DOCUMENT_AND_ENTITY_INFORMATIO
DOCUMENT AND ENTITY INFORMATION | 9 Months Ended | |
Sep. 30, 2013 | Nov. 13, 2013 | |
Entity Information | ' | ' |
Entity Registrant Name | 'TRANSGENOMIC INC | ' |
Entity Central Index Key | '0001043961 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Sep-13 | ' |
Document Fiscal Year Focus | '2013 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Amendment Flag | 'false | ' |
Entity Common Stock, Shares Outstanding | ' | 88,245,725 |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
CURRENT ASSETS: | ' | ' |
Cash and cash equivalents | $4,016 | $4,497 |
Accounts receivable, net | 4,414 | 8,081 |
Inventories, net | 4,454 | 5,092 |
Other current assets | 1,290 | 1,047 |
Total current assets | 14,174 | 18,717 |
PROPERTY AND EQUIPMENT: | ' | ' |
Equipment | 11,164 | 10,682 |
Furniture, fixtures & leasehold improvements | 3,863 | 3,848 |
Property, Plant and Equipment, Gross | 15,027 | 14,530 |
Less: accumulated depreciation | -12,907 | -12,340 |
Property, Plant and Equipment, Net | 2,120 | 2,190 |
OTHER ASSETS: | ' | ' |
Goodwill | 6,918 | 6,918 |
Intangibles, net | 9,563 | 10,764 |
Other assets | 405 | 202 |
Assets | 33,180 | 38,791 |
CURRENT LIABILITIES: | ' | ' |
Current maturities of long term debt | 1,091 | 6,171 |
Accounts payable | 1,907 | 2,052 |
Accrued compensation | 1,386 | 1,121 |
Accrued expenses | 2,393 | 3,686 |
Deferred revenue | 1,147 | 1,171 |
Other liabilities | 1,067 | 1,067 |
Total current liabilities | 8,991 | 15,268 |
LONG TERM LIABILITIES: | ' | ' |
Long term debt, less current maturities | 5,469 | 0 |
Common stock warrant liability | 300 | 900 |
Accrued preferred stock dividend | 1,805 | 1,260 |
Other long-term liabilities | 1,221 | 1,089 |
Total liabilities | 17,786 | 18,517 |
STOCKHOLDERS’ EQUITY: | ' | ' |
Series A preferred stock, $.01 par value, 15,000,000 shares authorized, 2,586,205 shares issued and outstanding | 26 | 26 |
Common stock, $.01 par value, 150,000,000 shares authorized, 88,245,725 and 71,645,725 shares issued and outstanding, respectively | 882 | 721 |
Additional paid-in capital | 178,458 | 170,881 |
Accumulated other comprehensive income | 365 | 435 |
Accumulated deficit | -164,337 | -151,789 |
Total stockholders’ equity | 15,394 | 20,274 |
Liabilities and equity | $33,180 | $38,791 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS PARENTHETICALS (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
STOCKHOLDERS’ EQUITY: | ' | ' |
Common stock, par value | $0.01 | $0.01 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 88,245,725 | 71,645,725 |
Common stock, shares outstanding | 88,245,725 | 71,645,725 |
Preferred stock, par value | $0.01 | $0.01 |
Preferred stock, shares authorized | 15,000,000 | 15,000,000 |
Preferred stock, shares issued | 2,586,205 | 2,586,205 |
Preferred stock, shares outstanding | 2,586,205 | 2,586,205 |
UNAUDITED_CONDENSED_CONSOLIDAT
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
NET SALES | $6,646 | $7,889 | $21,326 | $24,188 |
COST OF GOODS SOLD: | 3,795 | 4,089 | 11,384 | 12,722 |
Gross profit | 2,851 | 3,800 | 9,942 | 11,466 |
OPERATING EXPENSES: | ' | ' | ' | ' |
Selling, general and administrative | 7,627 | 5,559 | 19,783 | 15,832 |
Research and development | 630 | 668 | 2,307 | 1,870 |
Operating Expenses | 8,257 | 6,227 | 22,090 | 17,702 |
LOSS FROM OPERATIONS | -5,406 | -2,427 | -12,148 | -6,236 |
OTHER INCOME (EXPENSE): | ' | ' | ' | ' |
Interest expense, net | -155 | -207 | -459 | -713 |
Effect on warrants | 0 | 0 | 600 | 1,000 |
Other, net | 1 | -6 | 54 | 23 |
Other Income (Expense) | -154 | -213 | 195 | 310 |
LOSS BEFORE INCOME TAXES | -5,560 | -2,640 | -11,953 | -5,926 |
INCOME TAX EXPENSE | -8 | 114 | 52 | 88 |
NET LOSS | -5,552 | -2,754 | -12,005 | -6,014 |
PREFERRED STOCK DIVIDENDS | -181 | -165 | -544 | -495 |
NET LOSS AVAILABLE TO COMMON STOCKHOLDERS | ($5,733) | ($2,919) | ($12,549) | ($6,509) |
BASIC AND DILUTED LOSS PER COMMON SHARE | ($0.06) | ($0.04) | ($0.14) | ($0.09) |
BASIC AND DILUTED WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING | 88,245,725 | 71,645,725 | 86,847,190 | 68,669,229 |
UNAUDITED_CONDENSED_CONSOLIDAT1
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Net loss | ($5,552) | ($2,754) | ($12,005) | ($6,014) |
Other comprehensive income (loss) - foreign currency translation adjustment, net of tax | 104 | 88 | -69 | 98 |
Comprehensive Loss | ($5,448) | ($2,666) | ($12,074) | ($5,916) |
UNAUDITED_CONDENSED_CONSOLIDAT2
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (USD $) | Total | Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income |
In Thousands, except Share data, unless otherwise specified | ||||||
Balance at Dec. 31, 2011 | $11,048 | $26 | $501 | $152,987 | ($142,802) | $336 |
Balance, shares at Dec. 31, 2011 | ' | 2,586,205 | 49,625,725 | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' | ' |
Net loss | -8,327 | ' | ' | ' | -8,327 | ' |
Foreign currency translation adjustment, net of tax | 99 | ' | ' | ' | ' | 99 |
Stock-based compensation | 731 | ' | ' | 731 | ' | ' |
Private Placement, net, shares | ' | ' | 22,000,000 | ' | ' | ' |
Private placement, net | 17,373 | ' | 220 | 17,153 | ' | ' |
Issuance of shares of stock for employee stock options, shares | ' | ' | 20,000 | ' | ' | ' |
Issuance of shares of stock for employee stock options | 10 | ' | ' | 10 | ' | ' |
Dividends on preferred stock | -660 | ' | ' | ' | -660 | ' |
Balance at Dec. 31, 2012 | 20,274 | 26 | 721 | 170,881 | -151,789 | 435 |
Balance, shares at Dec. 31, 2012 | ' | 2,586,205 | 71,645,725 | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' | ' |
Net loss | -12,005 | ' | ' | ' | -12,005 | ' |
Foreign currency translation adjustment, net of tax | -69 | ' | ' | ' | ' | -69 |
Stock-based compensation | 167 | ' | ' | ' | ' | ' |
Private Placement, net, shares | ' | ' | 16,600,000 | ' | ' | ' |
Private placement, net | 7,571 | ' | 166 | 7,405 | ' | ' |
Issuance of shares of stock for employee stock options, shares | 0 | ' | ' | ' | ' | ' |
Other, shares | ' | ' | ' | ' | ' | ' |
Other | 0 | ' | -5 | 5 | 0 | 0 |
Dividends on preferred stock | -544 | ' | ' | ' | -544 | ' |
Balance at Sep. 30, 2013 | $15,394 | $26 | $882 | $178,458 | ($164,338) | $366 |
Balance, shares at Sep. 30, 2013 | ' | 2,586,205 | 88,245,725 | ' | ' | ' |
UNAUDITED_CONDENSED_CONSOLIDAT3
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
CASH FLOWS USED IN OPERATING ACTIVITIES: | ' | ' |
Net loss | ($12,005) | ($6,014) |
Adjustments to reconcile net loss to net cash flows used in operating activities: | ' | ' |
Depreciation and amortization | 2,102 | 1,570 |
Stock based compensation | 168 | 556 |
Provision for losses on doubtful accounts | 5,205 | 1,649 |
Provision for losses on inventory obsolescence | 19 | 88 |
Warrant revaluation | -600 | -1,000 |
Loss on sale of fixed assets | 9 | 0 |
Gain on foreign currency settlement | -62 | 0 |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable | -1,539 | -2,153 |
Inventories | 589 | -616 |
Other current assets | -268 | -377 |
Accounts payable | -145 | -1,113 |
Accrued expenses | 32 | -403 |
Other liabilities | 163 | 3 |
Deferred income taxes | 0 | 33 |
Net cash flows used in operating activities | -6,332 | -7,777 |
CASH FLOWS USED IN INVESTING ACTIVITIES: | ' | ' |
Purchases of property and equipment | -510 | -641 |
Purchases of short term investments | 0 | -8,994 |
Acquisition | -849 | -3,394 |
Other assets | -238 | -345 |
Net cash flows used in investing activities | -1,597 | -8,378 |
CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES: | ' | ' |
Principal payments on capital lease obligations | -264 | -244 |
Issuance of common stock, net of issuance costs | 7,570 | 17,483 |
Payment of deferred financing costs | -241 | 0 |
Proceeds from borrowings | 6,560 | 0 |
Principal payment on note payable | -6,171 | -1,317 |
Net cash flows provided by financing activities | 7,454 | 15,922 |
EFFECT OF FOREIGN CURRENCY EXCHANGE RATE CHANGES ON CASH | -6 | 34 |
NET CHANGE IN CASH AND CASH EQUIVALENTS | -481 | -199 |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 4,497 | 4,946 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 4,016 | 4,747 |
Cash paid during the period for: | ' | ' |
Interest | 615 | 753 |
Income taxes, net | 0 | 2 |
SUPPLEMENTAL DISCLOSURE OF NON-CASH INFORMATION | ' | ' |
Acquisition of equipment through capital leases | 0 | 175 |
Dividends accrued on preferred stock | 544 | 495 |
Note payable converted to equity | 0 | 3,000 |
Deferred financing costs in accounts payable | $0 | $0 |
BUSINESS_DESCRIPTION
BUSINESS DESCRIPTION | 9 Months Ended | |
Sep. 30, 2013 | ||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' | |
Business Description and Basis of Presentation | ' | |
BUSINESS DESCRIPTION | ||
Business Description. | ||
Transgenomic, Inc. is a global biotechnology company advancing personalized medicine in the detection and treatment of cancer and inherited diseases through its proprietary molecular technologies and clinical and research services. We have two complementary business segments: | ||
• | Laboratory Services. Our clinical laboratories specialize in genetic testing for cardiology, neurology, mitochondrial disorders and oncology. Our clinical laboratories located in New Haven, Connecticut and Omaha, Nebraska are certified under the Clinical Laboratory Improvement Amendment (“CLIA”) as high complexity labs and our Omaha facility is also accredited by the College of American Pathologists (“CAP”). Our laboratory located in Omaha, Nebraska also provides pharmacogenomics research services supporting Phase II and Phase III clinical trials conducted by pharmaceutical companies. Our laboratories employ a variety of genomic testing service technologies, including ICE COLD-PCR technology. ICE COLD-PCR is a proprietary platform technology that can be run in any laboratory with standard PCR technology and that enables detection of mutations from virtually any sample type including tissue biopsies, blood and circulating tumor cells (“CTCs”) at levels greater than 1,000-fold higher than standard DNA sequencing techniques. | |
• | Diagnostic Tools. Our proprietary product is the WAVE® System, which has broad applicability to genetic variation detection in both molecular genetic research and molecular diagnostics. We also distribute bioinstruments produced by other manufacturers (“OEM Equipment”) through our sales and distribution network. Service contracts to maintain installed systems are sold and supported by our technical support personnel. The installed WAVE base and some OEM Equipment platforms generate a demand for consumables that are required for the continued operation of the bioinstruments. We develop, manufacture and sell these consumable products. In addition, we manufacture and sell consumable products that can be used on multiple, independent platforms. These products include SURVEYOR® Nuclease and a range of chromatography columns. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Accounting Policies [Abstract] | ' | |||||||||||||||
Significant Accounting Policies | ' | |||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||||||||||
Basis of Presentation. | ||||||||||||||||
The condensed consolidated balance sheet as of December 31, 2012 was derived from our audited balance sheet as of that date. The accompanying condensed consolidated financial statements as of and for the three and nine months ended September 30, 2013 and 2012 are unaudited and reflect all adjustments that are, in the opinion of management, necessary for a fair presentation of the financial position and operating results for the interim periods. These unaudited condensed consolidated financial statements and notes should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2012 contained in our Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 14, 2013. The results of operations for the interim periods presented are not necessarily indicative of the results for the entire year. | ||||||||||||||||
Principles of Consolidation. | ||||||||||||||||
The consolidated financial statements include the accounts of Transgenomic, Inc. and its wholly owned subsidiary. All inter-company balances and transactions have been eliminated in consolidation. | ||||||||||||||||
Risks and Uncertainties. | ||||||||||||||||
Certain risks and uncertainties are inherent in our day-to-day operations and to the process of preparing our financial statements. The more significant of those risks are presented below and throughout the notes to the unaudited condensed consolidated financial statements. | ||||||||||||||||
Use of Estimates. | ||||||||||||||||
The preparation of condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of net sales and expenses during the reporting period. In addition, estimates and assumptions associated with the determination of the fair value of certain assets and related impairments require considerable judgment by management. Actual results could differ from the estimates and assumptions used in preparing these consolidated financial statements. | ||||||||||||||||
Reclassifications. | ||||||||||||||||
Certain prior year amounts have been reclassified in order to conform to the current year presentation regarding segment reporting. In the second quarter of 2013, we modified the presentation of our accrued preferred stock dividend payable from current liabilities to long term liabilities. As a result, we have revised the balance sheet presentation as of December 31, 2012. This revision from current liabilities to long term liabilities has no effect on total assets, liabilities or equity. | ||||||||||||||||
Fair Value. | ||||||||||||||||
Unless otherwise specified, book value approximates fair market value. The common stock warrant liability is recorded at fair value. See Note 9 - “Fair Value” to the notes to our accompanying unaudited condensed consolidated financial statements for additional information. | ||||||||||||||||
Cash and Cash Equivalents. | ||||||||||||||||
Cash and cash equivalents include cash and investments with original maturities at the date of acquisition of three months or less. | ||||||||||||||||
Concentrations of Cash. | ||||||||||||||||
From time to time, we may maintain a cash position with financial institutions in amounts that exceed federally insured limits. We have not experienced any losses on such accounts as of September 30, 2013. | ||||||||||||||||
Accounts Receivable. | ||||||||||||||||
The following is a summary of activity for the allowance for doubtful accounts during the three and nine months ended September 30, 2013 and 2012: | ||||||||||||||||
Dollars in Thousands | ||||||||||||||||
Beginning | Provision | Write Offs | Ending | |||||||||||||
Balance | Balance | |||||||||||||||
Three Months Ended September 30, 2013 | $ | 2,362 | $ | 2,769 | $ | (1,086 | ) | $ | 4,045 | |||||||
Three Months Ended September 30, 2012 | $ | 1,236 | $ | 679 | $ | (339 | ) | $ | 1,576 | |||||||
Nine Months Ended September 30, 2013 | $ | 2,171 | $ | 4,966 | $ | (3,092 | ) | $ | 4,045 | |||||||
