Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | |
Apr. 30, 2014 | Jul. 24, 2014 | |
Document And Entity Information | ' | ' |
Entity Registrant Name | 'OXYGEN BIOTHERAPEUTICS, INC. | ' |
Entity Central Index Key | '0000034956 | ' |
Document Type | '10-K | ' |
Document Period End Date | 30-Apr-14 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--04-30 | ' |
Is Entity a Well-known Seasoned Issuer? | 'No | ' |
Is Entity a Voluntary Filer? | 'No | ' |
Is Entity's Reporting Status Current? | 'Yes | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Public Float | $19,682,675 | ' |
Entity Common Stock, Shares Outstanding | ' | 28,107,206 |
Document Fiscal Period Focus | 'FY | ' |
Document Fiscal Year Focus | '2014 | ' |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Apr. 30, 2014 | Apr. 30, 2013 |
ASSETS | ' | ' |
Cash and cash equivalents | $58,320,555 | $783,528 |
Accounts receivable | 36,358 | 445,237 |
Government grant receivable | 29,750 | 96,226 |
Inventory | 0 | 99,204 |
Prepaid expenses | 401,964 | 247,646 |
Other current assets | 177,406 | 170,410 |
Total current assets | 58,966,033 | 1,842,251 |
Property and equipment, net | 124,374 | 205,389 |
Debt issuance costs, net | 21,427 | 150,043 |
Intangible assets, net | 22,999,744 | 924,698 |
Goodwill | 11,265,100 | ' |
Other assets | 52,762 | 58,262 |
Total assets | 93,429,440 | 3,180,643 |
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | ' | ' |
Accounts payable | 411,145 | 977,162 |
Accrued liabilities | 858,136 | 874,876 |
Warrant liabilities | 954,876 | 0 |
Current portion of notes payable, net | 346,890 | 57,539 |
Total current liabilities | 2,571,047 | 1,909,577 |
Other liabilities | 10,932 | 54,660 |
Deferred tax liability | 7,962,100 | 0 |
Long-term portion of notes payable, net | 0 | 2,994,442 |
Total liabilities | 10,544,079 | 4,958,679 |
Commitments and contingencies; see Note I | ' | ' |
Stockholders' equity (deficit) | ' | ' |
Series B Preferred stock, par value $.0001, issued 2,100 shares; outstanding 0 and 987, respectively. | 0 | 1 |
Common stock, par value $.0001 per share; authorized 400,000,000 shares; issued and outstanding 27,858,000 and 1,930,078, respectively | 2,786 | 193 |
Additional paid-in capital | 219,468,498 | 115,265,854 |
Deficit accumulated during the development stage | -136,585,923 | -117,044,084 |
Total stockholders' equity (deficit) | 82,885,361 | -1,778,036 |
Total liabilities and stockholders' equity (deficit) | $93,429,440 | $3,180,643 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Apr. 30, 2014 | Apr. 30, 2013 |
Stockholders' equity | ' | ' |
Preferred stock shares authorized | 9,947,439 | 9,990,400 |
Series B Preferred stock, par value | $0.00 | $0.00 |
Series B Preferred stock, issued | 2,100 | 2,100 |
Series B Preferred stock, outstanding | 0 | 987 |
Common stock, par value | $0.00 | $0.00 |
Common stock, authorized | 400,000,000 | 400,000,000 |
Common stock, issued | 27,858,000 | 1,930,078 |
Common stock, outstanding | 27,858,000 | 1,930,078 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 12 Months Ended | |
Apr. 30, 2014 | Apr. 30, 2013 | |
Consolidated Statements Of Operations | ' | ' |
Product Revenue | $25,731 | $92,683 |
Cost of sales | 129,800 | 43,111 |
Net product revenue | -104,069 | 49,572 |
Government grant revenue | 262,995 | 1,141,356 |
Total net revenue | 158,926 | 1,190,928 |
Operating expenses | ' | ' |
Selling, general, and administrative | 13,773,325 | 3,676,145 |
Research and development | 2,996,721 | 2,455,816 |
Restructuring expense | ' | 220,715 |
Loss on impairment of long-lived assets | ' | 27,279 |
Total operating expenses | 16,770,046 | 6,379,955 |
Net operating loss | 16,611,120 | 5,189,027 |
Interest expense | 2,212,283 | 4,238,456 |
Other expense (income) | 718,436 | -11,683 |
Net loss | 19,541,839 | 9,415,800 |
Preferred stock dividend | 5,803,362 | 958,071 |
Net loss attributable to common stockholders | $25,345,201 | $10,373,871 |
Net loss per share, basic | ($2.71) | ($6.29) |
Weighted average number of common shares outstanding, basic | 9,362,031 | 1,650,280 |
Net loss per share, diluted | ($2.71) | ($6.68) |
Weighted average number of common shares outstanding, diluted | 9,362,031 | 1,759,025 |
Consolidated_Statements_of_Sto
Consolidated Statements of Stockholders' Equity (Deficit) (USD $) | Preferred Stock | Common Stock | Additional Paid-In Capital | Defecit accumulated during the development stage | Total |
Beginning Balance, Amount at Apr. 30, 2012 | ' | $2,942 | $107,279,296 | ($107,628,284) | ($346,046) |
Beginning Balance, Shares at Apr. 30, 2012 | ' | 1,470,890 | ' | ' | ' |
Preferred stock sold, net of offering costs, Shares | 2,100 | ' | ' | ' | ' |
Preferred stock sold, net of offering costs, Amount | 1 | ' | 1,851,149 | ' | 1,851,150 |
Common stock issued for convertible preferred stock, Shares | -1,113 | 400,708 | ' | ' | ' |
Common stock issued for convertible preferred stock, Amount | ' | 804 | 4,509,184 | ' | 4,509,988 |
Common stock issued as interest on convertible debt, Share | ' | 16,524 | ' | ' | ' |
Common stock issued as interest on convertible debt, Amount | ' | 33 | 745,175 | ' | 745,208 |
Common stock issued as dividend on convertible preferred stock, Shares | ' | 17,409 | ' | ' | ' |
Common stock issued as dividend on convertible preferred stock, Amount | ' | 32 | 331,366 | ' | 331,398 |
Compensation on options and restricted stocks issued, Share | ' | 4,465 | ' | ' | ' |
Compensation on options and restricted stocks issued, Amount | ' | 9 | 269,522 | ' | 269,531 |
Reclassification of warrants from equity to derivative liability | ' | ' | 656,535 | ' | 656,535 |
Exercise of warrants, Shares | ' | 20,000 | ' | ' | ' |
Exercise of warrants, Amount | ' | 40 | -380,040 | ' | -380,000 |
Fractional shares of common stock due to reverse stock split, Shares | ' | 82 | ' | ' | ' |
Fractional shares of common stock due to reverse stock split, Amount | ' | -3,667 | 3,667 | ' | ' |
Net income (loss) | ' | ' | ' | -9,415,800 | -9,415,800 |
Ending Balance, Amount at Apr. 30, 2013 | 1 | 193 | 115,265,854 | -117,044,084 | -1,778,036 |
Ending Balance, Shares at Apr. 30, 2013 | 987 | 1,930,078 | ' | ' | ' |
Preferred stock sold, net of offering costs, Shares | 5,369 | ' | ' | ' | ' |
Preferred stock sold, net of offering costs, Amount | 1 | ' | 4,895,187 | ' | 4,895,188 |
Preferred stock issued for convertible debt, Shares | 4,600 | ' | ' | ' | ' |
Preferred stock issued for convertible debt, Amount | 3 | ' | 4,599,997 | ' | 4,600,000 |
Common and preferred stock issued for asset purchase, Shares | 32,992 | 1,366,844 | ' | ' | ' |
Common and preferred stock issued for asset purchase, Amount | 3 | 137 | 24,046,860 | ' | 24,047,000 |
Common stock sold, net of offering costs, Shares | ' | 10,678,571 | ' | ' | ' |
Common stock sold, net of offering costs, Amount | ' | 1,068 | 54,907,282 | ' | 54,908,350 |
Common stock issued for convertible preferred stock, Shares | -43,948 | 9,056,415 | ' | ' | ' |
Common stock issued for convertible preferred stock, Amount | -8 | 906 | -898 | ' | ' |
Common stock issued as interest on convertible debt, Share | ' | 4,881 | ' | ' | ' |
Common stock issued as interest on convertible debt, Amount | ' | 1 | 220,040 | ' | 220,041 |
Common stock issued as dividend on convertible preferred stock, Shares | ' | 1,407,485 | ' | ' | ' |
Common stock issued as dividend on convertible preferred stock, Amount | ' | 140 | -140 | ' | ' |
Compensation on options and restricted stocks issued, Share | ' | 50,144 | ' | ' | ' |
Compensation on options and restricted stocks issued, Amount | ' | 5 | 8,131,619 | ' | 8,131,624 |
Reclassification of warrants from equity to derivative liability | ' | ' | -233,036 | ' | -233,036 |
Common stock issued for services rendered, Shares | ' | 198,668 | ' | ' | ' |
Common stock issued for services rendered, Amount | ' | 20 | 499,980 | ' | 500,000 |
Exercise of warrants, Shares | ' | 3,161,145 | ' | ' | ' |
Exercise of warrants, Amount | ' | 316 | 7,135,753 | ' | 7,136,069 |
Fractional shares of common stock due to reverse stock split, Shares | ' | 3,769 | ' | ' | ' |
Net income (loss) | ' | ' | ' | -19,541,839 | -19,541,839 |
Ending Balance, Amount at Apr. 30, 2014 | ' | $2,786 | $219,468,498 | ($136,585,923) | $82,885,361 |
Ending Balance, Shares at Apr. 30, 2014 | ' | 27,858,000 | ' | ' | ' |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | |
Apr. 30, 2014 | Apr. 30, 2013 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ' | ' |
Net Loss | ($19,541,839) | ($9,415,800) |
Adjustments to reconcile net loss to net cash used in operating activities | ' | ' |
Depreciation and amortization | 150,489 | 148,804 |
Interest on debt instruments | 2,181,955 | 4,236,332 |
Loss on impairment, disposal and write down of long-lived assets | 2,519 | 35,673 |
Issuance and vesting of compensatory stock options and warrants | 8,042,662 | 84,267 |
Issuance of common stock as compensation | 651,460 | 185,264 |
Change in the fair value of warrants | 721,840 | ' |
Changes in operating assets and liabilities | ' | ' |
Accounts receivable, prepaid expenses and other assets | 519,255 | -245,747 |
Inventory | 99,204 | -20,228 |
Accounts payable and accrued liabilities | -2,089,116 | 70,152 |
Net cash used in operating activities | -9,261,571 | -4,921,283 |
CASH FLOWS FROM INVESTING ACTIVITIES | ' | ' |
Purchase of property and equipment | -9,804 | -17,199 |
Proceeds from the sale of property and equipment | ' | 4,064 |
Capitalization of patent costs and license rights | -137,234 | -134,852 |
Net cash used in investing activities | -147,038 | -147,987 |
CASH FLOWS FROM FINANCING ACTIVITIES | ' | ' |
Proceeds from sale of common stock and exercise of stock options and warrants, net of related expenses and payments | 62,044,419 | ' |
Repurchase of outstanding warrants | ' | -380,000 |
Proceeds from issuance of notes payable, net of issuance costs | 141,320 | 102,671 |
Proceeds for issuance of convertible preferred stock, net of issuance costs | 4,895,188 | 4,351,150 |
Payments on notes - short-term | -135,291 | -100,895 |
Net cash provided by financing activities | 66,945,636 | 3,972,926 |
Net change in cash and cash equivalents | 57,537,027 | -1,096,344 |
Cash and cash equivalents, beginning of period | 783,528 | 1,879,872 |
Cash and cash equivalents, end of period | 58,320,555 | 783,528 |
Cash paid for: | ' | ' |
Interest | 30,328 | 2,123 |
Income taxes | ' | ' |
Non-cash financing activities: | ' | ' |
Restricted stock issued during period in payment of interest on convertible notes | 220,041 | 745,208 |
Common stock issued for payment of dividends on Series C Convertible Preferred stock | 1,300,204 | ' |
Series D Convertible Preferred Stock issued as consideration for cancellation of $4.6 million in outstanding principal amount of a convertible promissory note issued by the Company on July 1, 2011 | 4,600,000 | ' |
Common stock issued as payment for dividends on the Series D Convertible Preferred stock | $1,104,000 | ' |
1_DESCRIPTION_OF_BUSINESS
1. DESCRIPTION OF BUSINESS | 12 Months Ended |
Apr. 30, 2014 | |
Accounting Policies [Abstract] | ' |
1. DESCRIPTION OF BUSINESS | ' |
Description of Business—Oxygen Biotherapeutics (the “Company”) was originally formed as a New Jersey corporation in 1967 under the name Rudmer, David & Associates, Inc., and subsequently changed its name to Synthetic Blood International, Inc. On June 17, 2008, the stockholders of Synthetic Blood International approved the Agreement and Plan of Merger dated April 28, 2008, between Synthetic Blood International and Oxygen Biotherapeutics, Inc., a Delaware corporation. Oxygen Biotherapeutics was formed on April 17, 2008, by Synthetic Blood International to participate in the merger for the purpose of changing the state of domicile of Synthetic Blood International from New Jersey to Delaware. Certificates of Merger were filed with the states of New Jersey and Delaware, and the merger was effective June 30, 2008. Under the Plan of Merger, Oxygen Biotherapeutics is the surviving corporation and each share of Synthetic Blood International common stock outstanding on June 30, 2008 was converted to one share of Oxygen Biotherapeutics common stock. | |
On October 18, 2013, the Company created a wholly owned subsidiary, Life Newco, Inc., a Delaware corporation (“Life Newco”), to acquire certain assets of Phyxius Pharma, Inc., a Delaware corporation (“Phyxius”) pursuant to an Asset Purchase Agreement, dated October 21, 2013 (the “Asset Purchase Agreement”), by and among the Company, Life Newco, Phyxius and the stockholders of Phyxius (the “Phyxius Stockholders”). As further discussed in Note D below, on November 13, 2013, under the terms and subject to the conditions of the Asset Purchase Agreement, Life Newco acquired certain assets, including a license granting Life Newco an exclusive, sublicenseable right to develop and commercialize pharmaceutical products containing Levosimedan, 2.5 mg/ml concentrate for solution for infusion / 5ml vial in the United States and Canada. | |
Reverse Stock Split | |
The Company initiated a 1-for-20 reverse stock split effective May 10, 2013. All shares and per share amounts in these Consolidated Financial Statements and notes thereto have been retroactively adjusted to give effect to the reverse stock split. | |
2_SUMMARY_OF_SIGNIFICANT_ACCOU
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended | ||||||||||||||||
Apr. 30, 2014 | |||||||||||||||||
Accounting Policies [Abstract] | ' | ||||||||||||||||
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | ||||||||||||||||
Use of Estimates | |||||||||||||||||
The preparation of the accompanying consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of expenses during the reporting period. Actual results could differ from those estimates. | |||||||||||||||||
On an ongoing basis, management reviews its estimates to ensure that these estimates appropriately reflect changes in the Company’s business and new information as it becomes available. If historical experience and other factors used by management to make these estimates do not reasonably reflect future activity, the Company’s results of operations and financial position could be materially impacted. | |||||||||||||||||
Principles of Consolidation | |||||||||||||||||
The accompanying consolidated financial statements include the accounts and transactions of Oxygen Biotherapeutics, Inc. and Life Newco, Inc. All material intercompany transactions and balances have been eliminated in consolidation. | |||||||||||||||||
Goodwill | |||||||||||||||||
Acquired businesses are accounted for using the acquisition method of accounting, which requires that assets acquired, including identifiable intangible assets, and liabilities assumed be recorded at fair value, with limited exceptions. Any excess of the purchase price over the fair value of the net assets acquired is recorded as goodwill. If the acquired net assets do not constitute a business, the transaction is accounted for as an asset acquisition and no goodwill is recognized. | |||||||||||||||||
Goodwill is reviewed for impairment on an annual basis or more frequently if events or circumstances indicate potential impairment. The Company’s goodwill evaluation is based on both qualitative and quantitative assessments regarding the fair value of goodwill relative to its carrying value. The Company assesses qualitative factors to determine if its sole reporting unit’s fair value is more likely than not to exceed its carrying value, including goodwill. In the event the Company determines that it is more likely than not that its reporting unit’s fair value is less than its carrying amount, quantitative testing is performed comparing recorded values to estimated fair values. If the fair value exceeds the carrying value, goodwill is not impaired. If the carrying value exceeds the fair value, an impairment charge is recognized through a charge to operations based upon the excess of the carrying value of goodwill over the implied fair value. There was no impairment to goodwill recognized during 2014. | |||||||||||||||||
Cash and Cash Equivalents | |||||||||||||||||
The Company considers all highly liquid instruments with a maturity date of three months or less, when acquired, to be cash equivalents. | |||||||||||||||||
Cash Concentration Risk | |||||||||||||||||
On July 21, 2010, the Wall Street Reform and Consumer Protection Act permanently increased the FDIC insurance limits to $250,000 per depositor per insured bank. At April 30, 2014, the Company had $58,038,597 of cash balances uninsured by the FDIC. | |||||||||||||||||
Liquidity and Capital Resources | |||||||||||||||||
We have financed our operations since September 1990 through the issuance of debt and equity securities and loans from stockholders. We had $58,966,033 and $1,842,251 total current assets and working capital (deficit) of $56,394,986 and $(67,326) as of April 30, 2014 and April 30, 2013, respectively. Our practice is to invest excess cash, where available, in short-term money market investment instruments. | |||||||||||||||||
Cash resources as of April 30, 2014 were approximately $58.3 million, compared to approximately $784,000 as of April 30, 2013. Based on its resources at April 30, 2014, and the current plan of expenditure on continuing development of the Company’s current product candidates, the Company believes that it has sufficient capital to fund its operations through the fiscal year ending April 30, 2017. However, the Company will need substantial additional financing in order to fund its operations beyond such period and thereafter until it can achieve profitability, if ever. The Company depends on its ability to raise additional funds through various potential sources, such as equity and debt financing, or to license its product candidates to another pharmaceutical company. The Company will continue to fund operations from cash on hand and through sources of capital similar to those previously described. The Company cannot assure that it will be able to secure such additional financing, or if available, that it will be sufficient to meet its needs. | |||||||||||||||||
To the extent that the Company raises additional funds by issuing shares of its common stock or other securities convertible or exchangeable for shares of common stock, stockholders will experience dilution, which may be significant. In the event the Company raises additional capital through debt financings, the Company may incur significant interest expense and become subject to covenants in the related transaction documentation that may affect the manner in which the Company conducts its business. To the extent that the Company raises additional funds through collaboration and licensing arrangements, it may be necessary to relinquish some rights to its technologies or product candidates, or grant licenses on terms that may not be favorable to the Company. Any or all of the foregoing may have a material adverse effect on the Company’s business and financial performance. | |||||||||||||||||
Deferred financing costs | |||||||||||||||||
Deferred financing costs represent legal, due diligence and other direct costs incurred to raise capital or obtain debt. Direct costs include only “out-of-pocket” or incremental costs directly related to the effort, such as a finder’s fee and accounting and legal fees. These costs will be capitalized if the efforts are successful, or expensed when unsuccessful. Indirect costs are expensed as incurred. Deferred financing costs related to debt are amortized over the life of the debt. Deferred financing costs related to issuing equity are charged to Additional Paid-in Capital. | |||||||||||||||||
Derivative financial instruments | |||||||||||||||||
The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risk. Terms of convertible promissory note instruments and other convertible equity instruments are reviewed to determine whether or not they contain embedded derivative instruments that are required under FASB ASC 815, Derivatives and Hedging (“ASC 815”) to be accounted for separately from the host contract, and recorded on the balance sheet at fair value. The fair value of derivative liabilities, if any, is required to be revalued at each reporting date, with corresponding changes in fair value recorded in current period operating results. | |||||||||||||||||
Freestanding warrants issued by the Company in connection with the issuance or sale of debt and equity instruments are considered to be derivative instruments, and are evaluated and accounted for in accordance with the provisions of ASC 815. Pursuant to ASC 815, an evaluation of specifically identified conditions is made to determine whether the fair value of warrants issued is required to be classified as equity or as a derivative liability. | |||||||||||||||||
Beneficial conversion and warrant valuation | |||||||||||||||||
In accordance with FASB ASC 470-20, Debt with Conversion and Other Options, the Company records a beneficial conversion feature (“BCF”) related to the issuance of convertible debt that have conversion features at fixed rates that are in-the-money when issued and the fair value of warrants issued in connection with those instruments. The BCF for the convertible instruments is recognized and measured by allocating a portion of the proceeds to warrants, based on their relative fair value, and as a reduction to the carrying amount of the convertible debt equal to the intrinsic value of the conversion feature. As described in Note F, the discount recorded in connection with the BCF and warrant valuation is recognized as non-cash interest expense and is amortized over the life of the convertible note. | |||||||||||||||||
