Document_And_Entity_Informatio
Document And Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Nov. 18, 2013 | |
Document Information [Line Items] | ' | ' |
Entity Registrant Name | 'Harvard Apparatus Regenerative Technology, Inc. | ' |
Entity Central Index Key | '0001563665 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Trading Symbol | 'HART | ' |
Entity Common Stock, Shares Outstanding | ' | 7,740,026 |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 30-Sep-13 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Document Fiscal Year Focus | '2013 | ' |
BALANCE_SHEETS
BALANCE SHEETS (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
ASSETS | ' | ' |
Cash and cash equivalents | $0 | $0 |
Prepaid expenses | 33 | 0 |
Total current assets | 33 | 0 |
Plant, property and equipment, net | 460 | 438 |
Total non-current assets | 460 | 438 |
Total assets | 493 | 438 |
LIABILITIES AND INVESTED EQUITY | ' | ' |
Accounts payable | 126 | 179 |
Accrued and other current liabilities | 253 | 232 |
Total current liabilities | 379 | 411 |
Total non-current liabilities | 0 | 0 |
Total liabilities | 379 | 411 |
Invested equity: | ' | ' |
Harvard Bioscience investment | 18,681 | 12,425 |
Accumulated deficit | -18,567 | -12,398 |
Total invested equity | 114 | 27 |
Total liabilities and invested equity | $493 | $438 |
STATEMENTS_OF_OPERATIONS
STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | 9 Months Ended | 55 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 |
Revenues | $0 | $0 | $0 | $0 | $0 |
Cost of product revenues | 0 | 0 | 0 | 0 | 0 |
Gross profit | 0 | 0 | 0 | 0 | 0 |
Sales and marketing expenses | 28 | 35 | 82 | 91 | 466 |
General and administrative expenses | 974 | 634 | 2,604 | 1,631 | 7,185 |
Research and development expenses | 1,058 | 1,059 | 3,483 | 3,025 | 10,916 |
Operating expenses | 2,060 | 1,728 | 6,169 | 4,747 | 18,567 |
Operating loss | -2,060 | -1,728 | -6,169 | -4,747 | -18,567 |
Loss before income taxes | -2,060 | -1,728 | -6,169 | -4,747 | -18,567 |
Income taxes | 0 | 0 | 0 | 0 | 0 |
Net loss | ($2,060) | ($1,728) | ($6,169) | ($4,747) | ($18,567) |
STATEMENTS_OF_CASH_FLOWS
STATEMENTS OF CASH FLOWS (USD $) | 9 Months Ended | 55 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 |
Cash flows used in operating activities: | ' | ' | ' |
Net loss: | ($6,169) | ($4,747) | ($18,567) |
Adjustments to reconcile net loss to net cash used in operating activities: | ' | ' | ' |
Stock-based compensation expense | 514 | 349 | 1,422 |
Depreciation | 123 | 38 | 203 |
Changes in operating assets and liabilities: | ' | ' | ' |
Prepaid expenses | -33 | 0 | -33 |
Accounts payable | -53 | -26 | 126 |
Accrued and other current liabilities | 21 | 16 | 253 |
Net cash used in operating activities | -5,597 | -4,370 | -16,596 |
Cash flows used in investing activities: | ' | ' | ' |
Additions to property, plant and equipment | -145 | -146 | -663 |
Net cash used in investing activities | -145 | -146 | -663 |
Cash flows from financing activities: | ' | ' | ' |
Investment by Harvard Bioscience | 5,742 | 4,516 | 17,259 |
Net cash provided by financing activities | 5,742 | 4,516 | 17,259 |
Net increase (decrease) in cash and cash equivalents | 0 | 0 | 0 |
Cash and cash equivalents at beginning of the period | 0 | 0 | 0 |
Cash and cash equivalents at end of period | $0 | $0 | $0 |
Overview_and_Basis_of_Presenta
Overview and Basis of Presentation | 9 Months Ended |
Sep. 30, 2013 | |
Accounting Policies [Abstract] | ' |
Business Description and Basis of Presentation [Text Block] | ' |
1. Overview and Basis of Presentation | |
Overview | |
Prior to November 1, 2013, Harvard Apparatus Regenerative Technology, Inc. ("HART" or "the Company") was a business segment of Harvard Bioscience, Inc. ("Harvard Bioscience"). The Company is engaged in the development and commercialization of devices for use by clinicians and researchers in the field of regenerative medicine. | |
Since inception, the Company has devoted substantially all of its efforts to business planning, research and development, recruiting management and technical staff, and acquiring operating assets. Accordingly, HART is considered to be in the development stage. | |
HART was incorporated on May 3, 2012 by Harvard Bioscience, as a wholly-owned subsidiary, to provide a means for separating Harvard Bioscience’s regenerative medicine device business from its other businesses. Harvard Bioscience has been designing and manufacturing devices for life science researchers for over 100 years. Harvard Bioscience first focused on providing devices to scientists involved in regenerative medicine research in 2008. Since early 2009, Harvard Bioscience’s regenerative medicine device business initiative has been operated as a division of Harvard Bioscience. On October 31, 2013, Harvard Bioscience contributed its regenerative medicine device business assets into HART (the "Separation"), capitalized HART via a cash contribution of $15 million and then on November 1, 2013 spun off its interest in HART to Harvard Bioscience’s stockholders. See Note 8 for a discussion of the spin-off. | |
Basis of Presentation | |
