Ontrak (OTRK) 10-Q14 Aug 142014 Q2 Quarterly reportFinancial data

Company Profile

Document_And_Entity_Informatio

Document And Entity Information	6 Months Ended
Document And Entity Information	Jun. 30, 2014	Aug. 13, 2014
Document and Entity Information [Abstract]	'	'
Entity Registrant Name	'CATASYS, INC.	'
Document Type	'10-Q	'
Current Fiscal Year End Date	'--12-31	'
Entity Common Stock, Shares Outstanding	'	23,479,256
Amendment Flag	'false	'
Entity Central Index Key	'0001136174	'
Entity Current Reporting Status	'Yes	'
Entity Voluntary Filers	'No	'
Entity Filer Category	'Smaller Reporting Company	'
Entity Well-known Seasoned Issuer	'No	'
Document Period End Date	30-Jun-14	'
Document Fiscal Year Focus	'2014	'
Document Fiscal Period Focus	'Q2	'

Condensed_Consolidated_Balance

Condensed Consolidated Balance Sheets (Current Period Unaudited) (USD $)	Jun. 30, 2014	Dec. 31, 2013
In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Current assets	'	'
Cash and cash equivalents	$1,141	$1,136
Receivables, net of allowance for doubtful accounts of $20 and $0, respectively	177	173
Receivables from related party	'	115
Prepaids and other current assets	125	275
Total current assets	1,443	1,699
Long-term assets	'	'
Property and equipment, net of accumulated depreciation of $1,949 and $2,001, respectively	362	366
Intangible assets, net of accumulated amortization of $410 and $401, respectively	109	118
Deposits and other assets	387	440
Total Assets	2,301	2,623
Current liabilities	'	'
Accounts payable	276	1,148
Accrued compensation and benefits	1,195	1,181
Deferred revenue	829	534
Other accrued liabilities	683	1,270
Total current liabilities	2,983	4,133
Long-term liabilities	'	'
Deferred rent and other long-term liabilities	297	160
Capital leases	20	26
Warrant liabilities	41,920	16,347
Total Liabilities	45,220	20,666
Stockholders' deficit	'	'
Common stock, $0.0001 par value; 500,000,000 shares authorized; 23,479,256 and 18,835,571 shares issued and outstanding at June 30, 2014 and December 31, 2013, respectively	2	2
Additional paid-in-capital	209,601	209,169
Accumulated deficit	-252,522	-227,214
Total Stockholders' Deficit	-42,919	-18,043
Total Liabilities and Stockholders' Deficit	$2,301	$2,623

Condensed_Consolidated_Balance1

Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) (USD $)	Jun. 30, 2014	Dec. 31, 2013
In Thousands, except Share data, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Allowance For Doubtful Accounts (in Dollars)	$20	$0
Property and equipment, accumulated depreciation (in Dollars)	1,949	2,001
Intangible assets, accumulated amortization (in Dollars)	$410	$401
Preferred stock par value (in Dollars per share)	$0.00	$0.00
Preferred stock, shares authorized	50,000,000	50,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in Dollars per share)	$0.00	$0.00
Common stock, shares authorized	500,000,000	500,000,000
Common stock,shares issued	23,479,256	18,835,571
Common stock, shares outstanding	23,479,256	18,835,571

Condensed_Consolidated_Stateme

Condensed Consolidated Statements of Operations (Unaudited) (USD $)	3 Months Ended		6 Months Ended
Share data in Thousands, except Per Share data, unless otherwise specified	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Revenues	'	'	'	'
Healthcare services revenues	$312,000	$107,000	$511,000	$206,000
Operating expenses	'	'	'	'
Cost of healthcare services	267,000	148,000	532,000	292,000
General and administrative	1,709,000	1,426,000	3,046,000	2,874,000
Depreciation and amortization	28,000	6,000	52,000	11,000
Total operating expenses	2,004,000	1,580,000	3,630,000	3,177,000
Loss from operations	-1,692,000	-1,473,000	-3,119,000	-2,971,000
Other Income	1,194,000	'	1,194,000	'
Interest expense	-1,462,000	-770,000	-2,774,000	-770,000
Change in fair value of warrant liability	-25,493,000	-3,984,000	-20,392,000	376,000
Loss from continuing operations before provision for income taxes	-27,453,000	-6,227,000	-25,091,000	-3,365,000
Provision for income taxes	2,000	1,000	4,000	3,000
Loss from continuing operations	-27,455,000	-6,228,000	-25,095,000	-3,368,000
Gain (loss) from discontinued operations, net of income taxes	8,000	-246,000	-213,000	-493,000
Net loss	($27,447,000)	($6,474,000)	($25,308,000)	($3,861,000)
Basic and diluted net loss from continuing operations per share: (in Dollars per share)	($1.27)	($0.45)	($1.22)	($0.26)
Weighted number of shares outstanding (in Shares)	21,702	13,918	20,581	12,993
Basic and diluted net loss from discontinued operations per share: (in Dollars per share)	$0	($0.02)	($0.01)	($0.04)
Weighted number of shares outstanding (in Shares)	21,702	13,918	20,581	12,993

Condensed_Consolidated_Stateme1

Condensed Consolidated Statement of Cash Flows (Unaudited) (USD $)	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Operating activities:	'	'
Net loss	($25,308,000)	($3,861,000)
Adjustments to reconcile net income (loss) to net cash used in operating activities:	'	'
Loss from discontinued operations	213,000	493,000
Depreciation and amortization	52,000	11,000
Issuance costs included in interest expense	2,771,000	769,000
Write-off of accrued liabilities	-1,194,000	'
Deferred rent	137,000	'
Share-based compensation expense	26,000	117,000
Fair value adjustment on warrant liability	20,392,000	-376,000
Changes in current assets and liabilities:	'	'
Receivables	-29,000	-133,000
Prepaids and other current assets	150,000	105,000
Deferred revenue	295,000	225,000
Accounts payable and other accrued liabilities	-112,000	-2,000
Net cash used in operating activities of continuing operations	-2,607,000	-2,652,000
Net cash used in operating activities of discontinued operations	-208,000	-429,000
Net cash used in operating activities	-2,815,000	-3,081,000
Investing activities:	'	'
Purchases of property and equipment	-36,000	'
Deposits and other assets	53,000	'
Net cash provided by investing activities	17,000	'
Financing activities:	'	'
Proceeds from the issuance of common stock and warrants	2,500,000	1,535,000
Proceeds from the exercise of warrants	77,000	23,000
Transaction Costs	240,000	'
Capital lease obligations	-14,000	-6,000
Net cash provided by financing activities	2,803,000	1,552,000
Net increase (decrease) in cash and cash equivalents	5,000	-1,529,000
Cash and cash equivalents at beginning of period	1,136,000	3,153,000
Cash and cash equivalents at end of period	1,141,000	1,624,000
Supplemental disclosure of cash paid	'	'
Interest	11,000	'
Income taxes	'	26,000
Supplemental disclosure of non-cash activity	'	'
Property and equipment acquired through capital leases and other financing	8,000	12,000
Exercise Of Warrants [Member]	'	'
Supplemental disclosure of non-cash activity	'	'
Common stock issued for exercise of warrants	'	$156,000

Note_1_Basis_of_Consolidation_

Note 1 - Basis of Consolidation, Presentation and Going Concern	6 Months Ended
	Jun. 30, 2014
Disclosure Text Block [Abstract]	'
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]	'
	Note 1. Basis of Consolidation, Presentation and Going Concern

	The accompanying unaudited condensed consolidated financial statements for Catasys, Inc. and our subsidiaries have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and instructions to Form 10-Q and, therefore, do not include all disclosures necessary for a complete presentation of financial position, results of operations, and cash flows in conformity with U.S. GAAP. In our opinion, all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation have been included. Interim results are not necessarily indicative of the results that may be expected for the entire fiscal year. The accompanying financial information should be read in conjunction with the financial statements and the notes thereto in our most recent Annual Report on Form 10-K for the year-ended December 31, 2013, from which the December 31, 2013 balance sheet has been derived.

