DOCUMENT AND ENTITY INFORMATION
DOCUMENT AND ENTITY INFORMATION - shares | 9 Months Ended | |
Sep. 30, 2017 | Nov. 09, 2017 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | PRECIPIO, INC. | |
Entity Central Index Key | 1,043,961 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 10,028,763 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 381 | $ 51 |
Accounts receivable, net | 505 | 388 |
Inventories | 99 | 100 |
Other current assets | 127 | 13 |
Total current assets | 1,112 | 552 |
PROPERTY AND EQUIPMENT, NET | 255 | 280 |
OTHER ASSETS: | ||
Goodwill | 12,817 | |
Intangibles, net | 20,779 | 0 |
Other assets | 14 | 10 |
Assets | 34,977 | 842 |
CURRENT LIABILITIES: | ||
Current maturities of long-term debt | 42 | 395 |
Convertible bridge notes, less debt discounts and debt issuance costs | 0 | 695 |
Accounts payable | 10,034 | 1,084 |
Current maturities of capital leases | 49 | 46 |
Accrued expenses | 1,872 | 700 |
Deferred revenue | 210 | 92 |
Other current liabilities | 1,528 | 0 |
Total current liabilities | 13,735 | 3,012 |
LONG TERM LIABILITIES: | ||
Long-term debt, less current maturities and discounts | 0 | 4,127 |
Common stock warrant liability | 618 | 0 |
Capital leases, less current maturities | 126 | 163 |
Other long-term liabilities | 92 | 0 |
Total liabilities | 14,571 | 7,302 |
STOCKHOLDERS’ EQUITY (DEFICIT): | ||
Preferred stock - $0.01 par value, 15,000,000 and 1,294,434 shares authorized at September 30, 2017 and December 31, 2016, respectively, 3,641 and 780,105 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively | 0 | 8 |
Common stock, $0.01 par value, 150,000,000 and 1,806,850 shares authorized at September 30, 2017 and December 31, 2016, respectively, 9,446,878 and 449,175 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively | 94 | 4 |
Additional paid-in capital | 41,879 | 4,376 |
Accumulated deficit | (21,567) | (10,848) |
Total stockholders’ equity (deficit) | 20,406 | (6,460) |
Liabilities and stockholders' equity | $ 34,977 | $ 842 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (PARENTHETICALS) - $ / shares | Sep. 30, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 15,000,000 | 1,294,434 |
Preferred stock, shares issued (in shares) | 3,641 | 780,105 |
Preferred stock, shares outstanding (in shares) | 3,641 | 780,105 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 150,000,000 | 1,806,850 |
Common stock, shares issued (in shares) | 9,446,878 | 449,175 |
Common stock, shares outstanding (in shares) | 9,446,878 | 449,175 |
UNAUDITED CONDENSED CONSOLIDATE
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Patient service revenue, net | $ 327,000 | $ 445,000 | $ 946,000 | $ 1,716,000 |
less provision for bad debts | (57,000) | (80,000) | (168,000) | (309,000) |
Net sales | 270,000 | 365,000 | 778,000 | 1,407,000 |
COST OF DIAGNOSTIC SERVICES | 347,000 | 231,000 | 813,000 | 710,000 |
Gross profit (loss) | (77,000) | 134,000 | (35,000) | 697,000 |
OPERATING EXPENSES: | ||||
Operating expenses | 2,541,000 | 497,000 | 3,981,000 | 1,573,000 |
Impairment of goodwill | 1,015,000 | 0 | 1,015,000 | 0 |
TOTAL OPERATING EXPENSES | 3,556,000 | 497,000 | 4,996,000 | 1,573,000 |
OPERATING LOSS | (3,633,000) | (363,000) | (5,031,000) | (876,000) |
OTHER INCOME (EXPENSE): | ||||
Interest expense, net | (1,883,000) | (136,000) | (2,265,000) | (378,000) |
Warrant revaluation | 0 | 0 | (3,000) | 0 |
Loss on extinguishment of debt and induced conversion of convertible bridge notes | (1,338,000) | 0 | (1,391,000) | 0 |
Gain on settlement of liability | 647,000 | 0 | 647,000 | 0 |
Merger advisory fees | (73,000) | 0 | (2,676,000) | 0 |
Other, net | 0 | 0 | 0 | 3,000 |
Other Income (Expense) | (2,647,000) | (136,000) | (5,688,000) | (375,000) |
LOSS BEFORE INCOME TAXES | (6,280,000) | (499,000) | (10,719,000) | (1,251,000) |
INCOME TAX EXPENSE | 0 | 0 | 0 | 0 |
NET LOSS | (6,280,000) | (499,000) | (10,719,000) | (1,251,000) |
TOTAL DIVIDENDS | (3,848,000) | 0 | (9,096,000) | (1,855,000) |
NET LOSS AVAILABLE TO COMMON STOCKHOLDERS | $ (10,128,000) | $ (499,000) | $ (19,815,000) | $ (3,106,000) |
BASIC AND DILUTED LOSS PER COMMON SHARE (IN DOLLARS PER SHARE) | $ (1.36) | $ (1.15) | $ (6.96) | $ (7.23) |
BASIC AND DILUTED WEIGHTED-AVERAGE SHARES OF COMMON STOCK OUTSTANDING (IN SHARES) | 7,430,741 | 435,060 | 2,846,221 | 429,851 |
Preferred stock - series A senior | ||||
OTHER INCOME (EXPENSE): | ||||
TOTAL DIVIDENDS | $ (3,764,000) | $ 0 | $ (9,012,000) | $ (1,422,000) |
Preferred stock | ||||
OTHER INCOME (EXPENSE): | ||||
TOTAL DIVIDENDS | $ (84,000) | $ 0 | $ (84,000) | $ (433,000) |
UNAUDITED CONDENSED CONSOLIDAT5
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) - 9 months ended Sep. 30, 2017 - USD ($) $ in Thousands | Total | Common Stock | Preferred stock | 2017 Bridge Notes | Senior and Junior Notes | Preferred stock | Preferred stockPreferred stock | Preferred stockSenior and Junior Notes | Common Stock | Common StockCommon Stock | Common Stock2017 Bridge Notes | Common StockSenior and Junior Notes | Additional Paid-in Capital | Additional Paid-in CapitalCommon Stock | Additional Paid-in CapitalPreferred stock | Additional Paid-in Capital2017 Bridge Notes | Additional Paid-in CapitalSenior and Junior Notes | Accumulated Deficit |
Balance at beginning of period at Dec. 31, 2016 | $ (6,460) | $ 8 | $ 4 | $ 4,376 | $ (10,848) | |||||||||||||
Balance at beginning of period (in shares) at Dec. 31, 2016 | 780,105 | 449,175 | ||||||||||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||||||||
Net loss | (10,719) | (10,719) | ||||||||||||||||
Conversion of warrants into stock | $ 25 | $ 20 | $ (20) | $ 25 | ||||||||||||||
Conversion of warrants into stock (in shares) | 8,542 | 1,958,166 | ||||||||||||||||
Shares converted, value | 0 | $ (25) | $ 34 | (9) | ||||||||||||||
Conversion of preferred stock into common stock (in shares) | (943,600) | (2,526,425) | 3,467,666 | |||||||||||||||
Conversion of debt into stock | $ 2,738 | $ 4,771 | $ 8 | $ 6 | $ 14 | $ 2,732 | $ 4,749 | |||||||||||
Conversion of debt into stock (in shares) | 802,920 | 515,638 | 1,414,700 | |||||||||||||||
Issuance of common stock for consulting services in connection with the merger | 2,189 | $ 3 | 2,186 | |||||||||||||||
Issuance of common stock for consulting services in connection with the merger (in shares) | 321,821 | |||||||||||||||||
Shares issued in connection with business combination | 20,098 | $ 8 | $ 12 | 20,078 | ||||||||||||||
Shares issued in connection with business combination (in shares) | 802,925 | 1,255,119 | ||||||||||||||||
Issuance of preferred stock | 5,380 | $ 1 | 5,379 | |||||||||||||||
Issuance of preferred stock (in shares) | 135,574 | |||||||||||||||||
Issuance of warrants in conjunction with issuance of side agreement | 487 | 487 | ||||||||||||||||
Beneficial conversion feature on issuance of bridge notes | 1,856 | 1,856 | ||||||||||||||||
Non-cash stock-based compensation and vesting of restricted units | 41 | $ 1 | 40 | |||||||||||||||
Non-cash stock-based compensation and vesting of restricted units (in shares) | 64,593 | |||||||||||||||||
Balance at end of period at Sep. 30, 2017 | $ 20,406 | $ 0 | $ 94 | $ 41,879 | $ (21,567) | |||||||||||||
Balance at end of period (in shares) at Sep. 30, 2017 | 3,641 | 9,446,878 |
UNAUDITED CONDENSED CONSOLIDAT6
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
CASH FLOWS USED IN OPERATING ACTIVITIES: | ||
Net loss | $ (10,719) | $ (1,251) |
Adjustments to reconcile net loss to net cash flows used in operating activities: | ||
Depreciation and amortization | 395 | 99 |
Amortization of deferred financing costs and debt discount | 1,898 | 31 |
Loss on extinguishment of debt and induced conversion of convertible bridge notes | 1,391 | 0 |
Gain on settlement of liability | (647) | 0 |
Stock-based compensation and change in liability of stock appreciation rights | 33 | 9 |
Merger advisory fees | 2,676 | 0 |
Impairment of goodwill | 1,015 | 0 |
Provision for losses on doubtful accounts | 168 | 309 |
Capitalized PIK interest on convertible bridge notes | 0 | 85 |
Warrant revaluation | 3 | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (129) | (314) |
Inventories | 15 | (12) |
Other assets | 30 | (27) |
Accounts payable | 484 | 58 |
Accrued expenses and other liabilities | (1,094) | 371 |
Net cash used in operating activities | (4,481) | (642) |
CASH FLOWS PROVIDED BY INVESTING ACTIVITIES: | ||
Cash acquired in business combination | 101 | 0 |
Net cash provided by investing activities | 101 | 0 |
CASH FLOWS PROVIDED BY FINANCING ACTIVITIES: | ||
Principal payments on capital lease obligations | (34) | (29) |
Issuance of preferred stock | 5,380 | 0 |
Payment of deferred financing costs | (25) | (10) |
Proceeds from exercise of warrants | 25 | 0 |
Proceeds from long-term debt | 315 | 175 |
Proceeds from long-term debt | 1,365 | 455 |
Principal payments on convertible bridge notes | (1,500) | 0 |
Principal payments on long-term debt | (816) | (116) |
Net cash flows provided by financing activities | 4,710 | 475 |
NET CHANGE IN CASH AND CASH EQUIVALENTS | 330 | (167) |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 51 | 235 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 381 | 68 |
SUPPLEMENTAL CASH FLOW INFORMATION | ||
Cash paid during the period for interest | 65 | 48 |
SUPPLEMENTAL DISCLOSURE OF NON-CASH INFORMATION | ||
Purchases of equipment financed through capital lease | 0 | 49 |
Preferred unit dividend financed through exchange agreement | 0 | 433 |
Convertible bridge notes exchanged for long-term debt | 0 | 680 |
Series A and B preferred exchanged for long-term debt | 0 | 1,715 |
Deferred debt issuance cost | 64 | 0 |
Recorded beneficial conversion feature on debt | 1,856 | 0 |
Accrued merger cost | 10 | 0 |
Issuance of warrants in conjunction with issuance of side agreement | 487 | |
Purchases of equipment financed through accounts payable | 20 | 0 |
Side Warrants | ||
Adjustments to reconcile net loss to net cash flows used in operating activities: | ||
Merger advisory fees | 487 | |
SUPPLEMENTAL DISCLOSURE OF NON-CASH INFORMATION | ||
Issuance of warrants in conjunction with issuance of side agreement | 487 | 0 |
Senior and Junior Notes | ||
SUPPLEMENTAL DISCLOSURE OF NON-CASH INFORMATION | ||
Conversion of debt into stock | 4,771 | 0 |
Bridge Loan | ||
Adjustments to reconcile net loss to net cash flows used in operating activities: | ||
Loss on extinguishment of debt and induced conversion of convertible bridge notes | 400 | |
SUPPLEMENTAL DISCLOSURE OF NON-CASH INFORMATION | ||
Conversion of debt into stock | $ 1,787 | $ 0 |
BUSINESS DESCRIPTION
BUSINESS DESCRIPTION | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BUSINESS DESCRIPTION | BUSINESS DESCRIPTION Business Description Precipio, Inc., and Subsidiary, (“we”, “us”, “our”, the “Company” or “Precipio”) is a cancer diagnostics company providing diagnostic products and services to the oncology market. We have built and continue to develop a platform designed to eradicate the problem of misdiagnosis by harnessing the intellect, expertise and technology developed within academic institutions and delivering quality diagnostic information to physicians and their patients worldwide. We operate a cancer diagnostic laboratory located in New Haven, Connecticut and have partnered with the Yale School of Medicine to capture the expertise, experience and technologies developed within academia so that we can provide a better standard of cancer diagnostics and solve the growing problem of cancer misdiagnosis. We also operate a research and development facility in Omaha, Nebraska which will focus on further development of ICE-COLD-PCR (“ICP”), the patented technology which was exclusively licensed by us from Dana-Farber Cancer Institute, Inc. (“Dana-Farber”) at Harvard University (“Harvard”). The research and development center will focus on the development of this technology, which we believe will enable us to commercialize other technologies developed by our current and future academic partners. Our platform connects patients, physicians and diagnostic experts residing within academic institutions. Launched in 2017, the platform facilitates the following relationships: • Patients: patients may search for physicians in their area and consult directly with academic experts that are on the platform. Patients may also have access to new academic discoveries as they become commercially available. • Physicians: physicians can connect with academic experts to seek consultations on behalf of their patients and may also provide consultations for patients in their area seeking medical expertise in that physician’s relevant specialty. Physicians will also have access to new diagnostic solutions to help improve diagnostic accuracy. • Academic Experts: academic experts on the platform can make themselves available for patients or physicians seeking access to their expertise. Additionally, these experts have a platform available to commercialize their research discoveries. We intend to continue updating our platform to allow for patient-to-patient communications and allow individuals to share stories and provide support for one another, to allow physicians to consult with their peers to discuss and share challenges and solutions, and to allow academic experts to interact with others in academia on the platform to discuss their research and cross-collaborate. ICP was developed at Harvard and is licensed exclusively by us from Dana-Farber. The technology enables the detection of genetic mutations in liquid biopsies, such as blood samples. The field of liquid biopsies is a rapidly growing market, aimed at solving the challenge of obtaining genetic information on disease progression and changes from sources other than a tumor biopsy. Gene sequencing is performed on tissue biopsies taken surgically from the tumor site in order to identify potential therapies that will be more effective in treating the patient. There are several limitations to this process. First, surgical procedures have several limitations, including: • Cost: surgical procedures are usually performed in a costly hospital environment. For example, according to a recent study the mean cost of lung biopsies is greater than $14,000; surgery also involves hospitalization and recovery time. • Surgical access: various tumor sites are not always accessible (e.g. brain tumors), in which cases no biopsy is available for diagnosis. • Risk: patient health may not permit undergoing an invasive surgery; therefore a biopsy cannot be obtained at all. • Time: the process of scheduling and coordinating a surgical procedure often takes time, delaying the start of patient treatment. Second, there are several tumor-related limitations that provide a challenge to obtaining such genetic information from a tumor: • Tumors are heterogeneous by nature: a tissue sample from one area of the tumor may not properly represent the tumor’s entire genetic composition; thus, the diagnostic results from a tumor may be incomplete and non-representative. • Metastases: in order to accurately test a patient with metastatic disease, ideally an individual biopsy sample should be taken from each site (if those sites are even known). These biopsies are very difficult to obtain; therefore physicians often rely on biopsies taken from the primary tumor site. The advent of technologies enabling liquid biopsies as an alternative to tumor biopsy and analysis is based on the fact that tumors (both primary and metastatic) shed cells and fragments of DNA into the blood stream. These blood samples are called “liquid biopsies” that contain circulating tumor DNA, or ctDNA, which hold the same genetic information found in the tumor(s). That tumor DNA is the target of genetic analysis. However, since the quantity of tumor DNA is very small in proportion to the “normal” (or “healthy”) DNA within the blood stream, there is a need to identify and separate the tumor DNA from the normal DNA. ICP is an enrichment technology that enables the laboratory to focus its analysis on the tumor DNA by enriching, and thereby “multiplying” the presence of, tumor DNA, while maintaining the normal DNA at its same level. Once the enrichment process has been completed, the laboratory genetic testing equipment is able to identify genetic abnormalities presented in the ctDNA, and an analysis can be conducted at a higher level of sensitivity, to enable the detection of such genetic abnormalities. The technology is encapsulated into a chemical that is provided in the form of a kit and sold to other laboratories who wish to conduct these tests in-house. The chemical within the kit is added to the specimen preparation process, enriching the sample for the tumor DNA so that the analysis will detect those genetic abnormalities. Merger Transaction On June 29, 2017, the Company (then known as “Transgenomic, Inc.”, or “Transgenomic”), completed a reverse merger (the “Merger”) with Precipio Diagnostics, LLC, a privately held Delaware limited liability company (“Precipio Diagnostics”) in accordance with the terms of the Agreement and Plan of Merger (the “Merger Agreement”), dated October 12, 2016, as amended on February 2, 2017 and June 29, 2017, by and among Transgenomic, Precipio Diagnostics and New Haven Labs Inc. (“Merger Sub”) a wholly-owned subsidiary of Transgenomic. Pursuant to the Merger Agreement, Merger Sub merged with and into Precipio Diagnostics, with Precipio Diagnostics surviving the Merger as a wholly-owned subsidiary of the combined company (See Note 3 - Reverse Merger). In connection with the Merger, the Company changed its name from Transgenomic, Inc. to Precipio, Inc., relisted its common stock under Precipio, Inc. on the National Association of Securities Dealers Automated Quotations (“NASDAQ”), and effected a 1-for-30 reverse stock split of its common stock. Upon the consummation of the Merger, the historical financial statements of Precipio Diagnostics become the Company's historical financial statements. Accordingly, the historical financial statements of Precipio Diagnostics are included in the comparative prior periods. As a result of the Merger, historical preferred stock, common stock, restricted units, warrants and additional paid-in capital, including share and per share amounts, have been retroactively adjusted to reflect the equity structure of the combined company, including the effect of the Merger exchange ratio. Pursuant to the Merger Agreement, each outstanding unit of Precipio Diagnostics was exchanged for 10.2502 pre-reverse stock split shares of Company Common Stock (the “Exchange Ratio”). See Note 3 - Reverse Merger for additional discussion of the Merger. Going Concern The condensed consolidated financial statements have been prepared using accounting principles generally accepted in the United States of America (“GAAP”) applicable for a going concern, which assume 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 several years. As of September 30, 2017, the Company had a net loss of $10.7 million and negative working capital of $12.6 million . The Company’s ability to continue as a going concern is dependent upon a combination of achieving its business plan, including generating additional revenue, and raising additional financing to meet its debt obligations and paying liabilities arising from normal business operations when they come due. To meet its current and future obligations the Company has taken the following steps to capitalize the business and successfully achieve its business plan: • On October 31, 2017, the Company entered into a Debt Settlement Agreement (the “Settlement Agreement”) with certain of its accounts payable vendors (the “Creditors”) pursuant to which the Creditors agreed to a reduction of approximately $5.0 million in currently due vendor liabilities. The Company and the Creditors agreed to restructure these liabilities into approximately $2.5 million in secured, long-term vendor obligations with payments beginning in July 2018 and continuing over 48 months . • On November 7, 2017, the Company completed its capital raise initiative issuing $2.8 million in units consisting of Series C Preferred stock and warrants to purchase common stock. Notwithstanding the aforementioned circumstances, there remains substantial doubt about the Company’s ability to continue as a going concern. There can be no assurance that the Company will be able to successfully achieve its initiatives summarized above in order to continue as a going concern. The accompanying financial statements have been prepared assuming the Company will continue as a going concern and do not include any adjustments that might result should the Company be unable to continue as a going concern as a result of the outcome of this uncertainty. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation. The accompanying condensed consolidated financial statements are presented in conformity with GAAP. We have evaluated events occurring subsequent to September 30, 2017 for potential recognition or disclosure in the condensed consolidated financial statements and concluded that, other than what is disclosed in Note 13 - Subsequent Events, there were no other subsequent events that required recognition or disclosure. The condensed consolidated balance sheet as of December 31, 2016 was derived from our audited balance sheet as of that date. There has been no change in the balance sheet from December 31, 2016. The accompanying condensed consolidated financial statements as of and for the three and nine months ended September 30, 2017 and 2016 are unaudited and reflect all adjustments (consisting of only normal recurring adjustments) that are, in the opinion of management, necessary for a fair presentation of the financial position and operating results for the interim periods. These unaudited condensed consolidated financial statements and notes should be read in conjunction with the audited financial statements and notes thereto of Precipio Diagnostics for the year ended December 31, 2016 contained in our current report on Form 8-K/A, filed with the Securities and Exchange Commission (the “SEC”) on July 31, 2017. The results of operations for the interim periods presented are not necessarily indicative of the results for fiscal year 2017. Reclassifications. Certain reclassifications were made to the 2016 financial statements to conform to current year financial statement presentation. These reclassifications had no effect on previously reported net earnings. Principles of Consolidation. The condensed consolidated financial statements include the accounts of Precipio, Inc. and our wholly owned subsidiary. All inter-company balances and transactions have been eliminated in consolidation. Use of Estimates. The preparation of condensed 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. Actual results could differ from the estimates and assumptions used in preparing these condensed consolidated financial statements. Risks and Uncertainties. Certain risks and uncertainties are inherent in our day-to-day operations and in the process of preparing our financial statements. The more significant of those risks are presented below and throughout the notes to the unaudited condensed consolidated financial statements. The Company operates in the healthcare industry which is subject to numerous laws and regulations of federal, state and local governments. These laws and regulations include, but are not necessarily limited to, matters such as licensure, accreditation, government healthcare program participation requirements, reimbursement for patient services, and Medicare and Medicaid fraud and abuse. Government activity has increased with respect to investigations and allegations concerning possible violations of fraud and abuse statutes and regulations by healthcare providers. Violations of these laws and regulations could result in expulsion from government healthcare programs together with the imposition of significant fines and penalties, as well as significant repayments for patient services previously billed. Management believes that the Company is in compliance with fraud and abuse regulations, as well as other applicable government laws and regulations. While no material regulatory inquiries have been made, compliance with such laws and regulations can be subject to future government review and interpretation as well as regulatory actions unknown or unasserted at this time. Fair Value. Unless otherwise specified, book value approximates fair value. The common stock warrant liability is recorded at fair value. See Note 11 - Fair Value for additional information. Cash and Cash Equivalents and Other Current Assets. Cash and cash equivalents include cash and investments with original maturities at the date of acquisition of three months or less. Other current assets as of September 30, 2017 of $0.1 million includes prepaid assets of less than $0.1 million and other receivables of less than $0.1 million and consisted of primarily prepaid assets as of December 31, 2016. Concentrations of Risk. From time to time, we may maintain a cash position with financial institutions in amounts that exceed Federal Deposit Insurance Corporation insured limits. We have not experienced any losses on such accounts as of September 30, 2017 . Service companies in the health care industry typically grant credit without collateral to patients. The majority of these patients are insured under third-party insurance agreements. The services provided by the Company are routinely billed utilizing the Current Procedural Terminology (CPT) code set designed to communicate uniform information about medical services and procedures among physicians, coders, patients, accreditation organizations, and payers for administrative, financial, and analytical purposes. CPT codes are currently identified by the Centers for Medicare and Medicaid Services and third-party payors. The Company utilizes CPT codes for Pathology and Laboratory Services contained within codes 80000-89398. Property and Equipment. Depreciation expense related to property and equipment was less than $0.1 million for both the three and nine months ended September 30, 2017 and 2016 . Depreciation expense during each period includes depreciation related to equipment acquired under capital leases. Goodwill and Intangible Assets. As a result of the Merger, the Company recorded goodwill and intangible assets as part of its allocation of the purchase consideration. See Note 3 - Reverse Merger for the amounts recorded. Goodwill Goodwill represents the excess of the purchase price over the fair value of identifiable net assets of the business acquired. See Note 3 - Reverse Merger for the amount recorded. Goodwill is tested for impairment annually. We perform this impairment analysis during the fourth quarter of each year or when a significant event occurs that may indicate that the assets might be impaired. In assessing goodwill for impairment, the Company has the option to assess qualitative factors to determine whether events or circumstances indicate that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, for which the consolidated Company is considered one reporting unit. If this is the case, then performing the quantitative goodwill impairment test is unnecessary. An entity can choose not to perform a qualitative assessment for any or all of its reporting units, and proceed directly to the use of the quantitative impairment test. In assessing qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the relevant events and circumstances that may impact the fair value and the carrying amount of a reporting unit are assessed. The identification of relevant events and circumstances and how these may impact a reporting unit’s fair value or carrying amount involve significant judgments by management. These judgments include the consideration of macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, events which are specific to the company, and trends in the market price of our common stock. Each factor is assessed to determine whether it impacts the impairment test positively or negatively, and the magnitude of any such impact. During the three months ended September 30, 2017, the Company experienced a decline in its share price and a significant reduction in its market capitalization, as such the Company determined that an assessment of goodwill should be performed using the qualitative approach described above. Based on the qualitative assessment, the Company concluded that it was more likely than not that the fair value of the Company was less than its carry value. While there were positive qualitative factors discovered during the qualitative analysis, the instability of the market price of the Company’s common stock and the decline in revenues were significant adverse factors that directed a full assessment. In estimating fair value, the Company utilized the market capitalization to estimate the fair value. The impairment test performed by the Company indicated that the estimated fair value of the Company was less than its carrying amount. As a result of the analysis performed, the Company recorded a goodwill impairment charge of $1.0 million during the three months ended September 30, 2017. Intangibles We review our amortizable long-lived assets for impairment annually or 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 value of the asset to the carrying amount of the asset (group). There were no impairment charges during the nine months ended September 30, 2017. In-process research and development (“IPR&D”) represents the fair value assigned to research and development assets that were not fully developed at the date of the Merger. Until the IPR&D projects are completed, the assets are accounted for as indefinite-lived intangible assets and subject to impairment testing. For the nine months ended September 30, 2017, there was no impairment of IPR&D. 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 awards as of September 30, 2017 had vesting periods of up to four years from the date of grant. None of the awards outstanding at September 30, 2017 are subject to performance or market-based vesting conditions. Net Sales Recognition. Revenue is realized and earned when all of the following criteria are met: • Persuasive evidence of an arrangement exists; • Delivery has occurred or services have been rendered; • The seller’s price to the buyer is fixed or determinable; and • Collectability is reasonably assured. In our New Haven, Connecticut laboratory, we primarily recognize revenue for services rendered upon completion of the testing process. Net patient service revenue is reported at the estimated net realizable amounts from patients, third-party payors and others for services rendered, including retroactive adjustment under reimbursement agreements with third-party payors. Revenue under third-party payor agreements is subject to audit and retroactive adjustment. Provisions for third-party payor settlements are provided in the period in which the related services are rendered and adjusted in the future periods, as final settlements are determined. In our Omaha, Nebraska laboratory, we perform services on a project by project basis. When we receive payment in advance, we initially defer the revenue and recognize it when we deliver the service. These projects typically do not extend beyond one year. At each of September 30, 2017 and December 31, 2016 , deferred net sales included in the balance sheet in deferred revenue were $0.2 million and $0.1 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. Presentation of Insurance Claims and Related Insurance Recoveries. The Company accounts for its insurance claims and related insurance recoveries at their gross values as standards for health care entities do not allow the Company to net insurance recoveries against the related claim liabilities. There were no insurance claims or insurance recoveries recorded during the three and nine months ended September 30, 2017 and 2016. 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. Beneficial Conversion Features. The intrinsic value of a beneficial conversion feature (“BCF”) inherent to a convertible note payable, which is not bifurcated and accounted for separately from the convertible note payable and may not be settled in cash upon conversion, is treated as a discount to the convertible note payable. This discount is amortized over the period from the date of issuance to the first conversion date using the effective interest method. If the note payable is retired prior to the end of its contractual term, the unamortized discount is expensed in the period of retirement to interest expense. In general, the BCF is measured by comparing the effective conversion price, after considering the relative fair value of detachable instruments included in the financing transaction, if any, to the fair value of the common shares at the commitment date to be received upon conversion. Deemed dividends are also recorded for the intrinsic value of conversion options embedded in preferred shares based upon the differences between the fair value of the underlying common stock at the commitment date of the transaction and the effective conversion price embedded in the preferred shares. When the preferred shares are non-redeemable the BCF is fully amortized into additional paid-in capital and preferred discount. If the preferred shares are redeemable, the discount is amortized from the commitment date to the first conversion date. Loss Per Share. Basic loss per share is calculated based on the weighted-average number of common shares outstanding during each period. Diluted loss per share includes shares issuable upon exercise of outstanding stock options, warrants or conversion rights that have exercise or conversion prices below the market value of our common stock. Options, warrants and conversion rights pertaining to 5,919,819 and 2,765,904 shares of our common stock have been excluded from the computation of diluted loss per share at September 30, 2017 and 2016 , respectively, because the effect is anti-dilutive due to the net loss. Recent Accounting Pronouncements. In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers and has subsequently issued supplemental and/or clarifying ASUs (collectively “ASC 606”). ASC 606 outlines a five-step framework that intends to clarify the principles for recognizing revenue and eliminate industry-specific guidance. In addition, ASC 606 revises current disclosure requirements in an effort to help financial statement users better understand the nature, amount, timing, and uncertainty of revenue that is recognized. ASC 606 will be effective for our annual reporting period beginning on January 1, 2018, including interim periods within that year. ASC 606 may be applied either retrospectively to each prior reporting period presented or use the modified retrospective transition method with the cumulative effect of initial adoption recognized at the date of initial application. We expect to apply the new standard using the modified retrospective method upon its adoption date on January 1, 2018. Under the modified retrospective method, we will recognize the cumulative effect of initially applying the new revenue standard as an adjustment to the opening balance of retained earnings. The comparative information will not be restated and will continue to be reported under the accounting standards in effect for those periods. Implementation steps we are taking include reviewing our current accounting policies and practices to identify potential differences that would result from the application of this standard, determining key factors to recognize revenue as prescribed by the new standard that may be applicable to each of our business segments, analyzing our current portfolio of business contracts including our third-party payor contracts and evaluating our historical accounting policies and practices to identify potential differences in applying the new guidance. We anticipate that our evaluation will include the related qualitative disclosures regarding the potential impact of the effects of the accounting policies we expect to apply and a comparison to our current revenue recognition policies. We expect to complete this process prior to the filing of, and make disclosures in, our Annual Report on Form 10-K for the year ended December 31, 2017. Based on our evaluation so far, we believe there will be no significant changes required to our business processes, systems and controls to effectively report revenue recognition under the new standard. Adoption of the new standard is not expected to materially change the timing or amount of revenue recognized in our Consolidated Financial Statements. In February 2016, the FASB issued ASU No. 2016-02, Leases. The new standard amends the recognition of lease assets and lease liabilities by lessees for those leases currently classified as operating leases and amends disclosure requirements associated with leasing arrangements. The new standard is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2018. Early adoption is permitted. The new standard must be adopted using a modified retrospective transition, and provides for certain practical expedients. Transition will require application of the new guidance at the beginning of the earliest comparative period presented. We are currently assessing the impact that the adoption of this ASU will have on our consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The new standard simplifies several aspects related to the accounting for share-based payment transactions, including the accounting for income taxes, statutory tax withholding requirements, forfeitures and classification on the statement of cash flows. This guidance is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2016. The Company adopted ASU No. 2016-09 as of January 1, 2017. The adoption of this guidance does not have a material effect on the Company’s financial position and results of operations. In August 2016, FASB issued ASU No. 2016-15 , Classification of Certain Cash Receipts and Cash Payments. ASU No. 2016-15 eliminates the diversity in practice related to the classification of certain cash receipts and payments in the statement of cash flows by adding or clarifying guidance on eight specific cash flow issues. ASU No. 2016-15 is effective for fiscal years beginning after December 15, 2017, and for interim periods within that fiscal year. We do not believe ASU No. 2016-15 will have a material effect on our financial position and results of operations. In January 2017, FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. ASU No. 2017-01 adds guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The new guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company does not believe ASU No. 2017-01 will have a material effect on its financial position and results of operations. In January 2017, FASB issued ASU No. 2017-04, Intangibles — Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, which removes Step 2 from the goodwill impairment test. It is effective for annual and interim periods beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment test performed with a measurement date after January 1, 2017. The Company has adopted this standard and, as discussed above, performed interim impairment testing of goodwill during the three months ended September 30, 2017 which resulted in the Company recording a goodwill impairment charge of $1.0 million . In July 2017, FASB issued ASU No. 2017-11, Earning Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815), which was issued in two parts, Part I, Accounting for Certain Financial Instruments with Down Round Features and Part II, Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception. Part I of ASC No. 2017-11 addresses the classification analysis of certain equity-linked financial instruments (or embedded features) with down round features. When determining whether certain financial instruments should be classified as liabilities or equity instruments, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. The amendments also clarify existing disclosure requirements for equity-classified instruments. As a result, a freestanding equity-linked financial instrument (or embedded conversion option) no longer would be accounted for as a derivative liability at fair value as a result of the existence of a down round feature. For freestanding equity classified financial instruments, the amendments require entities that present earnings per share (EPS) in accordance with Topic 260 to recognize the effect of the down round feature when it is triggered. That effect is treated as a dividend and as a reduction of income available to common shareholders in basic EPS. The amendments in Part II of ASU 2017-11 recharacterize the indefinite deferral of certain provisions of Topic 480 that now are presented as pending content in the codification, to a scope exception. Part II amendments do not have an accounting effect. The ASU 2017-11 is effective for annual and interim periods beginning after December 15, 2018, with early adoption permitted. The Company has early adopted this standard as of January 1, 2017 with the only impact being that the warrants with down round provisions are classified within equity. (See Note 6 - Convertible Bridge Notes and Note 10 - Stockholders' Equity). |
REVERSE MERGER
REVERSE MERGER | 9 Months Ended |
Sep. 30, 2017 | |
Business Combinations [Abstract] | |
REVERSE MERGER | REVERSE MERGER On June 29, 2017 (the “Closing Date”), the Company completed the Merger with Precipio Diagnostics, in accordance with the terms of the Merger Agreement. Upon the consummation of the Merger, the historical financial statements of Precipio Diagnostics become the Company's historical financial statements. Accordingly, the historical financial statements of Precipio Diagnostics are included in the comparative prior periods. On the Closing Date, the outstanding common and preferred units of Precipio Diagnostics and certain debt of Precipio Diagnostics were converted into (i) 5,352,847 shares of Precipio common stock, together with cash in lieu of fractional units, and (ii) 802,920 shares of Precipio preferred stock with an aggregate face amount equal to $3 million . In connection with the Merger, on the Closing Date, Precipio also issued promissory notes and shares of Precipio preferred and common stock in a number of transactions, whereby: • Holders of certain secured indebtedness of Transgenomic received in exchange for such indebtedness 802,925 shares of Precipio preferred stock in an amount equal to $3.0 million stated value, and 352,630 shares of Precipio common stock; • Holders of Transgenomic preferred stock converted it into 7,155 shares of Precipio common stock; and • Precipio issued 107,056 shares of Precipio preferred stock to certain investors in exchange for $400,000 in a private placement. Precipio also completed the sale of an aggregate of $800,000 of promissory notes pursuant to a securities purchase agreement. Purchase Consideration The preliminary estimated purchase consideration based on the value of the equity of Transgenomic, the accounting acquiree, is as follows: (dollars in thousands) Legacy Transgenomic common stock $ 6,088 Fair value of preferred stock converted to common stock 49 Fair value of debt converted to common stock 2,398 Fair value of debt converted to preferred stock 9,796 Fair value of existing bridge notes 1,275 Fair value of warrants 1,996 Purchase consideration $ 21,602 In estimating the preliminary purchase consideration above, Transgenomic used its closing stock price of $6.80 as of the Closing Date. Transgenomic had 895,334 common shares outstanding prior to the Merger. In connection with the Merger, Transgenomic preferred stock converted into 7,155 shares of Precipio common stock and certain of Transgenomic debt and accrued interest converted into 352,630 shares of Precipio common stock and 802,925 shares of Precipio preferred stock, face value $3.0 million with an 8% annual dividend. At the Closing Date, the preferred stock had a fair value of $12.20 per share. Allocation of Purchase Consideration The following table sets forth an allocation of the purchase consideration to the identifiable tangible and intangible assets of Transgenomic, the accounting acquiree, based on fair values as of the Closing Date with the excess recorded as goodwill: (dollars in thousands) Current and other assets $ 419 Property and equipment 29 Goodwill 13,832 Other intangible assets (1) 21,100 Total assets 35,380 Current liabilities 13,604 Other liabilities 174 Total liabilities 13,778 Net assets acquired $ 21,602 (1) Other intangible assets consist of: (dollars in thousands) Acquired technology $ 18,990 Customer relationships 250 Non-compete agreements 30 Trademark and trade name 40 Backlog 200 In-process research and development 1,590 Total intangibles $ 21,100 We determined the estimated fair value of the acquired technology but using the multi-period excess earnings method of the income approach. The estimated fair value of the remaining identifiable intangible assets acquired were determined primarily by using the income approach. Unaudited pro forma information The operating results of Transgenomic for the period after the Closing Date to September 30, 2017 have been included in the Company's condensed consolidated financial statements as of and for the three and nine months ended September 30, 2017. The following unaudited pro forma information presents the Company's financial results as if the acquisition of Transgenomic had occurred on January 1, 2016: Dollars in thousands, except per share amounts Nine months ended September 30, 2017 2016 Net sales $ 1,742 $ 2,605 Net loss available to common stockholders (22,980 ) (15,838 ) Loss per common share $ (3.40 ) $ (2.48 ) |
INTANGIBLES
INTANGIBLES | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLES | INTANGIBLES We had no intangible assets as of December 31, 2016. In conjunction with the Merger, we recorded intangible assets of $21.1 million . As of September 30, 2017 our intangible assets consisted of the following: Dollars in Thousands September 30, 2017 Cost Accumulated Amortization Net Book Value Technology $ 18,990 $ 237 $ 18,753 Customer relationships 250 21 229 Backlog 200 50 150 Covenants not to compete 30 8 22 Trademark 40 5 35 IPR&D 1,590 — 1,590 $ 21,100 $ 321 $ 20,779 Estimated Useful Life Technology 20 years Customer relationships 3 years Backlog 1 year Covenants not to compete 1 year Trademark 2 years Until our in-process research and development projects are completed, the assets are accounted for as indefinite-lived intangible assets and subject to impairment testing. For the nine months ended September 30, 2017, there was no impairment of IPR&D. Amortization expense for intangible assets was $0.3 million during the three and nine month periods ended September 30, 2017 . Amortization expense for intangible assets is expected to be $0.6 million , $1.2 million , $1.0 million , $1.0 million and $0.9 million for each of the years ending December 31, 2017, 2018, 2019, 2020 and 2021, respectively. |
LONG-TERM DEBT
