DOCUMENT AND ENTITY INFORMATION
DOCUMENT AND ENTITY INFORMATION - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Mar. 24, 2017 | Jun. 30, 2016 | |
Entity Information [Line Items] | |||
Entity Registrant Name | TRANSGENOMIC INC | ||
Entity Central Index Key | 1,043,961 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Smaller Reporting Company | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 26,868,062 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 18.6 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 110 | $ 444 |
Accounts receivable, net | 225 | 264 |
Inventories | 24 | 50 |
Other current assets | 105 | 537 |
Assets held for sale | 31 | 1,987 |
Total current assets | 495 | 3,282 |
PROPERTY AND EQUIPMENT: | ||
Equipment | 5,592 | 5,593 |
Furniture, fixtures & leasehold improvements | 1,565 | 1,565 |
Property, plant and equipment, gross | 7,157 | 7,158 |
Less: accumulated depreciation and amortization | (7,013) | (6,899) |
Property, plant and equipment, net | 144 | 259 |
OTHER ASSETS: | ||
Intangibles, net | 562 | 1,170 |
Other assets | 58 | 105 |
Assets | 1,259 | 4,816 |
CURRENT LIABILITIES: | ||
Current maturities of long term debt | 7,814 | 7,596 |
Accounts payable | 6,541 | 3,781 |
Accrued compensation | 224 | 321 |
Accrued expenses | 3,546 | 3,734 |
Deferred revenue | 170 | 217 |
Other current liabilities | 1,529 | 1,068 |
Liabilities held for sale | 0 | 264 |
Total current liabilities | 19,824 | 16,981 |
LONG TERM LIABILITIES: | ||
Common stock warrant liability | 582 | 350 |
Other long-term liabilities | 203 | 305 |
Total liabilities | 20,609 | 17,636 |
STOCKHOLDERS’ DEFICIT: | ||
Preferred stock, $.01 par value, 15,000,000 shares authorized, 214,705 shares in 2016 and 4,029,502 shares in 2015 issued and outstanding | 2 | 40 |
Common stock, $.01 par value, 150,000,000 shares authorized, 26,446,927 shares in 2016 and 13,915,691 shares in 2015 issued and outstanding | 264 | 139 |
Additional paid-in capital | 205,877 | 200,403 |
Accumulated other comprehensive income | 0 | 10 |
Accumulated deficit | (225,493) | (213,412) |
Total stockholders’ deficit | (19,350) | (12,820) |
Liabilities and equity | $ 1,259 | $ 4,816 |
CONSOLIDATED BALANCE SHEETS PAR
CONSOLIDATED BALANCE SHEETS PARENTHETICALS - $ / shares | Dec. 31, 2016 | Dec. 31, 2015 |
STOCKHOLDERS’ DEFICIT: | ||
Preferred stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 15,000,000 | 15,000,000 |
Preferred stock, shares issued | 214,705 | 4,029,502 |
Preferred stock, shares outstanding | 214,705 | 4,029,502 |
Common stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 26,446,927 | 13,915,691 |
Common stock, shares outstanding | 26,446,927 | 13,915,691 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
NET SALES | $ 1,557 | $ 1,929 |
COST OF GOODS SOLD | 1,762 | 1,940 |
Gross loss | (205) | (11) |
OPERATING EXPENSES: | ||
Selling, general and administrative | 6,192 | 7,055 |
Research and development | 1,422 | 1,853 |
Operating Expenses | 7,614 | 8,908 |
OPERATING LOSS FROM CONTINUING OPERATIONS | (7,819) | (8,919) |
OTHER INCOME (EXPENSE): | ||
Interest expense, net | (1,038) | (724) |
Warrant revaluation | 788 | (205) |
Loss on sale/disposal of assets | (199) | (14) |
Other, net | (1) | 0 |
Other Income (Expense) | (450) | (943) |
LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | (8,269) | (9,862) |
INCOME TAX EXPENSE (BENEFIT) | 0 | 0 |
LOSS FROM CONTINUING OPERATIONS | (8,269) | (9,862) |
INCOME (LOSS) FROM DISCONTINUED OPERATIONS, NET OF TAXES | 653 | (23,092) |
NET LOSS | (7,616) | (32,954) |
PREFERRED STOCK DIVIDENDS | (393) | (1,324) |
NET LOSS AVAILABLE TO COMMON STOCKHOLDERS | $ (8,009) | $ (34,278) |
BASIC AND DILUTED INCOME (LOSS) PER COMMON SHARE (IN USD PER SHARE) | $ (0.35) | $ (2.78) |
BASIC AND DILUTED WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING | 22,689,831 | 12,321,739 |
Included in continuing operations | ||
OTHER INCOME (EXPENSE): | ||
NET LOSS AVAILABLE TO COMMON STOCKHOLDERS | $ (8,662) | $ (11,186) |
BASIC AND DILUTED INCOME (LOSS) PER COMMON SHARE (IN USD PER SHARE) | $ (0.38) | $ (0.91) |
Included in assets held for sale | ||
OTHER INCOME (EXPENSE): | ||
NET LOSS AVAILABLE TO COMMON STOCKHOLDERS | $ 653 | $ (23,092) |
BASIC AND DILUTED INCOME (LOSS) PER COMMON SHARE (IN USD PER SHARE) | $ 0.03 | $ (1.87) |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | ||
Net Loss | $ (7,616) | $ (32,954) |
Other Comprehensive Loss; | ||
foreign currency translation adjustment | 0 | (330) |
Comprehensive Loss | $ (7,616) | $ (33,284) |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT - USD ($) $ in Thousands | Total | Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) |
Balance, shares at Dec. 31, 2014 | 4,029,502 | 8,084,471 | ||||
Balance at Dec. 31, 2014 | $ 6,553 | $ 40 | $ 81 | $ 189,680 | $ (183,588) | $ 340 |
Increase (Decrease) in Stockholders' Equity | ||||||
Net loss | (32,954) | (32,954) | ||||
Foreign currency translation adjustment | (330) | (330) | ||||
Non-cash stock-based compensation | 644 | 644 | ||||
Private Placement, net shares | 5,047,411 | |||||
Private Placement, net | 8,970 | $ 50 | 8,920 | |||
Conversion of convertible promissory notes | 1,167 | $ 8 | 1,159 | |||
Conversion of convertible securities, shares | 783,809 | |||||
Reversal of dividends on preferred stock | 3,130 | 3,130 | ||||
Balance, shares at Dec. 31, 2015 | 4,029,502 | 13,915,691 | ||||
Balance at Dec. 31, 2015 | (12,820) | $ 40 | $ 139 | 200,403 | (213,412) | 10 |
Increase (Decrease) in Stockholders' Equity | ||||||
Net loss | (7,616) | (7,616) | ||||
Foreign currency translation adjustment | 0 | 10 | (10) | |||
Non-cash stock-based compensation | 82 | 82 | ||||
Issuance of common shares, shares | 1,320,002 | |||||
Issuance of common shares | 506 | $ 13 | 493 | |||
Private Placement, net shares | 2,365,243 | |||||
Private Placement, net | 153 | $ 24 | 129 | |||
Conversion of convertible securities, shares | 2,280,517 | |||||
Conversion of warrants | 345 | $ 22 | 323 | |||
Conversion of preferred stock and preferred stock dividends | 4,475 | $ (62) | $ 90 | 4,447 | ||
Conversion of preferred stock and preferred stock dividend | (6,180,040) | 8,930,717 | ||||
Reversal of dividends on preferred stock | (4,475) | (4,475) | ||||
Balance, shares at Dec. 31, 2016 | 214,705 | 26,446,927 | ||||
Balance at Dec. 31, 2016 | $ (19,350) | $ 2 | $ 264 | $ 205,877 | $ (225,493) | $ 0 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
CASH FLOWS USED IN OPERATING ACTIVITIES: | ||
NET LOSS | $ (7,616) | $ (32,954) |
Less income (loss) from discontinued operations, net of tax | 653 | (23,092) |
Loss from continuing operations | (8,269) | (9,862) |
Adjustments to reconcile net loss to net cash flows used in operating activities: | ||
Depreciation and amortization | 262 | 489 |
Stock based compensation and change in liability of stock appreciation rights | 52 | 611 |
Impairment of patents | 304 | |
Provision for losses on doubtful accounts | 72 | 67 |
Provision for losses on inventory obsolescence | 0 | 63 |
Capitalized interest and other costs | 467 | 0 |
Warrant revaluation | (788) | 205 |
Loss on sale/disposal of assets | 199 | 14 |
Deferred interest | 47 | 70 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (33) | 133 |
Inventories | 26 | (113) |
Other assets | 432 | (663) |
Accounts payable | 3,085 | (365) |
Accrued expenses and other liabilities | (811) | 1,773 |
Net cash used in continuing operations | (4,955) | (7,578) |
Net cash provided by (used in) discontinued operations | 1,405 | (4,800) |
Net cash used in operating activities | (3,550) | (12,378) |
CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES: | ||
Purchase of property and equipment | (19) | (204) |
Proceeds from sale of assets | 5 | 0 |
Change in other assets | (27) | (219) |
Net cash used in investing activities, continuing operations | (41) | (423) |
Net cash provided by investing activities, discontinued operations | 1,047 | 2,210 |
Net cash used in investing activities, continuing operations | 1,006 | 1,787 |
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES: | ||
Proceeds from debt | 500 | 923 |
Principal payments on capital lease obligations | (3) | (35) |
Issuance of preferred stock and warrants, net of costs of $219 | 1,781 | 0 |
Issuance of common stock and related warrants, net | 7 | 0 |
Issuance of common stock and related warrants, net | 475 | 8,977 |
Principal payments on debt | (550) | (874) |
Net cash flows provided by financing activities | 2,210 | 8,991 |
EFFECT OF FOREIGN CURRENCY EXCHANGE RATE CHANGES ON CASH, discontinued operations | 0 | 435 |
NET CHANGE IN CASH AND CASH EQUIVALENTS | (334) | (1,165) |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 444 | 1,609 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 110 | 444 |
SUPPLEMENTAL CASH FLOW INFORMATION | ||
Cash paid for interest | 0 | 493 |
SUPPLEMENTAL DISCLOSURE OF NON-CASH INFORMATION | ||
Initial valuation of warrant issued in conjunction with Private Placement | 1,827 | 0 |
Warrants and note payable converted to equity | 807 | 1,012 |
Debt settled with issuance of preferred stock and warrants | 199 | 0 |
Issuance of common stock to vendors for services performed | 89 | 0 |
Accrued fees associated with issuance of common stock | 58 | 0 |
Other liability payable for settlement of warrant conversions | $ 462 | $ 0 |
CONSOLIDATED STATEMENTS OF CAS8
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parentheticals) - USD ($) | Feb. 02, 2012 | Dec. 31, 2016 |
Statement of Cash Flows [Abstract] | ||
Stock issuance costs | $ 1,330,000 | $ 219,000 |
BUSINESS DESCRIPTION
BUSINESS DESCRIPTION | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BUSINESS DESCRIPTION | BUSINESS DESCRIPTION Business Description. Transgenomic, Inc., and Subsidiary, (“we”, “us”, “our”, the “Company” or “Transgenomic”) is a biotechnology company advancing personalized medicine for the detection and treatment of cancer and integrated 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 fourth quarter of 2015, we began including a portion of our Laboratory Services segment as discontinued operations, this continued during 2016. 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 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 consolidated financial statements have been prepared using accounting principles generally accepted in the United States of America applicable for a going concern which assumes that the Company will realize its assets and discharge its liabilities in the ordinary course of business. The Company has incurred substantial operating losses and has used cash in its operating activities for the past few years. As of December 31, 2016, the Company had negative working capital of approximately $19.3 million . The Company’s ability to continue as a going concern is dependent upon a combination of completing its planned merger with Precipio Diagnostics, LLC (“Precipio”), generating additional revenue, improving cash collections, potentially selling underutilized assets and/or product lines related to discontinued operations and, if needed, raising necessary financing to meet its obligations and pay its liabilities arising from normal business operations when they come due. As noted in subsequent events, the Company is suspended from NASDAQ listing. As discussed below as a condition of the merger, the New Precipio common Stock must be approved by the NASDAQ. As a result of the merger, the equity of New Precipio is expected to be in compliance. In addition, at the time of the merger the Company will execute a reverse stock split. The outcome of these matters cannot be predicted with any certainty at this time and raises substantial doubt that the Company will be able to continue as a going concern for the next twelve months from the date of issuance of these financial statements. These consolidated financial statements do not include any adjustments to the amounts and classification of assets and liabilities that may be necessary should the Company be unable to continue as a going concern. There is no assurance that the Company will complete the merger in a timely manner or at all. The merger agreement is subject to many closing conditions and termination rights. The Company also cannot be certain that additional financing, if needed, will be available on acceptable terms, or at all, and its failure to raise capital when needed could limit its ability to continue its operations. 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 entered into an Agreement and Plan of Merger (as amended by the Merger Agreement Amendment (as defined below) 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. On February 2, 2017, Transgenomic, Merger Sub and Precipio entered into a First Amendment to Agreement and Plan of Merger (the “Merger Agreement Amendment”) which provided for, among other things, the revision of the exchange ratio set forth in the Merger Agreement, the waiver and removal of certain closing conditions and the authorization of certain actions taken by each of Transgenomic and Precipio since the date the Merger Agreement. The parties expect the Merger to close in the second quarter of 2017. following the Merger, Transgenomic will change its name to Precipio, Inc. (“New Precipio”). Upon the effectiveness of the Merger (the “Effective Time”), (i) the outstanding common units of Precipio will be converted into the right to receive approximately 160.6 million shares of common stock of New Precipio (“New Precipio common stock”), together with cash in lieu of fractional units, which will result in Precipio common unit holders owning approximately 52% of the issued and outstanding shares of New Precipio common stock on a fully diluted basis, taking into account the issuance of shares of convertible preferred stock of New Precipio (“New Precipio preferred stock”) in the Merger and the private placement as discussed below (the “fully diluted New Precipio common stock”) and (ii) the outstanding preferred units of Precipio will be converted into the right to receive approximately 24.1 million shares of New Precipio preferred stock with an aggregate face amount equal to $3.0 million (based upon the purchase price of the new preferred stock of New Precipio in the new preferred stock financing), which will result in the Precipio preferred unit holders owning approximately 8% of the fully diluted New Precipio common stock. 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 New Precipio common stock on Nasdaq, (viii) the conversion of all outstanding membership interests of Precipio into common units or preferred units which will be converted into New Precipio common stock or New Precipio preferred stock as Merger consideration, as applicable, (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. Upon completion of the merger, New Precipio will be required to meet the initial listing requirements to maintain the listing and continued trading of its shares on Nasdaq. These initial listing requirements are more difficult to achieve than the continued listing requirements. Pursuant to the Merger Agreement, Transgenomic agreed to use its commercially reasonable efforts to cause the shares of Transgenomic common stock being issued in the merger to be approved for listing on Nasdaq at or prior to the effective time of the merger. Based on information currently available to Transgenomic, Transgenomic anticipates that its stock will be unable to meet the $4.00 (or, to the extent applicable, $3.00) minimum bid price initial listing requirement at the closing of the merger unless it effects a reverse stock split. On October 31, 2016, the stockholders of Transgenomic authorized the Transgenomic Board to effect a reverse stock split of the shares of Transgenomic common stock at a ratio of between one-for-ten to one-for-thirty. In addition, often times a reverse stock split will not result in a trading price for the affected common stock that is proportional to the ratio of the split. 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, April 12, 2017. In the Merger Agreement Amendment, this date was extended to June 30, 2017. 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. If the Merger Agreement is terminated by Precipio or Transgenomic pursuant to (i) the Transgenomic board failing to recommend that Transgenomic’s stockholders vote to approve the issuance of New Precipio common stock in connection with the merger; (ii) Transgenomic failing to include in this proxy statement a recommendation by the Transgenomic board to vote in favor of the each of the proposals in this proxy statement; (iii) the Transgenomic board failing to make, withholding, withdrawing, amending, changing, qualifying or publicly proposing to withhold, withdraw, amend, change or qualify in a manner adverse to Precipio, its recommendation that the stockholders of Transgenomic vote in favor and adopt each of the proposals in this proxy statement, knowingly making any public statement inconsistent with such recommendation, failing to recommend against acceptance of any alternate acquisition proposal within ten business days after the public announcement of any such alternate acquisition proposal, approving, adopting, recommending or proposing publicly to approve, adopt or recommend any alternate acquisition proposal, or making any public statement inconsistent with its recommendation; (iv) Transgenomic entering into any letter of intent or similar document or any contract relating to any alternate acquisition proposal or (v) Transgenomic entering into a definitive agreement to effect an alternate acquisition proposal, then Transgenomic shall pay to Precipio, by wire transfer of immediately available funds within three business days after termination of the Merger Agreement, a nonrefundable fee in an amount equal to $256,500 . If the Merger Agreement is terminated by Transgenomic or Precipio pursuant to (i) Precipio’s board of managers failing to recommend that its members vote or act by written consent to approve the merger; (ii) Precipio’s board of managers failing to make, withholding, withdrawing, amending, changing, qualifying or publicly proposing to withhold, withdraw, amend, change or qualify in a manner adverse to Transgenomic, its recommendation that the members of Precipio vote in favor of each of the merger, the execution of the Merger Agreement and the consummation of the transaction contemplated therein, knowingly making any public statement inconsistent with such recommendation, failing to recommend against acceptance of any alternate acquisition proposal within ten business days after the public announcement of any such alternate acquisition proposal, approving, adopting, recommending or proposing publicly to approve, adopt or recommend any alternate acquisition proposal, or making any public statement inconsistent with its recommendation; (iii) Precipio entering into any letter of intent or similar document or any contract relating to any alternate acquisition proposal; or (iv) Precipio entering into a definitive agreement to effect an alternate acquisition proposal, Precipio shall pay to Transgenomic, by wire transfer of immediately available funds within three business days after termination of the Merger Agreement, a nonrefundable fee in an amount equal to $256,500 . In connection with entering into the Merger Agreement, Transgenomic and members and warrant holders of Precipio (collectively, the “Supporting Members”), entered into a voting agreement (the “Precipio Voting Agreement”) pursuant to which the Supporting Members agreed to, among other things, (i) authorize and approve the Merger Agreement and the transactions contemplated thereby and (ii) vote against any Acquisition Proposal (as defined in the Merger Agreement). Collectively, the shares held by the Supporting Members represent approximately 71% of Precipio’s issued and outstanding membership interests. Precipio and certain Transgenomic stockholders (the “Supporting Stockholders”) also entered into a voting agreement (the “Transgenomic Voting Agreement”) pursuant to which the Supporting Stockholders agreed to, among other things, (i) authorize and approve the Merger Agreement and the transactions contemplated thereby and (ii) vote against any Acquisition Proposal (as defined in the Merger Agreement). Collectively, the shares held by the Supporting Stockholders represent approximately 31.84% of Transgenomic’s voting stock. 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 ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation. The consolidated financial statements include the accounts of Transgenomic, Inc. and its wholly owned subsidiary. All inter-company balances and transactions have been eliminated in consolidation. Risks and Uncertainties. Certain risks and uncertainties are inherent in the Company’s day-to-day operations and to the process of preparing our financial statements. The more significant of those risks are presented below and throughout the notes to the financial statements. Use of Estimates. The preparation of 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. The key estimates included in the consolidated financial statements include stock option valuations, goodwill and intangible valuations, accounts receivable and inventory valuations, warrant valuations and contractual allowances. Actual results could differ from the estimates and assumptions used in preparing these consolidated financial statements. Basis of Presentation. The accompanying consolidated financial statements are presented in conformity with U.S. generally accepted accounting principles (“GAAP”). All amounts are presented in U.S. Dollars (“$”). Supplemental cash flows from discontinued operations are presented in Note 3 to the consolidated financial statements “Discontinued Operations.” The Company has evaluated events occurring subsequent to December 31, 2016 for potential recognition or disclosure in the consolidated financial statements and concluded there were no subsequent events that required recognition or disclosure other than those provided in Note 14 “Subsequent Events”. Fair Value. Unless otherwise specified, book value approximates fair value. The Company’s Level 1 financial instruments include cash and cash equivalents. The Company’s Level 3 financial instruments include the common stock warrant liability, preferred stock warrant liability and conversion feature, and debt. Due to its variable interest component, debt approximates fair value. The common stock warrant liability and Series A Convertible Preferred Stock (“Series A Preferred Stock”) warrant liability and conversion feature are recorded at fair value. See Note 12 “Fair Value”. 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. Such investments presently consist of temporary overnight investments. Other current assets of $0.1 million as of December 31, 2016 consists of prepaid assets. Other current assets as of December 31, 2015 of $0.5 million includes prepaid assets of $0.2 million , unbilled receivables 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 for the years ended December 31, 2016 and 2015. Accounts Receivable. The following is a summary of activity for the allowance for doubtful accounts from continuing operations during the years ended December 31, 2016 and 2015 : Dollars in Thousands Beginning Balance Provision Write Offs Ending Balance Twelve months ended December 31, 2016 $ 87 $ 72 $ (19 ) $ 140 Twelve months ended December 31, 2015 $ 20 $ 67 $ — $ 87 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 and contractual allowances. The estimate made for doubtful accounts is based on a review of all outstanding amounts on a quarterly basis. The estimate for contractual allowances is based on contractual terms or historical reimbursement rates and is recorded when revenue is recorded. We determine the allowance for doubtful accounts and contractual allowances 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. 