Loading...
Docoh

Precipio (PRPO)

DOCUMENT AND ENTITY INFORMATION

DOCUMENT AND ENTITY INFORMATION - shares9 Months Ended
Sep. 30, 2016Oct. 31, 2016
Document and Entity Information [Abstract]
Entity Registrant NameTRANSGENOMIC INC
Entity Central Index Key1043961
Current Fiscal Year End Date--12-31
Entity Filer CategorySmaller Reporting Company
Document Type10-Q
Document Period End DateSep. 30,
2016
Document Fiscal Year Focus2016
Document Fiscal Period FocusQ3
Amendment Flagfalse
Entity Common Stock, Shares Outstanding24,786,244

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in ThousandsSep. 30, 2016Dec. 31, 2015
CURRENT ASSETS:
Cash and cash equivalents $ 71 $ 444
Accounts receivable, net180 264
Inventories, net36 50
Other current assets314 537
Assets held for sale265 1,987
Total current assets866 3,282
PROPERTY AND EQUIPMENT:
Equipment5,592 5,593
Furniture, fixtures & leasehold improvements1,565 1,565
Property and equipment, gross7,157 7,158
Less: accumulated depreciation(6,985)(6,899)
Property and equipment, net172 259
OTHER ASSETS:
Intangibles, net982 1,170
Other assets58 105
Assets2,078 4,816
CURRENT LIABILITIES:
Current maturities of long-term debt7,814 7,596
Accounts payable6,273 3,781
Accrued compensation225 321
Accrued expenses2,704 3,734
Deferred revenue176 217
Other liabilities1,068 1,068
Liabilities held for sale0 264
Total current liabilities18,260 16,981
LONG TERM LIABILITIES:
Common stock warrant liability1,430 350
Other long-term liabilities212 305
Total liabilities19,902 17,636
STOCKHOLDERS’ DEFICIT:
Convertible preferred stock, $0.01 par value, 15,000,000 shares authorized, 214,705 and 4,029,502 shares issued and outstanding, respectively2 40
Common stock, $0.01 par value, 150,000,000 shares authorized, 24,139,130 and 13,915,691 shares issued and outstanding, respectively241 139
Additional paid-in capital201,522 200,403
Accumulated other comprehensive income0 10
Accumulated deficit(219,589)(213,412)
Total stockholders’ deficit(17,824)(12,820)
Liabilities and stockholders' equity $ 2,078 $ 4,816

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS (PARENTHETICALS) - $ / sharesSep. 30, 2016Dec. 31, 2015
Statement of Financial Position [Abstract]
Preferred stock, par value (in dollars per share) $ 0.01 $ 0.01
Preferred stock, shares authorized (in shares)15,000,000 15,000,000
Preferred stock, shares issued (in shares)214,705 4,029,502
Preferred stock, shares outstanding (in shares)214,705 4,029,502
Common stock, par value (in dollars per share) $ 0.01 $ 0.01
Common stock, shares authorized (in shares)150,000,000 150,000,000
Common stock, shares issued (in shares)24,139,130 13,915,691
Common stock, shares outstanding (in shares)24,139,130 13,915,691

UNAUDITED CONDENSED CONSOLIDATE

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)3 Months Ended9 Months Ended
Sep. 30, 2016Sep. 30, 2015Sep. 30, 2016Sep. 30, 2015
NET SALES $ 457,000 $ 330,000 $ 1,198,000 $ 1,522,000
COST OF GOODS SOLD430,000 445,000 1,477,000 1,375,000
Gross profit27,000 (115,000)(279,000)147,000
OPERATING EXPENSES:
Selling, general and administrative1,252,000 1,686,000 4,392,000 5,398,000
Research and development393,000 455,000 1,065,000 1,374,000
Operating Expenses1,645,000 2,141,000 5,457,000 6,772,000
OPERATING LOSS FROM CONTINUING OPERATIONS(1,618,000)(2,256,000)(5,736,000)(6,625,000)
OTHER INCOME (EXPENSE):
Interest expense, net(285,000)(174,000)(782,000)(550,000)
Warrant revaluation12,000 385,000 357,000 (30,000)
Other, net(1,000)(6,000)(1,000)(19,000)
Other Income (Expense)(274,000)205,000 (426,000)(599,000)
LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES(1,892,000)(2,051,000)(6,162,000)(7,224,000)
INCOME TAX BENEFIT0 0 0 (1,000)
LOSS FROM CONTINUING OPERATIONS(1,892,000)(2,051,000)(6,162,000)(7,223,000)
LOSS FROM DISCONTINUED OPERATIONS, NET OF TAXES(34,000)(5,248,000)(25,000)(6,392,000)
NET LOSS(1,926,000)(7,299,000)(6,187,000)(13,615,000)
PREFERRED STOCK DIVIDENDS0 (331,000)(21,000)(993,000)
NET LOSS AVAILABLE TO COMMON STOCKHOLDERS $ (1,926,000) $ (7,630,000) $ (6,208,000) $ (14,608,000)
BASIC AND DILUTED LOSS PER COMMON SHARE (IN DOLLARS PER SHARE) $ (0.08) $ (0.55) $ (0.28) $ (1.24)
BASIC AND DILUTED WEIGHTED-AVERAGE SHARES OF COMMON STOCK OUTSTANDING (IN SHARES)23,551,869 13,763,240 21,896,943 11,784,583
Continuing operations
OTHER INCOME (EXPENSE):
NET LOSS AVAILABLE TO COMMON STOCKHOLDERS $ (1,892,000) $ (2,382,000) $ (6,183,000) $ (8,216,000)
BASIC AND DILUTED LOSS PER COMMON SHARE (IN DOLLARS PER SHARE) $ (0.08) $ (0.17) $ (0.28) $ (0.70)
Discontinued operations
OTHER INCOME (EXPENSE):
NET LOSS AVAILABLE TO COMMON STOCKHOLDERS $ (34,000) $ (5,248,000) $ (25,000) $ (6,392,000)
BASIC AND DILUTED LOSS PER COMMON SHARE (IN DOLLARS PER SHARE) $ 0 $ (0.38) $ 0 $ (0.54)

UNAUDITED CONDENSED CONSOLIDAT5

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands3 Months Ended9 Months Ended
Sep. 30, 2016Sep. 30, 2015Sep. 30, 2016Sep. 30, 2015
Statement of Comprehensive Income [Abstract]
Net Loss $ (1,926) $ (7,299) $ (6,187) $ (13,615)
Other comprehensive loss - foreign currency translation adjustment0 (22)0 (14)
Comprehensive Loss $ (1,926) $ (7,321) $ (6,187) $ (13,629)

UNAUDITED CONDENSED CONSOLIDAT6

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT - 9 months ended Sep. 30, 2016 - USD ($) $ in ThousandsTotalPreferred StockCommon StockAdditional Paid-in CapitalAccumulated DeficitAccumulated Other Comprehensive IncomePrivate PlacementPrivate PlacementPreferred StockPrivate PlacementAdditional Paid-in Capital
Balance at beginning of period at Dec. 31, 2015 $ (12,820) $ 40 $ 139 $ 200,403 $ (213,412) $ 10
Balance at beginning of period (in shares) at Dec. 31, 20154,029,502 13,915,691
Increase (Decrease) in Stockholders' Equity
Net loss(6,187)(6,187)
Foreign currency translation adjustment0 10 (10)
Stock-based compensation140 140
Stock issued during period (in shares)1,292,722 2,365,243
Stock issued during period500 $ 12 488 $ 543 $ 24 $ 519
Dividends on preferred stock(4,475)(4,475)
Conversion of preferred stock and preferred stock dividends4,475 $ (62) $ 90 4,447
Conversion of preferred stock and preferred stock dividends (in shares)(6,180,040)8,930,717
Balance at end of period at Sep. 30, 2016 $ (17,824) $ 2 $ 241 $ 201,522 $ (219,589) $ 0
Balance at end of period (in shares) at Sep. 30, 2016214,705 24,139,130

UNAUDITED CONDENSED CONSOLIDAT7

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands9 Months Ended
Sep. 30, 2016Sep. 30, 2015
CASH FLOWS USED IN OPERATING ACTIVITIES:
NET LOSS $ (6,187) $ (13,615)
Less loss from discontinued operations, net of tax(25)(6,392)
Loss from continuing operations(6,162)(7,223)
Adjustments to reconcile net loss to net cash flows used in operating activities:
Depreciation and amortization264 343
Stock-based compensation111 489
Provision for losses on doubtful accounts72 0
Warrant revaluation(357)30
Loss on sale of fixed assets0 14
Deferred interest47 61
Deferred tax provision0 0
Changes in operating assets and liabilities:
Accounts receivable12 158
Inventories14 0
Other current assets280 (214)
Accounts payable2,492 (162)
Accrued expenses and other liabilities(728)78
Net cash used in continuing operations(3,955)(6,426)
Net cash provided by (used in) discontinued operations381 (3,010)
Net cash used in operating activities(3,574)(9,436)
CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES:
Purchases of property and equipment(19)(280)
Other assets(27)(9)
Net cash used in continuing operations(46)(289)
Net cash provided by discontinued operations1,052 1,910
Net cash provided by investing activities1,006 1,621
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES:
Principal payments on capital lease obligations(2)(35)
Issuance of preferred stock, net1,779 0
Issuance of common stock, net468 8,977
Proceeds from borrowings500 923
Principal payment on note payable(550)(874)
Net cash flows provided by financing activities2,195 8,991
EFFECT OF FOREIGN CURRENCY EXCHANGE RATE CHANGES ON CASH0 2
NET CHANGE IN CASH AND CASH EQUIVALENTS(373)1,178
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD444 1,609
CASH AND CASH EQUIVALENTS AT END OF PERIOD71 2,787
Cash paid during the period for:
Interest $ 0 $ 365

BUSINESS DESCRIPTION

BUSINESS DESCRIPTION9 Months Ended
Sep. 30, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
BUSINESS DESCRIPTIONBUSINESS DESCRIPTION Business Description. Transgenomic, Inc. (“we”, “us”, “our”, the “Company” or “Transgenomic”) is a biotechnology company advancing personalized medicine for the detection and treatment of cancer and inherited diseases through our proprietary molecular technologies and clinical and research services. A key goal is to bring our Multiplexed ICE COLD-PCR (“MX-ICP”) product to the clinical market through strategic partnerships and licensing agreements, enabling the use of blood and other bodily fluids for more effective and patient-friendly diagnosis, monitoring and treatment of cancer. MX-ICP is technology proprietary to Transgenomic. It is a reagent that improves the ability to detect genetic mutations. This technology has been validated internally on all currently available sequencing platforms, including Sanger, Next Gen Sequencing and Digital PCR. By enhancing the level of detection of genetic mutations and suppressing the normal or wild-type DNA, several benefits are provided. Historically, our operations were organized and reviewed by management along our major product lines and presented in two business segments: Laboratory Services and Genetic Assays and Platforms. Beginning with the quarter ended September 30, 2015, our operations are now organized as one business segment, our Laboratory Services segment, and during the second half of 2015, we began presenting our Genetic Assays and Platforms segment and a portion of our Laboratory Services segment in discontinued operations. Our current Laboratory Services business consists of our laboratory in Omaha, Nebraska, which is focused on providing genetic analytical services related to Oncology and pharmacogenomics research services supporting Phase II and Phase III clinical trials conducted by pharmaceutical and biotechnology companies. Our laboratory employs a variety of genomic testing service technologies, including our proprietary MX-ICP technology. Our laboratory in Omaha is certified under the Clinical Laboratory Improvement Amendments (“CLIA”) as a high complexity laboratory and is accredited by the College of American Pathologists. Our condensed consolidated balance sheets, statements of operations and statements of cash flows for all periods presented reflect our former Genetic Assays and Platforms activities and Patient Testing business as discontinued operations (See Note 3 - “Discontinued Operations”). Going Concern. The condensed consolidated financial statements have been prepared using accounting principles generally accepted in the United States of America (“GAAP”) applicable for a going concern, which assume that we will realize our assets and discharge our liabilities in the ordinary course of business. We have incurred substantial operating losses and have used cash in our operating activities for the past few years. As of September 30, 2016, we had negative working capital of $17.4 million . Our ability to continue as a going concern is dependent upon a combination of generating additional revenue, improving cash collections, potentially selling underutilized assets and, if necessary, raising additional financing to meet our obligations and pay our liabilities arising from normal business operations when they come due. The outcome of these matters cannot be predicted with any certainty at this time and raises substantial doubt that we will be able to continue as a going concern. These condensed consolidated financial statements do not include any adjustments to the amounts and classification of assets and liabilities that may be necessary should we be unable to continue as a going concern. We cannot be certain that additional financing will be available on acceptable terms, or at all, and our failure to raise capital when needed could limit our ability to continue our operations.

