Stockholders’ Deficiency

6 Months Ended

Jan. 31, 2018

Equity [Abstract]

Stockholders’ Deficiency

Note 6 - Stockholders’ Deficiency:

Common Stock 

On January 18, 2017, the Company issued 53,211 shares of common stock for the acquisition of 51% of HDS and is obligated to issue 230,000 shares of common stock upon the conclusion of the Company’s reverse stock split. As of January 31, 2018, the shares have yet to be issued.

During January 2017, the Company issued 8,000 shares of common stock for the conversion of 120 shares of Series F convertible preferred stock, plus 4,235 shares for the related make-whole payments issued to convert the accumulated dividend payable.

During January 2017, the Company issued 10,000 shares of common stock for the conversion of 150 shares of Series G convertible preferred stock, plus 4,688 shares for the related make-whole payments issued to convert the accumulated dividend payable.

During February 2017, the Company issued 23,333 shares of common stock for the conversion of 350 shares of Series G convertible preferred stock, plus 10,606 shares for the related make-whole payments issued to convert the accumulated dividend payable.

On February 9, 2017, the Company offered all current warrant holders an option to exercise immediately all outstanding common stock purchase warrants on a cashless basis at a reduced exercise price of $7.40 per share from $15.00 per share. The Company agreed to issue a total of 103,809 shares of common stock in connection with the exercise of 314,649 warrants in connection with the following outstanding warrants:

	Warrants Exercised		Shares Agreed to be Issued
Series C 9% Convertible Preferred Stock		10,000		3,299
Series D 9% Convertible Preferred Stock		16,649		5,492
Series E 9% Convertible Preferred Stock		119,667		39,481
Series F 9% Convertible Preferred Stock		138,333		45,639
Series G 9% Convertible Preferred Stock		30,000		9,898
		314,649		103,809

As of the date of this filing, 31,195 shares have been issued and 72,614 shares remain to be issued resulting in additional common stock payable $1,071,851 as of January 31, 2018.

Warrants

As of January 31, 2018 and July 31, 2017, there are no warrants issued or outstanding. 

Series A, B, C, D, E, F, and G 9% Convertible Preferred Stock

All of the Company’s Series A, B, C, D and E 9% Convertible Preferred Stocks were converted prior to the beginning of the Company’s 2017 fiscal year. 

All of the Company’s Series F and G 9% Convertible Preferred Stocks were converted prior to the beginning of the Company’s 2018 fiscal year.

Series H and Series I Convertible Preferred Stock

The Company has authorized 109,000 shares of designated non-voting Series H Convertible Preferred Stock with a stated value of $1,000 per share and authorized 6,000 shares of designated non-voting Series I Convertible Preferred Stock with a stated value of $1,000 per share pursuant to the Purchase Agreement dated March 27, 2017. The Series H Preferred Stock was scheduled to be sold in four tranches to the Purchaser. Under the Securities Purchase Agreement, in the event the Purchaser failed to purchase 100% of the shares of Preferred Stock at any given Closing, the Company can decline to sell any further securities to the Purchaser (the “Purchase Agreement”).

The Series H and Series I Convertible Preferred Stock are convertible at the option of the holder at any time into shares of the Company’s common stock at an effective conversion price of $2.50 per share. An aggregate of 46,000,000 shares of the Company’s common stock would be issuable upon conversion of both the Series H and Series I Preferred Stock if all shares of such preferred stock contemplated by the securities purchase agreement are issued.

Neither Series H nor Series I Convertible Preferred Stock have special dividend rights. If the Company pays dividends on its common stock, the holders of the preferred stock will receive dividends in the amount they would have received had they converted the preferred stock to common stock.

At closing of the first tranche on March 28, 2017, the Company issued 3,000 shares of Series H Preferred Stock for a purchase price of $3,000,000. The proceeds of this sale were paid directly on the Company’s behalf to Emmaus as an additional deposit under the Company’s Emmaus LOI. The full amount of such proceeds were repaid to the Company in July 2017 upon termination of the Emmaus LOI. As of January 31, 2018, an aggregate of 1,200,000 shares of the Company’s common stock are issuable upon conversion of the Series H Preferred Stock sold.

On April 17, 2017, the Purchaser failed to close the sale of Series I Preferred Stock despite the Company being ready, willing and able to proceed and the Company terminated the Purchaser’s rights on April 23, 2017. Under the Securities Purchase Agreement, in the event the Purchaser fails to purchase 100% of the shares of Preferred Stock, the Company can decline to sell any further securities to the Purchaser. On April 23, 2017, the Company notified the Purchaser in writing that its rights to purchase additional shares were forfeit.

Conversion of Debt to Officers into Series I Preferred Stock

On April 27, 2017, the Company converted the “Moscato – Salvo Advances” (Note 3) after applying a 20% original issue discount, the same as the original issue discount negotiated at arm’s length with Alpha on March 6, 2017. Moscato converted $390,984 (including $65,164 original issue discount) into 391 shares of Series I Convertible Preferred Stock. Salvo converted $399,363 (including $66,560 original issue discount) into 399 shares of Series I Convertible Preferred Stock.

Noncontrolling Interest

During the six months ended in January 31, 2018, there was a net loss attributable to the non-controlling interest (49%) in Hema Diagnostic Systems, LLC of $209,467 and contributions made of $125,376. The net change in the non-controlling interest as of January 31, 2018 was $84,091. For the periods ending January 31, 2018 and July 31, 2017, the non-controlling interest in Hema Diagnostic Systems, LLC was $5,602,556 and $5,518,465, respectively.