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. We write down slow-moving and obsolete inventory by the difference between the value of the inventory and our estimate of the reduced value based on potential future uses, the likelihood that overstocked inventory will be sold and the expected selling prices of the inventory. If our ability to realize value on slow-moving or obsolete inventory is less favorable than assumed, additional write-downs of the inventory may be required. At December 31, 2016 and 2015, our inventories were less than $0.1 million and were comprised predominantly of raw materials. Property and Equipment. Property and equipment are carried at cost. Depreciation is computed by the straight-line method over the estimated useful lives of the related assets as follows: Leasehold improvements 1 to 10 years Furniture and fixtures 3 to 7 years Production equipment 3 to 7 years Computer equipment 3 to 7 years Research and development equipment 2 to 7 years Depreciation expense related to property and equipment during the years ended December 31, 2016 and 2015 was $0.1 million and $0.2 million , respectively. Included in depreciation for each of the years ended December 31, 2016 and 2015 was $0.1 million related to equipment acquired under capital leases. We test our property and equipment for impairment when factors are present that indicate the carrying value of an asset (group) may not be recoverable. There was no impairment for the year ended December 31, 2016. During 2015, as part of our review for impairment of long-lived assets, we recorded an impairment charge of approximately $0.8 million related to property and equipment during the three months ended September 30, 2015. See Note 4 - “Intangible Assets and Other Assets” for further discussion regarding the impairment of our long-lived assets. Goodwill and 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. We test our intangible assets for impairment when factors are present that indicate the carrying value of an intangible asset (group) may not be recoverable. Impairment occurs when the carrying value is determined to be not recoverable, thereby causing the carrying value of the intangible asset (group) to exceed its fair value. If impaired, the asset’s carrying value is reduced to its fair value. During the year ended December 31, 2016 we had impairment charges of $0.3 million related to our patents. During 2015, we performed an interim testing of impairment of goodwill and long-lived assets as of September 30, 2015, due to the significant decline in the market price of our stock. As a result of this testing, we recorded impairment charges of $6.2 million related to our long-lived assets during the three months ended September 30, 2015 but determined that no impairment of goodwill was needed to be recorded. See Note 4 - “Intangible Assets and Other Assets” for further discussion regarding the impairment of our intangible assets. During the fourth quarter of 2015, it was concluded that our Patient Testing business, which met the criteria to be classified as held for sale and reported as discontinued operations as of December 31, 2015, was impaired due to continued declines in financial performance and due to the fact that the likelihood of recoverability of the Patient Testing goodwill through sale of the Patient Testing business was remote. As a result we determined that the goodwill related to the Patient Testing business was impaired as of December 31, 2015. Goodwill impairment charges of $6.9 million were recorded during 2015. The goodwill and impairment charges are included in the results of our discontinued operations. See Note 3 - “Discontinued Operations” for further discussion regarding the results of discontinued operations. 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 Liability is considered a Level 3 financial instrument. See Note 12 - “Fair Value”. Stock Based Compensation. All stock-based awards to date have exercise prices equal to the market price of our common stock on the date of grant and have ten -year contractual terms. Unvested options as of December 31, 2016 had vesting periods of one or three years from the date of grant. None of the stock options outstanding at December 31, 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, including stock options. 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. Income Taxes. Deferred tax assets and liabilities are determined based on the differences between the financial reporting and tax basis of assets and liabilities at each balance sheet date using tax rates expected to be in effect in the year the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent that it is more likely than not that they will not be realized. Our policy is to record interest and penalties directly related to income taxes as income tax expense in the Consolidated Statements of Operations. 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 recognize revenue when we deliver the service. These projects typically do not extend beyond one year. At December 31, 2016 and 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 are recognized on an individual test basis and, since collectability is not reasonably assured, are recognized when cash is received. There are no deferred net sales associated with our Patient Testing services. Historically, 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. Our Patient Testing revenues are reported as part of discontinued operations (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. Taxes collected from customers and remitted to government agencies for specific net sales producing transactions are recorded net with no effect on the income statement. Research and Development. Research and development and various collaboration costs are charged to expense when incurred. Loss Per Share. Basic loss per share is calculated based on the weighted-average number of shares of common stock 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, as long as the effect is not anti-dilutive. Options, warrants and conversion rights pertaining to 8,265,584 and 9,963,886 shares of our common stock have been excluded from the computation of diluted earnings per share at December 31, 2016 and 2015 , respectively. The options, warrants and conversion rights that were exercisable in 2016 and 2015 were not included because the effect would be anti-dilutive due to the net loss. A beneficial conversion dividend was incurred in Q1 2016 but not accounted for until Q4 2016. Since the recording of the dividend has no impact on our earnings, we do not believe the omission is material but below are the effects of the dividend on each of our quarterly results. Three Months Ended March 31, 2016 (dollars in thousands except per share data) As Reported Beneficial Conversion Dividend Adjusted NET LOSS $ (3,264 ) $ (3,264 ) PREFERRED STOCK DIVIDENDS (21 ) (372 ) (393 ) NET LOSS FROM CONTINUING OPERATIONS AVAILABLE TO COMMON STOCKHOLDERS (2,112 ) (372 ) (2,484 ) NET INCOME (LOSS) FROM DISCONTINUED OPERATIONS AVAILABLE TO COMMON STOCKHOLDERS (1,173 ) (1,173 ) NET LOSS AVAILABLE TO COMMON STOCKHOLDERS $ (3,285 ) (372 ) $ (3,657 ) BASIC AND DILUTED LOSS PER COMMON SHARE FROM CONTINUING OPERATIONS $ (0.10 ) $ (0.12 ) BASIC AND DILUTED INCOME (LOSS) PER COMMON SHARE FROM DISCONTINUED OPERATIONS $ (0.06 ) $ (0.06 ) BASIC AND DILUTED LOSS PER COMMON SHARE $ (0.16 ) $ (0.18 ) BASIC AND DILUTED WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING 20,323,333 20,323,333 Six Months Ended June 30, 2016 (dollars in thousands except per share data) As Reported Beneficial Conversion Dividend Adjusted NET LOSS $ (4,261 ) $ (4,261 ) PREFERRED STOCK DIVIDENDS (21 ) (372 ) (393 ) NET LOSS FROM CONTINUING OPERATIONS AVAILABLE TO COMMON STOCKHOLDERS (4,291 ) (372 ) (4,663 ) NET INCOME (LOSS) FROM DISCONTINUED OPERATIONS AVAILABLE TO COMMON STOCKHOLDERS 9 9 NET LOSS AVAILABLE TO COMMON STOCKHOLDERS $ (4,282 ) (372 ) $ (4,654 ) BASIC AND DILUTED LOSS PER COMMON SHARE FROM CONTINUING OPERATIONS $ (0.20 ) $ (0.22 ) BASIC AND DILUTED INCOME (LOSS) PER COMMON SHARE FROM DISCONTINUED OPERATIONS $ — $ — BASIC AND DILUTED LOSS PER COMMON SHARE $ (0.20 ) $ (0.22 ) BASIC AND DILUTED WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING 21,060,387 21,060,387 Nine Months Ended September 30, 2016 (dollars in thousands except per share data) As Reported Beneficial Conversion Dividend Adjusted NET LOSS $ (6,187 ) $ (6,187 ) PREFERRED STOCK DIVIDENDS (21 ) (372 ) (393 ) NET LOSS FROM CONTINUING OPERATIONS AVAILABLE TO COMMON STOCKHOLDERS (6,183 ) (372 ) (6,555 ) NET INCOME (LOSS) FROM DISCONTINUED OPERATIONS AVAILABLE TO COMMON STOCKHOLDERS (25 ) (25 ) NET LOSS AVAILABLE TO COMMON STOCKHOLDERS $ (6,208 ) (372 ) $ (6,580 ) BASIC AND DILUTED LOSS PER COMMON SHARE FROM CONTINUING OPERATIONS $ (0.28 ) $ (0.30 ) BASIC AND DILUTED INCOME (LOSS) PER COMMON SHARE FROM DISCONTINUED OPERATIONS $ — $ — BASIC AND DILUTED LOSS PER COMMON SHARE $ (0.28 ) $ (0.30 ) BASIC AND DILUTED WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING 21,896,943 21,896,943 Recently Issued Accounting Pronouncements. In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers. 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 generally accepted accounting principles in the U.S. 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) . The new 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. This standard is effective for annual periods ending after December 15, 2016, and for annual and interim periods thereafter. Early adoption is permitted. The adoption of ASU 2014-15 did not have a material effect on our consolidated financial statements, however it may affect future disclosures. 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. In August 2016, FASB issued ASU No. 2016-15 , Classification of Certain Cash Receipts and Cash Payments. ASU No. 2016-15 eliminates the diversity in practice related to the classification of certain cash receipts and payments in the statement of cash flows by adding or clarifying guidance on eight specific cash flow issues. ASU No. 2016-15 is effective for fiscal years beginning after December 15, 2017, and for interim periods within that fiscal year. We do not believe ASU No. 2016-15 will have a material effect on our financial position and results of operations. |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 12 Months Ended |
Dec. 31, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISCONTINUED OPERATIONS | DISCONTINUED 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 of 2016, we announced that we had suspended testing services in our Patient Testing laboratory as we reviewed and evaluated 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. 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: Years ended December 31, (dollars in thousands) 2016 2015 Net sales $ 2,163 $ 18,308 Cost of goods sold 574 12,287 Gross profit 1,589 6,021 Selling, general and administrative expense 1,710 15,187 Research and development expense 167 408 Impairment of long-lived assets — 13,942 Operating income (loss) from discontinued operations (288 ) (23,516 ) Gain on settlement of accounts payable 325 — Gain (loss) on sale of assets/business 1,047 (224 ) Income (loss) from discontinued operations before income taxes 1,084 (23,740 ) Income tax expense (benefit) 431 (648 ) Income (loss) from discontinued operations $ 653 $ (23,092 ) The income from discontinued operations for the year ended December 31, 2016, includes approximately $1.0 million in proceeds received from the sale of assets of our discontinued Patient Testing business and approximately $0.3 million of a gain resulting from a settlement of accounts payable with a vendor. In addition during the 2016 the Company determined it was going to continue providing services related to its oncology testing. As such, revenues previously reported in discontinued operations for the year ended December 31, 2015 were reclassified to continuing operations. The result was, revenue from continuing operations increased and loss from discontinued operations increased by $0.3 million for the year ended December 31, 2015. There was no effect on net loss or stockholders’ deficit for 2015. Assets and liabilities of the discontinued operations are classified as assets held for sale and liabilities held for sale in the consolidated balance sheets and consisted of the following: Dollars in Thousands December 31, December 31, ASSETS Accounts receivable, net $ — $ 1,905 Other current assets 31 82 Total Assets $ 31 $ 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 years ended December 31, 2016 and 2015. The allowance for doubtful accounts from discontinued operations are included in the assets held for sale in the consolidated balance sheets. Dollars in Thousands Beginning Balance Provision Write Offs Ending Balance Twelve months ended December 31, 2016 $ 14,664 $ — $ (14,664 ) $ — Twelve months ended December 31, 2015 $ 7,927 $ 9,447 $ (2,710 ) $ 14,664 |
INTANGIBLE ASSETS AND OTHER ASS
INTANGIBLE ASSETS AND OTHER ASSETS | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS AND OTHER ASSETS | INTANGIBLE ASSETS AND OTHER ASSETS During the year ended December 31, 2016, we recorded impairment charges of $0.3 million related to our patents. In 2015, we performed an impairment test as of September 30, 2015 due to the significant decline in the market price of our stock. As a result of this testing, we recorded impairment charges related to our long-lived assets of approximately $7.0 million during the three months ended September 30, 2015. The impairment charges included $0.8 million related to property and equipment and $6.2 million related to amortizable intangibles. Long-lived intangible assets and other assets consisted of the following: Dollars in Thousands December 31, 2016 Cost Accumulated Amortization Net Book Value Patents $ 233 $ 26 $ 207 Intellectual property 672 317 355 $ 905 $ 343 $ 562 Dollars in Thousands December 31, 2015 Cost Accumulated Amortization Net Book Value Patents $ 773 $ 67 $ 706 Intellectual property 671 207 464 $ 1,444 $ 274 $ 1,170 Estimated Useful Life Patents 13.5 years Intellectual property 7 years During the year ended December 31, 2016, we impaired patents having a carrying value of $0.3 million . This cost is included in our research and development expense in our accompanying consolidated statements of operations. Also during 2016, we assigned and sold certain patents having a carrying value of $0.2 million . This cost is included in our loss on sale/disposal of assets in our accompanying consolidated statements of operations. Amortization expense for intangible assets was $0.2 million and $0.1 million during the years ended December 31, 2016 and 2015 , respectively. Amortization expense for intangible assets for each of the five succeeding fiscal years is expected to be $0.1 million , $0.1 million , $0.1 million , less than $0.1 million and less than $0.1 million for the years ended December 31, 2017, 2018, 2019, 2020 and 2021, respectively. Other assets include security deposits. |
DEBT
DEBT | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT Dollars in Thousands Year Ended December 31, 2016 2015 Revolving Line (1) $ 3,243 $ 3,025 Term Loan (2) 4,000 4,000 Convertible Promissory Note (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 initially bore interest at an annual rate equal to the greater of (a) 4.25% or (b) the Wall Street Journal prime rate plus 1% . Interest is payable on a monthly basis, with the balance payable at the maturity of the Revolving Line. Under the Amendment to the Loan Agreement, which we entered into on August 2, 2013, amounts advanced under the Revolving Line bear interest at an annual rate equal to the greater of (x) 6.25% or (y) the Wall Street Journal prime rate plus 3% . The current interest rate is 6.75% . As discussed below under Additional Terms , the interest rate is subject to increase if there is a default under the Loan Agreement. Under the Loan Agreement, we paid the Lenders an upfront fee of $20,000 , and will pay the Lenders an additional commitment fee of $20,000 on each one year anniversary of 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 by the Sixth Amendment (as defined in “-Revolving Line and Term Loan” below), we made a principal payment of approximately $148,000 on April 1, 2015 and were not be obligated to make monthly payments of principal to the Lenders until April 1, 2016. Pursuant to the Eighth Amendment of the Loan Agreement, 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% . As discussed below, the interest rate is subject to increase if there is a default under the Loan Agreement. We paid the Lenders an upfront fee of $40,000 for the Term Loan, and will pay the Lenders an additional final payment of $120,000 at maturity or prepayment of the Term Loan. In addition, if we repay the Term Loan prior to maturity, we will pay the Lenders a prepayment penalty of 1% of the total outstanding balance under the Term Loan. Additional Terms The Loan Agreement contains affirmative and negative covenants. Under the Loan Agreement, we are required to maintain a minimum liquidity ratio and achieve a minimum amount of revenue, and we also agreed not to (i) pledge or otherwise encumber our assets other than to the Lenders, (ii) enter into additional borrowings or guarantees, (iii) repurchase our capital stock, or (iv) enter into certain mergers or acquisitions without the Lenders’ consent. Additionally, the Loan Agreement contains a subjective acceleration clause at the discretion of the Lenders. As of December 31, 2016, we were not in compliance with the Loan Agreement, as amended by the Ninth Amendment, due to the fact that events of default existed, including our failure to make the required monthly interest payments during the second half of 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 and would increase the applicable interest rate under the Revolving Line or Term Loan (or both) by 5% , and permit the Lenders to exercise remedies with respect to the collateral under the Loan Agreement. At December 31, 2016, our applicable interest rates have been increased by 5% . (3) Convertible Promissory Notes. The Notes accrue interest at a rate of 6% per year and matured 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, a related party, (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 covenant 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 made 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 extended the time period in which we had to provide certain reports and statements to the Lenders and amended the circumstances pursuant to which could 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 Amendment (the “Eighth Amendment”). The Eighth Amendment, among other things, (1) provided that the Lenders waived specified events of default under the terms of the Loan Agreement, (2) reduced our future minimum revenue covenants under the Loan Agreement, (3) extended the maturity date of the Loan Agreement until November 1, 2017, and (4) provided for the repayment of an overadvance of $750,000 previously provided by the Lenders to us pursuant to the Loan Agreement. During the first quarter of 2016, the overadvance that existed at December 31, 2015 was repaid to the Lenders and $0.2 million was received from certain of the Lenders and another lender affiliate in connection with the equity offering made on January 6, 2016. 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. On February 2, 2017, we entered into a termination and tenth amendment to the Loan Agreement (the “Tenth Amendment”). The Tenth Amendment, among other things, (i) provides that the Lenders will waive specified events of default under the terms of the Loan Agreement until the effective time of the Merger (or the termination of the Merger Agreement in accordance with its terms), (ii) provides for the conversion of all outstanding indebtedness owed to the Lenders under the Loan Agreement (the “Outstanding Indebtedness”) into shares of Transgenomic common stock and preferred stock (collectively, the “Conversion Shares”) effective as of the closing date of the Merger and (iii) the termination of the Loan Documents (as defined in the Loan Agreement) and the termination and release of all security interests and liens of the Lenders in the Collateral (as defined in the Loan Agreement) in each case immediately following the conversion of the Outstanding Indebtedness into Conversion Shares. The effectiveness of certain provisions in the Tenth Amendment, including provisions relating to conversion of the Conversion Shares and termination of the Loan Documents, is conditioned on, among other things, the consummation of the Merger, and, in the event that the Merger is not consummated, these provisions in the Loan Agreement Amendment will terminate. In connection with the Tenth Amendment, the Lenders have agreed to convert the outstanding principal and accrued interest under the Loan Agreement into (i) approximately 10.4 million shares of New Precipio common stock immediately prior to the effectiveness of the Merger at a price equal to $0.50 per share and (ii) 24.1 million shares of New Precipio preferred stock. As of December 31, 2016, the outstanding amount owed under the Loan Agreement was approximately $7.2 million of principal and $0.6 million of accrued interest. The issuance of the Conversion Shares is subject to the approval of the Transgenomic stockholders in accordance with NASDAQ Capital Market listing rules 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 (the “Maturity Date”). Under the 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 . We also issued, to our placement agent for the Notes, a convertible promissory note in an aggregate principal amount equal to 5% of the proceeds received by us, or $46,250 (the “Agent Note”). The Additional Notes and Agent Note have the same terms and conditions as the Initial Note. As of December 31, 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. On the Maturity Date, the then outstanding aggregate amount owed on the Additional Notes and Agent Note of approximately $0.6 million , including accrued interest, became due. Pursuant to the terms of the Initial Note, our failure to pay any principal or interest within 10 days of the date such payment is due will constitute an event of default (the “Prospective Event of Default”). On January 10, 2017, the Additional Investors and our placement agent executed a waiver of the Prospective Event of Default, pursuant to which, they agreed to waive the Prospective Event of Default on the condition that the Company and the Additional Investors enter into definitive documentation evidencing the terms for an extended maturity date of the Additional Notes and the Agent Note on or before January 16, 2017 (the “Waiver Deadline”). On January 13, 2017, all but one Additional Investor exercised their conversion rights relating to their respective Additional Notes, including the Agent Note, and converted an aggregate principal amount of $446,250 , and accrued interest thereon, into 416,135 shares of our common stock. The Waiver Deadline was extended with respect to the remaining Additional Investor who did not exercise conversion rights (the “Non-Converting Investor”) so that the parties could continue to discuss a resolution of the Prospective Event of Default relating to such Non-Converting Investor’s Additional Note with an outstanding principal amount due of $125,000 . On January 17, 2017, the Non-Converting Investor agreed to extend the Maturity Date of its Additional Note pursuant to an amendment to the Additional Note (the “Amendment”). The Amendment provides that two-thirds of the outstanding principal amount of the Additional Note must be paid upon the earlier to occur of the close of the Company’s merger with Precipio Diagnostics, LLC or June 16, 2017 (such applicable date, the “Deferred Maturity Date”). The remaining one-third of the principal amount outstanding on the Additional Note must be paid on the six month anniversary of the Deferred Maturity Date (the “Extended Maturity Date”). The aggregate minimum principal maturities of the debt for the following fiscal years are as follows (dollars in thousands): 2017 $ 7,814 Total $ 7,814 |
