Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | May. 02, 2016 | |
Document And Entity Information | ||
Entity Registrant Name | Echo Therapeutics, Inc. | |
Entity Central Index Key | 1,031,927 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2016 | |
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 | |
Trading Symbol | ECTE | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 11,401,533 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2,016 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Current Assets: | ||
Cash and cash equivalents | $ 42,829 | $ 56,210 |
Prepaid and other | 332,105 | 244,534 |
Total current assets | 374,934 | 300,744 |
Property and equipment, net | 237,016 | 267,671 |
Other Assets: | ||
Cash restricted pursuant to letters of credit | 214,026 | 236,425 |
Capitalized software development costs | 160,000 | 0 |
Other | 250 | 250 |
Total other assets | 374,276 | 236,675 |
Total assets | 986,226 | 805,090 |
Current Liabilities: | ||
Accounts payable | 1,997,741 | 2,176,083 |
Accrued and other | 464,292 | 602,345 |
Secured convertible notes, net | 868,421 | 0 |
Bridge loans | 550,000 | 330,000 |
Premium financing | 178,582 | 0 |
Derivative liabilities | 1,603,239 | 127,000 |
Total current liabilities | 5,662,275 | 3,235,428 |
Deferred revenue, net | 95,535 | 95,535 |
Total liabilities | $ 5,757,810 | $ 3,330,963 |
Commitments and contingencies | ||
Stockholders' deficit: | ||
Common stock, $0.01 par value; 150,000,000 shares authorized;issued and outstanding 11,401,533 and 11,124,496 shares, respectively | $ 114,013 | $ 111,243 |
Additional paid-in capital | 147,785,306 | 147,412,559 |
Accumulated deficit | (152,751,161) | (150,129,933) |
Total stockholders' deficit | (4,771,584) | (2,525,873) |
Total liabilities and stockholders' deficit | 986,226 | 805,090 |
Series C Preferred Stock [Member] | ||
Stockholders' deficit: | ||
Preferred Stock, $0.01 par value; 40,000,000 shares authorized: Convertible Series C, D, E, F | 10 | 10 |
Series D Preferred Stock [Member] | ||
Stockholders' deficit: | ||
Preferred Stock, $0.01 par value; 40,000,000 shares authorized: Convertible Series C, D, E, F | 10,000 | 10,000 |
Series E Preferred Stock [Member] | ||
Stockholders' deficit: | ||
Preferred Stock, $0.01 par value; 40,000,000 shares authorized: Convertible Series C, D, E, F | 17,486 | 17,486 |
Series F Preferred Stock [Member] | ||
Stockholders' deficit: | ||
Preferred Stock, $0.01 par value; 40,000,000 shares authorized: Convertible Series C, D, E, F | $ 52,762 | $ 52,762 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2016 | Dec. 31, 2015 |
Stockholders' Equity: | ||
Convertible Preferred Stock, par value | $ 0.01 | $ 0.01 |
Convertible Preferred Stock, authorized | 40,000,000 | 40,000,000 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, authorized | 150,000,000 | 150,000,000 |
Common stock, outstanding | 11,401,533 | 11,124,496 |
Common stock, Share Issued | 11,401,533 | 11,124,496 |
Series C Preferred Stock [Member] | ||
Stockholders' Equity: | ||
Convertible Preferred Stock, par value | $ 0.01 | $ 0.01 |
Convertible Preferred Stock, authorized | 10,000 | 10,000 |
Convertible Preferred Stock, outstanding | 1,000 | 1,000 |
Convertible Preferred Stock, Share Issued | 1,000 | 1,000 |
Series D Preferred Stock [Member] | ||
Stockholders' Equity: | ||
Convertible Preferred Stock, par value | $ 0.01 | $ 0.01 |
Convertible Preferred Stock, authorized | 3,600,000 | 3,600,000 |
Convertible Preferred Stock, outstanding | 1,000,000 | 1,000,000 |
Convertible Preferred Stock, Share Issued | 1,000,000 | 1,000,000 |
Series E Preferred Stock [Member] | ||
Stockholders' Equity: | ||
Convertible Preferred Stock, par value | $ 0.01 | $ 0.01 |
Convertible Preferred Stock, authorized | 1,748,613 | 1,748,613 |
Convertible Preferred Stock, outstanding | 1,748,613 | 1,748,613 |
Convertible Preferred Stock, Share Issued | 1,748,613 | 1,748,613 |
Series F Preferred Stock [Member] | ||
Stockholders' Equity: | ||
Convertible Preferred Stock, par value | $ 0.01 | $ 0.01 |
Convertible Preferred Stock, authorized | 6,000,000 | 6,000,000 |
Convertible Preferred Stock, outstanding | 5,276,180 | 5,276,180 |
Convertible Preferred Stock, Share Issued | 5,276,180 | 5,276,180 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Income Statement [Abstract] | ||
Licensing revenue | ||
Total revenues | ||
Operating Expenses: | ||
Research and development | $ 689,018 | $ 770,099 |
Selling, general and administrative | $ 936,627 | 1,543,499 |
Loss on disposal of property and equipment | 108,840 | |
Depreciation and amortization | $ 30,656 | 86,704 |
Total operating expenses | 1,656,301 | 2,509,142 |
Loss from operations | (1,656,301) | (2,509,142) |
Other Income (Expense): | ||
Loss on revaluation of derivative liabilities | $ (325,049) | (257,845) |
Financing expense | (5,534,000) | |
Loss on early extinguishment of bridge loans | $ (415,725) | 0 |
Amortization of debt discount | (184,966) | 0 |
Interest expense | (39,187) | (2,725) |
Other expense, net | (964,927) | (5,794,570) |
Net loss | $ (2,621,228) | $ (8,303,712) |
Net loss per common share, basic and diluted | $ (0.23) | $ (0.72) |
Basic and diluted weighted average common shares outstanding | 11,215,007 | 11,548,590 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT (Unaudited) - 3 months ended Mar. 31, 2016 - USD ($) | Preferred Stock | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
Beginning Balance, Shares at Dec. 31, 2015 | 8,025,793 | 11,124,496 | |||
Beginning Balance, Amount at Dec. 31, 2015 | $ 80,258 | $ 111,243 | $ 147,412,559 | $ (150,129,933) | $ (2,525,873) |
Share-based compensation, net of restricted stock cancellations, Shares | 277,037 | ||||
Share-based compensation, net of restricted stock cancellations, Amount | $ 2,770 | 372,747 | 375,517 | ||
Net loss | $ (2,621,228) | (2,621,228) | |||
Ending Balance, Shares at Mar. 31, 2016 | 8,025,793 | 11,401,533 | |||
Ending balance, Amount at Mar. 31, 2016 | $ 80,258 | $ 114,013 | $ 147,785,306 | $ (152,751,161) | $ (4,771,584) |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Cash Flows From Operating Activities: | ||
Net loss | $ (2,621,228) | $ (8,303,712) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 30,656 | 86,704 |
Amortization of debt discount | 184,966 | 0 |
Share-based compensation, net | 375,517 | 403,835 |
Loss on early extinguishment of bridge loans | 415,725 | 0 |
Loss on revaluation of derivative liabilities | 325,049 | 257,845 |
Warrant repricing charged to legal expense | 0 | 328,000 |
Loss on disposal of assets | 0 | 108,840 |
Financing loss | 0 | 5,534,000 |
Changes in assets and liabilities: | ||
Prepaid and other | (205,919) | (228,762) |
Accounts payable | (178,345) | (150,754) |
Accrued and other | (138,052) | (53,110) |
Net cash used in operating activities | (1,811,631) | (2,017,114) |