	Our financial statements have been prepared on the basis that we will continue as a going concern. At June 30, 2014, cash and cash equivalents amounted to $1.1 million and we had a working capital deficit of approximately $1.5 million. In January and May 2014, we closed on financings of approximately $1.0 and $1.5 million, respectively. We have incurred significant operating losses and negative cash flows from operations since our inception. During the six months ended June 30, 2014, our cash used in operating activities of continuing operations was $2.6 million. We anticipate that we could continue to incur negative cash flows and net losses for the next twelve months. The financial statements do not include any adjustments relating to the recoverability of the carrying amount of the recorded assets or the amount of liabilities that might result from the outcome of this uncertainty. As of June 30, 2014, these conditions raised substantial doubt as to our ability to continue as a going concern. We expect our current cash resources to cover expenses through the end of September 2014, however delays in cash collections, revenue, or unforeseen expenditures, could impact our estimate. We are in need of additional capital and while we are currently in discussions with our existing stockholders regarding additional financing there is no assurance that additional capital can be raised in an amount which is sufficient for us or on terms favorable to us and our stockholders, if at all. If we do not obtain additional capital, there is a significant doubt as to whether we can continue to operate as a going concern and we will need to curtail or cease operations or seek bankruptcy relief. If we discontinue operations, we may not have sufficient funds to pay any amounts to stockholders.

	Our ability to fund our ongoing operations and continue as a going concern is dependent on signing and generating fees from existing and new contracts for our Catasys managed care programs and the success of management’s plans to increase revenue and continue to control expenses. We are operating our programs in Kansas, Louisiana, Massachusetts, Oklahoma, West Virginia, Kentucky, and Wisconsin. In August 2014, we entered into an agreement with one of our existing customers which will expand our programs to the provider’s members in Florida. We expect to commence enrollment during the fourth quarter. In addition we expect to commence enrollment for another customer in New Jersey in the fourth quarter. We have generated fees from the launched programs and expect to increase enrollment and fees throughout 2014. However, there can be no assurance that we will generate such fees or that new programs will launch as we expect.

	We have elected to discontinue our license and management fee segment. We shut down the operations effective April 1, 2014 and all of the assets were absorbed by the Company.

Note_2_Summary_of_Significant_

Note 2 - Summary of Significant Accounting Policies	6 Months Ended
Note 2 - Summary of Significant Accounting Policies	Jun. 30, 2014
Accounting Policies [Abstract]	'
Significant Accounting Policies [Text Block]	'
	Note 2. Summary of Significant Accounting Policies

	Revenue Recognition

	Healthcare Services

	Our Catasys contracts are generally designed to provide cash fees to us on a monthly basis based on enrolled members. To the extent our contracts may include a minimum performance guarantee, we reserve a portion of the monthly fees that may be at risk until the performance measurement period is completed. To the extent we receive case rates that are not subject to the performance guarantees, we recognize the case rate ratably over twelve months.

	Cost of Services

	Healthcare Services

	Cost of healthcare services consists primarily of salaries related to our care coaches, healthcare provider claims payments, and fees charged by our third party administrators for processing these claims. Healthcare services cost of services is recognized in the period in which an eligible member receives services. We contract with doctors and licensed behavioral healthcare professionals, on a fee-for-services basis. We determine that a member has received services when we receive a claim or, in the absence of a claim, by utilizing member data recorded in the OnTrak^TM database within the contracted timeframe, with all required billing elements correctly completed by the service provider.

	Cash Equivalents and Concentration of Credit Risk

	We consider all highly liquid investments with an original maturity of three months or less to be cash equivalents. Financial instruments that potentially subject us to a concentration of credit risk consist of cash and cash equivalents, and accounts receivable. Cash is deposited with what we believe are highly credited, quality financial institutions. The deposited cash may exceed Federal Deposit Insurance Corporation (“FDIC”) insured limits. At June 30, 2014, cash and cash equivalents exceeding federally insured limits totaled $921,000.

	For the six months ended June 30, 2014, four customers accounted for approximately 88% of revenues and two customers accounted for approximately 74% of accounts receivable.

	Basic and Diluted Income (Loss) per Share

	Basic income (loss) per share is computed by dividing the net income (loss) to common stockholders for the period by the weighted average number of common shares outstanding during the period. Diluted income (loss) per share is computed by dividing the net income (loss) for the period by the weighted average number of common and dilutive common equivalent shares outstanding during the period.

	Common equivalent shares, consisting of 22,439,683 and 13,768,381 incremental common shares for the three and six months ended June 30, 2014 and June 30, 2013, respectively, issuable upon the exercise of stock options and warrants have been excluded from the diluted earnings per share calculation as their effect is anti-dilutive.

	Share-Based Compensation

	Our 2010 Stock Incentive Plan, as amended (the “Plan”), provides for the issuance of up to 1,825,000 shares of our common stock. Incentive stock options (ISOs) under Section 422A of the Internal Revenue Code and non-qualified options (NSOs) are authorized under the Plan. We have granted stock options to executive officers, employees, members of our board of directors, and certain outside consultants. The terms and conditions upon which options become exercisable vary among grants, but option rights expire no later than ten years from the date of grant and employee and board of director awards generally vest over three to five years. At June 30, 2014, we had 377,815 vested and unvested shares outstanding and 1,389,948 shares available for future awards.

	Share-based compensation expense attributable to continuing operations amounted to $13,000 and $26,000 for the three and six months ended June 30, 2014, compared with $49,000 and $117,000, respectively, for the same periods in 2013.

	Stock Options – Employees and Directors

	We measure and recognize compensation expense for all share-based payment awards made to employees and directors based on estimated fair values on the date of grant. We estimate the fair value of share-based payment awards using the Black-Scholes option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods in the condensed consolidated statements of operations.

	Share-based compensation expense recognized for employees and directors for the three and six months ended June 30, 2014 amounted to $11,000 and $23,000, compared with $47,000 and $94,000 for the same periods in2013, respectively.

	Share-based compensation expense recognized in our condensed consolidated statements of operations for the three and six months ended June 30, 2014 and 2013, includes compensation expense for share-based payment awards granted prior to, but not yet vested, as of January 1, 2006, based on the grant date fair value estimated in accordance with the pro-forma provisions of Statement of Financial Accounting Standards (“SFAS”) 123, and for the share-based payment awards granted subsequent to January 1, 2006 based on the grant date fair value estimated in accordance with the provisions of the Accounting Standards Codification (“ASC”) 718. For share-based awards issued to employees and directors, share-based compensation is attributed to expense using the straight-line single option method. Share-based compensation expense recognized in our condensed consolidated statements of operations for the three and six months ended June 30, 2014 and 2013, is based on awards ultimately expected to vest, reduced for estimated forfeitures. Accounting rules for stock options require forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

	During the three and six months ended June 30, 2014 and 2013, there were no options granted to employees. Employee and director stock option activity for the three and six months ended June 30, 2014 are as follows:

							Weighted Avg.
			Shares				Exercise Price
	Balance December 31, 2013			461,000			$	19.69

	Granted			-			$	-
	Cancelled			-			$	-

	Balance March 31, 2014			461,000			$	19.69

	Granted			-			$	-
	Cancelled			(83,000	)		$	20.15

	Balance June 30, 2014			378,000			$	19.59

	The expected volatility assumptions have been based on the historical and expected volatility of our stock, measured over a period generally commensurate with the expected term. The weighted average expected option term for the three and six months ended June 30, 2014 and 2013, reflects the application of the simplified method prescribed in SEC Staff Accounting Bulletin (“SAB”) No. 107 (as amended by SAB 110), which defines the life as the average of the contractual term of the options and the weighted average vesting period for all option tranches.

	As of June 30, 2014, there was $21,000 of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the Plan. That cost is expected to be recognized over a weighted-average period of approximately 0.57 years.

	Stock Options and Warrants – Non-employees

	We account for the issuance of options and warrants for services from non-employees by estimating the fair value of warrants issued using the Black-Scholes pricing model. This model’s calculations include the option or warrant exercise price, the market price of shares on grant date, the weighted average risk-free interest rate, the expected life of the option or warrant, and the expected volatility of our stock and the expected dividends.

For options and warrants issued as compensation to non-employees for services that are fully vested and non-forfeitable at the time of issuance, the estimated value is recorded in equity and expensed when the services are performed and benefit is received. For unvested shares, the change in fair value during the period is recognized in expense using the graded vesting method.

