Document and Entity Information
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6 Months Ended |
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Jun. 30, 2013
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Document And Entity Information | |
Entity Registrant Name | TherapeuticsMD, Inc. |
Entity Central Index Key | 0000025743 |
Document Type | S-1 |
Document Period End Date | Jun. 30, 2013 |
Amendment Flag | true |
Amendment Description | This Post-Effective Amendment No. 1 to Form S-1 is being filed to update the registration statement on Form S-1 (Registration No. 333-185156), or the Registration Statement, of TherapeuticsMD, Inc., or the Company or Therapeutics, which was initially declared effective by the Securities and Exchange Commission on December 12, 2012, to make certain updating revisions to the information contained herein so that such information is current as of the date of filing. No additional securities are being registered under this Post-Effective Amendment No. 1. |
Current Fiscal Year End Date | --12-31 |
Entity Filer Category | Accelerated Filer |
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Description of changes contained within amended document. No definition available.
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If the value is true, then the document is an amendment to previously-filed/accepted document. No definition available.
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End date of current fiscal year in the format --MM-DD. No definition available.
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The end date of the period reflected on the cover page if a periodic report. For all other reports and registration statements containing historical data, it is the date up through which that historical data is presented. If there is no historical data in the report, use the filing date. The format of the date is CCYY-MM-DD. No definition available.
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The type of document being provided (such as 10-K, 10-Q, 485BPOS, etc). The document type is limited to the same value as the supporting SEC submission type, or the word "Other". No definition available.
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- Definition
A unique 10-digit SEC-issued value to identify entities that have filed disclosures with the SEC. It is commonly abbreviated as CIK. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Indicate whether the registrant is one of the following: (1) Large Accelerated Filer, (2) Accelerated Filer, (3) Non-accelerated Filer, (4) Smaller Reporting Company (Non-accelerated) or (5) Smaller Reporting Accelerated Filer. Definitions of these categories are stated in Rule 12b-2 of the Exchange Act. This information should be based on the registrant's current or most recent filing containing the related disclosure. No definition available.
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- Definition
The exact name of the entity filing the report as specified in its charter, which is required by forms filed with the SEC. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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CONSOLIDATED BALANCE SHEETS (USD $)
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Jun. 30, 2013
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Dec. 31, 2012
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Dec. 31, 2011
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Dec. 31, 2010
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Current Assets: | ||||
Cash | $ 34,435,468 | $ 1,553,474 | $ 126,421 | $ 422,939 |
Accounts receivable, net of allowance for doubtful accounts | 957,779 | 606,641 | 26,720 | 11,812 |
Inventory | 1,506,059 | 1,615,210 | 588,073 | 618,069 |
Other current assets | 3,607,283 | 751,938 | 496,060 | 6,292 |
Total current assets | 40,506,589 | 4,527,263 | 1,237,274 | 1,059,112 |
Property and equipment, net | 76,494 | 65,673 | 26,752 | 96,192 |
Other Assets: | ||||
Prepaid consulting | 1,980,519 | 953,655 | 80,515 | 31,949 |
Intangible assets | 345,238 | 239,555 | 62,231 | 10,000 |
Security deposit | 156,949 | 31,949 | 31,949 | |
Total other assets | 2,482,706 | 1,225,159 | 174,695 | 41,949 |
Total assets | 43,065,789 | 5,818,095 | 1,438,721 | 1,197,253 |
Current Liabilities: | ||||
Accounts payable | 2,045,116 | 1,641,366 | 306,511 | 117,636 |
Deferred revenue | 1,219,072 | 1,144,752 | ||
Other current liabilities | 1,334,730 | 725,870 | 465,747 | 115,206 |
Notes payable | 2,150,000 | |||
Notes payable, related parties | 200,000 | |||
Accrued interest | 28,321 | |||
Total current liabilities | 4,598,918 | 3,511,988 | 3,150,579 | 232,842 |
Long-Term Liabilities: | ||||
Notes payable, net of debt discount | 3,589,167 | |||
Accrued Interest | 150,068 | |||
Total Long-term liabilities | 3,739,235 | |||
Total liabilities | 4,598,918 | 7,251,223 | 3,150,579 | 232,842 |
Commitments and Contingencies | ||||
Stockholders' Deficit: | ||||
Preferred stock | ||||
Common stock | 131,213 | 99,785 | 82,979 | 55,487 |
Additional paid in capital | 102,834,270 | 50,580,400 | 15,198,241 | 4,988,637 |
Accumulated deficit | (64,498,612) | (52,113,313) | (16,993,078) | (4,079,713) |
Total stockholder' deficit | 38,466,871 | (1,433,128) | (1,711,858) | 964,411 |
Total liabilities and stockholders' deficit | $ 43,065,789 | $ 5,818,095 | $ 1,438,721 | $ 1,197,253 |
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- Definition
Sum of the carrying values as of the balance sheet date of obligations incurred through that date and due after one year (or beyond the operating cycle if longer), including liabilities for compensation costs, fringe benefits other than pension and postretirement obligations, rent, contractual rights and obligations, and statutory obligations. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Carrying value as of the balance sheet date of liabilities incurred (and for which invoices have typically been received) and payable to vendors for goods and services received that are used in an entity's business. Used to reflect the current portion of the liabilities (due within one year or within the normal operating cycle if longer). Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Amount due from customers or clients, within one year of the balance sheet date (or the normal operating cycle, whichever is longer), for goods or services (including trade receivables) that have been delivered or sold in the normal course of business, reduced to the estimated net realizable fair value by an allowance established by the entity of the amount it deems uncertain of collection. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Value received from shareholders in common stock-related transactions that are in excess of par value or stated value and amounts received from other stock-related transactions. Includes only common stock transactions (excludes preferred stock transactions). May be called contributed capital, capital in excess of par, capital surplus, or paid-in capital. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Sum of the carrying amounts as of the balance sheet date of all assets that are recognized. Assets are probable future economic benefits obtained or controlled by an entity as a result of past transactions or events. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Sum of the carrying amounts as of the balance sheet date of all assets that are expected to be realized in cash, sold, or consumed within one year (or the normal operating cycle, if longer). Assets are probable future economic benefits obtained or controlled by an entity as a result of past transactions or events. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Sum of the carrying amounts as of the balance sheet date of all assets that are expected to be realized in cash, sold or consumed after one year or beyond the normal operating cycle, if longer. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Amount of currency on hand as well as demand deposits with banks or financial institutions. Includes other kinds of accounts that have the general characteristics of demand deposits. Excludes cash and cash equivalents within disposal group and discontinued operation. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Represents the caption on the face of the balance sheet to indicate that the entity has entered into (1) purchase or supply arrangements that will require expending a portion of its resources to meet the terms thereof, and (2) is exposed to potential losses or, less frequently, gains, arising from (a) possible claims against a company's resources due to future performance under contract terms, and (b) possible losses or likely gains from uncertainties that will ultimately be resolved when one or more future events that are deemed likely to occur do occur or fail to occur. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Aggregate par or stated value of issued nonredeemable common stock (or common stock redeemable solely at the option of the issuer). This item includes treasury stock repurchased by the entity. Note: elements for number of nonredeemable common shares, par value and other disclosure concepts are in another section within stockholders' equity. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Amount of deferred revenue as of balance sheet date. Deferred revenue represents collections of cash or other assets related to a revenue producing activity for which revenue has not yet been recognized. Generally, an entity records deferred revenue when it receives consideration from a customer before achieving certain criteria that must be met for revenue to be recognized in conformity with GAAP. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Carrying value of amounts transferred to third parties for security purposes that are expected to be returned or applied towards payment after one year or beyond the operating cycle, if longer. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Amount before amortization of assets, excluding financial assets and goodwill, lacking physical substance with a finite life. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Carrying value as of the balance sheet date of [accrued] interest payable on all forms of debt, including trade payables, that has been incurred and is unpaid. Used to reflect the current portion of the liabilities (due within one year or within the normal operating cycle if longer). Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Carrying amount (lower of cost or market) as of the balance sheet date of inventories less all valuation and other allowances. Excludes noncurrent inventory balances (expected to remain on hand past one year or one operating cycle, if longer). Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Sum of the carrying amounts as of the balance sheet date of all liabilities that are recognized. Liabilities are probable future sacrifices of economic benefits arising from present obligations of an entity to transfer assets or provide services to other entities in the future. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Total of all Liabilities and Stockholders' Equity items (or Partners' Capital, as applicable), including the portion of equity attributable to noncontrolling interests, if any. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Total obligations incurred as part of normal operations that are expected to be paid during the following twelve months or within one business cycle, if longer. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Total obligations incurred as part of normal operations that is expected to be repaid beyond the following twelve months or one business cycle. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Carrying value as of the balance sheet date of notes payable (with maturities initially due after one year or beyond the operating cycle if longer), excluding current portion. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Sum of the carrying values as of the balance sheet date of the portions of all long-term notes and loans payable due within one year or the operating cycle if longer. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
The amount for notes payable (written promise to pay), due to related parties. Used to reflect the current portion of the liabilities (due within one year or within the normal operating cycle if longer). Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Aggregate carrying amount, as of the balance sheet date, of current assets not separately disclosed in the balance sheet. Current assets are expected to be realized or consumed within one year (or the normal operating cycle, if longer). Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Aggregate carrying amount of current liabilities (due within one year or within the normal operating cycle if longer) not separately disclosed in the balance sheet. Includes costs that are statutory in nature, are incurred on contractual obligations, or accumulate over time and for which invoices have not yet been received or will not be rendered and of liabilities not separately disclosed. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Aggregate par or stated value of issued nonredeemable preferred stock (or preferred stock redeemable solely at the option of the issuer). This item includes treasury stock repurchased by the entity. Note: elements for number of nonredeemable preferred shares, par value and other disclosure concepts are in another section within stockholders' equity. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Sum of the carrying amount for an unclassified balance sheet date of expenditures made in advance of when the economic benefit of the cost will be realized, and which will be expensed in future periods with the passage of time or when a triggering event occurs and the carrying amount as of the balance sheet date of assets not otherwise specified in the taxonomy. Also includes assets not individually reported in the financial statements, or not separately disclosed in notes. No definition available.
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- Definition
Amount, net of accumulated depreciation, depletion and amortization, of long-lived physical assets used in the normal conduct of business and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, furniture and fixtures, and computer equipment. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
The cumulative amount of the reporting entity's undistributed earnings or deficit. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Total of all stockholders' equity (deficit) items, net of receivables from officers, directors, owners, and affiliates of the entity which are attributable to the parent. The amount of the economic entity's stockholders' equity attributable to the parent excludes the amount of stockholders' equity which is allocable to that ownership interest in subsidiary equity which is not attributable to the parent (noncontrolling interest, minority interest). This excludes temporary equity and is sometimes called permanent equity. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)
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Jun. 30, 2013
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Dec. 31, 2012
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Dec. 31, 2011
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Dec. 31, 2010
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Consolidated Balance Sheets Parenthetical | ||||
Allowance for doubtful accounts | $ 100,385 | $ 42,408 | $ 1,500 | $ 0 |
Accumulated depreciation of property and equipment | 72,684 | 60,600 | 33,116 | 26,655 |
Debt discount on notes payable | $ 1,102,680 | $ 0 | ||
Preferred stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 250,000,000 | 250,000,000 | 250,000,000 | 250,000,000 |
Common stock, shares issued | 131,212,706 | 99,784,982 | 82,978,804 | 55,487,321 |
Common stock, shares outstanding | 131,212,706 | 99,784,982 | 82,978,804 | 55,487,321 |
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- Definition
The cumulative amount of depreciation, depletion and amortization (related to property, plant and equipment, but not including land) that has been recognized in the income statement. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
A valuation allowance for trade and other receivables due to an Entity within one year (or the normal operating cycle, whichever is longer) that are expected to be uncollectible. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Face amount or stated value of common stock per share; generally not indicative of the fair market value per share. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
The maximum number of common shares permitted to be issued by an entity's charter and bylaws. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Total number of common shares of an entity that have been sold or granted to shareholders (includes common shares that were issued, repurchased and remain in the treasury). These shares represent capital invested by the firm's shareholders and owners, and may be all or only a portion of the number of shares authorized. Shares issued include shares outstanding and shares held in the treasury. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Number of shares of common stock outstanding. Common stock represent the ownership interest in a corporation. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
The amount of debt discount that was originally recognized at the issuance of the instrument that has yet to be amortized. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Face amount or stated value per share of nonredeemable preferred stock (or preferred stock redeemable solely at the option of the issuer); generally not indicative of the fair market value per share. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
The maximum number of nonredeemable preferred shares (or preferred stock redeemable solely at the option of the issuer) permitted to be issued by an entity's charter and bylaws. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Total number of nonredeemable preferred shares (or preferred stock redeemable solely at the option of the issuer) issued to shareholders (includes related preferred shares that were issued, repurchased, and remain in the treasury). May be all or portion of the number of preferred shares authorized. Excludes preferred shares that are classified as debt. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Aggregate share number for all nonredeemable preferred stock (or preferred stock redeemable solely at the option of the issuer) held by stockholders. Does not include preferred shares that have been repurchased. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)
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3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
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Jun. 30, 2013
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Jun. 30, 2012
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Jun. 30, 2013
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Jun. 30, 2012
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Dec. 31, 2012
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Dec. 31, 2011
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Dec. 31, 2010
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Consolidated Statements Of Operations | |||||||
Revenues, net | $ 2,080,885 | $ 819,150 | $ 3,618,080 | $ 1,540,842 | $ 3,818,013 | $ 2,088,177 | $ 1,241,921 |
Cost of goods sold | 463,606 | 372,370 | 843,952 | 708,494 | 1,348,113 | 947,112 | 556,390 |
Gross profit | 1,617,279 | 446,780 | 2,774,128 | 832,348 | 2,469,900 | 1,141,065 | 685,531 |
Operating expenses: | |||||||
Sales, general, and administration | 5,476,553 | 3,573,485 | 10,003,135 | 6,400,535 | 14,069,701 | 6,406,197 | 3,464,810 |
Research and development | 1,747,084 | 833,342 | 3,312,285 | 1,245,303 | 4,492,362 | 107,241 | 65,402 |
Depreciation and amortization | 10,636 | 14,535 | 18,593 | 29,113 | 56,260 | 54,845 | 22,783 |
Total operating expense | 7,234,273 | 4,421,362 | 13,334,013 | 7,674,951 | 18,618,323 | 6,568,283 | 3,552,995 |
Operating loss | (5,616,994) | (3,974,582) | (10,559,885) | (6,842,603) | (16,148,423) | (5,427,218) | (2,867,464) |
Other income and (expense) | |||||||
Loss on extinguishment of debt | (10,307,864) | (10,307,864) | (7,390,000) | ||||
Financing costs | (395,981) | (659,968) | |||||
Beneficial conversion feature | (6,716,504) | (6,716,504) | (6,716,504) | ||||
Amortization of debt discount | (1,604,240) | (28,719) | 0 | ||||
Interest expense | (150) | (1,148,761) | (1,165,981) | (1,250,734) | (301,169) | (35,661) | |
Loan guaranty costs | (11,745) | (2,944) | (23,490) | (45,036) | (38,159) | ||
Other income | 3,479 | 1,554 | 3,479 | 1,554 | 3,001 | 6,392 | |
Total other income (expense) | (392,652) | (7,875,456) | (1,825,414) | (18,297,038) | (18,971,812) | (7,486,147) | |
Loss before taxes | (6,009,646) | (11,850,038) | (12,385,299) | (25,139,641) | (35,120,235) | (12,913,365) | (2,867,464) |
Provision for income taxes | |||||||
Net loss | $ (6,009,646) | $ (11,850,038) | $ (12,385,299) | $ (25,139,641) | $ (35,120,235) | $ (12,913,365) | $ (2,867,464) |
Net loss per share, basic and diluted | $ (0.05) | $ (0.14) | $ (0.11) | $ (0.29) | $ (0.38) | $ (0.21) | $ (0.07) |
Weighted average number of shares outstanding | 130,851,978 | 86,149,419 | 116,866,764 | 85,352,818 | 91,630,693 | 62,516,461 | 38,289,463 |
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- Details
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- Definition
The expense incurred for loan guaranty costs. No definition available.
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- Definition
Amount of noncash expense included in interest expense to amortize debt discount and premium associated with the related debt instruments. Excludes amortization of financing costs. Alternate captions include noncash interest expense. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Total costs related to goods produced and sold during the reporting period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Amount of a favorable spread to a debt holder between the amount of debt being converted and the value of the securities received upon conversion. This is an embedded conversion feature of convertible debt issued that is in-the-money at the commitment date. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Amount of debt issuance costs (for example, but not limited to, legal, accounting, broker, and regulatory fees). No definition available.
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- Definition
The current period expense charged against earnings on long-lived, physical assets not used in production, and which are not intended for resale, to allocate or recognize the cost of such assets over their useful lives; or to record the reduction in book value of an intangible asset over the benefit period of such asset; or to reflect consumption during the period of an asset that is not used in production. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
The amount of net income or loss for the period per each share in instances when basic and diluted earnings per share are the same amount and reported as a single line item on the face of the financial statements. Basic earnings per share is the amount of net income or loss for the period per each share of common stock or unit outstanding during the reporting period. Diluted earnings per share includes the amount of net income or loss for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period. No definition available.
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- Definition
Difference between the fair value of payments made and the carrying amount of debt which is extinguished prior to maturity. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Aggregate revenue less cost of goods and services sold or operating expenses directly attributable to the revenue generation activity. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
This element represents the income or loss from continuing operations attributable to the economic entity which may also be defined as revenue less expenses from ongoing operations, after income or loss from equity method investments, but before income taxes, extraordinary items, and noncontrolling interest. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
The sum of the current income tax expense or benefit and the deferred income tax expense or benefit pertaining to continuing operations. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
The cost of borrowed funds accounted for as interest that was charged against earnings during the period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
The portion of profit or loss for the period, net of income taxes, which is attributable to the parent. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
The aggregate amount of income or expense from ancillary business-related activities (that is to say, excluding major activities considered part of the normal operations of the business). Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Generally recurring costs associated with normal operations except for the portion of these expenses which can be clearly related to production and included in cost of sales or services. Includes selling, general and administrative expense. No definition available.
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- Definition
The net result for the period of deducting operating expenses from operating revenues. No definition available.
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- Definition
The aggregate amount of other income amounts, the components of which are not separately disclosed on the income statement, resulting from ancillary business-related activities (that is, excluding major activities considered part of the normal operations of the business) also known as other nonoperating income recognized for the period. Such amounts may include: (a) dividends, (b) interest on securities, (c) profits on securities (net of losses), and (d) miscellaneous other income items. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
The aggregate costs incurred (1) in a planned search or critical investigation aimed at discovery of new knowledge with the hope that such knowledge will be useful in developing a new product or service, a new process or technique, or in bringing about a significant improvement to an existing product or process; or (2) to translate research findings or other knowledge into a plan or design for a new product or process or for a significant improvement to an existing product or process whether intended for sale or the entity's use, during the reporting period charged to research and development projects, including the costs of developing computer software up to the point in time of achieving technological feasibility, and costs allocated in accounting for a business combination to in-process projects deemed to have no alternative future use. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Total revenue from sale of goods and services rendered during the reporting period, in the normal course of business, reduced by sales returns and allowances, and sales discounts. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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X | ||||||||||
- Definition
The aggregate total costs related to selling a firm's product and services, as well as all other general and administrative expenses. Direct selling expenses (for example, credit, warranty, and advertising) are expenses that can be directly linked to the sale of specific products. Indirect selling expenses are expenses that cannot be directly linked to the sale of specific products, for example telephone expenses, Internet, and postal charges. General and administrative expenses include salaries of non-sales personnel, rent, utilities, communication, etc. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Average number of shares or units issued and outstanding that are used in calculating basic and diluted earnings per share (EPS). No definition available.
|
X | ||||||||||
- Definition
The value of the effect of merger and recapitalization pursuant to the execution of a security exchange agreement. No definition available.
|
X | ||||||||||
- Definition
Number of shares issued during the period as a result of the merger and recapitalization pursuant to secuirty exchnage agreement. No definition available.
|
X | ||||||||||
- Definition
Increase in additional paid in capital due to warrants issued during the period. No definition available.
|
X | ||||||||||
- Definition
Increase in additional paid in capital due to warrants issued during the period. No definition available.
|
X | ||||||||||
- Definition
Increase in additional paid in capital due to warrants issued during the period. No definition available.
|
X | ||||||||||
- Definition
Increase in additional paid in capital due to warrants issued during the period. No definition available.
|
X | ||||||||||
- Definition
Warrants issued in the period for services provided. No definition available.
|
X | ||||||||||
- Definition
Adjustment to Additional Paid in Capital resulting from the recognition of deferred taxes for the temporary difference of the convertible debt with a beneficial conversion feature. A beneficial conversion feature is a nondetachable conversion feature that is in-the-money. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Represents increases or decreases in additional paid in capital not separately disclosed. No definition available.
|
X | ||||||||||
- Definition
This element represents the amount of recognized equity-based compensation related to stock options during the period, that is, the amount recognized as expense in the income statement (or as asset if compensation is capitalized). No definition available.
|
X | ||||||||||
- Definition
Increase in additional paid in capital due to warrants issued during the period. Includes also the proceeds of debt securities issued with detachable stock purchase warrants that are allocable to the warrants. These warrants qualify for equity classification and provide the holder with a right to purchase stock from the entity. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Number of shares of common stock outstanding. Common stock represent the ownership interest in a corporation. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The value of the financial instrument(s) that the original debt is being converted into in a noncash (or part noncash) transaction. "Part noncash" refers to that portion of the transaction not resulting in cash receipts or cash payments in the period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The number of shares issued in exchange for the original debt being converted in a noncash (or part noncash) transaction. "Part noncash" refers to that portion of the transaction not resulting in cash receipts or payments in the period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The portion of profit or loss for the period, net of income taxes, which is attributable to the parent. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Amount of stockholders' equity (deficit), net of receivables from officers, directors, owners, and affiliates of the entity, attributable to both the parent and noncontrolling interests. Amount excludes temporary equity. Alternate caption for the concept is permanent equity. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Number of new stock issued during the period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Number of shares of stock issued during the period that is attributable to transactions involving issuance of stock not separately disclosed. No definition available.
|
X | ||||||||||
- Definition
Number of share options (or share units) exercised during the current period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Equity impact of the value of new stock issued during the period. Includes shares issued in an initial public offering or a secondary public offering. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Value of shares of stock issued during the period that is attributable to transactions involving issuance of stock not separately disclosed. No definition available.
|
X | ||||||||||
- Definition
Value of stock issued as a result of the exercise of stock options. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The value of the effect of merger and recapitalization pursuant to the execution of a security exchange agreement. No definition available.
|
X | ||||||||||
- Definition
The expense incurred for loan guaranty costs. No definition available.
|
X | ||||||||||
- Definition
Proceeds from the sale of warrants in the period. No definition available.
|
X | ||||||||||
- Definition
The value of warrants exercised in the period in exchange for debt and accrued interest. No definition available.
|
X | ||||||||||
- Definition
Warrants issued in the period for financing. No definition available.
|
X | ||||||||||
- Definition
Warrants issued in the period for services provided. No definition available.
|
X | ||||||||||
- Details
|
X | ||||||||||
- Definition
Amount of noncash expense included in interest expense to issue debt and obtain financing associated with the related debt instruments. Alternate captions include noncash interest expense. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Amount of noncash expense included in interest expense to allocate debt discount and premium, and the costs to issue debt and obtain financing over the related debt instruments. Alternate captions include noncash interest expense. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The aggregate expense charged against earnings to allocate the cost of intangible assets (nonphysical assets not used in production) in a systematic and rational manner to the periods expected to benefit from such assets. As a noncash expense, this element is added back to net income when calculating cash provided by or used in operations using the indirect method. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Amount of currency on hand as well as demand deposits with banks or financial institutions. Includes other kinds of accounts that have the general characteristics of demand deposits. Excludes cash and cash equivalents within disposal group and discontinued operation. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Amount of increase (decrease) in cash. Cash is the amount of currency on hand as well as demand deposits with banks or financial institutions. Includes other kinds of accounts that have the general characteristics of demand deposits. Excludes cash and cash equivalents within disposal group and discontinued operation. No definition available.
|
X | ||||||||||
- Definition
Amount of a favorable spread to a debt holder between the amount of debt being converted and the value of the securities received upon conversion. This is an embedded conversion feature of convertible debt issued that is in-the-money at the commitment date. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Amount of deferred revenue recognized for transactions arising during the current reporting period. Deferred revenue is a liability as of the balance sheet date related to a revenue producing activity for which revenue has not yet been recognized. Generally, an Entity records deferred revenue when it receives consideration from a customer before achieving certain criteria that must be met for revenue to be recognized in conformity with GAAP. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The amount of expense recognized in the current period that reflects the allocation of the cost of tangible assets over the assets' useful lives. Includes production and non-production related depreciation. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Difference between the fair value of payments made and the carrying amount of debt which is extinguished prior to maturity. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The amount of cash paid during the current period to foreign, federal, state, and local authorities as taxes on income. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The increase (decrease) during the reporting period in the aggregate amount of liabilities incurred (and for which invoices have typically been received) and payable to vendors for goods and services received that are used in an entity's business. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The increase (decrease) during the reporting period in amount due within one year (or one business cycle) from customers for the credit sale of goods and services. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The increase (decrease) during the reporting period in the aggregate amount of accrued expenses and other operating obligations not separately disclosed in the statement of cash flows. No definition available.
|
X | ||||||||||
- Definition
The increase (decrease) during the reporting period in interest payable, which represents the amount owed to note holders, bond holders, and other parties for interest earned on loans or credit extended to the reporting entity. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The increase (decrease) during the reporting period in the aggregate value of all inventory held by the reporting entity, associated with underlying transactions that are classified as operating activities. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Details
|
X | ||||||||||
- Definition
The increase (decrease) during the reporting period in other current operating assets not separately disclosed in the statement of cash flows. No definition available.
|
X | ||||||||||
- Definition
The increase (decrease) during the reporting period in other assets used in operating activities not separately disclosed in the statement of cash flows. May include changes in other current assets, other noncurrent assets, or a combination of other current and noncurrent assets. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The amount of cash paid for interest during the period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The fair value of restricted stock or stock options granted to nonemployees as payment for services rendered or acknowledged claims. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The net cash inflow or outflow from financing activity for the period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Details
|
X | ||||||||||
- Definition
The net cash inflow or outflow from investing activity. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Details
|
X | ||||||||||
- Definition
The net cash from (used in) all of the entity's operating activities, including those of discontinued operations, of the reporting entity. Operating activities generally involve producing and delivering goods and providing services. Operating activity cash flows include transactions, adjustments, and changes in value that are not defined as investing or financing activities. While for technical reasons this element has no balance attribute, the default assumption is a debit balance consistent with its label. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Details
|
X | ||||||||||
- Definition
The portion of profit or loss for the period, net of income taxes, which is attributable to the parent. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The fair value of notes issued in noncash investing and financing activities. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The amount of cash paid for deposits on goods and services during the period; excludes time deposits and deposits with other institutions, which pertain to financial service entities. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The cash outflow to acquire asset without physical form usually arising from contractual or other legal rights, excluding goodwill. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The cash outflow associated with the acquisition of long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale; includes cash outflows to pay for construction of self-constructed assets. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The cash inflow from the additional capital contribution to the entity. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The cash inflow from a contractual arrangement with the lender, including letter of credit, standby letter of credit and revolving credit arrangements, under which borrowings can be made up to a specific amount at any point in time with either short term or long term maturity that is collateralized (backed by pledge, mortgage or other lien in the entity's assets). Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The cash inflow from a long-term borrowing made from related parties where one party can exercise control or significant influence over another party; including affiliates, owners or officers and their immediate families, pension trusts, and so forth. Alternate caption: Proceeds from Advances from Affiliates. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The cash inflow resulting from the sale of an interest in a corporate unit during the period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The cash inflow from a borrowing having initial term of repayment within one year or the normal operating cycle, if longer. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The cash inflow associated with the amount received from holders exercising their stock options. This item inherently excludes any excess tax benefit, which the entity may have realized and reported separately. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Amount of the current period expense charged against operations, the offset which is generally to the allowance for doubtful accounts for the purpose of reducing receivables, including notes receivable, to an amount that approximates their net realizable value (the amount expected to be collected). Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The cash outflow to pay off an obligation from a contractual arrangement with the lender, including letter of credit, standby letter of credit and revolving credit arrangements, under which borrowings can be made up to a specific amount at any point in time with either short term or long term maturity. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The cash outflow for a borrowing supported by a written promise to pay an obligation. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The cash outflow for the payment of a long-term borrowing made from a related party where one party can exercise control or significant influence over another party; including affiliates, owners or officers and their immediate families, pension trusts, and so forth. Alternate caption: Payments for Advances from Affiliates. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The aggregate amount of noncash, equity-based employee remuneration. This may include the value of stock or unit options, amortization of restricted stock or units, and adjustment for officers' compensation. As noncash, this element is an add back when calculating net cash generated by operating activities using the indirect method. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Number of shares issued for noncash consideration. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Details
|
THE COMPANY
|
6 Months Ended | 12 Months Ended | |||||||||||||||||||||
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Jun. 30, 2013
|
Dec. 31, 2012
|
Dec. 31, 2011
|
|||||||||||||||||||||
Company | |||||||||||||||||||||||
THE COMPANY | NOTE 1 – THE COMPANY
TherapeuticsMD, Inc., a Nevada corporation, or TherapeuticsMD or the Company, has two wholly owned subsidiaries, vitaMedMD, LLC, a Delaware limited liability company organized on May 13, 2008, or VitaMed, and BocaGreenMD, Inc., a Nevada corporation incorporated on January 10, 2012, or BocaGreen. Unless the context otherwise requires, TherapeuticsMD, VitaMed, and BocaGreen collectively are sometimes referred to as “our company,” “we,” “our,” or “us.”
Nature of Business
We are a women’s healthcare product company focused on creating and commercializing products targeted exclusively for women. We currently manufacture and distribute branded and generic prescription prenatal vitamins as well as over-the-counter vitamins and cosmetics. |
NOTE 1 THE COMPANY
TherapeuticsMD, Inc., a Nevada corporation (Therapeutics or the Company) has two wholly owned subsidiaries, vitaMedMD, LLC, a Delaware limited liability company organized on May 13, 2008 (VitaMed), and BocaGreenMD, Inc., a Nevada corporation, incorporated on January 10, 2012 (BocaGreen). Unless the context otherwise requires, the Company, VitaMed, and BocaGreen collectively are sometimes referred to as our company, we, our, or us.
Agreement and Plan of Merger with VitaMed
On July 18, 2011, Therapeutics entered into an Agreement and Plan of Merger (Merger Agreement) by and among VitaMed and VitaMed Acquisition, LLC, a Delaware limited liability company and wholly owned subsidiary of the Company (the Merger Sub), pursuant to which the Company would acquire 100% of VitaMed. The proposed acquisition was to be accomplished by the merger of Merger Sub with and into VitaMed with VitaMed being the surviving limited liability company (the Merger) in accordance with the Limited Liability Company Act of the State of Delaware. The Merger became effective upon the filing of the Certificate of Merger with the Secretary of State of the State of Delaware on October 4, 2011 (the Effective Date). In preparation of and prior to the closing of the Merger Agreement, the Company completed the following required corporate actions:
On the Effective Date, we acquired 100% of VitaMed in exchange for the issuance of shares of the Companys Common Stock, as more fully described below (the Merger). In accordance with the provisions of this triangulated merger, the Merger Sub was merged with and into VitaMed as of the Effective Date. Upon consummation of the Merger Agreement and all transactions contemplated therein, the separate existence of the Merger Sub ceased and VitaMed became a wholly owned subsidiary of the Company.
Exchange of Securities
On the Effective Date, all outstanding membership units of VitaMed (the Units) were exchanged for shares of the Companys Common Stock. In addition, all outstanding VitaMed options to purchase VitaMed membership units (the VitaMed Options) and all outstanding VitaMed warrants to purchase VitaMed membership units (the VitaMed Warrants) were exchanged and converted into options and warrants for the purchase of the Companys Common Stock (Company Options and Company Warrants, respectively).
All Units, VitaMed Options and VitaMed Warrants were exchanged on a pro-rata basis for shares of the Companys Common Stock which in the aggregate totaled 70,000,000 shares, resulting in a conversion ratio calculated by the sum of all outstanding Units, VitaMed Options and VitaMed Warrants divided by 70,000,000 (the Conversion Ratio). Pursuant to the Conversion Ratio, the Company issued 58,407,331 shares of the Companys Common Stock in exchange for the outstanding Units, reserved for issuance an aggregate of 10,119,796 shares issuable upon the exercise of the Company Options, and reserved for issuance an aggregate of 1,472,916 shares issuable upon the exercise of the Company Warrants. After giving effect to the Reverse Split, and taking into consideration the 58,407,331 aforementioned shares issued in exchange for the Units, the number of shares of the Companys Common Stock issued and outstanding as of the Effective Date was 58,573,187, of which the former members of VitaMed owned approximately 99%. All shares of the Companys Common Stock issued in exchange for the Units, and to be issued upon exercise of the Company Options and Company Warrants, are subject to a lock-up agreement for a period of 18 months from the Effective Date.
Nature of Business
We are a womens healthcare product company focused on creating and commercializing products targeted exclusively for women. We currently manufacture and distribute branded and generic prescription prenatal vitamins as well as over-the-counter, or OTC, vitamins.
New Products
In March 2012, we launched our first prescription-only prenatal vitamin, vitaMedMD Plus Rx, with subsequent launches of our second prescription-only prenatal vitamin, vitaMedMD One Rx in April 2012, and our third prescription-only prenatal vitamin, vitaMedMD RediChew Rx in May 2012. In the fourth quarter 2012, our BocaGreenMD brand was launched and our first products include three prescription products Prena1 Plus, Prena1 and Prena1 Chew, which are duplicate, or generic formulations of our vitaMedMD-branded prescription prenatals |
NOTE A – THE COMPANY
Corporate Overview and History of Therapeutics
TherapeuticsMD, Inc., a Nevada corporation (“Therapeutics” or the “Company”) was incorporated in Utah in 1907 under the name Croff Mining Company. The Company changed its name to Croff Oil Company in 1952 and in 1996 changed its name to Croff Enterprises, Inc. In the twenty (20) years prior to 2008, Croff’s operations consisted entirely of oil and natural gas leases. Due to a spin-off of its operations in December 2007, Croff had no business operations or revenue source and had reduced its operations to a minimal level although it continued to file reports required under the Exchange Act. As a result of the spin-off, Croff was a “shell company” under the rules of the Commission. In July 2009, the Company (i) closed a transaction to acquire America’s Minority Health Network, Inc. as a wholly owned subsidiary, (ii) ceased being a shell company, and (iii) experienced a change in control in which the former shareholders of America’s Minority Health Network, Inc. acquired control of the Company. On September 14, 2009, the Company changed its name to AMHN, Inc. On June 11, 2010, the Company closed a transaction to acquire Spectrum Health Network, Inc. as a wholly owned subsidiary. On July 20, 2010, the Company filed Articles of Conversion and Articles of Incorporation to redomicile in the State of Nevada and changed the par value of its shares of capital stock to $0.001 per share. On July 31, 2010, the Company transferred the assets of America’s Minority Health Network, Inc. to a secured noteholder in exchange for the satisfaction of debt associated therewith. On February 15, 2011, the Company transferred the assets of Spectrum Health Network, Inc. to a secured noteholder in exchange for the satisfaction of debt associated therewith and in exchange for an Exclusive Licensing, Distribution and Advertising Sales Agreement (“Licensing Agreement”) under which the Company could sell subscription services and advertising on the Spectrum Health Network for commissions. On August 3, 2011 (with an effective date of October 3, 2011), in anticipation of closing the Merger (as defined and described below), the Company filed Amended and Restated Articles of Incorporation to change its name to TherapeuticsMD, Inc. and to increase the shares of Common Stock authorized for issuance to 250,000,000. On October 4, 2011, the Company closed the Merger with vitaMedMD, LLC, a Delaware limited liability company (“VitaMed”). As of December 31, 2011, Company management determined that VitaMed would become the sole focus of the Company and services performed relative to the Licensing Agreement were discontinued. Unless otherwise stated or unless the context otherwise requires, the description of our business set forth below is provided on a combined basis, taking into account our newly-acquired wholly owned subsidiary, VitaMed.
The Company maintains a website at www.therapeuticsmd.com.
Agreement and Plan of Merger with VitaMed
On July 18, 2011, Therapeutics entered into an Agreement and Plan of Merger (“Merger Agreement”) by and among VitaMed and VitaMed Acquisition, LLC, a Delaware limited liability company and wholly owned subsidiary of the Company (the “Merger Sub”), pursuant to which the Company would acquire 100% of VitaMed. The proposed acquisition was to be accomplished by the merger of Merger Sub with and into VitaMed with VitaMed being the surviving limited liability company (the “Merger”) in accordance with the Limited Liability Company Act of the State of Delaware. The Merger became effective upon the filing of the Certificate of Merger with the Secretary of State of the State of Delaware on October 4, 2011 (the “Effective Time”). In preparation of and prior to the closing of the Merger Agreement, the Company completed the following required corporate actions with an effective date of October 3, 2011:
Agreement and Plan of Merger with VitaMed (continued)
On October 4, 2011, the Closing Date of the Merger Agreement, the Company acquired 100% of VitaMed in exchange for the issuance of shares of the Company’s Common Stock, as more fully described below (the “Merger”). In accordance with the provisions of this triangulated merger, the Merger Sub was merged with and into VitaMed as of the Effective Date. Upon consummation of the Merger Agreement and all transactions contemplated therein, the separate existence of the Merger Sub ceased and VitaMed became a wholly owned subsidiary of the Company.
Exchange of Securities
At the Effective Time, all outstanding membership units of VitaMed (the “Units”) were exchanged for shares of the Company’s Common Stock. In addition, all outstanding VitaMed options to purchase VitaMed membership units (the “VitaMed Options”) and all outstanding VitaMed warrants to purchase VitaMed membership units (the “VitaMed Warrants”) were exchanged and converted into options and warrants for the purchase of the Company’s Common Stock (“Company Options” and “Company Warrants”, respectively). All Units, VitaMed Options and VitaMed Warrants were exchanged on a pro-rata basis for shares of the Company’s Common Stock which in the aggregate totaled 70,000,000 shares, resulting in a conversion ratio calculated by the sum of all outstanding Units, VitaMed Options and VitaMed Warrants divided by 70,000,000 (the “Conversion Ratio”). Pursuant to the Conversion Ratio, the Company issued 58,407,331 shares of the Company’s Common Stock in exchange for the outstanding Units, reserved for issuance an aggregate of 10,119,796 shares issuable upon the exercise of the Company Options, and reserved for issuance an aggregate of 1,472,916 shares issuable upon the exercise of the Company Warrants. After giving effect to the Reverse Split, and taking into consideration the 58,407,331 aforementioned shares issued in exchange for the Units, the number of shares of the Company’s Common Stock issued and outstanding as of the Closing Date was 58,573,187, of which the former members of VitaMed owned approximately 99%. All shares of the Company’s Common Stock issued in exchange for the Units, and to be issued upon exercise of the Company Options and Company Warrants, are subject to a lock-up agreement for a period of eighteen (18) months from the Closing.
Corporate Overview and History of VitaMed
VitaMed is a specialty pharmaceutical company organized as a limited liability company in the State of Delaware on May 13, 2008. VitaMed is focused on providing the highest quality products to the women’s health market. Our direct national sales force that calls on physicians and pharmacies is enhanced by our patent-pending technology and business methodology. This combination allows us to market both over-the-counter (“OTC”) and prescription nutritional supplements, drugs, medical foods and other medical products through pharmacies and our web-site with the recommendation of physicians by creating unique value propositions for patients, physician/providers and insurance payors.
In the early part of 2009, we completed formulation of our first products, a prenatal multivitamin and a vegan docosahexaenoic acid (“DHA”) supplement and introduced the product to the market in June 2009 with sales primarily in South Florida. In September 2010, we achieved a milestone of $1 million in total sales and had begun to expand our sales force nationally and currently have product sales into 46 states. Our product line has been expanded to ten core products and our new product development continues to focus on the women’s health market. As we continue our product development efforts for both new products and refinements to existing products, we are also seeking proprietary ingredients and formulations that can be exclusively licensed or patented for use in women’s healthcare that will further differentiate our products from the competition.
VitaMed maintains websites at www.vitamedmd.com and www.vitamedmdrx.com.
Throughout these Notes to Consolidated Financial Statements, the terms “we,” “us,” “our,” “Therapeutics,” or the “Company” refers to TherapeuticsMD, Inc., and unless otherwise specified, includes our wholly owned subsidiary, VitaMed.
|
X | ||||||||||
- Details
|
X | ||||||||||
- Definition
The entire disclosure for organization, consolidation and basis of presentation of financial statements disclosure. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
BASIS OF PRESENTATION AND RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
|
6 Months Ended | ||||||||||||||||||||
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Jun. 30, 2013
|
|||||||||||||||||||||
Basis Of Presentation And Recently Issued Accounting Pronouncements | |||||||||||||||||||||
BASIS OF PRESENTATION AND RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS | NOTE 2 – BASIS OF PRESENTATION AND RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
Interim Financial Statements
Our accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles, or GAAP, for complete financial statements. In our opinion, such financial statements include all adjustments (consisting solely of normal recurring adjustments) necessary for the fair statement of the financial information included herein in accordance with GAAP and the rules and regulations of the Securities and Exchange Commission, or SEC. The balance sheet at December 31, 2012 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements. The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the period. Actual results could differ from those estimates. Results of operations for interim periods are not necessarily indicative of results for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in our Annual Report on Form 10-K filed with the SEC for the year ended December 31, 2012.
Fair Value of Financial Instruments
Our financial instruments consist primarily of receivables, accounts payable, accrued expenses, and short-term debt. The carrying amount of accounts receivable, accounts payable, and accrued expenses approximates their fair value because of the short-term maturity of such instruments and are considered Level 1 assets under the fair value hierarchy. Interest rates that are currently available to us for issuance of short and long-term debt with similar terms and remaining maturities are used to estimate the fair value of our short and long-term debt and would be considered Level 3 inputs under the fair value hierarchy.
Fair Value of Financial Instruments
We categorize our assets and liabilities that are valued at fair value on a recurring basis into a three-level fair value hierarchy as defined by Accounting Standards Codification, or ASC 820 Fair Value Measurements and Disclosures. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets and liabilities (Level 1) and lowest priority to unobservable inputs (Level 3). Assets and liabilities recorded in the consolidated balance sheet at fair value are categorized based on a hierarchy of inputs, as follows:
At June 30, 2013 and December 31, 2012, we had no assets or liabilities that were valued at fair value on a recurring basis.
