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Note 10 - Share-based Compensation | 6 Months Ended
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Mar. 31, 2015
Notes to Financial Statements |
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | 10 . SHARE-BASED COMPENSATION Stock Option Plans At March 31, 2015, the Company had two equity incentive plans. The 2005 Equity Incentive Plan (“2005 Equity Plan”) was terminated with respect to new grants in March 2015, but remains in effect for grants issued prior to that time. The 2015 Equity Incentive Plan (“2015 Equity Plan”) was approved by the Company’s Board of Directors on January 19, 2015 and by the Company’s stockholders on March 18, 2015. The 2015 Equity Plan authorizes for issuance as stock options, restricted stock, stock appreciation rights, restricted stock units and performance awards, an aggregate of 5,000,000 new shares of common stock to employees, directors, advisors or consultants. At March 31, 2015, there were options outstanding covering 2,992,535 and 80,000 shares of common stock under the 2005 Equity Plan and 2015 Equity Plan, respectively. Stock Option Activity The following table summarizes information about stock option activity during the six months ended March 31, 2015:
|  | Number |  |  | Weighted Average |
|  | of Shares |  |  | Exercise Price |
Outstanding October 1, 2014 |  |  | 2,530,535 |  |  | $ | 2.09 |
Granted |  |  | 664,500 |  |  | $ | 2.77 |
Forfeited/expired |  |  | (38,833 | ) |  | $ | 2.48 |
Exercised |  |  | (83,667 | ) |  | $ | 2.39 |
Outstanding March 31, 2015 |  |  | 3,072,535 |  |  | $ | 2.25 |
Exercisable March 31, 2015 |  |  | 2,430,233 |  |  | $ | 2.23 |
Options outstanding are exercisable at prices ranging from $0.93 to $3.17 and expire over the period from 2015 to 2023 with an average life of 5.8 years. The aggregate intrinsic value of options outstanding and exercisable at March 31, 2015 was $1,101,327 and $926,323, respectively. Share-Based Compensation The Company recorded share-based compensation expense and classified it in the condensed consolidated statements of income as follows:
|  | Three months ended |  |  | Six months ended |
|  | March 31, |  |  | March 31, |
|  | 2015 |  |  | 2014 |  |  | 2015 |  |  | 2014 |
Cost of revenue |  | $ | 6,851 |  |  | $ | 4,409 |  |  | $ | 11,671 |  |  | $ | 6,467 |
Selling, general and administrative |  |  | 125,224 |  |  |  | 163,385 |  |  |  | 230,446 |  |  |  | 294,561 |
Research and development |  |  | 45,332 |  |  |  | 23,814 |  |  |  | 66,737 |  |  |  | 40,394 |
Total |  | $ | 177,407 |  |  | $ | 191,608 |  |  | $ | 308,854 |  |  | $ | 341,422 |
The employee stock options granted in the six months ended March 31, 2015 and 2014 had a weighted-average estimated fair value of $1.13 per share and $0.85 per share, respectively, using the Black-Scholes option pricing model with the following weighted-average assumptions (annualized percentages):
|  | Six months ended |
|  | March 31, |
|  | 2015 |  |  | 2014 |
Volatility |  | 51.0% | - | 62.0% |  |  | 54.0% | - | 76.0% |
Risk-free interest rate |  | 1.0% | - | 1.6% |  |  | 0.6% | - | 2.0% |
Forfeiture rate |  |  | 10.0% |  |  |  |  | 10.0% |  |
Dividend yield |  |  | 0.0% |  |  |  |  | 0.0% |  |
Expected life in years |  | 3.2 | - | 4.6 |  |  | 3.2 |  | 6.5 |
The Company has never paid cash dividends and has no present intention to pay cash dividends. Expected volatility is based on the historical volatility of the Company’s common stock over the period commensurate with the expected life of the options. The risk-free interest rate is based on rates published by the Federal Reserve Board. The expected life is based on observed and expected time to post-vesting exercise. The expected forfeiture rate is based on past experience and employee retention data. Forfeitures are estimated at the time of the grant and revised in subsequent periods if actual forfeitures differ from those estimates or if the Company updates its estimated forfeiture rate. Such amounts will be recorded as a cumulative adjustment in the period in which the estimate is changed. Since the Company has an NOL carryforward as of March 31, 2015, no excess tax benefit for the tax deductions related to share-based awards was recognized for the six months ended March 31, 2015 and 2014. As of March 31, 2015, there was approximately $800,000 of total unrecognized compensation cost related to non-vested share-based employee compensation arrangements. The cost is expected to be recognized over a weighted-average period of 1.6 years.

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- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6406099&loc=d3e25284-112666 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 40 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6418621&loc=d3e17540-113929 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 14 + Details
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