SUMMARY OF SIGNIFICANT ACCOUNTI

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES9 Months Ended
Sep. 30, 2016
Accounting Policies [Abstract]
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESSUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation. The accompanying condensed consolidated financial statements are presented in conformity with GAAP. All amounts are presented in U.S. Dollars (“$”). Supplemental cash flows from discontinued operations are presented in Note 3 - “Discontinued Operations”. We have evaluated events occurring subsequent to September 30, 2016 for potential recognition or disclosure in the consolidated financial statements and concluded there were no subsequent events that required recognition or disclosure. The condensed consolidated balance sheet as of December 31, 2015 was derived from our audited balance sheet as of that date. There has been no change in the balance sheet from December 31, 2015. The accompanying condensed consolidated financial statements as of and for the three and nine months ended September 30, 2016 and 2015 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, 2015 contained in our Annual Report on Form 10-K, filed with the Securities and Exchange Commission (the “SEC”) on April 14, 2016. The results of operations for the interim periods presented are not necessarily indicative of the results for fiscal year 2016. Certain prior year amounts have been reclassified to conform to the current year presentation in our condensed consolidated financial statements, which consists of the effects of reclassifications from the presentation of our discontinued operations. Principles of Consolidation. The condensed 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 condensed consolidated financial statements. 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” for additional information. Cash and Cash Equivalents and Other Current Assets. Cash and cash equivalents include cash and investments with original maturities at the date of acquisition of three months or less. Other current assets as of September 30, 2016 of $0.3 million include prepaid assets of $0.1 million and other receivables of $0.2 million . Concentrations of Cash. From time to time, we may maintain a cash position with financial institutions in amounts that exceed federally insured limits. We have not experienced any losses on such accounts as of September 30, 2016 . Accounts Receivable. The following is a summary of activity for the allowance for doubtful accounts from continuing operations during the three and nine months ended September 30, 2016 and 2015 : Dollars in Thousands Beginning Balance Additions Deductions Ending Balance Three Months Ended September 30, 2016 $ 157 $ 2 $ (19 ) $ 140 Three Months Ended September 30, 2015 $ 20 $ 50 $ — $ 70 Nine Months Ended September 30, 2016 $ 87 $ 72 $ (19 ) $ 140 Nine Months Ended September 30, 2015 $ 20 $ 50 $ — $ 70 While payment terms are generally 30 days , we have also provided extended payment terms in certain cases. Accounts receivable are carried at original invoice amount and shown net of allowance for doubtful accounts. 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 regularly evaluating individual payor receivables and considering a payor’s financial condition, credit history, reimbursement rates and current economic conditions. Accounts receivable are written off when deemed uncollectible and after all collection efforts have been exhausted. Recoveries of accounts receivable previously written off are recorded as a reduction in bad debt expense when received. 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. At September 30, 2016, our net inventories were less than $0.1 million and were comprised predominantly of raw materials. The following is a summary of activity for the allowance for obsolete inventory during the three and nine months ended September 30, 2016 and 2015 : Dollars in Thousands Beginning Balance Additions Deductions Ending Balance Three Months Ended September 30, 2016 $ 63 $ — $ — $ 63 Three Months Ended September 30, 2015 $ — $ — $ — $ — Nine Months Ended September 30, 2016 $ 63 $ — $ — $ 63 Nine Months Ended September 30, 2015 $ — $ — $ — $ — 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 in continuing operations related to property and equipment was less than $0.1 million for each of the three month periods ended September 30, 2016 and 2015 . Depreciation expense was $0.1 million and $0.2 million for the nine month periods ended September 30, 2016 and 2015 , respectively. Depreciation expense during each period includes depreciation related to equipment acquired under capital leases. Intangible Assets. Intangible assets include intellectual property and patents. 1. Intellectual Property. Initial costs paid to license intellectual property from independent third parties are capitalized and amortized using the straight-line method over the license period. Ongoing royalties related to such licenses are expensed as incurred. 2. Patents. We capitalize legal costs, filing fees and other expenses associated with obtaining patents on new discoveries and amortize these costs using the straight-line method over the shorter of the legal life of the patent or its economic life beginning on the date the patent is issued. Stock-Based Compensation. All stock-based awards to date have exercise prices equal to the market value of the shares at the date of grant and have 10 -year contractual terms. Unvested awards as of September 30, 2016 had vesting periods of up to three years from the date of grant. None of the awards outstanding at September 30, 2016 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, net of estimated forfeitures, 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 three and nine months ended September 30, 2016 , we recorded compensation expense for all stock awards of zero and $0.1 million , respectively, within selling, general and administrative expense. During the three and nine months ended September 30, 2015 , we recorded compensation expense for all stock awards of $0.2 million and $0.5 million , respectively. As of September 30, 2016 , the unrecognized compensation expense related to unvested stock awards was $0.1 million , which is expected to be recognized over a weighted-average period of 1.1 years . We granted stock options to purchase an aggregate of 11,250 and 25,250 shares of our common stock during the three and nine months ended September 30, 2016 , respectively. The fair value of the stock options granted during the year was estimated on the grant date using the Black-Scholes option pricing model with the following assumptions: risk-free interest rates of 1.56% based on the U.S. Treasury yield in effect at the time of grant; dividend yields of zero percent; expected lives of 6.00 years, based on expected exercise activity behavior; and volatility of 85% based on the historical volatility of our common stock over a time that is consistent with the expected life of the options. Included in our stock awards outstanding as of September 30, 2016 were stock appreciation rights (“SARs”) to purchase 98,333 shares of our common stock. The SARs were issued solely to our executive officers and will vest over three years from the date of grant. 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. In our Biomarker Identification laboratory, we perform services on a project by project basis. When we receive payment in advance, we initially defer the revenue and recognize it when we deliver the service. These projects typically do not extend beyond one year. At each of September 30, 2016 and December 31, 2015 , deferred net sales associated with pharmacogenomics research projects included in the balance sheet in deferred revenue was $0.2 million . Net sales from Patient Testing laboratories, reported as part of discontinued operations, 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 payers, are reflected in the estimated contractual allowance applied prospectively. In the fourth quarter of 2015, we adjusted our contractual allowance rates to better reflect the reimbursement level we expect to achieve on Patient Testing billings. The adjustment negatively impacted our Patient Testing revenues for all periods after the third quarter of 2015. (See Note 3 - “Discontinued Operations”). Net sales of Genetic Assays and Platforms products, reported as discontinued operations (See Note 3 - “Discontinued Operations”) 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. 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”). 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 Liabilities are considered Level Three financial instruments for purposes of fair value measurement. See Note 9 - “Fair Value” for additional information. 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 10,701,453 and 10,392,728 shares of our common stock have been excluded from the computation of diluted loss per share at September 30, 2016 and 2015 , respectively, because the effect is anti-dilutive due to the net loss. Recent Accounting Pronouncements. In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (“ASU No. 2014-09”). This 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. ASU No. 2014-09 will replace most existing revenue recognition guidance in GAAP when it becomes effective. In July 2015, the FASB decided to defer the effective date of this new accounting guidance by one year. As a result, ASU No. 2014-09 will be effective for us for all annual and interim reporting periods beginning after December 15, 2017 and early adoption would be permitted as of the original effective date. The new standard permits the use of either the retrospective or cumulative effect transition method. We do not expect to early adopt this guidance and we have not selected a transition method. We are currently evaluating the impact this guidance will have on our financial condition, results of operations and cash flows. In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40)(“ASU No. 2014-15”) . This guidance addresses management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. The standard will be effective for the first interim period within annual reporting periods beginning after December 15, 2016. Early adoption is permitted. We do not expect to early adopt this guidance and do not believe that the adoption of this guidance will have a material impact on our consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases. The new standard amends the recognition of lease assets and lease liabilities by lessees for those leases currently classified as operating leases and amends disclosure requirements associated with leasing arrangements. The new standard is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2018. Early adoption is permitted. The new standard must be adopted using a modified retrospective transition, and provides for certain practical expedients. Transition will require application of the new guidance at the beginning of the earliest comparative period presented. We are currently assessing the impact that the adoption of this ASU will have on our consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The new standard simplifies several aspects related to the accounting for share-based payment transactions, including the accounting for income taxes, statutory tax withholding requirements, forfeitures and classification on the statement of cash flows. This guidance is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2016; however, early adoption is permitted. We do not expect to early adopt this guidance and are currently evaluating the impact this guidance will have on our financial condition, results of operations and cash flows.

DISCONTINUED OPERATIONS

DISCONTINUED OPERATIONS9 Months Ended
Sep. 30, 2016
Discontinued Operations and Disposal Groups [Abstract]
DISCONTINUED OPERATIONSDISCONTINUED OPERATIONS On September 8, 2015, we entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”) with Edge BioSystems, Inc. (“Edge Bio”), pursuant to which we sold our manufacturing, marketing and selling of high quality polymer and silica based beads and resin and chromatography columns business (collectively, the “Columns Business”). The Columns Business was part of our former segment, Genetic Assays and Platforms. Pursuant to the Asset Purchase Agreement, Edge Bio acquired substantially all of the assets used solely in connection with the Columns Business and assumed certain liabilities of the Columns Business for a total cash purchase price of approximately $2.1 million (the “Asset Sale”), which was paid on September 8, 2015 upon the closing of the Asset Sale. During the year ended December 31, 2015, we recorded a gain on the sale of the Columns Business of $1.5 million . On November 25, 2015, we entered into an Asset Purchase Agreement (the “Purchase Agreement”) with ADSTEC Corporation (“ADSTEC”) and ADS Biotec Inc., a wholly-owned subsidiary of ADSTEC (“Buyer”), pursuant to which we sold (1) to ADSTEC our facilities located in Glasgow, Scotland and on Irvington Road in Omaha, Nebraska (together, the “Facilities”) and all of our stock, inventory and raw materials located at the Facilities (collectively, the “Inventory”), and (2) to Buyer (a) all of the remaining assets relating to our Genetic Assays and Platforms business segment (the “Business”), other than the Inventory (the “Purchased Assets”), and (b) all of the ordinary shares of Transgenomic Limited, a wholly-owned subsidiary of ours (the “Shares”). Pursuant to the Purchase Agreement, ADSTEC and Buyer acquired the Facilities, the Inventory, the Purchased Assets and the Shares for an aggregate purchase price of approximately $300,000 , and Buyer assumed our financial and human resources commitments related to the Business (the “Transaction”). During the year ended December 31, 2015, we recorded a loss on the Transaction of $1.7 million . Together, the Asset Sale and the Transaction represent the divestiture of our Genetic Assays and Platforms business, resulting in a strategic shift that had a major effect on our operations and financial results. Therefore, the divested operations of our Genetic Assays and Platforms business meet the criteria to be reported as discontinued operations. During the fourth quarter of 2015, our Board of Directors took actions to begin the process of divesting our Patient Testing business in New Haven, Connecticut. In March 2016, we announced that we had suspended testing services in our Patient Testing laboratory as we review and evaluate various strategic alternatives for that business. As a result of these actions, as of December 31, 2015, our Patient Testing business met the criteria to be reported as discontinued operations. We anticipate that we will complete the divestiture of the Patient Testing business during 2016. The related assets, liabilities, results of operations and cash flows for both the Genetic Assays and Platforms business and Patient Testing business are classified as assets held for sale, liabilities held for sale and discontinued operations for all periods presented. Results of the discontinued operations consisted of the following: Three months ended September 30, Nine months ended September 30, (Dollars in thousands) 2016 2015 2016 2015 Net sales $ 283 $ 5,507 $ 1,960 $ 17,868 Cost of goods sold 57 3,203 1,251 9,980 Gross profit 226 2,304 709 7,888 Selling, general and administrative expense 252 1,910 1,621 8,325 Research and development expense 98 106 166 330 Impairment of long-lived assets — 7,024 — 7,024 Operating income (loss) from discontinued operations (124 ) (6,736 ) (1,078 ) (7,791 ) Gain on sale of business/assets 90 1,532 1,053 1,532 Income (loss) from discontinued operations before income taxes (34 ) (5,204 ) (25 ) (6,259 ) Income tax expense — 44 — 133 Income (loss) from discontinued operations, net of taxes $ (34 ) $ (5,248 ) $ (25 ) $ (6,392 ) The loss from discontinued operations for the nine month period ended September 30, 2016, includes approximately $1.1 million in proceeds received from the sale of assets of our discontinued Patient Testing business. Assets and liabilities of the discontinued operations are classified as assets held for sale and liabilities held for sale in the condensed consolidated balance sheets and consisted of the following: Dollars in Thousands September 30, December 31, ASSETS Accounts receivable, net $ 244 $ 1,905 Other current assets 21 82 Total Assets $ 265 $ 1,987 LIABILITIES Accrued compensation $ — $ 264 Total Liabilities $ — $ 264 The following is a summary of activity for the allowance for doubtful accounts from discontinued operations during the three and nine months ended September 30, 2016 and 2015. The allowance for doubtful accounts from discontinued operations is included in the assets held for sale in the condensed consolidated balance sheets. Dollars in Thousands Beginning Balance Additions Deductions Ending Balance Three Months Ended September 30, 2016 $ 10,462 $ — $ (5,192 ) $ 5,270 Three Months Ended September 30, 2015 $ 8,406 $ 1,052 $ (168 ) $ 9,290 Nine Months Ended September 30, 2016 $ 14,664 $ — $ (9,394 ) $ 5,270 Nine Months Ended September 30, 2015 $ 7,927 $ 3,782 $ (2,419 ) $ 9,290

INTANGIBLES AND OTHER ASSETS

INTANGIBLES AND OTHER ASSETS9 Months Ended
Sep. 30, 2016
Goodwill and Intangible Assets Disclosure [Abstract]
INTANGIBLES AND OTHER ASSETSINTANGIBLES AND OTHER ASSETS We review our amortizable long-lived assets for impairment annually or whenever events indicate that the carrying amount of the asset (group) may not be recoverable. An impairment loss may be needed if the sum of the future undiscounted cash flows is less than the carrying amount of the asset (group). The amount of the loss would be determined by comparing the fair market value of the asset to the carrying amount of the asset (group). Long-lived intangible assets as of September 30, 2016 and December 31, 2015 consisted of the following: Dollars in Thousands September 30, 2016 Cost Accumulated Amortization Net Book Value Patents 680 80 600 Intellectual property 672 290 382 $ 1,352 $ 370 $ 982 Dollars in Thousands December 31, 2015 Cost Accumulated Amortization Net Book Value Patents 980 274 706 Intellectual property 671 207 464 $ 1,651 $ 481 $ 1,170 Estimated Useful Life 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 $0.2 million and $0.1 million during the nine month periods ended September 30, 2016 and 2015 , respectively. Amortization expense for intangible assets is expected to be $0.1 million for each of the years ending December 31, 2016, 2017, 2018, 2019 and 2020.

