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Commitments and Contingencies

6 Months Ended

Oct. 31, 2025

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

(14) Commitments and Contingencies

Litigation with Paragon Technologies, Inc.

On October 10, 2023, Paragon Technologies, Inc. filed a complaint in the Court of Chancery of the State of Delaware against the Company, and the members of its Board of Directors, claiming certain breaches of their fiduciary duties. The complaint sought only injunctive relief against the Company, and not monetary damages, and therefore the financial exposure derived therein was limited to applicable legal fees and costs at that stage, which was material to FY’ 24. The hearing on the initial complaint was held and on November 30, 2023, the Court ruled in favor of the Company and denied Paragon’s motion for injunctive relief. On February 28, 2024, the Company successfully finalized its 2023 annual meeting of stockholders in spite of Paragon’s repeated attempts to contest the meeting. In an August 12, 2024 Press Release and its Form 10-Q report for the second quarter of 2024, Paragon announced that it was no longer pursuing litigation against the Company. Pursuant to a Court order dated January 9, 2025, Paragon was required “to file a status report within 30 days. Otherwise, the case will be dismissed under Rule 41(e).” Because Paragon did not file a status report by February 10, 2025, the Company anticipates that the Court will dismiss the case, with prejudice, due to Paragon’s failure to prosecute.

Section 220 Demand

In February 2025, the Company received a shareholder demand under Section 220 of the General Corporation Law of the State of Delaware (“the 220 Demand”) for inspection of certain books and records relating to prior equity grants made to officers and directors under the 2015 Plan in January 2023, February 2024 and January 2025 (the “Prior Equity Grants”). The Company subsequently provided the plaintiff documents fully responsive to the 220 Demand, which evidenced: (a) that the Company and its Board of Directors acted in good faith and consistent with its fiduciary duties regarding the Prior Equity Grants; and (b) due to administrative errors, however, certain of the January 2023 and February 2024 grants to officers were made in excess of 2015 Plan limits (the “Excess Grants”).

With the foregoing in mind, in October 2025, the Company and the shareholder agreed to settle the 220 Demand on the following terms:

	1.	The Company agreed to rescind the Excess Grants, without prejudice to potential future grants to the impacted officers;
	2.	The Company agreed (a) subject to certain exceptions, to maintain January 2025 aggregate compensation levels for its Board of Directors through the Company’s Fiscal Year 2026 Annual Meeting of Stockholders, expected to be held in or around January 2027; and (b) to have a third party compensation consultant review and issue a report regarding the Board’s compensation levels relative to the competitive market and a custom peer group of companies (the results of which have been disclosed in the Company’s Proxy Statement for the Fiscal Year 2025 Annual Meeting of Stockholders); and
	3.	The Company paid a non-material monetary settlement to the shareholder.

The aforementioned settlement has not had, and is not anticipated to have, any material impact on the Company or its current or future results of operations and financial position.

General Legal Matters

From time to time, the Company is involved in legal and administrative proceedings and claims of various types. The Company records a liability in its consolidated financial statements for these matters when a loss is known or considered probable and the amount can be reasonably estimated. The Company reviews these estimates each accounting period as additional information is known and adjusts the loss provision when appropriate. If a matter is both probable to result in a liability and the amounts of loss can be reasonably estimated, the Company estimates and discloses the possible loss or range of loss to the extent necessary to make the consolidated financial statements not misleading. If the loss is not probable or cannot be reasonably estimated, a liability is not recorded in its consolidated financial statements.