DOCUMENT_AND_ENTITY_INFORMATIO
DOCUMENT AND ENTITY INFORMATION (USD $) | 12 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2014 | Mar. 31, 2015 | Jun. 30, 2014 |
Entity Information [Line Items] | |||
Entity Registrant Name | TRANSGENOMIC INC | ||
Entity Central Index Key | 1043961 | ||
Current Fiscal Year End Date | -19 | ||
Entity Filer Category | Smaller Reporting Company | ||
Document Type | 10-K | ||
Document Period End Date | 31-Dec-14 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | FALSE | ||
Entity Common Stock, Shares Outstanding | 11,857,078 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $24.60 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | ||
In Thousands, unless otherwise specified | ||||
CURRENT ASSETS: | ||||
Cash and cash equivalents | $1,609 | $1,626 | ||
Accounts receivable (net of allowances for doubtful accounts of $7,947 and $3,838, respectively) | 7,627 | 5,314 | ||
Inventories (net of allowances of $628 and $799, respectively) | 3,005 | 3,957 | ||
Other current assets | 1,191 | 938 | ||
Total current assets | 13,432 | 11,835 | ||
PROPERTY AND EQUIPMENT: | ||||
Equipment | 11,369 | 11,255 | ||
Furniture, fixtures & leasehold improvements | 3,877 | 3,874 | ||
Property, plant and equipment, gross | 15,246 | 15,129 | ||
Less: accumulated depreciation | -13,764 | -13,126 | ||
Property, plant and equipment, net | 1,482 | 2,003 | ||
OTHER ASSETS: | ||||
Goodwill | 6,918 | 6,918 | ||
Intangibles (net of accumulated amortization of $5,970 and $4,598, respectively) | 7,964 | 9,195 | ||
Other assets | 210 | 327 | ||
Assets | 30,006 | 30,278 | ||
CURRENT LIABILITIES: | ||||
Current maturities of long term debt | 462 | 242 | ||
Accounts payable | 4,871 | 2,860 | ||
Accrued compensation | 1,129 | 1,330 | ||
Accrued expenses | 2,550 | 2,037 | ||
Deferred revenue | 1,035 | 1,088 | ||
Other current liabilities | 1,068 | 1,068 | ||
Total current liabilities | 11,115 | 8,625 | ||
LONG TERM LIABILITIES: | ||||
Long term debt less current maturities | 7,375 | 6,318 | ||
Common stock warrant liability | 145 | 600 | ||
Other long-term liabilities | 1,688 | 1,303 | ||
Accrued preferred stock dividend | 3,130 | 1,986 | ||
Total liabilities | 23,453 | 18,832 | ||
STOCKHOLDERS’ EQUITY: | ||||
Preferred stock, $.01 par value, 15,000,000 shares authorized, 4,029,502 and 2,586,205 shares issued and outstanding, respectively | 40 | 26 | ||
Common stock, $.01 par value, 150,000,000 shares authorized, 8,084,471 and 7,353,695 shares issued and outstanding, respectively | 81 | [1] | 73 | [1] |
Additional paid-in capital | 189,680 | [1] | 179,459 | [1] |
Accumulated other comprehensive income | 340 | 390 | ||
Accumulated deficit | -183,588 | -168,502 | ||
Total stockholders’ equity | 6,553 | 11,446 | ||
Liabilities and equity | $30,006 | $30,278 | ||
[1] | The common stock shares and additional paid-in capital for all periods presented reflect the one-for-twelve reverse stock split which took effect on January 27, 2014. |
CONSOLIDATED_BALANCE_SHEETS_PA
CONSOLIDATED BALANCE SHEETS PARENTHETICALS (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | ||
In Thousands, except Share data, unless otherwise specified | ||||
Statement of Financial Position [Abstract] | ||||
Allowances for bad debt | $7,947 | $3,838 | ||
Allowances for obsolescence | 628 | 799 | ||
Accumulated amortization on intangibles | $5,970 | $4,598 | ||
STOCKHOLDERS’ EQUITY: | ||||
Preferred stock, par value (in usd per share) | $0.01 | $0.01 | ||
Preferred stock, shares authorized | 15,000,000 | 15,000,000 | ||
Preferred stock, shares issued | 4,029,502 | 2,586,205 | ||
Preferred stock, shares outstanding | 4,029,502 | 2,586,205 | ||
Common stock, par value (in usd per share) | $0.01 | [1] | $0.01 | [1] |
Common stock, shares authorized | 150,000,000 | [1] | 100,000,000 | [1] |
Common stock, shares issued | 8,084,471 | [1] | 7,353,695 | [1] |
Common stock, shares outstanding | 8,084,471 | [1] | 7,353,695 | [1] |
[1] | The common stock shares and additional paid-in capital for all periods presented reflect the one-for-twelve reverse stock split which took effect on January 27, 2014. |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 12 Months Ended | |||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
Income Statement [Abstract] | ||||||
NET SALES | $27,083 | $27,544 | $31,480 | |||
COST OF GOODS SOLD | 17,362 | 16,790 | 18,348 | |||
Gross profit | 9,721 | 10,754 | 13,132 | |||
OPERATING EXPENSES: | ||||||
Selling, general and administrative | 24,146 | 23,301 | 20,145 | |||
Research and development | 2,897 | 3,212 | 2,491 | |||
Operating Expenses | 27,043 | 26,513 | 22,636 | |||
LOSS FROM OPERATIONS | -17,322 | -15,759 | -9,504 | |||
OTHER INCOME (EXPENSE): | ||||||
Interest expense, net | -665 | -642 | -888 | |||
Warrant revaluation | 455 | 300 | 2,200 | |||
Gain on sale of product line | 4,114 | 0 | 0 | |||
Other, net | 0 | 60 | 11 | |||
Other Income (Expense) | 3,904 | -282 | 1,323 | |||
LOSS BEFORE INCOME TAXES | -13,418 | -16,041 | -8,181 | |||
INCOME TAX EXPENSE (BENEFIT) | 524 | -54 | 146 | |||
NET LOSS | -13,942 | -15,987 | -8,327 | |||
PREFERRED STOCK DIVIDENDS AND ACCRETION | -1,144 | -726 | -660 | |||
NET LOSS AVAILABLE TO COMMON STOCKHOLDERS | ($15,086) | ($16,713) | ($8,987) | |||
BASIC AND DILUTED LOSS PER COMMON SHARE (IN USD PER SHARE) | ($2.01) | [1] | ($2.30) | [1] | ($1.55) | [1] |
BASIC AND DILUTED WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING | 7,493,844 | [1] | 7,266,642 | [1] | 5,794,785 | [1] |
[1] | Net loss per share and the number of shares used in the per share calculations for all periods presented reflect the one-for-twelve reverse stock split which took effect on January 27, 2014. |
CONSOLIDATED_STATEMENTS_OF_OPE1
CONSOLIDATED STATEMENTS OF OPERATIONS PARENTHETICALS | 0 Months Ended |
Jan. 27, 2014 | |
Income Statement [Abstract] | |
Common stock reverse stock split, conversion ratio | 0.0833 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Statement of Comprehensive Income [Abstract] | |||
Net Loss | ($13,942) | ($15,987) | ($8,327) |
Other Comprehensive Loss; foreign currency translation adjustment, net of tax | -50 | -45 | 99 |
Comprehensive Loss | ($13,992) | ($16,032) | ($8,228) |
CONSOLIDATED_STATEMENTS_OF_STO
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (USD $) | Total | Series B Preferred Stock | Preferred Stock | Preferred Stock | Common Stock | Additional Paid-in Capital | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss) | ||||
In Thousands, except Share data, unless otherwise specified | Series B Preferred Stock | Series B Preferred Stock | |||||||||||
Balance at Dec. 31, 2011 | $11,048 | $26 | $46 | [1] | $153,442 | [1] | ($142,802) | $336 | |||||
Balance, shares at Dec. 31, 2011 | 2,586,205 | 4,135,478 | [1] | ||||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||||
Net loss | -8,327 | -8,327 | |||||||||||
Foreign currency translation adjustment | 99 | 99 | |||||||||||
Non-cash stock-based compensation | 731 | 731 | [1] | ||||||||||
Issuance of shares of common stock, shares | [1] | 1,667 | |||||||||||
Issuance of shares of common stock | 10 | 0 | [1] | 10 | [1] | ||||||||
Private placement, net, shares | [1] | 1,833,333 | |||||||||||
Stock issued during period | 17,373 | 18 | [1] | 17,355 | [1] | ||||||||
Dividends on preferred stock | -660 | -660 | |||||||||||
Balance at Dec. 31, 2012 | 20,274 | 26 | 64 | [1] | 171,538 | [1] | -151,789 | 435 | |||||
Balance, shares at Dec. 31, 2012 | 2,586,205 | 5,970,478 | [1] | ||||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||||
Net loss | -15,987 | -15,987 | |||||||||||
Foreign currency translation adjustment | -45 | -45 | |||||||||||
Non-cash stock-based compensation | 360 | 360 | [1] | ||||||||||
Private placement, net, shares | [1] | 1,383,217 | |||||||||||
Stock issued during period | 7,570 | 14 | [1] | 7,556 | [1] | ||||||||
Dividends on preferred stock | -726 | -726 | |||||||||||
Other | 0 | -5 | [1] | 5 | [1] | ||||||||
Balance at Dec. 31, 2013 | 11,446 | 26 | 73 | [1] | 179,459 | [1] | -168,502 | 390 | |||||
Balance, shares at Dec. 31, 2013 | 2,586,205 | 7,353,695 | [1] | ||||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||||||
Net loss | -13,942 | -13,942 | |||||||||||
Foreign currency translation adjustment | -50 | -50 | |||||||||||
Non-cash stock-based compensation | 977 | 977 | [1] | ||||||||||
Private placement, net, shares | [1] | 730,776 | |||||||||||
Stock issued during period | 2,361 | 6,905 | 14 | 8 | [1] | 2,353 | [1] | 6,891 | [1] | ||||
Dividends on preferred stock | -1,144 | -1,144 | |||||||||||
Preferred stock agreement, shares | 1,443,297 | ||||||||||||
Balance at Dec. 31, 2014 | $6,553 | $40 | $81 | [1] | $189,680 | [1] | ($183,588) | $340 | |||||
Balance, shares at Dec. 31, 2014 | 4,029,502 | 8,084,471 | [1] | ||||||||||
[1] | The common stock shares and additional paid-in capital for all periods presented reflect the one-for-twelve reverse stock split which took effect on January 27, 2014. |
CONSOLIDATED_STATEMENTS_OF_STO1
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY PARENTHETICALS | 0 Months Ended |
Jan. 27, 2014 | |
Statement of Stockholders' Equity [Abstract] | |
Common stock reverse stock split, conversion ratio | 0.0833 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
CASH FLOWS USED IN OPERATING ACTIVITIES: | |||
Net loss | ($13,942) | ($15,987) | ($8,327) |
Adjustments to reconcile net loss to net cash flows used in operating activities: | |||
Depreciation and amortization | 2,248 | 2,748 | 2,278 |
Non-cash, stock based compensation | 939 | 462 | 731 |
Provision for losses on doubtful accounts | 6,119 | 5,548 | 2,468 |
Provision for losses on inventory obsolescence | 61 | 217 | 129 |
Warrant revaluation | -455 | -300 | -2,200 |
Loss on disposal of fixed assets | 0 | 9 | 23 |
Deferred interest | 330 | 0 | 0 |
Deferred income taxes | 631 | 0 | 0 |
Gain on sale of product line | -4,114 | 0 | 0 |
Other | 0 | -62 | 0 |
Changes in operating assets and liabilities, net of acquisitions: | |||
Accounts receivable | -8,488 | -2,757 | -2,913 |
Inventories | 715 | 908 | -1,373 |
Prepaid expenses and other current assets | -50 | 122 | -209 |
Accounts payable | 2,029 | 801 | -576 |
Accrued expenses and other liabilities | 275 | -182 | -235 |
Net cash flows used in operating activities | -13,702 | -8,473 | -10,204 |
CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES: | |||
Acquisitions | 0 | -849 | -3,551 |
Purchase of property and equipment | -130 | -605 | -882 |
Purchase of short term investments | 0 | 0 | -8,994 |
Proceeds from the sale of short term investments | 0 | 0 | 8,994 |
Proceeds from sale of product line | 3,800 | 0 | 0 |
Change in other assets | -45 | -312 | -445 |
Net cash flows provided by (used in) investing activities | 3,625 | -1,766 | -4,878 |
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES: | |||
Proceeds from note payable | 7,190 | 6,560 | 0 |
Principal payments on capital lease obligations | -144 | -348 | -328 |
Payment of deferred financing costs | 0 | -241 | 0 |
Issuance of preferred stock, net | 6,906 | 0 | 0 |
Issuance of common stock and related warrants, net | 2,360 | 7,570 | 17,483 |
Principal payments on note payable | -6,242 | -6,171 | -2,551 |
Net cash flows provided by financing activities | 10,070 | 7,370 | 14,604 |
EFFECT OF FOREIGN CURRENCY EXCHANGE RATE CHANGES ON CASH | -10 | -2 | 29 |
NET CHANGE IN CASH AND CASH EQUIVALENTS | -17 | -2,871 | -449 |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 1,626 | 4,497 | 4,946 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 1,609 | 1,626 | 4,497 |
Cash paid during the period for: | |||
Interest | 229 | 724 | 964 |
Income taxes, net | 0 | 9 | 123 |
SUPPLEMENTAL DISCLOSURE OF NON-CASH INFORMATION | |||
Acquisition of equipment through capital leases | 0 | 0 | 175 |
Dividends accrued on preferred stock | 1,144 | 726 | 660 |
Note payable converted to Equity | 0 | 0 | 3,000 |
Acquisition of intangibles | $0 | $0 | $849 |
BUSINESS_DESCRIPTION
BUSINESS DESCRIPTION | 12 Months Ended | |
Dec. 31, 2014 | ||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Business Description | BUSINESS DESCRIPTION | |
Business Description. | ||
Transgenomic, Inc. (“we”, “us”, “our”, the “Company” or “Transgenomic”) is a global biotechnology company advancing personalized medicine for the detection and treatment of cancer and inherited diseases through its proprietary molecular technologies and world-class clinical and research services. A key goal is to bring our Multiplexed ICE COLD-PCR (“MX-ICP”) product to the clinical market rapidly through strategic licensing agreements, enabling the use of blood and other bodily fluids for more effective and patient-friendly diagnosis, monitoring and treatment of cancer. | ||
MX-ICP is a simple, proprietary chemistry that amplifies the ability to detect genetic mutations by 100 - 400 fold. This chemistry has been validated internally on all currently available sequencing platforms, including Sanger, Next Gen Sequencing and Digital PCR. By enhancing the level of detection of genetic mutations and suppressing the normal, “wild-type” DNA, several benefits are provided. It is generally understood that most current technologies are unable to consistently identify mutations that occur in less than approximately 5% of a sample. However, many mutations found at much lower levels, even down to 0.01% are known to be clinically relevant and can have significant consequences to a patient: both in terms of how they will respond to a given drug or treatment and how a given tumor is likely to change over time. More importantly, in our view, significantly improving the level of detection while using blood, saliva and even urine as a source for DNA, rather than depending on painful, expensive and potentially dangerous tumor biopsies, is an important advancement in patient care with respect to cancer detection, treatment and monitoring of the disease and can result in significant cost savings for the healthcare system by replacing invasive procedures with the simple collection of blood or other bodily fluid. By broadening the types of samples that can be used for testing and allowing all sequencing platforms to provide improved identification of low level mutations, MX-ICP has the potential to make testing much more patient friendly, enable genetic monitoring of disease progression and more effectively guide treatment protocols, and reduce the overall cost of diagnosis and monitoring while also improving patient outcomes. | ||
Currently, our operations are organized and reviewed by management along its major product lines and presented in the following two business segments; | ||
• | Laboratory Services. Our laboratories specialize in genetic testing for cardiology, neurology and mitochondrial disorders, and for oncology. Our Patient Testing laboratories located in New Haven, Connecticut and Omaha, Nebraska are certified under the Clinical Laboratory Improvement Amendment (“CLIA”) as high complexity laboratories and our Omaha facility is accredited by the College of American Pathologists. Our Biomarker Identification laboratory located in Omaha provides pharmacogenomics research services supporting Phase II and Phase III clinical trials conducted by pharmaceutical and biotechnology companies. Our laboratories employ a variety of genomic testing service technologies, including our new, high performance MX-ICP technology. ICE COLD-PCR is a proprietary ultra-high sensitivity platform technology with breakthrough potential to enable wide adoption of personalized, precision medicine in cancer and other diseases. It can be run in any laboratory that contains standard PCR systems. MX-ICP enables detection of multiple known and unknown mutations from virtually any sample type, including tissue biopsies, blood, urine, saliva, cell-free DNA (“cfDNA”) and circulating tumor cells (“CTCs”) at levels greater than 1,000-fold higher than standard DNA sequencing techniques. It is easy to implement and use within existing workflows. | |
• | Genetic Assays and Platforms. Our proprietary product in this business segment is the WAVE® System, which has broad applicability to genetic variation detection in both molecular genetic research and molecular diagnostics. We also distribute bio-instruments produced by other manufacturers (“OEM Equipment”) through our sales and distribution network. Service contracts to maintain installed systems are sold and supported by our technical support personnel. The installed WAVE base and some OEM Equipment platforms generate a demand for consumables that are required for the continued operation of the bio-instruments. We develop, manufacture and sell these consumable products. In addition, we manufacture and sell consumable products that can be used on multiple, independent platforms. These products include a range of chromatography columns. | |
Going Concern | ||
The consolidated financial statements have been prepared using accounting principles generally accepted in the United States of America applicable for a going concern which assumes that the Company will realize its assets and discharge its liabilities in the ordinary course of business. The Company has incurred substantial operating losses and has used cash in its operating activities for the past few years. As of December 31, 2014, the Company had working capital of approximately $2.3 million. During the first quarter of 2015, the Company received net proceeds of approximately $7.1 million from the issuance and sale of unsecured convertible promissory notes and issuance of common stock. Including the recent financing, the Company’s ability to continue as a going concern is dependent upon a combination of generating additional revenue, improving cash collections, potentially selling underutilized assets and, if needed, raising necessary financing to meet its obligations and pay its liabilities arising from normal business operations when they come due. The outcome of these matters cannot be predicted with any certainty at this time and raises substantial doubt that the Company will be able to continue as a going concern. These consolidated financial statements do not include any adjustments to the amounts and classification of assets and liabilities that may be necessary should the Company be unable to continue as a going concern. The Company cannot be certain that additional financing will be available on acceptable terms, or at all, and its failure to raise capital when needed could limit its ability to continue its operations. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||
Summary of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||||||||||||
Principles of Consolidation. | ||||||||||||||||
The consolidated financial statements include the accounts of Transgenomic, Inc. and its wholly owned subsidiary. All inter-company balances and transactions have been eliminated in consolidation. | ||||||||||||||||
Risks and Uncertainties. | ||||||||||||||||
Certain risks and uncertainties are inherent in the Company’s our day-to-day operations and to the process of preparing our financial statements. The more significant of those risks are presented below and throughout the notes to the financial statements. | ||||||||||||||||
Use of Estimates. | ||||||||||||||||
The preparation of consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of net sales and expenses during the reporting period. In addition, estimates and assumptions associated with the determination of the fair value of certain assets and related impairments require considerable judgment by management. The key estimates included in the consolidated financial statements include stock option valuations, goodwill and intangible valuations, accounts receivable and inventory valuations, warrant valuations and contractual allowances. Actual results could differ from the estimates and assumptions used in preparing these consolidated financial statements. | ||||||||||||||||
Basis of Presentation. | ||||||||||||||||
On January 15, 2014, the Board of Directors of the Company approved a reverse split of the Company’s common stock, par value $0.01, at a ratio of one-for twelve. This reverse stock split became effective on January 27, 2014 and, unless otherwise indicated, all share amounts, per share data, share prices, exercise prices and conversion rates set forth in these notes and the accompanying consolidated financial statements have, where applicable, been adjusted retroactively to reflect this reverse stock split. | ||||||||||||||||
Reclassifications. | ||||||||||||||||
Certain prior period amounts of selling, general and administrative expenses have been reclassified to cost of goods sold in order to conform to the current period presentation. These reclassifications had no effect on previously reported net earnings. The amounts reclassified were $1.7 million and $1.9 million for the years ended December 31, 2013 and 2012, respectively. | ||||||||||||||||
Fair Value. | ||||||||||||||||
Unless otherwise specified, book value approximates fair market value. The Company’s Level 1 financial instruments include cash and cash equivalents. The Company’s Level 3 financial instruments include the common stock warrant liability, preferred stock warrant liability and conversion feature, and debt. Due to its variable interest component, debt approximates fair value. The common stock warrant liability and Series A Convertible Preferred Stock (“Series A Preferred Stock”) warrant liability and conversion feature are recorded at fair value. See Footnote 13 “Fair Value”. | ||||||||||||||||
Cash and Cash Equivalents. | ||||||||||||||||
Cash and cash equivalents include cash and investments with original maturities at the date of acquisition of three months or less. Such investments presently consist of temporary overnight investments. | ||||||||||||||||
Concentrations of Cash. | ||||||||||||||||
From time to time, we may maintain a cash position with financial institutions in amounts that exceed federally insured limits. We have not experienced any losses on such accounts as of December 31, 2014. | ||||||||||||||||
Accounts Receivable. | ||||||||||||||||
The following is a summary of activity for the allowance for doubtful accounts during the years ended December 31, 2014, 2013 and 2012: | ||||||||||||||||
Dollars in Thousands | ||||||||||||||||
Beginning | Provision | Write Offs | Ending | |||||||||||||
Balance | Balance | |||||||||||||||
Twelve months ended December 31, 2014 | $ | 3,838 | $ | 6,119 | $ | (2,010 | ) | $ | 7,947 | |||||||
Twelve months ended December 31, 2013 | $ | 2,171 | $ | 5,548 | $ | (3,881 | ) | $ | 3,838 | |||||||
Twelve months ended December 31, 2012 | $ | 1,088 | $ | 2,468 | $ | (1,385 | ) | $ | 2,171 | |||||||
