Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jan. 31, 2017 | Mar. 22, 2017 | |
Document And Entity Information | ||
Entity Registrant Name | GENEREX BIOTECHNOLOGY CORP | |
Entity Central Index Key | 1,059,784 | |
Document Type | 10-Q | |
Document Period End Date | Jan. 31, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --07-31 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 1,359,757 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,016 |
CONSOLIDATED BALANCE SHEETS (UN
CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) | Jan. 31, 2017 | Jul. 31, 2016 |
Current Assets: | ||
Cash and cash equivalents | $ 75,039 | $ 16,899 |
Accounts receivable, net | 980 | |
Inventory, net | 20,998 | |
Other current assets | 102,416 | 8,077 |
Total Current Assets | 199,433 | 24,976 |
Property and Equipment, Net | 3,944 | 1,298 |
Intangible asset | 1,955,932 | |
Deposit | 500,000 | |
Other assets, net | 43,984 | |
TOTAL ASSETS | 2,703,293 | 26,274 |
Current Liabilities: | ||
Accounts payable and accrued expenses | 9,697,952 | 8,950,870 |
Loan to related parties | 14,047,544 | |
Loan payable | 50,000 | 50,000 |
Total Current Liabilities | 23,795,496 | 9,000,870 |
Derivative Warrant Liability | 2,567,328 | 2,048,846 |
Derivative Additional Investment Rights Liability | 193,408 | |
Total Liabilities | 26,362,824 | 11,243,124 |
Stockholders' Deficiency (Note 7): | ||
9% Convertible Preferred Stock | ||
Common stock, $.001 par value; authorized 2,450,000 and 2,450,000 shares at January 31, 2017 and July 31, 2016, respectively; 992,009 and 908,541 issued and outstanding at January 31, 2017 and July 31, 2016, respectively | 992 | 909 |
Common stock payable | 1,097,100 | |
Additional paid-in capital | 364,064,374 | 363,687,741 |
Accumulated deficit | (390,900,038) | (375,704,372) |
Accumulated other comprehensive income | 807,385 | 798,872 |
Non-controlling interest | 1,270,656 | |
Total Stockholders' Deficiency | (23,659,531) | (11,216,850) |
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY | 2,703,293 | 26,274 |
Series A Convertible Preferred Stock | ||
Stockholders' Deficiency (Note 7): | ||
9% Convertible Preferred Stock | ||
Series B Convertible Preferred Stock | ||
Stockholders' Deficiency (Note 7): | ||
9% Convertible Preferred Stock | ||
Series C Convertible Preferred Stock | ||
Stockholders' Deficiency (Note 7): | ||
9% Convertible Preferred Stock | ||
Series D Convertible Preferred Stock | ||
Stockholders' Deficiency (Note 7): | ||
9% Convertible Preferred Stock | ||
Series E Convertible Preferred Stock | ||
Stockholders' Deficiency (Note 7): | ||
9% Convertible Preferred Stock | ||
Series F Convertible Preferred Stock | ||
Stockholders' Deficiency (Note 7): | ||
9% Convertible Preferred Stock | ||
Series G Convertible Preferred Stock | ||
Stockholders' Deficiency (Note 7): | ||
9% Convertible Preferred Stock |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jan. 31, 2017 | Jul. 31, 2016 |
Common stock, par value (in dollars per share) | $ .001 | $ 0.001 |
Common stock, shares authorized | 2,450,000,000 | 2,450,000,000 |
Common stock, shares issued | 992,009 | 908,541 |
Common stock, shares outstanding | 992,009 | 908,541 |
Series A Convertible Preferred Stock | ||
Convertible preferred stock, par value (in dollars per share) | $ 1,000 | $ 1,000 |
Convertible preferred stock, shares authorized | 5,500 | 5,500 |
Convertible preferred stock, shares issued | 0 | 0 |
Convertible preferred stock, shares outstanding | 0 | 0 |
Convertible preferred stock, cumulative percentage of interest | 9.00% | 9.00% |
Series B Convertible Preferred Stock | ||
Convertible preferred stock, par value (in dollars per share) | $ 1,000 | $ 1,000 |
Convertible preferred stock, shares authorized | 2,000 | 2,000 |
Convertible preferred stock, shares issued | 0 | 0 |
Convertible preferred stock, shares outstanding | 0 | 0 |
Convertible preferred stock, cumulative percentage of interest | 9.00% | 9.00% |
Series C Convertible Preferred Stock | ||
Convertible preferred stock, par value (in dollars per share) | $ 1,000 | $ 1,000 |
Convertible preferred stock, shares authorized | 750 | 750 |
Convertible preferred stock, shares issued | 0 | 0 |
Convertible preferred stock, shares outstanding | 0 | 0 |
Convertible preferred stock, cumulative percentage of interest | 9.00% | 9.00% |
Series D Convertible Preferred Stock | ||
Convertible preferred stock, par value (in dollars per share) | $ 1,000 | $ 1,000 |
Convertible preferred stock, shares authorized | 750 | 750 |
Convertible preferred stock, shares issued | 0 | 0 |
Convertible preferred stock, shares outstanding | 0 | 0 |
Convertible preferred stock, cumulative percentage of interest | 9.00% | 9.00% |
Series E Convertible Preferred Stock | ||
Convertible preferred stock, par value (in dollars per share) | $ 1,000 | $ 1,000 |
Convertible preferred stock, shares authorized | 2,450 | 2,450 |
Convertible preferred stock, shares issued | 0 | 0 |
Convertible preferred stock, shares outstanding | 0 | 0 |
Convertible preferred stock, cumulative percentage of interest | 9.00% | 9.00% |
Series F Convertible Preferred Stock | ||
Convertible preferred stock, par value (in dollars per share) | $ 1,000 | $ 1,000 |
Convertible preferred stock, shares authorized | 4,150 | 4,150 |
Convertible preferred stock, shares issued | 2,075 | 120 |
Convertible preferred stock, shares outstanding | 0 | 120 |
Convertible preferred stock, cumulative percentage of interest | 9.00% | 9.00% |
Series G Convertible Preferred Stock | ||
Convertible preferred stock, par value (in dollars per share) | $ 1,000 | $ 1,000 |
Convertible preferred stock, shares authorized | 1,000 | 1,000 |
Convertible preferred stock, shares issued | 350 | 500 |
Convertible preferred stock, shares outstanding | 350 | 500 |
Convertible preferred stock, cumulative percentage of interest | 9.00% | 9.00% |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jan. 31, 2017 | Jan. 31, 2016 | Jan. 31, 2017 | Jan. 31, 2016 | |
Operating Expenses: | ||||
Research and development | $ 75,640 | $ 67,628 | $ 75,640 | $ 245,198 |
General and administrative | 140,087 | 89,904 | 242,905 | 1,229,913 |
Total Operating Expenses | 215,727 | 157,532 | 318,545 | 1,475,111 |
Operating Loss | (215,727) | (157,532) | (318,545) | (1,475,111) |
Other Income/(Expense): | ||||
Interest expense | (126,669) | (102,187) | (243,508) | (199,910) |
Impairment of goodwill | (14,335,822) | (14,335,822) | ||
Change in fair value of derivative liabilities (Note 8) | (1,104,969) | 212,329 | (325,074) | (103,634) |
Net (Loss) | (15,222,949) | (1,778,655) | ||
Net (loss) attributable to noncontrolling interests | (27,283) | (27,283) | ||
Net (Loss) Available to Common Stockholders | $ (15,755,904) | $ (47,390) | $ (15,195,666) | $ (1,778,655) |
Net (Loss) Per Common Share - Basic and Diluted | $ (17.16) | $ (0.05) | $ (16.63) | $ (2.07) |
Shares Used to Compute (Loss) per Share - basic and diluted | 918,416 | 870,325 | 913,479 | 860,226 |
Other Comprehensive Income | ||||
Net (Loss) | $ (15,755,904) | $ (47,390) | $ (15,195,666) | $ (1,778,655) |
Change in foreign currency translation adjustments | 1,339 | (2,152) | 8,513 | (5,087) |
Comprehensive Income (Loss) and Comprehensive Income (Loss) Available to Common Stockholders | $ (15,754,565) | $ (49,542) | $ (15,187,153) | $ (1,783,742) |
UNAUDITED CONDENSED INTERIM CON
UNAUDITED CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIENCY - USD ($) | 12 Months Ended | |
Jul. 31, 2017 | Jul. 31, 2016 | |
Preferred Stock | ||
Balance | ||
Balance (in shares) | 620 | 1,170 |
Issuance of common stock in exchange for services | ||
Issuance of common stock in exchange for services (in shares) | ||
Issuance of common stock upon conversion of preferred stock | ||
Issuance of common stock upon conversion of preferred stock (in shares) | (270) | (550) |
Issuance of common stock for preferred stock make whole payments | ||
Issuance of common stock for preferred stock make whole payments (in shares) | ||
Exercise of stock options/warrants for cash | ||
Exercise of stock options/warrants for cash (in shares) | ||
Issuance of stock options for compensation liabilities | ||
Issuance of stock options as compensation | ||
Issuance of common stock and warrants for acquisition | ||
Issuance of common stock and warrants for acquisition (shares) | ||
Noncontrolling interest | ||
Net loss | ||
Currency translation adjustment | ||
Balance | ||
Balance (in shares) | 350 | 620 |
Common Stock | ||
Balance | $ 909 | $ 826 |
Balance (in shares) | 908,541 | 825,496 |
Issuance of common stock in exchange for services | ||
Issuance of common stock in exchange for services (in shares) | 300 | |
Issuance of common stock upon conversion of preferred stock | $ 18 | $ 37 |
Issuance of common stock upon conversion of preferred stock (in shares) | 18,000 | 36,667 |
Issuance of common stock for preferred stock make whole payments | 9 | 20 |
Issuance of common stock for preferred stock make whole payments (in shares) | 8,923 | 20,139 |
Exercise of stock options/warrants for cash | $ 3 | $ 26 |
Exercise of stock options/warrants for cash (in shares) | 3,333 | 25,939 |
Issuance of stock options for compensation liabilities | ||
Issuance of stock options as compensation | ||
Issuance of common stock and warrants for acquisition | $ 53 | |
Issuance of common stock and warrants for acquisition (shares) | 53,211 | |
Noncontrolling interest | ||
Net loss | ||
Currency translation adjustment | ||
Balance | $ 992 | $ 909 |
Balance (in shares) | 992,008 | 908,541 |
Common Stock Payable | ||
Balance | ||
Issuance of common stock in exchange for services | ||
Issuance of common stock upon conversion of preferred stock | ||
Issuance of common stock for preferred stock make whole payments | ||
Exercise of stock options/warrants for cash | ||
Issuance of stock options for compensation liabilities | ||
Issuance of stock options as compensation | ||
Issuance of common stock and warrants for acquisition | 1,097,100 | |
Noncontrolling interest | ||
Net loss | ||
Currency translation adjustment | ||
Balance | 1,097,100 | |
Additional Paid-In Capital | ||
Balance | 363,687,741 | 363,381,380 |
Issuance of common stock in exchange for services | 4,500 | |
Issuance of common stock upon conversion of preferred stock | $ (18) | $ (37) |
Issuance of common stock for preferred stock make whole payments | 72,891 | 148,480 |
Exercise of stock options/warrants for cash | $ 49,997 | $ (26) |
Issuance of stock options for compensation liabilities | 123,147 | |
