Leases

9 Months Ended

Apr. 30, 2021

Leases

Leases

Note 4—Leases

The Company’s leases primarily consist of operating leases for office space. These leases have remaining terms from one to five years. net2phone-UCaaS also has operating leases for office equipment. Certain of these leases contain renewal options that may be exercised and/or options to terminate the lease. The Company has concluded that it is not reasonably certain that it would exercise the options to extend or terminate the leases.

net2phone-UCaaS has equipment leases that are classified as finance leases, and net2phone-UCaaS is the lessor in various equipment leases that are classified as sales-type finance leases. The assets and liabilities related to these finance leases are not material to the Company’s consolidated balance sheets.

On March 26, 2018, the Company completed a pro rata distribution of the common stock that the Company held in the Company’s former subsidiary, Rafael Holdings, Inc. (“Rafael”) to the Company’s stockholders of record as of the close of business on March 13, 2018 (the “Rafael Spin-Off”). Howard S. Jonas, the Chairman of the Company’s Board of Directors, is also the Chairman of the Board of Directors of Rafael. The Company leases office space and parking in Rafael’s building and parking garage located at 520 Broad St, Newark, New Jersey. The Company also leases office space in Israel from Rafael. The Newark lease expires in April 2025 and the Israel lease expires in July 2025. In each of the three months ended April 30, 2021 and 2020, the Company incurred lease costs of $0.5 million, and in each of the nine months ended April 30, 2021 and 2020, the Company incurred lease costs of $1.4 million in connection with the Rafael leases, which is included in operating lease cost in the table below.

Supplemental disclosures related to the Company’s operating leases were as follows:

	Three Months Ended April 30,				Nine Months Ended April 30,
	2021		2020		2021		2020
	(in thousands)
Operating lease cost	$	700	$	707	$	2,125	$	2,130
Short-term lease cost		217		66		412		198
Total lease cost	$	917	$	773	$	2,537	$	2,328
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	694	$	687	$	2,076	$	2,056

	April 30, 2021			July 31, 2020
Weighted-average remaining lease term-operating leases		3.5 years			4.2 years
Weighted-average discount rate-operating leases		2.9	%		3.12	%

On September 1, 2020, the Company entered into a new lease with an aggregate operating lease liability of $0.6 million. The Company’s aggregate operating lease liability was as follows:

	April 30, 2021		July 31, 2020
	(in thousands)
Operating lease liabilities included in “Other current liabilities”	$	2,516	$	2,350
Operating lease liabilities included in noncurrent liabilities		6,108		7,353
Total	$	8,624	$	9,703

Future minimum maturities of operating lease liabilities were as follows (in thousands):

Twelve-month period ending April 30:
2022	$	2,787
2023		2,489
2024		1,949
2025		1,853
2026		33
Thereafter		—
Total lease payments		9,111
Less imputed interest		(487	)
Total operating lease liabilities	$	8,624