Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2014 | Nov. 04, 2014 | |
Document And Entity Information | ' | ' |
Entity Registrant Name | 'GUIDED THERAPEUTICS INC | ' |
Entity Central Index Key | '0000924515 | ' |
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 | ' | 79,903,439 |
Document Fiscal Period Focus | 'Q3 | ' |
Document Fiscal Year Focus | '2014 | ' |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
CURRENT ASSETS | ' | ' |
Cash and cash equivalents | $42 | $613 |
Accounts receivable, net of allowance for doubtful accounts of $45 and $18 at | 417 | 133 |
Inventory, net of reserves of $124 and $184, at September 30, 2014 and | 1,204 | 1,193 |
Other current assets | 431 | 101 |
Total current assets | 2,094 | 2,040 |
Property and equipment, net | 706 | 920 |
Other assets | 132 | 356 |
Debt issuance cost, net | 790 | 0 |
Total noncurrent assets | 1,628 | 1,276 |
TOTAL ASSETS | 3,722 | 3,316 |
CURRENT LIABILITIES: | ' | ' |
Short-term notes payable | 564 | 35 |
Current portion of long-term note payable | 118 | 109 |
Short-term notes payable, net of discount | 851 | 0 |
Accounts payable | 1,664 | 891 |
Accrued liabilities | 914 | 723 |
Deferred revenue | 10 | 14 |
Total current liabilities | 4,121 | 1,772 |
LONG-TERM LIABILITIES: | ' | ' |
Warrants, at fair value | 1,247 | 1,548 |
Long-term debt payable, less current portion | 40 | 103 |
Convertible Debt, net of discount | 2,259 | 0 |
Total long-term liabilities | 3,546 | 1,651 |
TOTAL LIABILITIES | 7,667 | 3,423 |
STOCKHOLDERS' EQUITY : | ' | ' |
Series B convertible preferred stock, $.001 par value; 3,000 shares authorized, 1,532 and 1,737 shares issued and outstanding as of June 30, 2014 and December 31, 2013, respectively (liquidation preference of $1.5 million and $2.1 million as of June 30, 2014 and December 31, 2013, respectively). | 678 | 1,139 |
Common stock, $.001 Par value; 145,000,000 shares authorized, 75,495,469 and 70,478,961 shares issued and outstanding as of June 30, 2014 and December 31, 2013, respectively. | 79 | 71 |
Additional paid-in capital | 105,268 | 101,840 |
Treasury stock, at cost | -132 | -132 |
Accumulated deficit | -109,838 | -103,025 |
TOTAL STOCKHOLDERS' EQUITY | -3,945 | -107 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $3,722 | $3,316 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
CURRENT ASSETS | ' | ' |
Accounts receivable, net of allowance | $45 | $18 |
Inventory, net of reserves | $124 | $184 |
STOCKHOLDERS' EQUITY : | ' | ' |
Series B convertible preferred stock par value | $0.00 | $0.00 |
Series B convertible preferred stock shares authorized | 3,000 | 3,000 |
Series B convertible preferred stock, Issued | 1,277 | 1,737 |
Series B convertible preferred stock, Outstanding | 1,277 | 1,737 |
Common stock, par value | $0.00 | $0.00 |
Common stock, Authorized | 145,000,000 | 145,000,000 |
Common stock, Issued | 79,377,404 | 70,478,961 |
Common stock, outstanding | 79,377,404 | 70,478,961 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
REVENUE: | ' | ' | ' | ' |
Contract and grant revenue | $22 | $86 | $52 | $474 |
Sales - devices and disposables | 262 | 58 | 586 | 306 |
Cost of goods sold | 260 | 117 | 723 | 394 |
Gross Loss (Loss) | 2 | -59 | -137 | -88 |
COSTS AND EXPENSES: | ' | ' | ' | ' |
Research and development | 892 | 596 | 2,122 | 2,243 |
Sales and marketing | 135 | 249 | 762 | 608 |
General and administrative | 1,412 | 822 | 3,551 | 2,791 |
Total | 2,439 | 1,667 | 6,435 | 5,642 |
Operating loss | -2,415 | -1,640 | -6,520 | -5,256 |
OTHER INCOME / (LOSS) | 9 | 213 | 14 | 289 |
CHANGES IN FAIR VALUE OF WARRANTS | -195 | 0 | 266 | 0 |
INTEREST EXPENSE | -371 | -11 | -445 | -35 |
LOSS BEFORE INCOME TAXES | -2,972 | -1,438 | -6,685 | -5,002 |
PROVISION FOR INCOME TAXES | 0 | 0 | 0 | 0 |
NET LOSS | -2,972 | -1,438 | -6,685 | -5,002 |
PREFERRED STOCK DIVIDENDS | -39 | 0 | -128 | -1,171 |
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS | ($3,011) | ($1,438) | ($6,813) | ($6,173) |
BASIC AND DILUTED NET LOSS PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS | ($0.04) | ($0.02) | ($0.09) | ($0.09) |
WEIGHTED AVERAGE SHARES OUTSTANDING | 77,651 | 66,261 | 74,052 | 65,212 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
CASH FLOWS FROM OPERATING ACTIVITIES: | ' | ' |
Net loss | ($6,685) | ($5,002) |
Adjustments to reconcile net loss to net cash used in operating activities | ' | ' |
Bad debt expense | 32 | 7 |
Depreciation and amortization | 359 | 344 |
Stock based compensation | 852 | 699 |
Warrants | -301 | -210 |
Changes in operating assets and liabilities: | ' | ' |
Inventory | -11 | -296 |
Accounts receivable | -316 | -11 |
Other current assets | -330 | 12 |
Accounts payable | 774 | 57 |
Deferred revenue | -4 | -3 |
Accrued liabilities | 639 | 9 |
Other assets | 184 | -64 |
Total adjustments | 1,877 | 544 |
Net cash used in operating activities | -4,807 | -4,458 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ' | ' |
Additions to fixed assets | -144 | -111 |
Net cash used in investing activities | -144 | -111 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ' | ' |
Net proceeds from issuance of preferred stock and warrants | 0 | 2,214 |
Proceed from issuance of common stock | 201 | 0 |
Proceeds from debt financing | 4,571 | 0 |
Proceeds from options and warrants exercised | 67 | 1,916 |
Payments on notes and loan payables | -459 | -320 |
Net cash provided by financing activities | 4,380 | 3,925 |
NET CHANGE IN CASH AND CASH EQUIVALENTS | -571 | -644 |
CASH AND CASH EQUIVALENTS, beginning of year | 613 | 1,044 |
CASH AND CASH EQUIVALENTS, end of period | 42 | 400 |
SUPPLEMENTAL SCHEDULE OF: | ' | ' |
Cash paid for Interest | 33 | 11 |
NONCASH INVESTING AND FINANCING ACTIVITIES: | ' | ' |
Deemed dividends on preferred stock | 0 | 1,171 |
Issuance of common stock as board compensation | 355 | 463 |
Debt issuance cost paid via warrants | 522 | 0 |
Conversion of convertible debt into common stock | 800 | 0 |
Conversion of accrued expenses into common stock / options | $178 | $0 |
1_BASIS_OF_PRESENTATION
1. BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
1. BASIS OF PRESENTATION | ' |
