Filed 18 Mar 19

Document and Entity Information

Document and Entity Information - USD ($) $ in Thousands2 Months Ended
Dec. 31, 2018Mar. 07, 2019Jun. 30, 2018
Document And Entity Information
Entity Registrant NamePOLARITYTE, INC.
Entity Central Index Key0001076682
Document Type10-KT
Document Period End DateDec. 31,
2018
Amendment Flagfalse
Current Fiscal Year End Date--12-31
Entity Well-known Seasoned IssuerNo
Entity Voluntary FilersNo
Entity Current Reporting StatusYes
Entity Filer CategoryAccelerated Filer
Entity Small Business Flagtrue
Entity Emerging Growth Companyfalse
Entity Ex Transition Periodfalse
Entity Shell Companyfalse
Entity Public Float $ 319,000
Entity Common Stock, Shares Outstanding21,688,858
Trading SymbolPTE
Document Fiscal Period FocusFY
Document Fiscal Year Focus2018

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($) $ in ThousandsDec. 31, 2018Oct. 31, 2018Oct. 31, 2017
Current assets:
Cash and cash equivalents $ 55,673 $ 70,961 $ 17,667
Short-term investments6,162
Accounts receivable712 940
Inventory336 238
Prepaid expenses and other current assets1,432 1,163 297
Total current assets64,315 73,302 17,964
Non-current assets:
Property and equipment, net13,736 12,927 2,173
Intangible assets, net924 957
Goodwill278 278
Other assets913 378 15
Total non-current assets15,851 14,540 2,188
TOTAL ASSETS80,166 87,842 20,152
Current liabilities:
Accounts payable and accrued expenses6,508 4,363 1,939
Other current liabilities316 286
Current portion of long-term note payable529 519
Deferred revenue170 150
Warrant liability and embedded derivative 13,502
Total current liabilities7,523 5,318 15,441
Long-term note payable, net479 736
Other long-term liabilities131 126
Total liabilities8,133 6,180 15,441
Commitments and Contingencies
Redeemable convertible preferred stock - 0, 0, and 6,455 shares authorized, issued and outstanding at December 31, 2018, October 31, 2018 and 2017, respectively; liquidation preference - $0, $0, and $17,750, respectively 4,541
STOCKHOLDERS' EQUITY:
Convertible preferred stock - 25,000,000 shares authorized, 0, 0, and 3,230,655 shares issued and outstanding at December 31, 2018, October 31, 2018 and 2017; aggregate liquidation preference $0, $0, and $2,140, respectively 109,995
Common stock - $.001 par value; 250,000,000 shares authorized; 21,447,088, 21,423,999, and 6,515,524 shares issued and outstanding at December 31, 2018, October 31, 2018 and 2017, respectively21 21 7
Additional paid-in capital414,840 406,087 149,173
Accumulated other comprehensive income36
Accumulated deficit(342,864)(324,446)(259,005)
Total stockholders' equity72,033 81,662 170
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 80,166 $ 87,842 $ 20,152

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in ThousandsDec. 31, 2018Oct. 31, 2018Oct. 31, 2017
Statement of Financial Position [Abstract]
Redeemable convertible preferred stock, shares authorized0 0 6,455
Redeemable convertible preferred stock, shares issued0 0 6,455
Redeemable convertible preferred stock, shares outstanding0 0 6,455
Redeemable convertible preferred stock, liquidation preference $ 0 $ 0 $ 17,750
Convertible preferred stock, shares authorized25,000,000 25,000,000 25,000,000
Convertible preferred stock, shares issued0 0 3,230,655
Convertible preferred stock, shares outstanding0 0 3,230,655
Convertible preferred stock, liquidation preference $ 0 $ 0 $ 2,140
Common stock, par value $ 0.001 $ 0.001 $ 0.001
Common stock, shares authorized250,000,000 250,000,000 250,000,000
Common stock, shares issued21,447,088 21,423,999 6,515,524
Common stock, shares outstanding21,447,088 21,423,999 6,515,524

Consolidated Statements of Oper

Consolidated Statements of Operations - USD ($) $ in Thousands2 Months Ended12 Months Ended
Dec. 31, 2018Oct. 31, 2018Oct. 31, 2017
Net revenues
Total net revenues $ 673 $ 1,563
Cost of sales:
Total costs of sales381 1,002
Gross profit292 561
Operating costs and expenses
Research and development3,458 19,376 7,107
Research and development - intellectual property acquired 104,693
General and administrative12,639 48,252 18,812
Sales and marketing2,725 2,365
Total operating costs and expenses18,822 69,993 130,612
Operating loss(18,530)(69,432)(130,612)
Other income (expense)
Interest income, net80 395 23
Other income, net32
Change in fair value of derivatives 3,814 109
Loss on extinguishment of warrant liability (520)
Net loss from continuing operations before income taxes(18,418)(65,743)(130,480)
Benefit for income taxes 302
Net loss from continuing operations(18,418)(65,441)(130,480)
Loss from discontinued operations (449)
Gain on sale of discontinued operations 100
Loss from discontinued operations, net (349)
Net loss after income taxes(18,418)(65,441)(130,829)
Deemed dividend - accretion of discount on Series F preferred stock (1,290)(369)
Deemed dividend - exchange of Series F preferred stock (7,057)
Cumulative dividends on Series F preferred stock (373)(124)
Net loss attributable to common stockholders $ (18,418) $ (74,161) $ (131,322)
Net loss per share, basic and diluted:
Loss from continuing operations $ (0.86) $ (4.29) $ (26.50)
Loss from discontinued operations (0.07)
Net loss(0.86)(4.29)(26.57)
Deemed dividend - accretion of discount on Series F preferred stock (0.09)(0.07)
Deemed dividend - exchange of Series F preferred stock (0.46)
Cumulative dividends on Series F preferred stock (0.02)(0.03)
Net loss attributable to common stockholders $ (0.86) $ (4.86) $ (26.67)
Weighted average shares outstanding, basic and diluted:21,343,446 15,259,731 4,923,327
Products [Member]
Net revenues
Total net revenues $ 210 $ 689
Cost of sales:
Total costs of sales194 500
Services [Member]
Net revenues
Total net revenues463 874
Cost of sales:
Total costs of sales $ 187 $ 502

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands2 Months Ended12 Months Ended
Dec. 31, 2018Oct. 31, 2018Oct. 31, 2017
Statement of Comprehensive Income [Abstract]
Net loss after income taxes $ (18,418) $ (65,441) $ (130,829)
Other comprehensive income:
Unrealized gain on available-for-sale securities36
Comprehensive loss $ (18,382) $ (65,441) $ (130,829)

Consolidated Statements of Stoc

Consolidated Statements of Stockholders' Equity - USD ($) $ in ThousandsPreferred Stock [Member]Common Stock [Member]Additional Paid-in Capital [Member]Accumulated Other Comprehensive Income [Member]Accumulated Deficit [Member]Total
Balance at Oct. 31, 2016 $ 10,153 $ 3 $ 123,417 $ (128,176) $ 5,397
Balance, shares at Oct. 31, 20167,374,454 2,782,963
Conversion of Series A preferred stock to common stock $ (976) $ 1 975
Conversion of Series A preferred stock to common stock, shares(3,991,487)761,798
Conversion of Series B preferred stock to common stock $ (549) 549
Conversion of Series B preferred stock to common stock, shares(6,512)108,543
Conversion of Series C preferred stock to common stock $ (1,809) $ 1 1,808
Conversion of Series C preferred stock to common stock, shares(23,185)504,184
Conversion of Series D preferred stock to common stock $ (1,517) 1,517
Conversion of Series D preferred stock to common stock, shares(129,665)216,106
Issuance of Series E preferred stock for research and development intellectual property $ 104,693 104,693
Issuance of Series E preferred stock for research and development intellectual property, shares7,050
Stock option exercise 1,301 1,301
Stock option exercise, shares 268,847
Warrants exchanged for common stock 78 78
Warrants exchanged for common stock, shares 56,250
Stock-based compensation expense $ 1 17,744 17,745
Stock-based compensation expense, shares 1,057,500
Common stock issued for cash $ 1 2,277 2,278
Common stock issued for cash, shares 759,333
Deemed dividend - accretion of discount on Series F preferred stock (369) (369)
Cumulative dividends on Series F preferred stock (124) (124)
Series F preferred stock dividends paid in common stock
Net loss (130,829)(130,829)
Balance at Oct. 31, 2017 $ 109,995 $ 7 149,173 (259,005)170
Balance, shares at Oct. 31, 20173,230,655 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
Stock option exercise 687 687
Stock option exercise, shares 161,433
Warrants exchanged for common stock
Stock-based compensation expense 38,821 38,821
Stock-based compensation expense, shares 126,000
Deemed dividend - accretion of discount on Series F preferred stock (1,290) (1,290)
Cumulative dividends on Series F preferred stock (373) (373)
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 1,003,393
Extinguishment of warrant liability 3,045 3,045
Extinguishment of warrant liability, shares 151,871
Proceeds received from issuance of common stock, net of issuance costs of $2,785 $ 4 92,672 92,676
Proceeds received from issuance of common stock, net of issuance costs of $2,785, shares 4,791,819
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 (65,441)(65,441)
Balance at Oct. 31, 2018 $ 21 406,087 (324,446)81,662
Balance, shares at Oct. 31, 2018 21,423,999
Warrants exchanged for common stock
Stock-based compensation expense 8,908 8,908
Stock-based compensation expense, shares
Deemed dividend - accretion of discount on Series F preferred stock
Cumulative dividends on Series F preferred stock
Series F preferred stock dividends paid in common stock
Vesting of restricted stock units, net
Vesting of restricted stock units, net, shares 23,089
Shares withheld for tax withholding on vesting of restricted stock (155) (155)
Other comprehensive income 36 36
Net loss (18,418)(18,418)
Balance at Dec. 31, 2018 $ 21 $ 414,840 $ 36 $ (342,864) $ 72,033
Balance, shares at Dec. 31, 2018 21,447,088

Consolidated Statements of St_2

Consolidated Statements of Stockholders' Equity (Parenthetical) $ in ThousandsOct. 31, 2018USD ($)
Statement of Stockholders' Equity [Abstract]
Proceeds from issuance of common stock, net of issuance costs $ 2,785

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($) $ in Thousands2 Months Ended12 Months Ended
Dec. 31, 2018Oct. 31, 2018Oct. 31, 2017
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (18,418) $ (65,441) $ (130,829)
Loss from discontinued operations 349
Loss from continuing operations(18,418)(65,441)(130,480)
Adjustments to reconcile net loss from continuing operations to net cash used in continuing operating activities:
Stock based compensation expense8,946 38,821 16,627
Change in fair value of derivatives (3,814)(109)
Depreciation and amortization330 1,394 432
Loss on extinguishment of warrant liability 520
Amortization of intangible assets33 100
Amortization of debt discount10 35
Change in fair value of contingent consideration57 20
Other non-cash adjustments86
Research and development - intellectual property acquired 104,693
Changes in operating assets and liabilities:
Accounts receivable228 (940)
Inventory(98)(238)
Prepaid expenses and other current assets(279)(911)(190)
Other assets(535)(378)
Accounts payable and accrued expenses1,621 2,136 1,411
Deferred revenue20 150
Net cash used in continuing operating activities(7,999)(28,546)(7,616)
Net cash provided by discontinued operating activities 33
Net cash used in operating activities(7,999)(28,546)(7,583)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment(834)(9,221)(2,544)
Purchase of available-for-sale securities(10,200)
Proceeds from maturities of available-for-sale securities4,003
Acquisition of IBEX (2,258)
Net cash used in continuing investing activities(7,031)(11,479)(2,544)
Net cash provided by discontinued investing activities10 60 25
Net cash used in investing activities(7,021)(11,419)(2,519)
CASH FLOWS FROM FINANCING ACTIVITIES
Principal payments on note payable(257)
Proceeds from stock options exercised 687 1,301
Net proceeds from the sale of preferred stock and warrants 17,667
Net proceeds from the sale of common stock 92,676 2,278
Payment of contingent consideration liability (30)
Payments on capital leases(11)(74)
Net cash (used in)/provided by financing activities(268)93,259 21,246
Net (decrease)/increase in cash and cash equivalents(15,288)53,294 11,144
Cash and cash equivalents - beginning of period70,961 17,667 6,523
Cash and cash equivalents - end of period55,673 70,961 17,667
Supplemental schedule of non-cash investing and financing activities:
Conversion of Series A preferred stock to common stock 769 976
Conversion of Series B preferred stock to common stock 4,020 549
Conversion of Series C preferred stock to common stock 201 1,809
Conversion of Series D preferred stock to common stock 312 1,517
Conversion of Series E preferred stock to common stock 104,693
Exchange of Series F preferred stock for common stock 13,061
Extinguishment of warrant liability 2,525
Unpaid liability for acquisition of property and equipment600 300 54
Warrants exchanged for common stock shares 78
Establishment of warrant liability in connection with Series F Preferred Stock issuance 4,299
Establishment of derivative liability in connection with Series F Preferred Stock issuance 9,319
Deemed dividend – accretion of discount on Series F preferred stock 1,290 369
Cumulative dividends on Series F preferred stock 373 124
Series F preferred stock dividends paid in common stock 306
Contingent consideration for IBEX acquisition 278
Contingent consideration earned and recorded in accounts payable31 33
Note payable issued as partial consideration for IBEX acquisition 1,220
Property and equipment additions through capital leases20 251
Unpaid tax liability related to net share settlement of restricted stock units155
Unrealized gain on short-term investments and cash equivalents $ 36

Principal Business Activity and

Principal Business Activity and Basis of Presentation2 Months Ended
Dec. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Principal Business Activity and Basis of Presentation1. PRINCIPAL BUSINESS ACTIVITY AND BASIS
OF PRESENTATION PolarityTE, Inc. and subsidiaries
(the “Company”) 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. Change in Fiscal Year
end. Asset Acquisition and
Name Change. , n/k/a On April 7, 2017, the Company
issued 7,050 shares of its newly authorized Series E Preferred Stock (the “Series E Preferred Shares”) to Dr. Denver
Lough, the developer of the Company’s tissue regeneration technology who became the Company’s Chief Executive Officer,
for the purchase of Polarity NV’s assets. The Series E Preferred Stock was convertible into an aggregate of 7,050,000 shares
of the Company’s common stock with a fair value of approximately $104.7 million based on the closing price of the Company’s
common stock as of April 7, 2017. Since the assets purchased were in-process research and development assets with no alternative
future use, the total purchase price was immediately expensed as research and development - intellectual property acquired. The Company adopted ASU
2017-01, Business Combinations (Topic 805), Clarifying the Definition of a Business Discontinued Operations. In May 2018, the Company
purchased the assets of a preclinical research sciences business and related real estate from Ibex Group, L.L.C., a Utah limited
liability company, and Ibex Preclinical Research, Inc., a Utah corporation (collectively, “IBEX”). The Company acquired
these assets to accelerate research and development of its TE product candidates, and now operates the business to advance its
product development and deliver preclinical research services to third parties (see Note 4).

