View Filing Data

Print Document View Excel Document

Document And Entity Information - shares	9 Months Ended
Document And Entity Information - shares	Sep. 30, 2014	Nov. 12, 2014
Document Information [Line Items]
Entity Registrant Name	ATOSSA GENETICS INC
Entity Central Index Key	0001488039
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Trading Symbol	ATOS
Entity Common Stock, Shares Outstanding		24,564,058
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2014
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2014

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)	Sep. 30, 2014	Dec. 31, 2013
Current assets
Cash and cash equivalents	$ 11,374,251	$ 6,342,161
Accounts receivable, net	29,151	139,072
Prepaid expense	266,726	280,627
Inventory, net	45,867	0
Total current assets	11,715,995	6,761,860
Furniture and equipment, net	185,000	163,147
Intangible assets, net	4,365,312	4,395,633
Deferred financing costs	426,961	651,961
Security deposit	78,958	36,446
Total assets	16,772,226	12,009,047
Current liabilities
Accounts payable	439,248	248,142
Accrued expenses	393,704	399,478
Deferred rent	8,549	48,157
Payroll liabilities	682,356	476,477
Product recall liabilities	3,385	211,493
Other current liabilities	12,375	23,649
Total current liabilities	1,539,617	1,407,396
Stockholders' Equity
Preferred stock - $.001 par value; 10,000,000 shares authorized, 0 shares issued and outstanding at September 30, 2014 and December 31, 2013, respectively	0	0
Common stock - $.001 par value; 75,000,000 shares authorized, 24,564,058 and 18,574,334 shares issued and outstanding at September 30, 2014 and December 31, 2013, respectively	24,564	18,574
Additional paid-in capital	44,569,561	31,099,691
Accumulated deficit	(29,361,516)	(20,516,614)
Total stockholders' equity	15,232,609	10,601,651
Total liabilities and stockholders' equity	$ 16,772,226	$ 12,009,047

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Sep. 30, 2014	Dec. 31, 2013
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, authorized	75,000,000	75,000,000
Common stock, shares issued	24,564,058	18,574,334
Common stock, shares outstanding	24,564,058	18,574,334

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Revenue
Diagnostic testing service	$ 3,426	$ 72,187	$ 37,425	$ 361,905
Product sales	0	4,410	0	223,440
Total Revenue	3,426	76,597	37,425	585,345
Cost of Revenue
Diagnostic testing service	0	25,938	0	75,893
Product sales	0	0	0	238,669
Total Cost of Revenue	0	25,938	0	314,562
Gross Profit	3,426	50,659	37,425	270,783
Selling expenses	282,374	373,418	743,597	965,383
Research and development expenses	923,169	321,111	1,856,439	731,258
General and administrative expenses	2,043,138	2,858,027	6,280,102	6,600,819
Total operating expenses	3,248,681	3,552,556	8,880,138	8,297,460
Operating Loss	(3,245,255)	(3,501,897)	(8,842,713)	(8,026,677)
Interest income	11	53	154	53
Interest expense	151	1	2,343	360
Loss before Income Taxes	(3,245,395)	(3,501,845)	(8,844,902)	(8,026,984)
Income Taxes	0	0	0	0
Net Loss	$ (3,245,395)	$ (3,501,845)	$ (8,844,902)	$ (8,026,984)
Loss per common share - basic and diluted (in dollars per share)	$ (0.13)	$ (0.22)	$ (0.37)	$ (0.55)
Weighted average shares outstanding, basic & diluted (in shares)	24,537,379	15,830,033	23,860,843	14,697,221

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY - 9 months ended Sep. 30, 2014 - USD ($)	Total	Common Stock [Member]	Additional Paid-in Capital [Member]	Accumulated Deficit during Development Stage [Member]
Balance at Dec. 31, 2013	$ 10,601,651	$ 18,574	$ 31,099,691	$ (20,516,614)
Balance (in shares) at Dec. 31, 2013		18,574,334
Issuance of common shares for cash	14,002,162	$ 5,834	13,996,328	0
Issuance of common shares for cash (in shares)		5,834,234
Issuance of common shares for services	0	$ 23	(23)	0
Issuance of common shares for services (in shares)		22,731
Financing fees from 2014 Public Offering	(1,078,417)	$ 0	(1,078,417)	0
Amortization of deferred financing costs	(225,000)	0	(225,000)	0
Issuance of Common shares upon exercise of warrants	32,000	$ 20	31,980	0
Issuance of Common shares upon exercise of warrants (in shares)		20,000
Employees option exercise and cancellation of restricted stock grants	200,000	$ 113	199,887	0
Employees option exercise and cancellation of restricted stock grants (in shares)		112,759
Compensation cost for stock options granted to executives and employees	545,115	$ 0	545,115	0
Net loss for the nine months ended September 30, 2014	(8,844,902)	0	0	(8,844,902)
Balance at Sep. 30, 2014	$ 15,232,609	$ 24,564	$ 44,569,561	$ (29,361,516)
Balance (in shares) at Sep. 30, 2014		24,564,058

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$ (8,844,902)	$ (8,026,984)
Adjustments to reconcile net loss to net cash used in operating activities:
Common shares issued for services	0	144,391
Compensation cost for stock options granted	545,115	1,187,717
Depreciation and amortization	380,977	350,536
Bad debt expense	80,870	228,841
Changes in operating assets and liabilities:
Accounts receivable	29,051	(386,514)
Inventory	(45,867)	0
Prepaid expenses	(71,099)	71,439
Security deposits	(42,512)	(43,160)
Accounts payable	191,106	(37,086)
Payroll liabilities	205,879	149,493
Deferred rent	(39,608)	60,753
Accrued expenses	(5,774)	(304,626)
Product recall liabilities	(208,108)	402,840
Other current liabilities	(11,274)	20,300
Net cash used in operating activities	(7,836,146)	(6,182,060)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of furniture and fixtures	(102,530)	(346,007)
Purchase of software	(184,979)	(54,667)
Net cash used in investing activities	(287,509)	(400,674)
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from issuance of common stock and warrants	13,155,745	12,551,098
Net cash provided by financing activities	13,155,745	12,551,098
NET INCREASE IN CASH & CASH EQUIVALENTS	5,032,090	5,968,364
CASH & CASH EQUIVALENTS, BEGINNING BALANCE	6,342,161	1,725,197
CASH & CASH EQUIVALENTS, ENDING BALANCE	11,374,251	7,693,561
SUPPLEMENTAL DISCLOSURES:
Interest paid	2,343	359
NONCASH INVESTING AND FINANCING ACTIVITIES:
Reclassification of furniture and equipment to prepaid expenses	15,000	0
Common stock issued as commitment fee under stock purchase agreement	$ 0	$ 2,387,250

NATURE OF OPERATIONS

9 Months Ended

Sep. 30, 2014

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Nature of Operations [Text Block]

NOTE 1: NATURE OF OPERATIONS

Atossa Genetics Inc. (the “Company”) was incorporated on April 30, 2009 in the State of Delaware. The Company was initially formed to develop and market medical devices that collect specimens for further testing. The Company’s fiscal year ends on December 31st.

In December 2011, the Company established The National Reference Laboratory for Breast Health, Inc., or the NRLBH, as a wholly-owned subsidiary. The NRLBH is a CLIA-certified laboratory which performs tests including nipple aspirate fluid (“NAF”) cytology testing and pharmacogenetics testing. The NRLBH is also developing other tests such as the NextCYTE test.

In September 2012, the Company acquired the assets of Acueity Healthcare, Inc. (“Acueity”). The purchased assets included intellectual property rights related to the Viaduct Miniscope and accessories, the Manoa Breast Biopsy system, the Excisor Bioptome, the Acueity Medical Light Source, the Viaduct Microendoscope and accessories, and cash in the amount of $400,000. No liabilities were assumed by Atossa and Atossa assumed no future financial obligations. In consideration for the assets, Atossa provided the following consideration to the shareholders of Acueity: 862,500 shares of common stock, valued at $5.00 per share, and warrants to purchase up to 325,000 shares of common stock at an exercise price of $5.00 per share, valued at $2.3457 per warrant, using a Black-Scholes-Merton Valuation Technique. The acquired patents relate to intraductal diagnostic and therapeutic devices and methods of use. The Company did not, however, acquire an inventory of these diagnostic tools, manufacturing capabilities or any personnel to market and sell the tools. The Company cannot provide any assurance that it will be successful commercializing these tools.

Since its inception, the Company has been dependent upon the receipt of capital investment to fund its continuing activities. In addition to the normal risks associated with a new business venture, there can be no assurance that the Company’s business plan will be successfully executed. The Company’s ability to execute its business plan will depend on its ability to obtain additional financing and achieve a profitable level of operations. There can be no assurance that sufficient financing will be obtained. Further, the Company cannot give any assurance that it will generate substantial revenue or that its business operations will prove to be profitable.

GOING CONCERN

9 Months Ended

Sep. 30, 2014

Going Concern Disclosure [Abstract]

Going Concern Disclosure [Text Block]

NOTE 2: GOING CONCERN

The Company’s condensed consolidated financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenue sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations. These matters raise substantial doubt about the Company’s ability to continue as a going concern for the foreseeable future. The accompanying condensed consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Management’s Plan to Continue as a Going Concern

In order to continue as a going concern, the Company will need additional capital resources. Management’s plans to obtain such resources for the Company include (1) obtaining capital from the sale of its equity securities, (2) sales of its medical devices including the ForeCYTE Breast Aspirator and FullCYTE Breast Aspirator, (3) laboratory services, and (4) short-term or long-term borrowings from banks, stockholders or other party(ies) when needed. However, management cannot provide any assurance that the Company will be successful in accomplishing any of its plans.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually to secure other sources of financing and attain profitable operations.

