Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Oct. 31, 2023 | Dec. 08, 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 | 50,489,771 | |
Amendment Flag | false | |
Entity Central Index Key | 0000316253 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Document Period End Date | Oct. 31, 2023 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
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, City or Town | New York | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 11735 | |
City Area Code | (631) | |
Local Phone Number | 755-5500 | |
Title of 12(b) Security | Common stock $0.01 par value | |
Security Exchange Name | NYSE | |
Entity Interactive Data Current | Yes |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Oct. 31, 2023 | Jul. 31, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 69,207 | $ 82,373 |
Accounts receivable, net | 4,181 | 4,808 |
Inventories, net | 7,595 | 7,939 |
Prepaid expenses and other current assets, including $5,000 escrow at October 31, 2023 and $1,000 restricted cash at July 31, 2023 | 7,029 | 3,336 |
Total current assets | 88,012 | 98,456 |
Property, plant, and equipment, net | 13,075 | 13,086 |
Right-of-use assets | 3,405 | 3,626 |
Other assets, including $5,000 escrow at July 31, 2023 | 726 | 5,745 |
Non-current assets of discontinued operations, net | 1,090 | 967 |
Total assets | 106,308 | 121,880 |
Current liabilities: | ||
Accounts payable – trade | 1,962 | 3,575 |
Accrued liabilities | 10,042 | 11,743 |
Current portion of operating lease liabilities | 920 | 980 |
Other current liabilities | 75 | 75 |
Convertible debentures | 2,842 | 2,514 |
Current liabilities of discontinued operations, net | 13,001 | 21,102 |
Total current liabilities | 28,842 | 39,989 |
Operating lease liabilities, non-current | 2,972 | 3,160 |
Long term debt, net | 219 | 269 |
Total liabilities | 32,033 | 43,418 |
Contingencies – see Note 13 | ||
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: 50,489,771 at October 31, 2023 and 49,997,631 at July 31, 2023 | 504 | 499 |
Additional paid-in capital | 345,991 | 344,435 |
Accumulated deficit | (274,966) | (268,350) |
Accumulated other comprehensive income | 2,746 | 1,878 |
Total stockholders’ equity | 74,275 | 78,462 |
Total liabilities and stockholders’ equity | $ 106,308 | $ 121,880 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands | Oct. 31, 2023 | Jul. 31, 2023 |
Statement of Financial Position [Abstract] | ||
Other, including restricted cash (in Dollars) | $ 5,000 | $ 1,000 |
Other assets, including escrow (in Dollars) | $ 5,000 | |
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 | 50,489,771 | 49,997,631 |
Common stock, shares outstanding | 50,489,771 | 49,997,631 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Oct. 31, 2023 | Oct. 31, 2022 | |
Income Statement [Abstract] | ||
Revenues | $ 7,806 | $ 7,103 |
Operating costs and expenses, net: | ||
Cost of revenues | 4,351 | 4,589 |
Research and development | 849 | 699 |
Selling, general, and administrative | 7,007 | 5,437 |
Legal and related expenses | 1,075 | 1,007 |
Total operating costs and expenses | 13,282 | 11,732 |
Operating loss | (5,476) | (4,629) |
Other income (expense): | ||
Interest, net | 977 | 72 |
Change in fair value of convertible debentures | (328) | |
Other | 158 | |
Foreign exchange loss | (1,006) | (797) |
Loss before income taxes | (5,675) | (5,354) |
Income taxes | ||
Net loss from continuing operations | (5,675) | (5,354) |
Net loss from discontinued operations | (941) | (5,281) |
Net loss | $ (6,616) | $ (10,635) |
Net loss per common share – basic and diluted: | ||
Continuing operations (in Dollars per share) | $ (0.11) | $ (0.11) |
Discontinued operations (in Dollars per share) | (0.02) | (0.11) |
Total net loss per basic and diluted common share (in Dollars per share) | $ (0.13) | $ (0.22) |
Weighted average common shares outstanding: | ||
Basic (in Shares) | 50,184 | 48,720 |
Diluted (in Shares) | 50,184 | 48,720 |
Consolidated Statements of Op_2
Consolidated Statements of Operations (Unaudited) (Parentheticals) - $ / shares | 3 Months Ended | |
Oct. 31, 2023 | Oct. 31, 2022 | |
Income Statement [Abstract] | ||
Continuing operations, diluted | $ (0.11) | $ (0.11) |
Discontinued operations, diluted | (0.02) | (0.11) |
Total net income (loss) per diluted common share (in Dollars per share) | $ (0.13) | $ (0.22) |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Oct. 31, 2023 | Oct. 31, 2022 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (6,616) | $ (10,635) |
Other comprehensive income: | ||
Foreign currency translation adjustments | 868 | 733 |
Comprehensive loss | $ (5,748) | $ (9,902) |
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, 2022 | $ 487 | $ 339,462 | $ (288,638) | $ 3,151 | $ 54,462 |
Balance (in Shares) at Jul. 31, 2022 | 48,720,454 | ||||
Net loss | (10,635) | (10,635) | |||
Share-based compensation charges | 430 | 430 | |||
Foreign currency translation adjustments | 733 | 733 | |||
Balance at Oct. 31, 2022 | $ 487 | 339,892 | (299,273) | 3,884 | 44,990 |
Balance (in Shares) at Oct. 31, 2022 | 48,720,454 | ||||
Balance at Jul. 31, 2023 | $ 499 | 344,435 | (268,350) | 1,878 | 78,462 |
Balance (in Shares) at Jul. 31, 2023 | 49,997,631 | ||||
Net loss | (6,616) | (6,616) | |||
Vested restricted stock unit issuances | $ 1 | 1 | |||
Vested restricted stock unit issuances (in Shares) | 144,530 | ||||
Common stock issued for Asset Purchase Agreement bonus payment | $ 4 | 481 | 485 | ||
Common stock issued for Asset Purchase Agreement bonus payment (in Shares) | 347,610 | ||||
Share-based compensation charges | 1,075 | 1,075 | |||
Foreign currency translation adjustments | 868 | 868 | |||
Balance at Oct. 31, 2023 | $ 504 | $ 345,991 | $ (274,966) | $ 2,746 | $ 74,275 |
Balance (in Shares) at Oct. 31, 2023 | 50,489,771 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Oct. 31, 2023 | Oct. 31, 2022 | |
Cash flows from operating activities: | ||
Net loss | $ (6,616) | $ (10,635) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Change in fair value of convertible debentures | 328 | |
Depreciation and amortization of property, plant and equipment | 270 | 780 |
Amortization of intangible, prepaid and other assets | 22 | |
Share-based compensation charges | 1,075 | 430 |
Share-based 401(k) employer match expense | 109 | 198 |
Unrealized foreign exchange loss | 970 | 783 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 2,019 | (11) |
Inventories | 428 | (393) |
Prepaid expenses and other assets | 346 | 666 |
Accounts payable – trade | (5,601) | (407) |
Accrued liabilities, other current liabilities and other liabilities | (6,702) | (126) |
Total adjustments | (6,758) | 1,942 |
Net cash used in operating activities | (13,374) | (8,693) |
Cash flows from investing activities: | ||
Capital expenditures | (254) | (652) |
Net cash used in investing activities | (254) | (652) |
Cash flows from financing activities: | ||
Repayments under mortgage agreement and capital leases | (51) | (95) |
Cash payments for taxes related to net share settlements of equity awards | (467) | |
Net cash used in financing activities | (518) | (95) |
Effect of exchange rate changes on cash and cash equivalents | (20) | (28) |
Decrease in cash and cash equivalents and restricted cash | (14,166) | (9,468) |
Cash and cash equivalents and restricted cash - beginning of period | 83,373 | 22,603 |
Cash and cash equivalents and restricted cash - end of period | 69,207 | 13,135 |
Composition of cash and cash equivalents and restricted cash is as follows: | ||
Cash and cash equivalents | 69,207 | 12,135 |
Restricted cash | 1,000 | |
Total cash and cash equivalents and restricted cash | $ 69,207 | $ 13,135 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Oct. 31, 2023 | |
Basis of Presentation [Abstract] | |
Basis of Presentation | Note 1 – Basis of Presentation Enzo Biochem, Inc. (the “Company,” “we,” “our” or “Enzo”), is a manufacturer and supplier of a comprehensive portfolio of thousands of high-quality products, including antibodies, genomic probes, assays, biochemicals, and proteins. The Company’s proprietary products and technologies play central roles in translational research and drug development areas, including cell biology, genomics, assays, immunohistochemistry, and small molecule chemistry. Enzo Biochem, Inc.’s Life Science division supports the work of research centers and industry partners. Enzo Biochem, Inc. has a broad and deep intellectual property portfolio, with patent coverage across many vital enabling technologies. The accompanying consolidated financial statements include the accounts of Enzo Biochem, Inc. and its wholly-owned subsidiaries, Enzo Life Sciences, Inc. (“Enzo Life Sciences”), Enzo Therapeutics, Inc. (“Enzo Therapeutics”), Enzo Realty LLC (“Enzo Realty”), and Enzo Realty II LLC (“Enzo Realty II”), collectively or with one or more of its subsidiaries referred to as the “Company” or “Companies.” The financial statements also include as discontinued operations the accounts of its wholly owned subsidiary Enzo Clinical Labs, Inc. (“Enzo Clinical Labs”). Effective July 24, 2023 we completed the sale of certain assets used in its clinical