Document And Entity Information
Document And Entity Information - shares | 6 Months Ended | |
Jan. 31, 2023 | Mar. 17, 2023 | |
Document Information Line Items | ||
Entity Registrant Name | ENZO BIOCHEM, INC. | |
Trading Symbol | ENZ | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --07-31 | |
Entity Common Stock, Shares Outstanding | 49,662,821 | |
Amendment Flag | false | |
Entity Central Index Key | 0000316253 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Document Period End Date | Jan. 31, 2023 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 001-09974 | |
Entity Tax Identification Number | 13-2866202 | |
Entity Address, Address Line One | 81 Executive Blvd | |
Entity Address, Address Line Two | Suite 3 Farmingdale | |
Entity Incorporation, State or Country Code | NY | |
Entity Address, City or Town | New York | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 11735 | |
Local Phone Number | 583-0100 | |
City Area Code | 212 | |
Entity Interactive Data Current | Yes | |
Title of 12(b) Security | Common stock $0.01 par | |
Security Exchange Name | NYSE |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Jan. 31, 2023 | Jul. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 5,054 | $ 21,603 |
Accounts receivable, net | 10,866 | 11,516 |
Inventories, net | 15,723 | 15,411 |
Prepaid expenses and other current assets | 4,738 | 5,824 |
Total current assets | 36,381 | 54,354 |
Property, plant, and equipment, net | 17,425 | 17,259 |
Right-of-use assets, net | 13,569 | 15,174 |
Goodwill | 7,452 | 7,452 |
Other, including restricted cash of $1,000 at January 31, 2023 and July 21, 2022 | 1,625 | 1,618 |
Total assets | 76,452 | 95,857 |
Current liabilities: | ||
Accounts payable – trade | 13,189 | 8,508 |
Accrued liabilities | 11,590 | 12,300 |
Current portion of operating lease liabilities | 3,425 | 3,432 |
Mortgage debt | 3,684 | |
Other current liabilities and finance leases short term | 313 | 310 |
Total current liabilities | 32,201 | 24,550 |
Other liabilities and finance leases long term | 39 | |
Operating lease liabilities, non-current, net | 11,132 | 12,729 |
Long term debt, net | 289 | 4,077 |
Total liabilities | 43,622 | 41,395 |
Contingencies – see Note 12 | ||
Stockholders’ equity: | ||
Preferred Stock, $.01 par value; authorized 25,000,000 shares; no shares issued or outstanding | ||
Common Stock, $.01 par value; authorized 75,000,000 shares; shares issued and outstanding: 48,733,054 at January 31, 2023 and 48,720,454 at July 31, 2022 | 487 | 487 |
Additional paid-in capital | 340,407 | 339,462 |
Accumulated deficit | (310,593) | (288,638) |
Accumulated other comprehensive income | 2,529 | 3,151 |
Total stockholders’ equity | 32,830 | 54,462 |
Total liabilities and stockholders’ equity | $ 76,452 | $ 95,857 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (Unaudited) (Parentheticals) - USD ($) $ in Thousands | Jan. 31, 2023 | Jul. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Other, including restricted cash (in Dollars) | $ 1,000 | $ 1,000 |
Preferred stock par value (in Dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 25,000,000 | 25,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value (in Dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 75,000,000 | 75,000,000 |
Common stock, shares issued | 48,733,054 | 48,720,454 |
Common stock, shares outstanding | 48,733,054 | 48,720,454 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jan. 31, 2023 | Jan. 31, 2022 | Jan. 31, 2023 | Jan. 31, 2022 | |
Income Statement [Abstract] | ||||
Revenues | $ 16,338 | $ 34,046 | $ 34,614 | $ 60,565 |
Operating costs and expenses: | ||||
Cost of revenues | 15,079 | 17,838 | 29,750 | 33,111 |
Research and development | 1,431 | 820 | 2,427 | 1,564 |
Selling, general and administrative | 11,812 | 14,466 | 23,263 | 25,518 |
Legal and related expense, net | 995 | 2,845 | 2,066 | 4,127 |
Total operating costs and expenses | 29,317 | 35,969 | 57,506 | 64,320 |
Operating loss | (12,979) | (1,923) | (22,892) | (3,755) |
Other income (expense): | ||||
Interest, net | 62 | 68 | 132 | 107 |
Other | 125 | (350) | 130 | (495) |
Foreign exchange (loss) gain | 1,472 | (450) | 675 | (831) |
Total other income (expense) | 1,659 | (732) | 937 | (1,219) |
Loss before income taxes | (11,320) | (2,655) | (21,955) | (4,974) |
Income taxes | ||||
Net loss | $ (11,320) | $ (2,655) | $ (21,955) | $ (4,974) |
Net loss per common share: | ||||
Basic and diluted (in Dollars per share) | $ (0.23) | $ (0.05) | $ (0.45) | $ (0.1) |
Weighted average common shares outstanding: | ||||
Basic and diluted (in Shares) | 48,729 | 48,472 | 48,725 | 48,472 |
Consolidated Statements of Op_2
Consolidated Statements of Operations (Unaudited) (Parentheticals) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Jan. 31, 2023 | Jan. 31, 2022 | Jan. 31, 2023 | Jan. 31, 2022 | |
Income Statement [Abstract] | ||||
Basic and diluted (in Dollars per share) | $ (0.23) | $ (0.05) | $ (0.45) | $ (0.10) |
Basic and diluted (in Shares) | 48,729 | 48,472 | 48,725 | 48,472 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jan. 31, 2023 | Jan. 31, 2022 | Jan. 31, 2023 | Jan. 31, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (11,320) | $ (2,655) | $ (21,955) | $ (4,974) |
Other comprehensive (loss) income: | ||||
Foreign currency translation adjustments | (1,355) | 342 | (622) | 619 |
Comprehensive loss | $ (12,675) | $ (2,313) | $ (22,577) | $ (4,355) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders’ Equity (Unaudited) - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income | Total |
Balance at Jul. 31, 2021 | $ 485 | $ 337,126 | $ (270,377) | $ 1,352 | $ 68,586 |
Balance (in Shares) at Jul. 31, 2021 | 48,471,771 | ||||
Net loss for the period | (4,974) | (4,974) | |||
Share-based compensation charges | 895 | 895 | |||
Foreign currency translation adjustments | 619 | 619 | |||
Balance at Jan. 31, 2022 | $ 485 | 338,021 | (275,351) | 1,971 | 65,126 |
Balance (in Shares) at Jan. 31, 2022 | 48,471,771 | ||||
Balance at Oct. 31, 2021 | $ 485 | 337,342 | (272,696) | 1,629 | 66,760 |
Balance (in Shares) at Oct. 31, 2021 | 48,471,771 | ||||
Net loss for the period | (2,655) | (2,655) | |||
Share-based compensation charges | 679 | 679 | |||
Foreign currency translation adjustments | 342 | 342 | |||
Balance at Jan. 31, 2022 | $ 485 | 338,021 | (275,351) | 1,971 | 65,126 |
Balance (in Shares) at Jan. 31, 2022 | 48,471,771 | ||||
Balance at Jul. 31, 2022 | $ 487 | 339,462 | (288,638) | 3,151 | 54,462 |
Balance (in Shares) at Jul. 31, 2022 | 48,720,454 | ||||
Net loss for the period | (21,955) | (21,955) | |||
Share-based compensation charges | 945 | 945 | |||
Vesting of performance stock units | |||||
Vesting of performance stock units (in Shares) | 12,600 | ||||
Foreign currency translation adjustments | (622) | (622) | |||
Balance at Jan. 31, 2023 | $ 487 | 340,407 | (310,593) | 2,529 | 32,830 |
Balance (in Shares) at Jan. 31, 2023 | 48,733,054 | ||||
Balance at Oct. 31, 2022 | $ 487 | 339,892 | (299,273) | 3,884 | 44,990 |
Balance (in Shares) at Oct. 31, 2022 | 48,720,454 | ||||
Net loss for the period | (11,320) | (11,320) | |||
Share-based compensation charges | 515 | 515 | |||
Vesting of performance stock units | |||||
Vesting of performance stock units (in Shares) | 12,600 | ||||
Foreign currency translation adjustments | (1,355) | (1,355) | |||
Balance at Jan. 31, 2023 | $ 487 | $ 340,407 | $ (310,593) | $ 2,529 | $ 32,830 |
Balance (in Shares) at Jan. 31, 2023 | 48,733,054 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jan. 31, 2023 | Jan. 31, 2022 | |
Cash flows from operating activities: | ||
Net loss | $ (21,955) | $ (4,974) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization of property, plant and equipment | 1,428 | 1,253 |
Amortization of intangible assets | 153 | |
Share-based compensation charges | 945 | 895 |
Share-based 401(k) employer match expense | 396 | 358 |
Foreign exchange (gain) loss | (707) | 773 |
Unrealized loss on marketable securities | 553 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | 653 | (5,127) |
Inventories | (310) | (1,211) |
Prepaid expenses and other assets | 1,080 | 743 |
Accounts payable – trade | 4,678 | (1,272) |
Accrued liabilities, other current liabilities and other liabilities | (1,099) | 1,183 |
Total adjustments | 7,064 | (1,699) |
Net cash used in operating activities | (14,891) | (6,673) |
Cash flows from investing activities: | ||
Purchases of marketable securities | (55) | |
Capital expenditures | (1,521) | (2,247) |
Net cash used in investing activities | (1,521) | (2,302) |
Cash flows from financing activities: | ||
Repayments under mortgage agreement and finance leases | (157) | (114) |
Net cash used in financing activities | (157) | (114) |
Effect of exchange rate changes on cash and cash equivalents | 20 | (26) |
Decrease in cash and cash equivalents and restricted cash | (16,549) | (9,115) |
Cash and cash equivalents and restricted cash - beginning of period | 22,603 | 14,274 |
Total cash and cash equivalents and restricted cash - end of period | 6,054 | 5,159 |
The composition of total cash and cash equivalents and restricted cash is as follows: | ||
Cash and cash equivalents | 5,054 | 4,159 |
Restricted cash included in other assets | 1,000 | 1,000 |
Total cash and cash equivalents and restricted cash | $ 6,054 | $ 5,159 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jan. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Note 1 – Basis of Presentation The accompanying consolidated financial statements include the accounts of Enzo Biochem, Inc. and its wholly-owned subsidiaries, Enzo Life Sciences, Enzo Clinical Labs, Enzo Therapeutics, Enzo Realty LLC and Enzo Realty II LLC, collectively or with one or more of its subsidiaries referred to as the “Company” or “Companies”. The Company has two reportable segments: Clinical Services and Products. The consolidated balance sheet as of January 31, 2023, the consolidated statements of operations, comprehensive loss and stockholders’ equity for the three and six months ended January 31, 2023 and 2022, and the consolidated statements of cash flows for the six months ended January 31, 2023 and 2022 (the “interim statements”) are unaudited. In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present fairly the financial position and operating results for the interim periods have been made. Certain information and footnote disclosure, normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), have been condensed or omitted. The interim statements should be read in conjunction with the consolidated financial statements for the year ended July 31, 2022 and notes thereto contained in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission. The consolidated balance sheet at July 31, 2022 has been derived from the audited financial statements at that date. The results of operations for the three and six months ended January 31, 2023 are not necessarily indicative of the results that may be expected for the fiscal year ending July 31, 2023. Change in segment reporting Historically, we engaged in the research and development of therapeutic candidates through Enzo Therapeutics, a biopharmaceutical venture that was developing multiple novel approaches in the areas of gastrointestinal, infectious, ophthalmic and metabolic diseases, many of which were derived from the researching work of Enzo Life Sciences. Enzo Therapeutics focused its efforts on researching treatment regimens for diseases and conditions for which treatment options were ineffective, costly, and/or caused unwanted side effects. This focus generated a clinical and preclinical pipeline, as well as numerous patents and patent applications with Enzo Therapeutics as the assignee. At the beginning of fiscal 2023, we determined we would redirect our research resources and efforts to our two operating segments, Enzo Life Sciences and Enzo Clinical Labs, and no longer consider Enzo Therapeutics a segment. The operating results of Enzo Therapeutics are now included in the “Other” segment. The prior period segment information for the three and six months ended January 31, 2022 reported in Note 11 has been restated to be included in the “Other” segment. The operating expenses of Enzo Therapeutics for the three and six months ended January 31, 2023 now included in the “Other” segment were $12 and $21, respectively. The operating expenses of Enzo Therapeutics for the three and six months ended January 31, 2022 now included in the “Other” segment were $20 and $25, respectively. Liquidity and Going Concern During the six months ended January 31, 2023, the Company incurred a net loss of $21,955 and used cash in operating activities of $14,891. The Company believes that based on its fiscal 2023 forecast, its current cash and cash equivalents level is not sufficient for its foreseeable liquidity and capital resource needs over at least the next twelve (12) months, which conditions raise substantial doubt about the Company’s ability to continue as a going concern for one year after the date that the unaudited interim financial statements are issued. In response to these conditions, the Company is evaluating various financing strategies to obtain sufficient additional liquidity to meet its operating and capital requirements for the next twelve months following the date of issuance of these unaudited interim consolidated financial statements. Specifically, on March 10, 2023, the Company signed a commitment letter providing for up to $8,000 of a revolving line of credit subject to closing, and as previously disclosed is exploring various strategic alternatives including the sale of segment operating assets. On March 16, 2023, the Company entered into an Asset Purchase Agreement with respect to the sale to Labcorp of substantially all the operating assets and assignment of certain liabilities which are necessary for Labcorp to operate the business of the Clinical Labs division. See Note 13 Subsequent Events. However, there can be no assurance that either of these capital raising strategies will be successful, and the Company may need to raise additional capital during the current fiscal year. The Company also believes it has the ability to raise additional funds, either through additional debt secured by real property owned, private debt, selling preferred stock, reactivating its Sales Agreement with Cantor, or through other sources, but there can be no assurances that the Company will be able to raise capital pursuant to the foregoing on favorable terms or at all. The Registration Statement on Form S-3 filed in connection with the Sales Agreement expired in October 2020 but a new Registration Statement could be filed at any time at the discretion of the Company, as disclosed in Note 10 in the Notes to the Consolidated Financial Statements. Our liquidity plans are subject to a number of risks and uncertainties, some of which are outside our control. Macroeconomic conditions could limit our ability to successfully execute our business plans and therefore adversely affect