CAPITAL LEASES
CAPITAL LEASES | 12 Months Ended |
Dec. 31, 2016 | |
Leases [Abstract] | |
CAPITAL LEASES | CAPITAL LEASES The following is an analysis of the property acquired under capital leases. Dollars in Thousands Asset Balances at Classes of Property December 31, December 31, Equipment $ 828 $ 828 Less: Accumulated amortization (796 ) (725 ) Total $ 32 $ 103 The following is a schedule by years of future minimum lease payments under capital leases together with the present value of the net minimum lease payments as of December 31, 2016 . Year ending December 31: Dollars in Thousands 2017 $ 1 Total minimum lease payments $ 1 Less: Amount representing interest — Present value of net minimum lease payments $ 1 The short term portion of our capital leases is included in accrued expenses on the Balance Sheet. Included in depreciation for both of the years ended December 31, 2016 and 2015 was $0.1 million related to equipment acquired under capital leases. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Transgenomic is subject to a number of claims of various amounts, which arise out of the normal course of business. In addition to the claims described in this Note 7, Transgenomic is delinquent on the payment of outstanding accounts payable amounting to approximately $0.6 million with certain of Transgenomic’s vendors and suppliers who have taken or have threatened to take legal action to collect such outstanding amounts. On February 25, 2016, UNMC filed a lawsuit against Transgenomic in the District Court of Douglas County, Nebraska, for breach of contract and seeking recovery of $0.7 million owed by Transgenomic to UNMC. A $0.4 million and $0.7 million liability has been recorded and is reflected in accrued expenses at December 31, 2016 and December 31, 2015. Transgenomic and UNMC entered into a settlement agreement dated February 6, 2017, which included, among other things, a mutual general release of claims, and Transgenomic’s agreement to pay $0.4 million to UNMC in installments over a period of time. As of March 15, 2017, Transgenomic’s initial payment due to UNMC under the settlement agreement is delinquent. Transgenomic and UNMC are currently in discussions to extend the date of Transgenomic’s initial payment due to UNMC. In addition, on April 13, 2016, Fox Chase filed a lawsuit against Transgenomic in 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 between Transgenomic and Fox Chase (the “License Agreement”) as well as the assignment of certain of Transgenomic’s rights under the License Agreement to IDT pursuant to the IDT Agreement. Pursuant to the terms of the IDT Agreement, Transgenomic 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 Transgenomic’s 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 Transgenomic. Transgenomic believes that it has good and substantial defenses to the claims asserted by Fox Chase. Transgenomic is 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 Transgenomic as of the date of filing of this Annual Report on Form 10-K. Furthermore, there is no guarantee that Transgenomic will prevail in this suit or receive any damages or other relief if it does prevail. On June 23, 2016, Mount Sinai filed a lawsuit against Transgenomic 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 Transgenomic to Mount Sinai for services rendered. Transgenomic and Mount Sinai entered into a settlement agreement dated October 27, 2016, which included, among other things, a mutual general release of claims, and Transgenomic’s agreement to pay approximately $0.7 million to Mount Sinai in installments over a period of time. A $0.7 million liability has been recorded and is reflected in accrued expenses at December 31, 2016. Effective as of February 1, 2017, Transgenomic and Mount Sinai agreed to amend the terms of their settlement agreement to extend the date of Transgenomic’s initial payment due to Mount Sinai. On December 19, 2016, Todd Smith (“Smith”) filed a lawsuit against Transgenomic in the District Court of Douglas County Nebraska, alleging breach of contract and seeking recovery of $2.2 million owed by Transgenomic to Smith for costs and damages arising from a breach of Transgenomic’s obligations pursuant to lease agreement between the parties. Transgenomic and Smith are currently in discussions to determine a mutually agreeable means by which to settle the outstanding liability. On February 21, 2017, XIFIN, Inc. (“XIFIN”) filed a lawsuit against us in the District Court for the Southern District of California alleging breach of written contract and seeking recovery of approximately $0.27 million owed by us to XIFIN for damages arising from a breach of our obligations pursuant to a Systems Services Agreement between us and XIFIN, dated as of February 22, 2013, as amended and restated on September 1, 2014. On April 4, 2017, XIFIN filed an application for an entry of default by the clerk of the court against us. A $0.21 million liability has been recorded and is reflected in accrued expenses at December 31, 2016. We and Science Park Development Corporation (“SPDC”) entered into that certain Lease dated as of December 31, 2011, as modified by the First Amendment to Lease dated as of June 18, 2013, as further modified by a letter agreement dated as of February 2, 2015, as modified by the Second Amendment to Lease dated as of June 26, 2015 (the “ SPDC Lease”). In November 2016, SPDC alleged that we defaulted on our obligations under the SPDC Lease. Specifically, SPDC alleges that we failed to pay approximately $0.4 million in rental payments due under the SPDC Lease and that we vacated a portion of the leased premises in violation of the terms of the SPDC Lease. SPDC has not filed a claim against us in connection with these allegations. Transgenomic and SPDC entered into a settlement agreement dated March 6, 2017, which included, among other things, a mutual general release of claims, and Transgenomic’s agreement to pay approximately $0.4 million to SPDC in installments over a period of time. CPA Global provides us with certain patent management services. On February 6, 2017, CPA Global claimed that we owe CPA Global approximately $0.2 million for certain patent maintenance services rendered. CPA Global has not filed claims against us in connection with this allegation. A liability of approximately $0.2 million has been recorded and is reflected in accrued expenses at December 31, 2016. On March 9, 2016, counsel for Edge BioSystems, Inc. (“EdgeBio”) sent a demand letter on behalf of EdgeBio to us in connection with the terms of that certain Asset Purchase Agreement dated September 8, 2015 (the “EdgeBio Agreement”). EdgeBio alleges, among other things, that certain customers of EdgeBio erroneously remitted payments to us, that such payments should have been paid to EdgeBio and that we failed to remit these funds to EdgeBio in violation of the terms of the EdgeBio Agreement. On September 13, 2016, we received a demand for payment letter from EdgeBio’s counsel alleging that the balance due to EdgeBio is approximately $0.1 million . A liability of approximately $0.1 million has been recorded and is reflected in accrued expenses at December 31, 2016. On February 17, 2017, Jesse Campbell (“Campbell”) filed a lawsuit individually and on behalf of others similarly situated against us in the District Court for the District of Nebraska alleging we have a materially incomplete and misleading proxy relating to a potential merger and that the merger agreement’s deal protection provisions deter superior offers. As a result, he alleges that we have violated Sections 14(a) and 20(a) of the Exchange Act and Rule 14a-9 promulgated thereafter. Although we intend to defend the lawsuit, there can be no assurance regarding the ultimate outcome of this case. Given the uncertainty of litigation, the legal standards that must be met for, among other things, class certification and success on the merits, we are unable to estimate the amount of loss, or range of possible loss, at this time that may result from this action. In the event that a settlement is reached related to these matters, the amount of such settlement may be material to our results of operations and financial condition and may have a material adverse impact on our liquidity. Rent expense under all operating leases was $0.2 million in each of 2016 and 2015 . We lease certain equipment, vehicles and operating facilities under non-cancellable operating leases, some of which have escalation clauses that expire on various dates through 2022 , for which, we have recorded a straight-line liability of $0.2 million in accrued liabilities on the consolidated balance sheets at December 31, 2016. Future minimum lease payments under non-cancellable operating leases, including non-cancellable lease associated with discontinued operations, are as follows (dollars in thousands): 2017 $ 226 2018 230 2019 235 2020 239 2021 244 thereafter 144 Total $ 1,318 At December 31, 2016 , firm commitments to vendors totaled less than $0.1 million . |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company’s provision for income taxes from continuing operations for the years ended December 31, 2016 and 2015 relates to income taxes in states, foreign countries and other local jurisdictions and differs from the amounts determined by applying the statutory Federal income tax rate to loss before income taxes for the following reasons: Dollars in Thousands 2016 2015 Benefit at federal rate $ (2,812 ) $ (3,449 ) Increase (decrease) resulting from: State income taxes—net of federal benefit (301 ) (320 ) Miscellaneous permanent differences 6 163 Liability warrants (268 ) 70 Capitalized transaction cost 244 — State, net operating loss expiration/true-up 25 (187 ) Other—net — (119 ) Valuation allowance 3,106 3,842 Total income tax expense (benefit) $ — $ — Dollars in Thousands 2016 2015 Federal: Current $ — $ — Deferred — — Total Federal $ — $ — State: Current $ — $ — Deferred — — Total State $ — $ — Foreign: Current $ — $ — Deferred — — Total Foreign $ — $ — Total Tax Provision $ — $ — The Company’s deferred income tax asset from continuing operations at December 31, 2016 and 2015 is comprised of the following temporary differences: Dollars in Thousands 2016 2015 Deferred Tax Asset: Net operating loss carryforward $ 60,276 $ 51,449 Research and development credit carryforwards 918 918 Other 116 585 61,310 52,952 Less valuation allowance (61,310 ) (52,902 ) Deferred Tax Asset $ — $ 50 Deferred Tax Liability: Property and equipment — 50 Deferred Tax Liability $ — $ 50 Net Deferred Asset (Liability) $ — $ — At December 31, 2016 , we had total unused federal tax net operating loss carryforwards of $167.9 million . The expiration dates are as follows (amounts in thousands): 2018 $ 1,838 2019 8,181 2020 9,662 2021 8,228 2022 16,862 2023 16,173 2024 17,390 2025 8,153 2026 6,792 2027 3,238 2028 1,272 2029 591 2031 2,784 2032 8,358 2033 12,097 2034 7,591 2035 15,147 2036 23,499 Total $ 167,856 Of these federal net operating loss carryforwards, $1.2 million were obtained in the acquisition of Annovis, Inc. and may be subject to certain restrictions. Remaining net operating loss carryforwards could be subject to limitations under section 382 of the Internal Revenue Code of 1986, as amended. At December 31, 2016 , we had unused state tax net operating loss carryforwards of approximately $62.0 million that expire at various times beginning in 2018 . At December 31, 2016 , we had unused research and development credit carryforwards of $0.9 million that expire at various times between 2018 and 2028 . As a result of the asset purchase agreement in November of 2015 which included the stock of our subsidiary Transgenomic Limited, the Company no longer has foreign operating loss carryforwards. We will continue to assess the recoverability of deferred tax assets and the related valuation allowance. To the extent we begin to generate income in future years and it is determined that such valuation allowance is no longer required, the tax benefit of the remaining deferred tax assets will be recognized at such time. It is likely that the proposed Merger will be a change in control that will limit the use of the net operating loss carryforwards. We had no material interest or penalties during fiscal 2016 or fiscal 2015, and we do not anticipate any such items during the next twelve months. Our policy is to record interest and penalties directly related to income taxes as income tax expense in the Consolidated Statements of Operations. We file income tax returns in the U.S. federal jurisdiction, various U.S. state jurisdictions and various foreign jurisdictions. We have statutes of limitation open for Federal income tax returns related to tax years 2012 through 2016 . We have state income tax returns subject to examination primarily for tax years 2012 through 2016 . To the extent the Company has tax attribute carryforwards, the tax years in which the attribute was generated may still be adjusted upon examination by the Internal Revenue Service, state or foreign tax authorities to the extent utilized in a future period. Open tax years related to foreign jurisdictions remain subject to examination. Our primary foreign jurisdiction is the United Kingdom, which has open tax years for 2011 through 2015 . During November 2015, the FASB issued ASU 2015-17, “Balance Sheet Classification of Deferred Taxes”, which simplifies the presentation of deferred income taxes. This ASU requires that deferred tax assets and liabilities be classified as non-current in a statement of financial position. |
EMPLOYEE BENEFIT PLAN
EMPLOYEE BENEFIT PLAN | 12 Months Ended |
Dec. 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
EMPLOYEE BENEFIT PLAN | EMPLOYEE BENEFIT PLAN We maintain an employee 401(k) retirement savings plan that allows for voluntary contributions into designated investment funds by eligible employees. We match the employee’s contributions at the rate of 100% on the first 3% of contributions and 50% on the next 2% of contributions. We may, at the discretion of our Board of Directors, make additional contributions on behalf of the Plan’s participants. Contributions to the 401(k) plan were $0.1 million and $0.4 million for the years ended December 31, 2016 and 2015 , respectively. Effective January 1, 2017, we discontinued matching employee 401(k) contributions. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2016 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS’ EQUITY | STOCKHOLDERS’ EQUITY Common Stock. Pursuant to our Third Amended and Restated Certificate of Incorporation, as amended, we currently have 150,000,000 shares of common stock authorized for issuance. On February 2, 2012, we entered into definitive agreements with institutional and other accredited investors and raised approximately $22.0 million in a private placement financing (the “Private Placement”), which includes an aggregate of $3.0 million in convertible notes (the “Convertible Notes”) issued in December 2011 to entities affiliated with Third Security, LLC (the “Third Security Investors”), a related party, that automatically convert 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 applicable 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 common stock with an exercise price of $15.00 per share. In connection with the conversion of the Convertible Notes, the Third Security Investors received an aggregate of 250,000 shares of common stock and 125,000 warrants on the same terms as all investors in the Private Placement. Craig-Hallum Capital Group LLC served as the sole placement agent for the offering. In consideration for services rendered as the placement agent in the offering, we agreed to (i) pay to the placement agent cash commissions equal to $1,330,000 , or 7.0% of the gross proceeds received in the offering, (ii) issue to the placement agent a five -year warrant to purchase up to 31,666 shares of our common stock (representing 2% of the shares sold in the Private Placement) with an exercise price of $15.00 per share and other terms that are the same as the terms of the warrants issued in the Private Placement; and (iii) reimburse the placement agent for reasonable out-of-pocket expenses, including fees paid to the placement agent’s legal counsel, incurred in connection with the offering, which reimbursable expenses 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 have been used for general corporate and working capital purposes, primarily to accelerate development of several of our key initiatives. On January 24, 2013, we entered into a Securities Purchase Agreement with certain institutional and other accredited investors pursuant to which we: (i) sold to the investors an aggregate of 1,383,333 shares of our common stock at a price per share of $6.00 for aggregate gross proceeds of approximately $8.3 million ; and (ii) issued to the investors warrants to purchase up to an aggregate of 691,656 shares of our common stock with an exercise price of $9.00 per share (the “Offering”). The warrants may be exercised, in whole or in part, at any time from January 30, 2013 until January 30, 2018 and contain both cash and “cashless exercise” features. The Third Security Investors purchased an aggregate of 500,000 shares of common stock and warrants to purchase an aggregate of 250,000 shares of common stock in the Offering on the same terms as the other investors. We used the net proceeds from the Offering for general corporate and working capital purposes. In connection with the Offering, we entered into a registration rights agreement with the investors (the “Registration Rights Agreement”). The Registration Rights Agreement required that we file with the Securities and Exchange Commission (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 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 January 2013 common stock transaction required the repricing and issuance of additional common stock warrants to the holders of warrants issued in the February 2012 common stock and warrant sale. The exercise price of the warrants decreased from $15.00 per share to $12.96 per share and the number of shares issuable upon exercise of the warrants increased from 948,333 to 1,097,600 . 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 $2.375 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 6 “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 . As of the date of filing of this Annual Report, the Placement Agent Note remains outstanding. The Additional Note Private Placement required the repricing and issuance of additional common stock warrants to the investors in our February 2012 common stock and warrant financing. 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 Capital Group LLC (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 “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 2015 Offering, after deducting the Underwriter’s discount and other estimated 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 2015 Offering required the repricing and issuance of additional common stock warrants to the investors in our February 2012 common stock and warrant financing. 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, and the July 2015 Investors purchased from us, (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”). The purchase price for the Series B Warrants was $1.42 per share of our common stock subject to the Series B Warrants. Each of the July 2015 Warrants has a term of 5 and 1/2 years. The Series B Warrants were immediately exercisable, all of which were exercised in December 2016. The Series A Warrants will be exercisable beginning 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 Capital Group LLC (the “2015 Placement Agent”) served as the sole placement agent for the 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 investors in our February 2012 common stock and warrant financing. 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 gross amount 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, with an initial value of $1.8 million . The gross amount of $2.2 million included $2.0 million of cash proceeds and $0.2 million of debt settled with the issuance of preferred stock and warrants. 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”). We determined there was a beneficial conversion feature (“BCF”) in connection with this issuance and valued the BCF at $0.4 million . The holders of the A-1 Preferred were able to convert at any time following the issuance. Accordingly, we recorded a dividend totaling $0.4 million during 2016 related to this beneficial conversion, which was recorded against additional paid in capital. 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 December 31, 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 $1.4 million, 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. During the year ended December 31, 2016, 1,006,419 of the 2016 Warrants were exchanged for 1,613,353 shares of our common stock and cash due of $0.5 million . As of December 31, 2016, the $0.5 million due to a 2016 Investor is included in other current liabilities on our consolidated balance sheet. 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 which was the fair value of the services provided. 