PURE Bioscience (PURE) 10-Q 15 Dec 20 2021 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Oct. 31, 2020	Dec. 15, 2020
Cover [Abstract]
Entity Registrant Name	PURE BIOSCIENCE, INC.
Entity Central Index Key	0001006028
Document Type	10-Q
Document Period End Date	Oct. 31, 2020
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 Shell Company	false
Entity Common Stock, Shares Outstanding		87,072,957
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2021

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($)	Oct. 31, 2020	Jul. 31, 2020
Current assets
Cash and cash equivalents	$ 3,466,000	$ 3,839,000
Accounts receivable	560,000	1,089,000
Inventories, net	733,000	547,000
Restricted cash	75,000	75,000
Prepaid expenses	46,000	16,000
Total current assets	4,880,000	5,566,000
Property, plant and equipment, net	465,000	316,000
Patents, net	421,000	441,000
Total assets	5,766,000	6,323,000
Current liabilities
Accounts payable	773,000	1,344,000
Accrued liabilities	133,000	168,000
Total current liabilities	906,000	1,512,000
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, 87,072,951 shares issued and outstanding at October 31, 2020, and at July 31, 2020	871,000	871,000
Additional paid-in capital	127,643,000	127,414,000
Accumulated deficit	(123,654,000)	(123,474,000)
Total stockholders' equity	4,860,000	4,811,000
Total liabilities and stockholders' equity	$ 5,766,000	$ 6,323,000

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Oct. 31, 2020	Jul. 31, 2020
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	87,072,951	87,072,951
Common stock, shares outstanding	87,072,951	87,072,951

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended
	Oct. 31, 2020	Oct. 31, 2019
Total revenue	$ 1,591,000	$ 398,000
Cost of goods sold	641,000	156,000
Gross Profit	950,000	242,000
Operating costs and expenses
Selling, general and administrative	1,046,000	1,290,000
Research and development	83,000	82,000
Total operating costs and expenses	1,129,000	1,372,000
Loss from operations	(179,000)	(1,130,000)
Other income (expense)
Interest expense, net	(1,000)	(2,000)
Other income, net		7,000
Total other income (expense)	(1,000)	5,000
Net loss	$ (180,000)	$ (1,125,000)
Basic and diluted net loss per share	$ 0	$ (0.01)
Shares used in computing basic and diluted net loss per share	87,072,951	78,004,073
Net Product Sales [Member]
Total revenue	$ 1,417,000	$ 398,000
Royalty Revenue [Member]
Total revenue	$ 174,000

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, 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
Balance at Jul. 31, 2020	$ 871,000	127,414,000	(123,474,000)	4,811,000
Balance, shares at Jul. 31, 2020	87,072,951
Share-based compensation expense - stock options		208,000		208,000
Share-based compensation expense - restricted stock units		21,000		21,000
Net loss			(180,000)	(180,000)
Balance at Oct. 31, 2020	$ 871,000	$ 127,643,000	$ (123,654,000)	$ 4,860,000
Balance, shares at Oct. 31, 2020	87,072,951

Condensed Consolidated Statem_3

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Oct. 31, 2020	Oct. 31, 2019
Operating activities
Net loss	$ (180,000)	$ (1,125,000)
Adjustments to reconcile net loss to net cash used in operating activities:
Share-based compensation	229,000	458,000
Amortization of stock issued for services		4,000
Depreciation and amortization	45,000	52,000
Changes in operating assets and liabilities:
Accounts receivable	529,000	153,000
Inventories	(186,000)	15,000
Prepaid expenses	(30,000)	(16,000)
Accounts payable and accrued liabilities	(606,000)	139,000
Deferred rent		(4,000)
Net cash used in operating activities	(199,000)	(324,000)
Investing activities
Purchases of property, plant and equipment	(174,000)
Net cash used in investing activities	(174,000)
Financing activities
Net proceeds from the sale of common stock		830,000
Net cash provided by financing activities		830,000
Net increase (decrease) in cash, cash equivalents, and restricted cash	(373,000)	506,000
Cash, cash equivalents, and restricted cash at beginning of period	3,914,000	473,000
Cash, cash equivalents, and restricted cash at end of period	3,541,000	979,000
Reconciliation of cash, cash equivalents, and restricted cash to the condensed consolidated balance sheets
Cash and cash equivalents	3,466,000	904,000
Restricted cash	75,000	75,000
Total cash, cash equivalents and restricted cash	$ 3,541,000	$ 979,000

Basis of Presentation

Basis of Presentation	3 Months Ended
	Oct. 31, 2020
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, 2020 are not necessarily indicative of the results that may be expected for other quarters or the year ending July 31, 2021. The July 31, 2020 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, 2020 included in our Annual Report on Form 10-K covering such period filed with the Securities and Exchange Commission, or SEC, on October 8, 2020. 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

Liquidity	3 Months Ended
	Oct. 31, 2020
Liquidity
Liquidity	2. Liquidity We have a history of recurring losses, and as of October 31, 2020 we have incurred a cumulative net loss of $123,654,000. During the three months ended October 31, 2020, we recorded a net loss of $180,000 on recorded net revenue of $1,591,000. In addition, we used $373,000 in operating and investing activities resulting in a cash balance of $3,466,000. Based on current projections, we believe our available cash on-hand, our current efforts to market and sell our products, and our ability to significantly reduce expenses, will provide sufficient cash resources to satisfy our operational needs, for at least one year from the date these financial statements are issued. 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 continually generate positive cash flow from operations, we will need 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.

Significant Accounting Policies

Significant Accounting Policies	3 Months Ended
	Oct. 31, 2020
Accounting Policies [Abstract]
Significant Accounting Policies	3. Significant Accounting Policies Revenue Recognition We recognize revenue in accordance with 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 distributor 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. We do not allow for returns, except for damaged products when the damage occurred pre-fulfillment. Damaged product returns have historically been insignificant. Because of this, the stand-alone nature of our products, and our assessment of performance obligations and transaction pricing for our sales contracts, we do not currently maintain a contract asset or liability balance for obligations. We assess our contracts and the reasonableness of our conclusions on a quarterly basis. The Company’s licensing contracts typically provide for royalties based on the licensee’s sales of various configurations of PURE Hard Surface. The Company records its royalty revenue in the month in which the licensee sold our products to end users. Payments are generally received in the subsequent month. 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. 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, 2020 and 2019, stock options and shares issuable under restricted stock unit awards of 11,445,375 and 9,578,390, respectively, have been excluded from the computation of diluted shares outstanding. 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, 2020 July 31, 2020 Raw materials $ 17,000 $ 17,000 Finished goods 716,000 530,000 $ 733,000 $ 547,000 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, 2020 and 2019, no impairment of long-lived assets was indicated or recorded. Concentrations Gross product sales Accounts receivable. Purchases. Accounts payable. Segments We operate in one segment for the manufacture and distribution of our products. In accordance with the “Segment Reporting” Topic of the ASC, our chief operating decision maker has been identified as the Chief Executive Officer and President, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. Existing guidance, which is based on a management approach to segment reporting, establishes requirements to report selected segment information quarterly and to report annually entity-wide disclosures about products and services, major customers, and the countries in which the entity holds material assets and reports revenue. All material operating units qualify for aggregation under “Segment Reporting” due to their similar customer base and similarities in: economic characteristics; nature of products and services; and procurement, manufacturing and distribution processes. Since the Company operates in one segment, all financial information required by “Segment Reporting” can be found in the accompanying financial statements

Recent Accounting Pronouncement

Recent Accounting Pronouncements	3 Months Ended
	Oct. 31, 2020
Accounting Policies [Abstract]
Recent Accounting Pronouncements	4. Recent Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments Other 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, 2020
Stockholders' equity
Stockholders' Equity	5. Stockholders’ Equity Private Placement Financing – Fiscal Year 2020 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 $830,000.