While payment terms are generally 30 days, we have also provided extended payment terms of up to 90 days in certain cases. We operate globally and some of the international payment terms can be greater than 90 days. Accounts receivable are carried at original invoice amount and shown net of allowance for doubtful accounts and contractual allowances. The estimate made for doubtful accounts is based on a review of all outstanding amounts on a quarterly basis. The estimate for contractual allowances is based on contractual terms or historical reimbursement rates and is recorded when revenue is recorded. We determine the allowance for doubtful accounts and contractual allowances by regularly evaluating individual payor receivables and considering a payor’s financial condition, credit history, reimbursement rates and current economic conditions. Accounts receivable are written off when deemed uncollectible and after all collection efforts have been exhausted. Recoveries of accounts receivable previously written off are recorded as a reduction in bad debt expense when received. | ||||||||||||||||
Inventories. | ||||||||||||||||
Inventories are stated at the lower of cost or market net of allowance for obsolete and slow moving inventory. Cost is computed using standard costs for finished goods and average or latest actual cost for raw materials and work in process, which approximates the first-in, first-out (FIFO) method. We write down slow-moving and obsolete inventory by the difference between the value of the inventory and our estimate of the reduced value based on potential future uses, the likelihood that overstocked inventory will be sold and the expected selling prices of the inventory. If our ability to realize value on slow-moving or obsolete inventory is less favorable than assumed, additional write-downs of the inventory may be required. | ||||||||||||||||
The following is a summary of activity for the allowance for obsolete inventory during the years ended December 31, 2014, 2013 and 2012: | ||||||||||||||||
Dollars in Thousands | ||||||||||||||||
Beginning | Provision | Write Offs | Ending | |||||||||||||
Balance | Balance | |||||||||||||||
Twelve months ended December 31, 2014 | $ | 799 | $ | 61 | $ | (232 | ) | $ | 628 | |||||||
Twelve months ended December 31, 2013 | $ | 616 | $ | 217 | $ | (34 | ) | $ | 799 | |||||||
Twelve months ended December 31, 2012 | $ | 511 | $ | 129 | $ | (24 | ) | $ | 616 | |||||||
We determine the allowance for obsolescence by evaluating inventory quarterly for items deemed to be slow moving or obsolete. | ||||||||||||||||
Property and Equipment. | ||||||||||||||||
Property and equipment are carried at cost. Depreciation is computed by the straight-line method over the estimated useful lives of the related assets as follows: | ||||||||||||||||
Leasehold improvements | 1 to 10 years | |||||||||||||||
Furniture and fixtures | 3 to 7 years | |||||||||||||||
Production equipment | 3 to 7 years | |||||||||||||||
Computer equipment | 3 to 7 years | |||||||||||||||
Research and development equipment | 2 to 7 years | |||||||||||||||
Depreciation expense related to property and equipment during the years ended December 31, 2014, 2013 and 2012 was $0.5 million, $0.6 million and $0.7 million, respectively. Included in depreciation for each of the years ended December 31, 2014, 2013 and 2012 was $0.3 million related to equipment acquired under capital leases. | ||||||||||||||||
Goodwill. | ||||||||||||||||
Goodwill is tested for impairment annually utilizing a combination of income and market approaches. The income approach applies a discounted cash flow methodology to the Company’s future period projections and the more heavily weighted market approach uses market available information on the Company. We perform this impairment analysis during the fourth quarter of each year or when a significant event occurs that may impact goodwill. Impairment may occur when the carrying value of the reporting unit exceeds its fair value. If the carrying value of the reporting unit exceeds its fair value, the fair value of all identifiable tangible and intangible assets and liabilities is determined as part of a hypothetical purchase price allocation to determine the amount of goodwill impairment. No impairment of goodwill has occurred to date. | ||||||||||||||||
Intangibles. | ||||||||||||||||
Intangible assets include intellectual property, patents and acquired products. At December 31, 2013, the Company revised its estimate of useful lives on certain intangible assets, which caused decreased amortization expense in 2014 by $0.4 million. | ||||||||||||||||
1. Intellectual Property. Initial costs paid to license intellectual property from independent third parties are capitalized and amortized using the straight-line method over the license period. Ongoing royalties related to such licenses are expensed as incurred. | ||||||||||||||||
2. Patents. We capitalize legal costs, filing fees and other expenses associated with obtaining patents on new discoveries and amortize these costs using the straight-line method over the shorter of the legal life of the patent or its economic life beginning on the date the patent is issued. | ||||||||||||||||
3. Acquired Products. As part of the FAMILION acquisition and acquisition of certain intangible assets from Axial, the Company acquired technology, in process technology, trademarks/tradenames, customer relationships, covenants not to compete and third party relationships. These costs will be amortized pursuant to the straight-line method over their estimated economic life of seven to ten years. See Footnote 5 “Intangible Assets and Other Assets”. | ||||||||||||||||
We review our amortizable long lived assets for impairment whenever events indicate that the carrying amount of the asset (group) may not be recoverable. An impairment loss may be needed if the sum of the future undiscounted cash flows is less than the carrying amount of the asset (group). The amount of the loss would be determined by comparing the fair market value of the asset to the carrying amount of the asset (group). No loss has been recorded during the years ended December 31, 2014, 2013 or 2012. | ||||||||||||||||
Common Stock Warrants. | ||||||||||||||||
Our issued and outstanding 2012 warrants to purchase common stock do not qualify to be treated as equity and accordingly, are recorded as a liability (“Common Stock Warrant Liability”). The Common Stock Warrant Liability was initially recorded at fair value using a Monte Carlo simulation model. We are required to present these instruments at fair value at each reporting date and any changes in fair values are recorded as an adjustment to earnings. The Common Stock Warrant Liability is considered a Level 3 financial instrument. See Footnote 13 - “Fair Value”. | ||||||||||||||||
Stock Based Compensation. | ||||||||||||||||
All stock-based awards to date have exercise prices equal to the market price of our common stock on the date of grant and have ten-year contractual terms. Unvested options as of December 31, 2014 had vesting periods of one or three years from the date of grant. None of the stock options outstanding at December 31, 2014 are subject to performance or market-based vesting conditions. | ||||||||||||||||
We measure and recognize compensation expense for all stock-based awards made to employees and directors, including stock options. Compensation expense, net of estimated forfeitures, is based on the calculated fair value of the awards as measured at the grant date and is expensed over the service period of the awards. | ||||||||||||||||
Income Taxes. | ||||||||||||||||
Deferred tax assets and liabilities are determined based on the differences between the financial reporting and tax basis of assets and liabilities at each balance sheet date using tax rates expected to be in effect in the year the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent that it is more likely than not that they will not be realized. Our policy is to record interest and penalties directly related to income taxes as income tax expense in the Consolidated Statements of Operations. | ||||||||||||||||
Net Sales Recognition. | ||||||||||||||||
Revenue is realized and earned when all of the following criteria are met: | ||||||||||||||||
• | Persuasive evidence of an arrangement exists; | |||||||||||||||
• | Delivery has occurred or services have been rendered; | |||||||||||||||
• | The seller’s price to the buyer is fixed or determinable; and | |||||||||||||||
• | Collectability is reasonably assured. | |||||||||||||||
In Laboratory Services, net sales from Patient Testing laboratories are recognized on an individual test basis and take place when the test report is completed, reviewed and sent to the client less the reserve for insurance, Medicare and Medicaid contractual adjustments. There are no deferred net sales associated with our Patient Testing services. Adjustments to the allowances, based on actual receipts from third party payers, are reflected in the estimated contractual allowance applied prospectively. In our Biomarker Identification laboratory, we perform services on a project by project basis. When we receive payment in advance, we recognize revenue when we deliver the service. These projects typically do not extend beyond one year. At December 31, 2014 and 2013, deferred net sales associated with pharmacogenomics research projects, included in the balance sheet in deferred revenue, was $0.3 million and $0.2 million, respectively. | ||||||||||||||||
Net sales of Genetic Assays and Platforms products are recognized in accordance with the terms of the sales arrangement. Such recognition is based on receipt of an unconditional customer order and transfer of title and risk of ownership to the customer, typically upon shipment of the product under a purchase order. Our sales terms do not provide for the right of return unless the product is damaged or defective. Net sales from certain services associated with the analytical instruments, to be performed subsequent to shipment of the products, is deferred and recognized when the services are provided. Such services, mainly limited to installation and training services that are not essential to the functionality of the instruments, typically are performed in a timely manner subsequent to shipment of the instrument. We also enter into various service contracts that cover installed instruments. These contracts cover specific time periods and net sales associated with these contracts are deferred and recognized ratably over the service period. At December 31, 2014 and 2013, deferred net sales, mainly associated with our service contracts, included in the balance sheet in deferred revenue was approximately $0.7 million and $0.9 million, respectively. | ||||||||||||||||
Taxes collected from customers and remitted to government agencies for specific net sales producing transactions are recorded net with no effect on the income statement. | ||||||||||||||||
Research and Development. | ||||||||||||||||
Research and development and various collaboration costs are charged to expense when incurred. | ||||||||||||||||
Translation of Foreign Currency. | ||||||||||||||||
Our foreign subsidiary uses the local currency of the country in which it is located as its functional currency. Its assets and liabilities are translated into U.S. dollars at the exchange rates in effect at the balance sheet date. A translation loss of $0.1 million is reported in other comprehensive income on the accompanying consolidated balance sheet as of both December 31, 2014 and 2013. Revenues and expenses are translated at the average rates during the period. For transactions that are not denominated in the functional currency, we recognized a foreign currency translation loss of less than $0.1 million for the year ended December 31, 2014, foreign currency translation income of less than $0.1 million for the year ended December 31, 2013 and a foreign currency translation loss of less than $0.1 million for the year ended December 31, 2012. | ||||||||||||||||
Earnings Per Share. | ||||||||||||||||
Basic earnings per share is calculated based on the weighted-average number of shares of common stock outstanding during each period. Diluted earnings per share includes shares issuable upon exercise of outstanding stock options, warrants or conversion rights that have exercise or conversion prices below the market value of our common stock, as long as the effect is not anti-dilutive. Options, warrants and conversion rights pertaining to 6,613,572, 3,785,709 and 2,471,670 shares of our common stock have been excluded from the computation of diluted earnings per share at December 31, 2014, 2013 and 2012, respectively. The options, warrants and conversion rights that were exercisable in 2014, 2013 and 2012 were not included because the effect would be anti-dilutive due to the net loss. | ||||||||||||||||
Recently Issued Accounting Pronouncements. | ||||||||||||||||
In April 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, which changes the criteria for reporting a discontinued operation. Under this standard, a disposal of part of an organization that has a major effect on its operations and financial results is a discontinued operation. This guidance is effective prospectively for us beginning January 1, 2015 with earlier application permitted, but only for disposals (or classifications as held for sale) that have not been reported previously. When adopted, we do not expect that this guidance will have a material impact on our financial condition, results of operations or cash flows. | ||||||||||||||||
In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers. This guidance requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to a customer. This ASU will replace most existing revenue recognition guidance in generally accepted accounting principles in the U.S. when it becomes effective on January 1, 2017. Early application is not permitted, but the standard permits the use of either the retrospective or cumulative effect transition method. We have not selected a transition method and are currently evaluating the impact this guidance will have on our financial condition, results of operations and cash flows. | ||||||||||||||||
In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40). The new guidance addresses management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. The standard will be effective for the first interim period within annual reporting periods beginning after December 15, 2016. Early adoption is permitted. We do not expect to early adopt this guidance and do not believe that the adoption of this guidance will have a material impact on our consolidated financial statements. |
SALE_OF_PRODUCT_LINE
SALE OF PRODUCT LINE | 12 Months Ended |
Dec. 31, 2014 | |
Discontinued Operations and Disposal Groups [Abstract] | |
SALE OF PRODUCT LINE | SALE OF PRODUCT LINE |
On July 1, 2014, we entered into a Surveyor Kit Patent, Technology, and Inventory Purchase Agreement (the “Purchase Agreement”) with Integrated DNA Technologies, Inc. (“IDT”). Pursuant to the Purchase Agreement, on July 1, 2014, we transferred and sold to IDT all of our right, title and interest in and to our Surveyor Kits product line and related technology, including, without limitation, all patents, patent applications, licenses, technology, know-how and trademarks relating to the Surveyor Kits product line technology and our inventory of Surveyor products (collectively, the “Surveyor Technology”). | |
In consideration for the purchase of the Surveyor Technology, IDT paid us an initial payment of $3.65 million. IDT will pay us an additional amount equal to an aggregate of $600,000 in four equal installments, the first of which was required to be made by, and was received on, October 1, 2014, and the last of which must be made by July 1, 2015. Additionally, if net sales of the Surveyor Kits by IDT exceed a certain threshold during the period beginning on October 1, 2014 and ending on September 30, 2015, IDT will be obligated to pay us an additional earn-out payment equal to a percentage of the net sales exceeding the threshold that is in the middle double digits. | |
Pursuant to the Purchase Agreement, IDT granted us a worldwide, irrevocable, exclusive, fully paid-up, royalty-free, transferable right and license to the Surveyor Technology for clinical uses, including, without limitation, the provision of diagnostic and pharmaceutical services and any other clinical uses in connection with our Laboratory Services segment. | |
For the twelve months ended December 31, 2014, we recorded a gain on the sale of the Surveyor Technology of approximately $4.1 million, based on the net proceeds in excess of the total divested net assets. |
INVENTORIES
INVENTORIES | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Inventory Disclosure [Abstract] | ||||||||
INVENTORIES | INVENTORIES | |||||||
Inventories (net of allowance for slow moving and obsolescence) consisted of the following: | ||||||||
Dollars in Thousands | ||||||||
December 31, | December 31, | |||||||
2014 | 2013 | |||||||
Finished goods | $ | 2,139 | $ | 2,978 | ||||
Raw materials and work in process | 1,302 | 1,567 | ||||||
Demonstration inventory | 192 | 211 | ||||||
$ | 3,633 | $ | 4,756 | |||||
Less allowances | (628 | ) | (799 | ) | ||||
Total | $ | 3,005 | $ | 3,957 | ||||
INTANGIBLE_ASSETS_AND_OTHER_AS
INTANGIBLE ASSETS AND OTHER ASSETS | 12 Months Ended | |||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||
Intangible Assets and Other Assets | INTANGIBLE ASSETS AND OTHER ASSETS | |||||||||||||||||||||||
Long-lived intangible assets and other assets consisted of the following: | ||||||||||||||||||||||||
Dollars in Thousands | ||||||||||||||||||||||||
December 31, 2014 | December 31, 2013 | |||||||||||||||||||||||
Cost | Accumulated | Net Book | Cost | Accumulated | Net Book | |||||||||||||||||||
Amortization | Value | Amortization | Value | |||||||||||||||||||||
Acquired technology | $ | 9,009 | $ | 3,995 | $ | 5,014 | $ | 9,009 | $ | 3,175 | $ | 5,834 | ||||||||||||
Assay royalties | 1,434 | 819 | 615 | 1,434 | 614 | 820 | ||||||||||||||||||
Third party payor relationships | 367 | 98 | 269 | 367 | 73 | 294 | ||||||||||||||||||
Tradenames and trademarks | 824 | 351 | 473 | 824 | 233 | 591 | ||||||||||||||||||
Customer relationships | 652 | 98 | 554 | 652 | 54 | 598 | ||||||||||||||||||
Covenants not to compete | 184 | 138 | 46 | 184 | 77 | 107 | ||||||||||||||||||
Patents | 1,198 | 385 | 813 | 1,153 | 336 | 817 | ||||||||||||||||||
Intellectual property | 266 | 86 | 180 | 170 | 36 | 134 | ||||||||||||||||||
$ | 13,934 | $ | 5,970 | $ | 7,964 | $ | 13,793 | $ | 4,598 | $ | 9,195 | |||||||||||||
Estimated Useful Life | ||||||||||||||||||||||||
Acquired technology | 7 – 10 years | |||||||||||||||||||||||
Assay royalties | 7 years | |||||||||||||||||||||||
Third party payor relationships | 15 years | |||||||||||||||||||||||
Tradenames and trademarks | 7 years | |||||||||||||||||||||||
Customer relationships | 15 years | |||||||||||||||||||||||
Covenants not to compete | 3 years | |||||||||||||||||||||||
Patents | Life of the patent | |||||||||||||||||||||||
Intellectual property | 7 years | |||||||||||||||||||||||
Amortization expense for intangible assets was $1.4 million, $1.8 million and $1.4 million during the years ended December 31, 2014, 2013 and 2012. At December 31, 2013, the Company revised its estimate of useful lives on certain intangible assets which caused amortization expense in 2014 to decrease by $0.4 million. Amortization expense for intangible assets for each of the five succeeding fiscal years is expected to be $1.4 million, $1.3 million, $1.3 million, $1.0 million and $0.9 million for the years ended December 31, 2015, 2016, 2017, 2018 and 2019, respectively. | ||||||||||||||||||||||||
Other assets include U.S. security deposits and deferred tax assets, net of applicable valuation allowances. |
DEBT
DEBT | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Debt Disclosure [Abstract] | |||||||||
Debt | DEBT | ||||||||
Dollars in Thousands | |||||||||
Year Ended December 31, | |||||||||
2014 | 2013 | ||||||||
Revolving Line (1) | $ | 3,000 | $ | 2,560 | |||||
Term Loan (2) | 4,087 | 4,000 | |||||||
Convertible Promissory Note (3) | 750 | — | |||||||
Total debt | 7,837 | 6,560 | |||||||
Current portion of long term debt | (462 | ) | (242 | ) | |||||
Long term debt, net of current maturities | $ | 7,375 | $ | 6,318 | |||||
Revolving Line and Term Loan. | |||||||||
On March 13, 2013 (the “Effective Date”), we entered into a Loan and Security Agreement with affiliates of Third Security, LLC (the “Lenders”) for (a) a revolving line of credit (the “Revolving Line”) with borrowing availability of up to $4.0 million, subject to reduction based on our eligible accounts receivable, and (b) a term loan (the “Term Loan”) of $4.0 million (the “Loan Agreement”). Proceeds were used to pay off the PGxHealth note payable and for general corporate and working capital purposes. | |||||||||
On August 2, 2013, we entered into an amendment to the Loan Agreement (the “Amendment”). The Amendment, which became effective as of June 30, 2013, reduces our future minimum revenue covenants under the Loan Agreement and modifies the interest rates applicable to the amounts advanced under the Revolving Line. | |||||||||
On November 14, 2013, we entered into a second amendment to the Loan Agreement (the “Second Amendment”). The Second Amendment, which is effective as of October 31, 2013, reduces our future minimum revenue covenant under the Loan Agreement. | |||||||||
On January 27, 2014, we entered into a third amendment to the Loan Agreement (the “Third Amendment”). Pursuant to the Third Amendment, the Lenders agreed to waive certain events of default under the Loan Agreement, and the parties amended certain provisions of the Loan Agreement, including the minimum liquidity ratio that we must maintain during the term of the Loan Agreement. | |||||||||
On March 3, 2014, we entered into a fourth amendment to the Loan Agreement (the “Fourth Amendment”). The Fourth Amendment provides that we will not be required to make any principal or interest payments under the Term Loan for the period from March 1, 2014 through March 31, 2015. Accordingly, pursuant to the Loan Agreement as amended by the Fourth Amendment, the next principal and interest payment under the Term Loan will be due on April 1, 2015. The interest on the debt that is being deferred, and not paid, is being capitalized as part of the Term Loan. As of December 31, 2014, the amount of interest that has been capitalized is $0.3 million. | |||||||||
On October 22, 2014, we entered into a fifth amendment to the Loan Agreement (the “Fifth Amendment”). Pursuant to the Fifth Amendment, among other things, reduced the minimum liquidity and revenue covenants under the Loan Agreement. The Fifth Amendment also reduced the aggregate amount that we may borrow under the Revolving Line from $4.0 million to $3.0 million. | |||||||||
On April 1, 2015, we entered into a sixth amendment to the Loan Agreement (the “Sixth Amendment”). The Sixth Amendment provides, among other things, that (i) the Lenders will waive specified events of default under the terms of the Loan Agreement, (ii) commencing as of April 1, 2015, we will make monthly interest payments to the Lenders, (iii) we will not be obligated to make monthly payments of principal to the Lenders until April 1, 2016, (iv) we will be required to make an initial prepayment of a portion of the loan balance in the amount of approximately $149,000 on April 1, 2015 and one or more additional prepayments to the Lenders under the Loan Agreement upon the occurrence of certain events, and (v) we will not be required to comply with the minimum liquidity ratio under the terms of the Loan Agreement until the earliest to occur of a specified event or March 31, 2016. The Sixth Amendment also extends the time period in which we must provide certain reports and statements to the Lenders and amends the circumstances pursuant to which we may engage in certain sales or transfers of its business or property without the consent of the Lenders. | |||||||||