our liquidity plans. The unaudited interim financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern. Revolving Line of Credit commitment On March 10, 2023, the Company entered into a commitment for a one-year credit facility with an asset based lender specializing in direct lending to middle-market companies in the healthcare sector. The facility is an $8 million revolving line of credit based on the Company’s eligible accounts receivable. The annual interest rate is equal to the 90 day term SOFR rate plus 5.5%. The line of credit would terminate one year from closing and unused line fees and early prepayment penalties apply. Closing and initial funding are conditioned on the absence of any material adverse change in the operations or financial condition of the Company prior to the closing date. The Company and the lender are using their best efforts to close on the line of credit as soon as possible. The expected closing time period is the end of March 2023. Impact of COVID-19 We made substantial investments to expand and maintain the amount of COVID-19 testing available in the communities we serve since the start of the pandemic in March 2020. We applied our technical expertise in molecular diagnostics to develop next generation COVID-19 diagnostic and antibody testing options which were approved under the FDA Emergency Use Authorization (EUA). During the fiscal year ended July 31, 2022, the Company generated substantial COVID-19 related services revenues, representing 44% of all services revenues. This testing had a significantly positive impact on the profitability and cash flow of our Clinical services segment for most of fiscal 2022. Revenues from COVID-19 testing during the three and six months ended January 31, 2022 represented 56% and 52%, respectively of all services revenues. The rate of transmission of COVID-19 and the severity of its variants have dramatically declined in the US. Revenues from COVID-19 testing during the three and six months ended January 31, 2023 represented approximately 4% and 6%, respectively, of all services revenues. In March 2022, the U.S. Health Resources and Services Administration (“HRSA”) informed providers that, after March 22, 2022, it would stop accepting claims for testing and treatment for uninsured individuals under the HRSA COVID-19 Uninsured Program and that claims submitted prior to that date would be subject to eligibility and availability of funds. Although we believe that our estimates for contractual allowances and patient price concessions are appropriate, actual results could differ from those estimates. If the HRSA receives additional funding, it might again accept claims under the Uninsured Program. Federal, state and local governmental policies and initiatives designed to reduce the transmission of COVID-19 resulted in, among other things, a significant reduction in physician office visits, the cancellation of elective medical procedures, and the continuation of work-from-home policies. The COVID-19 impact on the Company’s operations is consistent with the overall industry and our competitors, partners, and vendors. While we anticipate that COVID-19 will continue to impact our business into the future, increases in vaccination rates and booster shots, the development of new therapeutics and greater availability of rapid COVID-19 tests has resulted in a continued, significant decline in demand for our COVID-19 testing. As a result, volume, revenues, profitability, and cash flow from COVID-19 testing during the current periods were all substantially and materially lower than the prior year period levels. COVID-19 testing is no longer a material part of our Services business. We expect volume and revenues from COVID-19 testing will remain less significant in the periods ahead as the percentage of Americans who are vaccinated increases, the severity of its variants declines, and the general increase in the use of “at home” testing. However, the emergence and spread of potentially more serious variants may cause our COVID-19 testing volume to increase again. With respect to our non-COVID-19 operations, even after the COVID-19 pandemic impact has greatly moderated, we may continue to experience similar adverse effects to our businesses, consolidated results of operations, financial position and cash flows resulting from a recessionary economic environment, including inflation and actions by the Federal Reserve to increase interest rates. The Company assessed certain accounting matters that generally require consideration of forecasted financial information in context with the information reasonably available to the Company and the unknown future impacts of COVID-19 and the recessionary economic environment, including inflation and actions by the Federal Reserve to increase interest rates as of January 31, 2023 and through the date of this Quarterly Report. The accounting matters assessed included, but were not limited to, the Company’s patient self-pay revenue concessions and credit losses in the Clinical Services segment, accounts receivable, inventories and the carrying value of goodwill and other long-lived assets. The Company’s future assessment of the magnitude and duration of COVID-19, as well as other economic factors, could result in additional material adverse impacts to the Company’s consolidated financial statements in future reporting periods. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Effect of New Accounting Pronouncements Pronouncements Issued but Not Yet Adopted In June 2016, FASB issued ASU No. 2016-13 Financial Instruments – Credit Losses (Topic 326). This standard changes the impairment model for most financial instruments, including trade receivables, from an incurred loss method to a new forward-looking approach, based on expected losses. The estimate of expected credit losses will require entities to incorporate considerations of historical information, current information and reasonable and supportable forecasts. Adoption of this standard is required for our annual and interim periods beginning August 1, 2023, as we qualified as a smaller reporting company at the end of fiscal 2022 and must be adopted using a modified retrospective transition approach. We are currently assessing the impact of the adoption of this standard on our results of operations, financial position and cash flows. We reviewed all other recently issued accounting pronouncements and have concluded they are not applicable or not expected to be significant to the accounting for our operations. Concentration Risk Other than the Medicare program, one provider whose programs are included in the “Third-party payers” and “Health Maintenance Organizations” (“HMO’s”) categories represents approximately 16% and 17% of Clinical Services net revenue for the three and six months ended January 31, 2023, respectively and 16% of the Clinical Services net accounts receivable as of January 31, 2023. Other than the Medicare program, two providers whose programs are included in the “Third-party payers” and “Health Maintenance Organizations” (“HMO’s”) categories represent approximately 36% and 35% of Clinical Services net revenue for the three and six months ended January 31, 2022, respectively. Income Taxes The Company accounts for income taxes under the liability method of accounting for income taxes. Under the liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. The liability method requires that any tax benefits recognized for net operating loss carry forwards and other items be reduced by a valuation allowance when it is more likely than not that the benefits may not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under the liability method, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. |
Net income (loss) per share
Net income (loss) per share | 6 Months Ended |
Jan. 31, 2023 | |
Earnings Per Share [Abstract] | |
Net income (loss) per share | Note 2 – Net income (loss) per share Basic net income (loss) per share represents net income (loss) divided by the weighted average number of common shares outstanding during the period. As a result of the net loss for the three and six months ended January 31, 2023 and 2022, diluted weighted average shares outstanding are the same as basic weighted average shares outstanding, and do not include the potential common shares from stock options, restricted stock units, or unearned performance stock units because to do so would be antidilutive. For the three and six months ended January 31, 2023, approximately 60,000 and 83,000, respectively, of potential common shares from “in the money options” and unvested restricted stock and performance stock units were excluded from the calculation of diluted (loss) per share because their effect would be antidilutive. For the three and six months ended January 31, 2022, approximately 499,000 and 527,000, respectively, of potential common shares from “in the money options” and unvested performance stock units were excluded from the calculation of diluted (loss) per share because their effect would be antidilutive. For the three and six months ended January 31, 2023, the effect of approximately 4,189,000 and 3,392,000, respectively, of outstanding “out of the money” options to purchase common shares were excluded from the calculation of diluted net (loss) income per share because their effect would be anti-dilutive. For the three and six months ended January 31, 2022, the effect of 1,091,000 and 942,000, respectively, of outstanding “out of the money” options to purchase common shares were excluded from the calculation of diluted net (loss) income per share because their effect would be anti-dilutive. |
Revenue Recognition
Revenue Recognition | 6 Months Ended |
Jan. 31, 2023 | |
Revenue Recognition [Abstract] | |
Revenue Recognition | Note 3 – Revenue Recognition Clinical Services Revenue The Company accounts for revenue pursuant to Accounting Standards Codification Topic 606. Service revenues in the Company’s clinical services business accounted for 54% and 70% of the Company’s total revenues for three months ended January 31, 2023 and 2022, respectively and 58% and 72% for the six months ended January 31, 2023 and 2022, respectively and are primarily comprised of a high volume of relatively low-dollar transactions. The services business, which provides clinical testing services, satisfies its performance obligation and recognizes revenues upon completion of the testing process for a specific patient and reporting to the ordering physician. The Company may also perform clinical testing services for other laboratories and will recognize revenue from those services when reported to the ordering laboratory. The Company estimates the amount of consideration it expects to receive from customer groups using the portfolio approach. These estimates of the expected consideration include the impact of contractual allowances and price concessions on our customer group portfolios consisting of healthcare insurers, government payers, client payers and patients as described below. Contracts with customers in our laboratory services business do not contain a financing component, based on the typically limited period of time between performance of services and collection of consideration. The transaction price includes variable consideration in the form of the contractual allowance and price concessions as well as the collectability of the transaction based on patient intent and ability to pay. The Company uses the expected value method in estimating the amount of the variability included in the transaction price. The following are descriptions of our laboratory services business portfolios: Third party payers and Health Maintenance Organizations (HMO’s) Reimbursements from third party payers, primarily healthcare insurers and HMO’s are based on negotiated fee-for-service schedules and on capitated payment rates. Revenues consist of amounts billed net of contractual allowances for differences between amounts billed and the estimated consideration the Company expects to receive from such payers, which considers historical collection and denial experience and the terms of the Company’s contractual arrangements. Adjustments to the allowances, based on actual receipts from the third-party payers, are recorded upon settlement. Collection of the consideration the Company expects to receive is normally a function of providing complete and correct billing information to these third party payers within the various filing deadlines, and typically occurs within 30 to 90 days of billing. Provided the Company has billed healthcare insurers accurately with complete information prior to the established filing deadline, there has historically been little to no collection risk. If there has been a delay in billing, the Company determines if the amounts in question will likely go past the filing deadline, and if so, will reserve accordingly for the billing. Third-party payers, including government programs, may decide to deny payment or recoup payments for testing that they contend was improperly billed or not medically necessary, against their coverage determinations, or for which they believe they have otherwise overpaid (including as a result of their own error), and we may be required to refund payments already received. Our revenues may be subject to adjustment as a result of these factors among others, including without limitation, differing interpretations of billing and coding guidance and changes by government agencies and payers in interpretations, requirements, and “conditions of participation” in various programs. Government Payer - Medicare Reimbursements from Medicare are based on fee-for-service schedules set by Medicare, which is funded by the government. Revenues consist of amounts billed net of contractual allowances for differences between amounts billed and the estimated consideration the Company expects to receive from Medicare, which considers historical collection and denial experience and other factors. Adjustments to the allowances, based on actual receipts from the government payers, are recorded upon settlement. Collection of consideration the Company expects to receive is normally a function of providing the complete and correct billing information within the various filing deadlines and typically occurs within 60 days of billing. Provided the Company has billed the government payer accurately with complete information prior to the established filing deadline, there has historically been little to no collection risk. If there has been a delay in billing, the Company determines if the amounts in question will likely go past the filing deadline, and, if so, it will reserve accordingly for the billing. Patient self-pay Uninsured patients are billed based on established patient fee schedules or fees negotiated with physicians on behalf of their patients. Coinsurance and deductible responsibilities based on fees negotiated with healthcare insurers are also billed to insured patients and included in this portfolio. Collection of billings from patients is subject to credit risk and ability of the patients to pay. Revenues consist of amounts billed net of discounts provided to uninsured patients in accordance with the Company’s policies and implicit price concessions. Implicit price concessions represent differences between amounts billed and the estimated consideration the Company expects to receive from patients, which considers historical collection experience and other factors including current market conditions. Adjustments to the estimated allowances, based on actual receipts from the patients, are recorded upon settlement. Patient responsibility is invoiced and if it reaches 91 days outstanding, the account is sent to a collection agency for further processing. After the account has been with the collection agency for at least 105 days, it is written off. The following table represents clinical services net revenues and percentages by type of customer: Three months ended Three months ended Revenue category Third-party payer $ 5,163 58 % $ 14,256 60 % Medicare 1,374 16 2,784 12 Patient self-pay 974 11 2,605 11 HMOs 1,313 15 4,029 17 Total $ 8,824 100 % $ 23,674 100 % Six months ended Six months ended Revenue category Third-party payer $ 11,186 56 % $ 26,145 60 % Medicare 3,670 18 5,514 13 Patient self-pay 2,212 11 4,550 10 HMOs 2,929 15 7,206 17 Total $ 19,997 100 % $ 43,415 100 % For three and six months ended January 31, 2023 and 2022, all of the Company’s clinical services revenues were generated within the United States. Products Revenue In accordance with ASC 606, the Company generates product revenue from the sale of our single-use products used in the identification of genomic information. Revenue is recorded net of sales tax. The Company considers revenue to be earned when all of the following criteria are met: the Company has a contract with a customer that creates enforceable rights and obligations; promised products are identified; the transaction price is determinable; and the Company has transferred control of the promised items to the customer. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account in the contract. The transaction price for the contract is measured as the amount of consideration the Company expects to receive in exchange for the goods expected to be transferred. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, control of the distinct good or service is transferred. Transfer of control for the Company’s products is generally at shipment or delivery, depending on contractual terms, but occurs when title and risk of loss transfers to the customer which represents the point in time when the customer obtains the use of and substantially all of the remaining benefit of the product. As such, the Company’s performance obligation related to product sales is satisfied at a point in time. The Company recognizes a receivable when it has an unconditional right to payment, which represents the amount the Company expects to collect in a transaction and is most often equal to the transaction price in the contract. Payment terms for shipments to end-user and distributor customers may range from 30 to 90 days. Amounts billed to customers for shipping and handling are included in revenue, while the related shipping and handling costs are reflected in cost of products. Products revenue by geography is as follows: Three Months Ended January 31 Six Months Ended January 31 2023 2022 2023 2022 United States $ 4,144 $ 6,754 $ 8,239 $ 10,617 Europe 2,277 2,401 4,181 4,407 Asia Pacific 1,093 1,217 2,197 2,126 Products revenue $ 7,514 $ 10,372 $ 14,617 $ 17,150 |
Supplemental Disclosure for Sta
Supplemental Disclosure for Statement of Cash Flows | 6 Months Ended |
Jan. 31, 2023 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental disclosure for statement of cash flows | Note 4 - Supplemental disclosure for statement of cash flows In the six months ended January 31, 2023 and 2022, interest paid by the Company was $106 and $112, respectively. For the six months ended January 31, 2023 and 2022, the net reductions in the measurement of right of use assets and liabilities included in cash flows from operating activities was $2 and $20, respectively. The changes are included in changes in accrued liabilities, other current liabilities, and other liabilities in the statement of cash flows. For the six months ended January 31, 2023 and 2022, tax on capital paid by the Company was $9 and $116, respectively. |
Inventories
Inventories | 6 Months Ended |
Jan. 31, 2023 | |
Inventory Disclosure [Abstract] | |
Inventories | Note 5 – Inventories Inventories consist of the following: January 31, July 31, Raw materials $ 1,962 $ 1,524 Work in process 2,748 2,459 Finished products 11,013 11,428 $ 15,723 $ 15,411 |
Goodwill and Long-Lived Assets
Goodwill and Long-Lived Assets | 6 Months Ended |
Jan. 31, 2023 | |
Goodwill [Abstract] | |
Goodwill and Long-Lived Assets | Note 6 – Goodwill and Long-Lived Assets The Company’s carrying amount of goodwill is in the Clinical Laboratory Services segment and is $7,452 as of January 31, 2023 and July 31, 2022. The Company tests goodwill annually as of the first day of the fourth quarter, or more frequently if indicators of potential impairment exist. In assessing goodwill for impairment, the Company has the option to first perform a qualitative assessment to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the Company determines that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, the Company is not required to perform any additional tests in assessing goodwill for impairment. However, if the Company concludes otherwise or elects not to perform the qualitative assessment, then it will perform a quantitative assessment as it identifies the reporting units and compares the fair value of each of these reporting units to their respective carrying amount. If the carrying amount of the reporting unit is less than its fair value, no impairment exists. If the carrying amount of the reporting unit is higher than its fair value, the impairment charge is the amount by which the carrying amount exceeds its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. The Company reviews the recoverability of the carrying value of long-lived assets (including its intangible assets, all of which have finite lives) of an asset or asset group for impairment annually as of the end of the fiscal year, or more frequently if indicators of potential impairment exist. Should indicators of impairment exist, the carrying values of the assets are evaluated in relation to the operating performance and future undiscounted cash flows of an asset or asset group. The net book value of the long-lived asset is adjusted to fair value if its expected future undiscounted cash flow is less than its book value. The Company has determined that there is no impairment of goodwill or long-lived assets at January 31, 2023. |
Mortgage Debt and Long Term Deb
Mortgage Debt and Long Term Debt, Net | 6 Months Ended |
Jan. 31, 2023 | |
Debt Disclosure [Abstract] | |
Mortgage debt and Long term debt, net | Note 7 – Mortgage debt and Long term debt, net In connection with the purchase of a building in Farmingdale, NY in November 2018, a wholly-owned subsidiary (the “mortgagor subsidiary”) of the Company entered into a Fee Mortgage and Security Agreement (the “mortgage agreement”) with Citibank, N.A. (the “mortgagee”). The mortgage agreement provides for a loan of $4,500 for a term of 10 years, bears a fixed interest rate of 5.09% per annum and requires monthly mortgage payments of principal and interest of $30. Debt issuance costs of $72 are being amortized over the life of the mortgage agreement. The balance of unamortized debt issuance cost was $42 at January 31, 2023. At January 31, 2023, the balance owed by the subsidiary under the mortgage agreement was $3,902. The Company’s obligations under the mortgage agreement are secured by the building and by a $1,000 cash collateral deposit with the mortgagee as additional security. This restricted cash is included in other assets as of January 31, 2023. The mortgage agreement includes affirmative and negative covenants and events of default, as defined. Events of default include non-payment of principal and interest on debt outstanding, non-performance of covenants, material changes in business, breach of representations, bankruptcy or insolvency, and changes in control. The mortgage includes certain financial covenants. Effective October 2020, the Company and the mortgagee agreed to a covenant restructure whereby the mortgagee waived the Company’s financial ratio covenant for the fiscal period ended July 31, 2020 and modified the mortgage to replace that covenant with a liquidity covenant. The liquidity covenant requires that we own and maintain at all times and throughout the remaining term of the loan at least $25,000 of liquid assets, defined as time deposits, money market accounts and obligations issued by the U.S. government or any of its agencies. The cash collateral agreement was also modified to require compliance with the liquidity covenant for two consecutive fiscal years before the collateral is released back to us. Effective September 29, 2021, the Company and the mortgagee agreed to further covenant restructuring whereby (a) the liquidity covenant was reduced to 150% of the loan principal (or approximately $5,911 as of January 31, 2023) from $25,000 previously, and (b) the collateral requirement was increased from $750 to $1,000. As of January 31, 2023, the Company was not in compliance with the liquidity covenant, but was in compliance with the other financial covenants related to this mortgage. Effective March 20, 2023, the Company and the mortgagee agreed to a waiver of the liquidity covenant default as of January 31, 2023. While the Company believes it will be able to either achieve compliance or obtain further waivers going forward, as there can be no assurances, all of the mortgage debt has been classified as current in the consolidated balance sheet as of January 31, 2023. In April 2020, our subsidiary in Switzerland received a loan of CHF 400 (or $400, based on the foreign exchange rate at that time) from the Swiss government under the “Corona Krise” emergency loan program in response to the pandemic. This loan is uncollateralized and bears 0% interest. In January 2022, the bank agent of the Swiss government informed our subsidiary that the loan had to be fully amortized within a maximum of eight years and that the first of semi-annual amortization payments of CHF 33 would begin in March 2022. In September 2022, the subsidiary made its second semi-annual principal repayment of CHF 33 (or $35 based on exchange rates). Based on this amortization schedule, the loan will be repaid by September 2027. The current portion of this loan is included in other current liabilities and the long term portion in long term debt – net as of January 31, 2023. The CARES Act expanded the U.S. Small Business Administration’s (SBA) business loan program to create the Paycheck Protection Program (PPP), which provided employers with uncollateralized loans whose primary purpose was to retain or maintain workforce and salaries for a twenty-four week period (“covered period”) following receipt of the loan. We applied for the PPP loan based on the eligibility and need requirements established when the program was announced and in April 2020 received $7,000 through Citibank N.A., the Company’s existing lender, pursuant to the PPP (the “PPP Loan”). In June 2021, the SBA approved in full our request for loan forgiveness and in the fiscal year 2021 the Company recognized the forgiveness of the $7,000 loan in Other income. The SBA announced its intention to audit loans in excess of $2,000 and in June 2022 requested through Citibank N.A. the production of documents and information related to our loan and our request for forgiveness. We provided that information to the SBA via Citibank N.A. In October 2022 the SBA requested through Citibank N.A. that we complete a new version of their loan necessity questionnaire with respect our forgiven loan, which we provided. The SBA subsequently requested additional information with respect to wages paid which has been provided. Minimum future annual principal payments under these agreements as of January 31, 2023 are as follows: July 31, Total 2023 $ 118 2024 239 2025 249 2026 259 2027 269 Thereafter 3,117 Total principal payments 4,251 Less: current portion, included in other current liabilities and finance leases short term (236 ) unamortized mortgage cost (42 ) Mortgage debt - current and long term debt – net $ 3,973 |
Leases
Leases | 6 Months Ended |
Jan. 31, 2023 | |
Leases [Abstract] | |
Leases | Note 8 - Leases The Company determines if an arrangement is or contains a lease at contract inception. The Company leases buildings, office space, patient service centers, and equipment primarily through operating leases, and equipment through a limited number of finance leases. Generally, a right-of-use asset, representing the right to use the underlying asset during the lease term, and a lease liability, representing the payment obligation arising from the lease, are recognized on the balance sheet at lease commencement based on the present value of the payment obligation. For operating leases, expense is recognized on a straight-line basis over the lease term. For finance leases, interest expense on the lease liability is recognized using the effective interest method and amortization of the right-of-use asset is recognized on a straight-line basis over the lease term. Short-term leases with an initial term of 12 months or less are not recorded on the balance sheet; the Company recognizes lease expense for these leases on a straight-line basis over the lease term. The Company primarily uses its incremental borrowing rate in determining the present value of lease payments as the Company’s leases generally do not provide an implicit rate. The Company has lease agreements with (i) right-of-use asset payments and (ii) non-lease components (i.e. payments related to maintenance fees, utilities, etc.,) which have generally been combined and accounted for as a single lease component. The Company’s leases have remaining terms of less than 1 year to 6 years, some of which include options to extend the leases for up to 5 years. The Company’s lease terms may include renewal options that are reasonably certain to be exercised and early termination options that are reasonably certain not to be exercised. Certain of the Company’s lease agreements include rental payments adjusted periodically for inflation or a market rate which are included in the lease liabilities. Leases Balance Sheet Classification January 31, July 31, Assets Operating Right-of-use assets $ 13,569 $ 15,174 Finance Property, plant and equipment, net (a) 134 172 Total lease assets $ 13,703 $ 15,346 Liabilities Current: Operating Current portion of operating lease liabilities $ 3,425 $ 3,432 Finance Finance leases short term 78 81 Non-current: Operating Operating lease liabilities, non-current 11,132 12,729 Finance Other liabilities and finance leases long term — 39 Total lease liabilities $ 14,635 $ 16,281 (a) Accumulated amortization of finance lease assets was approximately $248 and $210 as of January 31, 2023 and July 31, 2022, respectively. Components of lease cost were as follows: Three months ended Six months ended 2023 2022 2023 2022 Operating lease cost – net (a) $ 912 $ 1,129 $ 1,960 $ 2,287 Finance lease cost: Amortization of leased assets 19 19 38 38 Interest on lease liabilities 1 2 3 5 Total lease cost $ 932 $ 1,150 $ 2,001 $ 2,330 (a) Net of $114 sublease income for the three and six months ended January 31, 2023. The maturity of the Company’s lease liabilities as of January 31, 2023 is as follows: Maturity of lease liabilities, years ending July 31, Operating Finance Total 2023 $ 2,080 $ 44 $ 2,124 2024 3,874 36 3,910 2025 3,541 — 3,541 2026 3,351 — 3,351 2027 2,507 — 2,507 Thereafter 808 — 808 Total lease payments 16,161 80 16,241 Less: Interest (a) (1,604 ) (2 ) (1,576 ) Present value of lease liabilities $ 14,557 $ 78 $ 14,665 (a) Primarily calculated using the Company’s incremental borrowing rate. Lease term and discount rate for the six months ended January 31 were as follows: Lease term and discount rate 2023 2022 Weighted-average remaining lease term (years): Operating leases 4.3 years 5.2 years Finance leases 0.9 years 2.0 years Weighted-average discount rate: Operating leases 4.96 % 4.98 % Finance leases 2.95 % 5.96 % See Note 4 for cash flow information on cash paid for amounts included in the measurement of lease liabilities for the three and six months ended January 31, 2023 and 2022. |
