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FAIR VALUE MEASUREMENTS
12 Months Ended
Jul. 31, 2023
Fair Value Disclosures [Abstract]  
FAIR VALUE MEASUREMENTS FAIR VALUE MEASUREMENTS
Assets and Liabilities that are Measured at Fair Value on a Recurring Basis

The following tables present the Company's financial assets and liabilities measured at fair value on a recurring basis as of July 31, 2023 and 2022, classified by fair value hierarchy:
SuccessorFair Value Measurements at
Reporting Date Using
(In thousands)July 31, 2023Level 1Level 2Level 3
Assets:
Money market funds$31,090 $31,090 $— $— 
Liabilities:
SPHG Note$12,461 $— $— $12,461 
PredecessorFair Value Measurements at
Reporting Date Using
(In thousands)July 31, 2022Level 1Level 2Level 3
Assets:
Money market funds$31,756 $31,756 $— $— 

There were no transfers between Levels 1, 2 or 3 during any of the periods presented.
When available, quoted prices are used to determine fair value. When quoted prices in active markets are available, investments are classified within Level 1 of the fair value hierarchy. When quoted prices in active markets are not available, fair values are determined using pricing models, and the inputs to those pricing models are based on observable market inputs. The inputs to the pricing models are typically benchmark yields, reported trades, broker-dealer quotes, issuer spreads and benchmark securities, among others.
Assets and Liabilities that are Measured at Fair Value on a Nonrecurring Basis
The Company reviews the carrying amounts of these assets whenever certain events or changes in circumstances indicate that the carrying amounts may not be recoverable. An impairment loss is recognized when the carrying amount of the asset
group or reporting unit is not recoverable and exceeds its fair value. The Company estimates the fair values of assets subject to impairment based on the Company's own judgments about the assumptions that market participants would use in pricing the assets and on observable market data, when available.
Fair Value of Financial Instruments
The Company's financial instruments not measured at fair value on a recurring basis include cash and cash equivalents, accounts receivable, customer deposits, accounts payable, restricted cash and debt, and are reflected in the consolidated financial statements at carrying value. Carrying value approximates fair value for these items due to their short-term maturities or expected settlement dates of these instruments.
As of July 31, 2022, the Company did not measure the fair value of the SPHG Note on a recurring basis, as the assumption was that the carrying value of the liability component of the SPHG Note approximated fair value because the stated interest rate of this debt was consistent with current market rates. In conjunction with the application of pushdown accounting, the Company will now measure the fair value of the SPHG on a recurring basis. Refer to Note 3 - "Exchange Transaction" and Note 10 - "Debt" for further details. The Company estimates the value of the SPHG Note using a Binomial Lattice Model. Key inputs in the valuation include the trading price and volatility of Steel Connect's common stock, the risk-free rate of return, as well as the dividend rate, conversion price, and maturity date. The Company recognized $0.5 million in unrealized losses in Other gains, net within the consolidated statements of operations for the Successor Period as a result of the fair value measurement performed at July 31, 2023.
Following is a summary of changes in the SPHG Note measured using Level 3 inputs:
Balance as of May 1, 2023 (Successor):$13,006 
Principal repayment(1,000)
Unrealized losses455 
Balance as of July 31, 2023 (Successor)$12,461 
Included in cash and cash equivalents in the accompanying condensed consolidated balance sheets are money market funds. These are valued at quoted market prices in active markets.