PURE Bioscience (PURE) 10-Q 14 Dec 17 2018 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Oct. 31, 2017	Dec. 12, 2017
Document And Entity Information
Entity Registrant Name	PURE BIOSCIENCE, INC.
Entity Central Index Key	1,006,028
Document Type	10-Q
Document Period End Date	Oct. 31, 2017
Amendment Flag	false
Current Fiscal Year End Date	--07-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		67,981,861
Trading Symbol	PURE
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2,018

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($)	Oct. 31, 2017	Jul. 31, 2017
Current assets
Cash and cash equivalents	$ 3,229,000	$ 1,640,000
Accounts receivable	143,000	297,000
Inventories, net	274,000	273,000
Restricted cash	75,000	75,000
Prepaid expenses	175,000	174,000
Total current assets	3,896,000	2,459,000
Property, plant and equipment, net	530,000	548,000
Patents, net	781,000	822,000
Total assets	5,207,000	3,829,000
Current liabilities
Accounts payable	425,000	426,000
Accrued liabilities	212,000	249,000
Derivative liabilities		1,853,000
Total current liabilities	637,000	2,528,000
Deferred rent	10,000	11,000
Total liabilities	647,000	2,539,000
Commitments and contingencies
Stockholders' equity
Preferred stock, $0.01 par value: 5,000,000 shares authorized, no shares issued and outstanding
Common stock, $0.01 par value: 100,000,000 shares authorized, 67,981,861 shares issued and outstanding at October 31, 2017, and 63,093,153 shares issued and outstanding at July 31, 2017	680,000	631,000
Additional paid-in capital	115,701,000	110,141,000
Accumulated deficit	(111,821,000)	(109,482,000)
Total stockholders' equity	4,560,000	1,290,000
Total liabilities and stockholders' equity	$ 5,207,000	$ 3,829,000

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Oct. 31, 2017	Jul. 31, 2017
Statement of Financial Position [Abstract]
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued
Preferred stock, shares outstanding
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	67,981,861	63,093,153
Common stock, shares outstanding	67,981,861	63,093,153

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended
	Oct. 31, 2017	Oct. 31, 2016
Income Statement [Abstract]
Net product sales	$ 464,000	$ 531,000
Operating costs and expenses
Cost of goods sold	146,000	265,000
Selling, general and administrative	1,445,000	1,337,000
Research and development	144,000	248,000
Share-based compensation	656,000	278,000
Total operating costs and expenses	2,391,000	2,128,000
Loss from operations	(1,927,000)	(1,597,000)
Other income (expense)
Change in derivative liabilities	459,000	(159,000)
Inducement to exercise warrants	(876,000)
Interest expense, net	(1,000)	(1,000)
Other income, net	6,000	14,000
Total other expense	(412,000)	(146,000)
Net loss	$ (2,339,000)	$ (1,743,000)
Basic and diluted net loss per share	$ (0.04)	$ (0.03)
Shares used in computing basic and diluted net loss per share	64,964,404	64,823,917

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Oct. 31, 2017	Oct. 31, 2016
Operating activities
Net loss	$ (2,339,000)	$ (1,743,000)
Adjustments to reconcile net loss to net cash used in operating activities:
Share-based compensation	656,000	278,000
Amortization of stock issued for services	39,000	36,000
Depreciation and amortization	71,000	65,000
Change in fair value of derivative liability	(459,000)	159,000
Inducement to exercise warrants	876,000
Changes in operating assets and liabilities:
Accounts receivable	154,000	117,000
Inventories	(1,000)	2,000
Prepaid expenses	11,000	(108,000)
Accounts payable and accrued liabilities	(38,000)	147,000
Deferred rent	(1,000)
Net cash used in operating activities	(1,031,000)	(1,047,000)
Investing activities
Investment in patents	(3,000)	(7,000)
Purchases of property, plant and equipment	(9,000)	(76,000)
Net cash used in investing activities	(12,000)	(83,000)
Financing activities
Net proceeds from the exercise of warrants	2,632,000
Net cash provided by financing activities	2,632,000	0
Net (decrease) increase in cash and cash equivalents	1,589,000	(1,130,000)
Cash and cash equivalents at beginning of period	1,640,000	5,194,000
Cash and cash equivalents at end of period	3,229,000	4,064,000
Supplemental disclosure of cash flow information
Cash paid for taxes		2,000
Warrant liabilities removed due to settlements	1,394,000
Common stock issued for prepaid services	$ 51,000

Basis of Presentation

Basis of Presentation	3 Months Ended
	Oct. 31, 2017
Accounting Policies [Abstract]
Basis of Presentation	1. Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the consolidated accounts of PURE Bioscience, Inc. and its wholly owned subsidiary, ETI H2O Inc., a Nevada corporation. ETI H2O, Inc. currently has no business operations and no material assets or liabilities and there have been no significant transactions related to ETI H2O, Inc. during the periods presented in the condensed consolidated financial statements. All inter-company balances and transactions have been eliminated. All references to “PURE,” “we,” “our,” “us” and the “Company” refer to PURE Bioscience, Inc. and our wholly owned subsidiary. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP, for interim financial information pursuant to the instructions to Form 10-Q and Article 10/Rule 8-03 of Regulation S-X. Accordingly, they do not include all of the information and disclosures required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the quarter ended October 31, 2017 are not necessarily indicative of the results that may be expected for other quarters or the year ending July 31, 2018. The July 31, 2017 balance sheet was derived from audited financial statements but does not include all disclosures required by GAAP and included in our Annual Report on Form 10-K. For more complete information, these unaudited financial statements and the notes thereto should be read in conjunction with the audited financial statements for the year ended July 31, 2017 included in our Annual Report on Form 10-K covering such period filed with the Securities and Exchange Commission, or SEC, on October 26, 2017. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and the accompanying notes. Actual results could differ from those estimates.

