10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

Mark one

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended April 30, 2019

or

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________________ to ___________________

Commission File Number 001-09974

ENZO BIOCHEM, INC.

(Exact name of registrant as specified in its charter)

New York	13-2866202
(State or Other Jurisdiction of Incorporation or Organization)	(IRS. Employer Identification No.)
527 Madison Ave, New York, New York	10022
(Address of Principal Executive office)	(Zip Code)
212-583-0100
(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant has required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 45 of Regulation S-T (§232.405 of that chapter) during the preceding 12 months (or such shorter period that the registrant was required to submit and post such files).

Yes x No o

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock $0.01 par	ENZ	New York Stock Exchange

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer a smaller reporting company, or an emerging growth company (as defined in Rule 12b-2 of the Exchange Act).

Large accelerated filer        o		Accelerated filer x
Non-accelerated filer           o	(Do not check if smaller reporting company)	Smaller reporting company o
Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Yes o No o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.)

Yes o No x

As of June 1, 2019, the Registrant had 47,556,807 shares of common stock outstanding.

ENZO BIOCHEM, INC.
FORM 10-Q
April 30, 2019

INDEX

PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements	3
	Consolidated Balance Sheets – April 30, 2019 (unaudited) and July 31, 2018	3
	Consolidated Statements of Operations for the three and nine months ended April 30, 2019 and 2018 (unaudited)	4
	Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended April 30, 2019 and 2018 (unaudited)	5
	Consolidated Statement of Stockholders’ Equity for the three and nine months ended April 30, 2019 and 2018 (unaudited)	6
	Consolidated Statements of Cash Flows for the nine months ended April 30, 2019 and 2018 (unaudited)	8
	Notes to the Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	30
Item 4.	Controls and Procedures	31
Part II – OTHER INFORMATION
Item 1.	Legal Proceedings	32
Item 1A.	Risk Factors	32
Item 6.	Exhibits	32
Signatures		33

2

Part 1 Financial Information

Item 1 Financial Statements

ENZO BIOCHEM, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)

	April 30, 2019 (unaudited)			July 31, 2018
ASSETS
Current assets:
Cash and cash equivalents	$	64,052		$	60,041
Accounts receivable, net of allowances		11,441			13,147
Inventories		7,595			7,278
Prepaid expenses and other		2,635			2,734
Total current assets		85,723			83,200
Property, plant and equipment, net		14,244			7,636
Goodwill		7,452			7,452
Intangible assets, net		1,128			1,886
Other assets, including restricted cash of $750 at April 30, 2019		2,453			1,486
Total assets	$	111,000		$	101,660
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable – trade	$	6,423		$	9,516
Accrued liabilities		8,457			10,054
Other current liabilities		392			616
Total current liabilities		15,272			20,186
Loan payable, net		4,235			—
Other liabilities		494			353
Total liabilities		20,001			20,539
Commitments and contingencies
Stockholders’ equity:
Preferred Stock, $.01 par value; authorized 25,000,000 shares; no shares issued or outstanding		—			—
Common Stock, $.01 par value; authorized 75,000,000 shares; shares issued and outstanding: 47,556,807 at April 30, 2019 and 47,182,254 at July 31, 2018		476			472
Additional paid-in capital		332,490			330,770
Accumulated deficit		(244,345	)		(252,221	)
Accumulated other comprehensive income		2,378			2,100
Total stockholders’ equity		90,999			81,121
Total liabilities and stockholders’ equity	$	111,000		$	101,660

The accompanying notes are an integral part of these consolidated financial statements.

3

ENZO BIOCHEM, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(in thousands, except per share data)

	Three Months Ended April 30,						Nine Months Ended April 30,
	2019			2018			2019			2018
Revenues	$	19,662		$	25,230		$	60,249		$	78,258
Operating costs, expenses and legal settlements, net:
Cost of revenues		14,360			14,557			43,347			45,595
Research and development		781			799			2,342			2,358
Selling, general and administrative		10,920			11,021			33,387			32,975
Legal fee expense		257			1,651			2,700			3,782
Legal settlements, net		(28,925	)		—			(28,925	)		—
Total operating costs, expenses and legal settlements, net		(2,607	)		28,028			52,851			84,710
Operating income (loss)		22,269			(2,798	)		7,398			(6,452	)
Other income (expense):
Interest		258			227			759			569
Other		70			17			249			86
Foreign exchange (loss) gain		(332	)		(462	)		(530	)		143
Income (loss) before income taxes		22,265			(3,016	)		7,876			(5,654	)
Benefit for income taxes		—			—			—			1,097
Net income (loss)	$	22,265		$	(3,016	)	$	7,876		$	(4,557	)
Net income (loss) per common share:
Basic	$	0.47		$	(0.06	)	$	0.17		$	(0.10	)
Diluted	$	0.47		$	(0.06	)	$	0.17		$	(0.10	)
Weighted average common shares outstanding:
Basic		47,452			47,073			47,259			46,895
Diluted		47,555			47,073			47,364			46,895

The accompanying notes are an integral part of these consolidated financial statements.

4

ENZO BIOCHEM, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(UNAUDITED)
(in thousands)

	Three Months Ended April 30,					Nine Months Ended April 30,
	2019		2018			2019		2018
Net income (loss)	$	22,265	$	(3,016	)	$	7,876	$	(4,557	)
Other comprehensive gain (loss):
Foreign currency translation adjustments		206		329			278		(166	)
Comprehensive income (loss)	$	22,471	$	(2,687	)	$	8,154	$	(4,723	)

The accompanying notes are an integral part of these consolidated financial statements.

5

ENZO BIOCHEM, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
Three Months Ended April 30, 2019 and 2018
(UNAUDITED)
(in thousands, except share data)

	Common Stock Shares Issued		Common Stock Amount		Additional Paid-in Capital			Accumulated Deficit			Accumulated Other Comprehensive Income		Total Stockholders’ Equity
Balance at January 31, 2019		47,241,335	$	472	$	331,463		$	(266,610	)	$	2,172	$	67,497
Net income for the period ended April 30, 2019		—		—		—			22,265			—		22,265
Exercise of stock options		—		1		72			—			—		73
Share-based compensation charges		—		—		199			—			—		199
Net issuance of common stock for options exercised by Directors		—		—		(73	)		—			—		(73	)
Issuance of common stock for employee 401(k) plan match		315,472		3		829			—			—		832
Foreign currency translation adjustments		—		—		—			—			206		206
Balance at April 30, 2019		47,556,807	$	476	$	332,490		$	(244,345	)	$	2,378	$	90,999

	Common Stock Shares Issued		Treasury Stock Shares			Common Stock Amount			Additional Paid-in Capital			Treasury Stock Amount			Accumulated Deficit			Accumulated Other Comprehensive Income		Total Stockholders’ Equity
Balance at January 31, 2018		47,077,840		106,911		$	471		$	330,425		$	(1,014	)	$	(243,441	)	$	1,518	$	87,959
Net loss for the period ended April 30, 2018		—		—			—			—			—			(3,016	)		—		(3,016	)
Cashless options exercise		—					4			(4	)		—			—			—		—
Vesting of restricted stock		500					—			—			—			—			—		—
Exercise of stock options		46,022		—			(3	)		124			—			—			—		121
Share-based compensation Charges		—		—			—			204			—			—			—		204
Issuance of common stock and treasury stock for employee 401(k) plan match		37,580		(106,911	)		—			(232	)		1,014			—			—		782
Foreign currency translation adjustments		—		—			—			—			—			—			329		329
Balance at April 30, 2018		47,161,942		—		$	472		$	330,517		$	—		$	(246,457	)	$	1,847	$	86,379

The accompanying notes are an integral part of these consolidated financial statements

6

ENZO BIOCHEM, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
Nine Months Ended April 30, 2019 and 2018
(UNAUDITED)
(in thousands, except share data)

	Common Stock Shares Issued		Common Stock Amount		Additional Paid-in Capital		Accumulated Deficit			Accumulated Other Comprehensive Income		Total Stockholders’ Equity
Balance at July 31, 2018		47,182,254	$	472	$	330,770	$	(252,221	)	$	2,100	$	81,121
Net income for the period ended April 30, 2019		—		—		—		7,876			—		7,876
Vesting of restricted stock		986		—		—		—			—		—
Exercise of stock options		34,719		1		166		—			—		167
Share-based compensation charges		—		—		725		—			—		725
Net issuance of common stock for options exercised by Directors		23,376		—		—		—			—		—
Issuance of common stock for employee 401(k) plan match		315,472		3		829		—			—		832
Foreign currency translation adjustments		—		—		—		—			278		278
Balance at April 30, 2019		47,556,807	$	476	$	332,490	$	(244,345	)	$	2,378	$	90,999

	Common Stock Shares Issued		Treasury Stock Shares			Common Stock Amount		Additional Paid-in Capital			Treasury Stock Amount			Accumulated Deficit			Accumulated Other Comprehensive Income			Total Stockholders’ Equity
Balance at July 31, 2017		46,506,176		—		$	465	$	328,294		$	—		$	(241,900	)	$	2,013		$	88,872
Net loss for the period ended April 30, 2018		—		—			—		—			—			(4,557	)		—			(4,557	)
Cashless options exercise		340,898		106,911			4		1,010			(1,014	)		—			—			—
Vesting of restricted stock		2,562					—		—			—			—			—			—
Exercise of stock options		274,726		—			3		828			—			—			—			831
Share-based compensation Charges		—		—			—		617			—			—			—			617
Issuance of common stock and treasury stock for employee 401(k) plan match		37,580		(106,911	)		—		(232	)		1,014			—			—			782
Foreign currency translation adjustments		—		—			—		—			—			—			(166	)		(166	)
Balance at April 30, 2018		47,161,942		—		$	472	$	330,517		$	—		$	(246,457	)	$	1,847		$	86,379

The accompanying notes are an integral part of these consolidated financial statements

7

ENZO BIOCHEM, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)

	Nine Months Ended April 30,
	2019			2018
Cash flows from operating activities:
Net income (loss)	$	7,876		$	(4,557	)
Adjustments to reconcile net income (loss) to net cash provided by(used in) operating activities:
Depreciation and amortization of property, plant and equipment		1,631			1,608
Amortization of intangible assets		741			742
Share-based compensation charges		725			617
Accrual for share-based 401(k) employer match expense		650			630
Foreign exchange loss (gain)		461			(149	)
Changes in operating assets and liabilities:
Accounts receivable		1,605			756
Inventories		(456	)		(257	)
Prepaid expenses and other assets		(36	)		(585	)
Accounts payable – trade		(3,363	)		(2,126	)
Accrued liabilities, other current liabilities and other liabilities		(1,853	)		2,846
Total adjustments		105			4,082
Net cash provided by (used in) operating activities		7,981			(475	)
Cash flows from investing activities:
Capital expenditures		(7,554	)		(1,626	)
Security deposits and other		—			(51	)
Net cash used in investing activities		(7,554	)		(1,677	)
Cash flows from financing activities:
Proceeds from borrowing under mortgage loan		4,500			—
Repayments under loans and capital lease obligations		(244	)		(299	)
Costs to obtain mortgage loan		(72	)		—
Proceeds from exercise of stock options		166			831
Net cash provided by financing activities		4,350			532
Effect of exchange rate changes on cash and cash equivalents		(16	)		9
Increase (decrease) in cash and cash equivalents		4,761			(1,611	)
Cash and cash equivalents - beginning of period		60,041			64,167
Cash and cash equivalents - end of period	$	64,802		$	62,556
The composition of cash and cash equivalents and restricted cash is as follows:
Cash and cash equivalents		64,052			62,556
Restricted cash included in other assets		750			—
Total cash and cash equivalents (including restricted cash)	$	64,802		$	62,556

The accompanying notes are an integral part of these consolidated financial statements.

8

ENZO BIOCHEM, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of April 30, 2019
(Unaudited)
(Dollars in thousands, except share data)

Note 1 – Basis of Presentation

The accompanying consolidated financial statements include the accounts of Enzo Biochem, Inc. and its wholly-owned subsidiaries, Enzo Life Sciences, Enzo Clinical Labs, Enzo Therapeutics, Enzo Realty LLC and Enzo Realty II LLC, collectively or with one or more of its subsidiaries referred to as the “Company” or “Companies”. The consolidated balance sheet as of April 30, 2019, the consolidated statements of operations and comprehensive income (loss) for the three and nine months ended April 30, 2019 and 2018, the consolidated statements of cash flows for the nine months ended April 30, 2019 and 2018 and the consolidated statements of stockholders’ equity for the nine months ended April 30, 2019 and 2018 (the “interim statements”) are unaudited. In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present fairly the financial position and operating results for the interim periods have been made. Certain information and footnote disclosure, normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States, have been condensed or omitted as permitted under rules promulgated by the Securities and Exchange Commission. The interim statements should be read in conjunction with the consolidated financial statements for the year ended July 31, 2018 and notes thereto contained in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission. The consolidated balance sheet at July 31, 2018 has been derived from the audited financial statements at that date. The results of operations for the three and nine months ended April 30, 2019 are not necessarily indicative of the results that may be expected for the fiscal year ending July 31, 2019.

Effect of New Accounting Pronouncements

Adoption of New Accounting Standards

On August 1, 2018, the Company adopted a new accounting standard issued by the Financial Accounting Standards Board (“FASB”) on revenue recognition using the full retrospective method. This new accounting standard outlines a single comprehensive model to use in accounting for revenue arising from contracts with customers. This standard supersedes existing revenue recognition requirements and eliminates most industry-specific revenue recognition guidance from GAAP. The core principle of the revenue recognition standard is to require an entity to recognize as revenue the amount that reflects the consideration which it expects to be entitled to when control of goods or services are transferred to its customers.

As a result of the Company’s adoption of this standard, the majority of the amounts that were historically classified as bad debt expense, primarily related to patient responsibility, are now considered an implicit price concession in determining net revenues from clinical services. Accordingly, the Company reports estimated uncollectible balances associated with patient responsibility as a reduction of the transaction price and therefore as a reduction in net revenues, when historically these amounts were classified and separately reported as a provision for uncollectible accounts receivable. The adoption of this standard has no impact on revenues reported for life sciences products. The adoption of this new accounting standard resulted in increased disclosure, including qualitative and quantitative disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. For further details, see Note 3.

9

The impact of the adoption of the standard on prior period consolidated operations, cash flows and balance sheet is presented in the table below:

	As Previously Reported	Adjustment for New Accounting Standard on Revenue Recognition	Reclassification of Residual	As Restated
Consolidated Statements of Operations for the three months ended April 30, 2018:
Total Revenues	$25,630	$(400)	—	$25,230
Provision for uncollectible accounts receivable	396	(400)	$4	—
Selling, general and administrative expenses	11,025	—	(4)	11,021
Net loss	$(3,016)	—	—	$(3,016)

Consolidated Statements of Operations for the nine months ended April 30, 2018:
Total Revenues	80,258	(2,000)		78,258
Provision for uncollectible accounts receivable	1,989	(2,000)	11	—
Selling, general and administrative expenses	32,986	—	(11)	32,975
Net loss	(4,557)	—	—	(4,557)

Consolidated Statements of Cash Flows April 30, 2018:
Provision for uncollectible accounts receivable	1,989	(2,000)	11	—
Changes in operating assets and liabilities: Accounts receivable	(1,233)	2,000	(11)	756

Consolidated balance sheet July 31, 2018:
Accounts receivable	15,815	(2,523)	—	13,292
Less: Allowance for doubtful accounts	2,668	(2,523)	—	145
Accounts receivable, net of allowance for doubtful accounts	13,147	—	—	13,147

On August 1, 2018, the Company adopted a new accounting standard issued by FASB which provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. Adoption of this standard requires that amendments in the update be applied prospectively to an award modified on or after the adoption date. For the foreseeable future, any excess income tax benefits or deficiencies from stock-based compensation, which would be recognized as discrete items within income tax expense rather than additional paid in capital, will be offset by an equivalent adjustment to the deferred tax valuation allowance. Accordingly, adoption of this standard had no impact on our reported operations.

Pronouncements Issued but Not Yet Adopted

In February 2016, FASB issued ASU No. 2016-02 – Leases (Topic 842), as amended. The new standard establishes a right-of-use (ROU) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The new standard is effective for our fiscal year beginning August 1, 2019 including interim periods within that fiscal year. We will adopt the standard using a modified retrospective transition approach and will not restate our comparative periods. Given the size of our lease portfolio, in particular real estate leases, we expect the adoption of this standard will materially impact our

10

consolidated financial statements by significantly increasing our non-current assets and non-current liabilities, which we estimate to be in a range of $23 and $25 million on our consolidated balance sheet when we record the right of use assets and related lease liabilities for our existing operating leases. We will recognize expense in the consolidated statement of operations similar to current lease accounting, in the cost of revenues and selling, general and administrative.

In June 2016, FASB issued ASU No. 2016-13 Financial Instruments – Credit Losses (Topic 326). This standard changes the impairment model for most financial instruments, including trade receivables, from an incurred loss method to a new forward-looking approach, based on expected losses. The estimate of expected credit losses will require entities to incorporate considerations of historical information, current information and reasonable and supportable forecasts. Adoption of this standard is required for our annual and interim periods beginning August 1, 2020 and must be adopted using a modified retrospective transition approach. We are currently assessing the impact of the adoption of this standard on our results of operations, financial position and cash flows.

We reviewed all other recently issued accounting pronouncements and have concluded they are not applicable or not expected to be significant to the accounting for our operations.

Concentration Risk

Other than the Medicare program, one provider whose programs are included in the “Third-party payers” and “Health Maintenance Organizations” (“HMO’s”) categories represents approximately 33% and 40% of Clinical Services net revenue for the three months ended April 30, 2019 and 2018 respectively, and 39% for the nine months ended April 30, 2019 and 2018. As of April 30, 2019, other than the Medicare program, one provider whose programs are included in either “Third-party payers” and/or “Health Maintenance Organizations” (“HMO’s”) categories represent approximately 14% of Clinical Services net receivables. As of July 31, 2018, other than the Medicare program, three providers whose programs are included in either “Third-party payers” and/or “Health Maintenance Organizations” (“HMO’s”) categories represent approximately 29% of Clinical Services net receivables.

Income Taxes

The provision for income taxes and the effective tax rates for the three months ended April 30, 2019 and 2018 is $0. The provision (benefit) for income taxes for the nine months ended April 30, 2019 and 2018 is $0 and ($1,097), respectively. The effective tax rate for the nine months ended April 30, 2018 was (19.4%). The primary differences between the Company’s effective tax rates and the statutory rates for the three and nine months ended April 30, 2019 and 2018 are due to the utilization of net operating losses for which a full valuation allowance was maintained and for a tax benefit recorded in the nine month period ended April 30, 2018 of $1.1 million. The $1.1 million tax benefit in the 2018 period is due to the Tax Act, signed into law December 22, 2017, in which the legislation provided for a credit for alternative minimum taxes (AMT) paid in prior periods. The Company believes that the valuation allowance is necessary as it is not more likely than not that the deferred tax assets will be realized in the foreseeable future based on positive and negative evidence available at this time. This conclusion was reached because of uncertainties relating to future taxable income, in terms of both its timing and its sufficiency, which would enable the Company to realize the deferred tax assets.

Note 2 – Net income (loss) per share

Basic net income (loss) per share represents net income (loss) divided by the weighted average number of common shares outstanding during the period. As a result of the net loss for the three months ended April 30, 2018 and nine months ended April 30, 2018 diluted weighted average shares outstanding are the same as basic weighted average shares outstanding, and do not include the potential common shares from stock options and unvested restricted stock because to do so would be antidilutive. For the three and nine months ended April 30, 2018, approximately 431,000, and 694,000, respectively of potential common shares (“in the money options”) and unvested restricted stock were excluded from the calculation of diluted earnings per share.

For the three and nine months ended April 30, 2019, the effect of approximately 1,640,000 and 1,541,000 of outstanding “out of the money” options to purchase common shares were excluded from the calculation of diluted net income per share because their effect would be anti-dilutive. For the three and nine months ended April 30, 2018, the effect of approximately 581,000 and 194,000 of outstanding “out of the money” options to purchase common shares were excluded from the calculation of diluted net income per share because their effect would be anti-dilutive.

Note 3 – Revenue Recognition

Clinical Services Revenue

Net revenues in the Company’s clinical services business accounted for 63% and 72% of the Company’s total net revenues for the nine months ended April 30, 2019 and 2018, respectively and are primarily comprised of a high volume of relatively low-dollar transactions. The services business, which provides clinical testing services, satisfies its performance obligation and recognizes revenues upon completion of the testing process for a specific patient and reporting to the ordering physician. The Company may also perform clinical testing services for other laboratories and will recognize revenue from those services when reported to the ordering laboratory. The Company estimates the amount of consideration it expects to receive from customer groups using the portfolio approach. These estimates of the expected consideration include the impact of contractual allowances and price concessions on our customer group portfolios consisting of healthcare insurers, government payers, client payers and patients as described below. Contracts with customers in our laboratory services business do not contain a financing component, based on the typically limited period of time between performance of services and collection of consideration. The transaction price includes variable consideration in the form of the contractual allowance and price concessions as well as the collectability of the transaction based on the patient intent and ability to pay. The Company uses the expected value method in estimating the amount of the variability included in the transaction price.

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The following are descriptions of our laboratory services business portfolios:

Third party payers and Health Maintenance Organizations (HMO’s)

Reimbursements from third party payers, primarily healthcare insurers, and HMO’s are based on negotiated fee-for-service schedules. Revenues consist of amounts billed net of contractual allowances for differences between amounts billed and the estimated consideration the Company expects to receive from such payers, which considers historical collection and denial experience and the terms of the Company’s contractual arrangements. Adjustments to the allowances, based on actual receipts from the third-party payers, are recorded upon settlement.

Collection of the consideration the Company expects to receive is normally a function of providing complete and correct billing information to these third party payers within the various filing deadlines, and typically occurs within 60 to 90 days of billing. Provided the Company has billed healthcare insurers accurately with complete information prior to the established filing deadline, there has historically been little to no collection risk. If there has been a delay in billing, the Company determines if the amounts in question will likely go past the filing deadline, and if so, will reserve accordingly for the billing.

