Quarterly report pursuant to Section 13 or 15(d)

Leases

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Leases
9 Months Ended
Apr. 30, 2024
Leases [Abstract]  
Leases

Note 9 – Leases

 

The Company determines if an arrangement is or contains a lease at contract inception. The Company leases buildings, office space, and equipment through operating leases. Generally, a right-of-use asset, representing the right to use the underlying asset during the lease term, and a lease liability, representing the payment obligation arising from the lease, are recognized on the balance sheet at lease commencement based on the present value of the payment obligation. For operating leases, expense is recognized on a straight-line basis over the lease term. Short-term leases with an initial term of 12 months or less are not recorded on the balance sheet; the Company recognizes lease expense for these leases on a straight-line basis over the lease term. The Company primarily uses its incremental borrowing rate in determining the present value of lease payments as the Company’s leases generally do not provide an implicit rate.

 

The Company has lease agreements with (i) right-of-use asset payments and (ii) non-lease components (e.g. payments related to maintenance fees, utilities, etc.) which have generally been combined and accounted for as a single lease component. The Company’s leases have remaining terms of less than 1 year to 4 years, some of which include options to extend the leases for up to 3 years. The Company’s lease terms may include renewal options that are reasonably certain to be exercised and termination options that are reasonably certain not to be exercised.

 

Certain of the Company’s lease agreements include rental payments adjusted periodically for inflation or a market rate which are included in the lease liabilities.

 

Leases   Balance Sheet Classification   April 30,
2024
    July 31,
2023
 
Assets                    
Operating   Right-of-use assets   $ 2,959     $ 3,626  
Total lease assets       $ 2,959     $ 3,626  
                     
Liabilities                    
Current:                    
Operating   Current portion of operating lease liabilities   $ 799     $ 980  
                     
Non-current:                    
Operating   Operating lease liabilities, non-current     2,595       3,160  
Total lease liabilities       $ 3,394     $ 4,140  

 

Components of lease cost were as follows:

 

    Three months ended
April 30,
    Nine months ended
April 30,
 
    2024     2023     2024     2023  
Operating lease cost – net (a)   $ 141     $ 108     $ 422     $ 472  

 

(a) Net of $126 and $378 of sublease income for the three and nine months ended April 30, 2024, respectively, and $126 and $252 for the three and nine months ended April 30, 2023, respectively.

  

The maturities of the Company’s lease liabilities as of April 30, 2024 are as follows:

 

Maturity of lease liabilities, years ending July 31,   Operating
leases
 
2024   $ 278  
2025     896  
2026     886  
2027     881  
2028     808  
Total lease payments     3,749  
Less: Interest (a)     (355 )
Present value of lease liabilities   $ 3,394  

 

(a) Primarily calculated using the Company’s incremental borrowing rate.

 

Lease term and discount rate for the nine months ended April 30 were as follows:

 

Lease term and discount rate   2024     2023  
Weighted-average remaining lease term (years) - operating leases     4.1 years       5.1 years  
                 
Weighted-average discount rate – operating leases     5.1 %     5.1 %

 

See Note 5 for cash flow information on cash paid for amounts included in the measurement of lease liabilities for the nine months ended April 30, 2024 and 2023.