Preclinical Study and Clinical Accruals | |||||||||||||||||
The Company estimates its preclinical study and clinical trial expenses based on the services received pursuant to contracts with several research institutions and contract research organizations (“CROs”) that conduct and manage preclinical and clinical trials on its behalf. The financial terms of the agreements vary from contract to contract and may result in uneven expenses and payment flows. Preclinical study and clinical trial expenses include the following: | |||||||||||||||||
- | Fees paid to CROs in connection with clinical trials, | ||||||||||||||||
- | Fees paid to research institutions in conjunction with preclinical research studies, and | ||||||||||||||||
- | Fees paid to contract manufacturers and service providers in connection with the production and testing of active pharmaceutical ingredients and drug materials for use in preclinical studies and clinical trials. | ||||||||||||||||
Property and Equipment, Net | |||||||||||||||||
Property and equipment are stated at cost, subject to adjustments for impairment, less accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method over the following estimated useful lives: | |||||||||||||||||
Laboratory equipment | 3 – 5 years | ||||||||||||||||
Office equipment | 5 years | ||||||||||||||||
Office furniture and fixtures | 7 years | ||||||||||||||||
Computer equipment and software | 3 years | ||||||||||||||||
Leasehold improvements | Shorter of useful life or remaining lease term | ||||||||||||||||
Maintenance and repairs are charged to expense as incurred, improvements to leased facilities and equipment are capitalized. | |||||||||||||||||
Impairment of Long-Lived Assets | |||||||||||||||||
The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. | |||||||||||||||||
Revenue Recognition | |||||||||||||||||
Revenues from merchandise sales are recognized upon transfer of ownership, including passage of title to the customer and transfer of the risk of loss related to those goods. Revenues are reported on a net sales basis, which is computed by deducting from gross sales the amount of actual product returns received, discounts, incentive arrangements with retailers and an amount established for anticipated product returns. The Company's practice is to accept product returns from retailers only if properly requested, authorized and approved. As a percentage of gross sales, returns were less than 5% in fiscal years 2014 and 2013. | |||||||||||||||||
Revenues from a cost-reimbursement grant sponsored by the United States Army, or Grant Revenue, are recognized as milestones under the Grant program are achieved. Grant Revenue is earned through reimbursements for the direct costs of labor, travel, and supplies, as well as the pass-through costs of subcontracts with third-party CROs. | |||||||||||||||||
Research and Development Costs | |||||||||||||||||
Research and development costs include, but are not limited to, (i) expenses incurred under agreements with contract research organizations and investigative sites, which conduct our clinical trials and a substantial portion of our preclinical studies; (ii) the cost of manufacturing and supplying clinical trial materials; (iii) payments to contract service organizations, as well as consultants; (iv) employee-related expenses, which include salaries and benefits; and (v) facilities, depreciation and other allocated expenses, which include direct and allocated expenses for rent and maintenance of facilities and equipment, depreciation of leasehold improvements and equipment and laboratory and other supplies. All research and development expenses are expensed as incurred. | |||||||||||||||||
Income Taxes | |||||||||||||||||
Deferred tax assets and liabilities are recorded for differences between the financial statement and tax bases of the assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense is recorded for the amount of income tax payable or refundable for the period increased or decreased by the change in deferred tax assets and liabilities during the period. | |||||||||||||||||
Stock-Based Compensation | |||||||||||||||||
The Company accounts for stock based compensation in accordance with ASC 718 Compensation — Stock Compensation, which requires the measurement and recognition of compensation expense for all stock-based payment awards granted, modified and settled to our employees and directors. The Company chose the “straight-line” attribution method for allocating compensation costs of each stock option on a straight-line basis over the requisite service period using the Black-Scholes Option Pricing Model to calculate the grant date fair value. | |||||||||||||||||
Loss Per Share | |||||||||||||||||
Basic loss per share, which excludes antidilutive securities, is computed by dividing loss available to common shareholders by the weighted-average number of common shares outstanding for that particular period. In contrast, diluted loss per share considers the potential dilution that could occur from other equity instruments that would increase the total number of outstanding shares of common stock. Such amounts include shares potentially issuable under outstanding options, warrants and convertible debentures. A reconciliation of the numerator and denominator used in the calculation of basic and diluted net loss per share follows. | |||||||||||||||||
Year ended April 30, | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Historical net loss per share: | |||||||||||||||||
Numerator | |||||||||||||||||
Net loss, attributable to common stockholders | $ | (25,345,201 | ) | $ | (10,373,871 | ) | |||||||||||
Less: Effect of amortization of interest expense on convertible notes | - | (1,382,537 | ) | ||||||||||||||
Net loss attributable to common stockholders (diluted) | (25,345,201 | ) | (11,756,408 | ) | |||||||||||||
Denominator | |||||||||||||||||
Weighted-average common shares outstanding | 9,362,031 | 1,650,280 | |||||||||||||||
Effect of dilutive securities | - | 108,745 | |||||||||||||||
Denominator for diluted net loss per share | 9,362,031 | 1,759,025 | |||||||||||||||
Basic net loss per share | $ | (2.71 | ) | $ | (6.29 | ) | |||||||||||
Diluted net loss per share | $ | (2.71 | ) | $ | (6.68 | ) | |||||||||||
The following outstanding options, convertible note shares and warrants were excluded from the computation of basic and diluted net loss per share for the periods presented because including them would have had an anti-dilutive effect. | |||||||||||||||||
Year ended April 30, | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Options to purchase common stock | 3,647,858 | 11,336 | |||||||||||||||
Warrants to purchase common stock | 2,762,466 | 759,410 | |||||||||||||||
Restricted stock grants | 42,478 | 1,917 | |||||||||||||||
Convertible note shares outstanding | 6,652 | 98 | |||||||||||||||
Convertible preferred shares outstanding | - | 97,400 | |||||||||||||||
Operating Leases | |||||||||||||||||
The Company maintains operating leases for its office and laboratory facilities. The lease agreements may include rent escalation clauses and tenant improvement allowances. The Company recognizes scheduled rent increases on a straight-line basis over the lease term beginning with the date the company takes possession of the leased space. Differences between rental expense and actual rental payments are recorded as deferred rent liabilities and are included in “Other liabilities” on the consolidated balance sheets. | |||||||||||||||||
Fair Value | |||||||||||||||||
The Company records its financial assets and liabilities in accordance with ASC 820 Fair Value Measurements. The Company's consolidated balance sheet includes the following financial instruments: cash and cash equivalents, short-term notes payable, convertible preferred stock and convertible notes. The Company considers the carrying amount of its cash and cash equivalents and short-term notes payable to approximate fair value due to the short-term nature of these instruments. The Company did not elect the fair value option and records the carrying value of its convertible notes at amortized cost in accordance with ASC 470-20. | |||||||||||||||||
Accounting for fair value measurements involves a single definition of fair value, along with a conceptual framework to measure fair value, with a fair value defined as "the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date." The fair value measurement hierarchy consists of three levels: | |||||||||||||||||
Level one | Quoted market prices in active markets for identical assets or liabilities; | ||||||||||||||||
Level two | Inputs other than level one inputs that are either directly or indirectly observable, and | ||||||||||||||||
Level three | Unobservable inputs developed using estimates and assumptions; which are developed by the reporting entity and reflect those assumptions that a market participant would use. | ||||||||||||||||
The Company applies valuation techniques that (1) place greater reliance on observable inputs and less reliance on unobservable inputs and (2) are consistent with the market approach, the income approach and/or the cost approach, and include enhanced disclosures of fair value measurements in its Consolidated Financial Statements. | |||||||||||||||||
The following tables show information regarding assets and liabilities measured at fair value on a recurring basis as of April 30, 2014 and 2013: | |||||||||||||||||
Fair Value Measurements at Reporting Date Using | |||||||||||||||||
Balance as of April 30, 2014 | Quoted prices in Active Markets for Identical Securities (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||
Current Assets | |||||||||||||||||
Cash and cash equivalents | $ | 58,320,555 | $ | 58,320,555 | $ | - | $ | - | |||||||||
Current Liabilities | |||||||||||||||||
Warrant liabilities | $ | 954,876 | $ | - | $ | - | $ | 954,876 | |||||||||
Fair Value Measurements at Reporting Date Using | |||||||||||||||||
Balance as of April 30, 2013 | Quoted prices in Active Markets for Identical Securities (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||
Current Assets | |||||||||||||||||
Cash and cash equivalents | $ | 783,528 | $ | 783,528 | $ | - | $ | - | |||||||||
Current Liabilities | |||||||||||||||||
Warrant liabilities | $ | - | $ | - | $ | - | $ | - | |||||||||
There were no significant transfers between levels in the years ended April 30 2014 and 2013. The Warrant liabilities are recorded at fair value with changes in fair value recorded as gains or losses within other expense (income). | |||||||||||||||||
Financial assets or liabilities are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable. | |||||||||||||||||
As further discussed in Note G below, on July 23, 2013, the Company issued common stock warrants (the “Series C Warrants”) in connection with the issuance of Series C 8% Convertible Preferred Stock (the “Series C Stock”). The Series C warrants are measured using the Monte Carlo valuation model which is based, in part, upon inputs for which there is little or no observable market data, requiring the Company to develop its own assumptions. The assumptions used in calculating the estimated fair value of the warrants represent the Company’s best estimates; however, these estimates involve inherent uncertainties and the application of management judgment. As a result, if factors change and different assumptions are used, the warrant liabilities and the change in estimated fair value of the warrants could be materially different. | |||||||||||||||||
Inherent in the Monte Carlo valuation model are assumptions related to expected stock-price volatility, expected life, risk-free interest rate and dividend yield. The Company estimates the volatility of its common stock based on historical volatility that matches the expected remaining life of the warrants. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected remaining life of the warrants. The expected life of the warrants is assumed to be equivalent to their remaining contractual term. The dividend rate is based on the historical rate, which the Company anticipates to remain at zero. | |||||||||||||||||
The Monte Carlo model is used for the Series C warrants to appropriately value the potential future exercise price adjustments triggered by the anti-dilution provisions. This requires Level 3 inputs which are based on the Company’s estimates of the probability and timing of potential future financings and fundamental transactions. The other assumptions used by the Company are summarized in the following table for the Series C warrants that were outstanding as of April 30, 2014; no Series C warrants were outstanding as of April 30, 2013: | |||||||||||||||||
Series C Warrants | April 30, | April 30, | |||||||||||||||
2014 | 2013 | ||||||||||||||||
Closing stock price | $ | 4.88 | $ | - | |||||||||||||
Expected dividend rate | 0 | % | - | % | |||||||||||||
Expected stock price volatility | 90.32 | % | - | % | |||||||||||||
Risk-free interest rate | 1.75 | % | - | % | |||||||||||||
Expected life (years) | 5.23 | - | |||||||||||||||
Recent Accounting Pronouncements | |||||||||||||||||
In June 2014, the FASB issued Accounting Standards Update (“ASU”) 2014-10, Development Stage Entities (Topic 915). The objective of the amendments in this update is to improve financial reporting by reducing the cost and complexity associated with the incremental reporting requirements for development stage entities. Users of financial statements of development stage entities told the Board that the development stage entity distinction, the inception-to-date information, and certain other disclosures currently required under U.S. GAAP in the financial statements of development stage entities provide information that has limited relevance and is generally not decision useful. As a result, the amendments in this update remove all incremental financial reporting requirements from US GAAP for development stage entities, thereby improving financial reporting by eliminating the cost and complexity associated with providing that information. The amendments are effective for annual reporting periods beginning after December 15, 2014, and interim reporting periods beginning after December 15, 2015. Early adoption is permitted. The Company has elected to early adopt this guidance, and therefore is no longer presenting the financial statements in accordance with ASU 915, with inception to date disclosures. | |||||||||||||||||
In May 2014, the FASB issued Accounting Standard Update 2014-09, Revenue from Contracts with Customers (ASU 2014-09) providing a comprehensive new revenue recognition standard. ASU 2014-09 provides revised standards of recognition predicated on when an entity transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 is effective for us in our first quarter of fiscal 2018. ASU 2014-09 can be applied retrospectively with a modified retrospective application permitted. We are currently evaluating the impact of our pending adoption of ASU 2014-09 on our consolidated financial statements. | |||||||||||||||||
In July 2013, the FASB issued ASU No. 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. ASU No. 2013-11 requires entities to present in the consolidated financial statements an unrecognized tax benefit, or a portion of an unrecognized tax benefit as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward except to the extent such items are not available or not intended to be used at the reporting date to settle any additional income taxes that would result from the disallowance of a tax position. In such instances, the unrecognized tax benefit is required to be presented in the consolidated financial statements as a liability and not be combined with deferred tax assets. This guidance is effective prospectively for fiscal years, and interim periods within those years, beginning after December 15, 2013. The adoption of ASU 2013-11 did not have a material impact on the Company’s consolidated financial statements. |
3_BALANCE_SHEET_COMPONENTS
3. BALANCE SHEET COMPONENTS | 12 Months Ended | ||||||||
Apr. 30, 2014 | |||||||||
Notes to Financial Statements | ' | ||||||||
3. BALANCE SHEET COMPONENTS | ' | ||||||||
Inventory | |||||||||
The Company operates in an industry characterized by rapid improvements and changes to its technology and products. The introduction of new products by the Company or its competitors can result in its inventory being rendered obsolete or requiring it to sell items at a discount. The Company evaluates the recoverability of its inventory by reference to its internal estimates of future demands and product life cycles. As of April 30, 2014, due to development delays by the Company’s licensee, the Company does not believe the existing inventory will be sold prior to the expiration of its stability life and has recorded a charge of approximately $97,000 to cost of sales for the year ended April 30, 2014 equal to the carrying value of cosmetics inventory. The Company's future estimates are subjective and actual results may vary. | |||||||||
Inventories are recorded at cost using the First-In-First-Out (“FIFO”) method. Ending inventories are comprised of raw materials and direct costs of manufacturing and valued at the lower of cost or market. Inventories consisted of the following as of April 30, 2014 and 2013: | |||||||||
April 30, | April 30, | ||||||||
2014 | 2013 | ||||||||
Raw materials | $ | - | $ | 28,779 | |||||
Finished goods | - | 70,425 | |||||||
$ | - | $ | 99,204 | ||||||
Other current assets | |||||||||
Other current assets consist of the following: | |||||||||
April 30, | April 30, | ||||||||
2014 | 2013 | ||||||||
R&D materials | $ | 177,406 | $ | 159,892 | |||||
Other | - | 7,090 | |||||||
Dermacyte samples | - | 3,428 | |||||||
$ | 177,406 | $ | 170,410 | ||||||
Property and equipment, net | |||||||||
Property and equipment consist of the following: | |||||||||
April 30, | April 30, | ||||||||
2014 | 2013 | ||||||||
Laboratory equipment | $ | 683,632 | $ | 768,252 | |||||
Computer equipment and software | 142,380 | 135,697 | |||||||
Office furniture and fixtures | 130,192 | 130,192 | |||||||
956,204 | 1,034,141 | ||||||||
Less: Accumulated depreciation and amortization | (831,830 | ) | (828,752 | ) | |||||
$ | 124,374 | $ | 205,389 | ||||||
Depreciation and amortization expense was $88,300 and $92,959 for the years ended April 30, 2014 and 2013, respectively. | |||||||||
Accrued liabilities | |||||||||
Accrued liabilities consist of the following: | |||||||||
April 30, | April 30, | ||||||||
2014 | 2013 | ||||||||
Employee related | $ | 609,130 | $ | 66,632 | |||||
Deferred revenue | 124,521 | 185,068 | |||||||
Operating costs | 76,632 | 19,865 | |||||||
Restructuring liability | 43,728 | 43,728 | |||||||
Convertible note interest payable | 4,125 | 59,583 | |||||||
Accrued settlement costs | - | 500,000 | |||||||
$ | 858,136 | $ | 874,876 | ||||||
Other liabilities | |||||||||
As further discussed in Note H below, following the closing of the Company’s research and development facility in California, the Company entered into a long-term sublease agreement with an unrelated third party covering the vacated space which extends through the termination date. The Company recorded a liability for the remaining lease payments due under its long-term, non-cancelable operating lease for this facility, net of sublease payments, which expires in July 2015. The table below summarizes the net future minimum payments due under this lease agreement. | |||||||||
April 30, | April 30, | ||||||||
2014 | 2013 | ||||||||
Net non-cancelable operating lease obligation | $ | 54,660 | $ | 98,388 | |||||
Less: current portion | (43,728 | ) | (43,728 | ) | |||||
Long-term portion of net non-cancelable operating lease obligation | $ | 10,932 | $ | 54,660 | |||||
4_ACQUISITION
4. ACQUISITION | 12 Months Ended | ||||||||||||
Apr. 30, 2014 | |||||||||||||
Business Combinations [Abstract] | ' | ||||||||||||
4. ACQUISITION | ' | ||||||||||||
On November 13, 2013, the Company, through its wholly owned subsidiary, Life Newco, acquired certain assets of Phyxius pursuant to the Asset Purchase Agreement. The acquisition was accounted for under the acquisition method of accounting for business combinations in accordance with FASB ASC 805, Business Combinations, which requires, among other things that the assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date. Acquisition-related costs are not included as a component of the acquisition accounting, but are recognized as expenses in the periods in which the costs are incurred. Any changes within the measurement period resulting from facts and circumstances that existed as of the acquisition date may result in retrospective adjustments to the provisional amounts recorded at the acquisition date. | |||||||||||||
