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6. STOCK OPTIONS AND WARRANTS | 12 Months Ended
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Apr. 30, 2020
Share-based Payment Arrangement [Abstract] |
STOCK OPTIONS AND WARRANTS | NOTE 6 – STOCK OPTIONS AND WARRANTS Stock Options As of April 30, 2020, the Company had 67,200,000 outstanding stock options to its directors and officers (collectively, “Employee Options”) and consultants (“Non-Employee Options”). During the years ended April 30, 2020 and 2019, the Company granted 11,000,000 and 11,000,000 Employee Options, respectively. The fair value of the Employee Options at the date of grant was estimated using the Black-Scholes-Merton option-pricing model, based on the following weighted average assumptions:
|  | Years Ended April 30, |
|  | 2020 |  |  | 2019 |
Risk-free interest rate |  |  | 1.8% |  |  |  | 2.0% |
Expected volatility |  |  | 91% |  |  |  | 97% |
Expected lives (years) |  |  | 2.7 |  |  |  | 2.7 |
Expected dividend yield |  |  | 0.00% |  |  |  | 0.00% |
The Company’s computation of expected volatility is based on the historical daily volatility of its publicly traded stock. For stock option grants issued during years ended April 30, 2020 and 2019, the Company used a calculated volatility for each grant. The Company lacks adequate information about the exercise behavior now and has determined the expected term assumption under the simplified method provided for under ASC 718, which averages the contractual term of the Company’s stock options of five years with the average vesting term of two and one-half years for an average of three 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. During the years ended April 30, 2020 and 2019, the Company granted Non-Employee Options of 1,200,000 and 1,200,000, respectively. The fair value of the Non-Employee Options was estimated using the Black-Scholes-Merton option-pricing model, based on the following weighted average assumptions:
|  | Years Ended April 30, |
|  | 2020 |  |  | 2019 |
Risk-free interest rate |  |  | 1.6% |  |  |  | 2.5% |
Expected volatility |  |  | 90% |  |  |  | 98% |
Expected lives (years) |  |  | 5.0 |  |  |  | 5.0 |
Expected dividend yield |  |  | 0.00% |  |  |  | 0.00% |
Non-Employee Option grants that do not vest immediately upon grant are recorded as an expense over the vesting period. Effective August 1, 2018 the Company adopted ASU 2018-07 early using the modified retrospective transition approach. The Company determined there was no transition adjustment upon adoption of ASU 2018-07. A summary of the Company’s stock option activity and related information for the two years ended April 30, 2020 are shown below:
|  | Options |  |  | Weighted Average Exercise Price |  |  | Weighted Average Grant Date Fair Value per Share |
Outstanding, April 30, 2018 |  |  | 95,250,000 |  |  | $ | 0.11 |  |  | $ | 0.11 |
Issued |  |  | 12,200,000 |  |  |  | 0.05 |  |  |  | 0.05 |
Forfeited |  |  | – |  |  |  | – |  |  |  | – |
Exercised |  |  | – |  |  |  | – |  |  |  | – |
Outstanding, April 30, 2019 |  |  | 107,450,000 |  |  |  | 0.11 |  |  |  | 0.11 |
Issued |  |  | 12,200,000 |  |  |  | 0.04 |  |  |  | 0.04 |
Forfeited |  |  | (52,450,000 | ) |  |  | 0.15 |  |  |  | 0.14 |
Exercised |  |  | – |  |  |  | – |  |  |  | – |
Outstanding, April 30, 2020 |  |  | 67,200,000 |  |  | $ | 0.06 |  |  | $ | 0.06 |
Exercisable, April 30, 2020 |  |  | 61,000,000 |  |  | $ | 0.07 |  |  | $ | – |
Vested and expected to vest |  |  | 67,200,000 |  |  | $ | 0.06 |  |  | $ | – |
A summary of the activity for unvested stock options during the years ended April 30, 2020 and 2019 is as follows:
|  | Options |  |  | Weighted Average Grant Date Fair Value per Share |
Unvested, April 30, 2018 |  |  | 7,200,000 |  |  | $ | – |
