Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2015 | Apr. 30, 2015 | |
Document And Entity Information | ||
Entity Registrant Name | MELA SCIENCES, INC. /NY | |
Entity Central Index Key | 1051514 | |
Document Type | 10-Q | |
Document Period End Date | 31-Mar-15 | |
Amendment Flag | FALSE | |
Current Fiscal Year End Date | -19 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 8,113,061 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2015 |
BALANCE_SHEETS
BALANCE SHEETS (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Current Assets: | ||
Cash and cash equivalents | $8,233,044 | $11,433,579 |
Restricted cash | 100,000 | 0 |
Accounts receivable (net of allowance of $95,477 and $94,838 as of March 31, 2015 and December 31, 2014, respectively) | 5,845 | 220,534 |
Inventory (net of reserves of $1,408,453 as of March 31, 2015 and December 31, 2014) | 5,187,926 | 5,274,803 |
Prepaid expenses and other current assets | 350,165 | 274,031 |
Total Current Assets | 13,876,980 | 17,202,947 |
Property and equipment, net | 1,620,365 | 1,961,376 |
Patents and trademarks, net | 35,450 | 36,719 |
Deferred financing costs | 640,981 | 820,775 |
Other assets | 48,000 | 48,000 |
Total Assets | 16,221,776 | 20,069,817 |
Current Liabilities: | ||
Accounts payable (includes related parties of $67,500 and $73,792 as of March 31, 2015 and December 31, 2014, respectively) | 1,320,274 | 1,239,919 |
Accrued expenses | 651,186 | 841,918 |
Deferred revenue | 25,391 | 42,843 |
Warrant liability | 1,833,638 | 499,089 |
Other current liabilities | 54,434 | 61,829 |
Total Current Liabilities | 3,884,923 | 2,685,598 |
Long Term Liabilities: | ||
Deferred revenue | 16,420 | 26,500 |
Deferred rent | 70,075 | 80,084 |
Senior secured convertible debentures (net of discount of $6,395,105 and $8,410,187 at March 31, 2015 and December 31, 2014, respectively) | 4,707,410 | 5,000,826 |
Total Long Term Liabilities | 4,793,905 | 5,107,410 |
Total Liabilities | 8,678,828 | 7,793,008 |
COMMITMENTS AND CONTINGENCIES | ||
Stockholders' Equity: | ||
Preferred stock - $0.10 par value; authorized 10,000,000 shares: issued and outstanding: 10,279 at March 31, 2015 and 11,787 at December 31, 2014 | 1,028 | 1,179 |
Common stock - $0.001 par value; authorized 50,000,000 shares: Issued and outstanding 7,525,146 shares at March 31, 2015 and 6,037,232 at December 31, 2014 | 7,525 | 6,037 |
Additional paid-in capital | 197,100,186 | 194,562,963 |
Accumulated deficit | -189,565,791 | -182,293,370 |
Total Stockholders' Equity | 7,542,948 | 12,276,809 |
Total Liabilities and Stockholders' Equity | $16,221,776 | $20,069,817 |
BALANCE_SHEETS_Parenthetical
BALANCE SHEETS (Parenthetical) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Allowance for accounts receivable, current | $95,477 | $94,838 |
Inventory, net of reserves | 1,408,453 | 1,408,453 |
Accounts payable, related parties | 67,500 | 73,792 |
Senior secured convertible debentures, discount | $6,395,105 | $8,410,187 |
Preferred Stock, Par or Stated Value Per Share | $0.10 | $0.10 |
Preferred Stock, Shares Authorized | 10,000,000 | 10,000,000 |
Preferred Stock, Shares Issued | 10,279 | 11,787 |
Preferred Stock, Shares Outstanding | 10,279 | 11,787 |
Common Stock, Par or Stated Value Per Share | $0.00 | $0.00 |
Common Stock, Shares Authorized | 50,000,000 | 50,000,000 |
Common Stock, Shares, Issued | 7,525,146 | 6,037,232 |
Common Stock, Shares, Outstanding | 7,525,146 | 6,037,232 |
STATEMENTS_OF_OPERATIONS
STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Income Statement [Abstract] | ||
Net revenues | $81,200 | $97,638 |
Cost of revenue | 710,880 | 918,523 |
Gross profit | -629,680 | -820,885 |
Operating expenses: | ||
Research and development | 238,874 | 707,824 |
Selling, general and administrative | 2,762,991 | 3,203,533 |
Total operating expenses | 3,001,865 | 3,911,357 |
Operating loss | -3,631,545 | -4,732,242 |
Other income (expenses): | ||
Interest income | 1,126 | 618 |
Interest expense | -2,324,963 | -1,199 |
Change in fair value of warrant liability | -1,334,549 | 137,142 |
Registration rights liquidating damages | 0 | -3,389,940 |
Other income, net | 17,510 | 5,025 |
Nonoperating Income (Expense) | -3,640,876 | -3,248,354 |
Net loss | ($7,272,421) | ($7,980,596) |
Basic and diluted net loss per common share | ($1.12) | ($1.63) |
Basic and diluted weighted average number of common shares outstanding | 6,471,906 | 4,892,641 |
STATEMENTS_OF_CASH_FLOWS
STATEMENTS OF CASH FLOWS (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Cash flows from operating activities: | ||
Net loss | ($7,272,421) | ($7,980,596) |
Adjustments to reconcile net loss: | ||
Depreciation and amortization | 316,243 | 696,800 |
Bad debt expense | 639 | 700 |
Share-based compensation | 230,062 | 164,168 |
Amortization of debt discount | 2,015,082 | 0 |
Amortization of deferred financing costs | 179,794 | 0 |
Change in fair value of warrant liability | 1,334,549 | -137,142 |
Changes in operating assets and liabilities: | ||
Restricted cash | -100,000 | 0 |
Accounts receivable | 214,050 | 22,330 |
Inventory | 112,914 | -16,815 |
Prepaid expenses and other current assets | -76,134 | 414,558 |
Accounts payable and accrued expenses | -110,377 | -192,101 |
Other current liabilities | -7,395 | -6,119 |
Deferred rent | -10,009 | -10,009 |
Deferred revenue | -27,532 | -76,661 |
Net cash used in operating activities | -3,200,535 | -7,120,887 |
Cash flows from investing activities: | ||
Purchases of property and equipment | 0 | 0 |
Net cash used in investing activities | 0 | 0 |
Cash flows from financing activities: | ||
Net proceeds from private placements/public offerings | 0 | 11,460,715 |
Net cash provided by financing activities | 0 | 11,460,715 |
Net (decrease)/increase in cash and cash equivalents | -3,200,535 | 4,339,828 |
Cash and cash equivalents at beginning of period | 11,433,579 | 3,782,881 |
Cash and cash equivalents at end of period | 8,233,044 | 8,122,709 |
Supplemental Disclosure of Cash Flow Information: | ||
Cash paid for interest | 139,000 | 0 |
Supplemental Disclosure of Non-cash Investing and Financing Activities: | ||
Conversion of convertible preferred stock into common stock | 1,508,000 | 0 |
Conversion of senior secured convertible debentures into common stock | 2,308,498 | 0 |
Reclassification of MelaFind components from property and equipment to inventory, net | $26,037 | $0 |
ORGANIZATION_AND_BASIS_OF_PRES
ORGANIZATION AND BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2015 | |
Accounting Policies [Abstract] | |
ORGANIZATION AND BASIS OF PRESENTATION | 1. ORGANIZATION AND BASIS OF PRESENTATION |
