Note 7—Stock-Based Compensation

In November 2025, 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 150,000 shares to an aggregate of 2,781,000 shares. This amendment was ratified by the Company’s stockholders at the Annual Meeting of Stockholders held on January 14, 2026. At April 30, 2026, there were approximately 283,000 shares of Class B common stock available for awards under the 2016 Incentive Plan.

The Company recognizes stock-based compensation for stock-based awards, including stock options, restricted stock and deferred stock units (“DSUs”) 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. 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 life of options or awards, a risk-free interest rate and dividend yield. The Company recognizes stock-based compensation expense related to options and restricted stock units on a straight-line basis over the service period of the award, which is generally 4 years for options and 3 years for restricted stock units.

In the accompanying condensed consolidated statements of operations and comprehensive loss, the Company recognized stock-based compensation expense for our employees and non-employees as follows (in thousands):

As of April 30, 2026, the Company’s unrecognized stock-based compensation expense was $179,000 for unvested stock options, $76,000 for unvested DSUs and $95,000 for unvested restricted stock.

In the nine months ended April 30, 2026 and 2025, awards of restricted stock and DSUs with respect to 69,000 shares and 250,000 shares, respectively, vested, and in connection with these vesting events, the Company purchased 4,312 shares and 6,903 shares respectively, of our Class B common stock from certain employees for $13,000 and $22,000, respectively, to administratively facilitate the withholding and subsequent remittance of personal income and payroll taxes.

In the nine months ended April 30, 2026 and 2025, the Compensation Committee approved grants of options to purchase 21,750 and 60,100 shares, respectively, of the Company’s Class B common stock to certain employees, with most options vesting over a three-year or four-year period. Unrecognized compensation expense related to these awards granted were $51,000 and $118,000 based on the estimated fair value of the options on the respective grant dates.