Quarterly report pursuant to Section 13 or 15(d)

Cash and Cash Equivalents and Liquidity

Cash and Cash Equivalents and Liquidity
9 Months Ended
Apr. 30, 2017
Cash and Cash Equivalents [Abstract]  
Cash and Cash Equivalents and Liquidity

Note 3—Cash and Cash Equivalents and Liquidity


The Company considers all liquid investments with maturities of ninety days or less when purchased to be cash equivalents. As of April 30, 2017 and July 31, 2016, cash and cash equivalents were primarily comprised of cash in checking, savings and money market accounts.


The Company’s activities to date have been primarily supported by equity financings. It has sustained losses in previous reporting periods with an inception to date loss of $89.0 million as of April 30, 2017.


As of April 30, 2017, the Company had cash and cash equivalents of approximately $16.1 million. The Company will require additional financing to fund its future planned operations, including research and development, clinical trials and commercialization of its potential product candidates. In addition, the Company will require additional financing in order to license or acquire new assets, research and develop compounds and new technology and pursue related patent protection, and obtain any further intellectual property that the Company may seek to acquire. Additional financing may not be available to the Company when needed or, if available, it may not be obtained on commercially reasonable terms. If the Company is not able to obtain the necessary additional financing on a timely basis, the Company will be forced to delay or scale down some or all of its development activities or perhaps even cease the operation of its business. Historically, the Company has funded its operations primarily through equity financings and it expects that it will continue to fund its operations through equity and possibly debt financings. If the Company secures additional financing by issuing equity securities, its existing stockholders’ ownership will be diluted. Obtaining loans, assuming those loans would be available, would increase the Company’s liabilities and future cash commitments. The Company may also pursue non-dilutive financing sources. However, such financing may not be available, and if available, could take a long period to obtain.


Liquidity and Going Concern


The accompanying unaudited condensed consolidated financial statements have been prepared on the going concern basis of accounting, which assumes that the Company will continue to operate as a going concern and which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The Company has sustained losses of $4.6 million and $6.3 million for the three months ended March 31, 2017 and 2016, respectively. Based on the Company’s current rate of cash consumption, the Company estimates it will need additional capital in the first calendar quarter of 2018 and its prospects for obtaining that capital are uncertain. The Company may pursue debt or equity financing to raise additional capital. However, the Company can make no assurances that it will be able to raise the required additional capital, either through debt or equity financing, on acceptable terms or at all. As a result of the Company’s historical losses and financial condition, there is substantial doubt about the Company’s ability to continue as a going concern.