Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Apr. 30, 2018 | Jun. 14, 2018 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | NON INVASIVE MONITORING SYSTEMS INC /FL/ | |
Entity Central Index Key | 720,762 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Apr. 30, 2018 | |
Current Fiscal Year End Date | --07-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 79,007,423 | |
Trading Symbol | NIMU | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,018 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Apr. 30, 2018 | Jul. 31, 2017 |
Current assets | ||
Cash | $ 157 | $ 11 |
Prepaid expenses, deposits, and other current assets | 9 | 10 |
Total current assets | 166 | 21 |
Total assets | 166 | 21 |
Current liabilities | ||
Accounts payable and accrued expenses | 1,608 | 1,425 |
Customer deposits | 4 | 4 |
Notes payable - Related Party | 2,075 | 1,775 |
Notes payable - Other | 50 | 50 |
Total current liabilities | 3,737 | 3,254 |
Total liabilities | 3,737 | 3,254 |
Shareholders' deficit | ||
Common Stock, par value $0.01 per share; 400,000,000 shares authorized; 79,007,423 shares issued and outstanding | 790 | 790 |
Additional paid in capital | 21,930 | 21,930 |
Accumulated deficit | (26,356) | (26,018) |
Total shareholders' deficit | (3,571) | (3,233) |
Total liabilities and shareholders' deficit | 166 | 21 |
Series B Preferred Stock [Member] | ||
Shareholders' deficit | ||
Preferred Stock, value | ||
Series C Convertible Preferred Stock [Member] | ||
Shareholders' deficit | ||
Preferred Stock, value | 62 | 62 |
Series D Convertible Preferred Stock [Member] | ||
Shareholders' deficit | ||
Preferred Stock, value | $ 3 | $ 3 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Apr. 30, 2018 | Jul. 31, 2017 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 400,000,000 | 400,000,000 |
Common stock, shares issued | 79,007,423 | 79,007,423 |
Common stock, shares outstanding | 79,007,423 | 79,007,423 |
Series B Preferred Stock [Member] | ||
Preferred stock, par value | $ 1 | $ 1 |
Preferred stock, shares authorized | 100,000 | 100,000 |
Preferred stock, shares issued | 100,000 | 100,000 |
Preferred stock, shares outstanding | 100,000 | 100,000 |
Preferred stock, liquidation preference | $ 10 | $ 10 |
Series C Convertible Preferred Stock [Member] | ||
Preferred stock, par value | $ 1 | $ 1 |
Preferred stock, shares authorized | 62,048,000 | 62,048,000 |
Preferred stock, shares issued | 62,048,000 | 62,048,000 |
Preferred stock, shares outstanding | 62,048,000 | 62,048,000 |
Preferred stock, liquidation preference | $ 62 | $ 62 |
Series D Convertible Preferred Stock [Member] | ||
Preferred stock, par value | $ 1 | $ 1 |
Preferred stock, shares authorized | 5,500,000 | 5,500,000 |
Preferred stock, shares issued | 2,782,000 | 2,782,000 |
Preferred stock, shares outstanding | 2,782,000 | 2,782,000 |
Preferred stock, liquidation preference | $ 4,173 | $ 4,173 |
Condensed Consolidated Comprehe
Condensed Consolidated Comprehensive Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Apr. 30, 2018 | Apr. 30, 2017 | Apr. 30, 2018 | Apr. 30, 2017 | |
Revenues | ||||
Product sales, net | $ 6 | |||
Total revenues | 6 | |||
Operating costs and expenses | ||||
Cost of sales | 99 | |||
Selling, general and administrative | 55 | 55 | 177 | 176 |
Total operating costs and expenses | 55 | 55 | 177 | 275 |
Operating loss | (55) | (55) | (177) | (269) |
Interest expense, net | (56) | (47) | (161) | (143) |
Net loss | $ (111) | $ (102) | $ (338) | $ (412) |
Weighted average number of common shares outstanding - Basic and diluted | 79,007,000 | 79,007,000 | 79,007,000 | 79,007,000 |
Basic and diluted loss per common share | $ 0 | $ 0 | $ 0 | $ (0.01) |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Changes in Shareholders' Deficit (Unaudited) - 9 months ended Apr. 30, 2018 - USD ($) $ in Thousands | Series B Preferred Stock [Member] | Series C Preferred Stock [Member] | Series D Preferred Stock [Member] | Common Stock [Member] | Additional Paid In Capital [Member] | Accumulated Deficit [Member] | Total |
Balance, beginning at Jul. 31, 2017 | $ 62 | $ 3 | $ 790 | $ 21,930 | $ (26,018) | $ (3,233) | |
Balance, beginning shares at Jul. 31, 2017 | 100,000 | 62,048,000 | 2,782,000 | 79,007,423 | |||
Net loss | (338) | (338) | |||||
Balance, ending at Apr. 30, 2018 | $ 62 | $ 3 | $ 790 | $ 21,930 | $ (26,356) | $ (3,571) | |
Balance, ending shares at Apr. 30, 2018 | 100,000 | 62,048,000 | 2,782,000 | 79,007,423 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Apr. 30, 2018 | Apr. 30, 2017 | |
Operating activities | ||
Net Loss | $ (338) | $ (412) |
Adjustments to reconcile net loss to net cash used in operating activities | ||
Depreciation and amortization | ||
Changes in operating assets and liabilities | ||
Accounts receivable – trade | ||
Gain on disposal of assets | (3) | |
Write down of inventory | 99 | |
Inventories, net | ||
Prepaid expenses, deposits and other current assets | 1 | 47 |
Accounts payable and accrued expenses | 183 | 168 |
Net cash used in operating activities | (154) | (101) |
Investing activities | ||
Sale of fixed asset | 3 | |
Net cash provided by investing activities | 3 | |
Financing activities | ||
Proceeds from note payable – related party | 300 | 100 |
Net cash provided by financing activities | 300 | 100 |
Net increase in cash | 146 | 2 |
Cash, beginning of period | 11 | 87 |
Cash, end of period | $ 157 | $ 89 |
Organization and Business
Organization and Business | 9 Months Ended |
