Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2014 | Oct. 31, 2014 | |
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-14 | ' |
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 | ' | 12,084,859 |
Document Fiscal Period Focus | 'Q3 | ' |
Document Fiscal Year Focus | '2014 | ' |
Balance_Sheets_Unaudited
Balance Sheets (Unaudited) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Current assets | ' | ' |
Cash and cash equivalents | $3,275,057 | $156,273 |
Short term investments | 7,744,285 | 0 |
Accounts receivable, trade, net of allowance for doubtful accounts of $1,100 at September 30, 2014 and December 31, 2013 | 775,076 | 1,009,316 |
Inventories | 717,624 | 420,924 |
Prepaid expenses and other current assets | 320,761 | 291,745 |
Total current assets | 12,832,803 | 1,878,258 |
Property and equipment | ' | ' |
Leasehold improvements | 1,121,362 | 1,121,362 |
Furniture and computer equipment | 325,691 | 300,581 |
Manufacturing and other equipment | 944,089 | 764,258 |
Subtotal | 2,391,142 | 2,186,201 |
Less: Accumulated depreciation | -1,006,048 | -862,157 |
Net property and equipment | 1,385,094 | 1,324,044 |
Long term deposits | 36,166 | 36,166 |
Deferred financing costs, net | 0 | 114,874 |
Total assets | 14,254,063 | 3,353,342 |
Current liabilities | ' | ' |
Accounts payable | 168,838 | 867,070 |
Accrued expenses and other current liabilities | 90,475 | 146,626 |
Accrued compensation | 373,417 | 503,194 |
Deferred rent | 110,284 | 111,250 |
Deferred revenue | 90,000 | 0 |
Total current liabilities | 833,014 | 1,628,140 |
Long term liabilities | ' | ' |
Promissory notes payable, related parties | 0 | 10,603,127 |
Accrued interest, related parties | 0 | 3,501,610 |
Deferred rent, long term | 753,842 | 891,986 |
Total liabilities | 1,586,856 | 16,624,863 |
Commitments and Contingencies (Note 10) | 0 | 0 |
Shareholders' equity (deficiency) | ' | ' |
Common stock, $0.001 par value; 150,000,000 shares authorized, 12,053,609 and 5,031,336 shares issued and outstanding at September 30, 2014 and December 31, 2013 | 12,053 | 5,030 |
Additional paid-in capital | 71,862,179 | 43,618,686 |
Accumulated other comprehensive (loss) | -6,606 | 0 |
Accumulated deficit | -59,200,419 | -56,895,237 |
Total shareholders' equity (deficiency) | 12,667,207 | -13,271,521 |
Total liabilities and shareholders' equity (deficiency) | $14,254,063 | $3,353,342 |
Balance_Sheets_Parenthetical
Balance Sheets (Parenthetical) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
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 | 12,053,609 | 5,031,336 |
Common stock, outstanding | 12,053,609 | 5,031,336 |
Statements_of_Operations_Unaud
Statements of Operations (Unaudited) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Revenue | ' | ' | ' | ' |
Product sales | $1,243,372 | $2,170,491 | $4,520,302 | $6,051,354 |
Licensing revenue | 0 | 0 | 0 | 609,167 |
Total revenue | 1,243,372 | 2,170,491 | 4,520,302 | 6,660,521 |
Cost of product sales | 654,978 | 1,281,634 | 2,483,199 | 3,817,737 |
Gross profit | 588,394 | 888,857 | 2,037,103 | 2,842,784 |
Operating expenses | ' | ' | ' | ' |
Research and development | 153,328 | 160,528 | 513,393 | 361,404 |
Sales and marketing | 298,263 | 208,080 | 810,279 | 625,600 |
General and administrative | 1,011,316 | 630,342 | 2,844,858 | 1,856,386 |
Total operating expenses | 1,462,907 | 998,950 | 4,168,530 | 2,843,390 |
Operating loss | -874,513 | -110,093 | -2,131,427 | -606 |
Other income (expenses) | ' | ' | ' | ' |
Gain on sale of property and equipment | 4,400 | 0 | 4,400 | 0 |
Interest income | 7,658 | 0 | 12,175 | 0 |
Interest expense | 0 | -185,554 | -177,308 | -556,664 |
Amortization of deferred financing costs | 0 | -14,263 | -13,022 | -42,322 |
Total other income (expenses) | 12,058 | -199,817 | -173,755 | -598,986 |
Net Loss | ($862,455) | ($309,910) | ($2,305,182) | ($599,592) |
Basic and diluted net loss per common share | ($0.07) | ($0.06) | ($0.23) | ($0.12) |
Basic and diluted weighted average common shares used to calculate net loss per common share | 12,042,739 | 5,009,274 | 9,987,682 | 5,002,135 |
Statements_of_Comprehensive_In
Statements of Comprehensive Income (Loss) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Statements Of Comprehensive Income Loss | ' | ' | ' | ' |
Net loss | ($862,455) | ($309,910) | ($2,305,182) | ($599,592) |
Other comprehensive loss | ' | ' | ' | ' |
Unrealized loss on available-for-sale investments | -3,099 | 0 | -6,606 | 0 |
Total other comprehensive loss | -3,099 | 0 | -6,606 | 0 |
Comprehensive loss | ($861,554) | ($309,910) | ($2,311,788) | ($599,592) |
Statements_of_Cash_Flows_Unaud
Statements of Cash Flows (Unaudited) (USD $) | 9 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Cash flows from operating activities | ' | ' |
Net loss | ($2,305,182) | ($599,592) |
Adjustments to reconcile net loss to net cash used in operating activities | ' | ' |
Depreciation | 186,105 | 183,250 |
Gain on sale of property and equipment | -4,400 | 0 |
Stock-based compensation expense | 183,501 | 175,787 |
Stock to be issued for services | 210,000 | 0 |
Amortization of deferred financing costs | 13,022 | 42,322 |
Lease incentives received from landlord, net of amortization of deferred rent related to lease incentives | -121,103 | 88,258 |
Accretion and amortization on available for sale investments | 53,198 | 0 |
Change in operating assets and liabilities | ' | ' |
(Increase) Decrease in Accounts receivable, trade | 234,240 | -426,705 |
Inventories | -296,700 | 247,202 |
Prepaid expenses and other current assets | 16,638 | 34,654 |
Increase (Decrease) in | ' | ' |
Accounts payable | -698,232 | -21,994 |
Accrued compensation and other current liabilities | -185,928 | -94,439 |
Accrued interest, related parties | 177,308 | 556,664 |
Deferred rent | -18,007 | -8,780 |
Deferred revenue | 90,000 | -109,167 |
Net cash provided by (used in) operating activities | -2,465,540 | 67,460 |
Cash flows from investing activities | ' | ' |
Purchase of available-for-sale investments, net of sales | -7,849,743 | 0 |
Proceeds from the sale of property and equipment | 4,400 | 0 |
Purchase of property and equipment | -247,155 | -235,109 |
Net cash used in investing activities | -8,092,498 | -235,109 |
Proceeds from sale of common stock, net of expenses | 13,596,230 | 0 |
Proceeds from exercise of common stock options and warrants | 80,592 | 50,458 |
Net cash provided by financing activity | 13,676,822 | 50,458 |
Net increase (decrease) in cash and cash equivalents | 3,118,784 | -117,191 |
Cash and cash equivalents - beginning of period | 156,273 | 196,478 |
Cash and cash equivalents - end of period | 3,275,057 | 79,287 |
Non-cash financing activities | ' | ' |
Conversion of notes payable and related party accrued interest to equity, net of unamortized deferred finance costs (See Note 1) | $14,180,193 | $0 |
