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5. EQUITY COMPENSATION PLANS
12 Months Ended
Apr. 30, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
7. EQUITY COMPENSATION PLANS
5. 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, 2018, we had an aggregate of 5,316,526 shares of our common stock reserved for issuance under the Stock Plans, of which, 3,597,738 shares were subject to outstanding options and 1,718,788 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. 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, 2018, 2017 and 2016, were as follows:

 

    Fiscal Year Ended April 30,  
    2018     2017     2016  
Risk-free interest rate     2.21%       1.32%       1.66%  
Expected life (in years)     6.19       6.12       5.96  
Expected volatility     110.43%       111.30%       104.74%  
Expected dividend yield                  

 

The following summarizes our stock option transaction activity for fiscal year ended April 30, 2018:

 

Stock Options   Shares    

Weighted

Average

Exercisable

Price

   

Weighted

Average

Remaining

Contractual

Term (years)

   

Aggregate

Intrinsic

Value (1)

 
Outstanding, May 1, 2017     4,081,548     $ 8.77                  
Granted     686,097     $ 4.16                  
Exercised     (222,255 )   $ 3.38                  
Canceled or expired     (947,652 )   $ 8.90                  
Outstanding, April 30, 2018     3,597,738     $ 8.74       4.12     $ 335,000  
                                 
Exercisable and expected to vest     3,597,738     $ 8.74       4.11     $ 335,000  
Exercisable, April 30, 2018     2,891,282     $ 9.86       2.87     $ 219,000  

______________

  (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 30, 2018, which was $3.67 per share.

 

The weighted-average grant date fair value of options granted to employees during the fiscal years ended April 30, 2018, 2017 and 2016 was $3.50, $2.86 and $7.09 per share, respectively.

 

The aggregate intrinsic value of stock options exercised during the fiscal years ended April 30, 2018, 2017 and 2016 was $173,000, $11,000 and $93,000, respectively. Cash received from stock options exercised during fiscal years ended April 30, 2018, 2017 and 2016, totaled $752,000, $31,000 and $138,000, 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, 2018, the total estimated unrecognized compensation cost related to non-vested employee stock options was $2,232,000. This cost is expected to be recognized over a weighted average vesting period of 2.63 years based on current assumptions.

 

Employee Stock Purchase Plan

 

We have reserved a total of 2,142,857 shares of our common stock to be purchased under our Employee Stock Purchase Plan (the “ESPP”), of which 1,271,409 shares remained available to purchase at April 30, 2018, and are subject to adjustment as provided in the ESPP for stock splits, stock dividends, recapitalizations and other similar events. 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 fiscal year; the first offering period begins on the first trading day on or after each May 1; the second offering period begins on the first trading day on or after each November 1. During the fiscal years ended April 30, 2018, 2017 and 2016, 88,327, 270,075 and 147,769 shares of our common stock were purchased, respectively, under the ESPP at a weighted average purchase price per share of $3.59, $1.95 and $3.65, 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, 2018, 2017 and 2016 was $1.65, $1.07 and $2.40, respectively, based on the following Black-Scholes option valuation model inputs:

 

    Fiscal Year Ended April 30,  
    2018     2017     2016  
Risk-free interest rate     1.10%       0.46%       0.18%  
Expected life (in years)     0.50       0.50       0.50  
Expected volatility     75.18%       105.27%       46.14%  
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, 2018, 2017 and 2016 was comprised of the following:

 

    2018     2017     2016  
Cost of contract manufacturing   $ 378,000     $ 108,000     $ 41,000  
Selling, general and administrative     820,000       1,553,000       2,599,000  
Discontinued operations     340,000       1,702,000       2,258,000  
Total   $ 1,538,000     $ 3,363,000     $ 4,898,000  
                         
Share-based compensation from:                        
Stock options   $ 1,402,000     $ 3,094,000     $ 4,720,000  
ESPP     136,000       269,000       178,000  
    $ 1,538,000     $ 3,363,000     $ 4,898,000  

 

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