Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Nov. 11, 2016 | |
Document And Entity Information | ||
Entity Registrant Name | ATOSSA GENETICS INC | |
Entity Central Index Key | 1,488,039 | |
Document Type | 10-Q/A | |
Trading Symbol | ATOS | |
Document Period End Date | Sep. 30, 2016 | |
Amendment Flag | true | |
Amendment Description | EXPLANATORY NOTE This Amendment No. 1 to the Quarterly Report on Form 10-Q (the “Amended Form 10-Q”) of Atossa Genetics Inc. (the “Company”) amends the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2016, filed with the Securities and Exchange Commission on November 14, 2016 (the “Original Form 10-Q”) to correct an inadvertent error in the weighted average shares outstanding in the financial statements for the three and nine months ended September 30, 2016. The Company incorrectly stated the weighted average number of shares outstanding – basic and diluted for the three months ended September 30, 2016 as 2,799,082, rather than the correct number of 3,024,393, and for the nine months ended September 30, 2016 as 2,240,869 rather than the correct number of 2,665,904. The Company also incorrectly stated the loss per common share from continuing operations - basic and diluted and loss per common share – basic and diluted, for the nine months ended September 30, 2016 as $(1.72) rather than the correct amount of $(1.44). As a result, the following items in the original filing have been amended: Part I, Item 1. Financial Statements, Condensed Consolidated Statements of Operations (unaudited); Part I, Item 1. Financial Statements, Condensed Consolidated Statements of Operations (unaudited) Note 10 – Net Loss Per shares; and Part I, Item 4. Controls and Procedures. In accordance with applicable generally accepted accounting principles, the Company has calculated and recognized adjustments accordingly. The following table shows the effect of the restatement on the Company’s financial statements for the three and nine months ended September 30, 2016: For the Three Months Ended For the Nine Months Ended Previously Reported Restated Previously Reported Restated Weighted average common shares outstanding used to compute income (loss) per share, basic and diluted 2,799,082 3,024,393 2,240,869 2,665,904 Income (loss) per common share from continuing operations, basic and diluted $ 0.07 $ 0.07 $ (1.72 ) $ (1.44 ) Except as specifically noted above, this Form 10-Q/A does not modify or update the Original 10-Q or modify or update any related or other disclosures as originally filed, other than as required to reflect the effects of the amendment discussed above. Management has discussed these matters set forth above with the Company’s independent registered public accounting firm. On March 20, 2017, the Company’s Chief Financial Officer concluded that the financial statements and other financial data at and for the three and nine months ended September 30, 2016, as reported in the Original Form 10-Q, should not be relied upon because of the error described above which has been corrected in the Amended Form 10-Q. Additionally, investors, analysts and other persons should not rely upon any press releases, investor presentations or other communications that relate to that information. | |
Current Fiscal Year End Date | --12-31 | |
Entity a Well-known Seasoned Issuer | No | |
Entity a Voluntary Filer | No | |
Entity's Reporting Status Current | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 3,787,967 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,016 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Current assets | ||
Cash and cash equivalents | $ 4,388,177 | $ 3,715,895 |
Restricted cash | 55,000 | 275,000 |
Prepaid expense | 120,751 | 193,293 |
Other current assets | 110,663 | |
Total current assets | 4,563,928 | 4,294,851 |
Furniture and equipment, net | 84,537 | 171,568 |
Intangible assets, net | 1,401,899 | 1,700,565 |
Other assets | 227,877 | 76,337 |
Total assets | 6,278,241 | 6,243,321 |
Current liabilities | ||
Accounts payable | 197,354 | 814,448 |
Accrued expenses | 12,480 | 463,676 |
Payroll liabilities | 635,047 | 1,159,335 |
Other current liabilities | 18,886 | 64,128 |
Total current liabilities | 863,767 | 2,501,587 |
Stockholders' equity | ||
Preferred stock - $.001 par value; 10,000,000 shares authorized, 0 shares issued and outstanding | ||
Common stock - $.015 par value; 75,000,000 shares authorized, 3,787,967 and 2,177,151 shares issued and outstanding | 56,820 | 32,657 |
Additional paid-in capital | 60,137,752 | 54,643,940 |
Accumulated deficit | (54,780,098) | (50,934,863) |
Total stockholders' equity | 5,414,474 | 3,741,734 |
Total liabilities and stockholders' equity | $ 6,278,241 | $ 6,243,321 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, authorized | 10,000,000 | 10,000,000 |
Preferred stock, issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.015 | $ 0.015 |
Common stock, authorized | 75,000,000 | 75,000,000 |
Common stock, issued | 3,787,967 | 2,177,151 |
Common stock, outstanding | 3,787,967 | 2,177,151 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Income Statement [Abstract] | ||||
Net revenue | ||||
Operating expenses: | ||||
Selling | 498,609 | 1,187,777 | ||
Research and development | 85,000 | 948,961 | 403,963 | 1,888,236 |
General and administrative | 1,473,435 | 2,395,089 | 5,040,939 | 7,208,508 |
Total operating expenses | 1,558,435 | 3,842,659 | 5,444,902 | 10,284,521 |
Operating loss | (1,558,435) | (3,842,659) | (5,444,902) | (10,284,521) |
Other income, net | 1,763,124 | 69,350 | 1,599,667 | 116,108 |
Income (Loss) before income taxes | 204,689 | (3,773,309) | (3,845,235) | (10,168,413) |
Income taxes | ||||
Income (Loss) from continuing operations | 204,689 | (3,773,309) | (3,845,235) | (10,168,413) |
Loss from discontinued operations | (544,802) | (630,314) | ||
Net income (loss) | $ 204,689 | $ (4,318,111) | $ (3,845,235) | $ (10,798,727) |
Income (Loss) per common share from continuing operations - basic and diluted (in dollars per share) | $ 0.07 | $ (2.04) | $ (1.44) | $ (5.91) |
Loss per common share from discontinued operations - basic and diluted (in dollars per share) | $ (0.30) | $ (0.37) | ||
Weighted average shares outstanding, basic & diluted | 3,024,393 | 1,845,747 | 2,665,904 | 1,720,353 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (UNAUDITED) - 9 months ended Sep. 30, 2016 - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at beginning at Dec. 31, 2015 | $ 32,657 | $ 54,643,940 | $ (50,934,863) | $ 3,741,734 |
Balance at beginning (in shares) at Dec. 31, 2015 | 2,177,151 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Issuance of common shares and warrants net of issuance costs of $356,214 for the September 30, 2016 respectively) | $ 23,417 | 4,672,452 | 4,695,869 | |
Issuance of common shares and warrants net of issuance costs of $356,214 for the September 30, 2016 respectively) (in shares) | 1,561,080 | |||
Issuance of common shares as commitment fees | $ 746 | 197,777 | 198,523 | |
Issuance of common shares as commitment fees (in shares) | 49,736 | |||
Amortization of commitment shares | (26,470) | (26,470) | ||
Compensation cost for stock options granted to executives and employees | 650,053 | 650,053 | ||
Net loss | (3,845,235) | (3,845,235) | ||
Balance at end at Sep. 30, 2016 | $ 56,820 | $ 60,137,752 | $ (54,780,098) | $ 5,414,474 |
Balance at end (in shares) at Sep. 30, 2016 | 3,787,967 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (UNAUDITED) (Parenthetical) - USD ($) | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Statement of Stockholders' Equity [Abstract] | ||
Payments of stock issuance costs | $ 356,214 | $ 577,790 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (3,845,235) | $ (10,798,727) |
Net loss from discontinued operations | 630,314 | |
Compensation cost for stock options granted | 650,053 | 633,962 |
Loss (gain) on disposal of intangible asset | 163,333 | (74,800) |
Depreciation and amortization | 227,387 | 168,264 |