Issuance of stock options as compensation | 30,297 | |
Issuance of common stock and warrants for acquisition | 253,763 | |
Noncontrolling interest | ||
Net loss | ||
Currency translation adjustment | ||
Balance | 364,064,374 | 363,687,741 |
Accumulated Deficit | ||
Balance | (375,704,372) | (372,481,263) |
Issuance of common stock in exchange for services | ||
Issuance of common stock upon conversion of preferred stock | ||
Issuance of common stock for preferred stock make whole payments | ||
Exercise of stock options/warrants for cash | ||
Issuance of stock options for compensation liabilities | ||
Issuance of stock options as compensation | ||
Issuance of common stock and warrants for acquisition | ||
Noncontrolling interest | ||
Net loss | (15,195,666) | (3,223,109) |
Currency translation adjustment | ||
Balance | (390,900,038) | (375,704,372) |
Accumulated Other Comprehensive Income | ||
Balance | 798,872 | 808,737 |
Issuance of common stock in exchange for services | ||
Issuance of common stock upon conversion of preferred stock | ||
Issuance of common stock for preferred stock make whole payments | ||
Exercise of stock options/warrants for cash | ||
Issuance of stock options for compensation liabilities | ||
Issuance of stock options as compensation | ||
Issuance of common stock and warrants for acquisition | ||
Noncontrolling interest | ||
Net loss | ||
Currency translation adjustment | 8,513 | (9,865) |
Balance | 807,385 | 798,872 |
Sub Total | ||
Balance | (11,216,850) | (8,290,320) |
Issuance of common stock in exchange for services | 4,500 | |
Issuance of common stock upon conversion of preferred stock | ||
Issuance of common stock for preferred stock make whole payments | 72,900 | 148,500 |
Exercise of stock options/warrants for cash | $ 50,000 | |
Issuance of stock options for compensation liabilities | 123,147 | |
Issuance of stock options as compensation | 30,297 | |
Issuance of common stock and warrants for acquisition | 1,350,916 | |
Noncontrolling interest | ||
Net loss | (15,195,666) | (3,223,109) |
Currency translation adjustment | 8,513 | (9,865) |
Balance | (24,930,187) | (11,216,850) |
Noncontrolling Interest | ||
Balance | ||
Issuance of common stock in exchange for services | ||
Issuance of common stock upon conversion of preferred stock | ||
Issuance of common stock for preferred stock make whole payments | ||
Exercise of stock options/warrants for cash | ||
Issuance of stock options for compensation liabilities | ||
Issuance of stock options as compensation | ||
Issuance of common stock and warrants for acquisition | ||
Noncontrolling interest | 1,297,939 | |
Net loss | (27,283) | |
Currency translation adjustment | ||
Balance | 1,270,656 | |
Balance | (11,216,850) | (8,290,320) |
Issuance of common stock in exchange for services | 4,500 | |
Issuance of common stock upon conversion of preferred stock | ||
Issuance of common stock for preferred stock make whole payments | 72,900 | 148,500 |
Exercise of stock options/warrants for cash | $ 50,000 | |
Issuance of stock options for compensation liabilities | 123,147 | |
Issuance of stock options as compensation | 30,297 | |
Issuance of common stock and warrants for acquisition | 1,350,916 | |
Noncontrolling interest | 1,297,939 | |
Net loss | (15,222,949) | (3,223,109) |
Currency translation adjustment | 8,513 | (9,865) |
Balance | $ (23,659,531) | $ (11,216,850) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) | 6 Months Ended | |
Jan. 31, 2017 | Jan. 31, 2016 | |
Cash Flows From Operating Activities: | ||
Net (loss) | $ (15,195,666) | $ (1,778,655) |
Adjustments to reconcile net (loss) / income to net cash used in operating activities: | ||
Depreciation and amortization | 123,106 | |
Stock compensation expense | 27,344 | |
Common stock issued for services rendered | 4,500 | |
Loss on goodwill impairment | 14,335,822 | |
Loss on disposal of property and equipment | 1,276 | |
Common stock issued as make-whole payments on preferred stock | 72,900 | 113,400 |
Change in fair value of derivative liabilities | 325,074 | 103,634 |
Changes in operating assets and liabilities | ||
Accounts payable and accrued expenses | 256,046 | 662,839 |
Other current assets | (24,535) | 45,412 |
Net Cash Used in Operating Activities | (229,083) | (698,420) |
Cash Flows From Investing Activities: | ||
Deposit on investment | (500,000) | |
Net loss attributable to noncontrolling interests | (27,283) | |
Investment in non-controlling interest | 99,593 | |
Net cash (used) in investing activities | (427,690) | |
Cash Flows From Financing Activities: | ||
Loan proceeds from related party | 656,153 | |
Proceeds from exercise of warrants | 50,000 | 2,952 |
Net Cash Provided by Financing Activities | 706,153 | 2,952 |
Net Increase (Decrease) in Cash and Cash Equivalents | 49,380 | (695,468) |
Cash and Cash Equivalents, Beginning of Period | 16,899 | 749,965 |
Effects of currency translation on cash and cash equivalents | 8,760 | (22,729) |
Cash and Cash Equivalents, End of Period | $ 75,039 | $ 31,768 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jan. 31, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Note 1 - Basis of Presentation: Generex Biotechnology Corporation (“Generex” or the “Company”), was formed in the State of Delaware on September 4, 1997 and its year-end is July 31. It is engaged primarily in the research and development of drug delivery systems and the use of the Company’s proprietary technology for the administration of formulations of large molecule drugs to the oral (buccal) cavity using a hand-held aerosol applicator; and through the Company’s wholly-owned subsidiary, Antigen Express, Inc. (“Antigen”), has undertaken work on immunomedicines incorporating proprietary vaccine formulations. On January 18, 2017, the Company closed an Acquisition Agreement pursuant to which the Company acquired a 51% interest in Hema Diagnostic Systems, LLC, (“HDS”) a Florida limited liability company established in December, 2000 to market and distribute rapid test devices including infectious diseases. (See Note 10) Since 2002, HDS has been developing an expanding line of rapid diagnostic tests (RDTs) including such diseases as Human Immunodeficiency Virus (HIV) – 1/2, tuberculosis, malaria, hepatitis, syphilis, typhoid and dengue as well as other infectious diseases. The accompanying unaudited interim consolidated financial statements (“interim statements”) have been prepared pursuant to the rules and regulations for reporting on Form 10-Q. Accordingly, certain information and disclosures required by generally accepted accounting principles for complete financial statements are not included herein. The interim statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s latest Annual Report on Form 10-K. The results for the six month period ended January 31, 2017 may not be indicative of the results for the entire year. Interim statements are subject to possible adjustments in connection with the annual audit of the Company’s accounts for fiscal year 2017. In the Company’s opinion, all adjustments necessary for a fair presentation of these interim statements have been included and are of a normal and recurring nature. On March 14, 2017, the Company effected a one-for-one thousand (1:1,000) reverse stock split whereby the Company (i) decreased the number of authorized shares of Common Stock by a ratio equal to one-for-one thousand (1:1,000) (the “Reverse Split Ratio”), and (ii) correspondingly and proportionately decreased, by a ratio equal to the Reverse Split Ratio, the number of issued and outstanding shares of Common Stock (the “Reverse Stock Split”). Proportional adjustments for the reverse stock split were made to the Company's outstanding stock options, warrants and equity incentive plans for all periods presented. Going Concern The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The Company has experienced negative cash flows from operations since inception and has an accumulated deficit of approximately $391 million and a working capital deficiency of approximately $23.6 million at January 31, 2017. The Company has funded its activities to date almost exclusively from debt and equity financings, as well as the sale of non-essential real estate assets in fiscal 2012 through the first quarter of fiscal 2014. The Company will continue to require substantial funds to implement its new investment acquisition plans. Management’s plans in order to meet its operating cash flow requirements include financing activities such as private placements of its common stock, preferred stock offerings, and issuances of debt and convertible debt instruments. Management is also actively pursuing financial and strategic alternatives, including strategic investments and divestitures, industry collaboration activities and strategic partners. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. There are no assurances that such additional funding will be achieved and that the Company will succeed in its future operations. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company’s inability to obtain required funding in the near future or its inability to obtain funding on favorable terms will have a material adverse effect on its operations and strategic development plan for future growth. If the Company cannot successfully raise additional capital and implement its strategic development plan, its liquidity, financial condition and business prospects will be materially and adversely affected, and the Company may have to cease operations. Business combinations Business combinations are accounted for using the acquisition method of accounting. Acquisition cost is measured as the aggregate of the fair value at the date of acquisition of the assets given, equity instruments issued or liabilities incurred or assumed. Acquisition related costs are expensed as incurred (except for those costs arising on the issue of equity instruments which are recognized directly in equity). Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured at fair value on the acquisition date. Goodwill is measured as the excess of the acquisition cost and the amount of any non-controlling interest, over the fair value of the identifiable net assets acquired. |
Effects of Recent Accounting Pr
Effects of Recent Accounting Pronouncements | 6 Months Ended |
Jan. 31, 2017 | |
Accounting Changes and Error Corrections [Abstract] | |
