Document And Entity Information (USD $)	12 Months Ended
Document And Entity Information (USD $)	Dec. 31, 2014	Feb. 01, 2015	Jun. 30, 2014
Document Information [Line Items]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	FY
Entity Registrant Name	NeuroMetrix, Inc.
Entity Central Index Key	0001289850
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Smaller Reporting Company
Entity Public Float			$ 12,833,181
Trading Symbol	NURO
Entity Common Stock, Shares Outstanding		8,152,746

Balance Sheets (USD $)	Dec. 31, 2014	Dec. 31, 2013
Current assets:
Cash and cash equivalents	$ 9,221,985	$ 9,195,753
Accounts receivable, net of allowances of $39,966 and $35,895 at December 31, 2014 and 2013, respectively	580,240	390,922
Inventories	679,740	563,036
Prepaid expenses and other current assets	608,160	416,816
Total current assets	11,090,125	10,566,527
Fixed assets, net	311,520	229,313
Other long-term assets	585	923
Total assets	11,402,230	10,796,763
Current liabilities:
Accounts payable	522,871	322,896
Accrued compensation	885,353	386,004
Accrued expenses	1,264,876	870,196
Current portion of deferred revenue	25,048	68,812
Total current liabilities	2,698,148	1,647,908
Deferred revenue, net of current portion	9,635	15,277
Common stock warrants	5,307,332	1,938,603
Total liabilities	8,015,115	3,601,788
Commitments and contingencies (Note 8)
Stockholders' equity
Preferred stock value	0	0
Common stock, $0.0001 par value; 50,000,000 authorized; 8,152,746 and 5,945,581 shares issued and outstanding at December 31, 2014 and 2013, respectively	815	595
Additional paid-in capital	157,764,598	153,806,460
Accumulated deficit	(154,378,302)	(146,612,080)
Total stockholders' equity	3,387,115	7,194,975
Total liabilities and stockholders' equity	11,402,230	10,796,763
Convertible Preferred Stock
Stockholders' equity
Preferred stock value	$ 4	$ 0

Balance Sheets (Parenthetical) (USD $)	Dec. 31, 2014	Dec. 31, 2013
Accounts receivable, net of allowances	$ 39,966	$ 35,895
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, issued	0	0
Preferred stock, outstanding	0	0
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	50,000,000	50,000,000
Common stock, shares issued	8,152,746	5,945,581
Common stock, shares outstanding	8,152,746	5,945,581
Convertible Preferred Stock [Member]
Preferred stock, shares authorized	11,083	4,438
Preferred stock, issued	3,614.357	0
Preferred stock, outstanding	3,614.357	0

Statements of Operations (USD $)	12 Months Ended
Statements of Operations (USD $)	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Revenues	$ 5,512,764	$ 5,278,806	$ 7,575,289
Cost of revenues	2,568,602	2,194,259	3,588,806
Gross profit	2,944,162	3,084,547	3,986,483
Operating expenses:
Research and development	4,075,976	3,438,218	3,545,790
Sales and marketing	2,913,112	2,779,695	5,727,482
General and administrative	4,725,123	4,225,474	4,735,238
Total operating expenses	11,714,211	10,443,387	14,008,510
Loss from operations	(8,770,049)	(7,358,840)	(10,022,027)
Interest income	4,606	5,666	14,474
Warrants offering costs	(50,874)	(376,306)	0
Change in fair value of warrant liability	1,050,095	(289,657)	0
Net loss	$ (7,766,222)	$ (8,019,137)	$ (10,007,553)
Net loss per common share applicable to common stockholders, basic and diluted (See Note 2, Summary of Significant Accounting Policies)	$ (1.54)	$ (3.07)	$ (5.22)
Weighted average number of common shares outstanding, basic and diluted	6,973,977	2,862,094	1,918,723

