6. EQUITY COMPENSATION PLANS

12 Months Ended

Apr. 30, 2016

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

7. EQUITY COMPENSATION PLANS

Stock Incentive Plans

We currently maintain six stock incentive plans referred to as the 2011 Plan, the 2010 Plan, the 2009 Plan, the 2005 Plan, the 2003 Plan, and the 2002 Plan (collectively referred to as the “Stock Plans”). The 2011, 2010, 2009, 2005 and 2003 Plans were approved by our stockholders while the 2002 Plan was not submitted for stockholder approval. The Stock Plans provide for the granting of stock options, restricted stock awards and other forms of share-based awards to purchase shares of our common stock at exercise prices not less than the fair market value of our common stock at the date of grant.

As of April 30, 2016, we had an aggregate of 39,561,165 shares of our common stock reserved for issuance under the Stock Plans, of which, 23,751,261 shares were subject to outstanding options and 15,809,904 shares were available for future grants of share-based awards.

Stock Options – Stock options granted under our Stock Plans are granted at an exercise price not less than the fair market value of our common stock on the date of grant. The options generally vest over a two to four year period and expire ten years from the date of grant, if unexercised. However, certain option awards provide for accelerated vesting if there is a change in control (as defined in the Stock Plans).

The estimated fair value of stock options are measured at the grant date, using a fair value based method, such as a Black-Scholes option valuation model, and is amortized as compensation expense on a straight-line basis over the requisite service period of the award, which is generally the vesting period. The use of a valuation model requires us to make certain estimates and assumptions with respect to selected model inputs. The expected volatility is based on the daily historical volatility of our common stock covering the estimated expected term. The expected term of options granted reflects actual historical exercise activity and assumptions regarding future exercise activity of unexercised, outstanding options. The risk-free interest rate is based on U.S. Treasury notes with terms within the contractual life of the option at the time of grant. The expected dividend yield assumption is based on our expectation of future dividend payouts. We have never declared or paid any cash dividends on our common stock and currently do not anticipate paying such cash dividends. In addition, guidance requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The fair value of stock options on the date of grant and the weighted-average assumptions used to estimate the fair value of the stock options using the Black-Scholes option valuation model for fiscal years ended April 30, 2016, 2015 and 2014, were as follows:

	Year Ended April 30,
	2016		2015		2014
Risk-free interest rate		1.66%		1.95%		1.32%
Expected life (in years)		5.96		5.74		5.84
Expected volatility		104.74%		111.78%		113.92%
Expected dividend yield		–		–		–

The following summarizes our stock option transaction activity for fiscal year ended April 30, 2016:

Stock Options	Shares			Weighted Average Exercisable Price		Weighted Average Remaining Contractual Term (years)		Aggregate Intrinsic Value (1)
Outstanding, May 1, 2015		20,708,672			$1.54
Granted		4,173,260			$1.26
Exercised		(177,266	)		$0.79
Canceled or expired		(953,405	)		$1.87
Outstanding, April 30, 2016		23,751,261			$1.48		6.68	$	–
Exercisable and expected to vest		23,652,443			$1.48		6.67	$	–
Exercisable, April 30, 2016		20,153,764			$1.51		6.31	$	–

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⁽¹⁾ Aggregate intrinsic value represents the difference between the exercise price of an option and the closing market price of our common stock on April 29, 2016 (the last trading day of fiscal year 2016), which was $0.3541 per share.

The weighted-average grant date fair value of options granted to employees during the fiscal years ended April 30, 2016, 2015 and 2014 was $1.01, $1.43 and $1.19 per share, respectively.

The aggregate intrinsic value of stock options exercised during the fiscal years ended April 30, 2016, 2015 and 2014 was $93,000, $192,000 and $908,000, respectively. Cash received from stock options exercised during fiscal years ended April 30, 2016, 2015 and 2014, totaled $138,000, $298,000 and $944,000, respectively, net of issuance costs of $1,000, $3,000 and $4,000, respectively.

We issue shares of common stock that are reserved for issuance under the Stock Plans upon the exercise of stock options, and we do not expect to repurchase shares of common stock from any source to satisfy our obligations under our compensation plans.