Third-party payers, including government programs, may decide to deny payment or recoup payments for testing that they contend was improperly billed or not medically necessary, against their coverage determinations, or for which they believe they have otherwise overpaid (including as a result of their own error), and we may be required to refund payments already received. Our revenues may be subject to adjustment as a result of these factors among others, including without limitation, differing interpretations of billing and coding guidance and changes by government agencies and payers in interpretations, requirements, and “conditions of participation” in various programs.

Government Payer - Medicare

Reimbursements from Medicare are based on fee-for-service schedules set by Medicare, which is funded by the government. Revenues consist of amounts billed net of contractual allowances for differences between amounts billed and the estimated consideration the Company expects to receive from Medicare, which considers historical collection and denial experience and other factors. Adjustments to the allowances, based on actual receipts from the government payers, are recorded upon settlement.

Collection of consideration the Company expects to receive is normally a function of providing the complete and correct billing information within the various filing deadlines and typically occurs within 60 days of billing. Provided the Company has billed the government payer accurately with complete information prior to the established filing deadline, there has historically been little to no collection risk. If there has been a delay in billing, the Company determines if the amounts in question will likely go past the filing deadline, and, if so, it will reserve accordingly for the billing.

Patient self-pay

Uninsured patients are billed based on established patient fee schedules or fees negotiated with physicians on behalf of their patients. Coinsurance and deductible responsibilities based on fees negotiated with healthcare insurers are also billed to insured patients and included in this portfolio. Collection of billings from patients is subject to credit risk and ability of the patients to pay. Revenues consist of amounts billed net of discounts provided to uninsured patients in accordance with the Company’s policies and implicit price concessions. Implicit price concessions represent differences between amounts billed and the estimated consideration the Company expects to receive from patients, which considers historical collection experience and other factors including current market conditions. Adjustments to the estimated allowances, based on actual receipts from the patients, are recorded upon settlement. Patient billings are generally fully reserved for when the related billing reaches 210 days outstanding. Balances are automatically written off when they are sent to collection agencies. Allowances are further adjusted for estimated recoveries of amounts sent to collection agencies based on historical collection experience, which is regularly monitored. Collection of consideration the Company expects to receive typically occurs within 180 days of billing.

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The following table represents clinical services net revenues and percentages by type of customer:

	Three months ended April 30, 2019				Three months ended April 30, 2018
Revenue category
Third-party payer	$	5,799	50	%	$	9,965	56	%
Medicare		2,634	22			2,858	16
Patient self-pay		1,881	16			2,047	12
HMO’s		1,437	12			2,867	16
Total	$	11,751	100	%	$	17,737	100	%

	Nine months ended April 30, 2019				Nine months ended April 30, 2018
Revenue category
Third-party payer	$	20,213	53	%	$	32,726	59	%
Medicare		7,724	20			9,073	16
Patient self-pay		5,652	15			5,689	10
HMO’s		4,459	12			8,513	15
Total	$	38,048	100	%	$	56,001	100	%

For the three and nine months ended April 30, 2019 and 2018, all of the Company’s clinical services were provided within the United States.

Products Revenue and royalty income

Products revenues consist of the sale of single-use products used in the identification of genomic information and are recognized at a point in time following the transfer of control of such products to the customer, which generally occurs upon shipment. Payment terms for shipments to end-user and distributor customers may range from 30 to 90 days. Any claims for credit or return of goods may be made generally within 30 days of receipt. Revenues are reduced to reflect estimated credits and returns, although historically these adjustments have not been material. Taxes collected from customers relating to product sales and remitted to governmental authorities are excluded from revenue. Amounts billed to customers for shipping and handling are included in revenue, while the related shipping and handling costs are reflected in cost of products.

Royalty income is based on net sales of the Company’s licensed products by a third party. We recognize royalty income in the period the sales occur based on third party evidence received. During the three and nine months ended April 30, 2019 there was no royalty income. For the three and nine months ended April 30, 2018, royalty income was $78 and $639, respectively.

Products revenue by geography is as follows:

	Three Months Ended April 30				Nine Months Ended April 30
	2019		2018		2019		2018
United States	$	4,585	$	3,987	$	12,570	$	11,500
Europe		1,620		1,529		4,370		4,422
Rest of the world		1,706		1,899		5,261		5,578
Total	$	7,911	$	7,415	$	22,201	$	21,500

Note 4 - Supplemental disclosure for statement of cash flows

For the nine months ended April 30, 2019 and 2018, tax on capital paid by the Company were $94 and $65, respectively.

For the nine months ended April 30, 2019 and 2018, interest paid by the Company was $138 and $61, respectively.

During the nine months ended April 30, 2019, there was a total of $381 in capital lease agreements. During the nine months ended April 31, 2018, the Company did not enter into any material capital lease agreements.

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During the nine months ended April 30, 2019, certain directors and officers of the Company exercised 203,511 stock options in a non-cash transaction. The officers and directors received 23,376 net shares of common stock. The Company did not receive any proceeds from this exercise. The net shares issued represent the difference between the fair market value of the options on the date of exercise less the strike price cost to exercise the options.

During the nine months ended April 30, 2019 the Company issued common stock in connection with its share based 401(k) employer match in the amount of $832. For the 2018 period, the Company issued shares of common stock in the amount of $782.

Note 5 – Inventories

Inventories consist of the following:

	April 30, 2019		July 31, 2018
Raw materials	$	895	$	754
Work in process		2,480		2,174
Finished products		4,220		4,350
	$	7,595	$	7,278

Note 6 – Goodwill and intangible assets

At April 30, 2019 and July 31, 2018, the Company has goodwill of $7,452 allocated to the Clinical Services reporting unit.

The Company’s change in the carrying amount of intangible assets, all in the Products segment is as follows:

	Gross			Accumulated Amortization			Net
July 31, 2018	$	27,347		$	(25,461	)	$	1,886
Amortization expense		—			(741	)		(741	)
Foreign currency translation		(110	)		93			(17	)
April 30, 2019	$	27,237		$	(26,109	)	$	1,128

Intangible assets, all finite lived, consist of the following:

	April 30, 2019							July 31, 2018
	Gross		Accumulated Amortization			Net		Gross		Accumulated Amortization			Net
Patents	$	11,027	$	(10,992	)	$	35	$	11,027	$	(10,980	)	$	47
Customer relationships		11,745		(10,652	)		1,093		11,836		(9,997	)		1,839
Website and acquired content		1,008		(1,008	)		—		1,008		(1,008	)		—
Licensed technology and other		483		(483	)		—		483		(483	)		—
Trademarks		2,974		(2,974	)		—		2,993		(2,993	)		—
Total	$	27,237	$	(26,109	)	$	1,128	$	27,347	$	(25,461	)	$	1,886

At April 30, 2019, information with respect to intangibles assets acquired is as follows:

	Useful life assigned	Weighted average remaining useful life
Customer relationships	8 -15 years	1 year
Other intangibles	10 years	4 years

At April 30, 2019, the weighted average remaining useful life of intangible assets is approximately one year.

Note 7 - Loan Payable

In connection with the purchase of our new facility, on November 27, 2018, a wholly-owned subsidiary (the ““mortgagor subsidiary”) of the Company entered into a Fee Mortgage and Security Agreement (the “mortgage agreement”) with Citibank, N.A. (the “mortgagee”). The mortgage agreement provides for a loan of $4,500 for a term of 10 years, bears a fixed interest rate of 5.09% per annum and requires monthly mortgage payments of principal and

14

interest of $30. Debt issuance costs of $72 are being amortized over the life of the mortgage agreement. The balance of unamortized debt issuance cost was $69 at April 30, 2019. At April 30, 2019, the balance owed by the subsidiary under the mortgage agreement was $4.4 million. The Company’s obligations under the mortgage agreement are secured by the new facility and by a $750 cash collateral deposit with the mortgagee as additional security. This restricted cash is included in other assets as of April 30, 2019.

The mortgage agreement includes affirmative and negative covenants and events of default, as defined. Events of default include non-payment of principal and interest on debt outstanding, non-performance of covenants, material changes in business, breach of representations, bankruptcy or insolvency, and changes in control. The mortgage includes certain financial covenants. As of April 30, 2019, required financial covenants have been met.

We assumed from the seller an operating lease for a current tenant at the facility which runs to December 2019. Rental income from the assumed lease is included in other income.

Minimum future annual principal payments under the mortgage agreement as of April 30, 2019, are as follows:

April 30,
	2020	$	134
	2021		142
	2022		149
	2023		157
	2024		165
	Thereafter		3,691
			4,438
Less:	Current portion		(134	)
	Unamortized mortgage costs		(69	)
Mortgage loan, non-current, net		$	4,235

Note 8 – Accrued Liabilities

Accrued liabilities consist of the following:

	April 30, 2019		July 31, 2018
Payroll, benefits, and commissions	$	4,848	$	4,870
Professional fees		592		811
Legal		167		2,121
Other		2,850		2,252
	$	8,457	$	10,054

Note 9 – Stockholders’ Equity

Controlled Equity Offering

The Company has a Controlled Equity Offering^SM Sales Agreement (the “Sales Agreement”) with Cantor Fitzgerald & Co., as sales agent (“Cantor”). Under the Sales Agreement, the Company may offer and sell, from time to time, through Cantor, shares of the Company’s common stock, par value $0.01 per share (the “Common Stock”). The Company pays Cantor a commission of 3.0% of the aggregate gross proceeds received under the Sale Agreement. The Company is not obligated to make any sales of the shares under the Sales Agreement. The offering of shares pursuant to the Sales Agreement will terminate upon the earlier of (a) the sale of all of the shares subject to the Sales Agreement or (b) the termination of the Sales Agreement by Cantor or the Company, as permitted therein. The initial agreement contemplated the sale of shares of the Company’s common stock having an aggregate offering price of up to $20.0 million. In December 2014, the Sales Agreement was amended in order for the Company to offer and sell additional shares of Common Stock having an aggregate offering price of $20.0 million.

On September 1, 2017, the Company filed with the SEC a “shelf” registration and sales agreement prospectus covering the offering, issuance and sale of our Common Stock that may be issued and sold under the existing Sales Agreement in an aggregate amount of up to $19.15 million. A total of $150 million of securities may be sold under this shelf registration, which was declared effective September 15, 2017.

During the nine months ended April 30, 2019 and 2018, the Company did not sell any shares of Common Stock under the Sales Agreement.

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Share-based compensation

On January 14, 2011, the Company’s stockholders approved the adoption of the 2011 Incentive Plan (the “2011 Plan”) which provides for the issuance of equity awards, including among others, options, restricted stock and restricted stock units for up to 3,000,000 Common Shares. The exercise price of options granted under the 2011 Plan, and consistent with other Plans, is equal to or greater than fair market value of the Common Stock on the date of grant. Unless terminated earlier by the Board of Directors, the 2011 Plan will terminate at the earliest of; (a) such time as no shares of Common Stock remain available for issuance under the 2011 Plan or (b) tenth anniversary of the effective date of the 2011 Plan. On January 5, 2018, the Company’s stockholders approved the amendment and restatement of the 2011 Plan to increase the number of shares available for issuance by 2,000,000 bringing the total number of shares available for award under the 2011 Plan to 5,000,000. Awards outstanding upon expiration of the 2011 Plan shall remain in effect until they have been exercised, terminated, or have expired.

The amounts of share-based compensation expense recognized in the periods presented are as follows:

	Three months ended April 30,				Nine months ended April 30,
	2019		2018		2019		2018
Stock options	$	197	$	202	$	718	$	609
Restricted stock		2		2		7		8
	$	199	$	204	$	725	$	617

The following table sets forth the amount of expense related to share-based payment arrangements included in specific line items in the accompanying statements of operations:

	Three months ended April 30,				Nine months ended April 30,
	2019		2018		2019		2018
Selling, general and administrative	$	199	$	204	$	725	$	617
	$	199	$	204	$	725	$	617

No excess tax benefits were recognized during the nine month periods ended April 30, 2019 and 2018.

Stock Option Plans

The following table summarizes stock option activity during the nine month period ended April 30, 2019:

	Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value (000s)
Outstanding at July 31, 2018		1,882,116		$	4.96
Awarded		712,821			2.81
Exercised		(238,230	)		2.69		$	117
Cancelled or expired		(3,500	)		5.86
Outstanding at end of period		2,353,207			4.53	3.1 years	$	496
Exercisable at end of period		1,215,231			5.24	1.0 years	$	22

As of April 30, 2019, the total future compensation cost related to non-vested options, not yet recognized in the statements of operations, was $1.2 million and the weighted average period over which the remaining expense of these awards is expected to be recognized is seventeen months.

The intrinsic value of in the money stock option awards at the end of the period represents the Company’s closing stock price on the last trading day of the period in excess of the exercise price multiplied by the number of options.

During the three months ended April 30, 2019 certain directors and officers of the Company exercised 203,511 stock options in non-cash transactions. The officers and directors received 23,376 net shares of common stock. The Company did not receive any proceeds from this exercise. The net shares issued represent the difference between the fair market value of the options on the date of exercise less the strike price cost to exercise the options.

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Performance Stock Units

To better align the long-term interest of executives with growing U.S. practices, beginning in fiscal 2018, the Company granted long-term incentive awards in the form of time based stock options and performance-based restricted stock units (“Performance Stock Units” or “PSUs”). The PSUs earned will be determined over a three-year performance period. The primary performance metrics will be revenue and Adjusted EBITDA growth. Payouts based on revenue and adjusted EBITDA goals will be modified based on Total Shareholder Return (“TSR”) performance relative to Enzo’s peer group.

During fiscal year 2018 and 2019, the Company awarded PSUs to its executive officers, this award provides for the grant of shares of our common stock at the end of a three–year period based on the achievement of average revenue growth and adjusted EBITDA growth over that period. As of April 30, 2019, the Company did not accrue any compensation expense for these PSU’s as the three-year performance period has just begun and achievement of the growth goals is currently not probable.

The following table summarizes PSU’s granted:

Period Ending	Total Grant		Fair Market Value At Grant Date (000s)
7/31/2018		32,000	$	141
1/31/2019		80,500	$	225

Restricted Stock Awards

The fair value of a restricted stock award is determined based on the closing stock price on the award date. As of April 30, 2019, there were 1,628 shares of unvested restricted stock which have a weighted average award price of $6.00 per share. As of April 30, 2019, there was approximately $10 of unrecognized compensation cost related to these unvested shares of restricted stock to be recognized over a weighted average remaining period of approximately twenty-one months. There were no awards made during the nine months ended April 30, 2019. During the nine months ended April 30, 2019, 985 restricted stock awards vested whose fair value was approximately $4.

The total number of shares available for grant as equity awards from the 2011 Incentive Plan is approximately 1,222,000 shares as of April 30, 2019.

During the nine months ended April 30, 2019, the Company contributed $832 to match its employees’ 401(k) contributions by issuing 315,472 shares of its common stock representing the fair value of the shares at the match date, and adjusted common stock and additional paid in capital by the same amount.

During the nine months ended April 30, 2018, the Company contributed $782 to match its employees’ 401(k) contributions with 106,911 shares of treasury stock and by issuing 37,580 shares of its common stock, representing the fair value of the shares at the match date, and adjusted treasury stock, common stock and additional paid in capital by the same amount.

Note 10 – Segment reporting

The Company has three reportable segments: Products, Clinical Services and Therapeutics. The Company’s Products segment develops, manufactures, and markets products to research and pharmaceutical customers. The Clinical Services segment provides diagnostic services to the health care community. The Company’s Therapeutics segment conducts research and development activities for therapeutic drug candidates. The Company evaluates segment performance based on segment income (loss) before taxes. Costs excluded from segment income (loss) before taxes and reported as “Other” consist of corporate general and administrative costs which are not allocable to the three reportable segments.

Legal fee expense incurred to defend the Company’s intellectual property, which may result in settlements recognized in another segment and other general corporate matters are considered a component of the Other segment. Legal fee expense specific to other segments’ activities have been allocated to those segments.

Legal settlements, net, represent activities for which royalties would have been received in the Company’s Products segment and expenses related to an investigation within the Clinical Services segment. Management of the Company assesses assets on a consolidated basis only and therefore, assets by reportable segment have not been

17

included in the reportable segments below. The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies.

The following financial information represents the operating results of the reportable segments of the Company:

Three months ended April 30, 2019

	Clinical Services			Products			Therapeutics			Other			Consolidated
Revenues	$	11,751		$	7,911			—			—		$	19,662
Operating costs, expenses and legal settlements, net:
Cost of revenues		10,963			3,397			—			—			14,360
Research and development		31			527		$	223			—			781
Selling, general and administrative		5,960			2,923			—		$	2,037			10,920
Legal fee expense		35			16			—			206			257
Legal settlements, net		—			(28,925	)		—			—			(28,925	)
Total operating costs, expenses and legal settlements, net		16,989			(22,062	)		223			2,243			(2,607	)
Operating income (loss)		(5,238	)		29,973			(223	)		(2,243	)		22,269
Other income (expense):
Interest		(18	)		19			—			257			258
Other		6			—			—			64			70
Foreign exchange loss		—			(332	)		—			—			(332	)
Income (loss) before income taxes	$	(5,250	)	$	29,660		$	(223	)	$	(1,922	)	$	22,265
Depreciation and amortization included above	$	440		$	340		$	—		$	58		$	838
Share-based compensation included in above:
Selling, general and administrative		40			24			—			135			199
Total	$	40		$	24		$	—		$	135		$	199
Capital expenditures	$	120		$	446		$	—		$	—		$	566

Three months ended April 30, 2018

	Clinical Services			Products			Therapeutics			Other			Consolidated
Revenues	$	17,737		$	7,493			—			—		$	25,230
Operating costs and expenses:
Cost of revenues		10,995			3,562			—			—			14,557
Research and development		—			576		$	223			—			799
Selling, general and administrative		6,252			2,970			—		$	1,799			11,021
Legal fee expense		25			19			—			1,607			1,651
Total operating costs and expenses		17,272			7,127			223			3,406			28,028
Operating income (loss)		465			366			(223	)		(3,406	)		(2,798	)
Other income (expense):
Interest		(22	)		12			—			237			227
Other		15			2			—			—			17
Foreign exchange loss		—			(462	)		—			—			(462	)
Income (loss) before income taxes	$	458		$	(82	)	$	(223	)	$	(3,169	)	$	(3,016	)
Depreciation and amortization included above	$	437		$	358		$	—		$	20		$	815
Share-based compensation included in above:
Selling, general and administrative		26			17			—			161			204
Total	$	26		$	17		$	—		$	161		$	204
Capital expenditures	$	465		$	96		$	—		$	—		$	561

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Nine months ended April 30, 2019

	Clinical Services			Products			Therapeutics			Other			Consolidated
Revenues	$	38,048		$	22,201			—			—		$	60,249
Operating costs, expenses and legal settlements, net:
Cost of revenues		32,956			10,391			—			—			43,347
Research and development		31			1,645		$	666			—			2,342
Selling, general and administrative		18,220			8,828			—		$	6,339			33,387
Legal fee expense		109			24			—			2,567			2,700
Legal settlements, net		—			(28,925	)		—			—			(28,925	)
Total operating costs, expenses and legal settlements, net		51,316			(8,037	)		666			8,906			52,851
Operating income (loss)		(13,268	)		30,238			(666	)		(8,906	)		7,398
Other income (expense):
Interest		(51	)		49			—			761			759
Other		17			—			—			232			249
Foreign exchange loss (gain)		—			(530	)		—			—			(530	)
(Loss) income before income taxes	$	(13,302	)	$	29,757		$	(666	)	$	(7,913	)	$	7,876
Depreciation and amortization included above	$	1,217		$	1,025		$	—		$	130		$	2,372
Share-based compensation included in above:
Selling, general and administrative		118			74			—			533			725
Total	$	118		$	74		$	—		$	533		$	725
Capital expenditures	$	883		$	524		$	—		$	6,147		$	7,554

Nine months ended April 30, 2018

	Clinical Services			Products		Therapeutics			Other			Consolidated
Revenues	$	56,001		$	22,257		—			—		$	78,258
Operating costs and expenses:
Cost of revenues		34,767			10,828		—			—			45,595
Research and development		—			1,690	$	668			—			2,358
Selling, general and administrative		18,454			8,476		—		$	6,045			32,975
Legal fee expense		46			47		—			3,689			3,782
Total operating costs and expenses		53,267			21,041		668			9,734			84,710
Operating income (loss)		2,734			1,216		(668	)		(9,734	)		(6,452	)
Other income (expense):
Interest		(70	)		35		—			604			569
Other		32			10		—			44			86
Foreign exchange loss		—			143		—			—			143
Income (loss) before income taxes	$	2,696		$	1,404	$	(668	)	$	(9,086	)	$	(5,654	)
Depreciation and amortization included above	$	1,254		$	1,039	$	—		$	57		$	2,350
Share-based compensation included in above:
Selling, general and administrative		86			61		—			470			617
Total	$	86		$	61	$	—		$	470		$	617
Capital expenditures	$	1,459		$	167	$	—		$	—		$	1,626

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Note 11 – Contingencies

There are three cases that are on appeal, which were originally brought by the Company in the United States District Court for the District of Delaware (“the Court”), alleging patent infringement against various companies. In 2017, the Court entered summary judgment against the Company that the asserted claims of the ‘180 and ‘405 Patents are invalid for nonenablement in cases involving Abbott, Becton Dickinson, Gen-Probe, Hologic, and Roche. The Company appealed the Court’s final judgment of invalidity in those cases to the United States Court of Appeals for the Federal Circuit (“Federal Circuit”), which were subsequently consolidated (“the Consolidated Appeals”). The Federal Circuit heard oral argument in the Consolidated Appeals on January 7, 2019, but it has not issued a ruling or opinion. In the Consolidated Appeals, the Company has asked the Federal Circuit to reverse the Court’s grants of final and summary judgment of invalidity of the asserted claims of the ‘180 and ‘405 patents and to remand the cases against Abbott, Becton Dickinson, and Roche to the Court. In April 2019, the Company entered into an agreement with Hologic and Grifols, resolving litigation resulting from four cases originally brought by the Company in the Court. As a result, Enzo dismissed (1) a stayed patent litigation regarding the ‘180 and ‘197 Patent against Hologic in the Court; (2) the Consolidated Appeals against Gen-Probe and Hologic resulting from two cases filed in the Court, and (3) the Company’s appeal in the Hologic III matter regarding the ‘581 Patent that involved both Hologic and Grifols; Hologic withdrew from Enzo’s Federal Circuit appeal of the Patent Trial and Appeal Board’s adverse rulings in two inter partes review proceedings regarding the ‘197 Patent filed by Hologic (“the ‘197 PTAB Appeals”). Of the original cases filed in the Court, the Abbott, Becton Dickinson, and Roche cases remain on appeal to the Federal Circuit. The ‘197 PTAB Appeals remain pending and are scheduled for argument on July 9, 2019.