DEBT

DEBT9 Months Ended
Sep. 30, 2016
Debt Disclosure [Abstract]
DEBTDEBT Dollars in Thousands September 30, 2016 December 31, 2015 Revolving Line of Credit (1) $ 3,243 $ 3,025 Term Loan (2) 4,000 4,000 Convertible Promissory Notes (3) 571 571 Total debt 7,814 7,596 Current portion of long-term debt (7,814 ) (7,596 ) Long-term debt, net of current maturities $ — $ — (1) Revolving Line of Credit. Amounts advanced under the Revolving Line accrue interest at an annual rate equal to the greater of (a) 6.25% or (b) the Wall Street Journal prime rate plus 3% . The current interest rate is 6.50% . Interest is payable on a monthly basis, with the balance payable at the maturity of the Revolving Line. Under the Loan Agreement, we pay the Lenders a commitment fee of $20,000 on each one-year anniversary of March 13, 2013, 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 November 1, 2017. (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, the maturity date of the Loan Agreement was extended until November 1, 2017 and no principal payments on the Term Loan are due until such date. The current interest rate is 9.1% . We 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 1% of the total outstanding balance under the Term Loan. Additional Terms. The Loan Agreement contains affirmative and negative covenants. Under the Term Loan, we 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 September 30, 2016, we were not in compliance with the Loan Agreement, as amended by the Ninth Amendment, due to the fact that we did not make the required monthly interest payments during the third quarter and have not received a waiver for the non-compliance and as such all debt has been classified as current at September 30, 2016. 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, would increase the applicable interest rate under the Revolving Line or Term Loan (or both) by 5% and would permit the Lenders to exercise remedies with respect to the collateral under the Loan Agreement. As of the date these financials were available for release, the Lenders have not exercised the remedies under the Loan Agreement. (3) Convertible Promissory Notes. The Notes accrue interest at a rate of 6% per year and mature on December 31, 2016. Revolving Line and Term Loan. 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” and, together with the Revolving Line, the “Loan Agreement”) of $4.0 million . 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 modified 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”). Pursuant to the terms of the Fourth Amendment, we were not required to make any principal or interest payments under the Term Loan for the period from March 1, 2014 through March 31, 2015. The interest on the debt that was deferred and not paid was capitalized as part of the Term Loan. The amount of interest that was capitalized from March 1, 2014 to March 31, 2015 was $0.4 million . On October 22, 2014, we entered into a fifth amendment to the Loan Agreement (the “Fifth Amendment”). Pursuant to the Fifth Amendment, the parties amended certain provisions of the Loan Agreement, including reducing the minimum liquidity and revenue covenants under the Loan Agreement. The Fifth Amendment also reduced the aggregate amount that we may borrow under the Revolving Line from $4.0 million to $3.0 million . On April 1, 2015, we entered into a sixth amendment to the Loan Agreement (the “Sixth Amendment”). Pursuant to the Sixth Amendment, among other things, (a) the Lenders waived specified events of default under the terms of the Loan Agreement, (b) commencing April 1, 2015, we began making monthly interest payments with respect to the Term Loan to the Lenders, (c) we were not be obligated to make monthly payments of principal under the Term Loan to the Lenders until April 1, 2016, (d) we made an initial prepayment of a portion of the Term Loan balance in the amount of approximately $148,000 on April 1, 2015 and will make one or more additional prepayments to the Lenders under the Loan Agreement upon the occurrence of certain events, as defined in the Loan Agreement, and (e) we were not required to comply with the minimum liquidity ratio under the terms of the Loan Agreement until the earliest to occur of a specified event, as defined in the Loan Agreement, or March 31, 2016. The Sixth Amendment also extends the time period in which we must provide certain reports and statements to the Lenders and amends the circumstances pursuant to which we may engage in certain sales or transfers of our business or property without the consent of the Lenders. As of June 30, 2015, we were in compliance with all financial covenants of the Loan Agreement, but were not in compliance with the restrictions limiting the amount that we may borrow under the Revolving Line. Accordingly, on August 10, 2015, we received a waiver from the Lenders relating to this non-compliance and paid the Lenders an aggregate of $0.7 million , which brought us back into compliance with the terms of the Revolving Line. On September 4, 2015, we entered into a seventh amendment to the Loan Agreement (the “Seventh Amendment”). The Seventh Amendment, among other things, (a) provided that the Lenders waived specified events of default under the terms of the Loan Agreement, (b) reduced our future minimum revenue covenants under the Loan Agreement, (c) reduced our borrowing availability under the Revolving Line to approximately $2.3 million , and (d) limited our borrowing base under the Loan Agreement to the amount of the Revolving Line. On January 6, 2016, we entered into an eighth amendment to the Loan Agreement (the “Eighth Amendment”). The Eighth Amendment, among other things, (a) provided that the Lenders waived specified events of default under the terms of the Loan Agreement, (b) reduced our future minimum revenue covenants under the Loan Agreement, (c) extended the maturity date of the Loan Agreement until November 1, 2017, and (d) provided for the repayment of an overadvance of $750,000 previously provided by the Lenders to us pursuant to the Loan Agreement. On June 6, 2016, we entered into a ninth amendment to the Loan Agreement (the “Ninth Amendment”). The Ninth Amendment, among other things, (a) provided that the Lenders waived specified events of default under the terms of the Loan Agreement, (b) amended the prepayment terms of the Loan Agreement, (c) provided for the reduction of amounts available under the Revolving Line upon the prepayment or repayment of certain amounts by us, (d) removed the minimum liquidity ratio and minimum net revenue financial covenants applicable to us under the Loan Agreement, (e) amended the circumstances pursuant to which we may engage in certain sales or transfers of our business or property without the consent of the Lenders, and (f) capitalized certain amounts owed by us to the Lenders and added such overdue amounts to the outstanding principal amount of the Revolving Line. As a result of the Ninth Amendment, the overadvance that existed at March 31, 2016 was added to the outstanding principal amount of the Revolving Line and no overadvance existed as of September 30, 2016. Convertible Promissory Notes. On December 31, 2014, we entered into an Unsecured Convertible Promissory Note Purchase Agreement (the “Note Purchase Agreement”) with an accredited investor (the “Investor”), pursuant to which we agreed to issue and sell to the Investor in a private placement an unsecured convertible promissory note (the “Initial Note”). We issued the Initial Note in the aggregate principal amount of $750,000 to the Investor on December 31, 2014. Pursuant to the terms of the Initial Note, interest accrued at a rate of 6% per year and the Initial Note was set to mature on December 31, 2016. Under the Initial Note, the outstanding principal and unpaid interest accrued was convertible into shares of our common stock as follows: (i) commencing upon the date of issuance of the Initial Note (but no earlier than January 1, 2015), the Investor was entitled to convert, on a one-time basis, up to 50% of the outstanding principal and unpaid interest accrued under the Initial Note, into shares of our common stock at a conversion price equal to the lesser of (a) the average closing price of the common stock on the principal securities exchange or securities market on which our common stock is then traded (the “Market”) for the 20 consecutive trading days immediately preceding the date of conversion, and (b) $2.20 (subject to adjustment for stock splits, stock dividends, other distributions, recapitalizations and the like); and (ii) commencing February 15, 2015, the Investor was entitled to convert, on a one-time basis, any or all of the remaining outstanding principal and unpaid interest accrued under the Initial Note, into shares of our common stock at a conversion price equal to 85% of the average closing price of our common stock on the Market for the 15 consecutive trading days immediately preceding the date of conversion. The Initial Note has been converted in full into 502,786 shares of our common stock, in accordance with the terms of the Initial Note. On January 15, 2015, we entered into the Note Purchase Agreement with seven accredited investors (the “Additional Investors”) and, on January 20, 2015, issued and sold to the Additional Investors, in a private placement, notes (the “Additional Notes”) in an aggregate principal amount of $925,000 . The Additional Notes have the same terms and conditions as the Initial Note. As of September 30, 2016, $400,000 of the aggregate principal amount of the Additional Notes, and accrued interest thereon, has been converted into an aggregate of 281,023 shares of our common stock.

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES9 Months Ended
Sep. 30, 2016
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIESCOMMITMENTS AND CONTINGENCIES We are subject to a number of claims of various amounts that arise out of the normal course of our business. In our opinion, the disposition of pending claims, in excess of recorded accruals, could have a material adverse effect on our financial position, results of operations or cash flows. On February 25, 2016, the Board of Regents of the University of Nebraska (“UNMC”) filed a lawsuit against us in the District Court of Douglas County, Nebraska, for breach of contract and seeking recovery of $0.7 million owed by us to UNMC. We and UNMC are currently in discussions to determine a mutually agreeable means by which to settle the outstanding liability. A $0.7 million liability has been recorded at December 31, 2015 and September 30, 2016. In addition, on April 13, 2016, Fox Chase Cancer Center (“Fox Chase”) filed a lawsuit against us in the Court of Common Pleas of Philadelphia County, First Judicial District of Pennsylvania Civil Trial Division (the “Court of Common Pleas”), alleging, among other things, breach of contract, tortious interference with present and prospective contractual relations, unjust enrichment, fraudulent conversion and conspiracy and seeking punitive damages in addition to damages and other relief. This lawsuit relates to a license agreement we entered into with Fox Chase in August 2000, as amended (the “License Agreement”), as well as the assignment of certain of our rights under the License Agreement to Integrated DNA Technologies, Inc. (“IDT”) pursuant to the Surveyor Kit Patent, Technology and Inventory Purchase Agreement we entered into with IDT effective as of July 1, 2014 (the “IDT Agreement”). Pursuant to the terms of the IDT Agreement, we agreed to indemnify IDT with respect to certain of the claims asserted in the Fox Chase proceeding. On July 8, 2016, the Court of Common Pleas sustained our preliminary objections to several of Fox Chase’s claims and dismissed the claims for tortious interference, fraudulent conversion, conspiracy, punitive damages and attorney’s fees. Accordingly, the case has been narrowed so that only certain contract claims and an unjust enrichment claim remain pending against us. We believe that we have good and substantial defenses to the claims asserted by Fox Chase. We are unable to determine whether any loss will occur or to estimate the range of such potential loss; therefore, no amount of loss has been accrued by us as of the date of filing of this Quarterly Report on Form 10-Q. Furthermore, there is no guarantee that we will prevail in this suit or receive any damages or other relief if we do prevail. On June 23, 2016, the Icahn School of Medicine at Mount Sinai (“Mount Sinai”) filed a lawsuit against us in the Supreme Court of the State of New York, County of New York, alleging, among other things, breach of contract and, alternatively, unjust enrichment and quantum merit, and seeking recovery of $0.7 million owed by us to Mount Sinai for services rendered. We and Mount Sinai are currently in discussions to determine a mutually agreeable means by which to settle the outstanding liability. A $0.7 million liability has been recorded at December 31, 2015 and September 30, 2016. The outcome of legal proceedings and claims brought against us are subject to significant uncertainty. Therefore, although management considers the likelihood of such an outcome to be remote, if one or more of these legal matters were resolved against us in the same reporting period for amounts in excess of management’s expectations, our financial statements for such reporting period could be materially adversely affected. In general, the resolution of a legal matter could prevent us from offering our services or products to others, could be material to our financial condition or cash flows, or both, or could otherwise adversely affect our operating results. 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 $0.2 million for the remainder of 2016 , $0.7 million in 2017 , $0.7 million in 2018 , $0.7 million in 2019 , $0.7 million in 2020 and $0.4 million thereafter . Rent expense for each of the nine month periods ended September 30, 2016 and 2015 was $0.2 million . At September 30, 2016 , firm commitments to vendors totaled $0.1 million .

INCOME TAXES

INCOME TAXES9 Months Ended
Sep. 30, 2016
Income Tax Disclosure [Abstract]
INCOME TAXESINCOME TAXES Annually, we file U.S. Federal, state and foreign income tax returns. All U.S. Federal and most state loss carryforwards remain subject to adjustment in the event of an income tax examination. Income tax expense from continuing operations was zero for the three and nine months ended September 30, 2016 . Income tax expense was zero for the three months ended September 30, 2015 and for the nine months ended September 30, 2015, we had an income tax benefit of approximately one thousand dollars. We maintain a full valuation allowance on our net deferred tax assets, having concluded that we are not more likely than not going to realize the benefit of our deferred tax assets, including our net operating loss carryforwards. During each of the three and nine month periods ended September 30, 2016 and 2015 , there were no material changes to the liability for uncertain tax positions.

