Veriteq (DIGA) 10-Q12 Jan 162015 Q2 Quarterly reportFinancial data

Company Profile

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
Document and Entity Information - shares	Jun. 30, 2015	Dec. 30, 2015
Document and Entity Information [Abstract]
Entity Registrant Name	VERITEQ
Entity Central Index Key	924,642
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Type	10-Q
Document Period End Date	Jun. 30, 2015
Document Fiscal Year Focus	2,015
Document Fiscal Period Focus	Q2
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		250,723,718

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Current assets:
Cash	$ 2	$ 77
Restricted cash	12	12
Accounts receivable	$ 66	11
Inventory		2
Other current assets	$ 33	84
Total current assets	113	186
Property and equipment, net	28	35
Other assets	54	54
Intangible assets, net	1,000	1,470
Total assets	1,195	1,745
Current liabilities:
Accounts payable	1,277	1,141
Accrued expenses (including $948 and $1,171 to related parties)	2,635	2,511
Notes payable, current portion, net of discounts (including $940 and $152 to related parties)	3,828	2,480
Liabilities for conversion options of convertible notes	2,286	930
Subordinated debt with an embedded conversion option, at fair value	317	316
Total current liabilities	$ 10,343	$ 7,378
Commitments and contingencies (note 10)
Notes payable, net of discount		$ 286
Warrant liabilities at fair value	$ 2,062	534
Estimated royalty obligations	440	440
Total liabilities	$ 12,845	$ 8,638
Stockholders' deficit:
Preferred stock
Common stock ($0.00001 par value; 100 billion shares authorized; 446 and * shares issued and outstanding)
Additional paid-in capital	$ 15,852	$ 15,000
Accumulated deficit	(29,343)	(23,734)
Total stockholders' deficit	(13,491)	(8,734)
Total liabilities and stockholders' deficit	1,195	1,745
Series D Preferred Stock [Member]
Stockholders' deficit:
Preferred stock	$ 1,841	$ 1,841

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Related parties accrued expenses	$ 948	$ 1,171
Notes payable, net of discounts to related parties	$ 940	$ 152
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.00001	$ 0.00001
Common stock, shares authorized	100,000,000,000	100,000,000,000
Common stock, shares issued	446,000		[1]
Common stock, shares, outstanding	446,000		[1]
Series D Preferred Stock [Member]
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares outstanding	1,841	1,841

[1]	At December 31, 2014 the Company had 30 shares (unrounded) outstanding after giving retroactive effect to the reverse splits of 1:1,000 on February 11, 2015 and 1:10,000 on July 29, 2015

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Income Statement [Abstract]
Sales	$ 188	$ 21	$ 283	$ 95
Cost of goods sold, exclusive of depreciation and amortization shown separately below	84	8	121	46
Gross profit	104	13	162	49
Operating Expenses:
Selling, general and administrative expenses	849	1,163	1,848	2,469
Development expenses	51	$ 75	104	$ 139
Asset impairment charge	380		380
Depreciation and amortization expense	46	$ 149	93	$ 298
Total operating expenses	1,326	1,387	2,425	2,906
Operating loss	(1,222)	(1,374)	(2,263)	(2,857)
Other (expenses) income
Interest expense	(356)	(1,131)	(690)	(1,592)
Change in fair value of derivative and other fair valued instruments, net	(3,228)	(3,047)	(2,662)	3,578
Other income (expense)	6	(6)	6	(62)
Total other income	(3,578)	(4,184)	(3,346)	1,924
Loss before income taxes	$ (4,800)	$ (5,558)	$ (5,609)	$ (933)
Income tax benefit
Net loss	$ (4,800)	$ (5,558)	$ (5,609)	$ (933)
Net loss per common share - basic and diluted	$ (22.87)	$ (4,001,787)	$ (53.61)	$ (793,652)
Weighted average common shares outstanding - Basic and diluted	210	0.0014	105	0.0012

Condensed Consolidated Stateme5

Condensed Consolidated Statement of Changes in Stockholders' Deficit (Unaudited) - 6 months ended Jun. 30, 2015 - USD ($) shares in Thousands, $ in Thousands	Total	Preferred Stock	Common Stock		Additional Paid-in Capital	Accumulated Deficit
Beginnning balance at Dec. 31, 2014	$ (8,734)				$ 15,000	$ (23,734)
Beginnning balance, shares at Dec. 31, 2014				[1]
Net loss	$ (5,609)					$ (5,609)
Issuance of common stock for partial conversion of notes payable and accrued interest	637				$ 637
Issuance of common stock for partial conversion of notes payable and accrued interest, shares			308
Sale of common stock to related parties	20				20
Sale of common stock to related parties, Shares			1
Settlement of liabilities with related party	32				32
Settlement of liabilities with related party, Shares			11
Issuance of common stock for cashless exercise of warrants	11				11
Issuance of common stock for cashless exercise of warrants, shares			126
Reclassification of conversion option liabilities upon conversion of notes payable	152				152
Ending balance at Jun. 30, 2015	$ (13,491)				$ 15,852	$ (29,343)
Ending balance, shares at Jun. 30, 2015			446

[1]	At December 31, 2014 the Company had 30 shares (unrounded) outstanding after giving retroactive effect to the reverse splits of 1:1,000 on February 11, 2015 and 1:10,000 on July 29, 2015

Condensed Consolidated Stateme6

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Cash flows from operating activities:
Net loss	$ (5,609)	$ (933)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation		354
Deprecation and amortization	$ 93	298
Amortization of debt discount and deferred financing fees	561	$ 1,568
Asset impairment charge	380
Change in fair value of subordinated convertible debt	1	$ (2,788)
Change in fair value of conversion options embedded in convertible notes	1,122	(3,628)
Change in fair value of warrants	1,539	$ 2,838
Gain on extinguishment of debt	(9)
Loss on disposal of fixed assets	$ 4
Loss on settlement of other receivable		$ 56
Increase (decrease) in cash attributable to changes in operating assets and liabilities:
Accounts payable and accrued expenses	$ 1,219	978
Other receivable		115
Other current assets	$ 14	$ 23
Accounts receivable	$ (55)
Other assets		$ (55)
Net cash used in operating activities	$ (740)	(1,174)
Cash flows from investing activities:
Purchases of property and equipment	(1)	(1)
Net cash used in investing activities	(1)	(1)
Cash flows from financing activities:
Proceeds from the issuance of convertible notes payable and warrants	654	635
Proceeds from the issuance of related party notes and advances	128	235
Repayment of convertible notes	(29)	(400)
Repayment of related party notes and advances	(107)	$ (33)
Proceeds from the issuance of common stock to related parties	$ 20
Decrease in restricted cash		$ 835
Net cash provided by financing activities	$ 666	1,272
Net (decrease) increase in cash	(75)	97
Cash and cash equivalents - beginning of year	77	13
Cash and cash equivalents - end of year	$ 2	$ 110

