Document_And_Entity_Informatio
Document And Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Mar. 21, 2014 | Jun. 28, 2013 | |
Document Information [Line Items] | ' | ' | ' |
Entity Registrant Name | 'RESPONSE GENETICS INC | ' | ' |
Entity Central Index Key | '0001124608 | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' |
Entity Filer Category | 'Smaller Reporting Company | ' | ' |
Entity Common Stock, Shares Outstanding | ' | 38,728,196 | ' |
Document Type | '10-K | ' | ' |
Amendment Flag | 'false | ' | ' |
Document Period End Date | 31-Dec-13 | ' | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
Document Fiscal Year Focus | '2013 | ' | ' |
Entity Well-known Seasoned Issuer | 'No | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Public Float | ' | ' | $15,041,861 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Current assets: | ' | ' |
Cash and cash equivalents | $8,148,599 | $9,041,478 |
Accounts receivable, net of allowance for doubtful accounts of $991,990 and $2,404,659 at December 31, 2012 and 2013, respectively | 6,225,923 | 5,373,023 |
Prepaid expenses and other current assets | 981,908 | 576,112 |
Total current assets | 15,356,430 | 14,990,613 |
Property and equipment, net | 1,934,582 | 1,023,198 |
Intangible assets, net | 767,223 | 575,409 |
Total assets | 18,058,235 | 16,589,220 |
Current liabilities: | ' | ' |
Accounts payable | 1,694,312 | 1,191,122 |
Accrued expenses | 666,675 | 343,913 |
Accrued royalties | 1,293,717 | 712,776 |
Accrued payroll and related liabilities | 1,850,923 | 1,382,265 |
Capital lease obligation, current portion | 157,238 | 158,669 |
Deferred revenue | 0 | 483,052 |
Line of credit | 0 | 1,000,000 |
Total current liabilities | 5,662,865 | 5,271,797 |
Capital lease obligation, net of current portion | 136,419 | 83,910 |
Line of credit | 1,000,000 | 0 |
Total liabilities | 6,799,284 | 5,355,707 |
Commitments and contingencies (Note 5) | ' | ' |
Common stock classified outside of stockholders’ equity (deficit) (Note 10) | 5,500,000 | 11,775,724 |
Stockholders’ equity (deficit): | ' | ' |
Common stock, $0.01 par value; 50,000,000 shares authorized; 32,797,625 and 38,712,896 shares issued and outstanding at December 31, 2012 and 2013, respectively | 337,185 | 232,414 |
Additional paid-in capital | 70,986,406 | 56,766,036 |
Accumulated deficit | -65,297,179 | -57,276,664 |
Accumulated other comprehensive loss | -267,461 | -263,997 |
Total stockholders’ equity (deficit) | 5,758,951 | -542,211 |
Total liabilities, common stock classified outside of stockholders’ equity (deficit) and stockholders’ equity (deficit) | $18,058,235 | $16,589,220 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Allowance for doubtful accounts | $2,404,659 | $991,990 |
Common stock, par value per share | $0.01 | $0.01 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 38,712,896 | 32,797,625 |
Common stock, shares outstanding | 38,712,896 | 32,797,625 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Net revenue | $19,801,359 | $18,736,669 |
Cost of revenue | 10,456,082 | 10,415,913 |
Gross Profit | 9,345,277 | 8,320,756 |
Operating expenses: | ' | ' |
Selling and marketing | 5,421,797 | 5,065,998 |
General and administrative | 10,262,623 | 8,783,414 |
Research and development | 1,606,662 | 2,128,610 |
Total operating expenses | 17,291,082 | 15,978,022 |
Operating loss | -7,945,805 | -7,657,266 |
Other income (expense): | ' | ' |
Interest expense | -91,844 | -85,838 |
Interest income | 48 | 27 |
Other | 17,086 | -14,002 |
Net loss | -8,020,515 | -7,757,079 |
Unrealized gain (loss) on foreign currency translation | -3,464 | 3,180 |
Comprehensive loss | ($8,023,979) | ($7,753,899) |
Net loss per share - basic and diluted (in dollars per share) | ($0.24) | ($0.29) |
Weighted-average common shares - basic and diluted (in shares) | 33,481,439 | 26,742,345 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Cash flows from operating activities: | ' | ' |
Net loss | ($8,020,515) | ($7,757,079) |
Adjustments to reconcile net loss to net cash used in operating activities: | ' | ' |
Depreciation and amortization | 632,975 | 470,055 |
Bad debt expense | 3,165,918 | 1,351,592 |
Share-based compensation | 474,101 | 818,037 |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable | -3,761,817 | -2,655,275 |
Prepaid expenses and other current assets | -371,945 | 392,014 |
Accounts payable | 503,190 | -301,404 |
Accrued expenses | 322,762 | -805,828 |
Accrued royalties | 580,941 | -26,056 |
Accrued payroll and related liabilities | 468,658 | 19,576 |
Deferred revenue | -483,052 | 483,052 |
Net cash used in operating activities | -6,488,784 | -8,011,316 |
Cash flows from investing activities: | ' | ' |
Purchase of property and equipment | -428,487 | -425,465 |
Purchase and capitalization of software | -179,387 | -531,095 |
Cash paid for purchase of assets | -200,000 | 0 |
Net cash used in investing activities | -807,874 | -956,560 |
Cash flows from financing activities: | ' | ' |
Proceeds from issuance of common stock, net of offering costs | 6,571,324 | 16,452,538 |
Proceeds from exercise of stock options | 23,993 | 0 |
Capital lease payments | -188,072 | -147,602 |
Net cash provided by financing activities | 6,407,245 | 16,304,936 |
Effect of foreign exchange rates on cash and cash equivalents | -3,466 | 4,123 |
Net increase (decrease) in cash and cash equivalents | -892,879 | 7,341,183 |
Cash and cash equivalents: | ' | ' |
Beginning of the year | 9,041,478 | 1,700,295 |
End of the year | 8,148,599 | 9,041,478 |
Cash paid during the period for: | ' | ' |
Income taxes | 0 | 0 |
Interest | 91,844 | 85,838 |
Supplemental disclosure of non-cash financing activities: | ' | ' |
Equipment and software acquired under capital leases | 239,150 | 0 |
Assets acquired by issuance of common stock | 980,000 | 0 |
Reclassification of mezzanine equity to Stockholders’ Equity (Deficit) | $6,275,723 | $12,531,495 |
CONSOLIDATED_STATEMENT_OF_STOC
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT) (USD $) | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit during Development Stage [Member] | Accumulated Other Comprehensive Income (Loss) [Member] |
Balances at Dec. 31, 2011 | ($6,137,844) | $134,327 | $43,514,591 | ($49,519,585) | ($267,177) |
Balances (in shares) at Dec. 31, 2011 | ' | 19,540,358 | ' | ' | ' |
Issuance of common stock | 0 | 0 | 0 | 0 | 0 |
Issuance of common stock (in shares) | ' | 13,257,267 | ' | ' | ' |
Exercise of stock options (in shares) | 0 | ' | ' | ' | ' |
Reclassification of mezzanine equity, net | 12,531,495 | 98,087 | 12,433,408 | 0 | 0 |
Share-based compensation expense | 818,037 | 0 | 818,037 | 0 | 0 |
Unrealized loss on foreign currency translation | 3,180 | 0 | 0 | 0 | 3,180 |
Net loss | -7,757,079 | 0 | 0 | -7,757,079 | 0 |
Balances at Dec. 31, 2012 | -542,211 | 232,414 | 56,766,036 | -57,276,664 | -263,997 |
Balances (in shares) at Dec. 31, 2012 | ' | 32,797,625 | ' | ' | ' |
Issuance of common stock | 7,551,324 | 58,972 | 7,492,352 | 0 | 0 |
Issuance of common stock (in shares) | ' | 5,897,248 | ' | ' | ' |
Exercise of stock options | 23,993 | 180 | 23,813 | 0 | 0 |
Exercise of stock options (in shares) | 18,023 | 18,023 | ' | ' | ' |
Reclassification of mezzanine equity, net | 6,275,723 | 45,619 | 6,230,104 | 0 | 0 |
Share-based compensation expense | 474,101 | 0 | 474,101 | 0 | 0 |
Unrealized loss on foreign currency translation | -3,464 | 0 | 0 | 0 | -3,464 |
Net loss | -8,020,515 | 0 | 0 | -8,020,515 | 0 |
Balances at Dec. 31, 2013 | $5,758,951 | $337,185 | $70,986,406 | ($65,297,179) | ($267,461) |
Balances (in shares) at Dec. 31, 2013 | ' | 38,712,896 | ' | ' | ' |
Organization_Operations_and_Ba
Organization, Operations and Basis of Accounting | 12 Months Ended |
Dec. 31, 2013 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
Organization, Operations and Basis of Accounting | ' |
1. Organization, Operations and Basis of Accounting | |
Response Genetics, Inc. (the “Company”) was incorporated in the State of Delaware on September 23, 1999 as Bio Type, Inc. for the purpose of providing unique molecular profiling services of tumor tissue that has been formalin-fixed and embedded in paraffin wax. In August 2000, the Company changed its name to Response Genetics, Inc. | |
The Company is a life science company engaged in the research, development, marketing and sale of pharmacogenomic tests for use in the treatment of cancer. Pharmacogenomics is the science of how an individual’s genetic makeup relates to drug response. Tests based on pharmacogenomics facilitate the prediction of a response to drug therapy or survival following surgery based on an individual’s genetic makeup. In order to generate pharmacogenomic information from patient specimens for these tests, the Company uses proprietary enabling methods for maximizing the extraction and analysis of nucleic acids and, therefore, accessing the genetic information available from each patient sample. The Company’s platforms include analysis of single biomarkers using the polymerase chain reaction method as well as global gene interrogation using microarray methods and fluorescence in situ hybridization (“FISH”) from paraffin or frozen tissue specimens. The Company primarily derives its revenue from the sale of its ResponseDX® diagnostic testing products and by providing pharmacogenomic clinical trial testing services to pharmaceutical companies in the United States, Asia and Europe. | |
The Company’s goal is to provide cancer patients and their physicians with a means to make informed, individualized treatment decisions based on genetic analysis of tumor tissues. The Company’s pharmacogenomic analysis of clinical trial specimens for the pharmaceutical industry may provide data that will lead to a better understanding of the molecular basis for response to specific drugs and, therefore lead to individualized treatment. | |
Since its inception, the Company has devoted substantial effort in developing its product and has incurred losses and negative cash flows from operations, and at December 31, 2013 has an accumulated deficit of $65,297,179. The Company is forecasting continued losses and negative cash flows as it funds its sales and marketing activities and research and development programs. | |
Based on the Company’s current operating plan which includes various assumptions concerning the level and timing of cash receipts from product sales and cash outlays for operating expenses and capital expenditures, management believes that existing cash and cash equivalents will be sufficient to meet the Company’s working capital requirements through the next twelve months. The Company’s ability to successfully carry out its business plan is primarily dependent upon its ability to (1) obtain sufficient additional capital at acceptable costs, (2) attract and retain knowledgeable workers, and (3) generate significant revenues. The Company expects to seek additional financing and/or strategic investments; however, there can be no assurance that any additional financing or strategic investments will be available on acceptable terms, if at all. | |
If events or circumstances occur such that the Company does not meet its operating plan as expected, the Company will most likely be required to reduce certain discretionary spending, which could have a material adverse effect on the Company’s ability to achieve its intended business objectives. No adjustments have been made to the accompanying financial statements to reflect any of the matters discussed above. | |
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP"). The preparation of financial statements in conformity with GAAP requires management to make judgments, assumptions and estimates that affect the amounts reported in the Company's consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates. | |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Accounting Policies [Abstract] | ' | |||||||||||||
Summary of Significant Accounting Policies | ' | |||||||||||||
2. Summary of Significant Accounting Policies | ||||||||||||||
Basis of Consolidation | ||||||||||||||
The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, Response Genetics, Ltd., a Scottish corporation (the “Subsidiary”), which was incorporated in November 2006. The Subsidiary had no employees or active operations during 2012 and 2013. All significant intercompany transactions and balances have been eliminated in consolidation. | ||||||||||||||
Cash and Cash Equivalents | ||||||||||||||
The Company considers all highly liquid investments with a maturity at date of purchase of three months or less to be cash equivalents. The carrying value of cash equivalents approximates fair value due to the short-term nature and liquidity of these instruments. The Company’s cash equivalents are comprised of cash on hand, deposits in banks and money market investments. | ||||||||||||||
Accounts Receivable | ||||||||||||||
Pharmaceutical Accounts Receivable | ||||||||||||||
The Company invoices its clients as specimens are processed and any other contractual obligations are met. The Company’s contracts with clients typically require payment within 45 days of the date of invoice. The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of its clients to make required payments. The Company specifically analyzes accounts receivable and historical bad debts, client credit, current economic trends and changes in client payment trends when evaluating the adequacy of the allowance for doubtful accounts. Account balances are charged-off against the allowance when it is probable the receivable will not be recovered. To date, the Company’s clients have primarily been large pharmaceutical companies. As a result, bad debts from clinical accounts receivable to date have been minimal. Pharmaceutical company accounts receivable as of December 31, 2012 and 2013 were $2,549,665 and $1,892,384 respectively. There were no allowances for doubtful accounts recorded against these pharmaceutical accounts receivable at December 31, 2012 and 2013. | ||||||||||||||
ResponseDX® Accounts Receivable | ||||||||||||||
ResponseDX® accounts receivable are recorded from two primary payors: Medicare and third party and private payors (“Private Payors”). ResponseDX® accounts receivable are recorded at established billing rates less an estimated billing adjustment, based on reporting models utilizing historical cash collection percentages and updated for current effective reimbursement factors. Management performs ongoing valuations of accounts receivable balances based on management’s evaluation of historical collection experience and industry trends. Based on the historical experience for our Medicare and Private Payor accounts, management has determined, based on a detailed analysis, that accounts receivable associated with certain billings are unlikely to be collected. Therefore, the Company has recorded an allowance for doubtful accounts of $991,990 and $2,404,659 as of December 31, 2012 and 2013. The Company’s bad debt expense for the years ended December 31, 2012 and 2013 was $1,351,592 and $3,165,918, respectively. | ||||||||||||||
ResponseDX ® accounts receivable consisted of the following: | ||||||||||||||
December 31, | December 31, | |||||||||||||
2012 | 2013 | |||||||||||||
Net Medicare receivable | $ | 890,936 | $ | 2,422,611 | ||||||||||
Net Private Payor receivable | 2,924,412 | 4,315,587 | ||||||||||||
3,815,348 | 6,738,198 | |||||||||||||
Allowance for doubtful accounts | -991,990 | -2,404,659 | ||||||||||||
$ | 2,823,358 | $ | 4,333,539 | |||||||||||
As more fully discussed in Note 3 Property and Equipment and Intangible Assets, the Company acquired accounts receivable in August 2013 that had a valuation of $257,000. All of these receivables were collected by December 31, 2013. | ||||||||||||||
As part of its process for evaluating the collectability of aged accounts receivable management identified delays in the Medicare administrative law appeal process for aged accounts receivable that would extend the process significantly (up to two years). Accordingly, management considered this factor in estimating the allowance for doubtful accounts and concluded that an additional allowance of approximately $690,000 was necessary as of December 31, 2013 to reserve for the balance of Medicare accounts receivable as of December 31, 2013 that were going to age greater than one year shortly after December 31, 2013. | ||||||||||||||
Property and Equipment and Intangible Assets | ||||||||||||||
Property and equipment are carried at cost less accumulated depreciation and amortization. Depreciation and amortization are calculated using the straight-line method over the estimated useful lives of the assets. The Company has determined the estimated useful lives of its property and equipment, as follows: | ||||||||||||||
Laboratory equipment | 5 to 7 years | |||||||||||||
Furniture and equipment | 5 to 7 years | |||||||||||||
Purchased and internally-developed software | 3 to 5 years | |||||||||||||
Leasehold improvements | Shorter of the useful life (5 to 7 years) or the lease term | |||||||||||||
Maintenance and repairs are charged to expense as incurred. The cost and accumulated depreciation of assets sold or otherwise disposed of are removed from the related accounts and the resulting gain or loss is reflected in the statements of operations. The Company has capitalized costs related to the development of database software (see Note 3). The portion of this database placed into service is amortized in accordance with ASC 350-40, Internal-Use Software. The amortization period is five years using the straight-line method. | ||||||||||||||
Revenue Recognition | ||||||||||||||
Pharmaceutical Revenue | ||||||||||||||
Revenues that are derived from testing services provided to pharmaceutical companies are recognized on a contract specific basis pursuant to the terms of the related agreements. Revenue is recognized in accordance with ASC 605, Revenue Recognition, which requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence that an arrangement exists; (2) delivery has occurred and title and the risks and rewards of ownership have been transferred to the client or services have been rendered; (3) the price is fixed or determinable; and (4) collectability is reasonably assured. | ||||||||||||||
Revenues are recorded on an accrual basis as the contractual obligations are completed and as a set of assays is processed through the Company’s laboratory under a specified contractual protocol and are recorded on the date the tests are resulted. Certain contracts have minimum assay requirements that, if not met, result in payments that are due upon the completion of the designated period. In these cases, revenues are recognized when the end of the specified contract period is reached. | ||||||||||||||
On occasion, the Company may enter into a contract that requires the client to provide an advance payment for specimens that will be processed at a later date. In these cases, the Company records this advance as deferred revenue and recognizes the revenue as the specimens are processed or at the end of the contract period, as appropriate. | ||||||||||||||
In March 2010, the Company entered into a non-exclusive license agreement with GlaxoSmithKline, LLC, which called for certain milestone payments to be made to the Company when certain events specified in the agreement occur, specifically GlaxoSmithKline, LLC submitting an application to use the license to the FDA, the FDA approving the application, and issuance of certain patent applications to the Company. The Company has no further obligations related to these events and therefore has recorded the milestone payments that were due under the agreement into revenue at the time the event occurred. | ||||||||||||||
The Company recorded revenue from pharmaceutical clients of $6,852,536 and $7,789,985 for the years ended December 31, 2012 and 2013, respectively. | ||||||||||||||
ResponseDX® Revenue | ||||||||||||||
Revenues that are derived from ResponseDX® testing services are recognized in accordance with ASC 605, Revenue Recognition, which requires that four basic criteria be met before revenue can be recognized: (1) persuasive evidence that an arrangement exists; (2) delivery has occurred and title and the risks and rewards of ownership have been transferred to the client or services have been rendered; (3) the price is fixed or determinable; and (4) collectability is reasonably assured. We record revenues when our tests have confirmed results which are evidence that the services have been performed. | ||||||||||||||
Revenues are recorded on an accrual basis as the contractual obligations are completed and as a set of assays is processed through our laboratory under a specified contractual protocol. | ||||||||||||||
ResponseDX® private payor and Medicare revenues are recorded at established billing rates less an estimated billing adjustment, based on reporting models utilizing historical cash collection percentages and updated for current effective reimbursement factors. The Company’s Medicare provider number allows it to invoice and collect from Medicare. The Company’s invoicing to Medicare is primarily based on amounts allowed by Medicare for the service provided as defined by Common Procedural Terminology (“CPT”). | ||||||||||||||
Medicare reimbursement rates are subject to regulatory changes and government funding restrictions. In January 2013, the annual Medicare fee schedules update was announced which included proposed changes to Medicare reimbursement rates that significantly reduced the reimbursement rates for certain of the testing services the Company provides. The Company participated with other impacted organizations to provide guidance to the local Medicare Administrative Contractor (“MAC”) that resulted in the local MAC updating certain pricing through September 2013 which reflected an increase in many of the tests originally priced in January 2013. In addition, on October 1, 2013, the Centers for Medicare and Medicaid Services (“CMS”) issued fees for some, but not all, of the CPT codes used by the Company. As a result of these CPT code changes and Medicare price changes, the Company has experienced a departure from its normal reimbursement patterns with Medicare and other payors. Specifically, the Company has experienced delays in certain reimbursements for services and an increase in initial denials of claims for certain services provided. Accordingly, the Company re-evaluated the assumptions employed in its model for estimating revenue to be recognized for ResponseDX® testing. The Company views the code and price changes described above as affecting only the assumptions the Company used in pricing its services. The nature of the testing the Company provides, the evidence it gathers to establish the creditworthiness of its payors and the delivery method of its services have not changed from prior periods, and there are no indicators that these assumptions require change. | ||||||||||||||
The Company performed an analysis that considered its historical patterns of revenue by payor in conjunction with the fluctuations it experienced in the twelve months ended December 31, 2013 to arrive at the revenue recorded during 2013. The Company believes that the changes in CPT codes and pricing that are causing confusion and erratic payment experience in the payor community will take some time to resolve. The time needed for resolution will depend upon Medicare and the local MAC releasing additional pricing changes and potentially, revisions to previously revised prices, and upon the private payor community adopting the new CPT codes and some level of revised pricing. Accordingly, the Company’s revenue recognition estimates could be materially affected in future periods as pricing and payment patterns change and develop, and the Company may be materially affected by future or retroactive price changes. | ||||||||||||||