STOCKHOLDERS' EQUITY

STOCKHOLDERS' EQUITY9 Months Ended
Sep. 30, 2016
Stockholders' Equity Note [Abstract]
STOCKHOLDERS' EQUITYSTOCKHOLDERS’ 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 affiliated 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 (“Craig-Hallum”) served as the sole placement agent for the offering. In consideration for services rendered as the placement agent in the offering, we agreed to (a) pay to the placement agent cash commissions equal to $1,330,000 , or 7.0% of the gross proceeds received in the offering; (b) 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 (c) 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 were not to 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: (a) 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 (b) issued to the investors warrants to purchase up to an aggregate of 691,655 shares of our common stock with an exercise price of $9.00 per share (the “2013 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 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 2013 Offering on the same terms as the other investors. Net proceeds from the 2013 Offering were used for general corporate and working capital purposes. In connection with the 2013 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 SEC 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 SEC on March 15, 2013 and was declared effective by the SEC on March 29, 2013. The 2013 Offering required the repricing and issuance of additional common stock warrants to the holders of warrants issued in the Private Placement. 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 . On October 22, 2014, we entered into a Securities Purchase Agreement with certain accredited investors (the “October 2014 Investors”), pursuant to which we, in a private placement, issued and sold to the October 2014 Investors (the “2014 Private Placement”) an aggregate of 730,776 shares of our common stock at a price per share of $3.25 for an aggregate purchase price of approximately $2.4 million , and warrants to purchase up to an aggregate of 365,388 shares of our common stock with an initial exercise price of $4.00 per share that are exercisable for the period from April 22, 2015 through April 22, 2020. In connection with the 2014 Private Placement, we also issued a warrant to purchase up to an aggregate of 9,230 shares of our common stock to one advisor. The warrants issued in the 2014 Private Placement include both cash and “cashless exercise” features. The 2014 Private Placement 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 $11.73 per share to $10.86 per share and the number of shares issuable upon exercise of the warrants increased from 1,212,665 to 1,309,785 . On December 31, 2014, we entered into the Note Purchase Agreement with the Investor pursuant to which we agreed to issue and sell the Initial Note to the Investor (the “Note Private Placement”). See Note 5 - “Debt- Convertible Promissory Notes ” for additional information regarding the terms of the Initial Note. Pursuant to the terms of the Note Purchase Agreement, we are subject to certain registration obligations and we may be required to effect one or more other registrations to register for resale the shares of our common stock issued or issuable under the Initial Note in connection with certain “piggy-back” registration rights granted to the Investor. The Note Private Placement 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 2012 warrants decreased from $10.86 per share to $10.25 per share and the number of shares issuable upon exercise of the warrants increased from 1,309,785 to 1,387,685 . On January 15, 2015, we entered into the Note Purchase Agreement with the Additional Investors and, on January 20, 2015, issued and sold to the Additional Investors, in a private placement, the Additional Notes in an aggregate principal amount of $925,000 (the “Additional Note Private Placement”). The Additional Notes have the same terms and conditions as the Initial Note. Craig-Hallum acted as the sole placement agent for the sale and issuance of the Additional Notes. In connection with the sale and issuance of the Additional Notes, we issued to Craig-Hallum an unsecured convertible promissory note, upon the same terms and conditions as the Notes, in an aggregate principal amount equal to 5% of the proceeds received by us pursuant to the sale and issuance of the Additional Notes, or $46,250 (the “Placement Agent Note”). As of the date of filing of this Quarterly Report on form 10-Q, the Placement Agent Note remains outstanding. The Additional Note Private Placement required the repricing and issuance of additional common stock warrants to the holders of warrants issued in the Private Placement. The exercise price of these warrants decreased from $10.25 per share to $9.59 per share and the number of shares issuable upon exercise of the warrants increased from 1,387,685 to 1,483,161 . On February 27, 2015, we entered into a purchase agreement with Craig-Hallum (the “Underwriter”) relating to our sale and issuance of 3,573,899 shares of our common stock and corresponding warrants to purchase up to 714,780 shares of our common stock (the “February 2015 Offering”). Each share of common stock was sold in combination with a warrant to purchase 0.20 of a share of common stock. The purchase price to the public for each share of common stock and accompanying warrant was $1.95 . The purchase price paid by the Underwriter to us for the common stock and accompanying warrants was $1.8135 . The net proceeds from the February 2015 Offering, after deducting the Underwriter’s discount and other estimated February 2015 Offering expenses, were approximately $6.2 million . The accompanying warrants are exercisable immediately upon their initial issuance date at an exercise price of $2.24 per share and will expire five years from the date of issuance. The exercise price will also be subject to adjustment in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting our common stock. The February 2015 Offering required the repricing and issuance of additional common stock warrants to the holders of warrants issued in the Private Placement. The exercise price of these warrants decreased from $9.59 per share to $7.56 per share and the number of shares issuable upon exercise of the warrants increased from 1,483,161 to 1,881,396 . On June 30, 2015, we entered into a Securities Purchase Agreement with certain accredited investors (the “July 2015 Investors”) pursuant to which, on July 7, 2015, we sold to the July 2015 Investors (a) an aggregate of approximately 1.5 million shares of our common stock at a price per share of $1.42 , (b) warrants (the “Series B Warrants”) to purchase up to an aggregate of 0.7 million shares of our common stock with an exercise price of $0.01 per share, and (c) warrants (the “Series A Warrants” and, together with the Series B Warrants, the “July 2015 Warrants”) to purchase up to an aggregate of 1.2 million shares of our common stock, with an exercise price of $1.66 per share (collectively, the “July 2015 Offering”). Each of the July 2015 Warrants has a term of 5 and 1/2 years . The Series B Warrants were immediately exercisable upon issuance. The Series A Warrants became exercisable on January 7, 2016, six months from the date of issuance. The aggregate gross proceeds to us from the July 2015 Offering were approximately $3.0 million . Craig-Hallum (the “2015 Placement Agent”) served as the sole placement agent for the July 2015 Offering. In consideration for services rendered as the placement agent in the July 2015 Offering, we (a) paid to the 2015 Placement Agent cash commissions equal to approximately $212,783 , or 7.0% of the gross proceeds received in the July 2015 Offering; (b) issued to the 2015 Placement Agent a five -year warrant to purchase up to 107,033 shares of our common stock with an exercise price of $1.66 per share and which is subject to other terms that are the same as the terms of the Series A Warrants; and (c) reimbursed the 2015 Placement Agent for reasonable out-of-pocket expenses, including fees paid to the 2015 Placement Agent’s legal counsel, incurred in connection with the July 2015 Offering, which reimbursable expenses did not exceed $50,000 . The July 2015 Offering required the repricing and issuance of additional common stock warrants to the holders of warrants issued in the Private Placement. The exercise price of these warrants decreased from $7.56 per share to $6.50 per share and the number of shares issuable upon exercise of the warrants increased from 1,881,396 to 2,188,177 . On January 6, 2016, we entered into a Securities Purchase Agreement (the “SPA”) with certain accredited investors (the “2016 Investors”), pursuant to which, on January 8, 2016, we sold to the 2016 Investors, and the 2016 Investors purchased from us (the “January 2016 Offering”), an aggregate of approximately $2.2 million of units (the “Units”) consisting of (a) an aggregate of 2,365,243 shares (the “A-1 Preferred Shares”) of our Series A-1 Convertible Preferred Stock (the “A-1 Preferred”), and (b) warrants (the “2016 Warrants”) to purchase up to an aggregate of 1,773,929 shares of our common stock. Each Unit was sold to the 2016 Investors at a purchase price of $0.93 per Unit. The A-1 Preferred Shares are convertible into shares of our common stock at an initial rate of 1-for-1, which conversion rate is subject to further adjustment as set forth in our Certificate of Designation of Series A-1 Convertible Preferred Stock, which was filed with the Secretary of State of the State of Delaware on January 8, 2016 (the “Series A-1 Certificate of Designation”). Pursuant to the terms of the Series A-1 Certificate of Designation, the holders of the A-1 Preferred Shares will generally be entitled to that number of votes as is equal to the product obtained by multiplying: (i) the number of whole shares of our common stock into which the A-1 Preferred may be converted as of the record date of such vote or consent, by (ii) 0.93, rounded down to the nearest whole number. Therefore, every 1.075269 shares of A-1 Preferred will generally initially be entitled to one vote. In May 2016, 2,150,538 of the A-1 Preferred Shares were converted into 2,150,538 shares of our common stock. At June 30, 2016, there were 214,705 A-1 Preferred Shares outstanding. The 2016 Warrants were immediately exercisable upon issuance, have a term of five years and have an exercise price of $1.21 per share of our common stock. Each 2016 Warrant includes both cash and “cashless exercise” features and an exchange feature whereby the holder of the 2016 Warrant may exchange (the “Exchange Right”) all or any portion of the 2016 Warrant for a number of shares of our common stock equal to the quotient obtained by dividing the “Exchange Amount” by the closing bid price of our common stock on the second trading day prior to the date the 2016 Warrant is exchanged (the “Exchange Price”). Under the 2016 Warrants, the “Exchange Amount” is based upon a Black Scholes option pricing model, and the aggregate Exchange Amount under all of the 2016 Warrants will be $1,436,882 , subject to adjustment to the extent that the risk-free U.S. Treasury rate fluctuates between the date of issuance of the 2016 Warrants and the date the 2016 Warrants are exchanged. Each 2016 Warrant provides that the number of shares that may be issued upon exercise of the Exchange Right is limited to the number of shares that may be purchased pursuant to the terms of the 2016 Warrant, unless we have previously obtained stockholder approval or approval from The Nasdaq Stock Market LLC to issue any additional shares of our common stock (the “Additional Shares”) pursuant to the Exchange Right (the “Required Approvals”). For any Exchange Right exercised more than 90 days following the issuance of the 2016 Warrants, if we have not obtained either of the Required Approvals, we will be required to pay the 2016 Warrant holder an amount in cash for any Additional Shares that we cannot issue without the Required Approvals based on the Exchange Amount. The 2016 Warrants further provide that, to the extent the closing bid price of our common stock on the second trading day prior to the date the 2016 Warrant is exchanged is less than $0.50 , the Exchange Price will be deemed to be equal to $0.50 , and, in addition to issuing shares of our common stock based on this Exchange Price, we will be required to pay to the 2016 Warrant holder an amount in cash equal to the product obtained by multiplying (a) $0.50 minus the closing bid price of our common stock on the second trading day prior to the date the 2016 Warrant is exchanged, by (b) the aggregate number of shares of our common stock issued to the 2016 Warrant holder by the Company in such exchange at an Exchange Price equal to $0.50 . Therefore, if the Required Approvals are obtained, based on the Exchange Amount of $1,436,882 (which, as noted above, is subject to adjustment to the extent that the risk-free U.S. Treasury rate fluctuates between the date of the issuance of the 2016 Warrants and the date the 2016 Warrants are exchanged), the maximum number of shares of our common stock issuable pursuant to the Exchange Right in the 2016 Warrants will be 2,873,765 . In addition, if, for example, assuming an Exchange Amount of $1,436,882 , the closing bid price of our common stock on the second trading day prior to the date the 2016 Warrants are exchanged is $0.25 , we would be required to pay to the 2016 Warrant holders cash in an aggregate amount of $718,441 in addition to issuing the 2016 Warrant holders 2,873,765 shares. In accordance with the terms of the SPA, we amended that certain Series A Warrant to purchase up to an aggregate of 1,161,972 shares of our common stock previously issued by us to an affiliate of one of the 2016 Investors on July 7, 2015 (the “Original Warrant”), as previously reported by us on our Amendment No. 1 to Current Report on Form 8-K/A, filed with the SEC on July 7, 2015 (as so amended, the “Amended Warrant”). The Amended Warrant amends the Original Warrant to provide that the Amended Warrant is subject to the same terms and conditions as the 2016 Warrants and, therefore, includes both cash and “cashless exercise” features and an Exchange Right whereby the number of shares issuable pursuant to the Exchange Right is equal to the “Amended Warrant Exchange Amount”, which is based on a Black Scholes option pricing model, and will be $941,197 , subject to adjustment to the extent that the risk-free U.S. treasury rate fluctuates between the date of issuance of the Amended Warrant and the date the Amended Warrant is exchanged. The Amended Warrant is exercisable for up to 1,161,972 shares of our common stock in the event we have obtained either of the Required Approvals with respect to the Amended Warrant. In the event the Amended Warrant holder exercises the Amended Warrant more than 90 days following the issuance of the Amended Warrant, if we have not obtained either of the Required Approvals, we will be required to pay the Amended Warrant holder an amount in cash for the shares of our common stock that we cannot issue under the Amended Warrant pursuant to such exercise without the Required Approvals based on the Amended Warrant Exchange Amount. The Amended Warrant also provides that, to the extent the closing bid price of our common stock on the second trading day prior to the date the Amended Warrant is exchanged is less than $0.50 , the Exchange Price will be deemed to be equal to $0.50 , and, in addition to issuing shares of our common stock based on this Exchange Price (assuming receipt of the Required Approvals), we will be required to pay to the Amended Warrant holder an amount in cash equal to the product obtained by multiplying (a) $0.50 minus the closing bid price of our common stock on the second trading day prior to the date the Amended Warrant is exchanged, by (b) the aggregate number of shares of our common stock issued to the Amended Warrant holder by us in such exchange at an Exchange Price equal to $0.50 . Therefore, if the Required Approvals are obtained, based on the Amended Warrant Exchange Amount of $941,197 (which, as noted above, is subject to adjustment to the extent that the risk-free U.S. Treasury rate fluctuates between the issuance of the Amended Warrant and the date the Amended Warrant is exchanged), the maximum number of shares of our common stock issuable pursuant to the Exchange Right in the Amended Warrant will be 1,882,395 . In addition, if, for example, assuming an Amended Warrant Exchange Amount of $941,197 , the closing bid price of our common stock on the second trading day prior to the date the Amended Warrant is exchanged is $0.25 , we would be required to pay to the Amended Warrant holder cash in an aggregate amount of $470,599 in addition to issuing the Amended Warrant holder 1,882,395 shares. In connection with entering into the SPA, we also entered into a Registration Rights Agreement, dated January 8, 2016, with the 2016 Investors. Pursuant to the terms of the Registration Rights Agreement, we were required to file with the SEC a registration statement to register for resale the shares of our common stock issuable upon conversion of the A-1 Preferred Shares and the shares of our common stock issuable upon exercise of the 2016 Warrants and the Amended Warrant by January 25, 2016. We filed the required registration statement with the SEC on January 25, 2016. Craig-Hallum (the “Placement Agent”) served as the sole placement agent for the January 2016 Offering. In consideration for services rendered as the Placement Agent in the January 2016 Offering, we (1) paid to the Placement Agent cash commissions equal to approximately $140,000 , or 7.0% of the gross proceeds received in the January 2016 Offering, excluding any proceeds received from Third Security, LLC or any of its affiliates; (2) issued to the Placement Agent, for a price of $50 , a five -year warrant to purchase up to 107,527 shares of our common stock at an exercise price of $1.21 per share (the “Agent Warrant”), which is subject to the same terms as the 2016 Warrants except that the Agent Warrant was not exercisable until July 8, 2016 and does not contain the Exchange Right; and (3) reimbursed the Placement Agent for reasonable out-of-pocket expenses, including fees paid to the Placement Agent’s legal counsel, incurred in connection with the January 2016 Offering, which reimbursable expenses did not exceed $50,000 . The January 2016 Offering and the payment of all accrued and unpaid dividends on the Series A Preferred Stock and Series B Preferred Stock in the form of shares of our common stock at a rate of $1.00 per share of our common stock discussed under “-Conversion of Preferred Stock” below required the repricing and issuance of additional common stock warrants to the holders of warrants issued in the Private Placement. The exercise price of these warrants decreased to $4.39 per share and the number of shares issuable upon exercise of the warrants increased from 2,188,177 to 3,239,827 . On May 31, 2016, we issued to a vendor an aggregate of 78,000 shares of our common stock and, on June 14, 2016, we issued to a second vendor an aggregate of 64,153 shares of our common stock. Such shares of common stock were issued to the vendors in lieu of an aggregate cash amount of approximately $89,000 owed by us to such vendors for services previously performed by such vendors. We issued the shares to the vendors in transactions exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), in reliance on the exemptions provided by Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder and in reliance on similar exemptions under applicable state laws. The offering of the shares to the vendors did not involve a public offering, and no general solicitation or advertisement was made in connection with the offering of the shares to the vendors. On June 7, 2016, we entered into an At the Market Offering Agreement (the “ATM Agreement”) with Craig-Hallum, as sales agent, pursuant to which we may offer and sell, from time to time, through Craig-Hallum, up to $3,500,000 of shares (the “Shares”) of our common stock. Any Shares offered and sold in the offering will be issued pursuant to our effective shelf registration statement on Form S-3 (File No. 333-201907) and the related prospectus previously declared effective by the SEC on February 13, 2015, as supplemented by a prospectus supplement, dated June 7, 2016, that we filed with the SEC pursuant to Rule 424(b)(5) under the Securities Act of 1933, as amended (the “Securities Act”). The number of shares eligible for sale under the ATM Agreement will be subject to the limitations of General Instruction I.B.6 of Form S-3. Under the terms of the ATM Agreement, we will pay Craig-Hallum a placement fee of 3.25% of the gross sales price of the Shares, unless Craig-Hallum acts as principal, in which case we may sell Shares to Craig-Hallum as principal at a price to be agreed upon by us and Craig-Hallum. We will also reimburse Craig-Hallum for certain expenses incurred in connection with the ATM Agreement, and agreed to provide indemnification and contribution to Craig-Hallum with respect to certain liabilities, including liabilities under the Securities Act and the Securities Exchange Act of 1934, as amended. During the three and nine months ended September 30, 2016, we sold 1,035,255 and 1,150,569 shares under the ATM Agreement. For the nine months ended September 30, 2016, the average sales price per common share was $0.42 and the aggregate net proceeds from the sales totaled $0.5 million . During the three months ended September 30, 2016, the sale of shares under the ATM Agreement required the repricing and issuance of additional common stock warrants to the holders of warrants issued in the Private Placement. The exercise price of these warrants decreased to $4.23 per share and the number of shares issuable upon exercise of the warrants increased from 3,262,088 to 3,362,276 . Common Stock Warrants. During the nine months ended September 30, 2016 and 2015, we issued warrants to purchase 3,055,555 and 3,466,841 shares of common stock, respectively. None of the issued warrants were exercised during such periods. The warrants issued in the nine months ended September 30, 2016 included 1,174,099 warrants issued due to repricing requirements of the Private Placement and 1,881,456 warrants issued in connection with the January 2016 Offering. The warrants issued in the nine months ended September 30, 2015 included 800,492 warrants issued due to repricing requirements of the Private Placement and 2,666,349 warrants issued in connection with the February 2015 Offering and the July 2015 Offering. Warrants to purchase an aggregate of 8,976,354 shares of common stock were outstanding at September 30, 2016 . Warrant Holder Issue Year Expiration Underlying Shares Exercise Price Various Institutional Holders (1) 2012 February 2017 2,919,043 $4.23 Affiliates of Third Security, LLC (1) 2012 February 2017 443,233 $4.23 Various Institutional Holders (2) 2013 January 2018 441,655 $9.00 Affiliates of Third Security, LLC (2) 2013 January 2018 250,000 $9.00 Various Institutional Holders (3) 2014 April 2020 374,618 $4.00 Various Institutional Holders (4) 2015 February 2020 714,780 $2.24 Various Institutional Holders (5) 2015 December 2020 122,433 $1.66 Various Institutional Holders (5) 2015 December 2020 667,164 $0.01 Various Institutional Holders (6) 2015 January 2021 1,161,972 $1.21 Affiliates of Third Security, LLC (7) 2016 January 2021 161,026 $1.21 Various Institutional Holders (7) 2016 January 2021 1,720,430 $1.21 8,976,354 (1) 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 Note 9 - “Fair Value” for additional information. 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. (2) These warrants were issued in connection with the 2013 Offering, which was completed in January 2013. (3) These warrants were issued in connection with the 2014 Private Placement, which was completed in October 2014. (4) These warrants were issued in connection with the February 2015 Offering, which was completed in February 2015. (5) These warrants were issued in connection with the July 2015 Offering, which was completed in July 2015. (6) These warrants were originally issued in connection with the July 2015 Offering, which was completed in July 2015, and were amended in connection with the January 2016 Offering, which was completed in January 2016. (7) These warrants were issued in connection with the January 2016 Offering, which was completed in January 2016. 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 was initially convertible into shares of our common stock at a rate of 1 -for-1, which conversion rate was 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 Private Placement. 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 . Conversion of Preferred Stock. On January 6, 2016, the Company entered into a Conversion Agreement (the “Conversion Agreement”) with the holders (the “Preferred Holders”) of all of the Company’s outstanding shares of Series A Convertible Preferred Stock, par value $0.01 per share (the “Series A Preferred Stock”), and Series B Preferred Stock, pursuant to which, among other things, the Preferred Holders: (a) elected to convert all of the outstanding shares of Series A Preferred Stock and Series B Preferred Stock into shares of our common stock, in each case in accordance with the terms thereof, and (b) agreed that all accrued and unpaid dividends on the Series A Preferred Stock and Series B Preferred Stock would be paid by the Company in shares of our common stock at a rate of $1.00 per share of our common stock (collectively, the “Conversion”). The outstanding shares of Series A Preferred Stock were convertible into shares of our common stock at a rate of 1-for-3, and the outstanding shares of Series B Preferred Stock were convertible into shares of our common stock at a rate of 1-for-1. Prior to the entry into the Conversion Agreement, there were 2,586,205 shares of Series A Preferred Stock outstanding, which were converted into 862,057 shares of our common stock, and 1,443,297 shares of Series B Preferred Stock outstanding, which were converted into 1,443,297 shares of our common stock, for an aggregate of 2,305,354 shares of our common stock issued upon conversion of the Series A Preferred Stock and Series B Preferred Stock (the “Conversion Shares”). At the time of the entry into the Conversion Agreement, there were $3,681,591.90 in accrued and unpaid dividends on the outstanding shares of Series A Preferred Stock, which were converted, in accordance with the Conversion Agreement, into 3,681,590 shares of our common stock, and $793,236.17 in accrued and unpaid dividends on the outstanding shares of Series B Preferred Stock, which were converted, in accordance with the terms of the Conversion Agreement, into 793,235 shares of our common stock, for an aggregate of 4,474,825 shares of our common stock issued pursuant to the accrued and unpaid dividends on the Series A Preferred Stock and Series B Preferred Stock. Therefore, in connection with the full conversion of the Series A Preferred Stock and Series B Preferred Stock, plus the conversion of all accrued and unpaid dividends thereon, we issued an aggregate of 6,780,179 shares of our common stock to the Preferred Holders on January 6, 2016. Following the conversion of the shares of Series A Preferred Stock and Series B Preferred Stock into common stock, no shares of Series A Preferred Stock or Series B Preferred Stock remain outstanding. Preferred Stock Dividends. We had cumulative undeclared dividends on our Series A Preferred Stock and Series B Preferred Stock of ze

