Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Jan. 31, 2018 | Mar. 14, 2018 | |
Document And Entity Information | ||
Entity Registrant Name | POLARITYTE, INC. | |
Entity Central Index Key | 1,076,682 | |
Document Type | 10-Q | |
Document Period End Date | Jan. 31, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --10-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 16,457,664 | |
Trading Symbol | COOL | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2,018 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jan. 31, 2018 | Oct. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 9,990 | $ 17,667 |
Prepaid expenses and other current assets | 626 | 237 |
Receivable from Zift | 60 | 60 |
Total current assets | 10,676 | 17,964 |
Non-current assets: | ||
Property and equipment, net | 4,452 | 2,173 |
Security deposits – non-current | 111 | |
Receivable from Zift, non-current | 15 | |
Total non-current assets | 4,563 | 2,188 |
TOTAL ASSETS | 15,239 | 20,152 |
Current liabilities: | ||
Accounts payable and accrued expenses | 3,312 | 1,939 |
Warrant liability and embedded derivative | 10,128 | 13,502 |
Total current liabilities | 13,440 | 15,441 |
Total liabilities | 13,440 | 15,441 |
Commitments and Contingencies | ||
Redeemable convertible preferred stock - Series F - 6,455 shares authorized, issued and outstanding at January 31, 2018 and October 31, 2017; liquidation preference - $17,750. | 5,414 | 4,541 |
STOCKHOLDERS’ EQUITY (DEFICIT): | ||
Convertible preferred stock - 9,993,545 shares authorized, 1,656,838 and 3,230,655 shares issued and outstanding at January 31, 2018 and October 31, 2017, aggregate liquidation preference $1,089 and $2,140, respectively | 109,104 | 109,995 |
Common stock - $.001 par value; 250,000,000 shares authorized; 7,094,544 and 6,515,524 shares issued and outstanding at January 31, 2018 and October 31, 2017, respectively | 7 | 7 |
Additional paid-in capital | 160,368 | 149,173 |
Accumulated deficit | (273,094) | (259,005) |
Total stockholders’ equity (deficit) | (3,615) | 170 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | $ 15,239 | $ 20,152 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jan. 31, 2018 | Oct. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Redeemable convertible preferred stock, shares authorized | 6,455 | 6,455 |
Redeemable convertible preferred stock, shares issued | 6,455 | 6,455 |
Redeemable convertible preferred stock, shares outstanding | 6,455 | 6,455 |
Redeemable convertible preferred stock, liquidation preference | $ 17,750 | |
Convertible preferred stock, shares authorized | 9,993,545 | 9,993,545 |
Convertible preferred stock, shares issued | 1,656,838 | 3,230,655 |
Convertible preferred stock, shares outstanding | 1,656,838 | 3,230,655 |
Convertible preferred stock, liquidation preference | $ 1,089 | $ 2,140 |
Common stock, par value | $ .001 | $ 0.001 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 7,094,544 | 6,515,524 |
Common stock, shares outstanding | 7,094,544 | 6,515,524 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 31, 2018 | Jan. 31, 2017 | |
Income Statement [Abstract] | ||
Net revenues | $ 13 | |
Cost of sales | 1 | |
Gross profit | 12 | |
Operating costs and expenses | ||
Research and development | 6,602 | |
General and administrative | 10,898 | 5,225 |
Operating costs and expenses total | 17,500 | 5,225 |
Operating loss | (17,488) | (5,225) |
Other (expenses) income | ||
Interest income | 25 | 4 |
Change in fair value of derivative liabilities | 3,374 | (8) |
Net loss from continuing operations | (14,089) | (5,229) |
Loss from discontinued operations | (432) | |
Net loss | (14,089) | (5,661) |
Deemed dividend – accretion of discount on Series F preferred stock | (904) | |
Cumulative dividends on Series F preferred stock | (275) | |
Net loss attributable to common shareholders | $ (15,268) | $ (5,661) |
Net loss per share, basic and diluted: | ||
Loss from continuing operations | $ (2.13) | $ (1.56) |
Loss from discontinued operations | (0.13) | |
Deemed dividend – accretion of discount on preferred stock | (0.14) | |
Cumulative dividends on Series F preferred stock | (0.04) | |
Net loss attributable to common shareholders | $ (2.31) | $ (1.69) |
Weighted average shares outstanding, basic and diluted | 6,615,350 | 3,346,788 |
Condensed Consolidated Stateme5
Condensed Consolidated Statement of Changes in Stockholders' Equity (Unaudited) - 3 months ended Jan. 31, 2018 - USD ($) $ in Thousands | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at Oct. 31, 2017 | $ 109,995 | $ 7 | $ 149,173 | $ (259,005) | $ 170 |
Balance, shares at Oct. 31, 2017 | 3,230,655 | 6,515,524 | |||
Conversion of Series A preferred stock to common stock | $ (378) | 378 | |||
Conversion of Series A preferred stock to common stock, shares | (1,544,572) | 350,000 | |||
Conversion of Series C preferred stock to common stock | $ (201) | 201 | |||
Conversion of Series C preferred stock to common stock, shares | (2,578) | 59,950 | |||
Conversion of Series D preferred stock to common stock | $ (312) | 312 | |||
Conversion of Series D preferred stock to common stock, shares | (26,667) | 44,445 | |||
Proceeds from option exercises | 45 | 45 | |||
Proceeds from stock exercises, shares | 10,417 | ||||
Stock-based compensation expense | 11,132 | 11,132 | |||
Stock-based compensation expense, shares | 102,500 | ||||
Deemed dividend - accretion of discount on Series F preferred stock | (904) | (904) | |||
Cumulative dividends on Series F preferred stock | (275) | (275) | |||
Series F preferred stock dividends paid in common stock | 306 | 306 | |||
Series F preferred stock dividends paid in common stock, shares | 11,708 | ||||
Net loss | (14,089) | (14,089) | |||
Balance at Jan. 31, 2018 | $ 109,104 | $ 7 | $ 160,368 | $ (273,094) | $ (3,615) |
Balance, shares at Jan. 31, 2018 | 1,656,838 | 7,094,544 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 31, 2018 | Jan. 31, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (14,089) | $ (5,661) |
Loss from discontinued operations | 432 | |
Loss from continuing operations | (14,089) | (5,229) |
Adjustments to reconcile net loss from continuing operations to net cash used in continuing operating activities: | ||
Depreciation and amortization | 256 | |
Stock based compensation expense | 11,132 | 3,975 |
Change in fair value of warrant liability and embedded derivative | (3,374) | 8 |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other current assets | 46 | (204) |
Security deposits – non-current | (111) | |
Accounts payable and accrued expenses | 1,067 | 694 |
Net cash used in continuing operating activities | (5,073) | (756) |
Net cash provided by discontinued operating activities | 395 | |
Net cash used in operating activities | (5,073) | (361) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchase of property and equipment | (2,664) | (1,538) |
Net cash used in continuing investing activities | (2,664) | (1,538) |
Net cash provided by discontinued investing activities | 15 | |
Net cash used in investing activities | (2,649) | (1,538) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from stock options exercised | 45 | |
Proceeds from the sale of common stock | 2,278 | |
Net cash provided by financing activities | 45 | 2,278 |
Net decrease in cash and cash equivalents | (7,677) | 379 |
Cash and cash equivalents - beginning of period | 17,667 | 6,523 |
Cash and cash equivalents - end of period | 9,990 | 6,902 |
Supplemental schedule of non-cash investing and financing activities: | ||
Conversion of Series A preferred stock to common stock | 378 | 297 |
Conversion of Series B preferred stock to common stock | 513 | |
Conversion of Series C preferred stock to common stock | 201 | 90 |
Conversion of Series D preferred stock to common stock | 312 | 721 |
Unpaid liability for acquisition of property and equipment | 360 | 54 |
Warrant exchange for common stock shares | 78 | |
Deemed dividend – accretion of discount on preferred stock | 904 | |
Cumulative dividends on Series F preferred stock | 275 | |
Series F preferred stock dividends paid in common stock | $ 306 |
Principal Business Activity and
Principal Business Activity and Basis of Presentation | 3 Months Ended |
Jan. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principal Business Activity and Basis of Presentation | 1. PRINCIPAL BUSINESS ACTIVITY AND BASIS OF PRESENTATION PolarityTE, Inc. is a commercial-stage biotechnology and regenerative biomaterials company focused on transforming the lives of patients by discovering, designing and developing a range of regenerative tissue products and biomaterials for the fields of medicine, biomedical engineering and material sciences. Discontinued Operations. Segments. The accompanying interim condensed consolidated financial statements of the Company are unaudited, but in the opinion of management, reflect all adjustments, consisting of normal recurring accruals, necessary for a fair presentation of the results for the interim period. Accordingly, they do not include all information and notes required by generally accepted accounting principles for complete financial statements. The Company’s financial results are impacted by the seasonality of the retail selling season and the timing of the release of new titles. The results of operations for interim periods are not necessarily indicative of results to be expected for the entire fiscal year. The balance sheet at October 31, 2017 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. These interim condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements and notes thereto for the year ended October 31, 2017 filed with the Securities and Exchange Commission on Form 10-K on January 30, 2018. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Jan. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation. Cash and Cash Equivalents. Accounts Payable and Accrued Expenses. Property and Equipment. Income Taxes. Stock Based Compensation. The fair value for options issued is estimated at the date of grant using a Black-Scholes option-pricing model. The risk-free rate is derived from the U.S. Treasury yield curve in effect at the time of the grant. The volatility factor is determined based on the Company’s historical stock prices. The value of restricted stock and restricted stock unit grants is measured based on the fair market value of the Company’s common stock on the date of grant and amortized over the vesting period of, generally, six months to three years. Loss Per Share. Commitments and Contingencies. Accounting for Warrants Change in Fair Value of Derivatives. Revenue Recognition. Estimates. Recently Adopted Accounting Pronouncements In April 2016, the FASB issued ASU No. 2016-09, Share-Based Payment: Simplifying the Accounting for Share-Based Payments Recent Accounting Pronouncements. In February 2016, FASB issued ASU No. 2016-02, Leases (Topic 842), Leases (Topic 840) In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting. ASU 2017-09 provides clarity and reduces both (1) diversity in practice and (2) cost and complexity when applying the guidance in Topic 718, to a change to the terms or conditions of a share-based payment award. The amendments in ASU 2017-09 should be applied prospectively to an award modified on or after the adoption date. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. The Company is currently assessing the potential impact of adopting ASU 2017-09 on its consolidated financial statements and related disclosures. In July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815) I. Accounting for Certain Financial Instruments with Down Round Features; II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception, In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows - Classification of Certain Cash Receipts and Cash Payments In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)”, a new accounting standard that requires recognition of revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services. The FASB has also issued several updates to ASU 2014-09. The new standard supersedes U.S. GAAP guidance on revenue recognition and requires the use of more estimates and judgments than the present standards. It also requires additional disclosures regarding the nature, amount, timing and uncertainty of cash flows arising from contracts with customers. Topic 606 is effective for our fiscal year 2019 beginning on November 1, 2018. We are still evaluating the overall effect that the standard will have on our consolidated financial statements and accompanying notes to the consolidated financial statements. |
