Document and Entity Information
Document and Entity Information | 3 Months Ended |
Mar. 31, 2015 | |
Document And Entity Information | |
Entity Registrant Name | GUIDED THERAPEUTICS INC |
Entity Central Index Key | 924,515 |
Document Type | S1 |
Document Period End Date | Mar. 31, 2015 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Is Entity a Well-known Seasoned Issuer? | No |
Is Entity a Voluntary Filer? | No |
Is Entity's Reporting Status Current? | Yes |
Entity Filer Category | Smaller Reporting Company |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
CURRENT ASSETS | |||
Cash and cash equivalents | $ 18 | $ 162 | $ 613 |
Accounts receivable, net of allowance for doubtful accounts of $76 at March 31, 2015 and December 31, 2014 and $18 at December 31, 2013 | 358 | 338 | 133 |
Inventory, net of reserves of $133, $144 and $184 at March 31, 2015, December 31, 2014 and 2013, respectively | 1,149 | 1,180 | 1,193 |
Other current assets | 52 | 99 | 101 |
Total current assets | 1,577 | 1,779 | 2,040 |
Property and equipment, net | 515 | 587 | 920 |
Other assets | 93 | 101 | 356 |
Debt issuance cost | 375 | 564 | 0 |
Total noncurrent assets | 983 | 1,252 | 1,276 |
TOTAL ASSETS | 2,560 | 3,031 | 3,316 |
CURRENT LIABILITIES: | |||
Short-term notes payable | 648 | 646 | 35 |
Current portion of long-term note payable | 168 | 123 | 109 |
Short-term notes payable, net of discount | 1,239 | 1,062 | 0 |
Accounts payable | 1,563 | 1,733 | 891 |
Accrued liabilities | 1,523 | 1,015 | 723 |
Deferred revenue | 24 | 24 | 14 |
Total current liabilities | 5,165 | 4,603 | 1,772 |
LONG-TERM LIABILITIES: | |||
Warrants, at fair value | 1,356 | 2,070 | 1,548 |
Long-term debt, net | 0 | 40 | 103 |
Convertible Debt, net of discount | 795 | 783 | 0 |
Other long-term liabilities | 262 | 0 | 0 |
Total long-term liabilities | 2,413 | 2,893 | 1,651 |
TOTAL LIABILITIES | 7,578 | 7,496 | 3,423 |
STOCKHOLDERS' EQUITY : | |||
Series B convertible preferred stock, $.001 par value; 3 shares authorized, 1.2, 1.2 and 2.1 shares issued and outstanding as of March 31, 2015, December 31, 2014 and 2013, (Liquidation preference of $1,200 at March 31, 2015 and December 31, 2014 and $2,100 at December 31, 2013) | 678 | 678 | 1,139 |
Common stock, $.001 Par value; 195,000 shares authorized, 100,055 and 96,889 shares issued and outstanding as of March, 31 2015 and December 31, 2014 and 145,000 shares authorized and 70,479 shares issued and outstanding as of December 31, 2013 | 99 | 97 | 71 |
Additional paid-in capital | 108,673 | 107,952 | 101,840 |
Treasury stock, at cost | (132) | (132) | (132) |
Accumulated deficit | (114,336) | (113,060) | (103,025) |
TOTAL STOCKHOLDERS' EQUITY | (5,018) | (4,465) | (107) |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 2,560 | $ 3,031 | $ 3,316 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
CURRENT ASSETS | |||
Accounts receivable, net of allowance | $ 76 | $ 76 | $ 18 |
Inventory, net of reserves | $ 133 | $ 144 | $ 184 |
STOCKHOLDERS' EQUITY : | |||
Series B convertible preferred stock par value | $ .001 | $ 0.001 | $ 0.001 |
Series B convertible preferred stock shares authorized | 3 | 3 | 3 |
Series B convertible preferred stock, Issued | 1.2 | 1.2 | 2.1 |
Series B convertible preferred stock, Outstanding | 1.2 | 1.2 | 2.1 |
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 |
Common stock, Authorized | 195,000 | 195,000 | 145,000 |
Common stock, Issued | 100,055 | 100,055 | 70,479 |
Common stock, outstanding | 96,889 | 96,889 | 70,479 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | |
REVENUE: | ||||
Sales - devices and disposables | $ 127 | $ 122 | $ 758 | $ 359 |
Cost of goods sold | 107 | 192 | 891 | 611 |
Gross Loss | 20 | (70) | (133) | (252) |
Contract and grant revenue | 15 | 19 | 65 | 820 |
COSTS AND EXPENSES: | ||||
Research and development | 373 | 607 | 2,788 | 2,742 |
Sales and marketing | 172 | 283 | 1,164 | 901 |
General and administrative | 963 | 1,138 | 4,649 | 3,533 |
Total | 1,508 | 2,028 | 8,601 | 7,174 |
Operating loss | (1,473) | (2,079) | (8,669) | (6,606) |
OTHER INCOME | 6 | 2 | 25 | 110 |
INTEREST EXPENSE | (492) | (27) | (979) | (45) |
LOSS ON EXTINGUISHMENT OF DEBT | 0 | 0 | (325) | 0 |
CHANGES IN FAIR VALUE OF WARRANTS | 714 | 542 | 65 | (674) |
TOTAL OTHER INCOME | 228 | 517 | (1,214) | (609) |
LOSS BEFORE INCOME TAXES | (1,245) | (1,562) | (9,883) | (7,215) |
PROVISION FOR INCOME TAXES | 0 | 0 | 0 | 0 |
NET LOSS | (1,245) | (1,562) | (9,883) | (7,215) |
DEEMED DIVIDENDS | 0 | 0 | 0 | (3,175) |
PREFERRED STOCK DIVIDENDS | (31) | (48) | (152) | 0 |
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS | $ (1,276) | $ (1,610) | $ (10,035) | $ (10,390) |
BASIC AND DILUTED NET LOSS PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS | $ (0.01) | $ (0.02) | $ (0.13) | $ (0.16) |
WEIGHTED AVERAGE SHARES OUTSTANDING | 97,324 | 71,451 | 77,061 | 65,884 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY - USD ($) $ in Thousands | Preferred Stock Series B | Common Stock | Additional Paid-In Capital | Treasury Stock | Accumulated Deficit | Total |
Beginning Balance, Amount at Dec. 31, 2012 | $ 0 | $ 62 | $ 93,273 | $ (104) | $ (92,098) | $ 1,133 |
Beginning Balance, Shares at Dec. 31, 2012 | 0 | 62,282 | ||||
Issuance of Series B preferred stock, Amount | $ 1,341 | 1,341 | ||||
Issuance of Series B preferred stock, Shares | 3 | |||||
Deemed dividends on beneficial conversion feature of preferred stock | (3,148) | (3,148) | ||||
Preferred dividends | (27) | (27) | ||||
Conversion of preferred stock, Amount | $ (202) | $ 1 | 201 | |||
Conversion of preferred stock, Shares | (1) | 878 | ||||
Issuance of common stock, Amount | $ 1 | 462 | 463 | |||
Issuance of common stock, Shares | 670 | |||||
Issuance of stock options | 126 | 126 | ||||
Exercise of warrants/options, Amount | $ 7 | 3,269 | 3,276 | |||
Exercise of warrants/options, Shares | 6,649 | |||||
Stock-based compensation expense | 824 | 824 | ||||
Deemed dividends | 537 | (537) | ||||
Acquisition of treasury stock | (28) | (28) | ||||
Net Loss | (7,215) | (7,215) | ||||
Ending Balance, Amount at Dec. 31, 2013 | $ 1,139 | $ 71 | 101,840 | (132) | (103,025) | (107) |
Ending Balance, Shares at Dec. 31, 2013 | 2 | 70,479 | ||||
Conversion of preferred stock, Amount | $ (461) | $ 2 | 459 | |||
Conversion of preferred stock, Shares | (1) | 2,311 | ||||
Issuance of common stock and warrants, Amount | $ 21 | 3,348 | 3,369 | |||
Issuance of common stock and warrants, Shares | 20,872 | |||||
Issuance of warrants | 372 | 372 | ||||
Issuance of stock options | 61 | 61 | ||||
Exercise of warrants/options, Amount | $ 96 | 96 | ||||
Exercise of warrants/options, Shares | 441 | |||||
Stock-based compensation expense | 886 | 886 | ||||
Stock-based compensation expense, Shares | 2 | |||||
Conversion of debts into common stock, Amount | $ 3 | 890 | $ 893 | |||
Conversion of debts into common stock, Shares | 2,784 | |||||
Issuance of stock, Shares | 26,409,893 | |||||
Net Loss | (9,883) | $ (9,883) | ||||
Ending Balance, Amount at Dec. 31, 2014 | $ 678 | $ 97 | $ 107,952 | $ (132) | $ (113,060) | $ (4,465) |
Ending Balance, Shares at Dec. 31, 2014 | 1 | 96,889 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||
Net loss | $ (1,245) | $ (1,562) | $ (9,883) | $ (7,215) |
Adjustments to reconcile net loss to net cash used in operating activities | ||||
Bad debt expense | 0 | 0 | 63 | 7 |
Loss on extinguishment of debt | 0 | 0 | 325 | 0 |
Depreciation | 72 | 117 | 483 | 461 |
Amortization | 402 | 0 | 757 | 0 |
Stock based compensation | 192 | 359 | 886 | 824 |
Change in fair value of warrants | (714) | (541) | (65) | 674 |
Changes in operating assets and liabilities: | ||||
Inventory | (20) | (61) | 14 | (669) |
Accounts receivable | 31 | 11 | (267) | (33) |
Other current assets | 47 | 53 | 2 | 97 |
Other assets | 8 | 41 | 254 | (25) |
Accounts payable | (169) | 377 | 842 | 126 |
Deferred revenue | 0 | (8) | 10 | (26) |
Accrued liabilities | 508 | 255 | 296 | 223 |
Other long-term liabilities | 262 | 0 | 0 | 0 |
Total adjustments | 619 | 603 | 3,600 | 1,659 |
Net cash used in operating activities | (626) | (959) | (6,283) | (5,556) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||
Additions to fixed assets | 0 | (4) | (150) | (107) |
Net cash used in investing activities | 0 | (4) | (150) | (107) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||
Net proceeds from issuance of preferred stock and warrants | 451 | 0 | 1,730 | 2,214 |
Proceeds from debt financing | 62 | 378 | 5,263 | 115 |
Loan acquisition costs | 0 | 0 | (452) | 0 |
Payments on notes and loan payables | (31) | (45) | (656) | (374) |
Proceeds from options and warrants exercised | 0 | 67 | 97 | 3,276 |
Net cash provided by financing activities | 482 | 400 | 5,982 | 5,231 |
NET CHANGE IN CASH AND CASH EQUIVALENTS | (144) | (563) | (451) | (432) |
CASH AND CASH EQUIVALENTS, beginning of year | 162 | 613 | 613 | 1,045 |
CASH AND CASH EQUIVALENTS, end of period | 18 | 50 | 162 | 613 |
SUPPLEMENTAL SCHEDULE OF: | ||||
Cash paid for Interest | 22 | 8 | 33 | 31 |
NONCASH INVESTING AND FINANCING ACTIVITIES: | ||||
Conversion of accrued expenses into common stock / options | 0 | 22 | 207 | 126 |
Payment of debt issuance costs via warrants and common stock | 0 | 0 | 522 | 0 |
Conversion of convertible debt into common stock | 0 | 0 | 893 | 0 |
Repayment of debt via issuance of common stock and warrants | 0 | 0 | 1,697 | 0 |
Issuance of common stock as board compensation | 31 | 0 | 355 | 463 |
Deemed dividends in the form of warrants to purchase common stock | 0 | 0 | 0 | 537 |
Dividends on preferred stock | $ 50 | $ 0 | $ 0 | $ 3,148 |
1. BASIS OF PRESENTATION
1. BASIS OF PRESENTATION | 3 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Dec. 31, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
1. BASIS OF PRESENTATION | The accompanying unaudited condensed consolidated financial statements included herein have been prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP) for interim financial reporting and with the instructions to Form 10-Q and Article 10 of Regulation S-X by Guided Therapeutics, Inc. (formerly SpectRx, Inc.), together with its wholly owned subsidiary InterScan, Inc., (Interscan) (formerly Guided Therapeutics, Inc.), collectively referred to herein as the Company. Accordingly, they do not include all information and footnotes required by GAAP for complete financial statements. These statements reflect adjustments, all of which are of a normal, recurring nature, and which are, in the opinion of management, necessary to present fairly the Companys financial position as of March 31, 2015, results of operations for the three months ended March 31, 2015 and 2014, and cash flows for the three months ended March 31, 2015 and 2014. The results of operations for the three months ended March 31, 2015 are not necessarily indicative of the results for a full fiscal year. Preparing financial statements requires the Companys management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and disclosure of contingent assets and liabilities. Actual results could differ from those estimates. These financial statements should be read in conjunction with the financial statements and notes thereto included in the Companys annual report on Form 10-K for the year ended December 31, 2014. The Company's prospects must be considered in light of the substantial risks, expenses and difficulties encountered by entrants into the medical device industry. This industry is characterized by an increasing number of participants, intense competition and a high failure rate. The Company has experienced net losses since its inception and, as of March 31, 2015, it had an accumulated deficit of approximately $114.3 million. Through March 31, 2015, the Company has devoted substantial resources to research and development efforts. The Company does not have significant experience in manufacturing, marketing or selling its products. The Company's development efforts may not result in commercially viable products and it may not be successful in introducing its products. Moreover, required regulatory clearances or approvals may not be obtained. The Company's products may not ever gain market acceptance and the Company may not ever achieve levels of revenue to sustain further development costs and support ongoing operations or achieve profitability. The development and commercialization of the Company's products will require substantial development, regulatory, sales and marketing, manufacturing and other expenditures. The Company expects operating losses to continue through the foreseeable future as it continues to expend substantial resources to complete development of its products, obtain regulatory clearances or approvals and conduct further research and development. Going Concern The Companys consolidated financial statements have been prepared and presented on a basis assuming it will continue as a going concern. The factors below raise substantial doubt about the Companys ability to continue as a going concern. The financial statements do not include any adjustments that might be necessary from the outcome of this uncertainty. Notwithstanding the foregoing, the Company believes it has made progress in recent years in stabilizing its financial situation by execution of multiyear contracts from Konica Minolta Opto, Inc., a subsidiary of Konica Minolta, Inc., a Japanese corporation based in Tokyo (Konica Minolta) and grants from the National Cancer Institute (NCI), while at the same time simplifying its capital structure and significantly reducing debt. However, the Company has replaced its prior agreements with Konica Minolta with a new licensing agreement, and therefore will no longer receive direct payments from Konica Minolta, and will have to pay a royalty to Konica Minolta should the Company sell any products licensed from Konica Minolta. At March 31, 2015, the Company had negative working capital of approximately $3.6 million and the stockholders deficit was approximately $5.0 million, primarily due to recurring net losses from operations and deemed dividends on warrants and preferred stock, offset by proceeds from the exercise of options and warrants and proceeds from the sales of stock. The Companys capital-raising efforts are ongoing. If sufficient capital cannot be raised by the end of second quarter of 2015, the Company has plans to curtail operations by reducing discretionary spending and staffing levels, and attempting to operate by only pursuing activities for which it has external financial support and additional NCI, NHI or other grant funding. However, there can be no assurance that such external financial support will be sufficient to maintain even limited operations or that the Company will be able to raise additional funds on acceptable terms, or at all. In such a case, the Company might be required to enter into unfavorable agreements or, if that is not possible, be unable to continue operations, and to the extent practicable, liquidate and/or file for bankruptcy protection. The Company had warrants exercisable for approximately 28.4 million shares of its common stock outstanding at March 31, 2015, with exercise prices of $0.1394 to $1.08 per share. Exercises of these warrants would generate a total of approximately $7.6 million in cash, assuming full exercise, although the Company cannot be assured that holders will exercise any warrants. Management may obtain additional funds through the private sale of preferred stock or debt securities, public and private sales of common stock, and grants, if available. Assuming the Company receives FDA approval for its LuViva cervical cancer detection device in 2015, the Company currently anticipates an early 2016 product launch in the United States. Product launch outside the United States began in the second half of 2013. | Guided Therapeutics, Inc. (formerly SpectRx, Inc.), together with its wholly owned subsidiary, InterScan, Inc. (formerly Guided Therapeutics, Inc.), collectively referred to herein as the Company, is a medical technology company focused on developing innovative medical devices that have the potential to improve healthcare. The Companys primary focus is the commercialization of its LuViva non-invasive cervical cancer detection device and extension of its cancer detection technology into other cancers, including esophageal. The Companys technology, including products in research and development, primarily relates to biophotonics technology for the non-invasive detection of cancers. Basis of Presentation All information and footnote disclosures included in the consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States. The Companys prospects must be considered in light of the substantial risks, expenses and difficulties encountered by entrants into the medical device industry. This industry is characterized by an increasing number of participants, intense competition and a high failure rate. The Company has experienced net losses since its inception and, as of December 31, 2014, it had an accumulated deficit of approximately $113.1 million. Through December 31, 2014, the Company has devoted substantial resources to research and development efforts. The Company first generated revenue from product sales in 1998, but does not have significant experience in manufacturing, marketing or selling its products. The Companys development efforts may not result in commercially viable products and