Document_And_Entity_Informatio
Document And Entity Information (USD $) | 12 Months Ended | ||
Jul. 31, 2013 | Oct. 24, 2013 | Jan. 31, 2013 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | FALSE | ||
Document Period End Date | 31-Jul-13 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2013 | ||
Entity Registrant Name | PURE BIOSCIENCE, INC. | ||
Entity Central Index Key | 1006028 | ||
Current Fiscal Year End Date | -24 | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Common Stock, Shares Outstanding | 23,389,896 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Public Float | $8,793,004 | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Trading Symbol | pure |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Jul. 31, 2013 | Jul. 31, 2012 |
Assets | ||
Cash and cash equivalents | $32,000 | $877,000 |
Accounts receivable, net | 18,000 | 373,000 |
Inventories, net | 365,000 | 654,000 |
Prepaid expenses | 71,000 | 347,000 |
Total current assets | 486,000 | 2,251,000 |
Property, plant and equipment, net | 146,000 | 257,000 |
Patents, net | 1,430,000 | 1,950,000 |
Total assets | 2,062,000 | 4,458,000 |
Liabilities and stockholders' equity (deficit) | ||
Accounts payable | 1,134,000 | 1,946,000 |
Loan payable, net | 0 | 962,000 |
Deferred revenue | 0 | 66,000 |
Note payable, current | 368,000 | 0 |
Accrued liabilities | 600,000 | 344,000 |
Derivative liability | 51,000 | 319,000 |
Total current liabilities | 2,153,000 | 3,637,000 |
Note payable, less current portion | 887,000 | 0 |
Deferred rent | 13,000 | 3,000 |
Total liabilities | 3,053,000 | 3,640,000 |
Commitments and contingencies (Note 8) | ||
Stockholders' equity (deficit) | ||
Preferred stock, $0.01 par value: 5,000,000 shares authorized, no shares issued | 0 | 0 |
Common stock, $0.01 par value: 100,000,000 shares authorized 12,569,503 issued and outstanding at July 31, 2013, and 6,644,555 issued and outstanding at July 31, 2012. | 126,000 | 67,000 |
Additional paid-in capital | 69,054,000 | 63,251,000 |
Accumulated deficit | -70,171,000 | -62,500,000 |
Total stockholders' equity (deficit) | -991,000 | 818,000 |
Total liabilities and stockholders' equity (deficit) | $2,062,000 | $4,458,000 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Jul. 31, 2013 | Aug. 15, 2012 | Aug. 14, 2012 | Jul. 31, 2012 |
Consolidated Balance Sheets [Abstract] | ||||
Preferred stock, par value | $0.01 | $0.01 | ||
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | ||
Preferred stock, shares issued | 0 | 0 | ||
Common stock, par value | $0.01 | $0.01 | ||
Common stock, shares authorized | 100,000,000 | 100,000,000 | ||
Common stock, shares issued | 12,569,503 | 6,644,555 | ||
Common stock, shares outstanding | 12,569,503 | 7,200,000 | 57,800,000 | 6,644,555 |
Consolidated_Statements_Of_Ope
Consolidated Statements Of Operations (USD $) | 12 Months Ended | |
Jul. 31, 2013 | Jul. 31, 2012 | |
Consolidated Statements Of Operations [Abstract] | ||
Net product sales | $820,000 | $812,000 |
Operating costs and expenses | ||
Cost of goods sold | 565,000 | 264,000 |
Selling, general and administrative | 5,718,000 | 7,439,000 |
Research and development | 1,325,000 | 1,863,000 |
Impairment of patents | 551,000 | 0 |
Total operating costs and expenses | 8,159,000 | 9,566,000 |
Loss from operations | -7,339,000 | -8,754,000 |
Other income (expense) | ||
Change in derivative liability | 268,000 | 11,000 |
Interest expense | -593,000 | -144,000 |
Other (expense) income, net | -7,000 | -3,000 |
Total other (expense) income | -332,000 | -136,000 |
Net loss | ($7,671,000) | ($8,890,000) |
Basic and diluted net loss per share | ($0.71) | ($1.58) |
Shares used in computing basic and diluted net loss per share | 10,838,140 | 5,623,453 |
Consolidated_Statements_Of_Sto
Consolidated Statements Of Stockholders Equity (USD $) | Common Stock [Member] | Paid-in Capital [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Total |
Stockholders' Equity, Beginning Balance at Jul. 31, 2011 | $50,000 | $57,767,000 | ($53,610,000) | $4,207,000 |
Beginning balance, Shares at Jul. 31, 2011 | 5,004,275 | |||
Issuance of common stock in a registered offering, net, shares | 167,136 | |||
Issuance of common stock in a registered offering, net | 2,000 | 947,000 | 0 | 949,000 |
Issuance Of Common Stock In A Private Placement, Net, Shares | 575,125 | |||
Issuance Of Common Stock In A Private Placement, Net, Value | 6,000 | 1,144,000 | 0 | 1,150,000 |
Net loss | 0 | 0 | -8,890,000 | -8,890,000 |
Issuance of common stock upon exercise of stock options, shares | 0 | |||
Share-based compensation expense - restricted stock | 0 | 41,000 | 0 | 41,000 |
Share-based compensation expense - restricted stock, shares | 6,852 | |||
Issuance of common stock upon exercise of stock options | 0 | 1,036,000 | 0 | 1,036,000 |
Issuance Of Common Stock Under Purchase Plan, Value | 7,000 | 1,712,000 | 0 | 1,719,000 |
Issuance Of Common Stock Under Purchase Plan, Shares | 718,463 | |||
Issuance Of Common Stock Under Bridge Loan, Value | 1,000 | 167,000 | 0 | 168,000 |
Issuance Of Common Stock Under Bridge Loan, Shares | 55,503 | |||
Issuance of common stock for consulting agreements, shares | 38,750 | |||
Issuance of common stock for consulting agreements | 0 | 142,000 | 0 | 142,000 |
Commitment shares issued under purchase plan | 1,000 | 295,000 | 0 | 296,000 |
Commitment shares issued under purchase plan, shares | 78,451 | |||
Stockholders' Equity, Ending Balance at Jul. 31, 2012 | 67,000 | 63,251,000 | -62,500,000 | 818,000 |
Ending balance, Shares at Jul. 31, 2012 | 6,644,555 | |||
Issuance of common stock in a registered offering, net, shares | 4,341,615 | |||
Issuance of common stock in a registered offering, net | 43,000 | 4,184,000 | 0 | 4,227,000 |
Issuance Of Common Stock In A Private Placement, Net, Shares | 1,183,333 | |||
Issuance Of Common Stock In A Private Placement, Net, Value | 12,000 | 427,000 | 0 | 439,000 |
Net loss | 0 | 0 | -7,671,000 | -7,671,000 |
Share-based compensation expense - stock options | 0 | 701,000 | 0 | 701,000 |
Issuance of common stock upon exercise of stock options, shares | 0 | |||
Share-based compensation expense - restricted stock | 0 | 19,000 | 0 | 19,000 |
Share-based compensation expense - restricted stock, shares | 0 | |||
Issuance of common stock for consulting agreements, shares | 400,000 | |||
Issuance of common stock for consulting agreements | 4,000 | 227,000 | 0 | 231,000 |
Warrants issued for note payable | 0 | 245,000 | 0 | 245,000 |
Stockholders' Equity, Ending Balance at Jul. 31, 2013 | $126,000 | $69,054,000 | ($70,171,000) | ($991,000) |
Ending balance, Shares at Jul. 31, 2013 | 12,569,503 |
Consolidated_Statements_Of_Cas
Consolidated Statements Of Cash Flows (USD $) | 12 Months Ended | |
Jul. 31, 2013 | Jul. 31, 2012 | |
Consolidated Statements Of Cash Flows [Abstract] | ||
Net loss | ($7,671,000) | ($8,890,000) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Share-based compensation | 720,000 | 1,077,000 |
Inventory reserve | 347,000 | 0 |
Impairment of patents | 551,000 | 0 |
Troubled debt restructuring loss | 25,000 | 0 |
Amortization of stock issued for services | 255,000 | 118,000 |
Depreciation and amortization | 311,000 | 385,000 |
Amortization of stock issued under purchase agreement | 0 | 296,000 |
Amortization of deferred financing costs | 215,000 | 53,000 |
Change in fair value of derivative liability | -268,000 | -11,000 |
Amortization of debt discount | 371,000 | 91,000 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 82,000 | -323,000 |
Inventories | 149,000 | 207,000 |
Prepaid expenses | 37,000 | -9,000 |
Accounts payable and accrued liabilities | 962,000 | 1,355,000 |
Deferred revenue | 0 | 66,000 |
Deferred rent | 10,000 | -3,000 |
Net cash used in operating activities | -3,904,000 | -5,588,000 |
Investing activities | ||
Investment in patents | -219,000 | -239,000 |
Purchases of property, plant and equipment | -12,000 | -10,000 |
Net cash used in investing activities | -231,000 | -249,000 |
Financing activities | ||
Net proceeds from the sale of common stock | 4,666,000 | 3,818,000 |
Net proceeds from bridge loan | 0 | 1,200,000 |
Deferred financing costs | 0 | -98,000 |
Payment of Bridge Loan | -1,333,000 | 0 |
Payment on note payable | -43,000 | 0 |
Net cash provided by financing activities | 3,290,000 | 4,920,000 |
Net decrease in cash and cash equivalents | -845,000 | -917,000 |
Cash and cash equivalents at beginning of period | 877,000 | 1,794,000 |
Cash and cash equivalents at end of period | 32,000 | 877,000 |
Supplemental disclosure of cash flow information | ||
Cash paid for interest | 0 | 0 |
Cash paid for taxes | 1,600 | 5,000 |
Supplemental disclosure of non-cash investing and financing activities | ||
Common stock issued for prepaid services | 231,000 | 142,000 |
Common stock issued under stock purchase agreement | 0 | 296,000 |
Common stock issued under Bridge Loan | 0 | 168,000 |
Fair value of derivative liabilities | $0 | $330,000 |
Consolidated_Statements_Of_Cas1
Consolidated Statements Of Cash Flows (Parenthetical) (USD $) | 12 Months Ended | |
Jul. 31, 2013 | Jul. 31, 2012 | |
Accounts Payable Waived | $1,519,000 | |
Accrued interest | 174,000 | |
Troubled debt restructuring loss | 25,000 | 0 |
Morrison And Foerster Llp [Member] | ||
Fair value of warrants | 245,000 | |
Notes Payable Other Payables [Member] | ||
Debt Instrument, Face Amount | $1,125,000 |
Organization_and_Business
Organization and Business | 12 Months Ended |
Jul. 31, 2013 | |
Organization and Business [Abstract] | |
Organization and Business | 1. Organization and Business |
All references to “PURE,” “we”, “our,” and “us” refer to Pure Bioscience, Inc. and our wholly owned subsidiary. | |
Pure Bioscience, Inc. is focused on developing and commercializing our proprietary antimicrobial products that provide solutions to the health and environmental challenges of pathogen and hygienic control. Our technology platform is based on stabilized ionic silver, and our initial products contain silver dihydrogen citrate, or SDC. SDC is a broad-spectrum, non-toxic antimicrobial agent that is manufactured as a liquid delivered in various concentrations. We currently manufacture and distribute SDC-based disinfecting and sanitizing products, which are registered by the Environmental Protection Agency, or EPA. We also manufacture and sell SDC-based formulations to manufacturers for use as a raw material ingredient in the production of personal care products. We believe our technology platform has potential application in a number of industries. We intend to focus our current resources in providing food safety solutions to the food industry. | |
We were incorporated in the state of California in August 1992 as Innovative Medical Services. In September 2003, we changed our name to Pure Bioscience. In March 2011, we reincorporated in the state of Delaware. We operate in one business segment. | |
Effective on August 14, 2012 and commencing with the opening of trading on August 15, 2012, we effected a reverse stock split of our issued and outstanding common stock, $0.01 par value per share, at a ratio of one-for-eight, with each eight (8) issued and outstanding shares of our common stock automatically combined and converted into one (1) issued and outstanding share of our common stock. The reverse stock split was approved by stockholders holding a majority of our outstanding voting power at our annual meeting of stockholders held on July 31, 2012. All information in our consolidated financial statements and the notes thereto regarding share amounts of our common stock and prices per share of our common stock has been adjusted to reflect the application of the reverse stock split on a retroactive basis. | |
Liquidity & Going Concern Uncertainty | |
These consolidated financial statements have been prepared and presented on a basis assuming we will continue as a going concern. The factors below raise substantial doubt about our ability to continue as a going concern. The financial statements do not include any adjustments that might be necessary from the outcome of this uncertainty. | |
Since our inception, we have financed our operations primarily through public and private offerings of securities, debt financing, and revenue from product sales and license agreements. We have a history of recurring losses, and as of July 31, 2013 we have incurred a cumulative net loss of $70,171,000. | |
We do not have, and may never have, significant cash inflows from product sales or from other sources of revenue to fund our operations. As of July 31, 2013, we had $32,000 in cash and cash equivalents, and $2,153,000 of current liabilities, including $1,134,000 in accounts payable. We do not currently believe that our existing cash resources are sufficient to meet our anticipated needs over the next twelve months. The uncertainties surrounding our ability to continue to fund our operations raise substantial doubt about our ability to continue as a going concern. | |
Until we can generate significant cash from operations, we expect to continue to fund our operations with the proceeds of offerings of our equity and debt securities. However, we cannot assure you that additional financing will be available when needed or that, if available, financing will be obtained on terms favorable to us or to our stockholders. If we raise additional funds from the issuance of equity securities, substantial dilution to our existing stockholders would likely result. If we raise additional funds by incurring debt financing, the terms of the debt may involve significant cash payment obligations as well as covenants and specific financial ratios that may restrict our ability to operate our business. Further, any contracts or license arrangements we enter into to raise funds may require us to relinquish our rights to our products or technology, and we cannot assure you that we will be able to enter into any such contracts or license arrangements on acceptable terms, or at all. Having insufficient funds may require us to delay or scale back our marketing, distribution and other commercialization activities or cease our operations altogether. | |
We do not have any unused credit facilities or other sources of capital available to us at this time. We intend to secure additional working capital through sales of additional debt or equity securities. On February 1, 2013, we filed a registration statement on Form S-1 with the SEC. Subject to the SEC’s declaration of effectiveness of such registration statement, and subject to capital market conditions, we intend to raise additional capital through the registration statement. Our intended financing initiatives are subject to risk, and we cannot provide any assurance about the availability or terms of these or any future financings. | |
If we are unable to obtain sufficient capital, it will have a material adverse effect on our business and operations. It could cause us to fail to execute our business plan, fail to take advantage of future opportunities, or fail to respond to competitive pressures or customer requirements. It also may require us to significantly modify our business model and operations to reduce spending to a sustainable level, which may include delaying, scaling back or eliminating some or all of our ongoing and planned investments in corporate infrastructure, research and development projects, regulatory submissions, business development initiatives, and sales and marketing activities, among other investments. If adequate funds are not available when needed, we may be required to reduce or cease operations altogether. | |
The financial statements do not include any adjustment relating to recoverability or classification of recorded assets and classification of recorded liabilities. | |
NASDAQ Delisting | |
Our common stock was delisted from The NASDAQ Capital Market and on May 17, 2013 our common stock began trading on the OTCQB Marketplace under the ticker symbol “PURE”. We continue to file periodic reports with the Securities and Exchange Commission in accordance with the requirements of Section 12(g) of the Securities Exchange Act of 1934, as amended. | |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended |
Jul. 31, 2013 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies |
Basis of Presentation | |
The accompanying consolidated financial statements include the consolidated accounts of Pure Bioscience, Inc. and its wholly owned subsidiary, ETIH2O Corporation, a Nevada corporation. ETIH2O Corporation has no business and no material assets or liabilities and there have been no significant transactions related to ETIH2O during the periods presented in the consolidated financial statements. All inter-company balances and transactions have been eliminated. | |
Use of Estimates | |
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America, or GAAP, requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements, and the disclosures made in the accompanying notes to the consolidated financial statements. Actual results could differ materially from those estimates. | |
Reclassification | |
Certain reclassifications have been made to prior period amounts to conform to current period presentation. These reclassifications did not have an impact on our results of operations or financial condition as of and for the years ended July 31, 2013 and 2012. | |
Cash and Cash Equivalents | |
Cash and cash equivalents consist of cash and highly liquid investments with original maturities from purchase date of three months or less. | |
Fair Value of Financial Instruments | |
Certain of our financial instruments—including cash and cash equivalents, accounts receivable, inventories, prepaid expenses, accounts payable, accrued liabilities, note payable and deferred revenue are carried at cost, which is considered to be representative of their respective fair values because of the short-term nature of these instruments. Our loan payable and derivative liabilities are carried at estimated fair value (See Note 6 and 7). | |
Derivative Financial Instruments | |
We do not use derivative instruments to hedge exposures to cash flow or market or foreign currency risks. | |
We review the terms of the common stock, warrants and convertible debt we issue to determine whether there are derivative instruments, including embedded conversion options that are required to be bifurcated and accounted for separately as derivative financial instruments. In circumstances where the host instrument contains more than one embedded derivative instrument, including a conversion option, that is required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument. | |
Derivatives are initially recorded at fair value and are then revalued at each reporting date with changes in the fair value reported as non-operating income or expense. When the equity or convertible debt instruments contain embedded derivative instruments that are to be bifurcated and accounted for as liabilities, the total proceeds received are first allocated to the fair value of all the bifurcated derivative instruments. The remaining proceeds, if any, are then allocated to the host instruments themselves, usually resulting in those instruments being recorded at a discount from their face value. | |
The discount from the face value of any convertible debt, together with the stated interest on the instrument, is amortized over the life of the instrument through periodic charges to interest expense, using the effective interest method. | |
Accounts Receivable | |
Trade accounts receivable are recorded net of allowances for doubtful accounts. Estimates of allowances for doubtful accounts are determined based on historical payment patterns and individual customer circumstances. The allowance for doubtful accounts was zero at July 31, 2013 and 2012. | |
Included in accounts receivable at July 31, 2012 is $273,000 billed to one customer for product shipped, where payment on agreed terms was not reasonably assured at the time of shipment. We recognized this amount, less our costs associated with the shipment, as deferred revenue on the consolidated balance sheet at July 31, 2012. During the year ended July 31, 2013 the customer authorized us to retake possession of this inventory, which was held by a third party warehouse on behalf of the customer, and as such, we reduced our accounts receivable by $273,000, increased inventory by $207,000, and reduced deferred revenue by $66,000. | |
Inventories | |
