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Related Party Transactions
 3 Months Ended
Oct. 31, 2023
Related Party Transactions [Abstract]  
RELATED PARTY TRANSACTIONS

NOTE 16 – RELATED PARTY TRANSACTIONS

 

IDT Corporation

 

The Company has historically maintained an intercompany balance due to/from related parties that relates to cash advances for investments, loan repayments, charges for services provided to the Company by IDT and payroll costs for the Company’s personnel that were paid by IDT. IDT billed the Company approximately $78 thousand and $313 thousand for services during the three months ended October 31, 2023 and the year ended July 31, 2023, respectively, of which $78 thousand and $70 thousand is included in due to related parties at three months ended October 31, 2023 and the year ended July 31, 2023, respectively.

 

IDT leased, prior to the Company's sale of the property, approximately 80,000 square feet of office space plus parking at the 520 Property and currently leases approximately 3,600 square feet of office space in Jerusalem, Israel. The Company invoiced IDT approximately $27 thousand and $211 thousand for each of the three months ended October 31, 2023 and year ended July 31, 2023. As of October 31, 2023 and July 31, 2023, IDT owed the Company approximately $223 thousand and $210 thousand, respectively, for office rent and parking.

 

Cornerstone Pharmaceuticals

 

On March 21, 2023, the Company entered into a Promissory Note with Cornerstone Pharmaceuticals, wherein, Cornerstone Pharmaceuticals promises to pay the Company $2 million together with all interest accrued on May 22, 2023, or such earlier date as the Promissory Note is required or permitted to be repaid. On May 22, 2023, the Promissory Note was amended to extend the maturity date to November 30, 2023 and to waive the interest increase (see Note 5).

 

Genie Energy, Ltd.

 

The Company leased office space at 520 Broad Street to Genie. The Company invoiced Genie approximately $19 thousand which is included in discontinued operations during the three months ended October 31, 2022. Genie pays the Company for payroll costs for certain personnel employed by the Company that provide services to Genie on a part-time basis, which totaled approximately $20 thousand during the three months ended October 31, 2023.

 

Related Party Rental Income

 

The Company leased space to related parties (including IDT Corporation - see above) which represented approximately 40% and 44% of the Company's total revenue for the three months ended October 31, 2023 and 2022, respectively. The portion of related party rental income pertaining to the 520 Property has been classified in discontinued operations on the consolidated statements of operations and comprehensive loss for the three months ended October 31, 2022.

 

Howard Jonas, Chairman of the Board, Former Chief Executive Officer

 

In December 2020, IDT Corporation and Genie Energy Ltd, on whose Boards of Directors Howard Jonas (the Company’s Chairman of the Board and Executive Chairman and former Chief Executive Officer) serves, each purchased 218,245 shares of Class B common stock for consideration of $5 million each. In connection with the purchases, each purchaser was granted warrants (the "Issued Warrants”) to purchase twenty percent (20%) of the shares of Class B common stock purchased by such purchaser. The Issued Warrants have an exercise price of $22.91 per share and expired on June 6, 2022. The Issued Warrants were not exercised. The shares and Issued Warrants were issued in reliance on the exemption from registration provided for under Section 4(a)(2) of the Securities Act of 1933, as amended.

 

On July 6, 2022, pursuant to a Stock Purchase Agreement (the "I9 SPA”) dated June 22, 2022 with I9 Plus, LLC, an entity affiliated with members of the family of Howard Jonas, the Company sold 3,225,806 shares of the Company’s Class B common stock to I9 Plus, LLC at a price per share of $1.86 and an aggregate sale price of $6 million. The price per share was calculated to be the greater of (1) the volume weighted average price for the Class B common stock on the New York Stock Exchange for the five trading days ending on June 21, 2022 (which were the five trading days beginning with the first full trading day following the date that the transaction was approved by the Board of Directors of the Company, and its Corporate Governance Committee which consists solely of independent members of the Board) and (2) the closing price of the Class B common stock on June 21, 2022 (the trading day immediately preceding the date of the I9 SPA to ensure that the sale price was not below the Minimum Price under NYSE Rule 312.03(b)). The shares were issued in reliance on the exemption from registration provided for under Section 4(a)(2) of the Securities Act of 1933, as amended.

 

On July 31, 2023, eight trusts, each for the benefit of a child of Howard S. Jonas, the Company’s Executive Chairman and Chairman of the Board, with independent trustees, transferred an aggregate of 787,163 shares of Class A common stock of the Company (representing all of the issued and outstanding shares of the Class A common stock of the Company, and 51.3% of the aggregate voting power of all issued and outstanding shares of capital stock of the Company) to a limited partnership. Howard Jonas is the sole manager of the sole general partner of the limited partnership, and, therefore, has sole voting and dispositive power over the shares of Class A common stock held by the limited partnership. Following the transfer, Mr. Jonas will be the controlling stockholder of the Company and the Company is a controlled company as defined in Section 303A of the New York Stock Exchange Listed Company Manual.

 

In September 2023, Howard Jonas became the interim Chief Executive Officer of Cornerstone Pharmaceuticals.

 

LipoMedix Pharmaceuticals, Ltd.

 

On February 9, 2023, the Company entered into a share purchase agreement with LipoMedix to purchase 70,000,000 ordinary shares at $0.03 per share for an aggregate purchase price of $2.1 million. As a result of the share purchase, the Company’s ownership of LipoMedix increased to approximately 95% with a noncontrolling interest of approximately 5%. The Company recorded approximately $16 thousand to adjust the carrying amount of the noncontrolling interest to reflect the Company’s increased ownership interest in LipoMedix’s net assets.