The accompanying unaudited condensed consolidated financial statements included herein have been prepared in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) for interim financial reporting and with the instructions to Form 10-Q and Article 10 of Regulation S-X by Guided Therapeutics, Inc. (formerly SpectRx, Inc.), together with its wholly owned subsidiary InterScan, Inc., (“InterScan”) (formerly Guided Therapeutics, Inc.), collectively referred to herein as the “Company”. Accordingly, they do not include all information and footnotes required by GAAP for complete financial statements. These statements reflect adjustments, all of which are of a normal, recurring nature, and which are, in the opinion of management, necessary to present fairly the Company’s financial position as of September 30, 2014, results of operations for the three and nine months ended September 30, 2014 and 2013, and cash flows for the nine months ended September 30, 2014 and 2013. The results of operations for the three and nine months ended September 30, 2014 are not necessarily indicative of the results for a full fiscal year. Preparing financial statements requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and disclosure of contingent assets and liabilities. Actual results could differ from those estimates. These financial statements should be read in conjunction with the financial statements and notes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2013. | |
The Company's prospects must be considered in light of the substantial risks, expenses and difficulties encountered by entrants into the medical device industry. This industry is characterized by an increasing number of participants, intense competition and a high failure rate. The Company has experienced net losses since its inception and, as of September 30, 2014, it had an accumulated deficit of approximately $109.8 million. Through September 30, 2014, the Company has devoted substantial resources to research and development efforts. The Company does not have significant experience in manufacturing, marketing or selling its products. The Company's development efforts may not result in commercially viable products and it may not be successful in introducing its products. Moreover, required regulatory clearances or approvals may not be obtained. The Company's products may not ever gain market acceptance and the Company may not ever achieve levels of revenue to sustain further development costs and support ongoing operations or achieve profitability. The development and commercialization of the Company's products will require substantial development, regulatory, sales and marketing, manufacturing and other expenditures. The Company expects operating losses to continue through the foreseeable future as it continues to expend substantial resources to complete development of its products, obtain regulatory clearances or approvals and conduct further research and development. | |
Going Concern | |
The Company’s consolidated financial statements have been prepared and presented on a basis assuming it will continue as a going concern. The factors below raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might be necessary from the outcome of this uncertainty. Notwithstanding the foregoing, the Company believes it has made progress in recent years in stabilizing its financial situation by execution of multiyear contracts from Konica Minolta Opto, Inc., a subsidiary of Konica Minolta, Inc., a Japanese corporation based in Tokyo (“Konica Minolta”) and grants from the National Cancer Institute (“NCI”), while at the same time simplifying its capital structure and significantly reducing debt. However, the Company has replaced its prior agreements with Konica Minolta with a new licensing agreement, and therefore will no longer receive direct payments from Konica Minolta, and will have to pay a royalty to Konica Minolta should the Company sell any products licensed from Konica Minolta. | |
At September 30, 2014, the Company had negative working capital of approximately $2.0 million and the stockholders’ deficit was approximately $4.0 million, primarily due to recurring net losses from operations, deemed dividends on warrants and preferred stock, offset by proceeds from the exercise of options and warrants. | |
The Company’s capital-raising efforts are ongoing. If sufficient capital cannot be raised by the fourth quarter of 2014, the Company has plans to curtail operations by reducing discretionary spending and staffing levels, and attempting to operate by only pursuing activities for which it has external financial support and additional NCI, NHI or other grant funding. However, there can be no assurance that such external financial support will be sufficient to maintain even limited operations or that the Company will be able to raise additional funds on acceptable terms, or at all. In such a case, the Company might be required to enter into unfavorable agreements or, if that is not possible, be unable to continue operations, and to the extent practicable, liquidate and/or file for bankruptcy protection. | |
The Company had warrants exercisable for approximately 15.7 million shares of its common stock outstanding at September 30, 2014, with exercise prices of $0.24 to $1.08 per share. Exercises of these warrants would generate a total of approximately $8.1 million in cash, assuming full exercise, although the Company cannot be assured that holders will exercise any warrants. Management may obtain additional funds through the public or private sale of debt or equity and through grants, if available. | |
The Company submitted a PMA Amendment to the US FDA on July 24, 2014. The Company expects to hear back from the FDA regarding the submission by January 24, 2015 or sooner. If the Company receives a favorable result from the FDA review, US launch of LuViva could occur as early as the second half of 2015. However, the Company cannot be assured it will be able to launch on this timetable, or at all. Product launch outside the United States began in the second half of 2013. |
2_SIGNIFICANT_ACCOUNTING_POLIC
2. SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Accounting Policies [Abstract] | ' | ||||||||
2. SIGNIFICANT ACCOUNTING POLICIES | ' | ||||||||
The Company’s significant accounting policies were set forth in the audited financial statements and notes thereto for the year ended December 31, 2013 included in its annual report on Form 10-K, filed with the Securities and Exchange Commission (“SEC”). | |||||||||
Use of Estimates | |||||||||
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant areas where estimates are used include the allowance for doubtful accounts, inventory valuation and input variables for Black-Scholes, Monte Carlo simulations and Lattice Model calculations. | |||||||||
Principles of Consolidation | |||||||||
The accompanying consolidated financial statements, as of and for the quarters ended September 30, 2014 and 2013, includes the accounts of Guided Therapeutics, Inc. and its wholly owned subsidiary. | |||||||||
Accounting Standards Updates | |||||||||
Newly effective accounting standards updates and those not effective until after September 30, 2014, are not expected to have a significant effect on the Company’s financial position or results of operations. | |||||||||
Cash Equivalents | |||||||||
The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be a cash equivalent. | |||||||||