Apr. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Business | 1. ORGANIZATION AND BUSINESS Organization. ® Business. ® During the calendar years 2005 to 2007, the Company designed, developed and manufactured the first Exer-Rest platform (now the Exer-Rest AT), a second generation acceleration therapeutics platform, and updated its operations to promote the Exer-Rest AT overseas as an aid to improve circulation and joint mobility and to relieve minor aches and pains. The Company has developed a third generation of Exer-Rest acceleration therapeutic platforms (designated the Exer-Rest AT3800 and the Exer-Rest AT4700) that has been manufactured by Sing Lin Technologies Co. Ltd. (“Sing Lin”) based in Taichung, Taiwan (see Note 10). The Company’s condensed financial statements have been prepared and presented on a basis assuming it will continue as a going concern. As reflected in the accompanying unaudited condensed consolidated financial statements, the Company had net losses of $338,000 and $412,000 for the nine month periods ended April 30, 2018 and 2017, respectively, and has experienced cash outflows from operating activities. The Company also has an accumulated deficit of $26.4 million as of April 30, 2018 and has potential purchase obligations at April 30, 2018 (see note 10). The Company had $157,000 of cash at April 30, 2018 and negative working capital of approximately $3,571,000. These matters raise substantial doubt about the Company’s ability to continue as a going concern. The Company is continuing its business activities without any significant revenues from product sales. Absent any significant revenues from product sales, the Company is seeking debt or equity financing or a strategic collaboration. There is no assurance that the Company will be successful in this regard, and, if not successful, that it will be able to continue its business activities. The accompanying condensed consolidated financial statements do not include any adjustments that might be necessary from the outcome of this uncertainty. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Apr. 30, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Consolidation. Use of Estimates. Cash and Cash Equivalents. Allowances for Doubtful Accounts. Inventories. Tooling and Equipment. Long-lived Assets. Taxes Assessed on Revenue-Producing Transactions. Income Taxes. The Company files its tax returns as prescribed by the laws of the jurisdictions in which it operates. Tax years ranging from 2014 to 2017 remain open to examination by various taxing jurisdictions as the statute of limitations has not expired. It is the Company’s policy to include income tax interest and penalty expense in its tax provision. As a result of the valuation allowance, the enactment of the Tax Cuts and Jobs Act of 2017 had no effect on the statement of operations. Due to the timing of the enactment and complexity involved in applying the provisions of the Tax Act, the Company based our provisions on reasonable estimates of the Act’s effects in our financial statements as of December 31, 2017. The Company will complete its accounting for the Act after it has considered additional guidance issued by the U.S. Treasury Department, the IRS, state tax authorities and other standard-setting bodies, and have gathered and analyzed additional data relative to the Company’s calculations. This may result in adjustments to the provisional amounts, which would impact the provision for income taxes and effective tax rate in the period the adjustments are made. Revenue Recognition. Advertising Costs. Research and Development Costs. ® Warranties. ® Stock-based compensation. Fair Value of Financial Instruments. Loss Contingencies. Recent Accounting Pronouncements. Statement of Cash Flows (Topic 230) In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases Leases In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers.” ASU 2014-09, as amended, clarifies the principles for recognizing revenue and develops a common revenue standard for GAAP that removes inconsistencies and weaknesses in revenue requirements, provides a more robust framework for addressing revenue issues, improves comparability of revenue recognition practices across entities, industries, jurisdictions, and capital markets, provides more useful information to users of financial statements through improved disclosure requirements and simplifies the preparation of financial statements by reducing the number of requirements to which an entity must refer. ASU 2014-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. Companies can choose to apply the ASU using either the full retrospective approach or a modified retrospective approach. We are currently evaluating the impact of this new guidance on our Condensed Consolidated Financial Statements. |
Inventories
Inventories | 9 Months Ended |
Apr. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories | 3. INVENTORIES The Company recorded inventory valuation adjustments of $99,000 and $327,000 for the years ended July 31, 2017 and 2016, respectively. The $99,000 and $327,000 inventory valuation adjustment for the year ended July 31, 2017 and 2016, respectively, resulted from management’s business review and related assessment of the net realizable value of the Exer-Rest units. Factors in this determination included the age of inventory, recent historical sales, and the uncertainty of when the Company would have a sales team, either internal or through an alliance or collaboration, for the Exer-Rest. In light of the change in circumstances in connection with management’s business review which included a decision to not pursue re-hiring a sales force or such other alternatives in the foreseeable future, management reassessed its inventory valuation and recorded a provision on inventory. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Apr. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | 4. STOCK-BASED COMPENSATION The Company measures the cost of employee, officer and director services received in exchange for an award of equity instruments based on the grant-date fair value of the award. The fair value of the Company’s stock option awards is expensed over the vesting life of the underlying stock options using the graded vesting method, with each tranche of vesting options valued separately. The Company recorded stock-based compensation of $0 for the nine months ended April 30, 2018 and 2017. In November 2010, the Company’s Board and Compensation Committee approved the Non-Invasive Monitoring Systems, Inc. 2011 Stock Incentive Plan (the “2011 Plan”). Awards granted under the 2011 Plan may consist of incentive stock options, stock appreciation rights (SAR), restricted stock grants, restricted stock units (RSU) performance shares, performance units or cash awards. Subject to adjustment in certain circumstances, the 2011 Plan authorizes up to 4,000,000 shares of the Company’s common stock for issuance pursuant to the terms of the 2011 Plan. The 2011 Plan was approved by our shareholders in March 2012 and no awards have been granted under the 2011 Plan as of April 30, 2018. As of April 30, 2018, there were no outstanding stock options. The Company did not grant any stock options during the nine months ended April 30, 2018 or 2017. |
Notes Payable
Notes Payable | 9 Months Ended |
Apr. 30, 2018 | |
Debt Disclosure [Abstract] | |
Notes Payable | 5. NOTES PAYABLE 2010 Credit Facility. 2011 Promissory Notes. 2012 Promissory Note. 2013 Promissory Note. 2014 Promissory Note. 2015 Promissory Notes. On April 16, 2015, the Company entered into a promissory note (“April 2015 Frost Gamma Note”) in the amount of $100,000 with Frost Gamma”), a trust controlled by Dr. Phillip Frost, which beneficially owns in excess of 10% of the Company’s common stock. The interest rate payable by the Company on the April 2015 Frost Gamma Note is 11% per annum, payable on the Promissory Notes Maturity Date. The April 2015 Frost Gamma Note may be prepaid in advance of the Promissory Notes Maturity Date without premium or penalty. On August 12, 2015, the Company entered into a promissory note in the principal amount of $25,000 with Frost Gamma (the “August 2015 Frost Gamma Note”), a trust controlled by Dr. Phillip Frost, which beneficially owns in excess of 10% of the Company’s common stock. The interest rate payable by the Company on the August 2015 Frost Gamma Note is 11% per annum, payable on the Promissory Notes Maturity Date. The August 2015 Frost Gamma Note may be prepaid in advance of the Promissory Notes Maturity Date without premium or penalty. On October 27, 2015, the Company entered into a promissory note in the principal amount of $50,000 with Frost Gamma (the “October 2015 Frost Gamma Note”), a trust controlled by Dr. Phillip Frost, which beneficially owns in excess of 10% of the Company’s common stock. The interest rate payable by the Company on the October 2015 Frost Gamma Note is 11% per annum, payable on the Promissory Notes Maturity Date. The October 2015 Frost Gamma Note may be prepaid in advance of the Promissory Notes Maturity Date without premium or penalty. On October 27, 2015, the Company entered into a promissory note in the principal amount of $50,000 with Jane Hsiao, the Company’s Chairman of the Board and Interim Chief Executive Officer (the “October 2015 Hsiao Note”). The interest rate payable by the Company on the October 2015 Hsiao Note is 11% per annum, payable on the Promissory Notes Maturity Date. The October 2015 Hsiao Note may be prepaid in advance of the Promissory Notes Maturity Date without premium or penalty. 2016 Promissory Notes. On June 1, 2016, the Company entered into a promissory note in the principal amount of $100,000 with Hsu Gamma, an entity controlled by NIMS’ Chairman of the Board and Interim Chief Executive Officer, Jane H. Hsiao, (the “June 2016 Hsu Gamma Note”). The interest rate payable by NIMS on the June 2016 Hsu Gamma Note is 11% per annum, payable on the Promissory Notes Maturity Date. The June 2016 Hsu Gamma Note may be prepaid in advance of the Promissory Notes Maturity Date without premium or penalty. 2017 Promissory Notes. On April 6, 2017, the Company entered into a promissory note in the principal amount of $50,000 with Hsu Gamma, an entity controlled by NIMS’ Chairman of the Board and Interim Chief Executive Officer, Jane H. Hsiao, (the “2017 Hsu Gamma Note”). The interest rate payable by NIMS on the 2017 Hsu Gamma Note is 11% per annum, payable on the Promissory Notes Maturity Date. The 2017 Hsu Gamma Note may be prepaid in advance of the Promissory Notes Maturity Date without premium or penalty. On September 22, 2017, the Company entered into a promissory note in the principal amount of $50,000 with Frost Gamma (the “September 2017 Frost Gamma Note”), a trust controlled by Dr. Phillip Frost, which beneficially owns in excess of 10% of the Company’s common stock. The interest rate payable by the Company on the 2017 Frost Gamma Note is 11% per annum, payable on the Promissory Notes Maturity Date. The 2017 Frost Gamma Note may be prepaid in advance of the Promissory Notes Maturity Date without premium or penalty. On September 22, 2017, the Company entered into a promissory note in the principal amount of $50,000 with Hsu Gamma, an entity controlled by NIMS’ Chairman of the Board and Interim Chief Executive Officer, Jane H. Hsiao, (the “September 2017 Hsu Gamma Note”). The interest rate payable by NIMS on the 2017 Hsu Gamma Note is 11% per annum, payable on the Promissory Notes Maturity Date. The 2017 Hsu Gamma Note may be prepaid in advance of the Promissory Notes Maturity Date without premium or penalty. 