Under the terms and subject to the conditions of the Asset Purchase Agreement, Life Newco acquired (the “Acquisition”) certain assets, including that certain License Agreement (the “License”), dated September 20, 2013 by and between Phyxius and Orion Corporation, a global healthcare company incorporated under the laws of Finland (“Orion”), and that certain Side Letter, dated October 15, 2013 by and between Phyxius and Orion. The License grants Life Newco an exclusive, sublicenseable right to develop and commercialize pharmaceutical products containing Levosimedan, 2.5 mg/ml concentrate for solution for infusion / 5ml vial (the “Product”) in the United States and Canada (the “Territory”). Pursuant to the License, Life Newco must use Orion’s “Simdax®” trademark to commercialize the Product. The License also grants to Life Newco a right of first refusal to commercialize new developments of the Product, including developments as to the formulation, presentation, means of delivery, route of administration, dosage or indication. Orion’s ongoing role under the License includes sublicense approval, serving as the sole source of manufacture, holding a first right to enforce intellectual property rights in the Territory, and certain regulatory participation rights. Additionally, Life Newco must grant back to Orion a broad non-exclusive license to any patents or clinical trial data related to the Product developed by Life Newco under the License. The License has a fifteen (15) year term, provided, however, that the License will continue after the end of the fifteen year term in each country in the Territory until the expiration of Orion’s patent rights in the Product in such country (the “Term”). Orion may terminate the License if the human clinical trial using the Product and studying reduction in morbidity and mortality of cardiac surgery patients at risk of low cardiac output syndrome (LCOS) as described in the US Food and Drug Administration (the “FDA”) agreed upon clinical study protocol (the “Study”) is not started by July 31, 2014. As of July 24, 2014 the Company is in negotiations with multiple clinical sites. | |||||||||||||
The following table summarizes the consideration transferred to acquire Phyxius and the amounts of identified assets acquired and liabilities assumed at the acquisition date. | |||||||||||||
Fair Value of Consideration Transferred: | |||||||||||||
Common stock | 8,747,802 | ||||||||||||
Series E convertible preferred stock | 15,299,198 | ||||||||||||
Total | 24,047,000 | ||||||||||||
The Company issued 1,366,844 shares of its common stock that had a total fair value of approximately $8.7 million based on the closing market price on November 13, 2013, the acquisition date. The Company also issued 32,992 shares of its Series E Convertible Preferred Stock (the “Series E Stock”), which are convertible into an aggregate of 3,299,200 shares of common stock that had a total fair value of approximately $15.3 million. | |||||||||||||
The rights, preferences and privileges of the Series E Stock are set forth in the Certificate of Designation of Series E Convertible Preferred Stock that the Company filed with the Secretary of State of the State of Delaware on November 13, 2013. Each share of Series E Stock automatically converted into 100 shares of common stock following receipt of stockholder approval for the transaction at the special meeting of stockholders held on March 13, 2014. Approximately 11% of the shares of converted common stock vested immediately upon receipt of stockholder approval for the transaction, while the remainder vested upon the closing of the Company’s underwritten offering of 9,285,714 shares of common stock on March 21, 2014, which resulted in net proceeds of approximately $55 million. | |||||||||||||
The Series E Stock was convertible into restricted common shares using a 100-for-one ratio at any time and in accordance with a vesting schedule contingent upon achievement of Company-specific non-financial conditions. As a result, the fair value of the Preferred Shares was inferred based on their common stock equivalent value given the conversion terms. The conditional vesting of the Series E Stock was accounted for by subtracting the fair value of an equal number of put options that would effectively protect the common stock equivalent stock value as of the closing date. The terms of the put options were as follows: | |||||||||||||
- | Exercise price equal to the common stock price as of the Valuation Date. | ||||||||||||
- | Term based on management’s risk-adjusted expected time to meeting the vesting condition, which was further increased by 6 months to reflect the marketability restriction of the unregistered stock, consistent with SEC Rule 144 of the Securities Act. | ||||||||||||
- | Volatility was consistent with the term for the individual milestone payments derived from the median historical asset volatility for a set of comparable guideline companies. The volatility was then relevered to estimate the equity volatility of the Company. | ||||||||||||
In accordance with the provisions of FASB ASC 805, the following table presents the preliminary allocation of the total fair value of consideration transferred, as discussed above, to the acquired tangible and intangible assets and assumed liabilities of Phyxius based on their estimated fair values as of the closing date of the transaction, measurement period adjustments recorded since the acquisition date and the adjusted allocation of the total fair value: | |||||||||||||
November 13, | Measurement | November 13, | |||||||||||
2013 | 2013 | ||||||||||||
(As initially reported) | Period Adjustments (1) | (As adjusted) | |||||||||||
IPR&D | $ | 22,000,000 | $ | - | $ | 22,000,000 | |||||||
Trade and other payables | (256,000 | ) | - | (256,000 | ) | ||||||||
Liabilities arising from a contingency | (1,000,000 | ) | - | (1,000,000 | ) | ||||||||
Deferred tax liability related to intangibles acquired | - | (7,962,100 | ) | (7,962,100 | ) | ||||||||
Total identifiable net assets | 20,744,000 | (7,962,100 | ) | 12,781,900 | |||||||||
Goodwill | 3,303,000 | 7,962,100 | 11,265,100 | ||||||||||
Total fair value of consideration | $ | 24,047,000 | $ | - | $ | 24,047,000 | |||||||
-1 | The measurement period adjustments primarily reflect the recording of a deferred tax liability and resulting goodwill. The measurement period adjustments were made to reflect facts and circumstances existing as of the acquisition date and did not result from intervening events subsequent to the acquisition date. | ||||||||||||
The fair value of the acquired in-process research and development, (“IPR&D”), intangible asset of approximately $22.0 million was determined using the multi-period excess earnings method. The Company did not acquire any other class of assets as a result of the acquisition. | |||||||||||||
Pursuant to the terms of the License, the Company paid to Orion a non-refundable up-front payment in the amount of $1 million. | |||||||||||||
The License also includes the following development milestones for which the Company shall make non-refundable payments to Orion no later than twenty-eight (28) days after the occurrence of the applicable milestone event: (i) $2.0 million upon the grant of FDA approval, including all registrations, licenses, authorizations and necessary approvals, to develop and/or commercialize the Product in the United States; and (ii) $1.0 million upon the grant of regulatory approval for the Product in Canada. Once commercialized, the Company is obligated to make certain non-refundable commercialization milestone payments to Orion, aggregating up to $13.0 million, contingent upon achievement of certain cumulative net sales amounts in the Territory. The Company must also pay Orion tiered royalties based on net sales of the Product in the Territory made by the Company and its sublicensees. After the end of the Term, the Company must pay Orion a royalty based on net sales of the Product in the Territory for as long as the Company sells the Product in the Territory. | |||||||||||||
In connection with the closing of the Acquisition, Phyxius’ co-founder, Chief Executive Officer and stockholder, John Kelley, became the Company’s Chief Executive Officer and two other Phyxius employees and stockholders, Doug Randall and Douglas Hay, PhD became employees of the Company as Vice President, Business and Commercial Operations and Vice President, Regulatory Affairs, respectively. Michael Jebsen, the Company’s prior Interim Chief Executive Officer and current Chief Financial Officer, continued serving as the Company’s Chief Financial Officer. In addition, Mr. Kelley was subsequently appointed to the Company’s Board of Directors, and Gerald T. Proehl, a designee of the Phyxius Stockholders, was appointed to the Board of Directors on April 3, 2014 following receipt of stockholder approval for the transaction. Pursuant to the Asset Purchase Agreement, the Company agreed to propose that its stockholders approve an amendment to the Company’s 1999 Stock Plan to increase the amount of stock options authorized for issuance under the 1999 Stock Plan to not less than 4,000,000 shares of common stock. On March 13, 2014, the Company received stockholder approval to increase the option plan. In accordance with terms of the Acquisition, the Company issued an aggregate of 3,572,880 stock options with a grant date fair value of $15,818,512, to the individuals described above. See Note G for additional details | |||||||||||||
The common stock and Series E Stock issued as the consideration in the Acquisition were issued and sold without registration under the Securities Act of 1933 (the “Securities Act”) in reliance on the exemptions provided by Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder and in reliance on similar exemptions under applicable state laws. Accordingly, the Phyxius Stockholders may sell the shares of common stock and Series E Stock only pursuant to an effective registration statement under the Securities Act covering the resale of those securities, an exemption under Rule 144 under the Securities Act or another applicable exemption under the Securities Act. | |||||||||||||
The table below presents unaudited pro forma information as if the Company’s acquisition of Phyxius had occurred at the beginning of the earliest period presented, which was May 1, 2012. The pro forma financial information is not indicative of the results of operations that would have occurred had the transaction been effected on the assumed date or of the results that may occur in the future: | |||||||||||||
Year ended April 30, | |||||||||||||
2014 | 2013 | ||||||||||||
Total net revenue | 158,926 | 1,190,928 | |||||||||||
Net loss | $ | 19,560,030 | $ | 9,418,395 | |||||||||
Net loss attributable to common stockholders | $ | 25,363,392 | $ | 10,376,466 | |||||||||
Net loss per share, basic | $ | (2.37 | ) | $ | (3.44 | ) | |||||||
Weighted average number of common shares outstanding, basic | 10,717,037 | 3,017,124 | |||||||||||
Net loss per share, diluted | $ | (2.37 | ) | $ | (3.76 | ) | |||||||
Weighted average number of common shares outstanding, diluted | 10,717,037 | 3,125,869 | |||||||||||
5_INTANGIBLE_ASSETS
5. INTANGIBLE ASSETS | 12 Months Ended | |||||||||||||||||||
Apr. 30, 2014 | ||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | |||||||||||||||||||
5. INTANGIBLE ASSETS | ' | |||||||||||||||||||
The following table summarizes our intangible assets as of April 30, 2014: | ||||||||||||||||||||
Asset Category | Value Assigned | Weighted Average Amortization Period (in Years) | Impairments | Accumulated Amortization | Carrying Value (Net of Impairments and Accumulated Amortization) | |||||||||||||||
IPR&D | $ | 22,000,000 | N/A | $ | - | $ | - | $ | 22,000,000 | |||||||||||
Patents | 724,067 | 10.8 | - | (289,943 | ) | 434,124 | ||||||||||||||
License Rights | 607,947 | 14.6 | - | (148,713 | ) | 459,234 | ||||||||||||||
Trademarks | 106,386 | N/A | - | - | 106,386 | |||||||||||||||
Total | $ | 23,438,400 | $ | - | $ | (438,656 | ) | $ | 22,999,744 | |||||||||||
The following table summarizes our intangible assets as of April 30, 2013: | ||||||||||||||||||||
Asset Category | Value Assigned | Weighted Average Amortization Period (in Years) | Impairments | Accumulated Amortization | Carrying Value (Net of Impairments and Accumulated Amortization) | |||||||||||||||
Patents | $ | 645,918 | 11.2 | $ | (27,279 | ) | $ | (258,499 | ) | $ | 360,140 | |||||||||
License Rights | 572,370 | 15.6 | - | (117,969 | ) | 454,401 | ||||||||||||||
Trademarks | 110,157 | N/A | - | - | 110,157 | |||||||||||||||
Total | $ | 1,328,445 | $ | (27,279 | ) | $ | (376,468 | ) | $ | 924,698 | ||||||||||
For the years ended April 30, 2014 and 2013, the aggregate amortization expense on the above intangibles was approximately $62,189 and $55,845, respectively. The following table summarizes the aggregate amortization expense over the remaining life of the patents and license rights as of April 30, 2014: | ||||||||||||||||||||
Year ending April 30, | Amount | |||||||||||||||||||
2015 | $ | 66,525 | ||||||||||||||||||
2016 | 65,949 | |||||||||||||||||||
2017 | 62,032 | |||||||||||||||||||
2018 | 61,239 | |||||||||||||||||||
2019 | 61,111 | |||||||||||||||||||
Therafter | 576,502 | |||||||||||||||||||
$ | 893,358 | |||||||||||||||||||
In Process Research and Development— The levosimendan product in Phase III clinical trial represents an IPR&D asset. The IPR&D asset is a research and development project rather than a product or processes already in service or being sold. Research and development intangible assets are considered indefinite-lived until the abandonment or completion of the associated research and development efforts. If abandoned, the assets would be impaired. Research and development expenditures that are incurred after the acquisition, including those for completing the research and development activities related to the acquired intangible research and development assets, are generally expensed as incurred. | ||||||||||||||||||||
Patents and License Rights—The Company currently holds, has filed for, or owns exclusive rights to, U.S. and worldwide patents covering 13 various methods and uses of its perfluorocarbon (“PFC”) technology. It capitalizes amounts paid to third parties for legal fees, application fees and other direct costs incurred in the filing and prosecution of its patent applications. These capitalized costs are amortized on a straight-line method over their useful life or legal life, whichever is shorter. | ||||||||||||||||||||
The Company completed its annual impairment test of its patents and license rights during the fourth quarter of fiscal years 2014 and 2013. The Company wrote-off approximately $0 and $27,000 of capitalized costs for patent applications that were withdrawn or abandoned during the years ended April 30, 2014 and 2013, respectively. These asset impairment charges primarily related to the Company’s topical formulations using alternative PFCs which were determined not to be a core component of the Company’s development strategy. The Company capitalized patent costs of approximately $137,000 and $135,000 for the year ended April 30, 2014 and 2013, respectively. | ||||||||||||||||||||
Trademarks—The Company currently holds, or has filed for, trademarks to protect the use of names and descriptions of its products and technology. It capitalizes amounts paid to third parties for legal fees, application fees and other direct costs incurred in the filing and prosecution of its trademark applications. These trademarks are evaluated annually for impairment in accordance with ASC 350, Intangibles – Goodwill and other. The Company evaluates (i) its expected use of the underlying asset, (ii) any laws, regulations, or contracts that may limit the useful life, (iii) the effects of obsolescence, demand, competition, and stability of the industry, and (iv) the level of costs to be incurred to commercialize the underlying asset. The Company capitalized trademark costs of approximately $0 and $1,100, for the year ended April 30, 2014 and 2013, respectively. |
6_NOTES_PAYABLE
6. NOTES PAYABLE | 12 Months Ended | ||||||||
Apr. 30, 2014 | |||||||||
Debt Disclosure [Abstract] | ' | ||||||||
6. NOTES PAYABLE | ' | ||||||||
The following table summarizes the Company’s outstanding notes payable as of April 30, 2014 and 2013: | |||||||||
April 30, | April 30, | ||||||||
2014 | 2013 | ||||||||
Current portion of notes payable, net | $ | 63,568 | $ | 57,539 | |||||
Current portion of convertible notes payable | 300,000 | - | |||||||
Less: Unamortized discount | (16,678 | ) | |||||||
Current portion of notes payable, net | $ | 346,890 | $ | 57,539 | |||||
Long-term portion of convertible notes payable | $ | - | $ | 4,900,001 | |||||
Less: Unamortized discount | - | (1,905,559 | ) | ||||||
Long-term portion of notes payable, net | $ | - | $ | 2,994,442 | |||||
Convertible Note | |||||||||
On June 29, 2011, the Company issued a note (the “June Note”) with a principal amount of approximately $300,000 and Warrants to purchase 6,652 shares of common stock. On July 1, 2011, the Company issued a separate note (together with the June Note, the “Notes”) with a principal amount of $4,600,000 and warrants to purchase 101,996 shares of common stock. The aggregate gross proceeds to the Company from the offering were approximately $4.9 million, excluding any proceeds from the exercise of any warrants. The aggregate placement agent fees were $297,000 and legal fees associated with the offering were $88,839. These costs have been capitalized as debt issue costs and will be amortized as interest expense over the life of the Notes. The Company recorded amortization of debt issue costs of $128,616 for the year ended April 30, 2014 and 2013. | |||||||||
The total value allocated to the warrants was $1,960,497 and was recorded as a debt discount against the proceeds of the notes. In addition, the beneficial conversion features related to the notes were determined to be $2,939,504. As a result, the aggregate discount on the notes totaled $4,900,001, and is being amortized over term of the notes. The Company recorded interest expense for the amortization of debt discount $483,330 and $1,633,332 for the year ended April 30, 2014 and 2013, respectively. | |||||||||
Interest on the Notes accrues at a rate of 15% annually and will be paid in quarterly installments commencing on the third month anniversary of issuance. The Notes will mature 36 months from the date of issuance. The Notes may be converted into shares of common stock at a conversion price of $45.10 per share (subject to adjustment for stock splits, dividends and combinations, recapitalizations and the like) (the "Conversion Price") in whole or in part, at any time at the option of the holders of the Notes. The Notes also will automatically convert into shares of common stock at the Conversion Price at the election of a majority-in-interest of the holders of notes issued under the purchase agreement or upon the acquisition or sale of all or substantially all of the assets of the Company. The Company may make each applicable interest payment or payment of principal in cash, shares of common stock at the Conversion Price, or any combination thereof. The Company may elect to prepay all or any portion of the Notes without prepayment penalties only with the approval of a majority-in-interest of the note holders under the purchase agreement at the time of the election. The Notes contain various events of default such as failing to timely make any payment under the Note when due, which may result in all outstanding obligations under the Note becoming immediately due and payable. | |||||||||
As further discussed in Note G below, on August 22, 2013 holders of $4.6 million of the Notes received 4,600 shares of the Company’s Series D 8% Convertible Preferred Stock (the “Series D Stock”) as consideration for cancelling their outstanding Note. On that date, the Company recognized non-cash interest expense of $1,311,847 for the remaining unamortized debt discount associated with this Note. |
7_STOCKHOLDERS_EQUITY
7. STOCKHOLDERS EQUITY | 12 Months Ended | ||||||||||||||||||
Apr. 30, 2014 | |||||||||||||||||||
Equity [Abstract] | ' | ||||||||||||||||||
7. STOCKHOLDERS' EQUITY | ' | ||||||||||||||||||
Preferred Stock | |||||||||||||||||||
Under the Company’s Certificate of Incorporation, the Board of Directors is authorized, without further stockholder action, to provide for the issuance of up to 10,000,000 shares of preferred stock, par value $0.0001 per share, in one or more series, to establish from time to time the number of shares to be included in each such series, and to fix the designation, powers, preferences and rights of the shares of each such series and the qualifications, limitations and restrictions thereof. As of April 30, 2014, 9,947,439 shares of preferred stock are undesignated. | |||||||||||||||||||
On November 13, 2013, the Company filed a Certificate of Designation with the Secretary of State of the State of Delaware designating 32,992 shares of its authorized but unissued shares of preferred stock as Series E Stock. | |||||||||||||||||||
On August 22, 2013, the Company filed a Certificate of Designation with the Secretary of State of the State of Delaware designating 4,600 shares of its authorized but unissued shares of preferred stock as Series D Stock. | |||||||||||||||||||
On July 22, 2013, the Company filed a Certificate of Designation with the Secretary of State of the State of Delaware designating 5,369 shares of its authorized but unissued shares of preferred stock as Series C Stock. | |||||||||||||||||||