Convertible Promissory Note. | |||||||||
On December 31, 2014, we entered into an Unsecured Convertible Promissory Note Purchase Agreement with an accredited investor (the “Investor”) pursuant to which we agreed to issue and sell to the Investor in a private placement an unsecured convertible promissory note (the “Note”). We issued the Note in the aggregate principal amount of $750,000 to the Investor on December 31, 2014. The Note accrues interest at a rate of 6% per year and matures on December 31, 2016. Under the Note, the outstanding principal and unpaid interest accrued under the Note is convertible into shares of common stock of the Company as follows: (i) commencing upon the date of issuance of the Note (but no earlier than January 1, 2015), the Investor is entitled to convert, on a one-time basis, up to 50% of the outstanding principal and unpaid interest accrued under the Note, into shares of common stock of the Company at a conversion price equal to the lesser of (a) the average closing price of the common stock on the principal securities exchange or securities market on which the Company’s common stock is then traded (the “Market”) for the 20 consecutive trading days immediately preceding the date of conversion, and (b) $2.20 (subject to adjustment for stock splits, stock dividends, other distributions, recapitalizations and the like); and (ii) commencing February 15, 2015, the Investor is entitled to convert, on a one-time basis, any or all of the remaining outstanding principal and unpaid interest accrued under the Note, into shares of common stock of the Company at a conversion price equal to 85% of the average closing price of the Common Stock on the Market for the 15 consecutive trading days immediately preceding the date of conversion. | |||||||||
-1 | Revolving Line of Credit. Amounts advanced under the Revolving Line bear interest at an annual rate equal to the greater of (a) 4.25% or (b) the Wall Street Journal prime rate plus 1%. Interest is payable on a monthly basis, with the balance payable at the maturity of the Revolving Line. Under the Amendment, amounts advanced under the Revolving Line bear interest at an annual rate equal to the greater of (x) 6.25% or (y) the Wall Street Journal prime rate plus 3%. The current interest rate is 6.25%. Under the Loan Agreement, we paid the Lenders an upfront fee of $20,000, and will pay the Lenders an additional commitment fee of $20,000 on each one year anniversary of the Effective Date during the term of the Revolving Line. In addition, a fee of 0.5% per annum is payable quarterly on the unused portion of the Revolving Line. The Revolving Line matures on September 1, 2016. | ||||||||
-2 | Term Loan. We received $4.0 million under the Term Loan on the Effective Date. Pursuant to the terms of the Loan Agreement, as amended by the Sixth Amendment, we are required to make monthly payments of interest to the Lenders commencing on April 1, 2015. The current interest rate is 9.1%. | ||||||||
We paid the Lenders an upfront fee of $40,000 for the Term Loan, and will pay the Lenders an additional final payment of $120,000 at maturity or prepayment of the Term Loan. In addition, if we repay the Term Loan prior to maturity, we will pay the Lenders a prepayment penalty of 2.5% of the total outstanding balance under the Term Loan if the prepayment occurs between one and two years after the Effective Date, and 1% of the total outstanding balance under the Term Loan if the prepayment occurs thereafter. | |||||||||
Additional Terms | |||||||||
The Loan Agreement contains affirmative and negative covenants. Under the Loan Agreement, we are required to maintain a minimum liquidity ratio and achieve a minimum amount of revenue, and we also agreed not to (i) pledge or otherwise encumber our assets other than to the Lenders, (ii) enter into additional borrowings or guarantees, (iii) repurchase our capital stock, or (iv) enter into certain mergers or acquisitions without the Lenders’ consent. Additionally, the Loan Agreement contains a subjective acceleration clause at the discretion of the Lenders. As of December 31, 2014, the Company was in compliance with all financial covenants of the Loan Agreement, as amended by the Fifth Amendment. | |||||||||
To secure the repayment of any amounts borrowed under the Revolving Line and the Term Loan, we granted the Lenders a security interest in all of our assets. The occurrence of an event of default under the Loan Agreement could result in the acceleration of our obligations under the Loan Agreement and would increase the applicable interest rate under the Revolving Line or Term Loan (or both) by 5%, and permit the Lenders to exercise remedies with respect to the collateral under the Loan Agreement. | |||||||||
-3 | Convertible Promissory Note. The Note accrues interest at a rate of 6% per year and matures on December 31, 2016. On January 1, 2015, $375,000 of the December 31, 2014 balance was converted into 198,708 shares of Company common stock in accordance with the terms of the Note. | ||||||||
The aggregate minimum principal maturities of the debt for the following fiscal years are as follows (dollars in thousands): | |||||||||
2015 | $ | 462 | |||||||
2016 | 7,375 | ||||||||
Total | $ | 7,837 | |||||||
CAPITAL_LEASES
CAPITAL LEASES | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Leases [Abstract] | ||||||||
Capital Leases | CAPITAL LEASES | |||||||
The following is an analysis of the property acquired under capital leases. | ||||||||
Dollars in Thousands | ||||||||
Asset Balances at | ||||||||
Classes of Property | December 31, | December 31, | ||||||
2014 | 2013 | |||||||
Equipment | $ | 1,514 | $ | 1,514 | ||||
Less: Accumulated amortization | (997 | ) | (721 | ) | ||||
Total | $ | 517 | $ | 793 | ||||
The following is a schedule by years of future minimum lease payments under capital leases together with the present value of the net minimum lease payments as of December 31, 2014. | ||||||||
Year ending December 31: | ||||||||
Dollars in Thousands | ||||||||
2015 | 35 | |||||||
2016 | 3 | |||||||
2017 | 1 | |||||||
Total minimum lease payments | $ | 39 | ||||||
Less: Amount representing interest | (2 | ) | ||||||
Present value of net minimum lease payments | $ | 37 | ||||||
The short term portion of our capital leases is included in accrued expenses and the long term portion is included in other long-term liabilities on the Balance Sheet. Included in depreciation for the years ended December 31, 2014, 2013 and 2012 was $0.3 million, $0.3 million and less than $0.3 million, respectively, related to equipment acquired under capital leases. |
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended | |||
Dec. 31, 2014 | ||||
Commitments and Contingencies Disclosure [Abstract] | ||||
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES | |||
We are subject to a number of claims of various amounts, which arise out of the normal course of business. In the opinion of management, the disposition of pending claims will not have a material adverse effect on our financial position, results of operations or cash flows. | ||||
Rent expense under all operating leases was $1.0 million in each of 2014, 2013 and 2012. We lease certain equipment, vehicles and operating facilities under non-cancellable operating leases , some of which have escalation clauses that expire on various dates through 2022. Future minimum lease payments under non-cancellable operating leases are as follows (in thousands): | ||||
2015 | $ | 1,032 | ||
2016 | 927 | |||
2017 | 763 | |||
2018 | 485 | |||
2019 | 235 | |||
thereafter | 628 | |||
Total | $ | 4,070 | ||
At December 31, 2014, firm commitments to vendors totaled $0.7 million. |
INCOME_TAXES
INCOME TAXES | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||
Income Taxes | INCOME TAXES | ||||||||||||
The Company’s provision for income taxes for the years ended December 31, 2014, 2013 and 2012 relates to income taxes in states, foreign countries and other local jurisdictions and differs from the amounts determined by applying the statutory Federal income tax rate to loss before income taxes for the following reasons: | |||||||||||||
Dollars in Thousands | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Benefit at federal rate | $ | (4,562 | ) | $ | (5,454 | ) | $ | (2,781 | ) | ||||
Increase (decrease) resulting from: | |||||||||||||
State income taxes—net of federal benefit | (360 | ) | (518 | ) | 2 | ||||||||
Foreign subsidiary tax rate difference | 114 | (3 | ) | (27 | ) | ||||||||
Tax contingency | (144 | ) | 23 | 22 | |||||||||
Expiring net operating loss carryforwards | — | — | 1,472 | ||||||||||
Earnings repatriation | — | — | 582 | ||||||||||
Miscellaneous permanent differences | 227 | 155 | 284 | ||||||||||
Liability warrants | (154 | ) | (102 | ) | (748 | ) | |||||||
Tax credits | — | — | 215 | ||||||||||
State, net operating loss expiration/true-up | (327 | ) | 1,179 | — | |||||||||
Other—net | 44 | (80 | ) | 15 | |||||||||
Valuation allowance | 5,686 | 4,746 | 1,110 | ||||||||||
Total income tax (benefit) expense | $ | 524 | $ | (54 | ) | $ | 146 | ||||||
Dollars in Thousands | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Federal: | |||||||||||||
Current | $ | — | $ | — | $ | — | |||||||
Deferred | 608 | — | — | ||||||||||
Total Federal | $ | 608 | $ | — | $ | — | |||||||
State: | |||||||||||||
Current | $ | — | $ | — | $ | 3 | |||||||
Deferred | 23 | — | — | ||||||||||
Total State | $ | 23 | $ | — | $ | 3 | |||||||
Foreign: | |||||||||||||
Current | $ | (156 | ) | $ | 20 | $ | 46 | ||||||
Deferred | 49 | (74 | ) | 97 | |||||||||
Total Foreign | $ | (107 | ) | $ | (54 | ) | $ | 143 | |||||
Total Tax Provision | $ | 524 | $ | (54 | ) | $ | 146 | ||||||
The Company’s deferred income tax asset at December 31, 2014 and 2013 is comprised of the following temporary differences: | |||||||||||||
Dollars in Thousands | |||||||||||||
2014 | 2013 | ||||||||||||
Deferred Tax Asset: | |||||||||||||
Net operating loss carryforward | $ | 46,231 | $ | 42,950 | |||||||||
Research and development credit carryforwards | 918 | 951 | |||||||||||
Deferred revenue | 207 | 174 | |||||||||||
Inventory | 200 | 275 | |||||||||||
Allowance for bad debt | 2,738 | 1,279 | |||||||||||
Other | 1,545 | 718 | |||||||||||
51,839 | 46,347 | ||||||||||||
Less valuation allowance | (51,751 | ) | (46,088 | ) | |||||||||
Deferred Tax Asset | $ | 88 | $ | 259 | |||||||||
Deferred Tax Liability: | |||||||||||||
Goodwill | $ | 631 | $ | — | |||||||||
Foreign earnings | $ | — | $ | 25 | |||||||||
Property and equipment | 88 | 186 | |||||||||||
Deferred Tax Liability | $ | 719 | $ | 211 | |||||||||
Net Deferred Asset (Liability) | $ | (631 | ) | $ | 48 | ||||||||
At December 31, 2014, we had total unused federal tax net operating loss carryforwards of $128.9 million. The expiration dates are as follows (amounts in thousands): | |||||||||||||
2018 | $ | 1,838 | |||||||||||
2019 | 8,181 | ||||||||||||
2020 | 9,662 | ||||||||||||
2021 | 8,228 | ||||||||||||
2022 | 16,862 | ||||||||||||
2023 | 16,173 | ||||||||||||
2024 | 17,390 | ||||||||||||
2025 | 8,153 | ||||||||||||
2026 | 6,792 | ||||||||||||
2027 | 3,238 | ||||||||||||
2028 | 1,272 | ||||||||||||
2029 | 591 | ||||||||||||
2031 | 2,784 | ||||||||||||
2032 | 8,358 | ||||||||||||
2033 | 11,748 | ||||||||||||
2034 | 7,662 | ||||||||||||
Total | $ | 128,932 | |||||||||||
Of these federal net operating loss carryforwards, $1.2 million were obtained in the acquisition of Annovis, Inc. and may be subject to certain restrictions. Remaining net operating loss carryforwards could be subject to limitations under section 382 of the Internal Revenue Code of 1986, as amended. At December 31, 2014, we had unused state tax net operating loss carryforwards of approximately $46.8 million that expire at various times beginning in 2015. At December 31, 2014, we had unused research and development credit carryforwards of $0.9 million that expire at various times between 2018 and 2028. At December 31, 2014, we had unused foreign net operating loss carryforwards relating to operations in the United Kingdom of approximately $0.9 million with an unlimited carryforward period. A valuation allowance has been provided for the remaining deferred tax assets, due to the cumulative losses in recent years and an inability to utilize any additional losses as carrybacks. We will continue to assess the recoverability of deferred tax assets and the related valuation allowance. To the extent we begin to generate income in future years and it is determined that such valuation allowance is no longer required, the tax benefit of the remaining deferred tax assets will be recognized at such time. | |||||||||||||
Our liability for uncertain tax positions, which was included in other long term liabilities, was $0.1 million and $0.3 million as of December 31, 2014 and 2013, respectively. We recorded less than $0.1 million of additional uncertain tax positions during each of the years ended 2014 and 2013. We recorded $0.2 million and zero for reductions in uncertain tax positions relating to statute of limitations lapse for the years ended 2014 and 2013, respectively. We had no material interest or penalties during fiscal 2014 or fiscal 2013, and we do not anticipate any such items during the next twelve months. Our policy is to record interest and penalties directly related to income taxes as income tax expense in the Consolidated Statements of Operations. We file income tax returns in the U.S. federal jurisdiction, various U.S. state jurisdictions and various foreign jurisdictions. We have statutes of limitation open for Federal income tax returns related to tax years 2011 through 2014. We have state income tax returns subject to examination primarily for tax years 2011 through 2014. To the extent the Company has tax attribute carryforwards, the tax years in which the attribute was generated may still be adjusted upon examination by the Internal Revenue Service, state or foreign tax authorities to the extent utilized in a future period. Open tax years related to foreign jurisdictions remain subject to examination. Our primary foreign jurisdiction is the United Kingdom, which has open tax years for 2011 through 2014. |
EMPLOYEE_BENEFIT_PLAN
EMPLOYEE BENEFIT PLAN | 12 Months Ended |
Dec. 31, 2014 | |
Compensation and Retirement Disclosure [Abstract] | |
Employee Benefit Plan | EMPLOYEE BENEFIT PLAN |
We maintain an employee 401(k) retirement savings plan that allows for voluntary contributions into designated investment funds by eligible employees. Effective October 1, 2010, Transgenomic discontinued matching employee 401(k) contributions. Beginning January 1, 2012, we reinstated matching employee 401(k) contributions. We currently match the employee’s contributions at the rate of 100% on the first 3% of contributions and 50% on the next 2% of contributions. We may, at the discretion of our Board of Directors, make additional contributions on behalf of the Plan’s participants. Contributions to the 401(k) plan were $0.4 million, $0.4 million and $0.3 million for the years ended December 31, 2014, 2013 and 2012, respectively. |
STOCKHOLDERS_EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Stockholders' Equity Note [Abstract] | |||||||||
Stockholders' Equity | STOCKHOLDERS’ EQUITY | ||||||||
Common Stock. | |||||||||
Pursuant to our Third Amended and Restated Certificate of Incorporation, as amended, we currently have 150,000,000 shares of common stock authorized for issuance. | |||||||||
On February 2, 2012, we entered into definitive agreements with institutional and other accredited investors and raised approximately $22.0 million in a private placement financing (the “Private Placement”), which includes an aggregate of $3.0 million in convertible notes (the “Convertible Notes”) issued in December 2011 to entities affiliated with Third Security, LLC (the “Third Security Investors”), a related party, that automatically convert into shares of our common stock and warrants to purchase such common stock on the same terms as all investors in the Private Placement. Pursuant to the applicable purchase agreement, we issued an aggregate of 1,583,333 shares of our common stock at a price per share of $12.00, as well as five-year warrants to purchase up to an aggregate of 823,333 shares of common stock with an exercise price of $15.00 per share. In connection with the conversion of the Convertible Notes, the Third Security Investors received an aggregate of 250,000 shares of common stock and 125,000 warrants on the same terms as all investors in the Private Placement. Craig-Hallum Capital Group LLC served as the sole placement agent for the offering. In consideration for services rendered as the placement agent in the offering, we agreed to (i) pay to the placement agent cash commissions equal to $1,330,000, or 7.0% of the gross proceeds received in the offering, (ii) issue to the placement agent a five-year warrant to purchase up to 31,666 shares of our common stock (representing 2% of the shares sold in the Private Placement) with an exercise price of $15.00 per share and other terms that are the same as the terms of the warrants issued in the Private Placement; and (iii) reimburse the placement agent for reasonable out-of-pocket expenses, including fees paid to the placement agent’s legal counsel, incurred in connection with the offering, which reimbursable expenses were not to exceed $125,000. The costs incurred to complete the Private Placement were recorded as a reduction in equity in the amount of $1.5 million. Net proceeds from this offering have been used for general corporate and working capital purposes, primarily to accelerate development of several of our key initiatives. | |||||||||
On January 24, 2013, we entered into a Securities Purchase Agreement with certain institutional and other accredited investors pursuant to which we: (i) sold to the investors an aggregate of 1,383,333 shares of our common stock at a price per share of $6.00 for aggregate gross proceeds of approximately $8.3 million; and (ii) issued to the investors warrants to purchase up to an aggregate of 691,656 shares of our common stock with an exercise price of $9.00 per share (the “Offering”). The warrants may be exercised, in whole or in part, at any time from January 30, 2013 until January 30, 2018 and contain both cash and “cashless exercise” features. The Third Security Investors purchased an aggregate of 500,000 shares of common stock and warrants to purchase an aggregate of 250,000 shares of common stock in the Offering on the same terms as the other investors. We used the net proceeds from the Offering for general corporate and working capital purposes. | |||||||||
In connection with the Offering, we entered into a registration rights agreement with the investors (the “Registration Rights Agreement”). The Registration Rights Agreement required that we file with the Securities and Exchange Commission (the “SEC”) a registration statement to register for resale the shares of common stock sold and the shares of common stock issuable upon exercise of the warrants by March 16, 2013. The registration statement was filed with the SEC on March 15, 2013 and was declared effective by the SEC on March 29, 2013. | |||||||||
The January 2013 common stock transaction required the repricing and issuance of additional common stock warrants to the holders of warrants issued in the February 2012 common stock and warrant sale. The exercise price of the warrants decreased from $15.00 per share to $12.96 per share and the number of shares issuable upon exercise of the warrants increased from 948,333 to 1,097,600. | |||||||||
On October 22, 2014, we entered into a Securities Purchase Agreement with certain accredited investors (the “October 2014 Investors”), pursuant to which we, in a private placement, issued and sold to the October 2014 Investors (the “2014 Private Placement”) an aggregate of 730,776 shares of our common stock at a price per share of $3.25 for an aggregate purchase price of approximately $2.375 million, and warrants to purchase up to an aggregate of 365,388 shares of our common stock with an initial exercise price of $4.00 per share that are exercisable for the period from April 22, 2015 through April 22, 2020. In connection with the 2014 Private Placement, we also issued a warrant to purchase up to an aggregate of 9,230 shares of our common stock to one advisor. The warrants issued in the 2014 Private Placement include both cash and “cashless exercise” features. | |||||||||
The 2014 Private Placement required the repricing and issuance of additional common stock warrants to the holders of warrants issued in the February 2012 common stock and warrant sale. The exercise price of the warrants decreased from $11.73 per share to $10.86 per share and the number of shares issuable upon exercise of the warrants increased from 1,212,665 to 1,309,785. | |||||||||
On December 31, 2014, Transgenomic entered into an Unsecured Convertible Promissory Note Purchase Agreement (the “Note Purchase Agreement”) with an accredited investor (the “Note Investor”) pursuant to which we agreed to issue and sell to the Note Investor in a private placement (the “Note Private Placement”) an unsecured convertible promissory note (the “Note”) in the aggregate principal amount of $750,000. The Note accrues interest at a rate of 6% per year and matures on December 31, 2016. Under the Note, the outstanding principal and unpaid interest accrued under the Note is convertible into shares of our common stock as follows: (i) commencing upon the date of issuance of the Note (but no earlier than January 1, 2015), the Note Investor is entitled to convert, on a one-time basis, up to 50% of the outstanding principal and unpaid interest accrued under the Note, into shares of our common stock at a conversion price equal to the lesser of (a) the average closing price of the our common stock on the principal securities exchange or securities market on which our common stock is then traded (the “Market”) for the 20 consecutive trading days immediately preceding the date of conversion, and (b) $2.20 (subject to adjustment for stock splits, stock dividends, other distributions, recapitalizations and the like); and (ii) commencing February 15, 2015, the Note Investor is entitled to convert, on a one-time basis, any or all of the remaining outstanding principal and unpaid interest accrued under the Note, into shares of our common stock at a conversion price equal to 85% of the average closing price of our common stock on the Market for the 15 consecutive trading days immediately preceding the date of conversion. | |||||||||
