Document_And_Entity_Informatio
Document And Entity Information | 9 Months Ended |
Sep. 30, 2013 | |
Document Information [Line Items] | ' |
Document Type | 'S-1 |
Amendment Flag | 'false |
Document Period End Date | 30-Sep-13 |
Entity Registrant Name | 'NEPHROS INC |
Entity Central Index Key | '0001196298 |
Entity Filer Category | 'Smaller Reporting Company |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Thousands, unless otherwise specified | |||
Current assets: | ' | ' | ' |
Cash and cash equivalents | $168 | $47 | $1,669 |
Accounts receivable | 104 | 935 | 1,170 |
Inventory, less allowances of $274 at September 30, 2013 and $269 at December 31, 2012 | 291 | 312 | 247 |
Prepaid expenses and other current assets | 37 | 109 | 113 |
Total current assets | 600 | 1,403 | 3,199 |
Property and equipment, net | 9 | 16 | 17 |
Long-term receivable | ' | 0 | 778 |
Other assets, net of accumulated amortization | 1,947 | 2,109 | 0 |
Total assets | 2,556 | 3,528 | 3,994 |
Current liabilities: | ' | ' | ' |
Accounts payable | 1,065 | 1,070 | 284 |
License and supply agreement fee payable | 0 | 1,318 | 0 |
Accrued expenses | 183 | 321 | 195 |
Deferred revenue, current portion | 702 | 707 | 698 |
Total current liabilities | 1,950 | 3,416 | 1,177 |
Long-term portion of deferred revenue | 176 | 707 | 1,396 |
Total liabilities | 2,126 | 4,123 | 2,573 |
Commitments and Contingencies (Note 10) | ' | ' | ' |
Stockholders’ equity (deficit): | ' | ' | ' |
Preferred stock, $.001 par value; 5,000,000 shares authorized at September 30, 2013 and December 31, 2012; no shares issued and outstanding at September 30, 2013 and December 31, 2012 | 0 | 0 | 0 |
Common stock, $.001 par value; 90,000,000 shares authorized at September 30, 2013 and December 31, 2012; 18,034,632 and 11,949,824 shares issued and outstanding at September 30, 2013 and December 31, 2012, respectively. | 18 | 12 | 10 |
Additional paid-in capital | 100,391 | 96,847 | 95,630 |
Accumulated other comprehensive income | 74 | 76 | 49 |
Accumulated deficit | -100,053 | -97,530 | -94,268 |
Total stockholders’ equity (deficit) | 430 | -595 | 1,421 |
Total liabilities and stockholders’ equity (deficit) | $2,556 | $3,528 | $3,994 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Thousands, except Share data, unless otherwise specified | |||
Inventory, allowances | $274 | $269 | $218 |
Preferred stock, par value | $0.00 | $0.00 | $0.00 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 | 0 |
Common stock, par value | $0.00 | $0.00 | $0.00 |
Common stock, shares authorized | 90,000,000 | 90,000,000 | 90,000,000 |
Common stock, shares issued | 18,034,632 | 11,949,824 | 10,501,477 |
Common stock, shares outstanding | 18,034,632 | 11,949,824 | 10,501,477 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 |
Net revenues: | ' | ' | ' | ' | ' | ' |
Product revenues | $242 | $438 | $979 | $930 | $1,127 | $1,849 |
License revenues | 176 | 166 | 535 | 509 | 680 | 365 |
Total net revenues | 418 | 604 | 1,514 | 1,439 | 1,807 | 2,214 |
Cost of goods sold | 189 | 191 | 610 | 448 | 737 | 1,346 |
Gross margin | 229 | 413 | 904 | 991 | 1,070 | 868 |
Operating expenses: | ' | ' | ' | ' | ' | ' |
Research and development | 204 | 208 | 687 | 552 | 632 | 451 |
Depreciation and amortization | 55 | 52 | 169 | 96 | 151 | 91 |
Selling, general and administrative | 578 | 1,006 | 2,497 | 2,564 | 3,620 | 2,636 |
Total operating expenses | 837 | 1,266 | 3,353 | 3,212 | 4,403 | 3,178 |
Loss from operations | -608 | -853 | -2,449 | -2,221 | -3,333 | -2,310 |
Interest income | 0 | 0 | 0 | 2 | 2 | 4 |
Interest expense | -5 | 0 | -52 | 0 | 0 | -12 |
Amortization of debt issuance costs | ' | ' | ' | ' | 0 | -40 |
Gain on sale of equipment | 1 | 0 | 3 | 0 | ' | ' |
Other income (expense) | 1 | 0 | -25 | 55 | 69 | -2 |
Net loss | -611 | -853 | -2,523 | -2,164 | -3,262 | -2,360 |
Other comprehensive income (loss), foreign currency translation adjustments | 0 | 17 | -2 | 7 | 27 | 27 |
Total comprehensive loss | ($611) | ($836) | ($2,525) | ($2,157) | ($3,235) | ($2,333) |
Net loss per common share, basic and diluted | ($0.03) | ($0.07) | ($0.17) | ($0.20) | ($0.29) | ($0.27) |
Weighted average common shares outstanding, basic and diluted | 17,787,356 | 11,560,329 | 14,805,395 | 11,032,743 | 11,223,878 | 8,644,962 |
CONSOLIDATED_STATEMENT_OF_CHAN
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) (USD $) | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Other Comprehensive Income [Member] | Accumulated Deficit [Member] |
Balance at Dec. 31, 2010 | $135,000 | $2,000 | $92,019,000 | $22,000 | ($91,908,000) |
Balance, shares at Dec. 31, 2010 | ' | 2,090,552 | ' | ' | ' |
Comprehensive income: | ' | ' | ' | ' | ' |
Net loss | -2,360,000 | ' | ' | ' | -2,360,000 |
Net unrealized losses on foreign currency translation | 27,000 | ' | ' | 27,000 | ' |
Comprehensive loss | -2,333,000 | ' | ' | ' | ' |
Private placement sale of common stock | 1,204,000 | 3,000 | 1,201,000 | ' | ' |
Private placement sale of common stock, shares | ' | 3,009,711 | ' | ' | ' |
Shareholder rights offering, net | 1,985,000 | 5,000 | 1,980,000 | ' | ' |
Shareholder rights offering, net, shares | ' | 4,964,854 | ' | ' | ' |
Fractional shares not issued, shares | ' | -308 | ' | ' | ' |
Exercise of warrants | 174,000 | ' | 174,000 | ' | ' |
Exercise of warrants, shares | ' | 436,668 | ' | ' | ' |
Noncash stock-based compensation | 256,000 | ' | 256,000 | ' | ' |
Balance at Dec. 31, 2011 | 1,421,000 | 10,000 | 95,630,000 | 49,000 | -94,268,000 |
Balance, shares at Dec. 31, 2011 | ' | 10,501,477 | ' | ' | ' |
Comprehensive income: | ' | ' | ' | ' | ' |
Net loss | -3,262,000 | ' | ' | ' | -3,262,000 |
Net unrealized losses on foreign currency translation | 27,000 | ' | ' | 27,000 | ' |
Comprehensive loss | -3,235,000 | ' | ' | ' | ' |
Exercise of warrants | 503,000 | 2,000 | 501,000 | ' | ' |
Exercise of warrants, shares | ' | 1,448,347 | ' | ' | ' |
Noncash stock-based compensation | 443,000 | ' | 443,000 | ' | ' |
Issuance of stock options related to licensing agreement | 273,000 | ' | 273,000 | ' | ' |
Balance at Dec. 31, 2012 | -595,000 | 12,000 | 96,847,000 | 76,000 | -97,530,000 |
Balance, shares at Dec. 31, 2012 | ' | 11,949,824 | ' | ' | ' |
Comprehensive income: | ' | ' | ' | ' | ' |
Net loss | -2,523,000 | ' | ' | ' | -2,523,000 |
Net unrealized losses on foreign currency translation | -2,000 | ' | ' | -2,000 | ' |
Comprehensive loss | -2,525,000 | ' | ' | ' | ' |
Shareholder rights offering, net | 2,771,000 | 5,000 | 2,766,000 | ' | ' |
Shareholder rights offering, net, shares | ' | 5,000,000 | ' | ' | ' |
Issuance of restricted stock, shares | ' | 293,099 | ' | ' | ' |
Exercise of warrants | 248,000 | 1,000 | 247,000 | ' | ' |
Exercise of warrants, shares | ' | 791,709 | ' | ' | ' |
Noncash stock-based compensation | 517,000 | ' | 517,000 | ' | ' |
Warrant modification | 14,000 | ' | 14,000 | ' | ' |
Balance at Sep. 30, 2013 | $430,000 | $18,000 | $100,391,000 | $74,000 | ($100,053,000) |
Balance, shares at Sep. 30, 2013 | ' | 18,034,632 | ' | ' | ' |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 9 Months Ended | 12 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 |
Operating activities: | ' | ' | ' | ' |
Net loss | ($2,523) | ($2,164) | ($3,262) | ($2,360) |
Adjustments to reconcile net loss to net cash used in operating activities: | ' | ' | ' | ' |
Depreciation of property and equipment | 7 | 6 | 9 | 91 |
Amortization of other assets | 162 | 90 | 142 | 0 |
Noncash stock-based compensation, including stock options and restricted stock | 401 | 335 | 443 | 256 |
Noncash warrant inducement | 14 | 0 | ' | ' |
Inventory reserve | 5 | 0 | 82 | 200 |
Amortization of debt issuance costs | ' | ' | 0 | 40 |
Noncash interest | ' | ' | 0 | 12 |
Gain on disposal of property and equipment | ' | ' | -55 | ' |
Gain/(loss) on foreign currency transactions | 17 | -3 | 7 | 0 |
Gain on sale of equipment | -3 | 0 | ' | ' |
(Increase) decrease in operating assets: | ' | ' | ' | ' |
Accounts receivable | 831 | 852 | 1,006 | -832 |
Inventory | 16 | -47 | -147 | 295 |
Prepaid expenses and other current assets | 71 | 65 | 4 | 76 |
Long-term receivable | ' | ' | 0 | -778 |
Increase (decrease) in operating liabilities: | ' | ' | ' | ' |
Accounts payable and accrued expenses | -45 | 286 | 904 | -357 |
License and supply agreement fee payable | -1,318 | 0 | ' | ' |
Deferred revenue | -535 | -509 | -680 | 2,061 |
Net cash used in operating activities | -2,900 | -1,089 | -1,547 | -1,296 |
Investing activities: | ' | ' | ' | ' |
Purchase of property and equipment | ' | -7 | -8 | 0 |
Purchase of intangible assets | 0 | -659 | -659 | 0 |
Proceeds from sale of equipment | 3 | 0 | 55 | ' |
Net cash provided by (used in) investing activities | 3 | -666 | -612 | 0 |
Financing activities: | ' | ' | ' | ' |
Repayment of debt | ' | ' | 0 | -500 |
Payment of financing costs | ' | ' | 0 | -140 |
Proceeds from exercise of warrants | 248 | 451 | 503 | 174 |
Proceeds from issuance of Senior Secured Note | 1,300 | 0 | ' | ' |
Proceeds from issuance of common stock, net of equity issuance costs of $229 | 2,771 | 0 | 0 | 3,189 |
Payment of Senior Secured Note | -1,300 | 0 | ' | ' |
Net cash provided by financing activities | 3,019 | 451 | 503 | 2,723 |
Effect of exchange rates on cash and cash equivalents | -1 | 1 | 34 | 2 |
Net increase (decrease) in cash | 121 | -1,303 | -1,622 | 1,429 |
Cash, beginning of period | 47 | 1,669 | 1,669 | 240 |
Cash, end of period | 168 | 366 | 47 | 1,669 |
Supplemental disclosure of cash flow information | ' | ' | ' | ' |
Cash paid for taxes | 2 | 18 | 18 | 5 |
Restricted stock issued to settle liability | 116 | 0 | ' | ' |
Payable related to license and supply agreement | 0 | 1,266 | 1,318 | 0 |
Receivable related to license agreement | 0 | 771 | 791 | 0 |
Fair value of stock options granted to Medica | $0 | $273 | $273 | $0 |
CONDENSED_CONSOLIDATED_STATEME2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) (USD $) | 9 Months Ended |
In Thousands, unless otherwise specified | Sep. 30, 2013 |
Payments of Stock Issuance Costs | $229 |
Basis_of_Presentation_and_Goin
Basis of Presentation and Going Concern | 9 Months Ended |
Sep. 30, 2013 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
Basis of Presentation and Going Concern | ' |
1. Basis of Presentation and Going Concern | |
Interim Financial Information | |
The accompanying unaudited condensed consolidated interim financial statements of Nephros, Inc. and its wholly owned subsidiary, Nephros International Limited (collectively, the “Company” or “Nephros”) should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s 2012 Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on March 4, 2013. The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 and Article 10 of Regulation S-X. Accordingly, since they are interim statements, the accompanying condensed consolidated financial statements do not include all of the information and notes required by GAAP for a complete financial statement presentation. The condensed consolidated balance sheet as of December 31, 2012 was derived from the Company’s audited consolidated financial statements but does not include all disclosures required by GAAP. In the opinion of management, the interim condensed consolidated financial statements reflect all adjustments consisting of normal, recurring adjustments that are necessary for a fair presentation of the financial position, results of operations and cash flows for the condensed consolidated interim periods presented. Interim results are not necessarily indicative of results for a full year. Certain reclassifications were made to the prior year’s amounts to conform to the 2013 presentation. All significant intercompany transactions and balances have been eliminated in consolidation. | |
Use of Estimates | |
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities, at the date of the financial statements, and the reported amount of revenues and expenses, during the reporting period. Actual results could differ materially from those estimates. | |
Going Concern and Management’s Response | |
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company’s recurring losses and difficulty in generating sufficient cash flow to meet its obligations and sustain its operations raise substantial doubt about its ability to continue as a going concern. The Company’s condensed consolidated interim financial statements do not include any adjustments that might result from the outcome of this uncertainty. | |
The Company has incurred significant losses in operations in each quarter since inception. For the nine months ended September 30, 2013 and 2012, the Company has incurred net losses of $2,523,000 and $2,164,000, respectively. To become profitable, the Company must increase revenue substantially and achieve and maintain positive gross and operating margins. If the Company is not able to increase revenue and gross and operating margins sufficiently to achieve profitability, its results of operations and financial condition will be materially and adversely affected. | |
On February 4, 2013, the Company issued a senior secured note (“Senior Secured Note”) to Lambda Investors LLC in the principal amount of $1.3 million. The note bore interest at the rate of 12% per annum and was to mature on August 4, 2013, at which time all principal and accrued interest would be due. However, the Company agreed to prepay, without penalty, amounts due under the note, including accrued interest, with the cash proceeds from a rights offering prior to the maturity date. The note was secured by a first priority lien on all of the Company’s property, including its intellectual property. In addition, the Company agreed to extend by one year the expiration date of all of Lambda’s outstanding warrants. | |
On March 4, 2013, the Company filed a Registration Statement on Form S-1 in connection with a $3 million rights offering (the “Rights Offering”). On April 17, 2013, the Company’s Registration Statement on Form S-1 related to the Rights Offering was declared effective by the SEC. | |
The Rights Offering commenced on April 17, 2013 and expired on May 17, 2013. All of the Company’s stockholders and warrant holders were eligible to participate in the Rights Offering on a pro rata basis based upon their proportionate ownership of the Company’s common stock on a fully-diluted basis. Pursuant to the Rights Offering, the Company distributed to holders of its common stock and/or warrants one non-transferable subscription right for each share of common stock, and each share of common stock underlying a warrant, held as of April 4, 2013. Each right entitled the holder to purchase 0.18776 of a share of the Company’s common stock at a subscription price of $0.60 per share. The Company rounded up any fractional shares to the nearest whole share. | |