Summary of Significant Accounti

Summary of Significant Accounting Policies2 Months Ended
Dec. 31, 2018
Accounting Policies [Abstract]
Summary of Significant Accounting Policies2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation. Segments. Use of estimates. Reclassifications. Cash and cash equivalents. Investments Accounts Receivable.
Accounts Payable and
Accrued Expenses. Inventory. Property and Equipment. Capitalized Software.
Goodwill and Intangible
Assets. The fair value of reporting
units is based on widely accepted valuation techniques that the Company believes market participants would use, although the valuation
process requires significant judgment and often involves the use of significant estimates and assumptions. We performed a qualitative
assessment and concluded that it is more likely than not that the fair value of the reporting unit is more than its carrying value.
Accordingly, there was no indication of impairment, and further quantitative testing was not required. Adverse market or economic
events could result in impairment charges in future periods. Intangible assets deemed
to have finite lives are amortized on a straight-line basis over their estimated useful lives, which generally range from one to
eleven years. The useful life is the period over which the asset is expected to contribute directly, or indirectly, to its future
cash flows. Intangible assets are reviewed for impairment when certain events or circumstances exist. For amortizable intangible
assets, impairment exists when the undiscounted cash flows exceed its carrying value. At least annually, the remaining useful life
is evaluated. Impairment of Long-Lived
Assets. 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. Forfeitures are recognized as they occur. The value of restricted
stock 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. The accounting for non-employee
options and restricted stock is similar to that of employees, however, unlike employee options and restricted stock, the measurement
date is not the grant date. The measurement date is when performance is complete. Until the options or shares vest, they are re-measured
(re-valued) each reporting period and the expense marked up or marked down accordingly. Loss Per Share. Since the Company was in a loss
position for all periods presented, basic net loss per share is the same as diluted net loss per share since the effects of potentially
dilutive securities are antidilutive. Commitments and Contingencies. Accounting for Warrants Change in Fair Value
of Derivatives. Revenue Recognition. Revenue from Contracts with Customers Revenue Recognition Under ASC 605, regenerative
medicine revenue is recognized upon the shipment of products or the performance of services when each of the following four criteria
is met: (i) persuasive evidence of an arrangement exists; (ii) products are delivered or services are performed; (iii) the sales
price is fixed or determinable; and (iv) collectability is reasonably assured. In the contract services segment, revenue is recognized
on the proportional performance method over the term of the respective service contract which requires us to make reasonable estimates
of the extent of progress toward completion of the contract. Under this method, revenue is recognized according to the percentage
of cost completed for the study. As a result, unbilled receivables and deferred revenue are recognized based on payment timing
and work completed. Under ASC 606, revenue
is recognized when a customer obtains control of promised goods or services, in an amount that reflects the consideration which
the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an
entity determines are within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract(s)
with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate
the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies
a performance obligation. In the regenerative medicine
products segment, the Company records product revenues primarily from the sale of its regenerative tissue products. The Company
sells its products to healthcare providers, primarily through direct sales representatives. Product revenues consists of a single
performance obligation that the Company satisfies at a point in time. In general, the Company recognizes product revenue upon delivery
to the customer. In the contract services
segment, the Company records service revenues from the sale of its contract research services, which includes delivery of preclinical
studies and other research services to unrelated third parties. Service revenues generally consist of a single performance obligation
that the Company satisfies over time using an input method based on costs incurred to date relative to the total costs expected
to be required to satisfy the performance obligation. The Company believes that this method provides a faithful depiction of the
transfer of services over the term of the performance obligation based on the remaining services needed to satisfy the obligation.
This requires the Company to make reasonable estimates of the extent of progress toward completion of the contract. As a result,
unbilled receivables and deferred revenue are recognized based on payment timing and work completed. Generally, a portion of the
payment is due upfront and the remainder upon completion of the study, with most studies completing in less than a year. As of
December 31, 2018, October 31, 2018 and 2017, the Company had unbilled receivables of $157,000, $160,000 and $0 and deferred revenue
of $170,000, $150,000 and $0. The unbilled receivables balance is included in consolidated accounts receivable. Revenue of $83,000
was recognized during the two months ended December 31, 2018 that was included in the deferred revenue balance as of October 31,
2018. Costs to obtain the contract
are incurred for product revenue as they are shipped and are expensed as incurred. The Company considers
a significant customer to be one that comprises more than 10% of net revenues or accounts receivable. Concentration of revenues
were as follows for the two months ended December 31, 2018 and the fiscal year ended October 31, 2018:
Two Months Ended December 31, 2018
Year Ended October 31, 2018
Segment % of Revenue % of Revenue
Customer A Contract Services 32 % 19 %
Customer B Regenerative Medicine 17 % *
Customer C Contract Services 11 % * Concentration of accounts
receivable were as follows as of December 31, 2018:
As of December 31, 2018
Segment
% of Accounts Receivable
Customer A Contract services 23 %
Customer B Regenerative medicine 20 %
Customer D Regenerative medicine 14 % *The amount did not exceed
10% Recent Accounting Pronouncements In February 2016, FASB
issued ASU No. 2016-02, Leases (Topic 842), Leases (Topic 840) In July 2018, the FASB
issued ASU No. 2018-11, Leases (Topic 842): Targeted Improvements The Company expects that
this standard will have a material effect on the financial statements upon adoption. The most significant effects will primarily
relate to (a) the recognition of ROU assets and lease liabilities on the balance sheet, which upon adoption will range from $5.2
million to $5.6 million in relation to its existing operating lease agreements for the office and laboratory spaces in Salt Lake
City, Utah; and (b) providing significant new disclosures about leasing activities. In
June 2018, the FASB issued ASU 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-based
Payment Accounting In
August 2018, the FASB issued ASU 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40) In
November 2018, the FASB issued ASU No. 2018-18, Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic
808 and Topic 606 Recently Adopted Accounting Pronouncements In May 2014, the FASB issued
ASU 2014-09, Revenue from Contracts with Customers (Topic 606) In August 2016, the FASB
issued ASU 2016-15, Statement of Cash Flows - Classification of Certain Cash Receipts and Cash Payments The adoption
of this ASU on November 1, 2018 has not had a material impact on the Company’s consolidated financial statements and related
disclosures. In May 2017, the FASB issued
ASU 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting. The adoption of this ASU on November 1, 2018 has not had a material
impact on the Company’s consolidated financial statements and related disclosures. In January 2017, the FASB
issued ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment. had
no impact on the Company’s consolidated financial statements and related disclosures.

Liquidity

Liquidity2 Months Ended
Dec. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Liquidity3. LIQUIDITY The Company has experienced recurring losses
and cash outflows from operating activities. For the two months ended December 31, 2018, and the fiscal year ended October 31,
2018, the Company incurred net losses of $18.4 million and $65.4 million, respectively, with cash used in operating activities
of $8.0 million and $28.5 million, respectively. On April 12, 2018, the Company completed a public offering 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 resulting in net proceeds
of approximately $34.6 million, after deducting offering expenses payable by the Company and on June 7, 2018, the Company completed
an underwritten offering 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 resulting in net proceeds of approximately $58.0 million, after deducting offering expenses payable by the
Company (see Note 11). Based upon the current
status of our product development and commercialization plans, we believe that our existing cash and cash equivalents will be
adequate to satisfy our capital needs for at least the next 12 months from the date of filing. However, we anticipate needing
substantial additional financing to continue clinical deployment and commercialization of our lead product SkinTE, development
of our other product candidates, and scaling the manufacturing capacity for our products and product candidates, and prepare for
commercial readiness. However, we will continue to pursue fundraising opportunities when available, but such financing may not
be available in the future on terms favorable to us, if at all. If adequate financing is not available, we may be required to
delay, reduce the scope of, or eliminate one or more of our product development programs. We plan to meet our capital requirements
primarily through issuances of equity securities, debt financing, revenue from product sales and future collaborations. Failure
to generate revenue or raise additional capital would adversely affect our ability to achieve our intended business objectives.

IBEX Acquisition

IBEX Acquisition2 Months Ended
Dec. 31, 2018
Business Combinations [Abstract]
IBEX Acquisition4 . IBEX ACQUISITION On March 2, 2018, the Company,
along with its wholly owned subsidiary, Utah CRO Services, Inc., a Nevada corporation, entered into agreements with IBEX for the
purchase of the assets and rights to the Seller’s preclinical research and contract services business and related real estate.
The Company acquired this preclinical biomedical research facility in order to accelerate research and development of PolarityTE
pipeline products. The business consists of a GLP compliant preclinical research facility, including vivarium, operating rooms,
preparation rooms, storage facilities, and surgical and imaging equipment. The real property includes two parcels 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 above was accounted for as a business combination. The acquisition closed
on May 3, 2018. The aggregate purchase price was $3.8 million, of which $2.3 million was paid at closing and the balance satisfied
by a promissory note payable to the Seller with an initial fair value of $1.2 million (see Note 10) and contingent consideration
with an initial fair value of approximately $0.3 million. During the year ended October 31, 2018, the Company recorded approximately
$38,000 of direct and incremental costs associated with acquisition-related activities. These costs were incurred primarily for
banking, legal, and professional fees associated with the IBEX acquisition. These costs were recorded in general and administrative
expenses in the consolidated statement of operations. During the two months ended
December 31, 2018 and the fiscal year ended October 31, 2018, IBEX contributed approximately $437,000 and $831,000 to net revenues
and approximately $250,000 and $331,000 to gross profit, respectively. Purchase Price Allocation The following table summarizes
the purchase price allocation for the IBEX acquisition (in thousands):
Equipment $ 430
Land and buildings 2,000
Intangible assets 1,057
Goodwill 278
Accrued property taxes (9 )
Aggregate purchase price $ 3,756
Less: Promissory note to seller 1,220
Contingent consideration 278
Cash paid at closing $ 2,258 As part of the acquisition
of IBEX, the Company recorded a contingent consideration liability of $0.3 million in current liabilities in the consolidated balance
sheet. The contingent consideration represents the estimated fair value of future payments due to the Seller of IBEX based on IBEX’s
revenue generated from studies quoted prior to but completed after the transaction. Contingent consideration is initially recognized
at fair value as purchase consideration and subsequently remeasured at fair value through earnings. The initial fair value of the
contingent consideration was based on the present value of estimated future cash flows using a 20% discount rate. The contingent
consideration is the payment of 15% of the actual revenues received for work on any study initiated within 18 months following
the closing of the purchase on the basis of certain specific customer prospects that received service proposals prior to the closing,
provided that the total payments will not exceed $650,000. The subsequent increase in fair value of contingent consideration from
acquisition to October 31, 2018 of approximately $20,000 was recognized in general and administrative expense in the Company’s
consolidated statement of operations for the fiscal year ended October 31, 2018. During the two months ended December 31, 2018,
$57,000 was recognized in general and administrative expense in the Company’s consolidated statement of operations for additional
increase in fair value of contingent consideration. The excess of the fair value of purchase consideration over the fair values
of identifiable assets and liabilities acquired is recorded as goodwill, including the value of the assembled workforce. Disclosure of pro-forma
revenues and earnings attributable to the acquisition is excluded because it is impracticable to obtain complete historical financial
records for IBEX Preclinical Research, Inc. The following table shows
the valuation of the individual identifiable intangible assets acquired along with their estimated remaining useful lives as of
the acquisition date (in thousands):
Approximate Fair Value
Remaining Useful Life (in years)
Non-compete agreement $ 410 4
Customer contracts and relationships 534 7 to 8
Trade names and trademarks 101 10 to 11
Backlog 12 Less than 1
Total intangible assets $ 1,057

Fair Value

Fair Value2 Months Ended
Dec. 31, 2018
Fair Value Disclosures [Abstract]
Fair Value5. FAIR VALUE In accordance with ASC
820, Fair Value Measurements and Disclosures
● Level 1: Observable inputs such as quoted prices in active markets for identical instruments. This methodology applies to our Level 1 investments, which are composed of money market funds.
● Level 2: Quoted prices for similar instruments that are directly or indirectly observable in the market. This methodology applies to our Level 2 investments, which are composed of corporate debt securities, commercial paper, and U.S. government debt securities.
● 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. This methodology applies to our Level 3 financial instruments, which are composed of warrant liability, derivative liability, and contingent consideration. 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.
There were no transfers within the hierarchy for any of the periods presented. In connection with the
offering of Units in September 2017 (see Note 11), 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 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); or (c) the Company
issues new securities for consideration 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 11, 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 $9.3 million, respectively, at March
5, 2018 and October 31, 2017 as calculated using the 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 2.2 % 1.6 %
Volatility 88.2 % 96.0 %
Term 1.5 1.9 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 2.2 % 1.6 %
Volatility 88.2 % 96.0 %
Term 1.5 1.9 The following table sets
forth the fair value of the Company’s financial assets and liabilities measured on a recurring basis by level within the
fair value hierarchy as of December 31, 2018, October 31, 2018 and 2017 (in thousands):
Fair Value Measurement as of December 31, 2018
Level 1 Level 2 Level 3 Total
Assets:
Money market funds $ 7 $ – $ – $ 7
Commercial paper – 21,392 – 21,392
Corporate debt securities – 5,448 – 5,448
U.S. government debt securities – 3,226 – 3,226
Total $ 7 $ 30,066 $ – $ 30,073
Liabilities:
Contingent consideration $ – $ – $ 261 $ 261
Total $ – $ – $ 261 $ 261
Fair Value Measurement as of October 31, 2018
Level 1 Level 2 Level 3 Total
Assets:
Money market funds $ 69,659 $ – $ – $ 69,659
Total $ 69,659 $ – $ – $ 69,659
Liabilities:
Contingent consideration $ – $ – $ 235 $ 235
Total $ – $ – $ 235 $ 235
Fair Value Measurement as of October 31, 2017
Level 1 Level 2 Level 3 Total
Assets:
Money market funds $ 17,322 $ – $ – $ 17,322
Total $ 17,322 $ – $ – $ 17,322
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 of our contingent consideration liability (in thousands) which is included in other
current liabilities:
Contingent Consideration
Fair value – October 31, 2017 $ –
IBEX acquisition – May 3, 2018 278
Change in fair value 20
Earned and paid in cash (30 )
Earned and moved to accounts payable (33 )
Fair value - October 31, 2018 $ 235
Change in fair value 57
Earned and moved to accounts payable (31 )
Fair value – December 31, 2018 $ 261

Cash Equivalents and Available-

Cash Equivalents and Available-for-Sale Marketable Securities2 Months Ended
Dec. 31, 2018
Cash and Cash Equivalents [Abstract]
Cash Equivalents and Available-for-Sale Marketable Securities6. Cash Equivalents and Available-for-Sale
Marketable Securities Cash equivalents and available-for-sale
marketable securities consisted of the following as of December 31, 2018 (in thousands):
December 31, 2018
Amortized Cost Unrealized Gains Unrealized Losses Market Value
Cash equivalents:
Money market funds $ 7 $ – $ – $ 7
Commercial paper 20,648 30 – 20,678
U.S. government debt securities 3,224 2 – 3,226
Total cash equivalents 23,879 32 – 23,911
Short-term investments:
Commercial paper 714 – – 714
Corporate debt securities 5,444 5 (1 ) 5,448
Total short-term investments 6,158 5 (1 ) 6,162
Total $ 30,037 $ 37 $ (1 ) $ 30,073 As of October 31, 2018
and 2017, the Company held $69.7 million and $17.3 million in money market funds included in cash equivalents with no unrealized
gains or losses. As of October 31, 2018 and 2017 the Company did not hold any available-for-sale securities. All investments of
debt securities held as of December 31, 2018 had maturities of less than one year. For the two months ended December 31, 2018,
the Company recognized no material realized gains or losses on available-for-sale marketable securities.

Property and Equipment, Net

Property and Equipment, Net2 Months Ended
Dec. 31, 2018
Property, Plant and Equipment [Abstract]
Property and Equipment, Net7. PROPERTY AND EQUIPMENT, NET The following table presents
the components of property and equipment, net (in thousands):
December 31, 2018 October 31, 2018 October 31, 2017
Machinery and equipment $ 8,276 $ 8,134 $ 2,418
Land and buildings 2,000 2,000 –
Computers and software 1,372 1,337 211
Leasehold improvements 1,230 1,137 –
Construction in progress 2,402 1,587 –
Furniture and equipment 614 566 30
Total property and equipment, gross 15,894 14,761 2,659
Accumulated depreciation (2,158 ) (1,834 ) (486 )
Total property and equipment, net $ 13,736 $ 12,927 $ 2,173 Depreciation and amortization
expense for property and equipment, including assets acquired under capital leases for the two months ended December 31, 2018 and
for the fiscal years ended October 31, 2018 and 2017 is as follows (in thousands):
For the Two Months ended December 31, For the Years Ended October 31,
2018 2018 2017
General and administrative expense:
Continuing operations $ 155 $ 223 $ 1
Discontinued operations – – 11
155 223 12
Research and development expense:
Continuing operations 175 1,171 431
Total depreciation and amortization expense $ 330 $ 1,394 $ 443

Intangible Assets and Goodwill

Intangible Assets and Goodwill2 Months Ended
Dec. 31, 2018
Goodwill and Intangible Assets Disclosure [Abstract]
Intangible Assets and Goodwill8. INTANGIBLE ASSETS AND GOODWILL Intangible assets, net,
consist of the following (in thousands):
December 31, 2018 October 31, 2018 October 31, 2017
Non-compete agreement $ 410 $ 410 $ –
Customer contracts and relationships 534 534 –
Trade names and trademarks 101 101 –
Backlog 12 12 –
Total intangible assets, gross 1,057 1,057 –
Accumulated amortization (133 ) (100 ) –
Total intangible assets, net $ 924 $ 957 $ – Amortization expense for
the two months ended December 31, 2018 and for the fiscal year ended October 31, 2018 was approximately $33,000 and $100,000, respectively. The future amortization
of these intangible assets is expected to be as follows (in thousands):
Year ended December 31, 2019 $ 193
Year ended December 31, 2020 189
Year ended December 31, 2021 189
Year ended December 31, 2022 121
Year ended December 31, 2023 87
Thereafter 145
$ 924 There were no changes in the carrying amount
of goodwill for the two months ended December 31, 2018. The changes in the carrying amount of goodwill for fiscal year ended October
31, 2018 is as follows (in thousands):
Regenerative Medicine
Contract Services Total
October 31, 2017 $ – $ – $ –
Additions due to acquisitions (1) – 278 278
October 31, 2018 – 278 278
December 31, 2018 $ – $ 278 $ 278
(1) On May 3, 2018, the Company acquired the preclinical research and contract services business and related real estate from IBEX L.L.C.

Accounts Payable and Accrued Ex

Accounts Payable and Accrued Expenses2 Months Ended
Dec. 31, 2018
Payables and Accruals [Abstract]
Accounts Payable and Accrued Expenses9. ACCOUNTS PAYABLE AND ACCRUED EXPENSES The following table presents
the major components of accounts payable and accrued expenses (in thousands):
December 31, 2018 October 31, 2018 October 31, 2017
Accounts payable $ 2,918 $ 2,007 $ 441
Salaries and other compensation 1,280 933 574
Other accruals 1,670 792 369
Legal and accounting 640 631 555
Total accounts payable and accrued expenses $ 6,508 $ 4,363 $ 1,939 Salaries and other compensation
includes accrued payroll expense, accrued bonus, and estimated employer 401(k) plan contributions.