Organization, Basis of Presenta

Organization, Basis of Presentation and Summary of Selected Significant Accounting Policies	6 Months Ended
	Jun. 30, 2015
Organization, Basis of Presentation and Summary of Selected Significant Accounting Policies [Abstract]
ORGANIZATION, BASIS OF PRESENTATION AND SUMMARY OF SELECTED SIGNIFICANT ACCOUNTING POLICIES	1. ORGANIZATION, BASIS OF PRESENTATION AND SUMMARY OF SELECTED SIGNIFICANT ACCOUNTING POLICIES Organization and Basis of Presentation These unaudited condensed consolidated financial statements and notes thereto include the financial statements of VeriTeQ Corporation (“VC”), a Delaware corporation, and its wholly-owned subsidiary, VeriTeQ Acquisition Corporation (“VAC”), a Florida corporation. VC, VAC and VAC’s inactive VTQ IP Holding Corporation and PositiveID Animal Health Corporation subsidiaries are referred to together as “VeriTeQ” or “the Company.” The Company’s business was comprised of ongoing efforts to provide implantable medical device identification. The accompanying unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014. These condensed consolidated interim financial statements have been prepared in accordance the instructions to Form 10-Q and Article 8 of Regulation S-X of the U.S. Securities and Exchange Commission (the “SEC”) and therefore omit or condense certain footnotes and other information normally included in consolidated interim financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). All intercompany balances and transactions have been eliminated in consolidation. In the opinion of the Company’s management, all adjustments (consisting of normal recurring adjustments) considered necessary for the fair presentation of the condensed consolidated interim financial statements have been made. Results of operations reported for interim periods may not be indicative of the results for the entire year. During the three and six months ended June 30, 2015 and 2014, comprehensive loss was equal to the net loss amounts presented for the respective periods in the accompanying condensed consolidated interim statements of operations. In addition, certain prior year balances have been reclassified to conform to the current presentation. Specifically, the Change in fair value of convertible debt with embedded option feature, Change in fair value of conversion option of the convertible notes and Change in fair value of warrant liabilities for the three and six months ended June 30, 2014, which had been reflected as separate line items in the consolidated statements of operations, are now reflected in Change in fair value of derivative and other fair valued instruments in the accompanying consolidated statements of operations. Going Concern The accompanying financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and the settlement of liabilities in the normal course of business. The Company has incurred significant operating losses since its inception on December 14, 2011 and had a working capital deficit and accumulated deficit at June 30, 2015 of $10.2 million and $29.3 million, respectively. The Company’s cash position is critically deficient, and payments essential to the Company’s ability to operate are not being made in the ordinary course. Failure to raise capital in the coming days to fund the Company’s operations and failure to generate positive cash flow to fund such operations in the future will have a material adverse effect on the Company’s financial condition. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments to the classification of recorded asset amounts or the amounts and classification of liabilities that might result from this uncertainty. The auditor’s report on the Company’s financial statements for the years ended December 31, 2014 and 2013 expressed substantial doubt about the Company’s ability to continue as a going concern. The Company needs to raise additional funds immediately and continue to raise funds until it begins to generate sufficient cash from operations, and it may not be able to obtain the necessary financing on acceptable terms, or at all. During the six months ended June 30, 2015, the Company raised approximately $0.8 million from the sale of convertible promissory notes (see note 4). On October 19, 2015, the Company received a default notice from its senior lender demanding repayment of approximately $2.1 million of indebtedness, secured by substantially all of the Company’s assets, which the Company was unable to repay. The Company also received a Notice of Disposition of Collateral advising the Company that the senior lender, acting as collateral agent, intended to sell the assets at auction. On November 4, 2015, the Company’s assets were sold at auction for the sum of $1 million, which was credited against the Company’s outstanding senior debt (see note 12). As of the date of this report, the Company has ceased its business operations related to implantable medical device identification. Reverse Stock Splits and Change in Par Value of Common Stock On December 18, 2014, an amendment to the Company’s Amended and Restated Certificate of Incorporation to effect a reverse split of all of the outstanding shares of the Company’s common stock at a ratio of 1 for 1,000 was approved by the Company’s Stockholders. The Certificate of Amendment became effective on February 11, 2015, and at that time each 1,000 shares of outstanding common stock of the Company was combined and automatically converted into one share of the Company’s common stock, with a par value of $0.00001 per share (the “February 2015 Reverse Stock Split”). In addition, the conversion and exercise prices of all of the Company’s outstanding preferred stock, common stock purchase warrants, stock options and convertible notes payable were proportionately adjusted at the 1:1,000 reverse split ratio consistent with the terms of such instruments. No fractional shares were issued as a result of the February 2015 Reverse Stock Split, and shareholders received a cash payment in lieu of such fractional shares that they would otherwise be entitled. Also on December 18, 2014, the Company’s stockholders approved an amendment to the Company’s Amended and Restated Certificate of Incorporation to (i) reduce the par value of the Company’s common stock from $0.01 per share to $0.00001 per share; and (ii) increase the number of shares of common stock that the Company is authorized to issue from 500 million to 10 billion. This amendment became effective on December 18, 2014. On July 29, 2015, another amendment to the Company’s Amended and Restated Certificate of Incorporation became effective to implement a 1-for-10,000 reverse stock split (the “July 2015 Reverse Stock Split”) of the Company’s common stock. As a result, each 10,000 shares of the Company’s issued and outstanding common stock automatically, and without any action on the part of the respective holders, were combined and converted into one issued and outstanding share of common stock. The July 2015 Reverse Stock Split resulted in a reduction in the number of issued and outstanding shares of the Company’s common stock from approximately 4.4 billion to approximately 446,000. The July 2015 Reverse Stock Split affected all issued and outstanding shares of the Company's common stock, as well as all common stock underlying convertible notes, warrants, convertible preferred stock and stock options outstanding immediately prior to the July 2015 Reverse Stock Split. The amendment also increased the number of shares of common stock that the Company is authorized to issue from 10 billion to 100 billion. The Amendment was approved by the Company’s Board of Directors and ratified by the Company’s stockholders on May 26, 2015. All share, per share and capital stock amounts as of June 30, 2015 and December 31, 2014, and for the three and six months ended June 30, 2015 and 2014 have been retroactively restated to give effect to the July 2015 Reverse Stock Split, the February 2015 Reverse Stock Split and the change in the par value of the Company’s common stock. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP 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 consolidated financial statements and the reported amounts of revenues and expenses during the year. Actual results could be affected by those estimates. Included in these estimates are assumptions used in determining the lives and valuation of long-lived assets, in valuation models used in estimating the fair value of certain promissory notes, warrants, embedded conversion options, stock-based compensation and in determining valuation allowances for deferred tax assets. Inventory Inventory consisted of purchased finished goods at June 30, 2015 and December 31, 2014. Inventory is valued at the lower of the value using the first-in, first-out (“FIFO”) cost method, or market. Property and Equipment Property and equipment consists primarily of machinery and computer equipment and is stated at cost less accumulated depreciation. Depreciation expense is computed using the straight-line method over the estimated useful life of the related assets, generally ranging from 3 to 10 years. Depreciation expense for the three and six months ended June 30, 2015 was approximately $2,000 and $4,000, respectively. Depreciation for the three and six months ended June 30, 2014 was less than $1,000. Intangible Assets The Company’s intangible assets (see note 2) are amortized on a straight-line basis over their expected economic lives ranging from 7 to 14 years. The lives were determined based upon the expected use of the asset, the ability to extend or renew patents, trademarks and other contractual provisions associated with the asset, the stability of the industry, expected changes in and replacement value of distribution networks and other factors deemed appropriate. The Company reviews its intangible assets and other long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable. If an impairment indicator is present, the Company evaluates recoverability by a comparison of the carrying amount of the assets to future undiscounted net cash flows expected to be generated by the assets. If the carrying value of the asset exceeds the projected undiscounted cash flows, the Company is required to estimate the fair value of the asset and recognize an impairment charge to the extent that the carrying value of the asset exceeds its estimated fair value. The Company recorded an impairment charge of $0.4 million for the three and six months ended June 30, 2015 and did not record any impairment charges during the three and six months ended June 30, 2014. Revenue Recognition Product revenue is recognized at the time product is shipped and title has transferred, provided that a purchase order has been received or a contract has been executed, there are no uncertainties regarding customer acceptance, the sales price is fixed and determinable and collectability is deemed probable. Cost of products sold is recorded as the related revenue is recognized. Income Taxes The Company recognizes deferred tax liabilities and assets based on the temporary differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates in effect for the year in which the differences are expected to affect taxable income. Temporary differences between taxable income reported for financial reporting purposes and income tax purposes consist primarily of timing differences such as amortization of intangible assets, deferred officers' compensation and stock-based compensation. A valuation allowance is provided against net deferred tax assets when the Company determines it is more likely than not that it will fail to generate sufficient taxable income to be able to realize the deferred tax assets. In accordance with U.S. GAAP, the Company is required to determine whether a tax position of the Company is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The tax benefit to be recognized is measured as the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. Derecognition of a tax benefit previously recognized could result in the Company recording a tax liability that would reduce net assets. Based on its analysis, the Company has determined that it has not incurred any liability for unrecognized tax benefits as of June 30, 2015 and December 31, 2014. Concentration All of the Company’s revenue and accounts receivable are from a single customer, Establishment Labs, SA. Loss per Common Share and Common Share Equivalent Basic loss per share excludes dilution and is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted loss per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the income of the Company. The following securities were excluded in the computation of dilutive loss per share for the six months ended June 30, 2015 and 2014 because their inclusion would have been anti-dilutive: 2015 2014 Stock options - - Warrants 4,704,464 1 Shares issuable upon conversion of preferred stock 1,841,000 - Shares issuable upon conversion of convertible notes payable 7,345,527 1 13,890,991 2 Impact of Recently Issued Accounting Standards From time to time, the Financial Accounting Standards Board (the “FASB”) or other standards setting bodies will issue new accounting pronouncements. Updates to the FASB Accounting Standards Codification (“ASC”) are communicated through issuance of an Accounting Standards Update (“ASU”). In April of 2015, the FASB issued ASU No. 2015-03, Interest – Imputation of Interest (Subtopic 835-30);Simplifying the Presentation of Debt Issuance Costs In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU 2014-15”) In May 2014, the FASB issued Accounting Standards Update No. 2014-09, “ Revenue from Contracts with Customers (Topic 606),

Intangible Assets

Intangible Assets	6 Months Ended
Intangible Assets	Jun. 30, 2015
Intangible Assets [Abstract]
INTANGIBLE ASSETS	2. INTANGIBLE ASSETS Intangible assets consist of the following: June 30, 2015 December 31, 2014 Gross Carrying Accumulated Gross Carrying Accumulated ($000's) Amount Amortization Total Amount Amortization Total Proprietary Technology $ 1,372 $ (372 ) $ 1,000 $ 1,500 $ (318 ) $ 1,182 Customer relationship 248 (248 ) - 500 (212 ) 288 $ 1,620 $ (620 ) $ 1,000 $ 2,000 $ (530 ) $ 1,470 As of June 30, 2015, the Company determined that its customer relationship intangible asset was fully impaired, and that the fair value of its proprietary technology was $1.0 million (see note 12). As a result, the Company recognized impairment charges aggregating to $0.4 million to write these assets down to their fair values. Amortization of intangibles charged against income amounted to $44,000 and $0.1 million for the three-months ended June 30, 2015 and 2014, respectively, and $0.1 million and $0.3 million for the six months ended June 30, 2015 and 2014, respectively.

Accrued Expenses

Accrued Expenses	6 Months Ended
Accrued Expenses	Jun. 30, 2015
Accrued Expenses [Abstract]
ACCRUED EXPENSES	3. ACCRUED EXPENSES The following table summarizes the significant components of accrued expenses: June 30, 2015 December 31, 2014 (in thousands) Accrued payroll and payroll related (including $842 and $1,060 to related parties) $ 1,202 $ 1,204 Accrued legal 488 477 Accrued other expenses (including $106 and $111 to related parties) 945 830 Total accrued expenses $ 2,635 $ 2,511 During the six months ended June 30, 2015, the Company entered into separate agreements with Scott Silverman, the Company’s Chief Executive Officer, Randolph Geissler, the Company’s President, Michael Krawitz, the Company’s Chief Legal and Financial Officer and one other executive officer, (collectively, the “Executive Officers”) whereby each Executive Officer agreed that certain amounts of accrued but unpaid compensation that each individual was entitled to receive (aggregating approximately $914,000) would be paid in the form of a convertible promissory note (the “Officer Notes”). In connection with these agreements, the Company issued Officer Notes to Messrs. Silverman, Geissler, Krawitz and the other executive officer in the principal amount of $194,010, $285,000, $384,509 and $50,000, respectively.

