6. STOCKHOLDERS' EQUITY

9 Months Ended

Jan. 31, 2015

Equity [Abstract]

6. STOCKHOLDERS' EQUITY

Sales of Common and Preferred Stock

Our ability to continue our clinical trials and development efforts is highly dependent on the amount of cash and cash equivalents on hand combined with our ability to raise additional capital to support our future operations through one or more methods, including but not limited to, issuing additional equity.

With respect to financing our operations through the issuance of equity, the following is a summary of our financing activity during the nine months ended January 31, 2015.

On December 23, 2014, we filed a shelf registration statement on Form S-3, File number 333-201245, which became effective January 15, 2015 (“January 2015 Shelf”), under which we may offer and sell, from time to time, in one or more offerings, either individually or in combination, shares of our common stock or preferred stock for gross proceeds not to exceed $150,000,000. As of January 31, 2015, we had not issued any shares of common stock or preferred stock under the January 2015 Shelf.

Common Stock

On December 27, 2012, we entered into an At Market Sales Issuance Agreement (“December 2012 AMI Agreement”) with MLV & Co. LLC (“MLV”), pursuant to which we may sell shares of our common stock through MLV, as agent, for aggregate gross proceeds of up to $75,000,000, in registered transactions from our shelf registration statement on Form S-3 (File No. 333-180028), which was declared effective by the SEC on April 12, 2012. During the nine months ended January 31, 2015, we sold 3,983,360 shares of common stock at market prices under the December 2012 AMI Agreement for aggregate gross proceeds of $6,204,000 before deducting commissions and other issuance costs of $162,000. As of January 31, 2015, we had raised the full amount of gross proceeds available to us under the December 2012 AMI Agreement.

On June 13, 2014, we entered into an At Market Issuance Sales Agreement (“June 2014 AMI Agreement”), with MLV, pursuant to which we may sell shares of our common stock through MLV, as agent, for aggregate gross proceeds of up to $25,000,000, in registered transactions from our shelf registration statement on Form S-3 (File No. 333-180028). During the nine months ended January 31, 2015, we sold 869,504 shares of common stock at market prices under the June 2014 AMI Agreement for aggregate gross proceeds of $1,193,000 before deducting commissions and other issuance costs of $31,000. As of January 31, 2015, aggregate gross proceeds of up to $23,807,000 remained available under the June 2014 AMI Agreement.

Subsequent to January 31, 2015 and through March 12, 2015, we sold 4,354,954 shares of common stock at market prices under the June 2014 AMI Agreement for aggregate gross proceeds of $6,204,000. As of March 12, 2015, aggregate gross proceeds of $17,603,000 remained available under the June 2014 AMI Agreement.

Preferred Stock

On June 13, 2014, we entered into a separate At Market Issuance Sales Agreement (“Series E AMI Agreement”) with MLV, pursuant to which we may issue and sell shares of our Series E Preferred Stock through MLV, as agent, for aggregate gross proceeds of up to $30,000,000, in registered transactions from our shelf registration statement on Form S-3 (File No. 333-193113), which was declared effective by the SEC on January 16, 2014. During the nine months ended January 31, 2015, we sold 405,004 shares of our Series E Preferred Stock at market prices under the Series E AMI Agreement for aggregate gross proceeds of $10,121,000 before deducting commission and other issuance costs of $553,000. As of January 31, 2015, aggregate gross proceeds of up to $19,879,000 remained available under the Series E AMI Agreement.

In addition, the Series E Preferred Stock is classified as permanent equity in accordance with FASB Accounting Standards Codification Topic 480, Distinguishing Liabilities from Equity.

Series E Preferred Stock Rights and Preferences

The rights and preferences of the Series E Preferred Stock include:

(i) The holders are entitled to receive a 10.50% per annum cumulative quarterly dividend, payable in cash, on or about the 1^st day of each of January, April, July, and October;

(ii) The dividend may increase to a penalty rate of 12.50% if: (a) we fail to pay dividends for any four consecutive or nonconsecutive quarterly dividend periods, or (b) once the Series E Preferred Stock becomes initially eligible for listing on a national securities exchange, we fail, for 180 or more consecutive days, to maintain such listing;

(iii) Following a change of control of the Company (as defined in the Certificate of Designations) by a person or entity, we (or the acquiring entity) may, at our option, redeem the Series E Preferred Stock, in whole but not in part, within 120 days after the date on which the change of control has occurred for cash, at the redemption price;

(iv) We may not redeem the Series E Preferred Stock prior to February 11, 2017 (except following a change of control) and, on and after February 11, 2017, we may redeem the Series E Preferred Stock for cash at our option, from time to time, in whole or in part, at the redemption price;

(v) The redemption price is $25.00 per share, plus any accrued and unpaid dividends (whether or not earned or declared) to, but excluding, the redemption date;

(vi) The liquidation preference is $25.00 per share, plus any accrued and unpaid dividends (whether or not earned or declared);

(vii) The Series E Preferred Stock has no stated maturity date or mandatory redemption and is senior to all of the Company’s other securities;

(viii) There is a general conversion right with respect to the Series E Preferred Stock with an initial conversion price of $3.00, a special conversion right upon a change of control, and a market trigger conversion at our option in the event of Market Trigger (as defined in the Certificate of Designations); and

(ix) The holders of the Series E Preferred Stock have no voting rights, except as defined in the Certificate of Designations.

The foregoing description does not purport to be complete and is qualified in its entirety by reference to the Certificate of Designations which was filed as Exhibit 3.11 to the Company’s Form 8-A filed with the SEC on February 12, 2014.

Series E Preferred Stock Dividends

The following table summarizes the Series E Preferred Stock dividend activity for the nine months ended January 31, 2015:

Declaration Date	Dividend Per Share	Annualized Percentage Rate	Liquidation Preference	Accrual Period	Record Date	Payment Date
6/10/2014	$0.65625	10.50%	$25.00	4/1/2014 – 6/30/2014	6/20/2014	7/1/2014
9/8/2014	$0.65625	10.50%	$25.00	7/1/2014 – 9/30/2014	9/19/2014	10/1/2014
12/9/2014	$0.65625	10.50%	$25.00	10/1/2014 – 12/31/2014	12/19/2014	1/2/2015

Shares of Common Stock Authorized and Reserved for Future Issuance

We are authorized to issue up to 325,000,000 shares of our common stock. As of January 31, 2015, 184,244,698 shares of our common stock were issued and outstanding. In addition, our common stock outstanding as of January 31, 2015 excluded the following shares of common stock reserved for future issuance:

· 25,002,996 shares of common stock reserved for issuance under outstanding option grants and available for issuance under our stock incentive plans;

· 2,714,717 shares of common stock reserved for and available for issuance under our Employee Stock Purchase Plan;

· 273,280 shares of common stock issuable upon exercise of outstanding warrants; and

· 34,220,116 shares of common stock issuable upon conversion of our outstanding Series E Preferred Stock ⁽¹⁾.

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⁽¹⁾ The Series E Preferred Stock is convertible into shares of common stock at a conversion price of $3.00 per share. If all outstanding Series E Preferred Stock were converted at the $3.00 per share conversion price, the holders of Series E Preferred Stock would receive an aggregate of 9,833,366 shares of our common stock. However, we have reserved the maximum number of shares of our common stock that could be issued upon a change of control event assuming our shares of common stock are acquired for consideration of $0.855 per share or less. In this scenario, each outstanding share of Series E Preferred Stock could be converted into 29 shares of common stock, as further described in the Certificate of Designations, filed as Exhibit 3.11 to the Company’s Form 8-A filed with the SEC on February 12, 2014.