Commitments and Contingencies

9 Months Ended

Apr. 30, 2024

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Note 17. Commitments and Contingencies

The Company records provisions when it is probable a liability has been incurred and the amount of the loss can be reasonably estimated. Claims and litigation are reviewed quarterly and provisions are taken or adjusted to reflect the status of a particular matter. The Company believes the estimated liability in its Condensed Consolidated Financial Statements for claims or litigation is adequate and appropriate for the probable and estimable outcomes. Liabilities recorded were not material to the Company’s financial position, results of operations or liquidity. The Company believes it is remote that the settlement of any of the currently identified claims or litigation will be materially in excess of what is accrued.

Contingent Compensation and Consideration

Acquisition Agreement - Purilogics

The Company's agreement with Purilogics includes deferred payment provisions representing potential milestone payments for Purilogics’ former owners. The provisions are made up of two general types of arrangements, contingent compensation and contingent consideration. The contingent compensation arrangement is contingent on the former owner’s future employment with the Company and the related amounts are recognized over the required employment period. The contingent consideration is not contingent on employment and was recorded as purchase consideration in both other current and other long-term liabilities on the Condensed Consolidated Balance Sheets at the time of the initial acquisition based on the fair value of the estimated liability. The amounts are paid over a two- to five-year period, contingent on the achievement of certain revenue and manufacturing milestones.

The total contingent compensation arrangement liability was $2.0 million and $1.1 million as of April 30, 2024 and July 31, 2023, respectively, which was included in other long-term liabilities on the Condensed Consolidated Balance Sheets. The maximum payout of the contingent compensation arrangement upon completion of the future performance periods was $3.0 million as of April 30, 2024 and July 31, 2023, inclusive of the $2.0 million and $1.1 million accrued, respectively.

The Company primarily determines the contingent consideration liability based on the forecasted probability of achieving the respective milestones. The contingent consideration liability is measured at fair value each reporting period and changes in estimates of fair value are recognized in earnings. The total contingent consideration liability was $22.5 million and $23.2 million as of April 30, 2024 and July 31, 2023, respectively, and was included in other current and other long-term liabilities on the Condensed Consolidated Balance Sheets. The maximum payout of the contingent consideration was $27.0 million and $29.0 million, inclusive of the accruals of $22.5 million and $23.2 million, as of April 30, 2024 and July 31, 2023, respectively. The total contingent consideration paid was $2.0 million as of April 30, 2024.

Other Acquisition Agreements

For other acquisitions, there was no contingent compensation arrangement liability as of April 30, 2024, as the contingent compensation agreement was terminated. The total contingent compensation arrangement liability was $0.9 million as of July 31, 2023, which was included in other long-term liabilities on the Condensed Consolidated Balance Sheets.

The total contingent consideration liability was $2.7 million as of April 30, 2024 and was included in other current and other long-term liabilities on the Condensed Consolidated Balance Sheets. The total contingent consideration liability was $1.7 million as of July 31, 2023 and was included in other long-term liabilities on the Condensed Consolidated Balance Sheets. The maximum payout of the contingent consideration was $2.7 million and $1.7 million, as of April 30, 2024 and July 31, 2023 respectively.

For additional discussion regarding the fair value of the Company’s contingent consideration liability, see Note 15.