FAIR VALUE

FAIR VALUE9 Months Ended
Sep. 30, 2016
Fair Value Disclosures [Abstract]
FAIR VALUEFAIR 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 book value approximates fair market value due to the variable interest rate it bears. Common Stock Warrant Liabilities. 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. 2012 Warrant Liability The 2012 Warrant Liability represents the fair value of the 1.2 million warrants issued in February 2012, which, through a series of changes in exercise price since February 2012, are now exercisable for 3.4 million shares of common stock. 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 2012 Warrant Liability is considered a Level 3 financial instrument and is valued using a Monte Carlo simulation model. 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 $0.28 as of September 30, 2016 ; the amount of the down-round financing; the timing of the down-round financing; and the expected exercise period of 0.41 years from the valuation date. Static Technical Inputs include: volatility of 67% and the risk-free interest rate of 0.42% based on the 1 -year U.S. Treasury yield interpolated from the six-month and one-year U.S. Treasury bonds. Simulated Business Inputs include: the probability of down-round financing, which was estimated to be 100% for simulated equity values below the down-round financing cut-off point. Simulated Technical Inputs include: our equity value follows a geometric Brownian motion and is simulated over weekly periods; and a down-round financing event that was randomly simulated in an iteration based on the 100% discrete probability of a down-round financing for those iterations where our simulated equity value at the expected timing of a down-round financing event was below the down-round financing cut-off point. During the three and nine months ended September 30, 2016 and 2015, the changes in the fair value of the liability measured using significant unobservable inputs (Level 3) were comprised of the following: Dollars in Thousands For the Three Months Ended September 30, 2016 September 30, 2015 Beginning balance at July 1 $ — $ 560 Total (gains) or losses: Recognized in earnings — (385 ) Balance at September 30 $ — $ 175 Dollars in Thousands For the Nine Months Ended September 30, 2016 September 30, 2015 Beginning balance at January 1 $ 350 $ 145 Total (gains) or losses: Recognized in earnings (350 ) 30 Balance at September 30 $ — $ 175 2016 Warrant Liability The 2016 Warrant Liability represents the fair value of the 1.8 million warrants issued in January 2016. 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. The Common Stock Warrant Liability is considered a Level 3 financial instrument and is valued using a binomial lattice simulation model. This method is well suited to valuing options with non-standard features. Assumptions and inputs used in the valuation of the common stock warrants include; our equity value, which was estimated using our stock price of $0.28 as of September 30, 2016; volatility of 86% ; and a risk-free interest rate of 1.04% . During the three and nine months ended September 30, 2016, the changes in the fair value of the liability measured using significant unobservable inputs (Level 3) were comprised of the following: Dollars in Thousands For the Three Months Ended September 30, 2016 Beginning balance at July 1 $ 1,442 Total (gains) or losses: Recognized in earnings (12 ) Balance at September 30 $ 1,430 Dollars in Thousands For the Nine Months Ended September 30, 2016 Beginning balance at January 1 $ — Additions 1,437 Total (gains) or losses: Recognized in earnings (7 ) Balance at September 30 $ 1,430 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 OPTIONS9 Months Ended
Sep. 30, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
STOCK OPTIONSSTOCK OPTIONS Stock Options. The following table summarizes stock option activity during the nine months ended September 30, 2016 : Number of Options Weighted-Average Exercise Price Outstanding at January 1, 2016 1,107,794 $ 3.45 Granted 25,250 0.84 Forfeited (252,589 ) 3.28 Outstanding at September 30, 2016 880,455 $ 3.39 Exercisable at September 30, 2016 574,650 $ 4.08 During the nine months ended September 30, 2016 , we granted options to purchase 25,250 shares of our common stock at a weighted-average exercise price of $0.84 per share under our 2006 Equity Incentive Plan, as amended (the “Plan”). Options to purchase an aggregate of 641,560 shares of our common stock were granted during the nine months ended September 30, 2015 . As of September 30, 2016 , there were 574,650 options exercisable and 860,411 options that were vested 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 nine months ended September 30, 2016 : Number of SARs Weighted-Average Exercise Price Outstanding at January 1, 2016 98,333 $ 4.14 Outstanding at September 30, 2016 98,333 $ 4.14 Exercisable at September 30, 2016 92,558 $ 4.20 All outstanding SARs were issued solely to our executive officers. As of September 30, 2016 , 92,558 shares subject to outstanding SARs were exercisable and 98,333 shares were vested or expected to vest. The weighted-average exercise price of these SARs was $4.14 per share and the aggregate intrinsic value was zero .

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS9 Months Ended
Sep. 30, 2016
Subsequent Events [Abstract]
Subsequent EventsSUBSEQUENT EVENTS Merger Agreement On October 12, 2016, Transgenomic, New Haven Labs Inc., a wholly owned subsidiary of Transgenomic (“Merger Sub” and, together with Transgenomic, the “Transgenomic Parties”), and Precipio Diagnostics, LLC (“Precipio”) entered into an Agreement and Plan of Merger (the “Merger Agreement”) pursuant to which Precipio will become a wholly owned subsidiary of Transgenomic (the “Merger”), on the terms and subject to the conditions set forth in the Merger Agreement. Following the Merger, Transgenomic will change its name to Precipio, Inc. (“New Precipio”). The parties expect the Merger to close in 2016. When the Merger is completed, (i) each outstanding common unit of Precipio will be converted into the right to receive an amount of shares of New Precipio common stock based on an exchange ratio set forth in the Merger Agreement, which is dependent on the relative amount of outstanding liabilities of each of the parties at the time of the Merger, together with cash in lieu of fractional units, which will result in Precipio unit holders owning between 62% and 80% of the outstanding shares of New Precipio common stock (not taking into account the issuance of New Precipio preferred stock in the Merger or the private placement discussed below) and (ii) each outstanding preferred unit of Precipio will be converted into the right to receive shares of New Precipio preferred stock in an aggregate amount equal to $3 million . In connection with the Merger, at the effective time of the Merger, New Precipio also will issue shares of New Precipio preferred stock in a private placement, whereby: • holders of indebtedness of Transgenomic will receive $3 million in New Precipio preferred stock in exchange for such indebtedness; and • New Precipio will issue for cash up to $7 million in New Precipio preferred stock to investors in a private placement. New Precipio preferred stock will be issued based on a pre-money valuation of New Precipio of $25 million and will represent, in the aggregate, approximately 34% of the outstanding shares of New Precipio common stock on an as-converted basis, including New Precipio preferred stock issued in the Merger and the private placement. The board of managers of Precipio and the boards of directors of Transgenomic and Merger Sub, and Transgenomic, in its capacity as the sole stockholder of Merger Sub, have each approved the Merger Agreement and the board of managers of Precipio and the board of directors of Transgenomic have each recommended that their respective equity holders approve the transactions contemplated by the Merger Agreement. Transgenomic will hold a special meeting of its stockholders to approve the issuance of shares of Transgenomic common stock pursuant to the Merger, as required by Nasdaq Listing Rules, as well as certain other matters (the “Special Meeting”). The Merger Agreement contains various representations, warranties and covenants of the Transgenomic Parties and Precipio, including, among others, covenants (i) by each of Precipio and Transgenomic to operate its business in the ordinary course, (ii) by each of Precipio and Transgenomic not to engage in certain kinds of transactions during the period between the execution of the Merger Agreement and the completion of the Merger, (iii) by Precipio to have its members approve the Merger and (iv) by Transgenomic to hold the Special Meeting. Under the Merger Agreement, Precipio and Transgenomic are subject to customary “no shop” provisions that limit their respective abilities to solicit alternative acquisition proposals from third parties or to provide confidential information to third parties, subject to a “fiduciary out” provision that allows Precipio and Transgenomic to provide information and participate in discussions with respect to certain unsolicited written proposals and to terminate the Merger Agreement and enter into an acquisition agreement with respect to a superior proposal in compliance with the terms of the Merger Agreement (a “Superior Proposal”). Completion of the Merger is subject to various conditions, including, among others: (i) approval of the holders of a majority of Transgenomic’s shares of outstanding common stock, (ii) approval of the requisite amount of the members of Precipio, (iii) approval of an amendment to the Certificate of Incorporation of Transgenomic contemplating the New Preferred Stock Financing (described below) and changing the name of Transgenomic to Precipio, Inc. or such other name as determined by Precipio, (iv) obtaining certain third party consents, (v) the absence of any judgment, injunction, order or decree prohibiting or enjoining the completion of the Merger, (vi) consummation of the New Preferred Stock Financing, (vii) approval of listing of the Parent Common Stock on NASDAQ, (viii) completion of the Common Unit Recapitalization (described above), (ix) increase in the size of the Transgenomic board by two members and the appointment of designees in accordance with the Merger Agreement and (x) the lock-up of certain Transgenomic stockholders and Precipio members. In addition, the obligation of the parties to complete the Merger is subject to certain other conditions, including (i) subject to the standards set forth in the Merger Agreement, the accuracy of the representations and warranties of the other party, (ii) compliance of each party with its covenants in all material respects and (iii) no material adverse effect of either party. The Merger Agreement contains certain termination rights for both the Transgenomic Parties and Precipio. Either may terminate the Merger Agreement if the Merger is not completed on or before the date that is six months following the date of the Merger Agreement. Moreover, either party may terminate the Merger Agreement if the other party changes its recommendation to its security holders to approve the Merger and the related transactions or enter into an agreement with a third party regarding a Superior Proposal (as defined in the Merger Agreement). The Merger Agreement also provides that, upon termination of the Merger Agreement under certain circumstances, Transgenomic will be required to pay to Precipio a termination payment of $256,500 . If the Merger Agreement is terminated for certain other reasons, Precipio will be required to pay Transgenomic a termination payment of $256,500 . The foregoing description of the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the Merger Agreement, which is attached hereto as Exhibit 2.1 and incorporated by reference herein. The Merger Agreement has been included as an exhibit hereto solely to provide investors and security holders with information regarding its terms. It is not intended to be a source of financial, business or operational information about Transgenomic, Precipio or their respective subsidiaries or affiliates. The representations, warranties and covenants contained in the Merger Agreement are made only for purposes of the Merger Agreement and are made as of specific dates; are solely for the benefit of the parties; may be subject to qualifications and limitations agreed upon by the parties in connection with negotiating the terms of the Merger Agreement, including being qualified by confidential disclosures made for the purpose of allocating contractual risk between the parties rather than establishing matters as facts; and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors or security holders. Investors and security holders should not rely on the representations, warranties and covenants or any description thereof as characterizations of the actual state of facts or condition of Transgenomic, Precipio or their respective subsidiaries or affiliates. Moreover, information concerning the subject matter of the representations, warranties and covenants may change after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in public disclosures. In connection with the Merger, the Supporting Stockholders and Supporting Members (as defined in the Merger Agreement) are obligated to enter into a lock-up agreement with the combined company at the Effective Time pursuant to which the Supporting Stockholders will agree, among other things, not to sell shares of Transgenomic common stock for the six month period beginning at the Effective Time. The Merger Agreement also provides that the combined company will enter into employment agreements with certain employees of Precipio at the Effective Time and that the officers of the combined company will be agreed to by the parties prior to the Effective Time. Special Meeting of Stockholders At our 2016 Special Meeting of Stockholders (the “Special Meeting”) held on October 31, 2016, our stockholders approved the proposal to authorize our Board of Directors to, in its discretion, amend our Third Amended and Restated Certificate of Incorporation to effect a reverse stock split of our common stock at a ratio of between one-for-ten to one-for-thirty, such ratio to be determined by our Board of Directors (the “Reverse Split Proposal”). The Reverse Split Proposal was described in detail in our definitive proxy statement filed with the Securities and Exchange Commission on September 22, 2016, as supplemented on October 13, 2016. The approval of the Reverse Split Proposal by our stockholders provides our Board of Directors with the authority to carry out the reverse stock split, but our Board of Directors is not obligated to do so. If our Board of Directors determines to effect the reverse stock split, it intends to select a reverse stock split ratio that it believes would be most likely to achieve the anticipated benefits of the reverse stock split. Notwithstanding approval of the Reverse Split Proposal by our stockholders, our Board of Directors may, in its sole discretion, abandon the Reverse Split Proposal and determine, prior to the effectiveness of any filing with the Secretary of State of the State of Delaware, not to effect the reverse stock split. If our Board of Directors fails to implement the reverse stock split on or prior to the first anniversary date of the Special Meeting, stockholder approval again would be required prior to implementing any reverse stock split.

SUMMARY OF SIGNIFICANT ACCOUN19

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)9 Months Ended
Sep. 30, 2016
Accounting Policies [Abstract]
Basis of PresentationBasis of Presentation. The accompanying condensed consolidated financial statements are presented in conformity with GAAP. All amounts are presented in U.S. Dollars (“$”). Supplemental cash flows from discontinued operations are presented in Note 3 - “Discontinued Operations”. We have evaluated events occurring subsequent to September 30, 2016 for potential recognition or disclosure in the consolidated financial statements and concluded there were no subsequent events that required recognition or disclosure. The condensed consolidated balance sheet as of December 31, 2015 was derived from our audited balance sheet as of that date. There has been no change in the balance sheet from December 31, 2015. The accompanying condensed consolidated financial statements as of and for the three and nine months ended September 30, 2016 and 2015 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, 2015 contained in our Annual Report on Form 10-K, filed with the Securities and Exchange Commission (the “SEC”) on April 14, 2016. The results of operations for the interim periods presented are not necessarily indicative of the results for fiscal year 2016.
ReclassificationCertain prior year amounts have been reclassified to conform to the current year presentation in our condensed consolidated financial statements, which consists of the effects of reclassifications from the presentation of our discontinued operations.
Principles of ConsolidationPrinciples of Consolidation. The condensed 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 UncertaintiesRisks 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 EstimatesUse 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 condensed consolidated financial statements.
Fair ValueFair Value. Unless otherwise specified, book value approximates fair market value. The common stock warrant liability is recorded at fair value.
Cash and Cash EquivalentsCash and Cash Equivalents and Other Current Assets. Cash and cash equivalents include cash and investments with original maturities at the date of acquisition of three months or less.
Concentrations of CashConcentrations of Cash. From time to time, we may maintain a cash position with financial institutions in amounts that exceed federally insured limits.
Accounts ReceivableWhile payment terms are generally 30 days , we have also provided extended payment terms in certain cases. Accounts receivable are carried at original invoice amount and shown net of allowance for doubtful accounts. 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 regularly evaluating individual payor receivables and considering a payor’s financial condition, credit history, reimbursement rates and current economic conditions. Accounts receivable are written off when deemed uncollectible and after all collection efforts have been exhausted. Recoveries of accounts receivable previously written off are recorded as a reduction in bad debt expense when received.
InventoryInventories. 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.
Property and EquipmentProperty 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
Intangible AssetsIntangible Assets. Intangible assets include intellectual property and patents. 1. Intellectual Property. Initial costs paid to license intellectual property from independent third parties are capitalized and amortized using the straight-line method over the license period. Ongoing royalties related to such licenses are expensed as incurred. 2. Patents. We capitalize legal costs, filing fees and other expenses associated with obtaining patents on new discoveries and amortize these costs using the straight-line method over the shorter of the legal life of the patent or its economic life beginning on the date the patent is issued.
Stock-Based CompensationStock-Based Compensation. All stock-based awards to date have exercise prices equal to the market value of the shares at the date of grant and have 10 -year contractual terms. Unvested awards as of September 30, 2016 had vesting periods of up to three years from the date of grant. None of the awards outstanding at September 30, 2016 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, net of estimated forfeitures, 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 RecognitionNet 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. In our Biomarker Identification laboratory, we perform services on a project by project basis. When we receive payment in advance, we initially defer the revenue and recognize it when we deliver the service. These projects typically do not extend beyond one year. At each of September 30, 2016 and December 31, 2015 , deferred net sales associated with pharmacogenomics research projects included in the balance sheet in deferred revenue was $0.2 million . Net sales from Patient Testing laboratories, reported as part of discontinued operations, 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 payers, are reflected in the estimated contractual allowance applied prospectively. In the fourth quarter of 2015, we adjusted our contractual allowance rates to better reflect the reimbursement level we expect to achieve on Patient Testing billings. The adjustment negatively impacted our Patient Testing revenues for all periods after the third quarter of 2015. (See Note 3 - “Discontinued Operations”). Net sales of Genetic Assays and Platforms products, reported as discontinued operations (See Note 3 - “Discontinued Operations”) 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.
Common Stock WarrantsCommon 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”). 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 Liabilities are considered Level Three financial instruments for purposes of fair value measurement.
Loss Per ShareLoss 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.
Recent Accounting PronouncementsRecent Accounting Pronouncements. In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (“ASU No. 2014-09”). This 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. ASU No. 2014-09 will replace most existing revenue recognition guidance in GAAP when it becomes effective. In July 2015, the FASB decided to defer the effective date of this new accounting guidance by one year. As a result, ASU No. 2014-09 will be effective for us for all annual and interim reporting periods beginning after December 15, 2017 and early adoption would be permitted as of the original effective date. The new standard permits the use of either the retrospective or cumulative effect transition method. We do not expect to early adopt this guidance and we have not selected a transition method. We are currently evaluating the impact this guidance will have on our financial condition, results of operations and cash flows. In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40)(“ASU No. 2014-15”) . This guidance addresses management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. The standard will be effective for the first interim period within annual reporting periods beginning after December 15, 2016. Early adoption is permitted. We do not expect to early adopt this guidance and do not believe that the adoption of this guidance will have a material impact on our consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases. The new standard amends the recognition of lease assets and lease liabilities by lessees for those leases currently classified as operating leases and amends disclosure requirements associated with leasing arrangements. The new standard is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2018. Early adoption is permitted. The new standard must be adopted using a modified retrospective transition, and provides for certain practical expedients. Transition will require application of the new guidance at the beginning of the earliest comparative period presented. We are currently assessing the impact that the adoption of this ASU will have on our consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The new standard simplifies several aspects related to the accounting for share-based payment transactions, including the accounting for income taxes, statutory tax withholding requirements, forfeitures and classification on the statement of cash flows. This guidance is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2016; however, early adoption is permitted. We do not expect to early adopt this guidance and are currently evaluating the impact this guidance will have on our financial condition, results of operations and cash flows.

