Document_And_Entity_Informatio
Document And Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Oct. 31, 2013 | |
Document Information [Line Items] | ' | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 30-Sep-13 | ' |
Document Fiscal Year Focus | '2013 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Trading Symbol | 'ILIU | ' |
Entity Common Stock, Shares Outstanding | ' | 122,417,090 |
Entity Registrant Name | 'INTERLEUKIN GENETICS INC | ' |
Entity Central Index Key | '0001037649 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
CONDENSED_BALANCE_SHEETS
CONDENSED BALANCE SHEETS (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Current assets: | ' | ' |
Cash and cash equivalents | $8,743,509 | $1,225,426 |
Accounts receivable from related party | 2,275 | 552,572 |
Trade accounts receivable | 15,875 | 47,560 |
Inventory | 132,556 | 158,238 |
Prepaid expenses | 556,987 | 417,772 |
Other current assets | 38,001 | 0 |
Total current assets | 9,489,203 | 2,401,568 |
Fixed assets, net | 321,245 | 126,946 |
Intangible assets, net | 317,182 | 399,131 |
Other assets | 0 | 38,001 |
Total assets | 10,127,630 | 2,965,646 |
Current liabilities: | ' | ' |
Accounts payable | 1,107,336 | 479,182 |
Accrued expenses | 191,323 | 165,745 |
Deferred revenue | 1,793,184 | 1,628,264 |
Total current liabilities | 3,091,843 | 2,273,191 |
Convertible debt | 0 | 14,316,255 |
Total liabilities | 3,091,843 | 16,589,446 |
Commitments and contingencies (Note 7) | ' | ' |
Stockholders’ equity (deficit): | ' | ' |
Convertible preferred stock, $0.001 par value — 6,000,000 shares authorized; 0 and 5,500,000 shares issued and outstanding at September 30, 2013 and December 31, 2012, respectively; aggregate liquidation preference of $24,000,000 at December 31, 2012 | 0 | 5,500 |
Common stock, $0.001 par value — 300,000,000 and 150,000,000 shares authorized at September 30, 2013 and December 31, 2012, respectively; 122,417,090 and 36,761,864 shares issued and outstanding at September 30, 2013 and December 31, 2012, respectively | 122,417 | 36,762 |
Additional paid-in capital | 119,763,983 | 94,030,603 |
Accumulated deficit | -112,850,613 | -107,696,665 |
Total stockholders’ equity (deficit) | 7,035,787 | -13,623,800 |
Total liabilities and stockholders’ equity (deficit) | $10,127,630 | $2,965,646 |
CONDENSED_BALANCE_SHEETS_Paren
CONDENSED BALANCE SHEETS [Parenthetical] (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Convertible preferred stock, par value | $0.00 | $0.00 |
Convertible preferred stock, shares authorized | 6,000,000 | 6,000,000 |
Convertible preferred stock, shares issued | 0 | 5,500,000 |
Convertible preferred stock, shares outstanding | 0 | 5,500,000 |
Convertible preferred stock, liquidation preference | ' | $24,000,000 |
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 300,000,000 | 150,000,000 |
Common stock, shares issued | 122,417,090 | 36,761,864 |
Common stock, shares outstanding | 122,417,090 | 36,761,864 |
CONDENSED_STATEMENTS_OF_OPERAT
CONDENSED STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Revenue: | ' | ' | ' | ' |
Genetic testing | $411,557 | $383,064 | $1,744,342 | $1,837,781 |
Other | 7,484 | 36,947 | 14,220 | 59,550 |
Total revenue | 419,041 | 420,011 | 1,758,562 | 1,897,331 |
Cost of revenue | 362,769 | 271,430 | 1,242,757 | 1,040,764 |
Gross profit | 56,272 | 148,581 | 515,805 | 856,567 |
Operating expenses: | ' | ' | ' | ' |
Research and development | 161,353 | 245,736 | 509,509 | 1,009,449 |
Selling, general and administrative | 2,035,179 | 1,044,567 | 4,610,737 | 3,357,327 |
Amortization of intangibles | 27,317 | 28,863 | 81,950 | 86,590 |
Total operating expenses | 2,223,849 | 1,319,166 | 5,202,196 | 4,453,366 |
Loss from operations | -2,167,577 | -1,170,585 | -4,686,391 | -3,596,799 |
Other income (expense): | ' | ' | ' | ' |
Interest income | 2,488 | 1,637 | 4,628 | 3,240 |
Interest expense | -10,968 | -117,276 | -472,185 | -337,206 |
Total other income (expense) | -8,480 | -115,639 | -467,557 | -333,966 |
Loss before income taxes | -2,176,057 | -1,286,224 | -5,153,948 | -3,930,765 |
Benefit for income taxes | 0 | 0 | 0 | 0 |
Net loss | ($2,176,057) | ($1,286,224) | ($5,153,948) | ($3,930,765) |
Basic and diluted net loss per common share | ($0.02) | ($0.03) | ($0.06) | ($0.11) |
Weighted average common shares outstanding, basic and diluted | 122,277,324 | 36,756,864 | 79,666,229 | 36,753,942 |
CONDENSED_STATEMENTS_OF_STOCKH
CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) (USD $) | Total | Convertible Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] |
Beginning Balance at Dec. 31, 2011 | ($11,423,231) | $5,000 | $36,710 | $91,111,640 | ($102,576,581) |
Beginning Balance (in shares) at Dec. 31, 2011 | ' | 5,000,000 | 36,709,706 | ' | ' |
Net loss | -3,930,765 | 0 | 0 | 0 | -3,930,765 |
Private placement of preferred stock, net of offering costs (in shares) | ' | 500,000 | 0 | ' | ' |
Private placement of preferred stock, net of offering costs | 2,613,970 | 500 | 0 | 2,613,470 | 0 |
Warrants issued in connection with private placement of preferred stock | 104,907 | 0 | 0 | 104,907 | ' |
Conversion of convertible debt | 0 | ' | ' | ' | ' |
Common stock issued: | ' | ' | ' | ' | ' |
Employee stock purchase plan (in shares) | ' | 0 | 52,158 | ' | ' |
Employee stock purchase plan | 8,810 | 0 | 52 | 8,758 | 0 |
Stock-based compensation expense | 170,875 | 0 | 0 | 170,875 | 0 |
Ending Balance at Sep. 30, 2012 | -12,455,434 | 5,500 | 36,762 | 94,009,650 | -106,507,346 |
Ending Balance (in shares) at Sep. 30, 2012 | ' | 5,500,000 | 36,761,864 | ' | ' |
Beginning Balance at Dec. 31, 2012 | -13,623,800 | 5,500 | 36,762 | 94,030,603 | -107,696,665 |
Beginning Balance (in shares) at Dec. 31, 2012 | ' | 5,500,000 | 36,761,864 | ' | ' |
Net loss | -5,153,948 | 0 | 0 | 0 | -5,153,948 |
Private placement of preferred stock, net of offering costs (in shares) | ' | 0 | 43,715,847 | ' | ' |
Private placement of preferred stock, net of offering costs | 11,308,920 | 0 | 43,716 | 11,265,204 | 0 |
Conversion of preferred stock (in shares) | ' | -5,500,000 | 39,089,161 | ' | ' |
Conversion of preferred stock | 0 | -5,500 | 39,089 | -33,589 | 0 |
Conversion of convertible debt (in shares) | ' | 0 | 2,521,222 | ' | ' |
Conversion of convertible debt | 14,316,255 | 0 | 2,521 | 14,313,734 | 0 |
Common stock issued: | ' | ' | ' | ' | ' |
Exercise of employee stock options (in shares) | ' | 0 | 252,000 | ' | ' |
Exercise of employee stock options | 80,520 | 0 | 252 | 80,268 | 0 |
Cancellation of restricted stock ( in shares) | ' | 0 | -2,500 | ' | ' |
Cancellation of restricted stock | 0 | 0 | -2 | 2 | 0 |
Employee stock purchase plan (in shares) | ' | 0 | 79,496 | ' | ' |
Employee stock purchase plan | 23,232 | 0 | 79 | 23,153 | 0 |
Stock-based compensation expense | 84,608 | 0 | 0 | 84,608 | 0 |
Ending Balance at Sep. 30, 2013 | $7,035,787 | $0 | $122,417 | $119,763,983 | ($112,850,613) |
Ending Balance (in shares) at Sep. 30, 2013 | ' | 0 | 122,417,090 | ' | ' |
CONDENSED_STATEMENTS_OF_STOCKH1
CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) [Parenthetical] (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Private placement of preferred stock, net of offering cost | $1,735,000 | $386,030 |
CONDENSED_STATEMENTS_OF_CASH_F
CONDENSED STATEMENTS OF CASH FLOWS (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ' | ' |
Net loss | ($5,153,948) | ($3,930,765) |
Adjustments to reconcile loss to net cash used in operating activities: | ' | ' |
Depreciation and amortization | 161,302 | 225,299 |
Stock-based compensation expense | 84,608 | 170,875 |
Change in fair value of warrants | 297,547 | 0 |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable | 31,685 | -1,442 |
Receivable from related party | 550,297 | -5,926 |
Inventory | 25,682 | 43,213 |
Prepaid expenses and other current assets | -139,215 | -48,400 |
Accounts payable | 688,154 | -76,230 |
Accrued expenses | 25,578 | 198,896 |
Deferred revenue | 164,920 | 146,472 |
Net cash used in operating activities | -3,323,390 | -3,278,008 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ' | ' |
Capital additions | -273,653 | -5,000 |
Net cash used in investing activities | -273,653 | -5,000 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ' | ' |
Proceeds from issuance of notes payable | 0 | 1,316,255 |
Proceeds from private placement of preferred stock | 0 | 3,000,000 |
Proceeds from private placement of common stock | 12,000,000 | 0 |
Private placement offering costs | -988,626 | -281,123 |
Proceeds from exercises of employee stock options | 80,520 | 0 |
Proceeds from employee stock purchase plan | 23,232 | 8,810 |
Net cash provided by financing activities | 11,115,126 | 4,043,942 |
Net increase in cash and cash equivalents | 7,518,083 | 760,934 |
Cash and cash equivalents, beginning of period | 1,225,426 | 1,728,222 |
Cash and cash equivalents, end of period | 8,743,509 | 2,489,156 |
Supplemental disclosures of cash flow information: | ' | ' |
Cash paid for interest | 219,914 | 319,478 |
Supplemental disclosures of non-cash financing activities: | ' | ' |
Warrants issued in connection with private placements | 0 | 104,907 |
Conversion of debt to common stock | 14,316,255 | 0 |
Interest related to fair value of warrants market adjustment | $297,547 | $0 |
Basis_of_Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2013 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
Basis of Presentation | ' |
Note 1—Basis of Presentation | |
Interleukin Genetics, Inc. (“the Company”) develops genetic tests for sale into the emerging personalized health market and performs testing services that can help individuals improve and maintain their health through preventive or therapeutic measures. The Company’s principal operations and markets are located in the United States. | |
The accompanying condensed financial statements include the accounts of the Company as of September 30, 2013 and December 31, 2012 and for the three and nine months ended September 30, 2013 and 2012. | |
The financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States of America for interim financial reporting. Accordingly, they do not include all of the information and notes required by generally accepted accounting principles for complete financial statements. These unaudited condensed financial statements, which, in the opinion of management, reflect all adjustments (including normal recurring adjustments) necessary for a fair presentation, should be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012. Operating results are not necessarily indicative of the results that may be expected for any future interim period or for the entire fiscal year. | |