The Company has historically operated as part of Harvard Bioscience, and not as a stand-alone company. The financial statements presented herein, and discussed below, have been prepared on a stand-alone basis and are derived from the financial statements and accounting records of Harvard Bioscience using the historical basis of assets and liabilities of HART. The financial statements reflect the Company’s financial position, results of operations and cash flows in conformity with accounting principles generally accepted in the United States (“GAAP”). | |
The Company’s financial statements include expenses of Harvard Bioscience allocated to HART for certain functions provided by Harvard Bioscience, including, but not limited to, general corporate expenses related to executive services, finance, treasury, corporate income tax, human resources, legal services and investor relations. These expenses have been allocated to HART on the basis of headcount, time devoted to HART activities, percentage of operating expenses or other relevant measures. The Company believes the assumptions and allocations underlying the financial statements are reasonable and appropriate under the circumstances. Both HART and Harvard Bioscience consider the basis on which the expenses have been allocated to be a reasonable reflection of the utilization of services provided to or the benefits received by the Company during the periods presented. However, the amounts recorded for these transactions and allocations are not necessarily representative of the amounts that would have been reflected in the financial statements had HART operated independently of Harvard Bioscience. Accordingly, the financial statements for these periods are not necessarily indicative of HART’s future results of operations, financial position, and cash flows. | |
Harvard Bioscience has historically used a centralized approach to cash management and financing of its operations. Transactions relating to HART have been accounted for through the Harvard Bioscience investment account for HART. Accordingly, none of the cash, cash equivalents or debt at the Harvard Bioscience corporate level has been assigned to HART in the financial statements through September 30, 2013. | |
The unaudited financial statements of HART as of September 30, 2013 and for the three and nine months ended September 30, 2013 and 2012 and for the period from February 24, 2009 (inception) to September 30, 2013 have been prepared by the Company pursuant to the rules and regulations of the SEC for interim financial reporting. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. | |
Summary_of_Significant_Account
Summary of Significant Accounting Policies and Recently Issued Accounting Pronouncements | 9 Months Ended | |
Sep. 30, 2013 | ||
Accounting Policies [Abstract] | ' | |
Significant Accounting Policies [Text Block] | ' | |
2 | Summary of Significant Accounting Policies and Recently Issued Accounting Pronouncements | |
The accounting policies underlying the accompanying unaudited financial statements are those set forth in Note 2 to the financial statements for the year ended December 31, 2012 included in the Company’s Form 10 Registration Statement. | ||
(a) | Unaudited Interim Financial Information | |
The accompanying interim balance sheet as of September 30, 2013 and statements of operations for the three and nine months ended September 30, 2013 and 2012 and for the period from February 24, 2009 (inception) to September 30, 2013 are unaudited. The accompanying interim statements of cash flows for the nine months ended September 30, 2013 and 2012 and for the period from February 24, 2009 (inception) to September 30, 2013 are unaudited. The interim unaudited financial statements have been prepared in accordance with GAAP on the same basis as the annual audited financial statements and, in the opinion of management, reflect all adjustments necessary for a fair statement of the Company’s financial position as of September 30, 2013, its results of operations for the three and nine months ended September 30, 2013 and 2012 and for the period from February 24, 2009 (inception) to September 30, 2013, and the Company’s statements of cash flows for the nine months ended September 30, 2013 and 2012 and for the period from February 24, 2009 (inception) to September 30, 2013. The financial data and other information disclosed in these notes related to the three and nine month periods ended September 30, 2013 and 2012 and for the period from February 24, 2009 (inception) to September 30, 2013 are unaudited. The results for the three and nine months ended September 30, 2013 and 2012 and for the period from February 24, 2009 (inception) to September 30, 2013 are not necessarily indicative of results to be expected for the year ending December 31, 2013, any other interim periods or any future year or period. | ||
(b) | Recently Issued Accounting Pronouncements | |
There are no recently issued accounting standards which are not yet effective which the Company believes would materially impact the financial statements. | ||
Liquidity
Liquidity | 9 Months Ended | |
Sep. 30, 2013 | ||
Liquidity Disclosure [Abstract] | ' | |
Liquidity And Going Concern Disclosure [Text Block] | ' | |
3 | Liquidity | |
The Company has incurred operating losses and negative cash flow since inception, and had an accumulated deficit of $18.6 million as of September 30, 2013. Since inception, the Company has received funding for operating losses from Harvard Bioscience. The Company is currently investing significant resources in development and commercialization of devices for use by clinicians and researchers in the field of regenerative medicine. The Company expects to continue to incur operating losses and negative cash flows. | ||