Nine Months Ended September 30, 2012 | $ | 1,088 | $ | 1,649 | $ | (1,161 | ) | $ | 1,576 | |||||||
While payment terms are generally 30 days, we have also provided extended payment terms in certain cases. In addition, we operate globally and the payment terms for some of our international customers may be greater than 90 days. Accounts receivable are carried at original invoice amount and shown net of allowance for doubtful accounts and contractual allowances. The estimate made for doubtful accounts is based on a review of all outstanding amounts on a quarterly basis. We determine the allowance for doubtful accounts by assigning a consistent reserve percentage to each accounts receivable aging category and contractual allowances by regularly evaluating individual customer payment history. Accounts receivable are written off when deemed uncollectible and all collection efforts have been exhausted. During the nine months ended September 30, 2013, in accordance with our stated policy, we wrote-off approximately $3.1 million of accounts receivable, related to services rendered in prior year periods, determined to be uncollectible. | ||||||||||||||||
Inventories. | ||||||||||||||||
Inventories are stated at the lower of cost or market net of allowance for obsolete inventory. Cost is computed using standard costs for finished goods and average or latest actual cost for raw materials and work in process, which approximates the first-in, first-out (FIFO) method. | ||||||||||||||||
The following is a summary of activity for the allowance for obsolete inventory during the three and nine months ended September 30, 2013 and 2012: | ||||||||||||||||
Dollars in Thousands | ||||||||||||||||
Beginning | Provision | Write Offs | Ending | |||||||||||||
Balance | Balance | |||||||||||||||
Three Months Ended September 30, 2013 | $ | 593 | $ | 19 | $ | (3 | ) | $ | 609 | |||||||
Three Months Ended September 30, 2012 | $ | 559 | $ | 35 | $ | (13 | ) | $ | 581 | |||||||
Nine Months Ended September 30, 2013 | $ | 616 | $ | 19 | $ | (26 | ) | $ | 609 | |||||||
Nine Months Ended September 30, 2012 | $ | 511 | $ | 88 | $ | (18 | ) | $ | 581 | |||||||
We determine the allowance for obsolescence by evaluating inventory quarterly for items deemed to be slow moving or obsolete. | ||||||||||||||||
Property and Equipment. | ||||||||||||||||
Property and equipment are carried at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets as follows: | ||||||||||||||||
Leasehold improvements | 1 to 10 years | |||||||||||||||
Furniture and fixtures | 3 to 7 years | |||||||||||||||
Production equipment | 3 to 7 years | |||||||||||||||
Computer equipment | 3 to 7 years | |||||||||||||||
Research and development equipment | 2 to 7 years | |||||||||||||||
Depreciation expense related to property and equipment was $0.2 million during each of the three months ended September 30, 2013 and 2012. Included in depreciation for each of the three months ended September 30, 2013 and 2012 was $0.1 million related to equipment acquired under capital leases. Depreciation expense related to property and equipment was $0.5 million during each of the nine months ended September 30, 2013 and 2012. Included in depreciation for the nine months ended September 30, 2013 and 2012 was $0.2 million related to equipment acquired under capital leases. | ||||||||||||||||
Goodwill. | ||||||||||||||||
Goodwill is the excess of the purchase price over fair value of assets acquired and is not amortized. Goodwill is tested for impairment annually. We perform this impairment analysis during the fourth quarter of each year or when a significant event occurs that may impact goodwill. Impairment occurs when the carrying value is determined to be not recoverable, thereby causing the carrying value of the goodwill to exceed its fair value. If impaired, the asset’s carrying value is reduced to its fair value. No events have transpired in the nine months ended September 30, 2013 that would require an impairment analysis prior to our scheduled review. | ||||||||||||||||
Stock Based Compensation. | ||||||||||||||||
All stock options awarded to date have exercise prices equal to the market price of our common stock on the date of grant and have ten-year contractual terms. Unvested options as of September 30, 2013 had vesting periods of one or three years from the date of grant. None of the stock options outstanding at September 30, 2013 are subject to performance or market-based vesting conditions. | ||||||||||||||||
We measure and recognize compensation expense for all stock-based awards made to employees and directors, including stock options. Compensation expense is based on the calculated fair value of the awards as measured at the grant date and is expensed ratably over the service period of the awards (generally the vesting period). | ||||||||||||||||
During the nine months ended September 30, 2013, we recorded compensation expense of $0.2 million within selling, general and administrative expense. As of September 30, 2013, there was $1.6 million of unrecognized compensation expense related to unvested stock options, which is expected to be recognized over a weighted-average period of nearly three years. | ||||||||||||||||
We granted 4,020,500 stock options during the quarter ended September 30, 2013. The fair value of the options granted was estimated on the grant date using the Black-Scholes option pricing model with the following assumptions: risk-free interest rates of 1.39% based on the U.S. Treasury yield in effect at the time of grant; dividend yields of zero percent; expected lives of 4.51 years, based on expected exercise activity behavior; and volatility of 105% based on the historical volatility of our common stock over a time that is consistent with the expected life of the option. Forfeitures of 11.06% were also assumed. | ||||||||||||||||
Included in the stock options granted during the quarter ended September 30, 2013, were stock appreciation rights of 1,000,000 and 660,000 shares of common stock for the Chief Executive Officer and Chief Financial Officer, respectively. These rights will vest over three years, with an exercise price equal to the fair value of one share of Transgenomic's common stock on the date of grant, which was September 30, 2013. | ||||||||||||||||
During the nine months ended September 30, 2012, we recorded compensation expense of $0.5 million within selling, general and administrative expense. As of September 30, 2012, there was $0.6 million of unrecognized compensation expense related to unvested stock options, which is expected to be recognized over a weighted-average period of nearly three years. | ||||||||||||||||
We granted 477,500 stock options during the quarter ended September 30, 2012. The fair value of the options granted was estimated on the grant date using the Black-Scholes option pricing model with the following assumptions: risk-free interest rates of 0.7% based on the U.S. Treasury yield in effect at the time of grant; dividend yields of zero percent; expected lives of 5.00 years, based on expected exercise activity behavior; and volatility of 114% based on the historical volatility of our common stock over a time that is consistent with the expected life of the option. Forfeitures of 3.88% were also assumed. | ||||||||||||||||
Net Sales Recognition. | ||||||||||||||||
Revenue is realized and earned when all of the following criteria are met: | ||||||||||||||||
• | Persuasive evidence of an arrangement exists, | |||||||||||||||
• | Delivery has occurred or services have been rendered, | |||||||||||||||
• | The seller’s price to the buyer is fixed or determinable, and | |||||||||||||||
• | Collectability is reasonably assured. | |||||||||||||||
Net sales from our Laboratory Services segment are recognized on samples collected from patients of health care providers and individuals who take part in clinical trials. Revenue is recognized from patients of health care providers on an individual test basis and occurs when the test report is completed, reviewed and sent to the client. Sales are recorded at our list price less a provision for insurance and Medicare and Medicaid contractual adjustments. There are no deferred net sales associated with these tests. Adjustments to the allowances, based on actual receipts from third party payors, are recorded upon settlement. For clinical trials, we perform services on a project by project basis and recognize revenue when services are delivered. These projects typically do not extend beyond one year. At each of September 30, 2013 and December 31, 2012, deferred revenue associated with clinical trials for which we received payment in advance of performing services was $0.2 million and was included in the balance sheet in deferred revenue. | ||||||||||||||||
Net sales of products in our Diagnostic Tools segment are recognized in accordance with the terms of the sales arrangement. Such recognition is based on receipt of an unconditional customer order and transfer of title and risk of ownership to the customer, typically upon shipment of the product under a purchase order. Our sales terms do not provide for the right of return unless the product is damaged or defective. Net sales from certain services associated with the analytical instruments, to be performed subsequent to shipment of the products, is deferred and recognized when the services are provided. Such services, mainly limited to installation and training services that are not essential to the functionality of the instruments, typically are performed in a timely manner subsequent to shipment of the instrument. We also enter into various service contracts that cover installed instruments. These contracts, for which payment is received at the time of execution, cover specific time periods and net sales associated with these contracts are deferred and recognized ratably over the service period. At September 30, 2013 and December 31, 2012, deferred net revenue associated with our service contracts was $0.9 million and $1.0 million, respectively, and was included in the balance sheet in deferred revenue. | ||||||||||||||||
Taxes collected from customers and remitted to government agencies for specific sales transactions are recorded net any sales tax collected with no effect on the income statement. | ||||||||||||||||
Common Stock Warrants. | ||||||||||||||||
Certain of our issued and outstanding warrants to purchase common stock do not qualify to be treated as equity and, accordingly, are recorded as a liability ("Common Stock Warrant Liability"). The Common Stock Warrant Liability was initially recorded at fair value using a Monte Carlo simulation model. We are required to present these instruments at fair value at each reporting date and any changes in fair values are recorded as an adjustment to earnings. The Common Stock Warrant Liability is considered a Level Three financial instrument for purposes of fair value measurement. See Note 9 - “Fair Value” to the notes to our accompanying unaudited condensed consolidated financial statements for additional information. | ||||||||||||||||
Translation of Foreign Currency. | ||||||||||||||||
Our foreign subsidiary uses the local currency of the country in which it is located, British Pound Sterling, as its functional currency. Its assets and liabilities are translated into U.S. Dollars at the exchange rates in effect at the balance sheet date. A cumulative translation loss of $0.1 million was reported as other comprehensive income on the accompanying unaudited condensed consolidated statement of comprehensive loss for the nine months ended September 30, 2013. A cumulative translation gain of $0.1 million was reported as accumulated other comprehensive income for the nine months ended September 30, 2012. Revenues and expenses are translated at the average rates during the period. For transactions that are not denominated in the functional currency, we recognized less than $0.1 million as foreign currency transaction expense in the determination of net loss for the nine months ended September 30, 2013 and $0.1 million as foreign currency transaction loss in the determination of net loss for the nine months ended September 30, 2012. | ||||||||||||||||
Loss Per Share. | ||||||||||||||||
Basic loss per share is calculated based on the weighted-average number of common shares outstanding during each of September 30, 2013 and 2012. Diluted loss per share includes shares issuable upon exercise of outstanding stock options, warrants or conversion rights that have exercise or conversion prices below the market value of our common stock. Options, warrants and conversion rights pertaining to 44,730,497 and 30,836,894 shares of our common stock have been excluded from the computation of diluted loss per share at September 30, 2013 and 2012, respectively. The options, warrants and conversion rights that were exercisable during the nine months ended September 30, 2013 and 2012 were not included because the effect would be anti-dilutive due to the net loss. | ||||||||||||||||
Recent accounting pronouncements. | ||||||||||||||||
In February 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income (“ASU 2013-02”), which requires the presentation of significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income but only if the amount being reclassified is required under generally accepted accounting principles in the United States (“GAAP”) to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under GAAP to be reclassified in their entirety to net income, cross-reference to other disclosures that provide additional detail about these amounts is required. ASU 2013-02 is effective for fiscal years beginning after December 15, 2012. The adoption of this new guidance had no impact on our consolidated financial position, results of operations or cash flows. | ||||||||||||||||
In February 2013 FASB issued ASU No. 2013-04, Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation Is Fixed at the Reporting Date (“ASU 2013-04”). ASU 2013-04 requires reporting and disclosure of obligations resulting from joint and several liability arrangements within the scope of Subtopic 405-40 for which the total amount of the obligation is fixed at the reporting date. For public companies, ASU 2013-04 is effective for fiscal years and interim periods within those years beginning after December 15, 2013. The guidance in ASU 2013-04 is to be applied retrospectively for those obligations resulting from joint and several liability arrangements within the scope of Subtopic 405-40 that exist at the beginning of an entity’s fiscal year of adoption. Earlier application is permitted. When adopted, ASU 2013-04 is not expected to materially impact our accompanying unaudited condensed consolidated financial statements. | ||||||||||||||||