Accrued Liabilities
Accrued Liabilities | 6 Months Ended |
Jan. 31, 2023 | |
Payables and Accruals [Abstract] | |
Accrued Liabilities | Note 9 – Accrued Liabilities Accrued liabilities consist of: January 31, July 31, Payroll, benefits, and commissions $ 5,312 $ 4,912 Professional fees 1,090 801 Legal 3,099 4,523 Other 2,089 2,064 $ 11,590 $ 12,300 Self-Insured Medical Plan The Company self-funds medical insurance coverage for certain of its U.S. based employees. The risk to the Company is believed to be limited through the use of individual and aggregate stop loss insurance. As of January 31, 2023 and July 31, 2022, the Company has established a reserve of $340 and $260, respectively which is included in accrued liabilities for payroll, benefits and commissions, for claims that have been reported but not paid and for claims that have been incurred but not reported. The reserve is based upon the Company’s historical payment trends, claim history and current estimates. |
Stockholders_ Equity
Stockholders’ Equity | 6 Months Ended |
Jan. 31, 2023 | |
Stockholders' Equity Note [Abstract] | |
Stockholders’ equity | Note 10 - Stockholders’ equity Controlled Equity Offering The Company has a Controlled Equity Offering SM In September 2017, the Company filed with the SEC a Form S-3 “shelf” registration statement and sales agreement prospectus (the “Registration Statement”) covering the offering, issuance and sale of our Common Stock that could have been issued and sold under the existing Sales Agreement in an aggregate amount of up to $19.2 million. The Registration Statement on Form S-3 filed in connection with the Sales Agreement expired in October 2020 but a new Registration Statement could be refiled at any time at the discretion of the Company. Share based awards and share based compensation In January 2011, the Company’s stockholders approved the adoption of the 2011 Incentive Plan (the “2011 Plan”) for the issuance of equity awards, including, among others, options, restricted stock, restricted stock units and performance stock units for up to 3,000,000 shares of common stock. In January 2018, the Company’s stockholders approved the amendment and restatement of the 2011 Plan (the “Amended and Restated 2011 Plan”) to increase the number of shares of common stock available for grant under the 2011 Plan by 2,000,000 shares of common stock bringing the total number of shares available for grant to 5,000,000 shares of common stock. On October 7, 2020, the Company’s Board of Directors approved the amendment and restatement of the Amended and Restated 2011 Plan, with an effective date of October 7, 2020 and subject to approval by the Company’s stockholders at the 2020 annual meeting of stockholders of the Company. The amendment and restatement of the Amended and Restated 2011 Plan was for purposes of, among other things, (i) increasing the shares of common stock available for grant under the Amended and Restated 2011 Plan by an additional 4,000,000 shares of common stock bringing the total number of shares available for grant to 9,000,000 shares of common stock and (ii) extending the term of the Amended and Restated 2011 Plan until October 7, 2030. In January 2021, the Company’s stockholders approved the amendment and restatement of the Amended and Restated 2011 Plan. The exercise price of options granted under the Amended and Restated 2011 Plan, as amended and restated, is equal to or greater than fair market value of the common stock on the date of grant. The Amended and Restated 2011 Plan, as amended and restated, will terminate at the earliest of (a) such time as no shares of common stock remain available for issuance under the plan, (b) termination of the plan by the Company’s Board of Directors, or (c) October 7, 2030. Awards outstanding upon expiration of the Amended and Restated 2011 Plan, as amended and restated, will remain in effect until they have been exercised or terminated, or have expired. As of January 31, 2023, there were approximately 3,874,000 shares of common stock available for grant under the Amended and Restated 2011 Plan, as amended and restated. The Company estimates the fair value of each stock option award on the measurement date using a Black-Scholes option pricing model. The fair value of awards is amortized to expense on a straight-line basis over the requisite service period. The Company expenses restricted stock awards based on vesting requirements, primarily time elapsed. Performance stock awards are not recognized until it is probable they will be earned. At such time, their expense is then recognized over the requisite service period, including that portion of the service period already elapsed. Options granted pursuant to the plans may be either incentive stock options or non-statutory options. The 2011 Plan provides for the issuance of stock options, restricted stock and restricted stock unit awards which generally vest over a two or three year period. The amounts of share-based compensation expense recognized in the periods presented are as follows: Three months ended Six months ended 2023 2022 2023 2022 Stock options and performance stock units $ 313 $ 606 $ 557 $ 822 Restricted stock units 202 73 388 73 $ 515 $ 679 $ 945 $ 895 The following table sets forth the amount of expense related to share-based payment arrangements included in specific line items in the accompanying statements of operations: Three months ended Six months ended 2023 2022 2023 2022 Selling, general and administrative $ 494 $ 667 $ 904 $ 879 Cost of revenues 21 12 41 16 $ 515 $ 679 $ 945 $ 895 No Stock Option Plans The following table summarizes stock option activity during the three month period ended January 31, 2023: Options Weighted Weighted Aggregate Outstanding at July 31, 2022 3,941,783 $ 3.00 Awarded 615,000 $ 2.00 Exercised — $ Cancelled or expired (368,216 ) $ 4.33 Outstanding at end of period 4,188,567 $ 2.73 2.6 years $ — Exercisable at end of period 1,734,109 $ 0.4 years $ As of January 31, 2023, the total future compensation cost related to non-vested options, not yet recognized in the statements of operations, was $2,344 and the weighted average period over which the remaining expense of these awards is expected to be recognized is approximately two years. The intrinsic value of in the money stock option awards at the end of the period represents the Company’s closing stock price on the last trading day of the period in excess of the exercise price multiplied by the number of outstanding options. Performance Stock Units Beginning in fiscal 2018, the Company granted long-term incentive awards in the form of time based stock options and performance-based restricted stock units (“Performance Stock Units” or “PSUs”). The PSUs earned is determined over a three-year performance period. The primary performance metrics will be revenue and Adjusted EBITDA growth, as defined. Payouts are based on revenue and adjusted EBITDA goals met at threshold, target or maximum levels and are modified based on Total Shareholder Return (“TSR”) performance relative to Enzo’s peer group. The PSUs awarded to executive officers in fiscal 2018, net of forfeitures, expired in fiscal 2021 as the 3 year growth goals were not achieved. During the fiscal years ended 2020 and 2019, the Company awarded additional PSUs to its executive officers. These awards provide for the grant of shares of our common stock at the end of a three-year period based on the achievement of revenue growth and adjusted EBITDA growth goals met at threshold, target or maximum levels over the respective period. The PSUs awarded to executive officers in fiscal 2019, net of forfeitures, were earned as of the three-year period ending July 31, 2022 as the growth goals at the maximum level were achieved. After TSR modification, a total of 25,200 PSUs were earned equally by two officers. As of January 31, 2023, 12,600 shares had been issued and the balance of the shares are expected to be issued in the third quarter of fiscal 2023. During the six months ended January 31, 2023 a former officer forfeited 15,000 PSUs awarded in fiscal 2020. The Company recorded PSU compensation expense of $7 during the three months ended January 31, 2023 and ($48) during the six months ended January 31, 2023. For the three and six months ended January 31, 2022, the Company recorded PSU compensation expense of $96 and $162, respectively. The following table summarizes PSU’s granted and outstanding through January 31, 2023: Grant Date Total Grant Forfeitures Outstanding Fair Market 10/19/2020 98,600 (40,300 ) 58,300 $ 122 Restricted Stock Units The following table summarizes Restricted Stock Unit (“RSU”) activity for the six month period ended January 31, 2023: Number of Weighted Weighted Aggregate Outstanding at July 31, 2022 502,187 $ 2.95 Granted 100,000 1.97 Vested (86,667 ) 3.39 Cancelled — $ Outstanding at end of period 515,520 $ 2.69 1.5 years $ 807 Expected to vest at end of period 515,520 $ 1.5 years $ During the three and six months ended January 31, 2023, the Company recognized shared based compensation expense for these RSUs of $202 and $388, respectively for these RSUs. During the three and six months ended January 31, 2022, the Company recognized shared-based compensation expense for these RSUs of $73. As of January 31, 2023, the total future compensation cost related to non-vested RSUs, not yet recognized in the statements of operations, was $995 and the weighted average period over which the remaining expense of these awards is expected to be recognized is approximately one and a half years. |
Segment Reporting
Segment Reporting | 6 Months Ended |
Jan. 31, 2023 | |
Segment Reporting [Abstract] | |
Segment reporting | Note 11 - Segment reporting The Company has two reportable segments: Clinical Services and Products. The Clinical Services segment provides diagnostic services to the health care community. The Company’s Products segment develops, manufactures, and markets products to research and pharmaceutical customers. The Company evaluates segment performance based on segment income (loss) before taxes. Costs excluded from segment income (loss) before taxes and reported as “Other” consist of corporate general and administrative costs which are not allocable to the two reportable segments. Legal and related expenses incurred to defend the Company’s intellectual property, which may result in settlements recognized in another segment and other general corporate matters are considered a component of the Other segment. Legal and related expenses specific to other segments’ activities are allocated to those segments. The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies. At the beginning of fiscal 2023, we determined we would redirect our research resources and efforts to our two operating segments, Enzo Life Sciences and Enzo Clinical Labs, and as a result, Enzo Therapeutics no longer meets the criteria for being a reportable segment. The operating expenses of Enzo Therapeutics are included in the “Other” segment for all periods presented. The following financial information represents the operating results of the reportable segments of the Company: Three months ended January 31, 2023 Clinical Products Other Consolidated Revenues $ 8,824 $ 7,514 — $ 16,338 Operating costs and expenses: Cost of revenues 10,463 4,616 — 15,079 Research and development 306 1,113 12 1,431 Selling, general and administrative 6,943 2,556 2,313 11,812 Legal fee expense 107 11 877 995 Total operating costs and expenses 17,819 8,296 3,202 29,317 Operating loss (8,995 ) (782 ) (3,202 ) (12,979 ) Other income (expense): Interest, net (1 ) 29 34 62 Other 7 2 116 125 Foreign exchange loss — 1,472 — 1,472 (Loss) income before income taxes $ (8,989 ) $ 721 $ (3,052 ) $ (11,320 ) Depreciation and amortization included above $ 386 171 91 648 Share-based compensation included in above: Selling, general and administrative 65 20 409 494 Cost of revenues 15 6 — 21 Total $ 80 26 409 515 Capital expenditures $ 196 632 41 869 Three months ended January 31, 2022 Clinical Products Other Consolidated Revenues $ 23,674 $ 10,372 — $ 34,046 Operating costs and expenses: Cost of revenues 12,586 5,252 — 17,838 Research and development 89 711 20 820 Selling, general and administrative 6,811 3,039 4,616 14,466 Legal fee expense 148 — 2,697 2,845 Total operating costs and expenses 19,634 9,002 7,333 35,969 Operating income (loss) 4,040 1,370 (7,333 ) (1,923 ) Other income (expense): Interest, net (3 ) 9 62 68 Other 5 3 (358 ) (350 ) Foreign exchange loss — (450 ) — (450 ) Income (loss) before income taxes $ 4,042 $ 932 $ (7,629 ) $ (2,655 ) Depreciation and amortization included above $ 438 190 77 705 Share-based compensation included in above: Selling, general and administrative 16 1 650 667 Cost of revenues 12 — — 12 Total $ 28 1 650 679 Capital expenditures $ 283 730 201 1,214 Six months ended January 31, 2023 Clinical Products Other Consolidated Revenues $ 19,997 $ 14,617 — $ 34,614 Operating costs and expenses: Cost of revenues 20,545 9,205 — 29,750 Research and development 603 1,803 21 2,427 Selling, general and administrative 13,493 4,986 4,784 23,263 Legal fee expense 171 36 1,859 2,066 Total operating costs and expenses 34,812 16,030 6,664 57,506 Operating loss (14,815 ) (1,413 ) (6,664 ) (22,892 ) Other income (expense): Interest, net (3 ) 54 81 132 Other 12 4 114 130 Foreign exchange loss — 675 — 675 Loss before income taxes $ (14,806 ) $ (680 ) $ (6,469 ) $ (21,955 ) Depreciation and amortization included above $ 918 336 174 1,428 Share-based compensation included in above: Selling, general and administrative 114 40 749 903 Cost of revenues 31 11 — 42 Total $ 145 51 749 945 Capital expenditures $ 359 938 224 1,521 Six months ended January 31, 2022 Clinical Products Other Consolidated Revenues $ 43,415 $ 17,150 — $ 60,565 Operating costs and expenses: Cost of revenues 23,789 9,322 — 33,111 Research and development 96 1,443 25 1,564 Selling, general and administrative 12,812 6,134 6,572 25,518 Legal fee expense 205 13 3,909 4,127 Total operating costs and expenses 36,902 16,912 10,506 64,320 Operating income (loss) 6,513 238 (10,506 ) (3,755 ) Other income (expense): Interest, net (5 ) 18 94 107 Other 54 5 (554 ) (495 ) Foreign exchange loss (831 ) — (831 ) Income (loss) before income taxes $ 6,562 $ (570 ) $ (10,966 ) $ (4,974 ) Depreciation and amortization included above $ 856 402 148 1,406 Share-based compensation included in above: Selling, general and administrative 36 1 842 879 Cost of revenues 16 — — 16 Total $ 52 1 842 895 Capital expenditures $ 593 1,216 438 2,247 |
