SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation – The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles and include the accounts of Peregrine and its wholly-owned subsidiary, Avid. All intercompany balances and transactions have been eliminated.

Use of Estimates – The preparation of our financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ materially from these estimates.

Going Concern – For the year ended April 30, 2017, we adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2014-15, Presentation of Financial Statements – Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, which requires us to evaluate whether there are conditions or events that, in the aggregate, raise substantial doubt about our ability to continue as a going concern and to meet our obligations as they become due within one year after the date that the financial statements are issued.

Our consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The financial statements do not include any adjustments relating to the recoverability of the recorded assets or the classification of liabilities that may be necessary should it be determined that we are unable to continue as a going concern.

At April 30, 2017, we had $46,799,000 in cash and cash equivalents. We have expended substantial funds on the research and development of our product candidates, and funding the operations of Avid. As a result, we have historically experienced losses and negative cash flows from operations since our inception and we expect negative cash flows from operations to continue for the foreseeable future until we can generate sufficient revenue from Avid’s contract manufacturing services to achieve profitability. Therefore, unless and until we are able to generate sufficient revenue from Avid’s contract manufacturing services or from the sale or licensing of our product candidate under development, we expect such losses to continue through at least the fiscal year ending April 30, 2018, and as a result, we will require additional capital to fund our operations and to execute our business plans.

Our ability to continue to fund our operations is highly dependent on the amount of cash and cash equivalents on hand combined with our ability to raise additional capital to support our future operations through one or more methods, including but not limited to, (i) raising additional capital in the equity markets, (ii) generating additional revenue from Avid, or (iii) licensing or partnering our product candidate in development.

Historically, we have funded a significant portion of our operations through the issuance of equity. During fiscal year 2017, we raised $31,277,000 in aggregate gross proceeds from the sale of shares of our common stock and raised an additional $1,634,000 in aggregate gross proceeds from the sale of shares of our Series E Preferred Stock (Note 5). Subsequent to April 30, 2017 and through June 30, 2017, we raised an additional $4,304,000 in aggregate gross proceeds from the sale of shares of our common stock (Note 12). As of July 14, 2017, $67,674,000 remained available to us under our effective shelf registration statement, which allows us from time to time to offer and sell shares of our common stock, in one or more offerings, either individually or in combination.

Our ability to raise additional capital in the equity markets to fund our obligations in future periods is dependent on a number of factors, including, but not limited to, the market demand for our common stock. The market demand or liquidity of our common stock is subject to a number of risks and uncertainties, including but not limited to, negative economic conditions, adverse market conditions, adverse financial results, and negative research and development results. If we are unable to either (i) raise sufficient capital in the equity markets, (ii) generate additional revenue from Avid, or (iii) license or partner our product candidate in development, or any combination thereof, we may need to delay, scale back, or eliminate all our research and development efforts, or restructure our operations. In addition, even if we are able to raise additional capital, it may not be at a price or on terms that are favorable to us.

As a result, we have concluded that there is substantial doubt about our ability to continue as a going concern within one year after the date that our financial statements are issued.

Cash and Cash Equivalents – We consider all short-term investments readily convertible to cash with an initial maturity of three months or less to be cash equivalents.

Restricted Cash – Under the terms of three separate operating leases related to our facilities, we are required to maintain, as collateral, letters of credit during the terms of such leases (Note 3). At April 30, 2017 and 2016, restricted cash of $1,150,000 and $600,000, respectively, was pledged as collateral under these letters of credit.

Trade and Other Receivables – Trade receivables are recorded at the invoiced amount net of an allowance for doubtful accounts, if necessary. Other receivables are reported at amounts expected to be collected net of an allowance for doubtful accounts, if necessary. Trade and other receivables, net, at April 30, consist of the following:

	2017		2016
Trade receivables⁽¹⁾	$	7,274,000	$	2,494,000
Other receivables		468,000		365,000
Trade and other receivables	$	7,742,000	$	2,859,000

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⁽¹⁾Represents amounts billed for contract manufacturing services provided by Avid.

Allowance for Doubtful Accounts – We continually monitor our allowance for doubtful accounts for all receivables. We apply judgment in assessing the ultimate realization of our receivables and we estimate an allowance for doubtful accounts based on various factors, such as, the aging of accounts receivable balances, historical experience, and the financial condition of our customers. Based on our analysis of our receivables as of April 30, 2017 and 2016, we determined no allowance for doubtful accounts was necessary.

Inventories – Inventories are recorded at the lower of cost or market (net realizable value) and primarily include raw materials, work-in-process (comprised of raw materials, direct labor and overhead costs associated with in-process manufacturing services), and finished goods (representing manufacturing services completed and ready for shipment) associated with our wholly-owned subsidiary, Avid. Cost is determined by the first-in, first-out method. Inventories consist of the following at April 30,:

	2017		2016
Raw materials	$	11,304,000	$	10,911,000
Work-in-process		13,755,000		5,275,000
Finished goods		8,040,000		–
Total inventories	$	33,099,000	$	16,186,000

Property and Equipment, net – Property and equipment is recorded at cost, less accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the related asset, generally ranging from three to ten years. Amortization of leasehold improvements is calculated using the straight-line method over the shorter of the estimated useful life of the asset or the remaining lease term.

Concentrations of Credit Risk and Customer Base – Financial instruments that potentially subject us to a significant concentration of credit risk consist of cash and cash equivalents, restricted cash and trade receivables. We maintain our cash and restricted cash balances primarily with one major commercial bank and our deposits held with the bank exceed the amount of government insurance limits provided on our deposits. We are exposed to credit risk in the event of default by the major commercial bank holding our cash and restricted cash balances to the extent of the cash and restricted cash amounts recorded on the accompanying consolidated balance sheet.

Our trade receivables from amounts billed for contract manufacturing services provided by Avid have historically been derived from a small customer base. Most contracts require up-front payments and installment payments during the service period. We perform periodic evaluations of the financial condition of our customers and generally do not require collateral, but we can terminate any contract if a material default occurs. At April 30, 2017 and 2016, approximately 93% and 98%, respectively, of our trade receivables were due from four customers.

In addition, contract manufacturing revenue generated by Avid has historically been derived from a small customer base (Note 10). These customers typically do not enter into long-term contracts because their need for drug supply depends on a variety of factors, including the drug’s stage of development, their financial resources, and, with respect to commercial drugs, demand for the drug in the market.

Our future results of operations could be adversely affected if revenue from any one of our primary customers is significantly reduced or eliminated.

Comprehensive Loss – Comprehensive loss is defined as the change in equity during a period from transactions and other events and circumstances from non-owner sources. Comprehensive loss is equal to our net loss for all periods presented.

Impairment – Long-lived assets are reviewed for impairment in accordance with authoritative guidance for impairment or disposal of long-lived assets. Long-lived assets are reviewed for events or changes in circumstances, which indicate that their carrying value may not be recoverable. Long-lived assets are reported at the lower of carrying amount or fair value less cost to sell. For the fiscal years ended April 30, 2017 and 2016, there was no impairment of the value of our long-lived assets.

Fair Value of Financial Instruments – The carrying amounts in the accompanying consolidated balance sheet for cash and cash equivalents, restricted cash, trade and other receivables, accounts payable and accrued liabilities approximate their fair values due to their short-term maturities.

Fair Value Measurements – Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The guidance prioritizes the inputs used in measuring fair value into the following hierarchy:

Level 1 – Observable inputs, such as unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2 – Observable inputs other than quoted prices included in Level 1, such as assets or liabilities whose values are based on quoted market prices in markets where trading occurs infrequently or whose values are based on quoted prices of instruments with similar attributes in active markets.

Level 3 – Unobservable inputs that are supported by little or no market activity and significant to the overall fair value measurement of the assets or liabilities; therefore, requiring the company to develop its own valuation techniques and assumptions.

As of April 30, 2017 and 2016, we do not have any Level 2 or Level 3 financial assets or liabilities and our cash equivalents, which are primarily invested in money market funds with one major commercial bank, are carried at fair value based on quoted market prices for identical securities (Level 1 input).

Customer Deposits – Customer deposits primarily represents advance billings and/or payments received from Avid’s third-party customers prior to the initiation of contract manufacturing services.

Deferred Rent – Rent expense is recorded on a straight-line basis over the initial term of our operating lease agreements and the difference between rent expense and the amounts paid is recorded as a deferred rent liability. Incentives granted under our operating leases, including tenant improvements and landlord-funded lease incentives, are recorded as a deferred rent liability, which is amortized as a reduction to rent expense over the term of the operating lease (Note 3).

Revenue Recognition – We currently derive revenue from our contract manufacturing services provided by Avid. We recognize revenue in accordance with the authoritative guidance for revenue recognition when all of the following criteria are met: (i) persuasive evidence of an arrangement exists, (ii) delivery (or passage of title) has occurred or services have been rendered, (iii) the seller’s price to the buyer is fixed or determinable, and (iv) collectability is reasonably assured. We also comply with the authoritative guidance for revenue recognition regarding arrangements with multiple elements.

Revenue arrangements with multiple elements are divided into separate units of accounting if certain criteria are met, including whether the delivered element has stand-alone value to the customer or licensing partner. When deliverables are separable, consideration received is allocated among the separate units based on their respective fair values, and the applicable revenue recognition criteria are applied to each of the separate units, which may require the use of significant judgement. Deliverables are considered separate units of accounting if (1) the delivered item(s) has value to the customer on a stand-alone basis and (2) the arrangement includes a general right of return relative to the delivered item(s), delivery or performance of the undelivered item(s) is considered probable and substantially in our control.

Arrangement consideration is allocated at the inception of the agreement to all identified units of accounting based on their relative selling price. The relative selling price for each deliverable is determined using vendor specific objective evidence (“VSOE”) of selling price or third-party evidence of selling price if VSOE does not exist. If neither VSOE nor third-party evidence of selling price exists, we use our best estimate of the selling price for the deliverable. The amount of allocable arrangement consideration is limited to amounts that are fixed or determinable. The consideration received is allocated among the separate units of accounting, and the applicable revenue recognition criteria are applied to each of the separate units. Changes in the allocation of the sales price between delivered and undelivered elements can impact revenue recognition but do not change the total revenue recognized under any agreement.

On occasion, we receive requests from customers to hold product manufactured by Avid on a “bill-and-hold” basis. Revenue is recognized for these “bill-and-hold” arrangements in accordance with the authoritative guidance, which requires, among other things, the existence of a valid business purpose for the arrangement; the “bill-and-hold” arrangement is at the request of the customer; title and risk of ownership must pass to the customer; the product is complete and ready for shipment; a fixed delivery date that is reasonable and consistent with the customer’s business practices; the product has been separated from our inventory; and no further performance obligations by us exist.

In addition, we also follow the authoritative guidance when reporting revenue as gross when we act as a principal versus reporting revenue as net when we act as an agent. For transactions in which we act as a principal, have discretion to choose suppliers, bear credit and inventory risk and perform a substantive part of the services, revenue is recorded at the gross amount billed to a customer and costs associated with these reimbursements are reflected as a component of cost of sales for contract manufacturing services.

Any amounts received prior to satisfying our revenue recognition criteria are recorded as deferred revenue or customer deposits in the accompanying consolidated financial statements. We also record a provision for estimated contract losses, if any, in the period in which they are determined.