On February 25, 2013, the Company filed a Certificate of Designation with the Secretary of State of the State of Delaware designating 1,600 shares and 500 shares of its authorized but unissued shares of preferred stock as Series B-1 Convertible Preferred Stock (the “Series B-1 Stock”) and Series B-2 Convertible Preferred Stock (the “Series B-2 Stock” and together with the Series B-1 Stock, the “Series B Stock”), respectively. | |||||||||||||||||||
On December 8, 2011, the Company filed a Certificate of Designation with the Secretary of State of the State of Delaware designating 7,500 shares of its authorized but unissued shares of preferred stock as Series A Stock. | |||||||||||||||||||
Series E Stock | |||||||||||||||||||
As further discussed in Note D above, on November 13, 2013 the Company issued 32,992 shares of its Series E Stock, which are convertible into an aggregate of 3,299,200 shares of common stock, as partial consideration to acquire certain assets of Phyxius Pharma, Inc. pursuant to the Asset Purchase Agreement. | |||||||||||||||||||
The rights, preferences and privileges of the Series E Stock are set forth in the Certificate of Designation of Series E Convertible Preferred Stock (the “Certificate of Designation”) that the Company filed with the Secretary of State of the State of Delaware on November 13, 2013. Each share of Series E Stock will automatically convert into 100 shares of common stock following receipt of stockholder approval for the transaction. Approximately 11% of the shares of converted common stock will vest immediately upon receipt of stockholder approval for the transaction, while the remainder will vest upon achievement of certain performance milestones related to the development and commercialization of the levosimendan product in North America. In addition, all unvested converted common stock will vest if certain change of control transactions or significant equity financings occur within 24 months of the closing of the Acquisition. The number of shares of common stock into which the Series E Stock converts is subject to adjustment in the case of stock splits, stock dividends, combinations of shares and similar recapitalization transactions. The Series E Stock does not carry dividend or a liquidation preference. The Series E Stock carries voting rights aggregating 4.99% of the Company’s common stock voting power immediately prior to the closing of the Acquisition. | |||||||||||||||||||
During the year ended April 30, 2014, 32,992 shares of Series E Stock were converted into 3,299,200 shares of Common Stock. As of April 30, 2014 there were no shares of Series E Stock outstanding. | |||||||||||||||||||
Series D Stock | |||||||||||||||||||
On August 22, 2013, the Company closed its private placement of an aggregate of $4.6 million of shares of the Company’s Series D Stock to JP SPC 3 obo OXBT FUND, SP (“OXBT Fund”). In connection with the purchase of shares of Series D Stock, OXBT Fund received a warrant to purchase 2,358,975 shares of common stock at an exercise price equal to $2.60 (the “Series D Warrant”). As consideration for the sale of the Series D Stock and Series D Warrant, $4.6 million in outstanding principal amount of a Note issued by the Company on July 1, 2011 and held by OXBT Fund was cancelled. The Note carried interest at a rate of 15% per annum and matured on July 1, 2014. Mr. Gregory Pepin, one of the Company’s directors, is the investment manager of OXBT Fund. Pursuant to the terms of a lock-up agreement (the “Lock-Up Agreement”) executed prior to the closing, OXBT Fund and its affiliates are prohibited from engaging in certain transactions with respect to shares of the Company’s common stock and common stock equivalents until such time as the lead investor in the Company’s offering of Series C Stock ceases to own at least 25% of the shares of Series C Stock originally issued to such investor. | |||||||||||||||||||
The table below sets forth a summary of the designation, powers, preferences and rights of the Series D Stock. | |||||||||||||||||||
Conversion | Subject to certain ownership limitations, the Series D Stock is convertible at any time at the option of the holder into shares of the Company’s common stock at a conversion ratio determined by dividing the stated value of the Series C Stock (or $1,000) by a conversion price of $1.95 per share. The conversion price is subject to adjustment in the case of stock splits, stock dividends, combinations of shares and similar recapitalization transactions. | ||||||||||||||||||
Until such time that for at least 25 trading days during any 30 consecutive trading days, the volume weighted average price of the Company’s common stock exceeds 250% of the initial conversion price, if the Company sells or grants any option to purchase or sell any common stock or common stock equivalents entitling any person to acquire shares of common stock at an effective price per share that is lower than the then conversion price, or the Base Conversion Price, then the conversion price shall be reduced to equal the Base Conversion Price | |||||||||||||||||||
Dividends and Make-Whole Payment | Until the third anniversary of the date of issuance of the Series D Stock, the holder of the Series D Stock is entitled to receive dividends at the rate of 8% per annum of the stated value for each share of Series D Stock held by such holder payable quarterly on January 1, April 1, July 1 and October 1, beginning on the first such date after the original issue date, and on each dividend payment date. The Company can elect to pay the dividends in cash or in duly authorized, validly issued, fully paid and non-assessable shares of common stock, or a combination thereof. If the Company pays the dividends in shares of common stock, the shares used to pay the dividends will be valued at 90% of the average volume weighted average price for the 20 consecutive trading days ending on the trading day immediately prior to the applicable dividend payment date. From and after the third anniversary of the date of issuance of the Series D Stock, the holder of Series D Stock will be entitled to receive dividends equal, on an as-if-converted to common stock basis, to and in the same form as dividends actually paid on shares of common stock when, as, and if such dividends are paid on shares of common stock. The Company has never paid dividends on its common stock and the Company does not intend to do so for the foreseeable future. | ||||||||||||||||||
In the event OXBT Fund converts its Series D Stock prior to the third anniversary of the date of issuance of the Series D Stock, the Company must also pay to OXBT Fund in cash, or at the Company’s option in common stock valued as described above, or a combination of cash and shares of common stock, with respect to the Series D Stock so converted, an amount equal to $240 per $1,000 of the stated value of the Series D Stock, less the amount of any dividends paid in cash or in common stock on such Series D Stock on or before the date of conversion. | |||||||||||||||||||
Liquidation | Upon any liquidation, dissolution or winding up of the Company after payment or provision for payment of debts and other liabilities of the Company, but before any distribution or payment is made to the holders of any junior securities, the holder of Series D Stock shall be entitled to be paid out of the assets of the Company available for distribution to its stockholders an amount equal to $1,000 per share, after which any remaining assets of the Company shall be distributed among the holders of the other class or series of stock in accordance with the Company’s Certificate of Incorporation. | ||||||||||||||||||
Voting rights | Shares of Series D Stock will generally have no voting rights, except as required by law and except that the consent of the holder of the outstanding Series D Stock will, among other things, be required to amend the terms of the Series D Stock. | ||||||||||||||||||
During the year ended April 30, 2014, 4,600 shares of Series D Stock were converted into 2,358,974 shares of Common Stock and the Company issued 576,084 shares of its common stock in the form of Series D Stock dividends. As of April 30, 2014 there were no shares of Series D Stock outstanding. | |||||||||||||||||||
Series C Stock | |||||||||||||||||||
On July 21, 2013, the Company entered into a Securities Purchase Agreement with certain investors providing for the issuance and sale by the Company (the “Series C Offering”) of an aggregate of approximately $5.4 million of shares of the Company’s Series C Stock, which are convertible into a combined total of 2,753,348 shares of common stock (the “Conversion Shares”). In connection with the purchase of shares of Series C Stock in the Series C Offering, each investor will receive a warrant to purchase a number of shares of common stock equal to 100% of the number of Conversion Shares at an exercise price equal to $2.60 (the “Warrants”). On July 23, 2013, the Company sold 5,369 units for net proceeds of approximately $4.9 million. | |||||||||||||||||||
The table below sets forth a summary of the designation, powers, preferences and rights of the Series C Stock. | |||||||||||||||||||
Conversion | Subject to certain ownership limitations, the Series C Stock is convertible at any time at the option of the holder into shares of the Company’s common stock at a conversion ratio determined by dividing the stated value of the Series C Stock (or $1,000) by a conversion price of $1.95 per share. The conversion price is subject to adjustment in the case of stock splits, stock dividends, combinations of shares and similar recapitalization transactions. | ||||||||||||||||||
Until such time that for at least 25 trading days during any 30 consecutive trading days, the volume weighted average price of the Company’s common stock exceeds 250% of the initial conversion price, if the Company sells or grants any option to purchase or sell any common stock or common stock equivalents entitling any person to acquire shares of common stock at an effective price per share that is lower than the then conversion price, or the Base Conversion Price, then the conversion price shall be reduced to equal the Base Conversion Price | |||||||||||||||||||
Dividends and Make-Whole Payment | Until the third anniversary of the date of issuance of the Series C Stock, each holder of the Series C Stock is entitled to receive dividends at the rate of 8% per annum of the stated value for each share of Series C Stock held by such holder payable quarterly on January 1, April 1, July 1 and October 1, beginning on the first such date after the original issue date, and on each dividend payment date. The Company can elect to pay the dividends in cash or in duly authorized, validly issued, fully paid and non-assessable shares of common stock, or a combination thereof. If the Company pays the dividends in shares of common stock, the shares used to pay the dividends will be valued at 90% of the average volume weighted average price for the 20 consecutive trading days ending on the trading day immediately prior to the applicable dividend payment date. From and after the third anniversary of the date of issuance of the Series C Stock, each holder of Series C Stock will be entitled to receive dividends equal, on an as-if-converted to common stock basis, to and in the same form as dividends actually paid on shares of common stock when, as, and if such dividends are paid on shares of common stock. The Company has never paid dividends on its common stock and the Company does not intend to do so for the foreseeable future. | ||||||||||||||||||
In the event a holder converts his, her or its Series C Stock prior to the third anniversary of the date of issuance of the Series C Stock, the Company must also pay to the holder in cash, or at the Company’s option in common stock valued as described above, or a combination of cash and shares of common stock, with respect to the Series C Stock so converted, an amount equal to $240 per $1,000 of the stated value of the Series C Stock, less the amount of any dividends paid in cash or in common stock on such Series C Stock on or before the date of conversion. | |||||||||||||||||||
Liquidation | Upon any liquidation, dissolution or winding up of the Company after payment or provision for payment of debts and other liabilities of the Company, but before any distribution or payment is made to the holders of any junior securities, the holders of Series C Stock shall be entitled to be paid out of the assets of the Company available for distribution to its stockholders an amount equal to $1,000 per share, after which any remaining assets of the Company shall be distributed among the holders of the other class or series of stock in accordance with the Company’s Certificate of Incorporation. | ||||||||||||||||||
Voting rights | Shares of Series C Stock will generally have no voting rights, except as required by law and except that the consent of holders of a majority of the outstanding Series C Stock will, among other things, be required to amend the terms of the Series C Stock. | ||||||||||||||||||
The Company will not affect any conversion of the Series C Stock, nor shall a holder convert its shares of Series C Stock, to the extent that such conversion would cause the holder to have acquired, through conversion of the Series C Stock or otherwise, beneficial ownership of a number shares of common stock in excess of 4.99% of the common stock outstanding immediately preceding the conversion. | |||||||||||||||||||
During the year ended April 30, 2014, 5,369 shares of Series C Stock were converted into 2,753,327 shares of common stock and the Company issued 831,401 shares of its common stock for the payment of $1,288,560 as dividends on the Series C Stock. As of April 30, 2014 there were no shares of Series C Stock outstanding. | |||||||||||||||||||
Series B Stock | |||||||||||||||||||
On February 22, 2013, the Company entered into a Securities Purchase Agreement with an institutional investor providing for the issuance and sale by the Company of $1.6 million of shares of the Company’s Series B-1 Stock and $0.5 million of shares of the Company's Series B-2 Stock which are convertible into a combined total of 420,000 shares of common stock, subject to adjustment for subsequent equity sales. | |||||||||||||||||||
On February 27, 2013, the Company sold 2,100 units for net proceeds of approximately $1.9 million. Each unit sold consisted of (i) one share of the Company’s Series B Stock and (ii) a Warrant representing the right to purchase 300 shares of common stock at a price of $1,000 per unit, less issuance costs. The shares of Series B Stock were immediately convertible upon issuance. | |||||||||||||||||||
The table below sets forth a summary of the designation, powers, preferences and rights of the Series B Stock. | |||||||||||||||||||
Dividends | No dividends shall be paid on shares of Preferred Stock. | ||||||||||||||||||
Conversion | Holders may elect to convert shares of Series B Stock into shares of common stock at the then-existing conversion price at any time. The initial conversion price is $5.00 per share of common stock, and is subject to certain adjustments, including an anti-dilution provision that reduces the conversion price upon the issuance of any common stock or securities convertible into common stock at an effective price per share less than the conversion price and a one-time price reset following the effectiveness of a reverse split of the Company’s outstanding common stock. | ||||||||||||||||||
Liquidation preference | In the event of the Company’s voluntary or involuntary dissolution, liquidation or winding up, each holder of Series B Stock will be entitled to be paid a liquidation preference equal to the initial stated value of such holder’s Series B Stock of $1,000 per share, plus accrued and unpaid dividends and any other payments that may be due on such shares, before any distribution of assets may be made to holders of capital stock ranking junior to the Series B Stock. | ||||||||||||||||||
Voting rights | Shares of Series B Stock will generally have no voting rights, except as required by law and except that the consent of holders of a majority of the outstanding Series B Stock will among other things, be required to amend the terms of the Series B Stock. | ||||||||||||||||||
The Company will not affect any conversion of the Series B Stock, nor shall a holder convert its shares of Series B Stock, to the extent that such conversion would cause the holder to have acquired, through conversion of the Series B Stock or otherwise, beneficial ownership of a number shares of common stock in excess of 4.99% of the common stock outstanding immediately preceding the conversion. | |||||||||||||||||||
During the year ended April 30, 2014, 987 shares of Series B Stock were converted into 644,915 shares of common stock. As of April 30, 2014 there were no shares of Series B Stock outstanding. | |||||||||||||||||||
Series A Stock | |||||||||||||||||||
On December 12, 2011, the Company sold 3,500 units for net proceeds of approximately $3.2 million. Each unit sold consisted of (i) one share of the Company’s Series A Stock and (ii) a warrant representing the right to purchase 11.275 shares of common stock (the “2011 Warrants”), at a price of $1,000 per unit, less issuance costs. The shares of Series A Stock were immediately convertible and the 2011 Warrants are exercisable on the one-year anniversary of the closing date. | |||||||||||||||||||
On June 15, 2012, the Company sold an additional 2,500 units for net proceeds of approximately $2.3 million. Each unit sold consisted of (i) one share of the Company’s Series A Stock and (ii) a 2011 Warrant, at a price of $1,000 per unit, less issuance costs. The shares of Series A Stock were immediately convertible and the 2011 Warrants are exercisable beginning on the one-year anniversary of the closing date. | |||||||||||||||||||
Interest expense on the outstanding Series A Stock was approximately $0 and $1.7 million for the year ended April 30, 2014 and 2013, respectively. The recorded interest for the prior period was comprised of approximately $657,000 for the calculated fair value of the warrants issued with the Series A Stock and $763,000 for the excess of the fair-value of the shares issued upon conversion over the fair value of the Series A Stock. | |||||||||||||||||||
Interest expense recorded for the payment of dividends on the Series A Stock was approximately $0 and $310,000 for the year ended April 30, 2014 and 2013, respectively. | |||||||||||||||||||
No Series A Stock was outstanding during the years ended April 30, 2014 or April 30, 2013. | |||||||||||||||||||
Common Stock | |||||||||||||||||||
The Company’s Certificate of Incorporation authorizes it to issue 400,000,000 shares of $0.0001 par value common stock. As of April 30, 2014 and 2013, there were 27,858,000 and 1,930,078 shares of common stock issued and outstanding. | |||||||||||||||||||
Warrants | |||||||||||||||||||
Series D Warrants | |||||||||||||||||||
On August 22, 2013, the Company closed its previously announced private placement of an aggregate of $4.6 million shares of the Company’s Series D Stock to OXBT Fund. In connection with the purchase of shares of Series D Stock, OXBT Fund received the Series D Warrant to purchase 2,358,975 shares of common stock at an exercise price equal to $2.60 and contractual term of 6 years. In accordance with ASC 815, these warrants are classified as equity and their relative fair-value of $1,531,167 was recognized as a deemed dividend on the Series D Stock during the year ended April 30, 2014. The estimated fair value is determined using the Black-Scholes Option Pricing Model which is based on the value of the underlying common stock at the valuation measurement date, the remaining contractual term of the warrants, risk-free interest rates, expected dividends and expected volatility of the price of the underlying common stock. | |||||||||||||||||||
The Series D Warrant is exercisable beginning on the date of issuance and expires on August 22, 2019. The exercise price and the number of shares issuable upon exercise of Series D Warrant is subject to appropriate adjustment in the event of recapitalization events, stock dividends, stock splits, stock combinations, reclassifications, reorganizations or similar events affecting the Company’s common stock, and also upon any distributions of assets, including cash, stock or other property to the Company’s stockholders. In addition, if stockholder approval for the transaction is obtained, the Series D Warrant will be subject to anti-dilution provisions until such time that for 25 trading days during any 30 consecutive trading day period, the volume weighted average price of the Company’s common stock exceeds $6.50 and the daily dollar trading volume exceeds $350,000 per trading day. | |||||||||||||||||||
On January 30, 2014, the Company entered into an agreement with the OXBT Fund to amend the terms of the outstanding Series D Warrants. The amendment replaced the price protection anti-dilution provision of each warrant with a covenant that the Company will not issue common stock or common stock equivalents at an effective price per share below the exercise price of such warrant without prior written consent, subject to certain exceptions. | |||||||||||||||||||
