Note 16 - Stock-based Compensation

12 Months Ended

Jul. 31, 2025

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

NOTE 16: STOCK-BASED COMPENSATION

Stock Options

During Fiscal 2025, Fiscal 2024, and Fiscal 2023, we granted stock options under our stock incentive plans to certain directors, officers, employees and consultants to purchase an aggregate of 102,036, 483,461 and 3,507,004 shares of the Company, respectively, which are subject to a 24-month vesting provision whereby, at the end of each 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.  In addition, during Fiscal 2023, we granted performance stock options (“PSO”s) under our current stock incentive plan to certain of our directors and officers to purchase an aggregate up to 150,367 shares of the Company.  No PSOs were granted in Fiscal 2024 and Fiscal 2025.  The PSOs granted in Fiscal 2023 are subject to a three-year vesting provision whereby one-third of the total PSOs become exercisable at the end of each of the first, second and third year after the date of grant.

During Fiscal 2025, we granted stock options under our current stock incentive plan to one of our officers to purchase an aggregate of 24,415 shares of the Company, and the fair value of the stock option granted was $4.09 per share. We also granted stock options under our current stock incentive plan to our directors to purchase an aggregate of 66,332 shares of the Company, and the fair value of the stock options granted was $5.49 per share.

The fair value of these stock options was estimated at the date of grant, using the Black-Scholes Valuation Model, with the following weighted average assumptions, which is level 2 of the fair value measurement hierarchy:

	Year Ended July 31,
	2025			2024			2023(1		)
Expected Risk Free Interest Rate		3.81	%		4.05	%		4.14	%
Expected Volatility		75.66	%		78.83	%		79.43	%
Expected Life in Years		5.00			5.00			4.90
Expected Dividend Yield		0	%		0	%		0	%
Weighted-Average Grant Date Fair Value	$	4.88		$	3.71		$	2.18

⁽¹⁾ The assumptions used for the fair value measurement of the Replacement Options are excluded in the table above as they have been separately disclosed in Note 3.

A continuity schedule of outstanding stock options as at July 31, 2025, and the changes during the fiscal year periods, is as follows:

	Number of Stock Options			Weighted Average Exercise Price
Balance, July 31, 2022		8,880,527		$	1.58
Granted		3,507,004			2.46
Exercised		(3,995,897	)		1.63
Forfeited		(24,651	)		3.18
Expired		(40,000	)		1.53
Balance, July 31, 2023		8,326,983			1.92
Granted		483,461			5.62
Exercised		(3,451,746	)		1.33
Forfeited		(203,359	)		1.70
Expired		(52,000	)		2.62
Balance, July 31, 2024		5,103,339			2.66
Granted		102,036			7.65
Exercised		(552,052	)		3.01
Forfeited		(59,116	)		4.60
Balance, July 31, 2025		4,594,207		$	2.71

The table below sets forth the number of shares issued and cash received upon exercise of stock options:

	Year Ended July 31,
	2025		2024		2023
Number of Options Exercised on Cash Basis		264,663		492,112		365,537
Number of Options Exercised on Non-Cash Basis		287,389		2,959,634		3,630,360
Total Number of Options Exercised		552,052		3,451,746		3,995,897
Number of Shares Issued on Cash Exercise		264,663		492,112		365,537
Number of Shares Issued on Non-Cash Basis		164,037		1,953,636		1,986,007
Total Number of Shares Issued Upon Exercise of Options		428,700		2,445,748		2,351,544
Cash Received from Exercise of Stock Options	$	727	$	681	$	553
Total Intrinsic Value of Options Exercised	$	2,741	$	19,137	$	8,867

A continuity schedule of outstanding unvested stock options at July 31, 2025, and the changes during the fiscal year periods, is as follows:

	Number of Unvested Stock Options			Weighted Average Grant-Date Fair Value
Balance, July 31, 2022		2,186,154		$	1.79
Issuance of Replacement Options (Note 3)		2,301,750			1.75
Granted		1,205,254			2.18
Forfeited		(24,651	)		2.00
Vested		(3,865,242	)		1.66
Balance, July 31, 2023		1,803,265			2.28
Granted		483,461			3.71
Forfeited		(24,400	)		2.31
Vested		(1,175,338	)		2.35
Balance, July 31, 2024		1,086,988			2.83
Granted		102,036			4.88
Forfeited		(55,428	)		3.04
Vested		(773,977	)		2.64
Balance, July 31, 2025		359,619		$	3.80

As at July 31, 2025, the aggregate intrinsic value of all outstanding stock options granted was estimated at $27.39 million (vested: $26.41 million and unvested: $0.98 million).  As at July 31, 2025, the unrecognized compensation cost related to unvested stock options was $0.75 million, which is expected to be recognized over 1.01 years.