Contingencies
Contingencies | 6 Months Ended |
Jan. 31, 2023 | |
Contingencies [Abstract] | |
Contingencies | Note 12 – Contingencies On or about March 2, 2023, a verified complaint was filed in the Supreme Court of the State of New York, New York County captioned Elazar Rabbani v. Mary Tagliaferri, et al., Index No. 651120/2023. The verified complaint purports to assert causes of action for breach of fiduciary duty and corporate waste under N.Y.B.C.L. § 720, and also seeks an accounting and certain injunctive relief. Plaintiff served a copy of the verified complaint on Enzo’s agent for service in New York on or about March 13, 2023. The Company cannot predict the outcome of this matter; however, no inference whatsoever should be drawn from the absence of such prediction that the Company will not prevail. The Company has brought cases in the United States District Court for the District of Delaware (“the Court”), alleging patent infringement against various companies. In 2017, the Court ruled that the asserted claims of the ’180 and ’405 Patents are invalid for nonenablement in cases involving Abbott, Becton Dickinson, Gen-Probe, Hologic, and Roche. That ruling was affirmed by the United States Court of Appeals for the Federal Circuit (“Federal Circuit”) in June 2019. Enzo subsequently filed a petition for certiorari regarding the invalidity ruling for the ’180 and ’405 Patents in February 2020; the Supreme Court denied Enzo’s petition on March 30, 2020. The Company, along with its subsidiary Enzo Life Sciences, Inc., resolved its claims against Roche regarding the ’197 Patent before the Court (civil action No. 12 cv-00106) in July 2022. There is currently one case that was originally brought by the Company that is still pending in the Court. In that case, Enzo alleges patent infringement of the ’197 patent against Becton Dickinson Defendants. The claims in that case are stayed. In separate inter partes review proceedings before the U.S. Patent and Trademark Office (PTO) involving, among others, Becton Dickinson, certain claims of the ’197 Patent were found unpatentable as anticipated or obvious and cancelled by the Patent Trial and Appeals Board (“Board”). Enzo appealed that decision to the Federal Circuit. On August 16, 2019, the Federal Circuit affirmed the Board’s decision, finding that each of the challenged claims is unpatentable. The Company filed a petition for rehearing and rehearing en banc on October 30, 2019, which the Federal Circuit denied on December 4, 2019. The Company filed a petition for certiorari with the Supreme Court on March 3, 2020, which was denied. In April 2019, the Company entered into an agreement with Hologic and Grifols, resolving litigation resulting from four cases originally brought by the Company in the Court. As a result, Enzo dismissed (1) a stayed patent litigation regarding the ’180 and ’197 Patent against Hologic in the Court; (2) the Consolidated Appeals against Gen-Probe and Hologic resulting from two cases filed in the Court, and (3) the Company’s appeal in the litigation involving the ’581 Patent that involved both Hologic and Grifols. As a result of the agreement with Hologic, Hologic withdrew from Enzo’s Federal Circuit appeal of the Board’s adverse rulings in the inter partes On September 2, 2021, the PTO issued a non-final office action in an ex parte ex parte ex parte On February 5, 2020, Harbert Discovery Fund, LP and Harbert Discovery Co-Investment Fund I, LP (“HDF”) brought an action in the United States District Court for the Southern District of New York against the Company and five of its present or former Directors, Dr. Elazar Rabbani, Barry W. Weiner, Dr. Bruce A. Hanna, Dov Perlysky and Rebecca Fischer. On March 26, 2020, HDF filed an amended complaint against the same defendants. Count I asserted the Company violated Section 14(a) of the Securities and Exchange Act of 1934 and Rule 14a-9 thereunder by disseminating proxy materials that made purportedly false statements. Count II asserted a claim against the individual defendants under Section 20(a) of the Exchange Act premised on Enzo’s purported violation of Section 14(a) and Rule 14a-9. Count III asserted the individual defendants breached their fiduciary duty, based on the same conduct and by seeking to entrench themselves. Finally, Count IV purported to assert a derivative claim for a declaration that any amendment to Article II, Section 2 requires the approval of 80% of Enzo’s shareholders. On July 16, 2020, the day before the defendants’ motion to dismiss was due, HDF asked the Court to dismiss their claims without prejudice. Defendants asked HDF to dismiss the claims with prejudice, but they refused. On July 17, 2020, the Court dismissed the claims without prejudice. On November 27, 2020, the Company brought an action in the United States District Court for the Southern District of New York against Harbert Discovery Fund, LP, Harbert Discovery Co-Investment Fund I, LP, Harbert Fund Advisors, Inc., Harbert Management Corp. and Kenan Lucas (together, “Harbert”). The Company alleged Harbert made false and misleading representations, or omitted to state material facts necessary to make their statements not misleading, in proxy materials they disseminated seeking the election to the Company’s Board of Directors at its 2019 Annual Meeting of two candidates they nominated, in violation of Section 14(a) of the 1934 Exchange Act and Rule 14a-9 thereunder. The Company sought damages and injunctive relief. On October 12, 2021, HDF filed five counterclaims against the Company and present and former directors Dr. Elazar Rabbani, Barry W. Weiner, Dr. Bruce A. Hanna, Dov Perlysky, Rebeca Fischer, Dr. Mary Tagliaferri and Dr. Ian B. Walters. HDF claimed the Company made false and misleading representations in proxy materials it disseminated in connection with its 2019 Annual Meeting, in violation of Section 14(a) of the 1934 Exchange Act and Rule 14a-9 thereunder, and that the Company’s directors at that time were liable under Section 20(a) of the Exchange Act for the Company’s purported misstatements. HDF also claimed that current and former Company directors breached their fiduciary duties by taking four corporate actions: (a) adjourning the 2019 meeting for 25 days; (b) purportedly causing the two Harbert candidates for director, who were elected at the 2019 Meeting, to resign in November 2020; (c) authorizing the November 27, 2020 Lawsuit; and (d) not accepting Dr. Rabbani’s resignation as a director in March 2021. On November 10, 2021, the Company and the other counterclaim defendants moved to dismiss HDF’s counterclaims. On December 9, 2021, the court granted the motion to dismiss HDF’s counterclaims except HDF’s Section 14(a) claim against the Company concerning its statement that it intended to “delay” the 2019 Annual Meeting, and HDF’s Section 20(a) and breach of fiduciary duty counterclaims against Dr. Elazar Rabbani, Barry W. Weiner, Dr. Bruce Hanna, Dov Perlysky and Rebecca Fischer with respect to that statement. The Court allowed HDF to move for leave to replead with respect to its dismissed counterclaims. On June 7, 2022, the Court “so ordered” a stipulation of dismissal with prejudice of the Company’s claims against Harbert Discovery Fund, LP, Harbert Discovery Co-Investment Fund I, LP, Harbert Fund Advisors, Inc., Harbert Management Corp., and Kenan Lucas, and HDF’s counterclaims against the Company, Dr. Bruce Hanna, Dov Perlysky, Rebecca Fischer, Dr. Ian B. Walters and Dr. Mary Tagliaferri. The only remaining claims were HDF’s counterclaims against Dr. Rabbani and Mr. Weiner. HDF asked the Court to dismiss those claims without prejudice. Dr. Rabbani and Mr. Weiner asked the Court to dismiss those counterclaims with prejudice and to allow them to take discovery from HDF, the Company, and possibly others. On December 1, 2022, the court granted HDF’s motion for voluntary dismissal without prejudice, denied Dr. Rabbani and Mr. Weiner’s motion to compel discovery, and directed the Clerk of the Court to close this case. There can be no assurance that the Company will be successful in any of these litigations. Even if the Company is not successful, management does not believe that there will be a significant adverse monetary impact on the Company. The Company is party to other claims, legal actions, complaints, and contractual disputes that arise in the ordinary course of business. The Company believes that any liability that may ultimately result from the resolution of these matters will not, individually or in the aggregate, have a material adverse effect on its financial position or results of operations. As described in Note 3, third-party payers, including government programs, may decide to deny payment or recoup payments for testing that they contend was improperly billed or not medically necessary, against their coverage determinations, or for which they believe they have otherwise overpaid (including as a result of their own error), and we may be required to refund payments already received. Former executives arbitration The Company terminated the employment of Elazar Rabbani, Ph.D., the Company’s former Chief Executive Officer, effective April 21, 2022. Dr. Rabbani remains a board director of the Company. Dr. Rabbani is a party to an employment agreement with the Company, which entitles him to certain termination benefits, including severance pay, acceleration of vesting of share-based compensation, and continuation of benefits. Based on the terms of his employment agreement, the Company estimated and accrued a charge of $2,600 in fiscal 2022 which is included in Selling, general and administrative expenses. The charge was partially offset by the reversal of bonus accruals. In May 2022, the Company paid Dr. Rabbani $2,123 in severance (the payment constituted taxable income but the Company did not withhold taxes from the payment). In July 2022, the Company paid Dr. Rabbani’s income and other withholding taxes of $1,024 related to that payment on Dr. Rabbani’s behalf, which is included in “prepaid expense and other current assets” as of July 31, 2022, as the payment is reimbursable from Dr. Rabbani. Dr. Rabbani disputed, among other things, the Company’s decision to not award him a bonus for fiscal year 2021 and the amount of severance that was owed to him under his employment agreement. On July 8, 2022, the Company filed a demand for arbitration with the American Arbitration Association (the “AAA”) seeking, among other things, a declaration that the Company has fully satisfied its contractual obligations to Dr. Rabbani and seeking the tax withholding reimbursement referenced above. On August 4, 2022, Dr. Rabbani filed counterclaims in the arbitration seeking, among other things, a bonus for fiscal year 2021 and additional severance that he asserts is owed to him. The parties have chosen an arbitrator from the AAA’s panel and a hearing is scheduled for June 8-16, 2023. On February 25, 2022, Barry Weiner, the Company’s co-founder and President, notified the Company that he was terminating his employment as President of the Company for “Good Reason” as defined in his employment agreement. The Company accepted Mr. Weiner’s termination, effective April 19, 2022, but disagreed with Mr. Weiner’s assertion regarding “Good Reason.” On July 20, 2022, Mr. Weiner filed a demand for arbitration with the AAA asserting, among other things, that his annual bonus for fiscal year 2021 was too low and that his resignation (effective April 19, 2022) was for “Good Reason” under the terms of his employment agreement. He seeks, among other things, payment of a higher 2021 bonus, and severance payments and benefits. The parties have chosen an arbitrator from the AAA’s panel and a hearing is scheduled for July 18-21, and 24, 2023. As of January 31, 2023, the Company has not accrued any charges related to Mr. Weiner’s termination. |
Subsequent Events _ Agreement t
Subsequent Events – Agreement to Sell Assets of Clinical Labs Division to Labcorp | 6 Months Ended |
Jan. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events – Agreement to sell assets of Clinical Labs division to Labcorp | Note 13 – Subsequent Events – Agreement to sell assets of Clinical Labs division to Labcorp On March 16, 2023, the Company filed a Form 8-K indicating that it and Enzo Clinical Labs, Inc. (the “Subsidiary” and, together with the Company, the “Seller”) entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Laboratory Corporation of America Holdings, a Delaware corporation (the “Buyer”). Pursuant to the Purchase Agreement, the Seller has agreed to sell substantially all operating assets and assign certain liabilities of its clinical labs business (the “Business”) to the Buyer which are necessary to operate the Business in exchange for approximately $146,000,000 in cash (subject to certain adjustments), on and subject to the terms and conditions set forth therein (such transaction, the “Transaction”). The Purchase Agreement contains customary representations, warranties, covenants and termination rights for a transaction of this nature, including, among other things, customary covenants: (i) relating to the conduct of the Business between the signing of the Purchase Agreement and the closing of the Transaction and (ii) regarding the efforts of the parties to cause the Transaction to be consummated, including obtaining certain consents and approvals. The consummation of the Transaction is subject to the satisfaction or waiver of customary closing conditions, including the expiration or termination of any required waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. In addition, closing under the Purchase Agreement is contingent on the Company obtaining approval of the Transaction by shareholders of the Company holding a majority of the shares of its common stock outstanding. Certain officers and directors of the Company have agreed with Buyer to vote the shares they beneficially own, totaling up to approximately 11% of the shares outstanding, in favor of the Transaction. The Purchase Agreement also includes customary termination provisions for both the Company and Buyer and provides that, in connection with the termination of the Purchase Agreement under specified circumstances, including termination by the Company to accept and enter into a definitive agreement with respect to an unsolicited Superior Proposal, the Company will be required to pay Buyer a termination fee of $5,000,000 or reimbursement of Buyer’s expenses of up to $5,000,000. Subject to the terms and conditions stated in the Purchase Agreement, after shareholder approval of the Transaction, Buyer will be obligated to pay a fee to the Company for each day after the date of such approval until the closing of the Transaction. At the closing of the Transaction, such fee will be wholly or partially credited against the purchase price. There can be no assurances that the Purchase Agreement will close and if it does close, the exact proceeds to be received by the Company. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 6 Months Ended |