For information regarding our critical accounting policies and estimates, please refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies and Estimates” contained in our Annual Report on Form 10-K for the year ended December 31, 2012 and Note 3 to our condensed financial statements contained herein. | |
Operating_Matters_and_Liquidit
Operating Matters and Liquidity | 9 Months Ended |
Sep. 30, 2013 | |
Going Concern [Abstract] | ' |
Operating Matters and Liquidity | ' |
Note 2—Operating Matters and Liquidity | |
The Company has experienced net operating losses since its inception through September 30, 2013. The Company had net losses of $5.1 million and $5.0 million for the years ended December 31, 2012 and 2011, respectively, and $5.2 million for the nine months ended September 30, 2013, contributing to an accumulated deficit of $112.9 million as of September 30, 2013. | |
The Company continues to take steps to reduce genetic test processing costs. Cost savings are achieved through test process improvements and the subleasing of underutilized rental space. Management believes that the current laboratory space is adequate to process high volumes of genetic tests. | |
As more fully discussed in Note 8 herein, on May 17, 2013, the Company entered into a Common Stock Purchase Agreement with various accredited investors, pursuant to which the Company sold an aggregate of 43,715,847 shares of its common stock in a private placement transaction, at a price of $0.2745 per share for gross proceeds of $12,000,000. The investors also received warrants to purchase up to an aggregate of 32,786,885 shares of common stock at an exercise price of $0.2745 per share. The warrants are exercisable as to 63% of the shares immediately and as to 37% of the shares following receipt of shareholder approval, which occurred on August 9, 2013, of an increase in the number of authorized shares of common stock from 150,000,000 to 300,000,000, and have a term of seven years from the date they became exercisable. | |
The Company’s financial statements have been prepared assuming that it will continue as a going concern which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company expects to incur additional losses in 2013 and, accordingly, is dependent on the recent financing and potential revenue to fund its operations in the commercial launch of the PST® test with Renaissance Health Services Corporation (“RHSC”), the parent corporation of eight Delta Dental member companies operating in their eight respective states. The Company currently believes RHSC may begin offering dental plans that incorporate our genetic PST® test for plan years beginning in 2014. The timing of any revenues that we may receive under this agreement is dependent upon the timing of the offering of such plans, which timing is very uncertain at this time, and is contingent upon a number of factors, including RHSC’s affiliates’ ability to develop such plans and to develop a viable market for such plans. The Company currently expects the launch of the PST genetic test with RHSC will occur in a phased approach. The Company expects RHSC in early 2014 to partner with smaller group plans. In the latter half of 2014 and 2015, RHSC is expected to offer dental plans that incorporate our genetic test to a broader group of employer customers. The Company expects to have the cash resources necessary, for at least the next twelve months, to support the launch of the PST genetic test in dental offices in collaboration with RHSC. | |
Significant_Accounting_Policie
Significant Accounting Policies | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Accounting Policies [Abstract] | ' | |||||||
Significant Accounting Policies | ' | |||||||
Note 3—Significant Accounting Policies | ||||||||
Revenue Recognition | ||||||||
Revenue from genetic testing services is recognized when there is persuasive evidence of an arrangement, service has been rendered, the sales price is determinable and collectability is reasonably assured. Service is deemed to be rendered when the results have been reported to the individual who ordered the test. To the extent that tests have been prepaid but results have not yet been reported, recognition of all related revenue is deferred. As of September 30, 2013 and December 31, 2012, the Company had deferred genetic test revenue of $1.8 million and $1.6 million, respectively. Included in deferred revenue at September 30, 2013 are $733,000 in customer payments in excess of one year old. Management continues to evaluate steps it may take in resolving these older payments. | ||||||||
Sales Commission | ||||||||
The Company accounts for sales commissions due to Amway Global under the Merchant Channel and Partner Agreement in accordance with SEC Staff Accounting Bulletin (“SAB”) 104. Commissions are recorded as an expense at the time they become due which is at the point of sale. The cost of commissions was $318,000 and $576,000 for the nine months ended September 30, 2013 and 2012, respectively. | ||||||||
Accounts Receivable | ||||||||
Accounts receivable is stated at estimated net realizable value, which is generally the invoiced amount less any estimated discount related to payment terms. The Company offers its commercial genetic test customers a 2% cash discount if payment is made by bank wire transfer within 10 days of the invoice date. No accounts receivable reserve is required at September 30, 2013 as all accounts receivable are expected to be collected. | ||||||||
Inventory | ||||||||
Inventory is carried at lower of cost (first-in, first-out method) or market and no inventory reserve is deemed necessary at September 30, 2013. As the Company does not manufacture any products, no overhead costs are included in inventory. When a kit is sold, the corresponding cost of the kit is recorded as cost of goods sold and removed from inventory. | ||||||||
Inventory consisted of the following at September 30, 2013 and December 31, 2012: | ||||||||
September 30, 2013 | December 31, 2012 | |||||||
Raw materials | $ | 122,961 | $ | 154,485 | ||||
Finished goods | 9,595 | 3,753 | ||||||
Total inventory, net | $ | 132,556 | $ | 158,238 | ||||
Income Taxes | ||||||||
The Company accounts for income taxes in accordance with FASB ASC 740, Income Taxes, which requires the recognition of taxes payable or refundable for the current year and deferred tax liabilities and assets for the future tax consequences of events that have been recognized in the financial statements or tax returns. The measurement of current and deferred tax liabilities and assets is based on provisions of the enacted tax law; the effects of future changes in tax laws or rates are not anticipated. The Company records a valuation allowance to reduce its deferred tax assets to the amount that is more likely than not to be realized. | ||||||||
Significant management judgment is required in determining the Company’s provision (benefit) for income taxes, its deferred tax assets and liabilities and any valuation allowance recorded against deferred tax assets. The Company has recorded a full valuation allowance against its deferred tax assets of approximately $28.4 million as of September 30, 2013, due to uncertainties related to its ability to utilize these assets. The valuation allowance is based on management’s estimates of taxable income by jurisdiction in which the Company operates and the period over which the deferred tax assets will be recoverable. In the event that actual results differ from these estimates or management adjusts these estimates in future periods, the Company may need to adjust its valuation allowance, which could materially impact its financial position and results of operations. | ||||||||
Due to changes in Massachusetts corporate income tax regulations enacted in 2009, the Company began filing a combined tax return with certain Alticor affiliated entities, referred to herein as “the unitary group”. The law requires corporations with net operating loss carryforwards to go back to each year in which the loss was generated and recompute the loss as if it occurred on a consolidated basis. The Company was required to include data from the newly formed unitary group as if the unitary group was in place during the loss years. As a result, the losses generated by the Company were significantly reduced through this required computation. Due to a change in common ownership, the Company is no longer qualified to join in a combined filing of the unitary group as of June 29, 2012. Accordingly, the Company will cease filing combined Massachusetts tax returns with the unitary group. The Company estimates that the combined and separate filings will have no impact on the Company's financial condition, results of operations and cash flows. | ||||||||
On January 2, 2013, President Obama signed The American Taxpayer Relief Act of 2012 (H.R. 8) legislation which extended many of the tax provisions that expired in 2011 or 2012. For financial reporting purposes, the tax impact of this legislation is taken into account in the quarter in which the legislation is enacted by Congress and signed into law by the President. Since President Obama signed the bill on January 2, 2013, the financial reporting for these legislative changes occurred in the 1st quarter, 2013. Therefore, for 2012, no deferred tax asset with respect to the federal R&D tax credit was recorded. In the 1st quarter 2013, the full deferred tax asset for the 2012 federal R&D tax credit has been recorded as a discrete item. The total impact to 2013 is a deferred tax asset of approximately $60,000 which is fully reserved. | ||||||||
As a result of the Company’s change in its capital structure during the quarter ending June 30, 2013, the Company may have undergone an IRC section 382 ownership change which would limit its ability to realize the benefit of its tax attributes (i.e., federal/state net operating losses and research and development credits) during their respective carry forward periods. Furthermore, pursuant to the change in capital structure, the Company realized cancellation of indebtedness income under IRC section 108(e)(8), which reduced the Company’s federal net operating loss carry-forward pursuant to IRC section 108(b)(2)(A), due to the fact that the Company’s liabilities exceeded the fair market value of its assets. Accordingly, the Company had a reduction in its deferred tax asset and a corresponding reduction in its valuation allowance for the quarter ending June 30, 2013. The cancellation of indebtedness income resulted from a shareholder’s conversion of debt of approximately $14.3 million into common stock of the Company prior to an additional investment by an unrelated investor. | ||||||||
