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Document and Entity Information (USD $)
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12 Months Ended | ||
|---|---|---|---|
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Dec. 31, 2012
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Feb. 01, 2013
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Jun. 30, 2012
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| Document Information [Line Items] | |||
| Document Type | 10-K | ||
| Amendment Flag | false | ||
| Document Period End Date | Dec. 31, 2012 | ||
| Document Fiscal Year Focus | 2012 | ||
| Document Fiscal Period Focus | FY | ||
| Trading Symbol | NURO | ||
| Entity Registrant Name | NeuroMetrix, Inc. | ||
| Entity Central Index Key | 0001289850 | ||
| Current Fiscal Year End Date | --12-31 | ||
| Entity Well-Known Seasoned Issuer | No | ||
| Entity Current Reporting Status | Yes | ||
| Entity Voluntary Filers | No | ||
| Entity Filer Category | Smaller Reporting Company | ||
| Entity Common Stock Shares Outstanding | 2,140,871 | ||
| Entity Public Float | $ 7,736,847 |
| X | ||||||||||
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- Definition
If the value is true, then the document is an amendment to previously-filed/accepted document. No definition available.
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- Definition
End date of current fiscal year in the format --MM-DD. No definition available.
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| X | ||||||||||
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- Definition
This is focus fiscal period of the document report. For a first quarter 2006 quarterly report, which may also provide financial information from prior periods, the first fiscal quarter should be given as the fiscal period focus. Values: FY, Q1, Q2, Q3, Q4, H1, H2, M9, T1, T2, T3, M8, CY. No definition available.
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| X | ||||||||||
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- Definition
This is focus fiscal year of the document report in CCYY format. For a 2006 annual report, which may also provide financial information from prior periods, fiscal 2006 should be given as the fiscal year focus. Example: 2006. No definition available.
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- Details
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| X | ||||||||||
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- Definition
The end date of the period reflected on the cover page if a periodic report. For all other reports and registration statements containing historical data, it is the date up through which that historical data is presented. If there is no historical data in the report, use the filing date. The format of the date is CCYY-MM-DD. No definition available.
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| X | ||||||||||
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- Definition
The type of document being provided (such as 10-K, 10-Q, 485BPOS, etc). The document type is limited to the same value as the supporting SEC submission type, or the word "Other". No definition available.
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| X | ||||||||||
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- Definition
A unique 10-digit SEC-issued value to identify entities that have filed disclosures with the SEC. It is commonly abbreviated as CIK. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
Indicate number of shares or other units outstanding of each of registrant's classes of capital or common stock or other ownership interests, if and as stated on cover of related periodic report. Where multiple classes or units exist define each class/interest by adding class of stock items such as Common Class A [Member], Common Class B [Member] or Partnership Interest [Member] onto the Instrument [Domain] of the Entity Listings, Instrument. No definition available.
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| X | ||||||||||
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- Definition
Indicate "Yes" or "No" whether registrants (1) have 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 registrants were required to file such reports), and (2) have been subject to such filing requirements for the past 90 days. This information should be based on the registrant's current or most recent filing containing the related disclosure. No definition available.
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| X | ||||||||||
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- Definition
Indicate whether the registrant is one of the following: (1) Large Accelerated Filer, (2) Accelerated Filer, (3) Non-accelerated Filer, (4) Smaller Reporting Company (Non-accelerated) or (5) Smaller Reporting Accelerated Filer. Definitions of these categories are stated in Rule 12b-2 of the Exchange Act. This information should be based on the registrant's current or most recent filing containing the related disclosure. No definition available.
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| X | ||||||||||
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- Definition
State aggregate market value of voting and non-voting common equity held by non-affiliates computed by reference to price at which the common equity was last sold, or average bid and asked price of such common equity, as of the last business day of registrant's most recently completed second fiscal quarter. The public float should be reported on the cover page of the registrants form 10K. No definition available.
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| X | ||||||||||
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- Definition
The exact name of the entity filing the report as specified in its charter, which is required by forms filed with the SEC. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
Indicate "Yes" or "No" if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. No definition available.
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| X | ||||||||||
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- Definition
Indicate "Yes" or "No" if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Is used on Form Type: 10-K, 10-Q, 8-K, 20-F, 6-K, 10-K/A, 10-Q/A, 20-F/A, 6-K/A, N-CSR, N-Q, N-1A. No definition available.
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| X | ||||||||||
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- Definition
Trading symbol of an instrument as listed on an exchange. No definition available.
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| X | ||||||||||
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- Definition
Carrying value as of the balance sheet date of liabilities incurred (and for which invoices have typically been received) and payable to vendors for goods and services received that are used in an entity's business. Used to reflect the current portion of the liabilities (due within one year or within the normal operating cycle if longer). Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
Amount due from customers or clients, within one year of the balance sheet date (or the normal operating cycle, whichever is longer), for goods or services (including trade receivables) that have been delivered or sold in the normal course of business, reduced to the estimated net realizable fair value by an allowance established by the entity of the amount it deems uncertain of collection. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
Carrying value as of the balance sheet date of obligations incurred and payable, pertaining to costs that are statutory in nature, are incurred on contractual obligations, or accumulate over time and for which invoices have not yet been received or will not be rendered. Examples include taxes, interest, rent and utilities. Used to reflect the current portion of the liabilities (due within one year or within the normal operating cycle if longer). Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
Excess of issue price over par or stated value of the entity's capital stock and amounts received from other transactions involving the entity's stock or stockholders. Includes adjustments to additional paid in capital. Some examples of such adjustments include recording the issuance of debt with a beneficial conversion feature and certain tax consequences of equity instruments awarded to employees. Use this element for the aggregate amount of additional paid-in capital associated with common and preferred stock. For additional paid-in capital associated with only common stock, use the element additional paid in capital, common stock. For additional paid-in capital associated with only preferred stock, use the element additional paid in capital, preferred stock. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
Sum of the carrying amounts as of the balance sheet date of all assets that are recognized. Assets are probable future economic benefits obtained or controlled by an entity as a result of past transactions or events. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
Sum of the carrying amounts as of the balance sheet date of all assets that are expected to be realized in cash, sold, or consumed within one year (or the normal operating cycle, if longer). Assets are probable future economic benefits obtained or controlled by an entity as a result of past transactions or events. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Details
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| X | ||||||||||
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- Definition
Amount equal to the present value (the principal) at the beginning of the lease term of minimum lease payments during the lease term (excluding that portion of the payments representing executory costs such as insurance, maintenance, and taxes to be paid by the lessor, together with any profit thereon) net of payments or other amounts applied to the principal, through the balance sheet date and due to be paid within one year (or one operating cycle, if longer) of the balance sheet date. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
Amount equal to the present value (the principal) at the beginning of the lease term of minimum lease payments during the lease term (excluding that portion of the payments representing executory costs such as insurance, maintenance, and taxes to be paid by the lessor, together with any profit thereon) net of payments or other amounts applied to the principal, through the balance sheet date and due to be paid more than one year (or one operating cycle, if longer) after the balance sheet date. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
Amount of currency on hand as well as demand deposits with banks or financial institutions. Includes other kinds of accounts that have the general characteristics of demand deposits. Also includes short-term, highly liquid investments that are both readily convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. Excludes cash and cash equivalents within disposal group and discontinued operation. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
Represents the caption on the face of the balance sheet to indicate that the entity has entered into (1) purchase or supply arrangements that will require expending a portion of its resources to meet the terms thereof, and (2) is exposed to potential losses or, less frequently, gains, arising from (a) possible claims against a company's resources due to future performance under contract terms, and (b) possible losses or likely gains from uncertainties that will ultimately be resolved when one or more future events that are deemed likely to occur do occur or fail to occur. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
Aggregate par or stated value of issued nonredeemable common stock (or common stock redeemable solely at the option of the issuer). This item includes treasury stock repurchased by the entity. Note: elements for number of nonredeemable common shares, par value and other disclosure concepts are in another section within stockholders' equity. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
Sum of the carrying amounts as of the balance sheet date of deferred costs capitalized at the end of the reporting period that are expected to be charged against earnings within one year or the normal operating cycle, if longer. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
The carrying amount of consideration received or receivable as of the balance sheet date on potential earnings that were not recognized as revenue in conformity with GAAP, and which are expected to be recognized as such within one year or the normal operating cycle, if longer, including sales, license fees, and royalties, but excluding interest income. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
The noncurrent portion of deferred revenue amount as of balance sheet date. Deferred revenue is a liability related to a revenue producing activity for which revenue has not yet been recognized, and is not expected to be recognized in the next twelve months. Generally, an entity records deferred revenue when it receives consideration from a customer before achieving certain criteria that must be met for revenue to be recognized in conformity with GAAP. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
Total of the carrying values as of the balance sheet date of obligations incurred through that date and payable for obligations related to services received from employees, such as accrued salaries and bonuses, payroll taxes and fringe benefits. Used to reflect the current portion of the liabilities (due within one year or within the normal operating cycle if longer). Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
Carrying amount (lower of cost or market) as of the balance sheet date of inventories less all valuation and other allowances. Excludes noncurrent inventory balances (expected to remain on hand past one year or one operating cycle, if longer). Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
Sum of the carrying amounts as of the balance sheet date of all liabilities that are recognized. Liabilities are probable future sacrifices of economic benefits arising from present obligations of an entity to transfer assets or provide services to other entities in the future. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
Total of all Liabilities and Stockholders' Equity items (or Partners' Capital, as applicable), including the portion of equity attributable to noncontrolling interests, if any. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
Total obligations incurred as part of normal operations that are expected to be paid during the following twelve months or within one business cycle, if longer. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Details
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| X | ||||||||||
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- Definition
Aggregate par or stated value of issued nonredeemable preferred stock (or preferred stock redeemable solely at the option of the issuer). This item includes treasury stock repurchased by the entity. Note: elements for number of nonredeemable preferred shares, par value and other disclosure concepts are in another section within stockholders' equity. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
The total of the amounts paid in advance for capitalized costs that will be expensed with the passage of time or the occurrence of a triggering event, and will be charged against earnings within one year or the normal operating cycle, if longer, and the aggregate carrying amount of current assets, as of the balance sheet date, not separately presented elsewhere in the balance sheet. Current assets are expected to be realized or consumed within one year (or the normal operating cycle, if longer). Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
The total of the carrying amounts as of the balance sheet date of amounts paid in advance for expenses which will be charged against earnings in periods after one year or beyond the operating cycle, if longer, and the aggregate carrying amount of noncurrent assets not separately disclosed in the balance sheet. Noncurrent assets are expected to be realized or consumed after one year (or the normal operating cycle, if longer). Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
Amount, net of accumulated depreciation, depletion and amortization, of long-lived physical assets used in the normal conduct of business and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, furniture and fixtures, and computer equipment. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