The following details ResponseDX® revenue for the years ended December 31, 2012 and 2013: | ||||||||||||||
Year Ended December 31, | ||||||||||||||
2012 | 2013 | |||||||||||||
Net Medicare revenue | $ | 5,405,393 | $ | 4,521,732 | ||||||||||
Net Private Payor revenue | 6,472,386 | 7,489,642 | ||||||||||||
Other | 6,354 | — | ||||||||||||
Net ResponseDX® revenue | $ | 11,884,133 | $ | 12,011,374 | ||||||||||
Cost-Containment Measures | ||||||||||||||
Both government and private pay sources have instituted cost-containment measures designed to limit payments made to providers of health care services, which include diagnostic test providers such as the Company, and there can be no assurance that future measures designed to limit payments made to providers will not adversely affect the Company. | ||||||||||||||
Regulatory Matters | ||||||||||||||
A portion of the Company’s revenues are derived from Medicare reimbursement. Laws and regulations governing Medicare programs are complex and subject to interpretation, and the Company may be adversely affected by future governmental investigations, lawsuits or private actions which include mandatory damages, fines, penalties, criminal charges, loss or suspension of licenses and/or suspension or exclusion from Medicare and certain other governmental programs. The Company believes that it is in compliance with all applicable laws and regulations and is not aware of any pending or threatened investigations involving allegations of potential wrongdoing. | ||||||||||||||
Medicare reimbursement rates are subject to regulatory changes and government funding restrictions. In January 2013, the annual Medicare fee schedules update was announced which included proposed changes to Medicare reimbursement rates that significantly reduced the reimbursement rates for certain of the testing services we provide. The Company participated with other impacted organizations to provide guidance to the local MAC that resulted in the local MAC updating certain pricing through September 2013 which reflected an increase in many of the tests originally priced in January 2013. In addition, on October 1, 2013, CMS issued fees for some, but not all, of the CPT codes used by the Company. It is uncertain if continued guidance provided to Medicare and the local MAC by impacted organizations will result in additional fee increases or additional positive coverage determinations in 2014. If however, the current reduction in reimbursement rates is adopted as is, it may have a material adverse effect on the Company's operations. | ||||||||||||||
On July 8, 2013, CMS released a new proposed rulemaking entitled “Medicare Program; Revisions to Payment Policies under the Physician Fee Schedule, Clinical Laboratory Fee Schedule & Other Revisions to Part B for CY 2014”. This proposed rule contains a number of provisions that may adversely impact the level of reimbursement for a variety of tests for which the Company receives reimbursement from the Medicare program beginning in 2014. Among other things, CMS has proposed examining approximately 1,200 laboratory tests that appear on the Clinical Lab Fee Schedule (“CLFS”) over a period of five years to determine whether advances in technology may have reduced the cost of providing such tests and whether or not the level of reimbursement should be revised. The Company is currently performing molecular testing which is reimbursed using CPT codes that fall on the CLFS. CMS has also proposed changing the methodology used to determine reimbursement rates for the technical component of certain tests reimbursed off of the Physician Fee Schedule (“PFS”). Among other provisions, CMS has proposed limiting the Relative Value Units (“RVUs”) ascribed to the Practice Expense component of their reimbursement formula for tests performed in “Non-Facilities” (which would include most clinical laboratories like the Company) to the RVUs that have been ascribed for the same procedures under the Hospital Outpatient Prospective Payment System, or the Ambulatory Payment Classification (“APC”) system which are used to reimburse “Facilities” (such as hospitals and ambulatory surgery centers). The Company currently performs FISH testing, which may be impacted by this PFS rule change if it is enacted. CMS has not yet proposed any specific rates for 2014 and the Company is examining the potential impact that a reduction in the level of reimbursement for the tests the Company offers may have on its operations. | ||||||||||||||
A number of proposals for legislation or regulation continue to be under discussion which could have the effect of substantially reducing Medicare reimbursements for clinical laboratories or introducing cost sharing to beneficiaries. Depending upon the nature of regulatory action, if any, which is taken and the content of legislation, if any, which is adopted, the Company could experience a significant decrease in revenues from Medicare and Medicaid, which could have a material adverse effect on the Company. The Company is unable to predict, however, the extent to which such actions will be taken. | ||||||||||||||
Cost of Revenue | ||||||||||||||
Cost of revenue represents the cost of materials, direct labor, royalties, costs associated with processing tissue specimens including pathological review, staining, microdissection, paraffin extraction, reverse transcription polymerase chain reaction, fluorescence in situ hybridization (“FISH”), quality control analyses, license fees and delivery charges necessary to render an individualized test result. Costs associated with performing tests are recorded as the tests are processed. | ||||||||||||||
License Fees | ||||||||||||||
The Company has licensed technology for the extraction of ribonucleic acid (“RNA”) from formalin-fixed, paraffin-embedded tumor specimens from the University of Southern California (“USC”). Under the terms of the license agreement, the Company is required to pay royalties to USC calculated as a fixed percentage of the revenue the Company generates by using this technology. The Company also maintains a non-exclusive license to use certain patents related to the polymerase chain reaction (“PCR”) of Roche Molecular Systems, Inc. (“Roche”). The Company pays Roche a royalty fee based on revenue that the Company generates through use of this technology. The Company accrues for such royalties at the time revenue is recognized. Such royalties are included in cost of revenues in the accompanying statements of operations. | ||||||||||||||
Research and Development | ||||||||||||||
The Company expenses costs associated with research and development activities as incurred. Research and development costs are expensed as incurred and classified as research and development costs. Research and development costs include employee costs (salaries, payroll taxes, benefits, and travel), equipment depreciation and warranties and maintenance, laboratory supplies, primers and probes, reagents, patent costs and occupancy costs. | ||||||||||||||
Line of Credit | ||||||||||||||
On July 14, 2011, the Company entered into a line of credit agreement with Silicon Valley Bank (the “Bank”). The agreement has been amended most recently on March 7, 2013. The line of credit is collateralized by the Company’s pharmaceutical , Private Payor and Medicare receivables. The amended maximum amount that can be borrowed from the credit line is $2,000,000. As of December 31, 2013, the amount the Company can draw from the loan was $1,000,000 calculated as the lesser of (i) the Company’s calculated borrowing base, which was 80% of certain of the Company’s accounts receivable, or (ii) the amount available under the credit line. As of December 31, 2013, the interest fees associated with this line of credit were set at the prime rate plus 1%. During 2012 and 2013, the rate charged to the Company was 5%. As needed from time to time, the Company may draw on this line for use for general corporate purposes. As of December 31, 2012 and December 31, 2013, the Company has drawn $1,000,000 against the line of credit. The line of credit is subject to various financial covenants. As of December 31, 2013, the Company was not in compliance with one of these covenants, and the Bank waived the covenant violation. Prior to the most recent amendment on March 7, 2013, the Company was also not in compliance with certain other covenants. The September 28, 2012 amendment provided forbearance for the failure to comply with these certain covenants through November 30, 2012, and modified the covenants to include a requirement that the Company maintain account balances at the Bank totaling a minimum of $4,000,000 during the covered forbearance period. The December 6, 2012 amendment to the agreement extended the forbearance for the failure to comply with these certain covenants and the requirement for the Company to maintain account balances at the Bank totaling a minimum of $4,000,000 through December 31, 2012. In addition, pursuant to the March 7, 2013 amendment, the Bank waived the Company's existing breach of financial covenants under the credit agreement and the parties restructured the line of credit to provide that, among other things: (i) the revolving line of credit's maturity date was extended to March 7, 2015, (ii) the fee for the unused portion of the revolving line of credit was reduced from 0.375% to 0.250% per annum of the average unused portion of the revolving line of credit, (iii) the Company must continue to meet certain reporting requirements including providing financial statements and a certificate of compliance with the terms and conditions of the credit agreement by an authorized officer to the Bank within 45 days of the last day of each calendar quarter, provided that if the Company has less than $4,000,000 in its account at the Bank at any time during such calendar quarter, the Company must provide the financial statements and the certificate of compliance within 30 days of the end of such calendar quarter and provide a monthly report on revenues realized from private payors, (iv) the financial covenants were amended and restated to require the Company to maintain a ratio of quick assets to current liabilities of 1:50 to 1:00 and meet certain specified minimum adjusted earnings before interest, taxes, depreciation and amortization (“EBITDA”) requirements as defined in the amendment and measured on a monthly basis and (v) the Bank is granted certain additional inspection of books, records and collateral rights. | ||||||||||||||
As of December 31, 2012, the line of credit under the credit agreement was classified as a current liability of the Company on the accompanying balance sheet as the line of credit had a maturity date less than one year from December 31, 2012. As of December 31, 2013, the line of credit under the credit agreement was classified as a non-current liability of the Company on the accompanying balance sheet as the line of credit had a maturity date of greater than one year from December 31, 2013. | ||||||||||||||
From time to time, the Company’s calculated borrowing base under its Bank line of credit may decrease to a level where the Company is in an over-advance position in which case the Company will be required to repay any outstanding amounts greater than the calculated borrowing base for such covered period back to the Bank immediately. The Company will be able to draw down on the credit line again with respect to such paid back amount once the Company is in compliance with the borrowing base requirement. This occurred on one occasion during the second quarter of 2012 based on the May 2012 borrowing base, as a result of which the Company was required to repay $298,000 to the Bank. The Company drew down the same amount one week later once the June 2012 borrowing base was determined to be sufficiently higher than the May 2012 borrowing base, thereby giving the Company the capacity to borrow such additional amount. | ||||||||||||||
Income Taxes | ||||||||||||||
Deferred tax assets and liabilities are determined based on differences between the financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. | ||||||||||||||
ASC 740, Income Taxes, clarifies the accounting for uncertainty in income taxes recognized in financial statements and requires the impact of a tax position to be recognized in the financial statements if that position is more likely than not of being sustained by the taxing authority. As of December 31, 2012 and 2013, the Company does not have a liability for unrecognized tax benefits. The Company recognizes interest and penalties associated with tax matters as part of the income tax provision, and the Company includes accrued interest and penalties with the related tax liability in the balance sheet. For the years ended December 31, 2012 and 2013, there were no interest or penalties recorded on the consolidated statement of operations. | ||||||||||||||
Stock-Based Compensation | ||||||||||||||
The Company accounts for stock-based compensation in accordance with ASC 718, Stock Compensation, Share-Based Payment. Stock-based compensation expense for all stock-based compensation awards granted is based on the grant-date fair value estimated in accordance with the provisions of ASC 718. The Company recognizes these compensation costs on a straight-line basis over the requisite service period of the award, which is generally the option vesting period. As further described in Note 7, certain awards granted to Thomas A. Bologna, the Company’s Chairman and Chief Executive Officer, were recognized based on an accelerated vesting basis triggered by market conditions rather than a straight-line basis. | ||||||||||||||
The Company accounts for equity instruments issued to non-employees in accordance with ASC 505, Equity. Under ASC 505, stock option awards issued to non-employees are measured at fair value using the Black-Scholes option-pricing model and recognized pursuant to a performance model. | ||||||||||||||
Management Estimates | ||||||||||||||
The preparation of financial statements in conformity with U.S. GAAP 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 revenues and expenses during the reporting period. Significant estimates in these consolidated financial statements have been made for revenue, allowances for doubtful accounts, impairment of long-lived assets, depreciation of property and equipment and stock-based compensation. Actual results could differ materially from those estimates. | ||||||||||||||
Long-lived Assets | ||||||||||||||
Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company evaluates potential impairment by comparing the carrying amount of the asset with the estimated undiscounted future cash flows associated with the use of the asset and its eventual disposition. Should the review indicate that the assets cost is not recoverable, the carrying value of the asset would be reduced to its fair value, which is measured by future discounted cash flows. | ||||||||||||||
Foreign Currency Translation | ||||||||||||||
The financial position and results of operations of the Company’s foreign subsidiary are determined using local currency as the functional currency. Assets and liabilities of these operations are translated at the exchange rate in effect at each period-end. Statement of Operations amounts are translated at the average rate of exchange prevailing during the period. Translation adjustments arising from the use of differing exchange rates from period to period are included in accumulated other comprehensive loss in stockholders’ equity (deficit). | ||||||||||||||
Comprehensive Loss | ||||||||||||||
The components of comprehensive loss are net loss and foreign currency translation adjustments for the years ended December 31, 2012 and 2013. | ||||||||||||||
Fair Value of Financial Instruments | ||||||||||||||
Cash and cash equivalents are stated at cost, which approximates fair market value. Cash equivalents consist of money market accounts, with fair values estimated based on quoted market prices. Debt balances are stated at historical amounts less principal payments, which approximate fair market value. The Company believes interest rates in its debt agreements are commensurate with lender risk profiles for similar companies. | ||||||||||||||
Advertising costs | ||||||||||||||
The Company markets its services through its advertising activities in trade publications and on the internet. Advertising costs are included in selling and marketing expenses on the statements of operations and are expensed as incurred. Advertising costs for the years ended December 31, 2012 and 2013 were $13,788 and $16,677, respectively. | ||||||||||||||
Reclassifications | ||||||||||||||
Prior year amounts in the consolidated financial statements have been reclassified to conform with the current year presentation. Reclassified amounts had no impact on the Company’s net losses for the year ended December 31, 2012 or 2013. | ||||||||||||||
Concentration of Credit Risk Clients and Limited Suppliers | ||||||||||||||
Cash and cash equivalents are maintained at financial institutions and, at times, balances may exceed federally insured limits. The Company has never experienced any losses related to these balances. At December 31, 2013, the Company had $7,867,276 in cash and cash equivalents that exceeded federally insured limits. At December 31, 2013, $6,969 of cash was held outside of the United States. | ||||||||||||||
Revenue sources that accounted for greater than 10 percent of revenue are provided below. | ||||||||||||||
Year Ended December 31, | ||||||||||||||
2012 | 2013 | |||||||||||||
Revenue | Percent of Total Revenue | Revenue | Percent of Total Revenue | |||||||||||
GlaxoSmithKline entities: | ||||||||||||||
GlaxoSmithKline LLC | $ | 1,280,704 | 6.8 | % | $ | 1,134,366 | 5.8 | % | ||||||
GlaxoSmithKline Biologicals S.A. | $ | 3,241,211 | 17.3 | % | $ | 3,534,619 | 17.9 | % | ||||||
Total GlaxoSmithKline entities | $ | 4,521,915 | 24.1 | % | $ | 4,668,985 | 23.7 | % | ||||||
Medicare, net of contractual allowances | $ | 5,405,393 | 28.8 | % | $ | 4,521,732 | 22.8 | % | ||||||
Clients that accounted for greater than 10 percent of accounts receivable are provided below. | ||||||||||||||
As of December 31, | ||||||||||||||
2012 | 2013 | |||||||||||||
Receivable | Percent of Total Receivables | Receivable | Percent of Total Receivables | |||||||||||
Balance | Balance | |||||||||||||
GlaxoSmithKline entities: | ||||||||||||||
GlaxoSmithKline LLC | $ | 200,169 | 3.1 | % | $ | 597,937 | 6.9 | % | ||||||
GlaxoSmithKline Biologicals S.A. | $ | 1,490,975 | 23.4 | % | $ | 544,298 | 6.3 | % | ||||||
Total GlaxoSmithKline entities | $ | 1,691,144 | 26.5 | % | $ | 1,142,235 | 13.2 | % | ||||||
Medicare, net of contractual allowances | $ | 890,936 | 14 | % | $ | 2,422,611 | 28.1 | % | ||||||
Many of the supplies and reagents used in the Company’s testing process are procured from a limited number of suppliers. Any supply interruption or an increase in demand beyond the suppliers’ capabilities could have an adverse impact on the Company’s business. Management believes it can identify alternative sources, if necessary, but it is possible such sources may not be identified in sufficient time to avoid an adverse impact on its business. Refer also to Note 6 for further discussion regarding these supply agreements. The Company purchases certain laboratory supplies and reagents primarily from a limited number of suppliers. The Company made approximately 71% of its reagent purchases from two suppliers during the year ended December 31, 2012 and made approximately 87% of its reagent purchases from four suppliers during the year ended December 31, 2013. | ||||||||||||||
Recent Accounting Pronouncements | ||||||||||||||
We have reviewed all recently issued standards and have determined they will not have a material impact on our consolidated financial statements or do not apply to our operations. | ||||||||||||||
Property_and_Equipment_and_Int
Property and Equipment and Intangible Assets | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Property, Plant and Equipment [Abstract] | ' | |||||||
Property and Equipment and Intangible Assets | ' | |||||||
3. Property and Equipment and Intangible Assets | ||||||||
Property and equipment consists of the following: | ||||||||
December 31, | December 31, | |||||||
2012 | 2013 | |||||||
Laboratory equipment | $ | 3,315,812 | $ | 4,468,055 | ||||
Furniture and equipment | 660,626 | 736,886 | ||||||
Leasehold improvements | 305,059 | 487,843 | ||||||
4,281,497 | 5,692,784 | |||||||
Less: Accumulated depreciation | -3,258,299 | -3,758,202 | ||||||
Total property and equipment, net | $ | 1,023,198 | $ | 1,934,582 | ||||
Purchased software | $ | 562,699 | $ | 749,587 | ||||
Internally developed software | 108,362 | 213,361 | ||||||
Trademarks | — | 33,000 | ||||||
671,061 | 995,948 | |||||||
Less: Accumulated amortization | -95,652 | -228,725 | ||||||
Total intangible assets, net | $ | 575,409 | $ | 767,223 | ||||
Intangible assets are carried at the cost to obtain them. Internally developed intangible assets are amortized using the straight-line method over the estimated useful life of five years. At December 31, 2012, the Company had not yet begun amortizing purchased software costs related to its new Laboratory Information Management System (“LIMS”). During the first quarter of 2013, the Company deployed LIMS and began amortizing the cost. Amortization expense, included in cost of revenue, general and administrative expenses, and research and development expenses for the years ended December 31, 2012 and 2013 was $470,054 and $632,976, respectively. | ||||||||
On August 23, 2013, the Company entered into an asset purchase agreement (the “Pathwork Purchase Agreement”) with Pathwork (assignment for the benefit of creditors), LLC (“Seller”), pursuant to which the Company acquired substantially all of the assets of Pathwork Diagnostics, Inc. (“Pathwork”), which had previously assigned all of its assets to Seller for the benefit of its creditors pursuant to a General Assignment, dated as of April 2, 2013. Pursuant to the Pathwork Purchase Agreement, the Company acquired all intellectual property, know-how, data, equipment and materials formerly owned by Pathwork which relate to its FDA-cleared Tissue of Origin cancer test. Management evaluated the assets acquired from Seller and concluded the combined assets did not meet the definition of a business, primarily because the necessary processes were not acquired. Accordingly, the Company accounted for the transaction as a basket purchase of assets in which the purchase price was allocated to the individual assets acquired based upon relative fair value. | ||||||||
The Company acquired the assets for the following consideration: (i) an aggregate of 500,000 newly-issued registered shares of the Company’s common stock issued to two senior secured creditors of Pathwork which were designated by Seller in the Pathwork Purchase Agreement and (ii) a cash payment of $200,000 to Seller. | ||||||||
