Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Apr. 30, 2023 | Jun. 05, 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 | 49,728,084 | |
Amendment Flag | false | |
Entity Central Index Key | 0000316253 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Document Period End Date | Apr. 30, 2023 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
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 Incorporation, State or Country Code | NY | |
Entity Tax Identification Number | 13-2866202 | |
Entity Address, Address Line One | 81 Executive Blvd | |
Entity Address, Address Line Two | Suite 3 Farmingdale | |
Entity Address, State or Province | NY | |
Entity Address, City or Town | New York | |
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 $0.01 par | |
Security Exchange Name | NYSE |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) | Apr. 30, 2023 | Jul. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 2,632,000 | $ 21,603,000 |
Accounts receivable, net | 9,636,000 | 11,516,000 |
Inventories, net | 15,289,000 | 15,411,000 |
Prepaid expenses and other current assets | 4,442,000 | 5,824,000 |
Total current assets | 31,999,000 | 54,354,000 |
Property, plant, and equipment, net | 17,506,000 | 17,259,000 |
Right-of-use assets, net | 13,457,000 | 15,174,000 |
Goodwill | 7,452,000 | 7,452,000 |
Other, including restricted cash of $1,000 at April 30, 2023 and July 31, 2022 | 1,647,000 | 1,618,000 |
Total assets | 72,061,000 | 95,857,000 |
Current liabilities: | ||
Accounts payable – trade | 13,645,000 | 8,508,000 |
Accrued liabilities | 17,494,000 | 12,300,000 |
Current portion of operating lease liabilities | 3,706,000 | 3,432,000 |
Mortgage debt, net | 3,821,000 | |
Loans payable, net | 3,354,000 | |
Other current debt and finance leases | 132,000 | 310,000 |
Total current liabilities | 42,152,000 | 24,550,000 |
Other liabilities and finance leases long term | 39,000 | |
Operating lease liabilities, non-current, net | 10,734,000 | 12,729,000 |
Long term debt - net | 247,000 | 4,077,000 |
Total liabilities | 53,133,000 | 41,395,000 |
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: 49,669,488 at April 30, 2023 and 48,720,454 at July 31, 2022 | 496,000 | 487,000 |
Additional paid-in capital | 342,055,000 | 339,462,000 |
Accumulated deficit | (325,780,000) | (288,638,000) |
Accumulated other comprehensive income | 2,157,000 | 3,151,000 |
Total stockholders’ equity | 18,928,000 | 54,462,000 |
Total liabilities and stockholders’ equity | $ 72,061,000 | $ 95,857,000 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (Unaudited) (Parentheticals) - USD ($) $ in Thousands | Apr. 30, 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 | 49,669,488 | 48,720,454 |
Common stock, shares outstanding | 49,669,488 | 48,720,454 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Apr. 30, 2023 | Apr. 30, 2022 | Apr. 30, 2023 | Apr. 30, 2022 | |
Income Statement [Abstract] | ||||
Revenues | $ 16,107 | $ 26,222 | $ 50,721 | $ 86,787 |
Operating costs and expenses: | ||||
Cost of revenues | 14,469 | 16,049 | 44,219 | 49,160 |
Research and development | 975 | 1,133 | 3,402 | 2,697 |
Selling, general and administrative | 12,022 | 11,442 | 35,285 | 36,960 |
Legal and related expense, net | 4,286 | 734 | 6,352 | 4,861 |
Total operating costs and expenses | 31,752 | 29,358 | 89,258 | 93,678 |
Operating loss | (15,645) | (3,136) | (38,537) | (6,891) |
Other income (expense): | ||||
Interest, net | (37) | 54 | 95 | 161 |
Other | 148 | (716) | 278 | (1,211) |
Foreign exchange (loss) gain | 347 | (1,056) | 1,022 | (1,887) |
Total other income (expense) | 458 | (1,718) | 1,395 | (2,937) |
Loss before income taxes | (15,187) | (4,854) | (37,142) | (9,828) |
Income taxes | ||||
Net loss | $ (15,187) | $ (4,854) | $ (37,142) | $ (9,828) |
Net loss per common share: | ||||
Basic and diluted (in Dollars per share) | $ (0.31) | $ (0.1) | $ (0.76) | $ (0.2) |
Weighted average common shares outstanding: | ||||
Basic and diluted (in Shares) | 49,384 | 48,713 | 48,944 | 48,552 |
Consolidated Statements of Op_2
Consolidated Statements of Operations (Unaudited) (Parentheticals) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Apr. 30, 2023 | Apr. 30, 2022 | Apr. 30, 2023 | Apr. 30, 2022 | |
Income Statement [Abstract] | ||||
Diluted, net loss per common share | $ (0.31) | $ (0.10) | $ (0.76) | $ (0.20) |
Diluted, weighted average common shares outstanding | 49,384 | 48,713 | 48,944 | 48,552 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Apr. 30, 2023 | Apr. 30, 2022 | Apr. 30, 2023 | Apr. 30, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (15,187) | $ (4,854) | $ (37,142) | $ (9,828) |
Other comprehensive (loss) income: | ||||
Foreign currency translation adjustments | (372) | 911 | (994) | 1,530 |
Comprehensive loss | $ (15,559) | $ (3,943) | $ (38,136) | $ (8,298) |
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 | (9,828) | (9,828) | |||
Share-based compensation charges | 1,057 | 1,057 | |||
Exercise of stock options | 28 | 28 | |||
Exercise of stock options (in Shares) | 11,300 | ||||
Issuance of common stock for employee 401(k) plan match | $ 2 | 812 | 814 | ||
Issuance of common stock for employee 401(k) plan match (in Shares) | 237,383 | ||||
Foreign currency translation adjustments | 1,530 | 1,530 | |||
Balance at Apr. 30, 2022 | $ 487 | 339,023 | (280,205) | 2,882 | 62,187 |
Balance (in Shares) at Apr. 30, 2022 | 48,720,454 | ||||
Balance at Jan. 31, 2022 | $ 485 | 338,021 | (275,351) | 1,971 | 65,126 |
Balance (in Shares) at Jan. 31, 2022 | 48,471,771 | ||||
Net loss for the period | (4,854) | (4,854) | |||
Share-based compensation charges | 162 | 162 | |||
Exercise of stock options | 28 | 28 | |||
Exercise of stock options (in Shares) | 11,300 | ||||
Issuance of common stock for employee 401(k) plan match | $ 2 | 812 | 814 | ||
Issuance of common stock for employee 401(k) plan match (in Shares) | 237,383 | ||||
Foreign currency translation adjustments | 911 | 911 | |||
Balance at Apr. 30, 2022 | $ 487 | 339,023 | (280,205) | 2,882 | 62,187 |
Balance (in Shares) at Apr. 30, 2022 | 48,720,454 | ||||
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 | (37,142) | (37,142) | |||
Share-based compensation charges | 1,508 | 1,508 | |||
Vesting of restricted stock units | $ 1 | 1 | |||
Vesting of restricted stock units (in Shares) | 86,667 | ||||
Vesting of performance stock units | |||||
Vesting of performance stock units (in Shares) | 12,600 | ||||
Exercise of stock options | 14 | $ 14 | |||
Exercise of stock options (in Shares) | 6,667 | 6,667 | |||
Issuance of common stock for employee 401(k) plan match | $ 8 | 1,071 | $ 1,079 | ||
Issuance of common stock for employee 401(k) plan match (in Shares) | 843,100 | ||||
Foreign currency translation adjustments | (994) | (994) | |||
Balance at Apr. 30, 2023 | $ 496 | 342,055 | (325,780) | 2,157 | 18,928 |
Balance (in Shares) at Apr. 30, 2023 | 49,669,488 | ||||
Balance at Jan. 31, 2023 | $ 487 | 340,407 | (310,593) | 2,529 | 32,830 |
Balance (in Shares) at Jan. 31, 2023 | 48,733,054 | ||||
Net loss for the period | (15,187) | (15,187) | |||
Share-based compensation charges | 563 | 563 | |||
Vesting of restricted stock units | $ 1 | 1 | |||
Vesting of restricted stock units (in Shares) | 86,667 | ||||
Exercise of stock options | 14 | 14 | |||
Exercise of stock options (in Shares) | 6,667 | ||||
Issuance of common stock for employee 401(k) plan match | $ 8 | 1,071 | 1,079 | ||
Issuance of common stock for employee 401(k) plan match (in Shares) | 843,100 | ||||
Foreign currency translation adjustments | (372) | (372) | |||
Balance at Apr. 30, 2023 | $ 496 | $ 342,055 | $ (325,780) | $ 2,157 | $ 18,928 |
Balance (in Shares) at Apr. 30, 2023 | 49,669,488 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Apr. 30, 2023 | Apr. 30, 2022 | |
Cash flows from operating activities: | ||
Net loss | $ (37,142) | $ (9,828) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization of property, plant and equipment | 2,076 | 1,910 |
Amortization of intangible assets | 228 | |
Share-based compensation charges | 1,508 | 1,057 |
Share-based 401(k) employer match expense | 772 | 645 |
Foreign exchange (gain) loss | (1,081) | 1,788 |
Realized loss on marketable securities | 1,283 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | 1,861 | (1,556) |
Inventories | 91 | (2,273) |
Prepaid expenses and other assets | 1,350 | 179 |
Accounts payable – trade | 5,128 | (458) |
Accrued liabilities, other current liabilities and other liabilities | 5,492 | (495) |
Total adjustments | 17,197 | 2,308 |
Net cash used in operating activities | (19,945) | (7,520) |
Cash flows from investing activities: | ||
Sales of marketable securities | 28,695 | |
Capital expenditures | (2,187) | (3,103) |
Net cash (used in) provided by investing activities | (2,187) | 25,592 |
Cash flows from financing activities: | ||
Proceeds from exercise of stock options | 14 | 28 |
Proceeds from borrowings under Revolving Credit Agreement | 7,565 | |
Repayments under Revolving Credit Agreement | (4,211) | |
Repayments under mortgage agreement, finance leases and other | (253) | (173) |
Net cash provided by (used in) financing activities | 3,115 | (145) |
Effect of exchange rate changes on cash and cash equivalents | 46 | (71) |
(Decrease) increase in cash and cash equivalents and restricted cash | (18,971) | 17,856 |
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 | 3,632 | 32,130 |
The composition of total cash and cash equivalents and restricted cash is as follows: | ||
Cash and cash equivalents | 2,632 | 31,130 |
Restricted cash included in other assets | 1,000 | 1,000 |