A summary of stock options outstanding and exercisable as at July 31, 2025 is as follows:

	Options Outstanding						Options Exercisable
Range of Exercise	Outstanding at		Weighted Average		Weighted Average Remaining Contractual Term		Exercisable at		Weighted Average		Weighted Average Remaining Contractual Term
Prices	July 31, 2025		Exercise Price		(Years)		July 31, 2025		Exercise Price		(Years)
$0.91 to $0.99		1,347,750	$	0.92		4.76		1,347,750	$	0.92		4.76
$1.00 to $1.99		475,000		1.10		4.96		475,000		1.10		4.96
$2.00 to $2.99		464,649		2.27		5.92		464,649		2.27		5.92
$3.00 to $3.99		1,767,379		3.61		7.15		1,717,256		3.60		7.12
$4.00 to $4.99		15,000		4.39		9.16		5,000		4.60		8.50
$5.00 to $5.99		383,217		5.48		8.96		190,935		5.47		8.95
$6.00 to $6.99		64,558		6.51		8.84		26,176		6.58		8.76
$7.00 to $7.99		10,000		7.63		8.48		7,500		7.63		8.48
$8.00 to $8.68		66,654		8.68		10.00		322		8.28		9.30
		4,594,207	$	2.71		6.32		4,234,588	$	2.43		6.09

Restricted Stock Units 

During Fiscal 2025, Fiscal 2024 and Fiscal 2023, the Company granted RSUs to certain directors and officers of the Company under our then stock incentive plans.  RSUs granted during Fiscal 2025, Fiscal 2024 and Fiscal 2023 have a vesting period of three years from the grant date, whereby one-third of the RSUs will vest at the end of the first, second and third year, respectively, from the date of grant.  The fair value of these RSUs was determined using the share prices at the respective grant dates.

A continuity schedule of outstanding RSUs as at July 31, 2025, and the changes during the fiscal year end periods, is as follows:

	Number of Restricted			Weighted Average
	Stock Units			Grant Date Fair Value
Balance, July 31, 2022		836,034		$	2.61
Granted		620,386			3.32
Vested		(464,985	)		2.02
Forfeited		(11,935	)		3.98
Balance, July 31, 2023		979,500			3.32
Granted		642,464			5.57
Vested		(454,284	)		3.14
Balance, July 31, 2024		1,167,680			4.63
Granted		578,381			8.54
Cancelled/Forfeited		(993	)		6.84
Vested		(541,871	)		4.42
Balance, July 31, 2025		1,203,197		$	6.60

A summary of outstanding unvested RSUs as at July 31, 2025, is as follows:

	Number of Restricted		Grant Date		Remaining Life		Aggregate Intrinsic
Grant Date	Stock Units		Fair Value		(Years)		Value
July 31, 2023		206,800	$	3.32		1.08	$	1,793
April 1, 2024		13,334		7.07		1.75		116
July 26, 2024		406,732		5.49		2.07		3,526
September 1, 2024		355		5.23		0.17		3
October 1, 2024		16,103		6.21		2.25		140
November 5, 2024		1,673		7.12		1.35		15
November 5, 2024		14,344		7.12		2.35		124
January 6, 2025		5,874		7.06		2.52		51
January 27, 2025		2,122		7.07		2.58		18
June 9, 2025		222		6.61		1.94		2
July 31, 2025		535,638		8.68		3.09		4,644
		1,203,197	$	6.60		2.36	$	10,432

During Fiscal 2025, Fiscal 2024 and Fiscal 2023, the number of RSUs vested, the net RSU shares issued and the net RSU shares forfeited as payments of tax withholding amounts were as follows:

	Year Ended July 31,
	2025		2024		2023
Number of RSUs vested		541,871		454,284		464,985
Number of net RSU shares issued		296,238		250,994		261,232
Number of RSU shares forfeited as payments of withholding amounts		245,633		203,290		203,753

During Fiscal 2025, Fiscal 2024 and Fiscal 2023, stock-based compensation relating to the RSUs were $3.00 million, $1.82 million and $1.10 million, respectively. As at July 31, 2025, unrecognized compensation costs related to unvested RSUs totaled $6.35 million, which is expected to be recognized over a period of approximately 1.86 years.