As part of the Separation of the Company from Harvard Bioscience on October 31, 2013, Harvard Bioscience contributed $15.0 million to the Company as initial capital, and then spun-off its 100% interest in the Company's common stock to Harvard Bioscience shareholders via a pro-rata dividend on November 1, 2013. | ||
See Note 8 for a discussion of the Separation, initial capitalization and the subsequent spin-off of the Company. | ||
Related_Party_Transactions
Related Party Transactions | 9 Months Ended | |
Sep. 30, 2013 | ||
Related Party Transactions [Abstract] | ' | |
Related Party Transactions Disclosure [Text Block] | ' | |
4 | Related Party Transactions | |
Cost Allocations | ||
For each of the periods presented, HART’s operations were fully integrated with Harvard Bioscience, including executive services, finance, treasury, corporate income tax, human resources, legal services and investor relations. The accompanying financial statements reflect the application of certain estimates and allocations of operating expenses and the Company believes the methods used to allocate these operating expenses are reasonable. The allocation methods include time devoted to HART activities, headcount, percentage of operating expenses or other relevant measures. Allocations of expenses for these services were $0.7 million and $1.9 million for the three and nine month periods ended September 30, 2013, respectively. This compares with allocations of expenses for these services of $0.6 million and $1.6 million for the three and nine month periods ended September 30, 2012, respectively. These allocated expenses are reflected in the total operating expenses in the statements of operations, in addition to direct expenses. The Company’s financial statements may not be indicative of the future performance and do not necessarily reflect what the results of operations, financial position and cash flows would have been had the Company operated as an independent, publicly-traded company during the periods presented. | ||
Agreements with Harvard Bioscience | ||
In connection with the Separation of the Company from Harvard Bioscience, on October 31, 2013 the Company entered into a series of agreements with Harvard Bioscience, including a separation and distribution agreement, a transition services agreement, a tax sharing agreement, a sublicense agreement, a product distribution agreement, an intellectual property matters agreement and a sublease agreement. Some of these agreements will require us to pay fees to Harvard Bioscience for services provided subsequent to the separation. | ||
See Note 8 for a discussion of the Separation, initial capitalization and the subsequent spin-off of the Company. | ||
StockBased_Compensation
Stock-Based Compensation | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Share-based Compensation [Abstract] | ' | |||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | ' | |||||||||||||
5 | Stock-Based Compensation | |||||||||||||
Stock-based compensation expense for HART represents an allocation from Harvard Bioscience’s stock-based compensation expense for employees and directors whose time has been allocated to HART. | ||||||||||||||
Harvard Bioscience maintains its Third Amended and Restated 2000 Stock Option and Incentive Plan (as amended, the “Plan”) for the benefit of certain of its officers, directors and employees. The following disclosure represents the Company’s portion of the Plan maintained by Harvard Bioscience in which the employees and directors participated. All options and awards granted under the Plan consist of Harvard Bioscience common shares. Accordingly, the amounts presented are not necessarily indicative of future performance and do not necessarily reflect the results that the Company would have experienced as an independent, publicly-traded company for the periods presented. | ||||||||||||||
Employee options and awards become fully vested over a period of approximately three years and seven months, with the first quarter vesting after approximately seven months of the grant date and the remaining vesting equally over a period of three years thereafter. Options and awards granted to directors become fully vested over periods between one and three years. | ||||||||||||||
The fair value of options granted was determined using the Black-Scholes option-pricing model. The determination of fair value on the date of the grant is affected by the grant date market price of Harvard Bioscience common shares and a number of other variables. These variables include, but are not limited to, the expected stock price volatility of Harvard Bioscience common shares over the term of the awards and actual and projected stock option exercise behaviors. The fair value of restricted stock units was determined by the number of shares granted and the grant date market price of Harvard Bioscience common shares. | ||||||||||||||
The compensation expense recognized for all equity-based awards is net of estimated forfeitures and is recognized using the straight-line method over the applicable service period. | ||||||||||||||