Concentration of Credit Risk | |||||||||
The Company, from time to time during the periods covered by these consolidated financial statements, may have bank balances in excess of its insured limits. Management has deemed this a normal business risk. | |||||||||
Inventory Valuation | |||||||||
All inventories are stated at lower of cost or market, with cost determined substantially on a “first-in, first-out” basis. Selling, general, and administrative expenses are not inventoried, but are charged to expense when purchased. At September 30, 2014 and December 31, 2013 our inventories were as follows (in thousands): | |||||||||
September 30, | December 31 | ||||||||
2014 | 2013 | ||||||||
Raw materials | $ | 1,089 | $ | 1,013 | |||||
Work in process | 143 | 268 | |||||||
Finished goods | 96 | 96 | |||||||
Inventory reserve | (124 | ) | (184 | ) | |||||
Total | $ | 1,204 | $ | 1,193 | |||||
Debt Issuance Costs | |||||||||
Debt issuance costs incurred in securing the Company’s financing arrangements are capitalized and amortized over the term of the debt. Deferred financing costs are included in other long term assets. | |||||||||
Property and equipment | |||||||||
Property and equipment are recorded at cost. Depreciation is computed using the straight-line method over estimated useful lives of three to seven years. Leasehold improvements are depreciated at the shorter of the useful life of the asset or the remaining lease term. Depreciation expense is included in general and administrative expense on the statement of operations. Expenditures for repairs and maintenance are expensed as incurred. | |||||||||
Revenues | |||||||||
The majority of the Company’s revenues were from product sales of approximately $586,000, grants with NIH totaling approximately $52,000, as well as other income from royalties of approximately $14,000, for the nine months ended September 30, 2014. Substantially all of the Company’s revenues, for the nine months ended September 30, 2013, were from product sales, totaling approximately $306,000, grants with the NIH and NCI, totaling approximately $295,000, and other contract revenue from royalty and miscellaneous receipts, totaling approximately $179,000. | |||||||||
Accounts Receivable | |||||||||
The Company performs periodic credit evaluations of its customers’ financial condition and generally does not require collateral. The Company reviews all outstanding accounts receivable for collectability on a quarterly basis. An allowance for doubtful accounts is recorded for any amounts deemed uncollectable. The Company does not accrue interest receivable on past due accounts. | |||||||||
Revenue Recognition | |||||||||
Revenue from the sale of the Company’s products is recognized upon shipment of such products to its customers. The Company recognizes revenue from contracts on a straight line basis, over the terms of the contract. The Company recognizes revenue from grants based on the grant agreement, at the time the expenses are incurred. | |||||||||
Deferred Revenue | |||||||||
The Company defers payments received as revenue until earned based on the related contracts on a straight line basis, over the terms of the contract. | |||||||||
Income Taxes | |||||||||
The Company accounts for income taxes in accordance with the liability method. Under the liability method, the Company recognizes deferred assets and liabilities based upon anticipated future tax consequences attributable to differences between financial statement carrying amounts of assets and liabilities and their respective tax bases. The Company establishes a valuation allowance to the extent that it is more likely than not that deferred tax assets will not be utilized against future taxable income. As of December 31, 2013, the Company had approximately $59.8 million of net operating loss (“NOL”) carry forward. There was no provision for income taxes at September 30, 2014. A full valuation allowance has been recorded related to any deferred tax assets created from the NOL. | |||||||||
Stock Option Plan | |||||||||
The Company measures the cost of employees services received in exchange for equity awards, including stock options, based on the grant date fair value of the awards. The cost will be recognized as compensation expense over the vesting period of the awards. | |||||||||
Warrants | |||||||||
The Company has issued warrants, which allow the warrant holder to purchase one share of stock at a specified price for a specified period of time. The Company records equity instruments including warrants issued to non-employees based on the fair value at the date of issue. The fair value of warrants classified as equity instruments at date of issuance is estimated using the Black-Scholes Model. The fair value of warrants classified as liabilities at the date of issuance is estimated using the Monte Carlo Simulation model. | |||||||||
3_FAIR_VALUE_OF_FINANCIAL_INST
3. FAIR VALUE OF FINANCIAL INSTRUMENTS | 9 Months Ended | ||||||||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||||||||
Investments, All Other Investments [Abstract] | ' | ||||||||||||||||||||||||||
3. FAIR VALUE OF FINANCIAL INSTRUMENTS | ' | ||||||||||||||||||||||||||
The guidance for fair value measurements, ASC820, Fair Value Measurements and Disclosures, establishes the authoritative definition of fair value, sets out a framework for measuring fair value, and outlines the required disclosures regarding fair value measurements. Fair value is the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. The Company uses a three-tier fair value hierarchy based upon observable and non-observable inputs as follow: | |||||||||||||||||||||||||||
· | Level 1 – Quoted market prices in active markets for identical assets and liabilities; | ||||||||||||||||||||||||||
· | Level 2 – Inputs, other than level 1 inputs, either directly or indirectly observable; and | ||||||||||||||||||||||||||
· | Level 3 – Unobservable inputs developed using internal estimates and assumptions (there is little or no market date) which reflect those that market participants would use. | ||||||||||||||||||||||||||
The Company records its derivative activities at fair value, which consisted of warrants as of September 30, 2014. The fair value of the warrants was estimated using the Monte Carlo Simulation model. Gains and losses from derivative contracts are included in net gain (loss) from derivative contracts in the statement of operations. The fair value of the Company’s derivative warrants is classified as a Level 3 measurement, since unobservable inputs are used in the valuation. | |||||||||||||||||||||||||||
The following table presents the fair value for those liabilities measured on a recurring basis as of September 30, 2014 and December 31, 2013: | |||||||||||||||||||||||||||
