Share-Based Compensation

9 Months Ended

Mar. 31, 2012

Share-Based Compensation [Abstract]

Share-Based Compensation

3. Share-Based Compensation

Share-based compensation by category is as follows (in thousands):

	Three Months Ended				Nine Months Ended
	March 31,				March 31,
	2012		2011		2012		2011
SG&A	$	62	$	25	$	176	$	75
Product development		5		4		26		13
Cost of revenues		10		3		14		8
Share-based compensation expense	$	77	$	32	$	216	$	96

The company computed the estimated fair values of all share-based compensation using the Black-Scholes option pricing model and the assumptions set forth in the following table. The company based its estimate of the life of these options on historical averages over the past five years and estimates of expected future behavior. The expected volatility was based on the company's historical stock volatility. The assumptions used in the company's Black-Scholes calculations for fiscal 2012 and 2011 are as follows:

	Risk Free Interest Rate			Dividend Yield			Volatility Factor			Weighted Average Expected Option Life (Months)
Fiscal year 2012		1.5	%		0	%		114	%		48
Fiscal year 2011		1.8	%		0	%		107	%		48

The Black-Scholes option-pricing model requires the input of highly subjective assumptions. Because the company's employee stock options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management's opinion, the existing models may not provide a reliable single measure of the fair value of share-based compensation for employee stock options. Management will continue to assess the assumptions and methodologies used to calculate estimated fair value of share-based compensation as circumstances change and additional data becomes available over time, which may result in changes to these assumptions and methodologies. Such changes could materially impact the company's fair value determination.

On August 23, 2011, the stockholders approved the 2011 Omnibus Equity Incentive Plan (the 2011 Plan). The 2011 Plan replaces the 2010 Employee Stock Option Plan and the 2001 Non-Executive Director Stock Option Plan. The 2011 Plan provides for the issuance of up to 6,700,000 shares of the company's common stock in connection with stock options, restricted share awards and other stock compensation vehicles.

Stock option activity under the company's stock option plans for employees and non-executive directors for the period ended March 31, 2012 is as follows (in thousands, except per share and average life data):

Employees Information	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value
Outstanding, June 30, 2011		3,944		$	2.28		7.38
Granted		484			0.79
Exercised		(4	)		0.60
Expired/forfeited		(205	)		1.18
Outstanding, March 31, 2012		4,219		$	2.16		6.91	$	179
Exercisable at March 31, 2012		1,861		$	3.48		4.74	$	55
Expected to vest at March 31, 2012		1,893		$	1.12		8.63	$	100

Non-Executive Director Information	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value
Outstanding, June 30, 2011		500		$	2.18		4.15
Granted		70			0.86
Expired		(5	)		2.03
Outstanding, March 31, 2012		565		$	2.02		4.14	$	13

Non-executive director options are granted at market price and vest on the grant date.

As of March 31, 2012, there was approximately $1,105,000 of total unrecognized compensation expense related to unvested share-based compensation arrangements. Approximately $432,000 of this expense is expected to be recognized over a weighted-average period of 20 months. The remaining expense will be recognized if certain vesting conditions are met during the next 6 months.

The total intrinsic value of options exercised was $1,400 and $0 for the nine month periods ended March 31, 2012 and 2011, respectively. The weighted average grant date fair value of options granted during the nine month periods ended March 31, 2012 and 2011 was approximately $0.60 and $0.34, respectively. These values were calculated using the Black-Scholes option-pricing model.

The total fair value of options vested was $86,000 and $133,000 for the nine month periods ended March 31, 2012 and 2011, respectively.

Under the 2011 Plan, the company's non-employee directors continue to have the option to elect to receive up to 100% of their cash director compensation, including amounts payable for committee service, service as a committee chair and per meeting fees, in restricted shares of our common stock issued at fair value in accordance with the terms of the 2011 Plan. During the nine months ended March 31, 2012, the company issued 99,424 shares of restricted common stock (valued at approximately $85,479) to certain non-executive directors in connection with this program. In April 2012, the company issued 47,003 shares of restricted common stock (valued at approximately $34,313) to such directors under the program.