Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2013 | Nov. 01, 2013 | |
Document And Entity Information | ' | ' |
Entity Registrant Name | 'BIOLIFE SOLUTIONS INC | ' |
Entity Central Index Key | '0000834365 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Sep-13 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Is Entity a Well-known Seasoned Issuer? | 'No | ' |
Is Entity a Voluntary Filer? | 'No | ' |
Is Entity's Reporting Status Current? | 'Yes | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Common Stock, Shares Outstanding | ' | 70,414,877 |
Document Fiscal Period Focus | 'Q3 | ' |
Document Fiscal Year Focus | '2013 | ' |
Balance_Sheets_Unaudited
Balance Sheets (Unaudited) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Current assets | ' | ' |
Cash and cash equivalents | $79,287 | $196,478 |
Accounts receivable, trade, net of allowance for doubtful accounts of $1,100 at September 30, 2013 and December 31, 2012 | 1,026,858 | 600,153 |
Inventories | 409,195 | 656,397 |
Prepaid expenses and other current assets | 140,077 | 174,731 |
Total current assets | 1,655,417 | 1,627,759 |
Property and equipment | ' | ' |
Leasehold improvements | 1,121,362 | 919,035 |
Furniture and computer equipment | 300,143 | 288,725 |
Manufacturing and other equipment | 763,135 | 741,771 |
Subtotal | 2,184,640 | 1,949,531 |
Less: Accumulated depreciation | -798,335 | -615,085 |
Net property and equipment | 1,386,305 | 1,334,446 |
Long term deposits | 36,166 | 36,166 |
Deferred financing costs, net | 129,136 | 171,458 |
Total assets | 3,207,024 | 3,169,829 |
Current liabilities | ' | ' |
Accounts payable | 840,498 | 862,492 |
Accrued expenses and other current liabilities | 52,532 | 8,495 |
Accrued compensation | 224,625 | 363,101 |
Deferred rent | 111,250 | 111,250 |
Deferred revenue | ' | 20,000 |
Total current liabilities | 1,228,905 | 1,365,338 |
Long term liabilities | ' | ' |
Promissory notes payable, related parties | 10,603,127 | 10,603,127 |
Accrued interest, related parties | 3,316,055 | 2,759,391 |
Deferred rent, long term | 918,307 | 838,829 |
Deferred revenue, long term | ' | 89,167 |
Total liabilities | 16,066,394 | 15,655,852 |
Shareholders' equity (deficiency) | ' | ' |
Common stock, $0.001 par value; 150,000,000 shares authorized, 70,414,877 and 69,679,854 shares issued and outstanding at September 30, 2013 and December 31, 2012, respectively | 70,415 | 69,680 |
Additional paid-in capital | 43,480,884 | 43,255,374 |
Accumulated deficit | -56,410,669 | -55,811,077 |
Total shareholders' equity (deficiency) | -12,859,370 | -12,486,023 |
Total liabilities and shareholders' equity (deficiency) | $3,207,024 | $3,169,829 |
Balance_Sheets_Parenthetical
Balance Sheets (Parenthetical) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Assets | ' | ' |
Accounts receivable allowances | $1,100 | $1,100 |
Stockholders Equity | ' | ' |
Common stock, par value | $0.00 | $0.00 |
Common stock, authorized | 150,000,000 | 150,000,000 |
Common stock, issued | 70,414,877 | 69,679,854 |
Common stock, outstanding | 70,414,877 | 69,679,854 |
Statements_of_Operations_Unaud
Statements of Operations (Unaudited) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Revenue | ' | ' | ' | ' |
Product sales | $2,170,491 | $1,676,480 | $6,051,354 | $3,599,770 |
Licensing revenue | ' | 5,000 | 609,167 | 15,000 |
Total revenue | 2,170,491 | 1,681,480 | 6,660,521 | 3,614,770 |
Cost of product sales | 1,281,634 | 1,086,031 | 3,817,737 | 2,073,909 |
Gross profit | 888,857 | 595,449 | 2,842,784 | 1,540,861 |
Operating expenses | ' | ' | ' | ' |
Research and development | 160,528 | 110,689 | 361,404 | 353,837 |
Sales and marketing | 208,080 | 145,735 | 625,600 | 379,774 |
General and administrative | 630,342 | 487,733 | 1,856,386 | 1,441,852 |
Total operating expenses | 998,950 | 744,157 | 2,843,390 | 2,175,463 |
Operating loss | -110,093 | -148,708 | -606 | -634,602 |
Other income (expenses) | ' | ' | ' | ' |
Other income | ' | ' | ' | 94,253 |
Interest expense | -185,554 | -185,554 | -556,664 | -547,875 |
Gain on disposal of property and equipment | ' | 431 | ' | 368 |
Amortization of deferred financing costs | -14,263 | -18,397 | -42,322 | -60,142 |
Total other income (expenses) | -199,817 | -203,520 | -598,986 | -513,396 |
Net Loss | ($309,910) | ($352,228) | ($599,592) | ($1,147,998) |
Basic and diluted net loss per common share | $0 | ($0.01) | ($0.01) | ($0.02) |