The following summarizes the Company's portion of stock option transactions under the Plan from January 1, 2013 through September 30, 2013: | ||||||||||||||
Stock Options | Restricted Stock Units | |||||||||||||
Weighted | ||||||||||||||
Stock | Average | Restricted | ||||||||||||
Options | Exercise | Stock Units | Grant Date | |||||||||||
Outstanding | Price | Outstanding | Fair Value | |||||||||||
Balance at December 31, 2012 | 622,340 | $ | 4.07 | 184,264 | $ | 3.9 | ||||||||
Granted | 217,902 | 5.08 | 63,929 | 5.08 | ||||||||||
Exercised | -49,531 | 3.46 | - | - | ||||||||||
Vested (RSUs) | - | - | -55,247 | - | ||||||||||
Cancelled / forfeited | -29,972 | 4.34 | -10,892 | 3.83 | ||||||||||
Balance at September 30, 2013 | 760,739 | $ | 4.43 | 182,054 | $ | 4.31 | ||||||||
The following assumptions were used to estimate the fair value of stock options granted during the nine months ended September 30, 2013 and 2012: | ||||||||||||||
Nine months ended September 30, | ||||||||||||||
2013 | 2012 | |||||||||||||
Volatility | 57.2 | % | 55.09 | % | ||||||||||
Risk-free interest rate | 1.18 | % | 0.8 | % | ||||||||||
Expected holding period | 5.6 years | 6.0 years | ||||||||||||
Dividend yield | 0 | % | 0 | % | ||||||||||
The weighted average fair values of the options granted under the 2000 Plan during the nine months ended September 30, 2013 was $2.64, using the Black Scholes option-pricing model. Stock-based compensation expense for the three and nine months ended September 30, 2013 and 2012 consisted of stock-based compensation expense related to stock options and RSUs. | ||||||||||||||
Stock-based compensation expense for the three and nine months ended September 30, 2013 and 2012, was allocated as follows: | ||||||||||||||
Three months ended September 30, | Nine months ended September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
(in thousands) | ||||||||||||||
Sales and marketing | $ | - | $ | 1 | $ | - | $ | 1 | ||||||
General and administrative | 188 | 131 | 445 | 288 | ||||||||||
Research and development | 32 | 24 | 69 | 60 | ||||||||||
Total stock-based compensation | $ | 220 | $ | 156 | $ | 514 | $ | 349 | ||||||
The Company did not capitalize any stock-based compensation. | ||||||||||||||
Income_Taxes
Income Taxes | 9 Months Ended | |
Sep. 30, 2013 | ||
Income Tax Disclosure [Abstract] | ' | |
Income Tax Disclosure [Text Block] | ' | |
6 | Income Taxes | |
HART operations were historically included in Harvard Bioscience’s consolidated U.S. federal and certain state income tax returns. The provision for income taxes has been determined as if HART had filed separate tax returns for the periods presented. Accordingly, the effective tax rate of HART in the future years could vary from its historical effective tax rates depending on the future legal structure of HART and related tax elections. The historical deferred tax assets, including the net operating loss and credit carryforwards generated by HART will remain with Harvard Bioscience subsequent to the separation. | ||
At September 30, 2013 and December 31, 2012, the Company had deferred tax assets of $7.9 million and $5.0 million, respectively, which principally relate to net operating loss carryforwards. The Company has a full valuation allowance on its deferred tax assets. Significant management judgment is required in determining any valuation allowance recorded against deferred tax assets and liabilities. Due to the Company’s operating results, and its cumulative loss position and uncertainty surrounding its forecasts, the Company concluded that a full valuation allowance was needed to offset its deferred tax assets. | ||
Commitments_and_Contingent_Lia
Commitments and Contingent Liabilities | 9 Months Ended | |
Sep. 30, 2013 | ||
Commitments and Contingencies Disclosure [Abstract] | ' | |
Commitments and Contingencies Disclosure [Text Block] | ' | |
7 | Commitments and Contingent Liabilities | |
From time to time, we may be involved in various claims and legal proceedings arising in the ordinary course of business. There are no such matters pending that we expect to be material in relation to our business, financial condition, results of operations or cash flows. | ||
Subsequent_Events
Subsequent Events | 9 Months Ended | |
Sep. 30, 2013 | ||
Subsequent Events [Abstract] | ' | |
Subsequent Events [Text Block] | ' | |
8 | Subsequent Events | |
On November 1, 2013, the previously announced spin-off of the Company from Harvard Bioscience was completed. On that date, the Company became an independent company that operates the regenerative medicine business previously owned by Harvard Bioscience. The spin-off was completed through the distribution to Harvard Bioscience stockholders of record of all the shares of common stock of HART (the “Distribution”). In the Distribution, Harvard Bioscience distributed to its stockholders one share of HART common stock for every four shares of Harvard Bioscience common stock they owned as of the close of business on October 21, 2013, the record date for the Distribution. Fractional shares of HART common stock were not included in the Distribution. Instead, Registrar & Transfer Company aggregated fractional shares into whole shares, and sold the whole shares in the open market and distributed the aggregate net cash proceeds pro rata to each holder who otherwise would have been entitled to receive a fractional share in the Distribution. | ||
