Fair Value Measurements

12 Months Ended

Jul. 31, 2022

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

NOTE 8 – FAIR VALUE MEASUREMENTS

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measures, the following hierarchy prioritizes the inputs to valuation methodologies used to measure fair value:

● Level 1 - quoted prices in active markets for identical assets or liabilities;

● Level 2 - quoted prices in active markets for similar assets and liabilities and inputs that are observable for the asset or liability; or

● Level 3 - unobservable inputs for the asset or liability, such as discounted cash flow models or valuations.

The determination of where assets and liabilities fall within this hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

The following is a listing of the Company’s assets required to be measured at fair value on a recurring basis and where they are classified within the fair value hierarchy as of July 31, 2022 and 2021:

	July 31, 2022
	Level 1		Level 2		Level 3		Total
Assets:	(in thousands)
Available-for-sale securities	$	—	$	36,698	$	—	$	36,698
Hedge funds		—		—		4,764		4,764
Total	$	—	$	36,698	$	4,764	$	41,462

	July 31, 2021
	Level 1		Level 2		Level 3		Total
Assets:	(in thousands)
Hedge funds	$	—	$	—	$	5,268	$	5,268
Total	$	—	$	—	$	5,268	$	5,268

As of July 31, 2022 and 2021, the Company did not have any liabilities measured at fair value on a recurring basis.

The following table summarizes the changes in the fair value of the assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3):

	Year Ended July 31,
	2022			2021
	(in thousands)
Balance, beginning of period	$	5,268		$	7,510
Liquidation of Hedge Fund Investments		—			(7,000	)
Total (loss) gain included in earnings		(504	)		4,758
Balance, end of period	$	4,764		$	5,268

Hedge funds classified as Level 3 include investments and securities which may not be based on readily observable data inputs. The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. The fair value of these assets is estimated based on information provided by the fund managers or the general partners. Therefore, these assets are classified as Level 3. The Company received a $2 million and $5 million distribution of the Company’s investments in Hedge Funds in October 2020 and May 2021, respectively.

The Company holds $0.5 million in investments in securities in another entity that are not liquid, which were included in Investments - Other Pharmaceuticals in the accompanying consolidated balance sheets. The investment is accounted for under ASC 321, Investments - Equity Securities, using the measurement alternative as defined within the guidance, and the Company recorded an impairment loss of $0 and $0.7 million for the years ended July 31, 2022 and 2021, respectively.

Fair Value of Other Financial Instruments

The estimated fair value of the Company’s other financial instruments was determined using available market information or other appropriate valuation methodologies. However, considerable judgment is required in interpreting these data to develop estimates of fair value. Consequently, the estimates are not necessarily indicative of the amounts that could be realized or would be paid in a current market exchange.

Marketable securities. The Company’s available-for-sale securities are comprised of investments in fixed income corporate bonds and are recorded in available-for-sale securities on the consolidated balance sheets. These securities are recorded at fair value using market prices at July 31, 2022. The fair value estimates for marketable securities were classified as Level 2.

Other assets and other liabilities. At July 31, 2022 and 2021, the carrying amount of these assets and liabilities approximated fair value. The fair values were estimated based on the Company’s assumptions, which were classified as Level 3 of the fair value hierarchy.

The Company’s financial instruments include trade accounts receivable, trade accounts payable, and due from related parties. The recorded carrying amounts of trade accounts receivable, trade accounts payable and due from related parties approximate their fair value due to their short-term nature.