APPý

Quarterly report pursuant to Section 13 or 15(d)

Stockholders' Equity

v3.21.2
Stockholders' Equity
 6 Months Ended
Oct. 31, 2021
Stockholders' Equity Note [Abstract]
Stockholders' Equity Stockholders’ Equity
AGI maintains two stock-based incentive plans: the 2012 Equity Incentive Plan (the “2012 Plan”) and 2018 Equity Incentive Plan (the “2018 Plan”) that provides for the grant of shares in the form of incentive stock options, non-qualified stock options, restricted shares, stock appreciation rights and RSUs to employees, consultants, officers and directors.

On December 30, 2020, the Company held its Annual Meeting of Shareholders at which the shareholders voted to amend the 2018 Plan to increase the number of shares of common stock available for issuance under the 2018 Plan from 1,100,000 to 1,600,000 shares.

As of October31, 2021 and April 30, 2021 there were 171,459 and 549,739 shares remaining available for future issuance under the 2012 and the 2018 Plans, respectively.

Restricted Stock
As of October31, 2021, there were 8,224 unvested shares of restricted common stock outstanding. During the six months ended October31, 2021, there were no new restricted stock grants, forfeitures, vested stock or expirations. Total unrecognized compensation expense related to the unvested shares as of October31, 2021 was $7,018, and is expected to be recognized over a weighted-average period of approximately 0.17 years.

Restricted Stock Units
A summary of the Company’s RSU activity during the six months ended October31, 2021 is presented below:
Restricted Stock Units Number of Shares Weighted Average Grant Price
Unvested balance outstanding, April 30, 2021 549,972 $ 6.58
Granted 412,792 6.16
Forfeits (28,841) 9.80
Vested (34,820) 6.15
Expired — —
Unvested balance outstanding, October 31, 2021 899,103 $ 5.38

Of the 412,792 RSUs granted during the six months ended October31, 2021, 410,000 RSUs correspond to executive compensation grants summarized below.

On August 16 2021, the Compensation Committee approved a 125,000 RSU grant to the Company’s newly hired Chief Financial Officer as part of the employment agreement. The grant has a grant date fair value of $725,000 based on a closing stock price of $5.80 per share. On August 12, 2021, the Compensation Committee approved individual grants of 80,000 RSUs
to the Company’s Chief Operating Officer and Chief Academic Officer. The grants have a total grant date fair value of $1.0million based on a closing stock price of $6.48 per share.

The three executive grants discussed above are under the Company’s 2018 Equity Incentive Plan and are set to vest annually over a period of three years and are subject to continued employment as an officer of the Company on each applicable vesting date. The amortization expense related to these grants for the three months ended October 31, 2021 was $146,817 and is included in "general and administrative expense" in the accompanying consolidated statement of operations.

On July 21, 2021, as part of a new employment agreement, the Compensation Committee approved a 125,000 RSU grant to the Company's Chief Executive Officer under the Company's 2018 Equity Incentive Plan. The grant has a grant date fair value of $873,750 based on a closing stock price of $6.99 per share. As stipulated in the grant, vesting is subject to continued employment with the Company and will occur in full on the date the Company files with the SEC a quarterly or annual report on Forms 10-Q or 10-K, as applicable, which reflects the Company's reported net income on a GAAP basis. The Company expects this condition to be met in the fourth quarter of Fiscal 2022 and is amortizing the expense over one year through July 2022 (the filing date of the Form 10-K for Fiscal Year 2022). The Company will continue to assess the performance condition at each reporting period. If the RSUs do not vest within three years from the July 21, 2021 effective date, they will be forfeited. The amortization expense related to this grant for the three and six months ended October31, 2021 was $72,813 and $218,438, respectively, which is included in general and administrative expense in the consolidated statements of operations.

The remaining 2,792 RSU grants during the six months ended October 31, 2021 were granted to employees and have a grant date fair value that ranges from $4.92 to $6.50 per share, or a total of $16,456, vesting annually over three years and subject to continued employment on each applicable vesting date.