Research and Development
Research and development, or R&D, expenses include internal R&D activities, external contract research organization, or CRO, services and their clinical research sites, and other activities. Internal R&D activity expenses include laboratory supplies, salaries, benefits, and share-based compensation expenses. CRO activity expenses include preclinical laboratory experiments and clinical trial studies. Other activity expenses include regulatory consulting, and regulatory legal counsel. Internal R&D activities and other activity expenses are charged to operations as incurred. We make payments to the CRO’s based on agreed upon terms and may include payments in advance of a study starting date. Nonrefundable advance payments for goods and services that will be used in future research and development activities are expensed when the activity has been performed or when the goods have been received rather than when the payment is made. We review and accrue CRO expenses and clinical trial study expenses based on services performed and rely on estimates of those costs applicable to the stage of completion of a study as provided by the CRO. Accrued CRO costs are subject to revisions as such studies progress to completion. Revisions are charged to expense in the period in which the facts that give rise to the revision become known.
Earnings Per Share
We calculate earnings per share, or EPS, in accordance with ASC 260, Earnings Per Share, which requires the computation and disclosure of two EPS amounts, basic and diluted. We compute basic EPS based on the weighted average number of shares of common stock outstanding during the period. We compute diluted EPS based on the weighted average number of shares of common stock outstanding plus all potentially dilutive common shares outstanding during the period. Such potentially dilutive common shares consist of stock options and warrants. Potentially dilutive common shares totaling 21,773,002 and 18,884,154 at June 30, 2013 and 2012, respectively, have been excluded from the diluted earnings per share calculation as they are anti-dilutive due to the net loss reported by us.
Recently Issued and Newly Adopted Accounting Pronouncements
On July 18, 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit when a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (a consensus of the FASB Emerging Issues Task Force). The amendments in this ASU provide guidance on the financial statements presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. An unrecognized tax benefit should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward with certain exceptions, in which case such an unrecognized tax benefit should be presented in the financial statements as a liability. The amendments in this ASU do not require new recurring disclosures. The amendments in this ASU are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. The amendments in ASU No. 2013-11 are not expected to have an impact on our condensed consolidated financial statements.
Reclassifications
Certain 2012 amounts have been reclassified to conform to current year presentation. |
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- Definition
The entire disclosure for the basis of presentation and significant accounting policies concepts. Basis of presentation describes the underlying basis used to prepare the financial statements (for example, US Generally Accepted Accounting Principles, Other Comprehensive Basis of Accounting, IFRS). Accounting policies describe all significant accounting policies of the reporting entity. No definition available.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, vitaMed and BocaGreen. All material intercompany balances and transactions have been eliminated in consolidation.
Cash
We maintain cash at financial institutions and, at times, balances may exceed federally insured limits. We have never experienced any losses related to these balances. All of our non-interest bearing cash balances were fully insured at December 31, 2012 and 2011 due to a temporary federal program in effect from December 31, 2010 through December 31, 2012. Under the program, there is no limit to the amount of insurance for eligible accounts.
Beginning 2013, insurance coverage will revert to $250,000 per depositor at each financial institution, at which time our non-interest bearing cash balances may again exceed federally insured limits. We had no interest-bearing amounts on deposit in excess of federally insured limits at December 31, 2012 and 2011.
Trade Accounts Receivable and Allowance for Doubtful Accounts
Trade accounts receivable are customer obligations due under normal trade terms. We review accounts receivable for uncollectible accounts and credit card charge-backs and provide an allowance for doubtful accounts which is based upon a review of outstanding receivables, historical collection information, and existing economic conditions. We consider trade accounts receivable past due more than 90 days to be delinquent. We write-off delinquent receivables to bad debt expense based on individual credit evaluations, results of collection efforts, and specific circumstances of the customer. Recoveries of accounts previously written off are recorded as reductions of bad debt expense when received. Historically, our bad debt expense has been limited because the majority of our trade receivables are paid via credit card. To the extent data we use to calculate these estimates does not accurately reflect bad debts; adjustments to these reserves may be required. At December 31, 2012 and 2011, we recorded an allowance for doubtful accounts of $42,048 and $1,500, respectively.
Inventories
Inventories represent packaged nutritional products and supplements and raw materials which are valued at the lower of cost or market using the average cost method. The costs of manufacturing the prescription products associated with the deferred revenue (as discussed in Revenue Recognition) are recorded as deferred costs, which are included in inventory, until such time as the related deferred revenue is recognized.
Fixed Assets
Equipment-We state equipment at cost, net of accumulated depreciation. Maintenance costs, which do not significantly extend the useful lives of the respective assets, and repair costs are charged to operating expense as incurred. We compute depreciation using the straight-line method over the estimated useful lives of the related assets, which range from three to seven years. Depreciation expense totaled $19,904 and $23,962 for the years ended December 31, 2012 and 2011, respectively.
Leasehold Improvements-We state improvements at cost, net of accumulated depreciation. We compute depreciation using the straight-line method over the remaining term of the lease. Depreciation expense totaled $7,580 and 1,724 for the years ended December 31, 2012 and 2011, respectively.
Intangible Assets
Patent and Trademarks-We have adopted the provisions of Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 350 Intangible-Goodwill and Other (ASC 350). Capitalized patent costs, net of accumulated amortization, include legal costs incurred for a patent application. In accordance with ASC 350, once the patent is granted, we amortize the capitalized patent costs over the remaining life of the patent using the straight-line method. If the patent is not granted, we write-off any capitalized patent costs at that time. Intangible assets are reviewed annually for impairment or when events or circumstances indicate that their carrying amount may not be recoverable.
There was no amortization expense related to patent costs for the years ended December 31, 2012 and 2011 as patents have not yet been granted.
Website Costs-We expense costs incurred in the planning stage of a website, while costs incurred in the development stage are capitalized and amortized over the estimated three year life of the asset. Amortization of website development costs totaled $28,776 and $29,159 for the years ended December 31, 2012 and 2011, respectively.
Impairment of Long-Lived Assets
We review the carrying values of property and equipment and finite-lived intangible assets for impairment whenever events or changes in circumstances indicate that their carrying values may not be recoverable. Such events or circumstances include, but are not limited to, the following:
If impairment indicators are present, we determine whether an impairment loss should be recognized by testing the applicable asset or asset groups carrying value for recoverability. This test requires long-lived assets to be grouped at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities, the determination of which requires judgment. We estimate the undiscounted future cash flows expected to be generated from the use and eventual disposal of the assets and compare that estimate to the respective carrying values in order to determine if such carrying values are recoverable. This assessment requires the exercise of judgment in assessing the future use of and projected value to be derived from the eventual disposal of the assets to be held and used. Assessments also consider changes in asset utilization, including the temporary idling of capacity and the expected timing for placing this capacity back into production. If the carrying value of the assets is not recoverable, then a loss is recorded for the difference between the assets fair value and respective carrying value. We determine the fair value of the assets using an income approach based upon a forecast of all the expected discounted future net cash flows associated with the subject assets. Some of the more significant estimates and assumptions include market size and growth, market share, projected selling prices, manufacturing cost, and discount rate. We base estimates upon historical experience, our commercial relationships, market conditions, and available external information about future trends. We believe our current assumptions and estimates are reasonable and appropriate; however, unanticipated events and changes in market conditions could affect such estimates, resulting in the need for an impairment charge in future periods.
Fair Value of Financial Instruments
Our financial instruments consist primarily of receivables, accounts payable, accrued expenses, and short-term debt. The carrying amount of receivables, accounts payable, and accrued expenses approximates their fair value because of the short-term maturity of such instruments and are considered Level 1 assets under the fair value hierarchy. Interest rates that are currently available to us for issuance of short and long-term debt with similar terms and remaining maturities are used to estimate the fair value of our short and long-term debt and would be considered Level 3 inputs under the fair value hierarchy.
We categorize our assets and liabilities that are valued at fair value on a recurring basis into a three-level fair value hierarchy as defined by ASC 820 Fair Value Measurements and Disclosures (ASC 820). The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets and liabilities (Level 1) and lowest priority to unobservable inputs (Level 3).
Assets and liabilities recorded in the consolidated balance sheet at fair value are categorized based on a hierarchy of inputs, as follows:
At December 31, 2012 and 2011, we had no assets or liabilities that were valued at fair value on a recurring basis.
Income Taxes
We account for income taxes under the asset and liability method. We recognize deferred tax assets and liabilities for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. We measure deferred tax assets and liabilities using enacted tax rates expected to apply to taxable income in the years in which the related temporary differences are expected to be recovered or settled. We recognize the effect on deferred tax assets and liabilities of a change in tax rates when the rate change is enacted. Valuation allowances are recorded to reduce deferred tax assets to the amount that will more likely than not be realized. In accordance with ASC 740, Income Taxes, we recognize the effect of uncertain income tax positions only if the positions are more likely than not of being sustained in an audit, based on the technical merits of the position. We measure recognized uncertain income tax positions using the largest amount that has a likelihood of being realized that is greater than 50%. Changes in recognition or measurement are reflected in the period in which those changes in judgment occur. We recognize both interest and penalties related to uncertain tax positions as part of the income tax provision. As of December 31, 2012 and 2011, we had no tax positions relating to open tax returns that were considered to be uncertain.
Stock Based Compensation
In December 2004, the FASB issued ASC 718, Compensation Stock Compensation (ASC 718). Under ASC 718 companies are required to measure the compensation costs of unit-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which employees are required to provide services. Unit-based compensation arrangements include unit options, restricted share plans, performance-based awards, share appreciation rights, and employee share purchase plans. As such, compensation cost is measured on the date of grant at fair value. Such compensation amounts, if any, are amortized over the respective vesting periods of the option grant. We use the Black-Scholes option pricing model that requires the input of highly complex and subjective variables including the expected life of options granted and our expected stock price volatility over a period equal to or greater than the expected life of the options.
Equity instruments (instruments) issued to other than employees are recorded on the basis of the fair value of the instruments, as required by ASC 718. FASB ASC 505, Equity Based Payments to Non-Employees defines the measurement date and recognition period for such instruments. In general, the measurement date is when either (a) a performance commitment, as defined, is reached or (b) the earlier of (i) the non-employee performance is complete or (ii) the instruments are vested. The measured value related to the instruments is recognized over a period based on the facts and circumstances of each particular grant as defined in ASC 505.
We recognize compensation expense for all share-based payments granted based on the grant date fair value estimated in accordance with ASC 718-10, Share Based Payments. Compensation expense is generally recognized on a straight-line basis over the employees requisite service period.
Debt Discounts
Costs incurred with parties that are providing long-term financing, which include warrants issued with the underlying debt, are reflected as a debt discount based on the relative fair value of the debt and warrants to the total proceeds. These discounts are generally amortized over the life of the related debt using the effective interest rate method. In connection with debt issued during the years ended December 31, 2012 and 2011, we recorded debt discounts totaling $2,706,920 and $28,719, respectively. The aggregate balance of unamortized debt discount at December 31, 2012 and 2011 was $1,102,680 and $0, respectively. Amortization expense related to debt discounts totaled $1,604,240 and $28,719 for the years ended December 31, 2012 and 2011, respectively, and is included in amortization of debt discount on the accompanying consolidated financial statements.
Revenue Recognition
We recognize revenue on arrangements in accordance with ASC 605, Revenue Recognition. We recognize revenue only when the price is fixed or determinable, persuasive evidence of an arrangement exists, the service is performed, and collectability is reasonably assured.
Over The Counter Products
We generate OTC revenue by sales of products primarily to retail consumers. Our policy is to recognize revenue from product sales upon shipment, when the rights of ownership and risk of loss have passed to the consumer. Outbound shipping and handling fees are included in sales and are billed upon shipment. Shipping expenses are included in cost of sales. The majority of our sales are paid with credit cards, and we usually receive the cash settlement in two to three banking days. Credit card sales minimize accounts receivable balances relative to sales. We provide an unconditional 30-day money-back return policy under which we accept product returns from our retail and eCommerce customers. We recognize our revenue from OTC sales net of returns, sales discounts, and eCommerce fees.
For the years ended December 31, 2012 and 2011, we recorded an allowance for returns of $27,168 and $0, respectively. We estimate the allowance for returns based on historical return activity, which is reviewed, and adjusted if necessary, on a quarterly basis.
Prescription Products
We sell our name brand and generic prescription products primarily through drug wholesalers and retail pharmacies. We recognize revenue from prescription product sales, net of sales discounts and end-user rebates.
We accept returns of unsalable product from customers within a return period of six months prior to and following product expiration. Our prescription products currently have a shelf-life of 24 months from date of manufacture. Given the limited history of prescriptions products, we currently cannot reliably estimate expected returns of the prescription products at the time of shipment. Accordingly, we defer recognition of revenue on prescription products until the right of return no longer exists, which occurs at the earlier of the time the prescription products are dispensed through patient prescriptions or expiration of the right of return. As a result of this policy, we had a deferred revenue balance of $1,144,752 and $0 at December 31, 2012 and 2011, respectively.
We maintain various rebate programs in an effort to maintain a competitive position in the marketplace and to promote sales and customer loyalty. The rebate program is designed to enable the end-user to return a coupon to us. If the coupon qualifies, we send a rebate check to the end-user. We estimate the allowance for rebates based on industry averages, which is reviewed, and adjusted if necessary, on a quarterly basis. For the years ended December 31, 2012 and 2011, we recorded reduction to income for rebates of $34,255 and $0, respectively.
Shipping and Handling Costs
We expense all shipping and handling costs as incurred. These costs are included in cost of sales on the accompanying consolidated financial statements.
Advertising Costs
We expense advertising costs when incurred. Advertising expenses totaled $65,944 and $19,408 during the years ended December 31, 2012 and 2011, respectively.
Research and Development Expenses
Research and development expenditures, which are expensed as incurred, totaled $4,492,362 and $107,241 during the years ended December 31, 2012 and 2011, respectively.
Earnings Per Share
We calculate earnings per share (EPS) in accordance with ASC 260, Earnings Per Share, which requires the computation and disclosure of two EPS amounts, basic and diluted. We compute basic EPS based on the weighted average number of shares of Common Stock outstanding during the period. We compute diluted EPS based on the weighted average number of shares of Common Stock outstanding plus all potentially dilutive common shares outstanding during the period. Such potential dilutive common shares consist of stock options and warrants. Potential common shares totaling 25,926,987 and 13,639,845 at December 31, 2012 and 2011, respectively, have been excluded from the diluted earnings per share calculation as they are anti-dilutive due to the net loss reported by us.
Use of Estimates
Our financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). The preparation of these financial statements requires us to make significant estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosure of contingent assets and liabilities. We evaluate our estimates, including those related to contingencies, on an ongoing basis. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
Recently Issued Accounting Pronouncements
In July 2012, FASB issued Accounting Standards Update (ASU) No. 2012-02, Testing Indefinite-Lived Intangible Assets for Impairment (ASU 2012-02). ASU 2012-02 gives entities an option to first assess qualitative factors to determine whether the existence of events and circumstances indicate that it is more likely than not that the indefinite-lived intangible asset impaired. If based on its qualitative assessment an entity concludes that it is more likely than not that the fair value of an indefinite lived intangible asset is less than its carrying amount, quantitative impairment testing is required. However, if an entity concludes otherwise, quantitative impairment testing is not required. ASU 2012-02 is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012, with early adoption permitted. ASU 2012-02 is not expected to have a material impact on our financial position or results of operations.
In December 2011, the FASB issued ASU No. 2011-11, Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities (ASU 2011-11). ASU 2011-11 enhances current disclosures about financial instruments and derivative instruments that are either offset on the statement of financial position or subject to an enforceable master netting arrangement or similar agreement, irrespective of whether they are offset on the statement of financial position. Entities are required to provide both net and gross information for these assets and liabilities in order to facilitate comparability between financial statements prepared in conformity with U.S. GAAP and financial statements prepared on the basis of International Financial Reporting Standards (IFRS). ASU 2011-11 is effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. ASU 2011-11 is not expected to have a material impact on our financial position or results of operations.
In September 2011, the FASB issued ASU No. 2011-08 Intangibles Goodwill & Other (ASU 2011-08), which updates the guidance in Accounting Standards Codification (ASC) Topic 350, Intangibles Goodwill & Other (ACS Topic 350). The amendments in ASU 2011-08 permit an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than the carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test described in ASC Topic 350. The more-likely-than-not threshold is defined as having a likelihood of more than fifty percent. If, after assessing the totality of events or circumstances, an entity determines that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step impairment test is unnecessary. The amendments in ASU 2011-08 include examples of events and circumstances that an entity should consider in evaluating whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. However, the examples are not intended to be all-inclusive and an entity may identify other relevant events and circumstances to consider in making the determination. The examples in this ASU 2011-08 supersede the previous examples under ASC Topic 350 of events and circumstances an entity should consider in determining whether it should test for impairment between annual tests, and also supersede the examples of events and circumstances that an entity having a reporting unit with a zero or negative carrying amount should consider in determining whether to perform the second step of the impairment test. Under the amendments in ASU 2011-08, an entity is no longer permitted to carry forward its detailed calculation of a reporting units fair value from a prior year as previously permitted under ASC Topic 350. ASU 2011-08 is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. The adoption of ASU 2011-08 did not have a material impact on our financial position or results of operations.
In May 2011, the FASB issued ASU 2011-04 (ASU 2011-04), which updated the guidance in ASC Topic 820, Fair Value Measurement. The amendments in ASU 2011-04 generally represent clarifications of Topic 820, but also include some instances where a particular principle or requirement for measuring fair value or disclosing information about fair value measurements has changed. ASU 2011-04 results in common principles and requirements for measuring fair value and for disclosing information about fair value measurements in accordance with U.S. GAAP and IFRS. The amendments in ASU 2011-04 are to be applied prospectively. For public entities, the amendments are effective for interim and annual periods beginning after December 15, 2011. The adoption of ASU 2011-04 did not have a material impact on our financial position or results of operations.
We do not believe there would have been a material effect on the accompanying financial statements had any other recently issued, but not yet effective, accounting standards been adopted in the current period.
Reclassifications
Certain 2011 amounts have been reclassified to conform to current year presentation. |
NOTE B – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All material intercompany balances and transactions have been eliminated in consolidation.
Cash and Cash Equivalents
Cash is maintained at financial institutions and, at times, balances may exceed federally insured limits. The Company has never experienced any losses related to these balances. All of our non-interest bearing cash balances were fully insured at December 31, 2011 and 2010 due to a temporary federal program in effect from December 31, 2010 through December 31, 2012. Under the program, there is no limit to the amount of insurance for eligible accounts. Beginning 2013, insurance coverage will revert to $250,000 per depositor at each financial institution, and our non-interest bearing cash balances may again exceed federally insured limits. The Company had no interest-bearing amounts on deposit excess of federally insured limits at December 31, 2011 and 2010.
Trade Accounts Receivable and Allowance for Doubtful Accounts
Trade accounts receivable are customer obligations due under normal trade terms. The Company reviews the accounts receivable for uncollectible accounts and credit card charge-backs and provides an allowance for doubtful accounts which is based upon a review of outstanding receivables, historical collection information and existing economic conditions. Trade accounts receivable past due more than 90 days are considered delinquent. Delinquent receivables are written off to bad debt expense based on individual credit evaluations, results of collection efforts, and specific circumstances of the customer. Recoveries of accounts previously written off are recorded as reductions of bad debt expense when received. Historically, our bad debt expense has been limited because the majority of our trade receivables are paid via credit card. Data we use to calculate these estimates does not accurately reflect bad debts; adjustments to these reserves may be required. At December 31, 2011 and 2010, the Company recorded an allowance for doubtful accounts of $1,500 and $0, respectively.
Inventories
Inventories represent packaged nutritional products and supplements which are valued at the lower of cost or market using the average cost method.
Fixed Assets
Property and Equipment-Property and equipment is stated at cost, net of accumulated depreciation. Maintenance costs, which do not significantly extend the useful lives of the respective assets, and repair costs are charged to operating expense as incurred. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets, which range from 3 to 7 years. Depreciation expense totaled $25,686 and $5,105 for the years ended December 31, 2011 and 2010, respectively.
Website-Costs incurred in the planning stage of a website are expensed, while costs incurred in the development stage are capitalized and amortized over the estimated three-year life of the asset. Amortization of website development costs totaled $29,159 and $17,678 for the years ended December 31, 2011 and 2010, respectively.
Intangible Assets
The Company has adopted the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification 350 Intangible-Goodwill and Other (“ASC 350”).
Capitalized patent costs, net of accumulated amortization, include legal costs incurred for a patent application. In accordance with ASC 350, once the patent is granted, the Company will amortize the capitalized patent costs over the remaining life of the patent using the straight-line method. If the patent is not granted, the Company will write-off any capitalized patent costs at that time. Intangible assets are reviewed annually for impairment or when events or circumstances indicate that their carrying amount may not be recoverable. There was no amortization expense related to patent costs for the years ended December 31, 2011 and 2010 as patents have not yet been granted.
Impairment of Long-Lived Assets
Carrying values of property and equipment and finite-lived intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that their carrying values may not be recoverable. Such events or circumstances include, but are not limited to:
If
impairment indicators are present, the Company determines whether an impairment loss should be recognized by testing the
applicable asset or asset group’s carrying value for recoverability. This test requires long-lived assets to
be grouped at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets
and liabilities, the determination of which requires judgment. The Company estimates the undiscounted future cash
flows expected to be generated from the use and eventual disposal of the assets and compares that estimate to the respective
carrying values in order to determine if such carrying values are recoverable. This assessment requires the
exercise of judgment in assessing the future use of and projected value to be derived from the eventual disposal of the
assets to be held and used. Assessments also consider changes in asset utilization, including the temporary idling
of capacity and the expected timing for placing this capacity back into production. If the carrying value of the
assets is not recoverable, then a loss is recorded for the difference between the assets’ fair value and respective
carrying value. The fair value of the assets is determined using an “income approach” based upon a
forecast of all the expected discounted future net cash flows associated with the subject assets. Some of the more
significant estimates and assumptions include: market size and growth, market share, projected selling prices, manufacturing
cost and discount rate. The Company’s estimates are based upon its historical experience, its commercial
relationships, market conditions and available external information about future trends. The Company believes its
current assumptions and estimates are reasonable and appropriate; however, unanticipated events and changes in market
conditions could affect such estimates, resulting in the need for an impairment charge in future periods.
Fair Value of Financial Instruments
The Company’s financial instruments consist primarily of receivables, accounts payable, accrued expenses and short-term debt. The carrying amount of receivables, accounts payable and accrued expenses approximates its fair value because of the short-term maturity of such instruments. Interest rates that are currently available to the Company for issuance of short-term debt with similar terms and remaining maturities are used to estimate the fair value of the Company’s short-term debt.
Fair Value of Financial Instruments (continued)
The Company categorizes its assets and liabilities that are valued at fair value on a recurring basis into a three-level fair value hierarchy as defined by ASC 820 “Fair Value Measurements and Disclosures” (“ASC 820”). The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets and liabilities (Level 1) and lowest priority to unobservable inputs (Level 3).
Assets and liabilities recorded in the consolidated balance sheet at fair value are categorized based on a hierarchy of inputs, as follows:
Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities;
Level 3 Unobservable inputs for the asset or liability.
At December 31, 2011 and 2010, the Company had no assets or liabilities that are valued at fair value on a recurring basis.
Income Taxes
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the related temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized when the rate change is enacted. Valuation allowances are recorded to reduce deferred tax assets to the amount that will more likely than not be realized. In accordance with ASC 740, Income Taxes, the Company recognizes the effect of uncertain income tax positions only if the positions are more likely than not of being sustained in an audit, based on the technical merits of the position. Recognized uncertain income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which those changes in judgment occur. The Company recognizes both interest and penalties related to uncertain tax positions as part of the income tax provision. As of December 31, 2011 and 2010, the Company has no tax positions relating to open tax returns that were considered to be uncertain.
In December 2004, the FASB issued ASC 718, Compensation – Stock Compensation (“ASC 718”). ASC 718 companies are required to measure the compensation costs of unit-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which employees are required to provide services. Unit-based compensation arrangements include unit options, restricted share plans, performance-based awards, share appreciation rights and employee share purchase plans. As such, compensation cost is measured on the date of grant at their fair value. Such compensation amounts, if any, are amortized over the respective vesting periods of the option grant. The Company uses the Black-Scholes option pricing model which requires the input of highly complex and subjective variables including the expected life of options granted and the Company’s expected stock price volatility over a period equal to or greater than the expected life of the options.
Equity instruments (“instruments”) issued to other than employees are recorded on the basis of the fair value of the instruments, as required by ASC 718. FASB ASC 505, Equity Based Payments to Non-Employees defines the measurement date and recognition period for such instruments. In general, the measurement date is when either a (a) performance commitment, as defined, is reached or (b) the earlier of (i) the non-employee performance is complete or (ii) the instruments are vested. The measured value related to the instruments is recognized over a period based on the facts and circumstances of each particular grant as defined in the ASC.
The Company recognizes compensation expense for all share-based payments granted based on the grant date fair value estimated in accordance with ASC 718-10, “Share Based Payments.” Compensation expense is generally recognized on a straight-line basis over the employee’s requisite service period.
Debt Discounts
Costs incurred with parties who are providing long-term financing, which include warrants issued with the underlying debt, are reflected as a debt discount based on the relative fair value of the debt and warrants to the total proceeds. These discounts are generally amortized over the life of the related debt using the effective interest rate method. In connection with debt issued during the years ended December 31, 2011 and 2010, the Company recorded debt discounts totaling $28,719 and $0, respectively. Amortization expense related to debt discounts totaled $28,719 and $0 for the years ended December 31, 2011 and 2010, respectively, and is included in interest expense on the accompanying consolidated financial statements. Debt discount was fully amortized at December 31, 2011.
Revenue Recognition
The Company recognizes revenue on arrangements in accordance with ASC 605, “Revenue Recognition” (“ASC 605”). Revenue is recognized only when the price is fixed or determinable, persuasive evidence of an arrangement exists, the service is performed and collectability is reasonably assured. The Company generates revenue by sales of products primarily to retail consumers. The Company’s policy is to recognize revenue from product sales upon shipment, when the rights of ownership and risk of loss have passed to the consumer. Outbound shipping and handling fees are included in sales and are billed upon shipment. Shipping expenses are included in cost of sales. The majority of the Company’s sales are paid with credit cards and the Company usually receives the cash settlement in two to three banking days. Credit card sales minimize accounts receivable balances relative to sales. We provide an unconditional thirty-day money-back return policy whereby we accept product returns from our retail, wholesale and eCommerce customers. Historically we have experienced returns (monitored on a daily basis) equal to approximately one percent of sales. Total returns were $20,726 and $13,734 for the years ended December 31, 2011 and 2010, respectively. We consider the potential returns to be de minimis and have not established an allowance for product returns at this time.
Shipping and Handling Costs
The Company expenses all shipping and handling costs as incurred. These costs are included in cost of sales on the accompanying consolidated financial statements.
Advertising Costs
The Company expenses advertising costs when incurred. Advertising expenses totaled $19,408 and $25,698 during the years ended December 31, 2011 and 2010, respectively.
Research and Development Expenses
Research and development expenditures, which are expensed as incurred, totaled $107,241 and $65,402 during the years ended December 31, 2011 and 2010, respectively.
Earnings Per Share
The Company calculates earnings per share (“EPS”) in accordance with ASC 260, “Earnings Per Share,” which requires the computation and disclosure of two EPS amounts, basic and diluted. Basic EPS is computed based on the weighted average number of shares of common stock outstanding during the period. Diluted EPS is computed based on the weighted average number of common shares outstanding plus all potentially dilutive common shares outstanding during the period. Such potential dilutive common shares consist of stock options and warrants. Potential common shares totaling 96,618,626 and 165,752 (Reverse Split shares) at December 31, 2011 and 2010, respectively, have been excluded from the diluted earnings per share calculation as they are anti-dilutive due to the net loss reported by the Company.
Use of Estimates
The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make significant estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosure of contingent assets and liabilities. We evaluate our estimates, including those related to contingencies, on an ongoing basis. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
Recently Issued Accounting Pronouncements
In December 2011, FASB issued Accounting Standards Update (“ASU”) 2011-11, Balance Sheet - Offsetting. This guidance requires disclosures about offsetting and related arrangements for recognized financial instruments and derivative instruments. The standard is effective for us as of January 1, 2013 and will not materially impact our financial statement disclosures.
In September 2011, the FASB issued ASU 2011-08, “Testing Goodwill for Impairment.” This guidance provides the option to evaluate prescribed qualitative factors to determine whether a calculated goodwill impairment test is necessary. The standard is effective for us as of January 1, 2012 and will not materially impact on our financial condition, results of operations, or financial statement disclosures.
In May 2011, FASB issued ASU 2011-05, Comprehensive Income: Presentation of Comprehensive Income, to allow an entity the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In both choices, an entity is required to present each component of net income along with total net income, each component of other comprehensive income along with a total for other comprehensive income, and a total amount for comprehensive income. ASU 2011-05 eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders’ equity. The amendments do not change the guidance regarding the items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income. The amendments should be applied retrospectively and is effective for fiscal years and interim periods within those years beginning after December 15, 2011. Early adoption is permitted. The adoption is not expected to have a material impact on the Company’s results of operations, financial position or cash flows.
In May 2011, the FASB issued ASU 2011-04, Fair Value Measurement: Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. This ASU represents the converged guidance of the FASB and the IASB (the “Boards”) on fair value measurement, and results in common requirements for measuring fair value and for disclosing information about fair value measurements, including a consistent meaning of the term “fair value.” These amendments change some of the terminology used to describe many of the existing requirements in U.S. GAAP for measuring fair value and for disclosing information about fair value measurements. The amendments should be applied prospectively, and they are effective during interim and annual periods beginning after December 15, 2011. Early application by public entities is not permitted. The adoption is not expected to have a material impact on the Company’s results of operations, financial position or cash flows.
Management does not believe there would be a material effect on the accompanying financial statements had any other recently issued but not yet effective accounting standards been adopted in the current period.
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GOING CONCERN
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Dec. 31, 2012
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Dec. 31, 2011
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GOING CONCERN | NOTE 3 GOING CONCERN
The accompanying financial statements have been prepared assuming that our company will continue as a going concern. For the year ended December 31, 2012, we incurred a loss from operations of approximately $16 million and had negative cash flow from operations of approximately $13 million. Accumulated deficit as of December 31, 2012 was approximately $52 million. These matters raise substantial doubt about our ability to continue as a going concern. Our plans include raising additional proceeds from debt and equity transactions and to continue to increase our sales and marketing activities; however, there are no assurances that we will be successful in these efforts. On March 7, 2013 we filed a Prospectus Supplement for an underwritten public offering of our common stock with anticipated gross proceeds of $50 million. The securities being offered by us are pursuant to a shelf registration statement previously filed with the Securities and Exchange Commission (the SEC) on January 25, 2013, which the SEC declared effective on February 5, 2013. The financial statements do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation. |
NOTE C – GOING CONCERN
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company incurred a loss from operations of approximately $5,400,000, had negative cash flow from operations of approximately $5,000,000 and had an accumulated deficit of approximately $17,000,000 at December 31, 2011. These matters raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans include raising additional proceeds from debt and equity transactions and to continue to increase its sales and marketing activities; however, there are no assurances that management will be successful in their efforts. The financial statements do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should the Company be unable to continue in operation.
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Disclosure of accounting policy for reporting when there is a substantial doubt about an entity's ability to continue as a going concern for a reasonable period of time (generally a year from the balance sheet date). Disclose: (a) pertinent conditions and events giving rise to the assessment of substantial doubt about the entity's ability to continue as a going concern for a reasonable period of time, (b) the possible effects of such conditions and events, (c) management's evaluation of the significance of those conditions and events and any mitigating factors, (d) possible discontinuance of operations, (e) management's plans (including relevant prospective financial information), and (f) information about the recoverability or classification of recorded asset amounts or the amounts or classification of liabilities. If management's plans alleviate the substantial doubt about the entity's ability to continue as a going concern, disclosure of the principal conditions and events that initially raised the substantial doubt about the entity's ability to continue as a going concern would be expected to be considered. Disclose whether operations for the current or prior years generated sufficient cash to cover current obligations, whether waivers were obtained from creditors relating to the company's default under the provisions of debt agreements and possible effects of such conditions and events, such as: whether there is a possible need to obtain additional financing (debt or equity) or to liquidate certain holdings to offset future cash flow deficiencies. Disclose appropriate parent company information when parent is dependent upon remittances from subsidiaries to satisfy its obligations. No definition available.
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INVENTORY
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INVENTORY | NOTE 3 – INVENTORY
Inventory consists of the following:
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NOTE 4 INVENTORY
Inventory consists of the following:
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The entire disclosure for inventory. This may include, but is not limited to, the basis of stating inventory, the method of determining inventory cost, the major classes of inventory, and the nature of the cost elements included in inventory. If inventory is stated above cost, accrued net losses on firm purchase commitments for inventory and losses resulting from valuing inventory at the lower-of-cost-or-market may also be included. For LIFO inventory, may disclose the amount and basis for determining the excess of replacement or current cost over stated LIFO value and the effects of a LIFO quantities liquidation that impacts net income. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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OTHER CURRENT ASSETS
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OTHER CURRENT ASSETS | NOTE 4 – OTHER CURRENT ASSETS
Other current assets consist of the following:
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NOTE 5 OTHER CURRENT ASSETS
Other current assets consist of the following:
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NOTE F – OTHER CURRENT ASSETS
Other current assets consist of the following:
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FIXED ASSETS
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FIXED ASSETS | NOTE 5 – FIXED ASSETS
Fixed assets consist of the following:
Depreciation expense for the six months ended June 30, 2013 and 2012 was $12,084 and $15,141, respectively. |
NOTE 6 FIXED ASSETS
Fixed assets consist of the following:
Depreciation expense for the years ended December 31, 2012 and 2011 was $27,484 and $25,686, respectively. |
NOTE G – FIXED ASSETS
Fixed assets consist of the following:
Depreciation expense for the years ended December 31, 2011 and 2010 was $54,845 and $22,783, respectively.
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The entire disclosure for long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale. Examples include land, buildings, machinery and equipment, and other types of furniture and equipment including, but not limited to, office equipment, furniture and fixtures, and computer equipment and software. This disclosure may include property plant and equipment accounting policies and methodology, a schedule of property, plant and equipment gross, additions, deletions, transfers and other changes, depreciation, depletion and amortization expense, net, accumulated depreciation, depletion and amortization expense and useful lives, income statement disclosures, assets held for sale and public utility disclosures. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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INTANGIBLE ASSETS
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INTANGIBLE ASSETS | NOTE 7 INTANGIBLE ASSETS
Other assets consist of the following:
Amortization expense for the years ended December 31, 2012 and 2011 was $28,776 and $29,159, respectively |
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OTHER ASSETS
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OTHER ASSETS | NOTE 6 – OTHER ASSETS
Prepaid expense consists of the following:
Intangible assets consist of the following:
Amortization expense for the six months ended June 30, 2013 and 2012 was $6,509 and $13,972, respectively. |
NOTE H – OTHER ASSETS
Other assets consist of the following:
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OTHER CURRENT LIABILITIES
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OTHER CURRENT LIABILITIES | NOTE 7 – OTHER CURRENT LIABILITIES
Other current liabilities consist of the following:
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(1) In June 2008, the Company declared and paid a special dividend of $0.40 per share of common stock to all stockholders of record as of June 10, 2008. This amount reflects unclaimed dividends by certain stockholders.
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NOTE 8 OTHER CURRENT LIABILITIES
Other current liabilities consist of the following:
(1) In June 2008, we declared and paid a special dividend of $0.40 per share of common stock to all shareholders of record as of June 10, 2008. This amount reflects moneys remaining unclaimed by certain shareholders. |
NOTE J – OTHER CURRENT LIABILITIES
Other current liabilities consist of the following:
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NOTES PAYABLE
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NOTES PAYABLE | NOTE 8 – NOTES PAYABLE
Issuance and Payment of Multiple Advance Revolving Credit Note
On January 31, 2013, we entered into a business loan agreement with Plato and Associates, LLC, a Florida limited liability company, or Plato, for a Multiple Advance Revolving Credit Note, or the Plato Note. The Plato Note allows us to draw down funding up to the $10 million maximum principal amount, at a stated interest rate of 6% per annum. Plato may make advances to us from time to time under the Plato Note at our request, which advances will be of a revolving nature and may be made, repaid, and made from time to time. Interest payments shall be due and payable on the tenth day following the end of each calendar quarter in which any interest is accrued and unpaid, commencing on April 10, 2013, and the principal balance outstanding under the Plato Note, together with all accrued interest and other amounts payable under the Plato Note, if any, will be due and payable on February 24, 2014. The Plato Note is secured by substantially all of our assets. On each of February 25 and March 13, 2013, $200,000 was drawn against the Plato Note. On March 21, 2013, we repaid $401,085, including accrued interest, and as of June 30, 2013, there was no balance outstanding under the Plato Note.
As additional consideration for the Plato Note, we issued Plato a warrant to purchase 1,250,000 shares of our common stock at an exercise price $3.20 per share (see NOTE 9 – STOCKHOLDERS’ EQUITY for more details).
Borrowing Under Amended Bank LOC
In February 2013, we borrowed $100,000 from First United Bank under the Amended Bank LOC. The Amended Bank LOC required a personal guarantee and cash collateral limited to $100,000 which was provided by Reich Family Limited Partnership, or Reich Family LP, an entity controlled by Mitchell Krassan, an officer of the Company. On April 25, 2013, we paid the principal and interest due under the Amended Bank LOC of $100,735. On May 1, 2013, the Amended Bank LOC expired and was not renewed. Accordingly, the personal guarantee was canceled and the cash collateral was refunded to Reich Family LP.
Issuance of Promissory Notes
In January and February 2012, we sold 6% promissory notes for an aggregate of $900,000 with due dates of March 1, 2012. As discussed below in Issuance and Settlement of February 2012 Notes, these promissory notes were modified on February 24, 2012 through the issuance of secured promissory notes, or the February 2012 Notes.
Issuance and Settlement of February 2012 Notes
On February 24, 2012, we issued the February 2012 Notes to an individual and an entity, or the Parties, both of which are our stockholders, in the principal base amount of $1,358,014 and $1,357,110, respectively, and granted warrants for the purchase in the aggregate of 9,000,000 shares of our common stock, or the February 2012 Warrants, pursuant to the terms of a Note Purchase Agreement, also dated February 24, 2012. As consideration for the February 2012 Notes and the February 2012 Warrants, we received an aggregate of $1,000,000 of new funding from the Parties and the Parties surrendered certain promissory notes previously issued by us in the aggregate amount of $1,700,000 plus accrued interest of $15,124. Under the February 2012 Notes, the Parties loaned us an additional $3,000,000 during March, April, and May 2012.
On June 19, 2012, we settled $3,102,000 in principle and interest of the February 2012 Notes in exchange for the exercise of 8,145,486 warrants. As discussed below in Issuance and Payment of June 2012 Notes, the remaining balance of $2,691,847 of the February 2012 Notes was modified on June 19, 2012 through the issuance of secured promissory notes, or the June 2012 Notes, (see NOTE 9 – STOCKHOLDERS’ EQUITY, Warrants Issued in Connection with Debt, for more details).
Issuance and Payment of June 2012 Notes
On June 19, 2012, we issued the June 2012 Notes to the Parties in the principal base amounts of $2,347,128 and $2,344,719, respectively, pursuant to the terms of a note purchase agreement, or the June 2012 Note Purchase Agreement. As consideration for the June 2012 Notes, the Parties surrendered the remaining balance of the February 2012 Notes in the aggregate amount of $1,347,128 and $1,344,719, respectively (which sums included principle and interest through June 19, 2012), and we received an aggregate of $2,000,000 of new funding from the Parties (the “June Funding”). The principal base amount of each of the June 2012 Notes, plus any additional advance made to us thereafter, together with accrued interest at the annual rate of 6%, was due in one lump sum payment on February 24, 2014. As security for our obligations under the June 2012 Note Purchase Agreement and the June 2012 Notes, we entered into a security agreement and pledged all of our assets, tangible and intangible, as further described therein. We also granted warrants to purchase an aggregate of 7,000,000 shares of our common stock in connection with the June Funding. On March 21, 2013, we repaid $4,882,019 including accrued interest, leaving a balance of $21,595 in accrued interest as of March 31, 2013 related to the June 2012 Notes. On April 25, 2013, the balance of accrued interest was paid in full. |
NOTE 9 NOTES PAYABLE
Issuance of Promissory Notes
In January and February 2012, we issued 6% promissory notes for an aggregate of $900,000 with due dates of March 1, 2012. As discussed below, these promissory notes were modified on February 24, 2012 through the issuance of secured promissory notes (the February 2012 Notes).
In August and September 2012, we issued 6% promissory notes for an aggregate of $1,600,000 due on October 1, 2012, which due date was subsequently extended. The notes were paid in full in October 2012.
In September 2012, we issued a 6% promissory note for $200,000 due on October 15, 2012. The note was paid in full in October 2012.
Issuance of February 2012 Notes
On February 24, 2012, we issued and sold the February 2012 Notes to an individual and an entity (the Parties), both of which are stockholders of our company, in the principal amount of $1,358,014 and $1,357,110 respectively (the Principal Base Amount(s)) and granted Warrants for the purchase in the aggregate of 9,000,000 shares of our Common Stock (4,500,000 to each Party) (the February 2012 Warrants) pursuant to the terms of a Note Purchase Agreement (the Note Purchase Agreement) also dated February 24, 2012. As consideration for the February 2012 Notes and the February 2012 Warrants, we received an aggregate of $1,000,000 of new funding from the Parties (the February Funding), and the Parties surrendered certain promissory notes previously issued by us in the amount of $1,700,000 plus accrued interest of $15,124 (collectively known as the Prior Notes).
We granted 5,685,300 Warrants in consideration of the modification of the Prior Notes and 3,314,700 Warrants with the February Funding. We determined that the resulting modification of the Prior Notes was substantial in accordance with ASC 470-50, Modifications and Extinguishments. As such the modification was accounted for as an extinguishment and restructuring of the debt, and the 5,685,300 warrants issued in consideration of the modification were expensed. The fair value of the Prior Notes was estimated by calculating the present value of the future cash flows discounted at a market rate of return for comparable debt instruments to be $1,517,741, resulting in a debt discount of $197,383 and recognized a loss on extinguishment of debt of $10,307,864, which represented the fair value of the 5,685,300 warrants net of the difference between the carrying amount of the Prior Notes and their fair value as of the date of the modification on the accompanying consolidated financial statements.
