PURE Bioscience (PURE) 10-Q 13 Dec 19 2020 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Oct. 31, 2019	Dec. 13, 2019
Document And Entity Information
Entity Registrant Name	PURE BIOSCIENCE, INC.
Entity Central Index Key	0001006028
Document Type	10-Q
Document Period End Date	Oct. 31, 2019
Amendment Flag	false
Current Fiscal Year End Date	--07-31
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business Flag	true
Entity Emerging Growth Company	false
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		79,994,402
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2020

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($)	Oct. 31, 2019	Jul. 31, 2019
Current assets
Cash and cash equivalents	$ 904,000	$ 398,000
Accounts receivable	220,000	373,000
Inventories, net	162,000	177,000
Restricted cash	75,000	75,000
Prepaid expenses	30,000	18,000
Total current assets	1,391,000	1,041,000
Property, plant and equipment, net	333,000	362,000
Patents, net	506,000	529,000
Total assets	2,230,000	1,932,000
Current liabilities
Accounts payable	749,000	553,000
Accrued liabilities	128,000	185,000
Total current liabilities	877,000	738,000
Deferred rent		4,000
Total liabilities	877,000	742,000
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, 79,994,402 shares issued and outstanding at October 31, 2019, and 76,732,334 shares issued and outstanding at July 31, 2019	800,000	768,000
Additional paid-in capital	125,156,000	123,900,000
Accumulated deficit	(124,603,000)	(123,478,000)
Total stockholders' equity	1,353,000	1,190,000
Total liabilities and stockholders' equity	$ 2,230,000	$ 1,932,000

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Oct. 31, 2019	Jul. 31, 2019
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	79,994,402	76,732,334
Common stock, shares outstanding	79,994,402	76,732,334

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended
	Oct. 31, 2019	Oct. 31, 2018
Income Statement [Abstract]
Net product sales	$ 398,000	$ 590,000
Operating costs and expenses
Cost of goods sold	156,000	203,000
Selling, general and administrative	1,290,000	2,853,000
Research and development	82,000	97,000
Total operating costs and expenses	1,528,000	3,153,000
Loss from operations	(1,130,000)	(2,563,000)
Other income (expense)
Interest expense, net	(2,000)	(3,000)
Other income, net	7,000
Total other income (expense)	5,000	(3,000)
Net loss	$ (1,125,000)	$ (2,566,000)
Basic and diluted net loss per share	$ (0.01)	$ (0.04)
Shares used in computing basic and diluted net loss per share	78,004,073	71,002,302

Condensed Consolidated Statem_2

Condensed Consolidated Statement of Stockholders' Equity (Unaudited) - USD ($)	Common Stock [Member]	Additional Paid-In Capital [Member]	Accumulated Deficit [Member]	Total
Balance at Jul. 31, 2018	$ 683,000	$ 117,522,000	$ (116,924,000)	$ 1,281,000
Balance, shares at Jul. 31, 2018	68,248,158
Issuance of common stock in private placements, net	$ 33,000	1,465,000		1,498,000
Issuance of common stock in private placements, net, shares	3,333,964
Share-based compensation expense - stock options		1,002,000		1,002,000
Share-based compensation expense - restricted stock units		741,000		741,000
Net loss			(2,566,000)	(2,566,000)
Balance at Oct. 31, 2018	$ 716,000	120,730,000	(119,490,000)	1,956,000
Balance, shares at Oct. 31, 2018	71,582,122
Balance at Jul. 31, 2019	$ 768,000	123,900,000	(123,478,000)	1,190,000
Balance, shares at Jul. 31, 2019	76,732,334
Issuance of common stock in private placements, net	$ 28,000	802,000		830,000
Issuance of common stock in private placements, net, shares	2,862,068
Share-based compensation expense - stock options		268,000		268,000
Share-based compensation expense - restricted stock units		190,000		190,000
Issuance of common stock for vested restricted stock units	$ 4,000	(4,000)
Issuance of common stock for vested restricted stock units, shares	400,000
Net loss			(1,125,000)	(1,125,000)
Balance at Oct. 31, 2019	$ 800,000	$ 125,156,000	$ (124,603,000)	$ 1,353,000
Balance, shares at Oct. 31, 2019	79,994,402