Jan. 31, 2023 | |
Accounting Policies [Abstract] | |
Change in segment reporting | Change in segment reporting Historically, we engaged in the research and development of therapeutic candidates through Enzo Therapeutics, a biopharmaceutical venture that was developing multiple novel approaches in the areas of gastrointestinal, infectious, ophthalmic and metabolic diseases, many of which were derived from the researching work of Enzo Life Sciences. Enzo Therapeutics focused its efforts on researching treatment regimens for diseases and conditions for which treatment options were ineffective, costly, and/or caused unwanted side effects. This focus generated a clinical and preclinical pipeline, as well as numerous patents and patent applications with Enzo Therapeutics as the assignee. At the beginning of fiscal 2023, we determined we would redirect our research resources and efforts to our two operating segments, Enzo Life Sciences and Enzo Clinical Labs, and no longer consider Enzo Therapeutics a segment. The operating results of Enzo Therapeutics are now included in the “Other” segment. The prior period segment information for the three and six months ended January 31, 2022 reported in Note 11 has been restated to be included in the “Other” segment. The operating expenses of Enzo Therapeutics for the three and six months ended January 31, 2023 now included in the “Other” segment were $12 and $21, respectively. The operating expenses of Enzo Therapeutics for the three and six months ended January 31, 2022 now included in the “Other” segment were $20 and $25, respectively. |
Liquidity and Going Concern | Liquidity and Going Concern During the six months ended January 31, 2023, the Company incurred a net loss of $21,955 and used cash in operating activities of $14,891. The Company believes that based on its fiscal 2023 forecast, its current cash and cash equivalents level is not sufficient for its foreseeable liquidity and capital resource needs over at least the next twelve (12) months, which conditions raise substantial doubt about the Company’s ability to continue as a going concern for one year after the date that the unaudited interim financial statements are issued. In response to these conditions, the Company is evaluating various financing strategies to obtain sufficient additional liquidity to meet its operating and capital requirements for the next twelve months following the date of issuance of these unaudited interim consolidated financial statements. Specifically, on March 10, 2023, the Company signed a commitment letter providing for up to $8,000 of a revolving line of credit subject to closing, and as previously disclosed is exploring various strategic alternatives including the sale of segment operating assets. On March 16, 2023, the Company entered into an Asset Purchase Agreement with respect to the sale to Labcorp of substantially all the operating assets and assignment of certain liabilities which are necessary for Labcorp to operate the business of the Clinical Labs division. See Note 13 Subsequent Events. However, there can be no assurance that either of these capital raising strategies will be successful, and the Company may need to raise additional capital during the current fiscal year. The Company also believes it has the ability to raise additional funds, either through additional debt secured by real property owned, private debt, selling preferred stock, reactivating its Sales Agreement with Cantor, or through other sources, but there can be no assurances that the Company will be able to raise capital pursuant to the foregoing on favorable terms or at all. The Registration Statement on Form S-3 filed in connection with the Sales Agreement expired in October 2020 but a new Registration Statement could be filed at any time at the discretion of the Company, as disclosed in Note 10 in the Notes to the Consolidated Financial Statements. Our liquidity plans are subject to a number of risks and uncertainties, some of which are outside our control. Macroeconomic conditions could limit our ability to successfully execute our business plans and therefore adversely affect our liquidity plans. The unaudited interim financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern. |
Revolving Line of Credit commitment | Revolving Line of Credit commitment On March 10, 2023, the Company entered into a commitment for a one-year credit facility with an asset based lender specializing in direct lending to middle-market companies in the healthcare sector. The facility is an $8 million revolving line of credit based on the Company’s eligible accounts receivable. The annual interest rate is equal to the 90 day term SOFR rate plus 5.5%. The line of credit would terminate one year from closing and unused line fees and early prepayment penalties apply. Closing and initial funding are conditioned on the absence of any material adverse change in the operations or financial condition of the Company prior to the closing date. The Company and the lender are using their best efforts to close on the line of credit as soon as possible. The expected closing time period is the end of March 2023. |
Impact of COVID-19 | Impact of COVID-19 We made substantial investments to expand and maintain the amount of COVID-19 testing available in the communities we serve since the start of the pandemic in March 2020. We applied our technical expertise in molecular diagnostics to develop next generation COVID-19 diagnostic and antibody testing options which were approved under the FDA Emergency Use Authorization (EUA). During the fiscal year ended July 31, 2022, the Company generated substantial COVID-19 related services revenues, representing 44% of all services revenues. This testing had a significantly positive impact on the profitability and cash flow of our Clinical services segment for most of fiscal 2022. Revenues from COVID-19 testing during the three and six months ended January 31, 2022 represented 56% and 52%, respectively of all services revenues. The rate of transmission of COVID-19 and the severity of its variants have dramatically declined in the US. Revenues from COVID-19 testing during the three and six months ended January 31, 2023 represented approximately 4% and 6%, respectively, of all services revenues. In March 2022, the U.S. Health Resources and Services Administration (“HRSA”) informed providers that, after March 22, 2022, it would stop accepting claims for testing and treatment for uninsured individuals under the HRSA COVID-19 Uninsured Program and that claims submitted prior to that date would be subject to eligibility and availability of funds. Although we believe that our estimates for contractual allowances and patient price concessions are appropriate, actual results could differ from those estimates. If the HRSA receives additional funding, it might again accept claims under the Uninsured Program. Federal, state and local governmental policies and initiatives designed to reduce the transmission of COVID-19 resulted in, among other things, a significant reduction in physician office visits, the cancellation of elective medical procedures, and the continuation of work-from-home policies. The COVID-19 impact on the Company’s operations is consistent with the overall industry and our competitors, partners, and vendors. While we anticipate that COVID-19 will continue to impact our business into the future, increases in vaccination rates and booster shots, the development of new therapeutics and greater availability of rapid COVID-19 tests has resulted in a continued, significant decline in demand for our COVID-19 testing. As a result, volume, revenues, profitability, and cash flow from COVID-19 testing during the current periods were all substantially and materially lower than the prior year period levels. COVID-19 testing is no longer a material part of our Services business. We expect volume and revenues from COVID-19 testing will remain less significant in the periods ahead as the percentage of Americans who are vaccinated increases, the severity of its variants declines, and the general increase in the use of “at home” testing. However, the emergence and spread of potentially more serious variants may cause our COVID-19 testing volume to increase again. With respect to our non-COVID-19 operations, even after the COVID-19 pandemic impact has greatly moderated, we may continue to experience similar adverse effects to our businesses, consolidated results of operations, financial position and cash flows resulting from a recessionary economic environment, including inflation and actions by the Federal Reserve to increase interest rates. The Company assessed certain accounting matters that generally require consideration of forecasted financial information in context with the information reasonably available to the Company and the unknown future impacts of COVID-19 and the recessionary economic environment, including inflation and actions by the Federal Reserve to increase interest rates as of January 31, 2023 and through the date of this Quarterly Report. The accounting matters assessed included, but were not limited to, the Company’s patient self-pay revenue concessions and credit losses in the Clinical Services segment, accounts receivable, inventories and the carrying value of goodwill and other long-lived assets. The Company’s future assessment of the magnitude and duration of COVID-19, as well as other economic factors, could result in additional material adverse impacts to the Company’s consolidated financial statements in future reporting periods. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. |
Effect of New Accounting Pronouncements | Effect of New Accounting Pronouncements Pronouncements Issued but Not Yet Adopted In June 2016, FASB issued ASU No. 2016-13 Financial Instruments – Credit Losses (Topic 326). This standard changes the impairment model for most financial instruments, including trade receivables, from an incurred loss method to a new forward-looking approach, based on expected losses. The estimate of expected credit losses will require entities to incorporate considerations of historical information, current information and reasonable and supportable forecasts. Adoption of this standard is required for our annual and interim periods beginning August 1, 2023, as we qualified as a smaller reporting company at the end of fiscal 2022 and must be adopted using a modified retrospective transition approach. We are currently assessing the impact of the adoption of this standard on our results of operations, financial position and cash flows. We reviewed all other recently issued accounting pronouncements and have concluded they are not applicable or not expected to be significant to the accounting for our operations. |
Concentration Risk | Concentration Risk Other than the Medicare program, one provider whose programs are included in the “Third-party payers” and “Health Maintenance Organizations” (“HMO’s”) categories represents approximately 16% and 17% of Clinical Services net revenue for the three and six months ended January 31, 2023, respectively and 16% of the Clinical Services net accounts receivable as of January 31, 2023. Other than the Medicare program, two providers whose programs are included in the “Third-party payers” and “Health Maintenance Organizations” (“HMO’s”) categories represent approximately 36% and 35% of Clinical Services net revenue for the three and six months ended January 31, 2022, respectively. |
Income Taxes | Income Taxes The Company accounts for income taxes under the liability method of accounting for income taxes. Under the liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. The liability method requires that any tax benefits recognized for net operating loss carry forwards and other items be reduced by a valuation allowance when it is more likely than not that the benefits may not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under the liability method, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 6 Months Ended |
Jan. 31, 2023 | |
Revenue Recognition [Abstract] | |
Schedule of clinical services net revenues and percentages | Three months ended Three months ended Revenue category Third-party payer $ 5,163 58 % $ 14,256 60 % Medicare 1,374 16 2,784 12 Patient self-pay 974 11 2,605 11 HMOs 1,313 15 4,029 17 Total $ 8,824 100 % $ 23,674 100 % Six months ended Six months ended Revenue category Third-party payer $ 11,186 56 % $ 26,145 60 % Medicare 3,670 18 5,514 13 Patient self-pay 2,212 11 4,550 10 HMOs 2,929 15 7,206 17 Total $ 19,997 100 % $ 43,415 100 % |
Schedule of products revenue by geography | Three Months Ended January 31 Six Months Ended January 31 2023 2022 2023 2022 United States $ 4,144 $ 6,754 $ 8,239 $ 10,617 Europe 2,277 2,401 4,181 4,407 Asia Pacific 1,093 1,217 2,197 2,126 Products revenue $ 7,514 $ 10,372 $ 14,617 $ 17,150 |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jan. 31, 2023 | |
Inventory Disclosure [Abstract] | |
Schedule of inventories | January 31, July 31, Raw materials $ 1,962 $ 1,524 Work in process 2,748 2,459 Finished products 11,013 11,428 $ 15,723 $ 15,411 |
Mortgage Debt and Long Term D_2
Mortgage Debt and Long Term Debt, Net (Tables) | 6 Months Ended |
Jan. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of minimum future annual principal payments | July 31, Total 2023 $ 118 2024 239 2025 249 2026 259 2027 269 Thereafter 3,117 Total principal payments 4,251 Less: current portion, included in other current liabilities and finance leases short term (236 ) unamortized mortgage cost (42 ) Mortgage debt - current and long term debt – net $ 3,973 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jan. 31, 2023 | |