We determined the relative fair value of the 3,314,700 Warrants granted with the February Funding to be $859,647 and recorded the amount as debt discount to be amortized over the term of the February 2012 Notes. As a result of the surrender of the February 2012 Notes on June 19, 2012 (see Issuance of June 2012 Notes below), we expensed the remaining unamortized debt discount. As of December 31, 2012, we recorded amortization of debt discount totaling $859,647 related to the February 2012 Notes on the accompanying consolidated financial statements.
Under the February 2012 Notes, the Parties loaned us an additional $3,000,000 during March, April, and May 2012.
On June 19, 2012, we settled $3,102,000 in principal and interest of the February 2012 Notes in exchange for the exercise of 8,145,486 Common Stock purchase warrants. As discussed below, the remaining balance of $2,691,847 of the February 2012 Notes was modified on June 19, 2012 through the issuance of secured promissory notes (the June 2012 Notes).
Issuance of June 2012 Notes
On June 19, 2012, we issued and sold secured promissory notes (the June 2012 Notes) to the Parties in the principal base amounts of $2,347,128 and $2,344,719, respectively pursuant to the terms of a note purchase agreement (the June 2012 Note Purchase Agreement). As consideration for the June 2012 Notes, the Parties surrendered the remaining balance of the February 2012 Notes in the aggregate amount of $1,347,128 and $1,344,719, respectively (which sums included principal and interest through June 19, 2012), and we received an aggregate of $2,000,000 of new funding from the Parties (the June Funding). The principal amount of each of the June 2012 Notes, plus any additional advance made to us thereafter, together with accrued interest at the annual rate of 6%, is due in one lump sum payment on February 24, 2014. As security for our obligations under the June 2012 Note Purchase Agreement and the June 2012 Notes, we entered into a Security Agreement and pledged all of our assets, tangible and intangible, as further described therein. We granted 7,000,000 Common Stock purchase warrants in connection with the June Funding.
We determined the relative fair value of the 7,000,000 Common Stock purchase warrants to be $1,649,890 and recorded this amount as a debt discount to be amortized over the term of the June 2012 Notes. In conjunction with the February 2012 Notes and June 2012 Notes, as of December 31, 2012, we recorded an aggregate of $547,210, as amortization of debt discount on the accompanying consolidated financial statements. At December 31, 2012, we reported a notes payable balance of $3,589,167, net of debt discount of $1,102,680 in long-term liabilities on the accompanying consolidated financial statements.
Issuance of Other Promissory Notes During 2011
On March 1, 2011, we entered into a Demand Promissory Note with our then majority stockholder wherein we could periodically borrow funds to satisfy our operational requirements. Interest accrued at 20% per annum. On October 4, 2011, this Demand Promissory Note plus accrued interest totaling $170,152 was forgiven. The forgiveness of this related party debt was included in additional paid in capital on the accompanying financial statements.
In November and December, 2011, we sold 6% Promissory Notes for an aggregate of $800,000 with due dates of March 1, 2012. At December 31, 2011, the outstanding principle balance of the Promissory Notes was $800,000. As discussed above (See Issuance of February 2012 Notes, included in this Note 9) these Notes were paid in full on February 24, 2012 through the issuance of the February 2012 Notes.
Conversion of July 2011 Secured Notes
In July 2011, VitaMed sold two senior secured promissory notes (the Secured Notes) in the amount of $500,000 each and also entered into a security agreement under which VitaMed pledged all of its assets to secure the obligation. The Secured Notes bear interest at the rate of 6% per annum, are due on the one year anniversary thereof, and are convertible into shares of our Common Stock at our option. We may pay the Secured Notes by delivering such number of shares of our Common Stock as shall be determined by dividing the outstanding principal then due and owing by our Share Price. For purposes of the Secured Notes, the Share Price shall mean the lower of the most recent price at which we offered and sold shares of our Common Stock (not including any shares issued upon the exercise of options and/or warrants or upon the conversion of any convertible securities) or the five-day average closing bid price immediately preceding the date of conversion. On June 19, 2012, we and the Parties agreed to convert the Secured Notes, and according to the terms thereof, aggregated principal and interest through June 19, 2012 of $1,054,647 was converted at $0.38 per share into an aggregate of 2,775,415 shares of our Common Stock. This resulted in a beneficial conversion feature of $6,716,504 as recorded in other income and expense on the accompanying condensed consolidated financial statements. For the years ended December 31, 2012 and 2011, we recorded an aggregate of $33,204 and $21,453, respectively, as interest expense on the accompanying consolidated financial statements.
March 2011 Bank Line of Credit
In March 2011, VitaMed entered into a Business Loan Agreement and Promissory Note with First United Bank (1st United) for a $300,000 bank line of credit (the Bank LOC) for which personal guarantees and cash collateral were required. Personal guarantees and cash collateral limited to $100,000 each were provided by Robert Finizio and John Milligan, officers of VitaMed, and by Reich Family Limited Partnership,
an entity controlled by Mitchell Krassan, also an officer of VitaMed. In consideration for the personal guarantees and cash collateral, Common Stock purchase warrants for an aggregate of 613,713 shares were granted (see NOTE 10 for more details). The Bank LOC accrued interest at the rate of 3.02% per annum based on a year of 360 days and was due on March 1, 2012. We and 1st negotiated a one-year extension to the Bank LOC which was executed on March 19, 2012 (the Bank LOC Extension). The Bank LOC Extension accrues interest at the rate of 2.35% and is due on March 1, 2013. On November 13, 2012, the then outstanding balance of $299,220 was repaid in full and we and 1st United amended the Business Loan Agreement and Promissory Note to reflect a $100,000 bank line of credit (the Amended Bank LOC). In accordance with the Amended Bank LOC, the personal guarantees and cash collateral were removed for Mr. Finizio and Mr. Milligan. During the years ended December 31, 2012 and 2011, interest expense of $7,366 and $5,650, respectively, was paid and is included in interest expense on the accompanying consolidated financial statements. We have made no withdrawals against the Amended Bank LOC as of December 31, 2012.
Issuance of VitaMed Promissory Notes
In June 2011, VitaMed sold Promissory Notes (the VitaMed Promissory Notes) in the aggregate principal amount of $500,000. In consideration for the VitaMed Promissory Notes, Warrants for an aggregate of 613,718 shares were granted. The VitaMed Promissory Notes earn interest at the rate of 4% per annum and were due at the earlier of (i) the six month anniversary of the date of issuance and (ii) such time as VitaMed received the proceeds of a promissory note(s) issued in an amount of not less than $1,000,000 (the Funding). Upon the closing of the Funding in July 2011, as more fully described above in Conversion of July 2011 Secured Notes, two of the VitaMed Promissory Notes in the aggregate of $200,000 were paid in full. By mutual agreement, the remaining VitaMed Promissory Notes in the aggregate of $300,000 were extended. In October 2011, one of the VitaMed Promissory Notes for $50,000 was paid in full. Also in October 2011, by mutual agreement, VitaMed Promissory Notes in the aggregate of $100,000 were converted into 266,822 shares of our Common Stock at $0.38 per share, which represents the fair value of the shares on the date of conversion. In June 2012, a VitaMed Promissory Note held by an unaffiliated individual was paid in full including $2,160 in accrued interest. The remaining VitaMed Promissory Notes in the aggregate of $100,000 were extended to October 15, 2012 (one held by Mr. Milligan for $50,000 and one for $50,000 held by BF Investments, LLC (owned by Brian Bernick, a member of the board of directors of the Company). On October 4, 2012 these VitaMed Promissory Notes were paid in full including $5,341 in accrued interest.
In September and October 2011, VitaMed sold Convertible Promissory Notes (the VitaMed Convertible Notes) in the aggregate of $534,160. The VitaMed Convertible Notes earned interest at the rate of 4% per annum and were due December 1, 2011. On November 18, 2011, we and the VitaMed Convertible Noteholders entered into Debt Conversion Agreements and converted the principal and accrued interest of the VitaMed Convertible Notes into 1,415,136 shares of our Common Stock at $0.38 per share which represents the fair value of the shares on the date of conversion.
In December 2011, we issued 4% promissory notes to Mr. Finizio and Mr. Milligan and for an aggregate of $100,000 ($50,000 each) with original due dates of March 1, 2012. These promissory notes were extended by mutual agreement to June 1, 2012. In June 2012, the VitaMed Promissory Note held by Mr. Finizio was paid in full, including $888 in accrued interest. Mr. Milligans VitaMed Promissory Note was extended to October 15, 2012. On October 4, 2012 this VitaMed Promissory Notes was paid in full including $1,519 in accrued interest.
For the years ended December 31, 2012 and 2011, we recorded an aggregate of $6,344 and $2,390, respectively, as interest expense on the accompanying consolidated financial statements.
Conversion of 2010 Demand Promissory Note
During 2009, a non-affiliate business consultant (the Consultant) provided consulting services to us for $210,000. We issued the Consultant a demand promissory note for $210,000 dated November 9, 2010 (the November 2010 Note), which was subsequently assigned to non-affiliate entities (the Noteholders). On April 18, 2011, we and the Noteholders agreed that in exchange for the forbearance of the Noteholders not to make demand for repayment of the November 2010 Note for a minimum of 60 days, we would (i) cancel the November 2010 Note and (ii) issue two convertible promissory notes to the Noteholders in the principal amount of $105,000, each bearing interest at the rate of 6% per annum (the Convertible Notes). The Convertible Notes were due on demand any time after 60 days from the date of issuance (the Maturity Date). At the option of the Noteholders, the Convertible Notes could be converted into shares of our Common Stock at any time after the Maturity Date at a fixed conversion price of $0.0105 per share. The Conversion Price was not subject to adjustment at any time for any future stock split, stock combination, dividend or distribution of any kind. On October 18, 2011, we and the Noteholders entered into Debt Conversion Agreements and converted the principal of the Convertible Notes into 20,000,000 shares of our Common Stock valued at $7,600,000. The transaction was recorded as debt settlement expense on the accompanying financial statements. |
NOTE I – NOTES PAYABLE
During 2009, a non-affiliate business consultant (the “Consultant”) provided consulting services to the Company in the amount of $210,000 (the “Debt”). The Company issued the Consultant a demand promissory note for $210,000 dated November 9, 2010 (the “November 2010 Note”) which was subsequently assigned to non-affiliate entities (the “Noteholders”). On April 18, 2011, the Company and the Noteholders agreed that in exchange for the forbearance of the Noteholders not to make demand for repayment of the November 2010 Note for a minimum of sixty (60) days, the Company would (i) cancel the November 2010 Note and (ii) issue two convertible promissory notes to the Noteholders in the principal amount of $105,000 each bearing interest at the rate of six percent (6%) per annum (the “Convertible Notes”). The Convertible Notes were due on demand any time after sixty (60) days from the date of issuance (the “Maturity Date”). At the option of the Noteholders, the Convertible Notes could be converted into shares of the Company’s Common Stock at any time after the Maturity Date at a fixed conversion price of $0.0105 per share. The Conversion Price was not subject to adjustment at any time for any future stock split, stock combination, dividend or distribution of any kind. On October 18, 2011, the Company and the Noteholders entered into Debt Conversion Agreements and converted the principal of the Convertible Notes into 20,000,000 shares of the Company’s Common Stock valued at $7,600,000. The transaction was recorded as debt settlement expense on the accompanying financial statements.
On March 1, 2011, the Company entered into a Demand Promissory Note with the Company’s then majority shareholder wherein the Company could periodically borrow funds to satisfy its operational requirements. Interest accrued at 20% per annum. On October 4, 2011, this Demand Promissory Note plus accrued interest totaling $170,152 was forgiven. The forgiveness of this related party debt was included in additional paid in capital on the accompanying financial statements.
On March 7, 2011, VitaMed entered into a Business Loan Agreement and Promissory Note for a $300,000 bank line of credit (the “Bank LOC”) for which the bank required a personal guarantee and cash collateral. Personal guarantees and cash collateral limited to $100,000 each were provided by Robert Finizio and John Milligan, officers of VitaMed, and by Reich Family Limited Partnership, an entity controlled by Mitchell Krassan, also an officer of VitaMed. The Bank LOC accrued interest at the rate of 3.020% per annum based on a year of 360 days and was due on March 1, 2012. The bank and VitaMed negotiated a one-year extension to the Bank LOC which was executed on March 19, 2012 (the “Bank LOC Extension”). The Bank LOC Extension accrues interest at the rate of 2.35% and is due on March 1, 2013. At December 31, 2011, the outstanding principle balance of the Bank LOC was $300,000. In consideration for the personal guarantees and cash collateral, VitaMed issued VitaMed Warrants for an aggregate of 499,998 Units (or Company Warrants for an aggregate of 613,713 shares pursuant to the Conversion Ratio). The ten-year Company Warrants vest at the rate of an aggregate of 76,714 shares per calendar quarter end and have an exercise price of $0.2444 per share. In the event that the Bank LOC is repaid prior to being fully vested, the Company Warrants will be reissued only for the number of shares vested through the date of repayment. At March 31, 2012, an aggregate of 306,867 shares will be vested thereunder.
On June 1, 2011, VitaMed sold Promissory Notes (the “VitaMed Promissory Notes”) in the aggregate of $500,000 with accompanying VitaMed Warrants to purchase an aggregate of 500,000 Units (or Company Warrants to purchase an aggregate of 613,718 shares pursuant to the Conversion Ratio). The VitaMed Promissory Notes earn interest at the rate of four percent (4%) per annum and were due at the earlier of (i) the six (6) month anniversary of the date of issuance and (ii) such time as VitaMed received the proceeds of a promissory note(s) issued in an amount of not less than $1,000,000 (the “Funding”). Upon the closing of the Funding on July 18, 2011, as more fully described in the following paragraph, two of the VitaMed Promissory Notes in the aggregate of $200,000 were paid in full. By mutual agreement, the remaining VitaMed Promissory Notes in the aggregate of $300,000 were extended until the Closing of the Merger. On October 6, 2011, one of the VitaMed Promissory Notes for $50,000 was paid in full. By mutual agreement, VitaMed Promissory Notes in the aggregate of $100,000 were converted into 266,822 shares of the Company’s Common Stock at $0.38 per share, which represents fair value of the shares on the date of conversion. Other VitaMed Promissory Notes in the aggregate of $150,000 were extended to March 1, 2012. At December 31, 2011, the outstanding principle balance of the VitaMed Promissory Notes was an aggregate of $150,000. As mentioned hereinafter in FOOTNOTE O – SUBSEQUENT EVENTS, two VitaMed Promissory Notes in the aggregate of $100,000 were further extended to April 14, 2012 and one for $50,000 was further extended to June 1, 1012. The ten-year Company Warrants have an exercise price of $0.4074 per share and none have been exercised.
On July 18, 2011, VitaMed sold two Senior Secured Promissory Notes (the “Secured Notes”) in the amount of $500,000 each and also entered into a Security Agreement under which VitaMed pledged all of its assets to secure the obligation. The Secured Notes bear interest at the rate of six percent (6%) per annum and are due on the one (1) year anniversary thereof. The Senior Secured Notes bear interest at the rate of six percent (6%) per annum and are due on the one (1) year anniversary of the date thereof. The Company may pay the Senior Secured Notes by delivering such number of shares of the Company’s Common Stock as shall be determined by dividing the outstanding principal then due and owing by the Company’s Share Price. For purposes of the Senior Secured Notes, the “Share Price” shall mean the lower of the most recent price at which the Company offered and sold shares of its Common Stock (not including any shares issued upon the exercise of options and/or warrants or upon the conversion of any convertible securities) or the five-day average closing bid price immediately preceding the date of conversion. At December 31, 2011, the outstanding principle balance of the Secured Notes was $500,000 each.
In September and October 2011, VitaMed sold Convertible Promissory Notes (the “VitaMed Convertible Notes”) in the aggregate of $534,160. The VitaMed Convertible Notes earned interest at the rate of four percent (4%) per annum and were due December 1, 2011. On November 18, 2011, the Company and the VitaMed Convertible Noteholders entered into Debt Conversion Agreements and converted the principal and accrued interest of the VitaMed Convertible Notes into 1,415,136 shares of the Company’s Common Stock at $0.38 per share which represents the fair value of the shares on the date of conversion.
In November and December, 2011, the Company sold six-percent Promissory Notes for an aggregate of $800,000 with due dates of March 1, 2012. At December 31, 2011, the outstanding principle balance of the Promissory Notes was $800,000. As mentioned hereinafter in FOOTNOTE O – SUBSEQUENT EVENTS, these Notes were paid in full on February 24, 2012 through the issuance of Secured Promissory Notes.
In December 2011, the Company sold four-percent Promissory Notes for an aggregate of $100,000 with due dates of March 1, 2012. At December 31, 2011, the outstanding principle balance of the Promissory Notes was $100,000. As mentioned hereinafter in FOOTNOTE O – SUBSEQUENT EVENTS, these Notes were further extended by mutual agreement to April 14, 2012.
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The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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STOCKHOLDERS' EQUITY | NOTE 9 – STOCKHOLDERS’ EQUITY
Common Stock
At June 30, 2013, we had 250,000,000 shares of common stock, $0.001 par value per share, authorized with 131,212,706 shares issued and outstanding.
Public Offering
On March 14, 2013, we entered into an underwriting agreement, or the Underwriting Agreement, with Jefferies LLC, as representative of the underwriters named therein, or the Underwriters, relating to the issuance and sale of 29,411,765 shares of our common stock. The price to the public in the offering was $1.70 per share and the Underwriters agreed to purchase the shares from us pursuant to the Underwriting Agreement at a price of $1.581 per share. The net proceeds to us from this offering was approximately $45.4 million, after deducting underwriting discounts and commissions and other offering expenses payable by us. In addition, under the terms of the Underwriting Agreement, we granted the Underwriters a 30-day option to purchase up to an additional 4,411,765 shares of common stock. The offering closed on March 20, 2013.
Additional Shares Purchased under Offering
As part of the public offering of our common stock described in Public Offering above, on April 12, 2013, the Underwriters exercised their option to purchase an additional 1,954,587 shares of our common stock to cover over-allotments. We issued these shares to the Underwriters on April 18, 2013 and received proceeds of approximately $3.1 million, net of expenses.
Warrants to Purchase Common Stock of the Company
As of June 30, 2013, we had common stock purchase warrants outstanding for an aggregate of 14,293,499 shares of our common stock with a weighted average contractual remaining life of 4.8 years and exercise prices ranging from $0.24 to $3.20 per share, resulting in a weighted average exercise price of $1.86 per share.
The valuation methodology used to determine the fair value of our Warrants is the Black-Scholes-Merton option-pricing model, or Black-Scholes Model, an acceptable model in accordance with ASC 718-10, Compensation – Stock Compensation. The Black-Scholes Model requires the use of a number of assumptions, including volatility of the stock price, the risk-free interest rate and the term of the Warrant.
Warrants Issued in Connection with Debt
On
January 31, 2013, we granted a warrant for the purchase of 1,250,000 shares of our common stock in connection with
the issuance of the Plato Note, or the Plato Warrant, (see NOTE 8 – NOTES PAYABLE, Issuance of
Multiple Advance Revolving Credit Note). The Plato Warrant has an exercise price of $3.20 per share. The
Plato Warrant will vest and become exercisable on October 31, 2013 and may be exercised any time after that date prior to
the January 31, 2019 expiration date of the Plato Warrant. This Warrant, with a fair value of
approximately $1,711,956, was valued on the date of the grant using a term of six years; a volatility of 44.29%; risk free
rate of 0.88%; and a dividend yield of 0%. At June 30, 2013, $1,051,988 was reported as deferred financing costs
included in other current assets in the accompanying condensed consolidated balance sheet and is being amortized over the
life of the Plato Note. For the six months ended June 30, 2013, $659,938 was recorded as financing costs on the accompanying
condensed consolidated financial statements.
On June 19, 2012, we granted warrants for the purchase of an aggregate of 7,000,000 shares of our common stock in connection with the issuance of the June 2012 Notes, or the June 2012 Warrants, (see NOTE 8 – NOTES PAYABLE, Issuance of June 2012 Notes). Of the June 2012 Warrants issued, 6,000,000 are exercisable at $2.00 per share and 1,000,000 are exercisable at $3.00 per share. The fair value of the June 2012 Warrants of $9,424,982 was determined by using the Black-Scholes Model on the date of the grant using a term of 5 years; a volatility of 44.64%; risk free rate of 0.75%; and a dividend yield of 0%. The relative fair value of the June 2012 Warrants of $1,649,890 was determined by using the relative fair value calculation method on the date of the grant. As a result of the repayment of the associated debt on March 21, 2013, we expensed the remaining unamortized debt discount of $885,709 at the time of the repayment.
On February 24, 2012, we issued warrants for the purchase of an aggregate of 5,685,300 shares of our common stock in connection with the modification of certain existing promissory notes, or the Modification Warrants, and warrants for the purchase of an aggregate of 3,314,700 shares of our common stock in connection with the issuance of the February 2012 Notes (the “February 2012 Warrants”) (see NOTE 8 – NOTES PAYABLE, Issuance of February 2012 Notes). Both the Modification Warrants and the February 2012 Warrants are exercisable at $0.38 per share. The Modification Warrants’ fair value of $10,505,247 and the February 2012 Warrants’ fair value of $6,124,873 was determined by using the Black-Scholes Model on the date of the grant using a term of 5 years; a volatility of 44.5%; risk free rate of 0.89%; and a dividend yield of 0%. We recorded the fair value of the Modification Warrants as part of the loss on extinguishment of debt in the accompanying condensed consolidated financial statements. The relative fair value of the February 2012 Warrants of $859,647 was recorded as debt discount. As a result of the surrender of the February 2012 Notes on June 19, 2012, we expensed the remaining unamortized debt discount.
Warrants Issued for Services
On May 7, 2013, we entered into a consulting agreement, or the Agreement, with Sancilio & Company, Inc., or SCI, to develop drug platforms to be used in hormone replacement drug products, or the Drug Products. These services include support of our efforts to successfully obtain U.S. Federal Drug Administration, or FDA, approval for the Drug Products, including a vaginal capsule for the treatment of vulvar and vaginal atrophy, or VVA. In connection with the Agreement, SCI agreed to forfeit its rights to receive warrants for the purchase of an aggregate of 833,000 shares of our common stock that were to be issued pursuant to the terms of a prior consulting agreement dated May 17, 2012. As consideration under the Agreement, we agreed to issue SCI a warrant to purchase 850,000 shares of our common stock that vest as follows:
In March 2012, we issued a warrant for the purchase of an aggregate of 31,000 shares of our common stock to five unaffiliated individuals for services rendered. These warrants were valued on the date of the grant using a term of 5 years; a volatility of 44.81%; risk free rate of 1.04%; and a dividend yield of 0%; $29,736 was recorded as consulting expense in the accompanying condensed consolidated financial statements.
A summary of our warrant activity and related information for 2013 follows:
As of June 30, 2013, we had warrants outstanding with exercise prices ranging from $0.24 to $3.20 per share. As of June 30, 2013, unamortized costs associated with warrants totaled approximately $3,995,000.
Stock Options
In 2009, we adopted the 2009 Long Term Incentive Compensation Plan, or LTIP, to provide financial incentives to our employees, members of our Board, and our advisers and consultants who are able to contribute towards the creation of or who have created stockholder value by providing them stock options and other stock and cash incentives, or the Awards. The Awards available under the LTIP consist of stock options, stock appreciation rights, restricted stock, restricted stock units, performance stock, performance units, EVA awards, and other stock or cash awards as described in the LTIP. There are 25,000,000 shares authorized for issuance under the LTIP. Under this LTIP, non-qualified stock options for the purchase of an aggregate of 12,934,725 shares of our common stock were outstanding at June 30, 2013.
On February 23, 2012, the Board adopted the 2012 Stock Incentive Plan, a non-qualified plan not requiring approval by our stockholders, or the 2012 SOP. The 2012 SOP was designed to serve as an incentive for retaining qualified and competent key employees, officers and directors, and certain consultants and advisors. There are 10,000,000 shares authorized for issuance under the 2012 SOP and non-qualified stock options for the purchase of an aggregate of 1,625,000 shares of our common stock were outstanding at June 30, 2013.
The valuation methodology used to determine the fair value of the stock options is the Black-Scholes Model. The Black-Scholes Model requires the use of a number of assumptions including volatility of the stock price, the risk-free interest rate, and the expected life of the stock options. The assumptions used in the Black-Scholes Model during the six months ended June 30, 2013 are set forth in the table below.
The risk-free interest rate assumption is based upon observed interest rates on zero coupon U.S. Treasury bonds whose maturity period is appropriate for the expected life. Estimated volatility is a measure of the amount by which our stock price is expected to fluctuate each year during the term of the award. Our estimated volatility is an average of the historical volatility of the stock prices of our peer entities whose stock prices were publicly available. Our calculation of estimated volatility is based on historical stock prices over a period equal to the term of the awards. We used the historical volatility of our peer entities due to the lack of sufficient historical data on our stock price. The average expected life is based on the contractual term of the option using the simplified method.
On June 28, 2013, an individual exercised his stock option to purchase an aggregate of 61,372 shares of our common stock for an aggregate purchase price of $6,251.
On June 21, 2013, we issued 10-year stock options to employees and consultants for the purchase of an aggregate of 632,500 shares with an exercise price of $2.98. An aggregate of 232,500 shares available under the stock options vest over a 3-year period on the anniversary of issuance, an aggregate of 100,000 shares vest monthly over an 18 month period, and an aggregate of 300,000 shares vest monthly over a 3-year period.
On May 10, 2013, we issued 10-year stock options to employees for the purchase of an aggregate of 100,000 shares with an exercise price of $2.71. An aggregate of 50,000 shares available under the stock options vest over a 4-year period on the anniversary of issuance and an aggregate of 50,000 shares vested immediately.
On May 6, 2013, we issued a 10-year stock option to a consultant for the purchase of an aggregate of 96,068 shares with an exercise price of $2.96. The shares available under the stock options vest monthly over a 12-month period.
On May 2, 2013, the Compensation Committee of the Board recommended the granting of stock options to our directors. The Board approved the recommendation and we issued 10-year stock options for the purchase of an aggregate of 575,000 shares of our common stock with an exercise price of $2.80, as follows: (i) a stock option for the purchase of 225,000 shares of our common stock to the Chairman of the Board; (ii) a stock option for the purchase of 75,000 shares of our common stock to the chair of each committee of the board; and (ii) an Option for the purchase of 50,000 shares of our common stock to each of the remaining directors. All of these stock options vest on December 31, 2013.
On May 8, 2013, Robert Finizio, our Chief Executive Officer, forfeited his contractual right to receive 600,000 shares upon exercise of a stock option granted in connection with his employment agreement as well as his right to receive any future stock options. Mr. Finizio gave up these rights with the understanding that these stock options would be returned to the pool of stock options available for issuance to attract future employees.
On March 29, 2013, we issued 10-year stock options to employees and consultants for the purchase of an aggregate of 180,109 shares with exercise prices ranging from $1.70 to $2.70. An aggregate of 500 shares available under the stock options vest over a 4-year period on the anniversary of issuance, an aggregate of 12,500 shares vest monthly over a 1-year period, 92,109 shares vest monthly over a 13-month period from the date of issuance, and an aggregate of 75,000 shares vest as follows: an aggregate of 31,250 vest immediately and an aggregate of 43,750 vest monthly over the subsequent seven months.
On June 29, 2012, we issued 10-year stock options to employees, consultants, and a director for the purchase of an aggregate of 250,000 shares with an exercise price of $2.80. An aggregate of 7,500 shares available under the stock options vest over a 4-year period on the anniversary of issuance, an aggregate of 115,000 shares vest over a 2-year period on the anniversary of issuance, 2,500 shares vest over a 1-year period on the anniversary of issuance, 75,000 shares vest monthly from December 31, 2012, and 50,000 vest immediately.
On April 16, 2012, the Board approved the issuance of 10-year stock options for our directors for the purchase of: (i) an aggregate of 350,000 shares (50,000 shares each) to our directors for services to be rendered during calendar year 2012 and (ii) an aggregate of 75,000 shares (25,000 shares each) to the chairs of the Audit, Compensation and Nominating and Corporate Governance Committees for services to be rendered during calendar year 2012. The stock options have an exercise price of $2.55 per share vested in full on December 31, 2012. In addition, Dr. Brian Bernick, a director and employee, was issued a stock option for 150,000 shares for services rendered as an employee, having an exercise price of $2.55, which vested in full on April 16, 2013.
On March 30, 2012, we issued 10-year stock options to employees and consultants for the purchase of an aggregate of 480,000 shares with an exercise price of $2.40. An aggregate of 405,000 shares available under the stock options vest over a 4-year period on the anniversary of issuance, an aggregate of 60,000 shares vest over a 2-year period on the anniversary of issuance, and 15,000 shares vest monthly over a 12-month period from the date of issuance.
On March 30, 2012, the Board approved a cashless exercise provision for use by holders of stock options. Also on March 30, 2012, an individual exercised his option to purchase 245,485 shares of our common stock. The aggregate purchase price of approximately $60,000 was paid pursuant to a cashless exercise provision wherein the individual surrendered his right to receive 25,000 shares thereunder.
On February 27, 2012, we issued stock options to our officers and directors for the purchase of an aggregate of 600,000 shares with an exercise price of $2.20 per share. The stock options vested in full on February 27, 2013.
In January 2012, certain individuals exercised their stock options to purchase an aggregate of 1,630,022 shares of our common stock for an aggregate purchase price of $166,000.
A summary of activity under the LTIP and 2012 SOP and related information follows:
The weighted-average issue date fair value of stock options issued during the six months ended June 30, 2013 was $1.01.
At June 30, 2013, we had stock options outstanding with exercise prices ranging from $0.10 to $3.40 per share.
Share-based compensation expense for stock options recognized in our results for the six months ended June 30, 2013 and 2012 ($1,161,770 and $510,987, respectively) is based on awards vested and was estimated without forfeitures. ASC 718-10, requires forfeitures to be estimated at the time of grant and revised in subsequent periods if actual forfeitures differ from the estimates.
At June 30, 2013, total unrecognized estimated compensation expense related to non-vested stock options issued prior to that date was approximately $3,695,420 which is expected to be recognized over a weighted-average period of 1.49 years. No tax benefit was realized due to a continued pattern of operating losses. |
NOTE 10 STOCKHOLDERS EQUITY
As discussed in NOTE 1, on October 4, 2011, all Units were exchanged for shares of our Common Stock. In addition, all VitaMed Options and VitaMed Warrants were exchanged and converted into Company Options and Company Warrants. All Units VitaMed Options and VitaMed Warrants were exchanged on a pro-rata basis for shares of our Common Stock, which in the aggregate totaled 70,000,000 shares, resulting in a conversion ratio calculated by the sum of all Units, VitaMed Options and VitaMed Warrants divided by 70,000,000 (the Conversion Ratio). Pursuant to the Conversion Ratio, we issued 58,407,331 shares of our Common Stock in exchange for the Units, reserved for issuance an aggregate of 10,119,796 shares issuable upon the exercise of the Company Options, and reserved for issuance an aggregate of 1,472,916 shares issued upon the exercise of the Company Warrants.
Preferred Stock
At December 31, 2012, we had 10,000,000 shares of Preferred Stock, par value $0.001 authorized and none outstanding, which shares can be designated by our Board of Directors.
Common Stock
At December 31, 2012, we had 250,000,000 shares of Common Stock, $0.001 par value authorized, with 99,784,982 shares of Common Stock issued and outstanding.
During 2012 certain individuals exercised their right to purchase shares of our Common Stock. The shares were issued in reliance upon an exemption from the registration provisions of the Securities Act of 1933 provided by Section 4(1) of the Act and Rule 144 and are covered by a Lock-Up Agreement.
During June 2012, we settled $3,102,000 in principal and interest of the February 2012 Notes in exchange for the Parties exercise of a portion of the February 2012 Warrants for an aggregate of 8,145,486 shares of our Common Stock. The shares were issued in reliance upon an exemption from the registration provisions of the Securities Act of 1933 provided by Section 4(1) of the Securities Act of 1933 and Rule 144. During June 2012, we and the Parties also agreed to convert a portion of the February 2012 Notes, and according to the terms thereof, principal and interest through June 19, 2012 of totaling $1,054,647 was converted at $0.38 per share into 2,775,415 shares of our Common Stock. The shares were issued in reliance upon an exemption from the registration provisions of the Securities Act of 1933 provide by Section 4(1) of the Act and Rule 144.
In September 2012, we entered into a Securities Purchase Agreement (the Purchase Agreement) with multiple investors (collectively, the Investors) relating to the issuance and sale of our Common Stock in a private placement. The Purchase Agreement was closed on October 2, 2012 (the Closing Date) through which we sold an aggregate of 3,953,489 shares of our Common Stock (the Shares) at $2.15 per share for an aggregate purchase price of $8,500,001. In connection with the private placement, Jefferies LLC (Jefferies) served as our exclusive placement agent. Jefferies compensation for the transaction was a cash fee of $552,500, which is included in accounts payable in the accompanying consolidated financial statements. We also paid legal fees and expenses for the Investors in the aggregate of $52,016, resulting in net proceeds to us of $7,895,485. The Shares were issued in reliance upon the exemptions from registration under the Securities Act of 1933 provided by Section 4(2) and Rule 506 of Regulation D promulgated thereunder. The Shares were issued directly by us and did not involve a public offering or general solicitation. The Investors in the private placement are Accredited Investors as that term is defined in Rule 501 of Regulation D and acquired the Shares for investment only and not with a present view toward, or for resale in connection with, the public sale or distribution thereof. As part of the Purchase Agreement, we agreed to file a registration statement, which was filed November 27, 2012.
On October 3, 2011, we effected a reverse split of our 16,575,209 issued and outstanding shares of Common Stock on a ratio of 1- for -100 resulting in 165,856 shares issued and outstanding thereafter.
On October 5, 2011, we closed a Stock Purchase Agreement with Pernix Therapeutics, LLC, a Louisiana limited liability company (Pernix). Pursuant to the terms of the Stock Purchase Agreement dated September 8, 2011, Pernix agreed to purchase 2,631,579 shares of our Common Stock (the Shares) at a purchase price of $0.38 per share for a total purchase price of $1,000,000 (Purchase Price). In connection with the Stock Purchase Agreement, we and Pernix entered into a Lock-Up Agreement that, among other things, restricts the sale, assignment, transfer, encumbrance and other disposition of the Shares issued to Pernix. Pursuant to the terms of the Lock-Up Agreement, Pernix agreed that for a period of 12 months from the date of the Lock-Up Agreement, it would not make or cause any sale of the Shares (the Lock-Up Period). After the completion of the Lock-Up Period, Pernix agreed not to sell or dispose of more than 5% of the Shares per quarter for the following 12 month period. Pernix is a related party (for further details see Note 12).
In October and November 2011, we converted principal and accrued interest in the aggregate of $849,137 into shares of Common Stock of our totaling 20,266,822 and 1,415,136, respectively, as more fully described in NOTE 9.
In December 2011, Alan Wurtzel, a former director of VitaMed, exercised Company Options to purchase 92,057 shares of our Common Stock for an aggregate exercise price of $17,250.
Warrants
The valuation methodology used to determine the fair value of Common Stock purchase warrants is the Black-Scholes-Merton option-pricing model (Black-Scholes Model), an acceptable model in accordance with ASC 718-10. The Black-Scholes Model requires the use of a number of assumptions, including volatility of the stock price, the risk-free interest rate and the term of the Common Stock purchase warrant.
As of December 31, 2012, we had Company Warrants outstanding for an aggregate of 12,193,499 shares of our Common Stock (including the conversion of VitaMed Warrants as described above) with a weighted average contractual remaining life of 4.8 years and exercise prices ranging from $0.24 to $3.00, per share resulting in a weighted average exercise price of $1.63 per share. Unamortized costs associated with Company Warrants totaled approximately $93,000 at December 31, 2012.
During the year ended December 31, 2012, we issued the following:
Warrants Issued in Conjunction with Debt
On February 24, 2012, we issued an aggregate of 5,685,300 Warrants in connection with the modification of certain existing promissory notes (the Modification Warrants), and 3,314,700 Warrants with the issuance of secured promissory notes (the February 2012 Warrants) (see NOTE 9). Both the Modification Warrants and the February 2012 Warrants are exercisable at $0.38. The Modification Warrants fair value of $10,505,247 and the February 2012 Warrants fair value of $6,124,873 were determined by using the Black-Scholes Model on the date of the grant. Both valuations used a term of five years; a volatility of 44.5%; risk free rate of 0.89%; and a dividend yield of 0%. We recorded the fair value of the Modification Warrants as part of the loss on extinguishment of debt in the accompanying consolidated financial statements. The relative fair value of the February 2012 Warrants of $859,647 was recorded as debt discount. As a result of the surrender of the February 2012 Notes on June 19, 2012, we expensed the remaining unamortized debt discount. As of December 31, 2012, we recorded amortization of debt discount totaling $859,647 related to the February 2012 Notes.
On June 19, 2012, we issued an aggregate of 7,000,000 Warrants in connection with the issuance of secured promissory notes (the June 2012 Warrants) (see NOTE 9). Of the 7,000,000 June 2012 Warrants, 6,000,000 are exercisable at $2.00 and 1,000,000 are exercisable at $3.00. The fair value of the June 2012 Warrants of $9,424,982 was determined by using the Black-Scholes Model on the date of the grant. The Warrants were valued on the date of the grant using a term of five years; a volatility of 44.64%; risk free rate of 0.75%; and a dividend yield of 0%. The relative fair value of the June 2012 Warrants of $1,649,890 was determined by using the relative fair value calculation method on the date of the grant. At December 31, 2012, $1,102,680 was reported as debt discount and $547,210 was recorded as amortization of debt discount on the accompanying consolidated financial statements.
Warrants Issued for Services
In March 2012, we issued an aggregate of 31,000 Warrants to five unaffiliated individuals for services rendered. These Warrants were valued on the date of the grant using a term of five years; a volatility of 44.81%; risk free rate of 1.04%; and a dividend yield of 0%; $29,736 was recorded as consulting expense in the accompanying consolidated financial statements.
In May 2012, we issued an aggregate of 1,300,000 Warrants to an unaffiliated entity for services to be rendered over approximately five years beginning in May 2012. Services provided are to include (a) services in support of our drug development efforts including, but not limited to, services in support our ongoing and future drug development and commercialization efforts, regulatory approval efforts, third-party investment and financing efforts, marketing efforts, chemistry, manufacturing and controls efforts, drug launch and post-approval activities, and other intellectual property and know-how transfer associated therewith; (b) services in support of our efforts to successfully obtain New Drug Approval; and (c) other consulting services as mutually agreed upon from time to time in relation to new drug development opportunities. The Warrants were valued at $1,532,228 on the date of the grant using a term of five years; a volatility of 44.71%; risk free rate of 0.74%; and a dividend yield of 0%. At December 31, 2012 we reported $360,528 as prepaid expense-short term, $953,655 as prepaid expense-long term, and recorded $218,045 as consulting expense in the accompanying consolidated financial statements. The contract will expire upon the commercial manufacture of a drug product. Based on the review, we have determined that the process will take approximately five years. As a result, we are amortizing the $1,532,228 over five years.
In June 2012, we issued an aggregate of 1,500 Warrants to three unaffiliated individuals for services rendered. The Warrants were valued on the date of the grant using a term of five years; a volatility of 44.78%; risk free rate of 0.72%; and a dividend yield of 0%. A total of $1,656 was recorded as consulting expense in the accompanying consolidated financial statements.
During the year ended December 31, 2011, we issued the following:
In March 2011, VitaMed entered into a Business Loan Agreement and Promissory Note for a $300,000 bank line of credit (the Bank LOC) for which the bank required personal guarantees and cash collateral. Personal guarantees and cash collateral limited to $100,000 each were provided by Robert Finizio and John Milligan, officers of VitaMed, and by Reich Family Limited Partnership, an entity controlled by Mitchell Krassan, also an officer of VitaMed. The Bank LOC accrued interest at the rate of 3.020% per annum based on a year of 360 days and was due on March 1, 2012. The bank and VitaMed negotiated a one-year extension to the Bank LOC, which was executed on March 19, 2012 (the Bank LOC Extension). The Bank LOC Extension accrues interest at the rate of 2.35% and is due on March 1, 2013. In consideration for the personal guarantees and cash collateral, VitaMed issued VitaMed Warrants for an aggregate of 499,998 Units (or Company Warrants for an aggregate of 613,713 shares pursuant to the Conversion Ratio). The ten-year Company Warrants vest at the rate of an aggregate of 76,714 shares per calendar quarter end and have an exercise price of $0.2444 per share. In the event that the bank loan is repaid prior to being fully vested, the Company Warrants will be reissued only for the number of shares vested through the date of repayment. On November 13, 2012, the then outstanding balance of $299,220 was repaid in full and we and the bank amended the Business Loan Agreement and Promissory Note to reflect a $100,000 bank line of credit (the Amended Bank LOC). As part of the Amended Bank LOC, the personal guarantees and cash collateral were removed for Mr. Finizio and Mr. Milligan. In accordance with the terms of the Company Warrants, the Company Warrants previously granted to Mr. Finizio and Mr. Milligan have been amended to reflect the amount vested prior to the date of the Amended Bank LOC (179,000 each). At December 31, 2012, an aggregate of 562,571 Company Warrants were vested.
The Company Warrants, with a fair value of $93,969 ($86,139 after adjusting for the effect of the Amended Bank LOC), were valued on the date of the grant using a term of 10 years; a volatility of 47.89%; risk free rate of 3.48%; and a dividend yield of 0%. As of December 31, 2012 and 2011, $45,036 and $38,159, respectively, was recorded as loan guaranty costs in other income and expense on the accompanying consolidated financial statements.
In June 2011, VitaMed issued Promissory Notes (the VitaMed Promissory Notes) in the aggregate of $500,000 with accompanying VitaMed Warrants for an aggregate of 500,000 shares (or Company Warrants for an aggregate of 613,718 shares pursuant to the Conversion Ratio). The VitaMed Warrants were valued on the date of the grant using a term of five years; a range of volatility from 39.13% to 39.15%; risk free rate ranging from 1.38-1.65%; and a dividend yield of 0%. The Company Warrants vested immediately. Although the fair value was $30,993, using the appropriate accounting treatment, $28,719 was recorded as debt discount and fully amortized during 2011 with the amortized amount recorded as interest expense on the accompanying consolidated financial statements.