Granted |  |  | 12,200,000 |  |  |  | 0.05 |
Vested |  |  | (13,200,000 | ) |  |  | – |
Forfeited |  |  | – |  |  |  | – |
Unvested, April 30, 2019 |  |  | 6,200,000 |  |  |  | – |
Granted |  |  | 12,200,000 |  |  |  | 0.04 |
Vested |  |  | (12,200,000 | ) |  |  | – |
Forfeited |  |  | – |  |  |  | – |
Unvested, April 30, 2020 |  |  | 6,200,000 |  |  | $ | 0.05 |
The Company recorded $338,050 and $320,178 of stock-based compensation related to the issuance of Employee Options to certain officers and directors in exchange for services during the years ended April 30, 2020 and 2019, respectively. At April 30, 2020, there remained $141,642 of unrecognized compensation expense related to unvested Employee Options granted to officers and directors, to be recognized as expense over a weighted-average period of the remaining eight months in the calendar year. The unvested options vest at 750,000 shares per month and are expected to be fully vested on December 31, 2020. The Company recorded $41,326 and $92,171 of stock-based compensation related to the issuance of Non-Employee Options in exchange for services during the years ended April 30, 2020 and 2019, respectively. The unvested Non-Employee Options vest at 100,000 shares per month and are expected to be fully vested on June 30, 2020. The following table summarizes the outstanding stock options by exercise price at April 30, 2020:
Exercise Price |  |  | Number of Options Outstanding |  |  | Weighted Average Remaining Contractual Life (years) of Outstanding Options |  |  | Weighted Average Exercisable Price |  |  | Number of Options Exercisable |  |  | Weighted Average Exercise Price of Exercisable Options |
$ | 0.063 |  |  |  | 15,600,000 |  |  |  | 0.40 |  |  | $ | 0.063 |  |  |  | 15,600,000 |  |  | $ | 0.063 |
$ | 0.104 |  |  |  | 10,450,000 |  |  |  | 1.20 |  |  | $ | 0.104 |  |  |  | 10,450,000 |  |  | $ | 0.104 |
$ | 0.0685 |  |  |  | 600,000 |  |  |  | 1.00 |  |  | $ | 0.0685 |  |  |  | 600,000 |  |  | $ | 0.0685 |
$ | 0.058 |  |  |  | 2,450,000 |  |  |  | 1.62 |  |  | $ | 0.058 |  |  |  | 2,450,000 |  |  | $ | 0.058 |
$ | 0.0734 |  |  |  | 1,200,000 |  |  |  | 2.00 |  |  | $ | 0.0734 |  |  |  | 1,200,000 |  |  | $ | 0.0734 |
$ | 0.0729 |  |  |  | 1,800,000 |  |  |  | 2.19 |  |  | $ | 0.0729 |  |  |  | 1,800,000 |  |  | $ | 0.0729 |
$ | 0.089 |  |  |  | 1,200,000 |  |  |  | 2.22 |  |  | $ | 0.089 |  |  |  | 1,200,000 |  |  | $ | 0.089 |
$ | 0.0553 |  |  |  | 500,000 |  |  |  | 1.22 |  |  | $ | 0.0553 |  |  |  | 500,000 |  |  | $ | 0.0553 |
$ | 0.0558 |  |  |  | 9,000,000 |  |  |  | 1.60 |  |  | $ | 0.0558 |  |  |  | 9,000,000 |  |  | $ | 0.0558 |
$ | 0.0534 |  |  |  | 1,200,000 |  |  |  | 3.35 |  |  | $ | 0.0534 |  |  |  | 1,200,000 |  |  | $ | 0.0534 |
$ | 0.0539 |  |  |  | 1,000,000 |  |  |  | 1.50 |  |  | $ | 0.0539 |  |  |  | 1,000,000 |  |  | $ | 0.0539 |
$ | 0.0683 |  |  |  | 500,000 |  |  |  | 1.58 |  |  | $ | 0.0683 |  |  |  | 500,000 |  |  | $ | 0.0683 |
$ | 0.0649 |  |  |  | 500,000 |  |  |  | 1.72 |  |  | $ | 0.0649 |  |  |  | 500,000 |  |  | $ | 0.0649 |
$ | 0.0495 |  |  |  | 9,000,000 |  |  |  | 2.33 |  |  | $ | 0.0495 |  |  |  | 9,000,000 |  |  | $ | 0.0495 |
$ | 0.0380 |  |  |  | 1,200,000 |  |  |  | 4.40 |  |  | $ | 0.0380 |  |  |  | 1,000,000 |  |  | $ | 0.0380 |
$ | 0.0404 |  |  |  | 1,000,000 |  |  |  | 2.00 |  |  | $ | 0.0404 |  |  |  | 1,000,000 |  |  | $ | 0.0404 |
$ | 0.0370 |  |  |  | 500,000 |  |  |  | 2.09 |  |  | $ | 0.0370 |  |  |  | 500,000 |  |  | $ | 0.0370 |
$ | 0.0340 |  |  |  | 500,000 |  |  |  | 2.22 |  |  | $ | 0.0340 |  |  |  | 500,000 |  |  | $ | 0.0340 |
$ | 0.0408 |  |  |  | 9,000,000 |  |  |  | 2.81 |  |  | $ | 0.0408 |  |  |  | 3,000,000 |  |  | $ | 0.0408 |
| Total |  |  |  | 67,200,000 |  |  |  | 1.61 |  |  | $ | 0.06 |  |  |  | 61,000,000 |  |  | $ | 0.07 |