it may not be successful in growing sales for its products. Moreover, required regulatory clearances or approvals may not be obtained. The Companys products may not ever gain market acceptance and the Company may not ever achieve levels of revenue to sustain further development costs and support ongoing operations or achieve profitability. The development and commercialization of the Companys products will require substantial development, regulatory, sales and marketing, manufacturing and other expenditures. The Company expects operating losses to continue through the foreseeable future as it continues to expend substantial resources to complete development of its products, obtain regulatory clearances or approvals and conduct further research and development. Going Concern The Companys consolidated financial statements have been prepared and presented on a basis assuming it will continue as a going concern. The factors below raise substantial doubt about the Companys ability to continue as a going concern. The financial statements do not include any adjustments that might be necessary from the outcome of this uncertainty. Notwithstanding the foregoing, the Company believes it has made progress in recent years in stabilizing its financial situation by execution of multiyear contracts from Konica Minolta Opto, Inc., a subsidiary of Konica Minolta, Inc., a Japanese corporation based in Tokyo (Konica Minolta) and grants from the National Cancer Institute (NCI), while at the same time simplifying its capital structure and significantly reducing debt. However, the Company has replaced its prior agreements with Konica Minolta with a new licensing agreement, and therefore will no longer receive direct payments from Konica Minolta, and will have to pay a royalty to Konica Minolta should the Company sell any products licensed from Konica Minolta. At December 31, 2014, the Company had a negative working capital of approximately $2.8 million, accumulated deficit of $113.1 million, and incurred a net loss of $9.9 million for the year then ended. Stockholders deficit totaled approximately $4.5 million at December 31, 2014, primarily due to recurring net losses from operations, deemed dividends on warrants and preferred stock, offset by proceeds from the exercise of options and warrants and proceeds from sales of stock. The Companys capital-raising efforts are ongoing. If sufficient capital cannot be raised during the second quarter of 2015, the Company has plans to curtail operations by reducing discretionary spending and staffing levels, and attempting to operate by only pursuing activities for which it has external financial support and additional NCI, NHI or other grant funding. However, there can be no assurance that such external financial support will be sufficient to maintain even limited operations or that the Company will be able to raise additional funds on acceptable terms, or at all. In such a case, the Company might be required to enter into unfavorable agreements or, if that is not possible, be unable to continue operations, and to the extent practicable, liquidate and/or file for bankruptcy protection. The Company had warrants exercisable for approximately 29.8 million shares of its common stock outstanding at December 31, 2014, with exercise prices of $0.15 to $1.08 per share. Exercises of these warrants would generate a total of approximately $10.1 million in cash, assuming full exercise, although the Company cannot be assured that holders will exercise any warrants. Management may obtain additional funds through the private sale of preferred stock or debt securities, public and private sales of common stock, and grants, if available. Assuming the Company receives FDA approval for its LuViva cervical cancer detection device in 2015, the Company currently anticipates an early 2016 product launch in the United States. Product launch outside the United States began in the second half of 2013. |
2. SIGNIFICANT ACCOUNTING POLIC
2. SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Dec. 31, 2014 | |
Accounting Policies [Abstract] | ||
2. SIGNIFICANT ACCOUNTING POLICIES | The Companys significant accounting policies were set forth in the audited financial statements and notes thereto for the year ended December 31, 2014 included in its annual report on Form 10-K, filed with the Securities and Exchange Commission (SEC). Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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 revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant areas where estimates are used include the allowance for doubtful accounts, inventory valuation and input variables for Black-Scholes, Monte Carlo simulations and Lattice Model calculations. Principles of Consolidation The accompanying consolidated financial statements include the accounts of Guided Therapeutics, Inc. and its wholly owned subsidiary. Accounting Standard Updates Newly effective accounting standards updates and those not effective until after March 31, 2015, are not expected to have a significant effect on the Companys financial position or results of operations. Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be a cash equivalent. Accounts Receivable The Company performs periodic credit evaluations of its customers financial conditions and generally does not require collateral. The Company reviews all outstanding accounts receivable for collectability on a quarterly basis. An allowance for doubtful accounts is recorded for any amounts deemed uncollectable. The Company does not accrue interest receivable on past due accounts receivable. Revenue Recognition Revenue from the sale of the Companys products is recognized upon shipment of such products to its customers. The Company recognizes revenue from contracts on a straight line basis, over the terms of the contract. The Company recognizes revenue from grants based on the grant agreement, at the time the expenses are incurred. Deferred Revenue The Company defers payments received as revenue until earned based on the related contracts on a straight line basis, over the terms of the contract. Concentrations of Credit Risk The Company, from time to time during the years covered by these consolidated financial statements, may have bank balances in excess of its insured limits. Management has deemed this a normal business risk. Income Taxes The Company accounts for income taxes in accordance with the liability method. Under the liability method, the Company recognizes deferred assets and liabilities based upon anticipated future tax consequences attributable to differences between financial statement carrying amounts of assets and liabilities and their respective tax bases. The Company establishes a valuation allowance to the extent that it is more likely than not that deferred tax assets will not be utilized against future taxable income. As of December 31, 2014, the Company had approximately $68.4 million of net operating loss (NOL) carry forward. There was no provision for income taxes at March 31, 2015. A full valuation allowance has been recorded related to any deferred tax assets created from the NOL. Stock Option Plan The Company measures the cost of employees services received in exchange for equity awards, including stock options, based on the grant date fair value of the awards. The cost will be recognized as compensation expense over the vesting period of the awards. Inventory Valuation All inventories are stated at lower of cost or market, with cost determined substantially on a first-in, first-out basis. Selling, general, and administrative expenses are not inventoried, but are charged to expense when purchased. At March 31, 2015 and December 31, 2014, our inventories were as follows (in thousands): March 31, December 31, 2015 2014 Raw materials $ 696 $ 884 Work in process 335 304 Finished goods 251 136 Inventory reserve (133 ) (144 ) Total $ 1,149 $ 1,180 Property and Equipment Property and equipment are recorded at cost. Depreciation is computed using the straight-line method over estimated useful lives of three to seven years. Leasehold improvements are depreciated at the shorter of the useful life of the asset or the remaining lease term. Depreciation expense is included in general and administrative expense on the statement of operations. Expenditures for repairs and maintenance are expensed as incurred. Property and equipment are summarized as follows at March 31, 2015 and December 31, 2014 (in thousands): March 31, December 31, 2015 2014 Equipment $ 1,391 $ 1,391 Software 737 737 Furniture and fixtures 124 124 Leasehold Improvement 180 180 2,432 2,432 Less accumulated depreciation (1,917 ) (1,845 ) Total $ 515 $ 587 Other Assets Other assets primarily consist of long-term deposits for various tooling projects that are being constructed for the Company. At March 31, 2015 and December 31, 2014, such balances were approximately $72,000. Debt Issuance Costs Debt issuance costs incurred in securing the Companys financing arrangements are capitalized and amortized over the term of the debt. Deferred financing costs are included in other long term assets. Warrants The Company has issued warrants, which allow the warrant holder to purchase one share of stock at a specified price for a specified period of time. The Company records equity instruments including warrants issued to non-employees based on the fair value at the date of issue. The fair value of warrants classified as equity instruments at the date of issuance is estimated using the Black-Scholes Model. The fair value of warrants classified as liabilities at the date of issuance is estimated using the Monte Carlo Simulation model. | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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 revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant areas where estimates are used include the allowance for doubtful accounts, inventory valuation and input variables for Black-Scholes, Monte Carlo simulations and Lattice Model calculations. Principles of Consolidation The accompanying consolidated financial statements include the accounts of Guided Therapeutics, Inc. and its wholly owned subsidiary. Accounting Standard Updates In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, (ASU 2014-09). ASU 2014-09 outlines a new, single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. This new revenue recognition model provides a five step analysis in determining when and how revenue is recognized. The new model will require revenue recognition to depict the transfer of promised goods or services to customers in an amount that reflects the consideration a company expects to receive in exchange for those goods or services. ASU 2014-09 is effective for reporting periods beginning after December 15, 2016, and early adoption is not permitted. The Company is evaluating the impact that adoption of this guidance will have on the determination or reporting of its financial results. In June 2014, the FASB issued ASU 2014-12, Accounting for Share-Based Payments When the Terms of an Award Provide that a Performance Target Could be Achieved after the Requisite Service Period, (ASU 2014-12). ASU 2014-12 requires that a performance target that affects vesting, and that could be achieved after the requisite service period, be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant date fair value of the award. ASU 2014-12 is effective for the reporting periods beginning after December 15, 2015. Early adoption is permitted. The Company is evaluating the impact that adoption of this guidance will have on the determination or reporting of its financial results. In August 2014, the FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entitys Ability to Continue as a Going Concern, (ASU 2014-15). ASU 2014-15 requires management to perform interim and annual assessments of an entitys ability to continue as a going concern for a one year period subsequent to the date of the financial statements, as entity must provide certain disclosures if conditions or events raise substantial doubt about the entitys ability to continue as a going concern. The guidance is effective for all entities for the first annual period ending after December 15, 2016 and interim periods thereafter, with early adoption permitted. The Company is evaluating the impact that adoption of this guidance will have on the determination or reporting of its financial results. Except as noted above, the guidance issued by the FASB during the current year is not expected to have a material effect on the Companys consolidated financial statements. Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be a cash equivalent. Accounts Receivable The Company performs periodic credit evaluations of its customers financial conditions and generally does not require collateral. The Company reviews all outstanding accounts receivable for collectability on a quarterly basis. An allowance for doubtful accounts is recorded for any amounts deemed uncollectable. The Company does not accrue interest receivable on past due accounts receivable. Concentrations of Credit Risk The Company, from time to time during the years covered by these consolidated financial statements, may have bank balances in excess of its insured limits. Management has deemed this a normal business risk. The Company performs periodic credit evaluations of its customers financial conditions and generally does not require collateral. The Company reviews all outstanding accounts receivable for collectability on a quarterly basis. An allowance for doubtful accounts is recorded for any amounts deemed uncollectable. The Company does not accrue interest receivable on past due accounts receivable. Inventory Valuation All inventories are stated at lower of cost or market, with cost determined substantially on a first-in, first-out basis. Selling, general, and administrative expenses are not inventoried, but are charged to expense when purchased. At December 31, 2014 and December 31, 2013, our inventories were as follows (in thousands): Year Ended December 31, 2014 2013 Raw materials $ 884 $ 1,013 Work in process 304 268 Finished goods 136 96 Inventory reserve (144 ) (184 ) Total $ 1,180 $ 1,193 Property and Equipment Property and equipment are recorded at cost. Depreciation is computed using the straight-line method over estimated useful lives of three to seven years. Leasehold improvements are depreciated at the shorter of the useful life of the asset or the remaining lease term. Depreciation expense is included in general and administrative expense on the statement of operations. Expenditures for repairs and maintenance are expensed as incurred. Property and equipment are summarized as follows at December 31, 2014 and 2013 (in thousands): Year Ended December 31, 2014 2013 Equipment $ 1,391 $ 1,277 Software 737 737 Furniture and fixtures 124 124 Leasehold Improvement 180 189 2,432 2,327 Less accumulated depreciation (1,845 ) (1,407 ) Total $ 587 $ 920 Debt Issuance Costs Debt issuance costs incurred in securing the Companys financing arrangements are capitalized and amortized over the term of the debt. Deferred financing costs are included in other long term assets. Other Assets Other assets primarily consist of long-term deposits for various tooling projects that are being constructed for the Company. At December 31, 2014 and 2013, such balances were approximately $72,000 and $326,000, respectively. Patent Costs (Principally Legal Fees) Costs incurred in filing, prosecuting, and maintaining patents are recurring, and expensed as incurred. Maintaining patents are expensed as incurred as the Company has not yet received FDA approval and recovery of these costs is uncertain. Such costs aggregated approximately $50,000 and $75,000 in 2014 and 2013, respectively. Accrued Liabilities Accrued liabilities are summarized as follows at December 31, 2014 and 2013 (in thousands): As of December 31, 2014 2013 Accrued compensation $ 447 $ 426 Accrued professional fees 203 116 Deferred rent 54 68 Accrued warranty 119 58 Accrued vacation 144 Other accrued expenses 48 55 Total $ 1,015 $ 723 Revenue Recognition Revenue from the sale of the Companys products is recognized upon shipment of such products to its customers. The Company recognizes revenue from contracts on a straight line basis, over the terms of the contracts. The Company recognizes revenue from grants based on the grant agreements, at the time the expenses are incurred. Significant Customers In 2014 and 2013, the majority of the Companys revenues were from two and three customers, respectively. Revenue from these customers totaled approximately $414,000 or 50% and approximately $653,000 or 65% of total revenue for the year ended December 31, 2014 and 2013, respectively. Accounts receivable due from those customers represents 17% and 27% as of December 31, 2014 and 2013, respectively. Deferred Revenue The Company defers payments received as revenue until earned based on the related contracts on a straight line basis, over the terms of the contract. Research and Development Research and development expenses consist of expenditures for research conducted by the Company and payments made under contracts with consultants or other outside parties and costs associated with internal and contracted clinical trials. All research and development costs are expensed as incurred. Income Taxes The Company uses the liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Management provides valuation allowances against the deferred tax assets for amounts that are not considered more likely than not to be realized. Uncertain Tax Positions Effective January 1, 2007 the Company adopted ASC guidance regarding accounting for uncertainty in income taxes. This guidance clarifies the accounting for income taxes by prescribing the minimum recognition threshold an income tax position is required to meet before being recognized in the financial statements and applies to all income tax positions. Each income tax position is assessed using a two-step process. A determination is first made as to whether it is more likely than not that the income tax position will be sustained, based upon technical merits, upon examination by the taxing authorities. If the income tax position is expected to meet the more likely than not criteria, the benefit recorded in the financial statements equals the largest amount that is greater than 50% likely to be realized upon its ultimate settlement. At December 31, 2014 and 2013, there were no uncertain tax positions. The Company is current with its federal and applicable state tax returns filings. Although we have been experiencing recurring losses, we are obligated to file tax returns for compliance with Internal Revenue Service (IRS) regulations and that of applicable state jurisdictions. As of December 31, 2014, the Company has approximately $68.4 million of net operating loss eligible to be carried forward for tax purposes at federal and applicable states level. None of the Companys federal or state income tax returns are currently under examination by the IRS or state authorities. However, fiscal years 2011 and later remain subject to examination by the IRS and applicable states. Warrants The Company has issued warrants, which allow the warrant holder to purchase one share of stock at a specified price for a specified period of time. The Company records equity instruments including warrants issued to non-employees based on the fair value at the date of issue. The fair value of warrants classified as equity instruments at the date of issuance is estimated using the Black-Scholes Model. The fair value of warrants classified as liabilities at the date of issuance is estimated using the Monte Carlo Simulation model. Stock Based Compensation The Company records compensation expense related to options granted to non-employees based on the fair value of the award. Compensation cost is recorded as earned for all unvested stock options outstanding at the beginning of the first year based upon the grant date fair value estimates, and for compensation cost for all share-based payments granted or modified subsequently based on fair value estimates. For the years ended December 31, 2014 and 2013, share-based compensation for options attributable to employees and officers were approximately $886,000 and $824,000, respectively. These amounts have been included in the Companys statements of operations. Compensation costs for stock options which vest over time are recognized over the vesting period. As of December 31, 2014, the Company had approximately $568,000 of unrecognized compensation costs related to granted stock options to be recognized over the remaining vesting period of approximately three years. |
3. FAIR VALUE OF FINANCIAL INST
3. FAIR VALUE OF FINANCIAL INSTRUMENTS | 3 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Dec. 31, 2014 | |
Investments, All Other Investments [Abstract] | ||
3. FAIR VALUE OF FINANCIAL INSTRUMENTS | The guidance for fair value measurements, ASC820, Fair Value Measurements and Disclosures · Level 1 Quoted market prices in active markets for identical assets and liabilities; · Level 2 Inputs, other than level 1 inputs, either directly or indirectly observable; and · Level 3 Unobservable inputs developed using internal estimates and assumptions (there is little or no market date) which reflect those that market participants would use. The Company records its derivative activities at fair value, which consisted of warrants as of March 31, 2015. The fair value of the warrants was estimated using the Monte Carlo Simulation model. Gains and losses from derivative contracts are included in net gain (loss) from derivative contracts in the statement of operations. The fair value of the Companys derivative warrants is classified as a Level 3 measurement, since unobservable inputs are used in the valuation. The following table presents the fair value for those liabilities measured on a recurring basis as of March 31, 2015 and December 31, 2014: FAIR VALUE MEASUREMENTS ( In Thousands) The following is summary of items that the Company measures at fair value on a recurring basis: Fair Value at March 31, 2015 Level 1 Level 2 Level 3 Total Public offering warrants $ $ $ (365 ) $ (365 ) Series B warrants (991 ) (991 ) Total long-term liabilities at fair value $ $ $ (1,356 ) $ (1,356 ) Fair Value at December 31, 2014 Level 1 Level 2 Level 3 Total Public offering warrants $ $ $ (587 ) $ (587 ) Series B warrants (1,483 ) (1,483 ) Total long-term liabilities at fair value $ $ $ (2,070 ) $ (2,070 ) As of March 31, 2015, the fair value of warrants we approximately $1.4 million. A net change of approximately $714,000 has been recorded to the accompanying statement of operations for the three months ended. | The guidance for fair value measurements, ASC820, Fair Value Measurements and Disclosures · Level 1 Quoted market prices in active markets for identical assets and liabilities; · Level 2 Inputs, other than level 1 inputs, either directly or indirectly observable; and · Level 3 Unobservable inputs developed using internal estimates and assumptions (there is little or no market date) which reflect those that market participants would use. The Company records its derivative activities at fair value, which consisted of warrants as of December 31, 2014. The fair value of the warrants was estimated using the Monte Carlo Simulation model. Gains and losses from derivative contracts are included in net gain (loss) from derivative contracts in the statement of operations. The fair value of the Companys derivative warrants is classified as a Level 3 measurement, since unobservable inputs are used in the valuation. The following table presents the fair value for those liabilities measured on a recurring basis as of December 31, 2014 and 2013: FAIR VALUE MEASUREMENTS ( In Thousands) Description Level 1 Level 2 Level 3 Total Asset (Liability) Total Date Public Offering warrants $ $ $ (587 ) $ (587 ) $ (587 ) December 31, 2014 Series B Warrants $ $ $ (1,483 ) $ (1,483 ) $ 1,483 ) December 31, 2014 Total 2014 $ $ $ (2,070 ) $ (2,070 ) $ (2,070 ) Series B Warrants $ $ $ 1,548 ) $ (1,548 ) $ (1,548 ) December 31, 2013 |
4. STOCKHOLDERS' DEFICIT
4. STOCKHOLDERS' DEFICIT | 3 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Dec. 31, 2014 | |
Equity [Abstract] | ||
4. STOCKHOLDERS' DEFICIT | Common Stock The Company has authorized 195 million shares of common stock with $0.001 par value, of which 100.1 million were issued and outstanding as of March 31, 2015. For the year ended December 31, 2014, there were 195 million authorized shares of common stock, of which 96.9 million were issued and outstanding. For the three months ended March 31, 2015, the Company issued 3,165,978 shares of common stock as listed below: New Issuance - For Cash 2,499,999 Series B Dividends 138,805 Option Exercised 168,558 Repayment of Loan 358,616 Total 3,165,978 Preferred Stock; Series B Convertible Preferred Stock The Company has authorized 5,000,000 shares of preferred stock with a $.001 par value. The board of directors has the authority to issue these shares and to set dividends, voting and conversion rights, redemption provisions, liquidation preferences, and other rights and restrictions. The board of directors designated 525,000 shares of preferred stock as redeemable convertible preferred stock, none of which remain outstanding, and 3,000 shares of preferred stock as Series B Preferred Stock, of which 1,277 shares were issued and outstanding at both March 31, 2015 and December 31, 2014. Pursuant to the terms of the Series B Preferred Stock set forth in the Certificate of Designations, Preferences and Rights designating the Preferred Stock (the Preferred Stock Designation), shares of Series B Preferred Stock are convertible into common stock by their holder at any time, and will be mandatorily convertible upon the achievement of certain conditions, including the receipt of certain approvals from the U.S. Food and Drug Administration and the achievement by the Company of specified average trading prices and volumes for the common stock. The original conversion price was $0.68 per share, such that each share of Series B Preferred Stock would convert into 1,471 shares of common stock, subject to customary adjustments, including any accrued but unpaid dividends and pursuant to certain anti-dilution provisions, as set forth in the Preferred Stock Designation. As a result of the operation of anti-dilution provisions, as of March 31, 2015 the conversion price was $0.1394 per share, such that each share of Series B Preferred Stock would convert into 7,747 shares of common stock. Holders of the Series B Preferred Stock were entitled to quarterly dividends at an annual rate of 5.0% through the quarter ended December 31, 2013, and are entitled to quarterly dividends at an annual rate of 10.0% thereafter, in each case, payable in cash or, subject to certain conditions, common stock, at the Companys option. Accrued dividends totaled approximately $32,500 at March 31, 2015. Each share of Series B Preferred Stock is entitled to a number of votes equal to the number of shares of common stock into which the Series B Preferred Stock is convertible. As long as shares of the Series B Preferred Stock are outstanding, and until the receipt of certain approvals from the U.S. Food and Drug Administration and the achievement by the Company of specified average trading prices and volumes for the common stock, the Company may not incur indebtedness for borrowed money secured by the Companys intellectual property or in excess of $2.0 million without the prior consent of the holders of two-thirds of the outstanding shares of Series B Preferred Stock. The Company may redeem the Series B Preferred Stock after the second anniversary of issuance, subject to certain conditions. Upon the Companys liquidation or sale to or merger with another corporation, each share of Series B Preferred Stock will be entitled to a liquidation preference of $1,000 per share, plus any accrued but unpaid dividends. The Series B Preferred Stock was issued with Tranche A warrants to purchase 1,858,089 shares of common stock and Tranche B warrants purchasing 1,858,088 shares of common stock, both at an exercise price of $1.08 per share. Pursuant to the terms of the Tranche B warrants, their exercise price will be reduced, and the number of shares of common stock into which those warrants are exercisable will be increased, if the Company issues shares at a price below the then-current exercise price. At March 31, 2015, the exercise price of Tranche B warrants was $0.1394 per share, convertible into 14,195,525 shares of common stock. As a result of the anti-dilution provisions, the Company is required to account for the warrants as a liability recorded at fair value each period. The Company values the warrants using a Monte Carlo Simulation model. Of the $2.6 million in proceeds from issuance of the Series B Preferred Stock, the Company originally allocated $873,000 to the fair value of the warrants. At December 31, 2014, the fair value of these warrants was approximately $1.5 million. As of March 31, 2015, the fair value of these warrants was estimated at approximately $991,000. Warrants The following table summarizes transactions involving the Companys outstanding warrants to purchase common stock for the quarter ended March 31, 2015: Warrants (Underlying Shares) Outstanding, January 1, 2015 29,796,154 Issuances 2,249,422 Canceled / Expired (3,590,522 ) Exercised Outstanding, March 31, 2015 28,455,054 The Company had the following shares reserved for the warrants as of March 31, 2015: Warrants (Underlying Shares) Exercise Price Expiration Date 6,790 (1) $1.0100 per share September 10, 2015 439,883 (2) $0.6800 per share March 31, 2016 285,186 (3) $1.0500 per share November 20, 2016 1,858,089 (4) $1.0800 per share May 23, 2018 14,195,525 (4)(5) $0.1394 per share May 23, 2018 200,000 (6) $0.5000 per share April 23, 2019 561,798 (6) $0.4500 per share May 22, 2019 184,211 (7) $0.3800 per share September 10, 2019 325,521 (8) $0.4601 per share September 27, 2019 8,392,707 (9) $0.2250 per share December 2, 2019 755,344 (10) $0.2812 per share December 2, 2019 1,250,000 (11) $0.2550 per share March 30, 2018 ________________________ (1) Consists of outstanding warrants issued in conjunction with a September 2010 private placement. (2) Consists of outstanding warrants issued in conjunction with a buy-back of a minority interest in the Companys subsidiary in December 2012, which were issued in February 2014. (3) Consists of outstanding warrants issued in conjunction with a November 2011 private placement. (4) Consists of outstanding warrants issued in conjunction with a May 2013 private placement. (5) Underlying shares increased from 1,858,089 to 14,395,522, and per share exercise price decreased from $1.08 to $0.1394, pursuant to the anti-dilution provisions in the warrants, as a result of the operation of anti-dilution provisions. (6) Consists of warrants issued to a placement agent in connection with a senior convertible notes offering. (7) Consists of outstanding warrants issued to a placement agent in conjunction with a secured note offering. (8) Consists of outstanding warrants issued in conjunction with a Regulation S offering. (9) Consists of outstanding warrants issued in conjunction with a 2014 public offering. (10) Consists of outstanding warrants issued to a placement agent in conjunction with a 2014 public offering. (11) Consists of outstanding warrants issued in conjunction with a March 2015 private placement. | Common Stock The Company has authorized 195 million shares of common stock with $0.001 par value, of which 96.9 million were issued and outstanding as of December 31, 2014. For the year ended December 31, 2013, there were 145 million authorized shares of common stock, of which 70.5 million were issued and outstanding. For the year ended December 31, 2014, the Company issued 26,409,893 shares of common stock as listed below: Public Offering - Issuance - For Cash 8,985,410 Public Offering - Issuance - For Debt Repayment 7,800,005 Reg. S - New Issuance - For Cash 651,042 Series B Conversion 2,311,089 Series B Dividends 342,389 Commitment Shares / 2014 Senior Convertible Notes 321,820 2014 Senior Convertible Note 2,783,959 Option Exercised 242,439 Warrant Exercised 200,000 Board Compensation 771,740 Restricted Shares CEO 2014 2,000,000 Total 26,409,893 Preferred Stock; Series B Convertible Preferred Stock The Company has authorized 5,000,000 shares of preferred stock with a $.001 par value. The board of directors has the authority to issue these shares and to set dividends, voting and conversion rights, redemption provisions, liquidation preferences, and other rights and restrictions. The board of directors designated 525,000 shares of preferred stock as redeemable convertible preferred stock, none of which remain outstanding, and 3,000 shares of preferred stock as Series B Preferred Stock, of which 1,277 and 2,147 shares were issued and outstanding as of December 31, 2014 and 2013, respectively. Pursuant to the terms of the Series B Preferred Stock set forth in the Certificate of Designations, Preferences and Rights designating the Preferred Stock (the Preferred Stock Designation), shares of Series B Preferred Stock are convertible into common stock by their holder at any time, and will be mandatorily convertible upon the achievement of certain conditions, including the receipt of certain approvals from the U.S. Food and Drug Administration and the achievement by the Company of specified average trading prices and volumes for the common stock. The original conversion price was $0.68 per share, such that each share of Preferred Stock would convert into 1,471 shares of common stock, subject to customary adjustments, including any accrued but unpaid dividends and pursuant to certain anti-dilution provisions, as set forth in the Preferred Stock Designation. As a result of anti-dilution provisions, the current conversion price is set at $0.15 per share, such that each share of Preferred Stock would convert into 6,676 shares of common stock. Holders of the Series B Preferred Stock are entitled to quarterly dividends at an annual rate of 5.0%, for the quarter ended December 31, 2014, and at an annual rate of 10.0% thereafter, in each case, payable in cash or, subject to certain conditions, common stock, at the Companys option. Accrued dividends totaled approximately $32,500 at December 31, 2014. Each share of Series B Preferred Stock is entitled to a number of votes equal to the number of shares of common stock into which the Series B Preferred Stock is convertible. As long as shares of the Series B Preferred Stock are outstanding, and until the receipt of certain approvals from the U.S. Food and