Stockholders' Equity

12 Months Ended

Apr. 30, 2013

Stockholders' Equity [Abstract]

Stockholders' Equity

Note 11. Stockholders’ Equity

Preferred Stock

In June 2011, the Company issued through a private placement 1,666,667 shares of preferred stock to a group of related party institutional investors at a price of $2.40 per share for a total of $4.0 million.  The preferred stock will automatically convert on a 1-for-1 basis into shares of common stock of the Company upon the earlier of the second anniversary of the financing, June 30, 2013, or the date on which the Company’s common stock has an average closing price above $4.00 per share during the preceding 30 trading days. The preferred stock includes an annual dividend of 10% payable in cash or stock at the Company’s option.  The preferred stock has no other provisions or preferences.  During fiscal year 2013 and 2012, the Company paid $0.4 million ($0.24 per preferred share) and $0.3 million ($0.20 per preferred share) in preferred stock dividends, respectively. As of both April 30, 2013 and April 30, 2012, the Company had no accrued preferred stock dividends.  On June 30, 2013 the preferred shares were automatically converted to 1,666,667 shares of common stock.

The Company may issue up to 7,931,370 shares of preferred stock in one or more series upon authorization by its board of directors. The board of directors, without further approval of the stockholders, is authorized to fix the dividend rights and terms, conversion rights, voting rights, redemption rights and terms, liquidation preferences, and any other rights, preferences, privileges and restrictions applicable to each series of preferred stock.

Stock Compensation Information

In fiscal 2011 the Company’s shareholders approved the 2010 Stock Plan (the “2010 Stock Plan”). Under the 2010 Stock Plan the Company may make awards to issue up to 1,500,000 shares of common stock to eligible employees, consultants and directors. Stock options granted under the 2010 Stock Plan generally vest over four years, are exercisable to the extent vested and expire 10 years from the date of grant. Under the 2010 Stock Plan the Company may grant options at prices not less than the fair market value at the date of grant. Under the 2001 Stock Option Plan (the “2001 Option Plan”) which expired as of September 2010, the Company was able to grant options to eligible employees, directors, and consultants at prices not less than the fair market value at the date of grant for incentive stock options and not less than 85% of the fair market value at the date of grant for non-statutory stock options. Options granted under the 2001 Option Plan generally vest over four years, are exercisable to the extent vested, and expire 10 years from the date of grant.

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 fiscal years ended April 30, 2013, 2012, and 2011 equity-based compensation expense was comprised of the following (in thousands):

		April 30, 2013		April 30, 2012		April 30, 2011
Direct costs of revenue	$	35	$	72	$	63
Product development		92		152		154
Selling, general, and administrative		466		697		743
Total equity-based compensation	$	593	$	921	$	960

The following table shows remaining unrecognized compensation expense on a pre-tax basis related to all types of nonvested equity awards outstanding as of April 30, 2013. This table does not include an estimate for future grants that may be issued (in thousands).

Fiscal Year Ending April 30,		Amount
2014	$	238
2015		142
2016		58
2017		3
Total	$	441

The cost above is expected to be recognized over a weighted-average period of 1.16 years.

A summary of the Company’s stock option activity for the fiscal year ended April 30, 2013 is as follows:

			Weighted-	Weighted-
			average	average remaining		Aggregate
			exercise	contractual		intrinsic
	Shares		price	term (in years)		value (1)
Outstanding at April 30, 2010	1,663,497	$	3.34	7.12	$	1,271,375
Granted	656,100		3.38
Exercised	(16,000)		1.28
Cancelled/expired	(151,414)		3.15
Outstanding at April 30, 2011	2,152,183		3.38	6.91		550,903
Granted	839,400		2.38
Exercised	(124,500)		1.40
Cancelled/expired	(234,968)		3.11
Outstanding at April 30, 2012	2,632,115		3.18	7.24		4,449
Granted	403,500		1.27
Exercised	-		-
Cancelled/expired	(1,221,016)		3.07
Outstanding at April 30, 2013	1,814,599		2.83	6.92		15,551

(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 fiscal year ended April 30, 2013 is as follows:

		Weighted-
		average
		fair
	Shares	value
Nonvested at April 30, 2012	1,005,036	1.61
Granted	403,500	1.01
Vested	(480,352)	1.52
Cancelled/expired	(480,668)	1.48
Nonvested at April 30, 2013	447,516	1.32

The total intrinsic value of awards exercised during the year ended April 30, 2013, 2012, and 2011 was $0, $0.1 million, and $26,339, respectively. The total fair value of awards vested during the year ended April 30, 2013, 2012, and 2011 was $0.7 million, $0.3 million, and $1.1 million, respectively. The total fair value of awards granted during the year ended April 30, 2013, 2012, and 2011 was $0.4 million, $1.1 million, and $1.4 million, respectively.

Additional information regarding options outstanding at April 30, 2013 is as follows:

	Options outstanding				Options exercisable
		Average		Weighted-			Weighted-
		remaining		average			average
	Number	contractual		exercise	Number		exercise
Range of exercise prices	outstanding	life (years)		price	outstanding		price
$    0.86 - 1.26	235,000	8.80	$	1.16	15,000	$	1.10
1.34 - 1.80	181,500	8.78		1.42	132,352		1.42
1.85 - 2.15	183,194	7.63		1.94	129,943		1.94
2.25 - 2.55	122,000	4.04		2.51	122,000		2.51
2.60 - 2.60	288,707	6.01		2.60	283,344		2.60
2.65 - 2.86	9,625	6.49		2.69	8,541		2.69
2.90 - 2.90	217,500	8.01		2.90	159,128		2.90
3.00 - 3.46	90,962	6.93		3.13	71,263		3.15
3.56 - 3.56	190,762	7.01		3.56	153,186		3.56
3.75 - 6.70	295,349	5.09		5.29	293,077		5.31

Options to purchase 1,367,834 and 1,627,079 shares at weighted average exercise prices of $3.15 and $3.49 were exercisable at April 30, 2013 and 2012. At April 30, 2013, there were 646,119 shares reserved for future grants under the 2010 Stock Plan.

Warrants

The following table presents details of the Company’s outstanding warrants as of April 30, 2013:

Date of issuance	Number of warrants issued	Number of warrants outstanding		Exercise price	Expiration date
April 24, 2009	190,182	190,182	$	2.75	April 24, 2014
June 29, 2010	718,860	718,860		2.45	June 29, 2020

In conjunction with private placement issuance of common stock shares in April 2004, we issued 190,182 warrants, which are exercisable at a fixed exercise price of $2.75 per share. Subject to certain exceptions, the conversion ratio and exercise price are subject to downward adjustment in the event we issue additional shares of common stock at prices below the then-current or exercise price.

In conjunction with the acquisition of Daegis in June 2010, we obtained debt financing and issued 718,860 warrants, which are exercisable at a fixed exercise price of $2.45 per share.