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 year ended December 31, 2016, we sold 1,177,849 shares under the ATM Agreement. The average sales price per common share was $0.42 and the aggregate net proceeds from the sales totaled $0.5 million . During the year ended December 31, 2016, the issuance of shares to our vendors and 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 3,239,827 to 3,362,276 . Common Stock Warrants. During the year ended December 31, 2016, we issued warrants to purchase 3,055,555 shares of common stock and warrants were exercised or exchanged for 2,280,517 shares of common stock. Included in the warrants issued in 2016 were 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. During the year ended December 31, 2015, we issued warrants to purchase 3,466,841 shares of common stock and none of the issued warrants were exercised. Included in the warrants issued in 2015 were 800,492 warrant issued due to repricing requirements of the Private Placement and 2,666,349 warrants issued in connection with the 2015 Offering and the July 2015 Offering. During the twelve months ended December 31, 2015, warrants to purchase 431,027 shares of common stock expired. Warrants to purchase an aggregate of 6,696,287 shares of common stock were outstanding at December 31, 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 (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 107,527 $1.21 6,696,287 (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 Footnote 12 - “Fair Value”. These warrants also contain certain anti-dilution provisions that provide for an adjustment to the exercise price and number of shares issuable upon exercise of the warrant in the event that we engage in certain issuances of shares of our common stock at a price lower than the exercise price of the warrant. (2) These warrants were issued in connection with the 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 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. Preferred Stock Series A. The Company’s Board of Directors is authorized to issue up to 15,000,000 shares of preferred stock in one or more series, from time to time, with such designations, powers, preferences and rights and such qualifications, limitations and restrictions as may be provided in a resolution or resolutions adopted by the Board of Directors. The authority of the Board of Directors includes, but is not limited to, the determination or fixing of the following with respect to shares of such class or any series thereof: (i) the number of shares; (ii) the dividend rate, whether dividends shall be cumulative and, if so, from which date; (iii) whether shares are to be redeemable and, if so, the terms and amount of any sinking fund providing for the purchase or redemption of such shares; (iv) whether shares shall be convertible and, if so, the terms and provisions thereof; (v) what restrictions are to apply, if any, on the issue or reissue of any additional preferred stock; and (vi) whether shares have voting rights. The preferred stock may be issued with a preference over the common stock as to the payment of dividends. We have no current plans to issue any additional preferred stock. Classes of stock such as the preferred stock may be used, in certain circumstances, to create voting impediments on extraordinary corporate transactions or to frustrate persons seeking to effect a merger or otherwise to gain control of the Company. For the foregoing reasons, any additional preferred stock issued by the Company could have an adverse effect on the rights of the holders of the common stock. On December 29, 2010, we entered into a transaction with the Third Security Investors, pursuant to the terms of a Series A Convertible Preferred Stock Purchase Agreement (the “Series A Purchase Agreement”), in which we: (i) sold an aggregate of 2,586,205 shares of Series A Preferred Stock at a price of $2.32 per share; and (ii) issued Series A Warrants to purchase up to an aggregate of 1,293,102 shares of Series A Preferred Stock having an exercise price of $2.32 per share (the sale of Series A Preferred Stock and issuance of the Series A Warrants hereafter referred to together as the “Financing”). The Series A Warrants may be exercised at any time from December 29, 2010 until December 28, 2015 and contain a “cashless exercise” feature. The gross proceeds from the Series A financing were $6.0 million . The $0.2 million of costs incurred to complete the Series A financing were recorded as a reduction in the value of the Series A Preferred Stock. We used the net proceeds from the financing to acquire the FAMILION family of genetic tests from PGxHealth, a subsidiary of Clinical Data, Inc. Until the November 2011 modifications, the Series A Preferred Stock met the definition of mandatorily redeemable stock as it was preferred capital stock that was redeemable at the option of the holder through December 2015 and was reported outside of equity. The Series A Preferred Stock was to be accreted to its redemption value of $6.0 million . Until the November 2011 modifications, the Series A Warrants did not qualify to be treated as equity and, accordingly, were recorded as a liability. A preferred stock anti-dilution feature is embedded within the Series A Preferred Stock that met the defin |
EQUITY INCENTIVE PLAN
EQUITY INCENTIVE PLAN | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
EQUITY INCENTIVE PLAN | EQUITY INCENTIVE PLAN The Company’s 2006 Equity Incentive Plan (the “Plan”) allows the Company to make awards of various types of equity-based compensation, including stock options, dividend equivalent rights (“DERs”), stock appreciation rights (“SARs”), restricted stock, restricted stock units, performance units, performance shares and other awards, to employees and directors of the Company. The Company was authorized to issue 1,666,666 shares under the Plan; provided, that no more than 1,250,000 of such shares may be used for grants of restricted stock, restricted stock units, performance units, performance shares and other awards. The Plan expired on July 12, 2016 and as of that date the Company can no longer make additional awards under the Plan. During 2017, the Company intends to present a successor plan to the Transgenomic stockholders for approval. The Plan is administered by the Compensation Committee of the Board of Directors (the “Committee”), which has the authority to set the number, exercise price, term and vesting provisions of the awards granted under the Plan, subject to the terms thereof. Either incentive or non-qualified stock options may be granted to employees of the Company, but only non-qualified stock options may be granted to non-employee directors and advisors. However, in either case, the Plan requires that stock options must be granted at exercise prices not less than the fair market value of the common stock on the date of the grant. Options issued under the plan vest over periods as determined by the Committee and expire 10 years after the date the option was granted. For the years ended December 31, 2016 and 2015 , we recorded compensation expense of $0.1 million and $0.6 million , respectively within selling, general and administrative expense. As of December 31, 2016 , there was $0.1 million of unrecognized compensation expense related to unvested stock awards, which is expected to be recognized over a weighted average period of approximately 1.0 years. The fair value of the options and SARs granted during 2016 was estimated on their respective grant dates using the Black-Scholes option pricing model. The Black-Scholes model was used with the following assumptions: risk-free interest rates of 1.13% to 1.92% , based on the U.S. Treasury yield in effect at the time of grant; dividend yields of zero percent; expected lives of six years, based on historical exercise activity; and volatility of 85% to 86% for grants made during the year ended December 31, 2016 based on the historical volatility of our stock over a time that is consistent with the expected life of the option. The fair value of the options granted during 2015 was estimated on their respective grant dates using the Black-Scholes option-pricing model. The Black-Scholes model was used with the following assumptions: risk-free interest rates of 1.32% to 1.91% , based on the U.S. Treasury yield in effect at the time of grant; dividend yields of zero percent; expected lives of four to six years, based on historical exercise activity; and volatility of 83% to 86% for grants made during the year ended December 31, 2015 based on the historical volatility of our stock over a time that is consistent with the expected life of the option. The weighted average grant date fair value per share of options granted during the years ended December 31, 2016 and 2015 was $0.60 and $0.96 respectively. Stock Options. The following table summarizes stock option activity under the Plan during the year ended December 31, 2016 : Number of Options Weighted Average Exercise Price Outstanding at January 1, 2016 1,107,794 $ 3.45 Granted 25,250 0.84 Forfeited (395,018 ) 2.91 Expired — — Outstanding at December 31, 2016 738,026 $ 3.59 Exercisable at December 31, 2016 537,091 $ 4.26 All stock options outstanding were issued to employees, officers or outside directors. As of December 31, 2016, 720,128 outstanding options were vested or expected to vest. The weighted average exercise price of these options was $3.55 and the aggregate intrinsic value was zero with a remaining weighted average contractual life of 7.5 years . As of December 31, 2016, 537,091 options were exercisable with a weighted average exercise price of $4.26 and an aggregate intrinsic value of zero . The weighted average contractual life of these options was 7.2 years . No options were exercised in 2016 or 2015. The total fair value of awards that vested during 2016 and 2015 was $0.6 million and $0.8 million , respectively. Stock Appreciation Rights ( “ SARs ” ). The following table summarizes SARs activity under the Plan during the year ended December 31, 2016 : Number of SARs Weighted Average Exercise Price Outstanding at January 1, 2016 98,333 $ 4.14 Granted — — Forfeited (15,000 ) 3.15 Expired — — Outstanding at December 31, 2016 83,333 $ 4.32 Exercisable at December 31, 2016 83,333 $ 4.32 All SARs outstanding were issued to officers. As of December 31, 2016, 83,333 outstanding and exercisable SARs shares were vested or expected to vest. The weighted average exercise price of these options was $4.32 and the aggregate intrinsic value was zero with a remaining weighted average contractual life of 6.7 years . There were no SARs shares exercised in 2016 or 2015. During the year ended December 31, 2016, the SARs liability decreased by less than $0.1 million . At December 31, 2016, a liability of less than $0.1 million was recorded in accrued expenses. |
FAIR VALUE
FAIR VALUE | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE | FAIR VALUE FASB guidance on fair value measurements, which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements for our financial assets and liabilities, as well as for other assets and liabilities that are carried at fair value on a recurring basis in our consolidated financial statements. FASB guidance establishes a three-level fair value hierarchy based upon the assumptions (inputs) used to price assets or liabilities. The three levels of inputs used to measure fair value are as follows: Level 1—Unadjusted quoted prices in active markets for identical assets or liabilities; Level 2—Observable inputs other than those included in Level 1, such as quoted prices for similar assets and liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets; and Level 3—Unobservable inputs reflecting our own assumptions and best estimate of what inputs market participants would use in pricing the asset or liability. Debt Our debt is considered a Level 3 liability for which book value approximates fair value due to the variable interest rate it bears. Common Stock Warrant Liabilities. 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. 2012 Warrant Liability The 2012 Warrant Liability represents the fair value of the 3.4 million warrants issued in February 2012 (as adjusted pursuant to the terms of the 2012 warrants). 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. This method is well suited to value options with non-standard features, such as anti-dilution protection. A Monte Carlo simulation model uses repeated random sampling to simulate significant uncertainty in inputs. Assumptions and inputs used in the valuation of the common stock warrants are broken down into four sections: Static Business Inputs; Static Technical Inputs; Simulated Business Inputs; and Simulated Technical Inputs. Static Business Inputs include: Our equity value, which was estimated using our stock price of $0.28 as of December 31, 2016 ; the amount of the down-round financing, the timing of the down-round financing, the expected exercise period of 0.10 years from the valuation date and the fact that no other potential fundamental transactions are expected during the term of the common stock warrants. Static Technical Inputs include: volatility of 67% based on implied and historical rates over the expected term and the risk-free interest rate of 0.44% based on the 1 -month U.S. Treasury yield. Simulated Business Inputs include: the probability of down-round financing, which was estimated to be 25% for simulated equity values below the down-round financing cut-off point. Simulated Technical Inputs include: our equity value in periods 1-10 follows a geometric Brownian motion and is simulated over 10 independent six -month periods; a down-round financing event was randomly simulated in an iteration based on the 25% discrete probability of a down-round financing for those iterations where our simulated equity value at the expected timing of down-round financing was below the down-round financing cut-off point. During the year ended December 31, 2016 , the changes in the fair value of the liability measured using significant unobservable inputs (Level 3) was comprised of the following: Dollars in Thousands For the Year Ended December 31, 2016 Balance at January 1, 2016 $ 350 Total gains or losses: Recognized in earnings (350 ) Balance at December 31, 2016 $ — 2016 Warrant Liability The 2016 Warrant Liability represents the fair value of the 1.8 million warrants issued in January 2016, of which, 0.8 million warrants remain outstanding as of December 31, 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 2016 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 December 31, 2016; volatility of 91% ; and a risk-free interest rate of 1.70% . During the year ended December 31, 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 Year Ended December 31, 2016 Balance at January 1, 2016 $ — Additions 1,827 Deductions from warrant conversions (807 ) Total gains or losses: Recognized in earnings (438 ) Balance at December 31, 2016 $ 582 The change in unrealized gains or losses of Level 3 liabilities is included in earnings and is reported in other income (expense) in our Statement of Operations. |
OPERATING SEGMENT AND GEOGRAPHI
OPERATING SEGMENT AND GEOGRAPHIC INFORMATION | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
OPERATING SEGMENT AND GEOGRAPHIC INFORMATION | OPERATING SEGMENT AND GEOGRAPHIC INFORMATION We have one operating segment as of December 31, 2016, Laboratory Services. Our revenues from continuing operations are primarily generated from pharmacogenomics research services supporting Phase II and Phase III clinical trials conducted by pharmaceutical and biotechnology companies. Based on location of end customers, all of our revenues from continuing operations are attributed to the United States. All of our long-lived assets are also located within the United States. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS Amendment to Merger Agreement As previously reported on October 13, 2016, Transgenomic, Merger Sub, and Precipio entered into 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”). On February 2, 2017, Transgenomic, Merger Sub and Precipio entered into a First Amendment to Agreement and Plan of Merger (the “Merger Agreement Amendment”) which provided for, among other things, the following: (a) the authorization of a line of credit up to $250,000 provided by Precipio to Transgenomic pursuant to an unsecured promissory note (as discussed below under the caption “Bridge Financing”); (b) the revision of the exchange ratio set forth in the Merger Agreement to provide that issued and outstanding common units of Precipio prior to the effective time of the Merger will be converted into the right to receive an amount of shares of New Precipio common stock (“New Precipio common stock”) equal to 80% of the issued and outstanding shares of New Precipio common stock (not taking into account the issuance of shares of convertible preferred stock of New Precipio (“New Precipio preferred stock”) in the Merger or related private placement); (c) the waiver as a condition to the closing of the Merger of the continual listing of the existing shares of Transgenomic’s common stock on the Nasdaq Capital Market; (d) the extension of the deadline pursuant to which a “shelf” registration statement on Form S-3 or other appropriate form is required to be filed by New Precipio with the Securities Exchange Commission to June 1, 2017; (e) the authorization for certain indebtedness of New Precipio to remain outstanding as of the effective date of the Merger; (f) the authorization of certain actions taken by each of Transgenomic and Precipio since the date the Merger Agreement; (g) the removal from the Merger Agreement of certain conditions to closing of the Merger; and (h) the extension of the date that either Transgenomic or Precipio may terminate the Merger Agreement if the Merger has not been consummated to June 30, 2017. Conversion of Unsecured Convertible Promissory Notes On January 20, 2015, Transgenomic entered into a series of Unsecured Convertible Promissory Notes with seven accredited investors (the “Investors”) in the principal amount of $925,000 (the “Notes”). Pursuant to the terms of the Notes, interest accrues at a rate of 6% per year and is due and payable by Transgenomic on December 31, 2016 (the “Maturity Date”). Transgenomic also issued, to its placement agent for the Notes, a 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 Transgenomic, or $46,250 (the “Agent Note”). The Notes are convertible into shares of Transgenomic’s common stock at the option of the Investors and as of December 31, 2016 $400,000 of the aggregate principal amount of the Notes, and accrued interest thereon, has been converted into an aggregate of 281,023 shares of Transgenomic’s common stock. On the Maturity Date, the then outstanding aggregate amount owed on the Notes and Agent Note of $638,016 ( $571,250 in principal amount and $66,766 of accrued interest) became due. Pursuant to the terms of the Notes, Transgenomic’s failure to pay any principal or interest within 10 days of the date such payment is due would constitute an event of default (the “Prospective Event of Default”). On January 10, 2017, the Investors executed a waiver of the Prospective Event of Default, pursuant to which, the Investors agreed to waive the Prospective Event of Default on the condition that Transgenomic and the Investors enter into definitive documentation evidencing the terms for an extended Maturity Date of the Notes and the Agent Note on or before January 16, 2017 (the “Waiver Deadline”). On January 13, 2017, all but one Investor exercised their conversion rights relating to their respective Notes, including the Agent Note, and agreed to convert an aggregate amount of $499,359 of principal and interest due under the Notes and Agent Note into 416,133 shares of Transgenomic’s common stock. The Waiver Deadline was extended with respect to the remaining Investor who had exercised conversion rights (the “Non-Converting Investor”) so that the parties could continue to discuss a resolution of the Prospective Event of Default relating to such Investor’s Note with an outstanding amount due of $139,876 as of January 13, 2017 ( $125,000 in principal amount and $14,876 of accrued interest). On January 17, 2017, the Non-Converting Investor agreed to extend the Maturity Date of its Note pursuant to an amendment to the Note (the “Amendment”). The Amendment provides that two-thirds of the outstanding principal amount of the Note must be paid upon the earlier to occur of the close of Transgenomic’s merger with Precipio or June 16, 2017 (such applicable date, the “Deferred Maturity Date”). The remaining one-third of the principal amount outstanding on the Note must be paid on the six month anniversary of the Deferred Maturity Date (the “Extended Maturity Date”). On the applicable Deferred Maturity Date, all accrued and unpaid interest on the Note as of the Deferred Maturity Date will be converted into shares of Transgenomic’s common stock at a conversion price based on the average closing price of Company common stock on The Nasdaq Stock Market LLC (“Nasdaq”) for the 20 consecutive trading days immediately preceding the date of conversion, but in no event will the conversion price be less than $0.25 per share. Interest that accrues on the remaining principal amount of the Note from the Deferred Maturity Date will be payable on the Extended Maturity Date, unless the Note is converted in which case such interest will be payable in shares of Transgenomic’s common stock as part of the conversion. In exchange for extending the Maturity Date of the Note, Transgenomic will issue to the Non-Converting Investor on the applicable Deferred Maturity Date a warrant to purchase shares of Transgenomic’s common stock having an aggregate value of $6,250 with an exercise price to be determined as of the date of issuance of the warrant based on the average closing price of Company common stock on Nasdaq for the 20 consecutive trading days immediately preceding the date of issuance of the warrant, subject to the approval of Nasdaq if necessary. The warrant will expire two years from the date of issuance. Delisting from Nasdaq As previously disclosed, on February 17, 2017, Transgenomic received written notification from the staff of Nasdaq that, as a result of Transgenomic’s inability to maintain certain Nasdaq continued listing requirements, Nasdaq had determined to delist Transgenomic’s shares from Nasdaq. Accordingly, trading in Transgenomic’s shares was suspended, and on February 22, 2017, Transgenomic’s shares began trading on the OTCQB exchange under the ticker “TBIO”. Amendment to Loan and Security Agreement On February 2, 2017, Transgenomic entered into the Termination and Tenth Amendment (the “Loan Agreement Amendment”) to its Loan and Security Agreement, dated March 13, 2013, with Third Security Senior Staff 2008 LLC, as administrative agent and a lender, and the other lenders party thereto (collectively, the “Lenders”), as amended, for a revolving line of credit and a term loan (as so amended, the “Loan Agreement”). The Loan Agreement Amendment, among other things, (i) provides that the Lenders will waive specified events of default under the terms of the Loan Agreement until the effective time of the Merger (or the termination of the Merger Agreement in accordance with its terms), (ii) provides for the conversion of all outstanding indebtedness owed to the Lenders under the Loan Agreement (the “Outstanding Indebtedness”) into shares of Transgenomic common stock and preferred stock (collectively, the “Conversion Shares”) effective as of the closing date of the Merger and (iii) the termination of the Loan Documents (as defined in the Loan Agreement) and the termination and release of all security interests and liens of the Lenders in the Collateral (as defined in the Loan Agreement) in each case immediately following the conversion of the Outstanding Indebtedness into Conversion Shares. The effectiveness of certain provisions in the Loan Agreement Amendment, including provisions relating to conversion of the Conversion Shares and termination of the Loan Documents, is conditioned on, among other things, the consummation of the Merger, and, in the event that the Merger is not consummated, these provisions in the Loan Agreement Amendment will terminate. As noted above, in connection with the Loan Agreement Amendment, the Lenders have agreed to convert the outstanding principal and accrued interest under the Loan Agreement into (i) approximately 10.4 million shares of New Precipio common stock immediately prior to the effectiveness of the Merger at a price equal to $0.50 per share and (ii) 24.1 million shares of New Precipio preferred stock. As of December 31, 2016, the outstanding amount owed under the Loan Agreement was $7.2 million of principal and $0.6 million of accrued interest. The issuance of