Condensed Consolidated Statem_3

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Oct. 31, 2019	Oct. 31, 2018
Operating activities
Net loss	$ (1,125,000)	$ (2,566,000)
Adjustments to reconcile net loss to net cash used in operating activities:
Share-based compensation	458,000	1,744,000
Amortization of stock issued for services	4,000	19,000
Depreciation and amortization	52,000	71,000
Interest expense on promissory note		1,000
Changes in operating assets and liabilities:
Accounts receivable	153,000	(78,000)
Inventories	15,000	(12,000)
Prepaid expenses	(16,000)	(32,000)
Accounts payable and accrued liabilities	139,000	(206,000)
Deferred rent	(4,000)	(1,000)
Net cash used in operating activities	(324,000)	(1,060,000)
Investing activities
Purchases of property, plant and equipment		(8,000)
Net cash used in investing activities		(8,000)
Financing activities
Net proceeds from the sale of common stock	830,000	993,000
Net proceeds from the exercise of warrants
Net cash provided by financing activities	830,000	993,000
Net increase (decrease) in cash, cash equivalents, and restricted cash	506,000	(75,000)
Cash, cash equivalents, and restricted cash at beginning of period	473,000	926,000
Cash, cash equivalents, and restricted cash at end of period	979,000	851,000
Reconciliation of cash, cash equivalents, and restricted cash to the condensed consolidated balance sheets
Cash and cash equivalents	904,000	776,000
Restricted cash	75,000	75,000
Total cash, cash equivalents and restricted cash	979,000	851,000
Supplemental disclosure of non-cash financing activities
Conversion of promissory note and accrued interest from a related party to common stock		$ 504,000

Basis of Presentation

Basis of Presentation	3 Months Ended
	Oct. 31, 2019
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, 2019 are not necessarily indicative of the results that may be expected for other quarters or the year ending July 31, 2020. The July 31, 2019 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, 2019 included in our Annual Report on Form 10-K covering such period filed with the Securities and Exchange Commission, or SEC, on October 30, 2019. 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, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]
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, 2019, we have incurred a cumulative net loss of $124,603,000. 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, 2019, we had $979,000 in cash and cash equivalents, and $877,000 of accounts payable and accrued liabilities. As of October 31, 2019, 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. The condensed consolidated financial statements do not include any adjustment relating to recoverability or classification of recorded assets and classification of recorded liabilities.

