There were 570,808 and 503,369 options issued and outstanding as at October 31, 2008 and October 31, 2007, respectively.
5. Discontinued operations
Quarter Ended Six Months Ended
October 31, October 31,
2008 2007 2008 2007
--------------------------------------------------------------------------
Revenues $134 ($42) $156 $340
Expenses
Research and
development 8 (46) 8 1,400
Selling and marketing 5 (2) 5 1,006
Restructuring - 12 - 166
--------------------------------------------------------------------------
13 (36) 13 2,572
--------------------------------------------------------------------------
Gain (loss) from
operations 121 (6) 143 (2,232)
Gain on sale of
assets 421 (9) 623 9,295
--------------------------------------------------------------------------
Earnings before tax 542 (15) 766 7,063
Income tax (recovery)
expense (27) (251) 29 1,027
--------------------------------------------------------------------------
Discontinued operations
(net of tax) $569 $236 $737 $6,036
--------------------------------------------------------------------------
--------------------------------------------------------------------------
6. Reconciliation of pro forma income with GAAP net income
Quarter Ended Six Months Ended
October 31, October 31,
2008 2007 2008 2007
--------------------------------------------------------------------------
GAAP net (loss) income ($3,427) $4,734 ($2,067) $14,269
Add (deduct):
Stock-based
compensation 168 137 315 235
Patent amortization
and imputed interest 3,301 3,436 6,561 6,836
Restructuring - - - 19
Foreign exchange
loss (gain) 6,876 (4,740) 7,455 (6,418)
--------------------------------------------------------------------------
Income tax expense -
for the above items (2,223) 465 (3,395) (199)
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Discontinued
operations (net of
tax) (569) (236) (737) (6,036)
--------------------------------------------------------------------------
Pro forma income $4,126 $3,796 $8,132 $8,706
--------------------------------------------------------------------------
--------------------------------------------------------------------------
7. Stock-based Compensation
The Company has an employee stock purchase plan program whereby employees may elect to designate up to 5% of their annual salary to purchase shares of the Company at a 10% discount from the fair market value. The purchase price is deducted over a six month period via payroll.
Also, the Company has an Employee and Director Stock Option Plan. The exercise price is no lower than the closing market price on the trading day immediately preceding the date of grant. Options granted under the Plan expire within a period of six years of granting, with vesting periods determined by the Human Resources Committee.
The Company employs a fair value method of accounting for all options issued to employees or directors on or after April 27, 2002. The fair value of options issued in the quarter was calculated using the Black-Scholes option pricing model and the following assumptions:
Quarter Ended October 31,
2008 2007
-------------------------------------------------------------------------
Risk free interest rate 2.71% 4.25%
Expected life in years 5.5 5.5
Expected dividend yield 8.58% 4.95%
Volatility 42.90% 58.37%
For the quarter ended October 31, 2008, the Company issued 34,109 Deferred Share Units in lieu of options to directors and officers of the Company under its Deferred Share Unit Plan. Those deferred share units vest evenly over a four year period. Deferred share units do not have an exercise price and can only be settled using cash consideration.