2018 Promissory Notes. On February 15, 2018, the Company entered into a promissory note in the principal amount of $100,000.00 with Frost Gamma Investments Trust (the “2018 Frost Gamma Note”), a trust controlled by Dr. Phillip Frost, which beneficially owns in excess of 10% of NIMS’ common stock. The interest rate payable by NIMS on the 2018 Frost Gamma Note is 11% per annum, payable on the Promissory Notes Maturity Date. The 2018 Frost Gamma Note may be prepaid in advance of the Maturity Date without penalty. On February 15, 2018, NIMS entered into a promissory note in the principal amount of $100,000.00 with Hsu Gamma Investments, L.P., an entity controlled by the Company’s Chairman and Interim CEO, Jane Hsiao (the “2018 Hsu Gamma Note”). The interest rate payable by NIMS on the 2018 Hsu Gamma Note is 11% per annum, payable on the Promissory Notes Maturity Date. The 2018 Hsu Gamma Note may be prepaid in advance of the Maturity Date without penalty. At April 30, 2018, the Company was obligated under the above described Credit Facility and promissory notes to make future principal payments (excluding interest) as follows: Year Ending July 31, 2018 2,125,000 $ 2,125,000 |
Shareholders' Equity
Shareholders' Equity | 9 Months Ended |
Apr. 30, 2018 | |
Equity [Abstract] | |
Shareholders' Equity | 6. SHAREHOLDERS’ EQUITY The Company has three classes of Preferred Stock. Holders of Series B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock are entitled to vote with the holders of common stock as a single class on all matters. Series B Preferred Stock is not redeemable by the Company and has a liquidation value of $100 per share, plus declared and unpaid dividends, if any. Dividends are non-cumulative, and are at the rate of $10 per share, if declared. Series C Preferred Stock is redeemable by the Company at a price of $0.10 per share upon 30 days prior written notice. This series has a liquidation value of $1.00 per share plus declared and unpaid dividends, if any. Dividends are non-cumulative, and are at the rate of $0.10 per share, if declared. Each share of Series C Preferred Stock is convertible into 25 shares of the Company’s common stock upon payment of a conversion premium of $4.20 per share of common stock. The conversion rate and the conversion premium are subject to adjustments in the event of stock splits, stock dividends, reverse stock splits and certain other events. Series D Preferred Stock is not redeemable by the Company. This series has a liquidation value of $1,500 per share, plus declared and unpaid dividends, if any. Each share of Series D Preferred Stock is convertible into 5,000 shares of the Company’s common stock. The conversion rate is subject to adjustments in the event of stock splits, stock dividends, reverse stock splits and certain other events. The Company did not issue any shares of the Company’s common stock for the nine months ended April 30, 2018 and 2017. No preferred stock dividends were declared for the three and nine months ended April 30, 2018 and 2017. |
Basic and Diluted Loss Per Shar
Basic and Diluted Loss Per Share | 9 Months Ended |
Apr. 30, 2018 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Loss Per Share | 7. BASIC AND DILUTED LOSS PER SHARE Basic net loss per common share is computed by dividing net loss attributable to common shareholders by the weighted average number of common shares outstanding during the period. Diluted net loss per common share is computed giving effect to all dilutive potential common shares that were outstanding during the period. Diluted potential common shares consist of incremental shares issuable upon exercise of stock options and warrants and conversion of preferred stock. In computing diluted net loss per share for the three and nine months ended April 30, 2018 and 2017, no dilution adjustment has been made to the weighted average outstanding common shares because the assumed exercise of outstanding options and warrants and the conversion of preferred stock would be anti-dilutive. Potential common shares not included in calculating diluted net loss per share are as follows: April 30, 2018 April 30, 2017 Stock options - - Series C Preferred Stock 1,551,200 1,551,200 Series D Preferred Stock 13,910,000 13,910,000 Total 15,461,200 15,461,200 |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Apr. 30, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 8. RELATED PARTY TRANSACTIONS The Company signed a five year lease for office space in Miami, Florida with a company owned by Dr. Phillip Frost, who is the beneficial owner of more than 10% of the Company’s Common Stock. The rental payments under the Miami office lease, which commenced January 1, 2008 and expired on December 31, 2012, were approximately $1,250 per month and continued on a month-to-month basis. In February 2016, the office space rent was reduced to $0 per month. The Company did not record any rent expense related to the Miami lease for the three and nine months ended April 30, 2018. The Company signed a three year lease for warehouse space in Hialeah, Florida with a company jointly controlled by Dr. Frost and Dr. Jane Hsiao, the Company’s Chairman and Interim CEO. The rental payments under the Hialeah warehouse lease, which commenced February 1, 2009 and expired on January 31, 2012, were approximately $5,000 per month for the first year and were subsequently on a month-to-month basis following the expiration of the lease. As further described in Note 9, the Company vacated the Hialeah warehouse in September 2014 and entered into a new lease with an unrelated third party. The Company did not record any rent expense related to the Hialeah warehouse for the three and nine months ended April 30, 2018 and 2017. Accounts payable related to the two leases above totaled approximately $191,000 as of April 30, 2018 and July 31, 2017. The Company has the Credit Facility and multiple notes payable outstanding to related parties, as more fully described in Note 5 to these consolidated financial statements. The Company incurred interest expense related to the Credit Facility of