Inventories are stated at the lower of cost or net realizable value, and net of a valuation allowance for potential excess or obsolete material. Cost is determined using the average cost method. | |
Property, Plant and Equipment | |
Property, plant and equipment is stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. The estimated useful lives of our property, plant, and equipment range from three to ten years. Capitalized costs associated with leasehold improvements are depreciated over the lesser of the useful life of the asset or the remaining life of the lease. Depreciation is generally included in selling, general and administrative expense. Depreciation related to manufacturing is systematically allocated to inventory produced, and expensed through cost of goods sold at the time inventory is sold. | |
Patents | |
We have filed a number of patent applications with the United States Patent and Trademark Office and in foreign countries. Certain legal and related costs incurred in connection with pending patent applications have been capitalized. Costs related to successful patent applications are amortized over the lesser of the remaining useful life of the related technology or the remaining patent life, commencing on the date the patent is issued. Capitalized costs related to patent applications are expensed in the period in which a determination is made not to pursue such applications. | |
Impairment of Long-Lived Assets | |
In accordance with GAAP, if indicators of impairment exist, we assess the recoverability of the affected long-lived assets by determining whether the carrying value of such assets can be recovered through undiscounted future operating cash flows. If impairment is indicated, we measure the amount of such impairment by comparing the carrying value of the asset to the fair value of the asset and we record the impairment as a reduction in the carrying value of the related asset and a charge to operating results. Estimating the undiscounted future cash flows associated with long-lived assets requires judgment, and assumptions could differ materially from actual results. During the year ended July 31, 2013 we incurred $551,000 of expense relating to the impairment of long-lived assets (See Note 3). No impairment expense was recorded during the year ended July 31, 2012. | |
Revenue Recognition | |
We sell our products to distributors and end users. We record revenue when we sell products to our customers, rather than when our customers resell products to third parties. When we sell products to our customers, we reduce the balance of our inventory with a corresponding charge to cost of goods sold. We do not currently have any consignment sales. | |
Terms of our product sales are generally FOB shipping point. Product sales are recognized when delivery of the products has occurred (which is generally at the time of shipment), title has passed to the customer, the selling price is fixed or determinable, collectability is reasonably assured and we have no further obligations. Any amounts received prior to satisfying these revenue recognition criteria are recorded as deferred revenue. We record product sales net of discounts at the time of sale and report product sales net of such discounts. | |
We also license our products and technology to development and commercialization partners. Upfront product and technology license fees under multiple-element arrangements are deferred and recognized over the period of such services or performance, if such arrangements require on-going services or performance. Non-refundable amounts received for substantive milestones are recognized upon achievement of the milestone. Any amounts received prior to satisfying these revenue recognition criteria are recorded as deferred revenue. | |
Shipping and Handling Costs | |
Shipping and handling costs incurred by us for product shipments are included in cost of goods sold and were minimal for the years ended July 31, 2013 and 2012. | |
Research and Development Costs | |
Research and development costs are expensed as incurred. | |
Share-Based Compensation | |
We grant equity-based awards under share-based compensation plans. We estimate the fair value of share-based payment awards using the Black-Scholes option valuation model. This fair value is then amortized over the requisite service periods of the awards. The Black-Scholes option valuation model requires the input of subjective assumptions, including price volatility of the underlying stock, risk-free interest rate, dividend yield, and expected life of the option. Share-based compensation expense is based on awards ultimately expected to vest, and therefore is reduced by expected forfeitures. | |
Other Income (Expense) | |
We record interest income, interest expense, change in derivative liabilities, as well as other non-operating transactions, as other income (expense) on our consolidated statements of operations. | |
Comprehensive Loss | |
Comprehensive loss is defined as the change in equity during a period from transactions and other events and circumstances from non-owner sources, including unrealized gains and losses on marketable securities and foreign currency translation adjustments. For the years ended July 31, 2013 and 2012, our comprehensive loss consisted only of net loss. | |
Income Taxes | |
We recognize deferred tax assets and liabilities for temporary differences between the tax basis of assets and liabilities and the amounts at which they are carried in the financial statements based upon the enacted tax rates in effect for the year in which the differences are expected to reverse. A valuation allowance is established to reduce deferred tax assets to the amount expected to be realized. | |
Net Loss Per Share | |
Basic net loss per common share is computed as net loss divided by the weighted average number of common shares outstanding for the period. Our diluted net loss per common share is the same as our basic net loss per common share because we incurred a net loss during each period presented, and the potentially dilutive securities from the assumed exercise of all outstanding stock options, warrants and convertible notes would have an antidilutive effect. As of July 31, 2013 and 2012, the number of shares issuable upon the exercise of stock options, warrants, and convertible notes and shares held in escrow was 1,877,876 and 1,757,283, respectively. | |
Recent Accounting Pronouncements | |
No recent accounting pronouncements or other authoritative guidance have been issued that are considered likely to have a material impact on our consolidated financial statements. | |
Balance_Sheet_Details
Balance Sheet Details | 12 Months Ended | |||||
Jul. 31, 2013 | ||||||
Balance Sheet Details [Abstract] | ||||||
Balance Sheet Details | 3. Balance Sheet Details | |||||
Inventories consist of the following: | ||||||
July 31, | ||||||
2013 | 2012 | |||||
Raw materials | $ | 70,000 | $ | 476,000 | ||
Finished goods | 295,000 | 178,000 | ||||
$ | 365,000 | $ | 654,000 | |||
Given our current focus on near term commercialization of the SDC-based products used to provide solutions for the food safety industry, we believe there is no net realizable value for numerous current product configurations. Therefore, as of the fiscal year ended July 31, 2013, we established an inventory reserve for $347,000. The majority of the reserve relates to components such as, plastic bottles, spray triggers, miscellaneous plastics, and numerous corrugated cardboard configurations. | ||||||
In addition, during the year ended July 31, 2013, we received $58,000 from the sale of silver held in inventory. At the time of sale, the silver had a book value of $40,000. The corresponding $18,000 gain is reflected in the other income (expense) section of the 2013 consolidated statement of operations. | ||||||
Property, plant, and equipment consist of the following: | ||||||
July 31, | ||||||
2013 | 2012 | |||||
Computers and equipment | $ | 921,000 | $ | 909,000 | ||
Furniture and fixtures | 21,000 | 21,000 | ||||
Leasehold improvements | 622,000 | 622,000 | ||||
1,564,000 | 1,552,000 | |||||
Less accumulated depreciation | -1,418,000 | -1,295,000 | ||||
$ | 146,000 | $ | 257,000 | |||
Depreciation expense was $123,000 and $179,000 for the years ended July 31, 2013 and 2012, respectively. | ||||||
Patents consist of the following: | ||||||
July 31, | ||||||
2013 | 2012 | |||||
Patents | $ | 3,389,000 | $ | 3,773,000 | ||
Less accumulated amortization | -1,959,000 | -1,823,000 | ||||
$ | 1,430,000 | $ | 1,950,000 | |||
Due to the significant changes in our strategic business objectives and utilization of our assets, we have determined cost associated with the pending patent applications in numerous foreign geographic locations have been impaired. As a result, during the year ended July 31, 2013, we reduced the carrying value of our patents and recorded a $551,000 patent impairment. | ||||||
Patent amortization expense was $188,000 and $206,000 for the years ended July 31, 2013 and 2012, respectively. At July 31, 2013, the weighted average remaining amortization period for all patents was approximately ten years. The annual patent amortization expense for the next five years is estimated to be approximately $152,000 per year. | ||||||
Promissory_Note
Promissory Note | 12 Months Ended | ||
Jul. 31, 2013 | |||
Debt Disclosure [Abstract] | |||
Promissory Note | 4. Promissory Note | ||
On January 25, 2013, we entered into a Letter Agreement (the “Agreement”) with Morrison & Foerster LLP (“Morrison”). Under the terms of the Agreement, we issued a Promissory Note (the “Note”) in favor of Morrison in the principal amount of $1,125,000. In consideration for the Note, Morrison agreed to waive $1,519,000 of amounts due and payable to Morrison for legal services rendered. The Note bears interest at the rate of 7.5% per annum, but the then outstanding balance will accrue interest at the rate of 10% per annum upon the occurrence of an event of default (as defined in the Note). Beginning March 31, 2013, and on or before the last business day of each calendar month thereafter, we are required to pay all accrued but unpaid interest on the then unpaid amount of outstanding principal. Beginning on February 28, 2014, we are required to pay equal monthly principal installments of approximately $47,000, plus interest. We may prepay the outstanding balance under the Note in full or in part at any time, which would result in a discount of the then outstanding balance as more fully described in the Note. The Note will mature on February 28, 2016, unless accelerated pursuant to an event of default or upon the consummation of a change of control (as defined in the Note). As a result of the Agreement, we have reclassified the amount due and payable to Morrison from a current liability to long-term debt, except any payments due under the Letter Agreement within twelve months from the date of the balance sheet which will continue to be classified as a current liability. | |||
In consideration for Morrison’s acceptance of the Note in lieu of payment for its legal services, we issued Morrison a warrant to purchase 375,000 shares of our common stock at an exercise price of $0.83 per share. The warrant was exercisable immediately and expires on January 24, 2018. The warrant may be exercised by Morrison with a cash payment or, in lieu thereof, at its election, through a net exercise, as set forth in the warrant agreement. Neither the warrant nor the shares to be issued upon exercise thereof are registered for sale or resale under the Securities Act of 1933, as amended (the “Securities Act”), and have been or will be issued in reliance on an exemption from registration under the Securities Act pursuant to Section 4(a)(2) thereof based on the offering of such securities to one investor and the lack of any general solicitation or advertising in connection with such issuance. We determined that the warrants issued in connection with the Note were equity instruments and did not represent derivative instruments. The fair value of the warrants issued to Morrison was $245,000, based on the Black-Scholes valuation method assuming no dividend yield, volatility of 134%, a risk-free interest rate of 0.35%, and an expected life of 5 years. | |||
This transaction was accounted for as a troubled debt restructuring. During the year ended July 31, 2013, we recorded $25,000 of other expense resulting from the excess of the total cash outflows under the troubled debt restructuring, plus the expense related to the fair value of the warrant issued in conjunction with the debt, over the carrying amount of the Morrison payables prior to the restructuring. In accordance with the applicable guidance, interest to be paid under the Note of approximately $174,000 was added to the carrying amount of the Note, and future payments of interest will be reflected as a reduction to the carrying amount of the debt. | |||
During the year ended July 31, 2013, we paid $43,000 under the terms of the Note. | |||
As of July 31, 2013, future maturities of the promissory note are as follows: | |||
Fiscal year ending July 31, | |||
2014 | $ | 368,000 | |
2015 | $ | 599,000 | |
2016 | $ | 288,000 | |
Total | $ | 1,255,000 | |
Secured_Convertible_Note
Secured Convertible Note | 12 Months Ended | ||||||
Jul. 31, 2013 | |||||||
Debt Disclosure [Abstract] | |||||||
Secured Convertible Note | |||||||
5. Secured Convertible Note | |||||||
Pursuant to a securities purchase agreement entered into on June 26, 2012, on July 10, 2012 we received an aggregate of $1,200,000 in cash consideration from nine lenders in exchange for our issuance to such lenders of secured convertible promissory notes, or the Notes, in an aggregate principal amount of $1,333,000. We refer to such transaction as the “Bridge Loan”. Pursuant to the terms of the Notes and the other agreements (as amended) entered into in connection with the Bridge Loan, or the Loan Agreements, all amounts owed thereunder became due and payable on the earlier of (i) December 26, 2012 or (ii) our closing of any financing transaction or series of financing transactions that in the aggregate raise $1,200,000 or more in proceeds for the Company. On September 17, 2012 (See Note 9) we closed an underwritten public offering, and accordingly all such amounts were repaid during the year ended July 31, 2013. | |||||||
The terms of the Notes provided for an interest rate of 0% during their term, a late fee at a rate of 10% if we failed to repay all amounts owed thereunder when due or if a prior event of default occurred, and an interest rate of 18% per annum commencing five days after the occurrence of an event of default that results in the acceleration of amounts owed thereunder. In accordance with authoritative guidance, we imputed interest on the Bridge Loan at the rate of 10% per annum. As a result, the fair value at issuance was $1,270,000, net of imputed interest of $63,000. | |||||||
While outstanding, the Notes were secured by a lien on all of our assets pursuant to a security agreement entered in connection with the Bridge Loan, and 575,000 shares of our common stock (later reduced to 500,000 shares pursuant to an amendment effective September 6, 2012), were issued in the name of an escrow agent as additional collateral for the timely repayment of the Notes which were cancelled pursuant to our full repayment of the Bridge Loan. Additionally, the Notes could have been converted into shares of our common stock if the entire balance owed thereunder was not repaid by December 26, 2012 or an earlier event of default occurred. The conversion price of the Notes as of July 31, 2012 was $3.28 per share, subject to adjustment as set forth in the Notes, including adjustment of the conversion price to the sale price to the public of shares of our common stock issued in a registered public offering, if lower, closed within the 60-day period commencing on June 26, 2012, if any. We analyzed the nature of the conversion terms of the Notes and determined that the conversion feature requires derivative liability classification in accordance with authoritative guidance (See Note 6). At issuance, the fair value of the conversion feature totaled $33,000. The fair value was recorded as a debt discount and was amortized over the term of the Bridge Loan to interest expense. Due to the full repayment of the Bridge Loan, the lien on our assets was terminated on October 11, 2012 and the escrow shares have been cancelled. | |||||||
As further consideration to the lenders for the Bridge Loan in addition to our issuance of the Notes, we issued to each such lender: (i) an aggregate amount of 54,878 shares of our common stock, which was valued at $166,000 and recorded as a deferred asset and was amortized to interest expense over the term of the Bridge Loan, and (ii) warrants to acquire up to an aggregate amount of 128,046 shares of our common stock, which warrants have a four-year term, become exercisable six months after the date of their issuance, and had an exercise price upon issuance of $3.28 per share, which exercise price is subject to anti-dilution provisions that require derivative liability classification (See Note 6). Additionally, we issued to the placement agent warrants to acquire up to an aggregate amount of 4,374 shares of our common stock, which warrants have the same terms as the warrants issued to the lenders in the Bridge Loan transaction. At issuance, the fair value of the 132,420 warrants issued in connection with the Bridge Loan transaction totaled $297,000. The warrant fair value was recorded as a debt discount and was amortized over the term of the Bridge Loan to interest expense. | |||||||
Amortization of debt discounts related to the Bridge Loan, including imputed interest, the original issue discount, the conversion feature, and the warrants, was $91,000 for the year ended July 31, 2012. | |||||||
Total fees associated with the Bridge Loan were $267,000. Of that amount, $166,000 relates to the fair value of 54,878 shares of common stock issued to the lenders, and $2,000 relates to the fair value of 625 shares of common stock issued to the placement agent for the Bridge Loan. All fees were capitalized as a deferred asset included in prepaid expenses, and was amortized to interest expense over the term of the Bridge Loan. During the year ended July 31, 2012, $53,000 of deferred financing fees were amortized to interest expense. | |||||||
Due to the repayment of the Bridge Loan, debt discounts related to the Bridge Loan, including imputed interest, an original issue discount, the embedded conversion feature of the Notes, and the detachable warrants issued to the lenders in connection with the transaction, have been fully amortized, resulting in $371,000 of interest expense during the year ended July 31, 2013. Additionally, deferred financing fees associated with the Bridge Loan have been fully amortized, resulting in $215,000 of interest expense during the year ended July 31, 2013. | |||||||
The following table summarizes information relative to the secured convertible note outstanding at July 31, 2013 and 2012: | |||||||
July 31, | |||||||
2013 | 2012 | ||||||
Convertible notes | $ | 0 | $ | 1,282,000 | |||
Less unamortized discounts: | |||||||
Original issue discount | 0 | -56,000 | |||||
Detachable warrants discount | 0 | -238,000 | |||||
Conversion feature discount | 0 | -26,000 | |||||
Convertible notes, net of discounts | $ | 0 | $ | 962,000 | |||
Derivative_Liability
Derivative Liability | 12 Months Ended | |||||
Jul. 31, 2013 | ||||||
Derivative Liability [Abstract] | ||||||
Derivative Liability | 6. Derivative Liability | |||||
We accounted for the warrants issued in conjunction with the Bridge Loan, and the embedded conversion feature of the Note, in accordance with the accounting guidance for derivatives. The applicable accounting guidance sets forth a two-step model to be applied in determining whether a financial instrument is indexed to an entity’s own stock, which would qualify such financial instruments for a scope exception. This scope exception specifies that a contract that would otherwise meet the definition of a derivative financial instrument would not be considered as such if the contract is both (i) indexed to the entity’s own stock and (ii) classified in the stockholders’ equity section of the entity’s balance sheet. We determined the warrants and the conversion feature of the Notes are ineligible for equity classification due to anti-dilution provisions set forth therein. | ||||||