Effects of Recent Accounting Pronouncements | Note 2 - Effects of Recent Accounting Pronouncements: Recently Issued Accounting Pronouncements We have reviewed the FASB issued Accounting Standards Update (“ASU”) accounting pronouncements and interpretations thereof that have effective dates during the periods reported and in future periods. The Company has carefully considered the new pronouncements that alter previous generally accepted accounting principles and does not believe that any new or modified principles will have a material impact on the Company’s reported financial position or operations in the near term. The applicability of any standard is subject to the formal review of our financial management and certain standards are under consideration. In August 2014, the Financial Accounting Standards Board issued Accounting Standards Update 2014-15, Presentation of Financial Statements- Going Concern. The Update provides guidance on management’s responsibility in evaluating whether there is substantial doubt about a company’s ability to continue as a going concern and about related footnote disclosures. For each reporting period, management will be required to evaluate whether there are conditions or events that raise substantial doubt about a company’s ability to continue as a going concern within one year from the date the financial statements are issued. The guidance became effective this quarter. The Company has determined that this accounting standard has no impact on its consolidated financial statements. In November 2014, the FASB issued guidance regarding Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity. On May 8, 2015, the FASB issued ASU 2015-08, “Business Combinations (Topic 805) Pushdown Accounting In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes, which requires that an entity classify deferred tax assets and liabilities as noncurrent on the balance sheet. Prior to the issuance of the standard, deferred tax assets and liabilities were required to be separated into current and noncurrent amounts on the basis of the classification of the related asset or liability. This ASU is effective for the Company on April 1, 2017, with early adoption permitted. The adoption of ASU No. 2015-17 is not expected to have a material impact on the Company's condensed consolidated financial statements or related disclosures. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”). ASU 2016-15 addresses eight specific cash flow issues with the objective of reducing diversity in practice regarding how certain cash receipts and cash payments are presented in the statement of cash flows. The standard provides guidance on the classification of the following items: (1) debt prepayment or debt extinguishment costs, (2) settlement of zero-coupon debt instruments, (3) contingent consideration payments made after a business combination, (4) proceeds from the settlement of insurance claims, (5) proceeds from the settlement of corporate-owned life insurance policies, (6) distributions received from equity method investments, (7) beneficial interests in securitization transactions, and (8) separately identifiable cash flows. The Company is required to adopt ASU 2016-15 for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017 on a retrospective basis. Early adoption is permitted, including adoption in an interim period. The Company is currently evaluating the impact of adoption of ASU 2016-15. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment The Company does not expect the adoption of any other recent accounting pronouncements to have a material impact on its financial statements. |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jan. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation: | Note 3 - Stock-Based Compensation: As of January 31, 2017, the Company had two stockholder-approved stock incentive plans under which shares and options exercisable for shares of common stock have been or may be granted to employees, directors, consultants and advisors. A total of 12,000 shares of common stock are reserved for issuance under the 2001 Stock Option Plan (the 2001 Plan) and 135,000 shares of common stock are reserved for issuance under the 2006 Stock Plan as amended (the 2006 Plan). At January 31, 2017, there were 4,139 and 64,485 shares of common stock reserved for future awards under the 2001 Plan and 2006 Plan, respectively. The Company issues new shares of common stock from the shares reserved under the respective Plans upon conversion or exercise of options and issuance of restricted shares. The 2001 and 2006 Plans (the Plans) are administered by the Board of Directors (the Board). The Board is authorized to select from among eligible employees, directors, advisors and consultants those individuals to whom options are to be granted and to determine the number of shares to be subject to, and the terms and conditions of the options. The Board is also authorized to prescribe, amend and rescind terms relating to options granted under the Plans. Generally, the interpretation and construction of any provision of the Plans or any options granted hereunder is within the discretion of the Board. The Plans provide that options may or may not be Incentive Stock Options (ISOs) within the meaning of Section 422 of the Internal Revenue Code. Only employees of the Company are eligible to receive ISOs, while employees and non-employee directors, advisors and consultants are eligible to receive options which are not ISOs, i.e. “Non-Qualified Options.” The options granted by the Board in connection with its adoption of the Plans were Non-Qualified Options. In addition, the 2006 Plan also provides for restricted stock grants. The fair value of each option granted is estimated on the grant date using the Black-Scholes option pricing model or the value of the services provided, whichever is more readily determinable. The Black-Scholes option pricing model takes into account, as of the grant date, the exercise price and expected life of the option, the current price of the underlying stock and its expected volatility, expected dividends on the stock and the risk-free interest rate for the term of the option. The Black-Scholes option pricing model was not used to estimate the fair value any option grants in the quarter ended January 31, 2017 or in the fiscal year ended July 31, 2016. The following is a summary of the common stock options granted, forfeited or expired and exercised under the Plans for the six months ended January 31, 2017: Options Weighted Average Exercise Price per Share Aggregate Intrinsic Value Outstanding: Aug. 1, 2016 and Jan. 31, 2017 19,639 $ 28.66 $ 70,836 Exercisable, January 31, 2017 19,639 $ 28.66 $ 70,836 The 19,639 outstanding options at January 31, 2017 had a weighted average remaining contractual term of 1.51 years. Options typically vest over a period of two to four years and have a contractual life of five to ten years. There were no non-vested common stock options granted, vested or forfeited under the Plan for the six months ended January 31, 2017. There was no unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the Plans at January 31, 2017. |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 6 Months Ended |
Jan. 31, 2017 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Expenses | Note 4 - Accounts Payable and Accrued Expenses: Accounts payable and accrued expenses consist of the following: January 31, 2017 July 31, 2016 Accounts Payable and Accruals - General and Administrative $ 4,167,354 $ 3,750,638 Accounts Payable and Accruals - Research and Development 4,682,092 4,395,061 Accounts Payable and Accruals - Selling and Marketing 385,891 326,229 Accrued Make-whole Payments on Convertible Preferred Stock (see Note 8) 94,500 167,400 Executive Compensation and Directors’ Fees Payable 368,114 311,542 Total $ 9,697,952 $ 8,950,870 In addition to accounts payable and accrued expenses, the Company has a loan payable in the amount of $50,000. This loan is unsecured, due on demand and bears interest at 9% per annum. |
Loan to Related Parties
Loan to Related Parties | 6 Months Ended |
Jan. 31, 2017 | |
Summary of Investments, Other than Investments in Related Parties [Abstract] | |
Loan to Related Party | Note 5 - Loan to Related Party HDS received substantially all of its funding from a shareholder, who owned 98.9% of the Company as of December 31, 2016. The loan is unsecured, matures on December 31, 2019 and accrues interest at 0.75% per annum, increased from 0.21% for the 2015 calendar year. As of January 31, 2017, the outstanding balance was $13,307,837. The Company also owes $656,153 to two shareholders and $83,554 to another related party. These amount are both unsecured and non-interest bearing with no fixed terms of repayment. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jan. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Pending Litigation | Note 6 - Commitments and Contingencies: Agreements On January 16, 2017, the Company and Emmaus Life Sciences, Inc. (“Emmaus”) entered into a letter of intent (“LOI”) contemplating that the Company will acquire a controlling interest of the outstanding capital stock of Emmaus for a total consideration of $225,000,000 in cash and Generex stock. The purchase price for shares of stock of the Emmaus Shares will consist of $10,000,000 in cash and $215,000,000 worth of shares of the Company’s common stock (“Company Shares”), which will be valued at $3.80 per share at the closing of this transaction, provided that if a material event occurs that increases the fair market value of the Company Shares prior to the Closing, the value attributed to the Company Shares will be increased to such higher market value up to a maximum of $12.00 per share. As of January 31, 2017, Generex has paid a deposit of $500,000 to Emmaus and is obligated to pay an additional deposit of $1,500,000 by March 30, 2017 (see note 11). The Company must then pay an additional $2,000,000 upon signing of the formal purchase agreement and the remaining $6,000,000 upon closing. Pending Litigation In February 2001, a former business associate of the former Vice President of Research and Development (“VP”) of the Company and an entity known as Centrum Technologies Inc. (“CTI”) commenced an action in the Ontario Superior Court of Justice against the Company and the VP seeking, among other things, damages for alleged breaches of contract and tortious acts related to a business relationship between this former associate and the VP that ceased in July 1996. The plaintiffs’ statement of claim also seeks to enjoin the use, if any, by the Company of three patents