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Stockholder's Equity | 6 Months Ended
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May 31, 2014
Equity [Abstract] |
Stockholder's Equity | Note 4 – Stockholder’s Equity Common Stock Issuances During the three and six months ended May 31, 2014, the Company issued 32,496 common shares to option holders who exercised options for $48,665. During the three and six months ended May 31, 2013, the Company issued 7,500 common shares to option holders who exercised options for $11,825. Employee Stock Incentive Plan 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 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 May 31, 2014 and November 30, 2013, there were 2,500 and 12,500 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 May 31, 2014 and November 30, 2013, there were 653,516 and 739,760 shares outstanding under the 2006 Plan, respectively. As of May 31, 2014, there were 220,342 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, 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 to 2,500,000 shares. As of May 31, 2014, there were 400,000 service-based options issued, 129,729 service-based restricted common shares granted, 261,488 performance-based and 87,162 market-based restricted common shares granted under the 2012 plan. As of November 30, 2013, there were 400,000 service-based options issued, 400,000 performance-based and 200,000 market-based options to purchase shares granted under the 2012 plan. As of May 31, 2014, there were 1,621,621 shares available for future issuance under the 2012 Plan. 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. There were no options granted during the three and six months ended May 31, 2014. Variables used to determine the fair value of the options granted for the three and six months ended May 31, 2013 are as follows:
|  | Three Months Ended |  |  | Six Months Ended |
|  | May 31, 2013 |  |  | May 31, 2013 |
Weighted average values: |  |  |  |  |  |  |  |
Expected dividends |  |  | 0 | % |  |  | 0 | %
Expected volatility |  |  | 112.4 | % |  |  | 113.3 | %
Risk free interest rate |  |  | .81 | % |  |  | .81 | %
Expected life |  |  | 5 years |  |  |  | 5 years |
The range of expected volatilities for options issued during the six months ended May 31, 2013 are as follows:
May 31, 2013
111.6% - 114.9%
Stock option activity for options with only service-based vesting conditions for the six months ended May 31, 2014, was as follows:
|  | Shares |  |  | Weighted Average Exercise Price |  |  | Weighted Average Remaining Contractual Term (Years) |  |  | Aggregate Intrinsic Value |
Outstanding at November 30, 2013 |  |  | 1,112,260 |  |  | $ | 2.11 |  |  |  | 6.40 |  |  | $ | 88,614 |
Granted |  |  | — |  |  |  | — |  |  |  |  |  |  |  | — |
Exercised |  |  | 32,496 |  |  |  | 1.50 |  |  |  |  |  |  |  | 31,149 |
Expired/forfeited |  |  | (63,748 | ) |  |  | 2.13 |  |  |  |  |  |  |  | 23,700 |
Outstanding at May 31, 2014 |  |  | 1,016,016 |  |  | $ | 2.13 |  |  |  | 6.20 |  |  | $ | 435,491 |
Exercisable at May 31, 2014 |  |  | 972,270 |  |  | $ | 2.12 |  |  |  | 6.27 |  |  | $ | 427,684 |
The weighted average grant date fair value of options granted during the six months ended May 31, 2013 was $1.67. 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, 2013 or May 31, 2014, as applicable. The intrinsic value of the Company’s stock options changes based on the closing price of the Company’s stock. During the six months ended May 31, 2014 the Company issued 32,496 common shares to option holders who exercised options for $48,665. During the six months ended May 31, 2013 the Company issued 7,500 common shares to option holders who exercised options for $11,825. Significant option groups outstanding and exercisable at May 31, 2014 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 |  |  | 2,500 |  |  |  | 1.20 |  |  | $ | 0.68 |  |  |  | 2,500 |  |  | $ | 0.68 |
$1.01 to $2.00 |  |  | 488,013 |  |  |  | 6.80 |  |  | $ | 1.72 |  |  |  | 480,928 |  |  | $ | 1.71 |
$2.01 to $3.00 |  |  | 525,503 |  |  |  | 5.66 |  |  | $ | 2.52 |  |  |  | 488,842 |  |  | $ | 2.52 |
|  |  | 1,016,016 |  |  |  | 6.20 |  |  | $ | 2.13 |  |  |  | 972,270 |  |  | $ | 2.12 |
A summary of the status of the Company’s non-vested shares as of May 31, 2014, and changes during the six months ended May 31, 2014, is presented below:
|  | Shares |  |  | Weighted Average Grant-Date Fair Value |
Non-vested at November 30, 2013 |  |  | 109,152 |  |  | $ | 1.79 |
Granted |  |  | — |  |  |  | — |
Vested |  |  | (43,743 | ) |  |  | 1.67 |
Forfeited |  |  | (21,663 | ) |  |  | 1.84 |
Non-vested at May 31, 2014 |  |  | 43,746 |  |  | $ | 1.86 |
As of May 31, 2014, there was approximately $25,000 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 .47 years as of May 31, 2014. The total fair value of shares vested during the six months ended May 31, 2014 was approximately $73,000. Performance and market-based vesting condition options There were no performance-based or market-based vesting condition options granted during the three and six months ended May 31, 2014 and May 31, 2013. Stock option activity for options with performance-based and market-based vesting conditions for the six months ended May 31, 2014, was as follows:
|  | Shares |  |  | Weighted Average Exercise Price |  |  | Weighted Average Remaining Contractual Life (Years) |  |  | Aggregate Intrinsic Value |
Outstanding at November 30, 2013 |  |  | 640,000 |  |  | $ | 1.74 |  |  |  | 7.83 |  |  | $ | 70,000 |