Notes Payable

Notes Payable	6 Months Ended
Notes Payable	Jun. 30, 2015
Notes Payable and Subordinated Debt Reported at Fair Value [Abstract]
NOTES PAYABLE	4. NOTES PAYABLE Notes payable at June 30, 2015 and December 31, 2014 consist of the following: June 30, December 31, 2014 (in thousands) Convertible notes payable with a bifurcated conversion option 3,039 2,943 Related party and Officer notes 1,066 169 Other notes payable 176 185 Discount on notes payable (453 ) (531 ) 3,828 2,766 Less current portion (3,828 ) (2,480 ) Non-current notes payable - 286 Convertible Notes with a Bifurcated Conversion Option During the six months ended June 30, 2015, the Company issued convertible promissory notes in the aggregate principal amount of $711,550, and received net proceeds of $653,598. These notes are generally due one year after the date of issuance, bear interest at rates of 1% to 12% per annum, and are convertible into shares of common stock at 57% to 61% of the market price of the Company’s common stock based on the low end of the trading range of the common stock during the 10 to 30 days prior to conversion, depending on the specific note being converted. With respect to the foregoing notes, in the event the Company were to issue or sell, or is deemed to have issued or sold, any shares of common stock for a consideration per share (the “New Issuance Price”) that is less than the conversion price in effect immediately prior to such issue or sale or deemed issuance or sale (a “Dilutive Issuance”), then, immediately after such Dilutive Issuance, the conversion price then in effect is reduced to an amount equal to the New Issuance Price. In connection with the issuance of one of the foregoing notes, the Company issued a warrant to purchase 50 shares of the Company’s common stock at an exercise price of $210 per share, subject to adjustment for stock splits, stock dividends and stock combinations (the “March 2015 Warrant”). The March 2015 Warrant is exercisable at any time until three years after the date of issuance. The terms of the warrant provides for a proportional downward adjustment of the exercise price in the event that the Company issues or sells, or is deemed to have issued or sold, shares of common stock at an issuance price that is less than the market price of the common stock at the time of issuance, as defined in the warrant agreement. The Company determined that the fair value of the March 2015 Warrant was de minimus at the date of issuance and at June 30, 2015. During the six months ending June 30, 2015, $576,797 of previously issued convertible notes, along with $10,375 of accrued interest, were converted into 281,908 shares of the Company’s common stock, and $28,800 of convertible notes were repaid in accordance with their terms. In connection with the notes converted, $152,000 of the bifurcated option liability was reclassified into additional paid-in capital. Also during the six months ending June 30, 2015, the Company entered into a settlement agreement with one of its convertible noteholders which reduced the outstanding principal balance on their notes by $9,375, which was recorded as a gain on the settlement of debt and is reflected in other income in the accompanying consolidated statements of operations for the three and six months ended June 30, 2015. At June 30, 2015, the outstanding balance on these convertible notes was $3,039,970. The Company’s failure to timely file its Quarterly Report on Form 10-Q for the period ending June 30, 2015 with SEC, as well as its failure to repay approximately $1.6 million of convertible notes that had reached their maturity date, constitute events of default under the terms of the convertible notes. As more fully described in note 12, on October 19, 2015, the Company received a default notice from its senior lender, acting in its capacity as collateral agent representing approximately $2.2 million of senior convertible notes with first priority security interests on the Company’s assets, demanding repayment of these notes. The Company did not have the financial resources to repay this indebtedness. In conjunction with the default notice, the Company received a Notification of Disposition of Collateral, advising the Company that the senior lender intended to sell, lease or license the assets securing the senior convertible notes at a public auction. The auction took place on November 4, 2015 and the senior lender received proceeds of $1.0 million, which was credited against the Company’s outstanding balance of convertible notes. The remaining outstanding convertible notes currently accrue default interest at rates ranging from of 18% to 22% per annum, and the holders of the notes retain their right to convert the outstanding principal plus accrued and unpaid interest into shares of the Company’s common stock in accordance with the terms of the notes. Related Party Notes Payable On January 23, 2015, the Company borrowed $45,000 from Scott Silverman, as evidenced by a promissory note (the “2015 Silverman Note”). The 2015 Silverman Note was payable on demand, and bearing interest at a rate of 5% per annum. Between January 30, 2015 and June 30, 2015, the 2015 Silverman Note was repaid in its entirety, and Mr. Silverman agreed to forgo receiving interest on the note. During the six months ending June 30, 2015, the Company also received $21,100 of short-term advances from Mr. Silverman, net of repayments, which remain outstanding as of June 30, 2015. These short-term advances do not bear interest and are repayable to Mr. Silverman on demand. As discussed in note 3, during the six months ended June 30, 2015, four of the Company’s executive officers entered into agreements with the Company whereby certain amounts of accrued but unpaid compensation that each individual was entitled to receive would be paid in the form of Officer Notes, and the Company issued an aggregate of $913,519 of Officer Notes in satisfaction of the accrued liabilities. In addition, Mr. Geissler and Mr. Krawitz agreed to have their previously issued and outstanding demand notes due from the Company, in the principal amounts of $34,000 and $60,000, respectively, converted into separate Officer Notes. The Officer Notes bear interest at a rate of 5% per annum, with principal and interest due on March 1, 2016. The Company has the option to prepay the Officer Notes, in whole or in part, and without premium or penalty, at any time upon 5 business days’ written notice to the holder. At any time after September 1, 2015, the holder of an Officer Note can convert all or part of the note into shares of the Company’s common stock at a conversion price equal to the average daily closing price of the Company’s common stock for the 10 days prior to conversion. On April 16, 2014 and May 1, 2014, the Company issued promissory notes to Ned L. Siegel in the principal amount of $30,000 and $20,000, respectively (collectively, the “Siegel Notes”), with interest accruing at a rate of 9% per annum and with principal and interest due on these notes one year after their date of issuance. Mr. Siegel was appointed a director of the Company on June 17, 2014, and resigned from the Company’s board of directors on January 28, 2015. On February 27, 2015, the Siegel Notes were amended to (i) extend the maturity date to March 1, 2016, and (ii) reduce the per share conversion price from $350 to 60% of the average of the three lowest closing prices of the Company’s common stock for the 10 trading days prior to conversion. During the six months ending June 30, 2015, $37,924 of related party notes, along with $1,483 of accrued interest, were converted into 26,720 shares of common stock. As of June 30, 2015 there were $1,065,695 of related party notes outstanding. Other Notes Payable Other notes payable as of December 31, 2014 consisted of a note payable to PositiveID Corporation (“PSID”) in the principal amount of approximately $115,000 (the “PSID Note”) which is to be repaid through the issuance of a de minimus number of shares of the Company’s stock, and other promissory notes with an aggregate principal amount of $70,625 that are generally convertible into shares of the Company’s common stock at the option of the holder at a conversion price of $350 per share. For some of these notes, the Company may, at its sole option, elect to convert the note into common stock at a conversion price that is equal to 60% of the market price of the Company’s common stock, as defined in the notes. During the six months ended June 30, 2015, $9,400 of these notes, plus $1,537 of accrued interest, was converted into 10 shares of the Company’s common stock. At June 30, 2015, the total of all of the Company’s outstanding promissory notes was convertible into an aggregate of 7,345,527 shares of the Company’s common stock. During the six months ended June 30, 2015 and 2014, the Company recognized interest expense of approximately $0.7 million and $1.6 million, respectively, which is primarily related to the amortization of debt discounts.

Subordinated Debt Reported at F

Subordinated Debt Reported at Fair Value	6 Months Ended
Subordinated Debt Reported at Fair Value	Jun. 30, 2015
Notes Payable and Subordinated Debt Reported at Fair Value [Abstract]
SUBORDINATED DEBT REPORTED AT FAIR VALUE	5. SUBORDINATED DEBT REPORTED AT FAIR VALUE In December 2012, VAC entered into an asset purchase agreement and royalty agreement with SNC Holding Corp. wherein VAC acquired various technology and trademarks related to its radiation dose measurement technology. Under the terms of the agreements, VAC issued a non-interest bearing secured subordinated convertible promissory note in the principal amount of $3.3 million (the “SNC Note”). The SNC Note is convertible into one-third of the beneficial common stock ownership of VC held by Scott Silverman, though Mr. Silverman has no beneficial common stock ownership as of June 30, 2015 and December 31, 2014 as a result of the February 2015 Reverse Stock Split and the July 2015 Reverse Stock Split. The SNC Note was amended in July 2013 to extend the maturity date to June 2015. The SNC Note has not been repaid. The Company made an irrevocable election at the time of issuance to report the note at fair value, with changes in fair value recorded through the Company’s statement of operations as Other expense/income in each accounting period. At June 30, 2015 and December 31, 2014, the fair value of the SNC Note was $0.3 million (see notes 6 and 12 for further information).

Financial Instruments and Fair

Financial Instruments and Fair Value Measurements	6 Months Ended
Financial Instruments and Fair Value Measurements	Jun. 30, 2015
Financial Instruments and Fair Value Measurements [Abstract]
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS	6. FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities that are required to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as inherent risk, transfer restrictions and credit risk. The Company applies the following fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: Level 1 – Quoted prices in active markets for identical assets or liabilities. Level 2 – Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 – Inputs that are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. As of June 30, 2015, the SNC Note (which the Company elected to be accounted for at fair value), the bifurcated embedded option in other convertible notes and the warrant liabilities were valued using Level 3 inputs. The changes in fair value of the SNC Note, the bifurcated embedded option in the convertible notes and the warrant liability during the three and six months ended June 30, 2015 and 2014 are reflected in the changes in fair value of derivative instruments in the Company’s consolidated statement of operations. As of June 30, 2015, non-financial assets measured at fair value were the intangible asset value of $1.0 million, based on a level 1 input (see note 12). The following table summarizes our financial assets and liabilities measured at fair value as presented in the consolidated balance sheets as of June 30, 2015 and December 31, 2014 (in thousands): June 30, 2015 December 31, 2014 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Liabilities: SNC Note $ — $ — $ 317 $ — $ — $ 316 Bifurcated option in convertible notes $ — $ — $ 2,286 $ — $ — $ 930 Warrant liabilities $ — $ — $ 2,062 $ — $ — $ 534 The following is a summary of activity of Level 3 liabilities for the six months ended June 30, 2015: SNC Note Bifurcated embedded option in convertible notes Warrant liabilities Balance at December 31, 2014 $ 316 $ 930 $ 534 Issuance of additional debt 386 Conversion of notes and exercise of warrants into shares of common stock (152 ) (11 ) Losses (gains) included in net loss 1 1,122 1,539 Balance at June 30, 2015 $ 317 $ 2,286 $ 2,062