Pursuant to the terms of the Note Purchase Agreement, we are subject to certain registration obligations and we may be required to effect one or more other registrations to register for resale the shares of our common stock issued or issuable under the Note in connection with certain “piggy-back” registration rights granted to the Note Investor. | |||||||||
The Note Private Placement required the repricing and issuance of additional common stock warrants to the holders of warrants issued in the February 2012 common stock and warrant sale. The exercise price of the 2012 warrants decreased from $10.86 per share to $10.25 per share and the number of shares issuable upon exercise of the warrants increased from 1,309,785 to 1,387,685. | |||||||||
Common Stock Warrants. | |||||||||
There were 664,703 common stock warrants issued during the 12 months ended December 31, 2014 and none of the issued warrants were exercised. Included in the warrants issued in 2014 were 290,085 warrants issued due to re-pricing requirements of the Private Placement. Common stock warrants issued during the 12 months ended December 31, 2013 were 840,939 and none of the issued warrants were exercised. Warrants to purchase an aggregate of 2,884,986 shares of common stock were outstanding at December 31, 2014. | |||||||||
Warrant Holder | Issue Year | Expiration | Underlying | Exercise | |||||
Shares | Price | ||||||||
Third Security Investors(1) | 2010 | Dec-15 | 431,027 | $6.96 | |||||
Various Institutional Holders(2) | 2012 | Feb-17 | 1,204,763 | $10.25 | |||||
Third Security Investors(2) | 2012 | Feb-17 | 182,922 | $10.25 | |||||
Various Institutional Holders(3) | 2013 | Jan-18 | 441,656 | $9.00 | |||||
Third Security Investors(3) | 2013 | Jan-18 | 250,000 | $9.00 | |||||
Various Institutional Holders(4) | 2014 | Apr-20 | 374,618 | $4.00 | |||||
2,884,986 | |||||||||
-1 | This Warrant was issued in connection with the issuance of warrants to purchase shares of our Series A Preferred Stock to the Third Security Investors in December 2010. The number of underlying shares shown reflects the number of shares of common stock issuable upon conversion of the shares of Series A Preferred Stock for which this Warrant is currently exercisable. | ||||||||
-2 | These Warrants were issued in connection with the Private Placement completed in February 2012 and are classified as a liability in our financial statements. See Footnote 13 - “Fair Value”. These warrants also contain certain anti-dilution provisions that provide for an adjustment to the exercise price and number of shares issuable upon exercise of the warrant in the event that we engage in certain issuances of shares of our common stock at a price lower than the exercise price of the warrant. | ||||||||
-3 | These warrants were issued in connection with the Offering, which was completed in January 2013. | ||||||||
-4 | These warrants were issued in connection with the 2014 Private Placement, which was completed in October 2014. | ||||||||
Preferred Stock Series A. | |||||||||
The Company’s Board of Directors is authorized to issue up to 15,000,000 shares of preferred stock in one or more series, from time to time, with such designations, powers, preferences and rights and such qualifications, limitations and restrictions as may be provided in a resolution or resolutions adopted by the Board of Directors. The authority of the Board of Directors includes, but is not limited to, the determination or fixing of the following with respect to shares of such class or any series thereof: (i) the number of shares; (ii) the dividend rate, whether dividends shall be cumulative and, if so, from which date; (iii) whether shares are to be redeemable and, if so, the terms and amount of any sinking fund providing for the purchase or redemption of such shares; (iv) whether shares shall be convertible and, if so, the terms and provisions thereof; (v) what restrictions are to apply, if any, on the issue or reissue of any additional preferred stock; and (vi) whether shares have voting rights. The preferred stock may be issued with a preference over the common stock as to the payment of dividends. We have no current plans to issue any additional preferred stock. Classes of stock such as the preferred stock may be used, in certain circumstances, to create voting impediments on extraordinary corporate transactions or to frustrate persons seeking to effect a merger or otherwise to gain control of the Company. For the foregoing reasons, any additional preferred stock issued by the Company could have an adverse effect on the rights of the holders of the common stock. | |||||||||
On December 29, 2010, we entered into a transaction with the Third Security Investors, pursuant to the terms of a Series A Convertible Preferred Stock Purchase Agreement (the “Series A Purchase Agreement”), in which we: (i) sold an aggregate of 2,586,205 shares of Series A Preferred Stock at a price of $2.32 per share; and (ii) issued Series A Warrants to purchase up to an aggregate of 1,293,102 shares of Series A Preferred Stock having an exercise price of $2.32 per share (the sale of Series A Preferred Stock and issuance of the Series A Warrants hereafter referred to together as the “Financing”). The Series A Warrants may be exercised at any time from December 29, 2010 until December 28, 2015 and contain a “cashless exercise” feature. The gross proceeds from the Series A financing were $6.0 million. The $0.2 million of costs incurred to complete the Series A financing were recorded as a reduction in the value of the Series A Preferred Stock. We used the net proceeds from the financing to acquire the FAMILION family of genetic tests from PGxHealth, a subsidiary of Clinical Data, Inc. Until the November 2011 modifications, the Series A Preferred Stock met the definition of mandatorily redeemable stock as it was preferred capital stock that was redeemable at the option of the holder through December 2015 and was reported outside of equity. The Series A Preferred Stock was to be accreted to its redemption value of $6.0 million. Until the November 2011 modifications, the Series A Warrants did not qualify to be treated as equity and, accordingly, were recorded as a liability. A preferred stock anti-dilution feature is embedded within the Series A Preferred Stock that met the definition of a derivative. | |||||||||
In connection with the Series A financing, we filed a Certificate of Designation of Series A Convertible Preferred Stock (the “Series A Certificate of Designation”) with the Secretary of State of the State of Delaware, designating 3,879,307 shares of our preferred stock as Series A Preferred Stock. As of December 31, 2013, the Series A Preferred Stock, including the Series A Preferred Stock issuable upon exercise of the Series A Warrants, was convertible into shares of our common stock at a rate of 4-for-1, which conversion rate is subject to further adjustment as set forth in the Series A Certificate of Designation. Giving effect to the reverse split of our stock in January 2014, the conversion rate was adjusted to 1-for-3. Certain rights of the holders of the Series A Preferred Stock are senior to the rights of the holders of our common stock. The Series A Preferred Stock has a liquidation preference equal to its original price per share, plus any accrued and unpaid dividends thereon. The holders of the Series A Preferred Stock are entitled to receive quarterly dividends, which accrue at the rate of 10% of the original price per share per annum, whether or not declared, and which shall compound annually and shall be cumulative. In any calendar quarter in which we have positive distributable cash flow as defined in the Series A Purchase Agreement, we are required to pay from funds legally available a cash dividend in the amount equal to the lesser of 50% of such distributable cash flow or the aggregate amount of dividends accrued on the Series A Preferred Stock. | |||||||||
Generally, the holders of the Series A Preferred Stock are entitled to vote together with the holders of common stock, as a single group, on an as-converted basis. However, the Series A Certificate of Designation provides that we shall not perform some activities, subject to certain exceptions, without the affirmative vote of a majority of the holders of the outstanding shares of Series A Preferred Stock. The holders of the Series A Preferred Stock, along with the holders of the Series B Preferred Stock, also are entitled to elect or appoint, as a single group, two directors of the Company. | |||||||||
In connection with the Series A financing, we also entered into a registration rights agreement with the Third Security Investors (the “Registration Rights Agreement”). Pursuant to the terms of the Registration Rights Agreement, the Company has granted certain demand, “piggyback” and S-3 registration rights covering the resale of the shares of common stock underlying the Series A Preferred Stock issued pursuant to the Series A Purchase Agreement and issuable upon exercise of the Series A Warrants and all shares of common stock issuable upon any dividend or other distribution with respect thereto. | |||||||||
In November 2011, we entered into a transaction with the Third Security Investors, pursuant to an Agreement Regarding Preferred Stock (the “Amendment Agreement”), in which the Third Security Investors agreed to (i) waive their rights to enforce the anti-dilution and redemption features of the Series A Preferred Stock and (ii) at the next annual stockholders’ meeting, vote to amend the Series A Certificate of Designation to remove the anti-dilution and redemption features of the Series A Preferred Stock. In exchange, the Company issued shares of common stock to the Third Security Investors having an aggregate market value of $0.3 million. | |||||||||
As a result of the Amendment Agreement, the values of the Series A Preferred Stock and Series A Warrants, including the Series A Preferred Stock conversion feature and Series A Warrant liability, were reclassified into stockholders’ equity as of the date of the Amendment Agreement. | |||||||||
Preferred Stock Series B. | |||||||||
On March 5, 2014, we entered into a Series B Convertible Preferred Stock Purchase Agreement (the “Series B Purchase Agreement”) with affiliates of Third Security, LLC (the “2014 Third Security Investors”), pursuant to which we, in a private placement, sold and issued an aggregate of 1,443,297 shares of our Series B Preferred Stock, par value $0.01 per share (the “Series B Preferred Stock”), at a price per share of $4.85 for an aggregate purchase price of approximately $7.0 million. Each share of Series B Preferred Stock issued pursuant to the Series B Purchase Agreement is initially convertible into shares of our common stock at a rate of 1-for-1, which conversion rate is subject to further adjustment as set forth in the Certificate of Designation of Series B Convertible Preferred Stock. | |||||||||
In connection with the Series B financing, we also entered into a Registration Rights Agreement, dated March 5, 2014, with the 2014 Third Security Investors, pursuant to which we granted certain demand, “piggy-back” and S-3 registrations rights covering the resale of the shares of common stock underlying the Series B Preferred Stock issued pursuant to the Series B Purchase Agreement and all shares of common stock issuable upon any dividend or other distribution with respect thereto. | |||||||||
The Series B financing required the repricing and issuance of additional common stock warrants to the holders of warrants issued in the Private Placement. The exercise price of the warrants decreased from $12.96 per share to $11.73 per share and the number of shares issuable upon exercise of the warrants increased from 1,097,600 to 1,212,665. | |||||||||
We recorded accrued dividends on the Series A Preferred Stock and the Series B Preferred Stock of $1.1 million, $0.7 million and $0.7 million during the years ended December 31, 2014, 2013 and 2012, respectively. |
EQUITY_INCENTIVE_PLAN
EQUITY INCENTIVE PLAN | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||
Equity Incentive Plan | EQUITY INCENTIVE PLAN | |||||||
The Company’s 2006 Equity Incentive Plan (the “Plan”) allows the Company to make awards of various types of equity-based compensation, including stock options, dividend equivalent rights (“DERs”), stock appreciation rights (“SARs”), restricted stock, restricted stock units, performance units, performance shares and other awards, to employees and directors of the Company. As of December 31, 2014, the Company was authorized to issue 1,666,666 shares under the Plan; provided, that no more than 1,250,000 of such shares may be used for grants of restricted stock, restricted stock units, performance units, performance shares and other awards. | ||||||||
The Plan is administered by the Compensation Committee of the Board of Directors (the “Committee”), which has the authority to set the number, exercise price, term and vesting provisions of the awards granted under the Plan, subject to the terms thereof. Either incentive or non-qualified stock options may be granted to employees of the Company, but only non-qualified stock options may be granted to non-employee directors and advisors. However, in either case, the Plan requires that stock options must be granted at exercise prices not less than the fair market value of the common stock on the date of the grant. Options issued under the plan vest over periods as determined by the Committee and expire 10 years after the date the option was granted. | ||||||||
For the years ended December 31, 2014, 2013 and 2012, we recorded compensation expense of $0.9 million, $0.4 million and $0.7 million, respectively within selling, general and administrative expense. As of December 31, 2014, there was $0.7 million of unrecognized compensation expense related to unvested stock awards, which is expected to be recognized over a weighted average period of approximately 1.4 years. | ||||||||
The fair value of the options and SARs granted during 2014 was estimated on their respective grant dates using the Black-Scholes option pricing model. The Black-Scholes model was used with the following assumptions: risk-free interest rates of 1.50% to 1.74%, based on the U.S. Treasury yield in effect at the time of grant; dividend yields of zero percent; expected lives of four to five years, based on historical exercise activity; and volatility of 82% to 105% for grants made during the year ended December 31, 2014 based on the historical volatility of our stock over a time that is consistent with the expected life of the option. | ||||||||
The fair value of the options granted during 2013 was estimated on their respective grant dates using the Black-Scholes option-pricing model. The Black-Scholes model was used with the following assumptions: risk-free interest rates of 0.73% to 1.75%, based on the U.S. Treasury yield in effect at the time of grant; dividend yields of zero percent; expected lives of four to five years, based on historical exercise activity; and volatility of 105% to 106% for grants made during the year ended December 31, 2013 based on the historical volatility of our stock over a time that is consistent with the expected life of the option. | ||||||||
The fair value of the options granted during 2012 was estimated on their respective grant dates using the Black-Scholes option-pricing model. The Black-Scholes model was used with the following assumptions: risk-free interest rates of 0.62% to 1.03%, based on the U.S. Treasury yield in effect at the time of grant; dividend yields of zero percent; expected lives of eight years, based on historical exercise activity; and volatility of 101% to 114% for grants made during the year ended December 31, 2012 based on the historical volatility of our stock over a time that is consistent with the expected life of the option. | ||||||||
The weighted average grant date fair value per share of options granted during the years ended December 31, 2014, 2013 and 2012 was $3.51, $3.72 and $9.72 respectively. | ||||||||
Stock Options. | ||||||||
The following table summarizes stock option activity under the Plan during the year ended December 31, 2014: | ||||||||
Number of | Weighted Average | |||||||
Options | Exercise Price | |||||||
Balance at January 1, 2014 | 565,028 | $ | 7.19 | |||||
Granted | 264,529 | 5.1 | ||||||
Forfeited | (115,222 | ) | 5.53 | |||||
Expired | (14,436 | ) | 12.03 | |||||
Balance at December 31, 2014 | 699,899 | $ | 6.58 | |||||
Exercisable at December 31, 2014 | 289,617 | $ | 8.87 | |||||
All stock options outstanding were issued to employees, officers or outside directors. | ||||||||
As of December 31, 2014, 650,952 outstanding options were vested or expected to vest. The weighted average exercise price of these options was $6.58 and the aggregate intrinsic value was zero with a remaining weighted average contractual life of 7.7 years. | ||||||||
As of December 31, 2014, 289,617 options were exercisable with a weighted average exercise price of $8.87 and an aggregate intrinsic value of zero. The weighted average contractual life of these options was 5.9 years. | ||||||||
No options were exercised in 2014 or 2013. During 2012, 1,667 shares were exercised with an intrinsic value of less than $10,000. | ||||||||
The total fair value of shares that vested during each of 2014, 2013 and 2012 was $0.6 million. | ||||||||
Stock Appreciation Rights (“SARs”). | ||||||||
The following table summarizes SARs activity under the Plan during the year ended December 31, 2014: | ||||||||
Number of | Weighted Average | |||||||
SARs | Exercise Price | |||||||
Balance at January 1, 2014 | 138,333 | $ | 4.32 | |||||
Granted | 15,000 | 3.15 | ||||||
Forfeited | (34,788 | ) | 4.32 | |||||
Expired | (20,212 | ) | 4.32 | |||||
Balance at December 31, 2014 | 98,333 | $ | 4.14 | |||||
Exercisable at December 31, 2014 | 35,208 | $ | 4.32 | |||||
All SARs outstanding were issued to officers. | ||||||||
As of December 31, 2014, 98,333 outstanding SARs shares were vested or expected to vest. The weighted average exercise price of these options was $4.14 and the aggregate intrinsic value was zero with a remaining weighted average contractual life of 8.9 years. | ||||||||
As of December 31, 2014, 35,208 SARs shares were exercisable and no SARs shares were exercised in 2014, 2013 and 2012. At December 31, 2014, a liability of $0.1 million was recorded in accrued expenses. |
FAIR_VALUE
FAIR VALUE | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Fair Value Disclosures [Abstract] | |||||
Fair Value | FAIR VALUE | ||||
FASB guidance on fair value measurements, which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements for our financial assets and liabilities, as well as for other assets and liabilities that are carried at fair value on a recurring basis in our consolidated financial statements. | |||||
FASB guidance establishes a three-level fair value hierarchy based upon the assumptions (inputs) used to price assets or liabilities. The three levels of inputs used to measure fair value are as follows: | |||||
Level 1—Unadjusted quoted prices in active markets for identical assets or liabilities; | |||||
Level 2—Observable inputs other than those included in Level 1, such as quoted prices for similar assets and liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets; and | |||||
Level 3—Unobservable inputs reflecting our own assumptions and best estimate of what inputs market participants would use in pricing the asset or liability. | |||||
Debt | |||||
Our long term debt is considered a Level 3 liability for which book value approximates fair market value due to the variable interest rate it bears. | |||||
Common Stock Warrant Liability | |||||
Certain of our issued and outstanding warrants to purchase common stock do not qualify to be treated as equity, and accordingly are recorded as a liability. The Common Stock Warrant Liability represents the fair value of the 1.4 million warrants issued in February 2012 (as adjusted pursuant to the terms of the 2012 warrants). We are required to record these instruments at fair value at each reporting date and changes are recorded as a non-cash adjustment to earnings. The gains or losses included in earnings are reported in other income (expense) in our Statement of Operations. Management does not believe that this liability will be settled by a use of cash. | |||||
The Common Stock Warrant Liability is considered a Level 3 financial instrument and is valued using a Monte Carlo simulation. This method is well suited to value options with non-standard features, such as anti-dilution protection. A Monte Carlo simulation model uses repeated random sampling to simulate significant uncertainty in inputs. Assumptions and inputs used in the valuation of the common stock warrants are broken down into four sections: Static Business Inputs; Static Technical Inputs; Simulated Business Inputs; and Simulated Technical Inputs. | |||||
Static Business Inputs include: Our equity value, which was estimated using our stock price of $2.01 as of December 31, 2014; the amount of the down-round financing, the timing of the down-round financing, the expected exercise period of 2.11 years from the valuation date and the fact that no other potential fundamental transactions are expected during the term of the common stock warrants. | |||||
Static Technical Inputs include: volatility of 70% based on implied and historical rates over the expected term and the risk-free interest rate of 0.67% based on the 2-year U.S. Treasury yield. | |||||
Simulated Business Inputs include: the probability of down-round financing, which was estimated to be 50% for simulated equity values below the down-round financing cut-off point. | |||||
Simulated Technical Inputs include: our equity value in periods 1-10 follows a geometric Brownian motion and is simulated over 10 independent six-month periods; a down-round financing event was randomly simulated in an iteration based on the 50% discrete probability of a down-round financing for those iterations where our simulated equity value at the expected timing of down-round financing was below the down-round financing cut-off point. | |||||
During the year ended December 31, 2014, the changes in the fair value of the liability measured using significant unobservable inputs (Level 3) was comprised of the following: | |||||
Dollars in Thousands | |||||
For the Year Ended | |||||
December 31, 2014 | |||||
Balance at December 31, 2013 | $ | 600 | |||
Total gains or losses: | |||||
Recognized in earnings | (455 | ) | |||
Balance at December 31, 2014 | $ | 145 | |||
The change in unrealized gains or losses of Level 3 liabilities is included in earnings and is reported in other income (expense) in our Statement of Operations. |
SELECTED_QUARTERLY_FINANCIAL_D
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||||||
Selected Quarterly Financial Data (Unaudited) | SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) | |||||||||||||||
In thousands, except per share data | ||||||||||||||||
31-Mar | 30-Jun | 30-Sep | 31-Dec | |||||||||||||
2014 | ||||||||||||||||
Net Sales | $ | 6,251 | $ | 6,764 | $ | 6,372 | $ | 7,696 | ||||||||
Gross Profit | 2,494 | 2,393 | 2,215 | 2,619 | ||||||||||||
