Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Apr. 30, 2018 | Jun. 13, 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 | Apr. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --10-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 21,304,370 | |
Trading Symbol | COOL | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,018 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Apr. 30, 2018 | Oct. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 37,838 | $ 17,667 |
Prepaid expenses and other current assets | 294 | 237 |
Receivable from Zift | 45 | 60 |
Total current assets | 38,177 | 17,964 |
Non-current assets: | ||
Property and equipment, net | 6,342 | 2,173 |
Security deposits - non-current | 137 | |
Receivable from Zift, non-current | 15 | |
Total non-current assets | 6,479 | 2,188 |
TOTAL ASSETS | 44,656 | 20,152 |
Current liabilities: | ||
Accounts payable and accrued expenses | 3,007 | 1,939 |
Warrant liability and embedded derivative | 13,502 | |
Total current liabilities | 3,007 | 15,441 |
Total liabilities | 3,007 | 15,441 |
Commitments and Contingencies | ||
Redeemable convertible preferred stock - Series F - 0 and 6,455 shares authorized, issued and outstanding at April 30, 2018 and October 31, 2017; liquidation preference - $0 and $17,750. | 4,541 | |
STOCKHOLDERS' EQUITY: | ||
Convertible preferred stock - 10,000,000 and 9,993,545 shares authorized, 0 and 3,230,655 shares issued and outstanding at April 30, 2018 and October 31, 2017, aggregate liquidation preference $0 and $2,140, respectively | 109,995 | |
Common stock - $.001 par value; 250,000,000 shares authorized; 18,843,488 and 6,515,524 shares issued and outstanding at April 30, 2018 and October 31, 2017, respectively | 19 | 7 |
Additional paid-in capital | 326,343 | 149,173 |
Accumulated deficit | (284,713) | (259,005) |
Total stockholders' equity | 41,649 | 170 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 44,656 | $ 20,152 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Apr. 30, 2018 | Oct. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Redeemable convertible preferred stock, shares authorized | 0 | 6,455 |
Redeemable convertible preferred stock, shares issued | 0 | 6,455 |
Redeemable convertible preferred stock, shares outstanding | 0 | 6,455 |
Redeemable convertible preferred stock, liquidation preference | $ 0 | $ 17,750 |
Convertible preferred stock, shares authorized | 10,000,000 | 9,993,545 |
Convertible preferred stock, shares issued | 0 | 3,230,655 |
Convertible preferred stock, shares outstanding | 0 | 3,230,655 |
Convertible preferred stock, liquidation preference | $ 0 | $ 2,140 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 18,843,488 | 6,515,524 |
Common stock, shares outstanding | 18,843,488 | 6,515,524 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Apr. 30, 2018 | Apr. 30, 2017 | Apr. 30, 2018 | Apr. 30, 2017 | |
Income Statement [Abstract] | ||||
Net revenues | $ 3 | $ 16 | ||
Cost of sales | 1 | 2 | ||
Gross profit | 2 | 14 | ||
Operating costs and expenses | ||||
Product research and development | 5,621 | 12,223 | ||
Research and development - intellectual property acquired | 104,693 | 104,693 | ||
General and administrative | 5,938 | 5,686 | 16,836 | 10,911 |
Operating costs and expenses total | 11,559 | 110,379 | 29,059 | 115,604 |
Other (expenses) income | ||||
Interest income | 18 | 3 | 43 | 7 |
Change in fair value of derivatives | 440 | 3,814 | (8) | |
Loss on extinguishment of warrant liability | (520) | (520) | ||
Net loss from continuing operations | (11,619) | (110,376) | (25,708) | (115,605) |
Gain (loss) from discontinued operations | 16 | (416) | ||
Net loss | (11,619) | (110,360) | (25,708) | (116,021) |
Deemed dividend - accretion of discount on Series F preferred stock | (386) | (1,290) | ||
Deemed dividend - exchange of Series F preferred stock | (7,057) | (7,057) | ||
Cumulative dividends on Series F preferred stock | 98 | (373) | ||
Net loss attributable to common stockholders | $ (19,160) | $ (110,360) | $ (34,428) | $ (116,021) |
Net loss per share, basic and diluted: | ||||
Loss from continuing operations | $ (0.89) | $ (23.51) | $ (2.63) | $ (28.83) |
Gain (loss) from discontinued operations | 0.01 | (0.10) | ||
Deemed dividend - accretion of discount on preferred stock | (0.03) | (0.13) | ||
Deemed dividend - exchange of Series F preferred stock | (0.54) | (0.72) | ||
Cumulative dividends on Series F preferred stock | (0.01) | (0.04) | ||
Net loss attributable to common stockholders | $ (1.47) | $ (23.50) | $ (3.52) | $ (28.93) |
Weighted average shares outstanding, basic and diluted: | 13,055,314 | 4,695,298 | 9,781,962 | 4,009,853 |
Condensed Consolidated Stateme5
Condensed Consolidated Statement of Changes in Stockholders' Equity (Unaudited) - 6 months ended Apr. 30, 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 | $ (769) | $ 1 | 768 | ||
Conversion of Series A preferred stock to common stock, shares | (3,146,671) | 713,036 | |||
Conversion of Series B preferred stock to common stock | $ (4,020) | $ 1 | 4,019 | ||
Conversion of Series B preferred stock to common stock, shares | (47,689) | 794,820 | |||
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 | |||
Conversion of Series E preferred stock to common stock | $ (104,693) | $ 7 | 104,686 | ||
Conversion of Series E preferred stock to common stock, shares | (7,050) | 7,050,000 | |||
Exchange of Series F preferred stock and dividends to common stock | $ 1 | 13,060 | 13,061 | ||
Exchange of Series F preferred stock and dividends to common stock, shares | 1,103,391 | ||||
Extinguishment of warrant liability | 3,045 | 3,045 | |||
Extinguishment of warrant liability, shares | 151,871 | ||||
Option exercises | 91 | 91 | |||
Option exercises, shares | 25,417 | ||||
Proceeds received from issuance of common stock, net of issuance costs of $2,782 | $ 2 | 34,593 | 34,595 | ||
Proceeds received from issuance of common stock, net of issuance costs of $2,782, shares | 2,335,937 | ||||
Stock-based compensation expense | 17,752 | 17,752 | |||
Stock-based compensation expense, shares | 137,387 | ||||
Deemed dividend - accretion of discount on Series F preferred stock | (1,290) | (1,290) | |||
Cumulative dividends on Series F preferred stock | (373) | 373 | |||
Series F preferred stock dividends paid in common stock | 306 | 306 | |||
Series F preferred stock dividends paid in common stock, shares | 11,710 | ||||
Net loss | (25,708) | (25,708) | |||
Balance at Apr. 30, 2018 | $ 19 | $ 326,343 | $ (284,713) | $ 41,649 | |
Balance, shares at Apr. 30, 2018 | 18,843,488 |
Condensed Consolidated Stateme6
Condensed Consolidated Statement of Changes in Stockholders' Equity (Parenthetical) $ in Thousands | Apr. 30, 2018USD ($) |
Statement of Stockholders' Equity [Abstract] | |
Proceeds from issuance of common stock, net of issuance costs | $ 2,782 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Apr. 30, 2018 | Apr. 30, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (25,708,000) | $ (116,021,000) |
Loss from discontinued operations | (416,000) | |
Loss from continuing operations | (25,708,000) | (115,605,000) |
Adjustments to reconcile net loss from continuing operations to net cash used in continuing operating activities: | ||
Loss on extinguishment of warrant liability | 520,000 | |
Depreciation and amortization | 606,000 | 173,000 |
Stock based compensation expense | 17,752,000 | 7,780,000 |
Research and development - intellectual property acquired | 104,693,000 | |
Change in fair value of derivatives | (3,814,000) | 8,000 |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other current assets | 16,000 | |
Security deposits - non-current | (137,000) | (279,000) |
Accounts payable and accrued expenses | 737,000 | 32,000 |
Net cash used in continuing operating activities | (10,028,000) | (3,198,000) |
Net cash provided by discontinued operating activities | 547,000 | |
