Note 12 - Stock-based Compensation

6 Months Ended

Jan. 31, 2019

Notes to Financial Statements

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

NOTE

12

: 

STOCK-BASED COMPENSATION

At

January 31, 2019,

we had

one

stock option plan, the

2018

Stock Incentive Plan, which superseded and replaced our prior equity compensation plan, being our

2017

Stock Incentive Plan (collectively, the “Stock Incentive Plan”).

Stock Options

During the

three

months ended

January 31, 2019,

we granted stock options under the

2018

Plan to certain employees to purchase a total of

40,000

shares of the Company exercisable at

$1.25

per share with a term of

five

years.

These stock options are subject to a

24

-month vesting provision whereby at the end of the

first

three

and

six

months after the grant date,

12.5%

of the total stock options become exercisable, and whereby at the end of each of

12,

18

and

24

months after the grant date,

25%

of the total stock options become exercisable.

 
A summary of stock options granted by the Company during the

six

months ended

January 31, 2019,

including corresponding grant date fair values and assumptions using the Black Scholes option pricing model is as follows:

Date	Options Granted		Exercise Price		Term (Years)		Fair Value		Expected Life (Years)		Risk-Free Interest Rate			Dividend Yield			Expected Volatility
January 3, 2019		40,000	$	1.25		5.00	$	24,164		3.70		2.34	%		0.00	%		63.70	%
Total		40,000					$	24,164

A continuity schedule of outstanding stock options for the underlying shares for the

six

months ended

January 31, 2019

is as follows:

	Number of Stock Options			Weighted Average Exercise Price
Balance, July 31, 2018		14,911,625		$	1.41
Exercised		(183,500	)		1.19
Forfeited		(27,500	)		1.44
Balance, October 31, 2018		14,700,625		$	1.41
Granted		40,000			1.25
Exercised		(25,000	)		0.45
Forfeited		(12,500	)		1.33
Balance, January 31, 2019		14,703,125		$	1.41

During the

six

months ended

January 31, 2019,

we issued

117,386

shares upon exercise of stock options, of which

66,250

stock options were exercised in cash for proceeds of

$72,363,

and

142,250

stock options were exercised on a forfeiture basis resulting in

51,136

net shares issued. The intrinsic value of these exercised options totaled

$121,927.

A continuity schedule of outstanding un-vested stock options at

January 31, 2019,

and the changes during the periods, is as follows:

	Number of Unvested Stock Options			Weighted Average Grant-Date Fair Value
Balance, July 31, 2018		3,479,500		$	0.68
Vested		(801,500	)		0.70
Forfeited		(27,500	)		0.67
Balance, October 31, 2018		2,650,500			0.67
Granted		40,000			0.60
Vested		(278,000	)		0.69
Balance, January 31, 2019		2,412,500		$	0.67

At

January 31, 2019,

the aggregate intrinsic value under the provisions of ASC

718

of all outstanding stock options was estimated at

$944,258

(vested:

$924,993

and unvested:

$19,265

).

At

January 31, 2019,

unrecognized stock-based compensation expense related to the unvested portion of stock options totaled

$752,717

to be recognized over the next

1.0

year.

A summary of stock options outstanding and exercisable at

January 31, 2019

is as follows:

			Options Outstanding						Options Exercisable
Range of Exercise Prices			Outstanding at January 31, 2019		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)		Exercisable at January 31, 2019		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)
$0.93	to	$1.30		5,086,625	$	1.11		2.73		4,177,125	$	1.08		2.53
$1.31	to	$3.86		9,616,500		1.57		1.62		8,113,500		1.58		1.09
				14,703,125	$	1.41		2.00		12,290,625	$	1.41		1.58

Stock

-

Based Compensation

A summary of stock-based compensation expense is as follows:

	Three Months Ended January 31,				Six Months Ended January 31,
	2019		2018		2019		2018
Stock-Based Compensation for Consultants
Common stock issued for consulting services	$	229,806	$	157,599	$	360,610	$	438,778
Amortization of stock option expenses		30,319		341,788		84,720		341,619
		260,125		499,387		445,330		780,397
Stock-Based Compensation for Management
Common stock issued to management		35,639		34,230		70,983		69,244
Amortization of stock option expenses		139,900		86,650		356,704		180,981
		175,539		120,880		427,687		250,225
Stock-Based Compensation for Employees
Common stock issued to employees		124,872		201,714		248,695		377,036
Amortization of stock option expenses		186,806		152,114		467,154		334,731
		311,678		353,828		715,849		711,767
Settlement of share issuance obligation		-		-		-		(127,615	)
	$	747,342	$	974,095	$	1,588,866	$	1,614,774