Statements of Changes in Stockholders' Equity (USD $)	Total	Series A1 - A4 Preferred Stock	Common Stock	Additional Paid-in Capital	Accumulated Deficit
Beginning Balance at Dec. 31, 2011	$ 11,088,521	$ 0	$ 65	$ 139,673,846	$ (128,585,390)
Beginning Balance (in shares) at Dec. 31, 2011		0	650,720
Stock-based compensation expense	319,368	0	0	319,368	0
Issuance of common stock and warrants in public offering (In shares)		0	1,421,735
Issuance of common stock and warrants in public offering	7,377,048	0	142	7,376,906	0
Issuance of common stock on redemption of warrants (in shares)		0	23,127
Issuance of common stock on redemption of warrants	0	0	2	(2)	0
Issuance of common stock under employee stock purchase plan (in shares)		0	8,895
Issuance of common stock under employee stock purchase plan	23,038	0	1	23,037	0
Other issuances of stock from option plan (in shares)		0	36,394
Other issuances of stock from option plan	0	0	4	(4)	0
Net loss	(10,007,553)	0	0	0	(10,007,553)
Ending Balance at Dec. 31, 2012	8,800,422	0	214	147,393,151	(138,592,943)
Ending Balance (in shares) at Dec. 31, 2012		0	2,140,871
Stock-based compensation expense	245,843	0	0	245,843	0
Issuance of common stock and preferred stock under Securities Purchase Agreement (in shares)		4,436.76	248,147
Issuance of common stock and preferred stock under Securities Purchase Agreement	876,786	4	25	876,757	0
Issuance of common stock upon conversion of preferred stock (in shares)		(4,436.76)	2,117,787
Issuance of common stock upon conversion of preferred stock	0	(4)	212	(208)	0
Issuance of common stock upon exercise of warrants (in shares)		0	1,308,611
Issuance of common stock upon exercise of warrants	2,617,222	0	131	2,617,091	0
Reclassification of warrant liability to equity	2,362,259	0	0	2,362,259	0
Issuance of common stock under employee stock purchase plan (in shares)		0	16,094
Issuance of common stock under employee stock purchase plan	26,285	0	2	26,283	0
Common stock issued to settle incentive compensation obligations (in shares)		0	114,071
Common stock issued to settle incentive compensation obligations	285,295	0	11	285,284	0
Net loss	(8,019,137)	0	0	0	(8,019,137)
Ending Balance at Dec. 31, 2013	7,194,975	0	595	153,806,460	(146,612,080)
Ending Balance (in shares) at Dec. 31, 2013		0	5,945,581
Stock-based compensation expense	289,873	0	0	289,873	0
Issuance of common stock and preferred stock under Securities Purchase Agreement (in shares)		6,644.22	664,600
Issuance of common stock and preferred stock under Securities Purchase Agreement	3,539,947	7	66	3,539,874	0
Issuance of common stock upon conversion of preferred stock (in shares)		(3,029.86)	1,485,225
Issuance of common stock upon conversion of preferred stock	0	(3)	149	(146)	0
Issuance of common stock under employee stock purchase plan (in shares)		0	14,725
Issuance of common stock under employee stock purchase plan	24,137	0	1	24,136	0
Common stock issued to settle incentive compensation obligations (in shares)			42,615
Common stock issued to settle incentive compensation obligations	104,405		4	104,401
Net loss	(7,766,222)	0	0	0	(7,766,222)
Ending Balance at Dec. 31, 2014	$ 3,387,115	$ 4	$ 815	$ 157,764,598	$ (154,378,302)
Ending Balance (in shares) at Dec. 31, 2014		3,614.36	8,152,746

Statements of Cash Flows (USD $)	12 Months Ended
Statements of Cash Flows (USD $)	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Cash flows for operating activities:
Net loss	$ (7,766,222)	$ (8,019,137)	$ (10,007,553)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	145,100	150,663	297,097
Stock-based compensation	289,873	245,843	319,368
Inventory charges	0	151,558	234,848
Warrants offering costs	50,874	376,306	0
Change in fair value of warrant liability	(1,050,095)	289,657	0
Changes in operating assets and liabilities:
Accounts receivable	(189,318)	175,529	343,267
Inventories	(116,704)	119,932	694,327
Prepaid expenses and other current assets	(195,454)	52,748	(76,880)
Accounts payable	199,975	65,535	(371,854)
Accrued expenses and compensation	998,434	(54,635)	(530,141)
Deferred revenue, deferred costs, and other	(44,956)	(108,907)	(78,046)
Net cash used in operating activities	(7,678,493)	(6,554,908)	(9,175,567)
Cash flows for investing activities:
Purchases of fixed assets	(227,308)	(86,079)	(107,465)
Release of restricted cash	0	0	229,500
Net cash (used in) provided by investing activities	(227,308)	(86,079)	122,035
Cash flows from financing activities:
Net proceeds from issuance of stock and warrants, including public offering and equity plans	7,932,033	7,155,191	7,482,884
Payments on capital lease	0	(17,929)	(20,320)
Net cash provided by financing activities	7,932,033	7,137,262	7,462,564
Net increase (decrease) in cash and cash equivalents	26,232	496,275	(1,590,968)
Cash and cash equivalents, beginning of year	9,195,753	8,699,478	10,290,446
Cash and cash equivalents, end of year	9,221,985	9,195,753	8,699,478
Supplemental disclosure of cash flow information:
Common stock issued to settle incentive compensation obligation	104,405	285,295	0
Warrants issued under Securities Purchase Agreement initially recorded as a non-current liability	4,418,824	4,011,205	0
Common stock issued in exchange for warrants	0	0	127,885
Warrants Issued In Public Offering	0	0	2,373,267
Warrants liability reclassified to additional paid-in capital upon exercise of warrants	$ 0	$ 2,362,259	$ 0

Description of Business and Basis of Presentation

12 Months Ended

Dec. 31, 2014

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Description of Business and Basis of Presentation

1. Description of Business and Basis of Presentation

NeuroMetrix, Inc., or the Company, a Delaware corporation, was founded in June 1996. The Company develops wearable medical technology and point-of-care tests that help patients and physicians better manage chronic pain, nerve diseases, and sleep disorders. The Company markets the SENSUS^TM Pain Management System, or SENSUS, which is a wearable therapeutic device designed for relief of chronic, intractable pain. The Company also markets DPNCheck®, which is a quantitative nerve conduction test that is used by physicians and health care professionals to evaluate systemic neuropathies such as diabetic peripheral neuropathy, or DPN. The Company’s historical neurodiagnostic business is based on the ADVANCE^TM 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.

