Stock Compensation Information

9 Months Ended

Jan. 31, 2013

Stock Compensation Information [Abstract]

Stock Compensation Information

2.Stock Compensation Information

Share-based compensation expense includes the estimated fair value for share-based awards. Share-based compensation expenses are recognized over the vesting period of the awards, net of estimated forfeitures.  For the three and nine months ended January 31, 2013 and 2012, equity-based compensation expense from operations was comprised of the following (in thousands):

		Three Months Ended				Nine Months Ended
		January 31,				January 31,
		2013		2012		2013		2012
Direct costs of revenue	$	9	$	17	$	27	$	55
Product development		21		37		70		116
Selling, general and administrative		131		176		395		533
Total equity-based compensation	$	161	$	230	$	492	$	704

The following table shows remaining unrecognized compensation expense on a pre-tax basis related to all types of nonvested equity awards outstanding as of January 31, 2013. This table does not include an estimate for future grants that may be issued (in thousands).

Fiscal Year Ending April 30,		Amount
Remainder of 2013	$	102
2014		249
2015		147
2016		59
2017		3
Total	$	560

The cost above is expected to be recognized over a weighted-average period of 1.17 years.

We estimate the fair value of our share-based awards using the Black-Scholes option pricing model. The Black-Scholes option pricing model incorporates various assumptions including expected term, interest rates and expected volatility. Changes in the assumptions can materially affect the fair value estimates and ultimately how much we recognize as stock-based compensation expense. The fair values of our stock options are estimated at the date of grant. The weighted-average input assumptions used and resulting fair values for nine months ended January 31, 2013 and 2012, were as follows:

		Nine Months Ended
		January 31,
		2013		2012
Expected term (in years)		4.0		4.0
Risk-free interest rate		0.5	%	1.1	%
Volatility		77	%	89	%
Dividend yield		-		-
Weighted-average fair value of stock options granted during the year	$	1.01	$	2.38

The Company bases its expected term assumption on its historical experience and on the terms and conditions of the stock awards it grants to employees. The risk-free interest rate is based upon United States Treasury interest rates appropriate for the expected term of the awards. The expected volatility is based on the historical volatility of the Company’s common stock over the most recent period commensurate with the estimated expected term of the Company’s stock options. The Company did not pay common stock cash dividends in fiscal 2012 or year to date in fiscal 2013, and does not anticipate paying any cash dividends on common stock in the foreseeable future. Consequently, an expected dividend yield of zero is used in the Black-Scholes option pricing model.

We recognize expense only for the stock-based awards that are ultimately expected to vest. Therefore, the Company has developed an estimate of the number of awards expected to be forfeited prior to vesting (“forfeiture rate”). The Company uses a forfeiture rate that is estimated based on historical forfeiture experience, and is applied to all stock-based awards. The forfeiture rate used for the nine months ending January 31, 2013 and 2012 is 20%.  The Company recognizes stock-based compensation cost as an expense ratably on a straight-line basis over the requisite service period.

A summary of the Company’s stock option activity for the nine months ended January 31, 2013 is as follows:

			Weighted-	Weighted-
			average	average remaining		Aggregate
			exercise	contractual		intrinsic
	Shares		price	term (in years)		value (1)
Outstanding at April 30, 2012	2,632,115	$	3.18	7.24	$	4,449
Granted	398,500		1.27
Exercised	-		-
Cancelled/expired	(673,145)		2.66
Outstanding at January 31, 2013	2,357,470	$	3.00	6.86	$	23,557

(1) Aggregate intrinsic value is defined as the difference between the current market value and the exercise price and is estimated using the closing price of the Company’s common stock on the last trading day of the periods ended as of the dates indicated.

A summary of the Company’s nonvested stock option activity for the period ended January 31, 2013 is as follows:

			Weighted-
			average
			grant date
	Shares		fair value
Nonvested at April 30, 2012	1,005,036	$	1.61
Granted	398,500		1.01
Vested	(406,783)		1.52
Cancelled/expired	(430,517)		1.50
Nonvested at January 31, 2013	566,236		1.32

The total intrinsic value of awards exercised during the nine months ended January 31, 2013 and 2012 was $0 and $0.1 million, respectively. The total fair value of awards vested during the nine months ended January 31, 2013 and 2012 was $0.6 million and $0.9 million, respectively.  The total fair value of awards granted during the nine months ended January 31, 2013 and 2012 was $0.4 million and $1.1 million, respectively.