On May 22, 2013 the Company completed its Rights Offering which resulted in gross proceeds of $3.0 million. The aggregate net proceeds were approximately $1.4 million, after deducting the repayment of the $1.3 million Senior Secured Note, plus $46,800 of accrued interest thereon, issued to Lambda Investors, LLC, the payment of an 8% sourcing/transaction fee ($104,000) in respect of the Senior Secured Note and an aggregate of $100,000 for reimbursement of Lambda Investors’ legal fees incurred in connection with the Senior Secured Note and the Rights Offering. | |
On October 30, 2013, the Company filed a Current Report on Form 8-K announcing the voluntary recalls of its point of use (POU) and DSU in-line ultrafilters used in hospital water treatment applications. As a result, the Company has recalled all production lots of its POU filters, and also requested that customers remove and discard certain labeling/promotional materials for the products. In addition, the Company also requested, for the DSU in-line ultrafilter, that customers remove and discard certain labeling/promotional materials for the product. These voluntary recalls do not affect the Company’s dialysis products. The condensed consolidated interim financial statements for the period ended September 30, 2013 include product revenues and cost of goods sold adjustments of approximately $127,000 and $27,000, respectively, reflecting estimates of the financial impact of product recalled notified to the Company. The Company is unable to predict at this time what additional effect this recall might have on its business, financial condition, future prospects or reputation or whether the Company may be subject to future actions from the U.S. Food and Drug Administration. | |
On November 12, 2013, we issued a senior secured note to Lambda Investors LLC in the principal amount of $1.5 million. The note bears interest at the rate of 12% per annum and matures on May 12, 2014, at which time all principal and accrued interest will be due. We have agreed to prepay amounts due under the note with the cash proceeds from (a) a rights offering, (b) any other equity or debt financing, or (c) the issuance or incurrence of any other indebtedness or the sale of any assets outside the ordinary course of business, in each case prior to the maturity date. If we do not pay principal and interest under the note when due, the interest rate increases to 16% per annum. In addition, we have undertaken to conduct a $2.75 million rights offering of common stock. We expect the offering price will be $0.30 per share. All of our stockholders and warrantholders will be eligible to participate in the offering on a pro rata basis based upon their proportionate ownership of our common stock, calculated on an as converted to common stock, fully-diluted basis. In connection with the note and the rights offering, we have agreed to pay Lambda Investors an 8%, or $120,000, sourcing/transaction fee. In addition, we will pay Lambda Investors’ legal fees and other expenses incurred in connection with the note and rights offering in the amount of $75,000. The warrants held by Lambda Investors have an exercise price of $0.40 per share and certain warrants have full ratchet anti-dilution protection. The full ratchet anti-dilution protection for certain warrants will be triggered in connection with the rights offering as the $0.30 per share price is less than the $0.40 exercise price for these warrants. In connection with the proposed rights offering, the Company agreed to amend the expiration date of the existing warrants held by Lambda Investors from March 10, 2017 to the date which is the five year anniversary of the closing of the rights offering. Subject to the satisfaction of certain conditions, Lambda Investors has advised us that it intends to exercise its basic subscription privilege in full. To the extent that after the closing of the rights offering there still remain unsubscribed shares, Lambda Investors will have the right, at its option, to purchase any or all such remaining unsubscribed shares within ten days of the closing of the rights offering. In connection with the rights offering, we will file a registration statement on Form S-1, as may be amended, with the Securities and Exchange Commission. | |
There can be no assurance that the Company’s future cash flow will be sufficient to meet its obligations and commitments. If the Company is unable to generate sufficient cash flow from operations in the future to service its commitments the Company will be required to adopt alternatives, such as seeking to raise debt or equity capital, curtailing its planned activities or ceasing its operations. There can be no assurance that any such actions could be effected on a timely basis or on satisfactory terms or at all, or that these actions would enable the Company to continue to satisfy its capital requirements. | |
Concentration_of_Credit_Risk
Concentration of Credit Risk | 9 Months Ended | 12 Months Ended | ||||||||
Sep. 30, 2013 | Dec. 31, 2012 | |||||||||
Concentration Of Credit Risk [Abstract] | ' | ' | ||||||||
Concentration of Credit Risk | ' | ' | ||||||||
2. Concentration of Credit Risk | Note 11 — Concentration of Credit Risk | |||||||||
For the nine months ended September 30, 2013 and 2012, the following customers accounted for the following percentages of the Company’s sales, respectively. | Cash and cash equivalents are financial instruments which potentially subject the Company to concentrations of credit risk. The Company deposits its cash in financial institutions. At times, such deposits may be in excess of insured limits. To date, the Company has not experienced any impairment losses on its cash and cash equivalents. | |||||||||
Customer | 2013 | 2012 | Major Customers | |||||||
A | 31 | % | 18 | % | ||||||
B | 36 | % | 36 | % | For the year ended December 31, 2012 and 2011, four customers accounted for 79% and 83%, respectively, of the Company’s sales. In addition, as of December 31, 2012 and 2011, those four customers accounted for 98% and 89%, respectively, of the Company’s accounts receivable. | |||||
C | 16 | % | 15 | % | ||||||
As of September 30, 2013 and December 31, 2012, the following customers accounted for the following percentages of the Company’s accounts receivable, respectively. | ||||||||||
Customer | 2013 | 2012 | ||||||||
A | 57 | % | 4 | % | ||||||
B | 31 | % | 2 | % | ||||||
C | - | % | 85 | % | ||||||
Revenue_Recognition
Revenue Recognition | 9 Months Ended |
Sep. 30, 2013 | |
Revenue Recognition [Abstract] | ' |
Revenue Recognition | ' |
3. Revenue Recognition | |
Revenue is recognized in accordance with Accounting Standards Codification ("ASC") Topic 605. Four basic criteria must be met before revenue can be recognized: (i) persuasive evidence that an arrangement exists; (ii) delivery has occurred or services have been rendered; (iii) the fee is fixed or determinable; and (iv) collectability is reasonably assured. | |
The Company recognizes revenue related to product sales when delivery is confirmed by its external logistics provider and the other criteria of ASC Topic 605 are met. Product revenue is recorded net of returns and allowances. All costs and duties relating to delivery are absorbed by Nephros. Shipments for all products are currently received directly by the Company’s customers. | |
Deferred revenue on the accompanying September 30, 2013 condensed consolidated balance sheet is approximately $878,000 and is related to the License Agreement with Bellco (see Note 10) which is being deferred over the remainder of the expected obligation period. The Company has recognized approximately $1,580,000 of revenue related to this license agreement to date and approximately $535,000 for the nine months ended September 30, 2013. The Company amortizes the deferred revenue monthly over the expected obligation period which ends on December 31, 2014. This will result in expected recognized revenue of approximately $176,000 for the remaining three month period ending December 31, 2013 and $702,000 for the year ended December 31, 2014. | |
StockBased_Compensation
Stock-Based Compensation | 9 Months Ended | 12 Months Ended | ||||||||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | |||||||||||||||||||||
Stock-Based Compensation [Abstract] | ' | ' | ||||||||||||||||||||
Stock-Based Compensation | ' | ' | ||||||||||||||||||||
4. Stock-Based Compensation | Note 8 — Stock Plans, Share-Based Payments and Warrants | |||||||||||||||||||||
Stock Options | Stock Plans | |||||||||||||||||||||
The Company accounts for stock option grants to employees and non-employee directors under the provisions of ASC 718, Stock Compensation. ASC 718 requires the recognition of the fair value of stock-based compensation in the statement of operations. In addition, the Company accounts for stock option grants to consultants under the provisions of ASC 505-50, Equity-Based Payments to Non-Employees, and as such, these stock options are revalued at each reporting period through the vesting period. | In 2000, the Company adopted the Nephros 2000 Equity Incentive Plan. In January 2003, the Board of Directors adopted an amendment and restatement of the plan and renamed it the Amended and Restated Nephros 2000 Equity Incentive Plan (the “2000 Plan”), under which 106,538 shares of common stock had been authorized for issuance upon exercise of options granted. | |||||||||||||||||||||
Gerald J. Kochanski, Chief Financial Officer, Treasurer and Corporate Secretary of Nephros, Inc., resigned effective June 15, 2013. The Company agreed, in consideration of Mr. Kochanski providing certain consulting services to the Company, to extend the exercise period of his outstanding vested stock options from September 15, 2013 to March 14, 2014. This modification did not result in any additional compensation expense. | As of December 31, 2012 and 2011, 2,053 options had been issued to non-employees under the 2000 Plan and were outstanding. Such options expire at various dates through March 15, 2014, all of which are fully vested. As of December 31, 2012 and 2011, 7,230 options had been issued to employees under the 2000 Plan and were outstanding. Such options expire at various dates between January 22, 2013 and March 15, 2014, all of which are fully vested. | |||||||||||||||||||||
The fair value of stock option awards is estimated using a Black-Scholes option pricing model. The fair value of stock-based awards is amortized over the vesting period of the award using the straight-line method. | The Board retired the 2000 Plan in June 2004, and thereafter no additional awards may be granted under the 2000 Plan. | |||||||||||||||||||||
The Company granted 176,875 stock options during the nine months ended September 30, 2013 to employees, non-employees, directors and consultants. These stock options vest over a three-year or four-year period and will be expensed over the applicable vesting period. The fair value of all stock-based awards granted during the nine months ended September 30, 2013, excluding those forfeited below, was approximately $96,000. | In 2004, the Board of Directors adopted and the Company’s stockholders approved the Nephros, Inc. 2004 Stock Incentive Plan, and, in June 2005, the Company’s stockholders approved an amendment to such plan (as amended, the “2004 Plan”), that increased to 40,000 the number of shares of the Company’s common stock that are authorized for issuance by the Company pursuant to grants of awards under the 2004 Plan. In May 2007, the Company’s stockholders approved an amendment to the 2004 Plan that increased to 65,000 the number of shares of the Company’s common stock that are authorized for issuance by the Company pursuant to grants of awards under the 2004 Plan. In June 2008, the Company’s stockholders approved an amendment to the 2004 Plan that increased to 134,849 the number of shares of the Company’s common stock that are authorized for issuance by the Company pursuant to grants of awards under the 2004 Plan. In January 2011, the Company’s stockholders approved an amendment to the 2004 Plan that increased to 1,990,717 the number of shares of the Company’s common stock that are authorized for issuance by the Company pursuant to grants of awards under the 2004 Plan. | |||||||||||||||||||||
As a result of Mr. Kochanski’s resignation, 90,945 stock options that were granted to him were forfeited on June 15, 2013. Of these 90,945 stock options, 25,000 were granted during the nine month period ended September 30, 2013. | As of December 31, 2011, 443,128 options had been issued to employees under the 2004 Plan and were outstanding. The options expire on various dates between April 27, 2015 and March 24, 2021, and vest upon a combination of the following: immediate vesting or straight line vesting of two or four years. At December 31, 2011, there were 1,235,904 shares available for future grants under the 2004 Plan. As of December 31, 2011, 294,753 options had been issued to non-employees under the 2004 Plan and were outstanding. Such options expire at various dates between November 11, 2014 and November 18, 2021, and vest upon a combination of the following: immediate vesting or straight line vesting of two or four years. | |||||||||||||||||||||
The following assumptions were used for options granted for the nine months ended September 30, 2013: | As of December 31, 2012, 1,316,628 options had been issued to employees under the 2004 Plan and were outstanding. The options expire on various dates between April 27, 2015 and April 20, 2022, and vest upon a combination of the following: immediate vesting or straight line vesting of two to four years. At December 31, 2012, there were 19,904 shares available for future grants under the 2004 Plan. As of December 31, 2012, 637,253 options had been issued to non-employees under the 2004 Plan and were outstanding. Such options expire at various dates between November 11, 2014 and April 23, 2022, and vest upon a combination of the following: immediate vesting or straight line vesting of two to four years. | |||||||||||||||||||||
Nine Months | An additional 331,550 options were issued to the Company’s CEO per terms of his employment agreement. | |||||||||||||||||||||
Ended | ||||||||||||||||||||||
September 30, | Share-Based Payment | |||||||||||||||||||||
2013 | ||||||||||||||||||||||
Risk-free interest rate | 1.09-1.22 | % | Prior to the Company’s initial public offering, options were granted to employees, non-employees and non-employee directors at exercise prices which were lower than the fair market value of the Company’s stock on the date of grant. After the date of the Company’s initial public offering, stock options are granted to employees, non-employees and non-employee directors at exercise prices equal to the fair market value of the Company’s stock on the date of grant. Stock options granted have a life of 10 years. | |||||||||||||||||||