In July 2011, VitaMed entered into a one-year consulting agreement with Lang Naturals, Inc. (Lang), providing for Lang to assist in the design, development, and distribution efforts of VitaMeds initial product offering. As compensation, Lang received a VitaMed Warrant for 200,000 shares (or a Company Warrant for 245,485 shares pursuant to the Conversion Ratio). The VitaMed Warrant was valued on the date of the grant at $12,548 using a term of five years; a volatility of 39.44%; risk free rate of 1.56%; and a dividend yield of 0%. The Company Warrant vested immediately. As of December 31, 2012 and 2011, $6,936 and $5,612, respectively was recorded as non-cash compensation on the accompanying consolidated financial statements.
In October 2011, we (i) issued a Company Warrant for 600,000 shares with a fair value of $133,045 to an officer of the Company for services performed. The Company Warrant was valued on the date of the grant using a term of 10 years; volatility of 45.94%; risk free rate of 2.23%; and a dividend yield of 0%. The Company Warrant vests over a 44-month period beginning on November 21, 2011 (or 13,636 shares for months 1-43 and 13,652 shares for month 44). As of December 31, 2012 and 2011, of the $133,045 fair value, $36,284 and $7,158, respectively, was recorded as non-cash compensation on the accompanying consolidated financial statements. The remaining $89,603 will be expensed to non-cash compensation equitably over the remaining 30 months; (ii) issued a Company Warrant for 184,211 shares with a fair value of $25,980 to an unrelated entity for consulting services covered under a two month agreement. The Company Warrant was valued on the date of the grant using a term of five years; volatility of 41.04%; risk free rate of 1.08%; and a dividend yield of 0%. As of December 31, 2011, the $25,980 fair value was recorded as financing expense on the accompanying consolidated financial statements; and (iii), VitaMed entered into a two-year consulting agreement with Lang providing for a Lang representative to help evaluate improvements to existing products and new products as well as services, including but not limited to, research, design, compliance, scientific and regulatory affairs and commercialization of products.
As compensation, Lang received a Company Warrant for 800,000 shares. The Company Warrant was valued on the date of the grant using a term of 10 years; a volatility of 45.94%; risk free rate of 2.23%; and a dividend yield of 0%. The Company Warrant vested immediately. Of the $177,394 fair value, $88,696 and $17,010 was recorded as non-cash compensation and $71,688 and $160,384 was recorded as prepaid expense as of December 31, 2012 and 2011, respectively, on the accompanying consolidated financial statements.
In December 2011, we issued a Company Warrant for 500 shares with a fair value of $338 to an unrelated individual for consulting services covered under a three month agreement. The Company Warrant was valued on the date of the grant using a term of 10 years; volatility of 51.83%; risk free rate of 0.91%; and a dividend yield of 0%. The Company Warrant vested immediately. As of December 31, 2011, of the $338 fair value, $15 was recorded as non-cash compensation and $323 was recorded as prepaid expense on the accompanying consolidated financial statements.
The weighted average fair value per share of Company Warrants granted and the assumptions used in the Black-Scholes Model during the years ended December 31, 2012 and 2011 are set forth in the table below.
The risk-free interest rate assumption is based upon observed interest rates on zero coupon U.S. Treasury bonds whose maturity period is appropriate for the term.
Estimated volatility is a measure of the amount by which our stock price is expected to fluctuate each year during the term of the award. Our estimated volatility is an average of the historical volatility of the stock prices of its peer entities whose stock prices were publicly available. Our calculation of estimated volatility is based on historical stock prices over a period equal to the term of the awards. We used the historical volatility of peer entities due to the lack of sufficient historical data of its stock price during 2001-2012.
A summary of our Common Stock purchase warrant activity and related information for the years ended December 31, 2012 and 2011 follows:
Stock Options
In 2009, we adopted the 2009 Long Term Incentive Compensation Plan (the 2009 Plan) to provide financial incentives to employees, members of the Board, advisers , and consultants of our company who are able to contribute towards the creation of or who have created stockholder value by providing them stock options and other stock and cash incentives (the Awards). The Awards available under the 2009 Plan consist of stock options, stock appreciation rights, restricted stock, restricted stock units, performance stock, performance units, and other stock or cash awards as described in the 2009 Plan. There are 25,000,000 shares authorized for issuance thereunder. Prior to the Merger, no awards had been issued under the 2009 Plan. As of December 31, 2012 there were 11,508,488 shares issued under the 2009 Plan.
On February 23, 2012, our Board of Directors adopted the 2012 Stock Incentive Plan, a non-qualified plan not requiring approval by our stockholders (the 2012 Plan). The 2012 Plan was designed to serve as an incentive for retaining qualified and competent key employees, officers, directors, and certain consultants and advisors of our company. There are 10,000,000 shares of our Common Stock authorized for issuance thereunder. As of December 31, 2012 there were 2,225,000 shares issued under the 2012 Plan.
A summary of activity under the 2009 and 2012 Plans and related information follows:
(1) This includes: (i) VitaMed Options granted between October 2008 and December 31, 2010 for an aggregate of 7,639,722 Units of which 16,000 were canceled prior to conversion (or Company Options for 9,357,561 shares per the Conversion Ratio), (ii) VitaMed Options granted between January 1, 2011 and October 3, 2011 for an aggregate of 621,000 Units (or Company Options for 762,235 shares per the Conversion Ratio) and (iii) Company Options granted between October 4, 2011 and December 31, 2011 for an aggregate of 562,422 shares. The terms and conditions of the VitaMed Options were reflected in the replacement Company Options including the number of shares vested.
The weighted-average grant date fair value of Company Options granted during the years ended December 31, 2012 and 2011 was $1.16 and $0.16, respectively.
As of December 31, 2012 and 2011, Company Options outstanding covered an aggregate of 13,733,488 and 10,590,161 shares, respectively, with a weighted average contractual life of 7.7 and 7.6 years, respectively, and exercise prices ranging from $2.20 to $3.40 per share in 2012 and $0.10 to $1.22 per share in 2011 resulting in a weighted average exercise price of $1.16 and $0.16 per share, respectively.
The valuation methodology used to determine the fair value of Company Options is the Black-Scholes-Merton option-pricing model (Black-Scholes Model), an acceptable model in accordance with ASC 718-10. The Black-Scholes Model requires the use of a number of assumptions including volatility of the stock price, the risk-free interest rate, and the expected life.
The assumptions used in the Black-Scholes Model during the years ended December 31, 2012 and 2011 and are set forth in the table below.
The risk-free interest rate assumption is based upon observed interest rates on zero coupon U.S. Treasury bonds whose maturity period is appropriate for the expected life.
Estimated volatility is a measure of the amount by which our stock price is expected to fluctuate each year during the term of the award. Our estimated volatility is an average of the historical volatility of the stock prices of its peer entities whose stock prices were publicly available. Our calculation of estimated volatility is based on historical stock prices over a period equal to the term of the awards. We used the historical volatility of peer entities due to the lack of sufficient historical data of its stock price during 2001-2011. The average expected life is based on the contractual term of the option using the simplified method.
Share-based compensation expense for Company Options recognized in our results for the years ended December 31, 2012 and 2011 ($1,832,062 and $183,355 respectively) is based on awards vested and we estimated no forfeitures. ASC 718-10 requires forfeitures to be estimated at the time of grant and revised in subsequent periods if actual forfeitures differ from the estimates.
At December 31, 2012 and 2011, total unrecognized estimated compensation expense related to non-vested Company Options granted prior to that date was approximately $4,391,000 and $244,000, respectively, which is expected to be recognized over a weighted-average period of 1.8 years. No tax benefit was realized due to a continued pattern of operating losses. |
NOTE D – STOCKHOLDERS’ EQUITY
As previously mentioned herein, on October 4, 2011, all Units were exchanged for shares of the Company’s Common Stock. In addition, all VitaMed Options and VitaMed Warrants were exchanged and converted into Company Options and Company Warrants. All Units , VitaMed Options and VitaMed Warrants were exchanged on a pro-rata basis for shares of the Company’s Common Stock which in the aggregate totaled 70,000,000 shares, resulting in a conversion ratio calculated by the sum of all Units, VitaMed Options and VitaMed Warrants divided by 70,000,000 (the “Conversion Ratio”). Pursuant to the Conversion Ratio, the Company issued 58,407,331 shares of the Company’s Common Stock in exchange for the Units, reserved for issuance an aggregate of 10,119,796 shares issuable upon the exercise of the Company Options and reserved for issuance an aggregate of 1,472,916 shares issued upon the exercise of the Company Warrants.
Preferred Stock At December 31, 2011, the Company had 10,000,000 shares of Preferred Stock, par value $0.001 authorized and none outstanding, which shares can be designated by the Company’s Board of Directors.
Common Stock
At December 31, 2011, the Company had 250,000,000 shares of Common Stock, $0.001 par value authorized, with 82,978,781 shares of Common Stock issued and outstanding.
Between February and May 2011, VitaMed sold 2,892,630 Units for an aggregate purchase price of $707,000.
On October 3, 2011, the Company effected a reverse split of its 16,575,209 issued and outstanding shares of Common Stock on a ratio of 1 for 100 resulting in 165,856 shares issued and outstanding thereafter.
On October 5, 2011, the Company closed a Stock Purchase Agreement with Pernix Therapeutics, LLC, a Louisiana limited liability company (“Pernix”). Pursuant to the terms of the Stock Purchase Agreement dated September 8, 2011, Pernix agreed to purchase 2,631,579 shares of the Company’s Common Stock (the “Shares”) at a purchase price of $0.38 per share for a total purchase price of $1,000,000 (“Purchase Price”). In connection with the Stock Purchase Agreement, the Company and Pernix entered into a Lock-Up Agreement which, among other things, restricts the sale, assignment, transfer, encumbrance and other disposition of the Shares issued to Pernix. Pursuant to the terms of the Lock-Up Agreement, Pernix agreed that for a period of twelve (12) months from the date of the Lock-Up Agreement, it would not make or cause any sale of the Shares (the “Lock-Up Period”). After the completion of the Lock-Up Period, Pernix agreed not to sell or dispose of more than five percent (5%) of the Shares per quarter for the following twelve (12) month period.
In October and November 2011, the Company converted principle and accrued interest in the aggregate of $849,137 into shares of Common Stock of the Company totaling 20,000,000 and 1,681,958, respectively, as more fully described in NOTE I – NOTES PAYABLE.
In December 2011, a former director of VitaMed exercised Company Options to purchase 92,057 shares of the Company’s Common Stock at an aggregate exercise price of $17,250.
Warrants
The valuation methodology used to determine the fair value of Common Stock purchase warrants is the Black-Scholes-Merton option-pricing model (“Black-Scholes Model”), an acceptable model in accordance with ASC 718-10. The Black-Scholes Model requires the use of a number of assumptions including volatility of the stock price, the risk-free interest rate and the term of the Common Stock purchase warrant.
As of December 31, 2011, the Company had Company Warrants outstanding for an aggregate of 3,057,627 shares of the Company’s Common Stock (including the conversion of VitaMed Warrants as described above) with a weighted average contractual life of 8.0 years and exercise prices ranging from $0.24 to $1.50 per share resulting in a weighted average exercise price of $0.39 per share.
As of December 31, 2011, unamortized costs associated with Company Warrants totaled approximately $349,000.
During the year ended December 31, 2011, the Company issued the following:
On March 7, 2011, VitaMed entered into a Business Loan Agreement and Promissory Note for a $300,000 bank line of credit (the “Bank LOC”) for which the bank required a personal guarantee and cash collateral. Personal guarantees and cash collateral limited to $100,000 each were provided by Robert Finizio and John Milligan, officers of VitaMed, and by Reich Family Limited Partnership, an entity controlled by Mitchell Krassan, also an officer of VitaMed. The Bank LOC accrued interest at the rate of 3.020% per annum based on a year of 360 days and was due on March 1, 2012. The bank and VitaMed negotiated a one-year extension to the Bank LOC which was executed on March 19, 2012 (the “Bank LOC Extension”). The Bank LOC Extension accrues interest at the rate of 2.35% and is due on March 1, 2013. In consideration for the personal guarantees and cash collateral, VitaMed issued VitaMed Warrants for an aggregate of 499,998 Units (or Company Warrants for an aggregate of 613,713 shares pursuant to the Conversion Ratio). The ten-year Warrants vest at the rate of an aggregate of 76,714 shares per calendar quarter end and have an exercise price of $0.2444 per share. In the event that the bank loan is repaid prior to being fully vested, the Company Warrants will be reissued only for the number of shares vested through the date of repayment. At March 31, 2012, an aggregate of 306,867 shares will be vested thereunder. The VitaMed Warrants were valued on the date of the grant using a term of 10 years; a volatility of 47.89%; risk free rate of 3.48%; and a dividend yield of 0%. Of the $93,969 fair value, $38,159 was recorded as loan guaranty costs in other income and expense and $55,810 was recorded as prepaid expense on the accompanying consolidated financial statements.
In June 2011, VitaMed sold Promissory Notes (the “VitaMed Promissory Notes”) in the aggregate of $500,000 with accompanying VitaMed Warrants for an aggregate of 500,000 shares (or Company Warrants for an aggregate of 613,718 shares pursuant to the Conversion Ratio). The VitaMed Warrants were valued on the date of the grant using a term of five (5) years; a range of volatility from 39.13% to 39.15%; risk free rate ranging from 1.38-1.65%; and a dividend yield of 0%. The Company Warrants vested immediately. Although the fair value was $30,993, using the appropriate accounting treatment, $28,719 was recorded as debt discount and fully amortized during 2011 with the amortized amount recorded as interest expense on the accompanying consolidated financial statements.
On July 21, 2011,VitaMed entered into a one-year consulting agreement with Lang Naturals, Inc. (“Lang”), wherein Lang would assist in the design, development and distribution efforts of VitaMed’s initial product offering. As compensation, Lang received a VitaMed Warrant for 200,000 shares (or a Company Warrant for 245,485 shares pursuant to the Conversion Ratio). The VitaMed Warrant was valued on the date of the grant using a term of five (5) years; a volatility of 39.44%; risk free rate of 1.56%; and a dividend yield of 0%. The Company Warrant vested immediately. Of the $12,548 fair value, $5,612 was recorded as non-cash compensation and $6,936 was recorded as prepaid expense on the accompanying consolidated financial statements.
On October 21, 2011, the Company granted a Company Warrant to Daniel A. Cartwright, the Company’s Chief Financial Officer, for 600,000 shares with a fair value of $133,045 for services performed. The Company Warrant was valued on the date of the grant using a term of 10 years; volatility of 45.94%; risk free rate of 2.23%; and a dividend yield of 0%. The Company Warrant vests over a 44-month period beginning on November 21, 2011 (or 13,636 shares for months 1-43 and 13,652 shares for month 44). Of the $133,045 fair value, $7,158 was recorded as non-cash compensation on the accompanying consolidated financial statements. The remaining $125,887 will be expense to non-cash compensation equitably over the remaining 42 months.
Also on October 21, 2011, the Company granted a Company Warrant for 184,211 shares with a fair value of $25,980 to an unrelated entity for consulting services covered under a two (2) month agreement. The Company Warrant was valued on the date of the grant using a term of five (5) years; volatility of 41.04%; risk free rate of 1.08%; and a dividend yield of 0%. The $25,980 fair value was recorded as financing expense on the accompanying consolidated financial statements.
On October 23, 2011, VitaMed entered into a two-year consulting agreement with Lang wherein a Lang representative will help evaluate improvements to existing products and new products as well as services including but not limited to research, design, compliance, scientific and regulatory affairs and commercialization of products. As compensation, Lang received a Company Warrant for 800,000 shares. The Company Warrant was valued on the date of the grant using a term of 10 years; a volatility of 45.94%; risk free rate of 2.23%; and a dividend yield of 0%. The Company Warrant vested immediately. Of the $177,394 fair value, $17,010 was recorded as non-cash compensation and $160,384 was recorded as prepaid expense on the accompanying consolidated financial statements.
On December 28, 2011, the Company granted a Company Warrant for 500 shares with a fair value of $338 to an unrelated individual for consulting services covered under a three (3) month agreement. The Company Warrant was valued on the date of the grant using a term of 10 years; volatility of 51.83%; risk free rate of 0.91%; and a dividend yield of 0%. The Company Warrant vested immediately. Of the $338 fair value, $15 was recorded as non-cash compensation and $323 was recorded as prepaid expense on the accompanying consolidated financial statements.
The weighted average fair value per share of Company Warrants granted and the assumptions used in the Black-Scholes Model during the years ended December 31, 2011 are set forth in the table below.
The risk-free interest rate assumption is based upon observed interest rates on zero coupon U.S. Treasury bonds whose maturity period is appropriate for the term. Estimated volatility is a measure of the amount by which the Company’s stock price is expected to fluctuate each year during the term of the award. The Company’s estimated volatility is an average of the historical volatility of the stock prices of its peer entities whose stock prices were publicly available. The Company’s calculation of estimated volatility is based on historical stock prices over a period equal to the term of the awards. The Company used the historical volatility of peer entities due to the lack of sufficient historical data of its stock price during 2001-2011.
The Company issued no Common Stock purchase warrants during the year ended December 31, 2010. A summary of the Company’s Common Stock purchase warrant activity and related information for 2011 follows:
Stock Options
In 2009, the Company adopted the 2009 Long Term Incentive Compensation Plan (the “LTIP”) to provide financial incentives to employees, members of the Board, and advisers and consultants of the Company who are able to contribute towards the creation of or who have created stockholder value by providing them stock options and other stock and cash incentives (the “Awards”). The Awards available under the LTIP consist of stock options, stock appreciation rights, restricted stock, restricted stock units, performance stock, performance units, EVA awards, and other stock or cash awards as described in the LTIP. There are 25,000,000 shares authorized for issuance thereunder. Prior to the Merger, no awards had been issued under the LTIP.
A summary of activity under the LTIP and related information follows:
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The weighted-average grant date fair value of Company Options granted during the years ended December 31, 2011 and 2010 was $0.19 and $0.09, respectively.
As of December 31, 2011, Company Options outstanding covered an aggregate of 10,590,161 shares with a weighted average contractual life of 7.6 years and exercise prices ranging from $0.10 to $1.22 per share resulting in a weighted average exercise price of $0.16 per share.
The valuation methodology used to determine the fair value of Company Options is the Black-Scholes-Merton option-pricing model (“Black-Scholes Model”), an acceptable model in accordance with ASC 718-10. The Black-Scholes Model requires the use of a number of assumptions including volatility of the stock price, the risk-free interest rate, and the expected life.
The assumptions used in the Black-Scholes Model during the years ended December 31, 2011 and 2010 and are set forth in the table below.
The risk-free interest rate assumption is based upon observed interest rates on zero coupon U.S. Treasury bonds whose maturity period is appropriate for the expected life. Estimated volatility is a measure of the amount by which the Company’s stock price is expected to fluctuate each year during the term of the award. The Company’s estimated volatility is an average of the historical volatility of the stock prices of its peer entities whose stock prices were publicly available. The Company’s calculation of estimated volatility is based on historical stock prices over a period equal to the term of the awards. The Company used the historical volatility of peer entities due to the lack of sufficient historical data of its stock price during 2001-2011. The average expected life is based on the contractual term of the option using the simplified method.
Share-based compensation expense for Company Options recognized in our results for the years ended December 31, 2011 and 2010 ($180,087 and $177,601 respectively) is based on awards vested and we estimated no forfeitures. ASC 718-10 requires forfeitures to be estimated at the time of grant and revised in subsequent periods if actual forfeitures differ from the estimates.
At December 31, 2011 and 2010, total unrecognized estimated compensation expense related to non-vested Company Options granted prior to that date was approximately $244,000 and $206,000, respectively, which is expected to be recognized over a weighted-average period of 3.3 years. No tax benefit was realized due to a continued pattern of operating losses.
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The entire disclosure for shareholders' equity, comprised of portions attributable to the parent entity and noncontrolling interest, if any, including other comprehensive income (as applicable). Including, but not limited to: (1) balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings; (2) accumulated balance for each classification of other comprehensive income and total amount of comprehensive income; (3) amount and nature of changes in separate accounts, including the number of shares authorized and outstanding, number of shares issued upon exercise and conversion, and for other comprehensive income, the adjustments for reclassifications to net income; (4) rights and privileges of each class of stock authorized; (5) basis of treasury stock, if other than cost, and amounts paid and accounting treatment for treasury stock purchased significantly in excess of market; (6) dividends paid or payable per share and in the aggregate for each class of stock for each period presented; (7) dividend restrictions and accumulated preferred dividends in arrears (in aggregate and per share amount); (8) retained earnings appropriations or restrictions, such as dividend restrictions; (9) impact of change in accounting principle, initial adoption of new accounting principle and correction of an error in previously issued financial statements; (10) shares held in trust for Employee Stock Ownership Plan (ESOP); (11) deferred compensation related to issuance of capital stock; (12) note received for issuance of stock; (13) unamortized discount on shares; (14) description, terms, and number of warrants or rights outstanding; (15) shares under subscription and subscription receivables, effective date of new retained earnings after quasi-reorganization and deficit eliminated by quasi-reorganization and, for a period of at least ten years after the effective date, the point in time from which the new retained dates; and (16) retroactive effective of subsequent change in capital structure. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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INCOME TAXES
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INCOME TAXES | NOTE 10 – INCOME TAXES
Deferred income tax assets and liabilities are determined based upon differences between the financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. We do not expect to pay any significant federal or state income tax for 2013 as a result of (i) the losses recorded during the six months ended June 30, 2013, (ii) additional losses expected for the remainder of 2013, and/or (iii) net operating loss carry forwards from prior years. Accounting standards require the consideration of a valuation allowance for deferred tax assets if it is “more likely than not" that some component or all of the benefits of deferred tax assets will not be realized. As of June 30, 2013, we maintain a full valuation allowance for all deferred tax assets. Based on these requirements, no provision or benefit for income taxes has been recorded. There were no recorded unrecognized tax benefits at the end of the reporting period. |
NOTE 11 INCOME TAXES
With the advent of the Merger, we determined that VitaMed would become the sole focus of our company and previous business performed by our predecessor was discontinued. Because of these events, deferred income taxes are determined by calculating the loss from operations of our company starting October 4, 2011. Deferred income taxes are determined using the liability method for the temporary differences between the financial reporting basis and income tax basis of our assets and liabilities. Deferred income taxes are measured based on the tax rates expected to be in effect when the temporary differences are included in our tax return. Deferred tax assets and liabilities are recognized based on anticipated future tax consequences attributable to differences between financial statement carrying amounts of assets and liabilities and their respective tax bases. For the years December 31, 2012 and 2011, there was no provision for income taxes, current or deferred.
At December 31, 2012 and 2011, we had a net operating loss carry forward of approximately $14,900,000 and $2,100,000 million, respectively, available to offset future taxable income through 2032.
At December 31, 2012 and 2011, we had state net operating loss carryforwards of approximately $12,800,000 and $25,000, respectively, available to offset future losses through 2032. We established valuation allowances equal to the full amount of the deferred tax assets because of the uncertainty of the utilization of the operating losses in future periods. We periodically assess the likelihood that we will be able to recover the deferred tax assets. We consider all available evidence, both positive and negative, including historical levels of income, expectations and risks associated with estimates of future taxable income.
Our deferred tax asset and liability as presented in financial statements consist of the following:
Our provision for income taxes differs from applying the statutory U.S. federal income tax rate to the income before income taxes. The primary differences result from deducting certain expenses for financial statement purposes but for federal income tax purposes.
A reconciliation between taxes computed at the federal statutory rate and the consolidated effective tax rate is as follows:
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NOTE E – INCOME TAXES
With the advent of the Merger, Company management determined that VitaMed would become the sole focus of the Company and previous business performed by Therapeutics was discontinued. Because of these events, deferred income taxes are determined by calculating the loss from operations of the Company from October 4, 2011 to December 31, 2011. Deferred income taxes are determined using the liability method for the temporary differences between the financial reporting basis and income tax basis of the Company’s assets and liabilities. Deferred income taxes are measured based on the tax rates expected to be in effect when the temporary differences are included in the Company’s tax return. Deferred tax assets and liabilities are recognized based on anticipated future tax consequences attributable to differences between financial statement carrying amounts of assets and liabilities and their respective tax bases. As of December 31, 2011, there is no provision for income taxes, current or deferred.
At December 31, 2011, the Company had a net operating loss carry forward of approximately $2.1 million, available to offset future taxable income through 2031. The Company established valuation allowances equal to the full amount of the deferred tax assets due to the uncertainty of the utilization of the operating losses in future periods. The Company periodically assesses the likelihood that it will be able to recover its deferred tax assets. The Company considers all available evidence, both positive and negative, including historical levels of income, expectations and risks associated with estimates of future taxable income.
At December 31, 2011, the differences between the actual income tax benefit and the amount computed by applying the statutory federal tax rate (35%) to the loss before taxes are as follows:
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RELATED PARTIES | NOTE 11 – RELATED PARTIES
Loan Guaranty
In March 2011, VitaMed entered into a Business Loan Agreement and Promissory Note for a $300,000 bank line of credit, or the Bank LOC, for which the bank required personal guarantees and cash collateral. Personal guarantees and cash collateral limited to $100,000 each were provided by Robert Finizio and John Milligan, officers of VitaMed, and by Reich Family LP, an entity controlled by Mitchell Krassan, also an officer of VitaMed. The Bank LOC accrued interest at the rate of 3.02% per annum based on a year of 360 days and was due on March 1, 2012. On March 19, 2012, the bank and VitaMed negotiated a one year extension to the Bank LOC and a subsequent 2-month extension until May 1, 2013.
In consideration for the personal guarantees and cash collateral, we issued warrants for an aggregate of 613,713 shares. On November 13, 2012, we entered into an amendment with the bank to reduce the Bank LOC to $100,000, or the Amended Bank LOC. As part of the Amended Bank LOC, the personal guarantees and cash collateral for Mr. Finizio and Mr. Milligan were released. In accordance with the terms of the warrants, the warrants previously granted to Mr. Finizio and Mr. Milligan were amended to reflect the amount vested prior to the date of the Amended Bank LOC (179,000 each). At June 30, 2013, an aggregate of 562,571 warrants related to this loan guaranty were vested.
In February 2013, we borrowed $100,000 under the Amended Bank LOC. The Amended Bank LOC required a personal guarantee and cash collateral limited to $100,000 which was provided by Reich Family LP. On April 25, 2013, we paid the principal and interest due under the Amended Bank LOC of $100,735. On May 1, 2013, the Amended Bank LOC expired and was not renewed. Accordingly, the personal guarantee was canceled and the cash collateral was returned to Reich Family LP
Lock-Up Agreements
As required by the terms of the merger agreement with VitaMed dated July 18, 2011, the Company entered into Lock-Up Agreements, or the Agreements, with stockholders covering the aggregate of 70,000,000 shares of our common stock issued pursuant to this merger or reserved for issuance pursuant to stock options and warrants. Each stockholder agreed that from the date of the Agreements until 18 months thereafter, or the Lock-Up Period, they would not make or cause any sale of our common stock. After the completion of the Lock-Up Period, each stockholder agreed not to sell or dispose of more than 2.5% of their aggregate common stock or shares reserved for issuance under stock options and warrants per quarter over the following 12-month period, or the Dribble Out Period. Upon the completion of the Dribble Out Period, the Agreements shall terminate.
Purchases by Related Parties
During the six months ended June 30, 2013 and 2012, we sold our products to Dr. Brian Bernick, our Chief Medical Officer and director, in the amounts of $0 and $1,440, respectively, while $0 and $1,272 in receivables related thereto remained outstanding at both June 30, 2013 and December 31, 2012, respectively.
Agreements with Pernix Therapeutics, LLC
On February 29, 2012, Cooper C. Collins, President and largest stockholder of Pernix Therapeutics, LLC, or Pernix, was elected to serve on the Board. The Company entered into a Stock Purchase Agreement with Pernix on October 4, 2011. From time to time, we have entered into agreements with Pernix in the normal course of business primarily for the purchase of inventory. During the six months ended June 30, 2013 and 2012, we made purchases of approximately $0 and $96,250, respectively, from Pernix. At June 30, 2013 and December 31, 2012, there were outstanding amounts due to Pernix of approximately $0 and $308,000, respectively.
Additionally, there were amounts due to us from Pernix for legal fee reimbursement in regards to the Aceto litigation described below in the amounts of $171,261 and $0 for the periods ending June 30, 2013 and December 31, 2012, respectively. |
NOTE 12 RELATED PARTIES
Loan Guaranty
In March 2011, VitaMed entered into a Business Loan Agreement and Promissory Note for a $300,000 bank line of credit (the Bank LOC) for which the bank required personal guarantees and cash collateral. Personal guarantees and cash collateral limited to $100,000 each were provided by Robert Finizio and John Milligan, officers of VitaMed, and by Reich Family Limited Partnership, an entity controlled by Mitchell Krassan, also an officer of VitaMed. The Bank LOC accrued interest at the rate of 3.020% per annum based on a year of 360 days and was due on March 1, 2012. The bank and VitaMed negotiated a one year extension to the Bank LOC which was executed on March 19, 2012 (the Bank LOC Extension).
The Bank LOC Extension accrues interest at the rate of 2.35% and is due on March 1, 2013. In consideration for the personal guarantees and cash collateral, VitaMed issued VitaMed Warrants for an aggregate of 499,998 Units (or Company Warrants for an aggregate of 613,713 shares pursuant to the Conversion Ratio). The Company Warrants vest at the rate of an aggregate of 76,714 shares per calendar quarter end and have an exercise price of $0.2444 per share. In the event that the bank loan is repaid prior to being fully vested, the Company Warrants will be reissued only for the number of shares vested through the date of repayment. On November 13, 2012, the then outstanding balance of $299,220 was repaid in full and the Company and the bank amended the Business Loan Agreement and Promissory Note to reflect a $100,000 bank line of credit (the Amended Bank LOC). As part of the Amended Bank LOC, the personal guarantees and cash collateral were removed for Mr. Finizio and Mr. Milligan. In accordance with the terms of the Company Warrants, the Company Warrants previously granted to Mr. Finizio and Mr. Milligan have been amended to reflect the amount vested prior to the date of the Amended Bank LOC (179,000 each). At December 31, 2012, an aggregate of 562,571 Company Warrants were vested.
Loans from Affiliates
In June 2011, VitaMed issued Promissory Notes (the VitaMed Promissory Notes) in the aggregate principal amount of $500,000 of which $100,000 was sold to affiliates (the Affiliate Notes). In June 2012, the Affiliate Notes were extended to October 15, 2012 (one held by Mr. Milligan for $50,000 and one for $50,000 held by BF Investments, LLC (owned by Brian Bernick, a member of the board of directors of our company). On October 4, 2012 these VitaMed Promissory Notes were paid in full including $5,341 in accrued interest.
In December 2011, we issued 4% promissory notes to Mr. Finizio and Mr. Milligan and for an aggregate of $100,000 ($50,000 each) with original due dates of March 1, 2012. These promissory notes were extended by mutual agreement to June 1, 2012. In June 2012, the VitaMed Promissory Note held by Mr. Finizio was paid in full, including $888 in accrued interest. Mr. Milligans VitaMed Promissory Note was extended to October 15, 2012. On October 4, 2012 this VitaMed Promissory Notes was paid in full including $1,519 in accrued interest.
Lock Up Agreements
As required by of the Merger Agreement, a Lock Up Agreement (Agreement) was entered into between us and security holders covering the aggregate of 70,000,000 shares of our Common Stock issued pursuant to the Merger or reserved for issuance pursuant to Company Options and Company Warrants. Each security holder agreed that from the date of the Agreement until 18 months thereafter (the Lock-Up Period), they would not make or cause any sale of our securities. After the completion of the Lock-Up Period, the security holder agreed not to sell or dispose of more than 2.5% of the aggregate Common Stock or shares reserved for issuance for Company Options and Company Warrants per quarter over the following 12 month period (the Dribble Out Period). Upon the completion of the Dribble Out Period, the Agreements shall terminate.
Purchases by Related Parties
During 2012 and 2011, we sold our products to Dr. Brian Bernick, a director of our company, in the amounts of $2,632 and $20,669, respectively, while $1,272 and $0 of receivables related thereto remained outstanding at December 31, 2012 and 2011, respectively.
Agreements with Pernix Therapeutics, LLC
On February 29, 2012, Cooper C. Collins, President and largest shareholder of Pernix Therapeutics, LLC (Pernix), was elected to serve on our Board of Directors. We closed a Stock Purchase Agreement with Pernix on October 5, 2011. From time to time, we have entered and will continue to enter into agreements with Pernix in the normal course of business. All such agreements are reviewed by independent directors or a committee consisting of independent directors. During the years ended December 31, 2012 and 2011, we made purchases of approximately $404,000 and $19,000, respectively, from Pernix. At December 31, 2012 and 2011, there were amounts due Pernix of approximately $308,000 and 19,000 outstanding, respectively.
Warrants assigned to Related Party
In June 2012, a 100,000 Company Warrant was assigned to the son of Chairman of our Board of Directors by a non-affiliated third party. |
NOTE K – RELATED PARTIES
Loan Guaranty
On March 7, 2011, VitaMed entered into a Business Loan Agreement and Promissory Note for a $300,000 bank line of credit (the “Bank LOC”) for which the bank required a personal guarantee and cash collateral. Personal guarantees and cash collateral limited to $100,000 each were provided by Robert Finizio and John Milligan, officers of VitaMed, and by Reich Family Limited Partnership, an entity controlled by Mitchell Krassan, also an officer of VitaMed. The Bank LOC accrued interest at the rate of 3.020% per annum based on a year of 360 days and was due on March 1, 2012. The bank and VitaMed negotiated a one-year extension to the Bank LOC which was executed on March 19, 2012 (the “Bank LOC Extension”). The Bank LOC Extension accrues interest at the rate of 2.35% and is due on March 1, 2013. In consideration for the personal guarantees and cash collateral, VitaMed issued VitaMed Warrants for an aggregate of 499,998 Units (or Company Warrants for an aggregate of 613,713 shares pursuant to the Conversion Ratio). The ten-year Warrants vest at the rate of an aggregate of 76,714 shares per calendar quarter end and have an exercise price of $0.2444 per share. In the event that the bank loan is repaid prior to being fully vested, the Company Warrants will be reissued only for the number of shares vested through the date of repayment. At March 31, 2012, an aggregate of 306,867 shares will be vested thereunder.
Loans from Affiliates
The VitaMed Promissory Notes for an aggregate of $500,000 (see NOTE I -- NOTES PAYABLE) included an aggregate of $200,000 being issued to certain officers and directors of the Company. John Milligan, President and Director, and Dr. Brian Bernick, Director, were issued VitaMed Promissory Notes for $50,000 each. Reich Family LP, an entity controlled by Mitchell Krassan, Executive Vice President, and Fourth Generation Equity Partners, LLC (“Fourth Generation”), an entity controlled by Nick Segal, a director of VitaMed at the time of the issuance, were issued VitaMed Promissory Notes for $50,000 each. The VitaMed Promissory Notes bear interest at the rate of four percent (4%) per annum. On October 6, 2011, (i) principal and interest of approximately $50,696 under the Note to Reich Family LP was repaid, (ii) principal and interest of approximately $50,696 under the Note to Fourth Generation was converted into 133,411 shares of the Company’s Common Stock at $0.38 per share, and (iii) the due date for the VitaMed Promissory Notes to Mr. Milligan and Dr. Bernick was extended to March 1, 2012. As mentioned hereinafter in FOOTNOTE O – SUBSEQUENT EVENTS, the VitaMed Promissory Notes to Mr. Milligan and Dr. Bernick were further extended by mutual agreement to April 14, 2012.
The 4% Promissory Notes issued in the aggregate of $100,000 (see NOTE I -- NOTES PAYABLE) included one issued to Robert Finizio, Chief Executive Officer and Director, and one issued to John Milligan, President and Director, in the amount of $50,000 each.
Lock Up Agreements
As required by of the Merger Agreement, a Lock Up Agreement (“Agreement”) was entered into between the Company and security holders covering the aggregate of 70,000,000 shares of the Company’s Common Stock issued pursuant to the Merger or reserved for issuance pursuant to Company Options and Company Warrants. Each security holder agreed that from the date of the Agreement until eighteen (18) months thereafter (the “Lock-Up Period”), they would not make or cause any sale of the Company’s securities. After the completion of the Lock-Up Period, the security holder agreed not to sell or dispose of more than 2.5 percent (2.5%) of the aggregate Common Stock or shares reserved for issuance for Company Options and Company Warrants per quarter over the following twelve (12) month period (the “Dribble Out Period”). Upon the completion of the Dribble Out Period, the Agreements shall terminate.
Sales to Related Parties
During 2011 and 2010, the Company sold its products to Dr. Brian Bernick, a director of the Company, in the amounts of $20,669 and $25,269, respectively. At December 31, 2011 and 2010, $0 and $79, respectively, remained outstanding.
Agreements with Pernix Therapeutics, LLC
As previously mentioned the Company closed a Stock Purchase Agreement with Pernix on October 4, 2011. From time to time, the Company has, and will continue to, enter into agreements with Pernix in the normal course of business, which agreements are, and will be negotiated in, arms-length transactions. The President and largest shareholder of Pernix, Cooper C. Collins, was recently elected to serve on the Company’s Board of Directors.
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The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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BUSINESS CONCENTRATIONS
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BUSINESS CONCENTRATIONS | NOTE 12 - BUSINESS CONCENTRATIONS
We purchase our products from several suppliers with approximately 98% and 87% of our purchases were supplied from one vendor for the six months ended June 30, 2013 and 2012, respectively.
We sell our prescription dietary supplement products to wholesale distributors, specialty pharmacies, specialty distributors, and chain drug stores that generally sell products to retail pharmacies, hospitals, and other institutional customers. Revenue generated from sales to two customers, Cardinal Health, Inc. and McKesson Corporation accounted for 62% and 36% of our recognized revenue for the six months ended June 30, 2013 and 2012, respectively.
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NOTE 13 - BUSINESS CONCENTRATIONS
We purchase our products from several suppliers, with approximately 76% and 95% of our purchases from one supplier for the years ended December 31, 2012 and 2011, respectively.
We sell our prescription dietary supplement products to wholesale distributors, specialty pharmacies, specialty distributors, and chain drug stores that generally sell products to retail pharmacies, hospitals, and other institutional customers. For the year ended December 31, 2012, 28% of our recognized revenue and 98% of our deferred revenue was generated from sales to only three customers: AmerisourceBergen Corporation, Cardinal Health, Inc., and McKesson Corporation. We did not sell to these customers in prior years. |
NOTE L - BUSINESS CONCENTRATIONS
The Company purchases its products from several suppliers with approximately 95% and 93% coming from one supplier for the years ended December 31, 2011 and 2010, respectively.
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The entire disclosure for any concentrations existing at the date of the financial statements that make an entity vulnerable to a reasonably possible, near-term, severe impact. This disclosure informs financial statement users about the general nature of the risk associated with the concentration, and may indicate the percentage of concentration risk as of the balance sheet date. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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COMMITMENTS AND CONTINGENCIES
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COMMITMENTS AND CONTINGENCIES | NOTE 13 – COMMITMENTS AND CONTINGENCIES
Office Lease
We lease administrative office space in Boca Raton, Florida pursuant to a 63 month non-cancelable operating lease commencing on July 1, 2013 and expiring on September 30, 2018. The lease stipulates, among other things, average base monthly rents of $28,442 (inclusive of estimated operating expenses) and sales tax, for a total future minimum payments over the life of the lease of $1,791,900.
The rental expense related to our prior lease which expired June 30, 2013 totaled $60,168 and $56,918 for the six months ended June 30, 2013 and 2012, respectively.
Litigation
We are party to various legal actions arising in the ordinary course of business, including actions related to our intellectual property. While it is not feasible to determine the actual outcome of these actions at this time, we do not believe that these matters, including those described below, will have a material adverse effect on our consolidated financial condition, results of operations, or cash flows.
Aceto Corporation
On November 13, 2012, Aceto Corporation filed a lawsuit against TherapeuticsMD and Boca-Green in the United States District Court for the Southern District of Florida seeking to enjoin us from using the Quatrefolic product and trademarks, among other things. On July, 17, 2013, the Court dismissed Aceto Corporation’s Complaint with leave to file an Amended Complaint on or before August 5, 2013. Based on our assessment of the case which is in the discovery stage, we believe that the case is without merit and, as a result, should not have a material adverse effect on our consolidated financial condition, results of operations, or cash flows.
Avion Pharmaceuticals, LLC
On November 30, 2012, Avion Pharmaceuticals, LLC, filed a lawsuit against TherapeuticsMD and Boca- Green in the United States District Court for the Northern District of Georgia seeking to enjoin us from using the Prena1 name, among other things. Based on our assessment of the case which is in the discovery stage, we believe that the case is without merit and, as a result, should not have a material adverse effect on our consolidated financial condition, results of operations, or cash flows.
For additional information on these litigation matters, see our Annual Report on Form 10-K for the year ended December 31, 2012.
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NOTE 14 COMMITMENTS AND CONTINGENCIES
Operating Lease
We lease administrative and distribution facilities in Boca Raton, Florida pursuant to a 45 month non-cancelable operating lease expiring in 2013. The lease stipulates, among other things, base monthly rents ranging from $5,443 to $5,933 over the term of the lease plus our share of monthly estimated operating expenses of $3,500 and sales tax. The lease expires May 31, 2013 and we believe we will be able to extend the lease in a manner adequate to meet our current needs.
The rental expense related to this lease totaled $106,315 and $122,752 for the years ended December 31, 2012 and 2011, respectively. Future minimum rental payments through May 31, 2013 total $29,667.
Employment Agreements
On November 8, 2012, the Compensation Committee of our Board of Directors recommended that the Board of Directors approve employment agreements with our executive officers, namely: Chief Executive Officer (Robert G. Finizio), President (John C.K. Milligan, IV) and Chief Financial Officer (Daniel A. Cartwright) (each an Executive; together the Executives). Our Board of Directors approved the Employment Agreements with an effective date of November 8, 2012. With the exception of compensation, the three-year employment agreements are substantially the same with the Executives receiving employee benefits, vacation and other perquisites as may be determined from time to time and an automatic renewal option for one additional year. Conditions of termination for all employment agreements call for (i) termination immediately upon death, (ii) termination upon a disability in which the Executive is unable to perform his duties for more than 180 total calendar days during any 12-month period, (iii) voluntary termination by the Executive upon a 14 calendar day prior notice, (iv) involuntary termination by our company without cause with 60-day notice or 90-day notice when termination is due to the non-extension of the employment term by our company, (v) termination for cause and (vi) termination for good reason wherein the Executive shall have 90 days from the date of notice to terminate his employment. In addition, if we are subject to a change in control, the Executive shall be entitled to receive severance benefits as outlined therein. The employment agreements contain standard provisions for confidentiality and noncompetition.