Research and Development Expenses – Research and development expenses primarily include (i) payroll and related costs, including share-based compensation associated with research and development personnel, (ii) costs related to clinical trials and preclinical testing of our technologies under development, (iii) costs to develop and manufacture the product candidates, including raw materials and supplies, product testing, depreciation, and facility related expenses, (iv) expenses for research services provided by universities and contract laboratories, including sponsored research funding, and (v) other research and development expenses. Research and development expenses are charged to expense as incurred when these expenditures relate to our research and development efforts and have no alternative future uses.

Clinical trial costs are a significant component of our research and development expenses. We have a history of contracting with third parties that perform various clinical trial activities on our behalf in the ongoing development of our product candidates. The financial terms of these contracts are subject to negotiations and may vary from contract to contract and may result in uneven payment flow. Expenses related to clinical trials are accrued based on our estimates and/or representations from third parties (including clinical research organizations) regarding services performed. If the contracted amounts are modified (for instance, as a result of changes in the clinical trial protocol or scope of work to be performed), we modify our accruals accordingly on a prospective basis. Revisions in the scope of a contract are charged to expense in the period in which the facts that give rise to the revision become reasonably certain. There were no material adjustments for a change in estimate to research and development expenses in the accompanying consolidated financial statements in any of the three years ended April 30, 2017.

Under certain research and development agreements, we are obligated to make certain advance payments, including nonrefundable amounts, for goods or services that will be used or rendered for future research and development activities and are deferred and capitalized as prepaid research and development expenses. These advance payments are recognized as an expense in the period the related goods are delivered or the related services are performed. We assess our prepaid research and development expenses for impairment when events or changes in circumstances indicate that the carrying amount of the prepaid expense may not be recoverable or provide future economic benefit.

In addition, under certain in-licensing agreements associated with the research and development of our product candidates, we are obligated to pay certain milestone payments based on potential clinical development and regulatory milestones (Note 4). These milestone payments have no alternative future uses (in other research and development projects or otherwise) and therefore have no separate economic values and are expensed as research and development costs at the time the costs are incurred. We have no in-licensed product candidates that have alternative future uses in research and development projects or otherwise. In addition, we do not perform any research and development activities for any unrelated entities.

Share-based Compensation – We account for stock options and other share-based awards granted under our equity compensation plans in accordance with the authoritative guidance for share-based compensation. The estimated fair value of share-based payments to employees in exchange for services is measured at the grant date, using a fair value based method, such as a Black-Scholes option valuation model, and is recognized as expense on a straight-line basis over the requisite service periods. The fair value of modifications to share-based awards, if any, is generally estimated using a Black-Scholes option valuation model, unless a lattice model is required. Share-based compensation expense recognized during the period is based on the value of the portion of the share-based payment that is ultimately expected to vest during the period and is reduced for estimated forfeitures. The authoritative guidance requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. As of April 30, 2017, there were no outstanding share-based awards with market or performance conditions.

Periodically, we grant stock options and other share-based awards to non-employee consultants, which we account for in accordance with the authoritative guidance for share-based compensation. The cost of non-employee services received in exchange for share-based awards are measured based on either the fair value of the consideration received or the fair value of the share-based award issued, whichever is more reliably measurable. In addition, authoritative guidance requires share-based compensation related to unvested options and awards issued to non-employees to be recalculated at the end of each reporting period based upon the fair market value on that date until the share-based award has vested, and any cumulative catch-up adjustment to share-based compensation resulting from the re-measurement is recognized in the current period (Note 6).

Income Taxes – We utilize the liability method of accounting for income taxes in accordance with authoritative guidance for accounting for income taxes. Under the liability method, deferred taxes are determined based on the differences between the consolidated financial statements and tax basis of assets and liabilities using enacted tax rates. A valuation allowance is provided when it is more likely than not that some portion or the entire deferred tax asset will not be realized (Note 8). In addition, we recognize the impact of an uncertain tax position only when it is more likely than not the tax position will be sustained upon examination by the tax authorities. We are also required to file federal, state and foreign income tax returns in various jurisdictions. The preparation of these returns requires us to interpret the applicable tax laws in effect in such jurisdictions, which could affect the amount paid by us.

Basic and Dilutive Net Loss Per Common Share – Basic net loss per common share is computed by dividing our net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period excluding the dilutive effects of stock options, shares of common stock expected to be issued under our Employee Stock Purchase Plan (the “ESPP”), warrants, and Series E Preferred Stock outstanding during the period. Diluted net loss per common share is computed by dividing our net loss attributable to common stockholders by the sum of the weighted average number of shares of common stock outstanding during the period plus the potential dilutive effects of stock options, shares of common stock expected to be issued under our ESPP, warrants, and Series E Preferred Stock outstanding during the period. Net loss attributable to common stockholders represents our net loss plus Series E Preferred Stock accumulated dividends. Series E Preferred Stock accumulated dividends include dividends declared for the period (regardless of whether or not the dividends have been paid) and dividends accumulated for the period (regardless of whether or not the dividends have been declared).

The potential dilutive effect of stock options, shares of common stock expected to be issued under our ESPP, and warrants outstanding during the period are calculated in accordance with the treasury stock method, but are excluded if their effect is anti-dilutive. The potential dilutive effect of our Series E Preferred Stock outstanding during the period is calculated using the if-converted method assuming the conversion of our Series E Preferred Stock as of the earliest period reported or at the date of issuance, if later, but are excluded if their effect is anti-dilutive. However, because the impact of stock options, shares of common stock expected to be issued under our ESPP, warrants, and Series E Preferred Stock are anti-dilutive during periods of net loss, there was no difference between basic and diluted loss per common share amounts for the three years ended April 30, 2017.

The calculation of weighted average diluted shares outstanding excludes the dilutive effect of the following weighted average outstanding stock options and shares of common stock expected to be issued under our ESPP since their impact are anti-dilutive during periods of net loss:

	2017		2016		2015
Stock options		–		252,098		547,599
ESPP		45,767		37,862		6,714
Total		45,767		289,960		554,313

The calculation of weighted average diluted shares outstanding also excludes the following weighted average outstanding stock options, warrants, and Series E Preferred Stock (assuming the if-converted method), as their exercise prices or conversion price were greater than the average market price of our common stock during the respective periods, resulting in an anti-dilutive effect:

	2017		2016		2015
Stock options		4,156,421		2,740,922		1,210,144
Warrants		39,040		39,040		39,040
Series E Preferred Stock		1,955,588		1,893,122		1,411,362
Total		6,151,049		4,673,084		2,660,546

Subsequent to April 30, 2017 and through June 30, 2017, we sold an aggregate of 1,051,258 shares of our common stock (Note 12), which are not included in the calculation of basic and dilutive net loss per common share for the fiscal year ended April 30, 2017.

Recently Adopted Accounting Pronouncements

For the year ended April 30, 2017, we adopted FASB ASU 2014-15, Presentation of Financial Statements – Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, which requires us to evaluate whether there are conditions or events that, in the aggregate, raise substantial doubt about our ability to continue as a going concern and to meet our obligations as they become due within one year after the date that the financial statements are issued. We have included the disclosures required by ASU 2014-15 in the “Going Concern” section of Note 2 to our consolidated financial statements.

Pending Adoption of Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606): Revenue from Contracts with Customers, which, along with subsequent amendments issued in 2015 and 2016, will replace substantially all current US GAAP revenue recognition guidance. ASU 2014-09, as amended, is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. ASU 2014-09, as amended, is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period, which will be our fiscal year 2019 beginning May 1, 2018. The new guidance permits adoption either by using (i) a full retrospective approach for all periods presented in the period of adoption or (ii) a modified retrospective approach where the new standard is applied in the financial statements starting with the year of adoption. Under both approaches, cumulative impact of the adoption is reflected as an adjustment to retained earnings (accumulated deficit) as of the earliest date presented in accordance with the new standard. We are continuing to assess the impact of the new guidance on our accounting policies and procedures and are evaluating the new requirements as applied to existing manufacturing contracts under our contract manufacturing business. Although we are continuing to assess the impact of the new guidance, we have identified our revenue streams and based on our preliminary assessment we believe the most significant impact may relate to the recognition of contract manufacturing revenue over a period of time rather than at a point in time. We plan to adopt ASU 2014-09, as amended, on May 1, 2018 and have not yet determined which transition method will be elected.

In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory. ASU 2015-11 requires that inventory should be measured at the lower of cost and net realizable value for entities that measure inventory using the first-in, first-out method. ASU 2015-11 defines net realizable value as the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. ASU 2015-11 is effective for fiscal years beginning after December 15, 2016, which will be our fiscal year 2018 beginning May 1, 2017, and interim periods within those fiscal years. We do not expect the adoption of ASU 2015-11 to have a material impact on our consolidated financial statements and related disclosures.

In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. Under existing standards, deferred taxes for each tax-paying jurisdiction are presented as a net current asset or liability and net long-term asset or liability. To simplify presentation, the new guidance will require that all deferred tax assets and liabilities, along with related valuation allowances, be classified as long-term on the balance sheet. As a result, each tax-paying jurisdiction will now only have one net long-term deferred tax asset or liability. The new guidance does not change the existing requirement that prohibits offsetting deferred tax liabilities from one jurisdiction against deferred tax assets of another jurisdiction. ASU 2015-17 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, which will be our fiscal year 2018 beginning May 1, 2017. Due to the full valuation allowance on our U.S. deferred tax assets, we do not expect the adoption of ASU 2015-17 to have a material impact on our consolidated financial statements and related disclosures.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-2 requires an entity to recognize right-of-use assets and lease liabilities on its balance sheet and disclose key information about leasing arrangements. ASU 2016-02 offers specific accounting guidance for a lessee, a lessor and sale and leaseback transactions. Lessees and lessors are required to disclose qualitative and quantitative information about leasing arrangements to enable a user of the financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. ASU 2016-02 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018, which will be our fiscal year 2020 beginning May 1, 2019. Early adoption is permitted. We are currently in the process of evaluating the impact of adoption of ASU 2016-02 on our consolidated financial statements and related disclosures.

In March 2016, FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. ASU 2016-09 changes certain aspects of accounting for share-based payments to employees and involves several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. Specifically, ASU 2016-09 requires that all income tax effects of share-based awards be recognized as income tax expense or benefit in the reporting period in which they occur. Additionally, ASU 2016-09 amends existing guidance to allow forfeitures of share-based awards to be recognized as they occur. Previous guidance required that share-based compensation expense include an estimate of forfeitures. ASU 2016-09 is effective for annual and interim periods beginning after December 15, 2016, which will be our fiscal year beginning May 1, 2017. We do not expect the adoption of ASU 2016-09 to have a material impact on our consolidated financial statements and related disclosures.

In November 2016, FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, which addresses diversity in practice related to the classification and presentation of changes in restricted cash on the statement of cash flows. ASU 2016-18 will require that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. ASU 2016-18 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, which will be our fiscal year 2019 beginning May 1, 2018. Early adoption is permitted. We are currently evaluating the impact the adoption of ASU 2016-18 will have on our consolidated financial statements and related disclosures.

In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting, which provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. This pronouncement is effective for annual reporting periods beginning after December 15, 2017, which will be our fiscal year 2019 beginning May 1, 2018. Early adoption is permitted. We do not expect the adoption of ASU 2016-09 to have a material impact on our consolidated financial statements and related disclosures.

