8. STOCKHOLDERS EQUITY

6 Months Ended

Oct. 31, 2012

Equity [Abstract]

8. STOCKHOLDERS’ EQUITY

Common Stock

The Company’s Certificate of Incorporation authorizes it to issue 400,000,000 shares of $0.0001 par value common stock. As of October 31, 2012, there were 32,899,900 shares of common stock issued and outstanding.

Warrants

As further discussed in Note 5 above, on June 15, 2012, the Company issued 563,064 warrants as part of the second closing of the Series A Convertible Preferred Stock. The warrants were issued with an exercise price of $2.22 and a six-year term. The warrants become exercisable on the one-year anniversary of the issue date. The Company recorded non-cash interest expense of $656,535 during the six months ended October 31, 2012 for the calculated fair value of the warrants.

The following table summarizes the Company’s warrant activity for the six months ended October 31, 2012:

	Warrants			Weighted Average Exercise Price
Outstanding at April 30, 2012		5,239,964		$	2.08
Issued		563,064			2.22
Forfeited		(101,153	)		3.68
Outstanding at October 31, 2012		5,701,875		$	2.07

1999 Amended Stock Plan

In October 2000, the Company adopted the 1999 Stock Plan, as amended and restated on June 17, 2008 (the “Plan”). Under the Plan, with the approval of the Compensation Committee of the Board of Directors, the Company may grant stock options, restricted stock, stock appreciation rights and new shares of Common Stock upon exercise of stock options. On September 30, 2011, the Company’s stockholders approved an amendment to the Plan which increased the amount of shares authorized for issuance under the Plan to 6,000,000, up from 800,000 previously authorized. As of October 31, 2012 the Company had 5,514,337 shares of Common Stock available for grant under the Plan.

The following table summarizes the shares available for grant under the Plan for the six months ended October 31, 2012:

	Shares Available for Grant
Balances, at April 30, 2012		5,531,630
Options granted		(29,891	)
Options cancelled/forfeited		103,167
Restricted stock granted		(102,759	)
Restricted stock cancelled/forfeited		12,190
Balances, at October 31, 2012		5,514,337

Plan Stock Options

Stock options granted under the Plan may be either incentive stock options (“ISOs”), or nonqualified stock options (“NSOs”). ISOs may be granted only to employees. NSOs may be granted to employees, consultants and directors. Stock options under the Plan may be granted with a term of up to ten years and at prices no less than fair market value for ISOs and no less than 85% of the fair market value for NSOs. Stock options granted generally vest over one to three years.

The following table summarizes the outstanding stock options under the Plan for the six months ended October 31, 2012:

	Outstanding Options
	Number of Shares			Weighted Average Exercise Price
Balances, at April 30, 2012		351,823		$	4.06
Options granted		29,891		$	1.70
Options cancelled		(104,667	)	$	5.66
Balances, at October 31, 2012		277,047		$	3.20

The Company chose the “straight-line” attribution method for allocating compensation costs of each stock option over the requisite service period using the Black-Scholes Option Pricing Model to calculate the grant date fair value.

The Company used the following assumptions to estimate the fair value of options granted under its stock option plans for the six months ended October 31, 2012 and 2011, respectively:

	For the the six months ended October 31
	2012			2011
Risk-free interest rate (weighted average)		1.29	%		2.38	%
Expected volatility (weighted average)		79.17	%		78.47	%
Expected term (in years)		7			7
Expected dividend yield		0.00	%		0.00	%

Risk-Free Interest Rate	The risk-free interest rate assumption was based on U.S. Treasury instruments with a term that is consistent with the expected term of the Company’s stock options.
Expected Volatility	The expected stock price volatility for the Company’s common stock was determined by examining the historical volatility and trading history for its common stock over a term consistent with the expected term of its options.
Expected Term	The expected term of stock options represents the weighted average period the stock options are expected to remain outstanding. It was calculated based on the historical experience that the Company has had with its stock option grants.
Expected Dividend Yield	The expected dividend yield of 0% is based on the Company’s history and expectation of dividend payouts. The Company has not paid and does not anticipate paying any dividends in the near future.
Forfeitures	Stock compensation expense recognized in the statements of operations for the three and six months ended October 31, 2012 and 2011 is based on awards ultimately expected to vest, and it has been reduced for estimated forfeitures. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Forfeitures were estimated based on the Company’s historical experience.

As of October 31, 2012, there were unrecognized compensation costs of approximately $48,800 related to non-vested stock option grants that will be recognized on a straight-line basis over the weighted average remaining vesting period of 1.6 years.

Restricted Stock Grants

The following table summarizes the restricted stock grants under the Plan for the six months ended October 31, 2012.

	Outstanding Restricted Stock Grants
	Number of Shares			Weighted Average Grant Date Fair Value
Balances, at April 30, 2012		36,095		$	2.19
Restricted stock granted		102,759		$	1.78
Restricted stock vested		(50,992	)	$	1.98
Restricted stock cancelled		(12,190	)	$	1.85
Balances, at October 31, 2012		75,672		$	1.83

The Company recorded compensation expense for these restricted stock grants of $44,158 and $122,228 for the three and six months ended October 31, 2012, respectively.

As of October 31, 2012, there were unrecognized compensation costs of approximately $46,610 related to the non-vested restricted stock grants that will be recognized on a straight-line basis over the remaining vesting period.