Total cash and cash equivalents and restricted cash | $ 3,632 | $ 32,130 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Apr. 30, 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 April 30, 2023, the consolidated statements of operations, comprehensive loss and stockholders’ equity for the three and nine months ended April 30, 2023 and 2022, and the consolidated statements of cash flows for the nine months ended April 30, 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 nine months ended April 30, 2023 are not necessarily indicative of the results that may be expected for the fiscal year ending July 31, 2023. Change in s r 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, Clinical Services and Products, 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 nine months ended April 30, 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 nine months ended April 30, 2023 now included in the “Other” segment were $12 and $33, respectively. The operating expenses of Enzo Therapeutics for the three and nine months ended April 30, 2022 now included in the “Other” segment were $9 and $34, respectively. Ransomware a On April 6, 2023, the Company experienced a ransomware attack that impacted certain critical information technology systems. In response, we promptly deployed containment measures, including disconnecting our systems from the internet, launching an investigation with assistance from third-party cybersecurity experts, and notifying law enforcement. We adhered to our disaster recovery plan, which enabled us to maintain operations throughout the incident response process. The Company’s facilities are open, and continue to provide services to patients and partners. On April 11, 2023, we became aware that certain data, including names, test information, and Social Security numbers, was accessed, and in some instances, exfiltrated from the Company’s information technology systems as part of this incident. The investigation of this incident and the assessment of its impact is ongoing. However, the Company identified unauthorized access to or acquisition of clinical test information of approximately 2,470,000 individuals. The Social Security numbers of approximately 600,000 of these individuals may also have been involved. The Company is evaluating whether its employees’ information may have been involved. The Company has provided notice to the individuals whose information may have been involved, as well as to regulatory authorities, in accordance with applicable law. The Company has incurred, and may continue to incur, certain expenses related to this attack, including expenses to respond to, remediate and investigate this matter. Further, the Company remains subject to risks and uncertainties as a result of the incident, including as a result of the data that was accessed or exfiltrated from the Company’s network as noted above. Additionally, security and privacy incidents have led to, and may continue to lead to, additional regulatory scrutiny and class action litigation exposure. We are in the process of evaluating the full scope of the costs and related impacts of this incident. Liquidity and Going Concern During the nine months ended April 30, 2023, the Company incurred a net loss of $37,142, used cash in operating activities of $19,945 and had as of April 30, 2023 a working capital deficit of $10,153. 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 evaluated and is acting upon 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, the Company entered into a revolving line of credit for up to $8 million based on eligible receivables in March 2023, sold 10% convertible debentures and warrants for proceeds of $7 million in May 2023, and entered into an agreement to sell substantially all the operating assets and assign certain liabilities of our clinical laboratory business in March 2023, with an expected closing in July 2023. Additionally, in May 2023, we filed a Form S-3 “shelf” registration statement and sales agreement prospectus covering the offering, issuance and sale of our Common Stock that can be issued and sold under the sales agreement in an aggregate amount of up to $30 million. A total of $150 million of securities, including those covered by the Sales Agreement, may be sold under the shelf registration when it is declared effective. See Note 10 Stockholders equity for additional information. There can be no assurance that these capital raising strategies will ultimately prove to be successful, and the Company may need to raise additional capital during the current fiscal year. Our liquidity plans are subject to a number of risks and uncertainties, some of which are outside our control. The revolving line of credit agreement and the 10% convertible debenture securities (discussed below) both contain clauses that require our closing the asset sale with Labcorp within a given time frame. 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. Clinical Labs Asset Sale Agreement 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 of the Clinical Labs division. The sale is expected to close in July 2023, at which time we will exit the clinical laboratory services business. See Note 13 Clinical Labs Asset Sale Agreement with Labcorp for additional information. Revolving Line of Credit Agreement On March 31, 2023, the Company entered into a Revolving Loan and Security Agreement with Gemino Healthcare Finance, LLC d/b/a SLR Healthcare ABL as lender specializing in direct lending to middle-market companies in the healthcare sector. The credit facility provides for a maximum $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. As of April 30, 2023, the outstanding balance of the revolving loan was $3,354. See Note 7 Mortgage and loans payable, net for additional information. Sale of 10% Convertible Debentures and Warrants Subsequent to our fiscal quarter ended April 30, 2023, the Company entered into a Securities Purchase Agreement on May 19, 2023 for 10% Original Issue Discount Secured Convertible Debentures with an aggregate principal amount of $7,608,696 with a conversion price of $3.01 per share and (ii) warrants to purchase up to 1,000,000 shares of the Company’s common stock, par value $0.01 per share for an exercise price of $2.31 per share, for a total purchase price of $7,000,000. The Purchase Agreement contains customary representations, warranties and covenants. See Note 14 Subsequent Events for additional information. 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 nine months ended April 30, 2022 represented 43% and 49%, respectively of all services revenues. The rate of transmission of COVID-19 and the severity of its variants have dramatically declined in the U.S. Revenues from COVID-19 testing during the three and nine months ended April 30, 2023 represented approximately 4% and 5%, 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. 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 Clinical Services business. The Company assessed certain accounting matters that generally require consideration of forecasted financial information in context with the information reasonably available to the Company, including inflation and actions by the Federal Reserve to increase interest rates as of April 30, 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 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, the Financial Accounting Standards Board (“FASB” issued Accounting Standards Update (“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 nine months ended April 30, 2023, respectively and 13% of the Clinical Services net accounts receivable as of April 30, 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 30% and 34% of Clinical Services net revenue for the three and nine months ended April 30, 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 | 9 Months Ended |
Apr. 30, 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 nine months ended April 30, 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 nine months ended April 30, 2023, approximately 173,000 and 105,000, 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 nine months ended April 30, 2022, approximately 438,000 and 510,000, 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 nine months ended April 30, 2023, the effect of approximately 4,097,000 and 3,627,000, 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 nine months ended April 30, 2022, the effect of 1,319,000 and 1,068,000, 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 | 9 Months Ended |
Apr. 30, 2023 | |
Revenue Recognition [Abstract] | |
Revenue Recognition | Note 3 – Revenue Recognition Clinical Services Revenue The Company accounts for revenue pursuant to Accounting Standards Codification (“ASC”) Topic 606. Service revenues in the Company’s clinical services business accounted for 54% and 71% of the Company’s total revenues for three months ended April 30, 2023 and 2022, respectively and 56% and 71% for the nine months ended April 30, 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 $ 4,451 52 % $ 10,817 58 % Medicare 1,500 17 2,436 13 Patient self-pay 1,304 15 2,177 12 HMOs 1,367 16 3,200 17 Total $ 8,622 100 % $ 18,630 100 % Nine months ended Nine months ended Revenue category Third-party payer $ 15,638 55 % $ 36,962 60 % Medicare 5,170 18 7,949 13 Patient self-pay 3,516 12 6,727 10 HMOs 4,295 15 10,407 17 Total $ 28,619 100 % $ 62,045 100 % For three and nine months ended April 30, 2023 and 2022, all of the Company’s clinical services revenues were generated within the United States. Products Revenue In accordance with ASC Topic 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 Nine Months Ended 2023 2022 2023 2022 United States $ 5,043 $ 4,422 $ 13,282 $ 15,039 Europe 1,688 2,169 5,869 6,576 Asia Pacific 754 1,001 2,951 3,127 Products revenue $ 7,485 $ 7,592 $ 22,102 $ 24,742 As of February 1, 2023 and 2022, the consolidated balance of accounts receivables was $10,866 and $15,316, respectively. As of August 1, 2022 and 2021, the consolidated balance of accounts receivable was $11,516 and $10,198, respectively. |
Supplemental Disclosure for Sta
Supplemental Disclosure for Statement of Cash Flows | 9 Months Ended |
Apr. 30, 2023 | |
Supplemental Disclosure for Statement of Cash Flows [Abstract] | |
Supplemental disclosure for statement of cash flows | Note 4 – Supplemental disclosure for statement of cash flows In the nine months ended April 30, 2023 and 2022, interest paid by the Company was $204 and $167, respectively. For the nine months ended April 30, 2023 and 2022, the net reductions in the measurement of right of use assets and liabilities included in cash flows from operating activities was $5 and $29, respectively. For the nine months ended April 30, 2023, the Company recorded right of use assets and operating lease liabilities of $1,717. For the nine months ended April 30, 2023 and 2022, tax on capital paid by the Company was $9 and $120, respectively. |
Inventories
Inventories | 9 Months Ended |
Apr. 30, 2023 | |
Inventories [Abstract] | |
Inventories | Note 5 – Inventories Inventories consist of the following: April 30, July 31, Raw materials $ 2,061 $ 1,524 Work in process 2,835 2,459 Finished products 10,393 11,428 $ 15,289 $ 15,411 |
Goodwill and Long-Lived Assets
Goodwill and Long-Lived Assets | 9 Months Ended |
Apr. 30, 2023 | |
Goodwill and Long-Lived Assets [Abstract] | |
Goodwill and Long-Lived Assets | Note 6 – Goodwill and Long-Lived Assets The Company’s carrying amount of goodwill is in the Clinical Labs Services segment and is $7,452 as of April 30, 2023 and July 31, 2022. 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. Primarily based on the Asset Purchase Agreement with Labcorp, the Company has determined that there is no impairment of goodwill or long-lived assets at April 30, 2023. |
Mortgage and Loans Payable, Net
Mortgage and Loans Payable, Net | 9 Months Ended |
Apr. 30, 2023 | |
Debt Disclosure [Abstract] | |