SUMMARY OF ACCOUNTING POLICIES

9 Months Ended

Sep. 30, 2014

Accounting Policies [Abstract]

Significant Accounting Policies [Text Block]

NOTE 3: SUMMARY OF ACCOUNTING POLICIES

Basis of Presentation:

The accompanying condensed consolidated financial statements have been prepared pursuant to the rules of the Securities and Exchange Commission ("SEC"). Certain information and footnote disclosures, normally included in annual financial statements prepared in accordance with U.S. generally accepted accounting principles ("GAAP"), have been condensed or omitted pursuant to those rules and regulations. The Company believes disclosures made are adequate to make the information presented not misleading. In the opinion of management, all adjustments, consisting only of normal recurring adjustments necessary to fairly state the financial position, results of operations and cash flows with respect to the interim condensed consolidated financial statements have been included. The results of operations for the interim periods are not necessarily indicative of the results of operations for the entire fiscal year. Reference is made to the Company’s audited annual financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2013, which contain information useful to understanding the Company's business and financial statement presentations. The Condensed Consolidated Balance Sheet as of December 31, 2013 was derived from the Company's most recent audited financial statements, but does not include all disclosures required by GAAP for a year-end balance sheet. The Company’s significant accounting policies and practices are presented as Note 3 to the consolidated financial statements included in the Annual Report. The accompanying condensed consolidated financial statements include the financial statements of Atossa Genetics Inc. and its wholly-owned subsidiary NRLBH. All significant intercompany account balances and transactions have been eliminated in consolidation. These condensed consolidated financial statements have been prepared in accordance with GAAP in the United States of America.

Use of Estimates:

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.

Recently Issued Accounting Pronouncements:

The Company has adopted all recently issued accounting pronouncements that management believes to be applicable to the Company.

In May 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers: Topic 606 (“ASU 2014-09”), to supersede nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process than required under existing GAAP including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. ASU 2014-09 is effective for the Company in the first quarter of 2017 using either of two methods: (i) retrospective to each prior reporting period presented with the option to elect certain practical expedients as defined within ASU 2014-09; or (ii) retrospective with the cumulative effect of initially applying ASU 2014-09 recognized at the date of initial application and providing certain additional disclosures as defined per ASU 2014-09. The Company is currently evaluating the impact of its pending adoption of ASU 2014-09 on its condensed consolidated financial statements.

In June 2014, FASB issued ASU 2014-10, Elimination of Development Stage Entity Requirements. This ASU eliminates the concept of Development Stage Entities (DSE’s) from U.S. GAAP and is intended to result in cost-savings for certain entities, such as start-ups or research and development entities. As a result of these changes; the financial statements of developing entities no longer need to meet the inception-to-date income cash flow and equity information; developing companies do not have to label their financial statements as “development stage”; and certain disclosures related to the nature of the entity’s development stage activities are no longer required. The Company adopted the provisions of this ASU beginning with the quarter ended June 30, 2014.

In August 29, 2014, FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. This ASU requires the management to determine whether substantial doubt exists regarding the entity’s going concern presumption, which generally refers to an entity’s ability to meet its obligations as they become due. If substantial doubt exists but is not alleviated by management’s plan, the footnotes must specifically state that “there is substantial doubt about the entity’s ability to continue as a going concern within one year after the financial statements are issued”. In addition, if substantial doubt exists, regardless of whether such doubt was alleviated, entities must disclose (a) principal conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern (before consideration of management’s plans, if any); (b) management’s evaluation of the significance of those conditions or events in relation to the entity’s ability to meet its obligations; and (c) management’s plans that are intended to mitigate the conditions or events that raise substantial doubt, or that did alleviate substantial doubt, about the entity’s ability to continue as a going concern. If substantial doubt has not been alleviated, these disclosures should become more extensive in subsequent reporting periods as additional information becomes available. In the period that substantial doubt no longer exists (before or after considering management’s plans), management should disclose how the principal conditions and events that originally gave rise to substantial doubt have been resolved. The ASU applies prospectively to all entities for annual periods ending after December 15, 2016, and to annual and interim periods thereafter. Early adoption is permitted.

Reclassifications:

The prior period deferred financing costs have been reclassified to conform to the current year presentation. The reclassification had no impact on previously reported net loss or accumulated deficit.

Certain prior period accrued expenses have been reclassified as accounts payable to conform to the current year presentation. The reclassification had no impact on previously reported net loss or accumulated deficit.

PREPAID EXPENSES

9 Months Ended

Sep. 30, 2014

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Prepaid Expenses [Text Block]

NOTE 4: PREPAID EXPENSES

Prepaid expenses consisted of the following:

	September 30, 2014		December 31, 2013
Tradeshow and other marketing events	$	150,000	$	-
Prepaid hardware and software		42,426		131,204
Prepaid insurance		36,800		112,517
Retainer and security deposits		29,500		36,906
Other		8,000		-
	$	266,726	$	280,627

FURNITURE AND EQUIPMENT

9 Months Ended

Sep. 30, 2014

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment Disclosure [Text Block]

NOTE 5: FURNITURE AND EQUIPMENT

Property, plant furniture and equipment consisted of the following:

	September 30, 2014		December 31, 2013
Machinery and equipment	$	429,355	$	326,824
Leasehold improvements		93,665		93,665
Capitalized new product development costs		-		15,000
Less: Accumulated depreciation		(179,728)		(114,050)
Less: Allowance for loss on impairment		(158,292)		(158,292)
Furniture and equipment, net	$	185,000	$	163,147

Depreciation expense for the three months ended September 30, 2014 and 2013 were $24,643 and $27,165, respectively, and $65,678 and $62,849 for the nine month periods then ended.

INTANGIBLE ASSETS

9 Months Ended

Sep. 30, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets Disclosure [Text Block]

NOTE 6: INTANGIBLE ASSETS

Intangible assets consisted of the following:

	September 30,		December 31,
	2014		2013
Patents	$	4,794,853	$	4,794,853
Capitalized license costs		200,000		-
Software		190,817		105,839
Less: Accumulated amortization		(820,358)		(505,059)
	$	4,365,312	$	4,395,633

Intangible assets amounted to $4,365,312 and $4,395,633 as of September 30, 2014 and December 31, 2013, respectively, and consisted of patents, capitalized license costs and software acquired. The acquired software mainly consisted of $58,000 in laboratory software, $31,500 in the newly developed Company website and $70,400 in internal use SAP Business One ERP system which is under development. The amortization period for the purchased software is three years. Amortization expense related to software for the three months ended September 30, 2014 and 2013 was $4,913 and $5,730, respectively, and $22,436 and $15,322 for the nine month periods then ended.

Patents amounted to $4,794,853 as of both September 30, 2014 and December 31, 2013 and mainly consisted of patents acquired from Acueity on September 30, 2012 in an asset purchase transaction. Patent assets are amortized based on their determined useful life, and tested annually for impairment. The amortization period is from 9 to 14 years. Amortization expense related to patents was $93,497 and $281,196 for the three months and nine months ended September 30, 2014. Amortization expense for patents was $90,977 and $272,992 for the three months and nine months ended September 30, 2013.

Capitalized license costs consist of fees paid to A5 Genetics KFT, Corporation, pursuant to which the Company received the world-wide (other than the European Union) exclusive license to use the software in the NextCYTE test. Amortization expense related to license costs were $5,000 and $11,667 for the three and nine months ended September 30, 2014, respectively.

Future estimated amortization expenses as of September 30, 2014 for the five succeeding years is as follows:

For the Year Ending December 31,	Amounts
2014 (includes the remainder of the year)	$	110,215
2015		440,539
2016		433,277
2017		414,957
2018		393,990
Thereafter		2,572,334
	$	4,365,312

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

+ References + Details

PAYROLL LIABILITIES

9 Months Ended

Sep. 30, 2014

Payables and Accruals [Abstract]

Accounts Payable and Accrued Liabilities Disclosure [Text Block]

NOTE 7: PAYROLL LIABILITIES

Payroll liabilities consisted of the following:

	September 30, 2014		December 31, 2013
Accrued bonus payable	$	566,185	$	408,362
Accrued payroll liabilities		102,892		48,232
Accrued payroll tax liabilities		13,279		19,883
	$	682,356	$	476,477

STOCKHOLDERS' EQUITY

9 Months Ended

Sep. 30, 2014

Stockholders' Equity Note [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

NOTE 8: STOCKHOLDERS’ EQUITY

The Company is authorized to issue a total of 85,000,000 shares of stock consisting of 75,000,000 shares of Common Stock, par value $0.001 per share, and 10,000,000 shares of Preferred Stock, par value $0.001 per share. The Company has designated 750,000 shares of Series A Junior Participating Preferred Stock, par value $0.001 per share through the filing of certificate of designation with the Delaware Secretary of State.