The Series D Stock and the Series D Warrant were issued and sold without registration under the Securities Act in reliance on the exemptions provided by Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder and in reliance on similar exemptions under applicable state laws. Accordingly, OXBT Fund may exercise the Warrant and sell the Series D Stock and underlying shares only pursuant to an effective registration statement under the Securities Act covering the resale of those securities, an exemption under Rule 144 under the Securities Act or another applicable exemption under the Securities Act. | |||||||||||||||||||
Series C Warrants | |||||||||||||||||||
As part of the offering of Series C Stock, the Company issued 2,753,348 Series C Warrants at an exercise price of $2.60 per share and contractual term of 6 years. In accordance with ASC 815, these warrants are classified as equity and their relative fair-value of $1,867,991 was recognized as a deemed dividend on the Series C Stock during the year ended April 30, 2014. The estimated fair value is determined using the Black-Scholes Option Pricing Model which is based on the value of the underlying common stock at the valuation measurement date, the remaining contractual term of the warrants, risk-free interest rates, expected dividends and expected volatility of the price of the underlying common stock. | |||||||||||||||||||
In connection with the Series C Offering described above, the Company entered into a Placement Agency Agreement (the “Placement Agency Agreement”) with Ladenburg Thalmann & Co. Inc. (the “Placement Agent”) pursuant to which the Placement Agent agreed to act as the Company’s exclusive placement agent for the Series C Offering. In accordance with the Placement Agency Agreement, on July 23, 2013 the Company issued to the Placement Agent warrants to purchase 53,539 shares of common stock at an exercise price of $2.4375 per share and a contractual term of 3 years. In accordance with ASC 815, these warrants are classified as equity and their relative fair-value of $51,231 was recognized as additional paid in capital during the year ended April 30, 2014. The estimated fair value is determined using the Black-Scholes Option Pricing Model which is based on the value of the underlying common stock at the valuation measurement date, the remaining contractual term of the warrants, risk-free interest rates, expected dividends and expected volatility of the price of the underlying common stock. | |||||||||||||||||||
On August 23, 2013, the Company entered into agreements with certain institutional investors to amend the terms of certain outstanding warrants to purchase an aggregate of 2,681,283 shares of the Company’s common stock issued by the Company on February 27, 2013 and July 27, 2013 (collectively, the “Warrant Amendments”). The Warrant Amendments replace the price protection anti-dilution provision of each warrant with a covenant that the Company will not issue common stock or common stock equivalents at an effective price per share below the exercise price of such warrant without prior written consent, subject to certain exceptions. As of April 30, 2014, none of these amended warrants remain outstanding. | |||||||||||||||||||
During the year ended April 30, 2014, the Company received cash of approximately $6.5 million and issued 2,512,825 shares of common stock upon the exercise of outstanding Series C Warrants. As of April 30, 2014, 240,523 Series C Warrants are outstanding. | |||||||||||||||||||
In accordance with ASC 815-40-35-8, the company reassessed the classification of the remaining Series C Warrants. On November 11, 2013, the Company satisfied certain contractual obligations pursuant to the Series C offering which caused certain “down-round” price protection clauses in the outstanding warrants to become effective on that date. In accordance with ASC 815-40-35-9, On November 11, 2013, the Company reclassified these warrants as a current liability and recorded a warrant liability of $1,082,941 which represents the fair market value of the warrants at that date. The initial fair value recorded as warrants within stockholders’ equity of $233,036 was reversed and the change in fair value was recorded as a component of other expense. | |||||||||||||||||||
The estimated fair value is determined using the Monte Carlo Model which is based on the value of the underlying common stock at the valuation measurement date, the remaining contractual term of the warrants, risk-free interest rates, expected dividends, expected volatility of the price of the underlying common stock as well as other estimates and assumptions. | |||||||||||||||||||
As of April 30, 2014, the fair value of the warrant liability was $954,876. The Company recorded a loss of $721,840 for the change in fair value on the consolidated statement of operations for the year ended April 30, 2014. | |||||||||||||||||||
Series B Warrants | |||||||||||||||||||
In connection with the issuance of 2,100 shares of Series B Preferred Stock described above, on February 27, 2013 the Company issued Class A and Class B warrants to purchase an aggregate of 630,000 shares of common stock. The warrants were issued at an initial exercise price equal to $10.00 and were immediately exercisable. The Class A warrants were issued with a six-year term and the Class B warrants were issued with a two-year term. | |||||||||||||||||||
During the year ended April 30, 2014, the Company received proceeds of $567,000 and issued 630,000 shares of common stock upon the exercise of the Series B warrants. As of April 30, 2014, there were no Series B warrants outstanding. | |||||||||||||||||||
Series A Warrants | |||||||||||||||||||
On December 12, 2011, the Company issued warrants to purchase 39,415 shares of common stock as part of the Series A Stock Offering. The warrants were issued at an initial exercise price of $44.40. The Warrants were issued with a six-year term and are exercisable beginning December 12, 2012. In June 2012, the Company issued warrants to purchase 28,154 shares of Common Stock as part of the Series A Stock subsequent closing. The Warrants were issued with a six-year term and are exercisable beginning June 17, 2013. On February 21, 2013, the Company entered into an agreement with the holders of these warrants (the “Warrant Exchange Agreements”) under which all of the outstanding warrants were cancelled in exchange for an aggregate of 20,000 shares of the Company’s common stock and $380,000 in cash pursuant to Section 3(a)(9) under the Securities Act. | |||||||||||||||||||
The following table summarizes the Company’s warrant activity for the year ended April 30, 2014: | |||||||||||||||||||
Warrants | Weighted Average Exercise Price | ||||||||||||||||||
Outstanding at April 30, 2012 | 261,999 | $ | 41.6 | ||||||||||||||||
Issued | 658,154 | 6.69 | |||||||||||||||||
Cancelled | (67,568 | ) | 44.4 | ||||||||||||||||
Forfeited | (93,175 | ) | 38.4 | ||||||||||||||||
Outstanding at April 30, 2013 | 759,410 | $ | 11 | ||||||||||||||||
Issued | 5,165,862 | 2.6 | |||||||||||||||||
Exercised | (3,161,145 | ) | 2.26 | ||||||||||||||||
Forfeited | (1,661 | ) | 126 | ||||||||||||||||
Outstanding at April 30, 2014 | 2,762,466 | $ | 4.28 | ||||||||||||||||
During the year ended April 30, 2014, the Company received approximately $7.1 million and issued 3,161,145 shares of common stock upon the exercise of outstanding warrants. | |||||||||||||||||||
1999 Amended Stock Plan | |||||||||||||||||||
In October 2000, the Company adopted the 1999 Stock Plan, as amended and restated on June 17, 2008 (the “Plan”). Under the Plan, with the approval of the Compensation Committee of the Board of Directors, the Company may grant stock options, restricted stock, stock appreciation rights and new shares of common stock upon exercise of stock options. On September 30, 2011, the Company’s stockholders approved an amendment to the Plan which increased the amount of shares authorized for issuance under the Plan to 300,000, up from 40,000 previously authorized. | |||||||||||||||||||
Pursuant to the Asset Purchase Agreement described in Note D above, the Company agreed to propose that its stockholders approve an amendment to the Company’s 1999 Stock Plan to increase the amount of stock options authorized for issuance under the 1999 Stock Plan to not less than 4,000,000 shares of common stock. On March 13, 2014, at the special meeting of stockholders, the Company’s stockholders approved an amendment to the Plan to increase the number of shares of common stock authorized for issuance under the Plan to 4,000,000 shares of common stock. In accordance with terms of the Acquisition, the Company issued an aggregate of 3,572,880 stock options with a grant date fair value of $15,818,512, to the Chief Executive Officer, the Chief Financial Officer, the Executive Vice President, Business and Commercial Operations and the Executive Vice President, Regulatory Affairs. During the year ended April 30, 2014, the Company recorded approximately $7.9 million of compensation expense for the vested options in its consolidated statements of operations. An additional $7.9 million of compensation expense related to these grants will be recognized as performance vesting conditions are achieved. | |||||||||||||||||||
As of April 30, 2014 the Company had 155,408 shares of common stock available for grant under the Plan. | |||||||||||||||||||
The following table summarizes the shares available for grant under the Plan for the year ended April 30, 2014 and 2013: | |||||||||||||||||||
Shares Available for Grant | |||||||||||||||||||
Balances, at April 30, 2012 | 276,582 | ||||||||||||||||||
Options granted | (1,595 | ) | |||||||||||||||||
Options cancelled/forfeited | 7,851 | ||||||||||||||||||
Restricted stock granted | (5,318 | ) | |||||||||||||||||
Restricted stock cancelled/forfeited | 5,206 | ||||||||||||||||||
Balances, at April 30, 2013 | 282,726 | ||||||||||||||||||
additional shares reserved | 3,600,000 | ||||||||||||||||||
Options granted | (3,637,822 | ) | |||||||||||||||||
Options cancelled/forfeited | 1,300 | ||||||||||||||||||
Restricted stock granted | (135,662 | ) | |||||||||||||||||
Restricted stock cancelled/forfeited | 44,866 | ||||||||||||||||||
Balances, at April 30, 2014 | 155,408 | ||||||||||||||||||
Plan Stock Options | |||||||||||||||||||
Stock options granted under the Plan may be either incentive stock options (“ISOs”), or nonqualified stock options (“NSOs”). ISOs may be granted only to employees. NSOs may be granted to employees, consultants and directors. Stock options under the Plan may be granted with a term of up to ten years and at prices no less than fair market value for ISOs and no less than 85% of the fair market value for NSOs. Stock options granted generally vest over one to three years. | |||||||||||||||||||
The following table summarizes the outstanding stock options under the Plan for the years ended April 30, 2014 and 2013: | |||||||||||||||||||
Outstanding Options | |||||||||||||||||||
Number of Shares | Weighted Average Exercise Price | Aggregate Intrinsic Value | |||||||||||||||||
Balances, at April 30, 2012 | 17,592 | $ | 81.2 | ||||||||||||||||
Options granted | 1,595 | $ | 32.6 | ||||||||||||||||
Options cancelled | (7,851 | ) | $ | 106.4 | |||||||||||||||
Balances, at April 30, 2013 | 11,336 | $ | 57 | ||||||||||||||||
Options granted | 3,637,822 | $ | 5.64 | ||||||||||||||||
Options cancelled | (1,300 | ) | $ | 43.9 | |||||||||||||||
Balances, at April 30, 2014 | 3,647,858 | $ | 5.79 | $ | 8,736 | -1 | |||||||||||||
-1 | Amount represents the difference between the exercise price and $4.88, the closing price of Oxygen Biotherapeutics’ stock on April 30, 2014, as reported on The NASDAQ Capital Market, for all in-the-money options outstanding. | ||||||||||||||||||
The following table summarizes all options outstanding as of April 30, 2014: | |||||||||||||||||||
Options Outstanding at April 30, 2014 | Options Exercisable and Vested at April 30, 2014 | ||||||||||||||||||
Exercise Price | Number of Options | Weighted Average Remaining Contractual Life (Years) | Number of Options | Weighted Average Exercise Price | |||||||||||||||
$ | 1.61 to $5.65 | 3,637,843 | 9.9 | 1,826,145 | $ | 5.63 | |||||||||||||
$ | 14.80 to $59.80 | 6,455 | 7 | 5,979 | $ | 39.82 | |||||||||||||
$ | 60.80 to $102.00 | 2,351 | 4.4 | 2,351 | $ | 80.65 | |||||||||||||
$ | 111.60 to $138.00 | 1,209 | 5.4 | 1,209 | $ | 121.81 | |||||||||||||
3,647,858 | 9.9 | 1,835,684 | $ | 5.91 | |||||||||||||||
The following table summarizes options outstanding that have vested and are expected to vest based on options outstanding as of April 30, 2014: | |||||||||||||||||||
Number of Option Shares | Weighted Average Exercise Price | Aggregate Intrinsic Value (1) | Weighted Average Remaining Contractual Life (Years) | ||||||||||||||||
Vested | 1,835,684 | $ | 5.91 | $ | 8,736 | 9.9 | |||||||||||||
Vested and expected to vest | 3,645,025 | $ | 5.79 | $ | 9,237 | 9.9 | |||||||||||||
-1 | Amount represents the difference between the exercise price and $4.88, the closing price of Oxygen Biotherapeutics’ stock on April 30, 2014, as reported on The NASDAQ Capital Market, for all in-the-money options outstanding. | ||||||||||||||||||
The Company chose the “straight-line” attribution method for allocating compensation costs of each stock option over the requisite service period using the Black-Scholes Option Pricing Model to calculate the grant date fair value. | |||||||||||||||||||
The Company used the following assumptions to estimate the fair value of options granted under its stock option plans for the years ended April 30, 2014 and 2013: | |||||||||||||||||||
For the year ended April 30 | |||||||||||||||||||
2014 | 2013 | ||||||||||||||||||
Risk-free interest rate (weighted average) | 1.8 | % | 1.29 | % | |||||||||||||||
Expected volatility (weighted average) | 98.2 | % | 79.62 | % | |||||||||||||||
Expected term (in years) | 6 | 7 | |||||||||||||||||
Expected dividend yield | 0 | % | 0 | % | |||||||||||||||
Risk-Free Interest Rate | The risk-free interest rate assumption was based on U.S. Treasury instruments with a term that is consistent with the expected term of the Company’s stock options. | ||||||||||||||||||
Expected Volatility | The expected stock price volatility for the Company’s common stock was determined by examining the historical volatility and trading history for its common stock over a term consistent with the expected term of its options. | ||||||||||||||||||
Expected Term | The expected term of stock options represents the weighted average period the stock options are expected to remain outstanding. It was calculated based on the historical experience that the Company has had with its stock option grants. | ||||||||||||||||||
Expected Dividend Yield | The expected dividend yield of 0% is based on the Company’s history and expectation of dividend payouts. The Company has not paid and do not anticipate paying any dividends in the near future. | ||||||||||||||||||
Forfeitures | As stock-based compensation expense recognized in the statement of operations for the years ended April 30, 2014 and 2013 is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures. ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Forfeitures were estimated based on the Company’s historical experience. | ||||||||||||||||||
The weighted-average grant-date fair value of options granted during the years ended April 30, 2014 and 2013 was $5.64 and $32.60, respectively | |||||||||||||||||||
As of April 30, 2014, there were unrecognized compensation costs of approximately $8 million related to non-vested stock option awards granted after May 1, 2004 that will be recognized on a straight-line basis over the weighted average remaining vesting period of 2 years. | |||||||||||||||||||
Restricted Stock Grants | |||||||||||||||||||
The following table summarizes the restricted stock grants under the Plan for the year ended April 30, 2014: | |||||||||||||||||||
Outstanding Restricted Stock Grants | |||||||||||||||||||
Number of Shares | Weighted Average Grant Date Fair Value | ||||||||||||||||||
Balances, at April 30, 2012 | 1,805 | $ | 43.8 | ||||||||||||||||
Restricted stock granted | 5,318 | $ | 35 | ||||||||||||||||
Restricted stock vested | (4,465 | ) | $ | 32.6 | |||||||||||||||
Restricted stock cancelled | (741 | ) | $ | 36.2 | |||||||||||||||
Balances, at April 30, 2013 | 1,917 | $ | 48.4 | ||||||||||||||||
Restricted stock granted | 135,662 | $ | 3 | ||||||||||||||||
Restricted stock vested | (50,235 | ) | $ | 2.3 | |||||||||||||||
Restricted stock cancelled | (31,503 | ) | $ | 1.67 | |||||||||||||||
Restricted stock forfeited | (13,363 | ) | $ | 4.49 | |||||||||||||||
Balances, at April 30, 2014 | 42,478 | $ | 6.39 | ||||||||||||||||
The Company recorded compensation expense for these restricted stock grants of $356,639 and $162,991 for the year ended April 30, 2014 and April 30, 2013, respectively. | |||||||||||||||||||
As of April 30, 2014, there were unrecognized compensation costs of approximately $6,000 related to the non-vested restricted stock grants that will be recognized on a straight-line basis over the remaining vesting period. |
8_RESTRUCTURING_EXPENSE
8. RESTRUCTURING EXPENSE | 12 Months Ended | ||||||||||||
Apr. 30, 2014 | |||||||||||||
Business Combinations [Abstract] | ' | ||||||||||||
8. Restructuring Expense | ' | ||||||||||||
In May 2012, the Company decided to consolidate its operations and relocate its research and development function to North Carolina from Costa Mesa, California. To allow for this transition period, all existing development work had been completed and all of the manufacturing of the Company’s PFC-based products had been transferred to contract manufacturers. As part of these initiatives, the Company terminated all related research and development activities and a workforce reduction was implemented. In September 2012, the Company entered into a sublease agreement with an unrelated third party that extends throughout the remaining term of the existing lease for the vacated facility. | |||||||||||||
The following table summarizes the impact of the work force reductions and other associated costs on operating expenses and payments for the year ended April 30, 2014, and the liability remaining on the balance sheet as of April 30, 2014. | |||||||||||||
Charges Incurred During the Year Ended April 30, 2014 | Amounts Paid Through April 30, 2014 | Amounts Accrued at April 30, 2014 | |||||||||||
Future lease obligations, net of sublease revenue | $ | - | $ | 87,224 | $ | 54,660 | |||||||
The Company recorded all restructuring expenses as operating expenses on the consolidated statement of operations. All restructuring costs were paid by April 30, 2014, with the exception of approximately $55,000 of future lease obligations, net of sublease revenue. |
9_COMMITMENTS_AND_CONTINGENCIE
9. COMMITMENTS AND CONTINGENCIES | 12 Months Ended | ||||
Apr. 30, 2014 | |||||
Commitments and Contingencies Disclosure [Abstract] | ' | ||||
9. COMMITMENTS AND CONTINGENCIES | ' | ||||
Operating Leases | |||||
The Company leases its office space under an operating lease that includes fixed annual increases and expires in February 2016. Total rent expense was $107,946 and $151,125 for the years ended April 30, 2014 and 2013, respectively. | |||||
The future minimum payments for the long-term, non-cancelable lease are as follows: | |||||
Year ending April 30, | |||||
2015 | 111,171 | ||||
2016 | 94,917 | ||||
$ | 206,088 | ||||
Simdax license agreement | |||||
As further discussed in Note D above, on November 13, 2013 the Company acquired the License which granted it an exclusive, sublicenseable right to develop and commercialize pharmaceutical products containing Levosimedan in the United States and Canada. Pursuant to the License, the Company must use Orion’s “Simdax®” trademark to commercialize the Product. The License also grants to the Company a right of first refusal to commercialize new developments of the Product, including developments as to the formulation, presentation, means of delivery, route of administration, dosage or indication. Orion’s ongoing role under the License includes sublicense approval, serving as the sole source of manufacture, holding a first right to enforce intellectual property rights in the Territory, and certain regulatory participation rights. Additionally, the Company must grant back to Orion a broad non-exclusive license to any patents or clinical trial data related to the Product developed by the Company under the License. The License has a fifteen (15) year term, provided, however, that the License will continue after the end of the fifteen year term in each country in the Territory until the expiration of Orion’s patent rights in the Product in such country. Orion may terminate the License if the Study is not started by July 31, 2014. | |||||