Compensation for services rendered by Robert G. Finizio as Chief Executive Officer calls for: (i) a time-based ten-year stock option (the Time-Based Option) granted and issued on November 30, 2012 (Date of Grant) to purchase 900,000 shares of our Common Stock with the exercise price equal to the closing price of our Common Stock on the Date of Grant with the underlying shares vesting annually over three years on the anniversary of the employment date, (ii) the right to receive a performance-based ten-year stock option (the Performance-Based Option) in an amount to be determined, (iii) a base salary of not less than $355,100 per year and (iv) an annual short-term incentive compensation bonus of up to 35% of the base salary, at the discretion of our Board of Directors.
Compensation for services rendered by John C.K. Milligan, IV as President calls for: (i) a Time-Based Option granted and issued on the Date of Grant to purchase 800,000 shares of our Common Stock with the exercise price equal to the closing price of our Common Stock on the Date of Grant with the underlying shares vesting annually over three years on the anniversary of the employment date, (ii) the right to receive a Performance-Based Option in an amount to be determined, (iii) a base salary of not less than $288,100 per year and (iv) an annual short-term incentive compensation bonus of up to 30% of the base salary, at the discretion of our Board of Directors.
Compensation for services rendered by Daniel A. Cartwright as Chief Financial Officer calls for: (i) a Time-Based Option granted and issued on the Date of Grant to purchase 700,000 shares of our Common Stock with the exercise price equal to the closing price of our Common Stock on the Date of Grant with the underlying shares vesting annually over three years on the anniversary of the employment date, (ii) the right to receive a Performance-Based Option in an amount to be determined, (iii) a base salary of not less than $257,100 per year and (iv) an annual short-term incentive compensation bonus of up to 30% of the base salary, at the discretion of our Board of Directors.
The employment agreements provide that as soon as reasonably practicable, we shall file a Form S-8 registration statement, subsequent to any S-1 or S-3 registration statement, to register the issuance of shares under the Time-Based Options.
In addition, should we experience a change in control, the executives are entitled to receive severance benefits in conjunction with a qualifying termination or Change in Control (CIC) Severance Benefits. A qualifying termination includes the occurrence of any one or more of the following events on or after the date of the announcement of a transaction which would lead to a change in control and up to 12 months following the date of the change of control shall trigger the payment of CIC Severance Benefits: (a) an involuntary termination of the Executives employment by us for reasons other than cause, death or disability, and (b) the voluntary termination by the Executive for Good Reason as evidenced by a Notice of Termination delivered to the us by the Executive. CIC Severance Benefits include (i) an amount equal to 1.0 to 1.5 times the Executives annual Base Salary established for the fiscal year in which the termination occurs, (ii) an amount equal to 1,0 to 1.5 times the Executives Targeted Annual Bonus Award established for the fiscal year in which the termination occurs, (iii) an amount equal to the Executives unpaid Base Salary and accrued but unused vacation pay through the date of termination, (iv) all outstanding long-term incentive awards shall accelerate and become fully vested, (v) a continuation of the welfare benefits of health care, life and accidental death and dismemberment, and disability insurance coverage for 1.0 to 1.5 years after the termination. The payment of the CIC Severance Benefits mentioned herein shall be paid in cash to the Executive in a single lump sum within sixty (60) days of termination.
Litigation
We are party to various legal actions arising in the ordinary course of business, including actions related to our intellectual property. While it is not feasible to determine the actual outcome of these actions at this time, we do not believe that these matters, including those described below, will have a material adverse effect on our consolidated financial condition, results of operations, or cash flows.
Aceto Corporation
On November 13, 2012, Aceto Corporation filed a lawsuit against our company in the United States District Court for the Southern District of Florida. The lawsuit alleges, among other things, that we are improperly obtaining and using the Quatrefolic product and related trademarks that we have acquired pursuant to an allegedly invalid sublicense with Pernix Therapeutics, LLC, a subsidiary of Pernix Therapeutics Holdings, Inc., or Pernix. Cooper C. Collins, a member of our Board of Directors, is the President, Chief Executive Officer, and a director of Pernix. The lawsuit seeks to enjoin us from using the Quatrefolic products and trademarks, in addition to unspecified actual and punitive damages. We filed a motion to dismiss on January 2, 2013, as amended on February 27, 2013. Based on our initial assessment of the case which is in the pre-discovery stage, we believe that the case is without merit and, as a result, should not have a material adverse effect on our consolidated financial condition, results of operations, or cash flows.
Avion Pharmaceuticals, LLC
On November 30, 2012, Avion Pharmaceuticals, LLC (Avion), filed a lawsuit against our company in the United States District Court for the Northern District of Georgia. The lawsuit alleges, among other things, unfair competition and trademark infringement against Avions Prenate trademarks based on the use of our Prena1 branded products which we launched in November 2012. The lawsuit seeks to enjoin us from using the Prena1 name, in addition to unspecified actual and punitive damages. We filed an answer and counterclaim on January 17, 2013, as amended on February 27, 2013. Based on our initial assessment of the case which is in the early discovery stage, we believe that the case is without merit and, as a result, should not have a material adverse effect on our consolidated financial condition, results of operations, or cash flows. |
NOTE M – COMMITMENTS AND CONTINGENCIES
The Company leases administrative and distribution facilities in Boca Raton, Florida pursuant to a forty-five month non-cancelable operating lease expiring in 2013. The lease stipulates, among other things, base monthly rents of $5,443 plus the Company’s share of monthly estimated operating expenses of $3,500 and sales tax. The lease contains one renewal option for an additional two-year period.
The rental expense related to this lease totaled $106,315 and $116,175 for the years ended December 31, 2011 and 2010.
As of December 31, 2011, future minimum rental payments are as follows:
In December 2011, the Company paid approximately $245,000 to a non-affiliated third party for fees related to research and development of new products. The Company believes that it could incur additional related fees up to $950,000 in 2012.
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The entire disclosure for commitments and contingencies. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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SUBSEQUENT EVENTS
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Dec. 31, 2011
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Subsequent Events [Abstract] | ||
SUBSEQUENT EVENTS | NOTE 15 SUBSEQUENT EVENTS
Revolving Credit Note
On January 31, 2013, we issued a Multiple Advance Revolving Credit Note (the Note) to Plato and Associates, LLC, a Missouri limited liability company (Plato). The Note allows us to draw down funding up to the $10 million maximum principal amount, at a stated interest rate of 6% per annum (the Stated Interest Rate). Plato may make advances to us from time to time under the Note at our request, which advances will be of a revolving nature and may be made, repaid, and made from time to time. Interest payments shall be due and payable on the tenth day following the end of each calendar quarter in which any interest is accrued and unpaid, commencing on April 10, 2013, and the principal balance outstanding under the Note, together with all accrued interest and other amounts payable under the Note, if any, will be due and payable on February 24, 2014. The default interest rate under the Note will be a per annum rate equal to the Stated Interest Rate plus eight percentage points (the Default Interest Rate), and the principal amount outstanding under the Note shall bear interest at the Default Interest Rate upon the occurrence of an event of default as specified in the Note, including, our nonpayment of amounts due under the Note or our failure to comply with any provision of the Note, among others.
As additional consideration for the Note, we issued Plato a warrant to purchase 1,250,000 shares of our Common Stock at an exercise price $3.20 per share (the Warrant). The Warrant will vest and become exercisable on October 31, 2013 and may be exercised any time after that date prior to the January 31, 2019 expiration date of the Warrant. These Warrants, with a fair value of approximately $1.7 million, were valued on the date of the grant using a term of six years; a volatility of 44.29%; risk free rate of 0.88%; and a dividend yield of 0%. As of March 7, 2013 we had drawn $200,000 from this Note.
March 2013 Prospectus Supplement
On March 7, 2013 we filed a Prospectus Supplement for an underwritten public offering of our common stock with anticipated gross proceeds of $50 million. The securities being offered by us are pursuant to a shelf registration statement previously filed with the Securities and Exchange Commission (the SEC) on January 25, 2013, which the SEC declared effective on February 5, 2013. We intend to use the proceeds of the offering for general corporate purposes, including funding our Phase 3 clinical trials for our proposed hormone therapy products. Jefferies LLC is acting as sole book-running manager for the offering, and Noble Financial Capital Markets is acting as co-manager for the offering. |
NOTE O – SUBSEQUENT EVENTS
Formation of New Subsidiary
On January 10, 2012, the Company formed a new wholly owned subsidiary, BocagreenMD, Inc., a Nevada corporation, for the purpose of selling certain of its products to select markets.
Issuance of Promissory Notes
Between January 2012 and February 10, 2012, the Company issued Promissory Notes for an aggregate of $700,000 (the “Notes”). The Notes bore interest at a rate of six (6%) per annum and were due on March 1, 2012. The Notes were repaid on February 24, 2012 through the issuance of Secured Promissory Notes as outlined below.
Issuance of Secured Promissory Notes
On February 24, 2012, TherapeuticsMD, Inc. (the “Company”) sold and issued Secured Promissory Notes (the “Notes”) to Steven G. Johnson (“Johnson”) and Plato & Associates, LLC (“Plato”) in the principal base amount of $1,358,014 and $1,357,110 respectively (the “Principal Base Amount(s)”) pursuant to the terms of that certain Note Purchase Agreement (the “Note Purchase Agreement”) of even date therewith. As consideration for the Notes, Johnson and Plato surrendered certain promissory notes previously issued by the Company in the aggregate amount of $858,014 and $857,110 respectively (which sums include principle and interest through February 24, 2011) (collectively known as the “Prior Notes”). As a result of the foregoing the Company received an aggregate of $1,000,000 of new funding from Johnson and Plato. On March 23, 2012, each of Johnson and Plato loaned the Company an additional $500,000 under the Notes for an aggregate of $1,000,000.
The Principal Base Amount of each Note, plus any and all additional advances made to the Company thereafter (the “Aggregated Principal Amount”), together with accrued interest at the annual rate of six percent (6%), is due in one lump sum payment twenty-four (24) months from the date of issuance of the Notes (the “Maturity Date”). As security for the Company’s obligations under the Note Purchase Agreement and the Notes, the Company entered into a Security Agreement of even date therewith and pledged all of its assets, tangible and intangible, as further described therein.
As an inducement for the Purchasers to lend additional funds to the Company as outlined therein on Schedule I to the Note Purchase Agreement, and for the Purchaser’s leniency to, in essence, extend the maturity date of the Prior Notes for an additional twenty-four month period, the Purchasers, and/or assigns, received Company Warrant(s) to purchase an aggregate of 9,000,000 Shares. The Company Warrant(s) shall terminate on the date that is five (5) years from the date of the issuance of the Notes and shall have an exercise price of $0.38 per share. The Company is currently evaluating and quantifying the affect of the issuance of the Company Warrants on its financial statements.
Extension and/or Payment of Promissory Notes
As previously mentioned herein, on June 1, 2011, VitaMed Promissory Notes in the aggregate of $500,000. The due date for three of the VitaMed Promissory Notes in the aggregate of $150,000 had previously been extended to March 1, 2012. Two of the VitaMed Promissory Notes were further extended to April 14, 2012 and the other was further extended to June 1, 2012.
In November and December, 2011, the Company sold six-percent Promissory Notes for an aggregate of $800,000 with due dates of March 1, 2012. As mentioned hereinabove, these Notes were paid in full on February 24, 2011 through the issuance of Secured Promissory Notes to Johnson and Plato.
In December 2011, the Company sold four-percent Promissory Notes for an aggregate of $100,000 with due dates of March 1, 2012. These Notes were further extended by mutual agreement to April 14, 2012.
As previously mentioned herein, the Bank LOC in the principle amount of $300,000 was extended until March 1, 2013.
Approval of 2012 Stock Incentive Plan
On February 23, 2012, the Company’s Board of Directors adopted the 2012 Stock Incentive Plan, a non-qualified plan not requiring approval by the Company’s shareholders (“2012 SOP”). There are 10,000,000 shares authorized for issuance thereunder. No shares have been issued under the 2012 SOP.
Election of Additional Directors
On February 29, 2012, the Company’s Board of Directors elected four additional individuals to serve as members of its Board of Directors, including: Samuel A. Greco, Cooper Collins, Robert V. LaPenta, Jr. and Nicholas Segal.
Issuance of Company Options
On February 27, 2012, the Company issued Company Options to Robert G. Finizio and John Milligan, officers and directors of the Company. The ten-year Company Options are for 300,000 shares each and have an exercise price of $2.20 per share. The Company Options vest in full on February 27, 2013.
Approval of Committee Charters and Committee Appointments
On February 29, 2012, the Company’s Board of Directors (i) approved charters for each of the Audit Committee, Compensation Committee and Corporate Governance Committee, (ii) appointed members to each committee and (iii) named a Chair of each committee.
Members of the Audit Committee include Robert V. LaPenta, Jr., Samuel A. Greco and Nicholas Segal. Mr. LaPenta, Jr. will serve as Chair.
Members of the Compensation Committee include Cooper Collins, Robert G. Finizio and Nicholas Segal. Mr. Collins will serve as Chair.
Members of the Corporate Governance Committee include John C.K. Milligan, IV, Brian Bernick and Robert LaPenta, Jr. Mr. Milligan will serve as Chair.
Release of First Prescription Product
On March 1, 2012, the Company launched its first prescription prenatal vitamin, vitaMedMD™ Plus Rx, a single-dose product containing one prenatal vitamin tablet and one life’s DHA™ capsule.
Cancelation of Options
Between January 1, 2012 and March 24, 2011, Company Options for an aggregate of 5,000 shares were canceled due to expiration of the Company Option or termination of the employee.
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The entire disclosure for significant events or transactions that occurred after the balance sheet date through the date the financial statements were issued or the date the financial statements were available to be issued. Examples include: the sale of a capital stock issue, purchase of a business, settlement of litigation, catastrophic loss, significant foreign exchange rate changes, loans to insiders or affiliates, and transactions not in the ordinary course of business. No definition available.
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RESTATEMENT OF 2010 AUDITED FINANCIALS
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RESTATEMENT |
NOTE N RESTATEMENT OF 2010 AUDITED FINANCIALS
Subsequent to the filing of the Companys Current Report on Form 8-K, Amendment 3 filed on December 9, 2011, the Company determined that an error was made in certain assumptions used in the Black-Scholes calculation to determine the fair value of options issued from inception through December 31, 2010.
For the year ended December 31, 2010, $363,750 was recorded as non-cash compensation on the audited financial statements of VitaMed. The Company determined that the fair value should have been $177,601, an overstatement of $186,149. The Company is restating sales, general and administration for the year ended December 31, 2010 to include the $186,149 reduction in non-cash compensation expense.
For the period from inception through December 31, 2010, $559,917 was recorded as non-cash compensation on the audited financial statements of VitaMed, of which $196,167 pertains to the period from May 13, 2008 (Inception) through December 31, 2009. The Company determined that the fair value should have been $283,530, of which $105,929 pertains to the period from Inception through December 31, 2009, an overstatement of $276,387, of which $90,238 pertains to the period from Inception through December 31, 2009. The Company is restating accumulated deficit for the year ended December 31, 2010 to include the $276,387 reduction for the year ended December 31, 2010 and the $90,238 reduction for the period from Inception through December 31, 2009.
The tables below summarize the impact of the restatements.
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The entire disclosure for reporting accounting changes and error corrections. It includes the conveyance of information necessary for a user of the Company's financial information to understand all aspects and required disclosure information concerning all changes and error corrections reported in the Company's financial statements for the period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)
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Principles of Consolidation | Principles of Consolidation
The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, vitaMed and BocaGreen. All material intercompany balances and transactions have been eliminated in consolidation. |
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiary. All material intercompany balances and transactions have been eliminated in consolidation. |
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Cash | Cash
We maintain cash at financial institutions and, at times, balances may exceed federally insured limits. We have never experienced any losses related to these balances. All of our non-interest bearing cash balances were fully insured at December 31, 2012 and 2011 due to a temporary federal program in effect from December 31, 2010 through December 31, 2012. Under the program, there is no limit to the amount of insurance for eligible accounts.
Beginning 2013, insurance coverage will revert to $250,000 per depositor at each financial institution, at which time our non-interest bearing cash balances may again exceed federally insured limits. We had no interest-bearing amounts on deposit in excess of federally insured limits at December 31, 2012 and 2011.
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Cash and Cash Equivalents
Cash is maintained at financial institutions and, at times, balances may exceed federally insured limits. The Company has never experienced any losses related to these balances. All of our non-interest bearing cash balances were fully insured at December 31, 2011 and 2010 due to a temporary federal program in effect from December 31, 2010 through December 31, 2012. Under the program, there is no limit to the amount of insurance for eligible accounts. Beginning 2013, insurance coverage will revert to $250,000 per depositor at each financial institution, and our non-interest bearing cash balances may again exceed federally insured limits. The Company had no interest-bearing amounts on deposit in excess of federally insured limits at December 31, 2011 and 2010.
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Trade Accounts Receivable and Allowance for Doubtful Accounts | Trade Accounts Receivable and Allowance for Doubtful Accounts
Trade accounts receivable are customer obligations due under normal trade terms. We review accounts receivable for uncollectible accounts and credit card charge-backs and provide an allowance for doubtful accounts which is based upon a review of outstanding receivables, historical collection information, and existing economic conditions. We consider trade accounts receivable past due more than 90 days to be delinquent. We write-off delinquent receivables to bad debt expense based on individual credit evaluations, results of collection efforts, and specific circumstances of the customer. Recoveries of accounts previously written off are recorded as reductions of bad debt expense when received. Historically, our bad debt expense has been limited because the majority of our trade receivables are paid via credit card. To the extent data we use to calculate these estimates does not accurately reflect bad debts; adjustments to these reserves may be required. At December 31, 2012 and 2011, we recorded an allowance for doubtful accounts of $42,048 and $1,500, respectively. |
Trade Accounts Receivable and Allowance for Doubtful Accounts
Trade accounts receivable are customer obligations due under normal trade terms. The Company reviews the accounts receivable for uncollectible accounts and credit card charge-backs and provides an allowance for doubtful accounts which is based upon a review of outstanding receivables, historical collection information and existing economic conditions. Trade accounts receivable past due more than 90 days are considered delinquent. Delinquent receivables are written off to bad debt expense based on individual credit evaluations, results of collection efforts, and specific circumstances of the customer. Recoveries of accounts previously written off are recorded as reductions of bad debt expense when received. Historically, our bad debt expense has been limited because the majority of our trade receivables are paid via credit card. Data we use to calculate these estimates does not accurately reflect bad debts; adjustments to these reserves may be required. At December 31, 2011 and 2010, the Company recorded an allowance for doubtful accounts of $1,500 and $0, respectively.
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Inventories | Inventories
Inventories represent packaged nutritional products and supplements and raw materials which are valued at the lower of cost or market using the average cost method. The costs of manufacturing the prescription products associated with the deferred revenue (as discussed in Revenue Recognition) are recorded as deferred costs, which are included in inventory, until such time as the related deferred revenue is recognized.
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Inventories
Inventories represent packaged nutritional products and supplements which are valued at the lower of cost or market using the average cost method. |
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Fixed Assets | Fixed Assets
Equipment-We state equipment at cost, net of accumulated depreciation. Maintenance costs, which do not significantly extend the useful lives of the respective assets, and repair costs are charged to operating expense as incurred. We compute depreciation using the straight-line method over the estimated useful lives of the related assets, which range from three to seven years. Depreciation expense totaled $19,904 and $23,962 for the years ended December 31, 2012 and 2011, respectively.
Leasehold Improvements-We state improvements at cost, net of accumulated depreciation. We compute depreciation using the straight-line method over the remaining term of the lease. Depreciation expense totaled $7,580 and 1,724 for the years ended December 31, 2012 and 2011, respectively. |
Fixed Assets
Property and Equipment-Property and equipment is stated at cost, net of accumulated depreciation. Maintenance costs, which do not significantly extend the useful lives of the respective assets, and repair costs are charged to operating expense as incurred. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets, which range from 3 to 7 years. Depreciation expense totaled $25,686 and $5,105 for the years ended December 31, 2011 and 2010, respectively.
Website-Costs incurred in the planning stage of a website are expensed, while costs incurred in the development stage are capitalized and amortized over the estimated three-year life of the asset. Amortization of website development costs totaled $29,159 and $17,678 for the years ended December 31, 2011 and 2010, respectively.
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Intangible Assets | Intangible Assets
Patent and Trademarks-We have adopted the provisions of Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 350 Intangible-Goodwill and Other (ASC 350). Capitalized patent costs, net of accumulated amortization, include legal costs incurred for a patent application. In accordance with ASC 350, once the patent is granted, we amortize the capitalized patent costs over the remaining life of the patent using the straight-line method. If the patent is not granted, we write-off any capitalized patent costs at that time. Intangible assets are reviewed annually for impairment or when events or circumstances indicate that their carrying amount may not be recoverable.
There was no amortization expense related to patent costs for the years ended December 31, 2012 and 2011 as patents have not yet been granted.
Website Costs-We expense costs incurred in the planning stage of a website, while costs incurred in the development stage are capitalized and amortized over the estimated three year life of the asset. Amortization of website development costs totaled $28,776 and $29,159 for the years ended December 31, 2012 and 2011, respectively.
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Intangible Assets
The Company has adopted the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification 350 Intangible-Goodwill and Other (“ASC 350”).
Capitalized patent costs, net of accumulated amortization, include legal costs incurred for a patent application. In accordance with ASC 350, once the patent is granted, the Company will amortize the capitalized patent costs over the remaining life of the patent using the straight-line method. If the patent is not granted, the Company will write-off any capitalized patent costs at that time. Intangible assets are reviewed annually for impairment or when events or circumstances indicate that their carrying amount may not be recoverable. There was no amortization expense related to patent costs for the years ended December 31, 2011 and 2010 as patents have not yet been granted. |
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Impairment of Long-Lived Assets | Impairment of Long-Lived Assets
We review the carrying values of property and equipment and finite-lived intangible assets for impairment whenever events or changes in circumstances indicate that their carrying values may not be recoverable. Such events or circumstances include, but are not limited to, the following:
If impairment indicators are present, we determine whether an impairment loss should be recognized by testing the applicable asset or asset groups carrying value for recoverability. This test requires long-lived assets to be grouped at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities, the determination of which requires judgment. We estimate the undiscounted future cash flows expected to be generated from the use and eventual disposal of the assets and compare that estimate to the respective carrying values in order to determine if such carrying values are recoverable. This assessment requires the exercise of judgment in assessing the future use of and projected value to be derived from the eventual disposal of the assets to be held and used. Assessments also consider changes in asset utilization, including the temporary idling of capacity and the expected timing for placing this capacity back into production. If the carrying value of the assets is not recoverable, then a loss is recorded for the difference between the assets fair value and respective carrying value. We determine the fair value of the assets using an income approach based upon a forecast of all the expected discounted future net cash flows associated with the subject assets. Some of the more significant estimates and assumptions include market size and growth, market share, projected selling prices, manufacturing cost, and discount rate. We base estimates upon historical experience, our commercial relationships, market conditions, and available external information about future trends. We believe our current assumptions and estimates are reasonable and appropriate; however, unanticipated events and changes in market conditions could affect such estimates, resulting in the need for an impairment charge in future periods. |
Impairment of Long-Lived Assets
Carrying values of property and equipment and finite-lived intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that their carrying values may not be recoverable. Such events or circumstances include, but are not limited to:
If impairment indicators are present, the Company determines whether an impairment loss should be recognized by testing the applicable asset or asset group’s carrying value for recoverability. This test requires long-lived assets to be grouped at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities, the determination of which requires judgment. The Company estimates the undiscounted future cash flows expected to be generated from the use and eventual disposal of the assets and compares that estimate to the respective carrying values in order to determine if such carrying values are recoverable. This assessment requires the exercise of judgment in assessing the future use of and projected value to be derived from the eventual disposal of the assets to be held and used. Assessments also consider changes in asset utilization, including the temporary idling of capacity and the expected timing for placing this capacity back into production. If the carrying value of the assets is not recoverable, then a loss is recorded for the difference between the assets’ fair value and respective carrying value. The fair value of the assets is determined using an “income approach” based upon a forecast of all the expected discounted future net cash flows associated with the subject assets. Some of the more significant estimates and assumptions include: market size and growth, market share, projected selling prices, manufacturing cost and discount rate. The Company’s estimates are based upon its historical experience, its commercial relationships, market conditions and available external information about future trends. The Company believes its current assumptions and estimates are reasonable and appropriate; however, unanticipated events and changes in market conditions could affect such estimates, resulting in the need for an impairment charge in future periods. |
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Fair Value of Financial Instruments | Our financial instruments consist primarily of receivables, accounts payable, accrued expenses, and short-term debt. The carrying amount of accounts receivable, accounts payable, and accrued expenses approximates their fair value because of the short-term maturity of such instruments and are considered Level 1 assets under the fair value hierarchy. Interest rates that are currently available to us for issuance of short and long-term debt with similar terms and remaining maturities are used to estimate the fair value of our short and long-term debt and would be considered Level 3 inputs under the fair value hierarchy.
We categorize our assets and liabilities that are valued at fair value on a recurring basis into a three-level fair value hierarchy as defined by Accounting Standards Codification, or ASC 820 Fair Value Measurements and Disclosures. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets and liabilities (Level 1) and lowest priority to unobservable inputs (Level 3). Assets and liabilities recorded in the consolidated balance sheet at fair value are categorized based on a hierarchy of inputs, as follows:
At June 30, 2013 and December 31, 2012, we had no assets or liabilities that were valued at fair value on a recurring basis. |
Fair Value of Financial Instruments
Our financial instruments consist primarily of receivables, accounts payable, accrued expenses, and short-term debt. The carrying amount of receivables, accounts payable, and accrued expenses approximates their fair value because of the short-term maturity of such instruments and are considered Level 1 assets under the fair value hierarchy. Interest rates that are currently available to us for issuance of short and long-term debt with similar terms and remaining maturities are used to estimate the fair value of our short and long-term debt and would be considered Level 3 inputs under the fair value hierarchy.
We categorize our assets and liabilities that are valued at fair value on a recurring basis into a three-level fair value hierarchy as defined by ASC 820 Fair Value Measurements and Disclosures (ASC 820). The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets and liabilities (Level 1) and lowest priority to unobservable inputs (Level 3).
Assets and liabilities recorded in the consolidated balance sheet at fair value are categorized based on a hierarchy of inputs, as follows:
At December 31, 2012 and 2011, we had no assets or liabilities that were valued at fair value on a recurring basis.
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Fair Value of Financial Instruments
The Company’s financial instruments consist primarily of receivables, accounts payable, accrued expenses and short-term debt. The carrying amount of receivables, accounts payable and accrued expenses approximates its fair value because of the short-term maturity of such instruments. Interest rates that are currently available to the Company for issuance of short-term debt with similar terms and remaining maturities are used to estimate the fair value of the Company’s short-term debt.
The Company categorizes its assets and liabilities that are valued at fair value on a recurring basis into a three-level fair value hierarchy as defined by ASC 820 “Fair Value Measurements and Disclosures” (“ASC 820”). The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets and liabilities (Level 1) and lowest priority to unobservable inputs (Level 3).
Assets and liabilities recorded in the consolidated balance sheet at fair value are categorized based on a hierarchy of inputs, as follows:
At December 31, 2011 and 2010, the Company had no assets or liabilities that are valued at fair value on a recurring basis.
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Income Taxes | Income Taxes
We account for income taxes under the asset and liability method. We recognize deferred tax assets and liabilities for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. We measure deferred tax assets and liabilities using enacted tax rates expected to apply to taxable income in the years in which the related temporary differences are expected to be recovered or settled. We recognize the effect on deferred tax assets and liabilities of a change in tax rates when the rate change is enacted. Valuation allowances are recorded to reduce deferred tax assets to the amount that will more likely than not be realized. In accordance with ASC 740, Income Taxes, we recognize the effect of uncertain income tax positions only if the positions are more likely than not of being sustained in an audit, based on the technical merits of the position. We measure recognized uncertain income tax positions using the largest amount that has a likelihood of being realized that is greater than 50%. Changes in recognition or measurement are reflected in the period in which those changes in judgment occur. We recognize both interest and penalties related to uncertain tax positions as part of the income tax provision. As of December 31, 2012 and 2011, we had no tax positions relating to open tax returns that were considered to be uncertain. |
Income Taxes
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the related temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized when the rate change is enacted. Valuation allowances are recorded to reduce deferred tax assets to the amount that will more likely than not be realized. In accordance with ASC 740, Income Taxes, the Company recognizes the effect of uncertain income tax positions only if the positions are more likely than not of being sustained in an audit, based on the technical merits of the position. Recognized uncertain income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which those changes in judgment occur. The Company recognizes both interest and penalties related to uncertain tax positions as part of the income tax provision. As of December 31, 2011 and 2010, the Company has no tax positions relating to open tax returns that were considered to be uncertain.
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Stock Based Compensation | Stock Based Compensation
In December 2004, the FASB issued ASC 718, Compensation Stock Compensation (ASC 718). Under ASC 718 companies are required to measure the compensation costs of unit-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which employees are required to provide services. Unit-based compensation arrangements include unit options, restricted share plans, performance-based awards, share appreciation rights, and employee share purchase plans. As such, compensation cost is measured on the date of grant at fair value. Such compensation amounts, if any, are amortized over the respective vesting periods of the option grant. We use the Black-Scholes option pricing model that requires the input of highly complex and subjective variables including the expected life of options granted and our expected stock price volatility over a period equal to or greater than the expected life of the options.
Equity instruments (instruments) issued to other than employees are recorded on the basis of the fair value of the instruments, as required by ASC 718. FASB ASC 505, Equity Based Payments to Non-Employees defines the measurement date and recognition period for such instruments. In general, the measurement date is when either (a) a performance commitment, as defined, is reached or (b) the earlier of (i) the non-employee performance is complete or (ii) the instruments are vested. The measured value related to the instruments is recognized over a period based on the facts and circumstances of each particular grant as defined in ASC 505.
We recognize compensation expense for all share-based payments granted based on the grant date fair value estimated in accordance with ASC 718-10, Share Based Payments. Compensation expense is generally recognized on a straight-line basis over the employees requisite service period.
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Stock Based Compensation
In December 2004, the FASB issued ASC 718, Compensation – Stock Compensation (“ASC 718”). ASC 718 companies are required to measure the compensation costs of unit-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which employees are required to provide services. Unit-based compensation arrangements include unit options, restricted share plans, performance-based awards, share appreciation rights and employee share purchase plans. As such, compensation cost is measured on the date of grant at their fair value. Such compensation amounts, if any, are amortized over the respective vesting periods of the option grant. The Company uses the Black-Scholes option pricing model which requires the input of highly complex and subjective variables including the expected life of options granted and the Company’s expected stock price volatility over a period equal to or greater than the expected life of the options.
Equity instruments (“instruments”) issued to other than employees are recorded on the basis of the fair value of the instruments, as required by ASC 718. FASB ASC 505, Equity Based Payments to Non-Employees defines the measurement date and recognition period for such instruments. In general, the measurement date is when either a (a) performance commitment, as defined, is reached or (b) the earlier of (i) the non-employee performance is complete or (ii) the instruments are vested. The measured value related to the instruments is recognized over a period based on the facts and circumstances of each particular grant as defined in the ASC.
The Company recognizes compensation expense for all share-based payments granted based on the grant date fair value estimated in accordance with ASC 718-10, “Share Based Payments.” Compensation expense is generally recognized on a straight-line basis over the employee’s requisite service period.
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Debt Discounts | Debt Discounts
Costs incurred with parties that are providing long-term financing, which include warrants issued with the underlying debt, are reflected as a debt discount based on the relative fair value of the debt and warrants to the total proceeds. These discounts are generally amortized over the life of the related debt using the effective interest rate method. In connection with debt issued during the years ended December 31, 2012 and 2011, we recorded debt discounts totaling $2,706,920 and $28,719, respectively. The aggregate balance of unamortized debt discount at December 31, 2012 and 2011 was $1,102,680 and $0, respectively. Amortization expense related to debt discounts totaled $1,604,240 and $28,719 for the years ended December 31, 2012 and 2011, respectively, and is included in amortization of debt discount on the accompanying consolidated financial statements. |
Debt Discounts
Costs incurred with parties who are providing long-term financing, which include warrants issued with the underlying debt, are reflected as a debt discount based on the relative fair value of the debt and warrants to the total proceeds. These discounts are generally amortized over the life of the related debt using the effective interest rate method. In connection with debt issued during the years ended December 31, 2011 and 2010, the Company recorded debt discounts totaling $28,719 and $0, respectively. Amortization expense related to debt discounts totaled $28,719 and $0 for the years ended December 31, 2011 and 2010, respectively, and is included in interest expense on the accompanying consolidated financial statements. Debt discount was fully amortized at December 31, 2011. |
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Revenue Recognition | Revenue Recognition
We recognize revenue on arrangements in accordance with ASC 605, Revenue Recognition. We recognize revenue only when the price is fixed or determinable, persuasive evidence of an arrangement exists, the service is performed, and collectability is reasonably assured.
Over The Counter Products
We generate OTC revenue by sales of products primarily to retail consumers. Our policy is to recognize revenue from product sales upon shipment, when the rights of ownership and risk of loss have passed to the consumer. Outbound shipping and handling fees are included in sales and are billed upon shipment. Shipping expenses are included in cost of sales. The majority of our sales are paid with credit cards, and we usually receive the cash settlement in two to three banking days. Credit card sales minimize accounts receivable balances relative to sales. We provide an unconditional 30-day money-back return policy under which we accept product returns from our retail and eCommerce customers. We recognize our revenue from OTC sales net of returns, sales discounts, and eCommerce fees.
For the years ended December 31, 2012 and 2011, we recorded an allowance for returns of $27,168 and $0, respectively. We estimate the allowance for returns based on historical return activity, which is reviewed, and adjusted if necessary, on a quarterly basis.
Prescription Products
We sell our name brand and generic prescription products primarily through drug wholesalers and retail pharmacies. We recognize revenue from prescription product sales, net of sales discounts and end-user rebates.
We accept returns of unsalable product from customers within a return period of six months prior to and following product expiration. Our prescription products currently have a shelf-life of 24 months from date of manufacture. Given the limited history of prescriptions products, we currently cannot reliably estimate expected returns of the prescription products at the time of shipment. Accordingly, we defer recognition of revenue on prescription products until the right of return no longer exists, which occurs at the earlier of the time the prescription products are dispensed through patient prescriptions or expiration of the right of return. As a result of this policy, we had a deferred revenue balance of $1,144,752 and $0 at December 31, 2012 and 2011, respectively.
We maintain various rebate programs in an effort to maintain a competitive position in the marketplace and to promote sales and customer loyalty. The rebate program is designed to enable the end-user to return a coupon to us. If the coupon qualifies, we send a rebate check to the end-user. We estimate the allowance for rebates based on industry averages, which is reviewed, and adjusted if necessary, on a quarterly basis. For the years ended December 31, 2012 and 2011, we recorded reduction to income for rebates of $34,255 and $0, respectively. |
Revenue Recognition
The Company recognizes revenue on arrangements in accordance with ASC 605, “Revenue Recognition” (“ASC 605”). Revenue is recognized only when the price is fixed or determinable, persuasive evidence of an arrangement exists, the service is performed and collectability is reasonably assured. The Company generates revenue by sales of products primarily to retail consumers. The Company’s policy is to recognize revenue from product sales upon shipment, when the rights of ownership and risk of loss have passed to the consumer. Outbound shipping and handling fees are included in sales and are billed upon shipment. Shipping expenses are included in cost of sales. The majority of the Company’s sales are paid with credit cards and the Company usually receives the cash settlement in two to three banking days. Credit card sales minimize accounts receivable balances relative to sales. We provide an unconditional thirty-day money-back return policy whereby we accept product returns from our retail, wholesale and eCommerce customers. Historically we have experienced returns (monitored on a daily basis) equal to approximately one percent of sales. Total returns were $20,726 and $13,734 for the years ended December 31, 2011 and 2010, respectively. We consider the potential returns to be de minimis and have not established an allowance for product returns at this time.
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Shipping and Handling Costs | Shipping and Handling Costs
We expense all shipping and handling costs as incurred. These costs are included in cost of sales on the accompanying consolidated financial statements. |
Shipping and Handling Costs
The Company expenses all shipping and handling costs as incurred. These costs are included in cost of sales on the accompanying consolidated financial statements. |
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Advertising Costs | Advertising Costs
We expense advertising costs when incurred. Advertising expenses totaled $65,944 and $19,408 during the years ended December 31, 2012 and 2011, respectively.
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Advertising Costs
The Company expenses advertising costs when incurred. Advertising expenses totaled $19,408 and $25,698 during the years ended December 31, 2011 and 2010, respectively.
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Research and Development Expenses | Research and development, or R&D, expenses include internal R&D activities, external contract research organization, or CRO, services and their clinical research sites, and other activities. Internal R&D activity expenses include laboratory supplies, salaries, benefits, and share-based compensation expenses. CRO activity expenses include preclinical laboratory experiments and clinical trial studies. Other activity expenses include regulatory consulting, and regulatory legal counsel. Internal R&D activities and other activity expenses are charged to operations as incurred. We make payments to the CRO’s based on agreed upon terms and may include payments in advance of a study starting date. Nonrefundable advance payments for goods and services that will be used in future research and development activities are expensed when the activity has been performed or when the goods have been received rather than when the payment is made. We review and accrue CRO expenses and clinical trial study expenses based on services performed and rely on estimates of those costs applicable to the stage of completion of a study as provided by the CRO. Accrued CRO costs are subject to revisions as such studies progress to completion. Revisions are charged to expense in the period in which the facts that give rise to the revision become known. |
Research and Development Expenses
Research and development expenditures, which are expensed as incurred, totaled $4,492,362 and $107,241 during the years ended December 31, 2012 and 2011, respectively.
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Research and Development Expenses
Research and development expenditures, which are expensed as incurred, totaled $107,241 and $65,402 during the years ended December 31, 2011 and 2010, respectively.
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Earnings Per Share | We
calculate earnings per share, or EPS, in accordance with ASC 260, Earnings Per Share, which requires the computation
and disclosure of two EPS amounts, basic and diluted. We compute basic EPS based on the weighted average number of shares of common
stock outstanding during the period. We compute diluted EPS based on the weighted average number of shares of common stock outstanding
plus all potentially dilutive common shares outstanding during the period. Such potentially dilutive common shares consist of
stock options and warrants. Potentially dilutive common shares totaling 21,773,002 and 18,884,154 at June 30, 2013 and 2012, respectively,
have been excluded from the diluted earnings per share calculation as they are anti-dilutive due to the net loss reported by us.
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Earnings Per Share
We calculate earnings per share (EPS) in accordance with ASC 260, Earnings Per Share, which requires the computation and disclosure of two EPS amounts, basic and diluted. We compute basic EPS based on the weighted average number of shares of Common Stock outstanding during the period. We compute diluted EPS based on the weighted average number of shares of Common Stock outstanding plus all potentially dilutive common shares outstanding during the period. Such potential dilutive common shares consist of stock options and warrants. Potential common shares totaling 25,926,987 and 13,639,845 at December 31, 2012 and 2011, respectively, have been excluded from the diluted earnings per share calculation as they are anti-dilutive due to the net loss reported by us.
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Earnings Per Share
The Company calculates earnings per share (“EPS”) in accordance with ASC 260, “Earnings Per Share,” which requires the computation and disclosure of two EPS amounts, basic and diluted. Basic EPS is computed based on the weighted average number of shares of common stock outstanding during the period. Diluted EPS is computed based on the weighted average number of common shares outstanding plus all potentially dilutive common shares outstanding during the period. Such potential dilutive common shares consist of stock options and warrants. Potential common shares totaling 96,618,626 and 165,752 (Reverse Split shares) at December 31, 2011 and 2010, respectively, have been excluded from the diluted earnings per share calculation as they are anti-dilutive due to the net loss reported by the Company.
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Use of Estimates | Use of Estimates
Our financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). The preparation of these financial statements requires us to make significant estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosure of contingent assets and liabilities. We evaluate our estimates, including those related to contingencies, on an ongoing basis. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. |
Use of Estimates
The Company’s financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires us to make significant estimates and judgments that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosure of contingent assets and liabilities. We evaluate our estimates, including those related to contingencies, on an ongoing basis. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. |
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Recently Issued Accounting Pronouncements | On July 18, 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit when a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (a consensus of the FASB Emerging Issues Task Force). The amendments in this ASU provide guidance on the financial statements presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. An unrecognized tax benefit should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward with certain exceptions, in which case such an unrecognized tax benefit should be presented in the financial statements as a liability. The amendments in this ASU do not require new recurring disclosures. The amendments in this ASU are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. The amendments in ASU No. 2013-11 are not expected to have an impact on our condensed consolidated financial statements. |
Recently Issued Accounting Pronouncements
In July 2012, FASB issued Accounting Standards Update (ASU) No. 2012-02, Testing Indefinite-Lived Intangible Assets for Impairment (ASU 2012-02). ASU 2012-02 gives entities an option to first assess qualitative factors to determine whether the existence of events and circumstances indicate that it is more likely than not that the indefinite-lived intangible asset impaired. If based on its qualitative assessment an entity concludes that it is more likely than not that the fair value of an indefinite lived intangible asset is less than its carrying amount, quantitative impairment testing is required. However, if an entity concludes otherwise, quantitative impairment testing is not required. ASU 2012-02 is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012, with early adoption permitted. ASU 2012-02 is not expected to have a material impact on our financial position or results of operations.
In December 2011, the FASB issued ASU No. 2011-11, Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities (ASU 2011-11). ASU 2011-11 enhances current disclosures about financial instruments and derivative instruments that are either offset on the statement of financial position or subject to an enforceable master netting arrangement or similar agreement, irrespective of whether they are offset on the statement of financial position. Entities are required to provide both net and gross information for these assets and liabilities in order to facilitate comparability between financial statements prepared in conformity with U.S. GAAP and financial statements prepared on the basis of International Financial Reporting Standards (IFRS). ASU 2011-11 is effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. ASU 2011-11 is not expected to have a material impact on our financial position or results of operations.
In September 2011, the FASB issued ASU No. 2011-08 Intangibles Goodwill & Other (ASU 2011-08), which updates the guidance in Accounting Standards Codification (ASC) Topic 350, Intangibles Goodwill & Other (ACS Topic 350). The amendments in ASU 2011-08 permit an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than the carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test described in ASC Topic 350. The more-likely-than-not threshold is defined as having a likelihood of more than fifty percent. If, after assessing the totality of events or circumstances, an entity determines that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step impairment test is unnecessary. The amendments in ASU 2011-08 include examples of events and circumstances that an entity should consider in evaluating whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. However, the examples are not intended to be all-inclusive and an entity may identify other relevant events and circumstances to consider in making the determination. The examples in this ASU 2011-08 supersede the previous examples under ASC Topic 350 of events and circumstances an entity should consider in determining whether it should test for impairment between annual tests, and also supersede the examples of events and circumstances that an entity having a reporting unit with a zero or negative carrying amount should consider in determining whether to perform the second step of the impairment test. Under the amendments in ASU 2011-08, an entity is no longer permitted to carry forward its detailed calculation of a reporting units fair value from a prior year as previously permitted under ASC Topic 350. ASU 2011-08 is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. The adoption of ASU 2011-08 did not have a material impact on our financial position or results of operations.