SUMMARY OF SIGNIFICANT ACCOUN20

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)9 Months Ended
Sep. 30, 2016
Accounting Policies [Abstract]
Summary of activity for the allowance for doubtful accountsThe following is a summary of activity for the allowance for doubtful accounts from continuing operations during the three and nine months ended September 30, 2016 and 2015 : Dollars in Thousands Beginning Balance Additions Deductions Ending Balance Three Months Ended September 30, 2016 $ 157 $ 2 $ (19 ) $ 140 Three Months Ended September 30, 2015 $ 20 $ 50 $ — $ 70 Nine Months Ended September 30, 2016 $ 87 $ 72 $ (19 ) $ 140 Nine Months Ended September 30, 2015 $ 20 $ 50 $ — $ 70
Activity for the allowance for obsolete inventoryThe following is a summary of activity for the allowance for obsolete inventory during the three and nine months ended September 30, 2016 and 2015 : Dollars in Thousands Beginning Balance Additions Deductions Ending Balance Three Months Ended September 30, 2016 $ 63 $ — $ — $ 63 Three Months Ended September 30, 2015 $ — $ — $ — $ — Nine Months Ended September 30, 2016 $ 63 $ — $ — $ 63 Nine Months Ended September 30, 2015 $ — $ — $ — $ —
Schedule of property and equipment, useful livesDepreciation 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

DISCONTINUED OPERATIONS (Tables

DISCONTINUED OPERATIONS (Tables)9 Months Ended
Sep. 30, 2016
Discontinued Operations and Disposal Groups [Abstract]
Schedule of discontinued operations impact on income statement and balance sheetsResults of the discontinued operations consisted of the following: Three months ended September 30, Nine months ended September 30, (Dollars in thousands) 2016 2015 2016 2015 Net sales $ 283 $ 5,507 $ 1,960 $ 17,868 Cost of goods sold 57 3,203 1,251 9,980 Gross profit 226 2,304 709 7,888 Selling, general and administrative expense 252 1,910 1,621 8,325 Research and development expense 98 106 166 330 Impairment of long-lived assets — 7,024 — 7,024 Operating income (loss) from discontinued operations (124 ) (6,736 ) (1,078 ) (7,791 ) Gain on sale of business/assets 90 1,532 1,053 1,532 Income (loss) from discontinued operations before income taxes (34 ) (5,204 ) (25 ) (6,259 ) Income tax expense — 44 — 133 Income (loss) from discontinued operations, net of taxes $ (34 ) $ (5,248 ) $ (25 ) $ (6,392 ) Assets and liabilities of the discontinued operations are classified as assets held for sale and liabilities held for sale in the condensed consolidated balance sheets and consisted of the following: Dollars in Thousands September 30, December 31, ASSETS Accounts receivable, net $ 244 $ 1,905 Other current assets 21 82 Total Assets $ 265 $ 1,987 LIABILITIES Accrued compensation $ — $ 264 Total Liabilities $ — $ 264 The following is a summary of activity for the allowance for doubtful accounts from discontinued operations during the three and nine months ended September 30, 2016 and 2015. The allowance for doubtful accounts from discontinued operations is included in the assets held for sale in the condensed consolidated balance sheets. Dollars in Thousands Beginning Balance Additions Deductions Ending Balance Three Months Ended September 30, 2016 $ 10,462 $ — $ (5,192 ) $ 5,270 Three Months Ended September 30, 2015 $ 8,406 $ 1,052 $ (168 ) $ 9,290 Nine Months Ended September 30, 2016 $ 14,664 $ — $ (9,394 ) $ 5,270 Nine Months Ended September 30, 2015 $ 7,927 $ 3,782 $ (2,419 ) $ 9,290

INTANGIBLES AND OTHER ASSETS (T

INTANGIBLES AND OTHER ASSETS (Tables)9 Months Ended
Sep. 30, 2016
Goodwill and Intangible Assets Disclosure [Abstract]
Schedule of long-lived intangible assetsLong-lived intangible assets as of September 30, 2016 and December 31, 2015 consisted of the following: Dollars in Thousands September 30, 2016 Cost Accumulated Amortization Net Book Value Patents 680 80 600 Intellectual property 672 290 382 $ 1,352 $ 370 $ 982 Dollars in Thousands December 31, 2015 Cost Accumulated Amortization Net Book Value Patents 980 274 706 Intellectual property 671 207 464 $ 1,651 $ 481 $ 1,170 Estimated Useful Life Patents Life of the patent Intellectual property 7 years

DEBT (Tables)

DEBT (Tables)9 Months Ended
Sep. 30, 2016
Debt Disclosure [Abstract]
Schedule of debt Dollars in Thousands September 30, 2016 December 31, 2015 Revolving Line of Credit (1) $ 3,243 $ 3,025 Term Loan (2) 4,000 4,000 Convertible Promissory Notes (3) 571 571 Total debt 7,814 7,596 Current portion of long-term debt (7,814 ) (7,596 ) Long-term debt, net of current maturities $ — $ — (1) Revolving Line of Credit. Amounts advanced under the Revolving Line accrue interest at an annual rate equal to the greater of (a) 6.25% or (b) the Wall Street Journal prime rate plus 3% . The current interest rate is 6.50% . Interest is payable on a monthly basis, with the balance payable at the maturity of the Revolving Line. Under the Loan Agreement, we pay the Lenders a commitment fee of $20,000 on each one-year anniversary of March 13, 2013, 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 November 1, 2017. (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, the maturity date of the Loan Agreement was extended until November 1, 2017 and no principal payments on the Term Loan are due until such date. The current interest rate is 9.1% . We 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 1% of the total outstanding balance under the Term Loan. Additional Terms. The Loan Agreement contains affirmative and negative covenants. Under the Term Loan, we 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 September 30, 2016, we were not in compliance with the Loan Agreement, as amended by the Ninth Amendment, due to the fact that we did not make the required monthly interest payments during the third quarter and have not received a waiver for the non-compliance and as such all debt has been classified as current at September 30, 2016. 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, would increase the applicable interest rate under the Revolving Line or Term Loan (or both) by 5% and would permit the Lenders to exercise remedies with respect to the collateral under the Loan Agreement. As of the date these financials were available for release, the Lenders have not exercised the remedies under the Loan Agreement. (3) Convertible Promissory Notes. The Notes accrue interest at a rate of 6% per year and mature on December 31, 2016.

STOCKHOLDERS' EQUITY (Tables)

STOCKHOLDERS' EQUITY (Tables)9 Months Ended
Sep. 30, 2016
Stockholders' Equity Note [Abstract]
Schedule of stockholders' equity, including warrants and rightsWarrant Holder Issue Year Expiration Underlying Shares Exercise Price Various Institutional Holders (1) 2012 February 2017 2,919,043 $4.23 Affiliates of Third Security, LLC (1) 2012 February 2017 443,233 $4.23 Various Institutional Holders (2) 2013 January 2018 441,655 $9.00 Affiliates of Third Security, LLC (2) 2013 January 2018 250,000 $9.00 Various Institutional Holders (3) 2014 April 2020 374,618 $4.00 Various Institutional Holders (4) 2015 February 2020 714,780 $2.24 Various Institutional Holders (5) 2015 December 2020 122,433 $1.66 Various Institutional Holders (5) 2015 December 2020 667,164 $0.01 Various Institutional Holders (6) 2015 January 2021 1,161,972 $1.21 Affiliates of Third Security, LLC (7) 2016 January 2021 161,026 $1.21 Various Institutional Holders (7) 2016 January 2021 1,720,430 $1.21 8,976,354 (1) 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 Note 9 - “Fair Value” for additional information. 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. (2) These warrants were issued in connection with the 2013 Offering, which was completed in January 2013. (3) These warrants were issued in connection with the 2014 Private Placement, which was completed in October 2014. (4) These warrants were issued in connection with the February 2015 Offering, which was completed in February 2015. (5) These warrants were issued in connection with the July 2015 Offering, which was completed in July 2015. (6) These warrants were originally issued in connection with the July 2015 Offering, which was completed in July 2015, and were amended in connection with the January 2016 Offering, which was completed in January 2016. (7) These warrants were issued in connection with the January 2016 Offering, which was completed in January 2016.

FAIR VALUE (Tables)

FAIR VALUE (Tables)9 Months Ended
Sep. 30, 2016
Fair Value Disclosures [Abstract]
Schedule of changes in fair value of liabilityDuring the three and nine months ended September 30, 2016 and 2015, the changes in the fair value of the liability measured using significant unobservable inputs (Level 3) were comprised of the following: Dollars in Thousands For the Three Months Ended September 30, 2016 September 30, 2015 Beginning balance at July 1 $ — $ 560 Total (gains) or losses: Recognized in earnings — (385 ) Balance at September 30 $ — $ 175 Dollars in Thousands For the Nine Months Ended September 30, 2016 September 30, 2015 Beginning balance at January 1 $ 350 $ 145 Total (gains) or losses: Recognized in earnings (350 ) 30 Balance at September 30 $ — $ 175 During the three and nine months ended September 30, 2016, the changes in the fair value of the liability measured using significant unobservable inputs (Level 3) were comprised of the following: Dollars in Thousands For the Three Months Ended September 30, 2016 Beginning balance at July 1 $ 1,442 Total (gains) or losses: Recognized in earnings (12 ) Balance at September 30 $ 1,430 Dollars in Thousands For the Nine Months Ended September 30, 2016 Beginning balance at January 1 $ — Additions 1,437 Total (gains) or losses: Recognized in earnings (7 ) Balance at September 30 $ 1,430

STOCK OPTIONS (Tables)

STOCK OPTIONS (Tables)9 Months Ended
Sep. 30, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Summary of stock option activityThe following table summarizes stock option activity during the nine months ended September 30, 2016 : Number of Options Weighted-Average Exercise Price Outstanding at January 1, 2016 1,107,794 $ 3.45 Granted 25,250 0.84 Forfeited (252,589 ) 3.28 Outstanding at September 30, 2016 880,455 $ 3.39 Exercisable at September 30, 2016 574,650 $ 4.08
Summary of SARs activityThe following table summarizes SARs activity under the Plan during the nine months ended September 30, 2016 : Number of SARs Weighted-Average Exercise Price Outstanding at January 1, 2016 98,333 $ 4.14 Outstanding at September 30, 2016 98,333 $ 4.14 Exercisable at September 30, 2016 92,558 $ 4.20

BUSINESS DESCRIPTION (Details)

BUSINESS DESCRIPTION (Details) $ in Millions9 Months Ended
Sep. 30, 2016USD ($)operating_segmentsSep. 30, 2015operating_segments
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of operating segments | operating_segments1 2
Working capital | $ $ (17.4)

SUMMARY OF SIGNIFICANT ACCOUN28

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Narratives) (Details) - USD ($)3 Months Ended9 Months Ended
Sep. 30, 2016Sep. 30, 2015Sep. 30, 2016Sep. 30, 2015Dec. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Other current assets $ 314,000 $ 314,000 $ 537,000
Current prepaid expense100,000 100,000
Other current receivables200,000 $ 200,000
Share-based compensation arrangement by share-based payment award, expiration period10 years
Stock-based compensation expense $ 111,000 $ 489,000
Unrecognized compensation expense related to unvested stock awards, not yet recognized $ 100,000 $ 100,000
Unvested stock options, unrecognized compensation expense weighted average recognition period1 year 1 month 1 day
Stock options, granted (in shares)11,250 25,250 641,560
Stock options, fair value assumptions, risk free interest rate (as a percent)1.56%
Stock options, fair value assumptions, dividend yield0.00%
Stock options, fair value assumptions, expected life6 years
Stock options, fair value assumptions, historical volatility rate (as a percent)85.00%
Common stock rights issued (in shares)3,055,555 3,466,841
Deferred revenue $ 176,000 $ 176,000 217,000
Options, warrants and conversion rights, common stock callable and antidilutive (in shares)10,701,453 10,392,728
Pharmacogenomic Services
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Deferred revenue200,000 $ 200,000 $ 200,000
Executive Officers
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options, unvested options, vesting period3 years
Common stock rights issued (in shares)98,333
Selling, General and Administrative Expenses
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense $ 0 $ 200,000 $ 100,000 $ 500,000
Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options, unvested options, vesting period3 years

SUMMARY OF SIGNIFICANT ACCOUN29

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Accounts Receivable) (Details) - USD ($) $ in Thousands3 Months Ended9 Months Ended
Sep. 30, 2016Sep. 30, 2015Sep. 30, 2016Sep. 30, 2015
Allowance for Doubtful Accounts Receivable [Roll Forward]
Beginning balance $ 157 $ 20 $ 87 $ 20
Additions2 50 72 50
Deductions(19)0 (19)0
Ending balance $ 140 $ 70 $ 140 $ 70
Accounts receivable, general payment terms30 days

