Document And Entity Information
Document And Entity Information - shares | 6 Months Ended | |
Jan. 31, 2016 | Mar. 09, 2016 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jan. 31, 2016 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,016 | |
Entity Registrant Name | PURE BIOSCIENCE, INC. | |
Entity Central Index Key | 1,006,028 | |
Entity Current Reporting Status | Yes | |
Current Fiscal Year End Date | --07-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 61,596,481 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Jan. 31, 2016 | Jul. 31, 2015 |
Current assets | ||
Cash and cash equivalents | $ 6,706,000 | $ 1,321,000 |
Accounts receivable | 106,000 | 189,000 |
Inventories, net | 237,000 | 207,000 |
Restricted cash | 75,000 | 75,000 |
Prepaid expenses | 88,000 | 187,000 |
Total current assets | 7,212,000 | 1,979,000 |
Property, plant and equipment, net | 231,000 | 90,000 |
Patents, net | 1,110,000 | 1,192,000 |
Total assets | 8,553,000 | 3,261,000 |
Current liabilities | ||
Accounts payable | 582,000 | 560,000 |
Restructuring liability | 49,000 | 59,000 |
Accrued liabilities | 201,000 | 246,000 |
Derivative liability | 17,618,000 | 4,000 |
Total current liabilities | 18,450,000 | 869,000 |
Deferred rent | 7,000 | 9,000 |
Total liabilities | $ 18,457,000 | $ 878,000 |
Commitments and contingencies (See Note 6) | ||
Stockholders' equity | ||
Preferred stock, $0.01 par value: 5,000,000 shares authorized, no shares issued | ||
Common stock, $0.01 par value: 100,000,000 shares authorized, 60,175,975 shares issued and outstanding at January 31, 2016, and 41,859,297 shares issued and outstanding at July 31, 2015 | $ 602,000 | $ 420,000 |
Additional paid-in capital | 92,064,000 | 90,811,000 |
Accumulated deficit | (102,570,000) | (88,848,000) |
Total stockholders' equity (deficit) | (9,904,000) | 2,383,000 |
Total liabilities and stockholders? equity (deficit) | $ 8,553,000 | $ 3,261,000 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jan. 31, 2016 | Jul. 31, 2015 |
Condensed Consolidated Balance Sheets [Abstract] | ||
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 60,175,975 | 41,859,297 |
Common stock, shares outstanding | 60,175,975 | 41,859,297 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jan. 31, 2016 | Jan. 31, 2015 | Jan. 31, 2016 | Jan. 31, 2015 | |
Condensed Consolidated Statements of Operations [Abstract] | ||||
Net product sales | $ 176,000 | $ 273,000 | $ 362,000 | $ 390,000 |
Operating costs and expenses | ||||
Cost of goods sold | 48,000 | 111,000 | 102,000 | 156,000 |
Selling, general and administrative | 1,386,000 | 1,201,000 | 2,472,000 | 2,524,000 |
Research and development | 238,000 | 215,000 | 474,000 | 391,000 |
Share-based compensation | 763,000 | 482,000 | 1,435,000 | 985,000 |
Total operating costs and expenses | 2,435,000 | 2,009,000 | 4,483,000 | 4,056,000 |
Loss from operations | (2,259,000) | (1,736,000) | (4,121,000) | (3,666,000) |
Other income (expense) | ||||
Fair value of derivative liabilities in excess of proceeds | (859,000) | (1,867,000) | ||
Change in derivative liability | (7,790,000) | 5,000 | (7,747,000) | 4,000 |
Interest expense, net | (3,000) | (3,000) | (5,000) | (5,000) |
Other income (expense), net | 9,000 | (2,000) | 18,000 | (3,000) |
Total other income (expense) | (8,643,000) | (9,601,000) | (4,000) | |
Net loss | $ (10,902,000) | $ (1,736,000) | $ (13,722,000) | $ (3,670,000) |
Basic and diluted net loss per share | $ (0.19) | $ (0.04) | $ (0.27) | $ (0.10) |
Shares used in computing basic and diluted net loss per share | 58,678,242 | 39,851,590 | 50,848,785 | 38,440,396 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows - USD ($) | 6 Months Ended | |
Jan. 31, 2016 | Jan. 31, 2015 | |
Operating activities | ||
Net loss | $ (13,722,000) | $ (3,670,000) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Share-based compensation | 1,435,000 | 985,000 |
Amortization of stock issued for services | 106,000 | 44,000 |
Fair value of derivative liabilities in excess of proceeds | 1,867,000 | |
Depreciation and amortization | 103,000 | 103,000 |
Change in fair value of derivative liability | 7,747,000 | (4,000) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 83,000 | 7,000 |
Inventories | (30,000) | 63,000 |
Prepaid expenses | (7,000) | (23,000) |
Accounts payable and accrued liabilities | (33,000) | (1,008,000) |
Deferred rent | (2,000) | (2,000) |
Net cash used in operating activities | (2,453,000) | (3,505,000) |
Investing activities | ||
Investment in patents | (8,000) | (6,000) |
Purchases of property, plant and equipment | (154,000) | (68,000) |
Net cash used in investing activities | (162,000) | (74,000) |
Financing activities | ||
Net proceeds from the sale of common stock | 8,000,000 | 7,401,000 |
Net cash provided by financing activities | 8,000,000 | 7,401,000 |
Net increase in cash and cash equivalents | 5,385,000 | 3,822,000 |
Cash and cash equivalents at beginning of period | 1,321,000 | 1,321,000 |
