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Operating Leases

12 Months Ended

Jul. 31, 2025

Note 11—Operating Leases

The Company has operating leases primarily for office space located in Tel Aviv, Israel, as well as a short-term lease in Vilnius, Lithuania.

The Company reviews the impairment of ROU assets consistent with the approach applied for the Company’s other long-lived assets. The Company reviews the recoverability of long-lived assets when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on the Company’s ability to recover the carrying value of the asset from the expected undiscounted future pre-tax cash flows of the related operations.

In connection with the restructuring we implemented in January 2025 (See Note 18 Restructuring, Impairments, and Related Charges for more details), we have determined that the carrying value of the ROU asset for our office in Trondheim are not recoverable and recorded an impairment charge of approximately $140,000 in the fourth quarter of fiscal 2025. Operating lease right-of-use assets recorded and included in other assets were approximately $64,000 and $214,000 at July 31, 2025 and 2024, respectively. The remaining $139,000 lease liabilities related to the office in Trondheim is included and presented under accrued expenses and other current liabilities and other liabilities. The Company will continue to make lease payments under the lease until the end of the lease term on March 31, 2027, or sooner upon signing of an early lease termination agreement.

The following table presents the lease-related assets and liabilities for leases recorded on the consolidated balance sheets (in thousands) as of July 31, 2025 and 2024:

	As of July 31,
	2025		2024
Operating leases:
Other assets	$	64	$	214

Accrued expenses and other current liabilities	$	144	$	85
Other liabilities		53		118
Total operating lease liabilities	$	196	$	203

The following table includes the components of our occupancy costs in our consolidated statements of operations and comprehensive loss:

	Years ended July 31,
(in thousands)	2025		2024
Operating lease cost (1)	$	142	$	140
Short-term lease cost	$	49	$	43
Variable lease cost (2)	$	94	$	96

(1)	Operating lease costs include costs associated with fixed lease payments and index-based variable payments that qualified for lease accounting under ASC 842, Leases and complied with the practical expedients and exceptions we elected.

(2)

Variable lease costs include costs that were not fixed at the lease commencement date and are not dependent on an index or rate. These costs were not included in the measurement of lease liabilities and primarily include variable non-lease costs, such as utilities, real estate taxes, insurance and maintenance.

The following table summarizes the weighted average remaining lease term and weighted average discount rate as of July 31, 2025 and 2024:

	As of July 31,
	2025			2024
Weighted average remaining lease term:
Operating leases		1.48 years			2.55 years
Weighted average discount rate:
Operating leases		4.86	%		3.77	%

Future minimum lease payments under non-cancellable leases at July 31, 2024 are as follows (in thousands):

Years ending July 31,	Operating Leases
2026	$	150
2027		68
Total future minimum lease payments		218
Less imputed interest		7
Total	$	211

Zedge Lithuania UAB is the lessee under a three-year lease agreement (through October 2028) for a 3,600 square feet office space. The annual lease cost is approximately $103,000, including eight parking spaces. See Note 19, Subsequent Events.