1_Organization_and_Significant
1. Organization and Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2014 | |
Notes to Financial Statements | ' |
1. Organization and Significant Accounting Policies | ' |
Business | |
BioLife Solutions, Inc. ("BioLife,” “us,” “we,” “our,” or the “Company”) develops, manufactures and markets patented hypothermic storage and cryopreservation solutions and develops and markets precision thermal shipping products and support services for cells and tissues. The Company’s proprietary HypoThermosol® FRS, CryoStor®, and generic BloodStor®, biopreservation media products and SAVSU® precision thermal packaging products are marketed to the biobanking, drug discovery, and regenerative medicine markets. Primary customers include cell therapy and tissue engineering companies, hospital-based stem cell transplant centers, pharmaceutical companies, cord blood and adult stem cell banks, hair transplant centers, and suppliers of cells to the drug discovery, toxicology testing and diagnostic 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 our customers significant improvements in post-thaw cell, tissue, and organ yield, viability and function. Additionally, for our direct, distributor, and contract customers, we perform custom, aseptic media formulation, fill, and finish services. | |
Basis of Presentation | |
We have prepared the accompanying unaudited consolidated 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 consolidated 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 consolidated 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, 2013 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, 2013. | |
Principles of Consolidation | |
The consolidated financial statements include the accounts of the Company and its majority-owned subsidiary. All intercompany balances and transactions have been eliminated in consolidation. | |
Recent Developments | |
Reverse Stock Split | |
On January 17, 2014, our Board of Directors approved an amendment to our certificate of incorporation to effect a reverse stock split by a ratio of 1 for 14, with no reduction in the number of shares of common stock that were previously authorized in our certificate of incorporation. The reverse stock split was effective on January 29, 2014. Unless otherwise noted, all share and per share data in this Quarterly Report on Form 10-Q give effect to the 1-for-14 reverse stock split of our common stock. | |
Public Offering of Units | |
On March 25, 2014, we closed a registered public offering of 3,588,878 units for gross proceeds of $15,432,175. Each $4.30 unit consisted of one share of the Company’s common stock and one warrant, each warrant exercisable for seven years to purchase one share of the Company’s common stock at an exercise price of $4.75. Net of placement agent fees of $1,211,734 and offering costs of $624,211, we received net proceeds of $13,596,230. Of the gross proceeds, $9.1 million was allocated to common stock and $6.3 million was allocated to warrants, based on relative fair values. | |
Conversion of Notes and Interest to Equity | |
Pursuant to previously disclosed note conversion agreements with WAVI Holding AG and Taurus4757 GmbH (the “Note Holders”), concurrently with the closing of the Company’s public offering of units, the Company converted approximately $14.3 million of indebtedness, including accrued interest, to the Note Holders into equity, issuing to the Note Holders an aggregate of 3,321,405 units having terms substantially similar to the public offering units. In connection with the note conversion, the Company’s $14.3 million indebtedness to the Note Holders under the terms of the Company’s previously disclosed facility agreements was extinguished, all remaining unamortized deferred finance costs were recorded to additional paid in capital, and the Note Holders agreed to release all security interests. Of the total conversion amount, $8.4 million was allocated to common stock and $5.8 million was allocated to warrants, based on relative fair values. | |
Listing of Common Stock on NASDAQ Capital Market | |
On March 26, 2014, our common stock was listed on the NASDAQ Capital Market under the symbol BLFS. | |
biologistex Joint Venture | |
On September 29, 2014, the Company entered into a limited liability company agreement (the “LLC Agreement”) with SAVSU Technologies, LLC, a Delaware limited liability company (“SAVSU”) to create a 20-year joint venture for the purpose of acquiring, developing, maintaining, owning, operating, marketing and selling an integrated platform of a cloud-based information service and precision thermal shipping products (the “Products”) based on SAVSU’s next generation EVO smart container shipment platform (the “Smart Containers”). | |
The joint venture vehicle, biologistex CCM, LLC, is structured as a Delaware limited liability company (“biologistex”). The Company will make an initial capital contribution of $2.4 million, and SAVSU will contribute exclusive distribution rights to the Smart Containers under a separate Supply and Distribution Agreement (as defined below). The Company will also pay SAVSU $1 million in consideration of SAVSU’s participation in biologistex. These payments to SAVSU will be made on a monthly basis for twelve months and recorded as consulting expense in General and Administrative expenses on the Company’s Consolidated Statement of Operations, the first of which was made during the third quarter of 2014. | |
The Company and SAVSU are the only initial members of biologistex, holding 52% and 48%, respectively, of the outstanding units of membership interests (“Units”). Distributions of net cash flow, if any, are to be made in proportion to the members’ ownership of Units. Approval of both members is generally required for any matter subject to a member vote. Units may not be transferred without, among other things, the consent of all members and the admission of the transferee as a member. biologistex and the biologistex members have rights of first refusal with respect to certain proposed transfers of Units. | |
biologistex is managed by a board of managers. Each of the Company and SAVSU are entitled to appoint two members to the biologistex board of managers. The approval of at least three of the four managers is generally required for any matter subject to a board of manager’s vote. | |
On September 29, 2014, biologistex and SAVSU also entered into a supply and distribution agreement (the “Supply and Distribution Agreement”) whereby biologistex became the exclusive, worldwide distributor of Smart Containers. Pursuant to the Supply and Distribution Agreement, biologistex agrees to purchase a minimum number of Smart Containers over a 24 month period for an aggregate purchase price of approximately $2.6 million. Under the terms of the agreement, SAVSU must fulfill all obligations required of it to permit biologistex to make the Products available for marketing, sales and acceptance of customer orders. The Supply and Distribution Agreement has an initial term of 20 years unless terminated early by its terms. | |