Volatility | 127.46 - 131.79 | % | ||||||||||||||||||||
Expected dividend yield | 0 | % | Unvested options as of December 31, 2012 currently vest upon a combination of the following: immediate vesting or straight line vesting of two or four years. | |||||||||||||||||||
Expected term | 5.75 - 6.25 yrs | |||||||||||||||||||||
Expense is recognized, net of expected forfeitures, over the vesting period of the options. For options that vest upon the achievement of certain milestones, expense is recognized when it is probable that the condition will be met. Stock based compensation expense recognized for the years ended December 31, 2012 and 2011 was approximately $443,000 or less than $0.04 per share and approximately $256,000 or less than $0.03 per share, respectively. | ||||||||||||||||||||||
The Company calculates expected volatility for a stock-based grant based on historic monthly stock price observations of common stock during the period immediately preceding the grant that is equal in length to the expected term of the grant. The Company also estimates future forfeitures, using historical employee behaviors related to forfeitures, as a part of the estimate of expense as of the grant date. With respect to grants of options, the risk free rate of interest is based on the U.S. Treasury rates appropriate for the expected term of the grant. | ||||||||||||||||||||||
The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model with the below assumptions related to risk-free interest rates, expected dividend yield, expected lives and expected stock price volatility. | ||||||||||||||||||||||
Stock-based compensation expense was approximately $300,000 and $335,000 for the nine months ended September 30, 2013 and 2012, respectively. For the nine months ended September 30, 2013, approximately $275,000 and approximately $25,000 are included in Selling, General and Administrative expenses and Research and Development expenses, respectively, on the accompanying condensed consolidated statement of operations. For the nine months ended September 30, 2012, approximately $314,000 and approximately $21,000 are included in Selling, General and Administrative expenses and Research and Development expenses, respectively, on the accompanying condensed consolidated statement of operations. | ||||||||||||||||||||||
Option Pricing Assumptions | ||||||||||||||||||||||
There was no tax benefit related to expense recognized in the nine months ended September 30, 2013 and 2012, as the Company is in a net operating loss position. As of September 30, 2013, there was approximately $832,000 of total unrecognized compensation cost related to unvested share-based compensation awards granted under the equity compensation plans which will be amortized over the weighted average remaining requisite service period of 2.5 years. The unrecognized compensation disclosed above does not include the effect of future grants of equity compensation, if any. Of the total $832,000, the Company expects to recognize approximately 11% in the remaining interim periods of 2013, approximately 40% in 2014, approximately 38% in 2015, approximately 10% in 2016 and approximately 1% in 2017. | Grant Year | 2012 | 2011 | |||||||||||||||||||
Stock Price Volatility | 123.48 – 128.54 | % | 121.96 – 130.06 | % | ||||||||||||||||||
Restricted Stock | Risk-Free Interest Rates | 0.93 – 1.32 | % | 1.08 – 2.42 | % | |||||||||||||||||
Expected Life (in years) | 5.75 – 6.25 | 5.00 – 5.50 | ||||||||||||||||||||
On August 20, 2013, the Company issued 28,329 shares of restricted stock as compensation for the services of non-employee directors. The grant date fair value of the restricted stock award was approximately $43,000 and was based on the fair value of the common stock on the date of grant, and compensation expense is recognized ratably over a six month period. | Expected Dividend Yield | 0 | % | 0 | % | |||||||||||||||||
For the nine months ended September 30, 2013, including those restricted shares issued on August 20, 2013, 339,028 shares of restricted stock were granted to certain employees and non-employee directors. As a result of Mr. Kochanski’s resignation, 45,929 of those shares of were forfeited on June 15, 2013. | Expected volatility is based on historical volatility of the Company’s common stock at the time of grant. The risk-free interest rate is based on the U.S. Treasury yields in effect at the time of grant for periods corresponding with the expected life of the options. For the expected life, the Company is using the simplified method as described in the SEC Staff Accounting Bulletin 107. This method assumes that stock option grants will be exercised based on the average of the vesting periods and the option’s life. | |||||||||||||||||||||
Total stock-based compensation expense for the restricted stock grant was approximately $217,000 for the nine months ended September 30, 2013. For the nine months ended September 30, 2013, approximately $53,000 and approximately $48,000 are included in Selling, General and Administrative expenses and Research and Development expenses, respectively, on the accompanying condensed consolidated statement of operations. The remaining expense related to the restricted stock awards issued to non-employee directors of approximately $116,000 was recorded to offset accrued director’s fees that were incurred prior to September 30, 2013. Any additional stock-based compensation related to non-employee directors will be recorded to stock-based compensation expense. As of September 30, 2013, there was approximately $14,000 of unrecognized compensation expense related to the restricted stock awards, which is expected to be recognized over the next five months. | The total fair value of options vested during the fiscal year ended December 31, 2012 was approximately $506,000. The total fair value of options vested during the fiscal year ended December 31, 2011 was approximately $249,000. | |||||||||||||||||||||
The following table summarizes information about stock options outstanding and exercisable at December 31, 2012: | ||||||||||||||||||||||
Options Outstanding | Options Exercisable | |||||||||||||||||||||
Range of Exercise Price | Number Outstanding as | Weighted Average Remaining | Weighted Average | Number Exercisable as of | Weighted Average | |||||||||||||||||
of December 31, 2012 | Contractual Life in Years | Exercise Price | December 31, 2012 | Exercise Price | ||||||||||||||||||
$0.41 – $2.60 | 2,251,700 | 9.01 | $ | 0.94 | 736,635 | $ | 0.77 | |||||||||||||||
$15.00 – $29.80 | 28,853 | 5.63 | $ | 17.74 | 27,240 | $ | 17.78 | |||||||||||||||
$34.20 – $96.00 | 14,161 | 1.36 | $ | 52.99 | 14,160 | $ | 52.99 | |||||||||||||||
Total Outstanding | 2,294,714 | $ | 1.46 | 778,035 | $ | 2.26 | ||||||||||||||||
The number of new options granted in 2012 and 2011 is 1,547,550 and 702,500 respectively. The weighted-average fair value of options granted in 2012 and 2011 is $1.03 and $0.45, respectively. | ||||||||||||||||||||||
The following table summarizes the option activity for the years ended December 31, 2012 and 2011: | ||||||||||||||||||||||
Shares | Weighted Average Exercise Price | |||||||||||||||||||||
Outstanding at December 31, 2011 | 747,164 | $ | 2.14 | |||||||||||||||||||
Options granted | 1,547,550 | 1.13 | ||||||||||||||||||||
Options exercised | — | — | ||||||||||||||||||||
Options forfeited | — | — | ||||||||||||||||||||
Outstanding at December 31, 2012 | 2,294,714 | 1.46 | ||||||||||||||||||||
Expected to vest at December 31, 2012 | 778,035 | $ | 2.26 | |||||||||||||||||||
Exercisable at December 31, 2012 | 2,206,747 | $ | 1.47 | |||||||||||||||||||
The aggregate intrinsic value of stock options outstanding at December 31, 2012 is $793,000 and the stock options vested or expected to vest is approximately $768,000. A stock option has intrinsic value, at any given time, if and to the extent that the exercise price of such stock option is less than the market price of the underlying common stock at such time. The weighted-average remaining contractual life of options vested or expected to vest is 8.9 years. | ||||||||||||||||||||||
The aggregate intrinsic value of stock options outstanding at December 31, 2011 is $126,000 and the stock options vested or expected to vest is approximately $121,000. A stock option has intrinsic value, at any given time, if and to the extent that the exercise price of such stock option is less than the market price of the underlying common stock at such time. The weighted-average remaining contractual life of options vested or expected to vest is 9.1 years. | ||||||||||||||||||||||
As of December 31, 2012, the total remaining unrecognized compensation cost related to non-vested stock options amounted to $1,074,000 and will be amortized over the weighted-average remaining requisite service period of 3.0 years. | ||||||||||||||||||||||
Warrants | ||||||||||||||||||||||
The following table summarizes certain terms of all of the Company’s outstanding warrants at December 31, 2012 and 2011: | ||||||||||||||||||||||
Total Outstanding Warrants at December 31, 2012 | ||||||||||||||||||||||
Total Common Shares Issuable | ||||||||||||||||||||||
Title of Warrant | Date Issued | Expiry Date | Exercise Price | 2012 | 2011 | |||||||||||||||||
Class D Warrants – Lambda | 11/14/07 | 3/10/16 | $ | 0.4 | 8,806,575 | 8,806,575 | ||||||||||||||||
Class D Warrants – Other | 11/14/07 | 11/14/12 | $ | 0.4 | — | 447,197 | ||||||||||||||||
Placement Agent Warrants | 11/14/07 | 11/14/12 | $ | 0.4 | — | 228,887 | ||||||||||||||||
July 2009 Warrants | 7/24/09 | 7/24/14 | $ | 22.4 | 33,629 | 33,629 | ||||||||||||||||
Shareholder Rights Offering Warrants | 3/10/11 | 3/10/16 | $ | 0.4 | 3,057,190 | 4,153,503 | ||||||||||||||||
March 2011 Lambda Warrants | 3/10/11 | 3/10/16 | $ | 0.4 | 2,782,577 | 2,782,577 | ||||||||||||||||
14,679,971 | 16,452,368 | |||||||||||||||||||||
The weighted average exercise price of the outstanding warrants was $0.45 for December 31, 2012 and 2011. | ||||||||||||||||||||||
Class D Warrants | ||||||||||||||||||||||
The Company issued Class D Warrants in 2007 to purchase an aggregate of 455,628 shares of the Company’s common stock to the Investors upon conversion of the purchased notes. The Company recorded the issuance of the Class D Warrants at their approximate fair market value of $3,763,000. The value of the Class D Warrants was computed using the Black-Scholes option pricing model. Our largest stockholder, Lambda Investors LLC, received Class D Warrants in 2007 to purchase 359,541 shares of the Company’s common stock and Other Investors received Class D Warrants in 2007 to purchase 96,087 shares of the Company’s common stock. A Class D warrant holder elected to exercise 86,150 of the 455,628 Class D Warrants outstanding as of June 2009 pursuant to the cashless exercise provision of the warrant which is described below. See Issuance of Common Stock due to Class D Warrants’ Cashless Exercise Provision. | ||||||||||||||||||||||
Effect of Shareholders’ Rights Offering in 2011 | ||||||||||||||||||||||
The Class D Warrants have full-ratchet anti-dilution provisions that were activated by the Shareholders’ Rights Offering in 2011. Following the closing of the rights offering in 2011, and after giving effect to the anti-dilution provisions, Lambda Investors agreed to surrender for cancellation warrants to purchase 7,372,348 shares of our common stock. In addition, following the closing of the rights offering, Lambda Investors’ existing warrants to purchase 8,806,575 shares that remain outstanding were amended to expire at the same time as the warrants issued in the rights offering, which is March 10, 2016. | ||||||||||||||||||||||
The following table summarizes the Class D outstanding warrants at December 31, 2012 and 2011: | ||||||||||||||||||||||
Lambda Investors | Other Investors | Total Shares | ||||||||||||||||||||
to be issued | ||||||||||||||||||||||
As of December 31, 2010 | 359,541 | 9,937 | 369,478 | |||||||||||||||||||
Anti-dilution ratcheting provision | 15,819,382 | 437,260 | 16,256,642 | |||||||||||||||||||
Surrendered-rights’ offering | -7,372,348 | 0 | -7,372,348 | |||||||||||||||||||
As of December 31, 2011 | 8,806,575 | 447,197 | 9,253,772 | |||||||||||||||||||
Exercised in 2012 | — | -352,034 | -352,034 | |||||||||||||||||||
Expired in 2012 | — | -95,163 | -95,163 | |||||||||||||||||||
As of December 31, 2012 | 8,806,575 | — | 8,806,575 | |||||||||||||||||||
Issuance of Common Stock due to Class D Warrants’ Cashless Exercise Provision | ||||||||||||||||||||||
The Series D warrants have a cashless exercise provision which states, “If, and only if, at the time of exercise pursuant to this Section 1 there is no effective registration statement registering, or no current prospectus available for, the sale of the Warrant Shares to the Holder or the resale of the Warrant Shares by the Holder and the VWAP (as defined below) is greater than the Per Share Exercise Price at the time of exercise, then this Warrant may also be exercised at such time and with respect to such exercise by means of a “cashless exercise” in which the Holder shall be entitled to receive a certificate for the number of Warrant Shares equal to the quotient obtained by dividing (i) the result of (x) the difference of (A) minus (B), multiplied by (y) (C), by (ii) (A), where: | ||||||||||||||||||||||
(A) =he VWAP (as defined below) on the Trading Day (as defined below) immediately preceding the date of such election; | ||||||||||||||||||||||
(B) =he Per Share Exercise Price of this Warrant, as adjusted; and | ||||||||||||||||||||||
(C) =he number of Warrant Shares issuable upon exercise of this Warrant in accordance with the terms of this Warrant by means of a cash exercise rather than a cashless exercise. | ||||||||||||||||||||||
“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted for trading on the New York Stock Exchange, American Stock Exchange, NASDAQ Capital Market, NASDAQ Global Market, NASDAQ Global Select Market or the OTC Bulletin Board, or any successor to any of the foregoing (a “Trading Market”), the daily volume weighted average price of the Common Stock on the Trading Market on which the Common Stock is then listed or quoted for trading as reported by Bloomberg L.P. for such date if such date is a date on which the Trading Market on which the Common Stock is then listed or quoted for trading (a “Trading Day”) or the nearest preceding Trading Date (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time); (b) if the Common Stock is not then listed or quoted for trading on a Trading Market and if prices for the Common Stock are then reported in the “Pink Sheets” published by Pink Sheets, LLC (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported; or (c) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Holder and reasonably acceptable to the Company.” | ||||||||||||||||||||||