Of the 899,103 unvested RSUs outstanding at October31, 2021, there are 195,000 RSUs remaining from the February 4, 2020 executive grant. These RSUs vest four years from the grant date, if each applicable executive is still employed by the Company on the vesting date and subject to accelerated vesting for all RSUs if the closing price of the Company’s common stock is at least $12 for 20 consecutive trading days. On the grant date, the closing price of the Company's common stock on The Nasdaq Global Market was $9.49 per share. The amortization expense related to these transactions for the three and six months ended October31, 2021 and 2020, was approximately $112,155 and $224,311, and $111,211 and $1.5million, respectively, which is included in general and administrative expense in the consolidated statements of operations.
At October31, 2021, total unrecognized compensation expense related to unvested RSUs is $4,839,604 and is expected to be recognized over a weighted-average period of approximately 1.57 years.
Warrants
The Company estimates the fair value of warrants utilizing the Black-Scholes pricing model, which is dependent upon several variables such as the expected term, expected volatility of the Company’s stock price over the expected term, expected risk-free interest rate over the expected term and expected dividend yield rate over the expected term. The Company believes this valuation methodology is appropriate for estimating the fair value of warrants issued to directors which are subject to ASC Topic 718 requirements. These amounts are estimates and thus may not be reflective of actual future results, nor amounts ultimately realized by recipients of these grants. The Company recognizes expense on a straight-line basis over the vesting period of each warrant issued.
A summary of the Company’s warrant activity during the six months ended October31, 2021 is presented below:
Warrants Number of
Shares		 Weighted
Average
Exercise
Price		 Weighted
Average
Remaining
Contractual
Term		 Aggregate
Intrinsic
Value
Balance Outstanding, April 30, 2021 374,174 $ 6.37 1.90 $ —
Granted 75,000 $ 6.23 4.80 —
Exercised — $ — — —
Surrendered — $ — — —
Expired — $ — — —
Balance Outstanding, October 31, 2021 449,174 $ 6.35 1.96 $ —
Exercisable, October 31, 2021 424,174 $ 6.31 1.80 $ —

OUTSTANDING WARRANTS EXERCISABLE WARRANTS
Exercise
Price		 Weighted
Average
Exercise
Price		 Outstanding
No. of
Warrants		 Weighted
Average
Exercise
Price		 Weighted
Average
Remaining Life
In Years		 Exercisable
No. of
Warrants
$ 4.89 $ 4.89 50,000 $ 4.89 2.44 50,000
$ 5.85 $ 5.85 50,000 $ 5.85 4.84 50,000
$ 6.00 $ 6.00 100,000 $ 6.00 2.35 100,000
$ 6.87 $ 6.87 224,174 $ 6.87 0.73 224,174
$ 6.99 $ 6.99 25,000
449,174 424,174

On August 31, 2021, the Compensation Committee approved the issuance of warrants to the Leon and Toby Cooperman Family Foundation as an extension fee in connection with the $5million revolving line of credit. The warrants allow for the purchase of 50,000 shares of the Company’s common stock and have an exercise price of $5.85. The warrants have an exercise period of five years from the August 31, 2021 issuance date and will terminate automatically and immediately upon the expiration of the exercise period. The fair value of the warrants is $137,500 and is being amortized over the 14-month line of credit period. The Company has recognized $19,643 of amortization expense in connection with the fair value of the warrants for the three months ending October 31, 2021, which is included in "interest expense" in the accompanying consolidated statement of operations.

On July 21, 2021, the Compensation Committee approved warrants to a former member of the Board of Directors for the purchase of 25,000 shares of the Company's common stock with an exercise price of $6.99 per share. The warrants have an exercise period of five years from the July 21, 2021 issuance date and vest annually over a three year period subject to continued service on the Company's Advisory Board on each applicable vesting date. The warrants will terminate automatically and immediately upon the expiration of the exercise period. The fair value of the warrants is $84,000 and is being amortized over the three year vesting period. The Company has recognized $7,000 and $9,333 of amortization expense in connection with the fair value of the warrants for the three and six months ending October31, 2021, respectively, which is included in “general and administrative” expense in the accompanying consolidated statement of operations.
During the three months ended July 31, 2020, there was a warrant modification and acceleration charge of $25,966 related to the exercise of 192,049 warrants by the Leon and Toby Cooperman Family Foundation, which was included in “other (expense) income, net” in the accompanying consolidated statement of operations.
On April 10, 2019, the Company issued warrants to an advisory board member for services to purchase 50,000 shares of the Company's common stock with an exercise price of $4.89 per share. The warrants have an exercise period of five years from the April 10, 2019 issuance date and vest annually over a three year period. The warrants will terminate automatically and immediately upon the expiration of the exercise period. The fair value of the warrants is $109,500 and is being amortized over
the three year vesting period. The Company has recognized $9,125 and $18,250 of amortization expense in connection with the fair value of the warrants for the three and six months ending October31, 2021 and 2020, respectively, which is included in “general and administrative” expense in the accompanying consolidated statement of operations.
Stock Option Grants to Employees and Directors