Cash and equivalents whose use in whole or in part is restricted for the long-term, generally by contractual agreements or regulatory requirements. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
The cumulative amount of the reporting entity's undistributed earnings or deficit. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
Total of all stockholders' equity (deficit) items, net of receivables from officers, directors, owners, and affiliates of the entity which are attributable to the parent. The amount of the economic entity's stockholders' equity attributable to the parent excludes the amount of stockholders' equity which is allocable to that ownership interest in subsidiary equity which is not attributable to the parent (noncontrolling interest, minority interest). This excludes temporary equity and is sometimes called permanent equity. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Details
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Balance Sheets (Parenthetical) (USD $)
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Dec. 31, 2012
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Dec. 31, 2011
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|---|---|---|
| Accounts receivable, allowances | $ 151,616 | $ 299,914 |
| Preferred stock, par value | $ 0.001 | $ 0.001 |
| Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
| Preferred stock, outstanding | ||
| Common stock, par value | $ 0.0001 | $ 0.0001 |
| Common stock, shares authorized | 50,000,000 | 50,000,000 |
| Common stock, shares issued | 2,140,871 | 650,720 |
| Common stock, shares outstanding | 2,140,871 | 650,720 |
| X | ||||||||||
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- Definition
A valuation allowance for trade and other receivables due to an Entity within one year (or the normal operating cycle, whichever is longer) that are expected to be uncollectible. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
Face amount or stated value of common stock per share; generally not indicative of the fair market value per share. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
The maximum number of common shares permitted to be issued by an entity's charter and bylaws. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
Total number of common shares of an entity that have been sold or granted to shareholders (includes common shares that were issued, repurchased and remain in the treasury). These shares represent capital invested by the firm's shareholders and owners, and may be all or only a portion of the number of shares authorized. Shares issued include shares outstanding and shares held in the treasury. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
Number of shares of common stock outstanding. Common stock represent the ownership interest in a corporation. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
Face amount or stated value per share of nonredeemable preferred stock (or preferred stock redeemable solely at the option of the issuer); generally not indicative of the fair market value per share. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
The maximum number of nonredeemable preferred shares (or preferred stock redeemable solely at the option of the issuer) permitted to be issued by an entity's charter and bylaws. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
Aggregate share number for all nonredeemable preferred stock (or preferred stock redeemable solely at the option of the issuer) held by stockholders. Does not include preferred shares that have been repurchased. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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Statements of Operations (USD $)
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12 Months Ended | ||
|---|---|---|---|
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Dec. 31, 2012
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Dec. 31, 2011
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Dec. 31, 2010
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|
| Revenues | $ 7,575,289 | $ 10,396,775 | $ 13,899,670 |
| Cost of revenues | 3,588,806 | 4,722,069 | 7,050,209 |
| Gross profit | 3,986,483 | 5,674,706 | 6,849,461 |
| Operating expenses: | |||
| Research and development | 3,545,790 | 3,877,526 | 5,855,353 |
| Sales and marketing | 5,727,482 | 6,688,591 | 11,072,172 |
| General and administrative | 4,735,238 | 5,111,616 | 7,231,875 |
| Total operating expenses | 14,008,510 | 15,677,733 | 24,159,400 |
| Loss from operations | (10,022,027) | (10,003,027) | (17,309,939) |
| Interest and other income | 14,474 | 21,922 | 298,301 |
| Loss before taxes | (10,007,553) | (9,981,105) | (17,011,638) |
| Income tax benefit | 0 | 0 | 120,490 |
| Net loss | $ (10,007,553) | $ (9,981,105) | $ (16,891,148) |
| Net loss per common share, basic and diluted (in dollars per share) | $ (5.22) | $ (15.53) | $ (26.41) |
| Weighted average number of common shares outstanding, basic and diluted (in shares) | 1,918,723 | 642,513 | 639,597 |
| X | ||||||||||
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- Definition
The aggregate cost of goods produced and sold and services rendered during the reporting period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
The amount of net income or loss for the period per each share in instances when basic and diluted earnings per share are the same amount and reported as a single line item on the face of the financial statements. Basic earnings per share is the amount of net income or loss for the period per each share of common stock or unit outstanding during the reporting period. Diluted earnings per share includes the amount of net income or loss for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period. No definition available.
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| X | ||||||||||
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- Definition
The aggregate total of expenses of managing and administering the affairs of an entity, including affiliates of the reporting entity, which are not directly or indirectly associated with the manufacture, sale or creation of a product or product line. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
Aggregate revenue less cost of goods and services sold or operating expenses directly attributable to the revenue generation activity. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
Sum of operating profit and nonoperating income or expense before Income or Loss from equity method investments, income taxes, extraordinary items, and noncontrolling interest. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
The sum of the current income tax expense or benefit and the deferred income tax expense or benefit pertaining to continuing operations. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
The amount of interest income and other income recognized during the period. Included in this element is interest derived from investments in debt securities, cash and cash equivalents, and other investments which reflect the time value of money or transactions in which the payments are for the use or forbearance of money and other income from ancillary business-related activities (that is, excluding major activities considered part of the normal operations of the business). No definition available.
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| X | ||||||||||
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- Definition
The portion of profit or loss for the period, net of income taxes, which is attributable to the parent. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
Generally recurring costs associated with normal operations except for the portion of these expenses which can be clearly related to production and included in cost of sales or services. Includes selling, general and administrative expense. No definition available.
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| X | ||||||||||
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- Details
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| X | ||||||||||
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- Definition
The net result for the period of deducting operating expenses from operating revenues. No definition available.
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| X | ||||||||||
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- Definition
The aggregate costs incurred (1) in a planned search or critical investigation aimed at discovery of new knowledge with the hope that such knowledge will be useful in developing a new product or service, a new process or technique, or in bringing about a significant improvement to an existing product or process; or (2) to translate research findings or other knowledge into a plan or design for a new product or process or for a significant improvement to an existing product or process whether intended for sale or the entity's use, during the reporting period charged to research and development projects, including the costs of developing computer software up to the point in time of achieving technological feasibility, and costs allocated in accounting for a business combination to in-process projects deemed to have no alternative future use. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
Aggregate revenue recognized during the period (derived from goods sold, services rendered, insurance premiums, or other activities that constitute an entity's earning process). For financial services companies, also includes investment and interest income, and sales and trading gains. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
The aggregate total amount of expenses directly related to the marketing or selling of products or services. No definition available.
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| X | ||||||||||
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- Definition
Average number of shares or units issued and outstanding that are used in calculating basic and diluted earnings per share (EPS). No definition available.
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| X | ||||||||||
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- Definition
Number of shares issued during the period by an entity in a public offering. No definition available.
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| X | ||||||||||
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- Definition
No of shares Issued During Period Shares Redemption Of Warrants. No definition available.
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| X | ||||||||||
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- Definition
Number of Values issued during the period by an entity in a public offering. No definition available.
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| X | ||||||||||
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- Definition
Numer Of Values Issued During Period Shares Redemption Of Warrants. No definition available.
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| X | ||||||||||
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- Definition
This element represents the amount of recognized equity-based compensation during the period, that is, the amount recognized as expense in the income statement (or as asset if compensation is capitalized). Alternate captions include the words "stock-based compensation". Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
|
- Definition
The portion of profit or loss for the period, net of income taxes, which is attributable to the parent. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
Number of shares issued and outstanding as of the balance sheet date. No definition available.
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| X | ||||||||||
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- Definition
Total of all stockholders' equity (deficit) items, net of receivables from officers, directors, owners, and affiliates of the entity which are attributable to the parent. The amount of the economic entity's stockholders' equity attributable to the parent excludes the amount of stockholders' equity which is allocable to that ownership interest in subsidiary equity which is not attributable to the parent (noncontrolling interest, minority interest). This excludes temporary equity and is sometimes called permanent equity. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
Number of shares issued during the period as a result of an employee stock purchase plan. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
Number of shares of stock issued during the period that is attributable to transactions involving issuance of stock not separately disclosed. No definition available.
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| X | ||||||||||
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- Definition
Number of share options (or share units) exercised during the current period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
Aggregate change in value for stock issued during the period as a result of employee stock purchase plan. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
|
- Definition
Value of shares of stock issued during the period that is attributable to transactions involving issuance of stock not separately disclosed. No definition available.
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| X | ||||||||||
|
- Definition
Value of stock issued as a result of the exercise of stock options. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
Increase (Decrease) in Deferred Revenue and Other Current Liabilities No definition available.
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| X | ||||||||||
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- Definition
The cash inflow from the additional capital contribution to the entity including any warrants issued. Proceeds are net of cash outflows for issuance costs related to the transaction. No definition available.
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| X | ||||||||||
|
- Definition
Warrants issued in public offering No definition available.
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| X | ||||||||||
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- Details
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| X | ||||||||||
|
- Definition
The charge against earnings resulting from the aggregate write down of all assets from their carrying value to their fair value. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
|
- Definition
Amount of currency on hand as well as demand deposits with banks or financial institutions. Includes other kinds of accounts that have the general characteristics of demand deposits. Also includes short-term, highly liquid investments that are both readily convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. Excludes cash and cash equivalents within disposal group and discontinued operation. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
Amount of increase (decrease) in cash and cash equivalents. Cash and cash equivalents are the amount of currency on hand as well as demand deposits with banks or financial institutions. Includes other kinds of accounts that have the general characteristics of demand deposits. Also includes short-term, highly liquid investments that are both readily convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. Excludes cash and cash equivalents within disposal group and discontinued operation. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
The current period expense charged against earnings on long-lived, physical assets not used in production, and which are not intended for resale, to allocate or recognize the cost of such assets over their useful lives; or to record the reduction in book value of an intangible asset over the benefit period of such asset; or to reflect consumption during the period of an asset that is not used in production. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
The increase (decrease) during the reporting period in the aggregate amount of liabilities incurred (and for which invoices have typically been received) and payable to vendors for goods and services received that are used in an entity's business. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
The increase (decrease) during the reporting period in amount due within one year (or one business cycle) from customers for the credit sale of goods and services. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
The increase (decrease) during the reporting period in the aggregate amount of accrued expenses and other operating obligations not separately disclosed in the statement of cash flows. No definition available.