On June 26, 2014, the Company entered into a Securities Purchase Agreement, as amended providing for the issuance of (i) 664,600 shares of common stock at a price of $2.04 per share, (ii) 2,621.859 shares of Series A-3 Preferred Stock at a price of $1,000 per share, (iii) 4,022.357 shares of Series A-4 Preferred Stock at a price of $1,000 per share, and (iv) five year warrants to purchase up to 3,921,569 shares of common stock with an exercise price of $2.04 per share (the “2014 Offering”). The 2014 Offering resulted in approximately $8.0 million in gross proceeds, before deducting expenses. Net proceeds from the 2014 Offering were approximately $7.9 million. During the second and third quarter of 2014 all of the Series A-3 Preferred Stock was converted into a total of 1,285,225 shares of common stock. In addition, during the fourth quarter of 2014, a portion of the Series A-4 Preferred Stock was converted into a total of 200,000 shares of common stock. See Note 12, Stockholders’ Equity, for further details.

The accompanying financial statements have been prepared on a basis which assumes that the Company will continue as a going concern and which contemplates the realization of assets and satisfaction of liabilities and commitments in the normal course of business. The Company has suffered recurring losses from operations and negative cash flows from operating activities. The Company’s net losses for 2014, 2013 and 2012 were approximately $7.8 million, $8.0 million and $10.0 million, respectively. At December 31, 2014, the Company has an accumulated deficit of $154.4 million. The Company held cash and cash equivalents of $9.2 million as of December 31, 2014. 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 through the third quarter of 2015. 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 the Company may make in its 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 in the fourth quarter of 2015 and beyond. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. The Company intends 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.

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2014

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, 2014, one customer accounted for 30% of accounts receivable. For the year ended December 31, 2014 one customer accounted for more than 10% of revenue. For the years ended December 31, 2013, and 2012, 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 accounts receivable, accounts payable, and accrued expenses approximate their fair value at December 31, 2014 and 2013 due to the short-term nature of these assets and liabilities. The Company’s cash equivalents and its warrant liability are carried at fair value determined according to the fair value hierarchy described in Note 9.

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 SENSUS and 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 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

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 Taxes

The 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 research and development 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 $1,784 and $4,719 at December 31, 2014 and 2013, 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 Stockholders’ Equity).

Net Loss per Common Share

Basic net loss per common share is computed by dividing net loss applicable to common stockholders 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 income 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 the weighted average number of outstanding instruments such as options, warrants, restricted stock, and preferred 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, shares underlying the following potentially dilutive weighted average number of common stock equivalents were excluded from the calculation of diluted net loss per common share because their effect was anti-dilutive for each of the periods presented:


	Years Ended December 31,
	2014		2013		2012
Options		500,826		161,391		53,999
Warrants		2,436,336		2,055,733		741,546
Unvested restricted stock		4,489		22,387		31,699
Convertible preferred stock		912,570		—		—
Total		3,854,221		2,239,511		827,244

The Beneficial Conversion Feature, or BCF, recorded in both the 2014 Offering and 2013 Offering has been recognized as a deemed dividend attributable to the Preferred Stock and is reflected as an adjustment in the calculation of earnings per share. See Note 12, Stockholders’ Equity, for further details.

Net loss per common share applicable to common stockholders, basic and diluted was determined as follows:

	Years Ended December 31,
	2014			2013			2012
Net loss	$	(7,766,222	)	$	(8,019,137	)	$	(10,007,553	)
Deemed dividend attributable to preferred stockholders in connection with beneficial conversion features		(2,955,668	)		(766,872	)		—
Net loss applicable to common stockholders	$	(10,721,890	)	$	(8,786,009	)	$	(10,007,553	)
Net loss per common share applicable to common stockholders, basic and diluted	$	(1.54	)	$	(3.07	)	$	(5.22	)
Weighted average number of common shares outstanding, basic and diluted		6,973,977			2,862,094			1,918,723

Advertising and Promotional Costs

Advertising and promotional costs are expensed as incurred. Advertising and promotion expense was $481,000, $151,000, and $242,000 in 2014, 2013, and 2012, respectively.

Accumulated Other Comprehensive Items

For 2014, 2013, and 2012, the Company had no components of other comprehensive income or loss other than net loss.

Segments

The Company operates in one segment for the sale of medical equipment and consumables. Substantially all of the Company’s assets, revenues, and expenses for 2014, 2013, and 2012 were located at or derived from operations in the United States. Revenues from sales outside the United States accounted for approximately 19% of total revenues in 2014, 16% of total revenues in 2013, and 7% of total revenues in 2012.

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.

Recently Issued or Adopted Accounting Pronouncements

In August 2014, the FASB issued Accounting Standards Update No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (ASU 2014-15). ASU 2014-15 requires management to assess an entity’s ability to continue as a going concern, and to provide related footnote disclosures in certain circumstances. The standard is effective for public entities for annual and interim periods beginning after December 15, 2016, with early adoption permitted. The Company is evaluating the provisions of ASU 2014-15 and assessing the impact, if any, it may have on financial position, results of operations or cash flows.

In May 2014, the FASB and the International Accounting Standards Board (“IASB”) jointly issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), a comprehensive new revenue recognition standard that will supersede nearly all existing revenue recognition guidance. The objective of ASU 2014-09 is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 will be effective for the first quarter of 2017. An entity can elect to adopt ASU 2014-09 using one of two methods, either full retrospective adoption to each prior reporting period, or recognizing the cumulative effect of adoption at the date of initial application. The Company is in the process of evaluating the new standard and does not know the effect, if any, ASU 2014-09 will have on the Consolidated Financial Statements or which adoption method will be used.