Long Term Notes Payable

Long Term Notes Payable2 Months Ended
Dec. 31, 2018
Debt Disclosure [Abstract]
Long Term Notes Payable10. LONG TERM NOTE PAYABLE In connection with the
IBEX Acquisition, described in Note 4, the Company issued a promissory note payable to the Seller with an initial fair value of
$1.2 million. The promissory note has a principal balance of $1.3 million and bears interest at a rate of 3.5% interest per annum.
Principal and interest are payable in five equal installments that began on November 3, 2018 and continuing on each six-month anniversary
thereafter (“Payment Date”). The promissory note may be prepaid by the Company at any time and becomes due and payable
at the earlier of the maturity date of November 3, 2020 or upon an event of default, which includes failure to pay any installment
on each Payment Date, breach of any negative covenants, insolvency or bankruptcy. Upon the occurrence of an event of default, the
promissory note will bear an accelerated interest rate of 7% per annum from the date of the event of default. The Company initially
recognized the promissory note at its fair value, using an estimated market rate of interest for the Company, which was higher
than the promissory note’s stated rate. The result of imputing a market rate of interest resulted in an initial discount
to the principal balance of approximately $113,000, which is being amortized to interest expense over the term of the promissory
note using the effective interest method. The unamortized debt discount was $68,000 and $78,000 at December 31, 2018 and October
31, 2018, respectively. Amortization of debt discount of $10,000 and $35,000 was included in interest expense for the two months
ended December 31, 2018 and the fiscal year ended October 31, 2018, respectively.

Preferred Shares and Common Sha

Preferred Shares and Common Shares2 Months Ended
Dec. 31, 2018
Equity [Abstract]
Preferred Shares and Common Shares11. PREFERRED SHARES AND COMMON SHARES Common Stock Issuance On April 12, 2018, the
Company completed a public offering 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 resulting in net proceeds of approximately $34.6 million, after deducting offering expenses
payable by the Company. On June 7, 2018, the Company
completed an underwritten offering 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 resulting in net proceeds of approximately $58.0 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 of the Company’s securities (the “Units”) to accredited
investors at a purchase price of $2,750 per Unit. Each Unit consisted 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”), 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, would, 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. The warrants issued in
connection with the Series F Preferred Shares were determined to be liabilities pursuant to ASC 815. The warrant agreement provided
for an adjustment to the number of common shares issuable under the warrant or adjustment to the exercise price, including but
not limited to, if: (a) the Company issued shares of common stock as a dividend or distribution to holders of its common stock;
(b) the Company subdivided or combined its common stock (i.e., stock split); or (c) the Company issues new securities for consideration
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 was
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 in exchange
for 31,321 shares of restricted common stock; (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 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 1,003,393 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 was 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 year ended October
31, 2018. The Company recognized
accretion of the discount to the stated value of the Series F Preferred Shares of approximately $1,290,000 during the year ended
October 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 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 shares of Series E
Preferred Stock 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
were 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 prohibited him from selling any shares that may be registered until
October 2018. The registration statement was not filed as of December 31, 2018. Dr. Lough has not made a demand for filing a registration
statement and the Company does not propose to file a registration statement at the present time. 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 25,000,000 shares of authorized
and unissued preferred stock as of December 31, 2018 with no designation as to series. Convertible preferred stock
activity for the year ended October 31, 2018 consisted of the following:
Shares Outstanding - October 31, 2017 Preferred Stock Conversions and Series F Exchange – During the Year Ended October 31, 2018 Common Stock Shares Issued – During the Year Ended October 31, 2018
Series A 3,146,671 (3,146,671 ) 713,036
Series B 47,689 (47,689 ) 794,820
Series C 2,578 (2,578 ) 59,950
Series D 26,667 (26,667 ) 44,445
Series E 7,050 (7,050 ) 7,050,000
Series F 6,455 (6,455 ) 972,070
Total 3,237,110 (3,237,110 ) 9,634,321 There was no convertible
preferred stock outstanding as of December 31, 2018 and October 31, 2018. 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 – 794,806
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 15,906,245 – – – –
Total 25,000,000 3,237,110 $ 114,536 $ 19,890 9,307,904

Stock Based Compensation

Stock Based Compensation2 Months Ended
Dec. 31, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Stock Based Compensation12. STOCK-BASED COMPENSATION For the two months ended
December 31, 2018 and the fiscal years ended October 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 Two Months Ended December 31, For the Years Ended October 31,
2018 2018 2017
General and administrative expense:
Continuing operations $ 7,505 $ 31,982 $ 14,869
Discontinued operations – – 1,118
7,505 31,982 15,987
Research and development expense:
Continuing operations 919 6,322 1,758
Sales and marketing expense:
Continuing operations 522 517 –
Total stock-based compensation expense $ 8,946 $ 38,821 $ 17,745
Stock-based compensation expense classified as a liability $ 38 $ – $ –
Stock-based compensation expense classified to equity $ 8,908 $ 38,321 $ 17,745 Incentive Compensation Plans 2019 Plan On October 5, 2018, the
Company’s Board of Directors (the “Board”) approved the Company’s 2019 Equity Incentive Plan (the “2019
Plan”). The 2019 Plan provides for the grant of incentive stock options, nonqualified stock options, restricted stock, restricted
stock units, stock appreciation rights and other types of stock-based awards to the Company’s employees, officers, directors
and consultants. The Compensation Committee of the Board will administer the 2019 Plan, including determining which eligible participants
will receive awards, the number of shares of common stock subject to the awards and the terms and conditions of such awards. Up
to 3,000,000 shares of common stock are issuable pursuant to awards under the 2019 Plan. Unless earlier terminated by the Board,
the 2019 Plan shall terminate at the close of business on October 5, 2028. As of December 31, 2018, the Company had approximately
2,546,584 shares available for future issuances under the 2019 Plan. 2017 Plan On December 1, 2016, the
Company’s Board of Directors (the “Board”) approved the Company’s 2017 Equity Incentive Plan (the “2017
Plan”). The purpose of the 2017 Plan is to promote the success of the Company and to increase stockholder value by providing
an additional means through the grant of awards to attract, motivate, retain and reward selected employees, consultants and other
eligible persons. The 2017 Plan provides for the grant of incentive stock options, nonqualified stock options, restricted stock,
restricted stock units, stock appreciation rights and other types of stock-based awards to the Company’s employees, officers,
directors and consultants. The Compensation Committee of the Board will administer the 2017 Plan, including determining which eligible
participants will receive awards, the number of shares of common stock subject to the awards and the terms and conditions of such
awards. Up to 7,300,000 (increased from 3,450,000 in October 2017) shares of common stock are issuable pursuant to awards under
the 2017 Plan. Unless earlier terminated by the Board, the 2017 Plan shall terminate at the close of business on December 1, 2026.
As of December 31, 2018, the Company had approximately 53,102 shares available for future issuances under the 2017 Plan. 2014 Plan In the fiscal year ended
October 31, 2015, the Company adopted the 2014 Plan, an omnibus equity incentive plan administered by the Company’s board
of directors, or by one or more committees of directors appointed by the Board, pursuant to which the Company may issue up to 2,250,000
shares of the Company’s common stock under equity-linked awards to certain officers, employees, directors and consultants.
The 2014 Plan permits the grant of stock options, including incentive stock options and nonqualified stock options, stock appreciation
rights, restricted shares, restricted share units, cash awards, or other awards, whether at a fixed or variable price, upon the
passage of time, the occurrence of one or more events, or the satisfaction of performance criteria or other conditions, or any
combination thereof. As of December 31, 2018, the Company had approximately 1,927,453 shares available for future issuances under
the 2014 Plan. Stock Options Employee stock-option activity
for the two months ended December 31, 2018 and the fiscal years ended October 31, 2018 and 2017:
Number of shares
Weighted-Average Exercise Price
Outstanding, October 31, 2016 383,210 $ 5.74
Granted 3,482,000 $ 6.29
Exercised (268,847 ) $ 4.84
Forfeited (70,833 ) $ 6.42
Outstanding - October 31, 2017 3,525,530 $ 6.34
Granted 2,638,769 $ 23.55
Exercised (161,810 ) $ 4.31
Forfeited (217,984 ) $ 21.89
Outstanding - October 31, 2018 5,784,505 $ 13.68
Granted 396,861 $ 14.27
Exercised – $ –
Forfeited (938 ) $ 24.20
Outstanding – December 31, 2018 6,180,428 $ 13.72
Options exercisable, December 31, 2018 3,899,806 $ 9.23
Weighted-average grant date fair value of options granted during the two months ended December 31, 2018 $ 9.95 Non-employee stock option
activity for the two months ended December 31, 2018 and the fiscal years ended October 31, 2018 and 2017:
Number of shares
Weighted-Average Exercise Price
Outstanding - October 31, 2016 – $ –
Granted 293,000 $ 19.61
Forfeited – $ –
Outstanding - October 31, 2017 293,000 $ 19.61
Granted 3,000 $ 18.63
Forfeited – $ –
Outstanding - October 31, 2018 296,000 $ 19.60
Granted 23,791 $ 21.42
Forfeited (334 ) $ 6.33
Outstanding – December 31, 2018 319,457 $ 19.75
Options exercisable - December 31, 2018 199,207 $ 17.90 Stock options are generally
granted to employees or non-employees at exercise prices equal to the fair market value of the Company’s stock of the day
prior to the 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 two months ended December 31, 2018 was approximately $4.0 million. The grant date fair value
of non-employee options granted during the two months ended December 31, 2018 was approximately $0.4 million. The intrinsic value
of options outstanding at December 31, 2018 was $28.5 million. The weighted average remaining contractual term of outstanding and
exercisable options at December 31, 2018 was 8.7 years and 8.2 years, respectively. The fair value of each
option grant is estimated on the date of grant using the Black-Scholes option-pricing model with the following range of assumptions
for the two months ended December 31, 2018 and the fiscal years ended October 31, 2018 and 2017:
December 31, October 31,
2018 2018 2017
Risk free annual interest rate 2.6%-3.2 % 2.0%-3.2 % 1.6%-2.3 %
Expected volatility 80.6%-94.4 % 80.9%-96.5 % 71.7%-86.5 %
Expected term of options (years) 5.0-6.5 5.0-6.0 5.0-6.0
Assumed dividends – – – The fair value of employee
and non-employee stock option grants is recognized over the vesting period of, generally, one to three years. As of December 31,
2018, there was approximately $21.0 million of unrecognized compensation cost related to non-vested employee and non-employee stock
option awards, which is expected to be recognized over a remaining weighted-average vesting period of 0.8 years. Restricted-stock activity
for employees and non-employees for the two months ended December 31, 2018 and the fiscal years ended October 31, 2018 and 2017:
Number of shares
Weighted-Average Grant-Date
Unvested, October 31, 2016 274,829 $ 6.00
Granted 1,057,500 $ 4.80
Vested (1,105,197 ) $ 4.47
Unvested - October 31, 2017 227,132 $ 7.83
Granted 712,034 $ 25.27
Vested (242,819 ) $ 11.74
Forfeited (22,387 ) $ 20.62
Unvested - October 31, 2018 673,960 $ 24.52
Granted 63,192 $ 14.17
Vested (1) (86,042 ) $ 24.17
Forfeited – $ –
Unvested – December 31, 2018 651,110 $ 23.65
(1) The number of vested restricted stock units includes shares that were withheld on behalf of employees to satisfy the minimum statutory tax withholding requirements. The total fair value of
restricted stock vested during the two months ended December 31, 2018 was approximately $2.1 million. The value of restricted
stock grants is measured based on the fair market value of the Company’s common stock on the date of grant and recognized
over the vesting period of, generally, six months to three years. As of December 31, 2018, there was approximately $10.0 million
of unrecognized compensation cost related to unvested restricted stock awards, which is expected to be recognized over a remaining
weighted-average vesting period of 0.9 years.

Employee Benefit Plan

Employee Benefit Plan2 Months Ended
Dec. 31, 2018
Defined Benefit Plan [Abstract]
Employee Benefit Plan13. EMPLOYEE BENEFIT PLAN The Company’s 401(k)
Plan is a deferred salary arrangement under Section 401(k) of the Internal Revenue Code. Under the 401(k) Plan, participating
employees (full-time employees with the company for one year) may defer a portion of their pre-tax earnings, up to the IRS annual
contribution limit ($18,500 for calendar year 2018). The Company contributes 3% of employee’s eligible earnings. We recorded
contribution expense related to our 401(k) Plan of $35,000 for the two months ended December 31, 2018, $120,000 for the fiscal
year ended October 31, 2018, and $55,000 for the fiscal year ended October 31, 2017.

Income Taxes

Income Taxes2 Months Ended
Dec. 31, 2018
Income Tax Disclosure [Abstract]
Income Taxes14. 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. In response to the enactment
of the Act in late 2017, the U.S. Securities and Exchange Commission issued Staff Accounting Bulletin No. 118 (“SAB 118”)
to address situations where the accounting is incomplete for certain income tax effects of the Tax Act upon issuance of an entity’s
financial statements for the reporting period in which the Tax Act was enacted. Under SAB 118, a company may record provisional
amounts during a measurement period for specific income tax effects of the Tax Act for which the accounting is incomplete but a
reasonable estimate can be determined, and when unable to determine a reasonable estimate for any income tax effects, report provisional
amounts in the first reporting period in which a reasonable estimate can be determined. While the Company was able to make reasonable
estimates of the impact of the tax effects of the Tax Act, the final impact of the Tax Act may differ from those estimates, including,
but not limited to changes in our interpretations and assumptions, additional guidance that may be issued by the IRS, return to
provision differences and state rate adjustments. As guidance and technical corrections are issued in the upcoming quarters, the
Company will record updates to its original provisional estimates. The Company remeasured
certain U.S. deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which
is generally 21%. The provisional amount recorded related to the remeasurement of the deferred tax balance was tax expense of $2.6
million which was offset by a reduction in the valuation allowance resulting in no tax expense. Loss before income taxes
and discontinued operations consisted of (in thousands):
For the Two Months Ended December 31, For the Years Ended October 31,
2018 2018 2017
Net loss from continuing operations before income taxes $ (18,418 ) (65,743 ) (130,480 )
The provision (benefit)
for income taxes for the years ended December 31, 2018, October 31, 2018, and 2017 consisted of (in thousands):
For the Two Months Ended December 31, For the Years Ended October 31,
2018 2018 2017
Current:
Federal $ – $ (302 ) $ –
State – – –
Deferred:
Federal (3,734 ) (11,561 ) (2,679 )
State (257 ) (475 ) (304 )
Change in: valuation allowance 3,991 12,036 2,983
Total provision (benefit) for income taxes $ - $ (302 ) $ – The difference between
income taxes computed at the statutory federal rate and the provision for income taxes for the years ended December 31, 2018, October
31, 2018, and 2017 related to the following (in thousands, except percentages):
For the Two Months Ended December 31, For the Years Ended October 31,
2018 2018 2017
Amount
Percent of Pretax Income Amount
Percent of Pretax Income Amount
Percent of Pretax Income
Tax (benefit) at federal statutory rate $ (3,867 ) 21 % $ (22,325 ) 34 % $ (44,283 ) 34 %
State income taxes, net of federal income taxes (254 ) 1 % (475 ) (1 )% (304 ) – %
Effect of warrant liability – – % (1,120 ) 2 % (74 ) – %
Effect of other permanent items 5 – % 30 – % (82 ) – %
Effect of Acquisition of intangible assets – – % – – % 35,595 (27 )%
Effect of stock compensation 27 – % – – % 3,147 (3 )%
Change in valuation allowance 3,991 (22 )% 12,036 (18 )% 2,983 (2 )%
Reduction of NOL’s due to Section 382 Limitations - – % 11,552 (17 )% 3,018 (2 )%
Other 98 - - - - -
$ - – % $ (302 ) – % $ – - % The components of deferred
income tax assets (liabilities) were as follows (in thousands):
For the Two Months Ended December 31, For the Years Ended October 31,
2018 2018 2017
Impairment of development costs $ – $ 7 $ –
Depreciation and amortization (533 ) (546 ) 95
Compensation expense not deductible until options are exercised 12,543 10,529 4,553
All other temporary differences 236 382 248
Net operating loss carry forward 10,526 8,455 3,158
Less valuation allowance (22,772 ) (18,827 ) (8,054 )
Deferred tax asset (liability) $ – $ – $ – Realization of deferred
tax assets, including those related to net operating loss carryforwards, are dependent upon future earnings, if any, of which the
timing and amount are uncertain. Accordingly, the net deferred tax assets have been fully offset by a valuation allowance. Based
upon the Company’s current operating results management cannot conclude that it is more likely than not that such assets
will be realized. 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. The effect of this is being analyzed
now. Utilization of the net
operating loss carryforwards may be subject to a substantial annual limitation due to the “change in ownership” provisions
of the Internal Revenue Code. The annual limitation may result in the expiration of net operating loss carryforwards before utilization.
Due to the change in tax law, all losses post 2018 will have an unlimited carryforward period (but can only utilize 80% max per
year). All prior net operating losses still have the same carryforward limit of 20 years. The net operating loss carryforwards
available for income tax purposes at December 31, 2018 amounts to approximately $47.3 million and expires between 2038 and 2039
for federal income taxes, and approximately $25.5 million for state income taxes, which primarily expires between 2032 and 2033. The Company files income
tax returns in the U.S. and various states As of December 31, 2018, the Company had no unrecognized tax benefits, which would
impact its tax rate if recognized. As of October 31, 2018, the Company had no accrual for the potential payment of penalties.
As of December 31, 2018, the Company was not subject to any U.S. federal, and state tax examinations. The Company’s U.S.
federal tax returns have been examined for tax years through 2011 with the results of such examinations being reflected in the
Company’s results of operations as of October 31, 2013. The Company does not anticipate any significant changes in its unrecognized
tax benefits over the next 12 months.