Significant Accounting Policies

Significant Accounting Policies	3 Months Ended
	Oct. 31, 2019
Accounting Policies [Abstract]
Significant Accounting Policies	3. Significant Accounting Policies Revenue Recognition Effective August 1, 2018, we adopted the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”), Topic 606, Revenue from Contracts with Customers (“Topic 606”). Under Topic 606, revenue is recognized at an amount that reflects the consideration to which we expect to be entitled in exchange for transferring goods or services to a customer. This principle is applied using the following 5-step process: 1. Identify the contract with the customer 2. Identify the performance obligations in the contract 3. Determine the transaction price 4. Allocate the transaction price to the performance obligations in the contract 5. Recognize revenue when (or as) each performance obligation is satisfied Under Topic 606, we recognize revenue when we satisfy a performance obligation by transferring control of the promised goods or services to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. Our technology platform is based on patented stabilized ionic silver, and our initial products contain silver dihydrogen citrate, or SDC. SDC is a broad-spectrum, non-toxic antimicrobial agent, which offers 24-hour residual protection and formulates well with other compounds. We sell various configurations and dilutions of SDC direct to customers and through distributors. We currently offer PURE ® ® Contract terms for unit price, quantity, shipping and payment are governed by sales agreements and purchase orders which we consider to be a customer’s contract in all cases. The unit price is considered the observable stand-alone selling price for the arrangements. Any promotional or sales discounts are applied evenly to the units sold for purposes of calculating standalone selling price. Product sales generally consist of a single performance obligation that we satisfy at a point in time. We recognize product revenue when the following events have occurred: (a) we have transferred physical possession of the products, (b) we have a present right to payment, (c) the customer has legal title to the products, and (d) the customer bears significant risks and rewards of ownership of the products. Our direct customer and distributer sales are invoiced based on received purchase orders. Our payment terms on invoiced direct customer and distributor sales range between 30 and 90 days after we satisfy our performance obligation. The majority of our customers are on 30 day payment terms. We currently offer no right of return on invoiced sales and maintain no allowance for sales returns. Shipping and handling are treated as activities to fulfill promises to customers and any amounts billed to a customer, if applicable, represent revenues earned for the goods provided. Costs related to such shipping and handling billings are classified as cost of sales. We do not have significant categories of revenue that may impact how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. Variable Consideration We record revenue from customers in an amount that reflects the transaction price we expect to be entitled to after transferring control of those goods or services. From time to time, we offer sales promotions on our products such as discounts. Variable consideration is estimated at contract inception only to the extent that it is probable that a significant reversal of revenue will not occur. Practical Expedient We elected a practical expedient to expense sales commissions when the commissions are incurred because the amortization period would have been one year or less. These costs are recorded as Selling, general and administrative expense on our Condensed Consolidated Statements of Operations. Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America, or GAAP, requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements, and the disclosures made in the accompanying notes to the consolidated financial statements. Actual results could differ materially from those estimates. Those estimates and assumptions include estimates for reserves of uncollectible accounts, inventory obsolescence, depreciable lives of property and equipment, analysis of impairments of recorded long-term tangible and intangible assets, realization of deferred tax assets, accruals for potential liabilities and assumptions made in valuing stock instruments issued for services. 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, 2019 and 2018, 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 9,578,390 and 12,287,189 respectively. 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, 2019 July 31, 2019 Raw materials $ 3,000 $ 30,000 Finished goods 159,000 147,000 $ 162,000 $ 177,000 Share-Based Compensation We grant equity-based awards under share-based compensation plans. We estimate the fair value of share-based payment awards using the Black-Scholes option valuation model. This fair value is then amortized over the requisite service periods of the awards. The Black-Scholes option valuation model requires the input of subjective assumptions, including price volatility of the underlying stock, risk-free interest rate, dividend yield, and expected life of the option. Share-based compensation expense is based on awards ultimately expected to vest, and therefore is reduced by expected forfeitures. Changes in assumptions used under the Black-Scholes option valuation model could materially affect our net loss and net loss per share. 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, 2019 and 2018, no impairment of long-lived assets was indicated or recorded. Concentrations For the three months ended October 31, 2019, three individual customer accounted for 18%, 12% and 11% of our net product sales, respectively. No other individual customer accounted for 10% or more of our net product sales. All of our net product sales were U.S. based sales. For the three months ended October 31, 2018, two individual customer accounted for 37% of our net product sales. No other individual customer accounted for 10% or more of our net product sales. All of our net product sales were U.S. based sales. Reclassification Share-based compensation expense of $1,744,000 included in the period ending October 31, 2018 have been reclassified to selling, general and administrative expense to conform to current period presentation. This reclassification did not have an impact on our results of operations or financial condition as of October 31, 2019 and 2018.

Recent Accounting Pronouncement

Recent Accounting Pronouncements	3 Months Ended
	Oct. 31, 2019
Accounting Changes and Error Corrections [Abstract]
Recent Accounting Pronouncements	4. Recent Accounting Pronouncements Recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statement presentation or disclosures.