On September 29, 2014, the Company and biologistex also entered into a services agreement whereby the Company will provide services to biologistex related to operations, sales, marketing, administration and development of a cloud-based software system for tracking and managing the Products. The Services Agreement has an initial term of 20 years unless terminated early by its terms. | |
Pursuant to the Services Agreement, the Company agreed to manage biologistex to achieve certain minimum sales targets within 12 and 24 months of the date of the agreement. biologistex will pay the Company monthly for expenses incurred and certain overhead expenses. Until biologistex has achieved sufficient revenue to pay such expenses, it may be necessary for the Company to fund such reimbursements via inter-company loans to biologistex. | |
The Company will consolidate the biologistex financial results with it’s own results and will report consolidated results going forward. | |
Investments | |
The Company's investments consist primarily of commercial paper, corporate debt, and other debt securities. Investments are classified as available-for-sale and are reported at fair value with unrealized gains and losses, net of applicable taxes, recorded in accumulated other comprehensive income (loss), a component of shareholders' equity. The realized gains and losses for available-for-sale securities are included in other income and expense in the Statements of Operations. Realized gains and losses are calculated based on the specific identification method. | |
The Company monitors its investment portfolio for impairment on a periodic basis. When the amortized cost basis of an investment exceeds its fair value and the decline in value is determined to be an other-than-temporary decline, and when the Company does not intend to sell the debt security and it is not more likely than not that the Company will be required to sell the debt securities prior to recovery of its amortized cost basis, the Company records an impairment charge in the amount of the credit loss and the balance, if any, to other comprehensive income (loss). | |
Concentrations of credit risk and business risk | |
In the nine months ended September 30, 2014, we derived approximately 24% of our product revenue from our relationship with one contract manufacturing customer. In the three and nine months ended September 30, 2013, we derived approximately 54% and 55%, respectively, of our product revenue from our relationship with one contract manufacturing customer. Two other customers accounted for 34% and 22% of revenue in the three and nine months ended September 30, 2014, respectively. All license revenue recognized in the nine months ended September 30, 2013 was derived from one customer. No other customer accounted for more than 10% of revenue in the three and nine months ended September 30, 2013. At September 30, 2014, two customers accounted for approximately 35% of total gross accounts receivable. At December 31, 2013, three customers accounted for approximately 64% of total gross accounts receivable. | |
Revenue from customers located in foreign countries represented 19% and 15% of total revenue during the three and nine months ended September 30, 2014, respectively, and during the three and nine months ended September 30, 2013 revenue from customers located in foreign countries was 7% and 8%, respectively. | |
Recent Accounting Pronouncements | |
In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers: Topic 606 (ASU 2014-09), to supersede nearly all existing revenue recognition guidance under GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process than required under existing GAAP including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. ASU 2014-09 is effective for the fiscal and interim reporting periods beginning after December 15, 2016 using either of two methods: (i) retrospective to each prior reporting period presented with the option to elect certain practical expedients as defined within ASU 2014-09; or (ii) retrospective with the cumulative effect of initially applying ASU 2014-09 recognized at the date of initial application and providing certain additional disclosures as defined per ASU 2014-09. Management is currently evaluating the impact of the Company's pending adoption of ASU 2014-09 on its consolidated financial statements. |
2_Accumulated_Other_Comprehens
2. Accumulated Other Comprehensive Loss | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
Equity [Abstract] | ' | ||||
2. Accumulated Other Comprehensive Loss | ' | ||||
The following tables show the changes in Accumulated Other Comprehensive Loss by component for the nine months ended September 30, 2014: | |||||
Nine Months Ended September 30, | |||||
2014 | |||||
Beginning Balance | $ | –– | |||
Unrealized Loss on Investments, Current Period | -6,606 | ||||
Ending Balance | $ | -6,606 |
3_Fair_Value_Measurement
3. Fair Value Measurement | 9 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Fair Value Disclosures [Abstract] | ' | ||||||||||||
3. Fair Value Measurement | ' | ||||||||||||
Based on the observability of the inputs used in the valuation techniques used to determine the fair value of certain financial assets and liabilities, the Company is required to provide the following information according to the fair value hierarchy. The fair value hierarchy ranks the quality and reliability of the information used to determine fair values. | |||||||||||||
In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities. Fair values determined by Level 2 inputs utilize observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities. Fair values determined by Level 3 inputs are unobservable data points for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability. The following table presents information about the Company’s financial assets that have been measured at fair value as of September 30, 2014, and indicates the fair value hierarchy of the valuation inputs utilized to determine such fair value. As of September 30, 2014, the Company does not have liabilities that are measured at fair value. | |||||||||||||
Fair Value as of | Quoted Prices in | Significant Other Observable Inputs | |||||||||||
September 30, | Active Markets | (Level 2) | |||||||||||
2014 | (Level 1) | ||||||||||||
Cash and cash equivalents | $ | 3,275,057 | $ | 3,275,057 | $ | — | |||||||
Available-for-sale investments | 7,744,285 | 7,744,285 | — | ||||||||||
Assets measured at fair value at September 30, 2014 | $ | 11,019,342 | $ | 11,019,342 | $ | — |