allegedly owned by CTI. The three patents are entitled Liquid Formulations for Proteinic Pharmaceuticals Vaccine Delivery System for Immunization, Using Biodegradable Polymer Microspheres Controlled Releases of Drugs or Hormones in Biodegradable Polymer Microspheres On May 20, 2011, Rose Perri, a former officer of the Company, filed a statement of claim (subsequently amended) in the Ontario Superior Court of Justice, naming as defendants the Company and certain directors of the Company, John Barratt, Brian Masterson, Mark McGee, and Mr. Fletcher. In this action, Ms. Perri has alleged that defendants engaged in discrimination, harassment, bad faith and infliction of mental distress in connection with the termination of her employment with the Company. Ms. Perri is seeking damages in this action in excess of $7,000,000 for, among other things, breach of contract, breach of fiduciary duty, violations of the Ontario Human Rights Code and aggravated and punitive damages. On September 20, 2011, the defendants filed a statement of defense and counterclaim, also naming Time Release Corp., Khazak Group Consulting Corp., and David Khazak, C.A. as defendants by counterclaim, and seeking damages of approximately $2.3 million in funds that the defendants allege Ms. Perri wrongly caused the Company to pay to third parties in varying amounts over several years and an accounting of certain third-party payments, plus interests and costs. The factual basis for the counterclaim involves payments made by the Company to third parties believed to be related to Ms. Perri. The Company intends to defend this action and pursue its counterclaim vigorously and is not able to predict the ultimate outcome of this legal proceeding at the present time or to estimate an amount or range of potential loss, if any, from this legal proceeding. On June 1, 2011, Golden Bull Estates Ltd. filed a claim (subsequently amended) in the Ontario Superior Court of Justice, naming the Company, 1097346 Ontario, Inc. and Generex Pharmaceuticals, Inc. as defendants. The plaintiff, Golden Bull Estates Ltd., is controlled by Ms. Perri. The plaintiff alleges damages in the amount of $550,000 for breach of contract, $50,000 for punitive damages, plus interest and costs. The plaintiff’s claims relate to an alleged contract between the plaintiff and the Company for property management services for certain Ontario properties owned by the Company. The Company terminated the plaintiff’s property management services in April 2011. Following the close of pleadings, the Company served a motion for summary judgment. The plaintiff responded by amending its statement of claim to include a claim to the Company’s interest in certain of its real estate holdings. The plaintiff moved for leave to issue and register a Certificate of Pending Litigation in respect of this real estate. The motion was not successful in respect of any current real estate holdings of the Company. The Company is not able to predict the ultimate outcome of this legal proceeding at the present time or to estimate an amount or range of potential loss, if any, from this legal proceeding. In December 2011, a vendor of the Company commenced an action against the Company and its subsidiary, Generex Pharmaceuticals, Inc., in the Ontario Superior Court of Justice claiming damages for unpaid invoices including interest in the amount of $429,000, in addition to costs and further interest. The Company responded to this statement of claim and also asserted a counterclaim in the proceeding for $200,000 arising from the vendor’s breach of contract and detinue, together with interest and costs. On November 16, 2012, the parties agreed to settle this action and the Company has agreed to pay the plaintiff $125,000, following the spinout of its subsidiary Antigen, from the proceeds of any public or private financing related to Antigen subsequent to such spinout. Each party agreed to execute mutual releases to the claim and counterclaim to be held in trust by each party’s counsel until payment of the settlement amount. Following payment to the plaintiff, the parties agree that a Consent Dismissal Order without costs will be filed with the court. If the Company fails to make the payment following completion of any post-spinout financing related to Antigen or any other subsidiaries, the Plaintiffs may take out a judgment in the amount of the claim plus interest of 3% per annum and costs fixed at $25,000. The Company is involved in certain other legal proceedings in addition to those specifically described herein. Subject to the uncertainty inherent in all litigation, the Company does not believe at the present time that the resolution of any of these legal proceedings is likely to have a material adverse effect on the Company’s consolidated financial position, operations or cash flows. With respect to all litigation, as additional information concerning the estimates used by the Company becomes known, the Company reassesses its position both with respect to accrued liabilities and other potential exposures. |
Net (Loss) _ Per Share (EPS)
Net (Loss) / Per Share (EPS) | 6 Months Ended |
Jan. 31, 2017 | |
Accounting Policies [Abstract] | |
Net Income (Loss) Per Share (EPS) | Note 7 - Net (Loss) / Income Per Share (“EPS”): Basic EPS and diluted EPS for the three and six-month period ended January 31, 2017 have been computed by dividing the net loss available to common stockholders for the period by the weighted average shares outstanding during the period. All outstanding stock options, non-vested restricted stock, warrants and common stock underlying convertible preferred stock, representing 375,972 incremental shares at January 31, 2017, have been excluded from the computation of diluted EPS as they are anti-dilutive. Basic EPS and diluted EPS for the three and six-month period ended January 31, 2016 have been computed by dividing the net loss available to common stockholders for the period by the weighted average shares outstanding during the period. All outstanding stock options, non-vested restricted stock, warrants and common stock underlying convertible preferred stock, representing 621,837 incremental shares at January 31, 2016, have been excluded from the computation of diluted EPS as they are anti-dilutive. |
Stockholders_ Deficiency
Stockholders’ Deficiency | 6 Months Ended |
Jan. 31, 2017 | |
Equity [Abstract] | |
Stockholders’ Deficiency | Note 8 - Stockholders’ Deficiency: Common Stock On January 18, 2017, the Company issued 53,211 shares of common stock for the acquisition of 51% of HDS and is obligated to issue 230,000 shares of common stock upon the conclusion of the Company’s reverse stock split. No options were exercised during the six months ended January 31, 2017. Warrants As of January 31, 2017, there are 326,000 warrants outstanding. There were no warrants issued for the six months ended January 31, 2017. There were 3,333 warrants exercised at an exercise price of $15.00 per share with proceeds of $50,000 for the six months ended January 31, 2017. During that period, 54,545 warrants expired. The outstanding warrants at January 31, 2017 have a weighted average exercise price of $15.00 per share and have a weighted average remaining life of 1.6 years. As of January 31, 2017, the Company has 326,000 warrants with a current exercise price of $15.00 which have price protection provisions that allow for the reduction in the current exercise price upon the occurrence of certain events, including the Company’s issuance of common stock or securities convertible into or exercisable for common stock, such as options and warrants, at a price per share less than the exercise price then in effect. For instance, if the Company issues shares of its common stock or options exercisable for or securities convertible into common stock at an effective price per share of common stock less than the exercise price then in effect, the exercise price will be reduced to the effective price of the new issuance. Simultaneously with any reduction to the exercise price, the number of shares of common stock that may be purchased upon exercise of each of these warrants shall be increased proportionately, so that after such adjustment the aggregate exercise price payable for the adjusted number of warrants shall be the same as the aggregate exercise price in effect immediately prior to such adjustment. There are a limited number of permitted types of stock and equity instrument issuances for each series of warrants which will not invoke the price protection provisions of these warrants. The Company accounts for the warrants with price protection provisions in accordance with FASB ASC Topic 815 as described in Note 9 - Derivative Liabilities Series A, B, C, D and E 9% Convertible Preferred Stock All of the Company’s Series A, B, C, D and E 9% Convertible Preferred Stocks were converted prior to the beginning of the Company’s 2017 fiscal year. Series F and G 9% Convertible Preferred Stock The Company has authorized 4,150 shares of Series F 9% Convertible Preferred Stock with a stated value of one thousand ($1,000) per share. Pursuant to a securities purchase agreement dated March 27, 2014, the Company sold an aggregate of 2,075 shares of Series F convertible preferred stock, as well as accompanying warrants to purchase 69,167 shares of common stock. An aggregate of 69,167 shares of the Company’s common stock were issuable upon conversion of the Series F convertible preferred stock which was issued at the closing on March 27, 2014. The Company has authorized 1,000 shares of Series G 9% Convertible Preferred Stock with a stated value of one thousand ($1,000) per share. Pursuant to a securities purchase agreement dated June 24, 2015, the Company sold an aggregate of 500 shares of Series G convertible preferred stock, as well as accompanying warrants to purchase 33,333 shares of common stock. An aggregate of 33,333 shares of the Company’s common stock are issuable upon conversion of the Series G convertible preferred stock which was issued at the closing on June 24, 2015. Subject to certain ownership limitations, the convertible preferred stock is convertible at the option of the holder at any time into shares of the Company’s common stock at an effective conversion price of $15.00 per share (Note: The conversion price for the Series F Convertible Preferred Stock was adjusted from $30.00 to $15.00 in conjunction with the Series G Convertible Preferred Stock financing on June 24, 2015), and will accrue a 9% dividend