Changes in operating assets and liabilities: | ||
Change in restricted cash | 220,000 | (275,000) |
Inventory | (78,265) | |
Prepaid expenses | 72,542 | 72,723 |
Other assets | 131,176 | (4,456) |
Accounts payable | (617,094) | 408,081 |
Payroll liabilities | (524,288) | 62,772 |
Deferred rent | 11,298 | |
Accrued expenses | (451,196) | (1,000,662) |
Other current liabilities | (45,242) | (27,720) |
Net cash used in continuing operating activities | (4,018,564) | (10,272,216) |
Net cash provided by discontinued operating activities | 272,344 | |
Net cash used in operating activities | (4,018,564) | (9,999,872) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchase of furniture and equipment | (5,023) | (51,395) |
Purchase of intangible assets | (15,553) | |
Net cash used in continuing investing activities | (5,023) | (66,948) |
Net cash used in discontinued investing activities | (43,801) | |
Net cash used in investing activities | (5,023) | (110,749) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Net proceeds from issuance of common stock and warrants, net of issuance costs of $356,214 and $577,790, respectively | 4,695,869 | 9,498,557 |
Payments on capital lease obligations | (49,215) | |
Net cash provided by financing activities | 4,695,869 | 9,449,342 |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 672,282 | (661,279) |
CASH AND CASH EQUIVALENTS, BEGINNING BALANCE | 3,715,895 | 8,500,718 |
CASH AND CASH EQUIVALENTS, ENDING BALANCE | 4,388,177 | 7,839,439 |
SUPPLEMENTAL DISCLOSURES: | ||
Interest paid | 1,304 | 3,311 |
NONCASH INVESTING AND FINANCING ACTIVITIES: | ||
Common stock issued as commitment fee under stock purchase agreement | 198,523 | |
Amortization of commitment shares | $ 26,470 | $ 392,711 |
CONSOLIDATED STATEMENTS OF CAS8
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Parenthetical) - USD ($) | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Statement of Cash Flows [Abstract] | ||
Payments of Stock Issuance Costs | $ 356,214 | $ 577,790 |
NATURE OF OPERATIONS
NATURE OF OPERATIONS | 9 Months Ended |
Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF OPERATIONS | NOTE 1: NATURE OF OPERATIONS Atossa Genetics Inc. (the “Company”) was incorporated on April 30, 2009 in the State of Delaware. The Company was formed to develop and market medical devices, laboratory tests and therapeutics to address breast health conditions. The Company’s fiscal year ends on December 31. In December 2011, the Company established the National Reference Laboratory for Breast Health, Inc., or NRLBH, as a wholly-owned subsidiary. NRLBH was the Company’s CLIA-certified laboratory which performed the Company’s nipple aspirate fluid, or NAF, cytology test on NAF specimens including those collected with the Company’s Mammary Aspiration Specimen Cytology Test (MASCT) System. The current version of the MASCT System is called the ForeCYTE Breast Aspirator. The NRLBH provides other test services, including pharmacogenomics tests. On December 16, 2015, the Company sold approximately 81% of the capital stock of the NRLBH to the NRL Investment Group, LLC, with the Company retaining a 19% ownership through preferred stock. The Company received $50,000 at the time of the sale and the right to receive, commencing December 2016, monthly earn-out payments equal to 6% of gross revenue of NRLBH up to $10,000,000, and the right to sell its preferred stock after four years for the greater of $4,000,000 or fair market value. The Company has elected to recognize any subsequent gain from the earn-out payments as they are determined realizable. As a result of the sale of the laboratory business, the Company is now focusing on development of its pharmaceutical programs. |
GOING CONCERN
GOING CONCERN | 9 Months Ended |
Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
GOING CONCERN | NOTE 2: GOING CONCERN The Company’s consolidated financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred net losses and negative operating cash flows since inception. For the nine months ended September 30, 2016, the Company recorded a net loss of approximately $3.8 million and used approximately $4.0 million of cash in operating activities. As of September 30, 2016, the Company had approximately $4.4 million in cash and cash equivalents and working capital of approximately $3.7 million. The Company has not yet established an ongoing source of revenue sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. The Company can give no assurances that any additional capital that it is able to obtain, if any, will be sufficient to meet its needs, or that any such capital will be obtained on acceptable terms. If the Company is unable to obtain adequate capital, it could be forced to cease operations or substantially curtail its activities. These conditions raise substantial doubt as to the Company’s ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities should the Company be unable to continue as a going concern. Management’s plan to continue as a going concern is as follows. In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plans to obtain such resources for the Company include obtaining capital from the sale of its equity securities and short-term borrowings from banks, stockholders or other related party(ies), if needed. However, management cannot provide any assurance that the Company will be successful in accomplishing any of its plans. The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually to secure other sources of financing and attain profitable operations. |
SUMMARY OF ACCOUNTING POLICIES
SUMMARY OF ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
SUMMARY OF ACCOUNTING POLICIES | NOTE 3: SUMMARY OF ACCOUNTING POLICIES Basis of Presentation: The accompanying consolidated financial statements have been prepared pursuant to the rules of the Securities and Exchange Commission (“SEC”) and in accordance with U.S. generally accepted accounting principles (“GAAP”). The accompanying consolidated financial statements include the financial statements of Atossa Genetics Inc. and its formerly wholly-owned subsidiary, NRLBH. The Company sold a majority of its interest in the NRLBH in December 2015 and all of its activities are reported as discontinued operations in the accompanying consolidated financial statements. All significant intercompany account balances and transactions have been eliminated in consolidation. Certain amounts from prior years have been reclassified to conform with the 2016 presentation. On August 26,2016, the Company completed a 1-for-15 reverse stock split of the shares of the Company’s common stock (the “Reverse Stock Split”). As a result of the Reverse Stock Split, every 15 shares of issued and outstanding common stock were combined into one issued and outstanding share of Common Stock, and the par value per share was changed to $.015 per share. No fractional shares were issued because of the Reverse Stock Split and any fractional shares that would otherwise have resulted from the Reverse Stock Split were paid in cash. As a result of the Reverse Stock Split, as of November 11, 2016, there are 3,787,967 shares of common stock outstanding. The number of authorized shares of common stock was not reduced as a result of the Reverse Stock Split. The Company’s common stock began trading on a reverse stock split-adjusted basis on August 26, 2016. All share and per share data included in this report has been retroactively restated to reflect the Reverse Stock Split. Use of Estimates: The preparation of financial statements in conformity with 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 expenses during the reporting period. Actual results could differ from those estimates. Recently Issued Accounting Pronouncements: In May 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers: Topic 606 In August 2014, FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. In February 2016, FASB issued ASU No. 2016-02, Lease Accounting Topic 842. In April 2016, the FASB issued ASU No. 2016-09, Stock Compensation Topic 718: Improvements to Employee Share-based Payment Accounting. |