Stockholders' Equity

Stockholders' Equity	3 Months Ended
	Oct. 31, 2019
Stockholders' equity
Stockholders' Equity	5. Stockholders’ Equity Private Placement Financing On October 2, 2019, we entered into and completed a closing (the “Closing”) of a private placement financing to accredited investors. We raised net proceeds of $830,000 in the Closing of an aggregate of 2,862,068 shares of our common stock at a purchase price of $0.29 per share, the closing sales price of our common stock on the date prior to the Closing. The Shares issued in the private placement financing were issued pursuant to a securities purchase agreement entered into with the investors. Tom Y. Lee and Dale Okuno, each of whom are accredited investors and members of the Company’s Board of Directors invested $290,000 and $250,000, respectively, in the private placement financing. Mr. Lee also serves as the Company’s President and Chief Executive Officer. The net proceeds to us from the Closing, after deducting the forgoing fees and other offering expenses, were approximately $830,000. We expect to use the net proceeds for general corporate purposes, including our research and development efforts, and for g eneral administrative expenses and working capital The issuance and sale of the Shares was not registered under the Securities Act of 1933, as amended (the “Securities Act”), and these Shares may not be offered or sold in the United States absent registration under or exemption from the Securities Act and any applicable state securities laws. The Shares were issued and sold in reliance upon an exemption from registration afforded by Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D promulgated under the Securities Act. The Investors represented to the Company that each was an “accredited investor” within the meaning of Rule 501 of Regulation D under the Securities Act, and that each was receiving the Shares for investment for its own account and without a view to distribute them. On August 16, 2018, we completed a Closing of a private placement financing to accredited investors. We raised approximately $1.5 million in the Closing and issued an aggregate of 3,333,964 shares of our common stock at a purchase price of $0.45 per share, including the conversion of approximately $0.5 million held in the form of a promissory note as of July 31, 2018. The shares issued in the private placement financing were issued pursuant to a securities purchase agreement entered into with the investors. Mr. Tom Y. Lee, a member of the Company’s Board of Directors invested approximately $1.0 million through his affiliates, including approximately $0.5 million of cash and the cancellation of existing indebtedness in the amount of approximately $0.5 million that was held in the form of a promissory note payable as of July 31, 2018. The net proceeds to us from the Closing (including the cancellation of indebtedness), after deducting fees and other offering expenses, were approximately $1.5 million. The issuance and sale of the shares was not registered under the Securities Act of 1933, as amended (the “Securities Act”), and these shares may not be offered or sold in the United States absent registration under or exemption from the Securities Act and any applicable state securities laws. The shares were issued and sold in reliance upon an exemption from registration afforded by Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D promulgated under the Securities Act. The Investors represented to the Company that each was an “accredited investor” within the meaning of Rule 501 of Regulation D under the Securities Act, and that each was receiving the shares for investment for its own account and without a view to distribute them. 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, 2019 and 2018, we recognized $4,000 and $6,000 of expense related to these services, respectively.