Going Concern
Going Concern | 3 Months Ended |
Jan. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern | 3. GOING CONCERN The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has experienced net losses and negative cash flows from operations during each of the last two fiscal years. The Company has experienced negative cash flows from continuing operations of approximately $5.1 million for the three months ended January 31, 2018. Given these negative cash flows and forecasted increased spending, the continuation of the Company as a going concern is dependent upon continued financial support from its shareholders, potential collaborations, the ability of the Company to obtain necessary equity and/or debt financing to continue operations, and the attainment of profitable operations. The Company cannot make any assurances that additional financings will be available to it and, if available, completed on a timely basis, on acceptable terms or at all. If the Company is unable to complete a debt or equity offering, execute a collaboration arrangement or otherwise obtain sufficient financing when and if needed, it would negatively impact its business and operations and could also lead to the reduction or suspension of the Company’s operations and ultimately force the Company to cease operations. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 3 Months Ended |
Jan. 31, 2018 | |
Prepaid Expenses And Other Current Assets | |
Prepaid Expenses and Other Current Assets | 4. PREPAID EXPENSES AND OTHER CURRENT ASSETS Prepaid expenses and other current assets consist of the following (in thousands): January 31, 2018 October 31, 2017 Legal retainer $ - $ 15 Prepaid insurance 64 69 Other prepaids 88 126 Advances on equipment purchases 435 - Other assets 39 27 Total prepaid expenses and other current assets $ 626 $ 237 |
Property and Equipment, Net
Property and Equipment, Net | 3 Months Ended |
Jan. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | 5. PROPERTY AND EQUIPMENT, NET Property and equipment, net, consist of the following (in thousands): January 31, 2018 October 31, 2017 Medical equipment $ 4,911 $ 2,418 Computers and software 238 211 Furniture and equipment 45 30 Total property and equipment, gross 5,194 2,659 Accumulated depreciation (742 ) (486 ) Total property and equipment, net $ 4,452 $ 2,173 Depreciation expense for the three months ended January 31, 2018 and 2017 was approximately $256,000 and $83,000, respectively. |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 3 Months Ended |
Jan. 31, 2018 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Expenses | 6. ACCOUNTS PAYABLE AND ACCRUED EXPENSES Accounts payable and accrued expenses consist of the following (in thousands): January 31, 2018 October 31, 2017 Accounts payable $ 25 $ 25 Due to Zift - 36 Medical study and supplies 511 362 Medical equipment purchase 360 54 Salaries and other compensation 1,312 574 Legal and accounting 737 555 Other accruals 367 333 Total accounts payable and accrued expenses $ 3,312 $ 1,939 Salaries and other compensation include accrued payroll expense and employer 401K plan contributions. |
Preferred Shares and Common Sha
Preferred Shares and Common Shares | 3 Months Ended |
Jan. 31, 2018 | |
Equity [Abstract] | |
Preferred Shares and Common Shares | 7. PREFERRED SHARES AND COMMON SHARES Convertible preferred stock as of January 31, 2018 consisted of the following (in thousands, except share amounts): Shares Authorized Shares Issued and Outstanding Net Carrying Value Aggregate Liquidation Preference Common Shares Issuable Upon Conversion Series A 8,830,000 1,602,099 $ 391 $ 1,089 363,142 Series B 54,250 47,689 4,020 - 794,816 Series C 26,000 - - - - Series D 170,000 - - - - Series E 7,050 7,050 104,693 - 7,050,000 Series F 6,455 6,455 5,414 17,750 645,455 Other authorized, unissued 906,245 - - - - Total 10,000,000 1,663,293 $ 114,518 $ 18,839 8,853,413 Convertible preferred stock as of October 31, 2017 consisted of the following (in thousands, except share amounts): Shares Authorized Shares Issued and Outstanding Net Carrying Value Aggregate Liquidation Preference Common Shares Issuable Upon Conversion Series A 8,830,000 3,146,671 $ 769 $ 2,140 713,245 Series B 54,250 47,689 4,020 - 794,816 Series C 26,000 2,578 201 - 59,953 Series D 170,000 26,667 312 - 44,445 Series E 7,050 7,050 104,693 - 7,050,000 Series F 6,455 6,455 4,541 17,750 645,455 Other authorized, unissued 906,245 - - - - Total 10,000,000 3,237,110 $ 114,536 $ 19,890 9,307,914 Series A Convertible Preferred Stock The Series A Convertible Preferred Stock (“Series A Preferred Shares”) is convertible into shares of common stock based on a conversion calculation equal to the stated value of such Series A Preferred Share, plus all accrued and unpaid dividends, if any, on such Series A Preferred Share, as of such date of determination, divided by the conversion price. The stated value of each Series A Preferred Share is $0.68 and the initial conversion price was $4.08 (current conversion price at January 31, 2018 is $3.00) per share, each subject to adjustment for stock splits, stock dividends, recapitalizations, combinations, subdivisions or other similar events. In addition, in the event the Company issues or sells, or is deemed to issue or sell, shares of its common stock at a per share price that is less than the conversion price then in effect, the conversion price shall be reduced to such lower price, subject to certain exceptions. Pursuant to the Certificate of Designations, Preferences and Rights of the 0% Series A Convertible Preferred Stock of PolarityTE, Inc., the Company is prohibited from incurring debt or liens, or entering into new financing transactions without the consent of the lead investor in the Company’s December 2016 private placement as long as any of the Series A Preferred Shares are outstanding. The Series A Preferred Shares bear no dividends. The holders of Series A Preferred Shares shall vote together with the holders of common stock on all matters on an as if converted basis, subject to certain conversion and ownership limitations, and shall not vote as a separate class. Notwithstanding the foregoing, the conversion price for purposes of calculating voting power shall in no event be lower than $3.54 per share. At no time may all or a portion of the Series A Preferred Shares be converted if the number of shares of common stock to be issued pursuant to such conversion would exceed, when aggregated with all other shares of common stock owned by the holder at such time, the number of shares of common stock which would result in such Holder beneficially owning (as determined in accordance with Section 13(d) of the 1934 Act and the rules thereunder) more than 4.99% of all of the common stock outstanding at such time; provided, however, that the holder may waive the 4.99% limitation at which time he may not own beneficially own more than 9.99% of all the common stock outstanding at such time. The Series A Preferred Shares do not represent an unconditional obligation to be settled in a variable number of shares of common stock, are not redeemable and do not contain fixed or indexed conversion provisions similar to debt instruments. Accordingly, the Series A Preferred Shares are considered equity hosts and recorded in stockholders’ equity. Series B Convertible Preferred Stock The Series B Convertible Preferred Stock (“Series B Preferred Shares”) is convertible into shares of common stock based on a conversion calculation equal to the stated value of such Series B Preferred Shares, plus all accrued and unpaid dividends, if any, on such Series B Preferred Shares, as of such date of determination, divided by the conversion price. The stated value of each Series B Preferred Share is $140.00 and the initial conversion price is $8.40 per share, each subject to adjustment for stock splits, stock dividends, recapitalizations, combinations, subdivisions or other similar events. The Company is prohibited from effecting a conversion of the Series B Preferred Shares to the extent that, as a result of such conversion, such holder would beneficially own more than 4.99% of the number of shares of common stock outstanding immediately after giving effect to the issuance of shares of common stock upon conversion of the Series B Preferred Shares, which beneficial ownership limitation may be increased by the holder up to, but not exceeding, 9.99%. Subject to such beneficial ownership limitations, each holder is entitled to vote on all matters submitted to stockholders of the Company on an as converted basis, based on a conversion price of $8.40 per shares. The Series B Preferred Shares rank junior to the Series A Preferred Shares and bear no dividends. The Series B Preferred Shares do not represent an unconditional obligation to be settled in a variable number of shares, are not redeemable and do not contain fixed or indexed conversion provisions similar to debt instruments. Accordingly, the Series B Preferred Shares are considered equity hosts and recorded in stockholders’ equity. Series C Convertible Preferred Stock The Series C Convertible Preferred Stock (“Series C Preferred Shares”) is convertible into shares of common stock based on a conversion calculation equal to the stated value of such Series C Preferred Shares, plus all accrued and unpaid dividends, if any, on such Series C Preferred Shares, as of such date of determination, divided by the conversion price. The stated value of each Series C Preferred Share is $120.00 per share, and the initial conversion price was $7.20 (current conversion price was $5.16) per share, each subject to adjustment for stock splits, stock dividends, recapitalizations, combinations, subdivisions or other similar events. In addition, in the event the Company issues or sells, or is deemed to issue or sell, shares of common stock at a per share price that is less than the conversion price then in effect, the conversion price shall be reduced to such lower price, subject to certain exceptions and provided that the conversion price may not be reduced to less than $5.16, unless and until such time as the Company obtains shareholder approval to allow for a lower conversion price. The Company is prohibited from effecting a conversion of the Series C Preferred Shares to the extent that, as a result of such conversion, a holder would beneficially own more than 4.99% of the number of shares of common stock outstanding immediately after giving effect to the issuance of shares of common stock upon conversion of the Series C Preferred Shares, which beneficial ownership limitation may be increased by the holder up to, but not exceeding, 9.99%. Subject to the beneficial ownership limitations discussed previously, each holder is entitled