PREPAID EXPENSES
PREPAID EXPENSES | 9 Months Ended |
Sep. 30, 2016 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Prepaid Expenses | NOTE 4: PREPAID EXPENSES Prepaid expenses consisted of the following: Se ptember 30, December 31, Prepaid insurance 38,538 104,954 Retainer and security deposits 39,218 39,218 Other 42,995 49,121 Total prepaid expenses $ 120,751 $ 193,293 |
FURNITURE AND EQUIPMENT
FURNITURE AND EQUIPMENT | 9 Months Ended |
Sep. 30, 2016 | |
Property, Plant and Equipment [Abstract] | |
FURNITURE AND EQUIPMENT | NOTE 5: FURNITURE AND EQUIPMENT Furniture and equipment consisted of the following: September 30, December 31, Machinery and equipment $ 206,336 $ 206,337 Leasehold improvements 84,539 79,518 Total furniture and equipment 290,875 285,855 Less: Accumulated depreciation (206,338 ) (114,287 ) Total furniture and equipment, net $ 84,537 $ 171,568 Depreciation expense for the three months ended September 30, 2016 and 2015 was $29,698 and $32,620, respectively, and $92,054 and $97,059, for the nine months ended September 30, 2016 and 2015, respectively. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | NOTE 6: INTANGIBLE ASSETS Intangible assets consisted of the following: September 30, December 31, 2016 2015 Patents $ 1,630,000 $ 1,630,000 Capitalized license costs - 200,000 Software 113,540 113,540 Intangible assets 1,743,540 1,943,540 Less: Accumulated amortization (341,641 ) (242,975 ) Total intangible assets, net $ 1,401,899 $ 1,700,565 Intangible assets amounted to $1,401,899 and $1,700,565 as of September 30, 2016 and December 31, 2015, respectively, and consisted of patents, capitalized license costs and software acquired. The amortization period for the purchased software is 3 years. Amortization expense related to software for the three months ended September 30, 2016 and 2015 was $7,857 and $11,261, respectively and $23,572 and $34,090 for the nine months ended September 30, 2016 and 2015, respectively. Patents amounted to $1,630,000 as of September 30, 2016 and December 31, 2015, and mainly consisted of patents acquired from Acueity on September 30, 2012 in an asset purchase transaction. Patent assets are amortized based on their determined useful life, and tested annually for impairment. The amortization period was from 7 to 12 years. Amortization expense related to patents was $37,253 for the three months ended September 30, 2016 and 2015, respectively and $111,761 for each of the nine months ended September 30, 2016 and 2015, respectively. Capitalized license costs consist of fees paid to A5 Genetics KFT, Corporation, pursuant to which the Company received the world-wide (other than the European Union) exclusive license to use the software in the NextCYTE test. As the Company shifted its focus to developing pharmaceutical products and discontinued NextCYTE test development, the A5 agreement was terminated in February 2016 and the entire net assets of $163,333, including $36,666 in accumulated amortization was written off. Future estimated amortization expenses as of September 30, 2016 for the five succeeding years is as follows: For the Year Ending December 31, Amounts 2016 (includes the remainder of the year) $ 42,489 2017 169,576 2018 149,623 2019 149,015 2020 149,015 Thereafter 742,181 $ 1,401,899 |
PAYROLL LIABILITIES
PAYROLL LIABILITIES | 9 Months Ended |
Sep. 30, 2016 | |
Payables and Accruals [Abstract] | |
PAYROLL LIABILITIES | NOTE 7: PAYROLL LIABILITIES: Payroll liabilities consisted of the following: S eptember 30, December 31, Accrued bonus payable $ 438,098 $ 555,345 Accrued payroll liabilities 96,248 510,179 Accrued vacation 100,701 93,811 Total payroll liabilities $ 635,047 $ 1,159,335 |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 9 Months Ended |
Sep. 30, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISCONTINUED OPERATIONS | NOTE 8: DISCONTINUED OPERATIONS On December 16, 2015, the Company entered into a Stock Purchase Agreement (the “Purchase Agreement”) with the NRLBH and NRL Investment Group, LLC (the “NRL Group”) pursuant to which the Company sold to the NRL Group all of its shares of common stock in the NRLBH as of that date. Under the terms of the Purchase Agreement, the Company retained its ownership of the Preferred Stock of the NRLBH, which constitutes approximately 19% of the outstanding capital stock of the NRLBH, and the Company will have the right to sell to the NRL Group on or after the fourth anniversary of the Purchase Agreement at the greater of $4,000,000 or fair market value. The Company has the right to receive earn-out payments from NRL Group starting in December 2016 up to a total of $10,000,000. The Earn-out Payments are payable to the Company each calendar month commencing with December 2016 and are equal to 6% of NRLBH gross sales calculated in accordance with U.S. Generally Accepted Accounting Principles. The operations of the NRLBH sold to the NRL Group were accounted for as discontinued operations as the operations and cash flows of the discontinued business were eliminated from ongoing operations of the Company and the Company has no significant involvement in the NRLBH’s operations after the disposal transaction. The results of the NRLBH were segregated from continuing operations and reflected as discontinued operations for the 2015 periods on the Company’s Consolidated Statements of Operations and cash flow for the three and six months ended September 30, 2015. The loss from discontinued operations related to the operations of the NRLBH for the three and nine months ended September 30, 2015 was as follows: Three Months Ended September 30, 2015 Nine Months Ended September 30, 2015 Revenue $ 772,591 $ 5,337,911 Cost of revenue (311,074 ) (3,365,901 ) Gross profit 461,517 1,972,010 Expenses: Selling expenses 239,427 829,174 Research and development expenses 141,388 509,796 General and administrative expenses 625,499 1,213,795 Other expenses, net 5 49,559 Net loss from discontinued operations $ (544,802 ) $ (630,314 ) |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 9 Months Ended |
Sep. 30, 2016 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | NOTE 9: STOCKHOLDERS’ EQUITY The Company is authorized to issue a total of 85,000,000 shares of stock consisting of 75,000,000 shares of Common Stock, par value $0.015 per share, and 10,000,000 shares of Preferred Stock, par value $0.001 per share. The Company has designated 750,000 shares of Series A Junior Participating Preferred Stock, par value $0.001 per share through the filing of certificate of designation with the Delaware Secretary of State. On May 19, 2014, the Company adopted a stockholder rights agreement which provides that all stockholders of record on May 26, 2014 received a non-taxable distribution of one preferred stock purchase right for each share of the Company’s common stock held by such stockholder. Each right is attached to and trades with the associated share of common stock. The rights will become exercisable only if one of the following occurs: (1) a person becomes an “Acquiring Person” by acquiring beneficial ownership of 15% or more of the Company’s common stock (or, in the case of a person who beneficially owned 15% or more of the Company’s common stock on the date the stockholder rights agreement was executed, by acquiring beneficial ownership of additional shares representing 2.0% of the Company’s common stock then outstanding (excluding compensatory arrangements)), or (2) a person commences a tender offer that, if consummated, would result in such person becoming an Acquiring Person. If a person becomes an Acquiring Person, each right will entitle the holder, other than the Acquiring Person and certain related parties, to purchase a number of shares of the Company’s common stock with a market value that equals twice the exercise price of the right. The initial exercise price of each right is $15.00, so each holder (other than the Acquiring Person and certain related parties) exercising a right would be entitled to receive $30.00 worth of the Company’s common stock. If the Company is acquired in a merger or similar business combination transaction at any time after a person has become an Acquiring Person, each holder of a right (other than the Acquiring Person and certain related parties) will be entitled to purchase a similar amount of stock of the acquiring entity. 