There were no options issued to non-employees for the three and six months ended June 30, 2014 and 2013, respectively. Share-based compensation expense relating to stock options and warrants recognized for non-employees was $2,000 and $3,000 for the three and six months ended June 30, 2014, and $1,000 and $21,000 for the three and six months ended June 30, 2013, respectively.

Non-employee stock option activity for the three and six months ended June 30, 2014, are as follows:

						Weighted Avg.
		Shares				Exercise Price
Balance December 31, 2013			21,000			$	28.4

Granted			-			$	-
Cancelled			-			$	-

Balance March 31, 2014			21,000			$	28.4

Granted			-			$	-
Cancelled			-			$	-

Balance June 30, 2014			21,000			$	28.4

Common Stock

In May 2014, we entered into securities purchase agreements (the “May Agreements”) with several investors, including Crede CG III, Ltd. (“Crede”), an affiliate of Terren S. Peizer, Chairman and Chief Executive Officer of the Company, and Shamus, LLC (“Shamus”), a company owned by David E. Smith, a member of the Company’s board of directors, relating to the sale and issuance of an aggregate of 2,586,210 shares of common stock and warrants (the “May Warrants”) to purchase an aggregate of 2,586,210 shares of common stock at an exercise price of $0.58 per share for aggregate gross proceeds of approximately $1.5 million (the “May Offering”). The May Agreements provide that in the event that we effectuate a reverse stock split of our common stock within 24 months of the closing date of the May Offering (the “Reverse Split”) and the volume weighted average price (“VWAP”) of the common stock during the 20 trading days following the effective date of the Reverse Split (the “VWAP Period”) declines from the closing price on the trading date immediately prior to the effective date of the Reverse Split, that we shall issue additional shares of common stock to the investors (the “Adjustment Shares”).

In January 2014, we entered into securities purchase agreements (the “January Agreements”) with several investors, including Crede, relating to the sale and issuance of an aggregate of 1,724,141 shares of common stock and warrants (the “January Warrants”) to purchase an aggregate of 1,724,141 shares of common stock at an exercise price of $0.58 per share for aggregate gross proceeds of approximately $1.0 million (the “January Offering”). The January Agreements provide that in the event that we effectuate Reverse Split and the VWAP Period declines from the closing price on the trading date immediately prior to the effective date of the Reverse Split, that we shall issue the Adjustment Shares to the investors.

There were 200,000 shares of common stock issued in exchange for consulting services or settlement of claims during the three and six months ended June 30, 2014. There were no shares of common stock in exchange for various services or settlement of claims during the three and six months ended June 30, 2013. The costs associated with shares issued for services are being amortized to share-based compensation expense on a straight-line basis over the related service periods. For the three and six months ended June 30, 2014, share-based compensation expense relating to all common stock issued for consulting services was $240,000, compared with $1,000 and $21,000 for the same periods in 2013, respectively.

Income Taxes

We have recorded a full valuation allowance against our otherwise recognizable deferred tax assets as of June 30, 2014. As such, we have not recorded a provision for income tax for the period ended June 30, 2014. We utilize the liability method of accounting for income taxes as set forth in ASC 740, Income Taxes. Under the liability method, deferred taxes are determined based on the temporary differences between the financial statement and tax basis of assets and liabilities using tax rates expected to be in effect during the years in which the basis differences reverse. A valuation allowance is recorded when it is more likely than not that some of the deferred tax assets will not be realized. In determining the need for valuation allowances, we consider projected future taxable income and the availability of tax planning strategies. After evaluating all positive and negative historical and perspective evidences, management has determined it is more likely than not that our deferred tax assets will not be realized.

We assess our income tax positions and record tax benefits for all years subject to examination based upon our evaluation of the facts, circumstances and information available at the reporting date. For those tax positions where there is a greater than 50% likelihood that a tax benefit will be sustained, we have recorded the largest amount of tax benefit that may potentially be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where there is less than 50% likelihood that a tax benefit will be sustained, no tax benefit has been recognized in the financial statements. Based on management's assessment of the facts, circumstances and information available, management has determined that all of the tax benefits for the period ended June 30, 2014 should be realized.

Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities recorded at fair value in the condensed consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure fair value. The fair value hierarchy distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level I) and the lowest priority to unobservable inputs (Level III). The three levels of the fair value hierarchy are described below:

Level Input:		Input Definition:
Level I		Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets at the measurement date.
Level II		Inputs, other than quoted prices included in Level I, that are observable for the asset or liability through corroboration with market data at the measurement date.
Level III		Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date.

The following table summarizes fair value measurements by level at June 30, 2014 for assets and liabilities measured at fair value:

		2014

(Dollars in thousands)		Level I				Level II			Level III		Total
Certificates of deposit		$	122			$	-		$	-	$	122
Total assets		$	122			$	-		$	-	$	122

Warrant liabilities		$	-			$	-		$	41,920	$	41,920
Total liabilities		$	-			$	-		$	41,920	$	41,920

Financial instruments classified as Level III in the fair value hierarchy as of June 30, 2014, represent our liabilities measured at market value on a recurring basis which include warrant liabilities resulting from recent debt and equity financings. In accordance with current accounting rules, the warrant liabilities are being marked-to-market each quarter-end until they are completely settled. The warrants are valued using the Black-Scholes option-pricing model, using both observable and unobservable inputs and assumptions consistent with those used in our estimate of fair value of employee stock options. See Warrant Liabilities below.

The following table summarizes our fair value measurements using significant Level III inputs, and changes therein, for the three and six months ended June 30, 2014:

		Level III
		Warrant
(Dollars in thousands)		Liabilities
Balance as of December 31, 2013		$	16,347
Issuance of warrants			2,310
Change in fair value			(5,101	)
Balance as of March 31, 2014		$	13,556
Issuance (exercise) of warrants, net			2,871
Change in fair value			25,493
Balance as of June 30, 2014		$	41,920

Intangible Assets

As of June 30, 2014, the gross and net carrying amounts of intangible assets that are subject to amortization are as follows:

		Gross									Amortization
		Carrying				Accumulated			Net		Period
(In thousands)		Amount				Amortization			Balance		(in years)
Intellectual property		$	519			$	(410	)	$	109		7

During the three and six months ended June 30, 2014, we did not acquire any new intangible assets and at June 30, 2014, all of our intangible assets consisted of intellectual property, which is not subject to renewal or extension. We had no intangible impairment for the three and six months ended June 30, 2014 or 2013.

Additionally, it is important to note that our overall business model, business operations and future prospects of our business have not changed materially since we performed the reviews and analysis noted above, with the exception of the timing, and annualized amounts of expected revenue.

Estimated remaining amortization expense for intangible assets for the current year and each of the next five years ending December 31 is as follows:

(In thousands)
Year		Amount
2014 (6 months)		$	8
2015		$	16
2016		$	16
2017		$	16
2018		$	16

Property and Equipment

Property and equipment are stated at cost, less accumulated depreciation. Additions and improvements to property and equipment are capitalized at cost. Expenditures for maintenance and repairs are charged to expense as incurred. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets, which range from two to seven years for furniture and equipment. Leasehold improvements are amortized over the lesser of the estimated useful lives of the assets or the related lease term, which is typically five to seven years.

Warrant Liabilities

In May 2014, we entered into the May Agreements with several investors relating to the sale and issuance of an aggregate of 2,586,210 shares of common stock and warrants to purchase an aggregate of 2,586,210 shares of common stock at an exercise price of $0.58 per share for aggregate gross proceeds of approximately $1.5 million. The May Agreements provide that in the event that we effectuate a Reverse Split and the VWAP period declines from the closing price on the trading date immediately prior to the effective date of the Reverse Split, that we shall issue the Adjustment Shares to the investors.

The May Warrants expire in May 2019, and contain anti-dilution provisions. As a result, if we, in the future, issue or grant any rights to purchase any of our common stock, or other securities convertible into our common stock, for a per share price less than the exercise price of the May Warrants, the exercise price of the May Warrants will be reduced to such lower price, subject to customary exceptions. In the event that Adjustment Shares are issued, the number of shares that may be purchased under the May Warrants shall be increased by an amount equal to the Adjustment Shares. In addition, the exercise price is subject to adjustment in the event that the VWAP during the VWAP period is less than the exercise price prior to the VWAP Period.

