the dividend rate, and provisions regarding redemption, conversion, liquidation preference and other rights and privileges. As of January 28, 2012, no preferred stock had been issued.

TREASURY STOCK

From time to time, the Company’s Board of Directors has approved the repurchase of the Company’s common stock. As of January 28, 2012, the Company had repurchased 898,249 shares of common stock for approximately $8.6 million, all of which are held as treasury shares. There were no repurchases during fiscal 2011 or fiscal 2010.

WARRANTS

In connection with the Company's merger with a predecessor company on August 11, 2008, the Company issued warrants (the “Warrants”) to purchase an additional 1,500,000 shares of our common stock with an exercise price per share of $23.94. The Warrants became exercisable effective August 11, 2011 and will be exercisable until August 11, 2018. The fair value of these Warrants at the date of issuance was $26.5 million, which was recorded as a reduction of retained earnings (accumulated deficit) and an increase to additional paid-in capital within the consolidated statement of shareholders’ equity in fiscal 2008.

STOCK OPTION PLANS

The 2010 Equity Incentive Plan (the “2010 Plan”) provides for equity-based awards to the Company’s employees, directors and consultants. Under the 2010 Plan, the Company initially reserved 1,000,000 shares of common stock for issuance. This number automatically increases on the first trading day of each fiscal year, beginning with fiscal 2011, by an amount equal to 1 ¹/2% of the shares of common stock outstanding as of the last trading day of the immediately preceding fiscal year; accordingly, 1,134,500 shares of common stock were reserved for issuance as of January 28, 2012. The Company previously had two stock option plans which expired on October 31, 2010. No equity awards have been granted after this date under these plans, although all options previously granted and outstanding will remain outstanding until they are either exercised or forfeited or they expire. As of January 28, 2012, 30,000 stock options have been granted to the Independent Board Members pursuant to the 2010 Plan. A summary of the Company’s option activity, and related information for the fiscal year ended January 28, 2012 is as follows:

	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life in Years	Aggregate Intrinsic Value
						(in thousands)
Outstanding as of January 29, 2011	205,626		$	9.84
Granted	15,000		9.82
Exercised	(3,267	)	4.79
Forfeited	(622	)	3.52
Outstanding as of January 28, 2012	216,737		$	9.93	5.5	$	393
Vested as of January 28, 2012	216,737		$	9.93	5.5	$	393
Exercisable as of January 28, 2012	104,234		$	6.05	7.5	$	393

The fair value for stock options issued during fiscal 2011 was estimated at the date of grant, using the Black-Scholes option pricing model with the following weighted average assumptions:

	Fiscal Year Ended January 28, 2012
Expected life (years)	5
Expected stock price volatility	121.0%
Risk-free interest rates	0.8%
Expected dividend yield	0%

The expected life of the options represents the estimated period of time until exercise and is based on historical experience of similar awards, giving consideration to the contractual terms, vesting schedules and expectations of future employee behavior. The expected stock price volatility is estimated using the historical volatility of the Company’s stock. The risk-free interest rate is based on the implied yield available on U.S. Treasury zero coupon issues with a term equal to the option’s expected life. The Company has not paid dividends in the past and does not intend to in the foreseeable future.

The weighted average estimated fair values of options granted during fiscal years 2011 and 2010 were $8.12 and $7.47 per share, respectively. The fair value of options that vested during fiscal years 2011 and, 2010 was approximately $142,000 and $139,000, respectively. As of January 28, 2012, there was no unrecognized compensation expense related to stock options that will vest and be recognized in fiscal 2012. The aggregate intrinsic value of options exercised during fiscal 2011 and 2010 was $32,000 and $2,000, respectively. Cash received from option exercises during fiscal 2011 was $16,000.

See consolidated statements of shareholders’ equity in these financial statements for activity in shareholders’ equity accounts.