Leases

3 Months Ended

Oct. 31, 2022

Lessee Disclosure [Abstract]

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 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 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 was previously owned by the Company’s former subsidiary, Rafael Holdings, Inc. (“Rafael”). On August 22, 2022, Rafael sold the building and parking garage to an unrelated third party. The Company’s lease in that building continues with the new owner. The Company leases office space in Israel from Rafael. Howard S. Jonas, the Chairman of the Company (an executive officer position) and 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 the three months ended October 31, 2022, the Company incurred lease costs of $0.2 million in connection with the Rafael leases, which excludes Newark lease costs after August 22, 2022. In the three months ended October 31, 2021, the Company incurred lease costs of $0.5 million in connection with the Rafael leases. Lease costs incurred in connection with the Rafael leases 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 October 31,
	2022		2021
	(in thousands)
Operating lease cost	$	767	$	700
Short-term lease cost		269		347
Total lease cost	$	1,036	$	1,047
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	764	$	695

	October 31, 2022			July 31, 2022
Weighted-average remaining lease term-operating leases		2.6 years			2.8 years
Weighted-average discount rate-operating leases		3.2	%		3.0	%

In the three months ended October 31, 2022, the Company entered into new leases with an aggregate operating lease liability of $0.3 million. The Company’s aggregate operating lease liability was as follows:

	October 31, 2022		July 31, 2022
	(in thousands)
Operating lease liabilities included in “Other current liabilities”	$	2,868	$	2,899
Operating lease liabilities included in noncurrent liabilities		4,175		4,606
Total	$	7,043	$	7,505

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

Twelve-month period ending October 31:
2023	$	3,048
2024		2,609
2025		1,398
2026		139
2027		142
Thereafter		12
Total lease payments		7,348
Less imputed interest		(305	)
Total operating lease liabilities	$	7,043