LONG-TERM DEBT | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT Long-term debt consists of the following: Dollars in Thousands September 30, 2017 December 31, 2016 Senior Notes $ — $ 3,270 Senior Note debt issuance costs — (9 ) Junior Notes — 584 Connecticut Innovations - line of credit — 162 Department of Economic and Community Development (DECD) — 243 DECD debt issuance costs — (30 ) Webster Bank — 328 Webster Bank debt discounts and issuance costs — (26 ) Convertible promissory notes 42 — Total long-term debt 42 4,522 Current portion of long-term debt (42 ) (395 ) Long-term debt, net of current maturities $ — $ 4,127 Senior and Junior Notes During 2016, the Company raised $525,000 from members through the issuance of senior notes which accrue interest at a rate of 12% and are payable at the sooner of the closing of a qualified public offering, as outlined in the note agreement, or five years from date of issuance. Also during 2016, the Company restructured equity through a redemption and exchange agreement by exchanging Member Equity comprised of Series A and Series B Convertible Preferred Units in the amount of $2,147,716 (members’ initial investment of $ 1,715,000 , plus declared dividends on these preferred units of $432,716 ), and Convertible Bridge Notes of $1,120,000 , plus accrued interest of $61,073 for new senior notes of $2,744,968 (“Senior Notes”) and new junior notes of $583,821 (“Junior Notes”). The Senior and Junior Notes accrue interest at a rate of 12% and 15% , respectively, and have maturity dates ranging from March 2021 to September 2021, or earlier based on certain qualifying events as outlined in the note agreements. During the nine months ended September 30, 2017, prior to the Merger, the Company raised $315,000 from members through the issuance of Senior Notes at a rate of 12% interest that are payable at the sooner of the closing of a qualified public offering, as outlined in the note agreement, or five years from date of issuance. On the Closing Date of the Merger, the outstanding balance of $3,584,968 in Senior Notes and $583,821 in Junior Notes, plus accrued interest of $602,373 , were converted into 802,920 shares of Precipio preferred stock and 1,414,700 shares of Precipio common stock. There were no Senior or Junior Notes outstanding as September 30, 2017. As of December 31, 2016, the outstanding balance of Senior and Junior Notes was $3,269,968 and $583,821 , respectively, with accrued interest included within the accrued expenses on the accompanying condensed consolidated balance sheet of $279,740 and $71,258 , respectively. Connecticut Innovations, Incorporated The Company entered into a line of credit on April 1, 2012 with Connecticut Innovations, Incorporated (Connecticut Innovations), an entity affiliated with a director of the Company, for up to $500,000 with interest paid monthly at 8% , due on September 1, 2018 . Principal and interest payments began February 1, 2013 and ranged from $7,436 to $12,206 until September 2016, when the Company entered into a forbearance agreement to 1) defer monthly principal payments until October 2017 and 2) make interest-only payments totaling $1,041 per month through October 2017. Pursuant to the forbearance agreement, the Company was also restricted from any additional borrowings under the line of credit. The line was secured by substantially all of the Company’s assets. In connection with the Merger, the Company paid in full its loan obligations with Connecticut Innovations. The outstanding balance was zero and $162,066 as of September 30, 2017 and December 31, 2016, respectively. Department of Economic and Community Development. The Company entered into a 10 -year term loan with the Department of Economic and Community Development (“DECD”) on May 1, 2013 for $300,000 , with interest paid monthly at 3% , due on April 23, 2023 . The loan was secured by substantially all of the Company’s assets but was subordinate to the term loan with Webster Bank and the Connecticut Innovations line of credit. In connection with the Merger, the Company paid in full its loan obligations with DECD. The outstanding balance was zero and $243,287 as of September 30, 2017 and December 31, 2016, respectively. The outstanding principal and accrued interest balance paid in full in July 2017 was $225,714 . Webster Bank. The Company entered into a 3.5 -year term loan with Webster Bank on December 1, 2014 for $500,000 , with interest paid monthly at the one month LIBOR rate ( 1.16% at June 30, 2017) plus 500 basis points, due on May 31, 2018 . The line was secured by substantially all of the Company’s assets and had first priority over all other outstanding debt. The term loan with Webster Bank was subject to financial covenants relating to maintaining adequate cash runway, as defined in the term loan agreement. As of December 31, 2016 the Company was not in compliance with these covenants and, as such, the Webster Bank debt has all been presented as current in the accompanying condensed consolidated financial statements. On June 29, 2017, the closing date of the Merger, the Company paid in full its loan obligations (including principal and interest) with Webster Bank. The outstanding balance was zero and $328,000 as of September 30, 2017 and December 31, 2016, respectively. During the nine months ended September 30, 2017, the Company incurred a loss on extinguishment of debt in the approximate amount of $53,000 , related to the extinguishment of the Connecticut Innovations, DECD and Webster Bank loans. Convertible Promissory Notes. The Company, as part of the merger, assumed an Unsecured Convertible Promissory Note (the “Note”) with an accredited investor (the “Investor”) in the aggregate principal amount of $125,000 and interest accrues at a rate of 6% per year. The Note provided that two-thirds of the outstanding principal amount of the Note was due upon the earlier to occur of the close of the Merger or June 17, 2017 (such applicable date, the “Maturity Date”). The remaining one-third of the principal amount outstanding on the Note was to be paid on the six month anniversary of the Maturity Date. On the Maturity Date, the then outstanding aggregate amount owed on the Note of $ 143,041 ( $125,000 in principal amount and $18,041 of accrued interest) became due. Pursuant to the terms of the Note, the Company’s failure to pay any principal or interest within 10 days of the date such payment is due will constitute an event of default (the “Prospective Event of Default”). On June 21, 2017, the Investor agreed to waive the Prospective Event of Default and agreed to further extend the Maturity Date of the Note pursuant to a side letter to the Note (the “Side Letter”). The Side Letter provides that two-thirds of the outstanding principal amount of the Note must be paid upon the earlier to occur of (1) the closing of a public offering by the Company of either common stock, convertible preferred stock or convertible preferred notes or (2) August 16, 2017 (such applicable date, the “Deferred Maturity Date”). On August 31, 2017, the Company made payment of $83,333 , two-thirds of the then outstanding principal amount. The remaining one-third of the principal amount outstanding on the Note must be paid on the six month anniversary of the Deferred Maturity Date (the “Extended Maturity Date”). All accrued and unpaid interest on the outstanding principal amount of the Note will be due and immediately payable on the Extended Maturity Date, unless the Note is converted in which case such interest will be payable in shares of the Company’s common stock as part of the conversion. As of September 30, 2017, the outstanding principal amount due was $41,666 and accrued interest was approximately $20,000 and is included within accrued expenses on the accompanying condensed consolidated balance sheet. |
CONVERTIBLE BRIDGE NOTES
CONVERTIBLE BRIDGE NOTES | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
CONVERTIBLE BRIDGE NOTES | CONVERTIBLE BRIDGE NOTES. Convertible Bridge Notes. During the year ended December 31, 2016, the Company had outstanding $695,000 of unsecured convertible bridge notes. The notes accrued interest at a rate of 14% and were payable on the extended maturity date of December 31, 2016. During January 2017, the holders of the convertible bridge notes agreed to waive the maturity date of December 31, 2016 and change it to payable on demand and accrue interest until paid. The convertible bridge notes had conversion terms of (i) convertible into Series C Preferred Units of the Company (at a 30% discount) upon a Qualified Series C Financing (as defined in the note agreement), (ii) at the option of the holders of a majority of the then-outstanding principal amount of the notes, convertible into Series C Preferred Units of the Company (at a 30% discount) upon any other Series C Financing, or (iii) if no such Qualified Series C Financing occurs, or no such optional conversion takes place by the maturity date (as hereinafter defined), the convertible notes will be fully repaid by Company or the notes and accrued and unpaid interest shall convert into Preferred Series B Units (at a 30% discount) of the Preferred Series B conversion Price as defined in the operating agreement provided that notice is given to the Company at least one day prior to maturity. In the event a Deemed Liquidity Event (merger, sale, IPO, or transaction with exchange of 50% or more of voting power) the holders of the notes at their sole discretion can (a) require the Company to pay an amount equal to two times the principal and accrued and unpaid interest or (b) convert all unpaid principal and interest at a rate of 70% of the applicable security. These notes were subordinated to Connecticut Innovations, DECD and Webster Bank. In connection with the Merger, on the Closing Date, convertible bridge notes of $695,000 , plus $192,000 of accrued interest, were converted into 155,639 shares of Precipio common stock. 2017 New Bridge Notes I. Prior to the Merger, the Company (then Transgenomic) completed the sale of an aggregate of $1.2 million of non-convertible promissory notes (the “2017 Bridge Notes”) in a bridge financing pursuant to a securities purchase agreement (the “Purchase Agreement”), for which $561,500 was then given to Precipio Diagnostics through the issuance of a promissory note and is eliminated in consolidation. The financing was intended to help facilitate the completion of the Merger. The 2017 Bridge Notes had an annual interest rate of 4% and a 90 -day maturity. The 2017 Bridge Notes may be repaid by the Company at any time in cash upon payment of a 20% premium. In connection with the issuance of the 2017 Bridge Notes, the Company issued warrants (the “2017 Bridge Warrants”) to acquire 40,000 shares of the Company's common stock at an exercise price of $15.00 per share, subject to anti-dilution protection. The Purchase Agreement provides certain piggyback registration rights for the holders of the 2017 Bridge Warrants for a period of six months after the closing of the bridge financing. Aegis Capital Corp. (“Aegis”) acted as placement agent for the bridge financing and received a placement agent fee of $84,000 and warrants (the “Aegis Warrants”) to acquire 5,600 shares of the Company's common stock at an exercise price of $15.00 per share. The Aegis Warrants are identical to the 2017 Bridge Warrants except that the Aegis Warrants do not have anti-dilution protection. At the time of the Merger, the 2017 Bridge Notes were extinguished and replaced with convertible promissory notes (the “2017 New Bridge Notes I”) with an original principal amount of $1.2 million in the aggregate pursuant to an Exchange Agreement (the “Exchange Agreement”) entered into on the Closing Date. The 2017 New Bridge Notes I have an annual interest rate of 8.0% and are due and payable upon the earlier to occur of (i) October 1, 2017 or (ii) the closing of a Qualified Offering (as defined in the 2017 New Bridge Notes I). The 2017 New Bridge Notes I are convertible into shares of our common stock at an initial conversion price of $3.736329 per share, subject to adjustment, and may be convertible into shares of our preferred stock at the holder’s option if the Company does not complete a Qualified Offering (as defined in the 2017 New Bridge Notes I) by October 1, 2017. The Company may redeem the 2017 New Bridge Notes I at any time in cash upon payment of a 20% premium, or $240,000 . As the convertible promissory notes were convertible into the Company's common stock at a conversion rate lower than the fair market value of the common stock at the time of issuance, the Company recorded $989,000 as a beneficial conversion feature, which was recorded as a debt discount in the balance sheet. The discount will be amortized using the effective interest method through the first conversion date of the 2017 New Bridge Notes I. On August 28, 2017, these 2017 New Bridge Notes I were partially converted and the remaining were paid off, refer below for further discussion. Pursuant to the Exchange Agreement, the 2017 Bridge Warrants were canceled and replaced with new warrants to acquire 45,600 shares of our common stock (the “2017 New Bridge Warrants”). The initial exercise price of the 2017 New Bridge Warrants is $7.50 (subject to adjustments). If the Company completes a Qualified Offering (as defined in the 2017 New Bridge warrants), the exercise price of the 2017 New Bridge Warrants will become the lower of (i) $7.50 , or (ii) 110% of the per share offering price in the Qualified Offering, but in no event lower than $1.50 per share, which has been considered a down round provision. At issuance, the 2017 New Bridge Warrants had a fair value of $211,000 and were recorded as a debt discount to the related 2017 New Bridge Notes I, with the corresponding entry to additional paid in capital as the warrants were considered classified as equity in accordance with GAAP. As discussed in Note 2 of the accompanying unaudited condensed consolidated financial statements, the Company early adopted ASU 2017-11, which allowed the Company to treat the warrants as equity classified, despite the down round provision. 2017 New Bridge Note II. In connection with the Merger, on the Closing Date and pursuant to a Securities Purchase Agreement (the “Bridge Purchase Agreement”), the Company completed the sale of an aggregate of $800,000 of a convertible promissory note (the “2017 New Bridge Note II”). The Company received net proceeds of $721,000 from the sale of the 2017 New Bridge Note II, which will be used for working capital purposes. The 2017 New Bridge Note II has an annual interest rate of 8.0% and is due and payable upon the earlier to occur of (i) October 1, 2017 or (ii) the closing of a Qualified Offering (as defined in the 2017 New Bridge Note II). The 2017 New Bridge Note II is convertible into shares of our common stock at an initial conversion price of $3.736329 per share, subject to adjustment, and may be convertible into shares of our preferred stock at the holder’s option if the Company does not complete a Qualified Offering (as defined in the 2017 New Bridge Note II) by October 1, 2017. The Company may redeem the 2017 New Bridge Note II at any time in cash upon payment of a 20% premium, or $160,000 . As the 2017 New Bridge Note II was convertible into the Company's common stock at a conversion rate lower than the fair market value of the common stock at the time of issuance, the Company recorded $656,000 as a beneficial conversion feature, which was recorded as a debt discount in the balance sheet. The discount will be amortized using the effective interest method through the first conversion date of the 2017 New Bridge Note II. On August 28, 2017, this 2017 New Bridge Note II was partially converted and the remaining was paid off, refer below for further discussion. In connection with the bridge financing and the assumption of certain obligations by an entity controlled by Mark Rimer (a director of the Company), the Company issued to that entity warrants (the “Side Warrants”) to purchase an aggregate of 91,429 shares of the Company's common stock at an exercise price of $7.00 per share (subject to adjustment), with a fair value of $487,000 at the date of issuance. The Side Warrants have a term of 5 years and are exercisable as to 22,857 shares of the Company's common stock upon grant and as to 68,572 shares of the Company's common stock upon the entity’s performance of the assumed obligations. All performance obligations have been met and the Company has recorded a merger advisory expense of $73,000 and $487,000 related to the Side Warrants during the three and nine months ended September 30, 2017, respectively. In addition, upon the Company consummating one or more rounds of equity financing following July 1, 2017, with aggregate gross proceeds of at least $7 million , the Company will use a portion of the proceeds from such financing to repay the principal amount of the 2017 New Bridge Notes, together with any premium and interest. Conversion and Payment of the 2017 New Bridge Notes I and New Bridge Note II (collectively, the “New Bridge Notes”). On August 28, 2017, the Company completed an underwritten public offering (the “August 2017 Offering”) of 6,000 units consisting of one share of the Company’s Series B Preferred Stock and one warrant to purchase up to 400 shares of the Company's common stock at a combined public offering price of $1,000 per unit for gross proceeds of $6.0 million (see Note 10 - Stockholders' Equity). At the time of the closing of the August 2017 Offering, the aggregate amount due to the holders of the New Bridge Notes was $2,436,551 ( $2,000,000 in principal, $400,000 for a 20% redemption premium and $36,551 in accrued interest). Upon the closing of the August 2017 Offering, the Company made a cash payment of $1,536,551 to extinguish certain notes and the remaining $900,000 of the Company’s New Bridge Notes were converted into an aggregate of 359,999 shares of the Company's common stock (the “Note Conversion Shares”) at a conversion price of $2.50 per share and 359,999 warrants to purchase the Company's common stock (the “Note Conversion Warrants”). The Company issued the Note Conversion Warrants to the holders of the New Bridge Notes as consideration for their election to convert their New Bridge Notes into shares of the Company's common stock. The Company treated the $900,000 debt conversion as an induced conversion and determined that the fair value of the consideration given in the conversion exceeded the fair value of the debt pursuant to its original conversion terms by approximately $1.0 million . This amount was recorded as an expense included in loss on extinguishment of debt and induced conversion of convertible bridge notes in our unaudited condensed consolidated statements of operations. The Company also recorded a loss on extinguishment of debt of approximately $0.4 million related to the extinguishment of the $1,536,551 portion paid in cash, which was also recorded as an expense within the loss on extinguishment of debt and induced conversion of convertible bridge notes line in our unaudited condensed consolidated statements of operations. See Note 10 Stockholders Equity (Deficit) for discussion of the Note Conversion Warrants . Upon conversion and payment of the New Bridge Notes, all remaining debt discounts and debt issuance costs associated with the conversions were fully amortized to interest expense and debt discounts and debt issuance costs associated with the portion paid in cash were amortized to interest expense up through the payment date. During the three and nine months ended September 30, 2017, debt discounts and debt issuance costs amortized to interest expense were $1.8 million and $1.9 million , respectively. As of September 30, 2017, the outstanding convertible bridge notes balance was zero . |
ACCRUED EXPENSES
ACCRUED EXPENSES | 9 Months Ended |
Sep. 30, 2017 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES | ACCRUED EXPENSES. Accrued expenses consist of the following: September 30, 2017 December 31, 2016 Accrued expenses $ 1,323 $ 50 Accrued compensation 529 155 Accrued interest 20 495 $ 1,872 $ 700 |
CONTINGENCIES
CONTINGENCIES | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
CONTINGENCIES | CONTINGENCIES The Company is involved in legal proceedings related to matters, which are incidental to its business. The Company has also assumed a number of claims as a result of the Merger. See below for a discussion on these matters. The healthcare industry is subject to numerous laws and regulations of federal, state and local governments. These laws and regulations include, but are not necessarily limited to, matters such as licensure, accreditation, government healthcare program participation requirement, reimbursement for patient services and Medicare and Medicaid fraud and abuse. Government activity has increased with respect to investigations and allegations concerning possible violations of fraud and abuse statutes and regulations by healthcare providers. Violations of these laws and regulations could result in expulsion from government healthcare programs together with the imposition of significant fines and penalties, as well as significant repayments for patient services previously billed. Management believes that the Company is in compliance with fraud and abuse regulations, as well as other applicable government laws and regulations. While no material regulatory inquiries have been made, compliance with such laws and regulations can be subject to future government review and interpretation, as well as regulatory actions unknown or unasserted at this time. The outcome of legal proceedings and claims brought against us are subject to significant uncertainty. Therefore, although management considers the likelihood of such an outcome to be remote, if one or more of these legal matters were resolved against us in the same reporting period for amounts in excess of management’s expectations, our financial statements for such reporting period could be materially adversely affected. In general, the resolution of a legal matter could prevent us from offering our services or products to others, could be material to our financial condition or cash flows, or both, or could otherwise adversely affect our operating results. Claims assumed in the Merger The Company assumed a number of claims as a result of the Merger. In addition to the claims described below, we are delinquent on the payment of outstanding accounts payable for certain of our vendors and suppliers who have taken or have threatened to take legal action to collect such outstanding amounts. On February 25, 2016, the Board of Regents of the University of Nebraska (“UNMC”) filed a lawsuit against us in the District Court of Douglas County, Nebraska, for breach of contract and seeking recovery of $0.7 million owed by us to UNMC. A $0.4 million liability was recorded and is reflected in accrued expenses at December 31, 2016. We and UNMC entered into a settlement agreement dated February 6, 2017, which included, among other things, a mutual general release of claims, and our agreement to pay $0.4 million to UNMC in installments over a period of time. On September 8, 2017, we and UNMC entered into a First Amendment to the Settlement Agreement with quarterly payments in the amount of $25,000 due commencing on December 15, 2017 and ending on June 15, 2020 and a final payment of $100,000 due on or before September 15, 2020. A $0.4 million liability has been recorded and is reflected in accrued expenses at September 30, 2017. On April 13, 2016, Fox Chase Cancer Center (“Fox Chase”) filed a lawsuit against Transgenomic in the Court of Common Pleas of Philadelphia County, First Judicial District of Pennsylvania Civil Trial Division (the “Court of Common Pleas”), alleging, among other things, breach of