10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

(MARK ONE)

S	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2013

OR

£	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	FOR THE TRANSITION PERIOD FROM                      TO                     .

COMMISSION FILE NUMBER 001-35379

LUCID, INC.

(Exact name of registrant as specified in its charter)

New York	16-1406957
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
95 Methodist Hill Drive, Suite 500 Rochester, NY	14623
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code (585) 239-9800

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  £

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (Check one):

Large accelerated filer    £    Accelerated filer    £    Non-accelerated filer    £    Smaller reporting company    S

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  £    No  S

As of May 1, 2013, 8,507,374 shares of Registrant’s common stock were outstanding.

LUCID, INC.

Quarterly Report on Form 10-Q

For the Period Ended March 31, 2013

Table of Contents

		Page No.
Part I	FINANCIAL INFORMATION
Item 1.	Financial Statements	3
	Unaudited Condensed Consolidated Balance Sheets as of March 31, 2013 and December 31, 2012	3
	Unaudited Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2013 and 2012	4
	Unaudited Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2013 and 2012	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	10
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	15
Item 4.	Controls and Procedures	16
Part II	OTHER INFORMATION
Item 1.	Legal Proceedings	16
Item 1A.	Risk Factors	16
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	16
Item 3.	Defaults Upon Senior Securities	16
Item 4.	Mine Safety Disclosures	17
Item 5.	Other Information	17
Item 6.	Exhibits	18
Signatures		19

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PART I        FINANCIAL INFORMATION

Item 1.         Financial Statements

LUCID, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 2013 AND DECEMBER 31, 2012

	March 31,			December 31,
	2013			2012
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	333,378		$	926,447
Accounts receivable		335,495			559,336
Inventories - net		753,532			926,236
Prepaid expenses and other current assets		165,393			49,155
Total current assets		1,587,798			2,461,174
PROPERTY AND EQUIPMENT – net		114,655			107,409
DEFERRED FINANCING COSTS – net		5,784			6,128
OTHER ASSETS		15,892			15,991
TOTAL ASSETS	$	1,724,129		$	2,590,702
LIABILITIES AND STOCKHOLDERS’ DEFICIT
CURRENT LIABILITIES:
Current portion of long-term debt– net	$	366,561		$	379,311
Accounts payable		1,026,813			955,514
Accrued expenses and other current liabilities		1,879,241			1,515,334
Current portion of deferred revenue		5,000			244,081
Total current liabilities		3,277,615			3,094,240
WARRANT LIABILITY		37,802			61,808
NOTES PAYABLE – RELATED PARTIES - net		6,715,102			6,698,386
OTHER LONG-TERM LIABILITIES		386,900			443,623
TOTAL LIABILITIES		10,417,419			10,298,057
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ DEFICIT:
Common Stock — par value $.01 per share; 60,000,000 authorized; 8,507,374 issued and outstanding on March 31, 2013 and December 31, 2012, respectively		85,074			85,074
Additional paid-in capital		38,746,486			38,679,627
Accumulated deficit		(47,524,850	)		(46,472,056	)
TOTAL STOCKHOLDERS’ DEFICIT		(8,693,290	)		(7,707,355	)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	1,724,129		$	2,590,702

See accompanying notes to unaudited condensed consolidated financial statements.

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LUCID, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2013 AND 2012

	Three Months Ended March 31,
	2013			2012
REVENUES	$	1,058,610		$	317,809
OPERATING EXPENSES:
Cost of revenue		748,397			495,297
General and administrative		450,188			1,388,400
Sales and marketing		338,789			709,937
Engineering, research and development		454,825			776,897
Total operating expenses		1,992,199			3,370,531
LOSS FROM OPERATIONS		(933,589	)		(3,052,722	)
OTHER EXPENSES:
Interest expense		(137,812	)		(65,311	)
Loss on extinguishment of debt		—			(306,778	)
Fair value adjustment of warrants		24,006			47,258
Other		(5,400	)		(3,091	)
NET LOSS	$	(1,052,795	)	$	(3,380,644	)
BASIC AND DILUTED NET LOSS PER COMMON SHARE	$	(0.13	)	$	(0.43	)
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING		8,384,708			7,792,221

See accompanying notes to unaudited condensed consolidated financial statements.

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LUCID, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31, 2013 AND 2012

	Three Months Ended March 31,
	2013			2012
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(1,052,795	)	$	(3,380,644	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		8,748			13,047
Stock-based compensation		66,959			655,726
Fair value adjustment of warrants		(24,006	)		(47,258	)
Loss on extinguishment of debt		—			306,778
Accretion of debt discount		16,716			104,228
Change in:
Accounts receivable		223,841			157,196
Inventories		172,704			78,352
Prepaid expenses and other current assets		(116,238	)		(70,333	)
Other assets		—			(15,163	)
Accounts payable		71,299			(169,707	)
Accrued expenses and other current liabilities		363,907			(121,159	)
Other liabilities		(295,804	)		165,450
Net cash used in operating activities		(564,669	)		(2,323,487	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment		(15,650	)		(93,365	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of debt		(12,750	)		(975,050	)
Issuance of common units		—			20,257
Issuance of common stock		—			2,640
Net cash used in financing activities		(12,750	)		(952,153	)
NET DECREASE IN CASH		(593,069	)		(3,369,005	)
CASH – Beginning of period		926,447			4,896,141
CASH – End of period	$	333,378		$	1,527,136
SUPPLEMENTAL CASH FLOW DATA – Cash paid for interest	$	—		$	46,962

See accompanying notes to unaudited condensed consolidated financial statements.

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LUCID, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2013 AND 2012

1. DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION

Lucid, Inc. operating as Caliber Imaging & Diagnostics, Inc., or Caliber I.D., (the "Company" or “Lucid”), is a medical device company that designs, manufactures and sells non-invasive cellular imaging devices that assist physicians in the early detection of disease. The Company sells its products in the United States and numerous foreign countries and is headquartered in Rochester, New York.

The Company’s unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. The financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair presentation of such information. All such adjustments are of a normal recurring nature. Although the Company believes that the disclosures are adequate to make the information presented not misleading, certain information and footnote disclosures have been condensed or omitted pursuant to such rules and regulations. This unaudited interim financial information should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2012. The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, sales, expenses, and related disclosures at the date of the financial statements and during the reporting period. Actual results could differ materially from these estimates. The year-end balance sheet data was derived and condensed from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. The results of operations for the three months ended March 31, 2013 are not necessarily indicative of the results for any subsequent period or for the entire fiscal year ending December 31, 2013.

Certain immaterial reclassification adjustments have been made to the prior year financial statements to reclassify certain operating costs from General and administrative to Cost of revenue, Sales and marketing, and Engineering, research and development in the accompanying condensed consolidated statements of operations to conform to the current year presentation.

As a cost-saving measure, in January 2013, the Company dissolved its wholly-owned subsidiary Lucid International, Inc. The dissolution of Lucid International, Inc. is not expected to have any significant impact on the Company’s financial position or results of operations.

2. LIQUIDITY AND CAPITAL RESOURCES

The Company has incurred net losses of approximately $1.1 million and $3.4 million for the three months ended March 31, 2013 and 2012, respectively. In addition, the Company had a stockholders’ deficit balance of approximately $8.7 million at March 31, 2013 and $7.7 million at December 31, 2012. Furthermore, the Company's current forecast for fiscal 2013 projects a significant net loss, and projects a need to raise additional capital to fund its operations in 2013 and beyond. The Company continues to explore strategic alternatives to finance its business plan, including but not limited to, private equity or debt financings or other sources, such as strategic partnerships. The Company is also focusing on increasing sales of its products to generate cash flows to fund its operations.

In May 2013, the Company reached an agreement to borrow $5.0 million from an affiliate of the Company under a Subsequent Term Note. See Note 6 – Note Payable – Related Parties for additional information. Proceeds from this note will be used for working capital requirements and for repaying scheduled principal payments on promissory notes and other long-term liabilities. If the Company does not close on the proceeds from this note, the Company will likely need to cease operations.

Assuming the Company closes on the Subsequent Term Note, it will then need to raise additional capital in the fourth quarter of 2013 and beyond, and such capital may not be available at that time or on favorable terms, if at all. The Company may seek to raise these funds through public or private equity offerings, debt financings, credit facilities, or partnering or other corporate collaborations and licensing arrangements. If adequate funds are not available or are not available on acceptable terms, the Company’s ability to fund its operations, take advantage of opportunities, develop products and technologies, and otherwise respond to competitive pressures could be significantly delayed or limited, and operations may need to downsized or halted.

There can be no assurance that the Company will be successful in its plans described above or in attracting alternative debt or equity financing. These conditions have raised substantial doubt about the Company's ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

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3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

There were no material changes to the summary of significant accounting policies disclosed in Note 3 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2012.

Fair Value Measurements — The Company considers warrants that are not indexed to the Company’s own stock to be classified as Level 3 in the fair value hierarchy. Level 3 valuations are based on inputs that are unobservable and significant to the overall fair value measurement. The degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. During the three months ended March 31, 2013 and 2012, the Company did not grant any warrants not indexed to the Company’s own stock. The following table presents the change in Level 3 liabilities:

	Three Months Ended
	March 31,
	2013			2012
Balance at January 1	$	61,808		$	687,580
Fair value adjustment		(24,006	)		(47,258	)
Balance at March 31	$	37,802		$	640,322

The fair value of these warrants was derived using the Black-Scholes pricing model.  The most significant input to the model is the Company’s stock price, which the Company estimated to be $1.25 and $3.35 at March 31, 2013 and 2012, respectively; however, a 1% increase or decrease in this input would not result in a material change in estimate.

The Company’s financial instruments consist principally of accounts receivable, accounts payable and debt. The Company classifies its outstanding debt as Level 2 in the fair value hierarchy and estimated that its carrying value approximated fair value as of March 31, 2013. This estimate is based on acceptable valuation methodologies which use market data of similarly sized and situated debt issuers.

Recently Issued Accounting Pronouncements—In the normal course of business, the Company evaluates all new accounting pronouncements issued by the Financial Accounting Standards Board, Securities and Exchange Commission, Emerging Issues Task Force, American Institute of Certified Public Accountants and other authoritative accounting bodies to determine the potential impact they may have on the Company's Consolidated Financial Statements. Based upon this review, management does not expect any of the recently issued accounting pronouncements to have a material impact on the Company's consolidated financial statements.