On May 19, 2014, the Company adopted a stockholder rights agreement which provides that all stockholders of record on May 26, 2014 received a non-taxable distribution of one preferred stock purchase right for each share of the Company’s common stock held by such stockholder. Each right is attached to and trades with the associated share of common stock. The rights will become exercisable only if one of the following occurs: (1) a person becomes an “Acquiring Person” by acquiring beneficial ownership of 15% or more of the Company’s common stock (or, in the case of a person who beneficially owned 15% or more of the Company’s common stock on the date the stockholder rights agreement was executed, by acquiring beneficial ownership of additional shares representing 2.0% of the Company’s common stock then outstanding (excluding compensatory arrangements) or (2) a person commences a tender offer that, if consummated, would result in such person becoming an Acquiring Person. If a person becomes an Acquiring Person, each right will entitle the holder, other than the Acquiring Person and certain related parties, to purchase a number of shares of the Company’s common stock with a market value that equals twice the exercise price of the right. The initial exercise price of each right is $15.00, so each holder (other than the Acquiring Person and certain related parties) exercising a right would be entitled to receive $30.00 worth of the Company’s common stock. If the Company is acquired in a merger or similar business combination transaction at any time after a person has become an Acquiring Person, each holder of a right (other than the Acquiring Person and certain related parties) will be entitled to purchase a similar amount of stock of the acquiring entity.

2014 Public Offering of Common Stock and Warrants

On January 29, 2014, the Company closed a public offering of 5,834,234 units at the price of $2.40 per unit for total gross proceeds of approximately $14.0 million (the “2014 Public Offering”). Each unit consists of one share of common stock and a warrant to purchase 0.20 of a share of common stock (the “2014 Investor Warrants”). The 2014 Investor Warrants are exercisable at $3.00 per share and callable by the Company if our stock trades above $6.00 per share if certain conditions are met.

Placement Agent Fees

In connection with the 2014 Public Offering, the Company paid Dawson James Securities, Inc. (the “Placement Agent”), a cash fee equal to 7% of the gross proceeds from sale of the units, which resulted in a payment to the Placement Agent of an aggregate of $980,151 (the “Placement Agent Fee”). In addition, the Company entered into Warrant Agreements with the Placement Agent pursuant to which the Placement Agent received a warrant to purchase 175,027 shares of common stock, or 3% of the aggregate number of shares sold in the offering (the “2014 Placement Agent Warrants” and together with the 2014 Investor Warrants, the “2014 Warrants”). The 2014 Placement Agent Warrant entitles the Placement Agent to purchase 175,027 shares of the Company’s common stock at $3.00 per share. The cash payment of $980,151 for 2014 Placement Agent Fee and the $121,707 aggregated initial fair value of the 2014 Placement Agent Warrants (see Fair Value Considerations below) were directly attributable to an actual offering and were charged through additional paid-in capital in accordance with the SEC Staff Accounting Bulletin (SAB) Topic 5A.

Warrants

The 2014 Warrants are exercisable at any time commencing after January 29, 2014 (the “Initial Exercise Date”). Subject to the call right described above, the 2014 Warrants shall expire and no longer be exercisable on the fifth anniversary of the Initial Exercise Date (the “Expiration Date”). The 2014 Warrants cannot be exercised on a cashless basis. There are no redemption features embodied in the 2014 Warrants and they have met the conditions for equity classification.

Fair Value Consideration

The Company’s accounting for the issuance of the 2014 Warrants required the estimation of fair values of the financial instruments. The development of fair values of financial instruments requires the selection of appropriate methodologies and the estimation of often subjective assumptions. The Company selected the valuation techniques based upon consideration of the types of assumptions that market participants would likely consider in exchanging the financial instruments in market transactions. The 2014 Warrants were valued using a Black-Scholes-Merton Valuation Technique because it embodies all of the requisite assumptions (including trading volatility, estimated terms and risk free rates) necessary to assess the fair value of these instruments.

The 2014 Investor Warrants and the 2014 Placement Agent Warrants were valued at $834,986 or $0.72 per warrant, and $121,707 or $0.70 per warrant, respectively. The following tables reflect assumptions used to determine the fair value of the 2014 Warrants:

	Fair		January 29, 2014
	Value Hierarchy Level		2014 Investor Warrants			Placement Agent Warrants

Indexed shares				1,166,849			175,027
Exercise price			$	3.00		$	3.00

Significant assumptions:
Stock price		1	$	2.50		$	2.47
Remaining term		3		5 years			5 years
Risk free rate		2		1.45	%		1.42	%
Expected volatility		3		37.96	%		37.95	%

Outstanding Warrants

As of September 30, 2014, warrants to purchase 6,033,426 shares of common stock are outstanding including:

	Outstanding Warrants to purchase shares	Exercise price		Expiration date

2011 private placement	4,252,050	$	1.25 - 1.60	June 23, 2016
Acueity warrants	325,000		5.00	September 30, 2017
2014 public offering	1,166,849		3.00	January 29, 2019
Placement agent fees for Company’s offerings	242,027		2.12 – 12.43	March - November, 2018
Outside consulting	47,500	$	4.24	January 14, 2018

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(d),(e))
-URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21484-112644

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 310
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB TOPIC 4.E)
-URI http://asc.fasb.org/extlink&oid=27010918&loc=d3e74512-122707

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21488-112644

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.29-31)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section S99
-Paragraph 4
-Subparagraph (SAB TOPIC 4.C)
-URI http://asc.fasb.org/extlink&oid=27012166&loc=d3e187143-122770

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 6
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21506-112644

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.3-04)
-URI http://asc.fasb.org/extlink&oid=27012166&loc=d3e187085-122770

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 30
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6405834&loc=d3e23285-112656

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Preferred Stock
-URI http://asc.fasb.org/extlink&oid=6521494

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21463-112644

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 11
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21564-112644

Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 08
-Paragraph d
-Article 4

Reference 15: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 02
-Paragraph 29, 30, 31
-Article 5

Reference 16: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Staff Accounting Bulletin (SAB)
-Number Topic 4
-Section E

Reference 17: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 08
-Article 4

Reference 18: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Staff Accounting Bulletin (SAB)
-Number Topic 4
-Section C

Reference 19: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 04
-Article 3

+ Details

NET LOSS PER SHARE

9 Months Ended

Sep. 30, 2014

Earnings Per Share [Abstract]

Earnings Per Share [Text Block]

NOTE 9: NET LOSS PER SHARE

The Company accounts for and discloses net loss per common share in accordance with FASB ASC Topic 260, Earnings Per Share. Basic net loss per common share is computed by dividing net loss attributable to common stockholders by the weighted average number of common shares outstanding. Diluted net loss per common share is computed by dividing net loss attributable to common stockholders by the weighted average number of common shares that would have been outstanding during the period assuming the issuance of common shares for all potential dilutive common shares outstanding. Potential common shares consist of shares issuable upon the exercise of stock options and warrants. Because the inclusion of potential common shares would be anti-dilutive for all periods presented, diluted net loss per common share is the same as basic net loss per common share.

The following table sets forth the number of potential common shares excluded from the calculation of net loss per diluted share for the three-month and nine-month periods ended September 30, 2014 and 2013:

	Three Months Ended September 30,		Nine Months Ended September 30,
	2014	2013	2014	2013
Options to purchase common stock	3,464,232	2,246,651	3,464,232	2,246,651
Warrants to purchase common stock	6,033,426	4,775,550	6,033,426	4,775,550
Restricted stock units	-	-	-	-
	9,497,658	7,022,201	9,497,658	9,497,658

CONCENTRATION OF CREDIT RISK

9 Months Ended

Sep. 30, 2014

Risks and Uncertainties [Abstract]

Concentration Risk Disclosure [Text Block]

NOTE 10: CONCENTRATION OF CREDIT RISK

Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash deposits. Accounts at each institution are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. At September 30, 2014 and December 31, 2013, the Company had $11,124,251 and $6,092,161 in excess of the FDIC insured limit, respectively.

COMMITMENTS AND CONTINGENCIES

9 Months Ended

Sep. 30, 2014

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure [Text Block]

NOTE 11: COMMITMENTS AND CONTINGENCIES

Lease Commitments

The future minimum lease payments due subsequent to September 30, 2014 under all non-cancelable operating leases are as follows:

Year Ending December 31,	Amount
2014 (remainder of the year)	$	105,723
2015		480,007
2016		464,771
2017		105,894
Total minimum lease payments	$	1,156,395

Affymetrix Purchase Commitment

In September 2013, in connection with the development of the NextCYTE test by the NRLBH, the NRLBH entered into an “OwnerChip Program Agreement” with Affymetrix, Inc, a manufacturer of GeneChip Systems, where Affymetrix has agreed to loan a GeneChip System 3000Dx v.2 (“instrument”) to the Company if it purchases and takes delivery of a minimum thirty GeneChip Human Genome U133 Plus 2.0 (30-pack) arrays at $21,590 per 30 pack for the next three years for a total purchase obligation of $647,700 with a minimum purchase of ten 30-pack arrays per contract year. At the end of the three year contract, upon fulfillment of the purchase commitment, the instrument title and ownership transfer to the NRLBH at no additional cost. In addition to the GeneChip Human Genome, the NRLBH must purchase a two year service contract for $51,600 to cover maintenance of the instrument during the contract period. The NRLBH placed an initial order for four 30-pack arrays during 2013 for $94,723. In September 2014, the NRLBH purchased six additional 30-pack arrays for $142,005. The NRLBH obligated to purchase 20 additional arrays during the next two year contract term

A5 Software Development Commitment

On June 10, 2013, the Company entered into an irrevocable license and service agreement with A5 Genetics KFT, Corporation, pursuant to which the Company received the world-wide (other than the European Union) exclusive license to the software used in the NextCYTE test. The Company has the right to prosecute patents related to this software, two of which the Company has filed in the United States. The patent applications have been assigned to the Company. The Company paid a one-time fee of $100,000 to A5 Genetics in 2013 and in March 2014 the Company completed software validation and paid an additional $100,000 to A5 Genetics. The Company is obligated to pay up to an additional $1.2 million to A5 Genetics upon commercial launch of NextCYTE test and receiving FDA approval. The Company must also pay a royalty of $50 for each NextCYTE Test performed and $65 as a service fee for each NextCYTE Test performed. The agreement terminates on the later of the ten year anniversary of the agreement or the expiration of the latest to expire patent covering the software.