In March 2013, the FASB released ASU No. 2013-05, Foreign Currency Matters (Topic 830): Parent's Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity (a consensus of the FASB Emerging Issues Task Force)(“ASU 2013-05”). ASU 2013-05 provides that, when a reporting entity (parent) ceases to have a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business within a foreign entity, the parent is required to release any related cumulative translation adjustment into net income. The provisions of ASU 2013-05 are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. When adopted, ASU 2013-05 is not expected to materially impact our accompanying unaudited condensed consolidated financial statements. | ||||||||||||||||
In April 2013, FASB issued ASU No. 2013-07, Liquidation Basis of Accounting (“ASU 2013-07”). ASU 2013-07 requires an entity to prepare its financial statements using the liquidation basis of accounting when liquidation is imminent. The amendments are effective for entities that determine liquidation is imminent during annual reporting periods beginning after December 15, 2013, and interim reporting periods therein. Entities are to apply the requirements prospectively from the day that liquidation becomes imminent. Early application is permitted. Entities that are using the liquidation basis of accounting as of the effective date in accordance with other Topics (for example, terminating employee benefit plans) are not required to apply the amendments. Instead, those entities are to continue to apply the guidance in those other Topics until they have completed liquidation. When adopted, ASU 2013-07 is not expected to materially impact our accompanying unaudited condensed consolidated financial statements. |
INVENTORIES
INVENTORIES | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Inventory Disclosure [Abstract] | ' | |||||||
Inventory Disclosure | ' | |||||||
INVENTORIES | ||||||||
Inventories (net of allowance for obsolescence) consisted of the following: | ||||||||
Dollars in Thousands | ||||||||
September 30, | December 31, | |||||||
2013 | 2012 | |||||||
Finished goods | $ | 3,183 | $ | 4,057 | ||||
Raw materials and work in process | 1,638 | 1,547 | ||||||
Demonstration inventory | 242 | 104 | ||||||
$ | 5,063 | $ | 5,708 | |||||
Less allowance for obsolescence | (609 | ) | (616 | ) | ||||
Total | $ | 4,454 | $ | 5,092 | ||||
INTANGIBLES_AND_OTHER_ASSETS
INTANGIBLES AND OTHER ASSETS | 9 Months Ended | |||||||||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | |||||||||||||||||||||||
Intangibles And Other Assets | ' | |||||||||||||||||||||||
INTANGIBLES AND OTHER ASSETS | ||||||||||||||||||||||||
Long-lived intangible assets and other assets consisted of the following: | ||||||||||||||||||||||||
Dollars in Thousands | ||||||||||||||||||||||||
September 30, 2013 | December 31, 2012 | |||||||||||||||||||||||
Cost | Accumulated | Net Book | Cost | Accumulated | Net Book | |||||||||||||||||||
Amortization | Value | Amortization | Value | |||||||||||||||||||||
Intangibles—technology | $ | 9,009 | $ | 2,858 | $ | 6,151 | $ | 9,009 | $ | 1,910 | $ | 7,099 | ||||||||||||
Intangibles—assay royalties | 1,434 | 563 | 871 | 1,434 | 410 | 1,024 | ||||||||||||||||||
Intangibles—third party payor relationships | 367 | 67 | 300 | 367 | 49 | 318 | ||||||||||||||||||
Intangibles—tradenames and trademarks | 824 | 204 | 620 | 824 | 115 | 709 | ||||||||||||||||||
Intangibles—customer relationships | 652 | 43 | 609 | 652 | 11 | 641 | ||||||||||||||||||
Intangibles—covenants not to compete | 184 | 61 | 123 | 184 | 15 | 169 | ||||||||||||||||||
Patents | 1,071 | 321 | 750 | 929 | 280 | 649 | ||||||||||||||||||
Intellectual property | 170 | 31 | 139 | 170 | 15 | 155 | ||||||||||||||||||
$ | 13,711 | $ | 4,148 | $ | 9,563 | $ | 13,569 | $ | 2,805 | $ | 10,764 | |||||||||||||
Estimated Useful Life | ||||||||||||||||||||||||
Technology | 7-8 years | |||||||||||||||||||||||
Assay royalties | 7 years | |||||||||||||||||||||||
Third party payor relationships | 15 years | |||||||||||||||||||||||
Tradenames and trademarks | 7 years | |||||||||||||||||||||||
Customer relationships | 15 years | |||||||||||||||||||||||
Covenants not to compete | 3 years | |||||||||||||||||||||||
Patents | Life of the patent | |||||||||||||||||||||||
Intellectual property | 7 years | |||||||||||||||||||||||
Other assets include U.S. security deposits and deferred tax assets, net of applicable valuation allowances. | ||||||||||||||||||||||||
Amortization expense for intangible assets was $0.5 million and $0.3 million during the three months ended September 30, 2013 and 2012, respectively. Amortization expense for intangible assets was $1.4 million and $0.9 million during the nine months ended September 30, 2013 and 2012, respectively. Amortization expense for intangible assets is expected to be $1.7 million in each of the years 2013 through 2017. |
DEBT
DEBT | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Debt Disclosure [Abstract] | ' | ||||||||
Debt | ' | ||||||||
DEBT | |||||||||
Dollars in Thousands | |||||||||
September 30, 2013 | December 31, 2012 | ||||||||
Revolving Line of Credit(1) | $ | 2,560 | $ | — | |||||
Term Loan(2) | 4,000 | — | |||||||
PGxHealth note payable (the “First Note”) (3) | — | 6,171 | |||||||
Total debt, including short term debt | 6,560 | 6,171 | |||||||
Current maturities of long term debt | (1,091 | ) | (6,171 | ) | |||||
Long-term debt, net of current maturities | $ | 5,469 | $ | — | |||||
On March 13, 2013 (the “Effective Date”), we entered into a Loan and Security Agreement with affiliates of Third Security, LLC (the “Lenders”) for (a) a revolving line of credit (the “Revolving Line”) with borrowing availability of up to $4.0 million, subject to reduction based on our eligible accounts receivable, and (b) a term loan (the “Term Loan”) of $4.0 million (the “Loan Agreement”). Proceeds were used to pay off the First Note and for general corporate and working capital purposes. | |||||||||
On August 2, 2013, we entered into an amendment to the Loan and Security Agreement, the (“Amendment”). The Amendment, which became effective as of June 30, 2013, reduces our future minimum revenue covenants under the Loan Agreement and modifies the interest rates applicable to the amounts advanced under the Revolving Line. As of September 30, 2013, we were in compliance with the amended financial covenants. | |||||||||
On November 14, 2013, we entered into a second amendment to the Loan and Security Agreement, the (“Second Amendment”). The Second Amendment, which is effective as of October 31, 2013, reduces our future minimum revenue covenant under the Loan Agreement. | |||||||||
-1 | Revolving Line of Credit. Amounts advanced under the Revolving Line bear interest at an annual rate equal to the greater of (a) 4.25% or (b) the Wall Street Journal prime rate plus 1%. Interest is payable on a monthly basis, with the balance payable at the maturity of the Revolving Line. The current interest rate is 4.25%. Under the Amendment, amounts advanced under the Revolving Line bear interest at an annual rate equal to the greater of (x) 6.25% or (y) the Wall Street Journal prime rate plus 3% . Under the Loan Agreement, we paid the Lenders an upfront fee of $20,000, and will pay the Lenders an additional commitment fee of $20,000 on each one year anniversary of the Effective Date during the term of the Revolving Line. In addition, a fee of 0.5% per annum is payable quarterly on the unused portion of the Revolving Line. The Revolving Line matures on September 1, 2016. | ||||||||
-2 | Term Loan. We received $4.0 million under the Term Loan on the Effective Date. We are required to make interest-only payments under the Term Loan through December 31, 2013 and principal and interest payments on a monthly basis thereafter, beginning on January 1, 2014, over 33 months using a straight-line amortization rate. Interest under the Term Loan will accrue at the annual rate of one month LIBOR plus 6.1%, subject to a LIBOR floor of 3%. The current interest rate is 9.1%. | ||||||||
We paid the Lenders an upfront fee of $40,000 for the Term Loan, and will pay the Lenders an additional final payment of $120,000 at maturity or prepayment of the Term Loan. In addition, if we repay the Term Loan prior to maturity, we will pay the Lenders a prepayment penalty of 5% of the total outstanding balance under the Term Loan if the prepayment occurs within one year after the Effective Date, 2.5% of the total outstanding balance under the Term Loan if the prepayment occurs between one and two years after the Effective Date, and 1% of the total outstanding balance under the Term Loan if the prepayment occurs thereafter. | |||||||||
Additional Terms | |||||||||
The Loan Agreement contains affirmative and negative covenants. Under the Term Loan, we are required to maintain a minimum liquidity ratio and achieve a minimum amount of revenue, and we also agreed not to (i) pledge or otherwise encumber our assets other than to the Lenders, (ii) enter into additional borrowings or guarantees, (iii) repurchase our capital stock, or (iv) enter into certain mergers or acquisitions without the Lenders' consent. Additionally, the Loan Agreement contains a subjective acceleration clause at the discretion of the Lenders. | |||||||||
To secure the repayment of any amounts borrowed under the Revolving Line and the Term Loan, we granted the Lenders a security interest in all of our assets. The occurrence of an event of default under the Loan Agreement could result in the acceleration of our obligations under the Loan Agreement and would increase the applicable interest rate under the Revolving Line or Term Loan (or both) by 5%, and permit the Lenders to exercise remedies with respect to the collateral under the Loan Agreement. | |||||||||
-3 | First Note. The First Note was a three year senior secured promissory note payable to PGxHealth, LLC which was entered into on December 29, 2010 in conjunction with our acquisition of the FAMILION family of genetic tests. Interest was payable at 10% per year with quarterly interest payments through March 29, 2012. Thereafter, quarterly installments included both principal and interest through December 30, 2013. The First Note was paid in full on March 13, 2013. |
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2013 | |
Commitments and Contingencies Disclosure [Abstract] | ' |
Commitments and Contingencies Disclosure | ' |
COMMITMENTS AND CONTINGENCIES | |
From time to time we are subject to claims of various amounts, which arise out of the normal course of business. In the opinion of management, the disposition of pending claims will not have a material adverse effect on our financial position, results of operations or cash flows. | |
We lease certain equipment, vehicles and operating facilities under non-cancellable operating leases that expire on various dates through 2022. The future minimum lease payments required under these leases are approximately $0.4 million for the remainder of 2013, $1.1 million in 2014, $1.0 million in 2015, $0.9 million in 2016, $0.8 million in 2017 and $1.3 million thereafter. Rent expense for each of the nine months ended September 30, 2013 and 2012 was $0.8 million and $0.7 million, respectively. At September 30, 2013, firm commitments to vendors totaled $1.4 million. |
INCOME_TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2013 | |
Income Tax Disclosure [Abstract] | ' |
Income Tax Disclosure | ' |
INCOME TAXES | |
We file income tax returns in the U.S. federal jurisdiction, various U.S. state jurisdictions and various foreign jurisdictions. We have statutes of limitation open for federal income tax returns related to tax years 2010 through 2012. We have state income tax returns subject to examination primarily for tax years 2010 through 2012. Open tax years related to foreign jurisdictions, primarily the United Kingdom, remain subject to examination for the tax years 2010 through 2012. | |
Income tax expense for the nine months ended September 30, 2013 was $0.1 million. Income tax expense for the nine months ended September 30, 2012 was zero. Our effective tax rate for the nine months ended September 30, 2013 was 0.1%, which is primarily the result of valuation allowances against the net operating losses for the U.S., which results in us not recording net deferred tax assets in the U.S. | |
During each of the three and nine months ended September 30, 2013 and 2012, there were no material changes to the liability for uncertain tax positions. |
STOCKHOLDERS_EQUITY
STOCKHOLDERS' EQUITY | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Stockholders' Equity Attributable to Parent [Abstract] | ' | ||||||||
Stockholders' Equity Note Disclosure | ' | ||||||||
STOCKHOLDERS’ EQUITY | |||||||||
Common Stock. | |||||||||
Our Board of Directors is authorized to issue up to 150,000,000 shares of common stock, from time to time, as provided in a resolution or resolutions adopted by our stockholders. | |||||||||
On February 7, 2012, we entered into definitive agreements with institutional and other accredited investors and raised approximately $22.0 million in a private placement financing (the “Private Placement”), which included an aggregate of $3.0 million in convertible notes issued in December 2011 to entities affiliated with Third Security, LLC, a related party, that automatically converted into shares of our common stock and warrants to purchase such common stock on the same terms as all investors in the Private Placement. Pursuant to the purchase agreement, we issued an aggregate of 19,000,000 shares of our common stock at a price per share of $1.00, as well as five-year warrants to purchase up to an aggregate of 11,435,158 shares of common stock with an exercise price of $1.08 per share. In connection with the conversion of the convertible notes issued by us to the entities associated with Third Security, LLC, the entities received an aggregate of 3,000,000 shares of common stock and 1,736,110 warrants on the same terms as all investors in the Private Placement. The costs incurred to complete the Private Placement were recorded as a reduction in equity in the amount of $1.5 million. Net proceeds from this offering are being used for general corporate and working capital purposes, primarily to accelerate development of several of our key initiatives. | |||||||||
On January 24, 2013, we entered into a Securities Purchase Agreement with certain institutional and other accredited investors pursuant to which we: (i) sold to the investors an aggregate of 16,600,000 shares of our common stock at a price per share of $0.50 for aggregate gross proceeds of approximately $8.3 million; and (ii) issued to the investors warrants to purchase up to an aggregate of 8,300,000 shares of our common stock with an exercise price of $0.75 per share (the “Offering”). The warrants may be exercised, in whole or in part, at any time from January 30, 2013 until January 30, 2018 and contain both cash and “cashless exercise” features. Affiliates of Third Security, LLC, a related party, purchased an aggregate of 6,000,000 shares of common stock and warrants to purchase an aggregate of 3,000,000 shares of common stock in the Offering on the same terms as the other investors. We are using the net proceeds from the Offering for general corporate and working capital purposes, primarily to accelerate development of several of our key initiatives. | |||||||||