Mortgage and Loans payable, net | Note 7 – Mortgage and Loans payable, net Loans payable, net On March 31, 2023, we entered into a Revolving Loan and Security Agreement (the “Credit Facility”) among Enzo Clinical Labs, Inc. and Enzo Life Sciences, Inc., and the Company as borrowers and certain of its domestic subsidiaries, as guarantors (the “Guarantors”), and Gemino Healthcare Finance, LLC d/b/a SLR Healthcare ABL as lender (“SLR”). The Credit Facility provides for a maximum $8 million revolving line of credit. The Company is using the borrowing proceeds under the Credit Facility for working capital and general corporate purposes. The commitment under the Credit Facility expires after one year and all outstanding borrowings under the Credit Facility will become due and payable at that time. Prior to its expiration, the Company expects to prepay and terminate the Credit Facility upon the closing of the Asset Purchase Agreement pertaining to the Clinical Labs business, and a standard termination fee would be payable in connection therewith. The Credit Facility is secured by a first priority perfected security interest in the collateral. The collateral includes substantially all the U.S. assets of the Company and the Guarantors, including among other assets, cash, receivables, inventory and fixed assets. Borrowings under the Credit Facility, which are based on eligible receivables of the Company’s Clinical Labs and U.S.-based Life Sciences operating segments, accrue interest at the rate per annum equal to Term SOFR (Secured Overnight Financing Rate) for a three-month tenor of 5.30% at April 30, 2023 plus 5.50%. Other fees, such as an unused line fee and a collateral monitoring fee, also apply. The Company borrowed $5,500 under the Credit Facility upon the closing thereof. As of April 30, 2023, the net balance outstanding was $3,354, which is classified as Loans payable, net in current liabilities. The Credit Facility includes customary affirmative and negative covenants for revolving credit facilities of this nature, including certain limitations on the incurrence of additional indebtedness and liens. In addition, the Credit Facility requires the Borrowers to maintain certain minimum liquidity levels as of the last day of each calendar month. The levels decline over time, starting at $4 million as of April 30, 2023, then $3 million as of May 31, 2023 and $2 million as of the end of each month thereafter. As of April 30, 2023, the Company was not in compliance with SLR’s minimum liquidity covenant as per the strict definitions in the agreement pertaining to qualified cash, which constituted an event of default. On June 12, 2023, SLR and the Company agreed to a waiver limited to the specific event of default with respect to the minimum liquidity covenant. The Credit Facility includes customary events of default for revolving credit facilities of this nature, including failure to pay outstanding principal or interest, failure of applicable representations or warranties to be correct in any material respects, failure to perform any other term, covenant or agreement, certain defaults upon obligations under the Employee Retirement Income Security Act, bankruptcy or a change in control. Such events of default would require the repayment of any outstanding borrowings and the termination of the right to borrow additional funds under the Credit Facility. 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 and March 2023, the subsidiary made its second and third semi-annual principal repayments of CHF 33 (or $38 based on exchange rates). Based on this amortization schedule, the loan will be repaid by September 2027. The current portion of this loan of $75 is included in other current debt and finance leases and the long term portion of $247 is in long term debt – net as of April 30, 2023. Mortgage 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 $40 at April 30, 2023. At April 30, 2023, the balance owed by the subsidiary under the mortgage agreement was $3,861. 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 April 30, 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 April 30, 2023) from $25,000 previously, and (b) the collateral requirement was increased from $750 to $1,000. As of April 30, 2023, the Company was not in compliance with the liquidity covenant or an unsubordinated liabilities to net capital base leverage ratio covenant. While the Company believes it will be able to either achieve compliance or obtain waivers going forward, as there can be no assurances, all of the mortgage debt is classified as current in the consolidated balance sheet as of April 30, 2023. Minimum future annual principal payments under the mortgage and Corona Krise agreements as of April 30, 2023 are as follows: July 31, Total 2023 $ 41 2024 242 2025 252 2026 261 2027 270 Thereafter 3,117 Total principal payments 4,183 Less: current portion, included in other current liabilities and finance leases (75 ) unamortized mortgage cost (40 ) Mortgage and Corona Krise debt - current and long term – net $ 4,068 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 was provided in January 2023. We have been notified by Citibank N.A. that on the SBA Forgiveness Portal, the status of our PPP loan forgiveness audit shows as “Review Complete.” |
Leases
Leases | 9 Months Ended |
Apr. 30, 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 April 30, July 31, Assets Operating Right-of-use assets $ 13,457 $ 15,174 Finance Property, plant and equipment, net (a) 144 172 Total lease assets $ 13,601 $ 15,346 Liabilities Current: Operating Current portion of operating lease liabilities $ 3,706 $ 3,432 Finance Finance leases short term 57 81 Non-current: Operating Operating lease liabilities, non-current 10,734 12,729 Finance Other liabilities and finance leases long term — 39 Total lease liabilities $ 14,497 $ 16,281 (a) Accumulated amortization of finance lease assets was approximately $267 and $210 as of April 30, 2023 and July 31, 2022, respectively. Components of lease cost were as follows: Three months ended Nine months ended 2023 2022 2023 2022 Operating lease cost – net (a) $ 937 $ 1,085 $ 2,897 $ 3,372 Finance lease cost: Amortization of leased assets 19 19 57 57 Interest on lease liabilities 1 3 4 8 Total lease cost $ 957 $ 1,107 $ 2,958 $ 3,437 (a) Net of $126 and $252 sublease income for the three and nine months ended April 30, 2023, respectively. The maturity of the Company’s lease liabilities as of April 30, 2023 is as follows: Maturity of lease liabilities, years ending July 31, Operating Finance Total 2023 $ 1,137 $ 22 $ 1,159 2024 4,254 37 4,291 2025 3,816 — 3,816 2026 3,431 — 3,431 2027 2,507 — 2,507 Thereafter 808 — 808 Total lease payments 15,953 59 16,012 Less: Interest (a) (1,513 ) (2 ) (1,515 ) Present value of lease liabilities $ 14,440 $ 57 $ 14,497 (a) Primarily calculated using the Company’s incremental borrowing rate. Lease term and discount rate for the nine months ended April 30 were as follows: Lease term and discount rate 2023 2022 Weighted-average remaining lease term (years): Operating leases 4.0 years 5.0 years Finance leases 0.7 years 1.7 years Weighted-average discount rate: Operating leases 5.18 % 4.97 % Finance leases 3.31 % 5.20 % See Note 4 for cash flow information on cash paid for amounts included in the measurement of lease liabilities for the three and nine months ended April 30, 2023 and 2022. |
Accrued Liabilities
Accrued Liabilities | 9 Months Ended |
Apr. 30, 2023 | |
Payables and Accruals [Abstract] | |
Accrued Liabilities | Note 9 – Accrued Liabilities Accrued liabilities consist of: April 30, July 31, Payroll, benefits, and commissions $ 3,970 $ 4,912 Professional fees 1,104 801 Legal 7,154 4,523 Other 5,266 2,064 $ 17,494 $ 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 April 30, 2023 and July 31, 2022, the Company has established a reserve of $290 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 | 9 Months Ended |
Apr. 30, 2023 | |
Stockholders’ Equity [Abstract] | |
Stockholders’ equity | Note 10 – Stockholders’ equity Controlled Equity Offering In May 2023, the Company entered into a sales agreement (the “Sales Agreement”) with B. Riley Securities, Inc. as sales agent (“Riley”). Under the Sales Agreement, the Company may offer and sell, from time to time, through Riley, shares of the Company’s common stock, par value $0.01 per share (“Shares”) having an aggregate offering price of up to $30 million. The Company pays Riley a commission of 3.0% of the aggregate gross proceeds received under the Sale Agreement. The Company is not obligated to make any sales of Shares under the Sales Agreement. The offering of Shares pursuant to the Sales Agreement will terminate upon the earlier of (a) the sale of all of the Shares subject to the Sales Agreement or (b) the termination of the Sales Agreement by Riley or the Company, as permitted therein. As of the date of issuance of these financial statements, there have been no sales of Shares under the Sales Agreement. In May 2023, the Company filed with the SEC a “shelf” registration and sales agreement prospectus covering the Sales Agreement and issuance and sale of our Common Stock that may be sold under that agreement in an aggregate amount of up to $30 million. A total of $150 million of securities, including those covered by the Sales Agreement, may be sold under the shelf registration when it is declared effective. 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 April 30, 2023, there were approximately 3,734,000 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 Nine months ended 2023 2022 2023 2022 Stock options and performance stock units $ 286 $ 76 $ 842 $ 898 Restricted stock units 277 86 666 159 $ 563 $ 162 $ 1,508 $ 1,057 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 Nine months ended 2023 2022 2023 2022 Selling, general and administrative $ 547 $ 158 $ 1,450 $ 1,037 Cost of revenues 16 4 58 20 $ 563 $ 162 $ 1,508 $ 1,057 No excess tax benefits were recognized during the three and nine month periods ended April 30, 2023 and 2022. Stock Option Plans The following table summarizes stock option activity during the nine month period ended April 30, 2023: Options Weighted Weighted Aggregate Outstanding at July 31, 2022 3,941,783 $ 3.00 Awarded 615,000 $ 2.00 Exercised (6,667 ) 2.14 $ Cancelled or expired (453,616 ) $ 3.95 Outstanding at end of period 4,096,500 $ 2.74 2.2 years $ 675 Exercisable at end of period 2,126,067 $ 0.3 years $ As of April 30, 2023, the total future compensation cost related to non-vested options, not yet recognized in the statements of operations, was $2,038 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 April 30, 2023, 12,600 shares had been issued and the balance of the shares are expected to be issued in the fourth quarter of fiscal 2023. During the nine months ended April 30, 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 April 30, 2023 and ($41) during the nine months ended April 30, 2023. For the three and nine months ended April 30, 2022, the Company recorded PSU compensation expense of ($105) and $57, respectively. The following table summarizes PSU’s granted and outstanding through April 30, 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 nine month period ended April 30, 2023: Number of Weighted Weighted Aggregate Outstanding at July 31, 2022 502,187 $ 2.95 Granted 325,564 1.53 Vested (145,263 ) 3.06 Cancelled — $ Outstanding at end of period 682,488 $ 2.25 1.1 years $ 1,727 Expected to vest at end of period 682,488 $ 1.1 years $ During the three and nine months ended April 30, 2023, the Company recognized shared based compensation expense for these RSUs of $277 and $666, respectively. During the three and nine months ended April 30, 2022, the Company recognized shared-based compensation expense for these RSUs of $86 and $159, respectively. RSU’s that vested on April 27, 2023, representing 58,596 shares of common stock, were issued in May 2023. As of April 30, 2023, the total future compensation cost related to non-vested RSUs, not yet recognized in the statements of operations, was $1,017 and the weighted average period over which the remaining expense of these awards is expected to be recognized is approximately fourteen months. |