- Definition

The entire disclosure for all significant accounting policies of the reporting entity.

+ References+ Details

Stock-Based Compensation

12 Months Ended

Dec. 31, 2014

Share-based Compensation [Abstract]

Stock-Based Compensation

3. Stock-Based Compensation

During 2004, the Company adopted the 2004 Stock Option and Incentive Plan, as amended and restated in 2006, 2008, 2009, 2012 and 2013. At the Annual Meeting of Stockholders held on May 6, 2014, the stockholders of the Company approved the Company’s Sixth 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 700,000 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, 2014, 1,276,279 shares of common stock were authorized for issuance under the 2004 Stock Plan, of which 212,408 shares had been issued, 561,767 shares were subject to outstanding options at a weighted average exercise price of $6.31 per share and 502,104 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, 2014, 400,000 shares of common stock were authorized for issuance under the 2009 Inducement Plan, of which 200,000 shares had been issued and were outstanding.

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, 2014 and 2013 the Company issued 14,725 and 16,094 shares of its common stock, respectively, under the Amended and Restated 2010 ESPP and the 2010 ESPP, respectively. As of December 31, 2014, there were 124,280 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 of stock options used in the calculation of stock-based compensation expense in the accompanying statement of operations for the years ended December 31, 2014, 2013, and 2012 is calculated using the following assumptions:


	Years Ended December 31,
	2014			2013			2012
Risk-free interest rate		1.4% – 1.8%			1.4% – 1.7%			0.6% – 0.9%
Expected dividend yield		—			—			—
Expected option term		5 years			5 years			5 years
Volatility		70.0	%		70.0	%		70.0	%

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, 2014 is presented below:


	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in years)		Aggregate Intrinsic Value
Outstanding at December 31, 2013		310,146		$	13.20
Granted		537,300			1.82
Exercised		—			—
Forfeited		(84,554	)		10.30
Expired		(1,125	)		249.68
Outstanding at December 31, 2014		761,767			5.15		9.15	$	109,460
Vested or expected to vest at December 31, 2014		691,404			5.49		9.11		100,761
Exercisable at December 31, 2014		146,646			19.10		7.83		21,586

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, 2014, 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, 2014.

The weighted average per share grant-date fair values of options granted during 2014, 2013, and 2012 was $1.06, $1.02, and $2.67, respectively.

The aggregate intrinsic value of options issued or exercised during 2014, 2013, and 2012 was $0.

Total unrecognized stock-based compensation costs related to non-vested stock options was $538,188, which related to 615,953 shares with a per share weighted fair value of $0.87 as of December 31, 2014. This unrecognized cost is expected to be recognized over a weighted average period of approximately 2.3 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 years ended December 31, 2014, 2013 or 2012.

Beginning in 2010, certain employees have been granted restricted stock. There were no restricted stock grants in 2014. During 2013, and 2012, the Company granted 2,000, and 37,167 shares of restricted stock, respectively. The restricted stock vests based on continuing employment. 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, 2014 is presented below:


	Restricted Shares			Weighted Average Grant Date Fair Value
Restricted shares at December 31, 2013		17,476		$	4.62
Granted		—			—
Vested		(16,644	)		(4.75	)
Canceled		—			—
Restricted shares at December 31, 2014		832		$	1.90

During 2014, 2013 and 2012, certain employees, in lieu of paying withholding taxes on the vesting of restricted stock, authorized the withholding of an aggregate of 0, 4,214 and 721 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.

Cash received from option exercises and purchases under the 2004 ESPP and the 2010 ESPP for the years 2014, 2013, and 2012 was $24,000, $26,000, and $23,000, 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 $290,000, $246,000, and $319,000 for 2014, 2013, and 2012, respectively.

- Definition

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.

+ References+ Details

Inventories

12 Months Ended

Dec. 31, 2014

Inventory Disclosure [Abstract]

Inventories

4. Inventories

Inventories consist of the following:


	December 31,
	2014		2013
Purchased components	$	209,426	$	205,320
Finished goods		470,314		357,716
	$	679,740	$	563,036

- Definition

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.

+ References+ Details

Fixed Assets

12 Months Ended

Dec. 31, 2014

Property, Plant and Equipment [Abstract]

Fixed Assets

5. Fixed Assets

Fixed assets consist of the following:


	Estimated Useful Life (Years)			December 31,
	Estimated Useful Life (Years)			2014			2013
Construction in process				$	182,755			—
Computer and laboratory equipment		3			1,782,330		$	1,748,566
Furniture and equipment		3			109,617			249,377
Production equipment		7			745,596			997,297
Leasehold improvements			*		7,268			185,255
					2,827,566			3,180,495
Less – accumulated depreciation					(2,516,046	)		(2,951,182	)
				$	311,520		$	229,313

Lesser of life of lease or estimated useful life.

Depreciation expense was $145,100, $150,663, and $239,168 for 2014, 2013, and 2012, respectively.

- Definition

The entire disclosure for long-lived, physical assets used in the normal conduct of business and not intended for resale. Includes, but is not limited to, accounting policies and methodology, roll forwards, depreciation, depletion and amortization expense, including composite depreciation, accumulated depreciation, depletion and amortization expense, useful lives and method used, income statement disclosures, assets held for sale and public utility disclosures.