We recorded the fair value of the warrants issued in connection with the Bridge Loan as a warrant liability due to anti-dilution provisions requiring the strike price of the warrants to be adjusted if we subsequently issue common stock at a lower stock price. The fair value of the warrants at July 31, 2013 and July 31, 2012 was $51,000 and $286,000, respectively. The fair value decrease of $235,000 was recorded as a change in derivative liability in the consolidated statement of operations. | ||||||
Based on our assessment of the Notes, we determined that the conversion feature represented an embedded derivative liability. Under the terms of the Notes, if we sold shares of our common stock to the public in a registered public offering at a price per share less than $3.28 during the 60-day period commencing on June 26, 2012, then the conversion price of the Notes will be reduced to equal the price per share at which shares were sold to the public in such registered public offering. Accordingly, we bifurcated the embedded conversion feature and accounted for it separately as a derivative liability. The fair value of the conversion feature at July 31, 2012 was $33,000. Due to the repayment of the Bridge Loan in September 2012, the derivative liability related to the conversion feature was settled during the year ended July 31, 2013 and, as such, there is no related liability as of July 31, 2013. The change in fair value of $33,000 was recorded as a change in derivative liability in the consolidated statement of operations. | ||||||
The estimated fair value of the warrant and conversion feature was computed by a third party using a Monte Carlo option pricing model based the following assumptions: | ||||||
July 31, 2013 | July 31, 2012 | |||||
Volatility | 144.5 | % | 85.0 | % | ||
Risk-free interest rate | 0.97 | % | 0.53 | % | ||
Dividend yield | 0.0 | % | 0.0 | % | ||
Expected life | 3.4 years | 0.42 - 4.4 years | ||||
Fair_Value_of_Financial_Instru
Fair Value of Financial Instruments | 12 Months Ended | ||||||||
Jul. 31, 2013 | |||||||||
Fair Value of Financial Instruments [Abstract] | |||||||||
Fair Value Of Financial Instruments | 7. Fair Value of Financial Instruments | ||||||||
Fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the authoritative guidance establishes a three-tier value hierarchy, which prioritizes the inputs used in measuring fair value as follows: | |||||||||
· | Level 1 – Quoted prices in active markets for identical assets or liabilities. | ||||||||
· | Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. | ||||||||
· | Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. | ||||||||
In connection with the Bridge Loan, we issued warrants and convertible notes that are accounted for as derivative liabilities. (See Note 5 and 6). | |||||||||
We used Level 3 inputs for the valuation methodology of the derivative liabilities. The estimated fair values were computed by a third party using a Monte Carlo option pricing model based on various assumptions. Our derivative liabilities are adjusted to reflect estimated fair value at each period end, with any decrease or increase in the estimated fair value being recorded in other income or expense accordingly, as adjustments to the fair value of the derivative liabilities. | |||||||||
The following table provides a reconciliation of the beginning and ending balances of the derivative liabilities for the years ended July 31, 2013 and 2012: | |||||||||
Fair Value of Significant Unobservable Inputs (Level 3) | |||||||||
Conversion | |||||||||
Warrant | Feature | ||||||||
Liability | Liability | Total | |||||||
Balance at July 31, 2011 | $ | 0 | $ | 0 | $ | 0 | |||
Issuances | 297,000 | 33,000 | 330,000 | ||||||
Adjustments to estimated fair value | -11,000 | 0 | -11,000 | ||||||
Balance at July 31, 2012 | $ | 286,000 | $ | 33,000 | $ | 319,000 | |||
Issuances | 0 | 0 | 0 | ||||||
Settlement of conversion feature liability | 0 | -33,000 | -33,000 | ||||||
Adjustments to estimated fair value | -235,000 | 0 | -235,000 | ||||||
Balance at July 31, 2013 | $ | 51,000 | $ | 0 | $ | 51,000 | |||
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | ||
Jul. 31, 2013 | |||
Commitments and Contingencies Disclosure [Abstract] | |||
Commitments and Contingencies | 8. Commitments and Contingencies | ||
We lease our primary facility in El Cajon, California under a noncancelable operating lease that expires in December 2014. This facility includes our corporate offices, research and development laboratory, manufacturing operations, and warehouse. We also lease other office and warehouse space on a month to month basis. Rent expense for all of our facilities, including office and warehouse space and common area maintenance, was $286,000 and $275,000 for the years ended July 31, 2013 and 2012, respectively. Subsequent to July 31, 2013, all of our month to month leases have been cancelled. | |||
Future minimum annual lease payments for our primary facility as of July 31, 2013 are as follows: | |||
2014 | $ | 168,000 | |
2015 | 71,000 | ||
$ | 239,000 | ||
Stockholders_Equity
Stockholders' Equity | 12 Months Ended | |||||||
Jul. 31, 2013 | ||||||||
Equity [Abstract] | ||||||||
Stockholders' Equity | 9. Stockholders’ Equity | |||||||
Reverse Stock Split | ||||||||
On August 13, 2012, we filed a Certificate of Amendment to our Certificate of Incorporation with the Secretary of State of the State of Delaware to effect a reverse stock split of our issued and outstanding common stock, $0.01 par value per share, at a ratio of one-for-eight. The reverse stock split was approved by stockholders holding a majority of our outstanding voting power at our annual meeting of stockholders held on July 31, 2012. The reverse stock split became effective as of the close of trading on August 14, 2012 and commenced trading on a post-reverse split basis as of the opening of trading on August 15, 2012, with each eight (8) issued and outstanding shares of our common stock automatically combined and converted into one (1) issued and outstanding share of our common stock. The reverse stock split affected all issued and outstanding shares of our common stock, as well as common stock underlying stock options, warrants, and convertible notes outstanding immediately prior to the effectiveness of the reverse stock split, but did not affect the number of authorized shares of our common stock. As a result of the reverse stock split, the number of outstanding shares of our common stock was reduced from approximately 57.8 million immediately prior to the effectiveness of the reverse stock split to approximately 7.2 million immediately thereafter. | ||||||||
Preferred Stock | ||||||||
As of July 31, 2013, the Company’s Board of Directors is authorized to issue 5,000,000 shares of preferred stock with a par value of $0.01 per share, in one or more series. As of July 31, 2013 and 2012, there were no shares of preferred stock issued and outstanding. | ||||||||
Common Stock | ||||||||
As of July 31, 2013, 100,000,000 shares of common stock with a par value of $0.01 per share are authorized for issuance. | ||||||||
The following common stock transactions occurred during the year ended July 31, 2013: | ||||||||
On September 17, 2012, we closed an underwritten public offering of an aggregate of 4,341,615 shares of our common stock, including shares issued pursuant to the exercise of the underwriter’s overallotment option, at a price to the public of $1.10 per share and issued warrants to the underwriter to purchase an aggregate of 113,250 shares of our common stock. The offering was made pursuant to our registration statement on Form S-3 (Registration No. 333-182475), which became effective on July 31, 2012, and a preliminary and final prospectus supplement filed with the SEC on September 4, 2012 and September 13, 2012, respectively. The shares were sold pursuant to an underwriting agreement between us and Aegis Capital Corp., which is filed as an exhibit to our Current Report on Form 8-K filed with the SEC on September 13, 2012. The gross proceeds from the offering were approximately $4,776,000 and, after deducting $549,000 for transaction costs, including discounts, commissions, and other offering expenses, such as legal and accounting fees, the net proceeds to us from the offering were approximately $4,227,000. We used $1,333,000 of the net proceeds from the offering to pay the full amount of the indebtedness we incurred in connection with the Bridge Loan, described in further detail under Note 5 above. We determined that the warrants issued in connection with the underwritten public offering were equity instruments and did not represent derivative instruments. The estimated fair value of the warrants issued in the public offering was $99,000, based on the Black-Sholes valuation method using a four year term, volatility of 136.60%, an interest rate of 0.73% and a dividend yield of zero. | ||||||||
On March 1, 2013, we entered into a one-year service agreement for investor relations services. We issued 250,000 shares of our common stock, with a value of $160,000, for these services. The value was capitalized to prepaid expenses and was being amortized over the term of the agreement, however, the agreement has since been terminated and, as such, the entire amount was recognized as expense during the year ended July 31, 2013. As part of this agreement, the Company granted certain registration rights, under which the Company agreed to file a registration statement covering the resale of the shares of common stock issued in accordance with this agreement. | ||||||||
On April 17 and April 24, 2013, we completed the initial and second closings of a private placement pursuant to which we sold an aggregate of 1,000,000 shares of our common stock and warrants to purchase an aggregate of 500,000 shares of our common stock. The shares were sold at a per share purchase price of $0.40, resulting in approximately $400,000 in aggregate proceeds to us. After deducting fees of $16,000, the net proceeds to us were $384,000. The warrants have a term of three years from the initial exercise date, become exercisable six months after the date of issuance, and have an exercise price of $0.65 per share. We determined that the warrants issued in connection with this private placement were equity instruments and did not represent derivative instruments. For the warrants issued in connection with the initial closing on April 17th, a fair value of $119,000 was estimated for the warrants using the Black-Sholes valuation method using a volatility of 140.63%, an interest rate of 0.44% and a dividend yield of zero. For the warrants issued in connection with the second closing on April 24th, a fair value of $100,000 was estimated for the warrants using the Black-Sholes valuation method using a volatility of 140.75%, an interest rate of 0.43% and a dividend yield of zero. As part of this financing, the Company granted certain registration rights, under which the Company agreed to file a registration statement covering the resale of the shares of common stock sold in this financing, as well as those shares issuable upon exercise of the warrants. In the event that we have not filed to register for resale the shares and warrant shares issued as part of the April 24, 2013 private placement, within 45 days of the closing date, the Company will issue 100 warrant shares for each day that such filing is not completed, not to exceed 18,000 warrant shares. As of July 31, 2013, the shares and warrant shares have not been registered for resale. As a result, the private placement participant will receive an additional 5,300 warrant shares. | ||||||||
On May 23, 2013 we issued common stock as a settlement for past investor relations services and in exchange for services through July 31, 2013. We issued 150,000 shares of common stock, with a value of $71,000, for these services. The entire value was expensed during the year ended July 31, 2013. As part of this agreement, the Company granted certain registration rights, under which the Company agreed to file a registration statement covering the resale of the shares of common stock issued in accordance with this agreement. | ||||||||
On June 26 and July 10, 2013, we completed the initial and second closings of a private placement pursuant to which we sold an aggregate of 183,333 shares of our common stock and warrants to purchase an aggregate of 91,667 shares of our common stock. The shares were sold at a per share purchase price of $0.30, resulting in approximately $55,000 in aggregate proceeds to us. The warrants have a three-year term, are immediately exercisable, and have an exercise price of $0.50 per share. | ||||||||
We determined that the warrants issued in connection with this private placement were equity instruments and did not represent derivative instruments. For the warrants issued in connection with the initial closing on June 26th, a fair value of $13,000 was estimated for the warrants using the Black-Sholes valuation method using a volatility of 146.80%, an interest rate of 0.69% and a dividend yield of zero. For the warrants issued in connection with the second closing on July 10th, a fair value of $13,000 was estimated for the warrants using the Black-Sholes valuation method using a volatility of 146.89%, an interest rate of 0.73% and a dividend yield of zero. As part of this financing, the Company granted certain registration rights, under which the Company agreed to file a registration statement covering the resale of the shares of common stock sold in this financing, as well as those shares issuable upon exercise of the warrant. There are no penalties associated with the registration of shares and warrant shares. | ||||||||
The shares of common stock issued under the services agreements, private placements, and the warrants issued in the private placement were offered and sold without registration under the Securities Act of 1933, as amended (the “Securities Act”), or state securities laws, in reliance on the exemptions provided by Section 4(a)(2) of the Securities Act and Regulation D promulgated thereunder and in reliance on similar exemptions under applicable state laws, based on the lack of any general solicitation or advertising in connection with the sale of the securities; the representation of each investor to the Company that it is an accredited investor (as that term is defined in Rule 501 of Regulation D) and that it was purchasing the securities for its own account and without a view to distribute them. The securities may not be offered or sold in the United States without an effective registration statement or pursuant to an exemption from applicable registration requirements. | ||||||||
The following common stock transactions occurred during the year ended July 31, 2012: | ||||||||
In April 2011, we entered into a sales agreement with an investment banking firm. On December 14, 2011, we terminated such sales agreement and, consequently, there have been no sales of our common stock under the sales agreement since its termination. Under the terms of the sales agreement, we were permitted to offer and sell shares of our common stock having an aggregate offering price of up to $7,000,000. The sales were made, from time to time, through the investment bank in “at the market” offerings, as defined by the Securities and Exchange Commission, or the SEC, and were made pursuant to our then-effective shelf registration statement previously filed with the SEC, which expired on May 8, 2012. During the year ended July 31, 2012, we sold 167,136 shares of our common stock pursuant to the sales agreement for net proceeds of $949,000. | ||||||||
On October 24, 2011, we entered into a one year service agreement for investor relations services. We issued 18,750 shares of our common stock, with a value of $97,000, for these services. The value was capitalized to prepaid expenses and is being amortized over the term of the agreement. During the years ended July 31, 2013 and 2012, we recognized $24,000 and $73,000, respectively, of expense related to these services. | ||||||||
On December 14, 2011, we entered into a purchase agreement, or the $7.5M Purchase Agreement, and a related registration rights agreement with Lincoln Park Capital Fund, LLC, or Lincoln Park, pursuant to which Lincoln Park agreed to purchase from us up to $7,500,000 in shares of our common stock subject to the satisfaction of certain conditions, including the SEC declaring effective a registration statement for the resale of such shares. On April 10, 2012, we filed the resale registration statement with the SEC, but it was not declared effective and we filed with the SEC on June 28, 2012 a request for the withdrawal of that registration statement. On May 18, 2012, we delivered notice to Lincoln Park of our termination of the $7.5M Purchase Agreement and, consequently, there have been, and there will be, no sales of our common stock to Lincoln Park under the $7.5M Purchase Agreement. As consideration for its commitment to purchase shares of our common stock pursuant to the $7.5M Purchase Agreement, in December 2011, we issued to Lincoln Park 58,838 shares of our common stock as restricted securities. | ||||||||
On December 15, 2011, we entered into an additional purchase agreement, or the $2.5M Purchase Agreement, with Lincoln Park, pursuant to which Lincoln Park agreed to purchase from us up to $2,500,000 in shares of our common stock. Under the terms of the $2.5M Purchase Agreement, the shares were to be sold to Lincoln Park from time to time at a purchase price per share based on the prevailing market prices of our common stock and were registered pursuant to our then-effective shelf registration statement previously filed with the SEC, as supplemented by our registration statement on Form S-3MEF. That shelf registration statement expired on May 8, 2012, and on May 18, 2012, concurrently with our notice of termination of the $7.5M Purchase Agreement, we delivered notice to Lincoln Park of our termination of the $2.5M Purchase Agreement. Accordingly, since the date of the notice, there have been, and there will be, no further sales of our common stock to Lincoln Park under the $2.5M Purchase Agreement. As consideration for its commitment to purchase shares of our common stock under the $2.5M Purchase Agreement, in December 2011, we issued to Lincoln Park an additional 19,613 shares of our common stock. Such shares were registered pursuant to our then-effective shelf registration statement. During the year ended July 31, 2012, we sold 718,463 shares of our common stock to Lincoln Park pursuant to the $2.5M Purchase Agreement. Net proceeds from the sale of these shares were $1,719,000. | ||||||||
In connection with our agreements with Lincoln Park, we have fully amortized the deferred offering costs of $424,000. Of this amount, $128,000 represents fees associated with the offering, and $296,000 represents the fair market value of the 78,451 shares of our common stock issued to Lincoln Park as commitment shares. Upon termination of the $7.5M Purchase Agreement and the $2.5M Purchase Agreement, we expensed the remaining deferred offering costs of $287,000, which is included in selling, general and administrative expense in the 2012 consolidated statement of operations. Of that amount, $241,000 represents the unamortized fair value of the commitment shares issued to Lincoln Park. | ||||||||
