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Document And Entity Information

v2.4.0.8
Document And Entity Information
9 Months Ended
Sep. 30, 2014
Nov. 13, 2014
Document Information [Line Items]    
Document Type 10-Q  
Amendment Flag false  
Document Period End Date Sep. 30, 2014  
Document Fiscal Year Focus 2014  
Document Fiscal Period Focus Q3  
Entity Registrant Name ProPhase Labs, Inc.  
Entity Central Index Key 0000868278  
Current Fiscal Year End Date --12-31  
Entity Filer Category Smaller Reporting Company  
Trading Symbol PRPH  
Entity Common Stock, Shares Outstanding   15,463,969

Condensed Consolidated Balance Sheets

v2.4.0.8
Condensed Consolidated Balance Sheets (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2014
Dec. 31, 2013
ASSETS    
Cash and cash equivalents (Note 2) $ 4,953 $ 1,638
Accounts receivable, net 4,051 5,319
Inventory (Note 2) 4,180 2,521
Prepaid expenses and other current assets 2,252 1,801
Total current assets 15,436 11,279
Property, plant and equipment, net of accumulated depreciation and amortization of $4,266 and $4,064, respectively (Note 2) 2,484 2,564
Intangible asset, licensed technology (Note 6) 0 3,577
Total assets 17,920 17,420
LIABILITIES:    
Accounts payable 2,108 1,011
Accrued advertising and other allowances 3,166 2,847
Other current liabilities 1,908 766
Total current liabilities 7,182 4,624
Other long term obligations (Note 3) 200 200
Commitments and contingencies (Note 3)      
STOCKHOLDERS' EQUITY:    
Common Stock, $.0005 par value; authorized 50,000,000; issued: 24,696,786 and 21,437,059 shares, respectively (Note 4) 12 11
Additional paid-in-capital 53,811 43,607
Accumulated deficit (12,543) (5,385)
Treasury stock, at cost 9,232,817 and 5,336,053 shares, respectively (30,742) (25,637)
Total stockholders' equity 10,538 12,596
Total liabilities and stockholders' equity $ 17,920 $ 17,420

Condensed Consolidated Balance Sheets [Parenthetical]

v2.4.0.8
Condensed Consolidated Balance Sheets [Parenthetical] (USD $)
In Thousands, except Share data, unless otherwise specified
Sep. 30, 2014
Dec. 31, 2013
Accumulated depreciation (in dollars) $ 4,266 $ 4,064
Common Stock, par value (in dollars per share) $ 0.0005 $ 0.0005
Common Stock, shares authorized 50,000,000 50,000,000
Common Stock, shares issued 24,696,786 21,437,059
Treasury stock, shares (in shares) 9,232,817 5,336,053

Condensed Consolidated Statements of Operations

v2.4.0.8
Condensed Consolidated Statements of Operations (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2014
Sep. 30, 2013
Net sales (Note 2) $ 5,130 $ 5,949 $ 13,098 $ 15,430
Cost of sales (Note 2) 1,620 2,132 4,816 5,346
Gross profit 3,510 3,817 8,282 10,084
Operating expenses:        
Sales and marketing 875 1,091 4,724 5,163
Administration 1,917 1,306 6,228 4,521
Research and development 356 181 907 586
Impairment charge 3,577 0 3,577 0
Total operating expense 6,725 2,578 15,436 10,270
Income (loss) from operations (3,215) 1,239 (7,154) (186)
Interest income 1 0 3 2
Interest expense (2) (3) (7) (9)
Income (loss) before income tax (3,216) 1,236 (7,158) (193)
Income tax (Note 5) 0 0 0 0
Net income (loss) $ (3,216) $ 1,236 $ (7,158) $ (193)
Basic income (loss) per share:        
Net income (loss) (in dollors per share) $ (0.18) $ 0.08 $ (0.42) $ (0.01)
Diluted income (loss) per share:        
Net income (loss) (in dollors per share) $ (0.18) $ 0.08 $ (0.42) $ (0.01)
Weighted average common shares outstanding:        
Basic (in shares) 18,208 15,860 17,216 15,819
Diluted (in shares) 18,208 16,307 17,216 15,819

Condensed Consolidated Statements of Stockholders' Equity

v2.4.0.8
Condensed Consolidated Statements of Stockholders' Equity (USD $)
In Thousands, except Share data
Total
Common Stock [Member]
Additional Paid-in Capital [Member]
Retained Earnings (Deficit) [Member]
Treasury Stock [Member]
Balance at Dec. 31, 2013 $ 12,596 $ 11 $ 43,607 $ (5,385) $ (25,637)
Balance (in shares) at Dec. 31, 2013   16,101,006      
Net loss (7,158) 0 0 (7,158) 0
Share-based compensation expense (Note 4) 191 0 191 0 0
Treasury stock acquired pursuant to a settlement agreement (Note 4) 0 0 5,105 0 (5,105)
Treasury stock acquired pursuant to a settlement agreement (Note 4) (in shares)   (3,896,764)      
Common shares issued (Note 4) 4,909 1 4,908 0 0
Common shares issued (Note 4) (in shares)   3,259,727      
Balance at Sep. 30, 2014 $ 10,538 $ 12 $ 53,811 $ (12,543) $ (30,742)
Balance (in shares) at Sep. 30, 2014   15,463,969      

Condensed Consolidated Statements of Cash Flows

v2.4.0.8
Condensed Consolidated Statements of Cash Flows (USD $)
In Thousands, unless otherwise specified
9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Cash flows from operating activities:    
Net loss $ (7,158) $ (193)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:    
Depreciation and amortization 202 178
Share-based compensation expense 191 146
Impairment charge 3,577 0
Gain on sale of equipment (6) 0
Changes in operating assets and liabilities:    
Accounts receivable 1,268 964
Inventory (1,659) (1,222)
Accounts payable 1,097 2
Accrued advertising and other allowances 319 (67)
Other operating assets and liabilities, net 691 473
Net cash provided by (used in) operating activities (1,478) 281
Cash flows from investing activities:    
Capital expenditures (122) (324)
Proceeds from the sale of equipment 6 0
Net cash used in investing activities (116) (324)
Cash flows from financing activities:    
Proceeds from the exercise of stock options 0 27
Proceeds from issuance of common stock 4,909 195
Net cash provided by financing activities 4,909 222
Net increase in cash and cash equivalents 3,315 179
Cash and cash equivalents at beginning of period 1,638 572
Cash and cash equivalents at end of period 4,953 751
Supplemental disclosure of cash flow information:    
Treasury stock acquired pursuant to a settlement agreement $ 5,105 $ 0

Organization and Business

v2.4.0.8
Organization and Business
9 Months Ended
Sep. 30, 2014
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]
Note 1 – Organization and Business
 
ProPhase Labs, Inc. (“we”, “us” or the “Company”), organized under the laws of the State of Nevada, is a manufacturer, marketer and distributor of a diversified range of homeopathic and health products that are offered to the general public. We are also engaged in the research and development of potential over-the-counter (“OTC”) drug, natural base health products along with supplement, personal care and cosmeceutical products.
 
Our primary business is the manufacture, distribution, marketing and sale of OTC cold remedy products to consumers through national chain, regional, specialty and local retail stores. Our flagship brand is Cold-EEZEÒCold Remedy and our principal product is Cold-EEZEÒ Cold Remedy zinc gluconate lozenges, proven in clinical studies to reduce the duration of the common cold. In addition to Cold-EEZE® Cold Remedy lozenges, we market and distribute non-lozenge forms of our proprietary zinc gluconate formulation, (i) Cold-EEZE® Cold Remedy QuickMelts® and (ii) Cold-EEZE® Cold Remedy Oral Spray. Cold-EEZE® Cold Remedy Oral Spray is a liquid form of our zinc gluconate formulation that is sprayed in the mouth. Cold-EEZE® Cold Remedy QuickMelts® are fast dissolving tablets that are taken orally. Cold-EEZEÒ Cold Remedy is an established product in the health care and cold remedy market. For the three and nine months ended September 30, 2014 and 2013, we operated in one reporting segment and our revenues have come principally from our OTC cold remedy products.
 
We use a December 31 year-end for financial reporting purposes. References herein to the fiscal year ended December 31, 2014 shall be the term “Fiscal 2014” and references to other “Fiscal” years shall mean the year, which ended on December 31 of the year indicated. The term “we”, “us” or the “Company” as used herein also refer, where appropriate, to the Company, together with its subsidiaries unless the context otherwise requires.

Summary of Significant Accounting Policies

v2.4.0.8
Summary of Significant Accounting Policies
9 Months Ended
Sep. 30, 2014
Accounting Policies [Abstract]  
Significant Accounting Policies [Text Block]
Note 2 – Summary of Significant Accounting Policies
 
Basis of Presentation 
The unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial statements and within the rules of the Securities and Exchange Commission (“SEC”) applicable to interim financial statements and therefore do not include all disclosures that might normally be required for financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The accompanying unaudited condensed consolidated financial statements have been prepared by management without audit and should be read in conjunction with our consolidated financial statements, including the notes thereto, appearing in our Annual Report on Form 10-K for the year ended December 31, 2013. In the opinion of management, all adjustments necessary for a fair presentation of the consolidated financial position, consolidated results of operations and consolidated cash flows, for the periods indicated, have been made. The results of operations for the nine months ended September 30, 2014 are not necessarily indicative of operating results that may be achieved over the course of the full year. Certain amounts for the three months and nine months ended September 30, 2013 have been reclassified to conform with the three months and nine months ended September 30, 2014 presentations.
 
Seasonality of the Business   
Our net sales are derived principally from our OTC cold remedy products. Currently, our sales are influenced by and subject to fluctuations in the timing of purchase and the ultimate level of demand for our products which are a function of the timing, length and severity of each cold season. Generally, a cold season is defined as the period of September to March when the incidence of the common cold rises as a consequence of the change in weather and other factors. We generally experience in the third and fourth quarter higher levels of net sales along with a corresponding increase in marketing and advertising expenditures designed to promote our products during the cold season. Revenues and related marketing costs are generally at their lowest levels in the second quarter when consumer demand generally declines. We track health and wellness trends and develop retail promotional strategies to align our production scheduling, inventory management and marketing programs to optimize consumer purchases.
   