Net cash used in operating activities | (10,028,000) | (2,651,000) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchase of property and equipment | (4,517,000) | (1,961,000) |
Net cash used in continuing investing activities | (4,517,000) | (1,961,000) |
Net cash provided by discontinued investing activities | 30,000 | |
Net cash used in investing activities | (4,487,000) | (1,961,000) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from stock options exercised | 91,000 | 588,000 |
Net proceeds from the sale of common stock | 34,595,000 | 2,278,000 |
Net cash provided by financing activities | 34,686,000 | 2,866,000 |
Net increase (decrease) in cash and cash equivalents | 20,171,000 | (1,746,000) |
Cash and cash equivalents - beginning of period | 17,667,000 | 6,523,000 |
Cash and cash equivalents - end of period | 37,838,000 | 4,777,000 |
Supplemental schedule of non-cash investing and financing activities: | ||
Conversion of Series A preferred stock to common stock | 769,000 | 816,000 |
Conversion of Series B preferred stock to common stock | 4,020,000 | 514,000 |
Conversion of Series C preferred stock to common stock | 201,000 | 441,000 |
Conversion of Series D preferred stock to common stock | 312,000 | 1,127,000 |
Conversion of Series E preferred stock to common stock | 104,693,000 | |
Exchange of Series F preferred stock for common stock | 13,061,000 | |
Extinguishment of warrant liability | 2,525,000 | |
Unpaid liability for acquisition of property and equipment | 385,000 | 83,000 |
Warrant exchange for common stock shares | 78,000 | |
Deemed dividend - accretion of discount on preferred stock | 1,290,000 | |
Cumulative dividends on Series F preferred stock | (373,000) | |
Series F preferred stock dividends paid in common stock | $ 306,000 |
Principal Business Activity and
Principal Business Activity and Basis of Presentation | 6 Months Ended |
Apr. 30, 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 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 | 6 Months Ended |
Apr. 30, 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. Capitalized Software Development Costs 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 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) |
Liquidity
Liquidity | 6 Months Ended |
Apr. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Liquidity | 3 . LIQUIDITY 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 $10.0 million for the six months ended April 30, 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. On April 12, 2018, the Company completed a public offering providing for the issuance and sale of 2,335,937 shares of the Company’s common stock, par value $0.001 per share, at an offering price of $16.00 per share, for net proceeds of approximately $34.6 million, after deducting offering expenses payable by the Company (see Note 7). On June 7, 2018, the Company completed an underwritten offering with Cantor Fitzgerald & Co., as underwriter, providing for the issuance and sale of 2,455,882 shares of the Company’s common stock, par value $0.001 per share, at an offering price of $23.65 per share, for net proceeds of approximately $58 million, after deducting offering expenses payable by the Company (see Note 14). |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 6 Months Ended |
Apr. 30, 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): April 30, 2018 October 31, 2017 Legal retainer $ - $ 15 Prepaid insurance 121 69 Other prepaids 149 126 Other assets 24 27 Total prepaid expenses and other current assets $ 294 $ 237 |
Property and Equipment, Net
Property and Equipment, Net | 6 Months Ended |
Apr. 30, 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): April 30, 2018 October 31, 2017 Medical equipment $ 6,272 $ 2,418 Computers and software 999 211 Furniture and equipment 163 30 Total property and equipment, gross 7,434 2,659 Accumulated depreciation (1,092 ) (486 ) Total property and equipment, net $ 6,342 $ 2,173 Depreciation expense for the three months ended April 30, 2018 and 2017 was approximately $350,000 and $101,000, respectively. Depreciation expense for the six months ended April 30, 2018 and 2017 was approximately $606,000 and $184,000, respectively. |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 6 Months Ended |
Apr. 30, 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): April 30, 2018 October 31, 2017 Accounts payable $ 20 $ 25 Due to Zift - 36 Medical study and supplies 48 362 Medical equipment purchase 385 54 Salaries and other compensation 637 574 Legal and accounting 978 555 Consulting 283 - Other accruals 656 333 Total accounts payable and accrued expenses $ 3,007 $ 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 | 6 Months Ended |
Apr. 30, 2018 | |
Equity [Abstract] | |
Preferred Shares and Common Shares | 7. PREFERRED SHARES AND COMMON SHARES Common Stock Issuance On April 12, 2018, the Company completed a public offering providing for the issuance and sale of 2,335,937 shares of the Company’s common stock, par value $0.001 per share, at an offering price of $16.00 per share, for net proceeds of approximately $34.6 million, after deducting offering expenses payable by the Company. Exchange of 100% of Outstanding Series F Preferred Stock Shares and Warrants 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 each convertible into one hundred (100) shares of the Company’s common stock, and (ii) a two-year warrant to purchase up to 322,727 shares of the Company’s common stock, at an exercise price of $30.00 per share. The Series F Preferred Shares were 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 Series F Preferred Share was $2,750 and the initial conversion price was $27.50 per share, each subject to adjustment for stock splits, stock dividends, recapitalizations, combinations, subdivisions or other similar events. On the two 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, will 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. The warrants issued in connection with the Series F Preferred Shares were determined to be 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 was determined to not be clearly and closely related to the identified host instrument and, as such, was 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. 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 972,070 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 31,321 shares of restricted common stock were issued; (C) 322,727 Warrants to purchase common stock were exchanged for 151,871 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. The exchange of all outstanding Series F Preferred Shares, and the holders’ right to receive 6% dividends, for common stock of the Company was recognized as follows: Fair market value of 1,003,391 shares of common stock issued at $20.05 (Company’s closing stock price on March 5, 2018) in exchange for Series F Preferred Shares and accrued dividends $ 20,117,990 Carrying value of Series F Preferred Shares at March 5, 2018, including dividends (5,898,274 ) Carrying value of bifurcated conversion option at March 5, 2018 (7,162,587 ) Deemed dividend on Series F Preferred Shares exchange $ 7,057,129 As the Warrants were classified as a liability, the exchange of the Warrants for common shares should be recognized as a liability extinguishment. As of March 5, 2018, the fair market value of the 151,871 common shares issued in the Exchange was $3,045,034 and the fair value of the common stock warrant liability was $2,525,567 resulting in a loss on extinguishment of warrant liability of $519,467 during the three and six months ended April 30, 2018. The Company recognized accretion of the discount to the stated value of the Series F Preferred Shares of approximately $386,000 and $1,290,000 in the three months ended April 30, 2018 (through March 5, 2018) and six months ended April 30, 2018, respectively, 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 Stock Conversion and Elimination On February 6, 2018, 15,756 shares of Series B Convertible Preferred Stock (“Series B Preferred Shares”) were converted into 262,606 shares of common stock. On March 6, 2018, the Company received conversion notices (in accordance with original terms) from holders of 100% of the outstanding shares of Series A Convertible Preferred Stock (the “Series A Preferred Shares”), Series B Preferred Shares and Series E Convertible Preferred Stock (the “Series E Preferred Shares”) and issued an aggregate of 7,945,250 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. 