services operations to Laboratory Corporation of America Holdings, a Delaware corporation (“Labcorp”) and exited the clinical services business. See Note 2. The Company has one reportable segment, Products. The consolidated balance sheet as of October 31, 2023, the consolidated statements of operations, comprehensive loss and stockholders’ equity for the three months ended October 31, 2023 and 2022, and the consolidated statements of cash flows for the three months ended October 31, 2023 and 2022 (the “interim statements”) are unaudited. In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present fairly the financial position and operating results for the interim periods have been made. Certain information and footnote disclosure, normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), have been condensed or omitted. The interim statements should be read in conjunction with the consolidated financial statements for the fiscal year ended July 31, 2023 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, 2023 has been derived from the audited financial statements at that date. The results of operations for the three months ended October 31, 2023 are not necessarily indicative of the results that may be expected for the fiscal year ending July 31, 2024. Principles of consolidation The accompanying consolidated financial statements have been prepared in conformity with U.S. GAAP and include the accounts of the Company and its wholly-owned subsidiaries, Enzo Life Sciences (and its wholly-owned foreign subsidiaries), Enzo Therapeutics, Enzo Realty , Enzo Realty II,, and Enzo Clinical Labs (a corporate entity with discontinued operations). All intercompany transactions and balances have been eliminated. 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. Contingencies Contingencies are evaluated and a liability is recorded when the matter is both probable and reasonably estimable. Gain contingencies are evaluated and not recognized until the gain is realizable or realized. Fair Value Measurements The Company determines fair value measurements used in its consolidated financial statements based upon the exit price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants exclusive of any transaction costs, as determined by either the principal market or the most advantageous market. Inputs used in the valuation techniques to derive fair values are classified based on a three-level hierarchy. The basis for fair value measurements for each level within the hierarchy is described below with Level 1 having the highest priority and Level 3 having the lowest. Level 1 Quoted prices in active markets for identical assets or liabilities. Level 2 Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are observable in active markets. Level 3 Valuations derived from valuation techniques in which one or more significant inputs are unobservable. Cash and cash equivalents Cash and cash equivalents consist of demand deposits with banks and highly liquid money market funds. At October 31, 2023 and July 31, 2023, the Company had cash and cash equivalents in foreign bank accounts of $512 and $419, respectively. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk primarily consist of cash and cash equivalents and accounts receivable. The Company believes the fair value of the aforementioned financial instruments approximates the cost due to the immediate or short-term nature of these items. At October 31, 2023 and July 31, 2023, the Company had cash deposited in certain financial institutions in excess of federally insured levels. The Company regularly monitors the financial stability of these financial institutions and believes that it is not exposed to any significant credit risk in cash and cash equivalents or restricted cash. Concentration of credit risk with respect to the Company’s Products segment is mitigated by the diversity of the Company’s customers and their dispersion across many different geographic regions. To reduce risk, the Company routinely assesses the financial strength of these customers and, consequently, believes that its accounts receivable credit exposure with respect to these customers is limited. 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. Effect of New Accounting Pronouncements - Recently Adopted Accounting Pronouncements In June 2016, FASB issued ASU No. 2016-13 Financial Instruments – Credit Losses 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. |
Discontinued Operations
Discontinued Operations | 3 Months Ended |
Oct. 31, 2023 | |
Discontinued Operations [Abstract] | |
Discontinued operations | Note 2 - Discontinued operations Prior to July 24, 2023, we operated a clinical laboratory, doing business as Enzo Clinical Labs, which provided reference, molecular and esoteric diagnostic medical testing services in the New York, New Jersey, and Connecticut medical communities. Effective July 24, 2023, we completed the sale of certain assets used in the operation of Enzo Clinical Labs and the assignment of certain clinical lab liabilities to Labcorp for an aggregate purchase price of $113.25 million in cash, subject to customary closing adjustments. Excluded from the sale of the clinical services assets were its cash and accounts receivable. In accordance with the sale, we ceased our clinical services operations but continue winding down activities. As a consequence of the sale, for the three months ended October 31, 2023 and 2022 we have classified as discontinued operations all income and expenses attributable to the clinical services business. The following table sets forth the condensed operating results of the discontinued operations for the three months ended October 31, 2023 2022 Net revenues — $ 11,173 Cost of revenues $ (175 ) 10,082 Selling, general and administrative 1,437 6,014 Research and development — 297 Legal and related expenses 41 64 Other income (362 ) (3 ) Loss from discontinued operations $ (941 ) $ (5,281 ) The following table sets forth the condensed carrying amounts of major classes of assets and liabilities of the discontinued operations as of the dates indicated: October 31, July 31, Carrying amounts of major current assets included as part of discontinued operations: Trade receivables $ 378 $ 1,675 Prepaid and other current 41 54 Total current assets 419 1,729 Carrying amounts of major current liabilities included as part of discontinued operations: Trade payables and accrued liabilities 11,214 20,616 Operating lease liabilities and other 2,206 2,215 Total current liabilities 13,420 22,831 Current liabilities of discontinued operations, net 13,001 21,102 Carrying amount of major non-current assets included as part of discontinued operations: Right of use assets $ 6,564 $ 7,001 Other 62 62 Total non-current assets 6,626 7,063 Carrying amount of major non-current liabilities included as part of discontinued operations: Operating lease liabilities and other 5,536 6,096 Non-current assets of discontinued operations, net $ 1,090 $ 967 During the three months ended October 31, 2023, the cash used in operating activities of the discontinued operations was $8,082, primarily for reductions of trade payables and accrued liabilities. During the three months ended October 31, 2022, the cash used in operating activities and investing activities of the discontinued operations was $5,623 and $156, respectively. |
Net Income (Loss) Per Share
Net Income (Loss) Per Share | 3 Months Ended |
Oct. 31, 2023 | |
Net Income (Loss) Per Share [Abstract] | |
Net income (loss) per share | Note 3 - 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. The dilutive effect of potential common shares, consisting of outstanding stock options, and unvested restricted stock units and performance stock units, is determined using the treasury stock method. For the three months ended October 31, 2023, the effect of approximately 3,320,000 of outstanding “out of the money” options to purchase common shares and the effect of approximately 54,000 of outstanding restricted stock units were excluded from the calculation of diluted net (loss) income per share because their effect would be anti-dilutive. During the three months ended October 31, 2023, the effect of approximately 593,000 warrants and the effect of approximately 1,199,000 shares related to the assumed conversion of debentures were excluded from the calculation of diluted weighted average shares outstanding because their effect would be anti-dilutive. For the three months ended October 31, 2022, approximately 106,000 potential common shares from “in the money options” and unearned performance stock units were excluded from the calculation of diluted (loss) per share. For the three months ended October 31, 2022, the effect of approximately 2,595,000 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 | 3 Months Ended |
Oct. 31, 2023 | |
Revenue Recognition [Abstract] | |
Revenue Recognition | Note 4 – Revenue Recognition Products Revenue The Company generates 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 revenues. Products revenue by geography is as follows: Three Months Ended October 31 2023 2022 United States $ 4,635 $ 4,095 Europe 2,138 1,904 Asia Pacific 1,033 1,104 Products revenue $ 7,806 $ 7,103 As of August 1, 2023 and 2022, accounts receivable from continuing operations was $4,808 and $4,762, respectively. |
