DOCUMENT_AND_ENTITY_INFORMATIO
DOCUMENT AND ENTITY INFORMATION | 6 Months Ended | |
Jun. 30, 2014 | Aug. 05, 2014 | |
Document and Entity Information [Abstract] | ' | ' |
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-Jun-14 | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q2 | ' |
Amendment Flag | 'false | ' |
Entity Common Stock, Shares Outstanding | ' | 7,353,695 |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | Jun. 30, 2014 | Dec. 31, 2013 | ||
In Thousands, unless otherwise specified | ||||
CURRENT ASSETS: | ' | ' | ||
Cash and cash equivalents | $1,191 | $1,626 | ||
Accounts receivable, net | 7,298 | 5,314 | ||
Inventories, net | 4,009 | 3,957 | ||
Other current assets | 879 | 938 | ||
Total current assets | 13,377 | 11,835 | ||
PROPERTY AND EQUIPMENT: | ' | ' | ||
Equipment | 11,376 | 11,255 | ||
Furniture, fixtures & leasehold improvements | 3,876 | 3,874 | ||
Property, Plant and Equipment, Gross | 15,252 | 15,129 | ||
Less: accumulated depreciation | -13,416 | -13,126 | ||
Property, Plant and Equipment, Net | 1,836 | 2,003 | ||
OTHER ASSETS: | ' | ' | ||
Goodwill | 6,918 | 6,918 | ||
Intangibles, net | 8,665 | 9,195 | ||
Other assets | 295 | 327 | ||
Assets | 31,091 | 30,278 | ||
CURRENT LIABILITIES: | ' | ' | ||
Current maturities of long-term debt | 691 | 242 | ||
Accounts payable | 3,537 | 2,860 | ||
Accrued compensation | 1,213 | 1,330 | ||
Accrued expenses | 2,040 | 2,037 | ||
Deferred revenue | 1,212 | 1,088 | ||
Other liabilities | 1,068 | 1,068 | ||
Total current liabilities | 9,761 | 8,625 | ||
LONG TERM LIABILITIES: | ' | ' | ||
Long-term debt, less current maturities | 6,211 | 6,318 | ||
Common stock warrant liability | 350 | 600 | ||
Accrued preferred stock dividend | 2,521 | 1,986 | ||
Other long-term liabilities | 1,897 | 1,303 | ||
Total liabilities | 20,740 | 18,832 | ||
STOCKHOLDERS’ EQUITY: | ' | ' | ||
Preferred stock, $0.01 par value, 15,000,000 shares authorized, 4,029,502 and 2,586,205 shares issued and outstanding, respectively | 40 | 26 | ||
Common stock, $0.01 par value, 150,000,000 shares authorized, 7,353,695 and 7,353,695 shares issued and outstanding, respectively (1) | 73 | [1] | 73 | [1] |
Additional paid-in capital (1) | 186,920 | [1] | 179,459 | [1] |
Accumulated other comprehensive income | 424 | 390 | ||
Accumulated deficit | -177,106 | -168,502 | ||
Total stockholders’ equity | 10,351 | 11,446 | ||
Liabilities and equity | $31,091 | $30,278 | ||
[1] | The shares of common stock and additional paid-in capital for all periods presented reflect the one-for-twelve reverse stock split that took effect on January 27, 2014. |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS PARENTHETICALS (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Statement of Financial Position [Abstract] | ' | ' |
Common stock, par value (in dollars per share) | $0.01 | $0.01 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 7,353,695 | 7,353,695 |
Common stock, shares outstanding | 7,353,695 | 7,353,695 |
Preferred stock, par value (in dollars per share) | $0.01 | $0.01 |
Preferred stock, shares authorized | 15,000,000 | 15,000,000 |
Preferred stock, shares issued | 4,029,502 | 2,586,205 |
Preferred stock, shares outstanding | 4,029,502 | 2,586,205 |
UNAUDITED_CONDENSED_CONSOLIDAT
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | 6 Months Ended | ||||||
In Thousands, except Share data, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | ||||
Income Statement [Abstract] | ' | ' | ' | ' | ||||
NET SALES | $6,764 | $7,306 | $13,015 | $14,680 | ||||
COST OF GOODS SOLD: | 4,371 | 4,333 | 8,128 | 8,452 | ||||
Gross profit | 2,393 | 2,973 | 4,887 | 6,228 | ||||
OPERATING EXPENSES: | ' | ' | ' | ' | ||||
Selling, general and administrative | 5,563 | 4,982 | 10,851 | 11,294 | ||||
Research and development | 785 | 913 | 1,530 | 1,677 | ||||
Operating Expenses | 6,348 | 5,895 | 12,381 | 12,971 | ||||
OTHER INCOME (EXPENSE): | ' | ' | ' | ' | ||||
Interest expense, net | -146 | -151 | -328 | -304 | ||||
Warrant revaluation | 200 | 200 | 250 | 600 | ||||
Other, net | 0 | 0 | 0 | 53 | ||||
Other Income (Expense) | 54 | 49 | -78 | 349 | ||||
LOSS FROM OPERATIONS | -3,955 | -2,922 | -7,494 | -6,743 | ||||
LOSS BEFORE INCOME TAXES | -3,901 | -2,873 | -7,572 | -6,394 | ||||
INCOME TAX (BENEFIT) EXPENSE | -8 | -6 | 497 | 60 | ||||
NET LOSS | -3,893 | -2,867 | -8,069 | -6,454 | ||||
PREFERRED STOCK DIVIDENDS | -305 | -181 | -535 | -362 | ||||
NET LOSS AVAILABLE TO COMMON STOCKHOLDERS | ($4,198) | ($3,048) | ($8,604) | ($6,816) | ||||
BASIC AND DILUTED LOSS PER COMMON SHARE (1) | ($0.57) | [1] | ($0.41) | [1] | ($1.17) | ($0.95) | ||
BASIC AND DILUTED WEIGHTED-AVERAGE SHARES OF COMMON STOCK OUTSTANDING (1) | 7,353,695 | [1] | 7,353,810 | [1] | 7,353,695 | [1] | 7,178,028 | [1] |
[1] | Net loss per share and the number of shares used in the per share calculations for all periods presented reflect the one-for-twelve reverse stock split that took effect on January 27, 2014. |
UNAUDITED_CONDENSED_CONSOLIDAT1
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS PARENTHETICALS | 0 Months Ended |
Jan. 27, 2014 | |
Income Statement [Abstract] | ' |
Stock split, conversion ratio | 0.0833 |
UNAUDITED_CONDENSED_CONSOLIDAT2
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Statement of Comprehensive Income [Abstract] | ' | ' | ' | ' |
Net loss | ($3,893) | ($2,867) | ($8,069) | ($6,454) |
Other comprehensive income (loss) - foreign currency translation adjustment | 22 | 0 | 34 | -173 |
Comprehensive Loss | ($3,871) | ($2,867) | ($8,035) | ($6,627) |
UNAUDITED_CONDENSED_CONSOLIDAT3
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (USD $) | Total | Preferred Stock | Common Stock (1) | Additional Paid-in Capital (1) | Accumulated Deficit | Accumulated Other Comprehensive Income | |||
In Thousands, except Share data, unless otherwise specified | |||||||||
Balance at Dec. 31, 2012 | $20,274 | $26 | ' | ' | ' | $435 | |||
Balance, shares at Dec. 31, 2012 | ' | 2,586,205 | ' | ' | ' | ' | |||
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' | ' | |||
Net loss | -6,454 | ' | ' | ' | ' | ' | |||
Foreign currency translation adjustment, net of tax | -173 | ' | ' | ' | ' | -200 | |||
Balance at Jun. 30, 2013 | ' | ' | ' | ' | ' | ' | |||
Balance at Dec. 31, 2012 | 20,274 | 26 | 64 | [1] | 171,538 | [1] | -151,789 | 435 | |
Balance, shares at Dec. 31, 2012 | ' | 2,586,205 | 5,970,478 | [1] | ' | ' | ' | ||
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' | ' | |||
Net loss | -15,987 | ' | ' | ' | -15,987 | ' | |||
Foreign currency translation adjustment, net of tax | -45 | ' | ' | ' | ' | -45 | |||
Stock-based compensation | 360 | ' | ' | 360 | [1] | ' | ' | ||
Private Placement, net, shares | [1] | ' | ' | 1,383,217 | ' | ' | ' | ||
Private placement, net | 7,570 | ' | 14 | [1] | 7,556 | [1] | ' | ' | |
Other, shares | [1] | ' | ' | 0 | ' | ' | ' | ||
Other | 0 | ' | -5 | [1] | 5 | [1] | ' | ' | |
Dividends on preferred stock | -726 | ' | ' | ' | -726 | ' | |||
Balance at Dec. 31, 2013 | 11,446 | 26 | 73 | [1] | 179,459 | [1] | -168,502 | 390 | |
Balance, shares at Dec. 31, 2013 | [1] | ' | 2,586,205 | 7,353,695 | ' | ' | ' | ||
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' | ' | |||
Net loss | -8,069 | ' | ' | ' | -8,069 | ' | |||
Foreign currency translation adjustment, net of tax | 34 | ' | ' | ' | ' | 34 | |||
Stock-based compensation | 570 | ' | ' | 570 | [1] | ' | ' | ||
Preferred stock agreement, shares | ' | 1,443,297 | ' | ' | ' | ' | |||
Preferred stock agreement | 6,905 | 14 | ' | 6,891 | [1] | ' | ' | ||
Dividends on preferred stock | -535 | ' | ' | ' | -535 | ' | |||
Balance at Jun. 30, 2014 | $10,351 | $40 | $73 | [1] | $186,920 | [1] | ($177,106) | $424 | |
Balance, shares at Jun. 30, 2014 | ' | 4,029,502 | 7,353,695 | [1] | ' | ' | ' | ||
[1] | The common stock shares and additional paid-in capital for all periods presented reflect the one-for-twelve reverse stock split that took effect on January 27, 2014. |
UNAUDITED_CONDENSED_CONSOLIDAT4
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY PARENTHETICALS | 0 Months Ended |
Jan. 27, 2014 | |
Statement of Stockholders' Equity [Abstract] | ' |
Stock split, conversion ratio | 0.0833 |
UNAUDITED_CONDENSED_CONSOLIDAT5
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 6 Months Ended | |
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 |
CASH FLOWS USED IN OPERATING ACTIVITIES: | ' | ' |
Net Loss | ($8,069) | ($6,454) |
Adjustments to reconcile net loss to net cash flows used in operating activities: | ' | ' |
Depreciation and amortization | 981 | 1,431 |
Stock-based compensation | 637 | 162 |
Provision for losses on doubtful accounts | 1,523 | 2,197 |
Provision for losses on inventory obsolescence | 55 | 0 |
Warrant revaluation | -250 | -600 |
Loss on sale of fixed assets | 0 | 9 |
Gain on foreign currency settlement | 0 | -62 |
Deferred interest | 145 | 0 |
Deferred tax provision | 550 | 0 |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable | -3,479 | -2,225 |
Inventories | -88 | 576 |
Other current assets | 5 | -67 |
Accounts payable | 667 | -287 |
Accrued expenses and other liabilities | 66 | -367 |
Net cash flows used in operating activities | -7,257 | -5,687 |
CASH FLOWS USED IN INVESTING ACTIVITIES: | ' | ' |
Purchases of property and equipment | -110 | -355 |
Acquisition | 0 | -849 |
Other assets | -62 | -157 |
Net cash flows used in investing activities | -172 | -1,361 |
CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES: | ' | ' |
Principal payments on capital lease obligations | -82 | -176 |
Issuance of preferred stock, net | 6,906 | 0 |
Issuance of common stock, net | 0 | 7,570 |
Payment of deferred financing costs | 0 | -238 |
Proceeds from borrowings | 4,440 | 8,000 |
Principal payment on note payable | -4,283 | -6,171 |
Net cash flows provided by financing activities | 6,981 | 8,985 |
EFFECT OF FOREIGN CURRENCY EXCHANGE RATE CHANGES ON CASH | 13 | -46 |
NET CHANGE IN CASH AND CASH EQUIVALENTS | -435 | 1,891 |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 1,626 | 4,497 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 1,191 | 6,388 |
Cash paid during the period for: | ' | ' |
Interest | 147 | 460 |
SUPPLEMENTAL DISCLOSURE OF NON-CASH INFORMATION | ' | ' |
Dividends accrued on preferred stock | 535 | 363 |
Deferred financing costs in accounts payable | $0 | $25 |
BUSINESS_DESCRIPTION
BUSINESS DESCRIPTION | 6 Months Ended | |
Jun. 30, 2014 | ||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' | |
Business Description | ' | |
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 world-class clinical and research services. Our operations are organized and reviewed by management along our product lines and presented in the following two complementary business segments: | ||