FAIR VALUE MEASUREMENTS ( In Thousands) | |||||||||||||||||||||||||||
Description | Level 1 | Level 2 | Level 3 | Total | Asset/(Liability) | Date | |||||||||||||||||||||
Total | |||||||||||||||||||||||||||
Warrants | $ | — | $ | — | $ | (1,548 | ) | $ | (1,548 | ) | $ | (1,548 | ) | 31-Dec-13 | |||||||||||||
Warrants | $ | — | $ | — | $ | (1,247 | ) | $ | (1,247 | ) | $ | (1,247 | ) | 31-Mar-14 | |||||||||||||
4_STOCK_OPTIONS
4. STOCK OPTIONS | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Notes to Financial Statements | ' | ||||||||||||||||
4. STOCK OPTIONS | ' | ||||||||||||||||
The Company records compensation expense related to options granted to non-employees based on the fair value of the award. | |||||||||||||||||
Compensation cost is recorded as earned for all unvested stock options outstanding at the beginning of the first year based upon the grant date fair value estimates, and for compensation cost for all share-based payments granted or modified subsequently, based on fair value estimates. | |||||||||||||||||
For the three and nine months ended September 30, 2014, stock-based compensation for options attributable to employees, officers and directors was approximately $272,000 and $559,000, respectively. Compensation costs for stock options, which vest over time, are recognized over the vesting period. As of September 30, 2014, the Company had approximately $622,000 of unrecognized compensation cost related to granted stock options, to be recognized over the remaining vesting period of approximately three years. | |||||||||||||||||
The Company has a 1995 stock option plan (the “Plan”) approved by its stockholders for officers, directors and key employees of the Company and consultants to the Company. Participants are eligible to receive incentive and/or nonqualified stock options. The aggregate number of shares that may be granted under the Plan is 13,255,219 shares. The Plan is administered by the compensation committee of the board of directors. The selection of participants, grant of options, determination of price and other conditions relating to the exercise of options are determined by the compensation committee of the board of directors and administered in accordance with the Plan. | |||||||||||||||||
Both incentive stock options and non-qualified options granted to employees, officers and directors under the Plan are exercisable for a period of up to 10 years from the date of grant, at an exercise price that is not less than the fair market value of the common stock on the date of the grant. The options typically vest in installments of 1/48 of the options outstanding every month. Options granted to management vest based upon certain market and performance conditions. | |||||||||||||||||
A summary of the Company’s activity under the Plan as of September 30, 2014 and changes during the nine months then ended is as follows: | |||||||||||||||||
Shares | Weighted | Weighted | Aggregate | ||||||||||||||
average | average | intrinsic | |||||||||||||||
exercise | remaining | value | |||||||||||||||
price | contractual | (thousands) | |||||||||||||||
(years) | |||||||||||||||||
Outstanding, January 1, 2014 | 6,531,192 | $ | 0.66 | 6.97 | $ | 625,412 | |||||||||||
Granted | 496,761 | 0.5 | |||||||||||||||
Exercised / Expired | (319,963 | ) | 0.43 | ||||||||||||||
Outstanding, September 30, 2014 | 6,707,990 | $ | 0.67 | 5.78 | $ | 56,830 | |||||||||||
Vested and exercisable, September 30, 2014 | 5,918,043 | $ | 0.65 | 5.41 | $ | 56,830 | |||||||||||
The Company estimates the fair value of stock options using a Black-Scholes and Lattice valuation models. Key input assumptions used to estimate the fair value of stock options include the expected term, expected volatility of the Company’s stock, the risk free interest rate, option forfeiture rates, and dividends, if any. The expected term of the options is based upon the historical term until exercise or expiration of all granted options. The expected volatility is derived from the historical volatility of the Company’s stock on the OTCBB market for a period that matches the expected term of the option. The risk-free interest rate is the constant maturity rate published by the U.S. Federal Reserve Board that corresponds to the expected term of the option. | |||||||||||||||||
5_LITIGATION_AND_CLAIMS
5. LITIGATION AND CLAIMS | 9 Months Ended |
Sep. 30, 2014 | |
Notes to Financial Statements | ' |
5. LITIGATION AND CLAIMS | ' |
From time to time, the Company may be involved in various legal proceedings and claims arising in the ordinary course of business. Management believes that the dispositions of these matters, individually or in the aggregate, are not expected to have a material adverse effect on the Company’s financial condition. However, depending on the amount and timing of such disposition, an unfavorable resolution of some or all of these matters could materially affect the future results of operations or cash flows in a particular period. | |
As of September 30, 2014 and December 31, 2013, there was no accrual recorded for any potential losses related to pending litigation. |
6_CONVERTIBLE_DEBT
6. CONVERTIBLE DEBT | 9 Months Ended |
Sep. 30, 2014 | |
Debt Disclosure [Abstract] | ' |
6. CONVERTIBLE DEBT | ' |
On April 23, 2014, the Company entered into a securities purchase agreement (the “Purchase Agreement”), with Magna Equities II, LLC (formerly Hanover Holdings I, LLC), an affiliate of Magna Group (“Magna”). Pursuant to the Purchase Agreement, the Company sold Magna a 6% senior convertible note with an initial principal amount of $1.5 million and an 18-month term (the “Initial Convertible Note”), for a purchase price of $1.0 million (an approximately 33.3% original issue discount). Additionally, pursuant to the Purchase Agreement, on May 23, 2014 Magna purchased an additional senior convertible note with an initial principal amount of $2.0 million and an 18-month term (the “Additional Convertible Note” and, with the Initial Convertible Note, (the “Convertible Notes”), for a fixed purchase price of $2.0 million. | |
Pursuant to the terms of the Initial Convertible Note, $500,000 of the outstanding principal amount (together with any accrued and unpaid interest with respect to such portion) was automatically extinguished (without any cash payment by the Company) upon satisfaction of certain conditions. | |