3. COMMITMENTS AND CONTINGENCIES

12 Months Ended

Apr. 30, 2017

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

Operating Leases – Our corporate offices, research and development, and manufacturing facilities are all located in close proximity in Tustin, California. We currently lease an aggregate of approximately 196,000 square feet of office, warehouse, research and manufacturing space in six buildings under five separate lease agreements, as summarized in the following table:

Lease #	Original Lease Execution Date	Approximate Square Footage Leased	# of Buildings Occupied	Initial Lease Term Expiration Date	# of Options to Extend Lease	Extended Lease Term Expiration Date⁽¹⁾
1	December 1998	48,000	2	12/31/27	2	12/31/37
2	May 2010	13,000	1	12/31/17	1	12/31/22
3	July 2014	84,000	1	1/31/27	2	1/31/37
4	April 2016	26,000	1	8/31/23	2	8/31/35
5	April 2016	25,000	1	8/31/23	2	8/31/35

______________

⁽¹⁾

Extended lease term expiration date assumes we execute all available option(s) to extend lease in accordance with the terms of the lease agreement.

The following represents additional information for each of the lease agreements included in the above table:

In December 1998, we entered into our first lease agreement (the “First Lease”) with an original lease term of 12 years with two 5-year renewal options and includes scheduled rental increases of approximately 3% every two years. In December 2005, we entered into an amendment to the First Lease that extended the original lease term for seven additional years to expire on December 31, 2017. In November 2016, we entered into a second amendment to the First Lease that extends the lease term through December 31, 2027, while also maintaining our two 5-year renewal options that could extend the lease term to December 31, 2037.

In May 2010, we entered into a second lease agreement (the “Second Lease”) to lease additional office and research space. The Second Lease includes a 5-year option to extend the lease to December 31, 2022 and includes annual scheduled rental increases of $0.05 per square foot per year. In addition, a tenant improvement allowance of $125,000 associated with the Second Lease were recorded as leasehold improvements and are being amortized over the shorter of the estimated useful life of the improvements or the remaining life of the Second Lease.

In July 2014, we entered into a third lease agreement (the “Third Lease”) to lease approximately 42,000 square feet of vacant warehouse space to expand our manufacturing capacity to support the manufacturing of products in late-stage clinical development to commercial. The Third Lease includes an option to extend the lease term in two 5-year periods to extend the lease to July 31, 2031 and includes scheduled annual rent increases of approximately 3%. In addition, the Third Lease provided for 12.5 months of free rent, lessor improvements of $250,000 and a tenant improvement allowance of $365,000. Upon completion of the manufacturing facility build-out during fiscal year 2016 (the “Myford Facility”), certain of these improvements were classified as leasehold improvements and are being amortized over the shorter of the estimated useful life of the improvements or the remaining life of the Third Lease, as amended.

In February 2017, we entered into a lease amendment to the Third Lease (the “Third Lease Amendment”), pursuant to which we secured approximately 42,000 square feet of additional vacant warehouse space (the “Expansion Space”) within the same building as our existing Myford Facility. The purpose of the Expansion Space is to expand our biomanufacturing capacity, which we believe will further support the growth of our contract manufacturing business. Under the Third Lease Amendment, our Myford Facility now encompasses approximately 84,000 square feet. The Third Lease Amendment also extends the initial lease term to January 31, 2027 and maintains our two 5-year renewal options that could extend the lease term to January 31, 2037. Our scheduled annual rent increases of approximately 3% are also maintained under the Third Lease Amendment. In addition, with respect to the Expansion Space, the Third Lease Amendment provides for eight (8) months of free rent and a tenant improvement allowance of $1,269,000, which is subject to certain performance contingencies, as defined in the Third Lease Amendment. As a result, the tenant improvement allowance, is accounted for as contingent rent and will be recorded when the tenant improvement allowance is received. Additionally, under the terms of the Third Lease Amendment, we are required to maintain, as collateral for the lease, a letter of credit in the amount of $550,000 during the entire term of the Third Lease, as amended, which amount is included in restricted cash in the accompanying consolidated balance sheet as of April 30, 2017.

In April 2016, we entered into a fourth lease agreement (the “Fourth Lease”) to lease additional office space. The Fourth Lease includes two separate option periods to extend the lease term to August 31, 2035 and includes annual scheduled rent increases of approximately 3%. In addition, the Fourth Lease provided for four months of free rent and a tenant improvement allowance of $562,000. The tenant improvements classified as leasehold improvements are being amortized over the shorter of the estimated useful life of the improvements or the remaining life of the Fourth Lease Additionally, under the terms of the Fourth Lease, we are required to maintain, as collateral for the lease, a letter of credit in the amount of $350,000 during the entire term of the Fourth Lease, which amount is included in restricted cash in the accompanying consolidated balance sheets as of April 30, 2017 and 2016.

In April 2016, we entered into a fifth lease agreement (the “Fifth Lease”) to support our manufacturing operations. The Fifth Lease includes two separate option periods to extend the lease term to August 31, 2035 and includes annual scheduled rent increases of approximately 3%. In addition, under the terms of the Fifth Lease, we are required to maintain, as collateral for the lease, a letter of credit in the amount of $250,000 during the entire term of the Fifth Lease, which amount is included in restricted cash in the accompanying consolidated balance sheets as of April 30, 2017 and 2016.

Under each of the aforementioned facility operating leases, we record rent expense on a straight-line basis over the initial term of the lease. The difference between rent expense and the amounts paid under the operating leases is recorded as a deferred rent liability in the accompanying consolidated financial statements. Annual rent expense under the aforementioned facility operating lease agreements totaled $2,180,000, $1,265,000, and $1,197,000 for the fiscal years ended April 30, 2017, 2016, and 2015, respectively.

At April 30, 2017, future minimum lease payments under all non-cancelable operating leases are as follows:

Year ending April 30,:		Minimum Lease Payments
	2018	$	2,741,000
	2019		3,054,000
	2020		3,037,000
	2021		3,116,000
	2022		2,789,000
	Thereafter		11,362,000
		$	26,099,000

Legal Proceedings - In the ordinary course of business, we are at times subject to various legal proceedings and disputes. We make provisions for liabilities when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Such provisions are reviewed at least quarterly and adjusted to reflect the impact of any settlement negotiations, judicial and administrative rulings, advice of legal counsel, and other information and events pertaining to a particular case.

On October 10, 2013, a derivative and class action complaint, captioned Michaeli v. Steven W. King, et al., C.A. No. 8994-VCL, was filed in the Court of Chancery of the State of Delaware (the “Court”), purportedly on behalf of the Company, which is named a nominal defendant, against certain of our executive officers and directors (collectively, the “Defendants”). On December 1, 2015, the plaintiffs filed an amended and supplemental derivative and class action complaint (the “Amended Complaint”). The Amended Complaint alleges that the Defendants breached their respective fiduciary duties in connection with certain purportedly improper compensation decisions made by our Board of Directors during the past four fiscal years ended April 30, 2015, including: (i) the grant of a stock option to Mr. King on May 4, 2012; (ii) the non-routine broad-based stock option grant to our directors, executives, all other employees and certain consultants on December 27, 2012; and (iii) the payment, during the past four fiscal years ended April 30, 2015, of compensation to our non-employee directors. In addition, the complaint alleges that our directors breached their fiduciary duty of candor by filing and seeking stockholder action on the basis of an allegedly materially false and misleading proxy statement for our 2013 annual meeting of stockholders. The plaintiffs are seeking, among other things, rescission of a portion of the stock option grant to Mr. King on May 4, 2012 and the stock options granted to the Defendants on December 27, 2012, as well as disgorgement of any excessive compensation paid to our non-employee directors during the four fiscal years ended April 30, 2015 and other monetary relief for our benefit. On May 15, 2017, the parties filed with the Court a Stipulation and Agreement of Compromise, Settlement and Release setting forth the terms of the proposed settlement of the claims in the Amended Complaint. A hearing on the proposed settlement will be held before the Court on July 27, 2017. We do not expect to incur a loss associated with this matter should the Court approve the terms of the proposed settlement.

4. LICENSING AGREEMENTS

12 Months Ended

Apr. 30, 2017

Licensing Agreements

LICENSING AGREEMENTS

The following represents a summary of our key in-licensing agreements covering bavituximab, our lead investigational immunotherapy product in clinical development.

In August 2001 and August 2005, we exclusively in-licensed the worldwide rights to the phosphatidylserine (“PS”)-targeting technology platform, including bavituximab, from The University of Texas System, on behalf of The University of Texas Southwestern Medical Center at Dallas (“UTSWMC”). In November 2003, we entered into a non-exclusive license agreement with Genentech, Inc. (“Genentech”), to license certain intellectual property rights covering methods and processes for producing antibodies used in connection with the development of our PS-targeting program. In December 2003, we entered into an exclusive commercial license agreement with Avanir Pharmaceuticals, Inc. (“Avanir”) covering the generation of a chimeric monoclonal antibody. In March 2005, we entered into a worldwide non-exclusive license agreement with Lonza Biologics (“Lonza”) for intellectual property and materials relating to the expression of recombinant monoclonal antibodies for use in the manufacture of bavituximab.

Under our in-licensing agreements relating to bavituximab, we are obligated to pay future milestone payments based on potential clinical development and regulatory milestones, plus a royalty on net sales and/or a percentage of sublicense income. The applicable royalty rate under each of the foregoing in-licensing agreements is in the low single digits. We did not incur any milestone related expenses during the three fiscal years ended April 30, 2017.

The following table provides certain information with respect to each of our in-licensing agreements relating to our bavituximab program.

Licensor		Agreement Date	Total Milestone Obligations Expensed To Date		Potential Future Milestone Obligations ⁽¹⁾
	UTSWMC	August 2001	$	173,000	$	300,000
	UTSWMC	August 2005		85,000		375,000
	Lonza	March 2005		64,000		– ⁽²⁾
	Avanir	December 2003		100,000		1,000,000
	Genentech	November 2003		500,000		5,000,000
	Total		$	922,000	$	6,675,000

______________

(1)

Under our current agreements, potential future milestone obligations are due upon achieving certain clinical and regulatory milestones. Based on the current stage of clinical development for bavituximab, future milestone obligations would be due upon submission of a biologics license application in the U.S. and upon FDA approval, which events are currently uncertain and depend on positive clinical trial results. In addition, potential future milestone obligations vary by license agreement (as defined in each license agreement) and certain agreements depend on a valid patent claim, as defined in each of these underlying agreements, at the time the potential milestone is achieved.

(2)

In the event we utilize a third-party contract manufacturer other than Lonza to manufacture bavituximab for commercial purposes, we would owe Lonza 300,000 pounds sterling per year.

We do not expect to incur any milestone related expenses regarding our bavituximab program during fiscal year 2018. In addition, of the total potential future milestone obligations of $6,675,000, up to $6,400,000 would be due upon the first commercial approval of bavituximab pursuant to these in-licensing agreements. However, given the uncertainty of the drug development and the regulatory approval process, we are unable to predict with any certainty when any of these future milestones will occur, if at all.

5. STOCKHOLDERS' EQUITY

12 Months Ended

Apr. 30, 2017

Equity [Abstract]

STOCKHOLDERS' EQUITY

Stockholder Rights Agreement

On March 16, 2006, our Board of Directors adopted a Stockholder Rights Agreement, which was amended and restated on March 16, 2016 (the “Rights Agreement”), that is designed to strengthen the ability of the Board of Directors to protect the interests of our stockholders against potential abusive or coercive takeover tactics and to enable all stockholders the full and fair value of their investment in the event that an unsolicited attempt is made to acquire Peregrine. The Rights Agreement is not intended to prevent an offer the Board of Directors concludes is in the best interest of Peregrine and its stockholders.

