Annual report pursuant to Section 13 and 15(d)

Stockholders' Equity

v2.4.0.6
Stockholders' Equity
 12 Months Ended
Nov. 30, 2011
Stockholders' Equity [Abstract]  
Stockholders' Equity

NOTE 7 – STOCKHOLDERS' EQUITY.

Common Stock Issuances

During the year ended November 30, 2011, the Company issued 68,417 common shares to option holders who exercised options for $80,936. Further, during the year ended November 30, 2011, certain option holders exercised 56,667 options, using the net exercise method. Under the net exercise method, the option holders surrendered 24,431 options, to cover the total cost of exercising the stock options resulting in net common shares of 32,236 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. There were no options exercised during the year ended November 30, 2010.

 

Employee Stock Incentive Plan

The Company maintains the 2000 Stock Incentive Plan ("the Plan") that has reserved 2,250,000 shares of the Company's common stock for issuance pursuant to stock options or restricted stock. During 2004, the Plan was amended to allow issuance of options to certain consultants of the Company. 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. No further options will be issued under the 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"), stock awards (i.e. performance shares and performance units). The Company has issued 662,236 options from the 2006 Plan to date. As of November 30, 2011, there were 337,764 shares available for future issuance under the 2006 plan.

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. 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 is derived from the output of the option valuation model and represents the period of time that options granted are expected to be outstanding. Expected dividends is based on the historical trend of the Company not issuing dividends.

Variables used to determine the fair value of the options granted for the years ended November 30, 2011 and 2010 are as follows:

 

     2011     2010  

Weighted average values:

     

Expected dividends

      0 %      0 % 

Expected volatility

      108 %      101 % 

Risk free interest rate

      1.20 %      2.16 % 

Expected life

      5.5 years        5 years   

The range of expected volatilities for options issued during fiscal 2011 and 2010 are as follows:

 

2011

    2010
89% - 111%    99% - 107%

 

Stock Options

Stock option activity for the 2000 Plan and the 2006 Plan for the year ended November 30, 2011 was as follows:

 

     Shares     Weighted
Average
Exercise
Price		      Weighted
Average
Remaining
Contractual
Life (Years)		      Aggregate
Intrinsic
Value		  

Outstanding at November 30, 2010

      816,421      $ 1.87         4.67       $ 471,109   

Granted

      365,000        2.65            15,600   

Exercised

      (125,084 )      1.11            133,782   

Terminated/Expired

      (447,918 )      2.01            77,067   
  

 

 

    

 

 

        

 

 

  

Outstanding at November 30, 2011

      608,419      $ 2.40         6.38       $ 37,490   
  

 

 

    

 

 

     

 

 

     

 

 

  

Exercisable at November 30, 2011

      255,142      $ 2.35         4.89       $ 23,113   
  

 

 

    

 

 

     

 

 

     

 

 

  

The weighted average grant date fair value of options granted during the years ended November 30, 2011 and November 30, 2010 was $2.12 and $1.05, 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 November 30, 2011. The intrinsic value of the Company's stock options changes based on the closing price of the Company's stock. The aggregate intrinsic value of options exercised during the years ended November 30, 2011 and November 30, 2010 was $77,067 and $0, respectively.

Significant option groups outstanding and exercisable at November 30, 2011 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

      16,667         3.33       $ 0.68         15,001       $ 0.70   

$1.01 to $2.00

      183,293         4.98       $ 1.59         87,513       $ 1.61   

$2.01 to $3.00

      348,334         8.13       $ 2.74         92,503       $ 2.69   

$3.01 to $4.00

      60,125         1.35       $ 3.34         60,125       $ 3.34   
  

 

 

           

 

 

     
     608,419         6.38       $ 2.40         255,142       $ 2.35   
  

 

 

           

 

 

     

A summary of the status of the Company's non-vested options as of November 30, 2011, and changes during the year ended November 30, 2011, is presented below.

 

     Shares     Weighted
Average
Grant-Date
Fair Value 		 

Non-vested at November 30, 2010

      381,967      $ 1.11   

Granted

      365,000        2.12   

Vested

      (244,907 )      1.35   

Forfeited

      (148,783 )      1.21   
  

 

 

    

 

 

  

Non-vested at November 30, 2011

      353,277      $ 1.94   
  

 

 

    

 

 

  

As of November 30, 2011 and November 30, 2010, there was approximately $547,000 and $189,000, respectively, of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the 2000 Plan and the 2006 Plan. As of November 30, 2011 and November 30, 2010, the cost is expected to be recognized over a weighted-average period of 2.1 and 1.9 years, respectively. The total fair value of shares vested during the years ended November 30, 2011 and November 30, 2010 was approximately $329,600 and $136,000, respectively.