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- Definition
The increase (decrease) during the reporting period in the aggregate value of all inventory held by the reporting entity, associated with underlying transactions that are classified as operating activities. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
The increase (decrease) during the reporting period in the value of prepaid expenses and other assets not separately disclosed in the statement of cash flows, for example, deferred expenses, intangible assets, or income taxes. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
The net cash inflow or outflow for the increase (decrease) associated with funds that are not available for withdrawal or use (such as funds held in escrow) and are associated with underlying transactions that are classified as investing activities. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Charge to cost of goods sold that represents the reduction of the carrying amount of inventory, generally attributable to obsolescence or market conditions. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
The net cash inflow or outflow from financing activity for the period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
The net cash inflow or outflow from investing activity. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
The net cash from (used in) all of the entity's operating activities, including those of discontinued operations, of the reporting entity. Operating activities generally involve producing and delivering goods and providing services. Operating activity cash flows include transactions, adjustments, and changes in value that are not defined as investing or financing activities. While for technical reasons this element has no balance attribute, the default assumption is a debit balance consistent with its label. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
The portion of profit or loss for the period, net of income taxes, which is attributable to the parent. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
The amount of fixed assets that an Entity acquires in a noncash (or part noncash) acquisition. Noncash is defined as information about all investing and financing activities of an enterprise during a period that affect recognized assets or liabilities but that do not result in cash receipts or cash payments in the period. "Part noncash" refers to that portion of the transaction not resulting in cash receipts or cash payments in the period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
The cash outflow associated with the acquisition of long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale; includes cash outflows to pay for construction of self-constructed assets. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
The cash inflow associated with the sale, maturity and collection of all investments such as debt, security and so forth during the period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
The cash outflow for the obligation for a lease meeting the criteria for capitalization (with maturities exceeding one year or beyond the operating cycle of the entity, if longer). Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
The aggregate amount of noncash, equity-based employee remuneration. This may include the value of stock or unit options, amortization of restricted stock or units, and adjustment for officers' compensation. As noncash, this element is an add back when calculating net cash generated by operating activities using the indirect method. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
The fair value of stock issued in noncash financing activities. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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Description of Business and Basis of Presentation
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12 Months Ended |
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Dec. 31, 2012
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| Accounting Policies [Abstract] | |
| Business Description and Basis of Presentation | 1. Description of Business and Basis of PresentationNeuroMetrix, Inc., or the Company, a Delaware corporation, was founded in June 1996. The Company is a medical device company focused on the diagnosis and treatment of the neurological complications of diabetes. The Company believes that its substantial experience in developing medical devices to stimulate and measure peripheral nerve function uniquely position it to address unmet medical needs related to diabetic neuropathy. Neuropathy is a common and serious, often painful, complication of diabetes that may lead to foot ulcers and limb amputation. The Company has over a decade of experience in neuropathy detection starting with approval in 1998 by the United States Food and Drug Administration, or FDA, of the NC-stat System, a point-of-care device for the performance of general purpose nerve conduction studies. The Company currently markets products for the detection, diagnosis, monitoring and treatment of diabetic neuropathies such as diabetic peripheral neuropathy and median neuropathy (carpal tunnel syndrome). The Company launched NC-stat DPNCheck in late 2011. NC-stat DPNCheck is a fast, accurate, and quantitative nerve conduction test for diabetic peripheral neuropathy designed to be used at the point of care. Sales efforts for NC-stat DPNCheck are currently targeted at opportunities in the managed care market. In the first quarter of 2013, the Company completed product development and launched the SENSUS pain management system which is designed for relief of chronic, intractable pain. The Company believes this product will be attractive to endocrinologists, podiatrists, primary care and other physicians that are challenged with trying to manage pain in their patients with painful diabetic neuropathy. The Company’s historical neurodiagnostic business is based on the ADVANCETM NCS/EMG System, or the ADVANCE System, which is a comprehensive platform for the performance of traditional nerve conduction studies and invasive electromyography procedures and which is primarily used in physician offices and clinics. The ADVANCE System contributes the majority of the Company’s revenues. The Company held cash and cash equivalents of $8.7 million as of December 31, 2012. The Company believes that these resources and the cash to be generated from expected product sales will be sufficient to meet its projected operating requirements for at least the next twelve months. The Company continues to face significant challenges and uncertainties and, as a result, the Company’s available capital resources may be consumed more rapidly than currently expected due to (a) decreases in sales of the Company’s products and the uncertainty of future revenues from new products; (b) changes the Company may make to the business that affect ongoing operating expenses; (c) changes the Company may make in its business strategy; (d) regulatory developments affecting the Company’s existing products and delays in the FDA approval process for products under development; (e) changes in the Company’s research and development spending plans; and (f) other items affecting the Company’s forecasted level of expenditures and use of cash resources. Accordingly, the Company will need to raise additional funds to support its operating and capital needs beyond the next twelve months. The Company may attempt to obtain additional funding through public or private financing, collaborative arrangements with strategic partners, or through additional credit lines or other debt financing sources to increase the funds available to fund operations. However, the Company may not be able to secure such financing in a timely manner or on favorable terms, if at all. Furthermore, if the Company issues equity or debt securities to raise additional funds, its existing stockholders may experience dilution, and the new equity or debt securities may have rights, preferences and privileges senior to those of the Company’s existing stockholders. If the Company raises additional funds through collaboration, licensing or other similar arrangements, it may be necessary to relinquish valuable rights to its potential products or proprietary technologies, or grant licenses on terms that are not favorable to the Company. Without additional funds, the Company may be forced to delay, scale back or eliminate some of its sales and marketing efforts, research and development activities, or other operations and potentially delay product development in an effort to provide sufficient funds to continue its operations. If any of these events occurs, the Company’s ability to achieve its development and commercialization goals would be adversely affected. Certain prior period amounts have been adjusted to reflect the Company's 1-for-6 reverse stock split of its common stock completed on February 15, 2013 (see Note 15, Reverse Stock Splits, for further details). |
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- Definition
The entire disclosure for the business description and basis of presentation concepts. Business description describes the nature and type of organization including but not limited to organizational structure as may be applicable to holding companies, parent and subsidiary relationships, business divisions, business units, business segments, affiliates and information about significant ownership of the reporting entity. Basis of presentation describes the underlying basis used to prepare the financial statements (for example, US Generally Accepted Accounting Principles, Other Comprehensive Basis of Accounting, IFRS). No definition available.
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Summary of Significant Accounting Policies
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Dec. 31, 2012
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| Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Use of Estimates and Assumptions
The preparation of financial statements in conformity with United States generally accepted accounting principles requires management to make significant estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during reporting periods. Actual results could differ from those estimates.
The Company bases its estimates on historical experience and various other assumptions that it believes to be reasonable under the circumstances and regularly assesses these estimates, but actual results could differ materially from these estimates. Effects of changes in estimates are recorded in the period in which they occur.
Cash and Cash Equivalents
The Company considers all highly liquid investments with an original maturity of ninety days or less to be cash equivalents. Cash equivalents are recorded at cost which approximates fair value. The Company invests cash primarily in a money market account and other investments which management believes are subject to minimal credit and market risk.
Concentrations of Credit Risk
Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and cash equivalents in bank deposit accounts and trade receivables. The Company invests its funds in highly rated institutions and limits its investment in any individual account so that they do not exceed FDIC limits. The Company has not experienced significant losses related to cash and cash equivalents and does not believe it is exposed to any significant credit risks relating to its cash and cash equivalents.
At December 31, 2012, one customer accounted for 11.5% of accounts receivable. For the years ended December 31, 2012, 2011, and 2010, no single customer accounted for more than 10% of revenue.
The Company relies on in-house assembly and three third-party manufacturers to manufacture the major portion of its current products and product components. The disruption or termination of the supply of these products or a significant increase in the cost of these products from these sources could have an adverse effect on the Company’s business, financial position, and results of operations.
Inventories
Inventories, consisting primarily of purchased components, are stated at the lower of cost or market. Cost is determined using the first-in, first-out method. The Company writes down inventory to its net realizable value for excess or obsolete inventory.
Fair Value
The carrying amounts of the Company’s financial instruments, which include cash equivalents, accounts receivable, accounts payable, and accrued expenses approximate their fair value at December 31, 2012 and 2011.
Revenue Recognition
The Company recognizes revenue when the following criteria have been met: persuasive evidence of an arrangement exists, delivery has occurred and risk of loss has passed, the seller’s price to the buyer is fixed or determinable, and collection is reasonably assured. Revenues associated with the sale of the ADVANCE devices to customers and distributors are recognized upon shipment, provided that the selling price is fixed or determinable, persuasive evidence of an arrangement exists, collection of receivables is reasonably assured, product returns are reasonably estimable, and no continuing obligations exist. The revenues from the sale of an ADVANCE communication hub together with access to NeuroMetrix information systems are considered one unit of accounting and deferred and recognized on a straight-line basis over the estimated period of time that the Company provides the service associated with the information systems of three years. The resulting deferred revenue and deferred costs are presented as separate line items on the accompanying balance sheet. Revenues related to extended service agreements for the devices are recognized ratably over the term of the extended service agreement.
Revenues associated with the sale of the NC-stat DPNCheck devices are recognized upon shipment, provided that the selling price is fixed or determinable, persuasive evidence of an arrangement exists, collection of receivables is reasonably assured, product returns are reasonably estimable, and no continuing obligations exist.
Revenues also include sales of consumables, including single use nerve specific electrodes, EMG needles, and other accessories. These revenues are recognized upon shipment provided that the selling price is fixed or determinable, persuasive evidence of an arrangement exists, collection of receivables is reasonably assured, and product returns are reasonably estimable.
When multiple elements are contained in a single arrangement, the Company allocates revenue between the elements based on their relative selling prices. The Company determines selling price using vendor specific objective evidence, or VSOE, if it is available, third-party evidence, or TPE, if VSOE is not available, and best estimate of selling price, or BESP, if neither VSOE nor TPE are available. The Company generally expects that it will not be able to establish TPE due to the nature of the markets in which it competes, and, as such, it will typically determine selling price using VSOE or if not available, BESP. The objective of BESP is to determine the selling price of a deliverable on a standalone basis. The Company’s determination of BESP involves a weighting of several factors based on the specific facts and circumstances of an arrangement. Specifically, the Company considers the cost to produce the deliverable, the anticipated margin on that deliverable, the selling price and profit margin for similar parts, its ongoing pricing strategy, the value of any enhancements that have been built into the deliverable, and the characteristics of the varying markets in which the deliverable is sold.
Revenue recognition involves judgments, including assessments of expected returns and expected customer relationship periods. The Company analyzes various factors, including a review of specific transactions, its historical returns, average customer relationship periods, customer usage, customer balances, and market and economic conditions. Changes in judgments or estimates on these factors could materially impact the timing and amount of revenues and costs recognized. Should market or economic conditions deteriorate, the Company’s actual return or bad debt experience could exceed its estimate.