Share-Based Compensation

Share-Based Compensation	3 Months Ended
	Oct. 31, 2019
Share-based Payment Arrangement [Abstract]
Share-Based Compensation	6. Share-Based Compensation Restricted Stock Units The company issues restricted stock unit awards (“RSUs”) to key management and as compensation for services to consultants and others. The RSUs typically vest over a two-year period and carry a ten-year term. 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. The Company determines that fair value of those awards at the date of grant, and amortizes those awards as an expense over the vesting period of the award. The shares earned under the grant are usually issued when the award settles at the end of the term. As of July 31, 2019, the Company had granted 1,912,500 RSU’s of which 1,456,250 had vested. As of July 31, 2019, 456,250 RSU’s with a fair value of $211,200, remained unvested. None of the shares vested under the RSUs had been issued as of July 31, 2019. During the period ended October 31, 2019, the Company recognized $28,000 of compensation cost relating to the shares vesting during the period. In addition, the Company accelerated the vesting of 400,000 shares of stock issued to Henry R. Lambert with a remaining value of $162,000 upon his retirement during the period. In total, the Company recognized $190,000 from the vesting of these restricted stock units. For the three months ended October 31, 2018 share-based compensation expense for RSUs was $741,000, of which $489,000 was due the accelerated vesting of RSU’s held by Dave Pfanzelter, the former Chairman of our Board. Mr. Pfanzelter retired from our Board in August 2018. During the three months ended October 31, 2019 there were no Restricted Stock Units granted, and 400,000 shares were issued to Mr. Lambert upon his retirement. At October 31, 2019, there was $17,000 of unrecognized non-cash compensation cost related to RSUs we expect to vest, which will be recognized over a weighted average period of 0.17 years. The Company at times will enter into service agreements where it will grant restricted stock units upon the achievement of certain milestones. The awards will then begin vesting once that milestone is reached. The Company does not recognize any compensation on those awards until the milestone is reached, and the vesting period begins. A summary of our restricted stock unit activity and related data is as follows: Outstanding at July 31, 2019 1,912,500 Granted — Vested (400,000 ) Forfeited — Outstanding at October 31, 2019 1,512,500 Of the 1,512,500 RSUs outstanding as of October 31, 2019, 1,306,250 RSUs are vested and the underlying common stock has not been delivered and remains outstanding, as set forth in the RSU agreements. Stock Option Plans 2007 Equity Incentive Plan In February 2016, we amended and restated our 2007 Equity Incentive Plan, the (“2007 Plan”), to, among other changes, increase the number of shares of common stock issuable under the 2007 Plan by 4,000,000 shares and extend the term of the 2007 Plan until February 4, 2026. The 2007 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. As of October 31, 2019, there were approximately 1,153,000 shares available for issuance under the 2007 Plan. 2017 Equity Incentive Plan Our shareholders approved our 2017 Equity Incentive Plan (the “2017 Plan”) in January 2018, which has a share reserve of 5,000,000 shares of common stock that were registered under a Form S-8 filed with the SEC in February 2018. The 2017 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. As of October 31, 2019, there were approximately 1,696,000 shares available for issuance under the 2017 Plan. During the three months ended October 31, 2019, the Compensation Committee of the Board of Directors authorized the issuance of 375,000 stock options to members of our Board. The vesting terms of the options vary between one and two years and carry a ten year term. A summary of our stock option activity is as follows: Shares Weighted- Aggregate Outstanding at July 31, 2019 7,363,125 $ 1.04 $ — Granted 375,000 $ 0.29 $ 2,000 Exercised — $ — — Cancelled — $ — — Outstanding at October 31, 2019 7,738,125 $ 1.01 $ — The weighted-average remaining contractual term of options outstanding at October 31, 2019 was 4.62 years. At October 31, 2019, options to purchase 6,667,292 shares of common stock were exercisable. These options had a weighted-average exercise price of $1.08 and a weighted average remaining contractual term of 4.23 years. The weighted average grant date fair value for options granted during the three months ended October 31, 2019 was $0.19. The total unrecognized compensation cost related to unvested stock option grants as of October 31, 2019 was approximately $129,000 and the weighted average period over which these grants are expected to vest is 0.94 years. For the three months ended October 31, 2019 share-based compensation expense for stock options was $268,000. For the three months ended October 31, 2018 share-based compensation expense for stock options was $1,002,000, of which $739,000 was due the accelerated vesting of stock options held by Dave Pfanzelter, the former Chairman of our Board. Mr. Pfanzelter retired from our Board in August 2018. 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 2019 2018 Volatility 79.16 % 62.52 % Risk-free interest rate 1.52 % 2.80 % Dividend yield 0.0 % 0.0 % Expected life 5.36 years 3.02 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 expected life of options was estimated using the average between the contractual term and the vesting term of the options.