Liquidity & Going Concern Uncer

Liquidity & Going Concern Uncertainty	3 Months Ended
	Oct. 31, 2017
Liquidity Going Concern Uncertainty
Liquidity & Going Concern Uncertainty	2. Liquidity & Going Concern Uncertainty These unaudited condensed consolidated financial statements have been prepared and presented on a basis assuming we will continue as a going concern. The factors below raise substantial doubt about our ability to continue as a going concern. The financial statements do not include any adjustments that might be necessary from the outcome of this uncertainty. Since our inception, we have financed our operations primarily through public and private offerings of securities, debt financing, and revenue from product sales and license agreements. We have a history of recurring losses, and as of October 31, 2017, we have incurred a cumulative net loss of $111,821,000. We do not have, and may never have, significant cash inflows from product sales or from other sources of revenue to fund our operations. As of October 31, 2017, we had $3,229,000 in cash and cash equivalents, and $425,000 of accounts payable. As of October 31, 2017, we have no long-term debt. We do not currently believe that our existing cash resources are sufficient to meet our anticipated needs over the next twelve months from the date hereof. Our future capital requirements depend on numerous forward-looking factors. These factors may include, but are not limited to, the following: the acceptance of, and demand for, our products; our success and the success of our partners in selling our products; our success and the success of our partners in obtaining regulatory approvals to sell our products; the costs of further developing our existing products and technologies; the extent to which we invest in new product and technology development; and the costs associated with the continued operation, and any future growth, of our business. The outcome of these and other forward-looking factors will substantially affect our liquidity and capital resources. Until we can generate significant cash from operations, we expect to continue to fund our operations with the proceeds of offerings of our equity and debt securities. However, we cannot assure you that additional financing will be available when needed or that, if available, financing will be obtained on terms favorable to us or to our stockholders. If we raise additional funds from the issuance of equity securities, substantial dilution to our existing stockholders would likely result. If we raise additional funds by incurring debt financing, the terms of the debt may involve significant cash payment obligations as well as covenants and specific financial ratios that may restrict our ability to operate our business. Further, any contracts or license arrangements we enter into to raise funds may require us to relinquish our rights to our products or technology, and we cannot assure you that we will be able to enter into any such contracts or license arrangements on acceptable terms, or at all. Having insufficient funds may require us to delay or scale back our marketing, distribution and other commercialization activities or cease our operations altogether. We do not have any unused credit facilities or other sources of capital available to us at this time. We intend to secure additional working capital through sales of additional debt or equity securities. Our intended financing initiatives are subject to risk, and we cannot provide any assurance about the availability or terms of these or any future financings. If we are unable to obtain sufficient capital, it will have a material adverse effect on our business and operations. It could cause us to fail to execute our business plan, fail to take advantage of future opportunities, or fail to respond to competitive pressures or customer requirements. It also may require us to significantly modify our business model and operations to reduce spending to a sustainable level, which may include delaying, scaling back or eliminating some or all of our ongoing and planned investments in corporate infrastructure, research and development projects, regulatory submissions, business development initiatives, and sales and marketing activities, among other investments. If adequate funds are not available when needed, we may be required to reduce or cease operations altogether. The condensed consolidated financial statements do not include any adjustment relating to recoverability or classification of recorded assets and classification of recorded liabilities.

Net Loss Per Share

Net Loss Per Share	3 Months Ended
	Oct. 31, 2017
Earnings Per Share [Abstract]
Net Loss Per Share	3. Net Loss Per Share Basic net loss per common share is computed as net loss divided by the weighted average number of common shares outstanding for the period. Our diluted net loss per common share is the same as our basic net loss per common share because we incurred a net loss during each period presented, and the potentially dilutive securities from the assumed exercise of all outstanding stock options, restricted stock units, and warrants would have an anti-dilutive effect. As of October 31, 2017 and 2016, the number of shares issuable upon the exercise of stock options, the vesting of restricted stock units, and the exercise of warrants, none of which are included in the computation of basic net loss per common share, was 11,680,939 and 10,719,394, respectively.

Comprehensive Loss

Comprehensive Loss	3 Months Ended
	Oct. 31, 2017
Equity [Abstract]
Comprehensive Loss	4. Comprehensive Loss Comprehensive loss is defined as the change in equity during a period from transactions and other events and circumstances from non-owner sources, including unrealized gains and losses on marketable securities and foreign currency translation adjustments. For the three months ended October 31, 2017 and 2016, our comprehensive loss consisted only of net loss.