Stockholders' Deficit

Stockholders' Deficit	6 Months Ended
Stockholders' Deficit	Jun. 30, 2015
Stockholders' Deficit [Abstract]
STOCKHOLDERS' DEFICIT	7. STOCKHOLDERS’ DEFICIT Preferred Stock As of June 30, 2015, the Company has authorized 5 million shares of preferred stock, par value $0.01 per share with 1,841 shares of Series D Convertible Preferred Stock (the “Series D Preferred Stock”) outstanding, of which 1,400 shares are held by Scott Silverman and 441 shares are held by Randolph Geissler. The stated value of the Series D Preferred Stock is reflected as temporary equity in the Company’s consolidated balance sheet, due to the possibility that under certain conditions the Series D Preferred Stock could be required to be settled in cash. On March 13, 2015, the Company’s Board of Directors approved an amendment to the Certificate of Designation for the Series D Preferred Stock to change the price for which the Series D Preferred Stock can be converted into common stock of the Company to the average closing price of the common stock over any 5 consecutive Trading Days occurring between March 12, 2015 and the conversion date, with the five-day period being elected by the holder of the Series D Preferred Stock in the conversion notice. Common Stock As previously discussed in note 1, the February 2015 Reverse Stock Split became effective on February 11, 2015, and the July 2015 Reverse Stock Split became effective on July 29, 2015. All share, per share and capital stock amounts have been retroactively restated as of June 30, 2015 and December 31, 2014, and for the three and six months ended June 30, 2015 and 2014 to give effect to the reverse stock splits. As a result of the July Reverse Stock Split, the Company no longer has any stock options or warrants treated as equity instruments outstanding as of June 30, 2015. On April 20, 2015, the Company sold 526 shares of its common stock to a director of the Company for a purchase price of $10,000. The purchase price was based on the closing price of the Company’s common stock on April 19, 2015. On April 22, 2015, the Company sold 666 shares of its common stock to Mr. Silverman for $10,000. The purchase price was based on the closing price of the Company’s common stock on April 21, 2015. On May 12, 2015, a director of the Company converted outstanding amounts owed to him in the amount of $32,101, into 10,700 shares of common stock. The number of shares issued was based on the closing price of the Company’s common stock on May 11, 2015. As of June 30, 2015, the Company had 100 billion shares of common stock authorized (based on the July 2015 amended certificate of incorporation increasing the number of authorized shares) and 446,312 shares were issued and outstanding. Warrants Treated as Liabilities On November 13, 2013 in connection with the issuance of senior convertible notes and an amendment to certain agreements between the Company and PSID, the Company issued warrants to purchase up to 2,944,444 shares of the Company’s common stock on a pre-split basis (the “November 2013 Warrants”). The November 2013 Warrants became exercisable at issuance and entitle the Investors to purchase shares of the Company’s common stock for a period of five years at an initial exercise price (prior to giving effect to the reverse split) of $2.84 per share, contain a cashless exercise provision and a full ratchet price protection provision on the exercise price. As of June 30, 2015, after consideration of both reverse stock splits and based on the aggregate exercise price of $2,822,648, if all of the remaining November 2013 Warrants had been exercised the number of shares of the Company’s common stock that would have been issued would have been 4,704,414 shares based on an exercise price of $0.60 per share, subject to adjustment for the cashless exercise provisions. During the six months ended June 30, 2015, the Company issued 125,817 shares of common stock for November 2013 Warrants exercised on a cashless basis and approximately $11,000 of warrant liabilities were reclassified to additional paid in capital. During the six months ended June 30, 2015, the Company issued the March 2015 Warrant (see note 4). The March 2015 Warrant is exercisable at any time until three years after the date of issuance. The terms of the warrant provides for a proportional downward adjustment of the exercise price in the event that the Company issues or sells, or is deemed to have issued or sold, shares of common stock at an issuance price that is less than the market price of the common stock at the time of issuance, as defined in the warrant agreement. The Company determined that the fair value of the March 2015 Warrant was de minimus at the time of issuance and at June 30, 2015. The terms of the March 2015 Warrant and the November 2013 Warrants are such that they do not qualify for equity treatment under ASC 815 and are classified as liabilities at June 30, 2015 and December 31, 2014. The carrying amount of the warrant liabilities approximate management’s estimate of their fair value (see note 6) and were determined to be $2.1 million and $0.5 million at June 30, 2015 and December 31, 2014, respectively. The Company recognized a loss on the change in fair value of the Company’s warrant liabilities for the three months ended June 30, 2015 and 2014 of $1.8 million and $6.0 million, respectively. The Company recognized a loss on the change in fair value of the warrant liabilities of $1.5 million and $2.8 for the six months ended June 30, 2015 and 2014, respectively.

Income Taxes

Income Taxes	6 Months Ended
Income Taxes	Jun. 30, 2015
Income Taxes [Abstract]
INCOME TAXES	8. INCOME TAXES The Company did not record an income tax provision or benefit for the three and six months ended June 30, 2015 and 2014. The Company has incurred losses since its inception and has provided a valuation allowance against its net operating loss carryforwards and other net deferred tax assets.

Related Party Transactions

Related Party Transactions	6 Months Ended
Related Party Transactions	Jun. 30, 2015
Related Party Transactions [Abstract]
RELATED PARTY TRANSACTIONS	9. RELATED PARTY TRANSACTIONS See notes 3, 4 and 7 for disclosures regarding transactions with related parties.

Commitments and Contingencies

Commitments and Contingencies	6 Months Ended
Commitments and Contingencies	Jun. 30, 2015
Commitments and Contingencies [Abstract]
COMMITMENTS AND CONTINGENCIES	10. COMMITMENTS AND CONTINGENCIES In March 2013, VC appointed a liquidator and initiated the formal liquidation of its U.K. subsidiary, Signature Industries Limited (“Signature”), primarily related to its outstanding liabilities. VC used £40,000 (approximately $61,000) of the proceeds from the sale of Signature’s former division, Digital Angel Radio Communications Limited (“DARC”) to satisfy its estimated portion of Signature’s outstanding liabilities. However, additional claims submitted to the liquidator could result in the Company being required to pay additional amounts to cover its share of Signature’s outstanding liabilities. The Company has estimated a potential additional liability of approximately $159,000 which is reflected in accrued expenses in the accompanying consolidated balance sheets as of June 30, 2015 and December 31, 2014. On January 30, 2014, the Company and the buyers of DARC entered into a letter agreement under which the Company agreed to accept a payment of £62,000 (USD approximately $0.1 million) in full and final settlement of a deferred purchase price related to VC’s sale of DARC in March 2013. As a result, the Company recorded a loss on the settlement of this receivable of approximately USD $55,000 in the six months ended June 30, 2014, which is reflected in Other expenses in the Company’s consolidated statement of operations. All of the other provisions (including, without limitation, the indemnities) agreed between VC, and/or the Buyers under the stock purchase agreement and any related documents remain in full force and effect. During the year ended December 31, 2013, the Company was informed by the New Jersey Department of Environmental Protection that a predecessor business sold a building in 2006 for which an environmental action has been claimed. The claim is being reviewed by the Company’s outside legal counsel, and the Company has not yet determined the impact on its financial condition, liquidity or cash flows, if any.

Supplemental Disclosure of Cash

Supplemental Disclosure of Cash Flow Information	6 Months Ended
Supplemental Disclosure of Cash Flow Information	Jun. 30, 2015
Supplemental Disclosure of Cash Flow Information [Abstract]
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION	11. SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION Supplemental cash flow information for the six months ended June 30, 2015 and 2014 were as follows (in thousands): 2015 2014 Supplemental disclosure of cash flow information: Cash paid for interest - - Cash paid for income taxes - - Supplemental schedule of non-cash investing and financing activities: Notes payable and accrued liabilities converted into common stock 669 396 Accrued liabilities satisfied through the issuance of convertible promissory notes to related parties 914 - Issuance of a warrant in connection with a promissory note 66 Cashless exercises of common stock warrants 11 6,990 Reclassification of derivative liability to equity upon conversion of notes payable 152 - Discounts recorded for embedded conversion option liabilities of convertible notes 386 -