Use of Estimates
The preparation of financial statements and the accompanying notes thereto, in conformity with GAAP, requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the respective reporting periods. Examples include the provision for bad debt, sales returns and allowances, inventory obsolescence, useful lives of property and equipment and intangible assets, impairment of property and equipment and intangible assets, income tax valuations and assumptions related to accrued advertising. When providing for the appropriate sales returns, allowances, cash discounts and cooperative incentive promotion costs (“Sales Allowances”), we apply a uniform and consistent method for making certain assumptions for estimating these provisions. These estimates and assumptions are based on historical experience, current trends and other factors that management believes to be relevant at the time the financial statements are prepared. Management reviews the accounting policies, assumptions, estimates and judgments on a quarterly basis. Actual results could differ from those estimates.
 
Our primary product, Cold-EEZEÒCold Remedy lozenges, utilizes a proprietary zinc gluconate formulation which has been clinically proven to reduce the severity and duration of common cold symptoms. Factors considered in estimating the appropriate sales returns and allowances for this product include it being (i) a unique product with limited competitors, (ii) competitively priced, (iii) promoted, (iv) unaffected for remaining shelf-life as there is no product expiration date and (v) monitored for inventory levels at major customers and third-party consumption data. In addition to Cold-EEZE® Cold Remedy lozenges, we market and distribute a variety of Cold-EEZE® Cold Remedy QuickMelts® and a Cold-EEZE® Cold Remedy Oral Spray. We also manufacture, market and distribute an organic cough drop and a Vitamin C supplement (“Organix®”). Each of the Cold-EEZE® Cold Remedy Oral Spray and QuickMelts® products, and Organix® products carry shelf-life expiration dates for which we aggregate such new product market experience data and update our sales returns and allowances estimates accordingly. Sales allowances estimates are tracked at the specific customer and product line levels and are tested on an annual historical basis, and reviewed quarterly. Additionally, we monitor current developments by customer, market conditions and any other occurrences that could affect the expected provisions relative to net sales for the period presented.
 
Cash Equivalents
We consider all highly liquid investments with a maturity of three months or less at the time of purchase to be cash equivalents. Cash equivalents include cash on hand and monies invested in money market funds. The carrying amount approximates the fair market value due to the short-term maturity of these investments.
 
Inventory Valuation 
Inventory is valued at the lower of cost, determined on a first-in, first-out basis (FIFO), or market. Inventory items are analyzed to determine cost and the market value and appropriate valuation adjustments are established. At September 30, 2014 and December 31, 2013, inventory included raw material, work in progress and packaging amounts of $1.8 million and $1.1 million, respectively, and finished goods of $2.4 million and $1.4 million, respectively.
 
Property, Plant and Equipment
Property, plant and equipment are recorded at cost. We compute depreciation using the straight-line method for financial reporting purposes. Depreciation expense is computed in accordance with the following ranges of estimated asset lives: building and improvements - ten to thirty-nine years; machinery and equipment - three to seven years; computer software - three years; and furniture and fixtures – five years.
   
Concentration of Risks
Future revenues, costs, margins, and profits will continue to be influenced by our ability to maintain our manufacturing availability and capacity together with our marketing and distribution capabilities and the regulatory requirements associated with the development of OTC and other personal care products in order to compete on a national level and/or international level.
 
Our business is subject to federal and state laws and regulations adopted for the health and safety of users of our products. Our OTC cold remedy products are subject to regulations by various federal, state and local agencies, including the Food and Drug Administration (“FDA”) and, as applicable, the Homeopathic Pharmacopoeia of the United States.
 
Financial instruments that potentially subject us to significant concentrations of credit risk consist principally of cash investments and trade accounts receivable.
 
We maintain cash and cash equivalents with certain major financial institutions. As of September 30, 2014, our cash balance was $4.9 million and our bank balance was $5.0 million. Of the total bank balance, $577,000 was covered by federal depository insurance and $4.5 million was uninsured at September 30, 2014.
 
Trade accounts receivable potentially subject us to credit concentrations from time-to-time as a consequence of the timing, payment pattern and ultimate purchase volumes or shipping schedules with our customers. We extend credit to our customers based upon an evaluation of the customer’s financial condition and credit history and generally we do not require collateral. Our broad range of customers includes many large national chain, regional, specialty and local retail stores. These credit concentrations may impact our overall exposure to credit risk, either positively or negatively, in that our customers may be similarly affected by changes in economic, regulatory or other conditions that may impact the timing and collectability of amounts due to us. At September 30, 2014 and December 31, 2013, our largest accounts receivable balances are with three customers representing approximately 51% and two customers representing 46%, respectively, of our total trade receivable balance. As a consequence of an evaluation of our customer’s financial condition, payment patterns, balance due us and other factors, we did not offset our account receivable with an allowance for bad debt at September 30, 2014 and December 31, 2013.
 
Our revenues are principally generated from the sale of OTC cold remedy products which represented approximately 95% and 91% of total revenues for each of the nine months ended September 30, 2014 and 2013, respectively. A significant portion of our business is highly seasonal, which causes major variations in operating results from quarter to quarter. The third and fourth quarters generally represent the largest sales volume for the OTC cold remedy products. For the three and nine months ended September 30, 2014 and 2013, our net sales were principally related to domestic markets.
 
Long-lived Assets
We review our carrying value of our long-lived assets with definite lives whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. When indicators of impairment exist, we determine whether the estimated undiscounted sum of the future cash flows of such assets is less than their carrying amounts. If less, an impairment loss is recognized in the amount, if any, by which the carrying amount of such assets exceeds their respective fair values. The determination of fair value is based on quoted market prices in active markets, if available, or independent appraisals; sales price negotiations; or projected future cash flows discounted at a rate determined by management to be commensurate with our business risk. The estimation of fair value utilizing discounted forecasted cash flows includes significant judgments regarding assumptions of revenue, operating and marketing costs; selling and administrative expenses; interest rates; property and equipment additions and retirements; industry competition; and general economic and business conditions, among other factors.
 
Fair value is based on the prices that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In order to increase consistency and comparability in fair value measurements, a three-tier fair value hierarchy prioritizes the inputs used to measure fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs for which little or no market data exists, therefore requiring an entity to develop its own assumptions.
 
Fair Value of Financial Instruments 
Cash and cash equivalents, accounts receivable and accounts payable are reflected in the Condensed Consolidated Financial Statements at carrying value which approximates fair value because of the short-term maturity of these instruments.
 
Revenue Recognition
Sales are recognized at the time ownership is transferred to the customer. Revenue is reduced for trade promotions, estimated sales returns, cash discounts and other allowances in the same period as the related sales are recorded. We make estimates of potential future product returns and other allowances related to current period revenue. We analyze historical returns, current trends, and changes in customer and consumer demand when evaluating the adequacy of the sales returns and other allowances.
 
Our return policy accommodates returns for (i) discontinued products, (ii) store closings and (iii) products that have reached or exceeded their designated expiration date. We do not impose a period of time within which product may be returned. All requests for product returns must be submitted to us for pre-approval. The main components of our returns policy are: (i) we will accept returns that are due to damaged product that is un-saleable and such return request activity falls within an acceptable range, (ii) we will accept returns for products that have reached or exceeded designated expiration dates and (iii) we will accept returns in the event that we discontinue a product provided that the customer will have the right to return only such items that it purchased directly from us. We will not accept return requests pertaining to customer inventory “Overstocking” or “Resets”. We will only accept return requests for product in its intended package configuration. We reserve the right to terminate shipment of product to customers who have made unauthorized deductions contrary to our return policy or pursue other methods of reimbursement. We compensate the customer for authorized returns by means of a credit applied to amounts owed or to be owed and in the case of discontinued product only, also by way of an exchange. We do not have any significant product exchange history.
  
As of September 30, 2014, accrued advertising and other allowances included (i) $2.0 million for estimated future sales returns and (ii) $1.2 million for cooperative incentive promotion costs. As of December 31, 2013, accrued advertising and other allowances included (i) $1.5 million for estimated future sales returns and (ii) $1.3 million for cooperative incentive promotion costs. Additionally, as of September 30, 2014 and December 31, 2013, we included a provision for sales allowances of $89,000 and $128,000, respectively, which are reported as a reduction to sales and account receivables.
 
Advertising and Incentive Promotions
Advertising and incentive promotion costs are expensed within the period in which they are utilized. Advertising and incentive promotion expense is comprised of (i) media advertising, presented as part of sales and marketing expense, (ii) cooperative incentive promotions and coupon program expenses, which are accounted for as part of net sales, and (iii) free product, which is accounted for as part of cost of sales. Advertising and incentive promotion expenses incurred for the three months ended September 30, 2014 and 2013 were $1.3 million and $1.4 million, respectively. Advertising and incentive promotion expenses incurred for the nine months ended September 30, 2014 and 2013 were $5.7 million and $5.9 million, respectively. Included in prepaid expenses and other current assets was $1.9 million and $1.3 million at September 30, 2014 and December 31, 2013, respectively, relating to prepaid advertising and promotion expenses.
 
Shipping and Handling 
Product sales carry shipping and handling charges to the purchaser, included as part of the invoiced price, which is classified as revenue. In all cases, costs related to this revenue are recorded in cost of sales.
 
Stock Based Compensation
We recognize all share-based payments to employees and directors, including grants of stock options, as compensation expense in the financial statements based on their fair values. Fair values of stock options are determined through the use of the Black-Scholes option pricing model. The compensation cost is recognized as an expense over the requisite service period of the award, which usually coincides with the vesting period.
 
Stock and stock options for the purchase of our common stock, $0.0005 par value, (“Common Stock”) have been granted to both employees and non-employees pursuant to the terms of certain agreements and stock option plans (see Note 4). Stock options are exercisable during a period determined by us, but in no event later than ten years from the date granted. For the three months ended September 30, 2014 and 2013, we charged to operations $63,000 and $67,000, respectively, for share-based compensation expense for the aggregate fair value of stock grants issued and vested stock options earned. For the nine months ended September 30, 2014 and 2013, we charged to operations $191,000 and $146,000, respectively, for share-based compensation expense for the aggregate fair value of stock grants issued and vested stock options earned.
 