Net Loss | (4,176 | ) | (3,893 | ) | (80 | ) | (5,793 | ) | ||||||||
Basic and diluted loss per common share | $ | (0.60 | ) | $ | (0.57 | ) | $ | (0.05 | ) | $ | (0.77 | ) | ||||
2013 | ||||||||||||||||
Net Sales | $ | 7,374 | $ | 7,306 | $ | 6,646 | $ | 6,218 | ||||||||
Gross Profit | 3,255 | 2,973 | 2,450 | 2,076 | ||||||||||||
Net Income (Loss) | (3,586 | ) | (2,867 | ) | (5,552 | ) | (3,982 | ) | ||||||||
Basic and diluted loss per common share | $ | (0.54 | ) | $ | (0.41 | ) | $ | (0.78 | ) | $ | (0.57 | ) |
OPERATING_SEGMENT_AND_GEOGRAPH
OPERATING SEGMENT AND GEOGRAPHIC INFORMATION | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Segment Reporting [Abstract] | ||||||||||||||
Operating Segment and Geographic Information | OPERATING SEGMENT AND GEOGRAPHIC INFORMATION | |||||||||||||
Transgenomic’s chief operating decision-maker is the Chief Executive Officer, who regularly evaluates our performance based on net sales and gross profit. The preparation of this segment analysis requires management to make estimates and assumptions around expenses below the gross profit level. While we believe the segment information to be materially correct, actual results could differ from the estimates and assumptions used in preparing this information. | ||||||||||||||
We have two reportable operating segments, Laboratory Services and Genetic Assays and Platforms. These lines of business are complementary with the Biomarker Identification labs driving innovation and leading to kit production in our Genetic Assays and Platforms segment and new tests in our Patient Testing labs. | ||||||||||||||
The accounting policies of the segments are the same as the policies discussed in Footnote 2 – “Summary of Significant Accounting Policies”. | ||||||||||||||
Segment information for the years ended December 31, 2014, 2013 and 2012 is as follows: | ||||||||||||||
Dollars in Thousands | ||||||||||||||
2014 | ||||||||||||||
Laboratory Services | Genetic Assays and Platforms | Total | ||||||||||||
Net Sales | $ | 16,520 | $ | 10,563 | $ | 27,083 | ||||||||
Gross Profit | 6,840 | 2,881 | 9,721 | |||||||||||
Net Loss before Taxes | (14,691 | ) | 1,273 | (13,418 | ) | |||||||||
Income Tax Expense | 631 | (107 | ) | 524 | ||||||||||
Net Loss | $ | (15,322 | ) | $ | 1,380 | $ | (13,942 | ) | ||||||
Depreciation/Amortization | $ | 2,088 | $ | 160 | $ | 2,248 | ||||||||
Interest Expense | 406 | 259 | 665 | |||||||||||
December 31, 2014 | ||||||||||||||
Total Assets | $ | 23,116 | $ | 6,890 | $ | 30,006 | ||||||||
Goodwill | 6,918 | — | 6,918 | |||||||||||
Dollars in Thousands | ||||||||||||||
2013 | ||||||||||||||
Laboratory Services | Genetic Assays and Platforms | Total | ||||||||||||
Net Sales | $ | 15,391 | $ | 12,153 | $ | 27,544 | ||||||||
Gross Profit | 6,820 | 3,934 | 10,754 | |||||||||||
Net (Loss) before Taxes | (12,486 | ) | (3,555 | ) | (16,041 | ) | ||||||||
Income Tax Expense | — | (54 | ) | (54 | ) | |||||||||
Net (Loss) | $ | (12,486 | ) | $ | (3,501 | ) | $ | (15,987 | ) | |||||
Depreciation/Amortization | $ | 2,467 | $ | 281 | $ | 2,748 | ||||||||
Interest Expense | 398 | 244 | 642 | |||||||||||
December 31, 2013 | ||||||||||||||
Total Assets | $ | 21,711 | $ | 8,567 | $ | 30,278 | ||||||||
Goodwill | 6,918 | — | 6,918 | |||||||||||
Dollars in Thousands | ||||||||||||||
2012 | ||||||||||||||
Laboratory Services | Genetic Assays and Platforms | Total | ||||||||||||
Net Sales | $ | 19,329 | $ | 12,151 | $ | 31,480 | ||||||||
Gross Profit | 9,316 | 3,816 | 13,132 | |||||||||||
Net Loss before Taxes | (6,874 | ) | (1,307 | ) | (8,181 | ) | ||||||||
Income Tax Expense | — | 146 | 146 | |||||||||||
Net Loss | $ | (6,874 | ) | $ | (1,453 | ) | $ | (8,327 | ) | |||||
Depreciation/Amortization | $ | 1,960 | $ | 318 | $ | 2,278 | ||||||||
Interest Expense | 851 | 37 | 888 | |||||||||||
December 31, 2012 | ||||||||||||||
Total Assets | $ | 29,196 | $ | 9,595 | $ | 38,791 | ||||||||
Goodwill | 6,918 | — | 6,918 | |||||||||||
Net sales for the year ended December 31, 2014, 2013 and 2012 by country were as follows: | ||||||||||||||
Dollars in Thousands | ||||||||||||||
Years Ended December 31, | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||
United States | $ | 21,052 | $ | 20,119 | $ | 22,727 | ||||||||
Italy | 1,258 | 1,530 | 2,524 | |||||||||||
United Kingdom | 881 | 748 | 1,703 | |||||||||||
All Other Countries | 3,892 | 5,147 | 4,526 | |||||||||||
Total | $ | 27,083 | $ | 27,544 | $ | 31,480 | ||||||||
Other than the countries specifically identified above, no country individually accounted for more than 5% of total net sales. | ||||||||||||||
More than 99% of our long-lived assets are located within the United States. Substantially all of the remaining long-lived assets are located within Europe. |
ACQUISITIONS
ACQUISITIONS | 12 Months Ended | |
Dec. 31, 2014 | ||
Business Combinations [Abstract] | ||
Acquisitions | ACQUISITIONS | |
ScoliScoreTM | ||
On September 21, 2012, we acquired certain intangible assets from Axial Biotech, Inc. (“Axial”) related to the ScoliScoreTM assay. In consideration for the purchase of the intangible assets, we made a cash payment of approximately $3.4 million to Axial and certain of its creditors. In addition, following the transfer of all of the assets related to the ScoliScoreTM assay and confirmation that the ScoliScoreTM assay operates, within our laboratories pursuant to protocol agreed upon by us and Axial, during the years ended December 31, 2012 and 2013 we paid an additional $0.2 million and $0.8 million, respectively, to Axial and certain of its creditors. The total consideration paid was $4.4 million. This acquisition provides us with the ScoliScoreTM assay technology and intellectual property, and an established revenue and customer base. | ||
The following intangible assets were each valued separately using valuation approaches most appropriate for each specific asset. | ||
Acquired technology | Relief from Royalty Method | |
Tradenames | Relief from Royalty Method | |
Customer relationships | Multi-Period Excess Earnings Method | |
Covenants not to compete | With and Without Method | |
Patents | Relief from Royalty Method | |
The Income Approach uses valuation techniques to convert future amounts, cash flows or earnings, to a single, discounted amount. The fair value measure is based on the value that is indicated by market expectations about the present value of those future amounts. | ||
The Relief from Royalty Method assumes that, if the Company did not have proprietary ownership of the genetic testing processes on which its revenues depend, it might elect to lease the rights or licenses from another company. The fair value is measured as the estimated discounted cash flows of the royalty payments avoided by ownership. | ||
The Multi Period Excess Earnings Method measures the fair value as the estimated discounted cash flows of the existing customer relationships over a period during which revenues from existing customer relationships are assumed to have been substantially replaced by revenues from future customers. | ||
The With and Without Method measures the fair value of the non-competition agreements as the probability adjusted difference between the estimated discounted cash flows with and without the effect of competition. The model that includes competition includes lost revenues as well as increased expenses required to rebuild the lost revenues. | ||
The acquired intangibles have the following useful lives; acquired technology - 10 years; third party payor relationships - 15 years; assay royalties - 7 years; tradenames and trademarks - 7 years. | ||
The assets acquired were $3.9 million in identifiable intangible assets and $0.5 million in goodwill. No liabilities were assumed. The acquired assets are reported as a component of our laboratory services segment. | ||
The goodwill arising from the acquisition has been assigned to our Laboratory Services segment and is expected to be deductible for tax purposes. |
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2014 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS |
Issuance of Convertible Promissory Notes | |
The Company entered into a purchase agreement with seven accredited investors (the “Investors”) on January 15, 2015 and issued and sold to the Investors in a private placement (the “Additional Private Placement”) Notes in an aggregate principal amount of $925,000 on January 20, 2015. Each of the Notes accrues interest at a rate of 6% per year and matures on December 31, 2016. The outstanding principal and unpaid interest accrued under each Note is convertible into shares of common stock of the Company as follows: (i) commencing upon the date of issuance of the Note (but no earlier than January 1, 2015), the Investor holding such Note is entitled to convert, on a one-time basis, up to 50% of the outstanding principal and unpaid interest accrued under the Note, into shares of our common stock at a conversion price equal to the lesser of (a) the average closing price of our common stock on the principal securities exchange or securities market on which our common stock is then traded (the “Market”) for the 20 consecutive trading days immediately preceding the date of conversion, and (b) $2.20 (subject to adjustment for stock splits, stock dividends, other distributions, recapitalizations and the like); and (ii) commencing February 15, 2015, the Investor holding such Note is entitled to convert, on a one-time basis, any or all of the remaining outstanding principal and unpaid interest accrued under the Note, into shares of our common stock at a conversion price equal to 85% of the average closing price of our common stock on the Market for the 15 consecutive trading days immediately preceding the date of conversion. | |
The Additional Private Placement required the repricing and issuance of additional common stock warrants to the investors in the Company’s February 2012 common stock and warrant financing. The exercise price of these warrants decreased from $10.25 per share to $9.59 per share and the number of shares issuable upon exercise of the warrants increased from 1,387,685 to 1,483,161. | |
Issuance of Common Stock and Common Stock Warrants | |
On February 27, 2015, the Company entered into a purchase agreement with Craig-Hallum Capital Group LLC (the “Underwriter”) relating to the Company’s sale and issuance of 3,573,899 shares of the Company’s common stock and corresponding warrants to purchase up to 714,780 shares of the Company’s common stock (the “Offering”). Each share of common stock was sold in combination with a warrant to purchase 0.20 of a share of common stock. The purchase price to the public for each share of common stock and accompanying warrant was $1.95. | |
The purchase price paid by the Underwriter to the Company for the common stock and accompanying warrants was $1.8135. The net proceeds from the Offering, after deducting the Underwriter’s discount and other estimated Offering expenses, were approximately $6.2 million. | |
The accompanying warrants are exercisable immediately upon their initial issuance date at an exercise price of $2.24 per share and will expire five years from the date of issuance. The exercise price will also be subject to adjustment in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events affecting our common stock. | |
The Offering required the repricing and issuance of additional common stock warrants to the investors in the Company’s February 2012 common stock and warrant financing. The exercise price of these warrants decreased from $9.59 per share to $7.56 per share and the number of shares issuable upon exercise of the warrants increased from 1,483,161 to 1,881,396. | |
Amended Loan and Security Agreement | |
On April 1, 2015, the Company entered into a sixth amendment to the Loan Agreement. The sixth amendment provides, among other things, that (i) the Lenders will waive specified events of default under the terms of the Loan Agreement, (ii) commencing as of April 1, 2015, the Company will make monthly interest payments to the Lenders, (iii) the Company will not be obligated to make monthly payments of principal to the Lenders until April 1, 2016, (iv) the Company will be required to make an initial prepayment of a portion of the loan balance in the amount of approximately $149,000 on April 1, 2015 and one or more additional prepayments to the Lenders under the Loan Agreement upon the occurrence of certain events, and (v) the Company will not be required to comply with the minimum liquidity ratio under the terms of the Loan Agreement until the earliest to occur of a specified event or March 31, 2016. The sixth amendment also extends the time period in which the Company must provide certain reports and statements to the Lenders and amends the circumstances pursuant to which the Company may engage in certain sales or transfers of its business or property without the consent of the Lenders. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended | |
Dec. 31, 2014 | ||
Accounting Policies [Abstract] | ||
Principles of Consolidation | Principles of Consolidation. | |
The consolidated financial statements include the accounts of Transgenomic, Inc. and its wholly owned subsidiary. All inter-company balances and transactions have been eliminated in consolidation. | ||
Risks and Uncertainties | Risks and Uncertainties. | |
Certain risks and uncertainties are inherent in the Company’s our day-to-day operations and to the process of preparing our financial statements. The more significant of those risks are presented below and throughout the notes to the financial statements. | ||
Use of Estimates | Use of Estimates. | |
The preparation of consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of net sales and expenses during the reporting period. In addition, estimates and assumptions associated with the determination of the fair value of certain assets and related impairments require considerable judgment by management. The key estimates included in the consolidated financial statements include stock option valuations, goodwill and intangible valuations, accounts receivable and inventory valuations, warrant valuations and contractual allowances. Actual results could differ from the estimates and assumptions used in preparing these consolidated financial statements. | ||
Basis of Presentation | Basis of Presentation. | |
On January 15, 2014, the Board of Directors of the Company approved a reverse split of the Company’s common stock, par value $0.01, at a ratio of one-for twelve. This reverse stock split became effective on January 27, 2014 and, unless otherwise indicated, all share amounts, per share data, share prices, exercise prices and conversion rates set forth in these notes and the accompanying consolidated financial statements have, where applicable, been adjusted retroactively to reflect this reverse stock split. | ||
Reclassifications | Reclassifications. | |
Certain prior period amounts of selling, general and administrative expenses have been reclassified to cost of goods sold in order to conform to the current period presentation. These reclassifications had no effect on previously reported net earnings. | ||
Fair Value | Fair Value. | |
Unless otherwise specified, book value approximates fair market value. The Company’s Level 1 financial instruments include cash and cash equivalents. The Company’s Level 3 financial instruments include the common stock warrant liability, preferred stock warrant liability and conversion feature, and debt. Due to its variable interest component, debt approximates fair value. The common stock warrant liability and Series A Convertible Preferred Stock (“Series A Preferred Stock”) warrant liability and conversion feature are recorded at fair value. | ||
Cash and Cash Equivalents | Cash and Cash Equivalents. | |
Cash and cash equivalents include cash and investments with original maturities at the date of acquisition of three months or less. Such investments presently consist of temporary overnight investments. | ||
Concentrations of Cash | Concentrations of Cash. | |
From time to time, we may maintain a cash position with financial institutions in amounts that exceed federally insured limits. | ||
Accounts Receivable | While payment terms are generally 30 days, we have also provided extended payment terms of up to 90 days in certain cases. We operate globally and some of the international payment terms can be greater than 90 days. Accounts receivable are carried at original invoice amount and shown net of allowance for doubtful accounts and contractual allowances. The estimate made for doubtful accounts is based on a review of all outstanding amounts on a quarterly basis. The estimate for contractual allowances is based on contractual terms or historical reimbursement rates and is recorded when revenue is recorded. We determine the allowance for doubtful accounts and contractual allowances by regularly evaluating individual payor receivables and considering a payor’s financial condition, credit history, reimbursement rates and current economic conditions. Accounts receivable are written off when deemed uncollectible and after all collection efforts have been exhausted. Recoveries of accounts receivable previously written off are recorded as a reduction in bad debt expense when received. | |
Inventories | Inventories. | |
Inventories are stated at the lower of cost or market net of allowance for obsolete and slow moving inventory. Cost is computed using standard costs for finished goods and average or latest actual cost for raw materials and work in process, which approximates the first-in, first-out (FIFO) method. We write down slow-moving and obsolete inventory by the difference between the value of the inventory and our estimate of the reduced value based on potential future uses, the likelihood that overstocked inventory will be sold and the expected selling prices of the inventory. If our ability to realize value on slow-moving or obsolete inventory is less favorable than assumed, additional write-downs of the inventory may be required. | ||
Inventory Obsolescence | We determine the allowance for obsolescence by evaluating inventory quarterly for items deemed to be slow moving or obsolete. | |
Property and Equipment | Property and Equipment. | |
Property and equipment are carried at cost. Depreciation is computed by the straight-line method over the estimated useful lives of the related assets as follows: | ||
Leasehold improvements | 1 to 10 years | |
Furniture and fixtures | 3 to 7 years | |
Production equipment | 3 to 7 years | |
Computer equipment | 3 to 7 years | |
Research and development equipment | 2 to 7 years | |
Goodwill | Goodwill. | |
Goodwill is tested for impairment annually utilizing a combination of income and market approaches. The income approach applies a discounted cash flow methodology to the Company’s future period projections and the more heavily weighted market approach uses market available information on the Company. We perform this impairment analysis during the fourth quarter of each year or when a significant event occurs that may impact goodwill. Impairment may occur when the carrying value of the reporting unit exceeds its fair value. If the carrying value of the reporting unit exceeds its fair value, the fair value of all identifiable tangible and intangible assets and liabilities is determined as part of a hypothetical purchase price allocation to determine the amount of goodwill impairment. | ||
Intangibles | Intangibles. | |
Intangible assets include intellectual property, patents and acquired products. At December 31, 2013, the Company revised its estimate of useful lives on certain intangible assets, which caused decreased amortization expense in 2014 by $0.4 million. | ||
1. Intellectual Property. Initial costs paid to license intellectual property from independent third parties are capitalized and amortized using the straight-line method over the license period. Ongoing royalties related to such licenses are expensed as incurred. | ||
2. Patents. We capitalize legal costs, filing fees and other expenses associated with obtaining patents on new discoveries and amortize these costs using the straight-line method over the shorter of the legal life of the patent or its economic life beginning on the date the patent is issued. | ||
3. Acquired Products. As part of the FAMILION acquisition and acquisition of certain intangible assets from Axial, the Company acquired technology, in process technology, trademarks/tradenames, customer relationships, covenants not to compete and third party relationships. These costs will be amortized pursuant to the straight-line method over their estimated economic life of seven to ten years. See Footnote 5 “Intangible Assets and Other Assets”. | ||
We review our amortizable long lived assets for impairment whenever events indicate that the carrying amount of the asset (group) may not be recoverable. An impairment loss may be needed if the sum of the future undiscounted cash flows is less than the carrying amount of the asset (group). The amount of the loss would be determined by comparing the fair market value of the asset to the carrying amount of the asset (group). | ||
Common Stock Warrants | Common Stock Warrants. | |
Our issued and outstanding 2012 warrants to purchase common stock do not qualify to be treated as equity and accordingly, are recorded as a liability (“Common Stock Warrant Liability”). The Common Stock Warrant Liability was initially recorded at fair value using a Monte Carlo simulation model. We are required to present these instruments at fair value at each reporting date and any changes in fair values are recorded as an adjustment to earnings. The Common Stock Warrant Liability is considered a Level 3 financial instrument. | ||
Stock Based Compensation | Stock Based Compensation. | |
All stock-based awards to date have exercise prices equal to the market price of our common stock on the date of grant and have ten-year contractual terms. Unvested options as of December 31, 2014 had vesting periods of one or three years from the date of grant. None of the stock options outstanding at December 31, 2014 are subject to performance or market-based vesting conditions. | ||
We measure and recognize compensation expense for all stock-based awards made to employees and directors, including stock options. Compensation expense, net of estimated forfeitures, is based on the calculated fair value of the awards as measured at the grant date and is expensed over the service period of the awards. | ||
Income Taxes | Income Taxes. | |
Deferred tax assets and liabilities are determined based on the differences between the financial reporting and tax basis of assets and liabilities at each balance sheet date using tax rates expected to be in effect in the year the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance to the extent that it is more likely than not that they will not be realized. Our policy is to record interest and penalties directly related to income taxes as income tax expense in the Consolidated Statements of Operations. | ||
Net Sales Recognition | Net Sales Recognition. | |
Revenue is realized and earned when all of the following criteria are met: | ||