Performance Based Restricted Stock Units 

During Fiscal 2025, Fiscal 2024 and Fiscal 2023, the Company granted 947,726, 718,308 and 551,923 maximum PRSUs (the “Awarded PRSUs”) and allocated up to the same amount of respective PRSUs, respectively, to the Company’s executive officers under our then stock incentive plans. 

The Awarded PRSUs granted are accounted for as equity awards at fair value, and will vest at the end of a three-year service period subject to continued employment and certain performance conditions being met. The number of Awarded PRSUs that vest are adjusted using a multiplier that is based on total shareholder return by the Company’s shares over the three-year period relative to a peer group as defined by the Company’s Board of Directors. Each vested PRSU granted in Fiscal 2023 and Fiscal 2024 entitles the recipient to a payment of one common stock. Each vested PRSU granted in Fiscal 2025 entitles the recipient to a payment of one common stock or cash at the discretion of the Company’s Board of Directors.

The fair values of the Awarded PRSUs granted were valued using the Monte Carlo Simulation Model at the date of grant with the following principal assumptions.

	Year Ended July 31,
	2025			2024			2023
Expected Risk Free Interest Rate		3.56	%		4.20	%		4.52	%
Expected Volatility		60.70	%		73.50	%		84.56	%
Expected Dividend Yield		0	%		0	%		0	%
Expected Life in Years		3.00			3.00			3.00
Correlation		38.47	%		83.80	%		81.22	%
Grant Price	$	8.68		$	5.49		$	3.32
Grant Date Fair Value	$	3.22		$	5.41		$	3.35

A continuity schedule of unvested PRSUs as at July 31, 2025, and the changes during the fiscal years, is as follows:

	Number of Unvested			Weighted Average Grant Date
	PRSUs			Fair Value
Balance, July 31, 2022		734,582		$	3.24
Granted		551,923			3.35
Balance, July 31, 2023		1,286,505			3.29
Granted		718,308			5.41
Vested		(492,950	)		2.48
Balance, July 31, 2024		1,511,863			4.56
Granted		947,726			3.22
Forfeited		(40,634	)		4.80
Vested		(200,998	)		4.80
Balance, July 31, 2025		2,217,957		$	3.96

During Fiscal 2025, Fiscal 2024 and Fiscal 2023, stock-based compensation related to amortization of PRSUs totaled $1.15 million, $0.71million and $0.40 million, respectively.  As at July 31, 2025, unrecognized compensation costs relating to unvested PRSUs totaled $3.12 million, which is expected to be recognized over a weighted average period of approximately 2.47 years.

Stock-Based Compensation

A summary of stock-based compensation expense for Fiscal 2025, Fiscal 2024 and Fiscal 2023, is as follows:

	Year Ended July 31,
	2025			2024			2023
Stock-Based Compensation for Consultants
Common stock issued to consultants	$	107		$	-		$	445
Amortization of stock option expenses		146			347			561
Amortization of RSU expenses		32			41			-
		285			388			1,006
Stock-Based Compensation for Management
Amortization of stock option expenses		600			611			400
Amortization of RSU and PRSU expenses		3,864			2,399			1,370
		4,464			3,010			1,770
Stock-Based Compensation for Employees
Common stock issued to employees		-			-			888
Amortization of stock option expenses		1,019			1,682			1,727
Amortization of RSU expenses		250			92			132
		1,269			1,774			2,747
Total Stock-Based Compensation		6,018			5,172			5,523
Stock-Based Compensation in General and Administrative Expenses		(6,015	)		(5,172	)		(5,415	)
Stock-Based Compensation Capitalized	$	3		$	-		$	108