Variable Interest Entity
On March 22, 2010, we, Phosphagenics Limited (“PSI Parent”), an Australian corporation, Phosphagenics Inc. (“PSI”), a Delaware corporation and subsidiary of PSI Parent, and Phusion Laboratories, LLC (the “Joint Venture”), a Delaware limited liability company, entered into a Limited Liability Company Agreement (the “LLC Agreement”) of the Joint Venture and additional related agreements for the purpose of developing and commercializing, for worldwide distribution and sale, a wide range of non-prescription remedies using PSI Parent’s proprietary patented TPM™ technology (“TPM”). TPM facilitates the delivery and depth of penetration of active molecules in pharmaceutical, nutraceutical, and other products. Pursuant to the LLC Agreement, we and PSI each own a 50% membership interest in the Joint Venture. The Joint Venture, of which we own a 50% membership interest, qualifies as a variable interest entity (“VIE”), we are the current primary beneficiary and we have consolidated the Joint Venture beginning with the quarter ended March 31, 2010 (see Note 6).
 
Research and Development
Research and development costs are charged to operations in the period incurred. Research and development costs for the three months ended September 30, 2014 and 2013 were $356,000 and $181,000, respectively. Research and development costs for the nine months ended September 30, 2014 and 2013 were $907,000 and $586,000, respectively. Research and development costs are principally related to new product development initiatives and costs associated with our OTC cold remedy products.
 
Income Taxes
We utilize the asset and liability approach which requires the recognition of deferred tax assets and liabilities for the future tax consequences of events that have been recognized in our financial statements or tax returns. In estimating future tax consequences, we generally consider all expected future events other than enactments of changes in the tax law or rates. Until sufficient taxable income to offset the temporary timing differences attributable to operations and the tax deductions attributable to option, warrant and stock activities are assured, a valuation allowance equaling the total deferred tax asset is being provided (see Note 5).
 
We utilize a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount which is more than fifty percent likely of being realized upon ultimate settlement. Any interest or penalties related to uncertain tax positions will be recorded as interest or administrative expense, respectively.
 
As a result of our continuing tax losses, we have recorded a full valuation allowance against a net deferred tax asset. Additionally, we have not recorded a liability for unrecognized tax benefits. The tax years 2006 and forward remain open to examination by the IRS. The tax years 2004 and forward remain open to examination by the various state taxing authorities to which we are subject.
 
Recently Issued Accounting Standards
In July 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2013-11, “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists” (“ASU 2013-11”). ASU 2013-11 amends Accounting Standards Codification 740, “Income Taxes,” to require that in certain cases, an unrecognized tax benefit, or portion of 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 when such items exist in the same taxing jurisdiction. The amendments in this update are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. The amendments should be applied prospectively to all unrecognized tax benefits that exist at the effective date, and retrospective application is permitted. The adoption of ASU 2013-11 did not have a material impact on our consolidated financial position, results from operations or cash flows.
 
In May 2014, the FASB issued new accounting guidance ASU No. 2014-09, “Revenue from Contracts with Customers”, on revenue recognition.  The new standard provides for a single five-step model to be applied to all revenue contracts with customers as well as requires additional financial statement disclosures that will enable users to understand the nature, amount, timing and uncertainty of revenue and cash flows relating to customer contracts.  Companies have an option to use either a retrospective approach or cumulative effect adjustment approach to implement the standard.  There is no option for early adoption.  This ASU is effective for fiscal years and interim periods within those years beginning after December 15, 2016.  We are currently evaluating the impact of the new guidance on our consolidated financial statements.
  
In June 2014, the FASB issued new accounting guidance ASU 2014-12, “Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period”. The amendments in this update require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. Companies should apply existing guidance in ASC 718, “Compensation - Stock Compensation”, as it relates to awards with performance conditions that affect vesting to account for such awards. The amendments in this update will be effective as of January 1, 2016. Earlier adoption is permitted. We may apply the amendments in this update either: (1) prospectively to all awards granted or modified after the effective date; or (2) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. If a retrospective transition is adopted, the cumulative effect of applying this update as of the beginning of the earliest annual period presented in the financial statements should be recognized as an adjustment to the opening retained earnings balance at that date. In addition, if a retrospective transition is adopted, we may use hindsight in measuring and recognizing the compensation cost. We are currently assessing the impact of this update, and believe that its adoption on January 1, 2016 will not have a material impact on our consolidated financial statements.
 
In August 2014, the FASB issued ASU 2014-15, “Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern”. The amendments in this update state that in connection with preparing financial statements for each annual and interim reporting period, an entity's management should evaluate whether there are conditions or events that raise substantial doubt about the entity's ability to continue as a going concern within one year after the date that the financial statements are issued (or within one year after the date that the financial statements are available to be issued, when applicable). The amendments in this update are effective for the annual reporting period beginning after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The adoption of ASU 2014-15 is not expected to have a material impact on our consolidated financial statements.

Commitments and Contingencies

v2.4.0.8
Commitments and Contingencies
9 Months Ended
Sep. 30, 2014
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies Disclosure [Text Block]
Note 3 – Commitments and Contingencies
 
Godfrey Settlement Agreement
  In November 2004, we commenced an action against John C. Godfrey, Nancy Jane Godfrey, and Godfrey Science and Design, Inc. (together the “Godfreys”) for injunctive relief regarding the ownership of the Cold-EEZE® trademark. The Godfreys subsequently asserted against us counterclaims and sought monetary damages and injunctive and declaratory relief relative to the Cold-EEZE® trademark and other intellectual property. 
 
On December 20, 2012, we and the Godfreys, including the Estate of Nancy Jane Godfrey, entered into a Settlement Agreement and Mutual General Release (the “Godfrey Settlement Agreement”), pursuant to which we resolved all disputes, including claims asserted by us and counterclaims asserted against us in the action. Pursuant to the terms of the Godfrey Settlement Agreement, we paid the Godfreys $2.1 million in December 2012 and we agreed to make four additional annual payments of $100,000 due in December of each of the next four years. Each annual payment in the amount of $100,000 will accrue interest at the per annum rate of 3.25%. The first annual installment of $100,000 plus accrued interest of $13,000 was paid in December 2013. Under the Godfrey Settlement Agreement, the Godfreys assigned, transferred and conveyed to us all of their right, title, and interest in U.S. Trademark Registration No. 1,838,542 for the trademark Cold-EEZE®, among other intellectual property associated with such trademark. At each of September 30, 2014 and December 31, 2013, other current liabilities and other long term obligations include $100,000 and $200,000, respectively, for the three remaining annual installment payments.
  
We have estimated future minimum obligations over the next five years, including the remainder of Fiscal 2014, as follows (in thousands):
 
Fiscal   Year
 
Employment Contracts
 
Settlement Agreement
 
Total
 
2014
 
 
256
 
 
100
 
 
356
 
2015
 
 
1,025
 
 
100
 
 
1,125
 
2016
 
 
256
 
 
100
 
 
356
 
2017
 
 
-
 
 
-
 
 
-
 
2018
 
 
-
 
 
-
 
 
-
 
Total
 
$
1,537
 
$
300
 
$
1,837
 

Transactions Affecting Stockholders' Equity

v2.4.0.8
Transactions Affecting Stockholders' Equity
9 Months Ended
Sep. 30, 2014
Stockholders Equity Note [Abstract]  
Transactions Affecting Stock Holders Equity [Text Block]
Note 4 – Transactions Affecting Stockholders’ Equity
 
Stockholder Rights Plan
On September 8, 1998, our Board of Directors declared a dividend distribution of Common Stock Purchase Rights (each individually, a “Right” and collectively, the “Rights”) payable to the stockholders of record on September 25, 1998, thereby creating a Stockholder Rights Plan (the “Rights Agreement”). The Plan was subsequently amended effective each of (i) May 23, 2008, (ii) August 18, 2009 and (iii) June 18, 2014. The Rights Agreement, as amended, provides that each Right entitles the stockholder of record to purchase from the Company that number of common shares having a combined market value equal to two times the Rights exercise price of $45. The Rights are not exercisable until the distribution date, which will be the earlier of a public announcement that a person or group of affiliated or associated persons has acquired 15% or more of the outstanding common shares, or the announcement of an intention by a similarly constituted party to make a tender or exchange offer resulting in the ownership of 15% or more of the outstanding common shares. The Rights Agreement allows for an exemption for Ted Karkus, the Company’s Chairman and Chief Executive Officer, to acquire up to 20% of our Common Stock without our Board of Directors declaring a dividend distribution. The dividend has the effect of giving the stockholder a 50% discount on the share’s current market value for exercising such right. In the event of a cashless exercise of the Right and the acquirer has acquired less than 50% beneficial ownership of the Company, a stockholder may exchange one Right for one common share of the Company. The Rights Agreement, as amended, includes a provision pursuant to which our Board of Directors may exempt from the provisions of the Rights Agreement an offer for all outstanding shares of our Common Stock that the directors determine to be fair and not inadequate and to otherwise be in the best interests of the Company and its stockholders, after receiving advice from one or more investment banking firms. The expiration date of the Rights Agreement, as amended, is June 18, 2024.
 
Treasury Stock Acquired Pursuant to a Settlement Agreement
Effective September 4, 2014, we consummated a definitive, global Settlement Agreement (“Settlement Agreement”) resolving all of our litigation with certain of the Company’s former managers and with certain shareholders. The cases that have been settled include ProPhase Labs, Inc. v. Quigley, et al., Court of Common Pleas of Bucks County, Pennsylvania, Civ. A. No. 2010-08227; ProPhase Labs, Inc. v. Quigley, et al., Court of Common Pleas of Bucks County, Pennsylvania, Civ. A. No. 2011-09815; the appeal filed by the plaintiff in the matter Quigley v. ProPhase Labs. Inc.’s Officers and Directors, el al, Court of Common Pleas of Philadelphia County, December Term, 2011, No. 111200409; together with certain ancillary litigation.      
 
