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SHAREHOLDERS' EQUITY
 12 Months Ended
May 31, 2012
Stockholders' Equity Note Disclosure [Text Block]

6.    SHAREHOLDERS' EQUITY


STOCK OPTION AND RESTRICTED STOCK PLANS


In August 1999, the Company adopted a stock option and restricted stock plan (the "1999 Plan") which provides that non-qualified options and incentive stock options and restricted stock covering an aggregate of 1,000,000 of the Company's unissued common stock may be granted to affiliates, employees or consultants of the Company. As of January 1, of each calendar year, commencing January 1, 2000, this amount is subject to automatic annual increases equal to the lesser of 1.5% of the total number of outstanding common shares, assuming conversion of convertible securities, or 500,000. The 1999 plan expired in November 2009. Options granted under the 1999 Plan were granted at prices not less than 80% of the then fair market value of the common stock and expired not more than 10 years after the date of grant.


In August 2010, the Company adopted a stock option and restricted stock plan (the "2010 Plan") which provides that non-qualified options and incentive stock options and restricted stock covering an aggregate of 850,000 of the Company's unissued common stock may be granted to affiliates, employees or consultants of the Company. This plan was approved by shareholders in December 2010.  The 2010 Plan expires in December 2020. Options granted under the 2010 Plan will be granted at prices not less than 80% of the then fair market value of the common stock and will expire not more than 10 years after the date of grant.


Activity as to stock options and warrants outstanding are as follows:


 

 

 

 

                                                            

NUMBER OF STOCK OPTIONS AND WARRANTS

WEIGHTED AVERAGE PRICE RANGE PER SHARE

EXERCISE PRICE

Options and warrants outstanding at May 31, 2010

1,319,999 

$0.30 - $1.30

$0.77

Options granted

348,000 

$0.38 - $0.40

$0.39

Options and warrants exercised

(207,500)

$0.40

$0.40

Options and warrants canceled or expired

(460,249)

$0.40 - $0.73

$0.48

Options and warrants outstanding at May 31, 2011

1,000,250 

$0.30 - $1.30

$0.57

Options granted

412,500 

$0.43 - $0.73

$0.44

Options and warrants exercised

(84,000)

$0.38 - $0.73

$0.59

Options and warrants canceled or expired

(324,250)

$0.38 - $1.30

$0.71

Options and warrants outstanding at May 31, 2012        

1,004,500 

$0.30 - $0.75

$0.46


The weighted average fair value of options and warrants granted during 2012 and 2011, was $0.44 and $0.39, respectively. The aggregate intrinsic value of options exercised during 2012 and 2011 was approximately $8,800 and $10,200, respectively. The aggregate intrinsic value of options outstanding at May 31, 2012 and 2011, was approximately $232,000 and $23,000, respectively. The aggregate intrinsic value of options vested and exercisable at May 31, 2012 and 2011, was approximately $79,000 and $3,000, respectively.


At May 31, 2012, total compensation cost related to non-vested stock option awards not yet recognized totaled $43,569. The weighted-average period over which this amount is expected to be recognized is 3.08 years. The weighted average remaining contractual term of options and warrants that were exercisable at May 31, 2012 was 3.82 years.


The following summarizes information about all of the Company's stock options and warrants outstanding at May 31, 2012. These options are comprised of those granted under the 1999 and 2010 plans.


 

 

 

 

 

 

RANGE OF EXERCISE PRICES

WEIGHTED NUMBER OUTSTANDING 5/31/2012

AVERAGE REMAINING CONTRACTUAL LIFE IN YEARS

WEIGHTED AVERAGE EXERCISE PRICE

NUMBER EXERCISABLE AT MAY 31, 2012

WEIGHTED AVERAGE EXERCISE PRICE

$0.30 - $0.50

809,500

3.84

$0.42

214,750

$0.41

$0.51 - $0.75

195,000

3.75

$0.66

185,000

$0.66

 

 

 

 

 

 


STOCK ACTIVITY


In February 2011 the Board of Directors granted stock options for 173,000 options to employees of the Company. The options vests one quarter after one year and then will vest one quarter per year thereafter.  The options are at the exercise price of $0.38 and expire in five years.  


In May 2011 the Board of Directors granted stock options for 175,000 options to officers and directors of the Company.  The options vested one quarter after one year and then will vest one quarter per year thereafter.  The options are at the exercise price of $0.40 and expire in five years


In January 2012 the Board of Directors granted stock options for 402,500 options to officers, directors and employees of the Company.  Options for directors who are not also officers vested one quarter immediately and then will vest one quarter per year thereafter.  The options for employees and officers vest one quarter after one year and then will vest one quarter per year thereafter.  The options are at the exercise price of $0.43 and expire in five years.


In April 2012 the Board of Directors granted stock options for 10,000 shares to an employee.  The option vested one quarter immediately and then will vest one quarter per year thereafter.  The option is at the exercise price of $0.73 and expires in five years.


During the fiscal year ended May 31, 2011, options and warrants to purchase 207,500 shares of common stock were exercised at the price of $0.40 per share. Total proceeds to the Company were $83,000.


During the fiscal year ended May 31, 2012, options to purchase 84,000 shares of common stock were exercised at the prices ranging from $0.38 to $0.73.  Total proceeds to the Company were $47,790.