Enzo Biochem, Inc. (the “Company”), along with its subsidiaries Enzo Life Sciences, Inc. entered into a Settlement Agreement as of February 5,2019 (the “Agreement) with Roche Diagnostics GmbH and Roche Molecular Systems, Inc. (together, “Roche”) with respect to an action between the Company and Roche before the U.S. District Court, Southern District of New York, Case No 04-CV4046. Roche agreed to pay the Company $21 million in settlement pursuant to the Agreement. The Company received $19.4 million net of attorney contingency payments. This settlement does not affect Enzo’s civil action for patent infringement against Roche in the U.S. District Court for the State of Delaware, Enzo Life Sciences Inc. v. Roche Molecular Systems Inc., et al., civil action No. 12 cv-00106, which remains pending on appeal.

Enzo Biochem, Inc. (the “Company”), along with its subsidiaries Enzo Life Sciences, Inc. entered into a settlement and license agreement as of April 16, 2019 (the “Agreement”) with Hologic, Inc. (“Hologic”), Grifols, S.A., and Grifols Diagnostic Solutions Inc. (together, “Grifols”) to settle all outstanding patent disputes among the parties. The terms of the agreement include one-time payments totaling $14 million to Enzo in exchange for fully paid-up, worldwide licenses to Hologic and Grifols. The Company received $9.5 million net of attorney contingency payments.

There can be no assurance that the Company will be successful in these litigations. Even if the Company is not successful, management does not believe that there will be a significant adverse monetary impact on the Company.

The Company is party to other claims, legal actions, complaints, and contractual disputes that arise in the ordinary course of business. The Company believes that any liability that may ultimately result from the resolution of these matters will not, individually or in the aggregate, have a material adverse effect on its financial position or results of operations.

As described in Note 3, third-party payers, including government programs, may decide to deny payment or recoup payments for testing that they contend was improperly billed or not medically necessary, against their coverage determinations, or for which they believe they have otherwise overpaid (including as a result of their own error), and we may be required to refund payments already received. During the third fiscal quarter of 2019, a significant third-party payer informed us outside of their typical business practice that they believe it overpaid the Company during certain periods of fiscal 2018. The Company disputes these claims and has formally sent legal appeal letters to the payer. At this time, the Company is unable to determine the probability of the outcome of these appeals or reasonably estimate a range of potential losses associated with this claim.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes and other information included elsewhere in this Quarterly Report on Form 10-Q.

Forward-Looking Statements

Our disclosure and analysis in this report, including but not limited to the information discussed in this Item 2, contain forward-looking information about our Company’s financial results and estimates, business prospects and products in research and development that involve substantial risks and uncertainties. From time to time, we also may provide oral or written forward-looking statements in other materials we release to the public. Forward-looking statements give our current expectations or forecasts of future events. You can identify these statements by the fact that they do not relate strictly to historic or current facts. They use words such as “anticipate”, “estimate”, “expect”, “project”, “intend”, “plan”, “believe”, “will”, and other words and terms of similar meaning in connection with any discussion of future operations or financial performance.

In particular, these include statements relating to future actions, prospective products or product approvals, future performance or results of current and anticipated products, sales efforts, expenses, interest rates, foreign currency rates, intellectual property matters, the outcome of contingencies, such as legal proceedings, and financial results.

We cannot guarantee that any forward-looking statement will be realized, although we believe we have been prudent in our plans and assumptions. Achievement of future results is subject to risks, uncertainties and inaccurate assumptions. Should known or unknown risks or uncertainties materialize, or should underlying assumptions prove inaccurate, actual results could vary materially from past results and those anticipated, estimated or projected. As a result, investors are cautioned not to place undue reliance on any of our forward-looking statements. Investors should bear this in mind as they consider forward-looking statements. We do not assume any obligation to update or revise any forward-looking statement that we make, even if new information becomes available or other events occur in the future. We are also affected by other factors that may be identified from time to time in our filings with the Securities and Exchange Commission, some of which are set forth in Item 1A - Risk Factors in our Form 10-K filing for the July 31, 2018 fiscal year and updated in Item 1A. “Risk Factors in this Form 10-Q, You are advised to consult any further disclosures we make on related subjects in our Forms 10-Q, 8-K and 10-K reports to the Securities and Exchange Commission. Although we have attempted to provide a list of important factors which may affect our business, investors are cautioned that other factors may prove to be important in the future and could affect our operating results.

You should understand that it is not possible to predict or identify all such factors or to assess the impact of each factor or combination of factors on our business. Consequently, you should not consider any such list to be a complete set of all potential risks or uncertainties.

Overview

Enzo Biochem, Inc. (the “Company” “we”, “our” or “Enzo”) is an integrated diagnostic bioscience company focusing on delivering and applying advanced technology capabilities to produce affordable reliable products and services to allow our customers to meet their clinical needs. We are leading the convergence of clinical laboratories, life sciences, and intellectual property through the development of unique diagnostic platform technologies that provide numerous advantages over previous standards. Utilizing cross-functional teams, we develop, manufacture and sell our proprietary technology solutions and platforms to clinical laboratories, specialty clinics and researchers and physicians globally. Enzo’s structure and business strategy represent the culmination of years of extensive planning and work. The Company now has the unique ability to offer low cost, high performance products and services in molecular diagnostics, which ideally positions us to capitalize on the reimbursement pressures facing diagnostic labs. Our pioneering work in genomic analysis coupled with our extensive patent estate and enabling platforms have positioned the Company to continue to play an important role in the rapidly growing molecular medicine marketplaces.

Enzo technology solutions and platforms and unique operational structure are designed to reduce overall healthcare costs for both government and private insurers. Our proprietary technology platforms reduces our customers’ need for multiple, specialized instruments, and offer a variety of high throughput capabilities together with a demonstrated high level of accuracy and reproducibility. Our genetic test panels are focused on large and growing markets primarily in the areas of personalized medicine, women’s health, infectious diseases and genetic disorders. For example, our AMPIPROBE® technology platform can lead to the development of an entire line of nucleic acid clinical products that can allow laboratories to offer a complete menu of services at a cost that allows them to enjoy an acceptable margin.

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Our technology solutions provide tools to physicians, clinicians and other healthcare providers to improve detection, treatment and monitoring of a broad spectrum of diseases and conditions.In addition, reduced patient to physician office visits translates into lower healthcare processing costs and greater patient services.

In the course of our research and development activities, we have built a substantial portfolio of intellectual property assets, comprised of 343 issued patents worldwide and over 157 pending patent applications, along with extensive enabling technologies and platforms.

Below are brief descriptions of each of our operating segments (See Note 10 in the Notes to Consolidated Financial Statements):

Clinical Services is a clinical reference laboratory providing a wide range of clinical services to physicians, medical centers, other clinical labs and pharmaceutical companies. The Company believes having a CLIA-certified and a College of American Pathologists (“CAP”) accredited medical laboratory located in New York provides us the opportunity to more rapidly introduce cutting edge products and services to the clinical marketplace. Enzo Clinical Services offers an extensive menu of molecular and other clinical laboratory tests and procedures used in patient care by physicians to establish or support a diagnosis, monitor treatment or medication, and search for an otherwise undiagnosed condition. Our laboratory is equipped with state-of-the-art communication and connectivity solutions enabling the rapid transmission, analysis and interpretation of generated data. We operate a full service clinical laboratory in Farmingdale, New York, a network of over 30 patient service centers throughout New York, New Jersey and expanding into Connecticut, a free standing “STAT” or rapid response laboratory in New York City and a full service phlebotomy, in-house logistics department, and an information technology department. Given our license in New York State, we are able to offer testing services to clinical laboratories and physicians in the majority of states nationwide.

Products manufactures, develops and markets products and tools for clinical research, drug development and bioscience research customers worldwide. Underpinned by broad technological capabilities, Enzo Life Sciences has developed proprietary products used in the identification of genomic information by laboratories around the world. Information regarding our technologies can be found in the “Core Technologies” section of our Form 10-K. We are internationally recognized and acknowledged as a leader in the development, manufacturing validation and commercialization of numerous products serving not only the clinical research market, but also the life sciences markets in the fields of cellular analysis and drug discovery, among others. Our operations are supported by global operations allowing for the efficient marketing and delivery of our products around the world.

Therapeutics is a biopharmaceutical venture that has developed multiple novel approaches in the areas of gastrointestinal, infectious, ophthalmic and metabolic diseases, many of which are derived from the pioneering work of Enzo Life Sciences. Enzo Therapeutics has focused its efforts on developing treatment regimens for diseases and conditions for which current treatment options are ineffective, costly, and/or cause unwanted side effects. This focus has generated a clinical and preclinical pipeline, as well as more than 154 patents and patent applications.

22

Results of Operations

Three months ended April 30, 2019 compared to April 30, 2018
(in 000s)

Comparative Financial Data for the Three Months Ended April 30,

	2019			2018			Increase (Decrease)			% Change
Revenues		19,662		$	25,230		$	(5,568	)		(22)
Operating costs and expenses:
Cost of revenues		14,360			14,557			(197	)		(1)
Research and development		781			799			(18	)		(2)
Selling, general and administrative		10,920			11,021			(101	)		(1)
Legal fee expense		257			1,651			(1,394	)		(84)
Legal settlements, net		(28,925	)		—			(28,925	)		**
Total operating costs and expenses		(2,607	)		28,028			(30,635	)		**
Operating income (loss)		22,269			(2,798	)		25,067			**
Other income (expense):
Interest		258			227			(31	)		(14)
Other		70			17			53			312
Foreign currency loss		(332	)		(462	)		130			(28)
Income (loss) before income taxes	$	22,265		$	(3,016	)	$	25,281			**

** not meaningful

Consolidated Results:

The “2019 period” and the “2018 period” refer to the three months ended April 30, 2019 and 2018, respectively.

Clinical services revenues for the 2019 period were $11.7 million compared to $17.7 million in the 2018 period, a decrease of $6.0 million or 34%. Services revenues were negatively affected by lower genetics testing volume approximating $2.2 million of the total decrease, attributable to increased competition. Services revenues were negatively affected by lower reimbursement rates of $3.6 million, of which $1.7 million is attributable to reduced genetics testing reimbursements as a result of an increase in denial rates and changes to medical and procedural requirements, and $1.9 million attributable to reimbursement rate declines from third party payers and the impact from Protecting Access to Medicare Act (“PAMA”). During the 2019 period, adjustments to estimated collection amounts from third party payers and HMO’s also decreased services revenues by $0.2 million. Total diagnostic testing volume measured by the number of accessions increased approximately 1%. In the normal course of business, estimated collection amounts are subject to the complexities and ambiguities of third party payer billing, reimbursement regulations and claims processing, as well as issues unique to Medicare and Medicaid programs, and require us to consider the potential for adjustments when estimating variable consideration in the recognition of revenue in the period that the related services are rendered.

Products revenues for the 2019 period was $7.9 million compared to $7.5 million in the 2018 period, an increase of $0.4 million or 6% due to higher product order volume in the U.S. partially offset by the negative impact of foreign exchange translation. There was no royalty income in the 2019 period as the license agreement expired near the end of the 2018 period. Royalty income in the 2018 period was $0.1 million.

The cost of clinical services during both the 2019 and 2018 periods was $11.0 million. During the 2019 period, the cost of outside reference lab testing for genetic testing decreased $0.4 million as compared to the 2018 period, but was offset by an increase of $0.3 million for reagent and other test supplies, and an increase in lab salaries of $0.1 million.

Clinical services gross profit margin was 6.7% in the 2019 period and 38.0% in the 2018 period. The decline was due to a change in the mix of tests from higher reimbursed genetic testing in the 2018 period to lower reimbursed routine or esoteric testing in the 2019 period. In addition, gross margin was also negatively impacted by reimbursement pressure from PAMA which has resulted in declining government and third party payer reimbursement rates, and by adjustments described above. PAMA calls for further downward revision of reimbursement rates effective January 1, 2020 and so we expect reimbursement rate pressure to continue to impact our industry and our operations.

23

The cost of products revenues was $3.4 million in the 2019 period and $3.6 million in the 2018 period, a decrease of $0.2 million or 5% due to mix of products sold and lower compensation expense. The gross profit margin on products was 57.1% in the 2019 period and 52.0% in the 2018 period.

Research and development expenses were $0.8 million in the 2019 and 2018 periods. The expense for Life Sciences Products was $0.6 million in both periods and the expense for the Enzo Therapeutics was $0.2 million in both periods.

Selling, general and administrative expenses were approximately $10.9 million during the 2019 period versus $11.0 million during the 2018 period, a decrease of $0.1 million or 1%. Clinical Services expense decreased $0.3 million as the cost of outside billing and collections activities decreased $0.4 million, partially offset by an increase of $0.1 million in other expenses. The cost of increased sales headcount to market our new molecular diagnostic products for use by other reference labs was offset by lower commissions paid on lower cash collections. The Products expense was unchanged. The Other segment expense increased $0.2 million, due to an increase in office and occupancy related expenses.

Legal fee expense was $0.3 million during the 2019 period compared to $1.7 million in the 2018 period, a decrease of $1.4 million due to the timing of legal activity and related costs associated with on-going litigation and contract dispute where the Company is the plaintiff.

Legal settlements, net were $28.9 million in the 2019 period versus none in the 2018 period. During the 2019 period the Company as plaintiff finalized and executed settlement agreements with Roche ($19.4 million, net), and Hologic Inc. ($9.5 million, net).

Interest income, net was approximately $0.2 million in both the 2019 and 2018 periods and is earned on cash and cash equivalents.

The foreign currency loss during the 2019 period was $0.3 million compared to $0.4 million in the 2018 period, an improvement of $0.1 million or 28%, due to lesser depreciation of the Euro, British pound and Swiss franc versus the U.S. dollar experienced within the Products segment during the 2019 period compared to that of the 2018 period.

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Results of Operations

Nine months ended April 30, 2019 compared to April 30, 2018
(in 000s)

Comparative Financial Data for the Nine Months Ended April 30,

	2019			2018			Increase (Decrease)			% Change
Revenues	$	60,249		$	78,258		$	(18,009	)		(23)
Operating costs and expenses:
Cost of revenues		43,347			45,595			(2,248	)		(5)
Research and development		2,342			2,358			(16	)		(1)
Selling, general and administrative		33,387			32,975			412			1
Legal fee expense		2,700			3,782			(1,082	)		(29)
Legal settlements, net		(28,925	)		—			(28,925	)		**
Total operating costs and expenses		52,851			84,710			(31,859	)		(38)
Operating income (loss)		7,398			(6,452	)		13,850			**
Other income (expense):
Interest		759			569			190			33
Other		249			86			163			190
Foreign currency (loss) gain		(530	)		143			(673	)		**
Income (loss) before income taxes	$	7,876		$	(5,654	)	$	13,530			**

** not meaningful

Consolidated Results:

The “2019 period” and the “2018 period” refer to the nine months ended April 30, 2019 and 2018, respectively.

Clinical services revenues for the 2019 period were $38.0 million compared to $56.0 million in the 2018 period, a decrease of $18.0 million or 32%. Services revenues were negatively affected by lower total testing volume approximating $8.3 million, of which $7.6 million is attributed to genetics testing due to increased competition. Services revenues were negatively affected by lower reimbursement rates of $8.0 million, of which $5.1 million is attributable to reduced genetics testing reimbursements as a result of an increase in denial rates and changes to medical and procedural requirements, and $3.2 million attributable to reimbursement rate declines from third party payers and the impact from PAMA. During the 2019 period, adjustments to estimated collection amounts from third party payers and HMO’s also decreased services revenues by $1.3 million. There were no adjustments in the 2018 period. In the normal course of business, estimated collection amounts are subject to the complexities and ambiguities of third party payer billing, reimbursement regulations and claims processing, as well as issues unique to Medicare and Medicaid programs, and require us to consider the potential for adjustments when estimating variable consideration in the recognition of revenue in the period that the related services are rendered.

Products revenues for the 2019 period was $22.2 million compared to $21.6 million in the 2018 period, an increase of $0.6 million or 3% due to higher product order volume in the U.S. market, which was partially offset by lower product order volume in the international market and the negative impact of foreign exchange translation. There was no royalty income in the 2019 period as the license agreement expired at the end of the 2018 period. Royalty income in 2018 period was $0.6 million.

The cost of clinical services during the 2019 period was $33.0 million as compared to $34.8 million in the 2018 period, a decrease of $1.8 million or 5% primarily due to the change in test mix, especially the decline in genetic testing volume. The components of the decrease are $2.8 million for outside reference lab testing costs and internalizing the use of our AMPIPROBE® technology platform, partially offset by increases in reagent and other test supplies of $0.4 million, compensation related expenses of $0.4 million and other lab expenses of $0.2 million.

Gross profit margin was 13.4% in the 2019 period and 37.9% in the 2018 period. The decline was due to a change in the mix of tests from higher reimbursed genetic testing in the 2018 period to lower reimbursed routine or esoteric testing in the 2019 period. In addition, gross margin was also negatively impacted by reimbursement pressure from PAMA which has resulted in declining government and third party payer reimbursement rates and by adjustments

25

described above. PAMA calls for further downward revision of reimbursements rates effective January 1, 2020 and so we expect reimbursement rate pressure to continue to impact our industry and our operations.

The cost of products revenues was $10.4 million in the 2019 period and $10.8 million in the 2018 period, a decrease of $0.4 million or 4% due to the mix of products sold and lower compensation expense.The gross profit margin on products was 53.2% in the 2019 period and 50.0% in the 2018 period.

Research and development expenses were $2.3 million in the 2019 and 2018 periods. The expense for Life Sciences Products was $1.6 million in both periods and the expense for the Enzo Therapeutics was $0.7 million in both periods.

Selling, general and administrative expenses were approximately $33.3 million during the 2019 period versus $33.0 million during the 2018 period, an increase of $0.3 million or 1%. Clinical Services expense decreased $0.3 million, due to a decrease of $1.1 million in outside billing and collections expenses, partially offset by the cost of increased headcount to market our new molecular diagnostic products for use by other reference labs of approximately $0.3 million, and increases in the cost of information technology, billing operations, and professional fees totalling $0.5 million. The Products expense increased $0.3 million due to increased headcount focused on sales, marketing and business development of our diagnostic platform technologies. The Other segment expense increased $0.3 million due to office and occupancy related expenses and health care costs.

Legal fee expense was $2.7 million during the 2019 period compared to $3.8 million in the 2018 period, an increase of $1.1 million due to the timing of legal activity and related costs associated with on-going litigation and contract dispute where the Company is the plaintiff.

Legal settlements, net were $28.9 million in the 2019 period versus none in the 2018 period. During the 2019 period the Company as plaintiff finalized and executed settlement agreements with Roche ($19.4 million, net), and Hologic Inc. ($9.5 million, net).

Interest income, net increased $0.2 million in the 2019 period due to increased interest rates earned on cash and cash equivalents.

The foreign currency loss during the 2019 period was $0.5 million compared to a gain of $0.2 million in the 2018 period, an unfavorable variance of $0.7 million, due to the significant depreciation of the Euro, British pound and Swiss franc versus the U.S. dollar experienced within the Products segment during the 2019 period compared to that of the 2018 period.

Liquidity and Capital Resources

At April 30, 2019, the Company had cash and cash equivalents and restricted cash of $64.8 million of which $0.4 million was in foreign accounts, as compared to cash and cash equivalents of $60.0 million, of which $0.4 million was in foreign accounts at July 31, 2018. It is the Company’s current intent to permanently reinvest these funds outside of the United States, and its current plans do not demonstrate a need to repatriate them to fund its United States operations. The Company had working capital of $70.5 million at April 30, 2019 compared to $63.0 million at July 31, 2018. The increase in working capital of $7.5 million was primarily due to the legal settlements offset by net changes in operating assets and liabilities.

Net cash provided by operating activities during the 2019 period was approximately $8.0 million as compared to cash used in operating activities of $0.5 million during the 2018 period, an increase of approximately $8.5 million. The increase is mainly due to the change in net income of $12.4 million as a result of two legal settlement agreements offset by net changes in assets and liabilities of $4.7 million.

Net cash used in investing activities in fiscal 2019 and 2018 was approximately $7.6 million and $1.7 million, respectively. The increase in the 2019 period is mainly due to the purchase of our new facility.

Net cash provided by financing activities in fiscal 2019 $4.4 million as compared to $0.5 million in fiscal 2018. The change of $3.9 million is mainly due to a mortgage agreement entered into for the purchase of our new facility.

The mortgage agreement, which provides for a loan of $4.5 million for a term of 10 years, bears a fixed interest rate of 5.09% per annum and requires monthly mortgage payments of $30. At April 30, 2019, the balance owed under the mortgage agreement was $4.4 million. The Company’s obligations under the mortgage agreement are secured by the new facility and by a $750 cash collateral deposit with the mortgagee as additional security. This restricted cash is included in other assets as of April 30, 2019. See Note 7 – Loan Payable.