Subject to certain limitations, the Convertible Notes are convertible at any time, in whole or in part, at Magna’s option, into shares of the Company’s common stock, at a conversion price equal to the lesser of $0.55 per share and a discount from the lowest daily volume-weighted average price of the Company’s common stock in the five trading days prior to conversion. The discount is 20% if the conversion takes place prior to December 19, 2014 (November 20, 2014 for the initial Convertible Note, pursuant to a November 21, 2014 agreement described in Note 10, Subsequent Event), and 25% if after that date. At no time will Magna be entitled to convert any portion of the Convertible Notes to the extent that after such conversion, Magna (together with its affiliates) would beneficially own more than 9.99% of the outstanding shares of the Company’s common stock as of such date. As long as Magna or its affiliates beneficially own any of the shares issued upon conversion, they may not engage in any “short sale” transactions in the Company’s common stock and may not sell more than the greater of $15,000 or 15% of the trading volume of the common stock in any single trading day. | |
The Convertible Notes include customary event of default provisions and a default interest rate of 16%. Upon the occurrence of an event of default, Magna may require the Company to pay in cash the “Event of Default Redemption Price,” which is defined in the Convertible Notes to mean the greater of (i) the product of (A) the amount to be redeemed multiplied by (B) 135% (or 100% if an insolvency related event of default) and (ii) the product of (X) the conversion price in effect at that time multiplied by (Y) the product of (1) 135% (or 100% if an insolvency related event of default) multiplied by (2) the greatest closing sale price of the common stock on any trading day during the period commencing on the date immediately preceding such event of default and ending on the date the Company makes the entire payment required to be made under this provision. | |
The Company paid to Magna a commitment fee for entering into the Purchase Agreement in the form of 321,820 shares of common stock. The Company also paid $50,000 of reasonable attorneys’ fees and expenses incurred by Magna in connection with the transaction. Total debt issuance costs incurred on the Senior Convertible Note was approximately $889,000. This amount is being amortized over 18 months. Approximately $148,000 and $213,000 were recorded as expense in the three and nine months ended September 30, 2014, respectively. | |
In connection with the sale of the Convertible Notes, the Company issued its placement agent warrants exercisable for 200,000 shares of common stock at $0.50 per share with an expiration date of April 23, 2019, and warrants exercisable for 561,798 shares of common stock at $0.45 per share with an expiration date of May 22, 2019. | |
As of September 30, 2014, the Company had issued a total of 2,364,929 shares of common stock, in conjunction with conversions of the Convertible Notes. |
7_STOCKHOLDERS_DEFICIT
7. STOCKHOLDERS' DEFICIT | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
Equity [Abstract] | ' | ||||
7. STOCKHOLDERS' DEFICIT | ' | ||||
Common Stock | |||||
The Company has authorized 145 million shares of common stock with $0.001 par value, 79,377,404 of which were outstanding as of September 30, 2014. During the nine months ended September 30, 2014, the Company issued 242,440 shares in connection with the exercise of outstanding options. | |||||
For the nine months ended September 30, 2014, the Company issued 2,074,603 shares of common stock in connection with conversions of outstanding shares of Series B preferred stock, as well as 99,766 shares of common stock as payment of accrued dividends on the Series B preferred stock. | |||||
Stock issued to employees and directors | |||||
The Company issued 2,000,000 restricted shares of stock to an officer valued at $731,000 during the first quarter of 2014. The shares are comprised of two tiers, including 1,000,000 shares in each tier, and are subject to performance and service conditions for vesting. If the performance conditions are not achieved prior to January 2017, the restricted shares will be forfeited. | |||||
Total compensation expense recorded for the three and nine months ended September 30, 2014 was approximately $98,000 and $293,000, respectively. | |||||
The Company issued 771,740 shares of common stock to directors valuing $355,000 during the third quarter of 2014. | |||||
Preferred Stock; Series B Convertible Preferred Stock | |||||
The Company has authorized 5,000,000 shares of preferred stock with a $.001 par value. The board of directors has the authority to issue these shares and to set dividends, voting and conversion rights, redemption provisions, liquidation preferences, and other rights and restrictions. The board of directors designated 525,000 shares of preferred stock as redeemable convertible preferred stock, none of which remain outstanding, and 3,000 shares of preferred stock as Series B Preferred Stock, of which 1,277 and 2,147 shares were issued and outstanding as of September 30, 2014 and December 31, 2013, respectively. | |||||
Pursuant to the terms of the Series B Preferred Stock set forth in the Certificate of Designations, Preferences and Rights designating the Preferred Stock (the “Preferred Stock Designation”), shares of Series B Preferred Stock are convertible into common stock by their holder at any time, and will be mandatorily convertible upon the achievement of certain conditions, including the receipt of certain approvals from the U.S. Food and Drug Administration and the achievement by the Company of specified average trading prices and volumes for the common stock. The original conversion price was $0.68 per share, such that each share of Preferred Stock would convert into 1,471 shares of common stock, subject to customary adjustments, including any accrued but unpaid dividends and pursuant to certain anti-dilution provisions, as set forth in the Preferred Stock Designation. As a result of anti-dilution provisions, the conversion price as of September 30, 2014 was $0.24 per share, such that each share of Preferred Stock would convert into 4,132 shares of common stock. | |||||
Holders of the Series B Preferred Stock are entitled to quarterly dividends at an annual rate of 10.0%, payable in cash or, subject to certain conditions, common stock, at the Company’s option. Accrued dividends totaled approximately $39,000 at September 30, 2014. Each share of Series B Preferred Stock is entitled to a number of votes equal to the number of shares of common stock into which the Series B Preferred Stock is convertible. As long as shares of the Series B Preferred Stock are outstanding, and until the receipt of certain approvals from the U.S. Food and Drug Administration and the achievement by the Company of specified average trading prices and volumes for the common stock, the Company may not incur indebtedness for borrowed money secured by the Company’s intellectual property or in excess of $2.0 million without the prior consent of the holders of two-thirds of the outstanding shares of Series B Preferred Stock. The Company may redeem the Series B Preferred Stock after the second anniversary of issuance, subject to certain conditions. Upon the Company’s liquidation or sale to or merger with another corporation, each share of Series B Preferred Stock will be entitled to a liquidation preference of $1,000 per share, plus any accrued but unpaid dividends. | |||||
