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Leases

9 Months Ended

Apr. 30, 2023

Note 4—Leases

The Company’s leases primarily consist of operating leases for office space. These leases have remaining terms from less than one year to five years. net2phone also has operating leases for office equipment. Certain of these leases contain renewal options that may be exercised and/or options to terminate the lease. The Company has concluded that it is not reasonably certain that it would exercise any of these options.

net2phone is the lessee under equipment leases that are classified as finance leases. The assets and liabilities related to these finance leases are not material to the Company’s consolidated balance sheets.

The Company leases office and parking space in a building and parking garage located at 520 Broad Street, Newark, New Jersey that was previously owned by the Company’s former subsidiary, Rafael Holdings, Inc. (“Rafael”). On August 22, 2022, Rafael sold the building and parking garage to an unrelated third party. The Company’s lease in that building continues with the new owner. The Company leases office space in Israel from Rafael. Howard S. Jonas, the Chairman of the Company (an executive officer position) and the Chairman of the Company’s Board of Directors, is also the Chairman of the Board of Directors and Executive Chairman of Rafael. The Newark lease expires in April 2025 and the Israel lease expires in July 2025. In the three and nine months ended April 30, 2023, the Company incurred lease costs of $33,000 and $0.2 million, respectively, in connection with the Rafael leases, which excludes Newark lease costs after August 22, 2022. In the three and nine months ended April 30, 2022, the Company incurred lease costs of $0.5 million and $1.4 million, respectively, in connection with the Rafael leases. Lease costs incurred in connection with the Rafael leases is included in operating lease cost in the table below.

Supplemental disclosures related to the Company’s operating leases were as follows:

	2023		2022		2023		2022
	Three Months Ended April 30,				Nine Months Ended April 30,
	2023		2022		2023		2022
	(in thousands)
Operating lease cost	$	817	$	743	$	2,384	$	2,130
Short-term lease cost		256		277		784		877
Total lease cost	$	1,073	$	1,020	$	3,168	$	3,007

Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	842	$	724	$	2,431	$	2,089
Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases		842		724		2,431		2,089

April 30, 2023

July 31, 2022

Weighted-average remaining lease term-operating leases

2.5 years

2.8 years

Weighted-average discount rate-operating leases

3.6

3.0

In the nine months ended April 30, 2023 and 2022, the Company obtained right-of-use assets of $1.7 million and $2.2 million, respectively, in exchange for new operating lease liabilities.

The Company’s aggregate operating lease liability was as follows:

	April 30, 2023		July 31, 2022
		(in thousands)
Operating lease liabilities included in “Other current liabilities”	$	2,811	$	2,899
Operating lease liabilities included in noncurrent liabilities		3,572		4,606

Total	$	6,383	$	7,505

Future minimum maturities of operating lease liabilities were as follows (in thousands):


Twelve-month period ending April 30:
2024	$	3,001
2025		2,658
2026		569
2027		379
2028		95
Thereafter		—
Total lease payments		6,702
Less imputed interest		(319	)

Total operating lease liabilities	$	6,383