Cash and cash equivalents at end of period | 6,706,000 | 3,908,000 |
Supplemental disclosure of cash flow information | ||
Cash paid for taxes | $ 2,000 | $ 1,600 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jan. 31, 2016 | |
Basis of Presentation [Abstract] | |
Basis of Presentation | 1. Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the consolidated accounts of P URE Bioscience, Inc. and its wholly owned subsidiary, ETIH2O Corporation, a Nevada corporation. ETIH2O Corporation currently has no business operations and no material assets or liabilities and there have been no significant transactions related to ETIH2O Corporation 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 P URE 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 three and six months ended January 31 , 201 6 are not necessarily indicative of the results that may be expected for other quarters or the year ending July 31, 201 6 . The July 31, 201 5 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, 201 5 included in our Annual Report on Form 10-K covering such period filed with the Securities and Exchange Commission, or SEC, on October 28, 201 5 . 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 | 6 Months Ended |
Jan. 31, 2016 | |
Liquidity [Abstract] | |
Liquidity | 2. Liquidity 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 January 31 , 201 6 , we have incurred a cumulative net loss of $102,570,000 . As of January 31 , 201 6 , we had $6,706,000 in cash and cash equivalents, and $582,000 of accounts payable. As of January 31 , 201 6 , we have no long-term debt. 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. We expect that we will need to increase our liquidity and capital resources by one or more measures. These measures may include, but are not limited to, the following: reducing operating expenses; obtaining financing through the issuance of equity, debt, or convertible securities; entering into partnerships, licenses, or other arrangements with third parties; and reducing the exercise price of outstanding warrants. Any one of these measures could substantially reduce the value to us of our technology and its commercial potential. If we issue equity, debt or convertible securities to raise additional funds, our existing stockholders may experience dilution, and the new equity, debt or convertible securities may have rights, preferences and privileges senior to those of our existing stockholders. There is no guarantee that we would be able to obtain capital on terms acceptable to us, or at all. If we are unable to obtain sufficient capital, it would have a material adverse effect on our business and operations. It could cause us to fail to execute our business plan, fail to take advantage of future opportunities, or fail to respond to competitive pressures or customer requirements. It also may require us to delay, scale back or eliminate some or all of our research and development programs, to license to third parties the right to commercialize products or technologies that we would otherwise commercialize ourselves, or to reduce or cease operations. If adequate funds are not available when needed, we may be required to significantly modify our business model and operations to reduce spending to a sustainable level. 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 needs over the next 12 months. However, we do not yet have, and we may never have, significant cash inflows from product sales or from other sources of revenue to offset our ong oing and planned investments in research and development projects, regulatory submissions, business development activities, and sales and marketing, among other investments. Some or all of our ongoing or planned investments may not be successful. In addition, irrespective of our cash resources, we may be contractually or legally obligated to make certain investments which cannot be postponed. |
Net Loss Per Share
Net Loss Per Share | 6 Months Ended |
Jan. 31, 2016 | |
Net Loss Per Share [Abstract] | |
Net Loss Per Share | 3. Net Loss Per Share Basic net loss per common share is computed as net loss divided by the weighted average number of common shares outstanding for the period. Our diluted net loss per common share is the same as our basic net loss per common share because we incurred a net loss during each period presented, and the potentially dilutive securities from the assumed exercise of all outstanding stock options, restricted stock units, and warrants would have an anti-dilutive effect. As of January 31 , 201 6 and 201 5 , 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 28,609,468 and 10,348,667 , respectively. |
Comprehensive Loss
Comprehensive Loss | 6 Months Ended |
Jan. 31, 2016 | |
Comprehensive Loss [Abstract] | |