4_Short_Term_Investments
4. Short Term Investments | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
Investments, All Other Investments [Abstract] | ' | ||||
4. Short Term Investments | ' | ||||
The carrying amount of the Company’s investments in available-for-sale securities as of September 30, 2014 is shown in the table below: | |||||
30-Sep-14 | |||||
Cost | $ | 7,750,891 | |||
Unrealized loss on investments | (6,606 | ) | |||
Fair value | $ | 7,744,285 |
5_Inventories
5. Inventories | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Notes to Financial Statements | ' | ||||||||
5. Inventories | ' | ||||||||
Inventory consists of the following at September 30, 2014 and December 31, 2013: | |||||||||
September 30, | December 31, | ||||||||
2014 | 2013 | ||||||||
Raw materials | $ | 309,507 | $ | 334,031 | |||||
Work in progress | 101,088 | 14,570 | |||||||
Finished goods | 307,029 | 72,323 | |||||||
Total | $ | 717,624 | $ | 420,924 |
6_Deferred_Rent
6. Deferred Rent | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Notes to Financial Statements | ' | ||||||||
6. Deferred Rent | ' | ||||||||
Deferred rent consists of the following at September 30, 2014 and December 31, 2013: | |||||||||
September 30, | December 31, | ||||||||
2014 | 2013 | ||||||||
Landlord-funded leasehold improvements | $ | 1,014,329 | $ | 1,047,026 | |||||
Less accumulated amortization | (221,469 | ) | (133,063 | ) | |||||
Total | 792,860 | 913,963 | |||||||
Straight line rent adjustment | 71,266 | 89,273 | |||||||
Total deferred rent | $ | 864,126 | $ | 1,003,236 | |||||
During the three and nine month periods ended September 30, 2014, the Company recorded $27,063 and $88,406, respectively, in deferred rent amortization of these landlord funded leasehold improvements. During the three and nine month periods ended September 30, 2013, the Company recorded $23,935 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. |
7_Sharebased_Compensation
7. Share-based Compensation | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Notes to Financial Statements | ' | ||||||||||||||||
7. Share-based Compensation | ' | ||||||||||||||||
Stock Options | |||||||||||||||||
The following is a summary of stock option activity for the nine month period ended September 30, 2014, and the status of stock options outstanding at September 30, 2014: | |||||||||||||||||
Nine Month Period Ended | |||||||||||||||||
30-Sep-14 | |||||||||||||||||
Wtd. Avg. | |||||||||||||||||
Exercise | |||||||||||||||||
Options | Price | ||||||||||||||||
Outstanding at beginning of year | 1,417,309 | $ | 1.36 | ||||||||||||||
Granted | 85,000 | 3.49 | |||||||||||||||
Exercised | (65,842 | ) | 1.22 | ||||||||||||||
Forfeited | (49,002 | ) | 1.52 | ||||||||||||||
Expired | (3,124 | ) | 2.23 | ||||||||||||||
Outstanding at September 30, 2014 | 1,384,341 | $ | 1.49 | ||||||||||||||
Stock options exercisable at September 30, 2014 | 1,209,061 | $ | 1.28 | ||||||||||||||
As of September 30, 2014, there was $1,148,872 of aggregate intrinsic value of outstanding stock options, including $1,093,647 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, 2014. This amount will change based on the fair market value of the Company’s stock. | |||||||||||||||||
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, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Risk free interest rate | 1.93% | 2.25% | 2.02% | 2.25% | |||||||||||||
Dividend yield | 0.00% | 0.00% | 0.00% | 0.00% | |||||||||||||
Expected term (in years) | 7 | 7 | 7 | 7 | |||||||||||||
Volatility | 105.20% | 105.20% | 105.20% | 105.20% | |||||||||||||
The weighted average grant-date fair value for the three and nine months ended September 30, 2014 was $2.22 and $2.96, respectively. The weighted average grant-date fair value for the three and nine months ended September 30, 2013 was $8.91. | |||||||||||||||||
We recorded stock compensation expense related to options for the three and nine month periods ended September 30, 2014 and 2013, as follows: | |||||||||||||||||
Three Month Period Ended | Nine Month Period Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Research and development costs | $ | 1,064 | $ | 5,893 | $ | 18,550 | $ | 19,801 | |||||||||
Sales and marketing costs | 7,624 | 1,265 | 12,910 | 2,525 | |||||||||||||
General and administrative costs | 46,671 | 71,294 | 111,947 | 120,608 | |||||||||||||
Cost of product sales | 18,966 | 9,782 | 40,094 | 32,853 | |||||||||||||
Total | $ | 74,325 | $ | 88,234 | $ | 183,501 | $ | 175,787 | |||||||||
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, 2014 and 2013 was approximately 7%. | |||||||||||||||||
As of September 30, 2014, we had approximately $359,132 of unrecognized compensation expense related to unvested stock options. We expect to recognize this compensation expense over a weighted average period of approximately 2.9 years. | |||||||||||||||||
During the nine months ended September 30, 2014, we issued or committed to issue common stock of the Company with a value of $210,000 for services rendered during the period. These costs were recorded in general and administrative expenses during the period. | |||||||||||||||||
Restricted Stock | |||||||||||||||||
At September 30, 2014, there were no unvested restricted stock units outstanding. |
8_Warrants
8. Warrants | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Notes to Financial Statements | ' | ||||||||
8. Warrants | ' | ||||||||
The following is a summary of warrant activity for the nine month period ended September 30, 2014, and the status of warrants outstanding at September 30, 2014: | |||||||||
Nine Month Period Ended | |||||||||
30-Sep-14 | |||||||||
Wtd. Avg. | |||||||||
Exercise | |||||||||
Warrants | Price | ||||||||
Outstanding at beginning of year | 517,858 | $ | 1.02 | ||||||
Granted | 6,910,283 | 4.75 | |||||||
Exercised | –– | –– | |||||||
Forfeited/Expired | –– | –– | |||||||
Outstanding at September 30, 2014 | 7,428,141 | $ | 4.49 | ||||||
At September 30, 2014, we had 7,428,141 warrants outstanding and exercisable with a weighted average exercise price of $4.49. The outstanding warrants have expiration dates between November 2015 and March 2021. | |||||||||
As discussed in Note 1, during the nine months ended September 30, 2014, we issued 3,588,878 warrants with an expiration date of March 25, 2021 in connection with the Company’s public offering of units on March 25, 2014. Each whole warrant is exercisable for a period of seven years to acquire one share of common stock with an exercise price of $4.75 per share. In addition, we issued 3,321,405 warrants with an expiration date of March 25, 2021 in connection with the conversion of approximately $14.3 million of indebtedness to the Company’s existing Note Holders into equity on March 25, 2014. Each whole warrant is exercisable for a period of seven years to acquire one share of common stock with an exercise price of $4.75 per share. There were no warrants exercised, forfeited or expired in the nine months ended September 30, 2014. | |||||||||
