XML 27 R17.htm IDEA: XBRL DOCUMENT
v3.22.1

Acquisitions | 9 Months Ended
--- | ---
Apr. 30, 2022
Business Combination and Asset Acquisition [Abstract] |
Acquisitions | Note 9—Acquisitions Integra CCS On March 3, 2022, the Company’s subsidiary, net2phone 2.0, Inc. (“net2phone 2.0”), which owns and operates the net2phone-UCaaS segment, purchased all of the outstanding shares of Onwaba S.R.L. and Gem S.R.L. for an aggregate purchase price of up to $15.0 million. Onwaba S.R.L. and Gem S.R.L. are located in Uruguay and use the trade name Integra CCS (“Integra”). Integra provides cloud-based contact-center-as-a-service (“CCaaS”) in the Americas and Europe including omnichannel support, social media integrations, chat-bot communications, workflow management, development tools for tailored contact center solutions and numerous third-party software integrations. The net2phone-UCaaS segment’s and Integra’s CCaaS offerings are highly synergistic and CCaaS is expected to be a source of growth and expansion when combined with net2phone-UCaaS’ global sales and channel partner network. The operating results of the acquired companies from the date of acquisition, which were not significant, are included in the Company’s consolidated financial statements. The purchase price consisted of: (a) cash of $7.2 million that was paid at closing, (b) 27,765 shares of the Company’s Class B common stock with a value of $1.0 million that were issued at closing, (c) $3.3 million, half of which will be paid at the end of 12 months after closing and the remainder will be paid at the end of 24 months after closing, subject to holdback for the settlement of claims against the sellers, if any, and (d) contingent consideration of up to $3.5 million based on annual cumulative incremental recurring seat revenue of the net2phone-UCaaS segment over a four-year period, payable in cash and/or equity at net2phone 2.0’s discretion. The acquisition date fair value of the consideration consisted of the following (in thousands): Schedule of Acquisition Date Fair Value of Consideration
Cash paid |  | $ | 7,200 |
Cash acquired |  |  | (87 | )
Cash paid, net of cash acquired |  |  | 7,113 |
Shares of the Company’s Class B common stock |  |  | 1,000 |
Future payments subject to holdback |  |  | 3,158 |
Contingent consideration |  |  | 1,361 |
Total fair value of consideration, net of cash acquired |  | $ | 12,632 |
The acquisition-date fair value of the contingent consideration was estimated using discounted cash flow models. This fair value measurement was based on significant inputs not observable in the market and therefore represents a Level 3 measurement. There was no change in the estimated fair value of the contingent consideration in the period from the acquisition date to April 30, 2022. The impact of the acquisition’s preliminary purchase price allocations on the Company’s consolidated balance sheet was as follows (in thousands): Schedule of Impact of Acquisition's Purchase Price Allocations on Consolidated Balance Sheet
Trade accounts receivable |  | $ | 332 |
Prepaid expenses |  |  | 4 |
Other current assets |  |  | 21 |
Property, plant and equipment |  |  | 777 |
Goodwill |  |  | 8,433 |
Customer relationships (7-year useful lives) |  |  | 2,230 |
Tradename (5-year useful life) |  |  | 400 |
Non-compete agreements (6-year useful lives) |  |  | 660 |
Operating lease right-of-use asset |  |  | 732 |
Other assets |  |  | 24 |
Accrued expenses |  |  | (249 | )
Operating lease liability current portion |  |  | (176 | )
Operating lease liability noncurrent portion |  |  | (556 | )
Net assets excluding cash acquired |  | $ | 12,632 |
The goodwill was assigned to the net2phone-UCaaS segment and was attributable primarily to the assembled workforce and the expected synergies from the business combination. The goodwill is not expected to be deductible for income tax purposes. Leaf Global Fintech Corporation On March 1, 2022, the Company’s subsidiary, IDT International Telecom, Inc., purchased all of the outstanding shares of Leaf Global Fintech Corporation (“Leaf”) for up to $6.05 million. Leaf is a provider of digital wallet services in emerging markets currently serving unbanked customers in Rwanda, Uganda, and Kenya. The Leaf wallet is a mobile platform available on both smartphones and non-smartphones through an app or by utilizing a USSD interface accessed via a short code. The Leaf digital wallet enables customers to store, send, receive, and exchange currencies on their phones domestically and across borders. The Leaf platform leverages the Stellar network for storing and disseminating transaction data while maintaining value with stablecoins. Stellar is an open-source, decentralized blockchain network that connects global financial infrastructure, optimized for payments and specifically to support cross-border transactions. The Company intends to utilize Leaf’s blockchain-based digital wallet to, among other things, provide secure storage and share value to the people worldwide who use feature phones rather than smartphones, as well as expand Leaf’s affordable mobile technology to traders, refugees, migrants, and others worldwide. Leaf’s operating results from the date of acquisition, which were not significant, are included in the Company’s consolidated financial statements. The purchase price is comprised of (a) $0.5 million paid in cash at the closing, (b) a working capital adjustment for a maximum of $50,000, and (c) contingent consideration of up to $5.5 million based on annual gross profit over a five-year period. The acquisition date fair value of the consideration consisted of the following (in thousands): Schedule of Acquisition Date Fair Value of Consideration
Cash paid |  | $ | 500 |
Cash acquired |  |  | (167 | )
Cash paid, net of cash acquired |  |  | 333 |
Contingent consideration |  |  | 3,330 |
Total fair value of consideration, net of cash acquired |  | $ | 3,663 |
The acquisition-date fair value of the contingent consideration was estimated using discounted cash flow models. This fair value measurement was based on significant inputs not observable in the market and therefore represents a Level 3 measurement. There was no change in the estimated fair value of the contingent consideration in the period from the acquisition date to April 30, 2022. The impact of the acquisition’s preliminary purchase price allocations on the Company’s consolidated balance sheet was as follows (in thousands): Schedule of Impact of Acquisition's Purchase Price Allocations on Consolidated Balance Sheet
Current assets |  | $ | 9 |
Property, plant and equipment |  |  | 324 |
Goodwill |  |  | 3,199 |
Tradename (5-year useful life) |  |  | 131 |
Net assets excluding cash acquired |  | $ | 3,663 |
The goodwill was assigned to the Fintech segment and was attributable primarily to the assembled workforce and the expected synergies from the business combination. The goodwill is not expected to be deductible for income tax purposes. Pro Forma Disclosures The Company’s pro forma results of operations as if the Integra and Leaf acquisitions occurred as of August 1, 2020 were not materially different from the actual results of operations.

X
- References No definition available. + Details
Name: | us-gaap_BusinessCombinationAndAssetAcquisitionAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI https://asc.fasb.org/topic&trid=2303972 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -SubTopic 20 -Section 50 -Paragraph 5 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=128092470&loc=d3e4946-128472 + Details
Name: | us-gaap_BusinessCombinationDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration