Document and Entity Information
Document and Entity Information - USD ($) $ in Thousands | 2 Months Ended | ||
Dec. 31, 2018 | Mar. 07, 2019 | Jun. 30, 2018 | |
Document And Entity Information | |||
Entity Registrant Name | POLARITYTE, INC. | ||
Entity Central Index Key | 0001076682 | ||
Document Type | 10-KT | ||
Document Period End Date | Dec. 31, 2018 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business Flag | true | ||
Entity Emerging Growth Company | false | ||
Entity Ex Transition Period | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 319,000 | ||
Entity Common Stock, Shares Outstanding | 21,688,858 | ||
Trading Symbol | PTE | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2018 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2018 | Oct. 31, 2018 | Oct. 31, 2017 |
Current assets: | |||
Cash and cash equivalents | $ 55,673 | $ 70,961 | $ 17,667 |
Short-term investments | 6,162 | ||
Accounts receivable | 712 | 940 | |
Inventory | 336 | 238 | |
Prepaid expenses and other current assets | 1,432 | 1,163 | 297 |
Total current assets | 64,315 | 73,302 | 17,964 |
Non-current assets: | |||
Property and equipment, net | 13,736 | 12,927 | 2,173 |
Intangible assets, net | 924 | 957 | |
Goodwill | 278 | 278 | |
Other assets | 913 | 378 | 15 |
Total non-current assets | 15,851 | 14,540 | 2,188 |
TOTAL ASSETS | 80,166 | 87,842 | 20,152 |
Current liabilities: | |||
Accounts payable and accrued expenses | 6,508 | 4,363 | 1,939 |
Other current liabilities | 316 | 286 | |
Current portion of long-term note payable | 529 | 519 | |
Deferred revenue | 170 | 150 | |
Warrant liability and embedded derivative | 13,502 | ||
Total current liabilities | 7,523 | 5,318 | 15,441 |
Long-term note payable, net | 479 | 736 | |
Other long-term liabilities | 131 | 126 | |
Total liabilities | 8,133 | 6,180 | 15,441 |
Commitments and Contingencies | |||
Redeemable convertible preferred stock - 0, 0, and 6,455 shares authorized, issued and outstanding at December 31, 2018, October 31, 2018 and 2017, respectively; liquidation preference - $0, $0, and $17,750, respectively | 4,541 | ||
STOCKHOLDERS' EQUITY: | |||
Convertible preferred stock - 25,000,000 shares authorized, 0, 0, and 3,230,655 shares issued and outstanding at December 31, 2018, October 31, 2018 and 2017; aggregate liquidation preference $0, $0, and $2,140, respectively | 109,995 | ||
Common stock - $.001 par value; 250,000,000 shares authorized; 21,447,088, 21,423,999, and 6,515,524 shares issued and outstanding at December 31, 2018, October 31, 2018 and 2017, respectively | 21 | 21 | 7 |
Additional paid-in capital | 414,840 | 406,087 | 149,173 |
Accumulated other comprehensive income | 36 | ||
Accumulated deficit | (342,864) | (324,446) | (259,005) |
Total stockholders' equity | 72,033 | 81,662 | 170 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 80,166 | $ 87,842 | $ 20,152 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2018 | Oct. 31, 2018 | Oct. 31, 2017 |
Statement of Financial Position [Abstract] | |||
Redeemable convertible preferred stock, shares authorized | 0 | 0 | 6,455 |
Redeemable convertible preferred stock, shares issued | 0 | 0 | 6,455 |
Redeemable convertible preferred stock, shares outstanding | 0 | 0 | 6,455 |
Redeemable convertible preferred stock, liquidation preference | $ 0 | $ 0 | $ 17,750 |
Convertible preferred stock, shares authorized | 25,000,000 | 25,000,000 | 25,000,000 |
Convertible preferred stock, shares issued | 0 | 0 | 3,230,655 |
Convertible preferred stock, shares outstanding | 0 | 0 | 3,230,655 |
Convertible preferred stock, liquidation preference | $ 0 | $ 0 | $ 2,140 |
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 250,000,000 | 250,000,000 | 250,000,000 |
Common stock, shares issued | 21,447,088 | 21,423,999 | 6,515,524 |
Common stock, shares outstanding | 21,447,088 | 21,423,999 | 6,515,524 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 2 Months Ended | 12 Months Ended | |
Dec. 31, 2018 | Oct. 31, 2018 | Oct. 31, 2017 | |
Net revenues | |||
Total net revenues | $ 673 | $ 1,563 | |
Cost of sales: | |||
Total costs of sales | 381 | 1,002 | |
Gross profit | 292 | 561 | |
Operating costs and expenses | |||
Research and development | 3,458 | 19,376 | 7,107 |
Research and development - intellectual property acquired | 104,693 | ||
General and administrative | 12,639 | 48,252 | 18,812 |
Sales and marketing | 2,725 | 2,365 | |
Total operating costs and expenses | 18,822 | 69,993 | 130,612 |
Operating loss | (18,530) | (69,432) | (130,612) |
Other income (expense) | |||
Interest income, net | 80 | 395 | 23 |
Other income, net | 32 | ||
Change in fair value of derivatives | 3,814 | 109 | |
Loss on extinguishment of warrant liability | (520) | ||
Net loss from continuing operations before income taxes | (18,418) | (65,743) | (130,480) |
Benefit for income taxes | 302 | ||
Net loss from continuing operations | (18,418) | (65,441) | (130,480) |
Loss from discontinued operations | (449) | ||
Gain on sale of discontinued operations | 100 | ||
Loss from discontinued operations, net | (349) | ||
Net loss after income taxes | (18,418) | (65,441) | (130,829) |
Deemed dividend - accretion of discount on Series F preferred stock | (1,290) | (369) | |
Deemed dividend - exchange of Series F preferred stock | (7,057) | ||
Cumulative dividends on Series F preferred stock | (373) | (124) | |
Net loss attributable to common stockholders | $ (18,418) | $ (74,161) | $ (131,322) |
Net loss per share, basic and diluted: | |||
Loss from continuing operations | $ (0.86) | $ (4.29) | $ (26.50) |
Loss from discontinued operations | (0.07) | ||
Net loss | (0.86) | (4.29) | (26.57) |
Deemed dividend - accretion of discount on Series F preferred stock | (0.09) | (0.07) | |
Deemed dividend - exchange of Series F preferred stock | (0.46) | ||
Cumulative dividends on Series F preferred stock | (0.02) | (0.03) | |
Net loss attributable to common stockholders | $ (0.86) | $ (4.86) | $ (26.67) |
Weighted average shares outstanding, basic and diluted: | 21,343,446 | 15,259,731 | 4,923,327 |
Products [Member] | |||
Net revenues | |||
Total net revenues | $ 210 | $ 689 | |
Cost of sales: | |||
Total costs of sales | 194 | 500 | |
Services [Member] | |||
Net revenues | |||
Total net revenues | 463 | 874 | |
Cost of sales: | |||
Total costs of sales | $ 187 | $ 502 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 2 Months Ended | 12 Months Ended | |
Dec. 31, 2018 | Oct. 31, 2018 | Oct. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | |||
Net loss after income taxes | $ (18,418) | $ (65,441) | $ (130,829) |
Other comprehensive income: | |||
Unrealized gain on available-for-sale securities | 36 | ||
Comprehensive loss | $ (18,382) | $ (65,441) | $ (130,829) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Other Comprehensive Income [Member] | Accumulated Deficit [Member] | Total |
Balance at Oct. 31, 2016 | $ 10,153 | $ 3 | $ 123,417 | $ (128,176) | $ 5,397 | |
Balance, shares at Oct. 31, 2016 | 7,374,454 | 2,782,963 | ||||
Conversion of Series A preferred stock to common stock | $ (976) | $ 1 | 975 | |||
Conversion of Series A preferred stock to common stock, shares | (3,991,487) | 761,798 | ||||
Conversion of Series B preferred stock to common stock | $ (549) | 549 | ||||
Conversion of Series B preferred stock to common stock, shares | (6,512) | 108,543 | ||||
Conversion of Series C preferred stock to common stock | $ (1,809) | $ 1 | 1,808 | |||
Conversion of Series C preferred stock to common stock, shares | (23,185) | 504,184 | ||||
Conversion of Series D preferred stock to common stock | $ (1,517) | 1,517 | ||||
Conversion of Series D preferred stock to common stock, shares | (129,665) | 216,106 | ||||
Issuance of Series E preferred stock for research and development intellectual property | $ 104,693 | 104,693 | ||||
Issuance of Series E preferred stock for research and development intellectual property, shares | 7,050 | |||||
Stock option exercise | 1,301 | 1,301 | ||||
Stock option exercise, shares | 268,847 | |||||
Warrants exchanged for common stock | 78 | 78 | ||||
Warrants exchanged for common stock, shares | 56,250 | |||||
Stock-based compensation expense | $ 1 | 17,744 | 17,745 | |||
Stock-based compensation expense, shares | 1,057,500 | |||||
Common stock issued for cash | $ 1 | 2,277 | 2,278 | |||
Common stock issued for cash, shares | 759,333 | |||||
Deemed dividend - accretion of discount on Series F preferred stock | (369) | (369) | ||||
Cumulative dividends on Series F preferred stock | (124) | (124) | ||||
Series F preferred stock dividends paid in common stock | ||||||
Net loss | (130,829) | (130,829) | ||||
Balance at Oct. 31, 2017 | $ 109,995 | $ 7 | 149,173 | (259,005) | 170 | |
Balance, shares at Oct. 31, 2017 | 3,230,655 | 6,515,524 | ||||
Conversion of Series A preferred stock to common stock | $ (769) | $ 1 | 768 | |||
Conversion of Series A preferred stock to common stock, shares | (3,146,671) | 713,036 | ||||
Conversion of Series B preferred stock to common stock | $ (4,020) | $ 1 | 4,019 | |||
Conversion of Series B preferred stock to common stock, shares | (47,689) | 794,820 | ||||
Conversion of Series C preferred stock to common stock | $ (201) | 201 | ||||
Conversion of Series C preferred stock to common stock, shares | (2,578) | 59,950 | ||||
Conversion of Series D preferred stock to common stock | $ (312) | 312 | ||||
Conversion of Series D preferred stock to common stock, shares | (26,667) | 44,445 | ||||
Stock option exercise | 687 | 687 | ||||
Stock option exercise, shares | 161,433 | |||||
Warrants exchanged for common stock | ||||||
Stock-based compensation expense | 38,821 | 38,821 | ||||
Stock-based compensation expense, shares | 126,000 | |||||
Deemed dividend - accretion of discount on Series F preferred stock | (1,290) | (1,290) | ||||
Cumulative dividends on Series F preferred stock | (373) | (373) | ||||
Conversion of Series E preferred stock to common stock | $ (104,693) | $ 7 | 104,686 | |||
Conversion of Series E preferred stock to common stock, shares | (7,050) | 7,050,000 | ||||
Exchange of Series F preferred stock and dividends to common stock | $ 1 | 13,060 | 13,061 | |||
Exchange of Series F preferred stock and dividends to common stock, shares | 1,003,393 | |||||
Extinguishment of warrant liability | 3,045 | 3,045 | ||||
Extinguishment of warrant liability, shares | 151,871 | |||||
Proceeds received from issuance of common stock, net of issuance costs of $2,785 | $ 4 | 92,672 | 92,676 | |||
Proceeds received from issuance of common stock, net of issuance costs of $2,785, shares | 4,791,819 | |||||
Series F preferred stock dividends paid in common stock | 306 | 306 | ||||
Series F preferred stock dividends paid in common stock, shares | 11,708 | |||||
Net loss | (65,441) | (65,441) | ||||
Balance at Oct. 31, 2018 | $ 21 | 406,087 | (324,446) | 81,662 | ||
Balance, shares at Oct. 31, 2018 | 21,423,999 | |||||
Warrants exchanged for common stock | ||||||
Stock-based compensation expense | 8,908 | 8,908 | ||||
Stock-based compensation expense, shares | ||||||
Deemed dividend - accretion of discount on Series F preferred stock | ||||||
Cumulative dividends on Series F preferred stock | ||||||
Series F preferred stock dividends paid in common stock | ||||||
Vesting of restricted stock units, net | ||||||
Vesting of restricted stock units, net, shares | 23,089 | |||||
Shares withheld for tax withholding on vesting of restricted stock | (155) | (155) | ||||
Other comprehensive income | 36 | 36 | ||||
Net loss | (18,418) | (18,418) | ||||
Balance at Dec. 31, 2018 | $ 21 | $ 414,840 | $ 36 | $ (342,864) | $ 72,033 | |
Balance, shares at Dec. 31, 2018 | 21,447,088 |
Consolidated Statements of St_2
Consolidated Statements of Stockholders' Equity (Parenthetical) $ in Thousands | Oct. 31, 2018USD ($) |
Statement of Stockholders' Equity [Abstract] | |
Proceeds from issuance of common stock, net of issuance costs | $ 2,785 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 2 Months Ended | 12 Months Ended | |
Dec. 31, 2018 | Oct. 31, 2018 | Oct. 31, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES | |||
Net loss | $ (18,418) | $ (65,441) | $ (130,829) |
Loss from discontinued operations | 349 | ||
Loss from continuing operations | (18,418) | (65,441) | (130,480) |
Adjustments to reconcile net loss from continuing operations to net cash used in continuing operating activities: | |||
Stock based compensation expense | 8,946 | 38,821 | 16,627 |
Change in fair value of derivatives | (3,814) | (109) | |
Depreciation and amortization | 330 | 1,394 | 432 |
Loss on extinguishment of warrant liability | 520 | ||
Amortization of intangible assets | 33 | 100 | |
Amortization of debt discount | 10 | 35 | |
Change in fair value of contingent consideration | 57 | 20 | |
Other non-cash adjustments | 86 | ||
Research and development - intellectual property acquired | 104,693 | ||
Changes in operating assets and liabilities: | |||
Accounts receivable | 228 | (940) | |
Inventory | (98) | (238) | |
Prepaid expenses and other current assets | (279) | (911) | (190) |
Other assets | (535) | (378) | |
Accounts payable and accrued expenses | 1,621 | 2,136 | 1,411 |
Deferred revenue | 20 | 150 | |
Net cash used in continuing operating activities | (7,999) | (28,546) | (7,616) |
Net cash provided by discontinued operating activities | 33 | ||
Net cash used in operating activities | (7,999) | (28,546) | (7,583) |
CASH FLOWS FROM INVESTING ACTIVITIES | |||
Purchase of property and equipment | (834) | (9,221) | (2,544) |
Purchase of available-for-sale securities | (10,200) | ||
Proceeds from maturities of available-for-sale securities | 4,003 | ||
Acquisition of IBEX | (2,258) | ||
Net cash used in continuing investing activities | (7,031) | (11,479) | (2,544) |
Net cash provided by discontinued investing activities | 10 | 60 | 25 |
Net cash used in investing activities | (7,021) | (11,419) | (2,519) |
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Principal payments on note payable | (257) | ||
Proceeds from stock options exercised | 687 | 1,301 | |
Net proceeds from the sale of preferred stock and warrants | 17,667 | ||
Net proceeds from the sale of common stock | 92,676 | 2,278 | |
Payment of contingent consideration liability | (30) | ||
Payments on capital leases | (11) | (74) | |
Net cash (used in)/provided by financing activities | (268) | 93,259 | 21,246 |
Net (decrease)/increase in cash and cash equivalents | (15,288) | 53,294 | 11,144 |
Cash and cash equivalents - beginning of period | 70,961 | 17,667 | 6,523 |
Cash and cash equivalents - end of period | 55,673 | 70,961 | 17,667 |
Supplemental schedule of non-cash investing and financing activities: | |||
Conversion of Series A preferred stock to common stock | 769 | 976 | |
Conversion of Series B preferred stock to common stock | 4,020 | 549 | |
Conversion of Series C preferred stock to common stock | 201 | 1,809 | |
Conversion of Series D preferred stock to common stock | 312 | 1,517 | |
Conversion of Series E preferred stock to common stock | 104,693 | ||
Exchange of Series F preferred stock for common stock | 13,061 | ||
Extinguishment of warrant liability | 2,525 | ||
Unpaid liability for acquisition of property and equipment | 600 | 300 | 54 |
Warrants exchanged for common stock shares | 78 | ||
Establishment of warrant liability in connection with Series F Preferred Stock issuance | 4,299 | ||
Establishment of derivative liability in connection with Series F Preferred Stock issuance | 9,319 | ||
Deemed dividend – accretion of discount on Series F preferred stock | 1,290 | 369 | |
Cumulative dividends on Series F preferred stock | 373 | 124 | |
Series F preferred stock dividends paid in common stock | 306 | ||
Contingent consideration for IBEX acquisition | 278 | ||
Contingent consideration earned and recorded in accounts payable | 31 | 33 | |
Note payable issued as partial consideration for IBEX acquisition | 1,220 | ||
Property and equipment additions through capital leases | 20 | 251 | |
Unpaid tax liability related to net share settlement of restricted stock units | 155 | ||
Unrealized gain on short-term investments and cash equivalents | $ 36 |
Principal Business Activity and
Principal Business Activity and Basis of Presentation | 2 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principal Business Activity and Basis of Presentation | 1. PRINCIPAL BUSINESS ACTIVITY AND BASIS OF PRESENTATION PolarityTE, Inc. and subsidiaries (the “Company”) is a commercial-stage biotechnology and regenerative biomaterials company focused on transforming the lives of patients by discovering, designing and developing a range of regenerative tissue products and biomaterials for the fields of medicine, biomedical engineering and material sciences. Change in Fiscal Year end. Asset Acquisition and Name Change. , n/k/a On April 7, 2017, the Company issued 7,050 shares of its newly authorized Series E Preferred Stock (the “Series E Preferred Shares”) to Dr. Denver Lough, the developer of the Company’s tissue regeneration technology who became the Company’s Chief Executive Officer, for the purchase of Polarity NV’s assets. The Series E Preferred Stock was convertible into an aggregate of 7,050,000 shares of the Company’s common stock with a fair value of approximately $104.7 million based on the closing price of the Company’s common stock as of April 7, 2017. Since the assets purchased were in-process research and development assets with no alternative future use, the total purchase price was immediately expensed as research and development - intellectual property acquired. The Company adopted ASU 2017-01, Business Combinations (Topic 805), Clarifying the Definition of a Business Discontinued Operations. In May 2018, the Company purchased the assets of a preclinical research sciences business and related real estate from Ibex Group, L.L.C., a Utah limited liability company, and Ibex Preclinical Research, Inc., a Utah corporation (collectively, “IBEX”). The Company acquired these assets to accelerate research and development of its TE product candidates, and now operates the business to advance its product development and deliver preclinical research services to third parties (see Note 4). |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 2 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation. Segments. Use of estimates. Reclassifications. Cash and cash equivalents. Investments Accounts Receivable. Accounts Payable and Accrued Expenses. Inventory. Property and Equipment. Capitalized Software. Goodwill and Intangible Assets. The fair value of reporting units is based on widely accepted valuation techniques that the Company believes market participants would use, although the valuation process requires significant judgment and often involves the use of significant estimates and assumptions. We performed a qualitative assessment and concluded that it is more likely than not that the fair value of the reporting unit is more than its carrying value. Accordingly, there was no indication of impairment, and further quantitative testing was not required. Adverse market or economic events could result in impairment charges in future periods. Intangible assets deemed to have finite lives are amortized on a straight-line basis over their estimated useful lives, which generally range from one to eleven years. The useful life is the period over which the asset is expected to contribute directly, or indirectly, to its future cash flows. Intangible assets are reviewed for impairment when certain events or circumstances exist. For amortizable intangible assets, impairment exists when the undiscounted cash flows exceed its carrying value. At least annually, the remaining useful life is evaluated. Impairment of Long-Lived Assets. Income Taxes. Stock-Based Compensation. The fair value for options issued is estimated at the date of grant using a Black-Scholes option-pricing model. The risk-free rate is derived from the U.S. Treasury yield curve in effect at the time of the grant. The volatility factor is determined based on the Company’s historical stock prices. Forfeitures are recognized as they occur. The value of restricted stock grants is measured based on the fair market value of the Company’s common stock on the date of grant and amortized over the vesting period of, generally, six months to three years. The accounting for non-employee options and restricted stock is similar to that of employees, however, unlike employee options and restricted stock, the measurement date is not the grant date. The measurement date is when performance is complete. Until the options or shares vest, they are re-measured (re-valued) each reporting period and the expense marked up or marked down accordingly. Loss Per Share. Since the Company was in a loss position for all periods presented, basic net loss per share is the same as diluted net loss per share since the effects of potentially dilutive securities are antidilutive. Commitments and Contingencies. Accounting for Warrants Change in Fair Value of Derivatives. Revenue Recognition. Revenue from Contracts with Customers Revenue Recognition Under ASC 605, regenerative medicine revenue is recognized upon the shipment of products or the performance of services when each of the following four criteria is met: (i) persuasive evidence of an arrangement exists; (ii) products are delivered or services are performed; (iii) the sales price is fixed or determinable; and (iv) collectability is reasonably assured. In the contract services segment, revenue is recognized on the proportional performance method over the term of the respective service contract which requires us to make reasonable estimates of the extent of progress toward completion of the contract. Under this method, revenue is recognized according to the percentage of cost completed for the study. As a result, unbilled receivables and deferred revenue are recognized based on payment timing and work completed. Under ASC 606, revenue is recognized when a customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. In the regenerative medicine products segment, the Company records product revenues primarily from the sale of its regenerative tissue products. The Company sells its products to healthcare providers, primarily through direct sales representatives. Product revenues consists of a single performance obligation that the Company satisfies at a point in time. In general, the Company recognizes product revenue upon delivery to the customer. In the contract services segment, the Company records service revenues from the sale of its contract research services, which includes delivery of preclinical studies and other research services to unrelated third parties. Service revenues generally consist of a single performance obligation that the Company satisfies over time using an input method based on costs incurred to date relative to the total costs expected to be required to satisfy the performance obligation. The Company believes that this method provides a faithful depiction of the transfer of services over the term of the performance obligation based on the remaining services needed to satisfy the obligation. This requires the Company to make reasonable estimates of the extent of progress toward completion of the contract. As a result, unbilled receivables and deferred revenue are recognized based on payment timing and work completed. Generally, a portion of the payment is due upfront and the remainder upon completion of the study, with most studies completing in less than a year. As of December 31, 2018, October 31, 2018 and 2017, the Company had unbilled receivables of $157,000, $160,000 and $0 and deferred revenue of $170,000, $150,000 and $0. The unbilled receivables balance is included in consolidated accounts receivable. Revenue of $83,000 was recognized during the two months ended December 31, 2018 that was included in the deferred revenue balance as of October 31, 2018. Costs to obtain the contract are incurred for product revenue as they are shipped and are expensed as incurred. The Company considers a significant customer to be one that comprises more than 10% of net revenues or accounts receivable. Concentration of revenues were as follows for the two months ended December 31, 2018 and the fiscal year ended October 31, 2018: Two Months Ended December 31, 2018 Year Ended October 31, 2018 Segment % of Revenue % of Revenue Customer A Contract Services 32 % 19 % Customer B Regenerative Medicine 17 % * Customer C Contract Services 11 % * Concentration of accounts receivable were as follows as of December 31, 2018: As of December 31, 2018 Segment % of Accounts Receivable Customer A Contract services 23 % Customer B Regenerative medicine 20 % Customer D Regenerative medicine 14 % *The amount did not exceed 10% Recent Accounting Pronouncements In February 2016, FASB issued ASU No. 2016-02, Leases (Topic 842), Leases (Topic 840) In July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842): Targeted Improvements The Company expects that this standard will have a material effect on the financial statements upon adoption. The most significant effects will primarily relate to (a) the recognition of ROU assets and lease liabilities on the balance sheet, which upon adoption will range from $5.2 million to $5.6 million in relation to its existing operating lease agreements for the office and laboratory spaces in Salt Lake City, Utah; and (b) providing significant new disclosures about leasing activities. In June 2018, the FASB issued ASU 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-based Payment Accounting In August 2018, the FASB issued ASU 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40) In November 2018, the FASB issued ASU No. 2018-18, Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606 Recently Adopted Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows - Classification of Certain Cash Receipts and Cash Payments The adoption of this ASU on November 1, 2018 has not had a material impact on the Company’s consolidated financial statements and related disclosures. In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting. The adoption of this ASU on November 1, 2018 has not had a material impact on the Company’s consolidated financial statements and related disclosures. In January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment. had no impact on the Company’s consolidated financial statements and related disclosures. |
Liquidity
Liquidity | 2 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Liquidity | 3. LIQUIDITY The Company has experienced recurring losses and cash outflows from operating activities. For the two months ended December 31, 2018, and the fiscal year ended October 31, 2018, the Company incurred net losses of $18.4 million and $65.4 million, respectively, with cash used in operating activities of $8.0 million and $28.5 million, respectively. On April 12, 2018, the Company completed a public offering of 2,335,937 shares of the Company’s common stock, par value $0.001 per share, at an offering price of $16.00 per share resulting in net proceeds of approximately $34.6 million, after deducting offering expenses payable by the Company and on June 7, 2018, the Company completed an underwritten offering of 2,455,882 shares of the Company’s common stock, par value $0.001 per share, at an offering price of $23.65 per share resulting in net proceeds of approximately $58.0 million, after deducting offering expenses payable by the Company (see Note 11). Based upon the current status of our product development and commercialization plans, we believe that our existing cash and cash equivalents will be adequate to satisfy our capital needs for at least the next 12 months from the date of filing. However, we anticipate needing substantial additional financing to continue clinical deployment and commercialization of our lead product SkinTE, development of our other product candidates, and scaling the manufacturing capacity for our products and product candidates, and prepare for commercial readiness. However, we will continue to pursue fundraising opportunities when available, but such financing may not be available in the future on terms favorable to us, if at all. If adequate financing is not available, we may be required to delay, reduce the scope of, or eliminate one or more of our product development programs. We plan to meet our capital requirements primarily through issuances of equity securities, debt financing, revenue from product sales and future collaborations. Failure to generate revenue or raise additional capital would adversely affect our ability to achieve our intended business objectives. |
IBEX Acquisition
IBEX Acquisition | 2 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
IBEX Acquisition | 4 . IBEX ACQUISITION On March 2, 2018, the Company, along with its wholly owned subsidiary, Utah CRO Services, Inc., a Nevada corporation, entered into agreements with IBEX for the purchase of the assets and rights to the Seller’s preclinical research and contract services business and related real estate. The Company acquired this preclinical biomedical research facility in order to accelerate research and development of PolarityTE pipeline products. The business consists of a GLP compliant preclinical research facility, including vivarium, operating rooms, preparation rooms, storage facilities, and surgical and imaging equipment. The real property includes two parcels in Cache County, Utah, consisting of approximately 1.75 combined gross acres of land, together with the buildings, structures, fixtures, and personal property located on the real property. The above was accounted for as a business combination. The acquisition closed on May 3, 2018. The aggregate purchase price was $3.8 million, of which $2.3 million was paid at closing and the balance satisfied by a promissory note payable to the Seller with an initial fair value of $1.2 million (see Note 10) and contingent consideration with an initial fair value of approximately $0.3 million. During the year ended October 31, 2018, the Company recorded approximately $38,000 of direct and incremental costs associated with acquisition-related activities. These costs were incurred primarily for banking, legal, and professional fees associated with the IBEX acquisition. These costs were recorded in general and administrative expenses in the consolidated statement of operations. During the two months ended December 31, 2018 and the fiscal year ended October 31, 2018, IBEX contributed approximately $437,000 and $831,000 to net revenues and approximately $250,000 and $331,000 to gross profit, respectively. Purchase Price Allocation The following table summarizes the purchase price allocation for the IBEX acquisition (in thousands): Equipment $ 430 Land and buildings 2,000 Intangible assets 1,057 Goodwill 278 Accrued property taxes (9 ) Aggregate purchase price $ 3,756 Less: Promissory note to seller 1,220 Contingent consideration 278 Cash paid at closing $ 2,258 As part of the acquisition of IBEX, the Company recorded a contingent consideration liability of $0.3 million in current liabilities in the consolidated balance sheet. The contingent consideration represents the estimated fair value of future payments due to the Seller of IBEX based on IBEX’s revenue generated from studies quoted prior to but completed after the transaction. Contingent consideration is initially recognized at fair value as purchase consideration and subsequently remeasured at fair value through earnings. The initial fair value of the contingent consideration was based on the present value of estimated future cash flows using a 20% discount rate. The contingent consideration is the payment of 15% of the actual revenues received for work on any study initiated within 18 months following the closing of the purchase on the basis of certain specific customer prospects that received service proposals prior to the closing, provided that the total payments will not exceed $650,000. The subsequent increase in fair value of contingent consideration from acquisition to October 31, 2018 of approximately $20,000 was recognized in general and administrative expense in the Company’s consolidated statement of operations for the fiscal year ended October 31, 2018. During the two months ended December 31, 2018, $57,000 was recognized in general and administrative expense in the Company’s consolidated statement of operations for additional increase in fair value of contingent consideration. The excess of the fair value of purchase consideration over the fair values of identifiable assets and liabilities acquired is recorded as goodwill, including the value of the assembled workforce. Disclosure of pro-forma revenues and earnings attributable to the acquisition is excluded because it is impracticable to obtain complete historical financial records for IBEX Preclinical Research, Inc. The following table shows the valuation of the individual identifiable intangible assets acquired along with their estimated remaining useful lives as of the acquisition date (in thousands): Approximate Fair Value Remaining Useful Life (in years) Non-compete agreement $ 410 4 Customer contracts and relationships 534 7 to 8 Trade names and trademarks 101 10 to 11 Backlog 12 Less than 1 Total intangible assets $ 1,057 |
Fair Value
Fair Value | 2 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value | 5. FAIR VALUE In accordance with ASC 820, Fair Value Measurements and Disclosures ● Level 1: Observable inputs such as quoted prices in active markets for identical instruments. This methodology applies to our Level 1 investments, which are composed of money market funds. ● Level 2: Quoted prices for similar instruments that are directly or indirectly observable in the market. This methodology applies to our Level 2 investments, which are composed of corporate debt securities, commercial paper, and U.S. government debt securities. ● Level 3: Significant unobservable inputs supported by little or no market activity. Financial instruments whose values are determined using pricing models, discounted cash flow methodologies, or similar techniques, for which determination of fair value requires significant judgment or estimation. This methodology applies to our Level 3 financial instruments, which are composed of warrant liability, derivative liability, and contingent consideration. Financial instruments measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. There were no transfers within the hierarchy for any of the periods presented. In connection with the offering of Units in September 2017 (see Note 11), the Company issued warrants to purchase an aggregate of 322,727 shares of common stock. These warrants were exercisable at $30.00 per share and expire in two years. The warrants were liabilities pursuant to ASC 815. The warrant agreement provided for an adjustment to the number of common shares issuable under the warrant or adjustment to the exercise price, including but not limited to, if: (a) the Company issues shares of common stock as a dividend or distribution to holders of its common stock; (b) the Company subdivides or combines its common stock (i.e., stock split); or (c) the Company issues new securities for consideration less than the exercise price. Under ASC 815, warrants that provide for down-round exercise price protection are recognized as derivative liabilities. The Series F Preferred Shares contained an embedded conversion feature that was not clearly and closely related to the identified host instrument and, as such, was recognized as a derivative liability measured at fair value. The Company classified these derivatives on the consolidated balance sheet as a current liability. As noted in Note 11, both the warrants and the Series F Preferred Shares were exchanged for common stock on March 6, 2018. The fair value of the bifurcated embedded conversion feature was estimated to be approximately $7.2 million and $9.3 million, respectively, at March 5, 2018 and October 31, 2017 as calculated using the Monte Carlo simulation with the following assumptions: Series F Conversion Feature March 5, 2018 October 31, 2017 Stock price $ 20.05 $ 25.87 Exercise price $ 27.50 $ 27.50 Risk-free rate 2.2 % 1.6 % Volatility 88.2 % 96.0 % Term 1.5 1.9 The fair value of the warrant liability was estimated to be approximately $2.5 million and $4.3 million, respectively, at March 5, 2018 and October 31, 2017 as calculated using the Monte Carlo simulation with the following assumptions: Warrant Liability March 5, 2018 October 31, 2017 Stock price $ 20.05 $ 25.87 Exercise price $ 30.00 $ 30.00 Risk-free rate 2.2 % 1.6 % Volatility 88.2 % 96.0 % Term 1.5 1.9 The following table sets forth the fair value of the Company’s financial assets and liabilities measured on a recurring basis by level within the fair value hierarchy as of December 31, 2018, October 31, 2018 and 2017 (in thousands): Fair Value Measurement as of December 31, 2018 Level 1 Level 2 Level 3 Total Assets: Money market funds $ 7 $ – $ – $ 7 Commercial paper – 21,392 – 21,392 Corporate debt securities – 5,448 – 5,448 U.S. government debt securities – 3,226 – 3,226 Total $ 7 $ 30,066 $ – $ 30,073 Liabilities: Contingent consideration $ – $ – $ 261 $ 261 Total $ – $ – $ 261 $ 261 Fair Value Measurement as of October 31, 2018 Level 1 Level 2 Level 3 Total Assets: Money market funds $ 69,659 $ – $ – $ 69,659 Total $ 69,659 $ – $ – $ 69,659 Liabilities: Contingent consideration $ – $ – $ 235 $ 235 Total $ – $ – $ 235 $ 235 Fair Value Measurement as of October 31, 2017 Level 1 Level 2 Level 3 Total Assets: Money market funds $ 17,322 $ – $ – $ 17,322 Total $ 17,322 $ – $ – $ 17,322 Liabilities: Warrant liability $ – $ – $ 4,256 $ 4,256 Derivative liability – – 9,246 9,246 Total $ – $ – $ 13,502 $ 13,502 The following table sets forth the changes in the estimated fair value of our contingent consideration liability (in thousands) which is included in other current liabilities: Contingent Consideration Fair value – October 31, 2017 $ – IBEX acquisition – May 3, 2018 278 Change in fair value 20 Earned and paid in cash (30 ) Earned and moved to accounts payable (33 ) Fair value - October 31, 2018 $ 235 Change in fair value 57 Earned and moved to accounts payable (31 ) Fair value – December 31, 2018 $ 261 |
Cash Equivalents and Available-
Cash Equivalents and Available-for-Sale Marketable Securities | 2 Months Ended |
Dec. 31, 2018 | |
Cash and Cash Equivalents [Abstract] | |
Cash Equivalents and Available-for-Sale Marketable Securities | 6. Cash Equivalents and Available-for-Sale Marketable Securities Cash equivalents and available-for-sale marketable securities consisted of the following as of December 31, 2018 (in thousands): December 31, 2018 Amortized Cost Unrealized Gains Unrealized Losses Market Value Cash equivalents: Money market funds $ 7 $ – $ – $ 7 Commercial paper 20,648 30 – 20,678 U.S. government debt securities 3,224 2 – 3,226 Total cash equivalents 23,879 32 – 23,911 Short-term investments: Commercial paper 714 – – 714 Corporate debt securities 5,444 5 (1 ) 5,448 Total short-term investments 6,158 5 (1 ) 6,162 Total $ 30,037 $ 37 $ (1 ) $ 30,073 As of October 31, 2018 and 2017, the Company held $69.7 million and $17.3 million in money market funds included in cash equivalents with no unrealized gains or losses. As of October 31, 2018 and 2017 the Company did not hold any available-for-sale securities. All investments of debt securities held as of December 31, 2018 had maturities of less than one year. For the two months ended December 31, 2018, the Company recognized no material realized gains or losses on available-for-sale marketable securities. |
Property and Equipment, Net
Property and Equipment, Net | 2 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | 7. PROPERTY AND EQUIPMENT, NET The following table presents the components of property and equipment, net (in thousands): December 31, 2018 October 31, 2018 October 31, 2017 Machinery and equipment $ 8,276 $ 8,134 $ 2,418 Land and buildings 2,000 2,000 – Computers and software 1,372 1,337 211 Leasehold improvements 1,230 1,137 – Construction in progress 2,402 1,587 – Furniture and equipment 614 566 30 Total property and equipment, gross 15,894 14,761 2,659 Accumulated depreciation (2,158 ) (1,834 ) (486 ) Total property and equipment, net $ 13,736 $ 12,927 $ 2,173 Depreciation and amortization expense for property and equipment, including assets acquired under capital leases for the two months ended December 31, 2018 and for the fiscal years ended October 31, 2018 and 2017 is as follows (in thousands): For the Two Months ended December 31, For the Years Ended October 31, 2018 2018 2017 General and administrative expense: Continuing operations $ 155 $ 223 $ 1 Discontinued operations – – 11 155 223 12 Research and development expense: Continuing operations 175 1,171 431 Total depreciation and amortization expense $ 330 $ 1,394 $ 443 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 2 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets and Goodwill | 8. INTANGIBLE ASSETS AND GOODWILL Intangible assets, net, consist of the following (in thousands): December 31, 2018 October 31, 2018 October 31, 2017 Non-compete agreement $ 410 $ 410 $ – Customer contracts and relationships 534 534 – Trade names and trademarks 101 101 – Backlog 12 12 – Total intangible assets, gross 1,057 1,057 – Accumulated amortization (133 ) (100 ) – Total intangible assets, net $ 924 $ 957 $ – Amortization expense for the two months ended December 31, 2018 and for the fiscal year ended October 31, 2018 was approximately $33,000 and $100,000, respectively. The future amortization of these intangible assets is expected to be as follows (in thousands): Year ended December 31, 2019 $ 193 Year ended December 31, 2020 189 Year ended December 31, 2021 189 Year ended December 31, 2022 121 Year ended December 31, 2023 87 Thereafter 145 $ 924 There were no changes in the carrying amount of goodwill for the two months ended December 31, 2018. The changes in the carrying amount of goodwill for fiscal year ended October 31, 2018 is as follows (in thousands): Regenerative Medicine Contract Services Total October 31, 2017 $ – $ – $ – Additions due to acquisitions (1) – 278 278 October 31, 2018 – 278 278 December 31, 2018 $ – $ 278 $ 278 (1) On May 3, 2018, the Company acquired the preclinical research and contract services business and related real estate from IBEX L.L.C. |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 2 Months Ended |
Dec. 31, 2018 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Expenses | 9. ACCOUNTS PAYABLE AND ACCRUED EXPENSES The following table presents the major components of accounts payable and accrued expenses (in thousands): December 31, 2018 October 31, 2018 October 31, 2017 Accounts payable $ 2,918 $ 2,007 $ 441 Salaries and other compensation 1,280 933 574 Other accruals 1,670 792 369 Legal and accounting 640 631 555 Total accounts payable and accrued expenses $ 6,508 $ 4,363 $ 1,939 Salaries and other compensation includes accrued payroll expense, accrued bonus, and estimated employer 401(k) plan contributions. |
Long Term Notes Payable
Long Term Notes Payable | 2 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Long Term Notes Payable | 10. LONG TERM NOTE PAYABLE In connection with the IBEX Acquisition, described in Note 4, the Company issued a promissory note payable to the Seller with an initial fair value of $1.2 million. The promissory note has a principal balance of $1.3 million and bears interest at a rate of 3.5% interest per annum. Principal and interest are payable in five equal installments that began on November 3, 2018 and continuing on each six-month anniversary thereafter (“Payment Date”). The promissory note may be prepaid by the Company at any time and becomes due and payable at the earlier of the maturity date of November 3, 2020 or upon an event of default, which includes failure to pay any installment on each Payment Date, breach of any negative covenants, insolvency or bankruptcy. Upon the occurrence of an event of default, the promissory note will bear an accelerated interest rate of 7% per annum from the date of the event of default. The Company initially recognized the promissory note at its fair value, using an estimated market rate of interest for the Company, which was higher than the promissory note’s stated rate. The result of imputing a market rate of interest resulted in an initial discount to the principal balance of approximately $113,000, which is being amortized to interest expense over the term of the promissory note using the effective interest method. The unamortized debt discount was $68,000 and $78,000 at December 31, 2018 and October 31, 2018, respectively. Amortization of debt discount of $10,000 and $35,000 was included in interest expense for the two months ended December 31, 2018 and the fiscal year ended October 31, 2018, respectively. |
Preferred Shares and Common Sha
Preferred Shares and Common Shares | 2 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Preferred Shares and Common Shares | 11. PREFERRED SHARES AND COMMON SHARES Common Stock Issuance On April 12, 2018, the Company completed a public offering of 2,335,937 shares of the Company’s common stock, par value $0.001 per share, at an offering price of $16.00 per share resulting in net proceeds of approximately $34.6 million, after deducting offering expenses payable by the Company. On June 7, 2018, the Company completed an underwritten offering of 2,455,882 shares of the Company’s common stock, par value $0.001 per share, at an offering price of $23.65 per share resulting in net proceeds of approximately $58.0 million, after deducting offering expenses payable by the Company. Exchange of 100% of Outstanding Series F Preferred Stock Shares and Warrants On September 20, 2017, the Company sold an aggregate of $17,750,000 worth of units of the Company’s securities (the “Units”) to accredited investors at a purchase price of $2,750 per Unit. Each Unit consisted of (i) one share of the Company’s newly authorized 6% Series F Convertible Preferred Stock, par value $0.001 per share (the “Series F Preferred Shares”), convertible into one hundred (100) shares of the Company’s common stock, and (ii) a two-year warrant to purchase up to 322,727 shares of the Company’s common stock, at an exercise price of $30.00 per share. The Series F Preferred Shares were convertible into shares of the Company’s common stock based on a conversion calculation equal to the stated value of the Series F Preferred Shares, plus all accrued and unpaid dividends, if any, on such Series F Preferred Shares, as of such date of determination, divided by the conversion price. The stated value of each Series F Preferred Share was $2,750 and the initial conversion price was $27.50 per share, each subject to adjustment for stock splits, stock dividends, recapitalizations, combinations, subdivisions or other similar events. On the two-year anniversary of the initial issuance date, any Series F Preferred Shares outstanding and not otherwise already converted, would, at the option of the holder, either (i) automatically convert into common stock of the Company at the conversion price then in effect or (ii) be repaid by the Company based on the stated value of such outstanding Series F Preferred Shares. The warrants issued in connection with the Series F Preferred Shares were determined to be liabilities pursuant to ASC 815. The warrant agreement provided for an adjustment to the number of common shares issuable under the warrant or adjustment to the exercise price, including but not limited to, if: (a) the Company issued shares of common stock as a dividend or distribution to holders of its common stock; (b) the Company subdivided or combined its common stock (i.e., stock split); or (c) the Company issues new securities for consideration less than the exercise price. Under ASC 815, warrants that provide for down-round exercise price protection are recognized as derivative liabilities. The conversion feature within the Series F Preferred Shares was determined to not be clearly and closely related to the identified host instrument and, as such, was recognized as a derivative liability measured at fair value pursuant to ASC 815. The initial fair value of the warrants and bifurcated embedded conversion feature, estimated to be approximately $4.3 million and $9.3 million, respectively, was deducted from the gross proceeds of the Unit offering to arrive at the initial discounted carrying value of the Series F Preferred Shares. The resulting discount to the aggregate stated value of the Series F Preferred Shares of approximately $13.6 million was recognized as accretion using the effective interest method similar to preferred stock dividends, over the two-year period prior to optional redemption by the holders. On March 6, 2018, the Company entered into separate exchange agreements (the “Exchange Agreements”) with holders (each a “Holder”, and collectively the “Holders”) of 100% of the Company’s outstanding Series F Preferred Shares, and the Company’s warrants to purchase shares of the Company’s common stock issued in connection with the Series F Preferred Shares (such “Warrants” and Series F Preferred Shares collectively referred to as the “Exchange Securities”) to exchange the Exchange Securities and unpaid dividends on the Series F Preferred Shares for common stock (the “Exchange”). The Exchange resulted in the following issuances: (A) all outstanding Series F Preferred Shares were converted into 972,070 shares of restricted common stock at an effective conversion price of $18.26 per share of common stock (the closing price of Common Stock on the NASDAQ Capital Market on February 26, 2018); (B) the right to receive 6% dividends underlying Series F Preferred Shares was terminated in exchange for 31,321 shares of restricted common stock; (C) 322,727 Warrants to purchase common stock were exchanged for 151,871 shares of restricted common stock; and (D) the Holders of the Warrants relinquished any and all other rights pursuant to the Warrants, including exercise price adjustments. As part of the Exchange, the Holders also relinquished all other rights related to the issuance of the Exchange Securities, the respective governing agreements and certificates of designation, including any related dividends, adjustment of conversion and exercise price, and repayment option. The existing registration rights agreement with the holders of the Series F Preferred Shares was also terminated and the holders of the Series F Preferred Shares waived the obligation of the Company to register the common shares issuable upon conversion of Series F Preferred Shares or upon exercise of the warrants, and waived any damages, penalties and defaults related to the Company failing to file or have declared effective a registration statement covering those shares. The exchange of all outstanding Series F Preferred Shares, and the holders’ right to receive 6% dividends, for common stock of the Company was recognized as follows: Fair market value of 1,003,393 shares of common stock issued at $20.05 (Company’s closing stock price on March 5, 2018) in exchange for Series F Preferred Shares and accrued dividends $ 20,117,990 Carrying value of Series F Preferred Shares at March 5, 2018, including dividends (5,898,274 ) Carrying value of bifurcated conversion option at March 5, 2018 (7,162,587 ) Deemed dividend on Series F Preferred Shares exchange $ 7,057,129 As the Warrants were classified as a liability, the exchange of the Warrants for common shares was recognized as a liability extinguishment. As of March 5, 2018, the fair market value of the 151,871 common shares issued in the Exchange was $3,045,034 and the fair value of the common stock warrant liability was $2,525,567 resulting in a loss on extinguishment of warrant liability of $519,467 during the year ended October 31, 2018. The Company recognized accretion of the discount to the stated value of the Series F Preferred Shares of approximately $1,290,000 during the year ended October 31, 2018, as a reduction of additional paid-in capital and an increase in the carrying value of the Series F Preferred Shares. The accretion is presented in the Statement of Operations as a deemed dividend, increasing net loss to arrive at net loss attributable to common stockholders. Preferred Stock Conversion and Elimination On February 6, 2018, 15,756 shares of Series B Convertible Preferred Stock (“Series B Preferred Shares”) were converted into 262,606 shares of common stock. On March 6, 2018, the Company received conversion notices (in accordance with original terms) from holders of 100% of the outstanding shares of Series A Convertible Preferred Stock (the “Series A Preferred Shares”), Series B Preferred Shares and Series E Convertible Preferred Stock (the “Series E Preferred Shares”) and issued an aggregate of 7,945,250 shares of common stock to such holders. The shares of Series E Preferred Stock were held by Dr. Denver Lough, the Company’s Chief Executive Officer. On March 6, 2018, the Company entered into a new registration rights agreement (the “Lough Registration Rights Agreement”) with Dr. Lough, pursuant to which the Company agreed to file a registration statement to register the resale of 7,050,000 shares of Common Stock issued upon conversion of the Series E Preferred Shares within six months, to cause such registration statement to be declared effective by the Securities and Exchange Commission as promptly as possible following its filing and, with certain exceptions set forth in the Lough Registration Rights Agreement, to maintain the effectiveness of the registration statement until all of such shares have been sold or are otherwise able to be sold pursuant to Rule 144 under the Securities Act without restriction. Any sales of shares under the registration statement were subject to certain limitations as specified with more particularity in the Lough Registration Rights Agreement. In April 2018, Dr. Lough entered into a lock up agreement for 180 days, which prohibited him from selling any shares that may be registered until October 2018. The registration statement was not filed as of December 31, 2018. Dr. Lough has not made a demand for filing a registration statement and the Company does not propose to file a registration statement at the present time. On March 7, 2018, the Company filed a Certificate of Elimination with the Secretary of State of the State of Delaware terminating the Company’s Series A, Series B, Series C, Series D, Series E and Series F Preferred Stock. As a result, the Company has 25,000,000 shares of authorized and unissued preferred stock as of December 31, 2018 with no designation as to series. Convertible preferred stock activity for the year ended October 31, 2018 consisted of the following: Shares Outstanding - October 31, 2017 Preferred Stock Conversions and Series F Exchange – During the Year Ended October 31, 2018 Common Stock Shares Issued – During the Year Ended October 31, 2018 Series A 3,146,671 (3,146,671 ) 713,036 Series B 47,689 (47,689 ) 794,820 Series C 2,578 (2,578 ) 59,950 Series D 26,667 (26,667 ) 44,445 Series E 7,050 (7,050 ) 7,050,000 Series F 6,455 (6,455 ) 972,070 Total 3,237,110 (3,237,110 ) 9,634,321 There was no convertible preferred stock outstanding as of December 31, 2018 and October 31, 2018. Convertible preferred stock as of October 31, 2017 consisted of the following (in thousands, except share amounts): Shares Authorized Shares Issued and Outstanding Net Carrying Value Aggregate Liquidation Preference Common Shares Issuable Upon Conversion Series A 8,830,000 3,146,671 $ 769 $ 2,140 713,245 Series B 54,250 47,689 4,020 – 794,806 Series C 26,000 2,578 201 – 59,953 Series D 170,000 26,667 312 – 44,445 Series E 7,050 7,050 104,693 – 7,050,000 Series F 6,455 6,455 4,541 17,750 645,455 Other authorized, unissued 15,906,245 – – – – Total 25,000,000 3,237,110 $ 114,536 $ 19,890 9,307,904 |
Stock Based Compensation
Stock Based Compensation | 2 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Based Compensation | 12. STOCK-BASED COMPENSATION For the two months ended December 31, 2018 and the fiscal years ended October 31, 2018 and 2017, the Company recorded stock-based compensation expense related to restricted stock awards and stock options as follows (in thousands): For the Two Months Ended December 31, For the Years Ended October 31, 2018 2018 2017 General and administrative expense: Continuing operations $ 7,505 $ 31,982 $ 14,869 Discontinued operations – – 1,118 7,505 31,982 15,987 Research and development expense: Continuing operations 919 6,322 1,758 Sales and marketing expense: Continuing operations 522 517 – Total stock-based compensation expense $ 8,946 $ 38,821 $ 17,745 Stock-based compensation expense classified as a liability $ 38 $ – $ – Stock-based compensation expense classified to equity $ 8,908 $ 38,321 $ 17,745 Incentive Compensation Plans 2019 Plan On October 5, 2018, the Company’s Board of Directors (the “Board”) approved the Company’s 2019 Equity Incentive Plan (the “2019 Plan”). The 2019 Plan provides for the grant of incentive stock options, nonqualified stock options, restricted stock, restricted stock units, stock appreciation rights and other types of stock-based awards to the Company’s employees, officers, directors and consultants. The Compensation Committee of the Board will administer the 2019 Plan, including determining which eligible participants will receive awards, the number of shares of common stock subject to the awards and the terms and conditions of such awards. Up to 3,000,000 shares of common stock are issuable pursuant to awards under the 2019 Plan. Unless earlier terminated by the Board, the 2019 Plan shall terminate at the close of business on October 5, 2028. As of December 31, 2018, the Company had approximately 2,546,584 shares available for future issuances under the 2019 Plan. 2017 Plan On December 1, 2016, the Company’s Board of Directors (the “Board”) approved the Company’s 2017 Equity Incentive Plan (the “2017 Plan”). The purpose of the 2017 Plan is to promote the success of the Company and to increase stockholder value by providing an additional means through the grant of awards to attract, motivate, retain and reward selected employees, consultants and other eligible persons. The 2017 Plan provides for the grant of incentive stock options, nonqualified stock options, restricted stock, restricted stock units, stock appreciation rights and other types of stock-based awards to the Company’s employees, officers, directors and consultants. The Compensation Committee of the Board will administer the 2017 Plan, including determining which eligible participants will receive awards, the number of shares of common stock subject to the awards and the terms and conditions of such awards. Up to 7,300,000 (increased from 3,450,000 in October 2017) shares of common stock are issuable pursuant to awards under the 2017 Plan. Unless earlier terminated by the Board, the 2017 Plan shall terminate at the close of business on December 1, 2026. As of December 31, 2018, the Company had approximately 53,102 shares available for future issuances under the 2017 Plan. 2014 Plan In the fiscal year ended October 31, 2015, the Company adopted the 2014 Plan, an omnibus equity incentive plan administered by the Company’s board of directors, or by one or more committees of directors appointed by the Board, pursuant to which the Company may issue up to 2,250,000 shares of the Company’s common stock under equity-linked awards to certain officers, employees, directors and consultants. The 2014 Plan permits the grant of stock options, including incentive stock options and nonqualified stock options, stock appreciation rights, restricted shares, restricted share units, cash awards, or other awards, whether at a fixed or variable price, upon the passage of time, the occurrence of one or more events, or the satisfaction of performance criteria or other conditions, or any combination thereof. As of December 31, 2018, the Company had approximately 1,927,453 shares available for future issuances under the 2014 Plan. Stock Options Employee stock-option activity for the two months ended December 31, 2018 and the fiscal years ended October 31, 2018 and 2017: Number of shares Weighted-Average Exercise Price Outstanding, October 31, 2016 383,210 $ 5.74 Granted 3,482,000 $ 6.29 Exercised (268,847 ) $ 4.84 Forfeited (70,833 ) $ 6.42 Outstanding - October 31, 2017 3,525,530 $ 6.34 Granted 2,638,769 $ 23.55 Exercised (161,810 ) $ 4.31 Forfeited (217,984 ) $ 21.89 Outstanding - October 31, 2018 5,784,505 $ 13.68 Granted 396,861 $ 14.27 Exercised – $ – Forfeited (938 ) $ 24.20 Outstanding – December 31, 2018 6,180,428 $ 13.72 Options exercisable, December 31, 2018 3,899,806 $ 9.23 Weighted-average grant date fair value of options granted during the two months ended December 31, 2018 $ 9.95 Non-employee stock option activity for the two months ended December 31, 2018 and the fiscal years ended October 31, 2018 and 2017: Number of shares Weighted-Average Exercise Price Outstanding - October 31, 2016 – $ – Granted 293,000 $ 19.61 Forfeited – $ – Outstanding - October 31, 2017 293,000 $ 19.61 Granted 3,000 $ 18.63 Forfeited – $ – Outstanding - October 31, 2018 296,000 $ 19.60 Granted 23,791 $ 21.42 Forfeited (334 ) $ 6.33 Outstanding – December 31, 2018 319,457 $ 19.75 Options exercisable - December 31, 2018 199,207 $ 17.90 Stock options are generally granted to employees or non-employees at exercise prices equal to the fair market value of the Company’s stock of the day prior to the grant. Stock options generally vest over one to three years and have a term of five to ten years. The total fair value of employee options granted during the two months ended December 31, 2018 was approximately $4.0 million. The grant date fair value of non-employee options granted during the two months ended December 31, 2018 was approximately $0.4 million. The intrinsic value of options outstanding at December 31, 2018 was $28.5 million. The weighted average remaining contractual term of outstanding and exercisable options at December 31, 2018 was 8.7 years and 8.2 years, respectively. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model with the following range of assumptions for the two months ended December 31, 2018 and the fiscal years ended October 31, 2018 and 2017: December 31, October 31, 2018 2018 2017 Risk free annual interest rate 2.6%-3.2 % 2.0%-3.2 % 1.6%-2.3 % Expected volatility 80.6%-94.4 % 80.9%-96.5 % 71.7%-86.5 % Expected term of options (years) 5.0-6.5 5.0-6.0 5.0-6.0 Assumed dividends – – – The fair value of employee and non-employee stock option grants is recognized over the vesting period of, generally, one to three years. As of December 31, 2018, there was approximately $21.0 million of unrecognized compensation cost related to non-vested employee and non-employee stock option awards, which is expected to be recognized over a remaining weighted-average vesting period of 0.8 years. Restricted-stock activity for employees and non-employees for the two months ended December 31, 2018 and the fiscal years ended October 31, 2018 and 2017: Number of shares Weighted-Average Grant-Date Unvested, October 31, 2016 274,829 $ 6.00 Granted 1,057,500 $ 4.80 Vested (1,105,197 ) $ 4.47 Unvested - October 31, 2017 227,132 $ 7.83 Granted 712,034 $ 25.27 Vested (242,819 ) $ 11.74 Forfeited (22,387 ) $ 20.62 Unvested - October 31, 2018 673,960 $ 24.52 Granted 63,192 $ 14.17 Vested (1) (86,042 ) $ 24.17 Forfeited – $ – Unvested – December 31, 2018 651,110 $ 23.65 (1) The number of vested restricted stock units includes shares that were withheld on behalf of employees to satisfy the minimum statutory tax withholding requirements. The total fair value of restricted stock vested during the two months ended December 31, 2018 was approximately $2.1 million. The value of restricted stock grants is measured based on the fair market value of the Company’s common stock on the date of grant and recognized over the vesting period of, generally, six months to three years. As of December 31, 2018, there was approximately $10.0 million of unrecognized compensation cost related to unvested restricted stock awards, which is expected to be recognized over a remaining weighted-average vesting period of 0.9 years. |
Employee Benefit Plan
Employee Benefit Plan | 2 Months Ended |
Dec. 31, 2018 | |
Defined Benefit Plan [Abstract] | |
Employee Benefit Plan | 13. EMPLOYEE BENEFIT PLAN The Company’s 401(k) Plan is a deferred salary arrangement under Section 401(k) of the Internal Revenue Code. Under the 401(k) Plan, participating employees (full-time employees with the company for one year) may defer a portion of their pre-tax earnings, up to the IRS annual contribution limit ($18,500 for calendar year 2018). The Company contributes 3% of employee’s eligible earnings. We recorded contribution expense related to our 401(k) Plan of $35,000 for the two months ended December 31, 2018, $120,000 for the fiscal year ended October 31, 2018, and $55,000 for the fiscal year ended October 31, 2017. |
Income Taxes
Income Taxes | 2 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 14. INCOME TAXES The Company calculates its provision for federal and state income taxes based on current tax law. The Tax Cuts and Jobs Act (tax reform) was enacted on December 22, 2017 (“Enactment Date”), and has several key provisions impacting accounting for and reporting of income taxes. The most significant provision reduces the U.S. corporate statutory tax rate from 35% to 21% beginning on January 1, 2018. Although most provisions of tax reform are not effective until 2018, the Company is required to record the effect of a change in tax law as of the Enactment Date on its deferred tax assets. As the Company maintains a full valuation allowance against its deferred tax assets, there is no income tax expense recorded related to this change. In response to the enactment of the Act in late 2017, the U.S. Securities and Exchange Commission issued Staff Accounting Bulletin No. 118 (“SAB 118”) to address situations where the accounting is incomplete for certain income tax effects of the Tax Act upon issuance of an entity’s financial statements for the reporting period in which the Tax Act was enacted. Under SAB 118, a company may record provisional amounts during a measurement period for specific income tax effects of the Tax Act for which the accounting is incomplete but a reasonable estimate can be determined, and when unable to determine a reasonable estimate for any income tax effects, report provisional amounts in the first reporting period in which a reasonable estimate can be determined. While the Company was able to make reasonable estimates of the impact of the tax effects of the Tax Act, the final impact of the Tax Act may differ from those estimates, including, but not limited to changes in our interpretations and assumptions, additional guidance that may be issued by the IRS, return to provision differences and state rate adjustments. As guidance and technical corrections are issued in the upcoming quarters, the Company will record updates to its original provisional estimates. The Company remeasured certain U.S. deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally 21%. The provisional amount recorded related to the remeasurement of the deferred tax balance was tax expense of $2.6 million which was offset by a reduction in the valuation allowance resulting in no tax expense. Loss before income taxes and discontinued operations consisted of (in thousands): For the Two Months Ended December 31, For the Years Ended October 31, 2018 2018 2017 Net loss from continuing operations before income taxes $ (18,418 ) (65,743 ) (130,480 ) The provision (benefit) for income taxes for the years ended December 31, 2018, October 31, 2018, and 2017 consisted of (in thousands): For the Two Months Ended December 31, For the Years Ended October 31, 2018 2018 2017 Current: Federal $ – $ (302 ) $ – State – – – Deferred: Federal (3,734 ) (11,561 ) (2,679 ) State (257 ) (475 ) (304 ) Change in: valuation allowance 3,991 12,036 2,983 Total provision (benefit) for income taxes $ - $ (302 ) $ – The difference between income taxes computed at the statutory federal rate and the provision for income taxes for the years ended December 31, 2018, October 31, 2018, and 2017 related to the following (in thousands, except percentages): For the Two Months Ended December 31, For the Years Ended October 31, 2018 2018 2017 Amount Percent of Pretax Income Amount Percent of Pretax Income Amount Percent of Pretax Income Tax (benefit) at federal statutory rate $ (3,867 ) 21 % $ (22,325 ) 34 % $ (44,283 ) 34 % State income taxes, net of federal income taxes (254 ) 1 % (475 ) (1 )% (304 ) – % Effect of warrant liability – – % (1,120 ) 2 % (74 ) – % Effect of other permanent items 5 – % 30 – % (82 ) – % Effect of Acquisition of intangible assets – – % – – % 35,595 (27 )% Effect of stock compensation 27 – % – – % 3,147 (3 )% Change in valuation allowance 3,991 (22 )% 12,036 (18 )% 2,983 (2 )% Reduction of NOL’s due to Section 382 Limitations - – % 11,552 (17 )% 3,018 (2 )% Other 98 - - - - - $ - – % $ (302 ) – % $ – - % The components of deferred income tax assets (liabilities) were as follows (in thousands): For the Two Months Ended December 31, For the Years Ended October 31, 2018 2018 2017 Impairment of development costs $ – $ 7 $ – Depreciation and amortization (533 ) (546 ) 95 Compensation expense not deductible until options are exercised 12,543 10,529 4,553 All other temporary differences 236 382 248 Net operating loss carry forward 10,526 8,455 3,158 Less valuation allowance (22,772 ) (18,827 ) (8,054 ) Deferred tax asset (liability) $ – $ – $ – Realization of deferred tax assets, including those related to net operating loss carryforwards, are dependent upon future earnings, if any, of which the timing and amount are uncertain. Accordingly, the net deferred tax assets have been fully offset by a valuation allowance. Based upon the Company’s current operating results management cannot conclude that it is more likely than not that such assets will be realized. Due to the Company’s history of losses and uncertainty of future taxable income, a valuation allowance sufficient to fully offset net operating losses and other deferred tax assets has been established. The valuation allowance will be maintained until sufficient positive evidence exists to support a conclusion that a valuation allowance is not necessary. The issuance of the Series E Preferred Stock in connection with its original acquisition of the PolarityTE, Inc., a Nevada corporation in April 2017, will likely result in limitations on the utilization of the Company’s net operating loss carryforwards under IRS section 382. The effect of this is being analyzed now. Utilization of the net operating loss carryforwards may be subject to a substantial annual limitation due to the “change in ownership” provisions of the Internal Revenue Code. The annual limitation may result in the expiration of net operating loss carryforwards before utilization. Due to the change in tax law, all losses post 2018 will have an unlimited carryforward period (but can only utilize 80% max per year). All prior net operating losses still have the same carryforward limit of 20 years. The net operating loss carryforwards available for income tax purposes at December 31, 2018 amounts to approximately $47.3 million and expires between 2038 and 2039 for federal income taxes, and approximately $25.5 million for state income taxes, which primarily expires between 2032 and 2033. The Company files income tax returns in the U.S. and various states As of December 31, 2018, the Company had no unrecognized tax benefits, which would impact its tax rate if recognized. As of October 31, 2018, the Company had no accrual for the potential payment of penalties. As of December 31, 2018, the Company was not subject to any U.S. federal, and state tax examinations. The Company’s U.S. federal tax returns have been examined for tax years through 2011 with the results of such examinations being reflected in the Company’s results of operations as of October 31, 2013. The Company does not anticipate any significant changes in its unrecognized tax benefits over the next 12 months. |
Loss Per Share
Loss Per Share | 2 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Loss Per Share | 15. LOSS PER SHARE The following outstanding potentially dilutive shares have been excluded from the calculation of diluted net loss per share for the periods presented due to their anti-dilutive effect: December 31, October 31, 2018 2018 2017 Shares issuable upon conversion of preferred stock – – 9,307,904 Shares issuable upon exercise of warrants – – 322,727 Shares issuable upon exercise of stock options 6,499,885 6,080,505 3,818,530 Non-vested shares under restricted stock grants 651,110 673,960 227,132 |
Commitments and Contingencies
Commitments and Contingencies | 2 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 16. COMMITMENTS AND CONTINGENCIES Contingencies On June 26, 2018, a class action complaint alleging violations of the Federal securities laws was filed in the United States District Court, District of Utah, by Jose Moreno against the Company and two directors of the Company, Case No. 2:18-cv-00510-JNP (the “Moreno Complaint”). On July 6, 2018, a similar complaint was filed in the same court against the same defendants by Yedid Lawi, Case No. 2:18-cv-00541-PMW (the “Lawi Complaint”). Both the Moreno Complaint and Lawi Complaint allege that the defendants made or were responsible for, disseminating information to the public through reports filed with the Securities and Exchange Commission and other channels that contained material misstatements or omissions in violation of Sections 10 and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 adopted thereunder. Specifically, both complaints allege that the defendants misrepresented the status of one of the Company’s patent applications while touting the unique nature of the Company’s technology and its effectiveness. Plaintiffs are seeking damages suffered by them and the class consisting of the persons who acquired the publicly-traded securities of the Company between March 31, 2017, and June 22, 2018. Plaintiffs have filed motions to consolidate and for appointment as lead plaintiff. On November 28, 2018, the Court consolidated the Moreno Lawi In re PolarityTE, Inc. Securities Litigation Lawi In November 2018, a shareholder derivative lawsuit was filed in the United States District Court, District of Utah, with the caption Monther v. Lough, et al On February 26, 2015, a complaint for patent infringement was filed in the United States District Court for the Eastern District of Texas by Richard Baker, an individual residing in Australia, against Microsoft, Nintendo, a former subsidiary of the Company, and a number of other game publisher defendants. The complaint alleged that the Zumba Fitness Kinect game infringed plaintiff’s patents in motion tracking technology. The plaintiff represented himself pro se in the litigation and sought monetary damages in the amount of $1.3 million. The case was subsequently transferred to the Western District of Washington. On June 16, 2017, final judgment was entered in favor of the defendants finding that the accused products did not literally infringe the asserted patent and that plaintiff was barred from pursing infringement under the doctrine of equivalents due to prosecution history estoppel. The plaintiff appealed that decision to the Court of Appeals for the Federal Circuit. On April 9, 2018, the Court of Appeals for the Federal Circuit affirmed the judgment of the District Court for the Western District of Washington. On May 7, 2018, the plaintiff filed a petition for panel rehearing and rehearing en banc by the Court of Appeals. The petition for rehearing was denied on June 8, 2018. The plaintiff subsequently filed a petition for a writ of certiorari with the Supreme Court of the United States, which was denied in November 2018. Consequently, this matter has been finally resolved without liability to the Company. In the ordinary course of business, we may become involved in lawsuits, claims, investigations, proceedings, and threats of litigation relating to intellectual property, commercial arrangements, regulatory compliance, and other matters. Except as noted above, at December 31, 2018, we were not party to any legal or arbitration proceedings that may have significant effects on our financial position or results of operations. No governmental proceedings are pending or, to our knowledge, contemplated against us. We are not a party to any material proceedings in which any director, member of senior management or affiliate of ours is either a party adverse to us or our subsidiaries or has a material interest adverse to us or our subsidiaries. Commitments The Company leases facilities and certain equipment under noncancelable leases that expire at various dates through November 2022. Leases are classified as capital leases when the terms of the lease transfer substantially all the risk and rewards of ownership to the lease. Other leases are classified as operating leases. Property and equipment under capital leases are initially recorded at the lower of asset fair value or the present value of the minimum lease payments on the consolidated balance sheet. The corresponding liability to the lessor is included in the balance sheet as a capital lease obligation. Lease payments under capital leases are treated as debt-service payments and recognized as a reduction of the capital lease obligation and an increase in interest expense. During November 2018, the Company entered into a capital lease agreement for laboratory equipment. The lease commencement date is January 1, 2019, at which time the Company will gain control of the asset. During the two months ended December 31, 2018, the Company made payments towards the lease of $535,000. The payments are recorded on the balance sheet in other assets and will be reclassified as a lease asset to property and equipment at the time the lease commences. The following schedule summarizes the future minimum lease payments for operating and capital leases at December 31, 2018 ( in thousands Operating leases Capital leases Year ended December 31, 2019 $ 1,895 $ 66 Year ended December 31, 2020 1,819 58 Year ended December 31, 2021 1,455 55 Year ended December 31, 2022 1,216 28 $ 6,385 $ 207 Rent expense for the two months ended December 31, 2018, and the fiscal years ended October 31, 2018 and 2017 was $357,000, $1.4 million and $222,000, respectively. The Company has entered into employment agreements with key executives that contain severance terms and change of control provisions. |
Certain Relationships and Relat
Certain Relationships and Related Transactions | 2 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
Certain Relationships and Related Transactions | 17. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS In October 2018, the Company entered into an office lease covering approximately 7,250 square feet of rental space in the building located at 40 West 57 th Initially, the Company is using three offices and two work stations in the office and share common areas representing approximately 2,055 square feet. Cohen LLC is using approximately 1,220 square feet. The monthly lease payment for 3,275 square feet is $16,377. Of this amount $6,103 is allocated pro rata to Cohen LLC based on square footage occupied. Additional lease charges for operating expenses and taxes are allocated under the sublease based on the ratio of rent paid by the Company and Cohen LLC to total rent. Cohen LLC identified two associated entities that may wish to occupy an additional 2,753 square feet of space in the office. Under the terms of the sublease Cohen LLC can add this additional space to the 1,220 square feet occupied, which would bring the total space occupied by us and Cohen LLC to 6,028 square feet. Because a portion of the additional space subleased to Cohen LLC is less private and attractive, the Company agreed to reduce the overall annual lease rate for the Cohen LLC space to $58.60 per square foot, which means the Company will be paying an annual lease rate for the space the Company uses of $62.70. Assuming Cohen LLC subleases the additional office space, our annual lease payment to the lessor would be $361,680, and Cohen LLC would pay to the Company $232,830 under the sublease. During the two months ended December 31, 2018, the Company recognized $21,000 of sublease income related to this agreement. As of December 31, 2018, there were no amounts due from the related party. In August 2018 David Seaburg was elected by the Board of Directors to serve as a director of the Company. Subsequently the Company entered into a written consulting agreement with Mr. Seaburg pursuant to which he will provide investor relations and other services to the Company over a period of two years for a fee consisting of (i) quarter-annual cash payment of $10,000, (ii) 60,000 restricted stock units issued under the Company equity incentive plan that vest in four equal installments every six months during the term of the agreement subject to continued service, and (iii) an annual award under the Company equity incentive plan of options exercisable over a term of 10 years to purchase common stock in number equal to the number of shares of common stock with a value of $150,000 at the time of the award based on a Black-Scholes calculation. During the two months ended December 31, 2018, the Company made no payments to Mr. Seaburg for consulting services. The total value of Mr. Seaburg’s agreement is approximately $1.7 million, which will be recognized as expense over the 24-month consulting period. Under this agreement, the Company recognized approximately $233,000 of expense during the two months ended December 31, 2018 and $324,000 of expense during the fiscal year ended October 31, 2018. The agreement terminated effective March 11, 2019, when he joined the Company as President of Corporate Development. |
Discontinued Operations
Discontinued Operations | 2 Months Ended |
Dec. 31, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | 18. DISCONTINUED OPERATIONS On June 23, 2017, the Company sold Majesco Entertainment Company, a Nevada corporation and wholly-owned subsidiary of the Company (“Majesco Sub”) to Zift Interactive LLC (“Zift”), a Nevada limited liability company pursuant to a purchase agreement. The results of operations from the discontinued business for the two months ended December 31, 2018 and the fiscal years ended October 31, 2018 and 2017 are as follows (in thousands): For the Two Months Ended December 31, For the Years Ended October 31, 2018 2018 2017 Revenues $ – $ – $ 558 Expenses – – 1,007 Loss from discontinued operations $ – $ – $ (449 ) Gain on sale of discontinued operations $ – $ – $ 100 The cash flows from the discontinued business for the two months ended December 31, 2018 and the fiscal years ended October 31, 2018 and 2017 are as follows (in thousands): For the Two Months Ended December 31, For the Years Ended October 31, 2018 2018 2017 CASH FLOWS FROM OPERATING ACTIVITIES Net loss from discontinued operations $ – $ – $ (349 ) Adjustments to reconcile net loss from discontinued operations to net cash used in discontinued operating activities: Depreciation and amortization – – 11 Stock based compensation expense – – 1,118 Amortization of capitalized software development costs and license fees – – 50 Gain on sale of Majesco Sub – – (100 ) Changes in operating assets and liabilities: Accounts receivable – – 113 Accounts payable and accrued expenses – – (810 ) Net cash provided by discontinued operating activities $ – $ – $ 33 CASH FLOWS FROM INVESTING ACTIVITIES Cash received from sale of Majesco Sub $ 10 $ 60 $ 25 Net cash provided by discontinued investing activities $ 10 $ 60 $ 25 |
Segment Reporting
Segment Reporting | 2 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment Reporting | 19. SEGMENT REPORTING The Company’s operations involve products and services which are managed separately. Accordingly, it operates in two segments: 1) regenerative medicine and 2) contract services. Certain information concerning our segments for the two months ended December 31, 2018 and the fiscal years ended October 31, 2018 and 2017 is presented in the following table (in thousands): For the Two Months Ended December 31, For the Years Ended October 31, 2018 2018 2017 Net revenues: Reportable segments: Regenerative medicine $ 210 $ 689 $ – Contract services 463 874 – Total net revenues $ 673 $ 1,563 $ – Net loss: Reportable segments: Regenerative medicine $ (18,352 ) $ (65,219 ) $ (130,480 ) Contract services (66 ) (222 ) – Discontinued operations – – (349 ) Total net loss $ (18,418 ) $ (65,441 ) $ (130,829 ) As of December 31, 2018 As of October 31, 2018 As of October 31, 2017 Identifiable assets employed: Reportable segments: Regenerative medicine $ 74,795 $ 82,512 $ 20,152 Contract services 5,371 5,330 – Discontinued operations – – – Total assets $ 80,166 $ 87,842 $ 20,152 |
Transition Period Comparative F
Transition Period Comparative Financials (Unaudited) | 2 Months Ended |
Dec. 31, 2018 | |
Transition Period Comparative Financials | |
Transition Period Comparative Financials (Unaudited) | 20. TRANSITION PERIOD COMPARATIVE FINANCIALS (UNAUDITED) Consolidated statements of operations for the two months ended December 31, 2017 is as follows: For the Two Months Ended December 31, 2017 (Unaudited) Net revenues $ 13 Cost of sales 1 Gross profit 12 Operating costs and expenses Product research and development 4,930 General and administrative 7,979 Total operating costs and expenses 12,909 Operating loss (12,897 ) Other income (expense) Interest income 18 Change in fair value of derivatives 1,964 Net loss (10,915 ) Deemed dividend – accretion of discount on Series F preferred stock (593 ) Deemed dividend – exchange of Series F preferred stock (182 ) Net loss attributable to common stockholders $ (11,690 ) Net loss per share, basic and diluted: Net loss $ (1.68 ) Deemed dividend – accretion of discount on Series F preferred stock (0.09 ) Deemed dividend – exchange of Series F preferred stock (0.03 ) Net loss attributable to common stockholders $ (1.80 ) Weighted average shares outstanding, basic and diluted: 6,496,841 |
Subsequent Events
Subsequent Events | 2 Months Ended |
Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | 21. SUBSEQUENT EVENTS On March 1, 2019, the Company was informed it is the subject of an SEC investigation, and it is unable to make any prediction regarding the outcome of the investigation at this time. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 2 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation. |
Segments | Segments. |
Use of Estimates | Use of estimates. |
Reclassifications | Reclassifications. |
Cash and Cash Equivalents | Cash and cash equivalents. |
Investments | Investments |
Accounts Receivable | Accounts Receivable. |
Accounts Payable and Accrued Expenses | Accounts Payable and Accrued Expenses. |
Inventory | Inventory. |
Property and Equipment | Property and Equipment. |
Capitalized Software | Capitalized Software. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets. The fair value of reporting units is based on widely accepted valuation techniques that the Company believes market participants would use, although the valuation process requires significant judgment and often involves the use of significant estimates and assumptions. We performed a qualitative assessment and concluded that it is more likely than not that the fair value of the reporting unit is more than its carrying value. Accordingly, there was no indication of impairment, and further quantitative testing was not required. Adverse market or economic events could result in impairment charges in future periods. Intangible assets deemed to have finite lives are amortized on a straight-line basis over their estimated useful lives, which generally range from one to eleven years. The useful life is the period over which the asset is expected to contribute directly, or indirectly, to its future cash flows. Intangible assets are reviewed for impairment when certain events or circumstances exist. For amortizable intangible assets, impairment exists when the undiscounted cash flows exceed its carrying value. At least annually, the remaining useful life is evaluated. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets. |
Income Taxes | Income Taxes. |
Stock Based Compensation | Stock-Based Compensation. The fair value for options issued is estimated at the date of grant using a Black-Scholes option-pricing model. The risk-free rate is derived from the U.S. Treasury yield curve in effect at the time of the grant. The volatility factor is determined based on the Company’s historical stock prices. Forfeitures are recognized as they occur. The value of restricted stock grants is measured based on the fair market value of the Company’s common stock on the date of grant and amortized over the vesting period of, generally, six months to three years. The accounting for non-employee options and restricted stock is similar to that of employees, however, unlike employee options and restricted stock, the measurement date is not the grant date. The measurement date is when performance is complete. Until the options or shares vest, they are re-measured (re-valued) each reporting period and the expense marked up or marked down accordingly. |
Loss Per Share | Loss Per Share. Since the Company was in a loss position for all periods presented, basic net loss per share is the same as diluted net loss per share since the effects of potentially dilutive securities are antidilutive. |
Commitments and Contingencies | Commitments and Contingencies. |
Accounting for Warrants | Accounting for Warrants |
Change in Fair Value of Derivatives | Change in Fair Value of Derivatives. |
Revenue Recognition | Revenue Recognition. Revenue from Contracts with Customers Revenue Recognition Under ASC 605, regenerative medicine revenue is recognized upon the shipment of products or the performance of services when each of the following four criteria is met: (i) persuasive evidence of an arrangement exists; (ii) products are delivered or services are performed; (iii) the sales price is fixed or determinable; and (iv) collectability is reasonably assured. In the contract services segment, revenue is recognized on the proportional performance method over the term of the respective service contract which requires us to make reasonable estimates of the extent of progress toward completion of the contract. Under this method, revenue is recognized according to the percentage of cost completed for the study. As a result, unbilled receivables and deferred revenue are recognized based on payment timing and work completed. Under ASC 606, revenue is recognized when a customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. In the regenerative medicine products segment, the Company records product revenues primarily from the sale of its regenerative tissue products. The Company sells its products to healthcare providers, primarily through direct sales representatives. Product revenues consists of a single performance obligation that the Company satisfies at a point in time. In general, the Company recognizes product revenue upon delivery to the customer. In the contract services segment, the Company records service revenues from the sale of its contract research services, which includes delivery of preclinical studies and other research services to unrelated third parties. Service revenues generally consist of a single performance obligation that the Company satisfies over time using an input method based on costs incurred to date relative to the total costs expected to be required to satisfy the performance obligation. The Company believes that this method provides a faithful depiction of the transfer of services over the term of the performance obligation based on the remaining services needed to satisfy the obligation. This requires the Company to make reasonable estimates of the extent of progress toward completion of the contract. As a result, unbilled receivables and deferred revenue are recognized based on payment timing and work completed. Generally, a portion of the payment is due upfront and the remainder upon completion of the study, with most studies completing in less than a year. As of December 31, 2018, October 31, 2018 and 2017, the Company had unbilled receivables of $157,000, $160,000 and $0 and deferred revenue of $170,000, $150,000 and $0. The unbilled receivables balance is included in consolidated accounts receivable. Revenue of $83,000 was recognized during the two months ended December 31, 2018 that was included in the deferred revenue balance as of October 31, 2018. Costs to obtain the contract are incurred for product revenue as they are shipped and are expensed as incurred. The Company considers a significant customer to be one that comprises more than 10% of net revenues or accounts receivable. Concentration of revenues were as follows for the two months ended December 31, 2018 and the fiscal year ended October 31, 2018: Two Months Ended December 31, 2018 Year Ended October 31, 2018 Segment % of Revenue % of Revenue Customer A Contract Services 32 % 19 % Customer B Regenerative Medicine 17 % * Customer C Contract Services 11 % * Concentration of accounts receivable were as follows as of December 31, 2018: As of December 31, 2018 Segment % of Accounts Receivable Customer A Contract services 23 % Customer B Regenerative medicine 20 % Customer D Regenerative medicine 14 % *The amount did not exceed 10% |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In February 2016, FASB issued ASU No. 2016-02, Leases (Topic 842), Leases (Topic 840) In July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842): Targeted Improvements The Company expects that this standard will have a material effect on the financial statements upon adoption. The most significant effects will primarily relate to (a) the recognition of ROU assets and lease liabilities on the balance sheet, which upon adoption will range from $5.2 million to $5.6 million in relation to its existing operating lease agreements for the office and laboratory spaces in Salt Lake City, Utah; and (b) providing significant new disclosures about leasing activities. In June 2018, the FASB issued ASU 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-based Payment Accounting In August 2018, the FASB issued ASU 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40) In November 2018, the FASB issued ASU No. 2018-18, Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606 |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows - Classification of Certain Cash Receipts and Cash Payments The adoption of this ASU on November 1, 2018 has not had a material impact on the Company’s consolidated financial statements and related disclosures. In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting. The adoption of this ASU on November 1, 2018 has not had a material impact on the Company’s consolidated financial statements and related disclosures. In January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment. had no impact on the Company’s consolidated financial statements and related disclosures. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 2 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of Concentration Risk | The Company considers a significant customer to be one that comprises more than 10% of net revenues or accounts receivable. Concentration of revenues were as follows for the two months ended December 31, 2018 and the fiscal year ended October 31, 2018: Two Months Ended December 31, 2018 Year Ended October 31, 2018 Segment % of Revenue % of Revenue Customer A Contract Services 32 % 19 % Customer B Regenerative Medicine 17 % * Customer C Contract Services 11 % * Concentration of accounts receivable were as follows as of December 31, 2018: As of December 31, 2018 Segment % of Accounts Receivable Customer A Contract services 23 % Customer B Regenerative medicine 20 % Customer D Regenerative medicine 14 % *The amount did not exceed 10% |
IBEX Acquisition (Tables)
IBEX Acquisition (Tables) | 2 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Schedule of Purchase Price Allocation | The following table summarizes the purchase price allocation for the IBEX acquisition (in thousands): Equipment $ 430 Land and buildings 2,000 Intangible assets 1,057 Goodwill 278 Accrued property taxes (9 ) Aggregate purchase price $ 3,756 Less: Promissory note to seller 1,220 Contingent consideration 278 Cash paid at closing $ 2,258 |
Schedule of Identifiable Intangible Assets | The following table shows the valuation of the individual identifiable intangible assets acquired along with their estimated remaining useful lives as of the acquisition date (in thousands): Approximate Fair Value Remaining Useful Life (in years) Non-compete agreement $ 410 4 Customer contracts and relationships 534 7 to 8 Trade names and trademarks 101 10 to 11 Backlog 12 Less than 1 Total intangible assets $ 1,057 |
Fair Value (Tables)
Fair Value (Tables) | 2 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value Assumptions of Warrants and Embedded Conversion Feature | The fair value of the bifurcated embedded conversion feature was estimated to be approximately $7.2 million and $9.3 million, respectively, at March 5, 2018 and October 31, 2017 as calculated using the Monte Carlo simulation with the following assumptions: Series F Conversion Feature March 5, 2018 October 31, 2017 Stock price $ 20.05 $ 25.87 Exercise price $ 27.50 $ 27.50 Risk-free rate 2.2 % 1.6 % Volatility 88.2 % 96.0 % Term 1.5 1.9 The fair value of the warrant liability was estimated to be approximately $2.5 million and $4.3 million, respectively, at March 5, 2018 and October 31, 2017 as calculated using the Monte Carlo simulation with the following assumptions: Warrant Liability March 5, 2018 October 31, 2017 Stock price $ 20.05 $ 25.87 Exercise price $ 30.00 $ 30.00 Risk-free rate 2.2 % 1.6 % Volatility 88.2 % 96.0 % Term 1.5 1.9 |
Schedule of Fair Value of Financial Instruments Measured on Recurring Basis | The following table sets forth the fair value of the Company’s financial assets and liabilities measured on a recurring basis by level within the fair value hierarchy as of December 31, 2018, October 31, 2018 and 2017 (in thousands): Fair Value Measurement as of December 31, 2018 Level 1 Level 2 Level 3 Total Assets: Money market funds $ 7 $ – $ – $ 7 Commercial paper – 21,392 – 21,392 Corporate debt securities – 5,448 – 5,448 U.S. government debt securities – 3,226 – 3,226 Total $ 7 $ 30,066 $ – $ 30,073 Liabilities: Contingent consideration $ – $ – $ 261 $ 261 Total $ – $ – $ 261 $ 261 Fair Value Measurement as of October 31, 2018 Level 1 Level 2 Level 3 Total Assets: Money market funds $ 69,659 $ – $ – $ 69,659 Total $ 69,659 $ – $ – $ 69,659 Liabilities: Contingent consideration $ – $ – $ 235 $ 235 Total $ – $ – $ 235 $ 235 Fair Value Measurement as of October 31, 2017 Level 1 Level 2 Level 3 Total Assets: Money market funds $ 17,322 $ – $ – $ 17,322 Total $ 17,322 $ – $ – $ 17,322 Liabilities: Warrant liability $ – $ – $ 4,256 $ 4,256 Derivative liability – – 9,246 9,246 Total $ – $ – $ 13,502 $ 13,502 |
Schedule of Changes in Estimated Fair Value for Level 3 Classified Contingent Consideration | The following table sets forth the changes in the estimated fair value of our contingent consideration liability (in thousands) which is included in other current liabilities: Contingent Consideration Fair value – October 31, 2017 $ – IBEX acquisition – May 3, 2018 278 Change in fair value 20 Earned and paid in cash (30 ) Earned and moved to accounts payable (33 ) Fair value - October 31, 2018 $ 235 Change in fair value 57 Earned and moved to accounts payable (31 ) Fair value – December 31, 2018 $ 261 |
Cash Equivalents and Availabl_2
Cash Equivalents and Available-for-Sale Marketable Securities (Tables) | 2 Months Ended |
Dec. 31, 2018 | |
Cash and Cash Equivalents [Abstract] | |
Schedule of Cash Equivalents and Available-for-sale Marketable Securities | Cash equivalents and available-for-sale marketable securities consisted of the following as of December 31, 2018 (in thousands): December 31, 2018 Amortized Cost Unrealized Gains Unrealized Losses Market Value Cash equivalents: Money market funds $ 7 $ – $ – $ 7 Commercial paper 20,648 30 – 20,678 U.S. government debt securities 3,224 2 – 3,226 Total cash equivalents 23,879 32 – 23,911 Short-term investments: Commercial paper 714 – – 714 Corporate debt securities 5,444 5 (1 ) 5,448 Total short-term investments 6,158 5 (1 ) 6,162 Total $ 30,037 $ 37 $ (1 ) $ 30,073 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 2 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment, Net | The following table presents the components of property and equipment, net (in thousands): December 31, 2018 October 31, 2018 October 31, 2017 Machinery and equipment $ 8,276 $ 8,134 $ 2,418 Land and buildings 2,000 2,000 – Computers and software 1,372 1,337 211 Leasehold improvements 1,230 1,137 – Construction in progress 2,402 1,587 – Furniture and equipment 614 566 30 Total property and equipment, gross 15,894 14,761 2,659 Accumulated depreciation (2,158 ) (1,834 ) (486 ) Total property and equipment, net $ 13,736 $ 12,927 $ 2,173 |
Schedule of Depreciation Expense | Depreciation and amortization expense for property and equipment, including assets acquired under capital leases for the two months ended December 31, 2018 and for the fiscal years ended October 31, 2018 and 2017 is as follows (in thousands): For the Two Months ended December 31, For the Years Ended October 31, 2018 2018 2017 General and administrative expense: Continuing operations $ 155 $ 223 $ 1 Discontinued operations – – 11 155 223 12 Research and development expense: Continuing operations 175 1,171 431 Total depreciation and amortization expense $ 330 $ 1,394 $ 443 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 2 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | Intangible assets, net, consist of the following (in thousands): December 31, 2018 October 31, 2018 October 31, 2017 Non-compete agreement $ 410 $ 410 $ – Customer contracts and relationships 534 534 – Trade names and trademarks 101 101 – Backlog 12 12 – Total intangible assets, gross 1,057 1,057 – Accumulated amortization (133 ) (100 ) – Total intangible assets, net $ 924 $ 957 $ – |
Schedule of Future Amortization of Intangible Assets | The future amortization of these intangible assets is expected to be as follows (in thousands): Year ended December 31, 2019 $ 193 Year ended December 31, 2020 189 Year ended December 31, 2021 189 Year ended December 31, 2022 121 Year ended December 31, 2023 87 Thereafter 145 $ 924 |
Schedule of Carrying Amount of Goodwill | There were no changes in the carrying amount of goodwill for the two months ended December 31, 2018. The changes in the carrying amount of goodwill for fiscal year ended October 31, 2018 is as follows (in thousands): Regenerative Medicine Contract Services Total October 31, 2017 $ – $ – $ – Additions due to acquisitions (1) – 278 278 October 31, 2018 – 278 278 December 31, 2018 $ – $ 278 $ 278 (1) On May 3, 2018, the Company acquired the preclinical research and contract services business and related real estate from IBEX L.L.C. |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Expenses (Tables) | 2 Months Ended |
Dec. 31, 2018 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Expenses | The following table presents the major components of accounts payable and accrued expenses (in thousands): December 31, 2018 October 31, 2018 October 31, 2017 Accounts payable $ 2,918 $ 2,007 $ 441 Salaries and other compensation 1,280 933 574 Other accruals 1,670 792 369 Legal and accounting 640 631 555 Total accounts payable and accrued expenses $ 6,508 $ 4,363 $ 1,939 |
Preferred Shares and Common S_2
Preferred Shares and Common Shares (Tables) | 2 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Schedule of Deemed Dividend on Preferred Shares Exchange | The exchange of all outstanding Series F Preferred Shares, and the holders’ right to receive 6% dividends, for common stock of the Company was recognized as follows: Fair market value of 1,003,393 shares of common stock issued at $20.05 (Company’s closing stock price on March 5, 2018) in exchange for Series F Preferred Shares and accrued dividends $ 20,117,990 Carrying value of Series F Preferred Shares at March 5, 2018, including dividends (5,898,274 ) Carrying value of bifurcated conversion option at March 5, 2018 (7,162,587 ) Deemed dividend on Series F Preferred Shares exchange $ 7,057,129 |
Schedule of Convertible Preferred Stock Activity | Convertible preferred stock activity for the year ended October 31, 2018 consisted of the following: Shares Outstanding - October 31, 2017 Preferred Stock Conversions and Series F Exchange – During the Year Ended October 31, 2018 Common Stock Shares Issued – During the Year Ended October 31, 2018 Series A 3,146,671 (3,146,671 ) 713,036 Series B 47,689 (47,689 ) 794,820 Series C 2,578 (2,578 ) 59,950 Series D 26,667 (26,667 ) 44,445 Series E 7,050 (7,050 ) 7,050,000 Series F 6,455 (6,455 ) 972,070 Total 3,237,110 (3,237,110 ) 9,634,321 |
Schedule of Convertible Preferred Stock Outstanding | There was no convertible preferred stock outstanding as of December 31, 2018 and October 31, 2018. Convertible preferred stock as of October 31, 2017 consisted of the following (in thousands, except share amounts): Shares Authorized Shares Issued and Outstanding Net Carrying Value Aggregate Liquidation Preference Common Shares Issuable Upon Conversion Series A 8,830,000 3,146,671 $ 769 $ 2,140 713,245 Series B 54,250 47,689 4,020 – 794,806 Series C 26,000 2,578 201 – 59,953 Series D 170,000 26,667 312 – 44,445 Series E 7,050 7,050 104,693 – 7,050,000 Series F 6,455 6,455 4,541 17,750 645,455 Other authorized, unissued 15,906,245 – – – – Total 25,000,000 3,237,110 $ 114,536 $ 19,890 9,307,904 |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 2 Months Ended |
Dec. 31, 2018 | |
Schedule of Share-based Compensation Related to Restricted Stock Awards and Stock Options | For the two months ended December 31, 2018 and the fiscal years ended October 31, 2018 and 2017, the Company recorded stock-based compensation expense related to restricted stock awards and stock options as follows (in thousands): For the Two Months Ended December 31, For the Years Ended October 31, 2018 2018 2017 General and administrative expense: Continuing operations $ 7,505 $ 31,982 $ 14,869 Discontinued operations – – 1,118 7,505 31,982 15,987 Research and development expense: Continuing operations 919 6,322 1,758 Sales and marketing expense: Continuing operations 522 517 – Total stock-based compensation expense $ 8,946 $ 38,821 $ 17,745 Stock-based compensation expense classified as a liability $ 38 $ – $ – Stock-based compensation expense classified to equity $ 8,908 $ 38,321 $ 17,745 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model with the following range of assumptions for the two months ended December 31, 2018 and the fiscal years ended October 31, 2018 and 2017: December 31, October 31, 2018 2018 2017 Risk free annual interest rate 2.6%-3.2 % 2.0%-3.2 % 1.6%-2.3 % Expected volatility 80.6%-94.4 % 80.9%-96.5 % 71.7%-86.5 % Expected term of options (years) 5.0-6.5 5.0-6.0 5.0-6.0 Assumed dividends – – – |
Schedule of Share-based Compensation, Restricted Stock Activity | Restricted-stock activity for employees and non-employees for the two months ended December 31, 2018 and the fiscal years ended October 31, 2018 and 2017: Number of shares Weighted-Average Grant-Date Unvested, October 31, 2016 274,829 $ 6.00 Granted 1,057,500 $ 4.80 Vested (1,105,197 ) $ 4.47 Unvested - October 31, 2017 227,132 $ 7.83 Granted 712,034 $ 25.27 Vested (242,819 ) $ 11.74 Forfeited (22,387 ) $ 20.62 Unvested - October 31, 2018 673,960 $ 24.52 Granted 63,192 $ 14.17 Vested (1) (86,042 ) $ 24.17 Forfeited – $ – Unvested – December 31, 2018 651,110 $ 23.65 (1) The number of vested restricted stock units includes shares that were withheld on behalf of employees to satisfy the minimum statutory tax withholding requirements. |
Employee Stock Option [Member] | |
Schedule of Share-based Compensation, Stock Options, Activity | Employee stock-option activity for the two months ended December 31, 2018 and the fiscal years ended October 31, 2018 and 2017: Number of shares Weighted-Average Exercise Price Outstanding, October 31, 2016 383,210 $ 5.74 Granted 3,482,000 $ 6.29 Exercised (268,847 ) $ 4.84 Forfeited (70,833 ) $ 6.42 Outstanding - October 31, 2017 3,525,530 $ 6.34 Granted 2,638,769 $ 23.55 Exercised (161,810 ) $ 4.31 Forfeited (217,984 ) $ 21.89 Outstanding - October 31, 2018 5,784,505 $ 13.68 Granted 396,861 $ 14.27 Exercised – $ – Forfeited (938 ) $ 24.20 Outstanding – December 31, 2018 6,180,428 $ 13.72 Options exercisable, December 31, 2018 3,899,806 $ 9.23 Weighted-average grant date fair value of options granted during the two months ended December 31, 2018 $ 9.95 |
Non-Employee Stock Option [Member] | |
Schedule of Share-based Compensation, Stock Options, Activity | Non-employee stock option activity for the two months ended December 31, 2018 and the fiscal years ended October 31, 2018 and 2017: Number of shares Weighted-Average Exercise Price Outstanding - October 31, 2016 – $ – Granted 293,000 $ 19.61 Forfeited – $ – Outstanding - October 31, 2017 293,000 $ 19.61 Granted 3,000 $ 18.63 Forfeited – $ – Outstanding - October 31, 2018 296,000 $ 19.60 Granted 23,791 $ 21.42 Forfeited (334 ) $ 6.33 Outstanding – December 31, 2018 319,457 $ 19.75 Options exercisable - December 31, 2018 199,207 $ 17.90 |
Income Taxes (Tables)
Income Taxes (Tables) | 2 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Loss Before Income Taxes | Loss before income taxes and discontinued operations consisted of (in thousands): For the Two Months Ended December 31, For the Years Ended October 31, 2018 2018 2017 Net loss from continuing operations before income taxes $ (18,418 ) (65,743 ) (130,480 ) |
Schedule of Components of Income Tax Expense (Benefit) | The provision (benefit) for income taxes for the years ended December 31, 2018, October 31, 2018, and 2017 consisted of (in thousands): For the Two Months Ended December 31, For the Years Ended October 31, 2018 2018 2017 Current: Federal $ – $ (302 ) $ – State – – – Deferred: Federal (3,734 ) (11,561 ) (2,679 ) State (257 ) (475 ) (304 ) Change in: valuation allowance 3,991 12,036 2,983 Total provision (benefit) for income taxes $ - $ (302 ) $ – |
Schedule of Statutory Federal Rate and Provision for Income Tax | The difference between income taxes computed at the statutory federal rate and the provision for income taxes for the years ended December 31, 2018, October 31, 2018, and 2017 related to the following (in thousands, except percentages): For the Two Months Ended December 31, For the Years Ended October 31, 2018 2018 2017 Amount Percent of Pretax Income Amount Percent of Pretax Income Amount Percent of Pretax Income Tax (benefit) at federal statutory rate $ (3,867 ) 21 % $ (22,325 ) 34 % $ (44,283 ) 34 % State income taxes, net of federal income taxes (254 ) 1 % (475 ) (1 )% (304 ) – % Effect of warrant liability – – % (1,120 ) 2 % (74 ) – % Effect of other permanent items 5 – % 30 – % (82 ) – % Effect of Acquisition of intangible assets – – % – – % 35,595 (27 )% Effect of stock compensation 27 – % – – % 3,147 (3 )% Change in valuation allowance 3,991 (22 )% 12,036 (18 )% 2,983 (2 )% Reduction of NOL’s due to Section 382 Limitations - – % 11,552 (17 )% 3,018 (2 )% Other 98 - - - - - $ - – % $ (302 ) – % $ – - % |
Schedule of Deferred Tax Assets and Liabilities | The components of deferred income tax assets (liabilities) were as follows (in thousands): For the Two Months Ended December 31, For the Years Ended October 31, 2018 2018 2017 Impairment of development costs $ – $ 7 $ – Depreciation and amortization (533 ) (546 ) 95 Compensation expense not deductible until options are exercised 12,543 10,529 4,553 All other temporary differences 236 382 248 Net operating loss carry forward 10,526 8,455 3,158 Less valuation allowance (22,772 ) (18,827 ) (8,054 ) Deferred tax asset (liability) $ – $ – $ – |
Loss Per Share (Tables)
Loss Per Share (Tables) | 2 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Anti-dilutive Potential Shares Outstanding Activity | The following outstanding potentially dilutive shares have been excluded from the calculation of diluted net loss per share for the periods presented due to their anti-dilutive effect: December 31, October 31, 2018 2018 2017 Shares issuable upon conversion of preferred stock – – 9,307,904 Shares issuable upon exercise of warrants – – 322,727 Shares issuable upon exercise of stock options 6,499,885 6,080,505 3,818,530 Non-vested shares under restricted stock grants 651,110 673,960 227,132 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 2 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Lease Payments for Operating and Capital Lease | The following schedule summarizes the future minimum lease payments for operating and capital leases at December 31, 2018 ( in thousands Operating leases Capital leases Year ended December 31, 2019 $ 1,895 $ 66 Year ended December 31, 2020 1,819 58 Year ended December 31, 2021 1,455 55 Year ended December 31, 2022 1,216 28 $ 6,385 $ 207 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 2 Months Ended |
Dec. 31, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Assets and Liabilities of Discontinued Operations | The results of operations from the discontinued business for the two months ended December 31, 2018 and the fiscal years ended October 31, 2018 and 2017 are as follows (in thousands): For the Two Months Ended December 31, For the Years Ended October 31, 2018 2018 2017 Revenues $ – $ – $ 558 Expenses – – 1,007 Loss from discontinued operations $ – $ – $ (449 ) Gain on sale of discontinued operations $ – $ – $ 100 The cash flows from the discontinued business for the two months ended December 31, 2018 and the fiscal years ended October 31, 2018 and 2017 are as follows (in thousands): For the Two Months Ended December 31, For the Years Ended October 31, 2018 2018 2017 CASH FLOWS FROM OPERATING ACTIVITIES Net loss from discontinued operations $ – $ – $ (349 ) Adjustments to reconcile net loss from discontinued operations to net cash used in discontinued operating activities: Depreciation and amortization – – 11 Stock based compensation expense – – 1,118 Amortization of capitalized software development costs and license fees – – 50 Gain on sale of Majesco Sub – – (100 ) Changes in operating assets and liabilities: Accounts receivable – – 113 Accounts payable and accrued expenses – – (810 ) Net cash provided by discontinued operating activities $ – $ – $ 33 CASH FLOWS FROM INVESTING ACTIVITIES Cash received from sale of Majesco Sub $ 10 $ 60 $ 25 Net cash provided by discontinued investing activities $ 10 $ 60 $ 25 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 2 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Segment Information | Certain information concerning our segments for the two months ended December 31, 2018 and the fiscal years ended October 31, 2018 and 2017 is presented in the following table (in thousands): For the Two Months Ended December 31, For the Years Ended October 31, 2018 2018 2017 Net revenues: Reportable segments: Regenerative medicine $ 210 $ 689 $ – Contract services 463 874 – Total net revenues $ 673 $ 1,563 $ – Net loss: Reportable segments: Regenerative medicine $ (18,352 ) $ (65,219 ) $ (130,480 ) Contract services (66 ) (222 ) – Discontinued operations – – (349 ) Total net loss $ (18,418 ) $ (65,441 ) $ (130,829 ) As of December 31, 2018 As of October 31, 2018 As of October 31, 2017 Identifiable assets employed: Reportable segments: Regenerative medicine $ 74,795 $ 82,512 $ 20,152 Contract services 5,371 5,330 – Discontinued operations – – – Total assets $ 80,166 $ 87,842 $ 20,152 |
Transition Period Comparative_2
Transition Period Comparative Financials (Unaudited) (Tables) | 2 Months Ended |
Dec. 31, 2018 | |
Transition Period Comparative Financials | |
Schedule of Transition Period Comparative Financials | Consolidated statements of operations for the two months ended December 31, 2017 is as follows: For the Two Months Ended December 31, 2017 (Unaudited) Net revenues $ 13 Cost of sales 1 Gross profit 12 Operating costs and expenses Product research and development 4,930 General and administrative 7,979 Total operating costs and expenses 12,909 Operating loss (12,897 ) Other income (expense) Interest income 18 Change in fair value of derivatives 1,964 Net loss (10,915 ) Deemed dividend – accretion of discount on Series F preferred stock (593 ) Deemed dividend – exchange of Series F preferred stock (182 ) Net loss attributable to common stockholders $ (11,690 ) Net loss per share, basic and diluted: Net loss $ (1.68 ) Deemed dividend – accretion of discount on Series F preferred stock (0.09 ) Deemed dividend – exchange of Series F preferred stock (0.03 ) Net loss attributable to common stockholders $ (1.80 ) Weighted average shares outstanding, basic and diluted: 6,496,841 |
Principal Business Activity a_2
Principal Business Activity and Basis of Presentation (Details Narrative) - USD ($) $ in Thousands | Jun. 23, 2017 | Apr. 07, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Oct. 31, 2018 | Oct. 31, 2017 |
Convertible preferred stock, shares authorized | 25,000,000 | 25,000,000 | 25,000,000 | |||
Net revenues | $ 673 | $ 13 | $ 1,563 | |||
Cash consideration received | 95 | |||||
Remaining balance on cash receivable | $ 5 | |||||
Majesco to Zift [Member] | ||||||
Common stock issued, outstanding percentage | 100.00% | |||||
Cash consideration | $ 100 | |||||
Additional monthly payments | 5 | |||||
Net revenues | $ 0 | |||||
Series E Preferred Shares [Member] | ||||||
Number of stock convertible into an aggregate shares of common stock | 7,050,000 | |||||
Number of stock convertible into an aggregate value of common stock | $ 104,700 | |||||
Series E Preferred Shares [Member] | Dr. Denver Lough [Member] | ||||||
Convertible preferred stock, shares authorized | 7,050 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details Narrative) $ in Thousands | 2 Months Ended | 12 Months Ended | ||
Dec. 31, 2018USD ($)Segment | Dec. 31, 2017USD ($) | Oct. 31, 2018USD ($)Segment | Oct. 31, 2017USD ($) | |
Number of operating segments | Segment | 2 | 2 | ||
Unbilled receivables | $ 157 | $ 160 | $ 0 | |
Deferred revenue | 170 | 150 | ||
Net revenues | $ 673 | $ 13 | $ 1,563 | |
Concentration risk, description | The Company considers a significant customer to be one that comprises more than 10% of net revenues or accounts receivable. | |||
Capitalized Software [Member] | ||||
Property and equipment, estimated useful lives | 3 years | |||
Minimum [Member] | ||||
Property and equipment, estimated useful lives | 3 years | |||
Finite-lived intangible asset, useful life | 1 year | |||
ROU assets | $ 5,200 | |||
Minimum [Member] | Restricted Stock [Member] | ||||
Share-based compensation arrangement by share-based payment award, award vesting period | 6 months | |||
Maximum [Member] | ||||
Property and equipment, estimated useful lives | 8 years | |||
Finite-lived intangible asset, useful life | 11 years | |||
ROU assets | $ 5,600 | |||
Maximum [Member] | Restricted Stock [Member] | ||||
Share-based compensation arrangement by share-based payment award, award vesting period | 3 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Concentration Risk (Details) | 2 Months Ended | 12 Months Ended | |
Dec. 31, 2018 | Oct. 31, 2018 | ||
Sales Revenue Net [Member] | Customer A [Member] | Contract Services [Member] | |||
Concentration risk percentage | 32.00% | 19.00% | |
Sales Revenue Net [Member] | Customer B [Member] | Regenerative Medicine [Member] | |||
Concentration risk percentage | 17.00% | [1] | |
Sales Revenue Net [Member] | Customer C [Member] | Contract Services [Member] | |||
Concentration risk percentage | 11.00% | [1] | |
Accounts Receivable [Member] | Customer A [Member] | Contract Services [Member] | |||
Concentration risk percentage | 23.00% | ||
Accounts Receivable [Member] | Customer B [Member] | Regenerative Medicine [Member] | |||
Concentration risk percentage | 20.00% | ||
Accounts Receivable [Member] | Customer C [Member] | Regenerative Medicine [Member] | |||
Concentration risk percentage | 14.00% | ||
[1] | The amount did not exceed 10% |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Schedule of Concentration Risk (Details) (Parenthetical) - Sales Revenue Net [Member] | 2 Months Ended | 12 Months Ended | |
Dec. 31, 2018 | Oct. 31, 2018 | ||
Customer B [Member] | Regenerative Medicine [Member] | |||
Concentration risk percentage | 17.00% | [1] | |
Customer B [Member] | Regenerative Medicine [Member] | Maximum [Member] | |||
Concentration risk percentage | 10.00% | ||
Customer C [Member] | Contract Services [Member] | |||
Concentration risk percentage | 11.00% | [1] | |
Customer C [Member] | Contract Services [Member] | Maximum [Member] | |||
Concentration risk percentage | 10.00% | ||
[1] | The amount did not exceed 10% |
Liquidity (Details Narrative)
Liquidity (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Jun. 07, 2018 | Apr. 12, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Oct. 31, 2018 | Oct. 31, 2017 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||
Net loss | $ (18,418) | $ (10,915) | $ (65,441) | $ (130,829) | ||
Cash used in operating activities | $ (7,999) | $ (28,546) | $ (7,583) | |||
Public offering share value | 2,455,882 | 2,335,937 | ||||
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | |
Public offering price per share | $ 23.65 | $ 16 | ||||
Proceeds for public offering | $ 58,000 | $ 34,600 |
IBEX Acquisition (Details Narra
IBEX Acquisition (Details Narrative) $ in Thousands | May 03, 2018USD ($) | Dec. 31, 2018USD ($) | Oct. 31, 2018USD ($) | Mar. 02, 2018a |
Direct and incremental costs | $ 38 | |||
Ibex Group, L.L.C [Member] | ||||
Area of land acquired | a | 1.75 | |||
Purchase price of land | $ 2,300 | $ 3,800 | ||
Initial fair value of liabilities | 300 | |||
Net revenue | 437 | 831 | ||
Gross profit | 250 | 331 | ||
Contingent consideration liability | $ 300 | |||
Estimated discount rate | 20.00% | |||
Contingent consideration liability percentage | 15.00% | |||
General and administrative expenses | $ 57 | $ 20 | ||
Ibex Group, L.L.C [Member] | Maximum [Member] | ||||
Contingent consideration liability | $ 650 | |||
Ibex Group, L.L.C [Member] | Promissory Note payable [Member] | ||||
Initial fair value of liabilities | $ 1,200 |
IBEX Acquisition - Schedule of
IBEX Acquisition - Schedule of Purchase Price Allocation (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Oct. 31, 2018 | Oct. 31, 2017 |
Business Combinations [Abstract] | |||
Equipment | $ 430 | ||
Land and buildings | 2,000 | ||
Intangible assets | 1,057 | ||
Goodwill | 278 | $ 278 | |
Accrued property taxes | (9) | ||
Aggregate purchase price | 3,756 | ||
Less: Promissory note to seller | 1,220 | ||
Contingent consideration | 278 | ||
Cash paid at closing | $ 2,258 |
IBEX Acquisition - Schedule o_2
IBEX Acquisition - Schedule of Identifiable Intangible Assets (Details) $ in Thousands | 2 Months Ended |
Dec. 31, 2018USD ($) | |
Total intangible assets | $ 1,057 |
Non-Compete Agreement [Member] | |
Total intangible assets | $ 410 |
Remaining useful life | 4 years |
Customer Contracts and Relationships [Member] | |
Total intangible assets | $ 534 |
Customer Contracts and Relationships [Member] | Minimum [Member] | |
Remaining useful life | 7 years |
Customer Contracts and Relationships [Member] | Maximum [Member] | |
Remaining useful life | 8 years |
Trade Names and Trademarks [Member] | |
Total intangible assets | $ 101 |
Trade Names and Trademarks [Member] | Minimum [Member] | |
Remaining useful life | 10 years |
Trade Names and Trademarks [Member] | Maximum [Member] | |
Remaining useful life | 11 years |
Backlog [Member] | |
Total intangible assets | $ 12 |
Remaining useful life, description | Less than 1 |
Fair Value (Details Narrative)
Fair Value (Details Narrative) - USD ($) | Mar. 05, 2018 | Dec. 31, 2018 | Oct. 31, 2017 | Mar. 06, 2018 | Sep. 30, 2017 |
Number of warrant to purchase shares of common stock | 151,871 | ||||
Embedded conversion feature | $ 7,200,000 | $ 9,300,000 | |||
Fair value of warrants | 2,525,567 | ||||
Warrant Liability [Member] | |||||
Fair value of warrants | $ 2,500,000 | $ 4,300,000 | |||
Series F Preferred Stock [Member] | |||||
Number of warrant to purchase shares of common stock | 322,727 | 322,727 | |||
Warrant exercisable price per share | $ 30 | ||||
Warrants terms | 2 years | ||||
Fair value of warrants | $ 4,300,000 |
Fair Value - Schedule of Fair V
Fair Value - Schedule of Fair Value Assumptions of Warrants and Embedded Conversion Feature (Details) - Monte Carlo Simulation [Member] - $ / shares | Mar. 05, 2018 | Oct. 31, 2017 |
Measurement Input, Stock Price [Member] | Warrant Liability [Member] | ||
Fair value assumptions, measurement input, per share | $ 20.05 | $ 25.87 |
Measurement Input, Exercise Price [Member] | Warrant Liability [Member] | ||
Fair value assumptions, measurement input, per share | $ 30 | $ 30 |
Measurement Input, Risk Free Interest Rate [Member] | Warrant Liability [Member] | ||
Fair value assumptions, measurement input, percentages | 2.20% | 1.60% |
Measurement Input, Price Volatility [Member] | Warrant Liability [Member] | ||
Fair value assumptions, measurement input, percentages | 88.20% | 96.00% |
Measurement Input, Expected Term [Member] | Warrant Liability [Member] | ||
Fair value assumptions, measurement input, term | 1 year 6 months | 1 year 10 months 25 days |
Series F Conversion Feature [Member] | Measurement Input, Stock Price [Member] | ||
Fair value assumptions, measurement input, per share | $ 20.05 | $ 25.87 |
Series F Conversion Feature [Member] | Measurement Input, Exercise Price [Member] | ||
Fair value assumptions, measurement input, per share | $ 27.50 | $ 27.50 |
Series F Conversion Feature [Member] | Measurement Input, Risk Free Interest Rate [Member] | ||
Fair value assumptions, measurement input, percentages | 2.20% | 1.60% |
Series F Conversion Feature [Member] | Measurement Input, Price Volatility [Member] | ||
Fair value assumptions, measurement input, percentages | 88.20% | 96.00% |
Series F Conversion Feature [Member] | Measurement Input, Expected Term [Member] | ||
Fair value assumptions, measurement input, term | 1 year 6 months | 1 year 10 months 25 days |
Fair Value - Schedule of Fair_2
Fair Value - Schedule of Fair Value of Financial Instruments Measured on Recurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Oct. 31, 2018 | Oct. 31, 2017 |
Money market funds | $ 7 | $ 69,659 | $ 17,322 |
Commercial paper | 21,392 | ||
Corporate debt securities | 5,448 | ||
U.S. government debt securities | 3,226 | ||
Total | 30,073 | 69,659 | 17,322 |
Contingent consideration | 261 | 235 | |
Warrant liability | 4,256 | ||
Derivative liability | 9,246 | ||
Total | 261 | 235 | 13,502 |
Level 1 [Member] | |||
Money market funds | 7 | 69,659 | 17,322 |
Commercial paper | |||
Corporate debt securities | |||
U.S. government debt securities | |||
Total | 7 | 69,659 | 17,322 |
Contingent consideration | |||
Warrant liability | |||
Derivative liability | |||
Total | |||
Level 2 [Member] | |||
Money market funds | |||
Commercial paper | 21,392 | ||
Corporate debt securities | 5,448 | ||
U.S. government debt securities | 3,226 | ||
Total | 30,066 | ||
Contingent consideration | |||
Warrant liability | |||
Derivative liability | |||
Total | |||
Level 3 [Member] | |||
Money market funds | |||
Commercial paper | |||
Corporate debt securities | |||
U.S. government debt securities | |||
Total | |||
Contingent consideration | 261 | 235 | |
Warrant liability | 4,256 | ||
Derivative liability | 9,246 | ||
Total | $ 261 | $ 235 | $ 13,502 |
Fair Value - Schedule of Change
Fair Value - Schedule of Changes in Estimated Fair Value for Level 3 Classified Contingent Consideration (Details) - USD ($) $ in Thousands | 2 Months Ended | 12 Months Ended | |
Dec. 31, 2018 | Oct. 31, 2018 | Oct. 31, 2017 | |
Fair Value Disclosures [Abstract] | |||
Fair value at the beginning of period | $ 235 | ||
IBEX acquisition – May 3, 2018 | 278 | ||
Change in fair value | 57 | 20 | |
Earned and paid in cash | (30) | ||
Earned and moved to accounts payable | (31) | (33) | |
Fair value at the end of period | $ 261 | $ 235 |
Cash Equivalents and Availabl_3
Cash Equivalents and Available-for-Sale Marketable Securities (Details Narrative) - USD ($) $ in Thousands | Dec. 31, 2018 | Oct. 31, 2018 | Oct. 31, 2017 |
Cash and Cash Equivalents [Abstract] | |||
Money market funds | $ 7 | $ 69,659 | $ 17,322 |
Cash Equivalents and Availabl_4
Cash Equivalents and Available-for-Sale Marketable Securities - Schedule of Cash Equivalents and Available-for-sale Marketable Securities (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Oct. 31, 2018 | Oct. 31, 2017 |
Money market funds | $ 7 | $ 69,659 | $ 17,322 |
Commercial paper | 21,392 | ||
U.S. government debt securities | 3,226 | ||
Total cash equivalents | 23,911 | ||
Commercial paper | 714 | ||
Corporate debt securities | 5,448 | ||
Total short-term investments | 6,162 | ||
Total | 30,073 | ||
Amortized Cost [Member] | |||
Money market funds | 7 | ||
Commercial paper | 20,648 | ||
U.S. government debt securities | 3,224 | ||
Total cash equivalents | 23,879 | ||
Commercial paper | 714 | ||
Corporate debt securities | 5,444 | ||
Total short-term investments | 6,158 | ||
Total | 30,037 | ||
Unrealized Gains [Member] | |||
Money market funds | |||
Commercial paper | 30 | ||
U.S. government debt securities | 2 | ||
Total cash equivalents | 32 | ||
Commercial paper | |||
Corporate debt securities | 5 | ||
Total short-term investments | 5 | ||
Total | 37 | ||
Unrealized Losses [Member] | |||
Money market funds | |||
Commercial paper | |||
U.S. government debt securities | |||
Total cash equivalents | |||
Commercial paper | |||
Corporate debt securities | (1) | ||
Total short-term investments | (1) | ||
Total | $ (1) |
Property and Equipment, Net - S
Property and Equipment, Net - Schedule of Property and Equipment, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Oct. 31, 2018 | Oct. 31, 2017 |
Property, Plant and Equipment [Abstract] | |||
Machinery and equipment | $ 8,276 | $ 8,134 | $ 2,418 |
Land and buildings | 2,000 | 2,000 | |
Computers and software | 1,372 | 1,337 | 211 |
Leasehold improvements | 1,230 | 1,137 | |
Construction in progress | 2,402 | 1,587 | |
Furniture and equipment | 614 | 566 | 30 |
Total property and equipment, gross | 15,894 | 14,761 | 2,659 |
Accumulated depreciation | (2,158) | (1,834) | (486) |
Total property and equipment, net | $ 13,736 | $ 12,927 | $ 2,173 |
Property and Equipment, Net -_2
Property and Equipment, Net - Schedule of Depreciation Expense (Details) - USD ($) $ in Thousands | 2 Months Ended | 12 Months Ended | |
Dec. 31, 2018 | Oct. 31, 2018 | Oct. 31, 2017 | |
General and administrative expense, continuing operations | $ 7,505 | $ 31,982 | $ 14,869 |
General and administrative expense, discontinued operations | 1,118 | ||
General and administrative expense, continuing operations and discontinued operations | 7,505 | 31,982 | 15,987 |
Research and development expense, continuing operations | 919 | 6,322 | 1,758 |
Total depreciation and amortization expense | 330 | 1,394 | 432 |
Depreciation [Member] | |||
General and administrative expense, continuing operations | 155 | 223 | 1 |
General and administrative expense, discontinued operations | 11 | ||
General and administrative expense, continuing operations and discontinued operations | 155 | 223 | 12 |
Research and development expense, continuing operations | 175 | 1,171 | 431 |
Total depreciation and amortization expense | $ 330 | $ 1,394 | $ 443 |
Intangible Assets and Goodwil_2
Intangible Assets and Goodwill (Details Narrative) - USD ($) $ in Thousands | 2 Months Ended | 12 Months Ended | |
Dec. 31, 2018 | Oct. 31, 2018 | Oct. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization expense | $ 33 | $ 100 |
Intangible Assets and Goodwil_3
Intangible Assets and Goodwill - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Oct. 31, 2018 | Oct. 31, 2017 |
Total intangible assets, gross | $ 1,057 | $ 1,057 | |
Accumulated amortization | (133) | (100) | |
Total intangible assets, net | 924 | 957 | |
Non-Compete Agreement [Member] | |||
Total intangible assets, gross | 410 | 410 | |
Customer Contracts and Relationships [Member] | |||
Total intangible assets, gross | 534 | 534 | |
Trade Names and Trademarks [Member] | |||
Total intangible assets, gross | 101 | 101 | |
Backlog [Member] | |||
Total intangible assets, gross | $ 12 | $ 12 |
Intangible Assets and Goodwil_4
Intangible Assets and Goodwill - Schedule of Future Amortization of Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Oct. 31, 2018 | Oct. 31, 2017 |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Year ended December 31, 2019 | $ 193 | ||
Year ended December 31, 2020 | 189 | ||
Year ended December 31, 2021 | 189 | ||
Year ended December 31, 2022 | 121 | ||
Year ended December 31, 2023 | 87 | ||
Thereafter | 145 | ||
Total | $ 924 | $ 957 |
Intangible Assets and Goodwil_5
Intangible Assets and Goodwill - Schedule of Carrying Amount of Goodwill (Details) - USD ($) $ in Thousands | 2 Months Ended | 12 Months Ended | |
Dec. 31, 2018 | Oct. 31, 2018 | ||
Goodwill, begining | $ 278 | ||
Additions due to acquisitions | 278 | [1] | |
Goodwill, ending | 278 | 278 | |
Regenerative Medicine [Member] | |||
Goodwill, begining | |||
Additions due to acquisitions | [1] | ||
Goodwill, ending | |||
Contract Services [Member] | |||
Goodwill, begining | 278 | ||
Additions due to acquisitions | 278 | [1] | |
Goodwill, ending | $ 278 | $ 278 | |
[1] | On May 3, 2018, the Company acquired the preclinical research and contract services business and related real estate from IBEX L.L.C. |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Expenses - Schedule of Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Oct. 31, 2018 | Oct. 31, 2017 |
Payables and Accruals [Abstract] | |||
Accounts payable | $ 2,918 | $ 2,007 | $ 441 |
Salaries and other compensation | 1,280 | 933 | 574 |
Other accruals | 1,670 | 792 | 369 |
Legal and accounting | 640 | 631 | 555 |
Total accounts payable and accrued expenses | $ 6,508 | $ 4,363 | $ 1,939 |
Long Term Note Payable (Details
Long Term Note Payable (Details Narrative) - USD ($) $ in Thousands | 2 Months Ended | 12 Months Ended | ||
Dec. 31, 2018 | Oct. 31, 2018 | Oct. 31, 2017 | May 03, 2018 | |
Unamortized debt discount | $ 68 | $ 78 | ||
Amortization of debt discount | 10 | $ 35 | ||
Promissory Note [Member] | ||||
Promissory note payable | $ 1,300 | |||
Interest rate | 3.50% | |||
Maturity date | Nov. 3, 2020 | |||
Accelerated interest rate | 7.00% | |||
Interest expenses | $ 113 | |||
Ibex Group, L.L.C [Member] | ||||
Initial fair value of liabilities | $ 300 | |||
Ibex Group, L.L.C [Member] | Promissory Note [Member] | ||||
Initial fair value of liabilities | $ 1,200 |
Preferred Shares and Common S_3
Preferred Shares and Common Shares (Details Narrative) - USD ($) | Jun. 07, 2018 | Apr. 12, 2018 | Mar. 06, 2018 | Mar. 05, 2018 | Feb. 06, 2018 | Sep. 20, 2017 | Apr. 07, 2017 | Dec. 31, 2018 | Oct. 31, 2018 | Oct. 31, 2017 | Sep. 30, 2017 |
Number of shares issued in offerings | 2,455,882 | 2,335,937 | |||||||||
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||||||
Sale of stock price, per share | $ 23.65 | $ 16 | |||||||||
Proceeds for public offering | $ 58,000,000 | $ 34,600,000 | |||||||||
Sales of stock amount | $ 95,000 | ||||||||||
Fair value of warrants | $ 2,525,567 | ||||||||||
Conversion of preferred stock into common stock, number shares issued | 3,045,034 | ||||||||||
Number of warrants exchanged to purchase common stock | 151,871 | ||||||||||
Preferred stock, shares authorized | 25,000,000 | 25,000,000 | 25,000,000 | ||||||||
Convertible preferred stock, shares outstanding | 0 | 0 | 3,230,655 | ||||||||
Warrant Liability [Member] | |||||||||||
Fair value of warrants | $ 2,500,000 | $ 4,300,000 | |||||||||
Gain/loss on extinguishment of warrant liability | $ 519,467 | ||||||||||
6% Series F Convertible Preferred Stock [Member] | |||||||||||
Preferred stock, stated value per share | $ 2,750 | ||||||||||
Preferred stock initial conversion price, per share | $ 27.50 | ||||||||||
6% Series F Convertible Preferred Stock [Member] | Accredited Investors [Member] | |||||||||||
Sale of stock price, per share | $ 2,750 | ||||||||||
Sales of stock amount | $ 17,750,000 | ||||||||||
Preferred stock, stated value per share | $ 0.001 | ||||||||||
Conversion of stock shares converted | 100 | ||||||||||
Warrant term | 2 years | ||||||||||
Warrants to purchase shares of common stock | 322,727 | ||||||||||
Warrant exercise price per share | $ 30 | ||||||||||
Series F Preferred Stock [Member] | |||||||||||
Warrant term | 2 years | ||||||||||
Warrant exercise price per share | $ 30 | ||||||||||
Description on certificate of designation | On the two-year anniversary of the initial issuance date, any Series F Preferred Shares outstanding and not otherwise already converted, would, at the option of the holder, either (i) automatically convert into common stock of the Company at the conversion price then in effect or (ii) be repaid by the Company based on the stated value of such outstanding Series F Preferred Shares. | ||||||||||
Fair value of warrants | $ 4,300,000 | ||||||||||
Bifurcated embedded conversion feature | 9,300,000 | ||||||||||
Preferred stock dividends | $ 13,600,000 | ||||||||||
Beneficially ownership percentage | 100.00% | ||||||||||
Number of warrants exchanged to purchase common stock | 322,727 | 322,727 | |||||||||
Preferred stock reduction in additional paid in capital | $ 1,290,000 | ||||||||||
Convertible preferred stock, shares outstanding | 6,455 | ||||||||||
Series F Preferred Stock [Member] | Restricted Stock [Member] | |||||||||||
Conversion of stock shares converted | 972,070 | ||||||||||
Conversion price, per share | $ 18.26 | ||||||||||
Preferred stock dividend percentage | 6.00% | ||||||||||
Conversion of preferred stock into common stock, number shares issued | 31,321 | ||||||||||
Number of warrants exchanged to purchase common stock | 151,871 | ||||||||||
Series B Preferred Shares [Member] | |||||||||||
Conversion of stock shares converted | 15,756 | ||||||||||
Beneficially ownership percentage | 100.00% | ||||||||||
Conversion of preferred stock into common stock, number shares issued | 7,945,250 | 262,606 | |||||||||
Convertible preferred stock, shares outstanding | 47,689 | ||||||||||
Series A Preferred Shares [Member] | |||||||||||
Beneficially ownership percentage | 100.00% | ||||||||||
Conversion of preferred stock into common stock, number shares issued | 7,945,250 | ||||||||||
Convertible preferred stock, shares outstanding | 3,146,671 | ||||||||||
Series E Preferred Shares [Member] | |||||||||||
Beneficially ownership percentage | 100.00% | ||||||||||
Convertible preferred stock, shares outstanding | 7,050 | ||||||||||
Series E Preferred Shares [Member] | |||||||||||
Conversion of stock shares converted | 7,050,000 | ||||||||||
Conversion of preferred stock into common stock, number shares issued | 7,945,250 | ||||||||||
Series E Preferred Shares [Member] | Lough Registration Rights Agreement [Member] | |||||||||||
Conversion of preferred stock into common stock, number shares issued | 7,050,000 |
Preferred Shares and Common S_4
Preferred Shares and Common Shares - Schedule of Deemed Dividend on Preferred Shares Exchange (Details) | 2 Months Ended |
Dec. 31, 2018USD ($) | |
Equity [Abstract] | |
Fair market value of 1,003,393 shares of common stock issued at $20.05 (Company's closing stock price on March 5, 2018) in exchange for Series F Preferred Shares and accrued dividends | $ 20,117,990 |
Carrying value of Series F Preferred Shares at March 5, 2018, including dividends | (5,898,274) |
Carrying value of bifurcated conversion option at March 5, 2018 | (7,162,587) |
Deemed dividend on Series F Preferred Shares exchange | $ 7,057,129 |
Preferred Shares and Common S_5
Preferred Shares and Common Shares - Schedule of Deemed Dividend on Preferred Shares Exchange (Details) (Parenthetical) - Series F Preferred Stock [Member] | Mar. 05, 2018$ / sharesshares |
Fair market value of common stock issued, shares | shares | 1,003,393 |
Common stock price per share | $ / shares | $ 20.05 |
Preferred Shares and Common S_6
Preferred Shares and Common Shares - Schedule of Convertible Preferred Stock Activity (Details) - shares | Dec. 31, 2018 | Oct. 31, 2018 | Oct. 31, 2017 |
Preferred stock, shares outstanding | 0 | 0 | 3,230,655 |
Common stock shares, issued | 21,447,088 | 21,423,999 | 6,515,524 |
Series A Preferred Shares [Member] | |||
Preferred stock, shares outstanding | 3,146,671 | ||
Series A Convertible Preferred Stock [Member] | |||
Preferred stock, shares outstanding | 3,146,671 | ||
Series A Convertible Preferred Stock [Member] | Series F Exchange [Member] | |||
Preferred stock, conversions | (3,146,671) | ||
Series A Common Stock [Member] | |||
Common stock shares, issued | 713,036 | ||
Series B Preferred Shares [Member] | |||
Preferred stock, shares outstanding | 47,689 | ||
Series B Convertible Preferred Stock [Member] | |||
Preferred stock, shares outstanding | 47,689 | ||
Series B Convertible Preferred Stock [Member] | Series F Exchange [Member] | |||
Preferred stock, conversions | (47,689) | ||
Series B Common Stock [Member] | |||
Common stock shares, issued | 794,820 | ||
Series C Preferred Shares [Member] | |||
Preferred stock, shares outstanding | 2,578 | ||
Series C Convertible Preferred Stock [Member] | |||
Preferred stock, shares outstanding | 2,578 | ||
Series C Convertible Preferred Stock [Member] | Series F Exchange [Member] | |||
Preferred stock, conversions | (2,578) | ||
Series C Common Stock [Member] | |||
Common stock shares, issued | 59,950 | ||
Series D Preferred Shares [Member] | |||
Preferred stock, shares outstanding | 26,667 | ||
Series D Convertible Preferred Stock [Member] | |||
Preferred stock, shares outstanding | 26,667 | ||
Series D Convertible Preferred Stock [Member] | Series F Exchange [Member] | |||
Preferred stock, conversions | (26,667) | ||
Series D Common Stock [Member] | |||
Common stock shares, issued | 44,445 | ||
Series E Preferred Shares [Member] | |||
Preferred stock, shares outstanding | 7,050 | ||
Series E Convertible Preferred Stock [Member] | |||
Preferred stock, shares outstanding | 7,050 | ||
Series E Convertible Preferred Stock [Member] | Series F Exchange [Member] | |||
Preferred stock, conversions | (7,050) | ||
Series E Common Stock [Member] | |||
Common stock shares, issued | 7,050,000 | ||
Series F Preferred Stock [Member] | |||
Preferred stock, shares outstanding | 6,455 | ||
Series F Convertible Preferred Stock [Member] | |||
Preferred stock, shares outstanding | 6,455 | ||
Series F Convertible Preferred Stock [Member] | Series F Exchange [Member] | |||
Preferred stock, conversions | (6,455) | ||
Series F Common Stock [Member] | |||
Common stock shares, issued | 972,070 | ||
Outstanding [Member] | |||
Preferred stock, shares outstanding | 3,237,110 | ||
Preferred Stock [Member] | Series F Exchange [Member] | |||
Preferred stock, conversions | (3,237,110) | ||
Common Stock [Member] | |||
Common stock shares, issued | 9,634,321 |
Preferred Shares and Common S_7
Preferred Shares and Common Shares - Schedule of Convertible Preferred Stock Outstanding (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Oct. 31, 2018 | Oct. 31, 2017 |
Preferred stock, shares authorized | 25,000,000 | 25,000,000 | 25,000,000 |
Preferred stock, shares issued and outstanding | 0 | 0 | 3,230,655 |
Preferred stock, net carrying value | $ 109,995 | ||
Preferred stock, aggregate liquidation preference | $ 0 | $ 0 | $ 2,140 |
Series A Convertible Preferred Stock [Member] | |||
Preferred stock, shares authorized | 8,830,000 | ||
Preferred stock, shares issued and outstanding | 3,146,671 | ||
Preferred stock, net carrying value | $ 769 | ||
Preferred stock, aggregate liquidation preference | $ 2,140 | ||
Common Shares Issuable Upon Conversion | 713,245 | ||
Series B Convertible Preferred Stock [Member] | |||
Preferred stock, shares authorized | 54,250 | ||
Preferred stock, shares issued and outstanding | 47,689 | ||
Preferred stock, net carrying value | $ 4,020 | ||
Preferred stock, aggregate liquidation preference | |||
Common Shares Issuable Upon Conversion | 794,806 | ||
Series C Convertible Preferred Stock [Member] | |||
Preferred stock, shares authorized | 26,000 | ||
Preferred stock, shares issued and outstanding | 2,578 | ||
Preferred stock, net carrying value | $ 201 | ||
Preferred stock, aggregate liquidation preference | |||
Common Shares Issuable Upon Conversion | 59,953 | ||
Series D Convertible Preferred Stock [Member] | |||
Preferred stock, shares authorized | 170,000 | ||
Preferred stock, shares issued and outstanding | 26,667 | ||
Preferred stock, net carrying value | $ 312 | ||
Preferred stock, aggregate liquidation preference | |||
Common Shares Issuable Upon Conversion | 44,445 | ||
Series E Convertible Preferred Stock [Member] | |||
Preferred stock, shares authorized | 7,050 | ||
Preferred stock, shares issued and outstanding | 7,050 | ||
Preferred stock, net carrying value | $ 104,693 | ||
Preferred stock, aggregate liquidation preference | |||
Common Shares Issuable Upon Conversion | 7,050,000 | ||
Series F Convertible Preferred Stock [Member] | |||
Preferred stock, shares authorized | 6,455 | ||
Preferred stock, shares issued and outstanding | 6,455 | ||
Preferred stock, net carrying value | $ 4,541 | ||
Preferred stock, aggregate liquidation preference | $ 17,750 | ||
Common Shares Issuable Upon Conversion | 645,455 | ||
Other Authorized, Unissued [Member] | |||
Preferred stock, shares authorized | 15,906,245 | ||
Preferred stock, shares issued and outstanding | |||
Preferred stock, net carrying value | |||
Preferred stock, aggregate liquidation preference | |||
Common Shares Issuable Upon Conversion | |||
Convertible Preferred Stock [Member] | |||
Preferred stock, shares authorized | 25,000,000 | ||
Preferred stock, shares issued and outstanding | 3,237,110 | ||
Preferred stock, net carrying value | $ 114,536 | ||
Preferred stock, aggregate liquidation preference | $ 19,890 | ||
Common Shares Issuable Upon Conversion | 9,307,904 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details Narrative) - USD ($) $ in Thousands | Oct. 05, 2018 | Dec. 31, 2018 | Oct. 31, 2018 | Oct. 31, 2017 | Oct. 31, 2015 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Fair value of stock options shares granted | $ 8,908 | $ 38,821 | $ 17,745 | ||