Effective with the spin-off, Harvard Bioscience contributed $15.0 million in cash to HART to fund our operations. Harvard Bioscience will no longer fund the Company’s operations following the Distribution. Based on the Company’s current operating plan, management believes the $15.0 million cash contribution will be sufficient to fund the Company’s operating expenses, working capital needs and capital expenditures for at least the next 18 months following the Distribution. The Company has based the estimates on assumptions that may prove wrong, and the Company may use available capital resources sooner than expected. Further, the Company’s strategy or business plan may change in the future, possibly changing the rate of spending or need for additional capital. The Company may need to secure future funding through equity offerings, debt financings, government funding, marketing and distribution arrangements and other collaborations or strategic alliances. The Company cannot assure it will be successful in raising additional capital on favorable terms or at all. In addition, to preserve the tax-free treatment to Harvard Bioscience of the Distribution, for the two-year period following the Distribution the Company will be limited in issuing equity securities beyond certain thresholds which may limit its ability to raise additional capital. | ||
Immediately following the Distribution, the Company had 30.0 million common shares authorized and 7.7 million common shares issued and outstanding. Additionally, the Company’s Board of Directors has the authority to issue up to 2.0 million shares of preferred stock and to determine the price, privileges and other terms of these shares, and may exercise this authority without any further approval of stockholders. | ||
In connection with the spin-off, certain required adjustments were made to the Harvard Bioscience outstanding equity compensation awards under their employee benefit plans. Each outstanding option to purchase Harvard Bioscience common stock was converted on the date of the Distribution into both an adjusted Harvard Bioscience option to purchase Harvard Bioscience common stock and an option to purchase HART common stock. Black-Scholes valuation modeling was used to determine the value that each Harvard Bioscience option had lost at the time of the Distribution. To ensure the holder maintained such lost value, 80% of such lost value was provided back to the holder by making appropriate adjustments to the share amount and exercise price of the existing Harvard Bioscience option and 20% of such lost value was provided back to the holder through the issuance of an option to purchase HART common stock. Similar to the adjustment of the existing Harvard Bioscience options, with respect to each unvested Harvard Bioscience restricted stock unit outstanding at the time of the Distribution, such Harvard Bioscience restricted stock units were converted on the date of the Distribution into both an adjusted Harvard Bioscience restricted stock unit and a HART restricted stock unit. The market prices of Harvard Bioscience and HART common stock were used to determine the value that each Harvard Bioscience restricted stock unit lost at the time of the Distribution and then to ensure the holder maintained such lost value, 80% of such lost value was provided back to the holder by making an appropriate increase of the share amount of the existing Harvard Bioscience restricted stock unit and 20% of such lost value was provided back to the holder through the issuance of a HART restricted stock unit. The share amounts and exercise prices of the adjusted Harvard Bioscience options and HART options, as well as the share amounts of the adjusted Harvard Bioscience restricted stock unit and HART restricted stock unit, were each adjusted and set in a manner to ensure the intrinsic value held by the holder pertaining to the existing Harvard Bioscience award just prior to the Distribution would be maintained immediately following the Distribution and were determined such that tax is not triggered under Section 409A of the Internal Revenue Code. As part of these required adjustments, the Company issued approximately 0.3 million HART options and approximately 0.02 million HART restricted stock units and Harvard Bioscience issued an additional approximately 1.7 million options and approximately 0.1 million restricted stock units to holders of outstanding Harvard Bioscience equity compensation awards. | ||
Prior to the Distribution, the Company adopted its 2013 Equity Incentive Plan. In November 2013, following the Distribution, the Company issued option grants to its employees and directors totaling approximately 2.0 million options. | ||
In connection with the spin-off, on October 31, 2013, the Company entered into various commercial agreements with Harvard Bioscience which contain many of the key provisions related to the Distribution. These agreements include: (i) a Separation and Distribution Agreement; (ii) an Intellectual Property Matters Agreement; (iii) a Product Distribution Agreement; (iv) a Tax Sharing Agreement; (v) a Transition Services Agreement; and (vi) a Sublease. | ||