In January 2014, we entered into the January Agreements with several investors relating to the sale and issuance of an aggregate of 1,724,141 shares of common stock and warrants to purchase an aggregate of 1,724,141 shares of common stock at an exercise price of $0.58 per share for aggregate gross proceeds of approximately $1.0 million. The January Agreements provide that in the event that we effectuate a Reverse Split and the VWAP period declines from the closing price on the trading date immediately prior to the effective date of the Reverse Split, that we shall issue the Adjustment Shares to the investors.

The January Warrants expire in January 2019, and contain anti-dilution provisions. As a result, if we, in the future, issue or grant any rights to purchase any of our common stock, or other securities convertible into our common stock, for a per share price less than the exercise price of the January Warrants, the exercise price of the January Warrants will be reduced to such lower price, subject to customary exceptions. In the event that Adjustment Shares are issued, the number of shares that may be purchased under the January Warrants shall be increased by an amount equal to the Adjustment Shares. In addition, the exercise price is subject to adjustment in the event that the VWAP during the VWAP period is less than the exercise price prior to the VWAP Period.

We have issued warrants to purchase common stock in July 2010, October 2010, November 2010, December 2011, February 2012, April 2012, May 2012, September 2012, December 2012, April 2013, October 2013, January 2014, May 2014, and when we amended and restated the Highbridge senior secured note in July 2008. The warrants are being accounted for as liabilities in accordance with FASB accounting rules, due to provisions in some warrants that protect the holders from declines in our stock price and a requirement to deliver registered shares upon exercise of the warrants, which is considered outside our control. The warrants are marked-to-market each reporting period, using the Black-Scholes pricing model, until they are completely settled or expire.

For the three and six months ended June 30, 2014, we recognized a loss of $25 million and $20 million, respectively, compared with a non-operating loss of $4.0 million and a non-operating gain of $376,000 for the same periods in 2013, respectively, related to the revaluation of our warrant liabilities.

Recently Issued or Newly Adopted Accounting Standards

In July 2013, the FASB issued ASU 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists, (“ASU 2013-11”), which eliminates diversity in practice for the presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss or a tax credit carryforward is available to reduce the taxable income or tax payable that would result from disallowance of a tax position. ASU 2013-11 affects only the presentation of such amounts in an entity’s balance sheet and is effective for fiscal years beginning after December 15, 2013 and interim periods within those years. The adoption of ASU 2013-11 did not have a material effect on our consolidated financial position or results of operations.

Note_3_Discontinued_Operations

Note 3 - Discontinued Operations	6 Months Ended
Note 3 - Discontinued Operations	Jun. 30, 2014
Discontinued Operations and Disposal Groups [Abstract]	'
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]	'
	Note 3. Discontinued Operations

	We elected to discontinue our license and management fees segment. We shut down the operations effective April 1, 2014, and all of the assets were absorbed by the Company. The revenues and expenses of discontinued operations for the three and six months ended June 30, 2014 and 2013, are as follows:

		Three months ended						Six months ended
		June 30,						June 30,
		(unaudited)						(unaudited)
	(in thousands)	2014			2013			2014			2013

	Revenues	$	6		$	26		$	25		$	62

	Expenses
	Cost of license and management services	$	(13	)	$	55		$	55		$	115
	General and administrative expenses
	Salaries and benefits		-			119			96			244
	Other expenses		11			61			83			118
	Depreciation and amortization		-			37			4			78
	Total expenses	$	(2	)	$	272		$	238		$	555

	Gain (loss) from discontinued operations	$	8		$	(246	)	$	(213	)	$	(493	)

	The carrying amount of the assets and liabilities of discontinued operations as of April 1, 2014, were as follows:

					(audited)
		30-Jun			December 31,
	(in thousands)	2014			2013
	Cash and cash equivalents	$	1		$	24
	Receivables, net		-			24
	Total assets	$	1		$	48

	Accounts payable		-			25
	Intercompany Payable		20			13,119
	Total liabilities	$	20		$	13,144

	Net assets (liabilities) of discontinued operations	$	(19	)	$	(13,096	)

Note_4_Related_Party_Disclosur

Note 4 - Related Party Disclosure	6 Months Ended
Note 4 - Related Party Disclosure	Jun. 30, 2014
Related Party Transactions [Abstract]	'
Related Party Transactions Disclosure [Text Block]	'
	Note 4. Related Party Disclosure

	In December 2010, we entered into a three-year sublease agreement with Xoftek, Inc., an affiliate of our Chairman and Chief Executive Officer, to sublease approximately one-third of our office space for a three-year term for a monthly rent of approximately $11,000 per month. The related party receivable as of June 30, 2014 and December 31, 2013 was $0 and $115,000, respectively. This is net of an offset against this receivable of $0 and $186,000 payable to our Chairman and Chief Executive Officer at June 30, 2014 and December 31, 2013, respectively. We have offset approximately $382,000 in payables due to our Chairman and Chief Executive Officer as of June 30, 2014.

	Crede, an affiliate of our Chairman and Chief Executive Officer, participated in our January 2014 and May 2014 Offerings. Crede received approximately 3,662,932 shares of our common stock and warrants to purchase an aggregate 3,662,932 shares of common stock at a price of $0.58 per share, for gross proceeds of approximately $2.1 million.

	Shamus, a company owned by David E. Smith, a member of the Company’s board of directors, participated in our May 2014 Offerings. Shamus received approximately 344,828 shares of our common stock and warrants to purchase an aggregate 344,828 shares of common stock at a price of $0.58 per share, for gross proceeds of approximately $200,000.

Note_5_Other_IncomeWriteoff_of

Note 5 - Other Income/Write-off of Liabilities	6 Months Ended
Note 5 - Other Income/Write-off of Liabilities	Jun. 30, 2014
Other Income Write Offof Liabilities [Abstract]	'
Other Income Write Offof Liabilities [Text Block]	'
	Note 5. Other Income/Write-off of Liabilities

	During the quarter ended June 30, 2014, the statute on a research contract, initially entered into in 2005 and amended and breached in 2010 expired in accordance with Section 337 of the California Code of Civil Procedures. Accordingly, we wrote off all balances included in accounts payable and accrued liabilities on our books relating to this contract which amounted to approximately $1.1 million.

Note_6_Subsequent_Events

Note 6 - Subsequent Events	6 Months Ended
Note 6 - Subsequent Events	Jun. 30, 2014
Subsequent Events [Abstract]	'
Subsequent Events [Text Block]	'
	Note 6. Subsequent Events

	In August 2014, we entered into an agreement with one of our existing customers which will expand our programs to the provider’s members in Florida. We expect to commence enrollment during the fourth quarter.

Accounting_Policies_by_Policy_

Accounting Policies, by Policy (Policies)	6 Months Ended
Accounting Policies, by Policy (Policies)	Jun. 30, 2014
Accounting Policies [Abstract]	'
Revenue Recognition, Policy [Policy Text Block]	'
	Revenue Recognition

	Healthcare Services

	Our Catasys contracts are generally designed to provide cash fees to us on a monthly basis based on enrolled members. To the extent our contracts may include a minimum performance guarantee, we reserve a portion of the monthly fees that may be at risk until the performance measurement period is completed. To the extent we receive case rates that are not subject to the performance guarantees, we recognize the case rate ratably over twelve months.
Cost of Sales, Policy [Policy Text Block]	'
	Cost of Services

	Healthcare Services

	Cost of healthcare services consists primarily of salaries related to our care coaches, healthcare provider claims payments, and fees charged by our third party administrators for processing these claims. Healthcare services cost of services is recognized in the period in which an eligible member receives services. We contract with doctors and licensed behavioral healthcare professionals, on a fee-for-services basis. We determine that a member has received services when we receive a claim or, in the absence of a claim, by utilizing member data recorded in the OnTrak^TM database within the contracted timeframe, with all required billing elements correctly completed by the service provider.
Cash and Cash Equivalents, Policy [Policy Text Block]	'
	Cash Equivalents and Concentration of Credit Risk

	We consider all highly liquid investments with an original maturity of three months or less to be cash equivalents. Financial instruments that potentially subject us to a concentration of credit risk consist of cash and cash equivalents, and accounts receivable. Cash is deposited with what we believe are highly credited, quality financial institutions. The deposited cash may exceed Federal Deposit Insurance Corporation (“FDIC”) insured limits. At June 30, 2014, cash and cash equivalents exceeding federally insured limits totaled $921,000.

