| FAIR VALUE MEASURMENTS | NOTE 5 — FAIR VALUE MEASURMENTS 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 Level 2 Level 3 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 April 30, 2019 and July 31, 2018:
April 30, 2019
Level 1 Level 2 Level 3 Total
Available-for-sale securities: (unaudited, in thousands)
Hedge Funds $ — $ — $ 4,632 $ 4,632
Total $ — $ — $ 4,632 $ 4,632
July 31, 2018
Level 1 Level 2 Level 3 Total
Available-for-sale securities: (unaudited, in thousands)
Marketable Securities $ 10,755 $ 13,946 $ — $ 24,701
Hedge Funds — — 4,218 4,218
Rafael Pharmaceuticals convertible promissory notes — — 7,900 7,900
Total $ 10,755 $ 13,946 $ 12,118 $ 36,819 At April 30, 2019 and July 31, 2018, the
Company did not have any liabilities measured at fair value on a recurring basis. At July 31, 2018, the fair value of the
Rafael Pharmaceuticals Series D Convertible Note, (the “Series D Note”) was classified as Level 3, was estimated based
on a valuation of Rafael Pharmaceuticals by reference to recent transactions in its securities, the Series D 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 Series D Note was converted into shares of Series D Convertible Preferred Stock of Rafael Pharmaceuticals in January
2019. 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).
Three Months Ended Nine Months Ended
2019 2018 2019 2018
(unaudited, in thousands)
Balance, beginning of period $ 4,166 $ 6,300 $ 12,118 $ 6,300
Conversion of Rafael Pharmaceuticals Series D Convertible Note — — (7,900 ) —
Total gains included in earnings 466 — 414 —
Balance, end of period $ 4,632 $ 6,300 $ 4,632 $ 6,300 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 expense
and other current assets, and other current liabilities. Other assets and other liabilities.
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 April 30, 2019 or July 31, 2018. |