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The Company believes that its current cash and cash equivalents level, utilization of the Controlled Equity Offering program if necessary, and the net proceeds received under the legal settlement agreements with Roche, Hologic and Grifols during fiscal 2019 are sufficient for its foreseeable liquidity and capital resource needs over at least the next twelve (12) months, although there can be no assurance that future events will not alter such view. We expect our cash reserves will be reduced over the next four quarters as we implement our strategy of developing innovative diagnostic platforms and assays for use by independent labs. Although there can be no assurances, in the event additional capital is required, the Company believes it has the ability to raise additional funds through equity offerings or other sources. Our liquidity plans are subject to a number of risks and uncertainties, including those described in the Item 1A. “Risk Factors” section of our Form 10-K for the year ended July 31, 2018, and updated in Item 1A. “Risk Factors” in this Form 10-Q, some of which are outside our control. Macroeconomic conditions could limit our ability to successfully execute our business plans and therefore adversely affect our liquidity plans.

Contractual Obligations

The Company completed the $6 million purchase of a 36,000 square foot commercial facility and as part of the purchase entered into a mortgage of $4.5 million with a 10 year term and bearing a fixed interest rate of 5.09%. See Note 7 – Loan Payable. There have been no other material changes to our Contractual Obligations as reported in our Form 10-K for the fiscal year ended July 31, 2018.

Management is not aware of any material claims, disputes or settled matters concerning third party reimbursement that would have a material effect on our financial statements, except as disclosed in Note 11 to the Consolidated Financial Statements.

Off-Balance Sheet Arrangements

The Company does not have any “off-balance sheet arrangements” as such term is defined in Item 303(a)(4) of Regulation S-K.

Critical Accounting Policies

The Company’s discussion and analysis of its financial condition and results of operations are based upon Enzo Biochem, Inc.’s consolidated financial statements, certain information and footnote disclosure, normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States, have been condensed or omitted, as permitted under rules promulgated by the Security and Exchange Commission. The preparation of these financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. These estimates and judgments also affect related disclosure of contingent assets and liabilities.

On an on-going basis, we evaluate our estimates, including those related to contractual expense, allowance for uncollectible accounts, inventory, intangible assets and income taxes. The Company bases its estimates on experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Revenues – Clinical Services

Contractual Adjustment

The Company’s estimate of contractual adjustment is based on significant assumptions and judgments, such as its interpretation of payer reimbursement policies, and bears the risk of change. The estimation process is based on the experience of amounts approved as reimbursable and ultimately settled by payers, versus the corresponding gross amount billed to the respective payers. The contractual adjustment is an estimate that reduces gross revenue, based on gross billing rates, to amounts expected to be approved and reimbursed. Gross billings are based on a standard fee schedule we set for all third party payers, including Medicare, HMO’s and managed care. The Company adjusts the contractual adjustment estimate quarterly, based on its evaluation of current and historical settlement experience with payers, industry reimbursement trends, and other relevant factors. The other relevant factors that affect our contractual adjustment include the monthly and quarterly review of: 1) current gross billings and receivables and reimbursement by payer, 2) current changes in third party arrangements and 3) the growth of in-network provider arrangements and managed care plans specific to our Company.

27

Our clinical business is primarily dependent upon reimbursement from third-party payers, such as Medicare (which principally serves patients 65 and older) and insurers. We are subject to variances in reimbursement rates among different third-party payers, as well as constant changes of reimbursement rates. Changes that decrease reimbursement rates or coverage would negatively impact our revenues. The number of individuals covered under managed care contracts or other similar arrangements has grown over the past several years and may continue to grow in the future. In addition, Medicare and other government healthcare programs continue to shift to managed care. These trends will continue to reduce our revenues from these programs.

During the three months ended April 30, 2019 and 2018, the contractual adjustment percentages, determined using current and historical reimbursement statistics, were 89.1% and 85.1%, respectively, of gross billings. During the nine months ended April 30, 2019 and 2018, the contractual adjustment percentages, determined using current and historical reimbursements statistics, were 88.4% and 84.7%, respectively. In general, the Company believes a decline in reimbursement rates or a shift to managed care or similar arrangements may be offset by the positive impact of an increase in the number of molecular tests we perform. However, there can be no assurance that we can increase the number of tests we perform or that if we do increase the number of tests we perform, that we can maintain that higher number of tests performed, or that an increase in the number of tests we perform would result in increased revenue.

The Company estimates (by using a sensitivity analysis) that each 1% point change in the contractual adjustment percentage could result in a change in clinical services revenues of approximately $3.3 million and $3.8 million for the nine months ended April 30, 2019 and 2018, respectively, and a change in the net accounts receivable of approximately $0.5 million as of April 30, 2019.

Our clinical services financial billing system records gross billings using a standard fee schedule for all payers and does not record contractual adjustment by payer at the time of billing. Therefore, we are unable to quantify the effect contractual adjustments recorded during the current period have on revenue recorded in a previous period. However, we can reasonably estimate our monthly contractual adjustment to revenue on a timely basis based on our quarterly review process, which includes:

• an analysis of industry reimbursement trends;

• an evaluation of third-party reimbursement rates changes and changes in reimbursement arrangements with third-party payers;

• a rolling monthly analysis of current and historical claim settlement and reimbursement experience statistics with payers; and

• an analysis of current gross billings and receivables by payer.

Accounts Receivable

Accounts receivable are reported at realizable value, net of allowances for doubtful accounts, which is estimated and recorded in the period of the related revenue.

The following is a table of the Company’s net accounts receivable by services and by products. Net receivables for Clinical Services are detailed by billing category and as a percent to its total net receivables. At April 30, 2019, and July 31, 2018, approximately 66% and 75%, respectively, of the Company’s net accounts receivable relates to its services business, which operates in the New York, New Jersey and Connecticut medical communities.

The accounts receivable balance for Products includes $1.2 million or 30% and $1.1 million or 32% of foreign receivables as of April 30, 2019 and July 31, 2018, respectively.

Net accounts receivable

Billing category	As of April 30, 2019				As of July 31, 2018
Clinical Services
Third party payers	$	3,210	44	%	$	4,692	48	%
Patient self-pay		2,363	32			2,010	20
Medicare		1,287	17			1,740	18
HMO’s		537	7			1,329	14
Total Clinical Services		7,397	100	%		9,771	100	%
Total Products		4,044				3,376
Total accounts receivable	$	11,441			$	13,147

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The Company’s ability to collect outstanding receivables from third party payers is critical to its operating performance and cash flows. The primary collection risk lies with uninsured patients or patients for whom primary insurance has paid but a patient portion remains outstanding. The Company also assesses the current state of its billing functions in order to identify any known collection or reimbursement issues in order to assess the impact, if any, on the allowance estimates, which involves judgment.

The Company believes that the collectability of its receivables is directly linked to the quality of its billing processes, most notably, those related to obtaining the accurate patient information in order to bill effectively for the services provided. Should circumstances change (e.g. shift in payer mix, decline in economic conditions or deterioration in aging of receivables), our estimates of net realizable value of receivables could be reduced by a material amount.

Billing for clinical services is complicated because of many factors, especially: the differences between our standard gross fee schedule for all payers and the reimbursement rates of the various payers we deal with, disparity of coverage and information requirements among the various payers, and disputes with payers as to which party is responsible for reimbursement.

The following table indicates the Clinical Services aged gross receivables by payer group which is prior to adjustment to gross receivables for: 1) contractual adjustment, 2) fully reserved balances not yet written off, and 3) other revenue adjustments.

As of April 30, 2019	Total		%			Third Party Payers		%			Medicare		%			Self-Pay		%			HMO’s		%
1-30 days	$	20,484		46		$	13,048		48		$	3,751		42		$	1,392		22		$	2,293		91
31-60 days		7,701		17			4,828		18			1,255		14			1,482		23			136		5
61-90 days		4,496		10			2,830		10			725		8			924		14			17		1
91-120 days		3,768		8			2,253		8			773		9			715		11			27		1
121-150 days		1,787		4			986		4			373		4			421		7			7		—
Greater than 150 days		6,760		15			3,213		12			2,045		23			1,453		23			49		2
Totals	$	44,996		100	%	$	27,158		100	%	$	8,922		100	%	$	6,387		100	%	$	2,529		100	%
As of July 31, 2018	Total		%			Third Party Payers		%			Medicare		%			Self-Pay		%			HMO’s		%
1-30 days	$	22,788		47		$	14,886		48		$	4,102		46		$	864		15		$	2,936		90
31-60 days		6,821		14			4,540		15			1,069		12			995		17			217		7
61-90 days		4,526		9			2,877		9			784		9			843		15			22		1
91-120 days		3,460		7			2,307		8			463		5			666		11			24		1
121-150 days		2,705		6			1,602		5			490		6			601		10			12		—
Greater than 150 days		8,357		17			4,481		15			1,976		22			1,862		32			38		1
Totals	$	48,657		100	%	$	30,693		100	%	$	8,884		100	%	$	5,831		100	%	$	3,249		100	%

Income Taxes

The Company accounts for income taxes under the liability method of accounting for income taxes. Under the liability method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. The liability method requires that any tax benefits recognized for net operating loss carry forwards and other items be reduced by a valuation allowance where it is not more likely than not the benefits will be realized in the foreseeable future. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under the liability method, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

It is the Company’s policy to provide for uncertain tax positions and the related interest and penalties based upon management’s assessment of whether a tax benefit is more likely than not to be sustained upon examination by tax authorities. To the extent the Company prevails in matters for which a liability for an unrecognized tax benefit is established or is required to pay amounts in excess of the liability, the Company’s effective tax rate in a given financial statement period may be affected.

29

Inventory

The Company values inventory at the lower of cost (first-in, first-out) or net realizable value, which approximates market. Work-in-process and finished goods inventories consist of material, labor, and manufacturing overhead. Write downs of inventories to net realizable value are based on a review of inventory quantities on hand and estimated sales forecasts based on sales history and anticipated future demand. Unanticipated changes in demand could have a significant impact on the value of our inventory and require additional write downs of inventory which would impact our results of operations.

Goodwill and Intangible Assets

Goodwill represents the excess of the cost of an acquisition over the fair value of the net assets acquired. Intangible assets, arose primarily from acquisitions, and primarily consist of customer relationships, trademarks, licenses, and website and database content. Finite-lived intangible assets are amortized according to their estimated useful lives, which range from 4 to 15 years.

The Company tests goodwill and long-lived assets annually as of the first day of the fourth quarter, or more frequently if indicators of potential impairment exist. In assessing goodwill and long-lived assets for impairment, the Company has the option to perform a qualitative assessment to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the Company determines that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, the Company is not required to perform a quantitative test in assessing goodwill and long-lived assets for impairment. However, if the Company concludes otherwise or elects not to perform the qualitative assessment, then it identifies the reporting units and compares the fair value of each of these reporting units to their respective carrying amount. If the carrying amount of the reporting unit is less than its fair value, no impairment exists. If the carrying amount of the reporting unit is higher than its fair value, the impairment charge is the amount by which the carrying amount exceeds its fair value, not to exceed the total amount of goodwill and intangibles allocated to the reporting unit. As of April 30, 2019, the Company determined that indicators of potential impairment of goodwill existed for the Clinical Services unit due to the recent decline of its revenues. The Company determined that no impairment charge was necessary, based on a quantitative analysis.

Restricted Cash

As of April 30, 2019 the Company had a mortgage collateralized by a money market account of $750 to the benefit of the mortgagee of the Company’s recently purchased building. This restricted cash was classified as other assets as of April 30, 2019.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to market risk from changes in foreign currency exchange rates resulting from acquisitions with foreign locations (See Item 1A. Risk Factors section of the Form 10-K for the fiscal year ended July 31, 2018) that could impact our results of operations and financial position. We do not currently engage in any hedging or market risk management tools.

Foreign Currency Exchange Rate Risk

The financial reporting of our non-U.S. subsidiaries is denominated in currencies other than the U.S. dollar. Since the functional currency of our non-U.S. subsidiaries is the local currency, foreign currency translation adjustments are accumulated as a component of accumulated other comprehensive income in stockholders’ equity. Assuming a hypothetical increase of 10% in the value of the U.S. dollar versus foreign currencies at April 30, 2019, our assets and liabilities would decrease by $0.4 million and $0.1 million, respectively, and our net sales and net earnings (loss) would decrease by $0.9 million and $0.2 million, respectively, on an annual basis.

We also maintain intercompany balances and loans with subsidiaries in different local currencies. These amounts are at risk of foreign exchange losses if exchange rates fluctuate. Assuming a hypothetical increase of 10% in the value of the U.S. dollar versus foreign currencies, our pre-tax earnings (loss) would be unfavorably impacted by approximately $1.5 million on an annual basis.

Interest Rate Risk

As of April 30, 2019, we have fixed interest rate financing on a building mortgage and on transportation and equipment leases.

30

Item 4. Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this report, the Company’s management conducted an evaluation (as required under Rules 13a-15(b) and 15d-15(b) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) of the Company’s “disclosure controls and procedures” (as such term is defined under the Exchange Act), under the supervision and with the participation of the principal executive officer and the principal financial officer. Based on this evaluation, the principal executive officer and the principal financial officer concluded that the Company’s disclosure controls and procedures are not effective as of the end of the period covered by this report as management identified deficiencies in internal control over financial reporting that were determined to be material weaknesses. Notwithstanding the foregoing, a control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that it will detect or uncover failures within the Company to disclose material information otherwise required to be set forth in the Company’s periodic reports.

(b) Changes in Internal Controls over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the quarter ended April 30, 2019 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Plan to Remediate Material Weaknesses

As of April 30, 2019, we are in the process of remediating the material weaknesses over financial reporting identified and reported in our Form 10-K for the fiscal year ended July 31, 2018 related to (1) insufficient controls to fully and timely take into account changes in the business environment and experience with ultimate collection from third-party payers in the determination of contractual adjustment amounts and collectability of accounts receivable and (2) inadequate information technology controls intended to control change management, program access and monitoring; however, the material weaknesses cannot be considered remediated until the procedures designed to address the deficient controls have been tested for effectiveness.  

31

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

There have been no other material developments with respect to previously reported legal proceedings discussed in the annual report on Form 10-K for the fiscal year ended July 31, 2018 filed with the Securities and Exchange Commission, other than as noted in Note 11 to the Consolidated Financial Statements as of April 30, 2019.

Item 1A. Risk Factors

The risk factors disclosed in Part 1, Item 1A of the Company’s Annual Report on Form 10-K for the fiscal year ended July 31, 2018 are updated to include the following:

Risk relating to our debt

Our use of leverage may expose us to substantial risks

As of April 30, 2019, we had $4.4 million in borrowings under a ten year mortgage agreement with Citibank, N.A., which bears a fixed interest rate of 5.09% per annum. We may incur additional indebtedness in the future. Accordingly, we are exposed to the typical risks associated with the use of leverage. Increased leverage makes it more difficult for us to withstand adverse economic conditions or business plan variances, to take advantage of new business opportunities, or to make necessary capital expenditures. The mortgage agreement includes customary affirmative and negative covenants and events of default, as defined. Events of default include non-payment of principal and interest on debt outstanding, non-performance of covenants, material changes in business, breach of representations, bankruptcy or insolvency, and changes in control. Our ability to maintain our compliance with these covenants is dependent on our financial performance, which is influenced by a number of factors. Violation of any of these covenants would result in an event of default under the mortgage agreement. Upon the occurrence of an event of default that is not cured or waived, the lender would have the ability to accelerate the repayment of all amounts then outstanding under the mortgage agreement.

Item 6. Exhibits

Exhibit No.	Exhibit
31.1	Certification of Elazar Rabbani, Ph.D. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Barry Weiner pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Elazar Rabbani, Ph.D. pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Barry Weiner pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101. INS*	XBRL Instance Document
101. SCH*	XBRL Taxonomy Extension Schema Document
101. CAL*	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*	XBRL Taxonomy Extension Definitions Linkbase Document
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document

*XBRL (Extensible Business Reporting Language) information is being furnished and not filed for purposes of Sections 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934.

32

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	ENZO BIOCHEM, INC.
	(Registrant)
Date: June 10, 2019	by:	/s/ Barry Weiner
		President, Chief Financial Officer, Principal Accounting Officer, Treasurer and Director

33

EX-31.1

EXHIBIT 31.1

CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Elazar Rabbani, Ph.D., certify that:

1. I have reviewed this quarterly report on Form 10-Q of Enzo Biochem, Inc. (the “registrant”).

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a – 15(e) and 15d – 15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: June 10, 2019

By:	/s/ Elazar Rabbani, Ph.D.
	Elazar Rabbani, Ph.D.
	Chairman of the Board, Chief Executive Officer and Secretary

EX-31.2

EXHIBIT 31.2

CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Barry Weiner, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Enzo Biochem, Inc. (the “registrant”).

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a – 15(e) and 15d – 15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: June 10, 2019

By:	/s/ Barry Weiner
	Barry Weiner
	President, Chief Financial Officer, Principal Accounting Officer, Treasurer and Director

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO
TITLE 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Enzo Biochem, Inc., and Subsidiaries (“the Company”) on Form 10-Q for the period ended April 30, 2019 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Elazar Rabbani, Ph.D., Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: June 10, 2019
	By:	/s/ Elazar Rabbani, Ph.D.
		Elazar Rabbani, Ph.D.
		Chairman of the Board, Chief Executive Officer and Director

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO
TITLE 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Enzo Biochem, Inc., and Subsidiaries (“the Company”) on Form 10-Q for the period ended April 30, 2019 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Barry Weiner, President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: June 10, 2019
	By:	/s/ Barry Weiner
		Barry Weiner
		President, Chief Financial Officer, Principal Accounting Officer, Treasurer and Director

XML

Document And Entity Information - shares	9 Months Ended
	Apr. 30, 2019	Jun. 01, 2019
Document and Entity Information [Abstract]
Entity Registrant Name	ENZO BIOCHEM INC
Document Type	10-Q
Current Fiscal Year End Date	--07-31
Entity Common Stock, Shares Outstanding		47,556,807
Amendment Flag	false
Entity Central Index Key	0000316253
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Document Period End Date	Apr. 30, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q3
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Ex Transition Period	false

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Apr. 30, 2019	Jul. 31, 2018
Current assets:
Cash and cash equivalents	$ 64,052	$ 60,041
Accounts receivable, net of allowances	11,441	13,147
Inventories	7,595	7,278
Prepaid expenses and other	2,635	2,734
Total current assets	85,723	83,200
Property, plant and equipment, net	14,244	7,636
Goodwill	7,452	7,452
Intangible assets, net	1,128	1,886
Other assets, including restricted cash of $750 at April 30, 2019	2,453	1,486
Total assets	111,000	101,660
Current liabilities:
Accounts payable – trade	6,423	9,516
Accrued liabilities	8,457	10,054
Other current liabilities	392	616
Total current liabilities	15,272	20,186
Loan payable, net	4,235
Other liabilities	494	353
Total liabilities	20,001	20,539
Commitments and contingencies
Stockholders’ equity:
Preferred Stock, $.01 par value; authorized 25,000,000 shares; no shares issued or outstanding
Common Stock, $.01 par value; authorized 75,000,000 shares; shares issued and outstanding: 47,556,807 at April 30, 2019 and 47,182,254 at July 31, 2018	476	472
Additional paid-in capital	332,490	330,770
Accumulated deficit	(244,345)	(252,221)
Accumulated other comprehensive income	2,378	2,100
Total stockholders’ equity	90,999	81,121
Total liabilities and stockholders’ equity	$ 111,000	$ 101,660

XML

CONSOLIDATED BALANCE SHEETS (Parentheticals) - USD ($) $ in Thousands	Apr. 30, 2019	Jul. 31, 2018
Other assets, including restricted cash (in Dollars)	$ 750
Preferred Stock, par value (in Dollars per share)	$ 0.01	$ 0.01
Preferred Stock, shares authorized	25,000,000	25,000,000
Preferred Stock, shares issued	0	0
Preferred Stock, shares outstanding	0	0
Common Stock, par value (in Dollars per share)	$ 0.01	$ 0.01
Common Stock, shares authorized	75,000,000	75,000,000
Common Stock, shares issued	47,556,807	47,182,254
Common Stock, shares outstanding	47,556,807	47,182,254

XML

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands	3 Months Ended		9 Months Ended
	Apr. 30, 2019	Apr. 30, 2018	Apr. 30, 2019	Apr. 30, 2018
Revenues	$ 19,662,000	$ 25,230,000	$ 60,249,000	$ 78,258,000
Operating costs, expenses and legal settlements, net:
Cost of Revenues	14,360,000	14,557,000	43,347,000	45,595,000
Research and development	781,000	799,000	2,342,000	2,358,000
Selling, general and administrative	10,920,000	11,021,000	33,387,000	32,975,000
Legal fee expense	257,000	1,651,000	2,700,000	3,782,000
Legal settlements, net	(28,925,000)		(28,925,000)
Total operating costs, expenses and legal settlements, net	(2,607,000)	28,028,000	52,851,000	84,710,000
Operating income (loss)	22,269,000	(2,798,000)	7,398,000	(6,452,000)
Other income (expense):
Interest	258,000	227,000	759,000	569,000
Other	70,000	17,000	249,000	86,000
Foreign exchange (loss) gain	(332,000)	(462,000)	(530,000)	143,000
Income (loss) before income taxes	22,265,000	(3,016,000)	7,876,000	(5,654,000)
Benefit for income taxes	0	0	0	1,097,000
Net income (loss)	$ 22,265,000	$ (3,016,000)	$ 7,876,000	$ (4,557,000)
Net income (loss) per common share:
Basic (in Dollars per share)	$ 0.47	$ (0.06)	$ 0.17	$ (0.10)
Diluted (in Dollars per share)	$ 0.47	$ (0.06)	$ 0.17	$ (0.10)
Weighted average common shares outstanding:
Basic (in Shares)	47,452	47,073	47,259	46,895
Diluted (in Shares)	47,555	47,073	47,364	46,895