• | Persuasive evidence of an arrangement exists; | |
• | Delivery has occurred or services have been rendered; | |
• | The seller’s price to the buyer is fixed or determinable; and | |
• | Collectability is reasonably assured. | |
In Laboratory Services, net sales from Patient Testing laboratories are recognized on an individual test basis and take place when the test report is completed, reviewed and sent to the client less the reserve for insurance, Medicare and Medicaid contractual adjustments. There are no deferred net sales associated with our Patient Testing services. Adjustments to the allowances, based on actual receipts from third party payers, are reflected in the estimated contractual allowance applied prospectively. In our Biomarker Identification laboratory, we perform services on a project by project basis. When we receive payment in advance, we recognize revenue when we deliver the service. These projects typically do not extend beyond one year. At December 31, 2014 and 2013, deferred net sales associated with pharmacogenomics research projects, included in the balance sheet in deferred revenue, was $0.3 million and $0.2 million, respectively. | ||
Net sales of Genetic Assays and Platforms products are recognized in accordance with the terms of the sales arrangement. Such recognition is based on receipt of an unconditional customer order and transfer of title and risk of ownership to the customer, typically upon shipment of the product under a purchase order. Our sales terms do not provide for the right of return unless the product is damaged or defective. Net sales from certain services associated with the analytical instruments, to be performed subsequent to shipment of the products, is deferred and recognized when the services are provided. Such services, mainly limited to installation and training services that are not essential to the functionality of the instruments, typically are performed in a timely manner subsequent to shipment of the instrument. We also enter into various service contracts that cover installed instruments. These contracts cover specific time periods and net sales associated with these contracts are deferred and recognized ratably over the service period. At December 31, 2014 and 2013, deferred net sales, mainly associated with our service contracts, included in the balance sheet in deferred revenue was approximately $0.7 million and $0.9 million, respectively. | ||
Taxes collected from customers and remitted to government agencies for specific net sales producing transactions are recorded net with no effect on the income statement. | ||
Research and Development | Research and Development. | |
Research and development and various collaboration costs are charged to expense when incurred. | ||
Translation of Foreign Currency | Translation of Foreign Currency. | |
Our foreign subsidiary uses the local currency of the country in which it is located as its functional currency. Its assets and liabilities are translated into U.S. dollars at the exchange rates in effect at the balance sheet date. | ||
Earnings Per Share | Earnings Per Share. | |
Basic earnings per share is calculated based on the weighted-average number of shares of common stock outstanding during each period. Diluted earnings per share includes shares issuable upon exercise of outstanding stock options, warrants or conversion rights that have exercise or conversion prices below the market value of our common stock, as long as the effect is not anti-dilutive. | ||
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements. | |
In April 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity, which changes the criteria for reporting a discontinued operation. Under this standard, a disposal of part of an organization that has a major effect on its operations and financial results is a discontinued operation. This guidance is effective prospectively for us beginning January 1, 2015 with earlier application permitted, but only for disposals (or classifications as held for sale) that have not been reported previously. When adopted, we do not expect that this guidance will have a material impact on our financial condition, results of operations or cash flows. | ||
In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers. This guidance requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to a customer. This ASU will replace most existing revenue recognition guidance in generally accepted accounting principles in the U.S. when it becomes effective on January 1, 2017. Early application is not permitted, but the standard permits the use of either the retrospective or cumulative effect transition method. We have not selected a transition method and are currently evaluating the impact this guidance will have on our financial condition, results of operations and cash flows. | ||
In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40). The new guidance addresses management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. The standard will be effective for the first interim period within annual reporting periods beginning after December 15, 2016. Early adoption is permitted. We do not expect to early adopt this guidance and do not believe that the adoption of this guidance will have a material impact on our consolidated financial statements. |
SUMMARY_OF_SIGNIFICANT_ACCOUNT2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||
Allowance for doubtful accounts rollforward | The following is a summary of activity for the allowance for doubtful accounts during the years ended December 31, 2014, 2013 and 2012: | |||||||||||||||
Dollars in Thousands | ||||||||||||||||
Beginning | Provision | Write Offs | Ending | |||||||||||||
Balance | Balance | |||||||||||||||
Twelve months ended December 31, 2014 | $ | 3,838 | $ | 6,119 | $ | (2,010 | ) | $ | 7,947 | |||||||
Twelve months ended December 31, 2013 | $ | 2,171 | $ | 5,548 | $ | (3,881 | ) | $ | 3,838 | |||||||
Twelve months ended December 31, 2012 | $ | 1,088 | $ | 2,468 | $ | (1,385 | ) | $ | 2,171 | |||||||
Allowance for obsolete inventory rollforward | The following is a summary of activity for the allowance for obsolete inventory during the years ended December 31, 2014, 2013 and 2012: | |||||||||||||||
Dollars in Thousands | ||||||||||||||||
Beginning | Provision | Write Offs | Ending | |||||||||||||
Balance | Balance | |||||||||||||||
Twelve months ended December 31, 2014 | $ | 799 | $ | 61 | $ | (232 | ) | $ | 628 | |||||||
Twelve months ended December 31, 2013 | $ | 616 | $ | 217 | $ | (34 | ) | $ | 799 | |||||||
Twelve months ended December 31, 2012 | $ | 511 | $ | 129 | $ | (24 | ) | $ | 616 | |||||||
Schedule of property and equipment, useful lives | Depreciation is computed by the straight-line method over the estimated useful lives of the related assets as follows: | |||||||||||||||
Leasehold improvements | 1 to 10 years | |||||||||||||||
Furniture and fixtures | 3 to 7 years | |||||||||||||||
Production equipment | 3 to 7 years | |||||||||||||||
Computer equipment | 3 to 7 years | |||||||||||||||
Research and development equipment | 2 to 7 years |
INVENTORIES_Tables
INVENTORIES (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Inventory Disclosure [Abstract] | ||||||||
Inventories | Inventories (net of allowance for slow moving and obsolescence) consisted of the following: | |||||||
Dollars in Thousands | ||||||||
December 31, | December 31, | |||||||
2014 | 2013 | |||||||
Finished goods | $ | 2,139 | $ | 2,978 | ||||
Raw materials and work in process | 1,302 | 1,567 | ||||||
Demonstration inventory | 192 | 211 | ||||||
$ | 3,633 | $ | 4,756 | |||||
Less allowances | (628 | ) | (799 | ) | ||||
Total | $ | 3,005 | $ | 3,957 | ||||
INTANGIBLE_ASSETS_AND_OTHER_AS1
INTANGIBLE ASSETS AND OTHER ASSETS (Tables) | 12 Months Ended | |||||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||
Schedule of Indefinite-Lived and Finite-Lived Intangible Assets | ||||||||||||||||||||||||
Estimated Useful Life | ||||||||||||||||||||||||
Acquired technology | 7 – 10 years | |||||||||||||||||||||||
Assay royalties | 7 years | |||||||||||||||||||||||
Third party payor relationships | 15 years | |||||||||||||||||||||||
Tradenames and trademarks | 7 years | |||||||||||||||||||||||
Customer relationships | 15 years | |||||||||||||||||||||||
Covenants not to compete | 3 years | |||||||||||||||||||||||
Patents | Life of the patent | |||||||||||||||||||||||
Intellectual property | 7 years | |||||||||||||||||||||||
Long-lived intangible assets and other assets consisted of the following: | ||||||||||||||||||||||||
Dollars in Thousands | ||||||||||||||||||||||||
December 31, 2014 | December 31, 2013 | |||||||||||||||||||||||
Cost | Accumulated | Net Book | Cost | Accumulated | Net Book | |||||||||||||||||||
Amortization | Value | Amortization | Value | |||||||||||||||||||||
Acquired technology | $ | 9,009 | $ | 3,995 | $ | 5,014 | $ | 9,009 | $ | 3,175 | $ | 5,834 | ||||||||||||
Assay royalties | 1,434 | 819 | 615 | 1,434 | 614 | 820 | ||||||||||||||||||
Third party payor relationships | 367 | 98 | 269 | 367 | 73 | 294 | ||||||||||||||||||
Tradenames and trademarks | 824 | 351 | 473 | 824 | 233 | 591 | ||||||||||||||||||
Customer relationships | 652 | 98 | 554 | 652 | 54 | 598 | ||||||||||||||||||
Covenants not to compete | 184 | 138 | 46 | 184 | 77 | 107 | ||||||||||||||||||
Patents | 1,198 | 385 | 813 | 1,153 | 336 | 817 | ||||||||||||||||||
Intellectual property | 266 | 86 | 180 | 170 | 36 | 134 | ||||||||||||||||||
$ | 13,934 | $ | 5,970 | $ | 7,964 | $ | 13,793 | $ | 4,598 | $ | 9,195 | |||||||||||||
DEBT_Tables
DEBT (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Debt Disclosure [Abstract] | |||||||||
Schedule of Debt | |||||||||
-1 | Revolving Line of Credit. Amounts advanced under the Revolving Line bear interest at an annual rate equal to the greater of (a) 4.25% or (b) the Wall Street Journal prime rate plus 1%. Interest is payable on a monthly basis, with the balance payable at the maturity of the Revolving Line. Under the Amendment, amounts advanced under the Revolving Line bear interest at an annual rate equal to the greater of (x) 6.25% or (y) the Wall Street Journal prime rate plus 3%. The current interest rate is 6.25%. Under the Loan Agreement, we paid the Lenders an upfront fee of $20,000, and will pay the Lenders an additional commitment fee of $20,000 on each one year anniversary of the Effective Date during the term of the Revolving Line. In addition, a fee of 0.5% per annum is payable quarterly on the unused portion of the Revolving Line. The Revolving Line matures on September 1, 2016. | ||||||||
-2 | Term Loan. We received $4.0 million under the Term Loan on the Effective Date. Pursuant to the terms of the Loan Agreement, as amended by the Sixth Amendment, we are required to make monthly payments of interest to the Lenders commencing on April 1, 2015. The current interest rate is 9.1%. | ||||||||
We paid the Lenders an upfront fee of $40,000 for the Term Loan, and will pay the Lenders an additional final payment of $120,000 at maturity or prepayment of the Term Loan. In addition, if we repay the Term Loan prior to maturity, we will pay the Lenders a prepayment penalty of 2.5% of the total outstanding balance under the Term Loan if the prepayment occurs between one and two years after the Effective Date, and 1% of the total outstanding balance under the Term Loan if the prepayment occurs thereafter. | |||||||||
Additional Terms | |||||||||
The Loan Agreement contains affirmative and negative covenants. Under the Loan Agreement, we are required to maintain a minimum liquidity ratio and achieve a minimum amount of revenue, and we also agreed not to (i) pledge or otherwise encumber our assets other than to the Lenders, (ii) enter into additional borrowings or guarantees, (iii) repurchase our capital stock, or (iv) enter into certain mergers or acquisitions without the Lenders’ consent. Additionally, the Loan Agreement contains a subjective acceleration clause at the discretion of the Lenders. As of December 31, 2014, the Company was in compliance with all financial covenants of the Loan Agreement, as amended by the Fifth Amendment. | |||||||||
To secure the repayment of any amounts borrowed under the Revolving Line and the Term Loan, we granted the Lenders a security interest in all of our assets. The occurrence of an event of default under the Loan Agreement could result in the acceleration of our obligations under the Loan Agreement and would increase the applicable interest rate under the Revolving Line or Term Loan (or both) by 5%, and permit the Lenders to exercise remedies with respect to the collateral under the Loan Agreement. | |||||||||
-3 | Convertible Promissory Note. The Note accrues interest at a rate of 6% per year and matures on December 31, 2016. On January 1, 2015, $375,000 of the December 31, 2014 balance was converted into 198,708 shares of Company common stock in accordance with the terms of the Note. | ||||||||
Dollars in Thousands | |||||||||
Year Ended December 31, | |||||||||
2014 | 2013 | ||||||||
Revolving Line (1) | $ | 3,000 | $ | 2,560 | |||||
Term Loan (2) | 4,087 | 4,000 | |||||||
Convertible Promissory Note (3) | 750 | — | |||||||
Total debt | 7,837 | 6,560 | |||||||
Current portion of long term debt | (462 | ) | (242 | ) | |||||
Long term debt, net of current maturities | $ | 7,375 | $ | 6,318 | |||||
Schedule of Maturities of Long-term Debt | The aggregate minimum principal maturities of the debt for the following fiscal years are as follows (dollars in thousands): | ||||||||
2015 | $ | 462 | |||||||
2016 | 7,375 | ||||||||
Total | $ | 7,837 | |||||||
CAPITAL_LEASES_Tables
CAPITAL LEASES (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Leases [Abstract] | ||||||||
Schedule of Capital Leased Assets | The following is an analysis of the property acquired under capital leases. | |||||||
Dollars in Thousands | ||||||||
Asset Balances at | ||||||||
Classes of Property | December 31, | December 31, | ||||||
2014 | 2013 | |||||||
Equipment | $ | 1,514 | $ | 1,514 | ||||
Less: Accumulated amortization | (997 | ) | (721 | ) | ||||
Total | $ | 517 | $ | 793 | ||||
Schedule of Future Minimum Lease Payments for Capital Leases | The following is a schedule by years of future minimum lease payments under capital leases together with the present value of the net minimum lease payments as of December 31, 2014. | |||||||
Year ending December 31: | ||||||||
Dollars in Thousands | ||||||||
2015 | 35 | |||||||
2016 | 3 | |||||||
2017 | 1 | |||||||
Total minimum lease payments | $ | 39 | ||||||
Less: Amount representing interest | (2 | ) | ||||||
Present value of net minimum lease payments | $ | 37 | ||||||
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended | |||
Dec. 31, 2014 | ||||
Commitments and Contingencies Disclosure [Abstract] | ||||
Schedule of Future Minimum Rental Payments for Operating Leases | Future minimum lease payments under non-cancellable operating leases are as follows (in thousands): | |||
2015 | $ | 1,032 | ||
2016 | 927 | |||
2017 | 763 | |||
2018 | 485 | |||
2019 | 235 | |||
thereafter | 628 | |||
Total | $ | 4,070 | ||
INCOME_TAXES_Tables
INCOME TAXES (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||
Schedule of Effective Income Tax Rate Reconciliation | The Company’s provision for income taxes for the years ended December 31, 2014, 2013 and 2012 relates to income taxes in states, foreign countries and other local jurisdictions and differs from the amounts determined by applying the statutory Federal income tax rate to loss before income taxes for the following reasons: | ||||||||||||
Dollars in Thousands | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Benefit at federal rate | $ | (4,562 | ) | $ | (5,454 | ) | $ | (2,781 | ) | ||||
Increase (decrease) resulting from: | |||||||||||||
State income taxes—net of federal benefit | (360 | ) | (518 | ) | 2 | ||||||||
Foreign subsidiary tax rate difference | 114 | (3 | ) | (27 | ) | ||||||||
Tax contingency | (144 | ) | 23 | 22 | |||||||||
Expiring net operating loss carryforwards | — | — | 1,472 | ||||||||||
Earnings repatriation | — | — | 582 | ||||||||||
Miscellaneous permanent differences | 227 | 155 | 284 | ||||||||||
Liability warrants | (154 | ) | (102 | ) | (748 | ) | |||||||
Tax credits | — | — | 215 | ||||||||||
State, net operating loss expiration/true-up | (327 | ) | 1,179 | — | |||||||||
Other—net | 44 | (80 | ) | 15 | |||||||||
Valuation allowance | 5,686 | 4,746 | 1,110 | ||||||||||
Total income tax (benefit) expense | $ | 524 | $ | (54 | ) | $ | 146 | ||||||
Schedule of Components of Income Tax Expense (Benefit) | |||||||||||||
Dollars in Thousands | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Federal: | |||||||||||||
Current | $ | — | $ | — | $ | — | |||||||
Deferred | 608 | — | — | ||||||||||
Total Federal | $ | 608 | $ | — | $ | — | |||||||
State: | |||||||||||||
Current | $ | — | $ | — | $ | 3 | |||||||
Deferred | 23 | — | — | ||||||||||
Total State | $ | 23 | $ | — | $ | 3 | |||||||
Foreign: | |||||||||||||
Current | $ | (156 | ) | $ | 20 | $ | 46 | ||||||
Deferred | 49 | (74 | ) | 97 | |||||||||
Total Foreign | $ | (107 | ) | $ | (54 | ) | $ | 143 | |||||
Total Tax Provision | $ | 524 | $ | (54 | ) | $ | 146 | ||||||
Schedule of Deferred Tax Assets and Liabilities | The Company’s deferred income tax asset at December 31, 2014 and 2013 is comprised of the following temporary differences: | ||||||||||||
Dollars in Thousands | |||||||||||||
2014 | 2013 | ||||||||||||
Deferred Tax Asset: | |||||||||||||
Net operating loss carryforward | $ | 46,231 | $ | 42,950 | |||||||||
Research and development credit carryforwards | 918 | 951 | |||||||||||
Deferred revenue | 207 | 174 | |||||||||||
Inventory | 200 | 275 | |||||||||||
Allowance for bad debt | 2,738 | 1,279 | |||||||||||
Other | 1,545 | 718 | |||||||||||
51,839 | 46,347 | ||||||||||||
Less valuation allowance | (51,751 | ) | (46,088 | ) | |||||||||
Deferred Tax Asset | $ | 88 | $ | 259 | |||||||||
Deferred Tax Liability: | |||||||||||||
Goodwill | $ | 631 | $ | — | |||||||||
Foreign earnings | $ | — | $ | 25 | |||||||||
Property and equipment | 88 | 186 | |||||||||||
Deferred Tax Liability | $ | 719 | $ | 211 | |||||||||
Net Deferred Asset (Liability) | $ | (631 | ) | $ | 48 | ||||||||
Summary of Operating Loss Carryforwards | At December 31, 2014, we had total unused federal tax net operating loss carryforwards of $128.9 million. The expiration dates are as follows (amounts in thousands): | ||||||||||||
2018 | $ | 1,838 | |||||||||||
2019 | 8,181 | ||||||||||||
2020 | 9,662 | ||||||||||||
2021 | 8,228 | ||||||||||||
2022 | 16,862 | ||||||||||||
2023 | 16,173 | ||||||||||||
2024 | 17,390 | ||||||||||||
2025 | 8,153 | ||||||||||||
2026 | 6,792 | ||||||||||||
2027 | 3,238 | ||||||||||||
2028 | 1,272 | ||||||||||||
2029 | 591 | ||||||||||||
2031 | 2,784 | ||||||||||||
2032 | 8,358 | ||||||||||||
2033 | 11,748 | ||||||||||||
2034 | 7,662 | ||||||||||||
Total | $ | 128,932 | |||||||||||
STOCKHOLDERS_EQUITY_Tables
STOCKHOLDERS' EQUITY (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Stockholders' Equity Note [Abstract] | |||||||||
Schedule of Stockholders' Equity Note, Warrants or Rights | |||||||||
Warrant Holder | Issue Year | Expiration | Underlying | Exercise | |||||
Shares | Price | ||||||||
Third Security Investors(1) | 2010 | Dec-15 | 431,027 | $6.96 | |||||
Various Institutional Holders(2) | 2012 | Feb-17 | 1,204,763 | $10.25 | |||||
Third Security Investors(2) | 2012 | Feb-17 | 182,922 | $10.25 | |||||
Various Institutional Holders(3) | 2013 | Jan-18 | 441,656 | $9.00 | |||||
Third Security Investors(3) | 2013 | Jan-18 | 250,000 | $9.00 | |||||
Various Institutional Holders(4) | 2014 | Apr-20 | 374,618 | $4.00 | |||||
2,884,986 | |||||||||
-1 | This Warrant was issued in connection with the issuance of warrants to purchase shares of our Series A Preferred Stock to the Third Security Investors in December 2010. The number of underlying shares shown reflects the number of shares of common stock issuable upon conversion of the shares of Series A Preferred Stock for which this Warrant is currently exercisable. | ||||||||
-2 | These Warrants were issued in connection with the Private Placement completed in February 2012 and are classified as a liability in our financial statements. See Footnote 13 - “Fair Value”. These warrants also contain certain anti-dilution provisions that provide for an adjustment to the exercise price and number of shares issuable upon exercise of the warrant in the event that we engage in certain issuances of shares of our common stock at a price lower than the exercise price of the warrant. | ||||||||
-3 | These warrants were issued in connection with the Offering, which was completed in January 2013. | ||||||||
-4 | These warrants were issued in connection with the 2014 Private Placement, which was completed in October 2014. |
EQUITY_INCENTIVE_PLAN_Tables
EQUITY INCENTIVE PLAN (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||
Schedule of Share-based Compensation, Stock Options, Activity | The following table summarizes stock option activity under the Plan during the year ended December 31, 2014: | |||||||
Number of | Weighted Average | |||||||
Options | Exercise Price | |||||||
Balance at January 1, 2014 | 565,028 | $ | 7.19 | |||||
Granted | 264,529 | 5.1 | ||||||
Forfeited | (115,222 | ) | 5.53 | |||||
Expired | (14,436 | ) | 12.03 | |||||
Balance at December 31, 2014 | 699,899 | $ | 6.58 | |||||
Exercisable at December 31, 2014 | 289,617 | $ | 8.87 | |||||
Schedule of Other Share-based Compensation, Activity | The following table summarizes SARs activity under the Plan during the year ended December 31, 2014: | |||||||
Number of | Weighted Average | |||||||
SARs | Exercise Price | |||||||
Balance at January 1, 2014 | 138,333 | $ | 4.32 | |||||
Granted | 15,000 | 3.15 | ||||||
Forfeited | (34,788 | ) | 4.32 | |||||
Expired | (20,212 | ) | 4.32 | |||||
Balance at December 31, 2014 | 98,333 | $ | 4.14 | |||||
Exercisable at December 31, 2014 | 35,208 | $ | 4.32 | |||||
FAIR_VALUE_Tables
FAIR VALUE (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Fair Value Disclosures [Abstract] | |||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | During the year ended December 31, 2014, the changes in the fair value of the liability measured using significant unobservable inputs (Level 3) was comprised of the following: | ||||
Dollars in Thousands | |||||
For the Year Ended | |||||
December 31, 2014 | |||||
Balance at December 31, 2013 | $ | 600 | |||
Total gains or losses: | |||||
Recognized in earnings | (455 | ) | |||
Balance at December 31, 2014 | $ | 145 | |||
SELECTED_QUARTERLY_FINANCIAL_D1
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) (Tables) | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||||||
Schedule of Quarterly Financial Information | ||||||||||||||||
In thousands, except per share data | ||||||||||||||||
31-Mar | 30-Jun | 30-Sep | 31-Dec | |||||||||||||
2014 | ||||||||||||||||
Net Sales | $ | 6,251 | $ | 6,764 | $ | 6,372 | $ | 7,696 | ||||||||
Gross Profit | 2,494 | 2,393 | 2,215 | 2,619 | ||||||||||||
Net Loss | (4,176 | ) | (3,893 | ) | (80 | ) | (5,793 | ) | ||||||||
Basic and diluted loss per common share | $ | (0.60 | ) | $ | (0.57 | ) | $ | (0.05 | ) | $ | (0.77 | ) | ||||