Basic and diluted weighted average common shares used to calculate net loss per common share | 70,106,312 | 69,679,854 | 70,005,207 | 69,679,854 |
Statements_of_Cash_Flows_Unaud
Statements of Cash Flows (Unaudited) (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Cash flows from operating activities | ' | ' |
Net loss | ($599,592) | ($1,147,998) |
Adjustments to reconcile net loss to net cash used in operating activities | ' | ' |
Depreciation | 183,250 | 110,018 |
Gain on disposal of property and equipment | ' | -368 |
Stock-based compensation expense | 175,787 | 154,747 |
Amortization of deferred financing costs | 42,322 | 60,142 |
Lease incentives received from landlord, net of amortization of deferred rent related to lease incentives | 88,258 | 766,082 |
Change in operating assets and liabilities | ' | ' |
(Increase) Decrease in Accounts receivable, trade | -426,705 | -250,800 |
Inventories | 247,202 | -343,255 |
Prepaid expenses and other current assets | 34,654 | -32,470 |
Increase (Decrease) in | ' | ' |
Accounts payable | -21,994 | 661,180 |
Accrued compensation and other current liabilities | -94,439 | 129,786 |
Accrued interest, related parties | 556,664 | 547,875 |
Deferred rent | -8,780 | 46,189 |
Deferred revenue | -109,167 | -15,000 |
Net cash used in operating activities | 67,460 | 686,128 |
Cash flows from investing activities | ' | ' |
Cash received from sale of property and equipment | ' | 1,400 |
Purchase of property and equipment | -235,109 | -1,171,863 |
Net cash used in investing activities | -235,109 | -1,170,463 |
Proceeds from exercise of common stock options and warrants | 50,458 | ' |
Proceeds from notes payable | ' | 475,000 |
Net cash provided by financing activity | 50,458 | 475,000 |
Net decrease in cash and cash equivalents | -117,191 | -9,335 |
Cash and cash equivalents - beginning of period | 196,478 | 16,864 |
Cash and cash equivalents - end of period | 79,287 | 7,529 |
Non-cash financing activities | ' | ' |
Deferred financing costs from issuance of warrants (See Note 7) | ' | $137,955 |
1_Business
1. Business | 9 Months Ended |
Sep. 30, 2013 | |
Notes to Financial Statements | ' |
NOTE 1 - Business | ' |
BioLife Solutions, Inc. ("BioLife,” “us,” “we,” “our,” or the “Company”) develops, manufactures and markets patented hypothermic storage and cryopreservation solutions for cells and tissues. The Company’s proprietary HypoThermosol® and CryoStor® platform of solutions are marketed to academic and commercial organizations involved in the biobanking, drug discovery, and regenerative medicine markets. BioLife’s products are serum-free and protein-free, fully defined, and are formulated to reduce preservation-induced, delayed-onset cell damage and death. BioLife’s enabling technology provides academic and clinical researchers significant improvements in post-thaw cell, tissue, and organ viability and function. Additionally, for our direct, distributor, and contract customers, we perform custom formulation, fill, and finish services. |
2_Liquidity
2. Liquidity | 9 Months Ended |
Sep. 30, 2013 | |
Notes to Financial Statements | ' |
NOTE 2 - Liquidity | ' |
We have incurred annual operating losses since inception, and may continue to incur operating losses. As of September 30, 2013, our accumulated deficit was $56.4 million. We may not be able to successfully achieve or sustain profitability. Successful transition to profitable operations is dependent upon achieving a level of revenues adequate to support our cost structure. | |
3_Summary_of_Significant_Accou
3. Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2013 | |
Notes to Financial Statements | ' |
NOTE 3 - Summary of Significant Accounting Policies | ' |
Basis of Presentation | |
We have prepared the accompanying unaudited financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Pursuant to these rules and regulations, we have condensed or omitted certain information and footnote disclosures we normally include in our annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). In management’s opinion, we have made all adjustments (consisting only of normal, recurring adjustments) necessary to fairly present our financial position, results of operations and cash flows. Our interim period operating results do not necessarily indicate the results that may be expected for any other interim period or for the full year. These financial statements and accompanying notes should be read in conjunction with the financial statements and notes thereto in our Annual Report on Form 10-K for the year ended December 31, 2012 on file with the SEC. | |