In connection with the Offering, we entered into a registration rights agreement with the investors (the “Registration Rights Agreement”). The Registration Rights Agreement required that we file with the Securities and Exchange Commission a registration statement to register for resale the shares of common stock sold and the shares of common stock issuable upon exercise of the warrants (the “Warrant Shares”) by March 16, 2013. The registration statement was filed with the Securities and Exchange Commission on March 15, 2013 and was declared effective by the Securities and Exchange Commission on March 29, 2013. | |||||||||
Common Stock Warrants. | |||||||||
During the nine months ended September 30, 2013 and 2012, we issued warrants to purchase 10,091,268 and 13,171,268, shares of common stock, respectively. None of the issued warrants were exercised during such periods. Included in the warrants issued in 2013 were 8,300,000 warrants issued in connection with the Offering and 1,791,268 warrants issued due to repricing requirements contained in the warrants issued in the Private Placement. Warrants to purchase an aggregate of 26,643,676 shares of common stock were outstanding at September 30, 2013. | |||||||||
Warrant Holder | Issue Year | Expiration | Underlying | Exercise | |||||
Shares | Price | ||||||||
Affiliates of Third Security, LLC(1) | 2010 | Dec-15 | 5,172,408 | $0.58 | |||||
Various Institutional Holders(2) | 2012 | Feb-17 | 11,435,158 | $1.08 | |||||
Affiliates of Third Security, LLC(2) | 2012 | Feb-17 | 1,736,110 | $1.08 | |||||
Various Institutional Holders(3) | 2013 | Jan-18 | 5,300,000 | $0.75 | |||||
Affiliates of Third Security, LLC(3) | 2013 | Jan-18 | 3,000,000 | $0.75 | |||||
26,643,676 | |||||||||
-1 | This warrant was issued in connection with the issuance of warrants to purchase shares of our Series A Preferred Stock to affiliates of Third Security, LLC in December 2010. The number of underlying shares shown reflects the number of shares of common stock issuable upon conversion of the shares of Series A Preferred Stock for which this warrant is currently exercisable. | ||||||||
-2 | These warrants were issued in connection with the Private Placement, which was completed in February 2012. Warrants were repriced and additional warrants were issued in connection with the warrants issued in the Offering. | ||||||||
-3 | These warrants were issued in connection with the Offering, which was completed in January 2013. |
FAIR_VALUE
FAIR VALUE | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Fair Value [Abstract] | ' | ||||||||
Financial Instruments Disclosure | ' | ||||||||
FAIR VALUE | |||||||||
FASB guidance on fair value measurements, which defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements for our financial assets and liabilities, as well as for other assets and liabilities that are carried at fair value on a recurring basis in our consolidated financial statements. | |||||||||
FASB guidance establishes a three-level fair value hierarchy based upon the assumptions (inputs) used to price assets or liabilities. The three levels of inputs used to measure fair value are as follows: | |||||||||
Level 1—Unadjusted quoted prices in active markets for identical assets or liabilities, | |||||||||
Level 2—Observable inputs other than those included in Level 1, such as quoted prices for similar assets and liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets, and | |||||||||
Level 3—Unobservable inputs reflecting our own assumptions and best estimate of what inputs market participants would use in pricing the asset or liability. | |||||||||
Debt | |||||||||
Our long term debt is considered a Level 2 liability for which book value approximates fair market value. | |||||||||
Common Stock Warrant Liability | |||||||||
Certain of our issued and outstanding warrants to purchase common stock do not qualify to be treated as equity, and accordingly are recorded as a liability. The Common Stock Warrant Liability represents the fair value of the 13.2 million warrants issued in the Private Placement. We are required to record these instruments at fair value at each reporting date and changes are recorded as a non-cash adjustment to earnings. The gains or losses included in earnings are reported in other income (expense) in our Statement of Operations. Management does not believe that this liability will be settled by a use of cash. | |||||||||
The Common Stock Warrant Liability is considered a Level 3 financial instrument and is valued using a Monte Carlo simulation. This method is well suited to value options with non-standard features, such as anti-dilution protection. A Monte Carlo simulation model uses repeated random sampling to simulate significant uncertainty in inputs. Assumptions and inputs used in the valuation of the common stock warrants are broken down into four sections: Static Business Inputs; Static Technical Inputs; Simulated Business Inputs; and Simulated Technical Inputs. | |||||||||
Static Business Inputs include: our equity value, which was estimated using our stock price of $0.38 as of September 30, 2013; the amount of the down-round financing; the timing of the down-round financing; the expected exercise period of 3.36 years from the valuation date; and the fact that no other potential fundamental transactions are expected during the term of the common stock warrants. | |||||||||
Static Technical Inputs include: volatility of 50% and the risk-free interest rate of 0.82% based on the 3.5-year U.S. Treasury yield interpolated from the three-year and five-year U.S. Treasury bonds. | |||||||||
Simulated Business Inputs include: the probability of down-round financing, which was estimated to be 25% for simulated equity values below the down-round financing cut-off point. | |||||||||
Simulated Technical Inputs include: our equity value, which in periods 1-10 follows a geometric Brownian motion and is simulated over 10 independent six-month periods; and a down-round financing event which was randomly simulated in an iteration based on the 25% discrete probability of a down-round financing for those iterations where our simulated equity value at the expected timing of down-round financing was below the down-round financing cut-off point. | |||||||||
During 2013 we noted an error in the calculation of the warrant liability as of December 31, 2012 causing the liability to be understated by $0.3 million. This has been corrected in 2013. | |||||||||
During the three months ended September 30, 2013, the changes in the fair value of the liability measured using significant unobservable inputs (Level 3) was comprised of the following: | |||||||||
Dollars in Thousands | |||||||||
For the Three Months Ended | |||||||||
September 30, 2013 | September 30, 2012 | ||||||||
Beginning balance at July 1 | $ | 300 | $ | 2,100 | |||||
Total gains or losses: | |||||||||
Recognized in earnings | — | — | |||||||
Balance at September 30 | $ | 300 | $ | 2,100 | |||||
During the nine months ended September 30, 2013, the changes in the fair value of the liability measured using significant unobservable inputs (Level 3) was comprised of the following: | |||||||||
Dollars in Thousands | |||||||||
For the Nine Months Ended | |||||||||
September 30, 2013 | September 30, 2012 | ||||||||
Beginning balance at January 1 | $ | 900 | $ | 3,100 | |||||
Additions | — | — | |||||||
Total gains or losses: | |||||||||
Recognized in earnings | (600 | ) | (1,000 | ) | |||||
Balance at September 30 | $ | 300 | $ | 2,100 | |||||
The change in unrealized gains or losses of Level 3 liabilities was included in earnings and was reported in other income (expense) in our Statement of Operations. |
STOCK_OPTIONS
STOCK OPTIONS | 9 Months Ended | ||||||
Sep. 30, 2013 | |||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ||||||
Stock Options | ' | ||||||
STOCK OPTIONS | |||||||
The following table summarizes stock option activity during the nine months ended September 30, 2013: | |||||||
Number of | Weighted Average | ||||||
Options | Exercise Price | ||||||
Balance at January 1, 2013 | 4,353,167 | $ | 1.05 | ||||
Granted | 5,933,000 | 0.37 | |||||
Exercised | — | — | |||||
Forfeited | (962,500 | ) | (1.01 | ) | |||
Expired | (188,333 | ) | (1.66 | ) | |||
Balance at September 30, 2013 | 9,135,334 | $ | 0.62 | ||||
Exercisable at September 30, 2013 | 3,151,511 | $ | 1.01 | ||||
During the nine months ended September 30, 2013, we granted options exercisable to purchase 5,933,000 shares of common stock at a weighted average exercise price of $0.37 per share under our 2006 Equity Incentive Plan. Options to purchase an aggregate of 626,500 shares of common stock were granted during the nine months ended September 30, 2012. |
OPERATING_SEGMENT_AND_GEOGRAPH
OPERATING SEGMENT AND GEOGRAPHIC INFORMATION | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Segment Reporting [Abstract] | ' | |||||||||||||||
Operating Segment And Geographic Information | ' | |||||||||||||||
OPERATING SEGMENT AND GEOGRAPHIC INFORMATION | ||||||||||||||||
Our chief operating decision-maker is our Chief Executive Officer, who regularly evaluates our performance based on net sales and net loss before taxes. The preparation of this segment analysis requires management to make estimates and assumptions around expenses below the gross profit level. While we believe the segment information to be directionally correct, actual results could differ from the estimates and assumptions used in preparing this information. | ||||||||||||||||
The accounting policies of the segments are the same as the policies discussed in Note 2 – “Summary of Significant Accounting Policies” to the notes to our accompanying unaudited condensed consolidated financial statements. | ||||||||||||||||
In the first quarter of 2013, we consolidated our Clinical Laboratories and Pharmacogenomic Services business segments into a single segment and, going forward, the combined segment will be referred to as our Laboratory Services segment. We now have two reportable operating segments, Laboratory Services and Diagnostic Tools. Accordingly, segment results for the three and nine months ended September 30, 2012 have been reclassified to reflect these changes. | ||||||||||||||||
Segment information for the three months ended September 30, 2013 and 2012 is as follows: | ||||||||||||||||
Dollars in Thousands | ||||||||||||||||
30-Sep-13 | ||||||||||||||||
Laboratory Services | Diagnostic | Total | ||||||||||||||
Tools | ||||||||||||||||
Net Sales | $ | 4,112 | $ | 2,534 | $ | 6,646 | ||||||||||
Gross Profit | 1,776 | 1,075 | 2,851 | |||||||||||||
Net Loss before Taxes | (4,375 | ) | (1,185 | ) | (5,560 | ) | ||||||||||
Income Tax Benefit | — | (8 | ) | (8 | ) | |||||||||||
Net Loss | $ | (4,375 | ) | $ | (1,177 | ) | $ | (5,552 | ) | |||||||
Depreciation/Amortization | $ | 606 | $ | 65 | $ | 671 | ||||||||||
Interest Expense, net | $ | (96 | ) | $ | (59 | ) | $ | (155 | ) | |||||||
30-Sep-13 | ||||||||||||||||
Total Assets | $ | 23,648 | $ | 9,532 | $ | 33,180 | ||||||||||
Dollars in Thousands | ||||||||||||||||
30-Sep-12 | ||||||||||||||||
Laboratory Services | Diagnostic | Total | ||||||||||||||
Tools | ||||||||||||||||
Net Sales | $ | 4,718 | $ | 3,171 | $ | 7,889 | ||||||||||
Gross Profit | 2,347 | 1,453 | 3,800 | |||||||||||||
Net Income (Loss) before Taxes | (1,907 | ) | (733 | ) | (2,640 | ) | ||||||||||
Income Tax Benefit | — | 114 | 114 | |||||||||||||
Net Income (Loss) | $ | (1,907 | ) | $ | (847 | ) | $ | (2,754 | ) | |||||||
Depreciation/Amortization | $ | 442 | $ | 53 | $ | 495 | ||||||||||
Interest Expense, net | $ | (201 | ) | $ | (6 | ) | $ | (207 | ) | |||||||
30-Sep-12 | ||||||||||||||||
Total Assets | $ | 30,553 | $ | 12,334 | $ | 42,887 | ||||||||||
Segment information for the nine months ended September 30, 2013 and 2012 is as follows: | ||||||||||||||||
Dollars in Thousands | ||||||||||||||||
30-Sep-13 | ||||||||||||||||
Laboratory Services | Diagnostic | Total | ||||||||||||||
Tools | ||||||||||||||||
Net Sales | $ | 12,551 | $ | 8,775 | $ | 21,326 | ||||||||||
Gross Profit | 5,822 | 4,120 | 9,942 | |||||||||||||
Net Loss before Taxes | (9,641 | ) | (2,312 | ) | (11,953 | ) | ||||||||||
Income Tax Expense | — | 52 | 52 | |||||||||||||
Net Loss | $ | (9,641 | ) | $ | (2,364 | ) | $ | (12,005 | ) | |||||||
Depreciation/Amortization | $ | 1,815 | $ | 287 | $ | 2,102 | ||||||||||
Interest Expense, net | $ | (314 | ) | $ | (145 | ) | $ | (459 | ) | |||||||
Dollars in Thousands | ||||||||||||||||
30-Sep-12 | ||||||||||||||||
Laboratory Services | Diagnostic | Total | ||||||||||||||
Tools | ||||||||||||||||
Net Sales | $ | 14,527 | $ | 9,661 | $ | 24,188 | ||||||||||
Gross Profit | 7,111 | 4,355 | 11,466 | |||||||||||||
Net Income (Loss) before Taxes | (4,619 | ) | (1,307 | ) | (5,926 | ) | ||||||||||
Income Tax Benefit | — | 88 | 88 | |||||||||||||
Net Income (Loss) | $ | (4,619 | ) | $ | (1,395 | ) | $ | (6,014 | ) | |||||||
Depreciation/Amortization | $ | 1,357 | $ | 213 | $ | 1,570 | ||||||||||
Interest Expense, net | $ | (676 | ) | $ | (37 | ) | $ | (713 | ) | |||||||
Net sales for the three and nine months ended September 30, 2013 and 2012 by country were as follows: | ||||||||||||||||
Dollars in Thousands | Dollars in Thousands | |||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
United States | $ | 5,095 | $ | 5,442 | $ | 16,241 | $ | 17,013 | ||||||||
Italy | 398 | 571 | 1,225 | 2,277 | ||||||||||||
All Other Countries | 1,153 | 1,876 | 3,860 | 4,898 | ||||||||||||
Total | $ | 6,646 | $ | 7,889 | $ | 21,326 | $ | 24,188 | ||||||||
Other than the countries specifically identified above, no other country individually accounted for more than 5% of total net sales. | ||||||||||||||||
Approximately 99% of our long-lived assets are located within the United States. |
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2013 | |
Subsequent Events [Abstract] | ' |
Subsequent Events | ' |
SUBSEQUENT EVENTS | |
Events or transactions that occur after the balance sheet date, but before the financial statements are complete, are reviewed to determine if they should be recognized. | |
On November 14, 2013, we entered into a second amendment to the Loan and Security Agreement, the (“Second Amendment”). The Second Amendment, is effective as of October 31, 2013, reduces our future minimum revenue covenant under the Loan Agreement. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended | |
Sep. 30, 2013 | ||
Accounting Policies [Abstract] | ' | |
Basis of Presentation | ' | |
Basis of Presentation. | ||