4. INVENTORIES

        The components of inventories are as follows at:

	March 31, 2013			December 31, 2012
Raw materials	$	579,016		$	659,149
Finished goods		241,455			334,026
Offsite demo equipment		96,566			96,566
Less inventory reserve		(163,505	)		(163,505	)
	$	753,532		$	926,236

Offsite demo equipment represents the cost of products physically located at customer locations, during an orientation period for which the Company retains title. As such, no depreciation expense has been recorded on these units. The inventory reserve at March 31, 2013 includes amounts necessary to adjust the Company’s inventory and offsite demo equipment to net realizable value following the Company’s release of newly redesigned products in 2012.

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5. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities consisted of the following at:

	March 31, 2013		December 31, 2012
Compensation and benefits	$	565,267	$	635,039
Interest		386,541		265,719
Product warranty liability		281,000		263,000
Customer deposits		237,434		79,384
Insurance		66,211		—
Rent		42,994		39,674
Professional fees		13,900		21,388
Other		285,894		211,130
	$	1,879,241	$	1,515,334

In 2012, the Company and certain officers of the Company mutually agreed to terminate their employment relationships (See Note 8 - Reduction in Force).  At March 31, 2013, $0.4 million was included in “ Compensation and benefits” in the table above for the current portion of these liabilities. 

Customer deposits represent advances paid to the Company by customers for the purchase of equipment.

6. NOTE PAYABLE—RELATED PARTIES

In July 2012, the Company borrowed $7.0 million from an affiliate of the Company pursuant to a Loan and Security Agreement (the “2012 Term Loan”). The 2012 Term Loan refinanced a previous loan and matures in July 2017. The Company may prepay the 2012 Term Loan at any time, subject to certain notice requirements. The 2012 Term Loan bears interest at a rate of 7% per annum, payable quarterly commencing in July 2014, and is secured by all of the Company’s assets. In connection with the closing of the 2012 Term Loan, the Company issued 167,164 shares of the Company’s common stock to the affiliate. The Company allocated the debt proceeds between the debt and common stock based on the relative fair value of each financial instrument, resulting in a debt discount of $0.3 million which was amortized to interest expense over the term of 2012 Term Loan.

The 2012 Term Loan contains customary affirmative and negative covenants, including covenants restricting the incurrence of debt, imposition of liens, the payment of dividends, and entering into affiliate transactions. At March 31, 2013 the Company was in compliance with all covenants. The 2012 Term Loan also contains customary events of default, including among others, nonpayment of principal or interest, material inaccuracy of representations and failure to comply with covenants. If an event of default occurs and is continuing under the 2012 Term Loan, the entire outstanding balance may become immediately due and payable.

In May 2013, the Company reached an agreement to borrow $ 5.0 million from an affiliate of the Company under a Subsequent Term Note (the “2013 Term Loan”). The 2013 Term Loan will mature in November 2014 and may be prepaid at any time. The 2013 Term Loan will bear interest at a rate of 7% per annum, payable upon maturity and will be secured by all of the Company’s assets. The 2013 Term Loan will include cross default provisions with the existing 2012 Term Loan. If the Company does not close on the proceeds from this note, the Company will likely need to cease operations.

7. DEBT

As of March 31, 2013 and December 31, 2012, promissory notes outstanding totaled $0.4 million and $0.4 million, respectively, on two notes which do not accrue interest. As of March 31, 2013, the principal of the first note of $0.3 million was classified as a current liability because it matures in 2013, and the principal of the second note of $0.1 million was classified as current because in January 2013 the Company did not make a mandatory payment resulting in the promissory note becoming immediately callable by the creditor and, therefore, classified the note as a current liability on the accompanying condensed consolidated balance sheets.   

8. REDUCTION IN FORCE

In 2012, the Company implemented restructuring plans resulting in force reductions to streamline the Company’s infrastructure and lower overall operating expenses.  In addition, in January, June, and September 2012, the Company and certain officers of the Company mutually agreed to terminate their employment relationships.  As a result of these reductions in force, the Company recognized expenses of $0 and approximately $0.3 million during the three months ended March 31, 2013 and 2012, respectively. At March 31, 2013, approximately $0.8 million was accrued for these liabilities, of which approximately $0.4 million was long-term in nature to be paid in installments through the first quarter of 2016 and was recorded as “Other Long-Term Liabilities” on the Company’s accompanying condensed consolidated balance sheets.

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9. NET LOSS PER COMMON SHARE DATA

The following table sets forth the computation of basic and diluted net loss attributable to common stockholders per common share, as well as a reconciliation of the numerator and denominator used in the computation:

	Three months ended March 31,
	2013			2012
Net loss	$	(1,052,795	)	$	(3,380,644	)
Denominator:
Weighted-average common shares outstanding		8,384,708			7,792,221
Basic and diluted net loss per common share	$	(0.13	)	$	(0.43	)

The following equivalent shares were excluded from the calculation of diluted loss per share as their impact would have been anti-dilutive:

	Three months ended March 31,
	2013		2012
Options to purchase common stock		685,000		1,895,274
Warrants		1,981,661		2,215,680
Restricted stock		122,667		122,667

10. SEGMENT INFORMATION

The Company operates in one reportable segment—the research, development and sale of medical devices to diagnose skin disease. The Company's chief operating decision maker reviews financial information for the Company as a whole for purposes of allocating resources and evaluating financial performance. Substantially all long-lived assets of the Company are in the United States. Sales for each significant geographical area are as follows:

	Three months Ended March 31,
	2013					2012
	Product Sales		Percent			Product Sales		Percent
	(in millions)					(in millions)
North America	$	0.4		39	%	$	0.1		39	%
Europe		0.4		37	%		0.2		61	%
Asia		0.3		24	%		—		—
Total	$	1.1		100	%	$	0.3		100	%

11. SUBSEQUENT EVENTS

We have evaluated subsequent events after the balance sheet date through the date of filing of these consolidated financial statements with the Securities and Exchange Commission for appropriate accounting and disclosure and concluded that there were no subsequent events requiring adjustment or disclosure in these consolidated financial statements, other than those discussed below.

In May 2013, the Company reached an agreement to borrow $5.0 million from an affiliate of the Company under a Subsequent Term Note. See Note 6 - Note Payable - Related Parties for additional information. The 2013 Term Loan will mature in November 2014 and may be prepaid at any time. The 2013 Term Loan will bear interest at a rate of 7% per annum, payable upon maturity and will be secured by all of the Company’s assets. The 2013 Term Loan will include cross default provisions with the existing 2012 Term Loan. If the Company does not close on the proceeds from this note, the Company will likely need to cease operations.

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FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q and the information incorporated herein by reference contain forward-looking statements that involve a number of risks and uncertainties including information with respect to our plans and strategy for our business and related financing, thereof, contain forward-looking statements that involve risks, uncertainties and assumptions. All statements that express expectations, estimates, forecasts or projections are forward-looking statements. Words such as “expects”, “anticipates”, “intends”, “plans”, “believes”, “seeks”, “estimates”, “projects”, “forecasts”, “may”, “should”, and variations of such words and similar expressions are intended to identify such forward-looking statements. These statements include but are not limited to statements under the captions “Business”, “Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” as well as other sections in this Quarterly Report on Form 10-Q. You should be aware that the occurrence of any of the events discussed under the heading “Item 1A. Risk Factors” and elsewhere in this report could substantially harm our business, results of operations and financial condition and that if any of these events occurs, the trading price of our securities could decline and you could lose all or a part of the value of your shares of our securities. The cautionary statements made in this report are intended to be applicable to all related forward-looking statements wherever they may appear in this Quarterly Report on Form 10-Q. We urge you not to place undue reliance on these forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q. Except as required by law, we assume no obligation to update our forward-looking statements, even if new information becomes available in the future.

Unless the context otherwise indicates, references in this report to the terms “Lucid”, “the Company”, “we,” “our” and “us” refer to Lucid, Inc. operating as Caliber Imaging & Diagnostics, Inc., or Caliber I.D., and its subsidiary if pertaining to the period before January 29, 2013.

Item 2.         Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and related notes. In addition to historical information, some of the information in this discussion and analysis contains forward-looking statements reflecting our current expectations and involves risk and uncertainties. For example, statements regarding our expectations as to our plans and strategy for our business, future financial performance, expense levels and liquidity sources are forward-looking statements. Our actual results and the timing of events could differ materially from those discussed in our forward-looking statements as a result of many factors, including those set forth under “Risk Factors” in Part I, Item 1A in our Annual Report on Form 10-K for the year ended December 31, 2012, as updated in Part II, Item 1A in this Quarterly Report on Form 10-Q.

Overview

We are a medical device company that designs, manufactures and sells non-invasive cellular imaging devices enabling physicians to image and diagnose skin disease in real time without a biopsy versus an invasive or surgical biopsy. Devices using our Rapid Cell ID technology allow physicians to detect and diagnose skin disease, including basal cell carcinoma, melanoma, and inflammatory and pigmentary disorders. Rapid Cell ID technology offers physicians the option to non-invasively diagnose, monitor and follow-up the non-invasive treatment of basal cell carcinoma, and includes the capacity to visualize the margins of the disease prior to surgery, improving patient outcomes. We have developed an integrated platform of tools, including the VivaScope® 1500, VivaScope® 2500 and VivaScope® 3000 Rapid Cell ID Imagers along with our telepathology service that can be used by doctors, surgeons, and research laboratories. Our tools are already in use by doctors and researchers in major academic hospitals as well as at pharmaceutical and large cosmetic companies.

Our telepathology server, when connected to a physician’s VivaScope imager, transfers images from a physician’s office or operating room to another physician, pathologist or other diagnostic reader for near real-time diagnosis and reporting. In addition, the telepathology server stores images and pathology reports as a part of a patient’s HIPAA compliant permanent, electronic, medical record increasing efficiency and reducing costs for medical institutions compared to current histology record retention processes.