The Company reviews its recognition threshold and measurement process for recording in the financial statements uncertain tax positions taken or expected to be taken in a tax return. The Company reviews all material tax positions for all years open to statute to determine whether it is more likely than not that the positions taken would be sustained based on the technical merits of those positions. The Company did not recognize any adjustments for uncertain tax positions as of and during the nine months ended September 30, 2013. However, if the Company incurred interest and penalties they would be recorded in general and administrative expenses. | ||||||||
Research and Development | ||||||||
Research and development costs are expensed as incurred. | ||||||||
Basic and Diluted Net Loss per Common Share | ||||||||
The Company applies the provisions of FASB ASC 260, Earnings per Share, which establishes standards for computing and presenting earnings per share. Basic and diluted net loss per share was determined by dividing net loss applicable to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share is the same as basic net loss per share for all the periods presented, as the effect of the potential common stock equivalents is anti-dilutive due to the loss in each period. Potential common stock equivalents excluded from the calculation of diluted net loss per share are as follows: | ||||||||
As of September 30, | ||||||||
2013 | 2012 | |||||||
Options outstanding | 1,603,150 | 1,830,767 | ||||||
Warrants outstanding | 37,269,125 | 2,187,158 | ||||||
Convertible preferred stock | — | 39,089,161 | ||||||
Convertible debt | — | 2,521,222 | ||||||
Total | 38,872,275 | 45,628,308 | ||||||
Fair Value of Financial Instruments | ||||||||
The Company, using available market information, has determined the estimated fair values of financial instruments. The stated values of cash and cash equivalents, accounts receivable and accounts payable approximate fair value due to the short term nature of these instruments. The fair value of warrants is calculated using the Black-Scholes pricing model. | ||||||||
Cash and Cash Equivalents | ||||||||
The Company maintains its cash and cash equivalents with domestic financial institutions that the Company believes to be of high credit standing. Cash and cash equivalents are available on demand and are generally in excess of FDIC insurance limits. | ||||||||
Recent Accounting Pronouncements | ||||||||
No recently issued updates or other guidance issued by the FASB through the issuance of these financial statements are expected to have a material impact on the Company’s financial reporting. | ||||||||
Related_Party_Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2013 | |
Related Party Transactions [Abstract] | ' |
Related Party Transactions | ' |
Note 4—Related Party Transactions | |
Since March 2003, the Company has maintained a broad strategic alliance with several affiliates of the Alticor Inc. family of companies, a related party, to develop and market novel nutritional and skin care products. The alliance initially included an equity investment, a multi-year research and development agreement, a licensing agreement with royalties on marketed products, the deferment of outstanding loan repayment and the refinancing of bridge financing obligations. | |
On October 20, 2009, the Company entered into a Merchant Network and Channel Partner Agreement with Amway Corp., d/b/a/ Amway Global (“Amway Global”), a subsidiary of Alticor Inc. Pursuant to this Agreement, Amway Global sells the Company’s Inherent Health® brand of genetic tests through its e-commerce website via a hyperlink to our e-commerce site. We paid Amway Global $318,000 and $576,000 in commissions for the nine months ended September 30, 2013 and 2012, respectively, representing a percentage of net sales to their customers. The Company expenses commissions owed to Amway Global at the point of sale with the customer. | |
On September 14, 2012, the Company received a purchase order from Access Business Group, LLC (“ABG”), an affiliate of Pyxis Innovations, Inc. (“Pyxis”), the Company’s largest stockholder and a subsidiary of Alticor. The order consists of kits of the Company’s Weight Management genetic test to be included in a promotional product bundle to be offered by ABG to the Amway sales channel in 2013. The total amount of the order was $1.0 million. The Company shipped $0.5 million in December 2012 and the balance in the first quarter of 2013. ABG placed an additional order for $327,000. All other amounts have been paid on these orders. The Company continues to receive additional orders from ABG for this program. During the nine months ended September 30, 2013, approximately 47% of our revenue came from tests processed through this program. | |
On September 21, 2012, the Company entered into a License Agreement with Access Business Group International LLC (“ABGI”), an affiliate of Pyxis. Pursuant to the License Agreement, the Company has granted ABGI and its affiliates a non-exclusive license to use the technology related to Interleukin’s Weight Management genetic test and to sell the Weight Management test in Europe, Russia and South Africa (the “Territories”). ABGI, or a laboratory designated by ABGI, will be responsible for processing the tests, and the Company will receive a royalty for each test sold, which royalty will increase if certain pending patent applications are issued. The License Agreement has an initial term of five years from the date of first commercial sale of the Weight Management test under the agreement. Thereafter, the term will automatically renew for additional one-year periods unless at least 60 days prior notice is delivered by either party. To date, no license fees have been earned from this agreement. | |
In connection with the execution of the License Agreement, the Company and ABGI also entered into a Professional Services Agreement (the “PSA”) pursuant to which the Company has agreed to provide services to ABGI in connection with its sale and processing of the tests within the Territories. Services will be provided pursuant to a statement of work to be entered into from time to time between the parties. Such statements of work will also specify the fees to be paid by ABGI to Interleukin for such services. The PSA has no set term and may be terminated by either party, subject to certain conditions. To date, the Company has earned $5,250 in fees from this agreement. | |
During the nine months ended September 30, 2013 and 2012, approximately 38% and 65%, respectively, of our revenue came from sales through our Merchant Network and Channel Partner Agreement with Amway Global, a subsidiary of Alticor, and 47% and 0%, respectively, of our revenue came from sales through ABG’s promotional product bundle program. | |
On February 25, 2013, the Company entered into a Preferred Participation Agreement with RHSC, for itself and on behalf of certain of its affiliates and subsidiaries. RHSC is a related party through its affiliation with Delta Dental of Michigan, Inc. (“DDMI”), a stockholder of the Company. Pursuant to this agreement, affiliates of RHSC agreed to reimburse the Company a fixed price for each PST® genetic test that the Company processed for a customer of affiliates of RHSC. In addition, if during the term of the agreement the Company offered the PST® test to any other person or party for a lower price, such lower price would then be applicable to tests processed for a customer of such affiliates of RHSC for the remainder of the term of the agreement. The pricing arrangement was subject to the satisfaction of certain milestones, including that (1) within a specified timeframe, RHSC affiliates were to develop and offer dental benefit plans for which a significant portion of such affiliate's clients are eligible that provided for use of the PST® test and reimbursement of the test at the agreed upon price (each such plan, hereinafter referred to as a “Reimbursed Dental Plan”) and (2) prior to a specified date, RHSC affiliates were to have sold policies for Reimbursed Dental Plans for the year beginning January 1, 2014. The Company agreed that for a one year period beginning on the date on which RHSC affiliates first offered a Reimbursed Dental Plan, it would make the PST® test available solely to RHSC affiliates and not to any other third party or person. This agreement had a term of three years beginning on February 25, 2013. | |
On November 1, 2013, the Company entered into an Amended and Restated Preferred Participation Agreement with RHSC, for itself and on behalf of certain of its affiliates and subsidiaries. Pursuant to this agreement, affiliates of RHSC have agreed to reimburse the Company a fixed price for each PST® genetic test that the Company processes for a customer of affiliates of RHSC. In addition, if during the term of the agreement the Company offers the PST® test to any other person or party for a lower price, such lower price shall then be applicable to tests processed for a customer of such affiliates of RHSC for the remainder of the term of the agreement. RHSC and its affiliates will continue to receive the preferred pricing (or any lower market price during the term) only for so long as affiliates of RHSC continue to: (a) work to develop and to offer Reimbursed Dental Plans for which a significant portion of employees of RHSC’s affiliates’ customers are eligible; and (b) exercise their commercially-reasonable best efforts to maximize the number of customers that offer a Reimbursed Dental Plan. In addition, under the terms of the amended agreement, the Company is no longer obligated to make the PST® test available solely to RHSC affiliates and not to any other third party or person. This amended agreement has a term of three years beginning February 25, 2013, unless terminated earlier (1) upon the mutual written agreement of us and RHSC, (2) if either party becomes the subject of bankruptcy, insolvency, liquidation or other similar proceedings, or (3) in the event of an uncured breach of the amended agreement by either party. | |
The timing of any revenues that the Company may receive under the amended agreement with RHSC is dependent upon the timing of the offering of Reimbursed Dental Plans, which timing is very uncertain at this time and is dependent on a viable market developing for such plans. The Company currently expects the launch of the PST genetic test with RHSC will occur in a phased approach. The Company expects RHSC in early 2014 to partner with smaller group plans. In the latter half of 2014 and in 2015, RHSC is expected to offer dental plans that incorporate our genetic test to a broader group of employer customers. The Company does not expect to receive any significant revenues under this agreement until the fourth quarter of 2014 or early in 2015, at the earliest, and the timing of any such revenues may be substantially later. We may never receive significant revenues under this agreement. | |