Segment Reporting
Segment Reporting | 9 Months Ended |
Apr. 30, 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, Clinical Services and Products, 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 April 30, 2023 Clinical Products Other Consolidated Revenues $ 8,622 $ 7,485 — $ 16,107 Operating costs and expenses: Cost of revenues 9,993 4,476 — 14,469 Research and development 91 872 12 975 Selling, general and administrative 6,337 2,641 3,044 12,022 Legal fee expense 21 19 4,246 4,286 Total operating costs and expenses 16,442 8,008 7,302 31,752 Operating loss (7,820 ) (523 ) (7,302 ) (15,645 ) Other income (expense): Interest, net (1 ) 30 (66 ) (37 ) Other 4 2 142 148 Foreign exchange loss — 347 — 347 Loss before income taxes $ (7,817 ) $ (144 ) $ (7,226 ) $ (15,187 ) Depreciation and amortization included above $ 373 182 93 648 Share-based compensation included in above: Selling, general and administrative 65 20 461 546 Cost of revenues 11 6 — 17 Total $ 76 26 461 563 Capital expenditures $ 53 331 282 666 Three months ended April 30, 2022 Clinical Products Other Consolidated Revenues $ 18,630 $ 7,592 — $ 26,222 Operating costs and expenses: Cost of revenues 11,180 4,869 — 16,049 Research and development 666 458 9 1,133 Selling, general and administrative 6,756 2,786 1,900 11,442 Legal fee expense 12 10 712 734 Total operating costs and expenses 18,614 8,123 2,621 29,358 Operating income (loss) 16 (531 ) (2,621 ) (3,136 ) Other income (expense): Interest, net (2 ) 10 46 54 Other 15 (2 ) (729 ) (716 ) Foreign exchange loss — (1,056 ) — (1,056 ) Income (loss) before income taxes $ 29 $ (1,579 ) $ (3,304 ) $ (4,854 ) Depreciation and amortization included above $ 430 224 78 732 Share-based compensation included in above: Selling, general and administrative 38 1 119 158 Cost of revenues 4 — — 4 Total $ 42 1 119 162 Capital expenditures $ 202 572 82 856 Nine months ended April 30, 2023 Clinical Products Other Consolidated Revenues $ 28,619 $ 22,102 — $ 50,721 Operating costs and expenses: Cost of revenues 30,538 13,681 — 44,219 Research and development 694 2,675 33 3,402 Selling, general and administrative 19,830 7,627 7,828 35,285 Legal fee expense 192 55 6,105 6,352 Total operating costs and expenses 51,254 24,038 13,966 89,258 Operating loss (22,635 ) (1,936 ) (13,966 ) (38,537 ) Other income (expense): Interest, net (4 ) 84 15 95 Other 16 6 256 278 Foreign exchange loss — 1,022 — 1,022 Loss before income taxes $ (22,623 ) $ (824 ) $ (13,695 ) $ (37,142 ) Depreciation and amortization included above $ 1,291 518 267 2,076 Share-based compensation included in above: Selling, general and administrative 179 61 1,211 1,451 Cost of revenues 41 16 — 57 Total $ 220 77 1,211 1,508 Capital expenditures $ 412 1,269 506 2,187 Nine months ended April 30, 2022 Clinical Products Other Consolidated Revenues – Services and Products $ 62,045 $ 24,742 — $ 86,787 Operating costs and expenses: Cost of revenues 34,969 14,191 — 49,160 Research and development 762 1,901 34 2,697 Selling, general and administrative 19,568 8,920 $ 8,472 36,960 Legal and related expenses 217 23 4,621 4,861 Total operating costs and expenses 55,516 25,035 13,127 93,678 Operating income (loss) 6,529 (293 ) (13,127 ) (6,891 ) Other income (expense): Interest, net (7 ) 28 140 161 Other 69 3 (1,283 ) (1,211 ) Foreign exchange (loss) (1,887 ) — (1,887 ) Net income (loss) $ 6,591 $ (2,149 ) $ (14,270 ) $ (9,828 ) Depreciation and amortization included above $ 1,286 $ 626 $ 226 $ 2,138 Share-based compensation included in above: Selling, general and administrative 74 2 961 1,037 Cost of revenues 20 — — 20 Total $ 94 $ 2 $ 961 $ 1,057 Capital expenditures $ 795 $ 1,788 $ 520 $ 3,103 |
Contingencies
Contingencies | 9 Months Ended |
Apr. 30, 2023 | |
Contingencies [Abstract] | |
Contingencies | Note 12 – Contingencies Enzo has identified several purported class action complaints that have been filed against Enzo Biochem, Inc. and Enzo Clinical Labs, Inc. arising from the recent ransomware attack and data breach on Enzo’s computer network. All of the actions that we have identified were commenced in the United States District Court for the Eastern District of New York. The complaints generally allege that Enzo failed to adequately secure and safeguard the private and confidential information of the class members entrusted to it. The complaints assert various common law claims and seek money damages, restitution and injunctive relief. To date, neither Enzo Biochem, Inc. nor Enzo Clinical Labs, Inc. has been served with a copy of the summons and complaint in any of the actions. 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. At the parties’ joint request, the arbitration has been stayed while the parties work towards finalizing a settlement agreement. 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. At the parties’ joint request, the arbitration has been stayed while the parties work towards finalizing a settlement agreement. As of April 30, 2023, the Company has not accrued any charges related to Mr. Weiner’s termination. |
Clinical Labs Asset Sale Agreem
Clinical Labs Asset Sale Agreement with Labcorp | 9 Months Ended |
Apr. 30, 2023 | |
Clinical Labs Asset Sale Agreement With Labcorp [Abstract] | |
Clinical Labs Asset Sale Agreement with Labcorp | Note 13 – Clinical Labs Asset Sale Agreement with 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 in exchange for approximately $146 million 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. At a Special Meeting of shareholders on May 22, 2023, shareholders approved, by majority vote, the Transaction and adoption of the Purchase Agreement. Seller has also met all regulatory requirements for closing the sale of the Business. The Purchase Agreement also includes customary termination provisions for both the Company and the 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 million or a reimbursement of Buyer’s expenses of up to $5 million. Subject to the terms and conditions stated in the Purchase Agreement, after shareholder approval of the Transaction, which was obtained on May 22, 2023, Buyer is be obligated to pay a ticking fee to the Company for each day after the date of such approval, payable at the end of the applicable month, until the closing of the Transaction. At the closing of the Transaction, such ticking fees paid will be wholly or partially credited against the purchase price. On May 31, 2023, the Company received the May portion of such ticking fee. There can be no assurances that the Transaction will close or, if it does close, the exact net proceeds to be received by the Company. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Apr. 30, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 14 – Subsequent Events Sale of Convertible Debentures and Warrants On May 19, 2023, Enzo Biochem, Inc. (the “Company”) entered into a Securities Purchase Agreement (the “Purchase Agreement”) with each of the purchasers that are parties thereto (each, including its successors and assigns, a “Purchaser” and collectively, the “Purchasers”) and JGB Collateral, LLC, a Delaware limited liability company, as collateral agent for the Purchasers (the “Agent”). Pursuant to the Purchase Agreement, the Company agreed to sell to the Purchasers (i) 10% Original Issue Discount Secured Convertible Debentures (the “Debentures”) with an aggregate principal amount of $7,608,696 and (ii) warrants to purchase up to 1,000,000 shares of the Company’s common stock, par value $0.01 per share (the “Common Stock”), for an exercise price of $2.31 per share, the average of the three (3) daily volume weighted average prices of the Common Stock as defined in the Purchase Agreement (“VWAP”) prior to the closing date (the “Warrants”), subject to adjustments as set forth in the Warrants, for a total purchase price of $7,000,000. The Purchase Agreement contains customary representations, warranties and covenants. The transactions contemplated by the Purchase Agreement were consummated on May 19, 2023. Debentures The Debentures bear interest at a rate of 10% per annum (which interest rate is increased to 18% per annum five days after the occurrence and continuance of an Event of Default (as defined in the Debentures)), have a maturity date of May 20, 2024 and are convertible, at any time after their issuance date at the option of the Purchasers, into shares of Common Stock at a conversion price equal to $3.01 per share (the “Conversion Price”), subject to adjustment as set forth in the Debentures. Following the consummation of the Company’s sale of substantially all of the assets and business of Enzo Clinical Labs, Inc., a wholly-owned subsidiary of the Company, to Laboratory Corporation of American Holdings pursuant to the Asset Purchase Agreement, dated March 16, 2023, and as further described in the Company’s definitive Proxy Statement on Schedule 14A filed with the U.S. Securities and Exchange Commission on April 24, 2023 (the “Asset Sale”), the Company shall either, at the option of the Company upon written notice delivered to the Purchasers within three (3) trading days after the consummation of the Asset Sale, (i) prepay $4,000,000 of the outstanding principal amount of the Debentures (to be applied pro rata among the outstanding Debentures based on the relative outstanding principal balance of each Debenture) or (ii) deposit $4,000,000 in cash, as collateral for the Company’s obligations, into a deposit account subject to a deposit account control agreement, among the Company, the depository bank and the Agent and otherwise acceptable to Agent (in its sole absolute discretion) in form and substance. The Company’s obligations under the Debentures may be accelerated, at the Purchasers’ election, upon the occurrence of certain customary events of default. In the event of a default and acceleration of the Company’s obligations, the