until the third year anniversary of the issuances. On each one-year anniversary thereafter, such dividend rate will increase by an additional 3%. The dividend is payable quarterly on September 30, December 31, March 31 and June 30, beginning on June 30, 2014 and June 30, 2015, respectively, and on each conversion date in cash, or at the Company’s option, in shares of common stock. In the event that the Series F and G convertible preferred stock is converted prior to March 27, 2017 and June 24, 2018, respectively, the Company will pay the holder of the converted preferred stock an amount equal to $270 per $1,000 of stated value of the convertible preferred stock, less the amount of all prior quarterly dividends paid on such converted preferred stock before the relevant conversion date. Such “make-whole payment” may be made in cash or, at the Company’s option, in shares of its common stock. In addition, beginning on the third anniversary date of the issuances, the Company will pay dividends on shares of preferred stock equal to (on an as-if-converted-to-common-stock basis) and in the same form as dividends (other than dividends in the form of common stock) actually paid on shares of the common stock when, and if such dividends are paid. The Company will incur a late fee of 18% per annum on unpaid dividends. The conversion price of the convertible preferred stock is subject to adjustment in the case of stock splits, stock dividends, combinations of shares, similar recapitalization transactions and certain pro-rata distributions to common stockholders. The conversion price will also be adjusted if the Company sells or grants any shares of common stock or securities convertible into, or rights to acquire, common stock at an effective price per share that is lower than the then conversion price, except in the event of certain exempt issuances. In addition, the holders of convertible preferred stock will be entitled to receive any securities or rights to acquire securities or property granted or issued by the Company pro rata to the holders of its common stock to the same extent as if such holders had converted all of their shares of convertible preferred stock. In the event of a fundamental transaction, such as a merger, consolidation, sale of substantially all assets and similar reorganizations or recapitalizations, the holders of convertible preferred stock will be entitled to receive, upon conversion of their shares, any securities or other consideration received by the holders of the Company’s common stock pursuant to the fundamental transaction. The conversion price for the Series F Convertible Preferred Stock was adjusted from $30.00 to $15.00 in conjunction with the Series G Convertible Preferred Stock on June 24, 2015 and the number of common shares underlying the 838 Series F Convertible Preferred Stock outstanding at that date increased from 27,942 to 55,883. In conjunction with the issuance of the Series F convertible preferred stock in March 2014 and the issuance of the Series G convertible preferred stock in June 2015, the Company also issued 69,167 and 33,333 warrants, respectively to the investors. Subject to certain ownership limitations, the warrants are exercisable at any time after their respective dates of issuance and on or before the fifth-year anniversary thereafter at an exercise price of $15.00 per share of common stock (Note: The conversion price for the warrants issued in the Series F Convertible Preferred Stock financing was adjusted from $30.00 to $15.00 in conjunction with the Series G Convertible Preferred Stock financing on June 24, 2015 and the number of warrants increased from 69,167 to 138,333). The exercise price of the warrants and, in some cases, the number of shares issuable upon exercise, are subject to adjustment in the case of stock splits, stock dividends, combinations of shares, similar recapitalization transactions and certain pro-rata distributions to common stockholders. The exercise price and number of shares of common stock issuable upon exercise will also be adjusted if the Company sells or grants any shares of common stock or securities convertible into, or rights to acquire, common stock at an effective price per share that is lower than the then exercise price, except in the event of certain exempt issuances. In addition, the warrant holders will be entitled to receive any securities or rights to acquire securities or property granted or issued by the Company pro rata to the holders of its common stock to the same extent as if such holders had exercised all of their warrants. In the event of a fundamental transaction, such as a merger, consolidation, sale of substantially all assets and similar reorganizations or recapitalizations, the warrant holders will be entitled to receive, upon exercise of their warrants, any securities or other consideration received by the holders of the Company’s common stock pursuant to the fundamental transaction. These warrants have been classified as derivative liabilities and are described further in Note 9 - Derivative Liabilities . In addition, until the first anniversary date of the March 2014 securities purchase agreement and the first anniversary of the August 19, 2015 shareholder approval of the increase in authorized stock, respectively, each investor had the right, in its sole determination, to purchase, severally and not jointly with the other investors, in one or more purchases, in the ratio of such investor's original subscription amount to the original aggregate subscription amount of all investors, additional units consisting of convertible preferred stock and warrants at a purchase price of $1,000 per unit with an aggregate subscription amount thereof of up to $2,075,000 and $500,000, respectively, which units would have had terms identical to the units of convertible preferred stock and warrants issued in connection with the March 2014 and June 2015 closings. These additional investment rights of the investors have been classified as derivative liabilities and are described further in Note 9 - Derivative Liabilities . As of January 31, 2017, 2,075 of the Series F convertible preferred stock had been converted to common stock. There were 97,108 shares of common stock issued upon the conversion of the Series F convertible preferred stock and 40,769 shares of common stock issued as “make-whole payments” on such conversions. As of January 31, 2017, 150 of the Series G convertible preferred stock had been converted to common stock. There were 10,000 shares of common stock issued upon the conversion of the Series G convertible preferred stock and 4,688 shares of common stock issued as “make-whole payments” on such conversions. Accounting for proceeds from the Series F convertible preferred stock financing The initial cash proceeds, net of issuance costs of $55,000, from the Series F convertible preferred stock financing in March 2014 were $2,020,000. The proceeds from the financing were allocated first to the warrants that were issued in the financing, second to the additional investment rights associated with the financing and then to the make whole payments and subsequent issuance costs. As the assigned fair values were greater than the net cash proceeds from the transaction, the excess was treated as a “deemed dividend” for accounting purposes and was reported on the Company’s consolidated statement of comprehensive (loss) / income for the fiscal year ended July 31, 2014 under the caption “Preferred Stock Dividend”. The calculation methodologies for the fair values of the derivative warrant liability and the derivative additional investment rights liability are described in Note 9 - Derivative Liabilities Accounting allocation of initial proceeds Net proceeds $ 2,020,000 Derivative warrant liability fair value (2,016,065 ) Derivative additional investment rights fair value (863,735 ) Other issuance costs (finders’ fee) (166,000 ) Make whole payments liability (560,250 ) Deemed dividend $ (1,586,050 ) The initial “make-whole payments” of $560,250 on the Series F convertible preferred stock were accrued as of the date of the financing and the remaining balance of $0 after conversions (July 31, 2016 - $32,400) is included in Accounts Payable and Accrued Expenses (see Note 4) at January 31, 2017. Accounting for proceeds from the Series G convertible preferred stock financing The initial cash proceeds, net of issuance costs of $25,000, from the Series G convertible preferred stock financing in June 2015 were $475,000. The proceeds from the financing were allocated first to the warrants that were issued in the financing, second to the additional investment rights associated with the financing and then to the make whole payments and subsequent issuance costs. As the assigned fair values were greater than the net cash proceeds from the transaction, the excess was treated as a “deemed dividend” for accounting purposes and was reported on the Company’s consolidated statement of operations and comprehensive loss for the fiscal year ended July 31, 2015 under the caption “Preferred Stock Dividend”. The calculation methodologies for the fair values of the derivative warrant liability and the derivative additional investment rights liability are described in Note 9 - Derivative Liabilities Accounting allocation of initial proceeds Net proceeds $ 475,000 Derivative warrant liability fair value (354,535 ) Derivative additional investment rights fair value (285,048 ) Other issuance costs (finders’ fee) (40,000 ) Make whole payments liability (135,000 ) Deemed dividend $ (339,583 ) The initial “make-whole payments” of $135,000 on the Series G convertible preferred stock were accrued as of the date of the financing and the remaining balance of $94,500 after conversions (July 31, 2016 - $135,000) is included in Accounts Payable and Accrued Expenses (see Note 4) at January 31, 2017. |
Derivative Liabilities
Derivative Liabilities | 6 Months Ended |
Jan. 31, 2017 | |
Notes to Financial Statements | |