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. In April 2018, Dr. Lough entered into a lock up agreement for 180 days, which prohibits him from selling any shares that may be registered until October 2018. 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. As a result, the Company has 10,000,000 shares of authorized and unissued preferred stock with no designation as to series. Convertible preferred stock activity for the six months ended April 30, 2018 consisted of the following: Shares Outstanding – First Quarter 2018 -Preferred Stock Conversions First Quarter 2018 – Common Stock Shares Issued Second Quarter 2018 -Preferred Stock Conversions and Series F Exchange Second Quarter 2018 – Common Stock Shares Issued Year to Date 2018 -Preferred Stock Conversions and Series F Exchange Year to Date 2018 – Common Stock Shares Issued Series A 3,146,671 (1,544,572 ) 350,000 (1,602,099 ) 363,036 (3,146,671 ) 713,036 Series B 47,689 - - (47,689 ) 794,820 (47,689 ) 794,820 Series C 2,578 (2,578 ) 59,950 - - (2,578 ) 59,950 Series D 26,667 (26,667 ) 44,445 - (26,667 ) 44,445 Series E 7,050 - - (7,050 ) 7,050,000 (7,050 ) 7,050,000 Series F 6,455 - - (6,455 ) 972,070 (6,455 ) 972,070 Total 3,237,110 (1,573,817 ) 454,395 (1,663,293 ) 9,179,926 (3,237,110 ) 9,634,321 |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Apr. 30, 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 were exercisable at $30.00 per share and expire in two years. The warrants were liabilities pursuant to ASC 815. The warrant agreement provided 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 contained an embedded conversion feature that was not clearly and closely related to the identified host instrument and, as such, was recognized as a derivative liability measured at fair value. The Company classified these derivatives on the consolidated balance sheet as a current liability. As noted in Note 7. above, both the warrants and the Series F Preferred Shares were exchanged for common stock on March 6, 2018. The fair value of the bifurcated embedded conversion feature was estimated to be approximately $7.2 million and $9.2 million, respectively, at March 5, 2018 and October 31, 2017 as calculated using a Monte Carlo simulation with the following assumptions: Series F Conversion Feature March 5, 2018 October 31, 2017 Stock price $ 20.05 $ 25.87 Exercise price $ 27.50 $ 27.50 Risk-free rate 2.158 % 1.581 % Volatility 88.2 % 96.0 % Term 1.54 1.89 The fair value of the warrant liability was estimated to be approximately $2.5 million and $4.3 million, respectively, at March 5, 2018 and October 31, 2017 as calculated using the Monte Carlo simulation with the following assumptions: Warrant Liability March 5, 2018 October 31, 2017 Stock price $ 20.05 $ 25.87 Exercise price $ 30.00 $ 30.00 Risk-free rate 2.158 % 1.581 % Volatility 88.2 % 96.0 % Term 1.54 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 October 31, 2017 is as follows (in thousands): 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 As of April 30, 2018, there were no outstanding financial instruments. The following table sets forth the changes in the estimated fair value for our Level 3 classified derivative liabilities (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 (1,731 ) (2,083 ) (3,814 ) Exchange / conversion to common shares (2,525 ) (7,163 ) (9,688 ) Fair value - April 30, 2018 $ - $ - $ - |
Stock Based Compensation Arrang
Stock Based Compensation Arrangements | 6 Months Ended |
Apr. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Based Compensation Arrangements | 9. STOCK BASED COMPENSATION ARRANGEMENTS In the three and six months ended April 30, 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 April 30, 2018 2017 General and administrative expense: Continuing operations $ 5,155 $ 3,805 Discontinued operations - 402 5,155 4,207 Research and development expense: Continuing operations 1,465 - Total stock-based compensation expense $ 6,620 $ 4,207 For the Six Months Ended April 30, 2018 2017 General and administrative expense: Continuing operations $ 14,065 $ 7,780 Discontinued operations - 844 14,065 8,624 Research and development expense: Continuing operations 3,687 - Total stock-based compensation expense $ 17,752 $ 8,624 A summary of the Company’s employee stock option activity in the six months ended April 30, 2018 is presented below: Number of shares Weighted-Average Exercise Price Outstanding - October 31, 2017 3,525,530 $ 6.34 Granted 1,127,500 $ 23.84 Exercised (25,794 ) $ 3.95 Forfeited (34,167 ) $ 18.90 Outstanding - April 30, 2018 4,593,069 $ 10.55 Options exercisable - April 30, 2018 2,450,666 $ 6.76 Weighted-average fair value of options granted during the period $ 16.15 A summary of the Company’s non-employee stock option activity in the six months ended April 30, 2018 is presented below: Number of shares Weighted-Average Exercise Price Outstanding - October 31, 2017 293,000 $ 19.61 No activity - $ - Outstanding - April 30, 2018 293,000 $ 19.61 Options exercisable - April 30, 2018 99,917 $ 16.21 Stock options are generally granted to employees or non-employees at exercise prices equal to the fair market value of the Company’s common 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 six months ended April 30, 2018 was approximately $18.2 million. The intrinsic value of options outstanding at April 30, 2018 was $41.6 million. The intrinsic value of options exercised during the six months ended April 30, 2018 was $344,000. The weighted average remaining contractual term of outstanding and exercisable options at April 30, 2018 was 8.9 years and 8.7 years, respectively. As of April 30, 2018, there was approximately $12.6 million of unrecognized compensation cost related to stock options, which is expected to be recognized over a remaining weighted-average vesting period of 0.6 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 six months ended April 30, 2018: Risk free annual interest rate 2.01%-2.97 % Expected volatility 80.86-85.54 % Expected life 5.00-6.01 Assumed dividends None Restricted stock and restricted stock units activity for employees and non-employees in the six months ended April 30, 2018: Number of shares Weighted-Average Grant-Date Fair Value Unvested - October 31, 2017 227,132 $ 7.83 Granted 137,387 $ 22.02 Vested (144,315 ) $ 11.82 Unvested - April 30, 2018 220,204 $ 14.06 The total fair value of restricted stock and restricted stock units granted during the six months ended April 30, 2018 was approximately $3.0 million. The fair 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 April 30, 2018, there was approximately $1.9 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 | 6 Months Ended |
Apr. 30, 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 estimated that its deferred tax asset and related valuation allowance were each reduced by approximately $2.2 million. 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 the Series E Preferred Stock in connection with its original acquisition of the PolarityTE, Inc., a Nevada corporation in April 2017, 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 | 6 Months Ended |