Company would be required to pay the greater of (i) the outstanding principal amount of the Debentures, all accrued and unpaid interest, plus the amount of additional interest that would accrue on such principal through the date of maturity, divided by the conversion price on the date accelerated payment is either (A) demanded (if demand or notice is required to create an Event of Default) or otherwise due or (B) paid in full, whichever has a lower conversion price, multiplied by the VWAP on the date the accelerated payment is either (x) demanded or otherwise due or (y) paid in full, whichever has a higher VWAP, or (ii) 130% of the outstanding principal amount of the Debentures, plus all accrued and unpaid interest, plus the amount of additional interest that would accrue on such principal through the date of maturity. Such accelerated payment would also include all other amounts, costs, expenses or liquidated damages due under the Debentures. The Debentures contain customary representations, warranties and covenants including among other things and subject to certain exceptions, covenants that restrict the Company from incurring additional indebtedness, creating or permitting liens on assets, amending its charter documents and bylaws, repurchasing or otherwise acquiring more than a de minimis number of its Common Stock or equivalents thereof, repaying outstanding indebtedness, paying dividends or distributions, assigning or selling certain assets, making or holding any investments, and entering into transactions with affiliates. Security Agreement and Subsidiary Guarantees In connection with the Purchase Agreement, on May 19, 2023, the Company, certain of the Company’s domestic subsidiaries (“Guarantors”), the Purchasers and the Agent entered into a Security Agreement (the “Security Agreement”), pursuant to which the Company and the Guarantors granted, for the benefit of the Purchasers, to secure the Company’s obligations under the Purchase Agreement and the Debentures, (i) second-priority liens on certain collateral (the “SLR Collateral”) that secures on a first-priority basis the Revolving Loan and Security Agreement between the Company, as borrower, and Gemino Healthcare Finance, LLC d/b/a SLR Healthcare ABL, as lender (the “Credit Facility”), and (ii) first-priority liens on the collateral (the “Non-SLR Collateral” and together with the Non-SLR Collateral, the “Collateral”) that does not secure the Credit Facility, in each case subject to permitted liens described in the Indenture. Upon an event of default under the Security Agreement, subject to the security interests under the Credit Agreement, the Purchasers may, among other things, take possession of the Collateral and enter any premises where the Collateral, or any part thereof, is or may be placed and remove the Collateral. In addition, on May 19, 2023, the Company and all of the Guarantors entered into Subsidiary Guarantees (the “Subsidiary Guarantees”), pursuant to which they guaranteed all of the Company’s obligations under the Purchase Agreement and the Debentures. Warrants The Warrants are exercisable for five years from May 19, 2023, at an exercise price of $2.31 per share, which is the average of three (3) daily VWAPs prior to the closing date, subject, with certain exceptions, to adjustments in the event of stock splits, dividends, subsequent dilutive offerings and certain fundamental transactions, as more fully described in the Warrant. If, at the time a Purchaser exercises its Warrant, there is no effective registration statement available for an issuance of the shares underlying the Warrant to the Purchasers, then in lieu of making the cash payment otherwise contemplated to be made to the Company upon the exercise of the Warrant, the Purchaser may elect to receive upon exercise (either in whole or in part) on a cashless basis the net number of shares of Common Stock determined according to a specified formula (as set forth in the Warrant). Registration Rights Agreement In connection with the Purchase Agreement, on May 19, 2023, the Company and the Purchasers entered into a Registration Rights Agreement, pursuant to which the Company is obligated to register the shares of Company Common Stock issuable upon exercise of the Debentures and the Warrants by June 19, 2023 (the “Registration Deadline”). If the Company fails to meet the Registration Deadline or maintain the effectiveness of the Registration Statement for the required effectiveness period, subject to certain permitted exceptions, the Company will be required to pay liquidated damages to the Purchasers. The Company also agreed, among other things, to indemnify the selling holders under the Registration Statement from certain liabilities and to pay all fees and expenses incident to the Company’s performance of or compliance with the Registration Rights Agreement. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 9 Months Ended |
Apr. 30, 2023 | |
Accounting Policies [Abstract] | |
Change in segment reporting | Change in s r 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, Clinical Services and Products, 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 nine months ended April 30, 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 nine months ended April 30, 2023 now included in the “Other” segment were $12 and $33, respectively. The operating expenses of Enzo Therapeutics for the three and nine months ended April 30, 2022 now included in the “Other” segment were $9 and $34, respectively. |
Ransomware attack | Ransomware a On April 6, 2023, the Company experienced a ransomware attack that impacted certain critical information technology systems. In response, we promptly deployed containment measures, including disconnecting our systems from the internet, launching an investigation with assistance from third-party cybersecurity experts, and notifying law enforcement. We adhered to our disaster recovery plan, which enabled us to maintain operations throughout the incident response process. The Company’s facilities are open, and continue to provide services to patients and partners. On April 11, 2023, we became aware that certain data, including names, test information, and Social Security numbers, was accessed, and in some instances, exfiltrated from the Company’s information technology systems as part of this incident. The investigation of this incident and the assessment of its impact is ongoing. However, the Company identified unauthorized access to or acquisition of clinical test information of approximately 2,470,000 individuals. The Social Security numbers of approximately 600,000 of these individuals may also have been involved. The Company is evaluating whether its employees’ information may have been involved. The Company has provided notice to the individuals whose information may have been involved, as well as to regulatory authorities, in accordance with applicable law. The Company has incurred, and may continue to incur, certain expenses related to this attack, including expenses to respond to, remediate and investigate this matter. Further, the Company remains subject to risks and uncertainties as a result of the incident, including as a result of the data that was accessed or exfiltrated from the Company’s network as noted above. Additionally, security and privacy incidents have led to, and may continue to lead to, additional regulatory scrutiny and class action litigation exposure. We are in the process of evaluating the full scope of the costs and related impacts of this incident. |
Liquidity and Going Concern | Liquidity and Going Concern During the nine months ended April 30, 2023, the Company incurred a net loss of $37,142, used cash in operating activities of $19,945 and had as of April 30, 2023 a working capital deficit of $10,153. 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 evaluated and is acting upon 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, the Company entered into a revolving line of credit for up to $8 million based on eligible receivables in March 2023, sold 10% convertible debentures and warrants for proceeds of $7 million in May 2023, and entered into an agreement to sell substantially all the operating assets and assign certain liabilities of our clinical laboratory business in March 2023, with an expected closing in July 2023. Additionally, in May 2023, we filed a Form S-3 “shelf” registration statement and sales agreement prospectus covering the offering, issuance and sale of our Common Stock that can be issued and sold under the sales agreement in an aggregate amount of up to $30 million. A total of $150 million of securities, including those covered by the Sales Agreement, may be sold under the shelf registration when it is declared effective. See Note 10 Stockholders equity for additional information. There can be no assurance that these capital raising strategies will ultimately prove to be successful, and the Company may need to raise additional capital during the current fiscal year. Our liquidity plans are subject to a number of risks and uncertainties, some of which are outside our control. The revolving line of credit agreement and the 10% convertible debenture securities (discussed below) both contain clauses that require our closing the asset sale with Labcorp within a given time frame. 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. |
Clinical Labs Asset Sale Agreement | Clinical Labs Asset Sale Agreement 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 of the Clinical Labs division. The sale is expected to close in July 2023, at which time we will exit the clinical laboratory services business. See Note 13 Clinical Labs Asset Sale Agreement with Labcorp for additional information. |
Revolving Line of Credit Agreement | Revolving Line of Credit Agreement On March 31, 2023, the Company entered into a Revolving Loan and Security Agreement with Gemino Healthcare Finance, LLC d/b/a SLR Healthcare ABL as lender specializing in direct lending to middle-market companies in the healthcare sector. The credit facility provides for a maximum $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. As of April 30, 2023, the outstanding balance of the revolving loan was $3,354. See Note 7 Mortgage and loans payable, net for additional information. |
Sale of 10% Convertible Debentures and Warrants | Sale of 10% Convertible Debentures and Warrants Subsequent to our fiscal quarter ended April 30, 2023, the Company entered into a Securities Purchase Agreement on May 19, 2023 for 10% Original Issue Discount Secured Convertible Debentures with an aggregate principal amount of $7,608,696 with a conversion price of $3.01 per share and (ii) warrants to purchase up to 1,000,000 shares of the Company’s common stock, par value $0.01 per share for an exercise price of $2.31 per share, for a total purchase price of $7,000,000. The Purchase Agreement contains customary representations, warranties and covenants. See Note 14 Subsequent Events for additional information. |
