Stock Compensation Information

9 Months Ended

Jan. 31, 2014

Stock Compensation Information [Abstract]

Stock Compensation Information

2.Stock Compensation Information

Stock-based compensation expense is determined from the estimated fair value of stock-based awards and is recognized over the vesting period of the awards, net of estimated forfeitures.  For the three and nine months ended January 31, 2014 and 2013, stock-based compensation expense was comprised of the following (in thousands):     

		Three Months Ended				Nine Months Ended
		January 31,				January 31,
		2014		2013		2014		2013
Direct costs of revenue	$	3		9		12		27
Product development		5		21		24		70
Selling, general, and administrative		30		131		94		395
Total equity-based compensation	$	38	$	161	$	130	$	492

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, 2014. 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	$	35
2015		96
2016		72
2017		31
2018		5
Total	$	239

The cost above is expected to be recognized over a weighted-average period of 2.9years.     

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 the nine months ended January 31, 2014and 2013, were as follows:     

		Nine Months Ended
		January 31,
		2014		2013
Expected term (in years)		4.0		4.0
Risk-free interest rate		0.9	%	0.5	%
Volatility		51	%	77	%
Dividend yield		-		-
Weighted-average fair value of stock options granted during the period	$	0.47	$	1.01

We base our expected term assumption on our historical experience and on the terms and conditions of the stock awards we grant 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 our common stock over the most recent period commensurate with the estimated expected term of our 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, we have developed an estimate of the number of awards expected to be forfeited prior to vesting (“forfeiture rate”). We use 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, 2014and 2013 is 20%.  We recognize stock-based compensation cost as an expense ratably on a straight-line basis over the requisite service period.    

A summary of our stock option activity for the nine months ended January 31, 2014 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	316,000		1.19
Exercised	-		-
Cancelled/expired	(725,200)		2.69
Outstanding at January 31, 2014	1,405,359		2.53	6.82		31,412

(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 our common stock on the last trading day of the periods ended as of the dates indicated.

A summary of our non-vested stock option activity for the period ended January 31, 2014 is as follows:    

		Weighted-
		average
		fair
	Shares	value
Non-vested at April 30, 2013	447,516	1.32
Granted	316,000	0.47
Vested	(148,718)	1.37
Cancelled/expired	(158,875)	1.14
Non-vested at January 31, 2014	455,923	0.67

There were no awards exercised during the nine months ended January 31, 2014and 2013. The total fair value of awards vested during the nine months ended January 31, 2014and 2013 was $0.2 million and $0.6 million, respectively.  The total fair value of awards granted during the nine months ended January 31, 2014and 2013 was $0.2 million and $0.4 million, respectively.