EARNINGS (LOSS) PER SHARE

12 Months Ended

Jul. 31, 2023

Earnings (Loss) Per Share

As discussed in Note 2 - "Summary of Significant Accounting Policies", the Reverse/Forward Stock Split was effective on June 21, 2023. The Company’s shares of outstanding common stock and earnings (loss) per share amounts have been retroactively restated for all periods presented for the Reverse/Forward Stock Split. The following table reconciles net income (loss) per share for the periods below:


	Successor		Predecessor
	May 1 to July 31,		August 1, 2022 to April 30,		Fiscal Year Ended July 31,
	2023		2023		2022
	(In thousands, except per share data)
Reconciliation of net income (loss) to net income (loss) attributable to common stockholders after assumed conversions:
Net income (loss) from continuing operations	$	8,149	$	7,460	$	(9,256)
Loss from discontinued operations	—		—		(1,712)
Net income (loss)	8,149		7,460		(10,968)
Less: Preferred dividends on Series C preferred stock	(537)		(1,593)		(2,129)
Net income (loss) available to common stockholders	7,612		5,867		(13,097)
Less: Undistributed earnings allocated to participating securities	(5,803)		—		—
Net income (loss) attributable to common stockholders	$	1,809	$	5,867	$	(13,097)

Effect of dilutive securities:
Dividends on Series C preferred stock	537		1,593		—
Undistributed earnings allocated to Series E preferred stock	5,803		—		—
Net income (loss) attributable to common stockholders - assuming dilution	$	8,149	$	7,460	$	(13,097)

Net income (loss) per common share - basic
Net income (loss) from continuing operations	$	0.29	$	0.91	$	(1.77)
Net loss from discontinued operations	—		—		(0.27)
Net income (loss) attributable to common stockholders	$	0.29	$	0.91	$	(2.04)

Net income (loss) per common share - diluted
Net income (loss) from continuing operations	$	0.29	$	0.89	$	(1.77)
Net loss from discontinued operations	—		—		(0.27)
Net income (loss) attributable to common stockholders	$	0.29	$	0.89	$	(2.04)

Weighted average common shares outstanding - basic	6,177		6,449		6,425
Effect of dilutive securities:
Common stock equivalents - Restricted stock and restricted stock shares	60		55		—
Common stock equivalents - Series C Preferred Stock	1,913		1,913		—
Common stock equivalents - Series E Preferred Stock	19,810		—		—
Weighted average common shares outstanding - diluted	27,960		8,417		6,425

As of July 31, 2023, the Company calculates basic and diluted net income (loss) per common share using the two-class method, as the Series E Convertible Preferred Stock issued in the Exchange Transaction meets the definition of a participating security. The two-class method is an allocation formula that determines net income (loss) per common share for each share of common stock and Series E Convertible Preferred Stock, a participating security, according to dividends declared and participation rights in undistributed earnings. Under this method, all earnings (distributed and undistributed) are allocated to common shares and Series E Convertible Preferred Stock based on their respective rights to receive dividends. The holders of Series E Convertible Preferred Stock are entitled to participate equally and ratably with the holders of shares of Common Stock in all dividends or other distributions on the shares of Common Stock as if, immediately prior to each record date for payment of dividends or other distributions on the Common Stock, shares of Series E Preferred Stock then outstanding were converted into shares of Common Stock. Basic net income (loss) per common share is computed by dividing net income (loss) allocated to common stockholders for the period by the weighted average number of common shares outstanding for the period. Net income (loss) available to common stockholders for the period includes dividends paid to common stockholders during the period plus a proportionate share of undistributed net income (loss) allocable to common stockholders for the period; the proportionate share of undistributed net income allocable to common stockholders for the period is based on the proportionate

share of total weighted-average common shares and participating securities outstanding during the period. Diluted net income (loss) per common share is computed based on the weighted average number of shares of common stock outstanding during each period, plus potential common shares considered outstanding during the period, as long as the inclusion of such awards is not antidilutive. Potential common shares consist of restricted common stock (calculated based on the treasury stock method) and shares issuable upon debt or preferred stock conversion (calculated using an as-if converted method), using the more dilutive of either the two-class method or as-converted stock method.

The Company was not required to apply the two-class method during the Predecessor Period as there were no participating securities, and as such, there were no changes to the Predecessor Period other than the retroactive restatement for the Reverse/Forward Stock Split discussed previously.

For the fiscal year ended July 31, 2022 Predecessor Period during which the Company recorded a net loss, diluted net loss per share is equal to basic net loss per share because the effect of dilutive securities outstanding is anti-dilutive. The below details certain exclusions from the calculation of diluted net income per share for the May 1 to July 31, 2023 Successor Period and the August 1, 2022 to April 30, 2023 Predecessor Period as their inclusion would have been antidilutive:

For the May 1 to July 31, 2023 Successor Period, $0.2 million of interest expense, net of tax impact related to the SPHG Note was excluded from the numerator in the calculation of diluted net income per share as their inclusion would have been antidilutive.

For the August 1, 2022 to April 30, 2023 Predecessor Period, $2.3 million of interest expense, net of tax impact related to the SPHG Note were excluded from the numerator in the calculation of diluted net income per share as their inclusion would have been antidilutive.

For the May 1 to July 31, 2023 Successor Period, 0.6 million common stock equivalent shares (including those related to the SPHG Note) were excluded from the denominator in the calculation of diluted net income per share as their inclusion would have been antidilutive.

For the August 1, 2022 to April 30, 2023 Predecessor Period, 0.6 million common stock equivalent shares (including those related to the SPHG Note) were excluded from the denominator in the calculation of diluted net income per share as their inclusion would have been antidilutive.