Stock-Based Compensation

12 Months Ended

Jul. 31, 2025

Stock-Based Compensation [Abstract]

Stock-Based Compensation

Note 13—Stock-Based Compensation

2016 Stock Incentive Plan

In November 2024, the Company’s Board of Directors amended the Company’s 2016 Stock Option and Incentive Plan (as amended to date, the “2016 Incentive Plan”) to increase the number of shares of the Company’s Class B common stock available for the grant of awards thereunder by an additional 100,000 shares to an aggregate of 2,631,000 shares. This amendment was ratified by the Company’s stockholders at the Annual Meeting of Stockholders held on January 15, 2025. At July 31, 2025, there were 143,000 shares of Class B common stock available for awards under the 2016 Incentive Plan.

Stock-based compensation

The Company recognizes stock-based compensation for stock-based awards, including stock options, restricted stock and deferred stock units based on the estimated fair value of the awards and recognized over the relevant service period and/or market conditions. The Company estimates the fair value of stock options on the measurement date using the Black-Scholes option valuation model (“BSM”). The Company estimates the fair value of the restricted stock and DSU’s with service conditions only using the current market price of the stock. The Company estimates the fair value of the DSU’s with both service and market conditions using the Monte Carlo Simulation valuation model.

The Black-Scholes and Monte Carlo Simulation valuation models incorporate assumptions as to stock price volatility, the expected term of options or awards, a risk-free interest rate and dividend yield. The Company recognizes stock-based compensation using the straight-line method over the vesting period or the graded vesting method if awards with market or performance conditions include graded vesting features, or if an award includes both a service condition and a market or performance condition.

In fiscal 2025 and fiscal 2024, the Company recognized stock-based compensation for its employees and non-employees as follows (in thousands):

	Fiscal Year Ended July 31,
	2025		2024
Stock-based compensation expense	$	1,445	$	2,141

As of July 31, 2025, the Company’s unrecognized stock-based compensation expense was $219,000 for unvested stock options, $190,000 for unvested restricted stock and $184,000 for unvested DSUs.

In fiscal 2025 and fiscal 2024, restricted stock and DSUs awards with respect to 250,000 shares and 246,000 shares, respectively, vested. In connection with this vesting, the Company purchased 6,903 shares and 6,328 shares respectively of Class B Stock from certain employees for $22,000 and $13,000 respectively, to satisfy tax withholding obligations in connection with the vesting of restricted stock and DSUs.

In the fiscal years ended July 31, 2025 and 2024 there was no income tax benefit resulting from tax deductions in excess of the compensation cost recognized for the Company’s stock-based compensation. 

Stock Options

The Company’s option awards generally have a term of 10 years from grant date, are exercisable upon vesting unless otherwise designated for early exercise by the Board of Directors at the time of grant and are pursuant to individual written agreements. Grants generally vest over a three-year or four -year period.

In fiscal years 2025 and 2024, the Compensation Committee approved grants of options to purchase 85,000 and 18,000 shares, respectively, of the Company’s Class B common stock to various executives, consultants and employees, vesting mostly over a three-year or four-year period. Unrecognized compensation expense related to these awards granted in fiscal 2025 and 2024 were $163,000 and $32,000 respectively based on the estimated fair value of the options on the grant dates.

In fiscal 2025, the Company received proceeds of $62,000 from the exercise of stock options for which the Company issued 105,000 shares of its Class B common stock. In fiscal 2024, the Company received proceeds of $2,975 from the exercise of stock options for which the Company issued 2,500 shares of its Class B common stock.

The Company cancelled or forfeited options grants of 5,000 shares and 5,200 shares in fiscal 2025 and fiscal 2024 respectively primarily due to employee resignations.

The fair value of stock options was estimated on the date of the grant using the BSM and the assumptions in the following table. Expected volatility is based on historical volatility of the Company’s Class B common stock. The Company uses the simplified method to estimate the expected term of the stock-based payments granted due to the limited history of the Company. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant.

The Company used the following weighted average assumptions in its BSM pricing model:

Fiscal year ended July 31,	2025			2024
Expected term		6.0 years			6.0 years
Volatility		88.1	%		87.7	%
Risk free interest rate		4.3	%		4.1	%
Dividends		—			—

The following represents option activity for the fiscal years ended July 31, 2025 and 2024, including options granted prior to our separation from our former parent in a spin-off on June 1, 2016 and options granted under the 2016 Incentive Plan adopted on June 2, 2016:

	Stock Options					Weighted- Average Remaining
	Number of Options (in thousands)			Weighted- Average Exercise Price		Contractual Term (in years)		Aggregate Intrinsic Value (in thousands)
Outstanding at July 31, 2023		856		$	1.79		4.98		346
Granted		18			2.45
Exercised		(2	)		1.19
Cancelled / forfeited		(5	)		1.96
Outstanding at July 31, 2024		867		$	1.81		4.07	$	1,597
Granted		85			2.53
Exercised		(105	)		0.59
Cancelled / forfeited		(5	)		2.26
Outstanding at July 31, 2025		842		$	2.03		3.85	$	1,694
Exercisable at July 31, 2025		705		$	1.94		2.89	$	1,482

The following table summarizes the weighted average grant date fair value of options granted, intrinsic value of options exercised and fair value of awards vested in the periods indicated:

July 31,	2025		2024
(in thousands except per share amounts)
Weighted average grant date fair value of options granted	$	1.92	$	1.84
Intrinsic value of options exercised	$	367	$	2
Fair value of awards vested	$	98	$	143

At July 31, 2025, there was approximately $219,000 of total unrecognized compensation cost related to non-vested stock options, which is expected to be recognized over a weighted-average period of 2.8 years.