The Series B Preferred Stock was issued with Tranche A warrants to purchase 1,858,089 shares of common stock and Tranche B warrants purchasing 1,858,088 shares of common stock, both at an exercise price of $1.08 per share. Pursuant to the terms of the Tranche B warrants, their exercise price will be reduced, and the number of shares of common stock into which those warrants are exercisable will be increased, if the Company issues shares at a price below the then-current exercise price. The exercise price of Tranche B warrants at September 30, 2014 was $0.24, and on that date, the Tranche B warrants were convertible into 8,292,297 shares of common stock. As a result of these provisions, the Company is required to account for the warrants as a liability recorded at fair value each period. The Company values the warrants using a Monte Carlo Simulation model. Of the $2.6 million in proceeds from issuance of the Series B Preferred Stock, the Company originally allocated $873,000 to the fair value of the warrants. At September 30, 2014 and December 31, 2013, the fair value of these warrants was approximately $1.2 million and $1.5 million, respectively. | |||||
Warrants | |||||
We have issued warrants to purchase our common stock from time to time in connection with certain financing arrangements. | |||||
The Company had the following shares reserved for the warrants as of September 30, 2014: | |||||
Warrants | Exercise Price | Expiration Date | |||
(Underlying Shares) | |||||
3,590,522 | -1 | $0.80 per share | 1-Mar-15 | ||
6,790 | -2 | $1.01 per share | 10-Sep-15 | ||
439,883 | -3 | $0.68 per share | 31-Mar-16 | ||
285,186 | -4 | $1.05 per share | 20-Nov-16 | ||
1,858,089 | -5 | $1.08 per share | 23-May-18 | ||
8,292,297 | -6 | $0.24 per share | 23-May-18 | ||
200,000 | -7 | $0.50 per share | 23-Apr-19 | ||
561,798 | -7 | $0.45 per share | 22-May-19 | ||
184,211 | -8 | $0.38 per share | 9-Sep-19 | ||
325,521 | -9 | $0.46 per share | 17-Sep-19 | ||
__________ | |||||
(1) Consists of outstanding warrants issued in connection with a warrant exchange program in June 2012. | |||||
-2 | Consists of outstanding warrants issued in conjunction with a private placement on September 10, 2010. | ||||
-3 | Consists of outstanding warrants issued in conjunction with a buy back of our minority interest in our subsidiary in December 2012, which were issued in February 2014. | ||||
-4 | Consists of outstanding warrants issued in conjunction with a private placement on November 21, 2011. | ||||
-5 | Consists of outstanding warrants issued in conjunction with a private placement on May 24, 2013. | ||||
-6 | Underlying shares increased from 1,858,089 to 8,292,297, and exercise price decreased from $1.08 per share to $0.24 per share, pursuant to the terms of the warrants, as a result of certain conversions of Convertible Notes. | ||||
-7 | Consists of outstanding warrants issued to a placement agent in conjunction with the April 23, 2014 and May 23, 2014 sales of Convertible Notes. | ||||
-8 | Consists of outstanding warrants issued to a placement agent in conjunction with a September 2014 secured note offering. | ||||
-9 | Consists of outstanding warrants issued in conjunction with a Regulation S private placement on September 17, 2014. | ||||
8_LOSS_PER_COMMON_SHARE
8. LOSS PER COMMON SHARE | 9 Months Ended |
Sep. 30, 2014 | |
Earnings Per Share [Abstract] | ' |
8. LOSS PER COMMON SHARE | ' |
Basic net loss per share attributable to common stockholders amounts are computed by dividing the net loss plus preferred stock dividends and deemed dividends on preferred stock by the weighted average number of common shares outstanding during the period. |
9_NOTES_PAYABLE
9. NOTES PAYABLE | 9 Months Ended |
Sep. 30, 2014 | |
Debt Disclosure [Abstract] | ' |
9. NOTES PAYABLE | ' |
Short Term Notes Payable | |
At September 30, 2014, the Company maintained notes payable and accrued interest to related parties totaling $564,000. These notes are short term, straight-line amortizing notes. The notes carry an annual interest rate of between 5% and 10%. | |
On September 10, 2014, the Company entered into a note purchase agreement with Tonaquint, Inc., pursuant to which the Company sold a secured promissory note to Tonaquint with an initial principal amount of $1,275,000, for a purchase price of $700,000 (an original issue discount of $560,000). The Company also paid $15,000 of reasonable attorneys’ fees and expenses incurred by Tonaquint, Inc. in connection with the transaction. The note does not bear interest, and will be due six months from issuance. The Company may prepay the note at any time, with the following discounts applied: if the Company prepays the note on or before the 70th day from the date of issuance, a $420,000 reduction of the outstanding principal amount of the note will be applied, and if the Company prepays the note after the 70th day, but on or before the 120th day from the date of issuance, a $210,000 reduction of the outstanding principal amount of the note will be applied. The note is secured by the Company’s current and future accounts receivable and inventory, pursuant to a security agreement entered into in connection with the note purchase agreement. | |
In connection with the offering, the Company issued its placement agent warrants exercisable for 184,211 shares at $0.38 per share with an expiration date of September 10, 2019. | |
Total debt issuance cost capitalized was approximately $130,000. This amount is being amortized over six months. Total amortized expense for the three and nine months ended September 30, 2014 was approximately $15,000. | |
For the three months ended September 30, 2014, the Company recorded amortization of approximately $35,000 on the discount. | |
Notes Payable | |
At December 31, 2012, the Company was past due on two short-term notes totaling approximately $419,000 of principal and accrued interest. Interest charged on these notes prior to amendment ranged between 15-18%. On February 27, 2013, the Company renegotiated one of the two past due notes. The new note accrued interest at 6% and was paid in full during the quarter ended June 30, 2013. On April 16, 2013, the Company renegotiated the other note. The renegotiated note accrues interest at 9.0%, with a 16.0% default rate, requires monthly payments of $10,000, including interest, and matures November 2015. The balance due on this note was approximately $153,000 and $208,000 at September 30, 2014 and December 31, 2013, respectively. As of September 30, 2014, the note is accruing interest at the default rate, of which principal and interest of $60,000 is payable during the year ending December 31, 2014 and $102,000 is payable during the year ending February 2016. | |
