Equity

3 Months Ended

Oct. 31, 2014

Equity [Abstract]

Equity

Note 3—Equity

Issuances of Class B Common Stock: 

Class B common stock activity for the three months ended October 31, 2014 was as follows:

1. The Company issued 183,000 shares to officers and consultants as compensation. See Stock-Based Compensation below for a further discussion.
2. The Company issued 1,244 shares upon the exercise of stock options and received proceeds of $7,053.

Class B common stock activity subsequent to October 31, 2014 was as follows:

1. The Company issued 2,924 shares upon the exercise of stock options and received proceeds of approximately $16,600.
2. The Company cancelled 1,000 shares issued to former employees of IDT.

Treasury Stock for Payroll Tax Withholding:

Treasury stock consists of shares of Class B common stock that were tendered by employees of ours to satisfy the employees' tax withholding obligations in connection with the lapsing of restrictions on awards of restricted stock. Such shares were repurchased by us based on their fair market value on the trading day immediately prior to the vesting date and the proceeds utilized to pay the withholding taxes due upon such vesting event. In September 2014, 35,846 shares of Class B common stock with a value of $348,051 were withheld and are now held in treasury.

Amendment of Stock Option and Incentive Plan (the “Plan”):

In October 2013, the Board of Directors approved an amendment to the Plan increasing the number of shares of the Company’s Class B common stock available for grant of awards by an additional 350,000 shares. The increase is subject to stockholder approval at the Company’s next annual stockholder meeting.

Stock-Based Compensation: 

From time to time, the Company issues Class B common stock and options to purchase Class B common stock to non-employee directors, officers, employees and other service providers. Stock-based compensation is included in selling, general and administrative expense and amounted to $383,262 and $156,294 for the three months ended October 31, 2014 and 2013, respectively. Issuances of Class B common stock included in stock-based compensation for the three months ended October 31, 2014 are as follows:

On August 1, 2014, the Company granted Davidi Jonas 71,000 restricted shares of Class B common stock and Jonathan Rand 52,000 restricted shares of Class B common stock. Both grants of restricted shares will vest as to approximately one-third of the granted shares on each of February 1, 2015, 2016 and 2017. The aggregate fair value of the grant was approximately $1,214,000 which is being charged to expense on a straight-line basis over the vesting period.

On September 1, 2014, the Company granted Zhouyue (Jerry) Pi, it’s Chief Technology Officer, 60,000 restricted shares of Class B common stock. These restricted shares will vest as to one-third of the granted shares on each of September 1, 2015, 2016 and 2017. The aggregate fair value of the grant was $573,000 which is being charged to expense on a straight-line basis over the vesting period.