The Company did not have an effective registration statement or a current prospectus available for the sale of the warrant shares to the holder or the resale of the warrant shares by the holder and the VWAP (as defined above) was greater than the per share exercise price from June 8, 2009 through August 26, 2009. | ||||||||||||||||||||||
A Class D warrant holder elected to exercise 86,150 of the 455,628 Class D Warrants outstanding as of June 2009 pursuant to the cashless exercise provision of the warrant. As a result, 54,561 shares of common stock were issued to this Class D warrant holder in August 2009. | ||||||||||||||||||||||
Class D warrant holders elected to exercise 352,034 of the outstanding Class D Warrants in 2012. As a result, 190,326 were exercised pursuant to the cashless exercise provision of the warrant. In addition, 161,708 warrants were exercised resulting in proceeds of approximately $65,000. | ||||||||||||||||||||||
The number of shares outstanding in the December 31, 2012 balance sheet and the number of shares outstanding used in the earnings per share calculation for the twelve months ended December 31, 2012 include those shares outstanding as a result of the exercises discussed above. | ||||||||||||||||||||||
Placement Agent Warrants | ||||||||||||||||||||||
The Company issued placement agent warrants in 2007 to purchase an aggregate of 87,819 shares of the Company’s common stock to the Company’s placement agents in connection with their roles in the Company’s fall 2007 financing (“the 2007 Financing”). The Company recorded the issuance of the placement agent warrants at their approximate fair market value of $1,047,000. The value of the placement agent warrants was computed using the Black-Scholes option pricing model. | ||||||||||||||||||||||
Placement Agents elected to exercise 81,335 of the 87,819 Placement Agent Warrants outstanding in June 2009. All elected the Cashless Exercise provision of their warrants. As a result, 36,913 shares of common stock were issued to the Placement Agents in June 2009. | ||||||||||||||||||||||
Effect of Shareholders’ Rights Offering in 2011 | ||||||||||||||||||||||
The Placement Agent Warrants have full-ratchet anti-dilution provisions that were activated by the shareholders’ rights offering in 2011. The outstanding Placement Agent expired on November 12, 2012. | ||||||||||||||||||||||
Issuance of Common Stock due to Placement Agent Warrants’ Cashless Exercise Provision | ||||||||||||||||||||||
National Securities Corporation (“NSC”) and Dinosaur Securities, LLC (“Dinosaur” and together with NSC, the “Placement Agents”) acted as co-placement agents in connection with the 2007 Financing pursuant to an Engagement Letter, dated June 6, 2007 and a Placement Agent Agreement dated September 18, 2007. The Placement Agents received (i) an aggregate cash fee equal to 8% of the face amount of the notes purchased in the 2007 Financing (“the Purchased Notes”) and paid 6.25% to NSC and 1.75% to Dinosaur, and (ii) warrants (“Placement Agent Warrant”) with a term of five years from the date of issuance to purchase 10% of the aggregate number of shares of the Company’s common stock issued upon conversion of the Purchased Notes with an exercise price per share of the Company’s common stock equal to $14.10. The Company issued Placement Agents Warrants to purchase an aggregate of 87,819 shares of the Company’s common stock to the Placement Agent in November 2007 in connection with their roles in the 2007 Financing. | ||||||||||||||||||||||
The Placement Agent Warrants have a cashless exercise provision identical to that in the Series D Warrants. | ||||||||||||||||||||||
The Company did not have an effective registration statement or a current prospectus available for the sale of the warrant shares to the holders or the resale of the warrant shares by the holders and the VWAP (as defined above) was greater than the per share exercise price from June 8 through August 26, 2009. Several Placement Agents elected to exercise the cashless exercise provision of their warrants. | ||||||||||||||||||||||
July 2009 Private Placement | ||||||||||||||||||||||
On July 24, 2009, the Company raised gross proceeds of $1,251,000 through the private placement to eight accredited investors of an aggregate of 67,258 shares of its common stock and warrants to purchase an aggregate of 33,629 shares of its common stock, representing 50% of the shares of common stock purchased by each investor. The Company sold the shares to investors at a price per share equal to $18.60. The warrants have an exercise price of $22.40, are exercisable immediately and will terminate on July 24, 2014. The warrants have no anti-dilution ratcheting provision therefore; they did not increase as a result of the 2011 Shareholders’ Rights Offering. | ||||||||||||||||||||||
2011 Shareholders’ Rights Offering | ||||||||||||||||||||||
On March 10, 2011, Nephros announced the completion of its rights offering and private placement that together resulted in gross proceeds of approximately $3.2 million and net proceeds of approximately $2.3 million to Nephros after deducting the payments to Lambda Investors LLC and after estimated expenses of the rights offering. In the rights offering, Nephros sold 4,964,854 units at $0.40 per unit for gross proceeds of approximately $2.0 million, resulting in the issuance of 4,964,854 shares of common stock and warrants to purchase an aggregate of 4,590,171 shares of common stock. The warrants expire on March 10, 2016 and have an exercise price of $0.40 per share. | ||||||||||||||||||||||
On March 10, 2011, based on the completion of the rights offering, Lambda Investors LLC, the Company’s largest stockholder, purchased in a private placement 3,009,711 units at a per unit purchase price of $0.40 for aggregate gross proceeds of approximately $1.2 million, pursuant to a purchase agreement between Nephros and Lambda Investors LLC. Each unit consisted of one share of common stock and a warrant to purchase 0.924532845 shares of common stock at an exercise price of $0.40 per share for a period of five years following the issue date of the warrant, resulting in Lambda Investors LLC acquiring 3,009,711 shares of common stock and a warrant to purchase 2,782,577 shares of common stock. Net proceeds, after deducting the aggregate of $666,650 in payments due Lambda Investors LLC were approximately $537,000. | ||||||||||||||||||||||
On January 10, 2011, the Company’s stockholders voted to implement a 1:20 reverse stock split of the Company’s common stock. The reverse split became effective on March 11, 2011. All of the share and per share amounts discussed in these financial statements on Form 10-K have been adjusted to reflect the effect of this reverse split. | ||||||||||||||||||||||
Warrants exercised during 2012 and 2011 | ||||||||||||||||||||||
Shareholders exercised 1,096,313 for proceeds of approximately $438,000 and 436,668 warrants for proceeds of approximately $174,000 for the years ended December 31, 2012 and 2011, respectively. | ||||||||||||||||||||||
Warrants
Warrants | 9 Months Ended |
Sep. 30, 2013 | |
Warrants [Abstract] | ' |
Warrants | ' |
5. Warrants | |
In connection with the Rights Offering, the Company temporarily reduced the exercise price for its warrants issued in March 2011 from $0.40 per share to $0.30 per share. The Company determined that this inducement was a modification of equity instruments and, therefore, an incremental fair value of the inducement was determined using the Black-Scholes option pricing model. | |
During the period that the Rights Offering was open, warrant holders exercised 14,879,708 warrants, issued in March 2011, for 687,793 shares of common stock, resulting in gross proceeds of approximately $206,000 to the Company. The incremental fair value of the inducement recorded in the nine months ended September 30, 2013 was approximately $14,000. | |
Additionally, during the nine months ended September 30, 2013, 2,248,222 warrants were exercised outside the period that the Rights Offering was open, resulting in proceeds of approximately $42,000 and the issuance of 103,916 shares of the Company’s common stock. | |
Comprehensive_Income_Loss
Comprehensive Income (Loss) | 9 Months Ended |
Sep. 30, 2013 | |
Comprehensive Income (Loss) [Abstract] | ' |
Comprehensive Income (Loss) | ' |
6. Comprehensive Income (Loss) | |
Comprehensive income (loss), as defined in ASC 220, is the total of net income (loss) and all other non-owner changes in equity (or other comprehensive income (loss)) such as foreign currency translation adjustments. For the nine months ended September 30, 2013 and 2012, the comprehensive loss was approximately $2,525,000 and $2,157,000, respectively. | |
Loss_per_Common_Share
Loss per Common Share | 9 Months Ended | |||||||
Sep. 30, 2013 | ||||||||
Loss Per Common Share [Abstract] | ' | |||||||
Loss per Common Share | ' | |||||||
7. Loss per Common Share | ||||||||
In accordance with ASC 260-10, net loss per common share amounts (“basic EPS”) are computed by dividing net loss attributable to common stockholders by the weighted-average number of common shares outstanding and excluding any potential dilution. Net loss per common share amounts assuming dilution (“diluted EPS”) is generally computed by reflecting potential dilution from conversion of convertible securities, the exercise of stock options and warrants and any outstanding shares of unvested restricted stock. | ||||||||
The following potentially dilutive securities have been excluded from the computations of diluted weighted-average shares outstanding as they would be anti-dilutive: | ||||||||
Nine Months Ended | ||||||||
September 30, | ||||||||
2013 | 2012 | |||||||
Shares underlying warrants outstanding | 13,888,262 | 15,325,943 | ||||||
Shares underlying options outstanding | 2,380,644 | 2,294,714 | ||||||
Unvested restricted stock | 150,423 | - | ||||||
Recent_Accounting_Pronouncemen
Recent Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2013 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | ' |
Recent Accounting Pronouncements | ' |
8. Recent Accounting Pronouncements | |
There are no recent accounting pronouncements that are expected to have an effect on the Company’s condensed consolidated interim financial statements. | |
Inventory_net
Inventory, net | 9 Months Ended | 12 Months Ended | ||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | |||||||||||||||
Inventory Disclosure [Abstract] | ' | ' | ||||||||||||||
Inventory, net | ' | ' | ||||||||||||||
9. Inventory, net | Note 3 — Inventory | |||||||||||||||
Inventory is stated at the lower of cost or market using the first-in first-out method and consists entirely of finished goods. The Company’s inventory as of September 30, 2013 and December 31, 2012 was approximately as follows: | The Company’s inventory components as of December 31, 2012 and 2011 were as follows: | |||||||||||||||
Unaudited | Audited | December 31, | ||||||||||||||
September 30, | December 31, | 2012 | 2011 | |||||||||||||
2013 | 2012 | Total Gross Inventory, Finished Goods | $ | 581,000 | $ | 465,000 | ||||||||||
Total Gross Inventory, Finished Goods | $ | 565,000 | $ | 581,000 | Less: Inventory reserve | -269,000 | -218,000 | |||||||||
Less: Inventory reserve | -274,000 | -269,000 | Total Inventory | $ | 312,000 | $ | 247,000 | |||||||||
Total Inventory | $ | 291,000 | $ | 312,000 | ||||||||||||
Commitments_and_Contingencies
Commitments and Contingencies | 9 Months Ended | 12 Months Ended | ||||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | |||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | ' | ' | ||||||||||||||||
Commitments and Contingencies | ' | ' | ||||||||||||||||
10. Commitments and Contingencies | Note 10 — Commitments and Contingencies | |||||||||||||||||
Manufacturing and Suppliers | Manufacturing and Suppliers | |||||||||||||||||
The Company has not and does not intend in the near future, to manufacture any of its products and components. With regard to the OLpūr MD190 and MD220, on June 27, 2011, the Company entered into a License Agreement, effective July 1, 2011, with Bellco S.r.l., an Italy-based supplier of hemodialysis and intensive care products, for the manufacturing, marketing and sale of our patented mid-dilution dialysis filters (MD 190, MD 220), referred to herein as the Products. Under the agreement, Nephros granted Bellco a license to manufacture, market and sell the Products under its own name, label and CE mark in Italy, France, Belgium, Spain and Canada on an exclusive basis, and to do the same on a non-exclusive basis in the United Kingdom and Greece and, upon the Company’s written approval, other European countries where the Company does not sell the Products as well as non-European countries (referred to as the “Territory”). | ||||||||||||||||||
The Company has not and does not intend in the near future, to manufacture any of its products and components. With regard to the OLpur MD190 and MD220, on June 27, 2011, the Company entered into a license agreement, effective July 1, 2011, with Bellco S.r.l., an Italy-based supplier of hemodialysis and intensive care products, for the manufacturing, marketing and sale of our patented mid-dilution dialysis filters (MD 190, MD 220), referred to herein as the Products. Under the agreement, Nephros granted Bellco a license to manufacture, market and sell the Products under its own name, label and CE mark in Italy, France, Belgium, Spain and Canada on an exclusive basis, and to do the same on a non-exclusive basis in the United Kingdom and Greece and, upon our written approval, other European countries where the Company does not sell the Products as well as non-European countries (referred to as the “Territory”). | ||||||||||||||||||
In exchange for the rights granted to it under the Bellco License Agreement through December 31, 2014, Bellco agreed to pay Nephros installment payments of €500,000, €750,000, €600,000 on July 1, 2011, January 15, 2012 and January 15, 2013, respectively. Such installment payments, herein referred to as the Installment Payments, are Bellco’s sole financial obligations through December 31, 2014. All payments have been received. Beginning on January 1, 2015 through and including December 31, 2016, Bellco will pay Nephros a royalty based on the number of units of Products sold per year in the Territory as follows: for the first 103,000 units sold, Bellco will pay €4.50 per unit; thereafter, Bellco will pay €4.00 per unit. Bellco must meet minimum sales targets of 15,000 units in each quarter of 2015 and 2016. If Bellco fails to meet a quarterly minimum, the license in Italy, France, Belgium, Spain and Canada will, at our discretion, convert to a non-exclusive one. All sums payable under the agreement will be paid in Euros, as adjusted to account for currency exchange fluctuations between the Euro and the U.S. dollar that occur between July 1, 2011, the effective date of the agreement, and the date of payment. | ||||||||||||||||||