Convertible_Debt
Convertible Debt | 9 Months Ended |
Sep. 30, 2013 | |
Debt Disclosure [Abstract] | ' |
Convertible Debt | ' |
Note 5—Convertible Debt | |
On August 17, 2006, our credit facility with Pyxis was amended to provide the Company with access to approximately $14.3 million of additional working capital borrowings. Any amounts borrowed thereunder accrued interest at the prime rate and required quarterly interest payments. The principal amount of any borrowing under this credit facility was convertible at Pyxis’ election into a maximum of 2,521,222 shares of common stock, reflecting a conversion price of $5.6783 per share. | |
This credit facility had been modified several times, including on November 29, 2012, to extend the due date to March 31, 2014. | |
Immediately prior to the closing of the private placement of common stock on May 17, 2013, Pyxis converted all of the principal amount of debt outstanding into 2,521,222 shares of common stock. Accordingly, there is no convertible debt outstanding at September 30, 2013. | |
Intangible_Assets
Intangible Assets | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | |||||||
Intangible Assets | ' | |||||||
Note 6—Intangible Assets | ||||||||
Intangible assets at September 30, 2013 and December 31, 2012 consisted of the following: | ||||||||
September 30, 2013 | December 31, 2012 | |||||||
Patent costs | $ | 1,154,523 | $ | 1,154,523 | ||||
Less — Accumulated amortization | -837,341 | -755,392 | ||||||
Total | $ | 317,182 | $ | 399,131 | ||||
Patent amortization expense was $81,950 and $86,590 for the nine months ended September 30, 2013 and 2012, respectively. | ||||||||
Patent costs which are amortized on a straight-line basis over a 10-year life, are scheduled to amortize as follows: | ||||||||
Year ending December 31, | ||||||||
2013 (remaining three months) | $ | 27,317 | ||||||
2014 | 94,100 | |||||||
2015 | 77,656 | |||||||
2016 | 61,119 | |||||||
Thereafter | 56,990 | |||||||
$ | 317,182 | |||||||
Commitments_and_Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2013 | |
Commitments and Contingencies Disclosure [Abstract] | ' |
Commitments and Contingencies | ' |
Note 7—Commitments and Contingencies | |
Operating Lease | |
The Company leases its office and laboratory space under a non-cancelable operating lease expiring on March 31, 2014. In May 2010, the Company completed a sublease of approximately 6,000 square feet of underutilized office and laboratory space which successfully reduced our total space operating costs. The sublease also expires on March 31, 2014. Rent expense, net of the benefit of the sublease, was $246,000 and $253,000 for the nine months ended September 30, 2013 and 2012, respectively. The Company has not executed its renewal option and plans to negotiate for an extension of its current office and laboratory space. | |
Capital_Stock
Capital Stock | 9 Months Ended | |||||||||
Sep. 30, 2013 | ||||||||||
Capital Stock [Abstract] | ' | |||||||||
Capital Stock | ' | |||||||||
Note 8—Capital Stock | ||||||||||
Authorized Preferred and Common Stock | ||||||||||
At September 30, 2013, the Company had authorized 6,000,000 shares of $0.001 par value preferred stock. The Company had authorized 300,000,000 shares of $0.001 par value common stock of which 171,352,369 shares were outstanding or reserved for issuance. Of those, 122,417,090 shares were outstanding; 10,995,650 shares were reserved for the potential exercise of outstanding stock options and for shares of common stock available for future grants under our stock plan; 670,504 shares were reserved for the potential exercise of rights held under the Employee Stock Purchase Plan; 1,750,000 shares were reserved for the exercise of outstanding warrants to purchase common stock at an exercise price of $1.30 per share which are exercisable currently until March 5, 2015; 437,158 shares were reserved for the exercise of outstanding warrants to purchase common stock at an exercise price of $0.2745 per share which are exercisable currently until June 29, 2017; and 35,081,967 shares were reserved for the exercise of outstanding warrants to purchase common stock at an exercise price of $0.2745 per share. The warrants are exercisable as to 63% of the shares immediately and as to 37% of the shares following receipt of shareholder approval, which occurred on August 9, 2013, of an increase in the number of authorized shares of common stock from 150,000,000 to 300,000,000, and have a term of seven years from the date they became exercisable. | ||||||||||
On June 29, 2012, the Company entered into an agreement with Pyxis to exchange the 5,000,000 shares of Series A Convertible Preferred Stock held by Pyxis for 5,000,000 shares of Series A-1 Convertible Preferred Stock (the “Series A-1 Preferred Stock”) and filed a new Certificate of Designation, Preferences and Rights of Preferred Stock with the State of Delaware for the Series A-1 Preferred Stock and Series B Convertible Preferred Stock (the “Series B Preferred Stock” and, with the Series A-1 Preferred Stock, the “Preferred Stock”). Concurrently therewith, the Company completed a financing with Delta Dental of Michigan, Inc. (“DDMI”) pursuant to which DDMI purchased 500,000 shares of Series B Preferred Stock for gross proceeds of $3,000,000. Net proceeds to the Company after fees and expenses were approximately $2.7 million. In addition, fully vested warrants to purchase 437,158 shares of common stock at an exercise price of $0.2745 per share were issued to the placement agent in the transaction. These warrants expire in five years. For purposes of determining the fair value of these warrants, the Black-Scholes pricing model was used with the following assumptions: | ||||||||||
Risk-free interest rate | 1 | % | ||||||||
Expected life | 5 years | |||||||||
Expected volatility | 142.36 | % | ||||||||
Dividend yield | 0 | % | ||||||||
Using these assumptions, the fair value of the warrants is $104,907. | ||||||||||
In the event of any liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, the holders of the Preferred Stock were entitled to receive on a pari passu basis, prior and in preference to any distribution of any of the Company’s assets or surplus funds to the holders of its common stock by reason of their ownership thereof, the amount of two times the then-effective purchase price per share, as adjusted for any stock dividends, combinations or splits with respect to such shares, plus all declared but unpaid dividends on such shares for each share of Preferred Stock then held by them. The liquidation preference for the Preferred Stock at May 17, 2013, prior to the financing, was $24,000,000 in the aggregate, reflecting a liquidation preference of $18,000,000 for the Series A-1 Preferred Stock and $6,000,000 for the Series B Preferred Stock. After receiving this amount, the holders of the Preferred Stock were entitled to participate on an as-converted basis with the holders of common stock in any of the remaining assets. | ||||||||||
Each share of Series A-1 Preferred Stock was convertible at any time at the option of the holder into a number of shares of the Company’s common stock determined by dividing the then-effective purchase price ($1.80, and subject to adjustment) by the conversion price in effect on the date the certificate was surrendered for conversion. The Series A-1 Preferred Stock was convertible into 28,160,200 shares of common stock reflecting a conversion price of $0.3196 per share. Each share of Series B Preferred Stock was convertible at any time at the option of the holder into a number of shares of the Company’s common stock determined by dividing the then-effective purchase price ($6.00, and subject to adjustment) by the conversion price in effect on the date the certificate was surrendered for conversion. The Series B Preferred Stock was convertible into 10,928,961 shares of common stock reflecting a conversion price of $0.2745 per share. All shares of Preferred Stock were converted to common stock on May 17, 2013 in connection with the private placement described below, resulting in the issuance of 39,089,161 shares of common stock. As of September 30, 2013 no shares of preferred stock are issued and outstanding. | ||||||||||
Each holder of Preferred Stock was entitled to vote its shares of Preferred Stock on an as-converted basis with the holders of common stock as a single class on all matters submitted to a vote of the stockholders, except as otherwise required by applicable law. This means that each share of Preferred Stock was entitled to a number of votes equal to the number of shares of common stock into which was convertible on the applicable record date. | ||||||||||
On May 17, 2013, the Company entered into a Common Stock Purchase Agreement with various accredited investors (“the “Purchasers”), pursuant to which the Company sold securities to the Purchasers in a private placement transaction. The Company sold an aggregate of 43,715,847 shares of its common stock, at a price of $0.2745 per share for gross proceeds of $12,000,000. The Purchasers also received warrants to purchase up to an aggregate of 32,786,885 shares of Common Stock at an exercise price of $0.2745 per share (the “Warrants”). The Warrants were exercisable as to 63% of the shares immediately and as to 37% of the shares following receipt of shareholder approval of a share authorization increase and have a term of seven years from the date they become exercisable. For Warrants that were exercisable upon shareholder approval of an increase in the Company’s authorized shares of common stock, the Company recorded a non-current liability at June 30, 2013 based on the allocation of the relative fair values of the common stock and Warrants issued in the private placement. In addition, the Company recognized non-cash interest expense of $286,579 representing the increase in the fair value of the warrant liability from the date of issuance to June 30, 2013. On August 9, 2013, the Company’s shareholders’ approved an amendment to the Company’s Certificate of Incorporation to increase the number of authorized shares of common stock from 150,000,000 to 300,000,000 shares. Following the shareholder approval of the increase in authorized shares on August 9, 2013 the Company filed a certificate of amendment with the Delaware Secretary of State, which provided for adequate authorized shares for all potential common stock equivalents issued pursuant to the financing on May 17, 2013. As a result, the warrant liability reflected as a non-current liability, in the June 30, 2013 balance sheet was reclassified to shareholders’ equity at its fair value as of August 9, 2013. The fair value of the warrant liability increased $11,000 from June 30, 2013 to August 9, 2013, and was recorded as an increase to interest expense in the statement of operations for the three months ended September 30, 2013. | ||||||||||