Drug Administration and the achievement by the Company of specified average trading prices and volumes for the common stock, the Company may not incur indebtedness for borrowed money secured by the Companys intellectual property or in excess of $2.0 million without the prior consent of the holders of two-thirds of the outstanding shares of Series B Preferred Stock. The Company may redeem the Series B Preferred Stock after the second anniversary of issuance, subject to certain conditions. Upon the Companys liquidation or sale to or merger with another corporation, each share of Series B Preferred Stock will be entitled to a liquidation preference of $1,000 per share, plus any accrued but unpaid dividends. The Series B Preferred Stock was issued with Tranche A warrants to purchase 1,858,089 shares of common stock and Tranche B warrants purchasing 1,858,088 shares of common stock, both at an exercise price of $1.08 per share. Pursuant to the terms of the Tranche B warrants, their exercise price will be reduced, and the number of shares of common stock into which those warrants are exercisable will be increased, if the Company issues shares at a price below the then-current exercise price. The exercise price of Tranche B warrants is currently $0.15 per share, convertible into 13,196,019 shares of common stock. As a result of these provisions, the Company is required to account for the warrants as a liability recorded at fair value each period. The Company values the warrants using a Monte Carlo Simulation model. Of the $2.6 million in proceeds from issuance of the Series B Preferred Stock, the Company originally allocated $873,000 to the fair value of the warrants. At December 31, 2014, the fair value of these warrants was approximately $1.5 million. Stock Options Under the Companys 1995 Stock Plan (the Plan), a total of 6,314,824 shares remained available at December 31, 2014 and 6,940,395 shares were subject to stock options outstanding as of that date, bringing the total number of shares subject to stock options outstanding and those remaining available for issue to 13,255,219 shares of common stock as of December 31, 2014. The Plan allows the issuance of incentive stock options, nonqualified stock options, and stock purchase rights. The exercise price of options is determined by the Companys board of directors, but incentive stock options must be granted at an exercise price equal to the fair market value of the Companys common stock as of the grant date. Options historically granted have generally become exercisable over four years and expire ten years from the date of grant. The fair value of stock options granted in 2014 and 2013 were estimated using the Black-Scholes option pricing model. A summary of the assumptions used in determining the fair value of options follows: 2014 2013 Expected volatility 157.70 % 174.00 % Expected option life in years 9.98 10.00 Expected dividend yield 0.00 % 0.00 % Risk-free interest rate 2.55 % 1.87 % Weighted average fair value per option at grant date $ 0.40 $ 0.69 Application of the Black-Scholes option pricing model involves assumptions that are judgmental and affect compensation expense. Historical information is the primary basis for the selection of expected volatility, expected option life and expected dividend yield. Expected volatility is based on the most recent historical period equal to the expected life of the option. The risk-free interest rate is based on yields of U.S. Treasury zero-coupon issues with a term equal to the expected life of the option on the date the stock options were granted. Stock option activity for each of the two years ended December 31 is as follows: 2014 2013 Weighted Average Exercise Weighted Average Exercise Shares Price Shares Price Outstanding at beginning of year 6,531,192 $ 0.68 6,463,206 $ 0.67 Options granted 754,761 $ 0.40 977,276 $ 0.50 Options exercised (242,439 ) $ 0.32 (580,540 ) $ 0.31 Options expired/forfeited (103,119 ) $ 0.68 (328,750 ) $ 1.15 Outstanding at end of year 6,940,395 $ 0.66 6,531,192 $ 0.66 Options vested and exercisable at year-end 5,988,119 $ 0.66 5,463,963 $ 0.58 Options available for grant at year-end 6,314,824 6,724,027 Aggregate intrinsic value options exercised $ 49,675 $ 236,059 Aggregate intrinsic value options outstanding $ 494,119 $ 625,412 Aggregate intrinsic value options vested and exercisable $ 612,946 $ 612,946 Options unvested, balance at beginning of year (1) 1,067,229 $ 1.12 1,819,087 $ 1.18 Options granted (1) 754,761 $ 0.40 977,276 $ 0.50 Vested (1) (766,595 ) $ 0.66 (1,582,034 ) $ 0.80 Cancelled/Forfeited (103,119 ) $ 0.68 (147,100 $ 1.22 Balance, end of period (1) 952,276 1,067,229 $ 1.12 __________________ (1) Includes awards not captured in valuation fragments The Company estimates the fair value of stock options using a Black-Scholes valuation model. Key input assumptions used to estimate the fair value of stock options include the expected term, expected volatility of the Companys common stock, the risk free interest rate, option forfeiture rates, and dividends, if any. The expected term of the options is based upon the historical term until exercise or expiration of all granted options. The expected volatility is derived from the historical volatility of the Companys stock on the OTCBB market for a period that matches the expected term of the option. The risk-free interest rate is the constant maturity rate published by the U.S. Federal Reserve Board that corresponds to the expected term of the option. Warrants In November 2013, the Company completed a warrant exchange program, pursuant to which it exchanged warrants exercisable for a total of 3,560,869 shares of common stock, or 99% of the warrants eligible to participate. These exchanges resulted in a deemed dividend of approximately $537,000, reflected as a non-cash disclosure in this financial statement of cash flows. The following table summarizes transactions involving the Companys outstanding warrants to purchase common stock for the year ended December 31, 2014: Warrants (Underlying Shares) Outstanding, January 1, 2014 11,258,939 Issuances 19,238,727 Canceled / Expired (501,512 ) Exercised (200,000 ) Outstanding, December 31, 2014 29,796,154 The Company had the following shares reserved for the warrants as of December 31, 2014: Warrants (Underlying Shares) Exercise Price Expiration Date 3,590,522 (1) $0.8000 per share March 1, 2015 6,790 (2) $1.0100 per share September 10, 2015 439,883 (3) $0.6800 per share March 31, 2016 285,186 (4) $1.0500 per share November 20, 2016 1,858,089 (5) $1.0800 per share May 23, 2018 13,196,103 (5)(6) $0.1498 per share May 23, 2018 200,000 (7) $0.5000 per share April 23, 2019 561,798 (7) $0.4500 per share May 22, 2019 184,211 (8) $0.3800 per share September 10, 2019 325,521 (9) $0.4601 per share September 27, 2019 8,392,707 (10) $0.2250 per share December 2, 2019 755,344 (11) $0.2812 per share December 2, 2019 (1) Consists of outstanding warrants issued in conjunction with a June 2012 warrant exchange program. (2) Consists of outstanding warrants issued in conjunction with a September 2010 private placement. (3) Consists of outstanding warrants issued in conjunction with a buy-back of a minority interest in Interscan in December 2012, which were issued in February 2014. (4) Consists of outstanding warrants issued in conjunction with a November 2011 private placement. (5) Consists of outstanding warrants issued in conjunction with a May 2013 private placement. (6) Underlying shares increased from 1,858,089 to 9,138,141, and per share exercise price decreased from $1.08 to $0.2196, pursuant to the anti-dilution provisions in the warrants, as a result of conversions of the senior convertible notes. (7) Consists of warrants issued to the placement agent in connection with the private placement of our senior convertible notes. (8) Consists of outstanding warrants issued to a placement agent in conjunction with the secured note offering. (9) Consists of outstanding warrants issued in conjunction with the Regulation S offering. (10) Consists of outstanding warrants issued in conjunction with the 2014 public offering. (11) Consists of outstanding warrants issued to the Placement Agent in conjunction with the 2014 public offering. |
5. STOCK OPTIONS
5. STOCK OPTIONS | 3 Months Ended |
Mar. 31, 2015 | |
Notes to Financial Statements | |
5. STOCK OPTIONS | Under the Companys 1995 Stock Plan (the Plan), a total of 6,509,411 shares remained available at March 31, 2015 6,745,808 shares were subject to stock options outstanding as of that date, bringing the total number of shares subject to stock options outstanding and those remaining available for issue to 13,255,219 shares of common stock as of March 31, 2015. The Plan allows the issuance of incentive stock options, nonqualified stock options, and stock purchase rights. The exercise price of options is determined by the Companys board of directors, but incentive stock options must be granted at an exercise price equal to the fair market value of the Companys common stock as of the grant date. Options historically granted have generally become exercisable over four years and expire ten years from the date of grant. A summary of the Companys activity under the Plan as of March 31, 2015 and changes during the three months then ended is as follows: Shares Weighted average exercise price Weighted average remaining contractual (years) Aggregate intrinsic value (thousands) Outstanding, January 1, 2015 6,940,395 $ 0.66 6.97 $ 625,412 Granted 1,000 0.19 Exercised / Expired (195,587 ) 0.49 Outstanding, March 31, 2015 6,745,808 $ 0.66 5.34 $ 56,830 Vested and exercisable, March 31, 2015 5,929,916 $ 0.67 4.92 $ 56,830 The Company estimates the fair value of stock options using a Black-Scholes valuation model. Key input assumptions used to estimate the fair value of stock options include the expected term, expected volatility of the Companys common stock, the risk free interest rate, option forfeiture rates, and dividends, if any. The expected term of the options is based upon the historical term until exercise or expiration of all granted options. The expected volatility is derived from the historical volatility of the Companys stock on the OTCBB market for a period that matches the expected term of the option. The risk-free interest rate is the constant maturity rate published by the U.S. Federal Reserve Board that corresponds to the expected term of the option. |
5a. Income Taxes
5a. Income Taxes | 12 Months Ended |
Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |
5. Income Taxes | The Company has incurred net operating losses (NOLs) since inception. As of December 31, 2014, the Company had NOL carryforwards available through 2034 of approximately $68.4 million to offset its future income tax liability. The NOL carryforwards began to expire in 2008. The Company has recorded a valuation allowance for all deferred tax assets related to the NOLs. Utilization of existing NOL carry forwards may be limited in future years based on significant ownership changes. The Company is in the process of analyzing its NOLs and has not determined if it is subject to any restrictions in the Internal Revenue Code that could limit the future use of NOL. Components of deferred taxes are as follows at December 31 (in thousands): 2014 2013 Deferred tax assets: Net operating loss carry forwards $ 466 $ 287 Deferred tax liabilities: Intangible assets and other 25,994 22,737 26,460 23,025 Valuation allowance (26,460 ) (23,025 ) $ 0 $ 0 The following is a summary of the items that caused recorded income taxes to differ from taxes computed using the statutory federal income tax rate for the years ended December 31: 2014 2013 Statutory federal tax rate 34 % 34 % State taxes, net of federal benefit 4 4 Nondeductible expenses Valuation allowance (38 ) (38 ) 0 % 0 % |
6. LITIGATION AND CLAIMS
6. LITIGATION AND CLAIMS | 3 Months Ended |
Mar. 31, 2015 | |
Notes to Financial Statements | |
6. LITIGATION AND CLAIMS | From time to time, the Company may be involved in various legal proceedings and claims arising in the ordinary course of business. Management believes that the dispositions of these matters, individually or in the aggregate, are not expected to have a material adverse effect on the Companys financial condition. However, depending on the amount and timing of such disposition, an unfavorable resolution of some or all of these matters could materially affect the future results of operations or cash flows in a particular period. As of March 31, 2015 and December 31, 2014, there was no accrual recorded for any potential losses related to pending litigation. |
6a. Commitments and Contingenci
6a. Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | |
6. Commitments and Contingencies | Operating Leases In December 2009, the Company moved its offices, which comprise its administrative, research and development, marketing and production facilities to 5835 Peachtree Corners East, Suite D, Norcross, Georgia 30092. The Company leases approximately 23,000 square feet under a lease that expires in June 2017. The fixed monthly lease expense is approximately $15,000 plus common charges. The Company also leases office and equipment under operating lease agreements with monthly payments of approximately $2,000. These leases expire at various dates through April 2016. Future minimum rental payments at December 31, 2014 under non-cancellable operating leases for office space and equipment are as follows (in thousands): Year Amount (,000) 2015 $ 211 2016 201 2017 98 Total $ 510 Rental expense was approximately $170, 000 in 2014 and 2013. Litigation and Claims For the years ended December 31, 2014 and 2013, there was no accrual needed for any potential losses related to pending litigation. Contracts In February 2013, the Company replaced its existing agreements with Konica Minolta with a new agreement, pursuant to which, subject to the payment of a nominal license fee due upon FDA approval, Konica Minolta has granted the Company a five-year, world-wide, non-transferable and non-exclusive right and license to manufacture and to develop a non-invasive esophageal cancer detection product from Konica Minolta and based on the Companys biophotonic technology platform. The license permits the Company to use certain related intellectual property of Konica Minolta. In return for the license, the Company has agreed to pay Konica Minolta a royalty for each licensed product the Company sells. |
7. NOTES PAYABLE
7. NOTES PAYABLE | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
Debt Disclosure [Abstract] | |||
7. NOTES PAYABLE | Short Term Notes Payable At March 31, 2015 and December 31, 2014, the Company maintained notes payable and accrued interest to related parties totaling $638,000 and $609,000, respectively. These notes are short term, straight-line amortizing notes. The notes carry an annual interest rate of between 5% and 10%. At March 31, 2015, the Company maintained a note payable to Premium Assignment Corporation, an insurance premium financing company, of approximately $100,000. This note is 10 month straight-line amortizing loan dated June 24, 2014. The note carries annual interest of 4.6%. The balance due to on the Premium Assignment note was approximately $9,500 and $37,000 at March 31, 2015 and December 31, 2014, respectively. On September 10, 2014, the Company sold a secured promissory note to Tonaquint, Inc., with an initial principal amount of $1,275,000, for a purchase price of $700,000 (an original issue discount of $560,000). The Company may prepay the note at any time. The note is secured by the Companys current and future accounts receivable and inventory, pursuant to a security agreement entered into in connection with the sale. On March 10, 2015, the Company amended the terms of the note to extend the maturity until May 10, 2015. During the extension, interest accrues on the note at a rate of the lesser of 18% per year or the maximum rate permitted by applicable law. Pursuant to the terms of the amended note, on March 19, 2015, Tonaquint converted $50,000 of the outstanding balance into 358,680 shares of common stock. On April 10, 2015, Tonaquint elected to convert an additional $50,000 of the outstanding balance into shares of common stock, but the Company exercised its right to deliver cash in lieu of shares. On April 22, 2015, Tonaquint converted an additional $50,000 of the outstanding balance into 478,240 shares of common stock. On May 4, 2015, the Company further amended the terms to extend the maturity until July 10, 2015 and, as a result, Tonaquint has the right to convert an additional $150,000 of the outstanding balance into shares of common stock. See Note 10, Subsequent Events. In connection with the offering, the Company issued its placement agent warrants exercisable for 184,211 shares at $0.38 per share, with an expiration date of September 10, 2019. Total debt issuance cost capitalized was approximately $130,000. This amount was being amortized over six months and is fully amortized as of March 31, 2015. Total amortized expense for the three months ended March 31, 2015 was approximately $49,000. For the three months ended March 31, 2015, the Company recorded amortization of approximately $213,000 on the discount. The original issue discount of $560,000 is fully amortized as of March 31, 2015. Notes Payable At March 31, 2015, the Company maintained notes payable