to vote on all matters submitted to stockholders of the Company and shall have the number of votes equal to the number of shares of common stock issuable upon conversion of such holder’s Series C Preferred Shares, based on a conversion price of $7.80 per share. The Series C Preferred Shares bear no dividends and shall rank junior to the Company’s Series A Preferred Shares but senior to the Company’s Series B Preferred Shares. The Company evaluated the guidance ASC 480-10 Distinguishing Liabilities from Equity Contracts in an Entity’s Own Equity Series D Convertible Preferred Stock The Series D Convertible Preferred Stock (“Series Preferred D Shares”) is convertible into shares of common stock based on a conversion calculation equal to the stated value of such Series Preferred D Shares, plus all accrued and unpaid dividends, if any, on such Series Preferred D Share, as of such date of determination, divided by the conversion price. The stated value Series Preferred D Shares is $1,000 per share and the initial conversion price is $600 per share, each subject to adjustment for stock splits, stock dividends, recapitalizations, combinations, subdivisions or other similar events. The Company is prohibited from effecting a conversion of the Series Preferred D Shares to the extent that, as a result of such conversion, such investor would beneficially own more than 4.99% of the number of shares of Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon conversion of the Series Preferred D Shares. Upon 61 days written notice, the beneficial ownership limitation may be increased by the holder up to, but not exceeding, 9.99%. Except as otherwise required by law, holders of Series D Preferred Shares shall not have any voting rights. Pursuant to the Certificate of Designations, Preferences and Rights of the 0% Series D Convertible Preferred Stock, the Series Preferred D Shares bear no dividends and shall rank senior to the Company’s other classes of capital stock. Series E Convertible Preferred Stock On April 7, 2017, the Company issued 7,050 shares of its newly authorized Series E Convertible Preferred Stock (the “Series E Preferred Shares”) convertible into an aggregate of 7,050,000 shares of the Company’s common stock with a fair value of approximately $104.7 million which is equal to 7,050,000 common shares times $14.85 (the closing price of the Company’s common stock as of April 7, 2017) to Dr. Lough for the purchase of the Polarity NV’s assets. The Preferred E Shares are convertible into shares of common stock based on a conversion calculation equal to the stated value of such Preferred E Shares, plus all accrued and unpaid dividends, if any as of such date of determination, divided by the conversion price. The stated value of each Preferred E Share is $1,000 and the initial conversion price is $1.00 per share, each subject to adjustment for stock splits, stock dividends, recapitalizations, combinations, subdivisions or other similar events. The Preferred E Shares, with respect to dividend rights and rights on liquidation, winding-up and dissolution, in each case will rank senior to the Company’s common stock and all other securities of the Company that do not expressly provide that such securities rank on parity with or senior to the Preferred E Shares. Until converted, each Preferred E Share is entitled to two votes for every share of common stock into which it is convertible on any matter submitted for a vote of stockholders. The Preferred E Shares participate on an “as converted” basis with all dividends declared on the Company’s common stock. Redeemable Series F Convertible Preferred Stock On September 20, 2017, the Company sold an aggregate of $17,750,000 worth of units (the “Units”) of the Company’s securities to accredited investors at a purchase price of $2,750 per Unit with each Unit consisting of (i) one share of the Company’s newly authorized 6% Series F Convertible Preferred Stock, par value $0.001 per share (the “Series F Preferred Shares”), which are convertible into one hundred (100) shares of the Company’s common stock, and (ii) a two-year warrant to purchase 322,727 shares of the Company’s common stock, at an exercise price of $30.00 per share. The Company incurred issuance costs of approximately $356,000 associated with the Unit offering, of which approximately $82,000 was allocated to the Series F Preferred Shares and netted against the proceeds. The remaining amount was allocated to the warrants and other embedded derivative and was expensed. The Company entered into separate registration rights agreements, and subsequently amended such agreements, with each of the investors, pursuant to which the Company agreed to undertake to file a registration statement to register the resale of the conversion shares and warrant shares within 150 days of the closing of the transaction, to cause such registration statement to be declared effective by the Securities and Exchange Commission within ninety days following its filing and to maintain the effectiveness of the registration statement until all of such conversion shares and warrant shares have been sold or are otherwise able to be sold pursuant to Rule 144 under the Securities Act, without any restrictions. In the event the Company fails to file, or obtain effectiveness of, such registration statement with the specified period of time, the Company will be obligated to pay liquidated damages equal to the product of one 1% percent multiplied by the aggregate subscription amount paid by such investor for every thirty (30) days during which such filing is not made and/or effectiveness obtained, such fee being subject to certain exceptions, up to a maximum of six (6) percent. Pursuant to the subscription agreements, for as long as the lead investor holds securities, except with certain issuances, the Company shall not incur any senior debt or issue any preferred stock with liquidation rights senior to the securities sold thereunder. During this period, the Company will not, without the consent of the investors holding a majority of the then issued and outstanding shares on the date of such consent (including the lead investor), enter into any equity line of credit or similar agreement, nor issue nor agree to issue any common stock, common stock equivalents, floating or variable priced equity linked instruments nor any of the foregoing or equity with price reset rights (subject to adjustment for stock splits, distributions, dividends, recapitalizations and the like). The Series F Preferred Shares are convertible into shares of the Company’s common stock based on a conversion calculation equal to the stated value of the Series F Preferred Shares, plus all accrued and unpaid dividends, if any, on such Series F Preferred Shares, as of such date of determination, divided by the conversion price. The stated value of each share of Series F Preferred Shares is $2,750 and the initial conversion price is $27.50 per share, each subject to adjustment for stock splits, stock dividends, recapitalizations, combinations, subdivisions or other similar events. Each holder of a Series F Preferred Share is entitled to receive dividends, in cash or in shares of the Company’s common stock on the stated value of each share at the dividend rate, which shall be cumulative and shall continue to accrue and compound quarterly whether or not declared and whether or not in any fiscal year there shall be net profits or surplus available for the payment of dividends in such fiscal year. Dividends are payable quarterly in arrears on the fifteenth (15th) day of the next applicable quarter, to the record holders of the Series F Preferred Shares on the last day of the calendar quarter immediately preceding the dividend payment date in shares of common stock, calculated using the VWAP of the common stock on the ninety (90) days immediately preceding the dividend record date; provided, however, that the Company may, at its option, pay dividends in cash or in a combination of common shares and cash. Upon the liquidation, dissolution or winding up of the business of the Company, whether voluntary or involuntary, each holder of preferred shares shall be entitled to receive, for each share thereof, out of assets of the Company legally available therefor, a preferential amount in cash equal to (and not more than) $2,750. On the two (2) year anniversary of the initial issuance date, any Series F Preferred Shares outstanding and not otherwise already converted, shall, at the option of the holder, either (i) automatically convert into common stock of the Company at the conversion price then in effect or (ii) be repaid by the Company based on the stated value of such outstanding Series F Preferred Shares. In addition, in the event that the Company’s common stock attains a consolidated bid price of $45 or greater for any four (4) trading days during any eight (8) trading day period, the Series F Preferred Shares shall be automatically converted to common stock, without any further action by the holder (subject to the conversion limitation in the event that such conversion would result in such holder holding in excess of four and ninety-nine one-hundredths (4.99%) percent of the common stock of the Company). The warrants issued in connection with the Series F Preferred Shares are liabilities pursuant to ASC 815. The warrant agreement provides for an adjustment to the number of common shares issuable under the warrant and/or adjustment to the exercise price, including but not limited to, if: (a) the Company issues shares of common stock as a dividend or distribution to holders of its common stock; (b) the Company subdivides or combines its common stock (i.e., stock split); (c) adjustment of exercise price upon issuance of new securities at less than the exercise price. Under ASC 815, warrants that provide for down-round exercise price protection are recognized as derivative liabilities. The conversion feature within the Series F Preferred Shares is not clearly and closely related to the identified host instrument and, as such, is recognized as a derivative liability measured at fair value pursuant to ASC 815. The initial fair value of the warrants and bifurcated embedded conversion feature, estimated to be approximately $4.3 million and $9.3 million, respectively, was deducted from the gross proceeds of the Unit offering to arrive at the initial discounted carrying value of the Series F Preferred Shares. The resulting discount to the aggregate stated value of the Series F Preferred Shares of approximately $13.6 million will be recognized as accretion using the effective interest method similar to preferred stock dividends, over the two-year period prior to optional redemption by the holders. The Company recognized accretion of the discount to the stated value of the Series F Preferred Shares of approximately $904,000 in the three months ended January 31, 2018 as a reduction of additional paid-in capital and an increase in the carrying value of the Series F Preferred Shares. The accretion is presented in the Statement of Operations as a deemed dividend, increasing net loss to arrive at net loss attributable to common stockholders. Preferred Share Conversion Activity During the three months ended January 31, 2018, 1,544,572 Series A Preferred Shares, 2,578 Series C Preferred Shares and 26,667 Series D Preferred Shares were converted into 454,395 shares of common stock. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Jan. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 8. FAIR VALUE MEASUREMENTS In accordance with ASC 820, Fair Value Measurements, financial instruments were measured at fair value using a three-level hierarchy which maximizes use of observable inputs and minimizes use of unobservable inputs: ● Level 1: Observable inputs such as quoted prices in active markets for identical instruments ● Level 2: Quoted prices for similar instruments that are directly or indirectly observable in the market ● Level 3: Significant unobservable inputs supported by little or no market activity. Financial instruments whose values are determined using pricing models, discounted cash flow methodologies, or similar techniques, for which determination of fair value requires significant judgment or estimation. In connection with the offering of Units in September 2017, the Company issued warrants to purchase an aggregate of 322,727 shares of common stock. These warrants are exercisable at $30.00 per share and expire in two years. The warrants are liabilities pursuant to ASC 815. The warrant agreement provides for an adjustment to the number of common shares issuable under the warrant and/or adjustment to the exercise price, including but not limited to, if: (a) the Company issues shares of common stock as a dividend or distribution to holders of its common stock; (b) the Company subdivides or combines its common stock (i.e., stock split); (c) adjustment of exercise price upon issuance of new securities at less than the exercise price. Under ASC 815, warrants that provide for down-round exercise price protection are recognized as derivative liabilities. The Series F Preferred Shares contain an embedded conversion feature that is not clearly and closely related to the identified host instrument and, as such, is recognized as a derivative liability measured at fair value. The Company classifies these derivatives on the consolidated balance sheet as a current liability. The fair value of the bifurcated embedded conversion feature was estimated to be approximately $7.4 million and $9.2 million, respectively, at January 31, 2018 and October 31, 2017 as calculated using the Monte Carlo simulation with the following assumptions: Series F Conversion Feature January 31, 2018 October 31, 2017 Stock price $ 21.30 $ 25.87 Exercise price $ 27.50 $ 27.50 Risk-free rate 2.053 % 1.581 % Volatility 86.4 % 96.0 % Term 1.64 1.89 The fair value of the warrant liability was estimated to be approximately $2.8 million and $4.3 million, respectively, at January 31, 2018 and October 31, 2017 as calculated using the Monte Carlo simulation with the following assumptions: Warrant Liability January 31, 2018 October 31, 2017 Stock price $ 21.30 $ 25.87 Exercise price $ 30.00 $ 30.00 Risk-free rate 2.053 % 1.581 % Volatility 86.4 % 96.0 % Term 1.64 1.89 Financial instruments measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The fair value hierarchy of financial instruments, measured at fair value on a recurring basis on the consolidated balance sheets as of January 31, 2018 and October 31, 2017 is as follows (in thousands): Fair Value Measurement as of January 31, 2018 Level 1 Level 2 Level 3 Total Liabilities Warrant liability $ - $ - $ 2,765 $ 2,765 Derivative liability - - 7,363 7,363 Total $ - $ - $ 10,128 $ 10,128 Fair Value Measurement as of October 31, 2017 Level 1 Level 2 Level 3 Total Liabilities Warrant liability $ - $ - $ 4,256 $ 4,256 Derivative liability - - 9,246 9,246 Total $ - $ - $ 13,502 $ 13,502 The following table sets forth the changes in the estimated fair value for our Level 3 classified derivative warrant liability (in thousands): 2017 Series F Preferred Stock - Warrant Liability 2017 Series F Preferred Stock - Embedded Derivative Total Warrant and Derivative Liability Fair value - October 31, 2017 $ 4,256 $ 9,246 $ 13,502 Change in fair value (1,491 ) (1,883 ) (3,374 ) Fair value - January 31, 2018 $ 2,765 $ 7,363 $ 10,128 |
Stock-Based Compensation Arrang
Stock-Based Compensation Arrangements | 3 Months Ended |
Jan. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation Arrangements | 9. STOCK BASED COMPENSATION ARRANGEMENTS In the three months ended January 31, 2018 and 2017, the Company recorded stock-based compensation expense related to restricted stock awards and stock options as follows (in thousands): For the Three Months Ended January 31, 2018 2017 General and administrative expense: Continuing operations $ 8,910 $ 3,975 Discontinued operations - 442 8,910 4,417 Research and development expense: Continuing operations 2,221 - Total stock-based compensation expense $ 11,132 $ 4,417 A summary of the Company’s employee stock option activity in the three months ended January 31, 2018 is presented below: Number of shares Weighted-Average Exercise Price Outstanding - October 31, 2017 3,525,530 $ 6.34 Granted 1,030,500 $ 24.47 Exercised (10,794 ) $ 5.10 Forfeited (34,167 ) $ 18.90 Outstanding - January 31, 2018 4,511,069 $ 10.39 Options exercisable - January 31, 2018 1,930,500 $ 5.79 Weighted-average fair value of options granted during the period $ 16.57 A summary of the Company’s non-employee stock option activity in the three months ended January 31, 2018 is presented below: Number of shares Weighted-Average Exercise Price Outstanding - October 31, 2017 293,000 $ 19.61 No activity - $ - Outstanding - January 31, 2018 293,000 $ 19.61 Options exercisable - January 31, 2018 63,292 $ 14.24 Stock options are generally granted to employees or non-employees at exercise prices equal to the fair market value of the Company’s stock at the dates of grant. Stock options generally vest over one to three years and have a term of five to ten years. The total fair value of employee options granted during the three months ended January 31, 2018 was approximately $17.1 million. The intrinsic value of options outstanding at January 31, 2018 was $54.7 million. The intrinsic value of options exercised during the three months ended January 31, 2018 was $141,000. The weighted average remaining contractual term of outstanding and exercisable options at January 31, 2018 was 9.1 years and 8.9 years, respectively. As of January 31, 2018, there was approximately $18.3 million of unrecognized compensation cost related to stock options, which is expected to be recognized over a remaining weighted-average vesting period of 0.8 years. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions for the three months ended January 31, 2018: Risk free annual interest rate 2.01%-2.65 % Expected volatility 81.32-85.54 % Expected life 5.00-6.01 Assumed dividends None Restricted stock and restricted stock units activity for employees and non-employees in the fiscal year ended October 31, 2017: Number of shares Weighted-Average Grant-Date Fair Value Unvested - October 31, 2017 227,132 $ 7.83 Granted 102,500 $ 23.91 Vested (97,049 ) $ 12.53 Unvested - January 31, 2018 232,583 $ 12.95 The total fair value of restricted stock and restricted stock units granted during the three months ended January 31, 2018 was approximately $2.5 million. The value of restricted stock and restricted stock unit grants is measured based on the fair market value of the Company’s common stock on the date of grant and amortized over the vesting period of, generally, six months to three years. As of January 31, 2018, there was approximately $2.1 million of unrecognized compensation cost related to unvested restricted stock and restricted stock unit awards, which is expected to be recognized over a remaining weighted-average vesting period of 0.5 years. |
Income Taxes
Income Taxes | 3 Months Ended |
Jan. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 10. INCOME TAXES The Company calculates its provision for federal and state income taxes based on current tax law. The Tax Cuts and Jobs Act (tax reform) was enacted on December 22, 2017 (“Enactment Date”), and has several key provisions impacting accounting for and reporting of income taxes. The most significant provision reduces the U.S. corporate statutory tax rate from 35% to 21% beginning on January 1, 2018. Although most provisions of tax reform are not effective until 2018, the Company is required to record the effect of a change in tax law as of the Enactment Date on its deferred tax assets. As the Company maintains a full valuation allowance against its deferred tax assets, there is no income tax expense recorded related to this change. As of the Enactment Date, the Company estimates that its deferred tax asset and related valuation allowance were each reduced by approximately $2.2 million. Additionally, the Securities Exchange Commission staff has issued SAB 118, which allows the Company to record provisional amounts during a measurement period not to extend beyond one year of the enactment date. On December 22, 2017, Staff Accounting Bulletin No. 118 (“SAB 118”) was issued to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Act. Because the Company is still in the process of analyzing certain provisions of the Tax Act, the Company has determined that the adjustment to its deferred taxes was a provisional amount as permitted under SAB 118. Due to the Company’s history of losses and uncertainty of future taxable income, a valuation allowance sufficient to fully offset net operating losses and other deferred tax assets has been established. The valuation allowance will be maintained until sufficient positive evidence exists to support a conclusion that a valuation allowance is not necessary. The issuance of Preferred Stock in connection with the Polarity acquisition will likely result in limitations on the utilization of the Company’s net operating loss carryforwards under IRS section 382. |
Loss Per Share
Loss Per Share | 3 Months Ended |
Jan. 31, 2018 | |
Earnings Per Share [Abstract] | |
Loss Per Share | 11. LOSS PER SHARE Shares of common stock issuable under convertible preferred stock, warrants and options and shares subject to restricted stock grants were not included in the calculation of diluted earnings per common share for the three months ended January 31, 2018 and 2017, as the effect of their inclusion would be anti-dilutive. For periods when shares of participating preferred stock (as defined in ASC 260 earnings per share) are outstanding, the two-class method is used to calculate basic and diluted earnings (loss) per common share. The two-class method is an earnings allocation formula that determines earnings per share for each class of common stock and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings. Under the two-class method, basic earnings (loss) per common share is computed by dividing net earnings (loss) attributable to common share after allocation of earnings to participating securities by the weighted-average number of shares of common stock outstanding during the year. Diluted earnings (loss) per common share, when applicable, is computed using the more dilutive of the two-class method or the if-converted method. In periods of net loss, no effect is given to participating securities since they do not contractually participate in the losses of the Company. The table below provides total potential shares outstanding, including those that are anti-dilutive, on January 31, 2018 and 2017: January 31, 2018 2017 Shares issuable upon exercise of warrants 322,727 - Shares issuable upon conversion of preferred stock 8,853,413 2,357,232 Shares issuable upon exercise of stock options 4,804,069 2,922,020 Non-vested shares under restricted stock grants 232,583 640,184 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Jan. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 12. COMMITMENTS AND CONTINGENCIES Contingencies On February 26, 2015, a complaint for patent infringement was filed in the United States District Court for the Eastern District of Texas by Richard Baker, an individual residing in Australia, against Microsoft, Nintendo, Majesco Entertainment Company (“Majesco DE”), and a number of other game publisher defendants. The complaint alleged that the Zumba Fitness Kinect game infringed plaintiff’s patents in motion tracking technology. The plaintiff is representing himself pro se in the litigation and is seeking monetary damages in the amount of $1.3 million. The case was subsequently transferred to the Western District of Washington. On June 16, 2017, final judgment was entered in favor of the defendants. The plaintiff has appealed that decision to the Court of Appeals for the Federal Circuit. The appeal is currently pending. On June 23, 2017, as part of a purchase agreement, liabilities and claims relating to this litigation were assumed by Zift Interactive LLC. The Company cannot be certain about the outcome of the appeal, or whether litigation regarding the assumption of liabilities by Zift Interactive LLC may occur. In addition to the item above, the Company at times may be a party to claims and suits in the ordinary course of business. We record a liability when it is both probable that a liability has been incurred and the amount of the loss or range of loss can be reasonably estimated. The Company has not recorded a liability with respect to the matter above. While the Company believes that it has valid defenses with respect to the legal matter pending and intends to vigorously defend the matter above, given the uncertainty surrounding litigation and our inability to assess the likelihood of a favorable or unfavorable outcome, it is possible that the resolution of the matter could have a material adverse effect on our consolidated financial position, cash flows or results of operations. Commitments The Company leases office space in Hazlet, New Jersey at a cost of approximately $1,100 per month under a lease agreement that expires on March 31, 2018. This lease has been renewed for another year. The Company also leases space in Salt Lake City, Utah at a cost of approximately $24,044 per month under a lease agreement that expires on March 31, 2018. On December 27, 2017, the Company signed a five-year lease with one five-year option to renew on approximately 178,528 rentable square feet. The base rent for the first year of the lease is $1,178,285 and escalates at the rate of 3% per annum thereafter. Rent expense for the three months ended January 31, 2018 and 2017 was approximately $249,000 and $17,000, respectively. The Company has entered into employment agreements with key executives that contain severance terms and change of control provisions. |
Related Parties
Related Parties | 3 Months Ended |
Jan. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related Parties | 13. RELATED PARTIES In January 2015, the Company entered into an agreement with Equity Stock Transfer LLC for transfer agent services. A former Board member of the Company is a co-founder and chief executive officer of Equity Stock Transfer LLC. Fees under the agreement were approximately $0 and $2,000, in the three months ended January 31, 2018 and 2017, respectively. |
Discontinued Operations
Discontinued Operations | 3 Months Ended |
Jan. 31, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | 14. DISCONTINUED OPERATIONS The results of operations from the discontinued business for the three months ended January 31, 2018 and 2017 are as follows (in thousands): For the Three Months Ended January 31, 2018 2017 Revenues $ - $ 156 Expenses - 588 Loss from discontinued operations $ - $ (432 ) The cash flows from the discontinued business for the three months ended January 31, 2018 and 2017 are as follows (in thousands): For the three months ended January 31, 2018 2017 CASH FLOWS FROM OPERATING ACTIVITIES Net loss from discontinued operations - (432 ) Adjustments to reconcile net loss from discontinued operations to net cash used in discontinued operating activities: Depreciation and amortization - 83 Stock based compensation expense - 442 Changes in operating assets and liabilities: Accounts receivable - 12 Accounts payable and accrued expenses - 290 Net cash provided by discontinued operating activities - 395 CASH FLOWS FROM INVESTING ACTIVITIES Cash received from sale of Majesco Sub 15 - Net cash provided by discontinued investing activities 15 - |
Subsequent Events
Subsequent Events | 3 Months Ended |
Jan. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | 15. SUBSEQUENT EVENTS Asset Purchase Agreement On March 2, 2018, the Company entered into an asset purchase agreement (the “APA”) with a Utah limited liability company (“Seller”), along with its related entity (“Seller Corp.”), wherein Seller Corp. agreed to sell the assets and rights to its preclinical research and veterinary sciences business and related real estate (as more fully described below). The business consists of a “ good laboratory practices Pursuant to the APA, the $1.6 million purchase price is payable as follows: $266,667 payable in cash and a promissory note for approximately $1.3 million. payable in 5 equal installments beginning on the six (6) month anniversary of issuance and continuing on each 6-month anniversary thereafter with interest at the rate of 3.5% per annum. Purchase and Sale Agreement Concurrently with the execution and delivery of the APA, on March 2, 2018, the Company entered into a purchase and sale agreement with Seller to purchase two parcels of real property in Cache County, Utah, consisting of approximately 1.75 combined gross acres of land including all related rights, real and personal property on the land (collectively, the “Property”). The purchase price for the Property is $2.0 million, is payable $25,000 in cash and the remaining will be deposited by the Company into escrow pursuant to a loan to be obtained by the Company from a lender of its choice. Exchange of 100% of Outstanding Series F Preferred Stock Shares and Warrants On March 6, 2018, the Company entered into separate exchange agreements (the “Exchange Agreements”) with holders (each a “Holder”, and collectively the “Holders”) of 100% of the Company’s outstanding Series F Preferred Shares, and the Company’s warrants to purchase shares of the Company’s common stock issued in connection with the Series F Preferred Shares (such “Warrants” and Series F Preferred Shares collectively referred to as the “Exchange Securities”) to exchange the Exchange Securities and unpaid dividends on the Series F Preferred Shares, for common stock (the “Exchange”). The Exchange resulted in the following issuances: (A) all outstanding Series F Preferred Shares were converted into 972,067 shares of restricted common stock at an effective conversion price of $18.26 per share of common stock (the closing price of Common Stock on the NASDAQ Capital Market on February 26, 2018); (B) the right to receive 6% dividends underlying Series F Preferred Shares was terminated and in exchange 31,324 shares of restricted common stock was issued; (C) 322,727 Warrants to purchase common stock was exchanged for 151,872 shares of restricted common stock; and (D) the Holders of the Warrants relinquished any and all other rights pursuant to the Warrants, including exercise price adjustments. As part of the Exchange, the Holders also relinquished any and all other rights related to the issuance of the Exchange Securities, the respective governing agreements and certificates of designation, including any related dividends, adjustment of conversion and exercise price, and repayment option. The existing registration rights agreement with the holders of the Series F Preferred Shares was also terminated and the holders of the Series F Preferred Shares waived the obligation of the Company to register the common shares issuable upon conversion of Series F Preferred Shares or upon exercise of the warrants, and waived any damages, penalties and defaults related to the Company failing to file or have declared effective a registration statement covering those shares. Preferred Stock Conversion and Elimination On February 6, 2018, 15,756 Series B Preferred Shares were converted into 262,606 shares of common stock. On March 6, 2018, the Company received conversion notices from holders of 100% of the outstanding Series A Preferred Shares, Series B Preferred Shares, Series E Preferred Shares and exchanged the Series F Preferred Shares and warrants and issued an aggregate of 9,100,515 shares of common stock to such holders. The Series E Preferred Shares were held by Dr. Denver Lough, the Company’s Chief Executive Officer. On March 6, 2018, the Company entered into a new registration rights agreement (the “Lough Registration Rights Agreement”) with Dr. Denver Lough, pursuant to which the Company agreed to file a registration statement to register the resale of 7,050,000 shares of Common Stock issued upon conversion of the Series E Preferred Shares within six months, to cause such registration statement to be declared effective by the Securities and Exchange Commission as promptly as possible following its filing and, with certain exceptions set forth in the Lough Registration Rights Agreement, to maintain the effectiveness of the registration statement until all of such shares have been sold or are otherwise able to be sold pursuant to Rule 144 under the Securities Act without restriction. Any sales of shares under the registration statement are subject to certain limitations as specified with more particularity in the Lough Registration Rights Agreement. On March 7, 2018, the Company filed a Certificate of Elimination with the Secretary of State of the State of Delaware terminating the Company’s Series A, Series B, Series C, Series D, Series E and Series F Preferred Stock and thereafter no shares of Company preferred stock will remain outstanding. |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Jan. 31, 2018 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation. |
Cash and Cash Equivalents | Cash and Cash Equivalents. |
Accounts Payable and Accrued Expenses | Accounts Payable and Accrued Expenses. |
Property and Equipment | Property and Equipment. |
Income Taxes | Income Taxes. |
Stock Based Compensation | Stock Based Compensation. The fair value for options issued is estimated at the date of grant using a Black-Scholes option-pricing model. The risk-free rate is derived from the U.S. Treasury yield curve in effect at the time of the grant. The volatility factor is determined based on the Company’s historical stock prices. The value of restricted stock and restricted stock unit grants is measured based on the fair market value of the Company’s common stock on the date of grant and amortized over the vesting period of, generally, six months to three years. |
Loss Per Share | Loss Per Share. |
Commitments and Contingencies | Commitments and Contingencies. |
Accounting for Warrants | Accounting for Warrants |
Change in Fair Value of Derivatives | Change in Fair Value of Derivatives. |
Revenue Recognition | Revenue Recognition. |
Estimates | Estimates. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In April 2016, the FASB issued ASU No. 2016-09, Share-Based Payment: Simplifying the Accounting for Share-Based Payments |
