2. STOCK-BASED COMPENSATION

12 Months Ended

Jun. 30, 2013

Equity [Abstract]

STOCK-BASED COMPENSATION

The Company has several employee stock option and officer and director stock option plans that have been approved by the shareholders of the Company. The plans require that options be granted at a price not less than market on date of grant.

The Company uses the Black-Scholes option pricing model to estimate fair value of stock-based awards.

Assumptions for awards of options granted during the years ended June 30, 2013 and 2012 were:

	Awards Granted in the Years Ended
		June 30, 2013			June 30, 2012
Dividend yield		0	%		0	%
Expected volatility		62	%		62	%
Weighted-average volatility		62	%		62	%
Risk-free interest rate		2	%		2	%
Expected life of options (in years)		2.5			3.75
Weighted average grant-date Black Scholes calculated fair value	$	0.20		$	0.31

The following table summarizes the Company’s stock option activity during fiscal year 2013:

						Weighted  Average
				Weighted Average		Remaining		Aggregate			Aggregate
	Number of			Exercise Price		Contractual		Fair			Instrinsic
	Shares			Per Share		Term (1)		Value (3)			Value (2)
Outstanding July 1, 2012		674,100		$	0.80		4.58	$	217,100		$	—
Granted		425,000			0.50		5.00		84,800			—
Exercised		—			—		—		—			—
Forfeited, expired or cancelled		(15,000	)		1.83		—		(5,800	)		—
Outstanding June 30, 2013		1,084,100		$	0.67		4.18	$	296,100		$	—
Exercisable June 30, 2013		1,084,100		$	0.67		4.18	$	296,100		$	—

(1) Remaining contractual term presented in years. 

(2) The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the closing price of the Company's common stock as of June 30, 2013, for those awards that have an exercise price currently below the closing price as of June 30, 2013 of $0.44.

(3) Aggregate Fair Value is calculated using the Black Scholes option pricing model to estimate fair value of stock-based compensation.

The Black Scholes value of the 425,000 options granted during the fiscal year ended June 30, 2013 was $84,800 of which all has been recognized as the options vested immediately upon grant. As of June 30, 2013, the Company has no unrecognized stock-based compensation expense. Also expensed during fiscal 2013, was $153,800 of Black Scholes value related to the vesting during the year of 571,500 options granted in fiscal 2012.

As of June 30, 2013, the Company had 95,100 warrants outstanding with a weighted average exercise price of $2.64. The outstanding warrants expired on July 9, 2013. The following table summarizes the Company’s warrant activity during the year ended June 30, 2013:

				Weighted
		Number of		Average
		Shares		Exercise Price
Warrants Outstanding, June 30, 2012		150,400	$	6.24
	Granted	-		-
	Exercised	-		-
	Canceled/Expired	(55,300)		12.44
Warrants Outstanding, June 30, 2013		95,100	$	2.64