8. STOCKHOLDERS EQUITY

3 Months Ended

Jul. 31, 2014

Equity [Abstract]

8. STOCKHOLDERS' EQUITY

Preferred Stock

Under the Company’s Certificate of Incorporation, the Board of Directors is authorized, without further stockholder action, to provide for the issuance of up to 10,000,000 shares of preferred stock, par value $0.0001 per share, in one or more series, to establish from time to time the number of shares to be included in each such series, and to fix the designation, powers, preferences and rights of the shares of each such series and the qualifications, limitations and restrictions thereof. As of July 31, 2014, 9,947,439 shares of preferred stock are undesignated, no shares of preferred stock are issued or outstanding.

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 July 31, 2014, there were 28,107,264 shares of common stock issued and outstanding.

Warrants

The following table summarizes the Company’s warrant activity for the three months ended July 31, 2014:

	Warrants			Weighted Average Exercise Price
Outstanding at April 30, 2014		2,762,466		$	4.28
Exercised		(209,230	)		2.60
Outstanding at July 31, 2014		2,553,236		$	4.41

During the three months ended July 31, 2014, the Company received approximately $544,000 and issued 209,230 shares of common stock upon the exercise of outstanding warrants.

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 March 14, 2014, the Company’s stockholders approved an amendment to the Plan which increased the number of shares of common stock authorized for issuance to a total of 4,000,000 shares, up from 300,000 previously authorized. As of July 31, 2014 the Company had 121,378 shares of common stock available for grant under the Plan.

The following table summarizes the shares available for grant under the Plan for the three months ended July 31, 2014:

	Shares Available for Grant
Balances, at April 30, 2014		155,408
Options granted		(50,050	)
Options cancelled/forfeited		3,626
Restricted stock granted		(2,438	)
Restricted stock cancelled/forfeited		14,832
Balances, at July 31, 2014		121,378

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. Stock options granted generally vest over one to three years.

	Outstanding Options
	Number of Shares			Weighted Average Exercise Price
Balances, at April 30, 2014		3,647,858		$	5.79
Options granted		50,050		$	4.82
Options cancelled		(3,626	)	$	73.34
Balances, at July 31, 2014		3,694,282		$	5.71

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 recorded compensation expense for these stock options grants of $71,032 for the three months ended July 31, 2014.

As of July 31, 2014, there were unrecognized compensation costs of approximately $238,000 related to non-vested stock option awards that will be recognized on a straight-line basis over the weighted average remaining vesting period of 0.9 years. Additionally, there were unrecognized compensation costs of approximately $7.9 million related to non-vested stock option awards subject to performance-based vesting milestones with a weighted average remaining life of 5.5 years. As of July 31, 2014, none of these milestones have been achieved.

The Company used the following assumptions to estimate the fair value of options granted under its stock option plans for the three months ended July 31, 2014 and 2013:

	For the three months ended July
	2014			2013
Risk-free interest rate (weighted average)		2.23	%		1.11	%
Expected volatility (weighted average)		98.43	%		86.21	%
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 Company’s historical experience 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 months ended July 31, 2014 and 2013 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.

Restricted Stock Grants

The following table summarizes the restricted stock grants under the Plan for the three months ended July 31, 2014.

	Outstanding Restricted Stock Grants
	Number of Shares			Weighted Average Grant Date Fair Value
Balances, at April 30, 2014		42,478		$	6.39
Restricted stock granted		2,438		$	4.98
Restricted stock vested		(17,700	)	$	7.56
Restricted stock cancelled		(14,832	)	$	6.99
Balances, at July 31, 2014		12,384		$	3.72

The Company recorded compensation expense for these restricted stock grants of $6,598 for the three months ended July 31, 2014.

As of July 31, 2014, there were unrecognized compensation costs of approximately $11,000 related to the non-vested restricted stock grants that will be recognized on a straight-line basis over the remaining vesting period of 0.8 years.