Supplemental Disclosure for Sta
Supplemental Disclosure for Statement of Cash Flows | 3 Months Ended |
Oct. 31, 2023 | |
Supplemental Disclosure for Statement of Cash Flows [Abstract] | |
Supplemental disclosure for statement of cash flows | Note 5 - Supplemental disclosure for statement of cash flows In the three months ended October 31, 2023 and 2022, interest paid by the Company approximated $92 $53 For the three months ended October 31, 2023 and 2022, the net reductions in the measurement of right of use assets and liabilities included in cash flows from operating activities was approximately $148 and $1, respectively. The changes are included in changes in accrued liabilities, other current liabilities, and other liabilities in the statements of cash flows. In connection with the completed sale of certain assets used in the operation of Enzo Clinical Labs, $5,000 of escrowed proceeds were included in prepaid and other assets as of October 31, 2023 and in other assets as of July 31, 2023. In connection with the full payment of a mortgage in July 2023, the restricted cash collateral deposit of $1,000 was released during the three months ended October 31, 2023. During the three months ended October 31, 2023, the Company disbursed $467 for taxes related to net share settlement of bonuses paid in stock to two senior executives. |
Inventories
Inventories | 3 Months Ended |
Oct. 31, 2023 | |
Inventories [Abstract] | |
Inventories | Note 6 - Inventories Inventories, net consisted of the following as at: October 31, July 31, Raw materials $ 2,081 $ 2,206 Work in process 2,587 2,599 Finished products 2,927 3,134 $ 7,595 $ 7,939 |
Convertible Debentures and Othe
Convertible Debentures and Other Current Debt | 3 Months Ended |
Oct. 31, 2023 | |
Convertible Debentures and Other Current Debt [Abstract] | |
Convertible debentures and other current debt | Note 7 – Convertible debentures and other current debt On May 19, 2023, 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 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. The Purchase Agreement contains customary representations, warranties and covenants. The transactions contemplated by the Purchase Agreement were consummated on May 19, 2023. Pursuant to ASC 825, Fair Value Option 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 July 24, 2023 consummation of the Company’s sale of certain assets and assignment of certain liabilities of Enzo Clinical Labs to Labcorp pursuant to the Asset Purchase Agreement, dated March 16, 2023, the Company prepaid $4,000 of the outstanding principal amount prior to July 31, 2023. The Company’s obligations under the Debentures may be accelerated, at the Purchasers’ election, upon the occurrence of certain customary events of default. As of October 31, 2023 and July 31, 2023, there were no events of default. 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. The following table presents a reconciliation of the beginning and ending balances of the convertible debentures measured at fair value on a recurring basis that use significant unobservable inputs (Level 3) and the related unrealized losses recorded in the consolidated statement of operations during the three months ended October 31, 2023: Fair value, July 31, 2023 $ 2,514 Change in fair value of convertible debentures 328 Fair value, October 31, 2023 $ 2,842 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. 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. 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. The Company has registered the shares. |
Long Term Debt
Long Term Debt | 3 Months Ended |
Oct. 31, 2023 | |
Long Term Debt [Abstract] | |
Long term debt | Note 8 – Long term debt In April 2020, the Company’s subsidiary in Switzerland received a loan of CHF 400 (or $400, based on the foreign exchange rate as of July 31, 2020) from the Swiss government under the “Corona Krise” emergency loan program in response to the COVID-19 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 semiannual amortization payments of CHF 33 would begin in March 2022. In March 2022, the subsidiary made its first semi-annual principal repayment of CHF 33 (or $35 based on exchange rates). Based on this amortization schedule, the loan will be repaid by September 2027. The current portion of this loan is included in other current liabilities and the long term portion in long term debt – net as of October 31, 2023 and July 31, 2023. Minimum future annual principal payments under this agreement as of October 31, 2023 are as follows: July 31, Total 2024 $ 37 2025 74 2026 74 2027 74 2028 35 Total principal payments 294 Less: current portion, included in other current liabilities (75 ) Long term debt – net $ 219 |
Leases
Leases | 3 Months Ended |
Oct. 31, 2023 | |
Leases [Abstract] | |
Leases | Note 9 - Leases The Company determines if an arrangement is or contains a lease at contract inception. The Company leases buildings, office space, and equipment through operating 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. 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 (e.g. 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 4 years, some of which include options to extend the leases for up to 3 years. The Company’s lease terms may include renewal options that are reasonably certain to be exercised and 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 October 31, July 31, Assets Operating Right-of-use assets $ 3,405 $ 3,626 Total lease assets $ 3,405 $ 3,626 Liabilities Current: Operating Current portion of operating lease liabilities $ 920 $ 980 Non-current: Operating Operating lease liabilities, non-current 2,972 3,160 Total lease liabilities $ 3,892 $ 4,140 For the three months ended October 31, components of lease cost were as follows: Lease Cost 2023 2022 Operating lease cost – net (a) $ 141 $ 262 (a) Net of $126 sublease income for the three months ended October 31, 2023. The maturity of the Company’s lease liabilities as of October 31, 2023 is as follows: Maturity of lease liabilities, years ending July 31, Operating 2024 $ 863 2025 896 2026 886 2027 881 2028 808 Total lease payments 4,334 Less: Interest (a) (442 ) Present value of lease liabilities $ 3,892 (a) Primarily calculated using the Company’s incremental borrowing rate. Lease term and discount rate for the for the three months ended October 31 were as follows: Lease term and discount rate 2023 2022 Weighted-average remaining lease term (years): Operating leases 4.5 years 5.5 years Weighted-average discount rate: Operating leases 5.1 % 5.1 % See Note 5 for cash flow information on cash paid for amounts included in the measurement of lease liabilities for the three months ended October 31, 2023 and 2022. |
Accrued Liabilities and Other C
Accrued Liabilities and Other Current Liabilities | 3 Months Ended |
Oct. 31, 2023 | |
Accrued Liabilities and Other Current Liabilities [Abstract] | |
Accrued Liabilities and Other Current Liabilities | Note 10 - Accrued Liabilities and other current liabilities Accrued liabilities consist of: October 31, July 31, Payroll, benefits and commissions $ 7,715 $ 7,421 Professional fees 543 610 Legal 1,095 2,248 Other 689 1,464 $ 10,042 $ 11,743 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 October 31, 2023 and July 31, 2023, the Company had established reserves of $252 and $631, respectively, which are 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. At October 31, 2023 and July 31, 2023 other current liabilities consist of the current portion of the Swiss government loan. |
Stockholders_ Equity
Stockholders’ Equity | 3 Months Ended |
Oct. 31, 2023 | |
Stockholders’ Equity [Abstract] | |