There have been no material changes to our significant accounting policies as compared to the significant accounting policies described in the financial statements in our Annual Report on Form 10-K for the year ended December 31, 2012. | |
Fair value of financial instruments | |
The carrying value of cash and cash equivalents approximate their fair value (determined based on level 1 inputs in the fair value hierarchy) based on the short-term nature of these financial instruments. The carrying values of notes payable and accrued interest approximate their fair value (determined based on level 3 inputs in the fair value hierarchy) because interest rates of notes payable approximate market interest rates. | |
Revenue recognition – license revenue | |
Revenue related to licensing agreement activity is recognized over the estimated term of the service period or when no further performance obligations exist. Payments received in advance of the related licensing agreement period are recorded as deferred revenue and recognized when earned. During the first quarter of 2013, we negotiated a new intellectual property license agreement that provides one customer with limited access to our intellectual property under certain conditions. This customer paid upfront fees for the specific rights and there are no future performance obligations. The upfront fee of $500,000 was recognized as revenue during the quarter and $109,167 in deferred revenue associated with this customer was recognized as all future performance obligations associated with the previous license agreements were cancelled with the agreement signed in the first quarter of 2013. | |
Concentrations of credit risk and business risk | |
In the three and nine months ended September 30, 2013, we derived approximately 54% and 50%, respectively, of our product revenue from our relationship with one contract manufacturing customer. No other customer accounted for more than 10% of revenue in the three or nine months ended September 30, 2013. At September 30, 2013, one contract manufacturing customer accounted for 39% of gross accounts receivable and no other customer accounted for more than 10% of gross accounts receivable. In the three and nine months ended September 30, 2012, we derived approximately 60% and 38%, respectively, of our product revenue from our relationship with one contract manufacturing customer, which we commenced deliveries to in the second quarter of 2012. At December 31, 2012, one contract manufacturing customer accounted for 36% of gross accounts receivable and one other customer accounted for 11% of gross accounts receivable. All license revenue recognized in the nine months ended September 30, 2013 and 2012 was derived from one customer. | |
Recent Accounting Pronouncements | |
There have been no new accounting pronouncements during the nine month period ended September 30, 2013, as compared to our Annual Report on Form 10-K for the year ended December 31, 2012, that are of significance, or potential significance, to us. | |
Stock-based compensation | |
The value, at the date of grant, of stock awarded under restricted stock unit grants is amortized as compensation expense over the vesting period. | |
4_Inventories
4. Inventories | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Notes to Financial Statements | ' | ||||||||
NOTE 4 - Inventories | ' | ||||||||
Inventory consists of the following at September 30, 2013 and December 31, 2012: | |||||||||
September 30, | December 31, | ||||||||
2013 | 2012 | ||||||||
Raw materials | $ | 192,096 | $ | 398,510 | |||||
Work in progress | 150,784 | 116,319 | |||||||
Finished goods | 66,315 | 141,568 | |||||||
Total | $ | 409,195 | $ | 656,397 | |||||
During the nine months ended September 30, 2012, the Company recorded a nonreciprocal, non-monetary receipt of inventory in the amount of $87,215. This amount was also recorded as Other Income in the Statement of Operations during the nine month period ended September 30, 2012. The transaction was accounted for at fair value on the date the inventory was received. |
5_Deferred_Rent
5. Deferred Rent | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Notes to Financial Statements | ' | ||||||||
NOTE 5 - Deferred Rent | ' | ||||||||
Deferred rent consists of the following at September 30, 2013 and December 31, 2012: | |||||||||