contract, tortious interference with present and prospective contractual relations, unjust enrichment, fraudulent conversion and conspiracy and seeking punitive damages in addition to damages and other relief. This lawsuit relates to a license agreement Transgenomic entered into with Fox Chase in August 2000, as amended (the “License Agreement”), as well as the assignment of certain of Transgenomic's rights under the License Agreement to Integrated DNA Technologies, Inc. (“IDT”) pursuant to the Surveyor Kit Patent, Technology and Inventory Purchase Agreement Transgenomic entered into with IDT effective as of July 1, 2014 (the “IDT Agreement”). Pursuant to the terms of the IDT Agreement, Transgenomic agreed to indemnify IDT with respect to certain of the claims asserted in the Fox Chase proceeding. On July 8, 2016, the Court of Common Pleas sustained Transgenomic's preliminary objections to several of Fox Chase’s claims and dismissed the claims for tortious interference, fraudulent conversion, conspiracy, punitive damages and attorney’s fees. Accordingly, the case has been narrowed so that only certain contract claims and an unjust enrichment claim remained pending against Transgenomic. During June 2017, prior to the Merger, Transgenomic entered into a settlement agreement with Fox Chase (the “Agreement”) to pay $175,000 in three installments, which will resolve all outstanding claims in the litigation brought in April 2016 by Fox Chase against Transgenomic in the Court of Common Pleas of Philadelphia County (the “Action”). The case will remain pending with the Court until all settlement payments have been made to Fox Chase. On October 3, 2017, the final payment of $55,000 was paid to Fox Chase totaling $175,000 . Once received Fox Chase was obligated to cause the Action to be formally dismissed with prejudice. The dismissal is still pending as of November 15, 2017. Also, on July 13, 2017 the Company entered into an agreement with its co-Defendant, IDT, regarding the Company’s indemnity obligations to IDT for legal fees and expenses incurred in the Action pursuant to the terms of the IDT Agreement. The IDT Agreement provides for monthly payments of $27,800 from the Company to IDT, in the total amount of $139,000 , commencing on August 15, 2017 and concluding on December 15, 2017. A $0.2 million liability has been recorded and is reflected in accrued expenses at September 30, 2017. On June 23, 2016, the Icahn School of Medicine at Mount Sinai (“Mount Sinai”) filed a lawsuit against us in the Supreme Court of the State of New York, County of New York, alleging, among other things, breach of contract and, alternatively, unjust enrichment and quantum merit, and seeking recovery of $0.7 million owed by us to Mount Sinai for services rendered. We and Mount Sinai entered into a settlement agreement dated October 27, 2016, which included, among other things, a mutual general release of claims, and our agreement to pay approximately $0.7 million to Mount Sinai in installments over a period of time. A $0.7 million liability has been recorded and is reflected in accrued expenses at September 30, 2017. Effective as of October 31, 2017, we and Mount Sinai agreed to enter into a new settlement agreement to restructure these liabilities into a secured, long-term debt obligation of $0.4 million accruing interest at 10% with monthly principal and interest payments of $12,700 beginning in July 2018 and continuing over 48 months and to issue warrants in the amount of 24,900 shares, that are exercisable for common stock, on a 1-for- 1 basis, with an exercise price of $7.50 per share, exercisable on the date of issuance with a term of 5 years . The Company does not plan to apply to list the Warrants on the NASDAQ Capital Market, any other national securities exchange or any other nationally recognized trading system. On December 19, 2016, Todd Smith (“Smith”) filed a lawsuit against us in the District Court of Douglas County Nebraska, alleging breach of contract and seeking recovery of $2.2 million owed by us to Smith for costs and damages arising from a breach of our obligations pursuant to a lease agreement between the parties. On April 7, 2017, we entered into a settlement agreement with Smith related to the early termination of our lease for our Omaha, Nebraska facility. The agreement included, among other things, a mutual general release of claims, and our agreement to pay approximately $0.6 million to Smith in installments over a period of time. During the three and nine months ended September 30, 2017, the Company made payments totaling $0.4 million and a $0.2 million liability has been recorded and is reflected in accrued expenses at September 30, 2017. On February 21, 2017, XIFIN, Inc. (“XIFIN”) filed a lawsuit against us in the District Court for the Southern District of California alleging breach of written contract and seeking recovery of approximately $0.27 million owed by us to XIFIN for damages arising from a breach of our obligations pursuant to a Systems Services Agreement between us and XIFIN, dated as of February 22, 2013, as amended and restated on September 1, 2014. On April 5, 2017, the court clerk entered default against us. On May 5, 2017, XIFIN filed an application for entry of default judgment against us. During the three and nine months ended September 30, 2017, the Company made payments totaling $0.1 million and a $0.2 million liability has been recorded and is reflected in accrued expenses at September 30, 2017. We and Science Park Development Corporation (“SPDC”) entered into that certain Lease dated as of December 31, 2011, as modified by the First Amendment to Lease dated as of June 18, 2013, as further modified by a letter agreement dated as of February 2, 2015, as modified by the Second Amendment to Lease dated as of June 26, 2015 (the “ SPDC Lease”). In November 2016, SPDC alleged that we defaulted on our obligations under the SPDC Lease. Specifically, SPDC alleges that we failed to pay approximately $0.4 million in rental payments due under the SPDC Lease and that we vacated a portion of the leased premises in violation of the terms of the SPDC Lease. We and SPDC entered into a settlement agreement dated March 6, 2017, which included, among other things, a mutual general release of claims, and our agreement to pay approximately $0.4 million to SPDC in installments over a period of time. This liability has been recorded and is reflected in accrued expenses at September 30, 2017. We and Science Park are currently in negotiations to restructure the settlement agreement. CPA Global provides us with certain patent management services. On February 6, 2017, CPA Global claimed that we owe approximately $0.2 million for certain patent maintenance services rendered. CPA Global has not filed claims against us in connection with this allegation. During the three and nine months ended September 30, 2017, the Company made payments of less than $0.1 million and a liability of approximately $0.2 million has been recorded and is reflected in accrued expenses at September 30, 2017. On March 9, 2016, counsel for Edge BioSystems, Inc. (“EdgeBio”) sent a demand letter on behalf of EdgeBio to us in connection with the terms of that certain Asset Purchase Agreement dated September 8, 2015 (the “EdgeBio Agreement”). EdgeBio alleges, among other things, that certain customers of EdgeBio erroneously remitted payments to us, that such payments should have been paid to EdgeBio and that we failed to remit these funds to EdgeBio in violation of the terms of the EdgeBio Agreement. On September 13, 2016, we received a demand for payment letter from EdgeBio’s counsel alleging that the balance due to EdgeBio is approximately $0.1 million . On September 19, 2017 a summary of action from the Judicial District of New Haven, CT for a judgement of $113,000 was issued. A liability of approximately $0.1 million has been recorded and is reflected in accrued expenses at September 30, 2017 and we and EdgeBio are currently in discussions regarding settlement. On February 17, 2017, Jesse Campbell (“Campbell”) filed a lawsuit individually and on behalf of others similarly situated against us in the District Court for the District of Nebraska alleging we have a materially incomplete and misleading proxy relating to a potential merger and that the merger agreement’s deal protection provisions deter superior offers. As a result, he alleges that we have violated Sections 14(a) and 20(a) of the Exchange Act and Rule 14a-9 promulgated thereafter. Although we intend to defend the lawsuit, there can be no assurance regarding the ultimate outcome of this case. Given the uncertainty of litigation, the legal standards that must be met for, among other things, class certification and success on the merits, we are unable to estimate the amount of loss, or range of possible loss, at this time that may result from this action. In the event that a settlement is reached related to these matters, the amount of such settlement may be material to our results of operations and financial condition and may have a material adverse impact on our liquidity. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company's transaction with Precipio Diagnostics, LLC constitutes a reverse acquisition under Treas. Reg.§˜1.1502-75(d)(3). Consequently, the Company's portion of the year, prior to the transaction will not be included in the current year’s US federal consolidated income tax return, but instead filed in a separate short period tax return. Income tax expense for both the three months and nine months ended September 30, 2017 was zero as a result of recording a full valuation allowance against the deferred tax asset generated predominantly by net operating losses. We had no material interest or penalties during fiscal 2017 or fiscal 2016, and we do not anticipate any such items during the next twelve months. Our policy is to record interest and penalties directly related to uncertain tax positions as income tax expense in the condensed consolidated statements of operations. As a result of the merger, there was a change in ownership as defined in IRS § 382. Because of this change, use of a portion of the accumulated net operating losses and tax credit carryforwards will be eliminated and the remainder will be limited in future periods. Since the net deferred tax assets have a full valuation allowance recorded, any limitation generated from this calculation would not effect the current financial statements. |
STOCKHOLDERS' EQUITY (DEFICIT)
STOCKHOLDERS' EQUITY (DEFICIT) | 9 Months Ended |
Sep. 30, 2017 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS' EQUITY (DEFICIT) | STOCKHOLDERS’ EQUITY (DEFICIT) 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. In connection with the Merger, the Company effected a 1-for-30 reverse stock split of its common stock. This reverse stock split became effective on June 13, 2017 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 unaudited condensed consolidated financial statements have, where applicable, been adjusted retroactively to reflect this reverse stock split. Additionally, as a result of the Merger, the Company has recapitalized its stock. All historical preferred stock, common stock, restricted units, warrants and additional paid-in capital, including share and per share amounts, have been retroactively adjusted to reflect the equity structure of the combined company, including the effect of the Merger exchange ratio. Pursuant to the Merger Agreement, each outstanding unit of Precipio Diagnostics was exchanged for 10.2502 pre-reverse stock split shares of the Company's common stock. During 2017, restricted stock of zero and 59,563 shares were granted during the three and nine months ended September 30, 2017, none of which vested prior to the merger. Upon closing of the merger, all shares fully vested. During 2017, 64,593 shares were released to common stock. We recorded stock compensation expense of approximately $28,000 related to the restricted stock that vested during the nine months ended September 30, 2017. On the Closing Date, Precipio Diagnostics received 7,356,170 shares of Precipio common stock from the conversion of preferred stock, senior and junior debt, bridge notes and warrants. Also, certain advisors of Precipio Diagnostics received 321,821 shares of Precipio common stock related to services performed in connection with the Merger. The fair value of these advisory shares was $2.2 million at the date of the Merger and is included as a merger advisory fee expense in the accompanying financial statements. As part of the Merger, Precipio Diagnostics also received 200,081 shares of Precipio common stock that have not been issued yet. 135,000 of these shares are being held for future issuance to advisors pending completion of certain performance obligations. If these performance obligations are not met, the shares will remain with Precipio Diagnostics as part of the unissued pool. For any shares that remain unissued, it is the intent of the Company to allocate these to Precipio Diagnostics shareholders on a pro rata basis. Also, upon completion of the Merger, Transgenomic legacy stockholders had 1,255,119 shares of Precipio common stock outstanding. Upon the closing of the August 2017 Offering, the Company issued 359,999 shares of its common stock upon conversion of $900,000 of its New Bridge Notes (See Note 6 - Convertible Bridge Notes) and 1,735,419 shares of its common stock upon conversion of its Series A Senior stock (see below - Series A Senior Preferred Stock). Also, during the three months ended September 30, 2017, the Company issued 943,600 shares of its common stock in connection with conversions of its Series B Preferred Stock (see below - Series B Preferred Stock). Series A and Series B Preferred Stock. Prior to the Merger and under Precipio Diagnostics, the Company had outstanding preferred units of 367,299 for Series A and 412,806 for Series B as of December 31, 2016. These units have been recapitalized and are included in preferred stock. On the Closing Date, the outstanding preferred units for Series A and Series B, along with the related accumulated dividends, were converted into common shares of the Company. Preferred Stock. 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. Series A Senior Preferred Stock. In connection with the Merger, the Company filed a Certificate of Designation with the Secretary of State of the State of Delaware on June 29, 2017, designating 4,100,000 shares of the Company’s Preferred Stock, par value $0.01 per share, as Series A Senior Convertible Preferred Stock ("Series A Senior") and establishing the rights, preferences and privileges of the new preferred stock. Generally, the holders of the Series A Senior stock are entitled to vote as a single voting group with the holders of the Company's common stock, and the holders of the Series A Senior stock are generally entitled to that number of votes as is equal to the number of whole shares of the Company's common stock into which the Series A Senior stock may be converted as of the record date of such vote or consent. So long as the shares of Series A Senior stock are outstanding certain actions will require the separate approval of at least two-thirds of the Series A Senior stock, including: changes to the terms (requires three-fourths approval) of the Series A Senior stock, changes to the number of authorized shares of Series A Senior stock, issuing a series of preferred stock that is senior to the Series A Senior stock, changing the size of the board of directors, certain changes to the capital stock of the Company, bankruptcy proceedings and granting security interests in the Company’s assets. The Series A Senior stock will be convertible into the Company's common stock at any time at the then applicable conversion price. The initial conversion price for the Series A Senior stock issued in connection with the Merger and the other transactions described herein is $3.736329 , but will be subject to anti-dilution protections including adjustments for stock splits, stock dividends, other distributions, recapitalizations and the like. Additionally, each holder of the Series A Senior stock will have a right to convert such holder's Series A Senior stock into securities issued in any future private offering of the Company's securities at a 15% discount to the proposed price in such private offering. The Series A Senior stock will be entitled to an annual 8% cumulative payment in lieu of interest or dividends, payable in-kind for the first two years and in cash or in-kind thereafter, at the option of the Company. The Series A Senior stock also will be entitled to share in any dividends paid on the Company's common stock. As discussed in Note 3 - Reverse Merger, in connection with the Merger, the Company issued 1) to holders of certain Transgenomic secured indebtedness, 802,925 shares of Series A Senior stock in an amount equal to $3 million , 2) to holders of certain Precipio Diagnostic indebtedness, 802,920 shares of Series A Senior stock in an amount equal to $3 million and 3) to certain investors, 107,056 shares of Series A Senior stock in exchange for $400,000 in a private placement. We determined that there was a beneficial conversion feature in connection with the issuances of the Series A Senior stock since the conversion price of $3.736329 was at a discount to the fair market value of the Company's common stock at issuance date. The Series A Senior stock is non-redeemable and as a result, the Company recognized the full beneficial conversion feature in the amount of $5.2 million as a deemed dividend at the time of issuance. Upon the closing of the August 2017 Offering, all of the Company’s outstanding Series A Senior stock converted into an aggregate of 1,712,901 shares of the Company's common stock, at the existing conversion rate of one share of Common Stock for one share of Series A Senior stock (the “Conversion”). The Company also issued an aggregate of 22,518 shares of Series A Senior stock to these holders, which shares represented the Series A Preferred Payment (as defined in the Company’s Certificate of Designation of Series A Senior Convertible Preferred Stock) accrued through the date of Conversion and immediately converted into an aggregate of 22,518 shares of the Company's common stock in connection with the Conversion. The Company issued warrants (the “Series A Conversion Warrants”) to purchase an aggregate of 856,446 shares of Common Stock to these former holders of Series A Senior stock as consideration for the conversion of their shares of Series A Senior stock into shares of Common Stock. The Company treated this as an induced conversion of the Series A Senior stock. At the date of the Conversion, the fair value of the Series A Conversion Warrants was approximately $1.4 million . The Company determined that the $1.4 million represented the excess fair value of all consideration transferred to the Series A Senior holders as compared to the fair value of the Series A Senior stock pursuant to its original conversion terms. The $1.4 million was recorded as a deemed dividend at the time of the Conversion. The Series A Preferred Payment of 22,518 shares of Series A Senior stock had a fair value of approximately $84,000 at the time of issuance and was recorded as a deemed dividend on preferred shares. At September 30, 2017, the Company had zero shares of Series A Senior outstanding. Series B Preferred Stock. On August 28, 2017, the Company completed the August 2017 Offering of 6,000 units consisting of one share of the Company’s Series B Preferred Stock, par value $0.01 per share (“Series B Preferred Stock”), which is convertible into 400 shares of common stock, par value $0.01 per share, at a conversion price of $2.50 per share, and one warrant to purchase up to 400 shares of common stock (the “August 2017 Offering Warrants”) at a combined public offering price of $1,000 per unit. The August 2017 Offering included the sale of 280,000 August 2017 Offering Warrants pursuant to the over-allotment option exercised by Aegis Capital Corp. (“Aegis”) for $0.01 per share or $2,800 . The Offering was completed pursuant to the terms of an underwriting agreement dated as of August 22, 2017 (the “Underwriting Agreement”) between the Company and Aegis. The net proceeds received by the Company from the sale of the units was approximately $5.0 million , after deducting underwriting discounts and estimated offering expenses, which have been recorded as stock issuance costs within additional paid in capital. For purposes of recording this transaction, the gross proceeds of $6.0 million from the August 2017 Offering were allocated to the Series B Preferred Stock and the August 2017 Offering Warrants based on their relative fair values at the date of issuance. The portion allocated to the Series B Preferred stock was $3.1 million with the remaining $2.9 million allocated to the August 2017 Offering Warrants. As a result of the allocation of the proceeds, we determined that there was a beneficial conversion feature in connection with the issuance of the Series B Preferred Stock since the calculated effective conversion price was at a discount to the fair market value of the Company's common stock at issuance date. The Company recognized the full beneficial conversion feature in the amount of $2.3 million as a deemed dividend at time of issuance. The conversion price of the Series B Preferred Stock contains a down round feature. As discussed in Note 2 of the accompanying unaudited condensed consolidated financial statements, the Company early adopted ASU 2017-11, which allowed the Company to treat the preferred stock as equity classified, despite the down round provision. The Company will recognize the effect of the down round feature when it is triggered. At that time, the effect would be treated as a deemed dividend and as a reduction of income available to common shareholders in our basic earnings per share calculation. During the three and nine months ended September 30, 2017, 2,359 shares of Series B Preferred Stock were converted into 943,600 shares of our common stock. At September 30, 2017, the Company had 3,641 shares of Series B Preferred Stock outstanding. Common Stock Warrants. Prior to the Merger, in connection with the line of credit with Connecticut Innovations, the Company issued warrants to purchase 8,542 Series A Preferred shares of the Company, which were classified as an equity warrant, at an exercise price of $2.93 per unit, subject to adjustments as defined in the warrant agreement. The warrants were valued at $6,000 at the date of the grant utilizing the Black-Sholes model (volatility 40% , expected life 7 years , and risk free rate .36% ). The value of the warrants was treated as a debt discount. At the Merger date, the warrants were exercised and then converted into shares of Precipio common stock. In connection with the Webster Bank agreement, the Company issued 7 years warrants to purchase 20,000 Series B Preferred shares of the Company. At the Merger date, Webster Bank declined to exercise their warrants and, per the terms of the warrant agreement, the warrants were retired. In March 2016, the Company entered into a redemption and exchange agreement with certain member's relating to their 275,237 Preferred A Units and 208,087 Preferred B Units. Under the terms of the agreement, the unit holders would exchange their units in the Company for the issuance of debt. The aggregate purchase price per the agreement was the member's initial investment of $750,000 for Preferred A Units and $965,000 for Preferred B Units, along with a preferred return of 8% , recorded as a dividend in the amount of $432,716 . In addition to the debt issued as consideration for the members' preferred units, the Company also issued common warrant units, which allows the holders to collectively purchase common units of the Company, representing approximately 60% of the Company at the time of exercise. At the time of issuance, this represented approximately 1,958,204 common units. The common warrant units had a $0.00 exercise price with a ten year expiration date. The common warrant units were classified as equity awards and the fair value upon issuance was calculated utilizing a discounted cash flow analysis to value the Company's equity and an option pricing method to allocate the value of the equity. The fair value of the warrants was determined directly utilizing the option pricing method as the exercise price was $0.00. The aggregate value of the common warrant units was $1,421,738 , which was considered a deemed dividend. At the time of the Merger, these warrants were converted into 1,958,204 shares of Precipio common stock. Warrants Assumed in Merger At the time of the Merger, Transgenomic had a number of outstanding warrants related to various financing transactions that occurred between 2013-2016. Details related to year issued, expiration date, amount of underlying common shares and exercise price are included in the table below. 