Recent Accounting Pronouncements | Recent Accounting Pronouncements. In February 2016, FASB issued ASU No. 2016-02, Leases (Topic 842), Leases (Topic 840) In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting. ASU 2017-09 provides clarity and reduces both (1) diversity in practice and (2) cost and complexity when applying the guidance in Topic 718, to a change to the terms or conditions of a share-based payment award. The amendments in ASU 2017-09 should be applied prospectively to an award modified on or after the adoption date. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. The Company is currently assessing the potential impact of adopting ASU 2017-09 on its consolidated financial statements and related disclosures. In July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815) I. Accounting for Certain Financial Instruments with Down Round Features; II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception, In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows - Classification of Certain Cash Receipts and Cash Payments In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)”, a new accounting standard that requires recognition of revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services. The FASB has also issued several updates to ASU 2014-09. The new standard supersedes U.S. GAAP guidance on revenue recognition and requires the use of more estimates and judgments than the present standards. It also requires additional disclosures regarding the nature, amount, timing and uncertainty of cash flows arising from contracts with customers. Topic 606 is effective for our fiscal year 2019 beginning on November 1, 2018. We are still evaluating the overall effect that the standard will have on our consolidated financial statements and accompanying notes to the consolidated financial statements. |
Prepaid Expenses and Other Cu23
Prepaid Expenses and Other Current Assets (Tables) | 3 Months Ended |
Jan. 31, 2018 | |
Prepaid Expenses And Other Current Assets | |
Schedule of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consist of the following (in thousands): January 31, 2018 October 31, 2017 Legal retainer $ - $ 15 Prepaid insurance 64 69 Other prepaids 88 126 Advances on equipment purchases 435 - Other assets 39 27 Total prepaid expenses and other current assets $ 626 $ 237 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 3 Months Ended |
Jan. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment, net, consist of the following (in thousands): January 31, 2018 October 31, 2017 Medical equipment $ 4,911 $ 2,418 Computers and software 238 211 Furniture and equipment 45 30 Total property and equipment, gross 5,194 2,659 Accumulated depreciation (742 ) (486 ) Total property and equipment, net $ 4,452 $ 2,173 |
Accounts Payable and Accrued 25
Accounts Payable and Accrued Expenses (Tables) | 3 Months Ended |
Jan. 31, 2018 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Expenses | Accounts payable and accrued expenses consist of the following (in thousands): January 31, 2018 October 31, 2017 Accounts payable $ 25 $ 25 Due to Zift - 36 Medical study and supplies 511 362 Medical equipment purchase 360 54 Salaries and other compensation 1,312 574 Legal and accounting 737 555 Other accruals 367 333 Total accounts payable and accrued expenses $ 3,312 $ 1,939 |
Preferred Shares and Common S26
Preferred Shares and Common Shares (Tables) | 3 Months Ended |
Jan. 31, 2018 | |
Equity [Abstract] | |
Schedule of Convertible Preferred Stock | Convertible preferred stock as of January 31, 2018 consisted of the following (in thousands, except share amounts): Shares Authorized Shares Issued and Outstanding Net Carrying Value Aggregate Liquidation Preference Common Shares Issuable Upon Conversion Series A 8,830,000 1,602,099 $ 391 $ 1,089 363,142 Series B 54,250 47,689 4,020 - 794,816 Series C 26,000 - - - - Series D 170,000 - - - - Series E 7,050 7,050 104,693 - 7,050,000 Series F 6,455 6,455 5,414 17,750 645,455 Other authorized, unissued 906,245 - - - - Total 10,000,000 1,663,293 $ 114,518 $ 18,839 8,853,413 Convertible preferred stock as of October 31, 2017 consisted of the following (in thousands, except share amounts): Shares Authorized Shares Issued and Outstanding Net Carrying Value Aggregate Liquidation Preference Common Shares Issuable Upon Conversion Series A 8,830,000 3,146,671 $ 769 $ 2,140 713,245 Series B 54,250 47,689 4,020 - 794,816 Series C 26,000 2,578 201 - 59,953 Series D 170,000 26,667 312 - 44,445 Series E 7,050 7,050 104,693 - 7,050,000 Series F 6,455 6,455 4,541 17,750 645,455 Other authorized, unissued 906,245 - - - - Total 10,000,000 3,237,110 $ 114,536 $ 19,890 9,307,914 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Jan. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value Assumptions of Warrants and Embedded Conversion Feature | The fair value of the bifurcated embedded conversion feature was estimated to be approximately $7.4 million and $9.2 million, respectively, at January 31, 2018 and October 31, 2017 as calculated using the Monte Carlo simulation with the following assumptions: Series F Conversion Feature January 31, 2018 October 31, 2017 Stock price $ 21.30 $ 25.87 Exercise price $ 27.50 $ 27.50 Risk-free rate 2.053 % 1.581 % Volatility 86.4 % 96.0 % Term 1.64 1.89 The fair value of the warrant liability was estimated to be approximately $2.8 million and $4.3 million, respectively, at January 31, 2018 and October 31, 2017 as calculated using the Monte Carlo simulation with the following assumptions: Warrant Liability January 31, 2018 October 31, 2017 Stock price $ 21.30 $ 25.87 Exercise price $ 30.00 $ 30.00 Risk-free rate 2.053 % 1.581 % Volatility 86.4 % 96.0 % Term 1.64 1.89 |
Schedule of Fair Value of Financial Instruments Measured on Recurring Basis | The fair value hierarchy of financial instruments, measured at fair value on a recurring basis on the consolidated balance sheets as of January 31, 2018 and October 31, 2017 is as follows (in thousands): Fair Value Measurement as of January 31, 2018 Level 1 Level 2 Level 3 Total Liabilities Warrant liability $ - $ - $ 2,765 $ 2,765 Derivative liability - - 7,363 7,363 Total $ - $ - $ 10,128 $ 10,128 Fair Value Measurement as of October 31, 2017 Level 1 Level 2 Level 3 Total Liabilities Warrant liability $ - $ - $ 4,256 $ 4,256 Derivative liability - - 9,246 9,246 Total $ - $ - $ 13,502 $ 13,502 |
Schedule of Changes in Estimated Fair Value for Level 3 Classified Derivative Warrant Liability | The following table sets forth the changes in the estimated fair value for our Level 3 classified derivative warrant liability (in thousands): 2017 Series F Preferred Stock - Warrant Liability 2017 Series F Preferred Stock - Embedded Derivative Total Warrant and Derivative Liability Fair value - October 31, 2017 $ 4,256 $ 9,246 $ 13,502 Change in fair value (1,491 ) (1,883 ) (3,374 ) Fair value - January 31, 2018 $ 2,765 $ 7,363 $ 10,128 |
Stock Based Compensation Arrang
Stock Based Compensation Arrangements (Tables) | 3 Months Ended |
Jan. 31, 2018 | |
Schedule of Share-based Compensation Related to Restricted Stock Awards and Stock Options | In the three months ended January 31, 2018 and 2017, the Company recorded stock-based compensation expense related to restricted stock awards and stock options as follows (in thousands): For the Three Months Ended January 31, 2018 2017 General and administrative expense: Continuing operations $ 8,910 $ 3,975 Discontinued operations - 442 8,910 4,417 Research and development expense: Continuing operations 2,221 - Total stock-based compensation expense $ 11,132 $ 4,417 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions for the three months ended January 31, 2018: Risk free annual interest rate 2.01%-2.65 % Expected volatility 81.32-85.54 % Expected life 5.00-6.01 Assumed dividends None |
Schedule of Share-based Compensation, Restricted Stock Activity | Restricted stock and restricted stock units activity for employees and non-employees in the fiscal year ended October 31, 2017: Number of shares Weighted-Average Grant-Date Fair Value Unvested - October 31, 2017 227,132 $ 7.83 Granted 102,500 $ 23.91 Vested (97,049 ) $ 12.53 Unvested - January 31, 2018 232,583 $ 12.95 |
Employee Stock Option [Member] | |
Schedule of Share-based Compensation, Stock Options, Activity | A summary of the Company’s employee stock option activity in the three months ended January 31, 2018 is presented below: Number of shares Weighted-Average Exercise Price Outstanding - October 31, 2017 3,525,530 $ 6.34 Granted 1,030,500 $ 24.47 Exercised (10,794 ) $ 5.10 Forfeited (34,167 ) $ 18.90 Outstanding - January 31, 2018 4,511,069 $ 10.39 Options exercisable - January 31, 2018 1,930,500 $ 5.79 Weighted-average fair value of options granted during the period $ 16.57 |
Non-Employee Stock Option [Member] | |
Schedule of Share-based Compensation, Stock Options, Activity | A summary of the Company’s non-employee stock option activity in the three months ended January 31, 2018 is presented below: Number of shares Weighted-Average Exercise Price Outstanding - October 31, 2017 293,000 $ 19.61 No activity - $ - Outstanding - January 31, 2018 293,000 $ 19.61 Options exercisable - January 31, 2018 63,292 $ 14.24 |
Loss Per Share (Tables)
Loss Per Share (Tables) | 3 Months Ended |
Jan. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Anti-dilutive Potential Shares Outstanding Activity | The table below provides total potential shares outstanding, including those that are anti-dilutive, on January 31, 2018 and 2017: January 31, 2018 2017 Shares issuable upon exercise of warrants 322,727 - Shares issuable upon conversion of preferred stock 8,853,413 2,357,232 Shares issuable upon exercise of stock options 4,804,069 2,922,020 Non-vested shares under restricted stock grants 232,583 640,184 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 3 Months Ended |
Jan. 31, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Assets and Liabilities of Discontinued Operations | The results of operations from the discontinued business for the three months ended January 31, 2018 and 2017 are as follows (in thousands): For the Three Months Ended January 31, 2018 2017 Revenues $ - $ 156 Expenses - 588 Loss from discontinued operations $ - $ (432 ) The cash flows from the discontinued business for the three months ended January 31, 2018 and 2017 are as follows (in thousands): For the three months ended January 31, 2018 2017 CASH FLOWS FROM OPERATING ACTIVITIES Net loss from discontinued operations - (432 ) Adjustments to reconcile net loss from discontinued operations to net cash used in discontinued operating activities: Depreciation and amortization - 83 Stock based compensation expense - 442 Changes in operating assets and liabilities: Accounts receivable - 12 Accounts payable and accrued expenses - 290 Net cash provided by discontinued operating activities - 395 CASH FLOWS FROM INVESTING ACTIVITIES Cash received from sale of Majesco Sub 15 - Net cash provided by discontinued investing activities 15 - |
Principal Business Activity a31
Principal Business Activity and Basis of Presentation (Details Narrative) - USD ($) $ in Thousands | Jun. 23, 2017 | Jan. 31, 2018 | Jan. 31, 2017 |
Net revenue | $ 13 | ||
Cash consideration received | 40 | ||
Remaining balance on cash receivable | $ 60 | ||
Majesco to Zift [Member] | |||
Common stock issued, outstanding percentage | 100.00% | ||
Cash consideration | $ 100 | ||
Additional monthly payments | 5 | ||
Net revenue | $ 0 |
Summary of Significant Accoun32
Summary of Significant Accounting Policies (Details Narrative) | 3 Months Ended |
Jan. 31, 2018 | |
Property and equipment, estimated useful lives | 5 years |
Restricted Stock [Member] | Minimum [Member] | |
Share-based compensation arrangement by share-based payment award, award vesting period | 6 months |
Restricted Stock [Member] | Maximum [Member] | |
Share-based compensation arrangement by share-based payment award, award vesting period | 3 years |
Going Concern (Details Narrativ
Going Concern (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 31, 2018 | Jan. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Negative cash flows from continuing operations | $ 5,073 | $ 756 |
