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Equity Investments | 6 Months Ended
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Jan. 31, 2024
Cash and Cash Equivalents [Abstract] |
Equity Investments | Note 7—Equity Investments Equity investments consist of the following: Schedule of Equity Investments
|  | January 31, 2024 |  |  | July 31, 2023 |
|  | (in thousands) |
Zedge, Inc. Class B common stock, 42,282 shares at January 31, 2024 and July 31, 2023 |  | $ | 138 |  |  | $ | 89 |
Rafael Holdings, Inc. Class B common stock, 278,810 shares at January 31, 2024 and July 31, 2023 |  |  | 505 |  |  |  | 558 |
Other marketable equity securities |  |  | 188 |  |  |  | 1,497 |
Fixed income mutual funds |  |  | 4,245 |  |  |  | 4,054 |
Current equity investments |  | $ | 5,076 |  |  | $ | 6,198 |
Visa Inc. Series C Convertible Participating Preferred Stock (“Visa Series C Preferred”) |  | $ | 1,450 |  |  | $ | 1,263 |
Convertible preferred stock—equity method investment |  |  | 1,932 |  |  |  | 2,784 |
Hedge funds |  |  | 2,951 |  |  |  | 3,002 |
Other |  |  | 1,225 |  |  |  | 2,825 |
Noncurrent equity investments |  | $ | 7,558 |  |  | $ | 9,874 |
Howard S. Jonas, the Chairman of the Company and the Chairman of the Company’s Board of Directors, is also the Vice-Chairman of the Board of Directors of Zedge, Inc. and the Chairman of the Board of Directors and Executive Chairman of Rafael Holdings, Inc. The changes in the carrying value of the Company’s equity investments without readily determinable fair values for which the Company elected the measurement alternative was as follows: Schedule of Carrying Value of Equity Investments
|  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
|  | Three Months Ended January 31, |  |  | Six Months Ended January 31, |
|  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
|  | (in thousands) |
Balance, beginning of period |  | $ | 1,747 |  |  | $ | 1,474 |  |  | $ | 1,632 |  |  | $ | 1,501 |
Adjustment for observable transactions involving a similar investment from the same issuer |  |  | 202 |  |  |  | 120 |  |  |  | 187 |  |  |  | 93 |
Upward adjustment |  |  | — |  |  |  | — |  |  |  | 130 |  |  |  | — |
Redemption |  |  | (230 | ) |  |  | — |  |  |  | (230 | ) |  |  | — |
Impairments |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Balance, end of the period |  | $ | 1,719 |  |  | $ | 1,594 |  |  | $ | 1,719 |  |  | $ | 1,594 |
The Company increased the carrying value of the shares of Visa Series C Preferred it held based on the fair value of Visa Class A common stock, including a discount for lack of current marketability, which is classified as “Adjustment for observable transactions involving a similar investment from the same issuer” in the table above. In addition, in connection with the acquisition of Regal Bancorp by SR Bancorp, the Company received cash of $0.2 million in December 2023 in exchange for its shares of Regal Bancorp common stock. Unrealized gains (losses) for all equity investments measured at fair value included the following: Schedule of Unrealized Gains (losses) Gains for All Equity Investments
|  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
|  | Three Months Ended January 31, |  |  | Six Months Ended January 31, |
|  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
|  | (in thousands) |
Net gains (losses) recognized during the period on equity investments |  | $ | 715 |  |  | $ | (228 | ) |  | $ | (202 | ) |  | $ | (2,169 | )
Less: net gains recognized during the period on equity investments sold during the period |  |  | — |  |  |  | 22 |  |  |  | 130 |  |  |  | 18 |
Unrealized gains (losses) recognized during the period on equity investments still held at the reporting date |  | $ | 715 |  |  | $ | (250 | ) |  | $ | (332 | ) |  | $ | (2,187 | )
The unrealized gains and losses for all equity investments measured at fair value in the table above included the following:
|  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
|  | Three Months Ended January 31, |  |  | Six Months Ended January 31, |
|  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
|  | (in thousands) |
Unrealized gains (losses) recognized during the period on equity investments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Rafael Class B common stock |  | $ | 9 |  |  | $ | 82 |  |  | $ | (53 | ) |  | $ | 9 |