Harvard Bioscience received a Supplemental Ruling to the Private Letter Ruling dated March 22, 2013 from the IRS to the effect that, among other things, the Separation and related distribution of all of the shares of the Company’s common stock by Harvard Bioscience will qualify as a transaction that is tax-free for U.S. federal income tax purposes under Section 355 and 368(a)(1)(D) of the Internal Revenue Code continuing in effect. The private letter and supplemental rulings and the tax opinion that Harvard Bioscience expects to receive from Burns & Levinson LLP, special counsel to Harvard Bioscience, rely and will rely on certain representations, assumptions and undertakings, including those relating to the past and future conduct of the HART business, and neither the private letter and supplemental rulings nor the opinion would be valid if such representations, assumptions and undertakings were incorrect. Moreover, the private letter and supplemental rulings do not address all the issues that are relevant to determining whether the Distribution will qualify for tax-free treatment. Notwithstanding the private letter and supplemental rulings and opinion, the IRS could determine the Distribution should be treated as a taxable transaction for U.S. federal income tax purposes if, among other reasons, it determines any of the representations, assumptions or undertakings that were included in the request for the private letter and supplemental rulings are false or have been violated or if it disagrees with the conclusions in the opinion that are not covered by the IRS ruling. | ||
To preserve the tax-free treatment to Harvard Bioscience of the Separation and Distribution, for the two-year period following the Distribution the Company may be limited, except in specified circumstances, from: | ||
· entering into certain transactions pursuant to which all or a portion of the Company’s stock would be acquired, whether by merger or otherwise; | ||
· issuing equity securities beyond certain thresholds; | ||
· repurchasing the Company’s common stock; | ||
· ceasing to actively conduct The Company’s regenerative medicine business; and | ||
· taking or failing to take any other action that prevents the Separation and Distribution and related transactions from being tax-free. | ||
If the Distribution fails to qualify for tax-free treatment, in general, Harvard Bioscience would be subject to tax as if it had sold the Company’s common stock in a taxable sale for its fair market value, and Harvard Bioscience stockholders who receive shares of HART common stock in the Distribution would be subject to tax as if they had received a taxable Distribution equal to the fair market value of such shares. | ||
Under the tax sharing agreement between Harvard Bioscience and the Company, the Company would generally be required to indemnify Harvard Bioscience against any tax resulting from the Distribution to the extent that such tax resulted from (i) an acquisition of all or a portion of our stock or assets, whether by merger or otherwise, (ii) other actions or failures to act by the Company, or (iii) any of the Company’s representations or undertakings being incorrect or violated. The Company’s indemnification obligations to Harvard Bioscience and its subsidiaries, officers and directors are not limited by any maximum amount. If the Company is required to indemnify Harvard Bioscience or such other persons under the circumstances set forth in the tax sharing agreement, the Company may be subject to substantial liabilities. | ||
Prior to the Distribution, the Company’s Board of Directors adopted a Shareholder Rights Plan and declared a dividend distribution of one preferred stock purchase right for each outstanding share of the Company’s common stock. Initially, these rights will not be exercisable and will trade with the shares of the Company’s common stock. Under the Shareholder Rights Plan, the rights generally will become exercisable if a person becomes an “acquiring person” by acquiring 20% or more of the common stock of the Company or if a person commences a tender offer that could result in that person owning 20% or more of the common stock of the Company. If a person becomes an acquiring person, each holder of a right (other than the acquiring person) would be entitled to purchase, at the then-current exercise price, such number of shares of preferred stock which are equivalent to shares of the Company’s common stock having a value of twice the exercise price of the right. If the Company is acquired in a merger or other business combination transaction after any such event, each holder of a right would then be entitled to purchase, at the then-current exercise price, shares of the acquiring company’s common stock having a value of twice the exercise price of the right. | ||
Summary_of_Significant_Account1
Summary of Significant Accounting Policies and Recently Issued Accounting Pronouncements (Policies) | 9 Months Ended | |
Sep. 30, 2013 | ||
Accounting Policies [Abstract] | ' | |
Interim Financial Information Policy [Policy Text Block] | ' | |
(a) | Unaudited Interim Financial Information | |