Share-Based Compensation

Share-Based Compensation	3 Months Ended
	Oct. 31, 2020
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. During the three months ended October 31, 2020, the Company recognized $21,000 of compensation cost relating to the shares vesting during the period. 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 during the period ending October 31, 2019 from the vesting of these restricted stock units. Of the 2,012,500 RSUs outstanding as of October 31, 2020, 1,512,500 RSUs are vested and issuable. These RSUs are issued upon settlement date which is defined as “for each Vested Unit, the earliest of (i) the ten-year anniversary of the Grant Date; (ii) sixty days after the date the Grantee’s Service ceases for any reason and such cessation constitutes a “separation from service” within the meaning of Section 409A of the Code; (iii) the date of Grantee’s death or (iv) the date of a Change in Control that constitutes a “change in control event” within the meaning of Section 409A of the Code”. As of October 31, 2020, there was $206,000 of unrecognized non-cash compensation cost related to the remaining 500,000 RSUs we expect to vest, which will be recognized over a weighted average period of 2.50 years. A summary of our restricted stock unit activity and related data is as follows: Outstanding at July 31, 2020 2,012,500 Granted — Issued — Forfeited — Outstanding at October 31, 2020 (of which 1,512,500 have vested and are issuable) 2,012,500 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, 2020, there were approximately 33,000 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, 2020, there were approximately 181,000 shares available for issuance under the 2017 Plan. There were no stock options granted during the three months ended October 31, 2020. A summary of our stock option activity is as follows: Shares Weighted- Aggregate Outstanding at July 31, 2020 9,432,875 $ 0.88 $ 5,255,000 Granted — $ — — Exercised — $ — — Cancelled — $ — — Outstanding at October 31, 2020 9,432,875 $ 0.88 $ 4,039,000 The weighted-average remaining contractual term of options outstanding at October 31, 2020 was 5.05 years. At October 31, 2020, options to purchase 7,472,250 shares of common stock were exercisable. These options had a weighted-average exercise price of $0.94 and a weighted average remaining contractual term of 4.10 years. The total unrecognized compensation cost related to unvested stock option grants as of October 31, 2020 was approximately $535,000 and the weighted average period over which these grants are expected to vest is 1.04 years. For the three months ended October 31, 2020 share-based compensation expense for stock options was $208,000. For the three months ended October 31, 2019 share-based compensation expense for stock options was $268,000. 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 2020 2019 Volatility — % 79.16 % Risk-free interest rate — % 1.52 % Dividend yield — % 0.0 % Expected life — 5.36 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.

Related Party Transactions

Related Party Transactions	3 Months Ended
	Oct. 31, 2020
Related Party Transactions [Abstract]
Related Party Transactions	7. Related Party Transactions As of October 31, 2020 and October 31, 2019, accounts payable include $60,000 and $90,000 in board fees due to officers and directors, respectively.

Commitments and Contingencies

Commitments and Contingencies	3 Months Ended
	Oct. 31, 2020
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	8. Commitments and Contingencies The COVID-19 pandemic has led to severe disruptions in general economic activities, as businesses and federal, state, and local governments take increasingly broad actions to mitigate this public health crisis. While we have experienced some delays related to final third-party validation of certain of our products and product rollouts by customers using PURE Control, we have not experienced a material disruption to our business. In addition, we have benefited from increased demand from our customers for our PURE Hard Surface product due to a focus on surface disinfecting in response to attempting to prevent COVID-19 transmission. We cannot assure you that such increased demand will continue. Further, on a go-forward basis, we cannot guarantee the overall economic conditions will not affect our business, as these conditions may significantly negatively impact all aspects of our business. Our business is dependent on the continued health and productivity of our employees, including our sales staff and corporate management team. Additionally, our liquidity could be negatively impacted if these conditions continue for a significant period of time and we may be required to pursue additional sources of financing to obtain working capital, maintain appropriate inventory levels, and meet our financial obligations. Currently, capital and credit markets have been disrupted by the crisis and our ability to obtain any required financing is not guaranteed and largely dependent upon evolving market conditions and other factors. Depending on the continued impact of the crisis, further actions may be required to improve our cash position and capital structure. The extent to which the COVID-19 pandemic ultimately impacts our business, sales, results of operations and financial condition will depend on future developments, which are highly uncertain and cannot be predicted, including, but not limited to, the duration and spread of the outbreak, its severity, the actions to contain the virus or treat its impact, and how quickly and to what extent normal economic and operating conditions resume and, more specifically, the effect it has on our customers and suppliers. Even after the COVID-19 pandemic has subsided, we may experience significant impacts to our business as a result of its global economic impact, including any economic downturn or recession that has occurred or may occur in the future.

Summary of Significant Accounti

Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Oct. 31, 2020
Accounting Policies [Abstract]
Revenue Recognition	Revenue Recognition We recognize revenue in accordance with 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 distributor 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. We do not allow for returns, except for damaged products when the damage occurred pre-fulfillment. Damaged product returns have historically been insignificant. Because of this, the stand-alone nature of our products, and our assessment of performance obligations and transaction pricing for our sales contracts, we do not currently maintain a contract asset or liability balance for obligations. We assess our contracts and the reasonableness of our conclusions on a quarterly basis. The Company’s licensing contracts typically provide for royalties based on the licensee’s sales of various configurations of PURE Hard Surface. The Company records its royalty revenue in the month in which the licensee sold our products to end users. Payments are generally received in the subsequent month. 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.
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, 2020 and 2019, stock options and shares issuable under restricted stock unit awards of 11,445,375 and 9,578,390, respectively, have been excluded from the computation of diluted shares outstanding.
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, 2020 July 31, 2020 Raw materials $ 17,000 $ 17,000 Finished goods 716,000 530,000 $ 733,000 $ 547,000
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, 2020 and 2019, no impairment of long-lived assets was indicated or recorded.
Concentrations	Concentrations Gross product sales Accounts receivable. Purchases. Accounts payable.
Segments	Segments We operate in one segment for the manufacture and distribution of our products. In accordance with the “Segment Reporting” Topic of the ASC, our chief operating decision maker has been identified as the Chief Executive Officer and President, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. Existing guidance, which is based on a management approach to segment reporting, establishes requirements to report selected segment information quarterly and to report annually entity-wide disclosures about products and services, major customers, and the countries in which the entity holds material assets and reports revenue. All material operating units qualify for aggregation under “Segment Reporting” due to their similar customer base and similarities in: economic characteristics; nature of products and services; and procurement, manufacturing and distribution processes. Since the Company operates in one segment, all financial information required by “Segment Reporting” can be found in the accompanying financial statements