Based upon a valuation of the acquired Pathwork assets, the purchase price was allocated as follows: $257,000 to accounts receivable, $785,000 to laboratory equipment, and $138,000 to internally developed software and other intangible assets. The Company launched the Pathwork acquired Tissue of Origin test commercially as its ResponseDX: Tissue of OriginTM test in February 2014. Therefore, depreciation and amortization of these assets will begin during the first quarter of 2014 over their expected useful lives, which are approximately five years. | ||||||||
Expected future amortization of intangible assets over the next five years ending December 31 is as follows: $176,518 in 2014, $179,302 in 2015, $165,033 in 2016, $145,173 in 2017, $64,698 in 2018 and $3,499 thereafter. | ||||||||
Capital Leases | ||||||||
The Company leases certain equipment and related software that is recorded as capital leases. This equipment and software is included in property and equipment on the accompanying balance sheet as of December 31, 2013 as follows: | ||||||||
Equipment and software financed under capital leases | $ | 584,150 | ||||||
Less: Accumulated amortization | -320,769 | |||||||
Equipment and software financed under capital leases, net | $ | 263,381 | ||||||
Future minimum lease payments under capital leases as of December 31, 2013 are as follows: | ||||||||
Years ending December 31, | ||||||||
2014 | $ | 188,427 | ||||||
2015 | 101,309 | |||||||
2016 | 46,852 | |||||||
Total minimum lease payments | 336,588 | |||||||
Less amount represented by interest | -42,931 | |||||||
Less current portion | -157,238 | |||||||
Capital lease obligation, net of current portion | $ | 136,419 | ||||||
The Company recorded depreciation expense of $115,000 and $131,483 related to the assets under capital leases for the years ended December 31, 2012 and 2013, respectively. | ||||||||
Loss_Per_Share
Loss Per Share | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Earnings Per Share [Abstract] | ' | |||||||
Loss Per Share | ' | |||||||
4. Loss Per Share | ||||||||
The Company calculates net loss per share in accordance with ASC 260, Earnings Per Share. Under the provisions of ASC 260, basic net loss per share is computed by dividing the net loss for the period by the weighted average number of shares of common stock outstanding for the period. Diluted net loss per share is computed by dividing the net loss by the weighted average number of shares of common stock and dilutive common stock equivalents then outstanding. Common stock equivalents consist of shares of common stock issuable upon the exercise of stock options. | ||||||||
The following table sets forth the computation for basic and diluted loss per share: | ||||||||
Year Ended December 31, | ||||||||
2012 | 2013 | |||||||
Numerator: | ||||||||
Net loss | $ | -7,757,079 | $ | -8,020,515 | ||||
Numerator for basic and diluted earnings per share | $ | -7,757,079 | $ | -8,020,515 | ||||
Denominator: | ||||||||
Denominator for basic and diluted earnings per share — weighted-average shares outstanding | 26,742,345 | 33,481,439 | ||||||
Basic and diluted loss per share | $ | -0.29 | $ | -0.24 | ||||
Outstanding stock options to purchase 1,749,310 and 2,288,076 shares for the years ended December 31, 2012 and 2013, respectively, were excluded from the calculation of diluted loss per share as their effect would have been anti-dilutive. | ||||||||
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Commitments and Contingencies Disclosure [Abstract] | ' | ||||
Commitments and Contingencies | ' | ||||
5. Commitments and Contingencies | |||||
Operating Leases | |||||
The Company leases 27,446 square feet of office and laboratory space in Los Angeles, California, under a non-cancelable operating lease that was amended and extended on February 3, 2014 and will expire on June 30, 2015. The Company has the option to extend the lease to June 30, 2016. The Company also leased 1,460 square feet of space in Frederick, Maryland, where administrative functions were performed until July 31, 2012. The Company moved the administrative functions performed out of this office primarily to its Los Angeles facilities and closed the Maryland office on July 31, 2012. The lease for the Maryland office expired on January 31, 2013. | |||||
Rent expense, which is classified in cost of revenue, general and administrative, and research and development expenses was $686,651 and $683,926 for the years ended December 31, 2012 and 2013, respectively. | |||||
Future minimum lease payments by year and in the aggregate due under noncancelable operating leases for facilities, equipment and software as a service, consist of the following at December 31, 2013: | |||||
Years Ending December 31, | |||||
2014 | $ | 1,228,880 | |||
2015 | 564,518 | ||||
2016 | 35,807 | ||||
Total | $ | 1,829,205 | |||
Guarantees | |||||
The Company enters into indemnification provisions under its agreements with other counterparties in its ordinary course of business, typically with business partners, clients and landlords. Under these provisions, the Company generally indemnifies and holds harmless the indemnified party for losses suffered or incurred by the indemnified party as a result of the Company's activities. These indemnification provisions generally survive termination of the underlying agreement. The Company reviews its exposure under these agreements no less than annually, or more frequently when events require. The Company believes the estimated fair value of these agreements is minimal as, historically, no payments have been made by the Company under these indemnification obligations. Accordingly, the Company has no liabilities recorded for these agreements as of December 31, 2012 and December 31, 2013. | |||||
Legal Matters | |||||
The Company is, from time to time, involved in legal proceedings, regulatory actions, claims and litigation arising in the ordinary course of business. Reserves are established for specific liabilities in connection with legal actions when they can be deemed probable and estimable. These matters are not expected to have a material adverse effect upon the Company’s financial condition. | |||||
Employment Agreements | |||||
The Company has employment contracts with several individuals, which provide for annual base salaries and potential bonuses. These contracts contain certain change of control, termination and severance clauses that require the Company to make payments to certain of these employees if certain events occur as defined in their respective contracts. | |||||
License_and_Collaborative_Agre
License and Collaborative Agreements | 12 Months Ended |
Dec. 31, 2013 | |
License And Collaborative Agreements [Abstract] | ' |
License and Collaborative Agreements | ' |
6. License and Collaborative Agreements | |
License Agreement with the University of Southern California (“USC”) | |
In April 2000, as amended in June 2002 and April 2005, the Company entered into a license agreement with USC. Under this agreement, USC granted the Company a worldwide, exclusive license with the right to sublicense, the patents for nucleic acid extraction methodologies (“RGI-1”) and related technology, for use in human and veterinary diagnostic laboratory services, the sale of clinical diagnostic products, and the sale of research products to the research community. USC retains the right under the agreement to use the technology for research and educational purposes. | |
In consideration for this license, the Company agreed to pay USC royalties based on a percentage of net sales of products or services that make use of RGI-1 and related technology and to meet a certain minimum in royalty payments. Royalty expense relating to this agreement amounted to $332,504 and $305,616 for the years ended December 31, 2012 and 2013, respectively. Such expense is included in cost of revenue in the accompanying statements of operations. | |
License Agreement with Roche Molecular Systems (“Roche”) | |
In November 2004, the Company entered into a non-exclusive license to use Roche’s technology including specified nucleic acid amplification processes (“PCR Processes”) to perform certain human invitro clinical laboratory services. In consideration for this license, the Company is obligated to pay royalties to Roche, based on a percentage of net sales of products or services that make use of the PCR Processes. Royalty expense included in cost of revenue relating to this agreement amounted to $336,285 and $280,325 for the years ended December 31, 2012 and 2013, respectively. | |
In November 2004, the Company also entered into an agreement with Roche, pursuant to which the Company is collaborating with Roche to produce commercially viable assays used in the validation of genetic markers for pharmaceutical companies. Specifically, the Company has licensed the rights to Roche to use the pre-diagnostic assays the Company develops in the course of using its RNA-extraction technologies to provide testing services to pharmaceutical companies and to produce diagnostic kits that then can be sold commercially to those pharmaceutical companies. Roche is required to pay the Company royalties of a certain percentage of net sales of such diagnostic kits sold to pharmaceutical companies. Through December 31, 2013, Roche has not been required to pay any royalties to the Company pursuant to this agreement. | |
Services Agreement with Taiho Pharmaceutical Co., Ltd. (“Taiho”) | |
In July of 2001, the Company entered into an agreement with Taiho pursuant to which the Company provides Taiho with RGI-1 generated molecular-based tumor analyses for use in guiding chemotherapy treatment for cancer patients and for use in Taiho’s business of developing and marketing pharmaceutical and diagnostic products for use against cancer. Pursuant to the agreement, as amended, the Company appointed Taiho as the exclusive purchaser in Japan of tests and testing services based upon the RGI-1 using gene expression through 2010 for: (i) any one or the combination of specified molecular markers, (ii) the therapeutic use of specified compounds, or (iii) the diagnosis or therapeutic treatment of specified precancerous and cancerous diseases. The Company also granted Taiho the right to be a non-exclusive purchaser in Japan of tests and testing services based upon the RGI-1 using gene expression, other than those for which Taiho has exclusivity, for: (i) any one or combination of molecular markers, (ii) the therapeutic use of any compound or biological product against cancer, or (iii) the diagnosis or therapeutic treatment of precancerous and cancerous diseases. | |
In consideration for the testing services provided, Taiho paid an upfront payment at the commencement of the agreement and is obligated to pay regular testing fees, covering the specific services performed on a monthly basis. In December 2009, the Company amended its agreement with Taiho and the agreement was renewed for an additional three years. According to the terms of the renewal, Taiho’s appointment as an exclusive purchaser in Japan of certain tests and testing services and its minimum purchasing obligations ended on December 31, 2010 and as such, Taiho was only obligated to purchase tests and testing services based on its needs for 2011 and 2012. The Company and Taiho subsequently entered into an amendment to the agreement effective January 1, 2013 that extended the term through December 31, 2013. Revenue recognized under this agreement for the years ended December 31, 2012 and 2013 was $1,193,425 and $950,000, respectively. | |
Services Agreement with GlaxoSmithKline, LLC formerly known as SmithKline Beecham Corporation (d.b.a. GlaxoSmithKline or “GSK”) | |
In January 2006, the Company entered into a master services agreement with GSK, a leading pharmaceutical manufacturer, pursuant to which the Company provides services in connection with profiling the expression of various genes from a range of human cancers. Under the agreement, the Company provides GSK with testing services as described in individual protocols and GSK pays the Company for such services based on the pricing schedule established for each particular protocol. GSK is obligated to make minimum annual payments to the Company under the agreement and also was obligated to make a non-refundable upfront payment to the Company, to be credited against work undertaken pursuant to the agreement. | |
In December 2008, the Company amended and restated its master services agreement with GSK and extended the term of the agreement for a two-year period, with the option for the parties to extend the agreement for additional one-year periods at the end of the term, upon their mutual written agreement. In addition, the Company became a preferred provider to GSK and its affiliates of genetic testing services on a fee-for-service basis and, in anticipation of the services to be provided, GSK agreed to make a non-refundable upfront payment. | |
The Company recognized revenue of $1,280,704 and $1,134,366 relating to the GSK agreement for the years ended December 31, 2012 and 2013, respectively. | |
Non-Exclusive License Agreement with GSK | |
In March 2010, the Company entered into a non-exclusive license agreement with GSK. Under the agreement, the Company granted GSK a non-exclusive, sublicenseable license to its proprietary PCR analysis technology and diagnostic expertise to assess BRAF gene mutations in human tumor samples. As part of the agreement, the Company received a non-refundable technology access fee in consideration for the transfer of the Company’s technology to GSK. The agreement also contains milestone provisions which allowed the Company to earn up to $1.5 million in further payments from GSK. The Company earned milestone payments from GSK totaling $500,000 and $1,000,000 for the years ended December 31, 2012 and 2013, respectively. These amounts are included in the total revenue from GSK discussed above. | |
Master Services Agreement with GlaxoSmithKline Biologicals S.A. (“GSK Bio”) | |
On July 26, 2012, the Company entered into a second amended and restated master services agreement with GSK Bio, the vaccine division of GSK. Pursuant to this agreement, which has an effective date of May 15, 2012, the Company provides testing services for clinical trials and epidemiology studies relating to GSK Bio’s cancer immunotherapies. The Company performs these testing services on a fee-for-service basis as embodied in written task orders. GSK Bio retains the intellectual property rights to inventions, improvements and data resulting from the services performed under the Agreement. The Company retains all intellectual property rights to its testing services, proprietary processes and all accompanying patent information owned by the Company. All intellectual property owned by either party on the date of the Agreement remains the exclusive property of the owning party. | |
The Agreement will expire on December 31, 2014, provided that any outstanding task orders at the time of termination will not thereby terminate (unless otherwise agreed in writing by the parties), and any such task orders will continue for the respective terms specified in such task orders (and the parties shall continue to perform their obligations thereunder). GSK Bio may terminate the Agreement, without cause, upon 90 days’ written notice to the Company. The Company may terminate the Agreement, without cause, upon one year’s written notice to GSK Bio. The Agreement may also be terminated early if either party enters bankruptcy or similar proceedings or in the event of a material breach. GSK Bio may terminate the Agreement immediately if the Company experiences a “change of control,” as defined in the Agreement. | |
The Agreement also provides for mutual indemnification by the parties and contains customary representations, warranties and covenants, including covenants governing the parties’ use of confidential information and representations regarding adequate insurance coverage or self-insurance. | |
The Company recognized revenue of $3,241,211 and $3,534,619 relating to the services performed for GSK Bio for the years ended December 31, 2012 and 2013, respectively. | |
Collaboration Agreement with Shanghai BioChip Company, Ltd. (“SBC”) | |
On March 5, 2007, the Company entered into a collaboration agreement with SBC pursuant to which SBC provides exclusive pharmacogenomic testing services to the Company’s clients in China. | |
Pursuant to the agreement, the Company has granted SBC an exclusive license in China to provide services in China using the Company’s proprietary RNA extraction technologies. Subject to consent from USC, the Company granted SBC an exclusive sublicense to patents licensed from USC for distribution of testing services in China. In turn, SBC performs RNA extraction from formalin-fixed paraffin-embedded (“FFPE”) tissue specimens exclusively for the Company during the term of the agreement. | |
This agreement had an initial term of five years, with an automatic renewal for an additional three-year term unless either party gives 90 days’ notice in advance of the renewal date of its intent not to renew. As neither party gave notice of intent not to renew, the agreement has automatically renewed for a successive three year period. Pursuant to the agreement, SBC receives a percentage of the gross margin, as defined in the agreement, collected from the Company’s clients in China as compensation for its testing services performed. For the year ended December 31, 2012, and December 31, 2013, testing services totaled $15,355 and $35,027, respectively. | |
Commission Agreement with Hitachi Chemical Co., Ltd. (“Hitachi”) | |
On July 26, 2007, the Company entered into a collaboration agreement with Hitachi, a leading diagnostics manufacturer in Japan. Under the terms of this agreement, Hitachi used the Company's proprietary and patented techniques to extract genetic information from FFPE tissue samples collected in Southeast Asia, Australia and New Zealand. As part of this collaboration agreement, the Company provides Hitachi with the technical information and assistance necessary to perform the testing services. Hitachi is responsible for expenses related to the cost of laboratory equipment and modification to the laboratory facilities, as well as the cost of reagents. The Southeast Asian countries covered under this agreement include Japan, North Korea, South Korea, Taiwan, Mongolia, Pakistan, Bangladesh, Sri Lanka, Nepal, Singapore, Malaysia, Indonesia, Brunei, Thailand, Myanmar, Laos, Cambodia, Vietnam and the Philippines (the “Territory”). | |
The collaboration agreement had an initial term expiring on June 30, 2010, with an automatic renewal for one year at the end of the original period under the same terms and conditions. Pursuant to the agreement, Hitachi performed certain testing services and received a percentage of the revenue collected from the Company's clients in the Territory, which totaled $526,823 and $0 for the years ended December 31, 2012 and 2013, respectively. These amounts were recorded as cost of revenue in the consolidated statement of operations and comprehensive loss. Due to the closing of Hitachi’s applicable facility in the Territory, the Company and Hitachi agreed to terminate this agreement effective September 30, 2012. | |
Stock_Option_Plans
Stock Option Plans | 12 Months Ended | |||||||||||||||
Dec. 31, 2013 | ||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | |||||||||||||||
Stock Option Plans | ' | |||||||||||||||
7. Stock Option Plans | ||||||||||||||||
In March 2000, the Company adopted a Stock Option Plan (the “2000 Stock Plan”) as approved by its Board of Directors. Under the 2000 Stock Plan, the Company granted options to acquire up to 1,600,000 shares of common stock. In connection with the adoption of the 2006 Employee, Director and Consultant Stock Plan, as further discussed below, the Company is to grant no additional options under the 2000 Stock Plan. Under the 2000 Stock Plan, there were no options to purchase shares of the Company’s common stock that remained outstanding as of December 31, 2012. Prior to March 2007, the Company also granted options to purchase 16,000 shares of common stock to two consultants which were granted under separate agreements outside of the 2000 Stock Plan. | ||||||||||||||||
On October 26, 2006, the Board of Directors of the Company approved, and on May 1, 2007, reapproved the adoption of the 2006 Employee, Director and Consultant Stock Plan (the “2006 Stock Plan”). The stockholders approved the 2006 Stock Plan on June 1, 2007. The initial number of shares which may be issued from time to time pursuant to the 2006 Stock Plan was 2,160,000 shares of common stock. Also, the 2006 Stock Plan includes the number of shares subject to purchase under options issued under the 2000 Stock Plan, where the options expired on or after October 18, 2006, subject to a maximum of 210,000 additional options. In addition, on the first day of each fiscal year of the Company during the period beginning in fiscal year 2008 and ending on the second day of fiscal year 2017, the number of shares that may be issued from time to time pursuant to the 2006 Stock Plan is increased by the lesser of (i) 200,000 shares or equivalent, after determination of the effect of any stock split, stock dividend, combination or similar transactions as set forth in the 2006 Stock Plan, (ii) 5% of the number of outstanding shares of common stock of the Company on such date or (iii) an amount determined by the Board of Directors of the Company. The initial number of shares available for issuance of 2,160,000 increased by 210,000 for options issued under the 2000 Stock Plan expiring after October 2006 and by 200,000 in each year from 2008 through 2013, resulting in the total number of shares that may be issued as of January 1, 2013 to be 3,570,000. As of December 31, 2013, there were 1,281,924 options available for grant under the 2006 Stock Plan. | ||||||||||||||||
Employee options vest according to the terms of the specific grant and expire 10 years from the date of grant. Non-employee option grants to date vest typically over a 2 to 3 year period. Under the 2006 Stock Plan, the Company had 2,288,076 options outstanding at a weighted average exercise price of $1.83 at December 31, 2013. There were 1,362,317 non-vested stock options with a weighted average grant date fair value of $1.02 outstanding at December 31, 2013. As of December 31, 2013, there was $1,130,494 of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the 2006 Stock Plan. That cost is expected to be recognized over a weighted-average period of 3.0 years. | ||||||||||||||||
Except for the certain grants of restricted common stock and common stock options containing market conditions as described below, the Company estimated share-based compensation expense for the years ended December 31, 2012 and 2013 using the Black-Scholes model with the following weighted average assumptions: | ||||||||||||||||
Year Ended December 31, | ||||||||||||||||
2012 | 2013 | |||||||||||||||
Risk free interest rate | 0.79-1.32 | % | 0.90-1.77 | % | ||||||||||||
Expected dividend yield | — | — | ||||||||||||||
Expected volatility | 71.9-101.2 | % | 102.2-107.4 | % | ||||||||||||
Expected term **(in years) | 6.0-6.25 | 5.0-6.0 | ||||||||||||||
Forfeiture rate | 7 | % | 7 | % | ||||||||||||