Deferred Financing Costs | |||||||||
During the quarter ended June 30, 2012, the Company issued a total of 2,000,000 warrants to the 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. During the nine months ended September 30, 2014, the Company recorded $13,022 in amortization of deferred financing costs. In connection with the conversion to equity of the notes and accrued interest, the Company recorded $101,852, the remaining unamortized costs, as an adjustment to additional paid in capital. |
9_Net_Loss_per_Common_Share
9. Net Loss per Common Share | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Notes to Financial Statements | ' | ||||||||||||||||
9. 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, 2014 and 2013, 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, 2014 and 2013, respectively: | |||||||||||||||||
Three Month Period Ended | Nine Month Period Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Basic and diluted weighted average common stock shares outstanding | 12,042,739 | 5,009,274 | 9,987,682 | 5,002,135 | |||||||||||||
Potentially dilutive securities excluded from loss per share computations: | |||||||||||||||||
Common stock options | 1,384,341 | 1,410,240 | 1,384,341 | 1,410,240 | |||||||||||||
Common stock purchase warrants | 7,428,141 | 529,018 | 7,428,141 | 529,018 |
10_Commitments_Contingencies
10. Commitments & Contingencies | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
Notes to Financial Statements | ' | ||||
10. 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, 2013. During the three and nine months ended September 30, 2014, there were no significant developments related to these complaints. We have not made any accrual related to future litigation outcomes as of September 30, 2014 and December 31, 2013. | |||||
Leases | |||||
On August 19, 2014 we signed an amendment to our lease agreement, which will expand the premises leased by the Company from the landlord from approximately 26,000 to approximately 30,000 rentable square feet. The term of the lease continues until July 31, 2021 with two options to extend the term of the lease, each of which is for an additional period of five 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 will increase to approximately $55,700 effective December 1, 2014, with scheduled annual increases each August. The Company is also required to pay an amount equal to the Company’s proportionate share of certain taxes and operating expenses. | |||||
The following is a schedule of future minimum lease payments required under the facility leases as of September 30, 2014: | |||||
Year Ending | |||||
31-Dec | |||||
2014 | $ | 150,802 | |||
2015 | 662,203 | ||||
2016 | 675,828 | ||||
2017 | 689,799 | ||||
2018 | 703,931 | ||||
Thereafter | 1,908,626 | ||||
Total | $ | 4,791,189 | |||
Employment Agreements | |||||
We have employment agreements with the Chief Executive Officer, Chief Financial Officer, Chief Technology Officer, and Chief Operating Officer which automatically renew for successive one year periods in the event either party does not send the other a “termination notice” not less than 90 days prior to the expiration of the initial term or any subsequent term. The agreements provide for certain minimum compensation per month and incentive bonuses. Under certain conditions, we may be required to continue to pay the base salary and certain other amounts under the agreement for a period of up to two years. | |||||
Biologistex | |||||
Our agreement to form the biologistex joint venture requires us to make an initial capital contribution of $2.4 million. In addition, we will pay SAVSU $1 million in consideration of SAVSU’s participation in biologistex. The payments to SAVSU will be made on a monthly basis and recorded in General and Administrative expenses on the Company’s Consolidated Statement of Operations, the first of which was made during the third quarter of 2014. In addition, biologistex is required to purchase approximately $2.6 million in Smart Containers from SAVSU. See “Note 1. Organization and Significant Accounting Policies – Recent Developments – biologistex Joint Venture” for more information. |
1_Organization_and_Significant1
1. Organization and Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2014 | |
Notes to Financial Statements | ' |
Business | ' |
BioLife Solutions, Inc. ("BioLife,” “us,” “we,” “our,” or the “Company”) develops, manufactures and markets patented hypothermic storage and cryopreservation solutions and develops and markets precision thermal shipping products and support services for cells and tissues. The Company’s proprietary HypoThermosol® FRS, CryoStor®, and generic BloodStor®, biopreservation media products and SAVSU® precision thermal packaging products are marketed to the biobanking, drug discovery, and regenerative medicine markets. Primary customers include cell therapy and tissue engineering companies, hospital-based stem cell transplant centers, pharmaceutical companies, cord blood and adult stem cell banks, hair transplant centers, and suppliers of cells to the drug discovery, toxicology testing and diagnostic 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 our customers significant improvements in post-thaw cell, tissue, and organ yield, viability and function. Additionally, for our direct, distributor, and contract customers, we perform custom, aseptic media formulation, fill, and finish services. | |
Basis of Presentation | ' |
We have prepared the accompanying unaudited consolidated 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 consolidated 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 consolidated 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, 2013 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, 2013. | |
Principles of Consolidation | ' |
The consolidated financial statements include the accounts of the Company and its majority-owned subsidiary. All intercompany balances and transactions have been eliminated in consolidation. | |
Recent Developments | ' |
Reverse Stock Split | |
On January 17, 2014, our Board of Directors approved an amendment to our certificate of incorporation to effect a reverse stock split by a ratio of 1 for 14, with no reduction in the number of shares of common stock that were previously authorized in our certificate of incorporation. The reverse stock split was effective on January 29, 2014. Unless otherwise noted, all share and per share data in this Quarterly Report on Form 10-Q give effect to the 1-for-14 reverse stock split of our common stock. | |
Public Offering of Units | |