Stockholders’ equity | Note 11 - 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. In May 2023, the Company filed with the SEC a “shelf” registration and sales agreement prospectus covering the Sales Agreement. A total of $150 million of securities, including those covered by the Sales Agreement, may be sold under the shelf registration which was declared effective in July 2023. During the fourth quarter of the fiscal year ended July 31, 2023, the Company sold 276,479 shares for net proceeds of $386. There was no activity during the three months ended October 31, 2023. Incentive stock plans 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 October 31, 2023, there were approximately 4,623,000 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 or the fair value of our stock at the date of grant. 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. During the three months ended October 31, 2023, the Company recognized $519 of share based compensation with respect to stock options and $367 of share based compensation with respect to restricted stock units as a result of the termination of the former CEO during the quarter then ended. See Note 14. The amounts of share-based compensation expense recognized in the periods presented are as follows: Three months ended 2023 2022 Stock options and performance stock units $ 646 180 Restricted stock units 429 186 $ 1,075 366 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 2023 2022 Selling, general and administrative $ 1,069 360 Cost of revenues 6 6 $ 1,075 366 No excess tax benefits were recognized during the three month periods ended October 31, 2023 and 2022. The following table summarizes stock option activity during the three month period ended October 31, 2023: Options Weighted Weighted Aggregate Outstanding at July 31, 2023 3,829,500 $ 2.61 — Granted — — Exercised — — $ Cancelled or expired (508,916 ) $ 1.58 Outstanding at end of period 3,320,584 $ 2.64 2.5 years $ — Exercisable at end of period 2,313,784 $ 2.83 1.9 years $ — As of October 31, 2023, the total future compensation cost related to non-vested options, not yet recognized in the statements of operations, was $839 and the weighted average period over which the remaining expense of these awards is expected to be recognized is approximately one and one half years. The intrinsic value of stock option awards represents the value of 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 options that are outstanding. Restricted Stock Units The following table summarizes RSU activity for the three months ended October 31, 2023: Number of Weighted Weighted Aggregate Outstanding at beginning of fiscal year 557,490 $ 2.21 1.1 years 825 Granted — $ — — Vested (173,333 ) $ 3.39 Cancelled (100,000 ) $ 1.97 Outstanding at end of period 284,157 $ 1.75 0.4 years $ 381 Expected to vest at end of period 284,157 $ 1.75 0.4 years $ 381 Certain directors had not exercised their vested RSU shares, totaling 144,530, as of July 31, 2023. These shares were issued during the three months ended October 31, 2023. During the three months ended October 31, 2023, 173,333 RSUs vested and 100,000 were cancelled as a result of the termination of the former CEO. The vested shares had not been issued as of October 31, 2023. During the three months ended October 31, 2023 and 2022, the Company recognized shared based compensation expense for RSU’s of $429 and $186, respectively. As of October 31, 2023, the total future compensation cost related to non-vested RSUs, not yet recognized in the statements of operations, was $138 and the weighted average period over which the remaining expense of these awards is expected to be recognized is approximately one half years. Performance Stock Units During the three months ended October 31, 2023 and 2022, the Company recognized $0 and $66 of share based compensation for Performance Stock Units (“PSUs”). During the three months ended, one senior executive vested in 10,640 shares of stock which were not yet issued as of October 31, 2023. As of October 31, 2023 there were no PSUs outstanding. |
Segment Reporting
Segment Reporting | 3 Months Ended |
Oct. 31, 2023 | |
Segment Reporting [Abstract] | |
Segment reporting | Note 12 - Segment reporting The Company has one reportable segment, Products, which 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 “Corporate & Other” consist of corporate general and administrative costs which are not allocable to the Products segment. 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 Corporate & Other segment. Legal and related expenses specific to the Products’ segment’s activities are allocated to that segment. Management of the Company assesses assets on a consolidated basis only and therefore, assets by reportable segment have not been included in the reportable segments below. The accounting policies of the reportable segment are the same as those described in the summary of significant accounting policies. The following financial information represents the operating results of the reportable segments of the Company: Three months ended October 31, 2023 Products Corporate Consolidated Revenues $ 7,806 — $ 7,806 Operating costs and expenses: Cost of revenues 4,351 — 4,351 Research and development 838 $ 11 849 Selling, general and administrative 3,104 3,903 7,007 Legal and related expenses 30 1,045 1,075 Total operating costs and expenses 8,323 4,959 13,282 Operating loss (517 ) (4,959 ) (5,476 ) Other income (expense) Interest 34 943 977 Change in fair value of convertible debentures — (328 ) (328 ) Other 2 156 158 Foreign exchange loss (1,006 ) — (1,006 ) Loss before taxes $ (1,487 ) $ (4,188 ) $ (5,675 ) Depreciation and amortization included above $ 166 $ 104 $ 270 Share-based compensation included above: Selling, general and administrative 22 1,047 1,069 Cost of sales 6 — 6 Total $ 28 $ 1,047 $ 1,075 Capital expenditures $ 248 $ 6 $ 254 Three months ended October 31, 2022 Products Corporate Consolidated Revenues $ 7,103 — $ 7,103 Operating costs and expenses: Cost of revenues 4,589 — 4,589 Research and development 690 $ 9 699 Selling, general and administrative 2,885 2,552 5,437 Legal and related expenses 25 982 1,007 Total operating costs and expenses 8,189 3,543 11,732 Operating loss (1,086 ) (3,543 ) (4,629 ) Other income (expense) Interest 25 47 72 Other 2 (2 ) — Foreign exchange loss (797 ) — (797 ) Loss before taxes $ (1,856 ) $ (3,498 ) $ (5,354 ) Depreciation and amortization included above $ 165 $ 83 $ 248 Share-based compensation included above: Selling, general and administrative 20 340 360 Cost of sales 6 — 6 Total $ 26 $ 340 $ 366 Capital expenditures $ 306 $ 183 $ 489 |
Contingencies
Contingencies | 3 Months Ended |
Oct. 31, 2023 | |
Contingencies [Abstract] | |
Contingencies | Note 13 – Contingencies In April 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. We are in the process of evaluating the full scope of the costs and related impacts of this incident. The Company’s facilities remained open, and we continued to provide services to patients and partners. We later 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 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. Additionally, the Company has determined that some 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. Enzo Biochem is currently subject to regulatory inquiry from the New York Attorney General, a joint inquiry from the Connecticut and New Jersey Attorneys General and an inquiry from the Utah Attorney General. All inquiries ask questions about the ransomware incident, as well as the corrective actions taken in response. It is not known at this time whether the Attorneys General will seek penalty against the Company. We are unable to evaluate the likelihood of an outcome, favorable or unfavorable, to the Company or to estimate the amount or range of any potential liability, if any, at this time. There is also pending Class Action litigation: In re Enzo Biochem Data Breach Litigation In the Eastern District of New York twenty putative class actions have been consolidated alleging various harms stemming from the April 2023 data incident. Interim lead counsel has been appointed and filed a Consolidated Amended Complaint on November 13, 2023. The complaint seeks to certify a federal class as well as several state subclasses. The Consolidated Amended Complaint brings various statutory and common law claims including negligence, negligence per se, breach of fiduciary duty, breach of implied contract, breach of the implied covenant of good faith and fair dealing, violation of the New York’s General Business Law § 349, Invasion of Privacy, violations of the Connecticut Unfair Trade Practices Act, violations of the New Jersey Consumer Fraud Act. Maria Sgambati et al., v. Enzo Biochem, Inc., et al This is a putative class action pending in state court alleging various harms stemming from the April 2023 data incident. The complaint seeks to certify a class of New York residents. The complaint brings claims of negligence; negligence per se Louis v. Enzo Biochem, Inc. et al. This is a putative class action pending in state court alleging various harms stemming from the April 2023 data incident. The complaint seeks to certify a class of New York citizens. The complaint brings claims of for negligence; negligence per se A provision was made in the financial statements as of July 31, 2023 for the above matters based on a reasonable estimate; however, the actual exposure may differ. 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 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. On August 4, 2023, defendants moved to dismiss all the causes of action asserted in the verified complaint. Plaintiff filed an amended complaint on or about October 4, 2023, adding, among other things, an additional cause of action for violation of N.Y.B.C.L. § 626. On October 23, 2023, Defendants filed a reply in further support of their motion to dismiss. On October 24, 2023, Plaintiff sought leave to file an opposition brief. Defendants filed an opposition to that request on October 26, 2023. On October 31, 2023, in response to a question from the Court’s law clerk, Defendants reiterated that they had elected to apply their original motion to dismiss to the amended pleading. On November 6, 2023, Plaintiff filed an opposition to Defendants’ motion to dismiss. On November 17, 2023, Defendants filed a reply brief in further support of their motion to dismiss the Amended Complaint. The Company cannot predict the outcome of this matter. 