2017 New Bridge Warrants During the nine months ended September 30, 2017, prior to the Merger, Transgenomic completed the sale of the 2017 Bridge Notes in the amount of $1.2 million and the issuance of the 2017 Bridge Warrants to acquire 40,000 shares of the Company's common stock at an exercise price of $15.00 per share, subject to anti-dilution protection. Aegis acted as placement agent for the bridge financing and received Aegis Warrants to acquire 5,600 shares of Transgenomic common stock at an exercise price of $15.00 per share. The Aegis Warrants are identical to the 2017 Bridge Warrants except that the Aegis Warrants do not have anti-dilution protection. (See Note 5 - Convertible Bridge Notes). In connection with the Merger, the holders of the 2017 Bridge Notes, the 2017 Bridge Warrants and the Aegis Warrants agreed to exchange the 2017 Bridge Notes, the 2017 Bridge Warrants and the Aegis Warrants for 2017 New Bridge Notes and the 2017 New Bridge Warrants to acquire 45,600 shares of our common stock. (See Note 6 - Convertible Bridge Notes). The initial exercise price of the 2017 New Bridge Warrants was $7.50 (subject to adjustments). These warrants had a provision that if the Company completed a Qualified Offering (as defined in the 2017 New Bridge Warrants), the exercise price of the 2017 New Bridge Warrants would become the lower of (i) $7.50 or (ii) 110% of the per share offering price in the Qualified Offering, but in no event lower than $1.50 per share. As a result of the Series B Preferred Stock issued in the August 2017 Offering, the exercise price of the 2017 New Bridge Warrants was adjusted to $2.75 per share. At issuance, the 2017 New Bridge Warrants had a fair value of $211,000 and were recorded as a debt discount to the related 2017 New Bridge Notes I, with the corresponding entry to additional paid in capital as the warrants were considered classified as equity in accordance with GAAP. At the time the exercise price was adjusted, due to the down round provision, the Company calculated the fair value of the down round provision on the warrants to be approximately $12,000 and recorded this as deemed dividend. Side Warrants In connection with the bridge financing and the assumption of certain obligations by an entity controlled by Mark Rimer (a director of the Company), the Company issued to that entity Side Warrants to purchase an aggregate of 91,429 shares of the Company's common stock at an exercise price of $7.00 per share (subject to adjustment), with a fair value of $487,000 at the date of issuance. The Side Warrants have a term of 5 years and are exercisable as to 22,857 shares of the Company's common stock upon grant and as to 68,572 shares of the Company's common stock upon the entity’s performance of the assumed obligations. All performance obligations have been met and the Company has recorded merger advisory expense of $73,000 and $487,000 related to the Side Warrants during the three and nine months ended September 30, 2017, respectively. August 2017 Offering Warrants In connection with the August 2017 Offering, the Company issued 2,680,000 warrants at an exercise price of $3.00 , which contains a down round provision. The August 2017 Offering Warrants were exercisable immediately and expire 5 years from date of issuance. The terms of the August 2017 Offering Warrants prohibit a holder from exercising its August 2017 Offering Warrants if doing so would result in such holder (together with its affiliates) beneficially owning more than 4.99% of the Company’s outstanding shares of common stock after giving effect to such exercise, provided that, at the election of a holder and notice to the Company, such beneficial ownership limitation may be increased to 9.99% of the Company’s outstanding shares of common stock after giving effect to such exercise. Representative Warrants In accordance with the underwriting agreement for the August 2017 Offering, the underwriter purchased 60,000 warrants, with an exercise price of $3.125 , for an aggregate price of $100 . The Representative Warrants are exercisable beginning one year after the date of the prospectus for the August 2017 Offering and expiring on a date which is no more than five years from the date of the prospectus for the August 2017 Offering. The fair value of the warrants at date of issuance of approximately $113,000 was treated as a stock issuance cost and recorded as a reduction to additional paid in capital. Series A Conversion Warrants The Company issued Series A Conversion Warrants to purchase an aggregate of 856,446 shares of the Company's common stock at an exercise price of $10.00 per share, which have a term of 5 years . At the time of issuance, the Series A Conversion Warrants had a fair value of $1.4 million and, as discussed in the Series A Senior Preferred Stock section above, these were issued and recorded as deemed dividends. Note Conversion Warrants Upon the closing of the August 2017 Offering, $900,000 of the Company’s New Bridge Notes were converted into an aggregate of 359,999 shares of the Company's common stock and 359,999 Note Conversion Warrants. The Note Conversion Warrants have an exercise price of $3.00 per share and a five year term. The exercise price contains a down round provision. The conversion of the Company's New Bridge Notes was treated as an induced conversion and at the date of the conversion the Company recorded an expense of approximately $1.0 million which is included in loss on extinguishment of debt and induced conversion of convertible bridge notes in our unaudited condensed consolidated statements of operations (See Note 6 - Convertible Bridge Notes). The following represents a summary of the warrants outstanding as of September 30, 2017: Issue Year Expiration Underlying Shares Exercise Price Warrants Assumed in Merger (1) 2013 January 2018 23,055 $270.00 (2) 2014 April 2020 12,487 $120.00 (3) 2015 February 2020 23,826 $67.20 (4) 2015 December 2020 4,081 $49.80 (5) 2015 January 2021 38,733 $36.30 (6) 2016 January 2021 29,168 $36.30 Warrants (7) 2017 June 2022 45,600 $2.75 (8) 2017 June 2022 91,429 $7.00 (9) 2017 August 2022 2,680,000 $3.00 (10) 2017 August 2022 60,000 $3.125 (11) 2017 August 2022 856,446 $10.00 (12) 2017 August 2022 359,999 $3.00 4,224,824 (1) These warrants were issued in connection with an offering which was completed in January 2013. (2) These warrants were issued in connection with a private placement which was completed in October 2014. (3) These warrants were issued in connection with an offering which was completed in February 2015. (4) These warrants were issued in connection with an offering which was completed in July 2015. (5) These warrants were originally issued in connection with an offering in July 2015, and were amended in connection with an offering which was completed in January 2016. (6) These warrants were issued in connection with an offering which was completed in January 2016. (7) These warrants were issued in connection with the Merger and are the 2017 New Bridge Warrants discussed above. (8) These warrants were issued in connection with the Merger and are the Side Warrants discussed above. (9) These warrants were issued in connection with the August 2017 Offering and are the August 2017 Offering Warrants discussed above. (10) These warrants were issued in connection with the August 2017 Offering and are the Representative Warrants discussed above. (11) These warrants were issued in connection with the conversion of our Series A Senior stock, at the time of the closing of the August 2017 Offering, and are the Series A Conversion Warrants discussed above. (12) These warrants were issued in connection with the conversion of convertible bridge notes, at the time of the closing of the August 2017 Offering, and are the Note Conversion Warrants discussed above. |
FAIR VALUE
FAIR VALUE | 9 Months Ended |
Sep. 30, 2017 | |
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 condensed 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. Common Stock Warrant Liabilities. Certain of our issued and outstanding warrants to purchase shares of common stock do not qualify to be treated as equity and, accordingly, are recorded as a liability. 2016 Warrant Liability The Company assumed the 2016 Warrant Liability in the Merger and it represents the fair value of Transgenomic warrants issued in January 2016, of which, 25,584 warrants remain outstanding as of September 30, 2017. 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 condensed consolidated Statement of Operations. The 2016 Warrant Liability is considered a Level 3 financial instrument and is valued using a binomial lattice simulation model. This method is well suited to valuing options with non-standard features. Assumptions and inputs used in the valuation of the common stock warrants include: our equity value, which was estimated using our stock price of $2.16 as of September 30, 2017; volatility of 137% ; and a risk-free interest rate of 1.20% . During the three and nine months ended September 30, 2017, the changes in the fair value of the liability measured using significant unobservable inputs (Level 3) were comprised of the following: Dollars in Thousands For the Three Months Ended September 30, 2017 Beginning balance at July 1 $ 618 Additions - liability assumed in the Merger — Total (gains) or losses: Recognized in earnings — Balance at September 30 $ 618 Dollars in Thousands For the Nine Months Ended September 30, 2017 Beginning balance at January 1 $ — Additions - liability assumed in the Merger 615 Total (gains) or losses: Recognized in earnings 3 Balance at September 30 $ 618 |
STOCK OPTIONS
STOCK OPTIONS | 9 Months Ended |
Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK OPTIONS | STOCK OPTIONS Stock Options. The Company's 2006 Equity Incentive Plan (the "2006 Plan") was terminated as to future awards on July 12, 2016. The Company's 2017 Stock Option and Incentive Plan (the "2017 Plan") was adopted by the Company's stockholders on June 5, 2017 and will expire on June 5, 2027. The following table summarizes stock option activity under our plans during the nine months ended September 30, 2017 : Number of Options Weighted-Average Exercise Price Outstanding at January 1, 2017 24,600 $ 107.83 Granted 225,332 1.87 Forfeited (13,044 ) 103.13 Outstanding at September 30, 2017 236,888 $ 7.30 Exercisable at September 30, 2017 10,284 $ 121.97 As of September 30, 2017 , there were 236,590 options that were vested or expected to vest with an aggregate intrinsic value of approximately one hundred thousand with a remaining weighted average contractual life of 9.9 years. The weighted-average grant date fair values, based on the Black-Scholes option model, of options granted during the nine months ended September 30, 2017 was $1.63 . During the three and nine months ended both September 30, 2017 and 2016, we recorded compensation expense for all stock awards of less than $0.1 million within operating expense. As of September 30, 2017 , the unrecognized compensation expense related to unvested stock awards was $0.4 million , which is expected to be recognized over a weighted-average period of 3.8 years . Stock Appreciation Rights ( “ SARs ” ) As of September 30, 2017 , zero SARs shares were outstanding. During the nine months ended September 30, 2017, the SARs liability decreased approximately $1,000 and at September 30, 2017, no liability was recorded in accrued expenses since there were no shares outstanding. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS Debt Settlement Agreements On October 31, 2017, the Company entered into a Debt Settlement Agreement (the “Settlement Agreement”) with certain of its accounts payable vendors (the “Creditors”) pursuant to which the Creditors agreed to a reduction of approximately $5.0 million in currently due vendor liabilities. The Company and the Creditors agreed to restructure these liabilities into approximately $2.5 million in secured, long-term vendor obligations with payments beginning in July 2018 and continuing over 48 months . In connection with the settlement, the Company agreed to issue to certain of the Creditors warrants (the “Creditor Warrants”) to purchase approximately 86,000 shares of the Company’s common stock at an exercise price of $7.50 per share. The Company also entered into a Security Agreement (the “Security Agreement”), dated October 31, 2017, with a collateral agent for the Creditors, pursuant to which the Company granted to the collateral agent, for the benefit of the Creditors, a security interest in certain property of the Company to secure its obligations under the Settlement Agreement. The Creditor Warrants have a per share exercise price of $7.50 , are exercisable on the date of issuance and will expire five years from the date of issuance. Issuance of preferred stock and warrants On November 2, 2017, the Company entered into a Placement Agency Agreement (the “Placement Agreement”) with Aegis Capital Corp. for the sale on a reasonable best efforts basis of 2,748 units, each consisting of one share of the Company’s Series C Convertible Preferred Stock, par value $0.01 per share (the “Series C Preferred Stock”), convertible into a number of shares of the Company’s common stock equal to $1,000 divided by $1.40 and warrants to purchase up to 1,962,857 shares of common stock with an exercise price of $1.63 per share (the “Warrants”) at a combined offering price of $1,000 per unit, in a registered direct offering (the “Series C Preferred Offering”). The Series C Preferred Stock includes a beneficial ownership blocker but has no dividend rights (except to the extent dividends are also paid on the common stock). The securities comprising the units are immediately separable and were issued separately. The gross proceeds to the Company from the sale of the Series C Preferred Stock and Warrants, before deducting the placement agent fee and other estimated offering expenses payable by the Company and assuming no exercise of the Warrants, were $2,748,000 . The Company expects to use the net proceeds of the offering for general corporate purposes, including, but not limited to, growth of the Company’s sales force and business development team, progression of the Company’s product development and working capital. The offering closed on November 9, 2017. The Series C Preferred Offering required the Company to adjust downward the exercise and conversion prices of various warrants and Series B Preferred Stock that were outstanding at the time of the closing of the Series C Preferred Offering due to the down round provisions contained in certain of the Company's warrants and Series B Preferred Stock. |
SUMMARY OF SIGNIFICANT ACCOUN20
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation. The accompanying condensed consolidated financial statements are presented in conformity with GAAP. We have evaluated events occurring subsequent to September 30, 2017 for potential recognition or disclosure in the condensed consolidated financial statements and concluded that, other than what is disclosed in Note 13 - Subsequent Events, there were no other subsequent events that required recognition or disclosure. The condensed consolidated balance sheet as of December 31, 2016 was derived from our audited balance sheet as of that date. There has been no change in the balance sheet from December 31, 2016. The accompanying condensed consolidated financial statements as of and for the three and nine months ended September 30, 2017 and 2016 are unaudited and reflect all adjustments (consisting of only normal recurring adjustments) that are, in the opinion of management, necessary for a fair presentation of the financial position and operating results for the interim periods. These unaudited condensed consolidated financial statements and notes should be read in conjunction with the audited financial statements and notes thereto of Precipio Diagnostics for the year ended December 31, 2016 contained in our current report on Form 8-K/A, filed with the Securities and Exchange Commission (the “SEC”) on July 31, 2017. The results of operations for the interim periods presented are not necessarily indicative of the results for fiscal year 2017. |
Principles of Consolidation | Principles of Consolidation. The condensed consolidated financial statements include the accounts of Precipio, Inc. and our wholly owned subsidiary. All inter-company balances and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates. The preparation of condensed 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. Actual results could differ from the estimates and assumptions used in preparing these condensed consolidated financial statements. |
Risks and Uncertainties | Risks and Uncertainties. Certain risks and uncertainties are inherent in our day-to-day operations and in the process of preparing our financial statements. The more significant of those risks are presented below and throughout the notes to the unaudited condensed consolidated financial statements. |
Fair Value | Fair Value. Unless otherwise specified, book value approximates fair value. The common stock warrant liability is recorded at fair value. |
Cash and Cash Equivalents and Other Current Assets | Cash and Cash Equivalents and Other Current Assets. Cash and cash equivalents include cash and investments with original maturities at the date of acquisition of three months or less. |
Concentrations of Cash | Concentrations of Risk. From time to time, we may maintain a cash position with financial institutions in amounts that exceed Federal Deposit Insurance Corporation insured limits. |
Goodwill | Goodwill Goodwill represents the excess of the purchase price over the fair value of identifiable net assets of the business acquired. See Note 3 - Reverse Merger for the amount recorded. Goodwill is tested for impairment annually. We perform this impairment analysis during the fourth quarter of each year or when a significant event occurs that may indicate that the assets might be impaired. In assessing goodwill for impairment, the Company has the option to assess qualitative factors to determine whether events or circumstances indicate that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, for which the consolidated Company is considered one reporting unit. If this is the case, then performing the quantitative goodwill impairment test is unnecessary. An entity can choose not to perform a qualitative assessment for any or all of its reporting units, and proceed directly to the use of the quantitative impairment test. In assessing qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the relevant events and circumstances that may impact the fair value and the carrying amount of a reporting unit are assessed. The identification of relevant events and circumstances and how these may impact a reporting unit’s fair value or carrying amount involve significant judgments by management. These judgments include the consideration of macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, events which are specific to the company, and trends in the market price of our common stock. Each factor is assessed to determine whether it impacts the impairment test positively or negatively, and the magnitude of any such impact. During the three months ended September 30, 2017, the Company experienced a decline in its share price and a significant reduction in its market capitalization, as such the Company determined that an assessment of goodwill should be performed using the qualitative approach described above. Based on the qualitative assessment, the Company concluded that it was more likely than not that the fair value of the Company was less than its carry value. While there were positive qualitative factors discovered during the qualitative analysis, the instability of the market price of the Company’s common stock and the decline in revenues were significant adverse factors that directed a full assessment. In estimating fair value, the Company utilized the market capitalization to estimate the fair value. The impairment test performed by the Company indicated that the estimated fair value of the Company was less than its carrying amount. |
Intangible Assets | Intangibles We review our amortizable long-lived assets for impairment annually or 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 value of the asset to the carrying amount of the asset (group). There were no impairment charges during the nine months ended September 30, 2017. In-process research and development (“IPR&D”) represents the fair value assigned to research and development assets that were not fully developed at the date of the Merger. Until the IPR&D projects are completed, the assets are accounted for as indefinite-lived intangible assets and subject to impairment testing. For the nine months ended September 30, 2017, there was no impairment of IPR&D. |
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 awards as of September 30, 2017 had vesting periods of up to four years from the date of grant. None of the awards outstanding at September 30, 2017 are subject to performance or market-based vesting conditions. |
Net Sales Recognition | Net Sales Recognition. Revenue is realized and earned when all of the following criteria are met: • Persuasive evidence of an arrangement exists; • Delivery has occurred or services have been rendered; • The seller’s price to the buyer is fixed or determinable; and • Collectability is reasonably assured. In our New Haven, Connecticut laboratory, we primarily recognize revenue for services rendered upon completion of the testing process. Net patient service revenue is reported at the estimated net realizable amounts from patients, third-party payors and others for services rendered, including retroactive adjustment under reimbursement agreements with third-party payors. Revenue under third-party payor agreements is subject to audit and retroactive adjustment. Provisions for third-party payor settlements are provided in the period in which the related services are rendered and adjusted in the future periods, as final settlements are determined. In our Omaha, Nebraska laboratory, we perform services on a project by project basis. When we receive payment in advance, we initially defer the revenue and recognize it when we deliver the service. These projects typically do not extend beyond one year. |
