Equity

6 Months Ended

Jan. 31, 2015

Equity [Abstract]

Equity

Note 3—Equity

Issuances of Class B Common Stock: 

Class B common stock activity for the six months ended January 31, 2015 was as follows:

1. The Company issued 207,000 shares to directors and officers as compensation. See Stock-Based Compensation below for a further discussion.

2. The Company issued 4,625 shares upon the exercise of stock options and received proceeds of $26,223.

3. 1,000 restricted shares issued to former employees of IDT were forfeited in accordance with the terms of the grant.

There were no material issuances of Class B common stock subsequent to January 31, 2015 through the date of the filing of this report.

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 repurchased.

On January 16, 2015, the Company sold 4,105 shares of treasury stock to one of its officers and received proceeds of $65,003.

At January 31, 2015, there were 31,741 shares of treasury stock at a value of $283,048.

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 was approved by the stockholders on January 12, 2015 at the Company’s 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 $845,961 and $341,388 for the three months ended January 31, 2015 and 2014, respectively, and $1,229,223 and $497,682 for the six months ended January 31, 2015 and 2014, respectively. Issuances of Class B common stock included in stock-based compensation for the six months ended January 31, 2015 are as follows:

On August 1, 2014, the Company granted Davidi Jonas, its Chief Executive Officer, 71,000 restricted shares of Class B common stock and Jonathan Rand, its Chief Financial Officer, 52,000 restricted shares of Class B common stock. One-third of both grants of restricted shares will vest on March 16, 2015 and the remaining vest as to approximately one-third of the granted shares on each of February 1, 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, its Chief Technology Officer, 60,000 restricted shares of Class B common stock. These restricted shares 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.

On January 5, 2015, the Company granted three of its directors an aggregate of 24,000 restricted shares of Class B common stock. These grants are the annual grants to non-employee directors provided for in the Plan. The shares vested immediately. The aggregate fair value of the grant was approximately $438,000.