Luminex Reagent Rental Agreement and Assay License Agreement

On September 2, 2014, in connection with the development of a pharmacogenetics test by the NRLBH, the NRLBH entered into a three year agreement with Luminex Corporation (Luminex), which provides that the NRLBH acquires the right to use Luminex instruments, including accessories, peripherals and options (the “System”) at no cost if the NRLBH purchases goods (the “Products”) at agreed upon quantities and prices for the next three years. The minimum purchases of Products under the agreement are $452,408 per year. The title to the System remains with Luminex and the NRLBH is required to return the System to Luminex at the end of the rental agreement.

BioVentive Laboratory Marketing Service Agreement

On August 28, 2014, NRLBH entered into a three year Laboratory Marketing Services Agreement with BioVentive, Inc. (“BioVentive”), which provides that BioVentive market and promote the NRLBH laboratory tests to licensed physicians practicing medicine for a fixed fee. BioVentive’s rights are exclusive for pharmacogenomics tests, so long as BioVentive meets certain minimums, and non-exclusive for all other tests. The agreement may be terminated prior to the end of the three year term by either party for material breach that is not cured and the NRLBH may terminate if BioVentive fails to meet certain minimums or if the NRLBH undergoes a change of control. If the agreement is terminated by the NRLBH for any reason other than for cause (which includes a material un-cured breach by BioVentive or if BioVentive fails to meet certain minimums), the NRLBH is required to pay BioVentive a termination fee equal to approximately three months of fees otherwise payable to BioVentive.

Targeted Medical Education (TME) Master Service Agreement

On September 1, 2014, the NRLBH entered into a Master Service Agreement with Targeted Medical Education (TME), where TME provides matched sets of de-identified tissue samples and clinically annotated retrospective data on 100 cancer patients for testing and evaluation of the NextCYTE test for a total cost of $162,600. As of September 30, 2014, the Company has paid $100,000 in set-up fees as R&D expenses.

Contingencies

On June 30, 2011, Robert Kelly, the Company’s former President, filed a counterclaim against the Company in an arbitration proceeding, alleging breach of contract in connection with the termination of a consulting agreement between Mr. Kelly (dba Pitslayer LLC) and the Company that was entered into in July 2010 in connection with his resignation from the Company as President and a director. The consulting agreement was terminated by the Company in September 2010.

On December 11, 2012, Mr. Kelly filed a complaint in the United States District Court, Western Division of Washington seeking compensatory damages, interest and attorneys’ fees related to the termination of Mr. Kelly’s consulting contract and the rescission of shares issued to him in July 2010 in connection with his resignation from the Company as President and a director.

On February 26, 2013, Mr. Victor Cononi filed a complaint in the United States District Court, Western Division of Washington seeking compensatory damages, interest and attorneys’ fees related to the rescission of shares issued to him in July 2010 in connection with Mr. Kelly’s resignation from the Company as President and a director

On November 3, 2014, the matters with Messrs. Kelly and Cononi were settled through mutual agreement of the parties. The parties agreed to mutual releases and to dismiss the arbitration and federal actions. The amount paid by the Company to settle this matter was not significant.

On October 10, 2013, a putative securities class action complaint, captioned Cook v. Atossa Genetics, Inc., et al., No. 2:13-cv-01836-RSM, was filed in the United States District Court for the Western District of Washington against us, certain of the Company’s directors and officers and the underwriters of the Company November 2012 initial public offering. The complaint alleges that all defendants violated Sections 11 and 12(a)(2), and that the Company and certain of its directors and officers violated Section 15, of the Securities Act by making material false and misleading statements and omissions in the offering’s registration statement, and that we and certain of our directors and officers violated Sections 10(b) and 20A of the Exchange Act and SEC Rule 10b-5 promulgated thereunder by making false and misleading statements and omissions in the registration statement and in certain of our subsequent press releases and SEC filings with respect to our NAF specimen collection process, our ForeCYTE Breast Health Test and our MASCT device. This action seeks, on behalf of persons who purchased our common stock between November 8, 2012 and October 4, 2013, inclusive, damages of an unspecific amount.

On February 14, 2014, the Court appointed plaintiffs Miko Levi, Bandar Almosa and Gregory Harrison (collectively, the “Levi Group”) as lead plaintiffs, and approved their selection of co-lead counsel and liaison counsel. The Court also amended the caption of the case to read In re Atossa Genetics, Inc. Securities Litigation. No. 2:13-cv-01836-RSM. An amended complaint was filed on April 15, 2014. The Company and other defendants filed motions to dismiss the amended complaint on May 30, 2014. The plaintiffs filed briefs in opposition to these motions on July 11, 2014. The Company replied to the opposition brief on August 11, 2014. On October 6, 2014 the Court granted defendants’ motion dismissing all claims against Atossa and all other defendants. The Court’s order provided plaintiffs with a deadline of October 26, 2014 to file a motion for leave to amend their complaint and the plaintiffs did not file such a motion by that date. On October 30, 2014, the Court entered a final order of dismissal. On November 3, 2014, plaintiffs filed a notice of appeal with the Court and have appealed the Court’s dismissal order to the U.S. Court of Appeals for the Ninth Circuit.

The Company believes this lawsuit is without merit and plans to defend itself vigorously; however, failure by the Company to obtain a favorable resolution of the claims set forth in the complaint could have a material adverse effect on the Company’s business, results of operations and financial condition. Currently, the amount of such material adverse effect cannot be reasonably estimated, and no provision or liability has been recorded for these claims as of September 30, 2014. The costs associated with defending and resolving the lawsuit and ultimate outcome cannot be predicted. These matters are subject to inherent uncertainties and the actual cost, as well as the distraction from the conduct of the Company’s business, will depend upon many unknown factors and management’s view of these may change in the future.

FDA Warning Letter

On February 21, 2013, the Company received a Warning Letter (“Warning Letter”) from the FDA regarding its Mammary Aspirate Specimen Cytology Test (MASCT) System and MASCT System Collection Test (currently called the “ForeCYTE Breast Aspirator,” and together, the “System”). The Warning Letter arises from certain FDA findings during a July 2012 inspection, to which the Company responded in August 2012. In that response, the Company explained why the Company believed it was in compliance with applicable regulations and/or was implementing changes responsive to the findings of the FDA inspection. The FDA alleges in the Warning Letter that following 510(k) clearance of the MASCT System, the Company changed the System in a manner that requires submission of an additional 510(k) notification to the FDA. Specifically, the FDA stated that the Instructions For Use (IFU) in the original 510(k) submission stated that the user must “Wash the collection membrane with fixative solution into the collection vial…” while the current IFU states “…apply one spray of Saccomanno’s Fixative to the collection membrane…” and that “this change fixes the NAF specimen to the filter paper rather than washing it into a collection vial.” At the time that the changes were made the Company determined and documented that the change could not significantly affect the safety or effectiveness of the MASCT System, and thus, that a new 510(k) was not required in accordance with the FDA’s guidance document entitled, “Deciding When to Submit a 510(k) for a Change to an Existing Device.” The Warning Letter also identified certain issues with respect to the Company’s marketing of the System and the Company’s compliance with FDA Good Manufacturing Practices (cGMP) regulations, among other matters. The Company responded to the Warning Letter on March 13, 2013, and identified the corrective actions that had been made, or were otherwise underway. The Company also filed a new 510(k) application for the MASCT System which was withdrawn in August 2013 after receiving feedback from the FDA.

On October 4, 2013, the Company initiated a voluntary recall of the system to address FDA’s concerns regarding the modifications identified in the Warning Letter. As a result of this recall, this product is currently not being marketed or distributed in the United States. The Company submitted a new premarket notification, or 510(k) application, with the FDA on December 23, 2013 that covered the collection, preparation, and processing of NAF specimens and includes the spray method of fixing specimens to the collection membrane and in September 2014 the FDA rendered a decision that the ForeCYTE Breast Aspirator is not “substantially equivalent” to its predicate device. The ForeCYTE Breast Aspirator is therefore not cleared by the FDA for marketing in the United States. We cannot market or distribute the ForeCYTE Breast Aspirator within the United States until we receive clearance for this device from the FDA.

On March 14, 2014, the FDA completed a follow up inspection at the Company’s Seattle facility. A Form 483 was provided to the Company at the conclusion of the inspection. In the FDA's most recent Form 483, five inspectional observations were identified regarding the Company’s quality management system. The FDA investigator also orally identified five additional discussion points related to the Company’s product labeling prior to the recall of the MASCT System; sufficiency of the content of the Company’s pending 510(k) submission for the ForeCYTE Breast Aspirator; and other compliance issues. On March 26, 2014, the Company submitted a response to the FDA, which included its proposed corrective actions to address the FDA's observations and discussion points. Whether the FDA will accept the Company’s response is uncertain, particularly in light of the similar nature of certain of the current inspectional observations to previous inspectional observations. If the FDA does not agree with the Company’s proposed corrective actions, or accepts them but finds that the Company has not implemented them adequately, or if the Company otherwise is found to be out of compliance with applicable regulatory requirements at a later date, the FDA could initiate additional warning letters, or initiate without further notice an enforcement action, fines and penalties. The FDA also may not clear a 510(k) for the ForeCYTE Breast Aspirator or our other devices and services under development. Any of the foregoing would have a material adverse effect on our business.

STOCK BASED COMPENSATION

9 Months Ended

Sep. 30, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

NOTE 12: STOCK BASED COMPENSATION

Compensation costs associated with the company’s stock options are recognized, based on the grant-date fair values of these options, over the requisite service period, or vesting period. Accordingly, the Company recognized stock based compensation expense of $147,399 and $545,115 for the three months and nine months ended September 30, 2014, respectively. The stock based compensation for the three months and nine months ended September 30, 2013 was $188,763 and $1,187,717, respectively.

The following table presents information concerning stock option grants for the nine months ended September 30, 2014:

	Employees			Executives & Officers			Directors
Date of Grant	January – September 2014			January – September 2014			January - September 2014

Fair value of common stock on date of grant	$	1.66 - 2.20		$	1.22 - 2.20		$	1.22 - 2.20
Exercise price of the options	$	1.66 - 2.20		$	1.22- 2.20		$	1.22-2.20
Expected life of the options (years)		6.06			6.06 - 6.11			5.09 – 5.31
Dividend yield		0.00	%		0.00	%		0.00	%
Expected volatility		40.28- 41.72	%		40.69 - 41.70	%		38.64 - 38.68	%

Risk-free interest rate		1.91 - 2.11	%		1.85 - 2.11	%		1.53 – 1.75	%
Expected forfeiture per year (%)		10.00	%		10.00	%		10.00	%
Weighted average fair value of the options per unit	$	0.87		$	0.53		$	0.70

Options issued and outstanding as of September 30, 2014 and their activities during the nine months then ended are as follows:

	Number of Underlying Shares		Weighted- Average Exercise Price Per Share		Weighted- Average Contractual Life Remaining in Years		Aggregate Intrinsic Value
Outstanding as of January 1, 2014		2,282,719	$	4.43			$	282,063
Granted		2,081,669		1.53
Forfeited		(740,156)		4.36				21,540
Exercised		(160,000)		1.20				69,388
Outstanding as of September 30, 2014		3,464,232		3.10		8.21		117,267
Exercisable as of September 30, 2014		1,347,215		4.49		6.47		15,856
Vested and expected to vest (1)		3,190,856	$	3.17		8.11	$	108,485

(1) vested shares and unvested shares after a forfeiture rate is applied

At September 30, 2014, there were 2,117,017 unvested options outstanding that will vest over a weighted-average period of 2.98 years. The total estimated compensation expense to be recognized in connection with these options is $1,596,602.

Issuance of Restricted Common Stock and Stock Options for Directors’ and Executives’ Compensation

On October 10, 2013, the Company issued 24,510 shares of restricted stock with a grant date value of $50,000 or $2.04 per share to a new board member. On March 1, 2014, the Company agreed to issue 22,728 shares of restricted stock with a grant date value of $50,000 or $2.20 per share to a new board member. These share issuances were canceled in May 2014 in connection with a new compensation plan adopted by the Board of Directors for independent members of the Board and the grants were each replaced with $35,000 in cash payment.

On May 6, 2014, options to purchase a total of 15,000 shares of common stock, with exercise prices of $1.22 per share which was the fair market value on the date of grant, were also granted under the 2010 Plan to each of our four non-employee directors for service on the Board during the year following our 2014 annual meeting of stockholders. On that date, options to purchase 665,000 shares of stock, exercisable at $1.22 per share, which was the fair market value on the date of grant, were granted to senior officers under the 2010 Plan. The options granted to non- employee directors vest quarterly over one year and options granted to the senior officers vest quarterly over four years.

In May 2014, 200,000 stock options were granted outside the 2010 Plan to the Vice President of Clinical Research and Development. The options have an exercise price of $1.25, which was the fair market value on the date of grant, and vest 25% at the end of the first year and vest quarterly thereafter over the following three years.

In June 2014, 200,000 stock options were granted outside the 2010 Plan to the Senior Vice President of Global Regulatory Affairs and Quality Assurance. The options have an exercise price of $1.41, which is the fair market value on the date of grant, and vest 25% at the end of the first year and vest quarterly thereafter over the following three years.

In September 2014, 200,000 stock options were granted outside the 2010 Plan to the Senior Vice president of Operations as an inducement grant material to hiring a new employee in this position. The options have an exercise price of $1.86, which was the fair market value on the date of grant, and vest 25% at the end of the first year and vest quarterly thereafter over the following three years.

Stock Options and Incentive Plan

On September 28, 2010, the Board of Directors approved the adoption of the 2010 Stock Option and Incentive Plan, or the 2010 Plan, to provide for the grant of equity-based awards to employees, officers, non-employee directors and other key persons providing services to the Company. Awards of incentive options may be granted under the 2010 Plan until September 2020. No other awards may be granted under the 2010 Plan after the date that is 10 years from the date of stockholder approval. An aggregate of 1,000,000 shares were initially reserved for issuance in connection with awards granted under the 2010 Plan, such number of shares to be subject to adjustment as provided in the plan and in any award agreements entered into by the Company under the plan, and upon the exercise or conversion of any awards granted under the plan. On January 1, 2012, 450,275 shares were added to the 2010 Plan and on January 1, 2013, 516,774 shares were added to the 2010 Plan, and on January 1, 2014, 742,973 shares were added to the 2010 plan as provided under the terms of the 2010 Plan.

The Company granted options to purchase 2,081,669 shares of common stock to employees and directors and issued 160,000 shares of common stock in connection with the exercise of directors stock options during the nine months ended September 30, 2014. There are 329,426 options available for grant under the 2010 Plan as of September 30, 2014.

SUBSEQUENT EVENTS

9 Months Ended

Sep. 30, 2014

Subsequent Events [Abstract]

Subsequent Events [Text Block]

NOTE 13: SUBSEQUENT EVENTS

Management has evaluated subsequent events through November 12, 2014, the date which the condensed consolidated financial statements were available to be issued. All subsequent events requiring recognition as of September 30, 2014 have been incorporated into these condensed consolidated financial statements, there are no subsequent events that require disclosure in accordance with FASB ASC Topic 855, “Subsequent Events.”

SUMMARY OF ACCOUNTING POLICIES (Policies)

9 Months Ended

Sep. 30, 2014

Accounting Policies [Abstract]

Basis of Accounting, Policy [Policy Text Block]

Basis of Presentation:

Use of Estimates, Policy [Policy Text Block]

Use of Estimates:

New Accounting Pronouncements, Policy [Policy Text Block]

Recently Issued Accounting Pronouncements:

The Company has adopted all recently issued accounting pronouncements that management believes to be applicable to the Company.

Reclassification, Policy [Policy Text Block]

Reclassifications:

PREPAID EXPENSES (Tables)

9 Months Ended

Sep. 30, 2014

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Table Text Block]

Prepaid expenses consisted of the following:

	September 30, 2014		December 31, 2013
Tradeshow and other marketing events	$	150,000	$	-
Prepaid hardware and software		42,426		131,204
Prepaid insurance		36,800		112,517
Retainer and security deposits		29,500		36,906
Other		8,000		-
	$	266,726	$	280,627

FURNITURE AND EQUIPMENT (Tables)

9 Months Ended

Sep. 30, 2014

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment [Table Text Block]

Property, plant furniture and equipment consisted of the following:

	September 30, 2014		December 31, 2013
Machinery and equipment	$	429,355	$	326,824
Leasehold improvements		93,665		93,665
Capitalized new product development costs		-		15,000
Less: Accumulated depreciation		(179,728)		(114,050)
Less: Allowance for loss on impairment		(158,292)		(158,292)
Furniture and equipment, net	$	185,000	$	163,147

INTANGIBLE ASSETS (Tables)

9 Months Ended

Sep. 30, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Intangible Assets and Goodwill [Table Text Block]

Intangible assets consisted of the following:

	September 30,		December 31,
	2014		2013
Patents	$	4,794,853	$	4,794,853
Capitalized license costs		200,000		-
Software		190,817		105,839
Less: Accumulated amortization		(820,358)		(505,059)
	$	4,365,312	$	4,395,633

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block]

Future estimated amortization expenses as of September 30, 2014 for the five succeeding years is as follows:

For the Year Ending December 31,	Amounts
2014 (includes the remainder of the year)	$	110,215
2015		440,539
2016		433,277
2017		414,957
2018		393,990
Thereafter		2,572,334
	$	4,365,312

PAYROLL LIABILITIES (Tables)

9 Months Ended

Sep. 30, 2014

Payables and Accruals [Abstract]

Schedule of Accrued Liabilities [Table Text Block]

Payroll liabilities consisted of the following:

	September 30, 2014		December 31, 2013
Accrued bonus payable	$	566,185	$	408,362
Accrued payroll liabilities		102,892		48,232
Accrued payroll tax liabilities		13,279		19,883
	$	682,356	$	476,477

STOCKHOLDERS' EQUITY (Tables)

9 Months Ended

Sep. 30, 2014

Stockholders' Equity Note [Abstract]

Schedule of Stockholders' Equity Note, Warrants or Rights [Table Text Block]

As of September 30, 2014, warrants to purchase 6,033,426 shares of common stock are outstanding including:

	Outstanding Warrants to purchase shares	Exercise price		Expiration date

2011 private placement	4,252,050	$	1.25 - 1.60	June 23, 2016
Acueity warrants	325,000		5.00	September 30, 2017
2014 public offering	1,166,849		3.00	January 29, 2019
Placement agent fees for Company’s offerings	242,027		2.12 – 12.43	March - November, 2018
Outside consulting	47,500	$	4.24	January 14, 2018

Warrants 2014 and Placement Agent Warrants [Member]

Stockholders' Equity Note [Abstract]

Schedule of Fair Value of Warrants [Table Text Block]

The following tables reflect assumptions used to determine the fair value of the 2014 Warrants:

	Fair		January 29, 2014
	Value Hierarchy Level		2014 Investor Warrants			Placement Agent Warrants

Indexed shares				1,166,849			175,027
Exercise price			$	3.00		$	3.00

Significant assumptions:
Stock price		1	$	2.50		$	2.47
Remaining term		3		5 years			5 years
Risk free rate		2		1.45	%		1.42	%
Expected volatility		3		37.96	%		37.95	%

- Definition

Tabular disclosure of warrants or rights issued. Warrants and rights outstanding are derivative securities that give the holder the right to purchase securities (usually equity) from the issuer at a specific price within a certain time frame. Warrants are often included in a new debt issue to entice investors by a higher return potential. The main difference between warrants and call options is that warrants are issued and guaranteed by the company, whereas options are exchange instruments and are not issued by the company. Also, the lifetime of a warrant is often measured in years, while the lifetime of a typical option is measured in months. Disclose the title of issue of securities called for by warrants and rights outstanding, the aggregate amount of securities called for by warrants and rights outstanding, the date from which the warrants or rights are exercisable, and the price at which the warrant or right is exercisable.