Inventory

Inventory	3 Months Ended
	Oct. 31, 2017
Inventory Disclosure [Abstract]
Inventory	5. Inventory Inventories are stated at the lower of cost or net realizable value, and net of a valuation allowance for potential excess or obsolete material. Cost is determined using the average cost method. Depreciation related to manufacturing is systematically allocated to inventory produced, and expensed through cost of goods sold at the time inventory is sold. Inventories consist of the following: October 31, 2017 July 31, 2017 Raw materials $ 80,000 $ 82,000 Finished goods 194,000 191,000 $ 274,000 $ 273,000

Impairment of Long-Lived Assets

Impairment of Long-Lived Assets	3 Months Ended
	Oct. 31, 2017
Impairment Of Long-lived Assets
Impairment of Long-Lived Assets	6. Impairment of Long-Lived Assets In accordance with GAAP, if indicators of impairment exist, we assess the recoverability of the affected long-lived assets by determining whether the carrying value of such assets can be recovered through undiscounted future operating cash flows. If impairment is indicated, we measure the amount of such impairment by comparing the carrying value of the asset to the fair value of the asset and we record the impairment as a reduction in the carrying value of the related asset and a charge to operating results. Estimating the undiscounted future cash flows associated with long-lived assets requires judgment, and assumptions could differ materially from actual results. During the three months ended October 31, 2017, no impairment of long-lived assets was indicated or recorded.

Fair Value of Financial Instrum

Fair Value of Financial Instruments	3 Months Ended
	Oct. 31, 2017
Fair Value Disclosures [Abstract]
Fair Value of Financial Instruments	7. Fair Value of Financial Instruments Fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the authoritative guidance establishes a three-tier value hierarchy, which prioritizes the inputs used in measuring fair value as follows: ● Level 1 – Quoted prices in active markets for identical assets or liabilities. ● Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. ● Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. In connection with the October and November 2015 Private Placements, we issued warrants with derivative features. These instruments were accounted for as derivative liabilities (See Note 8 to these condensed consolidated financial statements). We used Level 3 inputs for the valuation methodology of the derivative liabilities. The estimated fair values were computed using a Monte Carlo option pricing model based on various assumptions. Our derivative liabilities are adjusted to reflect estimated fair value at each period end, with any decrease or increase in the estimated fair value being recorded in other income or expense accordingly, as adjustments to the fair value of the derivative liabilities. Various factors are considered in the pricing models we use to value the warrants, including the Company’s current stock price, the remaining life of the warrants, the volatility of the Company’s stock price, and the risk free interest rate. The following table provides a reconciliation of the beginning and ending balances of the derivative liabilities for the three months ended October 31, 2017: Fair Value of Significant Unobservable Inputs (Level 3) Warrant Liabilities Balance at July 31, 2017 $ 1,853,000 Issuances — Settlement of warrant liabilities (1,394,000 ) Adjustments to estimated fair value (459,000 ) Balance at October 31, 2017 $ —

Derivative Liabilities

Derivative Liabilities	3 Months Ended
	Oct. 31, 2017
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Derivative Liabilities	8. Derivative Liabilities On October 23, 2015, we completed a first closing of a private placement financing (the “2015 Private Placement Financing”), where we issued, among other securities, a warrant to purchase up to an aggregate of 6,666,666 shares of common stock with a term of five years and a warrant to purchase up to an aggregate of 8,666,666 shares of common stock with a term of six months. On November 23, 2015, we completed a second and final closing of the 2015 Private Placement Financing, where we issued, among other securities, a warrant to purchase up to an aggregate of 2,222,217 shares of common stock with a term of five years and a warrant to purchase up to an aggregate of 2,820,670 shares of common stock with a term of six months. We accounted for the combined 20,376,219 warrants issued in connection with the 2015 Private Placement Financing in accordance with the accounting guidance for derivatives. The applicable accounting guidance sets forth a two-step model to be applied in determining whether a financial instrument is indexed to an entity’s own stock, which would qualify such financial instruments for a scope exception. This scope exception specifies that a contract that would otherwise meet the definition of a derivative financial instrument would not be considered as such if the contract is both (i) indexed to the entity’s own stock and (ii) classified in the stockholders’ equity section of the entity’s balance sheet. We determined the warrants were ineligible for equity classification due to anti-dilution provisions set forth therein. During the fiscal year ended July 31, 2016, (i) all 2,820,670 of the six-month warrants issued in the second and final closing were exercised, (ii) the six-month warrants issued in the first closing expired and (iii) the five-year warrants issued in the first closing were cancelled. On September 25, 2017, we completed the first closing of a tender offer to amend and exercise outstanding warrants to purchase shares of our common stock. As a result, 1,599,135 warrants issued in connection with the 2015 Private Placement Financing were exercised. In addition, there was a net exercise on 118,057 warrants which resulted in the issuance of 63,811 shares of our common stock. The net exercised warrants were issued in connection with the 2015 Private Placement Financing. The change in fair value of the warrant liabilities on September 25, 2017 was recorded as a change in derivative liabilities in the condensed consolidated statements of operations. The fair value on the exercise date was returned to additional paid in capital and is reflected in the settlement of warrant liability section on the table in Note 8. The following assumptions were used as inputs to the fair value model at September 25, 2017: stock price of $1.00 per share and a warrant exercise price of $0.45 per share as of the valuation date; our historical stock price volatility of 70.00%; risk free interest rate on U.S. treasury notes of 1.6%; warrant expiration of 3.2 years (See Note 10 to these condensed consolidated financial statements). On October 10, 2017, we completed a second and final closing of a tender offer to amend and exercise outstanding warrants to purchase shares of our common stock. As a result, 268,909 warrants issued in connection with the 2015 Private Placement Financing were exercised. The change in fair value of the warrant liabilities on October 10, 2017 was recorded as a change in derivative liabilities in the condensed consolidated statements of operations. The fair value on the exercise date was returned to additional paid in capital and is reflected in the settlement of warrant liability section on the table in Note 8. The following assumptions were used as inputs to the fair value model at October 10, 2017: stock price of $1.03 per share and a warrant exercise price of $0.45 per share as of the valuation date; our historical stock price volatility of 70.00%; risk free interest rate on U.S. treasury notes of 1.6%; warrant expiration of 3.1 years (See Note 10 to these condensed consolidated financial statements). During the three months ended October 31, 2017, all warrants containing derivative features issued in connection with the 2015 Private Placement Financing were exercised. As of October 31, 2017, the total value of the derivative liabilities was zero. The change in fair value of the warrant liabilities for the three months ended October 31, 2017 and 2016, was a decrease of $459,000 and an increase of $159,000, respectively, which was recorded as a change in derivative liabilities in the condensed consolidated statements of operations.

