Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Oct. 31, 2019 | Dec. 10, 2019 | |
Entity Registrant Name | Zedge, Inc. | |
Entity Central Index Key | 0001667313 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --07-31 | |
Document Type | 10-Q | |
Document Period End Date | Oct. 31, 2019 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2020 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity File Number | 1-37782 | |
Entity Interactive Data Current | Yes | |
Entity Incorporation State Country Code | DE | |
Class A common stock | ||
Entity Common Stock, Shares Outstanding | 524,775 | |
Class B common stock | ||
Entity Common Stock, Shares Outstanding | 9,872,199 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Oct. 31, 2019 | Jul. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 1,659 | $ 1,609 |
Trade accounts receivable, net of allowance for doubtful accounts of $0 at October 31, 2019 and July 31, 2019 | 1,065 | 1,133 |
Prepaid expenses | 220 | 380 |
Other current assets | 57 | 103 |
Total current assets | 3,001 | 3,225 |
Property and equipment, net | 3,099 | 3,396 |
Goodwill | 2,168 | 2,266 |
Other assets | 583 | 120 |
Total assets | 8,851 | 9,007 |
Current liabilities: | ||
Trade accounts payable | 328 | 217 |
Insurance premium loan payable | 110 | 141 |
Accrued expenses and other current liabilities | 1,466 | 1,172 |
Deferred revenues | 613 | 517 |
Total current liabilities | 2,517 | 2,047 |
Other liabilities | 242 | |
Total liabilities | 2,759 | 2,047 |
Commitments and contingencies (Notes 8 and 12) | ||
Stockholders' equity: | ||
Preferred stock, $.01 par value; authorized shares-2,400; no shares issued | ||
Additional paid-in capital | 23,229 | 23,131 |
Accumulated other comprehensive loss | (1,128) | (985) |
Accumulated deficit | (16,044) | (15,243) |
Treasury stock, 36 shares at October 31, 2019 and 22 shares at July 31, 2019, at cost | (69) | (47) |
Total stockholders' equity | 6,092 | 6,960 |
Total liabilities and stockholders' equity | 8,851 | 9,007 |
Class A common stock | ||
Stockholders' equity: | ||
Common stock value | 5 | 5 |
Total stockholders' equity | 5 | 5 |
Class B common stock | ||
Stockholders' equity: | ||
Common stock value | 99 | 99 |
Total stockholders' equity | $ 99 | $ 99 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Oct. 31, 2019 | Jul. 31, 2019 |
Allowance for doubtful accounts | $ 0 | $ 0 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 2,400 | 2,400 |
Preferred stock, shares issued | ||
Treasury stock, shares | 36 | 22 |
Class A common stock | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 2,600 | 2,600 |
Common stock, shares issued | 525 | 525 |
Common stock, shares outstanding | 525 | 525 |
Class B common stock | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 40,000 | 40,000 |
Common stock, shares issued | 9,876 | 9,876 |
Common stock, shares outstanding | 9,840 | 9,854 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Oct. 31, 2019 | Oct. 31, 2018 | |
Income Statement [Abstract] | ||
Revenues | $ 2,033 | $ 2,381 |
Costs and expenses: | ||
Direct cost of revenues (exclusive of amortization of capitalized software and technology development costs included below) | 328 | 350 |
Selling, general and administrative | 1,945 | 2,309 |
Depreciation and amortization | 505 | 303 |
Loss from operations | (745) | (581) |
Interest and other income | 7 | |
Net loss resulting from foreign exchange transactions | (56) | (129) |
Loss before income taxes | (801) | (703) |
Provision for income taxes | 3 | |
Net loss | (801) | (706) |
Other comprehensive loss: | ||
Changes in foreign currency translation adjustment | (143) | (131) |
Total other comprehensive loss | (143) | (131) |
Total comprehensive loss | $ (944) | $ (837) |
Loss per share attributable to Zedge, Inc. common stockholders: | ||
Basic and diluted | $ (0.08) | $ (0.07) |
Weighted-average number of shares used in calculation of loss per share: | ||
Basic and diluted | 10,196 | 10,025 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) shares in Thousands, $ in Thousands | Class A Common Stock | Class B Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Treasury Stock | Total |
Balance at Jul. 31, 2018 | $ 5 | $ 98 | $ 22,508 | $ (702) | $ (11,899) | $ 10,010 | |
Balance, shares at Jul. 31, 2018 | 525 | 9,786 | |||||
Stock-based compensation | 121 | 121 | |||||
Purchase of treasury stock | (31) | (31) | |||||
Foreign currency translation adjustment | (131) | (131) | |||||
Net loss | (706) | (706) | |||||
Balance at Oct. 31, 2018 | $ 5 | $ 98 | 22,629 | (833) | (12,605) | 9,263 | |
Balance, shares at Oct. 31, 2018 | 525 | 9,786 | |||||
Balance at Jul. 31, 2019 | $ 5 | $ 99 | 23,131 | (985) | (15,243) | (47) | 6,960 |
Balance, shares at Jul. 31, 2019 | 525 | 9,876 | |||||
Stock-based compensation | 98 | 98 | |||||
Purchase of treasury stock | (22) | (22) | |||||
Foreign currency translation adjustment | (143) | (143) | |||||
Net loss | (801) | (801) | |||||
Balance at Oct. 31, 2019 | $ 5 | $ 99 | $ 23,229 | $ (1,128) | $ (16,044) | $ (69) | $ 6,092 |
Balance, shares at Oct. 31, 2019 | 525 | 9,876 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Oct. 31, 2019 | Oct. 31, 2018 | |
Operating activities | ||
Net loss | $ (801) | $ (706) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 505 | 303 |
Stock-based compensation | 98 | 121 |
Change in assets and liabilities: | ||
Trade accounts receivable | 68 | 541 |
Prepaid expenses and other current assets | 207 | 238 |
Other assets | (13) | 3 |
Trade accounts payable and accrued expenses | 192 | 408 |
Due to IDT Corporation | 13 | |
Deferred revenue | 96 | |
Net cash provided by operating activities | 352 | 921 |
Investing activities | ||
Capitalized software and technology development costs and purchase of equipment | (213) | (445) |
Investment in privately-held company | (250) | |
Net cash used in investing activities | (213) | (695) |
Financing activities | ||
Repayment of insurance premium loan payable | (31) | |
Purchase of treasury stock in connection with restricted stock vesting | (22) | (31) |
Net cash used in financing activities | (53) | (31) |
Effect of exchange rate changes on cash and cash equivalents | (36) | (42) |
Net increase in cash and cash equivalents | 50 | 153 |
Cash and cash equivalents at beginning of period | 1,609 | 3,408 |
Cash and cash equivalents at end of period | 1,659 | 3,561 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||
Cash payments made for interest expenses | $ 1 |
Basis of Presentation and Recen
Basis of Presentation and Recently Adopted Accounting Pronouncements | 3 Months Ended |
Oct. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Recently Adopted Accounting Pronouncements | Note 1—Basis of Presentation and Recently Adopted Accounting Pronouncements Basis of Presentation The accompanying unaudited consolidated financial statements of Zedge, Inc. and its subsidiaries, Zedge Europe AS and Zedge Canada, Inc. (dissolved as of May 2, 2019) (the "Company") have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended October 31, 2019 are not necessarily indicative of the results that may be expected for the fiscal year ending July 31, 2020 or any other period. The balance sheet at July 31, 2019 has been derived from the Company's audited financial statements at that date but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. For further information, please refer to the consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended July 31, 2019, as filed with the U.S. Securities and Exchange Commission (the "SEC"). The Company was formerly a majority-owned subsidiary of IDT Corporation ("IDT"). On June 1, 2016, IDT's interest in the Company was spun-off by IDT to IDT's stockholders and the Company became an independent public company through a pro