Cash Flows from Investing Activities: | ||
Purchase of property and equipment | 0 | (5,171) |
Decrease in restricted cash | 22,399 | 17,651 |
Capitalization of software development costs | (160,000) | 0 |
Proceeds on disposal of property and equipment | 0 | (76,968) |
Net cash used ininvesting activities | (137,601) | (64,488) |
Cash Flows From Financing Activities: | ||
Proceeds from secured convertible notes, net of related costs | 857,269 | 0 |
Proceeds from bridge loans | 900,000 | 0 |
Proceeds from equity financing | 0 | 1,000,000 |
Proceeds from premium financing | 199,671 | 272,622 |
Principal payments from premium financing | (21,089) | (59,793) |
Capital contribution | 0 | 59,325 |
Net cash provided by financing activities | 1,935,851 | 1,272,154 |
Net decrease in cash and cash equivalents | (13,381) | (809,448) |
Beginning of period | 56,210 | 1,278,941 |
End of period | 42,829 | 469,493 |
Supplemental disclosure of cash flow information: | ||
Interest | 4,097 | 2,725 |
Income taxes | 3,524 | 456 |
Supplemental disclosure of non-cash financing transactions: | ||
Prepaid deferred financing costs offset against secured convertible notes | 118,348 | 0 |
Directors fees payable offset against prepaid insurance | 0 | 272,200 |
Security deposit offset against accounts payable | 0 | 9,740 |
Accrued legal fees settled with stock | 0 | 550,000 |
Bridge loans exchanged for secured convertible notes | 680,000 | 0 |
Derivatives offset against secured convertible notes | 1,151,190 | 0 |
Conversion of convertible preferred stock into Common Stock at par value | $ 0 | $ 15,000 |
ORGANIZATION AND BASIS OF PRESE
ORGANIZATION AND BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND BASIS OF PRESENTATION | Echo Therapeutics, Inc. (the "Company") is a medical device company with expertise in advanced skin permeation technology. The Company is developing its non-invasive, wireless continuous glucose monitoring (CGM) system with potential use in the outpatient diabetes market. A significant opportunity may also exist in the wearable-health consumer market and in the hospital setting. Echo has also developed its needle-free skin preparation device as a platform technology that allows for enhanced skin permeation enabling extraction of analytes, such as glucose, enhanced delivery of topical pharmaceuticals and other applications. The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Sontra Medical, Inc., a Delaware corporation. All significant intercompany balances and transactions have been eliminated in consolidation. These financial statements have been prepared in conformity with generally accepted accounting principles (âGAAPâ) in the United States consistent with those applied in, and should be read in conjunction with, the Companyâs audited consolidated financial statements and related footnotes for the year ended December 31, 2015 included in the Companyâs Annual Report on Form 10-K as filed with the United States Securities and Exchange Commission (âSECâ) on March 30, 2016. These financial statements reflect all adjustments, consisting only of normal recurring adjustments, which are, in the opinion of management, necessary for a fair presentation of the Companyâs financial position as of March 31, 2016 and its results of operations and cash flows for the interim periods presented and are not necessarily indicative of results for subsequent interim periods or for the full year. These interim financial statements do not include all of the information and footnotes required by GAAP for complete financial statements as allowed by the relevant SEC rules and regulations; however, the Company believes that its disclosures are adequate to ensure that the information presented is not misleading. Certain amounts in prior periods have been reclassified to conform to the current presentation. |
LIQUIDITY AND MANAGEMENT'S PLAN
LIQUIDITY AND MANAGEMENT'S PLANS | 3 Months Ended |
Mar. 31, 2016 | |
Liquidity And Managements Plans | |
LIQUIDITY AND MANAGEMENT'S PLANS | The accompanying financial statements have been prepared on a basis that assumes that the Company will continue as a going concern and that contemplates the continuity of operations, the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. As of March 31, 2016, the Company had cash of $42,829, working capital deficit of ($5,287,341) and an accumulated deficit of ($152,751,161). The Company continues to incur recurring losses from operations. The Companyâs losses have resulted principally from costs incurred in connection with its research and development activities and from general and administrative costs associated with its operations. The Company also expects to have negative cash flows for the foreseeable future as it funds its operational losses and capital expenditures. This will result in decreases in the Companyâs working capital, total assets and stockholdersâ equity, which may not be offset by future funding. The Company will need to secure additional capital to fund its product development, research, manufacturing and clinical programs in accordance with its current planned operations. The Company has funded its operations in the past primarily through debt and equity issuances. Management will continue to pursue financing to fund its operations. No assurances can be given that additional capital will be available on terms acceptable to the Company. The accompanying financial statements do not include any adjustments that might result from the outcome of the uncertainty. On May 3, 2016, the Company closed the second round of its debt financing and issued secured convertible notes in an aggregate principal amount of $3,361,620. In exchange for the secured convertible notes, the Company received $1,188,000 in gross cash proceeds, a note receivable, payable in 30 days and bearing interest at 12% of $770,000 (of which $200,000 was subsequently collected), and $1,400,000 of bridge notes were cancelled. See Notes 5 and 12. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 3 Months Ended |
Mar. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | The principal categories and estimated useful lives of property and equipment were: 3/31/16 12/31/15 Estimated Useful Lives Computer equipment $ 332,764 $ 332,764 3 Office and laboratory equipment 628,726 628,726 3-5 Furniture and fixtures 228,099 228,099 7 Manufacturing equipment 61,998 61,998 5 Leasehold improvements 41,969 41,968 3-7 Total property and equipment 1,293,556 1,293,555 Less accumulated depreciation and amortization 1,056,540 1,025,884 Property and equipment, net $ 237,016 $ 267,671 ~ |
CAPITALIZED SOFTWARE DEVELOPMEN
CAPITALIZED SOFTWARE DEVELOPMENT COSTS | 3 Months Ended |
Mar. 31, 2016 | |
Capitalized Software Development Costs | |