Certain product sales are made with a 30-day right of return. Since the Company can reasonably estimate future returns, it recognizes revenues associated with product sales that contain a right of return upon shipment and at the same time it records a sales return reserve, which reduces revenue and accounts receivable by the amount of estimated returns. Accounts Receivable
Trade accounts receivable are recorded at the invoiced amount and do not bear interest. Accounts receivable on the balance sheet are recorded net of the allowance for doubtful accounts receivable and the reserve for estimated returns. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in its existing accounts receivable. The Company reviews its allowance for doubtful accounts and determines the allowance based on an analysis of customer past payment history, product usage activity, and recent communications between the Company and the customer. Past due balances are reviewed individually for collectibility. Account balances are written-off against the allowance when the Company feels it is probable the receivable will not be recovered. The Company does not have any off-balance sheet credit exposure related to its customers. Income TaxesThe Company records income taxes using the asset and liability method. Deferred income tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective income tax bases, and operating loss and tax credit carryforwards. The Company’s financial statements contain certain deferred tax assets, which have arisen primarily as a result of operating losses, as well as other temporary differences between financial and tax accounting. In accordance with the provisions of the Income Taxes topic of the Codification, the Company is required to establish a valuation allowance if the likelihood of realization of the deferred tax assets is reduced based on an evaluation of objective verifiable evidence. Significant management judgment is required in determining the Company’s provision for income taxes, the Company’s deferred tax assets and liabilities and any valuation allowance recorded against those net deferred tax assets. The Company evaluates the weight of all available evidence to determine whether it is more likely than not that some portion or all of the net deferred income tax assets will not be realized.
Utilization of the NOL and research and development credit carryforwards may be subject to a substantial annual limitation due to ownership change limitations that have occurred previously or that could occur in the future, as provided by Section 382 of the Internal Revenue Code of 1986, as well as similar state provisions. Ownership changes may limit the amount of NOL and tax credit carryforwards that can be utilized to offset future taxable income and tax, respectively. In general, an ownership change, as defined by Section 382, results from transactions increasing the ownership of certain shareholders or public groups in the stock of a corporation by more than 50 percentage points over a three-year period.
If the Company has experienced a change of control, utilization of its NOL or tax credits carryforwards would be subject to an annual limitation under Section 382. Any limitation may result in expiration of a portion of the NOL or research and development credit carryforwards before utilization. Subsequent ownership changes could further impact the limitation in future years. Further, until a study is completed and any limitation known, no amounts are being presented as an uncertain tax position.
A full valuation allowance has been provided against the Company’s NOL carryforwards and research and development credit carryforwards and, if an adjustment is required, this adjustment would be offset by an adjustment to the valuation allowance. Thus, there would be no impact to the balance sheet or statement of operations if an adjustment were required.
Management performed a two-step evaluation of all tax positions, ensuring that these tax return positions meet the “more likely than not” recognition threshold and can be measured with sufficient precision to determine the benefit recognized in the financial statements. These evaluations provide management with a comprehensive model for how a company should recognize, measure, present, and disclose in its financial statements certain tax positions that the Company has taken or expects to take on income tax returns. Research and Development
Costs incurred in the research and development of the Company’s products are expensed as incurred. Included in research and development costs are wages, benefits, product design consulting, and other operating costs such as facilities, supplies, and overhead directly related to the Company’s research and development efforts. Product Warranty Costs
The Company accrues estimated product warranty costs at the time of sale which are included in cost of sales in the statements of operations. The amount of the accrued warranty liability is based on historical information such as past experience, product failure rates, number of units repaired, and estimated cost of material and labor. The liabilities for product warranty costs of $18,629 and $32,308 at December 31, 2012 and 2011, respectively, are included in accrued expenses in the accompanying balance sheets.
Fixed Assets and Long-Lived Assets
Fixed assets are recorded at cost and depreciated using the straight-line method over the estimated useful life of each asset. Expenditures for repairs and maintenance are charged to expense as incurred. On disposal, the related assets and accumulated depreciation are eliminated from the accounts and any resulting gain or loss is included in the Company’s statement of operations. Leasehold improvements are amortized over the shorter of the estimated useful life of the improvement or the remaining term of the lease.
The Company periodically evaluates the recoverability of its fixed assets and other long-lived assets whenever events or changes in circumstances indicate that an event of impairment may have occurred. This periodic review may result in an adjustment of estimated depreciable lives or asset impairment. When indicators of impairment are present, the carrying values of the asset are evaluated in relation to the assets operating performance and future undiscounted cash flows of the underlying assets. If the future undiscounted cash flows are less than their book value, an impairment may exist. The impairment is measured as the difference between the book value and the fair value of the underlying asset. Fair values are based on estimates of the market prices and assumptions concerning the amount and timing of estimated future cash flows and assumed discount rates, reflecting varying degrees of perceived risk.
Accounting for Stock-Based Compensation
Stock-based compensation cost is generally recognized ratably over the requisite service period. The Company uses the Black-Scholes option pricing model for determining the fair value of its stock options and amortizes its stock-based compensation expense using the straight-line method. The Black-Scholes model requires certain assumptions that involve judgment. Such assumptions are the expected share price volatility, expected life of options, expected annual dividend yield, and risk-free interest rate (See Note 3 – Stock-Based Compensation and Equity).
Net Loss per Common Share
Basic net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding during the period. Unvested restricted shares, although legally issued and outstanding, are not considered outstanding for purposes of calculating basic net loss per share. Diluted net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding during the period plus the dilutive effect of outstanding instruments such as options, warrants, and restricted stock. Because the Company has reported a net loss for all periods presented, diluted loss per common share is the same as basic loss per common share, as the effect of utilizing the fully diluted share count would have reduced the net loss per common share. Therefore, in calculating net loss per share amounts, the following shares underlying potentially dilutive common stock equivalents were excluded from the calculation of diluted net income per common share because their effect was anti-dilutive for each of the periods presented:
Warrants outstanding at December 31, 2012 were issued in the public offering completed on February 13, 2012 (see Note 14, Public Offering of Common Stock and Warrants, for further details). Warrants outstanding at December 31, 2011 and 2010 were redeemed in March 2012 in exchange for 23,127 shares of common stock. Advertising and Promotional Costs
Advertising and promotional costs are expensed as incurred. Advertising and promotion expense was $242,000, $426,000, and $256,000 in the years ended December 31, 2012, 2011, and 2010, respectively. Accumulated Other Comprehensive Items
For the years ended December 31, 2012, 2011, and 2010, the Company had no components of other comprehensive income or loss other than net loss. SegmentsThe Company operates in one segment for the sale of medical equipment and consumables. Substantially all of the Company’s assets, revenues, and expenses for the years ended December 31, 2012, 2011, and 2010 were located at or derived from operations in the United States. Revenues from sales outside the United States accounted for approximately 7% of total revenues in 2012, 6% of total revenues in 2011, and 2% of total revenues in 2010. Risks and Uncertainties
The Company is subject to risks common to companies in the medical device industry, including, but not limited to, development by the Company or its competitors of new technological innovations, dependence on key personnel, customers’ reimbursement from third-party payers, protection of proprietary technology, and compliance with regulations of the FDA and other governmental agencies.
In late 2011, the Company launched NC-stat DPNCheck, which is a fast, accurate, and quantitative nerve conduction test for the assessment of systemic neuropathies such as DPN. In early 2013 the Company launched SENSUS for the treatment intractable pain, including pain associated with diabetic neuropathy. The future prospects of the Company are closely tied to its success with NC-stat DPNCheck and SENSUS in market acceptance and growth in future revenues. Recently Issued or Adopted Accounting Pronouncements
In May 2011, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, No. 2011-04, “Fair Value Measurement (Topic 820) — Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS”, or ASU 2011-04. The amendments in ASU 2011-04 result in common fair value measurement and disclosure requirements in GAAP and International Financial Reporting Standards, or IFRS. Consequently, the amendments change the wording used to describe many of the requirements in GAAP for measuring fair value and for disclosing information about fair value measurements. The Company adopted this new guidance prospectively beginning January 1, 2012. Adoption has not had a material effect on the Company’s financial statements.