• | Laboratory Services. Our laboratories specialize in genetic testing for cardiology, neurology, mitochondrial disorders and oncology. Our Patient Testing laboratories located in New Haven, Connecticut and Omaha, Nebraska are certified under the Clinical Laboratory Improvement Amendment as high complexity labs and our Omaha facility is also accredited by the College of American Pathologists. Our Biomarker Identification 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 multiple unknown mutations from virtually any sample type including tissue biopsies, blood, cell-free DNA (“cfDNA”) and circulating tumor cells at levels greater than 1,000-fold higher than standard DNA sequencing techniques. | |
• | Genetic Assays and Platforms. 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 a range of chromatography columns. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended | |||||||||||||||
Jun. 30, 2014 | ||||||||||||||||
Accounting Policies [Abstract] | ' | |||||||||||||||
Summary of Significant Accounting Policies | ' | |||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||||||||||
Basis of Presentation. | ||||||||||||||||
The condensed consolidated balance sheet as of December 31, 2013 was derived from our audited balance sheet as of that date. The accompanying condensed consolidated financial statements as of and for the three and six months ended June 30, 2014 and 2013 are unaudited and reflect all adjustments (consisting of only normal recurring 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, 2013 contained in our Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 27, 2014. The results of operations for the interim periods presented are not necessarily indicative of the results for the entire year. | ||||||||||||||||
Following approval of our stockholders, on January 15, 2014, our Board of Directors approved a reverse split of our common stock, par value $0.01, at a ratio of one-for-twelve. This reverse stock split became effective on January 27, 2014 and, unless otherwise indicated, all share amounts, per share data, share prices, exercise prices and conversion rates set forth in these notes and the accompanying consolidated financial statements have, where applicable, been adjusted retroactively to reflect this reverse stock split. | ||||||||||||||||
Principles of Consolidation. | ||||||||||||||||
The consolidated financial statements include the accounts of Transgenomic, Inc. and our 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 in 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 period amounts of selling, general and administrative expenses have been reclassified to cost of goods sold in order to conform to the current period presentation. These reclassifications had no effect on previously reported net earnings. | ||||||||||||||||
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 June 30, 2014. | ||||||||||||||||
Accounts Receivable. | ||||||||||||||||
The following is a summary of activity for the allowance for doubtful accounts during the three and six months ended June 30, 2014 and 2013: | ||||||||||||||||
Dollars in Thousands | ||||||||||||||||
Beginning | Provision | Write-Offs | Ending | |||||||||||||
Balance | Balance | |||||||||||||||
Three Months Ended June 30, 2014 | $ | 3,540 | $ | 850 | $ | (349 | ) | $ | 4,041 | |||||||
Three Months Ended June 30, 2013 | $ | 2,549 | $ | 608 | $ | (795 | ) | $ | 2,362 | |||||||
Six Months Ended June 30, 2014 | $ | 3,838 | $ | 1,523 | $ | (1,320 | ) | $ | 4,041 | |||||||
Six Months Ended June 30, 2013 | $ | 2,171 | $ | 2,197 | $ | (2,006 | ) | $ | 2,362 | |||||||
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 six months ended June 30, 2014, in accordance with our stated policy, we wrote-off approximately $1.3 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 six months ended June 30, 2014 and 2013: | ||||||||||||||||
Dollars in Thousands | ||||||||||||||||
Beginning | Provision | Write-Offs | Ending | |||||||||||||
Balance | Balance | |||||||||||||||
Three Months Ended June 30, 2014 | $ | 849 | $ | — | $ | (6 | ) | $ | 843 | |||||||
Three Months Ended June 30, 2013 | $ | 611 | $ | — | $ | (18 | ) | $ | 593 | |||||||
Six Months Ended June 30, 2014 | $ | 799 | $ | 55 | $ | (11 | ) | $ | 843 | |||||||
Six Months Ended June 30, 2013 | $ | 616 | $ | — | $ | (23 | ) | $ | 593 | |||||||
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 $0.1 million and $0.2 million for the three months ended June 30, 2014 and 2013, respectively. Included in depreciation for each of the three months ended June 30, 2014 and 2013 was $0.1 million related to equipment acquired under capital leases. Depreciation expense related to property and equipment was $0.2 million and $0.3 million for the six months ended June 30, 2014 and 2013, respectively. Included in depreciation for each of the six months ended June 30, 2014 and 2013 was $0.1 million related to equipment acquired under capital leases. | ||||||||||||||||
Goodwill. | ||||||||||||||||
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 six months ended June 30, 2014 that would require an impairment analysis prior to our scheduled review. | ||||||||||||||||
Stock-Based Compensation. | ||||||||||||||||
All stock-based awards 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 June 30, 2014 had vesting periods of one or three years from the date of grant. None of the stock options outstanding at June 30, 2014 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. Compensation expense is based on the calculated fair value of the awards as measured at the grant date and is expensed over the service period of the awards. | ||||||||||||||||
During the six months ended June 30, 2014 and 2013, we recorded compensation expense of $0.6 million and $0.2 million, respectively, within selling, general and administrative expense. As of June 30, 2014, the unrecognized compensation expense related to unvested stock awards, net of estimated forfeitures, was $1.4 million, which is expected to be recognized over a weighted-average period of 1.5 years. | ||||||||||||||||
We granted 15,499 stock options during the quarter ended June 30, 2014. 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 1.74% based on the U.S. Treasury yield in effect at the time of grant; dividend yields of zero percent; expected lives of 4.38 years, based on expected exercise activity behavior; and volatility of 83% based on the historical volatility of our common stock over a time that is consistent with the expected life of the option. | ||||||||||||||||
Included in the stock awards outstanding as of June 30, 2014 were stock appreciation rights with respect to 83,333 and 55,000 shares of common stock granted to our Chief Executive Officer and Chief Financial Officer, respectively. These rights will vest over three years from the date of grant and have an exercise price of $4.32 per share, which is equal to the fair value of one share of our common stock on the date of grant, which was September 30, 2013. | ||||||||||||||||
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. | |||||||||||||||
For our Laboratory Services segment, net sales from Patient Testing labs are recognized on an individual test basis and take place when the test report is completed, reviewed and sent to the client less the reserve for insurance, Medicare and Medicaid contractual adjustments. There are no deferred net sales associated with our Patient Testing services. Adjustments to the allowances, based on actual receipts from third party payors, are reflected in the estimated contractual allowance applied prospectively. In our Biomarker Identification labs, we perform services on a project by project basis. When we receive payment in advance, we recognize revenue when we deliver the service. These projects typically do not extend beyond one year. At June 30, 2014 and December 31, 2013, deferred net sales associated with pharmacogenomics research projects, included in the balance sheet in deferred revenue was $0.3 million and $0.2 million, respectively. | ||||||||||||||||
Net sales of products in our Genetic Assays and Platforms 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 cover specific time periods, and net sales associated with these contracts are deferred and recognized ratably over the service period. At each of June 30, 2014 and December 31, 2013, deferred net revenue associated with our service contracts was $0.9 million and was included in the balance sheet in deferred revenue. | ||||||||||||||||
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 British Pound Sterling, which is the local currency of the country in which it is located, 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 gain of $0.03 million was reported as other comprehensive income on the accompanying unaudited condensed consolidated statement of comprehensive loss for the six months ended June 30, 2014. A cumulative translation loss of $0.2 million was reported as accumulated other comprehensive income for the six months ended June 30, 2013. 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 six months ended June 30, 2014 and less than $0.1 million as foreign currency transaction income in the determination of net loss for the six months ended June 30, 2013. | ||||||||||||||||
Loss Per Share. | ||||||||||||||||
Basic loss per share is calculated based on the weighted-average number of common shares outstanding during each period. 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 5,510,255 and 3,334,055 shares of our common stock have been excluded from the computation of diluted loss per share at June 30, 2014 and 2013, respectively. The options, warrants and conversion rights that were exercisable during the three and six months ended June 30, 2014 and 2013 were not included because the effect would be anti-dilutive due to the net loss. | ||||||||||||||||
Recent Accounting Pronouncements. | ||||||||||||||||
In April 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, which changes the criteria for reporting a discontinued operation. Under this standard, a disposal of part of an organization that has a major effect on its operations and financial results is a discontinued operation. This guidance is effective prospectively for us beginning January 1, 2015 with earlier application permitted, but only for disposals (or classifications as held for sale) that have not been reported previously. When adopted, we do not expect that this guidance will have a material impact on our financial condition, results of operations or cash flows. | ||||||||||||||||