Derivative Liabilities | Note 9 - Derivative Liabilities: Derivative warrant liability The Company has warrants outstanding with price protection provisions that allow for the reduction in the exercise price of the warrants in the event the Company subsequently issues stock or securities convertible into stock at a price lower than the exercise price of the warrants. Simultaneously with any reduction to the exercise price, the number of shares of common stock that may be purchased upon exercise of each of these warrants shall be increased or decreased proportionately, so that after such adjustment the aggregate exercise price payable for the adjusted number of warrants shall be the same as the aggregate exercise price in effect immediately prior to such adjustment. Accounting for Derivative Warrant Liability The Company’s derivative instruments have been measured at fair value at January 31, 2017 and July 31, 2016 using the binomial lattice model. The Company recognizes all of its warrants with price protection in its consolidated balance sheets as a liability. The liability is revalued at each reporting period and changes in fair value are recognized currently in the consolidated statements of operations and comprehensive loss. The initial recognition and subsequent changes in fair value of the derivative warrant liability have no effect on the Company’s consolidated cash flows. The derivative warrants outstanding at January 31, 2017 are all currently exercisable with a weighted-average remaining life of 1.88 years. The revaluation of the warrants at the end of the respective reporting periods resulted in the recognition of a loss of $518,482 within the Company’s consolidated statements of operations for the six months ended January 31, 2017 and a gain of $30,684 within the Company’s consolidated statements of operations and comprehensive loss for the six months ended January 31, 2016, which are included in the consolidated statement of operations and comprehensive loss under the caption “Change in fair value of derivative liabilities”. The fair values of the warrants at January 31, 2017 and July 31, 2016 were $2,567,328 and $2,048,846, respectively, which are reported on the consolidated balance sheets under the caption “Derivative Warrant Liability”. The following summarizes the changes in the value of the derivative warrant liability from August 1, 2016 until January 31, 2017: Value No. of Warrants Balance at August 1, 2016 - Derivative warrant liability $ 2,048,846 383,878 Forfeited or expired (240,906 ) (54,545 ) Warrants exercised — (3,333 ) Increase in fair value of derivative warrant liability 759,388 n/a Balance at January 31, 2017 - Derivative warrant liability $ 2,567,328 326,000 Fair Value Assumptions Used in Accounting for Derivative Warrant Liability The Company has determined its derivative warrant liability to be a Level 2 fair value measurement and has used the binominal lattice pricing model to calculate the fair value as of January 31, 2017 and July 31, 2015. The binomial lattice model requires six basic data inputs: the exercise or strike price, time to expiration, the risk-free interest rate, the current stock price, the estimated volatility of the stock price in the future, and the dividend rate. Because the warrants contain the price protection feature, the probability that the exercise price of the warrants would decrease as the stock price decreased was incorporated into the valuation calculations. The key inputs used in the January 31, 2017 and July 31, 2016 fair value calculations were as follows: January 31, 2017 July 31, 2016 Current exercise price $ 15.00 $ 20.00 Time to expiration 1.6 years 2.1 years Risk-free interest rate 1.46 % 0.76 % Estimated volatility 167 % 101 % Dividend — — Stock price at period end date $ 10.00 $ 10.00 Fair Value Assumptions Used in Accounting for Derivative Additional Investment Rights Liability The Company has determined the derivative additional investment rights liability to be a Level 2 fair value measurement and has used the binominal lattice pricing model to measure the fair value. The series F additional investment rights expired in March 2015. The series G additional investment rights expired in August 2016. As all additional investment rights have expired, their value at January 31, 2017 is $nil (July 31, 2016 - $193,408) The key inputs used in the fair value calculation at July 31, 2016 were as follows: July 31, 2016 Underlying number of units of convertible preferred stock 500 Underlying number of units of warrants 33,333 Current exercise price of warrants $ 15.00 Current conversion price of preferred stock $ 15.00 Time to expiration 0.05 years Risk-free interest rate 0.38 % Estimated volatility 13 % Dividend -0- Stock price at period end date $ 8.00 The revaluation of the additional investment rights in the six -month period ended January 31, 2017, resulted in the recognition of a gain of $193,408 and in the six -month period ended January 31, 2016, the revaluation resulted in the recognition of a loss of $134,138. The respective loss and gain are recorded within the Company’s consolidated statements of operations and comprehensive loss under the caption “Change in fair value of derivative liabilities”. |
Acquisition of Hema Diagnostics
Acquisition of Hema Diagnostics Systems, LLC | 6 Months Ended |
Jan. 31, 2017 | |
Business Combinations [Abstract] | |
Acquisition of Hema Diagnostics Systems, LLC | Note 10 - Acquisition of Hema Diagnostics Systems, LLC On January 18, 2017, the Company acquired a 51% interest in Hema Diagnostic Systems, LLC (“HDS”), pursuant to the Acquisition Agreement. At closing, the Company acquired 4,950 of HDS’s 10,000 previously outstanding limited liability company units in exchange for 53,191 shares of Generex common stock valued at $250,000, plus 20 shares of Generex common stock issued to HDS in exchange for 300 new limited liability company units. Following the closing and the completion of Company’s reverse stock split, the Company is required to issue a further 230,000 shares of common stock and issue a warrant to a former shareholder of HDS to acquire 15,000,000 additional shares of Generex common stock for $2.50 per share. The issue of this warrant is contingent upon the Company obtaining approval from its shareholders for an increase in its authorized share capital. The total consideration was valued at $1,350,916 on the date of the acquisition. Fair Value of the HDS Assets The intangibles assets acquired include In–Process Research & Development (“IPR&D”). The Fair Value of the IPR&D intangible asset using an Asset Cost Accumulation methodology as of January 18, 2017 (the “Valuation Date”) was determined to be $1,955,932. The net purchase price of HDS was determined to be as follows: Stock Price at Closing Shares Fair Value Purchase price: Common Stock at closing $ 4.77 53,191 $ 253,721 Common Stock after closing $ 4.77 20 95 Common Stock post reverse stock split $ 4.77 230,000 1,097,100 Net purchase price $ 1,350,916 As of January 18, 2017, the issue of the warrant to acquire 15,000,000 additional common shares of Generex was contingent upon shareholder approval of an increase in the Company’s authorized capital stock. No warrant has been issued by the Company and terms of the warrant have not been finalized. Management is not of the opinion that it is more likely than not that the warrant will be issued and accordingly no value has been attributed to it. The preliminary purchase price allocation of HDS was determined to be as follows: Purchase price allocation: Net assets of HDS (13,642,900 ) Non-controlling interest (1,297,939 ) In-Process Research & Development 1,955,932 Goodwill 14,335,823 Total Purchase Price 51% Ownership $ 1,350,916 Non-controlling interest 49% Ownership $ 1,297,939 Goodwill and Intangible Assets The change in the carrying amount of goodwill and other intangible assets for the six months ended January 31, 2017, is as follows: Total Goodwill Other Intangibles, net Balance as of July 31, 2016 $ — $ — $ — Acquisition of HDS 16,291,754 14,335,822 1,955,932 Current year amortization — — — Impairment of goodwill (14,335,822 ) (14,335,822 ) — Balance as of January 31, 2017 $ 1,955,932 $ — $ 1,955,932 Intangible assets are generally amortized on a straight-line basis over the useful lives of the assets. Goodwill represents the excess of the purchase price over the fair market value of net assets acquired. Goodwill for HDS was $14.3 million as of the date of the acquisition. The Company conducted an impairment assessment of goodwill and determined that the goodwill should be fully impaired. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jan. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 11 - Subsequent Events: The Company has evaluated subsequent events occurring after the balance sheet date through the date the consolidated financial statements were issued and identified the following for disclosure: During February 2017, the Company offered all current warrant holders an option to exercise their warrants on a cashless basis at a reduced exercise price. The Company issued a total of 103,809 shares of common stock in connection with the exerci se of 314,684 warrants. During February 2017, the Company issued 33,939 shares of common stock for the conversion of 350 shares of Series G convertible preferred stock and the related make-whole payments. The Emmaus LOI required that Generex pay a deposit of $1,500,000 to Emmaus within three weeks of January 16, 2017, which was February 6, 2017. On February 6, 2017, the Company and Emmaus entered into waiver agreements extending the time for Generex to make the deposit until February 24, 2107, and otherwise amending the LOI. On March 3, 2017, Generex and Emmaus entered into a further waiver and amendment to the LOI which provided that Generex must provide a $500,000 deposit on or prior to March 6, 2017 and within ten (10) days of the Company’s effectiveness of the reverse stock split of its common stock, the Company shall provide an additional deposit of $3,000,000. The payment of $500,000 was made and accepted on March 6, 2017. FINRA approved the reverse stock split effective March 18, 2017, therefore the additional deposit of $3,000,000 is due March 30, 2017. On March 6, 2017, Generex entered into a Securities Purchase Agreement with an investor, pursuant to which the Company agreed to issue a Convertible Note due March 6, 2018 (“Note”) in the principal amount of $674,855. Consideration received for the Note was $562,379, comprised of $500,000 in cash, the cancellation of a $50,000 demand Note the Company had issued to the investor in May 2016, $3,879 in accrued interest on the prior note and $8,500 in legal fees for the investor’s counsel, which the Company was obligated to pay pursuant to the Securities Purchase Agreement. The remaining $112,476. of principal amount represents original issue discount. Since January 31, 2017, the former majority shareholder of HDS has made further advances and/or loans to HDS totaling $149,000 as of the date of this filing. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 6 Months Ended |