In connection with the sale of our common stock to Lincoln Park pursuant to the $2.5M Purchase Agreement and the $7.5M Purchase Agreement, we agreed to pay a cash fee to Wharton Capital Markets LLC, or Wharton, pursuant to an engagement letter dated December 8, 2011, in an amount equal to 6% of the aggregate gross proceeds to us from the issuance and sale of shares pursuant to our agreements with Lincoln Park. The total fees recognized during the fiscal year ended July 31, 2012 were $122,000. Such amounts became due and payable to Wharton at the time that we actually received funds from Lincoln Park pursuant to our agreements with Lincoln Park, subject to our receipt of written confirmation that the Corporate Finance Department of the Financial Industry Regulatory Authority, Inc., or FINRA, had determined not to raise any objection with respect to the fairness or reasonableness of the compensation terms of our arrangement with Wharton. We have received no funds from Lincoln Park since our last sale of our common stock to Lincoln Park under the $2.5M Purchase Agreement and, because there will be no further sales of our common stock under either of the purchase agreements with Lincoln Park, no additional amounts will be paid to Wharton pursuant to the engagement letter. The engagement letter also provided that we issue to Wharton a warrant, or the Warrant, to purchase 25,000 shares of our common stock with an exercise price of 110% of the closing sale price of our common stock on the date of the issuance of the Warrant, subject to our receipt of no-objection confirmation from FINRA as described above. On February 3, 2012, we received that written confirmation from FINRA and, consequently, issued to Wharton the Warrant as of that date at an exercise price of $3.608 per share. We determined that the Warrant was an equity instrument and did not represent a derivative instrument. A fair value of $53,000 was estimated for the Warrant using the Black-Sholes valuation method using a volatility of 82.95%, an interest rate of 0.85% and a dividend yield of zero. Neither the Warrant issued to Wharton nor the shares to be issued upon exercise thereof have been or are to be registered for sale or resale under the Securities Act of 1933, or the Securities Act, and will be issued in reliance on an exemption from registration thereunder pursuant to Section 4(2) thereof. | ||||||||
On April 10, 2012, we entered into a four-month agreement with a consultant for investor relations services. We issued 20,000 shares of our common stock to the consultant, with a value of $45,000, for these services. The value was capitalized to prepaid expenses and is being amortized over the term of the agreement. During the year ended July 31, 2012, we recognized the entire $45,000 of expense related to these services. | ||||||||
On June 4, 2012, we issued an aggregate of 250,000 shares of our common stock to three separate investors pursuant to agreements entered with each such investor on May 16, 2012, May 17, 2012 and May 23, 2012. The shares were sold at a price of $2.00 per share, resulting in approximately $500,000 in aggregate gross proceeds to us. The shares have not been, nor will they be, registered under the Securities Act or any state securities laws and have been issued in reliance on an exemption from the registration requirements of the Securities Act afforded by Section 4(2) thereof. | ||||||||
In connection with the Bridge Loan issued during 2012 (See Note 5), we issued to each such lender: (i) an aggregate amount of 54,878 shares of our common stock, which was valued at $166,000 and recorded as a deferred asset and will be amortized to interest expense over the term of the Bridge Loan, and (ii) warrants to acquire up to an aggregate amount of 128,046 shares of our common stock, which have a four-year term, become exercisable six months after the date of their issuance, and had an exercise price upon issuance of $3.28 per share, which exercise price is subject to anti-dilution provisions that require derivative liability classification (See Note 5 and Note 6). Additionally, we issued to the placement agent 625 shares of common stock and warrants to acquire up to an aggregate amount of 4,374 shares of our common stock, which have the same terms as the warrants issued to the lenders in the Bridge Loan transaction. At issuance, the fair value of all of the warrants issued in connection with the Bridge Loan totaled $297,000. | ||||||||
On June 29, 2012, we entered into a common stock purchase agreement with fifteen investors, pursuant to which we issued and sold to such investors an aggregate of 325,125 shares of our common stock and warrants to purchase up to an aggregate of 81,280 shares of our common stock. The shares were sold to the investors at a price of $2.00 per share, resulting in gross proceeds to us of approximately $650,000. The warrants issued to such investors have a three-year term, become exercisable six months after the date of their issuance, and have an exercise price of $3.52 per common share. We determined that the warrants issued in connection with this private placement were equity instruments and did not represent derivative instruments. A fair value of $80,000 was estimated for the warrants using the Black-Sholes valuation method using a volatility of 82.44%, an interest rate of 0.24% and a dividend yield of zero. The investors have certain piggyback registration rights with respect to the shares sold pursuant to the common stock purchase agreement, the warrants and the shares issuable upon exercise of the warrants, which rights are subject to certain conditions and limitations set forth in such agreement. None of the securities sold to such investors have been registered under the Securities Act or any state securities laws and have been issued in reliance on an exemption from the registration requirements of the Securities Act afforded by Section 4(2) thereof and Regulation D promulgated thereunder. | ||||||||
Warrants | ||||||||
A summary of our warrant activity and related data is as follows: | ||||||||
Shares | ||||||||
Outstanding at July 31, 2011 | 188,613 | |||||||
Issued | 238,699 | |||||||
Exercised | 0 | |||||||
Expired | 0 | |||||||
Outstanding at July 31, 2012 | 427,312 | |||||||
Issued | 1,080,187 | |||||||
Exercised | 0 | |||||||
Expired | -73,378 | |||||||
Outstanding at July 31, 2013 | 1,434,121 | |||||||
The following table summarizes information related to warrants outstanding at July 31, 2013: | ||||||||
Expiration | Exercise | |||||||
Date | Price | Shares | ||||||
5/7/14 | $ | 16.50 | 11,363 | |||||
5/27/14 | $ | 18.96 | 45,503 | |||||
5/27/14 | $ | 21.12 | 5,532 | |||||
3/3/15 | $ | 16.80 | 52,836 | |||||
1/13/16 | $ | 3.52 | 81,280 | |||||
6/26/16 | $ | 0.50 | 41,667 | |||||
7/10/16 | $ | 0.50 | 50,000 | |||||
10/17/16 | $ | 0.65 | 250,000 | |||||
10/24/16 | $ | 0.65 | 250,000 | |||||
12/14/16 | $ | 3.61 | 25,000 | |||||
12/24/16 | $ | 3.28 | 132,420 | |||||
9/17/17 | $ | 1.38 | 113,520 | |||||
1/24/18 | $ | 0.83 | 375,000 | |||||
1,434,121 | ||||||||
We did not receive any cash from the exercise of warrants for the years ended July 31, 2013 and 2012, respectively. | ||||||||
Stock Option Plans | ||||||||
In 2007, we adopted the PURE Bioscience 2007 Equity Incentive Plan, or the Plan, which provides for the grant of incentive and non-qualified stock options, as well as other share-based payment awards, to our employees, directors, consultants and advisors. These awards have up to a 10-year contractual life and are subject to various vesting periods, as determined by the Compensation Committee or the Board of Directors. The Plan is the only active plan pursuant to which options to acquire common stock or restricted stock awards can be granted and are currently outstanding. As of July 31, 2013, there were approximately 127,059 shares of our common stock available for issuance under the Plan. | ||||||||
A summary of our stock option activity and related data is as follows: | ||||||||
Weighted- | Aggregate | |||||||
Average | Intrinsic | |||||||
Shares | Exercise Price | Value | ||||||
Outstanding at July 31, 2011 | 337,526 | $ | 21.02 | $ | 30,000 | |||
Granted | 40,625 | $ | 6.68 | |||||
Exercised | 0 | $ | 0 | |||||
Cancelled | -29,688 | $ | 22.05 | |||||
Outstanding at July 31, 2012 | 348,463 | $ | 19.26 | $ | 0 | |||
Granted | 273,000 | $ | 0.83 | |||||
Exercised | 0 | $ | 0 | |||||
Cancelled | -177,708 | $ | 15.28 | |||||
Outstanding at July 31, 2013 | 443,755 | $ | 9.52 | $ | 0 | |||
The weighted-average remaining contractual term of options outstanding at July 31, 2013 was approximately 6.7 years. | ||||||||
At July 31, 2013, 307,665 options were exercisable. These options had a weighted-average exercise price of $12.07, an aggregate intrinsic value of zero, and a weighted average remaining contractual term of approximately 5.9 years. | ||||||||
The weighted-average grant date fair value of equity options granted during the years ended July 31, 2013 and 2012 was $0.69 and $4.11, respectively. | ||||||||
A summary of our restricted stock activity and related data is as follows: | ||||||||
Shares | ||||||||
Outstanding at July 31, 2011 | 4,986 | |||||||
Granted | 6,852 | |||||||
Vested | -4,986 | |||||||
Forfeited | 0 | |||||||
Outstanding at July 31, 2012 | 6,852 | |||||||
Granted | 0 | |||||||
Vested | -6,852 | |||||||
Forfeited | 0 | |||||||
Outstanding at July 31, 2013 | 0 | |||||||
ShareBased_Compensation
Share-Based Compensation | 12 Months Ended | |||||
Jul. 31, 2013 | ||||||
Share-Based Compensation [Abstract] | ||||||
Share-Based Compensation | 10. Share-Based Compensation | |||||
We recognize compensation expense for stock option awards on a straight-line basis over the applicable service period of the award. The service period is generally the vesting period, with the exception of options granted subject to a consulting agreement, whereby the option vesting period and the service period defined pursuant to the terms of the consulting agreement may be different. Stock options issued to consultants are revalued quarterly until fully vested, with any change in fair value expensed. The following weighted-average assumptions were used to calculate share based compensation for the years ended July 31, 2013 and 2012: | ||||||
For the years ended July 31, | ||||||
2013 | 2012 | |||||
Volatility | 134.80% | 85.41% | ||||
Risk-free interest rate | 0.85% | 0.75% | ||||
Dividend yield | 0.0% | 0.0% | ||||
Expected life | 5.06 years | 4 years | ||||
Volatility is the measure by which our stock price is expected to fluctuate during the expected term of an option. Volatility is derived from the historical daily change in the market price of our common stock, as we believe that historical volatility is the best indicator of future volatility. | ||||||
The risk-free interest rates used in the Black-Scholes calculations are based on the prevailing U.S. Treasury yield as determined by the U.S. Federal Reserve. | ||||||
We have never paid dividends on our common stock and do not anticipate paying dividends on our common stock in the foreseeable future. Accordingly, we have assumed no dividend yield for purposes of estimating the fair value of our share-based compensation. | ||||||
The expected life of our options is determined following the guidance of Staff Accounting Bulletin No. 107 and Staff Accounting Bulletin No. 110. We follow the simplified method to determine the expected term of options issued to employees and directors. Under the simplified method, the expected term is presumed to be the mid-point between the vesting date and the end of the contractual term. The expected term for options issued to consultants is the contractual term. We periodically evaluate our historical data as a basis for determining the expected terms of such options. | ||||||
Stock-based compensation expense is based on awards ultimately expected to vest, and therefore is reduced by expected forfeitures. | ||||||
The following table summarizes share-based compensation expense related to employee and director stock options, consulting stock options, and restricted stock awards, for the years ended July 31, 2013 and 2012: | ||||||
For the years ended July 31, | ||||||
2013 | 2012 | |||||
Share-based compensation for employees and directors: | ||||||
Selling, general and administrative | $ | 564,000 | $ | 825,000 | ||
Research and development | 154,000 | 257,000 | ||||
718,000 | 1,082,000 | |||||
Share-based compensation for consultants: | ||||||
Selling, general and administrative | 0 | -5,000 | ||||
Research and development | 2,000 | 0 | ||||
2,000 | -5,000 | |||||
Total share-based compensation expense | $ | 720,000 | $ | 1,077,000 | ||
As of July 31, 2013, there was $356,000 of unrecognized non-cash compensation cost related to unvested options, which will be recognized over a weighted average period of 0.53 years. | ||||||
Sales_Concentration
Sales Concentration | 12 Months Ended |
Jul. 31, 2013 | |
Risks and Uncertainties [Abstract] | |
Sales Concentration | 11. Sales Concentration |
Net product sales were $820,000 and $812,000 for the years ended July 31, 2013 and 2012, respectively. For the year ended July 31, 2013, three customers accounted for 69% of our net product sales. No other individual customer accounted for 10% or more of our net product sales. The geographic breakdown of net product sales was as follows: 86% U.S. and 14% foreign. For the year ended July 31, 2012, two customers accounted for 67% of our net product sales. No other individual customer accounted for 10% or more of our net product sales. The geographic breakdown of net product sales was as follows: 92% U.S. and 8% foreign. | |
Income_Taxes
Income Taxes | 12 Months Ended | |||||
Jul. 31, 2013 | ||||||
Income Taxes [Abstract] | ||||||
Income Taxes | 12. Income Taxes | |||||
We file federal and California consolidated tax returns with our subsidiaries. Our income tax provision for the year ended July 31, 2013 was $1,600 and for the year ended July 31, 2012 was $5,000; the minimum state franchise taxes we pay regardless of income or loss. | ||||||
At July 31, 2013, we had federal and California tax net operating loss carry-forwards of approximately $75.2 million and $64.9 million, respectively. Included in these net operating loss carry-forwards is $17.3 million related to a deduction for income tax purposes for which the Company has not realized a tax benefit. In future periods an adjustment would be recorded to Additional Paid in Capital at the time that these net operating losses may be utilized and reduce income tax. At July 31, 2012, we had federal and California tax net operating loss carry-forwards of approximately $70.7 million and $60.0 million, respectively. Utilization of the net operating loss carry-forwards may be subject to a substantial annual limitation due to ownership change limitations that may have occurred or that could occur in the future, as required by Section 382 of the Internal Revenue Code as well as similar state provisions. These ownership changes may limit the amount of net operating loss carry-forwards that can be utilized annually to offset future taxable income and tax, respectively. In general, an ownership change, as defined by Section 382 of the Internal Revenue Code results from a transaction or series of transactions over a three-year period resulting in an ownership change of more than 50 percentage points of the outstanding stock of a company by certain stockholders or public groups. Since our formation, we have raised capital through the issuance of capital stock on several occasions (both before and after our initial public offering in 1996) which, combined with the purchasing stockholders’ subsequent disposition of those shares, may have resulted in such an ownership change, or could result in an ownership change in the future upon subsequent disposition. While we do not believe that we have experienced an ownership change, the pertinent tax rules related thereto are complex and subject to varying interpretations, and thus complete assurance cannot be provided that the taxing authorities would not take an alternative position. | ||||||
Our current federal tax loss carry-forwards begin expiring in the year ended July 31, 2019 and, unless previously utilized, will completely expire in the year ending July 31, 2033. Our California tax loss carry-forwards will begin to expire in the year ending July 31, 2014, and will completely expire in the year ending July 31, 2032. | ||||||
Significant components of our deferred tax assets are as follows: | ||||||
July 31, | ||||||
2013 | 2012 | |||||
Net operating loss carry-forward | $ | 22,482,000 | $ | 20,677,000 | ||
Stock options and warrants | 1,915,000 | 1,765,000 | ||||
Other temporary differences | 252,000 | 118,000 | ||||
Total deferred tax assets | 24,649,000 | 22,560,000 | ||||
Valuation allowance for deferred tax assets | -24,649,000 | -22,560,000 | ||||
Net deferred tax assets | $ | 0 | $ | 0 | ||
Realization of our deferred tax assets, which relate to operating loss carry-forwards and timing differences, is dependent on future earnings, among other factors. The timing and amount of future earnings are uncertain and therefore a valuation allowance has been established. The increase in the valuation allowance on the deferred tax asset during the year ended July 31, 2013 was $2,089,000. | ||||||
A reconciliation of income taxes computed using the statutory income tax rate, compared to the effective tax rate, is as follows: | ||||||
2013 | 2012 | |||||
Federal tax benefit at the expected statutory rate | 34.0 | % | 34.0 | % | ||
State income tax, net of federal tax benefit | 5.8 | 5.8 | ||||
Expired net operating loss carryforwards | -9.7 | -6.8 | ||||
Other | -2.9 | -3.1 | ||||
Valuation allowance | -27.2 | -29.9 | ||||
Income tax benefit - effective rate | 0.0 | % | 0.0 | % | ||
Following authoritative guidance, we recognize the tax benefit from a tax position if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. | ||||||
Our practice is to recognize interest and/or penalties related to income tax matters in income tax expense; however we have had no accrued interest or penalties at either July 31, 2013 or July 31, 2012. We are subject to income taxes in the United States and in California, and our historical tax years remain subject to future examination by the U.S. and California tax authorities. During the year ended July 31, 2013, we did not record any activity related to our unrecognized tax benefits. | ||||||
The Company and its subsidiaries are subject to federal income tax as well as income tax of multiple state jurisdictions. With few exceptions, the Company is no longer subject to income tax examination by tax authorities in major jurisdictions for years prior to 2007. However, to the extent allowed by law, the taxing authorities may have the right to examine prior periods where net operating losses were generated and carried forward, and make adjustments up to the amount of the carryforwards. The Company is not currently under examination by the IRS or state taxing authorities. | ||||||
Subsequent_Events
Subsequent Events | 12 Months Ended | |
Jul. 31, 2013 | ||
Subsequent Events [Abstract] | ||
Subsequent Events | 13. Subsequent Events | |
New Board of Directors and Management Team | ||
On August 13, 2013, the following managerial and corporate governance changes occurred to create a new Board of Directors, or Board, and management team: | ||
· | Michael L. Krall, Donna Singer, and Dennis Brovarone resigned as directors of the Company by mutual agreement with the Company. Mr. Brovarone served on our Compensation Committee. | |
· | Michael L. Krall, Donna Singer, and Dennis Atchley resigned all positions respectively held by them as officers of the Company by mutual agreement with the Company. | |
· | The terms of Mr. Krall’s, Ms. Singer’s, and Mr. Brovarone’s separation agreements are as follows: Mr. Krall and Ms. Singer received a onetime separation payment of $150,000 and $45,000, respectively; Mr. Brovarone’s received $91,332, payable in monthly installments, commencing 120 days after the separation date; Mr. Krall is entitled to receive a cash severance of $540,000 payable over an eighteen month period; Ms. Singer is entitled to receive a cash severance of $204,000 payable over a twelve month period; Mr. Krall received 850,000 unregistered shares of common stock, valued at $595,000; Ms. Singer received 300,000 unregistered shares of common stock, valued at $210,000; and Mr. Krall and Ms. Singer will continue to receive health insurance coverage over the terms of their respective severance periods. Medical and dental insurance for Mr. Krall and his dependants will cost the Company $19,933 over the eighteen month severance period. Medical and dental insurance for Ms. Singer and her dependants will cost the Company $17,819 over the twelve month severance period. | |
· | The Board of Directors of the Company (the "Board") appointed Dave Pfanzelter to serve as a member of the Board and to be its Chairman of the Board. His appointment was immediately effective as of August 13, 2013. Mr. Pfanzelter previously served on the Company's Board from February 6, 2013 until his separation on July 19, 2013. | |
· | The Board appointed Dave Pfanzelter to serve as Interim Chief Executive Officer. His appointment was immediately effective as of August 13, 2013. | |
· | The Board appointed Peter C. Wulff to serve as Chief Financial Officer, Chief Operating Officer, and Corporate Secretary. With his appointment, Mr. Wulff will also serve as the Company's Principal Financial Officer and Principal Accounting Officer. His appointment was immediately effective as of August 13, 2013. Mr. Wulff previously served as the Company's Chief Financial Officer from November 5, 2012 until his departure on May 13, 2013. | |