Loss Per Share

Loss Per Share2 Months Ended
Dec. 31, 2018
Earnings Per Share [Abstract]
Loss Per Share15. LOSS PER SHARE The
following outstanding potentially dilutive shares have been excluded from the calculation of diluted net loss per share for the
periods presented due to their anti-dilutive effect:
December 31, October 31,
2018 2018 2017
Shares issuable upon conversion of preferred stock – – 9,307,904
Shares issuable upon exercise of warrants – – 322,727
Shares issuable upon exercise of stock options 6,499,885 6,080,505 3,818,530
Non-vested shares under restricted stock grants 651,110 673,960 227,132

Commitments and Contingencies

Commitments and Contingencies2 Months Ended
Dec. 31, 2018
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies16. COMMITMENTS AND CONTINGENCIES Contingencies On June 26, 2018, a class
action complaint alleging violations of the Federal securities laws was filed in the United States District Court, District of
Utah, by Jose Moreno against the Company and two directors of the Company, Case No. 2:18-cv-00510-JNP (the “Moreno Complaint”).
On July 6, 2018, a similar complaint was filed in the same court against the same defendants by Yedid Lawi, Case No. 2:18-cv-00541-PMW
(the “Lawi Complaint”). Both the Moreno Complaint and Lawi Complaint allege that the defendants made or were responsible
for, disseminating information to the public through reports filed with the Securities and Exchange Commission and other channels
that contained material misstatements or omissions in violation of Sections 10 and 20(a) of the Securities Exchange Act of 1934
and Rule 10b-5 adopted thereunder. Specifically, both complaints allege that the defendants misrepresented the status of one of
the Company’s patent applications while touting the unique nature of the Company’s technology and its effectiveness.
Plaintiffs are seeking damages suffered by them and the class consisting of the persons who acquired the publicly-traded securities
of the Company between March 31, 2017, and June 22, 2018. Plaintiffs have filed motions to consolidate and for appointment as lead
plaintiff. On November 28, 2018, the Court consolidated the Moreno Lawi In re PolarityTE,
Inc. Securities Litigation Lawi In November 2018, a shareholder
derivative lawsuit was filed in the United States District Court, District of Utah, with the caption Monther v. Lough, et al 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, a former subsidiary of the Company, 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 represented himself pro se in the litigation and sought 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. The petition for rehearing was denied on June 8, 2018. The plaintiff subsequently
filed a petition for a writ of certiorari with the Supreme Court of the United States, which was denied in November 2018. Consequently,
this matter has been finally resolved without liability to the Company. In the ordinary course
of business, we may become involved in lawsuits, claims, investigations, proceedings, and threats of litigation relating to intellectual
property, commercial arrangements, regulatory compliance, and other matters. Except as noted above, at December 31, 2018, we were
not party to any legal or arbitration proceedings that may have significant effects on our financial position or results of operations.
No governmental proceedings are pending or, to our knowledge, contemplated against us. We are not a party to any material proceedings
in which any director, member of senior management or affiliate of ours is either a party adverse to us or our subsidiaries or
has a material interest adverse to us or our subsidiaries. Commitments The Company leases facilities
and certain equipment under noncancelable leases that expire at various dates through November 2022. Leases are classified as capital
leases when the terms of the lease transfer substantially all the risk and rewards of ownership to the lease. Other leases are
classified as operating leases. Property and equipment
under capital leases are initially recorded at the lower of asset fair value or the present value of the minimum lease payments
on the consolidated balance sheet. The corresponding liability to the lessor is included in the balance sheet as a capital lease
obligation. Lease payments under capital leases are treated as debt-service payments and recognized as a reduction of the capital
lease obligation and an increase in interest expense. During November 2018, the
Company entered into a capital lease agreement for laboratory equipment. The lease commencement date is January 1, 2019, at which
time the Company will gain control of the asset. During the two months ended December 31, 2018, the Company made payments towards
the lease of $535,000. The payments are recorded on the balance sheet in other assets and will be reclassified as a lease asset
to property and equipment at the time the lease commences. The following schedule
summarizes the future minimum lease payments for operating and capital leases at December 31, 2018 ( in thousands
Operating leases Capital leases
Year ended December 31, 2019 $ 1,895 $ 66
Year ended December 31, 2020 1,819 58
Year ended December 31, 2021 1,455 55
Year ended December 31, 2022 1,216 28
$ 6,385 $ 207 Rent expense for the two
months ended December 31, 2018, and the fiscal years ended October 31, 2018 and 2017 was $357,000, $1.4 million and $222,000, respectively. The Company has entered
into employment agreements with key executives that contain severance terms and change of control provisions.

Certain Relationships and Relat

Certain Relationships and Related Transactions2 Months Ended
Dec. 31, 2018
Related Party Transactions [Abstract]
Certain Relationships and Related Transactions17. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS In October 2018, the Company
entered into an office lease covering approximately 7,250 square feet of rental space in the building located at 40 West 57 th Initially, the Company
is using three offices and two work stations in the office and share common areas representing approximately 2,055 square feet.
Cohen LLC is using approximately 1,220 square feet. The monthly lease payment for 3,275 square feet is $16,377. Of this amount
$6,103 is allocated pro rata to Cohen LLC based on square footage occupied. Additional lease charges for operating expenses and
taxes are allocated under the sublease based on the ratio of rent paid by the Company and Cohen LLC to total rent. Cohen LLC identified two
associated entities that may wish to occupy an additional 2,753 square feet of space in the office. Under the terms of the sublease
Cohen LLC can add this additional space to the 1,220 square feet occupied, which would bring the total space occupied by us and
Cohen LLC to 6,028 square feet. Because a portion of the additional space subleased to Cohen LLC is less private and attractive,
the Company agreed to reduce the overall annual lease rate for the Cohen LLC space to $58.60 per square foot, which means the Company
will be paying an annual lease rate for the space the Company uses of $62.70. Assuming Cohen LLC subleases the additional office
space, our annual lease payment to the lessor would be $361,680, and Cohen LLC would pay to the Company $232,830 under the sublease.
During the two months ended December 31, 2018, the Company recognized $21,000 of sublease income related to this agreement. As
of December 31, 2018, there were no amounts due from the related party. In August 2018 David Seaburg
was elected by the Board of Directors to serve as a director of the Company. Subsequently the Company entered into a written consulting
agreement with Mr. Seaburg pursuant to which he will provide investor relations and other services to the Company over a period
of two years for a fee consisting of (i) quarter-annual cash payment of $10,000, (ii) 60,000 restricted stock units issued under
the Company equity incentive plan that vest in four equal installments every six months during the term of the agreement subject
to continued service, and (iii) an annual award under the Company equity incentive plan of options exercisable over a term of
10 years to purchase common stock in number equal to the number of shares of common stock with a value of $150,000 at the time
of the award based on a Black-Scholes calculation. During the two months ended December 31, 2018, the Company made no payments
to Mr. Seaburg for consulting services. The total value of Mr. Seaburg’s agreement is approximately $1.7 million, which
will be recognized as expense over the 24-month consulting period. Under this agreement, the Company recognized approximately
$233,000 of expense during the two months ended December 31, 2018 and $324,000 of expense during the fiscal year ended October
31, 2018. The agreement terminated effective March 11, 2019, when he joined the Company as President of Corporate Development.

Discontinued Operations

Discontinued Operations2 Months Ended
Dec. 31, 2018
Discontinued Operations and Disposal Groups [Abstract]
Discontinued Operations18. DISCONTINUED OPERATIONS On June 23, 2017, the Company
sold Majesco Entertainment Company, a Nevada corporation and wholly-owned subsidiary of the Company (“Majesco Sub”)
to Zift Interactive LLC (“Zift”), a Nevada limited liability company pursuant to a purchase agreement. The results
of operations from the discontinued business for the two months ended December 31, 2018 and the fiscal years ended October 31,
2018 and 2017 are as follows (in thousands):
For the Two Months Ended December 31, For the Years Ended October 31,
2018 2018 2017
Revenues $ – $ – $ 558
Expenses – – 1,007
Loss from discontinued operations $ – $ – $ (449 )
Gain on sale of discontinued operations $ – $ – $ 100 The cash flows from the
discontinued business for the two months ended December 31, 2018 and the fiscal years ended October 31, 2018 and 2017 are as follows
(in thousands):
For the Two Months Ended December 31, For the Years Ended October 31,
2018 2018 2017
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss from discontinued operations $ – $ – $ (349 )
Adjustments to reconcile net loss from discontinued operations to net cash used in discontinued operating activities:
Depreciation and amortization – – 11
Stock based compensation expense – – 1,118
Amortization of capitalized software development costs and license fees – – 50
Gain on sale of Majesco Sub – – (100 )
Changes in operating assets and liabilities:
Accounts receivable – – 113
Accounts payable and accrued expenses – – (810 )
Net cash provided by discontinued operating activities $ – $ – $ 33
CASH FLOWS FROM INVESTING ACTIVITIES
Cash received from sale of Majesco Sub $ 10 $ 60 $ 25
Net cash provided by discontinued investing activities $ 10 $ 60 $ 25

Segment Reporting

Segment Reporting2 Months Ended
Dec. 31, 2018
Segment Reporting [Abstract]
Segment Reporting19. SEGMENT REPORTING The Company’s operations
involve products and services which are managed separately. Accordingly, it operates in two segments: 1) regenerative medicine
and 2) contract services. Certain information concerning
our segments for the two months ended December 31, 2018 and the fiscal years ended October 31, 2018 and 2017 is presented in the
following table (in thousands):
For the Two Months Ended December 31, For the Years Ended October 31,
2018 2018 2017
Net revenues:
Reportable segments:
Regenerative medicine $ 210 $ 689 $ –
Contract services 463 874 –
Total net revenues $ 673 $ 1,563 $ –
Net loss:
Reportable segments:
Regenerative medicine $ (18,352 ) $ (65,219 ) $ (130,480 )
Contract services (66 ) (222 ) –
Discontinued operations – – (349 )
Total net loss $ (18,418 ) $ (65,441 ) $ (130,829 )
As of December 31, 2018 As of October 31, 2018 As of October 31, 2017
Identifiable assets employed:
Reportable segments:
Regenerative medicine $ 74,795 $ 82,512 $ 20,152
Contract services 5,371 5,330 –
Discontinued operations – – –
Total assets $ 80,166 $ 87,842 $ 20,152

Transition Period Comparative F

Transition Period Comparative Financials (Unaudited)2 Months Ended
Dec. 31, 2018
Transition Period Comparative Financials
Transition Period Comparative Financials (Unaudited)20. TRANSITION PERIOD COMPARATIVE FINANCIALS
(UNAUDITED) Consolidated statements of operations for the
two months ended December 31, 2017 is as follows:
For the Two Months Ended December 31,
2017
(Unaudited)
Net revenues $ 13
Cost of sales 1
Gross profit 12
Operating costs and expenses
Product research and development 4,930
General and administrative 7,979
Total operating costs and expenses 12,909
Operating loss (12,897 )
Other income (expense)
Interest income 18
Change in fair value of derivatives 1,964
Net loss (10,915 )
Deemed dividend – accretion of discount on Series F preferred stock (593 )
Deemed dividend – exchange of Series F preferred stock (182 )
Net loss attributable to common stockholders $ (11,690 )
Net loss per share, basic and diluted:
Net loss $ (1.68 )
Deemed dividend – accretion of discount on Series F preferred stock (0.09 )
Deemed dividend – exchange of Series F preferred stock (0.03 )
Net loss attributable to common stockholders $ (1.80 )
Weighted average shares outstanding, basic and diluted: 6,496,841

Subsequent Events

Subsequent Events2 Months Ended
Dec. 31, 2018
Subsequent Events [Abstract]
Subsequent Events21. SUBSEQUENT EVENTS On March 1, 2019, the Company was informed
it is the subject of an SEC investigation, and it is unable to make any prediction regarding the outcome of the investigation
at this time.

Summary of Significant Accoun_2

Summary of Significant Accounting Policies (Policies)2 Months Ended
Dec. 31, 2018
Accounting Policies [Abstract]
Principles of ConsolidationPrinciples of Consolidation.
SegmentsSegments.
Use of EstimatesUse of estimates.
ReclassificationsReclassifications.
Cash and Cash EquivalentsCash and cash equivalents.
InvestmentsInvestments
Accounts ReceivableAccounts Receivable.
Accounts Payable and Accrued ExpensesAccounts Payable and
Accrued Expenses.
InventoryInventory.
Property and EquipmentProperty and Equipment.
Capitalized SoftwareCapitalized Software.
Goodwill and Intangible AssetsGoodwill and Intangible
Assets. The fair value of reporting
units is based on widely accepted valuation techniques that the Company believes market participants would use, although the valuation
process requires significant judgment and often involves the use of significant estimates and assumptions. We performed a qualitative
assessment and concluded that it is more likely than not that the fair value of the reporting unit is more than its carrying value.
Accordingly, there was no indication of impairment, and further quantitative testing was not required. Adverse market or economic
events could result in impairment charges in future periods. Intangible assets deemed
to have finite lives are amortized on a straight-line basis over their estimated useful lives, which generally range from one
to eleven years. The useful life is the period over which the asset is expected to contribute directly, or indirectly, to its
future cash flows. Intangible assets are reviewed for impairment when certain events or circumstances exist. For amortizable intangible
assets, impairment exists when the undiscounted cash flows exceed its carrying value. At least annually, the remaining useful
life is evaluated.
Impairment of Long-Lived AssetsImpairment of Long-Lived
Assets.
Income TaxesIncome Taxes.
Stock Based CompensationStock-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. Forfeitures are recognized as they occur. The value of restricted
stock 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. The accounting for non-employee
options and restricted stock is similar to that of employees, however, unlike employee options and restricted stock, the measurement
date is not the grant date. The measurement date is when performance is complete. Until the options or shares vest, they are re-measured
(re-valued) each reporting period and the expense marked up or marked down accordingly.
Loss Per ShareLoss Per Share. Since the Company was in a
loss position for all periods presented, basic net loss per share is the same as diluted net loss per share since the effects
of potentially dilutive securities are antidilutive.
Commitments and ContingenciesCommitments and Contingencies.
Accounting for WarrantsAccounting for Warrants
Change in Fair Value of DerivativesChange in Fair Value
of Derivatives.
Revenue RecognitionRevenue Recognition. Revenue from Contracts with Customers Revenue Recognition Under ASC 605, regenerative
medicine revenue is recognized upon the shipment of products or the performance of services when each of the following four criteria
is met: (i) persuasive evidence of an arrangement exists; (ii) products are delivered or services are performed; (iii) the sales
price is fixed or determinable; and (iv) collectability is reasonably assured. In the contract services segment, revenue is recognized
on the proportional performance method over the term of the respective service contract which requires us to make reasonable estimates
of the extent of progress toward completion of the contract. Under this method, revenue is recognized according to the percentage
of cost completed for the study. As a result, unbilled receivables and deferred revenue are recognized based on payment timing
and work completed. Under ASC 606, revenue
is recognized when a customer obtains control of promised goods or services, in an amount that reflects the consideration which
the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an
entity determines are within the scope of ASC 606, the Company performs the following five steps: (i) identify the contract(s)
with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate
the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies
a performance obligation. In the regenerative medicine
products segment, the Company records product revenues primarily from the sale of its regenerative tissue products. The Company
sells its products to healthcare providers, primarily through direct sales representatives. Product revenues consists of a single
performance obligation that the Company satisfies at a point in time. In general, the Company recognizes product revenue upon delivery
to the customer. In the contract services
segment, the Company records service revenues from the sale of its contract research services, which includes delivery of preclinical
studies and other research services to unrelated third parties. Service revenues generally consist of a single performance obligation
that the Company satisfies over time using an input method based on costs incurred to date relative to the total costs expected
to be required to satisfy the performance obligation. The Company believes that this method provides a faithful depiction of the
transfer of services over the term of the performance obligation based on the remaining services needed to satisfy the obligation.
This requires the Company to make reasonable estimates of the extent of progress toward completion of the contract. As a result,
unbilled receivables and deferred revenue are recognized based on payment timing and work completed. Generally, a portion of the
payment is due upfront and the remainder upon completion of the study, with most studies completing in less than a year. As of
December 31, 2018, October 31, 2018 and 2017, the Company had unbilled receivables of $157,000, $160,000 and $0 and deferred revenue
of $170,000, $150,000 and $0. The unbilled receivables balance is included in consolidated accounts receivable. Revenue of $83,000
was recognized during the two months ended December 31, 2018 that was included in the deferred revenue balance as of October 31,
2018. Costs to obtain the contract
are incurred for product revenue as they are shipped and are expensed as incurred. The Company considers
a significant customer to be one that comprises more than 10% of net revenues or accounts receivable. Concentration of revenues
were as follows for the two months ended December 31, 2018 and the fiscal year ended October 31, 2018:
Two Months Ended December 31, 2018
Year Ended October 31, 2018
Segment % of Revenue % of Revenue
Customer A Contract Services 32 % 19 %
Customer B Regenerative Medicine 17 % *
Customer C Contract Services 11 % * Concentration of accounts
receivable were as follows as of December 31, 2018:
As of December 31, 2018
Segment
% of Accounts Receivable
Customer A Contract services 23 %
Customer B Regenerative medicine 20 %
Customer D Regenerative medicine 14 % *The amount did not exceed
10%
Recent Accounting PronouncementsRecent Accounting Pronouncements In February 2016, FASB
issued ASU No. 2016-02, Leases (Topic 842), Leases (Topic 840) In July 2018, the FASB
issued ASU No. 2018-11, Leases (Topic 842): Targeted Improvements The Company expects that
this standard will have a material effect on the financial statements upon adoption. The most significant effects will primarily
relate to (a) the recognition of ROU assets and lease liabilities on the balance sheet, which upon adoption will range from $5.2
million to $5.6 million in relation to its existing operating lease agreements for the office and laboratory spaces in Salt Lake
City, Utah; and (b) providing significant new disclosures about leasing activities. In
June 2018, the FASB issued ASU 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-based
Payment Accounting In
August 2018, the FASB issued ASU 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40) In
November 2018, the FASB issued ASU No. 2018-18, Collaborative Arrangements (Topic 808): Clarifying the Interaction between
Topic 808 and Topic 606
Recently Adopted Accounting PronouncementsRecently Adopted Accounting Pronouncements In May 2014, the FASB issued
ASU 2014-09, Revenue from Contracts with Customers (Topic 606) In August 2016, the FASB
issued ASU 2016-15, Statement of Cash Flows - Classification of Certain Cash Receipts and Cash Payments The adoption
of this ASU on November 1, 2018 has not had a material impact on the Company’s consolidated financial statements and related
disclosures. In May 2017, the FASB issued
ASU 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting. The adoption of this ASU on November 1, 2018 has not had a material
impact on the Company’s consolidated financial statements and related disclosures. In January 2017, the FASB
issued ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment. had
no impact on the Company’s consolidated financial statements and related disclosures.