Leases [Abstract] | |
Schedule of lease agreements include rental payments | Leases Balance Sheet Classification January 31, July 31, Assets Operating Right-of-use assets $ 13,569 $ 15,174 Finance Property, plant and equipment, net (a) 134 172 Total lease assets $ 13,703 $ 15,346 Liabilities Current: Operating Current portion of operating lease liabilities $ 3,425 $ 3,432 Finance Finance leases short term 78 81 Non-current: Operating Operating lease liabilities, non-current 11,132 12,729 Finance Other liabilities and finance leases long term — 39 Total lease liabilities $ 14,635 $ 16,281 (a) Accumulated amortization of finance lease assets was approximately $248 and $210 as of January 31, 2023 and July 31, 2022, respectively. |
Schedule of components of lease cost | Three months ended Six months ended 2023 2022 2023 2022 Operating lease cost – net (a) $ 912 $ 1,129 $ 1,960 $ 2,287 Finance lease cost: Amortization of leased assets 19 19 38 38 Interest on lease liabilities 1 2 3 5 Total lease cost $ 932 $ 1,150 $ 2,001 $ 2,330 (a) Net of $114 sublease income for the three and six months ended January 31, 2023. |
Schedule of lease liabilities | Maturity of lease liabilities, years ending July 31, Operating Finance Total 2023 $ 2,080 $ 44 $ 2,124 2024 3,874 36 3,910 2025 3,541 — 3,541 2026 3,351 — 3,351 2027 2,507 — 2,507 Thereafter 808 — 808 Total lease payments 16,161 80 16,241 Less: Interest (a) (1,604 ) (2 ) (1,576 ) Present value of lease liabilities $ 14,557 $ 78 $ 14,665 (a) Primarily calculated using the Company’s incremental borrowing rate. |
Schedule of lease term and discount rate | Lease term and discount rate 2023 2022 Weighted-average remaining lease term (years): Operating leases 4.3 years 5.2 years Finance leases 0.9 years 2.0 years Weighted-average discount rate: Operating leases 4.96 % 4.98 % Finance leases 2.95 % 5.96 % |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 6 Months Ended |
Jan. 31, 2023 | |
Payables and Accruals [Abstract] | |
Schedule of accrued liabilities | Accrued liabilities consist of: January 31, July 31, Payroll, benefits, and commissions $ 5,312 $ 4,912 Professional fees 1,090 801 Legal 3,099 4,523 Other 2,089 2,064 $ 11,590 $ 12,300 |
Stockholders_ Equity (Tables)
Stockholders’ Equity (Tables) | 6 Months Ended |
Jan. 31, 2023 | |
Stockholders' Equity Note [Abstract] | |
Schedule of summarizes restricted stock unit (“RSU”) activity | Three months ended Six months ended 2023 2022 2023 2022 Stock options and performance stock units $ 313 $ 606 $ 557 $ 822 Restricted stock units 202 73 388 73 $ 515 $ 679 $ 945 $ 895 |
Schedule of expense related to share-based payment arrangements | Three months ended Six months ended 2023 2022 2023 2022 Selling, general and administrative $ 494 $ 667 $ 904 $ 879 Cost of revenues 21 12 41 16 $ 515 $ 679 $ 945 $ 895 |
Schedule of stock option activity | Options Weighted Weighted Aggregate Outstanding at July 31, 2022 3,941,783 $ 3.00 Awarded 615,000 $ 2.00 Exercised — $ Cancelled or expired (368,216 ) $ 4.33 Outstanding at end of period 4,188,567 $ 2.73 2.6 years $ — Exercisable at end of period 1,734,109 $ 0.4 years $ |
Schedule of PSU’s granted and outstanding | Grant Date Total Grant Forfeitures Outstanding Fair Market 10/19/2020 98,600 (40,300 ) 58,300 $ 122 |
Schedule of summarizes restricted stock unit (“RSU”) activity | Number of Weighted Weighted Aggregate Outstanding at July 31, 2022 502,187 $ 2.95 Granted 100,000 1.97 Vested (86,667 ) 3.39 Cancelled — $ Outstanding at end of period 515,520 $ 2.69 1.5 years $ 807 Expected to vest at end of period 515,520 $ 1.5 years $ |
Segment Reporting (Tables)
Segment Reporting (Tables) | 6 Months Ended |
Jan. 31, 2023 | |
Segment Reporting [Abstract] | |
Schedule of operating results of the reportable segments | Three months ended January 31, 2023 Clinical Products Other Consolidated Revenues $ 8,824 $ 7,514 — $ 16,338 Operating costs and expenses: Cost of revenues 10,463 4,616 — 15,079 Research and development 306 1,113 12 1,431 Selling, general and administrative 6,943 2,556 2,313 11,812 Legal fee expense 107 11 877 995 Total operating costs and expenses 17,819 8,296 3,202 29,317 Operating loss (8,995 ) (782 ) (3,202 ) (12,979 ) Other income (expense): Interest, net (1 ) 29 34 62 Other 7 2 116 125 Foreign exchange loss — 1,472 — 1,472 (Loss) income before income taxes $ (8,989 ) $ 721 $ (3,052 ) $ (11,320 ) Depreciation and amortization included above $ 386 171 91 648 Share-based compensation included in above: Selling, general and administrative 65 20 409 494 Cost of revenues 15 6 — 21 Total $ 80 26 409 515 Capital expenditures $ 196 632 41 869 Three months ended January 31, 2022 Clinical Products Other Consolidated Revenues $ 23,674 $ 10,372 — $ 34,046 Operating costs and expenses: Cost of revenues 12,586 5,252 — 17,838 Research and development 89 711 20 820 Selling, general and administrative 6,811 3,039 4,616 14,466 Legal fee expense 148 — 2,697 2,845 Total operating costs and expenses 19,634 9,002 7,333 35,969 Operating income (loss) 4,040 1,370 (7,333 ) (1,923 ) Other income (expense): Interest, net (3 ) 9 62 68 Other 5 3 (358 ) (350 ) Foreign exchange loss — (450 ) — (450 ) Income (loss) before income taxes $ 4,042 $ 932 $ (7,629 ) $ (2,655 ) Depreciation and amortization included above $ 438 190 77 705 Share-based compensation included in above: Selling, general and administrative 16 1 650 667 Cost of revenues 12 — — 12 Total $ 28 1 650 679 Capital expenditures $ 283 730 201 1,214 Six months ended January 31, 2023 Clinical Products Other Consolidated Revenues $ 19,997 $ 14,617 — $ 34,614 Operating costs and expenses: Cost of revenues 20,545 9,205 — 29,750 Research and development 603 1,803 21 2,427 Selling, general and administrative 13,493 4,986 4,784 23,263 Legal fee expense 171 36 1,859 2,066 Total operating costs and expenses 34,812 16,030 6,664 57,506 Operating loss (14,815 ) (1,413 ) (6,664 ) (22,892 ) Other income (expense): Interest, net (3 ) 54 81 132 Other 12 4 114 130 Foreign exchange loss — 675 — 675 Loss before income taxes $ (14,806 ) $ (680 ) $ (6,469 ) $ (21,955 ) Depreciation and amortization included above $ 918 336 174 1,428 Share-based compensation included in above: Selling, general and administrative 114 40 749 903 Cost of revenues 31 11 — 42 Total $ 145 51 749 945 Capital expenditures $ 359 938 224 1,521 Six months ended January 31, 2022 Clinical Products Other Consolidated Revenues $ 43,415 $ 17,150 — $ 60,565 Operating costs and expenses: Cost of revenues 23,789 9,322 — 33,111 Research and development 96 1,443 25 1,564 Selling, general and administrative 12,812 6,134 6,572 25,518 Legal fee expense 205 13 3,909 4,127 Total operating costs and expenses 36,902 16,912 10,506 64,320 Operating income (loss) 6,513 238 (10,506 ) (3,755 ) Other income (expense): Interest, net (5 ) 18 94 107 Other 54 5 (554 ) (495 ) Foreign exchange loss (831 ) — (831 ) Income (loss) before income taxes $ 6,562 $ (570 ) $ (10,966 ) $ (4,974 ) Depreciation and amortization included above $ 856 402 148 1,406 Share-based compensation included in above: Selling, general and administrative 36 1 842 879 Cost of revenues 16 — — 16 Total $ 52 1 842 895 Capital expenditures $ 593 1,216 438 2,247 |
Basis of Presentation (Details)
Basis of Presentation (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
Mar. 10, 2023 | Jul. 31, 2022 | Jan. 31, 2023 | Jan. 31, 2022 | Jan. 31, 2023 | Jan. 31, 2022 | |
Basis of Presentation (Details) [Line Items] | ||||||
Operating expenses (in Dollars) | $ 12 | $ 20 | $ 21 | $ 25 | ||
Net loss (in Dollars) | 21,955 | |||||
Cash in operating activities (in Dollars) | $ 14,891 | |||||
Service revenue percentage | 44% | 4% | 56% | 6% | 52% | |
Clinical services net revenue | 16% | 36% | 17% | 35% | ||
Services net accounts receivable percentage | 16% | |||||
Subsequent Event [Member] | ||||||
Basis of Presentation (Details) [Line Items] | ||||||
Line of credit (in Dollars) | $ 8,000 | |||||
Revolving line of credit (in Dollars) | $ 8,000 | |||||
Annual interest rate percentage | 5.50% |
Net income (loss) per share (De
Net income (loss) per share (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jan. 31, 2023 | Jan. 31, 2022 | Jan. 31, 2023 | Jan. 31, 2022 | |
Earnings Per Share [Abstract] | ||||
Potential common shares | 60,000 | 499,000 | 83,000 | 527,000 |
Outstanding shares | 4,189,000 | 1,091,000 | 3,392,000 | 942,000 |
Revenue Recognition (Details)
Revenue Recognition (Details) | 3 Months Ended | 6 Months Ended | ||
Jan. 31, 2023 | Jan. 31, 2022 | Jan. 31, 2023 | Jan. 31, 2022 | |
Clinical Services Revenue [Member] | ||||
Revenue Recognition (Details) [Line Items] | ||||
Percentage of clinical services business | 54% | 70% | 58% | 72% |
Revenue Recognition (Details) -
Revenue Recognition (Details) - Schedule of clinical services net revenues and percentages - Clinical services [Member] - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jan. 31, 2023 | Jan. 31, 2022 | Jan. 31, 2023 | Jan. 31, 2022 | |
Revenue category | ||||
Revenue services net | $ 8,824 | $ 23,674 | $ 19,997 | $ 43,415 |
Revenue services net, percentage | 100% | 100% | 100% | 100% |
Third-party payers [Member] | ||||
Revenue category | ||||
Revenue services net | $ 5,163 | $ 14,256 | $ 11,186 | $ 26,145 |
Revenue services net, percentage | 58% | 60% | 56% | 60% |
Medicare [Member] | ||||
Revenue category | ||||
Revenue services net | $ 1,374 | $ 2,784 | $ 3,670 | $ 5,514 |
Revenue services net, percentage | 16% | 12% | 18% | 13% |
Patient self-pay [Member] | ||||
Revenue category | ||||
Revenue services net | $ 974 | $ 2,605 | $ 2,212 | $ 4,550 |
Revenue services net, percentage | 11% | 11% | 11% | 10% |
HMO’s [Member] | ||||
Revenue category | ||||
Revenue services net | $ 1,313 | $ 4,029 | $ 2,929 | $ 7,206 |
Revenue services net, percentage | 15% | 17% | 15% | 17% |
Revenue Recognition (Details)_2
Revenue Recognition (Details) - Schedule of products revenue by geography - Products revenue [Member] - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jan. 31, 2023 | Jan. 31, 2022 | Jan. 31, 2023 | Jan. 31, 2022 | |
Revenue Recognition (Details) - Schedule of products revenue by geography [Line Items] | ||||
Products revenue | $ 7,514 | $ 10,372 | $ 14,617 | $ 17,150 |
United States [Member] | ||||
Revenue Recognition (Details) - Schedule of products revenue by geography [Line Items] | ||||
Products revenue | 4,144 | 6,754 | 8,239 | 10,617 |
Europe [Member] | ||||
Revenue Recognition (Details) - Schedule of products revenue by geography [Line Items] | ||||
Products revenue | 2,277 | 2,401 | 4,181 | 4,407 |
Asia Pacific [Member] | ||||
Revenue Recognition (Details) - Schedule of products revenue by geography [Line Items] | ||||
Products revenue | $ 1,093 | $ 1,217 | $ 2,197 | $ 2,126 |
Supplemental Disclosure for S_2
Supplemental Disclosure for Statement of Cash Flows (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jan. 31, 2023 | Jan. 31, 2022 | |
Supplemental Cash Flow Elements [Abstract] | ||
Interest paid | $ 106 | $ 112 |
Right of use assets and liabilities | 2 | 20 |
Tax on capital paid | $ 9 | $ 116 |
Inventories (Details) - Schedul
Inventories (Details) - Schedule of inventories - USD ($) $ in Thousands | Jan. 31, 2023 | Jul. 31, 2022 |
Schedule Of Inventories Abstract | ||
Raw materials | $ 1,962 | $ 1,524 |
Work in process | 2,748 | 2,459 |
Finished products | 11,013 | 11,428 |
Total inventories | $ 15,723 | $ 15,411 |
Goodwill and Long-Lived Assets
Goodwill and Long-Lived Assets (Details) - USD ($) $ in Thousands | Jan. 31, 2023 | Jul. 31, 2022 |
Goodwill [Abstract] | ||
Goodwill | $ 7,452 | $ 7,452 |
Mortgage Debt and Long Term D_3
Mortgage Debt and Long Term Debt, Net (Details) SFr in Thousands, $ in Thousands | 1 Months Ended | |||||||||
Sep. 30, 2022 USD ($) | Sep. 30, 2022 CHF (SFr) | Jun. 30, 2022 USD ($) | Mar. 31, 2022 CHF (SFr) | Sep. 29, 2021 | Jun. 30, 2021 USD ($) | Nov. 30, 2018 USD ($) | Jan. 31, 2023 USD ($) | Apr. 30, 2020 USD ($) | Apr. 30, 2020 CHF (SFr) | |
Mortgage Debt and Long Term Debt, Net (Details) [Line Items] | ||||||||||
Agreement loan | $ 4,500 | |||||||||
Term loan | 10 years | |||||||||
Bears a fixed interest rate percentage | 5.09% | |||||||||
Payments of principal and interest | $ 30 | |||||||||
Debt issuance costs | $ 72 | |||||||||
Unamortized debt issuance cost | $ 42 | |||||||||
Mortgage agreement | 3,902 | |||||||||
Cash collateral deposit | 1,000 | |||||||||
Liquid assets | $ 25,000 | |||||||||
Description of loan | Effective September 29, 2021, the Company and the mortgagee agreed to further covenant restructuring whereby (a) the liquidity covenant was reduced to 150% of the loan principal (or approximately $5,911 as of January 31, 2023) from $25,000 previously, and (b) the collateral requirement was increased from $750 to $1,000. | |||||||||
Foreign exchange rate amount | $ 400 | SFr 400 | ||||||||
Bear interest rate | 0% | |||||||||
Semiannual amortization payments (in Francs) | SFr | SFr 33 | |||||||||
Exchange rates | $ 35 | SFr 33 | ||||||||
Other income loan | $ 7,000 | |||||||||
Audit loans | $ 2,000 | |||||||||
Citibank N.A [Member] | ||||||||||
Mortgage Debt and Long Term Debt, Net (Details) [Line Items] | ||||||||||
Cash collateral deposit | $ 7,000 |
Mortgage Debt and Long Term D_4
Mortgage Debt and Long Term Debt, Net (Details) - Schedule of minimum future annual principal payments $ in Thousands | Jan. 31, 2023 USD ($) |
Schedule Of Minimum Future Annual Principal Payments Abstract | |
2023 | $ 118 |
2024 | 239 |
2025 | 249 |
2026 | 259 |
2027 | 269 |
Thereafter | 3,117 |
Total principal payments | 4,251 |
Less: current portion, included in other current liabilities and finance leases short term | (236) |
unamortized mortgage cost | (42) |
Mortgage debt - current and long term debt – net | $ 3,973 |
Leases (Details)
Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jan. 31, 2023 | Jan. 31, 2023 | Jul. 31, 2022 | |
Leases (Details) [Line Items] | |||
Initial term | 12 months | 12 months | |
Options to extend the leases | 5 years | ||
Accumulated amortization of finance lease assets | $ 248 | $ 248 | $ 210 |
Sublease income | $ 114 | $ 114 | |
Minimum [Member] | |||
Leases (Details) [Line Items] | |||
Lease term of contract | 1 year | ||
Maximum [Member] | |||
Leases (Details) [Line Items] | |||
Lease term of contract | 6 years |
Leases (Details) - Schedule of
Leases (Details) - Schedule of lease agreements include rental payments - USD ($) $ in Thousands | Jan. 31, 2023 | Jul. 31, 2022 | |
Assets | |||
Operating, Right-of-use assets | $ 13,569 | $ 15,174 | |
Finance, Property, plant and equipment, net | [1] | 134 | 172 |
Total lease assets | 13,703 | 15,346 | |
Current: | |||
Operating, Current portion of operating lease liabilities | 3,425 | 3,432 | |
Finance, Finance leases short term | 78 | 81 | |
Non-current: | |||
Operating, Operating lease liabilities, non-current | 11,132 | 12,729 | |
Finance, Other liabilities and finance leases long term | 39 | ||
Total lease liabilities | $ 14,635 | $ 16,281 | |
