Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2013 |
Summary of Significant Accounting Policies [Abstract] | ' |
Consolidation | ' |
[1] Consolidation: |
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The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Pathfinder, LLC. All inter-company accounts and transactions have been eliminated in consolidation. |
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Revenue recognition policy | ' |
[2] Revenue recognition policy: |
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The Company recognizes revenue when the amounts become fixed and determinable, when product is shipped to customers and receipt of payment is reasonably assured. Terms of sale are “f.o.b. shipping point” with the customer covering all costs of shipment and insurance. All sales are final with no right of return except for defective product. Product sales are generated from the SyntheMed business through sales of REPEL-CV. |
Cash and cash equivalents | ' |
[3] | Cash and cash equivalents: | | | | | | | |
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The Company considers all highly liquid investments purchased with a maturity of three months or less to be cash equivalents. The Company deposits cash and cash equivalents with high credit quality financial institutions and believe any amounts in excess of insurance limitations to be at minimal risk. Cash and cash equivalents held in these accounts are insured by the Federal Deposit Insurance Corporation up to an unlimited amount through December 31, 2012 and a maximum of $250,000, thereafter. |
Accounts Receivable | ' |
[4] Accounts Receivable: |
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Accounts receivable are stated at estimated net realizable value. Management evaluates the need for an allowance for doubtful accounts based on a combination of historical experience, aging analysis and information on specific accounts. In cases where management is aware of circumstances that may impair a specific customer’s ability to meet its financial obligations, management records a specific allowance against amounts due and reduces the net recognized receivable to the amount that we believe will be collected. For all other customers, the Company maintains a reserve that considers the total receivables outstanding, historical collection rates and economic trends. Account balances are written off when collection efforts have been exhausted and the potential for recovery is considered remote. |
Intangible Assets | ' |
[5] | Intangible Assets | | | | | | | |
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Intangible assets are amortized using the straight-line method over the estimated useful life of 15 years, which is based upon management’s timelines for the typical development, approval, and marketing and life cycle of pharmaceutical drug products. |
Impairment of Long-Lived Assets | ' |
[6] | Impairment of Long-Lived Assets | | | | | | | |
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The Company evaluates its long-lived assets for indicators of possible impairment by comparison of the carrying amounts to future net undiscounted cash flows expected to be generated by such assets when events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Should an impairment exist, the impairment loss would be measured based on the excess carrying value of the asset over the asset’s fair value or discounted estimates of future cash flows. |
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During the quarter ended June 30, 2013, the Company determined that the technology licensed from the Massachusetts General Hospital (“MGH”) was no longer relevant to the development of Pathfinder’s products and terminated the MGH license agreement, impairing the entire carrying amount of this intangible asset. As a result, the Company recorded an impairment charge of $161,000 for the year ended December 31, 2013. |
Inventory | ' |
[7] | Inventory: | | | | | | | |
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Inventory is stated at the lower of cost or market, as determined by the first-in, first-out method. The Company maintains an allowance for potentially slow moving and obsolete inventories. Management reviews on-hand inventory for potential slow moving and obsolete amounts and estimates the level of inventory reserve accordingly. The Company’s allowance for slow moving and obsolete inventories includes an allowance for outdated raw materials and on-hand finished goods inventory which is within six months of the expiration date. Inventory consisted of the following: |
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| | December 31, | |
| | 2013 | | | 2012 | |
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Raw materials | | $ | 13,000 | | | $ | 12,000 | |
Finished goods | | | - | | | | 21,000 | |
| | | 13,000 | | | | 33,000 | |
Slow moving and obsolete inventories | | | (13,000 | ) | | | - | |
| | $ | 0 | | | $ | 33,000 | |
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The production of the Company’s inventory is outsourced to third party facilities located in Ohio, Minnesota and Prince Edward Island, Canada. |
Research and development | ' |
[8] | Research and development: | | | | | | | |
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All research and development activities, including any preclinical and clinical studies and product development activities, are outsourced (see Note G). Research and development costs, representing principally new product development and manufacturing development, are charged to expense as incurred. |
Patent costs | ' |
[9] Patent costs: |
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Costs incurred in connection with acquiring patent rights and the protection of proprietary technologies are charged to expense as incurred. |
Use of estimates | ' |
[10] Use of estimates: |
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The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions, on an ongoing basis. We evaluate our estimates, including those related to uncollectible receivables, inventory valuation allowance, the useful lives of intangible assets, valuation of stock-based compensation and income taxes, that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. |
Loss per share | ' |
[11] | Loss per share: | | | | | | | |
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Basic loss per share is computed by dividing the net loss by the weighted average number of shares of common stock outstanding during each period. Diluted loss per share for the years ended December 31, 2013 and 2012 excludes the effect of the potential exercise or conversion of securities which would result in the issuance of incremental shares of common stock because the effect would be anti-dilutive. |
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Securities and the related potential number of shares of common stock not included in the dilution computation, are as follows: |
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| | December 31, | |
| | 2013 | | | 2012 | |
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Options | | | 20,402,000 | | | | 20,950,000 | |
Warrants | | | 6,276,000 | | | | 15,906,000 | |
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| | | 26,678,000 | | | | 36,856,000 | |
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Basic and diluted net loss per common share for the historical financial statements was computed based on the exchange ratio of shares issued in the Merger. |
Stock-based compensation | ' |
[12] Stock-based compensation: |
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The Company follows FASB ASC 718 “Compensation – Stock Compensation” which requires all share-based payments to employees, including grants of employee stock options, to be recognized as compensation expense over the requisite service period (generally the vesting period) in the financial statements based on their fair values. For options with graded vesting, the Company values the stock option grants and recognizes compensation expense as if each vesting portion of the award was a separate award. The impact of forfeitures that may occur prior to vesting is also estimated and considered in the amount of expense recognized. In addition, the realization of tax benefits in excess of amounts recognized for financial reporting purposes will be recognized in the cash flow statement as a financing activity rather than as an operating activity. |
Income taxes | ' |
[13] Income taxes: |
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The Company accounts for income taxes using the asset and liability method described in FASB ASC 740-10, “Income Taxes”, the objective of which is to establish deferred tax assets and liabilities for the temporary differences between the financial reporting and the tax bases of the Company’s assets and liabilities at enacted tax rates expected to be in effect when such amounts are realized or settled. A valuation allowance related to deferred tax assets is recorded when it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company considers estimated future taxable income or loss and other available evidence when assessing the need for its deferred tax valuation allowance. |
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Fair value of financial instruments | ' |
[14] Fair value of financial instruments |
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The carrying amounts of cash, accounts receivables, accounts payable, accrued expenses and notes payable approximate fair value based on their short-term maturity. The carrying value of the long term payable approximates fair value, as the interest rate used to discount the payable still approximates the Company’s current borrowing rate. |