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. |
Beneficial Conversion Feature | Beneficial Conversion Features. The intrinsic value of a beneficial conversion feature (“BCF”) inherent to a convertible note payable, which is not bifurcated and accounted for separately from the convertible note payable and may not be settled in cash upon conversion, is treated as a discount to the convertible note payable. This discount is amortized over the period from the date of issuance to the first conversion date using the effective interest method. If the note payable is retired prior to the end of its contractual term, the unamortized discount is expensed in the period of retirement to interest expense. In general, the BCF is measured by comparing the effective conversion price, after considering the relative fair value of detachable instruments included in the financing transaction, if any, to the fair value of the common shares at the commitment date to be received upon conversion. Deemed dividends are also recorded for the intrinsic value of conversion options embedded in preferred shares based upon the differences between the fair value of the underlying common stock at the commitment date of the transaction and the effective conversion price embedded in the preferred shares. When the preferred shares are non-redeemable the BCF is fully amortized into additional paid-in capital and preferred discount. If the preferred shares are redeemable, the discount is amortized from the commitment date to the first conversion date. |
Loss Per Share | Loss Per Share. Basic loss per share is calculated based on the weighted-average number of common shares outstanding during each period. Diluted loss per share includes shares issuable upon exercise of outstanding stock options, warrants or conversion rights that have exercise or conversion prices below the market value of our common stock. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements. In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers and has subsequently issued supplemental and/or clarifying ASUs (collectively “ASC 606”). ASC 606 outlines a five-step framework that intends to clarify the principles for recognizing revenue and eliminate industry-specific guidance. In addition, ASC 606 revises current disclosure requirements in an effort to help financial statement users better understand the nature, amount, timing, and uncertainty of revenue that is recognized. ASC 606 will be effective for our annual reporting period beginning on January 1, 2018, including interim periods within that year. ASC 606 may be applied either retrospectively to each prior reporting period presented or use the modified retrospective transition method with the cumulative effect of initial adoption recognized at the date of initial application. We expect to apply the new standard using the modified retrospective method upon its adoption date on January 1, 2018. Under the modified retrospective method, we will recognize the cumulative effect of initially applying the new revenue standard as an adjustment to the opening balance of retained earnings. The comparative information will not be restated and will continue to be reported under the accounting standards in effect for those periods. Implementation steps we are taking include reviewing our current accounting policies and practices to identify potential differences that would result from the application of this standard, determining key factors to recognize revenue as prescribed by the new standard that may be applicable to each of our business segments, analyzing our current portfolio of business contracts including our third-party payor contracts and evaluating our historical accounting policies and practices to identify potential differences in applying the new guidance. We anticipate that our evaluation will include the related qualitative disclosures regarding the potential impact of the effects of the accounting policies we expect to apply and a comparison to our current revenue recognition policies. We expect to complete this process prior to the filing of, and make disclosures in, our Annual Report on Form 10-K for the year ended December 31, 2017. Based on our evaluation so far, we believe there will be no significant changes required to our business processes, systems and controls to effectively report revenue recognition under the new standard. Adoption of the new standard is not expected to materially change the timing or amount of revenue recognized in our Consolidated Financial Statements. In February 2016, the FASB issued ASU No. 2016-02, Leases. The new standard amends the recognition of lease assets and lease liabilities by lessees for those leases currently classified as operating leases and amends disclosure requirements associated with leasing arrangements. The new standard is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2018. Early adoption is permitted. The new standard must be adopted using a modified retrospective transition, and provides for certain practical expedients. Transition will require application of the new guidance at the beginning of the earliest comparative period presented. We are currently assessing the impact that the adoption of this ASU will have on our consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The new standard simplifies several aspects related to the accounting for share-based payment transactions, including the accounting for income taxes, statutory tax withholding requirements, forfeitures and classification on the statement of cash flows. This guidance is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2016. The Company adopted ASU No. 2016-09 as of January 1, 2017. The adoption of this guidance does not have a material effect on the Company’s financial position and results of operations. In August 2016, FASB issued ASU No. 2016-15 , Classification of Certain Cash Receipts and Cash Payments. ASU No. 2016-15 eliminates the diversity in practice related to the classification of certain cash receipts and payments in the statement of cash flows by adding or clarifying guidance on eight specific cash flow issues. ASU No. 2016-15 is effective for fiscal years beginning after December 15, 2017, and for interim periods within that fiscal year. We do not believe ASU No. 2016-15 will have a material effect on our financial position and results of operations. In January 2017, FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. ASU No. 2017-01 adds guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The new guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company does not believe ASU No. 2017-01 will have a material effect on its financial position and results of operations. In January 2017, FASB issued ASU No. 2017-04, Intangibles — Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, which removes Step 2 from the goodwill impairment test. It is effective for annual and interim periods beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment test performed with a measurement date after January 1, 2017. The Company has adopted this standard and, as discussed above, performed interim impairment testing of goodwill during the three months ended September 30, 2017 which resulted in the Company recording a goodwill impairment charge of $1.0 million . In July 2017, FASB issued ASU No. 2017-11, Earning Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815), which was issued in two parts, Part I, Accounting for Certain Financial Instruments with Down Round Features and Part II, Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception. Part I of ASC No. 2017-11 addresses the classification analysis of certain equity-linked financial instruments (or embedded features) with down round features. When determining whether certain financial instruments should be classified as liabilities or equity instruments, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. The amendments also clarify existing disclosure requirements for equity-classified instruments. As a result, a freestanding equity-linked financial instrument (or embedded conversion option) no longer would be accounted for as a derivative liability at fair value as a result of the existence of a down round feature. For freestanding equity classified financial instruments, the amendments require entities that present earnings per share (EPS) in accordance with Topic 260 to recognize the effect of the down round feature when it is triggered. That effect is treated as a dividend and as a reduction of income available to common shareholders in basic EPS. The amendments in Part II of ASU 2017-11 recharacterize the indefinite deferral of certain provisions of Topic 480 that now are presented as pending content in the codification, to a scope exception. Part II amendments do not have an accounting effect. The ASU 2017-11 is effective for annual and interim periods beginning after December 15, 2018, with early adoption permitted. The Company has early adopted this standard as of January 1, 2017 with the only impact being that the warrants with down round provisions are classified within equity. (See Note 6 - Convertible Bridge Notes and Note 10 - Stockholders' Equity). |
REVERSE MERGER (Tables)
REVERSE MERGER (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Business Combinations [Abstract] | |
Schedule of Business Acquisitions | The following table sets forth an allocation of the purchase consideration to the identifiable tangible and intangible assets of Transgenomic, the accounting acquiree, based on fair values as of the Closing Date with the excess recorded as goodwill: (dollars in thousands) Current and other assets $ 419 Property and equipment 29 Goodwill 13,832 Other intangible assets (1) 21,100 Total assets 35,380 Current liabilities 13,604 Other liabilities 174 Total liabilities 13,778 Net assets acquired $ 21,602 (1) Other intangible assets consist of: (dollars in thousands) Acquired technology $ 18,990 Customer relationships 250 Non-compete agreements 30 Trademark and trade name 40 Backlog 200 In-process research and development 1,590 Total intangibles $ 21,100 The preliminary estimated purchase consideration based on the value of the equity of Transgenomic, the accounting acquiree, is as follows: (dollars in thousands) Legacy Transgenomic common stock $ 6,088 Fair value of preferred stock converted to common stock 49 Fair value of debt converted to common stock 2,398 Fair value of debt converted to preferred stock 9,796 Fair value of existing bridge notes 1,275 Fair value of warrants 1,996 Purchase consideration $ 21,602 |
Business Acquisition, Pro Forma Information | The following unaudited pro forma information presents the Company's financial results as if the acquisition of Transgenomic had occurred on January 1, 2016: Dollars in thousands, except per share amounts Nine months ended September 30, 2017 2016 Net sales $ 1,742 $ 2,605 Net loss available to common stockholders (22,980 ) (15,838 ) Loss per common share $ (3.40 ) $ (2.48 ) |
INTANGIBLES (Tables)
INTANGIBLES (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | In conjunction with the Merger, we recorded intangible assets of $21.1 million . As of September 30, 2017 our intangible assets consisted of the following: Dollars in Thousands September 30, 2017 Cost Accumulated Amortization Net Book Value Technology $ 18,990 $ 237 $ 18,753 Customer relationships 250 21 229 Backlog 200 50 150 Covenants not to compete 30 8 22 Trademark 40 5 35 IPR&D 1,590 — 1,590 $ 21,100 $ 321 $ 20,779 Estimated Useful Life Technology 20 years Customer relationships 3 years Backlog 1 year Covenants not to compete 1 year Trademark 2 years |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of debt | Long-term debt consists of the following: Dollars in Thousands September 30, 2017 December 31, 2016 Senior Notes $ — $ 3,270 Senior Note debt issuance costs — (9 ) Junior Notes — 584 Connecticut Innovations - line of credit — 162 Department of Economic and Community Development (DECD) — 243 DECD debt issuance costs — (30 ) Webster Bank — 328 Webster Bank debt discounts and issuance costs — (26 ) Convertible promissory notes 42 — Total long-term debt 42 4,522 Current portion of long-term debt (42 ) (395 ) Long-term debt, net of current maturities $ — $ 4,127 |
ACCRUED EXPENSES (Tables)
ACCRUED EXPENSES (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Payables and Accruals [Abstract] | |
Accrued expenses | Accrued expenses consist of the following: September 30, 2017 December 31, 2016 Accrued expenses $ 1,323 $ 50 Accrued compensation 529 155 Accrued interest 20 495 $ 1,872 $ 700 |
STOCKHOLDERS' EQUITY (DEFICIT)
STOCKHOLDERS' EQUITY (DEFICIT) (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Stockholders' Equity Note [Abstract] | |
Schedule of stockholders' equity, including warrants and rights | The following represents a summary of the warrants outstanding as of September 30, 2017: Issue Year Expiration Underlying Shares Exercise Price Warrants Assumed in Merger (1) 2013 January 2018 23,055 $270.00 (2) 2014 April 2020 12,487 $120.00 (3) 2015 February 2020 23,826 $67.20 (4) 2015 December 2020 4,081 $49.80 (5) 2015 January 2021 38,733 $36.30 (6) 2016 January 2021 29,168 $36.30 Warrants (7) 2017 June 2022 45,600 $2.75 (8) 2017 June 2022 91,429 $7.00 (9) 2017 August 2022 2,680,000 $3.00 (10) 2017 August 2022 60,000 $3.125 (11) 2017 August 2022 856,446 $10.00 (12) 2017 August 2022 359,999 $3.00 4,224,824 (1) These warrants were issued in connection with an offering which was completed in January 2013. (2) These warrants were issued in connection with a private placement which was completed in October 2014. (3) These warrants were issued in connection with an offering which was completed in February 2015. (4) These warrants were issued in connection with an offering which was completed in July 2015. (5) These warrants were originally issued in connection with an offering in July 2015, and were amended in connection with an offering which was completed in January 2016. (6) These warrants were issued in connection with an offering which was completed in January 2016. (7) These warrants were issued in connection with the Merger and are the 2017 New Bridge Warrants discussed above. (8) These warrants were issued in connection with the Merger and are the Side Warrants discussed above. (9) These warrants were issued in connection with the August 2017 Offering and are the August 2017 Offering Warrants discussed above. (10) These warrants were issued in connection with the August 2017 Offering and are the Representative Warrants discussed above. (11) These warrants were issued in connection with the conversion of our Series A Senior stock, at the time of the closing of the August 2017 Offering, and are the Series A Conversion Warrants discussed above. (12) These warrants were issued in connection with the conversion of convertible bridge notes, at the time of the closing of the August 2017 Offering, and are the Note Conversion Warrants discussed above. |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of changes in fair value of liability | During the three and nine months ended September 30, 2017, the changes in the fair value of the liability measured using significant unobservable inputs (Level 3) were comprised of the following: Dollars in Thousands For the Three Months Ended September 30, 2017 Beginning balance at July 1 $ 618 Additions - liability assumed in the Merger — Total (gains) or losses: Recognized in earnings — Balance at September 30 $ 618 Dollars in Thousands For the Nine Months Ended September 30, 2017 Beginning balance at January 1 $ — Additions - liability assumed in the Merger 615 Total (gains) or losses: Recognized in earnings 3 Balance at September 30 $ 618 |
STOCK OPTIONS (Tables)
STOCK OPTIONS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of stock option activity | The following table summarizes stock option activity under our plans during the nine months ended September 30, 2017 : Number of Options Weighted-Average Exercise Price Outstanding at January 1, 2017 24,600 $ 107.83 Granted 225,332 1.87 Forfeited (13,044 ) 103.13 Outstanding at September 30, 2017 236,888 $ 7.30 Exercisable at September 30, 2017 10,284 $ 121.97 |
BUSINESS DESCRIPTION (Details)
BUSINESS DESCRIPTION (Details) $ in Thousands | Nov. 07, 2017USD ($) | Oct. 31, 2017USD ($) | Jun. 29, 2017 | Jun. 13, 2017 | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) |
Business Acquisition [Line Items] | ||||||
Net loss | $ 10,719 | $ 1,251 | ||||
Working deficiency | $ 12,600 | |||||
Common Stock | ||||||
Business Acquisition [Line Items] | ||||||
Stock split and reverse stock split | 0.0333 | 0.0333 | ||||
Subsequent Events | Series C Preferred Stock | ||||||
Business Acquisition [Line Items] | ||||||
Proceeds from issuance of warrants | $ 2,800 | |||||
Precipio Diagnostic | ||||||
Business Acquisition [Line Items] | ||||||
Stock split and reverse stock split | 10.2502 | |||||
Settlement Agreement | Subsequent Events | ||||||
Business Acquisition [Line Items] | ||||||
Debt forgiveness, amount | $ 5,000 | |||||
Secured debt | $ 2,500 | |||||
Debt instrument, term | 48 months |
SUMMARY OF SIGNIFICANT ACCOUN29
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cash and Cash Equivalents and Other Assets) (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Accounting Policies [Abstract] | ||
Other current assets | $ 127 | $ 13 |
Current prepaid expense, less than | 100 | |
Other current receivables, less than | $ 100 |
SUMMARY OF SIGNIFICANT ACCOUN30
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Property, Plant and Equipment) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Accounting Policies [Abstract] | ||||
Depreciation expense | $ 0.1 | $ 0.1 | $ 0.1 | $ 0.1 |
SUMMARY OF SIGNIFICANT ACCOUN31
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Goodwill and Intangible Assets) (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)reporting | Sep. 30, 2016USD ($) | |
Accounting Policies [Abstract] | ||||
Number of reporting units | reporting | 1 | |||
Impairment of goodwill | $ 1,015,000 | $ 0 | $ 1,015,000 | $ 0 |
Finite-Lived Intangible Assets [Line Items] | ||||
Impairment of intangible assets | 0 | |||
IPR&D | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Impairment of intangible assets | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUN32
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Stock-based Compensation) (Details) | 9 Months Ended |
Sep. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Share-based compensation arrangement by share-based payment award, expiration period | 10 years |
Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Stock options, unvested options, vesting period | 4 years |
SUMMARY OF SIGNIFICANT ACCOUN33
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Net Sales Recognition) (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Accounting Policies [Abstract] | ||
Deferred revenue | $ 210 | $ 92 |
SUMMARY OF SIGNIFICANT ACCOUN34
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Loss Per Share) (Details) - shares | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Accounting Policies [Abstract] | ||
Options, warrants and conversion rights, common stock callable and antidilutive (in shares) | 5,919,819 | 2,765,904 |
REVERSE MERGER (Narratives) (De
REVERSE MERGER (Narratives) (Details) - USD ($) | Aug. 28, 2017 | Jun. 29, 2017 | Mar. 31, 2016 | Sep. 30, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 |
Business Combination Segment Allocation [Line Items] | |||||||
Shares converted, value | $ 3,000,000 | $ 0 | $ 433,000 | ||||
Common stock, shares outstanding (in shares) | 9,446,878 | 9,446,878 | 449,175 | ||||
Preferred stock, dividend rate (percentage) | 8.00% | ||||||
Convertible Debt | |||||||
Business Combination Segment Allocation [Line Items] | |||||||
Debt instrument, face amount | 800,000 | ||||||
Private Placement | |||||||
Business Combination Segment Allocation [Line Items] | |||||||
Consideration received | 400,000 | ||||||
Transgenomics | |||||||
Business Combination Segment Allocation [Line Items] | |||||||
Conversion of debt into stock | $ 3,000,000 | ||||||
Stock price used for estimating purchase consideration (in dollars per share) | $ 6.80 | ||||||
Common stock, shares outstanding (in shares) | 895,334 | ||||||
Preferred stock, dividend rate (percentage) | 8.00% | ||||||
Common Stock | |||||||
Business Combination Segment Allocation [Line Items] | |||||||
Number of shares converted (in shares) | 1,735,419 | 7,356,170 | 943,600 | 943,600 | |||
New shares issued (in shares) | 200,081 | ||||||
Common Stock | Precipio Diagnostic | |||||||
Business Combination Segment Allocation [Line Items] | |||||||
Number of shares converted (in shares) | 5,352,847 | ||||||
Common Stock | Transgenomics | |||||||
Business Combination Segment Allocation [Line Items] | |||||||
Number of shares converted from debt instrument (in shares) | 352,630 | ||||||
Preferred Stock | |||||||
Business Combination Segment Allocation [Line Items] | |||||||
Number of shares converted from debt instrument (in shares) | 802,920 | ||||||
Share price (in dollars per share) | $ 12.20 | ||||||
Preferred Stock | Private Placement | |||||||
Business Combination Segment Allocation [Line Items] | |||||||
New shares issued (in shares) | 107,056 | ||||||
Preferred Stock | Transgenomics | |||||||
Business Combination Segment Allocation [Line Items] | |||||||
Number of shares converted (in shares) | 7,155 | ||||||
Number of shares converted from debt instrument (in shares) | 802,925 |
REVERSE MERGER (Consideration)
REVERSE MERGER (Consideration) (Details) - Transgenomics $ in Thousands | Jun. 29, 2017USD ($) |
Business Acquisition [Line Items] | |
Legacy Transgenomic common stock | $ 6,088 |
Fair value of preferred stock converted to common stock | 49 |
Fair value of debt converted to common stock | 2,398 |
Fair value of debt converted to preferred stock | 9,796 |
Fair value of existing bridge notes | 1,275 |
Fair value of warrants | 1,996 |
Purchase consideration | $ 21,602 |
REVERSE MERGER (Net Assets Acqu
REVERSE MERGER (Net Assets Acquired) (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Jun. 29, 2017 | Dec. 31, 2015 |
Business Acquisition [Line Items] | |||
Goodwill | $ 12,817 | $ 0 | |
Transgenomics | |||
Business Acquisition [Line Items] | |||
Current and other assets | $ 419 | ||
Property and equipment | 29 | ||
Goodwill | 13,832 | ||
Other intangible assets | 21,100 | ||
Total assets | 35,380 | ||
Current liabilities | 13,604 | ||
Other liabilities | 174 | ||
Total liabilities | 13,778 | ||
Net assets acquired | $ 21,602 |
REVERSE MERGER (Intangible Asse
REVERSE MERGER (Intangible Assets Acquired) (Details) - Transgenomics $ in Thousands | Jun. 29, 2017USD ($) |
Business Acquisition [Line Items] | |
Total intangibles | $ 21,100 |
Trademark and trade name | |
Business Acquisition [Line Items] | |
Total intangibles | 40 |
Acquired technology | |
Business Acquisition [Line Items] | |
Total intangibles | 18,990 |
Customer relationships | |
Business Acquisition [Line Items] | |
Total intangibles | 250 |
Non-compete agreements | |
Business Acquisition [Line Items] | |
Total intangibles | 30 |
Backlog | |
Business Acquisition [Line Items] | |
Total intangibles | 200 |
In-process research and development | |
Business Acquisition [Line Items] | |
Total intangibles | $ 1,590 |
REVERSE MERGER (Pro-forma Discl
REVERSE MERGER (Pro-forma Disclosures) (Details) - Transgenomics - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Business Acquisition [Line Items] | ||
Net sales | $ 1,742 | $ 2,605 |
Net loss available to common stockholders | $ (22,980) | $ (15,838) |