In May 2014, the FASB issued ASU 2014-09 “Revenue from Contracts with Customers”. The guidance requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to a customer. The ASU will replace most existing revenue recognition guidance in generally accepted accounting principles in the U.S. when it becomes effective on January 1, 2017. Early application is not permitted, but the standard permits the use of either the retrospective or cumulative effect transition method. We have not selected a transition method and are currently evaluating the impact this guidance will have on our financial condition, results of operations and cash flows. |
INVENTORIES
INVENTORIES | 6 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Inventory Disclosure [Abstract] | ' | |||||||
Inventories | ' | |||||||
INVENTORIES | ||||||||
Inventories (net of allowance for obsolescence) consisted of the following: | ||||||||
Dollars in Thousands | ||||||||
June 30, | December 31, | |||||||
2014 | 2013 | |||||||
Finished goods | $ | 2,967 | $ | 2,978 | ||||
Raw materials and work in process | 1,663 | 1,567 | ||||||
Demonstration inventory | 222 | 211 | ||||||
$ | 4,852 | $ | 4,756 | |||||
Less allowance for obsolescence | (843 | ) | (799 | ) | ||||
Total | $ | 4,009 | $ | 3,957 | ||||
INTANGIBLES_AND_OTHER_ASSETS
INTANGIBLES AND OTHER ASSETS | 6 Months Ended | |||||||||||||||||||||||
Jun. 30, 2014 | ||||||||||||||||||||||||
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 | ||||||||||||||||||||||||
June 30, 2014 | 31-Dec-13 | |||||||||||||||||||||||
Cost | Accumulated | Net Book | Cost | Accumulated | Net Book | |||||||||||||||||||
Amortization | Value | Amortization | Value | |||||||||||||||||||||
Intangibles—technology | $ | 9,009 | $ | 3,586 | $ | 5,423 | $ | 9,009 | $ | 3,175 | $ | 5,834 | ||||||||||||
Intangibles—assay royalties | 1,434 | 717 | 717 | 1,434 | 614 | 820 | ||||||||||||||||||
Intangibles—third party payor relationships | 367 | 86 | 281 | 367 | 73 | 294 | ||||||||||||||||||
Intangibles—tradenames and trademarks | 824 | 292 | 532 | 824 | 233 | 591 | ||||||||||||||||||
Intangibles—customer relationships | 652 | 76 | 576 | 652 | 54 | 598 | ||||||||||||||||||
Intangibles—covenants not to compete | 184 | 107 | 77 | 184 | 77 | 107 | ||||||||||||||||||
Patents | 1,216 | 372 | 844 | 1,153 | 336 | 817 | ||||||||||||||||||
Intellectual property | 266 | 51 | 215 | 170 | 36 | 134 | ||||||||||||||||||
$ | 13,952 | $ | 5,287 | $ | 8,665 | $ | 13,793 | $ | 4,598 | $ | 9,195 | |||||||||||||
Estimated Useful Life | ||||||||||||||||||||||||
Technology | 7-10 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 $0.3 million and $0.5 million during the three months ended June 30, 2014 and 2013, respectively. Amortization expense for intangible assets was $0.7 million and $0.9 million during the six months ended June 30, 2014 and 2013, respectively. Amortization expense for intangible assets is expected to be $1.4 million, $1.4 million, $1.3 million, $1.3 million and $1.0 million for the years ending December 31, 2014, 2015, 2016, 2017 and 2018, respectively. | ||||||||||||||||||||||||
Based on the length of time our technology is expected to be used and an evaluation of the lives of similar technology in the industry, effective January 1, 2014, we increased the estimated useful lives of certain technologies acquired in 2010 and 2012 from 7 years to 10 years, which decreased loss from operations by $0.1 million and net loss by $0.1 million, or $0.01 per basic and diluted share, for the three months ended June 30, 2014. |
DEBT
DEBT | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Debt Disclosure [Abstract] | ' | ||||||||
Debt | ' | ||||||||
DEBT | |||||||||
Dollars in Thousands | |||||||||
June 30, 2014 | December 31, 2013 | ||||||||
Revolving Line of Credit(1) | $ | 3,000 | $ | 2,560 | |||||
Term Loan(2) | 3,902 | 4,000 | |||||||
Total debt, including short-term debt | 6,902 | 6,560 | |||||||
Current maturities of long-term debt | (691 | ) | (242 | ) | |||||
Long-term debt, net of current maturities | $ | 6,211 | $ | 6,318 | |||||
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 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, and for general corporate and working capital purposes. | |||||||||
On August 2, 2013, we entered into an amendment to the Loan Agreement (the “Amendment”). The Amendment, which became effective as of June 30, 2013, reduced our future minimum revenue covenants under the Loan Agreement and modifies the interest rates applicable to the amounts advanced under the Revolving Line. | |||||||||
On November 14, 2013, we entered into a second amendment to the Loan Agreement (the “Second Amendment”). The Second Amendment, which became effective as of October 31, 2013, reduced our future minimum revenue covenants under the Loan Agreement. | |||||||||
On January 27, 2014, we entered into a third amendment to the Loan Agreement (the “Third Amendment”). Pursuant to the Third Amendment, the Lenders agreed to waive certain events of default under the Loan Agreement, and the parties amended certain provisions of the Loan Agreement, including the minimum liquidity ratio that we must maintain during the term of the Loan Agreement. | |||||||||
On March 3, 2014, we entered into a fourth amendment to the Loan Agreement (the “Fourth Amendment”). The Fourth Amendment provides that we will not be required to make any principal or interest payments under the Term Loan for the period from March 1, 2014 through March 31, 2015. Accordingly, pursuant to the Loan Agreement as amended by the Fourth Amendment, the next principal and interest payment under the Term Loan will be due on April 1, 2015. The interest on the debt that is being deferred, and not paid, is being capitalized as part of the Term Loan. As of June 30, 2014, the amount of interest that has been capitalized is $0.1 million. | |||||||||
-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. 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%. The current interest rate is 6.25%. 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. Pursuant to the terms of the Loan Agreement, as amended by the Fourth Amendment, we are required to make monthly payments of principal and interest to the Lenders commencing on April 1, 2015. 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. As of June 30, 2014, we were in compliance with all financial covenants. | |||||||||
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. |
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | ' |
Commitments and Contingencies | ' |
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 $0.6 million for the remainder of 2014, $1.0 million in 2015, $0.9 million in 2016, $0.8 million in 2017, $0.5 million in 2018 and $0.9 million thereafter. Rent expense for the six months ended June 30, 2014 and 2013 was $0.5 million and $0.6 million, respectively. At June 30, 2014, firm commitments to vendors totaled $1.3 million. |
INCOME_TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2014 | |
Income Tax Disclosure [Abstract] | ' |
Income Taxes | ' |
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 2013. We have state income tax returns subject to examination primarily for tax years 2010 through 2013. Open tax years related to foreign jurisdictions, primarily the United Kingdom, remain subject to examination for tax years 2010 through 2013. | |
Income tax expense for the six months ended June 30, 2014 was $0.5 million. Income tax expense for the six months ended June 30, 2013 was $0.1 million. Our effective tax rate for the six months ended June 30, 2014 was 6.57%, 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. | |
Our goodwill is an indefinite-lived asset which is not amortized for financial reporting purposes. However, goodwill is tax deductible and therefore amortized for tax purposes. As such, deferred income tax expense and a deferred tax liability arise as a result of the tax-deductibility of the goodwill. The resulting deferred tax liability, which is expected to increase over time, will have an indefinite life, resulting in what is referred to as a “naked tax credit.” This deferred tax liability could remain on our balance sheet indefinitely unless there is an impairment of the goodwill (for financial reporting purposes), or there is a disposal of the business to which the goodwill relates. During the six months ended June 30, 2014, the amount of income tax expense related to the tax amortization of goodwill was $0.5 million. Of this amount, $0.4 million related to prior periods. | |
During each of the three and six months ended June 30, 2014 and 2013, there were no material changes to the liability for uncertain tax positions. |
STOCKHOLDERS_EQUITY
STOCKHOLDERS' EQUITY | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Stockholders' Equity Note [Abstract] | ' | ||||||||
Stockholders' Equity | ' | ||||||||
STOCKHOLDERS’ EQUITY | |||||||||
Common Stock. | |||||||||
Pursuant to our Third Amended and Restated Certificate of Incorporation as amended, we currently have 150,000,000 shares of common stock authorized for issuance. | |||||||||
On February 2, 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 1,583,333 shares of our common stock at a price per share of $12.00, as well as five-year warrants to purchase up to an aggregate of 823,333 shares of our common stock with an exercise price of $15.00 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 250,000 shares of our common stock and 125,000 warrants on the same terms as all investors in the Private Placement. Craig-Hallum Capital Group LLC served as the sole placement agent for the offering. In consideration for services rendered as the placement agent in the offering, we agreed to (i) pay to the placement agent cash commissions equal to $1,330,000, or 7.0% of the gross proceeds received in the offering; (ii) issue to the placement agent a five-year warrant to purchase up to 31,666 shares of our common stock (representing 2% of the shares sold in the Private Placement) with an exercise price of $15.00 per share and other terms that are the same as the terms of the warrants issued in the Private Placement; and (iii) reimburse the placement agent for reasonable out-of-pocket expenses, including fees paid to the placement agent’s legal counsel, incurred in connection with the offering, which reimbursable expenses shall not exceed $125,000. 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 were 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 1,383,333 shares of our common stock at a price per share of $6.00 for aggregate gross proceeds of approximately $8.3 million; and (ii) issued to the investors warrants to purchase up to an aggregate of 691,656 shares of our common stock with an exercise price of $9.00 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 500,000 shares of common stock and warrants to purchase an aggregate of 250,000 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. | |||||||||