The accompanying interim balance sheet as of September 30, 2013 and statements of operations for the three and nine months ended September 30, 2013 and 2012 and for the period from February 24, 2009 (inception) to September 30, 2013 are unaudited. The accompanying interim statements of cash flows for the nine months ended September 30, 2013 and 2012 and for the period from February 24, 2009 (inception) to September 30, 2013 are unaudited. The interim unaudited financial statements have been prepared in accordance with GAAP on the same basis as the annual audited financial statements and, in the opinion of management, reflect all adjustments necessary for a fair statement of the Company’s financial position as of September 30, 2013, its results of operations for the three and nine months ended September 30, 2013 and 2012 and for the period from February 24, 2009 (inception) to September 30, 2013, and the Company’s statements of cash flows for the nine months ended September 30, 2013 and 2012 and for the period from February 24, 2009 (inception) to September 30, 2013. The financial data and other information disclosed in these notes related to the three and nine month periods ended September 30, 2013 and 2012 and for the period from February 24, 2009 (inception) to September 30, 2013 are unaudited. The results for the three and nine months ended September 30, 2013 and 2012 and for the period from February 24, 2009 (inception) to September 30, 2013 are not necessarily indicative of results to be expected for the year ending December 31, 2013, any other interim periods or any future year or period. | ||
New Accounting Pronouncements, Policy [Policy Text Block] | ' | |
(b) | Recently Issued Accounting Pronouncements | |
There are no recently issued accounting standards which are not yet effective which the Company believes would materially impact the financial statements. | ||
StockBased_Compensation_Tables
Stock-Based Compensation (Tables) | 9 Months Ended | |||||||||||||
Sep. 30, 2013 | ||||||||||||||
Share-based Compensation [Abstract] | ' | |||||||||||||
Schedule of Share-based Compensation, Activity [Table Text Block] | ' | |||||||||||||
The following summarizes the Company's portion of stock option transactions under the Plan from January 1, 2013 through September 30, 2013: | ||||||||||||||
Stock Options | Restricted Stock Units | |||||||||||||
Weighted | ||||||||||||||
Stock | Average | Restricted | ||||||||||||
Options | Exercise | Stock Units | Grant Date | |||||||||||
Outstanding | Price | Outstanding | Fair Value | |||||||||||
Balance at December 31, 2012 | 622,340 | $ | 4.07 | 184,264 | $ | 3.9 | ||||||||
Granted | 217,902 | 5.08 | 63,929 | 5.08 | ||||||||||
Exercised | -49,531 | 3.46 | - | - | ||||||||||
Vested (RSUs) | - | - | -55,247 | - | ||||||||||
Cancelled / forfeited | -29,972 | 4.34 | -10,892 | 3.83 | ||||||||||
Balance at September 30, 2013 | 760,739 | $ | 4.43 | 182,054 | $ | 4.31 | ||||||||
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | ' | |||||||||||||
The following assumptions were used to estimate the fair value of stock options granted during the nine months ended September 30, 2013 and 2012: | ||||||||||||||
Nine months ended September 30, | ||||||||||||||
2013 | 2012 | |||||||||||||
Volatility | 57.2 | % | 55.09 | % | ||||||||||
Risk-free interest rate | 1.18 | % | 0.8 | % | ||||||||||
Expected holding period | 5.6 years | 6.0 years | ||||||||||||
Dividend yield | 0 | % | 0 | % | ||||||||||
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Table Text Block] | ' | |||||||||||||
Stock-based compensation expense for the three and nine months ended September 30, 2013 and 2012, was allocated as follows: | ||||||||||||||
Three months ended September 30, | Nine months ended September 30, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||
(in thousands) | ||||||||||||||
Sales and marketing | $ | - | $ | 1 | $ | - | $ | 1 | ||||||
General and administrative | 188 | 131 | 445 | 288 | ||||||||||
Research and development | 32 | 24 | 69 | 60 | ||||||||||
Total stock-based compensation | $ | 220 | $ | 156 | $ | 514 | $ | 349 | ||||||
Overview_and_Basis_of_Presenta1
Overview and Basis of Presentation (Details Textual) (Subsequent Event [Member], USD $) | 1 Months Ended |
In Millions, unless otherwise specified | Nov. 30, 2013 |
Subsequent Event [Member] | ' |
Overview And Basis Of Presentation [Line Items] | ' |
Proceeds from Contributions from Parent | $15 |
Liquidity_Details_Textual
Liquidity (Details Textual) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Nov. 30, 2013 | Oct. 31, 2013 |
Subsequent Event [Member] | Subsequent Event [Member] | |||
Parent Company [Member] | ||||
Liquidity Disclosure [Line Items] | ' | ' | ' | ' |
Retained Earnings (Accumulated Deficit) | ($18,567,000) | ($12,398,000) | ' | ' |
Proceeds from Contributions from Parent | ' | ' | $15,000,000 | ' |
Sale of Stock, Percentage of Ownership before Transaction | ' | ' | ' | 100.00% |
Related_Party_Transactions_Det
Related Party Transactions (Details Textual) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Related Party Transaction [Line Items] | ' | ' | ' | ' |
Costs and Expenses, Related Party | $0.70 | $0.60 | $1.90 | $1.60 |
StockBased_Compensation_Detail
Stock-Based Compensation (Details) (USD $) | 9 Months Ended |
Sep. 30, 2013 | |
Share Based Compensation Activity [Line Items] | ' |
Stock Options Outstanding, Balance | 622,340 |
Stock Options Outstanding, Granted | 217,902 |
Stock Options Outstanding, Exercised | -49,531 |
Stock Options Outstanding, Cancelled / forfeited | -29,972 |
Stock Options Outstanding, Balance | 760,739 |