The Settlement Agreement amicably resolved these matters and provided, in part, that the parties adverse to the Company in the two Bucks County cases (i) returned to the Company 3,896,764 shares of the Company’s Common Stock for which they are listed as the record owners to the Company; and (ii) paid $440,000 to the Company. In addition, the Company paid $500,000 to the benefit of one of the defendants and $37,000 to a third party, to defray certain costs and expenses associated with the Settlement Agreement. The payments received and the payments made pursuant to the Settlement Agreement resulted in a net charge to administration expense of $97,000 for the three months and nine months ended September 30, 2014. We have also included in accrued expenses at September 30, 2014 $1.3 million in unpaid litigation costs related to this matter which are expected to be paid prior to December 31, 2014 in a combination of cash and our Common Stock. Pursuant to the Settlement Agreement, the parties also have agreed to (i) a mutual release of all claims, (ii) a standstill agreement whereby, for a period of ten years, the adverse parties will not acquire Company shares, and (iii) the dismissal of all pending litigation involving the Company, its directors and affiliates on the one hand, and the other parties.
 
The 3,896,764 shares of Common Stock received pursuant to the terms of the Settlement Agreement were recorded as treasury stock and as an additional contribution to our additional paid-in capital, valued at $5.1 million, or $1.31 per share, representing the fair value of the shares at September 4, 2014.
 
2012 Equity Line of Credit
On November 21, 2012, we entered into the equity line of credit agreement (such arrangement, the “2012 Equity Line”) with Dutchess Opportunity Fund II, LP (“Dutchess”) whereby Dutchess committed to purchase, subject to certain restrictions and conditions, up to 2,500,000 shares of our Common Stock, over a period of 36 months from the first trading day following the effectiveness of the registration statement registering the resale of shares purchased by Dutchess pursuant to the 2012 Equity Line. On November 26, 2012, we filed a registration statement with Securities and Exchange Commission (“SEC”) to register for sale for up to 2,500,000 shares of our Common Stock and the registration statement was deemed effective by the SEC on December 12, 2012. We amended this registration statement effective May 29, 2014 to withdraw and remove from registration all unissued and unsold shares. We also agreed with Dutchess to terminate the 2012 Equity Line as of May 28, 2014.
 
We drew on the facility from time to time, as and when we determine appropriate in accordance with the terms and conditions of the 2012 Equity Line. The maximum amount that we were entitled to put to Dutchess in any one draw down notice is the greater of (i) 500% of the average daily volume of our Common Stock traded on the NASDAQ Global Market for the one trading day prior to the date of delivery of the applicable draw down notice, multiplied by the closing price for such trading day, or (ii) $250,000.
 
The purchase price under the 2012 Equity Line is set at ninety-five percent (95%) of the lowest daily volume weighted average price (“VWAP”) of our Common Stock during the five (5) consecutive trading day period beginning on the date of delivery of the applicable draw down notice. In the event Dutchess received more than a five percent (5%) return on the net sales for a specific put, Dutchess remitted such excess proceeds to us; however, in the event Dutchess received less than a five percent (5%) return on the net sales for a specific put Dutchess had the right to use any such excess proceeds to off-set against the aggregated deficit proceeds.
 
There were put restrictions applied on days between the draw down notice date and the closing date with respect to that particular put. During such time, we are not allowed to deliver another draw down notice. In addition, Dutchess is not obligated to purchase shares if its total number of shares beneficially held at that time would exceed 9.99% of the number of shares of our Common Stock as determined in accordance with Rule 13d-1(j) of the Securities Exchange Act of 1934, as amended. In addition, we are not permitted to draw on the facility unless there is an effective registration statement to cover the resale of the shares.
 
During the period January 1, 2014 through May 23, 2014, we sold an aggregate of 698,207 shares of Common Stock to Dutchess under and pursuant to the 2012 Equity Line and we derived net proceeds of $1.2 million. The sales of the shares under the 2012 Equity Line were deemed to be exempt from registration under the Securities Act of 1933, as amended in reliance upon Section 4(2) (or Regulation D promulgated thereunder).
 
2014 Equity Line of Credit
The Company and Dutchess executed a new equity line of credit agreement (such arrangement, the “2014 Equity Line”) each dated May 28, 2014 whereby Dutchess committed to purchase, subject to certain restrictions and conditions, up to 3,000,000 shares of the Company’s Common Stock, over a period of 36 months from the effectiveness of the registration statement registering the resale of shares purchased by Dutchess pursuant to the Investment Agreement. On May 29, 2014, we filed a registration statement with the SEC to register for sale up to 3,000,000 shares of our Common Stock and the registration statement was declared effective by the SEC on June 4, 2014.
 
We may in our discretion draw on the facility from time to time, as and when we determine appropriate in accordance with the terms and conditions of the 2014 Equity Line.  The maximum number of shares that the Company is entitled to put to Dutchess in any one draw down notice shall not exceed shares with a purchase price of $500,000, calculated in accordance with the 2014 Equity Line. We may deliver a notice for a subsequent put from time to time, following the one day pricing period for the prior put.
 
The purchase price shall be set at ninety-five percent (95%) of the VWAP of the Company’s Common Stock during the one trading day immediately following our put notice. The Company has the right to withdraw all or any portion of any put, except that portion of the put that has already been sold to a third party, including any portion of a put that is below the minimum acceptable price set forth on the put notice, before the closing. In the event Dutchess receives more than a five percent (5%) return on the net sales for a specific put, Dutchess must remit such excess proceeds to the Company; however, in the Dutchess receives less than a five percent (5%) return on the net sales for a specific put, Dutchess will have the right to deduct from the proceeds of the put amount on the applicable closing date so Dutchess’s return will equal five percent (5%).
 
There are put restrictions applied on days between the draw down notice date and the closing date with respect to that particular put. During such time, the Company shall not be entitled to deliver another draw down notice. In addition, the Investor will not be obligated to purchase shares if Dutchess’s total number of shares beneficially held at that time would exceed 4.99% of the number of shares of our Common Stock as determined in accordance with Rule 13d-1(j) of the Securities Exchange Act of 1934, as amended. In addition, we are not permitted to draw on the facility unless there is an effective registration statement to cover the resale of the shares.
 
During the period June 13, 2014 through September 30, 2014, we sold an aggregate of 2,561,520 shares of our Common Stock to Dutchess under and pursuant to the 2014 Equity Line and we derived net proceeds of $3.7 million. The sales of the shares under the 2014 Equity Line were deemed to be exempt from registration under the Securities Act of 1933, as amended in reliance upon Section 4(2) (or Regulation D promulgated thereunder). At September 30, 2014, we have 438,480 shares of our Common Stock available for sale, at our discretion, under the terms of the 2014 Equity Line and covered pursuant to a registration statement.
 
The 1997 Option Plan
On December 2, 1997, our Board of Directors approved a Stock Option Plan (the “1997 Plan”), which was amended in 2005, and provided for the granting of up to 4.5 million shares of Common Stock. Under the 1997 Plan, we were permitted to grant options to employees, officers or directors of the Company at variable percentages of the market value of stock at the date of grant. No incentive stock option could be exercisable more than ten years after the date of grant or five years after the date of grant where the individual owns more than ten percent of the total combined voting power of all classes of stock. Stockholders approved the 1997 Plan in Fiscal 1998. No options were granted under this Plan for the nine months ended September 30, 2014 or 2013.
  
We are precluded from issuing any additional options or grants in the future under the 1997 Plan pursuant to the terms of the plan document. Options previously granted continue to be available for exercise at any time prior to such options’ respective expiration dates, but in no event later than ten years from the date granted. At September 30, 2014, there are 67,000 options outstanding under the 1997 Plan with various expiration dates ranging from October 2014 through December 2015, depending upon the date of grant.
 
The 2010 Equity Compensation Plan
On May 5, 2010, our shareholders approved the 2010 Equity Compensation Plan which was subsequently amended, restated and approved by shareholders on April 24, 2011 and further amended and approved by shareholders on May 6, 2013 (the “2010 Plan”). The 2010 Plan provides that the total number of shares of Common Stock that may be issued under the 2010 Plan is equal to 1.6 million shares plus up to 900,000 shares that are authorized for issuance but unissued under the 1997 Plan for an aggregate of 2.5 million shares. The 1997 Plan expired on December 2, 2007 and no additional awards may be made. As of September 30, 2014, 1,481,750 of the options issued under the 1997 Plan prior to December 2007 expired unexercised or were terminated. As a consequence, these shares are deemed and remain unissued which up to a maximum of 900,000 shares became available for issuance under the 2010 Plan and the remaining 581,750 options are deemed cancelled. No options were granted under the 2010 Plan for the nine months ended September 30, 2014. We granted 15,000 options under the 2010 Plan for the three and nine months ended September 30, 2013. At September 30, 2014, there are 267,159 shares of Common Stock that may be issued pursuant to the terms of the 2010 Equity Compensation Plan.
 
There were no stock options exercised for the nine months ended September 30, 2014 or 2013.
 
The 2010 Directors’ Equity Compensation Plan
On May 5, 2010, our shareholders approved the 2010 Directors’ Equity Compensation Plan which was subsequently amended and approved by shareholders on May 6, 2013. A primary purpose of the 2010 Directors’ Equity Compensation Plan is to provide us with the ability to pay all or a portion of the fees of directors in restricted stock instead of cash. The 2010 Directors’ Equity Compensation Plan provides that the total number of shares of Common Stock that may be issued under the 2010 Directors’ Equity Compensation Plan is equal to 425,000. For the three and nine months ended September 30, 2014, no shares were granted to directors. For the three and nine months ended September 30, 2013, 16,470 shares were granted to directors. At September 30, 2014, there are 176,135 shares of Common Stock that may be issued pursuant to the terms of the 2010 Directors’ Equity Compensation Plan.

