Note 5—Equity

Class A Common Stock and Class B Common Stock:

The rights of holders of shares of Class A common stock and Class B common stock are identical except for certain voting and conversion rights and restrictions on transferability. Shares of Class A common stock and Class B common stock receive identical dividends per share when and if declared by the Company’s Board of Directors. In addition, shares of Class A common stock and Class B common stock have identical and equal priority rights per share in liquidation. The Class A common stock and Class B common stock do not have any other contractual participation rights. Shares of Class A common stock are entitled to three votes per share and shares of Class B common stock are entitled to one-tenth of a vote per share. Each share of Class A common stock may be converted into one share of Class B common stock, at any time, at the option of the holder. Shares of Class A common stock are subject to certain limitations on transferability that do not apply to shares of Class B common stock.

Class B common stock activity for fiscal 2014 was as follows:

	1.	The Company issued 311,226 shares to officers, directors and consultants as compensation. See Note 6 for a further discussion
	2.	The Company issued 9,000 shares for the conversion of deferred stock units.
	3.	The Company issued 3,065 shares for the exercise of stock options and received proceeds of $17,000.
	4.	The Company retired 3,550 shares issued to former employees of IDT.

Class B common stock activity for fiscal 2015 was as follows:

	1.	The Company issued 264,500 shares to directors and officers as compensation. See Note 6 for a further discussion
	2.	The Company issued 12,053 shares upon the exercise of stock options and received proceeds of $68,341.
	3.	The Company issued 20,300 shares for the exercise of deferred stock units.
	4.	2,200 restricted shares issued to former employees of IDT were forfeited in accordance with the terms of the grant.

Class B common stock activity subsequent to July 31, 2015 was as follows:

On August 7, 2015, the Company issued 60,000 shares of its Class B common stock to Davidi Jonas ("Jonas"), the Company’s Chief Executive Officer and President, as compensation. See Note 6 for a further discussion.

Preferred Stock:

The Company’s Board of Directors has the authority to fix the price, rights, preferences, privileges and restrictions, including voting rights, of shares of the Company’s Preferred Stock without any further vote or action by the stockholders.

Dividends:

In April 2015, Straight Path IP Group declared a dividend totaling $5,647,342. Straight Path IP Group paid $875,338 to its minority stockholders and such dividends were charged to noncontrolling interests. The dividend to Straight Path of $4,772,004 was not paid as of the filing of this report but eliminates in consolidation

The Company does not anticipate paying any additional dividends on its common stock until it achieves sustainable profitability (after satisfying all of its operational needs, including payments to the Former SPSI CEO) and retains certain minimum cash reserves. Following that time, we will retain sufficient cash to provide for investment in growth opportunities and provide for the creation of long-term stockholder value, particularly through development of the SPSI business and possibly the acquisition of complementary businesses or assets. However, we do not intend to retain earnings beyond those needs and beyond what we believe we can effectively deploy, and we expect that such additional resources would be returned to stockholders via distributions or other means. The payment of dividends in any specific period will be at the sole discretion of the Company’s Board of Directors.

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. The fair market value of the shares tendered was based 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. In April 2015, 9,982 shares of Class B common stock with a value of $197,344 were repurchased.

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

At July 31, 2015, there were 41,723 shares of treasury stock at a value of $480,392.