approximately $27,000 and $83,000 for the three and nine months ended April 30, 2018 and 2017. The Company also incurred interest expense related to the promissory notes of approximately $29,000 and $78,000 for the three and nine months ended April 30, 2018 and $20,000 and $60,000 for the three and nine months ended April 30, 2017, respectively. Approximately $1,164,000 and $1,003,000 of accrued interest remained outstanding at April 30, 2018 and July 31, 2017, respectively. Dr. Hsiao, Dr. Frost and directors Steven Rubin and Rao Uppaluri are each stockholders, current or former officers and/or directors or former directors of TransEnterix, Inc. (formerly SafeStitch Medical, Inc.) (“TransEnterix”), a publicly-traded medical device manufacturer, Cogint, Inc. (“Cogint”) (formerly known as IDI, Inc.), a publicly-traded data fusion company, Red Violet, a publicly-traded software services company spun off from Cogint, Chromadex Corp., a publicly-traded integrated, global nutraceutical company devoted to improving the way people age., Eloxx Pharmaceuticals, Inc., a publicly-traded clinical-stage biopharmaceutical company developing novel RNA-modulating drug candidates that are designed to treat rare and ultra-rare premature stop codon diseases and VBI Vaccines Inc, a vaccine development company. The Company’s Chief Financial Officer also served as the Chief Financial Officer of TransEnterix until October 2, 2013. The Company’s Chief Financial Officer continued as an employee of TransEnterix until March 3, 2014, during which he supervised the Miami based accounting staff of TransEnterix under a cost sharing arrangement whereby the total salaries of the Miami based accounting staff was shared by the Company and TransEnterix. Since December 2009, the Company’s Chief Legal Officer has served under a similar cost sharing arrangement as Corporate Counsel of Cogint and as the Chief Legal Officer of TransEnterix. The Company recorded additions to selling, general and administrative costs and expenses to account for the sharing of costs under these arrangements of $9,000 and $27,000, respectively, for the three and nine months ended April 30, 2018, and $9,000 and $27,000, respectively, for the three and nine months ended April 30, 2017. Accounts payable to TransEnterix related to these arrangements totaled approximately $1,200 and $800 respectively, at April 30, 2018 and July 31, 2017. NIMS is under common control with multiple entities and the existence of that control could result in operating results or financial position of each individual entity significantly different from those that would have been obtained if the entities were autonomous. One of those related parties, OPKO Health, Inc. and NIMS are under common control and OPKO Health, Inc. has a one percent ownership interest in NIMS that OPKO has accounted for as an equity method investment due to the ability to significantly influence NIMS. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Apr. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 9. COMMITMENTS AND CONTINGENCIES Leases. The Company is under an operating lease agreement for our corporate office space that expired in 2012. The lease currently continues on a month to month basis at no cost. We house our inventory in approximately 4,000 square feet of warehouse space in Pembroke Park, Florida. The lease commenced September 15, 2014 and originally expired on September 30, 2015 and we have exercised our option to renew the lease and extended the expiration to September 15, 2017. Following the expiration, we have remained on a month-to-month term. Generally, the lease agreements require the payment of base rent plus escalations for increases in building operating costs and real estate taxes. Rental expense for operating leases amounted to $33,000 and $33,000 for the nine months ended April 30, 2018 and 2017, respectively. Product Development and Supply Agreement. On September 4, 2007, the Company entered into a Product Development and Supply Agreement (the “Agreement”) with Sing Lin Technologies Co. Ltd., a company based in Taichung, Taiwan (“Sing Lin”). Pursuant to the Agreement, the Company consigned to Sing Lin the development and design of the next generation Exer-Rest and related devices. The Agreement commenced as of September 3, 2007 and had a term that extended three years from the acceptance by NIMS of the first run of production units. Thereafter, the Agreement automatically renewed for successive one year terms unless either party sent the other a notice of non-renewal. Either party was permitted to terminate the Agreement with ninety days prior written notice. Upon termination, each party’s obligations under the Agreement were to be limited to obligations related to confirm orders placed prior to the termination date. Pursuant to the Agreement, Sing Lin designed, developed and manufactured the tooling required to manufacture the acceleration therapeutic platforms for a total cost to the Company of $471,000. Sing Lin utilized the tooling in the performance of its production obligations under the Agreement. The Company paid Sing Lin $150,000 of the tooling cost upon execution of the Agreement and $150,000 upon the Company’s approval of the product prototype concepts and designs. The balance of the final tooling cost became due and payable in September 2008 upon acceptance of the first units produced using the tooling and was paid in full during the year ended July 31, 2009. Under the now-terminated Agreement, the Company also granted Sing Lin the exclusive distribution rights for the products in certain countries in the Far East, including Taiwan, China, Japan, South Korea, Malaysia, Indonesia and certain other countries. Sing Lin agreed not to sell the Products outside its geographic areas in the Far East. The