Subsequent Events

Subsequent Events	6 Months Ended
Subsequent Events	Jun. 30, 2015
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	12. SUBSEQUENT EVENTS Issuance of Convertible Notes Between July 1, 2015 and December 30, 2015, the Company issued convertible promissory notes in the aggregate principal amount of $637,921, for which the Company received $563,355 in net proceeds. In addition, the Company issued convertible promissory notes in connection with the proposed acquisition and other transactions discussed below in the aggregate principal amount of $273,088. The Company received no cash proceeds with the issuance of these notes. These notes are due one year after the date of issuance, bear interest at rates of 10 to 12% per annum, and are convertible into shares of common stock at 60% of the average of the three lowest trading prices of the Company’s common stock during the 10 days prior to conversion. The foregoing notes contain terms similar to those of the convertible notes issued in November 2013 and in 2014, whereby in the event the Company were to issue or sell, or is deemed to have issued or sold, any shares of common stock for a consideration per share (the “New Issuance Price”) that is less than the conversion price in effect immediately prior to such issue or sale or deemed issuance or sale (a “Dilutive Issuance”), then, immediately after such Dilutive Issuance, the conversion price then in effect is reduced to an amount equal to the New Issuance Price. In November and December of 2015 the Company issued additional Officer Notes in the aggregate principal amount of $96,955 in settlement of accrued but unpaid compensation. The terms and conditions of these notes are substantially identical to those of the Officer Notes described in note 4. Capital Stock On July 29, 2015, the Company filed an amendment to its Amended and Restated Certificate of Incorporation with the Secretary of State of Delaware to increase the number of common shares that the Company is authorized to issue from 10 billion to 100 billion. Also on July 29, 2015, the Company effectuated the July 2015 Reverse Stock Split as more fully described in note 1. Between July 1, 2015 and December 30, 2015, outstanding promissory notes in the principal amount of $20,676, were converted into 179,339 shares of common stock. Also between July 1, 2015 and December 30, 2015, the Company issued 98,000 shares of common stock in connection with cashless exercises of outstanding warrants. On August 13, 2015, the Compensation Committee of the Company’s Board of Directors (the “Compensation Committee”) granted 100,000,000 shares of restricted stock to executive officers of the Company and options to purchase 148,500,000 shares of the Company’s common stock to employees and directors of the Company. These grants were under the Company’s 2014 Stock Incentive Plan. Also on August 13, 2015, the Compensation Committee granted an additional 150,000,000 shares of restricted stock to executive officers and a director. The restricted stock vests on January 2, 2017 or upon a change of control. The stock options vested on August 13, 2015, and the Company will record approximately $7.8 million in stock- based compensation in the remainder of 2015 in connection with these grants. Defaults on Senior and Subordinated Securities The Company’s failure to timely file its Quarterly Report on Form 10-Q with the SEC in August of 2015, as well as its failure to pay some of the convertible notes that became due, constitute events of default on the Company’s outstanding convertible promissory notes, including approximately $1.0 million of senior secured promissory notes secured by substantially all of the Company’s assets (the "Senior Notes”). As a result, the Company entered into discussions with Magna Equities I, LLC, (together with its affiliate, Magna Equities II, “Magna”) the collateral agent for the holders of the Senior Notes, and agreed to the actions taken below. On October 19, 2015, the Company entered into a letter agreement with Magna pursuant to which the Company agreed to exchange approximately $1.3 million aggregate principal amount of outstanding unsecured convertible promissory notes held by Magna for an equal principal amount of new secured convertible promissory notes (the “New Magna Notes”) intended to be pari passu in rank and priority with the Senior Notes. There was no accounting effect to this amendment. On October 19, 2015, the Company received a default notice from Magna, acting in its capacity as collateral agent under the security agreement pertaining to the Senior Notes. At the time of the notice, Magna was the holder of outstanding convertible promissory notes of the Company in the aggregate principal amount of approximately $1.6 million (excluding all accrued but unpaid interest), consisting of approximately $0.3 million of Senior Notes and $1.3 million of New Magna Notes, and had entered into agreements with holders of an additional $500,000 aggregate principal of Senior Notes to acquire such Senior Notes. The default notice demanded repayment of the entire amount due under the Senior Notes (including the $500,000 of Senior Notes Magna had the right to acquire) and the New Magna Notes (collectively, the "Magna Notes"). The Company did not have the financial resources to repay this indebtedness. The default notice also advised the Company and its subsidiaries that Magna was exercising all of its rights and remedies under the Senior Notes it owns (including the $500,000 of Senior Notes Magna had the right to acquire) and the New Magna Notes and the related debt documents. In conjunction with this default notice, the Company received from Magna a Notification of Disposition of Collateral (the “NDC”). The NDC advised the Company that Magna intended to sell, lease or license the assets securing the Senior Notes and the New Magna Notes at a public auction to take place in early November of 2015. These assets constitute substantially all of the assets of the Company and its subsidiaries, except for those assets securing the SNC Note. On November 4, 2015, the public auction took place, and Magna purchased the assets, including the capital stock of the Company’s VAC and PositiveID Animal Health subsidiaries, for $1 million, which was credited against the Company’s outstanding indebtedness to Magna. Magna’s purchase of the $500,000 of Senior Notes from the previous holders was completed on November 10, 2015. In connection with this transaction, the Company amended a previously issued unsecured convertible promissory note with one of the holders by increasing the principal amount of the note by $102,500. The Company did not receive any cash proceeds from this transaction. SNC Assets The SNC Note (see note 5) is secured by all of the assets, consisting primarily of intellectual property and certain tangible property and equipment (the “SNC Collateral”), acquired by the Company under the asset purchase agreement entered into by the Company and SNC Holdings Corp. on November 30, 2012. Under the terms of the SNC Note, as amended, which was due on June 30, 2015 and has not been repaid, the holder of the SNC Note may look solely to the SNC Collateral to satisfy all obligations of the Company to it under the SNC Note and not to any other assets of the Company and/or its subsidiaries. In October of 2015, the Company contacted the holder of the SNC Note regarding the possibility of returning the SNC Collateral to the holder in satisfaction of the SNC Note but has yet to return the assets to the holder. The Company is still evaluating its options related to the SNC Assets. Proposed Acquisition On November 25, 2015, the Company entered into a Stock Purchase Agreement (the “Purchase Agreement”) with The Brace Shop, LLC, a Florida limited liability company (“The Brace Shop”) and Lynne Shapiro (the “Seller”), whereby the Company agreed to acquire (the “Acquisition”), all of the issued and outstanding membership interests (the “Stock”) of The Brace Shop. The Brace Shop operates as an online retailer of orthopedic braces and related medical devices and, according to The Brace Shop’s management, had annual unaudited revenues of approximately $7 million for the year ended December 31, 2014. Pursuant to the terms of the Purchase Agreement, the aggregate purchase price for the Stock is (i) $250,000 in cash, $125,000 of which was paid to the Seller upon the execution of the Purchase Agreement and the remaining $125,000 payable, subject to certain conditions, within four business days after the closing of the Acquisition, (ii) one unit of the Company’s to be established Series E Preferred Stock which is convertible into 84.9% of the issued and outstanding shares of common stock of the Company, on a fully diluted basis with voting rights, (iii) a goldenshare in the form of a warrant (the “Goldenshare”), exercisable for that number of shares of common stock required to insure that the Series E Preferred Stock issued as part of the purchase price to the Seller is convertible into 84.9% of the issued and outstanding shares of common stock, on a fully diluted basis. At the closing of the Acquisition, the Company’s current Chief Executive Officer will receive a unit of the Series E Preferred Stock convertible into 3.9% of the issued and outstanding common stock of the Company on a fully-diluted basis. The units of Series E Preferred Stock and the Goldenshare will not be convertible until the date six months from the date of the closing of the Acquisition. In addition, upon the closing of the Acquisition, pursuant to the Purchase Agreement, the Company will pay a consultant $50,000 (less $10,000 that was paid upon the execution of the Purchase Agreement), and issue the consultant a 3 year warrant to purchase, at an exercise price of $0.01 per share, 2.99% of the issued and outstanding common stock of the Company, which warrant may be exercisable on a cashless basis. The aforementioned payment by the Company of $125,000 to the Seller was financed by the sale of a senior secured convertible promissory note in the aggregate principal amount of $147,059 (the “Acquisition Note”) to an institutional investor who previously purchased convertible debt from the Company (the “Investor”). The Acquisition Note bears interest at a rate of 12% per annum, with principal and interest due on November 25, 2016. The Acquisition Note is convertible into shares of the Company’s Common Stock at a conversion price equal to the lesser of (i) $0.015 per share, and (ii) 60% of the average of the three lowest trading prices during the ten trading days prior to conversion, and contains full-ratchet anti-dilution provisions similar to those of convertible notes previously issued by the Company. The embedded conversion option contained in the Acquisition Note will be bifurcated and reflected as a derivative liability at fair value. The Company currently anticipates that the remaining $125,000 cash portion of the purchase price for the Acquisition, the $50,000 consulting fee and all other costs and expenses related to the Acquisition and the Company’s ongoing operations will be funded through the sale of additional senior secured convertible promissory notes to the Investor on terms substantially identical to that of the Acquisition Note. The Purchase Agreement contemplates that all interest, principal and any other required payments on all debt instruments of the Company that are outstanding as of the date of the Purchase Agreement (but excluding the Acquisition Note) shall only be paid through the issuance of shares of common stock. All options, warrants, shares of preferred stock and other securities of the Company outstanding as of the date of the Purchase Agreement are to remain in place on the terms set forth in each of such securities, except that all options, warrants and shares of preferred stock are to be converted into common stock within six months of the date of closing of the Acquisition or cancelled. The closing of the Acquisition is subject to a number of other conditions including, but not limited to, the Company becoming current in its reporting requirements under the Federal Securities Laws, and completion of an audit of The Brace Shop’s financial statements for its two most recent fiscal years. Since the sole member of The Brace Shop would obtain voting control of 84.9% of the Company, the Company anticipates that the closing of the Acquisition, if it takes place, will result in a change in control, and therefore would be accounted for as a reverse acquisition and recapitalization with the Brace Shop as the accounting acquirer and continuing business of the Company. While the Company currently believes that the closing of the Acquisition will take place in January 2016, there can be no assurances that the Closing will occur during such time or at all, or that the terms of the Acquisition as set forth in the Purchase Agreement will not materially change. Moreover, the Company currently has limited funds and no assurances can be given that it will be able to raise any additional funds on terms acceptable to the Company, or at all, or that the Company will be able to continue as a going concern. The failure to do so could result in the Company not being able to effectuate the Acquisition

Organization, Basis of Presen19

Organization, Basis of Presentation and Summary of Selected Significant Accounting Policies (Policies)	6 Months Ended
	Jun. 30, 2015
Organization, Basis of Presentation and Summary of Selected Significant Accounting Policies [Abstract]
Going Concern	Going Concern The accompanying financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and the settlement of liabilities in the normal course of business. The Company has incurred significant operating losses since its inception on December 14, 2011 and had a working capital deficit and accumulated deficit at June 30, 2015 of $10.2 million and $29.3 million, respectively. The Company’s cash position is critically deficient, and payments essential to the Company’s ability to operate are not being made in the ordinary course. Failure to raise capital in the coming days to fund the Company’s operations and failure to generate positive cash flow to fund such operations in the future will have a material adverse effect on the Company’s financial condition. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments to the classification of recorded asset amounts or the amounts and classification of liabilities that might result from this uncertainty. The auditor’s report on the Company’s financial statements for the years ended December 31, 2014 and 2013 expressed substantial doubt about the Company’s ability to continue as a going concern. The Company needs to raise additional funds immediately and continue to raise funds until it begins to generate sufficient cash from operations, and it may not be able to obtain the necessary financing on acceptable terms, or at all. During the six months ended June 30, 2015, the Company raised approximately $0.8 million from the sale of convertible promissory notes (see note 4). On October 19, 2015, the Company received a default notice from its senior lender demanding repayment of approximately $2.1 million of indebtedness, secured by substantially all of the Company’s assets, which the Company was unable to repay. The Company also received a Notice of Disposition of Collateral advising the Company that the senior lender, acting as collateral agent, intended to sell the assets at auction. On November 4, 2015, the Company’s assets were sold at auction for the sum of $1 million, which was credited against the Company’s outstanding senior debt (see note 12). As of the date of this report, the Company has ceased its business operations related to implantable medical device identification.
Reverse Stock Splits and Change in Par Value of Common Stock	Reverse Stock Splits and Change in Par Value of Common Stock On December 18, 2014, an amendment to the Company’s Amended and Restated Certificate of Incorporation to effect a reverse split of all of the outstanding shares of the Company’s common stock at a ratio of 1 for 1,000 was approved by the Company’s Stockholders. The Certificate of Amendment became effective on February 11, 2015, and at that time each 1,000 shares of outstanding common stock of the Company was combined and automatically converted into one share of the Company’s common stock, with a par value of $0.00001 per share (the “February 2015 Reverse Stock Split”). In addition, the conversion and exercise prices of all of the Company’s outstanding preferred stock, common stock purchase warrants, stock options and convertible notes payable were proportionately adjusted at the 1:1,000 reverse split ratio consistent with the terms of such instruments. No fractional shares were issued as a result of the February 2015 Reverse Stock Split, and shareholders received a cash payment in lieu of such fractional shares that they would otherwise be entitled. Also on December 18, 2014, the Company’s stockholders approved an amendment to the Company’s Amended and Restated Certificate of Incorporation to (i) reduce the par value of the Company’s common stock from $0.01 per share to $0.00001 per share; and (ii) increase the number of shares of common stock that the Company is authorized to issue from 500 million to 10 billion. This amendment became effective on December 18, 2014. On July 29, 2015, another amendment to the Company’s Amended and Restated Certificate of Incorporation became effective to implement a 1-for-10,000 reverse stock split (the “July 2015 Reverse Stock Split”) of the Company’s common stock. As a result, each 10,000 shares of the Company’s issued and outstanding common stock automatically, and without any action on the part of the respective holders, were combined and converted into one issued and outstanding share of common stock. The July 2015 Reverse Stock Split resulted in a reduction in the number of issued and outstanding shares of the Company’s common stock from approximately 4.4 billion to approximately 446,000. The July 2015 Reverse Stock Split affected all issued and outstanding shares of the Company's common stock, as well as all common stock underlying convertible notes, warrants, convertible preferred stock and stock options outstanding immediately prior to the July 2015 Reverse Stock Split. The amendment also increased the number of shares of common stock that the Company is authorized to issue from 10 billion to 100 billion. The Amendment was approved by the Company’s Board of Directors and ratified by the Company’s stockholders on May 26, 2015. All share, per share and capital stock amounts as of June 30, 2015 and December 31, 2014, and for the three and six months ended June 30, 2015 and 2014 have been retroactively restated to give effect to the July 2015 Reverse Stock Split, the February 2015 Reverse Stock Split and the change in the par value of the Company’s common stock.
Use of Estimates	Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP 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 consolidated financial statements and the reported amounts of revenues and expenses during the year. Actual results could be affected by those estimates. Included in these estimates are assumptions used in determining the lives and valuation of long-lived assets, in valuation models used in estimating the fair value of certain promissory notes, warrants, embedded conversion options, stock-based compensation and in determining valuation allowances for deferred tax assets.
Inventory	Inventory Inventory consisted of purchased finished goods at June 30, 2015 and December 31, 2014. Inventory is valued at the lower of the value using the first-in, first-out (“FIFO”) cost method, or market.
Property and Equipment	Property and Equipment Property and equipment consists primarily of machinery and computer equipment and is stated at cost less accumulated depreciation. Depreciation expense is computed using the straight-line method over the estimated useful life of the related assets, generally ranging from 3 to 10 years. Depreciation expense for the three and six months ended June 30, 2015 was approximately $2,000 and $4,000, respectively. Depreciation for the three and six months ended June 30, 2014 was less than $1,000.
Intangible Assets	Intangible Assets The Company’s intangible assets (see note 2) are amortized on a straight-line basis over their expected economic lives ranging from 7 to 14 years. The lives were determined based upon the expected use of the asset, the ability to extend or renew patents, trademarks and other contractual provisions associated with the asset, the stability of the industry, expected changes in and replacement value of distribution networks and other factors deemed appropriate. The Company reviews its intangible assets and other long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable. If an impairment indicator is present, the Company evaluates recoverability by a comparison of the carrying amount of the assets to future undiscounted net cash flows expected to be generated by the assets. If the carrying value of the asset exceeds the projected undiscounted cash flows, the Company is required to estimate the fair value of the asset and recognize an impairment charge to the extent that the carrying value of the asset exceeds its estimated fair value. The Company recorded an impairment charge of $0.4 million for the three and six months ended June 30, 2015 and did not record any impairment charges during the three and six months ended June 30, 2014.
Revenue Recognition	Revenue Recognition Product revenue is recognized at the time product is shipped and title has transferred, provided that a purchase order has been received or a contract has been executed, there are no uncertainties regarding customer acceptance, the sales price is fixed and determinable and collectability is deemed probable. Cost of products sold is recorded as the related revenue is recognized.
Income Taxes	Income Taxes The Company recognizes deferred tax liabilities and assets based on the temporary differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates in effect for the year in which the differences are expected to affect taxable income. Temporary differences between taxable income reported for financial reporting purposes and income tax purposes consist primarily of timing differences such as amortization of intangible assets, deferred officers' compensation and stock-based compensation. A valuation allowance is provided against net deferred tax assets when the Company determines it is more likely than not that it will fail to generate sufficient taxable income to be able to realize the deferred tax assets. In accordance with U.S. GAAP, the Company is required to determine whether a tax position of the Company is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The tax benefit to be recognized is measured as the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. Derecognition of a tax benefit previously recognized could result in the Company recording a tax liability that would reduce net assets. Based on its analysis, the Company has determined that it has not incurred any liability for unrecognized tax benefits as of June 30, 2015 and December 31, 2014.
Concentration	Concentration All of the Company’s revenue and accounts receivable are from a single customer, Establishment Labs, SA.
Loss per Common Share and Common Share Equivalent	Loss per Common Share and Common Share Equivalent Basic loss per share excludes dilution and is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted loss per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the income of the Company. The following securities were excluded in the computation of dilutive loss per share for the six months ended June 30, 2015 and 2014 because their inclusion would have been anti-dilutive: 2015 2014 Stock options - - Warrants 4,704,464 1 Shares issuable upon conversion of preferred stock 1,841,000 - Shares issuable upon conversion of convertible notes payable 7,345,527 1 13,890,991 2
Impact of Recently Issued Accounting Standards	Impact of Recently Issued Accounting Standards From time to time, the Financial Accounting Standards Board (the “FASB”) or other standards setting bodies will issue new accounting pronouncements. Updates to the FASB Accounting Standards Codification (“ASC”) are communicated through issuance of an Accounting Standards Update (“ASU”). In April of 2015, the FASB issued ASU No. 2015-03, Interest – Imputation of Interest (Subtopic 835-30);Simplifying the Presentation of Debt Issuance Costs In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU 2014-15”) In May 2014, the FASB issued Accounting Standards Update No. 2014-09, “ Revenue from Contracts with Customers (Topic 606),