· | The Board appointed Gary D. Cohee to serve as a member of the Board. His appointment was immediately effective as of August 13, 2013. Mr. Cohee will serve on the Audit Committee of the Board. | |
As previously disclosed on our Form 8-K filed on July 25, 2013, on July 22, 2013, Jon Carbone and Paul Maier resigned as directors of the Company and as members of the Audit and Compensation Committees. | ||
In connection with Mr. Krall’s separation from the Company, the Company entered into a Purchase, Severance, and Release Agreement effective August 13, 2013 with Mr. Krall (the “Krall Release Agreement”). The Krall Release Agreement provides for a mutual release of all claims between Mr. Krall and the Company. Mr. Krall is also prohibited from engaging in certain competitive activities for the next four years. Pursuant to the Krall Release Agreement, Mr. Krall (i) was paid $25,000 on August 13, 2013; and, (ii) is entitled to receive $30,000 per month for 18-months following August 13, 2013, during which time Mr. Krall shall provide consulting services to the Company. In consideration of Mr. Krall’s transfer to the Company of certain enumerated intellectual property rights, the Company also (i) paid Mr. Krall the sum of $125,000 on August 13, 2013; and, (ii) issued to Mr. Krall 850,000 shares of common stock on August 21, 2013 (the “Krall Shares”). The Krall Shares are subject to certain registration rights intended to register the Krall Shares. The Krall Shares are also subject to a Voting Support Agreement and Irrevocable Proxy (the “Krall Proxy”). The Krall Proxy gives our CEO the right to vote the Krall Shares for so long as Mr. Krall owns the Krall Shares. Additionally, upon the earlier of (i) us receiving a total of $3 million; or, (ii) sixty days from August 13, 2013, we are obligated to deposit $500,000 into an escrow account, exclusively dedicated to the purpose of ensuring availability of the funds necessary to pay the monthly severance payment to Mr. Krall. | ||
In connection with Ms. Singer’s separation from the Company, we entered into a Purchase, Severance, and Release Agreement effective August 13, 2013 with Ms. Singer (the “Singer Release Agreement”). The Singer Release Agreement provides for a mutual release of all claims between Ms. Singer and the Company. Ms. Singer is also prohibited from engaging in certain competitive activities until August 2017. Pursuant to the Singer Release Agreement, Ms. Singer (i) was paid $45,000 on August 13, 2013; (ii) is due the amount of her continued health insurance coverage until August 2014; and, (iii) is entitled to $17,000 per month for 12-months following August 13, 2013, during which time Ms. Singer shall provide consulting services to the Company. In consideration of Ms. Singer’s transfer to the Company of certain enumerated intellectual property rights, the Company also issued to Ms. Singer 300,000 shares of common stock on August 21, 2013 (the “Singer Shares”). The Singer Shares are subject to certain registration rights intended to register the Singer Shares. The Singer Shares are also subject to a Voting Support Agreement and Irrevocable Proxy (the “Singer Proxy”). The Singer Proxy gives our CEO the right to vote the Singer Shares for so long as Ms. Singer owns the Singer Shares | ||
On September 10, 2013, the Board appointed Henry R. Lambert to serve as Chief Executive Officer. His appointment was effective as of and on September 16, 2013. In connection with the hiring of Henry R. Lambert to serve as the Company's Chief Executive Officer, Dave Pfanzelter resigned his position as our Interim Chief Executive Officer. Mr. Pfanzelter's resignation coincided with Mr. Lambert's start date, September 16, 2013. Mr. Pfanzelter will continue to render significant services to the Company and will continue to serve as the Company's Chairman of the Board. | ||
On September 10, 2013, the Board appointed Henry R. Lambert to serve as a member of the Board. His appointment was effective as of and on September 16, 2013. | ||
On October 1, 2013, the Board appointed Dr. David Theno, Jr. to serve as a member of the Board. His appointment was immediately effective as of October 1, 2013. | ||
On October 3, 2013, the Board appointed Craig C. Culver to serve as a member of the Board. His appointment was immediately effective as of October 3, 2013. | ||
On October 8, 2013, the Board appointed William Otis to serve as a member of the Board. His appointment was immediately effective as of October 8, 2013. | ||
Common Stock and Other Activity | ||
The following transactions occurred on August 13, 2013: | ||
· | We completed a private placement pursuant to which we sold 5,500,000 shares of our common stock. The shares were sold at a per share purchase price of $0.20, resulting in approximately $1,100,000 in aggregate proceeds to the Company. The shares of common stock issued under the private placements were offered and sold without registration under the Securities Act of 1933, as amended (the “Securities Act”), or state securities laws, in reliance on the exemptions provided by Section 4(a)(2) of the Securities Act and Regulation D promulgated thereunder and in reliance on similar exemptions under applicable state laws, based on the lack of any general solicitation or advertising in connection with the sale of the securities; the representation of each investor to the Company that it is an accredited investor (as that term is defined in Rule 501 of Regulation D) and that it was purchasing the securities for its own account and without a view to distribute them. The securities may not be offered or sold in the United States without an effective registration statement or pursuant to an exemption from applicable registration requirements. We have used, and intend to continue to use, the remaining proceeds from the offering for working capital and general corporate purposes. | |
· | We entered into a two-year service agreement with Pillar Marketing Group, Inc. for general advisory services with respect to corporate finance and capital raising activities, merger and acquisition transactions, and other related endeavors. Per the agreement with Pillar we issued 250,000 shares of unregistered common stock, with a value of $175,000. Pillar is also to be paid the sum of $25,000 per month plus, upon consummation of any transaction involving either (i) the acquisition, merger, or combination, or similar transaction of or with another company; or, (ii) a transaction which results in the Company “Up Listing”, as that term is commonly defined in a business context, we are to issue Pillar that number of our shares of our common stock which equals to three percent (3%) of our issued and outstanding shares determined on a fully diluted basis post-transaction. Pillar also received $150,000 for certain corporate reorganization activities previously provided. We also issued Pillar 300,000 shares of unregistered common stock for certain corporate reorganization services previously provided. | |
· | We issued 300,000 shares of unregistered common stock, with a value of $210,000, for investor relations. The shares were issued to Bibicoff & McInnis for investor relations services. | |
· | We issued 250,000 shares of unregistered common stock, with a value of $175,000, for corporate finance and restructuring activities to Wulff Services Inc. Wulff Services, Inc. is primarily owned by our current Chief Financial Officer / Chief Operation Officer, Peter Wulff. In addition, Wulff Services, Inc. received a onetime payment of $75,000 related to the corporate finance and restructuring efforts. | |
· | We issued 300,000 shares of common stock, with a value of $210,000, to Donna Singer, per Ms. Singer’s separation agreement, pursuant to an exemption from registration provided by Section 4(a)(2) of the Securities Act. Ms. Singer was the Company’s Executive Vice President and served as a member of the Board. Additionally, as part of this issuance, we granted certain registration rights with respect to the shares issued to Ms. Singer. | |
· | We issued 850,000 shares of common stock, with a value of $595,000, to Michael L. Krall, per Mr. Krall’s separation agreement, pursuant to an exemption from registration provided by Section 4(a)(2) of the Securities Act. Mr. Krall was the Company’s Chief Executive and served as a member of the Board. Additionally, as part of this issuance, we granted certain registration rights with respect to the shares issued to Mr. Krall. | |
On October 1, 2013, we received $162,500 from the exercise of a warrant to purchase 250,000 shares of our common stock. | ||
On October 14 and October 16, 2013, we completed a private placement pursuant to which we sold 2,441,270 shares of our common stock. The shares of common stock issued in this offering were offered and sold without registration under the Securities Act, or state securities laws, in reliance on the exemptions provided by Section 4(a)(2) (previously 4(2)) of the Securities Act and Regulation D promulgated thereunder and in reliance on similar exemptions under applicable state laws, based on the lack of any general solicitation or advertising in connection with the sale of the securities; the representation of each investor to the Company that it is an accredited investor (as that term is defined in Rule 501 of Regulation D) and that it was purchasing the securities for its own account and without a view to distribute them. The shares were sold at a per share purchase price of $0.75 per share, resulting in approximately $1.83 million in aggregate proceeds to the Company. We have used, and intend to continue to use, the remaining proceeds from the offering for working capital and general corporate purposes. | ||
On October 23, 2013, we issued 305,833 shares of unregistered common stock, in exchange for previous services provided, valued at, $257,750, and paid $91,500 to Mr. Cohee and/or his affiliates for financial advisor services. | ||
Retention of Chairman | ||
Chairman Agreement: On August 13, 2013, we appointed Dave Pfanzelter to serve as Chairman of the Board. On October 23, 2013, we entered into a Chairman Agreement with Mr. Pfanzelter (the “Chairman Agreement”). The Chairman Agreement provides that Mr. Pfanzelter is to serve as Chairman of the Board, effective as of August 13, 2013, until his earlier resignation or removal. The Chairman Agreement provides that for the period beginning on August 13, 2013 and ending November 13, 2013, we are to pay Mr. Pfanzelter an amount of approximately $41,700 per month for his services as Chairman of the Board, and thereafter we are to pay Mr. Pfanzelter the amount of $12,500 per month for his services as Chairman of the Board, payable on a quarterly basis (collectively “Chairman Compensation”). Mr. Pfanzelter is also eligible to receive annual and periodic bonuses in the discretion of the Board. | ||
The Chairman Agreement provides for certain compensation to be paid to Mr. Pfanzelter if he is removed by the Board without Cause or Mr. Pfanzelter resigns for Good Reason. In summary, “Cause” is the commission by Mr. Pfanzelter of an act of fraud or another felony, or gross misconduct resulting in a material adverse effect on the Company; refusal by Mr. Pfanzelter to perform his or her duties under the Chairman Agreement or to otherwise breach the Chairman Agreement, or a material breach by Mr. Pfanzelter of Company policy or the Chairman Agreement or other agreements between the Company and Mr. Pfanzelter. “Good Reason” is a material reduction of Mr. Pfanzelter’s compensation; a material reduction by the Board of Mr. Pfanzelter’s authority, duties or responsibilities; or a material breach of the Chairman Agreement by the Company. | ||
Upon such event, Mr. Pfanzelter, upon signing a release in favor of the Company, would be entitled to severance pay in the form of continued payments. Mr. Pfanzelter would be entitled to receive his Chairman Compensation then in effect for a period of 12 months following such date of removal or resignation. The Chairman Agreement additionally provides that all outstanding vested stock options held by Mr. Pfanzelter at the date of such termination would continue to be exercisable for a period of up to 90 days following such termination, but in no event beyond the maximum permitted expiration date. Additionally, 100% of Mr. Pfanzelter’s restricted stock units described below would vest. | ||
The Chairman Agreement with Mr. Pfanzelter also provides for compensation if Mr. Pfanzelter’s position is terminated by the Company without Cause within twelve months following a Change in Control, or Mr. Pfanzelter resigns for Good Reason within such period. A “Change in Control” is the closing of the sale, transfer or other disposition of all or substantially all of the Company’s assets or the exclusive license of substantially all of the intellectual property of the Company; the consummation of a merger or consolidation of the Company with or into another entity; any person (subject to certain exemptions) becomes the beneficial owner of securities of the Company representing 35% or more of the total combined voting power of the Company; or if individuals who, as of 60 days after the effective date of the agreement are members of the Board, or are nominees of such Board members, cease to constitute at least a majority of the members of the Board. | ||
Upon such event, Mr. Pfanzelter would be entitled to additional separation pay in excess of the amounts described above, in each case in an amount equal to a single lump sum payment equal to 200% of Mr. Pfanzelter’s then current Chairman Compensation. Additionally, 100% of Mr. Pfanzelter’s restricted stock units described below would vest upon. | ||
Chairman RSU Award: On October 23, 2013, we granted Mr. Pfanzelter an award consisting of two million eight hundred thousand (2,800,000) Restricted Stock Units (“RSUs”). The award was not granted pursuant to any compensatory, bonus, or similar plan maintained or otherwise sponsored by the Company. The RSUs vest 25% on February 15, 2014, 25% on February 15, 2015 and 50% on February 15, 2016. The shares of our common stock will be settled and delivered to Mr. Pfanzelter six months after each applicable vesting date referenced above. Additionally, 100% of the restricted stock units would vest upon a termination without Cause or resignation for Good Reason, upon a Change in Control, or upon grantee’s death or complete disability. At vesting, if grantee is a director or consultant, the Company is obligated to pay grantee an amount equal to the sum of the taxes imposed on the vested units that are treated as “self-employment income” plus a tax gross-up payment for all federal, state and local taxes payable by grantee. At settlement, the Company shall allow grantee to satisfy all or any portion of the Company’s tax withholding obligations by having the Company cancel the shares of stock otherwise deliverable to the grantee in settlement of the restricted stock units in an amount equal to a number of whole shares having a fair market value not in excess of the amount of such tax withholding obligations determined by the applicable minimum statutory withholding rates. Upon cancellation of the shares, the Company shall pay the fair market value of such cancelled shares to the grantee in cash so that the grantee can satisfy his tax obligations. | ||
Retention of Chief Executive Officer | ||
Henry Lambert Employment Agreement: On September 10, 2013, we appointed Henry R. Lambert to serve as Chief Executive Officer and a member of the Board. His employment agreement, dated as of October 23, 2013, provides that such agreement continues until termination by either the Company or Mr. Lambert. During the term of each employment agreement, Mr. Lambert is entitled to an annual base salary, which may be increased, but not decreased, by the Board or the Compensation Committee in their discretion. His initial annual base salary is $350,000. | ||
Mr. Lambert’s employment agreement also provides that, during the term of such agreement, he is eligible for equity compensation grants to be awarded at the discretion of the Compensation Committee and the Board, and also provides for annual bonus targets equal to, as applicable, 50% of his current annual base salary, in each case to be awarded at the sole discretion of the Compensation Committee and the Board. Additionally, pursuant to the terms of Mr. Lambert’s employment agreement, we granted Mr. Lambert a restricted stock unit for 500,000 shares of our common stock as described below. | ||
Mr. Lambert’s employment agreement provides for certain compensation to be paid such executive officer if his employment is terminated by the Company without Cause or terminated by the executive for Good Reason. In summary, “Cause” is the commission by the executive of an act of fraud or another felony, or gross misconduct resulting in a material adverse effect on the Company; refusal by the executive to perform his or her duties under the agreement or to otherwise breach the agreement, or a violation of confidentiality, non-competition and/or non-solicitation provisions to which the Company is bound. “Good Reason” is a material reduction of the executive’s base salary or target bonus percentage; a material reduction by the Company of the executive’s authority, duties or responsibilities; a relocation of the Company’s offices that requires an increase in the executive’s one-way driving distance of more than fifty miles; or a material breach of the agreement by the Company. | ||
Upon such event, the executive, upon signing a release in favor of the Company, would be entitled to severance pay in the form of continued payments. Mr. Lambert would be entitled to receive his base salary then in effect and group health and dental benefits in accordance with COBRA for a period of 6 months from the date of his termination or resignation. His employment agreement additionally provides that all outstanding vested stock options held by Mr. Lambert at the date of such termination would continue to be exercisable for a period of up to 90 days following such termination, but in no event beyond the maximum permitted expiration date. Additionally, 100% of the restricted stock units described below would vest upon such termination or resignation. | ||
The employment agreement with Mr. Lambert also provides for compensation if Mr. Lambert’s employment is terminated by the Company without Cause within twelve months following a Change in Control, or the executive resigns for Good Reason within such period. A “Change in Control” is the closing of the sale, transfer or other disposition of all or substantially all of the Company’s assets or the exclusive license of substantially all of the intellectual property of the Company; the consummation of a merger or consolidation of the Company with or into another entity; any person (subject to certain exemptions) becomes the beneficial owner of securities of the Company representing 35% or more of the total combined voting power of the Company; or if individuals who, as of 60 days after the effective date of the agreement are members of the Board, or are nominees of such Board members, cease to constitute at least a majority of the members of the Board. | ||
Upon such event, Mr. Lambert would be entitled to additional severance pay in excess of the amounts described above, in each case in an amount equal to a single lump sum payment equal to 100% of Mr. Lambert’s then current annual base salary. In addition, in such event, the vesting of all outstanding stock options then held by the applicable executive would automatically accelerate and all stock options would continue to be exercisable for 12 months, but in no event beyond the maximum permitted expiration date. Additionally, 100% of the restricted stock units described below would vest. | ||