	For the six months ended June 30, 2014, four customers accounted for approximately 88% of revenues and two customers accounted for approximately 74% of accounts receivable.
Earnings Per Share, Policy [Policy Text Block]	'
	Basic and Diluted Income (Loss) per Share

	Basic income (loss) per share is computed by dividing the net income (loss) to common stockholders for the period by the weighted average number of common shares outstanding during the period. Diluted income (loss) per share is computed by dividing the net income (loss) for the period by the weighted average number of common and dilutive common equivalent shares outstanding during the period.

	Common equivalent shares, consisting of 22,439,683 and 13,768,381 incremental common shares for the three and six months ended June 30, 2014 and June 30, 2013, respectively, issuable upon the exercise of stock options and warrants have been excluded from the diluted earnings per share calculation as their effect is anti-dilutive.
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block]	'
	Share-Based Compensation

	Our 2010 Stock Incentive Plan, as amended (the “Plan”), provides for the issuance of up to 1,825,000 shares of our common stock. Incentive stock options (ISOs) under Section 422A of the Internal Revenue Code and non-qualified options (NSOs) are authorized under the Plan. We have granted stock options to executive officers, employees, members of our board of directors, and certain outside consultants. The terms and conditions upon which options become exercisable vary among grants, but option rights expire no later than ten years from the date of grant and employee and board of director awards generally vest over three to five years. At June 30, 2014, we had 377,815 vested and unvested shares outstanding and 1,389,948 shares available for future awards.

	Share-based compensation expense attributable to continuing operations amounted to $13,000 and $26,000 for the three and six months ended June 30, 2014, compared with $49,000 and $117,000, respectively, for the same periods in 2013.

	Stock Options – Employees and Directors

	We measure and recognize compensation expense for all share-based payment awards made to employees and directors based on estimated fair values on the date of grant. We estimate the fair value of share-based payment awards using the Black-Scholes option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods in the condensed consolidated statements of operations.

	Share-based compensation expense recognized for employees and directors for the three and six months ended June 30, 2014 amounted to $11,000 and $23,000, compared with $47,000 and $94,000 for the same periods in2013, respectively.

	Share-based compensation expense recognized in our condensed consolidated statements of operations for the three and six months ended June 30, 2014 and 2013, includes compensation expense for share-based payment awards granted prior to, but not yet vested, as of January 1, 2006, based on the grant date fair value estimated in accordance with the pro-forma provisions of Statement of Financial Accounting Standards (“SFAS”) 123, and for the share-based payment awards granted subsequent to January 1, 2006 based on the grant date fair value estimated in accordance with the provisions of the Accounting Standards Codification (“ASC”) 718. For share-based awards issued to employees and directors, share-based compensation is attributed to expense using the straight-line single option method. Share-based compensation expense recognized in our condensed consolidated statements of operations for the three and six months ended June 30, 2014 and 2013, is based on awards ultimately expected to vest, reduced for estimated forfeitures. Accounting rules for stock options require forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

	During the three and six months ended June 30, 2014 and 2013, there were no options granted to employees. Employee and director stock option activity for the three and six months ended June 30, 2014 are as follows:

					Weighted Avg.
		Shares			Exercise Price
	Balance December 31, 2013		461,000		$	19.69

	Granted		-		$	-
	Cancelled		-		$	-

	Balance March 31, 2014		461,000		$	19.69

	Granted		-		$	-
	Cancelled		(83,000	)	$	20.15

	Balance June 30, 2014		378,000		$	19.59

	The expected volatility assumptions have been based on the historical and expected volatility of our stock, measured over a period generally commensurate with the expected term. The weighted average expected option term for the three and six months ended June 30, 2014 and 2013, reflects the application of the simplified method prescribed in SEC Staff Accounting Bulletin (“SAB”) No. 107 (as amended by SAB 110), which defines the life as the average of the contractual term of the options and the weighted average vesting period for all option tranches.

	As of June 30, 2014, there was $21,000 of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the Plan. That cost is expected to be recognized over a weighted-average period of approximately 0.57 years.

	Stock Options and Warrants – Non-employees

	We account for the issuance of options and warrants for services from non-employees by estimating the fair value of warrants issued using the Black-Scholes pricing model. This model’s calculations include the option or warrant exercise price, the market price of shares on grant date, the weighted average risk-free interest rate, the expected life of the option or warrant, and the expected volatility of our stock and the expected dividends.

	For options and warrants issued as compensation to non-employees for services that are fully vested and non-forfeitable at the time of issuance, the estimated value is recorded in equity and expensed when the services are performed and benefit is received. For unvested shares, the change in fair value during the period is recognized in expense using the graded vesting method.

	There were no options issued to non-employees for the three and six months ended June 30, 2014 and 2013, respectively. Share-based compensation expense relating to stock options and warrants recognized for non-employees was $2,000 and $3,000 for the three and six months ended June 30, 2014, and $1,000 and $21,000 for the three and six months ended June 30, 2013, respectively.

	Non-employee stock option activity for the three and six months ended June 30, 2014, are as follows:

					Weighted Avg.
		Shares			Exercise Price
	Balance December 31, 2013		21,000		$	28.4

	Granted		-		$	-
	Cancelled		-		$	-

	Balance March 31, 2014		21,000		$	28.4

	Granted		-		$	-
	Cancelled		-		$	-

	Balance June 30, 2014		21,000		$	28.4
Stockholders' Equity, Policy [Policy Text Block]	'
	Common Stock

	In May 2014, we entered into securities purchase agreements (the “May Agreements”) with several investors, including Crede CG III, Ltd. (“Crede”), an affiliate of Terren S. Peizer, Chairman and Chief Executive Officer of the Company, and Shamus, LLC (“Shamus”), a company owned by David E. Smith, a member of the Company’s board of directors, relating to the sale and issuance of an aggregate of 2,586,210 shares of common stock and warrants (the “May Warrants”) to purchase an aggregate of 2,586,210 shares of common stock at an exercise price of $0.58 per share for aggregate gross proceeds of approximately $1.5 million (the “May Offering”). The May Agreements provide that in the event that we effectuate a reverse stock split of our common stock within 24 months of the closing date of the May Offering (the “Reverse Split”) and the volume weighted average price (“VWAP”) of the common stock during the 20 trading days following the effective date of the Reverse Split (the “VWAP Period”) declines from the closing price on the trading date immediately prior to the effective date of the Reverse Split, that we shall issue additional shares of common stock to the investors (the “Adjustment Shares”).

	In January 2014, we entered into securities purchase agreements (the “January Agreements”) with several investors, including Crede, relating to the sale and issuance of an aggregate of 1,724,141 shares of common stock and warrants (the “January Warrants”) to purchase an aggregate of 1,724,141 shares of common stock at an exercise price of $0.58 per share for aggregate gross proceeds of approximately $1.0 million (the “January Offering”). The January Agreements provide that in the event that we effectuate Reverse Split and the VWAP Period declines from the closing price on the trading date immediately prior to the effective date of the Reverse Split, that we shall issue the Adjustment Shares to the investors.

	There were 200,000 shares of common stock issued in exchange for consulting services or settlement of claims during the three and six months ended June 30, 2014. There were no shares of common stock in exchange for various services or settlement of claims during the three and six months ended June 30, 2013. The costs associated with shares issued for services are being amortized to share-based compensation expense on a straight-line basis over the related service periods. For the three and six months ended June 30, 2014, share-based compensation expense relating to all common stock issued for consulting services was $240,000, compared with $1,000 and $21,000 for the same periods in 2013, respectively.
Income Tax, Policy [Policy Text Block]	'
	Income Taxes

	We have recorded a full valuation allowance against our otherwise recognizable deferred tax assets as of June 30, 2014. As such, we have not recorded a provision for income tax for the period ended June 30, 2014. We utilize the liability method of accounting for income taxes as set forth in ASC 740, Income Taxes. Under the liability method, deferred taxes are determined based on the temporary differences between the financial statement and tax basis of assets and liabilities using tax rates expected to be in effect during the years in which the basis differences reverse. A valuation allowance is recorded when it is more likely than not that some of the deferred tax assets will not be realized. In determining the need for valuation allowances, we consider projected future taxable income and the availability of tax planning strategies. After evaluating all positive and negative historical and perspective evidences, management has determined it is more likely than not that our deferred tax assets will not be realized.