September 30, | December 31, | ||||||||
2013 | 2012 | ||||||||
Landlord-funded leasehold improvements | $ | 1,059,186 | $ | 900,989 | |||||
Less accumulated amortization | (109,127 | ) | (39,187 | ) | |||||
Total (current portion $111,250) | 950,059 | 861,802 | |||||||
Straight line rent adjustment | 79,498 | 88,277 | |||||||
Total deferred rent | $ | 1,029,557 | $ | 950,079 | |||||
During the nine month period ended September 30, 2013, the Company recorded an additional $191,583 in deferred rent relating to leasehold improvements funded by the Company’s landlord as incentives under the facility lease, offset by payments to the landlord of $33,386. During the three and nine month periods ended September 30, 2013, the Company recorded $23,925 and $69,940, respectively, in deferred rent amortization of these landlord funded leasehold improvements. | |||||||||
Straight line rent adjustment represents the difference between cash rent payments and the recognition of rent expense on a straight-line basis over the terms of the lease. |
6_Sharebased_Compensation
6. Share-based Compensation | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Notes to Financial Statements | ' | ||||||||||||||||
NOTE 6 - Share-based Compensation | ' | ||||||||||||||||
Stock Options | |||||||||||||||||
The fair value of share-based payments made with stock options to employees and non-employee directors was estimated on the measurement date using the Black-Scholes model using the following weighted average assumptions. | |||||||||||||||||
Three Month Period Ended | Nine Month Period Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Risk free interest rate | 2.25% | 0.71% | 2.25% | 0.78% | |||||||||||||
Dividend yield | 0.00% | 0.00% | 0.00% | 0.00% | |||||||||||||
Expected term (in years) | 7 | 7 | 7 | 6.6 | |||||||||||||
Volatility | 105.20% | 101.57% | 105.20% | 102.76% | |||||||||||||
We recorded stock compensation expense for the three and nine month periods ended September 30, 2013 and 2012, as follows: | |||||||||||||||||
Three Month Period Ended | Nine Month Period Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Research and development costs | $ | 5,893 | $ | 6,954 | $ | 19,801 | $ | 20,441 | |||||||||
Sales and marketing costs | 1,265 | 630 | 2,525 | 840 | |||||||||||||
General and administrative costs | 71,294 | 42,720 | 120,608 | 118,542 | |||||||||||||
Cost of product sales | 9,782 | 6,830 | 32,853 | 14,924 | |||||||||||||
Total | $ | 88,234 | $ | 57,134 | $ | 175,787 | $ | 154,747 | |||||||||
Management applies an estimated forfeiture rate that is derived from historical employee termination data. The estimated forfeiture rate applied for the three and nine month periods ended September 30, 2013 and 2012 was approximately 7%. | |||||||||||||||||
The following is a summary of stock option activity for the nine month period ended September 30, 2013, and the status of stock options outstanding at September 30, 2013: | |||||||||||||||||
Nine Month Period Ended | |||||||||||||||||
30-Sep-13 | |||||||||||||||||
Wtd. Avg. | |||||||||||||||||
Exercise | |||||||||||||||||
Shares | Price | ||||||||||||||||
Outstanding at beginning of year | 20,329,602 | $ | 0.09 | ||||||||||||||
Granted | 175,000 | 0.75 | |||||||||||||||
Exercised | (355,855 | ) | 0.07 | ||||||||||||||
Unvested Shares Forfeited | (380,000 | ) | 0.12 | ||||||||||||||
Expired | (25,000 | ) | 0.08 | ||||||||||||||
Outstanding at September 30, 2013 | 19,743,747 | $ | 0.09 | ||||||||||||||
Stock options exercisable at September 30, 2013 | 16,261,588 | $ | 0.08 | ||||||||||||||
Fair value of options granted during the three and nine months ended September 30, 2013 was approximately $0.63. Weighted average fair value of options granted was $0.11 and $0.08 per share for the three and nine month periods ended September 30, 2012, respectively | |||||||||||||||||
As of September 30, 2013, there was $13,838,469 of aggregate intrinsic value of outstanding stock options, including $11,565,711 of aggregate intrinsic value of exercisable stock options. Intrinsic value is the total pretax intrinsic value for all “in-the-money” options (i.e., the difference between the Company’s closing stock price on the last trading day of the quarter and the exercise price, multiplied by the number of shares) that would have been received by the option holders had all option holders exercised their options on September 30, 2013. This amount will change based on the fair market value of the Company’s stock. | |||||||||||||||||
