Annual report pursuant to Section 13 and 15(d)

SHAREHOLDERS' EQUITY

v3.2.0.727
SHAREHOLDERS' EQUITY
 12 Months Ended
Apr. 30, 2015
Stockholders' Equity Note [Abstract]  
SHAREHOLDERS’ EQUITY
NOTE 10 – SHAREHOLDERS’ EQUITY
 
Stock-Based Compensation Plans
 
2014 Equity Incentive Plan
 
In January 2014, the Company adopted the 2014 Equity Incentive Plan, under which officers, directors, key employees or consultants may be granted options. Under the 2014 Equity Incentive Plan, 159,090 shares of common stock were reserved for issuance upon the exercise of stock options, stock awards or restricted stock. Under the terms of the 2014 Equity Incentive Plan, stock options are granted at exercise prices equal to the fair market value of the common stock at the date of grant, and become exercisable and expire in accordance with the terms of the stock option agreement between the optionee and the Company at the date of grant. These options generally vest from immediately to three years of continuous service and have five-year contractual terms. At April 30, 2015, options to purchase 39,545 shares were outstanding at an exercise price of $4.84 to $26.40 At April 30,2015, there were 119,545 options available for grant under the 2014 Equity Incentive Plan.
 
2007 Incentive Stock Plan
 
In September 2006, the Company adopted the 2007 Incentive Stock Plan, under which officers, directors, key employees or consultants may be granted options. Under the 2007 Incentive Stock Plan, 2,597 shares of common stock were reserved for issuance upon the exercise of stock options, stock awards or restricted stock. These shares were registered under Form S-8. Under the terms of the 2007 Incentive Stock Plan, stock options are granted at exercise prices equal to the fair market value of the common stock at the date of grant, and become exercisable and expire in accordance with the terms of the stock option agreement between the optionee and the Company at the date of grant. These options generally vest based on between one to three years of continuous service and have five-year contractual terms. At April 30, 2015, options to purchase 910 shares were outstanding at exercise prices ranging from $8.58 to $13.20. At April 30, 2015, there were 1,687 options available for grant under the 2007 Incentive Stock Plan.
 
2006 Incentive Stock Plan
 
In September 2005, the Company adopted the 2006 Incentive Stock Plan, under which officers, directors, key employees or consultants may be granted options. Under the 2006 Incentive Stock Plan, 2,597 shares of common stock were reserved for issuance upon the exercise of stock options, stock awards or restricted stock. These shares were registered under Form S-8. Under the terms of the 2006 Incentive Stock Plan, stock options are granted at exercise prices equal to the fair market value of the common stock at the date of grant, and become exercisable and expire in accordance with the terms of the stock option agreement between the optionee and the Company at the date of grant. These options generally vest based on between one to three years of continuous service and have five-year contractual terms. At April 30, 2015, there were no options outstanding under this plan. At April 30, 2015, there were 2,579 options available for grant under the 2006 Incentive Stock Plan.
 
2002 Plan
 
In March 2003, the Company established a stock option plan pursuant to which options to acquire a maximum of 2,706 shares of the Company's common stock were reserved for grant (the "2002 Plan"). These shares were registered under Form S-8. Under the terms of the 2002 Plan, the options are exercisable at prices equal to the fair market value of the stock at the date of the grant and become exercisable in accordance with terms established at the time of the grant. These options generally vest based on between one to three years of continuous service and have five-year contractual terms. At April 30, 2015, options to purchase 233 shares were outstanding at exercise prices ranging from $13.20 to $61.82. At April 30, 2015, there were no further shares available for grant under the 2002 Plan as the ten-year term of the 2002 Plan had been reached.
 
The following table summarizes stock option activities for the years ended April 30, 2015 and 2014:
  
 
 
Number of Shares
 
Weighted Average
Exercise Price
 
Total Intrinsic Value
 
Weighted
Average
Remaining
Contractual Life
(in years)
 
Outstanding as of April 30, 2013
 
 
5,090
 
$
147.40
 
$
-
 
 
3.88
 
Employee options granted
 
 
80
 
 
78.10
 
 
-
 
 
-
 
Forfeited/expired
 
 
(3,253)
 
 
25.13
 
 
-
 
 
-
 
Outstanding as of April 30, 2014
 
 
1,917
 
 
14.76
 
 
-
 
 
3.34
 
Employee options granted
 
 
46,363
 
 
20.06
 
 
-
 
 
5.10
 
Forfeited/expired
 
 
(7,592)
 
 
25.52
 
 
-
 
 
-
 
Outstanding as of April 30, 2015
 
 
40,688
 
$
18.79
 
$
-
 
 
5.88
 
Options vested and exercisable
 
 
27,052
 
$
25.82
 
$
-
 
 
3.92
 
 
The Company recorded stock based compensation expense of $170,562 and $24,535, which is included as part of selling, general and administrative expenses for the years ended April 30, 2015 and 2014, respectively.
 
The Company elected to adopt the shortcut method for determining the initial pool of excess tax benefits available to absorb tax deficiencies related to stock-based compensation. The shortcut method includes simplified procedures for establishing the beginning balance of the pool of excess tax benefits (the APIC Tax Pool) and for determining the subsequent effect on the APIC Tax Pool and the Company’s consolidated statements of cash flows of the tax effects of share-based compensation awards. Excess tax benefits related to share-based compensation are reflected as financing cash inflows.
 
The Company estimates the fair value of stock options granted using the Black-Scholes-Merton option-pricing model. The Company determines the forfeiture rate based on the historical forfeitures of stock options previously granted to employees and directors. The forfeiture rate was 15% for the years ended April 30, 2015 and 2014. Compensation cost is then recognized on a straight-line basis over the vesting or service period and is net of estimated forfeitures. The following assumptions were used to compute the fair value of stock options granted during the years ended April 30, 2015 and 2014:
 
 
 
Years Ended
 
 
 
April 30,
 
 
 
2015
 
 
2014
 
Exercise price
 
 
$4.84 - $26.40
 
 
$
78.10
 
Expected stock price volatility
 
 
103.0% - 131.5
%
 
 
68.6
%
Risk-free rate of interest
 
 
1.1% - 1.3
%
 
 
0.90
%
Expected term (years)
 
 
5.0
 
 
 
5.0
 
 
The risk-free rate is based on the rate of U.S Treasury zero-coupon issues with a remaining term equal to the expected term of the option grants. Expected volatility is based on the historical volatility of the Company’s common stock using the weekly closing price of the Company’s common stock. The expected dividend yield is zero based on the fact that the Company has never paid cash dividends and has no present intention to pay cash dividends. The expected term represents the period that the Company’s stock-based awards are expected to be outstanding and was calculated using the simplified method.
 
Common Stock Warrants
 
The following is a summary of the common stock warrant activity for the years ended April 30, 2015 and 2014:
 
 
 
 
 
 
Weighted
 
Weighted
 
 
 
 
 
 
Average
 
Average
 
 
 
Number of
 
Exercise
 
Remaining
 
 
 
Warrants
 
Price
 
Life in years
 
 
 
 
 
 
 
 
 
 
 
 
Outstanding, April 30, 2013
 
 
103,400
 
$
47.39
 
 
4.5
 
BTX Warrants issued in connection with the BTX Purchase Agreement
 
 
68,182
 
 
110.00
 
 
4.0
 
Outstanding as of April 30, 2014
 
 
171,582
 
 
72.27
 
 
4.0
 
Warrants exchanged in connection with the Amendment
 
 
(156,072)
 
 
47.39
 
 
-
 
Outstanding, April 30, 2015
 
 
15,510
 
 
322.64
 
 
4.01