Equity Compensation Plans

9 Months Ended

Jan. 31, 2023

Share-Based Payment Arrangement [Abstract]

Equity Compensation Plans

Note 5 – Equity Compensation Plans

Stock Incentive Plans

As of January 31, 2023, we had an aggregate of 8,348,068 shares of our common stock reserved for issuance under our stock incentive plans, of which 4,075,987 shares were subject to outstanding stock options, restricted stock units (“RSUs”) and performance stock units (“PSUs”) and 4,272,081 shares were available for future grants of stock-based awards.

Stock Options

The following summarizes our stock option transaction activity for the nine months ended January 31, 2023:

	Stock Options			Grant Date Weighted Average Exercise Price
	(in thousands)
Outstanding at May 1, 2022		2,505		$	6.88
Granted		–		$	–
Exercised		(254	)	$	6.84
Canceled or expired		(53	)	$	9.94
Outstanding at January 31, 2023		2,198		$	6.81

Restricted Stock Units

The following summarizes our RSUs transaction activity for the nine months ended January 31, 2023:

	Shares			Weighted Average Grant Date Fair Value
	(in thousands)
Outstanding at May 1, 2022		642		$	14.89
Granted		738		$	17.65
Vested		(309	)	$	14.08
Forfeited		(34	)	$	17.15
Outstanding at January 31, 2023		1,037		$	17.02

Performance Stock Units

The Compensation Committee of the Board of Directors grants PSUs to our executives. The PSUs are subject to annual vesting over three consecutive fiscal year performance periods with the first one-third vesting on April 30 of the year following the grant date, and each successive one-third vesting on April 30 of the following two years respectively (each a “Performance Period”). Each PSU that vests represent the right to receive one share of our common stock. The number of shares that will vest for each Performance Period, if any, is based upon the attainment of certain predetermined financial metrics for each such Performance Period. Depending on the actual financial metrics achieved relative to the target financial metrics for such Performance Periods, the number of PSUs issued could range from 0% to 200% of the target amount. The number of granted shares included in the table below is based on a maximum 200% achievement of each financial metric during each Performance Period (the “Maximum Performance Target”). If a financial metric is achieved at a rate below the Maximum Performance Target, or is not achieved, the corresponding portion of the PSUs that do not vest are forfeited.

The following summarizes our PSUs transaction activity for the nine months ended January 31, 2023:

	Shares		Weighted Average Grant Date Fair Value
	(in thousands)
Outstanding at May 1, 2022		233	$	25.31
Granted		609	$	18.09
Vested		–	$	–
Forfeited		–	$	–
Outstanding at January 31, 2023		842	$	20.09

Employee Stock Purchase Plan

The Avid Bioservices, Inc. 2010 Employee Stock Purchase Plan (the “ESPP”) is a stockholder-approved plan under which employees can purchase shares of our common stock, based on a percentage of their compensation, subject to certain limits. The purchase price per share is equal to the lower of 85% of the fair market value of our common stock on the first trading day of the six-month offering period or on the last trading day of the six-month offering period. During the nine months ended January 31, 2023, a total of 68,646 shares of our common stock were purchased under the ESPP at a weighted average purchase price per share of $12.22. As of January 31, 2023, we had 963,316 shares of our common stock reserved for issuance under the ESPP.

Stock-Based Compensation

Stock-based compensation expense for the three and nine months ended January 31, 2023 and 2022 was comprised of the following (in thousands):

	Three Months Ended January 31,				Nine Months Ended January 31,
	2023		2022		2023		2022
Cost of revenues	$	1,017	$	694	$	2,749	$	1,855
Selling, general and administrative		1,727		1,417		4,678		3,497
Total stock-based compensation	$	2,744	$	2,111	$	7,427	$	5,352

As of January 31, 2023, the total estimated unrecognized compensation cost related to non-vested stock options and RSUs was $1.6 million and $16.6 million, respectively. These costs are expected to be recognized over weighted average vesting periods of 1.2 and 2.8 years, respectively.

As of January 31, 2023, there was $11.0 million of total estimated unrecognized compensation cost related to non-vested PSUs associated with the Performance Periods ending April 30, 2023, 2024 and 2025. These costs are expected to be recognized over the weighted average vesting period of 1.1 years, however, we will assess the likelihood of achieving the predetermined financial metrics associated with each Performance Period on a quarterly basis and the expense recognized, if any, will be adjusted accordingly.