Significant Accounting Polici_2

Significant Accounting Policies (Policies)	3 Months Ended
	Oct. 31, 2019
Accounting Policies [Abstract]
Revenue Recognition	Revenue Recognition Effective August 1, 2018, we adopted the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”), Topic 606, Revenue from Contracts with Customers (“Topic 606”). Under Topic 606, revenue is recognized at an amount that reflects the consideration to which we expect to be entitled in exchange for transferring goods or services to a customer. This principle is applied using the following 5-step process: 1. Identify the contract with the customer 2. Identify the performance obligations in the contract 3. Determine the transaction price 4. Allocate the transaction price to the performance obligations in the contract 5. Recognize revenue when (or as) each performance obligation is satisfied Under Topic 606, we recognize revenue when we satisfy a performance obligation by transferring control of the promised goods or services to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. Our technology platform is based on patented stabilized ionic silver, and our initial products contain silver dihydrogen citrate, or SDC. SDC is a broad-spectrum, non-toxic antimicrobial agent, which offers 24-hour residual protection and formulates well with other compounds. We sell various configurations and dilutions of SDC direct to customers and through distributors. We currently offer PURE ® ® Contract terms for unit price, quantity, shipping and payment are governed by sales agreements and purchase orders which we consider to be a customer’s contract in all cases. The unit price is considered the observable stand-alone selling price for the arrangements. Any promotional or sales discounts are applied evenly to the units sold for purposes of calculating standalone selling price. Product sales generally consist of a single performance obligation that we satisfy at a point in time. We recognize product revenue when the following events have occurred: (a) we have transferred physical possession of the products, (b) we have a present right to payment, (c) the customer has legal title to the products, and (d) the customer bears significant risks and rewards of ownership of the products. Our direct customer and distributer sales are invoiced based on received purchase orders. Our payment terms on invoiced direct customer and distributor sales range between 30 and 90 days after we satisfy our performance obligation. The majority of our customers are on 30 day payment terms. We currently offer no right of return on invoiced sales and maintain no allowance for sales returns. Shipping and handling are treated as activities to fulfill promises to customers and any amounts billed to a customer, if applicable, represent revenues earned for the goods provided. Costs related to such shipping and handling billings are classified as cost of sales. We do not have significant categories of revenue that may impact how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. Variable Consideration We record revenue from customers in an amount that reflects the transaction price we expect to be entitled to after transferring control of those goods or services. From time to time, we offer sales promotions on our products such as discounts. Variable consideration is estimated at contract inception only to the extent that it is probable that a significant reversal of revenue will not occur. Practical Expedient We elected a practical expedient to expense sales commissions when the commissions are incurred because the amortization period would have been one year or less. These costs are recorded as Selling, general and administrative expense on our Condensed Consolidated Statements of Operations.
Use of Estimates	Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America, or GAAP, requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements, and the disclosures made in the accompanying notes to the consolidated financial statements. Actual results could differ materially from those estimates. Those estimates and assumptions include estimates for reserves of uncollectible accounts, inventory obsolescence, depreciable lives of property and equipment, analysis of impairments of recorded long-term tangible and intangible assets, realization of deferred tax assets, accruals for potential liabilities and assumptions made in valuing stock instruments issued for services.
Net Loss Per Share	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, 2019 and 2018, 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 9,578,390 and 12,287,189 respectively.
Inventory	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, 2019 July 31, 2019 Raw materials $ 3,000 $ 30,000 Finished goods 159,000 147,000 $ 162,000 $ 177,000
Share-Based Compensation	Share-Based Compensation We grant equity-based awards under share-based compensation plans. We estimate the fair value of share-based payment awards using the Black-Scholes option valuation model. This fair value is then amortized over the requisite service periods of the awards. The Black-Scholes option valuation model requires the input of subjective assumptions, including price volatility of the underlying stock, risk-free interest rate, dividend yield, and expected life of the option. Share-based compensation expense is based on awards ultimately expected to vest, and therefore is reduced by expected forfeitures. Changes in assumptions used under the Black-Scholes option valuation model could materially affect our net loss and net loss per share.
Impairment of Long-Lived Assets	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, 2019 and 2018, no impairment of long-lived assets was indicated or recorded.
Concentrations	Concentrations For the three months ended October 31, 2019, three individual customer accounted for 18%, 12% and 11% of our net product sales, respectively. No other individual customer accounted for 10% or more of our net product sales. All of our net product sales were U.S. based sales. For the three months ended October 31, 2018, two individual customer accounted for 37% of our net product sales. No other individual customer accounted for 10% or more of our net product sales. All of our net product sales were U.S. based sales.
Reclassification	Reclassification Share-based compensation expense of $1,744,000 included in the period ending October 31, 2018 have been reclassified to selling, general and administrative expense to conform to current period presentation. This reclassification did not have an impact on our results of operations or financial condition as of October 31, 2019 and 2018.