We have devoted substantially all of our resources to the development of our Rapid Cell ID technology and telepathology service, which expenses have included research and development, conducting clinical investigations for our product candidates, protecting our intellectual property and the general and administrative support of these operations. While we have generated revenue through product sales, we have funded our operations largely through an initial public equity offering and multiple rounds of private debt and equity financings. We have never been profitable and we reported net losses of approximately $1.1 million and $3.4 million for the three months ended March 31, 2013 and 2012, respectively. As of March 31, 2013, we had an accumulated stockholders’ deficit of approximately $8.7 million. We expect to incur operating losses for the foreseeable future as we invest substantial resources to promote the commercialization, and attempt to achieve widespread adoption, of our products. We will need to raise additional capital in the fourth quarter of 2013 and beyond. Adequate additional funding may not be available to us on acceptable terms, or at all. We expect that research and development expenses and sales and marketing expenses will increase along with general and administrative costs, as we grow and operate as a public company. We will need to generate significant revenues to achieve profitability and we may never do so.

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Our revenues primarily consist of the sale of our products and services, primarily VivaScopes, as well as an immaterial amount of revenue from maintenance and support services. We recognize product revenue when evidence of an agreement exists, title has passed (generally upon shipment) or services have been rendered. When product sales do not include installation or training, such as for all distributor sales and many direct sales, revenue is recognized upon shipment. Certain direct sales contracts require installation at the customer's location prior to acceptance. As such, revenue recognition on these contracts is delayed until all aspects of delivery, including installation, are complete. In addition, should the contract include training, revenue recognition is delayed until training is complete.

Our Rapid Cell ID technology platform includes:

· In-Vivo Confocal Imagers. The VivaScope 1500 and the VivaScope 3000 (handheld device) confocal systems are cleared with a FDA 510(k) to acquire, store, retrieve, display and transfer in-vivo images of tissue, including blood collagen and pigment, in exposed unstained epithelium and the supporting stroma for review by physicians to assist in forming a clinical judgment. We designed our VivaScope System to support the capture of: (i) clinical images of the patient; (ii) images of the patient’s lesions; and (iii) confocal images of the patient’s lesions that can be evaluated at the point of care or transmitted over our HIPAA compliant telepathology network to a pathologist.

· Ex-Vivo Confocal Imagers. The VivaScope 2500 produces electro-optically enlarged images of unstained and unsectioned excised surgical tissue for medical purposes. The VivaScope 2500 is a Class I medical device and is exempt from FDA 510(k). We are developing the VivaScope 2500 confocal imager for the rapid imaging of tissue that has been surgically excised from the body. We expect these devices, which are intended to require little or no tissue preparation to render images similar to those obtained using traditional histology techniques will streamline the practice of conventional laboratory pathology for excised tissue analysis.

· Telepathology. Our telepathology server is a Digital Imaging and Communications in Medicine (DICOM) standard compliant medical grade image server. The DICOM standard, established and in use since 1993, is a global technology standard for all aspects of the communication of medical images and is used in virtually all hospitals world-wide, ensuring that every hospital and medical imaging center is a potential customer. Our telepathology server is registered with the FDA as a Class I medical image device, which categorizes it as a radiology diagnostic device, for the storage, transfer and retrieval of images between physicians and diagnostic readers, typically pathologists.

During the first quarter of 2012, we began a program to enhance the functionality of our existing In-Vivo Confocal Imagers (the “2012 Enhancement Program”) which was substantially completed by September 30, 2012. During the 2012 Enhancement Program we redesigned many optical and electrical components within our in-vivo confocal imagers to increase speed and functionality. Our redesigned products generate images of the highest level of optical quality with greater reliability and repeatability. We have also improved the user interface with a touch-screen monitor and an ergonomic redesign of the handheld device. During the 2012 Enhancement Program, sales of our existing products slowed, as our customers waited to place orders for the redesigned products.

We are an “emerging growth company”, or “EGC” as defined in the Jumpstart Our Business Startups Act, or the JOBS Act, and we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, exemptions from the requirements of holding a nonbinding advisory vote on executive compensation, from which we are currently exempt as a smaller reporting company, and stockholder approval of any golden parachute payments not previously approved in connection with a transaction resulting in a change of control. We expect to take advantage these exemptions. If we do take advantage of any of these exemptions, we do not know if some investors will find our common stock less attractive as a result. The result may be a less active trading market for our common stock and the stock price may be more volatile.

In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended, for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.

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We could remain an “emerging growth company” for up to five years, or until the earliest of (i) the last day of the first fiscal year in which our annual gross revenues exceed $1 billion, (ii) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended, which would occur if the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter, or (iii) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three year period. Please see Part II, Item 1A Risk Factors.

Results of Operations

Three Month Periods Ended March 31, 2013 and 2012

We reported a consolidated net loss of $1.1 million or $(0.13) per share for the period ended March 31, 2013 as compared to a consolidated net loss of $3.4 million or $(0.43) per share for the period ended March 31, 2012. Decreased net losses for the three months ended March 31, 2013 resulted from increased sales and an overall decrease in operating expenses as compared to the three months ended March 31, 2012.

The following presents a more detailed discussion of our consolidated operating results:

Revenues.    For the period ended March 31, 2013 and 2012, we recorded sales of our products of $1.1 million and $0.3 million, respectively. The increase was primarily attributed to increases in sales of $0.3 million in North America, $0.2 million in Europe and $0.3 million in Asia. During 2012, we began a significant enhancement program to increase the speed and functionality of our VivaScope confocal imagers which was substantially completed by September 30, 2012. We believe that sales of our existing products were negatively impacted for the first three quarters of 2012 primarily because we informed our key distributors at the end of 2011 about the 2012 Enhancement Program. At March 31, 2013, a majority of our payables were past due resulting in a number of vendors putting the Company on credit hold which may adversely impact the results of our second quarter.

Percentages of total sales by geographic region are as follows:

	Three Months Ended March 31,
	2013					2012
	Product Sales		Percent			Product Sales		Percent
	(in millions)					(in millions)
North America	$	0.4		39	%	$	0.1		39	%
Europe		0.4		37	%		0.2		61	%
Asia		0.3		24	%
Total	$	1.1		100	%	$	0.3		100	%

Cost of revenue.    For the period ended March 31, 2013 and 2012, we incurred cost of revenue of $0.7 million and $0.5 million, respectively. As a percentage of product sales, cost of revenue was 71% and 156% for the periods ended March 31, 2013 and 2012, respectively. The increase in absolute dollars of cost of sales reflects a significant increase in sales compared to the period ended March 31, 2012. Increases in warranty repairs as well as charges to increase our warranty reserves during the period ended March 31, 2013 also increased cost of revenue as compared to the comparable period of the prior year.

General and administrative expenses.    General and administrative expenses consist primarily of salaries and benefits, professional fees, including those associated with being a public company, occupancy costs for our facilities, insurance costs and general corporate expenses. For the period ended March 31, 2013, general and administrative expenses totaled $0.5 million, a decrease of $0.9 million from the same period last year. The decrease resulted primarily from a $0.3 million decrease in stock based compensation costs, a $0.3 million decrease in legal and accounting fees, and a $0.3 million decrease in severance costs.

Sales and marketing expenses.    Sales and marketing expenses consist primarily of salaries and benefits and general marketing expenses. For the period ended March 31, 2013, sales and marketing expenses totaled $0.4 million, a decrease of $0.3 from the same period in the prior year. The decrease in sales and marketing expenses primarily resulted from a decrease of $0.2 million in expenses related to physician education, reimbursement consulting and marketing support as well as a decrease in stock based compensation expenses of $0.1 million.

Engineering, research and development expenses.    Engineering, research and development expenses consist primarily of salaries and benefits and material costs used in the development of new products and product improvements. For the period ended March 31, 2013, engineering, research and development expenses totaled $0.5 million, a decrease of $0.3 million from the same period in the prior year. The decrease in engineering, research and development expenses primarily resulted from a $0.2 million decrease in stock-based compensation charges and a $0.1 million decrease in severance costs.

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Interest expense.    Interest expense increased $73,000 from $65,000 for the period ended March 31, 2012 to $138,000 for the period ended March 31, 2013. The increase in interest expense was a result of the accrual of interest associated with the 2012 Term Loan.

Fair value adjustment of warrants expense.    For the period ended March 31, 2013 and 2012, we recognized income of $24,000 and $47,000 in income, respectively, to record changes in the fair value of certain of our outstanding warrants not indexed to our own stock.

Liquidity and Capital Resources

As of March 31, 2013, we had $1.6 million in current assets and $3.3 million in current liabilities, resulting in a working capital deficit of $1.7 million. As of December 31, 2012, we had $2.5 million in current assets and $3.1 million in current liabilities, respectively, resulting in a working capital deficit of $0.6 million. Our working capital decreased during the three months ended March 31, 2013 primarily as a result of the net operating loss during the period. Our current assets consist of cash, accounts receivable, inventories, prepaid expenses and other. Our current liabilities consist of the current portion of our long-term debt, accounts payable, accrued expenses, and deferred revenue.

We anticipate that we will continue to generate losses for at least the next year as we develop and expand our product offerings and seek to commercialize our products and expand our corporate infrastructure. In May 2013, the Company reached an agreement to borrow $5.0 million from an affiliate of the Company under a Subsequent Term Note. Assuming the Company closes on the Subsequent Term Note, we will then need additional capital to fund our operations in the fourth quarter of 2013 and beyond. If the Company does not close on the proceeds from this note, the Company will likely need to cease operations.

We will require significant amounts of additional capital, and such capital may not be available when we need it on terms that we find favorable, if at all. We may seek to raise these funds through public or private equity offerings, debt financings, credit facilities, or partnering or other corporate collaborations and licensing arrangements. If adequate funds are not available or are not available on acceptable terms, our ability to fund our operations, take advantage of opportunities, develop products and technologies, and otherwise respond to competitive pressures could be significantly delayed or limited, and we may need to downsize or halt our operations. Prevailing market conditions may not allow for such a fundraising or new investors may not be prepared to purchase our securities at prices that are greater than the purchase price of shares sold in our initial public offering.

Because of the numerous risks and uncertainties associated with research, development and commercialization of medical devices, we are unable to estimate the exact amounts of our working capital requirements. Our future funding requirements will depend on many factors, including, but not limited to:

· the cost of development and growth of our VivaScope business;

· the cost of commercialization activities of our products, and of our future product candidates, including marketing, sales and distribution costs;

· the number and characteristics of any future product candidates we pursue or acquire;

· the scope, progress, results and costs of researching and developing our future product candidates, and conducting clinical trials;

· the timing of, and the costs involved in, obtaining regulatory approvals for our future product candidates;

· the cost of manufacturing our existing VivaScope products and maintaining our telepathology server, as well as such costs associated with any future product candidates we successfully commercialize;

· our ability to establish and maintain strategic partnerships, licensing or other arrangements and the financial terms of such agreements;

· the costs involved in preparing, filing, prosecuting, maintaining, defending and enforcing patent claims, including litigation costs and the outcome of such litigation; and

· the timing, receipt and amount of sales of, or royalties on, our future products, if any.