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 or about September 26, 2023, James G. Wolf, Individually and as the Trustee of the Wolf Family Charitable Foundation, Barbaranne R. Wolf, Stephen Paul Wolf, and Preston M. Wolf initiated an appraisal action against Enzo Biochem, Inc. in the New York Supreme Court for Suffolk County. Petitioners seek an appraisal of the value of their shares in the Company. The amount of damages sought by the Petitioners is unspecified. The Company will defend itself vigorously in the appraisal action. In our discontinued Clinical Labs operations, 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 that we 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 until the Annual Meeting on January 31, 2024. Dr. Rabbani was a party to an employment agreement with the Company that entitled 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 year 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 was 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 asserted was owed to him. At the parties’ joint request, the arbitration has been stayed while the parties work towards resolving the matter. A provision was made in the financial statements as of July 31, 2023 based on a reasonable estimate; however, the actual exposure may differ. 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 October 24, 2023, the Company and Mr. Weiner reached an agreement resolving the dispute and a provision was made in the financial statements as of July 31, 2023 based on the settlement agreement. The Company paid Mr. Weiner $3,600, less applicable withholding taxes, related to the agreement in November 2023. |
Departure and Appointment of Ce
Departure and Appointment of Certain Officers | 3 Months Ended |
Oct. 31, 2023 | |
Departure and Appointment of Certain Officers [Abstract] | |
Departure and Appointment of Certain Officers | Note 14 – Departure and Appointment of Certain Officers On September 5, 2023, the Company entered into a Separation Agreement and General Release (the “Separation Agreement”) with Hamid Erfanian, the Company’s Chief Executive Officer, which provides for Mr. Erfanian’s separation of employment, resignations from his positions as Chief Executive Officer and as a director of the Company and the payment of severance benefits as described below. Pursuant to the Separation Agreement, Mr. Erfanian’s resignations as Chief Executive Officer and as a director became effective immediately and his final date of employment with the Company was November 18, 2023 (the “Separation Date”). Pursuant to the Separation Agreement, Mr. Erfanian is entitled to the following severance benefits: (i) a payment equaling twelve (12) months of his annual base salary of $624, subject to standard payroll deductions and withholdings; (ii) a lump-sum payment of $187, representing his annual bonus; (iii) a grant of restricted shares of the Company’s common stock, par value $0.01 per share (the “Common Stock”), in an amount equal to $1,502 with 50% of the restricted Common Stock granted as soon as reasonably practicable after September 13, 2023, and the remaining 50% granted on the earlier of July 24, 2024 or a Change in Control of the Company (as defined in Mr. Erfanian’s employment agreement with the Company); and (iv) the immediate vesting on the Separation Date of the remainder of a restricted stock unit award of 260,000 shares of Common Stock and an option to purchase 700,000 shares of Common Stock that were previously granted to Mr. Erfanian upon his employment. The foregoing are subject to continued compliance with existing restrictive covenants under Mr. Erfanian’s employment agreement with the Company and his reaffirmation. The severance benefits with respect to salary and bonus were accrued during the three months ended October 31, 2023. The share-based charges related to the immediate vesting of the remainder of the restricted stock unit award and options granted upon employment were recognized during the three months ended October 31, 2023. On September 5, 2023, the Company’s board of directors appointed Kara Cannon, the Company’s Chief Operating Officer, to serve as Interim Chief Executive Officer of the Company, which became effective immediately upon Mr. Erfanian’s resignation as Chief Executive Officer. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 3 Months Ended |
Oct. 31, 2023 | |
Basis of Presentation [Abstract] | |
Principles of consolidation | Principles of consolidation The accompanying consolidated financial statements have been prepared in conformity with U.S. GAAP and include the accounts of the Company and its wholly-owned subsidiaries, Enzo Life Sciences (and its wholly-owned foreign subsidiaries), Enzo Therapeutics, Enzo Realty , Enzo Realty II,, and Enzo Clinical Labs (a corporate entity with discontinued operations). All intercompany transactions and balances have been eliminated. |
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. |
Contingencies | Contingencies Contingencies are evaluated and a liability is recorded when the matter is both probable and reasonably estimable. Gain contingencies are evaluated and not recognized until the gain is realizable or realized. |
Fair Value Measurements | Fair Value Measurements The Company determines fair value measurements used in its consolidated financial statements based upon the exit price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants exclusive of any transaction costs, as determined by either the principal market or the most advantageous market. Inputs used in the valuation techniques to derive fair values are classified based on a three-level hierarchy. The basis for fair value measurements for each level within the hierarchy is described below with Level 1 having the highest priority and Level 3 having the lowest. Level 1 Quoted prices in active markets for identical assets or liabilities. Level 2 Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are observable in active markets. Level 3 Valuations derived from valuation techniques in which one or more significant inputs are unobservable. |
Cash and cash equivalents | Cash and cash equivalents Cash and cash equivalents consist of demand deposits with banks and highly liquid money market funds. At October 31, 2023 and July 31, 2023, the Company had cash and cash equivalents in foreign bank accounts of $512 and $419, respectively. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk primarily consist of cash and cash equivalents and accounts receivable. The Company believes the fair value of the aforementioned financial instruments approximates the cost due to the immediate or short-term nature of these items. At October 31, 2023 and July 31, 2023, the Company had cash deposited in certain financial institutions in excess of federally insured levels. The Company regularly monitors the financial stability of these financial institutions and believes that it is not exposed to any significant credit risk in cash and cash equivalents or restricted cash. Concentration of credit risk with respect to the Company’s Products segment is mitigated by the diversity of the Company’s customers and their dispersion across many different geographic regions. To reduce risk, the Company routinely assesses the financial strength of these customers and, consequently, believes that its accounts receivable credit exposure with respect to these customers is limited. |
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. |
Effect of New Accounting Pronouncements - Recently Adopted Accounting Pronouncements | Effect of New Accounting Pronouncements - Recently Adopted Accounting Pronouncements In June 2016, FASB issued ASU No. 2016-13 Financial Instruments – Credit Losses 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. |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 3 Months Ended |
Oct. 31, 2023 | |
Discontinued Operations [Abstract] | |
Schedule of Condensed Operating Results of the Discontinued Operations | The following table sets forth the condensed operating results of the discontinued operations for the three months ended October 31, 2023 2022 Net revenues — $ 11,173 Cost of revenues $ (175 ) 10,082 Selling, general and administrative 1,437 6,014 Research and development — 297 Legal and related expenses 41 64 Other income (362 ) (3 ) Loss from discontinued operations $ (941 ) $ (5,281 ) |
Schedule of Major Classes of Assets and liabilities of the Discontinued Operations | The following table sets forth the condensed carrying amounts of major classes of assets and liabilities of the discontinued operations as of the dates indicated: October 31, July 31, Carrying amounts of major current assets included as part of discontinued operations: Trade receivables $ 378 $ 1,675 Prepaid and other current 41 54 Total current assets 419 1,729 Carrying amounts of major current liabilities included as part of discontinued operations: Trade payables and accrued liabilities 11,214 20,616 Operating lease liabilities and other 2,206 2,215 Total current liabilities 13,420 22,831 Current liabilities of discontinued operations, net 13,001 21,102 Carrying amount of major non-current assets included as part of discontinued operations: Right of use assets $ 6,564 $ 7,001 Other 62 62 Total non-current assets 6,626 7,063 Carrying amount of major non-current liabilities included as part of discontinued operations: Operating lease liabilities and other 5,536 6,096 Non-current assets of discontinued operations, net $ 1,090 $ 967 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Oct. 31, 2023 | |