Loss per common share (in dollars per share) | $ (3.40) | $ (2.48) |
INTANGIBLES (Finite-lived Intan
INTANGIBLES (Finite-lived Intangible Assets Disclosure) (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
Finite-Lived Intangible Assets, Net [Abstract] | ||
Cost | $ 21,100,000 | $ 0 |
Accumulated Amortization | 321,000 | |
Net Book Value | 20,779,000 | |
Technology | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Cost | 18,990,000 | |
Accumulated Amortization | 237,000 | |
Net Book Value | $ 18,753,000 | |
Intangible assets, useful life | 20 years | |
Customer relationships | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Cost | $ 250,000 | |
Accumulated Amortization | 21,000 | |
Net Book Value | $ 229,000 | |
Intangible assets, useful life | 3 years | |
Backlog | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Cost | $ 200,000 | |
Accumulated Amortization | 50,000 | |
Net Book Value | $ 150,000 | |
Intangible assets, useful life | 1 year | |
Non-compete agreements | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Cost | $ 30,000 | |
Accumulated Amortization | 8,000 | |
Net Book Value | $ 22,000 | |
Intangible assets, useful life | 1 year | |
Trademark | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Cost | $ 40,000 | |
Accumulated Amortization | 5,000 | |
Net Book Value | $ 35,000 | |
Intangible assets, useful life | 2 years | |
IPR&D | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Cost | $ 1,590,000 | |
Accumulated Amortization | 0 | |
Net Book Value | $ 1,590,000 |
INTANGIBLES (Impairment and Amo
INTANGIBLES (Impairment and Amortization Expenses) (Details) - USD ($) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2017 | Sep. 30, 2017 | |
Finite-Lived Intangible Assets [Line Items] | ||
Amortization expense for intangible assets | $ 300,000 | $ 300,000 |
IPR&D | ||
Finite-Lived Intangible Assets [Line Items] | ||
Impairment of finite lived intangible asset | $ 0 |
INTANGIBLES (Scheduled Future A
INTANGIBLES (Scheduled Future Amortization) (Details) $ in Millions | Sep. 30, 2017USD ($) |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |
Remaining amortization expense, 2017 | $ 0.6 |
Amortization expense, 2018 | 1.2 |
Amortization expense, 2019 | 1 |
Amortization expense, 2020 | 1 |
Amortization expense, 2021 | $ 0.9 |
LONG-TERM DEBT (Schedule of Deb
LONG-TERM DEBT (Schedule of Debt) (Details) - USD ($) | Sep. 30, 2017 | Jun. 29, 2017 | Jun. 17, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||||
Total debt | $ 42,000 | $ 4,522,000 | ||
Current portion of long-term debt | (42,000) | (395,000) | ||
Long-term debt, net of current maturities | 0 | 4,127,000 | ||
Line of credit | ||||
Debt Instrument [Line Items] | ||||
Total debt | 0 | 162,066 | ||
Convertible promissory notes | ||||
Debt Instrument [Line Items] | ||||
Total debt | 41,666 | $ 143,041 | 0 | |
Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Total debt | 0 | $ 3,584,968 | 3,269,968 | |
Debt issuance cost | 0 | (9,000) | ||
Junior Notes | ||||
Debt Instrument [Line Items] | ||||
Total debt | 0 | $ 583,821 | 583,821 | |
Term loan | Department of Economic and Community Development (DECD) | ||||
Debt Instrument [Line Items] | ||||
Total debt | 0 | 243,287 | ||
Debt issuance cost | 0 | (30,000) | ||
Term loan | Webster Bank | ||||
Debt Instrument [Line Items] | ||||
Total debt | 0 | 328,000 | ||
Debt issuance cost | $ 0 | $ (26,000) |
LONG-TERM DEBT (Senior and Juni
LONG-TERM DEBT (Senior and Junior Notes) (Details) - USD ($) | Aug. 28, 2017 | Jun. 29, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 |
Debt Instrument [Line Items] | |||||
Proceeds from long-term debt | $ 315,000 | $ 175,000 | |||
Preferred stock issued, value | 0 | $ 8,000 | |||
Accrued interest | 61,073 | ||||
Total debt | 42,000 | 4,522,000 | |||
Convertible Preferred Stock | |||||
Debt Instrument [Line Items] | |||||
Equity instrument fair value | 2,147,716 | ||||
Preferred stock issued, value | 1,715,000 | ||||
Stock dividend, value | 432,716 | ||||
Preferred stock | |||||
Debt Instrument [Line Items] | |||||
Conversion of debt into stock (in shares) | 802,920 | ||||
Common Stock | |||||
Debt Instrument [Line Items] | |||||
Equity instrument fair value | $ 2,200,000 | ||||
Bridge Loan | |||||
Debt Instrument [Line Items] | |||||
Convertible debt | 1,120,000 | ||||
Accrued interest | $ 36,551 | ||||
Debt instrument, face amount | 2,000,000 | ||||
Total debt | $ 2,436,551 | ||||
Bridge Loan | Common Stock | |||||
Debt Instrument [Line Items] | |||||
Conversion of debt into stock (in shares) | 359,999 | ||||
Senior Notes | |||||
Debt Instrument [Line Items] | |||||
Proceeds from long-term debt | $ 315,000 | $ 525,000 | |||
Annual interest rate (as a percent) | 12.00% | 12.00% | |||
Accrued interest | $ 279,740 | ||||
Debt instrument, face amount | 2,744,968 | ||||
Total debt | 3,584,968 | $ 0 | $ 3,269,968 | ||
Junior Notes | |||||
Debt Instrument [Line Items] | |||||
Annual interest rate (as a percent) | 15.00% | ||||
Accrued interest | $ 71,258 | ||||
Debt instrument, face amount | 583,821 | ||||
Total debt | 583,821 | $ 0 | $ 583,821 | ||
Senior and Junior Notes | |||||
Debt Instrument [Line Items] | |||||
Accrued interest | $ 602,373 | ||||
Senior and Junior Notes | Common Stock | |||||
Debt Instrument [Line Items] | |||||
Conversion of debt into stock (in shares) | 1,414,700 |
LONG-TERM DEBT (Connecticut Inn
LONG-TERM DEBT (Connecticut Innovations, Incorporated) (Details) - USD ($) | Apr. 01, 2012 | Sep. 30, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | |||
Total debt | $ 42,000 | $ 4,522,000 | |
Line of credit | |||
Debt Instrument [Line Items] | |||
Maximum borrowing amount | $ 500,000 | ||
Interest rate (as a percent) | 8.00% | ||
Debt instrument, maturity date | Sep. 1, 2018 | ||
Total debt | $ 0 | $ 162,066 | |
Line of credit | Minimum | |||
Debt Instrument [Line Items] | |||
Debt instrument, scheduled periodic payments | $ 7,436 | ||
Line of credit | Maximum | |||
Debt Instrument [Line Items] | |||
Debt instrument, scheduled periodic payments | 12,206 | ||
Debt instrument, scheduled payment, interest | $ 1,041 |
LONG-TERM DEBT (Department of E
LONG-TERM DEBT (Department of Economic and Community Development) (Details) - USD ($) | May 01, 2013 | Jul. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||||
Total debt | $ 42,000 | $ 4,522,000 | ||
Term loan | Department of Economic and Community Development (DECD) | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, term | 10 years | |||
Debt instrument, face amount | $ 300,000 | |||
Interest rate (as a percent) | 3.00% | |||
Debt instrument, maturity date | Apr. 23, 2023 | |||
Total debt | $ 0 | $ 243,287 | ||
Repayments of long term debt | $ 225,714 |
LONG-TERM DEBT (Webster Bank) (
LONG-TERM DEBT (Webster Bank) (Details) - USD ($) | Dec. 01, 2014 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Jun. 30, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | |||||||
Total debt | $ 42,000 | $ 42,000 | $ 4,522,000 | ||||
Loss on extinguishment of debt and induced conversion of convertible bridge notes | 1,338,000 | $ 0 | 1,391,000 | $ 0 | |||
Connecticut, DECD and Webster Loan | |||||||
Debt Instrument [Line Items] | |||||||
Loss on extinguishment of debt and induced conversion of convertible bridge notes | 53,000 | ||||||
Term loan | Webster Bank | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, term | 3 years 6 months | ||||||
Debt instrument, face amount | $ 500,000 | ||||||
Interest rate (as a percent) | 1.16% | ||||||
Debt instrument, maturity date | May 31, 2018 | ||||||
Total debt | $ 0 | $ 0 | $ 328,000 | ||||
Term loan | Webster Bank | LIBOR | |||||||
Debt Instrument [Line Items] | |||||||
Variable rate on spread | 5.00% |
LONG-TERM DEBT (Convertible Pro
LONG-TERM DEBT (Convertible Promissory Notes) (Details) - USD ($) | Aug. 31, 2017 | Jun. 17, 2017 | Sep. 30, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||||
Total debt | $ 42,000 | $ 4,522,000 | ||
Accrued interest | 61,073 | |||
Convertible promissory notes | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, face amount | $ 125,000 | |||
Interest rate (as a percent) | 6.00% | |||
Percentage of debt due prior to merger | 66.67% | |||
Percentage of principal outstanding | 33.33% | |||
Debt instrument, maturity date | Jun. 17, 2017 | |||
Total debt | $ 143,041 | 41,666 | $ 0 | |
Accrued interest | $ 18,041 | $ 20,000 | ||
Repayments of long term debt | $ 83,333 |
CONVERTIBLE BRIDGE NOTES (Conve
CONVERTIBLE BRIDGE NOTES (Convertible Bridge Notes) (Details) - USD ($) | Aug. 28, 2017 | Jun. 29, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 |
Short-term Debt [Line Items] | |||||
Total debt | $ 42,000 | $ 4,522,000 | |||
Accrued interest | 61,073 | ||||
Bridge Loan | |||||
Short-term Debt [Line Items] | |||||
Total debt | $ 2,436,551 | ||||
Conversion of debt into stock | 900,000 | 1,787,000 | $ 0 | ||
Accrued interest | $ 36,551 | ||||
Bridge Loan | Common Stock | |||||
Short-term Debt [Line Items] | |||||
Conversion of debt into stock (in shares) | 359,999 | ||||
Bridge Loan | Convertible Bridge Loan | |||||
Short-term Debt [Line Items] | |||||
Total debt | $ 0 | $ 695,000 | |||
Interest rate (as a percent) | 14.00% | ||||
Bridge Loan | Convertible Bridge Loan | Series C Preferred Stock | |||||
Short-term Debt [Line Items] | |||||
Conversion of stock, discount rate | 30.00% | ||||
Bridge Loan | Convertible Bridge Loan | Series B Preferred Stock | |||||
Short-term Debt [Line Items] | |||||
Conversion of stock, discount rate | 30.00% | ||||
Debt instrument, debt converted into new debt | 70.00% | ||||
Bridge Loan | Convertible Bridge Loan | Common Stock | |||||
Short-term Debt [Line Items] | |||||
Conversion of debt into stock | $ 695,000 | ||||
Accrued interest | $ 192,000 | ||||
Conversion of debt into stock (in shares) | 155,639 |
CONVERTIBLE BRIDGE NOTES (2017
CONVERTIBLE BRIDGE NOTES (2017 New Bridge Notes I) (Details) - USD ($) | Jun. 29, 2017 | Jun. 28, 2017 | Sep. 30, 2017 | Aug. 28, 2017 | Jun. 13, 2017 | Jun. 30, 2016 | Mar. 31, 2016 |
Short-term Debt [Line Items] | |||||||
Underlying shares (in shares) | 4,224,824 | 1,958,204 | |||||
Exercise price (in dollars per share) | $ 0 | ||||||
Warrants, fair value | $ 211,000 | $ 211,000 | $ 1,421,738 | ||||
Common Stock | |||||||
Short-term Debt [Line Items] | |||||||
Underlying shares (in shares) | 45,600 | ||||||
Exercise price (in dollars per share) | $ 7.50 | $ 2.75 | |||||
Conversion price (in dollars per share) | $ 10.2502 | ||||||
Percentage of per share offering price | 110.00% | ||||||
Common Stock | Minimum | |||||||
Short-term Debt [Line Items] | |||||||
Exercise price (in dollars per share) | $ 1.50 | ||||||
Precipio Diagnostic | |||||||
Short-term Debt [Line Items] | |||||||
Loans to related party | $ 561,500 | ||||||
Bridge Loan | |||||||
Short-term Debt [Line Items] | |||||||
Premium rate changed upon settlement of debt | 20.00% | ||||||
Debt instrument, face amount | $ 2,000,000 | ||||||
Bridge Loan | Common Stock | |||||||
Short-term Debt [Line Items] | |||||||
Exercise price (in dollars per share) | $ 3 | ||||||
Conversion price (in dollars per share) | $ 2.50 | ||||||
Bridge Loan | New Bridge Notes I | |||||||
Short-term Debt [Line Items] | |||||||
Interest rate (as a percent) | 8.00% | ||||||
Premium rate changed upon settlement of debt | 20.00% | ||||||
Debt instrument, face amount | $ 1,200,000 | ||||||
Conversion price (in dollars per share) | $ 3.736329 | ||||||
Premium on debt settlement | $ 240,000 | ||||||
Discount on debt | $ 989,000 | ||||||
Transgenomics | Common Stock | |||||||
Short-term Debt [Line Items] | |||||||
Underlying shares (in shares) | 40,000 | ||||||
Exercise price (in dollars per share) | $ 15 | ||||||
Agent Fees | $ 84,000 | ||||||
Transgenomics | Aegis Warrants | Common Stock | |||||||
Short-term Debt [Line Items] | |||||||
Underlying shares (in shares) | 5,600 | ||||||
Exercise price (in dollars per share) | $ 15 | ||||||
Transgenomics | Bridge Loan | 2017 Bridge Notes | |||||||
Short-term Debt [Line Items] | |||||||
Sale of debt | $ 1,200,000 | ||||||
Interest rate (as a percent) | 4.00% | ||||||
Debt instrument, term | 90 days | ||||||
Premium rate changed upon settlement of debt | 20.00% |
CONVERTIBLE BRIDGE NOTES (20151
CONVERTIBLE BRIDGE NOTES (2017 New Bridge Notes II) (Details) - USD ($) | Aug. 28, 2017 | Jun. 29, 2017 | Mar. 31, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Jun. 13, 2017 | Dec. 31, 2016 | Jun. 30, 2016 |
Short-term Debt [Line Items] | ||||||||||
Underlying shares (in shares) | 4,224,824 | 4,224,824 | 1,958,204 | |||||||
Exercise price (in dollars per share) | $ 0 | |||||||||
Warrants, fair value | $ 211,000 | $ 211,000 | $ 211,000 | $ 1,421,738 | ||||||
Class of warrant or right, term | 10 years | |||||||||
Merger advisory fees | 73,000 | $ 0 | 2,676,000 | $ 0 | ||||||
Proceeds from equity financing | 7,000,000 | |||||||||
Total debt | $ 42,000 | $ 42,000 | $ 4,522,000 | |||||||
Side Warrants | ||||||||||
Short-term Debt [Line Items] | ||||||||||
Underlying shares (in shares) | 91,429 | 91,429 | ||||||||
Exercise price (in dollars per share) | $ 7 | $ 7 | ||||||||
Warrants, fair value | $ 487,000 | $ 487,000 | ||||||||
Merger advisory fees | $ 73,000 | $ 487,000 | ||||||||
Common Stock | ||||||||||
Short-term Debt [Line Items] | ||||||||||
Conversion price (in dollars per share) | $ 10.2502 | |||||||||
Underlying shares (in shares) | 45,600 | |||||||||
Exercise price (in dollars per share) | $ 2.75 | $ 7.50 | ||||||||
Common Stock | Side Warrants | ||||||||||
Short-term Debt [Line Items] | ||||||||||
Underlying shares (in shares) | 91,429 | 91,429 | ||||||||
Exercise price (in dollars per share) | $ 7 | $ 7 | ||||||||
Warrants, fair value | $ 487,000 | $ 487,000 | ||||||||
Class of warrant or right, term | 5 years | |||||||||
Merger advisory fees | $ 73,000 | $ 487,000 | ||||||||
Common Stock | Side Warrants | Upon Execution | ||||||||||
Short-term Debt [Line Items] | ||||||||||
Underlying shares (in shares) | 22,857 | 22,857 | ||||||||
Common Stock | Side Warrants | Performance Based | ||||||||||
Short-term Debt [Line Items] | ||||||||||
Underlying shares (in shares) | 68,572 | 68,572 | ||||||||
Bridge Loan | ||||||||||
Short-term Debt [Line Items] | ||||||||||
Premium rate changed upon settlement of debt | 20.00% | |||||||||
Total debt | $ 2,436,551 | |||||||||
Bridge Loan | Common Stock | ||||||||||
Short-term Debt [Line Items] | ||||||||||
Conversion price (in dollars per share) | $ 2.50 | |||||||||
Exercise price (in dollars per share) | $ 3 | |||||||||
Class of warrant or right, term | 5 years | |||||||||
Bridge Loan | 2017 New Bridge Notes II | ||||||||||
Short-term Debt [Line Items] | ||||||||||
Sale of debt | $ 800,000 | |||||||||
Proceeds from sale of debt instrument | $ 721,000 | |||||||||
Interest rate (as a percent) | 8.00% | |||||||||
Conversion price (in dollars per share) | $ 3.736329 | |||||||||
Premium rate changed upon settlement of debt | 20.00% | |||||||||
Premium on debt settlement | $ 160,000 | |||||||||
Discount on debt | $ 656,000 | $ 656,000 |
CONVERTIBLE BRIDGE NOTES (Con52
CONVERTIBLE BRIDGE NOTES (Conversion and Settlement of New Bridge Notes) (Details) - USD ($) | Aug. 28, 2017 | Jun. 29, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Jun. 13, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||||||||
Total debt | $ 42,000 | $ 42,000 | $ 4,522,000 | |||||
Accrued interest | 61,073 | |||||||
Loss on extinguishment of debt related to unamortized discount | 1,338,000 | $ 0 | 1,391,000 | $ 0 | ||||
Amortization of deferred financing costs and debt discount | 1,898,000 | 31,000 | ||||||
Bridge Loan | ||||||||
Debt Instrument [Line Items] | ||||||||
Total debt | $ 2,436,551 | |||||||
Debt instrument, face amount | 2,000,000 | |||||||
Redemption premium | $ 400,000 | |||||||
Premium rate changed upon settlement of debt | 20.00% | |||||||
Accrued interest | $ 36,551 | |||||||
Repayments of debt | 1,536,551 | |||||||
Debt converted | $ 900,000 | 1,787,000 | $ 0 | |||||
Loss on extinguishment of debt and induced conversion of convertible bridge notes | 1,000,000 | |||||||
Loss on extinguishment of debt related to unamortized discount | 400,000 | |||||||
Bridge Loan | Convertible Bridge Loan | ||||||||
Debt Instrument [Line Items] | ||||||||
Total debt | 0 | 0 | $ 695,000 | |||||
Amortization of deferred financing costs and debt discount | $ 1,800,000 | $ 1,900,000 | ||||||
Preferred Class B | ||||||||
Debt Instrument [Line Items] | ||||||||
Share price (in dollars per share) | $ 1,000 | |||||||
Proceeds from Issuance of common stock | $ 6,000,000 | |||||||
Conversion price (in dollars per share) | $ 2.5 | |||||||
Common Stock | ||||||||
Debt Instrument [Line Items] | ||||||||
Shares callable by warrant (in shares) | 400 | |||||||
Conversion price (in dollars per share) | $ 10.2502 | |||||||
Common Stock | Bridge Loan | ||||||||
Debt Instrument [Line Items] | ||||||||
Number of shares converted from debt instrument (in shares) | 359,999 | |||||||
Conversion price (in dollars per share) | $ 2.50 | |||||||
Warrants issued on conversion (in shares) | 359,999 | |||||||
Common Stock | Bridge Loan | Convertible Bridge Loan | ||||||||
Debt Instrument [Line Items] | ||||||||
Accrued interest | $ 192,000 | |||||||
Debt converted | $ 695,000 | |||||||
Number of shares converted from debt instrument (in shares) | 155,639 | |||||||
Public Stock Offering | ||||||||
Debt Instrument [Line Items] | ||||||||
Shares sold in offering (in shares) | 6,000 | |||||||
Sale of stock, number of warrants per unit (in shares) | 1 | |||||||
Preferred Class B | ||||||||
Debt Instrument [Line Items] | ||||||||
Sale of stock, number of shares per unit (in shares) | 1 |
ACCRUED EXPENSES (Details)
ACCRUED EXPENSES (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Payables and Accruals [Abstract] | ||
Accrued expenses | $ 1,323 | $ 50 |
Accrued compensation | 529 | 155 |
Accrued interest | 20 | 495 |
Accrued expenses | $ 1,872 | $ 700 |
CONTINGENCIES (Details)
CONTINGENCIES (Details) - USD ($) | Oct. 31, 2017 | Sep. 19, 2017 | Jul. 13, 2017 | Apr. 07, 2017 | Mar. 06, 2017 | Feb. 21, 2017 | Feb. 06, 2017 | Dec. 19, 2016 | Nov. 30, 2016 | Oct. 27, 2016 | Sep. 13, 2016 | Jun. 23, 2016 | Feb. 25, 2016 | Jun. 30, 2017 | Mar. 31, 2016 | Sep. 30, 2017 | Sep. 30, 2017 | Oct. 03, 2017 | Sep. 08, 2017 | Mar. 31, 2017 | Dec. 31, 2016 |
Loss Contingencies [Line Items] | |||||||||||||||||||||
Exercise price (in dollars per share) | $ 0 | ||||||||||||||||||||
Class of warrant or right, term | 10 years | ||||||||||||||||||||
UNMC | |||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||
Loss contingency, damages sought | $ 700,000 | ||||||||||||||||||||
Loss contingency accrual | $ 400,000 | $ 400,000 | $ 400,000 | $ 400,000 | |||||||||||||||||
Litigation settlement in favor of other party, amount | $ 400,000 | ||||||||||||||||||||
Litigation settlement, installment payment amount | $ 25,000 | ||||||||||||||||||||
Litigation settlement, installment final payment amount | $ 100,000 | ||||||||||||||||||||
Fox Chase | |||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||
Litigation settlement in favor of other party, amount | $ 139,000 | ||||||||||||||||||||
Fox Chase | Transgenomics | |||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||
Litigation settlement in favor of other party, amount | $ 175,000 | ||||||||||||||||||||
Fox Chase | Transgenomics | Subsequent Events | |||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||
Litigation settlement, installment payment amount | $ 55,000 | ||||||||||||||||||||
IDT | |||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||
Litigation settlement, installment payment amount | $ 27,800 | ||||||||||||||||||||
IDT | Transgenomics | |||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||
Loss contingency accrual | 200,000 | 200,000 | |||||||||||||||||||
Mount Sinai | |||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||
Loss contingency, damages sought | $ 700,000 | ||||||||||||||||||||
Loss contingency accrual | 700,000 | 700,000 | |||||||||||||||||||
Litigation settlement in favor of other party, amount | $ 700,000 | ||||||||||||||||||||
Mount Sinai | Subsequent Events | |||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||
Secured debt | $ 400,000 | ||||||||||||||||||||
Interest rate (as a percent) | 10.00% | ||||||||||||||||||||
Debt instrument, scheduled periodic payments | $ 12,700 | ||||||||||||||||||||
Debt instrument, term | 48 months | ||||||||||||||||||||
Warrants outstanding (in shares) | 24,900 | ||||||||||||||||||||
Shares callable by warrant (in shares) | 1 | ||||||||||||||||||||
Exercise price (in dollars per share) | $ 7.50 | ||||||||||||||||||||
Class of warrant or right, term | 5 years | ||||||||||||||||||||
Smith | |||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||
Loss contingency, damages sought | $ 2,200,000 | ||||||||||||||||||||
Loss contingency accrual | 200,000 | 200,000 | |||||||||||||||||||
Litigation settlement in favor of other party, amount | $ 600,000 | ||||||||||||||||||||
Payments for legal settlements | 400,000 | 400,000 | |||||||||||||||||||
XIFIN, Inc. | |||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||
Loss contingency, damages sought | $ 270,000 | ||||||||||||||||||||
Loss contingency accrual | 200,000 | 200,000 | |||||||||||||||||||
Payments for legal settlements | 100,000 | 100,000 | |||||||||||||||||||
SPDC | |||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||
Loss contingency, damages sought | $ 400,000 | ||||||||||||||||||||
Litigation settlement in favor of other party, amount | $ 400,000 | ||||||||||||||||||||
CPA Global | |||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||
Loss contingency, damages sought | $ 200,000 | ||||||||||||||||||||
Loss contingency accrual | 200,000 | 200,000 | |||||||||||||||||||
Payments for legal settlements | 100,000 | 100,000 | |||||||||||||||||||
Edge Bio | |||||||||||||||||||||
Loss Contingencies [Line Items] | |||||||||||||||||||||
Loss contingency, damages sought | $ 100,000 | ||||||||||||||||||||
Loss contingency accrual | $ 100,000 | $ 100,000 | |||||||||||||||||||
Litigation settlement in favor of other party, amount | $ 113,000 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense | $ 0 | $ 0 | $ 0 | $ 0 |
Income tax interest and penalties | $ 0 | $ 0 |
STOCKHOLDERS' EQUITY (DEFICIT56
STOCKHOLDERS' EQUITY (DEFICIT) (Common Stock) (Details) $ / shares in Units, $ in Thousands | Aug. 28, 2017USD ($)$ / sharesshares | Jun. 29, 2017USD ($)shares | Jun. 13, 2017$ / shares | Sep. 30, 2017shares | Sep. 30, 2017USD ($)shares | Sep. 30, 2016USD ($) | Dec. 31, 2016shares |
Class of Stock [Line Items] | |||||||
Common stock, shares authorized (in shares) | 150,000,000 | 150,000,000 | 1,806,850 | ||||
Restricted shares, (in shares) | 64,593 | ||||||
Restricted stock expense | $ | $ 28 | ||||||
Bridge Loan | |||||||
Class of Stock [Line Items] | |||||||
Debt converted | $ | $ 900 | $ 1,787 | $ 0 | ||||
Common Stock | |||||||
Class of Stock [Line Items] | |||||||
Conversion ratio | 0.0333 | 0.0333 | |||||
Conversion price (in dollars per share) | $ / shares | $ 10.2502 | ||||||
Restricted shares issued (in shares) | 0 | 59,563 | |||||
Number of shares converted (in shares) | 1,735,419 | 7,356,170 | 943,600 | 943,600 | |||
Issuance of common stock for consulting services in connection with the merger (in shares) | 321,821 | ||||||
Equity instrument fair value | $ | $ 2,200 | ||||||
New shares issued (in shares) | 200,081 | ||||||
Shares issued in connection with business combination (in shares) | 1,255,119 | ||||||
Common Stock | Bridge Loan | |||||||
Class of Stock [Line Items] | |||||||
Conversion price (in dollars per share) | $ / shares | $ 2.50 | ||||||
Number of shares converted from debt instrument (in shares) | 359,999 | ||||||