rata distribution of the Company's common stock held by IDT to IDT's stockholders (the "Spin-Off"). The Company's fiscal year ends on July 31 of each calendar year. Each reference below to a fiscal year refers to the fiscal year ending in the calendar year indicated (e.g., fiscal 2020 refers to the fiscal year ending July 31, 2020). Recently Adopted Accounting Pronouncements In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-02 —Leases The Company adopted this standard in the first quarter of fiscal 2020, effective as of August 1, 2019, using the modified retrospective approach. The adoption of Topic 842 had a material impact on the Company's consolidated balance sheets, but did not impact its consolidated statements of comprehensive loss, consolidated statements of stockholders' equity, or consolidated statements of cash flows. There was no adjustment to beginning retained earnings on August 1, 2019. The Company elected the short-term lease recognition exemption for all leases that qualify. Accordingly, the Company did not recognize ROU assets or lease liabilities for leases that qualify, including leases for existing short-term leases in effect at transition and continue to recognize those lease payments as expenses on the Company's consolidated statements of comprehensive loss on a straight-line basis over the lease term. The Company elected the practical expedient to not separate lease and non-lease components for all its leases. Upon adoption, the Company recognized new ROU assets and lease obligations on the Consolidated Balance Sheet for its operating leases of $538,000 and $512,000, respectively. See Note 12 – Lease for further details. In August 2017, the FASB issued ASU 2017-12 – Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting Hedging Activities |
Revenue
Revenue | 3 Months Ended |
Oct. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Note 2—Revenue Revenue Recognition The Company generates revenue from three sources: (1) Advertising; (2) Other; and (3) Service. Over 80% of the Company's revenue is generated from selling its advertising inventory ("Advertising Revenue") to advertising networks, advertising exchanges, and direct arrangements with advertisers. The remaining revenue is a combination of paid subscriptions and Zedge Premium ("Other Revenue") which were launched in January 2019 and March 2018 respectively. In the prior period, the Company generated service revenue by managing and optimizing the advertising inventory of a third-party mobile application publisher, as well as overseeing the billing, collections and reporting related to advertising for this publisher ("Service Revenue"). The contract with this publisher was terminated effective May 31, 2019. The Company's currently paid subscription offering allows users to pay a monthly or annual fee to remove unsolicited advertisements from the Zedge app. The Company is working on adding additional capabilities to its paid subscription offerings including offering paid subscriptions to iOS customers. On the Zedge Premium platform, the Company retains 30% as fee revenue when users purchase licensed content using Zedge Credits or unlock licensed content by watching a video or taking a survey on the Offer Wall. Additionally, the Company also earns revenue from breakage related to expired Zedge Credits. The following table summarizes revenue by type of service for the periods presented: Three Months Ended 2019 2018 (in thousands) Advertising revenue $ 1,667 $ 2,198 Other revenue 366 12 Service revenue - 171 Total Revenue $ 2,033 $ 2,381 Contract Balances Deferred revenues The Company records deferred revenues when users purchase or earn Zedge Credits. Unused Zedge Credits represent the value of the Company's unsatisfied performance obligation to its users. Revenue is recognized when Zedge App users use Zedge Credits to acquire Zedge Premium content or upon expiration of the Zedge Credits upon six months of account inactivity. As of October 31, 2019, and July 31, 2019, the Company's deferred revenue balance related to Zedge Premium was approximately $118,000 and $155,000, respectively. In the three months ended October 31, 2019, the Company recognized $80,000 in revenue from breakage upon expiration of Zedge Credits. The Company also records deferred revenues related to the unsatisfied performance obligations with respect to subscription revenue. As of October 31, 2019, the Company's deferred revenue balance related to paid subscriptions was approximately $495,000, representing approximately 198,000 active subscribers. As of July 31, 2019, the Company's deferred revenue balance related to paid subscriptions was approximately $362,000, representing approximately 129,000 active subscribers. The amount of revenue recognized in the three months ended October 31, 2019 that was included in the deferred balance at July 31, 2019 was $126,000. Practical Expedients The Company generally expenses the fees retained by Google Play related to paid subscription revenue when incurred because the duration of the contracts for which the Company pay commissions are less than one year. These costs are included in the selling, general and administrative expenses of the Consolidated Statements of Comprehensive Loss. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Oct. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 3—Fair Value Measurements The following tables present the balance of assets and liabilities measured at fair value on a recurring basis: Level 1 (1) Level 2 (2) Level 3 (3) Total (in thousands) 31-Oct-19 Assets: Foreign exchange forward contracts $ - $ - $ - $ - Liabilities: Foreign exchange forward contracts $ - $ 60 $ - $ 60 31-Jul-19 Assets: Foreign exchange forward contracts $ - $ - $ - $ - Liabilities: Foreign exchange forward contracts $ - $ 38 $ - $ 38 (1) – quoted prices in active markets for identical assets or liabilities (2) – observable inputs other than quoted prices in active markets for identical assets and liabilities (3) – no observable pricing inputs in the market Fair Value of Other Financial Instruments The Company's other financial instruments at October 31, 2019 and July 31, 2019 included trade accounts receivable, trade accounts payable, insurance premium loan payable and lease liabilities. The carrying amounts of the trade accounts receivable, trade accounts payable, insurance premium loan payable and lease liabilities approximated fair value due to their short-term nature. |
Derivative Instruments
Derivative Instruments | 3 Months Ended |
Oct. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | Note 4—Derivative Instruments The primary risk managed by the Company using derivative instruments is foreign exchange risk. Foreign exchange forward contracts are entered into as hedges against unfavorable fluctuations in the U.S. Dollar – Norwegian Kroner (NOK) exchange rate. The Company is party to a Foreign Exchange Agreement with Western Alliance Bank allowing the Company to enter into foreign exchange contracts under its revolving credit facility with the bank (see Note 9). The Company does not apply hedge accounting to these contracts; therefore the changes in fair value are recorded in earnings. By using derivative instruments to mitigate exposures to changes in foreign exchange rates, the Company is exposed to credit risk from the failure of the counterparty to perform under the terms of the contract. The credit or repayment risk is minimized by entering into transactions with high-quality counterparties. The outstanding contracts at October 31, 2019, are as follows: Settlement Date U.S. Dollar NOK Nov-19 $ 400,000 3,489,200 Dec-19 400,000 3,556,640 Jan-20 400,000 3,554,680 Feb-20 400,000 3,553,560 Total $ 1,600,000 14,154,080 The fair value of outstanding derivative instruments recorded as liabilities in the accompanying consolidated balance sheets were as follows: Derivatives Instruments Balance Sheet Location October 31, July 31, (in thousands) Derivatives not designated or not qualifying as hedging instruments: Foreign exchange forward contracts Accrued expenses $ 60 $ 38 The effects of derivative instruments on the consolidated statements of comprehensive loss were as follows: Amount of Loss Recognized on Derivatives Three Months Ended October 31, Derivatives not designated or not qualifying as hedging instruments Statement of Comprehensive Loss Location 2019 2018 (in thousands) Foreign exchange forward contracts Net loss resulting from foreign exchange transactions $ (74 ) $ (150 ) |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 3 Months Ended |