The Company is a medical technology company dedicated to designing and developing innovative software-driven technology for the early detection and prevention of skin cancer. The Company is focused on the commercialization of its flagship product, the MelaFind® System, or (“MelaFind”), as well as the further design and development of this technology. MelaFind is a non-invasive, point-of-care (in the doctor’s office) instrument to aid in the detection of melanoma. The system features a hand-held component that emits light of multiple wavelengths to capture digital data from clinically atypical pigmented skin lesions. The data are then analyzed utilizing sophisticated classification algorithms that have been “trained” by the Company’s proprietary database of melanomas and benign lesions. This result provides information to assist in the management of the patient’s disease, including information useful in the decision of whether to biopsy the lesion. | |
Sales of MelaFind have not met the Company’s expectations. Beginning in 2013, the Company undertook several steps that it believes may significantly improve MelaFind’s commercial acceptance by: 1) changing its business model from solely a rental-based model to include a capital sales option; 2) refocusing its marketing efforts on medical dermatology, and particularly those dermatologists who treat patients at high risk for melanoma; and 3) beginning the process of obtaining a coverage determination from the Centers for Medicare & Medicaid Services (“CMS”), the federal agency that administers Medicare, in order to obtain reimbursement by Medicare and ultimately by private insurers for the use of MelaFind. During 2014, the Company made significant strides in each of these areas, although it anticipates that it will require a few years of continued effort before the success of this strategy can be assessed. Specifically, the Company anticipates that the insurance reimbursement process could take several years to complete. | |
In July 2014, MELA announced that it took the first step in the process of obtaining insurance reimbursement for its Multi-Spectral Digital Skin Lesion Analysis (“MSDSLA”) procedure that is performed by dermatologists utilizing MelaFind as an aid in the detection of melanoma. The Company submitted an application for a Current Procedural Terminology (“CPT”) code, which is necessary for Medicare Part B reimbursement by the Centers for Medicare and Medicaid Services (“CMS”). On March 9, 2015, the February 2015 CPT® Editorial Summary of Panel Actions was posted to the website of the American Medical Association (the “AMA”). The CPT Editorial Panel accepted the addition of Category III codes 039XX1T and 039XX2T to report MSDSLA of atypical cutaneous lesions, which applies to MelaFind. Barring any further action by the Panel, the Company expects that these codes will be posted to the AMA CPT website by July 1, 2015, with an effective date of January 1, 2016, and will provide the basis for pursuing third party and CMS insurance coverage for MelaFind. Efforts to obtain reimbursement from private insurers are underway, but could take several years to complete. | |
During the first quarter of 2015, the Company voluntarily removed certain aspects of MelaFind’s user interface on systems in service in the United States after completing an internal review of the device’s Pre-Market Approval (“PMA”) requirements related to the user interface. The Company took this voluntary action in order to facilitate FDA review of other aspects of MelaFind’s user interface. Upon the completion of the review, the Company will re-assess and make appropriate revisions to the user interface. Our MelaFind systems in use outside the United States were not affected by this action. | |
On March 26, 2015, the Company implemented a plan of termination that resulted in a workforce reduction of nine employees in order to reduce operating costs. The workforce reduction was completed by April 1, 2015, which was the termination date for all of the affected employees. As a result of the workforce reduction, the Company accrued severance-related charges of $110,000 in the first quarter of 2015. Substantially all of the severance-related charges are expected to be paid during the second quarter of 2015. | |
Until the Company obtains insurance reimbursement from the CMS and private insurers, it expects that revenues will not be sufficient to cover operating and other expenses. The Company’s financial success will depend on a number of factors, primary among which is the ability to sell MelaFind, increase the penetration with dermatologists, encourage the usage of these systems, and control costs. Currently, the Company cannot determine when it will have sufficient revenues to cover continuing developmental costs, manufacturing, marketing and other operational expenses and has experienced recurring losses and negative cash flow from operations. As a result of these factors, the Company has been and continues to be dependent on raising capital from the sale of securities in order to operate and to meet its obligations in the ordinary course of business. In February 2014, the Company raised net proceeds of approximately $11.5 million from the sale of Series A convertible preferred stock and warrants to purchase common stock to strengthen the Company’s financial position (see Footnote 11 “STOCKHOLDERS’ EQUITY”). In July 2014, the Company issued Series B convertible preferred stock, senior secured convertible debt and warrants, raising an additional $13.8 million in net proceeds (see Footnote 9 “DEBT”). The proceeds from the sale of the Series B convertible preferred stock were used to redeem all outstanding shares of Series A convertible preferred stock. | |
The unaudited condensed financial statements included herein have been prepared from the books and records of the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for reporting on Form 10-Q. The information and note disclosures normally included in complete financial statements prepared in accordance with generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to such rules and regulations. Interim results may not be indicative of the results that may be expected for the year. The interim financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. | |
The accompanying financial statements have been prepared on a basis which assumes that the Company will continue as a going concern and which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The Company has devoted substantially all of its cash resources to the development and marketing of the MelaFind system and general and administrative expenses, and to date it has not generated any significant revenues from the sale of products. As a result, MELA has an accumulated deficit of $189,565,791 as of March 31, 2015. The Company’s recurring losses from operations and the accumulated deficit raise substantial doubt about its ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Even if the Company succeeds in commercializing the MelaFind system it may never become profitable. The Company expects to continue to incur significant losses over the next several years. |
USE_OF_ESTIMATES
USE OF ESTIMATES | 3 Months Ended |
Mar. 31, 2015 | |
Use Of Estimates | |
USE OF ESTIMATES | 2. USE OF ESTIMATES |
