Annual report pursuant to Section 13 and 15(d)

Going Concern and Managements Plans

v3.19.3
Going Concern and Managements Plans
12 Months Ended
Jul. 31, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Going Concern and Managements Plans

Note 3—Going Concern and Managements Plans

 

The Company has sustained losses in all reporting periods since inception, with an inception-to date-loss of $164.4 million as of July 31, 2019. These losses are expected to continue for an extended period of time. Further, the Company has never generated any cash from its operations and does not expect to generate such cash in the near term. The aforementioned factors raise substantial doubt about the Company’s ability to continue as a going concern within one year from the date of filing. The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The financial statements do not include any adjustments relating to the recoverability and classification of asset amounts or the classification of liabilities that might be necessary should the Company be unable to continue as a going concern within one year after the date the financial statements are issued.

 

As of July 31, 2019, the Company had cash and cash equivalents of $25.1 million, which consisted of cash of $6.0 million and cash equivalents of $19.1 million. Cash flows from financing activities continued to provide the primary source of the Company’s liquidity. Net cash provided by financing activities was $27.2 million during the year ended July 31, 2019, which was primarily attributable to the net proceeds received from the Alpha Holdings agreement and the May 2019 offering (See Note 7). The Company currently estimates its monthly working capital requirements to be approximately $2.5 million, although the Company may modify or deviate from this estimate and it is likely that the Company’s actual operating expenses and working capital requirements will vary from its estimate. Based on these expectations regarding future expenses, rate of consumption, as well as its current cash levels, the Company believes its cash resources are insufficient to meet the Company’s anticipated needs for the 12 months following the issuance of this report.

 

The Company recognizes it will need to raise additional capital to continue operating its business and fund its planned operations, including research and development, clinical trials and, if regulatory approval is obtained, commercialization of its product candidates. In addition, the Company will require additional financing if it desires to in-license or acquire new assets, research and develop new compounds or new technologies and pursue related patent protection, or obtain any other intellectual property rights or other assets. There is no assurance that additional financing will be available when needed or that management will be able to obtain financing on terms acceptable to the Company or whether the Company will become profitable and generate positive operating cash flow. If the Company is unable to raise sufficient additional funds, it will have to scale back its operations.