2015 and 2016 Issuances of Additional Shares to Aspire Capital During the first quarter of 2015, we sold a total of 176,880 shares of common stock to Aspire Capital Fund, LLC (“Aspire Capital”) under the stock purchase agreement dated November 8, 2013 with aggregate gross proceeds to us of $4,292,349. No shares remain available for sale to Aspire Capital under the terms of the November 8, 2013 agreement with them. On May 26, 2015, we entered into a new common stock purchase agreement with Aspire Capital, which provided that, upon the terms and subject to the conditions and limitations set forth therein, Aspire Capital was committed to purchase up to an aggregate of $25.0 million of shares of our common stock over the 30-month term of the purchase agreement. Concurrently with entering into the purchase agreement, we also entered into a registration rights agreement with Aspire Capital, in which we agreed to file one or more registration statements, as permissible and necessary to register under the Securities Act of 1933, registering the sale of the shares of our common stock that have been and may be issued to Aspire Capital under the purchase agreement. On November 11, 2015, we terminated the May 26, 2015 agreement with Aspire Capital and entered into a new common stock purchase agreement. Concurrently with entering into the Purchase Agreement, we also entered into a registration rights agreement with Aspire Capital in which we agreed to register 405,747 shares of our common stock. During the first quarter of 2016, we sold a total of 405,747 shares of Common Stock to Aspire Capital Fund LLC under the stock purchase agreement dated November 11, 2015 with aggregate gross proceeds to the Company of $2,153,583. On May 25, 2016, we terminated the November 11, 2015 stock purchase agreement with Aspire Capital and entered into a new common stock purchase agreement with Aspire Capital which provided that, upon the terms and subject to the conditions and limitations set forth therein, Aspire Capital is committed to purchase up to an aggregate of $10.0 million of shares of our common stock over the 30-month term of the purchase agreement, subject to the terms and conditions set forth therein. Concurrently with entering into the purchase agreement, we also entered into a registration rights agreement with Aspire Capital, in which we agreed to file one or more registration statements, as permissible and necessary to register under the Securities Act of 1933, registering the sale of the shares of our common stock that have been and may be issued to Aspire Capital under the purchase agreement. As part of the stock purchase agreement we issued 49,736 common shares as a commitment fee. The value of the common shares issued as a commitment fee of $198,523 have been reflected as an addition to common stock of $746 and $197,777 in additional paid in capital which will be amortized over the life of the stock purchase agreement. As of the date of filing this Quarterly Report with the SEC no shares of stock have been sold to Aspire Capital under the May 25, 2016 purchase agreement. 2015 Offering of Common Stock and Pre-Funded Warrants In June 2015, the Company entered into a Placement Agent Agreement with Roth Capital Partners, LLC. and Dawson James Securities, Inc. (the “2015 Placement Agents”), pursuant to which the Company issued and sold an aggregate of 96,934 shares of common stock at the purchase price of $17.25 per share and pre-funded warrants to purchase 240,733 shares of common stock (the “Pre-Funded Warrants”) at a purchase price of $17.10 per share for net proceeds of $5.2 million after deducting $577,790 of offering expenses (the “2015 Offering”). Each Pre-Funded Warrant was exercisable for $0.15 per share and all of these warrants had been exercised as of December 31, 2015. 2016 Public Offering of Common Stock In August 2016, the Company completed an underwritten public offering of 1,150,000 shares of Common Stock at a price per share of $2.50, with gross proceeds of $2,875,000 to the Company, or proceeds of $2,645,000 after deducting underwriter discounts, commissions, non accountable expense allowance and expense reimbursement. Outstanding Warrants As of September 30, 2016, warrants to purchase 402,228 shares of common stock were outstanding including: Outstanding Exercise Price Expiration Date 2011 private placement 283,470 $ 18.75 - 24.00 May 18, 2018 Acueity warrants 21,667 75.00 September 30, 2017 2014 public offering 77,790 45.00 January 29, 2019 Placement agent fees for Company’s offerings 16,135 31.80 – 186.45 March - November, 2018 Outside consulting 3,166 $ 63.60 January 14, 2018 402,228 |
NET LOSS PER SHARE (RESTATED)
NET LOSS PER SHARE (RESTATED) | 9 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share [Abstract] | |
NET LOSS PER SHARE | NOTE 10: NET LOSS PER SHARE (RESTATED) The Company accounts for and discloses net loss per common share in accordance with FASB ASC Topic 260, Earnings Per Share The following table sets forth the number of potential common shares excluded from the calculation of net loss per diluted share for the three months and nine months ended September 30, 2016 and 2015 because the effect of them would be anti-dilutive: Three Months Ended Nine Months Ended 2016 2015 2016 2015 Options to purchase common stock - 287,494 414,177 287,494 Warrants to purchase common stock - 642,962 402,228 642,962 Total - 930,456 816,405 930,456 Subsequent to issuance of the Company’s quarterly report on Form 10-Q for the three and nine months ended September 30, 2016, filed with the SEC on November 14, 2016, the Company discovered an inadvertent error in the weighted average shares outstanding in the financial statements for the three and nine months ended September 30, 2016. The Company has calculated and recognized adjustments accordingly. The following table shows the effect of the restatement on the Company’s financial statements for the three and nine months ended September 30, 2016: Three Months Ended September 30, 2016 Nine Months Ended September 30, 2016 As Previously Reported Restated As Previously Reported Restated Weighted average common shares outstanding used to compute income (loss) per share, basic and diluted 2,799,082 3,024,393 2,240,869 2,665,904 Income (loss) per common share from continuing operations, basic and diluted $ 0.07 $ 0.07 $ (1.72 ) $ (1.44 ) |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 11: INCOME TAXES Deferred income tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial reporting and tax bases of assets and liabilities and are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized. As a result of the Company’s cumulative losses, management has concluded that a full valuation allowance against the Company’s net deferred tax assets is appropriate. No income tax liabilities existed as of September 30, 2016 and December 31, 2015 due to the Company’s continuing operating losses. |
CONCENTRATION OF CREDIT RISK
CONCENTRATION OF CREDIT RISK | 9 Months Ended |