Revenue Recognition [Abstract] | |
Schedule of Products Revenue by Geography | Products revenue by geography is as follows: Three Months Ended October 31 2023 2022 United States $ 4,635 $ 4,095 Europe 2,138 1,904 Asia Pacific 1,033 1,104 Products revenue $ 7,806 $ 7,103 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Oct. 31, 2023 | |
Inventories [Abstract] | |
Schedule of Inventories, Net | Inventories, net consisted of the following as at: October 31, July 31, Raw materials $ 2,081 $ 2,206 Work in process 2,587 2,599 Finished products 2,927 3,134 $ 7,595 $ 7,939 |
Convertible Debentures and Ot_2
Convertible Debentures and Other Current Debt (Tables) | 3 Months Ended |
Oct. 31, 2023 | |
Convertible Debentures and Other Current Debt [Abstract] | |
Schedule of Convertible Debentures Measured at Fair Value | The following table presents a reconciliation of the beginning and ending balances of the convertible debentures measured at fair value on a recurring basis that use significant unobservable inputs (Level 3) and the related unrealized losses recorded in the consolidated statement of operations during the three months ended October 31, 2023: Fair value, July 31, 2023 $ 2,514 Change in fair value of convertible debentures 328 Fair value, October 31, 2023 $ 2,842 |
Long Term Debt (Tables)
Long Term Debt (Tables) | 3 Months Ended |
Oct. 31, 2023 | |
Long Term Debt [Abstract] | |
Schedule of Minimum Future Annual Principal Payments | Minimum future annual principal payments under this agreement as of October 31, 2023 are as follows: July 31, Total 2024 $ 37 2025 74 2026 74 2027 74 2028 35 Total principal payments 294 Less: current portion, included in other current liabilities (75 ) Long term debt – net $ 219 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Oct. 31, 2023 | |
Leases [Abstract] | |
Schedule of Lease Agreements Include Rental Payments | 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 October 31, July 31, Assets Operating Right-of-use assets $ 3,405 $ 3,626 Total lease assets $ 3,405 $ 3,626 Liabilities Current: Operating Current portion of operating lease liabilities $ 920 $ 980 Non-current: Operating Operating lease liabilities, non-current 2,972 3,160 Total lease liabilities $ 3,892 $ 4,140 |
Schedule of Components of Lease Cost | For the three months ended October 31, components of lease cost were as follows: Lease Cost 2023 2022 Operating lease cost – net (a) $ 141 $ 262 (a) Net of $126 sublease income for the three months ended October 31, 2023. |
Schedule of Lease Liabilities | The maturity of the Company’s lease liabilities as of October 31, 2023 is as follows: Maturity of lease liabilities, years ending July 31, Operating 2024 $ 863 2025 896 2026 886 2027 881 2028 808 Total lease payments 4,334 Less: Interest (a) (442 ) Present value of lease liabilities $ 3,892 (a) Primarily calculated using the Company’s incremental borrowing rate. |
Schedule of Lease Term and Discount Rate | Lease term and discount rate for the for the three months ended October 31 were as follows: Lease term and discount rate 2023 2022 Weighted-average remaining lease term (years): Operating leases 4.5 years 5.5 years Weighted-average discount rate: Operating leases 5.1 % 5.1 % |
Accrued Liabilities and Other_2
Accrued Liabilities and Other Current Liabilities (Tables) | 3 Months Ended |
Oct. 31, 2023 | |
Accrued Liabilities and Other Current Liabilities [Abstract] | |
Schedule of Accrued Liabilities | Accrued liabilities consist of: October 31, July 31, Payroll, benefits and commissions $ 7,715 $ 7,421 Professional fees 543 610 Legal 1,095 2,248 Other 689 1,464 $ 10,042 $ 11,743 |
Stockholders_ Equity (Tables)
Stockholders’ Equity (Tables) | 3 Months Ended |
Oct. 31, 2023 | |
Stockholders’ Equity [Abstract] | |
Schedule of Share-based Compensation Expense | The amounts of share-based compensation expense recognized in the periods presented are as follows: Three months ended 2023 2022 Stock options and performance stock units $ 646 180 Restricted stock units 429 186 $ 1,075 366 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 2023 2022 Selling, general and administrative $ 1,069 360 Cost of revenues 6 6 $ 1,075 366 |
Schedule of Stock Option Activity | The following table summarizes stock option activity during the three month period ended October 31, 2023: Options Weighted Weighted Aggregate Outstanding at July 31, 2023 3,829,500 $ 2.61 — Granted — — Exercised — — $ Cancelled or expired (508,916 ) $ 1.58 Outstanding at end of period 3,320,584 $ 2.64 2.5 years $ — Exercisable at end of period 2,313,784 $ 2.83 1.9 years $ — |
Schedule of Summarizes Restricted Stock Unit (“RSU”) Activity | The following table summarizes RSU activity for the three months ended October 31, 2023: Number of Weighted Weighted Aggregate Outstanding at beginning of fiscal year 557,490 $ 2.21 1.1 years 825 Granted — $ — — Vested (173,333 ) $ 3.39 Cancelled (100,000 ) $ 1.97 Outstanding at end of period 284,157 $ 1.75 0.4 years $ 381 Expected to vest at end of period 284,157 $ 1.75 0.4 years $ 381 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 3 Months Ended |
Oct. 31, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Financial Information Represents the Operating Results of the Reportable Segments | The following financial information represents the operating results of the reportable segments of the Company: Products Corporate Consolidated Revenues $ 7,806 — $ 7,806 Operating costs and expenses: Cost of revenues 4,351 — 4,351 Research and development 838 $ 11 849 Selling, general and administrative 3,104 3,903 7,007 Legal and related expenses 30 1,045 1,075 Total operating costs and expenses 8,323 4,959 13,282 Operating loss (517 ) (4,959 ) (5,476 ) Other income (expense) Interest 34 943 977 Change in fair value of convertible debentures — (328 ) (328 ) Other 2 156 158 Foreign exchange loss (1,006 ) — (1,006 ) Loss before taxes $ (1,487 ) $ (4,188 ) $ (5,675 ) Depreciation and amortization included above $ 166 $ 104 $ 270 Share-based compensation included above: Selling, general and administrative 22 1,047 1,069 Cost of sales 6 — 6 Total $ 28 $ 1,047 $ 1,075 Capital expenditures $ 248 $ 6 $ 254 Products Corporate Consolidated Revenues $ 7,103 — $ 7,103 Operating costs and expenses: Cost of revenues 4,589 — 4,589 Research and development 690 $ 9 699 Selling, general and administrative 2,885 2,552 5,437 Legal and related expenses 25 982 1,007 Total operating costs and expenses 8,189 3,543 11,732 Operating loss (1,086 ) (3,543 ) (4,629 ) Other income (expense) Interest 25 47 72 Other 2 (2 ) — Foreign exchange loss (797 ) — (797 ) Loss before taxes $ (1,856 ) $ (3,498 ) $ (5,354 ) Depreciation and amortization included above $ 165 $ 83 $ 248 Share-based compensation included above: Selling, general and administrative 20 340 360 Cost of sales 6 — 6 Total $ 26 $ 340 $ 366 Capital expenditures $ 306 $ 183 $ 489 |
Basis of Presentation (Details)
Basis of Presentation (Details) - USD ($) $ in Thousands | Oct. 31, 2023 | Jul. 31, 2023 |
Cash and Cash Equivalents [Member] | ||
Basis of Presentation (Details) [Line Items] | ||
Cash and cash equivalents | $ 512 | $ 419 |
Discontinued Operations (Detail
Discontinued Operations (Details) - USD ($) | 1 Months Ended | 3 Months Ended | |
Jul. 24, 2023 | Oct. 31, 2023 | Oct. 31, 2022 | |
Discontinued Operations [Abstract] | |||
Aggregate purchase price | $ 113,250,000 | ||
Cash used in investing activities | $ 8,082 | $ 156 | |
Cash used in operation activities | $ 5,623 |
Discontinued Operations (Deta_2
Discontinued Operations (Details) - Schedule of Condensed Operating Results of the Discontinued Operations - Parent [Member] - USD ($) | 3 Months Ended | |
Oct. 31, 2023 | Oct. 31, 2022 | |
Schedule of Condensed Operating Results of the Discontinued Operations [Line Items] | ||
Net revenues | $ 11,173 | |
Cost of revenues | (175) | 10,082 |
Selling, general and administrative | 1,437 | 6,014 |
Research and development | 297 | |
Legal and related expenses | 41 | 64 |
Other income | (362) | (3) |
Loss from discontinued operations | $ (941) | $ (5,281) |
Discontinued Operations (Deta_3
Discontinued Operations (Details) - Schedule of Major Classes of Assets and liabilities of the Discontinued Operations - Parent Company [Member] - USD ($) | Oct. 31, 2023 | Jul. 31, 2023 |
Carrying amounts of major current assets included as part of discontinued operations: | ||
Trade receivables | $ 378 | $ 1,675 |
Prepaid and other current | 41 | 54 |
Total current assets | 419 | 1,729 |
Carrying amounts of major current liabilities included as part of discontinued operations: | ||
Trade payables and accrued liabilities | 11,214 | 20,616 |
Operating lease liabilities and other | 2,206 | 2,215 |
Total current liabilities | 13,420 | 22,831 |
Current liabilities of discontinued operations, net | 13,001 | 21,102 |