and accrued interest to related parties totaling approximately $414,000. Those notes are short-term, straight line amortizing notes. The notes carry interest rates between 5% and 10%. At March 31, 2015, the Company maintained a note payable totaling approximately $165,000 of principal and accrued interest. The note accrues interest at 9% with a 16% default rate, requires monthly payments of $10,000, and matures November 2015. As of March 31, 2015 the note is accruing interest at the default rate. | On April 23, 2014, the Company entered into a securities purchase agreement with Magna Equities II, LLC (formerly Hanover Holdings I, LLC), an affiliate of Magna Group (Magna), pursuant to which the Company sold Magna a 6% senior convertible note with an initial principal amount of $1.5 million and an 18-month term, for a purchase price of $1.0 million (an approximately 33.3% original issue discount). Additionally, pursuant to the purchase agreement, on May 23, 2014 Magna purchased an additional senior convertible note with an initial principal amount of $2.0 million and an 18-month term, for a fixed purchase price of $2.0 million. Subject to certain limitations, the remaining convertible note is convertible at any time, in whole or in part, at Magnas option, into shares of the Companys common stock, at a conversion price equal to the lesser of $0.55 per share and a 25% discount from the lowest daily volume-weighted average price of the Companys common stock in the five trading days prior to conversion. At no time will Magna be entitled to convert any portion of the convertible note to the extent that after such conversion, Magna (together with its affiliates) would beneficially own more than 9.99% of the outstanding shares of the Companys common stock as of such date. As long as Magna or its affiliates beneficially own any of the shares issued upon conversion, they may not engage in any short sale transactions in the Companys common stock and may not sell more than the greater of $15,000 or 15% of the trading volume of the common stock in any single trading day. As of March 31, 2015 and December 31, 2014, the outstanding balance was $785,000 and $783,000, respectively. The convertible note includes customary event of default provisions and a default interest rate of 16%. Upon the occurrence of an event of default, Magna may require the Company to pay in cash the Event of Default Redemption Price, which is defined as the greater of (i) the product of (A) the amount to be redeemed multiplied by (B) 135% (or 100% if an insolvency related event of default) and (ii) the product of (X) the conversion price in effect at that time multiplied by (Y) the product of (1) 135% (or 100% if an insolvency related event of default) multiplied by (2) the greatest closing sale price of the common stock on any trading day during the period commencing on the date immediately preceding such event of default and ending on the date the Company makes the entire payment required to be made under this provision. The Company paid to Magna a commitment fee for entering into the purchase agreement in the form of 321,820 shares of common stock. The Company also paid $50,000 of attorneys fees and expenses incurred by Magna in connection with the transaction. Total debt issuance costs incurred on the Senior Convertible Note was approximately $844,000. This amount is being amortized over 18 months. Total amortization expense for the period ended was approximately $141,000. In connection with the sale of the convertible notes, the Company issued its placement agent warrants exercisable for 200,000 shares of common stock at $0.50 per share with an expiration date of April 23, 2019, and warrants exercisable for 561,798 shares of common stock at $0.45 per share with an expiration date of May 22, 2019. As of March 31, 2015, the Company had issued a total of 2,783,959 shares of common stock in conjunction with conversions of the convertible notes. Subsequent to March 31, 2015, the Company issued 4,720,883 additional shares of common stock, in conjunction with conversions of the convertible notes (See Note 10 Subsequent Events). | Short Term Notes Payable At December 31, 2014, the Company maintained notes payable and accrued interest to related parties totaling $609,000. These notes are short term, straight-line amortizing notes. The notes carry an annual interest rate of between 5% and 10%. At December 31, 2014, the Company maintained a note payable to Premium Assignment Corporation, an insurance premium financing company, of approximately $100,000. This note is 10 month straight-line amortizing loan dated June 24, 2014. The note carries annual interest of 4.6%. The balance due to on the Premium Assignment note was approximately $37,000 at December 31, 2014. On September 10, 2014, the Company entered into a note purchase agreement with Tonaquint, Inc., pursuant to which the Company sold a secured promissory note to Tonaquint with an initial principal amount of $1,275,000, for a purchase price of $700,000 (an original issue discount of $560,000). The Company may prepay the note at any time. The note is secured by the Companys current and future accounts receivable and inventory, pursuant to a security agreement entered into in connection with the note purchase agreement. On March 10, 2015, the Company amended the note to extend the maturity until May 10, 2015. See Note 12, Subsequent Events. In connection with the offering, the Company issued its placement agent warrants exercisable for 184,211 shares at $0.38 per share, with an expiration date of September 10, 2019. Total debt issuance cost capitalized was approximately $130,000. This amount is being amortized over six months. Total amortized expense for the year ended December 31, 2014 was approximately $81,000. For the year ended December 31, 2014, the Company recorded amortization of approximately $347,000 on the discount. Notes Payable At December 31, 2012, the Company was past due on two short-term notes totaling approximately $419,000 of principal and accrued interest. Interest charged on these notes prior to amendment ranged between 15-18%. On February 27, 2013, the Company renegotiated one of the two past due notes. The new note accrued interest at 6% and was paid in full during the quarter ended June 30, 2013. On April 16, 2013, the Company renegotiated the other note. The renegotiated note accrues interest at 9.0%, with a 16.0% default rate, requires monthly payments of $10,000, including interest, and matures November 2015. The balance due on this note was approximately $159,000 and $208,000 at December 31, 2014 and 2013, respectively. As of December 31, 2014, the note is accruing interest at the default rate, of which principal and interest of $130,000 is payable during the year ending December 31, 2015 and $29,000 is payable during the year ending December 31, 2016. Convertible debt On April 23, 2014, the Company entered into a securities purchase agreement (the Purchase Agreement), with Magna Equities II, LLC (formerly Hanover Holdings I, LLC), an affiliate of Magna Group (Magna). Pursuant to the Purchase Agreement, the Company sold Magna a 6% senior convertible note with an initial principal amount of $1.5 million and an 18-month term (the Initial Convertible Note), for a purchase price of $1.0 million (an approximately 33.3% original issue discount). Additionally, pursuant to the Purchase Agreement, on May 23, 2014 Magna purchased an additional senior convertible note with an initial principal amount of $2.0 million and an 18-month term (the Additional Convertible Note and, with the Initial Convertible Note, (the Convertible Notes), for a fixed purchase price of $2.0 million. Pursuant to the terms of the Initial Convertible Note, $500,000 of the outstanding principal amount (together with any accrued and unpaid interest with respect to such portion) was automatically extinguished (without any cash payment by the Company) upon satisfaction of certain conditions. Subject to certain limitations, the Convertible Notes are convertible at any time, in whole or in part, at Magnas option, into shares of the Companys common stock, at a conversion price equal to the lesser of $0.55 per share and a discount from the lowest daily volume-weighted average price of the Companys common stock in the five trading days prior to conversion. Beginning December 19, 2014, the discount is 25%. At no time will Magna be entitled to convert any portion of the Convertible Notes to the extent that after such conversion, Magna (together with its affiliates) would beneficially own more than 9.99% of the outstanding shares of the Companys common stock as of such date. As long as Magna or its affiliates beneficially own any of the shares issued upon conversion, they may not engage in any short sale transactions in the Companys common stock and may not sell more than the greater of $15,000 or 15% of the trading volume of the common stock in any single trading day. The Convertible Notes include customary event of default provisions and a default interest rate of 16%. Upon the occurrence of an event of default, Magna may require the Company to pay in cash the Event of Default Redemption Price, which is defined in the Convertible Notes to mean the greater of (i) the product of (A) the amount to be redeemed multiplied by (B) 135% (or 100% if an insolvency related event of default) and (ii) the product of (X) the conversion price in effect at that time multiplied by (Y) the product of (1) 135% (or 100% if an insolvency related event of default) multiplied by (2) the greatest closing sale price of the common stock on any trading day during the period commencing on the date immediately preceding such event of default and ending on the date the Company makes the entire payment required to be made under this provision. The Company paid to Magna a commitment fee for entering into the Purchase Agreement in the form of 321,820 shares of common stock. The Company also paid $50,000 of attorneys fees and expenses incurred by Magna in connection with the transaction. Total debt issuance costs incurred on the Senior Convertible Note was approximately $844,000. This amount is being amortized over 18 months. Total amortization expense for the year ended was approximately $328,000. In connection with the sale of the Convertible Notes, the Company issued its placement agent warrants exercisable for 200,000 shares of common stock at $0.50 per share with an expiration date of April 23, 2019, and warrants exercisable for 561,798 shares of common stock at $0.45 per share with an expiration date of May 22, 2019. As of December 31, 2014, the Company had issued a total of 2,783,959 shares of common stock, in conjunction with conversions of the Convertible Notes. Loss on Extinguishment of Debt As part of our public offering of sale of common stock, consummated on December 2, 2014, the Company repaid approximately $1.4 of debt via the issuance of 7,700,504 shares of common stock and warrants to purchase an additional 3,850,252 shares at an exercise price of $0.225 per share, expiring in December 2, 2019. Pursuant to the convertible note agreement, the Company had to pay a prepayment penalty of 25% of the amount prepaid. The penalty on the transaction was approximately $325,000 and was charged to loss on extinguishment of debt on the statement of operations for the year ended December 31, 2014. |
7a. License and Technology Agre
7a. License and Technology Agreements | 12 Months Ended |
Dec. 31, 2014 | |
Notes to Financial Statements | |
7. License and Technology Agreements | As part of the Companys efforts to conduct research and development activities and to commercialize potential products, the Company, from time to time, enters into agreements with certain organizations and individuals that further those efforts but also obligate the Company to make future minimum payments or to remit royalties ranging from 1% to 3% of revenue from the sale of commercial products developed from the research. The Company generally is required to make minimum royalty payments for the exclusive license to develop certain technology. |
8. CONVERTIBLE DEBT
8. CONVERTIBLE DEBT | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | |
Convertible Debt | |||
8. CONVERTIBLE DEBT | Short Term Notes Payable At March 31, 2015 and December 31, 2014, the Company maintained notes payable and accrued interest to related parties totaling $638,000 and $609,000, respectively. These notes are short term, straight-line amortizing notes. The notes carry an annual interest rate of between 5% and 10%. At March 31, 2015, the Company maintained a note payable to Premium Assignment Corporation, an insurance premium financing company, of approximately $100,000. This note is 10 month straight-line amortizing loan dated June 24, 2014. The note carries annual interest of 4.6%. The balance due to on the Premium Assignment note was approximately $9,500 and $37,000 at March 31, 2015 and December 31, 2014, respectively. On September 10, 2014, the Company sold a secured promissory note to Tonaquint, Inc., with an initial principal amount of $1,275,000, for a purchase price of $700,000 (an original issue discount of $560,000). The Company may prepay the note at any time. The note is secured by the Companys current and future accounts receivable and inventory, pursuant to a security agreement entered into in connection with the sale. On March 10, 2015, the Company amended the terms of the note to extend the maturity until May 10, 2015. During the extension, interest accrues on the note at a rate of the lesser of 18% per year or the maximum rate permitted by applicable law. Pursuant to the terms of the amended note, on March 19, 2015, Tonaquint converted $50,000 of the outstanding balance into 358,680 shares of common stock. On April 10, 2015, Tonaquint elected to convert an additional $50,000 of the outstanding balance into shares of common stock, but the Company exercised its right to deliver cash in lieu of shares. On April 22, 2015, Tonaquint converted an additional $50,000 of the outstanding balance into 478,240 shares of common stock. On May 4, 2015, the Company further amended the terms to extend the maturity until July 10, 2015 and, as a result, Tonaquint has the right to convert an additional $150,000 of the outstanding balance into shares of common stock. See Note 10, Subsequent Events. In connection with the offering, the Company issued its placement agent warrants exercisable for 184,211 shares at $0.38 per share, with an expiration date of September 10, 2019. Total debt issuance cost capitalized was approximately $130,000. This amount was being amortized over six months and is fully amortized as of March 31, 2015. Total amortized expense for the three months ended March 31, 2015 was approximately $49,000. For the three months ended March 31, 2015, the Company recorded amortization of approximately $213,000 on the discount. The original issue discount of $560,000 is fully amortized as of March 31, 2015. Notes Payable At March 31, 2015, the Company maintained notes payable and accrued interest to related parties totaling approximately $414,000. Those notes are short-term, straight line amortizing notes. The notes carry interest rates between 5% and 10%. At March 31, 2015, the Company maintained a note payable totaling approximately $165,000 of principal and accrued interest. The note accrues interest at 9% with a 16% default rate, requires monthly payments of $10,000, and matures November 2015. As of March 31, 2015 the note is accruing interest at the default rate. | On April 23, 2014, the Company entered into a securities purchase agreement with Magna Equities II, LLC (formerly Hanover Holdings I, LLC), an affiliate of Magna Group (Magna), pursuant to which the Company sold Magna a 6% senior convertible note with an initial principal amount of $1.5 million and an 18-month term, for a purchase price of $1.0 million (an approximately 33.3% original issue discount). Additionally, pursuant to the purchase agreement, on May 23, 2014 Magna purchased an additional senior convertible note with an initial principal amount of $2.0 million and an 18-month term, for a fixed purchase price of $2.0 million. Subject to certain limitations, the remaining convertible note is convertible at any time, in whole or in part, at Magnas option, into shares of the Companys common stock, at a conversion price equal to the lesser of $0.55 per share and a 25% discount from the lowest daily volume-weighted average price of the Companys common stock in the five trading days prior to conversion. At no time will Magna be entitled to convert any portion of the convertible note to the extent that after such conversion, Magna (together with its affiliates) would beneficially own more than 9.99% of the outstanding shares of the Companys common stock as of such date. As long as Magna or its affiliates beneficially own any of the shares issued upon conversion, they may not engage in any short sale transactions in the Companys common stock and may not sell more than the greater of $15,000 or 15% of the trading volume of the common stock in any single trading day. As of March 31, 2015 and December 31, 2014, the outstanding balance was $785,000 and $783,000, respectively. The convertible note includes customary event of default provisions and a default interest rate of 16%. Upon the occurrence of an event of default, Magna