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Summary of Cash Flows

	For the three months ended March 31,
	2013			2012
Operating activities	$	(564,669	)	$	(2,323,487	)
Investing activities		(15,650	)		(93,365	)
Financing activities		(12,750	)		(952,153	)
Net (decrease) in cash and cash equivalents		(593,069	)		(3,369,005	)

Net cash used in operating activities.    Cash used in operating activities was $0.6 million and $2.3 million for the three months ended March 31, 2013 and 2012, respectively. The decrease in cash used in operating activities resulted from the decrease in net loss of $2.3 million, partially offset by a $1.0 million decrease in non-cash items including $0.6 million in stock based compensation and $0.3 million in loss on extinguishment of debt. Also offsetting the decrease in net loss is a decrease of $0.5 million in other liabilities relating to the decrease in severance liabilities over the period ended March 31, 2012.

Net cash used in investing activities.    Cash used in investing activities was $16,000 and $0.1 million for the three months ended March 31, 2013 and 2012, respectively, and represents the purchases of fixed assets during these periods.

Net cash used in financing activities.    Cash used in financing activities was $13,000 for the three months ended March 31, 2013 due to the repayments made on promissory notes outstanding. Cash used in financing activities was $1.0 million for the three months ended March 31, 2012 primarily due to payments on the Company’s 2011 Credit Facility and a final cash payment of $0.6 million of principal to certain holders of the 2010/2011 Convertible Debt Offering that did not convert to equity at the close of our IPO.

Term Loans. In July 2012, we borrowed $7.0 million from an affiliate pursuant to a Loan and Security Agreement (the “2012 Term Loan”), which refinanced a previous loan in the amount of $3.0 million. The 2012 Term Loan matures in July 2017 although we may prepay the note at any time, subject to certain notice requirements. The 2012 Term Loan bears interest at a rate of 7% per annum, payable quarterly commencing in July 2014 and is secured by all of the Company’s assets.

The 2012 Term Loan contains customary affirmative and negative covenants, including covenants restricting the incurrence of debt, imposition of liens, the payment of dividends, and entering into affiliate transactions. The 2012 Term Loan also contains customary events of default, including among others, nonpayment of principal or interest, material inaccuracy of representations and failure to comply with covenants. If an event of default occurs and is continuing under the 2012 Term Loan, the entire outstanding balance may become immediately due and payable.

In May 2013, the Company reached an agreement to borrow $5.0 million from an affiliate of the Company under a Subsequent Term Note (the “2013 Term Loan”). The 2013 Term Loan will mature in November 2014 and may be prepaid at any time. The 2013 Term Loan will bear interest at a rate of 7% per annum, payable upon maturity and will be secured by all of the Company’s assets. The 2013 Term Loan will include cross default provisions with the existing 2012 Term Loan. If the Company does not close on the proceeds from this note, the Company will likely need to cease operations.

Promissory Notes.    As of March 31, 2013 and December 31, 2012, promissory notes outstanding totaled $0.4 and $0.4 million, respectively, on two notes which do not accrue interest. As of March 31, 2013, the principal of the first note of $0.3 million was classified as a current liability because it matures in 2013, and the principal of the second note of $0.1 million was classified as current because in January 2013 the Company did not make a mandatory payment resulting in the promissory note becoming immediately callable by the creditor and, therefore, classified the note as a current liability on the accompanying condensed consolidated balance sheet.      

Trade Payables and Receivables.    As of March 31, 2013 and December 31, 2012, we had approximately $0.1 million and $0.2 million, respectively, of accounts payable which were aged over 180 days. At March 31, 2013, a majority of our payables were past due resulting in a number of vendors putting the Company on credit hold which may adversely impact the results of our second quarter. Management has reached agreements with certain of these vendors to pay overdue amounts over time. Generally, the terms for our trade payables are 30 days from the date of receipt. Certain vendors require partial or full prepayment, especially for parts unique to Lucid orders.

As of March 31, 2013 and December 31, 2012, we had accounts receivable of approximately $0.3 and $0.6 million, respectively. We generally request 50% prepayment from all customers, with the balance due 30 days after shipment, although in certain circumstances we require the full balance prior to shipment. Amounts collected prior to the recognition of revenue are recognized as customer deposits and are included in "accrued expenses and other current liabilities."

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Warrants. At March 31, 2013, we had 1,981,661 warrants outstanding at a weighted average exercise price of $5.75. These warrants were issued primarily with historical convertible debt offerings, as well as in the common units sold in our recent initial public offering.

Stock Options. At March 31, 2013, we had 685,000 stock options outstanding at a weighted average exercise price of $3.15. In May 2013, we granted to employees, officers, directors, and a consultant a total of 2,716,000 stock options under our 2010 Long-Term Equity Incentive Plan and our 2012 Stock Option and Incentive Plan, reducing the total number of shares available for issuance upon the grant or exercise of awards to 700,500. As of the date of this report, we had a total of 3,341,000 stock options outstanding.

Off-Balance Sheet Arrangements

We had no off-balance sheet arrangements as of March 31, 2013 and as of the date of this report.

Recently Issued Accounting Pronouncements

In the normal course of business, management evaluates all new accounting pronouncements issued by the Financial Accounting Standards Board, SEC, Emerging Issues Task Force, American Institute of Certified Public Accountants and other authoritative accounting bodies to determine the potential impact they may have on our Consolidated Financial Statements. Based upon this review, we do not expect any of the recently issued accounting pronouncements to have a material impact on our consolidated financial statements.

Critical Accounting Policies and Estimates

During the quarter ended March 31, 2013, there were no significant changes in our critical accounting policies and estimates. Please refer to Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2012, for a more complete discussion of our estimates and critical accounting policies.

Item 3.         Quantitative and Qualitative Disclosures about Market Risk

We are not required to provide the information required by this Item because we are a smaller reporting company.

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Item 4.          Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) as of March 31, 2013. Based on that evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures as of March 31, 2013 were not fully effective for the items below in providing reasonable assurance that the information required to be disclosed by us in reports filed under the Securities Exchange Act of 1934 is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding disclosures. A controls system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the control system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

The senior management team and other key personnel perform monitoring and other key control activities to ensure the accuracy of the Company’s filings; however, these procedures are not fully documented or tested in a manner that supports a conclusion that these procedures are designed and operating effectively. Management intends to remediate these material weaknesses as soon as practicable after the Company’s financial position improves.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. In its assessment of the effectiveness of internal control over our financial reporting as of March 31, 2013, the Company determined that that there were control deficiencies that constituted the following material weaknesses:

· The Company has limited documentation of significant accounting policies, internal controls, management’s estimates and judgments and assessment of recent accounting pronouncements.

· The Company’s accounting department does not have sufficient personnel and resources, to test and implement effective procedures that support the accurate and timely reporting of our financial results.

Changes in Internal Control Over Financial Reporting

During the quarter ended March 31, 2013, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II      OTHER INFORMATION

Item 1.         Legal Proceedings

We are not currently subject to any material legal proceedings, nor, to our knowledge, is any material legal proceeding threatened against us. From time to time, we may be a party to certain legal proceedings, incidental to the normal course of our business. While the outcome of these legal proceedings cannot be predicted with certainty, we do not expect that these proceedings will have a material effect upon our financial condition or results of operations.

Item 1A.      Risk Factors

There were no material changes to the risk factors disclosed in Part I, Item 1A Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2012 (except to the extent additional factual information disclosed elsewhere in this Quarterly Report on Form 10-Q relates to such risk factors (including, without limitation, the matters discussed in Part I, Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations)).

Item 2.         Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3.         Defaults Upon Senior Securities

None.

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Item 4.         Mine Safety Disclosures

Not Applicable.

Item 5.         Other Information

The Company has prepared a presentation about the current and future state of the Company to present to potential investors, as well as current shareholders of the Company. A copy of this presentation is attached hereto as Exhibit 99.1.

In May 2013, the Company reached an agreement to borrow $5.0 million from an affiliate of the Company under a Subsequent Term Note. The executed Subsequent Term Note is attached hereto as Exhibit 10.1. The corresponding Intercreditor and Participation Agreement is attached hereto as Exhibit 10.2.

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Item 6.         Exhibits

*10.1	Subsequent Term Note, by and between the Company and Northeast LCD Capital, LLC dated May 20, 2013
*10.2	Intercreditor and Participation Agreement, by and between the Company and Northeast LCD Capital, LLC dated May 20, 2013
*31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
*31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
**32.1	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
**32.2	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
**99.1	2013 Spring Investor Presentation
††101	The following material from Lucid Inc.’s Quarterly Report on Form 10-Q, for the quarter ended March 31, 2013, formatted in XBRL (Extensible Business Reporting Language): (i) the Unaudited Condensed Consolidated Balance Sheets; (ii) the Unaudited Condensed Consolidated Statements of Operations; (iii) the Unaudited Condensed Consolidated Statements of Cash Flows; and (iv) the Notes to Unaudited Condensed Consolidated Financial Statements.

* Filed herewith.

** Furnished herewith.

†† XBRL information is furnished and not filed for purposes of Sections 11 and 12 of the Securities Act of 1933, as amended, and Section 18 of the Securities Exchange Act of 1934, as amended, and is not subject to liability under those sections, is not part of any registration statement or prospectus to which it relates and is not incorporated or deemed to be incorporated by reference into any registration statement, prospectus or other document.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

LUCID, INC.
By:	/s/ L. Michael Hone
	Name: L. Michael Hone Title: Chief Executive Officer

Date: May 20, 2013

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EX-10.1

Exhibit 10.1

Subsequent Term Note

For good value, on this date of May 20 , 2013, Lucid, Inc. (“Borrower”) promises to pay to the order of Northeast LCD Capital, LLC (“Lender”) and Northeast LCD Capital, LLC unconditionally promises to lend to Lucid, Inc. the sum of Five Million ($5,000,000.) Dollars, together with interest at the rate of 7% per annum on the unpaid balance, paid in the following manner:

Payments shall be first applied to interest and the balance to principal. This note may be prepaid at any time, in whole or in part, without penalty. This note shall, at the option of any holder hereof, be due and payable upon the:

1.        Failure to make payment of principal and interest by the maturity date which is eighteen months from the above date.