Zedge Class B common stock |  | $ | 57 |  |  | $ | 3 |  |  | $ | 49 |  |  | $ | (24 | )
Unrealized losses recognized during the period on equity investments still held at the reporting date |  | $ | 715 |  |  | $ | (250 | ) |  | $ | (332 | ) |  | $ | (2,187 | )
Equity Method Investment The Company has an investment in shares of convertible preferred stock of a communications company (the equity method investee, or “EMI”). As of January 31, 2024 and July 31, 2023, the Company’s ownership was 33.4% and 33.3%, respectively, of the EMI’s outstanding shares on an as converted basis. The Company accounts for this investment using the equity method since the Company can exercise significant influence over the operating and financial policies of the EMI but does not have a controlling interest. The Company determined that on the dates of the acquisitions of the EMI’s shares, there were differences between its investment in the EMI and its proportional interest in the equity of the EMI of an aggregate of $8.2 million, which represented the share of the EMI’s customer list on the dates of the acquisitions attributed to the Company’s interest in the EMI. These basis differences are being amortized over the 6-year estimated life of the customer list. In the accompanying consolidated statements of income, amortization of equity method basis difference is included in the equity in the net loss of investee, which is recorded in “Other income (expense), net” (see Note 17). In February 2024, each of the EMI’s shareholders (including the Company) agreed to purchase additional shares of the EMI’s convertible preferred stock. The Company paid $0.3 million in February 2024 and is committed to pay $0.2 million in March 2024 to purchase the additional shares. The following table summarizes the change in the balance of the Company’s equity method investment: Summary of Changes in Equity Method Investments
|  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
|  | Three Months Ended January 31, |  |  | Six Months Ended January 31, |
|  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
|  | (in thousands) |
Balance, beginning of period |  | $ | 2,444 |  |  | $ | 349 |  |  | $ | 2,784 |  |  | $ | 1,001 |
Purchase of convertible preferred stock |  |  | 336 |  |  |  | — |  |  |  | 1,009 |  |  |  | — |
Equity in the net loss of investee |  |  | (506 | ) |  |  | (542 | ) |  |  | (1,176 | ) |  |  | (1,012 | )
Amortization of equity method basis difference |  |  | (342 | ) |  |  | (181 | ) |  |  | (685 | ) |  |  | (363 | )
Balance, end of the period |  | $ | 1,932 |  |  | $ | (374 | ) |  | $ | 1,932 |  |  | $ | (374 | )
Summarized financial information of the EMI was as follows: Summary of Statements of Operations
|  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
|  | Three Months Ended January 31, |  |  | Six Months Ended January 31, |
|  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
|  | (in thousands) |
Revenues |  | $ | 5,087 |  |  | $ | 1,818 |  |  | $ | 7,821 |  |  | $ | 3,691 |
Costs and expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Direct cost of revenues |  |  | 4,085 |  |  |  | 1,535 |  |  |  | 6,482 |  |  |  | 3,228 |
Selling, general and administrative |  |  | 2,385 |  |  |  | 1,772 |  |  |  | 4,570 |  |  |  | 3,408 |
Total costs and expenses |  |  | 6,470 |  |  |  | 3,307 |  |  |  | 11,052 |  |  |  | 6,636 |
Loss from operations |  |  | (1,383 | ) |  |  | (1,489 | ) |  |  | (3,231 | ) |  |  | (2,945 | )
Other expense, net |  |  | — |  |  |  | (498 | ) |  |  | — |  |  |  | (842 | )
Net loss |  | $ | (1,383 | ) |  | $ | (1,987 | ) |  | $ | (3,231 | ) |  | $ | (3,787 | )

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- Definition The entire disclosure for cash, cash equivalents, investments in debt and equity instruments (including cost and equity investees and related income statement amounts), equity and cost method investments, investments in joint ventures and any other investment. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 65 -Paragraph 13 -Subparagraph (d)(3) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482477/820-10-65-13 + Details
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