INCOME TAXES (Tables)

12 Months Ended

Jul. 31, 2024

Components of Loss from Continuing Operations before Provision for Income Taxes

The components of income before provision for income taxes are as follows:


	Successor				Predecessor
	Fiscal Year Ended July 31,		May 1 to July 31,		August 1, 2022 to April 30,
	2024		2023		2023
	(In thousands)
Income before income taxes:
U.S.	$	14,460	$	9,866	$	2,021
Foreign	6,497		(2,115)		7,069
Total income before income taxes	$	20,957	$	7,751	$	9,090

Components of Income Tax Expense from Operations

The components of income tax (benefit) expense consist of the following:


	Successor				Predecessor
	Fiscal Year Ended July 31,		May 1 to July 31,		August 1, 2022 to April 30,
	2024		2023		2023
	(In thousands)
Current provision (benefit):
Federal	$	53	$	72	$	487
State	(141)		(110)		48
Foreign	1,535		(110)		1,095
	1,447		(148)		1,630
Deferred (benefit) provision:
Federal	(62,128)		—		—
State	(6,410)		—		—
Foreign	68		(250)		—
	(68,470)		(250)		—
Total tax (benefit) provision	$	(67,023)	$	(398)	$	1,630

Components of Deferred Tax Assets and Liabilities

The components of deferred tax assets and liabilities are as follows:


	Successor
	July 31, 2024		July 31, 2023
	(In thousands)
Deferred tax assets:
Accruals and reserves	$	2,667	$	2,645
Tax basis in excess of financial basis for intangible and fixed assets	166		175
Lease liability	3,031		3,574
Convertible debt	25		—
Research and experiment	43		—
Interest expense disallowance	—		—
Credit carry forwards	25		25
Net operating loss and capital loss carry forwards	85,157		95,832
Total gross deferred tax assets	91,114		102,251
Less: valuation allowance	(12,721)		(90,436)
Net deferred tax assets	$	78,393	$	11,815
Deferred tax liabilities:
Financial basis in excess of tax basis for intangible and fixed assets	$	(7,262)	$	(8,446)
Right-of-use asset	(2,838)		(3,454)
Prepaid expenses	(322)		—
Convertible debt	—		(404)
Total gross deferred tax liabilities	(10,422)		(12,304)
Net deferred tax assets (liabilities)	$	67,971	$	(489)

Reconciliation of Income Tax Expense Attributable to Income from Continuing Operations

Income tax (benefit) expense attributable to income differs from the expense computed by applying the U.S. federal income tax rate of 21.0% to income before income taxes as a result of the following:


	Successor				Predecessor
	Fiscal Year Ended July 31,		May 1 to July 31,		August 1, 2022 to April 30,
	2024		2023		2023
	(In thousands)
Computed "expected" income tax expense (benefit)	$	4,401	$	1,627	$	1,909
Increase (decrease) in income tax expense resulting from:
Change in valuation allowance	(77,845)		(350,469)		(424)
Foreign tax rate differential	(166)		(255)		(50)


Nondeductible expenses	29		459		—
Foreign withholding taxes	(157)		245		147
Foreign other adjustments	167		(246)		—
GILTI	944		1,141		—
Change in uncertain tax position reserves	(259)		(430)		11
Section 78 gross-up	270		—		—


State income taxes, net of federal benefit	869		(1,916)		37
Expiration of net operating loss	5,027		347,462		—
Deferred true-up	(361)		1,786		—
Other	58		198		—
Actual income tax (benefit) expense	$	(67,023)	$	(398)	$	1,630

Reconciliation of Beginning and Ending Balances of Total Amounts of Gross Unrecognized Tax Benefits

A reconciliation of the beginning and ending balances of the total amounts of gross unrecognized tax benefits is as follows:


	Successor
	July 31, 2024		July 31, 2023
	(In thousands)
Balance as of beginning of year	$	274	$	571


Reductions for lapses in statute of limitations	(189)		(297)

Balance as of end of year	$	85	$	274