Stockholders' Equity

Stockholders' Equity	3 Months Ended
	Oct. 31, 2017
Equity [Abstract]
Stockholders' Equity	9. Stockholders’ Equity Preferred Stock As of October 31, 2017, the Company’s Board of Directors is authorized to issue 5,000,000 shares of preferred stock with a par value of $0.01 per share, in one or more series. As of October 31, 2017 and July 31, 2017, there were no shares of preferred stock issued and outstanding. Common Stock As of October 31, 2017, 100,000,000 shares of common stock with a par value of $0.01 per share are authorized for issuance. Schedule TO and Warrant Exercises On October 10, 2017, we closed a tender offer to amend and exercise outstanding warrants to purchase shares of our Common Stock. Specifically, we filed a Schedule TO with the SEC on August 25, 2017 offering to (i) reduce the exercise price of the warrants to purchase 4,104,980 shares of Common Stock issued to investors participating in our private placement financing completed on August 29, 2014, as amended (the “2014 Warrants”) from $0.75 per share to $0.60 per share of Common Stock in cash, (ii) reduce the exercise price of outstanding warrants to purchase 1,986,101 shares of Common Stock issued to investors participating in our private placement financing completed on November 23, 2015 (the “2015 Warrants”) from $0.45 per share to $0.40 per share of Common Stock in cash, (iii) reduce the exercise price of the outstanding warrants to purchase 1,572,941 shares of Common Stock issued to investors participating in our private placement financing completed on January 23, 2017 (the “2017 Warrants”, together with the 2014 Warrants and 2015 Warrants, the “Original Warrants”) from $1.25 per share to $0.85 per share of Common Stock in cash, (iv) shorten the exercise period of the Original Warrants so that they expired concurrently with the expiration of the Offer to Amend and Exercise at 5:00 p.m. (Pacific Time) on September 25, 2017 (“Expiration Date”) unless extended until the Subsequent Expiration Date (as defined below), (v) delete the cashless exercise provisions in the Original Warrants and (vi) delete the price-based anti-dilution provisions contained in the 2015 Warrants. Additionally, we requested the holders of a majority of the shares issuable upon exercise of the 2014 Warrants (the “2014 Requisite Majority”), 2015 Warrants (the “2015 Requisite Majority”) and 2017 Warrants (the “2017 Requisite Majority”) to approve an amendment of all of the outstanding 2014 Warrants, 2015 Warrants and 2017 Warrants, respectively, to amend such Original Warrants in the same manner as set forth above (the “Aggregate Warrant Amendment”), except the Expiration Date would be extended until October 10, 2017 (the “Subsequent Expiration Date”) if such Aggregate Warrant Amendment was approved with respect to such class of Original Warrants. The 2015 Requisite Majority approved an amendment of all of the outstanding 2015 Warrants and holders of 2015 Warrants had until the Subsequent Expiration Date to exercise their 2015 Warrants (the “Subsequent Offer Period”). The Offer to Amend and Exercise with respect to the 2014 Warrants and 2017 Warrants expired on the Expiration Date of September 25, 2017. As of September 25, 2017, 1,491,649 shares of Common Stock were issued upon exercise of 2014 Warrants, 1,599,135 shares of Common Stock were issued upon exercise of 2015 Warrants and 1,396,470 shares of Common Stock were issued upon exercise of 2017 Warrants, for aggregate gross proceeds to us of approximately $2,720,000. During the Subsequent Offer Period, 2015 Warrants to purchase 268,909 shares of Common Stock were exercised for aggregate gross proceeds to us of approximately $107,000. 2014 Warrants to purchase 2,533,331 shares of Common Stock and 2017 Warrants to purchase 176,471 shares of Common Stock at exercise prices of $0.75 per share and $1.25 per share, respectively, continue to remain outstanding and no 2015 Warrants remain outstanding. Original Warrants (including 2015 Warrants exercised during the Subsequent Offer Period) to purchase an aggregate of 4,756,163 shares of Common Stock were tendered and exercised in the Offer to Amend and Exercise for aggregate net proceeds to us of approximately $2,632,000. Garden State Securities Inc. assisted the Company as warrant solicitation agents with respect to the 2017 Warrants. Due to the reduction in exercise price for the Original Warrants issued in connection with the Schedule TO, we determined it was appropriate to record $876,000 of expense in the condensed consolidated statement of operations for the inducement to exercise the Original Warrants. Additional Warrant Exercise During the three months ended October 31, 2017, there was a net exercise on 198,057 warrants which resulted in the issuance of 82,545 shares of our common stock. As these warrants were net exercised, as permitted under the respective warrant agreement, we did not receive any cash proceeds. The warrants were issued in connection with the Original Warrants discussed above. Other Activity During the three months ended October 31, 2017, we entered into a two-year service agreement for business development services. In accordance with the agreement we issued 50,000 shares of common stock, with a value of $51,000. The value was capitalized to prepaid expense and is being amortized over the term of the agreement. During the three months ended October 31, 2017, we recognized $3,000 of expense related to these services. On April 13, 2016, we entered into a two-year service agreement for general financial advisory services. In accordance with the agreement we issued 250,000 shares of common stock, with a value of $290,000. The value was capitalized to prepaid expense and is being amortized over the term of the agreement. During the three months ended October 31, 2017 and 2016, we recognized $36,000 of expense related to these services.