2013 | ||||||||||||||||
Net Sales | $ | 7,374 | $ | 7,306 | $ | 6,646 | $ | 6,218 | ||||||||
Gross Profit | 3,255 | 2,973 | 2,450 | 2,076 | ||||||||||||
Net Income (Loss) | (3,586 | ) | (2,867 | ) | (5,552 | ) | (3,982 | ) | ||||||||
Basic and diluted loss per common share | $ | (0.54 | ) | $ | (0.41 | ) | $ | (0.78 | ) | $ | (0.57 | ) |
OPERATING_SEGMENT_AND_GEOGRAPH1
OPERATING SEGMENT AND GEOGRAPHIC INFORMATION (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Segment Reporting [Abstract] | ||||||||||||||
Schedule of Segment Reporting Information, by Segment | Segment information for the years ended December 31, 2014, 2013 and 2012 is as follows: | |||||||||||||
Dollars in Thousands | ||||||||||||||
2014 | ||||||||||||||
Laboratory Services | Genetic Assays and Platforms | Total | ||||||||||||
Net Sales | $ | 16,520 | $ | 10,563 | $ | 27,083 | ||||||||
Gross Profit | 6,840 | 2,881 | 9,721 | |||||||||||
Net Loss before Taxes | (14,691 | ) | 1,273 | (13,418 | ) | |||||||||
Income Tax Expense | 631 | (107 | ) | 524 | ||||||||||
Net Loss | $ | (15,322 | ) | $ | 1,380 | $ | (13,942 | ) | ||||||
Depreciation/Amortization | $ | 2,088 | $ | 160 | $ | 2,248 | ||||||||
Interest Expense | 406 | 259 | 665 | |||||||||||
December 31, 2014 | ||||||||||||||
Total Assets | $ | 23,116 | $ | 6,890 | $ | 30,006 | ||||||||
Goodwill | 6,918 | — | 6,918 | |||||||||||
Dollars in Thousands | ||||||||||||||
2013 | ||||||||||||||
Laboratory Services | Genetic Assays and Platforms | Total | ||||||||||||
Net Sales | $ | 15,391 | $ | 12,153 | $ | 27,544 | ||||||||
Gross Profit | 6,820 | 3,934 | 10,754 | |||||||||||
Net (Loss) before Taxes | (12,486 | ) | (3,555 | ) | (16,041 | ) | ||||||||
Income Tax Expense | — | (54 | ) | (54 | ) | |||||||||
Net (Loss) | $ | (12,486 | ) | $ | (3,501 | ) | $ | (15,987 | ) | |||||
Depreciation/Amortization | $ | 2,467 | $ | 281 | $ | 2,748 | ||||||||
Interest Expense | 398 | 244 | 642 | |||||||||||
December 31, 2013 | ||||||||||||||
Total Assets | $ | 21,711 | $ | 8,567 | $ | 30,278 | ||||||||
Goodwill | 6,918 | — | 6,918 | |||||||||||
Dollars in Thousands | ||||||||||||||
2012 | ||||||||||||||
Laboratory Services | Genetic Assays and Platforms | Total | ||||||||||||
Net Sales | $ | 19,329 | $ | 12,151 | $ | 31,480 | ||||||||
Gross Profit | 9,316 | 3,816 | 13,132 | |||||||||||
Net Loss before Taxes | (6,874 | ) | (1,307 | ) | (8,181 | ) | ||||||||
Income Tax Expense | — | 146 | 146 | |||||||||||
Net Loss | $ | (6,874 | ) | $ | (1,453 | ) | $ | (8,327 | ) | |||||
Depreciation/Amortization | $ | 1,960 | $ | 318 | $ | 2,278 | ||||||||
Interest Expense | 851 | 37 | 888 | |||||||||||
December 31, 2012 | ||||||||||||||
Total Assets | $ | 29,196 | $ | 9,595 | $ | 38,791 | ||||||||
Goodwill | 6,918 | — | 6,918 | |||||||||||
Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas | Net sales for the year ended December 31, 2014, 2013 and 2012 by country were as follows: | |||||||||||||
Dollars in Thousands | ||||||||||||||
Years Ended December 31, | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||
United States | $ | 21,052 | $ | 20,119 | $ | 22,727 | ||||||||
Italy | 1,258 | 1,530 | 2,524 | |||||||||||
United Kingdom | 881 | 748 | 1,703 | |||||||||||
All Other Countries | 3,892 | 5,147 | 4,526 | |||||||||||
Total | $ | 27,083 | $ | 27,544 | $ | 31,480 | ||||||||
ACQUISITIONS_Tables
ACQUISITIONS (Tables) | 12 Months Ended | |
Dec. 31, 2014 | ||
Business Combinations [Abstract] | ||
Schedule of Intangible Assets, Valuation Approach | The following intangible assets were each valued separately using valuation approaches most appropriate for each specific asset. | |
Acquired technology | Relief from Royalty Method | |
Tradenames | Relief from Royalty Method | |
Customer relationships | Multi-Period Excess Earnings Method | |
Covenants not to compete | With and Without Method | |
Patents | Relief from Royalty Method |
BUSINESS_DESCRIPTION_Details
BUSINESS DESCRIPTION (Details) (USD $) | 0 Months Ended | 1 Months Ended | 12 Months Ended | 3 Months Ended | |
In Millions, unless otherwise specified | Feb. 02, 2012 | Dec. 29, 2010 | Dec. 31, 2011 | Dec. 31, 2014 | Mar. 31, 2015 |
operating_segments | |||||
Subsequent Event [Line Items] | |||||
Proceeds from issuance of common stock and convertible notes | $22 | $6 | $3 | ||
Mutations occurrence as percentage of sample, less than | 5.00% | ||||
Mutations at lower levels, percentage | 0.01% | ||||
Number of operating segments | 2 | ||||
Working capital | 2.3 | ||||
Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Proceeds from issuance of common stock and convertible notes | $7.10 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Accounts Receivable) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Allowance for Doubtful Accounts Receivable [Roll Forward] | |||
Beginning Balance | $3,838 | $2,171 | $1,088 |
Provision | 6,119 | 5,548 | 2,468 |
Write Offs | -2,010 | -3,881 | -1,385 |
Ending Balance | $7,947 | $3,838 | $2,171 |
Accounts receivable, general payment terms | 30 days | ||
Accounts receivable, domestic extended payment terms | 90 days | ||
Accounts receivable, international extended payment terms greater than | 90 days |
SUMMARY_OF_SIGNIFICANT_ACCOUNT4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Inventories) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Obsolete Inventory [Roll Forward] | |||
Beginning Balance | $799 | $616 | $511 |
Provision | 61 | 217 | 129 |
Write Offs | -232 | -34 | -24 |
Ending Balance | $628 | $799 | $616 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Property, Plant and Equipment) (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Property, Plant and Equipment [Line Items] | |||
Depreciation expense | $0.50 | $0.60 | $0.70 |
Depreciation expense, capital leases | $0.30 | $0.30 | $0.30 |
Leasehold improvements | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, estimated useful lives | 1 year | ||
Leasehold improvements | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, estimated useful lives | 10 years | ||
Furniture and fixtures | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, estimated useful lives | 3 years | ||
Furniture and fixtures | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, estimated useful lives | 7 years | ||
Production equipment | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, estimated useful lives | 3 years | ||
Production equipment | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, estimated useful lives | 7 years | ||
Computer equipment | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, estimated useful lives | 3 years | ||
Computer equipment | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, estimated useful lives | 7 years | ||
Research and development equipment | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, estimated useful lives | 2 years | ||
Research and development equipment | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, estimated useful lives | 7 years |
SUMMARY_OF_SIGNIFICANT_ACCOUNT6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Accounting Policies) (Details) (USD $) | 0 Months Ended | 12 Months Ended | |||||||
Jan. 27, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jan. 27, 2014 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Common stock, par value (in usd per share) | $0.01 | [1] | $0.01 | [1] | $0.01 | [1] | $0.01 | [1] | |
Prior period reclassification | $1,700,000 | $1,900,000 | |||||||
Common stock reverse stock split, conversion ratio | 0.0833 | ||||||||
Impairment of goodwill | 0 | ||||||||
Decrease in amortization expense | 400,000 | ||||||||
Impairment of intangibles | 0 | 0 | 0 | ||||||
Equity awards, contractual term | 10 years | ||||||||
Deferred revenue | 1,035,000 | 1,088,000 | |||||||
Foreign currency translation adjustment | -50,000 | -45,000 | 99,000 | ||||||
Foreign currency translation income (loss) (less than) | -100,000 | 100,000 | -100,000 | ||||||
Options, warrants and conversion rights, common stock callable and antidilutive (in shares) | 6,613,572 | 3,785,709 | 2,471,670 | ||||||
Pharmacogenomic services | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Deferred revenue | 300,000 | 200,000 | |||||||
Diagnostic tools | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Deferred revenue | $700,000 | $900,000 | |||||||
Minimum | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Equity awards, vesting period | 1 year | ||||||||
Maximum | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Equity awards, vesting period | 3 years | ||||||||
Familion | Minimum | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Estimated economic life | 7 years | ||||||||
Familion | Maximum | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Estimated economic life | 10 years | ||||||||
[1] | The common stock shares and additional paid-in capital for all periods presented reflect the one-for-twelve reverse stock split which took effect on January 27, 2014. |
SALE_OF_PRODUCT_LINE_Details
SALE OF PRODUCT LINE (Details) (USD $) | 12 Months Ended | 0 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jul. 01, 2014 | |
Installment | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Gain on sale of product line | $4,114,000 | $0 | $0 | |
Surveyor Kit Patent, Technology and Inventory Purchase Agreement [Member] | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Proceeds from sales of business, affiliate and productive assets | 3,650,000 | |||
Additional expected proceeds from sales of business, affiliate and productive assets | 600,000 | |||
Number of additional expected proceed installments | 4 | |||
Gain on sale of product line | $4,100,000 |
INVENTORIES_Details
INVENTORIES (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Thousands, unless otherwise specified | ||||
Inventory Disclosure [Abstract] | ||||
Finished goods | $2,139 | $2,978 | ||
Raw materials and work in process | 1,302 | 1,567 | ||
Demonstration inventory | 192 | 211 | ||
Inventory, gross | 3,633 | 4,756 | ||
Less allowances | -628 | -799 | -616 | -511 |
Total | $3,005 | $3,957 |
INTANGIBLE_ASSETS_AND_OTHER_AS2
INTANGIBLE ASSETS AND OTHER ASSETS (Goodwill and Intangible Assets Disclosure) (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Cost | $13,934,000 | $13,793,000 | |
Accumulated Amortization | 5,970,000 | 4,598,000 | |
Net Book Value | 7,964,000 | 9,195,000 | |
Amortization expense | 1,400,000 | 1,800,000 | 1,400,000 |
Decrease in amortization expense | 400,000 | ||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||
Amortization expense, 2015 | 1,400,000 | ||
Amortization expense, 2016 | 1,300,000 | ||
Amortization expense, 2017 | 1,300,000 | ||
Amortization expense, 2018 | 1,000,000 | ||
Amortization expense, 2019 | 900,000 | ||
Acquired technology | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Cost | 9,009,000 | 9,009,000 | |
Accumulated Amortization | 3,995,000 | 3,175,000 | |
Net Book Value | 5,014,000 | 5,834,000 | |
Acquired technology | Minimum | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Estimated Useful Life | 7 years | ||
Acquired technology | Maximum | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Estimated Useful Life | 10 years | ||
Assay royalties | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Cost | 1,434,000 | 1,434,000 | |
Accumulated Amortization | 819,000 | 614,000 | |
Net Book Value | 615,000 | 820,000 | |
Estimated Useful Life | 7 years | ||
Third party payor relationships | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Cost | 367,000 | 367,000 | |
Accumulated Amortization | 98,000 | 73,000 | |
Net Book Value | 269,000 | 294,000 | |
Estimated Useful Life | 15 years | ||
Tradenames and trademarks | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Cost | 824,000 | 824,000 | |
Accumulated Amortization | 351,000 | 233,000 | |
Net Book Value | 473,000 | 591,000 | |
Estimated Useful Life | 7 years | ||
Customer relationships | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Cost | 652,000 | 652,000 | |
Accumulated Amortization | 98,000 | 54,000 | |
Net Book Value | 554,000 | 598,000 | |
Estimated Useful Life | 15 years | ||
Covenants not to compete | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Cost | 184,000 | 184,000 | |
Accumulated Amortization | 138,000 | 77,000 | |
Net Book Value | 46,000 | 107,000 | |
Estimated Useful Life | 3 years | ||
Patents | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Cost | 1,198,000 | 1,153,000 | |
Accumulated Amortization | 385,000 | 336,000 | |
Net Book Value | 813,000 | 817,000 | |
Intellectual property | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Cost | 266,000 | 170,000 | |
Accumulated Amortization | 86,000 | 36,000 | |
Net Book Value | $180,000 | $134,000 | |
Estimated Useful Life | 7 years |
DEBT_Details
DEBT (Details) (USD $) | 12 Months Ended | 0 Months Ended | |||||||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Mar. 13, 2013 | Aug. 02, 2013 | Jan. 01, 2015 | Dec. 31, 2014 | Mar. 31, 2015 | Oct. 22, 2014 | Oct. 21, 2014 | Jan. 20, 2015 | |
Debt Instrument [Line Items] | |||||||||||
Promissory note converted | $0 | $0 | $3,000,000 | ||||||||
Subsequent Event | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Initial prepayment of portion of the loan balance | 149,000 | ||||||||||
Line of Credit | Revolving Credit Facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Line of credit facility, current borrowing capacity | 3,000,000 | 4,000,000 | |||||||||
Debt instrument, interest rate, stated percentage | 4.25% | 6.25% | |||||||||
Debt instrument, interest rate, effective percentage | 6.25% | 6.25% | |||||||||
Line of credit facility, upfront fee | 20,000 | ||||||||||
Line of credit facility, commitment fee amount | 20,000 | ||||||||||
Line of credit facility, unused capacity, commitment fee percentage | 0.50% | ||||||||||
Line of Credit | Revolving Credit Facility | Wall Street Journal Prime Rate | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument, basis spread on variable rate | 1.00% | 3.00% | |||||||||
Line of Credit | Revolving Credit Facility | Third Security LLC And Affiliates | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Line of credit facility, current borrowing capacity | 4,000,000 | ||||||||||
Term Loan | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Capitalized interest costs | 300,000 | ||||||||||
Proceeds from issuance of long-term debt | 4,000,000 | ||||||||||
Long-term debt, percentage bearing variable interest, percentage rate | 9.10% | 9.10% | |||||||||
Debt instrument, upfront fee | 40,000 | ||||||||||
Debt instrument, future debt extinguishment costs | 120,000 | ||||||||||
Debt instrument, debt default, interest rate, stated percentage increase | 5.00% | ||||||||||
Term Loan | Prepayment between one and two years after the effective date | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument, prepayment penalty percent | 2.50% | ||||||||||
Term Loan | Prepayment greater than two years after the effective date | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument, prepayment penalty percent | 1.00% | ||||||||||
Term Loan | Third Security LLC And Affiliates | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument, face amount | 4,000,000 | ||||||||||
Convertible Promissory Note | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument, face amount | 750,000 | 750,000 | |||||||||
Debt instrument, interest rate, stated percentage | 6.00% | 6.00% | |||||||||
Convertible Promissory Note | Subsequent Event | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument, face amount | 925,000 | ||||||||||
Promissory note converted | $375,000 | ||||||||||
Debt conversion, shares issued | 198,708 | ||||||||||
Convertible Promissory Note | Issuance Date | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Percentage of debt that can be converted into shares of common stock | 50.00% | ||||||||||
Threshold consecutive trading days | 20 days | ||||||||||
Conversion price (in usd per share) | $2.20 | $2.20 | |||||||||
Convertible Promissory Note | February 15, 2015 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Threshold consecutive trading days | 15 days | ||||||||||
Conversion price, percentage of average closing price of common stock on the market | 85.00% |
DEBT_Summary_Details
DEBT (Summary) (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Debt Instrument [Line Items] | ||
Total debt | $7,837 | $6,560 |
Current portion of long term debt | -462 | -242 |
Long term debt, net of current maturities | 7,375 | 6,318 |
Line of Credit | Revolving Line | ||
Debt Instrument [Line Items] | ||
Total debt | 3,000 | 2,560 |
Term Loan | ||
Debt Instrument [Line Items] | ||
Total debt | 4,087 | 4,000 |
Convertible Promissory Note | ||
Debt Instrument [Line Items] | ||
Total debt | $750 | $0 |
DEBT_Maturities_Details
DEBT (Maturities) (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Debt Disclosure [Abstract] | ||
2015 | $462 | |
2016 | 7,375 | |
Total debt | $7,837 | $6,560 |
CAPITAL_LEASES_Details
CAPITAL LEASES (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Capital Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |||
2015 | $35,000 | ||
2016 | 3,000 | ||
2017 | 1,000 | ||
Total minimum lease payments | 39,000 | ||
Less: Amount representing interest | -2,000 | ||
Present value of net minimum lease payments | 37,000 | ||
Depreciation expense (less than .3 million in 2012) | 500,000 | 600,000 | 700,000 |
Equipment | |||
Capital Leased Assets [Line Items] | |||
Equipment | 1,514,000 | 1,514,000 | |
Less: Accumulated amortization | -997,000 | -721,000 | |
Total | 517,000 | 793,000 | |
Capital Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |||
Depreciation expense (less than .3 million in 2012) | $300,000 | $300,000 | $300,000 |
COMMITMENTS_AND_CONTINGENCIES_1
COMMITMENTS AND CONTINGENCIES (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |||
2015 | $1,032,000 | ||
2016 | 927,000 | ||
2017 | 763,000 | ||
2018 | 485,000 | ||
2019 | 235,000 | ||
thereafter | 628,000 | ||
Total | 4,070,000 | ||
Operating leases, rent expense | 1,000,000 | 1,000,000 | 1,000,000 |
Firm commitments to vendors | $700,000 |
INCOME_TAXES_Effective_Income_
INCOME TAXES (Effective Income Tax Reconciliation) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Income Tax Disclosure [Abstract] | |||
Benefit at federal rate | ($4,562) | ($5,454) | ($2,781) |
State income taxes—net of federal benefit | -360 | -518 | 2 |
Foreign subsidiary tax rate difference | 114 | -3 | -27 |
Tax contingency | -144 | 23 | 22 |
Expiring net operating loss carryforwards | 0 | 0 | 1,472 |
Earnings repatriation | 0 | 0 | 582 |
Miscellaneous permanent differences | 227 | 155 | 284 |
Liability warrants | -154 | -102 | -748 |
Tax credits | 0 | 0 | 215 |
State, net operating loss expiration/true-up | -327 | 1,179 | 0 |
Other—net | 44 | -80 | 15 |
Valuation allowance | 5,686 | 4,746 | 1,110 |
Total income tax (benefit) expense | $524 | ($54) | $146 |
INCOME_TAXES_Components_of_Inc
INCOME TAXES (Components of Income Tax Expense (Benefit) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Federal: | |||
Current | $0 | $0 | $0 |
Deferred | 608 | 0 | 0 |
Total Federal | 608 | 0 | 0 |
State: | |||
Current | 0 | 0 | 3 |
Deferred | 23 | 0 | 0 |
Total State | 23 | 0 | 3 |
Foreign: | |||
Current | -156 | 20 | 46 |
Deferred | 49 | -74 | 97 |
Total Foreign | -107 | -54 | 143 |
Total income tax (benefit) expense | $524 | ($54) | $146 |
INCOME_TAXES_Deferred_Tax_Asse
INCOME TAXES (Deferred Tax Assets and Liabilities) (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Deferred Tax Asset: | ||
Net operating loss carryforward | $46,231 | $42,950 |
Research and development credit carryforwards | 918 | 951 |
Deferred revenue | 207 | 174 |
Inventory | 200 | 275 |
Allowance for bad debt | 2,738 | 1,279 |
Other | 1,545 | 718 |
Deferred Tax Assets, Gross | 51,839 | 46,347 |
Less valuation allowance | -51,751 | -46,088 |
Deferred Tax Asset | 88 | 259 |
Deferred Tax Liability: | ||
Goodwill | 631 | 0 |
Foreign earnings | 0 | 25 |
Property and equipment | 88 | 186 |
Deferred Tax Liability | 719 | 211 |
Net Deferred Asset (Liability) | ($631) | $48 |
INCOME_TAXES_Summary_of_Operat
INCOME TAXES (Summary of Operating Loss Carryforwards) (Details) (USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Income Tax Disclosure [Abstract] | |
2018 | $1,838 |
2019 | 8,181 |
2020 | 9,662 |
2021 | 8,228 |
2022 | 16,862 |
2023 | 16,173 |
2024 | 17,390 |
2025 | 8,153 |
2026 | 6,792 |
2027 | 3,238 |
2028 | 1,272 |
2029 | 591 |
2031 | 2,784 |
2032 | 8,358 |
2033 | 11,748 |
2034 | 7,662 |
Operating loss carryforwards | $128,932 |
INCOME_TAXES_Details
INCOME TAXES (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Income Taxes [Line Items] | ||
Operating loss carryforwards | $128,932,000 | |
Additional uncertain positions, less than | 100,000 | 100,000 |
Reduction in uncertain tax positions relating to lapse of statute of limitations | 200,000 | 0 |
Other Long-term Liabilities | ||
Income Taxes [Line Items] | ||
Liability for uncertain tax positions, noncurrent | 100,000 | 300,000 |
Research and Development Credit Carryforward | ||
Income Taxes [Line Items] | ||
Tax credit carryforward | 900,000 | |
Federal | Annovis, Inc. | ||
Income Taxes [Line Items] | ||
Operating loss carryforwards | 1,200,000 | |
State | ||
Income Taxes [Line Items] | ||
Operating loss carryforwards | 46,800,000 | |
Foreign | ||
Income Taxes [Line Items] | ||
Operating loss carryforwards | $900,000 |
EMPLOYEE_BENEFIT_PLAN_Details
EMPLOYEE BENEFIT PLAN (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Compensation and Retirement Disclosure [Abstract] | |||
Defined contribution plan, employer matching contribution, percent, first 3% of contributions | 100.00% | ||
Defined contribution plan, employer matching contribution, percent of employee's gross pay, first contributions | 3.00% | ||
Defined contribution plan, employer matching contribution, percent, next 2% of contributions | 50.00% | ||
Defined contribution plan, employer matching contribution, percent of employee's gross pay, next contributions | 2.00% | ||
Defined contribution plan, cost recognized | $0.40 | $0.40 | $0.30 |
STOCKHOLDERS_EQUITY_Common_Sto
STOCKHOLDERS' EQUITY (Common Stock) (Details) (USD $) | 0 Months Ended | 1 Months Ended | 12 Months Ended | 0 Months Ended | ||||||||||||
Jan. 24, 2013 | Feb. 02, 2012 | Dec. 29, 2010 | Dec. 31, 2011 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Mar. 13, 2013 | Oct. 22, 2014 | Dec. 31, 2014 | Oct. 21, 2014 | Jan. 31, 2013 | Mar. 05, 2014 | ||||
Class of Stock [Line Items] | ||||||||||||||||
Common stock, shares authorized | 150,000,000 | [1] | 100,000,000 | [1] | 150,000,000 | [1] | ||||||||||
Proceeds from issuance of common stock and convertible notes | $22,000,000 | $6,000,000 | $3,000,000 | |||||||||||||
Common stock, shares issued | 1,583,333 | 8,084,471 | [1] | 7,353,695 | [1] | 8,084,471 | [1] | |||||||||
Common stock, sale price per share (in usd per share) | $12 | |||||||||||||||
Common stock warrants, term | 5 years | |||||||||||||||
Common stock warrant, common stock called (in shares) | 691,656 | 948,333 | 1,387,685 | 1,309,785 | 1,387,685 | 1,212,665 | 1,097,600 | |||||||||
Common stock warrant, exercise price (in usd per share) | 15 | 10.25 | 10.86 | 10.25 | 11.73 | 12.96 | ||||||||||