	We assess our income tax positions and record tax benefits for all years subject to examination based upon our evaluation of the facts, circumstances and information available at the reporting date. For those tax positions where there is a greater than 50% likelihood that a tax benefit will be sustained, we have recorded the largest amount of tax benefit that may potentially be realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where there is less than 50% likelihood that a tax benefit will be sustained, no tax benefit has been recognized in the financial statements. Based on management's assessment of the facts, circumstances and information available, management has determined that all of the tax benefits for the period ended June 30, 2014 should be realized.
Fair Value of Financial Instruments, Policy [Policy Text Block]	'
	Fair Value Measurements

	Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities recorded at fair value in the condensed consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure fair value. The fair value hierarchy distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level I) and the lowest priority to unobservable inputs (Level III). The three levels of the fair value hierarchy are described below:

	Level Input:	Input Definition:
	Level I	Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets at the measurement date.
	Level II	Inputs, other than quoted prices included in Level I, that are observable for the asset or liability through corroboration with market data at the measurement date.
	Level III	Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date.

	The following table summarizes fair value measurements by level at June 30, 2014 for assets and liabilities measured at fair value:

		2014

	(Dollars in thousands)	Level I			Level II			Level III		Total
	Certificates of deposit	$	122		$	-		$	-	$	122
	Total assets	$	122		$	-		$	-	$	122

	Warrant liabilities	$	-		$	-		$	41,920	$	41,920
	Total liabilities	$	-		$	-		$	41,920	$	41,920

	Financial instruments classified as Level III in the fair value hierarchy as of June 30, 2014, represent our liabilities measured at market value on a recurring basis which include warrant liabilities resulting from recent debt and equity financings. In accordance with current accounting rules, the warrant liabilities are being marked-to-market each quarter-end until they are completely settled. The warrants are valued using the Black-Scholes option-pricing model, using both observable and unobservable inputs and assumptions consistent with those used in our estimate of fair value of employee stock options. See Warrant Liabilities below.

	The following table summarizes our fair value measurements using significant Level III inputs, and changes therein, for the three and six months ended June 30, 2014:

		Level III
		Warrant
	(Dollars in thousands)	Liabilities
	Balance as of December 31, 2013	$	16,347
	Issuance of warrants		2,310
	Change in fair value		(5,101	)
	Balance as of March 31, 2014	$	13,556
	Issuance (exercise) of warrants, net		2,871
	Change in fair value		25,493
	Balance as of June 30, 2014	$	41,920

	Intangible Assets

	As of June 30, 2014, the gross and net carrying amounts of intangible assets that are subject to amortization are as follows:

		Gross								Amortization
		Carrying			Accumulated			Net		Period
	(In thousands)	Amount			Amortization			Balance		(in years)
	Intellectual property	$	519		$	(410	)	$	109		7

	During the three and six months ended June 30, 2014, we did not acquire any new intangible assets and at June 30, 2014, all of our intangible assets consisted of intellectual property, which is not subject to renewal or extension. We had no intangible impairment for the three and six months ended June 30, 2014 or 2013.

	Additionally, it is important to note that our overall business model, business operations and future prospects of our business have not changed materially since we performed the reviews and analysis noted above, with the exception of the timing, and annualized amounts of expected revenue.

	Estimated remaining amortization expense for intangible assets for the current year and each of the next five years ending December 31 is as follows:

	(In thousands)
	Year	Amount
	2014 (6 months)	$	8
	2015	$	16
	2016	$	16
	2017	$	16
	2018	$	16

	Property and Equipment

	Property and equipment are stated at cost, less accumulated depreciation. Additions and improvements to property and equipment are capitalized at cost. Expenditures for maintenance and repairs are charged to expense as incurred. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets, which range from two to seven years for furniture and equipment. Leasehold improvements are amortized over the lesser of the estimated useful lives of the assets or the related lease term, which is typically five to seven years.

	Warrant
Goodwill and Intangible Assets, Policy [Policy Text Block]	'
	Intangible Assets

	As of June 30, 2014, the gross and net carrying amounts of intangible assets that are subject to amortization are as follows:

		Gross								Amortization
		Carrying			Accumulated			Net		Period
	(In thousands)	Amount			Amortization			Balance		(in years)
	Intellectual property	$	519		$	(410	)	$	109		7

	During the three and six months ended June 30, 2014, we did not acquire any new intangible assets and at June 30, 2014, all of our intangible assets consisted of intellectual property, which is not subject to renewal or extension. We had no intangible impairment for the three and six months ended June 30, 2014 or 2013.

	Additionally, it is important to note that our overall business model, business operations and future prospects of our business have not changed materially since we performed the reviews and analysis noted above, with the exception of the timing, and annualized amounts of expected revenue.

	Estimated remaining amortization expense for intangible assets for the current year and each of the next five years ending December 31 is as follows:

	(In thousands)
	Year	Amount
	2014 (6 months)	$	8
	2015	$	16
	2016	$	16
	2017	$	16
	2018	$	16
Derivatives, Policy [Policy Text Block]	'
	Warrant Liabilities

	In May 2014, we entered into the May Agreements with several investors relating to the sale and issuance of an aggregate of 2,586,210 shares of common stock and warrants to purchase an aggregate of 2,586,210 shares of common stock at an exercise price of $0.58 per share for aggregate gross proceeds of approximately $1.5 million. The May Agreements provide that in the event that we effectuate a Reverse Split and the VWAP period declines from the closing price on the trading date immediately prior to the effective date of the Reverse Split, that we shall issue the Adjustment Shares to the investors.

	The May Warrants expire in May 2019, and contain anti-dilution provisions. As a result, if we, in the future, issue or grant any rights to purchase any of our common stock, or other securities convertible into our common stock, for a per share price less than the exercise price of the May Warrants, the exercise price of the May Warrants will be reduced to such lower price, subject to customary exceptions. In the event that Adjustment Shares are issued, the number of shares that may be purchased under the May Warrants shall be increased by an amount equal to the Adjustment Shares. In addition, the exercise price is subject to adjustment in the event that the VWAP during the VWAP period is less than the exercise price prior to the VWAP Period.

	In January 2014, we entered into the January Agreements with several investors relating to the sale and issuance of an aggregate of 1,724,141 shares of common stock and warrants to purchase an aggregate of 1,724,141 shares of common stock at an exercise price of $0.58 per share for aggregate gross proceeds of approximately $1.0 million. The January Agreements provide that in the event that we effectuate a Reverse Split and the VWAP period declines from the closing price on the trading date immediately prior to the effective date of the Reverse Split, that we shall issue the Adjustment Shares to the investors.

	The January Warrants expire in January 2019, and contain anti-dilution provisions. As a result, if we, in the future, issue or grant any rights to purchase any of our common stock, or other securities convertible into our common stock, for a per share price less than the exercise price of the January Warrants, the exercise price of the January Warrants will be reduced to such lower price, subject to customary exceptions. In the event that Adjustment Shares are issued, the number of shares that may be purchased under the January Warrants shall be increased by an amount equal to the Adjustment Shares. In addition, the exercise price is subject to adjustment in the event that the VWAP during the VWAP period is less than the exercise price prior to the VWAP Period.

	We have issued warrants to purchase common stock in July 2010, October 2010, November 2010, December 2011, February 2012, April 2012, May 2012, September 2012, December 2012, April 2013, October 2013, January 2014, May 2014, and when we amended and restated the Highbridge senior secured note in July 2008. The warrants are being accounted for as liabilities in accordance with FASB accounting rules, due to provisions in some warrants that protect the holders from declines in our stock price and a requirement to deliver registered shares upon exercise of the warrants, which is considered outside our control. The warrants are marked-to-market each reporting period, using the Black-Scholes pricing model, until they are completely settled or expire.