+ References + Details

NET LOSS PER SHARE (Tables)

9 Months Ended

Sep. 30, 2014

Earnings Per Share [Abstract]

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block]

	Three Months Ended September 30,		Nine Months Ended September 30,
	2014	2013	2014	2013
Options to purchase common stock	3,464,232	2,246,651	3,464,232	2,246,651
Warrants to purchase common stock	6,033,426	4,775,550	6,033,426	4,775,550
Restricted stock units	-	-	-	-
	9,497,658	7,022,201	9,497,658	9,497,658

COMMITMENTS AND CONTINGENCIES (Tables)

9 Months Ended

Sep. 30, 2014

Commitments and Contingencies Disclosure [Abstract]

Operating Leases of Lessee Disclosure [Table Text Block]

The future minimum lease payments due subsequent to September 30, 2014 under all non-cancelable operating leases are as follows:

Year Ending December 31,	Amount
2014 (remainder of the year)	$	105,723
2015		480,007
2016		464,771
2017		105,894
Total minimum lease payments	$	1,156,395

- Definition

Tabular disclosure of a lessee's leasing arrangements including: (1) the basis on which contingent rental payments are determined, (2) the existence and terms of renewal or purchase options and escalation clauses, (3) restrictions imposed by lease arrangements, such as those concerning dividends, additional debt, and further leasing, (4) rent holidays, rent concessions, or leasehold improvement incentives and unusual provisions or conditions. Disclosure may also include the specific period used to amortize material leasehold improvements made at the inception of the lease or during the lease term. Additionally, for operating leases having initial or remaining noncancelable lease terms in excess of one year: (a) future minimum rental payments required as of the date of the latest balance sheet presented, in the aggregate and for each of the five succeeding fiscal years, (b) the total of minimum rentals to be received in the future under noncancelable subleases as of the date of the latest balance sheet presented, and (c) for all operating leases, rental expense for each period for which an income statement is presented, with separate amounts for minimum rentals, contingent rentals, and sublease rentals. Rental payments under leases with terms of a month or less that were not renewed need not be included.

+ References + Details

STOCK BASED COMPENSATION (Tables)

9 Months Ended

Sep. 30, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]

The following table presents information concerning stock option grants for the nine months ended September 30, 2014:

	Employees			Executives & Officers			Directors
Date of Grant	January – September 2014			January – September 2014			January - September 2014

Fair value of common stock on date of grant	$	1.66 - 2.20		$	1.22 - 2.20		$	1.22 - 2.20
Exercise price of the options	$	1.66 - 2.20		$	1.22- 2.20		$	1.22-2.20
Expected life of the options (years)		6.06			6.06 - 6.11			5.09 – 5.31
Dividend yield		0.00	%		0.00	%		0.00	%
Expected volatility		40.28- 41.72	%		40.69 - 41.70	%		38.64 - 38.68	%

Risk-free interest rate		1.91 - 2.11	%		1.85 - 2.11	%		1.53 – 1.75	%
Expected forfeiture per year (%)		10.00	%		10.00	%		10.00	%
Weighted average fair value of the options per unit	$	0.87		$	0.53		$	0.70

Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]

Options issued and outstanding as of September 30, 2014 and their activities during the nine months then ended are as follows:

	Number of Underlying Shares		Weighted- Average Exercise Price Per Share		Weighted- Average Contractual Life Remaining in Years		Aggregate Intrinsic Value
Outstanding as of January 1, 2014		2,282,719	$	4.43			$	282,063
Granted		2,081,669		1.53
Forfeited		(740,156)		4.36				21,540
Exercised		(160,000)		1.20				69,388
Outstanding as of September 30, 2014		3,464,232		3.10		8.21		117,267
Exercisable as of September 30, 2014		1,347,215		4.49		6.47		15,856
Vested and expected to vest (1)		3,190,856	$	3.17		8.11	$	108,485

(1) vested shares and unvested shares after a forfeiture rate is applied

NATURE OF OPERATIONS (Details Textual) - USD ($)	9 Months Ended
NATURE OF OPERATIONS (Details Textual) - USD ($)	Sep. 30, 2012	May 19, 2014
Nature Of Operations [Line Items]
Cash Acquired from Acquisition	$ 400,000
Stock Issued During Period, Shares, Acquisitions	862,500
Share Price	$ 5.00
Warrants Issued During Period Acquisitions	325,000
Warrant Price	$ 2.3457
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 5.00	$ 15.00

PREPAID EXPENSES (Details) - USD ($)	Sep. 30, 2014	Dec. 31, 2013
Deferred Costs, Capitalized, Prepaid, and Other Assets [Line Items]
Tradeshow and other marketing events	$ 150,000	$ 0
Prepaid hardware and software	42,426	131,204
Prepaid insurance	36,800	112,517
Retainer and security deposits	29,500	36,906
Other	8,000	0
Prepaid expense	$ 266,726	$ 280,627

FURNITURE AND EQUIPMENT (Details) - USD ($)	Sep. 30, 2014	Dec. 31, 2013
Property, Plant and Equipment [Line Items]
Machinery and equipment	$ 429,355	$ 326,824
Leasehold improvements	93,665	93,665
Capitalized new product development costs	0	15,000
Less: Accumulated depreciation	(179,728)	(114,050)
Less: Allowance for loss on impairment	(158,292)	(158,292)
Furniture and equipment, net	$ 185,000	$ 163,147

FURNITURE AND EQUIPMENT (Details Textual) - USD ($)	3 Months Ended		9 Months Ended
FURNITURE AND EQUIPMENT (Details Textual) - USD ($)	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Property, Plant and Equipment [Line Items]
Depreciation	$ 24,643	$ 27,165	$ 65,678	$ 62,849

INTANGIBLE ASSETS (Details) - USD ($)	Sep. 30, 2014	Dec. 31, 2013
Finite-Lived Intangible Assets [Line Items]
Patents	$ 4,794,853	$ 4,794,853
Capitalized license costs	200,000	0
Software	190,817	105,839
Less: Accumulated amortization	(820,358)	(505,059)
Intangible assets, net	$ 4,365,312	$ 4,395,633

INTANGIBLE ASSETS (Details 1) - USD ($)	Sep. 30, 2014	Dec. 31, 2013
Finite-Lived Intangible Assets [Line Items]
2014 (includes the remainder of the year)	$ 110,215
2015	440,539
2016	433,277
2017	414,957
2018	393,990
Thereafter	2,572,334
Intangible assets, net	$ 4,365,312	$ 4,395,633

INTANGIBLE ASSETS (Details Textual) - USD ($)	3 Months Ended		9 Months Ended
INTANGIBLE ASSETS (Details Textual) - USD ($)	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Computer Software, Intangible Asset [Member]
Finite-Lived Intangible Assets [Line Items]
Amortization of Intangible Assets	$ 4,913	$ 5,730	$ 22,436	$ 15,322
Finite-lived Intangible Assets Acquired			$ 70,400
Finite-Lived Intangible Asset, Useful Life			3 years
Patents [Member]
Finite-Lived Intangible Assets [Line Items]
Amortization of Intangible Assets	93,497	$ 90,977	$ 281,196	$ 272,992
Patents [Member] \| Minimum [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Asset, Useful Life			9 years
Patents [Member] \| Maximum [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-Lived Intangible Asset, Useful Life			14 years
Laboratory software [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-lived Intangible Assets Acquired			$ 58,000
Newly developed website [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-lived Intangible Assets Acquired			31,500
Software License Arrangement [Member]
Finite-Lived Intangible Assets [Line Items]
Amortization of Intangible Assets	$ 5,000		$ 11,667

PAYROLL LIABILITIES (Details) - USD ($)	Sep. 30, 2014	Dec. 31, 2013
Payroll Liabilities [Line Items]
Accrued bonus payable	$ 566,185	$ 408,362
Accrued payroll liabilities	102,892	48,232
Accrued payroll tax liabilities	13,279	19,883
Payroll liabilities	$ 682,356	$ 476,477