Sep. 30, 2016 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATION OF CREDIT RISK | NOTE 12: CONCENTRATION OF CREDIT RISK Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash deposits. Accounts at each institution are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. At September 30, 2016 and December 31, 2015, the Company had $4,138,177 and $3,465,895 in excess of the FDIC insured limit, respectively. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 13: COMMITMENTS AND CONTINGENCIES Lease Commitments The future minimum lease payments due subsequent to September 30, 2016 under all non-cancelable operating and capital leases for the next five years are as follows: Year Ending December 31, Operating Leases 2016 (remainder of year) $ 87,812 2017 23,470 Total minimum lease payments $ 111,282 The total rent expense for the three months ended September 30, 2016 and 2015 was $87,315 and $154,291, respectively and $238,565 and $469,748 for the nine months ended September 30, 2016 and 2015, respectively. Rent expense was included in general and administrative expenses for both years. Purchase Commitments Effective May 19, 2016 the Company entered into a services agreement with KriSan Biotech Co. Ltd., a corporation organized under the laws of Taiwan, Republic of China (“KSB”). The agreement directs KSB to research and develop for the Company processes for manufacturing endoxifen and to produce an initial supply of endoxifen so that release and stability studies may be conducted. The Company has agreed to pay $136,000 to KSB when certain benchmarks have been delivered by KSB under the services agreement. Litigation and Contingencies On October 10, 2013, a putative securities class action complaint, captioned Cook v. Atossa Genetics, Inc. On February 14, 2014, the Court appointed plaintiffs Miko Levi, Bandar Almosa and Gregory Harrison (collectively, the “Levi Group”) as lead plaintiffs, and approved their selection of co-lead counsel and liaison counsel. The Court also amended the caption of the case to read In re Atossa Genetics, Inc. Securities Litigation. No. 2:13-cv-01836-RSM. An amended complaint was filed on April 15, 2014. The Company and other defendants filed motions to dismiss the amended complaint on May 30, 2014. The plaintiffs filed briefs in opposition to these motions on July 11, 2014. The Company replied to the opposition brief on August 11, 2014. On October 6, 2014 the Court granted defendants’ motion dismissing all claims against Atossa and all other defendants. The Court’s order provided plaintiffs with a deadline of October 26, 2014 to file a motion for leave to amend their complaint and the plaintiffs did not file such a motion by that date. On October 30, 2014, the Court entered a final order of dismissal. On November 3, 2014, plaintiffs filed a notice of appeal with the Court and have appealed the Court’s dismissal order to the U.S. Court of Appeals for the Ninth Circuit. On February 11, 2015, plaintiffs filed their opening appellate brief. Defendants’ filed their answering brief on April 13, 2015, and plaintiffs filed their reply brief on May 18, 2015. A hearing for the appeal has not been set. The Company believes this lawsuit is without merit and plans to defend itself vigorously; however, failure by the Company to obtain a favorable resolution of the claims set forth in the complaint could have a material adverse effect on the Company’s business, results of operations and financial condition. Currently, the amount of such material adverse effect cannot be reasonably estimated, and no provision or liability has been recorded for these claims as of September 30, 2016. The costs associated with defending and resolving the lawsuit and ultimate outcome cannot be predicted. These matters are subject to inherent uncertainties and the actual cost, as well as the distraction from the conduct of the Company’s business, will depend upon many unknown factors and management’s view of these may change in the future. On January 28, 2016, the Company filed a complaint in the United States District Court for the District of Delaware captioned Atossa Genetics Inc. v. Besins Healthcare Luxembourg SARL |
STOCK BASED COMPENSATION
STOCK BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK BASED COMPENSATION | NOTE 14: STOCK BASED COMPENSATION Stock Options and Incentive Plan On September 28, 2010, the Board of Directors approved the adoption of the 2010 Stock Option and Incentive Plan, or the 2010 Plan, to provide for the grant of equity-based awards to employees, officers, non-employee directors and other key persons providing services to the Company. Awards of incentive options may be granted under the 2010 Plan until September 2020. No other awards may be granted under the 2010 Plan after the date that is 10 years from the date of stockholder approval. An aggregate of 66,667 shares were initially reserved for issuance in connection with awards granted under the 2010 Plan and on May 18, 2016, an additional 133,333 shares were reserved for issuance under the 2010 Plan. The following table presents the automatic additions to the 2010 Plan since inception pursuant to the “evergreen” terms of the 2010 Plan: January 1, Number of 2012 30,018 2013 34,452 2014 49,532 2015 65,557 2016 220,419 Total additional shares 399,978 The Company granted 0 and 185,245 additional options to purchase shares of common stock to employees and directors during the three and nine months ended September 30, 2016. No options were exercised during the three and nine months ended September 30, 2016. There are 140,888 shares available for grant under the 2010 Plan as of September 30, 2016. Compensation costs associated with the Company’s stock options are recognized, based on the grant-date fair values of these options, over the requisite service period, or vesting period. Accordingly, the Company recognized stock based compensation expense of $257,389 and $317,986 for the three months ended September 30, 2016 and 2015, respectively and $650,053 and $703,726 ($633,962 from continuing operations and $69,764 from discontinued operations) for the nine months ended September 30, 2016 and 2015, respectively. Options issued and outstanding as of September 30, 2016 and their activities during the nine months then ended are as follows: Number of Weighted- Weighted- Aggregate Outstanding as of January 1, 2016 240,930 $ 38.89 $ - Granted 185,245 3.95 - Forfeited (35,751 ) 28.90 - Outstanding as of September 30, 2016 390,424 25.81 7.36 $ 6,451,077 Exercisable as of September 30, 2016 242,356 41.1 5.54 $ - Vested and expected to vest (1) 414,177 $ 28.95 7.02 $ - (1) vested shares and unvested shares after a forfeiture rate is applied At September 30, 2016, there were 237,192 unvested options outstanding and the related unrecognized total compensation cost associated with these options was approximately $1.2 million. This expense is expected to be recognized over a weighted-average period of 2.09 years. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2016 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 15: RELATED PARTY TRANSACTIONS Shu-Chih Chen, Ph.D., a member of the Board of Directors and spouse of Steve C. Quay, Ph.D., M.D., the Company’s CEO, has provided consultancy services to the Company. Those services primarily include providing scientific and technical expertise in Atossa’s negotiations and ongoing arrangements with the manufacturer of endoxifen which is located in Taiwan. The cost of the services provided by Dr. Chen are approximately $25,000 through September 30, 2016 and have been approved by Atossa’s audit committee. |
SUMMARY OF ACCOUNTING POLICIES