In exchange for the rights granted to it under the Bellco license agreement through December 31, 2014, Bellco made installment payments to Nephros of €500,000, €750,000, €600,000 on July 1, 2011, January 15, 2012 and January 15, 2013, respectively. Such installment payments, herein referred to as the Installment Payments, are Bellco’s sole financial obligations through December 31, 2014. Beginning on January 1, 2015 through and including December 31, 2016, Bellco will pay Nephros a royalty based on the number of units of Products sold per year in the Territory as follows: for the first 103,000 units sold, Bellco will pay €4.50 per unit; thereafter, Bellco will pay €4.00 per unit. Bellco must meet minimum sales targets of 15,000 units in each quarter of 2015 and 2016. If Bellco fails to meet a quarterly minimum, the license in Italy, France, Belgium, Spain and Canada will, at our discretion, convert to a non-exclusive one. All sums payable under the agreement will be paid in Euros, as adjusted to account for currency exchange fluctuations between the Euro and the U.S. dollar that occur between July 1, 2011, the effective date of the agreement, and the date of payment. | ||||||||||||||||||
License and Supply Agreement | ||||||||||||||||||
On April 23, 2012, the Company entered into a License and Supply Agreement (the “License and Supply Agreement”) with Medica S.p.A. (“Medica”), an Italy-based medical product manufacturing company, for the marketing and sale of certain filtration products based upon Medica’s proprietary Medisulfone ultrafiltration technology in conjunction with the Company’s filtration products (collectively, the “Filtration Products”), and to engage in an exclusive supply arrangement for the Filtration Products. Under the License and Supply Agreement, Medica granted to the Company an exclusive license, with right of sublicense, to market, promote, distribute, offer for sale and sell the Filtration Products worldwide, excluding Italy for the first three years, during the term of the License and Supply Agreement. In addition, the Company granted to Medica an exclusive license under the Company’s intellectual property to make the Filtration Products during the term of the License and Supply Agreement. In exchange for the rights granted, the Company has agreed to make minimum annual aggregate purchases from Medica of €300,000, €500,000 and €750,000 for the years 2012, 2013 and 2014, respectively. For the nine months ended September 30, 2013, the Company’s aggregate purchase commitments totaled approximately €477,000. For calendar years thereafter, annual minimum amounts will be mutually agreed upon between Medica and the Company. | License and Supply Agreement | |||||||||||||||||
As consideration for the license and other rights granted to the Company, the Company was required to pay Medica installment payments of €500,000 and €1,000,000 on April 23, 2012 and January 25, 2013, respectively. As of September 30, 2013, all payments due have been paid to Medica. The final payment of €400,000 was made on May 23, 2013. As further consideration for the license and other rights granted to the Company, the Company granted Medica options to purchase 300,000 shares of the Company’s common stock. The fair market value of these stock options was approximately $273,000 at the time of their issuance, calculated as described in Note 4, Stock-Based Compensation. The fair market value of the options has been capitalized as a long-term intangible asset along with the total installment payments described. Other long-term assets on the condensed consolidated interim balance sheet as of September 30, 2013 is approximately $1,947,000, net of $303,000 accumulated amortization, and is related to the License and Supply Agreement. The asset is being amortized as an expense over the life of the agreement. Approximately $162,000 has been charged to amortization expense for the nine months ended September 30, 2013 on the condensed consolidated interim statement of operations and comprehensive loss. Approximately $53,000 of amortization expense will be recognized in the remainder of the year ended December 31, 2013 and approximately $210,000 will be recognized in each of the years ended 2014 and 2015, respectively. In addition, for the period beginning April 23, 2014 through December 31, 2022, the Company will pay Medica a royalty rate of 3% of net sales of the Filtration Products sold, subject to reduction as a result of a supply interruption pursuant to the terms of the License and Supply Agreement. The term of the License and Supply Agreement commenced on April 23, 2012 and continues in effect through December 31, 2022, unless earlier terminated by either party in accordance with the terms of the License and Supply Agreement. | On April 23, 2012, the Company entered into a License and Supply Agreement (the “License and Supply Agreement”) with Medica S.p.A. (“Medica”), an Italy-based medical product manufacturing company, for the marketing and sale of certain filtration products based upon Medica’s proprietary Medisulfone ultrafiltration technology in conjunction with the Company’s filtration products (collectively, the “Filtration Products”), and to engage in an exclusive supply arrangement for the Filtration Products. Under the License and Supply Agreement, Medica granted to the Company an exclusive license, with right of sublicense, to market, promote, distribute, offer for sale and sell the Filtration Products worldwide, excluding Italy for the first three years, during the term of the License and Supply Agreement. In addition, the Company granted to Medica an exclusive license under the Company’s intellectual property to make the Filtration Products during the term of the License and Supply Agreement. In exchange for the rights granted, the Company has agreed to make minimum annual aggregate purchases from Medica of €300,000, €500,000 and €750,000 for the years 2012, 2013 and 2014, respectively. In the year ended December 31, 2012 the Company’s aggregate purchase commitments totaled approximately €585,000. For calendar years thereafter, annual minimum amounts will be mutually agreed upon between Medica and the Company. | |||||||||||||||||
As consideration for the license and other rights granted to the Company, the Company is required to pay Medica installment payments of €500,000 and €1,000,000 on April 23, 2012 and January 25, 2013, respectively. The April 23, 2012 payment was made. The January 25, 2013 payment is included at December 31, 2012 as license and supply agreement fee payable of approximately $1,318,000. See Note 12, Subsequent Events, for the current status of January 25, 2013 payment. The total installment payments approximate $1,978,000. As further consideration for the license and other rights granted to the Company, the Company granted Medica options to purchase 300,000 shares of the Company’s common stock. The fair market value of these stock options was approximately $273,000 at the time of their issuance, calculated as described in Note 2 under Stock-Based Compensation. The fair market value of the options has been capitalized as a long-term intangible asset along with the total installment payments described. Other long-term assets on the consolidated balance sheet is approximately $2,109,000, net of $142,000 accumulated amortization, and is related to the License and Supply Agreement. The asset is being amortized as an expense over the life of the agreement. Approximately $142,000 has been charged to amortization expense for the year ended December 31, 2012 on the consolidated statement of operations and comprehensive loss. Approximately $208,000 of amortization expense will be recognized in the years ended December 31, 2013, 2014 and 2015, respectively. In addition, for the period beginning April 23, 2014 through December 31, 2022, the Company will pay Medica a royalty rate of 3% of net sales of the Filtration Products sold, subject to reduction as a result of a supply interruption pursuant to the terms of the License and Supply Agreement. The term of the License and Supply Agreement commenced on April 23, 2012 and continues in effect through December 31, 2022, unless earlier terminated by either party in accordance with the terms of the License and Supply Agreement. | ||||||||||||||||||
Employment Agreement | ||||||||||||||||||
On April 20, 2012, the Company entered into an Employment Agreement, effective as of April 20, 2012, with John C. Houghton (“Employment Agreement”). The Employment Agreement has a term of four years, ending on April 20, 2016. The Employment Agreement provides that Mr. Houghton’s annual base salary will be $350,000. Mr. Houghton will be eligible to receive a target discretionary bonus of 30% of annual base salary, as determined by the Company. The targets with respect to the bonus for the year ended December 31, 2012 were mutually agreed upon between Mr. Houghton and the Compensation Committee of the Board within 60 days following April 20, 2012 and such bonus will be appropriately prorated for such annual period. The targets for each subsequent annual period will be mutually agreed upon at the beginning of each calendar year between Mr. Houghton and the Compensation Committee. | ||||||||||||||||||
Contractual Obligations | ||||||||||||||||||
The Company had an operating lease that expired on November 30, 2012 for the rental of its U.S. office and research and development facilities with a monthly cost of approximately $7,813. On June 26, 2012, the Company signed a one year lease extension for the same office space which will expire on November 30, 2013 with a monthly cost of approximately $8,399 beginning December 1, 2012. | ||||||||||||||||||
Rent expense for the years ended December 31, 2012 and 2011 totaled $109,000 and $104,000, respectively. | ||||||||||||||||||
Contractual Obligations and Commercial Commitments | ||||||||||||||||||
The following tables summarize our approximate minimum contractual obligations and commercial commitments as of December 31, 2012: | ||||||||||||||||||
Payments Due in Period | ||||||||||||||||||
Total | Within | Years | Years | More than | ||||||||||||||
1 Year | 1– 3 | 4 – 5 | 5 Years | |||||||||||||||
Leases | $ | 113,000 | $ | 99,000 | $ | 14,000 | $ | — | $ | — | ||||||||
Employment Contracts | 1,402,000 | 550,000 | 852,000 | — | — | |||||||||||||
Total | $ | 1,515,000 | $ | 649,000 | $ | 866,000 | $ | — | $ | — | ||||||||
Subsequent_Event
Subsequent Event | 9 Months Ended | 12 Months Ended |
Sep. 30, 2013 | Dec. 31, 2012 | |
Subsequent Events [Abstract] | ' | ' |
Subsequent Event | ' | ' |
11. Subsequent Event | Note 12 — Subsequent Events | |
Product Recall | On February 4, 2013, the Company issued a senior secured note to Lambda Investors LLC in the principal amount of $1.3 million. The note bears interest at the rate of 12% per annum and matures on August 4, 2013, at which time all principal and accrued interest will be due. However, the Company has agreed to prepay amounts due under the note with the cash proceeds from (a) a rights offering and an offering of a discounted exercise price to public warrantholders, each as further described in the note, (b) any other equity or debt financing, or (c) the issuance or incurrence of any other indebtedness or the sale of any assets outside the ordinary course of business, in each case prior to the maturity date. If the Company does not pay principal and interest under the note when due, the interest rate increases to 16% per annum. The Company may prepay the note without penalty at any time. The note is secured by a first priority lien on all of the Company’s property, including our intellectual property. As long as indebtedness remains outstanding under the note, the Company will be subject to certain covenants which, among other things, restrict the Company’s ability to merge with another company, sell a material amount of its assets, incur any additional indebtedness, repay any existing indebtedness, or declare or pay any dividends in cash, property or securities. In connection with the note, the Company has agreed to pay Lambda Investors an 8%, or $104,000, sourcing/transaction fee. In addition, the Company will pay Lambda Investors’ legal fees and other expenses incurred in connection with the note in the amount of $50,000 as well as Lambda Investors’ legal fees and other expenses incurred in connection with the rights offering in the amount of $50,000. Those payments will be paid upon the completion of the rights offering or, if earlier, upon the maturity of the note. As additional consideration, the Company agreed to extend by one year the expiration date of all of Lambda’s outstanding warrants to March 2017. In addition, the Company has undertaken to conduct a $3 million rights offering of common stock. The Company expects the offering price will be $0.60 per share. All of the Company’s stockholders and warrantholders will be eligible to participate in the offering on a pro rata basis based upon their proportionate ownership of the company’s common stock on a fully-diluted basis. Subject to the satisfaction of certain conditions including compliance with all obligations under the note, security agreement and the other transaction documents relating to the note and no material adverse change having occurred with respect to the business, assets, and financial condition of the Company, Lambda Investors has advised the Company that it intends to exercise its basic subscription privilege in full and to purchase any shares of common stock that are not subscribed for by other stockholders in the rights offering, if any. During the period when the rights offering is open, the Company expects to offer to public warrantholders of the Company holding the warrants issued at the close of the March 2011 rights offering a one-time right, at their option, to exercise such warrants for an exercise price of $0.30 per share discounted from $0.40 per share. The Company expects to commence the offering in March 2013 following the filing of its Annual Report on Form 10-K. In connection with the offering, the Company will file a registration statement on Form S-1, as may be amended, with the Securities and Exchange Commission. | |