the Conversion Shares is subject to the approval of the Transgenomic stockholders in accordance with Nasdaq Capital Market listing rules. The Lenders are affiliates of Third Security, LLC, whose affiliates hold more than 10% of the outstanding voting stock of Transgenomic. Additionally, Doit L. Koppler II, a director of Transgenomic, is affiliated with Third Security, LLC and its affiliates. Legal Proceedings Transgenomic is subject to a number of claims of various amounts that arise out of the normal course of its business. In addition to the claims described in this Note 14, Transgenomic is delinquent on the payment of outstanding accounts payable amounting to approximately $0.6 million with certain of its vendors and suppliers who have taken or have threatened to take legal action to collect such outstanding amounts. On February 25, 2016, UNMC filed a lawsuit against Transgenomic in the District Court of Douglas County, Nebraska, for breach of contract and seeking recovery of $0.7 million owed by Transgenomic to UNMC. Transgenomic and UNMC entered into a settlement agreement dated February 6, 2017, which included, among other things, a mutual general release of claims, and Transgenomic’s agreement to pay $0.4 million to UNMC in installments over a period of time. As of March 15, 2017, Transgenomic’s initial payment due to UNMC under the settlement agreement is delinquent. Transgenomic and UNMC are currently in discussions to extend the date of Transgenomic’s initial payment due to UNMC. A $0.4 million and $0.7 million liability has been recorded and is reflected in accrued expenses at December 31, 2016 and December 31, 2015. In addition, on April 13, 2016, Fox Chase filed a lawsuit against Transgenomic in 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 the License Agreement as well as the assignment of certain of Transgenomic’s rights under the License Agreement to IDT pursuant to the IDT Agreement. Pursuant to the terms of the IDT Agreement, Transgenomic 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 Transgenomic’s 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 Transgenomic. Transgenomic believes that it has good and substantial defenses to the claims asserted by Fox Chase. Transgenomic is 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 Transgenomic as of these financial statements. Furthermore, there is no guarantee that Transgenomic will prevail in this suit or receive any damages or other relief if it does prevail. On June 23, 2016, Mount Sinai filed a lawsuit against Transgenomic 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 Transgenomic to Mount Sinai for services rendered. Transgenomic and Mount Sinai entered into a settlement agreement dated October 27, 2016, which included, among other things, a mutual general release of claims, and Transgenomic’s agreement to pay approximately $0.7 million to Mount Sinai in installments over a period of time. A $0.7 million liability has been recorded and is reflected in accrued expenses at December 31, 2016. Effective as of February 1, 2017, Transgenomic and Mount Sinai agreed to amend the terms of their settlement agreement to extend the date of Transgenomic’s initial payment due to Mount Sinai. On December 19, 2016, Smith filed a lawsuit against Transgenomic in the District Court of Douglas County Nebraska, alleging breach of contract and seeking recovery of $2.2 million owed by Transgenomic to Smith for costs and damages arising from a breach of Transgenomic’s obligations pursuant to lease agreement between the parties. Transgenomic and Smith are currently in discussions to determine a mutually agreeable means by which to settle the outstanding liability. On February 21, 2017, XIFIN filed a lawsuit against us in the District Court for the Southern District of California alleging breach of written contract and seeking recovery of approximately $0.27 million owed by us to XIFIN for damages arising from a breach of our obligations pursuant to a Systems Services Agreement between us and XIFIN, dated as of February 22, 2013, as amended and restated on September 1, 2014. On April 4, 2017, XIFIN filed an application for an entry of default by the clerk of the court against us. A $0.21 million liability has been recorded and is reflected in accrued expenses at December 31, 2016. We and SPDC entered into that certain Lease dated as of December 31, 2011, as modified by the First Amendment to Lease dated as of June 18, 2013, as further modified by a letter agreement dated as of February 2, 2015, as modified by the Second Amendment to Lease dated as of June 26, 2015 (the “ SPDC Lease”). In November 2016, SPDC alleged that we defaulted on our obligations under the SPDC Lease. Specifically, SPDC alleges that we failed to pay approximately $0.4 million in rental payments due under the SPDC Lease and that we vacated a portion of the leased premises in violation of the terms of the SPDC Lease. SPDC has not filed a claim against us in connection with these allegations. Transgenomic and SPDC entered into a settlement agreement dated March 6, 2017, which included, among other things, a mutual general release of claims, and Transgenomic’s agreement to pay approximately $0.4 million to SPDC in installments over a period of time. CPA Global provides us with certain patent management services. On February 6, 2017, CPA Global claimed that we owe CPA Global approximately $0.2 million for certain patent maintenance services rendered. CPA Global has not filed claims against us in connection with this allegation. A liability of approximately $0.2 million has been recorded and is reflected in accrued expenses at December 31, 2016. On March 9, 2016, counsel for EdgeBio sent a demand letter on behalf of EdgeBio to us in connection with the terms of that certain Asset Purchase Agreement dated September 8, 2015 (the “EdgeBio Agreement”). EdgeBio alleges, among other things, that certain customers of EdgeBio erroneously remitted payments to us, that such payments should have been paid to EdgeBio and that we failed to remit these funds to EdgeBio in violation of the terms of the EdgeBio Agreement. On September 13, 2016, we received a demand for payment letter from EdgeBio’s counsel alleging that the balance due to EdgeBio is approximately $0.1 million . A liability of approximately $0.1 million has been recorded and is reflected in accrued expenses at December 31, 2016. On February 17, 2017, Campbell filed a lawsuit individually and on behalf of others similarly situated against us in the District Court for the District of Nebraska alleging we have a materially incomplete and misleading proxy relating to a potential merger and that the merger agreement’s deal protection provisions deter superior offers. As a result, he alleges that we have violated Sections 14(a) and 20(a) of the Exchange Act and Rule 14a-9 promulgated thereafter. Although we intend to defend the lawsuit, there can be no assurance regarding the ultimate outcome of this case. Given the uncertainty of litigation, the legal standards that must be met for, among other things, class certification and success on the merits, we are unable to estimate the amount of loss, or range of possible loss, at this time that may result from this action. In the event that a settlement is reached related to these matters, the amount of such settlement may be material to our results of operations and financial condition and may have a material adverse impact on our liquidity. |
SUMMARY OF SIGNIFICANT ACCOUN23
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation. The consolidated financial statements include the accounts of Transgenomic, Inc. and its wholly owned subsidiary. All inter-company balances and transactions have been eliminated in consolidation. |
Risks and Uncertainties | Risks and Uncertainties. Certain risks and uncertainties are inherent in the Company’s day-to-day operations and to the process of preparing our financial statements. The more significant of those risks are presented below and throughout the notes to the financial statements. |
Use of Estimates | Use of Estimates. The preparation of 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. The key estimates included in the consolidated financial statements include stock option valuations, goodwill and intangible valuations, accounts receivable and inventory valuations, warrant valuations and contractual allowances. Actual results could differ from the estimates and assumptions used in preparing these consolidated financial statements. |
Basis of Presentation | Basis of Presentation. The accompanying consolidated financial statements are presented in conformity with U.S. generally accepted accounting principles (“GAAP”). All amounts are presented in U.S. Dollars (“$”). Supplemental cash flows from discontinued operations are presented in Note 3 to the consolidated financial statements “Discontinued Operations.” The Company has evaluated events occurring subsequent to December 31, 2016 for potential recognition or disclosure in the consolidated financial statements and concluded there were no subsequent events that required recognition or disclosure other than those provided in Note 14 “Subsequent Events”. |
Fair Value | Fair Value. Unless otherwise specified, book value approximates fair value. The Company’s Level 1 financial instruments include cash and cash equivalents. The Company’s Level 3 financial instruments include the common stock warrant liability, preferred stock warrant liability and conversion feature, and debt. Due to its variable interest component, debt approximates fair value. The common stock warrant liability and Series A Convertible Preferred Stock (“Series A Preferred Stock”) warrant liability and conversion feature are recorded at fair value. |
Cash and Cash Equivalents | 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. Such investments presently consist of temporary overnight investments. |
Concentrations of Cash | Concentrations of Cash. From time to time, we may maintain a cash position with financial institutions in amounts that exceed federally insured limits. |
Accounts Receivable | 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 and contractual allowances. The estimate made for doubtful accounts is based on a review of all outstanding amounts on a quarterly basis. The estimate for contractual allowances is based on contractual terms or historical reimbursement rates and is recorded when revenue is recorded. We determine the allowance for doubtful accounts and contractual allowances 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. Inventories are stated at the lower of cost or market. 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. We write down slow-moving and obsolete inventory by the difference between the value of the inventory and our estimate of the reduced value based on potential future uses, the likelihood that overstocked inventory will be sold and the expected selling prices of the inventory. If our ability to realize value on slow-moving or obsolete inventory is less favorable than assumed, additional write-downs of the inventory may be required. |
Property and Equipment | Property and Equipment. Property and equipment are carried at cost. Depreciation is computed by 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 |
Goodwill and Intangible Assets | Goodwill and 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. We test our intangible assets for impairment when factors are present that indicate the carrying value of an intangible asset (group) may not be recoverable. Impairment occurs when the carrying value is determined to be not recoverable, thereby causing the carrying value of the intangible asset (group) to exceed its fair value. If impaired, the asset’s carrying value is reduced to its fair value. |
Common Stock Warrants | Common Stock Warrants. Certain of our issued and outstanding warrants to purchase common stock do not qualify to be treated as equity and accordingly, are recorded as a liability (“Common Stock Warrant Liability”). We are required to present these instruments at fair value at each reporting date and any changes in fair values are recorded as an adjustment to earnings. The Common Stock Warrant Liability is considered a Level 3 financial instrument. |
Stock Based Compensation | Stock Based Compensation. All stock-based awards to date have exercise prices equal to the market price of our common stock on the date of grant and have ten -year contractual terms. Unvested options as of December 31, 2016 had vesting periods of one or three years from the date of grant. None of the stock options outstanding at December 31, 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, including stock options. 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. |
Income Taxes | Income Taxes. Deferred tax assets and liabilities are determined based on the differences between the financial reporting and tax basis of assets and liabilities at each balance sheet date using tax rates expected to be in effect in the year the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent that it is more likely than not that they will not be realized. Our policy is to record interest and penalties directly related to income taxes as income tax expense in the Consolidated Statements of Operations. |
Net Sales Recognition | Net Sales Recognition. Revenue is realized and earned when all of the following criteria are met: • Persuasive evidence of an arrangement exists; • Delivery has occurred or services have been rendered; • The seller’s price to the buyer is fixed or determinable; and • Collectability is reasonably assured. In our Biomarker Identification laboratory, we perform services on a project by project basis. When we receive payment in advance, we recognize revenue when we deliver the service. These projects typically do not extend beyond one year. At December 31, 2016 and 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 are recognized on an individual test basis and, since collectability is not reasonably assured, are recognized when cash is received. There are no deferred net sales associated with our Patient Testing services. Historically, 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. Our Patient Testing revenues are reported as part of discontinued operations (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. Taxes collected from customers and remitted to government agencies for specific net sales producing transactions are recorded net with no effect on the income statement. |
Research and Development | Research and Development. Research and development and various collaboration costs are charged to expense when incurred. |
Loss Per Share | Loss Per Share. Basic loss per share is calculated based on the weighted-average number of shares of common stock 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, as long as the effect is not anti-dilutive. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements. In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers. 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 generally accepted accounting principles in the U.S. 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) . The new 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. This standard is effective for annual periods ending after December 15, 2016, and for annual and interim periods thereafter. Early adoption is permitted. The adoption of ASU 2014-15 did not have a material effect on our consolidated financial statements, however it may affect future disclosures. 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. In August 2016, FASB issued ASU No. 2016-15 , Classification of Certain Cash Receipts and Cash Payments. ASU No. 2016-15 eliminates the diversity in practice related to the classification of certain cash receipts and payments in the statement of cash flows by adding or clarifying guidance on eight specific cash flow issues. ASU No. 2016-15 is effective for fiscal years beginning after December 15, 2017, and for interim periods within that fiscal year. We do not believe ASU No. 2016-15 will have a material effect on our financial position and results of operations. |
SUMMARY OF SIGNIFICANT ACCOUN24
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Allowance for doubtful accounts rollforward | The following is a summary of activity for the allowance for doubtful accounts from continuing operations during the years ended December 31, 2016 and 2015 : Dollars in Thousands Beginning Balance Provision Write Offs Ending Balance Twelve months ended December 31, 2016 $ 87 $ 72 $ (19 ) $ 140 Twelve months ended December 31, 2015 $ 20 $ 67 $ — $ 87 |
Schedule of property and equipment, useful lives | Depreciation is computed by 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 |
Schedule of Error Corrections and Prior Period Adjustments | A beneficial conversion dividend was incurred in Q1 2016 but not accounted for until Q4 2016. Since the recording of the dividend has no impact on our earnings, we do not believe the omission is material but below are the effects of the dividend on each of our quarterly results. Three Months Ended March 31, 2016 (dollars in thousands except per share data) As Reported Beneficial Conversion Dividend Adjusted NET LOSS $ (3,264 ) $ (3,264 ) PREFERRED STOCK DIVIDENDS (21 ) (372 ) (393 ) NET LOSS FROM CONTINUING OPERATIONS AVAILABLE TO COMMON STOCKHOLDERS (2,112 ) (372 ) (2,484 ) NET INCOME (LOSS) FROM DISCONTINUED OPERATIONS AVAILABLE TO COMMON STOCKHOLDERS (1,173 ) (1,173 ) NET LOSS AVAILABLE TO COMMON STOCKHOLDERS $ (3,285 ) (372 ) $ (3,657 ) BASIC AND DILUTED LOSS PER COMMON SHARE FROM CONTINUING OPERATIONS $ (0.10 ) $ (0.12 ) BASIC AND DILUTED INCOME (LOSS) PER COMMON SHARE FROM DISCONTINUED OPERATIONS $ (0.06 ) $ (0.06 ) BASIC AND DILUTED LOSS PER COMMON SHARE $ (0.16 ) $ (0.18 ) BASIC AND DILUTED WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING 20,323,333 20,323,333 Six Months Ended June 30, 2016 (dollars in thousands except per share data) As Reported Beneficial Conversion Dividend Adjusted NET LOSS $ (4,261 ) $ (4,261 ) PREFERRED STOCK DIVIDENDS (21 ) (372 ) (393 ) NET LOSS FROM CONTINUING OPERATIONS AVAILABLE TO COMMON STOCKHOLDERS (4,291 ) (372 ) (4,663 ) NET INCOME (LOSS) FROM DISCONTINUED OPERATIONS AVAILABLE TO COMMON STOCKHOLDERS 9 9 NET LOSS AVAILABLE TO COMMON STOCKHOLDERS $ (4,282 ) (372 ) $ (4,654 ) BASIC AND DILUTED LOSS PER COMMON SHARE FROM CONTINUING OPERATIONS $ (0.20 ) $ (0.22 ) BASIC AND DILUTED INCOME (LOSS) PER COMMON SHARE FROM DISCONTINUED OPERATIONS $ — $ — BASIC AND DILUTED LOSS PER COMMON SHARE $ (0.20 ) $ (0.22 ) BASIC AND DILUTED WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING 21,060,387 21,060,387 Nine Months Ended September 30, 2016 (dollars in thousands except per share data) As Reported Beneficial Conversion Dividend Adjusted NET LOSS $ (6,187 ) $ (6,187 ) PREFERRED STOCK DIVIDENDS (21 ) (372 ) (393 ) NET LOSS FROM CONTINUING OPERATIONS AVAILABLE TO COMMON STOCKHOLDERS (6,183 ) (372 ) (6,555 ) NET INCOME (LOSS) FROM DISCONTINUED OPERATIONS AVAILABLE TO COMMON STOCKHOLDERS (25 ) (25 ) NET LOSS AVAILABLE TO COMMON STOCKHOLDERS $ (6,208 ) (372 ) $ (6,580 ) BASIC AND DILUTED LOSS PER COMMON SHARE FROM CONTINUING OPERATIONS $ (0.28 ) $ (0.30 ) BASIC AND DILUTED INCOME (LOSS) PER COMMON SHARE FROM DISCONTINUED OPERATIONS $ — $ — BASIC AND DILUTED LOSS PER COMMON SHARE $ (0.28 ) $ (0.30 ) BASIC AND DILUTED WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING 21,896,943 21,896,943 |
DISCONTINUED OPERATIONS (Tables
DISCONTINUED OPERATIONS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Disposal Groups, Including Discontinued Operations | The following is a summary of activity for the allowance for doubtful accounts from discontinued operations during the years ended December 31, 2016 and 2015. The allowance for doubtful accounts from discontinued operations are included in the assets held for sale in the consolidated balance sheets. Dollars in Thousands Beginning Balance Provision Write Offs Ending Balance Twelve months ended December 31, 2016 $ 14,664 $ — $ (14,664 ) $ — Twelve months ended December 31, 2015 $ 7,927 $ 9,447 $ (2,710 ) $ 14,664 Results of the discontinued operations consisted of the following: Years ended December 31, (dollars in thousands) 2016 2015 Net sales $ 2,163 $ 18,308 Cost of goods sold 574 12,287 Gross profit 1,589 6,021 Selling, general and administrative expense 1,710 15,187 Research and development expense 167 408 Impairment of long-lived assets — 13,942 Operating income (loss) from discontinued operations (288 ) (23,516 ) Gain on settlement of accounts payable 325 — Gain (loss) on sale of assets/business 1,047 (224 ) Income (loss) from discontinued operations before income taxes 1,084 (23,740 ) Income tax expense (benefit) 431 (648 ) Income (loss) from discontinued operations $ 653 $ (23,092 ) Assets and liabilities of the discontinued operations are classified as assets held for sale and liabilities held for sale in the consolidated balance sheets and consisted of the following: Dollars in Thousands December 31, December 31, ASSETS Accounts receivable, net $ — $ 1,905 Other current assets 31 82 Total Assets $ 31 $ 1,987 LIABILITIES Accrued compensation $ — $ 264 Total Liabilities $ — $ 264 |
INTANGIBLE ASSETS AND OTHER A26
INTANGIBLE ASSETS AND OTHER ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Indefinite-Lived and Finite-Lived Intangible Assets | Long-lived intangible assets and other assets consisted of the following: Dollars in Thousands December 31, 2016 Cost Accumulated Amortization Net Book Value Patents $ 233 $ 26 $ 207 Intellectual property 672 317 355 $ 905 $ 343 $ 562 Dollars in Thousands December 31, 2015 Cost Accumulated Amortization Net Book Value Patents $ 773 $ 67 $ 706 Intellectual property 671 207 464 $ 1,444 $ 274 $ 1,170 Estimated Useful Life Patents 13.5 years Intellectual property 7 years |
DEBT (Tables)
DEBT (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Dollars in Thousands Year Ended December 31, 2016 2015 Revolving Line (1) $ 3,243 $ 3,025 Term Loan (2) 4,000 4,000 Convertible Promissory Note (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 initially bore interest at an annual rate equal to the greater of (a) 4.25% or (b) the Wall Street Journal prime rate plus 1% . Interest is payable on a monthly basis, with the balance payable at the maturity of the Revolving Line. Under the Amendment to the Loan Agreement, which we entered into on August 2, 2013, amounts advanced under the Revolving Line bear interest at an annual rate equal to the greater of (x) 6.25% or (y) the Wall Street Journal prime rate plus 3% . The current interest rate is 6.75% . As discussed below under Additional Terms , the interest rate is subject to increase if there is a default under the Loan Agreement. Under the Loan Agreement, we paid the Lenders an upfront fee of $20,000 , and will pay the Lenders an additional commitment fee of $20,000 on each one year anniversary of 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 by the Sixth Amendment (as defined in “-Revolving Line and Term Loan” below), we made a principal payment of approximately $148,000 on April 1, 2015 and were not be obligated to make monthly payments of principal to the Lenders until April 1, 2016. Pursuant to the Eighth Amendment of the Loan Agreement, 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% . As discussed below, the interest rate is subject to increase if there is a default under the Loan Agreement. We paid the Lenders an upfront fee of $40,000 for the Term Loan, and will pay the Lenders an additional final payment of $120,000 at maturity or prepayment of the Term Loan. In addition, if we repay the Term Loan prior to maturity, we will pay the Lenders a prepayment penalty of 1% of the total outstanding balance under the Term Loan. Additional Terms The Loan Agreement contains affirmative and negative covenants. Under the Loan Agreement, we are required to maintain a minimum liquidity ratio and achieve a minimum amount of revenue, and we also agreed not to (i) pledge or otherwise encumber our assets other than to the Lenders, (ii) enter into additional borrowings or guarantees, (iii) repurchase our capital stock, or (iv) enter into certain mergers or acquisitions without the Lenders’ consent. Additionally, the Loan Agreement contains a subjective acceleration clause at the discretion of the Lenders. As of December 31, 2016, we were not in compliance with the Loan Agreement, as amended by the Ninth Amendment, due to the fact that events of default existed, including our failure to make the required monthly interest payments during the second half of 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 and would increase the applicable interest rate under the Revolving Line or Term Loan (or both) by 5% , and permit the Lenders to exercise remedies with respect to the collateral under the Loan Agreement. At December 31, 2016, our applicable interest rates have been increased by 5% . (3) Convertible Promissory Notes. The Notes accrue interest at a rate of 6% per year and matured on December 31, 2016. |