	For the three and six months ended June 30, 2014, we recognized a loss of $25 million and $20 million, respectively, compared with a non-operating loss of $4.0 million and a non-operating gain of $376,000 for the same periods in 2013, respectively, related to the revaluation of our warrant liabilities.
New Accounting Pronouncements, Policy [Policy Text Block]	'
	Recently Issued or Newly Adopted Accounting Standards

	In July 2013, the FASB issued ASU 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists, (“ASU 2013-11”), which eliminates diversity in practice for the presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss or a tax credit carryforward is available to reduce the taxable income or tax payable that would result from disallowance of a tax position. ASU 2013-11 affects only the presentation of such amounts in an entity’s balance sheet and is effective for fiscal years beginning after December 15, 2013 and interim periods within those years. The adoption of ASU 2013-11 did not have a material effect on our consolidated financial position or results of operations.

Note_2_Summary_of_Significant_1

Note 2 - Summary of Significant Accounting Policies (Tables)	6 Months Ended
	Jun. 30, 2014
Note 2 - Summary of Significant Accounting Policies (Tables) [Line Items]	'
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]	'
					Weighted Avg.
		Shares			Exercise Price
	Balance December 31, 2013		21,000		$	28.4

	Granted		-		$	-
	Cancelled		-		$	-

	Balance March 31, 2014		21,000		$	28.4

	Granted		-		$	-
	Cancelled		-		$	-

	Balance June 30, 2014		21,000		$	28.4
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]	'
		2014

	(Dollars in thousands)	Level I			Level II			Level III		Total
	Certificates of deposit	$	122		$	-		$	-	$	122
	Total assets	$	122		$	-		$	-	$	122

	Warrant liabilities	$	-		$	-		$	41,920	$	41,920
	Total liabilities	$	-		$	-		$	41,920	$	41,920
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]	'
		Level III
		Warrant
	(Dollars in thousands)	Liabilities
	Balance as of December 31, 2013	$	16,347
	Issuance of warrants		2,310
	Change in fair value		(5,101	)
	Balance as of March 31, 2014	$	13,556
	Issuance (exercise) of warrants, net		2,871
	Change in fair value		25,493
	Balance as of June 30, 2014	$	41,920
Schedule of Finite-Lived Intangible Assets [Table Text Block]	'
		Gross								Amortization
		Carrying			Accumulated			Net		Period
	(In thousands)	Amount			Amortization			Balance		(in years)
	Intellectual property	$	519		$	(410	)	$	109		7
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block]	'
	(In thousands)
	Year	Amount
	2014 (6 months)	$	8
	2015	$	16
	2016	$	16
	2017	$	16
	2018	$	16
Employees and Directors [Member]	'
Note 2 - Summary of Significant Accounting Policies (Tables) [Line Items]	'
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]	'
					Weighted Avg.
		Shares			Exercise Price
	Balance December 31, 2013		461,000		$	19.69

	Granted		-		$	-
	Cancelled		-		$	-

	Balance March 31, 2014		461,000		$	19.69

	Granted		-		$	-
	Cancelled		(83,000	)	$	20.15

	Balance June 30, 2014		378,000		$	19.59

Note_3_Discontinued_Operations1

Note 3 - Discontinued Operations (Tables) (License and Management Services [Member])	6 Months Ended
	Jun. 30, 2014
Income Statement Items [Member]	'
Note 3 - Discontinued Operations (Tables) [Line Items]	'
Schedule of Disposal Groups, Including Discontinued Operations, Income Statement, Balance Sheet and Additional Disclosures [Table Text Block]	'
		Three months ended						Six months ended
		June 30,						June 30,
		(unaudited)						(unaudited)
	(in thousands)	2014			2013			2014			2013

	Revenues	$	6		$	26		$	25		$	62

	Expenses
	Cost of license and management services	$	(13	)	$	55		$	55		$	115
	General and administrative expenses
	Salaries and benefits		-			119			96			244
	Other expenses		11			61			83			118
	Depreciation and amortization		-			37			4			78
	Total expenses	$	(2	)	$	272		$	238		$	555

	Gain (loss) from discontinued operations	$	8		$	(246	)	$	(213	)	$	(493	)
Balance Sheet Items [Member]	'
Note 3 - Discontinued Operations (Tables) [Line Items]	'
Schedule of Disposal Groups, Including Discontinued Operations, Income Statement, Balance Sheet and Additional Disclosures [Table Text Block]	'
					(audited)
		30-Jun			December 31,
	(in thousands)	2014			2013
	Cash and cash equivalents	$	1		$	24
	Receivables, net		-			24
	Total assets	$	1		$	48

	Accounts payable		-			25
	Intercompany Payable		20			13,119
	Total liabilities	$	20		$	13,144

	Net assets (liabilities) of discontinued operations	$	(19	)	$	(13,096	)

Note_1_Basis_of_Consolidation_1

Note 1 - Basis of Consolidation, Presentation and Going Concern (Details) (USD $)	1 Months Ended		6 Months Ended
	31-May-14	Jan. 31, 2014	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013	Dec. 31, 2012
Disclosure Text Block [Abstract]	'	'	'	'	'	'
Cash and Cash Equivalents, at Carrying Value	'	'	$1,141,000	$1,624,000	$1,136,000	$3,153,000
Working Capital Deficit	'	'	1,500,000	'	'	'
Proceeds from Issuance or Sale of Equity	1,500,000	1,000,000	'	'	'	'
Net Cash Provided by (Used in) Operating Activities, Continuing Operations	'	'	($2,607,000)	($2,652,000)	'	'

Note_2_Summary_of_Significant_2

Note 2 - Summary of Significant Accounting Policies (Details) (USD $)

1 Months Ended

3 Months Ended

6 Months Ended

3 Months Ended

6 Months Ended

3 Months Ended

6 Months Ended

3 Months Ended

6 Months Ended

0 Months Ended

6 Months Ended

1 Months Ended

6 Months Ended

31-May-14

Jan. 31, 2014

Jun. 30, 2014

Jun. 30, 2013

Jun. 30, 2014

Jun. 30, 2013

Jun. 30, 2014

Jun. 30, 2013

Jun. 30, 2014

Jun. 30, 2013

Jun. 30, 2014

Jun. 30, 2013

Jun. 30, 2014

Jun. 30, 2013

Jun. 30, 2014

Jun. 30, 2013

Jun. 30, 2014

Jun. 30, 2013

Jun. 30, 2014

31-May-14

Jun. 30, 2014

Consulting Services [Member]

Furniture and Equipment [Member]

Leasehold Improvements [Member]

Employees and Directors [Member]

Nonemployees [Member]

2010 Stock Incentive Plan [Member]

May Agreements [Member]

Revenue [Member]

Account Receivable [Member]

Minimum [Member]

Maximum [Member]

Minimum [Member]

Maximum [Member]

Minimum [Member]

Maximum [Member]

2010 Stock Incentive Plan [Member]

Note 2 - Summary of Significant Accounting Policies (Details) [Line Items]

Cash and Cash Equivalents Uninsured Amount

$921,000

Concentration Risk, Percentage

88.00%

74.00%

Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in Shares)

22,439,683

13,768,381

22,439,683

13,768,381

Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized (in Shares)

1,825,000

Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period

'10 years

Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period

'3 years

'5 years

Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding, Number (in Shares)

377,815

Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant (in Shares)

1,389,948

Allocated Share-based Compensation Expense

13,000

49,000

26,000

117,000

11,000

47,000

23,000

94,000

Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in Shares)

Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized

21,000

Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition

'208 days

Issuance of Stock and Warrants for Services or Claims

2,000

1,000

3,000

21,000

240,000

1,000

240,000

21,000

Stock Issued During Period, Shares, New Issues (in Shares)

1,724,141

2,586,210

Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in Shares)

1,724,141

2,586,210

Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share)

$0.58

Proceeds from Issuance or Sale of Equity

1,500,000

1,000,000

1,500,000

Stock Issued During Period, Shares, Issued for Services (in Shares)

200,000

Finite-lived Intangible Assets Acquired

Impairment of Intangible Assets, Finite-lived

Property, Plant and Equipment, Useful Life

'2 years

'7 years

'5 years

'7 years

Increase (Decrease) in Derivative Liabilities

$25,493,000

$3,984,000

$20,392,000

($376,000)