[1] Accumulated amortization of finance lease assets was approximately $248 and $210 as of January 31, 2023 and July 31, 2022, respectively. |
Leases (Details) - Schedule o_2
Leases (Details) - Schedule of components of lease cost - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jan. 31, 2023 | Jan. 31, 2022 | Jan. 31, 2023 | Jan. 31, 2022 | ||
Schedule Of Components Of Lease Cost Abstract | |||||
Operating lease cost – net | [1] | $ 912 | $ 1,129 | $ 1,960 | $ 2,287 |
Finance lease cost: | |||||
Amortization of leased assets | 19 | 19 | 38 | 38 | |
Interest on lease liabilities | 1 | 2 | 3 | 5 | |
Total lease cost | $ 932 | $ 1,150 | $ 2,001 | $ 2,330 | |
[1]Net of $114 sublease income for the three and six months ended January 31, 2023. |
Leases (Details) - Schedule o_3
Leases (Details) - Schedule of lease liabilities $ in Thousands | Jan. 31, 2023 USD ($) | |
Schedule Of Lease Liabilities Abstract | ||
2023, Operating leases | $ 2,080 | |
2023, Finance leases | 44 | |
2023, Total | 2,124 | |
2024, Operating leases | 3,874 | |
2024, Finance leases | 36 | |
2024, Total | 3,910 | |
2025, Operating leases | 3,541 | |
2025, Finance leases | ||
2025, Total | 3,541 | |
2026, Operating leases | 3,351 | |
2026, Finance leases | ||
2026, Total | 3,351 | |
2027, Operating leases | 2,507 | |
2027, Finance leases | ||
2027, Total | 2,507 | |
Thereafter, Operating leases | 808 | |
Thereafter, Finance lease | ||
Thereafter, Total | 808 | |
Total lease payments, Operating leases | 16,161 | |
Total lease payments, Finance leases | 80 | |
Total lease payments, Total | 16,241 | |
Less: Interest, Operating leases | (1,604) | [1] |
Less: Interest, Finance leases | (2) | [1] |
Less: Interest, Total | (1,576) | [1] |
Present value of lease liabilities, Operating leases | 14,557 | |
Present value of lease liabilities, Finance leases | 78 | |
Present value of lease liabilities, Total | $ 14,665 | |
[1] Primarily calculated using the Company’s incremental borrowing rate. |
Leases (Details) - Schedule o_4
Leases (Details) - Schedule of lease term and discount rate | Jan. 31, 2023 | Jan. 31, 2022 |
Weighted-average remaining lease term (years): | ||
Operating leases | 4 years 3 months 18 days | 5 years 2 months 12 days |
Finance leases | 10 months 24 days | 2 years |
Weighted-average discount rate: | ||
Operating leases | 4.96% | 4.98% |
Finance leases | 2.95% | 5.96% |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) $ in Thousands | Jan. 31, 2023 | Jul. 31, 2022 |
Payables and Accruals [Abstract] | ||
Reserves amount | $ 340 | $ 260 |
Accrued Liabilities (Details) -
Accrued Liabilities (Details) - Schedule of accrued liabilities - USD ($) $ in Thousands | Jan. 31, 2023 | Jul. 31, 2022 |
Schedule Of Accrued Liabilities Abstract | ||
Payroll, benefits, and commissions | $ 5,312 | $ 4,912 |
Professional fees | 1,090 | 801 |
Legal | 3,099 | 4,523 |
Other | 2,089 | 2,064 |
Accrued liabilities | $ 11,590 | $ 12,300 |
Stockholders_ Equity (Details)
Stockholders’ Equity (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||||
Oct. 07, 2020 | Jan. 31, 2018 | Jan. 31, 2023 | Jan. 31, 2022 | Jan. 31, 2023 | Jan. 31, 2022 | Jul. 31, 2022 | Sep. 30, 2017 | Jan. 31, 2011 | |
Stockholders’ Equity (Details) [Line Items] | |||||||||
Common stock, par value (in Dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | ||||||
Percentage of commission payable on equity offering | 3% | ||||||||
Common stock available for grant, description | The amendment and restatement of the Amended and Restated 2011 Plan was for purposes of, among other things, (i) increasing the shares of common stock available for grant under the Amended and Restated 2011 Plan by an additional 4,000,000 shares of common stock bringing the total number of shares available for grant to 9,000,000 shares of common stock and (ii) extending the term of the Amended and Restated 2011 Plan until October 7, 2030. | ||||||||
Common stock granted (in Shares) | 3,874,000 | 3,874,000 | |||||||
Excess tax benefits | |||||||||
Total future compensation cost | 2,344 | $ 2,344 | |||||||
Weighted average remaining life of approximately | 2 years | ||||||||
2011 Plan [Member] | |||||||||
Stockholders’ Equity (Details) [Line Items] | |||||||||
Stock units (in Shares) | 3,000,000 | ||||||||
Shares of common stock (in Shares) | 2,000,000 | ||||||||
Common stock available for grants (in Shares) | 5,000,000 | ||||||||
Common Stock [Member] | |||||||||
Stockholders’ Equity (Details) [Line Items] | |||||||||
Authorized common stock that may be issued and sold under sales agreement | $ 19,200,000 | ||||||||
Phantom Share Units (PSUs) [Member] | |||||||||
Stockholders’ Equity (Details) [Line Items] | |||||||||
Remaining PSUs awarded expired | 3 years | ||||||||
Performance share, description | During the fiscal years ended 2020 and 2019, the Company awarded additional PSUs to its executive officers. These awards provide for the grant of shares of our common stock at the end of a three-year period based on the achievement of revenue growth and adjusted EBITDA growth goals met at threshold, target or maximum levels over the respective period. The PSUs awarded to executive officers in fiscal 2019, net of forfeitures, were earned as of the three-year period ending July 31, 2022 as the growth goals at the maximum level were achieved. After TSR modification, a total of 25,200 PSUs were earned equally by two officers. As of January 31, 2023, 12,600 shares had been issued and the balance of the shares are expected to be issued in the third quarter of fiscal 2023. | ||||||||
Former officer forfeited shares (in Shares) | 15,000 | ||||||||
Shared based compensation expense | 7 | $ 96 | $ (48) | $ 162 | |||||
Restricted Stock Units (RSUs) [Member] | |||||||||
Stockholders’ Equity (Details) [Line Items] | |||||||||
Shared based compensation expense | $ 202 | $ 73 | 388 | $ 73 | |||||
Unrecognized compensation | $ 995,000 |
Stockholders_ Equity (Details)
Stockholders’ Equity (Details) - Schedule of share-based compensation expense - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jan. 31, 2023 | Jan. 31, 2022 | Jan. 31, 2023 | Jan. 31, 2022 | |
Schedule Of Share Based Compensation Expense Abstract | ||||
Stock options and performance stock units | $ 313 | $ 606 | $ 557 | $ 822 |
Restricted stock units | 202 | 73 | 388 | 73 |
Total | $ 515 | $ 679 | $ 945 | $ 895 |
Stockholders_ Equity (Details_2
Stockholders’ Equity (Details) - Schedule of expense related to share-based payment arrangements - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jan. 31, 2023 | Jan. 31, 2022 | Jan. 31, 2023 | Jan. 31, 2022 | |
Schedule Of Expense Related To Share Based Payment Arrangements Abstract | ||||
Selling, general and administrative | $ 494 | $ 667 | $ 904 | $ 879 |
Cost of revenues | 21 | 12 | 41 | 16 |
Total | $ 515 | $ 679 | $ 945 | $ 895 |
Stockholders_ Equity (Details_3
Stockholders’ Equity (Details) - Schedule of stock option activity | 6 Months Ended |
Jan. 31, 2023 USD ($) $ / shares shares | |
Schedule Of Stock Option Activity Abstract | |
Options, Outstanding at beginning of period | 3,941,783 |
Weighted Average Exercise Price, Outstanding at beginning of period (in Dollars per share) | $ / shares | $ 3 |
Aggregate Intrinsic Value, Outstanding at beginning of period (in Dollars) | $ | |
Options, Awarded | 615,000 |
Weighted Average Exercise Price, Awarded (in Dollars per share) | $ / shares | $ 2 |
Options, Exercised | |
Options, Cancelled or expired | (368,216) |
Weighted Average Exercise Price, Cancelled or expired (in Dollars per share) | $ / shares | $ 4.33 |
Options, Outstanding at end of period | 4,188,567 |
Weighted Average Exercise Price, Outstanding at end of period (in Dollars per share) | $ / shares | $ 2.73 |
Weighted Average Remaining Contractual Term, Outstanding at end of period | 2 years 7 months 6 days |
Aggregate Intrinsic Value, Outstanding at end of period (in Dollars) | $ | |
Options, Exercisable at end of period | 1,734,109 |
Weighted Average Remaining Contractual Term, Exercisable at end of period | 4 months 24 days |
Stockholders_ Equity (Details_4
Stockholders’ Equity (Details) - Schedule of PSU’s granted and outstanding - 10/19/2020 [Member] $ in Thousands | 6 Months Ended |
Jan. 31, 2023 USD ($) shares | |
Stockholders’ Equity (Details) - Schedule of PSU’s granted and outstanding [Line Items] | |
Total Grant | 98,600 |
Forfeitures | (40,300) |
Outstanding | 58,300 |
Fair Market Value At Grant Date (in Dollars) | $ | $ 122 |
Stockholders_ Equity (Details_5
Stockholders’ Equity (Details) - Schedule of summarizes restricted stock unit (“RSU”) activity - Restricted Stock Units (RSUs) [Member] $ / shares in Units, $ in Thousands | 6 Months Ended |
Jan. 31, 2023 USD ($) $ / shares shares | |
Stockholders’ Equity (Details) - Schedule of summarizes restricted stock unit (“RSU”) activity [Line Items] | |
Number of RSUs outstanding, Outstanding at beginning of period | 502,187 |
Weighted Average Fair Value per Unit at Date of Grant or Vesting, Outstanding at beginning of period (in Dollars per share) | $ / shares | $ 2.95 |
Aggregate Intrinsic Value, Outstanding at beginning of period (in Dollars) | $ | |
Number of RSUs outstanding, Granted | 100,000 |
Weighted Average Fair Value per Unit at Date of Grant or Vesting, Granted (in Dollars per share) | $ / shares | $ 1.97 |
Number of RSUs outstanding, Vested | (86,667) |
Weighted Average Fair Value per Unit at Date of Grant or Vesting, Vested (in Dollars per share) | $ / shares | $ 3.39 |
Number of RSUs outstanding, Cancelled | |
Weighted Average Fair Value per Unit at Date of Grant or Vesting, Cancelled (in Dollars per share) | $ / shares | |
Number of RSUs outstanding, Outstanding at end of period | 515,520 |
Weighted Average Fair Value per Unit at Date of Grant or Vesting, Outstanding at end of period (in Dollars per share) | $ / shares | $ 2.69 |
Weighted Average Remaining Contractual Term, Outstanding at end of period | 1 year 6 months |
Aggregate Intrinsic Value, Outstanding at end of period (in Dollars) | $ | $ 807 |
Number of RSUs outstanding, Expected to vest at end of period | 515,520 |
Weighted Average Remaining Contractual Term, Expected to vest at end of period | 1 year 6 months |
Segment Reporting (Details) - S
Segment Reporting (Details) - Schedule of operating results of the reportable segments - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jan. 31, 2023 | Jan. 31, 2022 | Jan. 31, 2023 | Jan. 31, 2022 | |
Clinical Services [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | $ 8,824 | $ 23,674 | $ 19,997 | $ 43,415 |
Operating costs and expenses: | ||||
Cost of revenues | 10,463 | 12,586 | 20,545 | 23,789 |
Research and development | 306 | 89 | 603 | 96 |
Selling, general and administrative | 6,943 | 6,811 | 13,493 | 12,812 |
Legal fee expense | 107 | 148 | 171 | 205 |
Total operating costs and expenses | 17,819 | 19,634 | 34,812 | 36,902 |
Operating income (loss) | (8,995) | 4,040 | (14,815) | 6,513 |
Other income (expense): | ||||
Interest, net | (1) | (3) | (3) | (5) |
Other | 7 | 5 | 12 | 54 |
Foreign exchange loss | ||||
Income (loss) before income taxes | (8,989) | 4,042 | (14,806) | 6,562 |
Depreciation and amortization included above | 386 | 438 | 918 | 856 |
Share-based compensation included in above: | ||||
Selling, general and administrative | 65 | 16 | 114 | 36 |
Cost of revenues | 15 | 12 | 31 | 16 |
Total | 80 | 28 | 145 | 52 |
Capital expenditures | 196 | 283 | 359 | 593 |
Products [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 7,514 | 10,372 | 14,617 | 17,150 |
Operating costs and expenses: | ||||
Cost of revenues | 4,616 | 5,252 | 9,205 | 9,322 |
Research and development | 1,113 | 711 | 1,803 | 1,443 |
Selling, general and administrative | 2,556 | 3,039 | 4,986 | 6,134 |
Legal fee expense | 11 | 36 | 13 | |
Total operating costs and expenses | 8,296 | 9,002 | 16,030 | 16,912 |
Operating income (loss) | (782) | 1,370 | (1,413) | 238 |
Other income (expense): | ||||
Interest, net | 29 | 9 | 54 | 18 |
Other | 2 | 3 | 4 | 5 |
Foreign exchange loss | 1,472 | (450) | 675 | (831) |
Income (loss) before income taxes | 721 | 932 | (680) | (570) |
Depreciation and amortization included above | 171 | 190 | 336 | 402 |
Share-based compensation included in above: | ||||
Selling, general and administrative | 20 | 1 | 40 | 1 |
Cost of revenues | 6 | 11 | ||
Total | 26 | 1 | 51 | 1 |
Capital expenditures | 632 | 730 | 938 | 1,216 |
Other [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | ||||
Operating costs and expenses: | ||||
Cost of revenues | ||||
Research and development | 12 | 20 | 21 | 25 |
Selling, general and administrative | 2,313 | 4,616 | 4,784 | 6,572 |
Legal fee expense | 877 | 2,697 | 1,859 | 3,909 |
Total operating costs and expenses | 3,202 | 7,333 | 6,664 | 10,506 |
Operating income (loss) | (3,202) | (7,333) | (6,664) | (10,506) |
Other income (expense): | ||||
Interest, net | 34 | 62 | 81 | 94 |
Other | 116 | (358) | 114 | (554) |
Foreign exchange loss | ||||
Income (loss) before income taxes | (3,052) | (7,629) | (6,469) | (10,966) |
Depreciation and amortization included above | 91 | 77 | 174 | 148 |
Share-based compensation included in above: | ||||
Selling, general and administrative | 409 | 650 | 749 | 842 |
Cost of revenues | ||||
Total | 409 | 650 | 749 | 842 |
Capital expenditures | 41 | 201 | 224 | 438 |
Consolidated [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 16,338 | 34,046 | 34,614 | 60,565 |
Operating costs and expenses: | ||||
Cost of revenues | 15,079 | 17,838 | 29,750 | 33,111 |
Research and development | 1,431 | 820 | 2,427 | 1,564 |
Selling, general and administrative | 11,812 | 14,466 | 23,263 | 25,518 |
Legal fee expense | 995 | 2,845 | 2,066 | 4,127 |
Total operating costs and expenses | 29,317 | 35,969 | 57,506 | 64,320 |
Operating income (loss) | (12,979) | (1,923) | (22,892) | (3,755) |
Other income (expense): | ||||
Interest, net | 62 | 68 | 132 | 107 |
Other | 125 | (350) | 130 | (495) |
Foreign exchange loss | 1,472 | (450) | 675 | (831) |
Income (loss) before income taxes | (11,320) | (2,655) | (21,955) | (4,974) |
Depreciation and amortization included above | 648 | 705 | 1,428 | 1,406 |
Share-based compensation included in above: | ||||
Selling, general and administrative | 494 | 667 | 903 | 879 |
Cost of revenues | 21 | 12 | 42 | 16 |
Total | 515 | 679 | 945 | 895 |
Capital expenditures | $ 869 | $ 1,214 | $ 1,521 | $ 2,247 |
Contingencies (Details)
Contingencies (Details) - USD ($) $ in Thousands | 1 Months Ended | 6 Months Ended | 12 Months Ended | |
Jul. 31, 2022 | May 31, 2022 | Jan. 31, 2023 | Jul. 31, 2022 | |
Contingencies [Abstract] | ||||
Approval percentage | 80% | |||
Accrued expenses | $ 2,600 | |||
Payment of other income | $ 1,024 | $ 2,123 |
Subsequent Events _ Agreement_2
Subsequent Events – Agreement to Sell Assets of Clinical Labs Division to Labcorp (Details) | 6 Months Ended |
Jan. 31, 2023 USD ($) | |
Subsequent Events [Abstract] | |
Cash | $ 146,000,000 |
Shares outstanding rate | 11% |
Termination fee | $ 5,000,000 |
Reimbursement of buyer’s expenses | $ 5,000,000 |