Apr. 30, 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 and six months ended April 30, 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 shares 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 April 30, 2018 and 2017: April 30, 2018 2017 Shares issuable upon conversion of preferred stock - 9,281,275 Shares issuable upon exercise of stock options 4,886,069 3,028,512 Non-vested shares under restricted stock grants 220,204 380,341 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Apr. 30, 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 Sub, 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 finding that the accused products did not literally infringe the asserted patent and that plaintiff was barred from pursing infringement under the doctrine of equivalents due to prosecution history estoppel. The plaintiff appealed that decision to the Court of Appeals for the Federal Circuit. On April 9, 2018, the Court of Appeals for the Federal Circuit affirmed the judgment of the District Court for the Western District of Washington. On May 7, 2018, the plaintiff filed a petition for panel rehearing and rehearing en banc by the Court of Appeals, which is pending. On June 23, 2017, as part of a purchase agreement, liabilities and claims relating to this litigation were assumed by Zift. The Company cannot be certain about the outcome of the appeal, or whether litigation regarding the assumption of liabilities by Zift 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, 2019. The Company also leased space in Salt Lake City, Utah at a cost of approximately $24,000 per month under a lease agreement that expired on March 31, 2018. The Company will continue to lease space in Salt Lake City, Utah at a cost of approximately $12,400 per month under a lease agreement that expires on September 30, 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 in Salt Lake City, Utah. 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 April 30, 2018 and 2017 was approximately $389,000 and $42,000, respectively. Rent expense for the six months ended April 30, 2018 and 2017 was approximately $638,000 and $60,000, respectively. The Company has entered into employment agreements with key executives that contain severance terms and change of control provisions. |
Discontinued Operations
Discontinued Operations | 6 Months Ended |
Apr. 30, 2018 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | 13. DISCONTINUED OPERATIONS The results of operations from the discontinued business for the three and six months ended April 30, 2018 and 2017 are as follows (in thousands): For the Three Months Ended For the Six Months Ended April 30, April 30, 2018 2017 2018 2017 Revenues $ - $ 259 $ - $ 415 Expenses - 243 - 831 Gain (loss) from discontinued operations $ - $ 16 $ - $ (416 ) The cash flows from the discontinued business for the six months ended April 30, 2018 and 2017 are as follows (in thousands): For the six months ended April 30, 2018 2017 CASH FLOWS FROM OPERATING ACTIVITIES Net loss from discontinued operations - (416 ) Adjustments to reconcile net loss from discontinued operations to net cash used in discontinued operating activities: Depreciation and amortization - 11 Stock based compensation expense - 844 Amortization of capitalized software development costs and license fees - 50 Changes in operating assets and liabilities: Accounts receivable - 48 Accounts payable and accrued expenses - 10 Net cash provided by discontinued operating activities - 547 CASH FLOWS FROM INVESTING ACTIVITIES Cash received from sale of Majesco Sub 30 - Net cash provided by discontinued investing activities 30 - |
Subsequent Events
Subsequent Events | 6 Months Ended |
Apr. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | 14. SUBSEQUENT EVENTS Asset Purchase Agreement On March 2, 2018, the Company, along with its wholly owned subsidiary, Utah CRO Services, Inc., a Nevada corporation (“Acquisition Co.”), entered into an asset purchase agreement (the “APA”) with Ibex Group, L.L.C., a Utah limited liability company, and Ibex Preclinical Research, Inc . Under the APA, the Company purchased from Seller the assets and rights to its preclinical research and veterinary sciences business and related real estate. The business consists of a “ good laboratory practices The purchase price was $1.6 million in cash, of which $266,667 was paid at closing and the balance satisfied by a promissory note. The promissory note payable to Seller is for a total amount of $1,333,333 and is payable in five equal installments beginning on the six-month anniversary of issuance and continuing each six-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 the Seller to purchase two parcels of real property in Cache County, Utah, consisting of approximately 1.75 combined gross acres of land, together with the buildings, structures, fixtures, and personal property located on the real property (the “Property”). The transaction also closed on May 3, 2018. The purchase price for the Property was $2.0 million, which was paid in cash at closing. Common Stock Issuance On June 7, 2018, the Company completed an underwritten offering with Cantor Fitzgerald & Co., as underwriter, providing for the issuance and sale of 2,455,882 shares of the Company’s common stock, par value $0.001 per share, at an offering price of $23.65 per share, for net proceeds of approximately $58 million, after deducting offering expenses payable by the Company. |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Apr. 30, 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. |
Capitalized Software Development Costs | Capitalized Software Development Costs |
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 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) |
Prepaid Expenses and Other Cu23
Prepaid Expenses and Other Current Assets (Tables) | 6 Months Ended |
Apr. 30, 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): April 30, 2018 October 31, 2017 Legal retainer $ - $ 15 Prepaid insurance 121 69 Other prepaids 149 126 Other assets 24 27 Total prepaid expenses and other current assets $ 294 $ 237 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 6 Months Ended |
Apr. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment, net, consist of the following (in thousands): April 30, 2018 October 31, 2017 Medical equipment $ 6,272 $ 2,418 Computers and software 999 211 Furniture and equipment 163 30 Total property and equipment, gross 7,434 2,659 Accumulated depreciation (1,092 ) (486 ) Total property and equipment, net $ 6,342 $ 2,173 |
Accounts Payable and Accrued 25
Accounts Payable and Accrued Expenses (Tables) | 6 Months Ended |
Apr. 30, 2018 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Expenses | Accounts payable and accrued expenses consist of the following (in thousands): April 30, 2018 October 31, 2017 Accounts payable $ 20 $ 25 Due to Zift - 36 Medical study and supplies 48 362 Medical equipment purchase 385 54 Salaries and other compensation 637 574 Legal and accounting 978 555 Consulting 283 - Other accruals 656 333 Total accounts payable and accrued expenses $ 3,007 $ 1,939 |
Preferred Shares and Common S26
Preferred Shares and Common Shares (Tables) | 6 Months Ended |
Apr. 30, 2018 | |
Equity [Abstract] | |
Schedule of Deemed Dividend Preferred Shares Exchange | The exchange of all outstanding Series F Preferred Shares, and the holders’ right to receive 6% dividends, for common stock of the Company was recognized as follows: Fair market value of 1,003,391 shares of common stock issued at $20.05 (Company’s closing stock price on March 5, 2018) in exchange for Series F Preferred Shares and accrued dividends $ 20,117,990 Carrying value of Series F Preferred Shares at March 5, 2018, including dividends (5,898,274 ) Carrying value of bifurcated conversion option at March 5, 2018 (7,162,587 ) Deemed dividend on Series F Preferred Shares exchange $ 7,057,129 |