Organization, Basis of Presen20

Organization, Basis of Presentation and Summary of Selected Significant Accounting Policies (Tables)	6 Months Ended
	Jun. 30, 2015
Organization, Basis of Presentation and Summary of Selected Significant Accounting Policies [Abstract]
Summary of securities excluded in the computation of dilutive loss per share	2015 2014 Stock options - - Warrants 4,704,464 1 Shares issuable upon conversion of preferred stock 1,841,000 - Shares issuable upon conversion of convertible notes payable 7,345,527 1 13,890,991 2

Intangible Assets (Tables)

Intangible Assets (Tables)	6 Months Ended
Intangible Assets (Tables)	Jun. 30, 2015
Intangible Assets [Abstract]
Summary of intangible assets	June 30, 2015 December 31, 2014 Gross Carrying Accumulated Gross Carrying Accumulated ($000's) Amount Amortization Total Amount Amortization Total Proprietary Technology $ 1,372 $ (372 ) $ 1,000 $ 1,500 $ (318 ) $ 1,182 Customer relationship 248 (248 ) - 500 (212 ) 288 $ 1,620 $ (620 ) $ 1,000 $ 2,000 $ (530 ) $ 1,470

Accrued Expenses (Tables)

Accrued Expenses (Tables)	6 Months Ended
Accrued Expenses (Tables)	Jun. 30, 2015
Accrued Expenses [Abstract]
Summary of significant components of accrued expenses	June 30, 2015 December 31, 2014 (in thousands) Accrued payroll and payroll related (including $842 and $1,060 to related parties) $ 1,202 $ 1,204 Accrued legal 488 477 Accrued other expenses (including $106 and $111 to related parties) 945 830 Total accrued expenses $ 2,635 $ 2,511

Notes Payable (Tables)

Notes Payable (Tables)	6 Months Ended
Notes Payable (Tables)	Jun. 30, 2015
Notes Payable and Subordinated Debt Reported at Fair Value [Abstract]
Schedule of notes payable	June 30, December 31, 2014 (in thousands) Convertible notes payable with a bifurcated conversion option 3,039 2,943 Related party and Officer notes 1,066 169 Other notes payable 176 185 Discount on notes payable (453 ) (531 ) 3,828 2,766 Less current portion (3,828 ) (2,480 ) Non-current notes payable - 286

Financial Instruments and Fai24

Financial Instruments and Fair Value Measurements (Tables)	6 Months Ended
Financial Instruments and Fair Value Measurements (Tables)	Jun. 30, 2015
Financial Instruments and Fair Value Measurements [Abstract]
Schedule of financial assets and liabilities measured at fair value	June 30, 2015 December 31, 2014 Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Liabilities: SNC Note $ — $ — $ 317 $ — $ — $ 316 Bifurcated option in convertible notes $ — $ — $ 2,286 $ — $ — $ 930 Warrant liabilities $ — $ — $ 2,062 $ — $ — $ 534
Summary of activity of Level 3 liabilities	SNC Note Bifurcated embedded option in convertible notes Warrant liabilities Balance at December 31, 2014 $ 316 $ 930 $ 534 Issuance of additional debt 386 Conversion of notes and exercise of warrants into shares of common stock (152 ) (11 ) Losses (gains) included in net loss 1 1,122 1,539 Balance at June 30, 2015 $ 317 $ 2,286 $ 2,062

Supplemental Disclosure of Ca25

Supplemental Disclosure of Cash Flow Information (Tables)	6 Months Ended
Supplemental Disclosure of Cash Flow Information (Tables)	Jun. 30, 2015
Supplemental Disclosure of Cash Flow Information [Abstract]
Schedule of supplemental cash flow information	2015 2014 Supplemental disclosure of cash flow information: Cash paid for interest - - Cash paid for income taxes - - Supplemental schedule of non-cash investing and financing activities: Notes payable and accrued liabilities converted into common stock 669 396 Accrued liabilities satisfied through the issuance of convertible promissory notes to related parties 914 - Issuance of a warrant in connection with a promissory note 66 Cashless exercises of common stock warrants 11 6,990 Reclassification of derivative liability to equity upon conversion of notes payable 152 - Discounts recorded for embedded conversion option liabilities of convertible notes 386 -

Organization, Basis of Presen26

Organization, Basis of Presentation and Summary of Selected Significant Accounting Policies (Details) - shares	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded computation of dilutive loss per share	13,890,991	2
Shares issuable upon conversion of convertible notes payable [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded computation of dilutive loss per share	7,345,527	1
Shares issuable upon conversion of preferred stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded computation of dilutive loss per share	1,841,000
Stock options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded computation of dilutive loss per share
Warrants [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded computation of dilutive loss per share	4,704,464	1

Organization, Basis of Presen27

Organization, Basis of Presentation and Summary of Selected Significant Accounting Policies (Details Textual) - USD ($)	Nov. 04, 2015	Oct. 19, 2015	Jul. 29, 2015	Dec. 18, 2014	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Feb. 11, 2015	Dec. 31, 2014
Organization, Basis Of Presentation And Summary Of Selected Significant Accounting Policies [Line Items]
Working capital deficit					$ 10,200,000		$ 10,200,000
Accumulated deficit					$ (29,343,000)		$ (29,343,000)			$ (23,734,000)
Common stock, par value					$ 0.00001		$ 0.00001			$ 0.00001
Depreciation expense					$ 2,000		$ 4,000
Depreciation, Description						Less than $1,000.		Less than $1,000.
Impairment charges					400,000	$ 0	400,000	$ 0
Unrecognized tax benefits					$ 0		0			$ 0
Sale of convertible promissory notes							$ 800,000
Subsequent Event [Member]
Organization, Basis Of Presentation And Summary Of Selected Significant Accounting Policies [Line Items]
Repayment of debt		$ 2,100,000
Sale of assets	$ 1,000,000
Reverse Stock Split [Member]
Organization, Basis Of Presentation And Summary Of Selected Significant Accounting Policies [Line Items]
Reverse stock split of common stock				1 for 1,000
Common stock, par value									$ 0.00001
Reverse Stock Split [Member] \| Common Stock [Member]
Organization, Basis Of Presentation And Summary Of Selected Significant Accounting Policies [Line Items]
Reverse stock split of common stock				(i) reduce the par value of the Company's common stock from $0.01 per share to $0.00001 per share; and (ii) increase the number of shares of common stock that the Company is authorized to issue from 500 million to 10 billion.
Reverse Stock Split [Member] \| Subsequent Event [Member]
Organization, Basis Of Presentation And Summary Of Selected Significant Accounting Policies [Line Items]
Reverse stock split of common stock			1-for-10,000
Number of shares issued and outstanding			10,000
Minimum [Member]
Organization, Basis Of Presentation And Summary Of Selected Significant Accounting Policies [Line Items]
Property and equipment stimated useful life							3 years
Intangible assets expected economic lives							7 years
Minimum [Member] \| Subsequent Event [Member]
Organization, Basis Of Presentation And Summary Of Selected Significant Accounting Policies [Line Items]
Number of shares issued and outstanding			446,000
Minimum [Member] \| Reverse Stock Split [Member] \| Subsequent Event [Member]
Organization, Basis Of Presentation And Summary Of Selected Significant Accounting Policies [Line Items]
Common stock shares authorized prior to amendment			10,000,000,000
Maximum [Member]
Organization, Basis Of Presentation And Summary Of Selected Significant Accounting Policies [Line Items]
Property and equipment stimated useful life							10 years
Intangible assets expected economic lives							14 years
Maximum [Member] \| Subsequent Event [Member]
Organization, Basis Of Presentation And Summary Of Selected Significant Accounting Policies [Line Items]
Number of shares issued and outstanding			4,400,000,000
Maximum [Member] \| Reverse Stock Split [Member] \| Subsequent Event [Member]
Organization, Basis Of Presentation And Summary Of Selected Significant Accounting Policies [Line Items]
Common stock shares authorized prior to amendment			100,000,000,000