As of September 30, 2013, we had approximately $342,383 of unrecognized compensation expense related to unvested stock options. We expect to recognize this compensation expense over a weighted average period of approximately 2.1 years. | |||||||||||||||||
Restricted Stock | |||||||||||||||||
During the three months ended September 30, 2013, the Company granted 66,667 restricted stock units to a Director under the 2013 Performance Incentive Plan, which was approved on June 20, 2013. The stock units were granted at the price of $0.75 per share, which was the fair value of the stock on the grant date. The Company recognized $50,000 in stock compensation related to this grant in the third quarter of 2013, which is included in General and Administrative Expenses. This grant was converted to Common Stock upon grant, as it was fully vested on the date of the grant. At September 30, 2013, there were no unvested restricted stock units outstanding. |
7_Warrants
7. Warrants | 9 Months Ended |
Sep. 30, 2013 | |
Notes to Financial Statements | ' |
NOTE 7 - Warrants | ' |
At September 30, 2013, we had 7,406,250 warrants outstanding and exercisable with a weighted average exercise price of $0.07. There were no warrants issued, forfeited or expired in the nine month period ended September 30, 2013. During the nine months ended September 30, 2013, 312,500 warrants were exercised with a value of $0.08 per share, for proceeds of $25,000. The outstanding warrants have expiration dates between November 2013 and May 2017. | |
During the quarter ended June 30, 2012, the Company issued a total of 2,000,000 warrants to the current note holders as consideration for restructuring of their existing promissory notes. The warrants were valued using the Black-Scholes option pricing model resulting in a total value of $137,995 which was recorded as Deferred Financing Costs on the Balance Sheet and is being amortized to expense over the revised term of the notes. | |
During the three and nine month periods ended September 30, 2013, the Company recorded $14,263 and $42,322, respectively, in amortization of deferred financing costs. During the three and nine month periods ended September 30, 2012, the Company recorded $18,397 and $60,142, respectively, in amortization of deferred financing costs. |
8_Net_Loss_per_Common_Share
8. Net Loss per Common Share | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Notes to Financial Statements | ' | ||||||||||||||||
NOTE 8 - Net Loss per Common Share | ' | ||||||||||||||||
Basic net loss per common share is calculated by dividing the net loss by the weighted average number of common shares outstanding during the period. Diluted earnings per share is calculated using the weighted average number of common shares outstanding plus dilutive common stock equivalents outstanding during the period. Common stock equivalents are excluded for the three and nine month periods ended September 30, 2013 and 2012, respectively, since the effect is anti-dilutive due to the Company’s net losses. Common stock equivalents include stock options and warrants. | |||||||||||||||||
Basic weighted average common shares outstanding, and the potentially dilutive securities excluded from loss per share computations because they are anti-dilutive, are as follows as of September 30, 2013 and 2012, respectively: | |||||||||||||||||
Three Month Period Ended | Nine Month Period Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Basic and diluted weighted average common stock shares outstanding | 70,106,312 | 69,679,854 | 70,005,207 | 69,679,854 | |||||||||||||
Potentially dilutive securities excluded from loss per share computations: | |||||||||||||||||
Common stock options | 19,743,747 | 20,248,227 | 19,743,747 | 20,248,227 | |||||||||||||
Common stock purchase warrants | 7,406,250 | 7,718,750 | 7,406,250 | 7,718,750 | |||||||||||||
9_Commitments_Contingencies
9. Commitments & Contingencies | 9 Months Ended |
Sep. 30, 2013 | |
Notes to Financial Statements | ' |
NOTE 9 - Commitments & Contingencies | ' |
Legal Proceedings | |
We are a party in a number of legal matters filed in the state of New York by the Company or John G. Baust, the Company’s former Chief Executive Officer, and members of his extended family, that are described more fully in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012. During the nine months ended September 30, 2013, there were no significant developments related to these complaints. We have not made any accrual related to future litigation outcomes as of September 30, 2013 and December 31, 2012. | |