Prepaid Expenses and Other Cu34
Prepaid Expenses and Other Current Assets - Schedule of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Jan. 31, 2018 | Oct. 31, 2017 |
Prepaid Expenses And Other Current Assets | ||
Legal retainer | $ 15 | |
Prepaid insurance | 64 | 69 |
Other prepaids | 88 | 126 |
Advances on equipment purchase | 435 | |
Other assets | 39 | 27 |
Total prepaid expenses and other current assets | $ 626 | $ 237 |
Property and Equipment, Net (De
Property and Equipment, Net (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 31, 2018 | Jan. 31, 2017 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 256 | $ 83 |
Property and Equipment, Net - S
Property and Equipment, Net - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | Jan. 31, 2018 | Oct. 31, 2017 |
Property, Plant and Equipment [Abstract] | ||
Medical equipment | $ 4,911 | $ 2,418 |
Computers and software | 238 | 211 |
Furniture and equipment | 45 | 30 |
Total property and equipment, gross | 5,194 | 2,659 |
Accumulated depreciation | (742) | (486) |
Total property and equipment, net | $ 4,452 | $ 2,173 |
Accounts Payable and Accrued 37
Accounts Payable and Accrued Expenses - Schedule of Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Thousands | Jan. 31, 2018 | Oct. 31, 2017 |
Payables and Accruals [Abstract] | ||
Accounts payable | $ 25 | $ 25 |
Due to Zift | 36 | |
Medical study and supplies | 511 | 362 |
Medical equipment purchase | 360 | 54 |
Salaries and other compensation | 1,312 | 574 |
Legal and accounting | 737 | 555 |
Other accruals | 367 | 333 |
Total accounts payable and accrued expenses | $ 3,312 | $ 1,939 |
Preferred Shares and Common S38
Preferred Shares and Common Shares (Details Narrative) - USD ($) | 3 Months Ended | |||||
Jan. 31, 2018 | Jan. 31, 2017 | Oct. 31, 2017 | Sep. 30, 2017 | Sep. 20, 2017 | Apr. 07, 2017 | |
Convertible preferred stock, shares authorized | 9,993,545 | 9,993,545 | ||||
Sales of stock | $ 40,000 | |||||
Warrant exercise price per share | $ 30 | |||||
Preferred stock value | 109,104,000 | $ 109,995,000 | ||||
Fair value of warrants | $ 3,374,000 | $ (8,000) | ||||
Series A Convertible Preferred Stock [Member] | ||||||
Preferred stock, stated value per share | $ 0.68 | |||||
Preferred stock initial conversion price, per share | 4.08 | |||||
Preferred stock current conversion price per share | $ 3 | |||||
Preferred stock conversion price, percentage | 0.00% | |||||
Convertible preferred stock, shares authorized | 8,830,000 | 8,830,000 | ||||
Preferred stock value | $ 391,000 | $ 769,000 | ||||
Series A Convertible Preferred Stock [Member] | Maximum [Member] | ||||||
Preferred stock conversion price, per share | $ 3.54 | |||||
Series A Convertible Preferred Stock [Member] | Minimum [Member] | ||||||
Beneficially ownership percentage | 4.99% | |||||
Beneficially not ownership percentage | 9.99% | |||||
Series B Convertible Preferred Stock [Member] | ||||||
Preferred stock, stated value per share | $ 140 | |||||
Preferred stock initial conversion price, per share | 8.40 | |||||
Preferred stock conversion price, per share | $ 8.40 | |||||
Convertible preferred stock, shares authorized | 54,250 | 54,250 | ||||
Preferred stock value | $ 4,020,000 | $ 4,020,000 | ||||
Series B Convertible Preferred Stock [Member] | Maximum [Member] | ||||||
Beneficially ownership percentage | 9.99% | |||||
Series B Convertible Preferred Stock [Member] | Minimum [Member] | ||||||
Beneficially ownership percentage | 4.99% | |||||
Series C Convertible Preferred Stock [Member] | ||||||
Preferred stock, stated value per share | $ 120 | |||||
Preferred stock initial conversion price, per share | 7.20 | |||||
Preferred stock current conversion price per share | 5.16 | |||||
Preferred stock conversion price, per share | $ 7.80 | |||||
Convertible preferred stock, shares authorized | 26,000 | 26,000 | ||||
Preferred stock value | $ 201,000 | |||||
Series C Convertible Preferred Stock [Member] | Maximum [Member] | ||||||
Beneficially ownership percentage | 9.99% | |||||
Preferred stock reduction conversion price, per share | $ 5.16 | |||||
Series C Convertible Preferred Stock [Member] | Minimum [Member] | ||||||
Beneficially ownership percentage | 4.99% | |||||
Series D Convertible Preferred Stock [Member] | ||||||
Preferred stock, stated value per share | $ 1,000 | |||||
Preferred stock initial conversion price, per share | $ 600 | |||||
Convertible preferred stock, shares authorized | 170,000 | 170,000 | ||||
Preferred stock value | $ 312,000 | |||||
Series D Convertible Preferred Stock [Member] | Maximum [Member] | ||||||
Beneficially ownership percentage | 9.99% | |||||
Series D Convertible Preferred Stock [Member] | Minimum [Member] | ||||||
Beneficially ownership percentage | 4.99% | |||||
Series E Convertible Preferred Stock [Member] | ||||||
Preferred stock, stated value per share | $ 1,000 | |||||
Preferred stock initial conversion price, per share | $ 1 | |||||
Convertible preferred stock, shares authorized | 7,050 | 7,050 | 7,050 | |||
Common stock closing price per share | $ 14.85 | |||||
Preferred stock value | $ 104,693,000 | $ 104,693,000 | ||||
Redeemable Series F Convertible Preferred Stock [Member] | ||||||
Offering costs | $ 356,000 | |||||
Redeemable Series F Convertible Preferred Stock [Member] | Accredited Investors [Member] | ||||||
Preferred stock, stated value per share | $ 0.001 | |||||
Sale of stock price, per share | $ 2,750 | |||||
Warrants to purchase shares of common stock | 322,727 | |||||
Warrant exercise price per share | $ 30 | |||||
Series F Preferred Stock [Member] | ||||||
Beneficially ownership percentage | 4.99% | |||||
Offering costs | $ 82,000 | |||||
Description on certificate of designation | On the two (2) year anniversary of the initial issuance date, any Series F Preferred Shares outstanding and not otherwise already converted, shall, at the option of the holder, either (i) automatically convert into common stock of the Company at the conversion price then in effect or (ii) be repaid by the Company based on the stated value of such outstanding Series F Preferred Shares. In addition, in the event that the Companys common stock attains a consolidated bid price of $45 or greater for any four (4) trading days during any eight (8) trading day period, the Series F Preferred Shares shall be automatically converted to common stock, without any further action by the holder (subject to the conversion limitation in the event that such conversion would result in such holder holding in excess of four and ninety-nine one-hundredths (4.99%) percent of the common stock of the Company). | |||||
Consolidated bid price | $ 45 | |||||
Fair value of warrants | 4,300,000 | |||||
Bifurcated embedded conversion feature | 9,300,000 | |||||
Preferred stock dividends | 13,600,000 | |||||
Preferred stock reduction in additional paid in capital | $ 904,000 | |||||
Redeemable Series F Preferred Shares [Member] | ||||||
Description on redeemable preferred shares | In the event the Company fails to file, or obtain effectiveness of, such registration statement with the specified period of time, the Company will be obligated to pay liquidated damages equal to the product of one 1% percent multiplied by the aggregate subscription amount paid by such investor for every thirty (30) days during which such filing is not made and/or effectiveness obtained, such fee being subject to certain exceptions, up to a maximum of six (6) percent. | |||||
Preferential amount | $ 2,750 | |||||
6% Series F Convertible Preferred Shares [Member] | ||||||
Preferred stock initial conversion price, per share | $ 27.50 | |||||
Preferred stock value | $ 2,750 | |||||
Series A Preferred Shares [Member] | ||||||
Number of convertible into an aggregate shares issued | 1,544,572 | |||||
Series C Preferred Shares [Member] | ||||||
Number of convertible into an aggregate shares issued | 2,578 | |||||
Series D Preferred Shares [Member] | ||||||
Number of convertible into an aggregate shares issued | 26,667 | |||||
Common Stock [Member] | ||||||
Number of convertible into an aggregate shares issued | 454,395 |
Preferred Shares and Common S39
Preferred Shares and Common Shares - Schedule of Convertible Preferred Stock (Details) - USD ($) $ in Thousands | Jan. 31, 2018 | Oct. 31, 2017 | Apr. 07, 2017 |
Preferred stock, shares authorized | 9,993,545 | 9,993,545 | |
Preferred stock, shares issued and outstanding | 1,656,838 | 3,230,655 | |
Preferred stock, net carrying value | $ 109,104 | $ 109,995 | |
Preferred stock, aggregate liquidation preference | $ 1,089 | $ 2,140 | |
Common Shares Issuable Upon Conversion | 8,853,413 | 9,307,914 | |
Series A Convertible Preferred Stock [Member] | |||
Preferred stock, shares authorized | 8,830,000 | 8,830,000 | |
Preferred stock, shares issued and outstanding | 1,602,099 | 3,146,671 | |
Preferred stock, net carrying value | $ 391 | $ 769 | |
Preferred stock, aggregate liquidation preference | $ 1,089 | $ 2,140 | |
Common Shares Issuable Upon Conversion | 363,142 | 713,245 | |
Series B Convertible Preferred Stock [Member] | |||
Preferred stock, shares authorized | 54,250 | 54,250 | |
Preferred stock, shares issued and outstanding | 47,689 | 47,689 | |
Preferred stock, net carrying value | $ 4,020 | $ 4,020 | |
Preferred stock, aggregate liquidation preference | |||
Common Shares Issuable Upon Conversion | 794,816 | 794,816 | |
Series C Convertible Preferred Stock [Member] | |||
Preferred stock, shares authorized | 26,000 | 26,000 | |
Preferred stock, shares issued and outstanding | 2,578 | ||
Preferred stock, net carrying value | $ 201 | ||
Preferred stock, aggregate liquidation preference | |||
Common Shares Issuable Upon Conversion | 59,953 | ||
Series D Convertible Preferred Stock [Member] | |||
Preferred stock, shares authorized | 170,000 | 170,000 | |
Preferred stock, shares issued and outstanding | 26,667 | ||
Preferred stock, net carrying value | $ 312 | ||
Preferred stock, aggregate liquidation preference | |||
Common Shares Issuable Upon Conversion | 44,445 | ||
Series E Convertible Preferred Stock [Member] | |||
Preferred stock, shares authorized | 7,050 | 7,050 | 7,050 |
Preferred stock, shares issued and outstanding | 7,050 | 7,050 | |
Preferred stock, net carrying value | $ 104,693 | $ 104,693 | |
Preferred stock, aggregate liquidation preference | |||
Common Shares Issuable Upon Conversion | 7,050,000 | 7,050,000 | |
Series F Convertible Preferred Stock [Member] | |||
Preferred stock, shares authorized | 6,455 | 6,455 | |
Preferred stock, shares issued and outstanding | 6,455 | 6,455 | |
Preferred stock, net carrying value | $ 5,414 | $ 4,541 | |
Preferred stock, aggregate liquidation preference | $ 17,750 | $ 17,750 | |
Common Shares Issuable Upon Conversion | 645,455 | 645,455 | |
Other Authorized, Unissued [Member] | |||
Preferred stock, shares authorized | 906,245 | 906,245 | |
Preferred stock, shares issued and outstanding | |||
Preferred stock, net carrying value | |||
Preferred stock, aggregate liquidation preference | |||
Common Shares Issuable Upon Conversion |
Fair Value Measurements (Detail
Fair Value Measurements (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Jan. 31, 2018 | Jan. 31, 2017 | Oct. 31, 2017 | Sep. 30, 2017 | |
Number of warrant to purchase shares of common stock | 322,727 | |||
Warrant exercisable price per share | $ 30 | |||
Embedded conversion feature | $ 7,400 | $ 9,200 | ||
Fair value of warrants | 3,374 | $ (8) | ||
Warrant Liability [Member] | ||||
Fair value of warrants | $ 2,800 | $ 4,300 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Fair Value Assumptions of Warrants and Embedded Conversion Feature (Details) - $ / shares | 3 Months Ended | 12 Months Ended |