Comprehensive Loss | 4. Comprehensive Loss Comprehensive loss is defined as the change in equity during a period from transactions and other events and circumstances from non-owner sources, including unrealized gains and losses on marketable securities and foreign currency translation adjustments. For the three and six months ended January 31 , 201 6 and 201 5 , our comprehensive loss consisted only of net loss. |
Inventory
Inventory | 6 Months Ended |
Jan. 31, 2016 | |
Inventory [Abstract] | |
Inventory | 5. Inventory Inventories are stated at the lower of cost or net realizable value, and net of a valuation allowance for potential excess or obsolete material. Cost is determined using the average cost method. Depreciation related to manufacturing is systematically allocated to inventory produced, and expensed through cost of goods sold at the time inventory is sold. Inventories consist of the following: January 31, July 31, 2016 2015 Raw materials $ 140,000 $ 96,000 Finished goods 97,000 111,000 $ 237,000 $ 207,000 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jan. 31, 2016 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | 6. Commitments and Contingencies Severance Agreement On August 13, 2013, the Company entered into a Severance and Release Agreement with Dennis Brovarone, a former Board member. Mr. Brovarone will receive $91,000 , payable in 60 monthly installments of approximately $1,600 , commencing December 11, 2013 for amounts previously accrued as of July 31, 2013. Approximately $49,000 rema ins payable under the agreement and is included in the accrued restructuring liability section of the condensed consolidated balance sheets as of January 31, 2016 . |
Impairment of Long-Lived Assets
Impairment of Long-Lived Assets | 6 Months Ended |
Jan. 31, 2016 | |
Impairment of Long-Lived Assets [Abstract] | |
Impairment of Long-Lived Assets | 7 . 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 and six months ended January 3 1 , 201 6 and 201 5 , no impairment of long-lived assets was indicated or recorded. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 6 Months Ended |
Jan. 31, 2016 | |
Fair Value of Financial Instruments [Abstract] | |
Fair Value of Financial Instruments | 8 . Fair Value of Financial Instruments Fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the authoritative guidance establishes a three-tier value hierarchy, which prioritizes the inputs used in measuring fair value as follows: · Level 1 – Quoted prices in active markets for identical assets or liabilities. · Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. · Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. In connection with the October and Novemer 2015 Private Placements and a prior Bridge Loan , we issued warrants with derivative features. These instruments are accounted for as derivative liabilities (See Note 9). We used Level 3 inputs for the valuation methodology of the derivative liabilities. The estimated fair values were computed using a Monte Carlo option pricing model based on various assumptions. Our derivative liabilities are adjusted to reflect estimated fair value at each period end, with any decrease or increase in the estimated fair value being recorded in other income or expense accordingly, as adjustments to the fair value of the derivative liabilities . Various factors are considered in the pricing models we use to value the warrants, including the Company’s current stock price, the remaining life of the warrants, the volatility of the Company’s stock price, and the risk free interest rate. Future changes in these factors will have a significant impact on the computed fair value of the warrant liability. As such, we expect future changes in the fair value of the warrants to vary significantly from quarter to quarter. The following table provides a reconciliation of the beginning and ending balances of the derivative liabilities for the six months ended January 31, 2016: Warrant Liability Balance at July 31, 2015 $ Issuances Settlement of warrant liability — Adjustments to estimated fair value Balance at January 31, 2016 $ |
Derivative Liability
Derivative Liability | 6 Months Ended |
Jan. 31, 2016 | |
Derivative Liability [Abstract] | |
Derivative Liability | 9. Derivative Liability On October 23, 2015 (the “ October Closing Date”), we c ompleted a first closing of a private placement financing (the “Private Placement Financing”), where we issued a n aggregate of 13,333,333 shares of our common stock (the “Common Stock”), a warrant to purchase up to an aggregate of 6,666,666 shares of common stock with a term of five years and a warrant to purchase up to an aggregate of 8,666,666 shares of common stock with a term of six months (See Note 10). On November 23, 2015 , we completed a second closing of the Private Placement Financing, where we issued 4,444,439 shares of Common Stock, warrant s to purchase up to an aggregate of 2,222,217 shares of common stock with a term of five years and a warrant to purchase up to an aggregate of 2,820,670 shares of common stock with a term of six months (See Note 10). We accounted for the combined 20,376,219 warrants issued in connection