Share-Based Payments

12 Months Ended

Apr. 30, 2012

Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

Note 6. Share-Based Payments

Stock-based compensation in the amount of $3.3 million and $3.1 million was recognized for the years ended April 30, 2012 and 2011, respectively.  Stock-based compensation costs were recorded as follows (in thousands):

	Year Ended April 30,
	2012		2011
General and administrative	$	3,009	$	2,887
Sales and marketing		240		105
Research and development		39		101
TOS cost of sales		10		40
POS cost of sales		25		-
Total stock-based compensation expense	$	3,323	$	3,133

2010 Equity Incentive Plan

On February 18, 2011, shareholders owning a majority of the issued and outstanding shares of the Company executed a written consent approving the 2010 Equity Incentive Plan (“2010 Equity Plan”). The purpose of the 2010 Equity Plan is to grant (i) Non-statutory Stock Options; (ii) Restricted Stock Awards; and (iii) Stock Appreciation Rights (collectively, stock-based compensation) to its employees, directors and non-employees. Total stock awards under the 2010 Equity Plan shall not exceed 30,000,000 shares of common stock. Options and Stock Appreciation Rights expire no later than ten years from the date of grant and the awards vest as determined by the Board of Directors. Options and Stock Appreciation Rights have a strike price not less than 100% of the fair market value of the common stock subject to the option or right at the date of grant.

2008 Equity Incentive Plan

The Company has previously granted (i) Non-statutory Stock Options; (ii) Restricted Stock Awards; and (iii) Stock Appreciation Rights (collectively, stock-based compensation) to its employees, directors and non-employees under a 2008 Equity Incentive Plan (the “2008 Equity Plan”).  Such awards may be granted by the Company’s Board of Directors.  Options granted under the 2008 Equity Plan expire no later than ten years from the date of grant and the awards vest as determined by the Board of Directors.

For share-based payments to non-employee consultants under both the 2010 and 2008 Equity Incentive Plan, the fair value of the share-based consideration issued is used to measure the transaction, as management believes this to be a more reliable measure of fair value than the services received.  The fair value of the award is expensed over the period service is provided to the Company; however, it is ultimately measured at the price of the Company’s common stock or the fair value of stock options using the Black-Scholes valuation model on the date that the commitment for performance by the non-employee consultant has been reached or performance is complete, which is generally the vesting date of the award.

Director Compensation Plan

On February 22, 2010, the Compensation Committee of the Board of Directors of the Company adopted the Director Compensation Plan of 2010 (the “Director Plan”) to replace the Company’s former compensation policy for directors, effective for the 2010 calendar year commencing January 1, 2010.  Under the Director Plan, independent directors of the Company are entitled to an annual award of five-year stock options to purchase 50,000 shares of the Company’s unregistered common stock, and the Chairman of the Board of the Company is entitled to an annual award of options to purchase 100,000 shares of the Company’s unregistered common stock.  Independent directors who serve on one or more Board committees will also receive an annual grant of five-year options to purchase 50,000 shares of the Company’s unregistered common stock or 50,000 shares of restricted unregistered common stock.  The Company will also pay each independent director $15,000 to offset the tax liability in respect of any unregistered restricted stock awards.  All unregistered common stock options and unregistered restricted stock issued under the Director Plan vest quarterly at a rate of 25%. For the initial Director Plan year, an independent director could have chosen to receive a cash fee equal to the value of the unregistered restricted common stock that would have otherwise been granted.  The Chairman of the Board was also entitled to the same arrangement for his services on Board committees at a rate of twice that of an independent director.  

Stock Option Grants

Black-Scholes assumptions used to calculate the fair value of options granted during the years ended April 30, 2012 and 2011 were as follows:

	Year Ended April 30,
	2012		2011
Expected term in years		3.0 - 6.0		2.7 - 6.25
Risk-free interest rates		0.4% - 2.3%		0.9% - 2.7%
Volatility		90% - 108%		105% - 122%
Dividend yield		0%		0%

The weighted average fair value of stock options granted during the years ending April 30, 2012 and 2011, was $0.58 and $0.73, respectively. The Company’s stock options activity and related information as of and for the years ended April 30, 2012 and 2011 is as follows (dollars in thousands):

												Weighted
										Weighted		Average
				Directors						Average		Remaining		Aggregate
	Non-			and						Exercise		Contractual		Intrinsic
	Employees			Employees			Total			Price		Life (Years)		Value
Outstanding, May 1, 2011		1,610,000			12,710,948			14,320,948		$	0.88		8.4	$	1,780
Granted		115,000			1,380,000			1,495,000			0.77
Exercised		(50,000	)		-			(50,000	)		0.17
Forfeited		-			(348,581	)		(348,581	)		0.94
Expired		(265,000	)		(286,329	)		(551,329	)		0.60
Outstanding, April 30, 2012		1,410,000			13,456,038			14,866,038			0.88		7.6	$	0
Vested and expected to vest as of April 30, 2012		1,410,000			13,456,038			14,866,038			0.88		7.6	$	0
Exercisable as of April 30, 2012		1,241,667			6,502,163			7,743,830			0.89		6.8	$	0

