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Stock Options | 9 Months Ended
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Aug. 31, 2013
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] |
Stock Options | Note 4 - Stock Options The Company maintains the 2000 Stock Incentive Plan as amended (“the 2000 Plan”) that has reserved 2,250,000 shares of the Company’s common stock for issuance pursuant to stock options or restricted stock. Options issued under the 2000 Plan have a term ranging from five to seven years from the date of grant and have a vesting period ranging from immediately upon issuance to three years from the date of grant. The options are exercisable for a period of 90 days after termination. As of August 31, 2013 and November 30, 2012, there were 12,500 and 60,589 shares outstanding under the 2000 Plan, respectively. No further options will be issued under the 2000 Plan. The Company also maintains the 2006 Stock Incentive Plan (the “2006 Plan”). The 2006 Plan has reserved 1,000,000 shares of the Company’s common stock for issuance pursuant to stock options, restricted stock, stock-appreciation rights (commonly referred to as “SARs”), and other stock awards (i.e. performance shares and performance units). As of August 31, 2013 and November 30, 2012, there were 756,426 and 762,509 shares outstanding under the 2006 plan, respectively. As of August 31, 2013, there were 147,428 shares available for future issuance under the 2006 plan. The Company also maintains the 2012 Equity Incentive Plan (the “2012 Plan”) which became effective December 1, 2011 as approved by the Board of Directors and approved by the stockholders at the 2012 Annual Meeting on July 10, 2012. The 2012 Plan originally reserved 1,500,000 shares of the Company’s common stock for issuance pursuant to stock options, restricted stock, stock-appreciation rights (commonly referred to as “SARs”), and other stock awards (i.e. performance shares and performance units). In May 2012, the Board of Directors approved an amendment to the 2012 Plan to increase the number of shares of the Company’s common stock reserved for issuance under the 2012 Plan to 2,500,000 shares. As of August 31, 2013 and November 30, 2012, there were 1,000,000 performance options to purchase shares granted under the 2012 Plan and 1,500,000 shares available for future issuance. Service-based vesting condition options The fair value of each option award is estimated on the date of the grant using the Black-Scholes valuation model that uses the assumptions noted in the following table. Expected volatility is based on the historical volatility of the Company’s stock over the most recent period commensurate with the expected life of the Company’s stock options. The Company uses historical data to estimate option exercise and employee termination within the valuation model. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The expected term of options granted to employees is calculated, in accordance with the “simplified method” for “plain vanilla” stock options allowed under GAAP. Expected dividends are based on the historical trend of the Company not issuing dividends. Variables used to determine the fair value of the options granted for the three and nine months ended August 31, 2013 and August 31, 2012 are as follows:
|  | Three Months Ended |  |  | Nine Months Ended |
|  | August 31, 2013 |  |  | August 31, 2012 |  |  | August 31, 2013 |  |  | August 31, 2012 |
Weighted average values: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Expected dividends |  |  | 0 | % |  |  | 0 | % |  |  | 0 | % |  |  | 0 | %
Expected volatility |  |  | 108.75 | % |  |  | 115.76 | % |  |  | 110.46 | % |  |  | 112.50 | %
Risk free interest rate |  |  | 1.35 | % |  |  | .74 | % |  |  | 1.15 | % |  |  | .90 | %
Expected life |  |  | 5.0 years |  |  |  | 5.0 years |  |  |  | 5.0 years |  |  |  | 5.6 years |
The range of expected volatilities for options issued during the nine months ended August 31, 2013 and August 31, 2012 are as follows:
Nine Months Ended August 31, 2013 |  | Nine Months Ended August 31, 2012
108.75% - 114.99% |  | 111.30% - 116.28%
Stock option activity for options with only service-based vesting conditions for the nine months ended August 31, 2013, was as follows:
|  | Shares |  |  | Weighted Average Exercise Price |  |  | Weighted Average Remaining Contractual Term (Years) |  |  | Aggregate Intrinsic Value |
Outstanding at November 30, 2012 |  |  | 1,183,098 |  |  | $ | 2.15 |  |  |  | 7.12 |  |  | $ | 580,730 |
Granted |  |  | 36,000 |  |  |  | 2.00 |  |  |  |  |  |  | $ | 7,490 |
Exercised |  |  | (10,000 | ) |  |  | 1.50 |  |  |  |  |  |  | $ | 5,575 |
Expired/forfeited |  |  | (80,172 | ) |  |  | 2.67 |  |  |  |  |  |  | $ | 12,925 |
Outstanding at August 31, 2013 |  |  | 1,128,926 |  |  | $ | 2.11 |  |  |  | 6.72 |  |  | $ | 300,637 |
Exercisable at August 31, 2013 |  |  | 994,147 |  |  | $ | 2.10 |  |  |  | 6.87 |  |  | $ | 287,792 |
The weighted average grant date fair value of options granted during the nine months ended August 31, 2013 and August 31, 2012 was $1.58 and $1.55, respectively. The aggregate intrinsic value represents the total value of the difference between the Company’s closing stock price on the last trading day of the period and the exercise price of the options, multiplied by the number of in-the-money stock options that would have been received by the option holders had all option holders exercised their options on either November 30, 2012 or August 31, 2013, as applicable. The intrinsic value of the Company’s stock options changes based on the closing price of the Company’s stock. During the nine months ended August 31, 2013, the Company issued 10,000 common shares to option holders who exercised options for $14,950. During the nine months ended August 31, 2012, there were 33,562 options exercised using the net exercise method included as part of the original terms of each award. Under the net exercise method, the option holders surrendered 26,749 options to cover the total cost of exercising the stock options resulting in 6,813 net common shares being issued. The result of a smaller number of shares being issued to the option holder caused less dilution and fewer shares used from the option plan. Significant option groups outstanding and exercisable at August 31, 2013 and related price and contractual life information are as follows:
