Note 9 - Stock Options

12 Months Ended

Apr. 30, 2012

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

9.             STOCK OPTIONS

At April 30, 2012, the Company had two equity-based compensation plans from which stock-based compensation awards are granted to eligible employees and consultants of the Company.  These stock-based compensation plans include: (i) 1991 Stock Option Plan (the “1991 Plan”) and (ii) 2010 Equity Incentive Plan (the “2010 Plan”).

According to the terms of the Company’s original 1991 stock option plan for which the Company originally reserved 675,000 shares of common stock, both incentive stock options and non-qualified stock options to purchase common stock of the Company may be granted to key employees, directors and consultants to the Company, at the discretion of the Board of Directors.  Incentive stock options may not be granted at prices that are less than the fair market value on the date of grant.  Non-qualified options may be granted at prices determined appropriate by the Board of Directors of the Company, but have not been granted at less than market value on the date of grant.  Generally, these options become exercisable and vest over one to five years and expire within 10 years of the date of grant.  The 1991 Plan also provides for accelerated vesting if there is a change in control of the Company.  As of April 30, 2012, there were options remaining outstanding to acquire 174,250 shares of common stock under the 1991 Plan.

In September 2010, the Company’s stockholders approved a second equity-based compensation plan.  The 2010 Plan is an omnibus plan that allows for equity awards including stock options (including incentive stock options and non-qualified options), stock appreciation rights, restricted shares, restricted share units, performance shares, performance units, and other equity-based awards payable in cash or stock to officers, directors, key employees and other service providers.  Under the 2010 Plan, the Company has the ability to grant up to 380,000 shares of common stock.  The number of shares granted to eligible participants will be determined by the Board of Directors on an annual basis based on Company and individual performance and a Compensation Committee analysis.  The awards under the 2010 Plan will include vesting provisions that will require participants (other than non-employee directors) to remain at the Company for a defined period of time.  Options and stock appreciation rights will expire 10 years after the grant date.  The 2010 Plan also includes a change of control provision which allows for accelerated vesting if there is a change of control of the Company.  As of April 30, 2012, there were options outstanding to acquire 60,000 shares of common stock and 7,200 shares of restricted common stock awards granted under the 2010 Plan.

 The Company accounts for its stock-based compensation plan in accordance with ASC Topic 718, Compensation-Stock Compensation.  ASC Topic 718 requires the measurement and recognition of compensation expense for all stock-based payment awards based on estimated fair value.  It further requires companies to estimate the fair value of stock-based payment awards on the date of the grant using an option pricing model.  The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods.

The fair value of each option award is estimated on the date of grant using the Black-Scholes option pricing model, which uses the following weighted average assumptions for the indicted periods.

	Year Ended April 30,
	2012	2011
Risk-free interest rate	2.97%	2.20%
Expected life, in years	6	6
Expected volatility	73.43 – 73.61%	62.45%
Dividend yield	0.0%	0.0%
Forfeiture rate	9.60%	9.30%

The Company uses historical data to estimate option exercises and employee terminations used in the model.  Expected volatility is based on monthly historical fluctuations of the Company’s common stock using the closing market value for the number of months of the expected term immediately preceding the grant.  The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of the grant for a bond with a similar term.

The Company receives a tax deduction for certain stock option exercises and disqualifying stock dispositions generally for the excess of the price at which the options are sold over the exercise prices of the options.  In accordance with ASC Topic 718, the Company reports any tax benefit from the exercise of stock options as financing cash flows.  For the years ended April 30, 2012 and 2011, there were no exercises of stock options which triggered tax benefits.

At April 30, 2012, there was approximately $168,000 of unrecognized compensation cost related to share-based payments which is expected to be recognized over a weighted-average period of 1.10 years.

The following tables represent equity award activity for the years ended April 30, 2012 and 2011:

	Number of Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contract Life
Outstanding options at April 30, 2010		257,750		$	2.36	4.23 Years
Granted		26,000			3.88
Exercised		(1,500	)		1.69
Forfeited		(2,500	)		--
Outstanding options at April 30, 2011		279,250		$	2.48	3.77 Years
Granted		85,000			5.11
Exercised		(95,000	)		0.81
Forfeited		(35,000	)		--
Outstanding options at April 30, 2012		234,250		$	3.78	5.32 Years
Outstanding exercisable at April 30, 2012		155,750		$	3.26	3.51 Years

	Number of Shares		Weighted- Average Price		Weighted- Average Remaining Contract Life
Outstanding awards at April 30, 2011		--	$	--
Granted		7,200		5.01
Exercised		--		--
Forfeited		--		--
Outstanding awards at April 30, 2012		7,200	$	5.01	9.00 Years
Outstanding vested at April 30, 2012		--	$	--

Shares available for future stock option grants to employees, officers, directors and consultants of the Company under the existing 1991 Plan and 2010 Plan were 26,750 and 312,800, respectively, at April 30, 2012.  At April 30, 2012 the aggregate intrinsic value of options outstanding was approximately $393,000, and the aggregate intrinsic value of options exercisable was approximately $349,000.  The Company recognized share-based compensation expense of $91,000 and $36,000 for the years ended April 30, 2012 and 2011, respectively.

During the year ended April 30, 2012, the Company granted 85,000 options that had a weighted average grant date fair value of $5.11 per share.  The Company also granted 7,200 restricted stock awards whose average grant date fair value was $5.01 per restricted share.

The following table summarizes information about equity awards outstanding at April 30, 2012:

	Options Outstanding					Options Exercisable
Range of Exercise Prices	Number Outstanding at April 30, 2012		Weighted- Average Remaining Contractual Life	Weighted- Average Exercise Price		Number Exercisable at  April 30, 2012		Weighted- Average Exercise Price
$0.01 - $1.00		--	--		--		--		--
$1.01 - $2.00		47,500	0.59 years	$	1.25		47,500	$	1.25
$2.01 - $3.00		--	--		--		--		--
$3.01 - $4.00		111,000	5.18 years	$	3.73		92,500	$	3.71
$4.01 - $5.00		--	--		--		--		--
$5.01 - $6.00		65,000	8.82 years	$	5.17		5,000	$	5.90
$6.01 - $7.00		--	--		--		--		--
$7.01 - $8.00		10,750	6.36 years	$	7.05		10,750	$	7.05
Total		234,250	5.32 years	$	3.78		155,750	$	3.26