For its services in this transaction, the placement agent received cash compensation in the amount of approximately $780,000 and the placement agent and an affiliate received warrants to purchase an aggregate of 2,295,082 shares of common stock, at an exercise price of $0.2745 per share (the “Placement Agent Warrants”). The Placement Agent Warrants became exercisable on August 9, 2013, following shareholder approval of an increase in the Company’s authorized shares of common stock and expire August 9, 2020. The cash compensation and the fair value of the warrants were recorded as issuance costs resulting in a reduction to shareholders’ equity. | ||||||||||
For purposes of determining the fair value of the warrants exercisable upon shareholder approval of an increase in the Company’s authorized shares, the Black-Scholes pricing model was used with the following assumptions: | ||||||||||
May 17, 2013 | June 30, 2013 | August 9, 2013 | ||||||||
Risk-free interest rate | 1.35 | % | 1.58 | % | 2.53 | % | ||||
Expected life | 4 years | 4 years | 4 years | |||||||
Expected volatility | 144.63 | % | 145.62 | % | 146.19 | % | ||||
Dividend Yield | 0 | % | 0 | % | 0 | % | ||||
Using these assumptions, the fair value of the warrants is $5,072,129 on May 17, 2013, $5,358,708 on June 30, 2013 and $5,369,676 on August 9, 2013. | ||||||||||
In connection with this private placement, all preferred stockholders converted their shares of Preferred Stock to common stock in accordance with the terms noted above resulting in the issuance of 39,089,161 shares of common stock. | ||||||||||
In addition, pursuant to the Common Stock Purchase Agreement, each Purchaser has the right, at any time and from time to time following the date of shareholder approval of the increase in the number of authorized shares of common stock from 150,000,000 shares to 300,000,000 shares (which occurred on August 9, 2013) and on or before June 30, 2014, to purchase at one or more subsequent closings its pro rata share of up to an aggregate of $5,000,000 of additional shares of common stock and warrants on the same terms and conditions as those set forth above. If, prior to June 30, 2014, investors have not purchased their entire pro rata share of such additional investment of $5,000,000, those who have purchased their entire pro rata share of the additional investment, will be entitled to purchase the unsold portion of the additional investment. | ||||||||||
Registration Rights Agreement | ||||||||||
On May 17, 2013, the Company also entered into a Registration Rights Agreement with the Purchasers, Pyxis, DDMI and the placement agent, pursuant to which the Company is required to file a registration statement on Form S-1 within 45 days to cover the resale of (i) the shares sold to the Purchasers and the shares of common stock underlying the Warrants, (ii) the shares of common stock issued to Pyxis upon conversion of the Series A-1 Preferred Stock and the convertible debt, (iii) the shares of common stock issued to DDMI upon the conversion of the Series B Preferred Stock, and (iv) the shares of common stock underlying the Placement Agent Warrants. The Company filed the registration statement on July 1, 2013, and it was declared effective on August 9, 2013. | ||||||||||
In addition, within 45 days following June 30, 2014, the Company will be required to file a registration statement to cover the resale of (i) any shares of common stock sold to the Purchasers pursuant to the additional investment and the shares of common stock underlying any warrants issued to Purchasers pursuant to such additional investment, and (ii) shares of common stock underlying any additional warrants issued to the placement agent in connection with the additional investment. | ||||||||||
StockBased_Compensation_Arrang
Stock-Based Compensation Arrangements | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | |||||||||||||
Stock-Based Compensation Arrangements | ' | |||||||||||||
Note 9—Stock-Based Compensation Arrangements | ||||||||||||||
Total stock-based compensation is as follows: | ||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
Stock option grants beginning of period | $ | 19,532 | $ | 73,507 | $ | 71,497 | $ | 168,294 | ||||||
Stock-based arrangements during the period: | ||||||||||||||
Stock option grants | 3,061 | 1,238 | 9,170 | 1,249 | ||||||||||
Restricted stock issued: | ||||||||||||||
Employee stock purchase plan | 1,732 | — | 3,941 | 1,332 | ||||||||||
$ | 24,325 | $ | 74,745 | $ | 84,608 | $ | 170,875 | |||||||
Stock option and restricted stock grants | ||||||||||||||
The following table details stock option and restricted stock activity for the nine months ended September 30, 2013 and 2012: | ||||||||||||||
Nine Months | September 30, | Nine Months Ended | September 30, | |||||||||||
Ended | 2013 | 2012 | ||||||||||||
Shares | Weighted Avg | Shares | Weighted Avg | |||||||||||
Exercise | Exercise | |||||||||||||
Price | Price | |||||||||||||
Outstanding, beginning of period | 2,302,000 | $ | 1.06 | 2,228,067 | $ | 1.14 | ||||||||
Stock options granted | 200,000 | 0.29 | 81,000 | 0.45 | ||||||||||
Stock options exercised | -252,000 | 0.32 | — | — | ||||||||||
Restricted stock exercised | -2,500 | 0 | -2,500 | 0 | ||||||||||
Canceled/Expired | -644,350 | 1.08 | -475,800 | 0.55 | ||||||||||
Outstanding, end of period | 1,603,150 | $ | 1.07 | 1,830,767 | $ | 1.27 | ||||||||
Exercisable, end of period | 668,700 | $ | 2.07 | 1,397,767 | $ | 1.49 | ||||||||
At September 30, 2013, there was approximately $217,000 of total unrecognized compensation related to non-vested share-based compensation arrangements granted under the Company’s stock plans. | ||||||||||||||
Restricted Stock Awards | ||||||||||||||
Holders of restricted stock awards participate fully in the rewards of stock ownership of the Company, including voting and dividend rights. Recipients of restricted stock awards are generally not required to pay any consideration to the Company for these restricted stock awards. The Company measures the fair value of the shares based on the last reported price at which the Company’s common stock traded on the date of the grant and compensation cost is recognized over the remaining service period. During the nine months ended September 30, 2013, 2,500 shares of restricted stock were cancelled and during the nine months ended September 30, 2013 and 2012, the Company granted no restricted stock awards. | ||||||||||||||
On August 9, 2013, the Company’s shareholders’ approved the 2013 Employee, Director and Consultant Equity Incentive Plan (the “2013 Plan”). During the nine month period ended September 30, 2013, the Company granted 200,000 stock options under the 2004 Employee, Director & Consultant Stock Plan (the “2004 Plan”). The 2013 Plan will allow for the issuance of up to 8,860,000 additional shares of our common stock pursuant to awards granted under the 2013 Plan and will allow for the issuance of up to a maximum of 2,435,500 shares of common stock that are represented by options outstanding under our 2004 Plan, that expire or are cancelled without delivery of shares of common stock on or after the date of stockholder approval of the 2013 Plan. At September 30, 2013, the Company had an aggregate of 9,392,500 shares of common stock available for grant under the 2013 Plan. | ||||||||||||||
It is the Company’s policy to grant stock options with an exercise price equal to the fair market value of the Company’s common stock at the grant date, and stock options to employees generally vest over four years based upon continuous service. Historically, the majority of the Company’s stock options have been granted in connection with the employee’s start date with the Company. In addition, the Company may grant stock options in recognition of promotion and/or performance. | ||||||||||||||
Employee Stock Purchase Plan | ||||||||||||||
Purchases made under the Company’s Employee Stock Purchase Plan are deemed to be compensatory because employees may purchase stock at a price equal to 85% of the fair market value of the Company’s common stock on either the first day or the last day of a calendar quarter, whichever is lower. During the nine months ended September 30, 2013 and 2012, employees purchased 79,496 and 52,158 shares, respectively, of common stock at a weighted-average purchase price of $0.29 and $0.17, respectively, while the weighted-average market value was $0.34 and $0.20 per share, respectively, resulting in compensation expense of $3,941 and $1,332, respectively. | ||||||||||||||
Industry_Risk_and_Concentratio
Industry Risk and Concentration | 9 Months Ended |
Sep. 30, 2013 | |
Risks and Uncertainties [Abstract] | ' |
Industry Risk and Concentration | ' |
Note 10—Industry Risk and Concentration | |
The Company develops genetic risk assessment tests and performs research for its own benefit. As of September 30, 2013, the Company has introduced four genetic risk assessment tests commercially. Commercial success of the Company’s genetic risk assessment tests will depend on their success as being deemed to be scientifically credible and cost-effective by consumers and the marketing success of the Company and its collaborative partners. | |
Research in the field of disease predisposing genes and genetic markers is intense and highly competitive. The Company has many competitors in the United States and abroad that have considerably greater financial, technical, marketing, and other resources available. If the Company does not discover disease predisposing genes or genetic markers and develop risk assessment tests and launch such services or products before its competitors, then the potential for significant revenues may be reduced or eliminated. | |
During the nine months ended September 30, 2013 and 2012, approximately 38% and 65%, respectively, of our revenue came from sales through our Merchant Network and Channel Partner Agreement with Amway Global, a subsidiary of Alticor, and 47% and 0%, respectively, of our revenue came from sales through ABG’s promotional product bundle program. | |
Significant_Accounting_Policie1
Significant Accounting Policies (Policies) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Accounting Policies [Abstract] | ' | |||||||
Revenue Recognition | ' | |||||||
Revenue Recognition | ||||||||