On October 30, 2013, the Company filed a Current Report on Form 8-K announcing the voluntary recalls of its point of use (POU) and DSU in-line ultrafilters used in hospital water treatment applications. As a result, the Company has recalled all production lots of its POU filters, and also requested that customers remove and discard certain labeling/promotional materials for the products. In addition, the Company also requested, for the DSU in-line ultrafilter, that customers remove and discard certain labeling/promotional materials for the product. These voluntary recalls do not affect the Company’s dialysis products. The condensed consolidated interim financial statements for the period ended September 30, 2013 include product revenues and cost of goods sold adjustments of approximately $127,000 and $27,000, respectively, reflecting estimates of the financial impact of product recalled notified to the Company. The Company is unable to predict at this time what additional effect this recall might have on its business, financial condition, future prospects or reputation or whether the Company may be subject to future actions from the U.S. Food and Drug Administration. | ||
On February 4, 2013, €600,000 was paid to Medica per the terms of the license and supply agreement described in Note 10 of these consolidated financial statements. Both parties agreed that the remaining €400,000 will be paid in June 2013. | ||
November 12, 2013 Senior Secured Note | ||
On November 12, 2013, we issued a senior secured note to Lambda Investors LLC in the principal amount of $1.5 million. The note bears interest at the rate of 12% per annum and matures on May 12, 2014, at which time all principal and accrued interest will be due. We have agreed to prepay amounts due under the note with the cash proceeds from (a) a rights offering, (b) any other equity or debt financing, or (c) the issuance or incurrence of any other indebtedness or the sale of any assets outside the ordinary course of business, in each case prior to the maturity date. If we do not pay principal and interest under the note when due, the interest rate increases to 16% per annum. In addition, we have undertaken to conduct a $2.75 million rights offering of common stock. We expect the offering price will be $0.30 per share. All of our stockholders and warrantholders will be eligible to participate in the offering on a pro rata basis based upon their proportionate ownership of our common stock, calculated on an as converted to common stock, fully-diluted basis. In connection with the note and the rights offering, we have agreed to pay Lambda Investors an 8%, or $120,000, sourcing/transaction fee. In addition, we will pay Lambda Investors’ legal fees and other expenses incurred in connection with the note and rights offering in the amount of $75,000. The warrants held by Lambda Investors have an exercise price of $0.40 per share and certain warrants have full ratchet anti-dilution protection. The full ratchet anti-dilution protection for certain warrants will be triggered in connection with the rights offering as the $0.30 per share price is less than the $0.40 exercise price for these warrants. In connection with the proposed rights offering, the Company agreed to amend the expiration date of the existing warrants held by Lambda Investors from March 10, 2017 to the date which is the five year anniversary of the closing of the rights offering. Subject to the satisfaction of certain conditions, Lambda Investors has advised us that it intends to exercise its basic subscription privilege in full. To the extent that after the closing of the rights offering there still remain unsubscribed shares, Lambda Investors will have the right, at its option, to purchase any or all such remaining unsubscribed shares within ten days of the closing of the rights offering. In connection with the rights offering, we will file a registration statement on Form S-1, as may be amended, with the Securities and Exchange Commission. | ||
Organization_and_Nature_of_Ope
Organization and Nature of Operations | 12 Months Ended |
Dec. 31, 2012 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
Organization and Nature of Operations | ' |
Note 1 — Organization and Nature of Operations | |
Nephros, Inc. (“Nephros” or the “Company”) was incorporated under the laws of the State of Delaware on April 3, 1997. Nephros was founded by health professionals, scientists and engineers affiliated with Columbia University to develop advanced End Stage Renal Disease (“ESRD”) therapy technology and products. The Company has two products in various stages of development in the hemodiafiltration, or HDF, modality to deliver improved therapy for ESRD patients. These are the OLpur MDHDF filter series or “dialyzers,” designed expressly for HDF therapy, the OLpur H2H, an add-on module designed to allow the most common types of hemodialysis machines to be used for HDF therapy. In 2009, the Company introduced its Dual Stage Ultrafilter (“DSU”) water filter system, which represents a new and complementary product line to the Company’s existing ESRD therapy business. The DSU incorporates the Company’s unique and proprietary dual stage filter architecture. | |
On June 4, 2003, Nephros International Limited was incorporated under the laws of Ireland as a wholly-owned subsidiary of the Company. In August 2003, the Company established a European Customer Service and financial operations center in Dublin, Ireland. | |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended | |||||||
Dec. 31, 2012 | ||||||||
Accounting Policies [Abstract] | ' | |||||||
Summary of Significant Accounting Policies | ' | |||||||
Note 2 — Summary of Significant Accounting Policies | ||||||||
Principles of Consolidation and Basis of Presentation | ||||||||
The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, Nephros International Limited. All intercompany accounts and transactions have been eliminated in consolidation. | ||||||||
These financial statements were approved by management and the Board of Directors and are available for issuance as of the date of the audit opinion. Subsequent events have been evaluated through this date. | ||||||||
Use of Estimates in the Preparation of Financial Statements | ||||||||
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities, at the date of the financial statements, and the reported amount of revenues and expenses, during the reporting period. Actual results could differ materially from those estimates. | ||||||||
Going Concern and Management’s Response | ||||||||
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company’s recurring losses and difficulty in generating sufficient cash flow to meet its obligations and sustain its operations raise substantial doubt about its ability to continue as a going concern. The Company’s consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. | ||||||||
The Company has incurred significant losses in operations in each quarter since inception. For the years ended December 31, 2012 and 2011, the Company has incurred net losses of $3,262,000 and $2,360,000, respectively. In addition, the Company has not generated positive cash flow from operations for the years ended December 31, 2012 and 2011. To become profitable, the Company must increase revenue substantially and achieve and maintain positive gross and operating margins. If the Company is not able to increase revenue and gross and operating margins sufficiently to achieve profitability, its results of operations and financial condition will be materially and adversely affected. | ||||||||
On June 27, 2011, the Company entered into a License Agreement, effective July 1, 2011, with Bellco S.r.l., as licensee (“Bellco”), an Italy-based supplier of hemodialysis and intensive care products, for the manufacturing, marketing and sale of Nephros’ patented mid-dilution dialysis filters. This Agreement provides the Company with payments of €500,000, €750,000, and €600,000 on July 1, 2011, January 15, 2012 and January 15, 2013, respectively. All payments have been received. Beginning on January 1, 2015 through and including December 31, 2016, Bellco will pay to Nephros a royalty based on the number of units of products sold per year in the territory as follows: for the first 103,000 units sold, €4.50 per unit; thereafter, €4.00 per unit. Anticipated payments from this License Agreement will be a positive source of cash flow to the Company. | ||||||||
On February 4, 2013, the Company issued a senior secured note to Lambda Investors LLC in the principal amount of $1.3 million. For a more detailed discussion of the terms of the senior secured note, see Note 12, Subsequent Events. | ||||||||
There can be no assurance that the Company’s future cash flow will be sufficient to meet its obligations and commitments. If the Company is unable to generate sufficient cash flow from operations in the future to service its commitments the Company will be required to adopt alternatives, such as seeking to raise debt or equity capital, curtailing its planned activities or ceasing its operations. There can be no assurance that any such actions could be effected on a timely basis or on satisfactory terms or at all, or that these actions would enable the Company to continue to satisfy its capital requirements. | ||||||||
Cash and Cash Equivalents | ||||||||
The Company invests its excess cash in bank deposits and money market accounts. The Company considers all highly liquid investments purchased with original maturities of three months or less from the date of purchase to be cash equivalents. Cash equivalents are carried at fair value, which approximate cost, and primarily consist of money market funds maintained at major U.S. financial institutions. | ||||||||
Accounts Receivable | ||||||||
The Company provides credit terms to customers in connection with purchases of the Company’s products. Management periodically reviews customer account activity in order to assess the adequacy of the allowances provided for potential collection issues and returns. Factors considered include economic conditions, each customer’s payment and return history and credit worthiness. Adjustments, if any, are made to reserve balances following the completion of these reviews to reflect management’s best estimate of potential losses. There were no allowances for doubtful accounts at December 31, 2012 or 2011. There was no allowance for sales returns at December 31, 2012 or 2011. There were no write offs of accounts receivable to bad debt expense during 2012 or 2011. | ||||||||
Inventory | ||||||||
The Company engages third parties to manufacture and package inventory held for sale, takes title to certain inventory once manufactured, and warehouses such goods until packaged for final distribution and sale. Inventory consists of finished goods and raw materials (fiber) held at the manufacturers’ facilities, and are valued at the lower of cost or market using the first-in, first-out method. The Company’s inventory reserve requirements are based on factors including the products’ expiration date and estimates for the future sales of the product. If estimated sales levels do not materialize, the Company will make adjustments to its assumptions for inventory reserve requirements. | ||||||||
Patents | ||||||||
The Company has filed numerous patent applications with the United States Patent and Trademark Office and in foreign countries. All costs and direct expenses incurred in connection with patent applications have been expensed as incurred. | ||||||||
Property and Equipment, net | ||||||||
Property and equipment, net is stated at cost less accumulated depreciation. These assets are depreciated over their estimated useful lives of three to seven years using the straight line method. | ||||||||
Impairment for Long-Lived Assets | ||||||||
The Company adheres to Accounting Standards Codification (“ASC”) Topic 360 and periodically evaluates whether current facts or circumstances indicate that the carrying value of its depreciable assets to be held and used may be recoverable. If such circumstances are determined to exist, an estimate of undiscounted future cash flows produced by the long-lived assets, or the appropriate grouping of assets, is compared to the carrying value to determine whether impairment exists. If an asset is determined to be impaired, the loss is measured based on the difference between the asset’s fair value and its carrying value. An estimate of the asset’s fair value is based on quoted market prices in active markets, if available. If quoted market prices are not available, the estimate of fair value is based on various valuation techniques, including a discounted value of estimated future cash flows. The Company reports an asset to be disposed of at the lower of its carrying value or its estimated net realizable market value. There were no impairment losses for long-lived assets recorded for the years ended December 31, 2012 and December 31, 2011. | ||||||||
Fair Value of Financial Instruments | ||||||||
The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximate fair value due to the short-term maturity of these instruments. | ||||||||
Revenue Recognition | ||||||||
Revenue is recognized in accordance with ASC Topic 605. Four basic criteria must be met before revenue can be recognized: (i) persuasive evidence of an arrangement exists; (ii) delivery has occurred or services have been rendered; (iii) the fee is fixed or determinable; and (iv) collectability is reasonably assured. | ||||||||
The Company recognizes revenue related to product sales when delivery is confirmed by its external logistics provider and the other criteria of ASC Topic 605 are met. Product revenue is recorded net of returns and allowances. All costs and duties relating to delivery are absorbed by Nephros. All shipments are currently received directly by the Company’s customers. | ||||||||
Deferred revenue is approximately $1,414,000 and $2,094,000 on the accompanying consolidated balance sheet as of December 31, 2012 and 2011, respectively, and is related to the License Agreement with Bellco. The Company has recognized approximately $1,045,000 of revenue related to this license agreement to date, including approximately $680,000 for the year ended December 31, 2012, resulting in $1,414,000 being deferred over the remainder of the expected obligation period. The Company amortizes the deferred revenue monthly over the expected obligation period which ends on December 31, 2014. This will result in expected recognized revenue of approximately $707,000 in each of the years ending December 31, 2013 and 2014. | ||||||||
The Company received cash payments of approximately $709,000 in July 2011 and $951,000 in January 2012. The final guaranteed fixed payment of approximately $791,000 was received in January 2013 and is included in accounts receivables on the accompanying December 31, 2012 consolidated balance sheet. | ||||||||
Shipping and Handling Costs | ||||||||
Shipping and handling costs are recorded as cost of goods sold and are approximately $33,000 and $26,000 for the years ended December 31, 2012 and 2011, respectively. | ||||||||
Research and Development Costs | ||||||||
Research and development costs are expensed as incurred. | ||||||||
Stock-Based Compensation | ||||||||
