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SHAREHOLDERS’ EQUITY (DEFICIT)
 3 Months Ended
Jul. 31, 2022
Equity [Abstract]  
SHAREHOLDERS’ EQUITY (DEFICIT)

Note 14: SHAREHOLDERS’ EQUITY (DEFICIT)

 

Common Stock

 

The Company has 300,000,000 shares of common stock authorized with a par value of $0.001 per share. As of July 31, 2022 and April 30, 2022, the Company had 10,257,986 and 4,194,836 shares of common stock issued and outstanding, respectively.

 

Equity Transactions During the Three Months Ended July 31, 2022

 

Since May 1, 2022, the Company has issued an aggregate of 6,063,145 shares of its common stock consisting of the following:

 

  ● On June 15, 2022, the Company issued 4,389,469 shares of common stock to the Convertible Noteholders upon conversion of convertible notes.
     
  ● On June 15, 2022, the Company issued 1,048,750 shares to investors who participated in the Company’s Nasdaq uplist round.
     
  ● On June 27, 2022, the Company issued 25,000 shares of common stock to Gabriel Goldman for consulting services performed in the first quarter of calendar 2022. Gabriel Goldman became a director of the Company on June 15, 2022.
     
  ● On June 27, 2022, the Company issued 598,396 shares of common stock to the former Gameface shareholders in connection with the purchase of Gameface.  

 

Equity Transactions During the Year Ended April 30, 2022

 

On May 26, 2021, the Company issued 163,684 shares of its common stock for the conversion of related party notes payable (see Note 9). The fair value of the common stock was $6,220,000.

 

On June 23, 2021, the Company issued 54,000 shares of its common stock as partial consideration for the acquisition of Foundation Sports (see Note 5). The fair value of the total shares of common stock to be issued related to the acquisition was $3,550,000.

 

On July 6, 2021, the Company issued 5,022 shares of its common stock to two employees as compensation for services rendered in lieu of cash, which resulted in $187,803 in share-based compensation expense for the year ended April 30, 2022.

 

On July 11, 2021, the Company issued 1,875 shares of its common stock to a vendor as compensation for marketing and other services rendered, which resulted in $16,875 of operating expenses for the year ended April 30, 2022.

 

During the three months ended July 31, 2021, the Company granted an aggregate total of 9,094 shares of its common stock and equity options to purchase up to 6,000 shares (which are now expired) to six new brand ambassadors as compensation for services. The expense related to the issuance of the shares and equity options is being recognized over the service agreements, similar to the warrants and equity options issued to the four other brand ambassadors in the prior year. During the year ended April 30, 2022, the Company recognized $907,042 of operating expenses related to the shares, warrants and equity options granted to brand ambassadors.

 

On August 6, 2021, the Note payable holder (see Note 11) exercised its right to convert its 220,000 outstanding warrants into 495,000 shares of common stock of the Company.

 

On August 6, 2021, the Company’s related party lender exercised its right to convert its 275,000 outstanding warrants and 692,130 common shares issuable into 967,130 shares of common stock of the Company.

 

On October 11, 2021, the Company issued 1,875 shares of its common stock to a vendor as compensation for marketing and other services rendered, which resulted in $16,875 of operating expenses during the year ended April 30, 2022.

 

 

On January 11, 2022, the Company issued 1,875 shares of its common stock to a vendor as compensation for marketing and other services rendered, which resulted in $16,874 of operating expenses during the year ended April 30, 2022.

 

During April 2022, the Company granted an aggregate total of 6,000 shares of its common stock to 6 new brand ambassadors as compensation for services. During the year ended April 30, 2022, the Company recognized $255,124 of operating expenses related to the shares granted to brand ambassadors.

 

Warrants Issued and Expensed During the Three Months and Year Ended July 31, 2022 and April 30, 2022

 

On October 28, 2020, the Company granted 40,000 warrants to a service provider for advertising services over the next year. The warrants have an exercise price of $0.75 per share, a contractual life of 10 years from the date of issuance, and vest quarterly over a year from the grant date. The warrants were valued using a Black-Scholes option pricing model and the expense related to the issuance of the warrants is being recognized over the service agreement. The Company recognized $277,625 and $187,803 of operating expenses related to this agreement during the three months and year ended July 31, 2022 and April 30, 2022, respectively.

 

In accordance with the October 29, 2020 agreement with three members of the advisory board mentioned above, 46,077 warrants were issued during the year ended April 30, 2022. The warrants were valued using a Black-Scholes option pricing model on the grant date, which resulted in operating expenses of $22,500 and $87,656 during the three months ended July 31, 2022 and year ended April 30, 2022, respectively.

 

On August 6, 2021, in connection with the Convertible Notes issuance (see Note 10) the Company issued warrants to purchase up to 733,333 shares of common stock of the Company to the Purchasers.

 

On August 6, 2021, in connection with the Convertible Notes issuance the Company also granted the lead placement agent for the Offering 26,667 warrants that are exercisable for five years from August 6, 2021, at an exercise price of $3.30 (subject to adjustment as set forth in the Convertible Notes per the terms of the agreement) and are vested immediately. The warrants were valued using a Black-Scholes option pricing model on the grant date and the Company recognized $376,000 of operating expenses related to them during the year ended April 30, 2022.

 

On September 3, 2021, the Company granted an aggregate total of 1,010,000 warrants to key employees and officers of the Company as compensation. The warrants have an exercise price of $0.001 per share for 1,000,000 of the warrants and $3.42 for 10,000 of the warrants, a contractual life of 10 years from the date of issuance and are vested immediately upon grant. The warrants were valued using a Black-Scholes option pricing model on the grant date and the Company recognized $32,381,309 of share-based compensation expense related to them during the year ended April 30, 2022.

 

On February 2, 2022, in connection with the Gameface acquisition (see Note 5) the Company issued warrants to purchase up to 478,225 shares of common stock of the Company.

 

Common Stock Issuable

 

On February 22, the Company authorized the issuance of 2,537,969 shares of common stock as partial consideration for the acquisition of PlaySight (see Note 5). The fair value of the total shares of common stock to be issued related to the acquisition was $39,950,000. As of July 31, 2022, none of the shares had been issued due to there being an issue with the transfer agent. The shares were issued in September 2022. Refer to Note 18 for more details.