Agreement provided for the Company to purchase approximately $2.6 million of Exer-Rest units within one year of the September 2008 acceptance of the final product. The Agreement further provided for the Company to purchase $4.1 million and $8.8 million of Exer-Rest products in the second and third years following such acceptance, respectively. These minimum purchase amounts were based upon 2007 product costs multiplied by volume commitments. Through April 30, 2018, the Company had paid Sing Lin $1.7 million in connection with orders placed through that date. Of this amount, $90,000 was previously included as advances to contract manufacturer. As of April 30, 2018, the Company has approximately $41,000 of payables due to Sing Lin. As of April 30, 2018, and July 31, 2017, aggregate minimum future purchases under the Agreement totaled approximately $13.9 million. As of April 30, 2018, the Company had not placed orders sufficient to meet the first-year or second-year minimum purchase obligations under the Agreement. The Company notified Sing Lin in June 2010 that it was terminating the Agreement effective September 2010 and Sing Lin in July 2010 demanded that the Company place orders sufficient to fulfill the three year minimum purchase obligations in the Agreement. As of June 14, 2018, Sing Lin has not followed up on its July 2010 demand. There can be no assurance that Sing Lin will not attempt to enforce its remedies under the Agreement or pursue other potential remedies. |
Risks and Uncertainties and Con
Risks and Uncertainties and Concentrations of Risk | 9 Months Ended |
Apr. 30, 2018 | |
Risks and Uncertainties [Abstract] | |
Risks and Uncertainties and Concentrations of Risk | 10. RISKS AND UNCERTAINTIES AND CONCENTRATIONS OF RISK Financial instruments that potentially subject the Company to risk consist principally of purchases and advances to contract manufacturer. Purchases from and Advances to Contract Manufacturer. |
Summary of Significant Accoun17
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Apr. 30, 2018 | |
Accounting Policies [Abstract] | |
Consolidation | Consolidation. |
Use of Estimates | Use of Estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents. |
Allowances for Doubtful Accounts | Allowances for Doubtful Accounts. |
Inventories | Inventories. |
Tooling and Equipment | Tooling and Equipment. |
Long-lived Assets | Long-lived Assets. |
Taxes Assessed on Revenue-Producing Transactions | Taxes Assessed on Revenue-Producing Transactions. |
Income Taxes | Income Taxes. The Company files its tax returns as prescribed by the laws of the jurisdictions in which it operates. Tax years ranging from 2014 to 2017 remain open to examination by various taxing jurisdictions as the statute of limitations has not expired. It is the Company’s policy to include income tax interest and penalty expense in its tax provision. As a result of the valuation allowance, the enactment of the Tax Cuts and Jobs Act of 2017 had no effect on the statement of operations. Due to the timing of the enactment and complexity involved in applying the provisions of the Tax Act, the Company based our provisions on reasonable estimates of the Act’s effects in our financial statements as of December 31, 2017. The Company will complete its accounting for the Act after it has considered additional guidance issued by the U.S. Treasury Department, the IRS, state tax authorities and other standard-setting bodies, and have gathered and analyzed additional data relative to the Company’s calculations. This may result in adjustments to the provisional amounts, which would impact the provision for income taxes and effective tax rate in the period the adjustments are made. |
Revenue Recognition | Revenue Recognition. |
Advertising Costs | Advertising Costs. |
Research and Development Costs | Research and Development Costs. ® |
Warranties | Warranties. ® |
Stock-based Compensation | Stock-based compensation. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments. |
Loss Contingencies | Loss Contingencies. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements. Statement of Cash Flows (Topic 230) In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases Leases In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers.” ASU 2014-09, as amended, clarifies the principles for recognizing revenue and develops a common revenue standard for GAAP that removes inconsistencies and weaknesses in revenue requirements, provides a more robust framework for addressing revenue issues, improves comparability of revenue recognition practices across entities, industries, jurisdictions, and capital markets, provides more useful information to users of financial statements through improved disclosure requirements and simplifies the preparation of financial statements by reducing the number of requirements to which an entity must refer. ASU 2014-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. Companies can choose to apply the ASU using either the full retrospective approach or a modified retrospective approach. We are currently evaluating the impact of this new guidance on our Condensed Consolidated Financial Statements. |
Notes Payable (Tables)
Notes Payable (Tables) | 9 Months Ended |
Apr. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Credit Facility and Promissory Notes to Future Principal Payments | At April 30, 2018, the Company was obligated under the above described Credit Facility and promissory notes to make future principal payments (excluding interest) as follows: Year Ending July 31, 2018 2,125,000 $ 2,125,000 |
Basic and Diluted Loss Per Sh19
Basic and Diluted Loss Per Share (Tables) | 9 Months Ended |