Summary of Significant Accoun_3

Summary of Significant Accounting Policies (Tables)2 Months Ended
Dec. 31, 2018
Accounting Policies [Abstract]
Schedule of Concentration RiskThe Company considers
a significant customer to be one that comprises more than 10% of net revenues or accounts receivable. Concentration of revenues
were as follows for the two months ended December 31, 2018 and the fiscal year ended October 31, 2018:
Two Months Ended December 31, 2018
Year Ended October 31, 2018
Segment % of Revenue % of Revenue
Customer A Contract Services 32 % 19 %
Customer B Regenerative Medicine 17 % *
Customer C Contract Services 11 % * Concentration of accounts
receivable were as follows as of December 31, 2018:
As of December 31, 2018
Segment
% of Accounts Receivable
Customer A Contract services 23 %
Customer B Regenerative medicine 20 %
Customer D Regenerative medicine 14 % *The amount did not exceed
10%

IBEX Acquisition (Tables)

IBEX Acquisition (Tables)2 Months Ended
Dec. 31, 2018
Business Combinations [Abstract]
Schedule of Purchase Price AllocationThe following table summarizes
the purchase price allocation for the IBEX acquisition (in thousands):
Equipment $ 430
Land and buildings 2,000
Intangible assets 1,057
Goodwill 278
Accrued property taxes (9 )
Aggregate purchase price $ 3,756
Less: Promissory note to seller 1,220
Contingent consideration 278
Cash paid at closing $ 2,258
Schedule of Identifiable Intangible AssetsThe following table shows
the valuation of the individual identifiable intangible assets acquired along with their estimated remaining useful lives as of
the acquisition date (in thousands):
Approximate Fair Value
Remaining Useful Life (in years)
Non-compete agreement $ 410 4
Customer contracts and relationships 534 7 to 8
Trade names and trademarks 101 10 to 11
Backlog 12 Less than 1
Total intangible assets $ 1,057

Fair Value (Tables)

Fair Value (Tables)2 Months Ended
Dec. 31, 2018
Fair Value Disclosures [Abstract]
Schedule of Fair Value Assumptions of Warrants and Embedded Conversion FeatureThe fair value of the
bifurcated embedded conversion feature was estimated to be approximately $7.2 million and $9.3 million, respectively, at March
5, 2018 and October 31, 2017 as calculated using the 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 2.2 % 1.6 %
Volatility 88.2 % 96.0 %
Term 1.5 1.9 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 2.2 % 1.6 %
Volatility 88.2 % 96.0 %
Term 1.5 1.9
Schedule of Fair Value of Financial Instruments Measured on Recurring BasisThe following table sets
forth the fair value of the Company’s financial assets and liabilities measured on a recurring basis by level within the
fair value hierarchy as of December 31, 2018, October 31, 2018 and 2017 (in thousands):
Fair Value Measurement as of December 31, 2018
Level 1 Level 2 Level 3 Total
Assets:
Money market funds $ 7 $ – $ – $ 7
Commercial paper – 21,392 – 21,392
Corporate debt securities – 5,448 – 5,448
U.S. government debt securities – 3,226 – 3,226
Total $ 7 $ 30,066 $ – $ 30,073
Liabilities:
Contingent consideration $ – $ – $ 261 $ 261
Total $ – $ – $ 261 $ 261
Fair Value Measurement as of October 31, 2018
Level 1 Level 2 Level 3 Total
Assets:
Money market funds $ 69,659 $ – $ – $ 69,659
Total $ 69,659 $ – $ – $ 69,659
Liabilities:
Contingent consideration $ – $ – $ 235 $ 235
Total $ – $ – $ 235 $ 235
Fair Value Measurement as of October 31, 2017
Level 1 Level 2 Level 3 Total
Assets:
Money market funds $ 17,322 $ – $ – $ 17,322
Total $ 17,322 $ – $ – $ 17,322
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 Contingent ConsiderationThe following table sets
forth the changes in the estimated fair value of our contingent consideration liability (in thousands) which is included in other
current liabilities:
Contingent Consideration
Fair value – October 31, 2017 $ –
IBEX acquisition – May 3, 2018 278
Change in fair value 20
Earned and paid in cash (30 )
Earned and moved to accounts payable (33 )
Fair value - October 31, 2018 $ 235
Change in fair value 57
Earned and moved to accounts payable (31 )
Fair value – December 31, 2018 $ 261

Cash Equivalents and Availabl_2

Cash Equivalents and Available-for-Sale Marketable Securities (Tables)2 Months Ended
Dec. 31, 2018
Cash and Cash Equivalents [Abstract]
Schedule of Cash Equivalents and Available-for-sale Marketable SecuritiesCash equivalents and available-for-sale
marketable securities consisted of the following as of December 31, 2018 (in thousands):
December 31, 2018
Amortized Cost Unrealized Gains Unrealized Losses Market Value
Cash equivalents:
Money market funds $ 7 $ – $ – $ 7
Commercial paper 20,648 30 – 20,678
U.S. government debt securities 3,224 2 – 3,226
Total cash equivalents 23,879 32 – 23,911
Short-term investments:
Commercial paper 714 – – 714
Corporate debt securities 5,444 5 (1 ) 5,448
Total short-term investments 6,158 5 (1 ) 6,162
Total $ 30,037 $ 37 $ (1 ) $ 30,073

Property and Equipment, Net (Ta

Property and Equipment, Net (Tables)2 Months Ended
Dec. 31, 2018
Property, Plant and Equipment [Abstract]
Schedule of Property and Equipment, NetThe following table presents
the components of property and equipment, net (in thousands):
December 31, 2018 October 31, 2018 October 31, 2017
Machinery and equipment $ 8,276 $ 8,134 $ 2,418
Land and buildings 2,000 2,000 –
Computers and software 1,372 1,337 211
Leasehold improvements 1,230 1,137 –
Construction in progress 2,402 1,587 –
Furniture and equipment 614 566 30
Total property and equipment, gross 15,894 14,761 2,659
Accumulated depreciation (2,158 ) (1,834 ) (486 )
Total property and equipment, net $ 13,736 $ 12,927 $ 2,173
Schedule of Depreciation ExpenseDepreciation and amortization
expense for property and equipment, including assets acquired under capital leases for the two months ended December 31, 2018 and
for the fiscal years ended October 31, 2018 and 2017 is as follows (in thousands):
For the Two Months ended December 31, For the Years Ended October 31,
2018 2018 2017
General and administrative expense:
Continuing operations $ 155 $ 223 $ 1
Discontinued operations – – 11
155 223 12
Research and development expense:
Continuing operations 175 1,171 431
Total depreciation and amortization expense $ 330 $ 1,394 $ 443

Intangible Assets and Goodwill

Intangible Assets and Goodwill (Tables)2 Months Ended
Dec. 31, 2018
Goodwill and Intangible Assets Disclosure [Abstract]
Schedule of Intangible AssetsIntangible assets, net,
consist of the following (in thousands):
December 31, 2018 October 31, 2018 October 31, 2017
Non-compete agreement $ 410 $ 410 $ –
Customer contracts and relationships 534 534 –
Trade names and trademarks 101 101 –
Backlog 12 12 –
Total intangible assets, gross 1,057 1,057 –
Accumulated amortization (133 ) (100 ) –
Total intangible assets, net $ 924 $ 957 $ –
Schedule of Future Amortization of Intangible AssetsThe future amortization
of these intangible assets is expected to be as follows (in thousands):
Year ended December 31, 2019 $ 193
Year ended December 31, 2020 189
Year ended December 31, 2021 189
Year ended December 31, 2022 121
Year ended December 31, 2023 87
Thereafter 145
$ 924
Schedule of Carrying Amount of GoodwillThere were no changes in the carrying amount
of goodwill for the two months ended December 31, 2018. The changes in the carrying amount of goodwill for fiscal year ended October
31, 2018 is as follows (in thousands):
Regenerative Medicine
Contract Services Total
October 31, 2017 $ – $ – $ –
Additions due to acquisitions (1) – 278 278
October 31, 2018 – 278 278
December 31, 2018 $ – $ 278 $ 278
(1) On May 3, 2018, the Company acquired the preclinical research and contract services business and related real estate from IBEX L.L.C.

Accounts Payable and Accrued _2

Accounts Payable and Accrued Expenses (Tables)2 Months Ended
Dec. 31, 2018
Payables and Accruals [Abstract]
Schedule of Accounts Payable and Accrued ExpensesThe following table presents
the major components of accounts payable and accrued expenses (in thousands):
December 31, 2018 October 31, 2018 October 31, 2017
Accounts payable $ 2,918 $ 2,007 $ 441
Salaries and other compensation 1,280 933 574
Other accruals 1,670 792 369
Legal and accounting 640 631 555
Total accounts payable and accrued expenses $ 6,508 $ 4,363 $ 1,939

Preferred Shares and Common S_2

Preferred Shares and Common Shares (Tables)2 Months Ended
Dec. 31, 2018
Equity [Abstract]
Schedule of Deemed Dividend on Preferred Shares ExchangeThe 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 1,003,393 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 ActivityConvertible preferred stock
activity for the year ended October 31, 2018 consisted of the following:
Shares Outstanding - October 31, 2017 Preferred Stock Conversions and Series F Exchange – During the Year Ended October 31, 2018 Common Stock Shares Issued – During the Year Ended October 31, 2018
Series A 3,146,671 (3,146,671 ) 713,036
Series B 47,689 (47,689 ) 794,820
Series C 2,578 (2,578 ) 59,950
Series D 26,667 (26,667 ) 44,445
Series E 7,050 (7,050 ) 7,050,000
Series F 6,455 (6,455 ) 972,070
Total 3,237,110 (3,237,110 ) 9,634,321
Schedule of Convertible Preferred Stock OutstandingThere was no convertible
preferred stock outstanding as of December 31, 2018 and October 31, 2018. 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 – 794,806
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 15,906,245 – – – –
Total 25,000,000 3,237,110 $ 114,536 $ 19,890 9,307,904

Stock Based Compensation (Table

Stock Based Compensation (Tables)2 Months Ended
Dec. 31, 2018
Schedule of Share-based Compensation Related to Restricted Stock Awards and Stock OptionsFor the two months ended
December 31, 2018 and the fiscal years ended October 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 Two Months Ended December 31, For the Years Ended October 31,
2018 2018 2017
General and administrative expense:
Continuing operations $ 7,505 $ 31,982 $ 14,869
Discontinued operations – – 1,118
7,505 31,982 15,987
Research and development expense:
Continuing operations 919 6,322 1,758
Sales and marketing expense:
Continuing operations 522 517 –
Total stock-based compensation expense $ 8,946 $ 38,821 $ 17,745
Stock-based compensation expense classified as a liability $ 38 $ – $ –
Stock-based compensation expense classified to equity $ 8,908 $ 38,321 $ 17,745
Schedule of Share-based Payment Award, Stock Options, Valuation AssumptionsThe fair value of each
option grant is estimated on the date of grant using the Black-Scholes option-pricing model with the following range of assumptions
for the two months ended December 31, 2018 and the fiscal years ended October 31, 2018 and 2017:
December 31, October 31,
2018 2018 2017
Risk free annual interest rate 2.6%-3.2 % 2.0%-3.2 % 1.6%-2.3 %
Expected volatility 80.6%-94.4 % 80.9%-96.5 % 71.7%-86.5 %
Expected term of options (years) 5.0-6.5 5.0-6.0 5.0-6.0
Assumed dividends – – –
Schedule of Share-based Compensation, Restricted Stock ActivityRestricted-stock activity
for employees and non-employees for the two months ended December 31, 2018 and the fiscal years ended October 31, 2018 and 2017:
Number of shares
Weighted-Average Grant-Date
Unvested, October 31, 2016 274,829 $ 6.00
Granted 1,057,500 $ 4.80
Vested (1,105,197 ) $ 4.47
Unvested - October 31, 2017 227,132 $ 7.83
Granted 712,034 $ 25.27
Vested (242,819 ) $ 11.74
Forfeited (22,387 ) $ 20.62
Unvested - October 31, 2018 673,960 $ 24.52
Granted 63,192 $ 14.17
Vested (1) (86,042 ) $ 24.17
Forfeited – $ –
Unvested – December 31, 2018 651,110 $ 23.65
(1) The number of vested restricted stock units includes shares that were withheld on behalf of employees to satisfy the minimum statutory tax withholding requirements.
Employee Stock Option [Member]
Schedule of Share-based Compensation, Stock Options, ActivityEmployee stock-option activity
for the two months ended December 31, 2018 and the fiscal years ended October 31, 2018 and 2017:
Number of shares
Weighted-Average Exercise Price
Outstanding, October 31, 2016 383,210 $ 5.74
Granted 3,482,000 $ 6.29
Exercised (268,847 ) $ 4.84
Forfeited (70,833 ) $ 6.42
Outstanding - October 31, 2017 3,525,530 $ 6.34
Granted 2,638,769 $ 23.55
Exercised (161,810 ) $ 4.31
Forfeited (217,984 ) $ 21.89
Outstanding - October 31, 2018 5,784,505 $ 13.68
Granted 396,861 $ 14.27
Exercised – $ –
Forfeited (938 ) $ 24.20
Outstanding – December 31, 2018 6,180,428 $ 13.72
Options exercisable, December 31, 2018 3,899,806 $ 9.23
Weighted-average grant date fair value of options granted during the two months ended December 31, 2018 $ 9.95
Non-Employee Stock Option [Member]
Schedule of Share-based Compensation, Stock Options, ActivityNon-employee stock option
activity for the two months ended December 31, 2018 and the fiscal years ended October 31, 2018 and 2017:
Number of shares
Weighted-Average Exercise Price
Outstanding - October 31, 2016 – $ –
Granted 293,000 $ 19.61
Forfeited – $ –
Outstanding - October 31, 2017 293,000 $ 19.61
Granted 3,000 $ 18.63
Forfeited – $ –
Outstanding - October 31, 2018 296,000 $ 19.60
Granted 23,791 $ 21.42
Forfeited (334 ) $ 6.33
Outstanding – December 31, 2018 319,457 $ 19.75
Options exercisable - December 31, 2018 199,207 $ 17.90

Income Taxes (Tables)