Summary of Significant Accoun_2

Summary of Significant Accounting Policies (Tables)	3 Months Ended
	Oct. 31, 2020
Accounting Policies [Abstract]
Schedule of Inventories	Inventories consist of the following: October 31, 2020 July 31, 2020 Raw materials $ 17,000 $ 17,000 Finished goods 716,000 530,000 $ 733,000 $ 547,000

Share-Based Compensation (Table

Share-Based Compensation (Tables)	3 Months Ended
	Oct. 31, 2020
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, 2020 2,012,500 Granted — Issued — Forfeited — Outstanding at October 31, 2020 (of which 1,512,500 have vested and are issuable) 2,012,500
Schedule of Stock Option Activity	A summary of our stock option activity is as follows: Shares Weighted- Aggregate Outstanding at July 31, 2020 9,432,875 $ 0.88 $ 5,255,000 Granted — $ — — Exercised — $ — — Cancelled — $ — — Outstanding at October 31, 2020 9,432,875 $ 0.88 $ 4,039,000
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 2020 2019 Volatility — % 79.16 % Risk-free interest rate — % 1.52 % Dividend yield — % 0.0 % Expected life — 5.36 years

Liquidity (Details Narrative)

Liquidity (Details Narrative) - USD ($)	3 Months Ended
	Oct. 31, 2020	Oct. 31, 2019	Jul. 31, 2020
Liquidity
Cumulative net loss	$ (123,654,000)		$ (123,474,000)
Net income (loss)	(180,000)	$ (1,125,000)
Revenue	1,591,000	398,000
Cash balance	(373,000)	506,000
Cash and cash equivalents	$ 3,466,000	$ 904,000	$ 3,839,000

Significant Accounting Polici_2

Significant Accounting Policies (Details Narrative) - USD ($)	3 Months Ended
	Oct. 31, 2020	Oct. 31, 2019
Dilutive common share	11,773,140	9,578,390
Impairment of long-lived assets
Customer Concentration Risk [Member] | Net Product Sales [Member] | Individual Customer One [Member]
Concentration risk percentage	20.00%	18.00%
Customer Concentration Risk [Member] | Net Product Sales [Member] | Individual Customer Two [Member]
Concentration risk percentage	11.00%	12.00%
Customer Concentration Risk [Member] | Net Product Sales [Member] | No Other Individual Customer [Member]
Concentration risk percentage	10.00%	10.00%
Customer Concentration Risk [Member] | Net Product Sales [Member] | Individual Customer Three [Member]
Concentration risk percentage		11.00%
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Customer One [Member]
Concentration risk percentage	31.00%
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Customers Two [Member]
Concentration risk percentage	11.00%
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Customer One [Member]
Concentration risk percentage		22.00%
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Customer Two [Member]
Concentration risk percentage		14.00%
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Customer Three [Member]
Concentration risk percentage		13.00%
Customer Concentration Risk [Member] | Purchases [Member] | Vendor One [Member]
Concentration risk percentage	54.00%	20.00%
Customer Concentration Risk [Member] | Purchases [Member] | Vendor Two [Member]
Concentration risk percentage	10.00%
Customer Concentration Risk [Member] | Accounts Payable [Member] | Vendor One [Member]
Concentration risk percentage	47.00%	22.00%

Significant Accounting Polici_3

Significant Accounting Policies - Schedule of Inventories (Details) - USD ($)	Oct. 31, 2020	Jul. 31, 2020
Accounting Policies [Abstract]
Raw materials	$ 17,000	$ 17,000
Finished goods	716,000	530,000
Inventory, net	$ 733,000	$ 547,000