Share-Based Compensation

Share-Based Compensation	3 Months Ended
	Oct. 31, 2017
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Share-Based Compensation	10. Share-Based Compensation Restricted Stock Units During the three months ended October 31, 2017, the Compensation Committee of the Board of Directors authorized the issuance of 150,000 Restricted Stock Units (“RSUs”) to Janet Risi Field, a member of our board of directors. 50% of the RSUs will vest on the earlier of the date of our annual meeting of stockholders held in 2018 or January 15, 2018 and 50% of the RSUs will vest on the earlier of the date of our annual meeting of stockholders held in 2019 or January 15, 2019. Each RSU represents the right to receive one share of common stock, issuable at the time the RSU subsequently settles, as set forth in the Restricted Stock Unit Agreement. During the three months ended October 31, 2017, we issued 300,000 RSUs to purchase common stock to third-party consultants for business development services. The RSUs vest based on performance conditions if sales milestones are achieved. We currently do not expect the 300,000 RSUs to vest. Of the 2,485,000 RSUs outstanding, we currently expect 1,300,000 to vest. As of October 31, 2017, there was $1,278,000 of unrecognized non-cash compensation cost related to RSUs we expect to vest, which will be recognized over a weighted average period of 3.02 years. For the three months ended October 31, 2017 and 2016, share-based compensation expense for RSUs was $312,000 and $52,000, respectively. Stock Option Plans In February 2016, we amended and restated our 2007 Equity Incentive Plan, or the Plan, to, among other changes, increase the number of shares of common stock issuable under the Plan by 4,000,000 shares and extend the term of the Plan until February 4, 2026. The Plan provides for the grant of incentive and non-qualified stock options, as well as other share-based payment awards, to our employees, directors, consultants and advisors. These awards have up to a 10-year contractual life and are subject to various vesting periods, as determined by the Compensation Committee of the Board of Directors. Our 2007 Equity Incentive Plan is the only active plan pursuant to which options to acquire common stock or restricted stock awards can be granted and are currently outstanding. As of October 31, 2017, there were approximately 561,000 shares available for issuance under the Plan. During the three months ended October 31, 2017, the Compensation Committee of the Board of Directors authorized the issuance of 200,000 options to purchase common stock to Janet Risi Field, a member of our board of directors. 50% of the options will vest on the earlier of the date of our annual meeting of stockholders held in 2018 or January 15, 2018 and 50% of the options will vest on the earlier of the date of our annual meeting of stockholders held in 2019 or January 15, 2019. During the three months ended October 31, 2016, we issued 100,000 options to purchase common stock to a member of our Scientific Advisory Board. The options vested quarterly over one year and carry a five-year term. None of the options granted to our directors were granted pursuant to any compensatory, bonus, or similar plan maintained or otherwise sponsored by the Company. A summary of our stock option activity is as follows: Shares Weighted- Average Exercise Price Aggregate Intrinsic Value Outstanding at July 31, 2017 5,759,843 $ 1.25 $ 1,120,000 Granted 200,000 $ 1.21 Exercised — $ — Cancelled — $ — Outstanding at October 31, 2017 5,959,843 $ 1.25 $ 544,000 The weighted-average remaining contractual term of options outstanding at October 31, 2017 was 5.55 years. At October 31, 2017, options to purchase 3,163,593 shares of common stock were exercisable. These options had a weighted-average exercise price of $1.35, an aggregate intrinsic value of $432,000, and a weighted average remaining contractual term of 3.15 years. The weighted average grant date fair value for options granted during the three months ended October 31, 2017 was $0.85. The total unrecognized compensation cost related to unvested stock option grants as of October 31, 2017 was approximately $1,675,000 and the weighted average period over which these grants are expected to vest is 3.04 years. For the three months ended October 31, 2017 and 2016, share-based compensation expense for stock options was $395,000 and $226,000 respectively. We use the Black-Scholes valuation model to calculate the fair value of stock options. Stock-based compensation expense is recognized over the vesting period using the straight-line method. The fair value of stock options was estimated at the grant date using the following weighted average assumptions: For the three months ended October 31, 2017 2016 Volatility 86.98 % 74.71 % Risk-free interest rate 1.80 % 0.93 % Dividend yield 0.0 % 0.0 % Expected life 5.45 years 2.81 years Volatility is the measure by which our stock price is expected to fluctuate during the expected term of an option. Volatility is derived from the historical daily change in the market price of our common stock, as we believe that historical volatility is the best indicator of future volatility. The risk-free interest rates used in the Black-Scholes calculations are based on the prevailing U.S. Treasury yield as determined by the U.S. Federal Reserve. We have never paid dividends on our common stock and do not anticipate paying dividends on our common stock in the foreseeable future. Accordingly, we have assumed no dividend yield for purposes of estimating the fair value of our share-based compensation. The weighted average expected life of options was estimated using the average of the contractual term and the weighted average vesting term of the options. Certain options granted to consultants are subject to variable accounting treatment and are required to be revalued until vested. Stock-based compensation expense is based on awards ultimately expected to vest, and therefore is reduced by expected forfeitures. We have not had significant forfeitures of stock options granted to employees and directors as a significant number of our historical stock option grants were fully vested at issuance or were issued with short vesting provisions. Therefore, we have estimated the forfeiture rate of our outstanding stock options as zero.