In June 2011, the FASB issued ASU No. 2011-05, “Comprehensive Income (Topic 220) — Presentation of Comprehensive Income”, or ASU No. 2011-05. ASU No. 2011-05 requires that all nonowner changes in stockholders’ equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements, eliminating the option to present other comprehensive income in the statement of changes in equity. Under either choice, items that are reclassified from other comprehensive income to net income are required to be presented on the face of the financial statements where the components of net income and the components of other comprehensive income are presented. In December 2011, the FASB issued ASU No. 2011-12, “Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05”, which defers the requirement within ASU No. 2011-05 to present on the face of the financial statements the effects of reclassifications out of accumulated other comprehensive income on the components of net income and other comprehensive income for all periods presented. During the deferral, entities should continue to report reclassifications out of accumulated other comprehensive income consistent with the presentation requirements in effect prior to the issuance of ASU No. 2011-05. The Company adopted this new guidance retrospectively beginning January 1, 2012. Adoption has not had a material effect on the Company’s financial statements. |
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The entire disclosure for all significant accounting policies of the reporting entity. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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Stock-Based Compensation and Stockholders' Equity
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| Share-Based Compensation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-Based Compensation and Equity | 3. Stock-Based Compensation and Stockholders’ EquityStock-Based CompensationDuring 2004, the Company adopted the 2004 Stock Option and Incentive Plan, as amended and restated in 2006, 2008 and 2009. At the Annual Meeting of Stockholders held on May 14, 2012, the stockholders of the Company approved the Company’s Fourth Amended and Restated 2004 Stock Option and Incentive Plan (the “2004 Stock Plan”), which, among other things, increased the number of shares of the Company’s common stock authorized for issuance thereunder by 166,667 shares. The 2004 Stock Plan, among other things, provides for granting of incentive and nonqualified stock option and stock bonus awards to officers, employees and outside consultants. Outstanding options under the 2004 Stock Plan generally vest over three or four years and terminate 10 years after the grant date, or earlier if the option holder is no longer an executive officer, employee, consultant, advisor or director, as applicable, of the Company. As of December 31, 2012, 276,279 shares of common stock were authorized for issuance under the 2004 Stock Plan, of which 9,272 shares had been issued, 47,907 shares were subject to outstanding options at a weighted average exercise price of $72.06 per share and 176,882 shares were available for future grant. During May 2009, the Company adopted the 2009 Non-Qualified Inducement Stock Plan (the “2009 Inducement Plan”). The 2009 Inducement Plan is intended to encourage and enable employees, including prospective employees, of the Company upon whose judgment, initiative, and efforts the Company largely depends for the successful conduct of its business to acquire a proprietary interest in the Company. The 2009 Inducement Plan, among other things, provides for the granting of awards, including non-qualified stock options, restricted stock, and unrestricted stock. As of December 31, 2012, 13,889 shares of common stock were authorized for issuance under the 2009 Inducement Plan, of which no shares had been issued, 2,083 shares were subject to outstanding options at a weighted average exercise price of $9.60 per share, and 11,806 shares were available for future grant. The exercise price of each stock option issued under the 1996 and 1998 Stock Plans was specified by the Board of Directors at the time of grant. The exercise price of stock options awarded under the 2004 Stock Plan and the 2009 Inducement Plan may not be less than the fair market value of the common stock on the date of the option grant. For holders of more than 10% of the Company’s total combined voting power of all classes of stock, incentive stock options may not be granted at less than 110% of the fair market value of the Company’s common stock at the date of grant and for a term not to exceed five years. In June 2004, the Company adopted the 2004 Employee Stock Purchase Plan (the “2004 ESPP”). All of the Company’s employees who had been employed by the Company for at least 60 days and whose customary employment is for more than 20 hours per week and for more than five months in any calendar year were eligible to participate and any employee who owned 5% or more of the voting power or value of the Company’s stock was not eligible to participate. The 2004 ESPP authorized the issuance of up to a total of 10,417 shares of the Company’s common stock to participating employees. In May 2010, the Company adopted the 2010 Employee Stock Purchase Plan (the “2010 ESPP”). The 2010 ESPP initially authorized the issuance of up to a total of 6,945 shares, of the Company’s common stock to participating employees plus an annual increase on the first day of each of the Company's fiscal years beginning in 2011, equal to the lesser of (i) 6,945 shares, (ii) 1 percent of the shares of common stock outstanding on the last day of the immediately preceding fiscal year, or (iii) such lesser number of shares as is determined by the Board. At the Company’s Annual Meeting of Stockholders held on May 14, 2012, the stockholders of the Company approved the Company’s Amended and Restated 2010 Employee Stock Purchase Plan (the “Amended and Restated 2010 ESPP”), which, among other things, increased the number of shares of the Company’s common stock authorized for issuance thereunder by 16,667 shares. All of the Company’s full-time employees and certain part-time employees are eligible to participate in the Amended and Restated 2010 ESPP. For part-time employees to be eligible, they must have customary employment of more than five months in any calendar year and more than 20 hours per week. Employees who, after exercising their rights to purchase shares under the Amended and Restated 2010 ESPP, would own shares representing 5% or more of the voting power of the Company’s common stock, are ineligible to participate. Under the Amended and Restated 2010 ESPP, participating employees can authorize the Company to withhold up to 10% of their earnings during consecutive six-month payment periods for the purchase of the shares. At the conclusion of each period, participating employees can purchase shares at 85% of the lower of their fair market value at the beginning or end of the period. The Amended and Restated 2010 ESPP is regarded as a compensatory plan. For the years ended December 31, 2012 and 2011 the Company issued 8,895 and 4,090 shares of its common stock, respectively, under the Amended and Restated 2010 ESPP and the 2010 ESPP, respectively. As of December 31, 2012, there were 21,765 remaining shares to be issued under the Amended and Restated 2010 ESPP. The Company uses the Black-Scholes option pricing model for determining the fair value of shares of common stock issued or to be issued under the 2010 ESPP and the Amended and Restated 2010 ESPP. The following assumptions are used in determining fair value: The risk-free interest rate assumption is based on the United States Treasury’s constant maturity rate for a six month term (corresponding to the expected option term) on the date the option was granted. The expected dividend yield is zero because the Company does not currently pay dividends nor expects to do so during the expected option term. An expected term of six months is used based on the duration of each plan offering period. The volatility assumption is based on a consideration of stock price volatility over the most recent period of time corresponding to the expected term and is also based on expected future stock price volatility. The weighted average grant-date fair value used in the calculation of stock-based compensation expense in the accompanying statement of operations for the years ended December 31, 2012, 2011, and 2010 is calculated using the following assumptions:
The risk-free interest rate assumption is based on the United States Treasury’s constant maturity rate for a five year term (corresponding to the expected option term) on the date the option was granted. The expected dividend yield is zero as the Company does not currently pay dividends nor expects to do so during the expected option term. The expected option term of five years is estimated based on an analysis of actual option exercises and a review of comparable medical device companies. The volatility assumption is based on weekly historical volatility during the time period that corresponds to the expected option term, a review of comparable medical device companies and expected future stock price volatility. The pre-vesting forfeiture rate is based on the historical and projected average turnover rate of employees. A summary of option activity for the year ended December 31, 2012 is presented below:
Expected to vest options are determined by applying the pre-vesting forfeiture rate to the total outstanding options. Aggregate intrinsic value represents the total pre-tax intrinsic value (the aggregate difference between the closing stock price of the Company’s common stock as of December 31, 2012, as applicable, and the exercise price for the in-the-money options) that would have been received by the option holders if all the in-the-money options had been exercised on December 31, 2012. The weighted average per share grant-date fair values of options granted during the years ended December 31, 2012, 2011, and 2010 was $2.67, $11.34, and $28.44, respectively. The aggregate intrinsic value of options issued or exercised during the years ended December 31, 2012, 2011, and 2010 was $0, $0, and $3,000, respectively. Total unrecognized stock-based compensation costs related to non-vested stock options was $251,747, which related to 49,043 shares with a per share weighted fair value of $5.16 as of December 31, 2012. This unrecognized cost is expected to be recognized over a weighted average period of approximately 0.6 years. Stock options granted to non-employees are recorded at fair value and adjusted to market over the vesting period. The Company determines fair value using the Black-Scholes option pricing model, an expected term equal to the option term, a risk-free interest rate corresponding to the expected term, a stock price volatility over the most recent period of time corresponding to the expected term and also based on expected future stock price volatility, and a dividend yield of zero. There were no options granted to non-employees during the year ended December 31, 2012. Beginning in 2010, certain employees have been granted restricted stock. During 2012, 2011, and 2010, the Company granted 37,167, 3,630, and 2,616 shares of restricted stock, respectively. The fair value of restricted stock is calculated based on the closing sale price of the Company’s common stock on the date of issuance. A summary of restricted stock activity for the year ended December 31, 2012 is presented below:
During the years ended December 31, 2012 and 2011, certain employees, in lieu of paying withholding taxes on the vesting of restricted stock, authorized the withholding of an aggregate of 721 and 147 shares, respectively, of common stock to satisfy the minimum tax withholding requirements related to such vesting. Shares withheld were calculated using the market price of the common stock on the vesting dates. During 2010, certain employees received bonus payments in the form of common stock. A total of 307 such shares were issued with a total intrinsic value of $23,000. Cash received from option exercises and purchases under the 2004 ESPP and the 2010 ESPP for the years ended December 31, 2012, 2011, and 2010 was $23,000, $34,000, and $163,000, respectively. The Company issues new shares upon option exercises, purchases under the Company’s ESPPs, and vesting of restricted stock. The Company recorded stock-based compensation expense of $319,000, $837,000, and $1.2 million for the years ended December 31, 2012, 2011, and 2010, respectively. Stockholders’ EquityOn February 13, 2012, the Company completed a public offering of 1,421,735 Units at a price of $6.00 per Unit. Each Unit consists of one share of the Company’s common stock and one warrant to purchase one half of a share of the Company’s common stock. The Company issued 1,421,735 shares of common stock and warrants to purchase 781,955 shares of common stock and received offering proceeds, net of discounts, commissions and expenses, of approximately $7.4 million. See Note 14, Public Offering of Common Stock and Warrants, for further details. In March 2012, the Company issued 23,127 shares of its common stock, $0.0001 par value per share, in satisfaction of the Company’s obligation to redeem certain warrants issued by the Company pursuant to Securities Purchase Agreements dated as of September 8, 2009. No cash was paid to redeem the warrants. As of December 31, 2012, the Company had 50,000,000 shares of common stock authorized and 2,140,871 shares issued and outstanding. Each share of common stock entitles the holder to one vote on all matters submitted to a vote of the Company’s stockholders. Common stockholders are not entitled to receive dividends unless declared by the Board of Directors. At December 31, 2012, the Company has reserved authorized shares of common stock for future issuance as follows:
On March 7, 2007, the Company’s Board of Directors adopted a Shareholder Rights Plan and declared a dividend distribution of one preferred stock purchase right for each outstanding share of the Company’s common stock to shareholders of record as of the close of business on March 8, 2007. As of December 31, 2012 and 2011, there was no preferred stock outstanding. |
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The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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Intangible Assets
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| Intangible Assets | 4. Intangible AssetsIn January 2009, the Company acquired certain technological and intellectual property assets from Cyberkinetics Neurotechnology Systems, Inc., or Cyberkinetics, and Andara Life Science, Inc., a wholly-owned subsidiary of Cyberkinetics, for $350,000 in cash. The Company had been amortizing these intangible assets using the straight-line method over their economic lives, which was estimated to be five years. Research and development expenses included amortization of this technological and intellectual property of $17,500 for the quarter March 31, 2011. Following its decision to terminate development work related to this technology, the Company recorded within research and development expense in the second quarter of 2011 an impairment charge of $192,500 for the remaining unamortized balance of these assets. There was no amortization expense in the year ended December 31, 2012. Amortization expense for the year ended December 31, 2010 was $70,000. Intangible assets consisted of the following:
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The entire disclosure for all or part of the information related to intangible assets. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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Inventories
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Dec. 31, 2012
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| Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Inventories | 5. InventoriesInventories consist of the following:
The decrease in the inventory balance at December 31, 2012, reflects the Company’s efforts to manage inventory balances. |
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The entire disclosure for inventory. This may include, but is not limited to, the basis of stating inventory, the method of determining inventory cost, the major classes of inventory, and the nature of the cost elements included in inventory. If inventory is stated above cost, accrued net losses on firm purchase commitments for inventory and losses resulting from valuing inventory at the lower-of-cost-or-market may also be included. For LIFO inventory, may disclose the amount and basis for determining the excess of replacement or current cost over stated LIFO value and the effects of a LIFO quantities liquidation that impacts net income. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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Fixed Assets
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Dec. 31, 2012
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| Fixed Assets | 6. Fixed AssetsFixed assets consist of the following:
Depreciation expense was $239,168, $359,432, and $453,756 for the years ended December 31, 2012, 2011, and 2010, respectively. A capital lease is included as a component of furniture and equipment at December 31, 2012 and 2011. Amortization of assets under this capital lease is included in depreciation expense. See Note 10 — Commitments and Contingencies for more information regarding this capital lease. |
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The entire disclosure for long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale. Examples include land, buildings, machinery and equipment, and other types of furniture and equipment including, but not limited to, office equipment, furniture and fixtures, and computer equipment and software. This disclosure may include property plant and equipment accounting policies and methodology, a schedule of property, plant and equipment gross, additions, deletions, transfers and other changes, depreciation, depletion and amortization expense, net, accumulated depreciation, depletion and amortization expense and useful lives, income statement disclosures, assets held for sale and public utility disclosures. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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Accrued Expenses
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Dec. 31, 2012
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| Accrued Expenses | 7. Accrued Expenses Accrued expenses consist of the following for the years ended December 31, 2011 and 2010:
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The entire disclosure for accounts payable, accrued expenses, and other liabilities that are classified as current at the end of the reporting period. No definition available.