+ References+ Details

Accrued Compensation and Expenses

12 Months Ended

Dec. 31, 2014

Payables and Accruals [Abstract]

Accrued Compensation and Expenses

6. Accrued Compensation and Expenses

The following table provides a rollforward of the liability balance for severance obligations which was recorded as research and development and sales and marketing expense in the Company’s Statement of Operations for 2014 and 2013. The balance as of December 31, 2014 which is included as a component of accrued compensation on the balance sheet will be paid by June 30, 2015.


	December 31,
	2014			2013
Balance – beginning	$	110,608		$	—
Accrual for severance		302,758			532,115
Severance payments made		(264,445	)		(421,507	)
Balance – ending	$	148,921		$	110,608

Accrued expenses consist of the following for the years ended December 31, 2014 and 2013:


	December 31,
	2014		2013
Technology fees	$	450,000	$	450,000
Professional services		257,024		263,642
Consulting fees		173,759		—
Clinical study obligations		74,000		51,424
Sales taxes		34,206		32,688
Personnel related obligations		37,761		12,322
Federal excise tax		25,989		24,600
Other		212,137		35,520
	$	1,264,876	$	870,196

Income Taxes

12 Months Ended

Dec. 31, 2014

Income Tax Disclosure [Abstract]

Income Taxes

7. Income Taxes

Current income tax expense (benefit) attributable to continuing operations consists of the following for the years ended December 31, 2014, 2013, and 2012.


	Years Ended December 31,
	2014		2013		2012
Federal		—		—		—
State		—		—		—
Total		—		—		—

The Company’s effective income tax rate differs from the statutory federal income tax rate as follows for the years ended December 31, 2014, 2013, and 2012.

	Years Ended December 31,
	2014			2013			2012
Federal tax provision (benefit) rate		(34.0	)%		(34.0	)%		(34.0	)%
State tax provision, net of federal provision		(7.0	)		(4.8	)		(3.5	)
Permanent items		(3.6	)		3.4			0.8
Federal research and development credits		(1.0	)		(1.7	)		—
Expiration of tax attribute		10.9			—			—
Valuation allowance		34.7			37.1			36.7
Effective income tax rate		—	%		—	%		—	%

The Company’s deferred tax assets consist of the following:

	December 31,
	2014			2013
Deferred tax assets:
Net operating loss carryforwards	$	35,449,695		$	32,253,602
Research and development credit carryforwards		1,855,586			1,735,265
Accrued expenses		657,132			493,075
Stock-based compensation		590,006			565,077
Other		13,506			1,061,212
Total gross deferred tax assets		38,565,925			36,108,231
Valuation allowance		(38,565,925	)		(36,108,231	)
Net deferred tax assets	$	—		$	—

At December 31, 2014, the Company has federal and state net operating loss carryforwards (“NOL”) of $105.4 million and $24 million, respectively, as well as federal and state tax credits of $1.2 million and $1.0 million, respectively, which may be available to reduce future taxable income and the related taxes thereon. This amount includes tax benefits of $3.9 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 2015. 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 $38.6 million and $36.1 million has been established at December 31, 2014 and 2013, 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.

- Definition

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.

+ References+ Details

Commitments and Contingencies

12 Months Ended

Dec. 31, 2014

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

8. Commitments and Contingencies

Operating Leases

In June 2013, 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, 2015. Base rent for the period from January 2014 through March 2015 is $52,917 per month.

The Company plans to relocate its corporate headquarters and operations facilities. In August 2014, the Company entered into a 5-year operating lease agreement with one 5-year extension option for manufacturing and order fulfillment facilities in Woburn, Massachusetts (the “Woburn Lease”). The Woburn Lease commenced December 15, 2014 and has a monthly base rent of $7,350. In September 2014, the Company entered into a 7-year operating lease agreement with one 5-year extension option for its corporate office and product development activities in Waltham, Massachusetts (the “Waltham Lease”). The term of the Waltham Lease commences on February 20, 2015 and includes fixed payment obligations that escalate over the initial lease term. Average monthly base rent under the 7-year lease is approximately $37,792. These payment obligations will be accrued and recognized over the term of occupancy such that rent expense is recognized on a straight-line basis. Under the Waltham Lease, the landlord is responsible for making certain improvements to the leased space at an agreed upon cost to the landlord. If the landlord and the Company mutually agree to make improvements that cost in excess of the agreed upon landlord cost, the landlord will bill that excess cost to the Company as additional rent. This additional rent, if and when incurred, will be included in the net calculation of lease payments, so that rent expense will be recognized on a straight-line basis over the remaining term of occupancy.

Future minimum lease payments under non-cancellable operating leases as of December 31, 2014 are as follows:

2015	$	594,906
2016		515,722
2017		527,693
2018		539,665
2019		544,285
2020		475,408
2021		487,380
2022		81,562
Total minimum lease payments	$	3,766,621

Total recorded rent expense was $638,679, $635,004, and $709,164 for the 2014, 2013, and 2012, respectively. The Company records rent expense on its facility lease on a straight-line basis over the lease term.

Other Commitments

At December 31, 2014, other commitments, comprised of purchase orders, totaled approximately $76,338.