** Expected term is calculated using SAB 107, Simplified Formula. Management has concluded that the use of the simplified method for calculating the expected term of its common stock option grants is appropriate given the lack of historical exercises and the standard terms of the employee option grants, including options are granted at-the-money, exercise is conditional only on performing service through the vesting dates, termination of service causes forfeiture of options, employees have a limited number of days to exercise options after termination of service, and options are non-transferable. | ||||||||||||||||
The following table summarizes the stock option activity for the 2000 Stock Plan and the 2006 Stock Plan for the year ended December 31, 2013: | ||||||||||||||||
Weighted | ||||||||||||||||
Average | Remaining | Aggregate | ||||||||||||||
Number of | Exercise | Contractual | Intrinsic | |||||||||||||
Shares | Price | Life (Years) | Value | |||||||||||||
Outstanding, December 31, 2011 | 1,870,846 | $ | 3.67 | 7.4 | $ | 66,976 | ||||||||||
Granted | 1,039,200 | 1.35 | ||||||||||||||
Exercised | — | — | ||||||||||||||
Expired | -824,023 | 4.77 | ||||||||||||||
Forfeited | -336,713 | 1.84 | ||||||||||||||
Outstanding, December 31, 2012 | 1,749,310 | $ | 2.12 | 8.32 | $ | 151,919 | ||||||||||
Granted | 1,115,750 | 1.33 | ||||||||||||||
Exercised | -18,023 | 1.33 | ||||||||||||||
Expired | -253,060 | 2.3 | ||||||||||||||
Forfeited | -305,901 | 1.39 | ||||||||||||||
Outstanding, December 31, 2013 | 2,288,076 | $ | 1.83 | 8.41 | $ | 1,082 | ||||||||||
Exercisable, December 31, 2013 | 925,759 | $ | 2.55 | 6.86 | $ | 316 | ||||||||||
The weighted-average grant-date fair value of options granted during the years ended December 31, 2012 and 2013 was $0.89 and $1.07, respectively. | ||||||||||||||||
The following table provides additional information in regards to options outstanding as of December 31, 2013: | ||||||||||||||||
Options Outstanding | Options Exercisable | |||||||||||||||
Weighted Average | Weighted Average | |||||||||||||||
Remaining | Remaining | |||||||||||||||
Number of | Contractual | Number of | Contractual | |||||||||||||
Exercise Price | Options | Term | Options | Term | ||||||||||||
$ | 1.00 to 1.99 | 1,783,076 | 9.1 | 488,913 | 8 | |||||||||||
2.00 to 2.99 | 287,500 | 7.6 | 219,346 | 7.4 | ||||||||||||
3.00 to 3.99 | 71,000 | 4.6 | 71,000 | 4.6 | ||||||||||||
4.29 | 11,500 | 3.6 | 11,500 | 3.6 | ||||||||||||
7 | 135,000 | 3.4 | 135,000 | 3.4 | ||||||||||||
2,288,076 | 8.4 | 925,759 | 6.9 | |||||||||||||
Stock-based compensation expense was classified in the results of operation as follows: | ||||||||||||||||
Year Ended December 31, | ||||||||||||||||
2012 | 2013 | |||||||||||||||
Cost of revenue | $ | 57,999 | $ | 30,527 | ||||||||||||
Selling and marketing expense | 54,527 | 29,791 | ||||||||||||||
General and administrative expense | 672,869 | 372,158 | ||||||||||||||
Research and development expense | 32,642 | 41,625 | ||||||||||||||
Totals | $ | 818,037 | $ | 474,101 | ||||||||||||
Thomas Bologna was appointed Chief Executive Officer of the Company on December 21, 2011 and in connection with his appointment, Mr. Bologna was awarded stock options outside of the 2006 Stock Plan. Pursuant to the employment agreement between the Company and Mr. Bologna, dated December 21, 2011, and in reliance on NASDAQ Listing Rule 5636(c), the Company granted Mr. Bologna (i) a stock option to purchase 600,000 shares of the Company’s common stock, which vests monthly over 36 months from the date of grant, subject to his continued employment with the Company, (ii) a stock option to purchase 300,000 shares of the Company’s common stock, which vests in two equal installments on the first day of the 18th and 36th calendar months from the date of grant, subject to his continued employment with the Company, or if earlier, the date on which the 30-day trailing average closing price of the Company’s common stock equals or exceeds $1.80, and (iii) 270,000 shares of restricted common stock of the Company, which vest on the date on which the 30-day trailing average closing price of the Company’s common stock equals or exceeds $2.40. The exercise price of the stock options is $1.20 per share, the closing price of the Company’s common stock on the day prior to the date of grant. The expense recognized in connection with these grants was approximately $540,000 and $178,122 for the years ended December 31, 2012 and 2013, respectively, and is included in the above table. | ||||||||||||||||
Since the restricted shares of common stock grant vests upon attainment of a target price for the Company’s common stock and each tranche of the 300,000 share common stock option grant can vest sooner than the stated vesting dates based upon attainment of a target price for the Company’s common stock, these awards are deemed to include market conditions for purposes of determining the valuation and accounting for the awards. Accordingly, the fair value of the restricted shares of common stock grant and each tranche of the 300,000 share common stock option grant that Mr. Bologna received was determined using a Monte-Carlo simulation model to simulate the Company’s stock prices in the future that would trigger or not trigger the market conditions. For these awards containing market conditions, the compensation amount will be attributed over the service date unless vesting occurs sooner due to achieving the market condition. | ||||||||||||||||
The following table summarizes these awards to Mr. Bologna: | ||||||||||||||||
Intrinsic | ||||||||||||||||
Value as of | Remaining | |||||||||||||||
December 31, | Options | Contractual | ||||||||||||||
Type | Grant Date | Number of Awards | 2013 | Exercise Price | Exercisable | Term | ||||||||||
Restricted Shares of Common Stock | 12/21/11 | 270,000 | $ | 313,200 | $ | — | — | 8 | ||||||||
Options | 12/21/11 | 600,000 | $ | — | $ | 1.2 | 400,000 | 8 | ||||||||
Options | 12/21/11 | 300,000 | $ | — | $ | 1.2 | 300,000 | 8 | ||||||||
During the first quarter of 2012, Mr. Bologna’s stock option award of 300,000 shares met the conditions for vesting in that the 30-day trailing average closing price of the Company’s common stock exceeded $1.80. The Company recognized expense of $129,000 for the vesting of this tranche of options for Mr. Bologna’s stock awards during the quarter ended March 31, 2012. | ||||||||||||||||
Income_Taxes
Income Taxes | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Income Tax Disclosure [Abstract] | ' | |||||||
Income Taxes | ' | |||||||
8. Income Taxes | ||||||||
The components of the income tax provision were as follows: | ||||||||
Year Ended December 31, | ||||||||
2012 | 2013 | |||||||
Current | ||||||||
Federal | $ | — | $ | — | ||||
Foreign | — | — | ||||||
State | — | — | ||||||
Total | — | — | ||||||
Deferred | ||||||||
Federal | — | — | ||||||
Foreign | — | — | ||||||
State | — | — | ||||||
— | — | |||||||
Income tax provision | $ | — | $ | — | ||||
For financial statement purposes, loss before income tax provision includes the following components: | ||||||||
Year Ended December 31, | ||||||||
2012 | 2013 | |||||||
Domestic | $ | -7,750,861 | $ | -8,012,906 | ||||
Foreign | -6,218 | -7,609 | ||||||
$ | -7,757,079 | $ | -8,020,515 | |||||
A reconciliation of the expected income tax benefit computed using the federal statutory income tax rate of 34% to the Company’s effective income tax rate is as follows: | ||||||||
Year Ended December 31, | ||||||||
2012 | 2013 | |||||||
Income tax benefit based on federal statutory rate | $ | -2,637,000 | $ | -2,729,000 | ||||
State income tax benefit, net of federal income tax | -216,000 | -413,000 | ||||||
Change in deferred tax valuation allowance | 849,000 | 3,048,000 | ||||||
Stock-based compensation | 988,000 | 75,000 | ||||||
Foreign net operating loss | 785,000 | — | ||||||
Other, net | 231,000 | 19,000 | ||||||
Income tax provision | $ | — | $ | — | ||||
The tax effects of temporary differences that give rise to significant portions of the Company’s deferred tax assets and deferred tax liabilities are presented below: | ||||||||
December 31, | December 31, | |||||||
2012 | 2013 | |||||||
Deferred tax assets: | ||||||||
Domestic net operating loss carryforwards | $ | 13,669,000 | $ | 15,627,000 | ||||
Foreign net operating loss carryforwards | 798,000 | 800,000 | ||||||
Deferred revenue | 191,000 | — | ||||||
Federal and state tax credit | 297,000 | 297,000 | ||||||
Stock-based compensation | 586,000 | 682,000 | ||||||
Capitalized costs | 1,233,000 | 1,232,000 | ||||||
Other, net | 944,000 | 2,129,000 | ||||||
Total gross deferred tax assets | 17,718,000 | 20,767,000 | ||||||
Less valuation allowance on deferred tax assets | -17,718,000 | -20,767,000 | ||||||
Net deferred taxes | — | — | ||||||
Deferred tax liabilities: | ||||||||
Plant and equipment, principally accelerated depreciation | — | — | ||||||
Total deferred tax liabilities | — | — | ||||||
Net deferred taxes | $ | — | $ | — | ||||
Deferred income taxes result from temporary differences between income tax and financial reporting computed at the effective income tax rate. The Company has established a valuation allowance against its deferred tax assets due to the uncertainty surrounding the realization of such assets. Management periodically evaluates the recoverability of the deferred tax assets. At such time it is determined that it is more likely than not that deferred tax assets are realizable, the valuation allowance will be reduced. | ||||||||
The Company files U.S. federal, U.S. state, and foreign tax returns. The Company’s major tax jurisdictions are U.S. federal and the State of California and are subject to tax examinations for the open years from 2003 through 2013. | ||||||||
As of December 31, 2013, the Company had net operating loss carryforwards for federal and state income tax purposes of approximately $40 million and $35 million, respectively. If not utilized, the federal net operating loss and tax credit carryforwards expire beginning in 2021. The state net operating loss carryforward expires beginning in 2014. Section 382 of the Internal Revenue Code contains rules that limit the ability of a company that undergoes an ownership change, which is generally a change in ownership of more than 50.0 percent of its stock over a three-year period, to utilize its net operating loss carryforwards. The Company has had numerous transactions in its common stock, and these transactions may have resulted in a change in ownership that limits the utilization of net operating loss carryforwards. The Company has not evaluated the impact of Section 382, if any, on its ability to utilize its net operating loss carry forwards in future years. | ||||||||
As of December 31, 2013, the Company had U.K. net operating loss carryforwards totaling approximately $2.9 million that may be carried forward indefinitely. A full valuation allowance has been provided against this asset. | ||||||||
Segment_Information
Segment Information | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Segment Reporting [Abstract] | ' | |||||||
Segment Information | ' | |||||||
9. Segment Information | ||||||||
The Company operates in a single reporting segment, with operating facilities in the United States. | ||||||||
The following enterprise wide disclosure was prepared on a basis consistent with the preparation of the financial statements. The following tables contain certain financial information by geographic area: | ||||||||
Year Ended December 31, | ||||||||
2012 | 2013 | |||||||
Revenue: | ||||||||
United States | $ | 14,238,993 | $ | 15,219,155 | ||||
Europe | 3,304,251 | 3,556,354 | ||||||
Japan | 1,193,425 | 1,028,850 | ||||||
$ | 18,736,669 | $ | 19,801,359 | |||||
December 31, | December 31, | |||||||
2012 | 2013 | |||||||
Long-lived assets: | ||||||||
United States | $ | 1,598,607 | $ | 2,681,666 | ||||
$ | 1,598,607 | $ | 2,681,666 | |||||
Offerings_of_Common_Stock
Offerings of Common Stock | 12 Months Ended | ||||||
Dec. 31, 2013 | |||||||
Stockholders Equity Note [Abstract] | ' | ||||||
Sale of Common Stock | ' | ||||||
10. Offerings of Common Stock | |||||||
August 2013 Issuance of Registered Shares of Common Stock of the Company as Part of the Pathwork Assets Acquisition Purchase Price | |||||||
On August 23, 2013, the Company entered into an asset purchase agreement (the “Pathwork Purchase Agreement”) with Pathwork (assignment for the benefit of creditors), LLC (“Seller”), pursuant to which the Company acquired substantially all of the assets of Pathwork Diagnostics, Inc. (“Pathwork”), which had previously assigned all of its assets to Seller for the benefit of its creditors pursuant to a General Assignment, dated as of April 2, 2013. Pursuant to the Pathwork Purchase Agreement, the Company acquired the Pathwork assets for the following consideration: (i) an aggregate of 500,000 newly-issued registered shares of the Company’s common stock valued at $1.96 per share, or $980,000, issued to two senior secured creditors of Pathwork which were designated by Seller in the Pathwork Purchase Agreement and (ii) a cash payment of $200,000 to Seller. | |||||||
September 2013 Registered Direct Offering | |||||||
On September 20, 2013, the Company entered into a definitive agreement with certain institutional investors for the sale of 932,805 shares of its common stock in a registered direct offering at a price of $2.05 per share (the "September 2013 Offering"). The September 2013 Offering was completed on September 25, 2013. Gross proceeds of the September 2013 Offering were $1,912,250. Net proceeds, after deducting the placement agent fee and the September 2013 Offering costs, were approximately $1.7 million. | |||||||
December 2013 Underwritten Public Offering | |||||||
On December 13, 2013, the Company entered into an underwriting agreement with National Securities Corporation (the "Underwriter"), pursuant to which the Underwriter agreed to purchase 4,464,443 shares of the Company's common stock (the "Shares") at the public offering price of $1.20 per share less an underwriting discount of 5%. The Shares were offered and sold by the Company pursuant to an effective registration statement on Form S-3 (File No. 333-171266) filed by the Company with the Securities and Exchange Commission on December 17, 2010, as amended, as supplemented by the prospectus supplement dated December 13, 2013 relating to the offering and the accompanying prospectus (the "December 2013 Offering"). The December 2013 Offering was completed on December 13, 2013. Gross proceeds of the December 2013 Offering were $5,357,332. Net proceeds, after deducting the placement agent fee and the December 2013 Offering costs, were approximately $4.8 million. | |||||||
Common stock classified outside of stockholders’ equity (deficit) | |||||||
March 2010 Private Placement | |||||||
On March 5, 2010, the Company entered into a purchase agreement with certain affiliates of and funds managed by Lansdowne Partners Limited Partnership (“Lansdowne”), Greenway Capital Partners and Paragon Associates for the private placement of 3,005,349 newly-issued shares of the Company’s common stock at a per share price of $1.31. The closing of the sale of the shares occurred on March 5, 2010. In connection with the acquisition of the shares, the purchasers were granted certain preemptive rights permitting them to maintain their percentage ownership interests in connection with future issuances of the Company’s capital stock, subject to various exceptions and limitations. Lansdowne participated in the private placement by electing to exercise the preemptive rights granted to it pursuant to the purchase agreement by and between the Company and Lansdowne, dated July 22, 2009. Net proceeds received from this financing were approximately $3,879,403. | |||||||
In connection with the private placement, the Company also entered into a registration rights agreement, dated March 5, 2010, with the purchasers pursuant to which it agreed to file, within 45 days of the closing of the private placement, a registration statement with the SEC to register the shares for resale, which registration statement was required to become effective within 120 days following the closing. The Company also granted certain "piggyback" registration rights to the purchasers which are triggered if the Company proposes to file a registration statement for its own account or the account of one or more shareholders until the earlier of the sale of all of the shares or the shares becoming eligible for sale under Rule 144(b)(1) without restriction. | |||||||
Pursuant to the registration rights agreement, dated March 5, 2010, the Company filed a registration statement with the SEC to register the 3,005,349 shares sold to Lansdowne, Greenway and Paragon for resale, which became effective on May 19, 2010 and which registration statement remained effective as of December 31, 2013. | |||||||
Under the registration rights agreements with the purchasers, the Company is obligated to use commercially reasonable efforts to (i) cause the registration statement described above to remain continuously effective and (ii) to maintain the listing of the Company’s common stock on NASDAQ or other exchanges, as defined, for a period that will terminate on the earlier of March 5, 2013 or the date on which the purchasers have sold all shares of common stock. The Company is also required to file with the SEC in a timely manner all reports and other documents required of the Company under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). In the event the Company fails to satisfy its obligations under the registration rights agreements, the Company would be in breach of said agreements, in which event, the purchases would be entitled to pursue all rights and remedies at law or equity including an injunction or other equitable relief. These registration rights agreements do not provide an explicitly stated or defined penalty due upon a breach. Because (i) the potential penalty for any breach of these registration rights agreement is not explicitly stated or defined, which prohibits the Company from applying the guidance of ASC 825-20-15, Registration Payment Arrangements and (ii) complying with all filing requirements under the Exchange Act as described above is not solely within the Company’s control, the Company is required to present the investment of approximately $3,879,403 in the Company’s common stock as common stock outside of stockholders’ equity in the accompanying consolidated balance sheet under ASC 480-10-S99-3, Classification and Measurement of Redeemable Securities. | |||||||
On January 18, 2012, the Company removed the restrictions on 3,658,676 shares purchased by Lansdowne, of which 600,769 related to this offering, and reclassified the shares to common stock from common stock classified outside of equity (deficit). On March 5, 2013, the Company reclassified the remaining shares of common stock from this offering to common stock from common stock classified outside of equity (deficit). Therefore, as of December 31, 2012 and 2013, a total of $3,092,396 and $0 of the March 2010 private placement common stock was classified outside of stockholders’ equity (deficit), respectively. | |||||||
February 2012 Private Placement | |||||||
On February 2, 2012, the Company entered into purchase agreements with various investors (collectively, the “February Investors”) for the private placement of an aggregate of 5,257,267 newly-issued shares of the Company’s common stock (the “February Shares”) at a purchase price of $1.50 per share (the “February 2012 Private Placement”). Net cash proceeds raised in the February 2012 Private Placement were approximately $7,822,000. The February Investors participating in the February 2012 Private Placement were various institutions and all the then serving officers and directors of the Company. The final closing of the February 2012 Private Placement (the “February Closing”) occurred on February 2, 2012. | |||||||
In connection with the February 2012 Private Placement, the Company also entered into registration rights agreements, each dated February 2, 2012, with the February Investors pursuant to which the Company agreed to file, within 90 days of the February Closing, a registration statement with the SEC to register the February Shares for resale, which registration statement is required to become effective within 180 days following the February Closing. The Company also granted the February Investors certain “piggyback” registration rights, which are triggered if the Company proposes to file a registration statement for its own account or the account of one or more shareholders until the earlier of the sale of all of the February Shares or the February Shares becoming eligible for sale under Rule 144(b)(1) without restriction. | |||||||
Pursuant to the registration rights agreements dated February 2, 2012, the Company filed a registration statement with the SEC on April 30, 2012, to register the February Shares for resale. This registration statement became effective on May 17, 2012 and remained effective as of December 31, 2013. | |||||||
Under the registration rights agreements with the February Investors, the Company is obligated to use commercially reasonable efforts to (i) cause the registration statement described above to remain continuously effective and (ii) to maintain the listing of the Company’s common stock on NASDAQ or other exchanges, as defined, for a period that will terminate on the earlier of February 2, 2013, the date on which the February Investors have sold all covered registrable securities or the date on which there are no longer any covered registrable securities outstanding. The Company is also required to file with the SEC in a timely manner all reports and other documents required of the Company required of the Company under the Exchange Act. In the event the Company fails to satisfy its obligations under the registration rights agreements, the Company would be in breach of said agreements, in which event, the February Investors would be entitled to pursue all rights and remedies at law or equity including an injunction or other equitable relief. These registration rights agreements do not provide an explicitly stated or defined penalty due upon a breach. Because (i) the potential penalty for any breach of these registration rights agreement is not explicitly stated or defined, which prohibits the Company from applying the guidance of ASC 825-20-15, Registration Payment Arrangements and (ii) complying with all filing requirements under the Exchange Act as described above is not solely within the Company’s control, the Company was required to present the investment of approximately $7,885,900 in the Company’s common stock as common stock outside of stockholders’ equity in the accompanying consolidated balance sheet under ASC 480-10-S99-3, Classification and Measurement of Redeemable Securities. | |||||||
As of December 31, 2012, the Company had removed the restrictions on 3,100,000 shares and reclassified the shares to common stock from common stock classified outside of equity (deficit). Therefore, as of December 31, 2012, a total of $3,183,328 of February 2012 Private Placement common stock was classified outside of stockholders’ equity (deficit). During 2013, the restrictions on the remaining February Shares were removed, and the Company reclassified the related amount for the February Shares to common stock from common stock classified outside of equity (deficit). | |||||||
September 2012 Private Placement | |||||||