Share-based compensation arrangement by share-based payment award, options, outstanding, intrinsic value | $ 28,500 | ||||
Weighted average remaining contractual term, outstanding | 8 years 8 months 12 days | ||||
Weighted average remaining contractual term, exercisable options | 8 years 2 months 12 days | ||||
Unrecognized compensation cost | $ 21,000 | ||||
Unrecognized compensation cost, period for recognition | 9 months 18 days | ||||
Employee Stock Option [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Fair value of stock options shares granted | $ 4,000 | ||||
Non-Employee Stock Option [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Fair value of stock options shares granted | 400 | ||||
Restricted Stock and Restricted Stock Units [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Unrecognized compensation cost | $ 10,000 | ||||
Unrecognized compensation cost, period for recognition | 10 months 25 days | ||||
Fair value of restricted stock vested | $ 2,100 | ||||
Maximum [Member] | Restricted Stock and Restricted Stock Units [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock options vesting term | 3 years | ||||
Maximum [Member] | Stock Option [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock options vesting term | 3 years | ||||
Stock options expire term | 10 years | ||||
Minimum [Member] | Restricted Stock and Restricted Stock Units [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock options vesting term | 6 months | ||||
Minimum [Member] | Stock Option [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock options vesting term | 1 year | ||||
Stock options expire term | 5 years | ||||
2019 Equity Incentive Plan [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock based compensation terminate date | Oct. 5, 2028 | ||||
Number of share available for future issuance | 2,546,584 | ||||
2019 Equity Incentive Plan [Member] | Maximum [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of common stock shares issued | 3,000,000 | ||||
2017 Equity Incentive Plan [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of common stock shares issued | 3,450,000 | ||||
Stock based compensation terminate date | Dec. 1, 2026 | ||||
Number of share available for future issuance | 65,015 | ||||
2017 Equity Incentive Plan [Member] | Maximum [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of common stock shares issued | 7,300,000 | ||||
2014 Equity Incentive Plan [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of share available for future issuance | 1,927,453 | ||||
2014 Equity Incentive Plan [Member] | Maximum [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of common stock shares issued | 2,250,000 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Share-based Compensation Related to Restricted Stock Awards and Stock Options (Details) - USD ($) $ in Thousands | 2 Months Ended | 12 Months Ended | |
Dec. 31, 2018 | Oct. 31, 2018 | Oct. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
General and administrative expense, continuing operations | $ 7,505 | $ 31,982 | $ 14,869 |
General and administrative expense, discontinued operations | 1,118 | ||
General and administrative expense, continuing operations and discontinued operations | 7,505 | 31,982 | 15,987 |
Research and development expense, continuing operations | 919 | 6,322 | 1,758 |
Sales and marketing expense, continuing operations | 522 | 517 | |
Total stock-based compensation expense | 8,946 | 38,821 | 17,745 |
Stock-based compensation expense classified as a liability | 38 | ||
Stock-based compensation expense classified to equity | $ 8,908 | $ 38,321 | $ 17,745 |
Stock-Based Compensation - Sc_2
Stock-Based Compensation - Schedule of Share-based Compensation, Stock Options, Activity (Details) - $ / shares | 2 Months Ended | 12 Months Ended | |
Dec. 31, 2018 | Oct. 31, 2018 | Oct. 31, 2017 | |
Employee Stock Option [Member] | |||
Number of Shares, Outstanding at beginning of period | 5,784,505 | 3,525,530 | 383,210 |
Number of Shares, Granted | 396,861 | 2,638,769 | 3,482,000 |
Number of Shares, Exercised | (161,810) | (268,847) | |
Number of Shares, Forfeited | (938) | (217,984) | (70,833) |
Number of Shares, Outstanding at end of period | 6,180,428 | 5,784,505 | 3,525,530 |
Number of Shares, Options exercisable | 3,899,806 | ||
Weighted Average Exercise Price, Outstanding at beginning of year | $ 13.68 | $ 6.34 | $ 5.74 |
Weighted Average Exercise Price, Granted | 14.27 | 23.55 | 6.29 |
Weighted Average Exercise Price, Exercised | 4.31 | 4.84 | |
Weighted Average Exercise Price, Forfeited | 24.20 | 21.89 | 6.42 |
Weighted Average Exercise Price, Outstanding at end of year | 13.72 | 13.68 | $ 6.34 |
Weighted Average Exercise Price, Options exercisable | 9.23 | $ 8.53 | |
Weighted-average fair value of options granted during the period | $ 9.95 | ||
Non-Employee Stock Option [Member] | |||
Number of Shares, Outstanding at beginning of period | 296,000 | 293,000 | |
Number of Shares, Granted | 23,791 | 3,000 | 293,000 |
Number of Shares, Forfeited | (334) | ||
Number of Shares, Outstanding at end of period | 319,457 | 296,000 | 293,000 |
Number of Shares, Options exercisable | 199,207 | ||
Weighted Average Exercise Price, Outstanding at beginning of year | $ 19.60 | $ 19.61 | |
Weighted Average Exercise Price, Granted | 21.42 | 18.63 | 19.61 |
Weighted Average Exercise Price, Forfeited | 6.33 | ||
Weighted Average Exercise Price, Outstanding at end of year | 19.75 | $ 19.60 | $ 19.61 |
Weighted Average Exercise Price, Options exercisable | $ 17.90 |
Stock-Based Compensation - Sc_3
Stock-Based Compensation - Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions (Details) | 2 Months Ended | 12 Months Ended | |
Dec. 31, 2018 | Oct. 31, 2018 | Oct. 31, 2017 | |
Risk free annual interest rate, minimum | 2.60% | 2.00% | 1.60% |
Risk free annual interest rate, maximum | 3.20% | 3.20% | 2.30% |
Expected volatility, minimum | 80.60% | 80.90% | 71.70% |
Expected volatility, maximum | 94.40% | 96.50% | 86.50% |
Assumed dividends | 0.00% | 0.00% | 0.00% |
Minimum [Member] | |||
Expected term of options (years) | 5 years | 5 years | 5 years |
Maximum [Member] | |||
Expected term of options (years) | 6 years 6 months | 6 years | 6 years |
Stock-Based Compensation - Sc_4
Stock-Based Compensation - Schedule of Share-based Compensation, Restricted Stock Activity (Details) - Restricted Stock and Restricted Stock Units [Member] - $ / shares | 2 Months Ended | 12 Months Ended | ||
Dec. 31, 2018 | Oct. 31, 2018 | Oct. 31, 2017 | ||
Number of Shares, Unvested at beginning of period | 673,960 | 227,132 | 274,829 | |
Number of Shares, Granted | 63,192 | 712,034 | 1,057,500 | |
Number of Shares, Vested | (86,042) | [1] | (242,819) | (1,105,197) |
Number of Shares, Forfeited | (22,387) | |||
Number of Shares, Unvested at end of period | 651,110 | 673,960 | 227,132 | |
Weighted-Average Grant-Date Fair Value Unvested at beginning of period | $ 24.52 | $ 7.83 | $ 6 | |
Weighted-Average Grant-Date Fair Value, Granted | 14.17 | 25.27 | 4.80 | |
Weighted-Average Grant-Date Fair Value, Vested | 24.17 | [1] | 11.74 | 4.47 |
Weighted-Average Grant-Date Fair Value, Forfeited | 20.62 | |||
Weighted-Average Grant-Date Fair Value, Unvested at end of period | $ 23.65 | $ 24.52 | $ 7.83 | |
[1] | The number of vested restricted stock units includes shares that were withheld on behalf of employees to satisfy the minimum statutory tax withholding requirements. |
Employee Benefit Plan (Details
Employee Benefit Plan (Details Narrative) - USD ($) $ in Thousands | 2 Months Ended | 12 Months Ended | |
Dec. 31, 2018 | Oct. 31, 2018 | Oct. 31, 2017 | |
Retirement Benefits [Abstract] | |||
Pre-tax earnings of contribution | $ 18,500 | ||
Percentage of contribution | 3.00% | ||
Contribution expense | $ 35,000 | $ 120,000 | $ 55,000 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) $ in Thousands | Dec. 22, 2017 | Dec. 31, 2018 | Oct. 31, 2018 | Oct. 31, 2017 |
Operating Loss Carryforwards [Line Items] | ||||
Corporate statutory tax rate | 21.00% | 34.00% | 34.00% | |
Deferred tax rate | 0.00% | 0.00% | 0.00% | |
Reduction in deferred tax asset and valuation allowance | $ (3,991) | $ (12,036) | $ (2,983) | |
Operating loss carry-forward description | The change in tax law, all losses post 2018 will have an unlimited carryforward period (but can only utilize 80% max per year). All prior net operating losses still have the same carryforward limit of 20 years. | |||
Unrecognized tax benefits, which would impact its tax rate | ||||
Payment for penalties accrual | ||||
Tax Cuts and Jobs Act [Member] | ||||
Operating Loss Carryforwards [Line Items] | ||||
Income tax rate reconciliation description | The most significant provision reduces the U.S. corporate statutory tax rate from 35% to 21% beginning on January 1, 2018. | |||
Corporate statutory tax rate | 21.00% | |||
US Deferred Tax [Member] | ||||
Operating Loss Carryforwards [Line Items] | ||||
Deferred tax rate | 21.00% | |||
Reduction in deferred tax asset and valuation allowance | $ 2,600 | |||
Federal [Member] | ||||
Operating Loss Carryforwards [Line Items] | ||||
Net operating loss carryforwards | $ 473,000 | |||
Operating loss carryforwards, description | expires between 2038 and 2039 | |||
State [Member] | ||||
Operating Loss Carryforwards [Line Items] | ||||
Net operating loss carryforwards | $ 25,500 | |||
Operating loss carryforwards, description | expires between 2032 and 2033 |
Income Taxes - Schedule of Loss
Income Taxes - Schedule of Loss Before Income Taxes (Details) - USD ($) $ in Thousands | 2 Months Ended | 12 Months Ended | |
Dec. 31, 2018 | Oct. 31, 2018 | Oct. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Net loss from continuing operations before income taxes | $ (18,418) | $ (65,743) | $ (130,480) |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands | 2 Months Ended | 12 Months Ended | |
Dec. 31, 2018 | Oct. 31, 2018 | Oct. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Current: Federal | $ (302) | ||
Current: State | 3 | ||
Deferred: Federal | (3,734) | (11,561) | (2,679) |
Deferred: State | (257) | (475) | (304) |
Change in: valuation allowance | 3,991 | 12,036 | 2,983 |
Total provision (benefit) for income taxes | $ (302) |
Income Taxes - Schedule of Stat
Income Taxes - Schedule of Statutory Federal Rate and Provision for Income Tax (Details) - USD ($) $ in Thousands | 2 Months Ended | 12 Months Ended | |
Dec. 31, 2018 | Oct. 31, 2018 | Oct. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Tax (benefit) at federal statutory rate, amount | $ (3,867) | $ (22,325) | $ (44,283) |
State income taxes, net of federal income taxes, amount | (254) | (475) | (304) |
Effect of warrant liability, amount | (1,120) | (74) | |
Effect of other permanent items, amount | 5 | 30 | (82) |
Effect of Acquisition of intangible assets, amount | 35,595 | ||
Effect of stock compensation, amount | 27 | 3,147 | |
Change in valuation allowance, amount | 3,991 | 12,036 | 2,983 |
Reduction of NOL's due to Section 382 Limitations, amount | 11,552 | 3,018 | |
Other, amount | 98 | ||
Income taxes, amount | $ (302) | ||
Tax (benefit) at federal statutory rate, percent of pre tax income | 21.00% | 34.00% | 34.00% |
State income taxes, net of federal income taxes, percent of pre tax income | 1.00% | (1.00%) | 0.00% |
Effect of warrant liability, percent of pre tax income | 0.00% | 2.00% | 0.00% |
Effect of other permanent items, percent of pre tax income | 0.00% | 0.00% | 0.00% |
Effect of Acquisition of intangible assets, percent of pre tax income | 0.00% | 0.00% | (27.00%) |
Effect of stock compensation, percent of pre tax income | 0.00% | 0.00% | (3.00%) |
Change in valuation allowance, percent of pre tax income | (22.00%) | (18.00%) | (2.00%) |
Reduction of NOL's due to Section 382 Limitations, percent of pre tax income | 0.00% | (17.00%) | (2.00%) |
Other, percent of pre tax income | 0.00% | 0.00% | 0.00% |
Income taxes, percent of pre tax income | 0.00% | 0.00% | 0.00% |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Oct. 31, 2018 | Oct. 31, 2017 |
Income Tax Disclosure [Abstract] | |||
Impairment of development costs | $ 7 | ||
Depreciation and amortization | (533) | (546) | 95 |
Compensation expense not deductible until options are exercised | 12,543 | 10,529 | 4,553 |
All other temporary differences | 236 | 382 | 248 |
Net operating loss carry forward | 10,526 | 8,455 | 3,158 |
Less valuation allowance | (22,772) | (18,827) | (8,054) |
Deferred tax asset (liability) |
Loss Per Share - Schedule of An
Loss Per Share - Schedule of Anti-dilutive Potential Shares Outstanding Activity (Details) - shares | 2 Months Ended | 12 Months Ended | |
Dec. 31, 2018 | Oct. 31, 2018 | Oct. 31, 2017 | |
Shares Issuable Upon Conversion of Preferred Stock [Member] | |||
Antidilutive shares | 9,307,904 | ||
Shares Issuable Upon Exercise of Warrants [Member] | |||
Antidilutive shares | 322,727 | ||
Shares Issuable Upon Exercise of Stock Options [Member] | |||
Antidilutive shares | 6,499,885 | 6,080,505 | 3,818,530 |
Non-vested Shares Under Restricted Stock Grants [Member] | |||
Antidilutive shares | 651,110 | 673,960 | 227,132 |
Commitments and Contingencies_2
Commitments and Contingencies (Details Narrative) - USD ($) $ in Thousands | Feb. 26, 2015 | Dec. 31, 2018 | Oct. 31, 2018 | Oct. 31, 2017 |
Commitments and Contingencies Disclosure [Abstract] | ||||
Litigation damages sought | $ 1,300 | |||
Operating lease expiration date | Nov. 30, 2022 | |||
Lease payments | $ 535 | |||
Rent expense | $ 357 | $ 1,400 | $ 222 |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Future Minimum Lease Payments for Operating and Capital Lease (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Operating leases, Year ended December 31, 2019 | $ 1,895 |
Operating leases, Year ended December 31, 2020 | 1,819 |
Operating leases, Year ended December 31, 2021 | 1,455 |
Operating leases, Year ended December 31, 2022 | 1,216 |
Operating leases, total | 6,385 |
Capital leases, Year ended December 31, 2019 | 66 |
Capital leases, Year ended December 31, 2020 | 58 |
Capital leases, Year ended December 31, 2021 | 55 |
Capital leases, Year ended December 31, 2022 | 28 |
Capital leases, total | $ 207 |
Certain Relationships and Rel_2
Certain Relationships and Related Transactions (Details Narrative) | 1 Months Ended | 2 Months Ended | 12 Months Ended | ||
Oct. 31, 2018USD ($)a | Aug. 31, 2018USD ($) | Dec. 31, 2018USD ($)a | Oct. 31, 2018USD ($)a | Oct. 31, 2017USD ($) | |
Lease rental square feet | a | 3,275 | ||||
Annual lease rate | $ 357,000 | $ 1,400,000 | $ 222,000 | ||
Monthly lease payment | 16,377 | ||||
Annual lease payment to lessor | 361,680 | ||||
Sublease income | 21,000 | ||||
Due from related party | |||||
Cohen LLC [Member] | |||||
Lease rental square feet | a | 1,220 | ||||
Operating leases, description | Under the terms of the sublease Cohen LLC can add this additional space to the 1,220 square feet occupied, which would bring the total space occupied by us and Cohen LLC to 6,028 square feet. Because a portion of the additional space subleased to Cohen LLC is less private and attractive, the Company agreed to reduce the overall annual lease rate for the Cohen LLC space to $58.60 per square foot, which means the Company will be paying an annual lease rate for the space the Company uses of $62.70. | ||||
Pro rata basis of rent amount | $ 6,103 | ||||
Additional square feet of office space | a | 2,753 | ||||
Annual lease payment to lessor | $ 232,830 | ||||
Three Offices and Two Work Stations [Member] | |||||
Lease rental square feet | a | 2,055 | ||||
David Seaburg [Member] | |||||
Compensation arrangement with Director | Mr. Seaburg pursuant to which he will provide investor relations and other services to the Company over a period of two years for a fee consisting of (i) quarter-annual cash payment of $10,000, (ii) 60,000 restricted stock units issued under the Company equity incentive plan that vest in four equal installments every six months during the term of the agreement subject to continued service, and (iii) an annual award under the Company equity incentive plan of options exercisable over a term of 10 years to purchase common stock in number equal to the number of shares of common stock with a value of $150,000 at the time of the award based on a Black-Scholes calculation. As of the year ended October 31, 2018, the Company has made no payments to Mr. Seaburg for consulting services. | ||||
Compensation expense | $ 1,700,000 | $ 233,000 | $ 324,000 | ||
Office Lease [Member] | |||||
Lease rental square feet | a | 7,250 | 7,250 | |||
Lease term | 3 years | 3 years | |||
Annual lease rate | $ 60,000 | ||||
Operating leases, description | Initially the Company will occupy and pay for only 3,275 square feet of space, and the Company is not obligated under the lease to pay for the remaining 3,975 square feet covered by the lease unless we elect to occupy that additional space. Comparable annual lease rates for similar office space in the area range between $67 and $110 per square foot. | ||||
Office Lease [Member] | Minimum [Member] | |||||
Annual lease rate | $ 67,000 | ||||
Office Lease [Member] | Maximum [Member] | |||||
Annual lease rate | $ 110,000 |
Discontinued Operations - Sched
Discontinued Operations - Schedule of Assets and Liabilities of Discontinued Operations (Details) - USD ($) $ in Thousands | 2 Months Ended | 12 Months Ended | |
Dec. 31, 2018 | Oct. 31, 2018 | Oct. 31, 2017 | |
Loss from discontinued operations | $ (349) | ||
Gain on sale of discontinued operations | 100 | ||
Net cash provided by discontinued operating activities | 33 | ||
Net cash provided by discontinued investing activities | 10 | 60 | 25 |
Majesco Entertainment Company [Member] | |||
Revenues | 558 | ||
Expenses | 1,007 | ||
Loss from discontinued operations | (449) | ||
Gain on sale of discontinued operations | 100 | ||
Net loss from discontinued operations | (349) | ||
Depreciation and amortization | 11 | ||
Stock based compensation expense | 1,118 | ||
Amortization of capitalized software development costs and license fees | 50 | ||
Gain on sale of Majesco Sub | (100) | ||
Accounts receivable | 113 | ||
Accounts payable and accrued expenses | (810) | ||
Net cash provided by discontinued operating activities | 33 | ||
Cash received from sale of Majesco Sub | 10 | 60 | 25 |
Net cash provided by discontinued investing activities | $ 10 | $ 60 | $ 25 |
Segment Reporting (Details Narr
Segment Reporting (Details Narrative) - Segment | 2 Months Ended | 12 Months Ended |
Dec. 31, 2018 | Oct. 31, 2018 | |
Segment Reporting [Abstract] | ||
Number of operating segment | 2 | 2 |
Segment Reporting - Schedule of
Segment Reporting - Schedule of Segment Information (Details) - USD ($) $ in Thousands | 2 Months Ended | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Oct. 31, 2018 | Oct. 31, 2017 | |
Total net revenues | $ 673 | $ 13 | $ 1,563 | |
Total net loss | (18,418) | $ (10,915) | (65,441) | (130,829) |
Total assets | 80,166 | 87,842 | 20,152 | |
Regenerative Medicine [Member] | ||||
Total net revenues | 210 | 689 | ||
Total net loss | (18,352) | (65,219) | (130,480) | |
Total assets | 74,795 | 82,512 | 20,152 | |
Contract Services [Member] | ||||
Total net revenues | 463 | 874 | ||
Total net loss | (66) | (222) | ||
Total assets | 5,371 | 5,330 | ||
Discontinued Operations [Member] | ||||
Total net loss | (349) | |||
Total assets |
Transition Period Comparative_3
Transition Period Comparative Financials (Unaudited) - Schedule of Transition Period Comparative Financials (Details) - USD ($) $ / shares in Units, $ in Thousands | 2 Months Ended | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Oct. 31, 2018 | Oct. 31, 2017 | |
Transition Period Comparative Financials | ||||
Net revenues | $ 673 | $ 13 | $ 1,563 | |
Cost of sales | 381 | 1 | 1,002 | |
Gross profit | 292 | 12 | 561 | |
Product research and development | 3,458 | 4,930 | 19,376 | 7,107 |
General and administrative | 12,639 | 7,979 | 48,252 | 18,812 |
Total operating costs and expenses | 18,822 | 12,909 | 69,993 | 130,612 |
Operating loss | (18,530) | (12,897) | (69,432) | (130,612) |
Interest income | 80 | 18 | 395 | 23 |
Change in fair value of derivatives | 1,964 | 3,814 | 109 | |
Net loss | (18,418) | (10,915) | (65,441) | (130,829) |
Deemed dividend - accretion of discount on Series F preferred stock | (593) | (1,290) | (369) | |
Deemed dividend - exchange of Series F preferred stock | (182) | (7,057) | ||
Net loss attributable to common stockholders | $ (18,418) | $ (11,690) | $ (74,161) | $ (131,322) |
Net loss | $ (0.86) | $ (1.68) | $ (4.29) | $ (26.57) |
Deemed dividend - accretion of discount on Series F preferred stock | (0.09) | (0.09) | (0.07) | |
Deemed dividend - exchange of Series F preferred stock | (0.03) | (0.46) | ||
Net loss attributable to common stockholders | $ (0.86) | $ (1.80) | $ (4.86) | $ (26.67) |
Weighted average shares outstanding, basic and diluted: | 21,343,446 | 6,496,841 | 15,259,731 | 4,923,327 |