- Definition

The entire disclosure for commitments and contingencies.

+ References+ Details

Fair Value Measurements

12 Months Ended

Dec. 31, 2014

Fair Value Disclosures [Abstract]

Fair Value Measurements

9. Fair Value Measurements

The Fair Value Measurements and Disclosures Topic of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (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.


	December 31, 2014		Fair Value Measurements at December 31, 2014 Using
	December 31, 2014		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Cash equivalents	$	4,107,478	$	4,107,478	$	—	$	—
Total	$	4,107,478	$	4,107,478	$	—	$	—
Liabilities:
Common stock warrants	$	5,307,332	$	—	$	—	$	5,307,332
Total	$	5,307,332	$	—	$	—	$	5,307,332

Due to the lack of market quotes relating to our common stock warrants, the fair value of the common stock warrants was determined at December 31, 2014 using the Black-Scholes model, which is based on Level 3 inputs. As of December 31, 2014, inputs used in the Black-Scholes model are presented below. The assumptions used may change as the underlying sources of these assumptions and market conditions change. Based on the Black-Scholes model, the Company recorded a common stock warrants liability of $5.3 million at December 31, 2014.


	Black-Scholes Inputs to Warrant Liability Valuation at December 31, 2014
	Stock Price		Exercise Price		Expected Volatility			Risk-Free Interest			Expected Term		Dividends
Warrants:
2014 Offering	$	1.95	$	2.04		71.11	%		1.51	%		4yr 6mo		none
2013 Offering	$	1.95	$	2.00		75.71	%		1.24	%		3yr 5mo		none

The following table provides a summary of changes in the fair value of the Company’s Level 3 financial liabilities between the initial warrant issuances in June 2013 and December 31, 2014.


	2014 Offering			2013 Offering			Total
Balance at December 31, 2012	$	—		$	—		$	—
Initial fair value of warrants at issuance in June 2013		—			4,011,205			4,011,205
Change in fair value of warrant liability		—			289,657			289,657
Reclassification of liability to additional paid-in capital upon exercise of warrants		—			(2,362,259	)		(2,362,259	)
Balance at December 31, 2013	$	—		$	1,938,603		$	1,938,603
Initial fair value of warrants at issuance in June 2014		4,418,824			—			4,418,824
Change in fair value of warrant liability		(185,095	)		(865,000	)		(1,050,095	)
Balance at December 31, 2014	$	4,233,729		$	1,073,603		$	5,307,332

	December 31, 2013		Fair Value Measurements at December 31, 2013 Using
	December 31, 2013		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Cash equivalents	$	3,926,600	$	3,926,600	$	—	$	—
Total	$	3,926,600	$	3,926,600	$	—	$	—
Liabilities:
Common stock warrants	$	1,938,603	$	—	$	—	$	1,938,603
Total	$	1,938,603	$	—	$	—	$	1,938,603

Due to the lack of market quotes relating to our common stock warrants, the fair value of the common stock warrants was determined at December 31, 2013 using the Black-Scholes model, which is based on Level 3 inputs. As of December 31, 2013, inputs used in the Black-Scholes model are presented below. The assumptions used may change as the underlying sources of these assumptions and market conditions change. Based on the Black-Scholes model, the Company recorded a common stock warrants liability of $1.9 million at December 31, 2013.


	Black-Scholes Inputs to Warrant Liability Valuation at December 31, 2013
	Stock Price		Exercise Price		Expected Volatility			Risk-Free Interest			Expected Term		Dividends
Warrants:
2013 Offering	$	2.92	$	2.00		67.60	%		1.71	%		4yr 5mo		none

- Definition

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.

+ References+ Details

Retirement Plan

12 Months Ended

Dec. 31, 2014

Compensation and Retirement Disclosure [Abstract]

Retirement Plan

10. Retirement Plan

The Company has 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. In 2014, 2013 and 2012 the Company made no contributions to the plan.

- Definition

The entire disclosure for pension and other postretirement benefits.

+ References+ Details

Credit Facility

12 Months Ended

Dec. 31, 2014

Debt Disclosure [Abstract]

Credit Facility

11. Credit Facility

The Company is party to a Loan and Security Agreement, or the Credit Facility, with a bank. As of December 31, 2014 the Credit Facility permitted the Company to borrow up to $2.5 million on a revolving basis. The Credit Facility was subsequently amended and extended until January 15, 2016. 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 collateralized 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, 2014, the Company was in compliance with these covenants and had not borrowed any funds under the Credit Facility. However, $451,731 of the amount available under the Credit Facility is restricted to support letters of credit issued in favor of the Company’s landlords for its existing premise and the premises leased in September 2014 for its future corporate offices. Consequently, the amount available for borrowing under the Credit Facility as of December 31, 2014 was $2.0 million.

- Definition

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.

+ References+ Details

Stockholders' Equity

12 Months Ended

Dec. 31, 2014

Stockholders' Equity Note [Abstract]

Stockholders' Equity

12. Stockholders’ Equity

Public Offerings of Common Stock and Warrants

During June 2014 and June 2013 the Company entered into securities purchase agreements for two equity offerings that were similar in structure and in terms. The purchase agreement entered into in the 2014 Offering”) provided for the issuance of (i) 664,600 shares of common stock at a price of $2.04 per share, (ii) 2,621.859 shares of Series A-3 Preferred Stock at a price of $1,000 per share, (iii) 4,022.357 shares of Series A-4 Preferred Stock at a price of $1,000 per share, and (iv) five year warrants to purchase up to 3,921,569 shares of common stock with an exercise price of $2.04 per share. The 2014 Offering resulted in approximately $8.0 million in gross proceeds, before deducting expenses. Net proceeds from the 2014 Offering were approximately $7.9 million.