The Offering required the repricing and issuance of additional common stock warrants to the holders of warrants issued in the February 2012 common stock and warrant sale. The exercise price of the warrants decreased from $15.00 per share to $12.96 per share and the number of shares issuable upon exercise of the warrants increased from 948,333 to 1,097,600. | |||||||||
Common Stock Warrants. | |||||||||
During the six months ended June 30, 2014 and 2013, we issued warrants to purchase 115,065 and 691,656 shares of common stock, respectively. None of the issued warrants were exercised during such periods. The warrants issued in 2014 were issued due to repricing requirements contained in the warrants issued in the private placement in 2013. The warrants issued in 2013 were issued in connection with the sales of common stock on January 24, 2013. Warrants to purchase an aggregate of 2,335,348 shares of common stock were outstanding at June 30, 2014. | |||||||||
Warrant Holder | Issue Year | Expiration | Underlying | Exercise | |||||
Shares | Price | ||||||||
Affiliates of Third Security, LLC(1) | 2010 | Dec-15 | 431,027 | $6.96 | |||||
Various Institutional Holders(2) | 2012 | Feb-17 | 1,052,820 | $11.73 | |||||
Affiliates of Third Security, LLC(2) | 2012 | Feb-17 | 159,845 | $11.73 | |||||
Various Institutional Holders(3) | 2013 | Jan-18 | 441,656 | $9.00 | |||||
Affiliates of Third Security, LLC(3) | 2013 | Jan-18 | 250,000 | $9.00 | |||||
2,335,348 | |||||||||
-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 completed in February 2012 and are classified as a liability in our financial statements. See Footnote 9 - Fair Value. These warrants also contain certain anti-dilution provisions that provide for an adjustment to the exercise price and number of shares issuable upon exercise of the warrant in the event that we engage in certain issuances of shares of our common stock at a price lower than the exercise price of the warrant. | ||||||||
-3 | These warrants were issued in connection with the Offering, which was completed in January 2013. | ||||||||
Issuance of Series B Preferred Stock | |||||||||
On March 5, 2014, we entered into a Series B Convertible Preferred Stock Purchase Agreement (the “Series B Purchase Agreement”) with affiliates of Third Security, LLC (the “2014 Third Security Investors”), pursuant to which we, in a private placement, sold and issued an aggregate of 1,443,297 shares of our Series B Preferred Stock, par value $0.01 per share (the “Series B Preferred Stock”) at a price per share of $4.85 for an aggregate purchase price of approximately $7.0 million. Each share of Series B Preferred Stock issued pursuant to the Series B Purchase Agreement is initially convertible into shares of our common stock at a rate of 1-for-1, which conversion rate is subject to further adjustment as set forth in the Certificate of Designation of Series B Convertible Preferred Stock. | |||||||||
In connection with the Series B financing, we also entered into a Registration Rights Agreement, dated March 5, 2014, with the 2014 Third Security Investors, pursuant to which we granted certain demand, “piggy-back” and S-3 registrations rights covering the resale of the shares of common stock underlying the Series B Preferred Stock issued pursuant to the Series B Purchase Agreement and all shares of common stock issuable upon any dividend or other distribution with respect thereto. | |||||||||
The Series B financing required the repricing and issuance of additional common stock warrants to the holders of warrants issued in the February 2012 common stock and warrant sale. The exercise price of the warrants decreased from $12.96 per share to $11.73 per share and the number of shares issuable upon exercise of the warrants increased from 1,097,600 to 1,212,665. |
FAIR_VALUE
FAIR VALUE | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Fair Value Disclosures [Abstract] | ' | ||||||||
Fair Value | ' | ||||||||
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 3 liability for which book value approximates fair market value due to the variable interest rate it bears. | |||||||||
Common Stock Warrant Liability. | |||||||||
Certain of our issued and outstanding warrants to purchase shares of 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 1.2 million warrants issued in February 2012. 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 valuing 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 $3.74 as of June 30, 2014; the amount of the down-round financing; the timing of the down-round financing; the expected exercise period of 2.61 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 55% and the risk-free interest rate of 0.68% based on the 2.5-year U.S. Treasury yield interpolated from the two-year and three-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 that 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 the three months ended June 30, 2014 and 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 | |||||||||
June 30, 2014 | June 30, 2013 | ||||||||
Beginning balance at April 1 | $ | 550 | $ | 500 | |||||
Total gains or losses: | |||||||||
Recognized in earnings | (200 | ) | (200 | ) | |||||
Balance at June 30 | $ | 350 | $ | 300 | |||||
During the six months ended June 30, 2014 and 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 Six Months Ended | |||||||||
June 30, 2014 | June 30, 2013 | ||||||||
Beginning balance at January 1 | $ | 600 | $ | 900 | |||||
Total gains or losses: | |||||||||
Recognized in earnings | (250 | ) | (600 | ) | |||||
Balance at June 30 | $ | 350 | $ | 300 | |||||
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 | 6 Months Ended | ||||||
Jun. 30, 2014 | |||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ||||||
Stock Options | ' | ||||||
STOCK OPTIONS | |||||||
Stock Options. | |||||||
The following table summarizes stock option activity during the six months ended June 30, 2014: | |||||||
Number of | Weighted-Average | ||||||
Options | Exercise Price | ||||||
Balance at January 1, 2014 | 565,028 | $ | 7.19 | ||||
Granted | 214,296 | 5.47 | |||||
Forfeited | (47,559 | ) | 5.07 | ||||
Expired | (545 | ) | 14.28 | ||||
Balance at June 30, 2014 | 731,220 | $ | 6.82 | ||||
Exercisable at June 30, 2014 | 194,663 | $ | 11.03 | ||||
During the six months ended June 30, 2014, we granted options to purchase 214,296 shares of our common stock at a weighted-average exercise price of $5.47 per share under our 2006 Equity Incentive Plan (the “Plan”). Options to purchase an aggregate of 159,375 shares of our common stock were granted during the six months ended June 30, 2013. | |||||||
As of June 30, 2014, there were 731,220 options exercisable or expected to vest with an aggregate intrinsic value of zero. | |||||||
Stock Appreciation Rights (“SARs”) | |||||||
The following table summarizes SARs activity under the Plan during the six months ended June 30, 2014: | |||||||
Number of | Weighted-Average | ||||||
Options | Exercise Price | ||||||
Balance at January 1, 2014 | 138,333 | $ | 4.32 | ||||
Balance at June 30, 2014 | 138,333 | $ | 4.32 | ||||
Exercisable at June 30, 2014 | — | $ | — | ||||
All SARs outstanding were issued solely to our executive officers. | |||||||
As of June 30, 2014, 138,333 shares subject to outstanding SARs were expected to vest. The weighted-average exercise price of these SARs was $4.32 and the aggregate intrinsic value was zero. |
OPERATING_SEGMENT_AND_GEOGRAPH
OPERATING SEGMENT AND GEOGRAPHIC INFORMATION | 6 Months Ended | |||||||||||||||
Jun. 30, 2014 | ||||||||||||||||
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. | ||||||||||||||||
We have two complementary reportable operating segments, Laboratory Services and Genetic Assays and Platforms. | ||||||||||||||||
Segment information for the three months ended June 30, 2014 and 2013 is as follows: | ||||||||||||||||
Dollars in Thousands | ||||||||||||||||
Three Months Ended June 30, 2014 | ||||||||||||||||
Laboratory Services | Genetic Assays | Total | ||||||||||||||
and Platforms | ||||||||||||||||
Net Sales | $ | 3,843 | $ | 2,921 | $ | 6,764 | ||||||||||
Gross Profit | 1,490 | 903 | 2,393 | |||||||||||||
Net Loss before Taxes | (3,277 | ) | (624 | ) | (3,901 | ) | ||||||||||
Income Tax Expense (Benefit) | 40 | (48 | ) | (8 | ) | |||||||||||
Net Loss | $ | (3,317 | ) | $ | (576 | ) | $ | (3,893 | ) | |||||||
Depreciation/Amortization | $ | 438 | $ | 50 | $ | 488 | ||||||||||
Interest Expense, net | $ | 83 | $ | 63 | $ | 146 | ||||||||||
30-Jun-14 | ||||||||||||||||
Total Assets | $ | 23,370 | $ | 7,721 | $ | 31,091 | ||||||||||
Dollars in Thousands | ||||||||||||||||
Three Months Ended June 30, 2013 | ||||||||||||||||
Laboratory Services | Genetic Assays | Total | ||||||||||||||
and Platforms | ||||||||||||||||
Net Sales | $ | 4,012 | $ | 3,294 | $ | 7,306 | ||||||||||
Gross Profit | 1,853 | 1,120 | 2,973 | |||||||||||||
Net Loss before Taxes | (2,181 | ) | (692 | ) | (2,873 | ) | ||||||||||
Income Tax Expense | — | (6 | ) | (6 | ) | |||||||||||
Net Loss | $ | (2,181 | ) | $ | (686 | ) | $ | (2,867 | ) | |||||||
Depreciation/Amortization | $ | 646 | $ | 41 | $ | 687 | ||||||||||
Interest Expense, net | $ | 84 | $ | 67 | $ | 151 | ||||||||||
30-Jun-13 | ||||||||||||||||
Total Assets | $ | 27,834 | $ | 11,529 | $ | 39,363 | ||||||||||
Segment information for the six months ended June 30, 2014 and 2013 is as follows: | ||||||||||||||||
Dollars in Thousands | ||||||||||||||||
Six Months Ended June 30, 2014 | ||||||||||||||||
Laboratory Services | Genetic Assays | Total | ||||||||||||||
and Platforms | ||||||||||||||||
Net Sales | $ | 7,531 | $ | 5,484 | $ | 13,015 | ||||||||||
Gross Profit | 3,122 | 1,765 | 4,887 | |||||||||||||
Net Loss before Taxes | (6,261 | ) | (1,311 | ) | (7,572 | ) | ||||||||||
Income Tax Expense (Benefit) | 549 | (52 | ) | 497 | ||||||||||||
Net Loss | $ | (6,810 | ) | $ | (1,259 | ) | $ | (8,069 | ) | |||||||
Depreciation/Amortization | $ | 878 | $ | 103 | $ | 981 | ||||||||||
Interest Expense, net | $ | 190 | $ | 138 | $ | 328 | ||||||||||
Dollars in Thousands | ||||||||||||||||
Six Months Ended June 30, 2013 | ||||||||||||||||
Laboratory Services | Genetic Assays | Total | ||||||||||||||
and Platforms | ||||||||||||||||
Net Sales | $ | 8,439 | $ | 6,241 | $ | 14,680 | ||||||||||
Gross Profit | 4,046 | 2,182 | 6,228 | |||||||||||||
Net Loss before Taxes | (5,267 | ) | (1,127 | ) | (6,394 | ) | ||||||||||
Income Tax Expense (Benefit) | — | 60 | 60 | |||||||||||||
Net Loss | $ | (5,267 | ) | $ | (1,187 | ) | $ | (6,454 | ) | |||||||
Depreciation/Amortization | $ | 1,209 | $ | 222 | $ | 1,431 | ||||||||||
Interest Expense, net | $ | 219 | $ | 85 | $ | 304 | ||||||||||
Net sales for the three and six months ended June 30, 2014 and 2013 by country were as follows: | ||||||||||||||||
Dollars in Thousands | Dollars in Thousands | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
United States | $ | 4,870 | $ | 5,797 | $ | 9,633 | $ | 11,146 | ||||||||
Italy | 337 | 372 | 722 | 827 | ||||||||||||
All Other Countries | 1,557 | 1,137 | 2,660 | 2,707 | ||||||||||||
Total | $ | 6,764 | $ | 7,306 | $ | 13,015 | $ | 14,680 | ||||||||
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 | 6 Months Ended |
Jun. 30, 2014 | |
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 July 1, 2014, the Collaboration Agreement, dated October 9, 2013, between Transgenomic and PDI, Inc., a Delaware corporation d/b/a Interpace Diagnostics for the promotion of our CardioPredict test expired automatically pursuant to its terms upon the parties’ completion of phase one under the agreement. Our management believes that the test continues to have good commercial potential and is evaluating commercialization options. | |
On July 1, 2014, we entered into a Surveyor Kit Patent, Technology, and Inventory Purchase Agreement (the “Purchase Agreement”) with Integrated DNA Technologies, Inc. (“IDT”). Pursuant to the Purchase Agreement, on July 1, 2014, we transferred and sold to IDT all of our right, title and interest in and to our Surveyor Kits product line and related technology, including, without limitation, all patents, patent applications, licenses, technology, know-how and trademarks relating to the Surveyor Kits product line technology, and our inventory of Surveyor products (collectively, the “Surveyor Technology”). | |
In consideration for the purchase of the Surveyor Technology, IDT paid us an initial payment of $3.65 million. As additional consideration, IDT will pay us an additional amount equal to an aggregate of $600,000 in four equal installments, the first of which must be made by October 1, 2014, and the last of which must be made by July 1, 2015. Additionally, if net sales of the Surveyor Kits by IDT exceed a certain threshold during the period beginning on October 1, 2014 and ending on September 30, 2015, IDT will be obligated to pay us an additional earn-out payment equal to a percentage of the net sales exceeding the threshold that is in the middle double digits. | |
Pursuant to the Purchase Agreement, IDT granted us a worldwide, irrevocable, exclusive, fully paid-up, royalty-free, transferable right and license to the Surveyor Technology for clinical uses, including, without limitation, the provision of diagnostic and pharmaceutical services, and any other clinical uses in connection with our biomarker identification business unit. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended | |
Jun. 30, 2014 | ||
Accounting Policies [Abstract] | ' | |
Basis of Presentation | ' | |
Basis of Presentation. | ||
The condensed consolidated balance sheet as of December 31, 2013 was derived from our audited balance sheet as of that date. The accompanying condensed consolidated financial statements as of and for the three and six months ended June 30, 2014 and 2013 are unaudited and reflect all adjustments (consisting of only normal recurring 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, 2013 contained in our Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 27, 2014. The results of operations for the interim periods presented are not necessarily indicative of the results for the entire year. | ||
Following approval of our stockholders, on January 15, 2014, our Board of Directors approved a reverse split of our common stock, par value $0.01, at a ratio of one-for-twelve. This reverse stock split became effective on January 27, 2014 and, unless otherwise indicated, all share amounts, per share data, share prices, exercise prices and conversion rates set forth in these notes and the accompanying consolidated financial statements have, where applicable, been adjusted retroactively to reflect this reverse stock split. | ||
Principles of Consolidation | ' | |
Principles of Consolidation. | ||
The consolidated financial statements include the accounts of Transgenomic, Inc. and our 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 in 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 period amounts of selling, general and administrative expenses have been reclassified to cost of goods sold in order to conform to the current period presentation. These reclassifications had no effect on previously reported net earnings | ||
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 June 30, 2014. | ||
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 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 six months ended June 30, 2014 that would require an impairment analysis prior to our scheduled review. | ||
Stock Based Compensation | ' | |
Stock-Based Compensation. | ||
All stock-based awards 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 June 30, 2014 had vesting periods of one or three years from the date of grant. None of the stock options outstanding at June 30, 2014 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. Compensation expense is based on the calculated fair value of the awards as measured at the grant date and is expensed over the service period of the awards. | ||
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. | |
For our Laboratory Services segment, net sales from Patient Testing labs are recognized on an individual test basis and take place when the test report is completed, reviewed and sent to the client less the reserve for insurance, Medicare and Medicaid contractual adjustments. There are no deferred net sales associated with our Patient Testing services. Adjustments to the allowances, based on actual receipts from third party payors, are reflected in the estimated contractual allowance applied prospectively. In our Biomarker Identification labs, we perform services on a project by project basis. When we receive payment in advance, we recognize revenue when we deliver the service. These projects typically do not extend beyond one year. At June 30, 2014 and December 31, 2013, deferred net sales associated with pharmacogenomics research projects, included in the balance sheet in deferred revenue was $0.3 million and $0.2 million, respectively. | ||
Net sales of products in our Genetic Assays and Platforms 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 cover specific time periods, and net sales associated with these contracts are deferred and recognized ratably over the service period. At each of June 30, 2014 and December 31, 2013, deferred net revenue associated with our service contracts was $0.9 million and was included in the balance sheet in deferred revenue. | ||
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 British Pound Sterling, which is the local currency of the country in which it is located, 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 period. 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 April 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, which changes the criteria for reporting a discontinued operation. Under this standard, a disposal of part of an organization that has a major effect on its operations and financial results is a discontinued operation. This guidance is effective prospectively for us beginning January 1, 2015 with earlier application permitted, but only for disposals (or classifications as held for sale) that have not been reported previously. When adopted, we do not expect that this guidance will have a material impact on our financial condition, results of operations or cash flows. | ||
In May 2014, the FASB issued ASU 2014-09 “Revenue from Contracts with Customers”. The guidance requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to a customer. The ASU will replace most existing revenue recognition guidance in generally accepted accounting principles in the U.S. when it becomes effective on January 1, 2017. Early application is not permitted, but the standard permits the use of either the retrospective or cumulative effect transition method. We have not selected a transition method and are currently evaluating the impact this guidance will have on our financial condition, results of operations and cash flows. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended | |||||||||||||||
Jun. 30, 2014 | ||||||||||||||||
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 six months ended June 30, 2014 and 2013: | ||||||||||||||||
Dollars in Thousands | ||||||||||||||||
Beginning | Provision | Write-Offs | Ending | |||||||||||||
Balance | Balance | |||||||||||||||
Three Months Ended June 30, 2014 | $ | 3,540 | $ | 850 | $ | (349 | ) | $ | 4,041 | |||||||
Three Months Ended June 30, 2013 | $ | 2,549 | $ | 608 | $ | (795 | ) | $ | 2,362 | |||||||
Six Months Ended June 30, 2014 | $ | 3,838 | $ | 1,523 | $ | (1,320 | ) | $ | 4,041 | |||||||
Six Months Ended June 30, 2013 | $ | 2,171 | $ | 2,197 | $ | (2,006 | ) | $ | 2,362 | |||||||
Allowance for obsolete inventory rollforward | ' | |||||||||||||||
The following is a summary of activity for the allowance for obsolete inventory during the three and six months ended June 30, 2014 and 2013: | ||||||||||||||||
Dollars in Thousands | ||||||||||||||||
Beginning | Provision | Write-Offs | Ending | |||||||||||||
Balance | Balance | |||||||||||||||
Three Months Ended June 30, 2014 | $ | 849 | $ | — | $ | (6 | ) | $ | 843 | |||||||
Three Months Ended June 30, 2013 | $ | 611 | $ | — | $ | (18 | ) | $ | 593 | |||||||
Six Months Ended June 30, 2014 | $ | 799 | $ | 55 | $ | (11 | ) | $ | 843 | |||||||
Six Months Ended June 30, 2013 | $ | 616 | $ | — | $ | (23 | ) | $ | 593 | |||||||
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) | 6 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Inventory Disclosure [Abstract] | ' | |||||||
Inventories | ' | |||||||
Inventories (net of allowance for obsolescence) consisted of the following: | ||||||||
Dollars in Thousands | ||||||||
June 30, | December 31, | |||||||
2014 | 2013 | |||||||
Finished goods | $ | 2,967 | $ | 2,978 | ||||
Raw materials and work in process | 1,663 | 1,567 | ||||||
Demonstration inventory | 222 | 211 | ||||||
$ | 4,852 | $ | 4,756 | |||||
Less allowance for obsolescence | (843 | ) | (799 | ) | ||||
Total | $ | 4,009 | $ | 3,957 | ||||
INTANGIBLES_AND_OTHER_ASSETS_T
INTANGIBLES AND OTHER ASSETS (Tables) | 6 Months Ended | |||||||||||||||||||||||
Jun. 30, 2014 | ||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | |||||||||||||||||||||||
Schedule of Indefinite-Lived and Finite-Lived Intangible Assets | ' | |||||||||||||||||||||||
Long-lived intangible assets and other assets consisted of the following: | ||||||||||||||||||||||||
Dollars in Thousands | ||||||||||||||||||||||||
June 30, 2014 | 31-Dec-13 | |||||||||||||||||||||||
Cost | Accumulated | Net Book | Cost | Accumulated | Net Book | |||||||||||||||||||
Amortization | Value | Amortization | Value | |||||||||||||||||||||
Intangibles—technology | $ | 9,009 | $ | 3,586 | $ | 5,423 | $ | 9,009 | $ | 3,175 | $ | 5,834 | ||||||||||||
Intangibles—assay royalties | 1,434 | 717 | 717 | 1,434 | 614 | 820 | ||||||||||||||||||
Intangibles—third party payor relationships | 367 | 86 | 281 | 367 | 73 | 294 | ||||||||||||||||||
Intangibles—tradenames and trademarks | 824 | 292 | 532 | 824 | 233 | 591 | ||||||||||||||||||
Intangibles—customer relationships | 652 | 76 | 576 | 652 | 54 | 598 | ||||||||||||||||||
Intangibles—covenants not to compete | 184 | 107 | 77 | 184 | 77 | 107 | ||||||||||||||||||
Patents | 1,216 | 372 | 844 | 1,153 | 336 | 817 | ||||||||||||||||||
Intellectual property | 266 | 51 | 215 | 170 | 36 | 134 | ||||||||||||||||||
$ | 13,952 | $ | 5,287 | $ | 8,665 | $ | 13,793 | $ | 4,598 | $ | 9,195 | |||||||||||||
Estimated Useful Life | ||||||||||||||||||||||||
Technology | 7-10 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 |
DEBT_Tables
DEBT (Tables) | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Debt Disclosure [Abstract] | ' | ||||||||
Schedule of Debt | ' | ||||||||
Dollars in Thousands | |||||||||
June 30, 2014 | December 31, 2013 | ||||||||
Revolving Line of Credit(1) | $ | 3,000 | $ | 2,560 | |||||
Term Loan(2) | 3,902 | 4,000 | |||||||
Total debt, including short-term debt | 6,902 | 6,560 | |||||||
Current maturities of long-term debt | (691 | ) | (242 | ) | |||||
Long-term debt, net of current maturities | $ | 6,211 | $ | 6,318 | |||||
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 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, and for general corporate and working capital purposes. | |||||||||
On August 2, 2013, we entered into an amendment to the Loan Agreement (the “Amendment”). The Amendment, which became effective as of June 30, 2013, reduced our future minimum revenue covenants under the Loan Agreement and modifies the interest rates applicable to the amounts advanced under the Revolving Line. | |||||||||
On November 14, 2013, we entered into a second amendment to the Loan Agreement (the “Second Amendment”). The Second Amendment, which became effective as of October 31, 2013, reduced our future minimum revenue covenants under the Loan Agreement. | |||||||||
On January 27, 2014, we entered into a third amendment to the Loan Agreement (the “Third Amendment”). Pursuant to the Third Amendment, the Lenders agreed to waive certain events of default under the Loan Agreement, and the parties amended certain provisions of the Loan Agreement, including the minimum liquidity ratio that we must maintain during the term of the Loan Agreement. | |||||||||
On March 3, 2014, we entered into a fourth amendment to the Loan Agreement (the “Fourth Amendment”). The Fourth Amendment provides that we will not be required to make any principal or interest payments under the Term Loan for the period from March 1, 2014 through March 31, 2015. Accordingly, pursuant to the Loan Agreement as amended by the Fourth Amendment, the next principal and interest payment under the Term Loan will be due on April 1, 2015. The interest on the debt that is being deferred, and not paid, is being capitalized as part of the Term Loan. As of June 30, 2014, the amount of interest that has been capitalized is $0.1 million. | |||||||||
-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. 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%. The current interest rate is 6.25%. 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. Pursuant to the terms of the Loan Agreement, as amended by the Fourth Amendment, we are required to make monthly payments of principal and interest to the Lenders commencing on April 1, 2015. 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. As of June 30, 2014, we were in compliance with all financial covenants. | |||||||||
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. |
STOCKHOLDERS_EQUITY_Tables
STOCKHOLDERS' EQUITY (Tables) | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Stockholders' Equity Note [Abstract] | ' | ||||||||
Schedule of Stockholders' Equity Note, Warrants or Rights | ' | ||||||||
Warrants to purchase an aggregate of 2,335,348 shares of common stock were outstanding at June 30, 2014. | |||||||||
Warrant Holder | Issue Year | Expiration | Underlying | Exercise | |||||
Shares | Price | ||||||||
Affiliates of Third Security, LLC(1) | 2010 | Dec-15 | 431,027 | $6.96 | |||||
Various Institutional Holders(2) | 2012 | Feb-17 | 1,052,820 | $11.73 | |||||
Affiliates of Third Security, LLC(2) | 2012 | Feb-17 | 159,845 | $11.73 | |||||
Various Institutional Holders(3) | 2013 | Jan-18 | 441,656 | $9.00 | |||||
Affiliates of Third Security, LLC(3) | 2013 | Jan-18 | 250,000 | $9.00 | |||||
2,335,348 | |||||||||
-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 completed in February 2012 and are classified as a liability in our financial statements. See Footnote 9 - Fair Value. These warrants also contain certain anti-dilution provisions that provide for an adjustment to the exercise price and number of shares issuable upon exercise of the warrant in the event that we engage in certain issuances of shares of our common stock at a price lower than the exercise price of the warrant. | ||||||||
-3 | These warrants were issued in connection with the Offering, which was completed in January 2013. |
FAIR_VALUE_Tables
FAIR VALUE (Tables) | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Fair Value Disclosures [Abstract] | ' | ||||||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | ' | ||||||||
During the three months ended June 30, 2014 and 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 | |||||||||
June 30, 2014 | June 30, 2013 | ||||||||
Beginning balance at April 1 | $ | 550 | $ | 500 | |||||
Total gains or losses: | |||||||||
Recognized in earnings | (200 | ) | (200 | ) | |||||
Balance at June 30 | $ | 350 | $ | 300 | |||||
During the six months ended June 30, 2014 and 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 Six Months Ended | |||||||||
June 30, 2014 | June 30, 2013 | ||||||||
Beginning balance at January 1 | $ | 600 | $ | 900 | |||||
Total gains or losses: | |||||||||
Recognized in earnings | (250 | ) | (600 | ) | |||||
Balance at June 30 | $ | 350 | $ | 300 | |||||
STOCK_OPTIONS_Tables
STOCK OPTIONS (Tables) | 6 Months Ended | ||||||
Jun. 30, 2014 | |||||||
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 six months ended June 30, 2014: | |||||||
Number of | Weighted-Average | ||||||
Options | Exercise Price | ||||||
Balance at January 1, 2014 | 565,028 | $ | 7.19 | ||||
Granted | 214,296 | 5.47 | |||||
Forfeited | (47,559 | ) | 5.07 | ||||
Expired | (545 | ) | 14.28 | ||||
Balance at June 30, 2014 | 731,220 | $ | 6.82 | ||||
Exercisable at June 30, 2014 | 194,663 | $ | 11.03 | ||||
Schedule of Other Share-based Compensation, Activity | ' | ||||||
The following table summarizes SARs activity under the Plan during the six months ended June 30, 2014: | |||||||
Number of | Weighted-Average | ||||||
Options | Exercise Price | ||||||
Balance at January 1, 2014 | 138,333 | $ | 4.32 | ||||
Balance at June 30, 2014 | 138,333 | $ | 4.32 | ||||
Exercisable at June 30, 2014 | — | $ | — | ||||
OPERATING_SEGMENT_AND_GEOGRAPH1
OPERATING SEGMENT AND GEOGRAPHIC INFORMATION (Tables) | 6 Months Ended | |||||||||||||||
Jun. 30, 2014 | ||||||||||||||||
Segment Reporting [Abstract] | ' | |||||||||||||||
Schedule of Segment Reporting Information, by Segment | ' | |||||||||||||||
Segment information for the three months ended June 30, 2014 and 2013 is as follows: | ||||||||||||||||
Dollars in Thousands | ||||||||||||||||
Three Months Ended June 30, 2014 | ||||||||||||||||
Laboratory Services | Genetic Assays | Total | ||||||||||||||
and Platforms | ||||||||||||||||
Net Sales | $ | 3,843 | $ | 2,921 | $ | 6,764 | ||||||||||
Gross Profit | 1,490 | 903 | 2,393 | |||||||||||||
Net Loss before Taxes | (3,277 | ) | (624 | ) | (3,901 | ) | ||||||||||
Income Tax Expense (Benefit) | 40 | (48 | ) | (8 | ) | |||||||||||
Net Loss | $ | (3,317 | ) | $ | (576 | ) | $ | (3,893 | ) | |||||||
Depreciation/Amortization | $ | 438 | $ | 50 | $ | 488 | ||||||||||
Interest Expense, net | $ | 83 | $ | 63 | $ | 146 | ||||||||||
30-Jun-14 | ||||||||||||||||
Total Assets | $ | 23,370 | $ | 7,721 | $ | 31,091 | ||||||||||
Dollars in Thousands | ||||||||||||||||
Three Months Ended June 30, 2013 | ||||||||||||||||
Laboratory Services | Genetic Assays | Total | ||||||||||||||
and Platforms | ||||||||||||||||
Net Sales | $ | 4,012 | $ | 3,294 | $ | 7,306 | ||||||||||
Gross Profit | 1,853 | 1,120 | 2,973 | |||||||||||||
Net Loss before Taxes | (2,181 | ) | (692 | ) | (2,873 | ) | ||||||||||
Income Tax Expense | — | (6 | ) | (6 | ) | |||||||||||
Net Loss | $ | (2,181 | ) | $ | (686 | ) | $ | (2,867 | ) | |||||||
Depreciation/Amortization | $ | 646 | $ | 41 | $ | 687 | ||||||||||
Interest Expense, net | $ | 84 | $ | 67 | $ | 151 | ||||||||||
30-Jun-13 | ||||||||||||||||
Total Assets | $ | 27,834 | $ | 11,529 | $ | 39,363 | ||||||||||
Segment information for the six months ended June 30, 2014 and 2013 is as follows: | ||||||||||||||||
Dollars in Thousands | ||||||||||||||||
Six Months Ended June 30, 2014 | ||||||||||||||||
Laboratory Services | Genetic Assays | Total | ||||||||||||||
and Platforms | ||||||||||||||||
Net Sales | $ | 7,531 | $ | 5,484 | $ | 13,015 | ||||||||||
Gross Profit | 3,122 | 1,765 | 4,887 | |||||||||||||
Net Loss before Taxes | (6,261 | ) | (1,311 | ) | (7,572 | ) | ||||||||||
Income Tax Expense (Benefit) | 549 | (52 | ) | 497 | ||||||||||||
Net Loss | $ | (6,810 | ) | $ | (1,259 | ) | $ | (8,069 | ) | |||||||
Depreciation/Amortization | $ | 878 | $ | 103 | $ | 981 | ||||||||||
Interest Expense, net | $ | 190 | $ | 138 | $ | 328 | ||||||||||
Dollars in Thousands | ||||||||||||||||
Six Months Ended June 30, 2013 | ||||||||||||||||
Laboratory Services | Genetic Assays | Total | ||||||||||||||
and Platforms | ||||||||||||||||
Net Sales | $ | 8,439 | $ | 6,241 | $ | 14,680 | ||||||||||
Gross Profit | 4,046 | 2,182 | 6,228 | |||||||||||||
Net Loss before Taxes | (5,267 | ) | (1,127 | ) | (6,394 | ) | ||||||||||
Income Tax Expense (Benefit) | — | 60 | 60 | |||||||||||||
Net Loss | $ | (5,267 | ) | $ | (1,187 | ) | $ | (6,454 | ) | |||||||
Depreciation/Amortization | $ | 1,209 | $ | 222 | $ | 1,431 | ||||||||||
Interest Expense, net | $ | 219 | $ | 85 | $ | 304 | ||||||||||
Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas | ' | |||||||||||||||
Net sales for the three and six months ended June 30, 2014 and 2013 by country were as follows: | ||||||||||||||||
Dollars in Thousands | Dollars in Thousands | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
United States | $ | 4,870 | $ | 5,797 | $ | 9,633 | $ | 11,146 | ||||||||
Italy | 337 | 372 | 722 | 827 | ||||||||||||
All Other Countries | 1,557 | 1,137 | 2,660 | 2,707 | ||||||||||||
Total | $ | 6,764 | $ | 7,306 | $ | 13,015 | $ | 14,680 | ||||||||
BUSINESS_DESCRIPTION_Details
BUSINESS DESCRIPTION (Details) | 6 Months Ended |
Jun. 30, 2014 | |
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 | 6 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Allowance for Doubtful Accounts Receivable [Roll Forward] | ' | ' | ' | ' |
Beginning balance | $3,540 | $2,549 | $3,838 | $2,171 |
Provision | 850 | 608 | 1,523 | 2,197 |
Write-Offs | -349 | -795 | -1,320 | -2,006 |
Ending balance | $4,041 | $2,362 | $4,041 | $2,362 |
Accounts receivable, general payment terms1 | ' | ' | '30 days | ' |
Accounts receivable, international extended payment terms greater than1 | ' | ' | '90 days | ' |
SUMMARY_OF_SIGNIFICANT_ACCOUNT4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Inventories (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Obsolete Inventory [Roll Forward] | ' | ' | ' | ' |
Beginning balance | $849 | $611 | $799 | $616 |
Provision | 0 | 0 | 55 | 0 |
Write-Offs | -6 | -18 | -11 | -23 |
Ending balance | $843 | $593 | $843 | $593 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Property, Plant and Equipment (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Property, Plant and Equipment [Line Items] | ' | ' | ' | ' |
Depreciation expense | $0.10 | $0.20 | $0.20 | $0.30 |
Depreciation expense, capital leases | $0.10 | $0.10 | ' | $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 | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jan. 27, 2014 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' | ' |
Depreciation | ' | $100,000 | $200,000 | $200,000 | $300,000 | ' |
Stock split, conversion ratio | 0.0833 | ' | ' | ' | ' | ' |
Common stock, par value (in dollars per share) | ' | $0.01 | ' | $0.01 | ' | $0.01 |
Share-based compensation arrangement by share-based payment award, expiration period | ' | ' | ' | '10 years | ' | ' |
Unvested stock options, unrecognized compensation expense weighted average recognition period | ' | ' | ' | '1 year 6 months | ' | ' |
Stock-based compensation | ' | ' | ' | 637,000 | 162,000 | ' |
Employee service share-based compensation, nonvested awards, total compensation cost not yet recognized, stock options | ' | 1,400,000 | ' | 1,400,000 | ' | ' |
Stock options, granted | ' | 15,499 | ' | ' | 159,375 | ' |
Stock options, fair value assumptions, risk free interest rate | ' | 1.74% | ' | ' | ' | ' |
Stock options, fair value assumptions, dividend yield | ' | 0.00% | ' | ' | ' | ' |
Stock options, fair value assumptions, expected life | ' | '4 years 4 months 17 days | ' | ' | ' | ' |
Stock options, fair value assumptions, historical volatility rate | ' | 83.00% | ' | ' | ' | ' |
Common stock rights issued | ' | ' | ' | 115,065 | 691,656 | ' |
Deferred revenue | ' | 1,212,000 | ' | 1,212,000 | ' | 1,088,000 |
Foreign currency translation adjustment, net of tax | ' | 22,000 | 0 | 34,000 | -173,000 | -45,000 |
Foreign currency transaction gain (loss), realized | ' | ' | ' | -100,000 | 100,000 | ' |
Options, warrants and conversion rights, common stock callable and antidilutive (in shares) | ' | ' | ' | 5,510,255 | 3,334,055 | ' |
CEO | ' | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' | ' |
Stock options, unvested options, vesting period | ' | ' | ' | '3 years | ' | ' |
Common stock rights issued | ' | ' | ' | 83,333 | ' | ' |
Share-based compensation arrangement by share-based payment award, fair value assumptions, exercise price | ' | $4.32 | ' | $4.32 | ' | ' |
CFO | ' | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' | ' |
Common stock rights issued | ' | ' | ' | 55,000 | ' | ' |
Pharmacogenomic services | ' | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' | ' |
Deferred revenue | ' | 300,000 | ' | 300,000 | ' | 200,000 |
Diagnostic tools | ' | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' | ' |
Deferred revenue | ' | 900,000 | ' | 900,000 | ' | 900,000 |
Additional Paid-in Capital (1) | Selling, General and Administrative Expenses [Member] | ' | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' | ' |
Stock-based compensation | ' | ' | ' | 600,000 | 200,000 | ' |
Accumulated Other Comprehensive Income | ' | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' | ' |
Foreign currency translation adjustment, net of tax | ' | ' | ' | $34,000 | ($200,000) | ($45,000) |
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 | ' | ' |
INVENTORIES_Details
INVENTORIES (Details) (USD $) | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||||||
Inventory Disclosure [Abstract] | ' | ' | ' | ' | ' | ' |
Finished goods | $2,967 | ' | $2,978 | ' | ' | ' |
Raw materials and work in process | 1,663 | ' | 1,567 | ' | ' | ' |
Demonstration inventory | 222 | ' | 211 | ' | ' | ' |
Inventory, gross | 4,852 | ' | 4,756 | ' | ' | ' |
Less allowance for obsolescence | -843 | -849 | -799 | -593 | -611 | -616 |
Inventories, net | $4,009 | ' | $3,957 | ' | ' | ' |
INTANGIBLES_AND_OTHER_ASSETS_D
INTANGIBLES AND OTHER ASSETS (Details) (USD $) | 3 Months Ended | 6 Months Ended | 6 Months Ended | 12 Months Ended | 6 Months Ended | 6 Months Ended | 6 Months Ended | 6 Months Ended | 6 Months Ended | 6 Months Ended | ||||||||||||||||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | |||
Service life | Acquired technology | Acquired technology | Acquired technology | Acquired technology | Assay royalties | Assay royalties | Third party payor relationships | Third party payor relationships | Tradenames and trademarks | Tradenames and trademarks | Customer relationships | Customer relationships | Covenants not to compete | Covenants not to compete | Patents | Patents | Intellectual property | Intellectual property | ||||||||
Minimum | Maximum | |||||||||||||||||||||||||
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Finite-lived intangible assets, cost | $13,952,000 | ' | $13,952,000 | ' | $13,793,000 | ' | $9,009,000 | $9,009,000 | ' | ' | $1,434,000 | $1,434,000 | $367,000 | $367,000 | $824,000 | $824,000 | $652,000 | $652,000 | $184,000 | $184,000 | $1,216,000 | $1,153,000 | $266,000 | $170,000 | ||
Finite-lived intangible assets, accumulated amortization | 5,287,000 | ' | 5,287,000 | ' | 4,598,000 | ' | 3,586,000 | 3,175,000 | ' | ' | 717,000 | 614,000 | 86,000 | 73,000 | 292,000 | 233,000 | 76,000 | 54,000 | 107,000 | 77,000 | 372,000 | 336,000 | 51,000 | 36,000 | ||
Finite-lived intangible assets, net book value | 8,665,000 | ' | 8,665,000 | ' | 9,195,000 | ' | 5,423,000 | 5,834,000 | ' | ' | 717,000 | 820,000 | 281,000 | 294,000 | 532,000 | 591,000 | 576,000 | 598,000 | 77,000 | 107,000 | 844,000 | 817,000 | 215,000 | 134,000 | ||
Finite-lived intangible asset, useful life | ' | ' | ' | ' | ' | ' | '10 years | '7 years | '7 years | '10 years | '7 years | ' | '15 years | ' | '7 years | ' | '15 years | ' | '3 years | ' | ' | ' | '7 years | ' | ||
Amortization of intangible assets | 300,000 | 500,000 | 700,000 | 900,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Amortization expense, 2014 | 1,400,000 | ' | 1,400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Amortization expense, 2015 | 1,400,000 | ' | 1,400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Amortization expense, 2016 | 1,300,000 | ' | 1,300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Amortization expense, 2017 | 1,300,000 | ' | 1,300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Amortization expense, 2018 | 1,000,000 | ' | 1,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Income (loss) from continuing operations | ' | ' | ' | ' | ' | 100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Net income (loss) | ' | ' | ' | ' | ' | $100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Earnings per share, basic and diluted | ($0.57) | [1] | ($0.41) | [1] | ($1.17) | ($0.95) | ' | $0.01 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
[1] | Net loss per share and the number of shares used in the per share calculations for all periods presented reflect the one-for-twelve reverse stock split that took effect on January 27, 2014. |
DEBT_Details
DEBT (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 | Mar. 03, 2014 | Jun. 30, 2014 | Mar. 03, 2014 | Mar. 02, 2014 | Dec. 31, 2013 | Mar. 03, 2014 | Mar. 02, 2014 | Mar. 13, 2013 | Mar. 03, 2014 | Jun. 30, 2014 | Mar. 03, 2014 | Dec. 31, 2013 | Mar. 03, 2014 | Mar. 03, 2014 | Mar. 03, 2014 | Mar. 13, 2013 | ||||
Line of Credit | Line of Credit | Line of Credit | 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 | |||||||
Revolving Credit Facility | Revolving Credit Facility | Revolving Credit Facility | Revolving Credit Facility | Revolving Credit Facility | Revolving Credit Facility | Revolving Credit Facility | Revolving Credit Facility | Range One | Range Two | Range Three | Third Security LLC And Affiliates | |||||||||||
Wall Street Journal Prime Rate | Wall Street Journal Prime Rate | Third Security LLC And Affiliates | ||||||||||||||||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Total debt, including short term debt | $6,902,000 | $6,560,000 | ' | $3,000,000 | [1] | ' | ' | $2,560,000 | [1] | ' | ' | ' | ' | $3,902,000 | [2] | ' | $4,000,000 | [2] | ' | ' | ' | ' |
Current maturities of long term debt | -691,000 | -242,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Long-term debt, less current maturities | 6,211,000 | 6,318,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Line of credit facility, current borrowing capacity | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Debt instrument, face amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,000,000 | ||||
Interest costs capitalized | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100,000 | ' | ' | ' | ' | ' | ' | ||||
Debt instrument, interest rate, stated percentage | ' | ' | ' | ' | 6.25% | 4.25% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Debt instrument, basis spread on variable rate | ' | ' | ' | ' | ' | ' | ' | 3.00% | 1.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
Debt instrument, interest rate, effective percentage | ' | ' | ' | ' | 6.25% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||
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 | ' | ' | ' | ' | ' | ' | ' | ||||
Long-term debt, percentage bearing variable interest, percentage rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 9.10% | ' | ' | ' | ' | ' | ||||
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. 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%. The current interest rate is 6.25%. 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. Pursuant to the terms of the Loan Agreement, as amended by the Fourth Amendment, we are required to make monthly payments of principal and interest to the Lenders commencing on April 1, 2015. 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. As of June 30, 2014, we were in compliance with all financial covenants.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. |
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES (Details) (USD $) | 6 Months Ended | |
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ' | ' |
Operating leases, future minimum payments due, next twelve months | $0.60 | ' |
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, 2018 | 0.5 | ' |
Operating leases, future minimum payments, due thereafter | 0.9 | ' |
Operating leases, rent expense | 0.5 | 0.6 |
Firm commitments to vendors | $1.30 | ' |
INCOME_TAXES_Details
INCOME TAXES (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Income Tax Disclosure [Abstract] | ' | ' | ' | ' |
INCOME TAX (BENEFIT) EXPENSE | ($8,000) | ($6,000) | $497,000 | $60,000 |
Effective income tax rate, continuing operations | ' | ' | 6.57% | ' |
Effective tax rate reconciliation, permanent differences, goodwill amortization | ' | ' | 500,000 | ' |
Effective income tax rate reconciliation, prior year income taxes, amount | ' | ' | $400,000 | ' |
STOCKHOLDERS_EQUITY_Details
STOCKHOLDERS' EQUITY (Details) (USD $) | 0 Months Ended | 1 Months Ended | 6 Months Ended | 12 Months Ended | 0 Months Ended | 0 Months Ended | |||||||||||||||||
Feb. 02, 2012 | Dec. 31, 2011 | Jan. 24, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | 23-May-12 | Feb. 02, 2012 | Dec. 31, 2010 | Feb. 02, 2012 | Feb. 02, 2012 | Mar. 13, 2013 | Mar. 13, 2013 | Dec. 31, 2013 | Mar. 05, 2014 | Dec. 31, 2013 | Mar. 05, 2014 | Mar. 05, 2014 | ||||||
Third Security LLC And Affiliates | 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 | Maximum | Maximum | Minimum | Minimum | Series B Preferred Stock | |||||||||||||
Third Security LLC And Affiliates | Third Security LLC And Affiliates | Preferred Stock | |||||||||||||||||||||
Third Security LLC And Affiliates | |||||||||||||||||||||||
Class of Stock [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Common stock, shares authorized | ' | ' | ' | 150,000,000 | ' | 150,000,000 | 150,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Proceeds from issuance of common stock and convertible notes | $22,000,000 | $3,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Common stock, shares issued | 1,583,333 | ' | ' | 7,353,695 | ' | 7,353,695 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Common stock, sale price per share (in dollars per share) | $12 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Common stock warrants, term | '5 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Common stock warrant, common stock called | 823,333 | ' | 691,656 | 2,335,348 | ' | ' | ' | ' | 431,027 | [1] | 1,052,820 | [2] | ' | 441,656 | [3] | 250,000 | [3] | 1,097,600 | 1,212,665 | 948,333 | 1,097,600 | ' | |
Common stock warrant, exercise price | 15 | ' | ' | ' | ' | ' | ' | ' | 6.96 | [1] | 11.73 | [2] | 11.73 | [2] | 9 | [3] | 9 | [3] | 15 | 12.96 | 12.96 | 11.73 | ' |
Convertible notes, common stock callable | ' | ' | ' | ' | ' | ' | ' | 250,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Convertible notes, warrants callable | ' | ' | ' | ' | ' | ' | ' | 125,000 | ' | ' | 159,845 | [2] | ' | ' | ' | ' | ' | ' | ' | ||||
Payments of stock issuance costs | 1,330,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Payments of stock issuance costs, percentage of gross offering proceeds | 7.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Payments of stock issuance costs, warrant right to purchase common stock shares | 31,666 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Payments of stock issuance costs, warrant right to purchase common stock shares, percentage of shares in offering | 2.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Stock issuance costs, reimbursable expenses | 125,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Payments of stock issuance costs, reduction to equity | 1,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Private Placement, net, shares | ' | ' | 1,383,333 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 500,000 | ' | ' | ' | ' | 1,443,297 | |||||
Share price | ' | ' | $6 | $3.74 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $4.85 | |||||
Private placement, net | ' | ' | $8,300,000 | ' | ' | $7,570,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $7,000,000 | |||||
Class of warrant or right, number of securities called by warrants or rights, price per share | ' | ' | $9 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Common stock warrants issued | ' | ' | ' | 115,065 | 691,656 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Preferred stock, par value (in dollars per share) | ' | ' | ' | $0.01 | ' | $0.01 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.01 | |||||
[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 completed in February 2012 and are classified as a liability in our financial statements. See Footnote 9 - Fair Value. These warrants also contain certain anti-dilution provisions that provide for an adjustment to the exercise price and number of shares issuable upon exercise of the warrant in the event that we engage in certain issuances of shares of our common stock at a price lower than the exercise price of the warrant. | ||||||||||||||||||||||
[3] | These warrants were issued in connection with the Offering, which was completed in January 2013. |
FAIR_VALUE_Details
FAIR VALUE (Details) (USD $) | 6 Months Ended | 3 Months Ended | 6 Months Ended | ||||
In Thousands, except Share data, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jan. 24, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Liability | Liability | Liability | Liability | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Common stock warrants issued | 115,065 | 691,656 | ' | ' | ' | 1,200,000 | ' |
Share price | $3.74 | ' | $6 | ' | ' | ' | ' |
Stock options, fair value assumptions, expected life | '2 years 7 months 10 days | ' | ' | ' | ' | ' | ' |
Volatility | 55.00% | ' | ' | ' | ' | ' | ' |
Risk-free interest rate | 0.68% | ' | ' | ' | ' | ' | ' |
Fair value assumptions, expected term | '2 years 6 months | ' | ' | ' | ' | ' | ' |
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 | ' | ' | ' | $550 | $500 | $600 | $900 |
Total gains or losses | ' | ' | ' | ' | ' | ' | ' |
Recognized in earnings | ' | ' | ' | -200 | -200 | -250 | -600 |
Ending balance | ' | ' | ' | $350 | $300 | $350 | $300 |
STOCK_OPTIONS_Details
STOCK OPTIONS (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | |
Equity incentive plan 2006 | Employee stock option | Stock appreciation rights (SARs) | Stock appreciation rights (SARs) | |||
Number of Options [Rollforward] | ' | ' | ' | ' | ' | ' |
Balance at January 1, 2014 | ' | ' | ' | 565,028 | ' | ' |
Granted | 15,499 | 159,375 | 214,296 | 214,296 | ' | ' |
Forfeited | ' | ' | ' | -47,559 | ' | ' |
Expired | ' | ' | ' | -545 | ' | ' |
Balance at June 30, 2014 | 731,220 | ' | ' | 731,220 | ' | ' |
Exercisable at June 30, 2014 | ' | ' | ' | 194,663 | ' | ' |
Weighted Average Exercise Price [Roll Forward] | ' | ' | ' | ' | ' | ' |
Balance at January 1, 2014 | ' | ' | ' | $7.19 | ' | ' |
Granted | ' | ' | $5.47 | $5.47 | ' | ' |
Forfeited | ' | ' | ' | $5.07 | ' | ' |
Expired | ' | ' | ' | $14.28 | ' | ' |
Balance at June 30, 2014 | ' | ' | ' | $6.82 | ' | ' |
Exercisable at June 30, 2014 | ' | ' | ' | $11.03 | ' | ' |
Number of Options | ' | ' | ' | ' | ' | ' |
Number of Options, beginning balance | ' | ' | ' | ' | 138,333 | 138,333 |
Number of Options, ending balance | ' | ' | ' | ' | 138,333 | 138,333 |
Number of Options, exercisable | ' | ' | ' | ' | 0 | ' |
Weighted-Average Exercise Price | ' | ' | ' | ' | ' | ' |
Weighted-Average Exercise Price, beginning balance | ' | ' | ' | ' | $4.32 | $4.32 |
Weighted-Average Exercise Price, ending balance | ' | ' | ' | ' | $4.32 | $4.32 |
Weighted-Average Exercise Price, exercisable | ' | ' | ' | ' | $0 | ' |
OPERATING_SEGMENT_AND_GEOGRAPH2
OPERATING SEGMENT AND GEOGRAPHIC INFORMATION (Details) (USD $) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 |
operating_segments | |||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Number of operating segments (in operating segments) | ' | ' | 2 | ' | ' |
Net Sales | $6,764 | $7,306 | $13,015 | $14,680 | ' |
Gross Profit | 2,393 | 2,973 | 4,887 | 6,228 | ' |
Net Loss before Taxes | -3,901 | -2,873 | -7,572 | -6,394 | ' |
Income Tax Expense (Benefit) | -8 | -6 | 497 | 60 | ' |
Net Loss | -3,893 | -2,867 | -8,069 | -6,454 | -15,987 |
Depreciation/Amortization | 488 | 687 | 981 | 1,431 | ' |
Interest expense, net | 146 | 151 | 328 | 304 | ' |
Total Assets | 31,091 | 39,363 | 31,091 | 39,363 | 30,278 |
Laboratory services | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Net Sales | 3,843 | 4,012 | 7,531 | 8,439 | ' |
Gross Profit | 1,490 | 1,853 | 3,122 | 4,046 | ' |
Net Loss before Taxes | -3,277 | -2,181 | -6,261 | -5,267 | ' |
Income Tax Expense (Benefit) | 40 | 0 | 549 | 0 | ' |
Net Loss | -3,317 | -2,181 | -6,810 | -5,267 | ' |
Depreciation/Amortization | 438 | 646 | 878 | 1,209 | ' |
Interest expense, net | 83 | 84 | 190 | 219 | ' |
Total Assets | 23,370 | 27,834 | 23,370 | 27,834 | ' |
Genetic Assays and Platforms [Member] | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Net Sales | 2,921 | 3,294 | 5,484 | 6,241 | ' |
Gross Profit | 903 | 1,120 | 1,765 | 2,182 | ' |
Net Loss before Taxes | -624 | -692 | -1,311 | -1,127 | ' |
Income Tax Expense (Benefit) | -48 | -6 | -52 | 60 | ' |
Net Loss | -576 | -686 | -1,259 | -1,187 | ' |
Depreciation/Amortization | 50 | 41 | 103 | 222 | ' |
Interest expense, net | 63 | 67 | 138 | 85 | ' |
Total Assets | 7,721 | 11,529 | 7,721 | 11,529 | ' |
United states | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Net Sales | 4,870 | 5,797 | 9,633 | 11,146 | ' |
Italy | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Net Sales | 337 | 372 | 722 | 827 | ' |
All Other Countries [Member] | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Net Sales | $1,557 | $1,137 | $2,660 | $2,707 | ' |
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% | ' | ' |
SUBSEQUENT_EVENTS_Details
SUBSEQUENT EVENTS (Details) (Subsequent Event [Member], Surveyor Kit Patent, Technology and Inventory Purchase Agreement [Member], USD $) | 0 Months Ended |
In Millions, unless otherwise specified | Jul. 01, 2014 |
Installment | |
Subsequent Event [Member] | Surveyor Kit Patent, Technology and Inventory Purchase Agreement [Member] | ' |
Subsequent Event [Line Items] | ' |
Proceeds from Sales of Business, Affiliate and Productive Assets | $3.65 |
Additional Expected Proceeds from Sales of Business, Affiliate and Productive Assets | $0.60 |
Number of Additional Expected Proceed Installments | 4 |