Under the Rights Agreement, the Board of Directors declared a dividend of one preferred share purchase right (a “Right”) for each share of our common stock held by stockholders of record as of the close of business on March 27, 2006. Each Right entitles holders of each share of our common stock to buy seven one thousandths (7/1,000th) of a share of Peregrine’s Series D Participating Preferred Stock, par value $0.001 per share, at an exercise price of $77.00 per share, subject to adjustment. The Rights are neither exercisable nor traded separately from our common stock. The Rights will become exercisable and will detach from the common shares if a person or group acquires 15% or more of our outstanding common stock, without prior approval from our Board of Directors, or announces a tender or exchange offer that would result in that person or group owning 15% or more of our common stock. Each Right, when exercised, entitles the holder (other than the acquiring person or group) to receive our common stock (or in certain circumstances, voting securities of the acquiring person or group) with a value of twice the Rights’ exercise price upon payment of the exercise price of the Rights.

Peregrine will be entitled to redeem the Rights at $0.007 per Right at any time prior to a person or group achieving the 15% threshold. The Rights will expire on March 16, 2021.

Sales of Common Stock and Series E Preferred Stock

Our ability to continue fund our operations is highly dependent on the amount of cash and cash equivalents on hand combined with our ability to raise additional capital to support our future operations through one or more methods, including but not limited to, issuing additional equity.

Sale of Common Stock

During the three fiscal years ended April 30, 2017, we issued shares of our common stock under various financing transactions, as summarized in the following table:

Description of Financing Transaction	Number of Common Stock Shares Issued		Gross Proceeds Raised
Fiscal Year 2015
At Market Issuance Sales Agreement dated December 27, 2012		569,052	$	6,204,000
At Market Issuance Sales Agreement dated June 13, 2014		1,383,109	$	13,544,000
		1,952,161	$	19,748,000
Fiscal Year 2016
At Market Issuance Sales Agreement dated June 13, 2014		1,232,821	$	11,456,000
At Market Issuance Sales Agreement dated August 7, 2015		964,523	$	7,447,000
Equity Distribution Agreement dated August 7, 2015		1,210,328	$	6,969,000
Common Stock Purchase Agreement dated October 30, 2015		2,645,503	$	20,000,000
		6,053,175	$	45,872,000
Fiscal Year 2017
At Market Issuance Sales Agreement dated August 7, 2015		6,137,403	$	18,246,000
Equity Distribution Agreement dated August 7, 2015		3,750,323	$	13,031,000
		9,887,726	$	31,277,000

The following represents additional information for each of the financing transactions included in the above table:

December 2012 AMI Sales Agreement – On December 27, 2012, we entered into an At Market Issuance Sales Agreement (“December 2012 AMI Sales Agreement”) with MLV & Co. LLC (“MLV”), pursuant to which we were able to sell shares of our common stock through MLV, as agent, for aggregate gross proceeds of up to $75,000,000, in registered transactions from our shelf registration statement on Form S-3 (File No. 333-180028), which was declared effective by the Securities and Exchange Commission (“SEC”) on April 12, 2012. Sales of our common stock through MLV were made by any method that was deemed an “at the market offering” as defined in Rule 415 of the Securities Act of 1933, as amended (the “Securities Act”). We paid MLV a commission equal to 2.5% of the gross proceeds from the sale of our common stock pursuant to the December 2012 AMI Sales Agreement. As of April 30, 2015, we had raised the full amount of gross proceeds available to us under the December 2012 AMI Sales Agreement.

June 2014 AMI Sales Agreement – On June 13, 2014, we entered into an At Market Issuance Sales Agreement with MLV, as amended on April 13, 2015 (“June 2014 AMI Sales Agreement”), pursuant to which we were able to sell shares of our common stock through MLV, as agent, for aggregate gross proceeds of up to $25,000,000 in registered transactions from our shelf registration statement on Form S-3 (File No. 333-201245), which was declared effective by the SEC on January 15, 2015 (“January 2015 Shelf”). Sales of our common stock through MLV were made by any method that was deemed an “at the market offering” as defined in Rule 415 of the Securities Act. We paid MLV a commission equal to 2.5% of the gross proceeds from the sale of our common stock pursuant to the June 2014 AMI Sales Agreement. As of April 30, 2016, we had raised the full amount of gross proceeds available to us under the June 2014 AMI Sales Agreement.

August 2015 AMI Sales Agreement – On August 7, 2015, we entered into an At Market Issuance Sales Agreement (“August 2015 AMI Sales Agreement”) with MLV, pursuant to which we may sell shares of our common stock through MLV, as agent, for aggregate gross proceeds of up to $30,000,000, in registered transactions from our January 2015 Shelf. Sales of our common stock through MLV may be made by any method that is deemed an “at the market offering” as defined in Rule 415 of the Securities Act. We pay MLV a commission equal to 2.5% of the gross proceeds from the sale of our common stock pursuant to the August 2015 AMI Sales Agreement. As of April 30, 2017, aggregate gross proceeds of up to $4,307,000 remained available to us under the August 2015 AMI Sales Agreement.

Equity Distribution Agreement – On August 7, 2015, we entered into an Equity Distribution Agreement, with Noble International Investments, Inc., doing business as Noble Life Science Partners, a division of Noble Financial Capital Markets (“Noble”), pursuant to which we were able to sell shares of our common stock through Noble, as agent, for aggregate gross proceeds of up to $20,000,000, in registered transactions from our January 2015 Shelf. Sales of our common stock through Noble were made by any method that was deemed an “at the market offering” as defined in Rule 415 of the Securities Act. We paid Noble a commission equal to 2.5% of the gross proceeds from the sale of our common stock pursuant to the Equity Distribution Agreement. As of April 30, 2017, we had raised the full amount of gross proceeds available to us under the Equity Distribution Agreement.

Common Stock Purchase Agreement – On October 30, 2015, we entered into a Common Stock Purchase Agreement with Eastern Capital Limited, pursuant to which we issued and sold 2,645,503 shares of our common stock, at a purchase price of $7.56 per share for aggregate gross proceeds of $20,000,000 before deducting issuance costs of $1,000. These shares of common stock were sold under our January 2015 Shelf pursuant to a prospectus supplement filed with the SEC on October 30, 2015.

Sale of Series E Preferred Stock

During the three fiscal years ended April 30, 2017, we issued shares of our Series E Preferred Stock under an At Market Issuance Sales Agreement, as summarized in the following table:

Description of Financing Transaction	Number of Series E Preferred Stock Shares Issued		Gross Proceeds Raised
Fiscal Year 2015
At Market Issuance Sales Agreement dated June 13, 2014		799,764	$	19,205,000
Fiscal Year 2016
At Market Issuance Sales Agreement dated June 13, 2014		2,676	$	60,000
Fiscal Year 2017
At Market Issuance Sales Agreement dated June 13, 2014		70,320	$	1,634,000

The following represents additional information for the At Market Issuance Sales Agreement included in the above table:

On June 13, 2014, we entered into an At Market Issuance Sales Agreement (“Series E AMI Sales Agreement”) with MLV, pursuant to which we were able to sell shares of our Series E Preferred Stock through MLV, as agent, for aggregate gross proceeds of up to $30,000,000, in registered transactions from our shelf registration statement on Form S-3 (File No. 333-193113), which was declared effective by the SEC on January 16, 2014 (“January 2014 Shelf”). Sales of our Series E Preferred Stock through MLV were be made by any method that was deemed an “at the market offering” as defined in Rule 415 of the Securities Act. We paid MLV a commission of up to 5% of the gross proceeds from the sale of our Series E Preferred Stock pursuant to the Series E AMI Sales Agreement. During January 2017, the underlying January 2014 Shelf expired, and therefore, we do not plan to issue and sell any additional shares of our Series E Preferred Stock under the Series E AMI Sales Agreement.

Series E Preferred Stock Rights and Preferences

On February 12, 2014, we filed with the Secretary of State of the State of Delaware a Certificate of Designations of Rights and Preferences (the “Certificate of Designations”) to designate the Series E Preferred Stock. The Certificate of Designations designated 2,000,000 shares of Series E Preferred Stock out of our 5,000,000 shares of authorized but unissued shares of preferred stock. In addition, the Series E Preferred Stock is classified as permanent equity in accordance with FASB Accounting Standards Codification Topic 480, Distinguishing Liabilities from Equity. Certain terms of the Series E Preferred Stock include:

(i) The holders are entitled to receive a 10.50% per annum cumulative quarterly dividend, payable in cash, on or about the 1^stday of each of January, April, July, and October;

(ii) The dividend may increase to a penalty rate of 12.50% if: (a) we fail to pay dividends for any four consecutive or nonconsecutive quarterly dividend periods, or (b) once the Series E Preferred Stock becomes initially eligible for listing on a national securities exchange, we fail, for 180 or more consecutive days, to maintain such listing;

(iii) Following a change of control of the Company (as defined in the Certificate of Designations) by a person or entity, we (or the acquiring entity) may, at our option, redeem the Series E Preferred Stock, in whole but not in part, within 120 days after the date on which the change of control has occurred for cash, at the redemption price;

(iv) On and after February 11, 2017, we may redeem the Series E Preferred Stock for cash at our option, from time to time, in whole or in part, at the redemption price;

(v) The redemption price is $25.00 per share, plus any accrued and unpaid dividends (whether or not earned or declared) to, but excluding, the redemption date;

(vi) The liquidation preference is $25.00 per share, plus any accrued and unpaid dividends (whether or not earned or declared);

(vii) The Series E Preferred Stock has no stated maturity date or mandatory redemption and is senior to all of the Company’s other securities;

(viii) There is a general conversion right with respect to the Series E Preferred Stock with a current conversion price of $21.00 (as adjusted to reflect the 1-for-7 reverse stock split of our issued and outstanding common stock, which took effect on July 10, 2017), a special conversion right upon a change of control, and a market trigger conversion at our option in the event of Market Trigger (as defined in the Certificate of Designations); and

(ix) The holders of the Series E Preferred Stock have no voting rights, except as defined in the Certificate of Designations.

Series E Preferred Stock Dividends

The following table summarizes the Series E Preferred Stock quarterly dividend payments during the three fiscal years ended April 30, 2017:

Declaration Date	Record Date		Payment Date		Dividends Paid		Dividend Per Share
Fiscal Year 2015
6/10/2014		6/20/2014		7/1/2014	$	771,000	$	0.65625
9/8/2014		9/19/2014		10/1/2014	$	773,000	$	0.65625
12/9/2014		12/19/2014		1/2/2015	$	774,000	$	0.65625
3/10/2015		3/20/2015		4/1/2015	$	1,034,000	$	0.65625
					$	3,352,000	$	2.62500
Fiscal Year 2016
6/5/2015		6/19/2015		7/1/2015	$	1,034,000	$	0.65625
9/8/2015		9/18/2015		10/1/2015	$	1,035,000	$	0.65625
12/7/2015		12/18/2015		1/4/2016	$	1,035,000	$	0.65625
3/7/2016		3/18/2016		4/1/2016	$	1,035,000	$	0.65625
					$	4,139,000	$	2.62500
Fiscal Year 2017
6/2/2016		6/17/2016		7/1/2016	$	1,036,000	$	0.65625
9/6/2016		9/16/2016		10/3/2016	$	1,081,000	$	0.65625
12/6/2016		12/16/2016		1/3/2017	$	1,081,000	$	0.65625
3/9/2017		3/20/2017		4/3/2017	$	1,081,000	$	0.65625
					$	4,279,000	$	2.62500

Shares of Common Stock Authorized and Reserved For Future Issuance

We are authorized to issue up to 500,000,000 shares of our common stock. As of April 30, 2017, 44,014,040 shares of our common stock were issued and outstanding. In addition, our common stock outstanding as of April 30, 2017 excluded the following shares of common stock reserved for future issuance:

5,630,872 shares of common stock reserved for issuance under outstanding option grants and available for issuance under our stock incentive plans;

1,359,736 shares of common stock reserved for and available for issuance under our ESPP;

39,040 shares of common stock issuable upon exercise of outstanding warrants; and

6,826,435 shares of common stock issuable upon conversion of our outstanding Series E Preferred Stock ⁽¹⁾.