with the Private Placement Financing s in accordance with the accounting guidance for derivatives. The applicable accounting guidance sets forth a two-step model to be applied in determining whether a financial instrument is indexed to an entity’s own stock, which would qualify such financial instruments for a scope exception. This scope exception specifies that a contract that would otherwise meet the definition of a derivative financial instrument would not be considered as such if the contract is both (i) indexed to the entity’s own stock and (ii) classified in the stockholders’ equity section of the entity’s balance sheet. We determined the warrants were ineligible for equity classification due to anti-dilution provisions set forth therein. The estimated fair value of the derivative liabilities issued on the October Closing Date , as of the October Closing Date, and at January 31, 201 6 , was $7,008,000 and $13,229,000 , respectively . The following assumptions were used as inputs to the Monte Carlo option pricing model at January 31, 2016: for the five year warrant, stock price of $1.20 and a warrant exercise price of $0.45 as of the valuation date; our historical stock price volatility of 90%; risk free interest rate on U.S. treasury notes of 1.3%; warrant expiration of 4.7 years; for the six month warrant, stock price of $1.20 and a warrant exercise price of $0.45 as of the valuation date; our historical stock price volatility of 90%; risk free interest rate on U.S. treasury notes of 0.3%; warrant expiration of 0.2 years. The estimated fair value of the derivative liabilities issued on the November Closing Date , as of the November Closing Date, and at January 31, 201 6 , was $2,859,000 and $4,379,000 , respectively . The following assumptions were used as inputs to the Monte Carlo option pricing model at January 31, 2016: for the five year warrant, stock price of $1.20 and a warrant exercise price of $0.45 as of the valuation date; our historical stock price volatility of 90%; risk free interest rate on U.S. treasury notes of 1.3%; warrant expiration of 4.8 years; for the six month warrant, stock price of $1.20 and a warrant exercise price of $0.45 as of the valuation date; our historical stock price volatility of 90%; risk free interest rate on U.S. treasury notes of 0.4%; warrant expiration of 0.3 years Given that the fair value of the derivative liabilities issued on the October Closing Date exceeded the total proceeds of the private placement of $6,000,000 , as at the October Closing Date, no net amounts were allocated to the common stock. The $1,008,000 amount by which the recorded liabilities exceeded the proceeds was charged to other expense at the October Closing Date. Given that the fair value of the derivative liabilities issued on the November Closing Date exceeded the total proceeds of the private placement of $2,000,000 , as at the November Closing Date, no net amounts were allocated to the common stock. The $859,000 amount by which the recorded liabilities exceeded the proceeds was charged to other expense at the November Closing Date . We have revalued the derivative liability as of January 31, 2016 , and will continue to do so on each subsequent balance sheet date until the securities to which to derivative liabilities relate are exercised or expire, with any changes in the fair value between reporting periods recorded as other income or expense. As of January 31 , 201 6 , we had a warrant liability of $10,000 related t o 132,420 warrants issued pursuant to a Bridge Loan financing that occurred during the fourth quarter of 2012. Currently there are 9,709 warrants outstanding issued in connection with the Bridge Loan. The following assumptions were used as inputs to the model at January 31, 2016: stock price of $1.20 and a warrant exercise price of $0.20 as of the valuation date; our historical stock price volatility of 82.32%; risk free interest rate on U.S. treasury notes of 0.3%; warrant expiration of 0.90 years. On January 31, 201 6 , the total value of the derivative liabilities was $17,618,000 . The change in fair value of the warrant liability for the three and six months ended January 31, 201 6 , was a n increase of $ 7,790,000 and $ 7,747,000 , respectively, which was recorded as a change in derivative liability in the consolidated statement of operations. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jan. 31, 2016 | |
Comprehensive Loss [Abstract] | |