Income Taxes

v2.4.0.8
Income Taxes
9 Months Ended
Sep. 30, 2014
Income Tax Disclosure [Abstract]  
Income Tax Disclosure [Text Block]
Note 5 – Income Taxes
 
As of December 31, 2013, we have net operating loss carry-forwards of approximately $34.7 million for federal purposes that will expire beginning in Fiscal 2020 through Fiscal 2032. Additionally, there are net operating loss carry-forwards of approximately $20.4 million for state purposes that will expire beginning in Fiscal 2018 through Fiscal 2032. Until sufficient taxable income to offset the temporary timing differences attributable to operations and the tax deductions attributable to option, warrant and stock are assured, a valuation allowance equaling the total deferred tax asset is being provided. Management believes that this allowance is required due to the uncertainty of realizing these tax benefits in the future. The uncertainty arises largely due to substantial marketing and research and development costs.

Investment in a Joint Venture

v2.4.0.8
Investment in a Joint Venture
9 Months Ended
Sep. 30, 2014
Investments in and Advances to Affiliates, Schedule of Investments [Abstract]  
Investments in and Advances to Affiliates, Schedule of Investments [Text Block]
Note 6 – Investment in a Joint Venture
 
On March 22, 2010, we, PSI Parent, PSI and the Joint Venture entered into the LLC Agreement of the Joint Venture and additional related agreements for the purpose of developing and commercializing, for worldwide distribution and sale, a wide range of non-prescription remedies using PSI Parent’s proprietary patented TPM.
 
In connection with the LLC Agreement, PSI Parent granted to us, pursuant to the terms of a License Agreement, dated March 22, 2010 (the “Original License Agreement”), (i) an exclusive, royalty-free, world-wide (subject to certain limitations), paid-up license to exploit OTC drugs and certain other products that embody certain of PSI Parent’s TPM-related patents and related know-how (collectively, the “PSI Technology”) and (ii) a non-exclusive, royalty-free, world-wide (subject to certain limitations), paid-up license to exploit certain compounds that embody the PSI Technology for use in a product combining one or more of such compounds with an OTC drug or in a product that is part of a regimen that includes the application of an OTC drug.
 
The Joint Venture is managed by a four-person Board of Managers, with two managers appointed by each member. The LLC Agreement contains other normally found terms in such arrangements, including provisions relating to governance of the Joint Venture, indemnification obligations of the Joint Venture, allocation of profits and losses, the distribution of funds to the members and restrictions on transfer of a member’s interest.
 
Pursuant to the Original License Agreement, we issued 1,440,000 shares of our Common Stock having an aggregate value of approximately $2.6 million to PSI Parent (such shares, the “PSI Shares”), and made a one-time payment to PSI Parent of $1.0 million.
 
In accordance with a Contribution Agreement, dated March 22, 2010 (the “Contribution Agreement”), by and among us, PSI Parent, PSI, and the Joint Venture, we transferred, conveyed and assigned to the Joint Venture all of our rights, title and interest in, to and under the Original License Agreement, and the Joint Venture assumed, and undertook to pay, discharge and perform when due, all of our liabilities and obligations under and arising pursuant to the Original License Agreement (such actions, collectively, the “Assignment and Assumption”).
 
Pursuant to the Contribution Agreement and in order to reflect the Assignment and Assumption, we, PSI Parent and the Joint Venture entered into an Amended and Restated License Agreement, dated March 22, 2010 (the “Amended License Agreement”), which amends and restates the Original License Agreement to reflect that the Joint Venture is the licensee thereunder and which otherwise contains substantially the same terms as the Original License Agreement. The Joint Venture has the right to grant one or more sub-licenses of the rights granted under the Amended License Agreement to one or more third parties for reasonable consideration in any part of the applicable territory. The Amended License Agreement provides that PSI Parent shall not, directly or through third parties, exploit the covered intellectual property during the term thereof, subject to certain limitations. The Amended License Agreement will remain in effect until the expiration of the last to expire of the patents included within the PSI Technology or any extensions thereof. Either party may terminate the Amended License Agreement upon written notice to the other party in the event of certain events involving bankruptcy or insolvency. The Amended License Agreement also contains, among other things, provisions concerning the treatment of confidential information, the ownership of intellectual property and indemnification obligations.
   
Pursuant to the LLC Agreement, we and PSI each own a 50% membership interest in the Joint Venture. PSI Parent will conduct and oversee much of the product development, formulation, testing and other research and development needed by the Joint Venture, and we will oversee much of the production, distribution, sales and marketing. The LLC Agreement provides that each member may be required, from time to time and subject to certain limitations, to make capital contributions to the Joint Venture to fund its operations, in accordance with agreed upon budgets for products to be developed. Specifically, we contributed in Fiscal 2010 $500,000 in cash as initial capital and we are committed to fund up to $2.0 million, subject to agreed upon budgets (which have not been established to date), toward the initial development and marketing costs of new products for the Joint Venture. The Joint Venture has not engaged in any financial transactions, other than organizational expenses and general market and initial product evaluation and analysis. At September 30, 2014, cash and cash equivalents includes $374,000 which is available to be used by the Joint Venture to fund future product development initiatives currently under consideration by PSI Parent, PSI and us.
 
Our determination is that the Joint Venture qualifies as a VIE and that we are the primary beneficiary. We have consolidated the Joint Venture financial statements beginning with the quarter ended March 31, 2010. In Fiscal 2010, we recorded the $3.6 million payment noted above representing the estimated fair value to acquire the product license as an intangible asset. We currently estimate the expected remaining useful life of the product license to be approximately 12.50 years which we will begin amortizing the cost of intangible asset once product development and commercialization begins. Thus far, the Joint Venture has not generated any revenues and its expenses, including organizational, marketing analysis and preliminary formulations have been absorbed by the respective Joint Venture members. Furthermore, the liabilities and other obligations incurred, if any, by the Joint Venture is without recourse to us and do not create a claim on our general assets.
 
As previously announced, we are implementing a series of new product development and pre-commercialization initiatives principally in the dietary supplement category. While several of our product development initiatives have advanced, including those specific to the dietary supplement category, our Phusion product development initiatives have not progressed to management’s satisfaction. At this time, management believes that any products embodying the licensed technology to be developed by Phusion will not be available until fiscal 2016 or 2017 at the earliest, and may be more limited than previously forecasted and may encompass fewer products or have limited retail distribution.
 
Pursuant to our established accounting policies, we conducted the Fiscal 2013 annual analysis of our intangible asset as of December 31, 2013 by comparing the estimated fair value of the licensed technology based on the income approach (which utilizes forecasted discounted cash flows to estimate the fair value of the licensed technology) against the then carrying value. As we concluded that, as of December 31, 2013, the fair value according to the income approach exceeded book value, we concluded there was no impairment of the subject intangible asset.    
 
During the third quarter of fiscal 2014, our evaluation of the Company’s progress in its new product development pipeline and delays in Phusion product development caused management to reassess projections (including income projections) relied upon in December 2013. Accordingly, management performed an impairment analysis for the period ended September 30, 2014 for the licensed technology. As a consequence of our impairment assessment, we determined that a full impairment occurred of the intangible asset, licensed technology. As a consequence, for the three and nine months ended September 30, 2014 we charged to operations a $3.6 million impairment charge.

Earnings (Loss) Per Share

v2.4.0.8
Earnings (Loss) Per Share
9 Months Ended
Sep. 30, 2014
Earnings Per Share [Abstract]  
Earnings Per Share [Text Block]
Note 7 – Earnings (Loss) Per Share
 
Basic earnings (loss) per share is computed by dividing net income or loss attributable to common stockholders by the weighted-average number of shares of our Common Stock outstanding for the period. Diluted earnings (loss) per share reflects the potential dilution that could occur if securities or other contracts to issue Common Stock were exercised or converted into Common Stock or resulted in the issuance of Common Stock that shared in the earnings of the entity. Diluted earnings per share also utilize the treasury stock method which prescribes a theoretical buy-back of shares from the theoretical proceeds of all options and warrants outstanding during the period. Options and warrants outstanding to acquire shares of our Common Stock at September 30, 2014 and 2013 were 1,632,500 and 1,264,000, respectively.
 
For the nine months ended September 30, 2014 and 2013 dilutive earnings per share is the same as basic earnings per share due to (i) the inclusion of Common Stock, in the form of stock options and warrants (“Common Stock Equivalents”), would have an anti-dilutive effect on the loss per share or (ii) there were no Common Stock Equivalents for the respective period. For the nine months ended September 30, 2014 and 2013, there were 512,182 and 413,285 Common Stock Equivalents, respectively, which were in the money, that were excluded from the earnings per share computation. For the three months ended September 30, 2014, there were 393,260 Common Stock Equivalents which were in the money, that were excluded from the earnings per share computation. For the three months ended September 30, 2013, there were 447,205 Common Stock Equivalents which were in the money, that were included in the earnings per share computation.
 
A reconciliation of the applicable numerators and denominators of the income statement periods presented, as reflected in the results of continuing operations, is as follows (in thousands, except per share amounts):
 
 
 
Three Months Ended
 
Three Months Ended
 
Nine Months Ended
 
Nine Months Ended
 
 
 
September 30, 2014
 
September 30, 2013
 
September 30, 2014
 
September 30, 2013
 
 
 
Loss
 
 
Shares
 
EPS
 
Income
 
 
Shares
 
EPS
 
Loss
 
 
Shares
 
EPS
 
Loss
 
Shares
 
EPS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic earnings (loss) per share
 
$
(3,216)
 
 
18,208
 
$
(0.18)
 
$
1,236
 
 
15,860
 
$
0.08
 
$
(7,158)
 
 
17,216
 
$
(0.42)
 
$
(193)
 
 
15,819
 
$
(0.01)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Dilutives:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Options
 
 
-
 
 
-
 
 
-
 
 
-
 
 
447
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Diluted income (loss) per share
 
$
(3,216)
 
 
18,208
 
$
(0.18)
 
$
1,236
 
 
16,307
 
$
0.08
 
$
(7,158)
 
 
17,216
 
$
(0.42)
 
$
(193)
 
 
15,819
 
$
(0.01)
 

Summary of Significant Accounting Policies (Policies)

v2.4.0.8
Summary of Significant Accounting Policies (Policies)
9 Months Ended
Sep. 30, 2014
Accounting Policies [Abstract]  
Nature Of Operations [Policy Text Block]
Seasonality of the Business   
Our net sales are derived principally from our OTC cold remedy products. Currently, our sales are influenced by and subject to fluctuations in the timing of purchase and the ultimate level of demand for our products which are a function of the timing, length and severity of each cold season. Generally, a cold season is defined as the period of September to March when the incidence of the common cold rises as a consequence of the change in weather and other factors. We generally experience in the third and fourth quarter higher levels of net sales along with a corresponding increase in marketing and advertising expenditures designed to promote our products during the cold season. Revenues and related marketing costs are generally at their lowest levels in the second quarter when consumer demand generally declines. We track health and wellness trends and develop retail promotional strategies to align our production scheduling, inventory management and marketing programs to optimize consumer purchases.
Use of Estimates, Policy [Policy Text Block]
Use of Estimates
The preparation of financial statements and the accompanying notes thereto, in conformity with GAAP, requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the respective reporting periods. Examples include the provision for bad debt, sales returns and allowances, inventory obsolescence, useful lives of property and equipment and intangible assets, impairment of property and equipment and intangible assets, income tax valuations and assumptions related to accrued advertising. When providing for the appropriate sales returns, allowances, cash discounts and cooperative incentive promotion costs (“Sales Allowances”), we apply a uniform and consistent method for making certain assumptions for estimating these provisions. These estimates and assumptions are based on historical experience, current trends and other factors that management believes to be relevant at the time the financial statements are prepared. Management reviews the accounting policies, assumptions, estimates and judgments on a quarterly basis. Actual results could differ from those estimates.
 