The preparation of financial statements in conformity with GAAP requires the use of estimates and assumptions by management that affect reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The most significant estimates relate to inventory reserves, stock-based compensation arrangements, and the warrant liability. Actual results could differ from these estimates. Estimates of future operating results are based upon numerous factors including past experience, known information and subjective estimates and assumptions. Actual future operating results could be materially different from management’s estimates and unforeseen events could adversely affect management’s estimates. |
RECENT_ACCOUNTING_PRONOUNCEMEN
RECENT ACCOUNTING PRONOUNCEMENTS | 3 Months Ended |
Mar. 31, 2015 | |
Accounting Changes and Error Corrections [Abstract] | |
RECENT ACCOUNTING PRONOUNCEMENTS | 3. RECENT ACCOUNTING PRONOUNCEMENTS |
In April 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-03, “Simplifying the Presentation of Debt Issuance Costs” (Subtopic 835-30). ASU No. 2015-03 provides guidance that will require debt issuance costs related to a recognized debt liability to be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. ASU No. 2015-03 affects disclosures related to debt issuance costs but does not affect existing recognition and measurement guidance for these items. ASU No. 2015-03 is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2015. The adoption of this guidance is not expected to have a material impact on the Company’s results of operations, financial position or disclosures. | |
In August 2014, FASB issued ASU No. 2014-15 on “Presentation of Financial Statements Going Concern” (Subtopic 205-40) – Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern”. Currently, there is no guidance in U.S. GAAP about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern or to provide related footnote disclosures. The amendments in this update provide that guidance. In doing so, the amendments are intended to reduce diversity in the timing and content of footnote disclosures. The amendments require management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every reporting period including interim periods, (3) provide principles for considering the mitigating effect of management’s plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). The amendments in this update are effective for annual periods ending after December 15, 2016. Early adoption is permitted. The Company is currently evaluating the new guidance to determine the impact the adoption of this guidance will have on the Company’s results of operations, cash flows or financial condition. | |
In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606).” ASU 2014-09 outlines a new, single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. This new revenue recognition model provides a five-step analysis in determining when and how revenue is recognized. The new model will require revenue recognition to depict the transfer of promised goods or services to customers in an amount that reflects the consideration a company expects to receive in exchange for those goods or services. ASU 2014-09 is effective for public entities for annual reporting periods beginning after December 15, 2016 and interim periods within those periods. Early adoption is not permitted. Companies may use either a full retrospective or a modified retrospective approach to adopt ASU 2014-09. In April 2015, the FASB voted for a one year deferral of the effective date of ASU 2014-09 and issued an exposure draft. If approved, the new guidance will be effective for annual and interim periods beginning on or after December 15, 2017. The Company is currently assessing the impact that adopting this new accounting guidance will have on its consolidated financial statements and footnote disclosures. |
INVENTORY
INVENTORY | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Inventory Disclosure [Abstract] | |||||||||
INVENTORY | 4. INVENTORY | ||||||||
Inventories currently consist of MelaFind systems; work in process components and other finished products and accessories that are stated at the lower of cost or fair value. Inventory accessories are purchased items to be sold for use in the operation of the MelaFind systems. The Company maintains a reserve for specific inventory items that are no longer being used in the devices. This reserve consists of approximately $280,344 in phantom fixture finished goods, $264,550 in work in process phantom fixture assemblies, and $325,000 in MelaFind system accessories. | |||||||||
Beginning in the second quarter of 2014, the Company deferred repairs of certain of its MelaFind system units that it determined were unlikely to be sold during the next several periods. The Company periodically estimates the cost to restore its system units to sellable condition and currently maintains a repair reserve of $538,559 for this purpose. | |||||||||
Inventory consists of the following: | |||||||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
MelaFind Systems | $ | 3,197,421 | $ | 3,266,586 | |||||
Components/raw materials | 2,552,612 | 2,552,612 | |||||||
Accessories | 496,346 | 514,058 | |||||||
Hand-held Imager assemblies | 350,000 | 350,000 | |||||||
6,596,379 | 6,683,256 | ||||||||
Reserve for obsolete inventory | (869,894 | ) | (869,894 | ) | |||||
Reserve for inventory repairs | (538,559 | ) | (538,559 | ) | |||||
$ | 5,187,926 | $ | 5,274,803 |
PROPERTY_AND_EQUIPMENT_NET
PROPERTY AND EQUIPMENT, NET | 3 Months Ended | ||||||||||
Mar. 31, 2015 | |||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||
PROPERTY AND EQUIPMENT, NET | 5. PROPERTY AND EQUIPMENT, NET | ||||||||||
The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An asset is considered to be impaired when its carrying amount exceeds the sum of the undiscounted future net cash flows expected to result from the use of the asset and its eventual disposition. The amount of impairment loss, if any, is measured as the difference between the net book value of the asset and its estimated fair value. | |||||||||||
In December 2013, the Company amended its business model for the MelaFind system from solely a rental-based to include a capital sales option. In accordance with this new sales model, the Company reclassified $5,401,866 of MelaFind systems from property and equipment into inventory at December 31, 2013. The systems reclassified into inventory represent systems available for sale. Systems that have been leased under the rental-based model remain in property and equipment. | |||||||||||
During the first quarter of 2015, the Company experienced net movements of MelaFind systems from property and equipment to inventory amounting to $26,037, representing a decrease of $82,795 in net book value of MelaFind systems primarily returned from expired leases, partially offset by $56,758 newly placed research units and replacement parts for existing commercial leases. | |||||||||||
Property and equipment, at cost, consists of the following: | |||||||||||
March 31, | December 31, | Estimated | |||||||||
2015 | 2014 | Useful Life | |||||||||
Leasehold improvements | $ | 905,888 | $ | 905,888 | Lease Term | ||||||
Laboratory and research equipment | 1,083,661 | 1,083,661 | 3-5 years | ||||||||
Office furniture and equipment | 1,969,454 | 1,969,454 | 3-5 years | ||||||||
MelaFind Systems | 2,954,468 | 3,193,436 | 3 years | ||||||||
6,913,471 | 7,152,439 | ||||||||||
Accumulated depreciation and amortization | (5,293,106 | ) | (5,191,063 | ) | |||||||
$ | 1,620,365 | $ | 1,961,376 | ||||||||
Depreciation expense for the three months ended March 31, 2015 and March 31, 2014 was $314,974 and $695,531, respectively. |
NET_LOSS_PER_COMMON_SHARE
NET LOSS PER COMMON SHARE | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Earnings Per Share [Abstract] | |||||||||
NET LOSS PER COMMON SHARE | 6. NET LOSS PER COMMON SHARE | ||||||||
Basic net loss per common share excludes dilution for potentially dilutive securities and is computed by dividing net loss attributable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted net loss per common share gives effect to dilutive options, warrants and other potential common shares outstanding during the period. Diluted net loss per common share is equal to the basic net loss per common share since all potentially dilutive securities are anti-dilutive for each of the periods presented. Potential common stock equivalents outstanding as of March 31, 2015 and March 31, 2014 consist of common stock equivalents of common stock purchase warrants, senior secured convertible debentures, convertible preferred stock, common stock options and unvested restricted stock awards, which are summarized as follows: | |||||||||
March 31, | |||||||||
2015 | 2014 | ||||||||
Common stock purchase warrants | 13,078,920 | 2,104,767 | |||||||
Common stock equivalents of convertible debebtures | 4,328,466 | - | |||||||
Common stock equivalents of convertible preferred stock | 4,007,406 | 1,464,287 | |||||||
Common stock options | 1,293,701 | 290,801 | |||||||
Restricted stock awards | - | 6,512 | |||||||
Total | 22,708,493 | 3,866,367 |
COMPREHENSIVE_LOSS
COMPREHENSIVE LOSS | 3 Months Ended |
Mar. 31, 2015 | |
Equity [Abstract] | |
COMPREHENSIVE LOSS | 7. COMPREHENSIVE LOSS |
For all periods presented, the Company had no comprehensive income items and accordingly there is no difference between the reported net loss and per share amounts per the Statement of Operations. |
STOCKBASED_COMPENSATION
STOCK-BASED COMPENSATION | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||
STOCK-BASED COMPENSATION | 8. STOCK-BASED COMPENSATION | ||||||||
Stock awards under the Company’s stock option plans have been granted with exercise prices that are no less than the market value of the stock on the date of the grant. Options granted under the plans are generally time-based or performance-based options and vesting varies accordingly. Options under the plans expire up to a maximum of ten years from the date of grant. Stock-based compensation to non-employee consultants, accounted for pursuant to FASB ASC 505-50-5, Equity, Equity Based Payments to Non-Employees, is granted for services rendered and is completely vested on the grant date. | |||||||||
The fair value of each option award granted during the period is estimated on the date of grant using the Black-Scholes option valuation model and assumptions as noted in the following table: | |||||||||
March 31, | |||||||||
2015 | 2014 | ||||||||
Expected life | - | 6.5 years | |||||||
Expected volatility | 0 | % | 75.51% | ||||||
Risk-free interest rate | - | 2.14-2.45% | |||||||
Dividend yield | - | - | |||||||
There were no grants during the three months ended March 31, 2015. Stock-based compensation expense for the three months ended March 31, 2015 was $230,062, net of forfeitures of $26.951, and for the three months ended March 31, 2014 was $164,168, net of forfeitures of $35,296, and also included $19,452 of non-employee stock-based compensation. As of March 31, 2015 there was $1,027,470 in unrecognized compensation expense. |
DEBT
DEBT | 3 Months Ended |
Mar. 31, 2015 | |
Debt Disclosure [Abstract] | |
DEBT | 9. DEBT |
On July 21, 2014, the Company entered into a definitive Securities Purchase Agreement (the “Purchase Agreement”) with institutional investors (the “Investors”) providing for the issuance of Senior Secured Convertible Debentures in the aggregate principal amount of $15,000,005, due, subject to the terms therein, in July 2019 (the “Debentures”), and warrants (the “July 2014 Series A Warrants”) to purchase up to an aggregate of 6,198,832 shares of common stock, $0.001 par value per share, at an exercise price of $2.45 per share expiring in July 2019. The Debentures bear interest at an annual rate of 4%, payable quarterly or upon conversion into shares of common stock. The Debentures are convertible at any time into an aggregate of 5,847,955 shares of common stock at an initial conversion price of $2.565 per share. The Company’s obligations under the Debentures are secured by a first priority lien on all of the Company’s intellectual property pursuant to the terms of a security agreement (“Security Agreement”) dated July 21, 2014 among the Company and the Investors. In connection with the Purchase Agreement, the Company entered into a Registration Rights Agreement with the Investors pursuant to which the Company was obligated to file a registration statement to register for resale the shares of Common Stock issuable upon conversion of the Series B Preferred Stock (See Note 11) and Debentures and upon exercise of the Warrants. Under the terms of the Registration Rights Agreement, the Company filed a registration statement on August 19, 2014, which was declared effective by the SEC on October 20, 2014 (File No. 333-198249). Proceeds from the Debentures are being used for general working capital purposes. | |
For financial reporting purposes, the $15,000,005 funded by the Investors on July 21, 2014 was allocated first to the fair value of the obligation to issue the Warrants, amounting to $5,296,345, then to the intrinsic value of the beneficial conversion feature on the Debentures of $4,565,350. The balance was further reduced by the fair value of warrants issued to the placement agent for services rendered of $491,228, resulting in an initial carrying value of the Debentures of $4,647,082. The initial debt discount on the Debentures totaled $10,352,923 and will be amortized over the five year life of the Debentures. The Company used a Level 3 fair value measurement to determine fair value of the warrant obligations, which has significant unobservable inputs as defined in Accounting Standards Codification 820 “Fair Value Measures”. The fair value of the warrant obligation was determined using an option pricing model that used various assumptions including: a stock price of $2.44 per share, volatility of 93.46%, time to maturity of 5.0 years, exercise price of $2.45 per share and a risk free interest rate of return of 1.62%. | |