Oct. 31, 2019 | |
Payables and Accruals [Abstract] | |
Accrued Expenses and Other Current Liabilities | Note 5—Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consist of the following: October 31, July 31, 2019 2019 (in thousands) Accrued vacation $ 475 $ 503 Accrued payroll taxes 269 183 Accrued payroll and bonuses 222 235 Operating lease liability 207 - Accrued severance 90 - Hedge payable 60 38 Accrued professional fees 20 57 Due to artists 59 56 Other 64 100 Total accrued expenses and other current liabilities $ 1,466 $ 1,172 |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Oct. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Note 6—Stock-Based Compensation 2016 Stock Option and Incentive Plan On October 18, 2017, the Company's Board of Directors amended its 2016 Stock Option and Incentive Plan (as amended to date, the "2016 Incentive Plan") to increase the number of shares of the Company's Class B common stock, par value $0.01 per share ("Class B Stock") available for the grant of awards thereunder by 350,000 shares, to an aggregate of 1,041,000 shares. This amendment was ratified by the Company's stockholders at the Annual Meeting of Stockholders held on January 17, 2018. At October 31, 2019, there were 285,000 shares of Class B Stock available for awards under the 2016 Incentive Plan. On November 7, 2019, the Company's Board of Directors amended the 2016 Incentive Plan to increase the number of shares of the Company's Class B common stock available for the grant of awards thereunder by an additional 230,000 shares. This amendment is subject to ratification by the Company's stockholders during Annual Meeting which is scheduled to take place on January 13, 2020. Pursuant to the 2016 Incentive Plan, the option exercise price for all stock option awards must not be less than the Fair Market Value of the shares of Class B Stock covered by the option award on the date of grant. In general, Fair Market Value means the closing sale price per share of Class B Stock on the exchange on which the Class B Stock is principally traded for the last preceding date on which there was a sale of Class B Stock on such exchange. Stock Options On October 18, 2017, the Compensation Committee approved the grant of options to purchase an aggregate of 124,435 shares of Class B Stock to 55 of its non-executive employees. The options vest over a three-year period from December 8, 2017. On the grant date, unrecognized compensation expense related to this grant was an aggregate of $159,000 based on the estimated fair value of the options on the grant date. The unrecognized compensation expense is being recognized on a straight-line basis over the vesting period. In fiscal 2019, the Compensation Committee approved two equity grants of options to purchase an aggregate of 27,493 shares of Class B Stock to 6 non-executive employees. The options vest over a three-year period. Unrecognized compensation expense related to this grant was an aggregate of $33,000 based on the estimated fair value of the options on the grant dates. At October 31, 2019, unrecognized compensation expense related to unvested stock options was an aggregate of $36,000. Deferred Stock Units On August 28, 2019, the Compensation Committee approved the grant of 90,000 Deferred Stock Units (DSUs) to 11 of its non-executive employees based in Norway and Lithuania. Each DSU represents a right to receive one share of Class B Common Stock. The DSUs vest over a four-year period from August 1, 2019. On the grant date, unrecognized compensation expense related to this grant was an aggregate of $139,000 based on the estimated fair value of the DSUs on the grant date. The unrecognized compensation expense is being recognized on a straight-line basis over the vesting period. At October 31, 2019, unrecognized compensation expense related to unvested DSUs was an aggregate of $133,000. Restricted Stock Award On February 7, 2018, the Compensation Committee and the Corporate Governance Committee of our Board of Directors approved a grant of 108,553 restricted shares of Class B Common Stock to our Executive Chairman Michael Jonas. Mr. Jonas agreed to accept all of his compensation for his service as Executive Chairman during fiscal 2018 in the form of equity in the Company and to make receipt of such equity compensation contingent on the Company achieving certain milestones relative to its fiscal 2018 budget. The grant was made at the time that the milestones previously set were achieved. One-third of the shares have vested and the remaining shares shall vest in equal amounts on February 7, 2020 and 2021. These shares had an aggregate grant date fair value of $330,000 which is being amortized on a straight-line basis over the vesting period. At October 31, 2019, unrecognized compensation expense related to unvested restricted stock was an aggregate of $137,000. In connection with the Freeform acquihire in September 2017, the Company granted a total of 192,953 restricted shares of Class B Common Stock to former Freeform employees, which shall vest over a four-year period subject to continued employment. These shares had an aggregate grant date fair value of $369,000 which is being amortized on a straight-line basis over the vesting period. At October 31, 2019, unrecognized compensation expense related to unvested restricted stock was an aggregate of $150,000. In September 2019 and 2018, we purchased 14,114 shares and 14,137 shares respectively of Class B Stock from former Freeform employees for $22,300 and $30,543 respectively, to satisfy tax withholding obligations in connection with the vesting of restricted stock. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Oct. 31, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note 7—Earnings Per Share Basic earnings per share is computed by dividing net income attributable to all classes of common stockholders of the Company by the weighted average number of shares of all classes of common stock outstanding during the applicable period. Diluted earnings per share is computed in the same manner as basic earnings per share, except that the number of shares is increased to include restricted stock still subject to risk of forfeiture, conversions of unvested DSUs and to assume exercise of potentially dilutive stock options using the treasury stock method, unless the effect of such increase is anti-dilutive. The weighted-average number of shares used in the calculation of basic and diluted earnings per share attributable to the Company's common stockholders consists of the following: Three Months Ended Oct. 31, 2019 2018 (in thousands) Basic weighted-average number of shares 10,196 10,025 Effect of dilutive securities: Stock options - - Non-vested restricted Class B common stock - - Non-vested deferred stock units - - Diluted weighted-average number of shares 10,196 10,025 The following shares were excluded from the dilutive earnings per share computations because their inclusion would have been anti-dilutive: Three Months Ended Oct. 31, 2019 2018 (in thousands) Stock options 1,231 1,326 Non-vested restricted Class B common stock 154 253 Non-vested deferred stock units 90 - Shares excluded from the calculation of diluted earnings per share 1,475 1,579 For the three months ended October 31, 2019 and 2018, the diluted earnings per share equals basic earnings per share because the Company incurred a net loss during those periods and the impact of the assumed exercise of stock options and vesting of restricted stock would have been anti-dilutive. |