_____________

⁽¹⁾

The Series E Preferred Stock is convertible into a number of shares of our common stock determined by dividing the liquidation preference of $25.00 per share by the conversion price, currently $21.00 per share. If all of our outstanding Series E Preferred Stock were converted at the $21.00 per share conversion price, the holders of our Series E Preferred Stock would receive an aggregate of 1,961,619 shares of our common stock. However, we have reserved the maximum number of shares of our common stock that could be issued upon a change of control event assuming our shares of common stock are acquired for consideration of $5.985 per share or less. In this scenario, each outstanding share of our Series E Preferred Stock could be converted into 4.18 shares of our common stock, representing the Share Cap.

6. EQUITY COMPENSATION PLANS

12 Months Ended

Apr. 30, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

7. EQUITY COMPENSATION PLANS

Stock Incentive Plans

We currently maintain six stock incentive plans referred to as the 2011 Plan, the 2010 Plan, the 2009 Plan, the 2005 Plan, the 2003 Plan, and the 2002 Plan (collectively referred to as the “Stock Plans”). The 2011, 2010, 2009, 2005 and 2003 Plans were approved by our stockholders while the 2002 Plan was not submitted for stockholder approval. The Stock Plans provide for the granting of stock options, restricted stock awards and other forms of share-based awards to purchase shares of our common stock at exercise prices not less than the fair market value of our common stock at the date of grant.

As of April 30, 2017, we had an aggregate of 5,630,872 shares of our common stock reserved for issuance under the Stock Plans, of which, 4,081,548 shares were subject to outstanding options and 1,549,324 shares were available for future grants of share-based awards.

Stock Options – Stock options granted under our Stock Plans are granted at an exercise price not less than the fair market value of our common stock on the date of grant. The options generally vest over a two to four year period and expire ten years from the date of grant, if unexercised. However, certain option awards provide for accelerated vesting if there is a change in control (as defined in the Stock Plans).

The estimated fair value of stock options are measured at the grant date, using a fair value based method, such as a Black-Scholes option valuation model, and is amortized as compensation expense on a straight-line basis over the requisite service period of the award, which is generally the vesting period. The use of a valuation model requires us to make certain estimates and assumptions with respect to selected model inputs. The expected volatility is based on the daily historical volatility of our common stock covering the estimated expected term. The expected term of options granted reflects actual historical exercise activity and assumptions regarding future exercise activity of unexercised, outstanding options. The risk-free interest rate is based on U.S. Treasury notes with terms within the contractual life of the option at the time of grant. The expected dividend yield assumption is based on our expectation of future dividend payouts. We have never declared or paid any cash dividends on our common stock and currently do not anticipate paying such cash dividends. The fair value of stock options on the date of grant and the weighted-average assumptions used to estimate the fair value of the stock options using the Black-Scholes option valuation model for fiscal years ended April 30, 2017, 2016 and 2015, were as follows:

	Fiscal Year Ended April 30,
	2017		2016		2015
Risk-free interest rate		1.32%		1.66%		1.95%
Expected life (in years)		6.12		5.96		5.74
Expected volatility		111.30%		104.74%		111.78%
Expected dividend yield		–		–		–

The following summarizes our stock option transaction activity for fiscal year ended April 30, 2017:

Stock Options	Shares			Weighted Average Exercisable Price		Weighted Average Remaining Contractual Term (years)		Aggregate Intrinsic Value ⁽¹⁾
Outstanding, May 1, 2016		3,393,037		$	10.37
Granted		1,009,085		$	3.42
Exercised		(9,026	)	$	3.44
Canceled or expired		(311,548	)	$	9.06
Outstanding, April 30, 2017		4,081,548		$	8.77		6.36	$	1,267,665

Exercisable and expected to vest		4,067,608		$	8.78		6.35	$	1,252,814
Exercisable, April 30, 2017		3,343,699		$	9.74		5.82	$	687,283

______________

⁽¹⁾

Aggregate intrinsic value represents the difference between the exercise price of an option and the closing market price of our common stock on April 28, 2017 (the last trading day of fiscal year 2017), which was $4.31 per share.

The weighted-average grant date fair value of options granted to employees during the fiscal years ended April 30, 2017, 2016 and 2015 was $2.86, $7.09 and $9.99 per share, respectively.

The aggregate intrinsic value of stock options exercised during the fiscal years ended April 30, 2017, 2016 and 2015 was $11,000, $93,000 and $192,000, respectively. Cash received from stock options exercised during fiscal years ended April 30, 2017, 2016 and 2015, totaled $31,000, $138,000 and $298,000, respectively, net of issuance costs of nil, $1,000 and $3,000, respectively.

We issue shares of common stock that are reserved for issuance under the Stock Plans upon the exercise of stock options, and we do not expect to repurchase shares of common stock from any source to satisfy our obligations under our compensation plans.

As of April 30, 2017, the total estimated unrecognized compensation cost related to non-vested employee stock options was $2,215,000. This cost is expected to be recognized over a weighted average vesting period of 1.43 years based on current assumptions.

Employee Stock Purchase Plan

We have reserved a total of 2,142,857 shares of our common stock to be purchased under our Employee Stock Purchase Plan (the “ESPP”), of which 1,359,736 shares remained available to purchase at April 30, 2017, and are subject to adjustment as provided in the ESPP for stock splits, stock dividends, recapitalizations and other similar events. Under the ESPP, we sell shares to participants at a price equal to the lesser of 85% of the fair market value of our common stock at the (i) beginning of a six-month offering period, or (ii) end of the six-month offering period. The ESPP provides for two six-month offering periods each fiscal year; the first offering period begins on the first trading day on or after each May 1; the second offering period begins on the first trading day on or after each November 1. During the fiscal years ended April 30, 2017, 2016 and 2015, 270,075, 147,769 and 71,063 shares of our common stock were purchased, respectively, under the ESPP at a weighted average purchase price per share of $1.95, $3.65 and $8.56, respectively.

The fair value of the shares purchased under the ESPP were determined using a Black-Scholes option pricing model (see explanation of valuation model inputs above under “Stock Options”), and is recognized as expense on a straight-line basis over the requisite service period (or six-month offering period). The weighted average grant date fair value of purchase rights under the ESPP during fiscal years ended April 30, 2017, 2016 and 2015 was $1.07, $2.40 and $3.91, respectively, based on the following Black-Scholes option valuation model inputs:

	Fiscal Year Ended April 30,
	2017		2016		2015
Risk-free interest rate		0.46%		0.18%		0.06%
Expected life (in years)		0.50		0.50		0.50
Expected volatility		105.27%		46.14%		63.54%
Expected dividend yield		–		–		–

Share-based Compensation Expense

Total share-based compensation expense related to share-based awards issued under our equity compensation plans for the fiscal years ended April 30, 2017, 2016 and 2015 was comprised of the following:

	2017		2016		2015
Cost of contract manufacturing	$	108,000	$	41,000	$	59,000
Research and development		1,615,000		2,124,000		2,904,000
Selling, general and administrative		1,640,000		2,733,000		3,739,000
Total	$	3,363,000	$	4,898,000	$	6,702,000

Share-based compensation from:
Stock options	$	3,094,000	$	4,720,000	$	6,465,000
ESPP		269,000		178,000		237,000
	$	3,363,000	$	4,898,000	$	6,702,000

Share-based compensation expense recorded during fiscal years ended April 30, 2017, 2016 and 2015 associated with share-based awards granted to non-employees amounted to $20,000, $109,000 and $289,000, respectively. As of April 30, 2017, the total estimated unrecognized compensation cost related to non-vested stock options granted to non-employees was $13,000 based on an April 30, 2017 measurement date. This cost is expected to be recognized over a weighted average vesting period of 1.10 years.

Due to our net loss position, no tax benefits have been recognized in the consolidated statements of cash flows.

8. INCOME TAXES

12 Months Ended

Apr. 30, 2017

Income Tax Disclosure [Abstract]

INCOME TAXES

We are primarily subject to U.S. federal and California state jurisdictions. To our knowledge, all tax years remain open to examination by U.S. federal and state authorities.

In addition, in accordance with authoritative guidance, we are required to recognize the impact of an uncertain tax position in the consolidated financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. An uncertain tax position will not be recognized if it has less than a 50% likelihood of being sustained upon examination by the tax authorities. We had no unrecognized tax benefits from uncertain tax positions as of April 30, 2017 and 2016. It is also our policy, in accordance with authoritative guidance, to recognize interest and penalties related to income tax matters in interest and other expense in our consolidated statements of operations and comprehensive loss. We did not recognize interest or penalties related to income taxes for fiscal years ended April 30, 2017, 2016, and 2015, and we did not accrue for interest or penalties as of April 30, 2017 and 2016.

At April 30, 2017, we had net deferred tax assets of $178,400,000. Due to uncertainties surrounding our ability to generate future taxable income to realize these tax assets, a full valuation has been established to offset our net deferred tax assets. Additionally, the future utilization of our net operating loss carry forwards to offset future taxable income may be subject to an annual limitation, pursuant to Internal Revenue Code Section 382, as a result of ownership changes that may have occurred previously or that could occur in the future. A Section 382 analysis was completed as of the fiscal year ended April 30, 2017 and it was determined that no change in ownership had occurred. Ownership changes occurring subsequent to April 30, 2017 may impact the utilization of net operating loss carry forwards and other tax attributes.

At April 30, 2017, we had federal net operating loss carry forwards of approximately $391,878,000. The net operating loss carry forwards expire in fiscal years 2019 through 2037. We also have California state net operating loss carry forwards of approximately $263,812,000 at April 30, 2017, which begin to expire in fiscal year 2018. In addition, we have approximately $5,956,000 of net operating loss attributable to excess tax deductions on share-based compensation that when utilized, if any, the tax benefit will be booked to additional paid-in-capital.

The provision for income taxes consists of the following for the three years ended April 30,:

	2017			2016			2015
Federal income taxes at statutory rate	$	(9,573,000	)	$	(18,921,000	)	$	(17,122,000	)
State income taxes		(2,264,000	)		(4,824,000	)		(4,450,000	)
Expiration and adjustments of deferred tax assets		1,693,000			1,580,000			1,790,000
Change in valuation allowance		10,005,000			21,871,000			19,532,000
Other, net		139,000			294,000			250,000
Income tax (expense) benefit	$	–		$	–		$	–

Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts for income tax purposes. Significant components of our deferred tax assets and deferred tax liabilities at April 30, 2017 and 2016 are as follows:

	2017			2016

Share-based compensation	$	9,583,000		$	8,806,000
Deferred revenue		12,157,000			4,296,000
Deferred rent		738,000			470,000
Other		2,984,000			2,486,000
Net operating losses		154,030,000			152,746,000

Total deferred tax assets		179,492,000			168,804,000
Less valuation allowance		(178,400,000	)		(168,395,000	)

Total deferred tax assets, net of valuation allowance	$	1,092,000		$	409,000

Deferred tax liabilities:
Fixed assets		(1,092,000	)		(409,000	)
Total deferred tax liabilities		(1,092,000	)		(409,000	)
Net deferred tax assets	$	–		$	–

9. BENEFIT PLAN

12 Months Ended

Apr. 30, 2017

Retirement Benefits [Abstract]

BENEFIT PLAN

During fiscal year 1997, we adopted a 401(k) benefit plan (the “Plan”) for all full-time employees who are at least the age of 21 and have three or more months of continuous service. The Plan provides for employee contributions of up to 100% of their compensation on a tax deferred basis up to the maximum amount permitted by the Internal Revenue Code. We are not required to make matching contributions under the Plan, and prior to January 2010, we did not make any matching contributions from the Plan’s inception. Presently, we have voluntarily agreed to match, depending on an employee’s years of continuous service, between 50% and 100% of an employee’s contributions up to 6% of their annual eligible compensation, subject to certain IRS limitations.