The aggregate intrinsic value of outstanding options as of April 30, 2020 was zero. This represents options whose exercise price was less than the closing fair market value of the Company’s common stock on April 30, 2020 of approximately $0.0245 per share. Warrants The warrants issued by the Company are equity-classified. The fair value of the warrants was recorded as additional paid-in-capital, and no further adjustments are 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. Effective May 30, 2018, the Company issued a common stock purchase warrant to Aeon for a Block Trade. The Company issued a warrant to purchase 1,388,889 shares of common stock based upon a Block Trade pursuant to the engagement agreement with Aeon dated February 22, 2018. The Company classified these warrants as equity, and the warrants have a term of five years with an exercise price of approximately $0.02 per share. Using the Black-Scholes-Merton option pricing model, the Company determined the aggregate value of these warrants to be approximately $19,000. The warrants have a cashless exercise feature. Effective June 28, 2018, the Company issued a common stock purchase warrant to Aeon for a Block Trade. The Company issued a warrant to purchase 1,923,077 shares of common stock based upon a Block Trade pursuant to the engagement agreement with Aeon dated February 22, 2018. The Company classified these warrants as equity, and the warrants have a term of five years with an exercise price of approximately $0.03 per share. Using the Black-Scholes-Merton option pricing model, the Company determined the aggregate value of these warrants to be approximately $38,000. The warrants have a cashless exercise feature. Effective November 1, 2018, the Company issued a common stock purchase warrant to Aeon for a Block Trade. The Company issued a warrant to purchase 2,272,727 shares of common stock based upon a Block Trade pursuant to the engagement agreement with the Company’s placement agent dated February 22, 2018. The Company classified these warrants as equity, and the warrants have a term of five years with an exercise price of approximately $0.01 per share. Using the Black-Scholes-Merton option pricing model, the Company determined the aggregate value of these warrants to be approximately $19,000. The warrants have a cashless exercise feature. Effective March 26, 2019 the Company issued a common stock purchase warrant to Aeon for a Block Trade. The Company issued a warrant to purchase 1,250,000 shares of common stock based upon a Block Trade pursuant to the engagement agreement with Aeon dated February 22, 2018. The Company classified these warrants as equity, and the warrants have a term of five years with an exercise price of $0.01 per share. Using the Black-Scholes-Merton option pricing model, the Company determined the aggregate value of these warrants to be approximately $9,000. The warrants have a cashless exercise feature. Effective March 26, 2019 the Company issued a common stock purchase warrant to Aeon for a Block Trade. The Company issued a warrant to purchase 1,250,000 shares of common stock based upon a Block Trade pursuant to the engagement agreement with Aeon dated February 22, 2018. The Company classified these warrants as equity, and the warrants have a term of five years with an exercise price of $0.01 per share. Using the Black-Scholes-Merton option pricing model, the Company determined the aggregate value of these warrants to be approximately $9,000. The warrants have a cashless exercise feature. Effective June 13, 2019 the Company issued a common stock purchase warrant to Aeon for a Block Trade. The Company issued a warrant to purchase 1,338,889 shares of common stock based upon a Block Trade pursuant to the engagement agreement with Aeon dated February 22, 2018. The Company classified