During the three months ended March 31, 2015, the investors converted Debentures amounting to $2,308,498 into 899,999 shares of common stock. The debt discount and deferred financing cost adjustment resulting from the conversions increased interest expense by $1,731,618 for the three months ended March 31, 2015. As of March 31, 2015, the outstanding amount of Debentures was $11,102,515. |
REVERSE_SPLIT_OF_COMMON_STOCK
REVERSE SPLIT OF COMMON STOCK | 3 Months Ended |
Mar. 31, 2015 | |
Stockholders' Equity Note [Abstract] | |
REVERSE SPLIT OF COMMON STOCK | 10. REVERSE SPLIT OF COMMON STOCK |
On July 9, 2014, the Company effected a previously authorized 1-for-10 reverse stock split of its common stock. The reverse split took effect at the start of trading on July 10, 2014 on a 1-for-10 split basis. All prior periods have been retroactively adjusted to reflect the reverse stock split. The par value of the common stock did not change. |
STOCKHOLDERS_EQUITY
STOCKHOLDERS' EQUITY | 3 Months Ended | ||||||||||
Mar. 31, 2015 | |||||||||||
Equity [Abstract] | |||||||||||
STOCKHOLDERS' EQUITY | 11. STOCKHOLDERS’ EQUITY | ||||||||||
Preferred Stock | |||||||||||
The Company is authorized to issue 10,000,000 shares of preferred stock with a par value of $0.10 per share with such designation, rights and preferences as may be determined from time to time by the Company’s Board of Directors. There were 10,279 shares and 11,787 shares of Series B preferred stock issued and outstanding on March 31, 2015 and December 31, 2014, respectively. | |||||||||||
On July 24, 2014, in connection with the Offering (see Note 9 “DEBT”), the Company exchanged 12,300 shares of Series A convertible preferred stock issued on February 5, 2014 with 12,300 shares of Series B convertible preferred stock at a stated value of $1,000 per share convertible into common stock at an initial price of $2.565 per share. The preferred stock is immediately convertible into an aggregate of 4,795,321 shares of common stock. Holders of the Preferred Stock are entitled to dividends only in the event that dividends are paid on the common stock, and the preferred stock has no preferences over the common stock. In connection with the exchange, the Company issued the July 2014 Series B warrants to purchase up to an aggregate of 4,795,321 shares of common stock at an exercise price of $2.45 per share, expiring in January 2016. The July 2014 Series B warrants are immediately exercisable and are subject to certain ownership limitations. | |||||||||||
For financial reporting purposes, the $12,300,000 preferred stock value was allocated first to the fair value of the July 2014 Series B warrants, which totaled $2,486,780, then to the intrinsic value of the beneficial conversion feature of $1,887,364. The amount of the beneficial conversion feature was considered to be a deemed dividend on the date of issuance to the Series B preferred stockholders. Pursuant to the terms of the Purchase Agreement, the Series A convertible preferred stock was redeemed from the proceeds of the Series B convertible preferred stock. In September 2014, the Company amended the registration statement related to the Series A preferred stock to deregister those shares that would have been issuable upon conversion of the Series A preferred stock had it not already been redeemed by the proceeds of the Series B preferred stock. | |||||||||||
During the first quarter of 2015, 1,508 shares of Series B preferred stock was converted into 587, 915 shares of common stock. | |||||||||||
On February 5, 2014, pursuant to a securities purchase agreement, dated as of January 31, 2014, the Company sold an aggregate of 12,300 shares of Series A convertible preferred stock, par value $0.10 and a stated value of $1,000 per share convertible into 1,464,287 shares of common stock at an initial conversion price of $8.40, and warrants to purchase up to 1,329,731 shares of common stock for net proceeds of $11,457,831. The warrants have an exercise price of $7.40 per share, are immediately exercisable and have a term of five years. These warrants have non-standard terms as they relate to a fundamental transaction and require a net-cash settlement upon a change in control of the Company and therefore are classified as a derivative liability and recorded at fair value on the inception date of February 5, 2014. They will be recorded at their respective fair value at each subsequent balance sheet date. The fair value of these warrants on March 31, 2015 was approximately $1,223,352. The change in fair value of these warrants for the three months ended March 31, 2015 was an expense of $957,406 (see footnote 12 “FAIR VALUE OF FINANCIAL INSTRUMENTS”). | |||||||||||
In connection with this financing, the Company also granted resale registration rights with respect to the shares of common stock underlying the Series A preferred stock and the warrants pursuant to the terms of a Registration Rights Agreement. The purchasers were entitled to receive liquidated damages upon the occurrence of a number of events relating to filing, effectiveness and maintaining an effective registration statement covering the shares underlying the Series A Preferred Stock and the warrants. The Company was unable to meet certain filing and effectiveness requirements and as a result paid liquidated damages to the Purchasers in the aggregate amount of $3,419,698 of which $3,389,940 was incurred during the three months ended March 31, 2014. Under the terms of the Registration Rights Agreement, the Company filed a registration statement on March 18, 2014, which was declared effective by the SEC on April 3, 2014. | |||||||||||
Common Stock and Warrants | |||||||||||
The Company is authorized to issue 50,000,000 shares of common stock with a par value of $0.001 per share. There were 7,525,146 and 6,037,232 issued and outstanding at March 31, 2015 and December 31, 2014, respectively. | |||||||||||
On October 29, 2013, the Company entered into a securities purchase agreement with certain accredited investors in connection with a $6,000,000 registered offering of 422,819 shares of the Company’s common stock, fully paid prefunded Series B Warrants to purchase up to 434,325 shares of its common stock and additional warrants (“October 2013 Series A Warrants”) to purchase up to 685,715 shares of its common stock. The October 2013 Series A Warrants are exercisable beginning on May 1, 2014 at a price of $8.50 per share and expire on May 1, 2019. The prefunded Series B Warrants are exercisable immediately for no additional consideration. The offering closed on October 31, 2013. The holders exercised all of the prefunded Series B warrants in March 2014. | |||||||||||