Stockholders' Equity (Details N

Stockholders' Equity (Details Narrative) - USD ($)	Oct. 02, 2019	Oct. 31, 2019
Value of common stock shares		$ 830,000
Private Placement [Member]
Value of common stock shares	$ 830,000
Number of common stock shares issued	2,862,068
Price per share	$ 0.29
Proceeds from issuance of private placement	$ 830,000
Tom Y Lee [Member] | Private Placement [Member]
Investments amount	290,000
Dale Okuno [Member] | Private Placement [Member]
Investments amount	$ 250,000

Share-Based Compensation (Detai

Share-Based Compensation (Details Narrative) - USD ($)	1 Months Ended	3 Months Ended
	Feb. 29, 2016	Oct. 31, 2020	Oct. 31, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation, vesting period		1 year 15 days
Number of units, vested		500,000
Unrecognized non-cash compensation costs		$ 535,000
Options issued to purchase common stock exercisable		7,472,250
Weighted average exercise price		$ 0.94
Weighted average contractual term		4 years 1 month 6 days
Share-based compensation		$ 208,000	$ 268,000
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		33,000
2017 Equity Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation, vesting period		10 years
Weighted-average contractual term of expected to vest		5 years 18 days
Number of shares available for issuance under the plan		181,000
Common stock, shares reserved		5,000,000
Restricted Stock Unit Awards (RSU's) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation, vesting period		2 years
Compensation cost recognized			$ 190,000
Number of units, vested		1,512,500
Restricted stock units vested description			These RSUs are issued upon settlement date which is defined as "for each Vested Unit, the earliest of (i) the ten-year anniversary of the Grant Date; (ii) sixty days after the date the Grantee's Service ceases for any reason and such cessation constitutes a "separation from service" within the meaning of Section 409A of the Code; (iii) the date of Grantee's death or (iv) the date of a Change in Control that constitutes a "change in control event" within the meaning of Section 409A of the Code".
Unrecognized non-cash compensation costs		$ 206,000
Restricted Stock Unit Awards (RSU's) [Member] | Vested and Issuable [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of units, vested		1,512,500
Weighted-average contractual term of expected to vest		2 years 6 months
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		$ 21,000	$ 28,000
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] | Consultants and Others [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation, vesting period		10 years

Share-Based Compensation - Sche

Share-Based Compensation - Schedule of Restricted Stock Activity (Details) - Restricted Stock Unit Awards (RSU's) [Member]	3 Months Ended
	Oct. 31, 2020shares
Outstanding, Beginning balance	2,012,500
Granted
Issued
Forfeited
Outstanding, Ending balance	2,012,500

Share-Based Compensation - Sc_2

Share-Based Compensation - Schedule of Restricted Stock Activity (Details) (Parenthetical)	3 Months Ended
	Oct. 31, 2020shares
Number of units, vested and issuable	500,000
Restricted Stock Unit Awards (RSU's) [Member]
Number of units, vested and issuable	1,512,500

Share-Based Compensation - Sc_3

Share-Based Compensation - Schedule of Stock Option Activity (Details)	3 Months Ended
	Oct. 31, 2020USD ($)$ / sharesshares
Share-based Payment Arrangement [Abstract]
Options Outstanding Shares, Beginning Balance | shares	9,432,875
Options Granted, Shares | shares
Options Exercised, Shares | shares
Options Cancelled, Shares | shares
Options Outstanding Shares, Ending Balance | shares	9,432,875
Weighted- Average Exercise Price Outstanding, Beginning Balance | $ / shares	$ 0.88
Weighted- Average Exercise Price Granted | $ / shares
Weighted- Average Exercise Price Exercised | $ / shares
Weighted- Average Exercise Price Cancelled | $ / shares
Weighted- Average Exercise Price Outstanding, Ending Balance | $ / shares	$ 0.88
Aggregate Intrinsic Value Outstanding, Beginning Balance | $	$ 5,255,000
Aggregate Intrinsic Value Outstanding, Ending Balance | $	$ 4,039,000

Share-Based Compensation - Sc_4

Share-Based Compensation - Schedule of Fair Value Assumptions (Details)	3 Months Ended
	Oct. 31, 2020	Oct. 31, 2019
Share-based Payment Arrangement [Abstract]
Volatility	0.00%	79.16%
Risk-free interest rate	0.00%	1.52%
Dividend yield	0.00%	0.00%
Expected life	0 years	5 years 4 months 9 days

Related Party Transactions (Det

Related Party Transactions (Details Narrative) - USD ($)	Oct. 31, 2020	Jul. 31, 2020	Oct. 31, 2019
Accounts payable	$ 773,000	$ 1,344,000
Board Fees due to Officers and Directors [Member]
Accounts payable	$ 60,000		$ 90,000