these warrants as equity, and the warrants have a term of five years with an exercise price of approximately $0.01 per share. Using the Black-Scholes-Merton option pricing model, the Company determined the aggregate value of these warrants to be approximately $9,000. The warrants have a cashless exercise feature. Effective July 15, 2019 the Company issued a common stock purchase warrant to Aeon for a Block Trade. The Company issued a warrant to purchase 1,944,444 shares of common stock based upon a Block Trade pursuant to the engagement agreement with Aeon dated February 22, 2018. The Company classified these warrants as equity, and the warrants have a term of five years with an exercise price of approximately $0.01 per share. Using the Black-Scholes-Merton option pricing model, the Company determined the aggregate value of these warrants to be approximately $12,000. The warrants have a cashless exercise feature. Effective August 7, 2019 the Company issued a common stock purchase warrant to Aeon for a Block Trade. The Company issued a warrant to purchase 3,000,000 shares of common stock based upon a Block Trade pursuant to the engagement agreement with Aeon dated February 22, 2018. The Company classified these warrants as equity, and the warrants have a term of five years with an exercise price of approximately $0.01 per share. Using the Black-Scholes-Merton option pricing model, the Company determined the aggregate value of these warrants to be approximately $10,000. The warrants have a cashless exercise feature. Effective August 7, 2019 the Company issued a common stock purchase warrant to Aeon for a Block Trade. The Company issued a warrant to purchase 500,000 shares of common stock based upon a Block Trade pursuant to the engagement agreement with Aeon dated February 22, 2018. The Company classified these warrants as equity, and the warrants have a term of five years with an exercise price of approximately $0.01 per share. Using the Black-Scholes-Merton option pricing model, the Company determined the aggregate value of these warrants to be approximately $2,000. The warrants have a cashless exercise feature. Effective February 24, 2020 the Company issued a common stock purchase warrant to Aeon for a Block Trade. The Company issued a warrant to purchase 1,000,000 shares of common stock based upon a Block Trade pursuant to the engagement agreement with Aeon dated February 22, 2018. The Company classified these warrants as equity, and the warrants have a term of five years with an exercise price of approximately $0.01 per share. Using the Black-Scholes-Merton option pricing model, the Company determined the aggregate value of these warrants to be approximately $3,000. The warrants have a cashless exercise feature. Effective February 24, 2020 the Company issued a common stock purchase warrant to Aeon for a Block Trade. The Company issued a warrant to purchase 1,000,000 shares of common stock based upon a Block Trade pursuant to the engagement agreement with Aeon dated February 22, 2018. The Company classified these warrants as equity, and the warrants have a term of five years with an exercise price of approximately $0.01 per share. Using the Black-Scholes-Merton option pricing model, the Company determined the aggregate value of these warrants to be approximately $3,000. The warrants have a cashless exercise feature. Effective March 24, 2020 the Company issued a common stock purchase warrant to Aeon for a Block Trade. The Company issued a warrant to purchase 3,500,000 shares of common stock based upon a Block Trade pursuant to the engagement agreement with Aeon dated February 22, 2018. The Company classified these warrants as equity, and the warrants have a term of five years with an exercise price of approximately $0.01 per share. Using the Black-Scholes-Merton