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 nine months ended April 30, 2022 represented 43% and 49%, respectively of all services revenues. The rate of transmission of COVID-19 and the severity of its variants have dramatically declined in the U.S. Revenues from COVID-19 testing during the three and nine months ended April 30, 2023 represented approximately 4% and 5%, 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. 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 Clinical Services business. The Company assessed certain accounting matters that generally require consideration of forecasted financial information in context with the information reasonably available to the Company, including inflation and actions by the Federal Reserve to increase interest rates as of April 30, 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 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, the Financial Accounting Standards Board (“FASB” issued Accounting Standards Update (“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 nine months ended April 30, 2023, respectively and 13% of the Clinical Services net accounts receivable as of April 30, 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 30% and 34% of Clinical Services net revenue for the three and nine months ended April 30, 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) | 9 Months Ended |
Apr. 30, 2023 | |
Revenue Recognition [Abstract] | |
Schedule of clinical services net revenues and percentages | Three months ended Three months ended Revenue category Third-party payer $ 4,451 52 % $ 10,817 58 % Medicare 1,500 17 2,436 13 Patient self-pay 1,304 15 2,177 12 HMOs 1,367 16 3,200 17 Total $ 8,622 100 % $ 18,630 100 % Nine months ended Nine months ended Revenue category Third-party payer $ 15,638 55 % $ 36,962 60 % Medicare 5,170 18 7,949 13 Patient self-pay 3,516 12 6,727 10 HMOs 4,295 15 10,407 17 Total $ 28,619 100 % $ 62,045 100 % |
Schedule of products revenue by geography | Three Months Ended Nine Months Ended 2023 2022 2023 2022 United States $ 5,043 $ 4,422 $ 13,282 $ 15,039 Europe 1,688 2,169 5,869 6,576 Asia Pacific 754 1,001 2,951 3,127 Products revenue $ 7,485 $ 7,592 $ 22,102 $ 24,742 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Apr. 30, 2023 | |
Inventories [Abstract] | |
Schedule of inventories | April 30, July 31, Raw materials $ 2,061 $ 1,524 Work in process 2,835 2,459 Finished products 10,393 11,428 $ 15,289 $ 15,411 |
Mortgage and Loans Payable, N_2
Mortgage and Loans Payable, Net (Tables) | 9 Months Ended |
Apr. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of minimum future annual principal payments | July 31, Total 2023 $ 41 2024 242 2025 252 2026 261 2027 270 Thereafter 3,117 Total principal payments 4,183 Less: current portion, included in other current liabilities and finance leases (75 ) unamortized mortgage cost (40 ) Mortgage and Corona Krise debt - current and long term – net $ 4,068 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Apr. 30, 2023 | |
Leases [Abstract] | |
Schedule of lease agreements include rental payments | Leases Balance Sheet Classification April 30, July 31, Assets Operating Right-of-use assets $ 13,457 $ 15,174 Finance Property, plant and equipment, net (a) 144 172 Total lease assets $ 13,601 $ 15,346 Liabilities Current: Operating Current portion of operating lease liabilities $ 3,706 $ 3,432 Finance Finance leases short term 57 81 Non-current: Operating Operating lease liabilities, non-current 10,734 12,729 Finance Other liabilities and finance leases long term — 39 Total lease liabilities $ 14,497 $ 16,281 (a) Accumulated amortization of finance lease assets was approximately $267 and $210 as of April 30, 2023 and July 31, 2022, respectively. |
Schedule of components of lease cost | Three months ended Nine months ended 2023 2022 2023 2022 Operating lease cost – net (a) $ 937 $ 1,085 $ 2,897 $ 3,372 Finance lease cost: Amortization of leased assets 19 19 57 57 Interest on lease liabilities 1 3 4 8 Total lease cost $ 957 $ 1,107 $ 2,958 $ 3,437 (a) Net of $126 and $252 sublease income for the three and nine months ended April 30, 2023, respectively. |
Schedule of lease liabilities | Maturity of lease liabilities, years ending July 31, Operating Finance Total 2023 $ 1,137 $ 22 $ 1,159 2024 4,254 37 4,291 2025 3,816 — 3,816 2026 3,431 — 3,431 2027 2,507 — 2,507 Thereafter 808 — 808 Total lease payments 15,953 59 16,012 Less: Interest (a) (1,513 ) (2 ) (1,515 ) Present value of lease liabilities $ 14,440 $ 57 $ 14,497 (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 4.0 years 5.0 years Finance leases 0.7 years 1.7 years Weighted-average discount rate: Operating leases 5.18 % 4.97 % Finance leases 3.31 % 5.20 % |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 9 Months Ended |
Apr. 30, 2023 | |
Payables and Accruals [Abstract] | |
Schedule of accrued liabilities | Accrued liabilities consist of: April 30, July 31, Payroll, benefits, and commissions $ 3,970 $ 4,912 Professional fees 1,104 801 Legal 7,154 4,523 Other 5,266 2,064 $ 17,494 $ 12,300 |
Stockholders_ Equity (Tables)
Stockholders’ Equity (Tables) | 9 Months Ended |
Apr. 30, 2023 | |
Stockholders’ Equity [Abstract] | |
Schedule of summarizes restricted stock unit (“RSU”) activity | Three months ended Nine months ended 2023 2022 2023 2022 Stock options and performance stock units $ 286 $ 76 $ 842 $ 898 Restricted stock units 277 86 666 159 $ 563 $ 162 $ 1,508 $ 1,057 |
Schedule of expense related to share-based payment arrangements | Three months ended Nine months ended 2023 2022 2023 2022 Selling, general and administrative $ 547 $ 158 $ 1,450 $ 1,037 Cost of revenues 16 4 58 20 $ 563 $ 162 $ 1,508 $ 1,057 |
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 (6,667 ) 2.14 $ Cancelled or expired (453,616 ) $ 3.95 Outstanding at end of period 4,096,500 $ 2.74 2.2 years $ 675 Exercisable at end of period 2,126,067 $ 0.3 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 325,564 1.53 Vested (145,263 ) 3.06 Cancelled — $ Outstanding at end of period 682,488 $ 2.25 1.1 years $ 1,727 Expected to vest at end of period 682,488 $ 1.1 years $ |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Apr. 30, 2023 | |
Segment Reporting [Abstract] | |
Schedule of operating results of the reportable segments | Three months ended April 30, 2023 Clinical Products Other Consolidated Revenues $ 8,622 $ 7,485 — $ 16,107 Operating costs and expenses: Cost of revenues 9,993 4,476 — 14,469 Research and development 91 872 12 975 Selling, general and administrative 6,337 2,641 3,044 12,022 Legal fee expense 21 19 4,246 4,286 Total operating costs and expenses 16,442 8,008 7,302 31,752 Operating loss (7,820 ) (523 ) (7,302 ) (15,645 ) Other income (expense): Interest, net (1 ) 30 (66 ) (37 ) Other 4 2 142 148 Foreign exchange loss — 347 — 347 Loss before income taxes $ (7,817 ) $ (144 ) $ (7,226 ) $ (15,187 ) Depreciation and amortization included above $ 373 182 93 648 Share-based compensation included in above: Selling, general and administrative 65 20 461 546 Cost of revenues 11 6 — 17 Total $ 76 26 461 563 Capital expenditures $ 53 331 282 666 Three months ended April 30, 2022 Clinical Products Other Consolidated Revenues $ 18,630 $ 7,592 — $ 26,222 Operating costs and expenses: Cost of revenues 11,180 4,869 — 16,049 Research and development 666 458 9 1,133 Selling, general and administrative 6,756 2,786 1,900 11,442 Legal fee expense 12 10 712 734 Total operating costs and expenses 18,614 8,123 2,621 29,358 Operating income (loss) 16 (531 ) (2,621 ) (3,136 ) Other income (expense): Interest, net (2 ) 10 46 54 Other 15 (2 ) (729 ) (716 ) Foreign exchange loss — (1,056 ) — (1,056 ) Income (loss) before income taxes $ 29 $ (1,579 ) $ (3,304 ) $ (4,854 ) Depreciation and amortization included above $ 430 224 78 732 Share-based compensation included in above: Selling, general and administrative 38 1 119 158 Cost of revenues 4 — — 4 Total $ 42 1 119 162 Capital expenditures $ 202 572 82 856 Nine months ended April 30, 2023 Clinical Products Other Consolidated Revenues $ 28,619 $ 22,102 — $ 50,721 Operating costs and expenses: Cost of revenues 30,538 13,681 — 44,219 Research and development 694 2,675 33 3,402 Selling, general and administrative 19,830 7,627 7,828 35,285 Legal fee expense 192 55 6,105 6,352 Total operating costs and expenses 51,254 24,038 13,966 89,258 Operating loss (22,635 ) (1,936 ) (13,966 ) (38,537 ) Other income (expense): Interest, net (4 ) 84 15 95 Other 16 6 256 278 Foreign exchange loss — 1,022 — 1,022 Loss before income taxes $ (22,623 ) $ (824 ) $ (13,695 ) $ (37,142 ) Depreciation and amortization included above $ 1,291 518 267 2,076 Share-based compensation included in above: Selling, general and administrative 179 61 1,211 1,451 Cost of revenues 41 16 — 57 Total $ 220 77 1,211 1,508 Capital expenditures $ 412 1,269 506 2,187 Nine months ended April 30, 2022 Clinical Products Other Consolidated Revenues – Services and Products $ 62,045 $ 24,742 — $ 86,787 Operating costs and expenses: Cost of revenues 34,969 14,191 — 49,160 Research and development 762 1,901 34 2,697 Selling, general and administrative 19,568 8,920 $ 8,472 36,960 Legal and related expenses 217 23 4,621 4,861 Total operating costs and expenses 55,516 25,035 13,127 93,678 Operating income (loss) 6,529 (293 ) (13,127 ) (6,891 ) Other income (expense): Interest, net (7 ) 28 140 161 Other 69 3 (1,283 ) (1,211 ) Foreign exchange (loss) (1,887 ) — (1,887 ) Net income (loss) $ 6,591 $ (2,149 ) $ (14,270 ) $ (9,828 ) Depreciation and amortization included above $ 1,286 $ 626 $ 226 $ 2,138 Share-based compensation included in above: Selling, general and administrative 74 2 961 1,037 Cost of revenues 20 — — 20 Total $ 94 $ 2 $ 961 $ 1,057 Capital expenditures $ 795 $ 1,788 $ 520 $ 3,103 |
Basis of Presentation (Details)
Basis of Presentation (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | 10 Months Ended | |||
Mar. 31, 2023 | Jul. 31, 2022 | Apr. 30, 2023 | Apr. 30, 2022 | Apr. 30, 2023 | Apr. 30, 2022 | May 31, 2023 | |
Basis of Presentation (Details) [Line Items] | |||||||
Operating expenses | $ 12 | $ 9 | $ 33 | $ 34 | |||
Net loss | 37,142 | ||||||
Cash in operating activities | 19,945 | ||||||
Working capital deficit | 10,153 | 10,153 | |||||
Line of credit | $ 8,000 | ||||||
Eligible receivables percentage | 10% | ||||||
Convertible debentures and warrant proceeds | $ 7,000 | ||||||
Aggregate amount | $ 30,000 | ||||||
Sales agreement | 150,000 | $ 150,000 | |||||
Convertible debenture securities percentage | 10% | ||||||
Revolving line of credit | $ 8,000 | ||||||
Annual interest rate percentage | 5.50% | ||||||
Outstanding balance | $ 3,354 | $ 3,354 | |||||
Convertible debentures and warrants percentage | 10% | ||||||
Securities purchase agreement percentage | 10% | ||||||