Henry Lambert RSU Awards: On October 23, 2013, we granted Mr. Lambert an award consisting of five hundred thousand (500,000) RSUs. The award was not granted pursuant to any compensatory, bonus, or similar plan maintained or otherwise sponsored by the Company. The RSUs vest sixty percent (60%) on September 10, 2014 and the vesting of the remaining forty percent (40%) depend on the achievement of certain quarterly sales goals over a two year period. The shares of our common stock will be settled and delivered to Mr. Lambert six months after the vesting date of September 10, 2014 and immediately after the vesting upon achievement of certain quarterly sales goals, referenced above. Additionally, 100% of the restricted stock units subject to the time-based vesting would vest upon a termination without Cause or resignation for Good Reason, upon a Change in Control, or upon grantee’s death or complete disability. 100% of the restricted stock units subject to the vesting based on achievement of certain sales goals would vest upon a termination without Cause or resignation for Good Reason, upon a Change in Control, or upon grantee’s death or complete disability, so long as such condition occurred prior to October 31, 2015. At vesting, if grantee is an employee, the Company is obligated to withhold FICA amount due with respect to the vested units and the Company is also obligated to pay grantee an amount equal to the FICA amount withheld plus a tax gross-up payment for taxes payable by the grantee with respect to the FICA amount. At settlement, the Company shall allow grantee to satisfy all or any portion of the Company’s tax withholding obligations by having the Company deduct from the shares of stock otherwise deliverable to the grantee in settlement of the restricted stock units a number of whole shares having a fair market value not in excess of the amount of such tax withholding obligations determined by the applicable minimum statutory withholding rates. | ||
Retention of Chief Financial Officer/ Chief Operating Officer | ||
Peter Wulff Agreement: On August 13, 2013, we appointed Peter Wulff as our Chief Financial Officer, Chief Operating Officer, and Corporate Secretary. His employment agreement, dated as of October 23, 2013, provides that such agreement continues until termination by either the Company or Mr. Wulff. During the term of each employment agreement, Mr. Wulff is entitled to an annual base salary, which may be increased, but not decreased, by the Board or the Compensation Committee in their discretion. His initial annual base salary is $325,000. | ||
Mr. Wulff’s employment agreement also provides that, during the term of such agreement, he is eligible for equity compensation grants to be awarded at the discretion of the Compensation Committee and the Board, and also provides for annual bonus targets equal to, as applicable, 50% of his current annual base salary, in each case to be awarded at the sole discretion of the Compensation Committee and the Board. Additionally, pursuant to the terms of Mr. Wulff’s employment agreement, we granted Mr. Wulff a restricted stock unit for 1,000,000 shares of our common stock as described below. | ||
Mr. Wulff’s employment agreement provides for certain compensation to be paid such executive officer if his employment is terminated by the Company without Cause or terminated by the executive for Good Reason. In summary, “Cause” is the commission by the executive of an act of fraud or another felony, or gross misconduct resulting in a material adverse effect on the Company; refusal by the executive to perform his or her duties under the agreement or to otherwise breach the agreement, or a violation of confidentiality, non-competition and/or non-solicitation provisions to which the Company is bound. “Good Reason” is a material reduction of the executive’s base salary or target bonus percentage; a material reduction by the Company of the executive’s authority, duties or responsibilities; a relocation of the Company’s offices that requires an increase in the executive’s one-way driving distance of more than fifty miles; or a material breach of the agreement by the Company. | ||
Upon such event, the executive, upon signing a release in favor of the Company, would be entitled to severance pay in the form of continued payments. Mr. Wulff would be entitled to receive his base salary then in effect and group health and dental benefits in accordance with COBRA for a period of 12 months from the date of his termination or resignation. His employment agreement additionally provides that all outstanding vested stock options held by Mr. Wulff at the date of such termination would continue to be exercisable for a period of up to 90 days following such termination, but in no event beyond the maximum permitted expiration date. Additionally, 100% of the restricted stock units described below would vest upon such termination or resignation. | ||
The employment agreement with Mr. Wulff also provides for compensation if Mr. Wulff’s employment is terminated by the Company without Cause within twelve months following a Change in Control, or the executive resigns for Good Reason within such period. A “Change in Control” is the closing of the sale, transfer or other disposition of all or substantially all of the Company’s assets or the exclusive license of substantially all of the intellectual property of the Company; the consummation of a merger or consolidation of the Company with or into another entity; any person (subject to certain exemptions) becomes the beneficial owner of securities of the Company representing 35% or more of the total combined voting power of the Company; or if individuals who, as of 60 days after the effective date of the agreement are members of the Board, or are nominees of such Board members, cease to constitute at least a majority of the members of the Board. | ||
Upon such event, Mr. Wulff would be entitled to additional severance pay in excess of the amounts described above, in each case in an amount equal to a single lump sum payment equal to 200% of Mr. Wulff’s then current annual base salary. In addition, in such event, the vesting of all outstanding stock options then held by the applicable executive would automatically accelerate and all stock options would continue to be exercisable for 12 months, but in no event beyond the maximum permitted expiration date. Additionally, 100% of the restricted stock units described below would vest. | ||
Peter Wulff RSU Awards: On October 23, 2013, we granted Mr. Wulff an award consisting of one million (1,000,000) RSUs. The award was not granted pursuant to any compensatory, bonus, or similar plan maintained or otherwise sponsored by the Company. The RSUs vest twenty five percent (25%) on March 15, 2014, twenty five percent (25%) on March 15, 2015 and fifty percent (50%) on March 15, 2016. The shares of our common stock will be settled and delivered to Mr. Wulff six months after each applicable vesting date referenced above. Additionally, 100% of the restricted stock units would vest upon a termination without Cause or resignation for Good Reason, upon a Change in Control, or upon grantee’s death or complete disability. At vesting, if grantee is an employee, the Company is obligated to withhold FICA amount due with respect to the vested units and the Company is also obligated to pay grantee an amount equal to the FICA amount withheld plus a tax gross-up payment for taxes payable by the grantee with respect to the FICA amount. At settlement, the Company shall allow grantee to satisfy all or any portion of the Company’s tax withholding obligations by having the Company deduct from the shares of stock otherwise deliverable to the grantee in settlement of the restricted stock units a number of whole shares having a fair market value not in excess of the amount of such tax withholding obligations determined by the applicable minimum statutory withholding rates. | ||
Retention of Non-Employee Directors | ||
Cohee Director Agreement: On August 13, 2013, we appointed Mr. Cohee to serve as a member of the Board and on September 17, 2013, we entered into a letter agreement with Mr. Cohee. Mr. Cohee’s letter agreement provides that his initial term will be for one year. In connection with his execution of the letter agreement, we are obligated to issue him 200,000 shares of our common stock pursuant to a restricted stock unit agreement. Additionally, we will pay him an annual retainer fee of $60,000, payable quarterly. Additionally, he acknowledges and agrees that in order to satisfy certain rules for public companies he may be required to serve on one or more of the Board’s Audit Committee, Compensation Committee, and/or Nominating and Governance Committee, and that such committee assignments will be agreed between him and the Company, and that he will be compensated for such service. His letter agreement also provides that he will also be subject to certain confidentiality obligations. | ||
Non-Employee RSU Awards: On October 23, 2013, the Company granted Messrs. Cohee, Culver, Otis and Dr. Theno, awards consisting of two hundred thousand (200,000) RSUs, respectively. The awards were not granted pursuant to any compensatory, bonus, or similar plan maintained or otherwise sponsored by the Company. The RSUs vest fifty percent (50%) on the earlier of (i) the date of the annual meeting in 2015 or (ii) January 15, 2015 and fifty percent (50%) on the earlier of (i) the date of the annual meeting in 2016 or (ii) January 15, 2016. The shares of our common stock will be settled and delivered to Messrs. Cohee, Culver, Otis and Dr. Theno immediately after vesting. | ||
Director Fees: Our non-employee directors will receive (i) an annual cash retainer of $60,000, paid on a fiscal quarter basis; (ii) an annual cash retainer for service as a Committee Chair, as follows: Audit Committee Chair – $10,000; and Compensation Committee Chair – $5,000; (iii) a fee of $4,000 for serving on the Audit Committee; and (iv) $2,500 for serving on the Compensation Committee. We also reimburse our non-employee directors for their reasonable travel and lodging costs to attend Board and Committee meetings. | ||
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policy) | 12 Months Ended |
Jul. 31, 2013 | |
Summary of Significant Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation |
The accompanying consolidated financial statements include the consolidated accounts of Pure Bioscience, Inc. and its wholly owned subsidiary, ETIH2O Corporation, a Nevada corporation. ETIH2O Corporation has no business and no material assets or liabilities and there have been no significant transactions related to ETIH2O during the periods presented in the consolidated financial statements. All inter-company balances and transactions have been eliminated | |
Uses of Estimates | Use of Estimates |
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America, or GAAP, requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements, and the disclosures made in the accompanying notes to the consolidated financial statements. Actual results could differ materially from those estimates. | |
Reclassification | Reclassification |
Certain reclassifications have been made to prior period amounts to conform to current period presentation. These reclassifications did not have an impact on our results of operations or financial condition as of and for the years ended July 31, 2013 and 2012. | |
Cash and Cash Equivalents | Cash and Cash Equivalents |
Cash and cash equivalents consist of cash and highly liquid investments with original maturities from purchase date of three months or less. | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments |
Certain of our financial instruments—including cash and cash equivalents, accounts receivable, inventories, prepaid expenses, accounts payable, accrued liabilities, note payable and deferred revenue are carried at cost, which is considered to be representative of their respective fair values because of the short-term nature of these instruments. Our loan payable and derivative liabilities are carried at estimated fair value (See Note 6 and 7). | |
Derivative Financial Instruments | Derivative Financial Instruments |
We do not use derivative instruments to hedge exposures to cash flow or market or foreign currency risks. | |
We review the terms of the common stock, warrants and convertible debt we issue to determine whether there are derivative instruments, including embedded conversion options that are required to be bifurcated and accounted for separately as derivative financial instruments. In circumstances where the host instrument contains more than one embedded derivative instrument, including a conversion option, that is required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument. | |
Derivatives are initially recorded at fair value and are then revalued at each reporting date with changes in the fair value reported as non-operating income or expense. When the equity or convertible debt instruments contain embedded derivative instruments that are to be bifurcated and accounted for as liabilities, the total proceeds received are first allocated to the fair value of all the bifurcated derivative instruments. The remaining proceeds, if any, are then allocated to the host instruments themselves, usually resulting in those instruments being recorded at a discount from their face value. | |
The discount from the face value of any convertible debt, together with the stated interest on the instrument, is amortized over the life of the instrument through periodic charges to interest expense, using the effective interest method. | |
Accounts Reveivable | Accounts Receivable |
Trade accounts receivable are recorded net of allowances for doubtful accounts. Estimates of allowances for doubtful accounts are determined based on historical payment patterns and individual customer circumstances. The allowance for doubtful accounts was zero at July 31, 2013 and 2012. | |
Included in accounts receivable at July 31, 2012 is $273,000 billed to one customer for product shipped, where payment on agreed terms was not reasonably assured at the time of shipment. We recognized this amount, less our costs associated with the shipment, as deferred revenue on the consolidated balance sheet at July 31, 2012. During the year ended July 31, 2013 the customer authorized us to retake possession of this inventory, which was held by a third party warehouse on behalf of the customer, and as such, we reduced our accounts receivable by $273,000, increased inventory by $207,000, and reduced deferred revenue by $66,000. | |
Inventories | Inventories |
Inventories are stated at the lower of cost or net realizable value, and net of a valuation allowance for potential excess or obsolete material. Cost is determined using the average cost method. | |
Property, Plant and Equipment | Property, Plant and Equipment |
Property, plant and equipment is stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. The estimated useful lives of our property, plant, and equipment range from three to ten years. Capitalized costs associated with leasehold improvements are depreciated over the lesser of the useful life of the asset or the remaining life of the lease. Depreciation is generally included in selling, general and administrative expense. Depreciation related to manufacturing is systematically allocated to inventory produced, and expensed through cost of goods sold at the time inventory is sold. | |
Patents | Patents |
We have filed a number of patent applications with the United States Patent and Trademark Office and in foreign countries. Certain legal and related costs incurred in connection with pending patent applications have been capitalized. Costs related to successful patent applications are amortized over the lesser of the remaining useful life of the related technology or the remaining patent life, commencing on the date the patent is issued. Capitalized costs related to patent applications are expensed in the period in which a determination is made not to pursue such applications. | |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets |
In accordance with GAAP, if indicators of impairment exist, we assess the recoverability of the affected long-lived assets by determining whether the carrying value of such assets can be recovered through undiscounted future operating cash flows. If impairment is indicated, we measure the amount of such impairment by comparing the carrying value of the asset to the fair value of the asset and we record the impairment as a reduction in the carrying value of the related asset and a charge to operating results. Estimating the undiscounted future cash flows associated with long-lived assets requires judgment, and assumptions could differ materially from actual results. During the year ended July 31, 2013 we incurred $551,000 of expense relating to the impairment of long-lived assets (See Note 3). No impairment expense was recorded during the year ended July 31, 2012. | |
Revenue Recognition | Revenue Recognition |
We sell our products to distributors and end users. We record revenue when we sell products to our customers, rather than when our customers resell products to third parties. When we sell products to our customers, we reduce the balance of our inventory with a corresponding charge to cost of goods sold. We do not currently have any consignment sales. | |
Terms of our product sales are generally FOB shipping point. Product sales are recognized when delivery of the products has occurred (which is generally at the time of shipment), title has passed to the customer, the selling price is fixed or determinable, collectability is reasonably assured and we have no further obligations. Any amounts received prior to satisfying these revenue recognition criteria are recorded as deferred revenue. We record product sales net of discounts at the time of sale and report product sales net of such discounts. | |
We also license our products and technology to development and commercialization partners. Upfront product and technology license fees under multiple-element arrangements are deferred and recognized over the period of such services or performance, if such arrangements require on-going services or performance. Non-refundable amounts received for substantive milestones are recognized upon achievement of the milestone. Any amounts received prior to satisfying these revenue recognition criteria are recorded as deferred revenue. | |
Shipping and Handling Costs | Shipping and Handling Costs |
Shipping and handling costs incurred by us for product shipments are included in cost of goods sold and were minimal for the years ended July 31, 2013 and 2012. | |
Research and Development Costs | Research and Development Costs |
Research and development costs are expensed as incurred. | |
Share-Based Compensation | Share-Based Compensation |
We grant equity-based awards under share-based compensation plans. We estimate the fair value of share-based payment awards using the Black-Scholes option valuation model. This fair value is then amortized over the requisite service periods of the awards. The Black-Scholes option valuation model requires the input of subjective assumptions, including price volatility of the underlying stock, risk-free interest rate, dividend yield, and expected life of the option. Share-based compensation expense is based on awards ultimately expected to vest, and therefore is reduced by expected forfeitures. | |
Other Income (Expense) | Other Income (Expense) |
We record interest income, interest expense, change in derivative liabilities, as well as other non-operating transactions, as other income (expense) on our consolidated statements of operations. | |
Comprehensive Loss | Comprehensive Loss |
Comprehensive loss is defined as the change in equity during a period from transactions and other events and circumstances from non-owner sources, including unrealized gains and losses on marketable securities and foreign currency translation adjustments. For the years ended July 31, 2013 and 2012, our comprehensive loss consisted only of net loss. | |
Income Taxes | Income Taxes |
We recognize deferred tax assets and liabilities for temporary differences between the tax basis of assets and liabilities and the amounts at which they are carried in the financial statements based upon the enacted tax rates in effect for the year in which the differences are expected to reverse. A valuation allowance is established to reduce deferred tax assets to the amount expected to be realized. | |
Net Loss Per Share | Net Loss Per Share |
Basic net loss per common share is computed as net loss divided by the weighted average number of common shares outstanding for the period. Our diluted net loss per common share is the same as our basic net loss per common share because we incurred a net loss during each period presented, and the potentially dilutive securities from the assumed exercise of all outstanding stock options, warrants and convertible notes would have an antidilutive effect. As of July 31, 2013 and 2012, the number of shares issuable upon the exercise of stock options, warrants, and convertible notes and shares held in escrow was 1,877,876 and 1,757,283, respectively. | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements |
No recent accounting pronouncements or other authoritative guidance have been issued that are considered likely to have a material impact on our consolidated financial statements. | |
Balance_Sheet_Details_Tables
Balance Sheet Details (Tables) | 12 Months Ended | |||||
Jul. 31, 2013 | ||||||
Balance Sheet Details [Abstract] | ||||||
Schedule Of Inventories | ||||||
July 31, | ||||||
2013 | 2012 | |||||
Raw materials | $ | 70,000 | $ | 476,000 | ||
Finished goods | 295,000 | 178,000 | ||||
$ | 365,000 | $ | 654,000 | |||
Schedule Of Property Plant And Equipment | ||||||
July 31, | ||||||
2013 | 2012 | |||||
Computers and equipment | $ | 921,000 | $ | 909,000 | ||
Furniture and fixtures | 21,000 | 21,000 | ||||
Leasehold improvements | 622,000 | 622,000 | ||||
1,564,000 | 1,552,000 | |||||
Less accumulated depreciation | -1,418,000 | -1,295,000 | ||||
$ | 146,000 | $ | 257,000 | |||
Schedule of Patents | ||||||
July 31, | ||||||
2013 | 2012 | |||||
Patents | $ | 3,389,000 | $ | 3,773,000 | ||
Less accumulated amortization | -1,959,000 | -1,823,000 | ||||
$ | 1,430,000 | $ | 1,950,000 | |||
Promissory_Note_Tables
Promissory Note (Tables) | 12 Months Ended | ||
Jul. 31, 2013 | |||
Debt Disclosure [Abstract] | |||
Future Maturities Of The Promissory Note | |||
Fiscal year ending July 31, | |||
2014 | $ | 368,000 | |
2015 | $ | 599,000 | |
2016 | $ | 288,000 | |
Total | $ | 1,255,000 | |
Secured_Convertible_Note_Table
Secured Convertible Note (Tables) | 12 Months Ended | ||||||
Jul. 31, 2013 | |||||||
Debt Disclosure [Abstract] | |||||||
Schedule Of Outstanding Debentures | |||||||
July 31, | |||||||
2013 | 2012 | ||||||
Convertible notes | $ | 0 | $ | 1,282,000 | |||
Less unamortized discounts: | |||||||
Original issue discount | 0 | -56,000 | |||||
Detachable warrants discount | 0 | -238,000 | |||||
Conversion feature discount | 0 | -26,000 | |||||
Convertible notes, net of discounts | $ | 0 | $ | 962,000 | |||
Derivative_Liability_Tables
Derivative Liability (Tables) | 12 Months Ended | |||||
Jul. 31, 2013 | ||||||
Derivative Liability [Abstract] | ||||||
Schedule of Derivative Instruments [Table Text Block] | ||||||
July 31, 2013 | July 31, 2012 | |||||
Volatility | 144.5 | % | 85.0 | % | ||
Risk-free interest rate | 0.97 | % | 0.53 | % | ||
Dividend yield | 0.0 | % | 0.0 | % | ||
Expected life | 3.4 years | 0.42 - 4.4 years | ||||
Recovered_Sheet1
Fair Value Of Financial Instruments (Tables) | 12 Months Ended | ||||||||
Jul. 31, 2013 | |||||||||
Fair Value of Financial Instruments [Abstract] | |||||||||
Schedule Of Derivative Liabilities At Fair Value | |||||||||
Conversion | |||||||||
Warrant | Feature | ||||||||
Liability | Liability | Total | |||||||
Balance at July 31, 2011 | $ | 0 | $ | 0 | $ | 0 | |||
Issuances | 297,000 | 33,000 | 330,000 | ||||||
Adjustments to estimated fair value | -11,000 | 0 | -11,000 | ||||||
Balance at July 31, 2012 | $ | 286,000 | $ | 33,000 | $ | 319,000 | |||
Issuances | 0 | 0 | 0 | ||||||
Settlement of conversion feature liability | 0 | -33,000 | -33,000 | ||||||
Adjustments to estimated fair value | -235,000 | 0 | -235,000 | ||||||
Balance at July 31, 2013 | $ | 51,000 | $ | 0 | $ | 51,000 | |||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | ||
Jul. 31, 2013 | |||
Commitments and Contingencies Disclosure [Abstract] | |||
Schedule Of Future Minimum Lease Payments | |||
2014 | $ | 168,000 | |
2015 | 71,000 | ||
$ | 239,000 | ||
Stockholders_Equity_Tables
Stockholders' Equity (Tables) | 12 Months Ended | |||||||
Jul. 31, 2013 | ||||||||
Equity [Abstract] | ||||||||
Summary Of Warrant Activity | ||||||||
Shares | ||||||||
Outstanding at July 31, 2011 | 188,613 | |||||||
Issued | 238,699 | |||||||
Exercised | 0 | |||||||
Expired | 0 | |||||||
Outstanding at July 31, 2012 | 427,312 | |||||||
Issued | 1,080,187 | |||||||
Exercised | 0 | |||||||
Expired | -73,378 | |||||||
Outstanding at July 31, 2013 | 1,434,121 | |||||||
Summary Of Warrants Outstanding | ||||||||
Expiration | Exercise | |||||||
Date | Price | Shares | ||||||
5/7/14 | $ | 16.50 | 11,363 | |||||
5/27/14 | $ | 18.96 | 45,503 | |||||
5/27/14 | $ | 21.12 | 5,532 | |||||
3/3/15 | $ | 16.80 | 52,836 | |||||
1/13/16 | $ | 3.52 | 81,280 | |||||
6/26/16 | $ | 0.50 | 41,667 | |||||
7/10/16 | $ | 0.50 | 50,000 | |||||
10/17/16 | $ | 0.65 | 250,000 | |||||
10/24/16 | $ | 0.65 | 250,000 | |||||
12/14/16 | $ | 3.61 | 25,000 | |||||
12/24/16 | $ | 3.28 | 132,420 | |||||
9/17/17 | $ | 1.38 | 113,520 | |||||
1/24/18 | $ | 0.83 | 375,000 | |||||
1,434,121 | ||||||||
Summary Of Stock Option Activity | ||||||||
Weighted- | Aggregate | |||||||
Average | Intrinsic | |||||||
Shares | Exercise Price | Value | ||||||
Outstanding at July 31, 2011 | 337,526 | $ | 21.02 | $ | 30,000 | |||
Granted | 40,625 | $ | 6.68 | |||||
Exercised | 0 | $ | 0 | |||||
Cancelled | -29,688 | $ | 22.05 | |||||
Outstanding at July 31, 2012 | 348,463 | $ | 19.26 | $ | 0 | |||
Granted | 273,000 | $ | 0.83 | |||||
Exercised | 0 | $ | 0 | |||||
Cancelled | -177,708 | $ | 15.28 | |||||
Outstanding at July 31, 2013 | 443,755 | $ | 9.52 | $ | 0 | |||
Summary Of Restricted Stock Activity | ||||||||
Shares | ||||||||
Outstanding at July 31, 2011 | 4,986 | |||||||
Granted | 6,852 | |||||||
Vested | -4,986 | |||||||
Forfeited | 0 | |||||||
Outstanding at July 31, 2012 | 6,852 | |||||||
Granted | 0 | |||||||
Vested | -6,852 | |||||||
Forfeited | 0 | |||||||
Outstanding at July 31, 2013 | 0 | |||||||
ShareBased_Compensation_Tables
Share-Based Compensation (Tables) | 12 Months Ended | |||||
Jul. 31, 2013 | ||||||
Share-Based Compensation [Abstract] | ||||||
Schedule Of Weighted-Average Assumptions Used To Estimate Fair Value Of Option Grant | ||||||
For the years ended July 31, | ||||||
2013 | 2012 | |||||
Volatility | 134.80% | 85.41% | ||||
Risk-free interest rate | 0.85% | 0.75% | ||||
Dividend yield | 0.0% | 0.0% | ||||
Expected life | 5.06 years | 4 years | ||||
Schedule Of Share-Based Compensation Expense Related To Stock Options And Restricted Stock Awards | ||||||
For the years ended July 31, | ||||||
2013 | 2012 | |||||
Share-based compensation for employees and directors: | ||||||
Selling, general and administrative | $ | 564,000 | $ | 825,000 | ||
Research and development | 154,000 | 257,000 | ||||
718,000 | 1,082,000 | |||||
Share-based compensation for consultants: | ||||||
Selling, general and administrative | 0 | -5,000 | ||||
Research and development | 2,000 | 0 | ||||
2,000 | -5,000 | |||||
Total share-based compensation expense | $ | 720,000 | $ | 1,077,000 | ||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | |||||
Jul. 31, 2013 | ||||||
Income Taxes [Abstract] | ||||||
Deferred Tax Assets And Liabilities | ||||||
July 31, | ||||||
2013 | 2012 | |||||
Net operating loss carry-forward | $ | 22,482,000 | $ | 20,677,000 | ||
Stock options and warrants | 1,915,000 | 1,765,000 | ||||
Other temporary differences | 252,000 | 118,000 | ||||
Total deferred tax assets | 24,649,000 | 22,560,000 | ||||
Valuation allowance for deferred tax assets | -24,649,000 | -22,560,000 | ||||
Net deferred tax assets | $ | 0 | $ | 0 | ||
Reconciliation Of Effective Tax Rate, Percentage | ||||||
2013 | 2012 | |||||
Federal tax benefit at the expected statutory rate | 34.0 | % | 34.0 | % | ||
State income tax, net of federal tax benefit | 5.8 | 5.8 | ||||
Expired net operating loss carryforwards | -9.7 | -6.8 | ||||
Other | -2.9 | -3.1 | ||||
Valuation allowance | -27.2 | -29.9 | ||||
Income tax benefit - effective rate | 0.0 | % | 0.0 | % | ||
Organization_and_Businessy_Nar
Organization and Businessy (Narrative) (Details) (USD $) | 12 Months Ended | ||
Jul. 31, 2013 | Jul. 31, 2012 | Jul. 31, 2011 | |
item | security | ||
segment | |||
Organization and Business [Abstract] | |||
Number of Operating Segments | 1 | ||
Common Stock, Par or Stated Value Per Share | $0.01 | $0.01 | |
Stockholders' Equity Note, Stock Split, Conversion Ratio | 0.125 | 0.125 | |
Accumulated deficit | $70,171,000 | $62,500,000 | |
Cash and Cash Equivalents, at Carrying Value | 32,000 | 877,000 | 1,794,000 |
Liabilities, Current | 2,153,000 | 3,637,000 | |
Accounts Payable, Current | $1,134,000 | $1,946,000 |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Details) (USD $) | 12 Months Ended | |
Jul. 31, 2013 | Jul. 31, 2012 | |
Summary of Significant Accounting Policies [Abstract] | ||
Allowance for Doubtful Accounts Receivable | $0 | $0 |
Impairment of Long-Lived Assets Held-for-use | 551,000 | |
Incremental Common Shares Attributable to Call Options and Warrants | 1,877,876 | 1,757,283 |
Deferred Revenue | 273,000 | |
Reduction of deferred revenue | 66,000 | |
Inventories | ($149,000) | ($207,000) |
Balance_Sheet_Details_Schedule
Balance Sheet Details (Schedule Of Inventory) (Details) (USD $) | 12 Months Ended | |
Jul. 31, 2013 | Jul. 31, 2012 | |
Balance Sheet Details [Abstract] | ||
Raw materials | $70,000 | $476,000 |
Finished goods | 295,000 | 178,000 |
Inventories, net | 365,000 | 654,000 |
Inventory reserve | 347,000 | 0 |
Sale of silver held in inventory | 58,000 | |
Book value of silver sold | 40,000 | |
Gain on sale of silver | $18,000 |
Balance_Sheet_Details_Schedule1
Balance Sheet Details (Schedule Of Property Plant And Equipment) (Details) (USD $) | 12 Months Ended | |
Jul. 31, 2013 | Jul. 31, 2012 | |
Balance Sheet Details [Abstract] | ||
Computers and equipment | $921,000 | $909,000 |
Furniture and fixtures | 21,000 | 21,000 |
Leasehold improvements | 622,000 | 622,000 |
Property, Plant and Equipment, Gross, Total | 1,564,000 | 1,552,000 |
Less accumulated depreciation | -1,418,000 | -1,295,000 |
Property, Plant and Equipment, Net, Total | 146,000 | 257,000 |
Depreciation | $123,000 | $179,000 |
Balance_Sheet_Details_Schedule2
Balance Sheet Details (Schedule of Patents) (Details) (USD $) | 12 Months Ended | |
Jul. 31, 2013 | Jul. 31, 2012 | |
Y | ||
Balance Sheet Details [Abstract] | ||
Patents | $3,389,000 | $3,773,000 |
Less accumulated amortization | -1,959,000 | -1,823,000 |
Patents, net | 1,430,000 | 1,950,000 |
Patent Amortization Expense | 188,000 | 206,000 |
Weighted Average Remaining Amortization Period For Patents | 10 | |
Future Amortization Of Intangible Assets, Estimate | 152,000 | |
Impairment of patents | $551,000 | $0 |
Promissory_Note_Narrative_I_De
Promissory Note (Narrative I) (Details) (USD $) | 12 Months Ended |
Jul. 31, 2013 | |
Debt Instrument [Line Items] | |
Accounts payable waived | $1,519,000 |
Debt Instrument, Frequency of Periodic Payment | monthly |
Debt Instrument, Date of First Required Payment | 28-Feb-14 |
Debt Instrument, Maturity Date | 28-Feb-16 |
Notes Payable Other Payables [Member] | |
Debt Instrument [Line Items] | |
Debt Instrument, Face Amount | 1,125,000 |
Interest rate | 7.50% |
Interest rate if in default | 10.00% |
Debt Instrument, Periodic Payment, Principal | $47,000 |
Promissory_Note_Narrative_II_D
Promissory Note (Narrative II) (Details) (USD $) | 1 Months Ended | 12 Months Ended | |||
Apr. 17, 2013 | Apr. 24, 2013 | Jun. 29, 2012 | Jul. 31, 2013 | Jul. 31, 2012 | |
Class of Warrant or Right [Line Items] | |||||
Exercise Price | $3.52 | ||||
Dividend yield | 0.00% | 0.00% | 0.00% | ||
Volatility rate | 140.63% | 140.75% | 82.44% | 134.80% | 85.41% |
Risk-free interest rate | 0.24% | 0.85% | 0.75% | ||
Expected life | 5 years 22 days | 4 years | |||
Troubled debt restructuring loss | $25,000 | $0 | |||
Payment on note payable | 43,000 | 0 | |||
Accrued interest | 174,000 | ||||
Morrison And Foerster Llp [Member] | |||||
Class of Warrant or Right [Line Items] | |||||
Number of warrants to purchase common stock | 375,000 | ||||
Exercise Price | $0.83 | ||||
Fair value of warrants | $245,000 | ||||
Dividend yield | 0.00% | ||||
Volatility rate | 134.00% | ||||
Risk-free interest rate | 0.35% | ||||
Expected life | 5 years |
Promissory_Note_Future_Maturit
Promissory Note (Future Maturities Of The Promissory Note) (Details) (USD $) | Jul. 31, 2013 |
Debt Disclosure [Abstract] | |
2014 | $368,000 |
2015 | 599,000 |
2016 | 288,000 |
Total | $1,255,000 |
Secured_Convertible_Note_Narra
Secured Convertible Note (Narrative) (Details) (USD $) | 11 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | ||||||
Jun. 26, 2012 | Jul. 31, 2013 | Jul. 26, 2012 | Jul. 31, 2012 | Jul. 31, 2013 | Jul. 31, 2012 | Jul. 10, 2012 | Jul. 31, 2013 | Jul. 31, 2012 | Apr. 24, 2013 | Jul. 10, 2013 | Jul. 31, 2012 | |
item | Notes Payable Other Payables [Member] | Convertible Debt [Member] | Convertible Debt [Member] | Bridge Loan [Member] | Bridge Loan [Member] | Private Placement [Member] | Private Placement [Member] | Warrant Liability [Member] | ||||
loan | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Proceeds from Convertible Debt | $1,200,000 | |||||||||||
Number Of Lenders | 9 | |||||||||||
Convertible debt principal | 1,125,000 | 1,333,000 | ||||||||||
Notes interest rate | 7.50% | 10.00% | ||||||||||
Debt Issuance Secured Convertible Notes Issued Coupon Rate | 0.00% | |||||||||||
Debt Issuance Secured Convertible Notes Issued Effective Late Fee | 10.00% | |||||||||||
Short-term Debt, Interest Rate Increase | 18.00% | |||||||||||
Number of days after default higher interest rate is effective | 5 days | |||||||||||
Debt Instrument, Fair Value | 0 | 1,282,000 | 1,270,000 | |||||||||
Imputed interest | 174,000 | 63,000 | ||||||||||
Common Stock, Shares, Held In Escrow For Repayment Of Note | 575,000 | |||||||||||
Common Stock Shares Held In Escrow For Repayment Of Note, Post Amendment | 500,000 | |||||||||||
Debt Instrument, Convertible, Conversion Price | $3.28 | |||||||||||
Debt Instrument, Convertible, Beneficial Conversion Feature | 33,000 | 33,000 | ||||||||||
Common Stock Shares Issued To Lenders | 54,878 | |||||||||||
Value Of Common Stock Shares Issued To Lenders | 166,000 | |||||||||||
Warrant Exercise Price, Bridge Loan Warrants | $3.28 | |||||||||||
Common Stock Warrants Issued To Placement Agent | 4,374 | |||||||||||
Value Of Common Stock Warrants Issued To Lenders And Placement Agent | 51,000 | 286,000 | 297,000 | |||||||||
Total, Common Stock Warrants Issued To Lenders And Placement Agent | 132,420 | |||||||||||
Amortization of Debt Discount (Premium) | 371,000 | 91,000 | ||||||||||
Bridge Loan Deferred Financing Fees | 267,000 | |||||||||||
Fair Value Of Common Stock Issued For Placement Agent | 2,000 | |||||||||||
Common Stock Issued For Placement Agent | 625 | |||||||||||
Amortization of deferred financing costs | 215,000 | 53,000 | ||||||||||
Convertible debt interest expense | 371,000 | |||||||||||
Amortization Of Stock Issued With Bridge Loan | $215,000 | |||||||||||
Common Stock Warrants Issued To Lenders | 128,046 | |||||||||||
Warrant Term | 3 years | 3 years | 4 years |
Secured_Convertible_Note_Sched
Secured Convertible Note (Schedule Of Outstanding Debentures) (Details) (USD $) | Jul. 31, 2013 | Jul. 31, 2012 |
Debt Disclosure [Abstract] | ||
Convertible notes | $0 | $1,282,000 |
Original issue discount | 0 | -56,000 |
Detachable warrants discount | 0 | -238,000 |
Conversion feature discount | 0 | -26,000 |
Convertible notes, net of discounts | $0 | $962,000 |
Derivative_Liability_Narrative
Derivative Liability (Narrative) (Details) (USD $) | 11 Months Ended | 12 Months Ended | ||
Jun. 26, 2012 | Jul. 31, 2013 | Jul. 26, 2012 | Jul. 31, 2012 | |
Derivative Liability [Line Items] | ||||
Value Of Common Stock Warrants Issued To Lenders And Placement Agent | $51,000 | $286,000 | $297,000 | |
Derivative, Gain (Loss) on Derivative, Net | 268,000 | 11,000 | ||
Debt Instrument, Convertible, Conversion Price | $3.28 | |||
Debt Instrument, Convertible, Beneficial Conversion Feature | 33,000 | 33,000 | ||
Adjustments To The Fair Value Of Derivatives | -235,000 | -11,000 | ||
Warrant Liability [Member] | ||||
Derivative Liability [Line Items] | ||||
Adjustments To The Fair Value Of Derivatives | ($235,000) | ($11,000) |
Derivative_Liability_Schedule_
Derivative Liability (Schedule Of Fair Value) (Details) | 11 Months Ended | 12 Months Ended | |||
Jun. 26, 2012 | Jul. 31, 2013 | Jul. 31, 2012 | Jul. 31, 2013 | Jul. 31, 2012 | |
Maximum [Member] | Minimum [Member] | Minimum [Member] | |||
Derivative Liability [Line Items] | |||||
Volatility | 144.50% | 85.00% | |||
Risk-free interest rate | 0.97% | 0.53% | |||
Dividend yield | 0.00% | 0.00% | |||
Expected life | 4 years 4 months 24 days | 3 years 4 months 24 days | 5 months 1 day |
Fair_Value_of_Financial_Instru1
Fair Value of Financial Instruments (Details) (USD $) | 12 Months Ended | |
Jul. 31, 2013 | Jul. 31, 2012 | |
Derivative Liabilities At Fair Value [Line Items] | ||
Derivative Liabilities, Beginning Balance | $319,000 | $0 |
Derivative Issuances | 0 | 330,000 |
Settlement of conversion feature liability | -33,000 | |
Adjustments To The Fair Value Of Derivatives | -235,000 | -11,000 |
Derivative Liabilities, Ending Balance | 51,000 | 319,000 |
Warrant Liability [Member] | ||
Derivative Liabilities At Fair Value [Line Items] | ||
Derivative Liabilities, Beginning Balance | 286,000 | 0 |
Derivative Issuances | 0 | 297,000 |
Settlement of conversion feature liability | 0 | |
Adjustments To The Fair Value Of Derivatives | -235,000 | -11,000 |
Derivative Liabilities, Ending Balance | 51,000 | 286,000 |
Conversion Feature Liability [Member] | ||
Derivative Liabilities At Fair Value [Line Items] | ||
Derivative Liabilities, Beginning Balance | 33,000 | 0 |
Derivative Issuances | 0 | 33,000 |
Settlement of conversion feature liability | -33,000 | |
Adjustments To The Fair Value Of Derivatives | 0 | 0 |
Derivative Liabilities, Ending Balance | $0 | $33,000 |
Recovered_Sheet2
Commitments And Contingencies (Narrative) (Details) (USD $) | 12 Months Ended | |
Jul. 31, 2013 | Jul. 31, 2012 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Rent expense | $286,000 | $275,000 |
Commitments_And_Contingencies_1
Commitments And Contingencies (Schedule Of Future Minimum Lease Payments) (Details) (USD $) | Jul. 31, 2013 |
Commitments and Contingencies Disclosure [Abstract] | |
2014 | $168,000 |
2015 | 71,000 |
Capital Leases, Future Minimum Payments Due, Total | $239,000 |
Stockholders_Equity_Narrative_
Stockholders' Equity (Narrative) (Details) (USD $) | 1 Months Ended | 11 Months Ended | 12 Months Ended | 0 Months Ended | 1 Months Ended | 12 Months Ended | 12 Months Ended | 0 Months Ended | 1 Months Ended | 12 Months Ended | 12 Months Ended | |||||||||||||||||||||||||||
23-May-13 | Apr. 17, 2013 | Apr. 24, 2013 | Jun. 29, 2012 | Jun. 26, 2012 | Jul. 31, 2013 | Jul. 26, 2012 | Jul. 31, 2012 | Sep. 17, 2012 | Aug. 15, 2012 | Aug. 14, 2012 | Apr. 10, 2012 | Oct. 31, 2011 | Jul. 31, 2013 | Jul. 31, 2012 | Jul. 31, 2012 | Dec. 15, 2011 | Dec. 14, 2011 | Jul. 31, 2012 | Jul. 31, 2013 | Jul. 31, 2013 | Jul. 31, 2012 | Jul. 31, 2012 | Jul. 31, 2013 | Jul. 31, 2012 | Jul. 31, 2013 | Jul. 31, 2012 | Jul. 31, 2013 | Jul. 31, 2012 | Jul. 10, 2013 | Jun. 26, 2013 | Apr. 24, 2013 | Jul. 10, 2013 | Jul. 31, 2013 | Apr. 17, 2013 | Jul. 31, 2013 | Jul. 31, 2012 | Jul. 31, 2013 | |
item | security | Investor Relations [Member] | Investor Relations [Member] | Investor Relations [Member] | Investor Relations [Member] | Lincoln Park Capital Fund, LLC [Member] | Lincoln Park Capital Fund, LLC [Member] | Lincoln Park Capital Fund, LLC [Member] | Warrant [Member] | Bridge Loan Financing [Member] | Deferred Compensation, Share-based Payments [Member] | Deferred Compensation, Share-based Payments [Member] | Share Offering Agreement [Member] | Common Stock [Member] | Common Stock [Member] | Paid-in Capital [Member] | Paid-in Capital [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Private Placement [Member] | Private Placement [Member] | Private Placement [Member] | Private Placement [Member] | Private Placement [Member] | Private Placement [Member] | Warrant Liability [Member] | Warrant Liability [Member] | Maximum [Member] | ||||||||||
contract | ||||||||||||||||||||||||||||||||||||||
Stockholders Equity Note [Line Items] | ||||||||||||||||||||||||||||||||||||||
Stock split, conversion ratio | 0.125 | 0.125 | ||||||||||||||||||||||||||||||||||||
Common stock, shares outstanding | 12,569,503 | 6,644,555 | 7,200,000 | 57,800,000 | ||||||||||||||||||||||||||||||||||
Common stock, par value | $0.01 | $0.01 | ||||||||||||||||||||||||||||||||||||
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | ||||||||||||||||||||||||||||||||||||