At September 30, 2014, the Company maintained a note payable to Premium Assignment Corporation, an insurance premium financing company, of approximately $100,000. These notes are 10 month straight-line amortizing loans dated June 24, 2014. The notes carry annual interest of 4.6%. The balance due to on the Premium Assignment note was approximately $71,000 at September 30, 2014. |
10_SUBSEQUENT_EVENTS
10. SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2014 | |
Subsequent Events [Abstract] | ' |
10. SUBSEQUENT EVENTS | ' |
On October 23, 2014 the Company’s President and CEO, Gene Cartwright, advanced the Company $30,000 in cash for a 5% simple interest note. On October 24, 2014 and October 7, 2014, the Company’s Senior Vice President of Engineering, Richard Fowler, advanced $6,100 and $20,000, respectively, in cash for 6% simple interest notes. On October 7, 2014, the Company’s Director of Marketing advanced $10,000 in cash for a 6% simple interest note. | |
On November 4, 2014, a stockholder of the Company, Richard Blumberg, advanced the Company $100,000 in cash for a note for $106,500 in aggregate principal and interest due November 30, 2014. | |
On November 6, 2014, Magna agreed to refrain from converting any portion of the Convertible Notes or selling any shares of the Company’s common stock until after November 21, 2014, in exchange for an acceleration of the scheduled increase in the conversion discount on the Initial Convertible Note from December 19, 2014 to November 21, 2014. | |
2_SIGNIFICANT_ACCOUNTING_POLIC1
2. SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Accounting Policies [Abstract] | ' | ||||||||
Use of Estimates | ' | ||||||||
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant areas where estimates are used include the allowance for doubtful accounts, inventory valuation and input variables for Black-Scholes, Monte Carlo simulations and Lattice Model calculations. | |||||||||
Principles of Consolidation | ' | ||||||||
The accompanying consolidated financial statements, as of and for the quarters ended September 30, 2014 and 2013, includes the accounts of Guided Therapeutics, Inc. and its wholly owned subsidiary. | |||||||||
Accounting Standards Updates | ' | ||||||||
Newly effective accounting standards updates and those not effective until after September 30, 2014, are not expected to have a significant effect on the Company’s financial position or results of operations. | |||||||||
Cash Equivalents | ' | ||||||||
The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be a cash equivalent. | |||||||||
Concentration of Credit Risk | ' | ||||||||
The Company, from time to time during the periods covered by these consolidated financial statements, may have bank balances in excess of its insured limits. Management has deemed this a normal business risk. | |||||||||
Inventory Valuation | ' | ||||||||
All inventories are stated at lower of cost or market, with cost determined substantially on a “first-in, first-out” basis. Selling, general, and administrative expenses are not inventoried, but are charged to expense when purchased. At September 30, 2014 and December 31, 2013 our inventories were as follows (in thousands): | |||||||||
September 30, | December 31 | ||||||||
2014 | 2013 | ||||||||
Raw materials | $ | 1,089 | $ | 1,013 | |||||
Work in process | 143 | 268 | |||||||
Finished goods | 96 | 96 | |||||||
Inventory reserve | (124 | ) | (184 | ) | |||||
Total | $ | 1,204 | $ | 1,193 | |||||
Debt Issuance Costs | ' | ||||||||
Debt issuance costs incurred in securing the Company’s financing arrangements are capitalized and amortized over the term of the debt. Deferred financing costs are included in other long term assets. | |||||||||
Property and equipment | ' | ||||||||
Property and equipment are recorded at cost. Depreciation is computed using the straight-line method over estimated useful lives of three to seven years. Leasehold improvements are depreciated at the shorter of the useful life of the asset or the remaining lease term. Depreciation expense is included in general and administrative expense on the statement of operations. Expenditures for repairs and maintenance are expensed as incurred. | |||||||||
Revenues | ' | ||||||||
The majority of the Company’s revenues were from product sales of approximately $586,000, grants with NIH totaling approximately $52,000, as well as other income from royalties of approximately $14,000, for the nine months ended September 30, 2014. Substantially all of the Company’s revenues, for the nine months ended September 30, 2013, were from product sales, totaling approximately $306,000, grants with the NIH and NCI, totaling approximately $295,000, and other contract revenue from royalty and miscellaneous receipts, totaling approximately $179,000. | |||||||||
Accounts Receivable | ' | ||||||||
The Company performs periodic credit evaluations of its customers’ financial condition and generally does not require collateral. The Company reviews all outstanding accounts receivable for collectability on a quarterly basis. An allowance for doubtful accounts is recorded for any amounts deemed uncollectable. The Company does not accrue interest receivable on past due accounts. | |||||||||
Revenue Recognition | ' | ||||||||
Revenue from the sale of the Company’s products is recognized upon shipment of such products to its customers. The Company recognizes revenue from contracts on a straight line basis, over the terms of the contract. The Company recognizes revenue from grants based on the grant agreement, at the time the expenses are incurred. | |||||||||
Deferred Revenue | ' | ||||||||
The Company defers payments received as revenue until earned based on the related contracts on a straight line basis, over the terms of the contract. | |||||||||
Income Taxes | ' | ||||||||
The Company accounts for income taxes in accordance with the liability method. Under the liability method, the Company recognizes deferred assets and liabilities based upon anticipated future tax consequences attributable to differences between financial statement carrying amounts of assets and liabilities and their respective tax bases. The Company establishes a valuation allowance to the extent that it is more likely than not that deferred tax assets will not be utilized against future taxable income. As of December 31, 2013, the Company had approximately $59.8 million of net operating loss (“NOL”) carry forward. There was no provision for income taxes at September 30, 2014. A full valuation allowance has been recorded related to any deferred tax assets created from the NOL. | |||||||||
