In March 2021, the Company’s Board of Directors approved the 2021 Equity Incentive Plan (“2021 Equity Plan”), which provides for granting up to 14,003,560 shares of the Company’s common stock. Restricted stock units (“RSUs”), non-qualified stock options (“stock options”) and performance-based restricted stock units (“PSUs”) are granted to certain employees of the Company, advisors and directors (collectively “grants”). The grants are considered equity awards for purposes of calculating compensation expense and are equity-classified in the Condensed Consolidated Statements of Financial Position.

Stock option awards are valued using the Black-Scholes option pricing model to estimate the fair value of each stock option award on the date of grant and expense ratably over the vesting period, generally four years. Stock options have a ten-year term.


	Number of options outstanding	Weighted-average exercise price (per share)		Weighted-average remaining contractual life (in years)	Aggregate intrinsic value (in thousands)
Balance at July 31, 2023	2,321,233	$	15.98	8.0	$	—
Granted	1,267,560	9.89
Exercised	—	—
Forfeited	(667,037)	14.46
Expired	(395,174)	16.41
Balance at April 30, 2024	2,526,582	$	13.26	8.3	$	—

Exercisable as of April 30, 2024	748,117	$	16.63	6.9	$	—

The total unrecognized compensation expense related to the 2021 Plan stock options was $6.8 million as of April 30, 2024, which is expected to be recognized over a weighted-average period of 2.8 years. The weighted-average grant-date fair value of options granted during the nine months ended April 30, 2024 was $3.98 per share.

The following assumptions were applied in the Black-Scholes option pricing model to estimate the grant-date fair value of the stock options granted:


	Nine months ended April 30,
	2024		2023

Expected term (in years)(a)	6.22		6.23
Expected dividend yield(b)	—	%	—	%
Risk-free interest rate(c)	4.09% - 4.55%		3.96	%
Expected volatility(d)	30.9	%	33.9	%

(c) The risk-free rate was estimated from the U.S. Treasury Constant Maturity Rates for a period consistent with the expected term in effect at the grant date.

(d) Due to a lack of sufficient trading history of the Company’s common stock, the expected volatility was estimated based on analysis of the historical and implied volatility of the Company’s common stock and a group of guideline public companies deemed to be comparable publicly traded peers within the Company’s industry.

RSUs are valued using the closing market price of the Company’s common stock on the date of grant. Expense is recognized ratably over the vesting period, generally four years for RSUs issued to employees and one year for RSUs issued to our independent directors.


	Number of units	Weighted-average grant-date fair value (per share)
Unvested as of July 31, 2023	562,861	$	15.52
Granted	957,845	9.62
Vested	(250,226)	14.51
Forfeited	(213,552)	14.33
Unvested as of April 30, 2024	1,056,928	$	10.65

The total intrinsic value of restricted stock that vested during the nine months ended April 30, 2024 was $2.5 million. The total unrecognized compensation expense related to the 2021 Plan RSUs was $9.9 million as of April 30, 2024, which is expected to be recognized over a weighted-average period of 2.6 years.

During the three and nine months ended April 30, 2024, the Company granted PSUs under the 2021 Plan, which are settled in shares of the Company’s common stock if the market condition is met within a three-year period.


	Number of units	Weighted-average grant-date fair value (per share)
Unvested as of July 31, 2023	—	$	—
Granted	177,095	5.40
Vested	—	—
Forfeited	—	—
Unvested as of April 30, 2024	177,095	$	5.40

The total unrecognized compensation expense related to the 2021 Plan PSUs was $1.0 million as of April 30, 2024, which is expected to be recognized over a weighted-average period of 1.2 years. The fair value of the PSUs was estimated on the date of grant using a Monte Carlo simulation model with the following assumptions:


	Nine months ended April 30, 2024

Expected term (in years)(a)	1.2
Expected dividend yield(b)	—	%
Risk-free interest rate(c)	4.8	%
Expected volatility(d)	43.0	%

(c) The risk-free rate was estimated from the U.S. Treasury Constant Maturity Rates for a period consistent with the expected term in effect at the grant date.

(d) The expected volatility was estimated based on analysis of the historical and implied volatility of the Company’s common stock.

During the three months ended April 30, 2024 and 2023, the Company recognized total equity-based compensation expense due to units vesting over their requisite service periods for all plans of $1.7 million and $1.7 million, respectively, and $5.0 million and $4.7 million for the nine months ended April 30, 2024 and 2023, respectively. The Company recognizes equity-based compensation in selling, general and administrative expenses, net of actual forfeitures as incurred, in the Condensed Consolidated Statements of Operations, except for amounts capitalized to inventories in the Condensed Consolidated Statements of Financial Position.