The October 2013 Series A Warrants have non-standard terms as they relate to a fundamental transaction and require a net-cash settlement upon a change in control of the Company and therefore are classified as a derivative. Therefore, these warrants have been recorded at fair value at the inception date of October 31, 2013, and will be recorded at their respective fair values at each subsequent balance sheet date. The fair value of these warrants on March 31, 2015 was approximately $610,286. The change in fair value of these warrants for the three months ended March 31, 2015 and 2014, was an expense of $377,143 and a benefit of $137,142 , respectively (see footnote 12 “FAIR VALUE OF FINANCIAL INSTRUMENTS”). | |||||||||||
Outstanding common stock warrants consist of the following: | |||||||||||
Issue Date | Expiration Date | Total | Ex. Price | ||||||||
Warrants | |||||||||||
4/26/2013 | 4/26/18 | 69,321 | $ | 11.18 | |||||||
10/31/13 | 4/30/19 | 685,715 | $ | 8.5 | |||||||
2/5/2014 | 2/5/19 | 1,329,731 | $ | 7.4 | |||||||
7/24/2014 | 7/24/19 | 6,198,832 | $ | 2.45 | |||||||
7/24/2014 | 1/24/16 | 4,795,321 | $ | 2.45 | |||||||
13,078,920 |
FAIR_VALUE_OF_FINANCIAL_INSTRU
FAIR VALUE OF FINANCIAL INSTRUMENTS | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Fair Value Of Financial Instruments | |||||||||
FAIR VALUE OF FINANCIAL INSTRUMENTS | 12. FAIR VALUE OF FINANCIAL INSTRUMENTS | ||||||||
Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value for applicable assets and liabilities, the Company considers the principal or most advantageous market in which it would transact and consider assumptions market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance. This guidance also establishes a fair value hierarchy to prioritize inputs used in measuring fair value as follows: | |||||||||
• | Level 1: Observable inputs such as quoted prices in active markets; | ||||||||
• | Level 2: Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and | ||||||||
• | Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. | ||||||||
The Company’s financial instruments are cash and cash equivalents, accounts payable, and derivative warrant liabilities. The recorded values of cash equivalents and accounts payable approximate their fair values based on their short-term nature. The fair value of derivative warrant liabilities is estimated using option pricing models that are based on the individual characteristics of our warrants, preferred and common stock, the derivative warrant liability on the valuation date as well as assumptions for volatility, remaining expected life, risk-free interest rate and, in some cases, credit spread. The derivative warrant liabilities are the only recurring Level 3 fair value measures. | |||||||||
The warrants have non-standard terms as they relate to a fundamental transaction and require a net-cash settlement upon change in control of the Company and therefore are classified as a derivative. These warrants have been recorded at their fair value using a Black-Scholes option pricing model and will be recorded at their respective fair value at each subsequent balance sheet date. | |||||||||
A summary of quantitative information with respect to the valuation methodology and significant unobservable inputs used for the Company’s warrant liabilities that are categorized within Level 3 of the fair value hierarchy as of March 31, 2015 and December 31, 2014 is as follows: | |||||||||
31-Mar-15 | 31-Dec-14 | ||||||||
Stock Price | $ | 2.57 | $ | 1.2 | |||||
Risk-free Rate (5-year U.S. Treasury Yield) | 1.37% | 1.65% | |||||||
Volatility (Annual) | 81.02-81.34% | 72.90-88.10% | |||||||
Time to Maturity (Years) | 3.85-4.08 | 4.10-4.33 | |||||||
Derivative warrant liabilities consist of the following: | |||||||||
Fair Value | |||||||||
Measurements Using | |||||||||
Significant | |||||||||
Unobservable Inputs | |||||||||
(Level 3) | |||||||||
Warrant Derivative | |||||||||
Liabilities | |||||||||
Balance at December 31, 2014 | $ | 499,089 | |||||||
Changes in estimated fair value | 1,334,549 | ||||||||
Balance at March 31, 2015 | $ | 1,833,638 |
SUBSEQUENT_EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2015 | |
Subsequent Events | |
SUBSEQUENT EVENTS | 13. SUBSEQUENT EVENTS |
In April 2015, 1,508 shares of convertible preferred stock were converted into 587,915 shares of common stock. |
INVENTORY_Tables
INVENTORY (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Inventory Disclosure [Abstract] | |||||||||
Schedule of Inventory | Inventory consists of the following: | ||||||||
March 31, | December 31, | ||||||||
2015 | 2014 | ||||||||
MelaFind Systems | $ | 3,197,421 | $ | 3,266,586 | |||||
Components/raw materials | 2,552,612 | 2,552,612 | |||||||
Accessories | 496,346 | 514,058 | |||||||
Hand-held Imager assemblies | 350,000 | 350,000 | |||||||
6,596,379 | 6,683,256 | ||||||||
Reserve for obsolete inventory | (869,894 | ) | (869,894 | ) | |||||
Reserve for inventory repairs | (538,559 | ) | (538,559 | ) | |||||
$ | 5,187,926 | $ | 5,274,803 |
PROPERTY_AND_EQUIPMENT_NETt_Ta
PROPERTY AND EQUIPMENT, NETt (Tables) | 3 Months Ended | ||||||||||
Mar. 31, 2015 | |||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||
Summary of Property and Equipment | Property and equipment, at cost, consists of the following: | ||||||||||
March 31, | December 31, | Estimated | |||||||||
2015 | 2014 | Useful Life | |||||||||
Leasehold improvements | $ | 905,888 | $ | 905,888 | Lease Term | ||||||
Laboratory and research equipment | 1,083,661 | 1,083,661 | 3-5 years | ||||||||
Office furniture and equipment | 1,969,454 | 1,969,454 | 3-5 years | ||||||||
MelaFind Systems | 2,954,468 | 3,193,436 | 3 years | ||||||||
6,913,471 | 7,152,439 | ||||||||||
Accumulated depreciation and amortization | (5,293,106 | ) | (5,191,063 | ) | |||||||
$ | 1,620,365 | $ | 1,961,376 |
NET_LOSS_PER_COMMON_SHARE_Tabl
NET LOSS PER COMMON SHARE (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Net Loss Per Common Share Tables | |||||||||
Summary common stock equivalents of common stock purchase warrants | Potential common stock equivalents outstanding as of March 31, 2015 and March 31, 2014 consist of common stock equivalents of common stock purchase warrants, senior secured convertible debentures, convertible preferred stock, common stock options and unvested restricted stock awards, which are summarized as follows: | ||||||||
March 31, | |||||||||
2015 | 2014 | ||||||||
Common stock purchase warrants | 13,078,920 | 2,104,767 | |||||||
Common stock equivalents of convertible debebtures | 4,328,466 | - | |||||||
Common stock equivalents of convertible preferred stock | 4,007,406 | 1,464,287 | |||||||
Common stock options | 1,293,701 | 290,801 | |||||||
Restricted stock awards | - | 6,512 | |||||||
Total | 22,708,493 | 3,866,367 |
STOCKBASED_COMPENSATION_Tables
STOCK-BASED COMPENSATION (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||
Schedule of Fair Value of Each Option Award Granted | The fair value of each option award granted during the period is estimated on the date of grant using the Black-Scholes option valuation model and assumptions as noted in the following table: | ||||||||
March 31, | |||||||||
2015 | 2014 | ||||||||
Expected life | - | 6.5 years | |||||||