Note_2_Summary_of_Significant_3

Note 2 - Summary of Significant Accounting Policies (Details) - Employee and Director Stock Option Activity (Employees and Directors [Member], USD $)	3 Months Ended
	Jun. 30, 2014	Mar. 31, 2014	Dec. 30, 2013
Employees and Directors [Member]	'	'	'
Note 2 - Summary of Significant Accounting Policies (Details) - Employee and Director Stock Option Activity [Line Items]	'	'	'
Shares	461,000	'	461,000
Weighted Average Exercise Price	$19.69	'	$19.69
Shares Granted	0	0	'
Weighted Average Exercise Price, Shares Granted	$0	$0	'
Shares Cancelled	-83,000	0	'
Weighted Average Exercise Price, Shares Cancelled	$20.15	$0	'
Shares	378,000	461,000	461,000
Weighted Average Exercise Price	$19.59	$19.69	$19.69

Note_2_Summary_of_Significant_4

Note 2 - Summary of Significant Accounting Policies (Details) - Non-Employee Stock Option Activity (Nonemployees [Member], USD $)	3 Months Ended
	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013	Dec. 30, 2013
Nonemployees [Member]	'	'	'	'
Note 2 - Summary of Significant Accounting Policies (Details) - Non-Employee Stock Option Activity [Line Items]	'	'	'	'
Shares	21,000	'	'	21,000
Weighted Average Exercise Price	$28.40	$28.40	$28.40	'
Shares, Granted	0	0	'	'
Weighted Average Exercise Price, Shares Granted	$0	$0	'	'
Shares, Cancelled	0	0	'	'
Weighted Average Exercise Price, Shares Cancelled	$0	$0	'	'
Shares	21,000	21,000	'	21,000

Note_2_Summary_of_Significant_5

Note 2 - Summary of Significant Accounting Policies (Details) - Summary of Fair Value Measuremnet for Assets and Liabilities (USD $)	Jun. 30, 2014
In Thousands, unless otherwise specified	Jun. 30, 2014
Note 2 - Summary of Significant Accounting Policies (Details) - Summary of Fair Value Measuremnet for Assets and Liabilities [Line Items]	'
Certificates of deposit	$122
Total assets	122
Warrant liabilities	41,920
Total liabilities	41,920
Fair Value, Inputs, Level 1 [Member]	'
Note 2 - Summary of Significant Accounting Policies (Details) - Summary of Fair Value Measuremnet for Assets and Liabilities [Line Items]	'
Certificates of deposit	122
Total assets	122
Fair Value, Inputs, Level 3 [Member]	'
Note 2 - Summary of Significant Accounting Policies (Details) - Summary of Fair Value Measuremnet for Assets and Liabilities [Line Items]	'
Warrant liabilities	41,920
Total liabilities	$41,920

Note_2_Summary_of_Significant_6

Note 2 - Summary of Significant Accounting Policies (Details) - Fair Value Measurements Using Significant Level III Inputs (USD $)	3 Months Ended
In Thousands, unless otherwise specified	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013
Fair Value Measurements Using Significant Level III Inputs [Abstract]	'	'	'
Balance	$41,920	$13,556	$16,347
Net Purchases (sales)	2,871	2,310	'
Change in Fair Value	$25,493	($5,101)	'

Note_2_Summary_of_Significant_7

Note 2 - Summary of Significant Accounting Policies (Details) - Gross and Net Carrying Amounts of Intangible Assets Subject to Amortization (USD $)	6 Months Ended
In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Gross and Net Carrying Amounts of Intangible Assets Subject to Amortization [Abstract]	'	'
Intellectual property	$519	'
Intellectual property	-410	-401
Intellectual property	$109	$118
Intellectual property	'7 years	'

Note_2_Summary_of_Significant_8

Note 2 - Summary of Significant Accounting Policies (Details) - Estimated Remaining Amortization Expense for Intangible Assets (USD $)	Jun. 30, 2014
In Thousands, unless otherwise specified	Jun. 30, 2014
Estimated Remaining Amortization Expense for Intangible Assets [Abstract]	'
2014 (6 months)	$8
2015	16
2016	16
2017	16
2018	$16

Note_3_Discontinued_Operations2

Note 3 - Discontinued Operations (Details) - Revenues and Expenses of Discontinued Operations, License and Management Services (Unaudited) (USD $)	3 Months Ended		6 Months Ended
In Thousands, unless otherwise specified	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
General and administrative expenses	'	'	'	'
Gain (loss) from discontinued operations	$8	($246)	($213)	($493)
Salaries and Benefits [Member] \| License and Management Services [Member]	'	'	'	'
General and administrative expenses	'	'	'	'
General and administrative expenses	'	119	96	244
Other General and Administrative Expense [Member] \| License and Management Services [Member]	'	'	'	'
General and administrative expenses	'	'	'	'
General and administrative expenses	11	61	83	118
License and Management Services [Member]	'	'	'	'
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]	'	'	'	'
Revenues	6	26	25	62
Expenses	'	'	'	'
Cost of license and management services	-13	55	55	115
General and administrative expenses	'	'	'	'
Depreciation and amortization	'	37	4	78
Total expenses	-2	272	238	555
Gain (loss) from discontinued operations	$8	($246)	($213)	($493)

Note_3_Discontinued_Operations3

Note 3 - Discontinued Operations (Details) - Assets and Liabilities of Discontinued Operations (Current Period Unaudited) (License and Management Services [Member], USD $)	Jun. 30, 2014	Dec. 31, 2013
In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]	'	'
Cash and cash equivalents	$1	$24
Receivables, net	'	24
Total assets	1	48
Accounts payable	'	25
Total liabilities	20	13,144
Net assets (liabilities) of discontinued operations	-19	-13,096
Intercompany [Member]	'	'
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]	'	'
Intercompany Payable	$20	$13,119

Note_4_Related_Party_Disclosur1

Note 4 - Related Party Disclosure (Details) (USD $)	1 Months Ended		36 Months Ended	1 Months Ended	6 Months Ended	12 Months Ended	42 Months Ended	6 Months Ended	1 Months Ended
	31-May-14	Jan. 31, 2014	Dec. 31, 2013	Dec. 31, 2010	Jun. 30, 2014	Dec. 31, 2013	Jun. 30, 2014	Jun. 30, 2014	31-May-14
			Chief Executive Officer [Member]	Chief Executive Officer [Member]	Chief Executive Officer [Member]	Chief Executive Officer [Member]	Chief Executive Officer [Member]	Crede [Member]	Shamus [Member]
			Per Month [Member]				Payments Received On Related Party Receivables [Member]	January 2014 [Member]
Note 4 - Related Party Disclosure (Details) [Line Items]	'	'	'	'	'	'	'	'	'
Operating Lease Term	'	'	'	'3 years	'	'	'	'	'
Operating Leases, Rent Expense	'	'	$11,000	'	'	'	'	'	'
Accounts Receivable, Related Parties	'	'	'	'	0	115,000	'	'	'
Increase (Decrease) in Due to Related Parties	'	'	'	'	0	186,000	'	'	'
Related Party Transaction, Amounts of Transaction	'	'	'	'	'	'	382,000	'	'
Stock Issued During Period, Shares, New Issues (in Shares)	'	1,724,141	'	'	'	'	'	3,662,932	344,828
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in Shares)	'	1,724,141	'	'	'	'	'	3,662,932	344,828
Class of Warrant or Right, Exercise Price of Warrants or Rights (in Dollars per share)	'	$0.58	'	'	'	'	'	$0.58	$0.58
Proceeds from Issuance or Sale of Equity	$1,500,000	$1,000,000	'	'	'	'	'	$2,100,000	$200,000

Note_5_Other_IncomeWriteoff_of1

Note 5 - Other Income/Write-off of Liabilities (Details) (USD $)	6 Months Ended	3 Months Ended
In Thousands, unless otherwise specified	Jun. 30, 2014	Jun. 30, 2014
	Jun. 30, 2014	Research Contract [Member]
Note 5 - Other Income/Write-off of Liabilities (Details) [Line Items]	'	'
	$1,194	$1,100