Leases

9 Months Ended

Apr. 30, 2022

Leases

Leases

Note 4—Leases

The Company’s leases primarily consist of operating leases for office space. These leases have remaining terms from less than one year to six 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 is the lessee in equipment leases that are classified as finance leases. The assets and liabilities related to these finance leases are not material to the Company’s consolidated balance sheets.

The Company leases office and parking space in a building and parking garage located at 520 Broad Street, Newark, New Jersey that is owned by the Company’s former subsidiary, Rafael Holdings, Inc. (“Rafael”). The Company also leases office space in Israel from Rafael. Howard S. Jonas, the Chairman of the Company’s Board of Directors, is also the Chairman of the Board of Directors of 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, 2022 and 2021, the Company incurred lease costs of $0.5 million, and in each of the nine months ended April 30, 2022 and 2021, 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,
	2022		2021		2022		2021
	(in thousands)
Operating lease cost	$	743	$	700	$	2,130	$	2,125
Short-term lease cost		277		217		877		412
Total lease cost	$	1,020	$	917	$	3,007	$	2,537
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	724	$	694	$	2,089	$	2,076

	April 30, 2022			July 31, 2021
Weighted-average remaining lease term-operating leases		3.0 years			3.4 years
Weighted-average discount rate-operating leases		3.0	%		2.9	%

In the nine months ended April 30, 2022, the Company entered into new office leases with an aggregate operating lease liability of $2.2 million. The Company’s aggregate operating lease liability was as follows:

	April 30, 2022		July 31, 2021
	(in thousands)
Operating lease liabilities included in “Other current liabilities”	$	2,892	$	2,456
Operating lease liabilities included in noncurrent liabilities		5,322		5,473
Total	$	8,214	$	7,929

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

Twelve-month period ending April 30:
2023	$	3,101
2024		2,643
2025		2,362
2026		283
2027		141
Thereafter		83
Total lease payments		8,613
Less imputed interest		(399	)
Total operating lease liabilities	$	8,214