The License includes the following development milestones for which the Company shall make non-refundable payments to Orion no later than twenty-eight (28) days after the occurrence of the applicable milestone event: (i) $2.0 million upon the grant of FDA approval, including all registrations, licenses, authorizations and necessary approvals, to develop and/or commercialize the Product in the United States; and (ii) $1.0 million upon the grant of regulatory approval for the Product in Canada. Once commercialized, the Company is obligated to make certain non-refundable commercialization milestone payments to Orion, aggregating up to $13.0 million, contingent upon achievement of certain cumulative net sales amounts in the Territory. The Company must also pay Orion tiered royalties based on net sales of the Product in the Territory made by the Company and its sublicensees. After the end of the Term, the Company must pay Orion a royalty based on net sales of the Product in the Territory for as long as Life Newco sells the Product in the Territory. | |||||
As of April 30, 2014, the Company has not met any of the developmental milestones and, accordingly, has not recorded any liability for the contingent payments due to Orion. | |||||
Agreement with Virginia Commonwealth University | |||||
In May 2008 the Company entered into a license agreement with Virginia Commonwealth University (“Licensor”, “VCU”) whereby it obtained a worldwide, exclusive license to valid claims under three of the Licensor's patent applications that relate to methods for non-pulmonary delivery of oxygen to tissue and the products based on those valid claims used or useful for therapeutic and diagnostic applications in humans and animals. The license includes the right to sub-license to third parties. The term of the agreement is the life of the patents covered by the patent applications unless the Company elects to terminate the agreement prior to patent expiration. Under the agreement the Company has an obligation to diligently pursue product development and pursue, at its own expense, prosecution of the patent applications covered by the agreement. As part of the agreement, the Company is required to pay to VCU nonrefundable payments upon achieving development and regulatory milestones. As of April 30, 2014, the Company has not met any of the developmental milestones. | |||||
The agreement with VCU also requires the Company to pay royalties to VCU at specified rates based on annual net sales derived from the licensed technology. Pursuant to the agreement, the Company must make minimum annual royalty payments to VCU totaling $70,000 as long as the agreement is in force. These payments are fully creditable against royalty payments due for sales and sublicense revenue earned during the fiscal year as described above. This fee is recorded as an other current asset and is amortized over the fiscal year. Amortization expense was $70,000 for each of the years ended April 30, 2014 and 2013. | |||||
Litigation | |||||
The Company is subject to litigation in the normal course of business, none of which management believes will have a material adverse effect on the Company’s Consolidated Financial Statements. | |||||
10_401k_BENEFIT_PLAN
10. 401(k) BENEFIT PLAN | 12 Months Ended |
Apr. 30, 2014 | |
Compensation and Retirement Disclosure [Abstract] | ' |
10. 401(k) BENEFIT PLAN | ' |
The Company sponsors a 401(k) Retirement Savings Plan (the “401(k) Plan”) for all eligible employees. Full-time employees over the age of 18 are eligible to participate in the 401(k) Plan after 90 days of continuous employment. Participants may elect to defer earnings into the 401(k) Plan up to the annual IRS limits and the Company provides a matching contribution up to 5% of the participants’ annual salary in accordance with the 401(k) Plan documents. The 401(k) Plan is managed by a third-party trustee. For the periods ended April 30, 2014 and 2013, the Company recorded $47,087 and $46,847 respectively, for matching contributions expense. |
11_INCOME_TAXES
11. INCOME TAXES | 12 Months Ended | ||||||||
Apr. 30, 2014 | |||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||
11. INCOME TAXES | ' | ||||||||
The Company has not recorded any income tax expense or benefit for the periods ended April 30, 2014 and 2013 due to its history of net operating losses. | |||||||||
The reconciliations of income tax expenses (benefit) at the statutory federal income tax rate of 34% for the periods ended April 30, 2014 and 2013 are as follows: | |||||||||
2014 | 2013 | ||||||||
U.S. federal taxes (benefit) at statutory rate | $ | (6,644,225 | ) | $ | (3,201,372 | ) | |||
State income tax benefit, net of federal benefit | (765,026 | ) | (356,452 | ) | |||||
Stock compensation | 3,099,270 | ||||||||
Nondeductible interest | 827,284 | 1,592,027 | |||||||
Other nondeductible | 292,355 | 47,652 | |||||||
Other, including effect of tax rate brackets | 53,621 | 132,806 | |||||||
Change in state tax rate | (8,377 | ) | - | ||||||
Change in valuation allowance | 3,145,098 | 1,785,339 | |||||||
$ | - | $ | - | ||||||
The tax effects of temporary differences and carry forwards that give rise to significant portions of the deferred tax assets are as follows: | |||||||||
Deferred Tax Assets | 2014 | 2013 | |||||||
Net operating Loss Carryforwards | $ | 30,748,100 | $ | 27,446,605 | |||||
Accruals and other | 230,900 | 336,631 | |||||||
Depreciation and amortization | - | 16,766 | |||||||
Net deferred tax assets | 30,979,000 | 27,800,002 | |||||||
Deferred Tax Liabilities | |||||||||
IPR&D | (7,962,100 | ) | - | ||||||
Other liabilities | (33,900 | ) | - | ||||||
Valuation allowance | (30,945,100 | ) | (27,800,002 | ) | |||||
Net Deferred Tax Liabilities | $ | (7,962,100 | ) | $ | - | ||||
The Company has established a valuation allowance against net deferred tax assets due to the uncertainty that such assets will be realized. The Company periodically evaluates the recoverability of the deferred tax assets. At such time that it is determined that it is more likely than not that deferred tax assets will be realizable, the valuation allowance will be reduced. | |||||||||
As of April 30, 2014, the Company had Federal and State net operating loss carryforwards of approximately $82.8 million and $65.9 million available to offset future federal and state taxable income, respectively. The federal net operating loss carryforwards began to expire in 2012 and the state net operating loss carryforwards begin to expire in 2023 respectively and valuation allowances have been provided. | |||||||||
Utilization of the net operating loss carryforwards may be subject to an annual limitation due to the ownership percentage change limitations provided by the Internal Revenue Code of 1986 and similar state provisions. The annual limitations may result in the expiration of the net operating losses before utilization. | |||||||||
Management has evaluated all other tax positions that could have a significant effect on the Consolidated Financial Statements and determined the Company had no uncertain income tax positions at April 30, 2014. | |||||||||
The Company files U.S. and state income tax returns with varying statutes of limitations. The tax years 1999 and forward remain open to examination due to the carryover of unused net operating losses or tax credits. |
12_SUBSEQUENT_EVENTS
12. SUBSEQUENT EVENTS | 12 Months Ended |
Apr. 30, 2014 | |
Subsequent Events [Abstract] | ' |
12. SUBSEQUENT EVENTS | ' |
On June 25, 2014, the Company made a payment of $300,000 to the holder of the Convertible Note for the principal balance due June 29, 2014. In addition, the Company issued 255 shares of unregistered common stock for payment of $11,500 for accrued interest payable. |
2_SUMMARY_OF_SIGNIFICANT_ACCOU1
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended | ||||||||||||||||
Apr. 30, 2014 | |||||||||||||||||
Accounting Policies [Abstract] | ' | ||||||||||||||||
Use of Estimates | ' | ||||||||||||||||
Use of Estimates | |||||||||||||||||
The preparation of the accompanying consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of expenses during the reporting period. Actual results could differ from those estimates. | |||||||||||||||||
On an ongoing basis, management reviews its estimates to ensure that these estimates appropriately reflect changes in the Company’s business and new information as it becomes available. If historical experience and other factors used by management to make these estimates do not reasonably reflect future activity, the Company’s results of operations and financial position could be materially impacted. | |||||||||||||||||
Principles of Consolidation | ' | ||||||||||||||||
The accompanying consolidated financial statements include the accounts and transactions of Oxygen Biotherapeutics, Inc. and Life Newco, Inc. All material intercompany transactions and balances have been eliminated in consolidation. | |||||||||||||||||
Goodwill | ' | ||||||||||||||||
Acquired businesses are accounted for using the acquisition method of accounting, which requires that assets acquired, including identifiable intangible assets, and liabilities assumed be recorded at fair value, with limited exceptions. Any excess of the purchase price over the fair value of the net assets acquired is recorded as goodwill. If the acquired net assets do not constitute a business, the transaction is accounted for as an asset acquisition and no goodwill is recognized. | |||||||||||||||||
Goodwill is reviewed for impairment on an annual basis or more frequently if events or circumstances indicate potential impairment. The Company’s goodwill evaluation is based on both qualitative and quantitative assessments regarding the fair value of goodwill relative to its carrying value. The Company assesses qualitative factors to determine if its sole reporting unit’s fair value is more likely than not to exceed its carrying value, including goodwill. In the event the Company determines that it is more likely than not that its reporting unit’s fair value is less than its carrying amount, quantitative testing is performed comparing recorded values to estimated fair values. If the fair value exceeds the carrying value, goodwill is not impaired. If the carrying value exceeds the fair value, an impairment charge is recognized through a charge to operations based upon the excess of the carrying value of goodwill over the implied fair value. There was no impairment to goodwill recognized during 2014. | |||||||||||||||||
Cash and Cash Equivalents | ' | ||||||||||||||||
The Company considers all highly liquid instruments with a maturity date of three months or less, when acquired, to be cash equivalents. | |||||||||||||||||
Cash Concentration Risk | ' | ||||||||||||||||
On July 21, 2010, the Wall Street Reform and Consumer Protection Act permanently increased the FDIC insurance limits to $250,000 per depositor per insured bank. At April 30, 2014, the Company had $58,038,597 of cash balances uninsured by the FDIC. | |||||||||||||||||
Liquidity and Capital Resources | ' | ||||||||||||||||
We have financed our operations since September 1990 through the issuance of debt and equity securities and loans from stockholders. We had $58,966,033 and $1,842,251 total current assets and working capital (deficit) of $56,394,986 and $(67,326) as of April 30, 2014 and April 30, 2013, respectively. Our practice is to invest excess cash, where available, in short-term money market investment instruments. | |||||||||||||||||
Cash resources as of April 30, 2014 were approximately $58.3 million, compared to approximately $784,000 as of April 30, 2013. Based on its resources at April 30, 2014, and the current plan of expenditure on continuing development of the Company’s current product candidates, the Company believes that it has sufficient capital to fund its operations through the fiscal year ending April 30, 2017. However, the Company will need substantial additional financing in order to fund its operations beyond such period and thereafter until it can achieve profitability, if ever. The Company depends on its ability to raise additional funds through various potential sources, such as equity and debt financing, or to license its product candidates to another pharmaceutical company. The Company will continue to fund operations from cash on hand and through sources of capital similar to those previously described. The Company cannot assure that it will be able to secure such additional financing, or if available, that it will be sufficient to meet its needs. | |||||||||||||||||
To the extent that the Company raises additional funds by issuing shares of its common stock or other securities convertible or exchangeable for shares of common stock, stockholders will experience dilution, which may be significant. In the event the Company raises additional capital through debt financings, the Company may incur significant interest expense and become subject to covenants in the related transaction documentation that may affect the manner in which the Company conducts its business. To the extent that the Company raises additional funds through collaboration and licensing arrangements, it may be necessary to relinquish some rights to its technologies or product candidates, or grant licenses on terms that may not be favorable to the Company. Any or all of the foregoing may have a material adverse effect on the Company’s business and financial performance. | |||||||||||||||||
Deferred financing costs | ' | ||||||||||||||||
Deferred financing costs represent legal, due diligence and other direct costs incurred to raise capital or obtain debt. Direct costs include only “out-of-pocket” or incremental costs directly related to the effort, such as a finder’s fee and accounting and legal fees. These costs will be capitalized if the efforts are successful, or expensed when unsuccessful. Indirect costs are expensed as incurred. Deferred financing costs related to debt are amortized over the life of the debt. Deferred financing costs related to issuing equity are charged to Additional Paid-in Capital. | |||||||||||||||||
Derivative financial instruments | ' | ||||||||||||||||
The Company does not use derivative instruments to hedge exposures to cash flow, market or foreign currency risk. Terms of convertible promissory note instruments and other convertible equity instruments are reviewed to determine whether or not they contain embedded derivative instruments that are required under FASB ASC 815, Derivatives and Hedging (“ASC 815”) to be accounted for separately from the host contract, and recorded on the balance sheet at fair value. The fair value of derivative liabilities, if any, is required to be revalued at each reporting date, with corresponding changes in fair value recorded in current period operating results. | |||||||||||||||||
Freestanding warrants issued by the Company in connection with the issuance or sale of debt and equity instruments are considered to be derivative instruments, and are evaluated and accounted for in accordance with the provisions of ASC 815. Pursuant to ASC 815, an evaluation of specifically identified conditions is made to determine whether the fair value of warrants issued is required to be classified as equity or as a derivative liability. | |||||||||||||||||
In February 2013, the Company issued warrants to purchase an aggregate of 630,000 shares of Common Stock as part of the Series B Preferred stock offering. In accordance with ASC 815, these warrants are classified as equity and their calculated fair-value was considered as a discount on the preferred shares and $958,057 was recognized as a deemed dividend on the Series B Preferred Stock during the year ended April 30, 2014. | |||||||||||||||||
In June 2012, the Company issued warrants to purchase 28,154 shares of Common Stock as part of the Series A Preferred Stock offering. In accordance with ASC 815, these warrants are classified as equity and their calculated fair value of $656,535 was recognized as a discount on the related preferred stock in the current period. | |||||||||||||||||
In December 2011, the Company issued warrants to purchase 39,415 shares of Common Stock as part of the Series A Preferred Stock offering. In accordance with ASC 815, these warrants are classified as equity and their calculated fair value of $1,170,311 was recognized as a discount on the related preferred stock during the year ended April 30, 2013. | |||||||||||||||||
Beneficial conversion and warrant valuation | ' | ||||||||||||||||
In accordance with FASB ASC 470-20, Debt with Conversion and Other Options, the Company records a beneficial conversion feature (“BCF”) related to the issuance of convertible debt that have conversion features at fixed rates that are in-the-money when issued and the fair value of warrants issued in connection with those instruments. The BCF for the convertible instruments is recognized and measured by allocating a portion of the proceeds to warrants, based on their relative fair value, and as a reduction to the carrying amount of the convertible debt equal to the intrinsic value of the conversion feature. As described in Note F, the discount recorded in connection with the BCF and warrant valuation is recognized as non-cash interest expense and is amortized over the life of the convertible note. | |||||||||||||||||
Preclinical Study and Clinical Accruals | ' | ||||||||||||||||
The Company estimates its preclinical study and clinical trial expenses based on the services received pursuant to contracts with several research institutions and contract research organizations (“CROs”) that conduct and manage preclinical and clinical trials on its behalf. The financial terms of the agreements vary from contract to contract and may result in uneven expenses and payment flows. Preclinical study and clinical trial expenses include the following: | |||||||||||||||||
- | Fees paid to CROs in connection with clinical trials, | ||||||||||||||||
- | Fees paid to research institutions in conjunction with preclinical research studies, and | ||||||||||||||||
- | Fees paid to contract manufacturers and service providers in connection with the production and testing of active pharmaceutical ingredients and drug materials for use in preclinical studies and clinical trials. | ||||||||||||||||
Property and Equipment, Net | ' | ||||||||||||||||
Property and equipment are stated at cost, subject to adjustments for impairment, less accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method over the following estimated useful lives: | |||||||||||||||||
Laboratory equipment | 3 – 5 years | ||||||||||||||||
Office equipment | 5 years | ||||||||||||||||
Office furniture and fixtures | 7 years | ||||||||||||||||
Computer equipment and software | 3 years | ||||||||||||||||
Leasehold improvements | Shorter of useful life or remaining lease term | ||||||||||||||||
Maintenance and repairs are charged to expense as incurred, improvements to leased facilities and equipment are capitalized. | |||||||||||||||||
Impairment of Long-Lived Assets | ' | ||||||||||||||||
The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. | |||||||||||||||||
Revenue Recognition | ' | ||||||||||||||||
Revenues from merchandise sales are recognized upon transfer of ownership, including passage of title to the customer and transfer of the risk of loss related to those goods. Revenues are reported on a net sales basis, which is computed by deducting from gross sales the amount of actual product returns received, discounts, incentive arrangements with retailers and an amount established for anticipated product returns. The Company's practice is to accept product returns from retailers only if properly requested, authorized and approved. As a percentage of gross sales, returns were less than 5% in fiscal years 2014 and 2013. | |||||||||||||||||
Revenues from a cost-reimbursement grant sponsored by the United States Army, or Grant Revenue, are recognized as milestones under the Grant program are achieved. Grant Revenue is earned through reimbursements for the direct costs of labor, travel, and supplies, as well as the pass-through costs of subcontracts with third-party CROs. | |||||||||||||||||
Research and Development Costs | ' | ||||||||||||||||
Research and development costs include, but are not limited to, (i) expenses incurred under agreements with contract research organizations and investigative sites, which conduct our clinical trials and a substantial portion of our preclinical studies; (ii) the cost of manufacturing and supplying clinical trial materials; (iii) payments to contract service organizations, as well as consultants; (iv) employee-related expenses, which include salaries and benefits; and (v) facilities, depreciation and other allocated expenses, which include direct and allocated expenses for rent and maintenance of facilities and equipment, depreciation of leasehold improvements and equipment and laboratory and other supplies. All research and development expenses are expensed as incurred. | |||||||||||||||||
Income Taxes | ' | ||||||||||||||||
Deferred tax assets and liabilities are recorded for differences between the financial statement and tax bases of the assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense is recorded for the amount of income tax payable or refundable for the period increased or decreased by the change in deferred tax assets and liabilities during the period. | |||||||||||||||||
Stock-Based Compensation | ' | ||||||||||||||||
The Company accounts for stock based compensation in accordance with ASC 718 Compensation — Stock Compensation, which requires the measurement and recognition of compensation expense for all stock-based payment awards granted, modified and settled to our employees and directors. The Company chose the “straight-line” attribution method for allocating compensation costs of each stock option on a straight-line basis over the requisite service period using the Black-Scholes Option Pricing Model to calculate the grant date fair value. | |||||||||||||||||