The condensed consolidated balance sheet as of December 31, 2012 was derived from our audited balance sheet as of that date. The accompanying condensed consolidated financial statements as of and for the three and nine months ended September 30, 2013 and 2012 are unaudited and reflect all adjustments that are, in the opinion of management, necessary for a fair presentation of the financial position and operating results for the interim periods. These unaudited condensed consolidated financial statements and notes should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2012 contained in our Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 14, 2013. The results of operations for the interim periods presented are not necessarily indicative of the results for the entire year. | ||
Principles of Consolidation | ' | |
Principles of Consolidation. | ||
The consolidated financial statements include the accounts of Transgenomic, Inc. and its wholly owned subsidiary. All inter-company balances and transactions have been eliminated in consolidation. | ||
Risks and Uncertainties | ' | |
Risks and Uncertainties. | ||
Certain risks and uncertainties are inherent in our day-to-day operations and to the process of preparing our financial statements. The more significant of those risks are presented below and throughout the notes to the unaudited condensed consolidated financial statements. | ||
Use of Estimates | ' | |
Use of Estimates. | ||
The preparation of condensed consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of net sales and expenses during the reporting period. In addition, estimates and assumptions associated with the determination of the fair value of certain assets and related impairments require considerable judgment by management. Actual results could differ from the estimates and assumptions used in preparing these consolidated financial statements. | ||
Reclassifications | ' | |
Reclassifications. | ||
Certain prior year amounts have been reclassified in order to conform to the current year presentation regarding segment reporting. In the second quarter of 2013, we modified the presentation of our accrued preferred stock dividend payable from current liabilities to long term liabilities. As a result, we have revised the balance sheet presentation as of December 31, 2012. This revision from current liabilities to long term liabilities has no effect on total assets, liabilities or equity. | ||
Fair Value | ' | |
Fair Value. | ||
Unless otherwise specified, book value approximates fair market value. The common stock warrant liability is recorded at fair value. | ||
Cash and Cash Equivalents | ' | |
Cash and Cash Equivalents. | ||
Cash and cash equivalents include cash and investments with original maturities at the date of acquisition of three months or less. | ||
Concentration of Cash | ' | |
Concentrations of Cash. | ||
From time to time, we may maintain a cash position with financial institutions in amounts that exceed federally insured limits. We have not experienced any losses on such accounts as of September 30, 2013. | ||
Accounts Receivable | ' | |
While payment terms are generally 30 days, we have also provided extended payment terms in certain cases. In addition, we operate globally and the payment terms for some of our international customers may be greater than 90 days. Accounts receivable are carried at original invoice amount and shown net of allowance for doubtful accounts and contractual allowances. The estimate made for doubtful accounts is based on a review of all outstanding amounts on a quarterly basis. We determine the allowance for doubtful accounts by assigning a consistent reserve percentage to each accounts receivable aging category and contractual allowances by regularly evaluating individual customer payment history. Accounts receivable are written off when deemed uncollectible and all collection efforts have been exhausted. | ||
Inventories | ' | |
Inventories. | ||
Inventories are stated at the lower of cost or market net of allowance for obsolete inventory. Cost is computed using standard costs for finished goods and average or latest actual cost for raw materials and work in process, which approximates the first-in, first-out (FIFO) method. | ||
Inventory Obsolescence | ' | |
We determine the allowance for obsolescence by evaluating inventory quarterly for items deemed to be slow moving or obsolete. | ||
Property and Equipment | ' | |
Property and Equipment. | ||
Property and equipment are carried at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets | ||
Goodwill | ' | |
Goodwill. | ||
Goodwill is the excess of the purchase price over fair value of assets acquired and is not amortized. Goodwill is tested for impairment annually. We perform this impairment analysis during the fourth quarter of each year or when a significant event occurs that may impact goodwill. Impairment occurs when the carrying value is determined to be not recoverable, thereby causing the carrying value of the goodwill to exceed its fair value. If impaired, the asset’s carrying value is reduced to its fair value. No events have transpired in the nine months ended September 30, 2013 that would require an impairment analysis prior to our scheduled review. | ||
Stock Based Compensation | ' | |
Stock Based Compensation. | ||
All stock options awarded to date have exercise prices equal to the market price of our common stock on the date of grant and have ten-year contractual terms. Unvested options as of September 30, 2013 had vesting periods of one or three years from the date of grant. None of the stock options outstanding at September 30, 2013 are subject to performance or market-based vesting conditions. | ||
We measure and recognize compensation expense for all stock-based awards made to employees and directors, including stock options. Compensation expense is based on the calculated fair value of the awards as measured at the grant date and is expensed ratably over the service period of the awards (generally the vesting period). | ||
Net Sales Recognition | ' | |
Net Sales Recognition. | ||
Revenue is realized and earned when all of the following criteria are met: | ||
• | Persuasive evidence of an arrangement exists, | |
• | Delivery has occurred or services have been rendered, | |
• | The seller’s price to the buyer is fixed or determinable, and | |
• | Collectability is reasonably assured. | |
Net sales from our Laboratory Services segment are recognized on samples collected from patients of health care providers and individuals who take part in clinical trials. Revenue is recognized from patients of health care providers on an individual test basis and occurs when the test report is completed, reviewed and sent to the client. Sales are recorded at our list price less a provision for insurance and Medicare and Medicaid contractual adjustments. There are no deferred net sales associated with these tests. Adjustments to the allowances, based on actual receipts from third party payors, are recorded upon settlement. For clinical trials, we perform services on a project by project basis and recognize revenue when services are delivered. These projects typically do not extend beyond one year. At each of September 30, 2013 and December 31, 2012, deferred revenue associated with clinical trials for which we received payment in advance of performing services was $0.2 million and was included in the balance sheet in deferred revenue. | ||
Net sales of products in our Diagnostic Tools segment are recognized in accordance with the terms of the sales arrangement. Such recognition is based on receipt of an unconditional customer order and transfer of title and risk of ownership to the customer, typically upon shipment of the product under a purchase order. Our sales terms do not provide for the right of return unless the product is damaged or defective. Net sales from certain services associated with the analytical instruments, to be performed subsequent to shipment of the products, is deferred and recognized when the services are provided. Such services, mainly limited to installation and training services that are not essential to the functionality of the instruments, typically are performed in a timely manner subsequent to shipment of the instrument. We also enter into various service contracts that cover installed instruments. These contracts, for which payment is received at the time of execution, cover specific time periods and net sales associated with these contracts are deferred and recognized ratably over the service period. At September 30, 2013 and December 31, 2012, deferred net revenue associated with our service contracts was $0.9 million and $1.0 million, respectively, and was included in the balance sheet in deferred revenue. | ||
Taxes collected from customers and remitted to government agencies for specific sales transactions are recorded net any sales tax collected with no effect on the income statement. | ||
Common Stock Warrants | ' | |
Common Stock Warrants. | ||
Certain of our issued and outstanding warrants to purchase common stock do not qualify to be treated as equity and, accordingly, are recorded as a liability ("Common Stock Warrant Liability"). The Common Stock Warrant Liability was initially recorded at fair value using a Monte Carlo simulation model. We are required to present these instruments at fair value at each reporting date and any changes in fair values are recorded as an adjustment to earnings. The Common Stock Warrant Liability is considered a Level Three financial instrument for purposes of fair value measurement. | ||
Translation of Foreign Currency | ' | |
Translation of Foreign Currency. | ||
Our foreign subsidiary uses the local currency of the country in which it is located, British Pound Sterling, as its functional currency. Its assets and liabilities are translated into U.S. Dollars at the exchange rates in effect at the balance sheet date. | ||
Loss Per Share | ' | |
Loss Per Share. | ||
Basic loss per share is calculated based on the weighted-average number of common shares outstanding during each of September 30, 2013 and 2012. Diluted loss per share includes shares issuable upon exercise of outstanding stock options, warrants or conversion rights that have exercise or conversion prices below the market value of our common stock. | ||
Recently Accounting Pronouncements | ' | |
Recent accounting pronouncements. | ||
In February 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income (“ASU 2013-02”), which requires the presentation of significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income but only if the amount being reclassified is required under generally accepted accounting principles in the United States (“GAAP”) to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under GAAP to be reclassified in their entirety to net income, cross-reference to other disclosures that provide additional detail about these amounts is required. ASU 2013-02 is effective for fiscal years beginning after December 15, 2012. The adoption of this new guidance had no impact on our consolidated financial position, results of operations or cash flows. | ||
In February 2013 FASB issued ASU No. 2013-04, Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation Is Fixed at the Reporting Date (“ASU 2013-04”). ASU 2013-04 requires reporting and disclosure of obligations resulting from joint and several liability arrangements within the scope of Subtopic 405-40 for which the total amount of the obligation is fixed at the reporting date. For public companies, ASU 2013-04 is effective for fiscal years and interim periods within those years beginning after December 15, 2013. The guidance in ASU 2013-04 is to be applied retrospectively for those obligations resulting from joint and several liability arrangements within the scope of Subtopic 405-40 that exist at the beginning of an entity’s fiscal year of adoption. Earlier application is permitted. When adopted, ASU 2013-04 is not expected to materially impact our accompanying unaudited condensed consolidated financial statements. | ||
In March 2013, the FASB released ASU No. 2013-05, Foreign Currency Matters (Topic 830): Parent's Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity (a consensus of the FASB Emerging Issues Task Force)(“ASU 2013-05”). ASU 2013-05 provides that, when a reporting entity (parent) ceases to have a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business within a foreign entity, the parent is required to release any related cumulative translation adjustment into net income. The provisions of ASU 2013-05 are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. When adopted, ASU 2013-05 is not expected to materially impact our accompanying unaudited condensed consolidated financial statements. | ||
In April 2013, FASB issued ASU No. 2013-07, Liquidation Basis of Accounting (“ASU 2013-07”). ASU 2013-07 requires an entity to prepare its financial statements using the liquidation basis of accounting when liquidation is imminent. The amendments are effective for entities that determine liquidation is imminent during annual reporting periods beginning after December 15, 2013, and interim reporting periods therein. Entities are to apply the requirements prospectively from the day that liquidation becomes imminent. Early application is permitted. Entities that are using the liquidation basis of accounting as of the effective date in accordance with other Topics (for example, terminating employee benefit plans) are not required to apply the amendments. Instead, those entities are to continue to apply the guidance in those other Topics until they have completed liquidation. When adopted, ASU 2013-07 is not expected to materially impact our accompanying unaudited condensed consolidated financial statements. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Accounting Policies [Abstract] | ' | |||||||||||||||
Allowance for doubtful accounts rollforward | ' | |||||||||||||||
The following is a summary of activity for the allowance for doubtful accounts during the three and nine months ended September 30, 2013 and 2012: | ||||||||||||||||
Dollars in Thousands | ||||||||||||||||
Beginning | Provision | Write Offs | Ending | |||||||||||||
Balance | Balance | |||||||||||||||
Three Months Ended September 30, 2013 | $ | 2,362 | $ | 2,769 | $ | (1,086 | ) | $ | 4,045 | |||||||
Three Months Ended September 30, 2012 | $ | 1,236 | $ | 679 | $ | (339 | ) | $ | 1,576 | |||||||
Nine Months Ended September 30, 2013 | $ | 2,171 | $ | 4,966 | $ | (3,092 | ) | $ | 4,045 | |||||||
Nine Months Ended September 30, 2012 | $ | 1,088 | $ | 1,649 | $ | (1,161 | ) | $ | 1,576 | |||||||
Allowance for obsolete inventory rollforward | ' | |||||||||||||||
The following is a summary of activity for the allowance for obsolete inventory during the three and nine months ended September 30, 2013 and 2012: | ||||||||||||||||
Dollars in Thousands | ||||||||||||||||
Beginning | Provision | Write Offs | Ending | |||||||||||||
Balance | Balance | |||||||||||||||
