Annual report pursuant to section 13 and 15(d)

Stock Options and Warrants

v2.4.0.6
Stock Options and Warrants
 12 Months Ended
May 31, 2012
Stock Options and Warrants [Abstract]  
Stock Options and Warrants

5 - Stock Options and Warrants

The Company has one stock-based equity plan at May 31, 2012. Pursuant to the 2004 Stock Incentive Plan as amended (the “Plan”), which was originally adopted by the Company’s shareholders in 2005, the Company was authorized to issue options and warrants to purchase up to 7,600,000 shares of the Company’s common stock. As of May 31, 2012 the Company had 3,941,500 shares available for future stock option grants under the Plan.

The estimated fair value of options and warrants is determined using the Black-Scholes option valuation model with the following weighted-average assumptions for the periods ended May 31, 2012 and 2011:

 

         
    2012   2011
     

Risk free rate

   0.12% - 0.87%   0.74%

Dividend yield

   —     —  

Volatility

   93% - 102%   106%

Expected term

   1-4 years   6.25 years

Net cash proceeds from the exercise of stock options and warrants were approximately $327,000 and $0 for the periods ended May 31, 2012 and May 31, 2011, respectively.

Compensation expense related to stock options and warrants was approximately $1,692,000, and $952,000 for the periods ended May 31, 2012 and 2011, respectively. During 2012 and 2011, the Company granted 3,416,088 and 550,000 options to employees, consultants and directors, which were valued and recorded as compensation expense above. Additionally, the Company granted 40,000 and 0 of warrants in conjunction with the issuance of common stock. All options and warrants granted during 2012 and 2011 were granted outside of the Plan.

The grant date fair value of options and warrants vested during the periods ended May 31, 2012 and 2011 was approximately $1,562,000 and $895,000, respectively. The weighted average grant date fair value of options and warrants granted during the periods ended May 31, 2012 and 2011 was $1.44 and $0.97 respectively. As of May 31, 2012, there was approximately $5,039,000 of unrecognized compensation costs related to share-based payments for unvested options, which is expected to be recognized over a weighted average period of 3.31 years.

 

The following table represents stock option and warrants activity for the periods ended May 31, 2012 and 2011:

 

                                 
    Number of
Shares		     Weighted
Average
Exercise Price		     Weighted
Average
Remaining
Contractual
Life		     Aggregate
Intrinsic Value		  

Options and warrants outstanding - May 31, 2010

     7,660,176     $ 1.42       5.41       2,761,129  
   

 

 

    

 

 

    

 

 

    

 

 

  
         

Granted

     550,000     $ 1.19       —         —    

Exercised

     (18,000 )    $ 1.20       —         —    

Forfeited/expired/cancelled

     (718,600 )    $ 2.13       —         —    
   

 

 

    

 

 

    

 

 

    

 

 

  

Options and warrants outstanding - May 31, 2011

     7,473,576     $ 1.34       3.84       10,495,913  

Granted

     3,456,088     $ 2.04       —         —    

Exercised

     (527,500 )    $ 0.62       —         1,147,425  

Forfeited/expired/cancelled

     (74,500 )    $ 2.49       —         —    
   

 

 

    

 

 

    

 

 

    

 

 

  
         

Options and warrants outstanding May 31, 2012

     10,327,664     $ 1.60       3.20       2,308,279  
   

 

 

    

 

 

    

 

 

    

 

 

  

Exercisable - May 31, 2012

     6,627,649     $ 1.42       2.86       2,207,529