Recent Accounting Pronouncement

Recent Accounting Pronouncements	3 Months Ended
	Oct. 31, 2017
Accounting Changes and Error Corrections [Abstract]
Recent Accounting Pronouncements	11. Recent Accounting Pronouncements In July 2017, the Financial Accounting Standards Board (“FASB”) issued a two-part Accounting Standards Update (“ASU”) No. 2017-11, I. Accounting for Certain Financial Instruments With Down Round Features and II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests With a Scope Exception (“ASU 2017-11”). ASU 2017-11 amends guidance in FASB ASC 260, Earnings Per Share, FASB ASC 480, Distinguishing Liabilities from Equity, and FASB ASC 815, Derivatives and Hedging. The amendments in Part I of ASU 2017-11 change the classification analysis of certain equity-linked financial instruments (or embedded features) with down round features. The amendments in Part II of ASU 2017-11 re-characterize the indefinite deferral of certain provisions of Topic 480 that now are presented as pending content in the Codification, to a scope exception. Those amendments do not have an accounting effect. ASU 2017-11 is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. We are evaluating the effect that this update will have on our consolidated financial statements and related disclosures. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606)

Subsequent Events

Subsequent Events	3 Months Ended
	Oct. 31, 2017
Subsequent Events [Abstract]
Subsequent Events	12. Subsequent Events Subsequent to October 31, 2017, we wrote-off $26,000 of inventory destroyed in a third-party warehouse fire. We are currently exploring options to recover our loss.

Inventory (Tables)

Inventory (Tables)	3 Months Ended
	Oct. 31, 2017
Inventory Disclosure [Abstract]
Schedule of Inventories	Inventories consist of the following: October 31, 2017 July 31, 2017 Raw materials $ 80,000 $ 82,000 Finished goods 194,000 191,000 $ 274,000 $ 273,000

Fair Value of Financial Instr19

Fair Value of Financial Instruments (Tables)	3 Months Ended
	Oct. 31, 2017
Fair Value Disclosures [Abstract]
Schedule of Derivative Liabilities at Fair Value	The following table provides a reconciliation of the beginning and ending balances of the derivative liabilities for the three months ended October 31, 2017: Fair Value of Significant Unobservable Inputs (Level 3) Warrant Liabilities Balance at July 31, 2017 $ 1,853,000 Issuances — Settlement of warrant liabilities (1,394,000 ) Adjustments to estimated fair value (459,000 ) Balance at October 31, 2017 $ —

Share-Based Compensation (Table

Share-Based Compensation (Tables)	3 Months Ended
	Oct. 31, 2017
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Schedule of Stock Option Activity	A summary of our stock option activity is as follows: Shares Weighted- Average Exercise Price Aggregate Intrinsic Value Outstanding at July 31, 2017 5,759,843 $ 1.25 $ 1,120,000 Granted 200,000 $ 1.21 Exercised — $ — Cancelled — $ — Outstanding at October 31, 2017 5,959,843 $ 1.25 $ 544,000
Schedule of Fair Value Assumptions	The fair value of stock options was estimated at the grant date using the following weighted average assumptions: For the three months ended October 31, 2017 2016 Volatility 86.98 % 74.71 % Risk-free interest rate 1.80 % 0.93 % Dividend yield 0.0 % 0.0 % Expected life 5.45 years 2.81 years