Expected volatility | 0 | % | 75.51% | ||||||
Risk-free interest rate | - | 2.14-2.45% | |||||||
Dividend yield | - | - |
STOCKHOLDERS_EQUITY_Tables
STOCKHOLDERS' EQUITY (Tables) | 3 Months Ended | ||||||||||
Mar. 31, 2015 | |||||||||||
Equity [Abstract] | |||||||||||
Summary of Significant Accounting Policies | Outstanding common stock warrants consist of the following: | ||||||||||
Issue Date | Expiration Date | Total | Ex. Price | ||||||||
Warrants | |||||||||||
4/26/2013 | 4/26/18 | 69,321 | $ | 11.18 | |||||||
10/31/13 | 4/30/19 | 685,715 | $ | 8.5 | |||||||
2/5/2014 | 2/5/19 | 1,329,731 | $ | 7.4 | |||||||
7/24/2014 | 7/24/19 | 6,198,832 | $ | 2.45 | |||||||
7/24/2014 | 1/24/16 | 4,795,321 | $ | 2.45 | |||||||
13,078,920 |
FAIR_VALUE_OF_FINANCIAL_INSTRU1
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Fair Value Disclosures [Abstract] | |||||||||
Schedule of Fair Value Hierarchy | A summary of quantitative information with respect to the valuation methodology and significant unobservable inputs used for the Company’s warrant liabilities that are categorized within Level 3 of the fair value hierarchy as of March 31, 2015 and December 31, 2014 is as follows: | ||||||||
31-Mar-15 | 31-Dec-14 | ||||||||
Stock Price | $ | 2.57 | $ | 1.2 | |||||
Risk-free Rate (5-year U.S. Treasury Yield) | 1.37% | 1.65% | |||||||
Volatility (Annual) | 81.02-81.34% | 72.90-88.10% | |||||||
Time to Maturity (Years) | 3.85-4.08 | 4.10-4.33 | |||||||
Schedule of Derivative Warrant Liabilities | Derivative warrant liabilities consist of the following: | ||||||||
Fair Value | |||||||||
Measurements Using | |||||||||
Significant | |||||||||
Unobservable Inputs | |||||||||
(Level 3) | |||||||||
Warrant Derivative | |||||||||
Liabilities | |||||||||
Balance at December 31, 2014 | $ | 499,089 | |||||||
Changes in estimated fair value | 1,334,549 | ||||||||
Balance at March 31, 2015 | $ | 1,833,638 |
ORGANIZATION_AND_BASIS_OF_PRES1
ORGANIZATION AND BASIS OF PRESENTATION (Detail Narrative) (USD $) | 1 Months Ended | 3 Months Ended | ||
Jul. 31, 2014 | Feb. 28, 2014 | Mar. 31, 2015 | Dec. 31, 2014 | |
Accounting Policies [Abstract] | ||||
Accrued severance-related charges | $110,000 | |||
Proceeds From Sale Of Convertible Preferred Stock Common Stock And Warrants | 13,800,000 | 11,500,000 | ||
Accumulated deficit | $189,565,791 | $182,293,370 |
INVENTORY_Detail
INVENTORY (Detail) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Inventory [Line Items] | ||
Inventory, Gross | $6,596,379 | $6,683,256 |
Inventory, Net | 5,187,926 | 5,274,803 |
Mela Find Systems [Member] | ||
Inventory [Line Items] | ||
Inventory, Gross | 3,197,421 | 3,266,586 |
Reserve for inventory | -325,000 | |
Components/raw materials [Member] | ||
Inventory [Line Items] | ||
Inventory, Gross | 2,552,612 | 2,552,612 |
Accessories [Member] | ||
Inventory [Line Items] | ||
Inventory, Gross | 496,346 | 514,058 |
Hand Held Imager Assemblies [Member] | ||
Inventory [Line Items] | ||
Inventory, Gross | 350,000 | 350,000 |
Obsolete Inventory [Member] | ||
Inventory [Line Items] | ||
Reserve for inventory | -869,894 | -869,894 |
Inventory Repairs [Member] | ||
Inventory [Line Items] | ||
Reserve for inventory | ($538,559) | ($538,559) |
INVENTORY_Details_Narrative
INVENTORY (Details Narrative) (USD $) | Mar. 31, 2015 |
Mela Find Systems [Member] | |
Inventory [Line Items] | |
Inventory Reserves | $325,000 |
Phantom Fixture Finished Goods [Member] | |
Inventory [Line Items] | |
Inventory Reserves | 280,344 |
Phantom Fixture Assemblies Work In Progress [Member] | |
Inventory [Line Items] | |
Inventory Reserves | $264,550 |
PROPERTY_AND_EQUIPMENT_NET_Det
PROPERTY AND EQUIPMENT, NET (Details) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Dec. 31, 2014 | |
Gross | $6,913,471 | $7,152,439 |
Accumulated depreciation and amortization | -5,293,106 | -5,191,063 |
Net | 1,620,365 | 1,961,376 |
Leasehold Improvements [Member] | ||
Gross | 905,888 | 905,888 |
Estimated Useful Life | Lease Term | |
Laboratory and Research Equipment [Member] | ||
Gross | 1,083,661 | 1,083,661 |
Estimated Useful Life | 3-5 years | |
Office Furniture and Equipment [Member] | ||
Gross | 1,969,454 | 1,969,454 |
Estimated Useful Life | 3-5 years | |
Mela Find Systems [Member] | ||
Gross | $2,954,468 | $3,193,436 |
Estimated Useful Life | 5 years |
PROPERTY_AND_EQUIPMENT_NET_Det1
PROPERTY AND EQUIPMENT, NET (Details Narrative) (USD $) | 3 Months Ended | |||
Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | |
Property, Plant and Equipment [Line Items] | ||||
Inventory, Gross | $6,596,379 | $6,683,256 | ||
Net movements of MelaFind systems from property and equipment to inventory | 26,037 | 0 | ||
Depreciation | 314,974 | 695,531 | ||
Components/raw materials [Member] | Mela Find Systems [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Inventory, Gross | $5,401,866 |
NET_LOSS_PER_COMMON_SHARE_Deta
NET LOSS PER COMMON SHARE (Detail) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Potential common stock equivalents | 22,708,493 | 3,866,367 |
Common Stock Purchase Warrants [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Potential common stock equivalents | 13,078,920 | 2,104,767 |
Common Stock Equivalents of Convertible Debebtures [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Potential common stock equivalents | 4,328,466 | |
Common Stock Equivalents of Convertible Preferred Stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Potential common stock equivalents | 4,007,406 | 1,464,287 |
Common Stock Option [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Potential common stock equivalents | 1,293,701 | 290,801 |
Restricted Stock Awards [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Potential common stock equivalents | 6,512 |
STOCKBASED_COMPENSATION_Detail
STOCK-BASED COMPENSATION (Detail) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Equity [Abstract] | ||
Expected life | 6 years 6 months | |
Expected volatility | 0.00% | 75.51% |
Risk-free interest rate - Minimum | 2.14% | |
Risk-free interest rate | ||
Risk-free interest rate - Maximum | 2.45% | |
Dividend yield |
STOCKBASED_COMPENSATION_Detail1
STOCK-BASED COMPENSATION (Detail Narrative)) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | $230,062 | $164,168 |
Stock-based compensation net of forfeitures | 26,951 | 35,296 |
Non-employee stock-based compensation | 19,452 | |
Unrecognized compensation expense | $1,027,470 | |
Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expiry period of option plans | 10 years |
DEBT_Details_Narrative
DEBT (Details Narrative) (USD $) | 0 Months Ended | 3 Months Ended | 12 Months Ended |
Jul. 21, 2014 | Mar. 31, 2015 | Dec. 31, 2014 | |
Senior Secured Convertible Debentures, amount | $15,000,005 | ||
Common stock, stated value per share | $0.00 | $0.00 | |
Debentures converted to common stock | 5,847,955 | 899,999 | |
Debenture converted to common stock, conversion price | $2.56 | ||
Fair value of warrant obligation | 5,296,345 | ||
Security agreement date | 21-Jul-14 | ||
