Note 4—Equity

Issuances of Class B Common Stock:

Class B common stock activity for the nine months ended April 30, 2016 was as follows:

	1.	The Company issued a total of 36,000 shares to two employees as compensation.
	2.	The Company issued 60,000 shares to Davidi Jonas (“Jonas”), the Company’s Chief Executive Officer and President, as compensation.
	3.	The Company issued 24,000 shares to non-employee directors as compensation.
	4.	The Company issued 1,250 shares to a consultant as compensation.

Class B common stock activity subsequent to April 30, 2016 was as follows:

The Company issued 1,452 shares upon the exercise of stock options and received proceeds of $8,232.

See Stock-Based Compensation below for a further discussion.

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.

At both April 30, 2016 and July 31, 2015, there were 41,723 shares of treasury stock at a value of $480,000.

Stock-Based Compensation:

From time to time, the Company issues restricted shares of Class B common stock and options to purchase Class B common stock to non-employee directors, officers, employees, and other service providers.

On October 8, 2015, the Company approved an amendment and restatement of the Company’s 2013 Stock Option and Incentive Plan (“2013 Plan”) increasing the number of shares of the Company’s Class B common stock available for the grant of awards thereunder by 475,000 shares. The increase was approved by the stockholders on January 12, 2016 at the Company’s annual stockholder meeting.

Issuances of Class B common stock included in stock-based compensation for the nine months ended April 30, 2016 are as follows:

On July 23, 2015, the Compensation Committee of the Board approved the issuance to Jonas of 60,000 shares of Class B common stock for services performed for the entire fiscal year of 2015, ending July 31, 2015, subject to ratification by the Company’s Chief Financial Officer, Jonathan Rand. The shares vested immediately upon ratification. The aggregate fair value of the issuance was $1,495,000 and was charged as stock compensation in Fiscal 2015. The shares were issued on August 7, 2015. As of July 31, 2015, such shares were classified as common stock to be issued.

In October 2015, the Company granted an employee 28,000 restricted shares of Class B common stock. 4,000 of the shares vested on April 4, 2016. The balance of the shares will vest as to one-third of the granted shares on each of October 16, 2016, 2017 and 2018. The aggregate fair value of the grant was $1,052,000 which is being charged to expense on a straight-line basis over the vesting period.

On January 5, 2016, 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 upon grant. The aggregate fair value of the grant was approximately $418,000.

On March 15, 2016, the Company granted an employee 8,000 restricted shares of Class B common stock. 4,000 of the shares will vest on October 16, 2016 and 4,000 shares will vest on March 16, 2017. The aggregate fair value of the grant was $285,000 which is being charged to expense on a straight-line basis over the vesting period.

Stock-based compensation is included in selling, general and administrative expense and amounted to $605,000 and $295,000 for the three months ended April 30, 2016 and 2015, respectively and $2,191,000 and $1,524,000 for the nine months ended April 30, 2016 and 2015, respectively. As of April 30, 2016, there was approximately $2,851,000 of total unrecognized compensation cost related to non-vested restricted shares. The unrecognized compensation cost is expected to be recognized over the remaining vesting period, of which $1,747,000 is expected to be recognized in the twelve months ending April 30, 2017, $825,000 is expected to be recognized in the twelve months ending April 30, 2018, and $279,000 is expected to be recognized in the twelve months ending April 30, 2019.