Under the Plan, each participating employee is fully vested in his or her contributions to the Plan and our contributions to the Plan will fully vest after six years of service. The expense related to our matching contributions to the Plan was $845,000, $543,000, and $454,000 for the fiscal years ended April 30, 2017, 2016, and 2015, respectively.

10. SEGMENT REPORTING

12 Months Ended

Apr. 30, 2017

Segment Reporting [Abstract]

SEGMENT REPORTING

Our business is organized into two reportable operating segments and both operate in the U.S. Peregrine is engaged in the research and development of monoclonal antibodies for the treatment of cancer. Avid is engaged in providing contract manufacturing services for third-party customers on a fee-for-service basis while also supporting our internal drug development efforts.

The accounting policies of the operating segments are the same as those described in Note 2. We evaluate the performance of our contract manufacturing services segment based on gross profit or loss from third-party customers. However, our products in the research and development segment are not evaluated based on gross profit or loss, but rather based on scientific progress of the technologies. As such, gross profit or loss is only provided for our contract manufacturing services segment in the below table. All revenues shown below are derived from transactions with third-party customers.

Segment information for the fiscal years ended April 30, 2017, 2016 and 2015 is summarized as follows:

	2017			2016			2015
Contract manufacturing services revenue	$	57,630,000		$	44,357,000		$	26,744,000
Cost of contract manufacturing services		38,259,000			22,966,000			15,593,000
Gross profit	$	19,371,000		$	21,391,000		$	11,151,000

Revenue from products in research and development	$	–		$	329,000		$	37,000
Research and development expense		(28,297,000	)		(59,529,000	)		(42,996,000	)
Selling, general and administrative expense		(19,334,000	)		(18,551,000	)		(18,691,000	)
Other income (expense), net		101,000			708,000			141,000
Net loss	$	(28,159,000	)	$	(55,652,000	)	$	(50,358,000	)

Revenue generated from our contract manufacturing services segment during fiscal years ended April 30, 2017, 2016 and 2015 was derived from a limited number of customers. The percentages below represent revenue derived from each customer (and geographical location) as a percentage of total contract manufacturing services revenue:

Customer	Geographic Location		2017		2016		2015
Halozyme Therapeutics, Inc.		U.S.		58%		69%		79%
Customer A		U.S.		26		26		12
Customer B		U.S.		14		–		–
Other customers		U.S./non-U.S.		2		5		9
Total				100%		100%		100%

In addition, we attribute contract manufacturing services revenue to the individual countries where the customer is headquartered. Contract manufacturing services revenue from customers are summarized by geographic location in the following table:

	2017		2016		2015
U.S.	$	57,630,000	$	44,357,000	$	26,715,000
Non-U.S.		–		–		29,000
Total	$	57,630,000	$	44,357,000	$	26,744,000

Revenue generated from our products in our research and development segment during fiscal years ended April 30, 2016 and 2015 were directly related to license revenue recognized under licensing agreements with unrelated entities.

Our long-lived assets are located in the U.S. and consist of leasehold improvements, laboratory equipment, furniture and fixtures, office equipment and software and are net of accumulated depreciation. Long-lived assets by segment as of April 30, 2017 and 2016 consist of the following:

	2017		2016
Long-lived Assets, net:
Contract manufacturing services	$	22,599,000	$	22,783,000
Products in research and development		1,074,000		1,519,000
Total	$	23,673,000	$	24,302,000

11. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

12 Months Ended

Apr. 30, 2017

Quarterly Financial Information Disclosure [Abstract]

SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

Selected quarterly financial information for each of the two most recent fiscal years is as follows:

	Quarter Ended
	April 30,			January 31,			October 31,			July 31,			April 30,			January 31,			October 31,			July 31,
	2017			2017			2016			2016			2016			2016			2015			2015
Net revenues	$	17,904,000		$	10,747,000		$	23,370,000		$	5,609,000		$	18,783,000		$	6,709,000		$	9,523,000		$	9,671,000
Gross profit (a)	$	6,122,000		$	2,773,000		$	7,929,000		$	2,547,000		$	9,062,000		$	2,776,000		$	4,782,000		$	4,771,000
Loss from operations	$	(5,304,000	)	$	(7,797,000	)	$	(4,077,000	)	$	(11,082,000	)	$	(11,915,000	)	$	(16,867,000	)	$	(13,824,000	)	$	(13,754,000	)
Net loss	$	(5,272,000	)	$	(7,774,000	)	$	(4,056,000	)	$	(11,057,000	)	$	(11,884,000	)	$	(16,847,000	)	$	(13,198,000	)	$	(13,723,000	)
Series E preferred stock accumulated dividends (b)	$	(1,442,000	)	$	(1,442,000	)	$	(1,442,000	)	$	(1,380,000	)	$	(1,380,000	)	$	(1,380,000	)	$	(1,380,000	)	$	(1,378,000	)
Net loss attributable to common stockholders	$	(6,714,000	)	$	(9,216,000	)	$	(5,498,000	)	$	(12,437,000	)	$	(13,264,000	)	$	(18,227,000	)	$	(14,578,000	)	$	(15,101,000	)
Basic and diluted loss per common share	$	(0.16	)	$	(0.25	)	$	(0.16	)	$	(0.36	)	$	(0.40	)	$	(0.56	)	$	(0.50	)	$	(0.54	)

_____ _________

(a)

Gross profit represents contract manufacturing revenue less cost of contract manufacturing.

(b)

Series E preferred stock accumulated dividends include dividends declared for the period (regardless of whether or not the dividends have been paid) and dividends accumulated for the period (regardless of whether or not the dividends have been declared).

12. SUBSEQUENT EVENTS

12 Months Ended

Apr. 30, 2017

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

Sale of Common Stock

August 2015 AMI Sales Agreement - Subsequent to April 30, 2017 and through June 30, 2017, we sold 1,051,258 shares of common stock at market prices under the August 2015 AMI Sales Agreement (Note 5) for aggregate gross proceeds of $4,304,000. As of June 30, 2017, we had raised the full amount of the gross proceeds available to us under the August 2015 AMI Sales Agreement.

Series E Preferred Stock Dividend

On June 6, 2017, our Board of Directors declared a quarterly cash dividend of $0.65625 per share on our Series E Preferred Stock. The dividend payment is equivalent to an annualized 10.50% per share, based on the $25.00 per share stated liquidation preference, accruing from April 1, 2017 through June 30, 2017. The cash dividend of $1,081,000 was paid on July 3, 2017 to holders of the Series E Preferred Stock of record on June 19, 2017.

Reverse Stock Split

On July 7, 2017, we effected a reverse stock split of our outstanding shares of common stock at a ratio of one-for-seven, which took effect with the opening of trading on July 10, 2017. The primary purpose of the reverse stock split, which was approved by our stockholders at our 2016 Annual Meeting on October 13, 2016, was to enable us to regain compliance with the $1.00 minimum bid price requirement for continued listing on The NASDAQ Capital Market. All fractional shares created by the reverse stock split were rounded up to the nearest whole share. In addition, all share and per share amounts in the accompanying consolidated financial statements have been adjusted to give effect to the one-for-seven reverse stock split, retrospectively (Note 1).

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Apr. 30, 2017

Cash and Cash Equivalents

Basis of Presentation

Use of Estimates

Going Concern

As a result, we have concluded that there is substantial doubt about our ability to continue as a going concern within one year after the date that our financial statements are issued.

Cash and Cash Equivalents – We consider all short-term investments readily convertible to cash with an initial maturity of three months or less to be cash equivalents.

Restricted cash

Trade and Other Receivables

	2017		2016
Trade receivables⁽¹⁾	$	7,274,000	$	2,494,000
Other receivables		468,000		365,000
Trade and other receivables	$	7,742,000	$	2,859,000

______________

⁽¹⁾Represents amounts billed for contract manufacturing services provided by Avid.

Allowance for Doubtful Accounts

Inventories

	2017		2016
Raw materials	$	11,304,000	$	10,911,000
Work-in-process		13,755,000		5,275,000
Finished goods		8,040,000		–
Total inventories	$	33,099,000	$	16,186,000

Property and Equipment, net

Concentrations of Credit Risk and Customer Base

Our future results of operations could be adversely affected if revenue from any one of our primary customers is significantly reduced or eliminated.

Comprehensive Loss

Impairment

Fair Value of Financial Instruments

Fair Value Measurements

Level 1 – Observable inputs, such as unadjusted quoted prices in active markets for identical assets or liabilities.

Customer Deposits

Deferred Rent

Revenue Recognition

Research and Development Expenses

Share-based Compensation

Income Taxes

Basic and Dilutive Net Loss Per Common Share

	2017		2016		2015
Stock options		–		252,098		547,599
ESPP		45,767		37,862		6,714
Total		45,767		289,960		554,313

	2017		2016		2015
Stock options		4,156,421		2,740,922		1,210,144
Warrants		39,040		39,040		39,040
Series E Preferred Stock		1,955,588		1,893,122		1,411,362
Total		6,151,049		4,673,084		2,660,546

Recently Adopted Accounting Pronouncements

Recently Adopted Accounting Pronouncements

Pending Adoption of Recent Accounting Pronouncements

Pending Adoption of Recent Accounting Pronouncements

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Apr. 30, 2017

Trade and Other Receivables

	2017		2016
Trade receivables⁽¹⁾	$	7,274,000	$	2,494,000
Other receivables		468,000		365,000
Trade and other receivables	$	7,742,000	$	2,859,000

______________

⁽¹⁾Represents amounts billed for contract manufacturing services provided by Avid.

Inventories

	2017		2016
Raw materials	$	11,304,000	$	10,911,000
Work-in-process		13,755,000		5,275,000
Finished goods		8,040,000		–
Total inventories	$	33,099,000	$	16,186,000

Antidilutive Shares

	2017		2016		2015
Stock options		–		252,098		547,599
ESPP		45,767		37,862		6,714
Total		45,767		289,960		554,313

	2017		2016		2015
Stock options		4,156,421		2,740,922		1,210,144
Warrants		39,040		39,040		39,040
Series E Preferred Stock		1,955,588		1,893,122		1,411,362
Total		6,151,049		4,673,084		2,660,546

3. COMMITMENTS AND CONTINGENCIES (Tables)

12 Months Ended

Apr. 30, 2017

Commitments and Contingencies Disclosure [Abstract]

Schedule of operating leases

Lease #	Original Lease Execution Date	Approximate Square Footage Leased	# of Buildings Occupied	Initial Lease Term Expiration Date	# of Options to Extend Lease	Extended Lease Term Expiration Date⁽¹⁾
1	December 1998	48,000	2	12/31/27	2	12/31/37
2	May 2010	13,000	1	12/31/17	1	12/31/22
3	July 2014	84,000	1	1/31/27	2	1/31/37
4	April 2016	26,000	1	8/31/23	2	8/31/35
5	April 2016	25,000	1	8/31/23	2	8/31/35

______________

⁽¹⁾

Extended lease term expiration date assumes we execute all available option(s) to extend lease in accordance with the terms of the lease agreement.