Income Taxes (Tables)2 Months Ended
Dec. 31, 2018
Income Tax Disclosure [Abstract]
Schedule of Loss Before Income TaxesLoss before income taxes
and discontinued operations consisted of (in thousands):
For the Two Months Ended December 31, For the Years Ended October 31,
2018 2018 2017
Net loss from continuing operations before income taxes $ (18,418 ) (65,743 ) (130,480 )
Schedule of Components of Income Tax Expense (Benefit)The provision (benefit)
for income taxes for the years ended December 31, 2018, October 31, 2018, and 2017 consisted of (in thousands):
For the Two Months Ended December 31, For the Years Ended October 31,
2018 2018 2017
Current:
Federal $ – $ (302 ) $ –
State – – –
Deferred:
Federal (3,734 ) (11,561 ) (2,679 )
State (257 ) (475 ) (304 )
Change in: valuation allowance 3,991 12,036 2,983
Total provision (benefit) for income taxes $ - $ (302 ) $ –
Schedule of Statutory Federal Rate and Provision for Income TaxThe difference between
income taxes computed at the statutory federal rate and the provision for income taxes for the years ended December 31, 2018, October
31, 2018, and 2017 related to the following (in thousands, except percentages):
For the Two Months Ended December 31, For the Years Ended October 31,
2018 2018 2017
Amount
Percent of Pretax Income Amount
Percent of Pretax Income Amount
Percent of Pretax Income
Tax (benefit) at federal statutory rate $ (3,867 ) 21 % $ (22,325 ) 34 % $ (44,283 ) 34 %
State income taxes, net of federal income taxes (254 ) 1 % (475 ) (1 )% (304 ) – %
Effect of warrant liability – – % (1,120 ) 2 % (74 ) – %
Effect of other permanent items 5 – % 30 – % (82 ) – %
Effect of Acquisition of intangible assets – – % – – % 35,595 (27 )%
Effect of stock compensation 27 – % – – % 3,147 (3 )%
Change in valuation allowance 3,991 (22 )% 12,036 (18 )% 2,983 (2 )%
Reduction of NOL’s due to Section 382 Limitations - – % 11,552 (17 )% 3,018 (2 )%
Other 98 - - - - -
$ - – % $ (302 ) – % $ – - %
Schedule of Deferred Tax Assets and LiabilitiesThe components of deferred
income tax assets (liabilities) were as follows (in thousands):
For the Two Months Ended December 31, For the Years Ended October 31,
2018 2018 2017
Impairment of development costs $ – $ 7 $ –
Depreciation and amortization (533 ) (546 ) 95
Compensation expense not deductible until options are exercised 12,543 10,529 4,553
All other temporary differences 236 382 248
Net operating loss carry forward 10,526 8,455 3,158
Less valuation allowance (22,772 ) (18,827 ) (8,054 )
Deferred tax asset (liability) $ – $ – $ –

Loss Per Share (Tables)

Loss Per Share (Tables)2 Months Ended
Dec. 31, 2018
Earnings Per Share [Abstract]
Schedule of Anti-dilutive Potential Shares Outstanding ActivityThe
following outstanding potentially dilutive shares have been excluded from the calculation of diluted net loss per share for the
periods presented due to their anti-dilutive effect:
December 31, October 31,
2018 2018 2017
Shares issuable upon conversion of preferred stock – – 9,307,904
Shares issuable upon exercise of warrants – – 322,727
Shares issuable upon exercise of stock options 6,499,885 6,080,505 3,818,530
Non-vested shares under restricted stock grants 651,110 673,960 227,132

Commitments and Contingencies (

Commitments and Contingencies (Tables)2 Months Ended
Dec. 31, 2018
Commitments and Contingencies Disclosure [Abstract]
Schedule of Future Minimum Lease Payments for Operating and Capital LeaseThe following schedule
summarizes the future minimum lease payments for operating and capital leases at December 31, 2018 ( in thousands
Operating leases Capital leases
Year ended December 31, 2019 $ 1,895 $ 66
Year ended December 31, 2020 1,819 58
Year ended December 31, 2021 1,455 55
Year ended December 31, 2022 1,216 28
$ 6,385 $ 207

Discontinued Operations (Tables

Discontinued Operations (Tables)2 Months Ended
Dec. 31, 2018
Discontinued Operations and Disposal Groups [Abstract]
Schedule of Assets and Liabilities of Discontinued OperationsThe results of operations
from the discontinued business for the two months ended December 31, 2018 and the fiscal years ended October 31, 2018 and 2017
are as follows (in thousands):
For the Two Months Ended December 31, For the Years Ended October 31,
2018 2018 2017
Revenues $ – $ – $ 558
Expenses – – 1,007
Loss from discontinued operations $ – $ – $ (449 )
Gain on sale of discontinued operations $ – $ – $ 100 The cash flows from the
discontinued business for the two months ended December 31, 2018 and the fiscal years ended October 31, 2018 and 2017 are as follows
(in thousands):
For the Two Months Ended December 31, For the Years Ended October 31,
2018 2018 2017
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss from discontinued operations $ – $ – $ (349 )
Adjustments to reconcile net loss from discontinued operations to net cash used in discontinued operating activities:
Depreciation and amortization – – 11
Stock based compensation expense – – 1,118
Amortization of capitalized software development costs and license fees – – 50
Gain on sale of Majesco Sub – – (100 )
Changes in operating assets and liabilities:
Accounts receivable – – 113
Accounts payable and accrued expenses – – (810 )
Net cash provided by discontinued operating activities $ – $ – $ 33
CASH FLOWS FROM INVESTING ACTIVITIES
Cash received from sale of Majesco Sub $ 10 $ 60 $ 25
Net cash provided by discontinued investing activities $ 10 $ 60 $ 25

Segment Reporting (Tables)

Segment Reporting (Tables)2 Months Ended
Dec. 31, 2018
Segment Reporting [Abstract]
Schedule of Segment InformationCertain information concerning
our segments for the two months ended December 31, 2018 and the fiscal years ended October 31, 2018 and 2017 is presented in the
following table (in thousands):
For the Two Months Ended December 31, For the Years Ended October 31,
2018 2018 2017
Net revenues:
Reportable segments:
Regenerative medicine $ 210 $ 689 $ –
Contract services 463 874 –
Total net revenues $ 673 $ 1,563 $ –
Net loss:
Reportable segments:
Regenerative medicine $ (18,352 ) $ (65,219 ) $ (130,480 )
Contract services (66 ) (222 ) –
Discontinued operations – – (349 )
Total net loss $ (18,418 ) $ (65,441 ) $ (130,829 )
As of December 31, 2018 As of October 31, 2018 As of October 31, 2017
Identifiable assets employed:
Reportable segments:
Regenerative medicine $ 74,795 $ 82,512 $ 20,152
Contract services 5,371 5,330 –
Discontinued operations – – –
Total assets $ 80,166 $ 87,842 $ 20,152

Transition Period Comparative_2

Transition Period Comparative Financials (Unaudited) (Tables)2 Months Ended
Dec. 31, 2018
Transition Period Comparative Financials
Schedule of Transition Period Comparative FinancialsConsolidated statements of operations for the
two months ended December 31, 2017 is as follows:
For the Two Months Ended December 31,
2017
(Unaudited)
Net revenues $ 13
Cost of sales 1
Gross profit 12
Operating costs and expenses
Product research and development 4,930
General and administrative 7,979
Total operating costs and expenses 12,909
Operating loss (12,897 )
Other income (expense)
Interest income 18
Change in fair value of derivatives 1,964
Net loss (10,915 )
Deemed dividend – accretion of discount on Series F preferred stock (593 )
Deemed dividend – exchange of Series F preferred stock (182 )
Net loss attributable to common stockholders $ (11,690 )
Net loss per share, basic and diluted:
Net loss $ (1.68 )
Deemed dividend – accretion of discount on Series F preferred stock (0.09 )
Deemed dividend – exchange of Series F preferred stock (0.03 )
Net loss attributable to common stockholders $ (1.80 )
Weighted average shares outstanding, basic and diluted: 6,496,841

Principal Business Activity a_2

Principal Business Activity and Basis of Presentation (Details Narrative) - USD ($) $ in ThousandsJun. 23, 2017Apr. 07, 2017Dec. 31, 2018Dec. 31, 2017Oct. 31, 2018Oct. 31, 2017
Convertible preferred stock, shares authorized25,000,000 25,000,000 25,000,000
Net revenues $ 673 $ 13 $ 1,563
Cash consideration received95
Remaining balance on cash receivable $ 5
Majesco to Zift [Member]
Common stock issued, outstanding percentage100.00%
Cash consideration $ 100
Additional monthly payments5
Net revenues $ 0
Series E Preferred Shares [Member]
Number of stock convertible into an aggregate shares of common stock7,050,000
Number of stock convertible into an aggregate value of common stock $ 104,700
Series E Preferred Shares [Member] | Dr. Denver Lough [Member]
Convertible preferred stock, shares authorized7,050

Summary of Significant Accoun_4

Summary of Significant Accounting Policies (Details Narrative) $ in Thousands2 Months Ended12 Months Ended
Dec. 31, 2018USD ($)SegmentDec. 31, 2017USD ($)Oct. 31, 2018USD ($)SegmentOct. 31, 2017USD ($)
Number of operating segments | Segment2 2
Unbilled receivables $ 157 $ 160 $ 0
Deferred revenue170 150
Net revenues $ 673 $ 13 $ 1,563
Concentration risk, descriptionThe Company considers a significant customer to be one that comprises more than 10% of net revenues or accounts receivable.
Capitalized Software [Member]
Property and equipment, estimated useful lives3 years
Minimum [Member]
Property and equipment, estimated useful lives3 years
Finite-lived intangible asset, useful life1 year
ROU assets $ 5,200
Minimum [Member] | Restricted Stock [Member]
Share-based compensation arrangement by share-based payment award, award vesting period6 months
Maximum [Member]
Property and equipment, estimated useful lives8 years
Finite-lived intangible asset, useful life11 years
ROU assets $ 5,600
Maximum [Member] | Restricted Stock [Member]
Share-based compensation arrangement by share-based payment award, award vesting period3 years

Summary of Significant Accoun_5

Summary of Significant Accounting Policies - Schedule of Concentration Risk (Details)2 Months Ended12 Months Ended
Dec. 31, 2018Oct. 31, 2018
Sales Revenue Net [Member] | Customer A [Member] | Contract Services [Member]
Concentration risk percentage32.00%19.00%
Sales Revenue Net [Member] | Customer B [Member] | Regenerative Medicine [Member]
Concentration risk percentage17.00% [1]
Sales Revenue Net [Member] | Customer C [Member] | Contract Services [Member]
Concentration risk percentage11.00% [1]
Accounts Receivable [Member] | Customer A [Member] | Contract Services [Member]
Concentration risk percentage23.00%
Accounts Receivable [Member] | Customer B [Member] | Regenerative Medicine [Member]
Concentration risk percentage20.00%
Accounts Receivable [Member] | Customer C [Member] | Regenerative Medicine [Member]
Concentration risk percentage14.00%
[1]The amount did not exceed 10%

Summary of Significant Accoun_6

Summary of Significant Accounting Policies - Schedule of Concentration Risk (Details) (Parenthetical) - Sales Revenue Net [Member]2 Months Ended12 Months Ended
Dec. 31, 2018Oct. 31, 2018
Customer B [Member] | Regenerative Medicine [Member]
Concentration risk percentage17.00% [1]
Customer B [Member] | Regenerative Medicine [Member] | Maximum [Member]
Concentration risk percentage10.00%
Customer C [Member] | Contract Services [Member]
Concentration risk percentage11.00% [1]
Customer C [Member] | Contract Services [Member] | Maximum [Member]
Concentration risk percentage10.00%
[1]The amount did not exceed 10%

Liquidity (Details Narrative)

Liquidity (Details Narrative) - USD ($) $ / shares in Units, $ in ThousandsJun. 07, 2018Apr. 12, 2018Dec. 31, 2018Dec. 31, 2017Oct. 31, 2018Oct. 31, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Net loss $ (18,418) $ (10,915) $ (65,441) $ (130,829)
Cash used in operating activities $ (7,999) $ (28,546) $ (7,583)
Public offering share value2,455,882 2,335,937
Common stock, par value $ 0.001 $ 0.001 $ 0.001 $ 0.001 $ 0.001
Public offering price per share $ 23.65 $ 16
Proceeds for public offering $ 58,000 $ 34,600

IBEX Acquisition (Details Narra

IBEX Acquisition (Details Narrative) $ in ThousandsMay 03, 2018USD ($)Dec. 31, 2018USD ($)Oct. 31, 2018USD ($)Mar. 02, 2018a
Direct and incremental costs $ 38
Ibex Group, L.L.C [Member]
Area of land acquired | a1.75
Purchase price of land $ 2,300 $ 3,800
Initial fair value of liabilities300
Net revenue437 831
Gross profit250 331
Contingent consideration liability $ 300
Estimated discount rate20.00%
Contingent consideration liability percentage15.00%
General and administrative expenses $ 57 $ 20
Ibex Group, L.L.C [Member] | Maximum [Member]
Contingent consideration liability $ 650
Ibex Group, L.L.C [Member] | Promissory Note payable [Member]
Initial fair value of liabilities $ 1,200

IBEX Acquisition - Schedule of

IBEX Acquisition - Schedule of Purchase Price Allocation (Details) - USD ($) $ in ThousandsDec. 31, 2018Oct. 31, 2018Oct. 31, 2017
Business Combinations [Abstract]
Equipment $ 430
Land and buildings2,000
Intangible assets1,057
Goodwill278 $ 278
Accrued property taxes(9)
Aggregate purchase price3,756
Less: Promissory note to seller1,220
Contingent consideration278
Cash paid at closing $ 2,258

IBEX Acquisition - Schedule o_2

IBEX Acquisition - Schedule of Identifiable Intangible Assets (Details) $ in Thousands2 Months Ended
Dec. 31, 2018USD ($)
Total intangible assets $ 1,057
Non-Compete Agreement [Member]
Total intangible assets $ 410
Remaining useful life4 years
Customer Contracts and Relationships [Member]
Total intangible assets $ 534
Customer Contracts and Relationships [Member] | Minimum [Member]
Remaining useful life7 years
Customer Contracts and Relationships [Member] | Maximum [Member]
Remaining useful life8 years
Trade Names and Trademarks [Member]
Total intangible assets $ 101
Trade Names and Trademarks [Member] | Minimum [Member]
Remaining useful life10 years
Trade Names and Trademarks [Member] | Maximum [Member]
Remaining useful life11 years
Backlog [Member]
Total intangible assets $ 12
Remaining useful life, descriptionLess than 1

Fair Value (Details Narrative)

Fair Value (Details Narrative) - USD ($)Mar. 05, 2018Dec. 31, 2018Oct. 31, 2017Mar. 06, 2018Sep. 30, 2017
Number of warrant to purchase shares of common stock151,871
Embedded conversion feature $ 7,200,000 $ 9,300,000
Fair value of warrants2,525,567
Warrant Liability [Member]
Fair value of warrants $ 2,500,000 $ 4,300,000
Series F Preferred Stock [Member]
Number of warrant to purchase shares of common stock322,727 322,727
Warrant exercisable price per share $ 30
Warrants terms2 years
Fair value of warrants $ 4,300,000

Fair Value - Schedule of Fair V

Fair Value - Schedule of Fair Value Assumptions of Warrants and Embedded Conversion Feature (Details) - Monte Carlo Simulation [Member] - $ / sharesMar. 05, 2018Oct. 31, 2017
Measurement Input, Stock 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, percentages2.20%1.60%
Measurement Input, Price Volatility [Member] | Warrant Liability [Member]
Fair value assumptions, measurement input, percentages88.20%96.00%
Measurement Input, Expected Term [Member] | Warrant Liability [Member]
Fair value assumptions, measurement input, term1 year 6 months1 year 10 months 25 days
Series F Conversion Feature [Member] | Measurement Input, Stock 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, percentages2.20%1.60%
Series F Conversion Feature [Member] | Measurement Input, Price Volatility [Member]
Fair value assumptions, measurement input, percentages88.20%96.00%
Series F Conversion Feature [Member] | Measurement Input, Expected Term [Member]
Fair value assumptions, measurement input, term1 year 6 months1 year 10 months 25 days

Fair Value - Schedule of Fair_2

Fair Value - Schedule of Fair Value of Financial Instruments Measured on Recurring Basis (Details) - USD ($) $ in ThousandsDec. 31, 2018Oct. 31, 2018Oct. 31, 2017
Money market funds $ 7 $ 69,659 $ 17,322
Commercial paper21,392
Corporate debt securities5,448
U.S. government debt securities3,226
Total30,073 69,659 17,322
Contingent consideration261 235
Warrant liability4,256
Derivative liability9,246
Total261 235 13,502
Level 1 [Member]
Money market funds7 69,659 17,322
Commercial paper
Corporate debt securities
U.S. government debt securities
Total7 69,659 17,322
Contingent consideration
Warrant liability
Derivative liability
Total
Level 2 [Member]
Money market funds
Commercial paper21,392
Corporate debt securities5,448
U.S. government debt securities3,226
Total30,066
Contingent consideration
Warrant liability
Derivative liability
Total
Level 3 [Member]
Money market funds
Commercial paper
Corporate debt securities
U.S. government debt securities
Total
Contingent consideration261 235
Warrant liability4,256
Derivative liability9,246
Total $ 261 $ 235 $ 13,502

Fair Value - Schedule of Change

Fair Value - Schedule of Changes in Estimated Fair Value for Level 3 Classified Contingent Consideration (Details) - USD ($) $ in Thousands2 Months Ended12 Months Ended
Dec. 31, 2018Oct. 31, 2018Oct. 31, 2017
Fair Value Disclosures [Abstract]
Fair value at the beginning of period $ 235
IBEX acquisition – May 3, 2018 278
Change in fair value57 20
Earned and paid in cash (30)
Earned and moved to accounts payable(31)(33)
Fair value at the end of period $ 261 $ 235

Cash Equivalents and Availabl_3

Cash Equivalents and Available-for-Sale Marketable Securities (Details Narrative) - USD ($) $ in ThousandsDec. 31, 2018Oct. 31, 2018Oct. 31, 2017
Cash and Cash Equivalents [Abstract]
Money market funds $ 7 $ 69,659 $ 17,322