The Company accounts for stock-based compensation in accordance with ASC Topic 718 by recognizing the fair value of stock-based compensation in the statement of operations. The fair value of the Company’s stock option awards are estimated using a Black-Scholes option valuation model. This model requires the input of highly subjective assumptions and elections including expected stock price volatility and the estimated life of each award. In addition, the calculation of compensation costs requires that the Company estimate the number of awards that will be forfeited during the vesting period. The fair value of stock-based awards is amortized over the vesting period of the award. For stock-based awards that vest based on performance conditions (e.g. achievement of certain milestones), expense is recognized when it is probable that the condition will be met. | ||||||||
Amortization of Debt Issuance Costs | ||||||||
The Company accounts for debt issuance costs in accordance with ASC 835, which requires that these costs be reported in the balance sheet as deferred charges and amortized over the term of the associated debt. Amortization of debt issuance costs of $40,000 for the year ended December 31, 2011 are associated with the senior secured note issued to Lambda Investors LLC. These capitalized costs were fully amortized by the first quarter of 2011. There were no debt issuance costs for the year ended December 31, 2012. | ||||||||
Other Income | ||||||||
Other income in the amount of approximately $69,000 for the year ended December 31, 2012 was primarily due to approximately $55,000 arising from the sale of fully depreciated manufacturing equipment sold to Medica in October 2012. The remaining approximately $14,000 is a result of a combination of adjustments to liabilities and foreign currency losses. | ||||||||
Other expense in the amount of approximately $2,000 for the year ended December 31, 2011 was due to foreign currency loss on invoices paid to an international supplier. | ||||||||
Income Taxes | ||||||||
The Company accounts for income taxes in accordance with ASC Topic 740, which requires accounting for deferred income taxes under the asset and liability method. Deferred income taxes are recognized for the tax consequences of temporary differences by applying enacted statutory tax rates applicable in future years to differences between the financial statement carrying amounts and the tax basis of existing assets and liabilities. | ||||||||
For financial reporting purposes, the Company has incurred a loss in each period since its inception. Based on available objective evidence, including the Company’s history of losses, management believes it is more likely than not that the net deferred tax assets will not be fully realizable. Accordingly, the Company provided for a full valuation allowance against its net deferred tax assets at December 31, 2012 and 2011. | ||||||||
ASC Topic 740 prescribes, among other things, a recognition threshold and measurement attributes for the financial statement recognition and measurement of uncertain tax positions taken or expected to be taken in a company’s income tax return. ASC 740 utilizes a two-step approach for evaluating uncertain tax positions. Step one, or recognition, requires a company to determine if the weight of available evidence indicates a tax position is more likely than not to be sustained upon audit, including resolution of related appeals or litigation processes, if any. Step two, or measurement, is based on the largest amount of benefit, which is more likely than not to be realized on settlement with the taxing authority. The Company is subject to income tax examinations by major taxing authorities for all tax years subsequent to 2008. The adoption of the provisions of ASC 740 did not have a material impact on the Company’s consolidated financial statements. During the years ended December 31, 2012 and 2011, the Company recognized no adjustments for uncertain tax positions. However, management’s conclusions regarding this policy may be subject to review and adjustment at a later date based on factors including, but not limited to, on-going analyses of and changes to tax laws, regulation and interpretations, thereof. | ||||||||
Loss per Common Share | ||||||||
In accordance with ACS 260-10, net loss per common share amounts (“basic EPS”) are computed by dividing net loss attributable to common stockholders by the weighted-average number of common shares outstanding and excluding any potential dilution. Net loss per common share amounts assuming dilution (“diluted EPS”) is generally computed by reflecting potential dilution from conversion of convertible securities and the exercise of stock options and warrants. The following securities have been excluded from the dilutive per share computation as they are antidilutive. | ||||||||
2012 | 2011 | |||||||
Stock options | 2,294,714 | 747,164 | ||||||
Warrants | 14,679,971 | 16,452,368 | ||||||
Foreign Currency Translation | ||||||||
Foreign currency translation is recognized in accordance with ASC Topic 830. The functional currency of Nephros International Limited is the Euro and its translation gains and losses are included in accumulated other comprehensive income. The balance sheet is translated at the year-end rate. The statement of operations is translated at the weighted average rate for the year. | ||||||||
Comprehensive Income (Loss) | ||||||||
Comprehensive income (loss), as defined in ASC 220, is the total of net income (loss) and all other non-owner changes in equity (or other comprehensive income (loss)) such as foreign currency translation adjustments. For the years ended December 31, 2012 and 2011, the comprehensive loss was approximately $3,235,000 and $2,333,000, respectively. | ||||||||
Recently Adopted Accounting Pronouncements | ||||||||
In December 2011, the FASB issued an update on comprehensive income, which pertains to the deferral of the effective date for amendments to the presentation of reclassification of items out of accumulated other comprehensive income in a previous accounting standard update that pertained to the presentation of comprehensive income. The update defers the presentation 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. All other requirements the previous accounting standard on the presentation of comprehensive income, issued in June 2011, are not affected. The previous presentation related comprehensive income standard requires entities to report components of comprehensive income in either a continuous statement of comprehensive income or two separate but consecutive statements. Under the continuous statement approach, the statement would include the components and total of net income, the components and total of other comprehensive income and the total of comprehensive income. Under the two statement approach, the first statement would include the components and total of net income and the second statement would include the components and total of other comprehensive income and the total of comprehensive income. It does not change the items that must be reported in other comprehensive income and it is effective retrospectively for interim and annual periods beginning after December 15, 2011, with early adoption permitted. The Company adopted this guidance as of January 1, 2012 and since this relates to presentation only, the adoption of this guidance did not have any other effect on the Company’s consolidated financial statements. | ||||||||
Prepaid_Expenses_and_Other_Cur
Prepaid Expenses and Other Current Assets | 12 Months Ended | |||||||
Dec. 31, 2012 | ||||||||
Other Assets [Abstract] | ' | |||||||
Prepaid Expenses and Other Current Assets | ' | |||||||
Note 4 — Prepaid Expenses and Other Current Assets | ||||||||
Prepaid expenses and other current assets as of December 31, 2012 and 2011 were as follows: | ||||||||
December 31, | ||||||||
2012 | 2011 | |||||||
Prepaid insurance premiums | $ | 78,000 | $ | 88,000 | ||||
Security deposit | 21,000 | 21,000 | ||||||
Other | 10,000 | 4,000 | ||||||
Prepaid expenses and other current assets | $ | 109,000 | $ | 113,000 | ||||
Property_and_Equipment_Net
Property and Equipment, Net | 12 Months Ended | ||||||||||
Dec. 31, 2012 | |||||||||||
Property, Plant and Equipment [Abstract] | ' | ||||||||||
Property and Equipment, Net | ' | ||||||||||
Note 5 — Property and Equipment, Net | |||||||||||
Property and equipment as of December 31, 2012 and 2011 was as follows: | |||||||||||
December 31, | |||||||||||
Life | 2012 | 2011 | |||||||||
Manufacturing equipment | 3 – 5 years | $ | 602,000 | $ | 1,980,000 | ||||||
Research equipment | 5 years | 37,000 | 37,000 | ||||||||
Computer equipment | 3 – 4 years | 59,000 | 59,000 | ||||||||
Furniture and fixtures | 7 years | 39,000 | 39,000 | ||||||||
Property and equipment, gross | 737,000 | 2,115,000 | |||||||||
Less: accumulated depreciation | 721,000 | 2,098,000 | |||||||||
Property and equipment, net | $ | 16,000 | $ | 17,000 | |||||||
Depreciation expense for the years ended December 31, 2012 and 2011 was approximately $9,000 and $91,000, respectively, including amortization expense relating to research and development assets. | |||||||||||
During 2012, the Company agreed to sell its manufacturing equipment located in the CM to Medica for approximately €42,500 or $55,000. All assets at the manufacturing plant were fully depreciated as of the date of the sale. Approximately €42,500 or $55,000 is recognized as other income on the consolidated statement of operations for the year ended December 31, 2012. | |||||||||||
Accrued_Expenses
Accrued Expenses | 12 Months Ended | |||||||
Dec. 31, 2012 | ||||||||
Payables and Accruals [Abstract] | ' | |||||||
Accrued Expenses | ' | |||||||
Note 6 — Accrued Expenses | ||||||||
Accrued expenses as of December 31, 2012 and 2011 were as follows: | ||||||||
December 31, | ||||||||
2012 | 2011 | |||||||
Accrued Legal | $ | 90,000 | $ | 52,000 | ||||
Accrued Directors’ Compensation | 77,000 | 30,000 | ||||||
Accrued Management Bonus | — | 79,000 | ||||||
Accrued Accounting | — | 15,000 | ||||||
Accrued Travel | 84,000 | — | ||||||
Accrued Other | 70,000 | 19,000 | ||||||
Accrued Expenses | $ | 321,000 | $ | 195,000 | ||||
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||
Dec. 31, 2012 | |||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||
Income Taxes | ' | ||||||||
Note 7 — Income Taxes | |||||||||
A reconciliation of the income tax provision computed at the statutory tax rate to the Company’s effective tax rate is as follows: | |||||||||
2012 | 2011 | ||||||||
U.S. federal statutory rate | 35 | % | 35 | % | |||||
State & local taxes | 5.36 | % | -0.06 | % | |||||
Tax on foreign operations | -0.78 | % | -1.27 | % | |||||
State research and development credits | 1.06 | % | 1.11 | % | |||||
Other | -2.29 | % | -3.07 | % | |||||
Valuation allowance | -38.35 | % | -31.71 | % | |||||
Effective tax rate | — | — | |||||||
Significant components of the Company’s deferred tax assets as of December 31, 2012 and 2011 are as follows: | |||||||||
2012 | 2011 | ||||||||
Deferred tax assets: | |||||||||
Net operating loss carry forwards | $ | 25,721,000 | $ | 24,714,000 | |||||
Research and development credits | 1,054,000 | 1,019,000 | |||||||
Nonqualified stock option compensation expense | 1,701,000 | 1,586,000 | |||||||
Other temporary book – tax differences | 441,000 | 331,000 | |||||||
Total deferred tax assets | 28,917,000 | 27,650,000 | |||||||
Valuation allowance for deferred tax assets | -28,917,000 | -27,650,000 | |||||||
Net deferred tax assets | $ | — | $ | — | |||||
A valuation allowance has been recognized to offset the Company’s net deferred tax asset as it is more likely than not that such net asset will not be realized. The Company primarily considered its historical loss and potential Internal Revenue Code Section 382 limitations to arrive at its conclusion that a valuation allowance was required. | |||||||||
At December 31, 2012, the Company had Federal and New Jersey income tax net operating loss carryforwards of $81,616,000 and foreign income tax net operating loss carryforwards of $8,233,000. The Company also had Federal research tax credit carryforwards of $1,054,000 at December 31, 2012 and $1,020,000 at December 31, 2011. The Federal net operating loss and tax credit carryforwards will expire at various times between 2013 and 2026 unless utilized. | |||||||||
It is the Company’s policy to report interest and penalties, if any, related to unrecognized tax benefits in income tax expense. | |||||||||
Stock_Plans_ShareBased_Payment
Stock Plans, Share-Based Payments and Warrants | 9 Months Ended | 12 Months Ended | ||||||||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | |||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ' | ||||||||||||||||||||
Stock Plans, Share-Based Payments and Warrants | ' | ' | ||||||||||||||||||||
4. Stock-Based Compensation | Note 8 — Stock Plans, Share-Based Payments and Warrants | |||||||||||||||||||||
Stock Options | Stock Plans | |||||||||||||||||||||
The Company accounts for stock option grants to employees and non-employee directors under the provisions of ASC 718, Stock Compensation. ASC 718 requires the recognition of the fair value of stock-based compensation in the statement of operations. In addition, the Company accounts for stock option grants to consultants under the provisions of ASC 505-50, Equity-Based Payments to Non-Employees, and as such, these stock options are revalued at each reporting period through the vesting period. | In 2000, the Company adopted the Nephros 2000 Equity Incentive Plan. In January 2003, the Board of Directors adopted an amendment and restatement of the plan and renamed it the Amended and Restated Nephros 2000 Equity Incentive Plan (the “2000 Plan”), under which 106,538 shares of common stock had been authorized for issuance upon exercise of options granted. | |||||||||||||||||||||
Gerald J. Kochanski, Chief Financial Officer, Treasurer and Corporate Secretary of Nephros, Inc., resigned effective June 15, 2013. The Company agreed, in consideration of Mr. Kochanski providing certain consulting services to the Company, to extend the exercise period of his outstanding vested stock options from September 15, 2013 to March 14, 2014. This modification did not result in any additional compensation expense. | As of December 31, 2012 and 2011, 2,053 options had been issued to non-employees under the 2000 Plan and were outstanding. Such options expire at various dates through March 15, 2014, all of which are fully vested. As of December 31, 2012 and 2011, 7,230 options had been issued to employees under the 2000 Plan and were outstanding. Such options expire at various dates between January 22, 2013 and March 15, 2014, all of which are fully vested. | |||||||||||||||||||||