On September 13, 2012, the Company entered into a purchase agreement (the “Purchase Agreement”) with Glaxo Group Limited, an affiliate of GSK (the “GSK Investor”) and two existing investors, Swiftcurrent Partners, L.P. and Swiftcurrent Offshore, Ltd. (collectively with the GSK Investor, the “September Investors”) for the private placement of an aggregate of 8,000,000 newly-issued shares of the Company’s common stock (the “September Shares”) at a purchase price of $1.10 per share (the “September 2012 Private Placement”). The Company raised gross cash proceeds of $8,800,000 in the September 2012 Private Placement which closed on September 13, 2012 (the “Closing”). | |||||||
Pursuant to the Purchase Agreement, for so long as the GSK Investor or its affiliates own at least 50% of the September Shares it purchased pursuant to the Purchase Agreement, the GSK Investor has the right to designate one non-voting board observer (the "Board Observer"). The Board Observer, if appointed, has the right to attend all meetings of the Board of Directors of the Company and to receive all board meeting materials, subject to certain restrictions set forth in the Purchase Agreement. As of the date hereof, the GSK Investor has not exercised its right to designate the Board Observer. | |||||||
In connection with the September 2012 Private Placement, the Company also entered into a registration rights agreement, dated September 13, 2012 (the “September Registration Rights Agreement”), with the September Investors pursuant to which the Company agreed to file, within 45 days of the Closing, a registration statement with the SEC to register the September Shares for resale, which registration statement is required to become effective within 180 days following the Closing. The Company also granted the September Investors certain “piggyback” registration rights, which are triggered if the Company proposes to file a registration statement for its own account or the account of one or more stockholders until the earlier of the sale of all of the September Shares or the September Shares becoming eligible for sale under Rule 144(b)(1) without restriction. | |||||||
Under the September Registration Rights Agreement, the Company is obligated to use commercially reasonable efforts to cause a registration statement to become effective and to remain continuously effective and to maintain the listing of the covered common stock on NASDAQ or other exchanges, as defined, for a period that will terminate upon the earlier of (i) the date on which all Registrable Securities covered by such Registration Statement as amended from time to time, have been sold, (ii) the date on which there are no longer any Registrable Securities outstanding or (iii) three years from the date of filing of such Registration Statement (the “ Effectiveness Period ”) and advise each September Investor in writing when the Effectiveness Period has expired. “Registrable Securities” means (i) the September Shares and (ii) shares of capital stock or any other securities issued or issuable with respect to or in exchange for the September Shares; provided, that, a security shall cease to be a Registrable Security with respect to a September Investor upon (A) sale by such September Investor pursuant to a registration statement or Rule 144 under the 1933 Act, or (B) such security becoming eligible for sale by such September Investor without restriction pursuant to Rule 144(b)(1). In the event the Company fails to satisfy its obligations under the September Registration Rights Agreement, the Company would be in breach of such agreement, in which event, the September Investors would be entitled to pursue all rights and remedies at law or equity including an injunction or other equitable relief. The September Registration Rights Agreement does not provide an explicitly stated or defined penalty due upon a breach. Because the potential penalty for any breach of these registration rights agreement is not explicitly stated or defined, which prohibits the Company from applying the guidance of ASC 825-20-15, Registration Payment Arrangements , the Company was required to present the investment of approximately $8,800,000 in the Company’s common stock as common stock outside of stockholders’ equity in the accompanying consolidated balance sheet under ASC 480-10-S99-3, Classification and Measurement of Redeemable Securities . | |||||||
Pursuant to the September Registration Rights Agreement, the Company filed a registration statement with the SEC on October 26, 2012, to register the September Shares for resale. This registration statement became effective on November 13, 2012 and remained effective as of December 31, 2013. | |||||||
As of December 31, 2012, the Company had removed the restriction on 3,000,000 of the 8,000,000 September Shares and reclassified the shares to common stock from common stock classified outside of stockholders’ equity (deficit). Therefore, as of December 31, 2012 and 2013, a total of $5,500,000 of common stock relating to the 5,000,000 remaining restricted September Shares was classified outside of stockholders’ equity (deficit) related to this transaction. | |||||||
Activity in common stock classified outside of stockholders’ equity (deficit) was as follows: | |||||||
Number of | Amount | ||||||
Shares | |||||||
Balance, December 31, 2011 | 6,063,256 | $ | 7,854,682 | ||||
Issuance of common stock classified outside of stockholders’ equity (deficit) , excluding offering costs of $180,790 offset against paid-in capital | 13,257,267 | 16,633,328 | |||||
Reclassification to stockholders’ equity (deficit) | -9,758,676 | -12,712,286 | |||||
Balance, December 31, 2012 | 9,561,847 | $ | 11,775,724 | ||||
Issuance of common stock classified outside of stockholders’ equity (deficit) | — | — | |||||
Reclassification to stockholders’ equity (deficit) | -4,561,847 | -6,275,724 | |||||
Balance, December 31, 2013 | 5,000,000 | $ | 5,500,000 | ||||
Fair_Value_Measurements
Fair Value Measurements | 12 Months Ended | |||||||||
Dec. 31, 2013 | ||||||||||
Fair Value Disclosures [Abstract] | ' | |||||||||
Fair Value Measurements | ' | |||||||||
11. Fair Value Measurements | ||||||||||
ASC 820, Fair Value Measurements and Disclosures, defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. ASC 820 provides guidance on how to measure fair value by providing a fair value hierarchy used to classify the source of the information. ASC 820 establishes a three-level valuation hierarchy of valuation techniques that is based on observable and unobservable inputs. Classification within the hierarchy is determined based on the lowest level of input that is significant to the fair value measurement. The first two inputs are considered observable and the last unobservable, that may be used to measure fair value and include the following: | ||||||||||
Level 1 - Quoted prices in active markets for identical assets or liabilities. | ||||||||||
Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. | ||||||||||
Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. | ||||||||||
As of December 31, 2013, the Company held certain assets that are required to be measured at fair value on a recurring basis, including its cash and cash equivalents. The fair value of these assets was determined using the following inputs in accordance with ASC 820 at December 31, 2012 and 2013: | ||||||||||
Fair Value Measurement as of December 31, 2012 | ||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||
Description | $ | $ | $ | $ | ||||||
Money market accounts (1) | 10,000 | 10,000 | — | — | ||||||
Fair Value Measurement as of December 31, 2013 | ||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||
Description | $ | $ | $ | $ | ||||||
Money market accounts (1) | — | — | — | — | ||||||
-1 | Included in cash and cash equivalents on the accompanying consolidated balance sheet. | |||||||||
As of December 31, 2012 and 2013, the Company did not hold any liabilities that are required to be measured at fair value on a recurring basis. | ||||||||||
Subsequent_Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2013 | |
Subsequent Events [Abstract] | ' |
Subsequent Events | ' |
12. Subsequent Events | |
As further described in Note 5, the Company amended and extended the operating lease for its Los Angeles, California headquarters on February 3, 2014. As amended, the lease will expire on June 30, 2015. The Company has the option to extend the lease to June 30, 2016. | |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Accounting Policies [Abstract] | ' | |||||||||||||
Basis of Consolidation | ' | |||||||||||||
Basis of Consolidation | ||||||||||||||
The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, Response Genetics, Ltd., a Scottish corporation (the “Subsidiary”), which was incorporated in November 2006. The Subsidiary had no employees or active operations during 2012 and 2013. All significant intercompany transactions and balances have been eliminated in consolidation. | ||||||||||||||
Cash and Cash Equivalents | ' | |||||||||||||
Cash and Cash Equivalents | ||||||||||||||
The Company considers all highly liquid investments with a maturity at date of purchase of three months or less to be cash equivalents. The carrying value of cash equivalents approximates fair value due to the short-term nature and liquidity of these instruments. The Company’s cash equivalents are comprised of cash on hand, deposits in banks and money market investments. | ||||||||||||||
Accounts Receivable | ' | |||||||||||||
Accounts Receivable | ||||||||||||||
Pharmaceutical Accounts Receivable | ||||||||||||||
The Company invoices its clients as specimens are processed and any other contractual obligations are met. The Company’s contracts with clients typically require payment within 45 days of the date of invoice. The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of its clients to make required payments. The Company specifically analyzes accounts receivable and historical bad debts, client credit, current economic trends and changes in client payment trends when evaluating the adequacy of the allowance for doubtful accounts. Account balances are charged-off against the allowance when it is probable the receivable will not be recovered. To date, the Company’s clients have primarily been large pharmaceutical companies. As a result, bad debts from clinical accounts receivable to date have been minimal. Pharmaceutical company accounts receivable as of December 31, 2012 and 2013 were $2,549,665 and $1,892,384 respectively. There were no allowances for doubtful accounts recorded against these pharmaceutical accounts receivable at December 31, 2012 and 2013. | ||||||||||||||
ResponseDX® Accounts Receivable | ||||||||||||||
ResponseDX® accounts receivable are recorded from two primary payors: Medicare and third party and private payors (“Private Payors”). ResponseDX® accounts receivable are recorded at established billing rates less an estimated billing adjustment, based on reporting models utilizing historical cash collection percentages and updated for current effective reimbursement factors. Management performs ongoing valuations of accounts receivable balances based on management’s evaluation of historical collection experience and industry trends. Based on the historical experience for our Medicare and Private Payor accounts, management has determined, based on a detailed analysis, that accounts receivable associated with certain billings are unlikely to be collected. Therefore, the Company has recorded an allowance for doubtful accounts of $991,990 and $2,404,659 as of December 31, 2012 and 2013. The Company’s bad debt expense for the years ended December 31, 2012 and 2013 was $1,351,592 and $3,165,918, respectively. | ||||||||||||||
ResponseDX ® accounts receivable consisted of the following: | ||||||||||||||
December 31, | December 31, | |||||||||||||
2012 | 2013 | |||||||||||||
Net Medicare receivable | $ | 890,936 | $ | 2,422,611 | ||||||||||
Net Private Payor receivable | 2,924,412 | 4,315,587 | ||||||||||||
3,815,348 | 6,738,198 | |||||||||||||
Allowance for doubtful accounts | -991,990 | -2,404,659 | ||||||||||||
$ | 2,823,358 | $ | 4,333,539 | |||||||||||
As more fully discussed in Note 3 Property and Equipment and Intangible Assets, the Company acquired accounts receivable in August 2013 that had a valuation of $257,000. All of these receivables were collected by December 31, 2013. | ||||||||||||||
As part of its process for evaluating the collectability of aged accounts receivable management identified delays in the Medicare administrative law appeal process for aged accounts receivable that would extend the process significantly (up to two years). Accordingly, management considered this factor in estimating the allowance for doubtful accounts and concluded that an additional allowance of approximately $690,000 was necessary as of December 31, 2013 to reserve for the balance of Medicare accounts receivable as of December 31, 2013 that were going to age greater than one year shortly after December 31, 2013. | ||||||||||||||
Property and Equipment and Intangible Assets | ' | |||||||||||||
Property and Equipment and Intangible Assets | ||||||||||||||
Property and equipment are carried at cost less accumulated depreciation and amortization. Depreciation and amortization are calculated using the straight-line method over the estimated useful lives of the assets. The Company has determined the estimated useful lives of its property and equipment, as follows: | ||||||||||||||
Laboratory equipment | 5 to 7 years | |||||||||||||
Furniture and equipment | 5 to 7 years | |||||||||||||
Purchased and internally-developed software | 3 to 5 years | |||||||||||||
Leasehold improvements | Shorter of the useful life (5 to 7 years) or the lease term | |||||||||||||
Maintenance and repairs are charged to expense as incurred. The cost and accumulated depreciation of assets sold or otherwise disposed of are removed from the related accounts and the resulting gain or loss is reflected in the statements of operations. The Company has capitalized costs related to the development of database software (see Note 3). The portion of this database placed into service is amortized in accordance with ASC 350-40, Internal-Use Software. The amortization period is five years using the straight-line method. | ||||||||||||||
Revenue Recognition | ' | |||||||||||||
Revenue Recognition | ||||||||||||||
Pharmaceutical Revenue | ||||||||||||||
Revenues that are derived from testing services provided to pharmaceutical companies are recognized on a contract specific basis pursuant to the terms of the related agreements. Revenue is recognized in accordance with ASC 605, Revenue Recognition, which requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence that an arrangement exists; (2) delivery has occurred and title and the risks and rewards of ownership have been transferred to the client or services have been rendered; (3) the price is fixed or determinable; and (4) collectability is reasonably assured. | ||||||||||||||
Revenues are recorded on an accrual basis as the contractual obligations are completed and as a set of assays is processed through the Company’s laboratory under a specified contractual protocol and are recorded on the date the tests are resulted. Certain contracts have minimum assay requirements that, if not met, result in payments that are due upon the completion of the designated period. In these cases, revenues are recognized when the end of the specified contract period is reached. | ||||||||||||||
On occasion, the Company may enter into a contract that requires the client to provide an advance payment for specimens that will be processed at a later date. In these cases, the Company records this advance as deferred revenue and recognizes the revenue as the specimens are processed or at the end of the contract period, as appropriate. | ||||||||||||||
In March 2010, the Company entered into a non-exclusive license agreement with GlaxoSmithKline, LLC, which called for certain milestone payments to be made to the Company when certain events specified in the agreement occur, specifically GlaxoSmithKline, LLC submitting an application to use the license to the FDA, the FDA approving the application, and issuance of certain patent applications to the Company. The Company has no further obligations related to these events and therefore has recorded the milestone payments that were due under the agreement into revenue at the time the event occurred. | ||||||||||||||
The Company recorded revenue from pharmaceutical clients of $6,852,536 and $7,789,985 for the years ended December 31, 2012 and 2013, respectively. | ||||||||||||||
ResponseDX® Revenue | ||||||||||||||
Revenues that are derived from ResponseDX® testing services are recognized in accordance with ASC 605, Revenue Recognition, which requires that four basic criteria be met before revenue can be recognized: (1) persuasive evidence that an arrangement exists; (2) delivery has occurred and title and the risks and rewards of ownership have been transferred to the client or services have been rendered; (3) the price is fixed or determinable; and (4) collectability is reasonably assured. We record revenues when our tests have confirmed results which are evidence that the services have been performed. | ||||||||||||||
Revenues are recorded on an accrual basis as the contractual obligations are completed and as a set of assays is processed through our laboratory under a specified contractual protocol. | ||||||||||||||
ResponseDX® private payor and Medicare revenues are recorded at established billing rates less an estimated billing adjustment, based on reporting models utilizing historical cash collection percentages and updated for current effective reimbursement factors. The Company’s Medicare provider number allows it to invoice and collect from Medicare. The Company’s invoicing to Medicare is primarily based on amounts allowed by Medicare for the service provided as defined by Common Procedural Terminology (“CPT”). | ||||||||||||||
Medicare reimbursement rates are subject to regulatory changes and government funding restrictions. In January 2013, the annual Medicare fee schedules update was announced which included proposed changes to Medicare reimbursement rates that significantly reduced the reimbursement rates for certain of the testing services the Company provides. The Company participated with other impacted organizations to provide guidance to the local Medicare Administrative Contractor (“MAC”) that resulted in the local MAC updating certain pricing through September 2013 which reflected an increase in many of the tests originally priced in January 2013. In addition, on October 1, 2013, the Centers for Medicare and Medicaid Services (“CMS”) issued fees for some, but not all, of the CPT codes used by the Company. As a result of these CPT code changes and Medicare price changes, the Company has experienced a departure from its normal reimbursement patterns with Medicare and other payors. Specifically, the Company has experienced delays in certain reimbursements for services and an increase in initial denials of claims for certain services provided. Accordingly, the Company re-evaluated the assumptions employed in its model for estimating revenue to be recognized for ResponseDX® testing. The Company views the code and price changes described above as affecting only the assumptions the Company used in pricing its services. The nature of the testing the Company provides, the evidence it gathers to establish the creditworthiness of its payors and the delivery method of its services have not changed from prior periods, and there are no indicators that these assumptions require change. | ||||||||||||||
The Company performed an analysis that considered its historical patterns of revenue by payor in conjunction with the fluctuations it experienced in the twelve months ended December 31, 2013 to arrive at the revenue recorded during 2013. The Company believes that the changes in CPT codes and pricing that are causing confusion and erratic payment experience in the payor community will take some time to resolve. The time needed for resolution will depend upon Medicare and the local MAC releasing additional pricing changes and potentially, revisions to previously revised prices, and upon the private payor community adopting the new CPT codes and some level of revised pricing. Accordingly, the Company’s revenue recognition estimates could be materially affected in future periods as pricing and payment patterns change and develop, and the Company may be materially affected by future or retroactive price changes. | ||||||||||||||
The following details ResponseDX® revenue for the years ended December 31, 2012 and 2013: | ||||||||||||||
Year Ended December 31, | ||||||||||||||
2012 | 2013 | |||||||||||||
Net Medicare revenue | $ | 5,405,393 | $ | 4,521,732 | ||||||||||
Net Private Payor revenue | 6,472,386 | 7,489,642 | ||||||||||||
Other | 6,354 | — | ||||||||||||
Net ResponseDX® revenue | $ | 11,884,133 | $ | 12,011,374 | ||||||||||
Cost-Containment Measures | ||||||||||||||
Both government and private pay sources have instituted cost-containment measures designed to limit payments made to providers of health care services, which include diagnostic test providers such as the Company, and there can be no assurance that future measures designed to limit payments made to providers will not adversely affect the Company. | ||||||||||||||
Regulatory Matters | ||||||||||||||
A portion of the Company’s revenues are derived from Medicare reimbursement. Laws and regulations governing Medicare programs are complex and subject to interpretation, and the Company may be adversely affected by future governmental investigations, lawsuits or private actions which include mandatory damages, fines, penalties, criminal charges, loss or suspension of licenses and/or suspension or exclusion from Medicare and certain other governmental programs. The Company believes that it is in compliance with all applicable laws and regulations and is not aware of any pending or threatened investigations involving allegations of potential wrongdoing. | ||||||||||||||
Medicare reimbursement rates are subject to regulatory changes and government funding restrictions. In January 2013, the annual Medicare fee schedules update was announced which included proposed changes to Medicare reimbursement rates that significantly reduced the reimbursement rates for certain of the testing services we provide. The Company participated with other impacted organizations to provide guidance to the local MAC that resulted in the local MAC updating certain pricing through September 2013 which reflected an increase in many of the tests originally priced in January 2013. In addition, on October 1, 2013, CMS issued fees for some, but not all, of the CPT codes used by the Company. It is uncertain if continued guidance provided to Medicare and the local MAC by impacted organizations will result in additional fee increases or additional positive coverage determinations in 2014. If however, the current reduction in reimbursement rates is adopted as is, it may have a material adverse effect on the Company's operations. | ||||||||||||||
