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Discontinued Operations
 12 Months Ended
Jul. 31, 2015
Discontinued Operations [Abstract]  
Discontinued Operations

Note 3—Discontinued Operations

 

On July 31, 2013, the Company completed a pro rata distribution of the common stock of the Company’s subsidiary Straight Path to the Company’s stockholders of record as of the close of business on July 25, 2013. At the time of the Straight Path Spin-Off, Straight Path owned 100% of Straight Path Spectrum, Inc., which holds, leases and markets fixed wireless spectrum licenses, and 84.5% of Straight Path IP Group, Inc., which holds intellectual property primarily related to communications over the Internet and the licensing and other businesses related to this intellectual property. As of July 31, 2013, each of the Company’s stockholders received one share of Straight Path Class A common stock for every two shares of the Company’s Class A common stock and one share of Straight Path Class B common stock for every two shares of the Company’s Class B common stock held of record as of the close of business on July 25, 2013. Straight Path and its subsidiaries met the criteria to be reported as discontinued operations and accordingly, their assets, liabilities, results of operations and cash flows are classified as discontinued operations for all periods presented.

 

The Company believes that the Straight Path Spin-Off was tax-free for the Company and the Company’s stockholders for U.S. federal income tax purposes under Section 355 of the Internal Revenue Code of 1986 (the “Code”). The Company received an opinion from Pryor Cashman LLP on the requirements for a tax-free distribution. Specifically, the opinion concluded that the distribution (i) should satisfy the business purpose requirement of the Code for a tax-free distribution, (ii) should not be viewed as being used principally as a device for the distribution of earnings and profits of the distributing corporation or the controlled corporation or both, and (iii) should not be viewed as part of a plan (or series of related transactions) pursuant to which one or more persons will acquire directly or indirectly stock representing a 50 percent or greater interest in the distributing corporation or controlled corporation within the meaning of the relevant section of the Code.

  

In connection with the Straight Path Spin-Off, the Company funded Straight Path with a total of $15.0 million in aggregate cash and cash equivalents.

 

Revenues, income before income taxes and net loss of Straight Path, which are included in discontinued operations, were as follows:

 

Year ended July 31
(in thousands)		   2015     2014     2013  
                   
REVENUES   $ —     $ —     $ 1,130  
                         
LOSS BEFORE INCOME TAXES   $ —     $ —     $ (4,621 )
                         
NET LOSS   $ —     $ —     $ (4,634 )