Three Months Ended September 30, 2013 | $ | 593 | $ | 19 | $ | (3 | ) | $ | 609 | |||||||
Three Months Ended September 30, 2012 | $ | 559 | $ | 35 | $ | (13 | ) | $ | 581 | |||||||
Nine Months Ended September 30, 2013 | $ | 616 | $ | 19 | $ | (26 | ) | $ | 609 | |||||||
Nine Months Ended September 30, 2012 | $ | 511 | $ | 88 | $ | (18 | ) | $ | 581 | |||||||
Schedule of property and equipment, useful lives | ' | |||||||||||||||
Depreciation is computed using the straight-line method over the estimated useful lives of the related assets as follows: | ||||||||||||||||
Leasehold improvements | 1 to 10 years | |||||||||||||||
Furniture and fixtures | 3 to 7 years | |||||||||||||||
Production equipment | 3 to 7 years | |||||||||||||||
Computer equipment | 3 to 7 years | |||||||||||||||
Research and development equipment | 2 to 7 years |
INVENTORIES_Tables
INVENTORIES (Tables) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Inventory Disclosure [Abstract] | ' | |||||||
Inventories | ' | |||||||
Inventories (net of allowance for obsolescence) consisted of the following: | ||||||||
Dollars in Thousands | ||||||||
September 30, | December 31, | |||||||
2013 | 2012 | |||||||
Finished goods | $ | 3,183 | $ | 4,057 | ||||
Raw materials and work in process | 1,638 | 1,547 | ||||||
Demonstration inventory | 242 | 104 | ||||||
$ | 5,063 | $ | 5,708 | |||||
Less allowance for obsolescence | (609 | ) | (616 | ) | ||||
Total | $ | 4,454 | $ | 5,092 | ||||
INTANGIBLES_AND_OTHER_ASSETS_T
INTANGIBLES AND OTHER ASSETS (Tables) | 9 Months Ended | |||||||||||||||||||||||
Sep. 30, 2013 | ||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | |||||||||||||||||||||||
Schedule of Indefinite-Lived and Finite-Lived Intangible Assets | ' | |||||||||||||||||||||||
Estimated Useful Life | ||||||||||||||||||||||||
Technology | 7-8 years | |||||||||||||||||||||||
Assay royalties | 7 years | |||||||||||||||||||||||
Third party payor relationships | 15 years | |||||||||||||||||||||||
Tradenames and trademarks | 7 years | |||||||||||||||||||||||
Customer relationships | 15 years | |||||||||||||||||||||||
Covenants not to compete | 3 years | |||||||||||||||||||||||
Patents | Life of the patent | |||||||||||||||||||||||
Intellectual property | 7 years | |||||||||||||||||||||||
Long-lived intangible assets and other assets consisted of the following: | ||||||||||||||||||||||||
Dollars in Thousands | ||||||||||||||||||||||||
September 30, 2013 | December 31, 2012 | |||||||||||||||||||||||
Cost | Accumulated | Net Book | Cost | Accumulated | Net Book | |||||||||||||||||||
Amortization | Value | Amortization | Value | |||||||||||||||||||||
Intangibles—technology | $ | 9,009 | $ | 2,858 | $ | 6,151 | $ | 9,009 | $ | 1,910 | $ | 7,099 | ||||||||||||
Intangibles—assay royalties | 1,434 | 563 | 871 | 1,434 | 410 | 1,024 | ||||||||||||||||||
Intangibles—third party payor relationships | 367 | 67 | 300 | 367 | 49 | 318 | ||||||||||||||||||
Intangibles—tradenames and trademarks | 824 | 204 | 620 | 824 | 115 | 709 | ||||||||||||||||||
Intangibles—customer relationships | 652 | 43 | 609 | 652 | 11 | 641 | ||||||||||||||||||
Intangibles—covenants not to compete | 184 | 61 | 123 | 184 | 15 | 169 | ||||||||||||||||||
Patents | 1,071 | 321 | 750 | 929 | 280 | 649 | ||||||||||||||||||
Intellectual property | 170 | 31 | 139 | 170 | 15 | 155 | ||||||||||||||||||
$ | 13,711 | $ | 4,148 | $ | 9,563 | $ | 13,569 | $ | 2,805 | $ | 10,764 | |||||||||||||
DEBT_Tables
DEBT (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Debt Disclosure [Abstract] | ' | ||||||||
Schedule of Debt | ' | ||||||||
Dollars in Thousands | |||||||||
September 30, 2013 | December 31, 2012 | ||||||||
Revolving Line of Credit(1) | $ | 2,560 | $ | — | |||||
Term Loan(2) | 4,000 | — | |||||||
PGxHealth note payable (the “First Note”) (3) | — | 6,171 | |||||||
Total debt, including short term debt | 6,560 | 6,171 | |||||||
Current maturities of long term debt | (1,091 | ) | (6,171 | ) | |||||
Long-term debt, net of current maturities | $ | 5,469 | $ | — | |||||
On March 13, 2013 (the “Effective Date”), we entered into a Loan and Security Agreement with affiliates of Third Security, LLC (the “Lenders”) for (a) a revolving line of credit (the “Revolving Line”) with borrowing availability of up to $4.0 million, subject to reduction based on our eligible accounts receivable, and (b) a term loan (the “Term Loan”) of $4.0 million (the “Loan Agreement”). Proceeds were used to pay off the First Note and for general corporate and working capital purposes. | |||||||||
On August 2, 2013, we entered into an amendment to the Loan and Security Agreement, the (“Amendment”). The Amendment, which became effective as of June 30, 2013, reduces our future minimum revenue covenants under the Loan Agreement and modifies the interest rates applicable to the amounts advanced under the Revolving Line. As of September 30, 2013, we were in compliance with the amended financial covenants. | |||||||||
On November 14, 2013, we entered into a second amendment to the Loan and Security Agreement, the (“Second Amendment”). The Second Amendment, which is effective as of October 31, 2013, reduces our future minimum revenue covenant under the Loan Agreement. | |||||||||
-1 | Revolving Line of Credit. Amounts advanced under the Revolving Line bear interest at an annual rate equal to the greater of (a) 4.25% or (b) the Wall Street Journal prime rate plus 1%. Interest is payable on a monthly basis, with the balance payable at the maturity of the Revolving Line. The current interest rate is 4.25%. Under the Amendment, amounts advanced under the Revolving Line bear interest at an annual rate equal to the greater of (x) 6.25% or (y) the Wall Street Journal prime rate plus 3% . Under the Loan Agreement, we paid the Lenders an upfront fee of $20,000, and will pay the Lenders an additional commitment fee of $20,000 on each one year anniversary of the Effective Date during the term of the Revolving Line. In addition, a fee of 0.5% per annum is payable quarterly on the unused portion of the Revolving Line. The Revolving Line matures on September 1, 2016. | ||||||||
-2 | Term Loan. We received $4.0 million under the Term Loan on the Effective Date. We are required to make interest-only payments under the Term Loan through December 31, 2013 and principal and interest payments on a monthly basis thereafter, beginning on January 1, 2014, over 33 months using a straight-line amortization rate. Interest under the Term Loan will accrue at the annual rate of one month LIBOR plus 6.1%, subject to a LIBOR floor of 3%. The current interest rate is 9.1%. | ||||||||
We paid the Lenders an upfront fee of $40,000 for the Term Loan, and will pay the Lenders an additional final payment of $120,000 at maturity or prepayment of the Term Loan. In addition, if we repay the Term Loan prior to maturity, we will pay the Lenders a prepayment penalty of 5% of the total outstanding balance under the Term Loan if the prepayment occurs within one year after the Effective Date, 2.5% of the total outstanding balance under the Term Loan if the prepayment occurs between one and two years after the Effective Date, and 1% of the total outstanding balance under the Term Loan if the prepayment occurs thereafter. | |||||||||
Additional Terms | |||||||||
The Loan Agreement contains affirmative and negative covenants. Under the Term Loan, we are required to maintain a minimum liquidity ratio and achieve a minimum amount of revenue, and we also agreed not to (i) pledge or otherwise encumber our assets other than to the Lenders, (ii) enter into additional borrowings or guarantees, (iii) repurchase our capital stock, or (iv) enter into certain mergers or acquisitions without the Lenders' consent. Additionally, the Loan Agreement contains a subjective acceleration clause at the discretion of the Lenders. | |||||||||
To secure the repayment of any amounts borrowed under the Revolving Line and the Term Loan, we granted the Lenders a security interest in all of our assets. The occurrence of an event of default under the Loan Agreement could result in the acceleration of our obligations under the Loan Agreement and would increase the applicable interest rate under the Revolving Line or Term Loan (or both) by 5%, and permit the Lenders to exercise remedies with respect to the collateral under the Loan Agreement. | |||||||||
-3 | First Note. The First Note was a three year senior secured promissory note payable to PGxHealth, LLC which was entered into on December 29, 2010 in conjunction with our acquisition of the FAMILION family of genetic tests. Interest was payable at 10% per year with quarterly interest payments through March 29, 2012. Thereafter, quarterly installments included both principal and interest through December 30, 2013. The First Note was paid in full on March 13, 2013. |
STOCKHOLDERS_EQUITY_Tables
STOCKHOLDERS' EQUITY (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Stockholders' Equity Note [Abstract] | ' | ||||||||
Schedule of Stockholders' Equity Note, Warrants or Rights | ' | ||||||||
Warrants to purchase an aggregate of 26,643,676 shares of common stock were outstanding at September 30, 2013. | |||||||||
Warrant Holder | Issue Year | Expiration | Underlying | Exercise | |||||
Shares | Price | ||||||||
Affiliates of Third Security, LLC(1) | 2010 | Dec-15 | 5,172,408 | $0.58 | |||||
Various Institutional Holders(2) | 2012 | Feb-17 | 11,435,158 | $1.08 | |||||
Affiliates of Third Security, LLC(2) | 2012 | Feb-17 | 1,736,110 | $1.08 | |||||
Various Institutional Holders(3) | 2013 | Jan-18 | 5,300,000 | $0.75 | |||||
Affiliates of Third Security, LLC(3) | 2013 | Jan-18 | 3,000,000 | $0.75 | |||||
26,643,676 | |||||||||
-1 | This warrant was issued in connection with the issuance of warrants to purchase shares of our Series A Preferred Stock to affiliates of Third Security, LLC in December 2010. The number of underlying shares shown reflects the number of shares of common stock issuable upon conversion of the shares of Series A Preferred Stock for which this warrant is currently exercisable. | ||||||||
-2 | These warrants were issued in connection with the Private Placement, which was completed in February 2012. Warrants were repriced and additional warrants were issued in connection with the warrants issued in the Offering. | ||||||||
-3 | These warrants were issued in connection with the Offering, which was completed in January 2013. |
FAIR_VALUE_Tables
FAIR VALUE (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Fair Value Disclosures [Abstract] | ' | ||||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | ' | ||||||||
During the three months ended September 30, 2013, the changes in the fair value of the liability measured using significant unobservable inputs (Level 3) was comprised of the following: | |||||||||
Dollars in Thousands | |||||||||
For the Three Months Ended | |||||||||
September 30, 2013 | September 30, 2012 | ||||||||
Beginning balance at July 1 | $ | 300 | $ | 2,100 | |||||
Total gains or losses: | |||||||||
Recognized in earnings | — | — | |||||||
Balance at September 30 | $ | 300 | $ | 2,100 | |||||
During the nine months ended September 30, 2013, the changes in the fair value of the liability measured using significant unobservable inputs (Level 3) was comprised of the following: | |||||||||
Dollars in Thousands | |||||||||
For the Nine Months Ended | |||||||||
September 30, 2013 | September 30, 2012 | ||||||||
Beginning balance at January 1 | $ | 900 | $ | 3,100 | |||||
Additions | — | — | |||||||
Total gains or losses: | |||||||||
Recognized in earnings | (600 | ) | (1,000 | ) | |||||
Balance at September 30 | $ | 300 | $ | 2,100 | |||||
STOCK_OPTIONS_Tables
STOCK OPTIONS (Tables) | 9 Months Ended | ||||||
Sep. 30, 2013 | |||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ||||||
Disclosure of Share-based Compensation Arrangements by Share-based Payment Award | ' | ||||||
The following table summarizes stock option activity during the nine months ended September 30, 2013: | |||||||
Number of | Weighted Average | ||||||
Options | Exercise Price | ||||||
Balance at January 1, 2013 | 4,353,167 | $ | 1.05 | ||||
Granted | 5,933,000 | 0.37 | |||||
Exercised | — | — | |||||
Forfeited | (962,500 | ) | (1.01 | ) | |||
Expired | (188,333 | ) | (1.66 | ) | |||
Balance at September 30, 2013 | 9,135,334 | $ | 0.62 | ||||
Exercisable at September 30, 2013 | 3,151,511 | $ | 1.01 | ||||
OPERATING_SEGMENT_AND_GEOGRAPH1
OPERATING SEGMENT AND GEOGRAPHIC INFORMATION (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2013 | ||||||||||||||||
Segment Reporting [Abstract] | ' | |||||||||||||||
Schedule of Segment Reporting Information, by Segment | ' | |||||||||||||||
Segment information for the three months ended September 30, 2013 and 2012 is as follows: | ||||||||||||||||
Dollars in Thousands | ||||||||||||||||
30-Sep-13 | ||||||||||||||||
Laboratory Services | Diagnostic | Total | ||||||||||||||
Tools | ||||||||||||||||
Net Sales | $ | 4,112 | $ | 2,534 | $ | 6,646 | ||||||||||
Gross Profit | 1,776 | 1,075 | 2,851 | |||||||||||||
Net Loss before Taxes | (4,375 | ) | (1,185 | ) | (5,560 | ) | ||||||||||
Income Tax Benefit | — | (8 | ) | (8 | ) | |||||||||||
Net Loss | $ | (4,375 | ) | $ | (1,177 | ) | $ | (5,552 | ) | |||||||
Depreciation/Amortization | $ | 606 | $ | 65 | $ | 671 | ||||||||||
Interest Expense, net | $ | (96 | ) | $ | (59 | ) | $ | (155 | ) | |||||||
30-Sep-13 | ||||||||||||||||
Total Assets | $ | 23,648 | $ | 9,532 | $ | 33,180 | ||||||||||
Dollars in Thousands | ||||||||||||||||
30-Sep-12 | ||||||||||||||||
Laboratory Services | Diagnostic | Total | ||||||||||||||
Tools | ||||||||||||||||
Net Sales | $ | 4,718 | $ | 3,171 | $ | 7,889 | ||||||||||
Gross Profit | 2,347 | 1,453 | 3,800 | |||||||||||||
Net Income (Loss) before Taxes | (1,907 | ) | (733 | ) | (2,640 | ) | ||||||||||
Income Tax Benefit | — | 114 | 114 | |||||||||||||
Net Income (Loss) | $ | (1,907 | ) | $ | (847 | ) | $ | (2,754 | ) | |||||||
Depreciation/Amortization | $ | 442 | $ | 53 | $ | 495 | ||||||||||
Interest Expense, net | $ | (201 | ) | $ | (6 | ) | $ | (207 | ) | |||||||
30-Sep-12 | ||||||||||||||||
Total Assets | $ | 30,553 | $ | 12,334 | $ | 42,887 | ||||||||||
Segment information for the nine months ended September 30, 2013 and 2012 is as follows: | ||||||||||||||||
Dollars in Thousands | ||||||||||||||||
30-Sep-13 | ||||||||||||||||
Laboratory Services | Diagnostic | Total | ||||||||||||||
Tools | ||||||||||||||||
Net Sales | $ | 12,551 | $ | 8,775 | $ | 21,326 | ||||||||||
Gross Profit | 5,822 | 4,120 | 9,942 | |||||||||||||
Net Loss before Taxes | (9,641 | ) | (2,312 | ) | (11,953 | ) | ||||||||||
Income Tax Expense | — | 52 | 52 | |||||||||||||
Net Loss | $ | (9,641 | ) | $ | (2,364 | ) | $ | (12,005 | ) | |||||||
Depreciation/Amortization | $ | 1,815 | $ | 287 | $ | 2,102 | ||||||||||
Interest Expense, net | $ | (314 | ) | $ | (145 | ) | $ | (459 | ) | |||||||
Dollars in Thousands | ||||||||||||||||
30-Sep-12 | ||||||||||||||||
Laboratory Services | Diagnostic | Total | ||||||||||||||
Tools | ||||||||||||||||
Net Sales | $ | 14,527 | $ | 9,661 | $ | 24,188 | ||||||||||
Gross Profit | 7,111 | 4,355 | 11,466 | |||||||||||||
Net Income (Loss) before Taxes | (4,619 | ) | (1,307 | ) | (5,926 | ) | ||||||||||
Income Tax Benefit | — | 88 | 88 | |||||||||||||
Net Income (Loss) | $ | (4,619 | ) | $ | (1,395 | ) | $ | (6,014 | ) | |||||||
Depreciation/Amortization | $ | 1,357 | $ | 213 | $ | 1,570 | ||||||||||
Interest Expense, net | $ | (676 | ) | $ | (37 | ) | $ | (713 | ) | |||||||
Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas | ' | |||||||||||||||
Net sales for the three and nine months ended September 30, 2013 and 2012 by country were as follows: | ||||||||||||||||
Dollars in Thousands | Dollars in Thousands | |||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
United States | $ | 5,095 | $ | 5,442 | $ | 16,241 | $ | 17,013 | ||||||||
Italy | 398 | 571 | 1,225 | 2,277 | ||||||||||||
All Other Countries | 1,153 | 1,876 | 3,860 | 4,898 | ||||||||||||
Total | $ | 6,646 | $ | 7,889 | $ | 21,326 | $ | 24,188 | ||||||||
BUSINESS_DESCRIPTION_Details
BUSINESS DESCRIPTION (Details) | 9 Months Ended |
Sep. 30, 2013 | |
operating_segments | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
Number of operating segments | 2 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Accounts Receivable (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Allowance for Doubtful Accounts Receivable [Roll Forward] | ' | ' | ' | ' |
Beginning balance | $2,362 | $1,236 | $2,171 | $1,088 |
Provision | 2,769 | 679 | 4,966 | 1,649 |
Write Offs | -1,086 | -339 | -3,092 | -1,161 |
Ending balance | $4,045 | $1,576 | $4,045 | $1,576 |
Accounts receivable, general payment terms | '30 days | ' | '30 days | ' |
Accounts receivable, international extended payment terms greater than | '90 days | ' | '90 days | ' |
SUMMARY_OF_SIGNIFICANT_ACCOUNT4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Inventories (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Obsolete Inventory [Roll Forward] | ' | ' | ' | ' |
Beginning balance | $593 | $559 | $616 | $511 |
Provision | 19 | 35 | 19 | 88 |
Write Offs | -3 | -13 | -26 | -18 |
Ending balance | $609 | $581 | $609 | $581 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Property, Plant and Equipment (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Property, Plant and Equipment [Line Items] | ' | ' | ' | ' |
Depreciation expense | $0.20 | $0.20 | $0.50 | $0.50 |
Depreciation expense, capital leases | 0.1 | ' | 0.2 | 0.2 |
Maximum | ' | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' | ' |
Depreciation expense, capital leases | ' | $0.10 | ' | ' |
Leasehold improvements | Minimum | ' | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' | ' |
Property and equipment, estimated useful lives | ' | ' | '1 year | ' |
Leasehold improvements | Maximum | ' | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' | ' |
Property and equipment, estimated useful lives | ' | ' | '10 years | ' |
Furniture and fixtures | Minimum | ' | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' | ' |
Property and equipment, estimated useful lives | ' | ' | '3 years | ' |
Furniture and fixtures | Maximum | ' | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' | ' |
Property and equipment, estimated useful lives | ' | ' | '7 years | ' |
Production equipment | Minimum | ' | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' | ' |
Property and equipment, estimated useful lives | ' | ' | '3 years | ' |
Production equipment | Maximum | ' | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' | ' |
Property and equipment, estimated useful lives | ' | ' | '7 years | ' |
Computer equipment | Minimum | ' | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' | ' |
Property and equipment, estimated useful lives | ' | ' | '3 years | ' |
Computer equipment | Maximum | ' | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' | ' |
Property and equipment, estimated useful lives | ' | ' | '7 years | ' |
Research and development equipment | Minimum | ' | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' | ' |
Property and equipment, estimated useful lives | ' | ' | '2 years | ' |
Research and development equipment | Maximum | ' | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' | ' |
Property and equipment, estimated useful lives | ' | ' | '7 years | ' |
SUMMARY_OF_SIGNIFICANT_ACCOUNT6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Accounting Policies (Details) (USD $) | 0 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Jan. 24, 2013 | Feb. 28, 2013 | Feb. 28, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | ' | ' | ' | ' | ' | '10 years | ' | ' |
Stock-based compensation | ' | ' | ' | ' | ' | $167,000 | ' | $731,000 |
Employee service share-based compensation, nonvested awards, total compensation cost not yet recognized, stock options | ' | ' | ' | 1,600,000 | 600,000 | 1,600,000 | 600,000 | ' |
Unvested stock options, unrecognized compensation expense weighted average recognition period | ' | ' | ' | ' | ' | '3 years | ' | ' |
Stock options, granted | ' | ' | ' | 4,020,500 | 477,500 | 5,933,000 | 626,500 | ' |
Stock options, fair value assumptions, risk free interest rate | ' | ' | ' | 1.39% | 0.70% | ' | ' | ' |
Stock options, fair value assumptions, dividend yield | ' | ' | ' | 0.00% | 0.00% | ' | ' | ' |
Stock options, fair value assumptions, expected life | ' | ' | ' | '4 years 6 months 3 days | '5 years | ' | ' | ' |
Stock options, fair value assumptions, historical volatility rate | ' | ' | ' | 105.00% | 114.00% | ' | ' | ' |
Stock options, fair value assumptions, forfeiture rate | ' | ' | ' | 11.06% | 3.88% | ' | ' | ' |
Common stock rights issued | 8,300,000 | 1,791,268 | 13,171,268 | 10,091,268 | ' | ' | ' | ' |
Deferred revenue | ' | ' | ' | 1,147,000 | ' | 1,147,000 | ' | 1,171,000 |
Other accrued liabilities | ' | ' | ' | 2,393,000 | ' | 2,393,000 | ' | 3,686,000 |
Foreign currency translation adjustment, net of tax | ' | ' | ' | 104,000 | 88,000 | -69,000 | 98,000 | 99,000 |
Options, warrants and conversion rights, common stock callable and antidilutive (in shares) | ' | ' | ' | ' | ' | 44,730,497 | 30,836,894 | ' |
CEO | ' | ' | ' | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock rights issued | ' | ' | ' | 1,000,000 | ' | ' | ' | ' |
CFO | ' | ' | ' | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock rights issued | ' | ' | ' | 660,000 | ' | ' | ' | ' |
Pharmacogenomic services | ' | ' | ' | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Deferred revenue | ' | ' | ' | 200,000 | ' | 200,000 | ' | 200,000 |
Diagnostic tools | ' | ' | ' | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Other accrued liabilities | ' | ' | ' | 900,000 | ' | 900,000 | ' | 1,000,000 |
Additional Paid-in Capital | ' | ' | ' | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Stock-based compensation | ' | ' | ' | ' | ' | ' | ' | 731,000 |
Additional Paid-in Capital | Selling, General and Administrative Expenses [Member] | ' | ' | ' | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Stock-based compensation | ' | ' | ' | ' | ' | 167,000 | 500,000 | ' |
Accumulated Other Comprehensive Income | ' | ' | ' | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Foreign currency translation adjustment, net of tax | ' | ' | ' | ' | ' | -69,000 | ' | 99,000 |
Minimum | ' | ' | ' | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Stock options, unvested options, vesting period | ' | ' | ' | ' | ' | '1 year | ' | ' |
Maximum | ' | ' | ' | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Stock options, unvested options, vesting period | ' | ' | ' | ' | ' | '3 years | ' | ' |
Accumulated Other Comprehensive Income | Maximum | ' | ' | ' | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Foreign currency translation adjustment, net of tax | ' | ' | ' | ' | ' | $50,000 | $70,000 | ' |
INVENTORIES_Details
INVENTORIES (Details) (USD $) | Sep. 30, 2013 | Jun. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Dec. 31, 2011 |
In Thousands, unless otherwise specified | ||||||
Inventory Disclosure [Abstract] | ' | ' | ' | ' | ' | ' |
Finished goods | $3,183 | ' | $4,057 | ' | ' | ' |
Raw materials and work in process | 1,638 | ' | 1,547 | ' | ' | ' |
Demonstration inventory | 242 | ' | 104 | ' | ' | ' |
Inventory, gross | 5,063 | ' | 5,708 | ' | ' | ' |
Less allowance for obsolescence | -609 | -593 | -616 | -581 | -559 | -511 |
Inventories, net | $4,454 | ' | $5,092 | ' | ' | ' |
INTANGIBLES_AND_OTHER_ASSETS_D
INTANGIBLES AND OTHER ASSETS (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' | ' | ' | ' |
Finite-lived intangible assets, cost | $13,711,000 | ' | $13,711,000 | ' | $13,569,000 |
Finite-lived intangible assets, accumulated amortization | 4,148,000 | ' | 4,148,000 | ' | 2,805,000 |
Finite-lived intangible assets, net book value | 9,563,000 | ' | 9,563,000 | ' | 10,764,000 |
Amortization of intangible assets | 500,000 | 300,000 | 1,400,000 | 900,000 | ' |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ' | ' | ' | ' | ' |
Amortization expense, 2013 | 1,700,000 | ' | 1,700,000 | ' | ' |
Amortization expense, 2014 | 1,700,000 | ' | 1,700,000 | ' | ' |
Amortization expense, 2015 | 1,700,000 | ' | 1,700,000 | ' | ' |
Amortization expense, 2016 | 1,700,000 | ' | 1,700,000 | ' | ' |
Amortization expense, 2017 | 1,700,000 | ' | 1,700,000 | ' | ' |
Intangibles - acquired technology | ' | ' | ' | ' | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' | ' | ' | ' |
Finite-lived intangible assets, cost | 9,009,000 | ' | 9,009,000 | ' | 9,009,000 |
Finite-lived intangible assets, accumulated amortization | 2,858,000 | ' | 2,858,000 | ' | 1,910,000 |
Finite-lived intangible assets, net book value | 6,151,000 | ' | 6,151,000 | ' | 7,099,000 |
Intangibles - acquired technology | Minimum | ' | ' | ' | ' | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' | ' | ' | ' |
Finite-lived intangible asset, useful life | ' | ' | '7 years | ' | ' |
Intangibles - acquired technology | Maximum | ' | ' | ' | ' | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' | ' | ' | ' |
Finite-lived intangible asset, useful life | ' | ' | '8 years | ' | ' |
Intangibles - assay royalties | ' | ' | ' | ' | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' | ' | ' | ' |
Finite-lived intangible assets, cost | 1,434,000 | ' | 1,434,000 | ' | 1,434,000 |
Finite-lived intangible assets, accumulated amortization | 563,000 | ' | 563,000 | ' | 410,000 |
Finite-lived intangible assets, net book value | 871,000 | ' | 871,000 | ' | 1,024,000 |
Finite-lived intangible asset, useful life | ' | ' | '7 years | ' | ' |
Third party payor relationships | ' | ' | ' | ' | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' | ' | ' | ' |
Finite-lived intangible assets, cost | 367,000 | ' | 367,000 | ' | 367,000 |
Finite-lived intangible assets, accumulated amortization | 67,000 | ' | 67,000 | ' | 49,000 |
Finite-lived intangible assets, net book value | 300,000 | ' | 300,000 | ' | 318,000 |
Finite-lived intangible asset, useful life | ' | ' | '15 years | ' | ' |
Intangibles - tradenames and trademarks | ' | ' | ' | ' | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' | ' | ' | ' |
Finite-lived intangible assets, cost | 824,000 | ' | 824,000 | ' | 824,000 |
Finite-lived intangible assets, accumulated amortization | 204,000 | ' | 204,000 | ' | 115,000 |
Finite-lived intangible assets, net book value | 620,000 | ' | 620,000 | ' | 709,000 |
Finite-lived intangible asset, useful life | ' | ' | '7 years | ' | ' |
Customer relationships | ' | ' | ' | ' | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' | ' | ' | ' |
Finite-lived intangible assets, cost | 652,000 | ' | 652,000 | ' | 652,000 |
Finite-lived intangible assets, accumulated amortization | 43,000 | ' | 43,000 | ' | 11,000 |
Finite-lived intangible assets, net book value | 609,000 | ' | 609,000 | ' | 641,000 |
Finite-lived intangible asset, useful life | ' | ' | '15 years | ' | ' |
Covenants not to compete | ' | ' | ' | ' | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' | ' | ' | ' |
Finite-lived intangible assets, cost | 184,000 | ' | 184,000 | ' | 184,000 |
Finite-lived intangible assets, accumulated amortization | 61,000 | ' | 61,000 | ' | 15,000 |
Finite-lived intangible assets, net book value | 123,000 | ' | 123,000 | ' | 169,000 |
Finite-lived intangible asset, useful life | ' | ' | '3 years | ' | ' |
Patents | ' | ' | ' | ' | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' | ' | ' | ' |
Finite-lived intangible assets, cost | 1,071,000 | ' | 1,071,000 | ' | 929,000 |
Finite-lived intangible assets, accumulated amortization | 321,000 | ' | 321,000 | ' | 280,000 |
Finite-lived intangible assets, net book value | 750,000 | ' | 750,000 | ' | 649,000 |
Intellectual property | ' | ' | ' | ' | ' |
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' | ' | ' | ' |
Finite-lived intangible assets, cost | 170,000 | ' | 170,000 | ' | 170,000 |
Finite-lived intangible assets, accumulated amortization | 31,000 | ' | 31,000 | ' | 15,000 |
Finite-lived intangible assets, net book value | $139,000 | ' | $139,000 | ' | $155,000 |
Finite-lived intangible asset, useful life | ' | ' | '7 years | ' | ' |
DEBT_Details
DEBT (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Mar. 13, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Mar. 13, 2013 | Mar. 13, 2013 | Mar. 13, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Mar. 13, 2013 | Mar. 13, 2013 | Mar. 13, 2013 | Mar. 13, 2013 | Mar. 13, 2013 | Mar. 13, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | ||||||
Line of Credit | Line of Credit | Line of Credit | Line of Credit | Line of Credit | Term Loan | Term Loan | Term Loan | Term Loan | Term Loan | Term Loan | Term Loan | Term Loan | Term Loan | First Note | First Note | |||||||||
Revolving Credit Facility | Revolving Credit Facility | Revolving Credit Facility | Revolving Credit Facility | Revolving Credit Facility | One Month London Interbank Offered Rate (LIBOR) | London Interbank Offered Rate (LIBOR) Floor | Range One | Range Two | Range Three | Third Security LLC And Affiliates | PGxHealth Note Payable (the First Note) | PGxHealth Note Payable (the First Note) | ||||||||||||
Wall Street Journal Prime Rate | Third Security LLC And Affiliates | |||||||||||||||||||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Total debt, including short term debt | $6,560,000 | $6,171,000 | ' | $2,560,000 | [1] | $0 | [1] | ' | ' | ' | $4,000,000 | [2] | $0 | [2] | ' | ' | ' | ' | ' | ' | $0 | [3] | $6,171,000 | [3] |
Current maturities of long term debt | -1,091,000 | -6,171,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Long term debt, less current maturities | 5,469,000 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Line of credit facility, current borrowing capacity | ' | ' | ' | ' | ' | ' | 4,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Debt instrument, face amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,000,000 | ' | ' | ||||||