On July 8, 2013, CMS released a new proposed rulemaking entitled “Medicare Program; Revisions to Payment Policies under the Physician Fee Schedule, Clinical Laboratory Fee Schedule & Other Revisions to Part B for CY 2014”. This proposed rule contains a number of provisions that may adversely impact the level of reimbursement for a variety of tests for which the Company receives reimbursement from the Medicare program beginning in 2014. Among other things, CMS has proposed examining approximately 1,200 laboratory tests that appear on the Clinical Lab Fee Schedule (“CLFS”) over a period of five years to determine whether advances in technology may have reduced the cost of providing such tests and whether or not the level of reimbursement should be revised. The Company is currently performing molecular testing which is reimbursed using CPT codes that fall on the CLFS. CMS has also proposed changing the methodology used to determine reimbursement rates for the technical component of certain tests reimbursed off of the Physician Fee Schedule (“PFS”). Among other provisions, CMS has proposed limiting the Relative Value Units (“RVUs”) ascribed to the Practice Expense component of their reimbursement formula for tests performed in “Non-Facilities” (which would include most clinical laboratories like the Company) to the RVUs that have been ascribed for the same procedures under the Hospital Outpatient Prospective Payment System, or the Ambulatory Payment Classification (“APC”) system which are used to reimburse “Facilities” (such as hospitals and ambulatory surgery centers). The Company currently performs FISH testing, which may be impacted by this PFS rule change if it is enacted. CMS has not yet proposed any specific rates for 2014 and the Company is examining the potential impact that a reduction in the level of reimbursement for the tests the Company offers may have on its operations. | ||||||||||||||
A number of proposals for legislation or regulation continue to be under discussion which could have the effect of substantially reducing Medicare reimbursements for clinical laboratories or introducing cost sharing to beneficiaries. Depending upon the nature of regulatory action, if any, which is taken and the content of legislation, if any, which is adopted, the Company could experience a significant decrease in revenues from Medicare and Medicaid, which could have a material adverse effect on the Company. The Company is unable to predict, however, the extent to which such actions will be taken. | ||||||||||||||
Cost of Revenue | ' | |||||||||||||
Cost of Revenue | ||||||||||||||
Cost of revenue represents the cost of materials, direct labor, royalties, costs associated with processing tissue specimens including pathological review, staining, microdissection, paraffin extraction, reverse transcription polymerase chain reaction, fluorescence in situ hybridization (“FISH”), quality control analyses, license fees and delivery charges necessary to render an individualized test result. Costs associated with performing tests are recorded as the tests are processed. | ||||||||||||||
License Fees | ' | |||||||||||||
License Fees | ||||||||||||||
The Company has licensed technology for the extraction of ribonucleic acid (“RNA”) from formalin-fixed, paraffin-embedded tumor specimens from the University of Southern California (“USC”). Under the terms of the license agreement, the Company is required to pay royalties to USC calculated as a fixed percentage of the revenue the Company generates by using this technology. The Company also maintains a non-exclusive license to use certain patents related to the polymerase chain reaction (“PCR”) of Roche Molecular Systems, Inc. (“Roche”). The Company pays Roche a royalty fee based on revenue that the Company generates through use of this technology. The Company accrues for such royalties at the time revenue is recognized. Such royalties are included in cost of revenues in the accompanying statements of operations. | ||||||||||||||
Research and Development | ' | |||||||||||||
Research and Development | ||||||||||||||
The Company expenses costs associated with research and development activities as incurred. Research and development costs are expensed as incurred and classified as research and development costs. Research and development costs include employee costs (salaries, payroll taxes, benefits, and travel), equipment depreciation and warranties and maintenance, laboratory supplies, primers and probes, reagents, patent costs and occupancy costs. | ||||||||||||||
Line of Credit | ' | |||||||||||||
Line of Credit | ||||||||||||||
On July 14, 2011, the Company entered into a line of credit agreement with Silicon Valley Bank (the “Bank”). The agreement has been amended most recently on March 7, 2013. The line of credit is collateralized by the Company’s pharmaceutical , Private Payor and Medicare receivables. The amended maximum amount that can be borrowed from the credit line is $2,000,000. As of December 31, 2013, the amount the Company can draw from the loan was $1,000,000 calculated as the lesser of (i) the Company’s calculated borrowing base, which was 80% of certain of the Company’s accounts receivable, or (ii) the amount available under the credit line. As of December 31, 2013, the interest fees associated with this line of credit were set at the prime rate plus 1%. During 2012 and 2013, the rate charged to the Company was 5%. As needed from time to time, the Company may draw on this line for use for general corporate purposes. As of December 31, 2012 and December 31, 2013, the Company has drawn $1,000,000 against the line of credit. The line of credit is subject to various financial covenants. As of December 31, 2013, the Company was not in compliance with one of these covenants, and the Bank waived the covenant violation. Prior to the most recent amendment on March 7, 2013, the Company was also not in compliance with certain other covenants. The September 28, 2012 amendment provided forbearance for the failure to comply with these certain covenants through November 30, 2012, and modified the covenants to include a requirement that the Company maintain account balances at the Bank totaling a minimum of $4,000,000 during the covered forbearance period. The December 6, 2012 amendment to the agreement extended the forbearance for the failure to comply with these certain covenants and the requirement for the Company to maintain account balances at the Bank totaling a minimum of $4,000,000 through December 31, 2012. In addition, pursuant to the March 7, 2013 amendment, the Bank waived the Company's existing breach of financial covenants under the credit agreement and the parties restructured the line of credit to provide that, among other things: (i) the revolving line of credit's maturity date was extended to March 7, 2015, (ii) the fee for the unused portion of the revolving line of credit was reduced from 0.375% to 0.250% per annum of the average unused portion of the revolving line of credit, (iii) the Company must continue to meet certain reporting requirements including providing financial statements and a certificate of compliance with the terms and conditions of the credit agreement by an authorized officer to the Bank within 45 days of the last day of each calendar quarter, provided that if the Company has less than $4,000,000 in its account at the Bank at any time during such calendar quarter, the Company must provide the financial statements and the certificate of compliance within 30 days of the end of such calendar quarter and provide a monthly report on revenues realized from private payors, (iv) the financial covenants were amended and restated to require the Company to maintain a ratio of quick assets to current liabilities of 1:50 to 1:00 and meet certain specified minimum adjusted earnings before interest, taxes, depreciation and amortization (“EBITDA”) requirements as defined in the amendment and measured on a monthly basis and (v) the Bank is granted certain additional inspection of books, records and collateral rights. | ||||||||||||||
As of December 31, 2012, the line of credit under the credit agreement was classified as a current liability of the Company on the accompanying balance sheet as the line of credit had a maturity date less than one year from December 31, 2012. As of December 31, 2013, the line of credit under the credit agreement was classified as a non-current liability of the Company on the accompanying balance sheet as the line of credit had a maturity date of greater than one year from December 31, 2013. | ||||||||||||||
From time to time, the Company’s calculated borrowing base under its Bank line of credit may decrease to a level where the Company is in an over-advance position in which case the Company will be required to repay any outstanding amounts greater than the calculated borrowing base for such covered period back to the Bank immediately. The Company will be able to draw down on the credit line again with respect to such paid back amount once the Company is in compliance with the borrowing base requirement. This occurred on one occasion during the second quarter of 2012 based on the May 2012 borrowing base, as a result of which the Company was required to repay $298,000 to the Bank. The Company drew down the same amount one week later once the June 2012 borrowing base was determined to be sufficiently higher than the May 2012 borrowing base, thereby giving the Company the capacity to borrow such additional amount. | ||||||||||||||
Income Taxes | ' | |||||||||||||
Income Taxes | ||||||||||||||
Deferred tax assets and liabilities are determined based on differences between the financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. | ||||||||||||||
ASC 740, Income Taxes, clarifies the accounting for uncertainty in income taxes recognized in financial statements and requires the impact of a tax position to be recognized in the financial statements if that position is more likely than not of being sustained by the taxing authority. As of December 31, 2012 and 2013, the Company does not have a liability for unrecognized tax benefits. The Company recognizes interest and penalties associated with tax matters as part of the income tax provision, and the Company includes accrued interest and penalties with the related tax liability in the balance sheet. For the years ended December 31, 2012 and 2013, there were no interest or penalties recorded on the consolidated statement of operations. | ||||||||||||||
Stock-Based Compensation | ' | |||||||||||||
Stock-Based Compensation | ||||||||||||||
The Company accounts for stock-based compensation in accordance with ASC 718, Stock Compensation, Share-Based Payment. Stock-based compensation expense for all stock-based compensation awards granted is based on the grant-date fair value estimated in accordance with the provisions of ASC 718. The Company recognizes these compensation costs on a straight-line basis over the requisite service period of the award, which is generally the option vesting period. As further described in Note 7, certain awards granted to Thomas A. Bologna, the Company’s Chairman and Chief Executive Officer, were recognized based on an accelerated vesting basis triggered by market conditions rather than a straight-line basis. | ||||||||||||||
The Company accounts for equity instruments issued to non-employees in accordance with ASC 505, Equity. Under ASC 505, stock option awards issued to non-employees are measured at fair value using the Black-Scholes option-pricing model and recognized pursuant to a performance model. | ||||||||||||||
Management Estimates | ' | |||||||||||||
Management Estimates | ||||||||||||||
The preparation of financial statements in conformity with U.S. GAAP 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 revenues and expenses during the reporting period. Significant estimates in these consolidated financial statements have been made for revenue, allowances for doubtful accounts, impairment of long-lived assets, depreciation of property and equipment and stock-based compensation. Actual results could differ materially from those estimates. | ||||||||||||||
Long-lived Assets | ' | |||||||||||||
Long-lived Assets | ||||||||||||||
Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company evaluates potential impairment by comparing the carrying amount of the asset with the estimated undiscounted future cash flows associated with the use of the asset and its eventual disposition. Should the review indicate that the assets cost is not recoverable, the carrying value of the asset would be reduced to its fair value, which is measured by future discounted cash flows. | ||||||||||||||
Foreign Currency Translation | ' | |||||||||||||
Foreign Currency Translation | ||||||||||||||
The financial position and results of operations of the Company’s foreign subsidiary are determined using local currency as the functional currency. Assets and liabilities of these operations are translated at the exchange rate in effect at each period-end. Statement of Operations amounts are translated at the average rate of exchange prevailing during the period. Translation adjustments arising from the use of differing exchange rates from period to period are included in accumulated other comprehensive loss in stockholders’ equity (deficit). | ||||||||||||||
Comprehensive Loss | ' | |||||||||||||
Comprehensive Loss | ||||||||||||||
The components of comprehensive loss are net loss and foreign currency translation adjustments for the years ended December 31, 2012 and 2013. | ||||||||||||||
Fair Value of Financial Instruments | ' | |||||||||||||
Fair Value of Financial Instruments | ||||||||||||||
Cash and cash equivalents are stated at cost, which approximates fair market value. Cash equivalents consist of money market accounts, with fair values estimated based on quoted market prices. Debt balances are stated at historical amounts less principal payments, which approximate fair market value. The Company believes interest rates in its debt agreements are commensurate with lender risk profiles for similar companies. | ||||||||||||||
Advertising Costs | ' | |||||||||||||
Advertising costs | ||||||||||||||
The Company markets its services through its advertising activities in trade publications and on the internet. Advertising costs are included in selling and marketing expenses on the statements of operations and are expensed as incurred. Advertising costs for the years ended December 31, 2012 and 2013 were $13,788 and $16,677, respectively. | ||||||||||||||
Reclassification | ' | |||||||||||||
Reclassifications | ||||||||||||||
Prior year amounts in the consolidated financial statements have been reclassified to conform with the current year presentation. Reclassified amounts had no impact on the Company’s net losses for the year ended December 31, 2012 or 2013. | ||||||||||||||
Concentration of Credit Risk and Clients and Limited Suppliers | ' | |||||||||||||
Concentration of Credit Risk Clients and Limited Suppliers | ||||||||||||||
Cash and cash equivalents are maintained at financial institutions and, at times, balances may exceed federally insured limits. The Company has never experienced any losses related to these balances. At December 31, 2013, the Company had $7,867,276 in cash and cash equivalents that exceeded federally insured limits. At December 31, 2013, $6,969 of cash was held outside of the United States. | ||||||||||||||
Revenue sources that accounted for greater than 10 percent of revenue are provided below. | ||||||||||||||
Year Ended December 31, | ||||||||||||||
2012 | 2013 | |||||||||||||
Revenue | Percent of Total Revenue | Revenue | Percent of Total Revenue | |||||||||||
GlaxoSmithKline entities: | ||||||||||||||
GlaxoSmithKline LLC | $ | 1,280,704 | 6.8 | % | $ | 1,134,366 | 5.8 | % | ||||||
GlaxoSmithKline Biologicals S.A. | $ | 3,241,211 | 17.3 | % | $ | 3,534,619 | 17.9 | % | ||||||
Total GlaxoSmithKline entities | $ | 4,521,915 | 24.1 | % | $ | 4,668,985 | 23.7 | % | ||||||
Medicare, net of contractual allowances | $ | 5,405,393 | 28.8 | % | $ | 4,521,732 | 22.8 | % | ||||||
Clients that accounted for greater than 10 percent of accounts receivable are provided below. | ||||||||||||||
As of December 31, | ||||||||||||||
2012 | 2013 | |||||||||||||
Receivable | Percent of Total Receivables | Receivable | Percent of Total Receivables | |||||||||||
Balance | Balance | |||||||||||||
GlaxoSmithKline entities: | ||||||||||||||
GlaxoSmithKline LLC | $ | 200,169 | 3.1 | % | $ | 597,937 | 6.9 | % | ||||||
GlaxoSmithKline Biologicals S.A. | $ | 1,490,975 | 23.4 | % | $ | 544,298 | 6.3 | % | ||||||
Total GlaxoSmithKline entities | $ | 1,691,144 | 26.5 | % | $ | 1,142,235 | 13.2 | % | ||||||
Medicare, net of contractual allowances | $ | 890,936 | 14 | % | $ | 2,422,611 | 28.1 | % | ||||||
Many of the supplies and reagents used in the Company’s testing process are procured from a limited number of suppliers. Any supply interruption or an increase in demand beyond the suppliers’ capabilities could have an adverse impact on the Company’s business. Management believes it can identify alternative sources, if necessary, but it is possible such sources may not be identified in sufficient time to avoid an adverse impact on its business. Refer also to Note 6 for further discussion regarding these supply agreements. The Company purchases certain laboratory supplies and reagents primarily from a limited number of suppliers. The Company made approximately 71% of its reagent purchases from two suppliers during the year ended December 31, 2012 and made approximately 87% of its reagent purchases from four suppliers during the year ended December 31, 2013. | ||||||||||||||
Recent Accounting Pronouncements | ' | |||||||||||||
Recent Accounting Pronouncements | ||||||||||||||
We have reviewed all recently issued standards and have determined they will not have a material impact on our consolidated financial statements or do not apply to our operations. | ||||||||||||||
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2013 | ||||||||||||||
Accounting Policies [Abstract] | ' | |||||||||||||
Schedule of ResponseDX Accounts Receivable | ' | |||||||||||||
ResponseDX® accounts receivable consisted of the following: | ||||||||||||||
December 31, | December 31, | |||||||||||||
2012 | 2013 | |||||||||||||
Net Medicare receivable | $ | 890,936 | $ | 2,422,611 | ||||||||||
Net Private Payor receivable | 2,924,412 | 4,315,587 | ||||||||||||
3,815,348 | 6,738,198 | |||||||||||||
Allowance for doubtful accounts | -991,990 | -2,404,659 | ||||||||||||
$ | 2,823,358 | $ | 4,333,539 | |||||||||||
Schedule of Estimated Useful Lives of Property and Equipment | ' | |||||||||||||
The Company has determined the estimated useful lives of its property and equipment, as follows: | ||||||||||||||
Laboratory equipment | 5 to 7 years | |||||||||||||
Furniture and equipment | 5 to 7 years | |||||||||||||
Purchased and internally-developed software | 3 to 5 years | |||||||||||||
Leasehold improvements | Shorter of the useful life (5 to 7 years) or the lease term | |||||||||||||
Schedule of ResponseDX Revenue | ' | |||||||||||||
The following details ResponseDX® revenue for the years ended December 31, 2012 and 2013: | ||||||||||||||
Year Ended December 31, | ||||||||||||||
2012 | 2013 | |||||||||||||
Net Medicare revenue | $ | 5,405,393 | $ | 4,521,732 | ||||||||||
Net Private Payor revenue | 6,472,386 | 7,489,642 | ||||||||||||
Other | 6,354 | — | ||||||||||||
Net ResponseDX® revenue | $ | 11,884,133 | $ | 12,011,374 | ||||||||||
Schedule of Revenue Sources that Account for Greater than 10 Percent of Total Revenue | ' | |||||||||||||
Revenue sources that accounted for greater than 10 percent of revenue are provided below. | ||||||||||||||
Year Ended December 31, | ||||||||||||||
2012 | 2013 | |||||||||||||
Revenue | Percent of Total Revenue | Revenue | Percent of Total Revenue | |||||||||||
GlaxoSmithKline entities: | ||||||||||||||
GlaxoSmithKline LLC | $ | 1,280,704 | 6.8 | % | $ | 1,134,366 | 5.8 | % | ||||||
GlaxoSmithKline Biologicals S.A. | $ | 3,241,211 | 17.3 | % | $ | 3,534,619 | 17.9 | % | ||||||
Total GlaxoSmithKline entities | $ | 4,521,915 | 24.1 | % | $ | 4,668,985 | 23.7 | % | ||||||
Medicare, net of contractual allowances | $ | 5,405,393 | 28.8 | % | $ | 4,521,732 | 22.8 | % | ||||||
Schedule of Customers that Account for Greater than 10 Percent of Accounts Receivable | ' | |||||||||||||
Clients that accounted for greater than 10 percent of accounts receivable are provided below. | ||||||||||||||
As of December 31, | ||||||||||||||
2012 | 2013 | |||||||||||||
Receivable | Percent of Total Receivables | Receivable | Percent of Total Receivables | |||||||||||
Balance | Balance | |||||||||||||
GlaxoSmithKline entities: | ||||||||||||||
GlaxoSmithKline LLC | $ | 200,169 | 3.1 | % | $ | 597,937 | 6.9 | % | ||||||
GlaxoSmithKline Biologicals S.A. | $ | 1,490,975 | 23.4 | % | $ | 544,298 | 6.3 | % | ||||||
Total GlaxoSmithKline entities | $ | 1,691,144 | 26.5 | % | $ | 1,142,235 | 13.2 | % | ||||||
Medicare, net of contractual allowances | $ | 890,936 | 14 | % | $ | 2,422,611 | 28.1 | % | ||||||
Property_and_Equipment_and_Int1
Property and Equipment and Intangible Assets (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Property, Plant and Equipment [Abstract] | ' | |||||||
Schedule of Property and Equipment | ' | |||||||
Property and equipment consists of the following: | ||||||||
December 31, | December 31, | |||||||
2012 | 2013 | |||||||
Laboratory equipment | $ | 3,315,812 | $ | 4,468,055 | ||||
Furniture and equipment | 660,626 | 736,886 | ||||||
Leasehold improvements | 305,059 | 487,843 | ||||||
4,281,497 | 5,692,784 | |||||||
Less: Accumulated depreciation | -3,258,299 | -3,758,202 | ||||||
Total property and equipment, net | $ | 1,023,198 | $ | 1,934,582 | ||||
Purchased software | $ | 562,699 | $ | 749,587 | ||||
Internally developed software | 108,362 | 213,361 | ||||||
Trademarks | — | 33,000 | ||||||
671,061 | 995,948 | |||||||
Less: Accumulated amortization | -95,652 | -228,725 | ||||||
Total intangible assets, net | $ | 575,409 | $ | 767,223 | ||||
Schedule of Capital Leased Assets | ' | |||||||
This equipment and software is included in property and equipment on the accompanying balance sheet as of December 31, 2013 as follows: | ||||||||
Equipment and software financed under capital leases | $ | 584,150 | ||||||
Less: Accumulated amortization | -320,769 | |||||||
Equipment and software financed under capital leases, net | $ | 263,381 | ||||||
Schedule of Future Minimum Lease Payments Under Capital Leases | ' | |||||||
Future minimum lease payments under capital leases as of December 31, 2013 are as follows: | ||||||||
Years ending December 31, | ||||||||
2014 | $ | 188,427 | ||||||
2015 | 101,309 | |||||||
2016 | 46,852 | |||||||
Total minimum lease payments | 336,588 | |||||||
Less amount represented by interest | -42,931 | |||||||
Less current portion | -157,238 | |||||||
Capital lease obligation, net of current portion | $ | 136,419 | ||||||
Loss_Per_Share_Tables
Loss Per Share (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Earnings Per Share [Abstract] | ' | |||||||
Computation for Basic and Diluted Loss Per Share | ' | |||||||
The following table sets forth the computation for basic and diluted loss per share: | ||||||||
Year Ended December 31, | ||||||||
2012 | 2013 | |||||||
Numerator: | ||||||||
Net loss | $ | -7,757,079 | $ | -8,020,515 | ||||
Numerator for basic and diluted earnings per share | $ | -7,757,079 | $ | -8,020,515 | ||||
Denominator: | ||||||||
Denominator for basic and diluted earnings per share — weighted-average shares outstanding | 26,742,345 | 33,481,439 | ||||||
Basic and diluted loss per share | $ | -0.29 | $ | -0.24 | ||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Commitments and Contingencies Disclosure [Abstract] | ' | ||||
Schedule of Future Minimum Lease Payments under Noncancelable Operating Leases | ' | ||||