Loss per Share | ' | ||||||||||||||||
Basic loss per share, which excludes antidilutive securities, is computed by dividing loss available to common shareholders by the weighted-average number of common shares outstanding for that particular period. In contrast, diluted loss per share considers the potential dilution that could occur from other equity instruments that would increase the total number of outstanding shares of common stock. Such amounts include shares potentially issuable under outstanding options, warrants and convertible debentures. A reconciliation of the numerator and denominator used in the calculation of basic and diluted net loss per share follows. | |||||||||||||||||
Year ended April 30, | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Historical net loss per share: | |||||||||||||||||
Numerator | |||||||||||||||||
Net loss, attributable to common stockholders | $ | (25,345,201 | ) | $ | (10,373,871 | ) | |||||||||||
Less: Effect of amortization of interest expense on convertible notes | - | (1,382,537 | ) | ||||||||||||||
Net loss attributable to common stockholders (diluted) | (25,345,201 | ) | (11,756,408 | ) | |||||||||||||
Denominator | |||||||||||||||||
Weighted-average common shares outstanding | 9,362,031 | 1,650,280 | |||||||||||||||
Effect of dilutive securities | - | 108,745 | |||||||||||||||
Denominator for diluted net loss per share | 9,362,031 | 1,759,025 | |||||||||||||||
Basic net loss per share | $ | (2.71 | ) | $ | (6.29 | ) | |||||||||||
Diluted net loss per share | $ | (2.71 | ) | $ | (6.68 | ) | |||||||||||
The following outstanding options, convertible note shares and warrants were excluded from the computation of basic and diluted net loss per share for the periods presented because including them would have had an anti-dilutive effect. | |||||||||||||||||
Year ended April 30, | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Options to purchase common stock | 3,647,858 | 11,336 | |||||||||||||||
Warrants to purchase common stock | 2,762,466 | 759,410 | |||||||||||||||
Restricted stock grants | 42,478 | 1,917 | |||||||||||||||
Convertible note shares outstanding | 6,652 | 98 | |||||||||||||||
Convertible preferred shares outstanding | - | 97,400 | |||||||||||||||
Operating Leases | ' | ||||||||||||||||
The Company maintains operating leases for its office and laboratory facilities. The lease agreements may include rent escalation clauses and tenant improvement allowances. The Company recognizes scheduled rent increases on a straight-line basis over the lease term beginning with the date the company takes possession of the leased space. Differences between rental expense and actual rental payments are recorded as deferred rent liabilities and are included in “Other liabilities” on the balance sheets. | |||||||||||||||||
Fair Value | ' | ||||||||||||||||
Fair Value | |||||||||||||||||
The Company records its financial assets and liabilities in accordance with ASC 820 Fair Value Measurements. The Company's consolidated balance sheet includes the following financial instruments: cash and cash equivalents, short-term notes payable, convertible preferred stock and convertible notes. The Company considers the carrying amount of its cash and cash equivalents and short-term notes payable to approximate fair value due to the short-term nature of these instruments. The Company did not elect the fair value option and records the carrying value of its convertible notes at amortized cost in accordance with ASC 470-20. | |||||||||||||||||
Accounting for fair value measurements involves a single definition of fair value, along with a conceptual framework to measure fair value, with a fair value defined as "the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date." The fair value measurement hierarchy consists of three levels: | |||||||||||||||||
Level one | Quoted market prices in active markets for identical assets or liabilities; | ||||||||||||||||
Level two | Inputs other than level one inputs that are either directly or indirectly observable, and | ||||||||||||||||
Level three | Unobservable inputs developed using estimates and assumptions; which are developed by the reporting entity and reflect those assumptions that a market participant would use. | ||||||||||||||||
The Company applies valuation techniques that (1) place greater reliance on observable inputs and less reliance on unobservable inputs and (2) are consistent with the market approach, the income approach and/or the cost approach, and include enhanced disclosures of fair value measurements in its Consolidated Financial Statements. | |||||||||||||||||
The following tables show information regarding assets and liabilities measured at fair value on a recurring basis as of April 30, 2014 and 2013: | |||||||||||||||||
Fair Value Measurements at Reporting Date Using | |||||||||||||||||
Balance as of April 30, 2014 | Quoted prices in Active Markets for Identical Securities (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||
Current Assets | |||||||||||||||||
Cash and cash equivalents | $ | 58,320,555 | $ | 58,320,555 | $ | - | $ | - | |||||||||
Current Liabilities | |||||||||||||||||
Warrant liabilities | $ | 954,876 | $ | - | $ | - | $ | 954,876 | |||||||||
Fair Value Measurements at Reporting Date Using | |||||||||||||||||
Balance as of April 30, 2013 | Quoted prices in Active Markets for Identical Securities (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||
Current Assets | |||||||||||||||||
Cash and cash equivalents | $ | 783,528 | $ | 783,528 | $ | - | $ | - | |||||||||
Current Liabilities | |||||||||||||||||
Warrant liabilities | $ | - | $ | - | $ | - | $ | - | |||||||||
There were no significant transfers between levels in the years ended April 30 2014 and 2013. The Warrant liabilities are recorded at fair value with changes in fair value recorded as gains or losses within other expense (income). | |||||||||||||||||
Financial assets or liabilities are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable. | |||||||||||||||||
As further discussed in Note G below, on July 23, 2013, the Company issued common stock warrants (the “Series C Warrants”) in connection with the issuance of Series C 8% Convertible Preferred Stock (the “Series C Stock”). The Series C warrants are measured using the Monte Carlo valuation model which is based, in part, upon inputs for which there is little or no observable market data, requiring the Company to develop its own assumptions. The assumptions used in calculating the estimated fair value of the warrants represent the Company’s best estimates; however, these estimates involve inherent uncertainties and the application of management judgment. As a result, if factors change and different assumptions are used, the warrant liabilities and the change in estimated fair value of the warrants could be materially different. | |||||||||||||||||
Inherent in the Monte Carlo valuation model are assumptions related to expected stock-price volatility, expected life, risk-free interest rate and dividend yield. The Company estimates the volatility of its common stock based on historical volatility that matches the expected remaining life of the warrants. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected remaining life of the warrants. The expected life of the warrants is assumed to be equivalent to their remaining contractual term. The dividend rate is based on the historical rate, which the Company anticipates to remain at zero. | |||||||||||||||||
The Monte Carlo model is used for the Series C warrants to appropriately value the potential future exercise price adjustments triggered by the anti-dilution provisions. This requires Level 3 inputs which are based on the Company’s estimates of the probability and timing of potential future financings and fundamental transactions. The other assumptions used by the Company are summarized in the following table for the Series C warrants that were outstanding as of April 30, 2014; no Series C warrants were outstanding as of April 30, 2013: | |||||||||||||||||
Series C Warrants | April 30, | April 30, | |||||||||||||||
2014 | 2013 | ||||||||||||||||
Closing stock price | $ | 4.88 | $ | - | |||||||||||||
Expected dividend rate | 0 | % | - | % | |||||||||||||
Expected stock price volatility | 90.32 | % | - | % | |||||||||||||
Risk-free interest rate | 1.75 | % | - | % | |||||||||||||
Expected life (years) | 5.23 | - | |||||||||||||||
Recent Accounting Pronouncements | ' | ||||||||||||||||
Recent Accounting Pronouncements | |||||||||||||||||
In June 2014, the FASB issued Accounting Standards Update (“ASU”) 2014-10, Development Stage Entities (Topic 915). The objective of the amendments in this update is to improve financial reporting by reducing the cost and complexity associated with the incremental reporting requirements for development stage entities. Users of financial statements of development stage entities told the Board that the development stage entity distinction, the inception-to-date information, and certain other disclosures currently required under U.S. GAAP in the financial statements of development stage entities provide information that has limited relevance and is generally not decision useful. As a result, the amendments in this update remove all incremental financial reporting requirements from US GAAP for development stage entities, thereby improving financial reporting by eliminating the cost and complexity associated with providing that information. The amendments are effective for annual reporting periods beginning after December 15, 2014, and interim reporting periods beginning after December 15, 2015. Early adoption is permitted. The Company has elected to early adopt this guidance, and therefore is no longer presenting the financial statements in accordance with ASU 915, with inception to date disclosures. | |||||||||||||||||
In May 2014, the FASB issued Accounting Standard Update 2014-09, Revenue from Contracts with Customers (ASU 2014-09) providing a comprehensive new revenue recognition standard. ASU 2014-09 provides revised standards of recognition predicated on when an entity transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 is effective for us in our first quarter of fiscal 2018. ASU 2014-09 can be applied retrospectively with a modified retrospective application permitted. We are currently evaluating the impact of our pending adoption of ASU 2014-09 on our consolidated financial statements. | |||||||||||||||||
In July 2013, the FASB issued ASU No. 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. ASU No. 2013-11 requires entities to present in the consolidated financial statements an unrecognized tax benefit, or a portion of an unrecognized tax benefit as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward except to the extent such items are not available or not intended to be used at the reporting date to settle any additional income taxes that would result from the disallowance of a tax position. In such instances, the unrecognized tax benefit is required to be presented in the consolidated financial statements as a liability and not be combined with deferred tax assets. This guidance is effective prospectively for fiscal years, and interim periods within those years, beginning after December 15, 2013. The adoption of ASU 2013-11 did not have a material impact on the Company’s consolidated financial statements. |
2_SUMMARY_OF_SIGNIFICANT_ACCOU2
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended | ||||||||||||||||
Apr. 30, 2014 | |||||||||||||||||
Accounting Policies [Abstract] | ' | ||||||||||||||||
Historical Net Loss | ' | ||||||||||||||||
Year ended April 30, | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Historical net loss per share: | |||||||||||||||||
Numerator | |||||||||||||||||
Net loss, attributable to common stockholders | $ | (25,345,201 | ) | $ | (10,373,871 | ) | |||||||||||
Less: Effect of amortization of interest expense on convertible notes | - | (1,382,537 | ) | ||||||||||||||
Net loss attributable to common stockholders (diluted) | (25,345,201 | ) | (11,756,408 | ) | |||||||||||||
Denominator | |||||||||||||||||
Weighted-average common shares outstanding | 9,362,031 | 1,650,280 | |||||||||||||||
Effect of dilutive securities | - | 108,745 | |||||||||||||||
Denominator for diluted net loss per share | 9,362,031 | 1,759,025 | |||||||||||||||
Basic net loss per share | $ | (2.71 | ) | $ | (6.29 | ) | |||||||||||
Diluted net loss per share | $ | (2.71 | ) | $ | (6.68 | ) | |||||||||||
Anti-dilutive securities | ' | ||||||||||||||||
Year ended April 30, | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Options to purchase common stock | 3,647,858 | 11,336 | |||||||||||||||
Warrants to purchase common stock | 2,762,466 | 759,410 | |||||||||||||||
Restricted stock grants | 42,478 | 1,917 | |||||||||||||||
Convertible note shares outstanding | 6,652 | 98 | |||||||||||||||
Convertible preferred shares outstanding | - | 97,400 | |||||||||||||||
Fair Value Measurements | ' | ||||||||||||||||
Fair Value Measurements at Reporting Date Using | |||||||||||||||||
Balance as of April 30, 2014 | Quoted prices in Active Markets for Identical Securities (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||
Current Assets | |||||||||||||||||
Cash and cash equivalents | $ | 58,320,555 | $ | 58,320,555 | $ | - | $ | - | |||||||||
Current Liabilities | |||||||||||||||||
Warrant liabilities | $ | 954,876 | $ | - | $ | - | $ | 954,876 | |||||||||
Fair Value Measurements at Reporting Date Using | |||||||||||||||||
Balance as of April 30, 2013 | Quoted prices in Active Markets for Identical Securities (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||
Current Assets | |||||||||||||||||
Cash and cash equivalents | $ | 783,528 | $ | 783,528 | $ | - | $ | - | |||||||||
Current Liabilities | |||||||||||||||||
Warrant liabilities | $ | - | $ | - | $ | - | $ | - | |||||||||
Convertible Preferred Stock | ' | ||||||||||||||||
Series C Warrants | April 30, | April 30, | |||||||||||||||
2014 | 2013 | ||||||||||||||||
Closing stock price | $ | 4.88 | $ | - | |||||||||||||
Expected dividend rate | 0 | % | - | % | |||||||||||||
Expected stock price volatility | 90.32 | % | - | % | |||||||||||||
Risk-free interest rate | 1.75 | % | - | % | |||||||||||||
Expected life (years) | 5.23 | - |
3_BALANCE_SHEET_COMPONENTS_Tab
3. BALANCE SHEET COMPONENTS (Tables) | 12 Months Ended | ||||||||
Apr. 30, 2014 | |||||||||
Notes to Financial Statements | ' | ||||||||
Inventory | ' | ||||||||
April 30, | April 30, | ||||||||
2014 | 2013 | ||||||||
Raw materials | $ | - | $ | 28,779 | |||||
Finished goods | - | 70,425 | |||||||
$ | - | $ | 99,204 | ||||||
Other current assets | ' | ||||||||
April 30, | April 30, | ||||||||
2014 | 2013 | ||||||||
R&D materials | $ | 177,406 | $ | 159,892 | |||||
Other | - | 7,090 | |||||||
Dermacyte samples | - | 3,428 | |||||||
$ | 177,406 | $ | 170,410 | ||||||
Property Plant and Equipment | ' | ||||||||
April 30, | April 30, | ||||||||
2014 | 2013 | ||||||||
Laboratory equipment | $ | 683,632 | $ | 768,252 | |||||
Computer equipment and software | 142,380 | 135,697 | |||||||
Office furniture and fixtures | 130,192 | 130,192 | |||||||
956,204 | 1,034,141 | ||||||||
Less: Accumulated depreciation and amortization | (831,830 | ) | (828,752 | ) | |||||
$ | 124,374 | $ | 205,389 | ||||||
Accrued Liabilities | ' | ||||||||
April 30, | April 30, | ||||||||
2014 | 2013 | ||||||||
Employee related | $ | 609,130 | $ | 66,632 | |||||
Deferred revenue | 124,521 | 185,068 | |||||||
Operating costs | 76,632 | 19,865 | |||||||
Restructuring liability | 43,728 | 43,728 | |||||||
Convertible note interest payable | 4,125 | 59,583 | |||||||
Accrued settlement costs | - | 500,000 | |||||||
$ | 858,136 | $ | 874,876 | ||||||
Other liabilities | ' | ||||||||
April 30, | April 30, | ||||||||
2014 | 2013 | ||||||||
Net non-cancelable operating lease obligation | $ | 54,660 | $ | 98,388 | |||||
Less: current portion | (43,728 | ) | (43,728 | ) | |||||
Long-term portion of net non-cancelable operating lease obligation | $ | 10,932 | $ | 54,660 |
4_ACQUISITION_Tables
4. ACQUISITION (Tables) | 12 Months Ended | ||||||||||||
Apr. 30, 2014 | |||||||||||||
Acquisition Tables | ' | ||||||||||||
Fair Value of Consideration Transferred | ' | ||||||||||||
Common stock | 8,747,802 | ||||||||||||
Series E convertible preferred stock | 15,299,198 | ||||||||||||
Total | 24,047,000 | ||||||||||||
Recognized amounts of identifiable assets acquired and liabilities assumed | ' | ||||||||||||
November 13, | Measurement | November 13, | |||||||||||
2013 | 2013 | ||||||||||||
(As initially reported) | Period Adjustments (1) | (As adjusted) | |||||||||||
IPR&D | $ | 22,000,000 | $ | - | $ | 22,000,000 | |||||||
Trade and other payables | (256,000 | ) | - | (256,000 | ) | ||||||||
Liabilities arising from a contingency | (1,000,000 | ) | - | (1,000,000 | ) | ||||||||
Deferred tax liability related to intangibles acquired | - | (7,962,100 | ) | (7,962,100 | ) | ||||||||
Total identifiable net assets | 20,744,000 | (7,962,100 | ) | 12,781,900 | |||||||||
Goodwill | 3,303,000 | 7,962,100 | 11,265,100 | ||||||||||
Total fair value of consideration | $ | 24,047,000 | $ | - | $ | 24,047,000 | |||||||
Schedule of acquisition | ' | ||||||||||||
Year ended April 30, | |||||||||||||
2014 | 2013 | ||||||||||||
Total net revenue | 158,926 | 1,190,928 | |||||||||||
Net loss | $ | 19,560,030 | $ | 9,418,395 | |||||||||
Net loss attributable to common stockholders | $ | 25,363,392 | $ | 10,376,466 | |||||||||
Net loss per share, basic | $ | (2.37 | ) | $ | (3.44 | ) | |||||||
Weighted average number of common shares outstanding, basic | 10,717,037 | 3,017,124 | |||||||||||
Net loss per share, diluted | $ | (2.37 | ) | $ | (3.76 | ) | |||||||
Weighted average number of common shares outstanding, diluted | 10,717,037 | 3,125,869 |
5_INTANGIBLE_ASSETS_Tables
5. INTANGIBLE ASSETS (Tables) | 12 Months Ended | |||||||||||||||||||
Apr. 30, 2014 | ||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | |||||||||||||||||||
Intangible Assets | ' | |||||||||||||||||||
The following table summarizes our intangible assets as of April 30, 2014: | ||||||||||||||||||||
Asset Category | Value Assigned | Weighted Average Amortization Period (in Years) | Impairments | Accumulated Amortization | Carrying Value (Net of Impairments and Accumulated Amortization) | |||||||||||||||
IPR&D | $ | 22,000,000 | N/A | $ | - | $ | - | $ | 22,000,000 | |||||||||||
Patents | 724,067 | 10.8 | - | (289,943 | ) | 434,124 | ||||||||||||||
License Rights | 607,947 | 14.6 | - | (148,713 | ) | 459,234 | ||||||||||||||
Trademarks | 106,386 | N/A | - | - | 106,386 | |||||||||||||||
Total | $ | 23,438,400 | $ | - | $ | (438,656 | ) | $ | 22,999,744 | |||||||||||
The following table summarizes our intangible assets as of April 30, 2013: | ||||||||||||||||||||
Asset Category | Value Assigned | Weighted Average Amortization Period (in Years) | Impairments | Accumulated Amortization | Carrying Value (Net of Impairments and Accumulated Amortization) | |||||||||||||||
Patents | $ | 645,918 | 11.2 | $ | (27,279 | ) | $ | (258,499 | ) | $ | 360,140 | |||||||||
License Rights | 572,370 | 15.6 | - | (117,969 | ) | 454,401 | ||||||||||||||
Trademarks | 110,157 | N/A | - | - | 110,157 | |||||||||||||||
Total | $ | 1,328,445 | $ | (27,279 | ) | $ | (376,468 | ) | $ | 924,698 | ||||||||||
Expected amortization expense | ' | |||||||||||||||||||
Year ending April 30, | Amount | |||||||||||||||||||
2015 | $ | 66,525 | ||||||||||||||||||
2016 | 65,949 | |||||||||||||||||||
2017 | 62,032 | |||||||||||||||||||
2018 | 61,239 | |||||||||||||||||||
2019 | 61,111 | |||||||||||||||||||
Therafter | 576,502 | |||||||||||||||||||
$ | 893,358 |
6_NOTES_PAYABLE_Tables
6. NOTES PAYABLE (Tables) | 12 Months Ended | ||||||||
Apr. 30, 2014 | |||||||||
Debt Disclosure [Abstract] | ' | ||||||||
Notes Payable | ' | ||||||||
April 30, | April 30, | ||||||||
2014 | 2013 | ||||||||
Current portion of notes payable, net | $ | 63,568 | $ | 57,539 | |||||
Current portion of convertible notes payable | 300,000 | - | |||||||
Less: Unamortized discount | (16,678 | ) | |||||||
Current portion of notes payable, net | $ | 346,890 | $ | 57,539 | |||||
Long-term portion of convertible notes payable | $ | - | $ | 4,900,001 | |||||
Less: Unamortized discount | - | (1,905,559 | ) | ||||||
Long-term portion of notes payable, net | $ | - | $ | 2,994,442 |
7_STOCKHOLDERS_EQUITY_Tables
7. STOCKHOLDERS EQUITY (Tables) | 12 Months Ended | ||||||||||||||||||
Apr. 30, 2014 | |||||||||||||||||||
Equity [Abstract] | ' | ||||||||||||||||||
Warrant Activity | ' | ||||||||||||||||||
Warrants | Weighted Average Exercise Price | ||||||||||||||||||
Outstanding at April 30, 2012 | 261,999 | $ | 41.6 | ||||||||||||||||
Issued | 658,154 | 6.69 | |||||||||||||||||
Cancelled | (67,568 | ) | 44.4 | ||||||||||||||||
Forfeited | (93,175 | ) | 38.4 | ||||||||||||||||
Outstanding at April 30, 2013 | 759,410 | $ | 11 | ||||||||||||||||
Issued | 5,165,862 | 2.6 | |||||||||||||||||
Exercised | (3,161,145 | ) | 2.26 | ||||||||||||||||
Forfeited | (1,661 | ) | 126 | ||||||||||||||||