2.        Breach of the Loan and Security Agreement dated as of July 5, 2012 among Lucid, Inc. as Borrower and Northeast LCD Capital, LLC as Lender.

3.        Death, incapacity, dissolution or liquidation of any of the undersigned, or any endorser, guarantor or surety.

4.        Filing by Borrower of an assignment for the benefit of creditors, bankruptcy or other form of insolvency, or by suffering an involuntary petition in bankruptcy or receivership not vacated within sixty (60) days.

If this note shall be in default and placed for collection, the Borrower shall pay all reasonable attorney fees and costs of collection.

Payments shall be made to such address as may from time to time be designated by any holder.

Grant of Security Interest. Borrower hereby grants Lender, for the benefit of itself, to secure the payment and performance in full of all of the Obligations, a continuing security interest in, and pledges to Lender, for the benefit of itself the Collateral, wherever located, whether now owned or hereafter acquired or arising, and all proceeds and products thereof.

Priority of Security Interest. Borrower represents, warrants, and covenants that the security interest granted herein is and shall at all times continue to be a first priority perfected security interest in the Collateral (subject only to Permitted Liens that expressly have superior priority to Lender’s Lien under this Agreement) along with the first priority perfected security interest from the July 5, 2012 Loan and Security Agreement. If Borrower shall acquire a commercial tort claim, Borrower shall promptly notify Lender in a writing signed by Borrower of the general details thereof and grant to Lender in such writing a security interest therein and in the proceeds thereof, all upon the terms of this Agreement, with such writing to be in form and substance reasonably satisfactory to Lender.

If this Agreement is terminated, Lender’s Lien in the Collateral shall continue until the Obligations (other than inchoate indemnity obligations) are repaid in full in cash. Upon payment in full in cash of the Obligations (other than inchoate indemnity obligations), Lender shall, at Borrower’s sole cost and expense, release its Liens in the Collateral and all rights therein shall revert to Borrower.

The Borrower and any successors shall remain fully bound until this note is paid and waive demand, presentment and protest and all notices thereto and further agree to remain bound, notwithstanding any extension, modification, waiver, or other indulgence or discharge or release of any obligor hereunder or exchange, substitution, or release of any collateral granted as security for this note. No modification or indulgence by any holder hereof shall be binding unless in writing; and any indulgence on any one occasion shall not be an indulgence for any other or future occasion. The rights of any holder hereof shall be cumulative and not necessarily successive. This note shall take effect as a sealed instrument and be governed and enforced in accordance with the laws of the State of New York.

Dated: May 20, 2013

Borrower: Lucid, Inc.		Lender: Northeast LCD Capital, LLC
By:	/s/ L. Michael Hone	By:	/s/ C. Wesley Crowell
	L. Michael Hone		C. Wesley Crowell
	Chief Executive Officer		Manager

EX-10.2

Exhibit 10.2

INTERCREDITOR AND PARTICIPATION AGREEMENT

Agreement made and entered into this day by and between NORTHEAST LCD CAPITAL, LLC, a Maine limited liability company ("Lender" and “Subsequent Lender”) and LUCID, INC., a New York corporation ("Borrower"). In consideration of the mutual covenants contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree as follows:

1.        Reference is made to a certain Loan And Security Agreement dated as of July 5, 2012, executed between Borrower and Lender (the "Security Agreement"). Said Security Agreement secures an original principal amount of $7,000,000.00.

2.        Provision “2.2 ("Term Loans") (b)” of the Security Agreement provides that additional lenders ("Subsequent Lenders") may make additional loans ("Subsequent Term Loans") to Borrower. Each Subsequent Lender of a Subsequent Term Loan shall become a party to the Security Agreement as a Subsequent Lender thereunder.

3.        Northeast LCD Capital, LLC, as a Subsequent Lender, is making a Subsequent Term Loan to Borrower in the amount of $5,000,000 as evidenced by a Term Note dated May 20, 2013. Pursuant to this Intercreditor and Participation Agreement, the $5,000,000.00 Subsequent Term Loan shall be included in and secured by the Security Agreement and all provisions thereof apply to this Subsequent Term Loan.

4.        The parties agree that any Intercreditor Agreement shall be at the sole discretion of Northeast LCD Capital, LLC and it shall have the sole discretion regarding collection and realization on all collateral pledge to secure the two loan positions.

In witness whereof, the undersigned sets their hands and seals of this 20 day of May, 2013.

	LUCID, INC ("Borrower")
/s/ Richard J. Pulsifer	By:	/s/ L. Michael Hone
Witness		L. Michael Hone, its CEO Thereunto duly authorized
	NORTHEAST LCD CAPITAL, LLC ("Lender" and "Subsequent Lender")
/s/ Scott Edmunds	By:	/s/ C. Wesley Crowell
Witness		C. Wesley Crowell Its Manager, Thereunder Duly Authorized

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

I, L. Michael Hone, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of Lucid, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 20, 2013

/s/ L. Michael Hone

L. Michael Hone

Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

I, Richard J. Pulsifer, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of Lucid, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 20, 2013

/s/ Richard J. Pulsifer

Richard J. Pulsifer

Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Lucid, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, L. Michael Hone, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

1.	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 20, 2013

/s/ L. Michael Hone

L. Michael Hone
Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Lucid, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Richard J. Pulsifer, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

1.	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 20, 2013

/s/ Richard J. Pulsifer

Richard J. Pulsifer
Chief Financial Officer

EX-99.1

Exhibit 99.1

“Imagine a future where dermatologists can offer patients non - invasive biopsies, a combination of optical technologies just finding their roles today…” - Daniel M. Siegel, MD P ast President of the American Academy of Dermatology, March 2013 AAD Presidential Address 1

This presentation contains statements about Lucid, Inc. operating as Caliber Imaging and Diagnostics, Inc. or Caliber I.D. future expectations, plans and prospects that constitute forward - looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934 as amended, including statements concerning the Company’s strategic goals and objectives relating to, among other things: geographic and market expansion; new product opportunities; sales and marketing initiatives; and research and development and financial projections. Actual results may differ materially from those indicated by these forward - looking statements as a result of various important factors, including risks relating to: the Company’s ability to successfully obtain and maintain regulatory approvals, develop and market existing and new products, maintain key intellectual property rights, manage competitive pressures, successfully execute on its plans and strategies for growth, and overcome adverse economic and market conditions, as well as those factors described in “Risk Factors” and elsewhere in the Company's Annual Report on Form 10 - K for the year ended December 31, 2012 and any subsequent Quarterly R eports on Form 10 - Q filed to date.. The forward - looking statements included in this presentation represent the Company's views as of the date of this presentation. The Company anticipates that subsequent events and developments will cause its views to change. While the Company may elect to update these forward - looking statements in the future, the Company specifically disclaims any obligation to do so. These forward - looking statements should not be relied upon as representing the Company’s views as of any date subsequent to the date of this presentation. Safe Harbor 2

• Caliber I.D. enables real time, non - invasive imaging at the cellular level. • New handheld device expected to lead to significant revenue growth. • The FDA cleared VivaScope ® System is a platform technology with multiple applications in skin disorders, the global research market and other specialties. • Regulatory approvals in all major markets. • Proven technology with over 450 units shipped. • M ore than 300 independently sponsored studies or publications. • Contracting for physician reimbursement with U.S. payers expected to commence in 6 - 12 months. • Attractive valuation when considering the market opportunity. Caliber Imaging & Diagnostics, Inc. (LCDX) Investment Highlights 3

• Optical biopsy. • Non - invasive. • In - vivo cellular level analysis. • Fast, painless diagnosis. FDA - Cleared Cellular Imaging and Diagnosis Technology Reflectance Confocal Microscopy ( RCM) VivaScope ® 3000 Confocal Imager VivaScope ® 1500 Confocal Imager FDA Clearance Indications for Use Statement (Class II, 510k): “The VivaScope System is intended to acquire, store, retrieve, display, and transfer in vivo images of tissue, including blood, collagen and pigment, in exposed unstained epithelium and the supporting stroma for review by physicians to assist in forming a clinical judgment.” 4

VivaScope ® 2500 FDA Class 1 Device VivaNet / VivaLAN FDA Class 1 Device VivaScope ® 3000 FDA 510(k) cleared VivaScope ® 1500 FDA 510(k) cleared Technology Platform Drives Multiple Imaging Devices Product Portfolio is a Full Suite of Complementary Devices In - Vivo Cellular Imager In - Vivo Cellular Imager E x - Vivo Cellular Imager Telepathology Technology protected with extensive patents 58 global patents issued and 20 patents pending 5

Patents 58 global patents issued and 20 patents pending Patented core technology with ancillary blocking patents that make the technology clinically viable and effectively protect our intellectual property for years to come. Patents cover: • T he imaging system technology. • I n - vivo and ex - vivo disease screening, diagnosis, treatment and therapy monitoring. • Tissue stabilization. • Image capture and mosaicing . • Image transfer, storage, viewing and retrieval. 6

“ No other method allows a comparably fast, painless, and reliable diagnosis of various malignant skin tumors. ” 1 Regulatory Approvals In All Major Markets Canada Brazil Australia United States Europe Israel Russia Turkey Korea China Source: 1 AWMF (2011): S1 - Leitlinie Konfokale Lasermikroskopie in der Dermatologie (S1 Guideline for Confocal Laser Scanning Microscopy in Dermatology). 7

The Problem Today in the United States, clinical diagnosis of skin disease is performed primarily by eye, resulting in low clinical accuracy. • As many as 50 biopsies may be performed to find one melanoma. • ABCDE rules for evaluation A - symmetry B – border C – color D – diameter E – evolving • Suspicious lesions are biopsied. Malignant Melanoma Benign Mole 8