may require the Company to pay in cash the Event of Default Redemption Price, which is defined as the greater of (i) the product of (A) the amount to be redeemed multiplied by (B) 135% (or 100% if an insolvency related event of default) and (ii) the product of (X) the conversion price in effect at that time multiplied by (Y) the product of (1) 135% (or 100% if an insolvency related event of default) multiplied by (2) the greatest closing sale price of the common stock on any trading day during the period commencing on the date immediately preceding such event of default and ending on the date the Company makes the entire payment required to be made under this provision. The Company paid to Magna a commitment fee for entering into the purchase agreement in the form of 321,820 shares of common stock. The Company also paid $50,000 of attorneys fees and expenses incurred by Magna in connection with the transaction. Total debt issuance costs incurred on the Senior Convertible Note was approximately $844,000. This amount is being amortized over 18 months. Total amortization expense for the period ended was approximately $141,000. In connection with the sale of the convertible notes, the Company issued its placement agent warrants exercisable for 200,000 shares of common stock at $0.50 per share with an expiration date of April 23, 2019, and warrants exercisable for 561,798 shares of common stock at $0.45 per share with an expiration date of May 22, 2019. As of March 31, 2015, the Company had issued a total of 2,783,959 shares of common stock in conjunction with conversions of the convertible notes. Subsequent to March 31, 2015, the Company issued 4,720,883 additional shares of common stock, in conjunction with conversions of the convertible notes (See Note 10 Subsequent Events). | Short Term Notes Payable At December 31, 2014, the Company maintained notes payable and accrued interest to related parties totaling $609,000. These notes are short term, straight-line amortizing notes. The notes carry an annual interest rate of between 5% and 10%. At December 31, 2014, the Company maintained a note payable to Premium Assignment Corporation, an insurance premium financing company, of approximately $100,000. This note is 10 month straight-line amortizing loan dated June 24, 2014. The note carries annual interest of 4.6%. The balance due to on the Premium Assignment note was approximately $37,000 at December 31, 2014. On September 10, 2014, the Company entered into a note purchase agreement with Tonaquint, Inc., pursuant to which the Company sold a secured promissory note to Tonaquint with an initial principal amount of $1,275,000, for a purchase price of $700,000 (an original issue discount of $560,000). The Company may prepay the note at any time. The note is secured by the Companys current and future accounts receivable and inventory, pursuant to a security agreement entered into in connection with the note purchase agreement. On March 10, 2015, the Company amended the note to extend the maturity until May 10, 2015. See Note 12, Subsequent Events. In connection with the offering, the Company issued its placement agent warrants exercisable for 184,211 shares at $0.38 per share, with an expiration date of September 10, 2019. Total debt issuance cost capitalized was approximately $130,000. This amount is being amortized over six months. Total amortized expense for the year ended December 31, 2014 was approximately $81,000. For the year ended December 31, 2014, the Company recorded amortization of approximately $347,000 on the discount. Notes Payable At December 31, 2012, the Company was past due on two short-term notes totaling approximately $419,000 of principal and accrued interest. Interest charged on these notes prior to amendment ranged between 15-18%. On February 27, 2013, the Company renegotiated one of the two past due notes. The new note accrued interest at 6% and was paid in full during the quarter ended June 30, 2013. On April 16, 2013, the Company renegotiated the other note. The renegotiated note accrues interest at 9.0%, with a 16.0% default rate, requires monthly payments of $10,000, including interest, and matures November 2015. The balance due on this note was approximately $159,000 and $208,000 at December 31, 2014 and 2013, respectively. As of December 31, 2014, the note is accruing interest at the default rate, of which principal and interest of $130,000 is payable during the year ending December 31, 2015 and $29,000 is payable during the year ending December 31, 2016. Convertible debt On April 23, 2014, the Company entered into a securities purchase agreement (the Purchase Agreement), with Magna Equities II, LLC (formerly Hanover Holdings I, LLC), an affiliate of Magna Group (Magna). Pursuant to the Purchase Agreement, the Company sold Magna a 6% senior convertible note with an initial principal amount of $1.5 million and an 18-month term (the Initial Convertible Note), for a purchase price of $1.0 million (an approximately 33.3% original issue discount). Additionally, pursuant to the Purchase Agreement, on May 23, 2014 Magna purchased an additional senior convertible note with an initial principal amount of $2.0 million and an 18-month term (the Additional Convertible Note and, with the Initial Convertible Note, (the Convertible Notes), for a fixed purchase price of $2.0 million. Pursuant to the terms of the Initial Convertible Note, $500,000 of the outstanding principal amount (together with any accrued and unpaid interest with respect to such portion) was automatically extinguished (without any cash payment by the Company) upon satisfaction of certain conditions. Subject to certain limitations, the Convertible Notes are convertible at any time, in whole or in part, at Magnas option, into shares of the Companys common stock, at a conversion price equal to the lesser of $0.55 per share and a discount from the lowest daily volume-weighted average price of the Companys common stock in the five trading days prior to conversion. Beginning December 19, 2014, the discount is 25%. At no time will Magna be entitled to convert any portion of the Convertible Notes to the extent that after such conversion, Magna (together with its affiliates) would beneficially own more than 9.99% of the outstanding shares of the Companys common stock as of such date. As long as Magna or its affiliates beneficially own any of the shares issued upon conversion, they may not engage in any short sale transactions in the Companys common stock and may not sell more than the greater of $15,000 or 15% of the trading volume of the common stock in any single trading day. The Convertible Notes include customary event of default provisions and a default interest rate of 16%. Upon the occurrence of an event of default, Magna may require the Company to pay in cash the Event of Default Redemption Price, which is defined in the Convertible Notes to mean the greater of (i) the product of (A) the amount to be redeemed multiplied by (B) 135% (or 100% if an insolvency related event of default) and (ii) the product of (X) the conversion price in effect at that time multiplied by (Y) the product of (1) 135% (or 100% if an insolvency related event of default) multiplied by (2) the greatest closing sale price of the common stock on any trading day during the period commencing on the date immediately preceding such event of default and ending on the date the Company makes the entire payment required to be made under this provision. The Company paid to Magna a commitment fee for entering into the Purchase Agreement in the form of 321,820 shares of common stock. The Company also paid $50,000 of attorneys fees and expenses incurred by Magna in connection with the transaction. Total debt issuance costs incurred on the Senior Convertible Note was approximately $844,000. This amount is being amortized over 18 months. Total amortization expense for the year ended was approximately $328,000. In connection with the sale of the Convertible Notes, the Company issued its placement agent warrants exercisable for 200,000 shares of common stock at $0.50 per share with an expiration date of April 23, 2019, and warrants exercisable for 561,798 shares of common stock at $0.45 per share with an expiration date of May 22, 2019. As of December 31, 2014, the Company had issued a total of 2,783,959 shares of common stock, in conjunction with conversions of the Convertible Notes. Loss on Extinguishment of Debt As part of our public offering of sale of common stock, consummated on December 2, 2014, the Company repaid approximately $1.4 of debt via the issuance of 7,700,504 shares of common stock and warrants to purchase an additional 3,850,252 shares at an exercise price of $0.225 per share, expiring in December 2, 2019. Pursuant to the convertible note agreement, the Company had to pay a prepayment penalty of 25% of the amount prepaid. The penalty on the transaction was approximately $325,000 and was charged to loss on extinguishment of debt on the statement of operations for the year ended December 31, 2014. |
9. LOSS PER COMMON SHARE
9. LOSS PER COMMON SHARE | 3 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Dec. 31, 2014 | |
Earnings Per Share [Abstract] | ||
9. LOSS PER COMMON SHARE | On April 23, 2014, the Company entered into a securities purchase agreement with Magna Equities II, LLC (formerly Hanover Holdings I, LLC), an affiliate of Magna Group (Magna), pursuant to which the Company sold Magna a 6% senior convertible note with an initial principal amount of $1.5 million and an 18-month term, for a purchase price of $1.0 million (an approximately 33.3% original issue discount). Additionally, pursuant to the purchase agreement, on May 23, 2014 Magna purchased an additional senior convertible note with an initial principal amount of $2.0 million and an 18-month term, for a fixed purchase price of $2.0 million. Subject to certain limitations, the remaining convertible note is convertible at any time, in whole or in part, at Magnas option, into shares of the Companys common stock, at a conversion price equal to the lesser of $0.55 per share and a 25% discount from the lowest daily volume-weighted average price of the Companys common stock in the five trading days prior to conversion. At no time will Magna be entitled to convert any portion of the convertible note to the extent that after such conversion, Magna (together with its affiliates) would beneficially own more than 9.99% of the outstanding shares of the Companys common stock as of such date. As long as Magna or its affiliates beneficially own any of the shares issued upon conversion, they may not engage in any short sale transactions in the Companys common stock and may not sell more than the greater of $15,000 or 15% of the trading volume of the common stock in any single trading day. As of March 31, 2015 and December 31, 2014, the outstanding balance was $785,000 and $783,000, respectively. The convertible note includes customary event of default provisions and a default interest rate of 16%. Upon the occurrence of an event of default, Magna may require the Company to pay in cash the Event of Default Redemption Price, which is defined as the greater of (i) the product of (A) the amount to be redeemed multiplied by (B) 135% (or 100% if an insolvency related event of default) and (ii) the product of (X) the conversion price in effect at that time multiplied by (Y) the product of (1) 135% (or 100% if an insolvency related event of default) multiplied by (2) the greatest closing sale price of the common stock on any trading day during the period commencing on the date immediately preceding such event of default and ending on the date the Company makes the entire payment required to be made under this provision. The Company paid to Magna a commitment fee for entering into the purchase agreement in the form of 321,820 shares of common stock. The Company also paid $50,000 of attorneys fees and expenses incurred by Magna in connection with the transaction. Total debt issuance costs incurred on the Senior Convertible Note was approximately $844,000. This amount is being amortized over 18 months. Total amortization expense for the period ended was approximately $141,000. In connection with the sale of the convertible notes, the Company issued its placement agent warrants exercisable for 200,000 shares of common stock at $0.50 per share with an expiration date of April 23, 2019, and warrants exercisable for 561,798 shares of common stock at $0.45 per share with an expiration date of May 22, 2019. As of March 31, 2015, the Company had issued a total of 2,783,959 shares of common stock in conjunction with conversions of the convertible notes. Subsequent to March 31, 2015, the Company issued 4,720,883 additional shares of common stock, in conjunction with conversions of the convertible notes (See Note 10 Subsequent Events). | Basic net loss per share attributable to common stockholders amounts are computed by dividing the net loss plus preferred stock dividends and deemed dividends on preferred stock by the weighted average number of shares outstanding during the period. |
9a. Related Party Transactions
9a. Related Party Transactions | 12 Months Ended |
Dec. 31, 2014 | |
Related Party Transactions [Abstract] | |
9. Related Party Transactions | At December 31, 2014, the Company maintained notes payable and accrued interest to related parties totaling approximately $609,000. These notes are short term, straight-line amortizing notes. The notes carry an annual interest rate of between 5% and 10%. Our Directors and Officers participated in our public offering dated December 2, 2014 for a total of $182,603 and received 811,571 shares of common stock as well as warrants to purchase an additional 405,786 shares at $0.225, expiring in December 2, 2019. |
10. Valuation and Qualifying Ac
10. Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2014 | |
Valuation and Qualifying Accounts [Abstract] | |
10. Valuation and Qualifying Accounts | Allowance for Doubtful Accounts The Company has the following allowances for doubtful accounts (in thousands): Year Ended December 31, 2014 2013 Beginning balance $ 18 $ 12 Additions / (Adjustments) 58 6 Balance $ 76 $ 18 Inventory Reserves The Company has the following reserves for inventory balance (in thousands): Year Ended December 31, 2014 2013 Beginning balance $ 184 $ 52 Additions / (Adjustments) (40 ) 132 Balance $ 144 $ 184 |
11. SUBSEQUENT EVENTS
11. SUBSEQUENT EVENTS | 3 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Dec. 31, 2014 | |
Subsequent Events [Abstract] | ||
11. SUBSEQUENT EVENTS | During the quarter ended March 31, 2015, we had a subscription agreement to sell an aggregate of 4.0 million shares of our common stock and warrants to purchase an additional 2.0 million shares, for an aggregate purchase price of $720,000 in a private placement. For the quarter ended, we consummated the sale of 2.5 million shares of common stock and warrants to purchase an additional 1.25 million shares, for a total of $450,000. In April, 2015, the remainder of the subscription agreement was consummated and a total of 1.5 million shares of our common stock and warrants to purchase an additional 750,000 shares, for an aggregate purchase price of $270,000. On April 10, 2015, Tonaquint elected to convert an additional $50,000 of the outstanding balance of the Companys secured note into shares of common stock, but the Company exercised its right to deliver cash in lieu of shares. On April 22, 2015, Tonaquint converted an additional $50,000 of the outstanding balance into 478,240 shares of common stock. On May 4, 2015, the Company further amended the terms to extend the maturity until July 10, 2015 and, as a result, Tonaquint has the right to convert an additional $150,000 of the outstanding balance into shares of common stock. On April 21, 2015, the Company issued 4,720,883 shares of common stock, in conjunction with conversion of approximately $493,356 in outstanding principal and accrued interest on the senior convertible note held by Magna, leaving a principal balance of approximately $304,000. Between April 1, 2015 and May 8, 2015, the Company issued 1,250,000 shares of its common stock upon exercise of outstanding warrants at $0.10455 per share, for cash proceeds of approximately $131,000. | Between January 1, 2015 and March 25, 2015, we received approximately $17,000 from the Companys officers as short-term advances. On February 2, 2015, we received $70,000 from an investor as a deposit for the purchase of LuViva devices for exportation. As of March 25, 2015, negotiation of a definitive purchase agreement was on-going. On March 16, 2015 and March 19, 2015, the Company entered into subscription agreements with certain accredited investors, pursuant to which we agreed to sell an aggregate of 4.0 million shares of our common stock and warrants to purchase an additional 2.0 million shares, for an aggregate purchase price of $720,000 in a private placement not involving a public offering under Section 4(a)(2) of the Securities Act. As of March 19, 2015, the Company had consummated $320,000 of the total transaction and we expect to consummate the remainder by the end of the first quarter of 2015. The warrants are immediately exercisable, have an exercise price per share of $0.255 and expire three years from the date of issuance. On March 10, 2015, the Company amended the Tonaquint note to extend the maturity until May 10, 2015. During the extension, interest will accrue on the note at a rate of the lesser of 18% per year or the maximum rate permitted by applicable law. In addition, while the note remains outstanding, Tonaquint will have the right to convert up to $150,000 of the outstanding balance of the note into shares of the Companys common stock, at a conversion price per share equal to the lower of (1) $0.25 and (2) 75% of the lowest daily volume weighted average price per share of the common stock during the five business days prior to conversion. If the conversion price would be lower than $0.15 per share, the Company has the option of delivering the conversion amount in cash in lieu of shares. |