At July 31, 2024, there was approximately $185,000 of total unrecognized compensation cost related to non-vested stock options, which is expected to be recognized over a period of 1.9 years.

Restricted Stock

In fiscal 2023, in connection with the GuruShots acquisition, the Company issued 626,242 shares of the Company’s Class B common stock with a grant date fair value of $4 million to the founders and employees as a retention bonus pool which is managed by a trustee based in Israel. These shares shall vest, in equal tranches, over three years assuming that the recipients remain employed by the Company or a subsidiary through the vesting dates. In fiscal 2025 and 2024, the Company has amortized $0.8 million and $1.2 million in stock-based compensation expenses related to these shares. In fiscal 2024 and 2023, 6,262 shares and 51,143 were forfeited due to resignations. There was no forfeiture in fiscal 2025.

At July 31, 2025, there were 77,000 non-vested restricted shares of the Company’s Class B common stock. At July 31, 2025, there was $190,000 of total unrecognized compensation cost related to these non-vested restricted shares, which is expected to be recognized over a weighted-average period of 1.5 years.

At July 31, 2024, there were 297,000 non-vested restricted shares of the Company’s Class B common stock. At July 31, 2024, there was $1.1 million of total unrecognized compensation cost related to these non-vested restricted shares, which is expected to be recognized over a weighted-average period of 1.2 years.

In fiscal 2025 and fiscal 2024, 219,000 and 213,000, previously restricted shares vested, respectively. There were no shares repurchased in connection with tax withholdings related to these vesting events.

The following represents restricted shares activity for the fiscal years ended July 31, 2025 and 2024:

	Number of Shares			Weighted Average Grant Date Fair Value
Non-vested stock award as of July 31, 2023		400,345		$	6.19
Granted		116,208			3.27
Vested		(213,520	)		6.01
Forfeited		(6,262	)		6.39
Non-vested stock award as of July 31, 2024		296,771		$	5.17
Granted		-			-
Vested		(219,299	)		5.84
Forfeited		-			-
Non-vested stock award as of July 31, 2025		77,472		$	3.27

Deferred Stock Units

Deferred Stock Units Equity Incentive Programs

In November 2024, the Company adopted an equity incentive program (under the 2016 Incentive Plan) in the form of grants of DSUs that, upon vesting, will entitle the grantees to receive shares of the Company’s Class B common stock. The number of shares that will be issuable on each vesting date will vary between 33% to 300% of the number of DSUs that vest on that vesting date, depending on the market price for the underlying Class B common stock on the vesting date relative to the grant price approved by the Compensation Committee of the Company’s Board of Directors of $2.76 per share.

The Company estimated that the fair value of the DSUs on the date of grants was $388,000 in aggregate, which is being recognized on a graded vesting basis over the requisite service periods ending in September 2027. The Company used a risk neutral Monte Carlo simulation method in its valuation of the DSUs, which simulated the range of possible future values of the Company’s Class B common stock over the life of the DSUs. The Monte Carlo simulation model incorporates the likelihood of achieving the stock price targets and requires the input of assumptions including the underlying stock price, expected volatility, risk-free rate and dividend yield.

In fiscal 2025, the Company purchased 6,903 shares of Class B Common Stock from various employees for $22,000 to satisfy tax withholding obligations in connection with the vesting of DSUs. In fiscal 2024, the Company purchased 6,328 shares of Class B Common Stock from various employees for $13,000 to satisfy tax withholding obligations in connection with the vesting of DSUs.

The following represents DSU activity for the fiscal years ended July 31, 2025 and 2024:

	Number of Shares			Weighted Average Grant Date Fair Value
Non-vested DSU award as of July 31, 2023		238,605		$	8.81
Granted		-			-
Vested		(32,966	)		11.55
Forfeited		(3,601	)		8.98
Non-vested DSU award as of July 31, 2024		202,038		$	8.36
Granted		89,683			4.32
Vested		(30,388	)		15.03
Forfeited		(170,450	)		7.22
Non-vested DSU award as of July 31, 2025		90,883		$	4.29

The DSUs with both service and market conditions granted in September 2021 were valued using a Monte Carlo Simulation valuation model, with a valuation of $7.19 per DSU. Total grant date fair value for these DSUs was approximately $1.5 million. On September 7, 2024, these DSUs award with respect to approximately 170,000 shares were canceled without the reversal of compensation expenses of approximately $1.2 million because the market condition was not achieved.

At July 31, 2025, there were 90,883 non-vested DSUs and the unrecognized compensation expense related to unvested DSUs was an aggregate of $184,000 which is expected to be recognized over a weighted-average period of 2.1 years.

At July 31, 2024, there were 202,038 non-vested DSUs and the unrecognized compensation expense related to unvested DSUs was an aggregate of $48,000 which is expected to be recognized over a weighted-average period of 3 months.