Cash Equivalents and Availabl_4

Cash Equivalents and Available-for-Sale Marketable Securities - Schedule of Cash Equivalents and Available-for-sale Marketable Securities (Details) - USD ($) $ in ThousandsDec. 31, 2018Oct. 31, 2018Oct. 31, 2017
Money market funds $ 7 $ 69,659 $ 17,322
Commercial paper21,392
U.S. government debt securities3,226
Total cash equivalents23,911
Commercial paper714
Corporate debt securities5,448
Total short-term investments6,162
Total30,073
Amortized Cost [Member]
Money market funds7
Commercial paper20,648
U.S. government debt securities3,224
Total cash equivalents23,879
Commercial paper714
Corporate debt securities5,444
Total short-term investments6,158
Total30,037
Unrealized Gains [Member]
Money market funds
Commercial paper30
U.S. government debt securities2
Total cash equivalents32
Commercial paper
Corporate debt securities5
Total short-term investments5
Total37
Unrealized Losses [Member]
Money market funds
Commercial paper
U.S. government debt securities
Total cash equivalents
Commercial paper
Corporate debt securities(1)
Total short-term investments(1)
Total $ (1)

Property and Equipment, Net - S

Property and Equipment, Net - Schedule of Property and Equipment, Net (Details) - USD ($) $ in ThousandsDec. 31, 2018Oct. 31, 2018Oct. 31, 2017
Property, Plant and Equipment [Abstract]
Machinery and equipment $ 8,276 $ 8,134 $ 2,418
Land and buildings2,000 2,000
Computers and software1,372 1,337 211
Leasehold improvements1,230 1,137
Construction in progress2,402 1,587
Furniture and equipment614 566 30
Total property and equipment, gross15,894 14,761 2,659
Accumulated depreciation(2,158)(1,834)(486)
Total property and equipment, net $ 13,736 $ 12,927 $ 2,173

Property and Equipment, Net -_2

Property and Equipment, Net - Schedule of Depreciation Expense (Details) - USD ($) $ in Thousands2 Months Ended12 Months Ended
Dec. 31, 2018Oct. 31, 2018Oct. 31, 2017
General and administrative expense, continuing operations $ 7,505 $ 31,982 $ 14,869
General and administrative expense, discontinued operations 1,118
General and administrative expense, continuing operations and discontinued operations7,505 31,982 15,987
Research and development expense, continuing operations919 6,322 1,758
Total depreciation and amortization expense330 1,394 432
Depreciation [Member]
General and administrative expense, continuing operations155 223 1
General and administrative expense, discontinued operations 11
General and administrative expense, continuing operations and discontinued operations155 223 12
Research and development expense, continuing operations175 1,171 431
Total depreciation and amortization expense $ 330 $ 1,394 $ 443

Intangible Assets and Goodwil_2

Intangible Assets and Goodwill (Details Narrative) - USD ($) $ in Thousands2 Months Ended12 Months Ended
Dec. 31, 2018Oct. 31, 2018Oct. 31, 2017
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense $ 33 $ 100

Intangible Assets and Goodwil_3

Intangible Assets and Goodwill - Schedule of Intangible Assets (Details) - USD ($) $ in ThousandsDec. 31, 2018Oct. 31, 2018Oct. 31, 2017
Total intangible assets, gross $ 1,057 $ 1,057
Accumulated amortization(133)(100)
Total intangible assets, net924 957
Non-Compete Agreement [Member]
Total intangible assets, gross410 410
Customer Contracts and Relationships [Member]
Total intangible assets, gross534 534
Trade Names and Trademarks [Member]
Total intangible assets, gross101 101
Backlog [Member]
Total intangible assets, gross $ 12 $ 12

Intangible Assets and Goodwil_4

Intangible Assets and Goodwill - Schedule of Future Amortization of Intangible Assets (Details) - USD ($) $ in ThousandsDec. 31, 2018Oct. 31, 2018Oct. 31, 2017
Goodwill and Intangible Assets Disclosure [Abstract]
Year ended December 31, 2019 $ 193
Year ended December 31, 2020189
Year ended December 31, 2021189
Year ended December 31, 2022121
Year ended December 31, 202387
Thereafter145
Total $ 924 $ 957

Intangible Assets and Goodwil_5

Intangible Assets and Goodwill - Schedule of Carrying Amount of Goodwill (Details) - USD ($) $ in Thousands2 Months Ended12 Months Ended
Dec. 31, 2018Oct. 31, 2018
Goodwill, begining $ 278
Additions due to acquisitions 278 [1]
Goodwill, ending278 278
Regenerative Medicine [Member]
Goodwill, begining
Additions due to acquisitions [1]
Goodwill, ending
Contract Services [Member]
Goodwill, begining278
Additions due to acquisitions 278 [1]
Goodwill, ending $ 278 $ 278
[1]On May 3, 2018, the Company acquired the preclinical research and contract services business and related real estate from IBEX L.L.C.

Accounts Payable and Accrued _3

Accounts Payable and Accrued Expenses - Schedule of Accounts Payable and Accrued Expenses (Details) - USD ($) $ in ThousandsDec. 31, 2018Oct. 31, 2018Oct. 31, 2017
Payables and Accruals [Abstract]
Accounts payable $ 2,918 $ 2,007 $ 441
Salaries and other compensation1,280 933 574
Other accruals1,670 792 369
Legal and accounting640 631 555
Total accounts payable and accrued expenses $ 6,508 $ 4,363 $ 1,939

Long Term Note Payable (Details

Long Term Note Payable (Details Narrative) - USD ($) $ in Thousands2 Months Ended12 Months Ended
Dec. 31, 2018Oct. 31, 2018Oct. 31, 2017May 03, 2018
Unamortized debt discount $ 68 $ 78
Amortization of debt discount10 $ 35
Promissory Note [Member]
Promissory note payable $ 1,300
Interest rate3.50%
Maturity dateNov. 3,
2020
Accelerated interest rate7.00%
Interest expenses $ 113
Ibex Group, L.L.C [Member]
Initial fair value of liabilities $ 300
Ibex Group, L.L.C [Member] | Promissory Note [Member]
Initial fair value of liabilities $ 1,200

Preferred Shares and Common S_3

Preferred Shares and Common Shares (Details Narrative) - USD ($)Jun. 07, 2018Apr. 12, 2018Mar. 06, 2018Mar. 05, 2018Feb. 06, 2018Sep. 20, 2017Apr. 07, 2017Dec. 31, 2018Oct. 31, 2018Oct. 31, 2017Sep. 30, 2017
Number of shares issued in offerings2,455,882 2,335,937
Common stock, par value $ 0.001 $ 0.001 $ 0.001 $ 0.001 $ 0.001
Sale of stock price, per share $ 23.65 $ 16
Proceeds for public offering $ 58,000,000 $ 34,600,000
Sales of stock amount $ 95,000
Fair value of warrants $ 2,525,567
Conversion of preferred stock into common stock, number shares issued3,045,034
Number of warrants exchanged to purchase common stock151,871
Preferred stock, shares authorized25,000,000 25,000,000 25,000,000
Convertible preferred stock, shares outstanding0 0 3,230,655
Warrant Liability [Member]
Fair value of warrants $ 2,500,000 $ 4,300,000
Gain/loss on extinguishment of warrant liability $ 519,467
6% Series F Convertible Preferred Stock [Member]
Preferred stock, stated value per share $ 2,750
Preferred stock initial conversion price, per share $ 27.50
6% Series F Convertible Preferred Stock [Member] | Accredited Investors [Member]
Sale of stock price, per share $ 2,750
Sales of stock amount $ 17,750,000
Preferred stock, stated value per share $ 0.001
Conversion of stock shares converted100
Warrant term2 years
Warrants to purchase shares of common stock322,727
Warrant exercise price per share $ 30
Series F Preferred Stock [Member]
Warrant term2 years
Warrant exercise price per share $ 30
Description on certificate of designationOn the two-year anniversary of the initial issuance date, any Series F Preferred Shares outstanding and not otherwise already converted, would, 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.
Fair value of warrants $ 4,300,000
Bifurcated embedded conversion feature9,300,000
Preferred stock dividends $ 13,600,000
Beneficially ownership percentage100.00%
Number of warrants exchanged to purchase common stock322,727 322,727
Preferred stock reduction in additional paid in capital $ 1,290,000
Convertible preferred stock, shares outstanding6,455
Series F Preferred Stock [Member] | Restricted Stock [Member]
Conversion of stock shares converted972,070
Conversion price, per share $ 18.26
Preferred stock dividend percentage6.00%
Conversion of preferred stock into common stock, number shares issued31,321
Number of warrants exchanged to purchase common stock151,871
Series B Preferred Shares [Member]
Conversion of stock shares converted15,756
Beneficially ownership percentage100.00%
Conversion of preferred stock into common stock, number shares issued7,945,250 262,606
Convertible preferred stock, shares outstanding47,689
Series A Preferred Shares [Member]
Beneficially ownership percentage100.00%
Conversion of preferred stock into common stock, number shares issued7,945,250
Convertible preferred stock, shares outstanding3,146,671
Series E Preferred Shares [Member]
Beneficially ownership percentage100.00%
Convertible preferred stock, shares outstanding7,050
Series E Preferred Shares [Member]
Conversion of stock shares converted7,050,000
Conversion of preferred stock into common stock, number shares issued7,945,250
Series E Preferred Shares [Member] | Lough Registration Rights Agreement [Member]
Conversion of preferred stock into common stock, number shares issued7,050,000

Preferred Shares and Common S_4

Preferred Shares and Common Shares - Schedule of Deemed Dividend on Preferred Shares Exchange (Details)2 Months Ended
Dec. 31, 2018USD ($)
Equity [Abstract]
Fair market value of 1,003,393 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 S_5

Preferred Shares and Common Shares - Schedule of Deemed Dividend on Preferred Shares Exchange (Details) (Parenthetical) - Series F Preferred Stock [Member]Mar. 05, 2018$ / sharesshares
Fair market value of common stock issued, shares | shares1,003,393
Common stock price per share | $ / shares $ 20.05

Preferred Shares and Common S_6

Preferred Shares and Common Shares - Schedule of Convertible Preferred Stock Activity (Details) - sharesDec. 31, 2018Oct. 31, 2018Oct. 31, 2017
Preferred stock, shares outstanding0 0 3,230,655
Common stock shares, issued21,447,088 21,423,999 6,515,524
Series A Preferred Shares [Member]
Preferred stock, shares outstanding3,146,671
Series A Convertible Preferred Stock [Member]
Preferred stock, shares outstanding3,146,671
Series A Convertible Preferred Stock [Member] | Series F Exchange [Member]
Preferred stock, conversions(3,146,671)
Series A Common Stock [Member]
Common stock shares, issued713,036
Series B Preferred Shares [Member]
Preferred stock, shares outstanding47,689
Series B Convertible Preferred Stock [Member]
Preferred stock, shares outstanding47,689
Series B Convertible Preferred Stock [Member] | Series F Exchange [Member]
Preferred stock, conversions(47,689)
Series B Common Stock [Member]
Common stock shares, issued794,820
Series C Preferred Shares [Member]
Preferred stock, shares outstanding2,578
Series C Convertible Preferred Stock [Member]
Preferred stock, shares outstanding2,578
Series C Convertible Preferred Stock [Member] | Series F Exchange [Member]
Preferred stock, conversions(2,578)
Series C Common Stock [Member]
Common stock shares, issued59,950
Series D Preferred Shares [Member]
Preferred stock, shares outstanding26,667
Series D Convertible Preferred Stock [Member]
Preferred stock, shares outstanding26,667
Series D Convertible Preferred Stock [Member] | Series F Exchange [Member]
Preferred stock, conversions(26,667)
Series D Common Stock [Member]
Common stock shares, issued44,445
Series E Preferred Shares [Member]
Preferred stock, shares outstanding7,050
Series E Convertible Preferred Stock [Member]
Preferred stock, shares outstanding7,050
Series E Convertible Preferred Stock [Member] | Series F Exchange [Member]
Preferred stock, conversions(7,050)
Series E Common Stock [Member]
Common stock shares, issued7,050,000
Series F Preferred Stock [Member]
Preferred stock, shares outstanding6,455
Series F Convertible Preferred Stock [Member]
Preferred stock, shares outstanding6,455
Series F Convertible Preferred Stock [Member] | Series F Exchange [Member]
Preferred stock, conversions(6,455)
Series F Common Stock [Member]
Common stock shares, issued972,070
Outstanding [Member]
Preferred stock, shares outstanding3,237,110
Preferred Stock [Member] | Series F Exchange [Member]
Preferred stock, conversions(3,237,110)
Common Stock [Member]
Common stock shares, issued9,634,321

Preferred Shares and Common S_7

Preferred Shares and Common Shares - Schedule of Convertible Preferred Stock Outstanding (Details) - USD ($) $ in ThousandsDec. 31, 2018Oct. 31, 2018Oct. 31, 2017
Preferred stock, shares authorized25,000,000 25,000,000 25,000,000
Preferred stock, shares issued and outstanding0 0 3,230,655
Preferred stock, net carrying value $ 109,995
Preferred stock, aggregate liquidation preference $ 0 $ 0 $ 2,140
Series A Convertible Preferred Stock [Member]
Preferred stock, shares authorized8,830,000
Preferred stock, shares issued and outstanding3,146,671
Preferred stock, net carrying value $ 769
Preferred stock, aggregate liquidation preference $ 2,140
Common Shares Issuable Upon Conversion713,245
Series B Convertible Preferred Stock [Member]
Preferred stock, shares authorized54,250
Preferred stock, shares issued and outstanding47,689
Preferred stock, net carrying value $ 4,020
Preferred stock, aggregate liquidation preference
Common Shares Issuable Upon Conversion794,806
Series C Convertible Preferred Stock [Member]
Preferred stock, shares authorized26,000
Preferred stock, shares issued and outstanding2,578
Preferred stock, net carrying value $ 201
Preferred stock, aggregate liquidation preference
Common Shares Issuable Upon Conversion59,953
Series D Convertible Preferred Stock [Member]
Preferred stock, shares authorized170,000
Preferred stock, shares issued and outstanding26,667
Preferred stock, net carrying value $ 312
Preferred stock, aggregate liquidation preference
Common Shares Issuable Upon Conversion44,445
Series E Convertible Preferred Stock [Member]
Preferred stock, shares authorized7,050
Preferred stock, shares issued and outstanding7,050
Preferred stock, net carrying value $ 104,693
Preferred stock, aggregate liquidation preference
Common Shares Issuable Upon Conversion7,050,000
Series F Convertible Preferred Stock [Member]
Preferred stock, shares authorized6,455
Preferred stock, shares issued and outstanding6,455
Preferred stock, net carrying value $ 4,541
Preferred stock, aggregate liquidation preference $ 17,750
Common Shares Issuable Upon Conversion645,455
Other Authorized, Unissued [Member]
Preferred stock, shares authorized15,906,245
Preferred stock, shares issued and outstanding
Preferred stock, net carrying value
Preferred stock, aggregate liquidation preference
Common Shares Issuable Upon Conversion
Convertible Preferred Stock [Member]
Preferred stock, shares authorized25,000,000
Preferred stock, shares issued and outstanding3,237,110
Preferred stock, net carrying value $ 114,536
Preferred stock, aggregate liquidation preference $ 19,890
Common Shares Issuable Upon Conversion9,307,904

Stock-Based Compensation (Detai

Stock-Based Compensation (Details Narrative) - USD ($) $ in ThousandsOct. 05, 2018Dec. 31, 2018Oct. 31, 2018Oct. 31, 2017Oct. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Fair value of stock options shares granted $ 8,908 $ 38,821 $ 17,745
Share-based compensation arrangement by share-based payment award, options, outstanding, intrinsic value $ 28,500
Weighted average remaining contractual term, outstanding8 years 8 months 12 days
Weighted average remaining contractual term, exercisable options8 years 2 months 12 days
Unrecognized compensation cost $ 21,000
Unrecognized compensation cost, period for recognition9 months 18 days
Employee Stock Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Fair value of stock options shares granted $ 4,000
Non-Employee Stock Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Fair value of stock options shares granted400
Restricted Stock and Restricted Stock Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost $ 10,000
Unrecognized compensation cost, period for recognition10 months 25 days
Fair value of restricted stock vested $ 2,100
Maximum [Member] | Restricted Stock and Restricted Stock Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options vesting term3 years
Maximum [Member] | Stock Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options vesting term3 years
Stock options expire term10 years
Minimum [Member] | Restricted Stock and Restricted Stock Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options vesting term6 months
Minimum [Member] | Stock Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options vesting term1 year
Stock options expire term5 years
2019 Equity Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock based compensation terminate dateOct. 5,
2028
Number of share available for future issuance2,546,584
2019 Equity Incentive Plan [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of common stock shares issued3,000,000
2017 Equity Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of common stock shares issued3,450,000
Stock based compensation terminate dateDec. 1,
2026
Number of share available for future issuance65,015
2017 Equity Incentive Plan [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of common stock shares issued7,300,000
2014 Equity Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of share available for future issuance1,927,453
2014 Equity Incentive Plan [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of common stock shares issued2,250,000