Future minimum lease payments under all non-cancelable operating leases

Year ending April 30,:		Minimum Lease Payments
	2018	$	2,741,000
	2019		3,054,000
	2020		3,037,000
	2021		3,116,000
	2022		2,789,000
	Thereafter		11,362,000
		$	26,099,000

4. LICENSING AGREEMENTS (Tables)

12 Months Ended

Apr. 30, 2017

Licensing Agreements

Schedule of licensing agreements

Licensor		Agreement Date	Total Milestone Obligations Expensed To Date		Potential Future Milestone Obligations ⁽¹⁾
	UTSWMC	August 2001	$	173,000	$	300,000
	UTSWMC	August 2005		85,000		375,000
	Lonza	March 2005		64,000		– ⁽²⁾
	Avanir	December 2003		100,000		1,000,000
	Genentech	November 2003		500,000		5,000,000
	Total		$	922,000	$	6,675,000

______________

(1)

(2)

In the event we utilize a third-party contract manufacturer other than Lonza to manufacture bavituximab for commercial purposes, we would owe Lonza 300,000 pounds sterling per year.

5. STOCKHOLDERS' EQUITY (Tables)

12 Months Ended

Apr. 30, 2017

Common Stock

Schedule of stock issued under financing transactions

Description of Financing Transaction	Number of Common Stock Shares Issued		Gross Proceeds Raised
Fiscal Year 2015
At Market Issuance Sales Agreement dated December 27, 2012		569,052	$	6,204,000
At Market Issuance Sales Agreement dated June 13, 2014		1,383,109	$	13,544,000
		1,952,161	$	19,748,000
Fiscal Year 2016
At Market Issuance Sales Agreement dated June 13, 2014		1,232,821	$	11,456,000
At Market Issuance Sales Agreement dated August 7, 2015		964,523	$	7,447,000
Equity Distribution Agreement dated August 7, 2015		1,210,328	$	6,969,000
Common Stock Purchase Agreement dated October 30, 2015		2,645,503	$	20,000,000
		6,053,175	$	45,872,000
Fiscal Year 2017
At Market Issuance Sales Agreement dated August 7, 2015		6,137,403	$	18,246,000
Equity Distribution Agreement dated August 7, 2015		3,750,323	$	13,031,000
		9,887,726	$	31,277,000

Preferred Stock

Schedule of stock issued under financing transactions

Description of Financing Transaction	Number of Series E Preferred Stock Shares Issued		Gross Proceeds Raised
Fiscal Year 2015
At Market Issuance Sales Agreement dated June 13, 2014		799,764	$	19,205,000
Fiscal Year 2016
At Market Issuance Sales Agreement dated June 13, 2014		2,676	$	60,000
Fiscal Year 2017
At Market Issuance Sales Agreement dated June 13, 2014		70,320	$	1,634,000

Schedule of preferred stock dividends

Declaration Date	Record Date		Payment Date		Dividends Paid		Dividend Per Share
Fiscal Year 2015
6/10/2014		6/20/2014		7/1/2014	$	771,000	$	0.65625
9/8/2014		9/19/2014		10/1/2014	$	773,000	$	0.65625
12/9/2014		12/19/2014		1/2/2015	$	774,000	$	0.65625
3/10/2015		3/20/2015		4/1/2015	$	1,034,000	$	0.65625
					$	3,352,000	$	2.62500
Fiscal Year 2016
6/5/2015		6/19/2015		7/1/2015	$	1,034,000	$	0.65625
9/8/2015		9/18/2015		10/1/2015	$	1,035,000	$	0.65625
12/7/2015		12/18/2015		1/4/2016	$	1,035,000	$	0.65625
3/7/2016		3/18/2016		4/1/2016	$	1,035,000	$	0.65625
					$	4,139,000	$	2.62500
Fiscal Year 2017
6/2/2016		6/17/2016		7/1/2016	$	1,036,000	$	0.65625
9/6/2016		9/16/2016		10/3/2016	$	1,081,000	$	0.65625
12/6/2016		12/16/2016		1/3/2017	$	1,081,000	$	0.65625
3/9/2017		3/20/2017		4/3/2017	$	1,081,000	$	0.65625
					$	4,279,000	$	2.62500

6. EQUITY COMPENSATION PLANS (Tables)

12 Months Ended

Apr. 30, 2017

Share-based compensation expense

	2017		2016		2015
Cost of contract manufacturing	$	108,000	$	41,000	$	59,000
Research and development		1,615,000		2,124,000		2,904,000
Selling, general and administrative		1,640,000		2,733,000		3,739,000
Total	$	3,363,000	$	4,898,000	$	6,702,000

Share-based compensation from:
Stock options	$	3,094,000	$	4,720,000	$	6,465,000
ESPP		269,000		178,000		237,000
	$	3,363,000	$	4,898,000	$	6,702,000

Stock Options

Fair value valuation assumptions

	Fiscal Year Ended April 30,
	2017		2016		2015
Risk-free interest rate		1.32%		1.66%		1.95%
Expected life (in years)		6.12		5.96		5.74
Expected volatility		111.30%		104.74%		111.78%
Expected dividend yield		–		–		–

Schedule of stock option transaction activity

	Fiscal Year Ended April 30,
	2017		2016		2015
Risk-free interest rate		0.46%		0.18%		0.06%
Expected life (in years)		0.50		0.50		0.50
Expected volatility		105.27%		46.14%		63.54%
Expected dividend yield		–		–		–

Employee Stock Purchase Plan [Member]

Schedule of Share Based Payment Award Employee Stock Purchase Plan Valuation Assumptions Table Text Block

	Fiscal Year Ended April 30,
	2017		2016		2015
Risk-free interest rate		0.46%		0.18%		0.06%
Expected life (in years)		0.50		0.50		0.50
Expected volatility		105.27%		46.14%		63.54%
Expected dividend yield		–		–		–

8. INCOME TAXES (Tables)

12 Months Ended

Apr. 30, 2017

Income Tax Disclosure [Abstract]

Provision for income taxes

	2017			2016			2015
Federal income taxes at statutory rate	$	(9,573,000	)	$	(18,921,000	)	$	(17,122,000	)
State income taxes		(2,264,000	)		(4,824,000	)		(4,450,000	)
Expiration and adjustments of deferred tax assets		1,693,000			1,580,000			1,790,000
Change in valuation allowance		10,005,000			21,871,000			19,532,000
Other, net		139,000			294,000			250,000
Income tax (expense) benefit	$	–		$	–		$	–

Deferred income taxes

	2017			2016

Share-based compensation	$	9,583,000		$	8,806,000
Deferred revenue		12,157,000			4,296,000
Deferred rent		738,000			470,000
Other		2,984,000			2,486,000
Net operating losses		154,030,000			152,746,000

Total deferred tax assets		179,492,000			168,804,000
Less valuation allowance		(178,400,000	)		(168,395,000	)

Total deferred tax assets, net of valuation allowance	$	1,092,000		$	409,000

Deferred tax liabilities:
Fixed assets		(1,092,000	)		(409,000	)
Total deferred tax liabilities		(1,092,000	)		(409,000	)
Net deferred tax assets	$	–		$	–

10. SEGMENT REPORTING (Tables)

12 Months Ended

Apr. 30, 2017

Segment Reporting [Abstract]

Segment information

	2017			2016			2015
Contract manufacturing services revenue	$	57,630,000		$	44,357,000		$	26,744,000
Cost of contract manufacturing services		38,259,000			22,966,000			15,593,000
Gross profit	$	19,371,000		$	21,391,000		$	11,151,000

Revenue from products in research and development	$	–		$	329,000		$	37,000
Research and development expense		(28,297,000	)		(59,529,000	)		(42,996,000	)
Selling, general and administrative expense		(19,334,000	)		(18,551,000	)		(18,691,000	)
Other income (expense), net		101,000			708,000			141,000
Net loss	$	(28,159,000	)	$	(55,652,000	)	$	(50,358,000	)

Customer Revenue

Customer	Geographic Location		2017		2016		2015
Halozyme Therapeutics, Inc.		U.S.		58%		69%		79%
Customer A		U.S.		26		26		12
Customer B		U.S.		14		–		–
Other customers		U.S./non-U.S.		2		5		9
Total				100%		100%		100%

Customer revenue by geographic location

	2017		2016		2015
U.S.	$	57,630,000	$	44,357,000	$	26,715,000
Non-U.S.		–		–		29,000
Total	$	57,630,000	$	44,357,000	$	26,744,000

Schedule of long-lived assets by segment

	2017		2016
Long-lived Assets, net:
Contract manufacturing services	$	22,599,000	$	22,783,000
Products in research and development		1,074,000		1,519,000
Total	$	23,673,000	$	24,302,000

11. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) (Tables)

12 Months Ended

Apr. 30, 2017

Quarterly Financial Information Disclosure [Abstract]

Selected quarterly financial information for each of the two most recent fiscal

	Quarter Ended
	April 30,			January 31,			October 31,			July 31,			April 30,			January 31,			October 31,			July 31,
	2017			2017			2016			2016			2016			2016			2015			2015
Net revenues	$	17,904,000		$	10,747,000		$	23,370,000		$	5,609,000		$	18,783,000		$	6,709,000		$	9,523,000		$	9,671,000
Gross profit (a)	$	6,122,000		$	2,773,000		$	7,929,000		$	2,547,000		$	9,062,000		$	2,776,000		$	4,782,000		$	4,771,000
Loss from operations	$	(5,304,000	)	$	(7,797,000	)	$	(4,077,000	)	$	(11,082,000	)	$	(11,915,000	)	$	(16,867,000	)	$	(13,824,000	)	$	(13,754,000	)
Net loss	$	(5,272,000	)	$	(7,774,000	)	$	(4,056,000	)	$	(11,057,000	)	$	(11,884,000	)	$	(16,847,000	)	$	(13,198,000	)	$	(13,723,000	)
Series E preferred stock accumulated dividends (b)	$	(1,442,000	)	$	(1,442,000	)	$	(1,442,000	)	$	(1,380,000	)	$	(1,380,000	)	$	(1,380,000	)	$	(1,380,000	)	$	(1,378,000	)
Net loss attributable to common stockholders	$	(6,714,000	)	$	(9,216,000	)	$	(5,498,000	)	$	(12,437,000	)	$	(13,264,000	)	$	(18,227,000	)	$	(14,578,000	)	$	(15,101,000	)
Basic and diluted loss per common share	$	(0.16	)	$	(0.25	)	$	(0.16	)	$	(0.36	)	$	(0.40	)	$	(0.56	)	$	(0.50	)	$	(0.54	)

_____ _________

(a)

Gross profit represents contract manufacturing revenue less cost of contract manufacturing.