Leases | |
In November of 2012 we signed an amended lease agreement, which expanded the premises leased by us from the landlord to approximately 26,000 rentable square feet. The term of the lease was extended to July 31, 2021. The amendment includes two (2) options to extend the term of the lease, each option is for an additional period of five (5) years, with the first extension term commencing, if at all, on August 1, 2021, and the second extension term commencing, if at all, immediately following the expiration of the first extension term. In accordance with the amended lease agreement, our monthly base rent increased to approximately $46,000 effective August 1, 2013, with scheduled annual increases each August. We will be required to pay an amount equal to our proportionate share of certain taxes and operating expenses. | |
3_Summary_of_Significant_Accou1
3. Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2013 | |
Notes to Financial Statements | ' |
Basis of Presentation | ' |
We have prepared the accompanying unaudited financial statements pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Pursuant to these rules and regulations, we have condensed or omitted certain information and footnote disclosures we normally include in our annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). In management’s opinion, we have made all adjustments (consisting only of normal, recurring adjustments) necessary to fairly present our financial position, results of operations and cash flows. Our interim period operating results do not necessarily indicate the results that may be expected for any other interim period or for the full year. These financial statements and accompanying notes should be read in conjunction with the financial statements and notes thereto in our Annual Report on Form 10-K for the year ended December 31, 2012 on file with the SEC. | |
There have been no material changes to our significant accounting policies as compared to the significant accounting policies described in the financial statements in our Annual Report on Form 10-K for the year ended December 31, 2012. | |
Fair value of financial instruments | ' |
The carrying value of cash and cash equivalents approximate their fair value (determined based on level 1 inputs in the fair value hierarchy) based on the short-term nature of these financial instruments. The carrying values of notes payable and accrued interest approximate their fair value (determined based on level 3 inputs in the fair value hierarchy) because interest rates of notes payable approximate market interest rates. | |
Revenue recognition - license revenue | ' |
Revenue related to licensing agreement activity is recognized over the estimated term of the service period or when no further performance obligations exist. Payments received in advance of the related licensing agreement period are recorded as deferred revenue and recognized when earned. During the first quarter of 2013, we negotiated a new intellectual property license agreement that provides one customer with limited access to our intellectual property under certain conditions. This customer paid upfront fees for the specific rights and there are no future performance obligations. The upfront fee of $500,000 was recognized as revenue during the quarter and $109,167 in deferred revenue associated with this customer was recognized as all future performance obligations associated with the previous license agreements were cancelled with the agreement signed in the first quarter of 2013. | |
Concentration of Credit Risk and Business Risk | ' |
In the three and nine months ended September 30, 2013, we derived approximately 54% and 50%, respectively, of our product revenue from our relationship with one contract manufacturing customer. No other customer accounted for more than 10% of revenue in the three or nine months ended September 30, 2013. At September 30, 2013, one contract manufacturing customer accounted for 39% of gross accounts receivable and no other customer accounted for more than 10% of gross accounts receivable. In the three and nine months ended September 30, 2012, we derived approximately 60% and 38%, respectively, of our product revenue from our relationship with one contract manufacturing customer, which we commenced deliveries to in the second quarter of 2012. At December 31, 2012, one contract manufacturing customer accounted for 36% of gross accounts receivable and one other customer accounted for 11% of gross accounts receivable. All license revenue recognized in the nine months ended September 30, 2013 and 2012 was derived from one customer. | |