Contingencies
Contingencies | 3 Months Ended |
Oct. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Note 8— Contingencies Legal Proceedings In March 2014, Saregama India, Limited filed a lawsuit against the Company before the Barasat District Court, seeking approximately $1.6 million as damages and an injunction for copyright infringement. Saregama India alleged that the Company made available Saregama India's sound recordings through the Company's platform with full knowledge that the sound recordings had been uploaded and were being communicated to the public without obtaining any license from Saregama India. On August 20, 2019, the Court lifted the injunction and, subsequently, Saregama India executed a consent pursuant to which the case against the Company was dismissed. The Company may from time to time be subject to other legal proceedings that arise in the ordinary course of business. Although there can be no assurance in this regard, the Company does not expect any of those legal proceedings to have a material adverse effect on the Company's results of operations, cash flows or financial condition. |
Revolving Credit Facility
Revolving Credit Facility | 3 Months Ended |
Oct. 31, 2019 | |
Revolving Credit Facility [Abstract] | |
Revolving Credit Facility | Note 9—Revolving Credit Facility As of September 27, 2016, the Company entered into a loan and security agreement with Western Alliance Bank for a revolving credit facility of up to $2.5 million for an initial two years term which was extended for another two years term expiring September 26, 2020. Advances under this facility may not exceed the lesser of $2.5 million or 80% of the Company's eligible accounts receivable, subject to certain concentration limits. The revolving credit facility is secured by a lien on substantially all of the Company's assets. The outstanding principal amount bears interest per annum at the greater of 5.0% or the prime rate plus 1.25%. Interest is payable monthly and all outstanding principal and any accrued and unpaid interest is due on the maturity date of September 26, 2020. The Company is required to pay an annual facility fee of $12,500 to Western Alliance Bank. The Company is also required to comply with various affirmative and negative covenants and to maintain certain financial ratios during the term of the revolving credit facility. The covenants include a prohibition on the Company paying any dividend on its capital stock. The Company may terminate this agreement at any time without penalty or premium provided that it pays down any outstanding principal, accrued interest and bank expenses. At October 31, 2019, there were no amounts outstanding under the revolving credit facility and the Company was in compliance with all of the covenants. As of November 16, 2016, the Company entered into a Foreign Exchange Agreement with Western Alliance Bank to allow the Company to enter into foreign exchange contracts not to exceed $5.0 million in the aggregate at any point in time under its revolving credit facility. This limit was raised to approximately $6.5 million pursuant to the Loan and Security Modification Agreement dated May 30, 2018. The available borrowing under the revolving credit facility is reduced by an applicable foreign exchange reserve percentage as determined by Western Alliance Bank, in its reasonable discretion from time to time, which was initially set at 10% of the nominal amount of the foreign exchange contracts in effect at the relevant time. In December 2016, the applicable foreign exchange reserve percentage was changed so that the reduction of available borrowing for major currency forward contracts of less than six months tenor is set at 10% of the nominal amount of the foreign exchange contracts, and for contracts over six months tenor, 12.5% of the nominal amount of the foreign exchange contracts. At October 31, 2019, there were $1.6 million of outstanding foreign exchange contracts with less than six months tenor under the credit facility, which reduced the available borrowing under the revolving credit facility by $160,000 see Note 4 above. |
Investment in Privately-Held Co
Investment in Privately-Held Company | 3 Months Ended |
Oct. 31, 2019 | |
Investment in Privately-held Company [Abstract] | |
Investment in Privately-held Company | Note 10—Investment in Privately-held Company In August 2018, the Company made a $250,000 investment in TreSensa, Inc. ("TreSensa"), representing a less than 1% equity ownership interest on a fully-diluted basis, and concurrently entered into a playable ad distribution agreement with TreSensa under which the Company shall be paid a higher percentage (when compared to industry norms) of revenue derived from all playable ads provided by TreSensa, from its available catalogue for distribution through the Zedge App. This distribution agreement was terminated in April 2019. The Company's ownership interest in TreSensa, a privately held company, is comprised of non-marketable equity securities without a readily determinable fair value. On August 1, 2018, the Company adopted ASU 2016-01, a new standard on the classification and measurement for non-marketable securities. The Company adjusts the carrying value of its non-marketable equity securities to fair value upon observable transactions for identical or similar investments of the same issuer or upon impairment (referred to as the measurement alternative). All gains and losses on non-marketable equity securities, realized and unrealized, are recognized in interest and other income (expense), net. The Company periodically evaluates the carrying value of the investments in privately held company when events and circumstances indicate that the carrying amount of the investment may not be recovered. The Company estimates the fair value of the investments to assess whether impairment losses shall be recorded using Level 3 inputs. These investments include the Company's holdings in privately held company that are not exchange traded and therefore not supported with observable market prices; hence, the Company may determine the fair value by reviewing equity valuation reports, current financial results, long-term plans of the privately held company, the amount of cash that the privately held company have on-hand, the ability to obtain additional financing and overall market conditions in which the privately held company operate or based on the price observed from the most recent completed financing round. In the fourth quarter of fiscal 2019, management performed its qualitative assessment using the above factors, which indicated the investment's fair value was below its carrying value, and therefore recorded an impairment charges of $250,000 in July 2019 and reduced the carrying value of the Company's non-marketable equity securities to $0 as of July 31, 2019. |
Business Segment and Geographic
Business Segment and Geographic Information | 3 Months Ended |
Oct. 31, 2019 | |
Segment Reporting [Abstract] | |
