Share-Based Payments

The Company has in place a 2010 Equity Incentive Plan and a 2008 Equity Incentive Plan. In general, these plans provide for stock-based compensation in the form of (i) Non-statutory Stock Options; (ii) Restricted Stock Awards; and (iii) Stock Appreciation Rights to the Company’s employees, directors and non-employees. The plans also provide for limits on the aggregate number of shares that may be granted, the term of grants and the strike price of option awards.

Stock-based compensation in the amount of $237,000 and $567,000 was recognized for the three months ended January 31, 2017 and 2016, respectively, and $1.9 million and $2.1 million for the nine months ended January 31, 2017 and 2016, respectively. Stock-based compensation expense was recognized as follows (table in thousands):



	Three Months Ended January 31,				Nine Months Ended January 31,
	2017		2016		2017		2016
General and administrative	$	184	$	488	$	1,482	$	1,600
Sales and marketing	7		27		194		173
Research and development	44		49		174		262
TOS cost of sales	2		2		49		28
POS cost of sales	—		1		2		27
Total stock-based compensation expense	$	237	$	567	$	1,901	$	2,090

Stock Option Grants

Black-Scholes assumptions used to calculate the fair value of options granted during the three and nine months ended January 31, 2017 and 2016 were as follows:



	Three Months Ended January 31,		Nine Months Ended January 31,
	2017	2016	2017	2016
Expected term in years	3	2.5 - 6	3 - 6	2.5 - 6
Risk-free interest rates	0.59% - 1.90%	0.995% - 1.75%	0.59% - 1.90%	0.995% - 1.77%
Volatility	72.12% - 87.96%	82.72% - 91.98%	72.12% - 87.96%	82.72% - 92.32%
Dividend yield	—%	—%	—%	—%

The weighted average fair value of stock options granted during the three months ended January 31, 2017 and 2016 was $1.35 and $3.12, respectively. The weighted average fair value of stock options granted during the nine months ended January 31, 2017 and 2016 was $1.71 and $3.6, respectively. The Company’s stock options activity for the nine months ended January 31, 2017 was as follows:



	Non- Employees		Directors and Employees		Total		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)	Aggregate Intrinsic Value
Outstanding, May 1, 2016	51,250		2,161,507		2,212,757		$	5.58	6.1	$	10,000
Granted	—		2,420,681		2,420,681		1.99		7.0	6,688,000
Exercised	—		—		—		—
Forfeited	—		(421,487	)	(421,487	)	2.03
Canceled	—		(1,793,779	)	(1,793,779	)	4.92
Expired	(1,250	)	(108,218	)	(109,468	)	7.86

Outstanding, January 31, 2017	50,000		2,258,704		2,308,704		2.76		6.6	$	6,201,000

Vested and expected to vest as of January 31, 2017	50,000		2,258,704		2,308,704		2.76		6.6	$	6,201,000

Exercisable as of January 31, 2017	33,336		1,954,383		1,987,719		2.97		6.0	$	4,672,000

Included in the forfeited balance in the table above are 203,043 options (which vest based on performance criteria) granted to each of the Company’s Chief Executive Officer and its President as of November 5, 2013 as part of their employment agreements. Performance-based options are expensed on an accelerated basis once the Company determines it is probable that the performance-based conditions will be met. It was determined the performance conditions will not be set and as such the 203,043 options have been forfeited. Additionally, included in the forfeited balance in the table above are 209,383 options which were granted to the previous CEO as part of his yearly compensation beginning in November 2016. The CEO has transitioned to Chairman of the Board of Directors as of January 31, 2017.

On July 21, 2016, the Company and certain members of its senior management team agreed to exchange existing options to purchase shares of the Company's common stock with new options. The new options have a lower exercise price for fewer shares and have the same vesting schedules and the same termination expiration dates as the existing options. The Company used the Black Scholes valuation method to determine if the modification created additional stock option expense. As a result of the option exchange, an aggregate of 1,793,781 existing options with exercise prices ranging from $4.55 to $6.96 per share were exchanged for an aggregate of 1,568,191 new options with exercise prices of $2.10 per share. Due to the modification the Company had an additional stock option expense of $414,756, $330,945 of which was recognized in the first quarter ended July 31, 2016, 38,590 which was recognized in the second quarter ended October 31, 2016, $3,289 which was recognized in the third quarter ended January 31, 2017 and $41,932 of which will be recognized over the next year and a half as the options continue to vest.

Stock Purchase Warrants

As of January 31, 2017 and April 30, 2016, the Company had warrants outstanding for the purchase of 2,109,840 shares of its common stock, all of which were exercisable. Activity related to these warrants, which expire at various dates through March 2020, is summarized as follows:



	Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)	Aggregate Intrinsic Value
Outstanding, May 1, 2016	2,109,840	$	5.54	3.6	$	—
Granted	—	—		—	—
Exercised	—	—		—	—
Expired	—	—		—	—

Outstanding, January 31, 2017	2,109,840	$	5.54	2.9	$	—