option pricing model, the Company determined the aggregate value of these warrants to be approximately $12,000. The warrants have a cashless exercise feature. Effective March 31, 2020 the Company issued a common stock purchase warrant to Aeon for a Block Trade. The Company issued a warrant to purchase 1,000,000 shares of common stock based upon a Block Trade pursuant to the engagement agreement with Aeon dated February 22, 2018. The Company classified these warrants as equity, and the warrants have a term of five years with an exercise price of approximately $0.01 per share. Using the Black-Scholes-Merton option pricing model, the Company determined the aggregate value of these warrants to be approximately $3,000. The warrants have a cashless exercise feature. Effective April 7, 2020 the Company issued a common stock purchase warrant to Aeon for a Block Trade. The Company issued a warrant to purchase 2,500,000 shares of common stock based upon a Block Trade pursuant to the engagement agreement with Aeon dated February 22, 2018. The Company classified these warrants as equity, and the warrants have a term of five years with an exercise price of $0.01 per share. Using the Black-Scholes-Merton option pricing model, the Company determined the aggregate value of these warrants to be approximately $17,000. The warrants have a cashless exercise feature. Effective April 21, 2020 the Company issued a common stock purchase warrant to Aeon for a Block Trade. The Company issued a warrant to purchase 833,333 shares of common stock based upon a Block Trade pursuant to the engagement agreement with Aeon dated February 22, 2018. The Company classified these warrants as equity, and the warrants have a term of five years with an exercise price of approximately $0.02 per share. Using the Black-Scholes-Merton option pricing model, the Company determined the aggregate value of these warrants to be approximately $9,000. The warrants have a cashless exercise feature. A summary of the Company’s warrant activity and related information for the two years ended April 30, 2020 are shown below:
|  | Warrants |  |  | Weighted Average Exercise Price |
Outstanding, April 30, 2018 |  |  | 33,993,104 |  |  | $ | 0.10 |
Issued |  |  | 8,084,693 |  |  |  | – |
Expired |  |  | – |  |  |  | – |
Outstanding, April 30, 2019 |  |  | 42,077,797 |  |  |  | 0.09 |
Issued |  |  | 16,666,666 |  |  |  | – |
Expired |  |  | (10,854,308 | ) |  |  | – |
Outstanding, April 30, 2020 |  |  | 47,890,155 |  |  |  | – |
Exercisable, April 30, 2020 |  |  | 47,890,155 |  |  | $ | 0.05 |
The following table summarizes additional information concerning warrants outstanding and exercisable at April 30, 2020:
Exercise Prices |  | Number of Warrant Shares Exercisable at April 30, 2020 |  |  | Weighted Average Remaining Contractual Life |  |  | Weighted Average Exercise Price |
$0.12 |  |  | 17,000,000 |  |  |  | 0.69 |  |  |  |  |
$0.065 |  |  | 769,231 |  |  |  | 1.64 |  |  |  |  |
$0.0575 |  |  | 869,565 |  |  |  | 1.93 |  |  |  |  |
$0.03 |  |  | 2,500,000 |  |  |  | 2.58 |  |  |  |  |
$0.026 |  |  | 1,923,077 |  |  |  | 3.16 |  |  |  |  |
$0.025 |  |  | 2,000,000 |  |  |  | 2.24 |  |  |  |  |
$0.018 |  |  | 1,388,889 |  |  |  | 3.08 |  |  |  |  |
$0.011 |  |  | 2,272,727 |  |  |  | 3.51 |  |  |  |  |
$0.01 |  |  | 5,000,000 |  |  |  | 4.42 |  |  |  |  |
$0.015 |  |  | 833,333 |  |  |  | 4.98 |  |  |  |  |
$0.009 |  |  | 3,333,333 |  |  |  | 4.17 |  |  |  |  |
$0.005 |  |  | 10,000,000 |  |  |  | 4.67 |  |  |  |  |
|  |  | 47,890,155 |  |  |  | 2.73 |  |  | $ | 0.05 |

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- Definition The entire disclosure for share-based payment arrangement. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 + Details
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