Business Segment and Geographic Information | Note 11—Business Segment and Geographic Information The Company offers a state-of-the-art digital publishing platform. The Company use this platform to power its consumer-facing mobile personalization app, called Zedge, available in the Google Play store and iTunes, which offers an easy, entertaining and immersive way for end-users to engage with its rich and diverse catalogue of wallpapers, stickers, ringtones, notification sounds and video wallpapers. The Company is evolving by developing new, entertainment-focused apps, that will run on its publishing platform. The Company conducts business as a single operating segment. Net long-lived assets and total assets held outside of the United States, which are located primarily in Norway, were as follows: United States Foreign Total (in thousands) Long-lived assets, net: 31-Oct-19 $ 3,021 $ 655 $ 3,676 31-Jul-19 $ 3,304 $ 212 $ 3,516 Total assets: 31-Oct-19 $ 5,027 $ 3,825 $ 8,851 31-Jul-19 $ 5,508 3,499 $ 9,007 |
Leases
Leases | 3 Months Ended |
Oct. 31, 2019 | |
Leases [Abstract] | |
Leases | Note 12— Leases At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present. Operating leases are included in other assets, accrued expenses and other current liabilities, and other liabilities on the Company's Consolidated Balance Sheets. The Company does not have any finance leases. Leases with a term greater than one year are recognized on the Consolidated Balance Sheet as right-of-use ("ROU") assets, lease obligations and, if applicable, long-term lease obligations in the line items cited above. The Company has elected not to recognize leases with terms of one year or less on the Consolidated Balance Sheets. Lease obligations and their corresponding ROU assets are recorded based on the present value of lease payments over the expected lease term. As the interest rate implicit in lease contracts is typically not readily determinable, the Company utilizes the appropriate incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. The lease term may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. The Company has elected to combine lease components (including land, building or other similar items) and non-lease components (including common area maintenance, maintenance, consumables, or other similar items) as a single component and therefore the non-lease components are included the calculation of the present value of lease payments. The lease expense is recognized over the expected term on a straight-line basis. The Company currently leases 11,578 square feet of office space for its technology development center located in Trondheim, Norway, under a noncancelable lease that expires in 2021. The Company uses these facilities to accommodate its product, design and technology team. Additionally, the Company also has short-term leases for its offices in 1) New York to house its commercial operations including sales, accounting and finance, and business development, 2) Vilnius, Lithuania, a satellite development center and 3) Bodo, Norway that meet short-term lease criteria and are not recognized on the Consolidated Balance Sheets. Most leases include one or more options to renew, and the exercise of these options is at the Company's sole discretion. The Company determined that its options to break or renew would not be reasonably certain in determining the expected lease term, and therefore are not included as part of its ROU assets and lease liabilities. In calculating the present value of the lease payments, the Company has elected to utilize its estimated incremental borrowing rate based on the remaining lease term and not the original lease term. The depreciable life of assets and leasehold improvements are limited by the expected lease term. The elements of lease expense were as follows (in thousands): Three Months Ended October 31, Operating lease cost $ 58 Other lease cost, net (1) 32 Total lease cost $ 90 (1) Other lease cost, net includes short-term lease costs and variable lease costs, which are immaterial. The following table presents the lease-related assets and liabilities recorded on the Consolidated Balance Sheet (in thousands): As of Operating leases: Other assets $ 470 Accrued expenses and other current liabilities $ 207 Other liabilities 242 Total operating lease liabilities $ 449 The following table summarizes the weighted average remaining lease term and weighted average discount rate as of October 31, 2019: As of Weighted average remaining lease term: Operating leases 2.17 years Weighted average discount rate: Operating leases 5.00 % Supplemental cash flow information related to leases was as follows (in thousands): Three Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows used in operating leases $ 71 Future minimum lease payments under non-cancelable leases for the years ending July 31, 2020, 2021, 2022, and thereafter are as follows (in thousands): Operating 2020 $ 134 2021 240 2022 103 Total future minimum lease payments 477 Less imputed interest 28 Total $ 449 As of October 31, 2019, the Company did not have any leases that have not yet commenced that create significant rights and obligations. |
Provision for Income Taxes
Provision for Income Taxes | 3 Months Ended |
Oct. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Provision for income taxes | Note 13—Provision for Income taxes The decrease in the provision for income taxes in the three months ended October 31, 2019 compared to the corresponding period in fiscal 2019 was primarily due to the jurisdiction in which the loss was incurred in the three months ended October 31, 2019 compared to the same period in fiscal 2019 and the Company's ability to utilize net operating losses the Company holds in those jurisdictions. As part of the Tax Cuts and Jobs Act of 2017, Global Intangible Low-Taxed Income inclusion (GILTI) and Foreign Derived Intangible Income (FDII) deduction became effective on January 1, 2018. There was no impact to income tax expense resulting from the GILTI and FDII in light of the Company's available NOL carry forward and its full valuation allowance. |
Recently Issued Accounting Stan
Recently Issued Accounting Standards Not Yet Adopted | 3 Months Ended |
Oct. 31, 2019 | |
Accounting Changes and Error Corrections [Abstract] | |
Recently Issued Accounting Standards Not Yet Adopted | Note 14—Recently Issued Accounting Standards Not Yet Adopted Recently Issued Accounting Standards Not Yet Adopted In August 2018, the FASB issued a new ASU which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The new guidance is effective for annual and interim periods beginning after December 15, 2019, and early adoption is permitted. The Company does not expect that the new standard will have a significant impact on its consolidated financial statements. In August 2018, the FASB issued an ASU which eliminates, adds and modifies certain disclosure requirements for fair value measurements. The update eliminates the requirement to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, and introduces a requirement to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. This guidance will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, and early adoption is permitted. The Company does not expect that the new standard will have a significant impact on its consolidated financial statements. In June 2016, the FASB issued an ASU that changes the impairment model for most financial assets and certain other instruments. For receivables, loans and other instruments, entities will be required to use a new forward-looking "expected loss" model that generally will result in the earlier recognition of allowance for losses. For available-for-sale debt securities with unrealized losses, entities will measure credit losses in a manner similar to current practice, except the losses will be recognized as allowances instead of reductions in the amortized cost of the securities. In addition, an entity will have to disclose significantly more information about allowances, credit quality indicators and past due securities. The new provisions will be applied as a cumulative-effect adjustment to retained earnings. The Company will adopt the new standard on August 1, 2020. The Company is evaluating the impact that the new standard will have on its consolidated financial statements. |