Revenue from genetic testing services is recognized when there is persuasive evidence of an arrangement, service has been rendered, the sales price is determinable and collectability is reasonably assured. Service is deemed to be rendered when the results have been reported to the individual who ordered the test. To the extent that tests have been prepaid but results have not yet been reported, recognition of all related revenue is deferred. As of September 30, 2013 and December 31, 2012, the Company had deferred genetic test revenue of $1.8 million and $1.6 million, respectively. Included in deferred revenue at September 30, 2013 are $733,000 in customer payments in excess of one year old. Management continues to evaluate steps it may take in resolving these older payments. | ||||||||
Sales Commissions | ' | |||||||
Sales Commission | ||||||||
The Company accounts for sales commissions due to Amway Global under the Merchant Channel and Partner Agreement in accordance with SEC Staff Accounting Bulletin (“SAB”) 104. Commissions are recorded as an expense at the time they become due which is at the point of sale. The cost of commissions was $318,000 and $576,000 for the nine months ended September 30, 2013 and 2012, respectively. | ||||||||
Accounts Receivable | ' | |||||||
Accounts Receivable | ||||||||
Accounts receivable is stated at estimated net realizable value, which is generally the invoiced amount less any estimated discount related to payment terms. The Company offers its commercial genetic test customers a 2% cash discount if payment is made by bank wire transfer within 10 days of the invoice date. No accounts receivable reserve is required at September 30, 2013 as all accounts receivable are expected to be collected. | ||||||||
Inventory | ' | |||||||
Inventory | ||||||||
Inventory is carried at lower of cost (first-in, first-out method) or market and no inventory reserve is deemed necessary at September 30, 2013. As the Company does not manufacture any products, no overhead costs are included in inventory. When a kit is sold, the corresponding cost of the kit is recorded as cost of goods sold and removed from inventory. | ||||||||
Inventory consisted of the following at September 30, 2013 and December 31, 2012: | ||||||||
September 30, 2013 | December 31, 2012 | |||||||
Raw materials | $ | 122,961 | $ | 154,485 | ||||
Finished goods | 9,595 | 3,753 | ||||||
Total inventory, net | $ | 132,556 | $ | 158,238 | ||||
Income Taxes | ' | |||||||
Income Taxes | ||||||||
The Company accounts for income taxes in accordance with FASB ASC 740, Income Taxes, which requires the recognition of taxes payable or refundable for the current year and deferred tax liabilities and assets for the future tax consequences of events that have been recognized in the financial statements or tax returns. The measurement of current and deferred tax liabilities and assets is based on provisions of the enacted tax law; the effects of future changes in tax laws or rates are not anticipated. The Company records a valuation allowance to reduce its deferred tax assets to the amount that is more likely than not to be realized. | ||||||||
Significant management judgment is required in determining the Company’s provision (benefit) for income taxes, its deferred tax assets and liabilities and any valuation allowance recorded against deferred tax assets. The Company has recorded a full valuation allowance against its deferred tax assets of approximately $28.4 million as of September 30, 2013, due to uncertainties related to its ability to utilize these assets. The valuation allowance is based on management’s estimates of taxable income by jurisdiction in which the Company operates and the period over which the deferred tax assets will be recoverable. In the event that actual results differ from these estimates or management adjusts these estimates in future periods, the Company may need to adjust its valuation allowance, which could materially impact its financial position and results of operations. | ||||||||
Due to changes in Massachusetts corporate income tax regulations enacted in 2009, the Company began filing a combined tax return with certain Alticor affiliated entities, referred to herein as “the unitary group”. The law requires corporations with net operating loss carryforwards to go back to each year in which the loss was generated and recompute the loss as if it occurred on a consolidated basis. The Company was required to include data from the newly formed unitary group as if the unitary group was in place during the loss years. As a result, the losses generated by the Company were significantly reduced through this required computation. Due to a change in common ownership, the Company is no longer qualified to join in a combined filing of the unitary group as of June 29, 2012. Accordingly, the Company will cease filing combined Massachusetts tax returns with the unitary group. The Company estimates that the combined and separate filings will have no impact on the Company's financial condition, results of operations and cash flows. | ||||||||
On January 2, 2013, President Obama signed The American Taxpayer Relief Act of 2012 (H.R. 8) legislation which extended many of the tax provisions that expired in 2011 or 2012. For financial reporting purposes, the tax impact of this legislation is taken into account in the quarter in which the legislation is enacted by Congress and signed into law by the President. Since President Obama signed the bill on January 2, 2013, the financial reporting for these legislative changes occurred in the 1st quarter, 2013. Therefore, for 2012, no deferred tax asset with respect to the federal R&D tax credit was recorded. In the 1st quarter 2013, the full deferred tax asset for the 2012 federal R&D tax credit has been recorded as a discrete item. The total impact to 2013 is a deferred tax asset of approximately $60,000 which is fully reserved. | ||||||||
As a result of the Company’s change in its capital structure during the quarter ending June 30, 2013, the Company may have undergone an IRC section 382 ownership change which would limit its ability to realize the benefit of its tax attributes (i.e., federal/state net operating losses and research and development credits) during their respective carry forward periods. Furthermore, pursuant to the change in capital structure, the Company realized cancellation of indebtedness income under IRC section 108(e)(8), which reduced the Company’s federal net operating loss carry-forward pursuant to IRC section 108(b)(2)(A), due to the fact that the Company’s liabilities exceeded the fair market value of its assets. Accordingly, the Company had a reduction in its deferred tax asset and a corresponding reduction in its valuation allowance for the quarter ending June 30, 2013. The cancellation of indebtedness income resulted from a shareholder’s conversion of debt of approximately $14.3 million into common stock of the Company prior to an additional investment by an unrelated investor. | ||||||||
The Company reviews its recognition threshold and measurement process for recording in the financial statements uncertain tax positions taken or expected to be taken in a tax return. The Company reviews all material tax positions for all years open to statute to determine whether it is more likely than not that the positions taken would be sustained based on the technical merits of those positions. The Company did not recognize any adjustments for uncertain tax positions as of and during the nine months ended September 30, 2013. However, if the Company incurred interest and penalties they would be recorded in general and administrative expenses. | ||||||||
Research and Development | ' | |||||||
Research and Development | ||||||||
Research and development costs are expensed as incurred. | ||||||||
Basic and Diluted Net Loss per Common Share | ' | |||||||
Basic and Diluted Net Loss per Common Share | ||||||||
The Company applies the provisions of FASB ASC 260, Earnings per Share, which establishes standards for computing and presenting earnings per share. Basic and diluted net loss per share was determined by dividing net loss applicable to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share is the same as basic net loss per share for all the periods presented, as the effect of the potential common stock equivalents is anti-dilutive due to the loss in each period. Potential common stock equivalents excluded from the calculation of diluted net loss per share are as follows: | ||||||||
As of September 30, | ||||||||
2013 | 2012 | |||||||
Options outstanding | 1,603,150 | 1,830,767 | ||||||
Warrants outstanding | 37,269,125 | 2,187,158 | ||||||
Convertible preferred stock | — | 39,089,161 | ||||||
Convertible debt | — | 2,521,222 | ||||||
Total | 38,872,275 | 45,628,308 | ||||||
Fair Value of Financial Instruments | ' | |||||||
Fair Value of Financial Instruments | ||||||||
The Company, using available market information, has determined the estimated fair values of financial instruments. The stated values of cash and cash equivalents, accounts receivable and accounts payable approximate fair value due to the short term nature of these instruments. The fair value of warrants is calculated using the Black-Scholes pricing model. | ||||||||
Cash and Cash Equivalents | ' | |||||||
Cash and Cash Equivalents | ||||||||
The Company maintains its cash and cash equivalents with domestic financial institutions that the Company believes to be of high credit standing. Cash and cash equivalents are available on demand and are generally in excess of FDIC insurance limits. | ||||||||
Recent Accounting Pronouncements | ' | |||||||
Recent Accounting Pronouncements | ||||||||
No recently issued updates or other guidance issued by the FASB through the issuance of these financial statements are expected to have a material impact on the Company’s financial reporting. | ||||||||
Significant_Accounting_Policie2
Significant Accounting Policies (Tables) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Accounting Policies [Abstract] | ' | |||||||
Inventory | ' | |||||||
Inventory consisted of the following at September 30, 2013 and December 31, 2012: | ||||||||
September 30, 2013 | December 31, 2012 | |||||||
Raw materials | $ | 122,961 | $ | 154,485 | ||||
Finished goods | 9,595 | 3,753 | ||||||
Total inventory, net | $ | 132,556 | $ | 158,238 | ||||
Potential Common Stock Equivalents Excluded from Calculation of Diluted Net Loss per Share | ' | |||||||
Potential common stock equivalents excluded from the calculation of diluted net loss per share are as follows: | ||||||||
As of September 30, | ||||||||
2013 | 2012 | |||||||
Options outstanding | 1,603,150 | 1,830,767 | ||||||
Warrants outstanding | 37,269,125 | 2,187,158 | ||||||
Convertible preferred stock | — | 39,089,161 | ||||||
Convertible debt | — | 2,521,222 | ||||||
Total | 38,872,275 | 45,628,308 | ||||||