Weighted Average Exercise Price, Balance | $4.07 |
Weighted Average Exercise Price, Granted | $5.08 |
Weighted Average Exercise Price, Exercised | $3.46 |
Weighted Average Exercise Price, Cancelled / forfeited | $4.34 |
Weighted Average Exercise Price, Balance | $4.43 |
Restricted Stock Units (RSUs) [Member] | ' |
Share Based Compensation Activity [Line Items] | ' |
Restricted Stock Units Outstanding, Balance | 184,264 |
Restricted Stock Units Outstanding, Granted | 63,929 |
Restricted Stock Units Outstanding, Vested (RSUs) | -55,247 |
Restricted Stock Units Outstanding, Cancelled / forfeited | -10,892 |
Restricted Stock Units Outstanding, Balance | 182,054 |
GrantDate Fair Value, Balance | $3.90 |
GrantDate Fair Value, Granted | $5.08 |
GrantDate Fair Value, Vested (RSUs) | $0 |
GrantDate Fair Value, Cancelled / forfeited | $3.83 |
GrantDate Fair Value, Balance | $4.31 |
StockBased_Compensation_Detail1
Stock-Based Compensation (Details 1) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Share Based Payment Award Stock Options Valuation Assumptions [Line Items] | ' | ' |
Volatility | 57.20% | 55.09% |
Risk-free interest rate | 1.18% | 0.80% |
Expected holding period | '5 years 7 months 6 days | '6 years |
Dividend yield | 0.00% | 0.00% |
StockBased_Compensation_Detail2
Stock-Based Compensation (Details 2) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' |
Total stock-based compensation | $220 | $156 | $514 | $349 |
Selling and Marketing Expense [Member] | ' | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' |
Total stock-based compensation | 0 | 1 | 0 | 1 |
General and Administrative Expense [Member] | ' | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' |
Total stock-based compensation | 188 | 131 | 445 | 288 |
Research and Development Expense [Member] | ' | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' |
Total stock-based compensation | $32 | $24 | $69 | $60 |
StockBased_Compensation_Detail3
Stock-Based Compensation (Details Textual) (USD $) | 9 Months Ended |
Sep. 30, 2013 | |
Director [Member] | Minimum [Member] | ' |
Stock Based Compensation [Line Items] | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | '1 year |
Director [Member] | Maximum [Member] | ' |
Stock Based Compensation [Line Items] | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | '3 years |
Employee Stock Option [Member] | ' |
Stock Based Compensation [Line Items] | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | '3 years 7 months |
Stock Option and Incentive Plan 2000 [Member] | ' |
Stock Based Compensation [Line Items] | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | 2.64 |
Income_Taxes_Details_Textual
Income Taxes (Details Textual) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
In Millions, unless otherwise specified | ||
Operating Loss Carryforwards [Line Items] | ' | ' |
Deferred Tax Assets, Operating Loss Carryforwards, Total | $7.90 | $5 |
Subsequent_Events_Details_Text
Subsequent Events (Details Textual) (USD $) | 1 Months Ended | 9 Months Ended |
In Millions, except Share data, unless otherwise specified | Nov. 30, 2013 | Sep. 30, 2013 |
Subsequent Event [Line Items] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | ' | 217,902 |
Subsequent Event [Member] | ' | ' |
Subsequent Event [Line Items] | ' | ' |
Percentage of Lost Value Adjusted By Increasing Share Price of Parent Company | 80.00% | ' |
Percentage of Lost Value Adjusted By Issuing Stock Option To Purchase Common Stock | 20.00% | ' |
Proceeds from Contributions from Parent | $15 | ' |
Spin off Transactions Conversion Ratio | 'Harvard Bioscience distributed to its stockholders one share of HART common stock for every four shares of Harvard Bioscience common stock outstanding as of the close of business on October 21, 2013, the record date for the Distribution. | ' |
Common Stock, Shares Authorized | ' | 30,000,000 |
Common Stock, Shares, Issued | ' | 7,700,000 |
Common Stock, Shares, Outstanding | ' | 7,700,000 |
Preferred Stock, Shares Authorized | ' | 2,000,000 |
Acquisition Of Common Stock By Third Party, Description | ' | 'A third party that acquires 20% or more of the Companys common stock could suffer substantial dilution of its ownership interest through the issuance of common stock to all stockholders other than the acquiring person. |
Minimum Percentage of Common Stock to be Acquired by Acquiring Person Under Shareholder Rights Plan | 20.00% | ' |
Subsequent Event [Member] | Equity Incentive Plan [Member] | ' | ' |
Subsequent Event [Line Items] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | ' | 2,000,000 |
Subsequent Event [Member] | Restricted Stock Units (RSUs) [Member] | ' | ' |
Subsequent Event [Line Items] | ' | ' |
Equity Instruments Issued Part of Spin off Transactions | 20,000 | ' |
Subsequent Event [Member] | Restricted Stock Units (RSUs) [Member] | Parent Company [Member] | ' | ' |
Subsequent Event [Line Items] | ' | ' |
Equity Instruments Issued Part of Spin off Transactions | 100,000 | ' |
Subsequent Event [Member] | Employee Stock Option [Member] | ' | ' |
Subsequent Event [Line Items] | ' | ' |
Equity Instruments Issued Part of Spin off Transactions | 300,000 | ' |
Subsequent Event [Member] | Employee Stock Option [Member] | Parent Company [Member] | ' | ' |
Subsequent Event [Line Items] | ' | ' |
Equity Instruments Issued Part of Spin off Transactions | 1,700,000 | ' |