Stock Compensation Information

3 Months Ended

Jul. 31, 2013

Stock Compensation Information [Abstract]

Stock Compensation Information

2.Stock Compensation Information

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

		Three Months Ended
		July 31,
		2013		2012
Direct costs of revenue	$	5	$	10
Product development		13		25
Selling, general, and administrative		35		141
Total equity-based compensation	$	53	$	176

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

Fiscal Year Ending April 30,		Amount
Remainder of 2014	$	112
2015		94
2016		69
2017		22
2018		2
Total	$	299

The cost above is expected to be recognized over a weighted-average period of 1.6 years.     

We estimate the fair value of our stock-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 three months ended July 31, 2013 and 2012, were as follows:     

		Three Months Ended
		July 31,
		2013		2012
Expected term (in years)		4.0		4.0
Risk-free interest rate		0.8	%	0.5	%
Volatility		57	%	77	%
Dividend yield		-		-
Weighted-average fair value of stock options granted during the period	$	1.12	$	1.09

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. We did not pay common stock cash dividends in fiscal 2013 or year to date in fiscal 2014, and do not anticipate paying any cash dividends on common stock in the foreseeable future. Accordingly, 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 three months ending July 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 three months ended July 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, 2013	1,814,559	$	2.83	6.92	$	15,551
Granted	204,000		1.12
Exercised	-		-
Cancelled/expired	(323,706)		2.44
Outstanding at July 31, 2013	1,694,853		2.69	6.87		87,649

(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 non-vested stock option activity for the period ended July 31, 2013 is as follows:    

		Weighted-
		average
		fair
	Shares	value
Non-vested at April 30, 2013	447,516	1.32
Granted	204,000	0.49
Vested	(79,426)	1.33
Cancelled/expired	(136,452)	1.11
Non-vested at July 31, 2013	435,638	0.89

There were no awards exercised during the three months ended July 31, 2013 and 2012. The total fair value of awards vested during the three months ended July 31, 2013 and 2012 was $0.1 million and $0.2 million, respectively.  The total fair value of awards granted during the three months ended July 31, 2013 and 2012 was $0.1 million and $0.4 million, respectively.