6. STOCK OPTIONS AND WARRANTS
|9 Months Ended|
Jan. 31, 2016
|Disclosure of Compensation Related Costs, Share-based Payments [Abstract]|
|STOCK OPTIONS AND WARRANTS||
As of January 31, 2016, the Company had outstanding stock options held by its directors, officers and an employee that were issued pursuant to compensation and director agreements.
The Company has adopted the provisions of ASC 718, Compensation-Stock, which requires the measurement and recognition of compensation expense for all stock-based awards made to employees.
The fair value of the stock options at the date of grant was estimated using the Black-Scholes option-pricing model.
The Companys computation of expected volatility is based on the historical daily volatility of its publicly traded stock. For stock option grants issued during the periods ended January 31, 2016 and 2015, the Company used a calculated volatility for each grant. The Company lacks adequate information about the exercise behavior at this time and has determined the expected term assumption under the simplified method provided for under ASC 718, which averages the contractual term of the Companys stock options of five years with the average vesting term of two and one sixth years for an average of two and two third years. The dividend yield assumption of zero is based upon the fact the Company has never paid cash dividends and presently has no intention of paying cash dividends. The risk-free interest rate used for each grant is equal to the U.S. Treasury rates in effect at the time of the grant for instruments with a similar expected life. No amounts relating to employee stock-based compensation have been capitalized.
Presented below is the Companys stock option activity for employees and directors:
A summary of the activity for unvested employee stock options during the nine months ended January 31, 2016 is presented below:
The Company recorded approximately $209,000 and $500,000 and $0 and $0 of non-cash charges related to the vesting of stock options to certain directors and an employee in exchange for services during the three months and nine months ended January 31, 2016 and 2015, respectively.
At January 31, 2016, there remained approximately $801,000 of unrecognized compensation expense related to unvested employee stock options to be recognized as expense over a weighted-average period of one year.
The following table summarizes ranges of the Companys outstanding stock options at January 31, 2016:
The aggregate intrinsic value of outstanding options as of January 31, 2016 was approximately $30,000. This represents options whose exercise price was less than the closing fair market value of the Companys common stock on January 31, 2016 of approximately $0.065 per share.
The warrants issued by the Company are classified as equity. The fair value of the warrants calculated at the time of issuance was recorded as an increase to additional-paid-in-capital, and no further adjustments were made.
For stock warrants paid in consideration of services rendered by non-employees, the Company recognizes consulting expense in accordance with the requirements of ASC 505-50, as amended.
On December 31, 2015, warrants to purchase 5,000,000 shares of unregistered common stock of the Company expired. The warrant agreement was dated March 23, 2015 and the terms stated the exercise price of warrants was $0.11 per share.
On January 7, 2016, the Company entered into two Stock and Warrant Purchase Agreements with the Investors and closed a private placement to the Investors. Pursuant to the Stock and Warrant Purchase Agreements, the Company sold to the Investors, in equal amounts, an aggregate of seventeen million (17,000,000) shares of its unregistered common stock, and also sold to the Investors, in equal amounts, unregistered warrants to purchase an additional total of seventeen million (17,000,000) shares of its unregistered common stock, for $1,020,000 in aggregate gross proceeds. The terms of the Stock and Warrant Purchase Agreements for these warrants state the exercise price is $0.12 per share and the expiration date of these warrants is January 7, 2021 (5 years). Using the Black Scholes warrant pricing model, the Company determined the aggregate value of these warrants to be approximately $967,000. These warrants have a cashless exercise feature.
A summary of the Companys warrant activity and related information for the nine months ended January 31, 2016 are shown below:
The following table summarizes additional information concerning warrants outstanding and exercisable at January 31, 2016:
The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.
Reference 1: http://www.xbrl.org/2003/role/presentationRef