CAPITALIZED SOFTWARE DEVELOPMENT COSTS | Software development costs associated with the planning and designing phase of software development, including coding and testing activities necessary to establish technological feasibility, are expensed as incurred. Once technological feasibility has been determined, a portion of the costs incurred in development, including coding, testing, and quality assurance, are capitalized. $160,000 of costs associated with the application programming of the Companys smartphone application for its CGM were capitalized in the three months ended March 31, 2016. |
FINANCING TRANSACTIONS
FINANCING TRANSACTIONS | 3 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
Financing transactions | On January 29, 2016, the Company entered into a securities purchase agreement (the Purchase Agreement) with certain institutional and other accredited investors (the Investors) pursuant to which the Company agreed to issue up to $5,145,000 principal amount of 10% senior secured convertible notes of the Company (the Notes) and related common stock purchase warrants (the Warrants) in two tranches. The Notes are secured by substantially all of the assets of the Company pursuant to a Security Agreement, dated January 29, 2016 (the Security Agreement). The initial closing of $1,787,000 occurred on January 29, 2016. The second tranche of the financing, or $3,358,000, was subject to the Company obtaining shareholder approval which occurred on April 14, 2016. The Notes and Warrants are subject to customary antidilution provisions. With stockholder approval, the conversion price for the Notes is subject to a reset to eighty percent (80%) of the average of the ten lowest closing prices of the Common Stock less than $1.50 (subject to equitable adjustment), if any, as reported by Bloomberg LP for the principal market on which the Common Stock then trades during the ninety (90) days following the first effective date of a registration statement filed pursuant to the Registration Rights Agreement, but in no event less than $.80, subject to equitable adjustment. For the first closing, bridge notes in the principal amount of $680,000 were surrendered to the Company as payment by certain Investors. This was inclusive of $330,000 of bridge notes outstanding at December 31, 2015 and a $350,000 of promissory notes received at various dates in January 2016 from Beijing Yi Tang Bio Science & Technology, Ltd. (BYT). The Company recorded a loss on early extinguishment of these bridge loans of $415,725, representing the excess value of the consideration consisting of the $680,000 secured convertible note, and a proportional amount of the Warrants totaling $320,761 of Warrants and the embedded conversion feature of the Notes totaling $94,964, exchanged for certain bridge loans to cancel them. Fees aggregating approximately $368,000 were paid to the placement agent and others. The Notes issued in the first closing are initially convertible into 1,191,333 shares of common stock, par value $.01 per share, of the Company (the Common Stock), at $1.50 per share. The Company may redeem the Notes at par when the Company stock price remains above $5.00 for ten consecutive days, or alternatively, at 125% of principal below $5.00. Interest is payable quarterly or, subject to receipt of stockholder approval, at the Companys option, in shares of Common Stock. In connection with the initial closing, the Company issued five-year Class A warrants to purchase 1,274,280 shares of Common Stock, inclusive of Class A warrants to purchase 82,947 share of Common Stock issued to the placement agent, at an exercise price of $1.50 per share, which are not exercisable for six months. These Warrants, whose exercise price is subject to adjustments should the Company do a future financing at a price less than $1.50, is considered a derivative. The initial value of these derivative warrants was $901,631 which was determined utilizing a Monte Carlo Binomial Model. The assumptions utilized for these derivative warrants are disclosed in Note 10. Additionally the Notes contain an embedded conversion feature which adjusts the conversion price should the Company have a price reset during the ninety days after April 29, 2016 (the effective date of the Companys registration) or do a future financing at a price less than $1.50, and is also considered a derivative. The initial value of the embedded conversion feature within the Notes was $249,559 which was also determined utilizing a Monte Carlo Binomial Model. The assumptions utilized for the embedded conversion feature valuation, which reflect the initial valuation at January 29 th and subsequent valuation at March 31, 2016, were as follows: Risk-free interest rate % 0.68 Expected dividend yield Expected term - years (contractual term) 0.83 1 Forfeiture rate Expected volatility % 0.70 0.75 Timing of down-round triggering event August 2016 Follows is a summary of the Notes and related discounts: 3/31/16 Cash and other proceeds received from financing $ 1,787,000 Financing costs (368,080 ) Warrants (580,870 ) Embedded conversion feature in Notes (154,595 ) Amortization of debt discount 184,966 Secured convertible notes, net $ 868,421 On February 4, 2016, the Company issued a promissory note to BYT (the Lender) in the aggregate principal amount of $300,000 in respect of a bridge loan made by such party. On February 11, 2016, the Company issued a promissory note to Platinum Partners Value Arbitrage Fund L.P. (the Lender and PPVA) in the aggregate principal amount of $100,000 in respect of a bridge loan made by such party. On March 21, 2016, the Company issued a promissory note to PPVA in the aggregate principal amount of $150,000 in respect of a bridge loan made by such party. On April 4, 2016, the Company issued a promissory note to PPVA in the aggregate principal amount of $350,000 in respect of a bridge loan made by such party. On April 18, 2016, the Company issued a promissory note to PPVA in the aggregate principal amount of $450,000 in respect of a bridge loan made by such party. On April 29, 2016, the Company issued a promissory note to BYT in the aggregate principal amount of $50,000 in respect of a bridge loan made by such party. The promissory notes, which bear interest at the prime rate (or 3.5%), were exchanged for the May 3 rd second tranche financing of the Notes described below. On April 14, 2016, the Company held a Special Meeting of Stockholders. Of the 11,124,496 shares of common stock outstanding and entitled to vote, 6,197,024 shares, or 56%, were represented at the meeting in person or by proxy. On May 3, 2016, the Company closed the second tranche of the Note financing and issued Notes in an aggregate principal amount of $3,361,620, inclusive of $3,620 of interest due on bridge loans. In exchange for the Notes, the Company received $1,188,000 in gross