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IDT Financial Services Holding Limited Assets and Liabilities Held for Sale

12 Months Ended

Jul. 31, 2018

IDT Financial Services Holding Limited Assets and Liabilities Held for Sale [Abstract]

IDT Financial Services Holding Limited Assets and Liabilities Held for Sale

Note 3—IDT Financial Services Holding Limited Assets and Liabilities Held for Sale

On June 22, 2017, the Company’s wholly-owned subsidiary IDT Telecom, Inc. (“IDT Telecom”) entered into a Share Purchase Agreement with JAR Fintech Limited (“JAR Fintech”) and JAR Capital Limited to sell the capital stock of IDT Financial Services Holding Limited, a company incorporated under the laws of Gibraltar and a wholly-owned subsidiary of IDT Telecom (“IDTFS Holding”), to JAR Fintech. IDTFS Holding is the sole shareholder of IDT Financial Services Limited (“IDTFS”), a Gibraltar-based bank and e-money issuer, providing prepaid card solutions across the European Economic Area. The Share Purchase Agreement provides for an aggregate purchase price for the outstanding equity interests of IDTFS Holding of $3.8 million plus an amount equal to the value of IDTFS’ net assets, to be paid at closing, subject to adjustments relating to customer assets of IDTFS. The net asset value of IDTFS was $13.7 million at July 31, 2018. The sale is subject to regulatory approval and other conditions. The term for consummating the transaction under the Share Purchase Agreement has passed, and as certain remaining closing conditions are outside of the Company’s control, there can be no assurance that the sale will be completed.

The pending disposition of IDTFS Holding did not meet the criteria to be reported as a discontinued operation and accordingly, its results of operations and cash flows have not been reclassified. The IDTFS Holding assets and liabilities held for sale included the following:

July 31 (in thousands)	2018		2017
CURRENT ASSETS HELD FOR SALE:
Cash and cash equivalents	$	5,892	$	5,716
Restricted cash and cash equivalents		128,931		115,609
Trade accounts receivable, net of allowance for doubtful accounts of $2,192 and $2,550 at July 31, 2018 and 2017, respectively		1,265		1,844
Prepaid expenses		1,016		758
Other current assets		168		340
TOTAL CURRENT ASSETS HELD FOR SALE	$	137,272	$	124,267
NONCURRENT ASSETS HELD FOR SALE:
Property, plant and equipment, net of accumulated depreciation of $346 and $228 at July 31, 2018 and 2017, respectively	$	12		24
Other intangibles, net of accumulated amortization of $86 and $57 at July 31, 2018 and 2017, respectively		190		165
Other assets		5,504		4,945
TOTAL NONCURRENT ASSETS HELD FOR SALE	$	5,706	$	5,134
CURRENT LIABILITIES HELD FOR SALE:
Trade accounts payable	$	776	$	372
Accrued expenses		407		226
Deferred revenue		12		—
Customer deposits		127,571		114,689
Other current liabilities		4		31
TOTAL CURRENT LIABILITIES HELD FOR SALE	$	128,770	$	115,318
NONCURRENT LIABILITIES HELD FOR SALE:
Other liabilities	$	542	$	550
TOTAL NONCURRENT LIABILITIES HELD FOR SALE	$	542	$	550

IDTFS Holding is included in the Telecom & Payment Services segment. IDTFS Holding’s (loss) income before income taxes and (loss) income before income taxes attributable to the Company, which is included in the accompanying consolidated statements of income, were as follows:

Year ended July 31 (in thousands)	2018			2017			2016
(LOSS) INCOME BEFORE INCOME TAXES	$	(1,111	)	$	(1,577	)	$	7,532

(LOSS) INCOME BEFORE INCOME TAXES ATTRIBUTABLE TO IDT CORPORATION	$	(1,111	)	$	(1,577	)	$	7,532