Intangible Assets (Details)

Intangible Assets (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Intangible Assets and Other Assets [Line Items]
Gross Carrying Amount	$ 1,000	$ 1,182
Accumulated Amortization		288
Total	$ 1,000	1,470
Proprietary Technology [Member]
Intangible Assets and Other Assets [Line Items]
Gross Carrying Amount	1,372	1,500
Accumulated Amortization	248	500
Total	1,620	2,000
Customer relationships [Member]
Intangible Assets and Other Assets [Line Items]
Gross Carrying Amount	(372)	(318)
Accumulated Amortization	(248)	(212)
Total	$ (620)	$ (530)

Intangible Assets (Details Text

Intangible Assets (Details Textual) - USD ($)	3 Months Ended		6 Months Ended
Intangible Assets (Details Textual) - USD ($)	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Intangible Assets (Textual)
Impaired proprietary technology fair value			$ 1,000,000
Impairment charges write down fair values			400,000
Amortization of intangible assets	$ 44,000	$ 100,000	$ 100,000	$ 300,000

Accrued Expenses (Details)

Accrued Expenses (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Accrued Expenses [Abstract]
Accrued payroll and payroll related (including $842 and $1,060 to related parties)	$ 1,202	$ 1,204
Accrued legal	488	477
Accrued other expenses (including $106 and $111 to related parties)	945	830
Total accrued expenses	$ 2,635	$ 2,511

Accrued Expenses (Details Textu

Accrued Expenses (Details Textual) - USD ($)	Jun. 30, 2015	Dec. 31, 2014
Accrued Expenses (Textual)
Due to related parties	$ 1,065,695
Accrued payroll and payroll related to related parties	842,000	$ 1,060,000
Accrued other expenses to related parties	106,000	$ 111,000
Officer Notes [Member]
Accrued Expenses (Textual)
Due to related parties	913,519
Silverman [Member] \| Officer Notes [Member]
Accrued Expenses (Textual)
Due to related parties	194,010
Geissler [Member] \| Officer Notes [Member]
Accrued Expenses (Textual)
Due to related parties	285,000
Krawitz [Member] \| Officer Notes [Member]
Accrued Expenses (Textual)
Due to related parties	384,509
Executive Officer [Member]
Accrued Expenses (Textual)
Due to related parties	914,000
Other Executive Officer [Member] \| Officer Notes [Member]
Accrued Expenses (Textual)
Due to related parties	$ 50,000

Notes Payable (Details)

Notes Payable (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Notes Payable and Subordinated Debt Reported at Fair Value [Abstract]
Convertible notes payable with a bifurcated conversion option	$ 3,039	$ 2,943
Related party and Officer notes	1,066	169
Other notes payable	176	185
Discount on notes payable	(453)	(531)
Total	3,828	2,766
Less current portion	$ 3,828	2,480
Non-current notes payable		$ 286

Notes Payable (Details Textual)

Notes Payable (Details Textual)	Nov. 04, 2015USD ($)	Feb. 27, 2015Tradingdays$ / shares	Jun. 30, 2015USD ($)$ / sharesshares	Jun. 30, 2014USD ($)	Dec. 30, 2015USD ($)shares	Jun. 30, 2015USD ($)$ / sharesshares	Jun. 30, 2014USD ($)	Oct. 19, 2015USD ($)	Aug. 31, 2015USD ($)	Jan. 23, 2015USD ($)	Dec. 31, 2014USD ($)$ / shares	May. 01, 2014USD ($)	Apr. 16, 2014USD ($)
Notes Payable (Textual)
Convertible notes payable with a bifurcated conversion option			$ 3,039,000			$ 3,039,000					$ 2,943,000
Notes payable			3,828,000			3,828,000					2,766,000
Related party notes outstanding			1,065,695			$ 1,065,695
Conversion of stock, shares converted \| shares						7,345,527
Amortization of debt discount and deferred financing fees						$ 561,000	$ 1,568,000
Other notes payable past due			176,000			176,000					185,000
Interest expense			356,000	$ 1,131,000		690,000	$ 1,592,000
Notes payable due related parties			37,924			37,924
Accrued interest			1,483			$ 1,483
Conversion of stock into shares of common stock \| shares						26,720
Additional paid-in capital			$ 15,852,000			$ 15,852,000					15,000,000
Subsequent Event [Member]
Notes Payable (Textual)
Convertible notes payable					$ 96,955				$ 1,000,000
Converted debt shares issued \| shares					179,339
Ned Siegel [Member]
Notes Payable (Textual)
Interest rate		60.00%										9.00%	9.00%
Convertible note principal amount												$ 20,000	$ 30,000
Numner of trading days conversion of common stock \| Tradingdays		10
Debt maturity date		Mar. 1, 2016
Debt instrument conversion price \| $ / shares		$ 350
PositiveID Corporation [Member]
Notes Payable (Textual)
Convertible notes payable											115,000
Converted debt shares issued \| shares						10
Convertible note principal amount											$ 70,625
Debt instrument conversion price \| $ / shares											$ 350
Debt instrument percent of lowest trade price											60.00%
Silverman [Member]
Notes Payable (Textual)
Interest rate										5.00%
Convertible note principal amount										$ 45,000
Short-term received in advances						$ 21,100
Senior Lender [Member] \| Subsequent Event [Member]
Notes Payable (Textual)
Proceeds from the issuance of convertible debt	$ 1,000,000
Conversion of Principal Debt to Stock [Member] \| Subsequent Event [Member]
Notes Payable (Textual)
Debt conversion amount					$ 20,676
Conversion of Principal Debt to Stock [Member] \| Accredited Investors [Member]
Notes Payable (Textual)
Debt conversion amount						9,400
Conversion of Accrued Interest to Stock [Member] \| Accredited Investors [Member]
Notes Payable (Textual)
Debt conversion amount						$ 1,537
Minimum [Member]
Notes Payable (Textual)
Interest rate			18.00%			18.00%
Maximum [Member]
Notes Payable (Textual)
Interest rate			22.00%			22.00%
Warrants [Member]
Notes Payable (Textual)
Purchase of common stock by warrant issued \| shares			50			50
Exercise price \| $ / shares			$ 210			$ 210
Warrant term						3 years
Bifurcated Conversion Option [Member]
Notes Payable (Textual)
Convertible notes payable			$ 711,550			$ 711,550
Proceeds from the issuance of convertible debt						$ 653,598
Term of convertible note						1 year
Conversion of common stock description						Company's common stock based on the low end of the trading range of the common stock during the 10 to 30 days prior to conversion.
Repayments of notes payable						$ 9,375
Additional paid-in capital			$ 152,000			152,000
Amount failure to repayment of convertible notes						$ 1,600,000
Bifurcated Conversion Option [Member] \| Minimum [Member]
Notes Payable (Textual)
Interest rate			1.00%			1.00%
Conversion rate						57.00%
Bifurcated Conversion Option [Member] \| Maximum [Member]
Notes Payable (Textual)
Interest rate			12.00%			12.00%
Conversion rate						61.00%
Previous Convertible Notes [Member]
Notes Payable (Textual)
Debt conversion amount						$ 28,800
Converted debt shares issued \| shares						281,908
Convertible note principal amount			$ 576,797			$ 576,797
Accrued interest			$ 10,375			$ 10,375
Officer Notes [Member]
Notes Payable (Textual)
Interest rate			5.00%			5.00%
Related party notes outstanding			$ 913,519			$ 913,519
Officer Notes [Member] \| Silverman [Member]
Notes Payable (Textual)
Related party notes outstanding			194,010			194,010
Officer Notes [Member] \| Geissler [Member]
Notes Payable (Textual)
Related party notes outstanding			285,000			285,000
Debt instrument, settlement of prior debt included in face amount			34,000			34,000
Officer Notes [Member] \| Krawitz [Member]
Notes Payable (Textual)
Related party notes outstanding			384,509			384,509
Debt instrument, settlement of prior debt included in face amount			$ 60,000			$ 60,000
Senior Convertible Notes With First Priority Security Interests [Member] \| Subsequent Event [Member]
Notes Payable (Textual)
Convertible notes payable								$ 2,200,000

Subordinated Debt Reported at34

Subordinated Debt Reported at Fair Value (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Debt Instrument [Line Items]
Convertible subordinated debt fair value	$ 317	$ 316
Scott Silverman [Member] \| Subordinated [Member]
Debt Instrument [Line Items]
Convertible promissory note principal amount	$ 3,300

Financial Instruments and Fai35

Financial Instruments and Fair Value Measurements (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Level 1 [Member]
Liabilities:
SNC Note
Level 2 [Member]
Liabilities:
SNC Note
Level 3 [Member]
Liabilities:
SNC Note	$ 317	$ 316
Bifurcated option in convertible notes [Member] \| Level 1 [Member]
Liabilities:
Derivative liabilities
Bifurcated option in convertible notes [Member] \| Level 2 [Member]
Liabilities:
Derivative liabilities
Bifurcated option in convertible notes [Member] \| Level 3 [Member]
Liabilities:
Derivative liabilities	$ 2,286	$ 930
Warrant liabilities [Member] \| Level 1 [Member]
Liabilities:
Derivative liabilities
Warrant liabilities [Member] \| Level 2 [Member]
Liabilities:
Derivative liabilities
Warrant liabilities [Member] \| Level 3 [Member]
Liabilities:
Derivative liabilities	$ 2,062	$ 534

Financial Instruments and Fai36

Financial Instruments and Fair Value Measurements (Details 1) - Fair Value, Inputs, Level 3 [Member] $ in Thousands	6 Months Ended
	Jun. 30, 2015USD ($)
SNC Note [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Balance	$ 316
Losses (gains) included in net loss	1
Balance	317
Bifurcated option in convertible notes [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Balance	930
Issuance of additional debt	386
Conversion of notes and exercise of warrants into shares of common stock	(152)
Losses (gains) included in net loss	1,122
Balance	2,286
Warrant liabilities [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Balance	534
Conversion of notes and exercise of warrants into shares of common stock	(11)
Losses (gains) included in net loss	1,539
Balance	$ 2,062