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Apr. 30, 2019	Apr. 30, 2018	Apr. 30, 2019	Apr. 30, 2018
Net income (loss)	$ 22,265	$ (3,016)	$ 7,876	$ (4,557)
Other comprehensive gain (loss):
Foreign currency translation adjustments	206	329	278	(166)
Comprehensive income (loss)	$ 22,471	$ (2,687)	$ 8,154	$ (4,723)

XML

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	AOCI Attributable to Parent [Member]	Treasury Stock [Member]	Total
Balance at Jul. 31, 2017	$ 465	$ 328,294	$ (241,900)	$ 2,013		$ 88,872
Balance (in Shares) at Jul. 31, 2017	46,506,176
Net income (loss) for the period ended			(4,557)			(4,557)
Cashless options exercise	$ 4	1,010			$ (1,014)
Cashless options exercise (in Shares)	340,898				106,911
Vesting of restricted stock (in Shares)	2,562
Exercise of stock options	$ 3	828				831
Exercise of stock options (in Shares)	274,726
Share-based compensation charges		617				617
Issuance of common stock and treasury stock for employee 401(k) plan match		(232)			$ 1,014	782
Issuance of common stock and treasury stock for employee 401(k) plan match (in Shares)	37,580				(106,911)
Foreign currency translation adjustments				(166)		(166)
Balance at Apr. 30, 2018	$ 472	330,517	(246,457)	1,847		86,379
Balance (in Shares) at Apr. 30, 2018	47,161,942
Balance at Jan. 31, 2018	$ 471	330,425	(243,441)	1,518	$ (1,014)	87,959
Balance (in Shares) at Jan. 31, 2018	47,077,840				106,911
Net income (loss) for the period ended			(3,016)			(3,016)
Cashless options exercise	$ 4	(4)
Vesting of restricted stock (in Shares)	500
Exercise of stock options	$ (3)	124				121
Exercise of stock options (in Shares)	46,022
Share-based compensation charges		204				204
Issuance of common stock and treasury stock for employee 401(k) plan match		(232)			$ 1,014	782
Issuance of common stock and treasury stock for employee 401(k) plan match (in Shares)	37,580				(106,911)
Foreign currency translation adjustments				329		329
Balance at Apr. 30, 2018	$ 472	330,517	(246,457)	1,847		86,379
Balance (in Shares) at Apr. 30, 2018	47,161,942
Balance at Jul. 31, 2018	$ 472	330,770	(252,221)	2,100		81,121
Balance (in Shares) at Jul. 31, 2018	47,182,254
Net income (loss) for the period ended			7,876			7,876
Vesting of restricted stock (in Shares)	986
Exercise of stock options	$ 1	166				$ 167
Exercise of stock options (in Shares)	34,719					238,230
Share-based compensation charges		725				$ 725
Net issuance of common stock for options exercised by Directors (in Shares)	23,376
Issuance of common stock and treasury stock for employee 401(k) plan match	$ 3	829				832
Issuance of common stock and treasury stock for employee 401(k) plan match (in Shares)	315,472
Foreign currency translation adjustments				278		278
Balance at Apr. 30, 2019	$ 476	332,490	(244,345)	2,378		90,999
Balance (in Shares) at Apr. 30, 2019	47,556,807
Balance at Jan. 31, 2019	$ 472	331,463	(266,610)	2,172		67,497
Balance (in Shares) at Jan. 31, 2019	47,241,335
Net income (loss) for the period ended			22,265			22,265
Exercise of stock options	$ 1	72				73
Share-based compensation charges		199				199
Net issuance of common stock for options exercised by Directors		(73)				(73)
Issuance of common stock and treasury stock for employee 401(k) plan match	$ 3	829				832
Issuance of common stock and treasury stock for employee 401(k) plan match (in Shares)	315,472
Foreign currency translation adjustments				206		206
Balance at Apr. 30, 2019	$ 476	$ 332,490	$ (244,345)	$ 2,378		$ 90,999
Balance (in Shares) at Apr. 30, 2019	47,556,807

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Apr. 30, 2019	Apr. 30, 2018
Cash flows from operating activities:
Net income (loss)	$ 7,876	$ (4,557)
Adjustments to reconcile net income (loss) to net cash provided by(used in) operating activities:
Depreciation and amortization of property, plant and equipment	1,631	1,608
Amortization of intangible assets	741	742
Share-based compensation charges	725	617
Accrual for share-based 401(k) employer match expense	650	630
Foreign exchange loss (gain)	461	(149)
Changes in operating assets and liabilities:
Accounts receivable	1,605	756
Inventories	(456)	(257)
Prepaid expenses and other assets	(36)	(585)
Accounts payable – trade	(3,363)	(2,126)
Accrued liabilities, other current liabilities and other liabilities	(1,853)	2,846
Total adjustments	105	4,082
Net cash provided by (used in) operating activities	7,981	(475)
Cash flows from investing activities:
Capital expenditures	(7,554)	(1,626)
Security deposits and other		(51)
Net cash used in investing activities	(7,554)	(1,677)
Cash flows from financing activities:
Proceeds from borrowing under mortgage loan	4,500
Repayments under loans and capital lease obligations	(244)	(299)
Costs to obtain mortgage loan	(72)
Proceeds from exercise of stock options	166	831
Net cash provided by financing activities	4,350	532
Effect of exchange rate changes on cash and cash equivalents	(16)	9
Increase (decrease) in cash and cash equivalents	4,761	(1,611)
Cash and cash equivalents - beginning of period	60,041	64,167
Cash and cash equivalents - end of period	64,802	62,556
The composition of cash and cash equivalents and restricted cash is as follows:
Cash and cash equivalents	64,052	62,556
Restricted cash included in other assets	750
Total cash and cash equivalents (including restricted cash)	$ 64,802	$ 62,556

XML

Basis of Presentation

9 Months Ended

Apr. 30, 2019

Disclosure Text Block [Abstract]

Basis of Accounting [Text Block]

Note 1 – Basis of Presentation

The accompanying consolidated financial statements include the accounts of Enzo Biochem, Inc. and its wholly-owned subsidiaries, Enzo Life Sciences, Enzo Clinical Labs, Enzo Therapeutics, Enzo Realty LLC and Enzo Realty II LLC, collectively or with one or more of its subsidiaries referred to as the “Company” or “Companies”. The consolidated balance sheet as of April 30, 2019, the consolidated statements of operations and comprehensive income (loss) for the three and nine months ended April 30, 2019 and 2018, the consolidated statements of cash flows for the nine months ended April 30, 2019 and 2018 and the consolidated statements of stockholders’ equity for the nine months ended April 30, 2019 and 2018 (the “interim statements”) are unaudited. In the opinion of management, all adjustments (which include normal recurring adjustments) necessary to present fairly the financial position and operating results for the interim periods have been made. Certain information and footnote disclosure, normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States, have been condensed or omitted as permitted under rules promulgated by the Securities and Exchange Commission. The interim statements should be read in conjunction with the consolidated financial statements for the year ended July 31, 2018 and notes thereto contained in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission. The consolidated balance sheet at July 31, 2018 has been derived from the audited financial statements at that date. The results of operations for the three and nine months ended April 30, 2019 are not necessarily indicative of the results that may be expected for the fiscal year ending July 31, 2019.

Effect of New Accounting Pronouncements

Adoption of New Accounting Standards

On August 1, 2018, the Company adopted a new accounting standard issued by the Financial Accounting Standards Board (“FASB”) on revenue recognition using the full retrospective method. This new accounting standard outlines a single comprehensive model to use in accounting for revenue arising from contracts with customers. This standard supersedes existing revenue recognition requirements and eliminates most industry-specific revenue recognition guidance from GAAP. The core principle of the revenue recognition standard is to require an entity to recognize as revenue the amount that reflects the consideration which it expects to be entitled to when control of goods or services are transferred to its customers.

As a result of the Company’s adoption of this standard, the majority of the amounts that were historically classified as bad debt expense, primarily related to patient responsibility, are now considered an implicit price concession in determining net revenues from clinical services. Accordingly, the Company reports estimated uncollectible balances associated with patient responsibility as a reduction of the transaction price and therefore as a reduction in net revenues, when historically these amounts were classified and separately reported as a provision for uncollectible accounts receivable. The adoption of this standard has no impact on revenues reported for life sciences products. The adoption of this new accounting standard resulted in increased disclosure, including qualitative and quantitative disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. For further details, see Note 3.

The impact of the adoption of the standard on prior period consolidated operations, cash flows and balance sheet is presented in the table below:

	As Previously Reported	Adjustment for New Accounting Standard on Revenue Recognition	Reclassification of Residual	As Restated
Consolidated Statements of Operations for the three months ended April 30, 2018:
Total Revenues	$25,630	$(400)	—	$25,230
Provision for uncollectible accounts receivable	396	(400)	$4	—
Selling, general and administrative expenses	11,025	—	(4)	11,021
Net loss	$(3,016)	—	—	$(3,016)
Consolidated Statements of Operations for the nine months ended April 30, 2018:
Total Revenues	80,258	(2,000)		78,258
Provision for uncollectible accounts receivable	1,989	(2,000)	11	—
Selling, general and administrative expenses	32,986	—	(11)	32,975
Net loss	(4,557)	—	—	(4,557)
Consolidated Statements of Cash Flows April 30, 2018:
Provision for uncollectible accounts receivable	1,989	(2,000)	11	—
Changes in operating assets and liabilities: Accounts receivable	(1,233)	2,000	(11)	756
Consolidated balance sheet July 31, 2018:
Accounts receivable	15,815	(2,523)	—	13,292
Less: Allowance for doubtful accounts	2,668	(2,523)	—	145
Accounts receivable, net of allowance for doubtful accounts	13,147	—	—	13,147

On August 1, 2018, the Company adopted a new accounting standard issued by FASB which provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. Adoption of this standard requires that amendments in the update be applied prospectively to an award modified on or after the adoption date. For the foreseeable future, any excess income tax benefits or deficiencies from stock-based compensation, which would be recognized as discrete items within income tax expense rather than additional paid in capital, will be offset by an equivalent adjustment to the deferred tax valuation allowance. Accordingly, adoption of this standard had no impact on our reported operations.

Pronouncements Issued but Not Yet Adopted

In February 2016, FASB issued ASU No. 2016-02 – Leases (Topic 842), as amended. The new standard establishes a right-of-use (ROU) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The new standard is effective for our fiscal year beginning August 1, 2019 including interim periods within that fiscal year. We will adopt the standard using a modified retrospective transition approach and will not restate our comparative periods. Given the size of our lease portfolio, in particular real estate leases, we expect the adoption of this standard will materially impact our consolidated financial statements by significantly increasing our non-current assets and non-current liabilities, which we estimate to be in a range of $23 and $25 million on our consolidated balance sheet when we record the right of use assets and related lease liabilities for our existing operating leases. We will recognize expense in the consolidated statement of operations similar to current lease accounting, in the cost of revenues and selling, general and administrative.

In June 2016, FASB issued ASU No. 2016-13 Financial Instruments – Credit Losses (Topic 326). This standard changes the impairment model for most financial instruments, including trade receivables, from an incurred loss method to a new forward-looking approach, based on expected losses. The estimate of expected credit losses will require entities to incorporate considerations of historical information, current information and reasonable and supportable forecasts. Adoption of this standard is required for our annual and interim periods beginning August 1, 2020 and must be adopted using a modified retrospective transition approach. We are currently assessing the impact of the adoption of this standard on our results of operations, financial position and cash flows.

We reviewed all other recently issued accounting pronouncements and have concluded they are not applicable or not expected to be significant to the accounting for our operations.

Concentration Risk

Other than the Medicare program, one provider whose programs are included in the “Third-party payers” and “Health Maintenance Organizations” (“HMO’s”) categories represents approximately 33% and 40% of Clinical Services net revenue for the three months ended April 30, 2019 and 2018 respectively, and 39% for the nine months ended April 30, 2019 and 2018. As of April 30, 2019, other than the Medicare program, one provider whose programs are included in either “Third-party payers” and/or “Health Maintenance Organizations” (“HMO’s”) categories represent approximately 14% of Clinical Services net receivables. As of July 31, 2018, other than the Medicare program, three providers whose programs are included in either “Third-party payers” and/or “Health Maintenance Organizations” (“HMO’s”) categories represent approximately 29% of Clinical Services net receivables.

Income Taxes

The provision for income taxes and the effective tax rates for the three months ended April 30, 2019 and 2018 is $0. The provision (benefit) for income taxes for the nine months ended April 30, 2019 and 2018 is $0 and ($1,097), respectively. The effective tax rate for the nine months ended April 30, 2018 was (19.4%). The primary differences between the Company’s effective tax rates and the statutory rates for the three and nine months ended April 30, 2019 and 2018 are due to the utilization of net operating losses for which a full valuation allowance was maintained and for a tax benefit recorded in the nine month period ended April 30, 2018 of $1.1 million. The $1.1 million tax benefit in the 2018 period is due to the Tax Act, signed into law December 22, 2017, in which the legislation provided for a credit for alternative minimum taxes (AMT) paid in prior periods. The Company believes that the valuation allowance is necessary as it is not more likely than not that the deferred tax assets will be realized in the foreseeable future based on positive and negative evidence available at this time. This conclusion was reached because of uncertainties relating to future taxable income, in terms of both its timing and its sufficiency, which would enable the Company to realize the deferred tax assets.

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Net income (loss) per share

9 Months Ended

Apr. 30, 2019

Earnings Per Share [Abstract]

Earnings Per Share [Text Block]

Note 2 – Net income (loss) per share

Basic net income (loss) per share represents net income (loss) divided by the weighted average number of common shares outstanding during the period. As a result of the net loss for the three months ended April 30, 2018 and nine months ended April 30, 2018 diluted weighted average shares outstanding are the same as basic weighted average shares outstanding, and do not include the potential common shares from stock options and unvested restricted stock because to do so would be antidilutive. For the three and nine months ended April 30, 2018, approximately 431,000, and 694,000, respectively of potential common shares (“in the money options”) and unvested restricted stock were excluded from the calculation of diluted earnings per share.

For the three and nine months ended April 30, 2019, the effect of approximately 1,640,000 and 1,541,000 of outstanding “out of the money” options to purchase common shares were excluded from the calculation of diluted net income per share because their effect would be anti-dilutive. For the three and nine months ended April 30, 2018, the effect of approximately 581,000 and 194,000 of outstanding “out of the money” options to purchase common shares were excluded from the calculation of diluted net income per share because their effect would be anti-dilutive.

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Revenue Recognition

9 Months Ended

Apr. 30, 2019

Revenue from Contract with Customer [Abstract]

Revenue from Contract with Customer [Text Block]

Note 3 – Revenue Recognition

Clinical Services Revenue

Net revenues in the Company’s clinical services business accounted for 63% and 72% of the Company’s total net revenues for the nine months ended April 30, 2019 and 2018, respectively and are primarily comprised of a high volume of relatively low-dollar transactions. The services business, which provides clinical testing services, satisfies its performance obligation and recognizes revenues upon completion of the testing process for a specific patient and reporting to the ordering physician. The Company may also perform clinical testing services for other laboratories and will recognize revenue from those services when reported to the ordering laboratory. The Company estimates the amount of consideration it expects to receive from customer groups using the portfolio approach. These estimates of the expected consideration include the impact of contractual allowances and price concessions on our customer group portfolios consisting of healthcare insurers, government payers, client payers and patients as described below. Contracts with customers in our laboratory services business do not contain a financing component, based on the typically limited period of time between performance of services and collection of consideration. The transaction price includes variable consideration in the form of the contractual allowance and price concessions as well as the collectability of the transaction based on the patient intent and ability to pay. The Company uses the expected value method in estimating the amount of the variability included in the transaction price.

The following are descriptions of our laboratory services business portfolios:

Third party payers and Health Maintenance Organizations (HMO’s)

Reimbursements from third party payers, primarily healthcare insurers, and HMO’s are based on negotiated fee-for-service schedules. Revenues consist of amounts billed net of contractual allowances for differences between amounts billed and the estimated consideration the Company expects to receive from such payers, which considers historical collection and denial experience and the terms of the Company’s contractual arrangements. Adjustments to the allowances, based on actual receipts from the third-party payers, are recorded upon settlement.

Collection of the consideration the Company expects to receive is normally a function of providing complete and correct billing information to these third party payers within the various filing deadlines, and typically occurs within 60 to 90 days of billing. Provided the Company has billed healthcare insurers accurately with complete information prior to the established filing deadline, there has historically been little to no collection risk. If there has been a delay in billing, the Company determines if the amounts in question will likely go past the filing deadline, and if so, will reserve accordingly for the billing.

Third-party payers, including government programs, may decide to deny payment or recoup payments for testing that they contend was improperly billed or not medically necessary, against their coverage determinations, or for which they believe they have otherwise overpaid (including as a result of their own error), and we may be required to refund payments already received. Our revenues may be subject to adjustment as a result of these factors among others, including without limitation, differing interpretations of billing and coding guidance and changes by government agencies and payers in interpretations, requirements, and “conditions of participation” in various programs.

Government Payer - Medicare

Reimbursements from Medicare are based on fee-for-service schedules set by Medicare, which is funded by the government. Revenues consist of amounts billed net of contractual allowances for differences between amounts billed and the estimated consideration the Company expects to receive from Medicare, which considers historical collection and denial experience and other factors. Adjustments to the allowances, based on actual receipts from the government payers, are recorded upon settlement.

Collection of consideration the Company expects to receive is normally a function of providing the complete and correct billing information within the various filing deadlines and typically occurs within 60 days of billing. Provided the Company has billed the government payer accurately with complete information prior to the established filing deadline, there has historically been little to no collection risk. If there has been a delay in billing, the Company determines if the amounts in question will likely go past the filing deadline, and, if so, it will reserve accordingly for the billing.

Patient self-pay

Uninsured patients are billed based on established patient fee schedules or fees negotiated with physicians on behalf of their patients. Coinsurance and deductible responsibilities based on fees negotiated with healthcare insurers are also billed to insured patients and included in this portfolio. Collection of billings from patients is subject to credit risk and ability of the patients to pay. Revenues consist of amounts billed net of discounts provided to uninsured patients in accordance with the Company’s policies and implicit price concessions. Implicit price concessions represent differences between amounts billed and the estimated consideration the Company expects to receive from patients, which considers historical collection experience and other factors including current market conditions. Adjustments to the estimated allowances, based on actual receipts from the patients, are recorded upon settlement. Patient billings are generally fully reserved for when the related billing reaches 210 days outstanding. Balances are automatically written off when they are sent to collection agencies. Allowances are further adjusted for estimated recoveries of amounts sent to collection agencies based on historical collection experience, which is regularly monitored. Collection of consideration the Company expects to receive typically occurs within 180 days of billing.

The following table represents clinical services net revenues and percentages by type of customer:

	Three months ended April 30, 2019				Three months ended April 30, 2018
Revenue category
Third-party payer	$	5,799	50	%	$	9,965	56	%
Medicare		2,634	22			2,858	16
Patient self-pay		1,881	16			2,047	12
HMO’s		1,437	12			2,867	16
Total	$	11,751	100	%	$	17,737	100	%

	Nine months ended April 30, 2019				Nine months ended April 30, 2018
Revenue category
Third-party payer	$	20,213	53	%	$	32,726	59	%
Medicare		7,724	20			9,073	16
Patient self-pay		5,652	15			5,689	10
HMO’s		4,459	12			8,513	15
Total	$	38,048	100	%	$	56,001	100	%

For the three and nine months ended April 30, 2019 and 2018, all of the Company’s clinical services were provided within the United States.

Products Revenue and royalty income

Products revenues consist of the sale of single-use products used in the identification of genomic information and are recognized at a point in time following the transfer of control of such products to the customer, which generally occurs upon shipment. Payment terms for shipments to end-user and distributor customers may range from 30 to 90 days. Any claims for credit or return of goods may be made generally within 30 days of receipt. Revenues are reduced to reflect estimated credits and returns, although historically these adjustments have not been material. Taxes collected from customers relating to product sales and remitted to governmental authorities are excluded from revenue. Amounts billed to customers for shipping and handling are included in revenue, while the related shipping and handling costs are reflected in cost of products.

Royalty income is based on net sales of the Company’s licensed products by a third party. We recognize royalty income in the period the sales occur based on third party evidence received. During the three and nine months ended April 30, 2019 there was no royalty income. For the three and nine months ended April 30, 2018, royalty income was $78 and $639, respectively.

Products revenue by geography is as follows:

	Three Months Ended April 30				Nine Months Ended April 30
	2019		2018		2019		2018
United States	$	4,585	$	3,987	$	12,570	$	11,500
Europe		1,620		1,529		4,370		4,422
Rest of the world		1,706		1,899		5,261		5,578
Total	$	7,911	$	7,415	$	22,201	$	21,500

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Supplemental disclosure for statement of cash flows

9 Months Ended

Apr. 30, 2019

Supplemental Cash Flow Elements [Abstract]

Cash Flow, Supplemental Disclosures [Text Block]

Note 4 - Supplemental disclosure for statement of cash flows

For the nine months ended April 30, 2019 and 2018, tax on capital paid by the Company were $94 and $65, respectively.

For the nine months ended April 30, 2019 and 2018, interest paid by the Company was $138 and $61, respectively.

During the nine months ended April 30, 2019, there was a total of $381 in capital lease agreements. During the nine months ended April 31, 2018, the Company did not enter into any material capital lease agreements.

During the nine months ended April 30, 2019, certain directors and officers of the Company exercised 203,511 stock options in a non-cash transaction. The officers and directors received 23,376 net shares of common stock. The Company did not receive any proceeds from this exercise. The net shares issued represent the difference between the fair market value of the options on the date of exercise less the strike price cost to exercise the options.

During the nine months ended April 30, 2019 the Company issued common stock in connection with its share based 401(k) employer match in the amount of $832. For the 2018 period, the Company issued shares of common stock in the amount of $782.