Recent Accounting Pronouncements | ' |
There have been no new accounting pronouncements during the nine month period ended September 30, 2013, as compared to our Annual Report on Form 10-K for the year ended December 31, 2012, that are of significance, or potential significance, to us. | |
Stock-based compensation | ' |
The value, at the date of grant, of stock awarded under restricted stock unit grants is amortized as compensation expense over the vesting period. |
4_Inventories_Tables
4. Inventories (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Notes to Financial Statements | ' | ||||||||
Inventories | ' | ||||||||
September 30, | December 31, | ||||||||
2013 | 2012 | ||||||||
Raw materials | $ | 192,096 | $ | 398,510 | |||||
Work in progress | 150,784 | 116,319 | |||||||
Finished goods | 66,315 | 141,568 | |||||||
Total | $ | 409,195 | $ | 656,397 |
5_Deferred_Rent_Tables
5. Deferred Rent (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Notes to Financial Statements | ' | ||||||||
Deferred rent | ' | ||||||||
September 30, | December 31, | ||||||||
2013 | 2012 | ||||||||
Landlord-funded leasehold improvements | $ | 1,059,186 | $ | 900,989 | |||||
Less accumulated amortization | (109,127 | ) | (39,187 | ) | |||||
Total (current portion $111,250) | 950,059 | 861,802 | |||||||
Straight line rent adjustment | 79,498 | 88,277 | |||||||
Total deferred rent | $ | 1,029,557 | $ | 950,079 |
6_Sharebased_Compensation_Tabl
6. Share-based Compensation (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Notes to Financial Statements | ' | ||||||||||||||||
Weighted average assumptions of share based payment | ' | ||||||||||||||||
Three Month Period Ended | Nine Month Period Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Risk free interest rate | 2.25% | 0.71% | 2.25% | 0.78% | |||||||||||||
Dividend yield | 0.00% | 0.00% | 0.00% | 0.00% | |||||||||||||
Expected term (in years) | 7 | 7 | 7 | 6.6 | |||||||||||||
Volatility | 105.20% | 101.57% | 105.20% | 102.76% | |||||||||||||
Stock compensation expense | ' | ||||||||||||||||
Three Month Period Ended | Nine Month Period Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Research and development costs | $ | 5,893 | $ | 6,954 | $ | 19,801 | $ | 20,441 | |||||||||
Sales and marketing costs | 1,265 | 630 | 2,525 | 840 | |||||||||||||
General and administrative costs | 71,294 | 42,720 | 120,608 | 118,542 | |||||||||||||
Cost of product sales | 9,782 | 6,830 | 32,853 | 14,924 | |||||||||||||
Total | $ | 88,234 | $ | 57,134 | $ | 175,787 | $ | 154,747 | |||||||||
Summary of stock option activity | ' | ||||||||||||||||
Nine Month Period Ended | |||||||||||||||||
30-Sep-13 | |||||||||||||||||
Wtd. Avg. | |||||||||||||||||
Exercise | |||||||||||||||||
Shares | Price | ||||||||||||||||
Outstanding at beginning of year | 20,329,602 | $ | 0.09 | ||||||||||||||
Granted | 175,000 | 0.75 | |||||||||||||||
Exercised | (355,855 | ) | 0.07 | ||||||||||||||
Unvested Shares Forfeited | (380,000 | ) | 0.12 | ||||||||||||||
Expired | (25,000 | ) | 0.08 | ||||||||||||||
Outstanding at September 30, 2013 | 19,743,747 | $ | 0.09 | ||||||||||||||
Stock options exercisable at September 30, 2013 | 16,261,588 | $ | 0.08 |
8_Net_Loss_per_Common_Share_Ta
8. Net Loss per Common Share (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2013 | |||||||||||||||||
Notes to Financial Statements | ' | ||||||||||||||||
Loss Per share computation | ' | ||||||||||||||||
Three Month Period Ended | Nine Month Period Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||
Basic and diluted weighted average common stock shares outstanding | 70,106,312 | 69,679,854 | 70,005,207 | 69,679,854 | |||||||||||||
Potentially dilutive securities excluded from loss per share computations: | |||||||||||||||||
Common stock options | 19,743,747 | 20,248,227 | 19,743,747 | 20,248,227 | |||||||||||||
Common stock purchase warrants | 7,406,250 | 7,718,750 | 7,406,250 | 7,718,750 |
2_Liquidity_Details_Narrative
2. Liquidity (Details Narrative) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Notes to Financial Statements | ' | ' |