On March 25, 2014, we closed a registered public offering of 3,588,878 units for gross proceeds of $15,432,175. Each $4.30 unit consisted of one share of the Company’s common stock and one warrant, each warrant exercisable for seven years to purchase one share of the Company’s common stock at an exercise price of $4.75. Net of placement agent fees of $1,211,734 and offering costs of $624,211, we received net proceeds of $13,596,230. Of the gross proceeds, $9.1 million was allocated to common stock and $6.3 million was allocated to warrants, based on relative fair values. | |
Conversion of Notes and Interest to Equity | |
Pursuant to previously disclosed note conversion agreements with WAVI Holding AG and Taurus4757 GmbH (the “Note Holders”), concurrently with the closing of the Company’s public offering of units, the Company converted approximately $14.3 million of indebtedness, including accrued interest, to the Note Holders into equity, issuing to the Note Holders an aggregate of 3,321,405 units having terms substantially similar to the public offering units. In connection with the note conversion, the Company’s $14.3 million indebtedness to the Note Holders under the terms of the Company’s previously disclosed facility agreements was extinguished, all remaining unamortized deferred finance costs were recorded to additional paid in capital, and the Note Holders agreed to release all security interests. Of the total conversion amount, $8.4 million was allocated to common stock and $5.8 million was allocated to warrants, based on relative fair values. | |
Listing of Common Stock on NASDAQ Capital Market | |
On March 26, 2014, our common stock was listed on the NASDAQ Capital Market under the symbol BLFS. | |
biologistex Joint Venture | |
On September 29, 2014, the Company entered into a limited liability company agreement (the “LLC Agreement”) with SAVSU Technologies, LLC, a Delaware limited liability company (“SAVSU”) to create a 20-year joint venture for the purpose of acquiring, developing, maintaining, owning, operating, marketing and selling an integrated platform of a cloud-based information service and precision thermal shipping products (the “Products”) based on SAVSU’s next generation EVO smart container shipment platform (the “Smart Containers”). | |
The joint venture vehicle, biologistex CCM, LLC, is structured as a Delaware limited liability company (“biologistex”). The Company will make an initial capital contribution of $2.4 million, and SAVSU will contribute exclusive distribution rights to the Smart Containers under a separate Supply and Distribution Agreement (as defined below). The Company will also pay SAVSU $1 million in consideration of SAVSU’s participation in biologistex. These payments to SAVSU will be made on a monthly basis for twelve months and recorded as consulting expense in General and Administrative expenses on the Company’s Consolidated Statement of Operations, the first of which was made during the third quarter of 2014. | |
The Company and SAVSU are the only initial members of biologistex, holding 52% and 48%, respectively, of the outstanding units of membership interests (“Units”). Distributions of net cash flow, if any, are to be made in proportion to the members’ ownership of Units. Approval of both members is generally required for any matter subject to a member vote. Units may not be transferred without, among other things, the consent of all members and the admission of the transferee as a member. biologistex and the biologistex members have rights of first refusal with respect to certain proposed transfers of Units. | |
biologistex is managed by a board of managers. Each of the Company and SAVSU are entitled to appoint two members to the biologistex board of managers. The approval of at least three of the four managers is generally required for any matter subject to a board of manager’s vote. | |
On September 29, 2014, biologistex and SAVSU also entered into a supply and distribution agreement (the “Supply and Distribution Agreement”) whereby biologistex became the exclusive, worldwide distributor of Smart Containers. Pursuant to the Supply and Distribution Agreement, biologistex agrees to purchase a minimum number of Smart Containers over a 24 month period for an aggregate purchase price of approximately $2.6 million. Under the terms of the agreement, SAVSU must fulfill all obligations required of it to permit biologistex to make the Products available for marketing, sales and acceptance of customer orders. The Supply and Distribution Agreement has an initial term of 20 years unless terminated early by its terms. | |
On September 29, 2014, the Company and biologistex also entered into a services agreement whereby the Company will provide services to biologistex related to operations, sales, marketing, administration and development of a cloud-based software system for tracking and managing the Products. The Services Agreement has an initial term of 20 years unless terminated early by its terms. | |
Pursuant to the Services Agreement, the Company agreed to manage biologistex to achieve certain minimum sales targets within 12 and 24 months of the date of the agreement. biologistex will pay the Company monthly for expenses incurred and certain overhead expenses. Until biologistex has achieved sufficient revenue to pay such expenses, it may be necessary for the Company to fund such reimbursements via inter-company loans to biologistex. | |
The Company will consolidate the biologistex financial results with it’s own results and will report consolidated results going forward. | |
Investments | ' |
The Company's investments consist primarily of commercial paper, corporate debt, and other debt securities. Investments are classified as available-for-sale and are reported at fair value with unrealized gains and losses, net of applicable taxes, recorded in accumulated other comprehensive income (loss), a component of shareholders' equity. The realized gains and losses for available-for-sale securities are included in other income and expense in the Statements of Operations. Realized gains and losses are calculated based on the specific identification method. | |
The Company monitors its investment portfolio for impairment on a periodic basis. When the amortized cost basis of an investment exceeds its fair value and the decline in value is determined to be an other-than-temporary decline, and when the Company does not intend to sell the debt security and it is not more likely than not that the Company will be required to sell the debt securities prior to recovery of its amortized cost basis, the Company records an impairment charge in the amount of the credit loss and the balance, if any, to other comprehensive income (loss). | |
Concentration of Credit Risk and Business Risk | ' |