Stock-Based Compensation - Sche

Stock-Based Compensation - Schedule of Share-based Compensation Related to Restricted Stock Awards and Stock Options (Details) - USD ($) $ in Thousands2 Months Ended12 Months Ended
Dec. 31, 2018Oct. 31, 2018Oct. 31, 2017
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
General and administrative expense, continuing operations $ 7,505 $ 31,982 $ 14,869
General and administrative expense, discontinued operations 1,118
General and administrative expense, continuing operations and discontinued operations7,505 31,982 15,987
Research and development expense, continuing operations919 6,322 1,758
Sales and marketing expense, continuing operations522 517
Total stock-based compensation expense8,946 38,821 17,745
Stock-based compensation expense classified as a liability38
Stock-based compensation expense classified to equity $ 8,908 $ 38,321 $ 17,745

Stock-Based Compensation - Sc_2

Stock-Based Compensation - Schedule of Share-based Compensation, Stock Options, Activity (Details) - $ / shares2 Months Ended12 Months Ended
Dec. 31, 2018Oct. 31, 2018Oct. 31, 2017
Employee Stock Option [Member]
Number of Shares, Outstanding at beginning of period5,784,505 3,525,530 383,210
Number of Shares, Granted396,861 2,638,769 3,482,000
Number of Shares, Exercised (161,810)(268,847)
Number of Shares, Forfeited(938)(217,984)(70,833)
Number of Shares, Outstanding at end of period6,180,428 5,784,505 3,525,530
Number of Shares, Options exercisable3,899,806
Weighted Average Exercise Price, Outstanding at beginning of year $ 13.68 $ 6.34 $ 5.74
Weighted Average Exercise Price, Granted14.2723.556.29
Weighted Average Exercise Price, Exercised 4.314.84
Weighted Average Exercise Price, Forfeited24.2021.896.42
Weighted Average Exercise Price, Outstanding at end of year13.7213.68 $ 6.34
Weighted Average Exercise Price, Options exercisable9.23 $ 8.53
Weighted-average fair value of options granted during the period $ 9.95
Non-Employee Stock Option [Member]
Number of Shares, Outstanding at beginning of period296,000 293,000
Number of Shares, Granted23,791 3,000 293,000
Number of Shares, Forfeited(334)
Number of Shares, Outstanding at end of period319,457 296,000 293,000
Number of Shares, Options exercisable199,207
Weighted Average Exercise Price, Outstanding at beginning of year $ 19.60 $ 19.61
Weighted Average Exercise Price, Granted21.4218.6319.61
Weighted Average Exercise Price, Forfeited6.33
Weighted Average Exercise Price, Outstanding at end of year19.75 $ 19.60 $ 19.61
Weighted Average Exercise Price, Options exercisable $ 17.90

Stock-Based Compensation - Sc_3

Stock-Based Compensation - Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions (Details)2 Months Ended12 Months Ended
Dec. 31, 2018Oct. 31, 2018Oct. 31, 2017
Risk free annual interest rate, minimum2.60%2.00%1.60%
Risk free annual interest rate, maximum3.20%3.20%2.30%
Expected volatility, minimum80.60%80.90%71.70%
Expected volatility, maximum94.40%96.50%86.50%
Assumed dividends0.00%0.00%0.00%
Minimum [Member]
Expected term of options (years)5 years5 years5 years
Maximum [Member]
Expected term of options (years)6 years 6 months6 years6 years

Stock-Based Compensation - Sc_4

Stock-Based Compensation - Schedule of Share-based Compensation, Restricted Stock Activity (Details) - Restricted Stock and Restricted Stock Units [Member] - $ / shares2 Months Ended12 Months Ended
Dec. 31, 2018Oct. 31, 2018Oct. 31, 2017
Number of Shares, Unvested at beginning of period673,960 227,132 274,829
Number of Shares, Granted63,192 712,034 1,057,500
Number of Shares, Vested(86,042)[1](242,819)(1,105,197)
Number of Shares, Forfeited (22,387)
Number of Shares, Unvested at end of period651,110 673,960 227,132
Weighted-Average Grant-Date Fair Value Unvested at beginning of period $ 24.52 $ 7.83 $ 6
Weighted-Average Grant-Date Fair Value, Granted14.1725.274.80
Weighted-Average Grant-Date Fair Value, Vested24.17[1]11.744.47
Weighted-Average Grant-Date Fair Value, Forfeited 20.62
Weighted-Average Grant-Date Fair Value, Unvested at end of period $ 23.65 $ 24.52 $ 7.83
[1]The number of vested restricted stock units includes shares that were withheld on behalf of employees to satisfy the minimum statutory tax withholding requirements.

Employee Benefit Plan (Details

Employee Benefit Plan (Details Narrative) - USD ($) $ in Thousands2 Months Ended12 Months Ended
Dec. 31, 2018Oct. 31, 2018Oct. 31, 2017
Retirement Benefits [Abstract]
Pre-tax earnings of contribution $ 18,500
Percentage of contribution3.00%
Contribution expense $ 35,000 $ 120,000 $ 55,000

Income Taxes (Details Narrative

Income Taxes (Details Narrative) - USD ($) $ in ThousandsDec. 22, 2017Dec. 31, 2018Oct. 31, 2018Oct. 31, 2017
Operating Loss Carryforwards [Line Items]
Corporate statutory tax rate21.00%34.00%34.00%
Deferred tax rate0.00%0.00%0.00%
Reduction in deferred tax asset and valuation allowance $ (3,991) $ (12,036) $ (2,983)
Operating loss carry-forward descriptionThe change in tax law, all losses post 2018 will have an unlimited carryforward period (but can only utilize 80% max per year). All prior net operating losses still have the same carryforward limit of 20 years.
Unrecognized tax benefits, which would impact its tax rate
Payment for penalties accrual
Tax Cuts and Jobs Act [Member]
Operating Loss Carryforwards [Line Items]
Income tax rate reconciliation descriptionThe most significant provision reduces the U.S. corporate statutory tax rate from 35% to 21% beginning on January 1, 2018.
Corporate statutory tax rate21.00%
US Deferred Tax [Member]
Operating Loss Carryforwards [Line Items]
Deferred tax rate21.00%
Reduction in deferred tax asset and valuation allowance $ 2,600
Federal [Member]
Operating Loss Carryforwards [Line Items]
Net operating loss carryforwards $ 473,000
Operating loss carryforwards, descriptionexpires between 2038 and 2039
State [Member]
Operating Loss Carryforwards [Line Items]
Net operating loss carryforwards $ 25,500
Operating loss carryforwards, descriptionexpires between 2032 and 2033

Income Taxes - Schedule of Loss

Income Taxes - Schedule of Loss Before Income Taxes (Details) - USD ($) $ in Thousands2 Months Ended12 Months Ended
Dec. 31, 2018Oct. 31, 2018Oct. 31, 2017
Income Tax Disclosure [Abstract]
Net loss from continuing operations before income taxes $ (18,418) $ (65,743) $ (130,480)

Income Taxes - Schedule of Comp

Income Taxes - Schedule of Components of Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands2 Months Ended12 Months Ended
Dec. 31, 2018Oct. 31, 2018Oct. 31, 2017
Income Tax Disclosure [Abstract]
Current: Federal $ (302)
Current: State3
Deferred: Federal(3,734)(11,561)(2,679)
Deferred: State(257)(475)(304)
Change in: valuation allowance3,991 12,036 2,983
Total provision (benefit) for income taxes $ (302)

Income Taxes - Schedule of Stat

Income Taxes - Schedule of Statutory Federal Rate and Provision for Income Tax (Details) - USD ($) $ in Thousands2 Months Ended12 Months Ended
Dec. 31, 2018Oct. 31, 2018Oct. 31, 2017
Income Tax Disclosure [Abstract]
Tax (benefit) at federal statutory rate, amount $ (3,867) $ (22,325) $ (44,283)
State income taxes, net of federal income taxes, amount(254)(475)(304)
Effect of warrant liability, amount (1,120)(74)
Effect of other permanent items, amount5 30 (82)
Effect of Acquisition of intangible assets, amount 35,595
Effect of stock compensation, amount27 3,147
Change in valuation allowance, amount3,991 12,036 2,983
Reduction of NOL's due to Section 382 Limitations, amount 11,552 3,018
Other, amount98
Income taxes, amount $ (302)
Tax (benefit) at federal statutory rate, percent of pre tax income21.00%34.00%34.00%
State income taxes, net of federal income taxes, percent of pre tax income1.00%(1.00%)0.00%
Effect of warrant liability, percent of pre tax income0.00%2.00%0.00%
Effect of other permanent items, percent of pre tax income0.00%0.00%0.00%
Effect of Acquisition of intangible assets, percent of pre tax income0.00%0.00%(27.00%)
Effect of stock compensation, percent of pre tax income0.00%0.00%(3.00%)
Change in valuation allowance, percent of pre tax income(22.00%)(18.00%)(2.00%)
Reduction of NOL's due to Section 382 Limitations, percent of pre tax income0.00%(17.00%)(2.00%)
Other, percent of pre tax income0.00%0.00%0.00%
Income taxes, percent of pre tax income0.00%0.00%0.00%

Income Taxes - Schedule of Defe

Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in ThousandsDec. 31, 2018Oct. 31, 2018Oct. 31, 2017
Income Tax Disclosure [Abstract]
Impairment of development costs $ 7
Depreciation and amortization(533)(546)95
Compensation expense not deductible until options are exercised12,543 10,529 4,553
All other temporary differences236 382 248
Net operating loss carry forward10,526 8,455 3,158
Less valuation allowance(22,772)(18,827)(8,054)
Deferred tax asset (liability)

Loss Per Share - Schedule of An

Loss Per Share - Schedule of Anti-dilutive Potential Shares Outstanding Activity (Details) - shares2 Months Ended12 Months Ended
Dec. 31, 2018Oct. 31, 2018Oct. 31, 2017
Shares Issuable Upon Conversion of Preferred Stock [Member]
Antidilutive shares 9,307,904
Shares Issuable Upon Exercise of Warrants [Member]
Antidilutive shares 322,727
Shares Issuable Upon Exercise of Stock Options [Member]
Antidilutive shares6,499,885 6,080,505 3,818,530
Non-vested Shares Under Restricted Stock Grants [Member]
Antidilutive shares651,110 673,960 227,132

Commitments and Contingencies_2

Commitments and Contingencies (Details Narrative) - USD ($) $ in ThousandsFeb. 26, 2015Dec. 31, 2018Oct. 31, 2018Oct. 31, 2017
Commitments and Contingencies Disclosure [Abstract]
Litigation damages sought $ 1,300
Operating lease expiration dateNov. 30,
2022
Lease payments $ 535
Rent expense $ 357 $ 1,400 $ 222

Commitments and Contingencies -

Commitments and Contingencies - Schedule of Future Minimum Lease Payments for Operating and Capital Lease (Details) $ in ThousandsDec. 31, 2018USD ($)
Commitments and Contingencies Disclosure [Abstract]
Operating leases, Year ended December 31, 2019 $ 1,895
Operating leases, Year ended December 31, 20201,819
Operating leases, Year ended December 31, 20211,455
Operating leases, Year ended December 31, 20221,216
Operating leases, total6,385
Capital leases, Year ended December 31, 201966
Capital leases, Year ended December 31, 202058
Capital leases, Year ended December 31, 202155
Capital leases, Year ended December 31, 202228
Capital leases, total $ 207

Certain Relationships and Rel_2

Certain Relationships and Related Transactions (Details Narrative)1 Months Ended2 Months Ended12 Months Ended
Oct. 31, 2018USD ($)aAug. 31, 2018USD ($)Dec. 31, 2018USD ($)aOct. 31, 2018USD ($)aOct. 31, 2017USD ($)
Lease rental square feet | a3,275
Annual lease rate $ 357,000 $ 1,400,000 $ 222,000
Monthly lease payment16,377
Annual lease payment to lessor361,680
Sublease income21,000
Due from related party
Cohen LLC [Member]
Lease rental square feet | a1,220
Operating leases, descriptionUnder the terms of the sublease Cohen LLC can add this additional space to the 1,220 square feet occupied, which would bring the total space occupied by us and Cohen LLC to 6,028 square feet. Because a portion of the additional space subleased to Cohen LLC is less private and attractive, the Company agreed to reduce the overall annual lease rate for the Cohen LLC space to $58.60 per square foot, which means the Company will be paying an annual lease rate for the space the Company uses of $62.70.
Pro rata basis of rent amount $ 6,103
Additional square feet of office space | a2,753
Annual lease payment to lessor $ 232,830
Three Offices and Two Work Stations [Member]
Lease rental square feet | a2,055
David Seaburg [Member]
Compensation arrangement with DirectorMr. Seaburg pursuant to which he will provide investor relations and other services to the Company over a period of two years for a fee consisting of (i) quarter-annual cash payment of $10,000, (ii) 60,000 restricted stock units issued under the Company equity incentive plan that vest in four equal installments every six months during the term of the agreement subject to continued service, and (iii) an annual award under the Company equity incentive plan of options exercisable over a term of 10 years to purchase common stock in number equal to the number of shares of common stock with a value of $150,000 at the time of the award based on a Black-Scholes calculation. As of the year ended October 31, 2018, the Company has made no payments to Mr. Seaburg for consulting services.
Compensation expense $ 1,700,000 $ 233,000 $ 324,000
Office Lease [Member]
Lease rental square feet | a7,250 7,250
Lease term3 years3 years
Annual lease rate $ 60,000
Operating leases, descriptionInitially the Company will occupy and pay for only 3,275 square feet of space, and the Company is not obligated under the lease to pay for the remaining 3,975 square feet covered by the lease unless we elect to occupy that additional space. Comparable annual lease rates for similar office space in the area range between $67 and $110 per square foot.
Office Lease [Member] | Minimum [Member]
Annual lease rate $ 67,000
Office Lease [Member] | Maximum [Member]
Annual lease rate $ 110,000

Discontinued Operations - Sched

Discontinued Operations - Schedule of Assets and Liabilities of Discontinued Operations (Details) - USD ($) $ in Thousands2 Months Ended12 Months Ended
Dec. 31, 2018Oct. 31, 2018Oct. 31, 2017
Loss from discontinued operations $ (349)
Gain on sale of discontinued operations 100
Net cash provided by discontinued operating activities 33
Net cash provided by discontinued investing activities10 60 25
Majesco Entertainment Company [Member]
Revenues 558
Expenses 1,007
Loss from discontinued operations (449)
Gain on sale of discontinued operations 100
Net loss from discontinued operations (349)
Depreciation and amortization 11
Stock based compensation expense 1,118
Amortization of capitalized software development costs and license fees 50
Gain on sale of Majesco Sub (100)
Accounts receivable 113
Accounts payable and accrued expenses (810)
Net cash provided by discontinued operating activities 33
Cash received from sale of Majesco Sub10 60 25
Net cash provided by discontinued investing activities $ 10 $ 60 $ 25

Segment Reporting (Details Narr

Segment Reporting (Details Narrative) - Segment2 Months Ended12 Months Ended
Dec. 31, 2018Oct. 31, 2018
Segment Reporting [Abstract]
Number of operating segment2 2

Segment Reporting - Schedule of

Segment Reporting - Schedule of Segment Information (Details) - USD ($) $ in Thousands2 Months Ended12 Months Ended
Dec. 31, 2018Dec. 31, 2017Oct. 31, 2018Oct. 31, 2017
Total net revenues $ 673 $ 13 $ 1,563
Total net loss(18,418) $ (10,915)(65,441)(130,829)
Total assets80,166 87,842 20,152
Regenerative Medicine [Member]
Total net revenues210 689
Total net loss(18,352)(65,219)(130,480)
Total assets74,795 82,512 20,152
Contract Services [Member]
Total net revenues463 874
Total net loss(66)(222)
Total assets5,371 5,330
Discontinued Operations [Member]
Total net loss (349)
Total assets

Transition Period Comparative_3

Transition Period Comparative Financials (Unaudited) - Schedule of Transition Period Comparative Financials (Details) - USD ($) $ / shares in Units, $ in Thousands2 Months Ended12 Months Ended
Dec. 31, 2018Dec. 31, 2017Oct. 31, 2018Oct. 31, 2017
Transition Period Comparative Financials
Net revenues $ 673 $ 13 $ 1,563
Cost of sales381 1 1,002
Gross profit292 12 561
Product research and development3,458 4,930 19,376 7,107
General and administrative12,639 7,979 48,252 18,812
Total operating costs and expenses18,822 12,909 69,993 130,612
Operating loss(18,530)(12,897)(69,432)(130,612)
Interest income80 18 395 23
Change in fair value of derivatives 1,964 3,814 109
Net loss(18,418)(10,915)(65,441)(130,829)
Deemed dividend - accretion of discount on Series F preferred stock (593)(1,290)(369)
Deemed dividend - exchange of Series F preferred stock (182)(7,057)
Net loss attributable to common stockholders $ (18,418) $ (11,690) $ (74,161) $ (131,322)
Net loss $ (0.86) $ (1.68) $ (4.29) $ (26.57)
Deemed dividend - accretion of discount on Series F preferred stock (0.09)(0.09)(0.07)
Deemed dividend - exchange of Series F preferred stock (0.03)(0.46)
Net loss attributable to common stockholders $ (0.86) $ (1.80) $ (4.86) $ (26.67)
Weighted average shares outstanding, basic and diluted:21,343,446 6,496,841 15,259,731 4,923,327