(b)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details - Receivables) - USD ($)

Apr. 30, 2017

Apr. 30, 2016

Trade and other receivables

Trade receivables

^[1]

$ 7,274,000

$ 2,494,000

Other receivables

468,000

365,000

$ 7,742,000

$ 2,859,000

[1]	Represents amounts billed for contract manufacturing services provided by Avid.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details - Inventories) - USD ($)	Apr. 30, 2017	Apr. 30, 2016
Accounting Policies [Abstract]
Raw materials	$ 11,304,000	$ 10,911,000
Work-in-process	13,755,000	5,275,000
Finished goods	8,040,000	0
Total inventories	$ 33,099,000	$ 16,186,000

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details - Antidilutive shares) - shares	12 Months Ended
	Apr. 30, 2017	Apr. 30, 2016	Apr. 30, 2015
Dilutive effect of shares on diluted shares outstanding	45,767	289,960	554,313
Stock Options
Dilutive effect of shares on diluted shares outstanding	0	252,098	547,599
Employee Stock Purchase Plan [Member]
Dilutive effect of shares on diluted shares outstanding	45,767	37,862	6,714

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details - Antidilutive shares, conversion price) - shares	12 Months Ended
	Apr. 30, 2017	Apr. 30, 2016	Apr. 30, 2015
Dilutive effect of shares on diluted shares outstanding	45,767	289,960	554,313
Conversion Price greater than Market Price [Member]
Dilutive effect of shares on diluted shares outstanding	6,151,049	4,673,084	2,660,546
Stock Options
Dilutive effect of shares on diluted shares outstanding	0	252,098	547,599
Stock Options \| Conversion Price greater than Market Price [Member]
Dilutive effect of shares on diluted shares outstanding	4,156,421	2,740,922	1,210,144
Warrants \| Conversion Price greater than Market Price [Member]
Dilutive effect of shares on diluted shares outstanding	39,040	39,040	39,040
Series E Preferred Stock [Member] \| Conversion Price greater than Market Price [Member]
Dilutive effect of shares on diluted shares outstanding	1,955,588	1,893,122	1,411,362

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)	2 Months Ended	12 Months Ended
	Jun. 30, 2017	Apr. 30, 2017	Apr. 30, 2016	Apr. 30, 2015	Jul. 14, 2017	Jul. 14, 2016	Apr. 30, 2014
Cash and cash equivalents		$ 46,799,000	$ 61,412,000	$ 68,001,000			$ 77,490,000
Amounts remaining under registration statements						$ 112,445,000
Restricted cash pledged as collateral		1,150,000	600,000
Allowance for doubtful accounts - other receivables		$ 0	$ 0
Estimated useful lives of property and equipment		3 to 10 years
Concentration risk percentage		100.00%	100.00%	100.00%
Common Stock
Proceeds from issuance of equity		$ 31,277,000
Common stock issued for cash, net of issuance costs, shares		9,887,726	6,053,175	1,952,161
Common Stock \| Subsequent Event [Member]
Proceeds from issuance of equity	$ 4,304,000
Amounts remaining under registration statements					$ 67,674,000
Common stock issued for cash, net of issuance costs, shares	1,051,258
Series E Preferred Stock [Member]
Proceeds from issuance of equity		$ 1,634,000
Accounts Receivable [Member] \| Four Customers [Member]
Concentration risk percentage		93.00%
Accounts Receivable [Member] \| Two Customers [Member]
Concentration risk percentage			98.00%

3. COMMITMENTS AND CONTINGENCIES (Details-Schedule of leases)

12 Months Ended

Apr. 30, 2017

ft²

Number

196,000

Lease 1 [Member]

48,000

Dec. 31, 2017

Dec. 31, 2037

^[1]

Lease 2 [Member]

13,000

Dec. 31, 2017

Dec. 31, 2022

^[1]

Lease 3 [Member]

84,000

Jan. 31, 2027

Jan. 31, 2037

^[1]

Lease 4 [Member]

26,000

Aug. 31, 2023

Aug. 31, 2035

^[1]

Lease 5 [Member]

25,000

Aug. 31, 2023

Aug. 31, 2035

^[1]

[1]	Extended lease term expiration date assumes we execute all available option(s) to extend lease in accordance with the terms of the lease agreement.

3. COMMITMENTS AND CONTINGENCIES (Details-future lease payments)	Apr. 30, 2017 USD ($)
Commitments and Contingencies Disclosure [Abstract]
2018	$ 2,741,000
2019	3,054,000
2020	3,037,000
2021	3,116,000
2022	2,789,000
Thereafter	11,362,000
Operating Leases, Future Minimum Payments Due	$ 26,099,000

4. LICENSING AGREEMENTS (Details)

Apr. 30, 2017

USD ($)

$ 922,000

6,675,000

^[1]

UTSWMC August 2001

173,000

300,000

^[1]

UTSWMC August 2005

85,000

375,000

^[1]

Lonza March 2005

64,000

^[1],[2]

Avanir December 2003

100,000

1,000,000

^[1]

Genentech November 2003

500,000

$ 5,000,000

^[1]

[1]

[2]

In the event we utilize a third-party contract manufacturer other than Lonza to manufacture bavituximab for commercial purposes, we would owe Lonza 300,000 pounds sterling per year.

5. STOCKHOLDERS EQUITY (Details - Common stock issuances) - USD ($)	12 Months Ended
	Apr. 30, 2017	Apr. 30, 2016	Apr. 30, 2015
Gross proceeds raised	$ 30,450,000	$ 45,195,000	$ 19,235,000
Common Stock
Number of common stock shares issued, shares	9,887,726	6,053,175	1,952,161
Gross proceeds raised	$ 31,277,000	$ 45,872,000	$ 19,748,000
December 27, 2012 Financing [Member] \| Common Stock
Number of common stock shares issued, shares			569,052
Gross proceeds raised			$ 6,024,000
June 13, 2014 Financing [Member] \| Common Stock
Number of common stock shares issued, shares		1,232,821	1,383,109
Gross proceeds raised		$ 11,456,000	$ 13,544,000
August 7, 2015 Financing [Member] \| Common Stock
Number of common stock shares issued, shares	6,137,403	964,523
Gross proceeds raised	$ 18,246,000	$ 7,447,000
Equity Distribution Agreement August 7, 2015 [Member] \| Common Stock
Number of common stock shares issued, shares		1,210,328
Gross proceeds raised		$ 6,969,000
Common Stock Purchase Agreement October 30, 2015 [Member] \| Common Stock
Number of common stock shares issued, shares		2,645,503
Gross proceeds raised		$ 20,000
Equity Distribution Agreement August 7, 2015 [Member] \| Common Stock
Number of common stock shares issued, shares	3,750,323
Gross proceeds raised	$ 13,031,000

5. STOCKHOLDERS EQUITY (Details - Preferred stock issuances) - Series E Preferred Stock [Member] - June 13, 2014 Financing [Member] - USD ($)	12 Months Ended
	Apr. 30, 2017	Apr. 30, 2016	Apr. 30, 2015
Number of preferred stock shares issued	70,320	2,676	799,764
Gross proceeds raised	$ 1,634,000	$ 60,000	$ 19,205,000

5. STOCKHOLDERS EQUITY (Details - Preferred Stock Dividends) - Series E Preferred Stock [Member] - USD ($)	12 Months Ended
	Apr. 30, 2016	Apr. 30, 2015
Fiscal Year 2015, Qtr 1 [Member]
Declaration Date		Jun. 10, 2014
Record date		Jun. 20, 2014
Payment date		Jul. 01, 2014
Total dividends paid		$ 771,000
Dividend per share		$ .65625
Fiscal Year 2015, Qtr 2 [Member]
Declaration Date		Sep. 08, 2014
Record date		Sep. 19, 2014
Payment date		Oct. 01, 2014
Total dividends paid		$ 773,000
Dividend per share		$ .65625
Fiscal Year 2015, Qtr 3 [Member]
Declaration Date		Dec. 09, 2014
Record date		Dec. 19, 2014
Payment date		Jan. 02, 2015
Total dividends paid		$ 774,000
Dividend per share		$ .65625
Fiscal Year 2015, Qtr 4 [Member]
Declaration Date		Mar. 10, 2015
Record date		Mar. 20, 2015
Payment date		Apr. 01, 2015
Total dividends paid		$ 1,034,000
Dividend per share		$ .65625
Fiscal Year 2015 [Member]
Total dividends paid		$ 3,352,000
Dividend per share		$ 2.62500
Fiscal Year 2016, Qtr 1 [Member]
Declaration Date	Jun. 05, 2015
Record date	Jun. 19, 2015
Payment date	Jul. 01, 2015
Total dividends paid	$ 1,034,000
Dividend per share	$ .65625
Fiscal Year 2016, Qtr 2 [Member]
Declaration Date	Sep. 08, 2015
Record date	Sep. 18, 2015
Payment date	Oct. 01, 2015
Total dividends paid	$ 1,035,000
Dividend per share	$ .65625
Fiscal Year 2016, Qtr 3 [Member]
Declaration Date	Dec. 07, 2015
Record date	Dec. 18, 2015
Payment date	Jan. 04, 2016
Total dividends paid	$ 1,035,000
Dividend per share	$ .65625
Fiscal Year 2016, Qtr 4 [Member]
Declaration Date	Mar. 07, 2016
Record date	Mar. 18, 2016
Payment date	Apr. 01, 2016
Total dividends paid	$ 1,035,000
Dividend per share	$ .65625
Fiscal Year 2016 [Member]
Total dividends paid	$ 4,139,000
Dividend per share	$ 2.62500
Fiscal Year 2017, Qtr 1 [Member]
Declaration Date	Jun. 02, 2016
Record date	Jun. 17, 2016
Payment date	Jul. 01, 2016
Total dividends paid	$ 1,036,000
Dividend per share	$ .65625
Fiscal Year 2017, Qtr 2 [Member]
Declaration Date	Sep. 06, 2016
Record date	Sep. 16, 2016
Payment date	Oct. 03, 2016
Total dividends paid	$ 1,081,000
Dividend per share	$ .65625
Fiscal Year 2017, Qtr 3 [Member]
Declaration Date	Dec. 06, 2016
Record date	Dec. 16, 2016
Payment date	Jan. 03, 2017
Total dividends paid	$ 1,081,000
Dividend per share	$ .65625
Fiscal Year 2017, Qtr 4 [Member]
Declaration Date	Mar. 09, 2017
Record date	Mar. 20, 2017
Payment date	Apr. 03, 2017
Total dividends paid	$ 1,081,000
Dividend per share	$ .65625
Fiscal Year 2017 [Member]
Total dividends paid	$ 4,279,000
Dividend per share	$ 2.62500

5. STOCKHOLDERS' EQUITY (Details Narrative) - USD ($)

12 Months Ended

Apr. 30, 2017

Apr. 30, 2016

Apr. 30, 2015

Jul. 14, 2016

Stock Incentive Plans [Member]

$ 112,445,000

Employee Stock Purchase Plan [Member]

5,630,872

2,142,857

Warrants

Number of common stock shares issued, shares

39,040

Common Stock

9,887,726

6,053,175

1,952,161

Issuance costs

$ 827,000

$ 677,000

$ 513,000

Series E Preferred Stock [Member]

Issuance costs

$ 58,000

1,000

1,002,000

December 2012 AMI Agreement

^[1]

6,826,435

Proceeds from sale of common stock, gross

75,000,000

75,000,000

June 2014 AMI Agreement | Common Stock

$ 0

Proceeds from sale of common stock, gross

25,000,000

25,000,000

August 2015 AMI Sales Agreement [Member[

$ 0

$ 30,000,000

Equity Distribution Agreement [Member]

4,307,000

20,000,000