2. SIGNIFICANT ACCOUNTING POL22
2. SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Dec. 31, 2014 | |
Accounting Policies [Abstract] | ||
Use of Estimates | The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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 revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant areas where estimates are used include the allowance for doubtful accounts, inventory valuation and input variables for Black-Scholes, Monte Carlo simulations and Lattice Model calculations. | The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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 revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant areas where estimates are used include the allowance for doubtful accounts, inventory valuation and input variables for Black-Scholes, Monte Carlo simulations and Lattice Model calculations. |
Principles of Consolidation | The accompanying consolidated financial statements include the accounts of Guided Therapeutics, Inc. and its wholly owned subsidiary. | The accompanying consolidated financial statements include the accounts of Guided Therapeutics, Inc. and its wholly owned subsidiary. |
Accounting Standards Updates | Newly effective accounting standards updates and those not effective until after March 31, 2015, are not expected to have a significant effect on the Companys financial position or results of operations. | In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, (ASU 2014-09). ASU 2014-09 outlines a new, single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. This new revenue recognition model provides a five step analysis in determining when and how revenue is recognized. The new model will require revenue recognition to depict the transfer of promised goods or services to customers in an amount that reflects the consideration a company expects to receive in exchange for those goods or services. ASU 2014-09 is effective for reporting periods beginning after December 15, 2016, and early adoption is not permitted. The Company is evaluating the impact that adoption of this guidance will have on the determination or reporting of its financial results. In June 2014, the FASB issued ASU 2014-12, Accounting for Share-Based Payments When the Terms of an Award Provide that a Performance Target Could be Achieved after the Requisite Service Period, (ASU 2014-12). ASU 2014-12 requires that a performance target that affects vesting, and that could be achieved after the requisite service period, be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant date fair value of the award. ASU 2014-12 is effective for the reporting periods beginning after December 15, 2015. Early adoption is permitted. The Company is evaluating the impact that adoption of this guidance will have on the determination or reporting of its financial results. In August 2014, the FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entitys Ability to Continue as a Going Concern, (ASU 2014-15). ASU 2014-15 requires management to perform interim and annual assessments of an entitys ability to continue as a going concern for a one year period subsequent to the date of the financial statements, as entity must provide certain disclosures if conditions or events raise substantial doubt about the entitys ability to continue as a going concern. The guidance is effective for all entities for the first annual period ending after December 15, 2016 and interim periods thereafter, with early adoption permitted. The Company is evaluating the impact that adoption of this guidance will have on the determination or reporting of its financial results. Except as noted above, the guidance issued by the FASB during the current year is not expected to have a material effect on the Companys consolidated financial statements. |
Cash Equivalents | The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be a cash equivalent. | The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be a cash equivalent. |
Concentration of Credit Risk | The Company, from time to time during the years covered by these consolidated financial statements, may have bank balances in excess of its insured limits. Management has deemed this a normal business risk. | The Company, from time to time during the years covered by these consolidated financial statements, may have bank balances in excess of its insured limits. Management has deemed this a normal business risk. The Company performs periodic credit evaluations of its customers financial conditions and generally does not require collateral. The Company reviews all outstanding accounts receivable for collectability on a quarterly basis. An allowance for doubtful accounts is recorded for any amounts deemed uncollectable. The Company does not accrue interest receivable on past due accounts receivable. |
Inventory Valuation | All inventories are stated at lower of cost or market, with cost determined substantially on a first-in, first-out basis. Selling, general, and administrative expenses are not inventoried, but are charged to expense when purchased. At March 31, 2015 and December 31, 2014, our inventories were as follows (in thousands): March 31, December 31, 2015 2014 Raw materials $ 696 $ 884 Work in process 335 304 Finished goods 251 136 Inventory reserve (133 ) (144 ) Total $ 1,149 $ 1,180 | All inventories are stated at lower of cost or market, with cost determined substantially on a first-in, first-out basis. Selling, general, and administrative expenses are not inventoried, but are charged to expense when purchased. At December 31, 2014 and December 31, 2013, our inventories were as follows (in thousands): Year Ended December 31, 2014 2013 Raw materials $ 884 $ 1,013 Work in process 304 268 Finished goods 136 96 Inventory reserve (144 ) (184 ) Total $ 1,180 $ 1,193 |
Debt Issuance Costs | Debt issuance costs incurred in securing the Companys financing arrangements are capitalized and amortized over the term of the debt. Deferred financing costs are included in other long term assets. | Debt issuance costs incurred in securing the Companys financing arrangements are capitalized and amortized over the term of the debt. Deferred financing costs are included in other long term assets. |
Property and equipment | Property and equipment are recorded at cost. Depreciation is computed using the straight-line method over estimated useful lives of three to seven years. Leasehold improvements are depreciated at the shorter of the useful life of the asset or the remaining lease term. Depreciation expense is included in general and administrative expense on the statement of operations. Expenditures for repairs and maintenance are expensed as incurred. Property and equipment are summarized as follows at March 31, 2015 and December 31, 2014 (in thousands): March 31, December 31, 2015 2014 Equipment $ 1,391 $ 1,391 Software 737 737 Furniture and fixtures 124 124 Leasehold Improvement 180 180 2,432 2,432 Less accumulated depreciation (1,917 ) (1,845 ) Total $ 515 $ 587 | Property and equipment are recorded at cost. Depreciation is computed using the straight-line method over estimated useful lives of three to seven years. Leasehold improvements are depreciated at the shorter of the useful life of the asset or the remaining lease term. Depreciation expense is included in general and administrative expense on the statement of operations. Expenditures for repairs and maintenance are expensed as incurred. Property and equipment are summarized as follows at December 31, 2014 and 2013 (in thousands): Year Ended December 31, 2014 2013 Equipment $ 1,391 $ 1,277 Software 737 737 Furniture and fixtures 124 124 Leasehold Improvement 180 189 2,432 2,327 Less accumulated depreciation (1,845 ) (1,407 ) Total $ 587 $ 920 |
Other Assets | Other assets primarily consist of long-term deposits for various tooling projects that are being constructed for the Company. At March 31, 2015 and December 31, 2014, such balances were approximately $72,000. | Other assets primarily consist of long-term deposits for various tooling projects that are being constructed for the Company. At December 31, 2014 and 2013, such balances were approximately $72,000 and $326,000, respectively. |
Accounts Receivable | The Company performs periodic credit evaluations of its customers financial conditions and generally does not require collateral. The Company reviews all outstanding accounts receivable for collectability on a quarterly basis. An allowance for doubtful accounts is recorded for any amounts deemed uncollectable. The Company does not accrue interest receivable on past due accounts receivable. | The Company performs periodic credit evaluations of its customers financial conditions and generally does not require collateral. The Company reviews all outstanding accounts receivable for collectability on a quarterly basis. An allowance for doubtful accounts is recorded for any amounts deemed uncollectable. The Company does not accrue interest receivable on past due accounts receivable. |
Patent Costs (Principally Legal Fees) | Costs incurred in filing, prosecuting, and maintaining patents are recurring, and expensed as incurred. Maintaining patents are expensed as incurred as the Company has not yet received FDA approval and recovery of these costs is uncertain. Such costs aggregated approximately $50,000 and $75,000 in 2014 and 2013, respectively. | |
Accrued Liabilities | Accrued liabilities are summarized as follows at December 31, 2014 and 2013 (in thousands): As of December 31, 2014 2013 Accrued compensation $ 447 $ 426 Accrued professional fees 203 116 Deferred rent 54 68 Accrued warranty 119 58 Accrued vacation 144 Other accrued expenses 48 55 Total $ 1,015 $ 723 | |
Revenue Recognition | Revenue from the sale of the Companys products is recognized upon shipment of such products to its customers. The Company recognizes revenue from contracts on a straight line basis, over the terms of the contract. The Company recognizes revenue from grants based on the grant agreement, at the time the expenses are incurred. | Revenue from the sale of the Companys products is recognized upon shipment of such products to its customers. The Company recognizes revenue from contracts on a straight line basis, over the terms of the contracts. The Company recognizes revenue from grants based on the grant agreements, at the time the expenses are incurred. |
Significant Customers | In 2014 and 2013, the majority of the Companys revenues were from two and three customers, respectively. Revenue from these customers totaled approximately $414,000 or 50% and approximately $653,000 or 65% of total revenue for the year ended December 31, 2014 and 2013, respectively. Accounts receivable due from those customers represents 17% and 27% as of December 31, 2014 and 2013, respectively. | |
Deferred Revenue | The Company defers payments received as revenue until earned based on the related contracts on a straight line basis, over the terms of the contract. | The Company defers payments received as revenue until earned based on the related contracts on a straight line basis, over the terms of the contract. |
Research and Development | Research and development expenses consist of expenditures for research conducted by the Company and payments made under contracts with consultants or other outside parties and costs associated with internal and contracted clinical trials. All research and development costs are expensed as incurred. | |
Income Taxes | The Company accounts for income taxes in accordance with the liability method. Under the liability method, the Company recognizes deferred assets and liabilities based upon anticipated future tax consequences attributable to differences between financial statement carrying amounts of assets and liabilities and their respective tax bases. The Company establishes a valuation allowance to the extent that it is more likely than not that deferred tax assets will not be utilized against future taxable income. As of December 31, 2014, the Company had approximately $68.4 million of net operating loss (NOL) carry forward. There was no provision for income taxes at March 31, 2015. A full valuation allowance has been recorded related to any deferred tax assets created from the NOL. | The Company uses the liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Management provides valuation allowances against the deferred tax assets for amounts that are not considered more likely than not to be realized. |
Uncertain Tax Positions | Effective January 1, 2007 the Company adopted ASC guidance regarding accounting for uncertainty in income taxes. This guidance clarifies the accounting for income taxes by prescribing the minimum recognition threshold an income tax position is required to meet before being recognized in the financial statements and applies to all income tax positions. Each income tax position is assessed using a two-step process. A determination is first made as to whether it is more likely than not that the income tax position will be sustained, based upon technical merits, upon examination by the taxing authorities. If the income tax position is expected to meet the more likely than not criteria, the benefit recorded in the financial statements equals the largest amount that is greater than 50% likely to be realized upon its ultimate settlement. At December 31, 2014 and 2013, there were no uncertain tax positions. The Company is current with its federal and applicable state tax returns filings. Although we have been experiencing recurring losses, we are obligated to file tax returns for compliance with Internal Revenue Service (IRS) regulations and that of applicable state jurisdictions. As of December 31, 2014, the Company has approximately $68.4 million of net operating loss eligible to be carried forward for tax purposes at federal and applicable states level. None of the Companys federal or state income tax returns are currently under examination by the IRS or state authorities. However, fiscal years 2011 and later remain subject to examination by the IRS and applicable states. | |
Stock Option Plan | The Company measures the cost of employees services received in exchange for equity awards, including stock options, based on the grant date fair value of the awards. The cost will be recognized as compensation expense over the vesting period of the awards. | The Company records compensation expense related to options granted to non-employees based on the fair value of the award. Compensation cost is recorded as earned for all unvested stock options outstanding at the beginning of the first year based upon the grant date fair value estimates, and for compensation cost for all share-based payments granted or modified subsequently based on fair value estimates. For the years ended December 31, 2014 and 2013, share-based compensation for options attributable to employees and officers were approximately $886,000 and $824,000, respectively. These amounts have been included in the Companys statements of operations. Compensation costs for stock options which vest over time are recognized over the vesting period. As of December 31, 2014, the Company had approximately $568,000 of unrecognized compensation costs related to granted stock options to be recognized over the remaining vesting period of approximately three years. |
Warrants | The Company has issued warrants, which allow the warrant holder to purchase one share of stock at a specified price for a specified period of time. The Company records equity instruments including warrants issued to non-employees based on the fair value at the date of issue. The fair value of warrants classified as equity instruments at the date of issuance is estimated using the Black-Scholes Model. The fair value of warrants classified as liabilities at the date of issuance is estimated using the Monte Carlo Simulation model. | The Company has issued warrants, which allow the warrant holder to purchase one share of stock at a specified price for a specified period of time. The Company records equity instruments including warrants issued to non-employees based on the fair value at the date of issue. The fair value of warrants classified as equity instruments at the date of issuance is estimated using the Black-Scholes Model. The fair value of warrants classified as liabilities at the date of issuance is estimated using the Monte Carlo Simulation model. |
2. SIGNIFICANT ACCOUNTING POL23
2. SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Dec. 31, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Inventory Valuation | March 31, December 31, 2015 2014 Raw materials $ 696 $ 884 Work in process 335 304 Finished goods 251 136 Inventory reserve (133 ) (144 ) Total $ 1,149 $ 1,180 | Year Ended December 31, 2014 2013 Raw materials $ 884 $ 1,013 Work in process 304 268 Finished goods 136 96 Inventory reserve (144 ) (184 ) Total $ 1,180 $ 1,193 |