In May 2011, the FASB issued ASU 2011-04 (ASU 2011-04), which updated the guidance in ASC Topic 820, Fair Value Measurement. The amendments in ASU 2011-04 generally represent clarifications of Topic 820, but also include some instances where a particular principle or requirement for measuring fair value or disclosing information about fair value measurements has changed. ASU 2011-04 results in common principles and requirements for measuring fair value and for disclosing information about fair value measurements in accordance with U.S. GAAP and IFRS. The amendments in ASU 2011-04 are to be applied prospectively. For public entities, the amendments are effective for interim and annual periods beginning after December 15, 2011. The adoption of ASU 2011-04 did not have a material impact on our financial position or results of operations.
We do not believe there would have been a material effect on the accompanying financial statements had any other recently issued, but not yet effective, accounting standards been adopted in the current period. |
Recently Issued Accounting Pronouncements
In December 2011, FASB issued Accounting Standards Update (“ASU”) 2011-11, Balance Sheet - Offsetting. This guidance requires disclosures about offsetting and related arrangements for recognized financial instruments and derivative instruments. The standard is effective for us as of January 1, 2013 and will not materially impact our financial statement disclosures.
In September 2011, the FASB issued ASU 2011-08, “Testing Goodwill for Impairment.” This guidance provides the option to evaluate prescribed qualitative factors to determine whether a calculated goodwill impairment test is necessary. The standard is effective for us as of January 1, 2012 and will not materially impact on our financial condition, results of operations, or financial statement disclosures.
In May 2011, FASB issued ASU 2011-05, Comprehensive Income: Presentation of Comprehensive Income, to allow an entity the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In both choices, an entity is required to present each component of net income along with total net income, each component of other comprehensive income along with a total for other comprehensive income, and a total amount for comprehensive income. ASU 2011-05 eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders’ equity. The amendments do not change the guidance regarding the items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income. The amendments should be applied retrospectively and is effective for fiscal years and interim periods within those years beginning after December 15, 2011. Early adoption is permitted. The adoption is not expected to have a material impact on the Company’s results of operations, financial position or cash flows.
In May 2011, the FASB issued ASU 2011-04, Fair Value Measurement: Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. This ASU represents the converged guidance of the FASB and the IASB (the “Boards”) on fair value measurement, and results in common requirements for measuring fair value and for disclosing information about fair value measurements, including a consistent meaning of the term “fair value.” These amendments change some of the terminology used to describe many of the existing requirements in U.S. GAAP for measuring fair value and for disclosing information about fair value measurements. The amendments should be applied prospectively, and they are effective during interim and annual periods beginning after December 15, 2011. Early application by public entities is not permitted. The adoption is not expected to have a material impact on the Company’s results of operations, financial position or cash flows.
Management does not believe there would be a material effect on the accompanying financial statements had any other recently issued but not yet effective accounting standards been adopted in the current period.
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Reclassifications | Certain 2012 amounts have been reclassified to conform to current year presentation.
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Reclassifications
Certain 2011 amounts have been reclassified to conform to current year presentation. |
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Interim Financial Statements | Our accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles, or GAAP, for complete financial statements. In our opinion, such financial statements include all adjustments (consisting solely of normal recurring adjustments) necessary for the fair statement of the financial information included herein in accordance with GAAP and the rules and regulations of the Securities and Exchange Commission, or SEC. The balance sheet at December 31, 2012 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements. The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the period. Actual results could differ from those estimates. Results of operations for interim periods are not necessarily indicative of results for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in our Annual Report on Form 10-K filed with the SEC for the year ended December 31, 2012. |
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Describes how an entity determines the level of its allowance for doubtful accounts for its trade and other accounts receivable balances, and when impairments, charge-offs or recoveries are recognized. The description identifies the factors that influence management's establishment of the level of the allowance (for example, historical losses and existing economic conditions) and may also include discussion of the risk elements relevant to particular categories of receivables. No definition available.
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Disclosure of accounting policy for advertising costs. For those costs that cannot be capitalized, discloses whether such costs are expensed as incurred or the first period in which the advertising takes place. For direct response advertising costs that are capitalized, describes those assets and the accounting policy used, including a description of the qualifying activity, the types of costs capitalized and the related amortization period. An entity also may disclose its accounting policy for cooperative advertising arrangements. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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Disclosure of accounting policy for basis of accounting, or basis of presentation, used to prepare the financial statements (for example, US Generally Accepted Accounting Principles, Other Comprehensive Basis of Accounting, IFRS). No definition available.
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Disclosure of accounting policy for cash and cash equivalents, including the policy for determining which items are treated as cash equivalents. Other information that may be disclosed includes (1) the nature of any restrictions on the entity's use of its cash and cash equivalents, (2) whether the entity's cash and cash equivalents are insured or expose the entity to credit risk, (3) the classification of any negative balance accounts (overdrafts), and (4) the carrying basis of cash equivalents (for example, at cost) and whether the carrying amount of cash equivalents approximates fair value. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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Disclosure of accounting policy regarding (1) the principles it follows in consolidating or combining the separate financial statements, including the principles followed in determining the inclusion or exclusion of subsidiaries or other entities in the consolidated or combined financial statements and (2) its treatment of interests (for example, common stock, a partnership interest or other means of exerting influence) in other entities, for example consolidation or use of the equity or cost methods of accounting. The accounting policy may also address the accounting treatment for intercompany accounts and transactions, noncontrolling interest, and the income statement treatment in consolidation for issuances of stock by a subsidiary. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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Disclosure of accounting policy for computing basic and diluted earnings or loss per share for each class of common stock and participating security. Addresses all significant policy factors, including any antidilutive items that have been excluded from the computation and takes into account stock dividends, splits and reverse splits that occur after the balance sheet date of the latest reporting period but before the issuance of the financial statements. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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Disclosure of accounting policy for determining the fair value of financial instruments. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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Disclosure of accounting policy for recognizing and measuring the impairment of long-lived assets. An entity also may disclose its accounting policy for long-lived assets to be sold. This policy excludes goodwill and intangible assets. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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Disclosure of accounting policy for income taxes, which may include its accounting policies for recognizing and measuring deferred tax assets and liabilities and related valuation allowances, recognizing investment tax credits, operating loss carryforwards, tax credit carryforwards, and other carryforwards, methodologies for determining its effective income tax rate and the characterization of interest and penalties in the financial statements. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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Disclosure of accounting policy for finite-lived intangible assets. This accounting policy also might address: (1) the amortization method used; (2) the useful lives of such assets; and (3) how the entity assesses and measures impairment of such assets. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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Disclosure of accounting policy for recognizing interest expense, including the method of amortizing debt issuance costs. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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Disclosure of accounting policy for major classes of inventories, bases of stating inventories (for example, lower of cost or market), methods by which amounts are added and removed from inventory classes (for example, FIFO, LIFO, or average cost), loss recognition on impairment of inventories, and situations in which inventories are stated above cost. If inventory is carried at cost, this disclosure includes the nature of the cost elements included in inventory. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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Disclosure of the adoption of new accounting pronouncements that may impact the entity's financial reporting. No definition available.
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Disclosure of accounting policy for reclassifications that affects the comparability of the financial statements. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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Disclosure of accounting policy for property, plant and equipment which may include the basis of such assets, depreciation methods used and estimated useful lives, the entity's capitalization policy, including its accounting treatment for costs incurred for repairs and maintenance activities, whether such asset balances include capitalized interest and the method by which such is calculated, how disposals of such assets are accounted for and how impairment of such assets is assessed and recognized. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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Disclosure of accounting policy for costs it has incurred (1) in a planned search or critical investigation aimed at discovery of new knowledge with the hope that such knowledge will be useful in developing a new product or service, a new process or technique, or in bringing about a significant improvement to an existing product or process; or (2) to translate research findings or other knowledge into a plan or design for a new product or process or for a significant improvement to an existing product or process. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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Disclosure of accounting policy for revenue recognition. If the entity has different policies for different types of revenue transactions, the policy for each material type of transaction is generally disclosed. If a sales transaction has multiple element arrangements (for example, delivery of multiple products, services or the rights to use assets) the disclosure may indicate the accounting policy for each unit of accounting as well as how units of accounting are determined and valued. The disclosure may encompass important judgment as to appropriateness of principles related to recognition of revenue. The disclosure also may indicate the entity's treatment of any unearned or deferred revenue that arises from the transaction. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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Disclosure of accounting policy for stock option and stock incentive plans. This disclosure may include (1) the types of stock option or incentive plans sponsored by the entity (2) the groups that participate in (or are covered by) each plan (3) significant plan provisions and (4) how stock compensation is measured, and the methodologies and significant assumptions used to determine that measurement. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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Disclosure of accounting policy for the classification of shipping and handling costs, including whether the costs are included in cost of sales or included in other income statement accounts. If shipping and handling fees are significant and are not included in cost of sales, disclosure includes both the amounts of such costs and the line item on the income statement which includes such costs. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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Disclosure of accounting policy for the use of estimates in the preparation of financial statements in conformity with generally accepted accounting principles. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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INVENTORY (Tables)
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Schedule of Inventory | Inventory consists of the following:
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Inventory consists of the following:
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Tabular disclosure of the carrying amount as of the balance sheet date of merchandise, goods, commodities, or supplies held for future sale or to be used in manufacturing, servicing or production process. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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OTHER CURRENT ASSETS (Tables)
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Schedule of Other Current Assets | Other current assets consist of the following:
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Other current assets consist of the following:
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Tabular disclosure of the carrying amounts of other current assets. No definition available.
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FIXED ASSETS (Tables)
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Schedule of Property, Plant and Equipment | Fixed assets consist of the following:
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Fixed assets consist of the following:
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Tabular disclosure of the useful life and salvage value of long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale. Examples include land, buildings, machinery and equipment, and other types of furniture and equipment including, but not limited to, office equipment, furniture and fixtures, and computer equipment and software. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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OTHER ASSETS (Tables)
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Schedule of other assets | Prepaid expense consists of the following:
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Tabular disclosure of noncurrent assets. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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INTANGIBLE ASSETS (Tables)
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Schedule of Intangible assets | Intangible assets consist of the following:
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Other assets consist of the following:
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Tabular disclosure of assets, excluding financial assets and goodwill, lacking physical substance with a finite life, by either major class or business segment. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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OTHER CURRENT LIABILITIES (Tables)
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Schedule of Other Current Liabilities | Other current liabilities consist of the following:
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(1) In June 2008, the Company declared and paid a special dividend of $0.40 per share of common stock to all stockholders of record as of June 10, 2008. This amount reflects unclaimed dividends by certain stockholders. |
Other current liabilities consist of the following:
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Tabular disclosure of other liabilities not separately disclosed on the balance sheet. No definition available.
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STOCKHOLDERS' EQUITY (Tables)
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Company Warrants Outstanding and Issued | During the year ended December 31, 2012, we issued the following:
During the year ended December 31, 2011, we issued the following:
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Schedule of Assumptions FV Warrants | The assumptions used in the Black-Scholes Model during the six months ended June 30, 2013 are set forth in the table below.
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The weighted average fair value per share of Company Warrants granted and the assumptions used in the Black-Scholes Model during the years ended December 31, 2012 and 2011 are set forth in the table below.
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Schedule of Stock Warrant Activity | A summary of our warrant activity and related information for 2013 follows:
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A summary of our Common Stock purchase warrant activity and related information for the years ended December 31, 2012 and 2011 follows:
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Stock Options | A summary of activity under the LTIP and 2012 SOP and related information follows:
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A summary of activity under the 2009 and 2012 Plans and related information follows:
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Schedule of Assumptions FV Options | The assumptions used in the Black-Scholes Model during the years ended December 31, 2012 and 2011 and are set forth in the table below.
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X | ||||||||||
- Definition
Tabular disclosure of company warrants outstanding. No definition available.
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X | ||||||||||
- Definition
Tabular disclosure of the significant assumptions used during the year to estimate the fair value of employee stock purchase plans, including, but not limited to: (a) expected term, (b) expected volatility of the entity's shares, (c) expected dividends, (d) risk-free rate(s), and (e) discount for post-vesting restrictions. No definition available.
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X | ||||||||||
- Definition
Tabular disclosure of period activity related to stock warrants. No definition available.
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X | ||||||||||
- Details
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X | ||||||||||
- Definition
Tabular disclosure of the significant assumptions used during the year to estimate the fair value of employee stock purchase plans, including, but not limited to: (a) expected term, (b) expected volatility of the entity's shares, (c) expected dividends, (d) risk-free rate(s), and (e) discount for post-vesting restrictions. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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X | ||||||||||
- Definition
Tabular disclosure of the change in stock options. No definition available.
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INCOME TAXES (Tables)
|
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2012
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Dec. 31, 2011
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Income Taxes Tables | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred tax assets and liabilities | Our deferred tax asset and liability as presented in financial statements consist of the following:
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Schedule of Tax Rate Reconciliation | A reconciliation between taxes computed at the federal statutory rate and the consolidated effective tax rate is as follows:
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X | ||||||||||
- Details
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X | ||||||||||
- Definition
Tabular disclosure of the components of net deferred tax asset or liability recognized in an entity's statement of financial position, including the following: the total of all deferred tax liabilities, the total of all deferred tax assets, the total valuation allowance recognized for deferred tax assets. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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X | ||||||||||
- Definition
Tabular disclosure of the reconciliation using percentage or dollar amounts of the reported amount of income tax expense attributable to continuing operations for the year to the amount of income tax expense that would result from applying domestic federal statutory tax rates to pretax income from continuing operations. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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COMMITMENT AND CONTINGENCIES (Tables)
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12 Months Ended |
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Dec. 31, 2011
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Business Combinations [Abstract] | |
Schedule of future minimum rental payments |
X | ||||||||||
- Details
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X | ||||||||||
- Definition
Tabular disclosure of future minimum payments required in the aggregate and for each of the five succeeding fiscal years for operating leases having initial or remaining noncancelable lease terms in excess of one year and the total minimum rentals to be received in the future under noncancelable subleases as of the balance sheet date. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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RESTATEMENT OF 2010 AUDITED FINANCIALS (Tables)
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Accounting Changes and Error Corrections [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of the impact of the restatements |
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X | ||||||||||
- Details
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X | ||||||||||
- Definition
Tabular disclosure of prior period adjustments to previously issued financial statements including (1) the effect of the correction on each financial statement line item and any per-share amounts affected for each prior period presented (2) the cumulative effect of the change on retained earnings or other appropriate components of equity or net assets in the statement of financial position, as of the beginning of the earliest period presented, and (3) the effect of the prior period adjustments (both gross and net of applicable income tax) on the net income of each prior period presented in the entity's annual report for the year in which the adjustments are made. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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THE COMPANY (Details Narrative)
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0 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|
Oct. 02, 2011
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Jun. 30, 2013
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Dec. 31, 2012
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Dec. 31, 2011
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Oct. 03, 2011
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Jul. 29, 2011
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Jul. 28, 2011
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Dec. 31, 2010
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Merger agreeement description with VitaMed | Completed the following required corporate actions: a reverse split of the Company's 16,575,209 issued and outstanding shares of Common Stock on a ratio of 1 for 100 (the Reverse Split). As a result of the Reverse Split, each share of Common Stock outstanding on July 28, 2011 (the Record Date), without any action on the part of the holder thereof, became one one-hundredth of a share of Common Stock. The Reverse Split decreased the number of outstanding shares of the Company's Common Stock by approximately 99% resulting in 165,856 shares outstanding after the Reverse Split. The effectuation of the Reverse Split did not result in a change in the relative equity position or voting power of the shareholders of the Company; an increase of our authorized shares of Common Stock to 250,000,000; a change in the name of the Company to TherapeuticsMD, Inc.; and an amendment to the Company's Long Term Incentive Compensation Plan to increase the authorized shares for issuance thereunder to 25,000,000. | |||||||
Reverse split description | 1 for 100 | |||||||
Reverse stock split | 0.01 | |||||||
Common stock, shares outstanding | 131,212,706 | 99,784,982 | 82,978,804 | 58,573,187 | 165,856 | 16,575,209 | 55,487,321 | |
Common stock, shares authorized | 250,000,000 | 250,000,000 | 250,000,000 | 250,000,000 | 250,000,000 | |||
Shares authorized under Incentive Plan | 25,000,000 | |||||||
Shares exchanged, on a pro rata basis with VitaMed | 70,000,000 | |||||||
Shares issued in exchange for Units | 58,407,331 | |||||||
Former members of VitaMed ownership percentage in common stock | 99.00% | |||||||
Company Options
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Shares reserved for issuance in merger agreement | 10,119,796 | |||||||
Company Warrants
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Shares reserved for issuance in merger agreement | 1,472,916 |
X | ||||||||||
- Definition
Description of teh terms of the merger with VitaMed, inclusive of shares issued and exchanged. No definition available.
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X | ||||||||||
- Definition
The number of shares exchanged with VitaMed as part of the merger agreement. This has been applied by calculation a conversion ratio of all outstanding Units, VitaMed Options and VitaMed Warrants divided by 70,000,000. No definition available.
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X | ||||||||||
- Definition
The number of total shares exchanged for units and other consideration in the merger with VitaMed. No definition available.
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X | ||||||||||
- Definition
Number of company's shares of common stock reserved for issuance upon exercise of Options and Warrants issued in conjunction with the merger with VitaMed. No definition available.
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X | ||||||||||
- Definition
Ownership percentage in the company's common stock issued and outstanding held by former members of VitaMed. No definition available.
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X | ||||||||||
- Definition
The maximum number of common shares permitted to be issued by an entity's charter and bylaws. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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X | ||||||||||
- Definition
Number of shares of common stock outstanding. Common stock represent the ownership interest in a corporation. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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X | ||||||||||
- Definition
The maximum number of shares (or other type of equity) originally approved (usually by shareholders and board of directors), net of any subsequent amendments and adjustments, for awards under the equity-based compensation plan. As stock or unit options and equity instruments other than options are awarded to participants, the shares or units remain authorized and become reserved for issuance under outstanding awards (not necessarily vested). Reference 1: http://www.xbrl.org/2003/role/presentationRef
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X | ||||||||||
- Definition
This item represents the conversion ratio used in the calculation of a stock split. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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X | ||||||||||
- Definition
Description of the reverse stock split arrangement. Also provide the retroactive effect given by the reverse split that occurs after the balance sheet date but before the release of financial statements. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) (USD $)
|
3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
Dec. 31, 2012
|
Dec. 31, 2011
|
Dec. 31, 2010
|
|
Allowance for doubtful accounts | $ 100,385 | $ 100,385 | $ 42,408 | $ 1,500 | $ 0 | ||
Depreciation expense | 12,084 | 15,141 | 27,484 | 25,686 | 22,783 | ||
Amortization of intangible assets | 6,509 | 13,972 | 28,776 | 29,159 | |||
Debt discounts | 2,706,920 | 28,719 | |||||
Debt discount on notes payable | 1,102,680 | 0 | |||||
Amortization expense related to debt discount | 1,604,240 | 28,719 | 0 | ||||
Sales returns | 27,168 | 20,726 | 13,734 | ||||
Deferred Revenue | 1,219,072 | 1,219,072 | 1,144,752 | ||||
Rebate Expense | 34,255 | ||||||
Advertising expenses | 65,944 | 19,408 | 25,698 | ||||
Research and development expenditures | 1,747,084 | 833,342 | 3,312,285 | 1,245,303 | 4,492,362 | 107,241 | 65,402 |
Anti-dilutive shares excluded from earnings per share calculation | 25,926,987 | 13,639,845 | |||||
Reverse Split Shares
|
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Anti-dilutive shares excluded from earnings per share calculation | 96,618,626 | 165,752 | |||||
Equipment
|
|||||||
Depreciation expense | 19,904 | 23,962 | 5,105 | ||||
Leasehold Improvements
|
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Depreciation expense | 7,580 | 1,724 | |||||
Website
|
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Amortization of intangible assets | $ 17,678 |
X | ||||||||||
- Definition
The amount of debt discount recognized during the period. No definition available.
|
X | ||||||||||
- Definition
The amount of rebate expense the company recorded in the period. The company maintains various rebate programs with its sales channel customers to maintain a competitive position in the marketplace and to promote sales and customer loyalty. Rebates generally take the form of a coupon that is returned to the company and, in turn, a check is sent to the customer. No definition available.
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X | ||||||||||
- Definition
Amount charged to advertising expense for the period, which are expenses incurred with the objective of increasing revenue for a specified brand, product or product line. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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X | ||||||||||
- Definition
A valuation allowance for trade and other receivables due to an Entity within one year (or the normal operating cycle, whichever is longer) that are expected to be uncollectible. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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X | ||||||||||
- Definition
Amount of noncash expense included in interest expense to amortize debt discount and premium associated with the related debt instruments. Excludes amortization of financing costs. Alternate captions include noncash interest expense. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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X | ||||||||||
- Definition
The aggregate expense charged against earnings to allocate the cost of intangible assets (nonphysical assets not used in production) in a systematic and rational manner to the periods expected to benefit from such assets. As a noncash expense, this element is added back to net income when calculating cash provided by or used in operations using the indirect method. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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X | ||||||||||
- Definition
Securities (including those issuable pursuant to contingent stock agreements) that could potentially dilute basic earnings per share (EPS) or earnings per unit (EPU) in the future that were not included in the computation of diluted EPS or EPU because to do so would increase EPS or EPU amounts or decrease loss per share or unit amounts for the period presented. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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X | ||||||||||
- Definition
The amount of debt discount that was originally recognized at the issuance of the instrument that has yet to be amortized. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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X | ||||||||||
- Definition
Amount of deferred revenue as of balance sheet date. Deferred revenue represents collections of cash or other assets related to a revenue producing activity for which revenue has not yet been recognized. Generally, an entity records deferred revenue when it receives consideration from a customer before achieving certain criteria that must be met for revenue to be recognized in conformity with GAAP. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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X | ||||||||||
- Definition
The amount of expense recognized in the current period that reflects the allocation of the cost of tangible assets over the assets' useful lives. Includes production and non-production related depreciation. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The aggregate costs incurred (1) in a planned search or critical investigation aimed at discovery of new knowledge with the hope that such knowledge will be useful in developing a new product or service, a new process or technique, or in bringing about a significant improvement to an existing product or process; or (2) to translate research findings or other knowledge into a plan or design for a new product or process or for a significant improvement to an existing product or process whether intended for sale or the entity's use, during the reporting period charged to research and development projects, including the costs of developing computer software up to the point in time of achieving technological feasibility, and costs allocated in accounting for a business combination to in-process projects deemed to have no alternative future use. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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X | ||||||||||
- Definition
Total deduction from sales during the period arising from goods returned by customers (other than under warranty provisions) and price reductions (allowance, price protection agreements) given by the entity. Returns and allowances are a deduction from gross revenue in arriving at net revenue. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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GOING CONCERN (Details Narrative) (USD $)
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0 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
---|---|---|---|---|---|---|---|---|
Mar. 07, 2013
|
Jun. 30, 2013
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Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
Dec. 31, 2012
|
Dec. 31, 2011
|
Dec. 31, 2010
|
|
Going Concern Details Narrative | ||||||||
Operating loss | $ (5,616,994) | $ (3,974,582) | $ (10,559,885) | $ (6,842,603) | $ (16,148,423) | $ (5,427,218) | $ (2,867,464) | |
Net cash flows used in operating activities | (10,684,753) | (5,649,439) | (12,737,326) | (4,966,596) | (2,843,788) | |||
Accumulated deficit | (64,498,612) | (64,498,612) | (52,113,313) | (16,993,078) | (4,079,713) | |||
Gross expected proceeds from underwritten public offering of common stock | $ 50,000,000 | $ 45,400,000 |
X | ||||||||||
- Details
|
X | ||||||||||
- Definition
The net cash from (used in) all of the entity's operating activities, including those of discontinued operations, of the reporting entity. Operating activities generally involve producing and delivering goods and providing services. Operating activity cash flows include transactions, adjustments, and changes in value that are not defined as investing or financing activities. While for technical reasons this element has no balance attribute, the default assumption is a debit balance consistent with its label. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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X | ||||||||||
- Definition
The net result for the period of deducting operating expenses from operating revenues. No definition available.
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X | ||||||||||
- Definition
The cash inflow from the issuance of common stock, preferred stock, treasury stock, stock options, and other types of equity. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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X | ||||||||||
- Definition
The cumulative amount of the reporting entity's undistributed earnings or deficit. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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INVENTORY (Details) (USD $)
|
Jun. 30, 2013
|
Dec. 31, 2012
|
Dec. 31, 2011
|
Dec. 31, 2010
|
---|---|---|---|---|
Inventory | ||||
Finished Product | $ 1,100,486 | $ 1,124,739 | $ 588,073 | |
Raw Material | 291,035 | 380,000 | ||
Deferred Costs | 114,538 | 110,471 | ||
Inventory | $ 1,506,059 | $ 1,615,210 | $ 588,073 | $ 618,069 |
X | ||||||||||
- Definition
Sum of the carrying amounts as of the balance sheet date of deferred costs capitalized at the end of the reporting period that are expected to be charged against earnings within one year or the normal operating cycle, if longer. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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X | ||||||||||
- Definition
Amount before last-in first-out (LIFO) and valuation reserves of merchandise or goods held by the entity that are readily available for sale. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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X | ||||||||||
- Definition
Carrying amount (lower of cost or market) as of the balance sheet date of inventories less all valuation and other allowances. Excludes noncurrent inventory balances (expected to remain on hand past one year or one operating cycle, if longer). Reference 1: http://www.xbrl.org/2003/role/presentationRef
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X | ||||||||||
- Details
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X | ||||||||||
- Definition
Gross amount of unprocessed items to be consumed in the manufacturing or production process. Also includes purchased parts that will be used as components of a finished product. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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OTHER CURRENT ASSETS (Details) (USD $)
|
Jun. 30, 2013
|
Dec. 31, 2012
|
Dec. 31, 2011
|
Dec. 31, 2010
|
---|---|---|---|---|
Other Current Assets | ||||
Prepaid consulting | $ 541,936 | $ 432,216 | $ 95,962 | $ 0 |
Deposits with Vendors | 1,686,254 | 189,375 | 300,503 | 0 |
Prepaid insurance | 125,266 | 127,403 | 52,611 | 6,292 |
Prepaid guaranty costs | 2,944 | 46,984 | 0 | |
Deferred financing costs | 1,051,988 | |||
Other receivables - related party | 171,261 | |||
Other prepaid costs | 30,578 | |||
Other current assets | $ 3,607,283 | $ 751,938 | $ 496,060 | $ 6,292 |
X | ||||||||||
- Details
|
X | ||||||||||
- Definition
Carrying amount as of the balance sheet date of unamortized costs of consulting contracts, which will be charged against earnings ratably over the period in which contractually agreed upon services will be provided; such periods expire within one year or the normal operating cycle, if longer. Current portion. No definition available.
|
X | ||||||||||
- Definition
Carrying amount as of the balance sheet date of the unamortized carrying amount of the contractual right to remit fees, as compensation in exchange for having a guarantee provided, which will be charged against earnings over the life of the guarantee. Current portion. No definition available.
|
X | ||||||||||
- Definition
Funds held by vendors of the company as deposits or down payments for services provided or goods to be provided. No definition available.
|
X | ||||||||||
- Definition
Net amount of current deferred finance costs capitalized at the end of the reporting period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The aggregate amount of receivables to be collected from related parties where one party can exercise control or significant influence over another party; including affiliates, owners or officers and their immediate families, pension trusts, and so forth, at the financial statement date. which are usually due within one year (or one business cycle). Reference 1: http://www.xbrl.org/2003/role/presentationRef
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X | ||||||||||
- Definition
Aggregate carrying amount, as of the balance sheet date, of current assets not separately disclosed in the balance sheet. Current assets are expected to be realized or consumed within one year (or the normal operating cycle, if longer). Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Carrying amount as of the balance sheet date of expenditures made, not otherwise specified in the taxonomy, in advance of the timing of recognition of expenses which are expected to be charged against earnings within one year or the normal operating cycle, if longer. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Carrying amount as of the balance sheet date of unamortized costs of insurance coverage, which will be charged against earnings ratably over the period in which contractually agreed upon coverage's will be in effect; such periods expire within one year or the normal operating cycle, if longer. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
FIXED ASSETS (Details Narrative) (USD $)
|
6 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Dec. 31, 2012
|
Dec. 31, 2011
|
Dec. 31, 2010
|
|
Fixed Assets Details Narrative | |||||
Depreciation Expense | $ 12,084 | $ 15,141 | $ 27,484 | $ 25,686 | $ 22,783 |
X | ||||||||||
- Details
|
X | ||||||||||
- Definition
The amount of expense recognized in the current period that reflects the allocation of the cost of tangible assets over the assets' useful lives. Includes production and non-production related depreciation. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
FIXED ASSETS (Details) (USD $)
|
Jun. 30, 2013
|
Dec. 31, 2012
|
Dec. 31, 2011
|
Dec. 31, 2010
|
---|---|---|---|---|
Property and equipment, Gross | $ 149,178 | $ 126,273 | $ 59,868 | $ 122,847 |
Accumulated depreciation | (72,684) | (60,600) | (33,116) | (26,655) |
Property and equipment, net | 76,494 | 65,673 | 26,752 | 96,192 |
Equipment
|
||||
Property and equipment, Gross | 90,573 | 67,668 | 33,650 | 30,837 |
Furniture and Fixtures
|
||||
Property and equipment, Gross | 46,625 | 46,625 | 22,169 | 26,219 |
Leasehold Improvements
|
||||
Property and equipment, Gross | 11,980 | 11,980 | 4,049 | |
Website
|
||||
Property and equipment, Gross | $ 65,791 |
X | ||||||||||
- Definition
The cumulative amount of depreciation, depletion and amortization (related to property, plant and equipment, but not including land) that has been recognized in the income statement. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Gross amount of long-lived physical assets used in the normal conduct of business and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, furniture and fixtures, and computer equipment. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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X | ||||||||||
- Definition
Amount, net of accumulated depreciation, depletion and amortization, of long-lived physical assets used in the normal conduct of business and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, furniture and fixtures, and computer equipment. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
OTHER ASSETS (Details) (USD $)
|
Jun. 30, 2013
|
Dec. 31, 2012
|
Dec. 31, 2011
|
Dec. 31, 2010
|
---|---|---|---|---|
Other Assets | ||||
Prepaid manufacturing costs | $ 899,000 | |||
Prepaid consulting expense | 1,081,519 | 953,655 | 71,689 | 0 |
Prepaid guaranty costs | 8,826 | 0 | ||
Prepaid expense | $ 1,980,519 | $ 953,655 | $ 80,515 | $ 0 |
X | ||||||||||
- Definition
Carrying amount as of the balance sheet date of unamortized costs of consulting contracts, which will be charged against earnings ratably over the period in which contractually agreed upon services will be provided; such periods expire within one year or the normal operating cycle, if longer. Noncurrent portion. No definition available.
|
X | ||||||||||
- Definition
Carrying amount as of the balance sheet date of the unamortized carrying amount of the contractual right to remit fees, as compensation in exchange for having a guarantee provided, which will be charged against earnings over the life of the guarantee. No definition available.
|
X | ||||||||||
- Definition
Carrying amount as of the balance sheet date of unamortized costs of manufacturing contracts, which will be charged against earnings ratably over the period in which contractually agreed upon services will be provided; such periods expire within one year or the normal operating cycle, if longer. Noncurrent portion. No definition available.
|
X | ||||||||||
- Details
|
X | ||||||||||
- Definition
Sum of the carrying amounts as of the balance sheet date of amounts paid in advance for expenses which will be charged against earnings in periods after one year or beyond the operating cycle, if longer. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
INTANGIBLE ASSETS (Details Narrative) (USD $)
|
6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Dec. 31, 2012
|
Dec. 31, 2011
|
|
Intangible Assets Details Narrative | ||||
Amortization of intangible assets | $ 6,509 | $ 13,972 | $ 28,776 | $ 29,159 |
X | ||||||||||
- Details
|
X | ||||||||||
- Definition
The aggregate expense charged against earnings to allocate the cost of intangible assets (nonphysical assets not used in production) in a systematic and rational manner to the periods expected to benefit from such assets. As a noncash expense, this element is added back to net income when calculating cash provided by or used in operations using the indirect method. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
INTANGIBLE ASSETS (Details) (USD $)
|
Jun. 30, 2013
|
Dec. 31, 2012
|
Dec. 31, 2011
|
Dec. 31, 2010
|
---|---|---|---|---|
Intangible assets | $ 345,238 | $ 239,555 | $ 62,231 | $ 10,000 |
Patent costs
|
||||
Intangible assets | 337,163 | 224,971 | 18,870 | |
Website costs
|
||||
Accumulated amortization | 83,668 | 77,159 | 48,383 | |
Intangible assets | $ 8,075 | $ 14,584 | $ 43,361 |
X | ||||||||||
- Definition
Accumulated amount of amortization of assets, excluding financial assets and goodwill, lacking physical substance with a finite life. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Amount before amortization of assets, excluding financial assets and goodwill, lacking physical substance with a finite life. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
OTHER CURRENT LIABILITIES (Details Narrative) (USD $)
|
Jun. 30, 2013
|
Dec. 31, 2012
|
---|---|---|
Other Current Liabilities Details Narrative | ||
Dividends Payable, amount per share | $ 0.40 | $ 0.40 |
X | ||||||||||
- Details
|
X | ||||||||||
- Definition
The per share amount of a dividend declared, but not paid, as of the financial reporting date. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
OTHER CURRENT LIABILITIES (Details) (USD $)
|
Jun. 30, 2013
|
Dec. 31, 2012
|
Dec. 31, 2011
|
Dec. 31, 2010
|
||||
---|---|---|---|---|---|---|---|---|
Other Current Liabilities | ||||||||
Accrued offering costs | $ 500,000 | |||||||
Accrued payroll | 228,877 | 285,210 | 295,915 | 0 | ||||
Accrued vacation | 263,851 | 114,899 | 68,438 | 24,208 | ||||
Accrued commision | 112,000 | |||||||
Accrued legal and accounting expense | 120,250 | 90,000 | 15,010 | |||||
Allowance for coupons and returns | 86,540 | 53,002 | ||||||
Dividends payable | 41,359 | 41,359 | [1] | 41,359 | [1] | 0 | ||
Other accrued expenses | 93,853 | 29,400 | 45,025 | 90,998 | ||||
Other current liabilities | $ 1,334,730 | $ 725,870 | $ 465,747 | $ 115,206 | ||||
|
X | ||||||||||
- Details
|
X | ||||||||||
- Definition
Aggregate allowance consisting of: (i) sales discounts given by the entity, including, but not limited to, early payments of accounts due, (ii) the total deduction from sales during the period arising from goods returned by customers (other than under warranty provisions), and (iii) price reductions (allowance, price protection agreements) given by the entity. Discounts, returns and allowances are a deduction from gross revenue in arriving at net revenue. No definition available.
|
X | ||||||||||
- Definition
Sum of the carrying values as of the balance sheet date of obligations incurred through that date and due within one year (or the operating cycle, if longer), including liabilities incurred (and for which invoices have typically been received) and payable to vendors for goods and services received, taxes, interest, rent and utilities, accrued salaries and bonuses, payroll taxes and fringe benefits. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Carrying value as of the balance sheet date of obligations incurred through that date and payable for professional fees, such as for legal and accounting services received. Used to reflect the current portion of the liabilities (due within one year or within the normal operating cycle if longer). Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Carrying value as of the balance sheet date of the obligations incurred through that date and payable for employees' services provided. Used to reflect the current portion of the liabilities (due within one year or within the normal operating cycle if longer). Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Carrying value as of the balance sheet date of obligations incurred through that date and payable for sales commissions. Used to reflect the current portion of the liabilities (due within one year or within the normal operating cycle if longer). Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Carrying value as of the balance sheet date of obligations incurred and payable for unused vacation time owed to employees based on the entity's vacation benefit given to its employees. Used to reflect the current portion of the liabilities (due within one year or within the normal operating cycle if longer). Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Carrying value as of the balance sheet date of dividends declared but unpaid on equity securities issued by the entity and outstanding. Used to reflect the current portion of the liabilities (due within one year or within the normal operating cycle if longer). Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Carrying value as of the balance sheet date of obligations incurred through that date and payable arising from transactions not otherwise specified in the taxonomy. Used to reflect the current portion of the liabilities (due within one year or within the normal operating cycle if longer). Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Aggregate carrying amount of current liabilities (due within one year or within the normal operating cycle if longer) not separately disclosed in the balance sheet. Includes costs that are statutory in nature, are incurred on contractual obligations, or accumulate over time and for which invoices have not yet been received or will not be rendered and of liabilities not separately disclosed. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
NOTES PAYABLE (Details Narrative) (USD $)
|
3 Months Ended | 6 Months Ended | 12 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 12 Months Ended | |||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
Dec. 31, 2012
|
Dec. 31, 2011
|
Dec. 31, 2010
|
Dec. 31, 2012
February 24 Debt Issuance
|
Dec. 31, 2012
June 19 Debt Issuance
|
Dec. 31, 2011
March 1 2011 Debt Issuance
|
Dec. 31, 2012
November and December 2011 Debt Issuance
|
Dec. 31, 2011
November and December 2011 Debt Issuance
|
Dec. 31, 2012
VitaMed Promissory Note June 2011
|
Dec. 31, 2011
VitaMed Promissory Note June 2011
|
Dec. 31, 2012
First United Line of Credit
|
Dec. 31, 2011
First United Line of Credit
|
Dec. 31, 2011
VitaMed Promissory Notes September October 2011
|
Dec. 31, 2012
December 2011 Debt Issuance
|
Dec. 31, 2011
December 2011 Debt Issuance
|
Oct. 18, 2011
Promissory Notes issued for consulting services
|
Apr. 18, 2011
Promissory Notes issued for consulting services
|
Dec. 31, 2010
Promissory Notes issued for consulting services
|
Dec. 31, 2012
Promissory Note Individual
February 24 Debt Issuance
|
Dec. 31, 2012
Promissory Note Individual
June 19 Debt Issuance
|
Dec. 31, 2012
Promissory Note Entity
February 24 Debt Issuance
|
Dec. 31, 2012
Promissory Note Entity
June 19 Debt Issuance
|
|
Debt Interest rate | 6.00% | 20.00% | 6.00% | 6.00% | 6.00% | 6.00% | 4.00% | 6.00% | 6.00% | 6.00% | 6.00% | 6.00% | ||||||||||||||
Promissory notes sold in January and February 2012 | $ 900,000 | |||||||||||||||||||||||||
Promissory notes sold in August and September 2012 | 1,600,000 | |||||||||||||||||||||||||
Promissory notes sold in September 2012 | 200,000 | |||||||||||||||||||||||||
Promissory notes, principal | 3,102,000 | 500,000 | 500,000 | 534,160 | 210,000 | 210,000 | 1,358,014 | 2,347,128 | 1,357,110 | 2,344,719 | ||||||||||||||||
Warrants Issued | 613,718 | 1,415,136 | 4,500,000 | 4,500,000 | ||||||||||||||||||||||
New Funding | 1,000,000 | 2,000,000 | ||||||||||||||||||||||||
Notes surrendered | 1,700,000 | 2,691,847 | 1,347,128 | 1,344,719 | ||||||||||||||||||||||
Accrued Interest forfeited | 15,124 | |||||||||||||||||||||||||
Warrants Issued - Note Modification | 5,685,300 | 7,000,000 | ||||||||||||||||||||||||
Warrants Issued - new Funding | 3,314,700 | 7,000,000 | ||||||||||||||||||||||||
Fair Value of Prior Notes Extinguished | 1,517,741 | |||||||||||||||||||||||||
Debt Discount from February 24, 2012 note | 197,383 | |||||||||||||||||||||||||
Loss on extinguishment of debt | (10,307,864) | (10,307,864) | (7,390,000) | 10,307,864 | ||||||||||||||||||||||
FV Warrants - treated as Debt Discount | 859,647 | 1,649,890 | ||||||||||||||||||||||||
Interest Expense | 859,647 | 33,204 | 21,453 | 7,366 | 5,650 | 6,344 | 2,390 | |||||||||||||||||||
Additional Funding - March-May2012 | 3,000,000 | |||||||||||||||||||||||||
Shares issued in exercise of warrants | 3,102,000 | 17,250 | 3,102,000 | |||||||||||||||||||||||
Shares issued in exercise of warrants, shares | 8,145,486 | 92,057 | 8,145,486 | |||||||||||||||||||||||
Interest Rate of June 19, 2012 notes | 6.00% | 6.00% | ||||||||||||||||||||||||
Amortization of debt discount | 1,604,240 | 28,719 | 0 | 859,647 | 547,210 | |||||||||||||||||||||
Notes payable, net of debt discount of $1,102,680 and $0, respectively | 3,589,167 | 800,000 | ||||||||||||||||||||||||
Debt discount on notes payable | 1,102,680 | 0 | 859,647 | 1,102,680 | 28,719 | |||||||||||||||||||||
VitaMed Senior Secured Promissory Notes Interest Rate | 6.00% | 6.00% | ||||||||||||||||||||||||
Value of debt converted to shares | 1,054,647 | 849,137 | 1,054,647 | 1,054,647 | 7,600,000 | |||||||||||||||||||||
Shares issued in exchange for debt, shares | 2,775,415 | 21,681,958 | 2,775,415 | 2,775,415 | 20,000,000 | |||||||||||||||||||||
Conversion Price Per share | $ 0.38 | $ 0.38 | $ 0.38 | |||||||||||||||||||||||
Beneficial Conversion Feature | (6,716,504) | (6,716,504) | (6,716,504) | |||||||||||||||||||||||
First United line of credit, maximum | 300,000 | |||||||||||||||||||||||||
First United line of credit, Personal Guarantees | 100,000 | |||||||||||||||||||||||||
First United line of credit, Personal Guarantees Warrants Issued | 613,713 | |||||||||||||||||||||||||
First United line of credit, Interest Rate | 3.02% | |||||||||||||||||||||||||
First United line of credit, extension Interest Rate | 2.35% | |||||||||||||||||||||||||
First United line of credit, Outstanding Principal | 299,220 | |||||||||||||||||||||||||
Notes Paydown July 2011 | 200,000 | |||||||||||||||||||||||||
Notes extension | 300,000 | |||||||||||||||||||||||||
Notes Paydown October 2011 | 50,000 | 170,152 | ||||||||||||||||||||||||
Notes conversion, value | 100,000 | 100,000 | ||||||||||||||||||||||||
Notes conversion Common Stock | 266,822 | 266,822 | ||||||||||||||||||||||||
Interest Accrued - VitaMed Promissory Notes paid in full | 2,160 | |||||||||||||||||||||||||
Promissory notes extended through October 15, 2012 - Milligan | 50,000 | |||||||||||||||||||||||||
Promissory notes extended through October 15, 2012 - BF Investments | 50,000 | |||||||||||||||||||||||||
Promissory Notes Issued December 2011 | 100,000 | |||||||||||||||||||||||||
Promissory Notes Issued December 2011, value of each note | 50,000 | |||||||||||||||||||||||||
Promissory Notes Issued December 2011 outstanding balance | 50,000 | |||||||||||||||||||||||||
Interest Accrued and paid in full - Promissory Notes Issued December 2011 | 888 | |||||||||||||||||||||||||
Notes payable, related parties | $ 200,000 |
X | ||||||||||
- Definition
Additional funding the company received from parties of the February 24, 2012 note in March - May 2012. No definition available.