The purchase agreement entered into in June 2013 (the “2013 Offering”) provided for the issuance of (i) 248,147 shares of common stock at a price of $2.095 per share, (ii) 1,066.254 shares of Series A-1 Preferred Stock at a price of $1,000 per share, (iii) 3,370.510 shares of Series A-2 Preferred Stock at a price of $1,000 per share, and (iv) five year warrants to purchase up to 2,365,934 shares of common stock with an exercise price of $2.00 per share. The 2013 Offering resulted in approximately $5.0 million in gross proceeds, before deducting placement agent fees and other expenses. Net proceeds from the 2013 Offering were approximately $4.5 million.

In these equity offerings, each share of Preferred Stock has or had a stated value of $1,000 and is convertible at the option of the holder into the number of shares of common stock determined by dividing the stated value by the conversion price which is subject to adjustment as provided in each Certificate of Designation for the Preferred Stock. The Preferred Stock has no dividend rights, liquidation preference or other preferences over common stock and has no voting rights except as provided in each Certificate of Designation for the Preferred Stock and as required by law.

The terms and conditions of the Preferred Stock were evaluated based on the guidance of the Derivatives and Hedging topic of the Codification to determine if the conversion feature was an embedded derivative requiring bifurcation. It was concluded for both equity offerings that bifurcation was not required because the conversion feature was clearly and closely related to the Preferred Stock. The conversion price at which shares of Preferred Stock were convertible into shares of common stock was determined to be lower than the fair value of common stock at the date of the Purchase Agreement. This “in-the-money” beneficial conversion feature, or BCF, required separate recognition and measurement of its intrinsic value (i.e., the amount of the increase in value that holders of Preferred Stock would realize upon conversion based on the value of the conversion shares on the date of the Purchase Agreement). For both equity offerings, the BCF measurement was limited by the transaction proceeds which had been allocated to the Preferred Stock. Because there was not a stated redemption date for the shares of Preferred Stock, the BCF was recognized as a deemed dividend attributable to the Preferred Stock and reflected as an adjustment in the calculation of earnings per share. The amounts of the BCF totaled $2,955,668 and $766,900, respectively, for the 2014 Offering and the 2013 Offering.

The Series A-4 Preferred Stock outstanding as of December 31, 2014 is convertible into an aggregate of 1,771,744 shares of common stock. During June and July 2014, all of the shares of the Series A-3 Preferred Stock were converted into 1,285,225 shares of common stock and in October 2014 a portion of the Series A-4 Preferred Stock were converted into 200,000 shares of common stock. All of the Series A-1 Preferred Stock and the Series A-2 Preferred Stock issued in the 2013 Offering was converted in 2013 into a total of 2,117,787 shares of common stock.

The Company will continue to revalue unexercised warrants from both the 2014 and 2013 offerings at each reporting period over the life of the warrants using the Black-Scholes model and the changes in the fair value of the warrants will be recognized in the Company’s statement of operations. The warrants issued in connection with the 2013 Offering and the 2014 Offering are within the scope of the Derivatives and Hedging topic of the Codification. This Codification topic requires issuers to classify as liabilities (or assets under certain circumstances) financial instruments which require an issuer to settle in registered shares. As the warrants are required to be settled in registered shares when exercised and since the Company is required to pay cash in the event it does not make timely filings with the SEC, the Company reflected the warrants as a liability in the balance sheet.

The fair value of the warrants issued in connection with the 2014 Offering was estimated to be $4.4 million on the offering date using a Black-Scholes model with the following assumptions: stock price of $2.00, exercise price of $2.04, expected volatility of 67.5%, risk free interest rate of 1.64%, expected term of five years, and no dividends. These warrants remain outstanding. They were revalued at December 31, 2014 in the amount of $4.2 million using the same Black-Scholes model and the liability was reflected in the December 31, 2014 balance sheet.

The 2013 Offering warrants were estimated at a fair value of $4.0 million on the offering date using a Black-Scholes model with the following assumptions: stock price of $2.60, exercise price of $2.00, expected volatility of 73.6%, risk free interest rate of 1.05%, expected term of five years, and no dividends. These warrants were revalued at each subsequent reporting period using the same Black-Scholes model. The liability for the remaining 1,057,323 warrants from the 2013 Offering was reflected in the balance sheet at December 31, 2014 in the amount of $1.1 million.

In 2014 and 2013, the Company issued shares of fully vested common stock in partial settlement of management incentive compensation. The 2014 issuance totaled 42,615 shares with a value of $104,400 reflecting the $2.45 closing price of the Company’s common stock as reported on the NASDAQ Capital Market on February 25, 2014. The 2013 issuance totaled 119,370 shares with a value of $285,300 reflecting the $2.39 NASDAQ Capital Market closing price on June 4, 2013.