Future minimum lease payments by year and in the aggregate due under noncancelable operating leases for facilities, equipment and software as a service, consist of the following at December 31, 2013: | |||||
Years Ending December 31, | |||||
2014 | $ | 1,228,880 | |||
2015 | 564,518 | ||||
2016 | 35,807 | ||||
Total | $ | 1,829,205 | |||
Stock_Option_Plans_Tables
Stock Option Plans (Tables) | 12 Months Ended | |||||||||||||||
Dec. 31, 2013 | ||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | |||||||||||||||
Schedule of Assumptions Used to Estimate Share-Based Compensation Expense Using Black-Scholes Model | ' | |||||||||||||||
Except for the certain grants of restricted common stock and common stock options containing market conditions as described below, the Company estimated share-based compensation expense for the years ended December 31, 2012 and 2013 using the Black-Scholes model with the following weighted average assumptions: | ||||||||||||||||
Year Ended December 31, | ||||||||||||||||
2012 | 2013 | |||||||||||||||
Risk free interest rate | 0.79-1.32 | % | 0.90-1.77 | % | ||||||||||||
Expected dividend yield | — | — | ||||||||||||||
Expected volatility | 71.9-101.2 | % | 102.2-107.4 | % | ||||||||||||
Expected term **(in years) | 6.0-6.25 | 5.0-6.0 | ||||||||||||||
Forfeiture rate | 7 | % | 7 | % | ||||||||||||
** Expected term is calculated using SAB 107, Simplified Formula. Management has concluded that the use of the simplified method for calculating the expected term of its common stock option grants is appropriate given the lack of historical exercises and the standard terms of the employee option grants, including options are granted at-the-money, exercise is conditional only on performing service through the vesting dates, termination of service causes forfeiture of options, employees have a limited number of days to exercise options after termination of service, and options are non-transferable. | ||||||||||||||||
Summary of Stock Option Activity | ' | |||||||||||||||
The following table summarizes the stock option activity for the 2000 Stock Plan and the 2006 Stock Plan for the year ended December 31, 2013: | ||||||||||||||||
Weighted | ||||||||||||||||
Average | Remaining | Aggregate | ||||||||||||||
Number of | Exercise | Contractual | Intrinsic | |||||||||||||
Shares | Price | Life (Years) | Value | |||||||||||||
Outstanding, December 31, 2011 | 1,870,846 | $ | 3.67 | 7.4 | $ | 66,976 | ||||||||||
Granted | 1,039,200 | 1.35 | ||||||||||||||
Exercised | — | — | ||||||||||||||
Expired | -824,023 | 4.77 | ||||||||||||||
Forfeited | -336,713 | 1.84 | ||||||||||||||
Outstanding, December 31, 2012 | 1,749,310 | $ | 2.12 | 8.32 | $ | 151,919 | ||||||||||
Granted | 1,115,750 | 1.33 | ||||||||||||||
Exercised | -18,023 | 1.33 | ||||||||||||||
Expired | -253,060 | 2.3 | ||||||||||||||
Forfeited | -305,901 | 1.39 | ||||||||||||||
Outstanding, December 31, 2013 | 2,288,076 | $ | 1.83 | 8.41 | $ | 1,082 | ||||||||||
Exercisable, December 31, 2013 | 925,759 | $ | 2.55 | 6.86 | $ | 316 | ||||||||||
Schedule of Options Outstanding | ' | |||||||||||||||
The following table provides additional information in regards to options outstanding as of December 31, 2013: | ||||||||||||||||
Options Outstanding | Options Exercisable | |||||||||||||||
Weighted Average | Weighted Average | |||||||||||||||
Remaining | Remaining | |||||||||||||||
Number of | Contractual | Number of | Contractual | |||||||||||||
Exercise Price | Options | Term | Options | Term | ||||||||||||
$ | 1.00 to 1.99 | 1,783,076 | 9.1 | 488,913 | 8 | |||||||||||
2.00 to 2.99 | 287,500 | 7.6 | 219,346 | 7.4 | ||||||||||||
3.00 to 3.99 | 71,000 | 4.6 | 71,000 | 4.6 | ||||||||||||
4.29 | 11,500 | 3.6 | 11,500 | 3.6 | ||||||||||||
7 | 135,000 | 3.4 | 135,000 | 3.4 | ||||||||||||
2,288,076 | 8.4 | 925,759 | 6.9 | |||||||||||||
Schedule of Stock Based Compensation Included in Results of Operations | ' | |||||||||||||||
Stock-based compensation expense was classified in the results of operation as follows: | ||||||||||||||||
Year Ended December 31, | ||||||||||||||||
2012 | 2013 | |||||||||||||||
Cost of revenue | $ | 57,999 | $ | 30,527 | ||||||||||||
Selling and marketing expense | 54,527 | 29,791 | ||||||||||||||
General and administrative expense | 672,869 | 372,158 | ||||||||||||||
Research and development expense | 32,642 | 41,625 | ||||||||||||||
Totals | $ | 818,037 | $ | 474,101 | ||||||||||||
Schedule of Awards to Mr. Bologna | ' | |||||||||||||||
The following table summarizes these awards to Mr. Bologna: | ||||||||||||||||
Intrinsic | ||||||||||||||||
Value as of | Remaining | |||||||||||||||
December 31, | Options | Contractual | ||||||||||||||
Type | Grant Date | Number of Awards | 2013 | Exercise Price | Exercisable | Term | ||||||||||
Restricted Shares of Common Stock | 12/21/11 | 270,000 | $ | 313,200 | $ | — | — | 8 | ||||||||
Options | 12/21/11 | 600,000 | $ | — | $ | 1.2 | 400,000 | 8 | ||||||||
Options | 12/21/11 | 300,000 | $ | — | $ | 1.2 | 300,000 | 8 | ||||||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Income Tax Disclosure [Abstract] | ' | |||||||
Schedule of Income Tax Provision | ' | |||||||
The components of the income tax provision were as follows: | ||||||||
Year Ended December 31, | ||||||||
2012 | 2013 | |||||||
Current | ||||||||
Federal | $ | — | $ | — | ||||
Foreign | — | — | ||||||
State | — | — | ||||||
Total | — | — | ||||||
Deferred | ||||||||
Federal | — | — | ||||||
Foreign | — | — | ||||||
State | — | — | ||||||
— | — | |||||||
Income tax provision | $ | — | $ | — | ||||
Schedule of Loss Before Income Tax Provision | ' | |||||||
For financial statement purposes, loss before income tax provision includes the following components: | ||||||||
Year Ended December 31, | ||||||||
2012 | 2013 | |||||||
Domestic | $ | -7,750,861 | $ | -8,012,906 | ||||
Foreign | -6,218 | -7,609 | ||||||
$ | -7,757,079 | $ | -8,020,515 | |||||
Reconciliation of Expected Income Tax Benefit Computed Using Federal Statutory Income Tax Rate | ' | |||||||
A reconciliation of the expected income tax benefit computed using the federal statutory income tax rate of 34% to the Company’s effective income tax rate is as follows: | ||||||||
Year Ended December 31, | ||||||||
2012 | 2013 | |||||||
Income tax benefit based on federal statutory rate | $ | -2,637,000 | $ | -2,729,000 | ||||
State income tax benefit, net of federal income tax | -216,000 | -413,000 | ||||||
Change in deferred tax valuation allowance | 849,000 | 3,048,000 | ||||||
Stock-based compensation | 988,000 | 75,000 | ||||||
Foreign net operating loss | 785,000 | — | ||||||
Other, net | 231,000 | 19,000 | ||||||
Income tax provision | $ | — | $ | — | ||||
Schedule of Deferred Tax Assets and Deferred Tax Liabilities | ' | |||||||
The tax effects of temporary differences that give rise to significant portions of the Company’s deferred tax assets and deferred tax liabilities are presented below: | ||||||||
December 31, | December 31, | |||||||
2012 | 2013 | |||||||
Deferred tax assets: | ||||||||
Domestic net operating loss carryforwards | $ | 13,669,000 | $ | 15,627,000 | ||||
Foreign net operating loss carryforwards | 798,000 | 800,000 | ||||||
Deferred revenue | 191,000 | — | ||||||
Federal and state tax credit | 297,000 | 297,000 | ||||||
Stock-based compensation | 586,000 | 682,000 | ||||||
Capitalized costs | 1,233,000 | 1,232,000 | ||||||
Other, net | 944,000 | 2,129,000 | ||||||
Total gross deferred tax assets | 17,718,000 | 20,767,000 | ||||||
Less valuation allowance on deferred tax assets | -17,718,000 | -20,767,000 | ||||||
Net deferred taxes | — | — | ||||||
Deferred tax liabilities: | ||||||||
Plant and equipment, principally accelerated depreciation | — | — | ||||||
Total deferred tax liabilities | — | — | ||||||
Net deferred taxes | $ | — | $ | — | ||||
Segment_Information_Tables
Segment Information (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Segment Reporting [Abstract] | ' | |||||||
Schedule of Financial Information by Geographic Area | ' | |||||||
The following tables contain certain financial information by geographic area: | ||||||||
Year Ended December 31, | ||||||||
2012 | 2013 | |||||||
Revenue: | ||||||||
United States | $ | 14,238,993 | $ | 15,219,155 | ||||
Europe | 3,304,251 | 3,556,354 | ||||||
Japan | 1,193,425 | 1,028,850 | ||||||
$ | 18,736,669 | $ | 19,801,359 | |||||
December 31, | December 31, | |||||||
2012 | 2013 | |||||||
Long-lived assets: | ||||||||
United States | $ | 1,598,607 | $ | 2,681,666 | ||||
$ | 1,598,607 | $ | 2,681,666 | |||||
Offerings_of_Common_Stock_Tabl
Offerings of Common Stock (Tables) | 12 Months Ended | ||||||
Dec. 31, 2013 | |||||||
Stockholders Equity Note [Abstract] | ' | ||||||
Schedule of Common Stock Classified Outside of Stockholders' Equity | ' | ||||||
Activity in common stock classified outside of stockholders’ equity (deficit) was as follows: | |||||||
Number of | Amount | ||||||
Shares | |||||||
Balance, December 31, 2011 | 6,063,256 | $ | 7,854,682 | ||||
Issuance of common stock classified outside of stockholders’ equity (deficit) , excluding offering costs of $180,790 offset against paid-in capital | 13,257,267 | 16,633,328 | |||||
Reclassification to stockholders’ equity (deficit) | -9,758,676 | -12,712,286 | |||||
Balance, December 31, 2012 | 9,561,847 | $ | 11,775,724 | ||||
Issuance of common stock classified outside of stockholders’ equity (deficit) | — | — | |||||
Reclassification to stockholders’ equity (deficit) | -4,561,847 | -6,275,724 | |||||
Balance, December 31, 2013 | 5,000,000 | $ | 5,500,000 | ||||
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 12 Months Ended | |||||||||
Dec. 31, 2013 | ||||||||||
Fair Value Disclosures [Abstract] | ' | |||||||||
Schedule of Fair Value of Assets and Liabilities Measured on Recurring Basis | ' | |||||||||
The fair value of these assets was determined using the following inputs in accordance with ASC 820 at December 31, 2012 and 2013: | ||||||||||
Fair Value Measurement as of December 31, 2012 | ||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||
Description | $ | $ | $ | $ | ||||||
Money market accounts (1) | 10,000 | 10,000 | — | — | ||||||
Fair Value Measurement as of December 31, 2013 | ||||||||||
Total | Level 1 | Level 2 | Level 3 | |||||||
Description | $ | $ | $ | $ | ||||||
Money market accounts (1) | — | — | — | — | ||||||
-1 | Included in cash and cash equivalents on the accompanying consolidated balance sheet. | |||||||||
Organization_Operations_and_Ba1
Organization, Operations and Basis of Accounting (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Organization, Consolidation And Presentation Of Financial Statements [Line Items] | ' | ' |
Accumulated deficit | ($65,297,179) | ($57,276,664) |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details) (USD $) | 2 Months Ended | 12 Months Ended | ||
Mar. 07, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Aug. 31, 2013 | |
Significant Accounting Policies [Line Items] | ' | ' | ' | ' |
Receivable Balance,net allowances for doubtful debts | ' | $6,225,923 | $5,373,023 | ' |
Allowance for doubtful accounts | ' | 2,404,659 | 991,990 | 257,000 |
Additional allowance for accounts receivable | ' | 690,000 | ' | ' |
Revenue from pharmaceutical clients | ' | 7,789,985 | 6,852,536 | ' |
Bad debt expense | ' | 3,165,918 | 1,351,592 | ' |
Line of credit, expiration date | 7-Mar-15 | ' | ' | ' |
Line of credit, fee for unused portion | 0.25% | 0.38% | ' | ' |
Line of credit, maximum borrowing capacity | ' | 2,000,000 | ' | ' |
Line of credit facility, current borrowing capacity | ' | 1,000,000 | ' | ' |
Line of credit, borrowing base percentage of pharmaceutical accounts receivable | ' | ' | 80.00% | ' |
Line of credit, interest above prime rate | ' | ' | 1.00% | ' |
Line of credit, interest charged | ' | ' | 5.00% | ' |
Line of credit, amount drawn | ' | 1,000,000 | 1,000,000 | ' |
Required minimum bank balance | 4,000,000 | ' | 4,000,000 | ' |
Advertising costs | ' | 16,677 | 13,788 | ' |
Uninsured foreign cash balance | ' | 6,969 | ' | ' |
Line of Credit Facility,Agreement Date | ' | 14-Jul-11 | ' | ' |
Bank line of credit, over-advance amount required to be repaid | ' | ' | 298,000 | ' |
Cash and cash equivalents that exceeded federally insured limits | ' | 7,867,276 | ' | ' |
Cost of Goods, Total [Member] | Supplier Concentration Risk [Member] | ' | ' | ' | ' |
Significant Accounting Policies [Line Items] | ' | ' | ' | ' |
Concentration risk percentage | ' | 87.00% | 71.00% | ' |
Clinical [Member] | ' | ' | ' | ' |
Significant Accounting Policies [Line Items] | ' | ' | ' | ' |
Receivable Balance,net allowances for doubtful debts | ' | 1,892,384 | 2,549,665 | ' |
Payment period from the date of invoice | ' | '45 days | ' | ' |
ResponseDX [Member] | ' | ' | ' | ' |
Significant Accounting Policies [Line Items] | ' | ' | ' | ' |
Allowance for doubtful accounts | ' | 2,404,659 | 991,990 | ' |
Bad debt expense | ' | $3,165,918 | $1,351,592 | ' |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies (Schedule of ResponseDX Accounts Receivable) (Details) (USD $) | Dec. 31, 2013 | Aug. 31, 2013 | Dec. 31, 2012 |
Health Care Organization, Receivable and Revenue Disclosures [Line Items] | ' | ' | ' |
Allowance for doubtful accounts | ($2,404,659) | ($257,000) | ($991,990) |
Total | 6,225,923 | ' | 5,373,023 |
ResponseDX [Member] | ' | ' | ' |
Health Care Organization, Receivable and Revenue Disclosures [Line Items] | ' | ' | ' |
Accounts receivable | 6,738,198 | ' | 3,815,348 |
Allowance for doubtful accounts | -2,404,659 | ' | -991,990 |
Total | 4,333,539 | ' | 2,823,358 |
ResponseDX [Member] | Medicare [Member] | ' | ' | ' |
Health Care Organization, Receivable and Revenue Disclosures [Line Items] | ' | ' | ' |
Accounts receivable | 2,422,611 | ' | 890,936 |
Private Payor [Member] | ResponseDX [Member] | ' | ' | ' |
Health Care Organization, Receivable and Revenue Disclosures [Line Items] | ' | ' | ' |
Accounts receivable | $4,315,587 | ' | $2,924,412 |
Summary_of_Significant_Account5
Summary of Significant Accounting Policies (Schedule of Estimated Useful Lives) (Details) | 12 Months Ended |
Dec. 31, 2013 | |
Minimum [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Property, Plant and Equipment, Useful Life | '4 years |
Minimum [Member] | Prchased And Internally Developed Software Intangible Asset [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Finite-Lived Intangible Asset, Useful Life | '3 years |
Maximum [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Property, Plant and Equipment, Useful Life | '5 years |
Maximum [Member] | Prchased And Internally Developed Software Intangible Asset [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Finite-Lived Intangible Asset, Useful Life | '5 years |
Laboratory Equipment [Member] | Minimum [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Property, Plant and Equipment, Useful Life | '5 years |
Laboratory Equipment [Member] | Maximum [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Property, Plant and Equipment, Useful Life | '7 years |
Furniture and Equipment [Member] | Minimum [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Property, Plant and Equipment, Useful Life | '5 years |
Furniture and Equipment [Member] | Maximum [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Property, Plant and Equipment, Useful Life | '7 years |
Leasehold Improvements [Member] | Minimum [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Property, Plant and Equipment, Useful Life | '5 years |
Leasehold Improvements [Member] | Maximum [Member] | ' |
Property, Plant and Equipment [Line Items] | ' |
Property, Plant and Equipment, Useful Life | '7 years |
Summary_of_Significant_Account6
Summary of Significant Accounting Policies (Schedule of ResponseDX Revenue) (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Health Care Organization, Receivable and Revenue Disclosures [Line Items] | ' | ' |
Net ResponseDX B. revenue | $19,801,359 | $18,736,669 |
ResponseDX [Member] | ' | ' |
Health Care Organization, Receivable and Revenue Disclosures [Line Items] | ' | ' |
Net ResponseDX B. revenue | 12,011,374 | 11,884,133 |
ResponseDX [Member] | Private Payor [Member] | ' | ' |
Health Care Organization, Receivable and Revenue Disclosures [Line Items] | ' | ' |
Net ResponseDX B. revenue | 7,489,642 | 6,472,386 |
ResponseDX [Member] | Other Payor [Member] | ' | ' |
Health Care Organization, Receivable and Revenue Disclosures [Line Items] | ' | ' |
Net ResponseDX B. revenue | 0 | 6,354 |
Medicare [Member] | ResponseDX [Member] | ' | ' |
Health Care Organization, Receivable and Revenue Disclosures [Line Items] | ' | ' |
Net ResponseDX B. revenue | $4,521,732 | $5,405,393 |
Summary_of_Significant_Account7
Summary of Significant Accounting Policies (Schedule of Revenue Sources that Account for Greater than 10 Percent of Total Revenue) (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Health Care Organization, Receivable and Revenue Disclosures [Line Items] | ' | ' |
Revenue | $19,801,359 | $18,736,669 |
GlaxoSmithKline LLC[Member] | ' | ' |
Health Care Organization, Receivable and Revenue Disclosures [Line Items] | ' | ' |
Revenue | 1,134,366 | 1,280,704 |
Percent of Total Revenue | 5.80% | 6.80% |
GlaxoSmithKline Biologicals S.A. [Member] | ' | ' |
Health Care Organization, Receivable and Revenue Disclosures [Line Items] | ' | ' |
Revenue | 3,534,619 | 3,241,211 |
Percent of Total Revenue | 17.90% | 17.30% |
GlaxoSmithKline Entities [Member] | ' | ' |
Health Care Organization, Receivable and Revenue Disclosures [Line Items] | ' | ' |
Revenue | 4,668,985 | 4,521,915 |
Percent of Total Revenue | 23.70% | 24.10% |
Medicare [Member] | ' | ' |
Health Care Organization, Receivable and Revenue Disclosures [Line Items] | ' | ' |
Revenue | $4,521,732 | $5,405,393 |
Percent of Total Revenue | 22.80% | 28.80% |
Summary_of_Significant_Account8
Summary of Significant Accounting Policies (Schedule of Customers that Account for Greater than 10 Percent of Accounts Receivable) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Health Care Organization, Receivable and Revenue Disclosures [Line Items] | ' | ' |
Receivable Balance | $6,225,923 | $5,373,023 |
GlaxoSmithKline, LLC [Member] | ' | ' |
Health Care Organization, Receivable and Revenue Disclosures [Line Items] | ' | ' |
Receivable Balance | 597,937 | 200,169 |
Percent of Total Receivables | 6.90% | 3.10% |
GlaxoSmithKline Biologicals S.A. [Member] | ' | ' |
Health Care Organization, Receivable and Revenue Disclosures [Line Items] | ' | ' |
Receivable Balance | 544,298 | 1,490,975 |
Percent of Total Receivables | 6.30% | 23.40% |
GlaxoSmithKline Entities [Member] | ' | ' |
Health Care Organization, Receivable and Revenue Disclosures [Line Items] | ' | ' |
Receivable Balance | 1,142,235 | 1,691,144 |
Percent of Total Receivables | 13.20% | 26.50% |
Medicare [Member] | ' | ' |
Health Care Organization, Receivable and Revenue Disclosures [Line Items] | ' | ' |
Receivable Balance | $2,422,611 | $890,936 |
Percent of Total Receivables | 28.10% | 14.00% |
Property_and_Equipment_and_Int2
Property and Equipment and Intangible Assets (Details) (USD $) | 12 Months Ended | 1 Months Ended | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Aug. 23, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | |
Pathwork [Member] | Maximum [Member] | Minimum [Member] | |||
Property, Plant and Equipment [Line Items] | ' | ' | ' | ' | ' |
Amortization Expenses | $632,976 | $470,054 | ' | ' | ' |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Receivables | 257,000 | ' | ' | ' | ' |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Equipment | 785,000 | ' | ' | ' | ' |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | 138,000 | ' | ' | ' | ' |
Property, Plant and Equipment, Useful Life | ' | ' | ' | '5 years | '4 years |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ' | ' | ' | ' | ' |
2014 | 176,518 | ' | ' | ' | ' |
2015 | 179,302 | ' | ' | ' | ' |
2016 | 165,033 | ' | ' | ' | ' |
2017 | 145,173 | ' | ' | ' | ' |
2018 | 64,698 | ' | ' | ' | ' |
Thereafter | 3,499 | ' | ' | ' | ' |
Stock Issued During Period, Shares, Purchase of Assets | ' | ' | 500,000 | ' | ' |
Payments to Acquire Property, Plant, and Equipment, Total | 200,000 | 0 | 200,000 | ' | ' |
Depreciation Expenses | $131,483 | $115,000 | ' | ' | ' |
Property_and_Equipment_and_Int3
Property and Equipment and Intangible Assets (Schedule of Property and Equipment and Intangible Assets) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Property, Plant and Equipment [Line Items] | ' | ' |
Property and equipment, gross | $5,692,784 | $4,281,497 |
Less: Accumulated depreciation | -3,758,202 | -3,258,299 |
Total property and equipment, net | 1,934,582 | 1,023,198 |
Intangible assets | 995,948 | 671,061 |
Less: Accumulated amortization | -228,725 | -95,652 |
Total intangible assets, net | 767,223 | 575,409 |
Purchased Software [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Intangible assets | 749,587 | 562,699 |
Trademarks [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Intangible assets | 33,000 | 0 |
Internally developed software [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Intangible assets | 213,361 | 108,362 |
Laboratory Equipment [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property and equipment, gross | 4,468,055 | 3,315,812 |
Furniture and Equipment [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property and equipment, gross | 736,886 | 660,626 |
Leasehold Improvements [Member] | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property and equipment, gross | $487,843 | $305,059 |
Property_and_Equipment_and_Int4
Property and Equipment and Intangible Assets (Schedule of Capital Leased Assets) (Details) (USD $) | Dec. 31, 2013 |
Property, Plant and Equipment [Line Items] | ' |
Equipment and software financed under capital leases | $584,150 |
Less: Accumulated amortization | -320,769 |
Equipment and software financed under capital leases, net | $263,381 |
Property_and_Equipment_and_Int5
Property and Equipment and Intangible Assets (Schedule of Future Minimum Lease Payments under Capital Leases) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Property, Plant and Equipment [Line Items] | ' | ' |
Years ending December 31, 2014 | $188,427 | ' |
Years ending December 31, 2015 | 101,309 | ' |
Years ending December 31, 2016 | 46,852 | ' |
Total minimum lease payments | 336,588 | ' |
Less amount represented by interest | -42,931 | ' |
Less current portion | -157,238 | -158,669 |
Capital lease obligation, net of current portion | $136,419 | $83,910 |
Loss_Per_Share_Details
Loss Per Share (Details) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ' | ' |
Number of shares excluded from the calculation of diluted loss per share | 2,288,076 | 1,749,310 |
Loss_Per_Share_Computation_for
Loss Per Share (Computation for Basic and Diluted Loss Per Share) (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Numerator: | ' | ' |
Net loss | ($8,020,515) | ($7,757,079) |
Numerator for basic and diluted earnings per share | ($8,020,515) | ($7,757,079) |
Denominator: | ' | ' |
Denominator for basic and diluted earnings per share - weighted-average shares outstanding | 33,481,439 | 26,742,345 |
Basic and diluted loss per share | ($0.24) | ($0.29) |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Commitments And Contingencies Disclosure [Line Items] | ' | ' |
Rent expense | $683,926 | $686,651 |
California State [Member] | ' | ' |
Commitments And Contingencies Disclosure [Line Items] | ' | ' |
Operating leases, space | 27,446 | ' |
Operating lease expiration date | 30-Jun-15 | ' |
Maryland [Member] | ' | ' |