Significant Accounting Polici_3

Significant Accounting Policies (Tables)	3 Months Ended
	Oct. 31, 2019
Accounting Policies [Abstract]
Schedule of Inventories	Inventories consist of the following: October 31, 2019 July 31, 2019 Raw materials $ 3,000 $ 30,000 Finished goods 159,000 147,000 $ 162,000 $ 177,000

Share-Based Compensation (Table

Share-Based Compensation (Tables)	3 Months Ended
	Oct. 31, 2019
Share-based Payment Arrangement [Abstract]
Schedule of Restricted Stock Activity	A summary of our restricted stock unit activity and related data is as follows: Outstanding at July 31, 2019 1,912,500 Granted — Vested (400,000 ) Forfeited — Outstanding at October 31, 2019 1,512,500
Schedule of Stock Option Activity	A summary of our stock option activity is as follows: Shares Weighted- Aggregate Outstanding at July 31, 2019 7,363,125 $ 1.04 $ — Granted 375,000 $ 0.29 $ 2,000 Exercised — $ — — Cancelled — $ — — Outstanding at October 31, 2019 7,738,125 $ 1.01 $ —
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 2019 2018 Volatility 79.16 % 62.52 % Risk-free interest rate 1.52 % 2.80 % Dividend yield 0.0 % 0.0 % Expected life 5.36 years 3.02 years

Liquidity & Going Concern Unc_2

Liquidity & Going Concern Uncertainty (Details Narrative) - USD ($)	Oct. 31, 2019	Jul. 31, 2019	Oct. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Cumulative net loss	$ (124,603,000)	$ (123,478,000)
Cash and cash equivalents	904,000	$ 398,000	$ 776,000
Accounts payable and accrued liabilities	877,000
Long term debt

Significant Accounting Polici_4

Significant Accounting Policies (Details Narrative) - USD ($)	3 Months Ended
	Oct. 31, 2019	Oct. 31, 2018
Computation of basic net loss per share	9,578,390	12,287,189
Impairment of long-lived assets
Share-based compensation expense	$ 458,000	$ 1,744,000
Customer Concentration Risk [Member] | Sales Revenue, Net [Member] | Individual Customer One [Member]
Concentration risk percentage	18.00%
Customer Concentration Risk [Member] | Sales Revenue, Net [Member] | Individual Customer Two [Member]
Concentration risk percentage	12.00%
Customer Concentration Risk [Member] | Sales Revenue, Net [Member] | Individual Customer Three [Member]
Concentration risk percentage	11.00%
Customer Concentration Risk [Member] | Sales Revenue, Net [Member] | Two Individual Customer [Member]
Concentration risk percentage		37.00%

Significant Accounting Polici_5

Significant Accounting Policies - Schedule of Inventories (Details) - USD ($)	Oct. 31, 2019	Jul. 31, 2019
Accounting Policies [Abstract]
Raw materials	$ 3,000	$ 30,000
Finished goods	159,000	147,000
Inventory, net	$ 162,000	$ 177,000

Stockholders' Equity (Details N

Stockholders' Equity (Details Narrative) - USD ($)	Oct. 02, 2019	Aug. 16, 2018	Oct. 31, 2019	Oct. 31, 2018	Oct. 31, 2017	Jul. 31, 2018
Two Year Service Agreement [Member] | Business Development Services [Member]
Number of common shares issued for services					50,000
Value of shares issued for services			$ 4,000	$ 6,000	$ 51,000
Mr. Tom Y. Lee [Member]
Investments amount						$ 1,000,000
Investment cash						500,000
Cancellation of indebtedness amount						500,000
Private Placement [Member]
Closing value of common stock shares	$ 830,000	$ 1,500,000
Number of common stock shares issued	2,862,068	3,333,964
Price per share	$ 0.29	$ 0.45
Net proceeds from private placement financing	$ 830,000	$ 1,500,000
Conversion amount						$ 500,000
Private Placement [Member] | Tom Y. Lee [Member]
Investments amount	290,000
Private Placement [Member] | Dale Okuno [Member]
Investments amount	$ 250,000