Intrinsic value of beneficial conversion feature on Debentures | 4,565,350 | ||
Fair Value of Warrants issued to the placement agent for services rendered | 491,228 | ||
Initial carrying value of Debentures | 4,647,082 | ||
Initial debt discount on debentures | 10,352,923 | 6,395,105 | 8,410,187 |
Amortization period of Debentures | 5 years | ||
Exercise prices | $2.57 | $1.20 | |
Risk free interest rate of return | 1.37% | 1.65% | |
Debentures converted to common stock, value | 2,308,498 | ||
Increased interest expense | 1,731,618 | ||
Outstanding amount of Debentures | $11,102,515 | ||
Debenture [Member] | |||
Accrued interest rate | 4.00% | ||
Warrant Obligation [Member] | |||
Stock prices | $2.44 | ||
Volatility | 93.46% | ||
Maturity period | 5 years | ||
Exercise prices | $2.45 | ||
Risk free interest rate of return | 1.62% | ||
Series A- Warrants [Member] | |||
Warrants issued to purchase common stock | 6,198,832 | ||
Common stock, stated value per share | $0.00 | ||
Warrants issued to purchase common stock, exercise price | $2.45 | ||
Warrant expiration period | 2019-07 |
REVERSE_SPLIT_OF_COMMON_STOCK_
REVERSE SPLIT OF COMMON STOCK (Details Narrative) | 0 Months Ended | 3 Months Ended |
Jul. 09, 2014 | Mar. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Reverse stock split, common stock | On July 9, 2014, the Company effected a previously authorized 1-for-10 reverse stock split of its common stock. | |
Reverse stock split ratio, common stock | 0.1 | |
Reverse stock split, effective date | 10-Jul-14 |
STOCKHOLDERS_EQUITY_Details
STOCKHOLDERS' EQUITY (Details) (USD $) | 3 Months Ended |
Mar. 31, 2015 | |
Total Warrants | 13,078,920 |
Common Stock Warrant One [Member] | |
Issue Date | 26-Apr-13 |
Expiration Date | 26-Apr-18 |
Total Warrants | 69,321 |
Ex. Price | $11.18 |
Common Stock Warrant Two [Member] | |
Issue Date | 31-Oct-13 |
Expiration Date | 30-Apr-19 |
Total Warrants | 685,715 |
Ex. Price | $8.50 |
Common Stock Warrant Three [Member] | |
Issue Date | 5-Feb-14 |
Expiration Date | 5-Feb-19 |
Total Warrants | 1,329,731 |
Ex. Price | $7.40 |
Common Stock Warrant Four [Member] | |
Issue Date | 24-Jul-14 |
Expiration Date | 24-Jul-19 |
Total Warrants | 6,198,832 |
Ex. Price | $2.45 |
Common Stock Warrant Five [Member] | |
Issue Date | 24-Jul-14 |
Expiration Date | 24-Jan-16 |
Total Warrants | 4,795,321 |
Ex. Price | $2.45 |
STOCKHOLDERS_EQUITY_Details_Na
STOCKHOLDERS' EQUITY (Details Narrative) (USD $) | 3 Months Ended | 1 Months Ended | 0 Months Ended | |||
Mar. 31, 2015 | Mar. 31, 2014 | Oct. 29, 2013 | Feb. 05, 2014 | Dec. 31, 2014 | Jul. 24, 2014 | |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | ||||
Preferred stock, par value | $0.10 | $0.10 | ||||
Preferred stock, shares issued | 10,279 | 11,787 | ||||
Preferred stock, shares outstanding | 10,279 | 11,787 | ||||
Common stock issued on conversion of preferred stock | 4,795,321 | |||||
Fair value of warrants | $1,223,352 | |||||
Change in fair value of warrants, benefit | 957,406 | |||||
Liquidated damages paid | 0 | 3,389,940 | ||||
Preferred stock value allocated | 1,028 | 1,179 | ||||
Common stock, shares authorized | 50,000,000 | 50,000,000 | ||||
Common stock, par value | $0.00 | $0.00 | ||||
Common stock issued | 7,525,146 | 6,037,232 | ||||
Common stock outstanding | 7,525,146 | 6,037,232 | ||||
Series B warrants [Member] | ||||||
Preferred stock value allocated | 12,300,000 | |||||
Series A Warrants [Member] | ||||||
Warrants issued to purchase common stock, exercise price | $8.50 | |||||
Fair value of warrants | 610,286 | |||||
Change in fair value of warrants, benefit | 377,143 | 137,142 | ||||
Common stock issued | 422,819 | |||||
Proceeds from purchase agreement | 6,000,000 | |||||
Aggregate Consideration Receivable For Warrants To Be Issued | 685,715 | |||||
Series B Preferred Stock [Member] | ||||||
Preferred stock, shares issued | 10,279 | 11,787 | ||||
Preferred stock, shares outstanding | 10,279 | 11,787 | ||||
Preferred stock converted in common stock | 1,508 | |||||
Conversion of convertible preferred stock | 12,300 | |||||
Conversion of convertible preferred stock, per share | 1,000 | |||||
Conversion of convertible preferred stock, initial price | 2.565 | |||||
Common stock issued on conversion of preferred stock | 587,915 | |||||
Warrants issued to purchase common stock | 4,795,321 | |||||
Warrants issued to purchase common stock, exercise price | 2.45 | |||||
Total preferred stock value | 2,486,780 | |||||
Preferred stock allocated to intrinsic value of beneficial conversion | 1,887,364 | |||||
Series A Preferred Stock [Member] | ||||||
Conversion of convertible preferred stock | 12,300 | |||||
Common Stock Equivalents of Convertible Preferred Stock [Member] | ||||||
Preferred stock, par value | $0.10 | |||||
Preferred stock, shares issued | 12,300 | |||||
Conversion of convertible preferred stock, per share | $1,000 | |||||
Conversion of convertible preferred stock, initial price | $8.40 | |||||
Common stock issued on conversion of preferred stock | 1,464,287 | |||||
Warrants issued to purchase common stock | 1,329,731 | |||||
Warrants issued to purchase common stock, exercise price | $7.40 | |||||
Proceeds from issuance of warrants | $11,457,831 | |||||
Warrants issued, exercisable term | 5 years |
FAIR_VALUE_OF_FINANCIAL_INSTRU2
FAIR VALUE OF FINANCIAL INSTRUMENTS (Detail) (USD $) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Dec. 31, 2014 | |
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Stock Price | $2.57 | $1.20 |
Risk-free Rate | 1.37% | 1.65% |
Minimum [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Volatility (Annual) | 81.02% | 72.90% |
Time to Maturity (Years) | 3 years 10 months 6 days | 4 years 1 month 6 days |
Maximum [Member] | ||
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items] | ||
Volatility (Annual) | 81.34% | 88.10% |
Time to Maturity (Years) | 4 years 29 days | 4 years 3 months 29 days |
FAIR_VALUE_OF_FINANCIAL_INSTRU3
FAIR VALUE OF FINANCIAL INSTRUMENTS (Detail 1) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Dec. 31, 2014 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Balance at December 31, 2014 | $499,089 | |
Balance at March 31, 2015 | 1,833,638 | 499,089 |
Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Balance at December 31, 2014 | 499,089 | |
Changes in estimated fair value | 1,334,549 | |
Balance at March 31, 2015 | $1,833,638 |
FAIR_VALUE_OF_FINANCIAL_INSTRU4
FAIR VALUE OF FINANCIAL INSTRUMENTS (Detail Narrative) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2015 | Dec. 31, 2014 | |
Fair Value Disclosures [Abstract] | ||
U.S Treasury Yield, period | 5 years | 5 years |
SUBSEQUENT_EVENTS_Detail_narra
SUBSEQUENT EVENTS (Detail narrative) (Convertible Preferred Stock [Member], Subsequent Event [Member]) | 1 Months Ended |
Apr. 30, 2015 | |
Convertible Preferred Stock [Member] | Subsequent Event [Member] | |
Subsequent Event [Line Items] | |
Convertible Preferred Stock | 1,508 |
Conversion to common stock, shares | 587,915 |