cash proceeds, a note receivable, payable in 30 days and bearing interest at 12%, of $770,000, from BYT, and $1,400,000 of bridge notes were cancelled. The Company incurred placement, legal and other fees aggregating approximately $85,000 which were deducted from the gross cash proceeds. Additionally, the placement agent received Class B warrants, with a 1½ year term, to purchase 37,520 shares of the Companys Common Stock at $1.50 per share. The Notes are initially convertible into 2,241,080 shares of Common Stock at $1.50 per share. The Company also issued Class B warrants, with a 1½ year term, to purchase 2,241,080 shares of Common Stock at $1.50 per share. The Company may call the Class B Warrants in the event that Companys Common Stock is trading at 200% above the strike price for 10 consecutive trading days (at $100,000 value traded per day) if the Warrant is saleable into the public markets, provided that the holder will have the option of ten trading days to exercise. In connection with the closing, the Certificate of Amendment to the Certificate of Designations of the Companys Series F Convertible Preferred Stock was filed which provides the holders of 5,276,180 shares of the Companys Series F Convertible Preferred Stock the same reset rights afforded the Note holders. The Purchase Agreement for the above described Note financing contains customary representations, warranties and affirmative and negative covenants. The Purchase Agreement also requires management and certain shareholders to lock-up certain of their shares for the earlier of six months after the effective date of a registration statement, the first anniversary of the initial closing (January 29, 2017), or the date, if applicable, such holder of securities is no longer an officer or directors of the Company, subject to certain exceptions. In addition, for up to one year following the effective date of a registration statement, the Investors have the right to participate, on a pro rata basis, in certain subsequent financings by the Company, subject to certain limitations. In connection with the transaction, the Company entered into a registration rights agreement (the Registration Rights Agreement) that requires the Company to file one or more registration statements in respect of the shares of Common Stock underlying the Notes and Warrants. If the Company fails to make its filing deadlines or fails to maintain the registration statement for required periods of time, the Company will be subject to certain liquidated damages provisions. Newbridge Securities Corporation/Life Tech Capital (the Placement Agent) acted as the sole placement agent for the financing. |
DERIVATIVE LIABILITIES
DERIVATIVE LIABILITIES | 3 Months Ended |
Mar. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE LIABILITY | As a result of having warrants which are outstanding, issued in connection with a 2012 Credit Facility (which was terminated in October 2014), the Company is required to record the changes in the value of these derivative warrants through their expirations in November 2017. Additionally as indicated in Note 5 above, Notes and Warrants issued in connection with the Companys January 2016 financing, included certain price/conversion features, which require them to be accounted for as derivatives. The table below presents the changes in the derivative liability, which is measured at fair value on a recurring basis and classified as Level 3 in fair value hierarchy: 3/31/16 12/31/15 Derivative liabilities as of January 1 $ 127,000 $ 208,155 Secured convertible note derivatives: Warrants 901,631 Embedded conversion feature in Notes 249,559 Loss (gain) on revaluation 325,049 (81,155 ) Derivative liabilities as of end of period $ 1,603,239 $ 127,000 None of the derivative warrants were exercised in 2016 or 2015 pursuant to cashless exercise provisions. |
EQUITY COMPENSATION PLANS
EQUITY COMPENSATION PLANS | 3 Months Ended |
Mar. 31, 2016 | |
Equity Compensation Plans | |
EQUITY COMPENSATION PLANS | In March 2003, the Companys shareholders approved its 2003 Stock Option and Incentive Plan (the 2003 Plan). Pursuant to the 2003 Plan, the Companys Board of Directors (or its committees and/or executive officers delegated by the Board of Directors) may grant incentive and nonqualified stock options, restricted stock, and other stock-based awards to the Companys employees, officers, directors, consultants and advisors. As of March 31, 2016, there were 5,000 restricted shares of Common Stock issued and options to purchase an aggregate of 26,500 shares of Common Stock outstanding under the 2003 Plan and no shares are available for future grants due to the 2003 Plans expiration. In May 2008, the Companys shareholders approved the 2008 Equity Compensation Plan, as amended (the 2008 Plan). The 2008 Plan provides for grants of incentive stock options to employees and nonqualified stock options and restricted stock to employees, consultants and non-employee directors of the Company. The maximum number of shares available under the 2008 Plan is 10,000,000 shares. As of March 31, 2016, there were 292,942 restricted shares of Common Stock issued and options to purchase 2,863,543 shares of Common Stock outstanding under the 2008 Plan and 6,830,515 shares available for future grants. The following table shows the remaining shares available for future grants for each plan and outstanding shares: Equity Compensation Plans Not Pursuant 2003 Plan 2008 Plan to a Plan Shares Available For Issuance Total reserved for stock options and restricted stock 160,000 10,000,000 Net restricted stock issued net of cancellations (5,000 ) (292,942 ) Stock options granted (154,449 ) (4,293,693 ) Add back options cancelled before exercise 92,349 1,417,150 Less shares no longer available due to Plan expiration (92,900 ) Remaining shares available for future grants at March 31, 2016 6,830,515 Stock options granted 154,449 4,293,693 310,000 Less:Stock options cancelled (92,349 ) (1,417,150 ) (243,333 ) Stock options exercised (35,600 ) (13,000 ) (66,667 ) Net shares outstanding before restricted stock 26,500 2,863,543 Net restricted stock issued net of cancellations 5,000 292,942 6,485 Outstanding shares at March 31, 2016 31,500 3,156,485 6,485 |
STOCK OPTIONS
STOCK OPTIONS | 3 Months Ended |
Mar. 31, 2016 | |
Stock Options | |
