Fair Value Measurements

6 Months Ended

Jan. 31, 2020

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

NOTE 5 — FAIR VALUE MEASUREMENTS

The Fair Value Measurements and Disclosures topic of the FASB ASC requires disclosures about how fair value is determined for assets and liabilities and a hierarchy for which these assets and liabilities must be grouped is established, based on significant levels of inputs as follows:

Level 1 – quoted prices in active markets for identical assets or liabilities;

Level 2 – quoted prices in active markets for similar assets and liabilities and inputs that are observable for the asset or liability;

Level 3 – unobservable inputs for the asset or liability, such as discounted cash flow models or valuations.

The determination of where assets and liabilities fall within this hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

The following is a listing of the Company's assets required to be measured at fair value on a recurring basis and where they are classified within the fair value hierarchy as of January 31, 2020 and July 31, 2019:

	January 31, 2020
	Level 1		Level 2		Level 3		Total
Available-for-sale securities:	(unaudited, in thousands)
Hedge Funds	$	—	$	—	$	5,645	$	5,645
Total	$	—	$	—	$	5,645	$	5,645

	July 31, 2019
	Level 1		Level 2		Level 3		Total
Available-for-sale securities:	(unaudited, in thousands)
Hedge Funds	$	—	$	—	$	5,125	$	5,125
Total	$	—	$	—	$	5,125	$	5,125

At January 31, 2020 and July 31, 2019, the Company did not have any liabilities measured at fair value on a recurring basis.

The following table summarizes the change in the balance of the Company's assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3).

	Six Months Ended January 31,
	2020		2019
	(unaudited, in thousands)
Balance, beginning of period	$	5,125	$	12,118
Conversion of Series D Convertible Note		—		(7,900	)
Total gain included in earnings		520		(52	)
Balance, end of period	$	5,645	$	4,166

At July 31, 2018, the fair value of the Rafael Pharmaceuticals convertible promissory notes, which were classified as Level 3, was estimated based on a valuation of Rafael Pharmaceuticals by reference to recent transactions in its securities, the September 2016 Series D Convertible Note investment, as well as utilizing a discounted cash flow technique under the Income Approach and other factors that could not be corroborated by the market. The Note was converted into shares of Series D Convertible Preferred Stock of Rafael Pharmaceuticals in January 2019.

Prior to the Spin-Off, IDT contributed a $2.0 million investment in securities of another entity that are not liquid, which were included in Investments – Other Pharmaceuticals in the accompanying consolidated balance sheets. The investment is accounted for using the cost method; therefore, this investment is not measured at fair value.

Fair Value of Other Financial Instruments

The estimated fair value of the Company's other financial instruments was determined using available market information or other appropriate valuation methodologies. However, considerable judgment is required in interpreting these data to develop estimates of fair value. Consequently, the estimates are not necessarily indicative of the amounts that could be realized or would be paid in a current market exchange.

Cash and cash equivalents, prepaid expenses and other current assets, and other current liabilities. At January 31, 2020 and July 31, 2019, the carrying amount of these assets and liabilities approximated fair value because of the immediate or short period of time to maturity. The fair value estimates for cash and cash equivalents were classified as Level 1 and other current assets, and other current liabilities were classified as Level 2 of the fair value hierarchy.

Other assets and other liabilities. At January 31, 2020 and July 31, 2019, the carrying amount of these assets and liabilities approximated fair value. The fair values were estimated based on the Company's assumptions, which were classified as Level 3 of the fair value hierarchy.

The Company's financial instruments include trade accounts receivable, trade accounts payable, and due from related parties. The recorded carrying amount of trade accounts receivable, trade accounts payable and due from related parties approximate their fair value due to their short-term nature. Other than noted above, the Company did not have any other assets or liabilities that were measured at fair value on a recurring basis as of January 31, 2020 or July 31, 2019.