Schedule of Convertible Preferred Stock | Convertible preferred stock activity for the six months ended April 30, 2018 consisted of the following: Shares Outstanding – First Quarter 2018 -Preferred Stock Conversions First Quarter 2018 – Common Stock Shares Issued Second Quarter 2018 -Preferred Stock Conversions and Series F Exchange Second Quarter 2018 – Common Stock Shares Issued Year to Date 2018 -Preferred Stock Conversions and Series F Exchange Year to Date 2018 – Common Stock Shares Issued Series A 3,146,671 (1,544,572 ) 350,000 (1,602,099 ) 363,036 (3,146,671 ) 713,036 Series B 47,689 - - (47,689 ) 794,820 (47,689 ) 794,820 Series C 2,578 (2,578 ) 59,950 - - (2,578 ) 59,950 Series D 26,667 (26,667 ) 44,445 - (26,667 ) 44,445 Series E 7,050 - - (7,050 ) 7,050,000 (7,050 ) 7,050,000 Series F 6,455 - - (6,455 ) 972,070 (6,455 ) 972,070 Total 3,237,110 (1,573,817 ) 454,395 (1,663,293 ) 9,179,926 (3,237,110 ) 9,634,321 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Apr. 30, 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 $7.2 million and $9.2 million, respectively, at March 5, 2018 and October 31, 2017 as calculated using a Monte Carlo simulation with the following assumptions: Series F Conversion Feature March 5, 2018 October 31, 2017 Stock price $ 20.05 $ 25.87 Exercise price $ 27.50 $ 27.50 Risk-free rate 2.158 % 1.581 % Volatility 88.2 % 96.0 % Term 1.54 1.89 The fair value of the warrant liability was estimated to be approximately $2.5 million and $4.3 million, respectively, at March 5, 2018 and October 31, 2017 as calculated using the Monte Carlo simulation with the following assumptions: Warrant Liability March 5, 2018 October 31, 2017 Stock price $ 20.05 $ 25.87 Exercise price $ 30.00 $ 30.00 Risk-free rate 2.158 % 1.581 % Volatility 88.2 % 96.0 % Term 1.54 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 October 31, 2017 is as follows (in thousands): 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 liabilities (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 (1,731 ) (2,083 ) (3,814 ) Exchange / conversion to common shares (2,525 ) (7,163 ) (9,688 ) Fair value - April 30, 2018 $ - $ - $ - |
Stock Based Compensation Arra28
Stock Based Compensation Arrangements (Tables) | 6 Months Ended |
Apr. 30, 2018 | |
Schedule of Share-based Compensation Related to Restricted Stock Awards and Stock Options | In the three and six months ended April 30, 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 April 30, 2018 2017 General and administrative expense: Continuing operations $ 5,155 $ 3,805 Discontinued operations - 402 5,155 4,207 Research and development expense: Continuing operations 1,465 - Total stock-based compensation expense $ 6,620 $ 4,207 For the Six Months Ended April 30, 2018 2017 General and administrative expense: Continuing operations $ 14,065 $ 7,780 Discontinued operations - 844 14,065 8,624 Research and development expense: Continuing operations 3,687 - Total stock-based compensation expense $ 17,752 $ 8,624 |
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 six months ended April 30, 2018: Risk free annual interest rate 2.01%-2.97 % Expected volatility 80.86-85.54 % 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 six months ended April 30, 2018: Number of shares Weighted-Average Grant-Date Fair Value Unvested - October 31, 2017 227,132 $ 7.83 Granted 137,387 $ 22.02 Vested (144,315 ) $ 11.82 Unvested - April 30, 2018 220,204 $ 14.06 |
Employee Stock Option [Member] | |
Schedule of Share-based Compensation, Stock Options, Activity | A summary of the Company’s employee stock option activity in the six months ended April 30, 2018 is presented below: Number of shares Weighted-Average Exercise Price Outstanding - October 31, 2017 3,525,530 $ 6.34 Granted 1,127,500 $ 23.84 Exercised (25,794 ) $ 3.95 Forfeited (34,167 ) $ 18.90 Outstanding - April 30, 2018 4,593,069 $ 10.55 Options exercisable - April 30, 2018 2,450,666 $ 6.76 Weighted-average fair value of options granted during the period $ 16.15 |
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 six months ended April 30, 2018 is presented below: Number of shares Weighted-Average Exercise Price Outstanding - October 31, 2017 293,000 $ 19.61 No activity - $ - Outstanding - April 30, 2018 293,000 $ 19.61 Options exercisable - April 30, 2018 99,917 $ 16.21 |
Loss Per Share (Tables)
Loss Per Share (Tables) | 6 Months Ended |
Apr. 30, 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 April 30, 2018 and 2017: April 30, 2018 2017 Shares issuable upon conversion of preferred stock - 9,281,275 Shares issuable upon exercise of stock options 4,886,069 3,028,512 Non-vested shares under restricted stock grants 220,204 380,341 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 6 Months Ended |
Apr. 30, 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 and six months ended April 30, 2018 and 2017 are as follows (in thousands): For the Three Months Ended For the Six Months Ended April 30, April 30, 2018 2017 2018 2017 Revenues $ - $ 259 $ - $ 415 Expenses - 243 - 831 Gain (loss) from discontinued operations $ - $ 16 $ - $ (416 ) The cash flows from the discontinued business for the six months ended April 30, 2018 and 2017 are as follows (in thousands): For the six months ended April 30, 2018 2017 CASH FLOWS FROM OPERATING ACTIVITIES Net loss from discontinued operations - (416 ) Adjustments to reconcile net loss from discontinued operations to net cash used in discontinued operating activities: Depreciation and amortization - 11 Stock based compensation expense - 844 Amortization of capitalized software development costs and license fees - 50 Changes in operating assets and liabilities: Accounts receivable - 48 Accounts payable and accrued expenses - 10 Net cash provided by discontinued operating activities - 547 CASH FLOWS FROM INVESTING ACTIVITIES Cash received from sale of Majesco Sub 30 - Net cash provided by discontinued investing activities 30 - |
Principal Business Activity a31
Principal Business Activity and Basis of Presentation (Details Narrative) - USD ($) $ in Thousands | Jun. 23, 2017 | Apr. 30, 2018 | Apr. 30, 2017 | Apr. 30, 2018 | Apr. 30, 2017 |
Net revenue | $ 3 | $ 16 | |||
Cash consideration received | 55 | ||||
Remaining balance on cash receivable | $ 45 | ||||
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) | 6 Months Ended |
Apr. 30, 2018 | |
Minimum [Member] | |
Property and equipment, estimated useful lives | 3 years |
Maximum [Member] | |
Property and equipment, estimated useful lives | 8 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 |
Liquidity (Details Narrative)
Liquidity (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Apr. 12, 2018 | Apr. 30, 2018 | Apr. 30, 2017 | Oct. 31, 2017 |
Negative cash flows from continuing operations | $ 10,028 | $ 3,198 | ||
Public offering share value | 2,335,937 | |||
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | |
Public offering price per share | $ 16 | |||
Proceeds for public offering | $ 34,600 | |||
Cantor Fitzgerald & Co., [Member] | June 7, 2018 [Member] | ||||
Public offering share value | 2,455,882 | |||
Common stock, par value | $ 0.001 | |||
Public offering price per share | $ 23.65 | |||
Proceeds for public offering | $ 58,000 |
Prepaid Expenses and Other Cu34
Prepaid Expenses and Other Current Assets - Schedule of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Apr. 30, 2018 | Oct. 31, 2017 |
Prepaid Expenses And Other Current Assets | ||
Legal retainer | $ 15 | |
Prepaid insurance | 121 | 69 |
Other prepaids | 149 | 126 |
Other assets | 24 | 27 |
Total prepaid expenses and other current assets | $ 294 | $ 237 |
Property and Equipment, Net (De
Property and Equipment, Net (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Apr. 30, 2018 | Apr. 30, 2017 | Apr. 30, 2018 | Apr. 30, 2017 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 350 | $ 101 | $ 606 | $ 184 |
Property and Equipment, Net - S
Property and Equipment, Net - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | Apr. 30, 2018 | Oct. 31, 2017 |
Property, Plant and Equipment [Abstract] | ||
Medical equipment | $ 6,272 | $ 2,418 |
Computers and software | 999 | 211 |
Furniture and equipment | 163 | 30 |
Total property and equipment, gross | 7,434 | 2,659 |
Accumulated depreciation | (1,092) | (486) |