STOCK OPTIONS | The fair value of each stock option award is estimated on the date of grant using the Black-Scholes option pricing model with certain assumptions noted below. Expected volatilities are based on historical volatility of the Common Stock using historical periods consistent with the expected term of the options. The Company uses historical data, as well as subsequent events occurring prior to the issuance of the financial statements, to estimate option exercise and employee termination and forfeitures within the valuation model. The expected term of stock options granted under the Companys stock plans is based on the average of the contractual term (generally 10 years) and the vesting period (generally 24 to 42 months). The risk-free rate is based on the yield of a U.S. Treasury security with a term consistent with the option. For options issued and outstanding during the three month periods ended March 31, 2016 and 2015, the Company recorded additional paid-in capital and non-cash compensation expense of $359,000 and $383,000, respectively, each net of estimated forfeitures. The assumptions used principally for stock options granted to employees and members of the Companys Board of Directors in the three months ended March 31, 2016 and 2015 were as follows: 2016 2015 Risk-free interest rate % 0.98 1.07 1.52 1.61 Expected dividend yield Expected term - years 3 4 5 5.5 Forfeiture rate % (excluding fully vested stock options) 2 5 15 Expected volatility % 0.94 1.02 0.80 1.06 A summary of stock option activity for the three months ended March 31, 2016 is as follows: Stock Options Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term (years) Aggregate Intrinsic Value Outstanding options at January 1, 2016 1,667,233 $ 2.01 Granted 1,222,810 $ 1.28 Forfeited or expired $ Outstanding options at March 31, 2016 2,890,043 $ 1.70 9.10 $ Exercisable options at March 31, 2016 1,358,031 $ 1.89 8.81 $ The weighted-average grant-date fair value of stock options granted for the three month period ended March 31, 2016 was $1.28 per share. As of March 31, 2016, there was approximately $1,147,000 of total unrecognized compensation expense related to non-vested share-based option compensation arrangements. With the exception of the unrecognized share-based compensation related to certain restricted stock grants to officers and employees that contain performance conditions related to FDA approval for the Companys CGM system or the sale of substantially all of the stock or assets of the Company, unrecognized compensation is expected to be recognized over the next four years. |
RESTRICTED STOCK
RESTRICTED STOCK | 3 Months Ended |
Mar. 31, 2016 | |
Restricted Stock | |
RESTRICTED STOCK | For restricted stock issued and outstanding during the quarters ended March 31, 2016 and 2015, the Company incurred non-cash compensation expense of approximately $17,000 and $21,000, respectively, each net of estimated forfeitures. During the quarter ended March 31, 2016, the Company granted 280,000 restricted shares of Common Stock its officers and Vice President of Operations and Product Development of the Company, in connection with their respective salary deferrals. A summary of non-vested restricted stock activity as of and for the three months ended March 31, 2016 is as follows: Restricted Stock Shares Weighted- Average Grant-Date Fair Value Non-vested shares at January 1, 2016 27,842 $ 13.06 Granted 280,000 $ 1.13 Vested (452 ) $ 7.82 Forfeited (2,963 ) $ 7.70 Non-vested shares at March 31, 2016 304,427 $ 2.15 Among the 304,427 shares of non-vested restricted stock, the various vesting criteria include the following: · 14,185 shares of restricted stock vest upon the FDA approval of the Companys CGM system or the sale of the Company; and · 10,242 shares of restricted stock vest over 4 years, at each of the anniversary dates of the grants, and · 280,000 shares of restricted stock vest 18 months from the date of issuance. As of March 31, 2016, there was approximately $653,000 of total unrecognized compensation expense related to non-vested share-based restricted stock arrangements granted pursuant to the Companys equity compensation plans that vest over time in the foreseeable future. As of March 31, 2016, the Company cannot estimate the timing of completion of performance vesting requirements required by certain of these restricted stock grant arrangements. Compensation expense related to these restricted share grants will be recognized when the Company concludes that achievement of the performance vesting conditions is probable. |
WARRANTS
WARRANTS | 3 Months Ended |
Mar. 31, 2016 | |
Warrants | |
WARRANTS | In the three months ended March 31, 2016, the Company issued warrants to purchase 1,274,280 shares of the Companys common stock in connection with its Note financing. See Note 5. A summary of warrant activity for the three months ended March 31, 2016 is as follows: Warrants Shares Weighted- Average Exercise Price Outstanding warrants at January 1, 2016 4,530,428 $ 3.68 Granted 1,274,280 $ 1.50 Forfeited $ Outstanding warrants at March 31, 2016 5,804,708 $ 3.20 At March 31, 2016, the Company had the following outstanding warrants: Type of Warrant/ Range of Exercise Prices Expirations Number Outstanding Weighted- Average Remaining Contractual Life (years) Weighted- Average Exercise Price Number Exercisable Derivative: $ 1.50 1/28/21 1,274,280 4.83 $ 1.50 1,274,280 $ 7.50 8/31/17 to 11/6/17 700,000 1.48 $ 7.50 700,000 Equity: $ 2.75 - $3.00 12/10/18 to 10//30/20 3,830,428 3.94 $ 2.98 3,830,428 Total outstanding 5,804,708 5,804,708 The Company uses valuation methods and assumptions that consider among other factors the fair value of the underlying stock, risk-free interest rate, volatility, expected life and dividend rates in estimating fair value for the warrants considered to be derivative instruments. The following assumptions were utilized by the Company: Risk-free interest rate % .73 - 1.48 Expected dividend yield Expected term - years (contractual term) 1.4 5 Forfeiture rate Expected volatility % 0.84 1.03 Timing of down-round triggering event August 2016 Expected volatilities are based on historical volatility of the Common Stock using historical periods consistent with the expected term of the warrant. The risk-free rate is based on the yield of a U.S. Treasury security with a term consistent with the warrant. |
LITIGATION & OTHER SIGNIFICANT
LITIGATION & OTHER SIGNIFICANT MATTERS | 3 Months Ended |
Mar. 31, 2016 | |
Litigation Other Significant Matters | |