Intangible_Assets_Tables
Intangible Assets (Tables) | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | |||||||
Summary of Intangible Assets | ' | |||||||
Intangible assets at September 30, 2013 and December 31, 2012 consisted of the following: | ||||||||
September 30, 2013 | December 31, 2012 | |||||||
Patent costs | $ | 1,154,523 | $ | 1,154,523 | ||||
Less — Accumulated amortization | -837,341 | -755,392 | ||||||
Total | $ | 317,182 | $ | 399,131 | ||||
Patent Costs Amortized on a Straight-Line Basis | ' | |||||||
Patent costs which are amortized on a straight-line basis over a 10-year life, are scheduled to amortize as follows: | ||||||||
Year ending December 31, | ||||||||
2013 (remaining three months) | $ | 27,317 | ||||||
2014 | 94,100 | |||||||
2015 | 77,656 | |||||||
2016 | 61,119 | |||||||
Thereafter. | 56,990 | |||||||
$ | 317,182 | |||||||
Capital_Stock_Tables
Capital Stock (Tables) | 9 Months Ended | |||||||||
Sep. 30, 2013 | ||||||||||
Series A-1 Preferred Stock [Member] | ' | |||||||||
Black-Scholes Pricing Model Assumptions to Determine Fair Value of Warrants | ' | |||||||||
These warrants expire in five years. For purposes of determining the fair value of these warrants, the Black-Scholes pricing model was used with the following assumptions: | ||||||||||
Risk-free interest rate | 1 | % | ||||||||
Expected life | 5 years | |||||||||
Expected volatility | 142.36 | % | ||||||||
Dividend yield | 0 | % | ||||||||
Placement Agent Warrants [Member] | ' | |||||||||
Black-Scholes Pricing Model Assumptions to Determine Fair Value of Warrants | ' | |||||||||
For purposes of determining the fair value of the warrants exercisable upon shareholder approval of an increase in the Company’s authorized shares, the Black-Scholes pricing model was used with the following assumptions: | ||||||||||
May 17, 2013 | June 30, 2013 | August 9, 2013 | ||||||||
Risk-free interest rate | 1.35 | % | 1.58 | % | 2.53 | % | ||||
Expected life | 4 years | 4 years | 4 years | |||||||
Expected volatility | 144.63 | % | 145.62 | % | 146.19 | % | ||||
Dividend Yield | 0 | % | 0 | % | 0 | % | ||||
StockBased_Compensation_Arrang1
Stock-Based Compensation Arrangements (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | |||||||||||||
Total Compensation Cost Recorded for Stock-Based Compensation | ' | |||||||||||||
Total stock-based compensation is as follows: | ||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
Stock option grants beginning of period | $ | 19,532 | $ | 73,507 | $ | 71,497 | $ | 168,294 | ||||||
Stock-based arrangements during the period: | ||||||||||||||
Stock option grants | 3,061 | 1,238 | 9,170 | 1,249 | ||||||||||
Restricted stock issued: | ||||||||||||||
Employee stock purchase plan | 1,732 | — | 3,941 | 1,332 | ||||||||||
$ | 24,325 | $ | 74,745 | $ | 84,608 | $ | 170,875 | |||||||
Common Stock Weighted Average Purchase Price | ' | |||||||||||||
The following table details stock option and restricted stock activity for the nine months ended September 30, 2013 and 2012: | ||||||||||||||
Nine Months | September 30, | Nine Months Ended | September 30, | |||||||||||
Ended | 2013 | 2012 | ||||||||||||
Shares | Weighted Avg | Shares | Weighted Avg | |||||||||||
Exercise | Exercise | |||||||||||||
Price | Price | |||||||||||||
Outstanding, beginning of period | 2,302,000 | $ | 1.06 | 2,228,067 | $ | 1.14 | ||||||||
Stock options granted | 200,000 | 0.29 | 81,000 | 0.45 | ||||||||||
Stock options exercised | -252,000 | 0.32 | — | — | ||||||||||
Restricted stock exercised | -2,500 | 0 | -2,500 | 0 | ||||||||||
Canceled/Expired | -644,350 | 1.08 | -475,800 | 0.55 | ||||||||||
Outstanding, end of period | 1,603,150 | $ | 1.07 | 1,830,767 | $ | 1.27 | ||||||||
Exercisable, end of period | 668,700 | $ | 2.07 | 1,397,767 | $ | 1.49 | ||||||||
Operating_Matters_and_Liquidit1
Operating Matters and Liquidity - Additional Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended | 1 Months Ended | 9 Months Ended | 12 Months Ended | 1 Months Ended | |||||||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Aug. 09, 2013 | 17-May-13 | Dec. 31, 2012 | Jun. 29, 2012 | 17-May-13 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Jun. 29, 2012 | |
Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Accumulated Deficit | Accumulated Deficit | Accumulated Deficit | Series B Preferred Stock [Member] | |||||||||
Line of Credit Facility [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Accumulated deficit | ($112,850,613) | ' | ($112,850,613) | ' | ' | ' | ($107,696,665) | ' | ' | ' | ' | ' | ' | ' | ' |
Loss from operations | -2,167,577 | -1,170,585 | -4,686,391 | -3,596,799 | ' | ' | ' | ' | ' | ' | ' | 5,200,000 | 5,100,000 | 5,000,000 | ' |
Stock Issued During Period, Shares, New Issues | ' | ' | ' | ' | ' | ' | ' | ' | 43,715,847 | 43,715,847 | 0 | ' | ' | ' | ' |
Share Price | ' | ' | ' | ' | ' | ' | ' | ' | $0.27 | ' | ' | ' | ' | ' | ' |
Proceeds from private placement of common stock | ' | ' | $12,000,000 | $0 | ' | ' | ' | ' | $12,000,000 | ' | $12,000,000 | ' | ' | ' | $3,000,000 |
Class of Warrant or Right, Exercise Price of Warrants or Rights | ' | ' | ' | ' | ' | 0.2745 | ' | 0.2745 | ' | ' | ' | ' | ' | ' | ' |
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | ' | ' | ' | ' | ' | 32,786,885 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Class Of Warrant Or Right Exercisable Percentage Immediately | ' | ' | ' | ' | 63.00% | 63.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Class Of Warrant Or Right Exercisable Percentage Subject To Shareholder Approval | ' | ' | ' | ' | 37.00% | 37.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common Stock Shares Authorized Increase | 300,000,000 | ' | 300,000,000 | ' | 300,000,000 | 300,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common Stock, Shares Authorized | 300,000,000 | ' | 300,000,000 | ' | 150,000,000 | 150,000,000 | 150,000,000 | ' | ' | 300,000,000 | ' | ' | ' | ' | ' |
Significant_Accounting_Policie3
Significant Accounting Policies - Additional Information (Detail) (USD $) | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | |
Significant Accounting Policies [Line Items] | ' | ' | ' |
Deferred revenue | $1,800,000 | ' | $1,600,000 |
Sales commissions | 318,000 | 576,000 | ' |
Percentage of cash discount offered to customers | 2.00% | ' | ' |
Tax Credit Carryforward, Deferred Tax Asset | 60,000 | ' | ' |
Cash discount payment period | '10 days | ' | ' |
Deferred tax assets, valuation allowance | 28,400,000 | ' | ' |
Debt Conversion Converted Instrument Into Common Stock Approximate Value | 14,300,000 | ' | ' |
Customer Payment [Member] | ' | ' | ' |
Significant Accounting Policies [Line Items] | ' | ' | ' |
Deferred revenue | $733,000 | ' | ' |
Inventory_Detail
Inventory (Detail) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Inventory Disclosure [Line Items] | ' | ' |
Raw materials | $122,961 | $154,485 |
Finished goods | 9,595 | 3,753 |
Total inventory, net | $132,556 | $158,238 |
Potential_Common_Stock_Equival
Potential Common Stock Equivalents Excluded from Calculation of Diluted Net Loss per Share (Detail) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Potential common stock equivalents excluded from the calculation of diluted net loss per share | 38,872,275 | 45,628,308 |
Stock Option [Member] | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Potential common stock equivalents excluded from the calculation of diluted net loss per share | 1,603,150 | 1,830,767 |
Warrant [Member] | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Potential common stock equivalents excluded from the calculation of diluted net loss per share | 37,269,125 | 2,187,158 |
Convertible Preferred Stock [Member] | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Potential common stock equivalents excluded from the calculation of diluted net loss per share | 0 | 39,089,161 |
Convertible Debt [Member] | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Potential common stock equivalents excluded from the calculation of diluted net loss per share | 0 | 2,521,222 |
Related_Party_Transactions_Add
Related Party Transactions - Additional Information (Detail) (USD $) | 9 Months Ended | 1 Months Ended | 0 Months Ended | 9 Months Ended | ||||||||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Sep. 14, 2012 | Sep. 21, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2012 | Sep. 30, 2013 | |
Amway Global [Member] | Amway Global [Member] | Access Business Group, Llc [Member] | Access Business Group, Llc [Member] | Access Business Group International Llc [Member] | Access Business Group International Llc [Member] | ABG [Member] | ABG [Member] | Maximum [Member] | Minimum [Member] | |||
Amway Global [Member] | Amway Global [Member] | |||||||||||
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Commissions paid | $318,000 | $576,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Purchase Order Received | ' | ' | ' | ' | ' | 1,000,000 | ' | ' | ' | ' | ' | ' |
Purchase Order Shipped | ' | ' | ' | ' | 500,000 | ' | ' | ' | ' | ' | ' | ' |
License Agreement Terms | ' | ' | ' | ' | ' | ' | '5 years | ' | ' | ' | ' | ' |
Prior Period Notice | ' | ' | ' | ' | ' | ' | '60 days | ' | ' | ' | ' | ' |
Proceeds from License Fees Received | ' | ' | ' | ' | ' | ' | ' | 5,250 | ' | ' | ' | ' |
Revenue From Test Process | 47.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Concentration Risk, Percentage | ' | ' | 38.00% | 65.00% | ' | ' | ' | ' | 47.00% | 0.00% | 65.00% | 38.00% |
Accounts Receivable, Net | ' | ' | ' | ' | ' | ' | ' | ' | $327,000 | ' | ' | ' |
Convertible_Debt_Additional_In
Convertible Debt - Additional Information (Detail) (USD $) | 9 Months Ended | 1 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Sep. 30, 2013 | 17-May-13 | Aug. 17, 2006 | Aug. 17, 2006 |
Pyxis Innovations Inc [Member] | Pyxis Innovations Inc [Member] | Pyxis Innovations Inc [Member] | ||
Line of Credit [Member] | Line of Credit [Member] | Working Capital [Member] | ||
Debt Instrument [Line Items] | ' | ' | ' | ' |
Working capital borrowings | ' | ' | ' | $14.30 |
Credit facility extended date | 31-Mar-14 | ' | ' | ' |
Convertible debt conversion price | ' | ' | $5.68 | ' |
Debt Conversion, Converted Instrument, Shares Issued | ' | 2,521,222 | ' | ' |
Intangible_Assets_Detail
Intangible Assets (Detail) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Schedule of Intangible Assets Disclosure [Line Items] | ' | ' |
Patent costs | $1,154,523 | $1,154,523 |
Less - Accumulated amortization | -837,341 | -755,392 |
Total | $317,182 | $399,131 |
Patent_Costs_Amortized_on_Stra
Patent Costs Amortized on Straight-Line Basis (Detail) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Expected Amortization Expense [Line Items] | ' | ' |