STOCKHOLDERS' EQUITY (Details) - $ / shares	1 Months Ended
STOCKHOLDERS' EQUITY (Details) - $ / shares	Jan. 29, 2014	Sep. 30, 2012
Significant assumptions:
Stock price		$ 5.00
Placement Agent Warrants [Member]
Share Based Payment Award Stock Warrants Valuation Assumptions [Line Items]
Indexed shares	175,027
Exercise price	$ 3.00
Placement Agent Warrants [Member] \| Fair Value, Inputs, Level 3 [Member]
Significant assumptions:
Remaining term	5 years
Expected volatility	37.95%
Placement Agent Warrants [Member] \| Fair Value, Inputs, Level 2 [Member]
Significant assumptions:
Risk free rate	1.42%
Placement Agent Warrants [Member] \| Fair Value, Inputs, Level 1 [Member]
Significant assumptions:
Stock price	$ 2.47
Investor Warrants 2014 [Member]
Share Based Payment Award Stock Warrants Valuation Assumptions [Line Items]
Indexed shares	1,166,849
Exercise price	$ 3.00
Investor Warrants 2014 [Member] \| Fair Value, Inputs, Level 3 [Member]
Significant assumptions:
Remaining term	5 years
Expected volatility	37.96%
Investor Warrants 2014 [Member] \| Fair Value, Inputs, Level 2 [Member]
Significant assumptions:
Risk free rate	1.45%
Investor Warrants 2014 [Member] \| Fair Value, Inputs, Level 1 [Member]
Significant assumptions:
Stock price	$ 2.50

STOCKHOLDERS' EQUITY (Details 1) - $ / shares	9 Months Ended
STOCKHOLDERS' EQUITY (Details 1) - $ / shares	Sep. 30, 2014	May 19, 2014	Jan. 29, 2014	Sep. 30, 2012
Class of Warrant or Right [Line Items]
Class of Warrant or Right, Exercise Price of Warrants or Rights		$ 15.00		$ 5.00
2011 Private Placement [Member]
Class of Warrant or Right [Line Items]
Class of Warrant or Right, Outstanding	4,252,050
Class of Warrant or Right, Date from which Warrants or Rights Exercisable	Jun. 23, 2016
2011 Private Placement [Member] \| Maximum [Member]
Class of Warrant or Right [Line Items]
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 1.60
2011 Private Placement [Member] \| Minimum [Member]
Class of Warrant or Right [Line Items]
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 1.25
Acuiety Warrants [Member]
Class of Warrant or Right [Line Items]
Class of Warrant or Right, Outstanding	325,000
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 5.00
Class of Warrant or Right, Date from which Warrants or Rights Exercisable	Sep. 30, 2017
2014 Public Offering [Member]
Class of Warrant or Right [Line Items]
Class of Warrant or Right, Outstanding	1,166,849
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 3.00		$ 3.00
Class of Warrant or Right, Date from which Warrants or Rights Exercisable	Jan. 29, 2019
Placement Agent Fee [Member]
Class of Warrant or Right [Line Items]
Class of Warrant or Right, Outstanding	242,027
Placement Agent Fee [Member] \| Maximum [Member]
Class of Warrant or Right [Line Items]
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 12.43
Class of Warrant or Right, Date from which Warrants or Rights Exercisable	Nov. 01, 2018
Placement Agent Fee [Member] \| Minimum [Member]
Class of Warrant or Right [Line Items]
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 2.12
Class of Warrant or Right, Date from which Warrants or Rights Exercisable	Mar. 01, 2018
outside consulting firm [Member]
Class of Warrant or Right [Line Items]
Class of Warrant or Right, Outstanding	47,500
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 4.24
Class of Warrant or Right, Date from which Warrants or Rights Exercisable	Jan. 14, 2018

STOCKHOLDERS' EQUITY (Details Textual) - USD ($)	1 Months Ended	9 Months Ended
STOCKHOLDERS' EQUITY (Details Textual) - USD ($)	Jan. 29, 2014	Sep. 30, 2014	May 19, 2014	Dec. 31, 2013	Sep. 30, 2012
Stockholder's Equity [Line Items]
Total Shares Authorized		85,000,000
Common Stock, Shares Authorized		75,000,000		75,000,000
Common Stock, Par or Stated Value Per Share (in dollars per share)		$ 0.001		$ 0.001
Preferred Stock, Shares Authorized		10,000,000		10,000,000
Preferred Stock, Par or Stated Value Per Share (in dollars per share)		$ 0.001		$ 0.001
Class of Warrant or Right, Number of Securities Called by Warrants or Rights		6,033,426
Class of Warrant or Right, Exercise Price of Warrants or Rights			$ 15.00		$ 5.00
Percentage of Common Stock Outstanding			2.00%
Entitled to Receive Worth of Common Stock			$ 30.00
Series A Preferred Stock [Member]
Stockholder's Equity [Line Items]
Preferred Stock, Shares Authorized		750,000
Preferred Stock, Par or Stated Value Per Share (in dollars per share)		$ 0.001
2014 Public Offering [Member]
Stockholder's Equity [Line Items]
Shares, Issued	5,834,234
Shares Issued, Price Per Share	$ 2.40
Proceeds from Issuance Initial Public Offering	$ 14,000,000
Stockholders Equity Note, Stock Split		Each unit consists of one share of common stock and a warrant to purchase 0.20 of a share of common stock (the “2014 Investor Warrants”).
Warrants Callable Per Share	$ 6.00
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 3.00	$ 3.00
Acuiety Warrants [Member]
Stockholder's Equity [Line Items]
Class of Warrant or Right, Exercise Price of Warrants or Rights		5.00
outside consulting firm [Member]
Stockholder's Equity [Line Items]
Class of Warrant or Right, Exercise Price of Warrants or Rights		$ 4.24
Investor Warrants 2014 [Member]
Stockholder's Equity [Line Items]
Option Indexed To Issuer's Equity, Indexed Shares	1,166,849
Securities Purchase Agreements, Investor Warrants [Member]
Stockholder's Equity [Line Items]
Fair Value of Warrants (in dollars per warrant)	$ 0.72
Initial Fair Value of Warrants	$ 834,986
Placement Agent Warrants [Member]
Stockholder's Equity [Line Items]
Option Indexed To Issuer's Equity, Indexed Shares	175,027
Placement Agent [Member]
Stockholder's Equity [Line Items]
Cash Fee Equals to Percentage of Gross Proceeds from Sale of Common Stock and Warrants		7.00%
Fees and Commissions, Other	$ 980,151
Placement Agent [Member] \| Warrant [Member]
Stockholder's Equity [Line Items]
Exercise Price of Common Stock		$ 3.00
Fair Value of Warrants (in dollars per warrant)	$ 0.70
Initial Fair Value of Warrants	$ 121,707
Option Indexed To Issuer's Equity, Indexed Shares	175,027
Percentage of Shares Sold in Offering	3.00%
Minimum [Member] \| 2011 Private Placement [Member]
Stockholder's Equity [Line Items]
Class of Warrant or Right, Exercise Price of Warrants or Rights		1.25
Maximum [Member] \| 2011 Private Placement [Member]
Stockholder's Equity [Line Items]
Class of Warrant or Right, Exercise Price of Warrants or Rights		$ 1.60
Beneficial Owner [Member]
Stockholder's Equity [Line Items]
Equity Method Investment, Ownership Percentage			15.00%

NET LOSS PER SHARE (Details) - shares	3 Months Ended		9 Months Ended
NET LOSS PER SHARE (Details) - shares	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	9,497,658	7,022,201	9,497,658	9,497,658
Equity Option [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	3,464,232	2,246,651	3,464,232	2,246,651
Warrant [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	6,033,426	4,775,550	6,033,426	4,775,550
Restricted Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	0	0	0	0

CONCENTRATION OF CREDIT RISK (Details Textual) - USD ($)	Sep. 30, 2014	Dec. 31, 2013
Concentration Risk [Line Items]
Cash, FDIC Insured Amount	$ 250,000
Cash, Uninsured Amount	$ 11,124,251	$ 6,092,161

COMMITMENTS AND CONTINGENCIES (Details)	Sep. 30, 2014 USD ($)
Operating Leased Assets [Line Items]
2014 (remainder of the year)	$ 105,723
2015	480,007
2016	464,771
2017	105,894
Total minimum lease payments	$ 1,156,395

COMMITMENTS AND CONTINGENCIES (Details Textual) - USD ($)		1 Months Ended	3 Months Ended			9 Months Ended		12 Months Ended
	Sep. 02, 2014	Sep. 30, 2014	Sep. 30, 2014	Mar. 31, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Dec. 31, 2013
COMMITMENTS AND CONTINGENCIES [Line Items]
Cost of Services			$ 0		$ 25,938	$ 0	$ 75,893
Health Care Organization, Medical Supplies and Drugs Expense		$ 162,600
Research and Development Expense, Total			923,169		321,111	1,856,439	731,258
Targeted Medical Education [Member] \| Master Service Agreement [Member]
COMMITMENTS AND CONTINGENCIES [Line Items]
Research and Development Expense, Total						100,000
A5 Genetics KFT [Member]
COMMITMENTS AND CONTINGENCIES [Line Items]
Cost of Services, Licenses and Services								$ 100,000
Additional License Fee Amount Paid				$ 100,000
Additional License Fee Obligation Amount				1,200,000
Royalty Expense				50
Cost of Services				$ 65
Affymetrix In [Member] \| OwnerChip Program Agreement [Member] \| Subsidiaries [Member]
COMMITMENTS AND CONTINGENCIES [Line Items]
Payments for Software							21,590	$ 94,723
Purchase Obligation		$ 142,005	$ 142,005		647,700	$ 142,005	647,700
Contract Receivable, Due in Rolling Year Two					$ 51,600		$ 51,600
NRLBH [Member]
COMMITMENTS AND CONTINGENCIES [Line Items]
Minimum Purchase Under License Agreement to Acquire Right	$ 452,408