Property and Equipment | March 31, December 31, 2015 2014 Equipment $ 1,391 $ 1,391 Software 737 737 Furniture and fixtures 124 124 Leasehold Improvement 180 180 2,432 2,432 Less accumulated depreciation (1,917 ) (1,845 ) Total $ 515 $ 587 | Year Ended December 31, 2014 2013 Equipment $ 1,391 $ 1,277 Software 737 737 Furniture and fixtures 124 124 Leasehold Improvement 180 189 2,432 2,327 Less accumulated depreciation (1,845 ) (1,407 ) Total $ 587 $ 920 |
Accrued Liabilities | As of December 31, 2014 2013 Accrued compensation $ 447 $ 426 Accrued professional fees 203 116 Deferred rent 54 68 Accrued warranty 119 58 Accrued vacation 144 Other accrued expenses 48 55 Total $ 1,015 $ 723 |
3. FAIR VALUE OF FINANCIAL IN24
3. FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Dec. 31, 2014 | |
Investments, All Other Investments [Abstract] | ||
Schedule fo fair value for liabilities measured on a recurring basis | Fair Value at March 31, 2015 Level 1 Level 2 Level 3 Total Public offering warrants $ $ $ (365 ) $ (365 ) Series B warrants (991 ) (991 ) Total long-term liabilities at fair value $ $ $ (1,356 ) $ (1,356 ) Fair Value at December 31, 2014 Level 1 Level 2 Level 3 Total Public offering warrants $ $ $ (587 ) $ (587 ) Series B warrants (1,483 ) (1,483 ) Total long-term liabilities at fair value $ $ $ (2,070 ) $ (2,070 ) | Description Level 1 Level 2 Level 3 Total Asset (Liability) Total Date Public Offering warrants $ $ $ (587 ) $ (587 ) $ (587 ) December 31, 2014 Series B Warrants $ $ $ (1,483 ) $ (1,483 ) $ 1,483 ) December 31, 2014 Total 2014 $ $ $ (2,070 ) $ (2,070 ) $ (2,070 ) Series B Warrants $ $ $ 1,548 ) $ (1,548 ) $ (1,548 ) December 31, 2013 |
4. STOCKHOLDERS' DEFICIT (Table
4. STOCKHOLDERS' DEFICIT (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Dec. 31, 2014 | |
Equity [Abstract] | ||
Common stock issued | New Issuance - For Cash 2,499,999 Series B Dividends 138,805 Option Exercised 168,558 Repayment of Loan 358,616 Total 3,165,978 | Public Offering - Issuance - For Cash 8,985,410 Public Offering - Issuance - For Debt Repayment 7,800,005 Reg. S - New Issuance - For Cash 651,042 Series B Conversion 2,311,089 Series B Dividends 342,389 Commitment Shares / 2014 Senior Convertible Notes 321,820 2014 Senior Convertible Note 2,783,959 Option Exercised 242,439 Warrant Exercised 200,000 Board Compensation 771,740 Restricted Shares CEO 2014 2,000,000 Total 26,409,893 |
Schedule of assumptions used to determine fair value of stock options | 2014 2013 Expected volatility 157.70 % 174.00 % Expected option life in years 9.98 10.00 Expected dividend yield 0.00 % 0.00 % Risk-free interest rate 2.55 % 1.87 % Weighted average fair value per option at grant date $ 0.40 $ 0.69 | |
Outstanding warrants | Warrants (Underlying Shares) Outstanding, January 1, 2015 29,796,154 Issuances 2,249,422 Canceled / Expired (3,590,522 ) Exercised Outstanding, March 31, 2015 28,455,054 | Warrants (Underlying Shares) Outstanding, January 1, 2014 11,258,939 Issuances 19,238,727 Canceled / Expired (501,512 ) Exercised (200,000 ) Outstanding, December 31, 2014 29,796,154 |
Shares reserved for warrants | Warrants (Underlying Shares) Exercise Price Expiration Date 6,790 (1) $1.0100 per share September 10, 2015 439,883 (2) $0.6800 per share March 31, 2016 285,186 (3) $1.0500 per share November 20, 2016 1,858,089 (4) $1.0800 per share May 23, 2018 14,195,525 (4)(5) $0.1394 per share May 23, 2018 200,000 (6) $0.5000 per share April 23, 2019 561,798 (6) $0.4500 per share May 22, 2019 184,211 (7) $0.3800 per share September 10, 2019 325,521 (8) $0.4601 per share September 27, 2019 8,392,707 (9) $0.2250 per share December 2, 2019 755,344 (10) $0.2812 per share December 2, 2019 1,250,000 (11) $0.2550 per share March 30, 2018 | Warrants (Underlying Shares) Exercise Price Expiration Date 3,590,522 (1) $0.8000 per share March 1, 2015 6,790 (2) $1.0100 per share September 10, 2015 439,883 (3) $0.6800 per share March 31, 2016 285,186 (4) $1.0500 per share November 20, 2016 1,858,089 (5) $1.0800 per share May 23, 2018 13,196,103 (5)(6) $0.1498 per share May 23, 2018 200,000 (7) $0.5000 per share April 23, 2019 561,798 (7) $0.4500 per share May 22, 2019 184,211 (8) $0.3800 per share September 10, 2019 325,521 (9) $0.4601 per share September 27, 2019 8,392,707 (10) $0.2250 per share December 2, 2019 755,344 (11) $0.2812 per share December 2, 2019 |
5. STOCK OPTIONS (Tables)
5. STOCK OPTIONS (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Dec. 31, 2014 | |
Stock Options Tables | ||
Stock Options activity | Shares Weighted average exercise price Weighted average remaining contractual (years) Aggregate intrinsic value (thousands) Outstanding, January 1, 2015 6,940,395 $ 0.66 6.97 $ 625,412 Granted 1,000 0.19 Exercised / Expired (195,587 ) 0.49 Outstanding, March 31, 2015 6,745,808 $ 0.66 5.34 $ 56,830 Vested and exercisable, March 31, 2015 5,929,916 $ 0.67 4.92 $ 56,830 | 2014 2013 Weighted Average Exercise Weighted Average Exercise Shares Price Shares Price Outstanding at beginning of year 6,531,192 $ 0.68 6,463,206 $ 0.67 Options granted 754,761 $ 0.40 977,276 $ 0.50 Options exercised (242,439 ) $ 0.32 (580,540 ) $ 0.31 Options expired/forfeited (103,119 ) $ 0.68 (328,750 ) $ 1.15 Outstanding at end of year 6,940,395 $ 0.66 6,531,192 $ 0.66 Options vested and exercisable at year-end 5,988,119 $ 0.66 5,463,963 $ 0.58 Options available for grant at year-end 6,314,824 6,724,027 Aggregate intrinsic value options exercised $ 49,675 $ 236,059 Aggregate intrinsic value options outstanding $ 494,119 $ 625,412 Aggregate intrinsic value options vested and exercisable $ 612,946 $ 612,946 Options unvested, balance at beginning of year (1) 1,067,229 $ 1.12 1,819,087 $ 1.18 Options granted (1) 754,761 $ 0.40 977,276 $ 0.50 Vested (1) (766,595 ) $ 0.66 (1,582,034 ) $ 0.80 Cancelled/Forfeited (103,119 ) $ 0.68 (147,100 $ 1.22 Balance, end of period (1) 952,276 1,067,229 $ 1.12 |
5a. Income Taxes (Tables)
5a. Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |
Components of deferred taxes | 2014 2013 Deferred tax assets: Net operating loss carry forwards $ 466 $ 287 Deferred tax liabilities: Intangible assets and other 25,994 22,737 26,460 23,025 Valuation allowance (26,460 ) (23,025 ) $ 0 $ 0 |
Income taxes | 2014 2013 Statutory federal tax rate 34 % 34 % State taxes, net of federal benefit 4 4 Nondeductible expenses Valuation allowance (38 ) (38 ) 0 % 0 % |
6a. Commitments and Contingen28
6a. Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of operating leases | Year Amount (,000) 2015 $ 211 2016 201 2017 98 Total $ 510 |
10. Valuation and Qualifying 29
10. Valuation and Qualifying Accounts (Tables) | 12 Months Ended |
Dec. 31, 2014 | |
Valuation and Qualifying Accounts [Abstract] | |
Schedule of Allowance for Doubtful Accounts | Year Ended December 31, 2014 2013 Beginning balance $ 18 $ 12 Additions / (Adjustments) 58 6 Balance $ 76 $ 18 |
Schedule of Inventory Reserves | Year Ended December 31, 2014 2013 Beginning balance $ 184 $ 52 Additions / (Adjustments) (40 ) 132 Balance $ 144 $ 184 |
1. BASIS OF PRESENTATION (Detai
1. BASIS OF PRESENTATION (Details Narrative) $ in Thousands | Dec. 31, 2014USD ($) |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Accumulated deficit | $ 113,100 |
Working capital | $ 2,800 |
2. SIGNIFICANT ACCOUNTING POL31
2. SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands | Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Accounting Policies [Abstract] | |||
Raw materials | $ 696 | $ 884 | $ 1,013 |
Work in process | 335 | 304 | 268 |
Finished goods | 251 | 136 | 96 |
Inventory reserve | (133) | (144) | (184) |
Total | $ 1,149 | $ 1,180 | $ 1,193 |
2. SIGNIFICANT ACCOUNTING POL32
2. SIGNIFICANT ACCOUNTING POLICIES (Details 1) - USD ($) $ in Thousands | Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Property and equipment | $ 2,432 | ||
Less accumulated depreciation | $ (1,917) | $ (1,845) | 2,327 |
Total | 515 | 587 | 920 |
Equipment | |||
Property and equipment | 1,391 | 1,391 | 1,277 |
Software | |||
Property and equipment | 737 | 737 | 737 |
Furniture and fixtures | |||
Property and equipment | 124 | 124 | 124 |
Leasehold Improvement | |||
Property and equipment | $ 180 | $ 180 | $ 189 |
2. SIGNIFICANT ACCOUNTING POL33
2. SIGNIFICANT ACCOUNTING POLICIES (Details 2) - USD ($) $ in Thousands | Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Accrued compensation | $ 447 | $ 426 | |
Accrued professional fees | 203 | 116 | |
Deferred rent | 54 | 68 | |
Accrued warranty | 119 | 58 | |
Accrued vacation | 144 | 0 | |
Other accrued expenses | 48 | 55 | |
Total | $ 1,523 | $ 1,015 | $ 723 |
2. SIGNIFICANT ACCOUNTING POL34
2. SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Accounting Policies [Abstract] | ||
Patent Costs | $ 50,000 | $ 75,000 |
Other assets | $ 72,000 | 326,000 |
Net Operating loss carry forward | $ 68,400,000 |
3. FAIR VALUE OF FINANCIAL IN35
3. FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Thousands | Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Public offering warrants | (365) | (587) | 0 |
Series B warrants | $ (991) | $ (1,483) | $ (1,548) |
Total long-term liabilities at fair value | $ (1,356) | $ (2,070) | $ (1,548) |
Level 1 | |||
Public offering warrants | 0 | 0 | 0 |
Series B warrants | $ 0 | $ 0 | $ 0 |
Total long-term liabilities at fair value | $ 0 | $ 0 | $ 0 |
Level 2 | |||
Public offering warrants | 0 | 0 | 0 |
Series B warrants | $ 0 | $ 0 | $ 0 |
Total long-term liabilities at fair value | $ 0 | $ 0 | $ 0 |
Level 3 | |||
Public offering warrants | (365) | (587) | 0 |
Series B warrants | $ (991) | $ (1,483) | $ (1,548) |
Total long-term liabilities at fair value | $ (1,356) | $ (2,070) | $ (1,548) |
4. Stockholders' Equity (Detail
4. Stockholders' Equity (Details) - shares | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Stockholders Equity Details Narrative | |||
Public Offering - Issuance - For Cash | 2,499,999 | 8,985,410 | |
Public Offering - Issuance - For Debt Repayment | 7,800,005 | ||
Reg. S - New Issuance - For Cash | 651,042 | ||
Series B Conversion | 2,311,089 | ||
Series B Dividends | 342,389 | ||
Commitment Shares / 2014 Senior Convertible Notes | 321,820 | ||
2014 Senior Convertible Note | 2,783,959 | ||
Option Exercised | 195,587 | 242,439 | (580,540) |
Warrant Exercised | 200,000 | ||
Board Compensation | 771,740 | ||
Restricted Shares CEO 2014 | 2,000,000 | ||
Total | 358,616 | 26,409,893 |
4. Stockholders' Equity (Deta37
4. Stockholders' Equity (Details 1) - $ / shares | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Equity [Abstract] | ||
Expected volatility | 157.70% | 174.00% |
Expected option life in years | 9 years 11 months 23 days | 10 years |
Expected dividend yield | 0.00% | 0.00% |
Risk-free interest rate | 2.55% | 1.87% |
Weighted average fair value per option at grant date | $ 0.4 | $ 0.69 |
4. STOCKHOLDERS' DEFICIT (Detai
4. STOCKHOLDERS' DEFICIT (Details 2) - shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Dec. 31, 2014 | |
Equity [Abstract] | ||
New Issuance - For Cash | 2,499,999 | 8,985,410 |
Series B Dividends | 138,805 | |
Option Exercised | 168,558 | |
Repayment of Loan | 358,616 | 26,409,893 |
Total | 3,165,978 |
4. STOCKHOLDERS' DEFICIT (Det39
4. STOCKHOLDERS' DEFICIT (Details 3) - Warrants - shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Dec. 31, 2014 | |
Outstanding, January 1, 2015 | 29,796,154 | 11,258,939 |
Issuances | 2,249,422 | 19,238,727 |
Canceled / Expired | (3,590,522) | (501,512) |
Exercised | 0 | (200,000) |
Outstanding, March 31, 2015 | 28,455,054 | 29,796,154 |
4. STOCKHOLDERS' EQUITY (Deta40
4. STOCKHOLDERS' EQUITY (Details 4) - Dec. 31, 2014 - $ / shares | Total |
Warrants 1 | |
Warrants | 3,590,522 |
Exercise Price | $ 0.8 |
Expiration Date | Mar. 1, 2014 |
Warrants 2 | |
Warrants | 6,790 |
Exercise Price | $ 1.01 |
Expiration Date | Sep. 10, 2015 |
Warrants 3 | |
Warrants | 439,883 |
Exercise Price | $ 0.68 |
Expiration Date | Mar. 31, 2016 |
Warrants 4 | |
Warrants | 285,186 |
Exercise Price | $ 1.05 |
Expiration Date | Nov. 20, 2016 |
Warrants 5 | |
Warrants | 1,858,089 |
Exercise Price | $ 1.08 |
Expiration Date | May 23, 2018 |
Warrants 6 | |
Warrants | 13,196,103 |
Exercise Price | $ 0.1498 |
Expiration Date | May 23, 2018 |
Warrants 7 | |
Warrants | 200,000 |
Exercise Price | $ 0.5 |
Expiration Date | Apr. 23, 2019 |
Warrants 8 | |
Warrants | 561,798 |
Exercise Price | $ 0.45 |
Expiration Date | May 22, 2019 |
Warrant 9 | |
Warrants | 184,211 |
Exercise Price | $ 0.38 |
Expiration Date | Sep. 10, 2019 |
Warrant 10 | |
Warrants | 325,521 |
Exercise Price | $ 0.4601 |
Expiration Date | Sep. 27, 2019 |
Warrant 11 | |
Warrants | 8,392,707 |
Exercise Price | $ 0.225 |
Expiration Date | Dec. 2, 2019 |
Warrants 12 | |
Warrants | 755,344 |
Exercise Price | $ 0.2812 |
Expiration Date | Dec. 2, 2019 |
4. STOCKHOLDERS' EQUITY (Deta41
4. STOCKHOLDERS' EQUITY (Details Narrative) - $ / shares | Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Stockholders Equity Details Narrative | |||
Par value | $ 0.001 | $ 0.001 | $ 0.001 |
Authorized preferred stock | 3 | 3 | 3 |
Preferred stock par value | $ .001 | $ 0.001 | $ 0.001 |
Shares Available under the plan | 6,314,824 | 6,724,027 |
5. STOCK OPTIONS (Details)
5. STOCK OPTIONS (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Equity [Abstract] | |||
Outstanding beginning balance, Shares | 6,940,395 | 6,531,192 | 6,463,206 |
Granted, Shares | 1,000 | 754,761 | 977,276 |
Exercised, Shares | 195,587 | 242,439 | (580,540) |
Expired, Shares | 195,587 | (103,119) | (328,750) |
Outstanding ending balance, Shares | 6,745,808 | 6,940,395 | 6,531,192 |
Vested and exercisable ending balance | 5,929,916 | 5,988,119 | 5,463,963 |
Outstanding beginning balance, Weighted average exercise price | $ 0.66 | $ 0.66 | $ 0.67 |
Granted, Weighted average exercise price | .19 | 0.4 | 0.5 |
Exercised, Weighted average exercise price | .49 | 0.32 | 0.31 |
Expired, Weighted average exercise price | .49 | 0.68 | 1.15 |
Outstanding ending balance, Weighted average exercise price | .66 | 0.66 | 0.66 |
Vested and exercisable ending balance | $ .67 | $ 0.66 | $ 0.58 |
Weighted Average Remaining Contractual Life (in years) Outstanding | 5 years 4 months 2 days | ||
Weighted Average Remaining Contractual Life (in years) Exercisable | 4 years 11 months 19 days | ||
Aggregate Intrinsic Value Outstanding, Beginning | $ 494,119 | $ 625,412 | |
Aggregate Intrinsic Value Granted | |||
Aggregate Intrinsic Value Exercised | 49,675 | $ 236,059 | |
Aggregate Intrinsic Value Outstanding, Ending | $ 56,830 | 494,119 | 625,412 |
Aggregate Intrinsic Value Exercisable | $ 56,830 | $ 612,946 | $ 612,946 |
Options available for grant at year-end | 6,314,824 | 6,724,027 | |
Options Unvested | |||
Options unvested, beginning balance | $ 1,067,229 | $ 1,819,087 | |
Options granted | 754,761 | 977,276 | |
Options Vested | (766,595) | (1,582,034) | |
Options Cancelled/Forfeited | $ (103,119) | $ (147,100) | |
Balance, end of period | 952,276 | 1,067,229 | |
Options unvested, beginning balance, weighted average exercise price | $ 1.12 | $ 1.18 | |
Options granted, weighted average exercise price | 0.4 | 0.5 | |
Options Vested, weighted average exercise price | 0.66 | 0.8 | |
Options Cancelled/Forfeited, weighted average exercise price | $ 0.68 | 1.22 | |
Balance, end of period | $ 1.12 |
7 NOTES PAYABLE (Details Narrat
7 NOTES PAYABLE (Details Narrative) - Mar. 31, 2015 - USD ($) $ in Thousands | Total |
Debt Disclosure [Abstract] | |
Notes payble | $ 165 |
Interest rate | 9.00% |
Related party notes and accrued interest | $ 414 |
5a. Income Taxes (Details)
5a. Income Taxes (Details) - USD ($) $ in Thousands | Dec. 31, 2014 | Dec. 31, 2013 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 466 | $ 287 |
Deferred tax liabilities: | ||
Intangible assets and other | 25,994 | 22,737 |
Gross | 26,460 | 23,025 |
Valuation allowance | (26,460) | (23,025) |
Net | $ 0 | $ 0 |
5a. Income taxes (Details 1)
5a. Income taxes (Details 1) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Disclosure [Abstract] | ||
Statutory federal tax rate | 34.00% | 34.00% |
State taxes, net of federal benefit | 400.00% | 400.00% |
Nondeductible expenses | 0.00% | 0.00% |
Valuation allowance | 38.00% | 38.00% |
Effective rate | 0.00% | 0.00% |
5a. Income Taxes (Details Narra
5a. Income Taxes (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Income Taxes Details Narrative | ||
NOL carryforwards | $ 68,400,000 | |
NOL carryforwards available through | 2,034 |
6a. Commitments and Contingen47
6a. Commitments and Contingencies (Details) $ in Thousands | Dec. 31, 2014USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,015 | $ 211 |
2,016 | 201 |
2,017 | 98 |
Total | $ 510 |
10. Valuation and Qualifying 48
10. Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Valuation and Qualifying Accounts [Abstract] | ||
Beginning balance | $ 18 | $ 12 |
Additions / (Adjustments) | 58 | 6 |
Balance | $ 76 | $ 18 |
10. Valuation and Qualifying 49
10. Valuation and Qualifying Accounts (Details 1) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Valuation and Qualifying Accounts [Abstract] | ||
Beginning balance | $ 184 | $ 52 |
Additions / (Adjustments) | (40) | 132 |
Balance | $ 144 | $ 184 |