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Inventories

9 Months Ended

Apr. 30, 2019

Inventory Disclosure [Abstract]

Inventory Disclosure [Text Block]

Note 5 – Inventories

Inventories consist of the following:

	April 30, 2019		July 31, 2018
Raw materials	$	895	$	754
Work in process		2,480		2,174
Finished products		4,220		4,350
	$	7,595	$	7,278

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Goodwill and intangible assets

9 Months Ended

Apr. 30, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets Disclosure [Text Block]

Note 6 – Goodwill and intangible assets

At April 30, 2019 and July 31, 2018, the Company has goodwill of $7,452 allocated to the Clinical Services reporting unit.

The Company’s change in the carrying amount of intangible assets, all in the Products segment is as follows:

	Gross			Accumulated Amortization			Net
July 31, 2018	$	27,347		$	(25,461	)	$	1,886
Amortization expense		—			(741	)		(741	)
Foreign currency translation		(110	)		93			(17	)
April 30, 2019	$	27,237		$	(26,109	)	$	1,128

Intangible assets, all finite lived, consist of the following:

	April 30, 2019							July 31, 2018
	Gross		Accumulated Amortization			Net		Gross		Accumulated Amortization			Net
Patents	$	11,027	$	(10,992	)	$	35	$	11,027	$	(10,980	)	$	47
Customer relationships		11,745		(10,652	)		1,093		11,836		(9,997	)		1,839
Website and acquired content		1,008		(1,008	)		—		1,008		(1,008	)		—
Licensed technology and other		483		(483	)		—		483		(483	)		—
Trademarks		2,974		(2,974	)		—		2,993		(2,993	)		—
Total	$	27,237	$	(26,109	)	$	1,128	$	27,347	$	(25,461	)	$	1,886

At April 30, 2019, information with respect to intangibles assets acquired is as follows:

	Useful life assigned	Weighted average remaining useful life
Customer relationships	8 -15 years	1 year
Other intangibles	10 years	4 years

At April 30, 2019, the weighted average remaining useful life of intangible assets is approximately one year.

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Loan Payable

9 Months Ended

Apr. 30, 2019

Debt Disclosure [Abstract]

Debt Disclosure [Text Block]

Note 7 - Loan Payable

In connection with the purchase of our new facility, on November 27, 2018, a wholly-owned subsidiary (the ““mortgagor subsidiary”) of the Company entered into a Fee Mortgage and Security Agreement (the “mortgage agreement”) with Citibank, N.A. (the “mortgagee”). The mortgage agreement provides for a loan of $4,500 for a term of 10 years, bears a fixed interest rate of 5.09% per annum and requires monthly mortgage payments of principal and interest of $30. Debt issuance costs of $72 are being amortized over the life of the mortgage agreement. The balance of unamortized debt issuance cost was $69 at April 30, 2019. At April 30, 2019, the balance owed by the subsidiary under the mortgage agreement was $4.4 million. The Company’s obligations under the mortgage agreement are secured by the new facility and by a $750 cash collateral deposit with the mortgagee as additional security. This restricted cash is included in other assets as of April 30, 2019.

The mortgage agreement includes affirmative and negative covenants and events of default, as defined. Events of default include non-payment of principal and interest on debt outstanding, non-performance of covenants, material changes in business, breach of representations, bankruptcy or insolvency, and changes in control. The mortgage includes certain financial covenants. As of April 30, 2019, required financial covenants have been met.

We assumed from the seller an operating lease for a current tenant at the facility which runs to December 2019. Rental income from the assumed lease is included in other income.

Minimum future annual principal payments under the mortgage agreement as of April 30, 2019, are as follows:

April 30,
	2020	$	134
	2021		142
	2022		149
	2023		157
	2024		165
	Thereafter		3,691
			4,438
Less:	Current portion		(134	)
	Unamortized mortgage costs		(69	)
Mortgage loan, non-current, net		$	4,235

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Accrued Liabilities

9 Months Ended

Apr. 30, 2019

Payables and Accruals [Abstract]

Accounts Payable and Accrued Liabilities Disclosure [Text Block]

Note 8 – Accrued Liabilities

Accrued liabilities consist of the following:

	April 30, 2019		July 31, 2018
Payroll, benefits, and commissions	$	4,848	$	4,870
Professional fees		592		811
Legal		167		2,121
Other		2,850		2,252
	$	8,457	$	10,054

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Stockholders' Equity

9 Months Ended

Apr. 30, 2019

Stockholders' Equity Note [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

Note 9 – Stockholders’ Equity

Controlled Equity Offering

The Company has a Controlled Equity Offering^SM Sales Agreement (the “Sales Agreement”) with Cantor Fitzgerald & Co., as sales agent (“Cantor”). Under the Sales Agreement, the Company may offer and sell, from time to time, through Cantor, shares of the Company’s common stock, par value $0.01 per share (the “Common Stock”). The Company pays Cantor a commission of 3.0% of the aggregate gross proceeds received under the Sale Agreement. The Company is not obligated to make any sales of the shares under the Sales Agreement. The offering of shares pursuant to the Sales Agreement will terminate upon the earlier of (a) the sale of all of the shares subject to the Sales Agreement or (b) the termination of the Sales Agreement by Cantor or the Company, as permitted therein. The initial agreement contemplated the sale of shares of the Company’s common stock having an aggregate offering price of up to $20.0 million. In December 2014, the Sales Agreement was amended in order for the Company to offer and sell additional shares of Common Stock having an aggregate offering price of $20.0 million.

On September 1, 2017, the Company filed with the SEC a “shelf” registration and sales agreement prospectus covering the offering, issuance and sale of our Common Stock that may be issued and sold under the existing Sales Agreement in an aggregate amount of up to $19.15 million. A total of $150 million of securities may be sold under this shelf registration, which was declared effective September 15, 2017.

During the nine months ended April 30, 2019 and 2018, the Company did not sell any shares of Common Stock under the Sales Agreement.

Share-based compensation

On January 14, 2011, the Company’s stockholders approved the adoption of the 2011 Incentive Plan (the “2011 Plan”) which provides for the issuance of equity awards, including among others, options, restricted stock and restricted stock units for up to 3,000,000 Common Shares. The exercise price of options granted under the 2011 Plan, and consistent with other Plans, is equal to or greater than fair market value of the Common Stock on the date of grant. Unless terminated earlier by the Board of Directors, the 2011 Plan will terminate at the earliest of; (a) such time as no shares of Common Stock remain available for issuance under the 2011 Plan or (b) tenth anniversary of the effective date of the 2011 Plan. On January 5, 2018, the Company’s stockholders approved the amendment and restatement of the 2011 Plan to increase the number of shares available for issuance by 2,000,000 bringing the total number of shares available for award under the 2011 Plan to 5,000,000. Awards outstanding upon expiration of the 2011 Plan shall remain in effect until they have been exercised, terminated, or have expired.

The amounts of share-based compensation expense recognized in the periods presented are as follows:

	Three months ended April 30,				Nine months ended April 30,
	2019		2018		2019		2018
Stock options	$	197	$	202	$	718	$	609
Restricted stock		2		2		7		8
	$	199	$	204	$	725	$	617

The following table sets forth the amount of expense related to share-based payment arrangements included in specific line items in the accompanying statements of operations:

	Three months ended April 30,				Nine months ended April 30,
	2019		2018		2019		2018
Selling, general and administrative	$	199	$	204	$	725	$	617
	$	199	$	204	$	725	$	617

No excess tax benefits were recognized during the nine month periods ended April 30, 2019 and 2018.

Stock Option Plans

The following table summarizes stock option activity during the nine month period ended April 30, 2019:

	Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value (000s)
Outstanding at July 31, 2018		1,882,116		$	4.96
Awarded		712,821			2.81
Exercised		(238,230	)		2.69		$	117
Cancelled or expired		(3,500	)		5.86
Outstanding at end of period		2,353,207			4.53	3.1 years	$	496
Exercisable at end of period		1,215,231			5.24	1.0 years	$	22

As of April 30, 2019, the total future compensation cost related to non-vested options, not yet recognized in the statements of operations, was $1.2 million and the weighted average period over which the remaining expense of these awards is expected to be recognized is seventeen months.

The intrinsic value of in the money stock option awards at the end of the period represents the Company’s closing stock price on the last trading day of the period in excess of the exercise price multiplied by the number of options.

During the three months ended April 30, 2019 certain directors and officers of the Company exercised 203,511 stock options in non-cash transactions. The officers and directors received 23,376 net shares of common stock. The Company did not receive any proceeds from this exercise. The net shares issued represent the difference between the fair market value of the options on the date of exercise less the strike price cost to exercise the options.

Performance Stock Units

To better align the long-term interest of executives with growing U.S. practices, beginning in fiscal 2018, the Company granted long-term incentive awards in the form of time based stock options and performance-based restricted stock units (“Performance Stock Units” or “PSUs”). The PSUs earned will be determined over a three-year performance period. The primary performance metrics will be revenue and Adjusted EBITDA growth. Payouts based on revenue and adjusted EBITDA goals will be modified based on Total Shareholder Return (“TSR”) performance relative to Enzo’s peer group.

During fiscal year 2018 and 2019, the Company awarded PSUs to its executive officers, this award provides for the grant of shares of our common stock at the end of a three–year period based on the achievement of average revenue growth and adjusted EBITDA growth over that period. As of April 30, 2019, the Company did not accrue any compensation expense for these PSU’s as the three-year performance period has just begun and achievement of the growth goals is currently not probable.

The following table summarizes PSU’s granted:

Period Ending	Total Grant		Fair Market Value At Grant Date (000s)
7/31/2018		32,000	$	141
1/31/2019		80,500	$	225

Restricted Stock Awards

The fair value of a restricted stock award is determined based on the closing stock price on the award date. As of April 30, 2019, there were 1,628 shares of unvested restricted stock which have a weighted average award price of $6.00 per share. As of April 30, 2019, there was approximately $10 of unrecognized compensation cost related to these unvested shares of restricted stock to be recognized over a weighted average remaining period of approximately twenty-one months. There were no awards made during the nine months ended April 30, 2019. During the nine months ended April 30, 2019, 985 restricted stock awards vested whose fair value was approximately $4.

The total number of shares available for grant as equity awards from the 2011 Incentive Plan is approximately 1,222,000 shares as of April 30, 2019.

During the nine months ended April 30, 2019, the Company contributed $832 to match its employees’ 401(k) contributions by issuing 315,472 shares of its common stock representing the fair value of the shares at the match date, and adjusted common stock and additional paid in capital by the same amount.

During the nine months ended April 30, 2018, the Company contributed $782 to match its employees’ 401(k) contributions with 106,911 shares of treasury stock and by issuing 37,580 shares of its common stock, representing the fair value of the shares at the match date, and adjusted treasury stock, common stock and additional paid in capital by the same amount.

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Segment reporting

9 Months Ended

Apr. 30, 2019

Segment Reporting [Abstract]

Segment Reporting Disclosure [Text Block]

Note 10 – Segment reporting

The Company has three reportable segments: Products, Clinical Services and Therapeutics. The Company’s Products segment develops, manufactures, and markets products to research and pharmaceutical customers. The Clinical Services segment provides diagnostic services to the health care community. The Company’s Therapeutics segment conducts research and development activities for therapeutic drug candidates. The Company evaluates segment performance based on segment income (loss) before taxes. Costs excluded from segment income (loss) before taxes and reported as “Other” consist of corporate general and administrative costs which are not allocable to the three reportable segments.

Legal fee expense incurred to defend the Company’s intellectual property, which may result in settlements recognized in another segment and other general corporate matters are considered a component of the Other segment. Legal fee expense specific to other segments’ activities have been allocated to those segments.

Legal settlements, net, represent activities for which royalties would have been received in the Company’s Products segment and expenses related to an investigation within the Clinical Services segment. Management of the Company assesses assets on a consolidated basis only and therefore, assets by reportable segment have not been included in the reportable segments below. The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies.

The following financial information represents the operating results of the reportable segments of the Company:

Three months ended April 30, 2019	Clinical Services			Products			Therapeutics			Other			Consolidated
Revenues	$	11,751		$	7,911			—			—		$	19,662
Operating costs, expenses and legal settlements, net:
Cost of revenues		10,963			3,397			—			—			14,360
Research and development		31			527		$	223			—			781
Selling, general and administrative		5,960			2,923			—		$	2,037			10,920
Legal fee expense		35			16			—			206			257
Legal settlements, net		—			(28,925	)		—			—			(28,925	)
Total operating costs, expenses and legal settlements, net		16,989			(22,062	)		223			2,243			(2,607	)
Operating income (loss)		(5,238	)		29,973			(223	)		(2,243	)		22,269
Other income (expense):
Interest		(18	)		19			—			257			258
Other		6			—			—			64			70
Foreign exchange loss		—			(332	)		—			—			(332	)
Income (loss) before income taxes	$	(5,250	)	$	29,660		$	(223	)	$	(1,922	)	$	22,265
Depreciation and amortization included above	$	440		$	340		$	—		$	58		$	838
Share-based compensation included in above:
Selling, general and administrative		40			24			—			135			199
Total	$	40		$	24		$	—		$	135		$	199
Capital expenditures	$	120		$	446		$	—		$	—		$	566

Three months ended April 30, 2018	Clinical Services			Products			Therapeutics			Other			Consolidated
Revenues	$	17,737		$	7,493			—			—		$	25,230
Operating costs and expenses:
Cost of revenues		10,995			3,562			—			—			14,557
Research and development		—			576		$	223			—			799
Selling, general and administrative		6,252			2,970			—		$	1,799			11,021
Legal fee expense		25			19			—			1,607			1,651
Total operating costs and expenses		17,272			7,127			223			3,406			28,028
Operating income (loss)		465			366			(223	)		(3,406	)		(2,798	)
Other income (expense):
Interest		(22	)		12			—			237			227
Other		15			2			—			—			17
Foreign exchange loss		—			(462	)		—			—			(462	)
Income (loss) before income taxes	$	458		$	(82	)	$	(223	)	$	(3,169	)	$	(3,016	)
Depreciation and amortization included above	$	437		$	358		$	—		$	20		$	815
Share-based compensation included in above:
Selling, general and administrative		26			17			—			161			204
Total	$	26		$	17		$	—		$	161		$	204
Capital expenditures	$	465		$	96		$	—		$	—		$	561

Nine months ended April 30, 2019	Clinical Services			Products			Therapeutics			Other			Consolidated
Revenues	$	38,048		$	22,201			—			—		$	60,249
Operating costs, expenses and legal settlements, net:
Cost of revenues		32,956			10,391			—			—			43,347
Research and development		31			1,645		$	666			—			2,342
Selling, general and administrative		18,220			8,828			—		$	6,339			33,387
Legal fee expense		109			24			—			2,567			2,700
Legal settlements, net		—			(28,925	)		—			—			(28,925	)
Total operating costs, expenses and legal settlements, net		51,316			(8,037	)		666			8,906			52,851
Operating income (loss)		(13,268	)		30,238			(666	)		(8,906	)		7,398
Other income (expense):
Interest		(51	)		49			—			761			759
Other		17			—			—			232			249
Foreign exchange loss (gain)		—			(530	)		—			—			(530	)
(Loss) income before income taxes	$	(13,302	)	$	29,757		$	(666	)	$	(7,913	)	$	7,876
Depreciation and amortization included above	$	1,217		$	1,025		$	—		$	130		$	2,372
Share-based compensation included in above:
Selling, general and administrative		118			74			—			533			725
Total	$	118		$	74		$	—		$	533		$	725
Capital expenditures	$	883		$	524		$	—		$	6,147		$	7,554

Nine months ended April 30, 2018	Clinical Services			Products		Therapeutics			Other			Consolidated
Revenues	$	56,001		$	22,257		—			—		$	78,258
Operating costs and expenses:
Cost of revenues		34,767			10,828		—			—			45,595
Research and development		—			1,690	$	668			—			2,358
Selling, general and administrative		18,454			8,476		—		$	6,045			32,975
Legal fee expense		46			47		—			3,689			3,782
Total operating costs and expenses		53,267			21,041		668			9,734			84,710
Operating income (loss)		2,734			1,216		(668	)		(9,734	)		(6,452	)
Other income (expense):
Interest		(70	)		35		—			604			569
Other		32			10		—			44			86
Foreign exchange loss		—			143		—			—			143
Income (loss) before income taxes	$	2,696		$	1,404	$	(668	)	$	(9,086	)	$	(5,654	)
Depreciation and amortization included above	$	1,254		$	1,039	$	—		$	57		$	2,350
Share-based compensation included in above:
Selling, general and administrative		86			61		—			470			617
Total	$	86		$	61	$	—		$	470		$	617
Capital expenditures	$	1,459		$	167	$	—		$	—		$	1,626

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Contingencies

9 Months Ended

Apr. 30, 2019

Loss Contingency [Abstract]

Contingencies Disclosure [Text Block]

Note 11 – Contingencies

There are three cases that are on appeal, which were originally brought by the Company in the United States District Court for the District of Delaware (“the Court”), alleging patent infringement against various companies. In 2017, the Court entered summary judgment against the Company that the asserted claims of the ‘180 and ‘405 Patents are invalid for nonenablement in cases involving Abbott, Becton Dickinson, Gen-Probe, Hologic, and Roche. The Company appealed the Court’s final judgment of invalidity in those cases to the United States Court of Appeals for the Federal Circuit (“Federal Circuit”), which were subsequently consolidated (“the Consolidated Appeals”). The Federal Circuit heard oral argument in the Consolidated Appeals on January 7, 2019, but it has not issued a ruling or opinion. In the Consolidated Appeals, the Company has asked the Federal Circuit to reverse the Court’s grants of final and summary judgment of invalidity of the asserted claims of the ‘180 and ‘405 patents and to remand the cases against Abbott, Becton Dickinson, and Roche to the Court. In April 2019, the Company entered into an agreement with Hologic and Grifols, resolving litigation resulting from four cases originally brought by the Company in the Court. As a result, Enzo dismissed (1) a stayed patent litigation regarding the ‘180 and ‘197 Patent against Hologic in the Court; (2) the Consolidated Appeals against Gen-Probe and Hologic resulting from two cases filed in the Court, and (3) the Company’s appeal in the Hologic III matter regarding the ‘581 Patent that involved both Hologic and Grifols; Hologic withdrew from Enzo’s Federal Circuit appeal of the Patent Trial and Appeal Board’s adverse rulings in two inter partes review proceedings regarding the ‘197 Patent filed by Hologic (“the ‘197 PTAB Appeals”). Of the original cases filed in the Court, the Abbott, Becton Dickinson, and Roche cases remain on appeal to the Federal Circuit. The ‘197 PTAB Appeals remain pending and are scheduled for argument on July 9, 2019.

Enzo Biochem, Inc. (the “Company”), along with its subsidiaries Enzo Life Sciences, Inc. entered into a Settlement Agreement as of February 5,2019 (the “Agreement) with Roche Diagnostics GmbH and Roche Molecular Systems, Inc. (together, “Roche”) with respect to an action between the Company and Roche before the U.S. District Court, Southern District of New York, Case No 04-CV4046. Roche agreed to pay the Company $21 million in settlement pursuant to the Agreement. The Company received $19.4 million net of attorney contingency payments. This settlement does not affect Enzo’s civil action for patent infringement against Roche in the U.S. District Court for the State of Delaware, Enzo Life Sciences Inc. v. Roche Molecular Systems Inc., et al., civil action No. 12 cv-00106, which remains pending on appeal.

Enzo Biochem, Inc. (the “Company”), along with its subsidiaries Enzo Life Sciences, Inc. entered into a settlement and license agreement as of April 16, 2019 (the “Agreement”) with Hologic, Inc. (“Hologic”), Grifols, S.A., and Grifols Diagnostic Solutions Inc. (together, “Grifols”) to settle all outstanding patent disputes among the parties. The terms of the agreement include one-time payments totaling $14 million to Enzo in exchange for fully paid-up, worldwide licenses to Hologic and Grifols. The Company received $9.5 million net of attorney contingency payments.

There can be no assurance that the Company will be successful in these litigations. Even if the Company is not successful, management does not believe that there will be a significant adverse monetary impact on the Company.

The Company is party to other claims, legal actions, complaints, and contractual disputes that arise in the ordinary course of business. The Company believes that any liability that may ultimately result from the resolution of these matters will not, individually or in the aggregate, have a material adverse effect on its financial position or results of operations.

As described in Note 3, third-party payers, including government programs, may decide to deny payment or recoup payments for testing that they contend was improperly billed or not medically necessary, against their coverage determinations, or for which they believe they have otherwise overpaid (including as a result of their own error), and we may be required to refund payments already received. During the third fiscal quarter of 2019, a significant third-party payer informed us outside of their typical business practice that they believe it overpaid the Company during certain periods of fiscal 2018. The Company disputes these claims and has formally sent legal appeal letters to the payer. At this time, the Company is unable to determine the probability of the outcome of these appeals or reasonably estimate a range of potential losses associated with this claim.

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Accounting Policies, by Policy (Policies)

9 Months Ended

Apr. 30, 2019

Accounting Policies [Abstract]

New Accounting Pronouncements, Policy [Policy Text Block]

Adoption of New Accounting Standards

On August 1, 2018, the Company adopted a new accounting standard issued by the Financial Accounting Standards Board (“FASB”) on revenue recognition using the full retrospective method. This new accounting standard outlines a single comprehensive model to use in accounting for revenue arising from contracts with customers. This standard supersedes existing revenue recognition requirements and eliminates most industry-specific revenue recognition guidance from GAAP. The core principle of the revenue recognition standard is to require an entity to recognize as revenue the amount that reflects the consideration which it expects to be entitled to when control of goods or services are transferred to its customers.

As a result of the Company’s adoption of this standard, the majority of the amounts that were historically classified as bad debt expense, primarily related to patient responsibility, are now considered an implicit price concession in determining net revenues from clinical services. Accordingly, the Company reports estimated uncollectible balances associated with patient responsibility as a reduction of the transaction price and therefore as a reduction in net revenues, when historically these amounts were classified and separately reported as a provision for uncollectible accounts receivable. The adoption of this standard has no impact on revenues reported for life sciences products. The adoption of this new accounting standard resulted in increased disclosure, including qualitative and quantitative disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. For further details, see Note 3.

