Common Stock

3 Months Ended

Jul. 31, 2015

Common Stock [Text Block]

Note 5	Common Stock
	Stock Options
	The Company has a stock option plan (the “2010 Stock Option Plan”) under which options to purchase shares of the Company’s common stock may be granted to employees, directors and consultants. Stock options entitle the holder to purchase shares of the Company’s common stock at an exercise price determined by the board of directors (the “Board”) of the Company at the time of the grant. The options generally vest in the amount of 12.5% on the date which is six months from the date of grant and then beginning in the seventh month at 1/42 per month for 42 months, at which time the options are fully vested.
	The maximum number of shares of common stock authorized by the stockholders and reserved for issuance by the Board of Directors of the Company under 2010 Stock Option Plan is 7,860,000.
	The Company uses the Black-Scholes option pricing model to determine the fair value of stock options granted. The Company applied an estimated forfeiture rate of 15% for the three months ended July 31, 2015 and 2014 in determining the expense recorded in the accompanying consolidated statement of operations.
	For the majority of the stock options granted, the number of shares issued on the date the stock options are exercised is net of the minimum statutory withholding requirements that the Company pays in cash to the appropriate taxing authorities on behalf of its employees. Although these withheld shares are not issued or considered common stock repurchases under our authorized plan they are treated as common stock repurchases in our consolidated financial statements, as they reduce the number of shares that would have been issued upon vesting.
	The weighted-average fair value of options granted during the three months ended July 31, 2015 and 2014 was $0.31 and $0.51, respectively. The weighted-average assumptions utilized to determine such values are presented in the following table:

	Three Months Ended
	July 31,
	2015	2014
Risk-free interest rate	1.66%	1.65%
Expected volatility	90.23%	58.20%
Expected term	3.7 years	3.7 years
Dividend yield	0%	0%

The following is a summary of the status of the Company’s stock options as of July 31, 2015 and the stock option activity during the three months ended July 31, 2015:

	Weighted Average
	Number of		Exercise Price
	Options		per Share
Outstanding at April 30, 2015	4,117,812		$1.52
Granted	579,000		$0.50
Forfeited/Cancelled	(193,854	)	$1.16
Outstanding at July 31, 2015	4,502,958		$1.41
Exercisable at July 31, 2015	2,290,006		$1.75
Exercisable at April 30, 2015	2,105,439		$1.77

The following table summarizes stock options outstanding as of July 31, 2015:

	Number of		Aggregate		Number of		Aggregate
	Options		Intrinsic		Options		Intrinsic
Exercise Price	Outstanding		Value	Expiry Date	Exercisable		Value
$0.45	50,000	$	–	March 9, 2020	–	$	–
$0.47	122,750		–	August 21, 2015 to September 26, 2016	122,750		–
$0.50	579,000		–	July 17, 2020	–		–
$0.52	325,000		–	March 23, 2020	–		–
$0.78	34,000		–	December 12, 2019	4,964		–
$1.05	86,375		–	September 12, 2019	25,417		–
$1.15	550,000		–	July 11, 2019	175,000		–
$1.23	20,833		–	January 13, 2019	20,833		–
$1.31	600,000		–	December 12, 2018	237,500		–
$1.41	100,000		–	October 1, 2018	43,750		–
$1.70	650,000		–	December 14, 2016	582,292		–
$1.90	845,000		–	December 14, 2015 to July 25, 2018	612,500		–
$2.15	240,000		–	September 7, 2016	240,000		–
$2.90	300,000		–	July 19, 2017	225,000		–
July 31, 2015	4,502,958	$	–		2,290,006	$	–
April 30, 2015	4,117,812	$	6,183		2,105,439	$	3,683

The aggregate intrinsic value in the preceding table represents the total intrinsic value, based on the Company’s closing stock price of $0.45 per share as of July 31, 2015 (April 30, 2015 – $0.50), which would have been received by the option holders had all option holders exercised their options as of that date. The total number of in-the-money options vested and exercisable as of July 31, 2015 was nil (April 30, 2015 – 122,750). The total intrinsic value of options exercised during the three months ended July 31, 2015 was $nil (July 31, 2014 – $1,927). The grant date fair value of options vested during the three months ended July 31, 2015 was $151,982 (July 31, 2014 - $195,957).

The following table summarizes non-vested stock purchase options outstanding as of July 31, 2015.

			Weighted
	Number of		Average Grant
	Options		Date Fair Value
Non-vested options at April 30, 2015	2,012,373		$0.62
Granted	579,000		$0.31
Vested	(187,796	)	$0.81
Forfeited/Cancelled	(190,625	)	$0.49
Non-vested options at July 31, 2015	2,212,952		$0.54

As of July 31, 2015, there was $971,703 of total unrecognized compensation cost related to unvested share-based compensation awards. This unrecognized compensation cost is expected to be recognized over a weighted average period of 2.4 years.