Aggregate principal amount | $ 7,608,696 | ||||||
Conversion price | $ 3.01 | $ 3.01 | |||||
Warrants purchase | 1,000,000 | ||||||
Common stock, par value | $ 0.01 | $ 0.01 | $ 0.01 | ||||
Exercise price | $ 2.31 | ||||||
Total purchase price | $ 7,000,000 | $ 7,000,000 | |||||
Service revenue percentage | 44% | 43% | 49% | ||||
Services revenues percent | 4% | 5% | |||||
Clinical services net revenue percentage | 16% | 30% | 17% | 34% | |||
Clinical services account receivable percentage | 13% | ||||||
Maximum [Member] | |||||||
Basis of Presentation (Details) [Line Items] | |||||||
Clinical test information | 2,470,000 | ||||||
Minimum [Member] | |||||||
Basis of Presentation (Details) [Line Items] | |||||||
Clinical test information | 600,000 |
Net income (loss) per share (De
Net income (loss) per share (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Apr. 30, 2023 | Apr. 30, 2022 | Apr. 30, 2023 | Apr. 30, 2022 | |
Earnings Per Share [Abstract] | ||||
Potential common shares | 173,000 | 438,000 | 105,000 | 510,000 |
Outstanding shares | 4,097,000 | 1,319,000 | 3,627,000 | 1,068,000 |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||||||
Apr. 30, 2023 | Apr. 30, 2022 | Apr. 30, 2023 | Apr. 30, 2022 | Feb. 01, 2023 | Aug. 01, 2022 | Jul. 31, 2022 | Feb. 01, 2022 | Aug. 01, 2021 | |
Revenue Recognition (Details) [Line Items] | |||||||||
Accounts receivables | $ 9,636,000 | $ 9,636,000 | $ 10,866 | $ 11,516 | $ 11,516,000 | $ 15,316 | $ 10,198 | ||
Clinical Services Revenue [Member] | |||||||||
Revenue Recognition (Details) [Line Items] | |||||||||
Percentage of clinical services business | 56% | 71% | 54% | 71% |
Revenue Recognition (Details) -
Revenue Recognition (Details) - Schedule of clinical services net revenues and percentages - Clinical services [Member] - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Apr. 30, 2023 | Apr. 30, 2022 | Apr. 30, 2023 | Apr. 30, 2022 | |
Revenue category | ||||
Revenue services net | $ 8,622 | $ 18,630 | $ 28,619 | $ 62,045 |
Revenue services net, percentage | 100% | 100% | 100% | 100% |
Third-party payers [Member] | ||||
Revenue category | ||||
Revenue services net | $ 4,451 | $ 10,817 | $ 15,638 | $ 36,962 |
Revenue services net, percentage | 52% | 58% | 55% | 60% |
Medicare [Member] | ||||
Revenue category | ||||
Revenue services net | $ 1,500 | $ 2,436 | $ 5,170 | $ 7,949 |
Revenue services net, percentage | 17% | 13% | 18% | 13% |
Patient self-pay [Member] | ||||
Revenue category | ||||
Revenue services net | $ 1,304 | $ 2,177 | $ 3,516 | $ 6,727 |
Revenue services net, percentage | 15% | 12% | 12% | 10% |
HMO’s [Member] | ||||
Revenue category | ||||
Revenue services net | $ 1,367 | $ 3,200 | $ 4,295 | $ 10,407 |
Revenue services net, percentage | 16% | 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 | 9 Months Ended | ||
Apr. 30, 2023 | Apr. 30, 2022 | Apr. 30, 2023 | Apr. 30, 2022 | |
Revenue Recognition (Details) - Schedule of products revenue by geography [Line Items] | ||||
Products revenue | $ 7,485 | $ 7,592 | $ 22,102 | $ 24,742 |
United States [Member] | ||||
Revenue Recognition (Details) - Schedule of products revenue by geography [Line Items] | ||||
Products revenue | 5,043 | 4,422 | 13,282 | 15,039 |
Europe [Member] | ||||
Revenue Recognition (Details) - Schedule of products revenue by geography [Line Items] | ||||
Products revenue | 1,688 | 2,169 | 5,869 | 6,576 |
Asia Pacific [Member] | ||||
Revenue Recognition (Details) - Schedule of products revenue by geography [Line Items] | ||||
Products revenue | $ 754 | $ 1,001 | $ 2,951 | $ 3,127 |
Supplemental Disclosure for S_2
Supplemental Disclosure for Statement of Cash Flows (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Apr. 30, 2023 | Apr. 30, 2022 | |
Supplemental Disclosure for Statement of Cash Flows [Abstract] | ||
Interest paid | $ 204 | $ 167 |
Right of use assets and liabilities | 5 | 29 |
Right of use assets and operating lease liabilities | 1,717 | |
Tax on capital paid | $ 9 | $ 120 |
Inventories (Details) - Schedul
Inventories (Details) - Schedule of inventories - USD ($) $ in Thousands | Apr. 30, 2023 | Jul. 31, 2022 |
Schedule of inventories [Abstract] | ||
Raw materials | $ 2,061 | $ 1,524 |
Work in process | 2,835 | 2,459 |
Finished products | 10,393 | 11,428 |
Total inventories | $ 15,289 | $ 15,411 |
Goodwill and Long-Lived Assets
Goodwill and Long-Lived Assets (Details) - USD ($) $ in Thousands | Apr. 30, 2023 | Jul. 31, 2022 |
Goodwill and Long-Lived Assets [Abstract] | ||
Goodwill | $ 7,452 | $ 7,452 |
Mortgage and Loans Payable, N_3
Mortgage and Loans Payable, Net (Details) SFr in Thousands, $ in Thousands | 1 Months Ended | 9 Months Ended | ||||||||
Mar. 31, 2023 USD ($) | Sep. 30, 2022 CHF (SFr) | Jun. 30, 2022 USD ($) | Mar. 31, 2022 CHF (SFr) | Sep. 29, 2021 | Jun. 30, 2021 USD ($) | Nov. 30, 2018 USD ($) | Apr. 30, 2023 USD ($) | Apr. 30, 2020 USD ($) | Apr. 30, 2020 CHF (SFr) | |
Mortgage and Loans Payable, Net (Details) [Line Items] | ||||||||||
Revolving line of credit | $ 8,000 | |||||||||
Credit facility, term | 1 year | |||||||||
Accrue interest rate per annum | 5.30% | |||||||||
Accrue interest rate plus tensor | 5.50% | |||||||||
Credit facility borrowed amount | $ 5,500 | |||||||||
Credit facility balance outstanding | $ 3,354 | |||||||||
Over time, description | The levels decline over time, starting at $4 million as of April 30, 2023, then $3 million as of May 31, 2023 and $2 million as of the end of each month thereafter. | |||||||||
Foreign exchange rate amount | $ 400 | SFr 400 | ||||||||
Bear interest rate | 0% | 0% | ||||||||
Semiannual amortization payments (in Francs) | SFr | SFr 33 | |||||||||
Exchange rates | $ 38 | SFr 33 | ||||||||
Current portion of loan | $ 75 | |||||||||
Long term debt, net | 247 | |||||||||
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 | 40 | |||||||||
Mortgage agreement | 3,861 | |||||||||
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 April 30, 2023) from $25,000 previously, and (b) the collateral requirement was increased from $750 to $1,000. | |||||||||
Other income loan | $ 7,000 | |||||||||
Audit loans | $ 2,000 | |||||||||
Citibank N.A. [Member] | ||||||||||
Mortgage and Loans Payable, Net (Details) [Line Items] | ||||||||||
Cash collateral deposit | $ 7,000 |
Mortgage and Loans Payable, N_4
Mortgage and Loans Payable, Net (Details) - Schedule of minimum future annual principal payments $ in Thousands | Apr. 30, 2023 USD ($) |
Schedule of minimum future annual principal payments [Abstract] | |
2023 | $ 41 |
2024 | 242 |
2025 | 252 |
2026 | 261 |
2027 | 270 |
Thereafter | 3,117 |
Total principal payments | 4,183 |
Less: current portion, included in other current liabilities and finance leases | (75) |
unamortized mortgage cost | (40) |
Mortgage and Corona Krise debt - current and long term – net | $ 4,068 |
Leases (Details)
Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Apr. 30, 2023 | Apr. 30, 2023 | Jul. 31, 2022 | |
Leases (Details) [Line Items] | |||
Options to extend the leases | 5 years | ||
Accumulated amortization of finance lease assets | $ 267 | $ 267 | $ 210 |
Sublease income | $ 126 | $ 252 | |
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 | Apr. 30, 2023 | Jul. 31, 2022 | |
Assets | |||
Operating, Right-of-use assets | $ 13,457 | $ 15,174 | |
Finance, Property, plant and equipment, net | [1] | 144 | 172 |
Total lease assets | 13,601 | 15,346 | |
Current: | |||
Operating, Current portion of operating lease liabilities | 3,706 | 3,432 | |
Finance, Finance leases short term | 57 | 81 | |
Non-current: | |||
Operating, Operating lease liabilities, non-current | 10,734 | 12,729 | |
Finance, Other liabilities and finance leases long term | 39 | ||
Total lease liabilities | $ 14,497 | $ 16,281 | |
[1] Accumulated amortization of finance lease assets was approximately $267 and $210 as of April 30, 2023 and July 31, 2022, respectively. |
Leases (Details) - Schedule o_2
Leases (Details) - Schedule of components of lease cost - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Apr. 30, 2023 | Apr. 30, 2022 | Apr. 30, 2023 | Apr. 30, 2022 | ||
Schedule of Components of Lease Cost [Abstract] | |||||
Operating lease cost – net | [1] | $ 937 | $ 1,085 | $ 2,897 | $ 3,372 |
Finance lease cost: | |||||
Amortization of leased assets | 19 | 19 | 57 | 57 | |
Interest on lease liabilities | 1 | 3 | 4 | 8 | |
Total lease cost | $ 957 | $ 1,107 | $ 2,958 | $ 3,437 | |
[1] Net of $126 and $252 sublease income for the three and nine months ended April 30, 2023, respectively. |
Leases (Details) - Schedule o_3
Leases (Details) - Schedule of lease liabilities $ in Thousands | Apr. 30, 2023 USD ($) | |
Schedule of Lease Liabilities [Abstract] | ||
2023, Operating leases | $ 1,137 | |
2023, Finance leases | 22 | |
2023, Total | 1,159 | |
2024, Operating leases | 4,254 | |
2024, Finance leases | 37 | |
2024, Total | 4,291 | |
2025, Operating leases | 3,816 | |
2025, Finance leases | ||
2025, Total | 3,816 | |
2026, Operating leases | 3,431 | |
2026, Finance leases | ||
2026, Total | 3,431 | |
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 | 15,953 | |
Total lease payments, Finance leases | 59 | |
Total lease payments, Total | 16,012 | |
Less: Interest, Operating leases | (1,513) | [1] |
Less: Interest, Finance leases | (2) | [1] |
Less: Interest, Total | (1,515) | [1] |
Present value of lease liabilities, Operating leases | 14,440 | |
Present value of lease liabilities, Finance leases | 57 | |
Present value of lease liabilities, Total | $ 14,497 | |
[1] Primarily calculated using the Company’s incremental borrowing rate. |
Leases (Details) - Schedule o_4
Leases (Details) - Schedule of lease term and discount rate | Apr. 30, 2023 | Apr. 30, 2022 |
Weighted-average remaining lease term (years): | ||
Operating leases | 4 years | 5 years |
Finance leases | 8 months 12 days | 1 year 8 months 12 days |
Weighted-average discount rate: | ||
Operating leases | 5.18% | 4.97% |
Finance leases | 3.31% | 5.20% |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) $ in Thousands | Apr. 30, 2023 | Jul. 31, 2022 |
Payables and Accruals [Abstract] | ||
Reserves amount | $ 290 | $ 260 |
Accrued Liabilities (Details) -
Accrued Liabilities (Details) - Schedule of accrued liabilities - USD ($) $ in Thousands | Apr. 30, 2023 | Jul. 31, 2022 |
Schedule of Accrued Liabilities [Abstract] | ||
Payroll, benefits, and commissions | $ 3,970 | $ 4,912 |
Professional fees | 1,104 | 801 |
Legal | 7,154 | 4,523 |
Other | 5,266 | 2,064 |
Accrued liabilities | $ 17,494 | $ 12,300 |
Stockholders_ Equity (Details)
Stockholders’ Equity (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Apr. 27, 2023 | Jan. 31, 2018 | Apr. 30, 2023 | Apr. 30, 2022 | Apr. 30, 2023 | Apr. 30, 2022 | Jan. 31, 2011 | |
Stockholders’ Equity (Details) [Line Items] | |||||||
Common stock, par value (in Dollars per share) | $ 0.01 | ||||||
Offering price | $ 30,000 | $ 30,000 | |||||