As of April 30, 2016, the total estimated unrecognized compensation cost related to non-vested employee stock options was $2,829,000. This cost is expected to be recognized over a weighted average vesting period of 1.56 years based on current assumptions.

Restricted Stock Awards – Restricted stock awards are grants that entitle the holder to shares of common stock subject to certain terms. The fair value of restricted stock awards is the quoted market price of our stock on the grant date, and is charged to expense over the period of vesting. Restricted stock awards associated with non-performance conditions vest over the requisite service period and restricted stock awards associated with performance conditions are subject to vesting upon completion of the underlying performance condition. Performance based restricted stock awards are subject to forfeiture if the underlying performance condition is not achieved and all restricted stock awards are subject to forfeiture to the extent that the recipient’s service is terminated prior to the awards becoming vested.

During fiscal year ended April 30, 2014, the weighted-average grant date fair value of restricted stock awards granted and vested was $1.39 per share with an aggregate fair value of $139,000. No restricted stock awards were granted or vested during fiscal years ended April 30, 2016 and 2015. As of April 30, 2016, there were no restricted stock awards outstanding, and accordingly, there was no remaining unrecognized compensation cost.

Employee Stock Purchase Plan

On October 21, 2010, our stockholders approved our 2010 Employee Stock Purchase Plan (the “ESPP”). The ESPP allows eligible employees on a voluntary basis to purchase shares of our common stock directly from us. Under the ESPP, we sell shares to participants at a price equal to the lesser of 85% of the fair market value of our common stock at the (i) beginning of a six-month offering period, or (ii) end of the six-month offering period. The ESPP provides for two six-month offering periods each year; the first offering period begins on the first trading day on or after each November 1; the second offering period begins on the first trading day on or after each May 1.

A total of 5,000,000 shares are reserved for issuance under the ESPP, of which 1,408,659 shares remained available to purchase at April 30, 2016, and are subject to adjustment as provided in the ESPP for stock splits, stock dividends, recapitalizations and other similar events. During the fiscal years ended April 30, 2016, 2015 and 2014, 1,034,397, 497,453 and 498,050 shares of our common stock were purchased, respectively, under the ESPP at a weighted average purchase price per share of $0.52, $1.22 and $1.09, respectively.

The fair value of the shares purchased under the ESPP were determined using a Black-Scholes option pricing model (see explanation of valuation model inputs above under “Stock Options”), and is recognized as expense on a straight-line basis over the requisite service period (or six-month offering period). The weighted average grant date fair value of purchase rights under the ESPP during fiscal years ended April 30, 2016, 2015 and 2014 was $0.34, $0.56 and $0.55, respectively, based on the following Black-Scholes option valuation model inputs:

	Year Ended April 30,
	2016		2015		2014
Risk-free interest rate		0.18%		0.06%		0.08%
Expected life (in years)		0.50		0.50		0.50
Expected volatility		46.14%		63.54%		93.39%
Expected dividend yield		–		–		–

Share-based Compensation Expense

Total share-based compensation expense related to share-based awards issued under our equity compensation plans for the fiscal years ended April 30, 2016, 2015 and 2014 was comprised of the following:

	2016		2015		2014
Cost of contract manufacturing	$	41,000	$	59,000	$	68,000
Research and development		2,124,000		2,904,000		2,804,000
Selling, general and administrative		2,733,000		3,739,000		3,335,000
Total	$	4,898,000	$	6,702,000	$	6,207,000
Share-based compensation from:
Stock options	$	4,720,000	$	6,465,000	$	5,803,000
Restricted stock awards		–		–		139,000
ESPP		178,000		237,000		265,000
	$	4,898,000	$	6,702,000	$	6,207,000

Share-based compensation expense recorded during fiscal years ended April 30, 2016, 2015 and 2014 associated with share-based awards granted to non-employees amounted to $109,000, $289,000 and $391,000, respectively.

As of April 30, 2016, the total estimated unrecognized compensation cost related to non-vested stock options granted to non-employees was $9,000 based on an April 30, 2016 measurement date. This cost is expected to be recognized over a weighted average vesting period of 0.89 years.

Due to our net loss position, no tax benefits have been recognized in the consolidated statements of cash flows.