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Restructuring Related Activity
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Dec. 31, 2012
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| Restructuring Related Activity | 8. Restructuring Related Activity In January 2011, the Company announced it had restructured its neurodiagnostic activities to more efficiently focus its efforts on its installed base of active accounts, to shift distribution to independent sales representatives, and to reduce cash consumption. Twenty-five positions were eliminated, primarily in sales. Charges totaled $2.2 million related to severance costs and inventory. Approximately $2.0 million, consisting of $0.2 million in severance and $1.8 million in inventory charges, was recorded as of December 31, 2010 and the balance of approximately $0.2 million in severance was recorded in 2011. The full amount of the charge was paid as of December 31, 2011. During the third quarter of 2010, the Company implemented a reduction in workforce that resulted in the elimination of 25 positions and recorded a charge of $172,000 primarily related to severance expenses. The full amount of the charge was paid as of September 30, 2010. The following table provides a rollforward of the liability balance for these restructuring actions, substantially all of which were recorded as sales and marketing expense in the Company’s Statement of Operations.
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The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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Income Taxes
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Dec. 31, 2012
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| Income Taxes | 9. Income TaxesCurrent income tax expense (benefit) attributable to continuing operations consists of the following for the years ended December 31, 2012, 2011, and 2010.
The Company’s effective income tax rate differs from the statutory federal income tax rate as follows for the years ended December 31, 2012, 2011, and 2010.
The Company’s deferred tax assets consist of the following:
At December 31, 2012, the Company has federal and state net operating loss carryforwards (“NOL”) of $89.4 million and $38.0 million, respectively, as well as federal and state tax credits of $1.0 million and $901,000, respectively, which may be available to reduce future taxable income and the related taxes thereon. This amount includes tax benefits of $3.7 million and $71,000 attributable to NOL and tax credit carryforwards, respectively, that result from the exercise of employee stock options. The tax benefit of these items will be recorded as a credit to additional paid-in capital upon realization of the deferred tax asset or reduction in income taxes payable. The federal NOL’s begin to expire in 2019 and the state NOL’s begin to expire in 2013. The federal and state research and development credits both begin to expire in 2018. In accordance with the provisions of the Income Taxes topic of the Codification, the Company has evaluated the positive and negative evidence bearing upon the realizability of its deferred tax assets, which are comprised principally of net operating losses. Management has determined that it is more likely than not that the Company will not recognize the benefits of federal and state deferred tax assets and, as a result, a valuation allowance of approximately and $34.3 million and $30.5 million has been established at December 31, 2012 and 2011, respectively. Utilization of the NOL and research and development credit carryforwards may be subject to a substantial annual limitation due to ownership change limitations that have occurred previously or that could occur in the future, as provided by Section 382 of the Internal Revenue Code of 1986, as well as similar state provisions. Ownership changes may limit the amount of NOL and tax credit carryforwards that can be utilized to offset future taxable income and tax, respectively. In general, an ownership change, as defined by Section 382, results from transactions increasing the ownership of certain shareholders or public groups in the stock of a corporation by more than 50 percentage points over a three-year period. If the Company has experienced a change of control, utilization of its NOL or tax credits carryforwards would be subject to an annual limitation under Section 382. Any limitation may result in expiration of a portion of the NOL or research and development credit carryforwards before utilization. Subsequent ownership changes could further impact the limitation in future years. Further, until a study is completed and any limitation known, no amounts are being presented as an uncertain tax position. A full valuation allowance has been provided against the Company’s NOL carryforwards and research and development credit carryforwards and, if an adjustment is required, this adjustment would be offset by an adjustment to the valuation allowance. Thus, there would be no impact to the balance sheet or statement of operations if an adjustment were required. |
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The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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Commitments and Contingencies
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Dec. 31, 2012
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| Commitments and Contingencies | 10. Commitments and ContingenciesOperating LeasesLease Agreement with Fourth Avenue LLCIn June 2012, the Company amended the Lease Agreement dated October 18, 2000 between Fourth Avenue LLC and the Company for office and engineering laboratory space to extend the term of the lease through March 31, 2014. Base rent for the period January 2013 through March 2014 is $52,917 per month. Future minimum lease payments under noncancelable operating leases as of December 31, 2012 are as follows:
Total recorded rent expense was $709,164, $764,754, and $764,754 for the years ended December 31, 2012, 2011, and 2010, respectively. The Company records rent expense on its facility lease on a straight-line basis over the lease term. Capital LeaseIn October 2010, the Company entered into a non-cancelable capital lease for copiers located at its corporate headquarters valued at $60,410, expiring in September 2013. Future minimum lease payments under the capital lease as of December 31, 2012 are as follows:
Other CommitmentsAt December 31, 2012, other commitments, comprised of purchase orders, totaled approximately $566,628. |
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The entire disclosure for commitments and contingencies. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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Fair Value Measurements
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Dec. 31, 2012
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| Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value Measurements | 11. Fair Value MeasurementsThe Fair Value Measurements and Disclosures Topic of the Codification defines fair value, establishes a framework for measuring fair value in applying generally accepted accounting principles, and expands disclosures about fair value measurements. This Codification topic identifies two kinds of inputs that are used to determine the fair value of assets and liabilities: observable and unobservable. Observable inputs are based on market data or independent sources while unobservable inputs are based on the Company’s own market assumptions. Once inputs have been characterized, this Codification topic requires companies to prioritize the inputs used to measure fair value into one of three broad levels. Fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities. Fair values identified by Level 2 inputs utilize observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities. Fair values identified by Level 3 inputs are unobservable data points and are used to measure fair value to the extent that observable inputs are not available. Unobservable inputs reflect the Company’s own assumptions about the assumptions that market participants would use at pricing the asset or liability. The following tables present information about the Company’s assets and liabilities that are measured at fair value on a recurring basis for the periods presented and indicates the fair value hierarchy of the valuation techniques it utilized to determine such fair value. In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities. Fair values determined by Level 2 inputs utilize data points that are observable such as quoted prices, interest rates, and yield curves. Fair values determined by Level 3 inputs are unobservable data points for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability.
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The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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Retirement Plan
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12 Months Ended |
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Dec. 31, 2012
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| Compensation and Retirement Disclosure [Abstract] | |
| Retirement Plan | 12. Retirement PlanThe Company established a 401(k) defined contribution savings plan for its employees who meet certain service period and age requirements. Contributions are permitted up to the maximum allowed under the Internal Revenue Code of each covered employee’s salary. The savings plan permits the Company to contribute at its discretion. For the years ended December 31, 2012, 2011, and 2010 the Company made no contributions to the plan. |
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The entire disclosure for pension and other postretirement benefits. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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Credit Facility
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Dec. 31, 2012
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| Debt Disclosure [Abstract] | |
| Credit Facility | 13. Credit FacilityThe Company is party to a Loan and Security Agreement, or the Credit Facility, with a bank. As of December 31, 2012 the Credit Facility permitted the Company to borrow up to $7.5 million on a revolving basis. The Credit Facility was subsequently amended on January 28, 2013 and the amount of the Credit Facility was set at $2.5 million. The amended facility was extended, until its new expiry date of January 31, 2014. Amounts borrowed under the Credit Facility will bear interest equal to the prime rate plus 0.5%. Any borrowings under the Credit Facility will be secured by the Company’s cash, accounts receivable, inventory, and equipment. The Credit Facility includes traditional lending and reporting covenants. These include certain financial covenants applicable to liquidity that are to be maintained by the Company. As of December 31, 2012, the Company was in compliance with these covenants and had not borrowed any funds under the Credit Facility. The amount of $225,000 of the Credit Facility limit is restricted to support a letter of credit issued in favor of the Company’s landlord in the lease of its facilities in Waltham, Massachusetts. Consequently, the amount available for borrowing under the Credit Facility as of December 31, 2012 was $7,275,000 and was subsequently reduced to $2,275,000 on January 28, 2013, as noted above. |
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The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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Public Offering of Common Stock and Warrants
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Dec. 31, 2012
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| Stockholders' Equity Note [Abstract] | |
| Public Offering of Common Stock and Warrants | 14. Public Offering of Common Stock and WarrantsOn February 13, 2012, the Company completed a public offering of 1,421,735 Units at a price of $6.00 per Unit (the “Offering”). Each Unit consists of one share of the Company’s common stock and one warrant to purchase one half of a share of the Company’s common stock. The Company issued 1,421,735 shares of common stock and warrants to purchase 710,868 shares of common stock and received offering proceeds, net of discounts, commissions and expenses, of approximately $7.4 million. Each warrant entitles the holder to purchase at any time during the period commencing 180 days after the date of the Offering until the date five years following the closing date of the Offering, one half of a share of the Company’s common stock. Two warrants would need to be exercised to acquire one share of the Company’s common stock at an exercise price of $6.90 (115% of the aggregate offering price for a unit). In addition, the placement agent for the Offering was issued warrants to purchase 71,087 shares of common stock (equal to 5.0% of the number of shares of common stock included in the Units sold in the Offering) at an exercise price of $7.50 per share (125% of the aggregate offering price for a Unit). The placement agent’s warrants will be exercisable at any time beginning one year after the date of issuance and will expire on the fifth anniversary of the effectiveness of the registration statement related to the Offering. The fair value of the warrants was estimated at $2.4 million using a Black-Scholes model with the following assumptions: expected volatility of 73.5%, risk free interest rate of 0.85%, expected life of five years, and no dividends. The volatility assumption is based on weekly historical volatility during the time period that corresponds to the expected option term, a review of comparable medical device companies, and expected future stock price volatility. The relative fair value of the warrants was recorded as equity. |
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Common Stock Issuance [Text Block] No definition available.