SUMMARY OF SIGNIFICANT ACCOUN30

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Inventories) (Details) - USD ($) $ in Thousands3 Months Ended9 Months Ended
Sep. 30, 2016Sep. 30, 2015Sep. 30, 2016Sep. 30, 2015
Accounting Policies [Abstract]
Net raw materials inventory $ 100 $ 100
Obsolete inventory [Roll Forward]
Beginning Balance63 $ 0 63 $ 0
Additions0 0 0 0
Deductions0 0 0 0
Ending Balance $ 63 $ 0 $ 63 $ 0

SUMMARY OF SIGNIFICANT ACCOUN31

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Property, Plant and Equipment) (Details) - USD ($) $ in Millions3 Months Ended9 Months Ended
Sep. 30, 2016Sep. 30, 2015Sep. 30, 2016Sep. 30, 2015
Property, Plant and Equipment [Line Items]
Depreciation expense $ 0.1 $ 0.1 $ 0.1 $ 0.2
Leasehold Improvements | Minimum
Property, Plant and Equipment [Line Items]
Property and equipment, estimated useful lives1 year
Leasehold Improvements | Maximum
Property, Plant and Equipment [Line Items]
Property and equipment, estimated useful lives10 years
Furniture and Fixtures | Minimum
Property, Plant and Equipment [Line Items]
Property and equipment, estimated useful lives3 years
Furniture and Fixtures | Maximum
Property, Plant and Equipment [Line Items]
Property and equipment, estimated useful lives7 years
Production Equipment | Minimum
Property, Plant and Equipment [Line Items]
Property and equipment, estimated useful lives3 years
Production Equipment | Maximum
Property, Plant and Equipment [Line Items]
Property and equipment, estimated useful lives7 years
Computer Equipment | Minimum
Property, Plant and Equipment [Line Items]
Property and equipment, estimated useful lives3 years
Computer Equipment | Maximum
Property, Plant and Equipment [Line Items]
Property and equipment, estimated useful lives7 years
Research and Development Equipment | Minimum
Property, Plant and Equipment [Line Items]
Property and equipment, estimated useful lives2 years
Research and Development Equipment | Maximum
Property, Plant and Equipment [Line Items]
Property and equipment, estimated useful lives7 years

DISCONTINUED OPERATIONS (Narrat

DISCONTINUED OPERATIONS (Narratives) (Details) - USD ($) $ in Thousands3 Months Ended9 Months Ended12 Months Ended
Sep. 30, 2016Sep. 30, 2015Sep. 30, 2016Sep. 30, 2015Dec. 31, 2015Nov. 25, 2015Sep. 08, 2015
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
LOSS FROM DISCONTINUED OPERATIONS, NET OF TAXES $ (34) $ (5,248) $ (25) $ (6,392)
Genetic Assays and Platforms business
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Purchase price $ 2,100
(Loss) gain on sale of business $ 1,500
Genetic Assays and Platforms business | ADSTEC Corporation
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Purchase price $ 300
(Loss) gain on sale of business $ (1,700)
Patient Testing | Discontinued operations
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
LOSS FROM DISCONTINUED OPERATIONS, NET OF TAXES $ 1,100

DISCONTINUED OPERATIONS (Revenu

DISCONTINUED OPERATIONS (Revenues and Net Income (Loss)) (Details) - USD ($) $ in Thousands3 Months Ended9 Months Ended
Sep. 30, 2016Sep. 30, 2015Sep. 30, 2016Sep. 30, 2015
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Income (loss) from discontinued operations, net of taxes $ (34) $ (5,248) $ (25) $ (6,392)
Discontinued operations | Genetic Assays and Platforms and Patient Testing
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Net sales283 5,507 1,960 17,868
Cost of goods sold57 3,203 1,251 9,980
Gross profit226 2,304 709 7,888
Selling, general and administrative expense252 1,910 1,621 8,325
Research and development expense98 106 166 330
Impairment of long-lived assets0 7,024 0 7,024
Operating income (loss) from discontinued operations(124)(6,736)(1,078)(7,791)
Gain on sale of business/assets90 1,532 1,053 1,532
Income (loss) from discontinued operations before income taxes(34)(5,204)(25)(6,259)
Income tax expense0 44 0 133
Income (loss) from discontinued operations, net of taxes $ (34) $ (5,248) $ (25) $ (6,392)

DISCONTINUED OPERATIONS (Assets

DISCONTINUED OPERATIONS (Assets and Liabilities Held for Sale) (Details) - Discontinued operations - Genetic Assays and Platforms and Patient Testing - USD ($) $ in ThousandsSep. 30, 2016Dec. 31, 2015
ASSETS
Accounts receivable, net $ 244 $ 1,905
Other current assets21 82
Total Assets265 1,987
LIABILITIES
Accrued compensation0 264
Total Liabilities $ 0 $ 264

DISCONTINUED OPERATIONS (Allowa

DISCONTINUED OPERATIONS (Allowance for Doubtful Accounts) (Details) - Genetic Assays and Platforms and Patient Testing - Discontinued operations - USD ($) $ in Thousands3 Months Ended9 Months Ended
Sep. 30, 2016Sep. 30, 2015Sep. 30, 2016Sep. 30, 2015
Disposal Group, Including Discontinued Operations, Allowance for Doubtful Accounts [Roll Forward]
Beginning Balance $ 10,462 $ 8,406 $ 14,664 $ 7,927
Additions0 1,052 0 3,782
Deductions(5,192)(168)(9,394)(2,419)
Ending Balance $ 5,270 $ 9,290 $ 5,270 $ 9,290

INTANGIBLES AND OTHER ASSETS (D

INTANGIBLES AND OTHER ASSETS (Details) - USD ($) $ in Thousands9 Months Ended
Sep. 30, 2016Sep. 30, 2015Dec. 31, 2015
Finite-Lived Intangible Assets, Net [Abstract]
Cost $ 1,352 $ 1,651
Accumulated Amortization370 481
Net Book Value982 1,170
Amortization expense for intangible assets200 $ 100
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
Amortization expense, 2016100
Amortization expense, 2017100
Amortization expense, 2018100
Amortization expense, 2019100
Amortization expense, 2020100
Patents
Finite-Lived Intangible Assets, Net [Abstract]
Cost680 980
Accumulated Amortization80 274
Net Book Value600 706
Intellectual property
Finite-Lived Intangible Assets, Net [Abstract]
Cost672 671
Accumulated Amortization290 207
Net Book Value $ 382 $ 464
Estimated Useful Life7 years

DEBT (Schedule of Debt) (Detail

DEBT (Schedule of Debt) (Details) - USD ($)9 Months Ended
Sep. 30, 2016Dec. 31, 2015Dec. 31, 2014
Debt Instrument [Line Items]
Total debt $ 7,814,000 $ 7,596,000
Current portion of long-term debt(7,814,000)(7,596,000)
Long-term debt, net of current maturities0 0
Line of credit | Revolving credit facility
Debt Instrument [Line Items]
Total debt $ 3,243,000 3,025,000
Annual interest rate (as a percent)6.25%
Effective interest rate (as a percent)6.50%
Commitment fee amount $ 20,000
Commitment fee (as a percent)0.50%
Line of credit | Revolving credit facility | Wall Street Journal prime rate
Debt Instrument [Line Items]
Basis spread on variable rate (as a percent)3.00%
Term loan
Debt Instrument [Line Items]
Total debt $ 4,000,000 4,000,000
Proceeds from issuance of long-term debt $ 4,000,000
Current interest rate (as a percent)9.10%
Future debt extinguishment costs $ 120,000
Prepayment penalty percentage of outstanding balance (as a percent)1.00%
Increase in interest rate in case of debt default (as a percent)5.00%
Convertible promissory notes
Debt Instrument [Line Items]
Total debt $ 571,000 $ 571,000
Annual interest rate (as a percent)6.00%6.00%

DEBT (Revolving Line and Term L

DEBT (Revolving Line and Term Loan) (Details) - USD ($)Aug. 10, 2015Mar. 13, 2013Mar. 31, 2015Sep. 30, 2016Jan. 06, 2016Dec. 31, 2015Sep. 04, 2015Apr. 01, 2015Dec. 31, 2014Oct. 22, 2014Oct. 21, 2014
Debt Instrument [Line Items]
Overadvance on Loan Agreement $ 7,814,000 $ 7,596,000
Term loan
Debt Instrument [Line Items]
Interest costs capitalized $ 400,000
Initial prepayment of a portion of the loan balance $ 148,000
Convertible notes payable
Debt Instrument [Line Items]
Face amount $ 750,000 $ 750,000
Third Security LLC and affiliates | Term loan
Debt Instrument [Line Items]
Face amount $ 4,000,000
PGxHealth, LLC | Senior secured promissory note
Debt Instrument [Line Items]
Debt term of note payable that was paid off3 years
Revolving credit facility | Line of credit
Debt Instrument [Line Items]
Current borrowing capacity $ 2,300,000 $ 3,000,000 $ 4,000,000
Payment to lenders to support the amount advanced $ 700,000
Revolving credit facility | Third Security LLC and affiliates | Line of credit
Debt Instrument [Line Items]
Current borrowing capacity $ 4,000,000

DEBT (Convertible Promissory No

DEBT (Convertible Promissory Notes) (Details)Dec. 31, 2014USD ($)$ / sharesSep. 30, 2016USD ($)sharesJan. 06, 2016USD ($)Jan. 20, 2015USD ($)Jan. 15, 2015investor
Additional notes
Debt Instrument [Line Items]
Number of additional accredited investors | investor7
Convertible notes payable
Debt Instrument [Line Items]
Face amount $ 750,000 $ 750,000
Interest rate (as a percent)6.00%6.00%
Number of shares converted | shares502,786
Convertible notes payable | Additional notes
Debt Instrument [Line Items]
Face amount $ 925,000
Number of shares converted | shares281,023
Conversion of convertible promissory notes $ 400,000
Convertible notes payable | Conversion, period one
Debt Instrument [Line Items]
Percentage of debt convertible50.00%
Threshold consecutive trading days20 days
Conversion price (in dollars per share) | $ / shares $ 2.20
Convertible notes payable | Conversion, period two
Debt Instrument [Line Items]
Threshold consecutive trading days15 days
Conversion price as percentage of average closing price85.00%

COMMITMENTS AND CONTINGENCIES (

COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in MillionsJun. 23, 2016Feb. 25, 2016Sep. 30, 2016Sep. 30, 2015Dec. 31, 2015
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract]
Future minimum payments due, remainder of 2016 $ 0.2
Future minimum payments due, 20170.7
Future minimum payments due, 20180.7
Future minimum payments due, 20190.7
Future minimum payments due, 20200.7
Future minimum payments, due thereafter0.4
Rent expense0.2 $ 0.2
Firm commitments to vendors0.1
Threatened Litigation | Breach of contract | UNMC
Loss Contingencies [Line Items]
Damages sought in a lawsuit $ 0.7
Accrual of possible loss in a lawsuit0.7 $ 0.7
Threatened Litigation | Breach of contract | Mount Sinai
Loss Contingencies [Line Items]
Damages sought in a lawsuit $ 0.7
Accrual of possible loss in a lawsuit $ 0.7 $ 0.7

INCOME TAXES (Details)

INCOME TAXES (Details) - USD ($)3 Months Ended9 Months Ended
Sep. 30, 2016Sep. 30, 2015Sep. 30, 2016Sep. 30, 2015
Income Tax Disclosure [Abstract]
Income tax expense (benefit) $ 0 $ 0 $ 0 $ (1,000)

STOCKHOLDERS' EQUITY (Common St

STOCKHOLDERS' EQUITY (Common Stock) (Details)Jun. 14, 2016sharesJun. 07, 2016USD ($)May 31, 2016sharesJan. 06, 2016USD ($)$ / sharessharesJul. 07, 2015USD ($)$ / sharessharesFeb. 27, 2015USD ($)$ / shares$ / unitsharesOct. 22, 2014USD ($)$ / sharessharesJan. 24, 2013USD ($)$ / sharessharesFeb. 02, 2012USD ($)$ / sharessharesMay 31, 2016sharesDec. 31, 2011USD ($)Sep. 30, 2016USD ($)$ / sharessharesSep. 30, 2016USD ($)$ / sharessharesSep. 30, 2015USD ($)Jun. 30, 2016sharesDec. 31, 2015$ / sharessharesJan. 20, 2015USD ($)Jan. 15, 2015USD ($)$ / sharessharesDec. 31, 2014USD ($)$ / sharessharesOct. 21, 2014$ / sharessharesMar. 05, 2014$ / sharessharesDec. 31, 2012$ / sharesshares
Class of Stock [Line Items]
Common stock, shares authorized (in shares)150,000,000 150,000,000 150,000,000
Common stock, shares issued (in shares)24,139,130 24,139,130 13,915,691
Private placement, net (in shares)6,780,179 1,500,000
Share price (in dollars per share) | $ / shares $ 1.42
Stock issued during period | $ $ 500,000
Issuance of common stock, net | $ $ 468,000 $ 8,977,000
Proceeds from issuance of common stock and warrants | $ $ 3,000,000
Preferred stock, shares issued (in shares)214,705 214,705 4,029,502
Preferred stock, par value (in dollars per share) | $ / shares $ 0.01 $ 0.01 $ 0.01
Preferred stock, shares outstanding (in shares)214,705 214,705 4,029,502
Common Stock
Class of Stock [Line Items]
Private placement, net (in shares)1,292,722
Stock issued during period | $ $ 12,000
Shares issued upon conversion of preferred stock (in shares)8,930,717
Stock issued during period for services (in shares)64,153 78,000
Stock issued during period for services | $ $ 89,000
Craig-Hallum Capital Group LLC
Class of Stock [Line Items]
Warrants term5 years5 years
Common stock warrant, exercise price (in dollars per share) | $ / shares $ 1.21 $ 1.66
Payments of stock issuance costs | $ $ 140,000 $ 212,783
Payments of stock issuance costs, percentage of gross offering proceeds7.00%7.00%
Payments of stock issuance costs, warrant right to purchase common stock shares107,527 107,033
Stock issuance costs, reimbursable expenses (not to exceed) | $ $ 50,000 $ 50,000
Proceeds from issuance of warrants | $50
Convertible notes payable
Class of Stock [Line Items]
Face amount | $750,000 $ 750,000
Series A-1 Convertible Preferred Stock and Warrants
Class of Stock [Line Items]
Proceeds from issuance of convertible preferred stock | $ $ 2,200,000
Price per share of shares issued (in dollars per share) | $ / shares $ 0.93
Series A-1 Convertible Preferred Stock
Class of Stock [Line Items]
Preferred stock, shares issued (in shares)2,365,243
Voting rights, number of shares per one vote1.075269
Number of shares converted2,150,538
Preferred stock, shares outstanding (in shares)214,705 214,705
Common Stock
Class of Stock [Line Items]
Shares issued upon conversion of preferred stock (in shares)2,150,538
Series A Preferred Stock
Class of Stock [Line Items]
Preferred stock, par value (in dollars per share) | $ / shares $ 0.01
Preferred stock, shares outstanding (in shares)0 2,586,205
Third Security LLC and affiliates
Class of Stock [Line Items]
Common stock warrant, common stock called (in shares)1,097,600 1,212,665
Common stock warrant, exercise price (in dollars per share) | $ / shares $ 12.96 $ 11.73
Series A Warrants
Class of Stock [Line Items]
Warrants term5 years 6 months
Warrants, period exercisable6 months
Warrant exchange amount | $ $ 941,197
Warrant exercise period not subject to cash payment90 days
Warrant exchange price threshold (in dollars per share) | $ / shares $ 0.50
Series A Warrants | Pro Forma
Class of Stock [Line Items]
Share price (in dollars per share) | $ / shares $ 0.25
Payments for repurchase of warrants | $ $ 470,599
Warrant exchange amount | $ $ 941,197
Series A Warrants | Maximum
Class of Stock [Line Items]
Common stock warrant, common stock called (in shares)1,161,972
Series A Warrant, Cashless Exchange | Maximum
Class of Stock [Line Items]
Common stock warrant, common stock called (in shares)1,882,395
Series A Warrant, Cashless Exchange | Maximum | Pro Forma
Class of Stock [Line Items]
Common stock warrant, common stock called (in shares)1,882,395
Series A-1 Warrant
Class of Stock [Line Items]
Common stock warrant, common stock called (in shares)1,773,929
Common stock warrant, exercise price (in dollars per share) | $ / shares $ 1.21
Warrants, period exercisable5 years
Warrant exchange amount | $ $ 1,436,882
Warrant exercise period not subject to cash payment90 days
Warrant exchange price threshold (in dollars per share) | $ / shares $ 0.50
Series A-1 Warrant | Pro Forma
Class of Stock [Line Items]
Share price (in dollars per share) | $ / shares $ 0.25
Payments for repurchase of warrants | $ $ 718,441
Warrant exchange amount | $ $ 1,436,882
Series A-1 Warrant | Maximum
Class of Stock [Line Items]
Common stock warrant, common stock called (in shares)2,873,765
Series A-1 Warrant | Maximum | Pro Forma
Class of Stock [Line Items]
Common stock warrant, common stock called (in shares)2,873,765
Series B Warrants
Class of Stock [Line Items]
Warrants term5 years 6 months
Common stock warrant, exercise price (in dollars per share) | $ / shares $ 0.01
Series B Warrants | Maximum
Class of Stock [Line Items]
Common stock warrant, common stock called (in shares)700,000
Warrants
Class of Stock [Line Items]
Common stock warrant, exercise price (in dollars per share) | $ / shares $ 1.66
Warrants | Maximum
Class of Stock [Line Items]
Common stock warrant, common stock called (in shares)1,200,000
Private Placement
Class of Stock [Line Items]
Proceeds from issuance of common stock and convertible notes | $ $ 22,000,000 $ 3,000,000
Common stock, shares issued (in shares)1,583,333
Common stock, sale price per share (in dollars per share) | $ / shares $ 12
Warrants term5 years
Common stock warrant, common stock called (in shares)3,239,827 2,188,177 1,881,396 1,309,785 1,097,600 823,333 3,362,276 3,362,276 3,262,088 1,483,161 1,387,685 1,212,665 948,333
Common stock warrant, exercise price (in dollars per share) | $ / shares $ 4.39 $ 6.50 $ 7.56 $ 10.86 $ 12.96 $ 15 $ 4.23 $ 4.23 $ 9.59 $ 10.25 $ 11.73 $ 15
Payments of stock issuance costs | $ $ 1,330,000
Payments of stock issuance costs, percentage of gross offering proceeds7.00%
Payments of stock issuance costs, warrant right to purchase common stock shares31,666
Payments of stock issuance costs, warrant right to purchase common stock shares, percentage of shares in offering2.00%
Stock issuance costs, reimbursable expenses (not to exceed) | $ $ 125,000
Payments of stock issuance costs, reduction to equity | $ $ 1,500,000
Stock issued during period | $ $ 543,000
Private Placement | Third Security LLC and affiliates
Class of Stock [Line Items]
Convertible notes, common stock callable (in shares)250,000
Convertible notes, warrants callable (in shares)125,000
2014 Private Placement
Class of Stock [Line Items]
Common stock warrant, common stock called (in shares)365,388
Common stock warrant, exercise price (in dollars per share) | $ / shares $ 4
Private placement, net (in shares)730,776
Share price (in dollars per share) | $ / shares $ 3.25
Stock issued during period | $ $ 2,400,000
2014 Private Placement | Advisor
Class of Stock [Line Items]
Common stock warrant, common stock called (in shares)9,230
At the Market Offering
Class of Stock [Line Items]
Issuance of common stock, net | $ $ 500,000 $ 100,000
At the Market Offering | Common Stock
Class of Stock [Line Items]
Private placement, net (in shares)1,035,255 1,150,569
Aggregate authorized amount under At the Market Offering Agreement | $ $ 3,500,000
At the Market Offering | Craig-Hallum Capital Group LLC | Common Stock
Class of Stock [Line Items]
Payments of stock issuance costs, percentage of gross offering proceeds3.25%
At the Market Offering | Weighted Average | Common Stock
Class of Stock [Line Items]
Share price (in dollars per share) | $ / shares $ 0.42 $ 0.42
Offering
Class of Stock [Line Items]
Common stock warrant, common stock called (in shares)691,655
Private placement, net (in shares)1,383,333
Share price (in dollars per share) | $ / shares $ 6
Stock issued during period | $ $ 8,300,000
Class of warrant or right, number of securities called by warrants or rights, price per share (in dollars per share) | $ / shares $ 9
Offering | Affiliates of Third Security, LLC; January 2018
Class of Stock [Line Items]
Common stock warrant, common stock called (in shares)250,000
Private placement, net (in shares)500,000
Additional Note Private Placement | Convertible notes payable
Class of Stock [Line Items]
Face amount | $ $ 925,000
Additional Note Private Placement | Convertible notes payable | Craig-Hallum Capital Group LLC
Class of Stock [Line Items]
Face amount | $ $ 46,250
Face amount as percentage of proceeds from debt issuance5.00%
2015 Offering | Craig-Hallum Capital Group LLC
Class of Stock [Line Items]
Common stock warrant, common stock called (in shares)714,780
Common stock warrant, exercise price (in dollars per share) | $ / shares $ 2.24
Private placement, net (in shares)3,573,899
Class of warrant or right, number of securities called by each warrant or right (in shares)0.20
Class of warrant or right, purchase price per share, public (in dollars per share) | $ / unit1.95
Class of warrant or right, purchase price per share, underwriter (in dollars per share) | $ / unit1.8135
Proceeds from issuance of common stock and warrants, net | $ $ 6,200,000
Class of warrant or right, expiration period5 years

STOCKHOLDERS' EQUITY (Common 43

STOCKHOLDERS' EQUITY (Common Stock Warrants) (Details) - $ / shares9 Months Ended
Sep. 30, 2016Sep. 30, 2015Jan. 06, 2016Jul. 07, 2015Feb. 27, 2015Jan. 15, 2015Dec. 31, 2014Oct. 22, 2014Oct. 21, 2014Jan. 24, 2013Dec. 31, 2012Feb. 02, 2012
Class of Stock [Line Items]
Common stock warrants issued (in shares)3,055,555 3,466,841
Underlying Shares8,976,354
Various Institutional Holders; February 2017
Class of Stock [Line Items]
Underlying Shares2,919,043
Exercise Price (in dollars per share) $ 4.23
Affiliates of Third Security, LLC; February 2017
Class of Stock [Line Items]
Underlying Shares443,233
Exercise Price (in dollars per share) $ 4.23
Various Institutional Holders; January 2018
Class of Stock [Line Items]
Underlying Shares441,655
Exercise Price (in dollars per share) $ 9
Affiliates of Third Security, LLC; January 2018
Class of Stock [Line Items]
Underlying Shares250,000
Exercise Price (in dollars per share) $ 9
Various Institutional Holders; April 2020
Class of Stock [Line Items]
Underlying Shares374,618
Exercise Price (in dollars per share) $ 4
Various Institutional Holders; February 2020
Class of Stock [Line Items]
Underlying Shares714,780
Exercise Price (in dollars per share) $ 2.24
Various Institutional Holders; December 2020
Class of Stock [Line Items]
Underlying Shares122,433
Exercise Price (in dollars per share) $ 1.66
Various Institutional Holders; December 2020
Class of Stock [Line Items]
Underlying Shares667,164
Exercise Price (in dollars per share) $ 0.01
Various Institutional Holders; January 2021
Class of Stock [Line Items]
Underlying Shares1,161,972
Exercise Price (in dollars per share) $ 1.21
Affiliates of Third Security, LLC; January 2021
Class of Stock [Line Items]
Underlying Shares161,026
Exercise Price (in dollars per share) $ 1.21
Various Institutional Holders; January 2021
Class of Stock [Line Items]
Underlying Shares1,720,430
Exercise Price (in dollars per share) $ 1.21
Private Placement
Class of Stock [Line Items]
Common stock warrants issued (in shares)1,174,099 800,492
Exercise Price (in dollars per share) $ 4.23 $ 4.39 $ 6.50 $ 7.56 $ 9.59 $ 10.25 $ 10.86 $ 11.73 $ 12.96 $ 15 $ 15
Offering
Class of Stock [Line Items]
Common stock warrants issued (in shares)1,881,456 2,666,349

STOCKHOLDERS' EQUITY (Issuance

STOCKHOLDERS' EQUITY (Issuance of Series B Preferred Stock) (Details) $ / shares in Units, $ in ThousandsJan. 06, 2016sharesJul. 07, 2015$ / sharessharesMar. 05, 2014USD ($)$ / sharessharesSep. 30, 2016USD ($)$ / sharesDec. 31, 2015$ / sharesJan. 24, 2013$ / sharesshares
Class of Stock [Line Items]
Private placement, net (in shares) | shares6,780,179 1,500,000
Preferred stock, par value (in dollars per share) $ 0.01 $ 0.01
Share price (in dollars per share) $ 1.42
Private placement, net | $ $ 500
Series B preferred stock
Class of Stock [Line Items]
Conversion ratio1
Third Security LLC and affiliates
Class of Stock [Line Items]
Common stock warrant, exercise price (in dollars per share) $ 11.73 $ 12.96
Common stock warrant, common stock called (in shares) | shares1,212,665 1,097,600
Third Security LLC and affiliates | Preferred stock | Series B preferred stock
Class of Stock [Line Items]
Private placement, net (in shares) | shares1,443,297
Preferred stock, par value (in dollars per share) $ 0.01
Share price (in dollars per share) $ 4.85
Private placement, net | $ $ 7,000
Conversion ratio1

STOCKHOLDERS' EQUITY (Conversio

STOCKHOLDERS' EQUITY (Conversion of Preferred Stock) (Details)Jan. 06, 2016USD ($)$ / sharessharesJul. 07, 2015sharesSep. 30, 2016$ / sharessharesDec. 31, 2015$ / sharesshares
Conversion of Stock [Line Items]
Preferred stock, par value (in dollars per share) | $ / shares $ 0.01 $ 0.01
Preferred stock, shares outstanding (in shares)214,705 4,029,502
Number of shares of common stock dividends4,474,825
Private placement, net (in shares)6,780,179 1,500,000
Common Stock
Conversion of Stock [Line Items]
Number of common stock converted2,305,354
Private placement, net (in shares)1,292,722
Series A Preferred Stock
Conversion of Stock [Line Items]
Preferred stock, par value (in dollars per share) | $ / shares $ 0.01
Conversion ratio0.3333
Dividend conversion rate per share | $ / shares $ 1
Preferred stock, shares outstanding (in shares)0 2,586,205
Number of common stock converted862,057
Amount of preferred dividends in arrears | $ $ 3,681,591.90
Number of shares of common stock dividends3,681,590
Series B preferred stock
Conversion of Stock [Line Items]
Conversion ratio1
Preferred stock, shares outstanding (in shares)0 1,443,297
Number of common stock converted1,443,297
Amount of preferred dividends in arrears | $ $ 793,236.17
Number of shares of common stock dividends793,235
Series A-1 Convertible Preferred Stock and Warrants
Conversion of Stock [Line Items]
Conversion ratio1

STOCKHOLDERS' EQUITY (Preferred

STOCKHOLDERS' EQUITY (Preferred Stock Dividends) (Details) - USD ($)Sep. 30, 2016Dec. 31, 2015
Stockholders' Equity Note [Abstract]
Cumulative undeclared dividends, preferred stock $ 0 $ 4,400,000

FAIR VALUE (Details)

FAIR VALUE (Details) - USD ($) $ / shares in Units, $ in Thousands1 Months Ended3 Months Ended9 Months Ended
Jan. 31, 2016Feb. 28, 2012Sep. 30, 2016Sep. 30, 2015Sep. 30, 2016Sep. 30, 2015Jul. 07, 2015
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Common stock warrants issued (in shares)3,055,555 3,466,841
Share price (in dollars per share) $ 1.42
Percentage of simulated equity values below the down-round financing cut-off point100.00%
2012 Warrant Liability
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Common stock warrants issued (in shares)1,200,000 3,400,000
Share price (in dollars per share) $ 0.28 $ 0.28
Stock options, fair value assumptions, expected life4 months 28 days
Volatility (as a percent)67.00%
Risk-free interest rate (as a percent)0.42%
Fair value assumptions, expected term1 year
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance $ 350 $ 0 $ 560 $ 350 $ 145
Total (gains) or losses:
Recognized in earnings0 (385)(350)30
Balance at end of period $ 0 $ 175 $ 0 $ 175
2016 Warrant Liability
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Common stock warrants issued (in shares)1,800,000
Share price (in dollars per share) $ 0.28 $ 0.28
Volatility (as a percent)86.00%
Risk-free interest rate (as a percent)1.04%
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance $ 0 $ 1,442 $ 0
Additions1,437
Total (gains) or losses:
Recognized in earnings(12)(7)
Balance at end of period $ 1,430 $ 1,430

STOCK OPTIONS (Stock Options) (

STOCK OPTIONS (Stock Options) (Details) - USD ($)3 Months Ended9 Months Ended
Sep. 30, 2016Sep. 30, 2016Sep. 30, 2015
Number of Options
Granted (in shares)11,250 25,250 641,560
Weighted-Average Exercise Price
Stock options, expected to vest, outstanding (in shares)860,411 860,411
Stock options, expected to vest, outstanding, aggregate intrinsic value $ 0 $ 0
Equity Incentive Plan 2006
Number of Options
Granted (in shares)25,250
Weighted-Average Exercise Price
Granted (in dollars per share) $ 0.84
Employee Stock Option
Number of Options
Outstanding at beginning of period (in shares)1,107,794
Granted (in shares)25,250
Forfeited (in shares)(252,589)
Outstanding at end of period (in shares)880,455 880,455
Exercisable at end of period (in shares)574,650 574,650
Weighted-Average Exercise Price
Outstanding at beginning of period (in dollars per share) $ 3.45
Granted (in dollars per share)0.84
Forfeited (in dollars per share)3.28
Outstanding at end of period (in dollars per share) $ 3.39 3.39
Exercisable at end of period (in dollars per share) $ 4.08 $ 4.08

STOCK OPTIONS (Stock Appreciati

STOCK OPTIONS (Stock Appreciation Rights) (Details) - SARs - USD ($)Sep. 30, 2016Dec. 31, 2015
Number of SARs
Outstanding (in shares)98,333 98,333
Exercisable (in shares)92,558
Weighted-Average Exercise Price
Outstanding (in dollars per share) $ 4.14 $ 4.14
Exercisable (in dollars per share) $ 4.20
Stock appreciation rights, nonvested (in shares)98,333
Stock appreciation rights, aggregate intrinsic value, outstanding $ 0

SUBSEQUENT EVENTS (Details)

SUBSEQUENT EVENTS (Details) - Subsequent EventOct. 12, 2016USD ($)
Precipio
Subsequent Event [Line Items]
Business acquisition costs, projected $ 7,000,000
Equity Issued in Business Combination, Fair Value Disclosure $ 25,000,000
Percentage of shares issued34.00%
Precipio
Subsequent Event [Line Items]
Business acquisition costs, projected $ 3,000,000
Debt instrument, convertible, value of exchanged shares3,000,000
Business termination cost $ 256,500
Precipio | Minimum
Subsequent Event [Line Items]
Projected ownership interest in parent62.00%
Precipio | Maximum
Subsequent Event [Line Items]
Projected ownership interest in parent80.00%