Basis of Presentation and Rec_2
Basis of Presentation and Recently Adopted Accounting Pronouncements (Policies) | 3 Months Ended |
Oct. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited consolidated financial statements of Zedge, Inc. and its subsidiaries, Zedge Europe AS and Zedge Canada, Inc. (dissolved as of May 2, 2019) (the "Company") have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended October 31, 2019 are not necessarily indicative of the results that may be expected for the fiscal year ending July 31, 2020 or any other period. The balance sheet at July 31, 2019 has been derived from the Company's audited financial statements at that date but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. For further information, please refer to the consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended July 31, 2019, as filed with the U.S. Securities and Exchange Commission (the "SEC"). The Company was formerly a majority-owned subsidiary of IDT Corporation ("IDT"). On June 1, 2016, IDT's interest in the Company was spun-off by IDT to IDT's stockholders and the Company became an independent public company through a pro rata distribution of the Company's common stock held by IDT to IDT's stockholders (the "Spin-Off"). The Company's fiscal year ends on July 31 of each calendar year. Each reference below to a fiscal year refers to the fiscal year ending in the calendar year indicated (e.g., fiscal 2020 refers to the fiscal year ending July 31, 2020). |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-02 —Leases The Company adopted this standard in the first quarter of fiscal 2020, effective as of August 1, 2019, using the modified retrospective approach. The adoption of Topic 842 had a material impact on the Company's consolidated balance sheets, but did not impact its consolidated statements of comprehensive loss, consolidated statements of stockholders' equity, or consolidated statements of cash flows. There was no adjustment to beginning retained earnings on August 1, 2019. The Company elected the short-term lease recognition exemption for all leases that qualify. Accordingly, the Company did not recognize ROU assets or lease liabilities for leases that qualify, including leases for existing short-term leases in effect at transition and continue to recognize those lease payments as expenses on the Company's consolidated statements of comprehensive loss on a straight-line basis over the lease term. The Company elected the practical expedient to not separate lease and non-lease components for all its leases. Upon adoption, the Company recognized new ROU assets and lease obligations on the Consolidated Balance Sheet for its operating leases of $538,000 and $512,000, respectively. See Note 12 – Lease for further details. In August 2017, the FASB issued ASU 2017-12 – Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting Hedging Activities |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Oct. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of revenue by type of service | Three Months Ended 2019 2018 (in thousands) Advertising revenue $ 1,667 $ 2,198 Other revenue 366 12 Service revenue - 171 Total Revenue $ 2,033 $ 2,381 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Oct. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of balance of assets and liabilities measured at fair value on a recurring basis | Level 1 (1) Level 2 (2) Level 3 (3) Total (in thousands) 31-Oct-19 Assets: Foreign exchange forward contracts $ - $ - $ - $ - Liabilities: Foreign exchange forward contracts $ - $ 60 $ - $ 60 31-Jul-19 Assets: Foreign exchange forward contracts $ - $ - $ - $ - Liabilities: Foreign exchange forward contracts $ - $ 38 $ - $ 38 (1) – quoted prices in active markets for identical assets or liabilities (2) – observable inputs other than quoted prices in active markets for identical assets and liabilities (3) – no observable pricing inputs in the market |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 3 Months Ended |
Oct. 31, 2019 | |
Schedule of fair value of derivative assets and liabilities | Derivatives Instruments Balance Sheet Location October 31, July 31, (in thousands) Derivatives not designated or not qualifying as hedging instruments: Foreign exchange forward contracts Accrued expenses $ 60 $ 38 |
Schedule of derivative instruments on consolidated statements of comprehensive loss | Amount of Loss Recognized on Derivatives Three Months Ended October 31, Derivatives not designated or not qualifying as Statement of Comprehensive Loss Location 2019 2018 (in thousands) Foreign exchange forward contracts Net loss resulting from foreign exchange transactions $ (74 ) $ (150 ) |
Western Alliance Bank [Member] | |
Schedule of outstanding foreign exchange contracts | Settlement Date U.S. Dollar NOK Nov-19 $ 400,000 3,489,200 Dec-19 400,000 3,556,640 Jan-20 400,000 3,554,680 Feb-20 400,000 3,553,560 Total $ 1,600,000 14,154,080 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 3 Months Ended |
Oct. 31, 2019 | |
Payables and Accruals [Abstract] | |
Schedule of accrued expenses and other liabilities | October 31, July 31, 2019 2019 (in thousands) Accrued vacation $ 475 $ 503 Accrued payroll taxes 269 183 Accrued payroll and bonuses 222 235 Operating lease liability 207 - Accrued severance 90 - Hedge payable 60 38 Accrued professional fees 20 57 Due to artists 59 56 Other 64 100 Total accrued expenses and other current liabilities $ 1,466 $ 1,172 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 3 Months Ended |
Oct. 31, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of weighted-average number of shares calculation of basic and diluted earnings per share | Three Months Ended Oct. 31, 2019 2018 (in thousands) Basic weighted-average number of shares 10,196 10,025 Effect of dilutive securities: Stock options - - Non-vested restricted Class B common stock - - Non-vested deferred stock units - - Diluted weighted-average number of shares 10,196 10,025 |
Schedule of shares excluded from the dilutive earnings per share computations | Three Months Ended Oct. 31, 2019 2018 (in thousands) Stock options 1,231 1,326 Non-vested restricted Class B common stock 154 253 Non-vested deferred stock units 90 - Shares excluded from the calculation of diluted earnings per share 1,475 1,579 |
Business Segment and Geograph_2
Business Segment and Geographic Information (Tables) | 3 Months Ended |
Oct. 31, 2019 | |
Segment Reporting [Abstract] | |
Schedule of net long-lived assets and total assets held outside of the United States | United States Foreign Total (in thousands) Long-lived assets, net: 31-Oct-19 $ 3,021 $ 655 $ 3,676 31-Jul-19 $ 3,304 $ 212 $ 3,516 Total assets: 31-Oct-19 $ 5,027 $ 3,825 $ 8,851 31-Jul-19 $ 5,508 3,499 $ 9,007 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Oct. 31, 2019 | |
Leases [Abstract] | |
Schedule of lease expense | Three Months Ended October 31, Operating lease cost $ 58 Other lease cost, net (1) 32 Total lease cost $ 90 (1) Other lease cost, net includes short-term lease costs and variable lease costs, which are immaterial. |
Schedule of lease-related assets and liabilities | As of Operating leases: Other assets $ 470 Accrued expenses and other current liabilities $ 207 Other liabilities 242 Total operating lease liabilities $ 449 |
Schedule of weighted average remaining lease term and weighted average discount rate | As of Weighted average remaining lease term: Operating leases 2.17 years Weighted average discount rate: Operating leases 5.00 % |