Stockholders' Equity | 10. Stockholders’ Equity Private Placements On October 23, 2015, we completed the initial closing of the Private Placement Financing pursuant to a securities purchase agreement (the “Securities Purchase Agreement”), providing for the issuance and sale by us to Franchise Brands, LLC (the “Investor”) of (i) an aggregate of 13,333,333 shares (collectively, the “Purchase Shares”) of our common stock (the “Common Stock”) at a purchase price of $0.45 per share, (ii) a warrant to purchase up to an aggregate of 6,666,666 shares of Common Stock with a term of five years (the “Five-Year Warrant”) and (iii) a warrant to purchase up to an aggregate of 8,666,666 shares of Common Stock with a term of six months and only exercisable for cash (the “Six-Month Warrant ”), for aggregate gross proceeds to us of $6.0 million. On November 23, 2015, we completed the second and final closing of the Private Placement Financing. We raised $2.0 million in this closing providing for the issuance to various investors (i) an aggregate of 4,444,439 Purchase Shares at a purchase price of $0.45 per share, (ii) Five-Year Warrants to purchase up to an aggregate of 2,222,217 shares of Common Stock (iii) Six-Month Warrants to purchase up to an aggregate of 2,820,670 shares of Common Stock (the “Six-Month Warrants,” together with the Five-Year Warrants, the “Warrants” and the shares issuable upon exercise of the Warrants, collectively, the “Warrant Shares”). We did not engage a placement agent or investment banker to facilitate the Private Placement Financing. We intend to use the aggregate net proceeds of the Private Placement Financing primarily for working capital and general corporate purposes. We offered the securities in the Private Placement Financing to the Company’s existing investors who previously purchased securities in our private placement financings in August and September of 2014 (the “Prior Financings”). Tom Lee, a member of our board of directors and a participant in the Prior Financings, together with certain of his affiliates, invested approximately $472,000 in the final closing of the Private Placement Financing on the same terms offered to the other Investors. The Warrants issued in connection with the Private Placement Financing have an exercise price of $0.45 per share, are exercisable immediately after their issuance and have a term of exercise equal to the earlier of (i) five years or six months, for the Five-Year Warrants and Six-Month Warrants, respectively, after their issuance date or (ii) the consummation of an Acquisition Event (as defined in the Warrants). The Warrants are subject to a broad-based anti-dilution adjustment in the event the Company issues shares of Common Stock without consideration or for consideration per share less than the exercise price in effect immediately prior to such issuance; provided however, that such adjustment does not apply to an Excluded Issuance (as such term is defined in the Warrants). Additionally, the number of Warrant Shares issuable upon exercise of the Warrants and the applicable exercise price therefor are subject to adjustment in the event of a stock dividend, stock split or combination as set forth in the Warrants. We also entered into a registration rights agreement with the Investors who participated in the Private Placement Financing (the “Registration Rights Agreement”), pursuant to which we will be obligated, upon request of Investors holding 75% of the Issuable Shares (as defined therein) and subject to certain conditions, to file with the Securities and Exchange Commission (the “Commission”) as soon as practicable, but in any event within 60 days after receiving such applicable request, a registration statement on Form S-1 (the “Resale Registration Statement”) to register the Purchase Shares and the Warrant Shares for resale under the Securities Act and other securities issued or issuable with respect to or in exchange for the Purchase Shares or Warrant Shares. We are obligated to use our commercially reasonable efforts to cause the Resale Registration Statement to be declared effective by the SEC as promptly as reasonably practicable after the filing of the Resale Registration Statement, but no monetary penalty or liquidated damages will be imposed upon the Company if the Registration Statement is not declared effective by the SEC. During the six months ended January 31, 201 5 , we issued a total of 10,086,025 shares of common stock and warrants to purchase 4,652,312 shares of common stock for gross proceeds of $7,493,000 . After deducting fees of $92,000 , the net proceeds to us were $7,401,000 . The warrants issued during the six months ended January 31, 2015 have a five -year term, are exercisable immediately, and have exercise prices ranging from $0.01 to $0.75 per share. A fair value of $4,397,000 was estimated for the warrants using the Black-Sholes valuation method using a volatility of 133.74% , an interest rate of 1.50% and a dividend yield of zero . We determined that the warrants issued in connection with the private placements were equity instruments and did not represent derivative instruments. Warrants During the six months ended January 31, 2016, there was a net exercise on 28,000 warrants which resulted in the issuance of 13,906 shares of our common stock. As these warrants were net exercised, as permitted under the respective warrant agreement, we did not receive any cash proceeds. The warrants were issued in connection with a prior year private placement and were considered equity instruments. |