Carrying amount of major non-current assets included as part of discontinued operations: | ||
Right of use assets | 6,564 | 7,001 |
Other | 62 | 62 |
Total non-current assets | 6,626 | 7,063 |
Carrying amount of major non-current liabilities included as part of discontinued operations: | ||
Operating lease liabilities and other | 5,536 | 6,096 |
Non-current assets of discontinued operations, net | $ 1,090 | $ 967 |
Net Income (Loss) Per Share (De
Net Income (Loss) Per Share (Details) - shares | Oct. 31, 2023 | Oct. 31, 2022 |
Net Income (Loss) Per Share (Details) [Line Items] | ||
Common shares outstanding | 3,320,000 | 106,000 |
Debentures Subject to Mandatory Redemption [Member] | ||
Net Income (Loss) Per Share (Details) [Line Items] | ||
Common shares outstanding | 1,199,000 | 2,595,000 |
Warrant [Member] | ||
Net Income (Loss) Per Share (Details) [Line Items] | ||
Common shares outstanding | 593,000 | |
Restricted Stock Units (RSUs) [Member] | ||
Net Income (Loss) Per Share (Details) [Line Items] | ||
Common shares outstanding | 54,000 |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) | Aug. 01, 2023 | Aug. 01, 2022 |
Revenue Recognition [Abstract] | ||
Accounts receivable from continuing operations | $ 4,808 | $ 4,762 |
Revenue Recognition (Details) -
Revenue Recognition (Details) - Schedule of Products Revenue by Geography - Products revenue [Member] - USD ($) $ in Thousands | 3 Months Ended | |
Oct. 31, 2023 | Oct. 31, 2022 | |
Revenue Recognition (Details) - Schedule of Products Revenue by Geography [Line Items] | ||
Products revenue | $ 7,806 | $ 7,103 |
United States [Member] | ||
Revenue Recognition (Details) - Schedule of Products Revenue by Geography [Line Items] | ||
Products revenue | 4,635 | 4,095 |
Europe [Member] | ||
Revenue Recognition (Details) - Schedule of Products Revenue by Geography [Line Items] | ||
Products revenue | 2,138 | 1,904 |
Asia Pacific [Member] | ||
Revenue Recognition (Details) - Schedule of Products Revenue by Geography [Line Items] | ||
Products revenue | $ 1,033 | $ 1,104 |
Supplemental Disclosure for S_2
Supplemental Disclosure for Statement of Cash Flows (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Oct. 31, 2023 | Oct. 31, 2022 | Jul. 31, 2023 | |
Supplemental Disclosure for Statement of Cash Flows (Details) [Line Items] | |||
Interest paid | |||
Cash flows from operating activities | (13,374) | (8,693) | |
Escrowed proceeds were included in prepaid and other assets | $ 5,000 | ||
Restricted cash collateral deposit | 1,000 | ||
Tax on capital paid | 467 | ||
Prepaid and Other Assets [Member] | |||
Supplemental Disclosure for Statement of Cash Flows (Details) [Line Items] | |||
Escrowed proceeds were included in prepaid and other assets | 5,000 | ||
Enzo Clinical Labs [Member] | |||
Supplemental Disclosure for Statement of Cash Flows (Details) [Line Items] | |||
Restricted cash collateral deposit | 1,000 | ||
Right of Use Assets and Liabilities [Member] | |||
Supplemental Disclosure for Statement of Cash Flows (Details) [Line Items] | |||
Cash flows from operating activities | $ 148 | $ 1 |
Inventories (Details) - Schedul
Inventories (Details) - Schedule of Inventories, Net - USD ($) $ in Thousands | Oct. 31, 2023 | Jul. 31, 2023 |
Schedule of Inventories, Net [Line Items] | ||
Raw materials | $ 2,081 | $ 2,206 |
Work in process | 2,587 | 2,599 |
Finished products | 2,927 | 3,134 |
Total inventories, net | $ 7,595 | $ 7,939 |
Convertible Debentures and Ot_3
Convertible Debentures and Other Current Debt (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | ||
May 19, 2023 | Mar. 16, 2023 | Oct. 31, 2023 | Jul. 31, 2023 | |
Convertible Debentures and Other Current Debt (Details) [Line Items] | ||||
Aggregate principal amount (in Dollars) | $ 7,608 | |||
Warrants to purchase (in Shares) | 1,000,000 | |||
Common stock, par value | $ 0.01 | $ 0.01 | $ 0.01 | |
Exercise price | $ 2.31 | |||
Total purchase price (in Dollars) | $ 7,000 | |||
Debentures interest rate | 10% | |||
Increased interest rate | 18% | |||
Prepay outstanding principal amount (in Dollars) | $ 4,000 | |||
Warrants exercisable term | 5 years | |||
Warrants exercise price per share | $ 2.31 | |||
JGB Collateral, LLC [Member] | ||||
Convertible Debentures and Other Current Debt (Details) [Line Items] | ||||
Original issue discount | 10% | |||
Conversion Price [Member] | ||||
Convertible Debentures and Other Current Debt (Details) [Line Items] | ||||
Conversion price per share | $ 3.01 |
Convertible Debentures and Ot_4
Convertible Debentures and Other Current Debt (Details) - Schedule of Convertible Debentures Measured at Fair Value - USD ($) $ in Thousands | 3 Months Ended | |
Oct. 31, 2023 | Oct. 31, 2022 | |
Schedule of Convertible Debentures Measured at Fair Value [Abstract] | ||
Fair value, July 31, 2023 | $ 2,514 | |
Change in fair value of convertible debentures | 328 | |
Fair value, October 31, 2023 | $ 2,842 |
Long Term Debt (Details)
Long Term Debt (Details) SFr in Thousands, $ in Thousands | 1 Months Ended | |||
Mar. 31, 2022 USD ($) | Mar. 31, 2022 CHF (SFr) | Jul. 31, 2020 USD ($) | Apr. 30, 2020 CHF (SFr) | |
Long Term Debt [Abstract] | ||||
Foreign exchange rate amount | $ 400 | SFr 400 | ||
Bear interest rate | 0% | |||
Semiannual amortization payments | SFr 33 | |||
Exchange rates | $ 35 | SFr 33 |
Long Term Debt (Details) - Sche
Long Term Debt (Details) - Schedule of Minimum Future Annual Principal Payments $ in Thousands | Oct. 31, 2023 USD ($) |
Schedule of minimum future annual principal payments [Abstract] | |
2024 | $ 37 |
2025 | 74 |
2026 | 74 |
2027 | 74 |
2028 | 35 |
Total principal payments | 294 |
Less: current portion, included in other current liabilities | (75) |
Long term debt – net | $ 219 |
Leases (Details)
Leases (Details) $ in Thousands | 3 Months Ended |
Oct. 31, 2023 USD ($) | |
Leases (Details) [Line Items] | |
Options to extend the leases | 3 years |
Sublease income (in Dollars) | $ 126 |
Minimum [Member] | |
Leases (Details) [Line Items] | |
Lease term of contract | 1 year |
Maximum [Member] | |
Leases (Details) [Line Items] | |
Lease term of contract | 4 years |
Leases (Details) - Schedule of
Leases (Details) - Schedule of Lease Agreements Include Rental Payments - USD ($) $ in Thousands | Oct. 31, 2023 | Jul. 31, 2023 |
Assets | ||
Operating, Right-of-use assets | $ 3,405 | $ 3,626 |
Total lease assets | 3,405 | 3,626 |
Current: | ||
Operating, Current portion of operating lease liabilities | 920 | 980 |
Non-current: | ||
Operating, Operating lease liabilities, non-current | 2,972 | 3,160 |
Total lease liabilities | $ 3,892 | $ 4,140 |
Leases (Details) - Schedule o_2
Leases (Details) - Schedule of Components of Lease Cost - USD ($) $ in Thousands | 3 Months Ended | ||
Oct. 31, 2023 | Oct. 31, 2022 | ||
Schedule Of Components Of Lease Cost Abstract | |||
Operating lease cost – net | [1] | $ 141 | $ 262 |
[1] Net of $126 sublease income for the three months ended October 31, 2023. |
Leases (Details) - Schedule o_3
Leases (Details) - Schedule of Lease Liabilities $ in Thousands | Oct. 31, 2023 USD ($) | |
Schedule of Lease Liabilities [Abstract] | ||
2024 | $ 863 | |
2025 | 896 | |
2026 | 886 | |
2027 | 881 | |
2028 | 808 | |
Total lease payments | 4,334 | |
Less: Interest | (442) | [1] |
Present value of lease liabilities | $ 3,892 | |
[1] Primarily calculated using the Company’s incremental borrowing rate. |
Leases (Details) - Schedule o_4
Leases (Details) - Schedule of Lease Term and Discount Rate | Oct. 31, 2023 | Oct. 31, 2022 |
Weighted-average remaining lease term (years): | ||
Operating leases | 4 years 6 months | 5 years 6 months |
Weighted-average discount rate: | ||
Operating leases | 5.10% | 5.10% |
Accrued Liabilities and Other_3
Accrued Liabilities and Other Current Liabilities (Details) - USD ($) $ in Thousands | Oct. 31, 2023 | Jul. 31, 2023 |
Accrued Liabilities and other current liabilities [Line Items] | ||
Reserves amount | $ 252 | $ 631 |
Accrued Liabilities and Other_4
Accrued Liabilities and Other Current Liabilities (Details) - Schedule of Accrued Liabilities - USD ($) $ in Thousands | Oct. 31, 2023 | Jul. 31, 2023 | Jul. 31, 2022 |
Schedule of Accrued Liabilities [Abstract] | |||
Payroll, benefits and commissions | $ 7,715 | $ 7,421 | |
Professional fees | 543 | 610 | |
Legal | 1,095 | 2,248 | |
Other | 689 | 1,464 | |
Accrued liabilities | $ 10,042 | $ 11,743 | $ 11,743 |
Stockholders_ Equity (Details)
Stockholders’ Equity (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||
Jul. 31, 2023 | Jan. 31, 2018 | Oct. 31, 2023 | Oct. 31, 2022 | Jul. 31, 2023 | May 19, 2023 | Jan. 31, 2011 | |
Stockholders’ Equity (Details) [Line Items] | |||||||
Common stock, par value per share (in Dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | |||
Offering price (in Dollars) | $ 30,000,000 | ||||||
Aggregate Gross Proceeds Percentage | 3% | ||||||
Sales agreement (in Dollars) | $ 150,000,000 | ||||||
Common stock, shares issued | 276,479 | 276,479 | |||||
Net Proceeds (in Dollars) | $ 386,000 | ||||||
Common stock, shares issued | 4,000,000 | ||||||
Common stock granted | 4,623,000 | ||||||
Purchase shares of common stock | 519 | ||||||