Jan. 31, 2017 | |
Accounting Policies [Abstract] | |
Going Concern | Going Concern The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The Company has experienced negative cash flows from operations since inception and has an accumulated deficit of approximately $374 million and a working capital deficiency of approximately $8.4 million at October 31, 2015. The Company has funded its activities to date almost exclusively from debt and equity financings, as well as the sale of non-essential real estate assets in fiscal 2012 through the first quarter of fiscal 2014. The Company will continue to require substantial funds to continue research and development, including pre-clinical studies and clinical trials of its product candidates, and to commence sales and marketing efforts, if the U.S. Food and Drug Administration or other regulatory approvals are obtained. Managements plans in order to meet its operating cash flow requirements include financing activities such as private placements of its common stock, preferred stock offerings, issuances of debt and convertible debt instruments. Management is also actively pursuing financial and strategic alternatives, including strategic investments and divestitures, industry collaboration activities and strategic partners. Management has sold its non-essential real estate assets to augment its cash position. These factors raise substantial doubt regarding the Companys ability to continue as a going concern. There are no assurances that such additional funding will be achieved and that the Company will succeed in its future operations. The interim statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts of liabilities that might be necessary should the Company be unable to continue in existence. The Companys inability to obtain required funding in the near future or its inability to obtain funding on favorable terms will have a material adverse effect on its operations and strategic development plan for future growth. If the Company cannot successfully raise additional capital and implement its strategic development plan, its liquidity, financial condition and business prospects will be materially and adversely affected, and the Company may have to cease operations. |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Jan. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Common stock options granted, forfeited or expired and exercised | Options Weighted Average Exercise Price per Share Aggregate Intrinsic Value Outstanding: Aug. 1, 2016 and Jan. 31, 2017 19,639 $ 28.66 $ 70,836 Exercisable, January 31, 2017 19,639 $ 28.66 $ 70,836 |
Accounts Payable and Accrued 20
Accounts Payable and Accrued Expenses (Tables) | 6 Months Ended |
Jan. 31, 2017 | |
Payables and Accruals [Abstract] | |
Accounts payable and accrues expenses | October 31, 2016 July 31, 2016 Accounts Payable and Accruals General and Administrative $ 3,813,412 $ 3,750,638 Accounts Payable and Accruals Research and Development 4,505,916 4,395,061 Accounts Payable and Accruals Selling and Marketing 326,116 326,229 Accrued Make-whole Payments on Convertible Preferred Stock (see Note 7) 167,400 167,400 Executive Compensation and Directors Fees Payable 342,042 311,542 Total $ 9,154,886 $ 8,950,870 |
Stockholders' Deficiency (Table
Stockholders' Deficiency (Tables) | 6 Months Ended |
Jan. 31, 2017 | |
Series F Convertible Preferred Stock | |
Allocation of initial proceeds | Accounting allocation of initial proceeds Net proceeds $ 2,020,000 Derivative warrant liability fair value (2,016,065 ) Derivative additional investment rights fair value (863,735 ) Other issuance costs (finders’ fee) (166,000 ) Make whole payments liability (560,250 ) Deemed dividend $ (1,586,050 ) |
Series G Convertible Preferred Stock | |
Allocation of initial proceeds | Accounting allocation of initial proceeds Net proceeds $ 475,000 Derivative warrant liability fair value (354,535 ) Derivative additional investment rights fair value (285,048 ) Other issuance costs (finders fee) (40,000 ) Make whole payments liability (135,000 ) Deemed dividend $ (339,583 ) |
Derivative Liabilities (Tables)
Derivative Liabilities (Tables) | 6 Months Ended |
Jan. 31, 2017 | |
Notes to Financial Statements | |
Derivative warrant liability | Value No. of Warrants Balance at August 1, 2016 - Derivative warrant liability $ 2,048,846 383,878 Forfeited or expired (240,906 ) (54,545 ) Warrants exercised — (3,333 ) Increase in fair value of derivative warrant liability 759,388 n/a Balance at January 31, 2017 - Derivative warrant liability $ 2,567,328 326,000 |
Fair value assumptions, derivative warrant liability | January 31, 2017 July 31, 2016 Current exercise price $ 15.00 $ 20.00 Time to expiration 1.6 years 2.1 years Risk-free interest rate 1.46 % 0.76 % Estimated volatility 167 % 101 % Dividend — — Stock price at period end date $ 10.00 $ 10.00 |
Fair value assumptions, derivative additional investment rights liability | July 31, 2016 Underlying number of units of convertible preferred stock 500 Underlying number of units of warrants 33,333 Current exercise price of warrants $ 15.00 Current conversion price of preferred stock $ 15.00 Time to expiration 0.05 years Risk-free interest rate 0.38 % Estimated volatility 13 % Dividend -0- Stock price at period end date $ 8.00 |
Acquisition of Hema Diagnosti23
Acquisition of Hema Diagnostics Systems, LLC (Tables) | 6 Months Ended |
Jan. 31, 2017 | |
Business Combinations [Abstract] | |
Net purchase price of HDS | Stock Price at Closing Shares Fair Value Purchase price: Common Stock at closing $ 4.77 53,191 $ 253,721 Common Stock after closing $ 4.77 20 95 Common Stock post reverse stock split $ 4.77 230,000 1,097,100 Net purchase price $ 1,350,916 |
Preliminary purchase price allocation of HDS | Purchase price allocation: Net assets of HDS (13,642,900 ) Non-controlling interest (1,297,939 ) In-Process Research & Development 1,955,932 Goodwill 14,335,823 Total Purchase Price 51% Ownership $ 1,350,916 Non-controlling interest 49% Ownership $ 1,297,939 |
Carrying amount of goodwill and other intangible assets | Total Goodwill Other Intangibles, net Balance as of July 31, 2016 $ — $ — $ — Acquisition of HDS 16,291,754 14,335,822 1,955,932 Current year amortization — — — Impairment of goodwill (14,335,822 ) (14,335,822 ) — Balance as of January 31, 2017 $ 1,955,932 $ — $ 1,955,932 |
Basis of Presentation (Details
Basis of Presentation (Details Narrative) | 6 Months Ended | |
Jan. 31, 2017USD ($) | Jan. 18, 2017 | |
Reverse stock split ratio | 0.001 | |
Accumulated deficit | $ 391,000,000 | |
Working capital deficiency | $ 23,600,000 | |
Hema Diagnostic Systems, LLC | ||
Majority interest | 51.00% |
Common stock options granted, f
Common stock options granted, forfeited or expired and exercised - Stock-Based Compensation (Details Narrative) | Jan. 31, 2017USD ($)$ / sharesshares |
Options | |
Options Outstanding | shares | 19,639 |
Options Exercisable | shares | 19,639 |
Weighted Average Exercise Price per Share | |
Weighted Average Exercise Price per Share | $ / shares | $ 28.66 |
Weighted Average Exercise Price per Share, Exercisable | $ / shares | $ 28.66 |
Aggregate Intrinsic Vaalue | |
Outstanding, Aggregate Intrinsic Value | $ | $ 70,836 |
Exercisable, Aggregate Intrinsic alue | $ | $ 70,836 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details Narrative) | 6 Months Ended |
Jan. 31, 2017shares | |
Stock Option Plan 2001 | |
Common stock reserved for future issuance | 12,000 |
Common stock reserved for future awards | 4,139 |
Stock Option Plan 2006 | |
Common stock reserved for future issuance | 135,000 |
Common stock reserved for future awards | 64,485 |
Stock Options | |
Outstanding options | 19,639 |
Outstanding options, weighted average remaining contractual term | 1 year 6 months |
Accounts Payable and Accrued 27
Accounts Payable and Accrued Expenses - Accounts payable and accrues expenses (Details) - USD ($) | Jan. 31, 2017 | Jul. 31, 2016 |
Payables and Accruals [Abstract] | ||
Accounts Payable and Accruals – General and Administrative | $ 4,167,354 | $ 3,750,638 |
Accounts Payable and Accruals – Research and Development | 4,682,092 | 4,395,061 |
Accounts Payable and Accruals – Selling and Marketing | 385,891 | 326,229 |
Accrued Make-whole Payments on Convertible Preferred Stock (see Note 8) | 94,500 | 167,400 |
Executive Compensation and Directors’ Fees Payable | 368,114 | 311,542 |
Total | $ 9,697,952 | $ 8,950,870 |
Accounts Payable and Accrued 28
Accounts Payable and Accrued Expenses (Details Narrative) - USD ($) | Jan. 31, 2017 | Jul. 31, 2016 |
Payables and Accruals [Abstract] | ||
Loan Payable | $ 50,000 | $ 50,000 |
Unsecured loan interest | 9.00% |
Loan to Related Parties (Detail
Loan to Related Parties (Details Narrative) - USD ($) | Jan. 31, 2017 | Jan. 31, 2016 | Jan. 31, 2015 |
Interest rate | 0.75% | 0.21% | |
Outstanding balance | $ 13,307,837 | ||
Shareholders | |||
Notes payable | 656,153 | ||
Related Party | |||
Notes payable | $ 83,554 |
Net (Loss) _ Per Share (EPS) (D
Net (Loss) / Per Share (EPS) (Details Narrative) - shares | 6 Months Ended | |
Jan. 31, 2017 | Jan. 31, 2016 | |
Accounting Policies [Abstract] | ||
Incremental shares | 375,972 | 621,837 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||
Jan. 31, 2017 | Mar. 30, 2017 | Nov. 16, 2012 | Jul. 31, 2012 | Jul. 31, 2011 | Jan. 16, 2017 | May 20, 2011 | Jul. 20, 2001 | |
Shares of CBI owned by former business associate | 50.00% | |||||||
Shares of CBI owned by Company | 50.00% | |||||||
Termination Of Employee | ||||||||
Value of damages sought | $ 7,000,000 | |||||||
Counterclaim proceeding | $ 2,300,000 | |||||||
Lawsuit filing date | 20-May-11 | |||||||
Name of Plaintiff | Ms. Perri | |||||||
Breach of contract and detinue | ||||||||
Value of damages sought | $ 550,000 | |||||||
Counterclaim proceeding | $ 200,000 | |||||||
Lawsuit filing date | 1-Jun-11 | |||||||
Name of Plaintiff | Golden Bull Estates | |||||||
Punitive Damages | ||||||||
Value of damages sought | $ 50,000 | |||||||
Damages for Unpaid Invoices | ||||||||
Value of damages sought | $ 429,000 | |||||||
Lawsuit filing date | 31-Dec-11 | |||||||
Name of Plaintiff | Vendor | |||||||
Settlement of litigation | $ 125,000 | |||||||
Interest per annum, failure to pay settlement | 3.00% | |||||||
Fixed cost per annum, failure to pay settlement | $ 25,000 | |||||||
Emmaus | ||||||||