Skin Cancer Statistics • Approximately 12 million skin biopsies are performed per year. • Globally , one in three cancer diagnoses is skin cancer. 1 • One in five Americans will develop skin cancer in his/her lifetime. 2 • Australia has the highest skin cancer incidence in the world with two out of three diagnosed before the age of 70. 3 • Over the past 30 years, more people have had skin cancer than all other cancers combined. 4 • The global incidence of melanoma continues to rise at a rate faster than that of any of the seven most common cancers. 5 • In the past 30 years, the incidence of squamous cell carcinoma among women under age 40 has increased almost 700 percent. 6 • In 2004, the total direct cost associated with the treatment for non - melanoma skin cancer was $1.5 billion. 7 • Nearly 80% of all skin biopsies performed in primary care are benign. 8 9

• Image down into living tissue, layer by layer. • Cellular resolution comparable to histology. • Diagnose a variety of skin diseases and disorders. • Sample the entire lesion instead of a small part. VivaScope Technology is Creating a Real - Time, Non - Invasive Approach to Diagnosis 10

The U.S. Markets With an additional 200,000 general practitioners, the addressable market is in excess of $10B. 25% Potential Annual Recurring Revenue Stream in: • Consumables • Service • Image Transfer/Storage Addressable Systems Market >$1B Dermatology 8,500 U.S. Offices Research 1,454 U.S. ISO Certified Labs Surgical 5,100 US Surgical Hospitals 11

Sales Strategy Aggressively pursue: • U.S . dermatology practices once physician reimbursement is available. • OEM skin cancer therapy monitoring applications. • Accountable Care Organizations (ACOs). • S kin care product development. • S urgical applications. • Distribution channels for each targeted market. 12

Cosmetic – Proctor & Gamble – Johnson & Johnson – Shiseido – L'Oréal Academia – Rice – Texas A&M – Yale – MGH Installed Base of Devices Already Established • Our current customers include some of the most well respected Fortune 500 companies, academic institutions and private practices. • Over 300 units shipped into commercial research and academia markets and 125 units placed into Dermatologists offices worldwide. Clinical – Memorial Sloan - Kettering Cancer Center – University of Miami Dermatology – University of Connecticut – Skin and Cancer Associates – Rao Dermatology 13

Distributor Territory Mavig GmbH Europe/ Mid - East Emdutos Brazil Integral Japan TBD Australia ConBio China Shin Chen Instrument Taiwan True Systems South Korea Filtech Enterprise Thailand Direct North America Partnerships provide a low cost distribution model eliminating the need to build a dedicated sales force. Extensive Distribution Network Established with Strong Global Partners Canada Brazil Australia Japan China Europe United States 14

Studies in Process • In - Vivo, Multi - Center Pigmented Lesion Study. • In - Vivo Classification of the Features of Basal Cell Carcinoma, comparing the VivaScope 1500 and the VivaScope 3000. • In - Vivo Diagnosis of Basal Cell Carcinoma. • Identification of Tissues Ex - Vivo During Thyroid Surgery. • Identification of Parathyroid Glands In - Vivo During Thyroid Surgery. • In - Vivo Quantification of Meissner’s Corpuscles in Diabetics for the Detection of Sensory Neuropathy. Please see www.vivascope - pub.com for a comprehensive library of journal articles. 15

Wherever you are in the continuum of tissue diagnosis , Caliber I.D. is best in class ! Summary • Caliber I.D. offers an FDA approved non - invasive platform that enables imaging on a cellular level. • This major innovation redefines the field of tissue diagnosis. • The VivaScope ® platform of imaging devices allows us to address multiple applications in a variety of medical and research markets . 16

Footnote References Slide 9 1 World Skin Cancer Foundation. 2 Robinson, JK. Sun exposure, sun protection, and vitamin D. JAMA 2005; 294:1541 - 43. 3 Australian Institute of Health and Welfare and Australasian Association of Cancer Registries (2004). 4 Stern, RS. Prevalence of a history of skin cancer in 2007: results of an incidence - based model. Arch Dermatol 2010; 146(3):279 - 282. 5 Ries LAG, Melbert D, Krapcho M, Stinchcomb DG, Howlader N, Horner MJ, et al. ( eds ). SEER cancer statistics review, 1945 - 2005. National Cancer Institute. 6 Christenson LJ, Borrowman TA, Vachon CM, et al. Incidence of basal cell and squamous cell carcinomas in a population younger than 40 years. JAMA 2005. 7 Bickers DR, Lim HW, Margolis D et al. The burden of skin diseases: 2004 a joint project of the American Academy of Dermatology Association and the Society for Investigative Dermatology. J Amer Acad Dermatol 2006; 55(3):490 - 500. 8 Bolognia JL, Berwick M, Fine JA. Complete follow - up and evaluation of a skin cancer screening in Connecticut. J Am Acad Dermatol 1990;23:1098 – 106. 17

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NET LOSS PER COMMON SHARE DATA (Detail) - (Table 2) Table of excluded anti-dilutive shares	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Options to purchase common stock
Anti-dilutive shares
Anti-dilutive securities excluded from EPS	685,000	1,895,274
Warrants
Anti-dilutive shares
Anti-dilutive securities excluded from EPS	1,981,661	2,215,680
Restricted stock
Anti-dilutive shares
Anti-dilutive securities excluded from EPS	122,667	122,667

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (Warrants, USD $)	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Warrants
Fair value measurements
Estimated stock price	$ 1.25	$ 3.35
Increase or decrease in input which would not result in a material change in estimate (in percent)	1.00%

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INVENTORIES

3 Months Ended

Mar. 31, 2013

Inventory Disclosure [Abstract]

INVENTORIES

4. INVENTORIES

        The components of inventories are as follows at:

	March 31, 2013			December 31, 2012
Raw materials	$	579,016		$	659,149
Finished goods		241,455			334,026
Offsite demo equipment		96,566			96,566
Less inventory reserve		(163,505	)		(163,505	)
	$	753,532		$	926,236

Offsite demo equipment represents the cost of products physically located at customer locations, during an orientation period for which the Company retains title. As such, no depreciation expense has been recorded on these units. The inventory reserve at March 31, 2013 includes amounts necessary to adjust the Company’s inventory and offsite demo equipment to net realizable value following the Company’s release of newly redesigned products in 2012.

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NOTE PAYABLE-RELATED PARTIES (Details) (USD $) In Millions, except Share data, unless otherwise specified	1 Months Ended
	Jul. 31, 2012 2012 Term Loan	May 31, 2013 Subsequent Event 2013 Term Loan
NOTE PAYABLE-RELATED PARTIES
Amount borrowed	$ 7.0	$ 5.0
Stated interest rate (in percent)	7.00%	7.00%
Number of shares of common stock issued to the affiliate	167,164
Debt discount	$ 0.3

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ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2013
Accrued Liabilities and Other Liabilities Disclosure Current [Abstract]
Increase in compensation and benefits current liabilities	$ 0.4

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DEBT (Details) (Promissory Notes Payable, USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2013 Note	Dec. 31, 2012
Debt
Debt outstanding	$ 0.4	$ 0.4
Number of promissory notes outstanding	2
First Note
Debt
Debt outstanding	0.3
Second Note
Debt
Debt outstanding	$ 0.1

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REDUCTION IN FORCE (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Reduction In Force Disclosure [Abstract]
Termination costs	$ 0	$ 0.3
Accrued termination costs	0.8
Accrued long-term termination costs	$ 0.4

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Mar. 31, 2013

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

There were no material changes to the summary of significant accounting policies disclosed in Note 3 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2012.

Fair Value Measurements — The Company considers warrants that are not indexed to the Company’s own stock to be classified as Level 3 in the fair value hierarchy. Level 3 valuations are based on inputs that are unobservable and significant to the overall fair value measurement. The degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. During the three months ended March 31, 2013 and 2012, the Company did not grant any warrants not indexed to the Company’s own stock. The following table presents the change in Level 3 liabilities:

	Three Months Ended
	March 31,
	2013			2012
Balance at January 1	$	61,808		$	687,580
Fair value adjustment		(24,006	)		(47,258	)
Balance at March 31	$	37,802		$	640,322

The fair value of these warrants was derived using the Black-Scholes pricing model.  The most significant input to the model is the Company’s stock price, which the Company estimated to be $1.25 and $3.35 at March 31, 2013 and 2012, respectively; however, a 1% increase or decrease in this input would not result in a material change in estimate.

The Company’s financial instruments consist principally of accounts receivable, accounts payable and debt. The Company classifies its outstanding debt as Level 2 in the fair value hierarchy and estimated that its carrying value approximated fair value as of March 31, 2013. This estimate is based on acceptable valuation methodologies which use market data of similarly sized and situated debt issuers.

Recently Issued Accounting Pronouncements—In the normal course of business, the Company evaluates all new accounting pronouncements issued by the Financial Accounting Standards Board, Securities and Exchange Commission, Emerging Issues Task Force, American Institute of Certified Public Accountants and other authoritative accounting bodies to determine the potential impact they may have on the Company's Consolidated Financial Statements. Based upon this review, management does not expect any of the recently issued accounting pronouncements to have a material impact on the Company's consolidated financial statements.

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NET LOSS PER COMMON SHARE DATA (Detail) - (Table 1) Table of computations of basic and diluted net loss per common share (USD $)	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Earnings Per Share [Abstract]
Net loss	$ (1,052,795)	$ (3,380,644)
Denominator:
Weighted-average common shares outstanding	8,384,708	7,792,221
Basic and diluted net loss per common share (in dollars per share)	$ (0.13)	$ (0.43)

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UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (USD $)	Mar. 31, 2013	Dec. 31, 2012
CURRENT ASSETS:
Cash and cash equivalents	$ 333,378	$ 926,447
Accounts receivable	335,495	559,336
Inventories - net	753,532	926,236
Prepaid expenses and other current assets	165,393	49,155
Total current assets	1,587,798	2,461,174
PROPERTY AND EQUIPMENT - net	114,655	107,409
DEFERRED FINANCING COSTS - net	5,784	6,128
OTHER ASSETS	15,892	15,991
TOTAL ASSETS	1,724,129	2,590,702
CURRENT LIABILITIES:
Current portion of long-term debt- net	366,561	379,311
Accounts payable	1,026,813	955,514
Accrued expenses and other current liabilities	1,879,241	1,515,334
Current portion of deferred revenue	5,000	244,081
Total current liabilities	3,277,615	3,094,240
WARRANT LIABILITY	37,802	61,808
NOTES PAYABLE - RELATED PARTIES - net	6,715,102	6,698,386
OTHER LONG-TERM LIABILITIES	386,900	443,623
TOTAL LIABILITIES	10,417,419	10,298,057
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' DEFICIT:
Common Stock - par value $.01 per share; 60,000,000 authorized; 8,507,374 issued and outstanding on March 31, 2013 and December 31, 2012, respectively	85,074	85,074
Additional paid-in capital	38,746,486	38,679,627
Accumulated deficit	(47,524,850)	(46,472,056)
TOTAL STOCKHOLDERS' DEFICIT	(8,693,290)	(7,707,355)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$ 1,724,129	$ 2,590,702

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DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION

3 Months Ended

Mar. 31, 2013

Organization Consolidation and Presentation Of Financial Statements [Abstract]

DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION

1. DESCRIPTION OF THE BUSINESS AND BASIS OF PRESENTATION

Lucid, Inc. operating as Caliber Imaging & Diagnostics, Inc., or Caliber I.D., (the "Company" or “Lucid”), is a medical device company that designs, manufactures and sells non-invasive cellular imaging devices that assist physicians in the early detection of disease. The Company sells its products in the United States and numerous foreign countries and is headquartered in Rochester, New York.