|
X | ||||||||||
- Definition
Debt discount of prior notes recognized in conjunction with new funding via notes issued on February 24, 2012. No definition available.
|
X | ||||||||||
- Definition
Fair value of warrants treated as a debt discount recognized in conjunction with new funding via notes issued on February 24, 2012 and June 19, 2012. No definition available.
|
X | ||||||||||
- Definition
The fair value of prior notes extinguished. No definition available.
|
X | ||||||||||
- Definition
Warrants to purchase shares of common stock issued in consideration of personal guarantees by officers of the company for the bank line of credit received from First United Bank in March 2011. No definition available.
|
X | ||||||||||
- Definition
The interest rate for the bank line of credit extension received from First United Bank in March 2012. No definition available.
|
X | ||||||||||
- Definition
Personal guarantees by officers of the company for the bank line of credit received from First United Bank in March 2011. No definition available.
|
X | ||||||||||
- Definition
Annual interest rate to be paid for notes issued on June 19, 2012. No definition available.
|
X | ||||||||||
- Definition
The amount of accrued interest forfeited in conjunction with notes issued on February 24, 2012. No definition available.
|
X | ||||||||||
- Definition
Total proceeds of notes issued on February 24, 2012 and June 19, 2012. No definition available.
|
X | ||||||||||
- Definition
The amount of other promissory notes surrendered in conjunction with notes issued on February 24, 2012 and June 19, 2012. No definition available.
|
X | ||||||||||
- Definition
Face value of six percent pormissory notes sold in January and February 2012 and due on March 1, 2012 that were subsequently modified on February 24, 2012. No definition available.
|
X | ||||||||||
- Definition
6% promissory notes sold by the company in August and September 2012 and due October 1, 2012. No definition available.
|
X | ||||||||||
- Definition
6% promissory notes sold by the company in September 2012 and due October 15, 2012. No definition available.
|
X | ||||||||||
- Definition
Promissory notes held by BF Investments and extended through Octboer 15, 2012. No definition available.
|
X | ||||||||||
- Definition
Promissory notes held by Mr. Milligan and extended through Octboer 15, 2012. No definition available.
|
X | ||||||||||
- Definition
The aggregate face amount of promissory notes issued in December 2011. No definition available.
|
X | ||||||||||
- Definition
The outstanding balance as of balance sheet date of promissory notes issued in December 2011. No definition available.
|
X | ||||||||||
- Definition
Fair value of warrants granted in conjunction with the sale of a note on February 24, 2012 that were issued in consideration of the modification of the prior notes. No definition available.
|
X | ||||||||||
- Definition
The face amount of each promissory note issued in December 2011. No definition available.
|
X | ||||||||||
- Definition
The face amount of promissory notes issued in June 2011 that were extended for payment until the closing of the merger with Therapeutics upon the the closing of new funding in July 2011. No definition available.
|
X | ||||||||||
- Definition
Interest accrued in the period for promissory notes issued in June 2011 that were extended for payment in October 2011 to June 1, 2012. This accrued interest was paid off to the unaffiliated individual noteholder along with outstanding principal. No definition available.
|
X | ||||||||||
- Definition
The face amount of promissory notes issued in June 2011 that were paid in full at the closing of new funding in July 2011. No definition available.
|
X | ||||||||||
- Definition
The face amount of promissory notes issued in June 2011 that were paid in full in October 2011. No definition available.
|
X | ||||||||||
- Definition
The stated annual interest rate of senior secured promissory notes issued in July 2011. No definition available.
|
X | ||||||||||
- Definition
The number of warrants to purchase company's common stock issued in conjunction with the sale of a note on February 24, 2012 that were issued in consideration of the modification of the prior notes. No definition available.
|
X | ||||||||||
- Definition
Warrants to purchase company's common stock issued in conjunction with the sale of notes. No definition available.
|
X | ||||||||||
- Definition
The number of warrants to purchase company's common stock issued in conjunction with the sale of notes on February 24, 2012 and June 19, 2012 that were issued in consideration of the new funding. No definition available.
|
X | ||||||||||
- Definition
Amount of noncash expense included in interest expense to amortize debt discount and premium associated with the related debt instruments. Excludes amortization of financing costs. Alternate captions include noncash interest expense. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The number of shares issued in exchange for the original debt being converted in a noncash (or part noncash) transaction. "Part noncash" refers to that portion of the transaction not resulting in cash receipts or payments in the period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The amount of the original debt being converted in a noncash (or part noncash) transaction. "Part noncash" refers to that portion of the transaction not resulting in cash receipts or cash payments in the period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Amount of a favorable spread to a debt holder between the amount of debt being converted and the value of the securities received upon conversion. This is an embedded conversion feature of convertible debt issued that is in-the-money at the commitment date. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The price per share of the conversion feature embedded in the debt instrument. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Interest rate stated in the contractual debt agreement. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The amount of debt discount that was originally recognized at the issuance of the instrument that has yet to be amortized. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Difference between the fair value of payments made and the carrying amount of debt which is extinguished prior to maturity. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Interest and debt related expenses associated with nonoperating financing activities of the entity. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Amount borrowed under the credit facility as of the balance sheet date. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The effective interest rate at the end of the reporting period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Maximum borrowing capacity under the credit facility without consideration of any current restrictions on the amount that could be borrowed or the amounts currently outstanding under the facility. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Carrying value as of the balance sheet date of notes payable (with maturities initially due after one year or beyond the operating cycle if longer), excluding current portion. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Including the current and noncurrent portions, aggregate carrying amount of all types of notes payable, as of the balance sheet date, with initial maturities beyond one year or beyond the normal operating cycle, if longer. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The amount for notes payable (written promise to pay), due to related parties. Used to reflect the current portion of the liabilities (due within one year or within the normal operating cycle if longer). Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Number of shares issued during the period as a result of the conversion of convertible securities. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Number of shares of stock issued during the period that is attributable to transactions involving issuance of stock not separately disclosed. No definition available.
|
X | ||||||||||
- Definition
The gross value of stock issued during the period upon the conversion of convertible securities. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Value of shares of stock issued during the period that is attributable to transactions involving issuance of stock not separately disclosed. No definition available.
|
NOTES PAYABLE (Details Narrative1) (USD $)
|
6 Months Ended | 12 Months Ended | 0 Months Ended | 1 Months Ended | 0 Months Ended | 1 Months Ended | 0 Months Ended | 0 Months Ended | 0 Months Ended | 0 Months Ended | 3 Months Ended | 0 Months Ended | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Dec. 31, 2012
|
Dec. 31, 2011
|
Apr. 25, 2013
First United Bank Line of Credit
|
Feb. 28, 2013
First United Bank Line of Credit
|
Mar. 31, 2011
First United Bank Line of Credit
|
Jan. 31, 2013
Plato and Associates Note
|
Mar. 31, 2013
Plato and Associates Note
|
Feb. 28, 2013
Plato and Associates Note
|
Feb. 24, 2012
Promissory Notes
|
Feb. 28, 2012
Promissory Notes
|
Jun. 19, 2012
Promissory Note Individual - February 2012 Notes Issuance
|
Feb. 24, 2012
Promissory Note Individual - February 2012 Notes Issuance
|
Jun. 19, 2012
Promissory Note Entity - February 2012 Notes Issuance
|
Feb. 24, 2012
Promissory Note Entity - February 2012 Notes Issuance
|
Jun. 19, 2012
Promissory Notes - February 2012 Notes Issuance
|
Feb. 24, 2012
Promissory Notes - February 2012 Notes Issuance
|
May 31, 2012
Promissory Notes - February 2012 Notes Issuance
|
Jun. 19, 2012
Promissory Note Individual - June 2012 Notes Issuance
|
Jun. 19, 2012
Promissory Note Entity - June 2012 Notes Issuance
|
Mar. 21, 2013
Promissory Notes - June 2012 Notes Issuance
|
Jun. 19, 2012
Promissory Notes - June 2012 Notes Issuance
|
Mar. 31, 2013
Promissory Notes - June 2012 Notes Issuance
|
|
Debt Interest rate | 6.00% | 3.02% | 6.00% | 6.00% | 6.00% | 6.00% | ||||||||||||||||||
Promissory notes, principal | $ 3,102,000 | $ 10,000,000 | $ 900,000 | $ 1,358,014 | $ 1,357,110 | $ 2,347,128 | $ 2,344,179 | |||||||||||||||||
Proceeds from revolving credit note | 200,000 | 200,000 | ||||||||||||||||||||||
Repayment of revolving credit note | 401,085 | |||||||||||||||||||||||
Warrants Issued in conjunction with debt | 1,250,000 | 9,000,000 | 7,000,000 | |||||||||||||||||||||
Exercise Price per share of warrants issued | 3.20 | 0.38 | ||||||||||||||||||||||
Proceeds from notes and loans payable | 6,900,000 | 8,700,000 | 2,684,160 | 100,000 | 300,000 | |||||||||||||||||||
Collateral for line of credit | 100,000 | 100,000 | ||||||||||||||||||||||
Repayment of line of credit | 100,735 | |||||||||||||||||||||||
New Funding | 1,000,000 | 3,000,000 | 2,000,000 | |||||||||||||||||||||
Notes surrendered | 1,700,000 | 1,347,128 | 1,344,719 | 2,691,847 | ||||||||||||||||||||
Accrued Interest forfeited | 15,124 | |||||||||||||||||||||||
Value of debt converted via warrant conversion | 1,054,657 | 8,239,137 | 3,102,000 | |||||||||||||||||||||
Number of shares issued in warrant conversion (as related to debt) | 2,775,415 | 21,681,958 | 8,145,486 | |||||||||||||||||||||
Repayment of notes payable | (4,691,847) | (50,780) | (1,850,000) | (200,000) | 4,882,019 | |||||||||||||||||||
Accrued Interest | $ 28,321 | $ 21,595 |
X | ||||||||||
- Definition
The amount of accrued interest forfeited in conjunction with notes issued on February 24, 2012. No definition available.
|
X | ||||||||||
- Definition
Total proceeds of notes issued on February 24, 2012 and June 19, 2012. No definition available.
|
X | ||||||||||
- Definition
The amount of other promissory notes surrendered in conjunction with notes issued on February 24, 2012 and June 19, 2012. No definition available.
|
X | ||||||||||
- Definition
Exercise price of modification warrants issued. No definition available.
|
X | ||||||||||
- Definition
Warrants to purchase company's common stock issued in conjunction with the sale of notes. No definition available.
|
X | ||||||||||
- Definition
The amount of a specific compensating balance arrangement that is maintained under an agreement for a bank loan or future credit availability. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The value of the financial instrument(s) that the original debt is being converted into in a noncash (or part noncash) transaction. "Part noncash" refers to that portion of the transaction not resulting in cash receipts or cash payments in the period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The number of shares issued in exchange for the original debt being converted in a noncash (or part noncash) transaction. "Part noncash" refers to that portion of the transaction not resulting in cash receipts or payments in the period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Interest rate stated in the contractual debt agreement. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Carrying value as of the balance sheet date of [accrued] interest payable on all forms of debt, including trade payables, that has been incurred and is unpaid. Used to reflect the current portion of the liabilities (due within one year or within the normal operating cycle if longer). Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Including the current and noncurrent portions, aggregate carrying amount of all types of notes payable, as of the balance sheet date, with initial maturities beyond one year or beyond the normal operating cycle, if longer. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The cash inflow from additional borrowings, net of cash paid to third parties in connection with debt origination. No definition available.
|
X | ||||||||||
- Definition
The net cash inflow or cash outflow from a contractual arrangement with the lender, including letter of credit, standby letter of credit and revolving credit arrangements, under which borrowings can be made up to a specific amount at any point in time with either short term or long term maturity that is collateralized (backed by pledge, mortgage or other lien in the entity's assets). Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The cash inflow from a borrowing having initial term of repayment within one year or the normal operating cycle, if longer. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The cash outflow during the period from the repayment of aggregate short-term and long-term debt. Excludes payment of capital lease obligations. No definition available.
|
X | ||||||||||
- Definition
The cash outflow for a borrowing supported by a written promise to pay an obligation. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
STOCKHOLDERS' EQUITY (Details Narrative) (USD $)
|
0 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | 4 Months Ended | 0 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | 9 Months Ended | 27 Months Ended | 3 Months Ended | 12 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 07, 2013
|
Oct. 02, 2011
|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
Dec. 31, 2012
|
Dec. 31, 2011
|
Dec. 31, 2010
|
Oct. 03, 2011
|
Jul. 29, 2011
|
Jul. 28, 2011
|
May 31, 2011
VitaMed
|
Jun. 30, 2013
2009 Long Term Incentive Compensation Plan
|
Dec. 31, 2012
2009 Long Term Incentive Compensation Plan
|
Jun. 30, 2013
2012 Stock Incentive Plan
|
Dec. 31, 2012
2012 Stock Incentive Plan
|
Feb. 27, 2012
Company Officer
|
Dec. 31, 2011
Dr. Bernick, Director
|
Dec. 31, 2012
Company Warrants
|
Dec. 31, 2011
Company Warrants
|
Jun. 30, 2013
Company Warrants
|
Dec. 31, 2012
Company Warrants
Services
|
Dec. 31, 2011
Company Warrants
Services
|
Dec. 31, 2012
Company Warrants
Services - VitaMed Contract
|
Dec. 31, 2011
Company Warrants
Services - VitaMed Contract
|
Dec. 31, 2011
Company Warrants
Services Provided in October 2011
|
Dec. 31, 2011
Company Warrants
Services Provided in December 2011
|
Dec. 31, 2012
Company Warrants
Lower Range
|
Dec. 31, 2011
Company Warrants
Lower Range
|
Dec. 31, 2011
Company Warrants
Lower Range
Services
|
Dec. 31, 2012
Company Warrants
Upper Range
|
Dec. 31, 2011
Company Warrants
Upper Range
|
Dec. 31, 2011
Company Warrants
Upper Range
Services
|
Dec. 31, 2012
Warrants Issued in March 2012
Services
|
Dec. 31, 2012
Warrants Issued in May 2012
Services
|
Dec. 31, 2012
Warrants Issued in June 2012
Services
|
Dec. 31, 2011
VitaMed Warrants
Services - VitaMed Contract
|
Oct. 03, 2011
VitaMed Stock Options
|
Dec. 31, 2010
VitaMed Stock Options
|
Dec. 31, 2011
Company Options
|
Dec. 31, 2012
Company Options
|
Dec. 31, 2011
Company Options
|
Dec. 31, 2010
Company Options
|
Dec. 31, 2012
Company Options
Lower Range
|
Dec. 31, 2011
Company Options
Lower Range
|
Dec. 31, 2012
Company Options
Upper Range
|
Dec. 31, 2011
Company Options
Upper Range
|
Oct. 05, 2011
Stock Purchase Agreement with Pernix Therapeutics
|
Dec. 31, 2012
February 24 Debt Issuance
|
Dec. 31, 2012
June 19 Debt Issuance
|
Dec. 31, 2012
June 19 Debt Issuance
Warrants Tranche 2
|
Dec. 31, 2012
June 19 Debt Issuance
Warrants Tranche 1
|
Dec. 31, 2012
March 2011 Line of Credit
Company Warrants
|
Dec. 31, 2012
VitaMed Promissory Note June 2011
|
Dec. 31, 2011
VitaMed Promissory Note June 2011
|
Dec. 31, 2012
VitaMed Promissory Note June 2011
Company Warrants
|
Dec. 31, 2012
VitaMed Promissory Note June 2011
VitaMed Warrants
|
Dec. 31, 2012
VitaMed Promissory Note June 2011
VitaMed Warrants
Lower Range
|
Dec. 31, 2012
VitaMed Promissory Note June 2011
VitaMed Warrants
Upper Range
|
Dec. 31, 2012
Company Warrants
Services
Company Officer
|
Dec. 31, 2011
Company Warrants
Services
Company Officer
|
Apr. 12, 2013
Underwriters
|
Dec. 31, 2012
Lang
Weighted Average Exercise Price
Services Provided in October 2011
|
Dec. 31, 2011
Lang
Weighted Average Exercise Price
Services Provided in October 2011
|
|||||
Common stock, shares outstanding | 131,212,706 | 131,212,706 | 99,784,982 | 82,978,804 | 55,487,321 | 58,573,187 | 165,856 | 16,575,209 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares issued for exercise of options | $ 6,251 | $ 191,000 | $ 17,250 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares issued for exercise of options, shares | (61,372) | 1,931,788 | 92,057 | (1,931,788) | (92,057) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Noncash options exercised shares forfeited in lieu of cash | 26,428 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Noncash options exercised net options received | 240,395 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares issued in exercise of warrants | 3,102,000 | 17,250 | 3,102,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares issued in exercise of warrants, shares | 8,145,486 | 92,057 | 8,145,486 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Value of debt converted to shares | 1,054,647 | 849,137 | 1,054,647 | 1,054,647 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares issued in exchange for debt, shares | 2,775,415 | 21,681,958 | 2,775,415 | 2,775,415 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Conversion Price Per share | $ 0.38 | $ 0.38 | $ 0.38 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares issued in private placement | 7,895,485 | 1,707,000 | 3,170,643 | 1,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares issued in private placement, shares | 29,411,765 | 3,953,489 | 5,551,589 | 2,631,579 | 1,954,587 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash fees paid to private placement agent | 552,500 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Legal fees paid for investors in private placement | 52,016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Price per share of common stock issued in private placement | $ 2.15 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Aggregate purchase price of common stock sold in private placement | 8,500,001 | 707,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Purchase Price | $ 1.70 | $ 1.70 | $ 0.38 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reverse split description | 1 for 100 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Warrants outstanding | 12,193,499 | 3,057,627 | 12,193,499 | 14,293,499 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Weighted average contractual life | 4 years 9 months 18 days | 8 years 8 months 15 days | 4 years 9 months 18 days | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Exercise Price | $ 1.63 | $ 0.36 | $ 1.79 | $ 0.24 | $ 3.00 | $ 0.16 | $ 1.16 | $ 0.16 | $ 2.20 | $ 0.10 | $ 3.40 | $ 1.22 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unamortized costs warrants | 93,000 | 349,000 | 3,995,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Warrants Issued | 613,713 | 613,718 | 613,718 | 500,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Warrants Issued - Note Modification | 5,685,300 | 7,000,000 | 1,000,000 | 6,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Warrants Issued - new Funding | 3,314,700 | 0.2444 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Exercise Price per share of warrants issued | 0.38 | 3.00 | 2.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Modification Warrants Issued February 2012 | 10,505,247 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FV Warrants Issued - new Funding | 6,124,873 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Valuation Method | Black-Scholes | Black-Scholes | Black-Scholes Method | Black-Scholes Method | Black-Scholes Method | Black-Scholes Method | Black-Scholes Method | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expected term | 5 years | 7 years 10 months 24 days | 5 years | 5 years | 10 years | 5 years | 5 years | 10 years | 10 years | 5 years | 5 years | 5 years | 5 years | 5 years | 5 years 6 months | 6 years 3 months | 6 years 3 months | 5 years | 5 years | 10 years | 5 years | 5 years | 10 years | ||||||||||||||||||||||||||||||||||||||||||||||
Expected Volatility | 41.04% | 51.83% | 44.64% | 39.13% | 44.81% | 51.83% | 44.81% | 44.71% | 44.78% | 39.44% | 40.77% | 37.92% | 46.01% | 40.48% | 44.50% | 44.64% | 47.89% | 39.13% | 39.15% | 45.94% | 45.94% | ||||||||||||||||||||||||||||||||||||||||||||||||
Risk-free interest rate | 1.08% | 0.91% | 0.72% | 0.91% | 1.04% | 3.48% | 1.04% | 0.74% | 0.72% | 1.56% | 0.61% | 0.91% | 2.23% | 2.54% | 0.89% | 0.75% | 3.48% | 1.38% | 1.65% | 2.23% | 2.23% | ||||||||||||||||||||||||||||||||||||||||||||||||
Expected dividend yield | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt discount on notes payable | 1,102,680 | 0 | 859,647 | 1,102,680 | 28,719 | 30,993 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amortization of debt discount | 1,604,240 | 28,719 | 0 | 859,647 | 547,210 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Warrants Fair Value | 27,618,722 | 474,267 | 1,563,620 | 159,363 | 25,980 | 338 | 1,532,228 | 12,548 | 9,424,982 | 86,139 | 133,045 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value on grant date | 1,649,890 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Warrants issued for consulting services | 245,485 | 184,211 | 500 | 31,000 | 1,300,000 | 1,500 | 200,000 | 600,000 | 800,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Awards issued for services, professional fees recognized | 6,936 | 5,612 | 15 | 29,736 | 218,045 | 1,656 | 36,284 | 7,158 | 88,696 | 17,010 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Prepaid Consulting Expense, Short Term | 323 | 360,528 | 71,688 | 160,384 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Prepaid Consulting Expense, Long Term | 1,980,519 | 1,980,519 | 953,655 | 80,515 | 0 | 953,655 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Warrants vesting terms | Awards vest 76,714 shares per calendar quarter end | vests over a 44-month period beginning on November 21, 2011 (or 13,36 shares for months 1-43 and 13,652 shares for month 44) | vests over a 44-month period beginning on November 21, 2011 (or 13,36 shares for months 1-43 and 13,652 shares for month 44) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Repayment of bank line of credit | (500,000) | (300,000) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Warrants vested | 562,571 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loan guaranty costs | (11,745) | (2,944) | (23,490) | (45,036) | (38,159) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Warrant cost to be recognized | 89,603 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares authorized under incentive plan | 25,000,000 | 25,000,000 | 25,000,000 | 10,000,000 | 10,000,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares issued under incentive plans | 12,934,725 | 11,508,488 | 1,625,000 | 2,225,000 | 10,590,161 | 13,733,488 | 10,590,161 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Awards Granted | 300,000 | 762,235 | 9,357,561 | 562,422 | 5,121,250 | [1] | 10,682,218 | [1] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
VitaMed options cancelled | 16,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
VitaMed Options | 621,000 | 7,639,722 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Weighted average grant date fair value of options granted | $ 1.16 | $ 0.16 | $ 0.19 | $ 0.09 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share based compensation expense | 1,179,912 | 529,129 | 1,868,345 | 190,513 | 177,601 | 1,832,062 | 183,355 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Allocatede share-based compensation expense | 180,087 | 177,601 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unrecognized estimated compensation expense | 3,695,420 | 3,695,420 | 4,391,000 | 244,000 | 206,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Period for recognition of remaining unrecognized compensation expense | 1 year 5 months 26 days | 1 year 9 months 18 days | 3 years 4 months | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Price per share for private placement shares that may be purchased by underwriter | $ 1.581 | $ 1.581 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net proceeds from private placement offering (not including shares purchased by underwriters) | 50,000,000 | 45,400,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Options to purchase shares granted to underwriter | 4,411,765 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Proceeds from sale of common stock, net | 48,512,460 | 7,895,485 | 1,000,000 | 3,100,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of units for cash | $ 8,500,001 | $ 707,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of units for cash (units) | 2,892,630 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
X | ||||||||||
- Definition
The fair value of warrants to purchase company's common stock issued in conjunction with the sale of a note on February 24, 2012 that were issued in consideration of the modification of the prior notes. No definition available.
|
X | ||||||||||
- Definition
The fair value of awards, as calculated on grant date utilizing the relative fair value calculation. No definition available.
|
X | ||||||||||
- Definition
The expense incurred for loan guaranty costs. No definition available.
|
X | ||||||||||
- Definition
The net number of options exercised to purchase shares by an employee on March 30, 2012 under the cashless exercise provision, taking into calculation the number of shares forfeited in lieu of cash payment. No definition available.
|
X | ||||||||||
- Definition
Shares surrendered in lieu of cash to satisfy the cashless exercise provision. No definition available.
|
X | ||||||||||
- Definition
Number of options to purchase shares of common stock granted to the underwriter in conjunction with the private placement of shares of common stock. No definition available.
|
X | ||||||||||
- Definition
Cash fees paid to the placement agent in the issuance of common stock via a private placement purchase agreement. No definition available.
|
X | ||||||||||
- Definition
Weighted average remaining contractual term for equity-based awards excluding options, in 'PnYnMnDTnHnMnS' format, for example, 'P1Y5M13D' represents the reported fact of one year, five months, and thirteen days. No definition available.
|
X | ||||||||||
- Definition
Price of a single share of a number of saleable stocks of a company that may be purchased by the underwriting agent. No definition available.
|
X | ||||||||||
- Definition
The number of VitaMed option units converted to company's option shares after the merger. No definition available.
|
X | ||||||||||
- Definition
The number of VitaMed option units canceled as part of the merger agreement. No definition available.
|
X | ||||||||||
- Definition
Deferred cost of warrants to be recognized evenly over the remaining length of the term. No definition available.
|
X | ||||||||||
- Definition
The number of warrants to purchase company's common stock issued in conjunction with the sale of a note on February 24, 2012 that were issued in consideration of the modification of the prior notes. No definition available.
|
X | ||||||||||
- Definition
Warrants issued for consulting services provided. No definition available.
|
X | ||||||||||
- Definition
Exercise price of modification warrants issued. No definition available.
|
X | ||||||||||
- Definition
The fair value of outstanding warrants as of the balance sheet date. No definition available.
|
X | ||||||||||
- Definition
Warrants to purchase company's common stock issued in conjunction with the sale of notes. No definition available.
|
X | ||||||||||
- Definition
The number of warrants to purchase company's common stock issued in conjunction with the sale of notes on February 24, 2012 and June 19, 2012 that were issued in consideration of the new funding. No definition available.
|
X | ||||||||||
- Definition
Fair value of warrants to purchase common stock issued in conjunction with new fundings in February and June 2012. No definition available.
|
X | ||||||||||
- Definition
Represents the expense recognized during the period arising from equity-based compensation arrangements (for example, shares of stock, unit, stock options or other equity instruments) with employees, directors and certain consultants qualifying for treatment as employees. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Amount of noncash expense included in interest expense to amortize debt discount and premium associated with the related debt instruments. Excludes amortization of financing costs. Alternate captions include noncash interest expense. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Aggregate amount of each class of warrants or rights outstanding. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Number of shares of common stock outstanding. Common stock represent the ownership interest in a corporation. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The number of shares issued in exchange for the original debt being converted in a noncash (or part noncash) transaction. "Part noncash" refers to that portion of the transaction not resulting in cash receipts or payments in the period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The amount of the original debt being converted in a noncash (or part noncash) transaction. "Part noncash" refers to that portion of the transaction not resulting in cash receipts or cash payments in the period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The price per share of the conversion feature embedded in the debt instrument. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The amount of debt discount that was originally recognized at the issuance of the instrument that has yet to be amortized. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
As of the balance sheet date, the aggregate unrecognized cost of equity-based awards made to employees under equity-based compensation awards that have yet to vest. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Weighted average period over which unrecognized compensation is expected to be recognized for equity-based compensation plans, in 'PnYnMnDTnHnMnS' format, for example, 'P1Y5M13D' represents the reported fact of one year, five months, and thirteen days. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Aggregate unrecognized cost of share-based awards, other than options, made to employees under an equity-based compensation plan, that have yet to vest. No definition available.
|
X | ||||||||||
- Definition
The amount of expense provided in the period for legal costs incurred on or before the balance sheet date pertaining to resolved, pending or threatened litigation, including arbitration and mediation proceedings. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The total of the amounts paid in advance for capitalized costs that will be expensed with the passage of time or the occurrence of a triggering event, and will be charged against earnings within one year or the normal operating cycle, if longer, and the aggregate carrying amount of current assets, as of the balance sheet date, not separately presented elsewhere in the balance sheet. Current assets are expected to be realized or consumed within one year (or the normal operating cycle, if longer). Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Sum of the carrying amounts as of the balance sheet date of amounts paid in advance for expenses which will be charged against earnings in periods after one year or beyond the operating cycle, if longer. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The cash inflow from the additional capital contribution to the entity. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The cash inflow from the issuance of common stock, preferred stock, treasury stock, stock options, and other types of equity. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
A fee charged for services from professionals such as doctors, lawyers and accountants. The term is often expanded to include other professions, for example, pharmacists charging to maintain a medicinal profile of a client or customer. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The cash outflow to pay off an obligation from a contractual arrangement with the lender, including letter of credit, standby letter of credit and revolving credit arrangements, under which borrowings can be made up to a specific amount at any point in time with either short term or long term maturity. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Per share amount received by subsidiary or equity investee for each share of common stock issued or sold in the stock transaction. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The aggregate amount of noncash, equity-based employee remuneration. This may include the value of stock or unit options, amortization of restricted stock or units, and adjustment for officers' compensation. As noncash, this element is an add back when calculating net cash generated by operating activities using the indirect method. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Description of award terms as to how many shares or portion of an award are no longer contingent on satisfaction of either a service condition, market condition or a performance condition, thereby giving the employee the legal right to convert the award to shares, to sell the shares, and be entitled to the cash proceeds of such sale. For example, vesting may be expressed as being 25 percent of the shares under option on each anniversary of the grant date. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The number of equity-based payment instruments, excluding stock (or unit) options, that vested during the reporting period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The estimated dividend rate (a percentage of the share price) to be paid (expected dividends) to holders of the underlying shares over the option's term. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Expected term of share-based compensation awards, in 'PnYnMnDTnHnMnS' format, for example, 'P1Y5M13D' represents the reported fact of one year, five months, and thirteen days. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The estimated measure of the percentage by which a share price is expected to fluctuate during a period. Volatility also may be defined as a probability-weighted measure of the dispersion of returns about the mean. The volatility of a share price is the standard deviation of the continuously compounded rates of return on the share over a specified period. That is the same as the standard deviation of the differences in the natural logarithms of the stock prices plus dividends, if any, over the period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
For each plan, identification of the award pricing model or other valuation method used in calculating the weighted average fair values disclosed. The model is also used to calculate the compensation expense that is shown within the balance sheet, income statement, and cash flow. Examples of valuation techniques are lattice models (binomial model), closed-form models (Black-Scholes-Merton formula), and a Monte Carlo simulation technique. Fair value is the amount at which an asset or liability could be bought or incurred or sold or settled in a current transaction between willing parties, that is, other than in a forced or liquidation sale. May include disclosures about the assumptions underlying application of the method selected. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The risk-free interest rate assumption that is used in valuing an option on its own shares. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The maximum number of shares (or other type of equity) originally approved (usually by shareholders and board of directors), net of any subsequent amendments and adjustments, for awards under the equity-based compensation plan. As stock or unit options and equity instruments other than options are awarded to participants, the shares or units remain authorized and become reserved for issuance under outstanding awards (not necessarily vested). Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Gross number of share options (or share units) granted during the period. No definition available.
|
X | ||||||||||
- Definition
The weighted average grant-date fair value of options granted during the reporting period as calculated by applying the disclosed option pricing methodology. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The number of shares reserved for issuance under stock option agreements awarded under the plan that validly exist and are outstanding as of the balance sheet date, including vested options. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Weighted average price at which grantees can acquire the shares reserved for issuance under the stock option plan. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Price of a single share of a number of saleable stocks of a company. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Description of the reverse stock split arrangement. Also provide the retroactive effect given by the reverse split that occurs after the balance sheet date but before the release of financial statements. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Number of shares issued as consideration for cash. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Number of new stock issued during the period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Number of shares of stock issued during the period that is attributable to transactions involving issuance of stock not separately disclosed. No definition available.
|
X | ||||||||||
- Definition
Number of share options (or share units) exercised during the current period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Value of stock issued as consideration for cash. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Equity impact of the value of new stock issued during the period. Includes shares issued in an initial public offering or a secondary public offering. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Value of shares of stock issued during the period that is attributable to transactions involving issuance of stock not separately disclosed. No definition available.
|
X | ||||||||||
- Definition
Value of stock issued as a result of the exercise of stock options. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
STOCKHOLDERS' EQUITY (Details Narrative 1) (USD $)
|
3 Months Ended | 6 Months Ended | 12 Months Ended | 0 Months Ended | 0 Months Ended | 1 Months Ended | 0 Months Ended | 1 Months Ended | 0 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
Dec. 31, 2012
|
Dec. 31, 2011
|
Dec. 31, 2010
|
Jan. 31, 2013
Plato and Associates Note
|
Jun. 30, 2013
Plato and Associates Note
|
Mar. 21, 2013
Promissory Notes - June 2012 Notes Issuance
|
Jun. 19, 2012
Promissory Notes - June 2012 Notes Issuance
|
Feb. 24, 2012
Promissory Notes - February 2012 Notes Issuance
|
Mar. 31, 2012
Company Warrants
|
Jun. 30, 2013
Company Warrants
Sancilio & Company
|
May 10, 2013
Company Warrants
Sancilio & Company
|
May 31, 2013
Company Warrants
Sancilio & Company
|
Jun. 30, 2013
Company Warrants
Lower Range
|
Jun. 30, 2013
Company Warrants
Upper Range
|
Jun. 19, 2012
Warrants Tranche 1
Promissory Notes - June 2012 Notes Issuance
|
Feb. 24, 2012
Warrants Tranche 1
Promissory Notes - February 2012 Notes Issuance
|
Jun. 19, 2012
Warrants Tranche 2
Promissory Notes - June 2012 Notes Issuance
|
Feb. 24, 2012
Warrants Tranche 2
Promissory Notes - February 2012 Notes Issuance
|
Jun. 30, 2013
Company Warrants
|
Dec. 31, 2012
Company Warrants
|
Dec. 31, 2011
Company Warrants
|
|
Warrants: | |||||||||||||||||||||||||
Warrants outstanding | 12,193,499 | 3,057,627 | 14,293,499 | 12,193,499 | |||||||||||||||||||||
Warrant Exercise Price | 0.24 | 3.20 | 1.79 | ||||||||||||||||||||||
Warrants Issued in conjunction with debt | 1,250,000 | 7,000,000 | 9,000,000 | 6,000,000 | 1,000,000 | ||||||||||||||||||||
Exercise Price per share of warrants issued | 3.20 | 0.38 | 2.00 | 0.38 | 3.00 | 0.38 | |||||||||||||||||||
Warrants Fair Value | $ 1,711,956 | $ 9,424,982 | $ 462,196 | $ 405,066 | $ 10,505,247 | $ 6,124,873 | $ 27,618,722 | $ 474,267 | |||||||||||||||||
Expected term | 6 years | 5 years | 5 years | 5 years | 5 years | 5 years | |||||||||||||||||||
Volatility rate | 44.29% | 44.64% | 44.50% | 44.81% | 45.84% | 45.89% | |||||||||||||||||||
Risk-free rate | 0.88% | 0.75% | 0.89% | 1.04% | 1.41% | 1.12% | |||||||||||||||||||
Dividend yield | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | |||||||||||||||||||
Deferred Financing Costs | 1,051,988 | ||||||||||||||||||||||||
Financing costs | 395,981 | 659,968 | 1,649,890 | ||||||||||||||||||||||
Amortization of debt discount | 1,604,240 | 28,719 | 0 | 885,709 | 859,647 | ||||||||||||||||||||
Warrants Issued - Note Modification | 5,685,300 | ||||||||||||||||||||||||
Warrants Issued - new Funding | 3,314,700 | ||||||||||||||||||||||||
Warrants forfeited | 833,000 | (51,142) | |||||||||||||||||||||||
Warrants granted | 31,000 | 850,000 | 2,100,000 | 17,332,500 | 3,057,627 | ||||||||||||||||||||
Warrants vested in period | 283,333 | 283,333 | |||||||||||||||||||||||
Consulting expense recognized for warrants issued for services | 29,736 | 405,066 | |||||||||||||||||||||||
Warrants recorded to prepaid expense - short term | 154,068 | ||||||||||||||||||||||||
Warrants recorded to prepaid expense - long term | 1,980,519 | 1,980,519 | 953,655 | 80,515 | 0 | 308,128 | |||||||||||||||||||
Unvested warrants | 283,334 | ||||||||||||||||||||||||
Unamortized costs warrants | $ 3,995,000 | $ 93,000 | $ 349,000 |
X | ||||||||||
- Definition
The number of warrants to purchase shares of common stock that have not vested as of the balance sheet date. No definition available.
|
X | ||||||||||
- Definition
The number of warrants to purchase company's common stock issued in conjunction with the sale of a note on February 24, 2012 that were issued in consideration of the modification of the prior notes. No definition available.
|
X | ||||||||||
- Details
|
X | ||||||||||
- Definition
Exercise price of modification warrants issued. No definition available.
|
X | ||||||||||
- Definition
The fair value of outstanding warrants as of the balance sheet date. No definition available.
|
X | ||||||||||
- Definition
Warrants to purchase company's common stock issued in conjunction with the sale of notes. No definition available.
|
X | ||||||||||
- Definition
The number of warrants to purchase company's common stock issued in conjunction with the sale of notes on February 24, 2012 and June 19, 2012 that were issued in consideration of the new funding. No definition available.
|
X | ||||||||||
- Definition
Amount of noncash expense included in interest expense to amortize debt discount and premium associated with the related debt instruments. Excludes amortization of financing costs. Alternate captions include noncash interest expense. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The exercise price of each class of warrants or rights outstanding. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Aggregate amount of each class of warrants or rights outstanding. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Amount of debt issuance costs (for example, but not limited to, legal, accounting, broker, and regulatory fees). No definition available.
|
X | ||||||||||
- Definition
The carrying amount of deferred costs. No definition available.
|
X | ||||||||||
- Definition
Aggregate unrecognized cost of share-based awards, other than options, made to employees under an equity-based compensation plan, that have yet to vest. No definition available.
|
X | ||||||||||
- Definition
Expected dividends to be paid to holders of the underlying shares or financial instruments (expressed as a percentage of the share or instrument's price). Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Period the instrument, asset or liability is expected to be outstanding, in 'PnYnMnDTnHnMnS' format, for example, 'P1Y5M13D' represents the reported fact of one year, five months, and thirteen days. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Measure of dispersion, in percentage terms (for instance, the standard deviation or variance), for a given stock price. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Risk-free interest rate assumption used in valuing an instrument. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Sum of the amounts paid in advance for capitalized costs that will be expensed with the passage of time or the occurrence of a triggering event, and will be charged against earnings within one year or the normal operating cycle, if longer. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Sum of the carrying amounts as of the balance sheet date of amounts paid in advance for expenses which will be charged against earnings in periods after one year or beyond the operating cycle, if longer. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
A fee charged for services from professionals such as doctors, lawyers and accountants. The term is often expanded to include other professions, for example, pharmacists charging to maintain a medicinal profile of a client or customer. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Number of shares under non-option equity instrument agreements that were cancelled as a result of occurrence of a terminating event. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Net number of non-option equity instruments granted to participants. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Other increase (decrease) in number of shares reserved for issuance under non-option equity instrument agreements that is not separately disclosed. No definition available.
|
STOCKHOLDERS' EQUITY (Details Narrative 2) (USD $)
|
6 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | 6 Months Ended | 6 Months Ended | 0 Months Ended | 0 Months Ended | |||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
Dec. 31, 2012
|
Dec. 31, 2011
|
Jul. 29, 2011
|
Dec. 31, 2010
|
May 02, 2013
Chairman of the Board
|
May 02, 2013
Committee Chairs
|
May 02, 2013
Dr. Bernick, Director
|
Dec. 31, 2011
Dr. Bernick, Director
|
Feb. 27, 2012
Dr. Bernick, Director
|
May 10, 2013
Vesting annually over a 4 year period on anniversary of issuance
|
Mar. 29, 2013
Vesting annually over a 4 year period on anniversary of issuance
|
May 06, 2013
Vesting monthly over an 12 month period
|
Mar. 29, 2013
Vesting monthly over an 12 month period
|
Mar. 29, 2013
Vesting monthly over an 13 month period
|
Mar. 29, 2013
Vesting monthly over an 7 month period
|
Jun. 21, 2013
Stock Options
|
May 10, 2013
Stock Options
|
May 06, 2013
Stock Options
|
Mar. 29, 2013
Stock Options
|
Jun. 29, 2012
Stock Options
|
Jun. 30, 2013
Stock Options
|
Dec. 31, 2012
Stock Options
|
Jun. 30, 2013
Stock Options
Robert Finizio, Chief Executive Officer
|
Apr. 16, 2012
Stock Options
Dr. Bernick, Director
|
Jun. 21, 2013
Stock Options
Vesting annually over a 3 year period on anniversary of issuance
|
Jun. 21, 2013
Stock Options
Vesting monthly over an 18 month period
|
Jun. 21, 2013
Stock Options
Vesting monthly over a 3 year period
|
Jun. 29, 2012
Stock Options
Vesting annually over a 4 year period on anniversary of issuance
|
Jun. 29, 2012
Stock Options
Vesting monthly over an 12 month period
|
Mar. 29, 2013
Stock Options
Lower Range
|
Mar. 29, 2013
Stock Options
Upper Range
|
Jun. 29, 2012
Stock Options
Vesting annually over a 2 year period on anniversary of issuance
|
Jun. 29, 2012
Stock Options
Vesting monthly fromDecember 31 2012
|
Apr. 16, 2012
Stock Options
Committee Chairs
|
Apr. 16, 2012
Stock Options
Dr. Bernick, Director
|
Jun. 30, 2013
2009 Long Term Incentive Compensation Plan
|
Dec. 31, 2012
2009 Long Term Incentive Compensation Plan
|
Jun. 30, 2013
2012 Stock Incentive Plan
|
Dec. 31, 2012
2012 Stock Incentive Plan
|
|
Stock Options: | ||||||||||||||||||||||||||||||||||||||||
Shares authorized under incentive plan | 25,000,000 | 25,000,000 | 25,000,000 | 10,000,000 | 10,000,000 | |||||||||||||||||||||||||||||||||||
Shares issued under incentive plans | 14,655,793 | 13,733,488 | 12,934,725 | 11,508,488 | 1,625,000 | 2,225,000 | ||||||||||||||||||||||||||||||||||
Shares issued for exercise of options, shares | 61,372 | (1,931,788) | (92,057) | 61,372 | ||||||||||||||||||||||||||||||||||||
Shares issued for exercise of options, value | $ 6,251 | $ 191,000 | $ 17,250 | |||||||||||||||||||||||||||||||||||||
Options Granted | 300,000 | 632,500 | 100,000 | 96,068 | 180,109 | 250,000 | 1,583,677 | 150,000 | 75,000 | 350,000 | ||||||||||||||||||||||||||||||
Weighted Average Exercise Price of options | $ 2.98 | $ 2.71 | $ 2.96 | $ 2.80 | $ 1.08 | $ 1.16 | $ 2.55 | $ 1.70 | $ 2.70 | $ 2.55 | $ 2.55 | |||||||||||||||||||||||||||||
Term of options granted | 10 years | 10 years | 10 years | 10 years | 10 years | 10 years | 9 years 10 months 24 days | 10 years | 10 years | 10 years | ||||||||||||||||||||||||||||||
Options vested in period | 50,000 | 500 | 96,068 | 12,500 | 92,109 | 43,750 | 50,000 | 31,250 | 50,000 | 232,500 | 100,000 | 300,000 | 7,500 | 2,500 | 115,000 | 75,000 | ||||||||||||||||||||||||
Stock Options Authorized to the Board of Directors and Key Executives | 575,000 | 225,000 | 75,000 | 50,000 | ||||||||||||||||||||||||||||||||||||
Options forfeited | (600,000) | 600,000 | ||||||||||||||||||||||||||||||||||||||
Unrecognized estimated stock compensation expense | $ 3,695,420 | $ 4,391,000 | $ 244,000 | $ 206,000 | ||||||||||||||||||||||||||||||||||||
Period for recognition of remaining unrecognized compensation expense | 1 year 5 months 26 days | 1 year 9 months 18 days | 3 years 4 months |
X | ||||||||||
- Definition
The number of stock option awards authorized for compensation to directors and key executives. No definition available.
