Note 2 - Business Combination |
12 Months Ended |
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Jul. 31, 2026 | |
| Notes to Financial Statements | |
| Business Combination [Text Block] |
Note 2—Business Combination
On May 1, 2026, NRS completed an asset purchase agreement (the “Agreement”) under which it acquired certain assets and assumed certain liabilities of Oncore Digital, Inc. and its wholly owned subsidiaries (“the Acquired Business”). The Acquired Business is a digital media brokerage operation engaged in digital advertising and monetization. In connection with the transaction, the Acquired Business was contributed to a newly formed entity (“NRS OnCore”), in which the sellers retained a 20% noncontrolling interest and NRS obtained an 80% controlling interest. Accordingly, NRS consolidates NRS OnCore under the voting interest model in accordance with ASC 810, Consolidation.
The aggregate purchase consideration was approximately $4.8 million, consisting of $3.3 million in cash and shares of IDT Class B common stock with an aggregate value of $1.5 million, subject to customary post-closing adjustments. In addition, NRS assumed liabilities of $0.1 million in connection with the transaction, resulting in a total acquisition date fair value of $4.9 million.
The consideration also includes contingent earnouts and bonuses with no maximum payment because they are based on the IDT share price and are contingent upon the achievement of revenue, gross profit, and net income milestones, which the Company currently believes are not probable to be achieved. Therefore, no liability was recorded for the contingent earnouts and bonuses. The Company has determined that the acquired set of assets and activities constitute a business and is accounting for the transaction as a business combination under ASC 805, Business Combinations. The acquired assets consist primarily of vendor and customer relationships, and the assumed liabilities include certain operating liabilities.
The total consideration has been allocated entirely to vendor and customer relationships, which represent the sole identified intangible asset and are being amortized over an estimated useful life of years. The acquisition is expected to integrate Oncore Digital’s advertising technology, demand relationships, and publisher network with NRS' screen network and first-party transaction data to create a more comprehensive and unified digital advertising offering.
The Company’s pro forma results of operations as if the acquisition occurred as of August 1, 2023 were not materially different from the actual results of operations. Revenue and earnings of NRS OnCore since the acquisition date included in the consolidated income statements for the reporting period were not material.
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