Restricted stock units (RSUs) shares | 367 | ||||||
Total unrecognized compensation cost related to non-vested (in Dollars) | $ 839 | $ 138 | |||||
Vested shares | 144,530 | 10,640 | |||||
Restricted Stock Units award vest (in Dollars) | $ 173,333 | ||||||
Share based compensation expense (in Dollars) | 109,000 | 198,000 | |||||
Vest over fair market value (in Dollars) | $ 0 | 66,000 | |||||
2011 Plan [Member] | |||||||
Stockholders’ Equity (Details) [Line Items] | |||||||
Stock units | 3,000,000 | ||||||
Shares of common stock | 2,000,000 | ||||||
Common stock available for grants | 5,000,000 | ||||||
Restricted Stock Units (RSUs) [Member] | |||||||
Stockholders’ Equity (Details) [Line Items] | |||||||
Common stock, shares issued | 9,000,000 | ||||||
Share based compensation expense (in Dollars) | $ 429,000 | $ 186,000 |
Stockholders_ Equity (Details)
Stockholders’ Equity (Details) - Schedule of Share-based Compensation Expense - USD ($) $ in Thousands | 3 Months Ended | |
Oct. 31, 2023 | Oct. 31, 2022 | |
Stockholders’ Equity (Details) - Schedule of Share-based Compensation Expense [Line Items] | ||
Share-based compensation expense | $ 1,075 | $ 366 |
Selling, general and administrative [Member] | ||
Stockholders’ Equity (Details) - Schedule of Share-based Compensation Expense [Line Items] | ||
Share-based compensation expense | 1,069 | 360 |
Cost of revenues [Member] | ||
Stockholders’ Equity (Details) - Schedule of Share-based Compensation Expense [Line Items] | ||
Share-based compensation expense | 6 | 6 |
Stock options and performance stock units [Member] | ||
Stockholders’ Equity (Details) - Schedule of Share-based Compensation Expense [Line Items] | ||
Share-based compensation expense | 646 | 180 |
Restricted stock units [Member] | ||
Stockholders’ Equity (Details) - Schedule of Share-based Compensation Expense [Line Items] | ||
Share-based compensation expense | $ 429 | $ 186 |
Stockholders_ Equity (Details_2
Stockholders’ Equity (Details) - Schedule of Stock Option Activity | 3 Months Ended |
Oct. 31, 2023 USD ($) $ / shares shares | |
Schedule Of Stock Option Activity [Abstract] | |
Options, Outstanding, Beginning Balance | shares | 3,829,500 |
Weighted Average Exercise Price, Outstanding, Beginning Balance | $ / shares | $ 2.61 |
Aggregate Intrinsic Value, Beginning Balance | $ | |
Options Granted | shares | |
Weighted Average Exercise Price, Options Granted | $ / shares | |
Options Exercised | shares | |
Weighted Average Exercise Price, Options Exercised | $ / shares | |
Options Cancelled or Expired | shares | (508,916) |
Weighted Average Exercise Price, Cancelled or expired | $ / shares | $ 1.58 |
Options, Outstanding, Ending Balance | shares | 3,320,584 |
Weighted Average Exercise Price, Options Forfeited | $ / shares | $ 2.64 |
Weighted Average Remaining Contractual Term, Outstanding | 2 years 6 months |
Aggregate Intrinsic Value, Outstanding | $ | |
Options Exercisable at end of Period | shares | 2,313,784 |
Weighted Average Exercise Price, Outstanding, Ending Balance | $ / shares | $ 2.83 |
Weighted Average Remaining Exercisable | 1 year 10 months 24 days |
Aggregate Intrinsic Value, Exercisable | $ |
Stockholders_ Equity (Details_3
Stockholders’ Equity (Details) - Schedule of Summarizes Restricted Stock Unit (“RSU”) Activity - Restricted Stock Units (RSUs) [Member] $ / shares in Units, $ in Thousands | 3 Months Ended |
Oct. 31, 2023 USD ($) $ / shares shares | |
Stockholders’ Equity (Details) - Schedule of Summarizes Restricted Stock Unit (“RSU”) Activity [Line Items] | |
Number of RSUs outstanding, Outstanding at beginning of period | shares | 557,490 |
Weighted Average Fair Value per Unit at Date of Grant or Vesting, Outstanding at beginning of period | $ / shares | $ 2.21 |
Weighted Average Remaining Contractual Term, Outstanding at beginning of fiscal year | 1 year 1 month 6 days |
Aggregate Intrinsic Value, Outstanding at beginning of period | $ | $ 825 |
Number of RSUs outstanding, Granted | shares | |
Weighted Average Fair Value per Unit at Date of Grant or Vesting, Granted | $ / shares | |
Aggregate Intrinsic Value, Granted | $ | |
Number of RSUs outstanding, Vested | shares | (173,333) |
Weighted Average Fair Value per Unit at Date of Grant or Vesting, Vested | $ / shares | $ 3.39 |
Number of RSUs outstanding, Cancelled | shares | (100,000) |
Weighted Average Fair Value per Unit at Date of Grant or Vesting, Cancelled | $ / shares | $ 1.97 |
Number of RSUs outstanding, Outstanding at end of period | shares | 284,157 |
Weighted Average Fair Value per Unit at Date of Grant or Vesting, Outstanding at end of period | $ / shares | $ 1.75 |
Weighted Average Remaining Contractual Term, Outstanding at end of period | 4 months 24 days |
Aggregate Intrinsic Value, Outstanding at end of period | $ | $ 381 |
Number of RSUs outstanding, Expected to vest at end of period | shares | 284,157 |
Weighted Average Fair Value per Unit at Date of Grant or Vesting, Expected to vest at end of period | $ / shares | $ 1.75 |
Weighted Average Remaining Contractual Term, Expected to vest at end of period | 4 months 24 days |
Aggregate Intrinsic Value, Expected to vest at end of period | $ | $ 381 |
Segment Reporting (Details) - S
Segment Reporting (Details) - Schedule of Financial Information Represents the Operating Results of the Reportable Segments - USD ($) $ in Thousands | 3 Months Ended | |
Oct. 31, 2023 | Oct. 31, 2022 | |
Products [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | $ 7,806 | $ 7,103 |
Cost of revenues | 4,589 | |
Costs of revenues – inventory provision | 4,351 | |
Research and development | 838 | 690 |
Selling, general and administrative | 3,104 | 2,885 |
Legal settlements | 25 | |
Legal and related expenses | 30 | |
Total operating costs and expenses | 8,323 | 8,189 |
Operating loss | (517) | (1,086) |
Interest | 34 | 25 |
Change in fair value of convertible debentures | ||
Other | 2 | 2 |
Foreign exchange gain (loss) | (1,006) | (797) |
Loss before taxes | (1,487) | (1,856) |
Depreciation and amortization included above | 166 | 165 |
Selling, general and administrative | 22 | 20 |
Cost of sales | 6 | 6 |
Total | 28 | 26 |
Capital expenditures | 248 | 306 |
Corporate & Other [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | ||
Cost of revenues | ||
Costs of revenues – inventory provision | ||
Research and development | 11 | 9 |
Selling, general and administrative | 3,903 | 2,552 |
Legal settlements | 982 | |
Legal and related expenses | 1,045 | |
Total operating costs and expenses | 4,959 | 3,543 |
Operating loss | (4,959) | (3,543) |
Interest | 943 | 47 |
Change in fair value of convertible debentures | (328) | |
Other | 156 | (2) |
Foreign exchange gain (loss) | ||
Loss before taxes | (4,188) | (3,498) |
Depreciation and amortization included above | 104 | 83 |
Selling, general and administrative | 1,047 | 340 |
Cost of sales | ||
Total | 1,047 | 340 |
Capital expenditures | 6 | 183 |
Consolidated [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 7,806 | 7,103 |
Cost of revenues | 4,589 | |
Costs of revenues – inventory provision | 4,351 | |
Research and development | 849 | 699 |
Selling, general and administrative | 7,007 | 5,437 |
Legal settlements | 1,007 | |
Legal and related expenses | 1,075 | |
Total operating costs and expenses | 13,282 | 11,732 |
Operating loss | (5,476) | (4,629) |
Interest | 977 | 72 |
Change in fair value of convertible debentures | (328) | |
Other | 158 | |
Foreign exchange gain (loss) | (1,006) | (797) |
Loss before taxes | (5,675) | (5,354) |
Depreciation and amortization included above | 270 | 248 |
Selling, general and administrative | 1,069 | 360 |
Cost of sales | 6 | 6 |
Total | 1,075 | 366 |
Capital expenditures | $ 254 | $ 489 |
Contingencies (Details)
Contingencies (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | ||
Nov. 30, 2023 | Jul. 31, 2022 | May 31, 2022 | Oct. 31, 2023 | |
Contingencies [Abstract] | ||||
Acquisition shares (in Shares) | 2,470,000 | |||
Social security (in Shares) | 600,000 | |||
Accrued expenses | $ 2,600 | |||
Payment of other income | $ 3,600 | $ 1,024 | $ 2,123 |
Departure and Appointment of _2
Departure and Appointment of Certain Officers (Details) | 3 Months Ended |
Oct. 31, 2023 | |
Departure and Appointment of Certain Officers [Line Items] | |
Severance benefits, description | (i) a payment equaling twelve (12) months of his annual base salary of $624, subject to standard payroll deductions and withholdings; (ii) a lump-sum payment of $187, representing his annual bonus; (iii) a grant of restricted shares of the Company’s common stock, par value $0.01 per share (the “Common Stock”), in an amount equal to $1,502 with 50% of the restricted Common Stock granted as soon as reasonably practicable after September 13, 2023, and the remaining 50% granted on the earlier of July 24, 2024 or a Change in Control of the Company (as defined in Mr. Erfanian’s employment agreement with the Company); and (iv) the immediate vesting on the Separation Date of the remainder of a restricted stock unit award of 260,000 shares of Common Stock and an option to purchase 700,000 shares of Common Stock that were previously granted to Mr. Erfanian upon his employment. |