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Share-Based Compensation

3 Months Ended

Jul. 31, 2021

Share-based Payment Arrangement [Abstract]

(13) Share-Based Compensation

In 2015, upon approval by the Company’s stockholders, the Company’s 2015 Omnibus Incentive Plan (the “2015 Plan”) became effective. A total of 1,332,036 shares were authorized for issuance under the 2015 Omnibus Incentive Plan, including shares available for awards under the 2006 Stock Incentive Plan remaining at the time that plan terminated, or that were subject to awards under the 2006 Stock Incentive Plan that thereafter terminated by reason of expiration, forfeiture, cancellation or otherwise. If any award under the 2006 Stock Incentive Plan or 2015 Plan expires, is cancelled, terminates unexercised or is forfeited, those shares become again available for grant under the 2015 Plan. The 2015 Plan will terminate ten years after its effective date, in October 2025, but is subject to earlier termination as provided in the 2015 Plan. As of July 31, 2021, the Company has 193,928 shares available for future issuance under the 2015 Plan which reflects adjustments made for the departure of our former CEO as well as other departures.

On January 18, 2018, the Company’s Board of Directors adopted the Company’s Employment Inducement Incentive Award Plan (the “2018 Inducement Plan”) pursuant to which the Company reserved 25,000 shares of common stock for issuance under the Inducement Plan. In accordance with Rule 711(a) of the NYSE American Company Guide, awards under the Inducement Plan may only be made to individuals not previously employees of the Company (or following such individuals’ bona fide period of non-employment with the Company), as an inducement material to the individuals’ entry into employment with the Company. An award is any right to receive the Company’s common stock pursuant to the 2018 Inducement Plan, consisting of a performance share award, restricted stock award, a restricted stock unit award or a stock payment award. As of July 31, 2021, there were 11,487 shares available for grant under the 2018 Inducement Plan.

Stock Options

The Company estimates the fair value of each stock option award granted with service-based vesting requirements, using the Black-Scholes option pricing model, assuming no dividends, and using the weighted average valuation assumptions noted in the following table. The risk-free rate is based on the US Treasury yield curve in effect at the time of grant. The expected life (estimated period of time outstanding) of the stock options granted is estimated using the “simplified” method as permitted by the SEC’s Staff Accounting Bulletin No. 110, Share-Based Payment. Expected volatility is based on the Company’s historical volatility over the expected life of the stock option granted. The Company did not grant any stock options during the three months ended July 31, 2021 and 2020. The following assumptions were used to value the awards:

	Three months ended July 31,
	2021			2020
Risk-free interest rate		1.0	%		N/A
Expected dividend yield		0.0	%		N/A
Expected life (in years)		5.8	%		N/A
Expected volatility		120.0	%		N/A

A summary of stock options under our stock incentive plans is detailed in the following table.

Schedule of Stock Option Activity

						Weighted
						Average
				Weighted		Remaining
	Shares			Average		Contractual
	Underlying			Exercise		Term
	Options			Price		(In Years)
Outstanding as of April 30, 2021		516,827		$	3.89		8.3
Granted		-		$	-
Exercised		-		$	-
Cancelled/forfeited		(3,681	)	$	13.81
Outstanding as of July 31, 2021		513,146		$	3.81		8.7
Exercisable as of July 31, 2021		247,954		$	4.92		8.0

As of July 31, 2021, the total intrinsic value of outstanding and exercisable options was approximately $0.2 million. As of July 31, 2021, approximately 265,000 additional options were unvested, which had an intrinsic value of $19,000 and a weighted average remaining contractual term of 9.4 years. There was approximately $110,000 and $90,000 of total recognized compensation cost related to stock options during each of the three months ended July 31, 2021 and 2020, respectively. As of July 31, 2021, there was approximately $0.4 million of total unrecognized compensation cost related to non-vested stock options granted under the plans. This cost is expected to be recognized over a weighted-average period of 1.2 years.

The Company’s acquisition of 3Dent (See Note 18) was valued at the fair value of the stock on the acquisition date of $1,451,584 (361,991 shares at $4.01). Since the shares will be restricted for one year and lack marketability, the Company applied a 20% discount to the purchase price to make the adjusted fair value $1,161,267. Additionally, as the Sellers must be employed for 12 months from the date of acquisition, the difference between the calculated fair value and the net assets acquired represents the value of the compensation expense to be recognized over the period of the agreed upon employment.

Fair Value of Purchase	$	1,161,267
Total Acquired Assets	$	(593,571	)
Total Acquired Liabilities	$	117,106
Compensation Expense	$	684,802
Quarterly Compensation Expense	$	171,201

The Company will recognize approximately $171,000 of compensation expense on a quarterly basis for the consideration paid until 12 months from the acquisition date on February 2, 2022.