|
X | ||||||||||
- Definition
Weighted average remaining contractual term for option awards granted in the period, in 'PnYnMnDTnHnMnS' format, for example, 'P1Y5M13D' represents the reported fact of one year, five months, and thirteen days. No definition available.
|
X | ||||||||||
- Details
|
X | ||||||||||
- Definition
As of the balance sheet date, the aggregate unrecognized cost of equity-based awards made to employees under equity-based compensation awards that have yet to vest. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Weighted average period over which unrecognized compensation is expected to be recognized for equity-based compensation plans, in 'PnYnMnDTnHnMnS' format, for example, 'P1Y5M13D' represents the reported fact of one year, five months, and thirteen days. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The number of equity-based payment instruments, excluding stock (or unit) options, that vested during the reporting period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The maximum number of shares (or other type of equity) originally approved (usually by shareholders and board of directors), net of any subsequent amendments and adjustments, for awards under the equity-based compensation plan. As stock or unit options and equity instruments other than options are awarded to participants, the shares or units remain authorized and become reserved for issuance under outstanding awards (not necessarily vested). Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The number of shares under options that were cancelled during the reporting period as a result of occurrence of a terminating event specified in contractual agreements pertaining to the stock option plan. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Gross number of share options (or share units) granted during the period. No definition available.
|
X | ||||||||||
- Definition
The number of shares reserved for issuance under stock option agreements awarded under the plan that validly exist and are outstanding as of the balance sheet date, including vested options. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Weighted average price at which grantees can acquire the shares reserved for issuance under the stock option plan. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Number of share options (or share units) exercised during the current period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Value of stock issued as a result of the exercise of stock options. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
STOCKHOLDERS' EQUITY (Details) (Company Warrants, USD $)
|
6 Months Ended | 12 Months Ended | |
---|---|---|---|
Jun. 30, 2013
|
Dec. 31, 2012
|
Dec. 31, 2011
|
|
Warrants Granted, number | 2,100,000 | 17,332,500 | 3,057,627 |
Awards Granted, exercise price | $ 2.72 | $ 1.26 | $ 0.39 |
Awards Granted, term | 5 years | 7 years 10 months 24 days | |
Warrants Fair Value | $ 27,618,722 | $ 474,267 | |
Lower Range
|
|||
Awards Granted, term | 5 years | ||
Upper Range
|
|||
Awards Granted, term | 10 years | ||
Debt Modification
|
|||
Warrants Granted, number | 5,685,300 | ||
Awards Granted, exercise price | $ 0.38 | ||
Awards Granted, term | 5 years | ||
Warrants Fair Value | 10,505,247 | ||
Issued with Debt
|
|||
Warrants Granted, number | 10,314,700 | ||
Awards Granted, term | 5 years | ||
Warrants Fair Value | 15,549,855 | ||
Issued with Debt | Lower Range
|
|||
Awards Granted, exercise price | $ 0.38 | ||
Issued with Debt | Upper Range
|
|||
Awards Granted, exercise price | $ 3.00 | ||
Services
|
|||
Warrants Granted, number | 1,332,500 | 784,711 | |
Awards Granted, term | 5 years | ||
Warrants Fair Value | 1,563,620 | 159,363 | |
Services | Lower Range
|
|||
Awards Granted, exercise price | $ 2.40 | $ 0.38 | |
Awards Granted, term | 5 years | ||
Services | Upper Range
|
|||
Awards Granted, exercise price | $ 2.80 | $ 1.50 | |
Awards Granted, term | 10 years | ||
Loan Guarantee
|
|||
Warrants Granted, number | 613,713 | ||
Awards Granted, exercise price | $ 0.24 | ||
Awards Granted, term | 10 years | ||
Warrants Fair Value | 93,969 | ||
Loan Consideration
|
|||
Warrants Granted, number | 613,718 | ||
Awards Granted, exercise price | $ 0.41 | ||
Awards Granted, term | 5 years | ||
Warrants Fair Value | 30,993 | ||
Product Consulting
|
|||
Warrants Granted, number | 1,045,485 | ||
Warrants Fair Value | $ 189,942 | ||
Product Consulting | Lower Range
|
|||
Awards Granted, exercise price | $ 0.38 | ||
Awards Granted, term | 5 years | ||
Product Consulting | Upper Range
|
|||
Awards Granted, exercise price | $ 0.41 | ||
Awards Granted, term | 10 years |
X | ||||||||||
- Definition
The fair value of outstanding warrants as of the balance sheet date. No definition available.
|
X | ||||||||||
- Definition
Expected term of share-based compensation awards, in 'PnYnMnDTnHnMnS' format, for example, 'P1Y5M13D' represents the reported fact of one year, five months, and thirteen days. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Net number of non-option equity instruments granted to participants. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Weighted average price at which grantees can acquire the shares reserved for issuance on stock options awarded. No definition available.
|
STOCKHOLDERS' EQUITY (Details 1) (Company Warrants, USD $)
|
12 Months Ended | |
---|---|---|
Dec. 31, 2012
|
Dec. 31, 2011
|
|
Valuation Method | Black-Scholes | Black-Scholes |
Weighted average fair value | $ 2.05 | $ 0.36 |
Expected term | 5 years | 7 years 10 months 24 days |
Expected dividend yield | 0.00% | |
Lower Range
|
||
Risk-free interest rate | 0.72% | 0.91% |
Expected Volatility | 44.64% | 39.13% |
Expected term | 5 years | |
Expected dividend yield | 0.00% | |
Upper Range
|
||
Risk-free interest rate | 1.04% | 3.48% |
Expected Volatility | 44.81% | 51.83% |
Expected term | 10 years |
X | ||||||||||
- Definition
The weighted average fair value of options and other awards as calculated by applying the disclosed option pricing methodology. No definition available.
|
X | ||||||||||
- Definition
The estimated dividend rate (a percentage of the share price) to be paid (expected dividends) to holders of the underlying shares over the option's term. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Expected term of share-based compensation awards, in 'PnYnMnDTnHnMnS' format, for example, 'P1Y5M13D' represents the reported fact of one year, five months, and thirteen days. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The estimated measure of the percentage by which a share price is expected to fluctuate during a period. Volatility also may be defined as a probability-weighted measure of the dispersion of returns about the mean. The volatility of a share price is the standard deviation of the continuously compounded rates of return on the share over a specified period. That is the same as the standard deviation of the differences in the natural logarithms of the stock prices plus dividends, if any, over the period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
For each plan, identification of the award pricing model or other valuation method used in calculating the weighted average fair values disclosed. The model is also used to calculate the compensation expense that is shown within the balance sheet, income statement, and cash flow. Examples of valuation techniques are lattice models (binomial model), closed-form models (Black-Scholes-Merton formula), and a Monte Carlo simulation technique. Fair value is the amount at which an asset or liability could be bought or incurred or sold or settled in a current transaction between willing parties, that is, other than in a forced or liquidation sale. May include disclosures about the assumptions underlying application of the method selected. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The risk-free interest rate assumption that is used in valuing an option on its own shares. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
STOCKHOLDERS' EQUITY (Details 2) (USD $)
|
6 Months Ended | 12 Months Ended | |
---|---|---|---|
Jun. 30, 2013
|
Dec. 31, 2012
|
Dec. 31, 2011
|
|
Weighted Average Remaining Contractual Life | |||
Granted | 10 years | ||
Company Warrants
|
|||
Number Warrants | |||
Balance Beginning | 12,193,499 | 3,057,627 | |
Warrants Granted | 2,100,000 | 17,332,500 | 3,057,627 |
Exercised | (8,145,486) | ||
Expired | |||
Cancelled | (51,142) | ||
Balance ending | 14,293,499 | 12,193,499 | 3,057,627 |
Vested and exercisable | 12,149,559 | 11,784,408 | 2,254,758 |
Weighted Average Exercise Price | |||
Balance Beginning | $ 1.63 | $ 0.36 | |
Warrants Granted | $ 2.72 | $ 1.26 | $ 0.39 |
Exercised | $ 0.38 | ||
Cancelled | $ 0.24 | ||
Exercise Price | $ 1.79 | $ 1.63 | $ 0.36 |
Vested and exercisable | $ 1.67 | $ 1.69 | $ 0.37 |
Weighted Average Remaining Contractual Life | |||
Weighted average contractual life | 4 years 9 months 18 days | 8 years 8 months 15 days | |
Granted | 7 years 8 months 12 days | 5 years | 8 years 8 months 15 days |
Weighted average contractual life | 4 years 9 months 18 days | 4 years 9 months 18 days | 8 years 8 months 15 days |
Vested and exercisable | 4 years 8 months 12 days | 4 years 8 months 12 days | 5 years 7 months 15 days |
Aggregate Intrinsic Value | |||
Warrants outstanding, beginning | $ 17,971,994 | $ 3,483,691 | |
Warrants granted | 867,000 | 31,891,150 | 3,483,691 |
Warrants outstanding, ending | 17,985,449 | 17,971,994 | 3,483,691 |
Vested and Exercisable | $ 16,540,175 | $ 16,859,266 | $ 2,361,339 |
X | ||||||||||
- Details
|
X | ||||||||||
- Details
|
X | ||||||||||
- Definition
Weighted average remaining contractual term for equity-based awards excluding options, in 'PnYnMnDTnHnMnS' format, for example, 'P1Y5M13D' represents the reported fact of one year, five months, and thirteen days. No definition available.
|
X | ||||||||||
- Definition
Amount of difference between fair value of the underlying shares reserved for issuance and exercise price of warrants vested and exercisable. No definition available.
|
X | ||||||||||
- Definition
Amount of difference between fair value of the underlying shares reserved for issuance and exercise price of warrants granted during the period. No definition available.
|
X | ||||||||||
- Definition
Amount of difference between fair value of the underlying shares reserved for issuance and exercise price of warrants outstanding. No definition available.
|
X | ||||||||||
- Definition
Weighted average remaining contractual term for option awards granted in the period, in 'PnYnMnDTnHnMnS' format, for example, 'P1Y5M13D' represents the reported fact of one year, five months, and thirteen days. No definition available.
|
X | ||||||||||
- Definition
The weighted average exercise price of warrants vested and exercisable. No definition available.
|
X | ||||||||||
- Details
|
X | ||||||||||
- Details
|
X | ||||||||||
- Definition
Number of non-option equity instruments exercised by participants. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Number of shares under non-option equity instrument agreements for which rights to exercise lapsed. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Number of shares under non-option equity instrument agreements that were cancelled as a result of occurrence of a terminating event. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Net number of non-option equity instruments granted to participants. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Number of shares reserved for issuance under non-option equity instrument agreements awarded that validly exist and are outstanding, including vested instruments. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The number of shares into which fully or partially vested stock options outstanding as of the balance sheet date can be currently converted under the option plan. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Weighted average remaining contractual term for vested portions of options outstanding and currently exercisable or convertible, in 'PnYnMnDTnHnMnS' format, for example, 'P1Y5M13D' represents the reported fact of one year, five months, and thirteen days. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Weighted average price at which grantees can acquire the shares reserved for issuance under the stock option plan. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Weighted average price at which option holders acquired shares when converting their stock options into shares. No definition available.
|
X | ||||||||||
- Definition
Weighted average price at which grantees could have acquired the underlying shares with respect to stock options that were terminated. No definition available.
|
X | ||||||||||
- Definition
Weighted average price at which grantees can acquire the shares reserved for issuance on stock options awarded. No definition available.
|
X | ||||||||||
- Definition
The weighted average price as of the balance sheet date at which grantees could acquire the underlying shares with respect to all outstanding stock options which are in the customized range of exercise prices. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
STOCKHOLDERS' EQUITY (Details 3) (USD $)
|
3 Months Ended | 6 Months Ended | 12 Months Ended | 0 Months Ended | 6 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 24, 2012
|
Jun. 30, 2013
|
Dec. 31, 2012
|
Jun. 21, 2013
Stock Options
|
May 10, 2013
Stock Options
|
May 06, 2013
Stock Options
|
Mar. 29, 2013
Stock Options
|
Jun. 29, 2012
Stock Options
|
Jun. 30, 2013
Stock Options
|
Dec. 31, 2011
Company Options
|
Dec. 31, 2012
Company Options
|
Dec. 31, 2011
Company Options
|
|||||
Balance Beginning | 13,733,488 | 10,590,161 | ||||||||||||||
Awards Granted | 632,500 | 100,000 | 96,068 | 180,109 | 250,000 | 1,583,677 | 562,422 | 5,121,250 | [1] | 10,682,218 | [1] | |||||
Options Exercised | (61,372) | 1,931,788 | (61,372) | (1,931,788) | (92,057) | |||||||||||
Expired | 5,000 | |||||||||||||||
Cancelled | (600,000) | (46,135) | ||||||||||||||
Balance ending | 14,655,793 | 10,590,161 | 13,733,488 | 10,590,161 | ||||||||||||
Vested and exercisable | 9,623,443 | 6,581,049 | 8,370,408 | 6,581,049 | ||||||||||||
Exercise Price | $ 1.16 | $ 0.16 | ||||||||||||||
Granted | $ 2.79 | $ 2.80 | $ 0.16 | |||||||||||||
Exercised | $ 0.13 | $ 0.19 | ||||||||||||||
Cancelled | ||||||||||||||||
Exercise Price | $ 2.98 | $ 2.71 | $ 2.96 | $ 2.80 | $ 1.08 | $ 0.16 | $ 1.16 | $ 0.16 | ||||||||
Vested and exercisable | $ 0.60 | $ 0.13 | $ 0.38 | $ 0.13 | ||||||||||||
Weighted Average Remaining Contractual Life | ||||||||||||||||
Balance Beginning | 7 years 8 months 12 days | 7 years 7 months 6 days | ||||||||||||||
Granted | 10 years | 10 years | 10 years | 10 years | 10 years | 10 years | 9 years 10 months 24 days | 9 years 8 months 12 days | 7 years 7 months 6 days | |||||||
Balance ending | 7 years 9 months 18 days | 7 years 7 months 6 days | 7 years 8 months 12 days | 7 years 7 months 6 days | ||||||||||||
Vested and exercisable | 6 years 6 months | 6 years 8 months 12 days | 7 years 6 months | |||||||||||||
Balance Beginning | $ 26,804,117 | $ 14,067,649 | ||||||||||||||
Granted | $ 365,845 | $ 1,737,530 | $ 14,188,484 | |||||||||||||
Balance ending | 26,038,328 | 14,067,649 | 26,804,117 | 14,067,649 | ||||||||||||
Vested and exercisable | $ 23,208,051 | $ 9,038,719 | $ 22,811,422 | $ 9,038,719 | ||||||||||||
|
X | ||||||||||
- Definition
Weighted average remaining contractual term for option awards granted in the period, in 'PnYnMnDTnHnMnS' format, for example, 'P1Y5M13D' represents the reported fact of one year, five months, and thirteen days. No definition available.
|
X | ||||||||||
- Definition
Weighted average remaining contractual term for option awards outstanding, in 'PnYnMnDTnHnMnS' format, for example, 'P1Y5M13D' represents the reported fact of one year, five months, and thirteen days. No definition available.
|
X | ||||||||||
- Details
|
X | ||||||||||
- Definition
Amount of difference between fair value of the underlying shares reserved for issuance and exercise price of vested portions of options outstanding and currently exercisable. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The number of shares into which fully or partially vested stock options outstanding as of the balance sheet date can be currently converted under the option plan. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Weighted average remaining contractual term for vested portions of options outstanding and currently exercisable or convertible, in 'PnYnMnDTnHnMnS' format, for example, 'P1Y5M13D' represents the reported fact of one year, five months, and thirteen days. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Number of options or other stock instruments for which the right to exercise has lapsed under the terms of the plan agreements. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Weighted average price of options that were either forfeited or expired. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The number of shares under options that were cancelled during the reporting period as a result of occurrence of a terminating event specified in contractual agreements pertaining to the stock option plan. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The grant-date intrinsic value of options granted during the reporting period as calculated by applying the disclosed option pricing methodology. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Gross number of share options (or share units) granted during the period. No definition available.
|
X | ||||||||||
- Definition
Amount of difference between fair value of the underlying shares reserved for issuance and exercise price of options outstanding. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The number of shares reserved for issuance under stock option agreements awarded under the plan that validly exist and are outstanding as of the balance sheet date, including vested options. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Weighted average price at which grantees can acquire the shares reserved for issuance under the stock option plan. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
As of the balance sheet date, the weighted-average exercise price for outstanding stock options that are fully vested or expected to vest. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Weighted average price at which option holders acquired shares when converting their stock options into shares. No definition available.
|
X | ||||||||||
- Definition
Weighted average price at which grantees can acquire the shares reserved for issuance on stock options awarded. No definition available.
|
X | ||||||||||
- Definition
Number of share options (or share units) exercised during the current period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
STOCKHOLDERS' EQUITY (Details 4)
|
6 Months Ended | 12 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
Stock Options
|
Jun. 30, 2013
Stock Options
Lower Range
|
Jun. 30, 2013
Stock Options
Upper Range
|
Dec. 31, 2012
Company Options
|
Dec. 31, 2011
Company Options
|
Dec. 31, 2012
Company Options
Lower Range
|
Dec. 31, 2011
Company Options
Lower Range
|
Dec. 31, 2012
Company Options
Upper Range
|
Dec. 31, 2011
Company Options
Upper Range
|
|
Risk-free interest rate | 0.65% | 1.42% | 0.61% | 0.91% | 2.23% | 2.54% | |||
Expected Volatility | 33.35% | 45.76% | 40.77% | 37.92% | 46.01% | 40.48% | |||
Expected term | 5 years | 6 years 3 months | 5 years | 5 years 6 months | 6 years 3 months | 6 years 3 months | |||
Expected dividend yield | 0.00% | 0.00% | 0.00% |
X | ||||||||||
- Definition
The estimated dividend rate (a percentage of the share price) to be paid (expected dividends) to holders of the underlying shares over the option's term. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Expected term of share-based compensation awards, in 'PnYnMnDTnHnMnS' format, for example, 'P1Y5M13D' represents the reported fact of one year, five months, and thirteen days. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The estimated measure of the percentage by which a share price is expected to fluctuate during a period. Volatility also may be defined as a probability-weighted measure of the dispersion of returns about the mean. The volatility of a share price is the standard deviation of the continuously compounded rates of return on the share over a specified period. That is the same as the standard deviation of the differences in the natural logarithms of the stock prices plus dividends, if any, over the period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The risk-free interest rate assumption that is used in valuing an option on its own shares. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
INCOME TAXES (Details Narrative) (USD $)
|
Dec. 31, 2012
|
Dec. 31, 2011
|
---|---|---|
Income Taxes Details Narrative | ||
Federal net operating loss carryforwards | $ 14,900,000 | $ 2,100,000 |
State Net Operating Loss Carryforwards | $ 12,800,000 | $ 25,000 |
X | ||||||||||
- Details
|
X | ||||||||||
- Definition
Amount before allocation of valuation allowances of deferred tax asset attributable to deductible operating loss carryforwards. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Amount before allocation of valuation allowances of deferred tax asset attributable to deductible state and local operating loss carryforwards. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
INCOME TAXES (Details) (USD $)
|
Dec. 31, 2012
|
Dec. 31, 2011
|
---|---|---|
Deferred Income Tax Assets: | ||
Net operating losses | $ 5,920,861 | $ 748,404 |
Valuation allowance | (5,920,861) | (748,404) |
Deferred Income Tax Assets, net |
X | ||||||||||
- Details
|
X | ||||||||||
- Definition
Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Amount before allocation of valuation allowances of deferred tax asset attributable to other deductible loss carryforwards not separately disclosed. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Amount of deferred tax assets for which it is more likely than not that a tax benefit will not be realized. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
INCOME TAXES (Details 1) (USD $)
|
3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
Dec. 31, 2012
|
Dec. 31, 2011
|
Dec. 31, 2010
|
|
Income Taxes Details 1 | |||||||
Federal statutory tax rate | 35.00% | 35.00% | |||||
State tax rate, net of federal tax benefit | 5.50% | 0.00% | |||||
Adjustment in valuation allowances | (18.20%) | (5.80%) | |||||
Permanent and other differences | (22.30%) | (29.20%) | |||||
Provision (Benefit) for Income Taxes | 0.00% | 0.00% | |||||
Expected income tax benefit at statutory rate | $ (4,519,678) | ||||||
Non-deductible expenses: | |||||||
Debt settlement | 2,586,500 | ||||||
VitaMed pre-merger loss | 1,164,629 | ||||||
Other non-deductible expenses | 22,912 | ||||||
Change in valuation account | 745,637 | ||||||
Income tax expense (benefit) |
X | ||||||||||
- Details
|
X | ||||||||||
- Definition
The portion of the difference between total income tax expense or benefit as reported in the Income Statement for the period and the expected income tax expense or benefit computed by applying the domestic federal statutory income tax rates to pretax income from continuing operations attributable to nondeductible debt settlemement under enacted tax laws. No definition available.
|
X | ||||||||||
- Definition
The portion of the difference between total income tax expense or benefit as reported in the Income Statement for the period and the expected income tax expense or benefit computed by applying the domestic federal statutory income tax rates to pretax income from continuing operations attributable to nondeductible premerger loss under enacted tax laws. No definition available.
|
X | ||||||||||
- Details
|
X | ||||||||||
- Definition
A ratio calculated by dividing the reported amount of income tax expense attributable to continuing operations for the period by GAAP-basis pretax income from continuing operations. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The domestic federal statutory tax rate applicable under enacted tax laws to the Company's pretax income from continuing operations for the period. The "statutory" tax rate is the regular tax rate if there are alternative tax systems. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The portion of the difference between the effective income tax rate and domestic federal statutory income tax rate attributable to changes in the valuation allowance for deferred tax assets. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The portion of the difference between the effective income tax rate and domestic federal statutory income tax rate attributable to all other items not otherwise listed in the existing taxonomy. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The portion of the difference between the effective income tax rate and domestic federal statutory income tax rate that can be explained by the state and local income tax expense or benefit, net of the federal tax benefit (expense) thereon, recorded during the period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The sum of the current income tax expense or benefit and the deferred income tax expense or benefit pertaining to continuing operations. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The portion of the difference between total income tax expense or benefit as reported in the Income Statement and the expected income tax expense or benefit computed by applying the domestic federal statutory income tax rates to pretax income from continuing operations attributable to changes in the valuation allowance for deferred tax assets in the period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The amount of income tax expense or benefit for the period computed by applying the domestic federal statutory tax rates to pretax income from continuing operations. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The portion of the difference between total income tax expense or benefit as reported in the Income Statement for the period and the expected income tax expense or benefit computed by applying the domestic federal statutory income tax rates to pretax income from continuing operations attributable to nondeductible expenses under enacted tax laws, or differences in the methodologies used to determine expense amounts for financial statements prepared in accordance with generally accepted accounting principles, not otherwise listed in the existing taxonomy. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
RELATED PARTIES (Details Narrative) (USD $)
|
0 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | 6 Months Ended | 12 Months Ended | 0 Months Ended | 1 Months Ended | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 02, 2011
|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
Dec. 31, 2012
|
Dec. 31, 2011
|
Dec. 31, 2010
|
Jun. 30, 2013
Dr. Bernick, Director
|
Jun. 30, 2012
Dr. Bernick, Director
|
Jun. 30, 2013
Pernix Therapeutics
|
Jun. 30, 2012
Pernix Therapeutics
|
Dec. 31, 2012
Pernix Therapeutics
|
Dec. 31, 2011
Pernix Therapeutics
|
Dec. 31, 2012
Dr. Bernick, Director
|
Dec. 31, 2011
Dr. Bernick, Director
|
Dec. 31, 2010
Dr. Bernick, Director
|
Dec. 31, 2012
Board of Directors Chairman
|
Nov. 13, 2012
First United Bank Line of Credit
|
Feb. 28, 2013
First United Bank Line of Credit
|
Mar. 31, 2011
First United Bank Line of Credit
|
Jun. 30, 2013
First United Bank Line of Credit
|
|
Proceeds from notes and loans payable | $ 6,900,000 | $ 8,700,000 | $ 2,684,160 | $ 100,000 | $ 300,000 | |||||||||||||||||
Collateral for line of credit | 100,000 | 100,000 | ||||||||||||||||||||
Debt Interest rate | 6.00% | 3.02% | ||||||||||||||||||||
First United line of credit, Personal Guarantees Warrants Issued | 613,713 | 613,713 | ||||||||||||||||||||
Warrants amended, warrants vested prior to the amendment | 358,000 | |||||||||||||||||||||
Warrants vested | 562,571 | |||||||||||||||||||||
Shares exchanged, on a pro rata basis with VitaMed | 70,000,000 | |||||||||||||||||||||
Revenues | 0 | 1,440 | 2,632 | 20,669 | 25,269 | |||||||||||||||||
Related Party Receivable | 0 | 1,272 | 0 | 79 | ||||||||||||||||||
Purchases | 463,606 | 372,370 | 843,952 | 708,494 | 1,348,113 | 947,112 | 556,390 | 0 | 96,250 | 404,000 | 19,000 | |||||||||||
Related Party Accounts Payable | 0 | 308,000 | 19,000 | |||||||||||||||||||
Legal Fee reimbursement due from related parties | $ 171,261 | $ 0 | ||||||||||||||||||||
Warrants Assigned | 100,000 |
X | ||||||||||
- Definition
Warrants to purchase shares of common stock issued in consideration of personal guarantees by officers of the company for the bank line of credit received from First United Bank in March 2011. No definition available.
|
X | ||||||||||
- Definition
The number of shares into which fully or partially vested non option equity instruments outstanding as of the balance sheet date can be currently converted. No definition available.
|
X | ||||||||||
- Definition
The number of shares exchanged with VitaMed as part of the merger agreement. This has been applied by calculation a conversion ratio of all outstanding Units, VitaMed Options and VitaMed Warrants divided by 70,000,000. No definition available.
|
X | ||||||||||
- Definition
The number of warrants vested for personal guarantors as of the date of the Line of Credit Amendment. No definition available.
|
X | ||||||||||
- Definition
Warrants assigned during the period to related parties. No definition available.
|
X | ||||||||||
- Definition
Amount for accounts payable to related parties. Used to reflect the current portion of the liabilities (due within one year or within the normal operating cycle if longer). Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
For an unclassified balance sheet, amount of receivables arising from transactions with related parties. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The amount of a specific compensating balance arrangement that is maintained under an agreement for a bank loan or future credit availability. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Total costs related to goods produced and sold during the reporting period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Interest rate stated in the contractual debt agreement. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
For an unclassified balance sheet, amounts due from related parties including affiliates, employees, joint ventures, officers and stockholders, immediate families thereof, and pension funds. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The cash inflow from a borrowing having initial term of repayment within one year or the normal operating cycle, if longer. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Aggregate revenue recognized during the period (derived from goods sold, services rendered, insurance premiums, or other activities that constitute an entity's earning process). For financial services companies, also includes investment and interest income, and sales and trading gains. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
BUSINESS CONCENTRATIONS (Details Narrative)
|
6 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Dec. 31, 2012
|
Dec. 31, 2011
|
Dec. 31, 2010
|
|
Supplier Concentration Risk
|
|||||
Concentration Risk | 98.00% | 87.00% | 76.00% | 95.00% | 93.00% |
Customer Revenue Concentration Risk
|
|||||
Concentration Risk | 62.00% | 36.00% | 28.00% | ||
Customer Deferred Revenue Concentration Risk
|
|||||
Concentration Risk | 98.00% |
X | ||||||||||
- Definition
For an entity that discloses a concentration risk in relation to quantitative amount, which serves as the "benchmark" (or denominator) in the equation, this concept represents the concentration percentage derived from the division. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
COMMITMENTS AND CONTINGENCIES (Details Narrative) (USD $)
|
3 Months Ended | 6 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | ||||
---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
Dec. 31, 2012
|
Dec. 31, 2011
|
Dec. 31, 2010
|
Dec. 31, 2011
Research and Development Arrangement
|
Dec. 31, 2012
Research and Development Arrangement
|
|
Non-cancelable operating lease term | 63 | 63 | 45 | ||||||
Monthly Base rent of leases | $ 28,442 | $ 5,443 | $ 5,443 | $ 5,443 | |||||
Share of monthly operating expenses | 3,500 | 3,500 | 3,500 | ||||||
Rental Expense | 56,918 | 60,168 | 122,752 | 106,315 | 116,175 | ||||
Future minimum lease payments | 1,791,900 | 1,791,900 | 29,667 | 168,326 | |||||
Compensation agreement for Robert Finzio | Compensation for services rendered by Robert G. Finizio as Chief Executive Officer calls for: (i) a time-based ten-year stock option (the"Time-Based Option") granted and issued on November 30, 2012 ("Date of Grant") to purchase 900,000 shares of our Common Stock with the exercise price equal to the closing price of our Common Stock on the Date of Grant with the underlying shares vesting annually over three years on the anniversary of the employment date, (ii) the right to receive a performance-based ten-year stock option (the"Performance-Based Option") in an amount to be determined, (iii) a base salary of not less than $355,100 per year and (iv) an annual short-term incentive compensation bonus of up to 35% of the base salary, at the discretion of our Board of Directors. | ||||||||
Compensation agreement for John CK Milligan, IV | Compensation for services rendered by John C.K. Milligan, IV as President calls for: (i) a Time-Based Option granted and issued on the Date of Grant to purchase 800,000 shares of our Common Stock with the exercise price equal to the closing price of our Common Stock on the Date of Grant with the underlying shares vesting annually over three years on the anniversary of the employment date, (ii) the right to receive a Performance-Based Option in an amount to be determined, (iii) a base salary of not less than $288,100 per year and (iv) an annual short-term incentive compensation bonus of up to 30% of the base salary, at the discretion of our Board of Directors. | ||||||||
Compensation agreement for Daniel A. Cartwright | Compensation for services rendered by Daniel A. Cartwright as Chief Financial Officer calls for: (i) a Time-Based Option granted and issued on the Date of Grant to purchase 700,000 shares of our Common Stock with the exercise price equal to the closing price of our Common Stock on the Date of Grant with the underlying shares vesting annually over three years on the anniversary of the employment date, (ii) the right to receive a Performance-Based Option in an amount to be determined, (iii) a base salary of not less than $257,100 per year and (iv) an annual short-term incentive compensation bonus of up to 30% of the base salary, at the discretion of our Board of Directors. | ||||||||
Research and development fees paid to non-affiliates | 1,747,084 | 833,342 | 3,312,285 | 1,245,303 | 4,492,362 | 107,241 | 65,402 | 245,000 | |
Research and development commitment to non-affiliates | $ 950,000 |
X | ||||||||||
- Definition
The total term (in months) of the company's outstanding lease obligation. No definition available.
|
X | ||||||||||
- Definition
Description of the compensation agreement with Daniel A. Cartwright. No definition available.
|
X | ||||||||||
- Definition
Description of the compensation agreement with John CK Milligan, IV. No definition available.
|
X | ||||||||||
- Definition
Description of the compensation agreement with Robert Finzio. No definition available.
|
X | ||||||||||
- Definition
Base monthly rent of operating leases, as stipulated in leasing agreements. No definition available.
|
X | ||||||||||
- Definition
The company's share of estimated operating expenses of properties, as stipulated in leasing agreements. No definition available.
|
X | ||||||||||
- Definition
Rental expense incurred for leased assets including furniture and equipment which has not been recognized in costs and expenses applicable to sales and revenues; for example, cost of goods sold or other operating costs and expenses. No definition available.
|
X | ||||||||||
- Definition
The minimum amount the entity agreed to spend under the long-term purchase commitment. No definition available.
|
X | ||||||||||
- Definition
Amount of required minimum rental payments for leases having an initial or remaining non-cancelable letter-terms in excess of one year. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The aggregate costs incurred (1) in a planned search or critical investigation aimed at discovery of new knowledge with the hope that such knowledge will be useful in developing a new product or service, a new process or technique, or in bringing about a significant improvement to an existing product or process; or (2) to translate research findings or other knowledge into a plan or design for a new product or process or for a significant improvement to an existing product or process whether intended for sale or the entity's use, during the reporting period charged to research and development projects, including the costs of developing computer software up to the point in time of achieving technological feasibility, and costs allocated in accounting for a business combination to in-process projects deemed to have no alternative future use. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
COMMITMENTS AND CONTINGENCIES (Details) (USD $)
|
Jun. 30, 2013
|
Dec. 31, 2012
|
Dec. 31, 2011
|
---|---|---|---|
Commitments And Contingencies Details | |||
December 31, 2012 | $ 111,725 | ||
December 31, 2013 | 56,601 | ||
December 31, 2014 | 0 | ||
December 31, 2015 | 0 | ||
Thereafter | 0 | ||
Total | $ 1,791,900 | $ 29,667 | $ 168,326 |
X | ||||||||||
- Details
|
X | ||||||||||
- Definition
Amount of required minimum rental payments for leases having an initial or remaining non-cancelable letter-terms in excess of one year. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Amount of required minimum rental payments maturing in the next fiscal year following the latest fiscal year for operating leases having an initial or remaining non-cancelable letter-terms in excess of one year. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Amount of required minimum rental payments maturing in the forth fiscal year following the latest fiscal year for operating leases having an initial or remaining non-cancelable letter-terms in excess of one year. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Amount of required minimum rental payments maturing in the third fiscal year following the latest fiscal year for operating leases having an initial or remaining non-cancelable letter-terms in excess of one year. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Amount of required minimum rental payments maturing in the second fiscal year following the latest fiscal year for operating leases having an initial or remaining non-cancelable letter-terms in excess of one year. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Amount of required minimum rental payments maturing after the fifth fiscal year following the latest fiscal year for operating leases having an initial or remaining non-cancelable letter-terms in excess of one year. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
SUBSEQUENT EVENTS (Details Narrative) (USD $)
|
0 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | 0 Months Ended | |||
---|---|---|---|---|---|---|---|---|
Mar. 07, 2013
|
Mar. 24, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
Dec. 31, 2012
|
Dec. 31, 2011
|
Feb. 27, 2012
Company Officer
|
Jan. 31, 2013
Plato and Associates Note
|
|
Promissory notes, principal | $ 3,102,000 | $ 10,000,000 | ||||||
Debt Interest rate | 6.00% | 6.00% | ||||||
Warrants Issued | 1,250,000 | |||||||
Exercise Price per share of warrants issued | 3.20 | |||||||
Warrants Fair Value | 1,700,000 | |||||||
Expected term | 6 years | |||||||
Expected Volatility | 44.29% | |||||||
Risk-free interest rate | 0.88% | |||||||
Expected dividend yield | 0.00% | |||||||
Proceeds from notes and loans payable | 6,900,000 | 8,700,000 | 2,684,160 | 200,000 | ||||
Gross expected proceeds from underwritten public offering of common stock | $ 50,000,000 | $ 45,400,000 | ||||||
Options Granted | 300,000 | |||||||
Term of options granted | 10 years | |||||||
Exercise price of options | $ 2.20 | |||||||
Options cancelled | 5,000 |
X | ||||||||||
- Definition
Exercise price of modification warrants issued. No definition available.
|
X | ||||||||||
- Definition
The fair value of outstanding warrants as of the balance sheet date. No definition available.
|
X | ||||||||||
- Definition
Warrants to purchase company's common stock issued in conjunction with the sale of notes. No definition available.
|
X | ||||||||||
- Definition
Interest rate stated in the contractual debt agreement. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Including the current and noncurrent portions, aggregate carrying amount of all types of notes payable, as of the balance sheet date, with initial maturities beyond one year or beyond the normal operating cycle, if longer. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The cash inflow from the issuance of common stock, preferred stock, treasury stock, stock options, and other types of equity. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The cash inflow from a borrowing having initial term of repayment within one year or the normal operating cycle, if longer. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The estimated dividend rate (a percentage of the share price) to be paid (expected dividends) to holders of the underlying shares over the option's term. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Expected term of share-based compensation awards, in 'PnYnMnDTnHnMnS' format, for example, 'P1Y5M13D' represents the reported fact of one year, five months, and thirteen days. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The estimated measure of the percentage by which a share price is expected to fluctuate during a period. Volatility also may be defined as a probability-weighted measure of the dispersion of returns about the mean. The volatility of a share price is the standard deviation of the continuously compounded rates of return on the share over a specified period. That is the same as the standard deviation of the differences in the natural logarithms of the stock prices plus dividends, if any, over the period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The risk-free interest rate assumption that is used in valuing an option on its own shares. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The weighted-average price as of the balance sheet date at which grantees can acquire the shares reserved for issuance on vested portions of options outstanding and currently exercisable under the stock option plan. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Number of options or other stock instruments for which the right to exercise has lapsed under the terms of the plan agreements. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Gross number of share options (or share units) granted during the period. No definition available.
|
X | ||||||||||
- Definition
Weighted average remaining contractual term for option awards outstanding, in 'PnYnMnDTnHnMnS' format, for example, 'P1Y5M13D' represents the reported fact of one year, five months, and thirteen days. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
RESTATEMENT OF 2010 AUDITED FINANCIALS (Details Narrative) (USD $)
|
12 Months Ended | 20 Months Ended | 32 Months Ended |
---|---|---|---|
Dec. 31, 2010
|
Dec. 31, 2009
|
Dec. 31, 2010
|
|
Options issued as compensation | $ 177,601 | ||
VitaMed
|
|||
Options issued as compensation | 105,929 | 283,530 | |
VitaMed | As Reported
|
|||
Options issued as compensation | 363,750 | 196,197 | 559,917 |
VitaMed | Restatement Adjustment
|
|||
Options issued as compensation | $ 186,149 | $ 90,238 | $ 276,387 |
X | ||||||||||
- Definition
The noncash expense that accounts for the value of stock or unit options distributed to employees as compensation. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
RESTATEMENT OF 2010 AUDITED FINANCIALS (Details) (USD $)
|
3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
Dec. 31, 2012
|
Dec. 31, 2011
|
Dec. 31, 2010
|
|
Additional paid in capital | $ 261,174 | ||||||
Accumulated deficit | (64,498,612) | (64,498,612) | (52,113,313) | (16,993,078) | (4,079,713) | ||
Sales, general, and administration | 5,476,553 | 3,573,485 | 10,003,135 | 6,400,535 | 14,069,701 | 6,406,197 | 3,464,810 |
Total operating expense | 7,234,273 | 4,421,362 | 13,334,013 | 7,674,951 | 18,618,323 | 6,568,283 | 3,552,995 |
Operating loss | (5,616,994) | (3,974,582) | (10,559,885) | (6,842,603) | (16,148,423) | (5,427,218) | (2,867,464) |
Net loss | (6,009,646) | (11,850,038) | (12,385,299) | (25,139,641) | (35,120,235) | (12,913,365) | (2,867,464) |
As Reported
|
|||||||
Additional paid in capital | 537,561 | ||||||
Accumulated deficit | (4,356,100) | ||||||
Sales, general, and administration | 3,650,959 | ||||||
Total operating expense | 3,739,144 | ||||||
Operating loss | (3,053,613) | ||||||
Net loss | $ (3,053,613) |
X | ||||||||||
- Definition
Excess of issue price over par or stated value of the entity's capital stock and amounts received from other transactions involving the entity's stock or stockholders. Includes adjustments to additional paid in capital. Some examples of such adjustments include recording the issuance of debt with a beneficial conversion feature and certain tax consequences of equity instruments awarded to employees. Use this element for the aggregate amount of additional paid-in capital associated with common and preferred stock. For additional paid-in capital associated with only common stock, use the element additional paid in capital, common stock. For additional paid-in capital associated with only preferred stock, use the element additional paid in capital, preferred stock. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The portion of profit or loss for the period, net of income taxes, which is attributable to the parent. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
Generally recurring costs associated with normal operations except for the portion of these expenses which can be clearly related to production and included in cost of sales or services. Includes selling, general and administrative expense. No definition available.
|
X | ||||||||||
- Definition
The net result for the period of deducting operating expenses from operating revenues. No definition available.
|
X | ||||||||||
- Definition
The cumulative amount of the reporting entity's undistributed earnings or deficit. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
X | ||||||||||
- Definition
The aggregate total costs related to selling a firm's product and services, as well as all other general and administrative expenses. Direct selling expenses (for example, credit, warranty, and advertising) are expenses that can be directly linked to the sale of specific products. Indirect selling expenses are expenses that cannot be directly linked to the sale of specific products, for example telephone expenses, Internet, and postal charges. General and administrative expenses include salaries of non-sales personnel, rent, utilities, communication, etc. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|