Schedule of Maturities of Long-term Debt | The aggregate minimum principal maturities of the debt for the following fiscal years are as follows (dollars in thousands): 2017 $ 7,814 Total $ 7,814 |
CAPITAL LEASES (Tables)
CAPITAL LEASES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Leases [Abstract] | |
Schedule of Capital Leased Assets | The following is an analysis of the property acquired under capital leases. Dollars in Thousands Asset Balances at Classes of Property December 31, December 31, Equipment $ 828 $ 828 Less: Accumulated amortization (796 ) (725 ) Total $ 32 $ 103 |
Schedule of Future Minimum Lease Payments for Capital Leases | The following is a schedule by years of future minimum lease payments under capital leases together with the present value of the net minimum lease payments as of December 31, 2016 . Year ending December 31: Dollars in Thousands 2017 $ 1 Total minimum lease payments $ 1 Less: Amount representing interest — Present value of net minimum lease payments $ 1 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases | Future minimum lease payments under non-cancellable operating leases, including non-cancellable lease associated with discontinued operations, are as follows (dollars in thousands): 2017 $ 226 2018 230 2019 235 2020 239 2021 244 thereafter 144 Total $ 1,318 At December 31, 2016 , firm commitments to vendors totaled less than $0.1 million . |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of Effective Income Tax Rate Reconciliation | The Company’s provision for income taxes from continuing operations for the years ended December 31, 2016 and 2015 relates to income taxes in states, foreign countries and other local jurisdictions and differs from the amounts determined by applying the statutory Federal income tax rate to loss before income taxes for the following reasons: Dollars in Thousands 2016 2015 Benefit at federal rate $ (2,812 ) $ (3,449 ) Increase (decrease) resulting from: State income taxes—net of federal benefit (301 ) (320 ) Miscellaneous permanent differences 6 163 Liability warrants (268 ) 70 Capitalized transaction cost 244 — State, net operating loss expiration/true-up 25 (187 ) Other—net — (119 ) Valuation allowance 3,106 3,842 Total income tax expense (benefit) $ — $ — |
Schedule of Components of Income Tax Expense (Benefit) | Dollars in Thousands 2016 2015 Federal: Current $ — $ — Deferred — — Total Federal $ — $ — State: Current $ — $ — Deferred — — Total State $ — $ — Foreign: Current $ — $ — Deferred — — Total Foreign $ — $ — Total Tax Provision $ — $ — |
Schedule of Deferred Tax Assets and Liabilities | The Company’s deferred income tax asset from continuing operations at December 31, 2016 and 2015 is comprised of the following temporary differences: Dollars in Thousands 2016 2015 Deferred Tax Asset: Net operating loss carryforward $ 60,276 $ 51,449 Research and development credit carryforwards 918 918 Other 116 585 61,310 52,952 Less valuation allowance (61,310 ) (52,902 ) Deferred Tax Asset $ — $ 50 Deferred Tax Liability: Property and equipment — 50 Deferred Tax Liability $ — $ 50 Net Deferred Asset (Liability) $ — $ — |
Summary of Operating Loss Carryforwards | At December 31, 2016 , we had total unused federal tax net operating loss carryforwards of $167.9 million . The expiration dates are as follows (amounts in thousands): 2018 $ 1,838 2019 8,181 2020 9,662 2021 8,228 2022 16,862 2023 16,173 2024 17,390 2025 8,153 2026 6,792 2027 3,238 2028 1,272 2029 591 2031 2,784 2032 8,358 2033 12,097 2034 7,591 2035 15,147 2036 23,499 Total $ 167,856 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Stockholders' Equity Note, Warrants or Rights | 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 (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 107,527 $1.21 6,696,287 (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 Footnote 12 - “Fair Value”. These warrants also contain certain anti-dilution provisions that provide for an adjustment to the exercise price and number of shares issuable upon exercise of the warrant in the event that we engage in certain issuances of shares of our common stock at a price lower than the exercise price of the warrant. (2) These warrants were issued in connection with the 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 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. |
EQUITY INCENTIVE PLAN (Tables)
EQUITY INCENTIVE PLAN (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Share-based Compensation, Stock Options, Activity | The following table summarizes stock option activity under the Plan during the year ended December 31, 2016 : Number of Options Weighted Average Exercise Price Outstanding at January 1, 2016 1,107,794 $ 3.45 Granted 25,250 0.84 Forfeited (395,018 ) 2.91 Expired — — Outstanding at December 31, 2016 738,026 $ 3.59 Exercisable at December 31, 2016 537,091 $ 4.26 |
Schedule of Other Share-based Compensation, Activity | The following table summarizes SARs activity under the Plan during the year ended December 31, 2016 : Number of SARs Weighted Average Exercise Price Outstanding at January 1, 2016 98,333 $ 4.14 Granted — — Forfeited (15,000 ) 3.15 Expired — — Outstanding at December 31, 2016 83,333 $ 4.32 Exercisable at December 31, 2016 83,333 $ 4.32 |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | During the year ended December 31, 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 Year Ended December 31, 2016 Balance at January 1, 2016 $ — Additions 1,827 Deductions from warrant conversions (807 ) Total gains or losses: Recognized in earnings (438 ) Balance at December 31, 2016 $ 582 During the year ended December 31, 2016 , the changes in the fair value of the liability measured using significant unobservable inputs (Level 3) was comprised of the following: Dollars in Thousands For the Year Ended December 31, 2016 Balance at January 1, 2016 $ 350 Total gains or losses: Recognized in earnings (350 ) Balance at December 31, 2016 $ — |
BUSINESS DESCRIPTION (Details)
BUSINESS DESCRIPTION (Details) shares in Millions | Feb. 02, 2017USD ($)shares | Sep. 29, 2015operating_segments | Dec. 31, 2016USD ($)operating_segments | Dec. 31, 2015USD ($) | Oct. 31, 2016 | Oct. 12, 2016USD ($) |
Business Acquisition [Line Items] | ||||||
Number of operating segments | operating_segments | 2 | 1 | ||||
Working capital deficiency | $ 19,300,000 | |||||
Shares converted (value) | $ 199,000 | $ 0 | ||||
Common Stock | Maximum | ||||||
Business Acquisition [Line Items] | ||||||
Stockholders' Equity Note, Reverse Stock Split, Conversion Ratio | 0.1 | |||||
Common Stock | Minimum | ||||||
Business Acquisition [Line Items] | ||||||
Stockholders' Equity Note, Reverse Stock Split, Conversion Ratio | 0.03 | |||||
Precipio | ||||||
Business Acquisition [Line Items] | ||||||
Contingent reimbursable termination payment | $ 256,500 | |||||
Precipio | Subsequent Events | ||||||
Business Acquisition [Line Items] | ||||||
Common stock ownership percentage of shares outstanding | 80.00% | |||||
Precipio | Subsequent Events | Supporting Members | ||||||
Business Acquisition [Line Items] | ||||||
Common stock ownership percentage of shares outstanding | 71.00% | |||||
Precipio | Subsequent Events | Supporting Stockholders | ||||||
Business Acquisition [Line Items] | ||||||
Common stock ownership percentage of shares outstanding | 31.84% | |||||
Precipio | Subsequent Events | Common Stock | ||||||
Business Acquisition [Line Items] | ||||||
Shares converted (shares) | shares | 160.6 | |||||
Common stock ownership percentage of shares outstanding | 52.00% | |||||
Precipio | Subsequent Events | Preferred Stock | ||||||
Business Acquisition [Line Items] | ||||||
Shares converted (shares) | shares | 24.1 | |||||
Shares converted (value) | $ 3,000,000 | |||||
Common stock ownership percentage of shares outstanding | 8.00% |
SUMMARY OF SIGNIFICANT ACCOUN35
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Accounting Policies) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Other current assets | $ 105 | $ 537 | ||
Prepaid expense | 100 | 200 | ||
Unbilled receivables | 100 | |||
Other receivables | 200 | |||
Impairment of patents | $ 6,200 | $ 0 | $ 304 | |
Impairment of intangibles | $ 6,200 | |||
Impairment of goodwill | 6,900 | |||
Equity awards, contractual term | 10 years | |||
Deferred revenue | $ 170 | $ 217 | ||
Options, warrants and conversion rights, common stock callable and antidilutive (in shares) | 8,265,584 | 9,963,886 | ||
Pharmacogenomic services | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Deferred revenue | $ 200 | $ 200 | ||
Patents | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Impairment of patents | $ 300 | |||
Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Equity awards, vesting period | 1 year | |||
Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Equity awards, vesting period | 3 years |
SUMMARY OF SIGNIFICANT ACCOUN36
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Accounts Receivable) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Allowance for Doubtful Accounts Receivable [Roll Forward] | ||
Beginning Balance | $ 87 | $ 20 |
Provision | 72 | 67 |
Write Offs | (19) | 0 |
Ending Balance | $ 140 | $ 87 |
Accounts receivable, general payment terms | 30 days |
SUMMARY OF SIGNIFICANT ACCOUN37
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Inventories) (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
Accounting Policies [Abstract] | ||
Raw materials | $ 0.1 | $ 0.1 |
SUMMARY OF SIGNIFICANT ACCOUN38
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Property, Plant and Equipment) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Sep. 30, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation expense | $ 100,000 | $ 200,000 | |
Depreciation expense, capital leases | 100,000 | 100,000 | |
Impairment charge related to property and equipment | $ 800,000 | $ 0 | $ 0 |
Leasehold improvements | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, estimated useful lives | 1 year | ||
Leasehold improvements | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, estimated useful lives | 10 years | ||
Furniture and fixtures | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, estimated useful lives | 3 years | ||
Furniture and fixtures | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, estimated useful lives | 7 years | ||
Production equipment | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, estimated useful lives | 3 years | ||
Production equipment | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, estimated useful lives | 7 years | ||
Computer equipment | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, estimated useful lives | 3 years | ||
Computer equipment | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, estimated useful lives | 7 years | ||
Research and development equipment | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, estimated useful lives | 2 years | ||
Research and development equipment | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, estimated useful lives | 7 years |
SUMMARY OF SIGNIFICANT ACCOUN39
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Beneficial Conversion Dividend) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |
Mar. 31, 2016 | Jun. 30, 2016 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Net Loss | $ (3,264) | $ (4,261) | $ (6,187) | $ (7,616) | $ (32,954) |
PREFERRED STOCK DIVIDENDS | (393) | (393) | (393) | (393) | (1,324) |
NET LOSS AVAILABLE TO COMMON STOCKHOLDERS | $ (3,657) | $ (4,654) | $ (6,580) | $ (8,009) | $ (34,278) |
BASIC AND DILUTED INCOME (LOSS) PER COMMON SHARE (IN USD PER SHARE) | $ (0.18) | $ (0.22) | $ (0.30) | $ (0.35) | $ (2.78) |
BASIC AND DILUTED WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING | 20,323,333 | 21,060,387 | 21,896,943 | 22,689,831 | 12,321,739 |
Included in continuing operations | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
NET LOSS AVAILABLE TO COMMON STOCKHOLDERS | $ (2,484) | $ (4,663) | $ (6,555) | $ (8,662) | $ (11,186) |
BASIC AND DILUTED INCOME (LOSS) PER COMMON SHARE (IN USD PER SHARE) | $ (0.12) | $ (0.22) | $ (0.30) | $ (0.38) | $ (0.91) |
Included in assets held for sale | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
NET LOSS AVAILABLE TO COMMON STOCKHOLDERS | $ (1,173) | $ 9 | $ (25) | $ 653 | $ (23,092) |
BASIC AND DILUTED INCOME (LOSS) PER COMMON SHARE (IN USD PER SHARE) | $ (0.06) | $ 0 | $ 0 | $ 0.03 | $ (1.87) |
Previously Reported | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Net Loss | $ (3,264) | $ (4,261) | $ (6,187) | ||
PREFERRED STOCK DIVIDENDS | (21) | (21) | (21) | ||
NET LOSS AVAILABLE TO COMMON STOCKHOLDERS | $ (3,285) | $ (4,282) | $ (6,208) | ||
BASIC AND DILUTED INCOME (LOSS) PER COMMON SHARE (IN USD PER SHARE) | $ (0.16) | $ (0.20) | $ (0.28) | ||
BASIC AND DILUTED WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING | 20,323,333 | 21,060,387 | 21,896,943 | ||
Previously Reported | Included in continuing operations | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
NET LOSS AVAILABLE TO COMMON STOCKHOLDERS | $ (2,112) | $ (4,291) | $ (6,183) | ||
BASIC AND DILUTED INCOME (LOSS) PER COMMON SHARE (IN USD PER SHARE) | $ (0.10) | $ (0.20) | $ (0.28) | ||
Previously Reported | Included in assets held for sale | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
NET LOSS AVAILABLE TO COMMON STOCKHOLDERS | $ (1,173) | $ 9 | $ (25) | ||
BASIC AND DILUTED INCOME (LOSS) PER COMMON SHARE (IN USD PER SHARE) | $ (0.06) | $ 0 | $ 0 | ||
Beneficial Conversion Dividend | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
PREFERRED STOCK DIVIDENDS | $ (372) | $ (372) | $ (372) | ||
NET LOSS AVAILABLE TO COMMON STOCKHOLDERS | (372) | (372) | (372) | ||
Beneficial Conversion Dividend | Included in continuing operations | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
NET LOSS AVAILABLE TO COMMON STOCKHOLDERS | $ (372) | $ (372) | $ (372) |
DISCONTINUED OPERATIONS (Narrat
DISCONTINUED OPERATIONS (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||
Mar. 31, 2016 | Jun. 30, 2016 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Nov. 25, 2015 | Sep. 08, 2015 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
INCOME (LOSS) FROM DISCONTINUED OPERATIONS, NET OF TAXES | $ 653 | $ (23,092) | |||||
Net income | $ (3,264) | $ (4,261) | $ (6,187) | (7,616) | (32,954) | ||
Adjustments | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
INCOME (LOSS) FROM DISCONTINUED OPERATIONS, NET OF TAXES | (300) | ||||||
Net income | 0 | ||||||
Genetic Assays And Platforms Business | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Consideration received on assets disposal | $ 2,100 | ||||||
Gain (loss) on sale of assets/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] | |||||||
Consideration received on assets disposal | $ 300 | ||||||
Gain (loss) on sale of assets/business | $ (1,700) | ||||||
Discontinued Operations | Patient Testing | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
INCOME (LOSS) FROM DISCONTINUED OPERATIONS, NET OF TAXES | 1,000 | ||||||
Gain on settlement of accounts payable | $ 300 |
DISCONTINUED OPERATIONS (Revenu
DISCONTINUED OPERATIONS (Revenues and Net Income (Loss)) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Sep. 30, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Impairment of long-lived assets | $ 7,000 | ||
Income (loss) from discontinued operations | $ 653 | $ (23,092) | |
Genetic Assays and Platforms and Patient Testing | Included in assets held for sale | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Net sales | 2,163 | 18,308 | |
Cost of goods sold | 574 | 12,287 | |
Gross profit | 1,589 | 6,021 | |
Selling, general and administrative expense | 1,710 | 15,187 | |
Research and development expense | 167 | 408 | |
Impairment of long-lived assets | 0 | 13,942 | |
Operating income (loss) from discontinued operations | (288) | (23,516) | |
Gain on settlement of accounts payable | 325 | 0 | |
Gain (loss) on sale of assets/business | 1,047 | (224) | |
Income (loss) from discontinued operations before income taxes | 1,084 | (23,740) | |
Income tax expense (benefit) | 431 | (648) | |
Income (loss) from discontinued operations | 653 | $ (23,092) | |
Patient Testing | Included in assets held for sale | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Gain on settlement of accounts payable | 300 | ||
Income (loss) from discontinued operations | $ 1,000 |
DISCONTINUED OPERATIONS (Assets
DISCONTINUED OPERATIONS (Assets and Liabilities of the Discontinued Operations) (Details) - Genetic Assays and Platforms and Patient Testing - Included in assets held for sale - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Accounts receivable, net | $ 0 | $ 1,905 |
Other current assets | 31 | 82 |
Total Assets | 31 | 1,987 |
Accrued compensation | 0 | 264 |
Total Liabilities | $ 0 | $ 264 |
DISCONTINUED OPERATIONS (Allowa
DISCONTINUED OPERATIONS (Allowance for Doubtful Accounts) (Details) - Genetic Assays and Platforms and Patient Testing - Included in assets held for sale - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Allowance for doubtful accounts, beginning balance | $ 14,664 | $ 7,927 |
Provision | 0 | 9,447 |
Write Offs | (14,664) | (2,710) |
Allowance for doubtful accounts, ending balance | $ 0 | $ 14,664 |
INTANGIBLE ASSETS AND OTHER A44
INTANGIBLE ASSETS AND OTHER ASSETS (Narratives) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Impairment of intangible assets | $ 6,200,000 | $ 0 | $ 304,000 | |
Impairment of long-lived assets | 7,000,000 | |||
Impairment charge related to property and equipment | $ 800,000 | 0 | $ 0 | |
Amortization expense | 200,000 | $ 100,000 | ||
Patents | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Impairment of intangible assets | 300,000 | |||
Patents | Abandonment | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Intangible asset carrying value | 300,000 | |||
Patents | Disposed of by Sale | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Intangible asset carrying value | $ 200,000 |
INTANGIBLE ASSETS AND OTHER A45
INTANGIBLE ASSETS AND OTHER ASSETS (Goodwill and Intangible Assets Disclosure) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Finite-Lived Intangible Assets, Net [Abstract] | ||
Cost | $ 905 | $ 1,444 |
Accumulated Amortization | 343 | 274 |
Net Book Value | 562 | 1,170 |
Patents | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Cost | 233 | 773 |
Accumulated Amortization | 26 | 67 |
Net Book Value | $ 207 | 706 |
Estimated Useful Life | 13 years 6 months | |
Intellectual property | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Cost | $ 672 | 671 |
Accumulated Amortization | 317 | 207 |
Net Book Value | $ 355 | $ 464 |
Estimated Useful Life | 7 years |
INTANGIBLE ASSETS AND OTHER A46
INTANGIBLE ASSETS AND OTHER ASSETS (Scheduled Future Amortization) (Details) $ in Millions | Dec. 31, 2016USD ($) |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity | |
Amortization expense, 2017 | $ 0.1 |
Amortization expense, 2018 | 0.1 |
Amortization expense, 2019 | 0.1 |
Amortization expense, 2020 | 0.1 |
Amortization expense, 2021 | $ 0.1 |
DEBT (Summary) (Details)
DEBT (Summary) (Details) - USD ($) $ in Thousands | Aug. 02, 2013 | Mar. 13, 2013 | Dec. 31, 2016 | Dec. 31, 2015 | Apr. 01, 2015 | Dec. 31, 2014 |
Debt Instrument [Line Items] | ||||||
Total debt | $ 7,814 | $ 7,596 | ||||
Current portion of long term debt | (7,814) | (7,596) | ||||
Long term debt, net of current maturities | 0 | 0 | ||||
Initial prepayment of portion of the loan balance | $ 148 | |||||
Line of Credit | Revolving Line | ||||||
Debt Instrument [Line Items] | ||||||
Total debt | 3,243 | 3,025 | ||||
Debt instrument, interest rate, stated percentage | 6.25% | 4.25% | ||||
Debt instrument, interest rate, effective percentage | 6.75% | |||||
Line of credit facility, upfront fee | $ 20 | |||||
Line of credit facility, commitment fee amount | $ 20 | |||||
Line of credit facility, unused capacity, commitment fee percentage | 0.50% | |||||
Term Loan | ||||||
Debt Instrument [Line Items] | ||||||
Total debt | $ 4,000 | 4,000 | ||||
Proceeds from issuance of long-term debt | $ 4,000 | |||||
Initial prepayment of portion of the loan balance | $ 148 | |||||
Long-term debt, percentage bearing variable interest, percentage rate | 9.10% | |||||
Debt instrument, upfront fee | 40 | |||||
Debt instrument, future debt extinguishment costs | $ 120 | |||||
Debt instrument, debt default, interest rate, stated percentage increase | 5.00% | 5.00% | ||||
Convertible Promissory Note | ||||||
Debt Instrument [Line Items] | ||||||
Total debt | $ 571 | $ 571 | ||||
Debt instrument, interest rate, stated percentage | 6.00% | 6.00% | ||||
Wall Street Journal Prime Rate | Line of Credit | Revolving Line | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, basis spread on variable rate | 3.00% | 1.00% | ||||
Prepayment between one and two years after the effective date | Term Loan | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, prepayment penalty percent | 1.00% |
DEBT (Revolving Line and Term L
DEBT (Revolving Line and Term Loan) (Details) - USD ($) | Aug. 10, 2015 | Mar. 13, 2013 | Mar. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Mar. 01, 2015 | Sep. 04, 2015 | Jul. 07, 2015 | Apr. 01, 2015 | Dec. 31, 2014 | Oct. 22, 2014 | Oct. 21, 2014 | Jan. 24, 2013 |
Debt Instrument [Line Items] | |||||||||||||
Capitalized interest and other costs | $ 467,000 | $ 0 | |||||||||||
Initial prepayment of portion of the loan balance | $ 148,000 | ||||||||||||
Promissory note converted | 807,000 | $ 1,012,000 | |||||||||||
Share price (in usd per share) | $ 1.42 | $ 6 | |||||||||||
Precipio | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Promissory note converted | $ 7,200,000 | ||||||||||||
Share price (in usd per share) | $ 0.50 | ||||||||||||
Promissory noted converted, interest rate | $ 600,000 | ||||||||||||
Precipio | Common Stock | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Conversion of convertible promissory notes, shares | 10,400,000 | ||||||||||||
Precipio | Preferred Stock | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Conversion of convertible promissory notes, shares | 24,100,000 | ||||||||||||
Term Loan | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt instrument, debt default, interest rate, stated percentage increase | 5.00% | 5.00% | |||||||||||
Capitalized interest and other costs | $ 400,000 | ||||||||||||
Initial prepayment of portion of the loan balance | $ 148,000 | ||||||||||||
Convertible Promissory Note | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt instrument, face amount | $ 750,000 | $ 750,000 | |||||||||||
Promissory note converted | $ 200,000 | ||||||||||||
Conversion of convertible promissory notes, shares | 502,786 | ||||||||||||
Revolving Credit Facility | Line of Credit | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Line of credit facility, current borrowing capacity | $ 2,300,000 | $ 3,000,000 | $ 4,000,000 | ||||||||||
Repayments of long term line of credit | $ 700,000 | ||||||||||||
Third Security LLC And Affiliates | Term Loan | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt instrument, face amount | $ 4,000,000 | ||||||||||||
Third Security LLC And Affiliates | Revolving Credit Facility | Line of Credit | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Line of credit facility, current borrowing capacity | $ 4,000,000 | ||||||||||||
PGxHealth, LLC | Senior Notes | |||||||||||||
Debt Instrument [Line Items] | |||||||||||||
Debt instrument, term | 3 years |
DEBT (Convertible Promissory No
DEBT (Convertible Promissory Notes) (Details) | Jan. 13, 2017USD ($)shares | Dec. 31, 2014USD ($)$ / shares | Mar. 31, 2016USD ($) | Dec. 31, 2016USD ($)shares | Dec. 31, 2015USD ($) | Jan. 20, 2015USD ($) | Jan. 15, 2015investor |
Debt Instrument [Line Items] | |||||||
Promissory note converted | $ 807,000 | $ 1,012,000 | |||||
Additional Note Private Placement | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, number of additional accredited investors | investor | 7 | ||||||
Convertible Promissory Note | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, face amount | $ 750,000 | $ 750,000 | |||||
Debt instrument, interest rate, stated percentage | 6.00% | 6.00% | |||||
Promissory note converted | $ 200,000 | ||||||
Debt conversion, shares issued | shares | 502,786 | ||||||
Debt outstanding | $ 600,000 | ||||||
Convertible Promissory Note | Additional Note Private Placement | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, face amount | $ 925,000 | ||||||
Debt instrument, interest rate, stated percentage | 6.00% | ||||||
Promissory note converted | $ 400,000 | ||||||
Debt conversion, shares issued | shares | 281,023 | ||||||
Debt outstanding | $ 638,016 | ||||||
Convertible Promissory Note | Additional Note Private Placement | Subsequent Events | |||||||
Debt Instrument [Line Items] | |||||||
Debt outstanding | $ 139,876 | ||||||
Convertible Promissory Note | Agent Note | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, face amount | $ 46,250 | ||||||
Percentage of initial note | 5.00% | ||||||
Convertible Promissory Note | Agent Note | Subsequent Events | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, face amount | $ 446,250 | ||||||
Debt conversion, shares issued | shares | 416,135 | ||||||
Debt outstanding | $ 125,000 | ||||||
Convertible Promissory Note | Issuance Date | |||||||
Debt Instrument [Line Items] | |||||||
Percentage of debt that can be converted into shares of common stock | 50.00% | ||||||
Threshold consecutive trading days | 20 days | ||||||
Conversion price (in usd per share) | $ / shares | $ 2.20 | ||||||
Convertible Promissory Note | February 15, 2015 | |||||||
Debt Instrument [Line Items] | |||||||
Threshold consecutive trading days | 15 days | ||||||
Conversion price, percentage of average closing price of common stock on the market | 85.00% |
DEBT (Maturities) (Details)
DEBT (Maturities) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Debt Disclosure [Abstract] | ||
2,017 | $ 7,814 | |
Total debt | $ 7,814 | $ 7,596 |
CAPITAL LEASES (Details)
CAPITAL LEASES (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Capital Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ||
2,017 | $ 1 | |
Total minimum lease payments | 1 | |
Less: Amount representing interest | 0 | |
Present value of net minimum lease payments | 1 | |
Depreciation expense | 100 | $ 200 |
Equipment | ||
Capital Leased Assets [Line Items] | ||
Equipment | 828 | 828 |
Less: Accumulated amortization | (796) | (725) |
Total | 32 | 103 |
Capital Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ||
Depreciation expense | $ 100 | $ 100 |
COMMITMENTS AND CONTINGENCIES52
COMMITMENTS AND CONTINGENCIES (Narratives) (Details) - USD ($) $ in Thousands | Mar. 06, 2017 | Feb. 21, 2017 | Feb. 06, 2017 | Dec. 19, 2016 | Nov. 30, 2016 | Oct. 27, 2016 | Sep. 13, 2016 | Jun. 23, 2016 | Feb. 25, 2016 | Dec. 31, 2016 | Dec. 31, 2015 |
Loss Contingencies [Line Items] | |||||||||||
Delinquent accounts payable | $ 600 | ||||||||||
Accrued straight line rent expense | 200 | ||||||||||
UNMC | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Loss contingency, claim amount | $ 700 | ||||||||||
Loss contingency accrual | 400 | $ 700 | |||||||||
UNMC | Subsequent Events | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Loss contingencies, settlement amount | $ 400 | ||||||||||
Mount Sinai | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Loss contingency, claim amount | $ 700 | ||||||||||
Loss contingency accrual | 700 | ||||||||||
Loss contingencies, settlement amount | $ 700 | ||||||||||
Smith | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Loss contingency, claim amount | $ 2,200 | ||||||||||
XIFIN, Inc. | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Loss contingency accrual | 210 | ||||||||||
XIFIN, Inc. | Subsequent Events | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Loss contingency, claim amount | $ 270 | ||||||||||
Science Park Development Corporation | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Loss contingency, claim amount | $ 400 | ||||||||||
Science Park Development Corporation | Subsequent Events | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Loss contingencies, settlement amount | $ 400 | ||||||||||
CPA Global | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Loss contingency accrual | 200 | ||||||||||
CPA Global | Subsequent Events | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Loss contingency, claim amount | $ 200 | ||||||||||
Edge BioSystems, Inc. | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Loss contingency, claim amount | $ 100 | ||||||||||
Loss contingency accrual | $ 100 |
COMMITMENTS AND CONTINGENCIES53
COMMITMENTS AND CONTINGENCIES (Future Minimum Lease) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ||
2,017 | $ 226 | |
2,018 | 230 | |
2,019 | 235 | |
2,020 | 239 | |
2,021 | 244 | |
thereafter | 144 | |
Total | 1,318 | |
Operating leases, rent expense | 200 | $ 200 |
Firm commitments to vendors | $ 100 |
INCOME TAXES (Effective Income
INCOME TAXES (Effective Income Tax Reconciliation) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||
Benefit at federal rate | $ (2,812) | $ (3,449) |
State income taxes—net of federal benefit | (301) | (320) |
Miscellaneous permanent differences | 6 | 163 |
Liability warrants | (268) | 70 |
Capitalized transaction cost | 244 | 0 |
State, net operating loss expiration/true-up | 25 | (187) |
Other—net | 0 | (119) |
Valuation allowance | 3,106 | 3,842 |
Total income tax expense (benefit) | $ 0 | $ 0 |
INCOME TAXES (Components of Inc
INCOME TAXES (Components of Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Federal: | ||
Current | $ 0 | $ 0 |
Deferred | 0 | 0 |
Total Federal | 0 | 0 |
State: | ||
Current | 0 | 0 |
Deferred | 0 | 0 |
Total State | 0 | 0 |
Foreign: | ||
Current | 0 | 0 |
Deferred | 0 | 0 |
Total Foreign | 0 | 0 |
Total income tax expense (benefit) | $ 0 | $ 0 |
INCOME TAXES (Deferred Tax Asse
INCOME TAXES (Deferred Tax Assets and Liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred Tax Asset: | ||
Net operating loss carryforward | $ 60,276 | $ 51,449 |
Research and development credit carryforwards | 918 | 918 |
Other | 116 | 585 |
Deferred Tax Assets, Gross | 61,310 | 52,952 |
Less valuation allowance | (61,310) | (52,902) |
Deferred Tax Asset | 0 | 50 |
Deferred Tax Liability: | ||
Property and equipment | 0 | 50 |
Deferred Tax Liability | 0 | 50 |
Net Deferred Asset (Liability) | $ 0 | $ 0 |
INCOME TAXES (Summary of Operat
INCOME TAXES (Summary of Operating Loss Carryforwards) (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Income Tax Disclosure [Abstract] | |
2,018 | $ 1,838 |
2,019 | 8,181 |
2,020 | 9,662 |
2,021 | 8,228 |
2,022 | 16,862 |
2,023 | 16,173 |
2,024 | 17,390 |
2,025 | 8,153 |
2,026 | 6,792 |
2,027 | 3,238 |
2,028 | 1,272 |
2,029 | 591 |
2,030 | 2,784 |
2,031 | 8,358 |
2,032 | 12,097 |
2,033 | 7,591 |
2,034 | 15,147 |
2,035 | 23,499 |
Operating loss carryforwards | $ 167,856 |
INCOME TAXES (Narrative) (Detai
INCOME TAXES (Narrative) (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Income Taxes [Line Items] | |
Operating loss carryforwards | $ 167,856 |
Research and Development Credit Carryforward | |
Income Taxes [Line Items] | |
Tax credit carryforward | 900 |
Federal | Annovis, Inc. | |
Income Taxes [Line Items] | |
Operating loss carryforwards | 1,200 |
State | |
Income Taxes [Line Items] | |
Operating loss carryforwards | $ 62,000 |
EMPLOYEE BENEFIT PLAN (Details)
EMPLOYEE BENEFIT PLAN (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Compensation and Retirement Disclosure [Abstract] | ||
Defined contribution plan, employer matching contribution, percent, first 3% of contributions | 100.00% | |
Defined contribution plan, employer matching contribution, percent of employee's gross pay, first contributions | 3.00% | |
Defined contribution plan, employer matching contribution, percent, next 2% of contributions | 50.00% | |
Defined contribution plan, employer matching contribution, percent of employee's gross pay, next contributions | 2.00% | |
Defined contribution plan, cost recognized | $ 0.1 | $ 0.4 |
STOCKHOLDERS' EQUITY (Common St
STOCKHOLDERS' EQUITY (Common Stock) (Details) | Jun. 14, 2016USD ($)shares | May 31, 2016shares | Jan. 08, 2016USD ($)$ / sharesshares | Jul. 07, 2015USD ($)$ / sharesshares | Feb. 27, 2015USD ($)$ / shares$ / unitshares | Oct. 22, 2014USD ($)$ / sharesshares | Jan. 24, 2013USD ($)$ / sharesshares | Feb. 02, 2012USD ($)$ / sharesshares | Dec. 29, 2010USD ($)$ / sharesshares | May 31, 2016shares | Jan. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2011USD ($) | Dec. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2015USD ($)$ / sharesshares | Jun. 07, 2016shares | Jan. 06, 2016$ / shares | Jun. 30, 2015$ / sharesshares | Jan. 20, 2015USD ($) | Jan. 15, 2015USD ($)$ / sharesshares | Dec. 31, 2014USD ($)$ / sharesshares | Oct. 21, 2014$ / sharesshares | Mar. 05, 2014$ / sharesshares | Jan. 31, 2013$ / sharesshares |
Class of Stock [Line Items] | |||||||||||||||||||||||
Common stock, shares authorized | 150,000,000 | 150,000,000 | |||||||||||||||||||||
Proceeds from issuance of common stock and convertible notes | $ | $ 6,000,000 | ||||||||||||||||||||||
Common stock, shares issued | 26,446,927 | 13,915,691 | |||||||||||||||||||||
Common stock warrants term | 5 years | ||||||||||||||||||||||
Common stock warrant, common stock called (in shares) | 2,188,177 | 1,881,396 | 1,309,785 | 691,656 | 948,333 | 1,387,685 | 1,387,685 | 1,881,396 | 1,483,161 | 1,309,785 | 1,212,665 | 1,097,600 | |||||||||||
Initial valuation of warrant issued in conjunction with Private Placement | $ | $ 1,827,000 | $ 0 | |||||||||||||||||||||
Common stock warrant, exercise price (in usd per share) | $ / shares | $ 6.50 | $ 7.56 | $ 10.86 | $ 15 | $ 10.25 | $ 10.25 | $ 7.56 | $ 9.59 | $ 10.86 | $ 11.73 | $ 12.96 | ||||||||||||
Stock issuance costs | $ | $ 1,330,000 | $ 219,000 | |||||||||||||||||||||
Payments of stock issuance costs, percentage of gross offering proceeds | 7.00% | ||||||||||||||||||||||
Payments of stock issuance costs, warrant right to purchase common stock shares | 31,666 | ||||||||||||||||||||||
Payments of stock issuance costs, warrant right to purchase common stock shares, percentage of shares in offering | 2.00% | ||||||||||||||||||||||
Stock issuance costs, reimbursable expenses | $ | $ 125,000 | ||||||||||||||||||||||
Payments of stock issuance costs, reduction to equity | $ | $ 1,500,000 | ||||||||||||||||||||||
Private placement, net, shares | 1,500,000 | 1,383,333 | |||||||||||||||||||||
Share price (in usd per share) | $ / shares | $ 1.42 | $ 6 | |||||||||||||||||||||
Issuance of shares | $ | $ 8,300,000 | 506,000 | |||||||||||||||||||||
Shares converted (value) | $ | $ 199,000 | $ 0 | |||||||||||||||||||||
Class of warrant or right, number of securities called by warrants or rights, price per share (in usd per share) | $ / shares | $ 9 | ||||||||||||||||||||||
Proceeds from issuance of common stock and warrants | $ | $ 3,000,000 | ||||||||||||||||||||||
Preferred stock, shares outstanding | 214,705 | 4,029,502 | |||||||||||||||||||||
Shares issued for services (value) | $ | $ 89,000 | $ 89,000 | $ 0 | ||||||||||||||||||||
Issuance of common stock and related warrants, net | $ | $ 475,000 | $ 8,977,000 | |||||||||||||||||||||
Craig-Hallum Capital Group LLC | |||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||
Common stock, sale price per share (in usd per share) | $ / shares | $ 1.21 | ||||||||||||||||||||||
Common stock warrants term | 5 years | 5 years | |||||||||||||||||||||
Common stock warrant, exercise price (in usd per share) | $ / shares | $ 1.66 | $ 4.39 | |||||||||||||||||||||
Prviate placement share issued | 3,239,827 | ||||||||||||||||||||||
Stock issuance costs | $ | $ 212,783 | $ 140,000 | |||||||||||||||||||||
Payments of stock issuance costs, percentage of gross offering proceeds | 7.00% | 7.00% | |||||||||||||||||||||
Payments of stock issuance costs, warrant right to purchase common stock shares | 107,033 | 107,527 | |||||||||||||||||||||
Stock issuance costs, reimbursable expenses | $ | $ 50,000 | $ 50,000 | |||||||||||||||||||||
Share price (in usd per share) | $ / shares | $ 50 | ||||||||||||||||||||||
Craig-Hallum Capital Group LLC | Previously Reported | |||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||
Prviate placement share issued | 2,188,177 | ||||||||||||||||||||||
Vendor | |||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||
Shares issued for services (shares) | 78,000 | ||||||||||||||||||||||
Vendor II | |||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||
Shares issued for services (shares) | 64,153 | ||||||||||||||||||||||
Series A Preferred Stock | |||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||
Common stock warrant, exercise price (in usd per share) | $ / shares | $ 2.32 | $ 1 | |||||||||||||||||||||
Convertible notes, common stock callable (in shares) | 1,293,102 | ||||||||||||||||||||||
Stock issuance costs | $ | $ 200,000 | ||||||||||||||||||||||
Common Stock | |||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||
Common stock warrant, common stock called (in shares) | 2,280,517 | ||||||||||||||||||||||
Common Stock | Craig-Hallum Capital Group LLC | |||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||
Share price (in usd per share) | $ / shares | $ 1 | ||||||||||||||||||||||
Series A Warrants | |||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||
Common stock warrants term | 5 years 6 months | ||||||||||||||||||||||
Series B Warrants | |||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||
Common stock warrants term | 5 years 6 months | ||||||||||||||||||||||
Common stock warrant, exercise price (in usd per share) | $ / shares | $ 0.01 | ||||||||||||||||||||||
Share price (in usd per share) | $ / shares | 1.42 | ||||||||||||||||||||||
Series A and Series B Warrants | |||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||
Common stock warrant, exercise price (in usd per share) | $ / shares | $ 1.66 | ||||||||||||||||||||||
2016 Warrant | |||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||
Common stock warrants term | 5 years | ||||||||||||||||||||||
Common stock warrant, exercise price (in usd per share) | $ / shares | $ 1.21 | ||||||||||||||||||||||
Common stock exchange price (in usd per share) | $ / shares | $ 0.50 | ||||||||||||||||||||||
Shares converted (shares) | 1,006,419 | ||||||||||||||||||||||
Stock Warrant exchange amount | $ | $ 1,400,000 | ||||||||||||||||||||||
2016 Warrant | Common Stock | |||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||
Common stock warrant, common stock called (in shares) | 2,873,765 | ||||||||||||||||||||||
Common stock warrant, exercise price (in usd per share) | $ / shares | $ 0.25 | ||||||||||||||||||||||
Cash payment portion of stock warrants exercised | $ | $ 718,441 | ||||||||||||||||||||||
Shares converted (shares) | 1,613,353 | ||||||||||||||||||||||
Stock warrants settled with cash | $ | $ 500,000 | ||||||||||||||||||||||
ATM Agreement | Craig-Hallum Capital Group LLC | |||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||
Common stock, shares authorized | 3,500,000 | ||||||||||||||||||||||
Common stock, shares issued | 1,177,849 | ||||||||||||||||||||||
Common stock, sale price per share (in usd per share) | $ / shares | $ 0.42 | ||||||||||||||||||||||
Common stock warrant, exercise price (in usd per share) | $ / shares | $ 4.23 | ||||||||||||||||||||||
Prviate placement share issued | 3,362,276 | ||||||||||||||||||||||
Placement fees, percentage of gross sales price | 3.25% | ||||||||||||||||||||||
Issuance of common stock and related warrants, net | $ | $ 500,000 | ||||||||||||||||||||||
ATM Agreement | Craig-Hallum Capital Group LLC | Previously Reported | |||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||
Prviate placement share issued | 3,239,827 | ||||||||||||||||||||||
Convertible Promissory Note | |||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||
Debt instrument, face amount | $ | $ 750,000 | $ 750,000 | |||||||||||||||||||||
Maximum | |||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||
Common stock warrant, common stock called (in shares) | 823,333 | ||||||||||||||||||||||
Maximum | Series B Warrants | |||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||
Common stock warrant, common stock called (in shares) | 700,000 | ||||||||||||||||||||||
Maximum | Series A and Series B Warrants | |||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||
Common stock warrant, common stock called (in shares) | 1,200,000 | ||||||||||||||||||||||
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 usd per share) | $ / shares | $ 12.96 | $ 11.73 | |||||||||||||||||||||
Convertible notes, warrants callable (in shares) | 125,000 | ||||||||||||||||||||||
Affiliates of Third Security, LLC; January 2018 | |||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||
Common stock warrant, common stock called (in shares) | 250,000 | ||||||||||||||||||||||
Common stock warrant, exercise price (in usd per share) | $ / shares | $ 9 | ||||||||||||||||||||||
Private placement, net, shares | 500,000 | ||||||||||||||||||||||
Security Purchase Agreement | |||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||
Issuance of shares | $ | $ 2,200,000 | ||||||||||||||||||||||
Net proceeds from the offering | $ | 2,000,000 | ||||||||||||||||||||||
Security Purchase Agreement | Series A Preferred Stock | |||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||
Dividends | $ | $ 400,000 | ||||||||||||||||||||||
Private placement, net, shares | 2,365,243 | ||||||||||||||||||||||
Number of shares that can be purchased for each warrant | 1.075269 | ||||||||||||||||||||||
Shares converted (shares) | 2,150,538 | ||||||||||||||||||||||
Preferred stock, shares outstanding | 214,705 | ||||||||||||||||||||||
Security Purchase Agreement | Common Stock | |||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||
Common stock warrant, common stock called (in shares) | 1,773,929 | ||||||||||||||||||||||
Common stock warrant, exercise price (in usd per share) | $ / shares | $ 0.93 | ||||||||||||||||||||||
Number of shares that can be purchased for each warrant | 0.93 | ||||||||||||||||||||||
Shares converted (shares) | 2,150,538 | ||||||||||||||||||||||
Security Purchase Agreement | Series A Warrants | |||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||
Common stock warrant, common stock called (in shares) | 1,161,972 | 1,161,972 | |||||||||||||||||||||
Common stock exchange price (in usd per share) | $ / shares | $ 0.50 | ||||||||||||||||||||||
Stock Warrant exchange amount | $ | $ 941,197 | ||||||||||||||||||||||
Security Purchase Agreement | Series A Warrants | Common Stock | |||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||
Common stock warrant, common stock called (in shares) | 1,882,395 | ||||||||||||||||||||||
Common stock warrant, exercise price (in usd per share) | $ / shares | $ 0.25 | ||||||||||||||||||||||
Cash payment portion of stock warrants exercised | $ | $ 470,599 | ||||||||||||||||||||||
Security Purchase Agreement | Maximum | Series A Warrants | |||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||
Common stock warrant, common stock called (in shares) | 1,882,395 | ||||||||||||||||||||||
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 | 1,583,333 | ||||||||||||||||||||||
Common stock, sale price per share (in usd per share) | $ / shares | $ 12 | ||||||||||||||||||||||
Common stock warrants term | 5 years | ||||||||||||||||||||||
Common stock warrant, common stock called (in shares) | 365,388 | ||||||||||||||||||||||
Common stock warrant, exercise price (in usd per share) | $ / shares | $ 4 | ||||||||||||||||||||||
Private placement, net, shares | 730,776 | ||||||||||||||||||||||
Share price (in usd per share) | $ / shares | $ 3.25 | ||||||||||||||||||||||
Issuance of shares | $ | $ 2,375,000 | ||||||||||||||||||||||
Private Placement | Advisor | |||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||
Common stock warrant, common stock called (in shares) | 9,230 | ||||||||||||||||||||||
Private Placement | Third Security LLC And Affiliates | |||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||
Convertible notes, common stock callable (in shares) | 250,000 | ||||||||||||||||||||||
Additional Note Private Placement | Convertible Promissory Note | |||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||
Debt instrument, face amount | $ | $ 925,000 | ||||||||||||||||||||||
Additional Note Private Placement | Convertible Promissory Note | Craig-Hallum Capital Group LLC | |||||||||||||||||||||||
Class of Stock [Line Items] | |||||||||||||||||||||||
Debt instrument, face amount | $ | $ 46,250 | ||||||||||||||||||||||
Percentage of proceeds from sale and issuance of the Additional Notes | 5.00% | ||||||||||||||||||||||
Two Thousand Fifteen 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 usd per share) | $ / shares | $ 2.24 | ||||||||||||||||||||||
Private placement, net, shares | 3,573,899 | ||||||||||||||||||||||
Number of shares that can be purchased for each warrant | 0.20 | ||||||||||||||||||||||
Purchase price to the public (in usd per unit) | $ / unit | 1.95 | ||||||||||||||||||||||
Purchase price of stock and warrants (in usd per unit) | $ / unit | 1.8135 | ||||||||||||||||||||||
Net proceeds from the offering | $ | $ 6,200,000 |
STOCKHOLDERS' EQUITY (Common 61
STOCKHOLDERS' EQUITY (Common Stock Warrants) (Details) - $ / shares | 12 Months Ended | |||||||||||
Dec. 31, 2016 | Dec. 31, 2015 | Jul. 07, 2015 | Jun. 30, 2015 | Feb. 27, 2015 | Jan. 15, 2015 | Dec. 31, 2014 | Oct. 22, 2014 | Oct. 21, 2014 | Jan. 31, 2013 | Jan. 24, 2013 | Feb. 02, 2012 | |