Apr. 30, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Common Shares Not Included in Calculation of Diluted Net Loss Per Share | Potential common shares not included in calculating diluted net loss per share are as follows: April 30, 2018 April 30, 2017 Stock options - - Series C Preferred Stock 1,551,200 1,551,200 Series D Preferred Stock 13,910,000 13,910,000 Total 15,461,200 15,461,200 |
Organization and Business (Deta
Organization and Business (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Apr. 30, 2018 | Apr. 30, 2017 | Apr. 30, 2018 | Apr. 30, 2017 | Jul. 31, 2017 | Jul. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||
Net loss | $ 111 | $ 102 | $ 338 | $ 412 | ||
Accumulated deficit | 26,356 | 26,356 | $ 26,018 | |||
Cash | 157 | $ 89 | 157 | $ 89 | $ 11 | $ 87 |
Negative working capital | $ 3,571 | $ 3,571 |
Summary of Significant Accoun21
Summary of Significant Accounting Policies (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Apr. 30, 2018 | Apr. 30, 2017 | Apr. 30, 2018 | Apr. 30, 2017 | Jul. 31, 2017 | Jul. 31, 2016 | |
Cash | $ 157 | $ 89 | $ 157 | $ 89 | $ 11 | $ 87 |
Advertising and promotional costs | ||||||
Warranty costs | ||||||
Exer-Rest Products [Member] | Domestic [Member] | ||||||
Product warranties period | 2 years | |||||
Exer-Rest Products [Member] | U.S. Outside [Member] | ||||||
Product warranties period | 1 year | |||||
Minimum [Member] | ||||||
Income tax examination year under examination | 2,014 | |||||
Maximum [Member] | ||||||
Income tax examination year under examination | 2,017 |
Inventories (Details Narrative)
Inventories (Details Narrative) - USD ($) $ in Thousands | Jul. 31, 2017 | Jul. 31, 2016 |
Inventory valuation adjustments | $ 99 | $ 327 |
Exer Rest Units [Member] | ||
Inventory valuation adjustments | $ 99 | $ 327 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details Narrative) - USD ($) $ in Thousands | 9 Months Ended | ||
Apr. 30, 2018 | Apr. 30, 2017 | Nov. 30, 2010 | |
Stock-based compensation | $ 0 | $ 0 | |
2011 Stock Incentive Plan [Member] | |||
Maximum number of shares authorized for issuance under the plan | 4,000,000 |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) - USD ($) $ in Thousands | Sep. 12, 2011 | Mar. 31, 2010 | Apr. 30, 2018 | Feb. 15, 2018 | Sep. 22, 2017 | Jul. 31, 2017 | Apr. 06, 2017 | Jun. 01, 2016 | Oct. 27, 2015 | Aug. 12, 2015 | Apr. 16, 2015 | Feb. 02, 2015 | Sep. 24, 2014 | Feb. 22, 2013 | May 30, 2012 |
Short-term Debt [Line Items] | |||||||||||||||
Note payable to unrelated third party | $ 50 | $ 50 | |||||||||||||
Frost Gamma Investment Trust [Member] | 2011 Promissory Notes One [Member] | |||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||
Beneficial ownership percentage | 10.00% | ||||||||||||||
Debt instrument maturity date | Jul. 31, 2018 | ||||||||||||||
Debt instrument interest rate | 11.00% | ||||||||||||||
Debt principal amount | $ 50 | ||||||||||||||
Frost Gamma Investment Trust [Member] | 2011 Promissory Notes Two [Member] | |||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||
Beneficial ownership percentage | 10.00% | ||||||||||||||
Debt instrument maturity date | Jul. 31, 2018 | ||||||||||||||
Debt instrument interest rate | 11.00% | ||||||||||||||
Debt principal amount | $ 50 | ||||||||||||||
Frost Gamma Investment Trust [Member] | 2011 Promissory Notes [Member] | |||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||
Note payable to unrelated third party | $ 100 | ||||||||||||||
Frost Gamma Investment Trust [Member] | 2015 Promissory Note [Member] | |||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||
Beneficial ownership percentage | 10.00% | 10.00% | 10.00% | ||||||||||||
Debt instrument interest rate | 11.00% | 11.00% | 11.00% | ||||||||||||
Debt principal amount | $ 50 | $ 25 | $ 100 | ||||||||||||
Frost Gamma Investment Trust [Member] | 2016 Promissory Note [Member] | |||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||
Beneficial ownership percentage | 10.00% | ||||||||||||||
Debt instrument interest rate | 11.00% | ||||||||||||||
Debt principal amount | $ 100 | ||||||||||||||
Hsu Gamma Investments L P [Member] | 2012 Promissory Note [Member] | |||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||
Debt instrument interest rate | 11.00% | ||||||||||||||
Debt principal amount | $ 50 | ||||||||||||||
Jane Hsiao [Member] | 2013 Promissory Note [Member] | |||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||
Debt instrument interest rate | 11.00% | ||||||||||||||
Debt principal amount | $ 50 | ||||||||||||||
Jane Hsiao [Member] | 2014 Promissory Note [Member] | |||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||
Debt instrument interest rate | 11.00% | ||||||||||||||
Debt principal amount | $ 50 | ||||||||||||||
Jane Hsiao [Member] | 2015 Promissory Note [Member] | |||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||
Debt instrument interest rate | 11.00% | 11.00% | |||||||||||||
Debt principal amount | $ 50 | $ 50 | |||||||||||||
Hsu Gamma [Member] | 2016 Promissory Note [Member] | |||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||
Debt instrument interest rate | 11.00% | ||||||||||||||
Debt principal amount | $ 100 | ||||||||||||||
Hsu Gamma [Member] | 2017 Promissory Notes [Member] | |||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||
Debt instrument interest rate | 11.00% | 11.00% | |||||||||||||
Debt principal amount | $ 50 | $ 50 | |||||||||||||
Hsu Gamma [Member] | 2018 Promissory Notes [Member] | |||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||
Beneficial ownership percentage | 10.00% | ||||||||||||||
Debt instrument interest rate | 11.00% | ||||||||||||||
Debt principal amount | $ 100 | ||||||||||||||
Frost Gamma [Member] | 2017 Promissory Notes [Member] | |||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||
Beneficial ownership percentage | 10.00% | 10.00% | |||||||||||||
Debt instrument interest rate | 11.00% | 11.00% | |||||||||||||