Schedule of cash flow information related to leases | Three Months Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows used in operating leases $ 71 |
Schedule of Future minimum lease payments under non-cancelable leases | Operating 2020 $ 134 2021 240 2022 103 Total future minimum lease payments 477 Less imputed interest 28 Total $ 449 |
Basis of Presentation and Rec_3
Basis of Presentation and Recently Adopted Accounting Pronouncements (Details) - USD ($) | Oct. 31, 2019 | Jul. 31, 2018 |
Basis of Presentation and Recently Adopted Accounting Pronouncements (Textual) | ||
Operating leases right of use asset | $ 538,000 | $ 512,000 |
Revenue (Details)
Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Oct. 31, 2019 | Oct. 31, 2018 | |
Disaggregation of Revenue [Line Items] | ||
Total Revenue | $ 2,033 | $ 2,381 |
Advertising revenue [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenue | 1,667 | 2,198 |
Other revenue [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenue | 366 | 12 |
Service revenue [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenue | $ 171 |
Revenue (Details Textual)
Revenue (Details Textual) - USD ($) | 3 Months Ended | |
Oct. 31, 2019 | Jul. 31, 2019 | |
Revenue (Textual) | ||
Deferred revenue | $ 362,000 | $ 126,000 |
Process subscription payments fee percent | 30.00% | |
Unsatisfied performance obligations, description | The Company also records deferred revenues related to the unsatisfied performance obligations with respect to the subscription revenue. As of October 31, 2019, the Company's deferred revenue balance related to paid subscriptions was approximately $495,000, representing approximately 198,000 active subscribers. As of July 31, 2019, the Company's deferred revenue balance related to paid subscriptions was approximately $362,000, representing approximately 129,000 active subscribers. | |
Advertising revenue, description | Over 80% of the Company's revenue is generated from selling its advertising inventory ("Advertising Revenue") to advertising networks, advertising exchanges, and direct arrangements with advertisers. | |
Revenue from breakage | $ 80,000 | |
Zedge Premium [Member] | ||
Revenue (Textual) | ||
Deferred revenue | 118,000 | $ 155,000 |
Subscription Revenue [Member] | ||
Revenue (Textual) | ||
Deferred revenue | $ 129,000 | |
Minimum [Member] | ||
Revenue (Textual) | ||
Payment terms | 30 days | |
Maximum [Member] | ||
Revenue (Textual) | ||
Payment terms | 60 days |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Oct. 31, 2019 | Jul. 31, 2019 | |
Assets: | |||
Foreign exchange forward contracts | |||
Liabilities: | |||
Foreign exchange forward contracts | 60 | 38 | |
Fair Value on a Recurring Basis [Member] | Level 1 [Member] | |||
Assets: | |||
Foreign exchange forward contracts | [1] | ||
Liabilities: | |||
Foreign exchange forward contracts | [1] | ||
Fair Value on a Recurring Basis [Member] | Level 2 [Member] | |||
Assets: | |||
Foreign exchange forward contracts | [2] | ||
Liabilities: | |||
Foreign exchange forward contracts | [2] | 60 | 38 |
Fair Value on a Recurring Basis [Member] | Level 3 [Member] | |||
Assets: | |||
Foreign exchange forward contracts | [3] | ||
Liabilities: | |||
Foreign exchange forward contracts | [3] | ||
[1] | quoted prices in active markets for identical assets or liabilities | ||
[2] | observable inputs other than quoted prices in active markets for identical assets and liabilities | ||
[3] | no observable pricing inputs in the market |
Derivative Instruments (Details
Derivative Instruments (Details) - Western Alliance Bank [Member] kr in Thousands, $ in Thousands | 3 Months Ended | |
Oct. 31, 2019USD ($) | Oct. 31, 2019NOK (kr) | |
Amount | $ | $ 1,600,000 | |
NOK [Member] | ||
Amount | kr | kr 14,154,080 | |
Nov-19 [Member] | ||
Settlement Date | Nov. 30, 2019 | Nov. 30, 2019 |
Amount | $ | $ 400,000 | |
Nov-19 [Member] | NOK [Member] | ||
Amount | kr | kr 3,489,200 | |
Dec-19 [Member] | ||
Settlement Date | Dec. 31, 2019 | Dec. 31, 2019 |
Amount | $ | $ 400,000 | |
Dec-19 [Member] | NOK [Member] | ||
Amount | kr | kr 3,556,640 | |
Jan-20 [Member] | ||
Settlement Date | Jan. 31, 2020 | Jan. 31, 2020 |
Amount | $ | $ 400,000 | |
Jan-20 [Member] | NOK [Member] | ||
Amount | kr | kr 3,554,680 | |
Feb-20 [Member] | ||
Settlement Date | Feb. 29, 2020 | Feb. 29, 2020 |
Amount | $ | $ 400,000 | |
Feb-20 [Member] | NOK [Member] | ||
Amount | kr | kr 3,553,560 |
Derivative Instruments (Detai_2
Derivative Instruments (Details 1) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Oct. 31, 2019 | Jul. 31, 2018 | |
Derivatives not designated or not qualifying as hedging instruments: | ||
Foreign exchange forward contracts | $ 60 | $ 38 |
Balance Sheet Location | Accrued expenses | Accrued expenses |
Derivative Instruments (Detai_3
Derivative Instruments (Details 2) - USD ($) $ in Thousands | 3 Months Ended | |
Oct. 31, 2019 | Oct. 31, 2018 | |
Derivatives not designated or not qualifying as hedging instruments | ||
Foreign exchange forward contracts | $ (74) | $ (150) |
Statement of Comprehensive Loss Location | Net loss resulting from foreign exchange transactions | Net loss resulting from foreign exchange transactions |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Oct. 31, 2019 | Jul. 31, 2019 |
Payables and Accruals [Abstract] | ||
Accrued vacation | $ 475 | $ 503 |
Accrued payroll taxes | 269 | 183 |
Accrued payroll and bonuses | 222 | 235 |
Operating lease liability | 207 | |
Accrued severance | 90 | |
Hedge payable | 60 | 38 |
Accrued professional fees | 20 | 57 |
Due to artists | 59 | 56 |
Other | 64 | 100 |
Total accrued expenses and other current liabilities | $ 1,466 | $ 1,172 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) | Feb. 07, 2018USD ($)shares | Dec. 08, 2017 | Nov. 07, 2017 | Sep. 30, 2019USD ($)shares | Aug. 28, 2019USD ($)shares | Sep. 30, 2018USD ($)shares | Oct. 18, 2017USD ($)Customershares | Oct. 31, 2019USD ($)$ / sharesshares | Jul. 31, 2019$ / shares |
Stock-Based Compensation (Textual) | |||||||||
Unrecognized compensation expense | $ | $ 139,000 | ||||||||
Vested period, description | The options vest over a three-year period from December 8, 2017 | The DSUs vest over a four-year period from August 1, 2020 | |||||||
Number of non-executive employees, description | 11 of its non-executive employees based in Norway and Lithuania. | ||||||||
Employees [Member] | |||||||||
Stock-Based Compensation (Textual) | |||||||||
Amount of share purchase | $ | $ 22,300 | $ 30,543 | |||||||
Freeform Transaction [Member] | |||||||||
Stock-Based Compensation (Textual) | |||||||||
Unrecognized compensation expense | $ | $ 150,000 | ||||||||
Restricted Stock Award [Member] | |||||||||
Stock-Based Compensation (Textual) | |||||||||
Options granted | shares | 108,553 | ||||||||
Unrecognized compensation expense | $ | 137,000 | ||||||||
Aggregate grant date fair value | $ | $ 330,000 | ||||||||
Stock Options [Member] | |||||||||
Stock-Based Compensation (Textual) | |||||||||
Options to purchase shares of the Company's Class B common stock | shares | 124,435 | ||||||||
Unrecognized compensation expense | $ | $ 159,000 | $ 36,000 | |||||||
Stock, description | The Compensation Committee approved two equity grants of options to purchase an aggregate of 27,493 shares of our Class B common stock to 6 non-executive employees. The options vest over a three-year period. Unrecognized compensation expense related to this grant was an aggregate of $33,000 based on the estimated fair value of the options on the grant dates. | ||||||||
Class B common stock [Member] | |||||||||
Stock-Based Compensation (Textual) | |||||||||
Options granted | shares | 192,953 | ||||||||
Common stock, par value | $ / shares | $ 0.01 | $ 0.01 | |||||||
Shares purchased | shares | 14,114 | 14,137 | |||||||