SUMMARY OF ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation: The accompanying consolidated financial statements have been prepared pursuant to the rules of the Securities and Exchange Commission (“SEC”) and in accordance with U.S. generally accepted accounting principles (“GAAP”). The accompanying consolidated financial statements include the financial statements of Atossa Genetics Inc. and its formerly wholly-owned subsidiary, NRLBH. The Company sold a majority of its interest in the NRLBH in December 2015 and all of its activities are reported as discontinued operations in the accompanying consolidated financial statements. All significant intercompany account balances and transactions have been eliminated in consolidation. Certain amounts from prior years have been reclassified to conform with the 2016 presentation. On August 26,2016, the Company completed a 1-for-15 reverse stock split of the shares of the Company’s common stock (the “Reverse Stock Split”). As a result of the Reverse Stock Split, every 15 shares of issued and outstanding common stock were combined into one issued and outstanding share of Common Stock, and the par value per share was changed to $.015 per share. No fractional shares were issued because of the Reverse Stock Split and any fractional shares that would otherwise have resulted from the Reverse Stock Split were paid in cash. As a result of the Reverse Stock Split, as of November 11, 2016, there are 3,787,967 shares of common stock outstanding. The number of authorized shares of common stock was not reduced as a result of the Reverse Stock Split. The Company’s common stock began trading on a reverse stock split-adjusted basis on August 26, 2016. All share and per share data included in this report has been retroactively restated to reflect the Reverse Stock Split. |
Use of Estimates | Use of Estimates: The preparation of financial statements in conformity with 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 expenses during the reporting period. Actual results could differ from those estimates. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements: In May 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers: Topic 606 In August 2014, FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. In February 2016, FASB issued ASU No. 2016-02, Lease Accounting Topic 842. In April 2016, the FASB issued ASU No. 2016-09, Stock Compensation Topic 718: Improvements to Employee Share-based Payment Accounting. |
PREPAID EXPENSES (Tables)
PREPAID EXPENSES (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of prepaid expenses | Prepaid expenses consisted of the following: S eptember 30, December 31, Prepaid insurance 38,538 104,954 Retainer and security deposits 39,218 39,218 Other 42,995 49,121 Total prepaid expenses $ 120,751 $ 193,293 |
FURNITURE AND EQUIPMENT (Tables
FURNITURE AND EQUIPMENT (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Furniture and equipment | Furniture and equipment consisted of the following: September 30, 2016 December 31, 2015 Machinery and equipment $ 206,336 $ 206,337 Leasehold improvements 84,539 79,518 Total furniture and equipment 290,875 285,855 Less: Accumulated depreciation (206,338 ) (114,287 ) Total furniture and equipment, net $ 84,537 $ 171,568 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets | Intangible assets consisted of the following: September 30, December 31, 2016 2015 Patents $ 1,630,000 $ 1,630,000 Capitalized license costs - 200,000 Software 113,540 113,540 Intangible assets 1,743,540 1,943,540 Less: Accumulated amortization (341,641 ) (242,975 ) Total intangible assets, net $ 1,401,899 $ 1,700,565 |
Schedule of future amortization expense | Future estimated amortization expenses as of September 30, 2016 for the five succeeding years is as follows: For the Year Ending December 31, Amounts 2016 (includes the remainder of the year) $ 42,489 2017 169,576 2018 149,623 2019 149,015 2020 149,015 Thereafter 742,181 $ 1,401,899 |
PAYROLL LIABILITIES (Tables)
PAYROLL LIABILITIES (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Payables and Accruals [Abstract] | |
Schedule of payroll liabilities | Payroll liabilities consisted of the following: September 30, December 31, Accrued bonus payable $ 438,098 $ 555,345 Accrued payroll liabilities 96,248 510,179 Accrued vacation 100,701 93,811 Total payroll liabilities $ 635,047 $ 1,159,335 |
DISCONTINUED OPERATIONS (Tables
DISCONTINUED OPERATIONS (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of disposal of consolidate statements of operations and comprehensive loss | The loss from discontinued operations related to the operations of the NRLBH for the three and nine months ended September 30, 2015 was as follows: Three Months Nine Months Revenue $ 772,591 $ 5,337,911 Cost of revenue (311,074 ) (3,365,901 ) Gross profit 461,517 1,972,010 Expenses: Selling expenses 239,427 829,174 Research and development expenses 141,388 509,796 General and administrative expenses 625,499 1,213,795 Other expenses, net 5 49,559 Net loss from discontinued operations $ (544,802 ) $ (630,314 ) |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Equity [Abstract] | |
Schedule of warrants | As of September 30, 2016, warrants to purchase 402,228 shares of common stock were outstanding including: Outstanding Exercise Price Expiration Date 2011 private placement 283,470 $ 18.75 - 24.00 May 18, 2018 Acueity warrants 21,667 75.00 September 30, 2017 2014 public offering 77,790 45.00 January 29, 2019 Placement agent fees for Company’s offerings 16,135 31.80 – 186.45 March - November, 2018 Outside consulting 3,166 $ 63.60 January 14, 2018 402,228 |
NET LOSS PER SHARE (RESTATED) (
NET LOSS PER SHARE (RESTATED) (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of antidilutive securities | The following table sets forth the number of potential common shares excluded from the calculation of net loss per diluted share for the three months and nine months ended September 30, 2016 and 2015 because the effect of them would be anti-dilutive: Three Months Ended Nine Months Ended 2016 2015 2016 2015 Options to purchase common stock - 287,494 414,177 287,494 Warrants to purchase common stock - 642,962 402,228 642,962 Total - 930,456 816,405 930,456 |
Schedule of restatement of Companys financial statements | The following table shows the effect of the restatement on the Company’s financial statements for the three and nine months ended September 30, 2016: Three Months Ended September 30, 2016 Nine Months Ended September 30, 2016 As Previously Reported Restated As Previously Reported Restated Weighted average common shares outstanding used to compute income (loss) per share, basic and diluted 2,799,082 3,024,393 2,240,869 2,665,904 Income (loss) per common share from continuing operations, basic and diluted $ 0.07 $ 0.07 $ (1.72 ) $ (1.44 ) |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future minimum lease payments under all non-cancelable operating and capital leases | The future minimum lease payments due subsequent to September 30, 2016 under all non-cancelable operating and capital leases for the next five years are as follows: Year Ending December 31, Operating Leases 2016 (remainder of year) $ 87,812 2017 23,470 Total minimum lease payments $ 111,282 |
STOCK BASED COMPENSATION (Table
STOCK BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of automatic additions to the 2010 Plan | The following table presents the automatic additions to the 2010 Plan since inception pursuant to the “evergreen” terms of the 2010 Plan: January 1, Number of 2012 30,018 2013 34,452 2014 49,532 2015 65,557 2016 220,419 Total additional shares 399,978 |
Schedule of stock options | Options issued and outstanding as of September 30, 2016 and their activities during the nine months then ended are as follows: Number of Underlying Shares Weighted- Average Exercise Price Per Share Weighted- Average Contractual Life Remaining in Years Aggregate Intrinsic Value Outstanding as of January 1, 2016 240,930 $ 38.89 $ - Granted 185,245 3.95 - Forfeited (35,751 ) 28.90 - Outstanding as of September 30, 2016 390,424 25.81 7.36 $ 6,451,077 Exercisable as of September 30, 2016 242,356 41.1 5.54 $ - Vested and expected to vest (1) 414,177 $ 28.95 7.02 $ - (1) vested shares and unvested shares after a forfeiture rate is applied |
NATURE OF OPERATIONS (Details N
NATURE OF OPERATIONS (Details Narrative) | Dec. 16, 2015USD ($) |
Preferred Stock [Member] | |
Percentage of ownership after transaction | 19.00% |
NRL Investment Group, LLC [Member] | |
Sale of stock percentage | 81.00% |
Consideration received on transaction | $ 50,000 |
Monthly earn-out payments percentage of gross revenue | 6.00% |
Maximum gross revenue for monthly earn-out payments | $ 10,000,000 |
Right to sell preferred stock after fours years | $ 4,000,000 |
GOING CONCERN (Details Narrativ
GOING CONCERN (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||
Net loss | $ (204,689) | $ 4,318,111 | $ 3,845,235 | $ 10,798,727 | ||
Net cash provided by (used in) operating activities | (4,018,564) | (9,999,872) | ||||
Cash and cash equivalents | 4,388,177 | $ 7,839,439 | 4,388,177 | $ 7,839,439 | $ 3,715,895 | $ 8,500,718 |
Working capital | $ 3,700,000 | $ 3,700,000 |
SUMMARY OF ACCOUNTING POLICIE36
SUMMARY OF ACCOUNTING POLICIES (Details Narrative) - $ / shares | Aug. 26, 2016 | Nov. 11, 2016 | Sep. 30, 2016 | Dec. 31, 2015 |
Common stock, par or stated value (in dollars per share) | $ 0.015 | $ 0.015 | ||
Common stock, outstanding | 3,787,967 | 2,177,151 | ||
Reverse Stock Split [Member] | ||||
Description of reverse stock split | The Company completed a 1-for-15 reverse stock split of the shares of the Company’s common stock (the “Reverse Stock Split”). As a result of the Reverse Stock Split, every 15 shares of issued and outstanding common stock were combined into one issued and outstanding share of Common Stock, and the par value per share was changed to $.015 per share. | |||
Common stock, par or stated value (in dollars per share) | $ 0.015 | |||
Common stock, outstanding | 3,787,967 |
PREPAID EXPENSES (Details)
PREPAID EXPENSES (Details) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid insurance | $ 38,538 | $ 104,954 |
Retainer and security deposits | 39,218 | 39,218 |
Other | 42,995 | 49,121 |
Total prepaid expenses | $ 120,751 | $ 193,293 |
FURNITURE AND EQUIPMENT (Detail
FURNITURE AND EQUIPMENT (Details) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Property, Plant and Equipment [Line Items] | ||
Total furniture and equipment | $ 290,875 | $ 285,855 |
Less: Accumulated depreciation | (206,338) | (114,287) |
Total furniture and equipment, net | 84,537 | 171,568 |
Machinery and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total furniture and equipment | 206,336 | 206,337 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total furniture and equipment | $ 84,539 | $ 79,518 |
FURNITURE AND EQUIPMENT (Deta39
FURNITURE AND EQUIPMENT (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 29,698 | $ 32,620 | $ 92,054 | $ 97,059 |
INTANGIBLE ASSETS (Details)
INTANGIBLE ASSETS (Details) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets | $ 1,743,540 | $ 1,943,540 |
Less: Accumulated amortization | (341,641) | (242,975) |
Total intangible assets, net | 1,401,899 | 1,700,565 |
Patents [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets | 1,630,000 | 1,630,000 |
Capitalized License Costs [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets | 200,000 | |
Software [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets | $ 113,540 | $ 113,540 |
INTANGIBLE ASSETS (Details 1)
INTANGIBLE ASSETS (Details 1) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2016 (includes the remainder of the year) | $ 42,489 | |
2,017 | 169,576 | |
2,018 | 149,623 | |
2,019 | 149,015 | |
2,020 | 149,015 | |
Thereafter | 742,181 | |
Total intangible assets, net | $ 1,401,899 | $ 1,700,565 |
INTANGIBLE ASSETS (Details Narr
INTANGIBLE ASSETS (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Total intangible assets, net | $ 1,401,899 | $ 1,401,899 | $ 1,700,565 | ||
Amortization expense | 36,666 | ||||
Patents | 1,630,000 | 1,630,000 | $ 1,630,000 | ||
Intangible assets wrote-off | 36,666 | ||||
Loss on disposal of an asset | $ (163,333) | $ 74,800 | |||
Software [Member] | |||||
Useful life | 7 years | ||||
Amortization expense | 7,857 | $ 11,261 | $ 23,572 | 34,090 | |
Patents [Member] | |||||
Finite-lived intangible assets acquired | $ 37,253 | $ 37,253 | $ 111,761 | $ 111,761 | |
Patents [Member] | Minimum [Member] | |||||
Useful life | 7 years | ||||
Patents [Member] | Maximum [Member] | |||||
Useful life | 12 years |
PAYROLL LIABILITIES (Details)
PAYROLL LIABILITIES (Details) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Payables and Accruals [Abstract] | ||
Accrued bonus payable | $ 438,098 | $ 555,345 |
Accrued payroll liabilities | 96,248 | 510,179 |
Accrued vacation | 100,701 | 93,811 |
Total payroll liabilities | $ 635,047 | $ 1,159,335 |
DISCONTINUED OPERATIONS (Detail
DISCONTINUED OPERATIONS (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Expenses: | ||||
Net loss from discontinued operations | $ (544,802) | $ (630,314) | ||
National Reference Laboratory for Breast Health, Inc [Member] | ||||
Revenue | 772,591 | 5,337,911 | ||
Cost of revenue | (311,074) | (3,365,901) | ||
Gross profit | 461,517 | 1,972,010 | ||
Expenses: | ||||
Selling expenses | 239,427 | 829,174 | ||
Research and development expenses | 141,388 | 509,796 | ||
General and administrative expenses | 625,499 | 1,213,795 | ||
Other expenses, net | 5 | 49,559 | ||
Net loss from discontinued operations | $ (544,802) | $ (630,314) |
DISCONTINUED OPERATIONS (Deta45
DISCONTINUED OPERATIONS (Details Narrative) | Dec. 16, 2015USD ($) |
NRL Investment Group, LLC [Member] | |
Right to sell preferred stock after fours years | $ 4,000,000 |
Maximum gross revenue for monthly earn-out payments | $ 10,000,000 |
Monthly earn-out payments percentage of gross revenue | 6.00% |
Preferred Stock [Member] | |
Percentage of ownership after transaction | 19.00% |
STOCKHOLDERS' EQUITY (Details)
STOCKHOLDERS' EQUITY (Details) | 9 Months Ended |
Sep. 30, 2016$ / sharesshares | |
Class of Warrant or Right [Line Items] | |
Class of Warrant or Right, Outstanding | shares | 402,228 |
2011 Private Placement [Member] | |
Class of Warrant or Right [Line Items] | |
Class of Warrant or Right, Outstanding | shares | 283,470 |
Expiration Dates of Class of Warrant or Right Not Date From Which Warrants or Rights Exercisable | May 18, 2018 |
2011 Private Placement [Member] | Minimum [Member] | |
Class of Warrant or Right [Line Items] | |
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 18.75 |
2011 Private Placement [Member] | Maximum [Member] | |
Class of Warrant or Right [Line Items] | |
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 24 |
Acueity Warrants [Member] | |
Class of Warrant or Right [Line Items] | |
Class of Warrant or Right, Outstanding | shares | 21,667 |
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 75 |
Expiration Dates of Class of Warrant or Right Not Date From Which Warrants or Rights Exercisable | Sep. 30, 2017 |
2014 Public Offering [Member] | |
Class of Warrant or Right [Line Items] | |
Class of Warrant or Right, Outstanding | shares | 77,790 |
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 45 |
Expiration Dates of Class of Warrant or Right Not Date From Which Warrants or Rights Exercisable | Jan. 29, 2019 |
Placement Agent Fee [Member] | |
Class of Warrant or Right [Line Items] | |
Class of Warrant or Right, Outstanding | shares | 16,135 |
Placement Agent Fee [Member] | Minimum [Member] | |
Class of Warrant or Right [Line Items] | |
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 31.80 |
Expiration Dates of Class of Warrant or Right Not Date From Which Warrants or Rights Exercisable | Mar. 31, 2018 |
Placement Agent Fee [Member] | Maximum [Member] | |
Class of Warrant or Right [Line Items] | |
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 186.45 |
Expiration Dates of Class of Warrant or Right Not Date From Which Warrants or Rights Exercisable | Nov. 30, 2018 |
Outside Consulting Firm [Member] | |
Class of Warrant or Right [Line Items] | |
Class of Warrant or Right, Outstanding | shares | 3,166 |
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 63.60 |
Expiration Dates of Class of Warrant or Right Not Date From Which Warrants or Rights Exercisable | Jan. 14, 2018 |
STOCKHOLDERS' EQUITY (Details N
STOCKHOLDERS' EQUITY (Details Narrative) - USD ($) | May 25, 2016 | May 26, 2015 | Aug. 31, 2016 | Jun. 30, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Nov. 11, 2015 | May 19, 2014 |
Number of total shares authorized | 85,000,000 | ||||||||||
Common stock, authorized | 75,000,000 | 75,000,000 | |||||||||