LITIGATION & OTHER SIGNIFICANT MATTERS | From time to time, the Company is subject to legal proceedings, claims, investigations, and proceedings in the ordinary course of business. In accordance with generally accepted accounting principles, the Company makes a provision for a liability when it is both probable that a liability has been incurred and the amount of the loss or range of loss can be reasonably estimated. These provisions, if any, are reviewed at least quarterly and adjusted to reflect the impacts of negotiations, settlements, rulings, advice of legal counsel, and other information and events pertaining to a particular case. Litigation is inherently unpredictable. At March 31, 2016, no litigation loss is deemed probable or reasonably estimated. NASDAQ Compliance Requirement for Continued Listing On January 6, 2016, the Company received a letter from The Nasdaq Stock Market (Nasdaq) that, as a result of the Companys failure to hold an annual meeting of stockholders no later than one year after the end of its fiscal year as required by Nasdaq Listing Rule 5620(a), and the Companys failure to meet the minimum $2.5 million stockholders equity requirement set forth in Nasdaq Listing Rule 5550(b)(1), Nasdaq had determined to initiate procedures to delist the Companys securities from Nasdaq. The Company was advised that, unless the Company requested an appeal of this determination, trading in the Companys common stock would be suspended at the opening of business on January 15, 2016 and a Form 25-NSE would be filed with the Securities and Exchange Commission to remove the Companys securities from listing and registration on Nasdaq. The Company appealed Nasdaqs determination. The suspension of trading and delisting of the Companys securities was stayed during the pendency of such appeal. A hearing before the Nasdaq Hearings Panel (the Panel) was held on February 25, 2016. At the hearing, the Companys management presented its plan to regain and maintain compliance with Nasdaqs continued listing requirements. On March 9, 2016, the Company was informed that the Panel determined to grant its request to remain listed on Nasdaq, subject to the following conditions: · On or before May 31, 2016, the Company shall have its Annual Shareholder Meeting for fiscal year ended 2015. · On or before July 5, 2016, the Company shall publicly announce and inform the Panel that it has stockholders equity above $2.5 million. · The Company shall also, by that date, provide the Panel with updated projections demonstrating its ability to maintain its stockholders equity above $2.5 million through June 30, 2017. These projections shall detail the underlying assumptions, including any required capital raises or conversions of debt or preferred to common stock. The Panel will consider at that time whether a Panel Monitor is appropriate. On March 21, 2016, the Board of Directors of the Company set May 26, 2016 as the date for the Companys 2016 Annual Meeting of Stockholders (the 2016 Annual Meeting). The record date, time and location of the 2016 Annual Meeting are set forth in the Companys proxy statement for the 2016 Annual Meeting. The Company was advised that July 5, 2016 represents the full extent of the Panels discretion to grant continued listing while it is non-compliant. Should the Company fail to demonstrate compliance with that rule by that date, the Panel will issue a final delist determination and the Company will be suspended from trading on Nasdaq. In order to fully comply with the terms of this exception, the Company must be able to demonstrate compliance with all requirements for continued listing on Nasdaq. In the event the Company is unable to do so, its securities may be delisted from Nasdaq. It is a requirement during the exception period that the Company provide prompt notification of any significant events that occur during this time. This includes, but is not limited to, any event that may call into question the Companys historical financial information or that may impact the Companys ability to maintain compliance with any Nasdaq listing requirement or exception deadline. The Panel reserves the right to reconsider the terms of this exception based on any event, condition or circumstance that exists or develops that would, in the opinion of the Panel, make continued listing of the Companys securities on Nasdaq inadvisable or unwarranted. In addition, any compliance document will be subject to review by the Panel, which may, in its discretion, request additional information before determining that the Company has complied with the terms of the exception. There can be no assurance that the Company will be able to regain or sustain compliance. If the Company does not regain and sustain compliance, or if the Company fails to satisfy another Nasdaq requirement for continued listing, Nasdaq staff could provide notice that the Company's common stock will become subject to delisting. In the event of delisting, the Company expects that its stock would trade on the OTC Markets. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2016 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | Subsequent to the May 3, 2016 closing of its second tranche financing described in Note 5, the Company received $200,000 of payments against its outstanding $770,000 note receivable from BYT. |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | The principal categories and estimated useful lives of property and equipment were: 3/31/16 12/31/15 Estimated Useful Lives Computer equipment $ 332,764 $ 332,764 3 Office and laboratory equipment 628,726 628,726 3-5 Furniture and fixtures 228,099 228,099 7 Manufacturing equipment 61,998 61,998 5 Leasehold improvements 41,969 41,968 3-7 Total property and equipment 1,293,556 1,293,555 Less accumulated depreciation and amortization 1,056,540 1,025,884 Property and equipment, net $ 237,016 $ 267,671 |
FINANCING TRANSACTIONS (Tables)
FINANCING TRANSACTIONS (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
Assumptions, notes | Risk-free interest rate % 0.68 Expected dividend yield Expected term - years (contractual term) 0.83 1 Forfeiture rate Expected volatility % 0.70 0.75 Timing of down-round triggering event August 2016 |
Summary of the Notes and related discounts | Follows is a summary of the Notes and related discounts: 3/31/16 Cash and other proceeds received from financing $ 1,787,000 Financing costs (368,080 ) Warrants (580,870 ) Embedded conversion feature in Notes (154,595 ) Amortization of debt discount 184,966 Secured convertible notes, net $ 868,421 |
DERIVATIVE LIABILITIES (Tables)
DERIVATIVE LIABILITIES (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative warrant liability | 3/31/16 12/31/15 Derivative liabilities as of January 1 $ 127,000 $ 208,155 Secured convertible note derivatives: Warrants 901,631 Embedded conversion feature in Notes 249,559 Loss (gain) on revaluation 325,049 (81,155 ) Derivative liabilities as of end of period $ 1,603,239 $ 127,000 |
EQUITY COMPENSATION PLANS (Tabl
EQUITY COMPENSATION PLANS (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Equity Compensation Plans | |
EQUITY COMPENSATION PLANS | Equity Compensation Plans Not Pursuant 2003 Plan 2008 Plan to a Plan Shares Available For Issuance Total reserved for stock options and restricted stock 160,000 10,000,000 Net restricted stock issued net of cancellations (5,000 ) (292,942 ) Stock options granted (154,449 ) (4,293,693 ) Add back options cancelled before exercise 92,349 1,417,150 Less shares no longer available due to Plan expiration (92,900 ) Remaining shares available for future grants at March 31, 2016 6,830,515 Stock options granted 154,449 4,293,693 310,000 Less:Stock options cancelled (92,349 ) (1,417,150 ) (243,333 ) Stock options exercised (35,600 ) (13,000 ) (66,667 ) Net shares outstanding before restricted stock 26,500 2,863,543 Net restricted stock issued net of cancellations 5,000 292,942 6,485 Outstanding shares at March 31, 2016 31,500 3,156,485 6,485 |