Common Stock | Performance Based | |||||||
Class of Stock [Line Items] | |||||||
New shares issued (in shares) | 135,000 |
STOCKHOLDERS' EQUITY (DEFICIT57
STOCKHOLDERS' EQUITY (DEFICIT) (Series A and Series B Preferred Stock) (Details) - shares | Sep. 30, 2017 | Dec. 31, 2016 | Jun. 30, 2016 |
Class of Stock [Line Items] | |||
Preferred stock, shares outstanding (in shares) | 3,641 | 780,105 | |
Series A Preferred Stock | |||
Class of Stock [Line Items] | |||
Preferred stock, shares outstanding (in shares) | 367,299 | 275,237 | |
Series B Preferred Stock | |||
Class of Stock [Line Items] | |||
Preferred stock, shares outstanding (in shares) | 412,806 | 208,087 |
STOCKHOLDERS' EQUITY (DEFICIT58
STOCKHOLDERS' EQUITY (DEFICIT) (Preferred Stock) (Details) - shares | Sep. 30, 2017 | Dec. 31, 2016 |
Stockholders' Equity Note [Abstract] | ||
Preferred stock, shares authorized (in shares) | 15,000,000 | 1,294,434 |
STOCKHOLDERS' EQUITY (DEFICIT59
STOCKHOLDERS' EQUITY (DEFICIT) (Series A Senior Preferred Stock) (Details) - USD ($) | Aug. 28, 2017 | Jun. 29, 2017 | Mar. 31, 2016 | Sep. 30, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Jun. 13, 2017 | Dec. 31, 2016 | Jun. 30, 2016 |
Class of Stock [Line Items] | |||||||||
Preferred stock, shares authorized (in shares) | 15,000,000 | 15,000,000 | 1,294,434 | ||||||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | ||||||
Preferred stock, dividend rate (percentage) | 8.00% | ||||||||
Shares converted, value | $ 3,000,000 | $ 0 | $ 433,000 | ||||||
Warrants, fair value | 211,000 | $ 211,000 | 211,000 | $ 1,421,738 | |||||
Issuance of preferred stock | $ 5,380,000 | ||||||||
Preferred stock, shares outstanding (in shares) | 3,641 | 3,641 | 780,105 | ||||||
Private Placement | |||||||||
Class of Stock [Line Items] | |||||||||
Consideration received | $ 400,000 | ||||||||
Transgenomics | |||||||||
Class of Stock [Line Items] | |||||||||
Preferred stock, dividend rate (percentage) | 8.00% | ||||||||
Conversion of debt into stock | $ 3,000,000 | ||||||||
Preferred stock - series A senior | |||||||||
Class of Stock [Line Items] | |||||||||
Preferred stock, shares authorized (in shares) | 4,100,000 | ||||||||
Preferred stock, par value (in dollars per share) | $ 0.01 | ||||||||
Conversion price (in dollars per share) | $ 3.736329 | $ 3.736329 | |||||||
Conversion of stock, discount rate | 15.00% | 15.00% | |||||||
Preferred stock, dividend rate (percentage) | 8.00% | ||||||||
New shares issued (in shares) | 22,518 | ||||||||
Deemed dividend | $ 5,200,000 | ||||||||
Number of shares converted (in shares) | 1,712,901 | ||||||||
Convertible preferred stock, issued upon conversion (in shares) | 1 | ||||||||
Warrants, fair value | $ 1,400,000 | ||||||||
Issuance of preferred stock | $ 84,000 | ||||||||
Preferred stock, shares outstanding (in shares) | 0 | 0 | |||||||
Preferred stock | |||||||||
Class of Stock [Line Items] | |||||||||
Number of shares converted from debt instrument (in shares) | 802,920 | ||||||||
Preferred stock | Private Placement | |||||||||
Class of Stock [Line Items] | |||||||||
New shares issued (in shares) | 107,056 | ||||||||
Preferred stock | Transgenomics | |||||||||
Class of Stock [Line Items] | |||||||||
Number of shares converted from debt instrument (in shares) | 802,925 | ||||||||
Number of shares converted (in shares) | 7,155 | ||||||||
Common Stock | |||||||||
Class of Stock [Line Items] | |||||||||
Conversion price (in dollars per share) | $ 10.2502 | ||||||||
New shares issued (in shares) | 200,081 | ||||||||
Number of shares converted (in shares) | 1,735,419 | 7,356,170 | 943,600 | 943,600 | |||||
Convertible preferred stock, issued upon conversion (in shares) | 1 | ||||||||
Stock rights issued (in shares) | 856,446 | ||||||||
Common Stock | Transgenomics | |||||||||
Class of Stock [Line Items] | |||||||||
Number of shares converted from debt instrument (in shares) | 352,630 |
STOCKHOLDERS' EQUITY (DEFICIT60
STOCKHOLDERS' EQUITY (DEFICIT) (Series B Preferred Stock) (Details) - USD ($) | Aug. 28, 2017 | Jun. 29, 2017 | Sep. 30, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Jun. 13, 2017 | Dec. 31, 2016 | Mar. 31, 2016 |
Class of Stock [Line Items] | ||||||||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | |||||
Exercise price (in dollars per share) | $ 0 | |||||||
Proceeds from Issuance of preferred stock | $ 5,380,000 | $ 0 | ||||||
Preferred stock, shares outstanding (in shares) | 3,641 | 3,641 | 780,105 | |||||
Aegis | ||||||||
Class of Stock [Line Items] | ||||||||
Stock rights issued (in shares) | 280,000 | |||||||
Exercise price (in dollars per share) | $ 0.01 | |||||||
Warrant unit value (per unit) | $ 2,800 | |||||||
Proceeds from issuance of warrants | $ 5,000,000 | |||||||
Offering Warrants | ||||||||
Class of Stock [Line Items] | ||||||||
Stock rights issued (in shares) | 2,680,000 | |||||||
Exercise price (in dollars per share) | $ 3 | $ 3 | $ 3 | |||||
Preferred Class B | ||||||||
Class of Stock [Line Items] | ||||||||
Preferred stock, par value (in dollars per share) | 0.01 | |||||||
Conversion price (in dollars per share) | 2.5 | |||||||
Share price (in dollars per share) | $ 1,000 | |||||||
Beneficial conversion feature on warrants | $ 2,300,000 | |||||||
Number of shares converted (in shares) | 2,359 | 2,359 | ||||||
Preferred stock, shares outstanding (in shares) | 3,641 | 3,641 | ||||||
Common Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Shares callable by warrant (in shares) | 400 | |||||||
Convertible preferred stock, issued upon conversion (in shares) | 1 | |||||||
Conversion price (in dollars per share) | $ 10.2502 | |||||||
Stock rights issued (in shares) | 856,446 | |||||||
Exercise price (in dollars per share) | $ 2.75 | $ 7.50 | ||||||
Number of shares converted (in shares) | 1,735,419 | 7,356,170 | 943,600 | 943,600 | ||||
Public Stock Offering | ||||||||
Class of Stock [Line Items] | ||||||||
Shares sold in offering (in shares) | 6,000 | |||||||
Sale of stock, number of warrants per unit (in shares) | 1 | |||||||
Proceeds from Issuance of preferred stock | $ 6,000,000 | |||||||
Public Stock Offering | Offering Warrants | ||||||||
Class of Stock [Line Items] | ||||||||
Proceeds from Issuance of preferred stock | 2,900,000 | |||||||
Public Stock Offering | Preferred Class B | ||||||||
Class of Stock [Line Items] | ||||||||
Proceeds from Issuance of preferred stock | $ 3,100,000 | |||||||
Preferred Class B | ||||||||
Class of Stock [Line Items] | ||||||||
Sale of stock, number of shares per unit (in shares) | 1 |
STOCKHOLDERS' EQUITY (DEFICIT61
STOCKHOLDERS' EQUITY (DEFICIT) (Common Stock Warrants) (Details) - USD ($) | Jun. 28, 2017 | Mar. 31, 2016 | Sep. 30, 2017 | Jun. 29, 2017 | Dec. 31, 2016 | Jun. 30, 2016 |
Class of Stock [Line Items] | ||||||
Underlying shares (in shares) | 4,224,824 | 1,958,204 | ||||
Exercise price (in dollars per share) | $ 0 | |||||
Warrants, fair value | $ 211,000 | $ 211,000 | $ 1,421,738 | |||
Class of warrant or right, term | 10 years | |||||
Preferred stock, shares outstanding (in shares) | 3,641 | 780,105 | ||||
Preferred stock issued, value | $ 0 | $ 8,000 | ||||
Preferred stock, dividend rate (percentage) | 8.00% | |||||
Dividends, preferred stock | $ 432,716 | |||||
Stock warrant potential Entity ownership percentage | 60.00% | |||||
Series A Preferred Stock | ||||||
Class of Stock [Line Items] | ||||||
Preferred stock, shares outstanding (in shares) | 367,299 | 275,237 | ||||
Preferred stock issued, value | $ 750,000 | |||||
Series B Preferred Stock | ||||||
Class of Stock [Line Items] | ||||||
Preferred stock, shares outstanding (in shares) | 412,806 | 208,087 | ||||
Preferred stock issued, value | $ 965,000 | |||||
Series B Preferred Stock | Term loan | Webster Bank | ||||||
Class of Stock [Line Items] | ||||||
Underlying shares (in shares) | 20,000 | |||||
Class of warrant or right, term | 7 years | |||||
Line of credit | Series A Preferred Stock | ||||||
Class of Stock [Line Items] | ||||||
Underlying shares (in shares) | 8,542 | |||||
Exercise price (in dollars per share) | $ 2.93 | |||||
Warrants, fair value | $ 6,000 | |||||
Volatility rate | 40.00% | |||||
Term | 7 years | |||||
Risk free rate | 0.36% |
STOCKHOLDERS' EQUITY (DEFICIT62
STOCKHOLDERS' EQUITY (DEFICIT) (New Bridge Warrants) (Details) - USD ($) | Jun. 29, 2017 | Jun. 28, 2017 | Sep. 30, 2017 | Aug. 28, 2017 | Jun. 30, 2016 | Mar. 31, 2016 |
Class of Stock [Line Items] | ||||||
Underlying shares (in shares) | 4,224,824 | 1,958,204 | ||||
Exercise price (in dollars per share) | $ 0 | |||||
Warrants, fair value | $ 211,000 | $ 211,000 | $ 1,421,738 | |||
Dividends | $ 12,000 | |||||
Common Stock | ||||||
Class of Stock [Line Items] | ||||||
Underlying shares (in shares) | 45,600 | |||||
Exercise price (in dollars per share) | $ 7.50 | $ 2.75 | ||||
Percentage of per share offering price | 110.00% | |||||
Common Stock | Minimum | ||||||
Class of Stock [Line Items] | ||||||
Exercise price (in dollars per share) | $ 1.50 | |||||
Bridge Loan | Common Stock | ||||||
Class of Stock [Line Items] | ||||||
Exercise price (in dollars per share) | $ 3 | |||||
Transgenomics | Common Stock | ||||||
Class of Stock [Line Items] | ||||||
Underlying shares (in shares) | 40,000 | |||||
Exercise price (in dollars per share) | $ 15 | |||||
Transgenomics | Common Stock | Aegis Warrants | ||||||
Class of Stock [Line Items] | ||||||
Underlying shares (in shares) | 5,600 | |||||
Exercise price (in dollars per share) | $ 15 | |||||
Transgenomics | Bridge Loan | 2017 Bridge Notes | ||||||
Class of Stock [Line Items] | ||||||
Sale of debt | $ 1,200,000 |
STOCKHOLDERS' EQUITY (DEFICIT63
STOCKHOLDERS' EQUITY (DEFICIT) (Side Warrants) (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||
Mar. 31, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Aug. 28, 2017 | Jun. 29, 2017 | Jun. 30, 2016 | |
Class of Warrant or Right [Line Items] | ||||||||
Underlying shares (in shares) | 4,224,824 | 4,224,824 | 1,958,204 | |||||
Exercise price (in dollars per share) | $ 0 | |||||||
Warrants, fair value | $ 211,000 | $ 211,000 | $ 211,000 | $ 1,421,738 | ||||
Class of warrant or right, term | 10 years | |||||||
Merger advisory fees | $ 73,000 | $ 0 | $ 2,676,000 | $ 0 | ||||
Common Stock | ||||||||
Class of Warrant or Right [Line Items] | ||||||||
Underlying shares (in shares) | 45,600 | |||||||
Exercise price (in dollars per share) | $ 2.75 | $ 7.50 | ||||||
Side Warrants | ||||||||
Class of Warrant or Right [Line Items] | ||||||||
Underlying shares (in shares) | 91,429 | 91,429 | ||||||
Exercise price (in dollars per share) | $ 7 | $ 7 | ||||||
Warrants, fair value | $ 487,000 | $ 487,000 | ||||||
Merger advisory fees | $ 73,000 | $ 487,000 | ||||||
Side Warrants | Common Stock | ||||||||
Class of Warrant or Right [Line Items] | ||||||||
Underlying shares (in shares) | 91,429 | 91,429 | ||||||
Exercise price (in dollars per share) | $ 7 | $ 7 | ||||||
Warrants, fair value | $ 487,000 | $ 487,000 | ||||||
Class of warrant or right, term | 5 years | |||||||
Merger advisory fees | $ 73,000 | $ 487,000 | ||||||
Side Warrants | Common Stock | Upon Execution | ||||||||
Class of Warrant or Right [Line Items] | ||||||||
Underlying shares (in shares) | 22,857 | 22,857 | ||||||
Side Warrants | Common Stock | Performance Based | ||||||||
Class of Warrant or Right [Line Items] | ||||||||
Underlying shares (in shares) | 68,572 | 68,572 |
STOCKHOLDERS' EQUITY (DEFICIT64
STOCKHOLDERS' EQUITY (DEFICIT) (Offering Warrants) (Details) - $ / shares | Aug. 28, 2017 | Mar. 31, 2016 | Sep. 30, 2017 | Jun. 29, 2017 |
Class of Stock [Line Items] | ||||
Exercise price (in dollars per share) | $ 0 | |||
Class of warrant or right, term | 10 years | |||
Common Stock | ||||
Class of Stock [Line Items] | ||||
Stock rights issued (in shares) | 856,446 | |||
Exercise price (in dollars per share) | $ 2.75 | $ 7.50 | ||
Offering Warrants | ||||
Class of Stock [Line Items] | ||||
Stock rights issued (in shares) | 2,680,000 | |||
Exercise price (in dollars per share) | $ 3 | $ 3 | ||
Class of warrant or right, term | 5 years | |||
Offering Warrants | Common Stock | ||||
Class of Stock [Line Items] | ||||
Percentage of outstanding shares owned threshold prior to exercise of warrants | 4.99% | |||
Percentage of outstanding shares owned threshold after exercise of warrants | 9.99% |
STOCKHOLDERS' EQUITY (DEFICIT65
STOCKHOLDERS' EQUITY (DEFICIT) (Representative Warrants) (Details) - USD ($) | Aug. 28, 2017 | Sep. 30, 2017 | Jun. 29, 2017 | Jun. 30, 2016 | Mar. 31, 2016 |
Class of Stock [Line Items] | |||||
Underlying shares (in shares) | 4,224,824 | 1,958,204 | |||
Exercise price (in dollars per share) | $ 0 | ||||
Warrants, fair value | $ 211,000 | $ 211,000 | $ 1,421,738 | ||
Representative Warrants | |||||
Class of Stock [Line Items] | |||||
Underlying shares (in shares) | 60,000 | 60,000 | |||
Exercise price (in dollars per share) | $ 3.125 | $ 3.125 | |||
Proceeds from issuance of warrants | $ 100 | ||||
Warrants, fair value | $ 113,000 |
STOCKHOLDERS' EQUITY (DEFICIT66
STOCKHOLDERS' EQUITY (DEFICIT) (Warrants Outstanding) (Details) - USD ($) | Aug. 28, 2017 | Mar. 31, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Jun. 29, 2017 | Jun. 30, 2016 |
Class of Warrant or Right [Line Items] | ||||||
Underlying shares (in shares) | 4,224,824 | 1,958,204 | ||||
Exercise price (in dollars per share) | $ 0 | |||||
Warrants, fair value | $ 211,000 | $ 211,000 | $ 1,421,738 | |||
Class of warrant or right, term | 10 years | |||||
Bridge Loan | ||||||
Class of Warrant or Right [Line Items] | ||||||
Conversion of debt into stock | $ 900,000 | $ 1,787,000 | $ 0 | |||
Common Stock | ||||||
Class of Warrant or Right [Line Items] | ||||||
Stock rights issued (in shares) | 856,446 | |||||
Underlying shares (in shares) | 45,600 | |||||
Exercise price (in dollars per share) | $ 2.75 | $ 7.50 | ||||
Common Stock | Bridge Loan | ||||||
Class of Warrant or Right [Line Items] | ||||||
Exercise price (in dollars per share) | $ 3 | |||||
Class of warrant or right, term | 5 years | |||||
Number of shares converted from debt instrument (in shares) | 359,999 | |||||
Various Institutional Holders; January 2018 | ||||||
Class of Warrant or Right [Line Items] | ||||||
Underlying shares (in shares) | 23,055 | |||||
Exercise price (in dollars per share) | $ 270 | |||||
Various Institutional Holders; April 2020 | ||||||
Class of Warrant or Right [Line Items] | ||||||
Underlying shares (in shares) | 12,487 | |||||
Exercise price (in dollars per share) | $ 120 | |||||
Various Institutional Holders; February 2020 | ||||||
Class of Warrant or Right [Line Items] | ||||||
Underlying shares (in shares) | 23,826 | |||||
Exercise price (in dollars per share) | $ 67.2 | |||||
Various Institutional Holders; December 2020 | ||||||
Class of Warrant or Right [Line Items] | ||||||
Underlying shares (in shares) | 4,081 | |||||
Exercise price (in dollars per share) | $ 49.8 | |||||
Various Institutional Holders; January 2021 | ||||||
Class of Warrant or Right [Line Items] | ||||||
Underlying shares (in shares) | 38,733 | |||||
Exercise price (in dollars per share) | $ 36.3 | |||||
Various Institutional Holders; January 2021 | ||||||
Class of Warrant or Right [Line Items] | ||||||
Underlying shares (in shares) | 29,168 | |||||
Exercise price (in dollars per share) | $ 36.3 | |||||
New Bridge Warrants | ||||||
Class of Warrant or Right [Line Items] | ||||||
Underlying shares (in shares) | 45,600 | |||||
Exercise price (in dollars per share) | $ 2.75 | |||||
Side Warrants | ||||||
Class of Warrant or Right [Line Items] | ||||||
Underlying shares (in shares) | 91,429 | |||||
Exercise price (in dollars per share) | $ 7 | |||||
Warrants, fair value | $ 487,000 | |||||
Side Warrants | Common Stock | ||||||
Class of Warrant or Right [Line Items] | ||||||
Underlying shares (in shares) | 91,429 | |||||
Exercise price (in dollars per share) | $ 7 | |||||
Warrants, fair value | $ 487,000 | |||||
Class of warrant or right, term | 5 years | |||||
Offering Warrants | ||||||
Class of Warrant or Right [Line Items] | ||||||
Stock rights issued (in shares) | 2,680,000 | |||||
Underlying shares (in shares) | 2,680,000 | |||||
Exercise price (in dollars per share) | $ 3 | $ 3 | ||||
Class of warrant or right, term | 5 years | |||||
Offering Warrants | Common Stock | ||||||
Class of Warrant or Right [Line Items] | ||||||
Percentage of outstanding shares owned threshold prior to exercise of warrants | 4.99% | |||||
Percentage of outstanding shares owned threshold after exercise of warrants | 9.99% | |||||
Representative Warrants | ||||||
Class of Warrant or Right [Line Items] | ||||||
Underlying shares (in shares) | 60,000 | 60,000 | ||||
Exercise price (in dollars per share) | $ 3.125 | $ 3.125 | ||||
Warrants, fair value | $ 113,000 | |||||
Proceeds from issuance of warrants | $ 100 | |||||
Series A Conversion Warrants | ||||||
Class of Warrant or Right [Line Items] | ||||||
Underlying shares (in shares) | 856,446 | 856,446 | ||||
Exercise price (in dollars per share) | $ 10 | $ 10 | ||||
Warrants, fair value | $ 1,400,000 | |||||
Class of warrant or right, term | 5 years | |||||
Note Conversion Warrants | ||||||
Class of Warrant or Right [Line Items] | ||||||
Underlying shares (in shares) | 359,999 | |||||
Exercise price (in dollars per share) | $ 3 |
STOCKHOLDERS' EQUITY (DEFICIT67
STOCKHOLDERS' EQUITY (DEFICIT) (Series A Conversion Warrants) (Details) - USD ($) | Aug. 28, 2017 | Mar. 31, 2016 | Sep. 30, 2017 | Jun. 29, 2017 | Jun. 30, 2016 |
Class of Stock [Line Items] | |||||
Underlying shares (in shares) | 4,224,824 | 1,958,204 | |||
Exercise price (in dollars per share) | $ 0 | ||||
Class of warrant or right, term | 10 years | ||||
Warrants, fair value | $ 211,000 | $ 211,000 | $ 1,421,738 | ||
Series A Conversion Warrants | |||||
Class of Stock [Line Items] | |||||
Underlying shares (in shares) | 856,446 | 856,446 | |||
Exercise price (in dollars per share) | $ 10 | $ 10 | |||
Class of warrant or right, term | 5 years | ||||
Warrants, fair value | $ 1,400,000 |
STOCKHOLDERS' EQUITY (DEFICIT68
STOCKHOLDERS' EQUITY (DEFICIT) (Note Conversion Warrants) (Details) - USD ($) $ / shares in Units, $ in Thousands | Aug. 28, 2017 | Mar. 31, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Jun. 29, 2017 |
Class of Stock [Line Items] | |||||
Exercise price (in dollars per share) | $ 0 | ||||
Class of warrant or right, term | 10 years | ||||
Common Stock | |||||
Class of Stock [Line Items] | |||||
Exercise price (in dollars per share) | $ 2.75 | $ 7.50 | |||
Bridge Loan | |||||
Class of Stock [Line Items] | |||||
Debt converted | $ 900 | $ 1,787 | $ 0 | ||
Loss on extinguishment of debt and induced conversion of convertible bridge notes | $ 1,000 | ||||
Bridge Loan | Common Stock | |||||
Class of Stock [Line Items] | |||||
Conversion of debt into stock (in shares) | 359,999 | ||||
Exercise price (in dollars per share) | $ 3 | ||||
Class of warrant or right, term | 5 years |
FAIR VALUE (Narratives) (Detail
FAIR VALUE (Narratives) (Details) - 2016 Warrant Liability | 9 Months Ended |
Sep. 30, 2017$ / sharesshares | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Warrants outstanding (in shares) | shares | 25,584 |
Share price (in dollars per share) | $ / shares | $ 2.16 |
Volatility (as a percent) | 137.00% |
Risk-free interest rate (as a percent) | 1.20% |
FAIR VALUE (Details)
FAIR VALUE (Details) - 2016 Warrant Liability - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2017 | Sep. 30, 2017 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | $ 618 | $ 0 |
Additions | 0 | 615 |
Total (gains) or losses: | ||
Recognized in earnings | 0 | 3 |
Balance at end of period | $ 618 | $ 618 |
STOCK OPTIONS (Rollforward) (De
STOCK OPTIONS (Rollforward) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Weighted-Average Exercise Price | ||||
Stock-based compensation, less than | $ 100 | $ 100 | $ 100 | $ 100 |
Unrecognized compensation expense related to unvested stock awards | $ 400 | $ 400 | ||
Unvested stock options, unrecognized compensation expense weighted average recognition period | 3 years 10 months | |||
Employee Stock Option | Equity Incentive Plan 2006 | ||||
Number of Options | ||||
Outstanding at beginning of period (in shares) | 24,600 | |||
Granted (in shares) | 225,332 | |||
Forfeited (in shares) | (13,044) | |||
Outstanding at end of period (in shares) | 236,888 | 236,888 | ||
Exercisable at end of period (in shares) | 10,284 | 10,284 | ||
Weighted-Average Exercise Price | ||||
Outstanding at beginning of period (in dollars per share) | $ 107.83 | |||
Granted (in dollars per share) | 1.87 | |||
Forfeited (in dollars per share) | 103.13 | |||
Outstanding at end of period (in dollars per share) | $ 7.30 | 7.30 | ||
Exercisable at end of period (in dollars per share) | $ 121.97 | $ 121.97 | ||
Stock options, expected to vest, outstanding (in shares) | 236,590 | 236,590 | ||
Stock options, expected to vest, outstanding, aggregate intrinsic value | $ 100 | $ 100 | ||
Stock options, expected to vest remaining contractual term | 9 years 11 months | |||
Weighted average grant date fair value (in dollars per share) | $ 1.63 |
STOCK OPTIONS (Stock Appreciati
STOCK OPTIONS (Stock Appreciation Rights) (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Accrued expenses | $ 1,323,000 | $ 50,000 |
SARs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock appreciation rights, aggregate intrinsic value, outstanding | 0 | |
Decrease in SAR liability | 1,000 | |
Accrued expenses | $ 0 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - USD ($) | Nov. 02, 2017 | Oct. 31, 2017 | Mar. 31, 2016 | Sep. 30, 2017 | Aug. 28, 2017 | Jun. 29, 2017 | Jun. 13, 2017 | Dec. 31, 2016 | Jun. 30, 2016 |
Subsequent Event [Line Items] | |||||||||
Exercise price (in dollars per share) | $ 0 | ||||||||
Class of warrant or right, term | 10 years | ||||||||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |||||||
Underlying shares (in shares) | 4,224,824 | 1,958,204 | |||||||
Common Stock | |||||||||
Subsequent Event [Line Items] | |||||||||
Shares callable by warrant (in shares) | 400 | ||||||||
Exercise price (in dollars per share) | $ 2.75 | $ 7.50 | |||||||
Conversion price (in dollars per share) | $ 10.2502 | ||||||||
Underlying shares (in shares) | 45,600 | ||||||||
Subsequent Events | Private Placement | |||||||||
Subsequent Event [Line Items] | |||||||||
Units available for sale in private placement (in shares) | 2,748 | ||||||||
Proceeds from issuance of warrants | $ 2,748,000 | ||||||||
Subsequent Events | Private Placement | Convertible Preferred Stock | |||||||||
Subsequent Event [Line Items] | |||||||||
Sale of stock, number of shares per unit (in shares) | 1 | ||||||||
Preferred stock, par value (in dollars per share) | $ 0.01 | ||||||||
Share price (in dollars per share) | 1,000 | ||||||||
Conversion price (in dollars per share) | 1.40 | ||||||||
Subsequent Events | Private Placement | Common Stock | |||||||||
Subsequent Event [Line Items] | |||||||||
Exercise price (in dollars per share) | $ 1.63 | ||||||||
Underlying shares (in shares) | 1,962,857 | ||||||||
Subsequent Events | Debt Settlement Agreement | |||||||||
Subsequent Event [Line Items] | |||||||||
Shares callable by warrant (in shares) | 86,000 | ||||||||
Exercise price (in dollars per share) | $ 7.50 | ||||||||
Subsequent Events | Security Agreement | |||||||||
Subsequent Event [Line Items] | |||||||||
Exercise price (in dollars per share) | $ 7.50 | ||||||||
Class of warrant or right, term | 5 years | ||||||||
Settlement Agreement | Subsequent Events | |||||||||
Subsequent Event [Line Items] | |||||||||
Debt forgiveness, amount | $ 5,000,000 | ||||||||
Secured debt | $ 2,500,000 | ||||||||
Debt instrument, term | 48 months |