Outstanding at April 30, 2014 | 2,762,466 | $ | 4.28 | ||||||||||||||||
Shares available for grant under the Plan | ' | ||||||||||||||||||
Shares Available for Grant | |||||||||||||||||||
Balances, at April 30, 2012 | 276,582 | ||||||||||||||||||
Options granted | (1,595 | ) | |||||||||||||||||
Options cancelled/forfeited | 7,851 | ||||||||||||||||||
Restricted stock granted | (5,318 | ) | |||||||||||||||||
Restricted stock cancelled/forfeited | 5,206 | ||||||||||||||||||
Balances, at April 30, 2013 | 282,726 | ||||||||||||||||||
additional shares reserved | 3,600,000 | ||||||||||||||||||
Options granted | (3,637,822 | ) | |||||||||||||||||
Options cancelled/forfeited | 1,300 | ||||||||||||||||||
Restricted stock granted | (135,662 | ) | |||||||||||||||||
Restricted stock cancelled/forfeited | 44,866 | ||||||||||||||||||
Balances, at April 30, 2014 | 155,408 | ||||||||||||||||||
Options Activity | ' | ||||||||||||||||||
Outstanding Options | |||||||||||||||||||
Number of Shares | Weighted Average Exercise Price | Aggregate Intrinsic Value | |||||||||||||||||
Balances, at April 30, 2012 | 17,592 | $ | 81.2 | ||||||||||||||||
Options granted | 1,595 | $ | 32.6 | ||||||||||||||||
Options cancelled | (7,851 | ) | $ | 106.4 | |||||||||||||||
Balances, at April 30, 2013 | 11,336 | $ | 57 | ||||||||||||||||
Options granted | 3,637,822 | $ | 5.64 | ||||||||||||||||
Options cancelled | (1,300 | ) | $ | 43.9 | |||||||||||||||
Balances, at April 30, 2014 | 3,647,858 | $ | 5.79 | $ | 8,736 | -2 | |||||||||||||
Outstanding stock options | ' | ||||||||||||||||||
Options Outstanding at April 30, 2014 | Options Exercisable and Vested at April 30, 2014 | ||||||||||||||||||
Exercise Price | Number of Options | Weighted Average Remaining Contractual Life (Years) | Number of Options | Weighted Average Exercise Price | |||||||||||||||
$ | 1.61 to $5.65 | 3,637,843 | 9.9 | 1,826,145 | $ | 5.63 | |||||||||||||
$ | 14.80 to $59.80 | 6,455 | 7 | 5,979 | $ | 39.82 | |||||||||||||
$ | 60.80 to $102.00 | 2,351 | 4.4 | 2,351 | $ | 80.65 | |||||||||||||
$ | 111.60 to $138.00 | 1,209 | 5.4 | 1,209 | $ | 121.81 | |||||||||||||
3,647,858 | 9.9 | 1,835,684 | $ | 5.91 | |||||||||||||||
Options vested and expected to vest | ' | ||||||||||||||||||
Number of Option Shares | Weighted Average Exercise Price | Aggregate Intrinsic Value (1) | Weighted Average Remaining Contractual Life (Years) | ||||||||||||||||
Vested | 1,835,684 | $ | 5.91 | $ | 8,736 | 9.9 | |||||||||||||
Vested and expected to vest | 3,645,025 | $ | 5.79 | $ | 9,237 | 9.9 | |||||||||||||
Fair Value Assumptions | ' | ||||||||||||||||||
For the year ended April 30 | |||||||||||||||||||
2014 | 2013 | ||||||||||||||||||
Risk-free interest rate (weighted average) | 1.8 | % | 1.29 | % | |||||||||||||||
Expected volatility (weighted average) | 98.2 | % | 79.62 | % | |||||||||||||||
Expected term (in years) | 6 | 7 | |||||||||||||||||
Expected dividend yield | 0 | % | 0 | % | |||||||||||||||
Restricted Stock Grants | ' | ||||||||||||||||||
Outstanding Restricted Stock Grants | |||||||||||||||||||
Number of Shares | Weighted Average Grant Date Fair Value | ||||||||||||||||||
Balances, at April 30, 2013 | 1,805 | $ | 43.8 | ||||||||||||||||
Restricted stock granted | 5,318 | $ | 35 | ||||||||||||||||
Restricted stock vested | (4,465 | ) | $ | 32.6 | |||||||||||||||
Restricted stock cancelled | (741 | ) | $ | 36.2 | |||||||||||||||
Balances, at April 30, 2013 | 1,917 | $ | 48.4 | ||||||||||||||||
Restricted stock granted | 135,662 | $ | 3 | ||||||||||||||||
Restricted stock vested | (50,235 | ) | $ | 2.3 | |||||||||||||||
Restricted stock cancelled | (31,503 | ) | $ | 1.67 | |||||||||||||||
Restricted stock forfeited | (13,363 | ) | $ | 4.49 | |||||||||||||||
Balances, at April 30, 2014 | 42,478 | $ | 6.39 |
8_RESTRUCTURING_EXPENSE_Tables
8. RESTRUCTURING EXPENSE (Tables) | 12 Months Ended | ||||||||||||
Apr. 30, 2014 | |||||||||||||
Restructuring Expense Tables | ' | ||||||||||||
Impact of the work force reductions and other associated costs on operating expenses and payments | ' | ||||||||||||
Charges Incurred During the Year Ended April 30, 2014 | Amounts Paid Through April 30, 2014 | Amounts Accrued at April 30, 2014 | |||||||||||
Future lease obligations, net of sublease revenue | $ | - | $ | 87,224 | $ | 54,660 |
9_COMMITMENTS_AND_CONTINGENCIE1
9. COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended | ||||
Apr. 30, 2014 | |||||
Commitments And Contingencies Tables | ' | ||||
Future lease payments | ' | ||||
Year ending April 30, | |||||
2015 | 111,171 | ||||
2016 | 94,917 | ||||
$ | 206,088 |
11_INCOME_TAXES_Tables
11. INCOME TAXES (Tables) | 12 Months Ended | ||||||||
Apr. 30, 2014 | |||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||
Reconciliation of income tax expenses (benefit) | ' | ||||||||
2014 | 2013 | ||||||||
U.S. federal taxes (benefit) at statutory rate | $ | (6,644,225 | ) | $ | (3,201,372 | ) | |||
State income tax benefit, net of federal benefit | (765,026 | ) | (356,452 | ) | |||||
Stock compensation | 3,099,270 | ||||||||
Nondeductible interest | 827,284 | 1,592,027 | |||||||
Other nondeductible | 292,355 | 47,652 | |||||||
Other, including effect of tax rate brackets | 53,621 | 132,806 | |||||||
Change in state tax rate | (8,377 | ) | - | ||||||
Change in valuation allowance | 3,145,098 | 1,785,339 | |||||||
$ | - | $ | - | ||||||
Deferred tax assets | ' | ||||||||
Deferred Tax Assets | 2014 | 2013 | |||||||
Net operating Loss Carryforwards | $ | 30,748,100 | $ | 27,446,605 | |||||
Accruals and other | 230,900 | 336,631 | |||||||
Depreciation and amortization | - | 16,766 | |||||||
Net deferred tax assets | 30,979,000 | 27,800,002 | |||||||
Deferred Tax Liabilities | |||||||||
IPR&D | (7,962,100 | ) | - | ||||||
Other liabilities | (33,900 | ) | - | ||||||
Valuation allowance | (30,945,100 | ) | (27,800,002 | ) | |||||
Net Deferred Tax Liabilities | $ | (7,962,100 | ) | $ | - |
2_SUMMARY_OF_SIGNIFICANT_ACCOU3
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $) | 12 Months Ended | |
Apr. 30, 2014 | Apr. 30, 2013 | |
Numerator | ' | ' |
Net loss, as reported | ($25,345,201) | ($10,373,871) |
Less: Effect of amortization of interest expense on convertible notes | 0 | -1,382,537 |
Net loss attributed to common stockholders (diluted) | -25,345,201 | -11,756,408 |
Denominator | ' | ' |
Weighted-average common shares outstanding | 9,362,031 | 1,650,280 |
Effect of dilutive securities | $0 | $108,745 |
Denominator for diluted net loss per share | 9,362,031 | 1,759,025 |
Basic net loss per share | ($2.71) | ($6.29) |
Diluted net loss per share | ($2.71) | ($6.68) |
2_SUMMARY_OF_SIGNIFICANT_ACCOU4
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) | 12 Months Ended | |
Apr. 30, 2014 | Apr. 30, 2013 | |
Options | ' | ' |
Anti-dilutive securities | 3,647,858 | 11,336 |
Warrants | ' | ' |
Anti-dilutive securities | 2,762,466 | 759,410 |
Restricted stock | ' | ' |
Anti-dilutive securities | 42,478 | 1,917 |
Convertible note shares | ' | ' |
Anti-dilutive securities | 6,652 | 98 |
Convertible preferred shares | ' | ' |
Anti-dilutive securities | ' | 97,400 |
2_SUMMARY_OF_SIGNIFICANT_ACCOU5
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) (USD $) | Apr. 30, 2014 | Apr. 30, 2013 |
Current Assets | ' | ' |
Cash and cash equivalents | $58,320,555 | $783,528 |
Current Liabilities | ' | ' |
Warrant liabilities | 954,876 | 0 |
Level 1 | ' | ' |
Current Assets | ' | ' |
Cash and cash equivalents | 58,320,555 | 783,528 |
Current Liabilities | ' | ' |
Warrant liabilities | 0 | 0 |
Level 2 | ' | ' |
Current Assets | ' | ' |
Cash and cash equivalents | 0 | 0 |
Current Liabilities | ' | ' |
Warrant liabilities | 0 | 0 |
Level 3 | ' | ' |
Current Assets | ' | ' |
Cash and cash equivalents | 0 | 0 |
Current Liabilities | ' | ' |
Warrant liabilities | $954,876 | $0 |
2_SUMMARY_OF_SIGNIFICANT_ACCOU6
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 3) (USD $) | 12 Months Ended | |
Apr. 30, 2014 | Apr. 30, 2013 | |
Summary Of Significant Accounting Policies Details 3 | ' | ' |
Closing stock price | $4.88 | $0 |
Expected dividend rate | 0.00% | 0.00% |
Expected stock price volatility | 90.32% | 0.00% |
Risk-free interest rate | 1.75% | 0.00% |
Expected life (years) | '5 years 2 months 23 days | ' |
3_BALANCE_SHEET_COMPONENTS_Det
3. BALANCE SHEET COMPONENTS (Details) (USD $) | Apr. 30, 2014 | Apr. 30, 2013 |
Balance Sheet Components Details | ' | ' |
Raw materials | $0 | $28,779 |
Finished goods | 0 | 70,425 |
Total Inventory | $0 | $99,204 |
3_BALANCE_SHEET_COMPONENTS_Det1
3. BALANCE SHEET COMPONENTS (Details 1) (USD $) | Apr. 30, 2014 | Apr. 30, 2013 |
Balance Sheet Components Details 1 | ' | ' |
R&D materials | $177,406 | $159,892 |
Other | 0 | 7,090 |
Dermacyte samples | 0 | 3,428 |
Total Other Assets | $177,406 | $170,410 |
3_BALANCE_SHEET_COMPONENTS_Det2
3. BALANCE SHEET COMPONENTS (Details 2) (USD $) | Apr. 30, 2014 | Apr. 30, 2013 |
Balance Sheet Components Details 2 | ' | ' |
Laboratory equipment | $683,632 | $768,252 |
Computer equipment and software | 142,380 | 135,697 |
Office furniture and fixtures | 130,192 | 130,192 |
Subtotal | 956,204 | 1,034,141 |
Less: Accumulated depreciation and amortization | -831,830 | -828,752 |
Property Plant and Equipment | $124,374 | $205,389 |
3_BALANCE_SHEET_COMPONENTS_Det3
3. BALANCE SHEET COMPONENTS (Details 3) (USD $) | Apr. 30, 2014 | Apr. 30, 2013 |
Balance Sheet Components Details 3 | ' | ' |
Employee related | $609,130 | $66,632 |
Deferred revenue | 124,521 | 185,068 |
Operating costs | 76,632 | 19,865 |
Restructuring liability | 43,728 | 43,728 |
Convertible note interest payable | 4,125 | 59,583 |
Accrued settlement costs | 0 | 500,000 |
Total | $858,136 | $874,876 |
3_BALANCE_SHEET_COMPONENTS_Det4
3. BALANCE SHEET COMPONENTS (Details 4) (USD $) | Apr. 30, 2014 | Apr. 30, 2013 |
Notes to Financial Statements | ' | ' |
Net non-cancelable operating lease obligation | $206,088 | $98,388 |
Less: current portion | 111,171 | -43,728 |
Long-term portion of net non-cancelable operating lease obligation | $10,932 | $54,660 |
3_BALANCE_SHEET_COMPONENTS_Det5
3. BALANCE SHEET COMPONENTS (Details Narrative) (USD $) | 12 Months Ended | |
Apr. 30, 2014 | Apr. 30, 2013 | |
Balance Sheet Components Details Narrative | ' | ' |
Depreciation and amortization expense | $88,300 | $92,959 |
4_ACQUISITION_Details
4. ACQUISITION (Details) (USD $) | 12 Months Ended |
Apr. 30, 2014 | |
Total | $24,047,000 |
Common stock | ' |
Equity | 8,747,802 |
Series E convertible preferred stock | ' |
Equity | $15,299,198 |
4_ACQUISITION_Details_1
4. ACQUISITION (Details 1) (USD $) | Apr. 30, 2014 |
Acquisition Tables | ' |
IPR&D | $22,000,000 |
Trade and other payables | -256,000 |
Liability arising from a contingency | -1,000,000 |
Deferred tax liability related to intangibles acquired | -7,962,100 |
Total identifiable net assets | 12,781,900 |
Goodwill | 11,265,100 |
Total fair value of consideration | $24,047,000 |
4_ACQUISITION_Details_2
4. ACQUISITION (Details 2) (USD $) | 12 Months Ended | |
Apr. 30, 2014 | Apr. 30, 2013 | |
Acquisition Details 2 | ' | ' |
Total net revenue | $158,926 | $1,190,928 |
Net loss | 19,560,030 | 9,418,395 |
Net loss attributable to common stockholders | $25,363,392 | $10,376,466 |
Net loss per share, basic | ($2.37) | ($3.44) |
Weighted average number of common shares outstanding, basic | 10,717,037 | 3,017,124 |
Net loss per share,B B diluted | ($2.37) | ($3.76) |
Weighted average number of common shares outstanding,B B diluted | 10,717,037 | 3,125,869 |
5_INTANGIBLE_ASSETS_Details
5. INTANGIBLE ASSETS (Details) (USD $) | 12 Months Ended | |
Apr. 30, 2014 | Apr. 30, 2013 | |
Value Assigned | $23,404,406 | $1,328,445 |
Impairments | 0 | -27,279 |
Accumulated Amortization | -438,656 | -376,468 |
Carrying Value (Net of Impairments and Accumulated Amortization) | 893,358 | 924,698 |
IPR&D | ' | ' |
Value Assigned | 22,000,000 | ' |
Impairments | 0 | ' |
Accumulated Amortization | 0 | ' |
Carrying Value (Net of Impairments and Accumulated Amortization) | 22,000,000 | ' |
Patents | ' | ' |
Value Assigned | 724,067 | 645,918 |
Weighted Average Amortization Period (in Years) | '10 years 9 months 18 days | '11 years 2 months 12 days |
Impairments | 0 | -27,279 |
Accumulated Amortization | -289,943 | -258,499 |
Carrying Value (Net of Impairments and Accumulated Amortization) | 434,124 | 360,140 |
License Rights | ' | ' |
Value Assigned | 607,947 | 572,370 |
Weighted Average Amortization Period (in Years) | '14 years 7 months 6 days | '15 years 7 months 6 days |
Impairments | 0 | 0 |
Accumulated Amortization | -148,713 | -117,969 |
Carrying Value (Net of Impairments and Accumulated Amortization) | 459,234 | 454,401 |
Trademarks | ' | ' |
Value Assigned | 106,386 | 110,157 |
Impairments | 0 | 0 |
Accumulated Amortization | ' | ' |
Carrying Value (Net of Impairments and Accumulated Amortization) | $106,386 | $110,157 |
5_INTANGIBLE_ASSETS_Details_1
5. INTANGIBLE ASSETS (Details 1) (USD $) | Apr. 30, 2014 | Apr. 30, 2013 |
Intangible Assets Details 1 | ' | ' |
2015 | $66,525 | ' |
2016 | 65,949 | ' |
2017 | 62,032 | ' |
2018 | 61,239 | ' |
2019 | 61,111 | ' |
Therafter | 576,502 | ' |
Total expected amortization | $893,358 | $924,698 |
5_INTANGIBLE_ASSETS_Details_Na
5. INTANGIBLE ASSETS (Details Narrative) (USD $) | 12 Months Ended | |
Apr. 30, 2014 | Apr. 30, 2013 | |
Intangible Assets Details Narrative | ' | ' |
Amortization Of Intangible Assets | $62,189 | $55,845 |
6_NOTES_PAYABLE_Details
6. NOTES PAYABLE (Details) (USD $) | Apr. 30, 2014 | Apr. 30, 2013 |
Notes Payable Details | ' | ' |
Current portion of notes payable, net | $63,568 | $57,539 |
Current portion of convertible notes payable | 300,000 | 0 |
Less: Unamortized discount | -16,678 | 0 |
Current portion of notes payable, net | 346,890 | 57,539 |
Long-term portion of convertible notes payable | 0 | 4,900,001 |
Less: Unamortized discount | 0 | -1,905,559 |
Long-term portion of notes payable, net | $0 | $2,994,442 |
7_STOCKHOLDERS_EQUITY_Details
7. STOCKHOLDERS EQUITY (Details) (USD $) | 12 Months Ended | |
Apr. 30, 2014 | Apr. 30, 2013 | |
Stockholders Equity Details | ' | ' |
Number of Warrants Outstanding, Beginning | 759,410 | 261,999 |
Number of Warrants Issued | 5,165,862 | 658,154 |
Number of Warrants Cancelled | ' | -67,568 |
Number of Warrants Exercised | -3,161,145 | ' |
Number of Warrants Forfeited | -1,661 | -93,175 |
Number of Warrants Outstanding, Ending | 2,762,466 | 759,410 |
Weighted Average Exercise Price Outstanding, Beginning | $11 | $41.60 |
Weighted Average Exercise Price Issued | $2.60 | $6.69 |
Weighted Average Exercise Price Exercised | $2.26 | $44.40 |
Weighted Average Exercise Price Cancelled | ' | ' |
Weighted Average Exercise Price Forfeited | $126 | $38.40 |
Weighted Average Exercise Price Outstanding, Ending | $4.28 | $11 |
7_STOCKHOLDERS_EQUITY_Details_
7. STOCKHOLDERS EQUITY (Details 1) | 12 Months Ended | |
Apr. 30, 2014 | Apr. 30, 2013 | |
Stockholders Equity Details 1 | ' | ' |
1999 Amended Stock Plan Shares available for grant | 282,726 | 276,582 |
additional shares reserved | 3,600,000 | ' |
Options granted | -3,637,822 | -1,595 |
Options cancelled/forfeited | 1,300 | 7,851 |
Restricted stock granted | -135,662 | -5,318 |
Restricted stock cancelled/forfeited | 44,866 | 5,206 |
1999 Amended Stock Plan Shares available for grant balance | 155,408 | 282,726 |
7_STOCKHOLDERS_EQUITY_Details_1
7. STOCKHOLDERS EQUITY (Details 2) (USD $) | 12 Months Ended | |
Apr. 30, 2014 | Apr. 30, 2013 | |
Stockholders Equity Details 1 | ' | ' |
Number of Options Outstanding, Beginning | ' | 17,592 |
Number of Options Granted | 3,637,822 | 1,595 |
Number of Options Cancelled | -1,300 | -7,851 |
Number of Options Outstanding, Ending | 3,647,858 | ' |
Weighted Average Exercise Price Outstanding, Beginning | $57 | $81.20 |
Weighted Average Exercise Price Granted | $5.64 | $32.60 |
Weighted Average Exercise Price Canceled | $43.90 | $106.40 |
Weighted Average Exercise Price Outstanding, Ending | $5.79 | $57 |
7_STOCKHOLDERS_EQUITY_Details_2
7. STOCKHOLDERS EQUITY (Details 3) (USD $) | 12 Months Ended | |
Apr. 30, 2014 | Apr. 30, 2012 | |
Number of Options Outstanding, Ending | 3,647,858 | 17,592 |
Weighted Average Remaining Contractual Life (Years) | '9 years 10 months 24 days | ' |
Number of Options Exercisable and Vested | 1,835,684 | ' |
Options Exercisable and Vested Weighted Average Exercise Price | $5.91 | ' |
Exercise Price $1.61 to $5.65 | ' | ' |
Number of Options Outstanding, Ending | 2,222 | ' |
Weighted Average Remaining Contractual Life (Years) | '9 years 10 months 24 days | ' |
Number of Options Exercisable and Vested | 1,826,145 | ' |
Options Exercisable and Vested Weighted Average Exercise Price | $5.63 | ' |
Exercise Price $14.80 to $59.80 | ' | ' |
Number of Options Outstanding, Ending | 6,455 | ' |
Weighted Average Remaining Contractual Life (Years) | '7 years | ' |
Number of Options Exercisable and Vested | 5,979 | ' |
Options Exercisable and Vested Weighted Average Exercise Price | $39.82 | ' |
Exercise Price $60.80 to $102.00 | ' | ' |
Number of Options Outstanding, Ending | 2,351 | ' |
Weighted Average Remaining Contractual Life (Years) | '4 years 4 months 24 days | ' |
Number of Options Exercisable and Vested | 2,351 | ' |
Options Exercisable and Vested Weighted Average Exercise Price | $80.65 | ' |
Exercise Price $111.60 to $138.00 | ' | ' |
Number of Options Outstanding, Ending | 1,209 | ' |
Weighted Average Remaining Contractual Life (Years) | '5 years 4 months 24 days | ' |
Number of Options Exercisable and Vested | 1,209 | ' |
Options Exercisable and Vested Weighted Average Exercise Price | $121.81 | ' |
7_STOCKHOLDERS_EQUITY_Details_3
7. STOCKHOLDERS EQUITY (Details 4) (USD $) | 12 Months Ended |
Apr. 30, 2014 | |
Stockholders Equity Details 4 | ' |
Number of Option Shares Vested | 1,835,684 |
Weighted Average Exercise Price Vested | $5.91 |
Aggregate Intrinsic Value Vested | $8,736 |
Weighted Average Remaining Contractual Life (Years) Vested | '9 years 10 months 24 days |
Number of Option Shares Vested and expected to vest | 3,645,025 |
Weighted Average Exercise Price Vested and expected to vest | $5.79 |
Aggregate Intrinsic Value Vested and expected to vest | $9,237 |
Weighted Average Remaining Contractual Life (Years) Vested and expected to vest | '9 years 10 months 24 days |
7_STOCKHOLDERS_EQUITY_Details_4
7. STOCKHOLDERS EQUITY (Details 5) | 12 Months Ended | |
Apr. 30, 2014 | Apr. 30, 2013 | |
Stockholders Equity Details 5 | ' | ' |
Risk-free interest rate (weighted average) | 1.80% | 1.29% |
Expected volatility (weighted average) | 98.20% | 79.62% |
Expected term (in years) | '6 years | '7 years |
Expected dividend yield | 0.00% | 0.00% |
7_STOCKHOLDERS_EQUITY_Details_5
7. STOCKHOLDERS EQUITY (Details 6) (USD $) | 12 Months Ended | |
Apr. 30, 2014 | Apr. 30, 2013 | |
Stockholders Equity Details 6 | ' | ' |
Number of Restricted Stock Grants, Beginning | 1,917 | 1,805 |
Granted | 135,662 | 5,318 |
Vested | -50,235 | -4,465 |
Cancelled | -31,503 | -741 |
Forfeited | -13,363 | ' |
Number of Restricted Stock Grants Ending | 42,478 | 1,917 |
Weighted Average Grant Date Fair Value, Beginning | $48.40 | $43.80 |
Weighted Average Grant Date Fair Value, Granted | $3 | $35 |
Weighted Average Grant Date Fair Value, Vested | $2.30 | $32.60 |
Weighted Average Grant Date Fair Value, Cancelled | $1.67 | $36.20 |
Weighted Average Grant Date Fair Value, Forfeited | $4.49 | ' |
Weighted Average Grant Date Fair Value, Ending | $6.39 | $48.40 |
8_RESTRUCTURING_EXPENSE_Detail
8. RESTRUCTURING EXPENSE (Details) (USD $) | 12 Months Ended | |
Apr. 30, 2014 | Apr. 30, 2013 | |
Charges Incurred During the nine months ended April 30, 2014 | ' | $220,715 |
Future lease obligations, net of sublease revenue | ' | ' |
Charges Incurred During the nine months ended April 30, 2014 | ' | ' |
Amounts Paid Through April 30, 2014 | 87,224 | ' |
Amounts Accrued at April 30, 2014 | $54,660 | ' |
8_RESTRUCTURING_EXPENSE_Detail1
8. RESTRUCTURING EXPENSE (Details Narrative) (USD $) | Apr. 30, 2014 |
Restructuring Expense Details Narrative | ' |
Future lease obligation | $55,000 |
9_COMMITMENTS_AND_CONTINGENCIE2
9. COMMITMENTS AND CONTINGENCIES(Details) (USD $) | Apr. 30, 2014 | Apr. 30, 2013 |
Year ending April 30, | ' | ' |
2015 | $111,171 | ($43,728) |
2016 | 94,917 | ' |
Total | $206,088 | $98,388 |
11_INCOME_TAXES_Details
11. INCOME TAXES (Details) (USD $) | 12 Months Ended | |
Apr. 30, 2014 | Apr. 30, 2013 | |
Income Tax Disclosure [Abstract] | ' | ' |
U.S Federal tax benefit at statutory rate | ($6,644,225) | ($3,201,372) |
State income tax benefit, net of federal benefit | -765,026 | -356,452 |
Stock compensation | 3,099,270 | ' |
Nondeductible interest | 827,284 | 1,592,027 |
Other nondeductible | 292,355 | 47,652 |
Other, including effect of tax rate brackets | 53,621 | 132,806 |
Change in state tax rate | -8,377 | ' |
Change in valuation allowance | 3,145,098 | 1,785,339 |
Income tax | ' | ' |
11_INCOME_TAXES_Details_1
11. INCOME TAXES (Details 1) (USD $) | Apr. 30, 2014 | Apr. 30, 2013 |
Deferred tax assets | ' | ' |
Net operating loss carryforwards | $30,748,100 | $27,446,605 |
Accruals and others | 230,900 | 336,631 |
Depreciation and amortization | ' | 16,766 |
Total deferred tax assets | 30,979,000 | 27,800,002 |
IPR&D | -7,962,100 | ' |
Other liabilities | -33,900 | ' |
Less: Valuation allowance | -30,945,127 | -27,800,002 |
Net Deferred Tax Assets (Liabilities) | ($7,962,100) | ' |