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Fair Value Measurements
 12 Months Ended
Apr. 30, 2022
Fair Value Disclosures [Abstract]  
Fair Value Measurements

(15) Fair Value Measurements

 

ASC Topic 820,”Fair Value Measurements” states that fair value is an exit price, representing the amount 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. Assets and liabilities that are measured at fair value are reported using a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy maximizes the use of observable input and minimizes the use of unobservable inputs. The following is a description of the three hierarchy levels.

 

Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.
   
Level 2 Inputs other than quoted prices in active markets that are observable for the asset or liability, either directly or indirectly.
   
Level 3 Inputs that are unobservable for the asset or liability.

 

Disclosure of Fair Values

 

The Company’s financial instruments that are not re-measured at fair value include cash, cash equivalents, restricted cash, accounts receivable, contract assets and liabilities, deposits, accounts payable, and accrued expenses. The carrying values of these financial instruments approximate their fair values and are viewed as Level 1 items. The Company’s warrant liabilities represent the only asset or liability classified financial instrument that is measured at fair value on a recurring basis.

 

The fair value of the Company’s short-term investments (refer to Note 2) is based on observable trading of each security which is based on Level 1 observable inputs as they are unadjusted quoted prices in active markets. The total fair value of our investments as of April 30, 2022 and 2021 were $49.0 million and zero, respectively.

 

The fair value of the Company’s warrant liabilities (refer to Note 9) is based on the Black-Scholes option pricing model which is based on Level 3 unobservable inputs for which there is little or no market data, requiring the Company to develop its own assumptions. The assumptions used by the Company are the quoted price of the Company’s common stock in an active market, risk-free interest rate, volatility and expected life, and assumes no dividends. Volatility is based on the actual market activity of the Company’s stock. The expected life is based on the remaining contractual term of the warrants and the risk-free interest rate is based on the implied yield available on U.S. Treasury Securities with a maturity equivalent to the expected life of the warrants. The warrants were expired as of April 30, 2022 and had a fair value near zero as of basis as of April 30, 2021.

 

 

There were no unrealized gains for the twelve months ended April 30, 2022 and 2021, respectively. When incurred, gains and losses are included within “Gain (loss) due to change in fair value of warrant liabilities” in the Consolidated Statements of Operations. The Company determined the fair value using the Black-Scholes option pricing model with the following assumptions:

 

   April 30, 2022   April 30, 2021 
Dividend rate   N/A    0.0%
Risk-free rate   N/A    0.01% -0.02%
Expected life (years)   N/A    0.2 - 0.6 
Expected volatility   N/A    1.498 

 

Additionally, there is a Level 3 contingent liability in the amount of $1.6 million as the inputs are unobservable to determine this fair value. As of April 30, 2022, there has been no change in value of this contingent liability from the time that it was acquired. Refer to Note 18 for further details around this contingent liability and how the value is determined.

 

Transfers into or out of any hierarchy level are recognized at the end of the reporting period in which the transfers occurred. There were no transfers between any hierarchy levels during each of the twelve months ended April 30, 2022 and 2021.