Financial Instruments and Fai37

Financial Instruments and Fair Value Measurements (Details Textual) $ in Millions	Jun. 30, 2015USD ($)
Fair Value, Inputs, Level 1 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Intangible asset value	$ 1

Stockholders' Deficit (Details

Stockholders' Deficit (Details Textual) - USD ($)	May. 12, 2015	Apr. 22, 2015	Apr. 20, 2015	Nov. 13, 2013	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Stockholders' Deficit (Textual)
Preferred stock, shares authorized					5,000,000		5,000,000		5,000,000
Preferred stock, par value					$ 0.01		$ 0.01		$ 0.01
Preferred stock, shares outstanding					0		0		0
Common stock, shares authorized					100,000,000,000		100,000,000,000		100,000,000,000
Common stock, shares issued					446,000		446,000			[1]
Common stock, shares, outstanding					446,000		446,000			[1]
Share-based compensation arrangement				5 years
Warrants and rights outstanding					$ 2,062,000		$ 2,062,000		$ 534,000
Derivative instruments							$ (1,122,000)	$ 3,628,000
Share-based payment award, options, exercisable, weighted average remaining contractual term							3 years
Fair value of warrant liabilities							$ 1,539,000	2,838,000
Conversion of stock, shares							7,345,527
Director [Member]
Stockholders' Deficit (Textual)
Common stock shares sold			526
Purchase price of shares			$ 10,000
Conversion of stock, amount	$ 32,101
Conversion of stock, shares	10,700
Series D Preferred Stock [Member]
Stockholders' Deficit (Textual)
Preferred stock, par value					$ 0.01		$ 0.01		$ 0.01
Preferred stock, shares outstanding					1,841		1,841		1,841
Scott Silverman [Member]
Stockholders' Deficit (Textual)
Common stock shares sold		666
Purchase price of shares		$ 10,000
Scott Silverman [Member] \| Series D Preferred Stock [Member]
Stockholders' Deficit (Textual)
Preferred stock, shares outstanding					1,400		1,400
Randolph Geissler [Member] \| Series D Preferred Stock [Member]
Stockholders' Deficit (Textual)
Preferred stock, shares outstanding					441		441
Warrant [Member]
Stockholders' Deficit (Textual)
Exercise price					$ 0.60		$ 0.60
Derivative instruments					$ 1,800,000	$ 6,000,000	$ 1,500,000	2,800,000
Fair value of warrant liabilities							2,100,000	$ 500,000
Aggregate exercise price							$ 2,822,648
Aggregate exercise price shares							4,704,414
November 2013 Warrants (Member)
Stockholders' Deficit (Textual)
Class of warrant or right, number of securities				2,944,444
Exercise price				$ 2.84
Common stock shares sold							125,817
Purchase price of shares							$ 11,000

[1]	At December 31, 2014 the Company had 30 shares (unrounded) outstanding after giving retroactive effect to the reverse splits of 1:1,000 on February 11, 2015 and 1:10,000 on July 29, 2015

Income Taxes (Details)

Income Taxes (Details) - USD ($)	3 Months Ended		6 Months Ended
Income Taxes (Details) - USD ($)	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Income Taxes [Abstract]
Income tax benefit

Commitments and Contingencies (

Commitments and Contingencies (Details)	Jan. 30, 2014USD ($)	Jan. 30, 2014GBP (£)	Mar. 31, 2013USD ($)	Mar. 31, 2013GBP (£)	Jun. 30, 2014USD ($)
Commitments and Contingencies (Textual)
Portion of purchase price from sale of division			$ 61,000	£ 40,000
Additional liability			$ 159,000
Settled Litigation [Member] \| Letter Agreement, Sale of DARC [Member]
Commitments and Contingencies (Textual)
Deferred purchase price receivable	$ 100,000	£ 62,000
Loss on Settlement [Member]
Commitments and Contingencies (Textual)
Other expenses					$ 55,000

Supplemental Disclosure of Ca41

Supplemental Disclosure of Cash Flow Information (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Supplemental disclosure of cash flow information:
Cash paid for interest
Cash paid for income taxes
Supplemental schedule of non-cash investing and financing activities:
Notes payable and accrued liabilities converted into common stock	$ 669	$ 396
Accrued liabilities satisfied through the issuance of convertible promissory notes to related parties	914
Issuance of a warrant in connection with a promissory note		$ 66
Cashless exercises of common stock warrants	11	$ 6,990
Reclassification of derivative liability to equity upon conversion of notes payable	152
Discounts recorded for embedded conversion option liabilities of convertible notes	$ 386

Subsequent Events (Details)

Subsequent Events (Details) - USD ($)

Nov. 25, 2015

Nov. 10, 2015

Oct. 19, 2015

Aug. 13, 2015

Apr. 22, 2015

Dec. 30, 2015

Jun. 30, 2015

Jun. 30, 2014

Dec. 31, 2014

Nov. 04, 2015

Aug. 31, 2015

Jul. 29, 2015

Jan. 23, 2015

Subsequent Event [Line Items]

Proceeds from issuance of common stock

$ 20,000

Common stock, shares authorized

100,000,000,000

Stock-based compensation

$ 354,000

Maximum [Member]

Subsequent Event [Line Items]

Debt instrument, interest rate

22.00%

Minimum [Member]

Subsequent Event [Line Items]

Debt instrument, interest rate

18.00%

Silverman [Member]

Subsequent Event [Line Items]

Stock isued during period , shares, new issues

666

Debt instrument, interest rate

5.00%

Subsequent Event [Member]

Subsequent Event [Line Items]

Convertible notes payable

$ 96,955

$ 1,000,000

Converted debt shares issued

179,339

Stock-based compensation

$ 7,800,000

Unaudited revenue

$ 7,000,000

Subsequent Event [Member] | Secured convertible promissory note [Member]

Subsequent Event [Line Items]

Convertible notes payable

$ 147,059

Debt instrument, interest rate

12.00%

Proposed acquisition, Description

The aforementioned payment by the Company of $125,000 to the Seller was financed by the sale of a senior secured convertible promissory note in the aggregate principal amount of $147,059 (the “Acquisition Note”) to an institutional investor who previously purchased convertible debt from the Company (the “Investor”). The Acquisition Note bears interest at a rate of 12% per annum, with principal and interest due on November 25, 2016. The Acquisition Note is convertible into shares of the Company’s Common Stock at a conversion price equal to the lesser of (i) $0.015 per share, and (ii) 60% of the average of the three lowest trading prices during the ten trading days prior to conversion, and contains full-ratchet anti-dilution provisions similar to those of convertible notes previously issued by the Company. The embedded conversion option contained in the Acquisition Note will be bifurcated and reflected as a derivative liability at fair value. The Company currently anticipates that the remaining $125,000 cash portion of the purchase price for the Acquisition, the $50,000 consulting fee and all other costs and expenses related to the Acquisition and the Company’s ongoing operations will be funded through the sale of additional senior secured convertible promissory notes to the Investor on terms substantially identical to that of the Acquisition Note.

Subsequent Event [Member] | Convertible Notes Issued in Second Quarter of Fiscal 2015 [Member]

Subsequent Event [Line Items]

Convertible notes payable

$ 637,921

Proceeds from the issuance of convertible debt

$ 563,355

Debt instrument, convertible, conversion rate

60.00%

Debt conversion amount

$ 273,088

Subsequent Event [Member] | Cashless Exercise of Warrants [Member]

Subsequent Event [Line Items]

Stock isued during period , shares, new issues

98,000

Subsequent Event [Member] | Maximum [Member]

Subsequent Event [Line Items]

Common stock, shares authorized

100,000,000,000

Subsequent Event [Member] | Maximum [Member] | Convertible Notes Issued in Second Quarter of Fiscal 2015 [Member]

Subsequent Event [Line Items]

Debt instrument, interest rate

12.00%

Subsequent Event [Member] | Minimum [Member]

Subsequent Event [Line Items]

Common stock, shares authorized

10,000,000,000

Subsequent Event [Member] | Minimum [Member] | Convertible Notes Issued in Second Quarter of Fiscal 2015 [Member]

Subsequent Event [Line Items]

Debt instrument, interest rate

10.00%

Subsequent Event [Member] | Executive Officer [Member]

Subsequent Event [Line Items]

Restricted shares issued

100,000,000

Subsequent Event [Member] | Employees and Directors [Member]

Subsequent Event [Line Items]

Options to purchase shares of the company's common stock

148,500,000

Subsequent Event [Member] | Executive oficers and director [Member]

Subsequent Event [Line Items]

Restricted shares issued

150,000,000

Subsequent Event [Member] | Magna Pursuant [Member]

Subsequent Event [Line Items]

Convertible notes payable

$ 102,500

Debt conversion amount

$ 500,000

$ 1,300,000

Purchased assets

$ 1,000,000

Subsequent Event [Member] | Magna Pursuant [Member] | Senior Notes [Member]

Subsequent Event [Line Items]

Convertible notes payable

500,000

Debt conversion amount

$ 300,000

Subsequent Event [Member] | Brace Shop LLC [Member]

Subsequent Event [Line Items]

Proposed acquisition, Description

Pursuant to the terms of the Purchase Agreement, the aggregate purchase price for the Stock is (i) $250,000 in cash, $125,000 of which was paid to the Seller upon the execution of the Purchase Agreement and the remaining $125,000 payable, subject to certain conditions, within four business days after the closing of the Acquisition, (ii) one unit of the Company’s to be established Series E Preferred Stock which is convertible into 84.9% of the issued and outstanding shares of common stock of the Company, on a fully diluted basis with voting rights, (iii) a goldenshare in the form of a warrant (the “Goldenshare”), exercisable for that number of shares of common stock required to insure that the Series E Preferred Stock issued as part of the purchase price to the Seller is convertible into 84.9% of the issued and outstanding shares of common stock, on a fully diluted basis. At the closing of the Acquisition, the Company’s current Chief Executive Officer will receive a unit of the Series E Preferred Stock convertible into 3.9% of the issued and outstanding common stock of the Company on a fully-diluted basis. The units of Series E Preferred Stock and the Goldenshare will not be convertible until the date six months from the date of the closing of the Acquisition. In addition, upon the closing of the Acquisition, pursuant to the Purchase Agreement, the Company will pay a consultant $50,000 (less $10,000 that was paid upon the execution of the Purchase Agreement), and issue the consultant a 3 year warrant to purchase, at an exercise price of $0.01 per share, 2.99% of the issued and outstanding common stock of the Co.pany, which warrant may be exercisable on a cashless basis.

Brace shop voting percentage, description

The Brace Shop would obtain voting control of 84.9% of the Company

Subsequent Event [Member] | Conversion of Principal Debt to Stock [Member]

Subsequent Event [Line Items]

Debt conversion amount

$ 20,676