Commitments And Contingencies Disclosure [Line Items] | ' | ' |
Operating leases, space | 1,460 | ' |
Operating lease expiration date | 31-Jan-13 | ' |
Commitments_and_Contingencies_2
Commitments and Contingencies (Schedule of Future Minimum Lease Payments under Noncancelable Operating Leases) (Details) (USD $) | Dec. 31, 2013 |
Commitments And Contingencies Disclosure [Line Items] | ' |
2014 | $1,228,880 |
2015 | 564,518 |
2016 | 35,807 |
Total | $1,829,205 |
License_and_Collaborative_Agre1
License and Collaborative Agreements (Details) (USD $) | 12 Months Ended | 1 Months Ended | 12 Months Ended | ||||||||||||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Mar. 31, 2010 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | |
Hitachi Chemical Co., Ltd. [Member] | Hitachi Chemical Co., Ltd. [Member] | Shanghai BioChip Company, Ltd. [Member] | Shanghai BioChip Company, Ltd. [Member] | Licensing Agreements [Member] | Licensing Agreements [Member] | Licensing Agreements [Member] | Licensing Agreements [Member] | Licensing Agreements [Member] | Licensing Agreements [Member] | Licensing Agreements [Member] | Service Agreements [Member] | Service Agreements [Member] | Service Agreements [Member] | Service Agreements [Member] | Service Agreements [Member] | Service Agreements [Member] | |
Collaborative Arrangement [Member] | Collaborative Arrangement [Member] | Collaborative Arrangement [Member] | Collaborative Arrangement [Member] | University of Southern California [Member] | University of Southern California [Member] | Roche Molecular Systems [Member] | Roche Molecular Systems [Member] | GlaxoSmithKline, LLC [Member] | GlaxoSmithKline, LLC [Member] | Taiho Pharmaceutical Co., Ltd. [Member] | Taiho Pharmaceutical Co., Ltd. [Member] | GlaxoSmithKline, LLC [Member] | GlaxoSmithKline, LLC [Member] | GSK Bio [Member] | GSK Bio [Member] | ||
License and Collaborative Agreements [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Royalty expense included in cost of revenue | ' | ' | ' | ' | ' | $305,616 | $332,504 | $280,325 | $336,285 | ' | ' | ' | ' | ' | ' | ' | ' |
Revenue recognized | 0 | 526,823 | 35,027 | 15,355 | ' | ' | ' | ' | ' | ' | ' | 950,000 | 1,193,425 | 1,134,366 | 1,280,704 | 3,534,619 | 3,241,211 |
Milestone payment received | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,000,000 | 500,000 | ' | ' | ' | ' | ' | ' |
Collaborative agreement, optional additional period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '1 year | ' | ' | ' |
Collaborative agreement, term | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '2 years | ' | ' | ' |
Collaborative agreement, automatic renewal period | '1 year | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Collaborative agreement, termination notice period | ' | ' | '90 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '90 days | ' |
Revenue Recognition Milestone Method Further Payment | ' | ' | ' | ' | $1,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock_Option_Plans_Details
Stock Option Plans (Details) (USD $) | 12 Months Ended | 12 Months Ended | 1 Months Ended | 1 Months Ended | 12 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||||||||||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Mar. 31, 2000 | Dec. 31, 2013 | Mar. 31, 2000 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | Dec. 31, 2009 | Dec. 31, 2008 | Oct. 26, 2006 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | |
Non-employee option [Member] | Non-employee option [Member] | Stock Option [Member] | Stock Option Plan 2000 [Member] | Stock Option Plan 2000 [Member] | Other Stock Plans [Member] | 2006 Stock Plan [Member] | 2006 Stock Plan [Member] | 2006 Stock Plan [Member] | 2006 Stock Plan [Member] | 2006 Stock Plan [Member] | 2006 Stock Plan [Member] | 2006 Stock Plan [Member] | Thomos Bologna [Member] | Thomos Bologna [Member] | Thomos Bologna [Member] | Thomos Bologna [Member] | Thomos Bologna [Member] | Thomos Bologna [Member] | Thomos Bologna [Member] | Thomos Bologna [Member] | Thomos Bologna [Member] | Thomos Bologna [Member] | ||||
Maximum [Member] | Minimum [Member] | Restricted Stock Units (RSUs) [Member] | Restricted Stock Units (RSUs) [Member] | Stock Option [Member] | Stock Option [Member] | Stock Option [Member] | Stock Option [Member] | Stock Option [Member] | Stock Option [Member] | |||||||||||||||||
Minimum [Member] | Maximum [Member] | Minimum [Member] | Period One [Member] | Period Two [Member] | ||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of shares authorized | ' | ' | ' | ' | ' | ' | ' | 210,000 | ' | 3,570,000 | ' | ' | ' | ' | ' | 2,160,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock option granted, number of common stock shares | 1,115,750 | 1,039,200 | ' | ' | ' | ' | 1,600,000 | ' | 16,000 | 1,281,924 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 600,000 | 300,000 |
Increase in the number of shares available for issuance | ' | ' | ' | ' | ' | ' | ' | ' | ' | 200,000 | 200,000 | 200,000 | 200,000 | 200,000 | 200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Increase in the number of shares available for issuance, percent of stock outstanding | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Options expiration period | ' | ' | ' | ' | ' | '10 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Options vesting period | ' | ' | ' | '3 years | '2 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '36 months | '36 months | '18 months | ' | ' |
Options outstanding, weighted average exercise price | $1.83 | $2.12 | $3.67 | ' | ' | ' | ' | ' | ' | $1.83 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Non-vested stock options outstanding, Weighted average grant date fair value | $1.02 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock options granted, average fair value | $1.07 | $0.89 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Average closing price of common stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $2.40 | ' | ' | ' | $1.80 | ' | ' |
Number of days, for calculating average closing price of common stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '30 days | ' | ' | ' | '30 days | ' | ' |
Number of restricted common stock granted | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 270,000 | ' | ' | ' | ' | ' | ' | ' |
Stock option granted, exercise price | $1.33 | $1.35 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0 | ' | ' | ' | ' | ' | $1.20 | ' |
Share-based compensation | $474,101 | $818,037 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $178,122 | $540,000 | ' | ' | $129,000 | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Non-vested stock options | 1,362,317 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unrecognized compensation cost related to non-vested share-based compensation arrangements granted | $1,130,494 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Options outstanding | 2,288,076 | 1,749,310 | 1,870,846 | ' | ' | ' | ' | ' | ' | 2,288,076 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock_Option_Plans_Schedule_of
Stock Option Plans (Schedule of Assumptions Used to Estimate Share-Based Compensation Expense Using Black-Scholes Model) (Details) | 12 Months Ended | |||
Dec. 31, 2013 | Dec. 31, 2012 | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ||
Expected dividend yield | 0.00% | 0.00% | ||
Forfeiture rate | 7.00% | 7.00% | ||
Maximum [Member] | ' | ' | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ||
Risk free interest rate | 1.77% | 1.32% | ||
Expected volatility | 107.40% | 101.20% | ||
Expected term (in years) | '6 years | [1] | '6 years 3 months | [1] |
Minimum [Member] | ' | ' | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ||
Risk free interest rate | 0.90% | 0.79% | ||
Expected volatility | 102.20% | 71.90% | ||
Expected term (in years) | '5 years | [1] | '6 years | [1] |
[1] | Expected term is calculated using SAB 107, Simplified Formula. Management has concluded that the use of the simplified method for calculating the expected term of its common stock option grants is appropriate given the lack of historical exercises and the standard terms of the employee option grants, including options are granted at-the-money, exercise is conditional only on performing service through the vesting dates, termination of service causes forfeiture of options, employees have a limited number of days to exercise options after termination of service, and options are non-transferable. |
Stock_Option_Plans_Summary_of_
Stock Option Plans (Summary of Stock Option Activity) (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Number of Shares | ' | ' | ' |
Outstanding, Begining balance | 1,749,310 | 1,870,846 | ' |
Granted | 1,115,750 | 1,039,200 | ' |
Exercised | -18,023 | 0 | ' |
Expired | -253,060 | -824,023 | ' |
Forfeited | -305,901 | -336,713 | ' |
Outstanding, Ending balance | 2,288,076 | 1,749,310 | 1,870,846 |
Exercisable, December 31, 2013 | 925,759 | ' | ' |
Weighted Average Exercise Price | ' | ' | ' |
Outstanding, Begining balance | $2.12 | $3.67 | ' |
Granted | $1.33 | $1.35 | ' |
Exercised | $1.33 | $0 | ' |
Expired | $2.30 | $4.77 | ' |
Forfeited | $1.39 | $1.84 | ' |
Outstanding, Ending balance | $1.83 | $2.12 | $3.67 |
Exercisable, December 31, 2013 | $2.55 | ' | ' |
Remaining Contractual Life (Years) | ' | ' | ' |
Outstanding, Ending balance | '8 years 4 months 28 days | '8 years 3 months 25 days | '7 years 4 months 24 days |
Exercisable, December 31, 2013 | '6 years 10 months 10 days | ' | ' |
Aggregate Intrinsic Value | ' | ' | ' |
Outstanding, Begining balance | $151,919 | $66,976 | ' |
Outstanding, Ending balance | 1,082 | 151,919 | 66,976 |
Exercisable, December 31, 2013 | $316 | ' | ' |
Stock_Option_Plans_Schedule_of1
Stock Option Plans (Schedule of Options Outstanding) (Details) | 12 Months Ended |
Dec. 31, 2013 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ' |
Options Outstanding Number of Options | 2,288,076 |
Options Outstanding WA Remaining Contractual Term | '8 years 4 months 24 days |
Options Exercisable Number of Options | 925,759 |
Options Exercisable WA Remaining Contractual Term | '6 years 10 months 24 days |
$ 1.00 to 1.99 [Member] | ' |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ' |
Options Outstanding Number of Options | 1,783,076 |
Options Outstanding WA Remaining Contractual Term | '9 years 1 month 6 days |
Options Exercisable Number of Options | 488,913 |
Options Exercisable WA Remaining Contractual Term | '8 years |
$ 2.00 to 2.99 [Member] | ' |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ' |
Options Outstanding Number of Options | 287,500 |
Options Outstanding WA Remaining Contractual Term | '7 years 7 months 6 days |
Options Exercisable Number of Options | 219,346 |
Options Exercisable WA Remaining Contractual Term | '7 years 4 months 24 days |
$ 3.00 to 3.99 [Member] | ' |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ' |
Options Outstanding Number of Options | 71,000 |
Options Outstanding WA Remaining Contractual Term | '4 years 7 months 6 days |
Options Exercisable Number of Options | 71,000 |
Options Exercisable WA Remaining Contractual Term | '4 years 7 months 6 days |
$ 4.29 [Member] | ' |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ' |
Options Outstanding Number of Options | 11,500 |
Options Outstanding WA Remaining Contractual Term | '3 years 7 months 6 days |
Options Exercisable Number of Options | 11,500 |
Options Exercisable WA Remaining Contractual Term | '3 years 7 months 6 days |
$ 7.00 [Member] | ' |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ' |
Options Outstanding Number of Options | 135,000 |
Options Outstanding WA Remaining Contractual Term | '3 years 4 months 24 days |
Options Exercisable Number of Options | 135,000 |
Options Exercisable WA Remaining Contractual Term | '3 years 4 months 24 days |
Stock_Option_Plans_Schedule_of2
Stock Option Plans (Schedule of Stock-Based Compensation Included in Results of Operations) (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' |
Stock-based compensation | $474,101 | $818,037 |
Cost of revenue [Member] | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' |
Stock-based compensation | 30,527 | 57,999 |
Research and development [Member] | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' |
Stock-based compensation | 41,625 | 32,642 |
Sales and marketing [Member] | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' |
Stock-based compensation | 29,791 | 54,527 |
General and administrative [Member] | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' |
Stock-based compensation | $372,158 | $672,869 |
Stock_Option_Plans_Schedule_of3
Stock Option Plans (Schedule of Awards to Mr. Bologna) (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Intrinsic Value | $316 | ' | ' |
Granted | $1.33 | $1.35 | ' |
Options Exercisable | 925,759 | ' | ' |
Remaining Contractual Term | '8 years 4 months 28 days | '8 years 3 months 25 days | '7 years 4 months 24 days |
Thomos Bologna [Member] | Restricted Stock Units (RSUs) [Member] | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Grant Date | 21-Dec-11 | ' | ' |
Number of Awards | 270,000 | ' | ' |
Intrinsic Value | 313,200 | ' | ' |
Granted | $0 | ' | ' |
Options Exercisable | 0 | ' | ' |
Remaining Contractual Term | '8 years | ' | ' |
Employee Stock Option [Member] | Thomos Bologna [Member] | Period One [Member] | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Grant Date | 21-Dec-11 | ' | ' |
Number of Awards | 600,000 | ' | ' |
Intrinsic Value | 0 | ' | ' |
Granted | $1.20 | ' | ' |
Options Exercisable | 400,000 | ' | ' |
Remaining Contractual Term | '8 years | ' | ' |
Employee Stock Option [Member] | Thomos Bologna [Member] | Period Two [Member] | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Grant Date | 21-Dec-11 | ' | ' |
Number of Awards | 300,000 | ' | ' |
Intrinsic Value | $0 | ' | ' |
Granted | $1.20 | ' | ' |
Options Exercisable | 300,000 | ' | ' |
Remaining Contractual Term | '8 years | ' | ' |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Income Tax Examination [Line Items] | ' | ' |
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent | 34.00% | 34.00% |
Minimum [Member] | ' | ' |
Income Tax Examination [Line Items] | ' | ' |
Years open to examination | '2003 | ' |
Maximum [Member] | ' | ' |
Income Tax Examination [Line Items] | ' | ' |
Years open to examination | '2013 | ' |
State and Local Jurisdiction [Member] | ' | ' |
Income Tax Examination [Line Items] | ' | ' |
Net operating loss carryforwards | 35 | ' |
Beginning year of expiration of net operating loss carryforwards | '2014 | ' |
Foreign Tax Authority [Member] | ' | ' |
Income Tax Examination [Line Items] | ' | ' |
Net operating loss carryforwards | 2.9 | 2.8 |
Domestic Tax Authority [Member] | ' | ' |
Income Tax Examination [Line Items] | ' | ' |
Net operating loss carryforwards | 40 | ' |
Beginning year of expiration of net operating loss carryforwards | '2021 | ' |
Income_Taxes_Schedule_of_Incom
Income Taxes (Schedule of Income Tax Provision) (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Current | ' | ' |
Federal | $0 | $0 |
Foreign | 0 | 0 |
State | 0 | 0 |
Total | 0 | 0 |
Deferred | ' | ' |
Federal | 0 | 0 |
Foreign | 0 | 0 |
State | 0 | 0 |
Total | 0 | 0 |
Income tax provision | $0 | $0 |
Income_Taxes_Schedule_of_Loss_
Income Taxes (Schedule of Loss Before Income Tax Provision) (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Income Tax Examination [Line Items] | ' | ' |
Domestic | ($8,012,906) | ($7,750,861) |
Foreign | -7,609 | -6,218 |
Loss before income tax provision | ($8,020,515) | ($7,757,079) |
Income_Taxes_Reconciliation_of
Income Taxes (Reconciliation of Expected Income Tax Benefit Computed Using Federal Statutory Income Tax Rate) (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Income Tax Examination [Line Items] | ' | ' |
Income tax benefit based on federal statutory rate | ($2,729,000) | ($2,637,000) |
State income tax benefit, net of federal income tax | -413,000 | -216,000 |
Change in deferred tax valuation allowance | 3,048,000 | 849,000 |
Stock-based compensation | 75,000 | 988,000 |
Foreign net operating loss | 0 | 785,000 |
Other, net | 19,000 | 231,000 |
Income tax provision | $0 | $0 |
Income_Taxes_Schedule_of_Defer
Income Taxes (Schedule of Deferred Tax Assets and Deferred Tax Liabilities) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Deferred tax assets: | ' | ' |
Domestic net operating loss carryforwards | $15,627,000 | $13,669,000 |
Foreign net operating loss carryforwards | 800,000 | 798,000 |
Deferred revenue | 0 | 191,000 |
Federal and state tax credit | 297,000 | 297,000 |
Stock-based compensation | 682,000 | 586,000 |
Capitalized costs | 1,232,000 | 1,233,000 |
Other, net | 2,129,000 | 944,000 |
Total gross deferred tax assets | 20,767,000 | 17,718,000 |
Less valuation allowance on deferred tax assets | -20,767,000 | -17,718,000 |
Net deferred taxes | 0 | 0 |
Deferred tax liabilities: | ' | ' |
Plant and equipment, principally accelerated depreciation | 0 | 0 |
Total deferred tax liabilities | 0 | 0 |
Net deferred taxes | $0 | $0 |
Segment_Information_Details
Segment Information (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Segment Reporting Information [Line Items] | ' | ' |
Revenue | $19,801,359 | $18,736,669 |
Long-lived assets | 2,681,666 | 1,598,607 |
United States [Member] | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Revenue | 15,219,155 | 14,238,993 |
Long-lived assets | 2,681,666 | 1,598,607 |
Europe [Member] | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Revenue | 3,556,354 | 3,304,251 |
Japan [Member] | ' | ' |
Segment Reporting Information [Line Items] | ' | ' |
Revenue | $1,028,850 | $1,193,425 |
Offerings_of_Common_Stock_Deta
Offerings of Common Stock (Details) (USD $) | 12 Months Ended | 12 Months Ended | 1 Months Ended | 0 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | 1 Months Ended | |||||||||||
Dec. 31, 2013 | Dec. 31, 2012 | Jan. 18, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Jan. 18, 2012 | Mar. 05, 2010 | Feb. 02, 2012 | Sep. 30, 2012 | Jan. 18, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Sep. 30, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | Sep. 30, 2013 | Sep. 20, 2013 | Aug. 23, 2013 | |
Common Stock [Member] | Common Stock [Member] | Common Stock [Member] | Lansdowne Partners Limited Partnership, Greenway Capital Partners and Paragon Associates [Member] | Lansdowne Partners Limited Partnership, Greenway Capital Partners and Paragon Associates [Member] | Private Placement [Member] | Private Placement [Member] | March 2010 Private Placement [Member] | March 2010 Private Placement [Member] | March 2010 Private Placement [Member] | February 2012 Private Placement [Member] | September 2012 Private Placement [Member] | September 2012 Private Placement [Member] | December 2013 Underwritten Public Offering [Member] | December 2013 Underwritten Public Offering [Member] | September 2013 Registered Direct Offering [Member] | September 2013 Registered Direct Offering [Member] | Pathwork Purchase Agreement [Member] | ||||
Subsidiary, Sale of Stock [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock Issued During Period, Shares, New Issues | ' | ' | ' | ' | ' | ' | ' | 3,005,349 | 5,257,267 | 8,000,000 | 600,769 | ' | ' | ' | ' | ' | 4,464,443 | ' | 932,805 | ' | ' |
Share Price | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $1.20 | $1.20 | ' | $2.05 | $1.96 |
Common stock issued, price per share | ' | ' | ' | ' | ' | ' | ' | $1.31 | $1.50 | $1.10 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net proceeds from issuance of common stock | $6,571,324 | $16,452,538 | ' | ' | ' | ' | ' | ' | ' | $8,800,000 | ' | ' | ' | ' | ' | ' | $5,357,332 | $4,800,000 | $1,912,250 | ' | ' |
Net proceeds from issuance of shares in Private Placement | ' | ' | ' | ' | ' | ' | ' | 3,879,403 | 7,822,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Registration statement filing period after closing of Private Placement | ' | ' | ' | ' | ' | ' | ' | '45 days | '90 days | '45 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Registration statement effective period after closing of Private Placement | ' | ' | ' | ' | ' | ' | ' | '120 days | '180 days | '180 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of shares included in a registration statement to be registered with the SEC | ' | ' | ' | ' | ' | ' | ' | 3,005,349 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock classified outside of stockholders equity (deficit) | 5,500,000 | 11,775,724 | ' | 5,500,000 | 11,775,724 | 7,854,682 | ' | 3,879,403 | 7,885,900 | 8,800,000 | ' | 0 | 3,092,396 | 3,183,328 | 5,500,000 | ' | ' | ' | ' | ' | ' |
Percentage of shares purchased required to be held for board observer designation right | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares of common stock reclassified to equity | ' | ' | ' | -4,561,847 | -9,758,676 | ' | 3,658,676 | ' | ' | ' | ' | ' | ' | 3,100,000 | 3,000,000 | ' | ' | ' | ' | ' | ' |
Shares classified outside of stockholders' equity | ' | ' | 5 | 5,000,000 | 9,561,847 | 6,063,256 | ' | ' | ' | ' | ' | ' | ' | ' | 5,000,000 | 8,000,000 | ' | ' | ' | ' | ' |
Common stock Offering Costs | 180,790 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,700,000 | ' |
Stock Issued During Period, Shares, Purchase of Assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 500,000 |
Stock Issued During Period, Value, Purchase of Assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 980,000 |
Payments to Acquire Property, Plant, and Equipment, Total | $200,000 | $0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $200,000 |
Underwriting Discount Percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5.00% | ' | ' | ' | ' |
Offerings_of_Common_Stock_Sche
Offerings of Common Stock (Schedule of Common Stock Classified Outside of Stockholders' Equity) (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Jan. 18, 2012 | Dec. 31, 2013 | Dec. 31, 2012 |
Common Stock [Member] | Common Stock [Member] | ||||
Number of Shares | ' | ' | ' | ' | ' |
Beginning balance | ' | ' | 5 | 9,561,847 | 6,063,256 |
Issuance of common stock classified outside of stockholders' equity (deficit) | ' | ' | ' | 0 | 13,257,267 |
Reclassification to stockholdersb equity (deficit) | ' | ' | ' | -4,561,847 | -9,758,676 |
Ending Balance | ' | ' | 5 | 5,000,000 | 9,561,847 |
Amount | ' | ' | ' | ' | ' |
Beginning balance | $5,500,000 | $11,775,724 | ' | $11,775,724 | $7,854,682 |
Issuance of common stock classified outside of stockholders' equity (deficit) | ' | ' | ' | 0 | 16,633,328 |
Reclassification to stockholdersb equity (deficit) | ' | ' | ' | -6,275,724 | -12,712,286 |
Ending balance | $5,500,000 | $11,775,724 | ' | $5,500,000 | $11,775,724 |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ||
Money market accounts | $0 | [1] | $10,000 | [1] |
Fair Value, Inputs, Level 1 [Member] | ' | ' | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ||
Money market accounts | 0 | [1] | 10,000 | [1] |
Fair Value, Inputs, Level 2 [Member] | ' | ' | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ||
Money market accounts | 0 | [1] | 0 | [1] |
Fair Value, Inputs, Level 3 [Member] | ' | ' | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | ||
Money market accounts | $0 | [1] | $0 | [1] |
[1] | Included in cash and cash equivalents on the accompanying consolidated balance sheet. |
Subsequent_Events_Details
Subsequent Events (Details) (Subsequent Event [Member]) | 12 Months Ended |
Dec. 31, 2013 | |
Subsequent Event [Member] | ' |
Subsequent Event [Line Items] | ' |
Lease Expiration Date | 30-Jun-15 |
Lease Expiration date Extended | 30-Jun-16 |