Employee and non-employee stock-based compensation amounts classified in the Company’s consolidated statements of operations for the three months ended July 31, 2015 and 2014 are as follows:

		Three Months Ended
		July 31,
		2015		2014
Cost of sales	$	14,687	$	18,476
Sales and marketing		68,930		60,888
Research and development		17,564		15,546
General and administrative		55,889		61,191
Total stock-option based compensation	$	157,070	$	156,101

Warrants

On June 19, 2012, the Company issued an aggregate of 1,465,000 units under a non-brokered private placement for aggregate gross proceeds of CDN$3,662,500 ($3,579,335) at a price of CDN$2.50 ($2.44) per unit, with each unit consisting of one share of the Company’s common stock and one-half of one common share purchase warrant, with each whole warrant entitling the holder to purchase one additional share of the Company’s common stock at an exercise price of $3.25 per share until June 19, 2014. The 732,500 warrants issued expired unexercised on June 20, 2014.

Employee Stock Purchase Plan

Under the terms of the Employee Stock Purchase Plan (the “ESPP”) all regular salaried (non- probationary) employees can purchase up to 6% of their base salary in shares of the Company’s common stock at market price. The Company will match 50% of the shares purchased by issuing or purchasing in the market up to 3% of the respective employee’s base salary in shares. During the three months ended July 31, 2015, the Company matched $11,580 (2014 - $14,973) in shares purchased by employees under the ESPP. During the three months ended July 31, 2015, no shares (2014 – 39,366) were purchased on the open market and 65,124 share were issued through treasury (2014 – nil) under the ESPP.

A total of 700,000 shares have been reserved for issuance under the ESPP. As of July 31, 2015, a total of 468,767 shares were available for issuance under the ESPP.

Normal Course Issuer Bid Plan

Pursuant to a normal course issuer bid (“NCIB”) commencing on March 19, 2015 and expiring March 18, 2016, the Company was authorized to purchase 2,434,034 of its common shares through the facilities of the Toronto Stock Exchange (the “TSX”) and other Canadian marketplaces or US marketplaces. During the period from March 19, 2014 to March 18, 2015, the Company repurchased 361,326 common shares at an average price of $0.93 (CDN$1.05) for a total of $336,033 and during the period March 19, 2015 to July 31, 2015, the Company repurchased 36,500 common shares at an average price of $0.54 (CDN$0.67) for a total of $19,710. As of July 31, 2015, a total of 669,284 shares have been cancelled and the remaining 11,500 repurchased shares are in the process of being cancelled since the NCIB was initiated.

Deferred Share Unit Plan

Under the terms of the Deferred Share Unit Plan (the “DSUP”), each DSU is equivalent to one common share. The maximum number of common shares that may be reserved for issuance to any one participant pursuant to DSUs granted under the DSUP and any share compensation arrangement is 5% of the number of shares outstanding at the time of reservation. A DSU granted to a participant who is a director of the Company shall vest immediately on the award date. A DSU granted to a participant other than a director will generally vest as to one-third (1/3) of the number of DSUs granted on the first, second and third anniversaries of the award date. Fair value of the DSUs, which is based on the closing price of the shares of the Company’s common stock on the date of grant, is recorded as compensation expense over the vesting period.

A total of 3,000,000 shares have been reserved for issuance under the DSUP. During the three months ended July 31, 2015, 550,338 (2014 — 326,613) DSUs were issued under the DSUP, of which 239,112 were granted to officers or employees and 311,226 were granted to non-employee directors. As of July 31, 2015, a total of 210,476 shares were available for issuance under the DSUP.

The following table summarizes the Company’s outstanding DSU awards as of July 31, 2015, and changes during the period then ended:

			Weighted
			Average Grant
			Date Fair
	Number of DSUs		Value Per Unit
DSUs outstanding at April 30, 2015	1,999,047	$	1.10
Granted	550,338	$	0.52
DSUs outstanding at July 31, 2015	2,549,385	$	0.98

The following table summarizes information regarding the non-vested DSUs outstanding as of July 31, 2015:

				Weighted
				Average Grant
				Date Fair
	Number of DSUs			Value Per Unit
Non-vested DSUs at April 30, 2015	251,690		$	1.46
Granted	550,338		$	0.52
Vested	(416,809	)	$	0.82
Non-vested DSUs at July 31, 2015	385,219		$	0.82

As of July 31, 2015, there was $309,048 (2014 – $369,365) of total unrecognized compensation cost related to unvested DSU awards. This unrecognized compensation cost is expected to be recognized over a weighted average period of 2.20 years (2014 – 1.47 years).

Employee and non-employee DSU based compensation amounts classified in the Company’s consolidated statements of operations for the three months ended July 31, 2015 and 2014 are as follows:

		Three Months Ended
		July 31,
		2015		2014
Sales and marketing	$	–	$	1,667
Research and development		1,633		2,082
General and administrative		202,819		208,762
Total DSU based compensation	$	204,452	$	212,511