The Company’s unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. The financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair presentation of such information. All such adjustments are of a normal recurring nature. Although the Company believes that the disclosures are adequate to make the information presented not misleading, certain information and footnote disclosures have been condensed or omitted pursuant to such rules and regulations. This unaudited interim financial information should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2012. The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, sales, expenses, and related disclosures at the date of the financial statements and during the reporting period. Actual results could differ materially from these estimates. The year-end balance sheet data was derived and condensed from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. The results of operations for the three months ended March 31, 2013 are not necessarily indicative of the results for any subsequent period or for the entire fiscal year ending December 31, 2013.

Certain immaterial reclassification adjustments have been made to the prior year financial statements to reclassify certain operating costs from General and administrative to Cost of revenue, Sales and marketing, and Engineering, research and development in the accompanying condensed consolidated statements of operations to conform to the current year presentation.

As a cost-saving measure, in January 2013, the Company dissolved its wholly-owned subsidiary Lucid International, Inc. The dissolution of Lucid International, Inc. is not expected to have any significant impact on the Company’s financial position or results of operations.

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SEGMENT INFORMATION (Details)	3 Months Ended
	Mar. 31, 2013 Segment
Segment Reporting [Abstract]
Number of reportable segments	1

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SEGMENT INFORMATION (Tables)

3 Months Ended

Mar. 31, 2013

Segment Reporting [Abstract]

Schedule of sales for each significant geographical area

	Three months Ended March 31,
	2013					2012
	Product Sales		Percent			Product Sales		Percent
	(in millions)					(in millions)
North America	$	0.4		39	%	$	0.1		39	%
Europe		0.4		37	%		0.2		61	%
Asia		0.3		24	%		—		—
Total	$	1.1		100	%	$	0.3		100	%

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SUBSEQUENT EVENTS (Details) (Subsequent Event, 2013 Term Loan, USD $) In Millions, unless otherwise specified	May 31, 2013
Subsequent Event | 2013 Term Loan
Subsequent Event [Line Items]
Amount borrowed from an affiliate	$ 5.0
Interest rate on term loan (as a percent)	7.00%

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Detail) - (Table 1) Table of changes in level 3 warrant liabilities (USD $)	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Fair Value Measurements
Balance at January 1	$ 61,808	$ 687,580
Fair value adjustment	(24,006)	(47,258)
Balance at March 31	$ 37,802	$ 640,322

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LIQUIDITY AND CAPITAL RESOURCES

3 Months Ended

Mar. 31, 2013

Liquidity and Capital Resources Disclosure [Abstract]

LIQUIDITY AND CAPITAL RESOURCES

2. LIQUIDITY AND CAPITAL RESOURCES

The Company has incurred net losses of approximately $1.1 million and $3.4 million for the three months ended March 31, 2013 and 2012, respectively. In addition, the Company had a stockholders’ deficit balance of approximately $8.7 million at March 31, 2013 and $7.7 million at December 31, 2012. Furthermore, the Company's current forecast for fiscal 2013 projects a significant net loss, and projects a need to raise additional capital to fund its operations in 2013 and beyond. The Company continues to explore strategic alternatives to finance its business plan, including but not limited to, private equity or debt financings or other sources, such as strategic partnerships. The Company is also focusing on increasing sales of its products to generate cash flows to fund its operations.

In May 2013, the Company reached an agreement to borrow $5.0 million from an affiliate of the Company under a Subsequent Term Note. See Note 6 – Note Payable – Related Parties for additional information. Proceeds from this note will be used for working capital requirements and for repaying scheduled principal payments on promissory notes and other long-term liabilities. If the Company does not close on the proceeds from this note, the Company will likely need to cease operations.

Assuming the Company closes on the Subsequent Term Note, it will then need to raise additional capital in the fourth quarter of 2013 and beyond, and such capital may not be available at that time or on favorable terms, if at all. The Company may seek to raise these funds through public or private equity offerings, debt financings, credit facilities, or partnering or other corporate collaborations and licensing arrangements. If adequate funds are not available or are not available on acceptable terms, the Company’s ability to fund its operations, take advantage of opportunities, develop products and technologies, and otherwise respond to competitive pressures could be significantly delayed or limited, and operations may need to downsized or halted.

There can be no assurance that the Company will be successful in its plans described above or in attracting alternative debt or equity financing. These conditions have raised substantial doubt about the Company's ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

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UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Parentheticals) (USD $)	Mar. 31, 2013	Dec. 31, 2012
Statement Of Financial Position [Abstract]
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	60,000,000	60,000,000
Common stock, shares issued	8,507,374	8,507,374
Common stock, shares outstanding	8,507,374	8,507,374

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

3 Months Ended

Mar. 31, 2013

Accounting Policies [Abstract]

Fair Value Measurements

Fair Value Measurements — The Company considers warrants that are not indexed to the Company’s own stock to be classified as Level 3 in the fair value hierarchy. Level 3 valuations are based on inputs that are unobservable and significant to the overall fair value measurement. The degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3. During the three months ended March 31, 2013 and 2012, the Company did not grant any warrants not indexed to the Company’s own stock. The following table presents the change in Level 3 liabilities:

	Three Months Ended
	March 31,
	2013			2012
Balance at January 1	$	61,808		$	687,580
Fair value adjustment		(24,006	)		(47,258	)
Balance at March 31	$	37,802		$	640,322

The fair value of these warrants was derived using the Black-Scholes pricing model.  The most significant input to the model is the Company’s stock price, which the Company estimated to be $1.25 and $3.35 at March 31, 2013 and 2012, respectively; however, a 1% increase or decrease in this input would not result in a material change in estimate.

The Company’s financial instruments consist principally of accounts receivable, accounts payable and debt. The Company classifies its outstanding debt as Level 2 in the fair value hierarchy and estimated that its carrying value approximated fair value as of March 31, 2013. This estimate is based on acceptable valuation methodologies which use market data of similarly sized and situated debt issuers.

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements—In the normal course of business, the Company evaluates all new accounting pronouncements issued by the Financial Accounting Standards Board, Securities and Exchange Commission, Emerging Issues Task Force, American Institute of Certified Public Accountants and other authoritative accounting bodies to determine the potential impact they may have on the Company's Consolidated Financial Statements. Based upon this review, management does not expect any of the recently issued accounting pronouncements to have a material impact on the Company's consolidated financial statements.

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Document and Entity Information	3 Months Ended
	Mar. 31, 2013	May 01, 2013
Document and Entity Information [Abstract]
Entity Registrant Name	LUCID INC
Entity Central Index Key	0000752902
Trading Symbol	lcdx
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		8,507,374
Document Type	10-Q
Document Period End Date	Mar. 31, 2013
Amendment Flag	false
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q1

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

3 Months Ended

Mar. 31, 2013

Accounting Policies [Abstract]

Schedule of change in level 3 liabilities

	Three Months Ended
	March 31,
	2013			2012
Balance at January 1	$	61,808		$	687,580
Fair value adjustment		(24,006	)		(47,258	)
Balance at March 31	$	37,802		$	640,322

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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Income Statement [Abstract]
REVENUES	$ 1,058,610	$ 317,809
OPERATING EXPENSES:
Cost of revenue	748,397	495,297
General and administrative	450,188	1,388,400
Sales and marketing	338,789	709,937
Engineering, research and development	454,825	776,897
Total operating expenses	1,992,199	3,370,531
LOSS FROM OPERATIONS	(933,589)	(3,052,722)
OTHER EXPENSES:
Interest expense	(137,812)	(65,311)
Loss on extinguishment of debt		(306,778)
Fair value adjustment of warrants	24,006	47,258
Other	(5,400)	(3,091)
NET LOSS	$ (1,052,795)	$ (3,380,644)
BASIC AND DILUTED NET LOSS PER COMMON SHARE (in dollars per share)	$ (0.13)	$ (0.43)
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING (in shares)	8,384,708	7,792,221

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DEBT

3 Months Ended

Mar. 31, 2013

Debt Disclosure [Abstract]

DEBT

7. DEBT

As of March 31, 2013 and December 31, 2012, promissory notes outstanding totaled $0.4 million and $0.4 million, respectively, on two notes which do not accrue interest. As of March 31, 2013, the principal of the first note of $0.3 million was classified as a current liability because it matures in 2013, and the principal of the second note of $0.1 million was classified as current because in January 2013 the Company did not make a mandatory payment resulting in the promissory note becoming immediately callable by the creditor and, therefore, classified the note as a current liability on the accompanying condensed consolidated balance sheets.

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NOTE PAYABLE-RELATED PARTIES

3 Months Ended

Mar. 31, 2013

Note Payable Related Parties Disclosure [Abstract]

NOTE PAYABLE-RELATED PARTIES

6. NOTE PAYABLE—RELATED PARTIES

In July 2012, the Company borrowed $7.0 million from an affiliate of the Company pursuant to a Loan and Security Agreement (the “2012 Term Loan”). The 2012 Term Loan refinanced a previous loan and matures in July 2017. The Company may prepay the 2012 Term Loan at any time, subject to certain notice requirements. The 2012 Term Loan bears interest at a rate of 7% per annum, payable quarterly commencing in July 2014, and is secured by all of the Company’s assets. In connection with the closing of the 2012 Term Loan, the Company issued 167,164 shares of the Company’s common stock to the affiliate. The Company allocated the debt proceeds between the debt and common stock based on the relative fair value of each financial instrument, resulting in a debt discount of $0.3 million which was amortized to interest expense over the term of 2012 Term Loan.