The impact of the adoption of the standard on prior period consolidated operations, cash flows and balance sheet is presented in the table below:

	As Previously Reported	Adjustment for New Accounting Standard on Revenue Recognition	Reclassification of Residual	As Restated
Consolidated Statements of Operations for the three months ended April 30, 2018:
Total Revenues	$25,630	$(400)	—	$25,230
Provision for uncollectible accounts receivable	396	(400)	$4	—
Selling, general and administrative expenses	11,025	—	(4)	11,021
Net loss	$(3,016)	—	—	$(3,016)
Consolidated Statements of Operations for the nine months ended April 30, 2018:
Total Revenues	80,258	(2,000)		78,258
Provision for uncollectible accounts receivable	1,989	(2,000)	11	—
Selling, general and administrative expenses	32,986	—	(11)	32,975
Net loss	(4,557)	—	—	(4,557)
Consolidated Statements of Cash Flows April 30, 2018:
Provision for uncollectible accounts receivable	1,989	(2,000)	11	—
Changes in operating assets and liabilities: Accounts receivable	(1,233)	2,000	(11)	756
Consolidated balance sheet July 31, 2018:
Accounts receivable	15,815	(2,523)	—	13,292
Less: Allowance for doubtful accounts	2,668	(2,523)	—	145
Accounts receivable, net of allowance for doubtful accounts	13,147	—	—	13,147

On August 1, 2018, the Company adopted a new accounting standard issued by FASB which provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. Adoption of this standard requires that amendments in the update be applied prospectively to an award modified on or after the adoption date. For the foreseeable future, any excess income tax benefits or deficiencies from stock-based compensation, which would be recognized as discrete items within income tax expense rather than additional paid in capital, will be offset by an equivalent adjustment to the deferred tax valuation allowance. Accordingly, adoption of this standard had no impact on our reported operations

Pronouncements Issued but Not Yet Adopted [Policy Text Block]

Pronouncements Issued but Not Yet Adopted

In February 2016, FASB issued ASU No. 2016-02 – Leases (Topic 842), as amended. The new standard establishes a right-of-use (ROU) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The new standard is effective for our fiscal year beginning August 1, 2019 including interim periods within that fiscal year. We will adopt the standard using a modified retrospective transition approach and will not restate our comparative periods. Given the size of our lease portfolio, in particular real estate leases, we expect the adoption of this standard will materially impact our consolidated financial statements by significantly increasing our non-current assets and non-current liabilities, which we estimate to be in a range of $23 and $25 million on our consolidated balance sheet when we record the right of use assets and related lease liabilities for our existing operating leases. We will recognize expense in the consolidated statement of operations similar to current lease accounting, in the cost of revenues and selling, general and administrative.

In June 2016, FASB issued ASU No. 2016-13 Financial Instruments – Credit Losses (Topic 326). This standard changes the impairment model for most financial instruments, including trade receivables, from an incurred loss method to a new forward-looking approach, based on expected losses. The estimate of expected credit losses will require entities to incorporate considerations of historical information, current information and reasonable and supportable forecasts. Adoption of this standard is required for our annual and interim periods beginning August 1, 2020 and must be adopted using a modified retrospective transition approach. We are currently assessing the impact of the adoption of this standard on our results of operations, financial position and cash flows.

We reviewed all other recently issued accounting pronouncements and have concluded they are not applicable or not expected to be significant to the accounting for our operations

Concentration Risk, Credit Risk, Policy [Policy Text Block]

Concentration Risk

Other than the Medicare program, one provider whose programs are included in the “Third-party payers” and “Health Maintenance Organizations” (“HMO’s”) categories represents approximately 33% and 40% of Clinical Services net revenue for the three months ended April 30, 2019 and 2018 respectively, and 39% for the nine months ended April 30, 2019 and 2018. As of April 30, 2019, other than the Medicare program, one provider whose programs are included in either “Third-party payers” and/or “Health Maintenance Organizations” (“HMO’s”) categories represent approximately 14% of Clinical Services net receivables. As of July 31, 2018, other than the Medicare program, three providers whose programs are included in either “Third-party payers” and/or “Health Maintenance Organizations” (“HMO’s”) categories represent approximately 29% of Clinical Services net receivables.

Income Tax, Policy [Policy Text Block]

Income Taxes

The provision for income taxes and the effective tax rates for the three months ended April 30, 2019 and 2018 is $0. The provision (benefit) for income taxes for the nine months ended April 30, 2019 and 2018 is $0 and ($1,097), respectively. The effective tax rate for the nine months ended April 30, 2018 was (19.4%). The primary differences between the Company’s effective tax rates and the statutory rates for the three and nine months ended April 30, 2019 and 2018 are due to the utilization of net operating losses for which a full valuation allowance was maintained and for a tax benefit recorded in the nine month period ended April 30, 2018 of $1.1 million. The $1.1 million tax benefit in the 2018 period is due to the Tax Act, signed into law December 22, 2017, in which the legislation provided for a credit for alternative minimum taxes (AMT) paid in prior periods. The Company believes that the valuation allowance is necessary as it is not more likely than not that the deferred tax assets will be realized in the foreseeable future based on positive and negative evidence available at this time. This conclusion was reached because of uncertainties relating to future taxable income, in terms of both its timing and its sufficiency, which would enable the Company to realize the deferred tax assets.

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Basis of Presentation (Tables)

9 Months Ended

Apr. 30, 2019

Disclosure Text Block [Abstract]

Schedule of New Accounting Pronouncements and Changes in Accounting Principles [Table Text Block]

The impact of the adoption of the standard on prior period consolidated operations, cash flows and balance sheet is presented in the table below:

	As Previously Reported	Adjustment for New Accounting Standard on Revenue Recognition	Reclassification of Residual	As Restated
Consolidated Statements of Operations for the three months ended April 30, 2018:
Total Revenues	$25,630	$(400)	—	$25,230
Provision for uncollectible accounts receivable	396	(400)	$4	—
Selling, general and administrative expenses	11,025	—	(4)	11,021
Net loss	$(3,016)	—	—	$(3,016)
Consolidated Statements of Operations for the nine months ended April 30, 2018:
Total Revenues	80,258	(2,000)		78,258
Provision for uncollectible accounts receivable	1,989	(2,000)	11	—
Selling, general and administrative expenses	32,986	—	(11)	32,975
Net loss	(4,557)	—	—	(4,557)
Consolidated Statements of Cash Flows April 30, 2018:
Provision for uncollectible accounts receivable	1,989	(2,000)	11	—
Changes in operating assets and liabilities: Accounts receivable	(1,233)	2,000	(11)	756
Consolidated balance sheet July 31, 2018:
Accounts receivable	15,815	(2,523)	—	13,292
Less: Allowance for doubtful accounts	2,668	(2,523)	—	145
Accounts receivable, net of allowance for doubtful accounts	13,147	—	—	13,147

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Revenue Recognition (Tables)

9 Months Ended

Apr. 30, 2019

Revenue from Contract with Customer [Abstract]

Schedule Of Segment Revenue And Revenue Percentage [Table Text Block]

The following table represents clinical services net revenues and percentages by type of customer:

	Three months ended April 30, 2019				Three months ended April 30, 2018
Revenue category
Third-party payer	$	5,799	50	%	$	9,965	56	%
Medicare		2,634	22			2,858	16
Patient self-pay		1,881	16			2,047	12
HMO’s		1,437	12			2,867	16
Total	$	11,751	100	%	$	17,737	100	%

	Nine months ended April 30, 2019				Nine months ended April 30, 2018
Revenue category
Third-party payer	$	20,213	53	%	$	32,726	59	%
Medicare		7,724	20			9,073	16
Patient self-pay		5,652	15			5,689	10
HMO’s		4,459	12			8,513	15
Total	$	38,048	100	%	$	56,001	100	%

Schedule of Segment Revenue By Geographical [Table Text Block]

Products revenue by geography is as follows:

	Three Months Ended April 30				Nine Months Ended April 30
	2019		2018		2019		2018
United States	$	4,585	$	3,987	$	12,570	$	11,500
Europe		1,620		1,529		4,370		4,422
Rest of the world		1,706		1,899		5,261		5,578
Total	$	7,911	$	7,415	$	22,201	$	21,500

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Inventories (Tables)

9 Months Ended

Apr. 30, 2019

Inventory Disclosure [Abstract]

Schedule of Inventory, Current [Table Text Block]

Inventories consist of the following:

	April 30, 2019		July 31, 2018
Raw materials	$	895	$	754
Work in process		2,480		2,174
Finished products		4,220		4,350
	$	7,595	$	7,278

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Goodwill and intangible assets (Tables)

9 Months Ended

Apr. 30, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Indefinite-Lived Intangible Assets [Table Text Block]

The Company’s change in the carrying amount of intangible assets, all in the Products segment is as follows:

	Gross			Accumulated Amortization			Net
July 31, 2018	$	27,347		$	(25,461	)	$	1,886
Amortization expense		—			(741	)		(741	)
Foreign currency translation		(110	)		93			(17	)
April 30, 2019	$	27,237		$	(26,109	)	$	1,128

Schedule of Intangible Assets [Table Text Block]

Intangible assets, all finite lived, consist of the following:

	April 30, 2019							July 31, 2018
	Gross		Accumulated Amortization			Net		Gross		Accumulated Amortization			Net
Patents	$	11,027	$	(10,992	)	$	35	$	11,027	$	(10,980	)	$	47
Customer relationships		11,745		(10,652	)		1,093		11,836		(9,997	)		1,839
Website and acquired content		1,008		(1,008	)		—		1,008		(1,008	)		—
Licensed technology and other		483		(483	)		—		483		(483	)		—
Trademarks		2,974		(2,974	)		—		2,993		(2,993	)		—
Total	$	27,237	$	(26,109	)	$	1,128	$	27,347	$	(25,461	)	$	1,886

Schedule of Useful Lives For Acquisitions [Table Text Block]

At April 30, 2019, information with respect to intangibles assets acquired is as follows:

	Useful life assigned	Weighted average remaining useful life
Customer relationships	8 -15 years	1 year
Other intangibles	10 years	4 years

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Loan Payable (Tables)

9 Months Ended

Apr. 30, 2019

Debt Disclosure [Abstract]

Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block]

Minimum future annual principal payments under the mortgage agreement as of April 30, 2019, are as follows:

April 30,
	2020	$	134
	2021		142
	2022		149
	2023		157
	2024		165
	Thereafter		3,691
			4,438
Less:	Current portion		(134	)
	Unamortized mortgage costs		(69	)
Mortgage loan, non-current, net		$	4,235

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Accrued Liabilities (Tables)

9 Months Ended

Apr. 30, 2019

Payables and Accruals [Abstract]

Schedule of Accrued Liabilities [Table Text Block]

Accrued liabilities consist of the following:

	April 30, 2019		July 31, 2018
Payroll, benefits, and commissions	$	4,848	$	4,870
Professional fees		592		811
Legal		167		2,121
Other		2,850		2,252
	$	8,457	$	10,054

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Stockholders' Equity (Tables)

9 Months Ended

Apr. 30, 2019

Stockholders' Equity Note [Abstract]

Share-based Payment Arrangement, Cost by Plan [Table Text Block]

The amounts of share-based compensation expense recognized in the periods presented are as follows:

	Three months ended April 30,				Nine months ended April 30,
	2019		2018		2019		2018
Stock options	$	197	$	202	$	718	$	609
Restricted stock		2		2		7		8
	$	199	$	204	$	725	$	617

Share-based Payment Arrangement, Expensed and Capitalized, Amount [Table Text Block]

The following table sets forth the amount of expense related to share-based payment arrangements included in specific line items in the accompanying statements of operations:

	Three months ended April 30,				Nine months ended April 30,
	2019		2018		2019		2018
Selling, general and administrative	$	199	$	204	$	725	$	617
	$	199	$	204	$	725	$	617

Share-based Payment Arrangement, Option, Activity [Table Text Block]

The following table summarizes stock option activity during the nine month period ended April 30, 2019:

	Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value (000s)
Outstanding at July 31, 2018		1,882,116		$	4.96
Awarded		712,821			2.81
Exercised		(238,230	)		2.69		$	117
Cancelled or expired		(3,500	)		5.86
Outstanding at end of period		2,353,207			4.53	3.1 years	$	496
Exercisable at end of period		1,215,231			5.24	1.0 years	$	22

Schedule of Nonvested Performance-based Units Activity [Table Text Block]

The following table summarizes PSU’s granted:

Period Ending	Total Grant		Fair Market Value At Grant Date (000s)
7/31/2018		32,000	$	141
1/31/2019		80,500	$	225

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Segment reporting (Tables)

9 Months Ended

Apr. 30, 2019

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment [Table Text Block]

The following financial information represents the operating results of the reportable segments of the Company:

Three months ended April 30, 2019	Clinical Services			Products			Therapeutics			Other			Consolidated
Revenues	$	11,751		$	7,911			—			—		$	19,662
Operating costs, expenses and legal settlements, net:
Cost of revenues		10,963			3,397			—			—			14,360
Research and development		31			527		$	223			—			781
Selling, general and administrative		5,960			2,923			—		$	2,037			10,920
Legal fee expense		35			16			—			206			257
Legal settlements, net		—			(28,925	)		—			—			(28,925	)
Total operating costs, expenses and legal settlements, net		16,989			(22,062	)		223			2,243			(2,607	)
Operating income (loss)		(5,238	)		29,973			(223	)		(2,243	)		22,269
Other income (expense):
Interest		(18	)		19			—			257			258
Other		6			—			—			64			70
Foreign exchange loss		—			(332	)		—			—			(332	)
Income (loss) before income taxes	$	(5,250	)	$	29,660		$	(223	)	$	(1,922	)	$	22,265
Depreciation and amortization included above	$	440		$	340		$	—		$	58		$	838
Share-based compensation included in above:
Selling, general and administrative		40			24			—			135			199
Total	$	40		$	24		$	—		$	135		$	199
Capital expenditures	$	120		$	446		$	—		$	—		$	566

Three months ended April 30, 2018	Clinical Services			Products			Therapeutics			Other			Consolidated
Revenues	$	17,737		$	7,493			—			—		$	25,230
Operating costs and expenses:
Cost of revenues		10,995			3,562			—			—			14,557
Research and development		—			576		$	223			—			799
Selling, general and administrative		6,252			2,970			—		$	1,799			11,021
Legal fee expense		25			19			—			1,607			1,651
Total operating costs and expenses		17,272			7,127			223			3,406			28,028
Operating income (loss)		465			366			(223	)		(3,406	)		(2,798	)
Other income (expense):
Interest		(22	)		12			—			237			227
Other		15			2			—			—			17
Foreign exchange loss		—			(462	)		—			—			(462	)
Income (loss) before income taxes	$	458		$	(82	)	$	(223	)	$	(3,169	)	$	(3,016	)
Depreciation and amortization included above	$	437		$	358		$	—		$	20		$	815
Share-based compensation included in above:
Selling, general and administrative		26			17			—			161			204
Total	$	26		$	17		$	—		$	161		$	204
Capital expenditures	$	465		$	96		$	—		$	—		$	561

Nine months ended April 30, 2019	Clinical Services			Products			Therapeutics			Other			Consolidated
Revenues	$	38,048		$	22,201			—			—		$	60,249
Operating costs, expenses and legal settlements, net:
Cost of revenues		32,956			10,391			—			—			43,347
Research and development		31			1,645		$	666			—			2,342
Selling, general and administrative		18,220			8,828			—		$	6,339			33,387
Legal fee expense		109			24			—			2,567			2,700
Legal settlements, net		—			(28,925	)		—			—			(28,925	)
Total operating costs, expenses and legal settlements, net		51,316			(8,037	)		666			8,906			52,851
Operating income (loss)		(13,268	)		30,238			(666	)		(8,906	)		7,398
Other income (expense):
Interest		(51	)		49			—			761			759
Other		17			—			—			232			249
Foreign exchange loss (gain)		—			(530	)		—			—			(530	)
(Loss) income before income taxes	$	(13,302	)	$	29,757		$	(666	)	$	(7,913	)	$	7,876
Depreciation and amortization included above	$	1,217		$	1,025		$	—		$	130		$	2,372
Share-based compensation included in above:
Selling, general and administrative		118			74			—			533			725
Total	$	118		$	74		$	—		$	533		$	725
Capital expenditures	$	883		$	524		$	—		$	6,147		$	7,554

Nine months ended April 30, 2018	Clinical Services			Products		Therapeutics			Other			Consolidated
Revenues	$	56,001		$	22,257		—			—		$	78,258
Operating costs and expenses:
Cost of revenues		34,767			10,828		—			—			45,595
Research and development		—			1,690	$	668			—			2,358
Selling, general and administrative		18,454			8,476		—		$	6,045			32,975
Legal fee expense		46			47		—			3,689			3,782
Total operating costs and expenses		53,267			21,041		668			9,734			84,710
Operating income (loss)		2,734			1,216		(668	)		(9,734	)		(6,452	)
Other income (expense):
Interest		(70	)		35		—			604			569
Other		32			10		—			44			86
Foreign exchange loss		—			143		—			—			143
Income (loss) before income taxes	$	2,696		$	1,404	$	(668	)	$	(9,086	)	$	(5,654	)
Depreciation and amortization included above	$	1,254		$	1,039	$	—		$	57		$	2,350
Share-based compensation included in above:
Selling, general and administrative		86			61		—			470			617
Total	$	86		$	61	$	—		$	470		$	617
Capital expenditures	$	1,459		$	167	$	—		$	—		$	1,626

XML

Basis of Presentation (Details) - USD ($)	3 Months Ended		9 Months Ended		12 Months Ended
	Apr. 30, 2019	Apr. 30, 2018	Apr. 30, 2019	Apr. 30, 2018	Jul. 31, 2018
Basis of Presentation (Details) [Line Items]
Minimum Estimated Material Impact On Financial Statements			$ 23,000,000
Maximum Estimated Material Impact On Financial Statements			25,000,000
Income Tax Expense (Benefit)	$ 0	$ 0	$ 0	$ (1,097,000)
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent				19.40%
Effective Income Tax Rate Reconciliation, Tax Credit, Amount				$ 1,100,000
Clinical Services [Member] | Revenue Benchmark [Member]
Basis of Presentation (Details) [Line Items]
Concentration Risk, Percentage			63.00%	72.00%
Clinical Services [Member] | Revenue Benchmark [Member] | Third Party Payer And Health Maintenance Organizations [Member]
Basis of Presentation (Details) [Line Items]
Concentration Risk, Percentage	33.00%	40.00%	39.00%	39.00%
Clinical Services [Member] | Accounts Receivable [Member] | Third Party Payer And Health Maintenance Organizations [Member]
Basis of Presentation (Details) [Line Items]
Concentration Risk, Percentage			14.00%		29.00%

XML

Basis of Presentation (Details) - Impact to consolidated statements of operations due to adoption of ASU - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Apr. 30, 2019	Apr. 30, 2018	Apr. 30, 2019	Apr. 30, 2018	Jul. 31, 2018
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total Revenues	$ 19,662	$ 25,230	$ 60,249	$ 78,258
Selling, general and administrative expenses	10,920	11,021	33,387	32,975
Net loss	22,265	(3,016)	7,876	(4,557)
Consolidated Statements of Cash Flows April 30, 2018:
Changes in operating assets and liabilities: Accounts receivable			1,605	756
Consolidated balance sheet July 31, 2018:
Accounts receivable					$ 13,292
Less: Allowance for doubtful accounts					145
Accounts receivable, net of allowance for doubtful accounts	$ 11,441		$ 11,441		13,147
Previously Reported [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total Revenues		25,630		80,258
Provision for uncollectible accounts receivable		396		1,989
Selling, general and administrative expenses		11,025		32,986
Net loss		(3,016)		(4,557)
Consolidated Statements of Cash Flows April 30, 2018:
Provision for uncollectible accounts receivable				1,989
Changes in operating assets and liabilities: Accounts receivable				(1,233)
Consolidated balance sheet July 31, 2018:
Accounts receivable					15,815
Less: Allowance for doubtful accounts					2,668
Accounts receivable, net of allowance for doubtful accounts					13,147
Accounting Standards Update 2014-09 [Member] | Restatement Adjustment [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total Revenues		(400)		(2,000)
Provision for uncollectible accounts receivable		(400)		(2,000)
Consolidated Statements of Cash Flows April 30, 2018:
Provision for uncollectible accounts receivable				(2,000)
Changes in operating assets and liabilities: Accounts receivable				2,000
Consolidated balance sheet July 31, 2018:
Accounts receivable					(2,523)
Less: Allowance for doubtful accounts					$ (2,523)
Accounting Standards Update 2014-09 [Member] | Reclassification Of Residual [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Provision for uncollectible accounts receivable		4		11
Selling, general and administrative expenses		$ (4)		(11)
Consolidated Statements of Cash Flows April 30, 2018:
Provision for uncollectible accounts receivable				11
Changes in operating assets and liabilities: Accounts receivable				$ (11)

XML

Net income (loss) per share (Details) - shares	3 Months Ended		9 Months Ended
	Apr. 30, 2019	Apr. 30, 2018	Apr. 30, 2019	Apr. 30, 2018
Unvested Restricted Stock [Member] | In the Money Stock Options [Member]
Net income (loss) per share (Details) [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount		431,000		694,000
Outstanding Options [Member] | Out of the Money Stock Options [Member]
Net income (loss) per share (Details) [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	1,640,000	581,000	1,541,000	194,000