Shares of common stock, value per share | $ 3.80 | |||||||
Maximum | ||||||||
Shares of common stock, value per share | $ 12 | |||||||
Deposit | ||||||||
Payment to Emmaus | $ 500,000 | $ 1,500,000 | ||||||
Upon Signing | ||||||||
Payment to Emmaus | 2,000,000 | |||||||
Upon Closing | ||||||||
Payment to Emmaus | $ 6,000,000 |
Stockholders' Deficiency - Allo
Stockholders' Deficiency - Allocation of initial proceeds (Details) | 6 Months Ended |
Jan. 31, 2017USD ($) | |
Series F Convertible Preferred Stock | |
Net proceeds | $ 2,020,000 |
Derivative warrant liability fair value | (2,016,065) |
Derivative additional investment rights fair value | (863,735) |
Other issuance costs (finders' fee) | (166,000) |
Make whole payments liability | (560,250) |
Deemed dividend | (1,586,050) |
Series G Convertible Preferred Stock | |
Net proceeds | 475,000 |
Derivative warrant liability fair value | (354,535) |
Derivative additional investment rights fair value | (285,048) |
Other issuance costs (finders' fee) | (40,000) |
Make whole payments liability | (135,000) |
Deemed dividend | $ (339,583) |
Stockholders_ Deficiency (Detai
Stockholders’ Deficiency (Details Narrative) - USD ($) | 6 Months Ended | |||
Jan. 31, 2017 | Feb. 28, 2017 | Jan. 18, 2017 | Jul. 31, 2016 | |
Common stock issued | 992,009 | 103,809 | 53,211 | 908,541 |
Acquisition in HDS | 51.00% | |||
Shares of common stock, obligated to issue | 230,000 | |||
Warrants, exercise price | $ 15 | |||
Total Warrants Outstanding, Value | $ 2,567,328 | |||
Warrants expired during period | 54,545 | |||
Outstanding warrants, weighted average remaining life (in years) | 1 year 6 months | |||
Warrant | ||||
Warrants Outstanding | 326,000 | |||
Warrants exercised | 3,333 |
Stockholders_ Deficiency (Det34
Stockholders’ Deficiency (Details Narrative 2) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | |
Jun. 24, 2015 | Mar. 27, 2014 | Jan. 31, 2017 | Jul. 31, 2016 | |
Accounts payable and accrued expenses | $ 9,697,952 | $ 8,950,870 | ||
Series F Convertible Preferred Stock | ||||
Convertible preferred stock, shares authorized | 4,150 | 4,150 | 4,150 | |
Convertible preferred stock, cumulative percentage of interest | 9.00% | 9.00% | 9.00% | |
Convertible preferred stock, par value (in dollars per share) | $ 1,000 | $ 1,000 | $ 1,000 | |
Convertible preferred stock, shares issued | 2,075 | 2,075 | 120 | |
Common shares attributable to conversion of preferred stock | 69,167 | |||
Common stock issued upon conversion of preferred stock | 138,333,334 | 69,167 | 69,167 | |
Convertible preferred stock conversion price | $ 15 | |||
Converted stock amount, payment to holder | $ 270 | |||
Late fee per annum | 18.00% | |||
Preferred stock outstanding | 55,883 | 27,942 | ||
Aggregate subscription amount, maximum | $ 2,075,000 | |||
Conversion of stock, amount converted | $ 2,075 | |||
Common stock issued on conversion of preferred stock | 97,108 | |||
Common stock issued as "make-whole payments" on conversions of preferred stock | 40,769 | |||
Initial cash proceeds | 2,020,000 | |||
Issuance costs | 55,000 | |||
Initial "Make-whole payments" | $ 560,250 | |||
Accounts payable and accrued expenses | $ 0 | |||
Series G Convertible Preferred Stock | ||||
Convertible preferred stock, shares authorized | 1,000 | 1,000 | ||
Convertible preferred stock, cumulative percentage of interest | 9.00% | 9.00% | ||
Convertible preferred stock, par value (in dollars per share) | $ 1,000 | $ 1,000 | ||
Convertible preferred stock, shares issued | 350 | 500 | ||
Common shares attributable to conversion of preferred stock | 33,333 | |||
Common stock issued upon conversion of preferred stock | 33,333 | |||
Convertible preferred stock conversion price | $ 15 | |||
Conversion of stock, amount converted | $ 150 | |||
Common stock issued on conversion of preferred stock | 10,000 | |||
Common stock issued as "make-whole payments" on conversions of preferred stock | 4,688 | |||
Issuance costs | $ 25,000 | |||
Initial "Make-whole payments" | $ 135,000 | |||
Accounts payable and accrued expenses | $ 94,500 | |||
Series G Convertible Preferred Stock | ||||
Convertible preferred stock, shares authorized | 1,000 | |||
Convertible preferred stock, cumulative percentage of interest | 9.00% | |||
Convertible preferred stock, par value (in dollars per share) | $ 1,000 | |||
Convertible preferred stock, shares issued | 500 | |||
Common stock issued upon conversion of preferred stock | 33,333 | |||
Converted stock amount, payment to holder | $ 1,000 | |||
Late fee per annum | 18.00% | |||
Preferred stock outstanding | 138,333 | |||
Initial cash proceeds | $ 475,000 |
Derivative Liabilities - Deriva
Derivative Liabilities - Derivative warrant liability (Details) - USD ($) | 6 Months Ended | |
Jan. 31, 2017 | Jul. 31, 2016 | |
Notes to Financial Statements | ||
Balance - Derivative warrant liability Value | $ 2,567,328 | $ 2,048,846 |
Forfeited or expired, value | $ (240,906) | |
Forfeited or expired, no. of warrants | (54,545) | |
Warrants exercised | (3,333) | |
Increase (Decrease) in fair value of derivative warrant liability | $ 759,388 | |
No. of Warrants - Derivative warrant liability | 326,000 | 383,878 |
Derivative Liabilities - Fair v
Derivative Liabilities - Fair value assumptions, derivative warrant liability (Details) - $ / shares | 1 Months Ended | 6 Months Ended |
Jul. 31, 2016 | Jan. 31, 2017 | |
Notes to Financial Statements | ||
Current exercise price | $ 20 | $ 15 |
Time to expiration | 2 years 1 month | 1 year 5 months |
Risk-free interest rate | 0.76% | 1.46% |
Estimated volatility | 101.00% | 167.00% |
Dividend | 0.00% | |
Stock price at period end date | $ 10 | $ 8 |
Derivative Liabilities - Fair37
Derivative Liabilities - Fair value assumptions, derivative additional investment rights liability (Details) | 1 Months Ended | 6 Months Ended |
Jul. 31, 2016$ / shares | Jan. 31, 2017$ / sharesshares | |
Notes to Financial Statements | ||
Underlying number of units of convertible preferred stock | shares | 500 | |
Underlying number of units of warrants | shares | 33,333 | |
Current exercise price of warrants | $ 20 | $ 15 |
Current conversion price of preferred stock | $ 15 | |
Time to expiration | 18 days | |
Risk-free interest rate | 0.0038 | |
Estimated volatility | 0.13 | |
Dividend | 0.00% | |
Stock price at period end date | $ 10 | $ 8 |
Derivative Liabilities (Details
Derivative Liabilities (Details Narrative) - USD ($) | 6 Months Ended | ||
Jan. 31, 2017 | Jan. 31, 2016 | Jul. 31, 2016 | |
Derivative warrants weighted average remaining life | 1 year 10 months | ||
Recognition of gain (loss) | $ 518,482 | $ 30,684 | |
Fair value of derivative liability | 2,567,328 | $ 2,048,846 | |
Additional recognition of gain, “Change in fair value of derivative liabilities” | 193,408 | $ 134,138 | |
Series G Convertible Preferred Stock | |||
Fair value of derivative liability | $ 0 | $ 193,408 |
Acquisition of Hema Diagnosti39
Acquisition of Hema Diagnostics Systems, LLC - Net purchase price of HDS (Details) - USD ($) | 6 Months Ended | |||
Jan. 18, 2017 | Feb. 28, 2017 | Jan. 31, 2017 | Jul. 31, 2016 | |
Purchase price: | ||||
Shares | 53,211 | 103,809 | 992,009 | 908,541 |
At Closing | ||||
Purchase price: | ||||
Stock Price at Closing | $ 4.77 | |||
Shares | 53,191 | |||
Fair Value | $ 253,721 | |||
After Closing | ||||
Purchase price: | ||||
Stock Price at Closing | $ 4.77 | |||
Shares | 18 | |||
Fair Value | $ 95 | |||
Post Reverse Stock Split | ||||
Purchase price: | ||||
Stock Price at Closing | $ 4.77 | |||
Shares | 230,000 | |||
Fair Value | $ 1,097,100 | |||
Net Purchase Price | ||||
Purchase price: | ||||
Fair Value | $ 1,350,916 |
Acquisition of Hema Diagnosti40
Acquisition of Hema Diagnostics Systems, LLC - Preliminary purchase price allocation of HDS (Details) | 6 Months Ended |
Jan. 18, 2017USD ($) | |
Purchase price allocation: | |
Net assets of HDS | $ (13,642,900) |
Non-controlling interest | (1,297,939) |
In-Process Research & Development | 1,955,932 |
Goodwill | 14,335,823 |
Total Purchase Price | 1,350,916 |
Non-controlling interest | $ 1,297,939 |
Acquisition of Hema Diagnosti41
Acquisition of Hema Diagnostics Systems, LLC - Carrying amount of goodwill and other intangible assets (Details) | 6 Months Ended |
Jan. 31, 2017USD ($) | |
Total | |
Acquisition of HDS | $ 16,291,754 |
Current year amortization | |
Impairment of goodwill | (14,335,822) |
Ending balance | 1,955,932 |
Goodwill | |
Acquisition of HDS | 14,335,822 |
Current year amortization | |
Impairment of goodwill | (14,335,822) |
Ending balance | |
Other Intangibles, net | |
Acquisition of HDS | 1,955,932 |
Current year amortization | |
Impairment of goodwill | |
Ending balance | $ 1,955,932 |
Acquisition of Hema Diagnosti42
Acquisition of Hema Diagnostics Systems, LLC (Details Narrative) - USD ($) | 6 Months Ended | |||
Jan. 31, 2017 | Feb. 28, 2017 | Jan. 18, 2017 | Jul. 31, 2016 | |
Common stock issued | 992,009 | 103,809 | 53,211 | 908,541 |
Hema Diagnostic Systems, LLC | ||||
Acquisition of interest | 51.00% | |||
Acquisition of outstanding limited liability company units | 4,950 | |||
Shares exchanged for outstanding limited liability units | 53,191 | |||
Value of shares exchanged for outstanding limited liability units | $ 250,000 | |||
Common stock issued | 20 | |||
Limited liability company units receied | 300 | |||
Common stock to be issued | 230,000 | |||
Warrant issued to acquire stock | 15,000,000 | |||
Common stock, price per year | $ 2.50 | |||
Total consideration | $ 1,350,916 | |||
Intangible assets acquired | $ 1,955,932 | |||
Goodwill acquired | $ 14,300,000 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | 1 Months Ended | 6 Months Ended | |||||||
Mar. 31, 2017 | Feb. 28, 2017 | Jan. 31, 2017 | Jan. 31, 2016 | Mar. 30, 2017 | Mar. 06, 2017 | Feb. 24, 2017 | Jan. 18, 2017 | Jul. 31, 2016 | |
Subsequent Events [Abstract] | |||||||||
Common stock issued | 103,809 | 992,009 | 53,211 | 908,541 | |||||
Warrants exercised | 314,684 | ||||||||
Common stock issued as make-whole payments | $ 33,939 | $ 72,900 | $ 113,400 | ||||||
Preferred stock converted to common stock | 350 shares of Series G | ||||||||
Deposit payable to Emmaus | $ 3,000,000 | $ 500,000 | $ 1,500,000 | ||||||
Convertible note | $ 1,097,100 | 674,855 | |||||||
Consideration received for note | $ 562,379 | ||||||||
Cash received | 500,000 | ||||||||
Value of cancelled note | 50,000 | ||||||||
Accured interest | $ 3,879 | ||||||||
Legal fees | 8,500 | ||||||||
Original issue discount | 112,476 | ||||||||
Advances | $ 149,000 |