Stock issuance costs | 1,330,000 | |||||||||||||||
Payments of stock issuance costs, percentage of gross offering proceeds | 7.00% | |||||||||||||||
Payments of stock issuance costs, warrant right to purchase common stock shares | 31,666 | |||||||||||||||
Payments of stock issuance costs, warrant right to purchase common stock shares, percentage of shares in offering | 2.00% | |||||||||||||||
Stock issuance costs, reimbursable expenses | 125,000 | |||||||||||||||
Payments of stock issuance costs, reduction to equity | 1,500,000 | |||||||||||||||
Private placement, net, shares | 1,383,333 | |||||||||||||||
Share price (in usd per share) | $6 | $2.01 | $2.01 | |||||||||||||
Private placement, net | 8,300,000 | 2,361,000 | 7,570,000 | 17,373,000 | ||||||||||||
Class of warrant or right, number of securities called by warrants or rights, price per share (in usd per share) | $9 | |||||||||||||||
Third Security LLC And Affiliates | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Common stock warrant, common stock called (in shares) | 1,097,600 | 1,212,665 | ||||||||||||||
Common stock warrant, exercise price (in usd per share) | 12.96 | 11.73 | ||||||||||||||
Convertible notes, common stock callable (in shares) | 250,000 | |||||||||||||||
Convertible notes, warrants callable (in shares) | 125,000 | |||||||||||||||
Affiliates of Third Security, LLC; January 2018 | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Common stock warrant, common stock called (in shares) | 250,000 | |||||||||||||||
Common stock warrant, exercise price (in usd per share) | 9 | |||||||||||||||
Private placement, net, shares | 500,000 | |||||||||||||||
Private Placement | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Common stock warrant, common stock called (in shares) | 365,388 | |||||||||||||||
Common stock warrant, exercise price (in usd per share) | 4 | |||||||||||||||
Private placement, net, shares | 730,776 | |||||||||||||||
Share price (in usd per share) | $3.25 | |||||||||||||||
Private placement, net | 2,375,000 | |||||||||||||||
Private Placement | Advisor | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Common stock warrant, common stock called (in shares) | 9,230 | |||||||||||||||
Maximum | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Common stock warrant, common stock called (in shares) | 823,333 | |||||||||||||||
Convertible Promissory Note | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Debt instrument, face amount | $750,000 | $750,000 | ||||||||||||||
Debt instrument, interest rate, stated percentage | 6.00% | 6.00% | ||||||||||||||
Convertible Promissory Note | Issuance Date | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Percentage of debt that can be converted into shares of common stock | 50.00% | |||||||||||||||
Threshold consecutive trading days | 20 days | |||||||||||||||
Conversion price (in usd per share) | $2.20 | $2.20 | ||||||||||||||
Convertible Promissory Note | February 15, 2015 | ||||||||||||||||
Class of Stock [Line Items] | ||||||||||||||||
Threshold consecutive trading days | 15 days | |||||||||||||||
Conversion price, percentage of average closing price of common stock on the market | 85.00% | |||||||||||||||
[1] | The common stock shares and additional paid-in capital for all periods presented reflect the one-for-twelve reverse stock split which took effect on January 27, 2014. |
STOCKHOLDERS_EQUITY_Common_Sto1
STOCKHOLDERS' EQUITY (Common Stock Warrants) (Details) | 1 Months Ended | 12 Months Ended | |||||||
Feb. 28, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Oct. 22, 2014 | Oct. 21, 2014 | Jan. 31, 2013 | Feb. 02, 2012 | Dec. 31, 2010 | Jan. 24, 2013 | |
Class of Stock [Line Items] | |||||||||
Common stock warrants issued (in shares) | 1,400,000 | 664,703 | 840,939 | ||||||
Underlying Shares | 2,884,986 | ||||||||
Exercise Price (in usd per share) | 10.25 | 10.86 | 11.73 | 12.96 | 15 | ||||
Affiliates of Third Security, LLC; December 2015 | |||||||||
Class of Stock [Line Items] | |||||||||
Underlying Shares | 431,027 | ||||||||
Exercise Price (in usd per share) | 6.96 | ||||||||
Various Institutional Holders; February 2017 | |||||||||
Class of Stock [Line Items] | |||||||||
Underlying Shares | 1,204,763 | ||||||||
Exercise Price (in usd per share) | 10.25 | ||||||||
Affiliates of Third Security, LLC; February 2017 | |||||||||
Class of Stock [Line Items] | |||||||||
Underlying Shares | 182,922 | ||||||||
Exercise Price (in usd per share) | 10.25 | ||||||||
Various Institutional Holders; January 2018 | |||||||||
Class of Stock [Line Items] | |||||||||
Underlying Shares | 441,656 | ||||||||
Exercise Price (in usd per share) | 9 | ||||||||
Affiliates of Third Security, LLC; January 2018 | |||||||||
Class of Stock [Line Items] | |||||||||
Underlying Shares | 250,000 | ||||||||
Exercise Price (in usd per share) | 9 | ||||||||
Various Institutional Holders; April 2020 | |||||||||
Class of Stock [Line Items] | |||||||||
Underlying Shares | 374,618 | ||||||||
Exercise Price (in usd per share) | 4 | ||||||||
Private Placement, Repricing Requirements | |||||||||
Class of Stock [Line Items] | |||||||||
Common stock warrants issued (in shares) | 290,085 |
STOCKHOLDERS_EQUITY_Preferred_
STOCKHOLDERS' EQUITY (Preferred Stock Series A) (Details) (USD $) | 0 Months Ended | 1 Months Ended | 12 Months Ended | |||||||||||
Jan. 24, 2013 | Feb. 02, 2012 | Dec. 29, 2010 | Dec. 31, 2011 | Nov. 30, 2011 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Oct. 22, 2014 | Oct. 21, 2014 | Jan. 31, 2013 | ||||
Class of Stock [Line Items] | ||||||||||||||
Preferred stock, shares authorized | 15,000,000 | 15,000,000 | ||||||||||||
Private placement, net, shares | 1,383,333 | |||||||||||||
Common stock warrant, exercise price (in usd per share) | 15 | 10.25 | 10.86 | 11.73 | 12.96 | |||||||||
Proceeds from issuance of common stock and convertible notes | $22,000,000 | $6,000,000 | $3,000,000 | |||||||||||
Stock issuance costs | 1,330,000 | |||||||||||||
Minimum | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Number of directors | 2 | |||||||||||||
Common Stock | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Private placement, net, shares | 730,776 | [1] | 1,383,217 | [1] | 1,833,333 | [1] | ||||||||
Preferred stock revaluation | 300,000 | |||||||||||||
Series A Preferred Stock | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Common stock warrant, exercise price (in usd per share) | 2.32 | |||||||||||||
Convertible notes, common stock callable (in shares) | 1,293,102 | |||||||||||||
Stock issuance costs | $200,000 | |||||||||||||
Series A Preferred Stock | Preferred Stock | ||||||||||||||
Class of Stock [Line Items] | ||||||||||||||
Preferred stock, shares authorized | 3,879,307 | |||||||||||||
Private placement, net, shares | 2,586,205 | |||||||||||||
Common stock warrant, exercise price (in usd per share) | 2.32 | |||||||||||||
Preferred stock, dividend rate, percentage | 10.00% | |||||||||||||
Preferred stock, dividend rate, compound percentage maximum | 50.00% | |||||||||||||
[1] | The common stock shares and additional paid-in capital for all periods presented reflect the one-for-twelve reverse stock split which took effect on January 27, 2014. |
STOCKHOLDERS_EQUITY_Preferred_1
STOCKHOLDERS' EQUITY (Preferred Stock Series B) (Details) (USD $) | 0 Months Ended | 12 Months Ended | 0 Months Ended | ||||||
In Thousands, except Share data, unless otherwise specified | Jan. 24, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Mar. 05, 2014 | Oct. 22, 2014 | Oct. 21, 2014 | Jan. 31, 2013 | Feb. 02, 2012 |
Class of Stock [Line Items] | |||||||||
Private placement, net, shares | 1,383,333 | ||||||||
Preferred stock, par value (in usd per share) | $0.01 | $0.01 | |||||||
Share price (in usd per share) | $6 | $2.01 | |||||||
Private placement, net | $8,300 | $2,361 | $7,570 | $17,373 | |||||
Common stock warrant, exercise price (in usd per share) | 10.25 | 10.86 | 11.73 | 12.96 | 15 | ||||
Common stock warrant, common stock called (in shares) | 691,656 | 1,387,685 | 1,309,785 | 1,212,665 | 1,097,600 | 948,333 | |||
Dividends accrued on preferred stock | 1,144 | 726 | 660 | ||||||
Series B Preferred Stock | |||||||||
Class of Stock [Line Items] | |||||||||
Private placement, net | 6,905 | ||||||||
Preferred Stock | Series B Preferred Stock | |||||||||
Class of Stock [Line Items] | |||||||||
Private placement, net | 14 | ||||||||
Third Security LLC And Affiliates | |||||||||
Class of Stock [Line Items] | |||||||||
Common stock warrant, exercise price (in usd per share) | 11.73 | 12.96 | |||||||
Common stock warrant, common stock called (in shares) | 1,212,665 | 1,097,600 | |||||||
Third Security LLC And Affiliates | Preferred Stock | Series B Preferred Stock | |||||||||
Class of Stock [Line Items] | |||||||||
Private placement, net, shares | 1,443,297 | ||||||||
Preferred stock, par value (in usd per share) | $0.01 | ||||||||
Share price (in usd per share) | $4.85 | ||||||||
Private placement, net | $7,000 | ||||||||
Conversion ratio | 1 |
EQUITY_INCENTIVE_PLAN_Details
EQUITY INCENTIVE PLAN (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation, unrecognized compensation expense related to unvested stock options | $700,000 | ||
Share-based compensation, weighted average period that unrecognized compensation expense related to unvested stock options is recognized | 1 year 4 months 24 days | ||
Outstanding options (in shares) | 650,952 | ||
Selling, general and administrative expenses | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense | 900,000 | 400,000 | 700,000 |
Stock Appreciation Rights (SARs) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock options, fair value assumptions, dividend yield | 0.00% | ||
Outstanding SARs (in shares) | 98,333 | 138,333 | |
Number of shares exercisable | 35,208 | ||
Exercises in period (in shares) | 0 | 0 | 0 |
Weighted average exercise price of SARs (in usd per share) | $4.14 | $4.32 | |
Intrinsic value | 0 | ||
Weighted average remaining contractual terms | 8 years 11 months | ||
Stock Appreciation Rights (SARs) | Accrued expenses | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense | 100,000 | ||
Stock Appreciation Rights (SARs) | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock options, fair value assumptions, risk free interest rate | 1.50% | ||
Stock options, fair value assumptions, expected life | 4 years | ||
Stock options, fair value assumptions, historical volatility rate | 82.00% | ||
Stock Appreciation Rights (SARs) | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock options, fair value assumptions, risk free interest rate | 1.74% | ||
Stock options, fair value assumptions, expected life | 5 years | ||
Stock options, fair value assumptions, historical volatility rate | 105.00% | ||
Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock options, fair value assumptions, dividend yield | 0.00% | 0.00% | |
Stock options, fair value assumptions, expected life | 8 years | ||
Stock options, grants in period, weighted average grant date fair value | $3.51 | $3.72 | $9.72 |
Outstanding options (in shares) | 699,899 | 565,028 | |
Options exercisable (in shares) | 289,617 | ||
Weighted average exercise price (in usd per share) | $6.58 | $7.19 | |
Options exercisable, weighted average exercise price (in usd per share) | $8.87 | ||
Stock options, outstanding, aggregate intrinsic value | 0 | ||
Remaining weighted average contractual life | 7 years 8 months 18 days | ||
Stock options, exercisable, aggregate intrinsic value | 0 | ||
Stock options, remaining weighted-average contractual life | 5 years 11 months | ||
Stock options, exercised (in shares) | 0 | 0 | 1,667 |
Stock options, exercises in period, aggregate intrinsic value (less than) | 10,000 | ||
Stock options vested in current year, fair value | $600,000 | $600,000 | $600,000 |
Stock Options | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock options, fair value assumptions, risk free interest rate | 0.73% | 0.62% | |
Stock options, fair value assumptions, expected life | 4 years | ||
Stock options, fair value assumptions, historical volatility rate | 105.00% | 101.00% | |
Stock Options | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock options, fair value assumptions, risk free interest rate | 1.75% | 1.03% | |
Stock options, fair value assumptions, expected life | 5 years | ||
Stock options, fair value assumptions, historical volatility rate | 106.00% | 114.00% | |
Equity incentive plan 2006 | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation, number of shares authorized | 1,666,666 | ||
Share-based compensation, award expiration period | 10 years | ||
Equity incentive plan 2006 | Restricted Stock, Restricted Stock Units, Performance Units, Performance Shares And Other Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation, number of shares authorized | 1,250,000 |
EQUITY_INCENTIVE_PLAN_Stock_Op
EQUITY INCENTIVE PLAN (Stock Option Activity) (Details) (USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Number of Options | |
Balance at end of period (in shares) | 650,952 |
Stock Options | |
Number of Options | |
Balance at beginning of period (in shares) | 565,028 |
Granted (in shares) | 264,529 |
Forfeited (in shares) | -115,222 |
Expired (in shares) | -14,436 |
Balance at end of period (in shares) | 699,899 |
Exercisable at end of period (in shares) | 289,617 |
Weighted Average Exercise Price | |
Balance at beginning of period (in usd per share) | $7.19 |
Granted (in usd per share) | $5.10 |
Forfeited (in usd per share) | $5.53 |
Expired (in usd per share) | $12.03 |
Balance at end of period (in usd per share) | $6.58 |
Exercisable at end of period (in usd per share) | $8.87 |
EQUITY_INCENTIVE_PLAN_Stock_Ap
EQUITY INCENTIVE PLAN (Stock Appreciation Rights) (Details) (Stock Appreciation Rights (SARs), USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Stock Appreciation Rights (SARs) | |
Number of SARs | |
Balance at beginning of period (in shares) | 138,333 |
Granted (in shares) | 15,000 |
Forfeited (in shares) | -34,788 |
Expired (in shares) | -20,212 |
Balance at end of period (in shares) | 98,333 |
Exercisable at end of period (in shares) | 35,208 |
Weighted Average Exercise Price | |
Balance at beginning of period (in usd per share) | $4.32 |
Granted (in usd per share) | $3.15 |
Forfeited (in usd per share) | $4.32 |
Expired (in usd per share) | $4.32 |
Balance at end of period (in usd per share) | $4.14 |
Exercisable at end of period (in usd per share) | $4.32 |
FAIR_VALUE_Details
FAIR VALUE (Details) (USD $) | 1 Months Ended | 12 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Feb. 28, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Jan. 24, 2013 |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Common stock warrants issued (in shares) | 1,400,000 | 664,703 | 840,939 | |
Share price (in usd per share) | $2.01 | $6 | ||
Stock options, fair value assumptions, expected life | 2 years 1 month 10 days | |||
Volatility | 70.00% | |||
Risk-free interest rate | 0.67% | |||
Term of U.S. treasury bond | 2 years 0 months | |||
Percentage of simulated equity values below the down-round financing cut-off point | 50.00% | |||
Liability | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning balance | $600 | |||
Total gains or losses | ||||
Recognized in earnings | -455 | |||
Ending balance | $145 |
SELECTED_QUARTERLY_FINANCIAL_D2
SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||||
Net Sales | $7,696 | $6,372 | $6,764 | $6,251 | $6,218 | $6,646 | $7,306 | $7,374 | $27,083 | $27,544 | $31,480 | |||
Gross Profit | 2,619 | 2,215 | 2,393 | 2,494 | 2,076 | 2,450 | 2,973 | 3,255 | 9,721 | 10,754 | 13,132 | |||
Net Loss | ($5,793) | ($80) | ($3,893) | ($4,176) | ($3,982) | ($5,552) | ($2,867) | ($3,586) | ($13,942) | ($15,987) | ($8,327) | |||
Basic and diluted loss per common share (in usd per share) | ($0.77) | ($0.05) | ($0.57) | ($0.60) | ($0.57) | ($0.78) | ($0.41) | ($0.54) | ($2.01) | [1] | ($2.30) | [1] | ($1.55) | [1] |
[1] | Net loss per share and the number of shares used in the per share calculations for all periods presented reflect the one-for-twelve reverse stock split which took effect on January 27, 2014. |
OPERATING_SEGMENT_AND_GEOGRAPH2
OPERATING SEGMENT AND GEOGRAPHIC INFORMATION (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
operating_segments | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Number of operating segments (in operating segments) | 2 | ||||||||||
Net Sales | $7,696 | $6,372 | $6,764 | $6,251 | $6,218 | $6,646 | $7,306 | $7,374 | $27,083 | $27,544 | $31,480 |
Gross Profit | 2,619 | 2,215 | 2,393 | 2,494 | 2,076 | 2,450 | 2,973 | 3,255 | 9,721 | 10,754 | 13,132 |
Net Loss before Taxes | -13,418 | -16,041 | -8,181 | ||||||||
Income Tax Expense | 524 | -54 | 146 | ||||||||
NET LOSS | -5,793 | -80 | -3,893 | -4,176 | -3,982 | -5,552 | -2,867 | -3,586 | -13,942 | -15,987 | -8,327 |
Depreciation/Amortization | 2,248 | 2,748 | 2,278 | ||||||||
Interest Expense | 665 | 642 | 888 | ||||||||
Total Assets | 30,006 | 30,278 | 30,006 | 30,278 | 38,791 | ||||||
Goodwill | 6,918 | 6,918 | 6,918 | 6,918 | 6,918 | ||||||
Maximum | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Percent of revenue from countries not separately disclosed | 5.00% | ||||||||||
United states | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net Sales | 21,052 | 20,119 | 22,727 | ||||||||
United states | Minimum | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Long-lived asset percentage held in a specific location | 99.00% | 99.00% | |||||||||
Italy | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net Sales | 1,258 | 1,530 | 2,524 | ||||||||
United kingdom | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net Sales | 881 | 748 | 1,703 | ||||||||
All Other Countries | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net Sales | 3,892 | 5,147 | 4,526 | ||||||||
Laboratory Services | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net Sales | 16,520 | 15,391 | 19,329 | ||||||||
Gross Profit | 6,840 | 6,820 | 9,316 | ||||||||
Net Loss before Taxes | -14,691 | -12,486 | -6,874 | ||||||||
Income Tax Expense | 631 | 0 | 0 | ||||||||
NET LOSS | -15,322 | -12,486 | -6,874 | ||||||||
Depreciation/Amortization | 2,088 | 2,467 | 1,960 | ||||||||
Interest Expense | 406 | 398 | 851 | ||||||||
Total Assets | 23,116 | 21,711 | 23,116 | 21,711 | 29,196 | ||||||
Goodwill | 6,918 | 6,918 | 6,918 | 6,918 | 6,918 | ||||||
Genetic Assays and Platforms | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net Sales | 10,563 | 12,153 | 12,151 | ||||||||
Gross Profit | 2,881 | 3,934 | 3,816 | ||||||||
Net Loss before Taxes | 1,273 | -3,555 | -1,307 | ||||||||
Income Tax Expense | -107 | -54 | 146 | ||||||||
NET LOSS | 1,380 | -3,501 | -1,453 | ||||||||
Depreciation/Amortization | 160 | 281 | 318 | ||||||||
Interest Expense | 259 | 244 | 37 | ||||||||
Total Assets | 6,890 | 8,567 | 6,890 | 8,567 | 9,595 | ||||||
Goodwill | $0 | $0 | $0 | $0 | $0 |
ACQUISITIONS_Details
ACQUISITIONS (Details) (USD $) | 12 Months Ended | 0 Months Ended | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2014 | Sep. 21, 2012 | Dec. 31, 2012 | Dec. 31, 2013 |
Customer relationships | ||||
Business Acquisition [Line Items] | ||||
Estimated Useful Life | 15 years | |||
Assay royalties | ||||
Business Acquisition [Line Items] | ||||
Estimated Useful Life | 7 years | |||
Tradenames and trademarks | ||||
Business Acquisition [Line Items] | ||||
Estimated Useful Life | 7 years | |||
ScoliScore Assay | ||||
Business Acquisition [Line Items] | ||||
Acquisitions of intangibles | $3.40 | |||
Finite-lived intangible assets acquired | 3.9 | |||
Goodwill, acquired during period | 0.5 | |||
ScoliScore Assay | Acquired technology | ||||
Business Acquisition [Line Items] | ||||
Estimated Useful Life | 10 years | |||
ScoliScore Assay | Customer relationships | ||||
Business Acquisition [Line Items] | ||||
Estimated Useful Life | 15 years | |||
ScoliScore Assay | Assay royalties | ||||
Business Acquisition [Line Items] | ||||
Estimated Useful Life | 7 years | |||
ScoliScore Assay | Tradenames and trademarks | ||||
Business Acquisition [Line Items] | ||||
Estimated Useful Life | 7 years | |||
ScoliScore Assay | Axial | ||||
Business Acquisition [Line Items] | ||||
Acquisitions of intangibles | 0.2 | |||
ScoliScore Assay | Axial | Accrued expenses | ||||
Business Acquisition [Line Items] | ||||
Future payments to acquire intangible assets | 0.8 | |||
ScoliScore Assay | Certain of Axial's Creditors | ||||
Business Acquisition [Line Items] | ||||
Fair value of consideration transferred | $4.40 |
SUBSEQUENT_EVENTS_Details
SUBSEQUENT EVENTS (Details) (USD $) | 0 Months Ended | |||||||||||
Jan. 24, 2013 | Feb. 27, 2015 | Dec. 31, 2014 | Oct. 22, 2014 | Oct. 21, 2014 | Dec. 31, 2013 | Jan. 31, 2013 | Feb. 02, 2012 | Mar. 31, 2015 | Jan. 15, 2015 | Jan. 14, 2015 | Jan. 20, 2015 | |
investor | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Common stock warrant, exercise price (in usd per share) | 10.25 | 10.86 | 11.73 | 12.96 | 15 | |||||||
Common stock warrant, common stock called (in shares) | 691,656 | 1,387,685 | 1,309,785 | 1,212,665 | 1,097,600 | 948,333 | ||||||
Stock issued during period, shares | 1,383,333 | |||||||||||
Preferred stock, par value (in usd per share) | $0.01 | $0.01 | ||||||||||
Subsequent Event | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Number of additional accredited investors | 7 | |||||||||||
Common stock warrant, exercise price (in usd per share) | 7.56 | 9.59 | 10.25 | |||||||||
Common stock warrant, common stock called (in shares) | 1,881,396 | 1,483,161 | 1,387,685 | |||||||||
Initial prepayment of portion of the loan balance | $149,000 | |||||||||||
Subsequent Event | Craig-Hallum Capital Group LLC | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Common stock warrant, exercise price (in usd per share) | 2.24 | |||||||||||
Common stock warrant, common stock called (in shares) | 714,780 | |||||||||||
Stock issued during period, shares | 3,573,899 | |||||||||||
Number of shares that can be purchased for each warrant | 0.2 | |||||||||||
Purchase price to the public (in usd per unit) | 1.95 | |||||||||||
Purchase price of stock and warrants (in usd per unit) | 1.8135 | |||||||||||
Net proceeds from the offering | 6,200,000 | |||||||||||
Expiration period of the warrants | 5 years | |||||||||||
Convertible Promissory Note | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Debt instrument, face amount | 750,000 | |||||||||||
Debt instrument, interest rate, stated percentage | 6.00% | |||||||||||
Convertible Promissory Note | Issuance Date | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Percentage of debt that can be converted into shares of common stock | 50.00% | |||||||||||
Threshold consecutive trading days | 20 days | |||||||||||
Conversion price (in usd per share) | $2.20 | |||||||||||
Convertible Promissory Note | February 15, 2015 | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Threshold consecutive trading days | 15 days | |||||||||||
Conversion price, percentage of average closing price of common stock on the market | 85.00% | |||||||||||
Convertible Promissory Note | Subsequent Event | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Debt instrument, face amount | $925,000 |