As of December 31, 2014, the Company had 50,000,000 shares of common stock authorized and 8,152,746 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, 2014, the Company has reserved authorized shares of common stock for future issuance as follows:


Warrants			5,760,847
Outstanding stock options			761,767
Possible future issuance under inducement plan			200,000
Possible future issuance under stock option plans			502,104
Possible future issuance under employee stock purchase plan			124,280
Total			7,348,998

- Definition

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

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 210

-SubTopic 10

-Section S99

-Paragraph 1

-Subparagraph (SX 210.5-02.29-31)

-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 2: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 505

-SubTopic 10

-Section 50

-Paragraph 6

-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21506-112644

Reference 3: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Regulation S-X (SX)

-Number 210

-Section 02

-Paragraph 29, 30, 31

-Article 5

Reference 4: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 310

-SubTopic 10

-Section S99

-Paragraph 2

-Subparagraph (SAB TOPIC 4.E)

-URI http://asc.fasb.org/extlink&oid=27010918&loc=d3e74512-122707

Reference 5: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 505

-SubTopic 10

-Section S99

-Paragraph 4

-Subparagraph (SAB TOPIC 4.C)

-URI http://asc.fasb.org/extlink&oid=27012166&loc=d3e187143-122770

Reference 6: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Regulation S-X (SX)

-Number 210

-Section 08

-Article 4

Reference 7: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Staff Accounting Bulletin (SAB)

-Number Topic 4

-Section C

Reference 8: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Staff Accounting Bulletin (SAB)

-Number Topic 4

-Section E

Reference 9: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 235

-SubTopic 10

-Section S99

-Paragraph 1

-Subparagraph (SX 210.4-08.(d),(e))

-URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690

Reference 10: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Glossary Preferred Stock

-URI http://asc.fasb.org/extlink&oid=6521494

Reference 11: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Regulation S-X (SX)

-Number 210

-Section 04

-Article 3

Reference 12: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 505

-SubTopic 10

-Section 50

-Paragraph 2

-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21463-112644

Reference 13: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 505

-SubTopic 10

-Section S99

-Paragraph 1

-Subparagraph (SX 210.3-04)

-URI http://asc.fasb.org/extlink&oid=27012166&loc=d3e187085-122770

Reference 14: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 505

-SubTopic 10

-Section 50

-Paragraph 3

-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644

Reference 15: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 505

-SubTopic 10

-Section 50

-Paragraph 11

-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21564-112644

Reference 16: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 505

-SubTopic 10

-Section 50

-Paragraph 5

-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21488-112644

Reference 17: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 505

-SubTopic 10

-Section 50

-Paragraph 4

-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21484-112644

Reference 18: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Regulation S-X (SX)

-Number 210

-Section 08

-Paragraph d

-Article 4

Reference 19: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 505

-SubTopic 30

-Section 50

-Paragraph 2

-URI http://asc.fasb.org/extlink&oid=6405834&loc=d3e23285-112656

+ Details

Management Retention and Incentive Plan

12 Months Ended

Dec. 31, 2014

Compensation and Retirement Disclosure [Abstract]

Management Retention and Incentive Plan

13. Management Retention and Incentive Plan

The Company has adopted the Management Retention and Incentive Plan (the “Plan”), under which a portion of the consideration payable upon a change in control transaction, as defined in the Plan and its amendments, 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.

Schedule II — Valuation and Qualifying Accounts


Description	Balance at Beginning of Period		Charged to costs and expenses			Charged to other accounts		Recoveries/ (Deductions)			Balance at End of Period
December 31, 2014
Allowance for Doubtful Accounts	$	35,000	$	26,042		$	—	$	(23,042	)	$	38,000
Sales Returns Reserve		895		—			49,114		(48,043	)		1,966
Deferred Tax Asset Valuation Allowance		36,108,231		3,280,605			—		(822,911	)⁽²⁾		38,565,925
December 31, 2013
Allowance for Doubtful Accounts	$	130,000	$	111,296		$	—	$	(206,296	)⁽¹⁾	$	35,000
Sales Returns Reserve		21,616		—			38,278		(58,999	)⁽¹⁾		895
Deferred Tax Asset Valuation Allowance		34,347,467		2,976,809			—		(1,216,045	)⁽²⁾		36,108,231
December 31, 2012
Allowance for Doubtful Accounts	$	286,612	$	(12,999	)	$	—	$	(143,613	)⁽¹⁾	$	130,000
Sales Returns Reserve		13,302		—			180,066		(171,752	)⁽¹⁾		21,616
Deferred Tax Asset Valuation Allowance		30,487,085		3,900,388			—		(40,006	)⁽²⁾		34,347,467

(1)	Net write-offs.

(2)	Expiration of Federal and State Net Operating Loss Carryforwards and other reductions.

Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2014

Accounting Policies [Abstract]

Use of Estimates and Assumptions

Cash and Cash Equivalents

Concentrations of Credit Risk

Research and Development

Product Warranty Costs

Fixed Assets and Long-Lived Assets

Accounting for Stock-Based Compensation

Net Loss per Common Share


	Years Ended December 31,
	2014		2013		2012
Options		500,826		161,391		53,999
Warrants		2,436,336		2,055,733		741,546
Unvested restricted stock		4,489		22,387		31,699
Convertible preferred stock		912,570		—		—
Total		3,854,221		2,239,511		827,244

Net loss per common share applicable to common stockholders, basic and diluted was determined as follows: