STOCK-BASED COMPENSATION

12 Months Ended

Jul. 31, 2021

Stock-based Compensation

STOCK-BASED COMPENSATION

10. STOCK-BASED COMPENSATION

On May 26, 2020, the Board of Directors of the Company approved and adopted the 2020 Equity Incentive Plan, with an aggregate of 16,000,000 shares issuable under the plan, with a ten-year expiration, and providing that options for no more than 10,000,000 shares be granted as Incentive Stock Options. As of July 31, 2021, stock options for 9,000,000 shares of common stock had been granted.

For stock options issued during the year ended July 31, 2021, the fair value of each stock option award was estimated using the Black-Scholes option-pricing model utilizing the following assumptions:

Risk-free interest rate	0.34%
Expected dividend yield	0%
Expected volatility	37.85%
Expected life	5 years

Stock-based compensation cost for the year ended July 31, 2021, was $88,956 and was recorded in general and administrative costs in the accompanying statements of operations.

A summary of stock option activity during the years ended July 31, 2021 and 2020 is presented below.

	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in Years)
Stock options outstanding at February 11, 2020		—	$	—		—
Granted		9,000,000		0.10		—
Exercised		—		—		—
Expired		—		—		—
Stock options outstanding at July 31, 2020		9,000,000		0.10		—
Granted		—		—		—
Exercised		—		—		—
Expired		—		—		—
Stock options outstanding at July 31, 2021		9,000,000	$	0.10		3.09
Stock options exercisable at July 31, 2020		5,000,000	$	0.10		—
Stock options exercisable at July 31, 2021		7,000,000	$	0.10		2.92

Total deferred compensation expense for the outstanding value of unvested stock options was approximately $27,799 as of July 31, 2021, which will be recognized subsequent to July 31, 2021, over a weighted-average period of approximately 1.25 years.

The intrinsic value of exercisable but unexercised in-the-money stock options at July 31, 2021, was approximately $1,470,000 based on a fair market value of $0.21 per share on July 31, 2021.

The Company expects to satisfy such stock obligations through the issuance of authorized but unissued shares of common stock.