Accumulated deficit | $56,410,669 | $55,811,077 |
4_Inventories_Details
4. Inventories (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Inventories Details | ' | ' |
Raw materials | $192,096 | $398,510 |
Work in progress | 150,784 | 116,319 |
Finished goods | 66,315 | 141,568 |
Total | $409,195 | $656,397 |
4_Inventories_Details_Narrativ
4. Inventories (Details Narrative) (USD $) | 9 Months Ended |
Sep. 30, 2013 | |
Inventories Details Narrative | ' |
Nonreciprocal, non-monetary receipt of inventory | $87,215 |
5_Deferred_Rent_Details
5. Deferred Rent (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 |
Deferred Rent Details | ' | ' |
Landlord-funded leasehold improvements | $1,059,186 | $900,989 |
Less accumulated amortization | -109,127 | -39,187 |
Total (current portion $111,250) | 950,059 | 861,802 |
Straight line rent adjustment | 79,498 | 88,277 |
Total deferred rent | $1,029,557 | $950,079 |
5_Deferred_Rent_Details_Narrat
5. Deferred Rent (Details Narrative) (USD $) | 9 Months Ended | |
Sep. 30, 2013 | Sep. 30, 2012 | |
Deferred rent | ($8,780) | $46,189 |
Landlord Funded Leasehold Improvements [Member] | ' | ' |
Deferred rent | 191,583 | ' |
Payment offset to landlord | 33,386 | ' |
Deferred rent amortization | $69,940 | ' |
6_Sharebased_Compensation_Deta
6. Share-based Compensation (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Share-Based Compensation Details | ' | ' | ' | ' |
Risk free interest rate | 2.25% | 0.71% | 2.25% | 0.78% |
Dividend yield | 0.00% | 0.00% | 0.00% | 0.00% |
Expected term (in years) | '7 years | '7 years | '7 years | '6 years 7 months 6 days |
Volatility | 105.20% | 101.57% | 105.20% | 102.76% |
6_Sharebased_Compensation_Deta1
6. Share-based Compensation (Details 1) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' |
Share based compensation | $88,234 | $57,134 | $175,787 | $154,747 |
ResearchAndDevelopmentExpenseMember | ' | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' |
Share based compensation | 5,893 | 6,954 | 19,801 | 20,441 |
SellingAndMarketingExpenseMember | ' | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' |
Share based compensation | 1,265 | 630 | 2,525 | 840 |
GeneralAndAdministrativeExpenseMember | ' | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' |
Share based compensation | 71,294 | 42,720 | 120,608 | 118,542 |
CostofProductSalesMember | ' | ' | ' | ' |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ' |
Share based compensation | $9,782 | $6,830 | $32,853 | $14,924 |
6_Sharebased_Compensation_Deta2
6. Share-based Compensation (Details 2) (USD $) | 9 Months Ended |
Sep. 30, 2013 | |
Number of Shares | ' |
Outstanding at beginning of year, Shares | 20,329,602 |
Granted, Shares | 175,000 |
Exercised, Shares | -355,855 |
Forfeited, Shares | -380,000 |
Expired, Shares | ($25,000) |
Outstanding at September 30, 2013, Shares | 19,743,747 |
Stock options exercisable at September 30, Shares | 16,261,588 |
Wtd. Avg Exercise Price | ' |
Outstanding at beginning of year, Wtd. Avg. Shares Exercise Price | $0.09 |
Granted, Wtd. Avg. Shares Exercise Price | $0.75 |
Exercised, Wtd. Avg. Shares Exercise Price | $0.07 |
Forfeited, Wtd. Avg. Shares Exercise Price | $0.12 |
Expired, Wtd. Avg. Shares Exercise Price | $0.08 |
Outstanding at September 30, Wtd. Avg. Shares Exercise Price | $0.09 |
Stock options exercisable at September 30, Wtd. Avg. Shares Exercise Price | $0.08 |
7_Warrants_Details_Narrative
7. Warrants (Details Narrative) (USD $) | 9 Months Ended |
Sep. 30, 2013 | |
Warrants Details Narrative | ' |
Warrants outstanding and exercisable | $7,406,250 |
Outstanding warrants expiration dates | 'November 2013 and May 2017 |
8_Net_Loss_per_Common_Share_De
8. Net Loss per Common Share (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | |
Net Loss Per Common Share Details | ' | ' | ' | ' |
Basic and diluted weighted average common stock shares outstanding | 70,106,312 | 69,679,854 | 70,005,207 | 69,679,854 |
Potentially dilutive securities excluded from loss per share computations: | 'B | 'B | 'B | 'B |
Common stock options | 19,743,747 | 20,248,227 | 19,743,747 | 20,248,227 |
Common stock purchase warrants | $7,406,250 | $7,718,750 | $7,406,250 | $7,718,750 |
9_Related_Party_Transactions_D
9. Related Party Transactions (Details Narrative) (USD $) | 9 Months Ended |
Sep. 30, 2013 | |
Related Party Transactions Details Narrative | ' |
Legal fees, incurred | $0 |