In the nine months ended September 30, 2014, we derived approximately 24% of our product revenue from our relationship with one contract manufacturing customer. In the three and nine months ended September 30, 2013, we derived approximately 54% and 55%, respectively, of our product revenue from our relationship with one contract manufacturing customer. Two other customers accounted for 34% and 22% of revenue in the three and nine months ended September 30, 2014, respectively. All license revenue recognized in the nine months ended September 30, 2013 was derived from one customer. No other customer accounted for more than 10% of revenue in the three and nine months ended September 30, 2013. At September 30, 2014, two customers accounted for approximately 35% of total gross accounts receivable. At December 31, 2013, three customers accounted for approximately 64% of total gross accounts receivable. | |
Revenue from customers located in foreign countries represented 19% and 15% of total revenue during the three and nine months ended September 30, 2014, respectively, and during the three and nine months ended September 30, 2013 revenue from customers located in foreign countries was 7% and 8%, respectively. | |
Recent Accounting Pronouncements | ' |
In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers: Topic 606 (ASU 2014-09), to supersede nearly all existing revenue recognition guidance under GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process than required under existing GAAP including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. ASU 2014-09 is effective for the fiscal and interim reporting periods beginning after December 15, 2016 using either of two methods: (i) retrospective to each prior reporting period presented with the option to elect certain practical expedients as defined within ASU 2014-09; or (ii) retrospective with the cumulative effect of initially applying ASU 2014-09 recognized at the date of initial application and providing certain additional disclosures as defined per ASU 2014-09. Management is currently evaluating the impact of the Company's pending adoption of ASU 2014-09 on its consolidated financial statements. |
2_Accumulated_Other_Comprehens1
2. Accumulated Other Comprehensive Loss (Tables) | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
Accumulated Other Comprehensive Loss Tables | ' | ||||
Schedule of accumulated other comprehensive Loss | ' | ||||
Nine Months Ended September 30, | |||||
2014 | |||||
Beginning Balance | $ | –– | |||
Unrealized Loss on Investments, Current Period | -6,606 | ||||
Ending Balance | $ | -6,606 |
3_Fair_Value_Measurement_Table
3. Fair Value Measurement (Tables) | 9 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Fair Value Measurement Tables | ' | ||||||||||||
Schedule of fair value measurements | ' | ||||||||||||
Fair Value as of | Quoted Prices in | Significant Other Observable Inputs | |||||||||||
September 30, | Active Markets | (Level 2) | |||||||||||
2014 | (Level 1) | ||||||||||||
Cash and cash equivalents | $ | 3,275,057 | $ | 3,275,057 | $ | — | |||||||
Available-for-sale investments | 7,744,285 | 7,744,285 | — | ||||||||||
Assets measured at fair value at September 30, 2014 | $ | 11,019,342 | $ | 11,019,342 | $ | — |
4_Short_Term_Investments_Table
4. Short Term Investments (Tables) | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
Short Term Investments Tables | ' | ||||
Schedule of available for sale securities | ' | ||||
30-Sep-14 | |||||
Cost | $ | 7,750,891 | |||
Unrealized loss on investments | (6,606 | ) | |||
Fair value | $ | 7,744,285 |
5_Inventories_Tables
5. Inventories (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Notes to Financial Statements | ' | ||||||||
Inventories | ' | ||||||||
September 30, | December 31, | ||||||||
2014 | 2013 | ||||||||
Raw materials | $ | 309,507 | $ | 334,031 | |||||
Work in progress | 101,088 | 14,570 | |||||||
Finished goods | 307,029 | 72,323 | |||||||
Total | $ | 717,624 | $ | 420,924 |
6_Deferred_Rent_Tables
6. Deferred Rent (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Notes to Financial Statements | ' | ||||||||
Deferred rent | ' | ||||||||
September 30, | December 31, | ||||||||
2014 | 2013 | ||||||||
Landlord-funded leasehold improvements | $ | 1,014,329 | $ | 1,047,026 | |||||
Less accumulated amortization | (221,469 | ) | (133,063 | ) | |||||
Total | 792,860 | 913,963 | |||||||
Straight line rent adjustment | 71,266 | 89,273 | |||||||
Total deferred rent | $ | 864,126 | $ | 1,003,236 |
7_Sharebased_Compensation_Tabl
7. Share-based Compensation (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Notes to Financial Statements | ' | ||||||||||||||||
Summary of stock option activity | ' | ||||||||||||||||
Nine Month Period Ended | |||||||||||||||||
30-Sep-14 | |||||||||||||||||
Wtd. Avg. | |||||||||||||||||
Exercise | |||||||||||||||||
Options | Price | ||||||||||||||||
Outstanding at beginning of year | 1,417,309 | $ | 1.36 | ||||||||||||||
Granted | 85,000 | 3.49 | |||||||||||||||
Exercised | (65,842 | ) | 1.22 | ||||||||||||||
Forfeited | (49,002 | ) | 1.52 | ||||||||||||||
Expired | (3,124 | ) | 2.23 | ||||||||||||||
Outstanding at September 30, 2014 | 1,384,341 | $ | 1.49 | ||||||||||||||
Stock options exercisable at September 30, 2014 | 1,209,061 | $ | 1.28 | ||||||||||||||
Weighted average assumptions of share based payment | ' | ||||||||||||||||
Three Month Period Ended | Nine Month Period Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Risk free interest rate | 1.93% | 2.25% | 2.02% | 2.25% | |||||||||||||
Dividend yield | 0.00% | 0.00% | 0.00% | 0.00% | |||||||||||||
Expected term (in years) | 7 | 7 | 7 | 7 | |||||||||||||
Volatility | 105.20% | 105.20% | 105.20% | 105.20% | |||||||||||||
Stock compensation expense | ' | ||||||||||||||||
Three Month Period Ended | Nine Month Period Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Research and development costs | $ | 1,064 | $ | 5,893 | $ | 18,550 | $ | 19,801 | |||||||||
Sales and marketing costs | 7,624 | 1,265 | 12,910 | 2,525 | |||||||||||||
General and administrative costs | 46,671 | 71,294 | 111,947 | 120,608 | |||||||||||||
Cost of product sales | 18,966 | 9,782 | 40,094 | 32,853 | |||||||||||||
Total | $ | 74,325 | $ | 88,234 | $ | 183,501 | $ | 175,787 |
8_Warrants_Tables
8. Warrants (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Warrants Tables | ' | ||||||||
Schedule of warrants | ' | ||||||||
Nine Month Period Ended | |||||||||
30-Sep-14 | |||||||||
Wtd. Avg. | |||||||||
Exercise | |||||||||
Warrants | Price | ||||||||
Outstanding at beginning of year | 517,858 | $ | 1.02 | ||||||
Granted | 6,910,283 | 4.75 | |||||||
Exercised | –– | –– | |||||||
Forfeited/Expired | –– | –– | |||||||
Outstanding at September 30, 2014 | 7,428,141 | $ | 4.49 |
9_Net_Loss_per_Common_Share_Ta
9. Net Loss per Common Share (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Notes to Financial Statements | ' | ||||||||||||||||