Total property and equipment, net | $ 6,342 | $ 2,173 |
Accounts Payable and Accrued 37
Accounts Payable and Accrued Expenses - Schedule of Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Thousands | Apr. 30, 2018 | Oct. 31, 2017 |
Payables and Accruals [Abstract] | ||
Accounts payable | $ 20 | $ 25 |
Due to Zift | 36 | |
Medical study and supplies | 48 | 362 |
Medical equipment purchase | 385 | 54 |
Salaries and other compensation | 637 | 574 |
Legal and accounting | 978 | 555 |
Consulting | 283 | |
Other accruals | 656 | 333 |
Total accounts payable and accrued expenses | $ 3,007 | $ 1,939 |
Preferred Shares and Common S38
Preferred Shares and Common Shares (Details Narrative) - USD ($) | Apr. 12, 2018 | Mar. 06, 2018 | Mar. 05, 2018 | Feb. 06, 2018 | Sep. 20, 2017 | Apr. 30, 2018 | Apr. 30, 2018 | Apr. 30, 2017 | Mar. 07, 2018 | Oct. 31, 2017 | Sep. 30, 2017 |
Public offering share value | 2,335,937 | ||||||||||
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | |||||||
Sale of stock price, per share | $ 16 | ||||||||||
Proceeds for public offering | $ 34,600,000 | ||||||||||
Sales of stock | $ 55,000 | ||||||||||
Warrant exercise price per share | $ 30 | ||||||||||
Preferred stock value | $ 109,995,000 | ||||||||||
Fair value of warrants | $ 3,045,034 | $ 3,814,000 | $ (8,000) | ||||||||
Number of warrants exchanged to purchase common stock | 151,871 | 322,727 | |||||||||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | 10,000,000 | 9,993,545 | |||||||
Warrant Liability [Member] | |||||||||||
Fair value of warrants | $ 2,525,567 | ||||||||||
Gain/loss on extinguishment of warrant liability | $ 519,467 | $ 519,467 | |||||||||
6% Series F Convertible Preferred Stock [Member] | |||||||||||
Preferred stock value | $ 2,750 | $ 2,750 | |||||||||
Preferred stock initial conversion price, per share | $ 27.50 | $ 27.50 | |||||||||
6% Series F Convertible Preferred Stock [Member] | Accredited Investors [Member] | |||||||||||
Sale of stock price, per share | $ 2,750 | ||||||||||
Sales of stock | $ 17,750,000 | ||||||||||
Preferred stock, stated value per share | $ 0.001 | ||||||||||
Conversion of stock shares converted | 100 | ||||||||||
Warrants to purchase shares of common stock | 322,727 | ||||||||||
Warrant exercise price per share | $ 30 | ||||||||||
Series F Preferred Stock [Member] | |||||||||||
Conversion of stock shares converted | 972,070 | ||||||||||
Description on certificate of designation | On the two 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, will 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. | ||||||||||
Fair value of warrants | $ 4,300,000 | ||||||||||
Bifurcated embedded conversion feature | 9,300,000 | ||||||||||
Preferred stock dividends | 13,600,000 | ||||||||||
Beneficially ownership percentage | 100.00% | ||||||||||
Conversion price, per share | $ 18.26 | ||||||||||
Preferred stock dividend percentage | 6.00% | ||||||||||
Number of warrants exchanged to purchase common stock | 322,727 | ||||||||||
Preferred stock reduction in additional paid in capital | $ 1,290,000 | 1,290,000 | |||||||||
Series F Preferred Stock [Member] | Through March 5, 2018 | |||||||||||
Preferred stock reduction in additional paid in capital | $ 386,000 | $ 386,000 | |||||||||
Series F Preferred Stock [Member] | Restricted Stock [Member] | |||||||||||
Conversion of preferred stock into common stock, number shares issued | 31,321 | ||||||||||
Number of warrants exchanged to purchase common stock | 151,871 | ||||||||||
Series B Preferred Shares [Member] | |||||||||||
Conversion of stock shares converted | 15,756 | ||||||||||
Conversion of preferred stock into common stock, number shares issued | 262,606 | ||||||||||
Series E Preferred Shares [Member] | |||||||||||
Conversion of preferred stock into common stock, number shares issued | 7,945,250 | ||||||||||
Series E Preferred Shares [Member] | Lough Registration Rights Agreement [Member] | |||||||||||
Conversion of preferred stock into common stock, number shares issued | 7,050,000 |
Preferred Shares and Common S39
Preferred Shares and Common Shares - Schedule of Deemed Dividend Preferred Shares Exchange (Details) | 6 Months Ended |
Apr. 30, 2018USD ($) | |
Equity [Abstract] | |
Fair market value of 1,003,391 shares of common stock issued at $20.05 (Company's closing stock price on March 5, 2018) in exchange for Series F Preferred Shares and accrued dividends | $ 20,117,990 |
Carrying value of Series F Preferred Shares at March 5, 2018, including dividends | (5,898,274) |
Carrying value of bifurcated conversion option at March 5, 2018 | (7,162,587) |
Deemed dividend on Series F Preferred Shares exchange | $ 7,057,129 |
Preferred Shares and Common S40
Preferred Shares and Common Shares - Schedule of Deemed Dividend Preferred Shares Exchange (Details) (Parenthetical) - Series F Preferred Stock [Member] | Mar. 05, 2018$ / sharesshares |
Fair market value of common stock issued, shares | shares | 1,003,391 |
Common stock price per share | $ / shares | $ 20.05 |
Preferred Shares and Common S41
Preferred Shares and Common Shares - Schedule of Convertible Preferred Stock (Details) - shares | Apr. 30, 2018 | Oct. 31, 2017 |
Preferred stock, shares outstanding | 0 | 3,230,655 |
Common stock shares, issued | 18,843,488 | 6,515,524 |
Series A Preferred Shares [Member] | ||
Preferred stock, shares outstanding | 3,146,671 | |
Series A Convertible Preferred Stock [Member] | First Quarter [Member] | ||
Preferred stock, conversions | (1,544,572) | |
Series A Convertible Preferred Stock [Member] | Second Quarter [Member] | Series F Exchange [Member] | ||
Preferred stock, conversions | (1,602,099) | |
Series A Convertible Preferred Stock [Member] | Year to Date 2018 [Member] | Series F Exchange [Member] | ||
Preferred stock, conversions | (3,146,671) | |
Series A Common Stock [Member] | First Quarter [Member] | ||
Common stock shares, issued | 350,000 | |
Series A Common Stock [Member] | Second Quarter [Member] | Series F Exchange [Member] | ||
Common stock shares, issued | 363,036 | |
Series A Common Stock [Member] | Year to Date 2018 [Member] | Series F Exchange [Member] | ||
Common stock shares, issued | 713,036 | |
Series B Preferred Shares [Member] | ||
Preferred stock, shares outstanding | 47,689 | |
Series B Convertible Preferred Stock [Member] | First Quarter [Member] | ||
Preferred stock, conversions | ||
Series B Convertible Preferred Stock [Member] | Second Quarter [Member] | Series F Exchange [Member] | ||
Preferred stock, conversions | (47,689) | |
Series B Convertible Preferred Stock [Member] | Year to Date 2018 [Member] | Series F Exchange [Member] | ||
Preferred stock, conversions | (47,689) | |
Series B Common Stock [Member] | First Quarter [Member] | ||
Common stock shares, issued | ||
Series B Common Stock [Member] | Second Quarter [Member] | Series F Exchange [Member] | ||
Common stock shares, issued | 794,820 | |
Series B Common Stock [Member] | Year to Date 2018 [Member] | Series F Exchange [Member] | ||
Common stock shares, issued | 794,820 | |
Series C Preferred Shares [Member] | ||
Preferred stock, shares outstanding | 2,578 | |
Series C Convertible Preferred Stock [Member] | First Quarter [Member] | ||
Preferred stock, conversions | (2,578) | |
Series C Convertible Preferred Stock [Member] | Second Quarter [Member] | Series F Exchange [Member] | ||
Preferred stock, conversions | ||
Series C Convertible Preferred Stock [Member] | Year to Date 2018 [Member] | Series F Exchange [Member] | ||
Preferred stock, conversions | (2,578) | |
Series C Common Stock [Member] | First Quarter [Member] | ||
Common stock shares, issued | 59,950 | |
Series C Common Stock [Member] | Second Quarter [Member] | Series F Exchange [Member] | ||
Common stock shares, issued | ||
Series C Common Stock [Member] | Year to Date 2018 [Member] | Series F Exchange [Member] | ||
Common stock shares, issued | 59,950 | |
Series D Preferred Shares [Member] | ||
Preferred stock, shares outstanding | 26,667 | |
