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Acquisitions | 12 Months Ended
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Jul. 31, 2023
Business Combination and Asset Acquisition [Abstract] |
Acquisitions | Note 6—Acquisitions Integra CCS On March 3, 2022, net2phone 2.0 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. 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 was paid in fiscal 2023 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 segment over a four-year period, payable in cash and/or equity at net2phone 2.0’s discretion. IDT CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) The acquisition date fair value of the consideration consisted of the following: Schedule of Acquisition Date Fair Value of Consideration
(in thousands) |  |  |
Cash paid |  | $ | 7,200 |
Cash acquired |  |  | (81 | )
Cash paid, net of cash acquired |  |  | 7,119 |
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 |  | $ | 12,638 |
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 represented 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 July 31, 2023. The impact of the acquisition’s purchase price allocations on the Company’s consolidated balance sheet was as follows: Schedule of Impact of Acquisition's Purchase Price Allocations on Consolidated Balance Sheet
(in thousands) |  |  |
Trade accounts receivable |  | $ | 332 |
Prepaid expenses |  |  | 4 |
Other current assets |  |  | 21 |
Current assets |  |  |  |
Property, plant, and equipment (mainly acquired technology) |  |  | 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 |
Deferred income tax assets |  |  |  |
Trade accounts payable |  |  |  |
Other current liabilities |  |  |  |
Accrued expenses |  |  | (243 | )
Operating lease liability current portion |  |  | (176 | )
Operating lease liability noncurrent portion |  |  | (556 | )
Noncontrolling interests |  |  |  |
Net assets acquired excluding cash |  | $ | 12,638 |
The goodwill was assigned to the net2phone 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. (“IDTIT”), purchased all of the outstanding shares of Leaf for up to $6.05 million. 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 was 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: Schedule of Acquisition Date Fair Value of Consideration
(in thousands) |  |  |
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 |
IDT CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) 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 represented 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 July 31, 2022. In fiscal 2023, the Company determined that the requirements for a portion of the contingent consideration payments would not be met. The Company recorded a gain of $1.6 million on the write-off of the contingent consideration payment obligation, which was included in “Other operating (expense) gain, net” in the accompanying consolidated statements of income. The impact of the acquisition’s purchase price allocations on the Company’s consolidated balance sheet was as follows: Schedule of Impact of Acquisition's Purchase Price Allocations on Consolidated Balance Sheet
(in thousands) |  |  |
Current assets |  | $ | 9 |
Property, plant, and equipment (mainly acquired technology) |  |  | 324 |
Goodwill |  |  | 3,199 |
Tradename (5-year useful life) |  |  | 131 |
Net assets acquired excluding cash |  | $ | 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. Sochitel UK Ltd. On December 3, 2020, IDTIT acquired 51% of the issued shares of Sochitel UK Ltd. (“Sochitel”). Sochitel’s operating results from the date of acquisition, which were not significant, are included in the Company’s consolidated financial statements. The acquisition date fair value of the consideration consisted of the following: Schedule of Acquisition Date Fair Value of Consideration
(in thousands) |  |  |
Cash paid |  | $ | 2,732 |
Cash acquired |  |  | (344 | )
Cash paid, net of cash acquired |  |  | 2,388 |
Contingent consideration |  |  | 393 |
Total fair value of consideration, net of cash acquired |  | $ | 2,781 |
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 represented 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 July 31, 2022. In fiscal 2023, the Company paid contingent consideration of $0.5 million and recorded an expense of $0.1 million, which was included in “Other operating (expense) gain, net” in the accompanying consolidated statements of income. There is no remaining contingent consideration for this acquisition. The impact of the acquisition’s purchase price allocations on the Company’s consolidated balance sheet was as follows: Schedule of Impact of Acquisition's Purchase Price Allocations on Consolidated Balance Sheet
(in thousands) |  |  |
Trade accounts receivable |  | $ | 656 |
Prepaid expenses |  |  | 1,644 |
Property, plant, and equipment |  |  | 75 |
Goodwill |  |  | 2,025 |
Customer relationships (15-year useful life) |  |  | 1,960 |
Tradenames (20-year useful life) |  |  | 440 |
Deferred income tax assets |  |  | 197 |
Other assets |  |  | 30 |
Trade accounts payable |  |  | (1,306 | )
Accrued expenses |  |  | (423 | )
Other current liabilities |  |  | (329 | )
Noncontrolling interests |  |  | (2,188 | )
Net assets acquired excluding cash |  | $ | 2,781 |
IDT CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued) The goodwill was assigned to the Traditional Communications segment and was attributable primarily to the assembled workforces and the expected synergies from the business combination. The goodwill is not expected to be deductible for income tax purposes. Pursuant to a Put/Call Option Agreement related to the 5% of the issued shares of Sochitel that the seller did not initially sell to IDTIT (“Option Shares”), the seller exercised its option and on March 22, 2021, IDTIT purchased the Option Shares for $0.3 million. The purchase of the Option Shares resulted in a $0.2 million reduction in “Noncontrolling interests” and a $21,000 reduction in “Additional paid-in capital” in the consolidated balance sheets. On June 15, 2021, IDTIT purchased 19% of Sochitel’s issued shares from the remaining noncontrolling interest holder. The purchase price was cash of $1.0 million plus contingent consideration of up to $0.3 million. The acquisition date fair value of the contingent consideration of $0.2 million was estimated using cash flow models. This fair value measurement was based on significant inputs not observable in the market and therefore represented a Level 3 measurement. The purchase of the shares resulted in a $1.0 million reduction in “Noncontrolling interests,” a $0.3 million reduction in “Additional paid-in capital,” and $0.2 million liability in the consolidated balance sheets. There was no change in the estimated fair value of the contingent consideration in the period from the acquisition date to July 31, 2022. In fiscal 2023, the Company paid contingent consideration of $0.3 million and recorded an expense of $0.1 million, which was included in “Other operating (expense) gain, net” in the accompanying consolidated statements of income. There is no remaining contingent consideration for this acquisition.

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- 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://www.xbrl.org/2003/role/disclosureRef -Topic 805 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479907/805-20-50-5 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 805 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//805/tableOfContent + Details
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