STOCK OPTIONS (Tables)
STOCK OPTIONS (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Stock Options | |
Assumption used for stock option granted | 2016 2015 Risk-free interest rate % 0.98 1.07 1.52 1.61 Expected dividend yield Expected term - years 3 4 5 5.5 Forfeiture rate % (excluding fully vested stock options) 2 5 15 Expected volatility % 0.94 1.02 0.80 1.06 |
Stock option activity | Stock Options Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term (years) Aggregate Intrinsic Value Outstanding options at January 1, 2016 1,667,233 $ 2.01 Granted 1,222,810 $ 1.28 Forfeited or expired $ Outstanding options at March 31, 2016 2,890,043 $ 1.70 9.10 $ Exercisable options at March 31, 2016 1,358,031 $ 1.89 8.81 $ |
RESTRICTED STOCK (Tables)
RESTRICTED STOCK (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Restricted Stock | |
Nonvested restricted stock activity | Restricted Stock Shares Weighted- Non-vested shares at January 1, 2016 27,842 $ 13.06 Granted 280,000 $ 1.13 Vested (452 ) $ 7.82 Forfeited (2,963 ) $ 7.70 Non-vested shares at March 31, 2016 304,427 $ 2.15 |
WARRANTS (Tables)
WARRANTS (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Warrants | |
Warrant Activity | Warrants Shares Weighted- Average Exercise Price Outstanding warrants at January 1, 2016 4,530,428 $ 3.68 Granted 1,274,280 $ 1.50 Forfeited $ Outstanding warrants at March 31, 2016 5,804,708 $ 3.20 |
Outstanding Warrants | At March 31, 2016, the Company had the following outstanding warrants: Type of Warrant/ Range of Exercise Prices Expirations Number Outstanding Weighted- Average Remaining Contractual Life (years) Weighted- Average Exercise Price Number Exercisable Derivative: $ 1.50 1/28/21 1,274,280 4.83 $ 1.50 1,274,280 $ 7.50 8/31/17 to 11/6/17 700,000 1.48 $ 7.50 700,000 Equity: $ 2.75 - $3.00 12/10/18 to 10//30/20 3,830,428 3.94 $ 2.98 3,830,428 Total outstanding 5,804,708 5,804,708 |
Warrants assumptions utilized by the Company | Risk-free interest rate % .73 - 1.48 Expected dividend yield Expected term - years (contractual term) 1.4 5 Forfeiture rate Expected volatility % 0.84 1.03 Timing of down-round triggering event August 2016 |
LIQUIDITY AND MANAGEMENT'S PL26
LIQUIDITY AND MANAGEMENT'S PLANS (Details Narrative) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Liquidity And Managements Plans | ||
Cash | $ 42,829 | |
Working capital deficit | (5,287,341) | |
Accumulated deficit | $ (152,751,161) | $ (150,129,933) |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Dec. 31, 2015 | |
Total property and equipment | $ 1,293,556 | $ 1,293,555 |
Less accumulated depreciation and amortization | 1,056,540 | 1,025,884 |
Property and equipment, net | 237,016 | 267,671 |
Computer Equipment [Member] | ||
Total property and equipment | $ 332,764 | 332,764 |
Estimated Useful Lives | 3 years | |
Office and laboratory equipment [Member] | ||
Total property and equipment | $ 628,726 | 628,726 |
Office and laboratory equipment [Member] | Minimum [Member] | ||
Estimated Useful Lives | 3 years | |
Office and laboratory equipment [Member] | Maximum [Member] | ||
Estimated Useful Lives | 5 years | |
Furniture and fixtures [Member] | ||
Total property and equipment | $ 228,099 | 228,099 |
Estimated Useful Lives | 7 years | |
Manufacturing equipment [Member] | ||
Total property and equipment | $ 61,998 | 61,998 |
Estimated Useful Lives | 5 years | |
Leasehold improvements [Member] | ||
Total property and equipment | $ 41,969 | $ 41,968 |
Leasehold improvements [Member] | Minimum [Member] | ||
Estimated Useful Lives | 3 years | |
Leasehold improvements [Member] | Maximum [Member] | ||
Estimated Useful Lives | 7 years |
CAPITALIZED SOFTWAREDEVELOPMENT
CAPITALIZED SOFTWAREDEVELOPMENT COSTS (Details Narrative) | 3 Months Ended |
Mar. 31, 2016USD ($) | |
Capitalized Software Development Costs | |
Costs associated with the application programming | $ 160,000 |
FINANCING TRANSACTIONS (Details
FINANCING TRANSACTIONS (Details) - Securities Financing Transaction Fair Value [Member] | 3 Months Ended |
Mar. 31, 2016 | |
Risk-free interest rate % | 0.68% |
Expected dividend yield | 0.00% |
Forfeiture rate | 0.00% |
Timing of down-round triggering event | Aug. 1, 2016 |
Minimum [Member] | |
Expected term - years (contractual term) | 9 months 29 days |
Expected volatility % | 0.70% |
Maximum [Member] | |
Expected term - years (contractual term) | 1 year |
Expected volatility % | 0.75% |
FINANCING TRANSACTIONS (Detai30
FINANCING TRANSACTIONS (Details 1) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Dec. 31, 2015 | |
Debt Disclosure [Abstract] | ||
Cash and other proceeds received from financing | $ 1,787,000 | |
Financing costs | (368,080) | |
Warrants | (580,870) | |
Embedded conversion feature in Notes | (154,595) | |
Amortization of debt discount | 184,966 | |
Secured convertible notes, net | $ 868,421 | $ 0 |
DERIVATIVE LIABILITY (Details)
DERIVATIVE LIABILITY (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2016 | Dec. 31, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||
Derivative warrant liability as of January 1 | $ 127,000 | $ 208,155 |
Warrants | 901,631 | 0 |
Embedded conversion feature in Notes | 249,559 | 0 |
Loss (gain) on revaluation | 325,049 | (81,155) |
Derivative liabilities as of end of period | $ 1,603,239 | $ 127,000 |
EQUITY COMPENSATION PLANS (Deta
EQUITY COMPENSATION PLANS (Details) | 3 Months Ended |
Mar. 31, 2016USD ($)shares | |
Shares Available For Issuance | |
Add back options cancelled before exercise | 0 |
Plan2003Member | |
Shares Available For Issuance | |
Total reserved for stock options and restricted stock | $ | $ 160,000 |
Net restricted stock issued net of cancellations | $ | $ (5,000) |
Stock options granted | (154,449) |
Add back options cancelled before exercise | 92,349 |
Less shares no longer available due to Plan expiration | $ | $ (92,900) |
Remaining shares available for future grants at March 31, 2016 | 0 |
Outstanding Options and Restricted Stock | |
Stock options granted | $ | $ 154,449 |
Less: Stock options cancelled | $ | $ (92,349) |
Stock options exercised | (35,600) |
Net shares outstanding before restricted stock | 26,500 |
Net restricted stock issued net of cancellations | 5,000 |
Outstanding shares at March 31, 2016 | 31,500 |
Plan2008Member | |
Shares Available For Issuance | |
Total reserved for stock options and restricted stock | $ | $ 10,000,000 |