Our primary product, Cold-EEZEÒCold Remedy lozenges, utilizes a proprietary zinc gluconate formulation which has been clinically proven to reduce the severity and duration of common cold symptoms. Factors considered in estimating the appropriate sales returns and allowances for this product include it being (i) a unique product with limited competitors, (ii) competitively priced, (iii) promoted, (iv) unaffected for remaining shelf-life as there is no product expiration date and (v) monitored for inventory levels at major customers and third-party consumption data. In addition to Cold-EEZE® Cold Remedy lozenges, we market and distribute a variety of Cold-EEZE® Cold Remedy QuickMelts® and a Cold-EEZE® Cold Remedy Oral Spray. We also manufacture, market and distribute an organic cough drop and a Vitamin C supplement (“Organix®”). Each of the Cold-EEZE® Cold Remedy Oral Spray and QuickMelts® products, and Organix® products carry shelf-life expiration dates for which we aggregate such new product market experience data and update our sales returns and allowances estimates accordingly. Sales allowances estimates are tracked at the specific customer and product line levels and are tested on an annual historical basis, and reviewed quarterly. Additionally, we monitor current developments by customer, market conditions and any other occurrences that could affect the expected provisions relative to net sales for the period presented.
Cash and Cash Equivalents, Policy [Policy Text Block]
Cash Equivalents
We consider all highly liquid investments with a maturity of three months or less at the time of purchase to be cash equivalents. Cash equivalents include cash on hand and monies invested in money market funds. The carrying amount approximates the fair market value due to the short-term maturity of these investments.
Inventory, Policy [Policy Text Block]
Inventory Valuation 
Inventory is valued at the lower of cost, determined on a first-in, first-out basis (FIFO), or market. Inventory items are analyzed to determine cost and the market value and appropriate valuation adjustments are established. At September 30, 2014 and December 31, 2013, inventory included raw material, work in progress and packaging amounts of $1.8 million and $1.1 million, respectively, and finished goods of $2.4 million and $1.4 million, respectively.
Property, Plant and Equipment, Policy [Policy Text Block]
Property, Plant and Equipment
Property, plant and equipment are recorded at cost. We compute depreciation using the straight-line method for financial reporting purposes. Depreciation expense is computed in accordance with the following ranges of estimated asset lives: building and improvements - ten to thirty-nine years; machinery and equipment - three to seven years; computer software - three years; and furniture and fixtures – five years.
Concentration Risk Disclosure [Policy Text Block]
Concentration of Risks
Future revenues, costs, margins, and profits will continue to be influenced by our ability to maintain our manufacturing availability and capacity together with our marketing and distribution capabilities and the regulatory requirements associated with the development of OTC and other personal care products in order to compete on a national level and/or international level.
 
Our business is subject to federal and state laws and regulations adopted for the health and safety of users of our products. Our OTC cold remedy products are subject to regulations by various federal, state and local agencies, including the Food and Drug Administration (“FDA”) and, as applicable, the Homeopathic Pharmacopoeia of the United States.
 
Financial instruments that potentially subject us to significant concentrations of credit risk consist principally of cash investments and trade accounts receivable.
 
We maintain cash and cash equivalents with certain major financial institutions. As of September 30, 2014, our cash balance was $4.9 million and our bank balance was $5.0 million. Of the total bank balance, $577,000 was covered by federal depository insurance and $4.5 million was uninsured at September 30, 2014.
 
Trade accounts receivable potentially subject us to credit concentrations from time-to-time as a consequence of the timing, payment pattern and ultimate purchase volumes or shipping schedules with our customers. We extend credit to our customers based upon an evaluation of the customer’s financial condition and credit history and generally we do not require collateral. Our broad range of customers includes many large national chain, regional, specialty and local retail stores. These credit concentrations may impact our overall exposure to credit risk, either positively or negatively, in that our customers may be similarly affected by changes in economic, regulatory or other conditions that may impact the timing and collectability of amounts due to us. At September 30, 2014 and December 31, 2013, our largest accounts receivable balances are with three customers representing approximately 51% and two customers representing 46%, respectively, of our total trade receivable balance. As a consequence of an evaluation of our customer’s financial condition, payment patterns, balance due us and other factors, we did not offset our account receivable with an allowance for bad debt at September 30, 2014 and December 31, 2013.
 
Our revenues are principally generated from the sale of OTC cold remedy products which represented approximately 95% and 91% of total revenues for each of the nine months ended September 30, 2014 and 2013, respectively. A significant portion of our business is highly seasonal, which causes major variations in operating results from quarter to quarter. The third and fourth quarters generally represent the largest sales volume for the OTC cold remedy products. For the three and nine months ended September 30, 2014 and 2013, our net sales were principally related to domestic markets.
Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block]
Long-lived Assets
We review our carrying value of our long-lived assets with definite lives whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. When indicators of impairment exist, we determine whether the estimated undiscounted sum of the future cash flows of such assets is less than their carrying amounts. If less, an impairment loss is recognized in the amount, if any, by which the carrying amount of such assets exceeds their respective fair values. The determination of fair value is based on quoted market prices in active markets, if available, or independent appraisals; sales price negotiations; or projected future cash flows discounted at a rate determined by management to be commensurate with our business risk. The estimation of fair value utilizing discounted forecasted cash flows includes significant judgments regarding assumptions of revenue, operating and marketing costs; selling and administrative expenses; interest rates; property and equipment additions and retirements; industry competition; and general economic and business conditions, among other factors.
 
Fair value is based on the prices that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In order to increase consistency and comparability in fair value measurements, a three-tier fair value hierarchy prioritizes the inputs used to measure fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs for which little or no market data exists, therefore requiring an entity to develop its own assumptions.
Fair Value of Financial Instruments, Policy [Policy Text Block]
Fair Value of Financial Instruments 
Cash and cash equivalents, accounts receivable and accounts payable are reflected in the Condensed Consolidated Financial Statements at carrying value which approximates fair value because of the short-term maturity of these instruments.
Revenue Recognition, Policy [Policy Text Block]
Revenue Recognition
Sales are recognized at the time ownership is transferred to the customer. Revenue is reduced for trade promotions, estimated sales returns, cash discounts and other allowances in the same period as the related sales are recorded. We make estimates of potential future product returns and other allowances related to current period revenue. We analyze historical returns, current trends, and changes in customer and consumer demand when evaluating the adequacy of the sales returns and other allowances.
 
Our return policy accommodates returns for (i) discontinued products, (ii) store closings and (iii) products that have reached or exceeded their designated expiration date. We do not impose a period of time within which product may be returned. All requests for product returns must be submitted to us for pre-approval. The main components of our returns policy are: (i) we will accept returns that are due to damaged product that is un-saleable and such return request activity falls within an acceptable range, (ii) we will accept returns for products that have reached or exceeded designated expiration dates and (iii) we will accept returns in the event that we discontinue a product provided that the customer will have the right to return only such items that it purchased directly from us. We will not accept return requests pertaining to customer inventory “Overstocking” or “Resets”. We will only accept return requests for product in its intended package configuration. We reserve the right to terminate shipment of product to customers who have made unauthorized deductions contrary to our return policy or pursue other methods of reimbursement. We compensate the customer for authorized returns by means of a credit applied to amounts owed or to be owed and in the case of discontinued product only, also by way of an exchange. We do not have any significant product exchange history.
  
As of September 30, 2014, accrued advertising and other allowances included (i) $2.0 million for estimated future sales returns and (ii) $1.2 million for cooperative incentive promotion costs. As of December 31, 2013, accrued advertising and other allowances included (i) $1.5 million for estimated future sales returns and (ii) $1.3 million for cooperative incentive promotion costs. Additionally, as of September 30, 2014 and December 31, 2013, we included a provision for sales allowances of $89,000 and $128,000, respectively, which are reported as a reduction to sales and account receivables.
Advertising and Incentive Promotions [Policy Text Block]
Advertising and Incentive Promotions
Advertising and incentive promotion costs are expensed within the period in which they are utilized. Advertising and incentive promotion expense is comprised of (i) media advertising, presented as part of sales and marketing expense, (ii) cooperative incentive promotions and coupon program expenses, which are accounted for as part of net sales, and (iii) free product, which is accounted for as part of cost of sales. Advertising and incentive promotion expenses incurred for the three months ended September 30, 2014 and 2013 were $1.3 million and $1.4 million, respectively. Advertising and incentive promotion expenses incurred for the nine months ended September 30, 2014 and 2013 were $5.7 million and $5.9 million, respectively. Included in prepaid expenses and other current assets was $1.9 million and $1.3 million at September 30, 2014 and December 31, 2013, respectively, relating to prepaid advertising and promotion expenses.
Shipping and Handling Cost, Policy [Policy Text Block]
Shipping and Handling 
Product sales carry shipping and handling charges to the purchaser, included as part of the invoiced price, which is classified as revenue. In all cases, costs related to this revenue are recorded in cost of sales.
Compensation Related Costs, Policy [Policy Text Block]
Stock Based Compensation
We recognize all share-based payments to employees and directors, including grants of stock options, as compensation expense in the financial statements based on their fair values. Fair values of stock options are determined through the use of the Black-Scholes option pricing model. The compensation cost is recognized as an expense over the requisite service period of the award, which usually coincides with the vesting period.
 
