Convertible Debentures and Other Current Debt |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Convertible Debentures and Other Current Debt [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Convertible debentures and other current debt |
Note 9 - Convertible debentures and other current debt
In May 2023, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with the Purchasers, as defined in the Purchase Agreement, and JGB Collateral, LLC, as collateral agent for the Purchasers (the “Agent”). Pursuant to the Purchase Agreement, the Company agreed to sell to the Purchasers (i) 10% Original Issue Discount Secured Convertible Debentures (the “Debentures”) with an aggregate principal amount of $7,608 and (ii) warrants to purchase up to 1,000,000 shares of the Company’s common stock, par value $0.01 per share (the “Common Stock”), for an exercise price of $2.31 per share, subject to adjustments as set forth in the Warrants, for a total purchase price of $7,000. The Purchase Agreement contained customary representations, warranties and covenants.
The transactions contemplated by the Purchase Agreement were consummated in May 2023. Pursuant to ASC 825, Fair Value Option, the Company made an irrevocable election at the time of issuance to report the Debentures at fair value with changes in fair value recorded through the Company’s consolidated statements of operations as other income (expense) in each reporting period.
Debentures
The Debentures bore interest at a rate of 10% per annum. The Debentures were convertible, at any time after their issuance date at the option of the Purchasers, into shares of Common Stock at a conversion price equal to $3.01 per share (the “Conversion Price”), subject to adjustment as set forth in the Debentures. Following the July 24, 2023 consummation of the Company’s sale of certain assets and assignment of certain liabilities of Enzo Clinical Labs, Inc., to Labcorp pursuant to the Asset Purchase Agreement dated March 16, 2023, the Company prepaid $4,000 of the outstanding principal amount prior to July 31, 2023. In May 2024, the Company repaid in full the remaining principal balance of $3,609.
The following table presents a reconciliation of the beginning and ending balances of the convertible Debentures measured at fair value on a recurring basis that use significant unobservable inputs (Level 3) and the related unrealized losses recorded in the consolidated statements of operations during the years ended July 31, 2024 and 2023:
Warrants
The Warrants are exercisable for five years from May 19, 2023, at an exercise price of $2.31 per share, subject, with certain exceptions, to adjustments in the event of stock splits, dividends, subsequent dilutive offerings and certain fundamental transactions, as more fully described in the Warrant.
Registration Rights Agreement
In connection with the Purchase Agreement, on May 19, 2023, the Company and the Purchasers entered into a Registration Rights Agreement, pursuant to which the Company was obligated to register the shares of Company Common Stock issuable upon exercise of the Debentures and the Warrants. The Company registered the shares effective July 18, 2023. With the full payoff of the Debentures, there is no longer a right to a conversion of the Debentures into shares.
Other
In March 2023, the Company entered into a Revolving Loan and Security Agreement with Gemino Healthcare Finance, LLC d/b/a SLR Healthcare ABL as lender specializing in direct lending to middle-market companies in the healthcare sector. The credit facility provided for a maximum $8,000 revolving line of credit based on the Company’s eligible accounts receivable. The annual interest rate was equal to the 90 day term SOFR rate plus 5.5%. The line of credit would terminate one year from closing and unused line fees and early prepayment penalties would apply. We repaid this loan in July 2023 using proceeds from the Labcorp transaction and paid a $240 prepayment penalty recorded to interest expense in the consolidated statements of operations. |
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