Debt principal amount | $ 50 | $ 50 | |||||||||||||
Frost Gamma [Member] | 2018 Promissory Notes [Member] | |||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||
Beneficial ownership percentage | 10.00% | ||||||||||||||
Debt instrument interest rate | 11.00% | ||||||||||||||
Debt principal amount | $ 100 | ||||||||||||||
2010 Credit Facility [Member] | |||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||
Line of credit facility outstanding | $ 1,000 | ||||||||||||||
2010 Credit Facility [Member] | Frost Gamma and Hsu Gamma [Member] | |||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||
Beneficial ownership percentage | 10.00% | ||||||||||||||
Line of credit maximum borrowing capacity | $ 1,000 | ||||||||||||||
Debt instrument maturity date | Jul. 31, 2018 | ||||||||||||||
Debt instrument interest rate | 11.00% | ||||||||||||||
2010 Credit Facility [Member] | Frost Gamma and Hsu Gamma [Member] | Maximum [Member] | |||||||||||||||
Short-term Debt [Line Items] | |||||||||||||||
Debt instrument interest rate | 16.00% |
Notes Payable - Schedule of Cre
Notes Payable - Schedule of Credit Facility and Promissory Notes to Future Principal Payments (Details) $ in Thousands | Apr. 30, 2018USD ($) |
Debt Disclosure [Abstract] | |
2,018 | $ 2,125 |
Total | $ 2,125 |
Shareholders' Equity (Details N
Shareholders' Equity (Details Narrative) | 9 Months Ended |
Apr. 30, 2018$ / sharesshares | |
Series B Preferred Stock [Member] | |
Subsidiary, Sale of Stock [Line Items] | |
Preferred stock liquidation preference | $ 100 |
Dividends payable amount per share | 10 |
Series C Preferred Stock [Member] | |
Subsidiary, Sale of Stock [Line Items] | |
Preferred stock liquidation preference | 1 |
Dividends payable amount per share | 0.10 |
Preferred stock, redemption price per share | $ 0.10 |
Convertible preferred stock, shares issued upon conversion | shares | 25 |
Preferred stock conversion premium price per share | $ 4.20 |
Preferred stock, conversion basis | Each share of Series C Preferred Stock is convertible into 25 shares of the Companys common stock |
Series D Preferred Stock [Member] | |
Subsidiary, Sale of Stock [Line Items] | |
Preferred stock liquidation preference | $ 1,500 |
Convertible preferred stock, shares issued upon conversion | shares | 5,000 |
Preferred stock, conversion basis | Each share of Series D Preferred Stock is convertible into 5,000 shares of the Company's common stock. |
Basic and Diluted Loss Per Sh27
Basic and Diluted Loss Per Share - Schedule of Common Shares Not Included in Calculation of Diluted Net Loss Per Share (Details) - shares | 9 Months Ended | |
Apr. 30, 2018 | Apr. 30, 2017 | |
Class of Stock [Line Items] | ||
Total | 15,461,200 | 15,461,200 |
Series C Preferred Stock [Member] | ||
Class of Stock [Line Items] | ||
Total | 1,551,200 | 1,551,200 |
Series D Preferred Stock [Member] | ||
Class of Stock [Line Items] | ||
Total | 13,910,000 | 13,910,000 |
Stock Options [Member] | ||
Class of Stock [Line Items] | ||
Total |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | Jan. 01, 2008 | Feb. 28, 2016 | Feb. 01, 2009 | Apr. 30, 2018 | Apr. 30, 2017 | Apr. 30, 2018 | Apr. 30, 2017 | Jul. 31, 2017 |
Related Party Transaction [Line Items] | ||||||||
Rent expenses | $ 0 | |||||||
Operating leases, rent expense | $ 33,000 | $ 33,000 | ||||||
Selling, general and administrative costs and expenses | $ 55,000 | $ 55,000 | 177,000 | 176,000 | ||||
Credit Facility [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Interest expense debt | 27,000 | 27,000 | 83,000 | 83,000 | ||||
Accrued interest | 1,164,000 | 1,164,000 | $ 1,003,000 | |||||
Promissory Notes [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Interest expense debt | 29,000 | 20,000 | 78,000 | 60,000 | ||||
Miami Lease [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Lease term | 5 years | |||||||
Beneficial ownership percentage | 10.00% | |||||||
Lease expire date | Dec. 31, 2012 | |||||||
Payments for Rent | $ 1,250 | |||||||
Operating leases, rent expense | 0 | 0 | ||||||
Hialeah Lease [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Lease term | 3 years | |||||||
Lease expire date | Jan. 31, 2012 | |||||||
Payments for Rent | $ 5,000 | |||||||
Operating leases, rent expense | 0 | 0 | ||||||
Two Lease [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Accounts payable, related parties | 191,000 | 191,000 | 191,000 | |||||
TransEnterix, Inc [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Accounts payable, related parties | 1,200 | 1,200 | $ 800 | |||||
TransEnterix, Inc [Member] | ||||||||
Related Party Transaction [Line Items] | ||||||||
Selling, general and administrative costs and expenses | $ 9,000 | $ 9,000 | $ 27,000 | $ 27,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) $ in Thousands | Sep. 04, 2007USD ($) | Apr. 30, 2018USD ($)ft² | Apr. 30, 2017USD ($) | Apr. 30, 2018USD ($)ft² | Apr. 30, 2017USD ($) |
Area of land | ft² | 4,000 | 4,000 | |||
Lease expiration date description | The lease commenced September 15, 2014 and originally expired on September 30, 2015 and we have exercised our option to renew the lease and extended the expiration to September 15, 2017. | ||||
Operating leases, rent expense | $ 33 | $ 33 | |||
Manufacturing costs | $ 471 | ||||
Cost of utilities | 150 | $ 99 | |||
Payments on approval of product prototype concepts and designs | $ 150 | ||||
Purchase obligation | 13,900 | 13,900 | |||
Exer Rest Units [Member] | |||||
Purchase obligation, due in next twelve months | 2,600 | 2,600 | |||
Purchase obligation, due in second year | 4,100 | 4,100 | |||
Purchase obligation, due in third year | 8,800 | 8,800 | |||
Sing Lin [Member] | |||||
Payments to suppliers | 1,700 | ||||
Payables to customers | $ 41 | 41 | |||
Contract Manufacturer [Member] | |||||
Payments to suppliers | $ 90 |