Deferred Stock Units [Member] | |||||||||
Stock-Based Compensation (Textual) | |||||||||
Options granted | shares | 90,000 | ||||||||
Unrecognized compensation expense | $ | $ 133,000 | ||||||||
2016 Incentive Plan [Member] | Restricted Stock Award [Member] | |||||||||
Stock-Based Compensation (Textual) | |||||||||
Aggregate grant date fair value | $ | $ 369,000 | ||||||||
2016 Incentive Plan [Member] | Class B common stock [Member] | |||||||||
Stock-Based Compensation (Textual) | |||||||||
Options granted | shares | 285,000 | ||||||||
Inclusive of the additional | shares | 350,000 | ||||||||
Number of non-executive employees | Customer | 55 | ||||||||
Incentive plan, description | The Company's Board of Directors amended the 2016 Incentive Plan to increase the number of shares of the Company's Class B common stock available for the grant of awards thereunder by an additional 230,000 shares. This amendment is subject to ratification by the Company's stockholders during Annual Meeting which is scheduled to take place on January 13, 2020. | ||||||||
Aggregate shares | shares | 1,041,000 |
Earnings Per Share (Details)
Earnings Per Share (Details) - shares shares in Thousands | 3 Months Ended | |
Oct. 31, 2019 | Oct. 31, 2018 | |
Earnings Per Share [Abstract] | ||
Basic weighted-average number of shares | 10,196 | 10,025 |
Effect of dilutive securities: | ||
Stock options | ||
Non-vested restricted Class B common stock | ||
Non-vested deferred stock units | ||
Diluted weighted-average number of shares | 10,196 | 10,025 |
Earnings Per Share (Details 1)
Earnings Per Share (Details 1) - shares shares in Thousands | 3 Months Ended | |
Oct. 31, 2019 | Oct. 31, 2018 | |
Shares excluded from the calculation of diluted earnings per share | 1,475 | 1,579 |
Stock options [Member] | ||
Shares excluded from the calculation of diluted earnings per share | 1,231 | 1,326 |
Non-vested restricted Class B common stock [Member] | ||
Shares excluded from the calculation of diluted earnings per share | 154 | 253 |
Non-vested deferred stock units [Member] | ||
Shares excluded from the calculation of diluted earnings per share | 90 |
Contingencies (Details)
Contingencies (Details) $ in Thousands | Mar. 31, 2014USD ($) |
Contingencies (Textual) | |
Lawsuit approximate amount | $ 1,600 |
Revolving Credit Facility (Deta
Revolving Credit Facility (Details) - USD ($) | 1 Months Ended | 3 Months Ended | ||
Dec. 31, 2016 | Nov. 16, 2016 | Sep. 27, 2016 | Oct. 31, 2019 | |
Revolving Credit Facility (Textual) | ||||
Forward contracts, description | There were $1.6 million of outstanding foreign exchange contracts with less than six months tenor under the credit facility, which reduced the available borrowing under the revolving credit facility by $160,000. | |||
Foreign Exchange Contract [Member] | ||||
Revolving Credit Facility (Textual) | ||||
Loan and security agreement with western alliance bank for revolving credit facility amount | $ 5,000,000 | |||
Line of credit facility, borrowing capacity, description | The Company to enter into foreign exchange contracts not to exceed $5.0 million in the aggregate at any point in time under its revolving credit facility. This limit was raised to approximately $6.5 million pursuant to the Loan and Security Modification Agreement dated May 30, 2018. The available borrowing under the revolving credit facility is reduced by an applicable foreign exchange reserve percentage as determined by Western Alliance Bank, in its reasonable discretion from time to time, which was initially set at 10% of the nominal amount of the foreign exchange contracts in effect at the relevant time. | |||
Foreign exchange, description | The applicable foreign exchange reserve percentage was changed so that the reduction of available borrowing for major currency forward contracts of less than six months tenor is set at 10% of the nominal amount of the foreign exchange contracts, and for contracts over six months tenor, 12.5% of the nominal amount of the foreign exchange contracts. | |||
Outstanding foreign exchange contracts amount | $ 2,000,000 | |||
Revolving Credit Facility [Member] | ||||
Revolving Credit Facility (Textual) | ||||
Loan and security agreement with western alliance bank for revolving credit facility amount | $ 2,500,000 | |||
Line of credit facility, borrowing capacity, description | Advances under this facility may not exceed the lesser of $2.5 million or 80% of the Company's eligible accounts receivable, subject to certain concentration limits. | |||
Interest rate, description | The outstanding principal amount bears interest per annum at the greater of 5.0% or the prime rate plus 1.25%. Interest is payable monthly and all outstanding principal and any accrued and unpaid interest is due on the maturity date of September 26, 2020. | |||
Line of credit maturity date | Sep. 26, 2020 | |||
Line of credit facility annual fee | $ 12,500 | |||
Available borrowing reduction | $ 160,000 |
Investment in Privately-Held _2
Investment in Privately-Held Company (Details) - USD ($) | 3 Months Ended | |
Jul. 31, 2019 | Aug. 31, 2018 | |
Investment in Privately-Held Company (Textual) | ||
Investments | $ 250,000 | |
Equity ownership interest | 1.00% | |
Impairment charges | $ 250,000 | |
Non-marketable equity securities | $ 0 |
Business Segment and Geograph_3
Business Segment and Geographic Information (Details) - USD ($) $ in Thousands | Oct. 31, 2019 | Jul. 31, 2019 |
Segment Reporting Information [Line Items] | ||
Long-lived assets, net | $ 3,676 | $ 3,516 |
Total assets | 8,851 | 9,007 |
United States [Member] | ||
Segment Reporting Information [Line Items] | ||
Long-lived assets, net | 3,021 | 3,304 |
Total assets | 5,027 | 5,508 |
Foreign [Member] | ||
Segment Reporting Information [Line Items] | ||
Long-lived assets, net | 655 | 212 |
Total assets | $ 3,825 | $ 3,499 |
Business Segment and Geograph_4
Business Segment and Geographic Information (Details Textual) | 3 Months Ended |
Oct. 31, 2019Segment | |
Business Segment and Geographic Information (Textual) | |
Number of opertating segment | 1 |
Leases (Details)
Leases (Details) $ in Thousands | 3 Months Ended | |
Oct. 31, 2019USD ($) | ||
Leases [Abstract] | ||
Operating lease cost | $ 58 | |
Other lease cost, net | 32 | [1] |
Total lease cost | $ 90 | |
[1] | Other lease cost, net includes short-term lease costs and variable lease costs, which are immaterial |
Leases (Details 1)
Leases (Details 1) $ in Thousands | Oct. 31, 2019USD ($) |
Operating leases: | |
Other assets | $ 470 |
Accrued expenses and other current liabilities | 207 |
Other liabilities | 242 |
Total operating lease liabilities | $ 449 |
Leases (Details 2)
Leases (Details 2) | Oct. 31, 2019 |
Weighted average remaining lease term: | |
Operating leases | 2 years 2 months 1 day |
Weighted average discount rate: | |
Operating leases | 5.00% |
Leases (Details 3)
Leases (Details 3) $ in Thousands | 3 Months Ended |
Oct. 31, 2019USD ($) | |
Cash paid for amounts included in the measurement of lease liabilities: | |
Operating cash flows used in operating leases | $ 71 |
Leases (Details 4)
Leases (Details 4) $ in Thousands | Oct. 31, 2019USD ($) |
Leases [Abstract] | |
2020 | $ 134 |
2021 | 240 |
2022 | 103 |
Total future minimum lease payments | 477 |
Less imputed interest | 28 |
Total | $ 449 |
Leases (Details Textual)
Leases (Details Textual) | 3 Months Ended |
Oct. 31, 2019ft² | |
Leases (Textual) | |
Area of land | 11,578 |
Lease expires | Jul. 31, 2021 |
Lease, description | 1) New York to house its commercial operations including sales, accounting and finance, and business development, 2) Vilnius, Lithuania, a satellite development center and 3) Bodo, Norway that meet short-term lease criteria and are not recognized on the Consolidated Balance Sheets. |