Share-Based Compensation (Detai

Share-Based Compensation (Details Narrative) - USD ($)	1 Months Ended	3 Months Ended		12 Months Ended
	Feb. 29, 2016	Oct. 31, 2019	Oct. 31, 2018	Jul. 31, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of units, vested		400,000
Number of units, unvested		1,512,500		1,912,500
Share-based compensation		$ 268,000	$ 1,002,000
Options issued to purchase common stock		6,667,292
Options expirations term		4 years 7 months 13 days
Weighted average exercise price		$ 1.08
Weighted average contractual term		4 years 2 months 23 days
Weighted average grant date fair value for options granted		$ 0.19
Unrecognized compensation cost of unvested stock option grants		$ 129,000
Weighted-average contractual term of expected to vest		11 months 8 days
2007 Equity Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation, vesting period	10 years
Common stock shares increase under the plan	4,000,000
Share-based compensation, expiration date	Feb. 4, 2026
Number of shares available for issuance under the plan		1,153,000
2017 Equity Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation, vesting period		10 years
Number of shares available for issuance under the plan		1,696,000
Common stock, shares reserved		5,000,000
Board of Directors [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options issued to purchase common stock		375,000
Option vested description		The vesting terms of the options vary between one and two years and carry a ten year term.
Mr. Pfanzelter [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted shares units vested amount		$ 739,000
Restricted Stock Unit Awards (RSU's) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of units, granted				1,912,500
Number of units, vested				1,456,250
Number of units, unvested		1,512,500		456,250
Number of units, unvested, fair value				$ 211,200
Compensation cost recognized		$ 190,000
Share-based compensation			$ 741,000
Unrecognized non-cash compensation costs		$ 17,000
Unrecognized non-cash compensation costs, weighted average period		2 months 1 day
RSUs vested and non-delivered underlying common stock		1,306,250
Restricted Stock Unit Awards (RSU's) [Member] | Henry R. Lambert [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation cost recognized		$ 162,000
Stock issued during period, shares, share-based compensation		400,000
Restricted Stock Unit Awards (RSU's) [Member] | Shares Vested During Period [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation cost recognized		$ 28,000
Restricted Stock Unit Awards (RSU's) [Member] | Consultants and Others [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation, vesting period		2 years
Restricted Stock Unit Awards (RSU's) [Member] | Consultants and Others [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation, vesting period		10 years
Restricted Stock Unit Awards (RSU's) [Member] | Mr. Pfanzelter [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted shares units vested amount		$ 489,000

Share-Based Compensation - Sche

Share-Based Compensation - Schedule of Restricted Stock Activity (Details)	3 Months Ended
	Oct. 31, 2019shares
Share-based Payment Arrangement [Abstract]
Outstanding, Beginning balance	1,912,500
Vested	(400,000)
Forfeited
Outstanding, Ending balance	1,512,500

Share-Based Compensation - Sc_2

Share-Based Compensation - Schedule of Stock Option Activity (Details)	3 Months Ended
	Oct. 31, 2019USD ($)$ / sharesshares
Share-based Payment Arrangement [Abstract]
Options Outstanding Shares, Beginning Balance	7,363,125
Options Granted, Shares	375,000
Options Exercised, Shares
Options Cancelled, Shares
Options Outstanding Shares, Ending Balance	7,738,125
Weighted Average Exercise Price Outstanding, Beginning Balance | $ / shares	$ 1.04
Weighted Average Exercise Price Granted | $ / shares	0.29
Weighted Average Exercise Price Exercised | $ / shares
Weighted Average Exercise Price Cancelled | $ / shares
Weighted Average Exercise Price Outstanding, Ending Balance | $ / shares	$ 1.01
Aggregate Intrinsic Value Outstanding, Beginning Balance | $
Aggregate Intrinsic Value Outstanding, Granted	2,000
Aggregate Intrinsic Value Outstanding, Ending Balance | $

Share-Based Compensation - Sc_3

Share-Based Compensation - Schedule of Fair Value Assumptions (Details)	3 Months Ended
	Oct. 31, 2019	Oct. 31, 2018
Share-based Payment Arrangement [Abstract]
Volatility	79.16%	62.52%
Risk-free interest rate	1.52%	2.80%
Dividend yield	0.00%	0.00%
Expected life	5 years 4 months 9 days	3 years 7 days