Stock Option Plan | ' | ||||||||
The Company measures the cost of employees services received in exchange for equity awards, including stock options, based on the grant date fair value of the awards. The cost will be recognized as compensation expense over the vesting period of the awards. | |||||||||
Warrants | ' | ||||||||
The Company has issued warrants, which allow the warrant holder to purchase one share of stock at a specified price for a specified period of time. The Company records equity instruments including warrants issued to non-employees based on the fair value at the date of issue. The fair value of warrants classified as equity instruments at date of issuance is estimated using the Black-Scholes Model. The fair value of warrants classified as liabilities at the date of issuance is estimated using the Monte Carlo Simulation model. |
2_SIGNIFICANT_ACCOUNTING_POLIC2
2. SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' | ||||||||
Inventory Valuation | ' | ||||||||
September 30, | December 31 | ||||||||
2014 | 2013 | ||||||||
Raw materials | $ | 1,089 | $ | 1,013 | |||||
Work in process | 143 | 268 | |||||||
Finished goods | 96 | 96 | |||||||
Inventory reserve | (124 | ) | (184 | ) | |||||
Total | $ | 1,204 | $ | 1,193 |
3_FAIR_VALUE_OF_FINANCIAL_INST1
3. FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 9 Months Ended | ||||||||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||||||||
Investments, All Other Investments [Abstract] | ' | ||||||||||||||||||||||||||
Schedule fo fair value for liabilities measured on a recurring basis | ' | ||||||||||||||||||||||||||
Description | Level 1 | Level 2 | Level 3 | Total | Asset/(Liability) | Date | |||||||||||||||||||||
Total | |||||||||||||||||||||||||||
Warrants | $ | — | $ | — | $ | (1,548 | ) | $ | (1,548 | ) | $ | (1,548 | ) | 31-Dec-13 | |||||||||||||
Warrants | $ | — | $ | — | $ | (1,247 | ) | $ | (1,247 | ) | $ | (1,247 | ) | 31-Mar-14 |
4_STOCK_OPTIONS_Tables
4. STOCK OPTIONS (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Stock Options Tables | ' | ||||||||||||||||
Stock Options activity | ' | ||||||||||||||||
Shares | Weighted | Weighted | Aggregate | ||||||||||||||
average | average | intrinsic | |||||||||||||||
exercise | remaining | value | |||||||||||||||
price | contractual | (thousands) | |||||||||||||||
(years) | |||||||||||||||||
Outstanding, January 1, 2014 | 6,531,192 | $ | 0.66 | 6.97 | $ | 625,412 | |||||||||||
Granted | 496,761 | 0.5 | |||||||||||||||
Exercised / Expired | (319,963 | ) | 0.43 | ||||||||||||||
Outstanding, September 30, 2014 | 6,707,990 | $ | 0.67 | 5.78 | $ | 56,830 | |||||||||||
Vested and exercisable, September 30, 2014 | 5,918,043 | $ | 0.65 | 5.41 | $ | 56,830 |
7_STOCKHOLDERS_DEFICIT_Tables
7. STOCKHOLDERS' DEFICIT (Tables) | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
Equity [Abstract] | ' | ||||
Outstanding warrants | ' | ||||
Warrants | Exercise Price | Expiration Date | |||
(Underlying Shares) | |||||
3,590,522 | -1 | $0.80 per share | 1-Mar-15 | ||
6,790 | -2 | $1.01 per share | 10-Sep-15 | ||
439,883 | -3 | $0.68 per share | 31-Mar-16 | ||
285,186 | -4 | $1.05 per share | 20-Nov-16 | ||
1,858,089 | -5 | $1.08 per share | 23-May-18 | ||
8,292,297 | -6 | $0.24 per share | 23-May-18 | ||
200,000 | -7 | $0.50 per share | 23-Apr-19 | ||
561,798 | -7 | $0.45 per share | 22-May-19 | ||
184,211 | -8 | $0.38 per share | 9-Sep-19 | ||
325,521 | -9 | $0.46 per share | 17-Sep-19 | ||
2_SIGNIFICANT_ACCOUNTING_POLIC3
2. SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Accounting Policies [Abstract] | ' | ' |
Raw materials | $1,089 | $1,013 |
Work in process | 143 | 268 |
Finished goods | 96 | 96 |
Inventory reserve | -124 | -184 |
Total | $1,204 | $1,193 |
3_FAIR_VALUE_OF_FINANCIAL_INST2
3. FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Warrants 1 | ($1,247) | ($1,548) |
Level 1 | ' | ' |
Warrants 1 | 0 | 0 |
Level 2 | ' | ' |
Warrants 1 | 0 | 0 |
Level 3 | ' | ' |
Warrants 1 | ($1,247) | ($1,548) |
4_STOCK_OPTIONS_Details_Narrat
4. STOCK OPTIONS (Details Narrative) (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Notes to Financial Statements | ' | ' |
Stock based compensation | $272 | $559 |
Unrecognized compensation cost | $622 | ' |
4_STOCK_OPTIONS_Details
4. STOCK OPTIONS (Details) (USD $) | 9 Months Ended |
Sep. 30, 2014 | |
Equity [Abstract] | ' |
Outstanding beginning balance, Shares | 6,531,192 |
Granted, Shares | 496,761 |
Exercised, Shares | -319,963 |
Expired, Shares | 0 |
Outstanding ending balance, Shares | 6,707,990 |
Vested and exercisable ending balance | 5,918,043 |
Outstanding beginning balance, Weighted average exercise price | $0.66 |
Granted, Weighted average exercise price | $0.50 |
Exercised, Weighted average exercise price | $0.43 |
Expired, Weighted average exercise price | $0.67 |
Outstanding ending balance, Weighted average exercise price | $0.66 |
Vested and exercisable ending balance | $0.65 |
Weighted Average Remaining Contractual Life (in years) Outstanding | '6 years 11 months 19 days |
Weighted Average Remaining Contractual Life (in years) Exercisable | '5 years 4 months 28 days |
Aggregate Intrinsic Value Outstanding, Beginning | $625,412 |
Aggregate Intrinsic Value Granted | $0 |
Aggregate Intrinsic Value Exercised | 0 |
Aggregate Intrinsic Value Forfeited/canceled | $0 |
Aggregate Intrinsic Value Outstanding, Ending | 56,830 |
Aggregate Intrinsic Value Exercisable | $56,830 |
6_STOCKHOLDERS_DEFICIT_Details
6. STOCKHOLDERS' DEFICIT (Details ) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Mar. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 |
Warrant1Member | Warrant 2 [Member] | Warrant 3 [Member] | Warrant 4 [Member] | Warrant 4 [Member] | Warrant 5 [Member] | Warrant 6 [Member] | Warrant 7 [Member] | Warrant 8 [Member] | Warrant 9 [Member] | Warrant 10 [Member] | |||
Warrants outstanding | 6,707,990 | 6,531,192 | 3,590,522 | 6,790 | 439,883 | ' | 285,186 | 1,858,089 | 8,292,297 | 200,000 | 561,798 | 184,211 | 325,521 |
Warrants exercise price | $0.66 | $0.66 | $0.80 | $1.01 | $0.68 | ' | $1.05 | $1.08 | $0.24 | $0.50 | $0.45 | $0.38 | $0.46 |
Expiration date | ' | ' | 1-Mar-15 | 10-Sep-15 | 31-Mar-16 | 20-Nov-16 | ' | 23-May-18 | 23-May-18 | 23-Apr-19 | 22-May-19 | 9-Sep-19 | 17-Sep-19 |
9_NOTES_PAYABLE_Details_Narrat
9. NOTES PAYABLE (Details Narrative) (USD $) | Sep. 30, 2014 |
In Thousands, unless otherwise specified | |
Debt Disclosure [Abstract] | ' |
Notes payble | $564 |
Interest rate, min | 5.00% |
Interest rate, max | 10.00% |