Class of Stock [Line Items] | ||||||||||||
Common stock warrants issued (in shares) | 3,055,555 | 3,466,841 | ||||||||||
Common stock warrant, common stock called (in shares) | 1,387,685 | 1,387,685 | 2,188,177 | 1,881,396 | 1,881,396 | 1,483,161 | 1,309,785 | 1,309,785 | 1,212,665 | 1,097,600 | 691,656 | 948,333 |
Warrants to purchase shares of common stock expired | 431,027 | |||||||||||
Underlying Shares | 6,696,287 | |||||||||||
Common stock warrant, exercise price (in usd per share) | $ 10.25 | $ 10.25 | $ 6.50 | $ 7.56 | $ 7.56 | $ 9.59 | $ 10.86 | $ 10.86 | $ 11.73 | $ 12.96 | $ 15 | |
Common Stock | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Common stock warrant, common stock called (in shares) | 2,280,517 | |||||||||||
Various Institutional Holders; February 2017 | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Underlying Shares | 2,919,043 | |||||||||||
Common stock warrant, exercise price (in usd per share) | $ 4.23 | |||||||||||
Affiliates of Third Security, LLC; February 2017 | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Underlying Shares | 443,233 | |||||||||||
Common stock warrant, exercise price (in usd per share) | $ 4.23 | |||||||||||
Various Institutional Holders; January 2018 | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Underlying Shares | 441,655 | |||||||||||
Common stock warrant, exercise price (in usd per share) | $ 9 | |||||||||||
Affiliates of Third Security, LLC; January 2018 | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Common stock warrant, common stock called (in shares) | 250,000 | |||||||||||
Underlying Shares | 250,000 | |||||||||||
Common stock warrant, exercise price (in usd per share) | $ 9 | |||||||||||
Various Institutional Holders; April 2020 | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Underlying Shares | 374,618 | |||||||||||
Common stock warrant, exercise price (in usd per share) | $ 4 | |||||||||||
Various Institutional Holders; February 2020 | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Underlying Shares | 714,780 | |||||||||||
Common stock warrant, exercise price (in usd per share) | $ 2.24 | |||||||||||
Various Institutional Holders; December 2020 | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Underlying Shares | 122,433 | |||||||||||
Common stock warrant, exercise price (in usd per share) | $ 1.66 | |||||||||||
Various Institutional Holders; January 2021 | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Underlying Shares | 1,161,972 | |||||||||||
Common stock warrant, exercise price (in usd per share) | $ 1.21 | |||||||||||
Affiliates of Third Security, LLC; January 2021 | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Underlying Shares | 161,026 | |||||||||||
Common stock warrant, exercise price (in usd per share) | $ 1.21 | |||||||||||
Various Institutional Holders; January 2021 | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Underlying Shares | 107,527 | |||||||||||
Common stock warrant, exercise price (in usd per share) | $ 1.21 | |||||||||||
Private Placement | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Common stock warrants issued (in shares) | 1,174,099 | 800,492 | ||||||||||
Common stock warrant, common stock called (in shares) | 365,388 | |||||||||||
Common stock warrant, exercise price (in usd per share) | $ 4 | |||||||||||
Offering | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Common stock warrants issued (in shares) | 1,881,456 | 2,666,349 |
STOCKHOLDERS' EQUITY (Preferred
STOCKHOLDERS' EQUITY (Preferred Stock Series A) (Details) | Jan. 06, 2016$ / shares | Jul. 07, 2015$ / sharesshares | Jan. 24, 2013shares | Feb. 02, 2012USD ($)$ / shares | Dec. 29, 2010USD ($)$ / sharesshares | Jan. 31, 2014 | Nov. 30, 2011USD ($) | Dec. 31, 2016USD ($)Director$ / sharesshares | Dec. 31, 2014$ / shares | Dec. 31, 2015$ / sharesshares | Jun. 30, 2015$ / shares | Feb. 27, 2015$ / shares | Jan. 15, 2015$ / shares | Oct. 22, 2014$ / shares | Oct. 21, 2014$ / shares | Jan. 31, 2013$ / shares |
Class of Stock [Line Items] | ||||||||||||||||
Preferred stock, shares authorized | 15,000,000 | 15,000,000 | ||||||||||||||
Private placement, net, shares | 1,500,000 | 1,383,333 | ||||||||||||||
Common stock warrant, exercise price (in usd per share) | $ / shares | $ 6.50 | $ 15 | $ 10.25 | $ 10.86 | $ 10.25 | $ 7.56 | $ 7.56 | $ 9.59 | $ 10.86 | $ 11.73 | $ 12.96 | |||||
Proceeds from issuance of common stock and convertible notes | $ | $ 6,000,000 | |||||||||||||||
Stock issuance costs | $ | $ 1,330,000 | $ 219,000 | ||||||||||||||
Minimum | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Number of directors | Director | 2 | |||||||||||||||
Common Stock | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Private placement, net, shares | 1,320,002 | |||||||||||||||
Preferred stock revaluation | $ | $ 300,000 | |||||||||||||||
Series A Preferred Stock | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Common stock warrant, exercise price (in usd per share) | $ / shares | $ 1 | $ 2.32 | ||||||||||||||
Convertible notes, common stock callable (in shares) | 1,293,102 | |||||||||||||||
Stock issuance costs | $ | $ 200,000 | |||||||||||||||
Series A Preferred Stock | Preferred Stock | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Preferred stock, shares authorized | 3,879,307 | |||||||||||||||
Private placement, net, shares | 2,586,205 | |||||||||||||||
Common stock warrant, exercise price (in usd per share) | $ / shares | $ 2.32 | |||||||||||||||
Conversion ratio | 333 | 0.3333 | 4 | |||||||||||||
Preferred stock, dividend rate, percentage | 10.00% | |||||||||||||||
Preferred stock, dividend rate, compound percentage maximum | 50.00% |
STOCKHOLDERS' EQUITY (Preferr63
STOCKHOLDERS' EQUITY (Preferred Stock Series B) (Details) $ / shares in Units, $ in Thousands | Jan. 06, 2016 | Jul. 07, 2015$ / sharesshares | Mar. 05, 2014USD ($)$ / sharesshares | Jan. 24, 2013USD ($)$ / sharesshares | Dec. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2015$ / sharesshares | Jun. 30, 2015$ / sharesshares | Feb. 27, 2015$ / sharesshares | Jan. 15, 2015$ / sharesshares | Dec. 31, 2014$ / sharesshares | Oct. 22, 2014$ / sharesshares | Oct. 21, 2014$ / sharesshares | Jan. 31, 2013$ / sharesshares | Feb. 02, 2012$ / sharesshares |
Class of Stock [Line Items] | ||||||||||||||
Private placement, net, shares | shares | 1,500,000 | 1,383,333 | ||||||||||||
Preferred stock, par value (in usd per share) | $ 0.01 | $ 0.01 | ||||||||||||
Share price (in usd per share) | $ 1.42 | $ 6 | ||||||||||||
Issuance of shares | $ | $ 8,300 | $ 506 | ||||||||||||
Common stock warrant, exercise price (in usd per share) | $ 6.50 | $ 10.25 | $ 10.25 | $ 7.56 | $ 7.56 | $ 9.59 | $ 10.86 | $ 10.86 | $ 11.73 | $ 12.96 | $ 15 | |||
Common stock warrant, common stock called (in shares) | shares | 2,188,177 | 691,656 | 1,387,685 | 1,387,685 | 1,881,396 | 1,881,396 | 1,483,161 | 1,309,785 | 1,309,785 | 1,212,665 | 1,097,600 | 948,333 | ||
Preferred Stock | Series B Preferred Stock | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Conversion ratio | 1 | |||||||||||||
Third Security LLC And Affiliates | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Common stock warrant, exercise price (in usd per share) | $ 11.73 | $ 12.96 | ||||||||||||
Common stock warrant, common stock called (in shares) | shares | 1,212,665 | 1,097,600 | ||||||||||||
Third Security LLC And Affiliates | Preferred Stock | Series B Preferred Stock | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Private placement, net, shares | shares | 1,443,297 | |||||||||||||
Preferred stock, par value (in usd per share) | $ 0.01 | |||||||||||||
Share price (in usd per share) | $ 4.85 | |||||||||||||
Issuance of shares | $ | $ 7,000 | |||||||||||||
Conversion ratio | 1 |
STOCKHOLDERS' EQUITY (Conversio
STOCKHOLDERS' EQUITY (Conversion of Preferred Stock) (Details) $ / shares in Units, $ in Millions | Jan. 06, 2016USD ($)$ / sharesshares | Jan. 31, 2014 | Dec. 31, 2014$ / shares | Dec. 31, 2016$ / sharesshares | Dec. 31, 2015$ / shares | Jul. 07, 2015$ / shares | Jun. 30, 2015$ / shares | Feb. 27, 2015$ / shares | Jan. 15, 2015$ / shares | Oct. 22, 2014$ / shares | Oct. 21, 2014$ / shares | Jan. 31, 2013$ / shares | Feb. 02, 2012$ / shares | Dec. 29, 2010$ / shares |
Class of Stock [Line Items] | ||||||||||||||
Preferred stock, par value (in usd per share) | $ / shares | $ 0.01 | $ 0.01 | ||||||||||||
Common stock warrant, exercise price (in usd per share) | $ / shares | $ 10.86 | $ 10.25 | $ 10.25 | $ 6.50 | $ 7.56 | $ 7.56 | $ 9.59 | $ 10.86 | $ 11.73 | $ 12.96 | $ 15 | |||
Series A Preferred Stock | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Preferred stock, par value (in usd per share) | $ / shares | $ 0.01 | |||||||||||||
Common stock warrant, exercise price (in usd per share) | $ / shares | $ 1 | $ 2.32 | ||||||||||||
Preferred Stock | Series A Preferred Stock | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Common stock warrant, exercise price (in usd per share) | $ / shares | $ 2.32 | |||||||||||||
Shares converted (shares) | 2,586,205 | |||||||||||||
Conversion ratio | 333 | 0.3333 | 4 | |||||||||||
Accrued preferred stock dividend | $ | $ 3.7 | |||||||||||||
Preferred Stock | Series B Preferred Stock | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Shares converted (shares) | 1,443,297 | |||||||||||||
Conversion ratio | 1 | |||||||||||||
Accrued preferred stock dividend | $ | $ 0.8 | |||||||||||||
Common Stock | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Shares converted (shares) | 2,305,354 | |||||||||||||
Common Stock | Series A Preferred Stock | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Shares converted (shares) | 862,057 | |||||||||||||
Stock Dividends, Shares | 793,235 | |||||||||||||
Shares, issued (shares) | 6,780,179 | |||||||||||||
Common Stock | Series B Preferred Stock | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Shares converted (shares) | 1,443,297 | |||||||||||||
Stock Dividends, Shares | 3,681,590 | |||||||||||||
Shares, issued (shares) | 4,474,825 |
STOCKHOLDERS' EQUITY (Preferr65
STOCKHOLDERS' EQUITY (Preferred Stock Dividends) (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Preferred Stock | ||
Class of Stock [Line Items] | ||
Cumulative undeclared dividends | $ 0 | $ 4,400,000 |
EQUITY INCENTIVE PLAN (Narrativ
EQUITY INCENTIVE PLAN (Narrative) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation, unrecognized compensation expense related to unvested stock options | $ 100,000 | |
Share-based compensation, weighted average period that unrecognized compensation expense related to unvested stock options is recognized | 1 year 1 day | |
Number of outstanding options vested or expected to vest (in shares) | 720,128 | |
Selling, general and administrative expenses | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | $ 100,000 | $ 600,000 |
Stock Appreciation Rights (SARs) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock options, fair value assumptions, dividend yield | 0.00% | |
Outstanding SARs (in shares) | 83,333 | 98,333 |
Weighted average exercise price of SARs (in usd per share) | $ 4.32 | $ 4.14 |
Intrinsic value | $ 0 | |
Weighted average remaining contractual terms | 6 years 8 months | |
Number of shares exercisable | 83,333 | |
Exercises in period (in shares) | 0 | 0 |
Stock Appreciation Rights (SARs) | Accrued expenses | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | $ 100,000 | |
Decrease in share based compensation expense | $ 100,000 | |
Stock Appreciation Rights (SARs) | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock options, fair value assumptions, risk free interest rate | 1.13% | |
Stock options, fair value assumptions, historical volatility rate | 85.00% | |
Stock Appreciation Rights (SARs) | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock options, fair value assumptions, risk free interest rate | 1.92% | |
Stock options, fair value assumptions, expected life | 6 years | |
Stock options, fair value assumptions, historical volatility rate | 86.00% | |
Stock Options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock options, fair value assumptions, dividend yield | 0.00% | |
Stock options, grants in period, weighted average grant date fair value | $ 0.60 | $ 0.96 |
Weighted average exercise price (in usd per share) | $ 3.55 | |
Stock options, outstanding, aggregate intrinsic value | $ 0 | |
Remaining weighted average contractual life | 7 years 6 months 1 day | |
Options exercisable (in shares) | 537,091 | |
Options exercisable, weighted average exercise price (in usd per share) | $ 4.26 | |
Stock options, exercisable, aggregate intrinsic value | $ 0 | |
Stock options, remaining weighted-average contractual life | 7 years 2 months | |
Stock options, exercised (in shares) | 0 | 0 |
Stock options vested in current year, fair value | $ 600,000 | $ 800,000 |
Stock Options | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock options, fair value assumptions, risk free interest rate | 1.32% | |
Stock options, fair value assumptions, expected life | 4 years | |
Stock options, fair value assumptions, historical volatility rate | 83.00% | |
Stock Options | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock options, fair value assumptions, risk free interest rate | 1.91% | |
Stock options, fair value assumptions, expected life | 6 years | |
Stock options, fair value assumptions, historical volatility rate | 86.00% | |
Equity incentive plan 2006 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation, number of shares authorized | 1,666,666 | |
Share-based compensation, award expiration period | 10 years | |
Equity incentive plan 2006 | Restricted Stock, Restricted Stock Units, Performance Units, Performance Shares And Other Awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation, number of shares authorized | 1,250,000 |
EQUITY INCENTIVE PLAN (Stock Op
EQUITY INCENTIVE PLAN (Stock Option Activity) (Details) - Stock Options | 12 Months Ended |
Dec. 31, 2016$ / sharesshares | |
Number of Options | |
Balance at beginning of period (in shares) | shares | 1,107,794 |
Granted (in shares) | shares | 25,250 |
Forfeited (in shares) | shares | (395,018) |
Expired (in shares) | shares | 0 |
Balance at end of period (in shares) | shares | 738,026 |
Exercisable at end of period (in shares) | shares | 537,091 |
Weighted Average Exercise Price | |
Balance at beginning of period (in usd per share) | $ / shares | $ 3.45 |
Granted (in usd per share) | $ / shares | 0.84 |
Forfeited (in usd per share) | $ / shares | 2.91 |
Expired (in usd per share) | $ / shares | 0 |
Balance at end of period (in usd per share) | $ / shares | 3.59 |
Exercisable at end of period (in usd per share) | $ / shares | $ 4.26 |
EQUITY INCENTIVE PLAN (Stock Ap
EQUITY INCENTIVE PLAN (Stock Appreciation Rights) (Details) - Stock Appreciation Rights (SARs) | 12 Months Ended |
Dec. 31, 2016$ / sharesshares | |
Number of SARs | |
Balance at beginning of period (in shares) | shares | 98,333 |
Granted (in shares) | shares | 0 |
Forfeited (in shares) | shares | (15,000) |
Expired (in shares) | shares | 0 |
Balance at end of period (in shares) | shares | 83,333 |
Exercisable at end of period (in shares) | shares | 83,333 |
Weighted Average Exercise Price | |
Balance at beginning of period (in usd per share) | $ / shares | $ 4.14 |
Granted (in usd per share) | $ / shares | 0 |
Forfeited (in usd per share) | $ / shares | 3.15 |
Expired (in usd per share) | $ / shares | 0 |
Balance at end of period (in usd per share) | $ / shares | 4.32 |
Exercisable at end of period (in usd per share) | $ / shares | $ 4.32 |
FAIR VALUE Narratives (Details)
FAIR VALUE Narratives (Details) | 1 Months Ended | 12 Months Ended | |||
Jan. 31, 2016shares | Dec. 31, 2016simulation$ / sharesshares | Dec. 31, 2015shares | Jul. 07, 2015$ / shares | Jan. 24, 2013$ / shares | |
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 usd per share) | $ / shares | $ 1.42 | $ 6 | |||
Percentage of simulated equity values below the down-round financing cut-off point | 25.00% | ||||
Number of independent simulations | simulation | 10 | ||||
Simulation period | 6 months | ||||
Underlying Shares | 6,696,287 | ||||
2012 Warrant Liability | |||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||||
Common stock warrants issued (in shares) | 3,400,000 | ||||
Share price (in usd per share) | $ / shares | $ 0.28 | ||||
Stock options, fair value assumptions, expected life | 1 month 7 days | ||||
Volatility | 67.00% | ||||
Risk-free interest rate | 0.44% | ||||
Term of U.S. treasury bond | 1 year | ||||
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 usd per share) | $ / shares | $ 0.28 | ||||
Risk-free interest rate | 1.70% | ||||
Underlying Shares | 800,000 | ||||
Volatility Rate | 91.00% |
FAIR VALUE Derivative Liability
FAIR VALUE Derivative Liability Fair Value (Details) - Level 3 $ in Thousands | 12 Months Ended |
Dec. 31, 2016USD ($) | |
2012 Warrant Liability | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | |
Balance at January 1, 2016 | $ 350 |
Recognized in earnings | (350) |
Balance at December 31, 2016 | 0 |
2016 Warrant Liability | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | |
Balance at January 1, 2016 | 0 |
Additions | 1,827 |
Deductions from warrant conversions | (807) |
Recognized in earnings | (438) |
Balance at December 31, 2016 | $ 582 |
OPERATING SEGMENT AND GEOGRAP71
OPERATING SEGMENT AND GEOGRAPHIC INFORMATION (Details) - operating_segments | 9 Months Ended | 12 Months Ended |
Sep. 29, 2015 | Dec. 31, 2016 | |
Segment Reporting [Abstract] | ||
Number of operating segments | 2 | 1 |
SUBSEQUENT EVENTS (Amendments t
SUBSEQUENT EVENTS (Amendments to Merger) (Details) - Subsequent Events | Feb. 02, 2017USD ($) |
Precipio | |
Subsequent Event [Line Items] | |
Common stock ownership percentage of shares outstanding | 80.00% |
Precipio | |
Subsequent Event [Line Items] | |
Long term-line of credit maximum borrowing capacity | $ 250,000 |
SUBSEQUENT EVENTS (Conversion o
SUBSEQUENT EVENTS (Conversion of Unsecured Convertible Promissory Notes) (Details) | Jan. 17, 2017USD ($)$ / shares | Jan. 13, 2017USD ($)shares | Mar. 31, 2016USD ($) | Dec. 31, 2016USD ($)shares | Dec. 31, 2015USD ($) | Jan. 20, 2015USD ($) | Jan. 15, 2015investor | Dec. 31, 2014USD ($) |
Subsequent Event [Line Items] | ||||||||
Warrants and note payable converted to equity | $ 807,000 | $ 1,012,000 | ||||||
Shares converted (value) | 199,000 | $ 0 | ||||||
Convertible Promissory Note | ||||||||
Subsequent Event [Line Items] | ||||||||
Debt instrument, face amount | $ 750,000 | $ 750,000 | ||||||
Debt instrument, interest rate, stated percentage | 6.00% | 6.00% | ||||||
Warrants and note payable converted to equity | $ 200,000 | |||||||
Debt conversion, shares issued | shares | 502,786 | |||||||
Debt outstanding | $ 600,000 | |||||||
Additional Note Private Placement | ||||||||
Subsequent Event [Line Items] | ||||||||
Debt instrument, number of additional accredited investors | investor | 7 | |||||||
Additional Note Private Placement | Convertible Promissory Note | ||||||||
Subsequent Event [Line Items] | ||||||||
Debt instrument, face amount | $ 925,000 | |||||||
Debt instrument, interest rate, stated percentage | 6.00% | |||||||
Warrants and note payable converted to equity | $ 400,000 | |||||||
Debt conversion, shares issued | shares | 281,023 | |||||||
Debt outstanding | $ 638,016 | |||||||
Debt instrument, principal amount | 571,250 | |||||||
Accrued interest | $ 66,766 | |||||||
Additional Note Private Placement | Convertible Promissory Note | Subsequent Events | ||||||||
Subsequent Event [Line Items] | ||||||||
Debt outstanding | $ 139,876 | |||||||
Debt instrument, principal amount | 125,000 | |||||||
Accrued interest | 14,876 | |||||||
Additional Note Private Placement | Convertible Promissory Note | Subsequent Events | Minimum | ||||||||
Subsequent Event [Line Items] | ||||||||
Conversion of stock, (usd per share) | $ / shares | $ 0.25 | |||||||
Additional Note Private Placement | Convertible Promissory Note | Common Stock | ||||||||
Subsequent Event [Line Items] | ||||||||
Debt conversion, shares issued | shares | 281,023 | |||||||
Additional Note Private Placement | Convertible Promissory Note | Common Stock | Subsequent Events | ||||||||
Subsequent Event [Line Items] | ||||||||
Shares converted (value) | $ 499,359 | |||||||
Shares converted (shares) | shares | 416,133 | |||||||
Value of stock warrant | $ 6,250 | |||||||
Agent Note | Convertible Promissory Note | ||||||||
Subsequent Event [Line Items] | ||||||||
Debt instrument, face amount | $ 46,250 | |||||||
Percentage of initial note | 5.00% | |||||||
Agent Note | Convertible Promissory Note | Subsequent Events | ||||||||
Subsequent Event [Line Items] | ||||||||
Debt instrument, face amount | $ 446,250 | |||||||
Debt conversion, shares issued | shares | 416,135 | |||||||
Debt outstanding | $ 125,000 |
SUBSEQUENT EVENTS (Amendment to
SUBSEQUENT EVENTS (Amendment to Loan and Security Agreement) (Details) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Jul. 07, 2015 | Jan. 24, 2013 | |
Subsequent Event [Line Items] | ||||
Share price (in usd per share) | $ 1.42 | $ 6 | ||
Promissory note converted | $ 807 | $ 1,012 | ||
Precipio | ||||
Subsequent Event [Line Items] | ||||
Share price (in usd per share) | $ 0.50 | |||
Promissory note converted | $ 7,200 | |||
Promissory noted converted, interest rate | $ 600 | |||
Precipio | Common Stock | ||||
Subsequent Event [Line Items] | ||||
Debt conversion, shares issued | 10.4 | |||
Precipio | Preferred Stock | ||||
Subsequent Event [Line Items] | ||||
Debt conversion, shares issued | 24.1 |
SUBSEQUENT EVENTS (Legal Procee
SUBSEQUENT EVENTS (Legal Proceedings) (Details) - USD ($) $ in Thousands | Mar. 06, 2017 | Feb. 21, 2017 | Feb. 06, 2017 | Dec. 19, 2016 | Nov. 30, 2016 | Oct. 27, 2016 | Sep. 13, 2016 | Jun. 23, 2016 | Feb. 25, 2016 | Dec. 31, 2016 | Dec. 31, 2015 |
Subsequent Event [Line Items] | |||||||||||
Delinquent accounts payable | $ 600 | ||||||||||
UNMC | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Loss contingency, claim amount | $ 700 | ||||||||||
Loss contingency accrual | 400 | $ 700 | |||||||||
UNMC | Subsequent Events | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Loss contingencies, settlement amount | $ 400 | ||||||||||
Mount Sinai | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Loss contingency, claim amount | $ 700 | ||||||||||
Loss contingencies, settlement amount | $ 700 | ||||||||||
Loss contingency accrual | 700 | ||||||||||
Smith | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Loss contingency, claim amount | $ 2,200 | ||||||||||
XIFIN, Inc. | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Loss contingency accrual | 210 | ||||||||||
XIFIN, Inc. | Subsequent Events | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Loss contingency, claim amount | $ 270 | ||||||||||
CPA Global | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Loss contingency accrual | 200 | ||||||||||
CPA Global | Subsequent Events | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Loss contingency, claim amount | $ 200 | ||||||||||
Edge BioSystems, Inc. | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Loss contingency, claim amount | $ 100 | ||||||||||
Loss contingency accrual | $ 100 | ||||||||||
Science Park Development Corporation | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Loss contingency, claim amount | $ 400 | ||||||||||
Science Park Development Corporation | Subsequent Events | |||||||||||
Subsequent Event [Line Items] | |||||||||||
Loss contingencies, settlement amount | $ 400 |