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Reverse Stock Split
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Dec. 31, 2012
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| Reverse Stock Split Disclosure [Abstract] | |
| Reverse Stock Split | 15. Reverse Stock Splits
The Company’s common stock is quoted on the NASDAQ Capital Market under the symbol “NURO.” One of the requirements for continued listing on the NASDAQ Capital Market is maintenance of a minimum closing bid price of $1.00 per share. Because the Company’s common stock had been trading below a price of $1.00 per share, and was subject to delisting from The NASDAQ Stock Market LLC, or NASDAQ as a result, on September 1, 2011, the Company filed a Certificate of Amendment to its Restated Certificate of Incorporation, as amended, with the Secretary of State of the State of Delaware, to effect a 1-for-6 reverse stock split of its common stock, or the Reverse Stock Split. This action had previously been approved by the Company’s stockholders at the Company’s annual meeting held on May 16, 2011. As a result of the Reverse Stock Split, every six shares of the Company’s pre-reverse split common stock were combined and reclassified into one share of its common stock. No fractional shares were issued in connection with the Reverse Stock Split. Stockholders who otherwise would have been entitled to receive a fractional share in connection with the Reverse Stock Split received a cash payment in lieu thereof. The par value and other terms of the common stock were not affected by the Reverse Stock Split.
The Company’s shares outstanding immediately prior to the Reverse Stock Split totaled 23,331,646, which were adjusted to 3,888,607 shares outstanding as a result of the Reverse Stock Split. The Company’s common stock began trading at its post-Reverse Stock Split price at the beginning of trading on September 2, 2011. On September 19, 2011, the Company received a letter from NASDAQ indicating that it had regained compliance with the minimum bid price requirement under NASDAQ Listing Rule 5550(a)(2) for continued listing on The NASDAQ Capital Market. The Company’s common stock continued to be listed on NASDAQ.
On March 22, 2012, the Company received a notice from the Listing Qualifications Department of the NASDAQ Stock Market indicating that, for the last 30 consecutive business days, the bid price for its common stock had closed below the minimum $1.00 per share required for continued inclusion on The NASDAQ Capital Market under NASDAQ Listing Rule 5550(a)(2). The notification letter stated that pursuant to NASDAQ Listing Rule 5810(c)(3)(A) the Company would be afforded 180 calendar days, or until
September 18, 2012, to regain compliance with the minimum bid price requirement. On September 19, 2012, the Company received a letter from NASDAQ stating that it had been granted a six month extension until March 18, 2013 to regain compliance with the minimum bid price requirement for continued listing on The NASDAQ Capital Market. During this grace period extension, the Company’s common stock will continue to be listed on The NASDAQ Stock Market.
In order to regain compliance, shares of the Company’s common stock must maintain a minimum bid closing price of at least $1.00 per share for a minimum of ten consecutive business days. Therefore, on February 15, 2013, the Company filed a Certificate of Amendment to its Restated Certificate of Incorporation, as amended, with the Secretary of State of the State of Delaware, to effect a second 1-for-6 reverse stock split of its common stock, or the Second Reverse Stock Split. This action had previously been approved by the Company’s stockholders at a special meeting of stockholders held on December 7, 2012. As a result of the Second Reverse Stock Split, every six shares of the Company’s pre-reverse split common stock were combined and reclassified into one share of its common stock. No fractional shares were issued in connection with the Second Reverse Stock Split. Stockholders who otherwise would have been entitled to receive a fractional share in connection with the Second Reverse Stock Split received a cash payment in lieu thereof. The par value and other terms of the common stock were not affected by the Second Reverse Stock Split.
The Company’s shares outstanding immediately prior to the Second Reverse Stock Split totaled 12,845,228. These were adjusted to 2,140,871 shares outstanding as a result of the Reverse Stock Split. The Company’s common stock began trading at its post-Second Reverse Stock Split price at the beginning of trading on February 19, 2013. Share, per share, and stock option amounts for all periods presented within this annual report on Form 10-K and the amounts for common stock and additional paid-in capital have been retroactively adjusted to reflect the Second Reverse Stock Split. |
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The entire disclosure for reverse stock split. No definition available.
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Management Retention and Incentive Plan
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Dec. 31, 2012
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| Management Retention and Incentive Plan |
On August 2, 2012, the Company adopted the Management Retention and Incentive Plan (the “Plan”), under which a portion of the consideration payable upon a change of control transaction, as defined in the Plan, would be paid in cash to certain executive officers and key employees and recorded as compensation expense within the Statement of Operations during the period in which the change of control transaction occurs. The Plan is structured to work in conjunction with, and not replace, the Company’s other incentive programs and is designed to provide market-based incentives which will be reduced over time by any future equity grants to participants. |
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The entire disclosure for an entity's employee compensation and benefit plans, including, but not limited to, postemployment and postretirement benefit plans, defined benefit pension plans, defined contribution plans, non-qualified and supplemental benefit plans, deferred compensation, share-based compensation, life insurance, severance, health care, unemployment and other benefit plans. No definition available.
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Schedule II-Valuation and Qualifying Accounts
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Dec. 31, 2012
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| Schedule II-Valuation and Qualifying Accounts | Schedule II — Valuation and Qualifying Accounts
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The entire disclosure for any allowance and reserve accounts (their beginning and ending balances, as well as a reconciliation by type of activity during the period). Alternatively, disclosure of the required information may be within the footnotes to the financial statements or a supplemental schedule to the financial statements. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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Summary of Significant Accounting Policies (Policies)
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Dec. 31, 2012
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| Use of Estimates and Assumptions | Use of Estimates and AssumptionsThe preparation of financial statements in conformity with United States generally accepted accounting principles requires management to make significant estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during reporting periods. Actual results could differ from those estimates. The Company bases its estimates on historical experience and various other assumptions that it believes to be reasonable under the circumstances and regularly assesses these estimates, but actual results could differ materially from these estimates. Effects of changes in estimates are recorded in the period in which they occur. |
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| Cash and Cash Equivalents | Cash and Cash EquivalentsThe Company considers all highly liquid investments with an original maturity of ninety days or less to be cash equivalents. Cash equivalents are recorded at cost which approximates fair value. The Company invests cash primarily in a money market account and other investments which management believes are subject to minimal credit and market risk. |
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| Concentrations of Credit Risk | Concentrations of Credit RiskFinancial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and cash equivalents in bank deposit accounts and trade receivables. The Company invests its funds in highly rated institutions and limits its investment in any individual account so that they do not exceed FDIC limits. The Company has not experienced significant losses related to cash and cash equivalents and does not believe it is exposed to any significant credit risks relating to its cash and cash equivalents. At December 31, 2012, one customer accounted for 11.5% of accounts receivable. For the years ended December 31, 2012, 2011, and 2010, no single customer accounted for more than 10% of revenue. The Company relies on in-house assembly and three third-party manufacturers to manufacture the major portion of its current products and product components. The disruption or termination of the supply of these products or a significant increase in the cost of these products from these sources could have an adverse effect on the Company’s business, financial position, and results of operations. |
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| Inventories | InventoriesInventories, consisting primarily of purchased components, are stated at the lower of cost or market. Cost is determined using the first-in, first-out method. The Company writes down inventory to its net realizable value for excess or obsolete inventory. |
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| Fair Value | Fair ValueThe carrying amounts of the Company’s financial instruments, which include cash equivalents, accounts receivable, accounts payable, and accrued expenses approximate their fair value at December 31, 2012 and 2011. |
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| Revenue Recognition | Revenue Recognition
The Company recognizes revenue when the following criteria have been met: persuasive evidence of an arrangement exists, delivery has occurred and risk of loss has passed, the seller’s price to the buyer is fixed or determinable, and collection is reasonably assured. Revenues associated with the sale of the ADVANCE devices to customers and distributors are recognized upon shipment, provided that the selling price is fixed or determinable, persuasive evidence of an arrangement exists, collection of receivables is reasonably assured, product returns are reasonably estimable, and no continuing obligations exist. The revenues from the sale of an ADVANCE communication hub together with access to NeuroMetrix information systems are considered one unit of accounting and deferred and recognized on a straight-line basis over the estimated period of time that the Company provides the service associated with the information systems of three years. The resulting deferred revenue and deferred costs are presented as separate line items on the accompanying balance sheet. Revenues related to extended service agreements for the devices are recognized ratably over the term of the extended service agreement.
Revenues associated with the sale of the NC-stat DPNCheck devices are recognized upon shipment, provided that the selling price is fixed or determinable, persuasive evidence of an arrangement exists, collection of receivables is reasonably assured, product returns are reasonably estimable, and no continuing obligations exist. Revenues also include sales of consumables, including single use nerve specific electrodes, EMG needles, and other accessories. These revenues are recognized upon shipment provided that the selling price is fixed or determinable, persuasive evidence of an arrangement exists, collection of receivables is reasonably assured, and product returns are reasonably estimable.
When multiple elements are contained in a single arrangement, the Company allocates revenue between the elements based on their relative selling prices. The Company determines selling price using vendor specific objective evidence, or VSOE, if it is available, third-party evidence, or TPE, if VSOE is not available, and best estimate of selling price, or BESP, if neither VSOE nor TPE are available. The Company generally expects that it will not be able to establish TPE due to the nature of the markets in which it competes, and, as such, it will typically determine selling price using VSOE or if not available, BESP. The objective of BESP is to determine the selling price of a deliverable on a standalone basis. The Company’s determination of BESP involves a weighting of several factors based on the specific facts and circumstances of an arrangement. Specifically, the Company considers the cost to produce the deliverable, the anticipated margin on that deliverable, the selling price and profit margin for similar parts, its ongoing pricing strategy, the value of any enhancements that have been built into the deliverable, and the characteristics of the varying markets in which the deliverable is sold.
Revenue recognition involves judgments, including assessments of expected returns and expected customer relationship periods. The Company analyzes various factors, including a review of specific transactions, its historical returns, average customer relationship periods, customer usage, customer balances, and market and economic conditions. Changes in judgments or estimates on these factors could materially impact the timing and amount of revenues and costs recognized. Should market or economic conditions deteriorate, the Company’s actual return or bad debt experience could exceed its estimate.