Common stock, par or stated value (in dollars per share) | $ 0.015 | $ 0.015 | |||||||||
Preferred stock, authorized | 10,000,000 | 10,000,000 | |||||||||
Preferred stock, par or stated value (in dollars per share) | $ 0.001 | $ 0.001 | |||||||||
Number of new shares issued, value | $ 4,695,869 | ||||||||||
Proceeds from issuance of common stock | 4,695,869 | $ 9,498,557 | |||||||||
Issuance of common shares as commitment fees | 198,523 | ||||||||||
2016 Public Offering [Member] | |||||||||||
Share price (in dollars per share) | $ 2.50 | ||||||||||
Number of new shares issued | 1,150,000 | ||||||||||
Number of new shares issued, value | $ 2,875,000 | ||||||||||
Proceeds from issuance of common stock | $ 2,645,000 | ||||||||||
Additional Paid-in Capital [Member] | |||||||||||
Number of new shares issued, value | 4,672,452 | ||||||||||
Issuance of common shares as commitment fees | $ 197,777 | ||||||||||
Beneficial Owner [Member] | |||||||||||
Ownership percentage | 15.00% | ||||||||||
Percentage of common stock outstanding | 2.00% | ||||||||||
Initial exercise price (in dollars per share) | $ 15 | ||||||||||
Entitled to receive worth of common stock | $ 30 | ||||||||||
Aspire Capital Fund LLC [Member] | Stock Purchase Agreement [Member] | |||||||||||
Number of new shares issued | 405,747 | 176,879 | |||||||||
Proceeds from issuance of common stock | $ 2,153,583 | $ 4,292,349 | |||||||||
Number of shares issued for services | 49,736 | ||||||||||
Number of shares issued for services, value | $ 746 | ||||||||||
Aspire Capital Fund LLC [Member] | Stock Purchase Agreement [Member] | Additional Paid-in Capital [Member] | |||||||||||
Number of shares issued for services, value | 197,777 | ||||||||||
Issuance of common shares as commitment fees | 198,523 | ||||||||||
Aspire Capital Fund LLC [Member] | New Common Stock Purchase Agreement [Member] | |||||||||||
Proceeds from issuance of common stock | $ 25,000,000 | ||||||||||
Shares agreed to register in common stock | 405,747 | ||||||||||
Stock committed | $ 10,000,000 | ||||||||||
Roth Capital Partners, LLC. and Dawson James Securities, Inc. (the "2015 Placement Agents") [Member] | Placement Agent Agreement [Member] | 2015 Public Offering [Member] | |||||||||||
Shares, issued | 96,934 | ||||||||||
Share price (in dollars per share) | $ 17.25 | ||||||||||
Issuance of prefunded warrants | 240,733 | ||||||||||
Prefunded warrants price | $ 17.10 | ||||||||||
Net proceeds from issuance of prefunded warrants | $ 5,200,000 | ||||||||||
Prefunded warrants exercise price | $ 0.15 | ||||||||||
Deferred offering costs | $ 577,790 | ||||||||||
Series-A Junior Participating Preferred Stock [Member] | |||||||||||
Preferred stock, authorized | 750,000 | ||||||||||
Preferred stock, par or stated value (in dollars per share) | $ 0.001 |
NET LOSS PER SHARE (RESTATED)48
NET LOSS PER SHARE (RESTATED) (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Number of potential common shares excluded | 930,456 | 816,405 | 930,456 | |
Equity Option [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Number of potential common shares excluded | 287,494 | 414,177 | 287,494 | |
Warrant [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Number of potential common shares excluded | 642,962 | 402,228 | 642,962 |
NET LOSS PER SHARE (RESTATED)49
NET LOSS PER SHARE (RESTATED) (Details 1) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Weighted average common shares outstanding used to compute income (loss) per share, basic and diluted (in shares) | 3,024,393 | 1,845,747 | 2,665,904 | 1,720,353 |
Income (loss) per common share from continuing operations, basic and diluted (in dollars per share) | $ 0.07 | $ (2.04) | $ (1.44) | $ (5.91) |
Scenario, Previously Reported [Member] | ||||
Weighted average common shares outstanding used to compute income (loss) per share, basic and diluted (in shares) | 2,799,082 | 2,240,869 | ||
Income (loss) per common share from continuing operations, basic and diluted (in dollars per share) | $ 0.07 | $ (1.72) |
CONCENTRATION OF CREDIT RISK (D
CONCENTRATION OF CREDIT RISK (Details Narrative) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Risks and Uncertainties [Abstract] | ||
Cash, FDIC insured amount | $ 250,000 | $ 250,000 |
Cash, uninsured amount | $ 4,138,177 | $ 3,465,895 |
COMMITMENTS AND CONTINGENCIES51
COMMITMENTS AND CONTINGENCIES (Details) | Sep. 30, 2016USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2016 (remainder of year) | $ 87,812 |
2,017 | 23,470 |
Total minimum lease payments | $ 111,282 |
COMMITMENTS AND CONTINGENCIES52
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | Aug. 04, 2016 | May 19, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 |
Rent expense | $ 87,315 | $ 154,291 | $ 238,565 | $ 469,748 | ||
Litigation settlement, amount | $ 1,762,931 | |||||
KriSan Biotech Co. Ltd [Member] | Research and Development Arrangement [Member] | ||||||
Long term purchase commitment amount | $ 136,000 |
STOCK BASED COMPENSATION (Detai
STOCK BASED COMPENSATION (Details) | 9 Months Ended |
Sep. 30, 2016shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Total additional shares | 399,978 |
2012 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Total additional shares | 30,018 |
2013 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Total additional shares | 34,452 |
2014 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Total additional shares | 49,532 |
2015 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Total additional shares | 65,557 |
2016 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Total additional shares | 220,419 |
STOCK BASED COMPENSATION (Det54
STOCK BASED COMPENSATION (Details 1) | 9 Months Ended | |
Sep. 30, 2016USD ($)$ / sharesshares | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Outstanding at beginning | shares | 240,930 | |
Granted | shares | 185,245 | |
Forfeited | shares | (35,751) | |
Outstanding at ending | shares | 390,424 | |
Exercisable at ending | shares | 242,356 | |
Vested and expected to vest | shares | 414,177 | [1] |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Rollforward] | ||
Outstanding at beginning | $ / shares | $ 38.89 | |
Granted | $ / shares | 3.95 | |
Forfeited | $ / shares | 28.90 | |
Outstanding at ending | $ / shares | 25.81 | |
Exercisable at ending | $ / shares | 41.1 | |
Vested and expected to vest | $ / shares | $ 28.95 | [1] |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Weighted Average Contractual Life Remaining in Years [Rollforward] | ||
Outstanding at ending | 7 years 4 months 10 days | |
Exercisable at end | 5 years 6 months 14 days | |
Vested and expected to vest | 7 years 7 days | [1] |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Aggregate Intrinsic Value [Rollforward] | ||
Outstanding at beginning | $ | ||
Granted | $ | ||
Forfeited | $ | ||
Expired | $ | ||
Outstanding at ending | $ | 6,451,077 | |
Exercisable at ending | $ | ||
[1] | vested shares and unvested shares after a forfeiture rate is applied |
STOCK BASED COMPENSATION (Det55
STOCK BASED COMPENSATION (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | May 18, 2016 | Sep. 28, 2010 | |
Share-based Compensation | $ 257,389 | $ 317,986 | $ 650,053 | $ 703,726 | ||
Number of shares granted | 185,245 | |||||
Number of unvested options outstanding | 237,192 | 237,192 | ||||
Unrecognized compensation cost | $ 1,200,000 | $ 1,200,000 | ||||
Vesting period | 2 years 1 month 2 days | |||||
Continuing Operations [Member] | ||||||
Share-based Compensation | $ 633,962 | |||||
Discontinued Operations [Member] | ||||||
Share-based Compensation | $ 69,764 | |||||
Stock Option and Incentive Plan 2010 [Member] | ||||||
Shares held in employee stock option plan suspense shares | 133,333 | 66,667 | ||||
Number of shares available for grant | 140,888 | 140,888 | ||||
Employees and Directors [Member] | ||||||
Number of shares granted | 0 | 185,245 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Consultant [Member] | |
Related Party Transaction [Line Items] | |
Cost of services | $ 25,000 |