Net restricted stock issued net of cancellations | $ | $ (292,942) |
Stock options granted | (4,293,693) |
Add back options cancelled before exercise | 1,417,150 |
Less shares no longer available due to Plan expiration | $ | $ 0 |
Remaining shares available for future grants at March 31, 2016 | 6,830,515 |
Outstanding Options and Restricted Stock | |
Stock options granted | $ | $ 4,293,693 |
Less: Stock options cancelled | $ | $ (1,417,150) |
Stock options exercised | (13,000) |
Net shares outstanding before restricted stock | 2,863,543 |
Net restricted stock issued net of cancellations | 292,942 |
Outstanding shares at March 31, 2016 | 3,156,485 |
Not Pursuant to a Plan [Member] | |
Outstanding Options and Restricted Stock | |
Stock options granted | $ | $ 310,000 |
Less: Stock options cancelled | $ | $ (243,333) |
Stock options exercised | (66,667) |
Net shares outstanding before restricted stock | 0 |
Net restricted stock issued net of cancellations | 6,485 |
Outstanding shares at March 31, 2016 | 6,485 |
EQUITY COMPENSATION PLANS (De33
EQUITY COMPENSATION PLANS (Details Narrative) - shares | Mar. 31, 2016 | Dec. 31, 2015 |
Restricted stock | 304,427 | 27,842 |
Options to purchase an aggregate of shares | 1,358,031 | |
Maximun share authorized | 150,000,000 | 150,000,000 |
Plan2003Member | ||
Restricted stock | 5,000 | |
Options to purchase an aggregate of shares | 26,500 | |
Plan2008Member | ||
Restricted stock | 292,942 | |
Options to purchase an aggregate of shares | 2,863,543 | |
Shares available for future grant | 6,830,515 | |
Maximun share authorized | 10,000,000 |
STOCK OPTIONS (Details)
STOCK OPTIONS (Details) - Director [Member] - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
STOCK OPTIONS AND RESTRICTED STOCK | ||
Risk-free interest rate minimum | 0.98% | 1.52% |
Risk-free interest rate maximum | 1.07% | 1.61% |
Expected dividend yield | $ 0 | $ 0 |
Forfeiture rate | 0.15% | |
Minimum [Member] | ||
STOCK OPTIONS AND RESTRICTED STOCK | ||
Expected term - years | 3 years | 5 years |
Forfeiture rate | 0.02% | |
Expected volatility | 0.94% | 0.80% |
Maximum [Member] | ||
STOCK OPTIONS AND RESTRICTED STOCK | ||
Expected term - years | 4 years | 5 years 6 months |
Forfeiture rate | 0.05% | |
Expected volatility | 1.02% | 1.06% |
STOCK OPTIONS (Details1)
STOCK OPTIONS (Details1) | 3 Months Ended |
Mar. 31, 2016USD ($)$ / sharesshares | |
Shares | |
Beginning Balance | shares | 1,667,233 |
Granted | shares | 1,222,810 |
Forfeited or expired | shares | 0 |
Ending Balance | shares | 2,890,043 |
Exercisable at March 31, 2014 | shares | 1,358,031 |
Weighted-Average Exercise Price | |
Beginning Balance | $ / shares | $ 2.01 |
Weighted-average stock options granted | $ / shares | 1.28 |
Forfeited or expired | $ / shares | 0 |
Ending Balance | $ / shares | 1.70 |
Exercisable at March 31, 2014 | $ / shares | $ 1.89 |
Weighted-Average Remaining Contractual Term | |
Outstanding remaining term | 9 years 1 month 6 days |
Exercisable remaining term | 8 years 9 months 22 days |
Aggregate Intrinsic Value | |
Beginning Balance | $ | $ 0 |
Ending Balance | $ | $ 0 |
STOCK OPTIONS (Details Narrativ
STOCK OPTIONS (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Stock Options | ||
Additional paid-in capital | $ 359,000 | $ 383,000 |
Unrecognized compensation expense related to non | $ 1,147,000 | |
Granted | $ 1.28 |
RESTRICTED STOCK (Details)
RESTRICTED STOCK (Details) | 3 Months Ended |
Mar. 31, 2016$ / sharesshares | |
Shares | |
Non-vested shares at January 1, 2016 | shares | 27,842 |
Granted | shares | 280,000 |
Vested | shares | (452) |
Forfeited | shares | (2,963) |
Non-vested shares at March 31, 2016k | shares | 304,427 |
Weighted- Average Grant-DateFair Value | |
Non-vested shares at January 1, 2016 | $ / shares | $ 13.06 |
Granted | $ / shares | 1.13 |
Vested | $ / shares | 7.82 |
Forfeited | $ / shares | 7.70 |
Non-vested shares at March 31, 2016 | $ / shares | $ 2.15 |
RESTRICTED STOCK (Details Narra
RESTRICTED STOCK (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Restricted Stock | ||
Non-cash restricted stock compensation expense | $ 17,000 | $ 21,000 |
Vesting criteria | · 280,000 shares of restricted stock vest 18 months from the date of issuance. | |
Unrecognized compensation expense | $ 653,000 |
WARRANTS (Details)
WARRANTS (Details) | 3 Months Ended |
Mar. 31, 2016$ / sharesshares | |
Shares | |
Outstanding warrants at January 1, 2016 | shares | 4,530,428 |
Granted | shares | 1,274,280 |
Forfeited | shares | 0 |
Outstanding warrants at March 31, 2016 | shares | 5,804,708 |
Weighted-Average Exercise Price | |
Outstanding warrants at January 1, 2016 | $ / shares | $ 3.68 |
Granted | $ / shares | 1.50 |
Forfeited | $ / shares | 0 |
Outstanding warrants at March 31, 2016 | $ / shares | $ 3.20 |
WARRANTS (Details 1)
WARRANTS (Details 1) | 3 Months Ended |
Mar. 31, 2016$ / sharesshares | |
Warrants | |
Number Outstanding | shares | 5,804,708 |
Weighted-Average Exercise price | $ / shares | $ 1.13 |
Number Exercisable | shares | 5,804,708 |
Derivative: $7.50 [Member] | |
Warrants | |
Exercise Price | $ / shares | $ 7.50 |
Expirations | 8/31/17 to 11/6/17 |
Number Outstanding | shares | 700,000 |
Weighted- Average Remaining Contractual Life (years) | 1 year 5 months 23 days |
Weighted-Average Exercise price | $ / shares | $ 7.50 |
Number Exercisable | shares | 700,000 |
Derivative: $1.50 [Member] | |
Warrants | |
Exercise Price | $ / shares | $ 1.50 |
Expirations | 1/28/21 |
Number Outstanding | shares | 1,274,280 |
Weighted- Average Remaining Contractual Life (years) | 4 years 9 months 29 days |
Weighted-Average Exercise price | $ / shares | $ 1.50 |
Number Exercisable | shares | 1,274,280 |
Equity: $2.75 - $3.00 [Member] | |
Warrants | |
Expirations | 12/10/18 to 10//30/20 |
Number Outstanding | shares | 3,830,428 |
Weighted- Average Remaining Contractual Life (years) | 3 years 11 months 9 days |
Weighted-Average Exercise price | $ / shares | $ 2.98 |
Number Exercisable | shares | 3,830,428 |
Equity: $2.75 - $3.00 [Member] | Minimum [Member] | |
Warrants | |
Exercise Price | $ / shares | $ 2.75 |
Equity: $2.75 - $3.00 [Member] | Maximum [Member] | |
Warrants | |
Exercise Price | $ / shares | $ 3 |
WARRANTS (Details 2)
WARRANTS (Details 2) - Warrant [Member] | 3 Months Ended |
Mar. 31, 2016 | |
Expected dividend yield | 0.00% |
Forfeiture rate | 0.00% |
Timing of down-round triggering event | Aug. 1, 2016 |
Minimum [Member] | |
Risk-free interest rate | 0.73% |
Expected term (contractual term) | 1 year 4 months 24 days |
Expected volatility | 0.84% |
Maximum [Member] | |
Risk-free interest rate | 1.48% |
Expected term (contractual term) | 5 years |
Expected volatility | 1.03% |
WARRANTS (Details Narrative)
WARRANTS (Details Narrative) | 3 Months Ended |
Mar. 31, 2016shares | |
Warrants | |
Warrants issued to purchase shares | 1,274,280 |