XML

Revenue Recognition (Details) - USD ($)	3 Months Ended		9 Months Ended
	Apr. 30, 2019	Apr. 30, 2018	Apr. 30, 2019	Apr. 30, 2018
Third Party Payer And Health Maintenance Organizations [Member] | Minimum [Member]
Revenue Recognition (Details) [Line Items]
Billing Information Filing Deadline Period			60 days
Third Party Payer And Health Maintenance Organizations [Member] | Maximum [Member]
Revenue Recognition (Details) [Line Items]
Billing Information Filing Deadline Period			90 days
Government Payer Medicare [Member]
Revenue Recognition (Details) [Line Items]
Billing Information Filing Deadline Period			60 days
Patient self-pay [Member]
Revenue Recognition (Details) [Line Items]
Billing Period			210 days
Receivable Collection Period			180 days
Products Revenue And Royalty Income [Member]
Revenue Recognition (Details) [Line Items]
Claim Period For Return Of Goods			30 days
Royalty Income, Nonoperating (in Dollars)	$ 0	$ 78,000	$ 0	$ 639,000
Products Revenue And Royalty Income [Member] | Minimum [Member]
Revenue Recognition (Details) [Line Items]
Receivable Collection Period			30 days
Products Revenue And Royalty Income [Member] | Maximum [Member]
Revenue Recognition (Details) [Line Items]
Receivable Collection Period			90 days
Clinical Services [Member] | Revenue Benchmark [Member]
Revenue Recognition (Details) [Line Items]
Concentration Risk, Percentage			63.00%	72.00%
Clinical Services [Member] | Revenue Benchmark [Member] | Third Party Payer And Health Maintenance Organizations [Member]
Revenue Recognition (Details) [Line Items]
Concentration Risk, Percentage	33.00%	40.00%	39.00%	39.00%

XML

Revenue Recognition (Details) - Schedule of net revenues and percentages by type of customer - Clinical Services [Member] - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Apr. 30, 2019	Apr. 30, 2018	Apr. 30, 2019	Apr. 30, 2018
Revenue Recognition (Details) - Schedule of net revenues and percentages by type of customer [Line Items]
Revenue Services Net	$ 11,751	$ 17,737	$ 38,048	$ 56,001
Revenue Services Net Percentage	100.00%	100.00%	100.00%	100.00%
Third-Party Payer [Member]
Revenue Recognition (Details) - Schedule of net revenues and percentages by type of customer [Line Items]
Revenue Services Net	$ 5,799	$ 9,965	$ 20,213	$ 32,726
Revenue Services Net Percentage	50.00%	56.00%	53.00%	59.00%
Medicare [Member]
Revenue Recognition (Details) - Schedule of net revenues and percentages by type of customer [Line Items]
Revenue Services Net	$ 2,634	$ 2,858	$ 7,724	$ 9,073
Revenue Services Net Percentage	22.00%	16.00%	20.00%	16.00%
Patient self-pay [Member]
Revenue Recognition (Details) - Schedule of net revenues and percentages by type of customer [Line Items]
Revenue Services Net	$ 1,881	$ 2,047	$ 5,652	$ 5,689
Revenue Services Net Percentage	16.00%	12.00%	15.00%	10.00%
HMO’s [Member]
Revenue Recognition (Details) - Schedule of net revenues and percentages by type of customer [Line Items]
Revenue Services Net	$ 1,437	$ 2,867	$ 4,459	$ 8,513
Revenue Services Net Percentage	12.00%	16.00%	12.00%	15.00%

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Revenue Recognition (Details) - Schedule of product revenue by geography - Life Sciences [Member] - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Apr. 30, 2019	Apr. 30, 2018	Apr. 30, 2019	Apr. 30, 2018
Revenue Recognition (Details) - Schedule of product revenue by geography [Line Items]
Products revenue	$ 7,911	$ 7,415	$ 22,201	$ 21,500
UNITED STATES
Revenue Recognition (Details) - Schedule of product revenue by geography [Line Items]
Products revenue	4,585	3,987	12,570	11,500
Europe [Member]
Revenue Recognition (Details) - Schedule of product revenue by geography [Line Items]
Products revenue	1,620	1,529	4,370	4,422
Rest of world [Member]
Revenue Recognition (Details) - Schedule of product revenue by geography [Line Items]
Products revenue	$ 1,706	$ 1,899	$ 5,261	$ 5,578

XML

Supplemental disclosure for statement of cash flows (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Apr. 30, 2019	Apr. 30, 2018	Apr. 30, 2019	Apr. 30, 2018
Supplemental disclosure for statement of cash flows (Details) [Line Items]
Income Taxes Paid			$ 94	$ 65
Interest Paid			138	61
Capital Lease Obligation Cost Basis			$ 381	0
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period (in Shares)			238,230
Stock Issued During Period, Value, Employee Benefit Plan	$ 832	$ 782	$ 832	$ 782
Directors And Officers [Member]
Supplemental disclosure for statement of cash flows (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period (in Shares)	203,511		203,511
Stock Issued During Period Shares Stock Options Exercised1 (in Shares)	23,376		23,376

XML

Inventories (Details) - Schedule of inventory, current - USD ($) $ in Thousands	Apr. 30, 2019	Jul. 31, 2018
Schedule of inventory, current [Abstract]
Raw materials	$ 895	$ 754
Work in process	2,480	2,174
Finished products	4,220	4,350
	$ 7,595	$ 7,278

XML

Goodwill and intangible assets (Details) - USD ($) $ in Thousands	9 Months Ended
	Apr. 30, 2019	Jul. 31, 2018
Goodwill and intangible assets (Details) [Line Items]
Goodwill	$ 7,452	$ 7,452
Intangible Assets, Amortization Period [Member]
Goodwill and intangible assets (Details) [Line Items]
Finite-Lived Intangible Asset, Useful Life	1 year
Clinical Services [Member]
Goodwill and intangible assets (Details) [Line Items]
Goodwill	$ 7,452	$ 7,452

XML

Goodwill and intangible assets (Details) - Schedule of indefinite-lived intangible assets - Products [Member] $ in Thousands	9 Months Ended
	Apr. 30, 2019 USD ($)
Indefinite-lived Intangible Assets [Line Items]
Gross, Beginning Balance	$ 27,347
Accumulated Amortization, Beginning Balance	(25,461)
Net, Beginning Balance	1,886
Amortization expense, Accumulated Amortization	(741)
Amortization expense, Net	(741)
Foreign currency translation, Gross	(110)
Foreign currency translation, Accumulated Amortization	93
Foreign currency translation, Net	(17)
Gross, Ending Balance	27,237
Accumulated Amortization, Ending Balance	(26,109)
Net, Ending Balance	$ 1,128

XML

Goodwill and intangible assets (Details) - Schedule of intangible assets - USD ($) $ in Thousands	Apr. 30, 2019	Jul. 31, 2018
Goodwill and intangible assets (Details) - Schedule of intangible assets [Line Items]
Finite-lived intangible assets, Gross	$ 27,237	$ 27,347
Finite-lived intangible assets, Accumulated Amortization	(26,109)	(25,461)
Finite-lived intangible assets, Net	1,128	1,886
Patents [Member]
Goodwill and intangible assets (Details) - Schedule of intangible assets [Line Items]
Finite-lived intangible assets, Gross	11,027	11,027
Finite-lived intangible assets, Accumulated Amortization	(10,992)	(10,980)
Finite-lived intangible assets, Net	35	47
Customer Relationships [Member]
Goodwill and intangible assets (Details) - Schedule of intangible assets [Line Items]
Finite-lived intangible assets, Gross	11,745	11,836
Finite-lived intangible assets, Accumulated Amortization	(10,652)	(9,997)
Finite-lived intangible assets, Net	1,093	1,839
Website And Acquired Content [Member]
Goodwill and intangible assets (Details) - Schedule of intangible assets [Line Items]
Finite-lived intangible assets, Gross	1,008	1,008
Finite-lived intangible assets, Accumulated Amortization	(1,008)	(1,008)
Licensed Technology And Other [Member]
Goodwill and intangible assets (Details) - Schedule of intangible assets [Line Items]
Finite-lived intangible assets, Gross	483	483
Finite-lived intangible assets, Accumulated Amortization	(483)	(483)
Trademarks [Member]
Goodwill and intangible assets (Details) - Schedule of intangible assets [Line Items]
Finite-lived intangible assets, Gross	2,974	2,993
Finite-lived intangible assets, Accumulated Amortization	$ (2,974)	$ (2,993)

XML

Goodwill and intangible assets (Details) - Schedule of useful lives for acquisitions	9 Months Ended
	Apr. 30, 2019
Customer Relationships [Member]
Goodwill and intangible assets (Details) - Schedule of useful lives for acquisitions [Line Items]
Weighted average remaining useful life	1 year
Other Intangible Assets [Member]
Goodwill and intangible assets (Details) - Schedule of useful lives for acquisitions [Line Items]
Useful life assigned	10 years
Weighted average remaining useful life	4 years
Minimum [Member] | Customer Relationships [Member]
Goodwill and intangible assets (Details) - Schedule of useful lives for acquisitions [Line Items]
Useful life assigned	8 years
Maximum [Member] | Customer Relationships [Member]
Goodwill and intangible assets (Details) - Schedule of useful lives for acquisitions [Line Items]
Useful life assigned	15 years

XML

Loan Payable (Details) - Mortgage Agreement [Member] - USD ($) $ in Thousands	1 Months Ended	9 Months Ended
	Nov. 27, 2018	Apr. 30, 2019
Loan Payable (Details) [Line Items]
Debt Instrument, Face Amount	$ 4,500
Debt Instrument Maturity Period		10 years
Debt Instrument, Interest Rate, Stated Percentage	5.09%
Debt Instrument, Periodic Payment	$ 30
Amortization of Debt Issuance Costs	$ 72
Unamortized Debt Issuance Expense		$ 69
Operating Leases, Future Minimum Payments Due		4,438
Cash Collateral for Borrowed Securities		$ 750

XML

Loan Payable (Details) - Schedule of future annual principal payments - Mortgage Agreement [Member] $ in Thousands	Apr. 30, 2019 USD ($)
Loan Payable (Details) - Schedule of future annual principal payments [Line Items]
2020	$ 134
2021	142
2022	149
2023	157
2024	165
Thereafter	3,691
	4,438
Less: Current portion	(134)
Unamortized mortgage costs	(69)
Mortgage loan, non-current, net	$ 4,235

XML

Accrued Liabilities (Details) - Schedule of Accrued liabilities - USD ($) $ in Thousands	Apr. 30, 2019	Jul. 31, 2018
Schedule of Accrued liabilities [Abstract]
Payroll, benefits, and commissions	$ 4,848	$ 4,870
Professional fees	592	811
Legal	167	2,121
Other	2,850	2,252
	$ 8,457	$ 10,054

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Stockholders' Equity (Details) - USD ($)		3 Months Ended		6 Months Ended	9 Months Ended		12 Months Ended
	Jan. 05, 2018	Apr. 30, 2019	Apr. 30, 2018	Jan. 31, 2019	Apr. 30, 2019	Apr. 30, 2018	Jul. 31, 2018	Dec. 31, 2014	Jan. 14, 2011
Stockholders' Equity (Details) [Line Items]
Common Stock, Par or Stated Value Per Share (in Dollars per share)		$ 0.01			$ 0.01		$ 0.01
Percentage of Commission Payable on Equity Offering					3.00%
Maximum Offering Price Under Sales Agreement (in Dollars)		$ 20,000,000			$ 20,000,000			$ 20,000,000
Excess Tax Benefit from Share-based Compensation, Financing Activities (in Dollars)					0	$ 0
Share-based Payment Arrangement, Nonvested Award, Option, Cost Not yet Recognized, Amount (in Dollars)		1,200,000			$ 1,200,000
Share-based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition					17 months
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period					238,230
Stock Issued During Period, Value, Employee Benefit Plan (in Dollars)		$ 832,000	$ 782,000		$ 832,000	782,000
Performance Shares [Member]
Stockholders' Equity (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period					3 years
Restricted Stock [Member]
Stockholders' Equity (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number		1,628			1,628
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value (in Dollars per share)		$ 6.00			$ 6.00
Share-based Payment Arrangement, Nonvested Award, Excluding Option, Cost Not yet Recognized, Amount (in Dollars)		$ 10,000			$ 10,000
Share Based Compensation Arrangement By Share Based Payment Award Equity Instruments Other Than Options Nonvested Outstanding Weighted Average Remaining Contractual Terms					21 months
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period					0
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period					985
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested in Period, Fair Value (in Dollars)					$ 4,000
Stock Issued During Period, Value, Employee Benefit Plan (in Dollars)					$ 832,000	$ 782,000
2011 Plan [Member]
Stockholders' Equity (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized	5,000,000								3,000,000
Share-based Compensation Arrangement by Share-based Payment Award, Number of Additional Shares Authorized	2,000,000
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant		1,222,000			1,222,000
Common Stock [Member]
Stockholders' Equity (Details) [Line Items]
Authorized Common Stock That May Be Issued And Sold Under Sales Agreement (in Dollars)							$ 19,150,000
Securities That May Be Sold Under The Agreement (in Dollars)							$ 150,000,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period			46,022		34,719	274,726
Stock Issued During Period Shares Stock Options Exercised1					23,376
Stock Issued During Period, Value, Employee Benefit Plan (in Dollars)		$ 3,000			$ 3,000
Stock Issued During Period, Shares, Employee Benefit Plan		315,472	37,580		315,472	37,580
Treasury Stock, Shares, Acquired						340,898
Common Stock [Member] | Restricted Stock [Member]
Stockholders' Equity (Details) [Line Items]
Stock Issued During Period, Shares, Employee Benefit Plan					315,472	37,580
Treasury Stock [Member]
Stockholders' Equity (Details) [Line Items]
Stock Issued During Period, Value, Employee Benefit Plan (in Dollars)			$ 1,014,000			$ 1,014,000
Stock Issued During Period, Shares, Employee Benefit Plan			(106,911)			(106,911)
Treasury Stock, Shares, Acquired						106,911
Treasury Stock [Member] | Restricted Stock [Member]
Stockholders' Equity (Details) [Line Items]
Treasury Stock, Shares, Acquired						106,911
Directors And Officers [Member]
Stockholders' Equity (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period		203,511			203,511
Stock Issued During Period Shares Stock Options Exercised1		23,376			23,376
Executive Officer [Member] | Performance Shares [Member]
Stockholders' Equity (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period					3 years		3 years
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period				80,500			32,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested in Period, Fair Value (in Dollars)				$ 225,000			$ 141,000

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Stockholders' Equity (Details) - Schedule of share-based compensation expense - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Apr. 30, 2019	Apr. 30, 2018	Apr. 30, 2019	Apr. 30, 2018
Stockholders' Equity (Details) - Schedule of share-based compensation expense [Line Items]
Share-based compensation expense	$ 199	$ 204	$ 725	$ 617
Options [Member]
Stockholders' Equity (Details) - Schedule of share-based compensation expense [Line Items]
Share-based compensation expense	197	202	718	609
Restricted Stocks [Member]
Stockholders' Equity (Details) - Schedule of share-based compensation expense [Line Items]
Share-based compensation expense	$ 2	$ 2	$ 7	$ 8

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Stockholders' Equity (Details) - Schedule of share-based compensation expense by line item - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Apr. 30, 2019	Apr. 30, 2018	Apr. 30, 2019	Apr. 30, 2018
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Share-based Payment Arrangement	$ 199	$ 204	$ 725	$ 617
Selling, General and Administrative Expenses [Member]
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Share-based Payment Arrangement	$ 199	$ 204	$ 725	$ 617

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Stockholders' Equity (Details) - Schedule of stock option plans - USD ($) $ / shares in Units, $ in Thousands	9 Months Ended
	Apr. 30, 2019
Schedule of stock option plans [Abstract]
Outstanding, Options at July 31, 2018	1,882,116
Outstanding, Weighted Avarage Exercise Price at July 31, 2018	$ 4.96
Awarded, Options	712,821
Awarded, Weighted Avarage Exercise Price	$ 2.81
Exercised, Options	(238,230)
Exercised, Weighted Avarage Exercise Price	$ 2.69
Exercised, Aggregate Intrinsic Value	$ 117
Cancelled or expired, Options	(3,500)
Cancelled or expired, Weighted Avarage Exercise Price	$ 5.86
Outstanding, Options at end of period	2,353,207
Outstanding, Weighted Avarage Exercise Price at end of period	$ 4.53
Outstanding, Weighted Average Remaining Contractual Term	3 years 36 days
Outstanding, Aggregate Intrinsic Value	$ 496
Exercisable, Options at end of period	1,215,231
Exercisable, Weighted Avarage Exercise Price at end of period	$ 5.24
Exercisable, Weighted Average Remaining Contractual Term	1 year
Exercisable, Aggregate Intrinsic Value	$ 22

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Stockholders' Equity (Details) - Shedule of performance stock units activity - Executive Officer [Member] - Performance Shares [Member] - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jan. 31, 2019	Jul. 31, 2018
Stockholders' Equity (Details) - Shedule of performance stock units activity [Line Items]
Total Grant	80,500	32,000
Fair Market Value Grant Date	$ 225	$ 141

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Segment reporting (Details)	9 Months Ended
	Apr. 30, 2019
Segment Reporting [Abstract]
Number of Reportable Segments	3

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Segment reporting (Details) - Schedule of segment reporting information, by segment - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Apr. 30, 2019	Apr. 30, 2018	Apr. 30, 2019	Apr. 30, 2018
Clinical Services [Member]
Segment Reporting Information [Line Items]
Revenues	$ 11,751	$ 17,737	$ 38,048	$ 56,001
Cost of revenues	10,963	10,995	32,956	34,767
Research and development	31		31
Selling, general and administrative	5,960	6,252	18,220	18,454
Legal fee expense	35	25	109	46
Total operating costs and expenses	16,989	17,272	51,316	53,267
Operating income (loss)	(5,238)	465	(13,268)	2,734
Interest	(18)	(22)	(51)	(70)
Other	6	15	17	32
Income (loss) before income taxes	(5,250)	458	(13,302)	2,696
Depreciation and amortization included above	440	437	1,217	1,254
Capital expenditures	120	465	883	1,459
Clinical Services [Member] | Selling, General and Administrative Expenses [Member]
Segment Reporting Information [Line Items]
Share-based compensation	40	26	118	86
Clinical Services [Member] | Total [Member]
Segment Reporting Information [Line Items]
Share-based compensation	40	26	118	86
Products [Member]
Segment Reporting Information [Line Items]
Revenues	7,911	7,493	22,201	22,257
Cost of revenues	3,397	3,562	10,391	10,828
Research and development	527	576	1,645	1,690
Selling, general and administrative	2,923	2,970	8,828	8,476
Legal fee expense	16	19	24	47
Legal settlements, net	(28,925)		(28,925)
Total operating costs and expenses	(22,062)	7,127	(8,037)	21,041
Operating income (loss)	29,973	366	30,238	1,216
Interest	19	12	49	35
Other		2		10
Foreign exchange loss (gain)	(332)	(462)	(530)	143
Income (loss) before income taxes	29,660	(82)	29,757	1,404
Depreciation and amortization included above	340	358	1,025	1,039
Capital expenditures	446	96	524	167
Products [Member] | Selling, General and Administrative Expenses [Member]
Segment Reporting Information [Line Items]
Share-based compensation	24	17	74	61
Products [Member] | Total [Member]
Segment Reporting Information [Line Items]
Share-based compensation	24	17	74	61
Consolidated [Member]
Segment Reporting Information [Line Items]
Revenues	19,662	25,230	60,249	78,258
Cost of revenues	14,360	14,557	43,347	45,595
Research and development	781	799	2,342	2,358
Selling, general and administrative	10,920	11,021	33,387	32,975
Legal fee expense	257	1,651	2,700	3,782
Legal settlements, net	(28,925)		(28,925)
Total operating costs and expenses	(2,607)	28,028	52,851	84,710
Operating income (loss)	22,269	(2,798)	7,398	(6,452)
Interest	258	227	759	569
Other	70	17	249	86
Foreign exchange loss (gain)	(332)	(462)	(530)	143
Income (loss) before income taxes	22,265	(3,016)	7,876	(5,654)
Depreciation and amortization included above	838	815	2,372	2,350
Capital expenditures	566	561	7,554	1,626
Consolidated [Member] | Selling, General and Administrative Expenses [Member]
Segment Reporting Information [Line Items]
Share-based compensation	199	204	725	617
Consolidated [Member] | Total [Member]
Segment Reporting Information [Line Items]
Share-based compensation	199	204	725	617
Therapeutics [Member]
Segment Reporting Information [Line Items]
Research and development	223	223	666	668
Total operating costs and expenses	223	223	666	668
Operating income (loss)	(223)	(223)	(666)	(668)
Income (loss) before income taxes	(223)	(223)	(666)	(668)
Other Segments [Member]
Segment Reporting Information [Line Items]
Selling, general and administrative	2,037	1,799	6,339	6,045
Legal fee expense	206	1,607	2,567	3,689
Total operating costs and expenses	2,243	3,406	8,906	9,734
Operating income (loss)	(2,243)	(3,406)	(8,906)	(9,734)
Interest	257	237	761	604
Other	64		232	44
Income (loss) before income taxes	(1,922)	(3,169)	(7,913)	(9,086)
Depreciation and amortization included above	58	20	130	57
Capital expenditures			6,147
Other Segments [Member] | Selling, General and Administrative Expenses [Member]
Segment Reporting Information [Line Items]
Share-based compensation	135	161	533	470
Other Segments [Member] | Total [Member]
Segment Reporting Information [Line Items]
Share-based compensation	$ 135	$ 161	$ 533	$ 470

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Contingencies (Details) $ in Thousands		3 Months Ended	9 Months Ended
	Feb. 05, 2019 USD ($)	Apr. 30, 2019 USD ($)	Apr. 30, 2019 USD ($)
Contingencies (Details) [Line Items]
Number Of Pending Cases			3
Gain (Loss) Related to Litigation Settlement	$ 19,400	$ 28,925	$ 28,925
Roche [Member]
Contingencies (Details) [Line Items]
Litigation Settlement, Amount Awarded from Other Party	$ 21,000
Hologic Inc [Member]
Contingencies (Details) [Line Items]
Litigation Settlement, Amount Awarded from Other Party		14,000
Gain (Loss) Related to Litigation Settlement		$ 9,500