Series D Convertible Preferred Stock [Member] | First Quarter [Member] | ||
Preferred stock, conversions | (26,667) | |
Series D Convertible Preferred Stock [Member] | Second Quarter [Member] | Series F Exchange [Member] | ||
Preferred stock, conversions | ||
Series D Convertible Preferred Stock [Member] | Year to Date 2018 [Member] | Series F Exchange [Member] | ||
Preferred stock, conversions | (26,667) | |
Series D Common Stock [Member] | First Quarter [Member] | ||
Common stock shares, issued | 44,445 | |
Series D Common Stock [Member] | Second Quarter [Member] | Series F Exchange [Member] | ||
Common stock shares, issued | ||
Series D Common Stock [Member] | Year to Date 2018 [Member] | Series F Exchange [Member] | ||
Common stock shares, issued | 44,445 | |
Series E Preferred Shares [Member] | ||
Preferred stock, shares outstanding | 7,050 | |
Series E Convertible Preferred Stock [Member] | First Quarter [Member] | ||
Preferred stock, conversions | ||
Series E Convertible Preferred Stock [Member] | Second Quarter [Member] | Series F Exchange [Member] | ||
Preferred stock, conversions | (7,050) | |
Series E Convertible Preferred Stock [Member] | Year to Date 2018 [Member] | Series F Exchange [Member] | ||
Preferred stock, conversions | (7,050) | |
Series E Common Stock [Member] | First Quarter [Member] | ||
Common stock shares, issued | ||
Series E Common Stock [Member] | Second Quarter [Member] | Series F Exchange [Member] | ||
Common stock shares, issued | 7,050,000 | |
Series E Common Stock [Member] | Year to Date 2018 [Member] | Series F Exchange [Member] | ||
Common stock shares, issued | 7,050,000 | |
Series F Preferred Stock [Member] | ||
Preferred stock, shares outstanding | 6,455 | |
Series F Convertible Preferred Stock [Member] | First Quarter [Member] | ||
Preferred stock, conversions | ||
Series F Convertible Preferred Stock [Member] | Second Quarter [Member] | Series F Exchange [Member] | ||
Preferred stock, conversions | (6,455) | |
Series F Convertible Preferred Stock [Member] | Year to Date 2018 [Member] | Series F Exchange [Member] | ||
Preferred stock, conversions | (6,455) | |
Series F Common Stock [Member] | First Quarter [Member] | ||
Common stock shares, issued | ||
Series F Common Stock [Member] | Second Quarter [Member] | Series F Exchange [Member] | ||
Common stock shares, issued | 972,070 | |
Series F Common Stock [Member] | Year to Date 2018 [Member] | Series F Exchange [Member] | ||
Common stock shares, issued | 972,070 | |
Outstanding [Member] | ||
Preferred stock, shares outstanding | 3,237,110 | |
Preferred Stock [Member] | First Quarter [Member] | ||
Preferred stock, conversions | (1,573,817) | |
Preferred Stock [Member] | Second Quarter [Member] | Series F Exchange [Member] | ||
Preferred stock, conversions | (1,663,293) | |
Preferred Stock [Member] | Year to Date 2018 [Member] | Series F Exchange [Member] | ||
Preferred stock, conversions | (3,237,110) | |
Common Stock [Member] | First Quarter [Member] | ||
Common stock shares, issued | 454,395 | |
Common Stock [Member] | Second Quarter [Member] | Series F Exchange [Member] | ||
Common stock shares, issued | 9,179,926 | |
Common Stock [Member] | Year to Date 2018 [Member] | Series F Exchange [Member] | ||
Common stock shares, issued | 9,634,321 |
Fair Value Measurements (Detail
Fair Value Measurements (Details Narrative) - USD ($) | Mar. 05, 2018 | Mar. 05, 2018 | Sep. 30, 2017 | Apr. 30, 2018 | Apr. 30, 2017 | Oct. 31, 2017 |
Number of warrant to purchase shares of common stock | 151,871 | 151,871 | 322,727 | |||
Warrant exercisable price per share | $ 30 | |||||
Warrant term | 2 years | |||||
Embedded conversion feature | $ 7,200,000 | $ 7,200,000 | $ 9,200,000 | |||
Fair value of warrants | $ 3,045,034 | $ 3,814,000 | $ (8,000) | |||
Warrant Liability [Member] | ||||||
Fair value of warrants | $ 2,500,000 | $ 4,300,000 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Fair Value Assumptions of Warrants and Embedded Conversion Feature (Details) - Monte Carlo Simulation [Member] - $ / shares | Mar. 05, 2018 | Oct. 31, 2017 |
Measurement Input, Share Price [Member] | Warrant Liability [Member] | ||
Fair value assumptions, measurement input, per share | $ 20.05 | $ 25.87 |
Measurement Input, Exercise Price [Member] | Warrant Liability [Member] | ||
Fair value assumptions, measurement input, per share | $ 30 | $ 30 |
Measurement Input, Risk Free Interest Rate [Member] | Warrant Liability [Member] | ||
Fair value assumptions, measurement input, percentages | 2.158% | 1.581% |
Measurement Input, Price Volatility [Member] | Warrant Liability [Member] | ||
Fair value assumptions, measurement input, percentages | 88.20% | 96.00% |
Measurement Input, Expected Term [Member] | Warrant Liability [Member] | ||
Fair value assumptions, measurement input, term | 1 year 6 months 14 days | 1 year 10 months 21 days |
Series F Conversion Feature [Member] | Measurement Input, Share Price [Member] | ||
Fair value assumptions, measurement input, per share | $ 20.05 | $ 25.87 |
Series F Conversion Feature [Member] | Measurement Input, Exercise Price [Member] | ||
Fair value assumptions, measurement input, per share | $ 27.50 | $ 27.50 |
Series F Conversion Feature [Member] | Measurement Input, Risk Free Interest Rate [Member] | ||
Fair value assumptions, measurement input, percentages | 2.158% | 1.581% |
Series F Conversion Feature [Member] | Measurement Input, Price Volatility [Member] | ||
Fair value assumptions, measurement input, percentages | 88.20% | 96.00% |
Series F Conversion Feature [Member] | Measurement Input, Expected Term [Member] | ||
Fair value assumptions, measurement input, term | 1 year 6 months 14 days | 1 year 10 months 21 days |
Fair Value Measurements - Sch44
Fair Value Measurements - Schedule of Fair Value of Financial Instruments Measured On Recurring Basis (Details) $ in Thousands | Oct. 31, 2017USD ($) |
Warrant liability | $ 4,256 |
Derivative liability | 9,246 |
Total | 13,502 |
Level 1 [Member] | |
Warrant liability | |
Derivative liability | |
Total | |
Level 2 [Member] | |
Warrant liability | |
Derivative liability | |
Total | |
Level 3 [Member] | |
Warrant liability | 4,256 |
Derivative liability | 9,246 |
Total | $ 13,502 |
Fair Value Measurements - Sch45
Fair Value Measurements - Schedule of Changes in Estimated Fair Value for Level 3 Classified Derivative Warrant Liability (Details) $ in Thousands | 6 Months Ended |
Apr. 30, 2018USD ($) | |
Fair value at the beginning of period | $ 13,502 |
Change in fair value | (3,814) |
Exchange / conversion to common shares | (9,688) |
Fair value at the end of period | |
2017 Series F Preferred Stock Warrant Liability [Member] | |
Fair value at the beginning of period | 4,256 |
Change in fair value | (1,731) |
Exchange / conversion to common shares | (2,525) |
Fair value at the end of period | |
2017 Series F Preferred Stock Embedded Derivative [Member] | |
Fair value at the beginning of period | 9,246 |
Change in fair value | (2,083) |
Exchange / conversion to common shares | (7,163) |
Fair value at the end of period |
Stock Based Compensation Arra46
Stock Based Compensation Arrangements (Details Narrative) $ in Thousands | 6 Months Ended |
Apr. 30, 2018USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Fair value of stock options shares granted | $ 18,200 |
Share-based compensation arrangement by share-based payment award, options, outstanding, intrinsic value | 41,600 |
Share-based compensation arrangement by share-based payment award, options, exercises in period, intrinsic value | $ 344 |
Weighted average remaining contractual term, outstanding | 8 years 10 months 25 days |
Weighted average remaining contractual term, exercisable options | 8 years 8 months 12 days |
Unrecognized compensation cost | $ 12,600 |
Unrecognized compensation cost, period for recognition | 7 months 6 days |
Restricted Stock [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation cost | $ 1,900 |