Stock and stock options for the purchase of our common stock, $0.0005 par value, (“Common Stock”) have been granted to both employees and non-employees pursuant to the terms of certain agreements and stock option plans (see Note 4). Stock options are exercisable during a period determined by us, but in no event later than ten years from the date granted. For the three months ended September 30, 2014 and 2013, we charged to operations $63,000 and $67,000, respectively, for share-based compensation expense for the aggregate fair value of stock grants issued and vested stock options earned. For the nine months ended September 30, 2014 and 2013, we charged to operations $191,000 and $146,000, respectively, for share-based compensation expense for the aggregate fair value of stock grants issued and vested stock options earned.
Consolidation, Variable Interest Entity, Policy [Policy Text Block]
Variable Interest Entity
On March 22, 2010, we, Phosphagenics Limited (“PSI Parent”), an Australian corporation, Phosphagenics Inc. (“PSI”), a Delaware corporation and subsidiary of PSI Parent, and Phusion Laboratories, LLC (the “Joint Venture”), a Delaware limited liability company, entered into a Limited Liability Company Agreement (the “LLC Agreement”) of the Joint Venture and additional related agreements for the purpose of developing and commercializing, for worldwide distribution and sale, a wide range of non-prescription remedies using PSI Parent’s proprietary patented TPM™ technology (“TPM”). TPM facilitates the delivery and depth of penetration of active molecules in pharmaceutical, nutraceutical, and other products. Pursuant to the LLC Agreement, we and PSI each own a 50% membership interest in the Joint Venture. The Joint Venture, of which we own a 50% membership interest, qualifies as a variable interest entity (“VIE”), we are the current primary beneficiary and we have consolidated the Joint Venture beginning with the quarter ended March 31, 2010 (see Note 6).
Research and Development Expense, Policy [Policy Text Block]
Research and Development
Research and development costs are charged to operations in the period incurred. Research and development costs for the three months ended September 30, 2014 and 2013 were $356,000 and $181,000, respectively. Research and development costs for the nine months ended September 30, 2014 and 2013 were $907,000 and $586,000, respectively. Research and development costs are principally related to new product development initiatives and costs associated with our OTC cold remedy products.
Income Tax, Policy [Policy Text Block]
Income Taxes
We utilize the asset and liability approach which requires the recognition of deferred tax assets and liabilities for the future tax consequences of events that have been recognized in our financial statements or tax returns. In estimating future tax consequences, we generally consider all expected future events other than enactments of changes in the tax law or rates. Until sufficient taxable income to offset the temporary timing differences attributable to operations and the tax deductions attributable to option, warrant and stock activities are assured, a valuation allowance equaling the total deferred tax asset is being provided (see Note 5).
 
We utilize a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount which is more than fifty percent likely of being realized upon ultimate settlement. Any interest or penalties related to uncertain tax positions will be recorded as interest or administrative expense, respectively.
 
As a result of our continuing tax losses, we have recorded a full valuation allowance against a net deferred tax asset. Additionally, we have not recorded a liability for unrecognized tax benefits. The tax years 2006 and forward remain open to examination by the IRS. The tax years 2004 and forward remain open to examination by the various state taxing authorities to which we are subject.
New Accounting Pronouncements, Policy [Policy Text Block]
Recently Issued Accounting Standards
In July 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2013-11, “Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists” (“ASU 2013-11”). ASU 2013-11 amends Accounting Standards Codification 740, “Income Taxes,” to require that in certain cases, an unrecognized tax benefit, or portion of 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 when such items exist in the same taxing jurisdiction. The amendments in this update are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. The amendments should be applied prospectively to all unrecognized tax benefits that exist at the effective date, and retrospective application is permitted. The adoption of ASU 2013-11 did not have a material impact on our consolidated financial position, results from operations or cash flows.
 
In May 2014, the FASB issued new accounting guidance ASU No. 2014-09, “Revenue from Contracts with Customers”, on revenue recognition.  The new standard provides for a single five-step model to be applied to all revenue contracts with customers as well as requires additional financial statement disclosures that will enable users to understand the nature, amount, timing and uncertainty of revenue and cash flows relating to customer contracts.  Companies have an option to use either a retrospective approach or cumulative effect adjustment approach to implement the standard.  There is no option for early adoption.  This ASU is effective for fiscal years and interim periods within those years beginning after December 15, 2016.  We are currently evaluating the impact of the new guidance on our consolidated financial statements.
  
In June 2014, the FASB issued new accounting guidance ASU 2014-12, “Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period”. The amendments in this update require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. Companies should apply existing guidance in ASC 718, “Compensation - Stock Compensation”, as it relates to awards with performance conditions that affect vesting to account for such awards. The amendments in this update will be effective as of January 1, 2016. Earlier adoption is permitted. We may apply the amendments in this update either: (1) prospectively to all awards granted or modified after the effective date; or (2) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. If a retrospective transition is adopted, the cumulative effect of applying this update as of the beginning of the earliest annual period presented in the financial statements should be recognized as an adjustment to the opening retained earnings balance at that date. In addition, if a retrospective transition is adopted, we may use hindsight in measuring and recognizing the compensation cost. We are currently assessing the impact of this update, and believe that its adoption on January 1, 2016 will not have a material impact on our consolidated financial statements.
 
In August 2014, the FASB issued ASU 2014-15, “Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern”. The amendments in this update state that in connection with preparing financial statements for each annual and interim reporting period, an entity's management should evaluate whether there are conditions or events that raise substantial doubt about the entity's ability to continue as a going concern within one year after the date that the financial statements are issued (or within one year after the date that the financial statements are available to be issued, when applicable). The amendments in this update are effective for the annual reporting period beginning after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The adoption of ASU 2014-15 is not expected to have a material impact on our consolidated financial statements.

Commitments and Contingencies (Tables)

v2.4.0.8
Commitments and Contingencies (Tables)
9 Months Ended
Sep. 30, 2014
Commitments and Contingencies Disclosure [Abstract]  
Schedule Of Future Contingency Obligation [Table Text Block]
We have estimated future minimum obligations over the next five years, including the remainder of Fiscal 2014, as follows (in thousands):
 
Fiscal   Year
 
Employment Contracts
 
Settlement Agreement
 
Total
 
2014
 
 
256
 
 
100
 
 
356
 
2015
 
 
1,025
 
 
100
 
 
1,125
 
2016
 
 
256
 
 
100
 
 
356
 
2017
 
 
-
 
 
-
 
 
-
 
2018
 
 
-
 
 
-
 
 
-
 
Total
 
$
1,537
 
$
300
 
$
1,837
 

Earnings (Loss) Per Share (Tables)

v2.4.0.8
Earnings (Loss) Per Share (Tables)
9 Months Ended
Sep. 30, 2014
Earnings Per Share [Abstract]  
Schedule of Calculation of Numerator and Denominator in Earnings Per Share [Table Text Block]
A reconciliation of the applicable numerators and denominators of the income statement periods presented, as reflected in the results of continuing operations, is as follows (in thousands, except per share amounts):
 
 
 
Three Months Ended
 
Three Months Ended
 
Nine Months Ended
 
Nine Months Ended
 
 
 
September 30, 2014
 
September 30, 2013
 
September 30, 2014
 
September 30, 2013
 
 
 
Loss
 
 
Shares
 
EPS
 
Income
 
 
Shares
 
EPS
 
Loss
 
 
Shares
 
EPS
 
Loss
 
Shares
 
EPS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic earnings (loss) per share
 
$
(3,216)
 
 
18,208
 
$
(0.18)
 
$
1,236
 
 
15,860
 
$
0.08
 
$
(7,158)
 
 
17,216
 
$
(0.42)
 
$
(193)
 
 
15,819
 
$
(0.01)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Dilutives:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Options
 
 
-
 
 
-
 
 
-
 
 
-
 
 
447
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
-
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Diluted income (loss) per share
 
$
(3,216)
 
 
18,208
 
$
(0.18)
 
$
1,236
 
 
16,307
 
$
0.08
 
$
(7,158)
 
 
17,216
 
$
(0.42)
 
$
(193)
 
 
15,819
 
$
(0.01)
 