Granted |  |  | — |  |  |  | — |  |  |  |  |  |  |  |  |
Exercised |  |  | — |  |  |  | — |  |  |  |  |  |  |  |  |
Expired/forfeited |  |  | (600,000 | ) |  |  | 1.72 |  |  |  |  |  |  |  |  |
Outstanding at May 31, 2014 |  |  | 40,000 |  |  | $ | 2.05 |  |  |  | 4.76 |  |  | $ | 16,000 |
Exercisable at May 31, 2014 |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
As of fiscal year ended November 30, 2013, the Company had 213,334 options outstanding 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. During the first quarter fiscal 2014, 200,000 options were forfeited as certain market conditions were not met by the end of the requisite service period. As of May 31, 2014 there was approximately $6,200 of total unrecognized compensation cost related to the non-vested market-based vesting condition options. As of fiscal year ended November 30, 2013, the Company had 426,666 options outstanding that require certain performance targets to be met before vesting can occur. During the first quarter fiscal 2014, 400,000 options were forfeited as certain performance targets were not met by the end of the requisite service period. Management has deemed the performance targets for the remaining 26,666 options to be improbable as of May 31, 2014 and thus no compensation cost has been recognized to date. The Company will reevaluate the probability of achieving these targets on a quarterly basis, and adjust compensation expense accordingly. As of May 31, 2014, there was approximately $44,000 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. Restricted common shares During the first quarter 2014, the Company entered into Amended and Restated Employment Agreements (“Employment Agreements”) with each of the Company’s Co-CEOs. Per the Employment Agreements, each of the Co-CEOs is to receive base grant equity awards in the form of restricted shares of the Company’s common stock. As of December 1, 2013, David Portnoy and Mark Portnoy were granted 70,270 and 59,459 shares of the Company’s common stock, respectively. The shares shall be issued under the Company’s 2012 Stock Plan and will vest 1/3 upon grant, 1/3 on December 1, 2014 and the remaining 1/3 on December 1, 2015. The fair value of the shares vested as of May 31, 2014 was $80,000 and is reflected as selling, general and administration expenses in the accompanying consolidated statement of operations. These shares are not reflected as outstanding in the accompanying financial statements as they were issued subsequent to the balance sheet date. As of May 31, 2014, there was approximately $120,000 of total unrecognized compensation cost related to the non-vested shares of restricted common stock. The Employment Agreements also provide for the grant of restricted shares of the Company’s common stock based on certain performance measures being attained by each of the Company’s Co-CEOs. The Employment Agreements state if David Portnoy and Mark Portnoy are employed by the Company on November 30, 2014, then no later than February 15, 2015, the Company will grant up to 186,487 and 162,163 shares of restricted common shares, respectively, based on certain performance thresholds, as defined in the agreements. In addition, if David Portnoy and Mark Portnoy are employed by the Company on November 30, 2015, then no later than February 15, 2016, the Company will grant up to an additional 186,487 and 162,163 shares of restricted common shares, respectively, based on similar performance thresholds, as defined in the agreements. As of May 31, 2014, there was approximately $15,000 of total unrecognized compensation cost related to the non-vested performance-based shares of restricted common stock.

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- Definition The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(d),(e)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section S99 -Paragraph 4 -Subparagraph (SAB TOPIC 4.C) -URI http://asc.fasb.org/extlink&oid=27012166&loc=d3e187143-122770 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.29-31) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB TOPIC 4.E) -URI http://asc.fasb.org/extlink&oid=27010918&loc=d3e74512-122707 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 4 -Section C Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 4 -Section E Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Article 4 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 6 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21506-112644 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Glossary Preferred Stock -URI http://asc.fasb.org/extlink&oid=6521494 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 02 -Paragraph 29, 30, 31 -Article 5 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 04 -Article 3 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21463-112644 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.3-04) -URI http://asc.fasb.org/extlink&oid=27012166&loc=d3e187085-122770 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 Reference 15: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 11 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21564-112644 Reference 16: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21488-112644 Reference 17: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21484-112644 Reference 18: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph d -Article 4 Reference 19: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6405834&loc=d3e23285-112656 + Details
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