|  | Outstanding |  |  | Exercisable |
Range of Exercise Prices |  | Outstanding |  |  | Weighted Average Remaining Contractual Life (Years) |  |  | Weighted Average Exercise Price |  |  | Outstanding |  |  | Weighted Average Exercise Price |
$0.42 to $1.00 |  |  | 7,500 |  |  |  | 1.65 |  |  | $ | .78 |  |  |  | 7,500 |  |  | $ | .78 |
$1.01 to $ 2.00 |  |  | 533,426 |  |  |  | 7.18 |  |  | $ | 1.70 |  |  |  | 506,134 |  |  | $ | 1.69 |
$2.01 to $ 3.00 |  |  | 588,000 |  |  |  | 6.36 |  |  | $ | 2.50 |  |  |  | 480,513 |  |  | $ | 2.54 |
|  |  | 1,128,926 |  |  |  | 6.72 |  |  | $ | 2.11 |  |  |  | 994,147 |  |  | $ | 2.10 |
A summary of the status of the Company’s non-vested shares as of August 31, 2013, and changes during the nine months ended August 31, 2013, is presented below:
|  | Shares |  |  | Weighted Average Grant-Date Fair Value |
Non-vested at November 30, 2012 |  |  | 251,403 |  |  | $ | 1.77 |
Granted |  |  | 36,000 |  |  |  | 1.58 |
Vested |  |  | (131,794 | ) |  |  | 1.69 |
Forfeited |  |  | (20,830 | ) |  |  | 1.84 |
Non-vested at August 31, 2013 |  |  | 134,779 |  |  | $ | 1.78 |
As of August 31, 2013, there was approximately $142,000 of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the 2000 Plan, the 2006 Plan and the 2012 Plan. The cost is expected to be recognized over a weighted-average period of 1.1 years as of August 31, 2013. The total fair value of shares vested during the nine months ended August 31, 2013 was approximately $223,000. Performance and market-based vesting condition options There were no performance-based or market-based vesting condition options granted during the three and nine months ended August 31, 2013, or the three months ended August 31, 2012. Variables used to determine the fair value of options with performance-based and market-based vesting conditions granted during the nine months ended August 31, 2012 are as follows:
|  | Nine Months Ended August 31, 2012 |
Weighted average values: |  |  |  |
Expected dividends |  |  | 0 | %
Expected volatility |  |  | 107.03 | %
Risk free interest rate |  |  | 1.00 | %
Expected life |  |  | 6.4 years |
The range of expected volatilities for performance-based and market-based vesting condition options issued during the nine months ended August 31, 2012 are as follows:
|  | Nine Months Ended August 31, 2012
|  | 111.3% - 113.5%
Stock option activity for options with performance-based and market-based vesting conditions for the nine months ended August 31, 2013, was as follows:
|  | Shares |  |  | Weighted Average Exercise Price |  |  | Weighted Average Remaining Contractual Life (Years) |  |  | Aggregate Intrinsic Value |
Outstanding at November 30, 2012 |  |  | 640,000 |  |  | $ | 1.74 |  |  |  | 8.83 |  |  | $ | 511,600 |
Granted |  |  | — |  |  |  | — |  |  |  |  |  |  |  |  |
Exercised |  |  | — |  |  |  | — |  |  |  |  |  |  |  |  |
Expired/forfeited |  |  | — |  |  |  | — |  |  |  |  |  |  |  |  |
Outstanding at August 31, 2013 |  |  | 640,000 |  |  | $ | 1.74 |  |  |  | 8.08 |  |  | $ | 300,000 |
Exercisable at August 31, 2013 |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
The weighted average grant date fair value of performance and market-based vesting conditions options granted during the three and nine months ended August 31, 2012 was $0 and $1.28, respectively. During the nine months ended August 31, 2012, the Company granted 213,334 options that begin to vest based on the achievement of certain share prices of the Company’s common stock at certain future dates. For market-based vesting condition options, accounting principles do not require that the market condition be met in order for the compensation cost to be recognized. Fair value of these options has been determined using a binomial model and is being recognized over the requisite service period, regardless if the market condition will be met. As of August 31, 2013 there was approximately $91,800 of total unrecognized compensation cost related to the non-vested market-based vesting condition options. The Company granted 426,666 options to executives and consultants during the nine months ended August 31, 2012 that require certain performance targets to be met before vesting can occur. Management has deemed these performance targets to be improbable as of August 31, 2013 and November 30, 2012 and thus no compensation cost has been recognized through these dates. The Company will reevaluate the probability of achieving these targets on a quarterly basis, and adjust compensation expense accordingly. As of August 31, 2013 and November 30, 2012 there was approximately $616,000 of total unrecognized compensation cost related to the non-vested performance-based vesting condition options. If the performance conditions are not achieved by a certain date as specified in each option agreement, no compensation expense associated with these performance based options will be recognized.

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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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