Share-Based Compensation
Share-Based Compensation | 6 Months Ended |
Jan. 31, 2016 | |
Share-Based Compensation [Abstract] | |
Share-Based Compensation | 1 1 . Share-Based Compensation During the three months ended January 31, 2016, the Compensation Committee of the Board of Directors issued 200,000 restricted stock units (“RSUs”) to Henry R. Lambert, our Chief Executive Officer. The RSUs vest based on performance conditions and expire July 31, 2018. If the performance conditions are not met, or expected to be met, no compensation cost will be recognized on the underlying RSUs. If the performance condition is expected to be met, the expense will be allocated over the performance period. The RSUs granted to Mr. Lambert were not granted pursuant to any compensatory, bonus, or similar plan maintained or otherwise sponsored by the Company. In addition, during the three months ended January 31, 2016, we issued 612,500 RSUs to key employees. The RSUs vest based on performance and service conditions. If the performance conditions are not met, or expected to be met, no compensation cost will be recognized on the underlying RSUs. If the performance condition is expected to be met, the expense will be allocated over the performance period. During the three and six months ended January 31, 2016, 506,250 and 525,000 RSUs vested based on service conditions that were satisfied during the period, resulting in the issuance of 506,250 and 525,000 shares of common stock, respectively. Of the 2,685,000 RSUs outstanding, we currently expect 1,900,000 to vest. As of January 31, 2016, there was $332,000 of unrecognized non-cash compensation cost related to RSUs we expect to vest, which will be recognized over a weighted average period of 0.37 years. During the six months ended January 31, 2016, 812,500 RSUs were forfeited. During the three months ended January 31, 2016, we issued options to purchase 110,000 shares of our common stock to key employees, at an exercise price of $0.75 , valued at $46,000 (based on the Black-Scholes Option Pricing Model assuming no dividend yield, volatility of 96.60% , and a risk-free interest rate of 0.92 %). The options vested on the date of grant and carry a five year term. As of January 31, 2016, there was $52,000 of unrecognized non-cash compensation cost related to unvested stock options, which will be recognized over a weighted average period of 0.87 years. For the three months ended January 31, 2016 and 2015, share-based compensation expense for outstanding RSUs and stock options was $763,000 and $482,000, respectively. For the six months ended January 31, 2016 and 2015, share-based compensation expense was $1,435,000 and $985,000, respectively. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 6 Months Ended |
Jan. 31, 2016 | |
Recent Accounting Pronouncements [Abstract] | |
Recent Accounting Pronouncements | 1 2 . Recent Accounting Pronouncements No recent accounting pronouncements or other authoritative guidance have been issued that management considers likely to have a material impact on our consolidated financial statements. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jan. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | 1 3 . Subsequent Events None. |
Inventory (Tables)
Inventory (Tables) | 6 Months Ended |
Jan. 31, 2016 | |
Inventory [Abstract] | |
Schedule of Inventory, Current | January 31, July 31, 2016 2015 Raw materials $ 140,000 $ 96,000 Finished goods 97,000 111,000 $ 237,000 $ 207,000 |
Fair Value of Financial Instr20
Fair Value of Financial Instruments (Tables) | 6 Months Ended |
Jan. 31, 2016 | |
Fair Value of Financial Instruments [Abstract] | |
Schedule of Derivative Liabilities at Fair Value | The following table provides a reconciliation of the beginning and ending balances of the derivative liabilities for the six months ended January 31, 2016: Warrant Liability Balance at July 31, 2015 $ Issuances Settlement of warrant liability — Adjustments to estimated fair value Balance at January 31, 2016 $ |
Liquidity (Details)
Liquidity (Details) - USD ($) | Jan. 31, 2016 | Jul. 31, 2015 | Jan. 31, 2015 | Jul. 31, 2014 | Jul. 31, 2013 |
Liquidity [Abstract] | |||||
Accumulated deficit | $ (102,570,000) | $ (88,848,000) | |||
Cash and cash equivalents | 6,706,000 | 1,321,000 | $ 3,908,000 | $ 1,321,000 | $ 86,000 |
Accounts Payable, Current | 582,000 | $ 560,000 | |||
Long term debt | $ 0 |
Net Loss Per Share (Details)
Net Loss Per Share (Details) - shares | 6 Months Ended | |
Jan. 31, 2016 | Jan. 31, 2015 | |
Net Loss Per Share [Abstract] | ||
Antidilutive shares | 28,609,468 | 10,348,667 |
Inventory (Schedule Of Inventor
Inventory (Schedule Of Inventories) (Details) - USD ($) | Jan. 31, 2016 | Jul. 31, 2015 |
Inventory [Abstract] | ||
Raw materials | $ 140,000 | $ 96,000 |
Finished goods | 97,000 | 111,000 |