2013 (remaining three months) | $27,317 | ' |
2014 | 94,100 | ' |
2015 | 77,656 | ' |
2016 | 61,119 | ' |
Thereafter | 56,990 | ' |
Total | $317,182 | $399,131 |
Intangible_Assets_Additional_I
Intangible Assets - Additional Information (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Schedule of Intangible Assets Disclosure [Line Items] | ' | ' | ' | ' |
Patent amortization expense | $27,317 | $28,863 | $81,950 | $86,590 |
Patent life | ' | ' | '10 years | ' |
Commitments_and_Contingencies_
Commitments and Contingencies - Additional Information (Detail) (USD $) | 1 Months Ended | 9 Months Ended | |
31-May-10 | Sep. 30, 2013 | Sep. 30, 2012 | |
Loss Contingencies [Line Items] | ' | ' | ' |
Operating Leases, Rent Expense | ' | $246,000 | $253,000 |
Property under sublease | '6,000 square feet | ' | ' |
Capital_Stock_Additional_Infor
Capital Stock - Additional Information (Detail) (USD $) | 1 Months Ended | 9 Months Ended | 1 Months Ended | 9 Months Ended | 9 Months Ended | 9 Months Ended | 1 Months Ended | 9 Months Ended | 9 Months Ended | |||||||||||||
Aug. 09, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | 17-May-13 | Dec. 31, 2012 | Jun. 29, 2012 | 17-May-13 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | 17-May-13 | Jun. 29, 2012 | Jun. 29, 2012 | Sep. 30, 2013 | 17-May-13 | Sep. 30, 2013 | Aug. 09, 2013 | 17-May-13 | |
Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Employee Stock Purchase Plan [Member] | Warrant 2 [Member] | Warrant 3 [Member] | Warrant 4 [Member] | Series A-1 Preferred Stock [Member] | Series A-1 Preferred Stock [Member] | Series A-1 Preferred Stock [Member] | Series B Preferred Stock [Member] | Series B Preferred Stock [Member] | Series B Preferred Stock [Member] | Placement Agent Warrants [Member] | Placement Agent Warrants [Member] | Placement Agent Warrants [Member] | |||||||
Stockholders Equity [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Convertible preferred stock, par value | ' | $0.00 | ' | ' | $0.00 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Convertible preferred stock, shares authorized | ' | 6,000,000 | ' | ' | 6,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | 5,000,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Convertible preferred stock, shares issued | ' | 0 | ' | ' | 5,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | 5,000,000 | ' | 5,000,000 | 500,000 | ' | ' | ' | ' | ' |
Common stock, shares authorized | 150,000,000 | 300,000,000 | ' | 150,000,000 | 150,000,000 | ' | ' | 300,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock, par value | ' | $0.00 | ' | ' | $0.00 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock, outstanding or reserved for issuance | ' | 171,352,369 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock, shares outstanding | ' | 122,417,090 | ' | ' | 36,761,864 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares reserved for conversion of Preferred to common stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 28,160,200 | ' | ' | ' | ' | ' | ' | ' | ' |
Shares reserved for potential exercise | ' | 10,995,650 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares reserved for exercise of outstanding warrants | ' | ' | ' | ' | ' | 437,158 | ' | ' | ' | ' | 1,750,000 | 437,158 | 35,081,967 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Warrants exercise price per share | ' | ' | ' | 0.2745 | ' | 0.2745 | ' | ' | ' | ' | 1.3 | 0.2745 | 0.2745 | ' | ' | ' | ' | ' | ' | 0.2745 | ' | ' |
Expiration date of warrants | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5-Mar-15 | 29-Jun-17 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Proceeds from private placement of preferred stock | ' | $12,000,000 | $0 | ' | ' | ' | $12,000,000 | ' | $12,000,000 | ' | ' | ' | ' | ' | ' | ' | $3,000,000 | ' | ' | ' | ' | ' |
Convertible preferred stock current conversion price | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.32 | ' | ' | ' | $0.27 | ' | ' | ' | ' |
Net Proceeds from issuance of Series B Convertible preferred Stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,700,000 | ' | ' | ' | ' | ' |
Fair Value Adjustment of Warrants | ' | 104,907 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Convertible preferred stock, liquidation preference | ' | ' | ' | 24,000,000 | 24,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 18,000,000 | ' | ' | ' | 6,000,000 | ' | ' | ' |
Convertible preferred stock, effective purchase price | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $1.80 | ' | ' | ' | $6 | ' | ' | ' | ' |
Shares Reserved For Exercise Of Rights | ' | ' | ' | ' | ' | ' | ' | ' | ' | 670,504 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Conversion of Stock, Shares Converted | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10,928,961 | ' | ' | ' | ' |
Stock Issued During Period, Shares, New Issues | ' | ' | ' | ' | ' | ' | 43,715,847 | 43,715,847 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share Price | ' | ' | ' | ' | ' | ' | $0.27 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Class of Warrant or Right, Number of Securities Called by Warrants or Rights | ' | ' | ' | 32,786,885 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Class Of Warrant Or Right Exercisable Percentage Immediately | 63.00% | ' | ' | 63.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Class Of Warrant Or Right Exercisable Percentage Subject To Shareholder Approval | 37.00% | ' | ' | 37.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Conversion of Stock, Shares Issued | ' | 39,089,161 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Increase In Common Stock Shares Authorized | 300,000,000 | 300,000,000 | ' | 300,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Additional Pro Rata Investment In Common Stock And Warrants | ' | 5,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Warrants Fair Value Disclosure | ' | 5,358,708 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,369,676 | 5,072,129 |
Warrants To Purchase Of Common Stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,295,082 | ' | ' |
Noncash interest expense | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 286,579 | ' | ' |
Cash compensation expenses | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 780,000 | ' | ' |
Percentage Of Warrants Exercisable | ' | 63.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage Of Warrants Exercisable After Shareholder Approval | ' | 37.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Convertible Preferred Stock, Shares Issued upon Conversion | ' | ' | ' | ' | ' | ' | ' | 39,089,161 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Increase In Interest Expense | $11,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Exercisable Term Of Common stock | '7 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
BlackScholes_Pricing_Model_Ass
Black-Scholes Pricing Model Assumptions to Determine Fair Value of Warrants (Detail) (Series A-1 Preferred Stock [Member]) | 9 Months Ended |
Sep. 30, 2013 | |
Series A-1 Preferred Stock [Member] | ' |
Stockholders Equity [Line Items] | ' |
Risk-free interest rate | 1.00% |
Expected life | '5 years |
Expected volatility | 142.36% |
Dividend yield | 0.00% |
BlackScholes_Pricing_Model_Ass1
Black-Scholes Pricing Model Assumptions to Determine Fair Value of Placement Agent Warrants (Detail1) (Placement Agent Warrants [Member]) | 0 Months Ended | 1 Months Ended | 6 Months Ended |
Aug. 09, 2013 | 17-May-13 | Jun. 30, 2013 | |
Placement Agent Warrants [Member] | ' | ' | ' |
Stockholders Equity [Line Items] | ' | ' | ' |
Risk-free interest rate | 2.53% | 1.35% | 1.58% |
Expected life | '4 years | '4 years | '4 years |
Expected volatility | 146.19% | 144.63% | 145.62% |
Dividend Yield | 0.00% | 0.00% | 0.00% |
StockBased_Compensation_Arrang2
Stock-Based Compensation Arrangements - Additional Information (Detail) (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized, Share-based Awards Other than Options | $217,000 | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures, Total | 200,000 | 81,000 |
Common Stock [Member] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Stock Issued During Period, Shares, Employee Stock Purchase Plans | 79,496 | 52,158 |
Stock Issued During Period, Shares, Restricted Stock Award, Forfeited | 2,500 | ' |
2004 Employee, Director and Consultant Stock Plan [Member] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures, Total | 200,000 | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 2,435,500 | ' |
Employee Stock Purchase Plan [Member] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Stock purchase price | 85.00% | ' |
Stock Issued During Period, Shares, Employee Stock Purchase Plans | 79,496 | 52,158 |
Weighted-average purchase price | $0.29 | 0.17 |
Weighted-average fair value | $0.34 | 0.2 |
Compensation expense | 3,941 | 1,332 |
Plan 2013 [Member] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 8,860,000 | ' |
New 2013 Employee Director And Consultant Stock Plan [Member] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Aggregate intrinsic value | $9,392,500 | ' |
Recovered_Sheet1
Stock-based compensation arrangements (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Stock-based compensation expense | $24,325 | $74,745 | $84,608 | $170,875 |
Stock option grants beginning of period [Member] | ' | ' | ' | ' |
Stock-based compensation expense | 19,532 | 73,507 | 71,497 | 168,294 |
Stock option grants [Member] | ' | ' | ' | ' |
Stock-based compensation expense | 3,061 | 1,238 | 9,170 | 1,249 |
Employee Stock Purchase Plan [Member] | ' | ' | ' | ' |
Stock-based compensation expense | $1,732 | $0 | $3,941 | $1,332 |
Employee_Stock_Purchase_Plan_D
Employee Stock Purchase Plan (Detail) (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Share | ' | ' |
Outstanding, beginning of period | 2,302,000 | 2,228,067 |
Stock options granted | 200,000 | 81,000 |
Stock options exercised | -252,000 | 0 |
Restricted stock exercised | -2,500 | -2,500 |
Canceled/Expired | -644,350 | -475,800 |
Outstanding, end of period | 1,603,150 | 1,830,767 |
Exercisable, end of period | 668,700 | 1,397,767 |
Weighted Avg Exercise Price | ' | ' |
Outstanding, beginning of period | $1.06 | $1.14 |
Stock options granted | $0.29 | $0.45 |
Stock options exercised | $0.32 | $0 |
Restricted stock exercised | $0 | $0 |
Canceled/Expired | $1.08 | $0.55 |
Outstanding, end of period | $1.07 | $1.27 |
Exercisable, end of period | $2.07 | $1.49 |
Industry_Risk_and_Concentratio1
Industry Risk and Concentration - Additional Information (Detail) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
ABG [Member] | ' | ' |
Sales Revenue, Goods, Net, Percentage | 47.00% | 0.00% |
Amway Global [Member] | ' | ' |
Sales Revenue, Goods, Net, Percentage | 38.00% | 65.00% |