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NOTE 9 - LONG-TERM INCENTIVE PLAN AWARDS
 9 Months Ended
Mar. 31, 2012
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]
NOTE 9 – LONG-TERM INCENTIVE PLAN AWARDS

As we adopted the 2009 Stock Incentive Plan (“2009 Plan”), we provided for the grant of incentive stock options and non-qualified stock options to our employees and directors on June 11, 2009.

We issued additional options in 2010 under the 2009 Plan.  The options granted in 2010 generally vest and become exercisable at the rate of between 33% and 100% per year with a life of ten years.  For the nine months ended March 31, 2012, we did not issue any options under the plan.

We adopted ASC 718, “Compensation – Stock Compensation,” using a modified prospective application, and the Black-Scholes model. Under this application, we are required to record compensation expense for all awards granted after the date of adoption and for the unvested portion of previously granted awards that remain outstanding at the date of adoption. Compensation costs will be recognized over the period that an employee provides service in exchange for the award.

The estimated forfeiture rate considers historical turnover rates stratified into employee pools in comparison with an overall employee turnover rate, as well as expectations about the future. We periodically revise the estimated forfeiture rate in subsequent periods if actual forfeitures differ from those estimates. Compensation expense recorded under this method for the three and nine months ended March 31, 2012 was $65,545 and $167,084, respectively, and reduced operating income and income before income taxes by the same amount by increasing compensation expense recognized in selling and administrative expense. The recognized tax benefit related to the compensation expense for the three and nine months ended March 31, 2012 was $0.

A summary of the status of our stock options is presented below:

Options
 
Shares
   
Weighted-Average
Exercise
   
Weighted-Average
Remaining
Contractual Life
   
Aggregate
Intrinsic
 
                         
Outstanding at June 30, 2011
   
930,836
   
$
1.40
     
7.2
   
$
978,470
 
Granted
   
30,000
     
0.57
     
4.6 
     
38,400
 
Exercised
   
(70,000)
     
(0.52)
     
- 
     
- 
 
Forfeited or Expired
   
(14,334)
     
(1.35)
     
- 
     
- 
 
                                 
Outstanding at March 31, 2012
   
876,502
   
$
1.45
     
6.6
   
$
353,201
 
                                 
Exercisable at March 31, 2012
   
687,499
   
$
 1.38
     
6.3
   
$
324,099
 

The aggregate intrinsic value in the preceding table represents the total pretax intrinsic value, based upon the Company’s closing stock price of $1.85 as of March 31, 2012, which would have been received by the option holders had all option holders exercised their options as of that date. The weighted-average grant-date fair value of stock options of 876,502, which is outstanding at March 31, 2012, was $1.36 per share.

As of March 31, 2012, there was $186,596 of total unrecognized compensation cost related to non-vested stock options granted. That cost is expected to be recognized over a weighted-average period of 0.7 years.