Percentage of commission payable on equity offering | 3% | ||||||
Sales agreement | $ 150,000 | ||||||
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) | 3,734,000 | 3,734,000 | |||||
Total future compensation cost | $ 2,038 | $ 2,038 | |||||
Weighted average remaining life of approximately | 2 years | ||||||
Public sector undertaking share (in Shares) | 25,200 | ||||||
Share issued (in Shares) | 12,600 | 12,600 | |||||
Vested shares (in Shares) | 58,596 | ||||||
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 | $ 30,000 | $ 30,000 | |||||
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 April 30, 2023, 12,600 shares had been issued and the balance of the shares are expected to be issued in the fourth quarter of fiscal 2023. | ||||||
Former officer forfeited shares (in Shares) | 15,000 | ||||||
Shared based compensation expense | 7 | $ (105) | $ (41) | $ 57 | |||
Restricted Stock Units (RSUs) [Member] | |||||||
Stockholders’ Equity (Details) [Line Items] | |||||||
Shared based compensation expense | $ 277 | $ 86 | 666 | $ 159 | |||
Unrecognized compensation | $ 1,017 |
Stockholders_ Equity (Details)
Stockholders’ Equity (Details) - Schedule of share-based compensation expense - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Apr. 30, 2023 | Apr. 30, 2022 | Apr. 30, 2023 | Apr. 30, 2022 | |
Schedule of Share Based Compensation Expense [Abstract] | ||||
Stock options and performance stock units | $ 286 | $ 76 | $ 842 | $ 898 |
Restricted stock units | 277 | 86 | 666 | 159 |
Total | $ 563 | $ 162 | $ 1,508 | $ 1,057 |
Stockholders_ Equity (Details_2
Stockholders’ Equity (Details) - Schedule of expense related to share-based payment arrangements - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Apr. 30, 2023 | Apr. 30, 2022 | Apr. 30, 2023 | Apr. 30, 2022 | |
Schedule of Expense Related to Share Based Payment Arrangements [Abstract] | ||||
Selling, general and administrative | $ 547 | $ 158 | $ 1,450 | $ 1,037 |
Cost of revenues | 16 | 4 | 58 | 20 |
Total | $ 563 | $ 162 | $ 1,508 | $ 1,057 |
Stockholders_ Equity (Details_3
Stockholders’ Equity (Details) - Schedule of stock option activity - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended |
Apr. 30, 2023 | |
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) | $ 3 |
Aggregate Intrinsic Value, Outstanding at beginning of period (in Dollars) | |
Options, Awarded | 615,000 |
Weighted Average Exercise Price, Awarded (in Dollars per share) | $ 2 |
Options, Exercised | (6,667) |
Weighted Average Exercise Price, Exercised (in Dollars per share) | $ 2.14 |
Options, Cancelled or expired | (453,616) |
Weighted Average Exercise Price, Cancelled or expired (in Dollars per share) | $ 3.95 |
Options, Outstanding at end of period | 4,096,500 |
Weighted Average Exercise Price, Outstanding at end of period (in Dollars per share) | $ 2.74 |
Weighted Average Remaining Contractual Term, Outstanding at end of period | 2 years 2 months 12 days |
Aggregate Intrinsic Value, Outstanding at end of period (in Dollars) | $ 675 |
Options, Exercisable at end of period | 2,126,067 |
Weighted Average Remaining Contractual Term, Exercisable at end of period | 3 months 18 days |
Stockholders_ Equity (Details_4
Stockholders’ Equity (Details) - Schedule of PSU’s granted and outstanding - 10/19/2020 [Member] $ in Thousands | 9 Months Ended |
Apr. 30, 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 | 9 Months Ended |
Apr. 30, 2023 USD ($) $ / shares shares | |
Stockholders’ Equity (Details) - Schedule of summarizes restricted stock unit (“RSU”) activity [Line Items] | |
Number of Unvested 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 Unvested RSUs outstanding, Granted | 325,564 |
Weighted Average Fair Value per Unit at Date of Grant or Vesting, Granted (in Dollars per share) | $ / shares | $ 1.53 |
Number of Unvested RSUs outstanding, Vested | (145,263) |
Weighted Average Fair Value per Unit at Date of Grant or Vesting, Vested (in Dollars per share) | $ / shares | $ 3.06 |
Number of Unvested RSUs outstanding, Cancelled | |
Weighted Average Fair Value per Unit at Date of Grant or Vesting, Cancelled (in Dollars per share) | $ / shares | |
Number of Unvested RSUs outstanding, Outstanding at end of period | 682,488 |
Weighted Average Fair Value per Unit at Date of Grant or Vesting, Outstanding at end of period (in Dollars per share) | $ / shares | $ 2.25 |
Weighted Average Remaining Contractual Term, Outstanding at end of period | 1 year 1 month 6 days |
Aggregate Intrinsic Value, Outstanding at end of period (in Dollars) | $ | $ 1,727 |
Number of Unvested RSUs outstanding, Expected to vest at end of period | 682,488 |
Weighted Average Remaining Contractual Term, Expected to vest at end of period | 1 year 1 month 6 days |
Segment Reporting (Details) - S
Segment Reporting (Details) - Schedule of operating results of the reportable segments - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Apr. 30, 2023 | Apr. 30, 2022 | Apr. 30, 2023 | Apr. 30, 2022 | |
Clinical Services [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | $ 8,622 | $ 18,630 | $ 28,619 | $ 62,045 |
Operating costs and expenses: | ||||
Cost of revenues | 9,993 | 11,180 | 30,538 | 34,969 |
Research and development | 91 | 666 | 694 | 762 |
Selling, general and administrative | 6,337 | 6,756 | 19,830 | 19,568 |
Legal fee expense | 21 | 12 | 192 | 217 |
Total operating costs and expenses | 16,442 | 18,614 | 51,254 | 55,516 |
Operating income (loss) | (7,820) | 16 | (22,635) | 6,529 |
Other income (expense): | ||||
Interest, net | (1) | (2) | (4) | (7) |
Other | 4 | 15 | 16 | 69 |
Foreign exchange loss | ||||
Income (loss) before income taxes | (7,817) | 29 | (22,623) | 6,591 |
Depreciation and amortization included above | 373 | 430 | 1,291 | 1,286 |
Share-based compensation included in above: | ||||
Selling, general and administrative | 65 | 38 | 179 | 74 |
Cost of revenues | 11 | 4 | 41 | 20 |
Total | 76 | 42 | 220 | 94 |
Capital expenditures | 53 | 202 | 412 | 795 |
Products [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 7,485 | 7,592 | 22,102 | 24,742 |
Operating costs and expenses: | ||||
Cost of revenues | 4,476 | 4,869 | 13,681 | 14,191 |
Research and development | 872 | 458 | 2,675 | 1,901 |
Selling, general and administrative | 2,641 | 2,786 | 7,627 | 8,920 |
Legal fee expense | 19 | 10 | 55 | 23 |
Total operating costs and expenses | 8,008 | 8,123 | 24,038 | 25,035 |
Operating income (loss) | (523) | (531) | (1,936) | (293) |
Other income (expense): | ||||
Interest, net | 30 | 10 | 84 | 28 |
Other | 2 | (2) | 6 | 3 |
Foreign exchange loss | 347 | (1,056) | 1,022 | (1,887) |
Income (loss) before income taxes | (144) | (1,579) | (824) | (2,149) |
Depreciation and amortization included above | 182 | 224 | 518 | 626 |
Share-based compensation included in above: | ||||
Selling, general and administrative | 20 | 1 | 61 | 2 |
Cost of revenues | 6 | 16 | ||
Total | 26 | 1 | 77 | 2 |
Capital expenditures | 331 | 572 | 1,269 | 1,788 |
Other [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | ||||
Operating costs and expenses: | ||||
Cost of revenues | ||||
Research and development | 12 | 9 | 33 | 34 |
Selling, general and administrative | 3,044 | 1,900 | 7,828 | 8,472 |
Legal fee expense | 4,246 | 712 | 6,105 | 4,621 |
Total operating costs and expenses | 7,302 | 2,621 | 13,966 | 13,127 |
Operating income (loss) | (7,302) | (2,621) | (13,966) | (13,127) |
Other income (expense): | ||||
Interest, net | (66) | 46 | 15 | 140 |
Other | 142 | (729) | 256 | (1,283) |
Foreign exchange loss | ||||
Income (loss) before income taxes | (7,226) | (3,304) | (13,695) | (14,270) |
Depreciation and amortization included above | 93 | 78 | 267 | 226 |
Share-based compensation included in above: | ||||
Selling, general and administrative | 461 | 119 | 1,211 | 961 |
Cost of revenues | ||||
Total | 461 | 119 | 1,211 | 961 |
Capital expenditures | 282 | 82 | 506 | 520 |
Consolidated [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 16,107 | 26,222 | 50,721 | 86,787 |
Operating costs and expenses: | ||||
Cost of revenues | 14,469 | 16,049 | 44,219 | 49,160 |
Research and development | 975 | 1,133 | 3,402 | 2,697 |
Selling, general and administrative | 12,022 | 11,442 | 35,285 | 36,960 |
Legal fee expense | 4,286 | 734 | 6,352 | 4,861 |
Total operating costs and expenses | 31,752 | 29,358 | 89,258 | 93,678 |
Operating income (loss) | (15,645) | (3,136) | (38,537) | (6,891) |
Other income (expense): | ||||
Interest, net | (37) | 54 | 95 | 161 |
Other | 148 | (716) | 278 | (1,211) |
Foreign exchange loss | 347 | (1,056) | 1,022 | (1,887) |
Income (loss) before income taxes | (15,187) | (4,854) | (37,142) | (9,828) |
Depreciation and amortization included above | 648 | 732 | 2,076 | 2,138 |
Share-based compensation included in above: | ||||
Selling, general and administrative | 546 | 158 | 1,451 | 1,037 |
Cost of revenues | 17 | 4 | 57 | 20 |
Total | 563 | 162 | 1,508 | 1,057 |
Capital expenditures | $ 666 | $ 856 | $ 2,187 | $ 3,103 |
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 |
Clinical Labs Asset Sale Agre_2
Clinical Labs Asset Sale Agreement with Labcorp (Details) - USD ($) $ in Millions | 2 Months Ended | 9 Months Ended |
Apr. 16, 2023 | Apr. 30, 2023 | |
Clinical Labs Asset Sale Agreement With Labcorp [Abstract] | ||
Cash | $ 146 | |
Termination fee | $ 5 | |
Reimbursement of buyer’s expenses | $ 5 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 9 Months Ended |
May 19, 2023 | Apr. 30, 2023 | |
Subsequent Events (Details) [Line Items] | ||
Debentures of interest rate | 10% | |
Debentures interest rate increased | 18% | |
Common stock at a conversion price (in Dollars per share) | $ 3.01 | |
Outstanding principal amount (in Dollars) | $ 4,000,000 | |
Deposit in cash (in Dollars) | $ 4,000,000 | |
Percentage of outstanding principal amount of debentures | 130% | |
Debentures of maturity date | May 20, 2024 | |
Subsequent Event [Member] | ||
Subsequent Events (Details) [Line Items] | ||
Warrants term | 5 years | |
Warrants exercise price per share (in Dollars per share) | $ 2.31 | |
Securities purchase agreement, description | Pursuant to the Purchase Agreement, the Company agreed to sell to the Purchasers (i) 10% Original Issue Discount Secured Convertible Debentures (the “Debentures”) with an aggregate principal amount of $7,608,696 and (ii) warrants to purchase up to 1,000,000 shares of the Company’s common stock, par value $0.01 per share (the “Common Stock”), for an exercise price of $2.31 per share, the average of the three (3) daily volume weighted average prices of the Common Stock as defined in the Purchase Agreement (“VWAP”) prior to the closing date (the “Warrants”), subject to adjustments as set forth in the Warrants, for a total purchase price of $7,000,000. The Purchase Agreement contains customary representations, warranties and covenants. The transactions contemplated by the Purchase Agreement were consummated on May 19, 2023. |