Liquidity & Going Concern Unc21

Liquidity & Going Concern Uncertainty (Details Narrative) - USD ($)	Oct. 31, 2017	Jul. 31, 2017	Oct. 31, 2016	Jul. 31, 2016
Liquidity Going Concern Uncertainty
Cumulative net loss	$ 111,821,000	$ 109,482,000
Cash and cash equivalents	3,229,000	1,640,000	$ 4,064,000	$ 5,194,000
Accounts payable	$ 425,000	$ 426,000

Net Loss Per Share (Details Nar

Net Loss Per Share (Details Narrative) - shares	3 Months Ended
	Oct. 31, 2017	Oct. 31, 2016
Earnings Per Share [Abstract]
Number of antidilutive shares	11,680,939	10,719,394

Inventory - Schedule of Invento

Inventory - Schedule of Inventories (Details) - USD ($)	Oct. 31, 2017	Jul. 31, 2017
Inventory Disclosure [Abstract]
Raw materials	$ 80,000	$ 82,000
Finished goods	194,000	191,000
Inventory, net, total	$ 274,000	$ 273,000

Impairment of Long-Lived Asse24

Impairment of Long-Lived Assets (Details Narrative)	3 Months Ended
	Oct. 31, 2017USD ($)
Impairment Of Long-lived Assets
Impairment of long-lived assets

Fair Value of Financial Instr25

Fair Value of Financial Instruments - Schedule of Derivative Liabilities at Fair Value (Details) - Warrant Liability [Member]	3 Months Ended
	Oct. 31, 2017USD ($)
Beginning balance	$ 1,853,000
Issuances
Settlement of warrant liabilities	(1,394,000)
Adjustments to estimated fair value	(459,000)
Ending balance

Derivative Liabilities (Details

Derivative Liabilities (Details Narrative) - USD ($)	Oct. 10, 2017	Sep. 25, 2017	Nov. 23, 2015	Oct. 23, 2015	Oct. 31, 2017	Oct. 31, 2016	Jul. 31, 2017	Jul. 31, 2016
Derivative liabilities							$ 1,853,000
Change in fair value of warrant liability					$ 459,000	$ 159,000
2015 Private Placement Financing [Member]
Number of warrants to purchase common stock	268,909	1,599,135
Number of warrants issued					20,376,219
Number of warrants exercise during the period		118,057
Issuance of share of common stock		63,811
Stock price	$ 1.03	$ 1
Warrant expiration warrant exercise price	$ 0.45	$ 0.45
Fair value assumption of historical stock price volatility	70.00%	70.00%
Fair value assumption of risk free interest rate	1.60%	1.60%
Fair value assumption of warrant expiration term	3 years 1 month 6 days	3 years 2 months 12 days
2015 Private Placement Financing [Member] | Six-Month Warrant [Member]
Number of warrants issued								2,820,670
2015 Private Placement Financing [Member] | October Closing Date [Member] | Five Years [Member]
Number of warrants to purchase common stock				6,666,666
Warrant term				5 years
2015 Private Placement Financing [Member] | October Closing Date [Member] | Six Months [Member]
Number of warrants to purchase common stock				8,666,666
Warrant term				6 months
2015 Private Placement Financing [Member] | November Closing Date [Member] | Five Years [Member]
Number of warrants to purchase common stock			2,222,217
Warrant term			5 years
2015 Private Placement Financing [Member] | November Closing Date [Member] | Six Months [Member]
Number of warrants to purchase common stock			2,820,670
Warrant term			6 months

Stockholders' Equity (Details N

Stockholders' Equity (Details Narrative) - USD ($)	Oct. 31, 2017	Sep. 25, 2017	Apr. 13, 2016	Oct. 31, 2017	Oct. 31, 2016	Jul. 31, 2017	Jan. 23, 2017	Nov. 23, 2015	Aug. 29, 2014
Preferred stock shares authorized	5,000,000			5,000,000		5,000,000
Preferred stock shares par value	$ 0.01			$ 0.01		$ 0.01
Preferred stock shares issued
Preferred stock shares outstanding
Common stock shares authorized	100,000,000			100,000,000		100,000,000
Common stock shares par value	$ 0.01			$ 0.01		$ 0.01
Inducement to exercise warrants				$ 876,000
Two Year Service Agreement [Member]
Number of common shares issued for services	50,000
Value of shares issued for services	$ 51,000			3,000
Two Year Service Agreement One [Member]
Number of common shares issued for services			250,000
Value of shares issued for services			$ 290,000	$ 36,000	$ 36,000
2014 Warrant [Member]
Number of warrants to purchase common stock	2,533,331	1,491,649		2,533,331					4,104,980
Shares issued price per share	$ 0.75			$ 0.75
2014 Warrant [Member] | Maximum [Member]
Shares issued price per share									$ 0.75
2014 Warrant [Member] | Minimum [Member]
Shares issued price per share									$ 0.60
2015 Warrant [Member]
Number of warrants to purchase common stock								1,986,101
2015 Warrant [Member] | Maximum [Member]
Shares issued price per share								$ 0.45
2015 Warrant [Member] | Minimum [Member]
Shares issued price per share								$ 0.40
2017 Warrant [Member]
Number of warrants to purchase common stock	176,471	1,396,470		176,471			1,572,941
Shares issued price per share	$ 1.25			$ 1.25
Proceeds from issuance of common shares		$ 2,720,000
2017 Warrant [Member] | Maximum [Member]
Shares issued price per share							$ 1.25
2017 Warrant [Member] | Minimum [Member]
Shares issued price per share							$ 0.85
2014 Warrant and 2017 Warrant [Member]
Warrant expiration date				Sep. 25, 2017
2015 Warrant [Member]
Number of warrants to purchase common stock	268,909	1,599,135		268,909
Proceeds from issuance of common shares				$ 107,000
2015 Warrant [Member] | Garden State Securities Inc [Member]
Number of warrants to purchase common stock	4,756,163			4,756,163
Proceeds from issuance of common shares				$ 2,632,000
Warrant [Member]
Number of warrants exercise during the period				198,057
Issuance of share of common stock				82,545