STOCK BASED COMPENSATION (Details) - Stock Option [Member] - $ / shares		9 Months Ended
	May 06, 2014	Sep. 30, 2014
Employees [Member]
Share Based Payment Award Stock Options Valuation Assumption [Line Items]
Expected life of the options (years)		6 years 22 days
Dividend yield		0.00%
Expected forfeiture per year (%)		10.00%
Weighted-average fair value of the options (per unit)		$ 0.87
Employees [Member] \| Minimum [Member]
Share Based Payment Award Stock Options Valuation Assumption [Line Items]
Fair value of common stock on date of grant		1.66
Exercise price of the options		$ 1.66
Expected volatility		40.28%
Risk-free interest rate		1.91%
Employees [Member] \| Maximum [Member]
Share Based Payment Award Stock Options Valuation Assumption [Line Items]
Fair value of common stock on date of grant		$ 2.20
Exercise price of the options		$ 2.20
Expected volatility		41.72%
Risk-free interest rate		2.11%
Employees and Officers [Member]
Share Based Payment Award Stock Options Valuation Assumption [Line Items]
Dividend yield		0.00%
Expected forfeiture per year (%)		10.00%
Weighted-average fair value of the options (per unit)		$ 0.53
Employees and Officers [Member] \| Minimum [Member]
Share Based Payment Award Stock Options Valuation Assumption [Line Items]
Fair value of common stock on date of grant		1.22
Exercise price of the options		$ 1.22
Expected life of the options (years)		6 years 22 days
Expected volatility		40.69%
Risk-free interest rate		1.85%
Employees and Officers [Member] \| Maximum [Member]
Share Based Payment Award Stock Options Valuation Assumption [Line Items]
Fair value of common stock on date of grant		$ 2.20
Exercise price of the options		$ 2.20
Expected life of the options (years)		6 years 1 month 10 days
Expected volatility		41.70%
Risk-free interest rate		2.11%
Directors [Member]
Share Based Payment Award Stock Options Valuation Assumption [Line Items]
Fair value of common stock on date of grant	$ 1.22
Directors [Member]
Share Based Payment Award Stock Options Valuation Assumption [Line Items]
Dividend yield		0.00%
Expected forfeiture per year (%)		10.00%
Weighted-average fair value of the options (per unit)		$ 0.70
Directors [Member] \| Minimum [Member]
Share Based Payment Award Stock Options Valuation Assumption [Line Items]
Fair value of common stock on date of grant		1.22
Exercise price of the options		$ 1.22
Expected life of the options (years)		5 years 1 month 2 days
Expected volatility		38.64%
Risk-free interest rate		1.53%
Directors [Member] \| Maximum [Member]
Share Based Payment Award Stock Options Valuation Assumption [Line Items]
Fair value of common stock on date of grant		$ 2.20
Exercise price of the options		$ 2.20
Expected life of the options (years)		5 years 3 months 22 days
Expected volatility		38.68%
Risk-free interest rate		1.75%

STOCK BASED COMPENSATION (Details 1) - USD ($)

9 Months Ended

Sep. 30, 2014

Share Based Compensation Stock Options Activity [Line Items]

Number of Underlying Shares, Outstanding as of January 1, 2014 (in shares)

2,282,719

Number of Underlying Shares, Granted (in shares)

2,081,669

Number of Underlying Shares, Forfeited (in shares)

(740,156)

Number of Underlying Shares, Exercised (in shares)

(160,000)

Number of Underlying Shares, Outstanding as of September 30, 2014 (in shares)

3,464,232

Number of Underlying Shares, Exercisable as of September 30, 2014 (in shares)

1,347,215

Number of Underlying Shares, Vested and expected to vest (in shares)

^[1]

3,190,856

Weighted-Average Exercise Price Per Share, Outstanding as of January 1, 2014 (in dollars per share)

$ 4.43

Weighted-Average Exercise Price Per Share, Granted (in dollars per share)

1.53

Weighted-Average Exercise Price Per Share, Forfeited (in dollars per share)

4.36

Weighted-Average Exercise Price Per Share, Exercised (in dollars per share)

1.20

Weighted-Average Exercise Price Per Share, Outstanding as of September 30, 2014 (in dollars per share)

3.10

Weighted-Average Exercise Price Per Share, Exercisable as of September 30, 2014 (in dollars per share)

4.49

Weighted-Average Exercise Price Per Share, Vested and expected to vest (in dollars per share)

^[1]

$ 3.17

Weighted-Average Contractual Life Remaining in Years, Outstanding as of September 30, 2014

8 years 2 months 16 days

Weighted-Average Contractual Life Remaining in Years, Exercisable as of as of September 30, 2014

6 years 5 months 19 days

Weighted-Average Contractual Life Remaining in Years, Vested and expected to vest

^[1]

8 years 1 month 10 days

Aggregate Intrinsic Value, Outstanding as of January 1, 2014

$ 282,063

Aggregate Intrinsic Value, Forfeited (in dollars)

21,540

Aggregate Intrinsic Value, Exercised (in dollars)

69,388

Aggregate Intrinsic Value, Outstanding as of September 30, 2014

117,267

Aggregate Intrinsic Value, Exercisable as of September 30, 2014

15,856

Aggregate Intrinsic Value, Vested and expected to vest (1)

^[1]

$ 108,485

[1]	vested shares and unvested shares after a forfeiture rate is applied

STOCK BASED COMPENSATION (Details Textual) - USD ($)			1 Months Ended				3 Months Ended		9 Months Ended
STOCK BASED COMPENSATION (Details Textual) - USD ($)	May 06, 2014	Oct. 10, 2013	Sep. 30, 2014	Jun. 30, 2014	May 31, 2014	Mar. 20, 2014	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Dec. 31, 2013	Dec. 31, 2012	Sep. 28, 2010
Stock-based Compensation [Line Items]
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price									$ 1.53
Stock Issued During Period, Shares, Restricted Stock Award, Gross		24,510				22,728
Stock Issued During Period, Value, Restricted Stock Award, Gross		$ 50,000				$ 50,000
Share-based Compensation							$ 147,399	$ 188,763	$ 545,115	$ 1,187,717
Directors Compensation Paid					$ 35,000
Share-Based Compensation Arrangement By Share-Based Payment Award, Options, Grants In Period, Gross									2,081,669
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period									2 years 11 months 23 days
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Number of Shares			2,117,017				2,117,017		2,117,017
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized			$ 1,596,602				$ 1,596,602		$ 1,596,602
Stock Option and Incentive Plan 2010 [Member]
Stock-based Compensation [Line Items]
Shares held in Employee Stock Option Plan, Suspense Shares			742,973				742,973		742,973		516,774	450,275	1,000,000
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant			329,426				329,426		329,426
Stock Issued During Period, Shares, Share-based Compensation, Net of Forfeitures									160,000
Stock Options Were Granted Outside Of 2010 Plan [Member]
Stock-based Compensation [Line Items]
Share-Based Compensation Arrangement By Share-Based Payment Award, Options, Grants In Period, Gross			200,000	200,000	200,000
Share-Based Compensation Arrangement By Share-Based Payment Award, Options, Grants In Period, Weighted Average Grant Date Fair Value			$ 1.86	$ 1.41	$ 1.25
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights			vest 25% at the end of the first year and vest quarterly thereafter over the following three years.	vest 25% at the end of the first year and vest quarterly thereafter over the following three years.	vest 25% at the end of the first year and vest quarterly thereafter over the following three years.
Restricted Stock [Member]
Stock-based Compensation [Line Items]
Share-based Compensation Arrangements by Share-based Payment Award, Options, Grants in Period, Weighted Average Exercise Price		$ 2.04				$ 2.20
Employees and Officers [Member] \| Stock Option Two [Member] \| Minimum [Member]
Stock-based Compensation [Line Items]
Share-Based Compensation Arrangement By Share-Based Payment Award, Options, Grants In Period, Weighted Average Grant Date Fair Value									$ 1.22
Employees and Officers [Member] \| Stock Option Two [Member] \| Maximum [Member]
Stock-based Compensation [Line Items]
Share-Based Compensation Arrangement By Share-Based Payment Award, Options, Grants In Period, Weighted Average Grant Date Fair Value									2.20
Non-Employee Director [Member]
Stock-based Compensation [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	1 year
Non-Employee Director [Member] \| Stock Option One [Member]
Stock-based Compensation [Line Items]
Share-Based Compensation Arrangement By Share-Based Payment Award, Options, Grants In Period, Gross	15,000
Share-Based Compensation Arrangement By Share-Based Payment Award, Options, Grants In Period, Weighted Average Grant Date Fair Value	$ 1.22
Non-Employee Director [Member] \| Stock Option Three [Member] \| Minimum [Member]
Stock-based Compensation [Line Items]
Share-Based Compensation Arrangement By Share-Based Payment Award, Options, Grants In Period, Weighted Average Grant Date Fair Value									1.22
Non-Employee Director [Member] \| Stock Option Three [Member] \| Maximum [Member]
Stock-based Compensation [Line Items]
Share-Based Compensation Arrangement By Share-Based Payment Award, Options, Grants In Period, Weighted Average Grant Date Fair Value									$ 2.20
Senior Officers [Member]
Stock-based Compensation [Line Items]
Share-Based Compensation Arrangement By Share-Based Payment Award, Options, Grants In Period, Gross	665,000
Share-Based Compensation Arrangement By Share-Based Payment Award, Options, Grants In Period, Weighted Average Grant Date Fair Value	$ 1.22
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	4 years