Fair Value Measurements

12 Months Ended

Apr. 30, 2014

Note 5. Fair Value Measurements

In conjunction with the acquisition of the eDiscovery business in June 2010, we obtained debt financing and issued 718,860 common stock warrants which are exercisable at a fixed exercise price of $2.45 per share. These warrants expire in June 2020, and are all outstanding at April 30, 2014. We base our common stock warrant liability on the amount we would pay a third-party market participant to transfer the liability, and we incorporate inputs such as equity prices, historical and implied volatilities, dividend rates and prices of convertible securities issued by comparable companies, maximizing the use of observable inputs when available.

The table below categorizes assets and liabilities measured at fair value on a recurring basis as of April 30, 2014:


		Fair value		Fair value measurement using
		April 30, 2014		Level 1		Level 2		Level 3

Common stock warrant liability	$	276	$	-	$	-	$	276

The following table summarizes the activity of Level 3 inputs measured on a recurring basis for the years ended April 30, 2014 and 2013:


(in thousands)	Common stock warrants
Balance at April 30, 2012	$	569
Change in fair value of common stock warrant liability		(365)
Balance at April 30, 2013		204
Change in fair value of common stock warrant liability		72
Balance at April 30, 2014	$	276

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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