Jan. 31, 2018 | Oct. 31, 2017 | |
Warrant Liability [Member] | ||
Stock Price | $ 21.30 | $ 25.87 |
Exercise price | $ 30 | $ 30 |
Risk-free rate | 2.053% | 1.581% |
Volatility | 86.40% | 96.00% |
Term | 1 year 7 months 21 days | 1 year 10 months 21 days |
Series F Conversion Feature [Member] | ||
Stock Price | $ 21.30 | $ 25.87 |
Exercise price | $ 27.50 | $ 27.50 |
Risk-free rate | 2.053% | 1.581% |
Volatility | 86.40% | 96.00% |
Term | 1 year 7 months 21 days | 1 year 10 months 21 days |
Fair Value Measurements - Sch42
Fair Value Measurements - Schedule of Fair Value of Financial Instruments Measured on Recurring Basis (Details) - USD ($) $ in Thousands | Jan. 31, 2018 | Oct. 31, 2017 |
Warrant liability | $ 2,765 | $ 4,256 |
Derivative liability | 7,363 | 9,246 |
Total | 10,128 | 13,502 |
Level 1 [Member] | ||
Warrant liability | ||
Derivative liability | ||
Total | ||
Level 2 [Member] | ||
Warrant liability | ||
Derivative liability | ||
Total | ||
Level 3 [Member] | ||
Warrant liability | 2,765 | 4,256 |
Derivative liability | 7,363 | 9,246 |
Total | $ 10,128 | $ 13,502 |
Fair Value Measurements - Chang
Fair Value Measurements - Changes in Estimated Fair Value for Level 3 Classified Derivative Warrant Liability (Details) $ in Thousands | 3 Months Ended |
Jan. 31, 2018USD ($) | |
Fair value at the beginning of period | $ 13,502 |
Change in fair value | (3,374) |
Fair value at the end of period | 10,128 |
2017 Series F Preferred Stock Warrant Liability [Member] | |
Fair value at the beginning of period | 4,256 |
Change in fair value | (1,491) |
Fair value at the end of period | 2,765 |
2017 Series F Preferred Stock Embedded Derivative [Member] | |
Fair value at the beginning of period | 9,246 |
Change in fair value | (1,883) |
Fair value at the end of period | $ 7,363 |
Stock Based Compensation Arra44
Stock Based Compensation Arrangements (Details Narrative) $ in Thousands | 3 Months Ended |
Jan. 31, 2018USD ($)shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Share-based compensation arrangement by share-based payment award, options, outstanding, intrinsic value | $ 54,700 |
Share-based compensation arrangement by share-based payment award, options, exercises in period, intrinsic value | $ 141 |
Weighted average remaining contractual term, outstanding | 9 years 1 month 6 days |
Weighted average remaining contractual term, exercisable options | 8 years 10 months 25 days |
Unrecognized compensation cost | $ 18,300 |
Unrecognized compensation cost, period for recognition | 9 months 18 days |
Fair value of restricted stock vested | $ 2,500 |
Restricted Stock [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation cost | $ 2,100 |
Unrecognized compensation cost, period for recognition | 6 months |
Non-Employee [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Fair value of stock options shares granted | shares | 17,100 |
Minimum [Member] | Restricted Stock [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Stock options vesting term | 6 months |
Minimum [Member] | Stock Option [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Stock options vesting term | 1 year |
Stock options expire term | 5 years |
Maximum [Member] | Restricted Stock [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Stock options vesting term | 3 years |
Maximum [Member] | Stock Option [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Stock options vesting term | 3 years |
Stock options expire term | 10 years |
Stock Based Compensation Arra45
Stock Based Compensation Arrangements - Schedule of Share-based Compensation Related to Restricted Stock Awards and Stock Options (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 31, 2018 | Jan. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
General and administrative expense, continuing operations | $ 8,910 | $ 3,975 |
General and administrative expense, discontinued operations | 442 | |
General and administrative expense, continuing operations and discontinued operations | 8,910 | 4,417 |
Research and development expense, continuing operations | 2,221 | |
Total stock-based compensation expense | $ 11,132 | $ 4,417 |
Stock Based Compensation Arra46
Stock Based Compensation Arrangements - Schedule of Share-based Compensation, Stock Options, Activity (Details) | 3 Months Ended |
Jan. 31, 2018$ / sharesshares | |
Employee Stock Option [Member] | |
Number of Shares, Outstanding at beginning of period | shares | 3,525,530 |
Number of Shares, Granted | shares | 1,030,500 |
Number of Shares, Exercised | shares | (10,794) |
Number of Shares, Forfeited | shares | (34,167) |
Number of Shares, Outstanding at end of period | shares | 4,511,069 |
Number of Shares, Options exercisable | shares | 1,930,500 |
Weighted Average Exercise Price, Outstanding at beginning of year | $ 6.34 |
Weighted Average Exercise Price, Granted | 24.47 |
Weighted Average Exercise Price, Exercised | 5.10 |
Weighted Average Exercise Price, Forfeited | 18.90 |
Weighted Average Exercise Price, Outstanding at end of year | 10.39 |
Weighted Average Exercise Price, Options exercisable | 5.79 |
Weighted-average grant date fair value of options granted during the year | $ 16.57 |
Non-Employee Stock Option [Member] | |
Number of Shares, Outstanding at beginning of period | shares | 293,000 |
Number of Shares, Outstanding at end of period | shares | 293,000 |
Number of Shares, Options exercisable | shares | 63,292 |
Weighted Average Exercise Price, Outstanding at beginning of year | $ 19.61 |
Weighted Average Exercise Price, Outstanding at end of year | 19.61 |
Weighted Average Exercise Price, Options exercisable | $ 14.24 |
Stock Based Compensation Arra47
Stock Based Compensation Arrangements - Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions (Details) | 3 Months Ended |
Jan. 31, 2018 | |
Risk free annual interest rate, minimum | 2.01% |
Risk free annual interest rate, maximum | 2.65% |
Expected volatility, minimum | 81.32% |
Expected volatility, maximum | 85.54% |
Assumed dividends | 0.00% |
Minimum [Member] | |
Expected term of options (years) | 5 years |
Maximum [Member] | |
Expected term of options (years) | 6 years 4 days |
Stock Based Compensation Arra48
Stock Based Compensation Arrangements - Schedule of Share-based Compensation, Restricted Stock Activity (Details) - Restricted Stock [Member] | 3 Months Ended |
Jan. 31, 2018$ / sharesshares | |
Number of Shares, Unvested at beginning of period | shares | 227,132 |
Number of Shares, Granted | shares | 102,500 |
Number of Shares, Vested | shares | (97,049) |
Number of Shares, Unvested at end of period | shares | 232,583 |
Weighted-Average Grant-Date Fair Value Unvested at beginning of period | $ / shares | $ 7.83 |
Weighted-Average Grant-Date Fair Value, Granted | $ / shares | 23.91 |
Weighted-Average Grant-Date Fair Value, Vested | $ / shares | 12.53 |
Weighted-Average Grant-Date Fair Value, Unvested at end of period | $ / shares | $ 12.95 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - Tax Cuts and Jobs Act [Member] $ in Thousands | 3 Months Ended |
Jan. 31, 2018USD ($) | |
Operating Loss Carryforwards [Line Items] | |
Corporate statutory tax rate | 35.00% |
Reduction corporate statutory tax rate | 21.00% |
Reduction in deferred tax asset and valuation allowance | $ 2,200 |
Loss Per Share - Schedule of An
Loss Per Share - Schedule of Anti-dilutive Potential Shares Outstanding Activity (Details) - shares | 3 Months Ended | |
Jan. 31, 2018 | Jan. 31, 2017 | |
Shares Issuable Upon Exercise of Warrants [Member] | ||
Antidilutive shares | 322,727 | |
Shares Issuable Upon Conversion of Preferred Stock [Member] | ||
Antidilutive shares | 8,853,413 | 2,357,232 |
Shares Issuable Upon Exercise of Stock Options [Member] | ||
Antidilutive shares | 4,804,069 | 2,922,020 |
Non-vested Shares Under Restricted Stock Grants [Member] | ||
Antidilutive shares | 232,583 | 640,184 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) | Dec. 27, 2017USD ($)ft² | Jan. 31, 2018USD ($) | Jan. 31, 2017USD ($) |
Litigation damages sought | $ 1,300,000 | ||
Rent expense | 249,000 | $ 17,000 | |
Salt Lake City Commercial Lease [Member] | |||
Rent expense | $ 1,178,285 | ||
Lease term | 5 years | ||
Lease rental square feet | ft² | 178,528 | ||
Lease of percentage rate | 3.00% | ||
Hazlet, New Jersey [Member] | |||
Rent expense | $ 1,100 | ||
Operating lease expiration date | Mar. 31, 2018 | ||
Salt Lake City, Utah [Member] | |||
Rent expense | $ 24,044 | ||
Operating lease expiration date | Mar. 31, 2018 |
Related Parties (Details Narrat
Related Parties (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 31, 2018 | Jan. 31, 2017 | |
Transfer Agent [Member] | ||
Related party transaction strategic consulting services fee from transaction with related party monthly | $ 0 | $ 2 |
Discontinued Operations - Sched
Discontinued Operations - Schedule of Assets and Liabilities of Discontinued Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jan. 31, 2018 | Jan. 31, 2017 | |
Loss from discontinued operations | $ (432) | |
Net loss from discontinued operations | (432) | |
Net cash provided by discontinued operating activities | 395 | |
Net cash provided by discontinued investing activities | 15 | |
Majesco Entertainment Company [Member] | ||
Revenues | 156 | |
Expenses | 588 | |
Loss from discontinued operations | (432) | |
Net loss from discontinued operations | (432) | |
Depreciation and amortization | 83 | |
Stock based compensation expense | 442 | |
Accounts receivable | 12 | |
Accounts payable and accrued expenses | 290 | |
Net cash provided by discontinued operating activities | 395 | |
Cash received from sale of Majesco Sub | 15 | |
Net cash provided by discontinued investing activities | $ 15 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) | Mar. 06, 2018$ / sharesshares | Mar. 06, 2018$ / sharesshares | Mar. 02, 2018USD ($)a | Feb. 06, 2018shares | Jan. 31, 2018 | Sep. 30, 2017shares |
Number of warrants exchanged to purchase common stock | 322,727 | |||||
Series F Preferred Stock [Member] | ||||||
Ownership percentage | 4.99% | |||||
Subsequent Event [Member] | ||||||
Number of warrants exchanged to purchase common stock | 322,727 | 322,727 | ||||
Subsequent Event [Member] | Warrants [Member] | ||||||
Conversion of preferred stock into common stock, number shares issued | 9,100,515 | |||||
Subsequent Event [Member] | Restricted Stock [Member] | ||||||
Conversion of preferred stock into common stock, number shares issued | 31,324 | |||||
Number of warrants exchanged to purchase common stock | 151,872 | 151,872 | ||||
Subsequent Event [Member] | Series F Preferred Stock [Member] | ||||||
Ownership percentage | 100.00% | 100.00% | ||||
Conversion of preferred stock into common stock, number shares issued | 9,100,515 | |||||
Conversion price per share | $ / shares | $ 18.26 | $ 18.26 | ||||
Preferred stock dividend percentage | 6.00% | |||||
Conversion of preferred stock into common stock, shares converted | 972,067 | |||||
Subsequent Event [Member] | Series E Preferred Shares [Member] | ||||||
Conversion of preferred stock into common stock, number shares issued | 7,050,000 | 262,606 | ||||
Conversion of preferred stock into common stock, shares converted | 15,756 | |||||
Subsequent Event [Member] | Asset Purchase Agreement [Member] | ||||||
Assets purchase price | $ | $ 1,600,000 | |||||
Purchase price payable | $ | 266,667 | |||||
Promissory note | $ | $ 1,300,000 | |||||
Purchase price payable interest rate per annum | 3.50% | |||||
Subsequent Event [Member] | Purchase and Sale Agreement [Member] | ||||||
Assets purchase price | $ | $ 2,000,000 | |||||
Purchase price payable | $ | $ 25,000 | |||||
Area of land | a | 1.75 |