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Other Operating Expense, Net

12 Months Ended

Jul. 31, 2024

Other Income and Expenses [Abstract]

Note 14—Other Operating Expense, Net

The following table summarizes the other operating expense, net by business segment:

Year ended July 31 (in thousands)	2024			2023			2022
Corporate —Straight Path Communications Inc. class action legal fees	$	(7,237	)	$	(5,785	)	$	(7,671	)
Corporate —Straight Path Communications Inc. class action insurance claims		2,869			3,845			6,635
Corporate—Grow New Jersey Assistance Act tax credit		—			1,600			—
Corporate—other		12			—			—
Fintech—write-off of intangible asset		(74	)		—			—
Fintech—write-off of contingent consideration liability		1,765			1,565			—
Fintech—government grants		—			382			20
net2phone—write-off of telephone equipment		—			(133	)		—
net2phone—write-off of contingent consideration liability		73			—			303
write-off of contingent consideration liability		73			—			303
net2phone—other		(17	)		—			(10	)
National Retail Solutions—write-off of capitalized internal use software costs		(45	)		—			—
National Retail Solutions—other		(105	)		—			—
Traditional Communications—write-off of capitalized internal use software costs		(237	)		(1,419	)		—
Traditional Communications—cable telephony customer indemnification claim		—			(3,925	)		(96	)
Traditional Communications—increase in contingent consideration liability		—			(216	)		—
Traditional Communications—other		51			(329	)		(7	)
TOTAL	$	(2,945	)	$	(4,415	)	$	(826	)

Straight Path Communications Inc. Class Action

As discussed in Note 23, the Company (as well as other defendants) was named in a class action on behalf of the stockholders of the Company’s former subsidiary, Straight Path Communications Inc. (“Straight Path”). The Company incurred legal fees and recorded offsetting gains from insurance claims related to this action in fiscal 2024, fiscal 2023, and fiscal 2022. In fiscal 2024, the Company received the final payment from its insurance policy for these claims. On October 3, 2023, the Court of Chancery of the State of Delaware dismissed all claims against the Company, and found that, contrary to the plaintiffs’ allegations, the class suffered no damages. The plaintiffs will have 30 days from entry of the final order to file an appeal.

Grow New Jersey Assistance Act Tax Credit

In September 2017, the Company, the Company’s subsidiary IDT Domestic Telecom, Inc. (“IDT DT”), and certain other affiliates were certified by the New Jersey Economic Development Authority (“NJEDA”) as having met the requirements of the Grow New Jersey Assistance Act Tax Credit Program. The program provides for credits against a corporation’s New Jersey corporate business tax liability for maintaining a minimum number of employees in New Jersey, and that tax credits may be sold subject to certain conditions. On June 5, 2023, the Company received a 2019 tax credit certificate for $1.8 million from the NJEDA. In August 2023, the Company sold the certificate for cash of $1.6 million.

Contingent Consideration Liabilities

In fiscal 2024 and fiscal 2023, the Company determined that the requirements for the contingent consideration payments related to the Leaf acquisition would likely not be met. The Company recognized gains in the Fintech segment of $1.8 million and $1.6 million in fiscal 2024 and fiscal 2023, respectively, on the write-off of these contingent consideration payment obligations. Also, in fiscal 2024 and fiscal 2022, the Company determined that the requirements for contingent consideration payments related to an acquisition in a prior period would not be met. The Company recognized gains in the net2phone segment of $0.1 million and $0.3 million in fiscal 2024 and fiscal 2022, respectively, on the write-off of these contingent consideration payment obligations. In fiscal 2023, the Company increased the estimated fair value of acquisition-related contingent consideration in its Traditional Communications segment by $0.2 million.

Government Grants

In fiscal 2023 and fiscal 2022, Leaf received payments from government grants for the development and commercialization of blockchain-backed financial technologies.

Write-off of Capitalized Internal Use Software Costs

In fiscal 2024 and fiscal 2023, the Company reduced its unamortized capitalized internal use software costs for internal use software that was taken out of service and recorded expense of $0.3 million and $1.4 million, respectively.

Indemnification Claim

Beginning in June 2019, as part of a commercial resolution, the Company indemnified a cable telephony customer related to patent infringement claims brought against the customer. On May 8, 2023, the Company and the customer agreed to release the Company from the indemnification agreement in exchange for $3.9 million.