Inventory, Net, Total | $ 237,000 | $ 207,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | Aug. 13, 2013 | Jan. 31, 2016 | Jul. 31, 2015 |
Commitments And Contingencies [Line Items] | |||
Restructuring liability | $ 49,000 | $ 59,000 | |
Employee Severance [Member] | |||
Commitments And Contingencies [Line Items] | |||
Restructuring liability | $ 49,000 | ||
Dennis Brovarone [Member] | |||
Commitments And Contingencies [Line Items] | |||
Release agreement payment | $ 91,000 | ||
Cash severance payment period | 60 days | ||
Monthly installment amount | $ 1,600 |
Impairment of Long-Lived Asse25
Impairment of Long-Lived Assets (Details) - USD ($) | 6 Months Ended | |
Jan. 31, 2016 | Jan. 31, 2015 | |
Impairment of Long-Lived Assets [Abstract] | ||
Impairment of long-lived assets | $ 0 | $ 0 |
Fair Value of Financial Instr26
Fair Value of Financial Instruments (Details) | 6 Months Ended |
Jan. 31, 2016USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Beginning balance | $ 4,000 |
Ending balance | 17,618,000 |
Warrant [Member] | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Beginning balance | 4,000 |
Issuances | 9,867,000 |
Adjustments to estimated fair value | 7,747,000 |
Ending balance | $ 17,618,000 |
Derivative Liability (Details)
Derivative Liability (Details) - USD ($) | Nov. 23, 2015 | Oct. 23, 2015 | Nov. 23, 2015 | Oct. 23, 2015 | Jan. 31, 2016 | Jan. 31, 2015 | Jan. 31, 2016 | Jan. 31, 2015 | Nov. 30, 2015 | Jul. 31, 2015 | Jul. 10, 2012 |
Convertible Note And Derivative Liability [Line Items] | |||||||||||
Common stock, shares issued | 60,175,975 | 60,175,975 | 41,859,297 | ||||||||
Derivative liability | $ 17,618,000 | $ 17,618,000 | $ 4,000 | ||||||||
Volatility | 96.60% | 133.74% | |||||||||
Interest rate | 0.92% | 1.50% | |||||||||
Fair value of derivative liabilities in excess of proceeds | $ 859,000 | 1,867,000 | |||||||||
Change in derivative liability | 7,790,000 | $ (5,000) | 7,747,000 | $ (4,000) | |||||||
Bridge Loan [Member] | |||||||||||
Convertible Note And Derivative Liability [Line Items] | |||||||||||
Derivative liability | $ 10,000 | $ 10,000 | |||||||||
Share price | $ 1.20 | $ 1.20 | |||||||||
Warrants exercise price | $ 0.20 | ||||||||||
Volatility | 82.32% | ||||||||||
Interest rate | 0.30% | ||||||||||
Warrant Expiration | 10 months 24 days | ||||||||||
Shares issued | 132,420 | ||||||||||
Warrants outstanding | 9,709 | 9,709 | |||||||||
Private Placement [Member] | |||||||||||
Convertible Note And Derivative Liability [Line Items] | |||||||||||
Warrants to purchase common stock shares | 4,652,312 | 4,652,312 | 20,376,219 | ||||||||
Common stock, shares issued | 4,444,439 | 13,333,333 | 4,444,439 | 13,333,333 | 10,086,025 | 10,086,025 | |||||
Share price | $ 0.45 | $ 0.45 | $ 0.45 | $ 0.45 | |||||||
Proceeds from issuance of private placement | $ 2,000,000 | $ 6,000,000 | $ 2,000,000 | $ 6,000,000 | $ 7,493,000,000,000 | ||||||
Fair value of derivative liabilities in excess of proceeds | 859,000 | 1,008,000 | |||||||||
Private Placement [Member] | Derivative 1 [Member] | |||||||||||
Convertible Note And Derivative Liability [Line Items] | |||||||||||
Derivative liability | $ 7,008,000 | $ 7,008,000 | $ 13,229,000 | $ 13,229,000 | |||||||
Private Placement [Member] | Derivative 2 [Member] | |||||||||||
Convertible Note And Derivative Liability [Line Items] | |||||||||||
Derivative liability | $ 2,859,000 | $ 2,859,000 | $ 4,379,000 | $ 4,379,000 | |||||||
Private Placement [Member] | Warrant [Member] | |||||||||||
Convertible Note And Derivative Liability [Line Items] | |||||||||||
Common stock, shares issued | 13,906 | 13,906 | |||||||||
Warrants exercise price | $ 0.45 | ||||||||||
Five Year Warrants [Member] | Private Placement [Member] | |||||||||||
Convertible Note And Derivative Liability [Line Items] | |||||||||||
Warrants to purchase common stock shares | 2,222,217 | 6,666,666 | 2,222,217 | 6,666,666 | |||||||
Warrants exercise period | 5 years | 5 years | |||||||||
Five Year Warrants [Member] | Private Placement [Member] | Derivative 1 [Member] | |||||||||||
Convertible Note And Derivative Liability [Line Items] | |||||||||||
Warrants exercise period | 5 years | ||||||||||
Share price | $ 1.20 | $ 1.20 | |||||||||
Warrants exercise price | $ 0.45 | ||||||||||
Volatility | 90.00% | ||||||||||
Interest rate | 1.30% | ||||||||||
Warrant Expiration | 4 years 8 months 12 days | ||||||||||
Five Year Warrants [Member] | Private Placement [Member] | Derivative 2 [Member] | |||||||||||
Convertible Note And Derivative Liability [Line Items] | |||||||||||
Warrants exercise period | 5 years | ||||||||||
Share price | 1.20 | $ 1.20 | |||||||||
Warrants exercise price | $ 0.45 | ||||||||||
Volatility | 90.00% | ||||||||||
Interest rate | 1.30% | ||||||||||
Warrant Expiration | 4 years 9 months 18 days | ||||||||||
Six Month Warrants [Member] | Derivative 1 [Member] | |||||||||||
Convertible Note And Derivative Liability [Line Items] | |||||||||||
Warrants exercise period | 6 months | ||||||||||