Loss Per share computation | ' | ||||||||||||||||
Three Month Period Ended | Nine Month Period Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Basic and diluted weighted average common stock shares outstanding | 12,042,739 | 5,009,274 | 9,987,682 | 5,002,135 | |||||||||||||
Potentially dilutive securities excluded from loss per share computations: | |||||||||||||||||
Common stock options | 1,384,341 | 1,410,240 | 1,384,341 | 1,410,240 | |||||||||||||
Common stock purchase warrants | 7,428,141 | 529,018 | 7,428,141 | 529,018 |
10_Commitments_Contingencies_T
10. Commitments & Contingencies (Tables) | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
Commitments Contingencies Tables | ' | ||||
Future minimum lease payments | ' | ||||
Year Ending | |||||
31-Dec | |||||
2014 | $ | 150,802 | |||
2015 | 662,203 | ||||
2016 | 675,828 | ||||
2017 | 689,799 | ||||
2018 | 703,931 | ||||
Thereafter | 1,908,626 | ||||
Total | $ | 4,791,189 |
2_Accumulated_Other_Comprehens2
2. Accumulated Other Comprehensive Income (Loss) (Details) (USD $) | 9 Months Ended |
Sep. 30, 2014 | |
Accumulated Other Comprehensive Income Loss Details | ' |
Beginning Balance | $0 |
Unrealized Loss on Investments, Current Period | -6,606 |
Ending Balance | ($6,606) |
3_Fair_Value_Measurement_Detai
3. Fair Value Measurement (Details) (USD $) | Sep. 30, 2014 |
Cash and cash equivalents | $3,275,057 |
Available-for-sale investments | 7,744,285 |
Assets measured at fair value at September 30, 2014 | 11,019,342 |
Level 1 | ' |
Cash and cash equivalents | 3,275,057 |
Available-for-sale investments | 7,744,285 |
Assets measured at fair value at September 30, 2014 | 11,019,342 |
Level 2 | ' |
Cash and cash equivalents | 0 |
Available-for-sale investments | 0 |
Assets measured at fair value at September 30, 2014 | $0 |
4_Short_Term_Investments_Detai
4. Short Term Investments (Details) (USD $) | Sep. 30, 2014 |
Short Term Investments Details | ' |
Cost | $7,750,891 |
Unrealized Loss on Investments | -6,606 |
Fair Value | $7,744,285 |
5_Inventories_Details
5. Inventories (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Inventories Details | ' | ' |
Raw materials | $309,507 | $334,031 |
Work in progress | 101,088 | 14,570 |
Finished goods | 307,029 | 72,323 |
Total | $717,624 | $420,924 |
6_Deferred_Rent_Details
6. Deferred Rent (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Deferred Rent Details | ' | ' |
Landlord-funded leasehold improvements | $1,014,329 | $1,047,026 |
Less accumulated amortization | -221,469 | -133,063 |
Total | 792,860 | 913,963 |
Straight line rent adjustment | 71,266 | 89,273 |
Total deferred rent | $864,126 | $1,003,236 |
6_Deferred_Rent_Details_Narrat
6. Deferred Rent (Details Narrative) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Deferred Rent Details | ' | ' | ' | ' |
Deferred rent | $27,063 | $23,935 | $88,406 | $69,940 |
7_Sharebased_Compensation_Deta
7. Share-based Compensation (Details) (Employee Stock Option [Member], USD $) | 9 Months Ended |
Sep. 30, 2014 | |
Employee Stock Option [Member] | ' |
Number of Shares | ' |
Outstanding at beginning of year, Shares | 1,417,309 |
Granted, Shares | 85,000 |
Exercised, Shares | -65,842 |
Forfeited, Shares | -49,002 |
Expired, Shares | ($3,124) |
Outstanding at September 30, 2014 | 1,384,341 |
Stock options exercisable at September 30, 2014, Shares | 1,209,061 |
Wtd. Avg Exercise Price | ' |
Outstanding at beginning of year, Wtd. Avg. Shares Exercise Price | $1.36 |
Granted, Wtd. Avg. Shares Exercise Price | $3.49 |
Exercised, Wtd. Avg. Shares Exercise Price | $1.22 |
Forfeited, Wtd. Avg. Shares Exercise Price | $1.52 |
Expired, Wtd. Avg. Shares Exercise Price | $2.23 |
Outstanding at September 30, 2014, Wtd. Avg. Shares Exercise Price | $1.49 |
Stock options exercisable at September 30, 2014, Wtd. Avg. Shares Exercise Price | $1.28 |
7_Sharebased_Compensation_Deta1
7. Share-based Compensation (Details 1) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Share-Based Compensation Details 1 | ' | ' | ' | ' |
Risk free interest rate | 1.93% | 2.25% | 2.02% | 2.25% |
Dividend yield | 0.00% | 0.00% | 0.00% | 0.00% |
Expected term (in years) | '7 years | '7 years | '7 years | '7 years |
Volatility | 105.20% | 105.20% | 105.20% | 105.20% |
7_Sharebased_Compensation_Deta2
7. Share-based Compensation (Details 2) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ' | ' | ' | ' |
Share based compensation | $74,325 | $88,234 | $183,501 | $175,787 |
ResearchAndDevelopmentExpenseMember | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ' | ' | ' | ' |
Share based compensation | 1,064 | 5,893 | 18,550 | 19,801 |
SellingAndMarketingExpenseMember | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ' | ' | ' | ' |
Share based compensation | 7,624 | 1,265 | 12,910 | 2,525 |
GeneralAndAdministrativeExpenseMember | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ' | ' | ' | ' |
Share based compensation | 46,671 | 71,294 | 111,947 | 120,608 |
CostofProductSalesMember | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ' | ' | ' | ' |
Share based compensation | $18,966 | $9,782 | $40,094 | $32,853 |
8_Warrants_Details
8. Warrants (Details) (Warrants, USD $) | 9 Months Ended |
Sep. 30, 2014 | |
Warrants | ' |
Number of Warrants | ' |
Outstanding at beginning of year, Warrants | 517,858 |
Granted, Warrants | 6,910,283 |
Exercised, Warrants | 0 |
Forfeited, Warrants | 0 |
Outstanding at September 30, 2014 | 7,428,141 |
Wtd. Avg Exercise Price | ' |
Outstanding at beginning of year, Wtd. Avg. Shares Exercise Price | $1.02 |
Granted, Wtd. Avg. Shares Exercise Price | $4.75 |
Exercised, Wtd. Avg. Shares Exercise Price | $0 |
Forfeited, Wtd. Avg. Shares Exercise Price | $0 |
Outstanding at September 30, 2014, Wtd. Avg. Shares Exercise Price | $4.49 |
8_Warrants_Details_Narrative
8. Warrants (Details Narrative) (USD $) | 9 Months Ended |
Sep. 30, 2014 | |
Warrants Details Narrative | ' |
Warrants outstanding and exercisable | $7,428,141 |
Outstanding warrants expiration dates | 'The outstanding warrants have expiration dates between November 2015 and March 2021. |
9_Net_Loss_per_Common_Share_De
9. Net Loss per Common Share (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Net Loss Per Common Share Details | ' | ' | ' | ' |
Basic and diluted weighted average common stock shares outstanding | 12,042,739 | 5,009,274 | 9,987,682 | 5,002,135 |
Common stock options | 1,384,341 | 1,410,240 | 1,384,341 | 1,410,240 |
Common stock purchase warrants | $7,428,141 | $529,018 | $7,428,141 | $529,018 |
10_Commitments_Contingencies_D
10. Commitments & Contingencies (Details) (USD $) | Sep. 30, 2014 |
Commitments Contingencies Tables | ' |
2014 | $150,802 |
2015 | 662,203 |
2016 | 675,828 |
2017 | 689,799 |
2018 | 703,931 |
Thereafter | 1,908,626 |
Total | $4,791,189 |