Performance Stock Options

In January of 2020, the Company issued 81,337 performance-based stock options to two of its executives. The awards vest over 2 years if there is positive total shareholder return (e.g. share price increase) as measured by the 5-day (January 11-15, 2021) and (January 10-14, 2022) share price volume weighted average price (“VWAP”). There were 40,668 shares that were unvested and outstanding for at July 31, 2021. One of the executives, the Company’s former President and CEO, left the Company as of June 18, 2021, however, he is able to exercise any vested options for a period of 180 days after his departure.

In January of 2021, the Company issued 344,723 performance-based stock options to employees and executives. The awards vest over 2 years provided there is positive total shareholder return (e.g. share price increase) as measured by the closing share price on January 14, 2022 and January 14, 2023. There were 343,456 shares unvested and outstanding at July 31, 2021. None of the shares granted to our former President and CEO under this issuance vested and lapsed as of June 18, 2021.

The Company determined these awards contain a market- based condition and estimated the fair value using the Monte Carlo simulation model with the following assumptions:

	Three months ended January 31,
	2021			2020
Risk-free interest rate		1.0	%		N/A
Expected dividend yield		0.0	%		N/A
Expected life (in years)		5.8			N/A
Expected volatility		120.0	%		N/A

A summary of performance stock options under our stock incentive plans is detailed in the following table.

Schedule of Stock Option Activity

						Weighted
						Average
				Weighted		Remaining
	Shares			Average		Contractual
	Underlying			Exercise		Term
	Options			Price		(In Years)
Outstanding as of April 30, 2021		424,790		$	2.57		8.7
Granted		-		$	-
Exercised		-		$	-
Cancelled/forfeited		(6,767	)	$	2.93
Outstanding as of July 31, 2021		418,023		$	2.56		9.3
Exercisable as of July 31, 2021		40,668		$	1.05		8.5

As of July 31, 2021, the total intrinsic value of both outstanding and exercisable options was approximately $37,000 and zero, respectively. As of July 31, 2021, approximately 377,000 additional options were unvested, which had an intrinsic value of $37,000 and a weighted average remaining contractual term of 9.4 years. There was approximately $95,000 and $8,000 of total recognized compensation cost related to stock options during each of the three months ended July 31, 2021 and 2020, respectively. As of July 31, 2021, there was approximately $0.5 million of total unrecognized compensation cost related to non-vested stock options granted under the plans. This cost is expected to be recognized over a weighted-average period of 1.4 years.

Restricted Stock

Compensation expense for non-vested restricted stock is generally recorded based on its market value on the date of grant and recognized ratably over the associated service and performance period. During the three months ended July 31, 2021 and 2020, the Company granted no shares that were subject to service-based vesting requirements.

A summary of non-vested restricted stock under our stock incentive plans is as follows:

			Weighted
	Number		Average Price per
	of Shares		Share
Issued and unvested at April 30, 2021		10,000	$	2.93
Granted		100,000	$	2.37
Vested		-	$	-
Cancelled/forfeited		-	$	-
Issued and unvested at July 31, 2021		110,000	$	2.42

There was approximately $14,000 and $5,000 of total recognized compensation cost related to restricted stock for the three months ended July 31, 2021 and 2020, respectively. As of July 31, 2021, there is approximately $202,000 of unrecognized compensation cost remaining related to unvested restricted stock granted under our plans. This cost is expected to be recognized over a weighted-average period of 0.5 years.

In December 2019, the Company granted 51,547 shares to an employee, subject to service-based vesting requirements, that were outside the Company stock incentive plans. There was approximately zero and $12,000 of total recognized compensation cost related to this award for the three months ended July 31, 2021 and 2020, respectively. As of July 31, 2021, there was no unrecognized compensation cost remaining related to this award.

CEO Stock Options

On June 18, 2021, the Company issued 100,000 restricted shares to the Company’s new President and CEO, subject to vesting. A total of 66,667 of those shares are subject to performance-based vesting and the remaining 33,333 shares are subject to time-based vesting equally at the end of each of the next two years. The vesting of the performance-based shares is contingent upon the future closing share price on June 18, 2022, and June 18, 2023.

The analysis required a Monte Carlo simulation due to the performance vesting schedule. These performance-based shares only vest in the event that the future stock price increases above the closing price of June 18, 2021 of 2.37 per share. A total of 50% of the performance-based shares will vest if the closing price of the Company’s stock on June 18, 2022, exceeds $2.37 per share, and 50% of the options will vest if the closing price of the Company’s stock on June 18, 2023, exceeds the closing price on June 18, 2022.