Debt instrument, interest rate, stated percentage | ' | ' | 4.25% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10.00% | ' | ||||||
Debt instrument, basis spread on variable rate | ' | ' | ' | ' | ' | 1.00% | ' | ' | ' | ' | 6.10% | 3.00% | ' | ' | ' | ' | ' | ' | ||||||
Long-term debt, percentage bearing variable interest, percentage rate | ' | ' | ' | ' | ' | ' | ' | ' | 9.10% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Line of credit facility, upfront fee | ' | ' | 20,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Line of credit facility, commitment fee amount | ' | ' | 20,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Line of credit facility, unused capacity, commitment fee percentage | ' | ' | 0.50% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Proceeds from Issuance of Long-term Debt | ' | ' | ' | ' | ' | ' | ' | 4,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Debt instrument, term | ' | ' | ' | ' | ' | ' | ' | '33 months | ' | ' | ' | ' | ' | ' | ' | ' | '3 years | ' | ||||||
Debt instrument, upfront fee | ' | ' | ' | ' | ' | ' | ' | 40,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Debt instrument, future debt extinguishment costs | ' | ' | ' | ' | ' | ' | ' | $120,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Debt instrument, prepayment penalty percent | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5.00% | 2.50% | 1.00% | ' | ' | ' | ||||||
Debt instrument, debt default, interest rate, stated percentage increase | ' | ' | ' | ' | ' | ' | ' | 5.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
[1] | Revolving Line of Credit. Amounts advanced under the Revolving Line bear interest at an annual rate equal to the greater of (a) 4.25% or (b) the Wall Street Journal prime rate plus 1%. Interest is payable on a monthly basis, with the balance payable at the maturity of the Revolving Line. The current interest rate is 4.25%. Under the Amendment, amounts advanced under the Revolving Line bear interest at an annual rate equal to the greater of (x) 6.25% or (y) the Wall Street Journal prime rate plus 3% . Under the Loan Agreement, we paid the Lenders an upfront fee of $20,000, and will pay the Lenders an additional commitment fee of $20,000 on each one year anniversary of the Effective Date during the term of the Revolving Line. In addition, a fee of 0.5% per annum is payable quarterly on the unused portion of the Revolving Line. The Revolving Line matures on September 1, 2016. | |||||||||||||||||||||||
[2] | Term Loan. We received $4.0 million under the Term Loan on the Effective Date. We are required to make interest-only payments under the Term Loan through December 31, 2013 and principal and interest payments on a monthly basis thereafter, beginning on January 1, 2014, over 33 months using a straight-line amortization rate. Interest under the Term Loan will accrue at the annual rate of one month LIBOR plus 6.1%, subject to a LIBOR floor of 3%. The current interest rate is 9.1%.We paid the Lenders an upfront fee of $40,000 for the Term Loan, and will pay the Lenders an additional final payment of $120,000 at maturity or prepayment of the Term Loan. In addition, if we repay the Term Loan prior to maturity, we will pay the Lenders a prepayment penalty of 5% of the total outstanding balance under the Term Loan if the prepayment occurs within one year after the Effective Date, 2.5% of the total outstanding balance under the Term Loan if the prepayment occurs between one and two years after the Effective Date, and 1% of the total outstanding balance under the Term Loan if the prepayment occurs thereafter.Additional TermsThe Loan Agreement contains affirmative and negative covenants. Under the Term Loan, we are required to maintain a minimum liquidity ratio and achieve a minimum amount of revenue, and we also agreed not to (i) pledge or otherwise encumber our assets other than to the Lenders, (ii) enter into additional borrowings or guarantees, (iii) repurchase our capital stock, or (iv) enter into certain mergers or acquisitions without the Lenders' consent. Additionally, the Loan Agreement contains a subjective acceleration clause at the discretion of the Lenders.To secure the repayment of any amounts borrowed under the Revolving Line and the Term Loan, we granted the Lenders a security interest in all of our assets. The occurrence of an event of default under the Loan Agreement could result in the acceleration of our obligations under the Loan Agreement and would increase the applicable interest rate under the Revolving Line or Term Loan (or both) by 5%, and permit the Lenders to exercise remedies with respect to the collateral under the Loan Agreement. | |||||||||||||||||||||||
[3] | First Note. The First Note was a three year senior secured promissory note payable to PGxHealth, LLC which was entered into on December 29, 2010 in conjunction with our acquisition of the FAMILION family of genetic tests. Interest was payable at 10% per year with quarterly interest payments through March 29, 2012. Thereafter, quarterly installments included both principal and interest through December 30, 2013. The First Note was paid in full on March 13, 2013. |
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES (Details) (USD $) | 9 Months Ended | |
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ' | ' |
Operating leases, future minimum payments due, next twelve months | $0.40 | ' |
Operating leases, future minimum payments due, 2014 | 1.1 | ' |
Operating leases, future minimum payments due, 2015 | 1 | ' |
Operating leases, future minimum payments due, 2016 | 0.9 | ' |
Operating leases, future minimum payments due, 2017 | 0.8 | ' |
Operating leases, future minimum payments, due thereafter | 1.3 | ' |
Operating leases, rent expense | 0.8 | 0.7 |
Firm commitments to vendors | $1.40 | ' |
INCOME_TAXES_Details
INCOME TAXES (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Income Tax Disclosure [Abstract] | ' | ' | ' | ' |
Income tax expense (benefit) | ($8) | $114 | $52 | $88 |
Effective income tax rate, continuing operations | ' | ' | 0.10% | ' |
STOCKHOLDERS_EQUITY_Details
STOCKHOLDERS' EQUITY (Details) (USD $) | 0 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | 0 Months Ended | |||||||||||||||
In Millions, except Share data, unless otherwise specified | Jan. 24, 2013 | Feb. 07, 2012 | Dec. 31, 2011 | Feb. 28, 2013 | Jan. 24, 2013 | Feb. 28, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | 23-May-12 | Feb. 07, 2012 | Feb. 07, 2012 | Feb. 07, 2012 | Mar. 13, 2013 | Mar. 13, 2013 | |||||
Affiliates of third security, llc; december twenty-fifth 2010 | Various institutional holders; february seventh, 2012 | Affiliates of third security, llc; february seventh, 2012 | Various institutional holders; january twenty-fourth, 2017 | Affiliates of third security, llc; january twenty-fourth, 2017 | ||||||||||||||||
Class of Stock [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Common stock, shares authorized | ' | ' | ' | ' | ' | ' | 150,000,000 | 150,000,000 | 150,000,000 | 150,000,000 | ' | ' | ' | ' | ' | |||||
Proceeds from issuance of common stock and convertible notes | ' | $22 | $3 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Common stock, shares issued | ' | 19,000,000 | ' | ' | ' | ' | 88,245,725 | 88,245,725 | 71,645,725 | ' | ' | ' | ' | ' | ' | |||||
Common stock, sale price per share (in dollars per share) | ' | $1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Common stock warrants, term | ' | '5 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Common stock warrant, common stock called | 8,300,000 | ' | ' | ' | 8,300,000 | ' | 26,643,676 | 26,643,676 | ' | ' | 5,172,408 | [1] | 11,435,158 | [2] | ' | 5,300,000 | [3] | 3,000,000 | [3] | |
Common stock warrant, exercise price | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.58 | [1] | 1.08 | [2] | 1.08 | [2] | 0.75 | [3] | 0.75 | [3] |
Convertible notes, common stock callable | ' | 3,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Convertible notes, warrants callable | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,736,110 | [2] | ' | ' | ||||
Payments of stock issuance costs, reduction to equity | ' | ' | ' | ' | ' | ' | ' | $1.50 | ' | ' | ' | ' | ' | ' | ' | |||||
Private Placement, net, shares | ' | ' | ' | ' | 16,600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6,000,000 | [3] | ||||
Share price | $0.50 | ' | ' | ' | $0.50 | ' | $0.38 | $0.38 | ' | ' | ' | ' | ' | ' | ' | |||||
Class of warrant or right, number of securities called by warrants or rights, price per share | $0.75 | ' | ' | ' | $0.75 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Common stock warrants issued | 8,300,000 | ' | ' | 1,791,268 | ' | 13,171,268 | 10,091,268 | ' | ' | ' | ' | ' | ' | ' | ' | |||||
[1] | This warrant was issued in connection with the issuance of warrants to purchase shares of our Series A Preferred Stock to affiliates of Third Security, LLC in December 2010. The number of underlying shares shown reflects the number of shares of common stock issuable upon conversion of the shares of Series A Preferred Stock for which this warrant is currently exercisable. | |||||||||||||||||||
[2] | These warrants were issued in connection with the Private Placement, which was completed in February 2012. Warrants were repriced and additional warrants were issued in connection with the warrants issued in the Offering. | |||||||||||||||||||
[3] | These warrants were issued in connection with the Offering, which was completed in January 2013. |
FAIR_VALUE_Details
FAIR VALUE (Details) (USD $) | 0 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 9 Months Ended | |||||||
Jan. 24, 2013 | Feb. 28, 2013 | Feb. 28, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Mar. 31, 2013 | Mar. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | |
Understatement of Liability | Liability | Liability | Liability | Liability | Liability | Liability | Minimum | Maximum | ||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock warrants issued | 8,300,000 | 1,791,268 | 13,171,268 | 10,091,268 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share price | $0.50 | ' | ' | $0.38 | $0.38 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock options, fair value assumptions, expected life | ' | ' | ' | ' | '3 years 4 months 10 days | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Volatility | ' | ' | ' | ' | 50.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Risk-free interest rate | ' | ' | ' | ' | 0.82% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair value assumptions, expected term | ' | ' | ' | ' | '3 years 6 months | ' | ' | ' | ' | ' | ' | ' | '3 years | '5 years |
Percentage of simulated equity values below the down-round financing cut-off point | ' | ' | ' | ' | 25.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Beginning balance | ' | ' | ' | ' | ' | ' | ' | ' | $900,000 | $3,100,000 | $300,000 | $2,100,000 | ' | ' |
Additions | ' | ' | ' | ' | ' | ' | ' | ' | 0 | 0 | ' | ' | ' | ' |
Total gains or losses | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Recognized in earnings | ' | ' | ' | ' | ' | ' | 0 | 0 | -600,000 | -1,000,000 | ' | ' | ' | ' |
Ending balance | ' | ' | ' | ' | ' | ' | 300,000 | 2,100,000 | 300,000 | 2,100,000 | 300,000 | 2,100,000 | ' | ' |
Warrants and Rights Outstanding, Adjustment, Error Correction | ' | ' | ' | ' | ' | $300,000 | ' | ' | ' | ' | ' | ' | ' | ' |
STOCK_OPTIONS_Details
STOCK OPTIONS (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Number of Options [Rollforward] | ' | ' | ' | ' |
Balance at January 1, 2012 | ' | ' | 4,353,167 | ' |
Granted | 4,020,500 | 477,500 | 5,933,000 | 626,500 |
Exercised | ' | ' | 0 | ' |
Forfeited | ' | ' | -962,500 | ' |
Expired | ' | ' | -188,333 | ' |
Balance at June 30, 2012 | 9,135,334 | ' | 9,135,334 | ' |
Exercisable at June 30, 2012 | 3,151,511 | ' | 3,151,511 | ' |
Weighted Average Exercise Price [Roll Forward] | ' | ' | ' | ' |
Balance at January 1, 2012 | ' | ' | $1.05 | ' |
Granted | ' | ' | $0.37 | ' |
Exercised | ' | ' | $0 | ' |
Forfeited | ' | ' | ($1.01) | ' |
Expired | ' | ' | ($1.66) | ' |
Balance at June 30, 2012 | $0.62 | ' | $0.62 | ' |
Exercisable at June 30, 2012 | $1.01 | ' | $1.01 | ' |
Equity incentive plan 2006 | ' | ' | ' | ' |
Number of Options [Rollforward] | ' | ' | ' | ' |
Granted | ' | ' | 5,933,000 | ' |
Weighted Average Exercise Price [Roll Forward] | ' | ' | ' | ' |
Granted | ' | ' | $0.37 | ' |
OPERATING_SEGMENT_AND_GEOGRAPH2
OPERATING SEGMENT AND GEOGRAPHIC INFORMATION (Details) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 |
operating_segments | |||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Number of operating segments (in operating segments) | ' | ' | 2 | ' | ' |
Net sales | $6,646 | $7,889 | $21,326 | $24,188 | ' |
Gross profit | 2,851 | 3,800 | 9,942 | 11,466 | ' |
Net income (loss) before taxes | -5,560 | -2,640 | -11,953 | -5,926 | ' |
Income tax expense (benefit) | -8 | 114 | 52 | 88 | ' |
Net loss | -5,552 | -2,754 | -12,005 | -6,014 | -8,327 |
Depreciation/Amortization | 671 | 495 | 2,102 | 1,570 | ' |
Interest expense, net | -155 | -207 | -459 | -713 | ' |
Total Assets | 33,180 | 42,887 | 33,180 | 42,887 | 38,791 |
Laboratory services | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Net sales | 4,112 | 4,718 | 12,551 | 14,527 | ' |
Gross profit | 1,776 | 2,347 | 5,822 | 7,111 | ' |
Net income (loss) before taxes | -4,375 | -1,907 | -9,641 | -4,619 | ' |
Income tax expense (benefit) | 0 | 0 | 0 | 0 | ' |
Net loss | -4,375 | -1,907 | -9,641 | -4,619 | ' |
Depreciation/Amortization | 606 | 442 | 1,815 | 1,357 | ' |
Interest expense, net | -96 | -201 | -314 | -676 | ' |
Total Assets | 23,648 | 30,553 | 23,648 | 30,553 | ' |
Diagnostic tools | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Net sales | 2,534 | 3,171 | 8,775 | 9,661 | ' |
Gross profit | 1,075 | 1,453 | 4,120 | 4,355 | ' |
Net income (loss) before taxes | -1,185 | -733 | -2,312 | -1,307 | ' |
Income tax expense (benefit) | -8 | 114 | 52 | 88 | ' |
Net loss | -1,177 | -847 | -2,364 | -1,395 | ' |
Depreciation/Amortization | 65 | 53 | 287 | 213 | ' |
Interest expense, net | -59 | -6 | -145 | -37 | ' |
Total Assets | 9,532 | 12,334 | 9,532 | 12,334 | ' |
United states | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Net sales | 5,095 | 5,442 | 16,241 | 17,013 | ' |
Italy | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Net sales | 398 | 571 | 1,225 | 2,277 | ' |
All Other Countries [Member] | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Net sales | $1,153 | $1,876 | $3,860 | $4,898 | ' |
Maximum | All Other Countries [Member] | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Percent of revenue from countries not separately disclosed | ' | ' | 5.00% | ' | ' |
Minimum | United states | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Long-lived asset percentage held in a specific location | 99.00% | ' | 99.00% | ' | ' |