The 2012 Term Loan contains customary affirmative and negative covenants, including covenants restricting the incurrence of debt, imposition of liens, the payment of dividends, and entering into affiliate transactions. At March 31, 2013 the Company was in compliance with all covenants. The 2012 Term Loan also contains customary events of default, including among others, nonpayment of principal or interest, material inaccuracy of representations and failure to comply with covenants. If an event of default occurs and is continuing under the 2012 Term Loan, the entire outstanding balance may become immediately due and payable.

In May 2013, the Company reached an agreement to borrow $ 5.0 million from an affiliate of the Company under a Subsequent Term Note (the “2013 Term Loan”). The 2013 Term Loan will mature in November 2014 and may be prepaid at any time. The 2013 Term Loan will bear interest at a rate of 7% per annum, payable upon maturity and will be secured by all of the Company’s assets. The 2013 Term Loan will include cross default provisions with the existing 2012 Term Loan. If the Company does not close on the proceeds from this note, the Company will likely need to cease operations.

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LIQUIDITY AND CAPITAL RESOURCES (Details) (USD $)	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Dec. 31, 2012	May 31, 2013 Subsequent Event 2013 Term Loan
Liquidity
Stockholders' deficit balance	$ (8,693,290)		$ (7,707,355)
Net losses	(1,052,795)	(3,380,644)
Amount borrowed				$ 5,000,000

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INVENTORIES (Tables)

3 Months Ended

Mar. 31, 2013

Inventory Disclosure [Abstract]

Schedule of inventories

	March 31, 2013			December 31, 2012
Raw materials	$	579,016		$	659,149
Finished goods		241,455			334,026
Offsite demo equipment		96,566			96,566
Less inventory reserve		(163,505	)		(163,505	)
	$	753,532		$	926,236

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SEGMENT INFORMATION

3 Months Ended

Mar. 31, 2013

Segment Reporting [Abstract]

SEGMENT INFORMATION

10. SEGMENT INFORMATION

The Company operates in one reportable segment—the research, development and sale of medical devices to diagnose skin disease. The Company's chief operating decision maker reviews financial information for the Company as a whole for purposes of allocating resources and evaluating financial performance. Substantially all long-lived assets of the Company are in the United States. Sales for each significant geographical area are as follows:

	Three months Ended March 31,
	2013					2012
	Product Sales		Percent			Product Sales		Percent
	(in millions)					(in millions)
North America	$	0.4		39	%	$	0.1		39	%
Europe		0.4		37	%		0.2		61	%
Asia		0.3		24	%		—		—
Total	$	1.1		100	%	$	0.3		100	%

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REDUCTION IN FORCE

3 Months Ended

Mar. 31, 2013

Reduction In Force Disclosure [Abstract]

REDUCTION IN FORCE

8. REDUCTION IN FORCE

In 2012, the Company implemented restructuring plans resulting in force reductions to streamline the Company’s infrastructure and lower overall operating expenses.  In addition, in January, June, and September 2012, the Company and certain officers of the Company mutually agreed to terminate their employment relationships.  As a result of these reductions in force, the Company recognized expenses of $0 and approximately $0.3 million during the three months ended March 31, 2013 and 2012, respectively. At March 31, 2013, approximately $0.8 million was accrued for these liabilities, of which approximately $0.4 million was long-term in nature to be paid in installments through the first quarter of 2016 and was recorded as “Other Long-Term Liabilities” on the Company’s accompanying condensed consolidated balance sheets.

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NET LOSS PER COMMON SHARE DATA

3 Months Ended

Mar. 31, 2013

Earnings Per Share [Abstract]

NET LOSS PER COMMON SHARE DATA

9. NET LOSS PER COMMON SHARE DATA

The following table sets forth the computation of basic and diluted net loss attributable to common stockholders per common share, as well as a reconciliation of the numerator and denominator used in the computation:

	Three months ended March 31,
	2013			2012
Net loss	$	(1,052,795	)	$	(3,380,644	)
Denominator:
Weighted-average common shares outstanding		8,384,708			7,792,221
Basic and diluted net loss per common share	$	(0.13	)	$	(0.43	)

The following equivalent shares were excluded from the calculation of diluted loss per share as their impact would have been anti-dilutive:

	Three months ended March 31,
	2013		2012
Options to purchase common stock		685,000		1,895,274
Warrants		1,981,661		2,215,680
Restricted stock		122,667		122,667

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SUBSEQUENT EVENTS

3 Months Ended

Mar. 31, 2013

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

11. SUBSEQUENT EVENTS

We have evaluated subsequent events after the balance sheet date through the date of filing of these consolidated financial statements with the Securities and Exchange Commission for appropriate accounting and disclosure and concluded that there were no subsequent events requiring adjustment or disclosure in these consolidated financial statements, other than those discussed below.

In May 2013, the Company reached an agreement to borrow $5.0 million from an affiliate of the Company under a Subsequent Term Note. See Note 6 - Note Payable - Related Parties for additional information. The 2013 Term Loan will mature in November 2014 and may be prepaid at any time. The 2013 Term Loan will bear interest at a rate of 7% per annum, payable upon maturity and will be secured by all of the Company’s assets. The 2013 Term Loan will include cross default provisions with the existing 2012 Term Loan. If the Company does not close on the proceeds from this note, the Company will likely need to cease operations.

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SEGMENT INFORMATION (Detail) - (Table 1) Table of sales revenue by geographic area (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Geographic Areas, Revenues from External Customers [Abstract]
Product Sales	$ 1.1	$ 0.3
Percent	100.00%	100.00%
North America
Geographic Areas, Revenues from External Customers [Abstract]
Product Sales	0.4	0.1
Percent	39.00%	39.00%
Europe
Geographic Areas, Revenues from External Customers [Abstract]
Product Sales	0.4	0.2
Percent	37.00%	61.00%
Asia
Geographic Areas, Revenues from External Customers [Abstract]
Product Sales	$ 0.3
Percent	24.00%

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NET LOSS PER COMMON SHARE DATA (Tables)

3 Months Ended

Mar. 31, 2013

Earnings Per Share [Abstract]

Schedule of computation of basic and diluted net loss attributable to common stockholders per common share

	Three months ended March 31,
	2013			2012
Net loss	$	(1,052,795	)	$	(3,380,644	)
Denominator:
Weighted-average common shares outstanding		8,384,708			7,792,221
Basic and diluted net loss per common share	$	(0.13	)	$	(0.43	)

Schedule of equivalent shares excluded from the calculation of diluted loss per share

	Three months ended March 31,
	2013		2012
Options to purchase common stock		685,000		1,895,274
Warrants		1,981,661		2,215,680
Restricted stock		122,667		122,667

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INVENTORIES (Detail) - (Table 1) Table of components of inventories (USD $)	Mar. 31, 2013	Dec. 31, 2012
Inventory Disclosure [Abstract]
Raw materials	$ 579,016	$ 659,149
Finished goods	241,455	334,026
Offsite demo equipment	96,566	96,566
Less inventory reserve	(163,505)	(163,505)
Inventories total	$ 753,532	$ 926,236

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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (1,052,795)	$ (3,380,644)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	8,748	13,047
Stock-based compensation	66,959	655,726
Fair value adjustment of warrants	(24,006)	(47,258)
Loss on extinguishment of debt		306,778
Accretion of debt discount	16,716	104,228
Change in:
Accounts receivable	223,841	157,196
Inventories	172,704	78,352
Prepaid expenses and other current assets	(116,238)	(70,333)
Other assets		(15,163)
Accounts payable	71,299	(169,707)
Accrued expenses and other current liabilities	363,907	(121,159)
Other liabilities	(295,804)	165,450
Net cash used in operating activities	(564,669)	(2,323,487)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment	(15,650)	(93,365)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of debt	(12,750)	(975,050)
Issuance of common units		20,257
Issuance of common stock		2,640
Net cash used in financing activities	(12,750)	(952,153)
NET DECREASE IN CASH	(593,069)	(3,369,005)
CASH - Beginning of period	926,447	4,896,141
CASH - End of period	333,378	1,527,136
SUPPLEMENTAL CASH FLOW DATA - Cash paid for interest		$ 46,962

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ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

3 Months Ended

Mar. 31, 2013

Accrued Liabilities and Other Liabilities Disclosure Current [Abstract]

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

5. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities consisted of the following at:

	March 31, 2013		December 31, 2012
Compensation and benefits	$	565,267	$	635,039
Interest		386,541		265,719
Product warranty liability		281,000		263,000
Customer deposits		237,434		79,384
Insurance		66,211		—
Rent		42,994		39,674
Professional fees		13,900		21,388
Other		285,894		211,130
	$	1,879,241	$	1,515,334

In 2012, the Company and certain officers of the Company mutually agreed to terminate their employment relationships (See Note 8 - Reduction in Force).  At March 31, 2013, $0.4 million was included in “ Compensation and benefits” in the table above for the current portion of these liabilities. 

Customer deposits represent advances paid to the Company by customers for the purchase of equipment.

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ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Detail) - (Table 1) Table of accrued expenses and other current liabilities (USD $)	Mar. 31, 2013	Dec. 31, 2012
Accrued Liabilities and Other Liabilities Disclosure Current [Abstract]
Compensation and benefits	$ 565,267	$ 635,039
Interest	386,541	265,719
Product warranty liability	281,000	263,000
Customer deposits	237,434	79,384
Insurance	66,211
Rent	42,994	39,674
Professional fees	13,900	21,388
Other	285,894	211,130
Accrued expenses and other current liabilities total	$ 1,879,241	$ 1,515,334

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ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables)

3 Months Ended

Mar. 31, 2013

Accrued Liabilities and Other Liabilities Disclosure Current [Abstract]

Schedule of accrued expenses and other current liabilities

	March 31, 2013		December 31, 2012
Compensation and benefits	$	565,267	$	635,039
Interest		386,541		265,719
Product warranty liability		281,000		263,000
Customer deposits		237,434		79,384
Insurance		66,211		—
Rent		42,994		39,674
Professional fees		13,900		21,388
Other		285,894		211,130
	$	1,879,241	$	1,515,334