Note 14 - Stockholders’ equity

Controlled Equity Offering

In May 2023, the Company entered into a sales agreement (the “Sales Agreement”) with B. Riley Securities, Inc. as sales agent (“Riley”). Under the Sales Agreement, the Company may offer and sell, from time to time, through Riley, shares of the Company’s common stock, par value $0.01 per share, (“Shares”) having an aggregate offering price of up to $30 million. The Company pays Riley a commission of 3.0% of the aggregate gross proceeds received under the Sale Agreement. The Company is not obligated to make any sales of Shares under the Sales Agreement. The offering of Shares pursuant to the Sales Agreement will terminate upon the earlier of (a) the sale of all of the Shares subject to the Sales Agreement or (b) the termination of the Sales Agreement by Riley or the Company, as permitted therein. In May 2023, the Company filed with the SEC a “shelf” registration and sales agreement prospectus covering the Sales Agreement. A total of $150 million of securities, including those covered by the Sales Agreement, may be sold under the shelf registration, which was declared effective in July 2023. During the fourth quarter of the fiscal year ended July 31, 2023, the Company sold 276,479 shares for net proceeds of $386. There was no activity during the fiscal year ended July 31, 2024.

Common stock issuances

In fiscal 2024, the Company issued 487,852 shares of common stock pursuant to its employees’ 401(k) matching contribution obligation of $615. In fiscal 2023, the Company issued 843,100 shares of common stock pursuant to its employees’ 401(k) matching contribution obligation of $1,079. During fiscal 2024, the Company issued 1,134,024 shares of common stock in settlement of Asset Purchase Agreement bonuses totaling $1,404 to an officer and former officer.

Incentive stock plans

In January 2011, the Company’s stockholders approved the adoption of the 2011 Incentive Plan (the “2011 Plan”) for the issuance of equity awards, including, among others, options, restricted stock, restricted stock units and performance stock units for up to 3,000,000 shares of common stock. In January 2018, the Company’s stockholders approved the amendment and restatement of the 2011 Plan (the “Amended and Restated 2011 Plan”) to increase the number of shares of common stock available for grant under the 2011 Plan by 2,000,000 shares of common stock bringing the total number of shares available for grant to 5,000,000 shares of common stock. On October 7, 2020, the Company’s Board of Directors approved the amendment and restatement of the Amended and Restated 2011 Plan, with an effective date of October 7, 2020 and subject to approval by the Company’s stockholders at the 2020 annual meeting of stockholders of the Company. The amendment and restatement of the Amended and Restated 2011 Plan was for purposes of, among other things, (i) increasing the shares of common stock available for grant under the Amended and Restated 2011 Plan by an additional 4,000,000 shares of common stock bringing the total number of shares available for grant to 9,000,000 shares of common stock and (ii) extending the term of the Amended and Restated 2011 Plan until October 7, 2030. In January 2021, the Company’s stockholders approved the amendment and restatement of the Amended and Restated 2011 Plan.

The exercise price of options granted under the Amended and Restated 2011 Plan is equal to or greater than fair market value of the common stock on the date of grant. The Amended and Restated 2011 Plan will terminate at the earliest of (a) such time as no shares of common stock remain available for issuance under the plan, (b) termination of the plan by the Company’s Board of Directors, or (c) October 7, 2030. Awards outstanding upon expiration of the Amended and Restated 2011 Plan will remain in effect until they have been exercised or terminated, or have expired. As of July 31, 2024, there were approximately 4,701,000 shares of common stock available for grant under the Amended and Restated 2011 Plan.

The Company estimates the fair value of each stock option award on the measurement date using a Black-Scholes option pricing model or the fair value of our stock at the date of grant. The fair value of awards is amortized to expense on a straight-line basis over the requisite service period. The Company expenses restricted stock awards based on vesting requirements, primarily time elapsed. Performance stock awards are not recognized until it is probable they will be earned. At such time, their expense is then recognized over the requisite service period, including that portion of the service period already elapsed.

Options granted pursuant to the plans may be either incentive stock options or non-statutory options. The Amended and Restated 2011 Plan provides for the issuance of stock options, restricted stock and restricted stock unit awards which generally vest over a two or three year period. The below is a summary of the option activity pursuant to the Company’s stock option plan and non-plan options for the years ended July 31, 2024 and 2023:

The intrinsic value of stock option awards represents the value of the Company’s closing stock price on the last trading day of the fiscal year in excess of the exercise price multiplied by the number of options that are outstanding. Total intrinsic value of outstanding options that were exercisable at July 31, 2024 and 2023 was $0. The intrinsic value of options outstanding at July 31, 2024 and 2023 was $0. The intrinsic value of the options exercised in fiscal 2023 was $3.

Listed below are the assumptions used to determine the fair value of options granted during fiscal years 2024 and 2023:

The following table summarizes information for stock options exercisable at July 31, 2024: 

The following table summarizes information for stock options outstanding at July 31, 2024:

Restricted Stock Units

During fiscal year 2024, the Company awarded to its three independent directors 255,825 RSUs, which vest over one year and had a fair market value of $325 at the time of grant, and to its CEO 150,000 RSUs, which vest over three years and had a fair market value of $207 at the time of grant. One director resigned, thereby forfeiting 79,365 RSU’s. During fiscal year 2024, the Company recognized share based compensation expense, net of $176 for these RSUs.

During fiscal year 2023, the Company awarded to its former CEO 100,000 RSUs, which were to cliff vest annually over three years and had a fair market value of $197 at the time of grant. In November 2021, 260,000 non-plan RSUs were awarded to the former CEO, which were to vest over three years on the anniversary of his hiring. The fair market value of those RSUs at the date of grant was $881. During the fiscal year 2024, the vesting of the remaining 173,333 RSUs from the November 2021 award was accelerated and the 100,000 RSUs from his fiscal year 2023 award were cancelled as a result of his termination. In fiscal year 2024, the Company recognized share based compensation expense, net of $318 for these RSUs.

During fiscal year 2023, the Company awarded to its three independent directors 225,564 RSUs, which vest over one year and had a fair market value of $300 at the time of grant. During fiscal years 2024 and 2023, the Company recognized share based compensation expense of $150 for these RSUs.

The following table summarizes plan and non-plan RSU activity for the fiscal year ended July 31, 2024:

Certain directors had not taken their vested RSU shares, totaling 144,530, as of July 31, 2023. These shares were issued during fiscal 2024. As of July 31, 2024, there was $256 of total unrecognized compensation cost related to non-vested share-based payment arrangements granted under the Amended and Restated 2011 Plan, which will be recognized over a weighted average remaining life of approximately one and a half years.

Performance Stock Units

In fiscal 2024, the Company recognized no share based compensation for Performance Stock Units (“PSUs”) because no PSUs were outstanding during the period, and issued 4,817 shares of stock, net of taxes to a senior executive who had previously vested in the shares. In fiscal 2023, the Company recognized $2 net of share based compensation for PSUs and issued 25,200 shares for awards made in fiscal year 2019 and vested at the end of fiscal 2022.