Share-Based Compensation (Detai

Share-Based Compensation (Details Narrative) - USD ($)	1 Months Ended	3 Months Ended
	Feb. 29, 2016	Oct. 31, 2017	Oct. 31, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options issued to purchase common stock		200,000
2007 Equity Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock shares increase under the plan	4,000,000
Share-based compensation, expiration date	Feb. 4, 2026
Contractual life vesting periods	10 years
Number of shares available for issuance under the plan		561,000
Stock Option Plans [Member] | Scientific Advisory Board [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options issued to purchase common stock			100,000
Option vested description			The options vested quarterly over one year and carry a five-year term.
Board of Directors [Member] | Stock Option Plans [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options issued to purchase common stock		200,000
Restricted Stock Units RSU [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock units outstanding		2,485,000
Shares expected to vest		1,300,000
Unrecognized non-cash compensation costs		$ 1,278,000
Unrecognized non-cash compensation costs, weighted average period		3 years 7 days
Share-based compensation		$ 312,000	$ 52,000
Restricted Stock Units RSU [Member] | Third-party Consultants [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of restricted stock shares issued		300,000
Aggregate number of vested shares of common stock		300,000
Restricted Stock Units RSU [Member] | Board of Directors [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock issued during period, shares, share-based compensation		150,000
January 15 2018 [Member] | Board of Directors [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Option awards vesting percentage		50.00%
January 15 2018 [Member] | Board of Directors [Member] | Stock Option Plans [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Option awards vesting percentage		50.00%
January 15 2019 [Member] | Board of Directors [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Option awards vesting percentage		50.00%
January 15 2019 [Member] | Board of Directors [Member] | Stock Option Plans [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Option awards vesting percentage		50.00%
Stock Option Plans [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation		$ 395,000	$ 226,000
Weighted-average contractual term of options outstanding		5 years 6 months 18 days
Stock options were exercisable		3,163,593
Exercise price		$ 1.35
Aggregate intrinsic value		$ 432,000
Weighted average contractual term		3 years 1 month 24 days
Weighted average grant date fair value for options granted		$ 0.85
Unrecognized compensation cost of unvested stock option grants		$ 1,675,000
Weighted-average contractual term of expected to vest		3 years 15 days

Share-Based Compensation - Sche

Share-Based Compensation - Schedule of Stock Option Activity (Details)	3 Months Ended
	Oct. 31, 2017USD ($)$ / sharesshares
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Options Outstanding Shares, Beginning Balance | shares	5,759,843
Options Granted, Shares | shares	200,000
Options Exercised, Shares | shares
Options Cancelled, Shares | shares
Options Outstanding Shares, Ending Balance | shares	5,959,843
Weighted Average Exercise Price Outstanding, Beginning Balance | $ / shares	$ 1.25
Weighted Average Exercise Price Granted | $ / shares	1.21
Weighted Average Exercise Price Exercised | $ / shares
Weighted Average Exercise Price Cancelled | $ / shares
Weighted Average Exercise Price Outstanding, Ending Balance | $ / shares	$ 1.25
Aggregate Intrinsic Value Outstanding, Beginning Balance | $	$ 1,120,000
Aggregate Intrinsic Value Outstanding, Ending Balance | $	$ 544,000

Share-Based Compensation - Sc30

Share-Based Compensation - Schedule of Fair Value Assumptions (Details)	3 Months Ended
	Oct. 31, 2017	Oct. 31, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Volatility	86.98%	74.71%
Risk-free interest rate	1.80%	0.93%
Dividend yield	0.00%	0.00%
Expected life	5 years 5 months 12 days	2 years 9 months 22 days

Subsequent Events (Details Narr

Subsequent Events (Details Narrative)	3 Months Ended
	Oct. 31, 2017USD ($)
Subsequent Event [Member] | Third Party [Member]
Write off of inventory	$ 26,000