Summary of Significant Accounting Policies (Details Textual)

v2.4.0.8
Summary of Significant Accounting Policies (Details Textual) (USD $)
3 Months Ended 9 Months Ended 12 Months Ended 3 Months Ended 9 Months Ended 12 Months Ended 9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2014
Sep. 30, 2013
Dec. 31, 2013
Dec. 31, 2012
Mar. 31, 2010
Limited Liability Company Agreement [Member]
Sep. 30, 2014
Estimated Future Sales Return [Member]
Dec. 31, 2013
Estimated Future Sales Return [Member]
Sep. 30, 2014
Cooperative Incentive [Member]
Dec. 31, 2013
Cooperative Incentive [Member]
Sep. 30, 2014
Accounts Receivable [Member]
Two Customer [Member]
Dec. 31, 2013
Accounts Receivable [Member]
Two Customer [Member]
Sep. 30, 2014
Sales Revenue, Goods, Net [Member]
Sep. 30, 2013
Sales Revenue, Goods, Net [Member]
Sep. 30, 2014
Building and Building Improvements [Member]
Maximum [Member]
Sep. 30, 2014
Building and Building Improvements [Member]
Minimum [Member]
Sep. 30, 2014
Machinery and Equipment [Member]
Maximum [Member]
Sep. 30, 2014
Machinery and Equipment [Member]
Minimum [Member]
Sep. 30, 2014
Computer Software, Intangible Asset [Member]
Sep. 30, 2014
Furniture and Fixtures [Member]
Accounting Policies [Line Items]                                          
Cash and Cash Equivalents, At Carrying Value $ 4,953,000 $ 751,000 $ 4,953,000 $ 751,000 $ 1,638,000 $ 572,000                              
Cash, FDIC Insured Amount 577,000   577,000                                    
Cash, Uninsured Amount 4,500,000   4,500,000                                    
Inventory, Work in Process and Raw Materials 1,800,000   1,800,000   1,100,000                                
Inventory, Finished Goods 2,400,000   2,400,000   1,400,000                                
Due from Banks 5,000,000   5,000,000                                    
Concentration Risk, Percentage                       51.00% 46.00% 95.00% 91.00%            
Provision of Sales Allowance     89,000   128,000                                
Accrued Liabilities               2,000,000 1,500,000 1,200,000 1,300,000                    
Variable Interest Entity, Qualitative or Quantitative Information, Ownership Percentage             50.00%                            
Marketing and Advertising Expense 1,300,000 1,400,000 5,700,000 5,900,000                                  
Prepaid Advertising And Incentive Promotions 1,900,000   1,900,000   1,300,000                                
Research and development 356,000 181,000 907,000 586,000                                  
Common Stock, par value (in dollars per share) $ 0.0005   $ 0.0005   $ 0.0005                                
Share-based compensation expense $ 63,000 $ 67,000 $ 191,000 $ 146,000                                  
Property, Plant and Equipment, Useful Life                               39 years 10 years 7 years 3 years 3 years 5 years

Commitments and Contingencies (Details)

v2.4.0.8
Commitments and Contingencies (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2014
Commitments And Contingencies [Line Items]  
2014 $ 356
2015 1,125
2016 356
2017 0
2018 0
Total 1,837
Employment Contracts [Member]
 
Commitments And Contingencies [Line Items]  
2014 256
2015 1,025
2016 256
2017 0
2018 0
Total 1,537
Settlement Agreement [Member]
 
Commitments And Contingencies [Line Items]  
2014 100
2015 100
2016 100
2017 0
2018 0
Total $ 300

Commitments and Contingencies (Details Textual)

v2.4.0.8
Commitments and Contingencies (Details Textual) (USD $)
1 Months Ended 12 Months Ended
Dec. 20, 2012
Dec. 31, 2013
Dec. 31, 2012
Sep. 30, 2014
Commitments And Contingencies [Line Items]        
Payments for Legal Settlements     $ 2,100,000  
Settlement benefit (Note 3)   100,000    
Additional Royalties and Commissions, Accrual Interest Percentage   3.25%    
Additional Royalties and Commissions Payable, Installment Amount 100,000 100,000    
Additional Annual Installment Includes In Other Current Liability       100,000
Additional Annual Installment Includes In Other Long Term Obligation   200,000    
Litigation Settlement Interest   $ 13,000    

Transactions Affecting Stockholders' Equity (Details Textual)

v2.4.0.8
Transactions Affecting Stockholders' Equity (Details Textual) (USD $)
3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended 1 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2014
Sep. 30, 2013
Dec. 31, 2013
Sep. 30, 2014
Settlement Agreement [Member]
Sep. 30, 2014
Settlement Agreement [Member]
May 28, 2014
2014 Equity Line of Credit [Member]
Nov. 21, 2012
2014 Equity Line of Credit [Member]
Sep. 30, 2014
2014 Equity Line of Credit [Member]
Sep. 30, 2014
Plan 1997 [Member]
Sep. 30, 2013
Plan 2010 [Member]
Sep. 30, 2013
Plan 2010 [Member]
Sep. 30, 2014
Plan 2010 [Member]
Sep. 30, 2014
Directors Plan 2010 [Member]
Sep. 30, 2014
Amended Option Plan 1997 [Member]
Sep. 30, 2013
Common Stock [Member]
Sep. 30, 2014
Common Stock [Member]
Sep. 30, 2014
Common Stock [Member]
Dutchess [Member]
2012 Equity Line of Credit [Member]
Stockholders' Equity [Line Items]                                      
Maximum Number Of Common Stock Authorized For Issuance Over 36 Months                 2,500,000                    
Maximum Amount Entitled To Put To Investor In One Draw Down Notice, Percentage Of Average Daily Volume On Trading Day                 500.00%                    
Maximum Amount Entitled To Put To Investor In One Draw Down Notice                 $ 250,000                    
Investory Right To Use Excess Proceeds, Maximum Percentage                 5.00% 5.00%                  
Share Purchase Put Restrictions Maximum Percentage Of Ownership Held By Investor To Purchase Shares In Equity Line Of Credit                 9.99% 4.99%                  
Stock Issued During Period Shares Under Specific Agreement                                     698,207
Stock Issued During Period Value Specific Agreement                                     1,200,000
Options outstanding - Shares                     67,000                
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized                           1,600,000 425,000        
Share Based Compensation Arrangement By Share Based Payment Award, Options, Deemed Cancelled                           581,750          
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Net of Forfeitures                       15,000 15,000     4,500,000      
Share Based Compensation Arrangement By Share Based Payment Award Options Grants In Period Common Stock Shares Unissued                     2,500,000                
Equity Method Investment Ownership Percentage Required For Rights Exercisable Under Right Agreement     15.00%                                
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures and Expirations in Period                     1,481,750                
Equity Line, Purchase Price Percentage                 95.00% 95.00%                  
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant                     900,000     267,159 176,135        
Cash Less Exercise Of Right Terms     In the event of a cashless exercise of the Right and the acquirer has acquired less than 50% beneficial ownership of the Company                                
Share Based Compensation Arrangement By Share Based Payment Option Expiration Terms     No incentive stock option could be exercisable more than ten years after the date of grant or five years after the date of grant where the individual owns more than ten percent of the total combined voting power of all classes of stock. Stockholders approved the 1997 Plan in Fiscal 1998.                                
Class of Warrant or Right, Exercise Price of Warrants or Rights $ 45   $ 45                                
Common Stock, Shares, Issued 24,696,786   24,696,786   21,437,059         2,561,520                  
Agreement Term               36 months                      
Purchase Price Value                   500,000                  
Proceeds From Issuance Of Common Stock     4,909,000 195,000           3,700,000                  
Common Stock, Capital Shares Reserved for Future Issuance               3,000,000   438,480                  
Percentage of Discount on Exercise of Right     50.00%                                
Stock Granted During Period Shares Employment Agreement                                 16,470    
Common Stock, Shares, Outstanding           3,896,764 3,896,764                        
Proceeds from Other Equity             440,000                        
Loss Contingency Accrual, Payments             500,000                        
Related Party Costs             37,000                        
Treasury Stock, Shares, Acquired             3,896,764                     3,896,764  
Additional Paid In Capital, Common Stock 53,811,000   53,811,000   43,607,000 5,100,000 5,100,000                        
Common Stock, Par or Stated Value Per Share $ 0.0005   $ 0.0005   $ 0.0005 $ 1.31 $ 1.31                        
General and Administrative Expense, Total 1,917,000 1,306,000 6,228,000 4,521,000   97,000 97,000                        
Accrued Liabilities, Fair Value Disclosure           $ 1,300,000 $ 1,300,000                        

Income Taxes (Details Textual)

v2.4.0.8
Income Taxes (Details Textual) (USD $)
In Millions, unless otherwise specified
12 Months Ended
Dec. 31, 2013
State and Local Jurisdiction [Member]
 
Income Taxes [Line Items]  
Operating Loss Carry forwards Expiration Dates Description Fiscal 2018 through Fiscal 2032
Deferred Tax Assets, Operating Loss Carryforwards, State and Local $ 20.4
Domestic Tax Authority [Member]
 
Income Taxes [Line Items]  
Deferred Tax Assets, Operating Loss Carryforwards, Domestic $ 34.7
Operating Loss Carry forwards Expiration Dates Description Fiscal 2020 through Fiscal 2032

Investment in a Joint Venture (Details Textual)

v2.4.0.8
Investment in a Joint Venture (Details Textual) (USD $)
3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2014
Sep. 30, 2014
Dec. 31, 2010
Dec. 31, 2013
Sep. 30, 2013
Dec. 31, 2012
Schedule of Investments [Line Items]            
Stock Issued During Period, Value, New Issues   $ 4,909,000        
Payments To Fund Joint Venture Investments     500,000      
Maximum Amount Committed Towards Contributions In Joint Venture     2,000,000      
Cash and cash equivalents 4,953,000 4,953,000   1,638,000 751,000 572,000
Acquisition of product license     3,600,000      
Finite-Lived Intangible Assets, Useful Life (in years)     12 years 6 months      
Ownership Percentage In Joint Venture     50.00%      
Asset Impairment Charges 3,600,000 3,600,000        
PSI Parent [Member]
           
Schedule of Investments [Line Items]            
Stock Issued During Period, Shares, New Issues     1,440,000      
Stock Issued During Period, Value, New Issues     2,600,000      
Payments To Fund Joint Venture Investments     1,000,000      
Cash and cash equivalents $ 374,000 $ 374,000        

Earnings (Loss) Per Share (Details)

v2.4.0.8
Earnings (Loss) Per Share (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2014
Sep. 30, 2013
Earnings Loss Per Share [Line Items]        
Basic earnings (loss) per share $ (3,216) $ 1,236 $ (7,158) $ (193)
Basic earnings (loss) per share - Shares (in shares) 18,208 15,860 17,216 15,819
Basic earnings (loss) per share - EPS (in dollars per share) $ (0.18) $ 0.08 $ (0.42) $ (0.01)
Dilutives:        
Options 0 0 0 0
Options - Shares (in shares) 0 447 0 0
Options - EPS (in dollars per share) $ 0 $ 0 $ 0 $ 0
Diluted income (loss) per share $ (3,216) $ 1,236 $ (7,158) $ (193)
Diluted income (loss) per share - Shares (in shares) 18,208 16,307 17,216 15,819
Diluted income (loss) per share - EPS (in dollars per share) $ (0.18) $ 0.08 $ (0.42) $ (0.01)