Unrecognized compensation cost, period for recognition | 6 months |
Restricted Stock Units (RSUs) [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Fair value of stock options shares granted | $ 3,000 |
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 Arra47
Stock Based Compensation Arrangements - Schedule of Share-based Compensation Related to Restricted Stock Awards and Stock Options (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Apr. 30, 2018 | Apr. 30, 2017 | Apr. 30, 2018 | Apr. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||
General and administrative expense, continuing operations | $ 5,155 | $ 3,805 | $ 14,065 | $ 7,780 |
General and administrative expense, discontinued operations | 402 | 844 | ||
General and administrative expense, continuing operations and discontinued operations | 5,155 | 4,207 | 14,065 | 8,624 |
Research and development expense, continuing operations | 1,465 | 3,687 | ||
Total stock-based compensation expense | $ 6,620 | $ 4,207 | $ 17,752 | $ 8,624 |
Stock Based Compensation Arra48
Stock Based Compensation Arrangements - Schedule of Share-based Compensation, Stock Options, Activity (Details) | 6 Months Ended |
Apr. 30, 2018$ / sharesshares | |
Employee Stock Option [Member] | |
Number of Shares, Outstanding at beginning of period | shares | 3,525,530 |
Number of Shares, Granted | shares | 1,127,500 |
Number of Shares, Exercised | shares | (25,794) |
Number of Shares, Forfeited | shares | (34,167) |
Number of Shares, Outstanding at end of period | shares | 4,593,069 |
Number of Shares, Options exercisable | shares | 2,450,666 |
Weighted Average Exercise Price, Outstanding at beginning of year | $ 6.34 |
Weighted Average Exercise Price, Granted | 23.84 |
Weighted Average Exercise Price, Exercised | 3.95 |
Weighted Average Exercise Price, Forfeited | 18.90 |
Weighted Average Exercise Price, Outstanding at end of year | 10.55 |
Weighted Average Exercise Price, Options exercisable | 6.76 |
Weighted-average fair value of options granted during the period | $ 16.15 |
Non-Employee Stock Option [Member] | |
Number of Shares, Outstanding at beginning of period | shares | 293,000 |
Number of Shares, Granted | shares | |
Number of Shares, Exercised | shares | |
Number of Shares, Forfeited | shares | |
Number of Shares, Outstanding at end of period | shares | 293,000 |
Number of Shares, Options exercisable | shares | 99,917 |
Weighted Average Exercise Price, Outstanding at beginning of year | $ 19.61 |
Weighted Average Exercise Price, Granted | |
Weighted Average Exercise Price, Exercised | |
Weighted Average Exercise Price, Forfeited | |
Weighted Average Exercise Price, Outstanding at end of year | 19.61 |
Weighted Average Exercise Price, Options exercisable | $ 16.21 |
Stock Based Compensation Arra49
Stock Based Compensation Arrangements - Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions (Details) | 6 Months Ended |
Apr. 30, 2018 | |
Risk free annual interest rate, minimum | 2.01% |
Risk free annual interest rate, maximum | 2.97% |
Expected volatility, minimum | 80.86% |
Expected volatility, maximum | 85.54% |
Assumed dividends | 0.00% |
Minimum [Member] | |
Expected life | 5 years |
Maximum [Member] | |
Expected life | 6 years 4 days |
Stock Based Compensation Arra50
Stock Based Compensation Arrangements - Schedule of Share-based Compensation, Restricted Stock Activity (Details) - Restricted Stock [Member] | 6 Months Ended |
Apr. 30, 2018$ / sharesshares | |
Number of Shares, Unvested at beginning of period | shares | 227,132 |
Number of Shares, Granted | shares | 137,387 |
Number of Shares, Vested | shares | (144,315) |
Number of Shares, Unvested at end of period | shares | 220,204 |
Weighted-Average Grant-Date Fair Value Unvested at beginning of period | $ / shares | $ 7.83 |
Weighted-Average Grant-Date Fair Value, Granted | $ / shares | 22.02 |
Weighted-Average Grant-Date Fair Value, Vested | $ / shares | 11.82 |
Weighted-Average Grant-Date Fair Value, Unvested at end of period | $ / shares | $ 14.06 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - Tax Cuts and Jobs Act [Member] - USD ($) $ in Thousands | Dec. 22, 2017 | Apr. 30, 2018 |
Operating Loss Carryforwards [Line Items] | ||
Corporate statutory tax rate | 21.00% | |
Income tax rate reconciliation description | 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. | |
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 | 6 Months Ended | |
Apr. 30, 2018 | Apr. 30, 2017 | |
Shares Issuable Upon Conversion of Preferred Stock [Member] | ||
Antidilutive shares | 9,281,275 | |
Shares Issuable Upon Exercise of Stock Options [Member] | ||
Antidilutive shares | 4,886,069 | 3,028,512 |
Non-vested Shares Under Restricted Stock Grants [Member] | ||
Antidilutive shares | 220,204 | 380,341 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) | Dec. 27, 2017USD ($)ft² | Apr. 30, 2018USD ($) | Apr. 30, 2017USD ($) | Apr. 30, 2018USD ($) | Apr. 30, 2017USD ($) |
Litigation damages sought | $ 1,300,000 | ||||
Rent expense | $ 389,000 | $ 42,000 | 638,000 | $ 60,000 | |
Salt Lake City Commercial Lease [Member] | |||||
Lease rental square feet | ft² | 178,528 | ||||
Rent expense | $ 1,178,285 | ||||
Lease term | 5 years | ||||
Lease of percentage rate | 3.00% | ||||
Hazlet, New Jersey [Member] | |||||
Lease cost per month | $ 1,100 | ||||
Operating lease expiration date | Mar. 31, 2019 | ||||
Salt Lake City, Utah [Member] | |||||
Lease cost per month | $ 24,000 | ||||
Operating lease expiration date | Mar. 31, 2018 | ||||
Salt Lake City, Utah [Member] | Lease Agreement [Member] | |||||
Lease cost per month | $ 12,400 | ||||
Operating lease expiration date | Sep. 30, 2018 |
Discontinued Operations - Sched
Discontinued Operations - Schedule of Assets and Liabilities of Discontinued Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Apr. 30, 2018 | Apr. 30, 2017 | Apr. 30, 2018 | Apr. 30, 2017 | |
Loss from discontinued operations | $ 16 | $ (416) | ||
Net loss from discontinued operations | 416 | |||
Net cash provided by discontinued operating activities | 547 | |||
Net cash provided by discontinued investing activities | 30 | |||
Majesco Entertainment Company [Member] | ||||
Revenues | 259 | 415 | ||
Expenses | 243 | 831 | ||
Loss from discontinued operations | $ 16 | (416) | ||
Net loss from discontinued operations | (416) | |||
Depreciation and amortization | 11 | |||
Stock based compensation expense | 844 | |||
Amortization of capitalized software development costs and license fees | 50 | |||
Accounts receivable | 48 | |||
Accounts payable and accrued expenses | 10 | |||
Net cash provided by discontinued operating activities | 547 | |||
Cash received from sale of Majesco Sub | 30 | |||
Net cash provided by discontinued investing activities | $ 30 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) | Jun. 07, 2018USD ($)$ / sharesshares | May 03, 2018USD ($)a | Apr. 12, 2018$ / sharesshares | Apr. 30, 2018USD ($)$ / shares | Apr. 30, 2017USD ($) | Oct. 31, 2017$ / shares |
Public offering share value | shares | 2,335,937 | |||||
Common stock, par value | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | |||
Public offering price per share | $ / shares | $ 16 | |||||
Proceeds from issuance of common stock | $ 34,595,000 | $ 2,278,000 | ||||
Cantor Fitzgerald & Co., [Member] | Subsequent Event [Member] | ||||||
Public offering share value | shares | 2,455,882 | |||||
Common stock, par value | $ / shares | $ 0.001 | |||||
Public offering price per share | $ / shares | $ 23.65 | |||||
Proceeds from issuance of common stock | $ 58,000,000 | |||||
Asset Purchase Agreement [Member] | Subsequent Event [Member] | ||||||
Assets purchase price | $ 1,600,000 | |||||
Purchase price payable | 266,667 | |||||
Promissory note | $ 1,333,333 | |||||
Purchase price payable interest rate per annum | 3.50% | |||||
Purchase and Sale Agreement [Member] | Subsequent Event [Member] | ||||||
Assets purchase price | $ 2,000,000 | |||||
Area of land | a | 1.75 |