Note 11.  Stock Based Compensation

The share amounts and share prices reflect a 1-for-5 reverse stock split effected by the Company on June 15, 2011.

The aggregate intrinsic value of options and warrants outstanding at March 31, 2013 is calculated as the difference between the exercise price of the underlying options and the market price of our common stock as of March 31, 2013.

The weighted-average estimated grant date fair value, as defined by ASC 718 for stock options granted during fiscal 2013 and 2012, was $2.82 and $3.43, per option, respectively.

No shares were granted under the Employee Stock Purchase Plan during fiscal years 2013 and 2012.

Valuation and Other Assumptions for Stock Options

 

Valuation and Amortization Method.    The Company estimates the fair value of stock options granted using the Black-Scholes option pricing model. We estimate the fair value using a single option approach and amortize the fair value on a straight-line basis for options expected to vest. All options are amortized over the requisite service periods of the awards, which are generally the vesting periods.

 

Expected Term.   The expected term of options granted represents the period of time that the options are expected to be outstanding. We estimate the expected term of options granted based on our historical experience of exercises including post-vesting exercises and termination.

 

Expected Volatility.    The Company estimates the volatility of our stock options at the date of grant using historical volatilities.  Historical volatilities are calculated based on the historical prices of our common stock over a period at least equal to the expected term of our option grants.

 

Risk-Free Interest Rate.    The Company bases the risk-free interest rate used in the Black-Scholes option valuation model on the implied yield in effect at the time of option grant on U.S. Treasury zero-coupon issues with remaining terms equivalent to the expected term of our option grants.

 

Dividends.    The Company has never paid any cash dividends on common stock and we do not anticipate paying any cash dividends in the foreseeable future.

 

Forfeitures.    The Company uses historical data to estimate pre-vesting option forfeitures. We record stock-based compensation expense only for those awards that are expected to vest.

The Company does not use multiple share-based payment arrangements.

 

Restricted Stock Units

The weighted-average estimated grant date fair value, as defined by ASC Topic 718 for restricted stock awards granted during fiscal 2013 and 2012 was $3.84 and $1.79, per award, respectively.

As of March 31, 2013 there was $380 of total unrecognized compensation cost related to restricted stock which is expected to be recognized over a weighted-average period of 2.11 years.

As of March 31, 2013 there was $261 of total unrecognized compensation cost related to stock options which is expected to be recognized over a weighted-average period of 3.12 years.

Total stock-based compensation expense related to stock options and RSUs for the years ended March 31, 2013 and 2012 was $695 and $175, respectively.