Certain product sales are made with a 30-day right of return. Since the Company can reasonably estimate future returns, it recognizes revenues associated with product sales that contain a right of return upon shipment and at the same time it records a sales return reserve, which reduces revenue and accounts receivable by the amount of estimated returns. |
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| Accounts Receivable | Accounts ReceivableTrade accounts receivable are recorded at the invoiced amount and do not bear interest. Accounts receivable on the balance sheet are recorded net of the allowance for doubtful accounts receivable and the reserve for estimated returns. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in its existing accounts receivable. The Company reviews its allowance for doubtful accounts and determines the allowance based on an analysis of customer past payment history, product usage activity, and recent communications between the Company and the customer. Past due balances are reviewed individually for collectibility. Account balances are written-off against the allowance when the Company feels it is probable the receivable will not be recovered. The Company does not have any off-balance sheet credit exposure related to its customers. |
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| Income Taxes | Income TaxesThe Company records income taxes using the asset and liability method. Deferred income tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective income tax bases, and operating loss and tax credit carryforwards. The Company’s financial statements contain certain deferred tax assets, which have arisen primarily as a result of operating losses, as well as other temporary differences between financial and tax accounting. In accordance with the provisions of the Income Taxes topic of the Codification, the Company is required to establish a valuation allowance if the likelihood of realization of the deferred tax assets is reduced based on an evaluation of objective verifiable evidence. Significant management judgment is required in determining the Company’s provision for income taxes, the Company’s deferred tax assets and liabilities and any valuation allowance recorded against those net deferred tax assets. The Company evaluates the weight of all available evidence to determine whether it is more likely than not that some portion or all of the net deferred income tax assets will not be realized. Utilization of the NOL and research and development credit carryforwards may be subject to a substantial annual limitation due to ownership change limitations that have occurred previously or that could occur in the future, as provided by Section 382 of the Internal Revenue Code of 1986, as well as similar state provisions. Ownership changes may limit the amount of NOL and tax credit carryforwards that can be utilized to offset future taxable income and tax, respectively. In general, an ownership change, as defined by Section 382, results from transactions increasing the ownership of certain shareholders or public groups in the stock of a corporation by more than 50 percentage points over a three-year period. If the Company has experienced a change of control, utilization of its NOL or tax credits carryforwards would be subject to an annual limitation under Section 382. Any limitation may result in expiration of a portion of the NOL or research and development credit carryforwards before utilization. Subsequent ownership changes could further impact the limitation in future years. Further, until a study is completed and any limitation known, no amounts are being presented as an uncertain tax position. A full valuation allowance has been provided against the Company’s NOL carryforwards and research and development credit carryforwards and, if an adjustment is required, this adjustment would be offset by an adjustment to the valuation allowance. Thus, there would be no impact to the balance sheet or statement of operations if an adjustment were required. Management performed a two-step evaluation of all tax positions, ensuring that these tax return positions meet the “more likely than not” recognition threshold and can be measured with sufficient precision to determine the benefit recognized in the financial statements. These evaluations provide management with a comprehensive model for how a company should recognize, measure, present, and disclose in its financial statements certain tax positions that the Company has taken or expects to take on income tax returns. |
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| Research and Development | Research and DevelopmentCosts incurred in the research and development of the Company’s products are expensed as incurred. Included in research and development costs are wages, benefits, product design consulting, and other operating costs such as facilities, supplies, and overhead directly related to the Company’s research and development efforts. |
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| Product Warranty Costs | Product Warranty CostsThe Company accrues estimated product warranty costs at the time of sale which are included in cost of sales in the statements of operations. The amount of the accrued warranty liability is based on historical information such as past experience, product failure rates, number of units repaired, and estimated cost of material and labor. The liabilities for product warranty costs of $18,629 and $32,308 at December 31, 2012 and 2011, respectively, are included in accrued expenses in the accompanying balance sheets. |
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| Fixed Assets and Long-Lived Assets | Fixed Assets and Long-Lived AssetsFixed assets are recorded at cost and depreciated using the straight-line method over the estimated useful life of each asset. Expenditures for repairs and maintenance are charged to expense as incurred. On disposal, the related assets and accumulated depreciation are eliminated from the accounts and any resulting gain or loss is included in the Company’s statement of operations. Leasehold improvements are amortized over the shorter of the estimated useful life of the improvement or the remaining term of the lease. The Company periodically evaluates the recoverability of its fixed assets and other long-lived assets whenever events or changes in circumstances indicate that an event of impairment may have occurred. This periodic review may result in an adjustment of estimated depreciable lives or asset impairment. When indicators of impairment are present, the carrying values of the asset are evaluated in relation to the assets operating performance and future undiscounted cash flows of the underlying assets. If the future undiscounted cash flows are less than their book value, an impairment may exist. The impairment is measured as the difference between the book value and the fair value of the underlying asset. Fair values are based on estimates of the market prices and assumptions concerning the amount and timing of estimated future cash flows and assumed discount rates, reflecting varying degrees of perceived risk. |
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| Accounting for Stock-Based Compensation | Accounting for Stock-Based CompensationStock-based compensation cost is generally recognized ratably over the requisite service period. The Company uses the Black-Scholes option pricing model for determining the fair value of its stock options and amortizes its stock-based compensation expense using the straight-line method. The Black-Scholes model requires certain assumptions that involve judgment. Such assumptions are the expected share price volatility, expected life of options, expected annual dividend yield, and risk-free interest rate (See Note 3 – Stock-Based Compensation and Equity). |
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| Net Loss per Common Share | Net Loss per Common Share
Basic net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding during the period. Unvested restricted shares, although legally issued and outstanding, are not considered outstanding for purposes of calculating basic net loss per share. Diluted net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding during the period plus the dilutive effect of outstanding instruments such as options, warrants, and restricted stock. Because the Company has reported a net loss for all periods presented, diluted loss per common share is the same as basic loss per common share, as the effect of utilizing the fully diluted share count would have reduced the net loss per common share. Therefore, in calculating net loss per share amounts, the following shares underlying potentially dilutive common stock equivalents were excluded from the calculation of diluted net income per common share because their effect was anti-dilutive for each of the periods presented:
Warrants outstanding at December 31, 2012 were issued in the public offering completed on February 13, 2012 (see Note 14, Public Offering of Common Stock and Warrants, for further details). Warrants outstanding at December 31, 2011 and 2010 were redeemed in March 2012 in exchange for 23,127 shares of common stock. |
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| Advertising and Promotional Costs | Advertising and Promotional CostsAdvertising and promotional costs are expensed as incurred. Advertising and promotion expense was $242,000, $426,000, and $256,000 in the years ended December 31, 2012, 2011, and 2010, respectively. |
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| Accumulated Other Comprehensive Items | Accumulated Other Comprehensive ItemsFor the years ended December 31, 2012, 2011, and 2010, the Company had no components of other comprehensive income or loss other than net loss. |
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| Segments | SegmentsThe Company operates in one segment for the sale of medical equipment and consumables. Substantially all of the Company’s assets, revenues, and expenses for the years ended December 31, 2012, 2011, and 2010 were located at or derived from operations in the United States. Revenues from sales outside the United States accounted for approximately 7% of total revenues in 2012, 6% of total revenues in 2011, and 2% of total revenues in 2010. |
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| Risks and Uncertainties | Risks and UncertaintiesThe Company is subject to risks common to companies in the medical device industry, including, but not limited to, development by the Company or its competitors of new technological innovations, dependence on key personnel, customers’ reimbursement from third-party payers, protection of proprietary technology, and compliance with regulations of the FDA and other governmental agencies. In late 2011, the Company launched NC-stat DPNCheck, which is a fast, accurate, and quantitative nerve conduction test for the assessment of systemic neuropathies such as DPN. In early 2013 the Company launched SENSUS for the treatment intractable pain, including pain associated with diabetic neuropathy. The future prospects of the Company are closely tied to its success with NC-stat DPNCheck and SENSUS in market acceptance and growth in future revenues. |
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| Recently Issued or Adopted Accounting Pronouncements | Recently Issued or Adopted Accounting PronouncementsIn May 2011, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, No. 2011-04, “Fair Value Measurement (Topic 820) — Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS”, or ASU 2011-04. The amendments in ASU 2011-04 result in common fair value measurement and disclosure requirements in GAAP and International Financial Reporting Standards, or IFRS. Consequently, the amendments change the wording used to describe many of the requirements in GAAP for measuring fair value and for disclosing information about fair value measurements. The Company adopted this new guidance prospectively beginning January 1, 2012. Adoption has not had a material effect on the Company’s financial statements. In June 2011, the FASB issued ASU No. 2011-05, “Comprehensive Income (Topic 220) — Presentation of Comprehensive Income”, or ASU No. 2011-05. ASU No. 2011-05 requires that all nonowner changes in stockholders’ equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements, eliminating the option to present other comprehensive income in the statement of changes in equity. Under either choice, items that are reclassified from other comprehensive income to net income are required to be presented on the face of the financial statements where the components of net income and the components of other comprehensive income are presented. In December 2011, the FASB issued ASU No. 2011-12, “Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05”, which defers the requirement within ASU No. 2011-05 to present on the face of the financial statements the effects of reclassifications out of accumulated other comprehensive income on the components of net income and other comprehensive income for all periods presented. During the deferral, entities should continue to report reclassifications out of accumulated other comprehensive income consistent with the presentation requirements in effect prior to the issuance of ASU No. 2011-05. The Company adopted this new guidance retrospectively beginning January 1, 2012. Adoption has not had a material effect on the Company’s financial statements. |
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Disclosure of accounting policy for advertising costs. For those costs that cannot be capitalized, discloses whether such costs are expensed as incurred or the first period in which the advertising takes place. For direct response advertising costs that are capitalized, describes those assets and the accounting policy used, including a description of the qualifying activity, the types of costs capitalized and the related amortization period. An entity also may disclose its accounting policy for cooperative advertising arrangements. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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Disclosure of accounting policy for cash and cash equivalents, including the policy for determining which items are treated as cash equivalents. Other information that may be disclosed includes (1) the nature of any restrictions on the entity's use of its cash and cash equivalents, (2) whether the entity's cash and cash equivalents are insured or expose the entity to credit risk, (3) the classification of any negative balance accounts (overdrafts), and (4) the carrying basis of cash equivalents (for example, at cost) and whether the carrying amount of cash equivalents approximates fair value. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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Disclosure of accounting policy for computing basic and diluted earnings or loss per share for each class of common stock and participating security. Addresses all significant policy factors, including any antidilutive items that have been excluded from the computation and takes into account stock dividends, splits and reverse splits that occur after the balance sheet date of the latest reporting period but before the issuance of the financial statements. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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Disclosure of accounting policy for fair value measurements, which may include, but is not limited to, how an entity that manages a group of financial assets and liabilities on the basis of its net exposure measures the fair value of those assets and liabilities. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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Disclosure of accounting policy for income taxes, which may include its accounting policies for recognizing and measuring deferred tax assets and liabilities and related valuation allowances, recognizing investment tax credits, operating loss carryforwards, tax credit carryforwards, and other carryforwards, methodologies for determining its effective income tax rate and the characterization of interest and penalties in the financial statements. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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Disclosure of accounting policy for major classes of inventories, bases of stating inventories (for example, lower of cost or market), methods by which amounts are added and removed from inventory classes (for example, FIFO, LIFO, or average cost), loss recognition on impairment of inventories, and situations in which inventories are stated above cost. If inventory is carried at cost, this disclosure includes the nature of the cost elements included in inventory. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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Disclosure of the adoption of new accounting pronouncements that may impact the entity's financial reporting. No definition available.
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