The Company estimates the fair value of share-based compensation utilizing the Black-Scholes option pricing model, which is dependent upon several variables such as the expected option term, expected volatility of the Company’s stock price over the expected term, expected risk-free interest rate over the expected option term and expected dividend yield rate over the expected option term. The Company believes this valuation methodology is appropriate for estimating the fair value of stock options granted to employees and directors which are subject to ASC Topic 718 requirements. These amounts are estimates and thus may not be reflective of actual future results, nor amounts ultimately realized by recipients of these grants. The Company recognizes compensation on a straight-line basis over the requisite service period for each award.

The Company utilizes the simplified method to estimate the expected life for stock options granted to employees. The simplified method was used as the Company does not have sufficient historical data regarding stock option exercises. The expected volatility is based on historical volatility. The risk-free interest rate is based on the U.S. Treasury yields with terms equivalent to the expected life of the related option at the time of the grant. Dividend yield is based on historical trends. While the Company believes these estimates are reasonable, the compensation expense recorded would increase if the expected life was increased, a higher expected volatility was used, or if the expected dividend yield increased.

A summary of the Company’s stock option activity for employees and directors during the six months ended October31, 2021, is presented below:
Options Number of
Shares		 Weighted
Average
Exercise
Price		 Weighted
Average
Remaining
Contractual
Term		 Aggregate
Intrinsic
Value
Balance Outstanding, April 30, 2021 1,214,473 $ 6.24 1.88 $ 204,719
Granted — — — —
Exercised (216,752) 5.77 — —
Forfeited (4,419) 4.61 — —
Expired (1,252) 2.76 — —
Balance Outstanding, October31, 2021
 992,050 $ 6.61 1.56 $ 172,313
Exercisable, October31, 2021
 928,457 $ 6.72 1.51 $ 161,584

Of the 216,752 options exercised for 46,908 common shares during the six months ended October 31, 2021, 200,000 were cashless options exercised by the Company’s Chief Operating Officer in September 2021. As part of this cashless transactions, 30,156 net shares were issued and 169,844 were retained by the Company.
During the three and six months ended October31, 2021 and 2020, the Company received proceeds from the exercise of stock options for cash of $33,486 and $56,034 and $945,332 and $2,215,315, respectively.
OUTSTANDING OPTIONS EXERCISABLE OPTIONS
Exercise
Price		 Weighted
Average
Exercise
Price		 Outstanding
Number of
Options		 Weighted
Average
Exercise
Price		 Weighted
Average
Remaining Life
In Years		 Exercisable
Number of
Options
$3.24 to $4.38
 $ 3.82 179,264 $ 3.81 0.78 166,597
$4.50 to $5.20
 $ 4.94 153,944 $ 5.00 1.99 111,019
$5.95 to $6.28
 $ 5.95 28,000 $ 5.95 0.81 28,000
$7.17 to $7.55
 $ 7.45 473,093 $ 7.46 1.82 465,092
$8.57 to $9.07
 $ 8.98 157,749 $ 8.98 1.18 157,749
992,050 928,457
As of October31, 2021, there was approximately $28,670 of unrecognized compensation costs related to unvested stock options. That cost is expected to be recognized over a weighted-average period of approximately 0.92 year.

Stock-based compensation related stock options, RSUs and restricted stock

For the three and six months ended October31, 2021, the Company recorded stock-based compensation expense of $722,158 and $1,264,870, respectively, which consisted of: $23,504 and $108,912, $688,129 and $1,134,906 and $10,525 and $21,052, respectively, in connection with stock options, RSUs and restricted stock, which is included in “general and administrative” expense in the unaudited consolidated statements of operations.

For the three and six months ended October31, 2020, the Company recorded stock-based compensation expense of $1,831,548 and $2,318,658, respectively, which consisted of: $142,397 and $311,131, $1,678,622 and $1,986,474 and $10,529 and $21,053, respectively, in connection with stock options, RSUs and restricted stock, which is included in “general and administrative” expense in the unaudited consolidated statements of operations.

Treasury Stock

As of both October31, 2021 and April 30, 2021, 155,486 shares of common stock were held in treasury representing shares of common stock surrendered upon the exercise of stock options in payment of the exercise prices and the taxes and similar amounts due arising from the option exercises. The value of these shares is approximately $1.8million and represents the fair market value of shares surrendered as of the date of each applicable exercise date.