Stockholders’ Equity

9 Months Ended

Apr. 30, 2025

Equity [Abstract]

Stockholders’ Equity

6. Stockholders’ Equity

Restricted Stock Units

The Company issues restricted stock unit awards, or RSUs, to key management and as compensation for services to consultants and others. The RSUs typically vest over a one to three-year period and carry a ten-year term. Each RSU represents the right to receive one share of common stock, issuable at the time the RSU subsequently settles, as set forth in the Restricted Stock Unit Agreement. The Company determines the fair value of awards at the date of grant and amortizes the awards as an expense over the vesting period of the award. The shares earned under the grant are usually issued when the award settles at the end of the term.

During the nine months ended April 30, 2025, the Company granted 30,000 RSU’s to a third-party consultant for manufacturing services. The RSU’s vested 100% on the date of grant. As a result, the Company recognized the entire fair value of $3,000 of compensation cost relating to the vesting of the RSUs.

During the nine months ended April 30, 2024, no compensation cost related to RSU’s was recognized, as all outstanding RSU’s were fully vested.

All of the remaining 742,500 RSUs outstanding are vested and issuable as of April 30, 2025. The RSUs are issued upon settlement date which is defined as “for each Vested Unit, the earliest of (i) the ten-year anniversary of the grant date; (ii) sixty days after the date the grantee’s service ceases for any reason and such cessation constitutes a “separation from service” within the meaning of Section 409A of the Internal Revenue Service Code (the “Code”); (iii) the date of Grantee’s death or (iv) the date of a change in control that constitutes a “change in control event” within the meaning of Section 409A of the Code”.

A summary of the Company’s restricted stock unit activity and related data is as follows:

	Total RSU Shares		Vested and Issuable
Outstanding at July 31, 2024		712,500		712,500
Granted		30,000		30,000
Issued		—		—
Forfeited		—		—
Outstanding at April 30, 2025		742,500		742,500

Stock Option Plans

2024 Equity Incentive Plan

The Company’s shareholders approved its 2024 Equity Incentive Plan, or the 2024 Plan, in February 2024, which has a share reserve of 10,000,000 shares of common stock that were registered under a Form S-8 filed with the SEC in August 2024. The 2024 Plan provides for the grant of incentive and non-qualified stock options, as well as other share-based payment awards, to its employees, directors, consultants and advisors. These awards have up to a 10-year contractual life and are subject to various vesting periods, as determined by the Compensation Committee of the Board. The 2024 Plan replaced the prior amended and restated 2007 and 2017 shareholder approved equity plans. As of April 30, 2025, there were 7,500,000 shares available for issuance under the 2024 Plan.

During the nine months ended April 30, 2025, the Compensation Committee of the Board of Directors granted 2,500,000 stock options to the Company’s employees, officers, directors and consultants with a fair value of $148,000 as determined by the Black Scholes option pricing model. The vesting terms of the options vary between one and two years and carry a ten-year term.

During the three months ended April 30, 2025, the Compensation Committee of the Board of Directors granted 165,000 stock options to Company’s employees, with a fair value of $10,000 as determined by the Black Scholes option pricing model. The vesting terms of the options vary between one and two years and carry a ten-year term.

A summary of our stock option activity is as follows:

	Shares			Weighted- Average Exercise Price		Aggregate Intrinsic Value
Outstanding at July 31, 2024		7,740,000		$	0.40	$	—
Granted		2,665,000		$	0.07		—
Exercised		—		$	—		—
Cancelled		(345,000	)	$	0.11		—
Outstanding at April 30, 2025		10,060,000		$	0.32	$	—

The weighted-average remaining contractual term of options outstanding at April 30, 2025 was 6.78 years.

At April 30, 2025, options to purchase 9,069,167 shares of common stock were exercisable. These options had a weighted-average exercise price of $0.32 and a weighted average remaining contractual term of 6.69 years. The total unrecognized compensation cost related to unvested stock option grants as of April 30, 2025 was approximately $48,000 and the weighted average period over which these grants are expected to vest is 0.38 years.

For the nine months ended April 30, 2025, share-based compensation expense for stock options that vested during the period was $114,000. For the nine months ended April 30, 2024, share-based compensation expense for stock options that vested during the period was $176,000.

The Company uses the Black-Scholes valuation model to calculate the fair value of stock options. Stock-based compensation expense is recognized over the vesting period using the straight-line method. The fair value of stock options was estimated at the grant date using the following weighted average assumptions:

	For the nine months ended April 30,
	2025			2024
Volatility		118.49	%		110.95	%
Risk-free interest rate		4.17	%		4.18	%
Dividend yield		—	%		—	%
Expected life		5.25			5.36

	For the three months ended April 30,
	2025			2024
Volatility		125.48	%		—	%
Risk-free interest rate		4.47	%		—	%
Dividend yield		—	%		—	%
Expected life		5.31			—

Volatility is the measure by which our stock price is expected to fluctuate during the expected term of an option. Volatility is derived from the historical daily change in the market price of our common stock, as we believe that historical volatility is the best indicator of future volatility.

The risk-free interest rates used in the Black-Scholes calculations are based on the prevailing U.S. Treasury yield as determined by the U.S. Federal Reserve.

The Company has never paid dividends on our common stock and do not anticipate paying dividends on our common stock in the foreseeable future. Accordingly, we have assumed no dividend yield for purposes of estimating the fair value of our share-based compensation.

The expected life of options was estimated using the average between the contractual term and the vesting term of the options.