												Weighted
										Weighted		Average
				Directors						Average		Remaining		Aggregate
	Non-			and						Exercise		Contractual		Intrinsic
	Employees			Employees			Total			Price		Life (Years)		Value
Outstanding, May 1, 2010		1,890,000			1,427,948			3,317,948		$	0.77		4.4	$	250
Granted		70,000			11,781,000			11,851,000			0.89
Exercised		-			-			-
Forfeited		-			-			-
Expired		(500,000	)		(348,000	)		(848,000	)		0.58
Change in employee status		150,000			(150,000	)		-			1.18
Outstanding, April 30, 2011		1,610,000			12,710,948			14,320,948		$	0.88		8.4	$	1,780
Vested and expected to vest as of April 30, 2011		1,610,000			12,710,948			14,320,948		$	0.88		8.4	$	1,780
Exercisable as of April 30, 2011		1,533,333			2,461,644			3,994,977		$	0.85		5.7	$	597

Included in the balances outstanding as of May 1, 2011 in the table above are 10,000,000 options granted to the Company’s Chief Executive Officer and its President at the time of commencement of their employment in fiscal 2011, of which 5,000,000 contain only service-based vesting provisions and 5,000,000 contain both service and performance-based vesting provisions.  The service-based provisions of these options provide for vesting to occur monthly over a period of three years.  The performance-based conditions, which must be met prior to vesting to occur include: (i) closing of one or more financings of the Company in the aggregate amount of at least $5,000,000; (ii) bringing in new Company management; (iii) launching of personalized medicine (oncology) business; and (iv) commencing implementation of the Company’s business plan.  The determination as to whether these performance-based conditions have been met was to be made by the Company’s Board of Directors.  The service-based options, like all of the Company’s service-based options, are expensed on a straight-line basis.  Since the straight-line method is not available for performance or market-based share-based payments, the 5,000,000 performance-based options are being expensed on an accelerated basis.  The Company’s Board of Directors determined that in April 2011 each of the performance conditions under the awards were met.  As a result, the awards will be expensed based on each monthly vesting tranche.

Restricted Stock Grants

A summary of the activity related to restricted stock grants for the years ended April 30, 2012 and 2011 is as follows (dollars in thousands):

	2012					2011
				Weighted					Weighted
				Average					Average
				Grant Date					Grant Date
	Total			Fair Value		Total			Fair Value
	Shares			Per Share		Shares			Per Share
Nonvested, beginning of period		100,000		$	0.90		33,526		$	0.80
Granted		50,000			0.75		205,555			0.90
Vested		(125,000	)		0.87		(133,397	)		0.87
Forfeited		-					(5,684	)		0.77
Expired		-					-
Nonvested, end of period		25,000		$	0.75		100,000		$	0.90

The total fair value of shares vested during the years ended April 30, 2012 and 2011 was $84,000 and $133,000, respectively. As of April 30, 2012, there was $19,000 of unrecognized stock compensation expense related to nonvested restricted stock awards. This cost is expected to be recognized over a weighted average period of 0.3 years.

Stock Purchase Warrants

As of April 30, 2012, the Company has warrants outstanding for the purchase of 1,416,667 shares of its common stock, all of which were exercisable.  Of these warrants, 1,266,667 were issued in connection with the April 2011 financing arrangement and are accounted for as liabilities as further discussed in Note 7.  Activity related to these warrants, which expire at various dates through April 2016, is summarized as follows (dollars in thousands):

						Weighted
				Weighted		Average
	Number			Average		Remaining		Aggregate
	of			Exercise		Contractual		Intrinsic
	Shares			Price		Life (Years)		Value
Outstanding, May 1, 2011		1,912,019		$	0.73		3.7	$	524
Granted		-			-
Exercised		(495,352	)		0.20				234
Forfeited		-			-
Expired		-			-
Outstanding, April 30, 2012		1,416,667		$	0.91		3.8	$	0

						Weighted
				Weighted		Average
	Number			Average		Remaining		Aggregate
	of			Exercise		Contractual		Intrinsic
	Shares			Price		Life (Years)		Value
Outstanding, May 1, 2010		748,983		$	0.36		2.1	$	367
Granted		1,266,667			0.90
Exercised		(103,631	)		0.20				(83	)
Forfeited		-			-
Expired		-			-
Outstanding, April 30, 2011		1,912,019		$	0.73		3.7	$	524