v3.26.1
Fair Value Measurements
 9 Months Ended
Apr. 30, 2026
Fair Value Measurements [Abstract]  
FAIR VALUE MEASUREMENTS

NOTE 10 – FAIR VALUE MEASUREMENTS

 

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value:

 

●Level 1 - quoted prices in active markets for identical assets or liabilities;

 

●Level 2 - quoted prices in active markets for similar assets and liabilities and inputs that are observable for the asset or liability; or

 

●Level 3 - unobservable inputs for the asset or liability, such as discounted cash flow models or valuations.

 

The determination of where assets and liabilities fall within this hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

The Company’s assets required to be measured at fair value on a recurring basis and where they are classified within the fair value hierarchy as of April 30, 2026 and July 31, 2025 are as follows:

 

   April 30, 2026 
   Level 1   Level 2   Level 3   Total 
Assets:  (in thousands) 
Convertible notes receivable classified as available-for-sale  $
—
   $
—
   $2,124   $2,124 
Total  $
—
   $
—
   $2,124   $2,124 

 

   July 31, 2025 
   Level 1   Level 2   Level 3   Total 
Assets:  (in thousands) 
Convertible notes receivable classified as available-for-sale   
—
    
—
    1,858    1,858 
Total  $
—
   $
—
   $1,858   $1,858 

 

As of April 30, 2026 and July 31, 2025, the Company did not have any liabilities measured at fair value on a recurring basis.

 

The following table summarizes the changes in the fair value of the assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3):

 

   Three Months Ended
April 30,		   Nine Months Ended
April 30,		 
   2026   2025   2026   2025 
   (in thousands)   (in thousands) 
Balance, beginning of period  $1,858   $18,474   $1,858   $10,148 
Withdrawal from Hedge Fund Investments   
—
    
—
    
—
    (2,547)
Unrealized loss on Cyclo Warrants   
—
    (750)   
—
    (1,264)
Funding of Cyclo Convertible Notes   
—
    4,500    
—
    19,500 
Change in fair value of Cyclo Convertible Notes   
—
    383    
—
    (719)
Conversion of Cyclo Convertible Note   
—
    
—
    
—
    (2,500)
Forgiveness of Cyclo Convertible Notes in the Cyclo Merger   
—
    (21,472)   
—
    (21,472)
Issuance of new convertible notes receivable   
—
    500    
—
    500 
Change in fair value of convertible notes receivable classified as available-for sale   266    84    266    73 
Balance, end of period  $2,124   $1,719   $2,124   $1,719 

 

Available-for-sale securities classified as Level 3 include convertible notes receivable which may not be based on readily observable data inputs. The availability of observable inputs can vary and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets and other characteristics particular to the security. The fair value of these assets is estimated using a scenario-based analysis based on the probability-weighted present value of future investment returns, considering each of the possible outcomes available to us, including cash repayment, equity conversion and collateral transfer scenarios. Estimating the fair value of the convertible notes receivable requires the development of significant and subjective estimates that may, and are likely to, change over the duration of the instrument with related changes in internal and external market factors. Therefore, these assets are classified as Level 3.

 

Fair Value of Other Financial Instruments

 

The estimated fair value of the Company’s other financial instruments was determined using available market information or other appropriate valuation methodologies. However, considerable judgment is required in interpreting these data to develop estimates of fair value. Consequently, the estimates are not necessarily indicative of the amounts that could be realized or would be paid in a current market exchange.

 

The Company’s financial instruments include trade accounts receivable, trade accounts payable and due from related parties. The recorded carrying amounts of accounts receivable, accounts payable and due to related parties approximate their fair value due to their short-term nature.