12.

STOCKHOLDERS’ (DEFICIT) EQUITY

Common Stock

The holders of the Class A common stock are entitled to one vote for each share held. The holders of the Class B common stock are entitled to ten votes for each share held, except for the election of one director, who is elected by the holders of the Class A common stock exclusively. The Class B common stock is convertible into Class A common stock on a share-for-share basis at the option of the shareholder.

In fiscal year 2013, we sold 11,500 shares of Class A common stock at an average price of $4.00 per share in a registered public offering. The net proceeds received from the registered public offering, after deducting underwriting discounts, commissions and offering expenses, were $42,184 and were used to refinance our Second Lien Notes.

Preferred Stock

We are authorized to issue up to 944 shares of preferred stock in one or more series. As of December 31, 2014, April 30, 2014 and April 30, 2013, we had no shares issued.

Stock Based Compensation

Stock Incentive Plans

1997 Stock Option Plan. In the fiscal year ended April 30, 1998, we adopted the 1997 Stock Option Plan (“1997 Plan”) a stock option plan for employees, officers and directors of, and consultants and advisors to us. The 1997 Plan terminated as of July 31, 2007 and as a result no additional awards may be made pursuant to the 1997 Plan.

1997 Non-Employee Director Stock Option Plan. In the fiscal year ended April 30, 1998, we adopted a stock option plan for our non-employee directors. The 1997 Non-Employee Director Stock Option Plan (“Non-Employee Director Plan”) provided for the issuance of a maximum of 200 shares of Class A common stock pursuant to the grant of non-statutory options. The Non-Employee Director Plan terminated as of July 31, 2007.

2006 Stock Incentive Plan. In the fiscal year ended April 30, 2007, we adopted the 2006 Stock Incentive Plan (“2006 Plan”). The 2006 Plan was subsequently amended in fiscal year 2010. Up to an aggregate amount equal to the sum of: (i) 2,475 shares of Class A common stock (subject to adjustment in the event of stock splits and other similar events), plus (ii) such additional number of shares of Class A common stock as are currently subject to options granted under our 1993 Incentive Stock Option Plan, 1994 Non-statutory Stock Option Plan, 1996 Option Plan, and 1997 Plan (“Prior Plans”) which are not actually issued under the Prior Plans because such options expire or otherwise result in shares not being issued, may be issued pursuant to awards granted under the 2006 Plan. As of December 31, 2014, there were 1,010 Class A common stock equivalents available for future grant under the 2006 Plan, inclusive of additional Class A common stock equivalents which were previously issued under our terminated plans and have since become available for grant because such awards expired or otherwise resulted in shares not being issued.

Options granted under the 2006 Plan are granted at a price equal to the prevailing fair market value of our Class A common stock at the date of grant. Generally, options granted have a term not to exceed ten years and vest over a one to four year period from the date of grant.

We grant restricted stock awards, restricted stock units and performance stock units under the 2006 Plan at a price equal to the fair market value of our Class A common stock at the date of grant. Restricted stock awards granted to non-employee directors vest incrementally over a three year period beginning on the first anniversary of the date of grant. Restricted stock units vest incrementally over an identified service period beginning on the grant date based on continued employment. Performance stock units vest on the third fiscal year-end following the grant date and are based on our attainment of a targeted average return on net assets as of the vesting date.

Stock Options

The following table summarizes stock option activity for transition period 2014.


	Stock Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (years)		Aggregate Intrinsic Value
Outstanding, April 30, 2014		1,368		$	8.65
Granted		200		$	4.86
Exercised		(33	)	$	4.30
Forfeited		(155	)	$	13.17

Outstanding, December 31, 2014		1,380		$	7.70		5.3	$	55

Exercisable, December 31, 2014		857		$	9.58		3.2	$	46

Expected to vest, December 31, 2014		1,379		$	7.70		5.3	$	55

During transition period 2014, fiscal year 2014, fiscal year 2013 and fiscal year 2012, stock-based compensation expense for stock options was $386, $464, $528, and $258, respectively.

During transition period 2014, fiscal year 2014, fiscal year 2013 and fiscal year 2012, the aggregate intrinsic value of stock options exercised was $31, $23, $0 and $0.

As of December 31, 2014, total unrecognized stock-based compensation expense related to outstanding stock options was $1,093, which will be recognized over a weighted average period of 1.6 years.

Our calculation of stock-based compensation expense associated with stock options granted in transition period 2014, fiscal year 2014, fiscal year 2013 and fiscal year 2012 was made using the Black-Scholes valuation model. The weighted average fair value of stock options granted during transition period 2014, fiscal year 2014, fiscal year 2013 and fiscal year 2012 were $3.62, $4.22, $3.03 and $4.14 per option, respectively, which were calculated assuming no expected dividend yield using the following weighted average assumptions:


	Eight Months Ended December 31, 2014			Fiscal Year Ended April 30,
	Eight Months Ended December 31, 2014			2014			2013			2012
Expected life		7.00 years			6.79 years			6.82 years			5.50 years
Risk-free interest rate		2.15	%		2.22	%		1.14	%		0.82	%
Expected volatility		82.76	%		83.96	%		84.40	%		91.54	%

Expected life is calculated based on the weighted average historical life of the vested stock options, giving consideration to vesting schedules and historical exercise patterns. Risk-free interest rate is based on the U.S. Treasury yield curve for the period of the expected life of the stock option. Expected volatility is calculated using the weekly historical volatility of our Class A common stock over the expected life.

The Black-Scholes valuation model requires extensive use of accounting judgment and financial estimation, including estimates of the expected term option holders will retain their vested stock options before exercising them, the estimated volatility of our Class A common stock price over the expected term and the number of stock options that will be forfeited prior to the completion of their vesting requirements. Application of alternative assumptions could produce significantly different estimates of the fair value of stock-based compensation and consequently, the related amounts recognized in the unaudited consolidated statements of operations.

Other Stock Awards

The following table summarizes restricted stock, restricted stock unit and performance stock unit activity for transition period 2014.


	Restricted Stock, Restricted Stock Units, and Performance Stock Units			Weighted Average Grant Price		Weighted Average Remaining Contractual Term (years)		Aggregate Intrinsic Value
Outstanding, April 30, 2014 (1)		1,077		$	4.77
Granted		370		$	4.91
Class A Common Stock Vested		(363	)	$	4.89
Forfeited		(36	)	$	4.44

Outstanding, December 31, 2014 (1)		1,048		$	4.79		1.5	$	24

Expected to vest, December 31, 2014		694		$	4.64		1.8	$	24

(1)

Outstanding performance stock units are included at the 100% attainment level. As of December 31, 2014, 250 performance stock units, which mature on April 30, 2015, are outstanding. Attainment of maximum annual returns on net assets could result in the issuance of an additional 250 shares of Class A common stock.

The following table summarizes the grant activity for other stock awards for transition period 2014, fiscal year 2014, fiscal year 2013 and fiscal year 2012, respectively:


	Granted		Weighted Average Grant Date Fair Value		Unvested at December 31, 2014
Fiscal year 2012 grants
Restricted stock units		305	$	6.12		—
Performance stock units		255	$	6.06		—
Restricted stock awards		51	$	5.83		—

Total		611				—

Fiscal year 2013 grants
Restricted stock units		340	$	5.15		84
Performance stock units		316	$	5.17		250
Restricted stock awards		79	$	4.45		26

Total		735				360

Fiscal year 2014 grants
Restricted stock units		482	$	4.09		284
Restricted stock awards		60	$	5.81		40

Total		542				324

Transition period 2014 grants
Restricted stock units		277	$	5.28		271
Restricted stock awards		93	$	3.78		93

Total		370				364

During transition period 2014, fiscal year 2014, fiscal year 2013 and fiscal year 2012, stock-based compensation expense related to restricted stock, restricted stock units and performance stock units was $1,202, $1,861, $1,609 and $1,485, respectively. There was no tax benefit in the provision for income taxes associated with stock-based compensation expense for transition period 2014 or fiscal years 2014, 2013 and 2012, respectively.

During transition period 2014, fiscal year 2014, fiscal year 2013 and fiscal year 2012, the total fair value of other stock awards vested was $1,866, $1,458, $2,475 and $2,056, respectively.

As of December 31, 2014, total unrecognized stock-based compensation expense related to restricted stock and restricted stock units was $2,438, which will be recognized over a weighted average period of 1.7 years. Maximum unrecognized stock-based compensation expense as of December 31, 2014 related to outstanding performance stock units, and subject to the attainment of targeted maximum annual returns on net assets, was $2,505 to be recognized over a weighted average period of 0.3 years. We do not expect to recognize any stock-based compensation expense as of December 31, 2014 related to our outstanding performance stock units based on our expected attainment levels.

We recorded a tax benefit of $84, $0, $96 and $254 to additional paid-in-capital related to the exercise of various share based awards in transition period 2014, fiscal year 2014, fiscal year 2013 and fiscal year 2012, respectively. Tax savings from stock-based compensation resulting from tax deductions in excess of expense are reflected as a financing cash flow in our consolidated financial statements.

We also recorded $52, $79, $99 and $113 of stock-based compensation expense related to our Amended and Restated 1997 Employee Stock Purchase Plan during transition period 2014, fiscal year 2014, fiscal year 2013 and fiscal year 2012, respectively.

Noncontrolling Interests

Casella-Altela Regional Environmental Services, LLC (“CARES”) is a joint venture that owns and operates a water and leachate treatment facility for the natural gas drilling industry in Pennsylvania. Our joint venture partner in CARES is Altela, Inc. (“Altela”). As of December 31, 2014, our ownership interest in CARES was 51%. In accordance with FASB ASC 810-10-15, we consolidate the assets, liabilities and results of operations of CARES into our consolidated financial statements due to our controlling financial interest in the joint venture.

In fiscal year 2014, we determined that certain water treatment assets (“Equipment”) of CARES were no longer operational or were not operating within product performance parameters. In April 2014, we initiated a plan to abandon and shut down the operations of CARES. See Note 16 for disclosure over the asset impairment charge associated with CARES.

On February 9, 2015, we executed a purchase and sale agreement pursuant to which we and Altela agreed to sell certain assets of CARES water treatment facility to an unrelated third-party. We agreed to sell certain assets of CARES for undiscounted purchase consideration of $3,500, resulting in a gain on divestiture of up to $2,850 in the first quarter of the fiscal year ended December 31, 2015 (“fiscal 2015”), 49% of which was attributable to Altela, the noncontrolling interest holder. In connection with this transaction, we also agreed to sell certain equipment and real estate to the same buyer for total consideration of $1,050, resulting in a gain on sale of assets of up to $1,050 in the first quarter of fiscal 2015. These transactions are expected to close in the first quarter of fiscal year 2015.

Accumulated Other Comprehensive Income (Loss)

Accumulated other comprehensive income (loss) is a component of stockholders’ (deficit) equity included in the accompanying consolidated balance sheets and includes, as applicable, the effective portion of changes in the fair value of our cash flow hedges that consist of commodity hedges and interest rate swaps, the changes in fair value of our marketable securities, as well as our portion of the changes in the fair value of GreenFiber’s commodity hedges up until the date of divestiture.

The changes in the balances of each component of accumulated other comprehensive income (loss) for transition period 2014, fiscal year 2014, fiscal year 2013 and fiscal year 2012 are as follows:


	Marketable Securities			Commodity Hedges			Interest Rate Swaps			Total
Balance as of April 30, 2011	$	8		$	370		$	—		$	378
Other comprehensive income (loss) before reclassifications		(4	)		621			(2,369	)		(1,752	)
Amounts reclassified from accumulated other comprehensive income (loss)		—			(578	)		—			(578	)

Net current-period other comprehensive loss		(4	)		43			(2,369	)		(2,330	)

Balance as of April 30, 2012		4			413			(2,369	)		(1,952	)
Other comprehensive income (loss) before reclassifications		23			(1,653	)		(1,257	)		(2,887	)
Amounts reclassified from accumulated other comprehensive income (loss)		—			621			3,626			4,247
Net current-period other comprehensive income		23			(1,032	)		2,369			1,360

Balance as of April 30, 2013		27			(619	)		—			(592	)

Other comprehensive income (loss) before reclassifications		12			(36	)		—			(24	)
Amounts reclassified from accumulated other comprehensive income (loss)		—			655			—			655

Net current-period other comprehensive income		12			619			—			631

Balance as of April 30, 2014		39			—			—			39
Other comprehensive income (loss) before reclassifications		19			—			—			19

Net current-period other comprehensive income		19			—			—			19

Balance as of December 31, 2014	$	58		$	—		$	—		$	58

A summary of reclassifications out of accumulated other comprehensive income (loss) for transition period 2014, fiscal year 2014, fiscal year 2013 and fiscal year 2012 is as follows:


	Eight Months Ended December 31, 2014		Fiscal Year Ended April 30,
	Eight Months Ended December 31, 2014		2014			2013			2012
Details About Accumulated Other Comprehensive Income (Loss) Components	Amount Reclassified Out of Accumulated Other Comprehensive Income (Loss)											Affected Line Item in the Consolidated Statements of Operations
Loss on derivative instruments:
Commodity Hedges	$	—	$	—		$	—		$	130		Revenues
GreenFiber Commodity hedges		—		(405	)		(621	)		547		Loss from equity method investments
Interest rate contracts		—		—			(3,626	)		—		Loss (gain) on derivative instruments

		—		(405	)		(4,247	)		677		Loss from continuing operations before income taxes and discontinued operations
		—		(250	)		—			(99	)	Provision (benefit) for income taxes

	$	—	$	(655	)	$	(4,247	)	$	578		Loss from continuing operations