Six Month Warrants [Member] | Private Placement [Member] | |||||||||||
Convertible Note And Derivative Liability [Line Items] | |||||||||||
Warrants to purchase common stock shares | 2,820,670 | 8,666,666 | 2,820,670 | 8,666,666 | |||||||
Warrants exercise period | 6 months | 6 months | |||||||||
Six Month Warrants [Member] | Private Placement [Member] | Derivative 1 [Member] | |||||||||||
Convertible Note And Derivative Liability [Line Items] | |||||||||||
Share price | 1.20 | $ 1.20 | |||||||||
Warrants exercise price | $ 0.45 | ||||||||||
Volatility | 90.00% | ||||||||||
Interest rate | 0.30% | ||||||||||
Warrant Expiration | 2 months 12 days | ||||||||||
Six Month Warrants [Member] | Private Placement [Member] | Derivative 2 [Member] | |||||||||||
Convertible Note And Derivative Liability [Line Items] | |||||||||||
Warrants exercise period | 6 months | ||||||||||
Share price | $ 1.20 | $ 1.20 | |||||||||
Warrants exercise price | $ 0.45 | ||||||||||
Volatility | 90.00% | ||||||||||
Interest rate | 0.40% | ||||||||||
Warrant Expiration | 3 months 18 days |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) | Nov. 23, 2015 | Oct. 23, 2015 | Nov. 23, 2015 | Oct. 23, 2015 | Jan. 31, 2016 | Jan. 31, 2016 | Jan. 31, 2015 | Nov. 30, 2015 | Jul. 31, 2015 |
Proceeds from Issuance or Sale of Equity [Abstract] | |||||||||
Common stock, issued | 60,175,975 | 60,175,975 | 41,859,297 | ||||||
Transaction costs of stock issuance | $ 92,000 | ||||||||
Sale of stock, net proceeds | $ 7,401,000 | ||||||||
Expected term | 5 years | ||||||||
Fair value of warrants | $ 4,397,000 | ||||||||
Volatility | 96.60% | 133.74% | |||||||
Interest rate | 0.92% | 1.50% | |||||||
Dividend yield | 0.00% | 0.00% | |||||||
Investors holding percentage of issuable shares | 75.00% | ||||||||
Private Placement [Member] | |||||||||
Proceeds from Issuance or Sale of Equity [Abstract] | |||||||||
Common stock, issued | 4,444,439 | 13,333,333 | 4,444,439 | 13,333,333 | 10,086,025 | ||||
Share price | $ 0.45 | $ 0.45 | $ 0.45 | $ 0.45 | |||||
Warrants to purchase common stock shares | 4,652,312 | 20,376,219 | |||||||
Proceeds from issuance of private placement | $ 2,000,000 | $ 6,000,000 | $ 2,000,000 | $ 6,000,000 | $ 7,493,000,000,000 | ||||
Private Placement [Member] | Warrant [Member] | |||||||||
Proceeds from Issuance or Sale of Equity [Abstract] | |||||||||
Common stock, issued | 13,906 | 13,906 | |||||||
Warrants exercise price | $ 0.45 | ||||||||
Aggregate number of exercises | 28,000 | ||||||||
Minimum [Member] | |||||||||
Proceeds from Issuance or Sale of Equity [Abstract] | |||||||||
Warrants exercise price | $ 0.01 | ||||||||
Maximum [Member] | |||||||||
Proceeds from Issuance or Sale of Equity [Abstract] | |||||||||
Warrants exercise price | $ 0.75 | ||||||||
Tom Lee and Affiliates [Member] | Private Placement [Member] | |||||||||
Proceeds from Issuance or Sale of Equity [Abstract] | |||||||||
Proceeds from issuance of private placement | $ 472,000 | ||||||||
Five Year Warrants [Member] | Private Placement [Member] | |||||||||
Proceeds from Issuance or Sale of Equity [Abstract] | |||||||||
Warrants to purchase common stock shares | 2,222,217 | 6,666,666 | 2,222,217 | 6,666,666 | |||||
Warrants exercise period | 5 years | 5 years | |||||||
Six Month Warrants [Member] | Private Placement [Member] | |||||||||
Proceeds from Issuance or Sale of Equity [Abstract] | |||||||||
Warrants to purchase common stock shares | 2,820,670 | 8,666,666 | 2,820,670 | 8,666,666 | |||||
Warrants exercise period | 6 months | 6 months |
Share-Based Compensation (Detai
Share-Based Compensation (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jan. 31, 2016 | Jan. 31, 2015 | Jan. 31, 2016 | Jan. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized non-cash compensation costs | $ 52,000 | $ 52,000 | ||
Unrecognized non-cash compensation costs, weighted average period | 10 months 13 days | |||
Dividend yield | 0.00% | 0.00% | ||
Volatility | 96.60% | 133.74% | ||
Risk-free interest rate | 0.92% | 1.50% | ||
Term | 5 years | |||
Share-based compensation | $ 763,000 | $ 482,000 | $ 1,435,000 | $ 985,000 |
Restricted Stock Units "RSUs" [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares vested | 506,250 | 525,000 | ||
Shares outstanding | 2,685,000 | 2,685,000 | ||
Shares expected to vest | 1,900,000 | |||
Unrecognized non-cash compensation costs | $ 332,000 | $ 332,000 | ||
Unrecognized non-cash compensation costs, weighted average period | 4 months 13 days | |||
Shares forfeited | 812,500 | |||
Key Employees [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares issued | 612,500 | |||
Excercise price | $ 0.75 | $ 0.75 | ||
Shares issued value | $ 46,000 | |||
Key Employees [Member] | Restricted Stock Units "RSUs" [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock options granted | 110,000 | |||
Chief Executive Officer [Member] | Restricted Stock Units "RSUs" [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares issued | 200,000 |