Preferred stock, par value | $0.01 | $0.01 | ||||||||||||||||||||||||||||||||||||
Preferred stock, shares issued | 0 | 0 | ||||||||||||||||||||||||||||||||||||
Preferred stock, shares oustanding | 0 | 0 | ||||||||||||||||||||||||||||||||||||
Common Stock,Authorized | 100,000,000 | 100,000,000 | ||||||||||||||||||||||||||||||||||||
Stock Available For Issuance Under Plan | 127,059 | |||||||||||||||||||||||||||||||||||||
Aggregate number of shares for public offering | 4,341,615 | |||||||||||||||||||||||||||||||||||||
Common stock at a price per share | $1.10 | $2 | $0.40 | $0.30 | $0.40 | |||||||||||||||||||||||||||||||||
Gross proceeds from issuance of common stock | $4,776,000 | $400,000 | ||||||||||||||||||||||||||||||||||||
Transaction costs from issued common stock | 549,000 | 16,000 | ||||||||||||||||||||||||||||||||||||
Net proceeds from the sale of common stock | 4,666,000 | 3,818,000 | 384,000 | 4,227,000 | ||||||||||||||||||||||||||||||||||
Repayment of indebtedness | 1,333,000 | |||||||||||||||||||||||||||||||||||||
Stock Issued During Period, Shares, Issued for Services | 150,000 | 20,000 | 18,750 | 250,000 | 400,000 | 38,750 | ||||||||||||||||||||||||||||||||
Stock Issued During Period, Value, Issued for Services | 71,000 | 231,000 | 142,000 | 45,000 | 97,000 | 160,000 | 4,000 | 0 | 227,000 | 142,000 | 0 | 0 | ||||||||||||||||||||||||||
Common Stock,Issued | 12,569,503 | 6,644,555 | 19,613 | 1,000,000 | 183,333 | |||||||||||||||||||||||||||||||||
Warrants to purchase common stock shares | 81,280 | 500,000 | 91,667 | |||||||||||||||||||||||||||||||||||
Warrant Term | 3 years | 3 years | 4 years | |||||||||||||||||||||||||||||||||||
Investment Warrants, Exercise Price | $3.52 | $0.65 | $0.50 | $3.61 | ||||||||||||||||||||||||||||||||||
Proceeds from Warrant Exercises | 119,000 | 100,000 | 500,000 | 13,000 | 13,000 | 55,000 | ||||||||||||||||||||||||||||||||
Volatility | 140.63% | 140.75% | 82.44% | 134.80% | 85.41% | 82.95% | 146.89% | 146.80% | ||||||||||||||||||||||||||||||
Warrant, Interest Rate | 0.44% | 0.43% | 0.73% | 0.69% | ||||||||||||||||||||||||||||||||||
Warrant, Dividend yield | 0.00% | 0.00% | 0.00% | 0.00% | ||||||||||||||||||||||||||||||||||
Warrants Issued Per Day | 100 | |||||||||||||||||||||||||||||||||||||
Maximum Possible Number Of Warrants Issued On Incomplete Filing | 18,000 | |||||||||||||||||||||||||||||||||||||
Additional Warrants Shares Received | 5,300 | |||||||||||||||||||||||||||||||||||||
Dividend yield | 0.00% | 0.00% | 0.00% | 0.00% | ||||||||||||||||||||||||||||||||||
Interest Rate | 0.24% | 0.85% | 0.75% | 0.85% | ||||||||||||||||||||||||||||||||||
Aggregate Offering Price Of Common Stock, Authorized | 7,000,000 | |||||||||||||||||||||||||||||||||||||
Shares Sold By Arrangement With Third Party | 167,136 | 718,463 | ||||||||||||||||||||||||||||||||||||
Proceeds from Other Equity | 949,000 | 1,719,000 | ||||||||||||||||||||||||||||||||||||
Amortization Of Capitalized Expense Shares Issued For Services | 24,000 | 73,000 | ||||||||||||||||||||||||||||||||||||
Purchase Agreement With Third Party | 2,500,000 | 7,500,000 | ||||||||||||||||||||||||||||||||||||
Restricted Stock, Shares Issued, Third Party Agreement | 58,838 | |||||||||||||||||||||||||||||||||||||
Fees Associated With The Third Party Offering | 122,000 | 128,000 | ||||||||||||||||||||||||||||||||||||
Fair Value Associated With Third Party Offering | 296,000 | |||||||||||||||||||||||||||||||||||||
Common Stock, Shares, Issued To Investors | 78,451 | |||||||||||||||||||||||||||||||||||||
Deferred Offering Costs Expense Recognized | 424,000 | |||||||||||||||||||||||||||||||||||||
Unamortized Fair Value Of Shares Issued | 241,000 | |||||||||||||||||||||||||||||||||||||
Cash Fee Associated With Third Party Offering, Percentage Of Offering | 6.00% | |||||||||||||||||||||||||||||||||||||
Common Stock Shares To Be Purchase By Third Party In Warrant | 25,000 | |||||||||||||||||||||||||||||||||||||
Warrant Exercise Price Calculation Percentage | 110.00% | |||||||||||||||||||||||||||||||||||||
Fair Value Associated With Warrant | 80,000 | 53,000 | ||||||||||||||||||||||||||||||||||||
Stock Issued During Period, Shares, Issued for Cash | 325,125 | 250,000 | ||||||||||||||||||||||||||||||||||||
Stock Issued During Period Expense Issued For Services | 45,000 | |||||||||||||||||||||||||||||||||||||
Common Stock Warrants Issued To Lenders | 128,046 | |||||||||||||||||||||||||||||||||||||
Warrant Exercise Price, Bridge Loan Warrants | $3.28 | |||||||||||||||||||||||||||||||||||||
Value Of Common Stock Warrants Issued To Lenders And Placement Agent | 51,000 | 286,000 | 297,000 | |||||||||||||||||||||||||||||||||||
Proceeds from (Payments for) Other Financing Activities | $650,000 | |||||||||||||||||||||||||||||||||||||
Common Stock Issued For Underwriting Services | 625 | |||||||||||||||||||||||||||||||||||||
Weighted average remaining contractual term | 6 years 8 months 12 days | 5 years 10 months 24 days | ||||||||||||||||||||||||||||||||||||
Options exercisable, weighted-average exercise price | $12.07 | |||||||||||||||||||||||||||||||||||||
Options Exercisable Outstanding | 307,665 | |||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | $0.69 | $4.11 | ||||||||||||||||||||||||||||||||||||
Common Stock Warrants Issued To Placement Agent | 4,374 | |||||||||||||||||||||||||||||||||||||
Expected life | 5 years 22 days | 4 years | 10 years |
Stockholders_Equity_Summary_Of
Stockholders' Equity (Summary Of Warrant Activity) (Details) (Warrant [Member], USD $) | 12 Months Ended | |
Jul. 31, 2013 | Jul. 31, 2012 | |
Warrant [Member] | ||
Class of Warrant or Right [Line Items] | ||
Outstanding, Beginning Balance | $427,312 | $188,613 |
Issued | 1,080,187 | 238,699 |
Exercised | 0 | 0 |
Expired | -73,378 | 0 |
Outstanding, Ending Balance | $1,434,121 | $427,312 |
Stockholders_Equity_Summary_Of1
Stockholders' Equity (Summary Of Warrants Outstanding) (Details) (USD $) | 1 Months Ended | 12 Months Ended | |||||||||||||
Jun. 29, 2012 | Jul. 31, 2013 | Jul. 31, 2013 | Jul. 31, 2013 | Jul. 31, 2013 | Jul. 31, 2013 | Jul. 31, 2013 | Jul. 31, 2013 | Jul. 31, 2013 | Jul. 31, 2013 | Jul. 31, 2013 | Jul. 31, 2013 | Jul. 31, 2013 | Jul. 31, 2013 | Jul. 31, 2013 | |
Warrant [Member] | Warrant [Member] | Warrant [Member] | Warrant [Member] | Warrant [Member] | Warrant [Member] | Warrant [Member] | Warrant [Member] | Warrant [Member] | Warrant [Member] | Warrant [Member] | Warrant [Member] | Warrant [Member] | Warrant [Member] | ||
05/07/14 [Member] | 05/27/14 [Member] | 05/27/2014 [Member] | 03/03/15 [Member] | 01/13/16 [Member] | 06/26/16 [Member] | 07/10/16 [Member] | 10/17/16 [Member] | 10/24/16 [Member] | 12/14/16 [Member] | 12/24/16 [Member] | 09/17/17 [Member] | 01/24/18 [Member] | |||
Class of Warrant or Right [Line Items] | |||||||||||||||
Exercise Price | $3.52 | $16.50 | $18.96 | $21.12 | $16.80 | $3.52 | $0.50 | $0.50 | $0.65 | $0.65 | $3.61 | $3.28 | $1.38 | $0.83 | |
Class of Warrant or Right, Outstanding | 1,434,121 | 11,363 | 45,503 | 5,532 | 52,836 | 81,280 | 41,667 | 50,000 | 250,000 | 250,000 | 25,000 | 132,420 | 113,520 | 375,000 |
Stockholders_Equity_Summary_Of2
Stockholders' Equity (Summary Of Stock Option Activity) (Details) (USD $) | 12 Months Ended | ||
Jul. 31, 2013 | Jul. 31, 2012 | Jul. 31, 2011 | |
Stockholders' Equity Note [Abstract] | |||
Outstanding, Shares, Beginning Balance | 348,463 | 337,526 | |
Granted | 273,000 | 40,625 | |
Exercised | $0 | $0 | |
Cancelled | -177,708 | -29,688 | |
Outstanding, Shares, Ending Balace | 443,755 | 348,463 | |
Outstanding, Weighted Average Exercise Price, Beginning Balance | $19.26 | $21.02 | |
Weighted Average Exercise Price, Granted | $0.83 | $6.68 | |
Weighted Average Exercise Price, Exercised | $0 | $0 | |
Weighted Average Exercise Price, Cancelled | $15.28 | $22.05 | |
Outstanding, Weighted Average Exercise Price, Ending Balance | $9.52 | $19.26 | |
Aggregate Intrinsic Value, Outstanding | $0 | $0 | $30,000 |
Stockholders_Equity_Summary_Of3
Stockholders' Equity (Summary Of Restricted Stock Activity) (Details) (Restricted Stock [Member]) | 12 Months Ended | |
Jul. 31, 2013 | Jul. 31, 2012 | |
Restricted Stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Outstanding, Shares, Beginning Balance | 6,852 | 4,986 |
Granted | 0 | 6,852 |
Vested | -6,852 | -4,986 |
Forfeited | 0 | 0 |
Outstanding, Shares, Ending Balace | 0 | 6,852 |
ShareBased_Compensation_Narrat
Share-Based Compensation (Narrative) (Details) (Unvested Options [Member], USD $) | 12 Months Ended |
Jul. 31, 2013 | |
Unvested Options [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized non-cash compensation cost | $356,000 |
Recognized weighted average period | 6 months 11 days |
ShareBased_Compensation_Schedu
Share-Based Compensation (Schedule Of Weighted-Average Assumptions Used To Estimate Fair Value Of Option Grant) (Details) | 1 Months Ended | 12 Months Ended | |||
Apr. 17, 2013 | Apr. 24, 2013 | Jun. 29, 2012 | Jul. 31, 2013 | Jul. 31, 2012 | |
Share-Based Compensation [Abstract] | |||||
Volatility | 140.63% | 140.75% | 82.44% | 134.80% | 85.41% |
Interest Rate | 0.24% | 0.85% | 0.75% | ||
Dividend yield | 0.00% | 0.00% | 0.00% | ||
Expected life (years) | 5 years 22 days | 4 years |
ShareBased_Compensation_Schedu1
Share-Based Compensation (Schedule Of Share-Based Compensation Expense Related To Stock Options And Restricted Stock Awards) (Details) (USD $) | 12 Months Ended | |
Jul. 31, 2013 | Jul. 31, 2012 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total share-based compensation expense | $720,000 | $1,077,000 |
Employees And Directors [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total share-based compensation expense | 718,000 | 1,082,000 |
Employees And Directors [Member] | Selling, General And Administrative [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total share-based compensation expense | 564,000 | 825,000 |
Employees And Directors [Member] | Research And Development [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total share-based compensation expense | 154,000 | 257,000 |
Consultants [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total share-based compensation expense | 2,000 | -5,000 |
Consultants [Member] | Selling, General And Administrative [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total share-based compensation expense | 0 | -5,000 |
Consultants [Member] | Research And Development [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total share-based compensation expense | $2,000 | $0 |
Sales_Concentration_Details
Sales Concentration (Details) (USD $) | 12 Months Ended | |
Jul. 31, 2013 | Jul. 31, 2012 | |
Concentration Risk [Line Items] | ||
Sales Revenue, Goods, Net | $820,000 | $812,000 |
Concentration Risk, Geographic | The geographic breakdown of net product sales was as follows: 86% U.S. and 14% foreign. | The geographic breakdown of net product sales was as follows: 92% U.S. and 8% foreign. |
Sales Revenue, Goods, Net [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Customer | three | two |
Concentration Risk, Percentage | 69.00% | 67.00% |
U.S. Concentration Risk, Percentage | 86.00% | 92.00% |
Foreign Concentration Risk Percentage | 14.00% | 8.00% |
Maximum [Member] | Sales Revenue, Goods, Net [Member] | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 10.00% | 10.00% |
Income_Taxes_Narrative_Details
Income Taxes (Narrative) (Details) (USD $) | 12 Months Ended | |
Jul. 31, 2013 | Jul. 31, 2012 | |
Income Tax Disclosure [Line Items] | ||
Current Income Tax Expense (Benefit) | $1,600 | $5,000 |
Tax Credit Carryforward, Deferred Tax Asset | 17,300,000 | |
Valuation Allowance, Deferred Tax Asset, Change in Amount | 2,089,000 | |
Transaction period | 3 years | |
Ownership Change Percent Points Of Outstanding Stock | 50.00% | |
Internal Revenue Service (IRS) [Member] | ||
Income Tax Disclosure [Line Items] | ||
Operating Loss Carryforwards | 75,200,000 | 70,700,000 |
Operating Loss Carryforwards, Expiration Dates | 31-Jul-33 | |
State and Local Jurisdiction [Member] | ||
Income Tax Disclosure [Line Items] | ||
Operating Loss Carryforwards | $64,900,000 | $60,000,000 |
Maximum [Member] | State and Local Jurisdiction [Member] | ||
Income Tax Disclosure [Line Items] | ||
Operating Loss Carryforwards, Expiration Dates | 31-Jul-32 | |
Minimum [Member] | State and Local Jurisdiction [Member] | ||
Income Tax Disclosure [Line Items] | ||
Operating Loss Carryforwards, Expiration Dates | 31-Jul-14 |
Income_Taxes_Deferred_Tax_Asse
Income Taxes (Deferred Tax Assets And Liabilities) (Details) (USD $) | Jul. 31, 2013 | Jul. 31, 2012 |
Income Taxes [Abstract] | ||
Net operating loss carry-forward | $22,482,000 | $20,677,000 |
Stock options and warrants | 1,915,000 | 1,765,000 |
Other temporary differences | 252,000 | 118,000 |
Total deferred tax assets | 24,649,000 | 22,560,000 |
Valuation allowance for deferred tax assets | -24,649,000 | -22,560,000 |
Net deferred tax assets | $0 | $0 |
Income_Taxes_Reconciliation_Of
Income Taxes (Reconciliation Of Effective Tax Rate, Percentage) (Details) | 12 Months Ended | |
Jul. 31, 2013 | Jul. 31, 2012 | |
Components of Income Tax Expense (Benefit), Continuing Operations [Abstract] | ||
Federal tax benefit at the expected statutory rate | 34.00% | 34.00% |
State income tax, net of federal tax benefit | 5.80% | 5.80% |
Expired net operating loss carryforwards | -9.70% | -6.80% |
Other | -2.90% | -3.10% |
Valuation allowance | 27.20% | 29.90% |
Income tax benefit - effective rate | 0.00% | 0.00% |
Subsequent_Events_Details
Subsequent Events (Details) (USD $) | 1 Months Ended | 12 Months Ended | 0 Months Ended | 1 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | ||||||||||||||||||||||||||||||||||||
Apr. 17, 2013 | Apr. 24, 2013 | Jun. 29, 2012 | Jul. 31, 2013 | Jul. 31, 2012 | Sep. 17, 2012 | Jul. 10, 2013 | Jun. 26, 2013 | Apr. 24, 2013 | Jul. 10, 2013 | Jul. 31, 2013 | Apr. 17, 2013 | Jul. 31, 2013 | Jul. 31, 2013 | Jul. 31, 2013 | Jul. 31, 2013 | Jul. 31, 2013 | Jul. 31, 2013 | Jul. 31, 2013 | Jul. 31, 2013 | Jul. 31, 2013 | Jul. 31, 2013 | Jul. 31, 2013 | Jul. 31, 2013 | Jul. 31, 2013 | Jul. 31, 2013 | Jul. 31, 2013 | Jul. 31, 2013 | Jul. 31, 2013 | Jul. 31, 2013 | Jul. 31, 2013 | Jul. 31, 2013 | Jul. 31, 2013 | Jul. 31, 2013 | Jul. 31, 2013 | Jul. 31, 2013 | Jul. 31, 2013 | Jul. 31, 2013 | Jul. 31, 2013 | Jul. 31, 2013 | Jul. 31, 2013 | Jul. 31, 2013 | Jul. 31, 2013 | |
Private Placement [Member] | Private Placement [Member] | Private Placement [Member] | Private Placement [Member] | Private Placement [Member] | Private Placement [Member] | Henery R. Lambert [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Reorginization Services [Member] | Investor Relations [Member] | |||||||
Restricted Stock Units (RSUs) [Member] | Private Placement [Member] | Compensation Committee [Member] | Audit Committee [Member] | Dave Pfanzelter [Member] | Dave Pfanzelter [Member] | Dave Pfanzelter [Member] | Dave Pfanzelter [Member] | Dave Pfanzelter [Member] | Wulff Services Inc. [Member] | Pillar Marketing Group, Inc. [Member] | Gary D. Cohee [Member] | Gary D. Cohee [Member] | Gary D. Cohee [Member] | Gary D. Cohee [Member] | Director [Member] | Compensation Committee Chair [Member] | Audit Committee Chair [Member] | Dennis Brovarone [Member] | Donna Singer [Member] | Michael L. Krall [Member] | Peter Wulff [Member] | Peter Wulff [Member] | Peter Wulff [Member] | Peter Wulff [Member] | Peter Wulff [Member] | Henery R. Lambert [Member] | Henery R. Lambert [Member] | Subsequent Event [Member] | Subsequent Event [Member] | ||||||||||||||
September 10, 2014 [Member] | February 15, 2016 [Member] | February 15, 2015 [Member] | February 15, 2014 [Member] | Restricted Stock Units (RSUs) [Member] | Restricted Stock Units (RSUs) [Member] | Restricted Stock Units (RSUs) [Member] | Restricted Stock Units (RSUs) [Member] | Restricted Stock Units (RSUs) [Member] | Restricted Stock Units (RSUs) [Member] | Restricted Stock Units (RSUs) [Member] | Restricted Stock Units (RSUs) [Member] | Restricted Stock Units (RSUs) [Member] | Pillar Marketing Group, Inc. [Member] | Bibicoff & McInnis [Member] | |||||||||||||||||||||||||||||
January 2015 [Member] | January 2016 [Member] | March 15, 2014 [Member] | March 15, 2015 [Member] | March 15, 2016 [Member] | |||||||||||||||||||||||||||||||||||||||
Subsequent Event [Line Items] | |||||||||||||||||||||||||||||||||||||||||||
Separation Payment | $91,332 | $45,000 | $150,000 | ||||||||||||||||||||||||||||||||||||||||
Cash Severance | 204,000 | 540,000 | |||||||||||||||||||||||||||||||||||||||||
Cash Severance Payment Period | 12 months | 18 months | |||||||||||||||||||||||||||||||||||||||||
Common stock, issued | 12,569,503 | 6,644,555 | 1,000,000 | 183,333 | 250,000 | 250,000 | 305,833 | 200,000 | 300,000 | 850,000 | 300,000 | 300,000 | |||||||||||||||||||||||||||||||
Common Stock, Value, Issued | 126,000 | 67,000 | 175,000 | 175,000 | 257,750 | 210,000 | 595,000 | 210,000 | |||||||||||||||||||||||||||||||||||
Medical and insurance costs | 17,819 | 19,933 | |||||||||||||||||||||||||||||||||||||||||
Medical and insurance coverage period | 12 months | 18 months | |||||||||||||||||||||||||||||||||||||||||
Sale of stock, number of shares issued | 5,500,000 | 2,441,270 | |||||||||||||||||||||||||||||||||||||||||
Common stock, net proceeds | 4,666,000 | 3,818,000 | 384,000 | 4,227,000 | 1,100,000 | 1,830,000 | |||||||||||||||||||||||||||||||||||||
Common stock at a price per share | $1.10 | $0.40 | $0.30 | $0.40 | $0.20 | $0.75 | |||||||||||||||||||||||||||||||||||||
Service Agreement Period | 2 years | ||||||||||||||||||||||||||||||||||||||||||
Onetime payment related to corporate finance and restructuring efforts | 75,000 | ||||||||||||||||||||||||||||||||||||||||||
Proceeds from warrants | 119,000 | 100,000 | 13,000 | 13,000 | 55,000 | 162,500 | |||||||||||||||||||||||||||||||||||||
Warrants to purchase common stock shares | 81,280 | 500,000 | 91,667 | 250,000 | |||||||||||||||||||||||||||||||||||||||
Non copetitive activities period | 4 years | ||||||||||||||||||||||||||||||||||||||||||
Release agreement payment | 25,000 | ||||||||||||||||||||||||||||||||||||||||||
Monthly installment amount | 25,000 | 17,000 | 30,000 | ||||||||||||||||||||||||||||||||||||||||
Intellectual property rights payment | 125,000 | ||||||||||||||||||||||||||||||||||||||||||
Subsequent Event Amount | 3 | ||||||||||||||||||||||||||||||||||||||||||
Payment for corporate reorganization | 150,000 | ||||||||||||||||||||||||||||||||||||||||||
Percent of outstanding shares issued | 3.00% | ||||||||||||||||||||||||||||||||||||||||||
Escrow deposit amount dedicated to severance payments | 500,000 | ||||||||||||||||||||||||||||||||||||||||||
Financial advisor services, amount paid | 91,500 | ||||||||||||||||||||||||||||||||||||||||||
Chairman agreement monthly payments | 41,700 | ||||||||||||||||||||||||||||||||||||||||||
Chairman agreement monthy payments thereafter initial payment period | 12,500 | ||||||||||||||||||||||||||||||||||||||||||
Chairman agreement severance pay period | 12 months | ||||||||||||||||||||||||||||||||||||||||||
Chairman agreement stock option exercisable period after termination | 90 days | 90 days | 90 days | ||||||||||||||||||||||||||||||||||||||||
Percent of RSU's vest | 100.00% | 100.00% | 100.00% | ||||||||||||||||||||||||||||||||||||||||
Percent of combined voting power | 35.00% | 35.00% | 35.00% | ||||||||||||||||||||||||||||||||||||||||
Number Of Days To Cease Majority Voting Power | 60 days | 60 days | 60 days | ||||||||||||||||||||||||||||||||||||||||
Seperation payment percent of current compensation | 200.00% | 200.00% | 100.00% | ||||||||||||||||||||||||||||||||||||||||
Shares granted | 2,800,000 | 1,000,000 | 500,000 | ||||||||||||||||||||||||||||||||||||||||
Share based compensation vesting percent | 60.00% | 50.00% | 25.00% | 25.00% | 50.00% | 50.00% | 25.00% | 25.00% | 50.00% | ||||||||||||||||||||||||||||||||||
Compensation | 325,000 | 350,000 | |||||||||||||||||||||||||||||||||||||||||
Annual target bonus, percent of base salary | 50.00% | 50.00% | |||||||||||||||||||||||||||||||||||||||||
Share based compensation vesting percent upon sales goals achievments | 40.00% | ||||||||||||||||||||||||||||||||||||||||||
Share based compensation payment period | 2 years | ||||||||||||||||||||||||||||||||||||||||||
Percent of share based compensation subject to time-based vesting | 100.00% | ||||||||||||||||||||||||||||||||||||||||||
Annual Retainer Fee | $2,500 | $4,000 | $60,000 | $60,000 | $5,000 | $10,000 |