The fair value of stock option awards is estimated using a Black-Scholes option pricing model. The fair value of stock-based awards is amortized over the vesting period of the award using the straight-line method. | The Board retired the 2000 Plan in June 2004, and thereafter no additional awards may be granted under the 2000 Plan. | |||||||||||||||||||||
The Company granted 176,875 stock options during the nine months ended September 30, 2013 to employees, non-employees, directors and consultants. These stock options vest over a three-year or four-year period and will be expensed over the applicable vesting period. The fair value of all stock-based awards granted during the nine months ended September 30, 2013, excluding those forfeited below, was approximately $96,000. | In 2004, the Board of Directors adopted and the Company’s stockholders approved the Nephros, Inc. 2004 Stock Incentive Plan, and, in June 2005, the Company’s stockholders approved an amendment to such plan (as amended, the “2004 Plan”), that increased to 40,000 the number of shares of the Company’s common stock that are authorized for issuance by the Company pursuant to grants of awards under the 2004 Plan. In May 2007, the Company’s stockholders approved an amendment to the 2004 Plan that increased to 65,000 the number of shares of the Company’s common stock that are authorized for issuance by the Company pursuant to grants of awards under the 2004 Plan. In June 2008, the Company’s stockholders approved an amendment to the 2004 Plan that increased to 134,849 the number of shares of the Company’s common stock that are authorized for issuance by the Company pursuant to grants of awards under the 2004 Plan. In January 2011, the Company’s stockholders approved an amendment to the 2004 Plan that increased to 1,990,717 the number of shares of the Company’s common stock that are authorized for issuance by the Company pursuant to grants of awards under the 2004 Plan. | |||||||||||||||||||||
As a result of Mr. Kochanski’s resignation, 90,945 stock options that were granted to him were forfeited on June 15, 2013. Of these 90,945 stock options, 25,000 were granted during the nine month period ended September 30, 2013. | As of December 31, 2011, 443,128 options had been issued to employees under the 2004 Plan and were outstanding. The options expire on various dates between April 27, 2015 and March 24, 2021, and vest upon a combination of the following: immediate vesting or straight line vesting of two or four years. At December 31, 2011, there were 1,235,904 shares available for future grants under the 2004 Plan. As of December 31, 2011, 294,753 options had been issued to non-employees under the 2004 Plan and were outstanding. Such options expire at various dates between November 11, 2014 and November 18, 2021, and vest upon a combination of the following: immediate vesting or straight line vesting of two or four years. | |||||||||||||||||||||
The following assumptions were used for options granted for the nine months ended September 30, 2013: | As of December 31, 2012, 1,316,628 options had been issued to employees under the 2004 Plan and were outstanding. The options expire on various dates between April 27, 2015 and April 20, 2022, and vest upon a combination of the following: immediate vesting or straight line vesting of two to four years. At December 31, 2012, there were 19,904 shares available for future grants under the 2004 Plan. As of December 31, 2012, 637,253 options had been issued to non-employees under the 2004 Plan and were outstanding. Such options expire at various dates between November 11, 2014 and April 23, 2022, and vest upon a combination of the following: immediate vesting or straight line vesting of two to four years. | |||||||||||||||||||||
Nine Months | An additional 331,550 options were issued to the Company’s CEO per terms of his employment agreement. | |||||||||||||||||||||
Ended | ||||||||||||||||||||||
September 30, | Share-Based Payment | |||||||||||||||||||||
2013 | ||||||||||||||||||||||
Risk-free interest rate | 1.09-1.22 | % | Prior to the Company’s initial public offering, options were granted to employees, non-employees and non-employee directors at exercise prices which were lower than the fair market value of the Company’s stock on the date of grant. After the date of the Company’s initial public offering, stock options are granted to employees, non-employees and non-employee directors at exercise prices equal to the fair market value of the Company’s stock on the date of grant. Stock options granted have a life of 10 years. | |||||||||||||||||||
Volatility | 127.46 - 131.79 | % | ||||||||||||||||||||
Expected dividend yield | 0 | % | Unvested options as of December 31, 2012 currently vest upon a combination of the following: immediate vesting or straight line vesting of two or four years. | |||||||||||||||||||
Expected term | 5.75 - 6.25 yrs | |||||||||||||||||||||
Expense is recognized, net of expected forfeitures, over the vesting period of the options. For options that vest upon the achievement of certain milestones, expense is recognized when it is probable that the condition will be met. Stock based compensation expense recognized for the years ended December 31, 2012 and 2011 was approximately $443,000 or less than $0.04 per share and approximately $256,000 or less than $0.03 per share, respectively. | ||||||||||||||||||||||
The Company calculates expected volatility for a stock-based grant based on historic monthly stock price observations of common stock during the period immediately preceding the grant that is equal in length to the expected term of the grant. The Company also estimates future forfeitures, using historical employee behaviors related to forfeitures, as a part of the estimate of expense as of the grant date. With respect to grants of options, the risk free rate of interest is based on the U.S. Treasury rates appropriate for the expected term of the grant. | ||||||||||||||||||||||
The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model with the below assumptions related to risk-free interest rates, expected dividend yield, expected lives and expected stock price volatility. | ||||||||||||||||||||||
Stock-based compensation expense was approximately $300,000 and $335,000 for the nine months ended September 30, 2013 and 2012, respectively. For the nine months ended September 30, 2013, approximately $275,000 and approximately $25,000 are included in Selling, General and Administrative expenses and Research and Development expenses, respectively, on the accompanying condensed consolidated statement of operations. For the nine months ended September 30, 2012, approximately $314,000 and approximately $21,000 are included in Selling, General and Administrative expenses and Research and Development expenses, respectively, on the accompanying condensed consolidated statement of operations. | ||||||||||||||||||||||
Option Pricing Assumptions | ||||||||||||||||||||||
There was no tax benefit related to expense recognized in the nine months ended September 30, 2013 and 2012, as the Company is in a net operating loss position. As of September 30, 2013, there was approximately $832,000 of total unrecognized compensation cost related to unvested share-based compensation awards granted under the equity compensation plans which will be amortized over the weighted average remaining requisite service period of 2.5 years. The unrecognized compensation disclosed above does not include the effect of future grants of equity compensation, if any. Of the total $832,000, the Company expects to recognize approximately 11% in the remaining interim periods of 2013, approximately 40% in 2014, approximately 38% in 2015, approximately 10% in 2016 and approximately 1% in 2017. | Grant Year | 2012 | 2011 | |||||||||||||||||||
Stock Price Volatility | 123.48 – 128.54 | % | 121.96 – 130.06 | % | ||||||||||||||||||
Restricted Stock | Risk-Free Interest Rates | 0.93 – 1.32 | % | 1.08 – 2.42 | % | |||||||||||||||||
Expected Life (in years) | 5.75 – 6.25 | 5.00 – 5.50 | ||||||||||||||||||||
On August 20, 2013, the Company issued 28,329 shares of restricted stock as compensation for the services of non-employee directors. The grant date fair value of the restricted stock award was approximately $43,000 and was based on the fair value of the common stock on the date of grant, and compensation expense is recognized ratably over a six month period. | Expected Dividend Yield | 0 | % | 0 | % | |||||||||||||||||
For the nine months ended September 30, 2013, including those restricted shares issued on August 20, 2013, 339,028 shares of restricted stock were granted to certain employees and non-employee directors. As a result of Mr. Kochanski’s resignation, 45,929 of those shares of were forfeited on June 15, 2013. | Expected volatility is based on historical volatility of the Company’s common stock at the time of grant. The risk-free interest rate is based on the U.S. Treasury yields in effect at the time of grant for periods corresponding with the expected life of the options. For the expected life, the Company is using the simplified method as described in the SEC Staff Accounting Bulletin 107. This method assumes that stock option grants will be exercised based on the average of the vesting periods and the option’s life. | |||||||||||||||||||||
Total stock-based compensation expense for the restricted stock grant was approximately $217,000 for the nine months ended September 30, 2013. For the nine months ended September 30, 2013, approximately $53,000 and approximately $48,000 are included in Selling, General and Administrative expenses and Research and Development expenses, respectively, on the accompanying condensed consolidated statement of operations. The remaining expense related to the restricted stock awards issued to non-employee directors of approximately $116,000 was recorded to offset accrued director’s fees that were incurred prior to September 30, 2013. Any additional stock-based compensation related to non-employee directors will be recorded to stock-based compensation expense. As of September 30, 2013, there was approximately $14,000 of unrecognized compensation expense related to the restricted stock awards, which is expected to be recognized over the next five months. | The total fair value of options vested during the fiscal year ended December 31, 2012 was approximately $506,000. The total fair value of options vested during the fiscal year ended December 31, 2011 was approximately $249,000. | |||||||||||||||||||||
The following table summarizes information about stock options outstanding and exercisable at December 31, 2012: | ||||||||||||||||||||||
Options Outstanding | Options Exercisable | |||||||||||||||||||||
Range of Exercise Price | Number Outstanding as | Weighted Average Remaining | Weighted Average | Number Exercisable as of | Weighted Average | |||||||||||||||||
of December 31, 2012 | Contractual Life in Years | Exercise Price | December 31, 2012 | Exercise Price | ||||||||||||||||||
$0.41 – $2.60 | 2,251,700 | 9.01 | $ | 0.94 | 736,635 | $ | 0.77 | |||||||||||||||
$15.00 – $29.80 | 28,853 | 5.63 | $ | 17.74 | 27,240 | $ | 17.78 | |||||||||||||||
$34.20 – $96.00 | 14,161 | 1.36 | $ | 52.99 | 14,160 | $ | 52.99 | |||||||||||||||
Total Outstanding | 2,294,714 | $ | 1.46 | 778,035 | $ | 2.26 | ||||||||||||||||
The number of new options granted in 2012 and 2011 is 1,547,550 and 702,500 respectively. The weighted-average fair value of options granted in 2012 and 2011 is $1.03 and $0.45, respectively. | ||||||||||||||||||||||
The following table summarizes the option activity for the years ended December 31, 2012 and 2011: | ||||||||||||||||||||||
Shares | Weighted Average Exercise Price | |||||||||||||||||||||
Outstanding at December 31, 2011 | 747,164 | $ | 2.14 | |||||||||||||||||||
Options granted | 1,547,550 | 1.13 | ||||||||||||||||||||
Options exercised | — | — | ||||||||||||||||||||
Options forfeited | — | — | ||||||||||||||||||||
Outstanding at December 31, 2012 | 2,294,714 | 1.46 | ||||||||||||||||||||
Expected to vest at December 31, 2012 | 778,035 | $ | 2.26 | |||||||||||||||||||
Exercisable at December 31, 2012 | 2,206,747 | $ | 1.47 | |||||||||||||||||||
The aggregate intrinsic value of stock options outstanding at December 31, 2012 is $793,000 and the stock options vested or expected to vest is approximately $768,000. A stock option has intrinsic value, at any given time, if and to the extent that the exercise price of such stock option is less than the market price of the underlying common stock at such time. The weighted-average remaining contractual life of options vested or expected to vest is 8.9 years. | ||||||||||||||||||||||
The aggregate intrinsic value of stock options outstanding at December 31, 2011 is $126,000 and the stock options vested or expected to vest is approximately $121,000. A stock option has intrinsic value, at any given time, if and to the extent that the exercise price of such stock option is less than the market price of the underlying common stock at such time. The weighted-average remaining contractual life of options vested or expected to vest is 9.1 years. | ||||||||||||||||||||||
As of December 31, 2012, the total remaining unrecognized compensation cost related to non-vested stock options amounted to $1,074,000 and will be amortized over the weighted-average remaining requisite service period of 3.0 years. | ||||||||||||||||||||||
Warrants | ||||||||||||||||||||||
The following table summarizes certain terms of all of the Company’s outstanding warrants at December 31, 2012 and 2011: | ||||||||||||||||||||||
Total Outstanding Warrants at December 31, 2012 | ||||||||||||||||||||||
Total Common Shares Issuable | ||||||||||||||||||||||
Title of Warrant | Date Issued | Expiry Date | Exercise Price | 2012 | 2011 | |||||||||||||||||
Class D Warrants – Lambda | 11/14/07 | 3/10/16 | $ | 0.4 | 8,806,575 | 8,806,575 | ||||||||||||||||
Class D Warrants – Other | 11/14/07 | 11/14/12 | $ | 0.4 | — | 447,197 | ||||||||||||||||
Placement Agent Warrants | 11/14/07 | 11/14/12 | $ | 0.4 | — | 228,887 | ||||||||||||||||
July 2009 Warrants | 7/24/09 | 7/24/14 | $ | 22.4 | 33,629 | 33,629 | ||||||||||||||||
Shareholder Rights Offering Warrants | 3/10/11 | 3/10/16 | $ | 0.4 | 3,057,190 | 4,153,503 | ||||||||||||||||
March 2011 Lambda Warrants | 3/10/11 | 3/10/16 | $ | 0.4 | 2,782,577 | 2,782,577 | ||||||||||||||||
14,679,971 | 16,452,368 | |||||||||||||||||||||
The weighted average exercise price of the outstanding warrants was $0.45 for December 31, 2012 and 2011. | ||||||||||||||||||||||
Class D Warrants | ||||||||||||||||||||||
The Company issued Class D Warrants in 2007 to purchase an aggregate of 455,628 shares of the Company’s common stock to the Investors upon conversion of the purchased notes. The Company recorded the issuance of the Class D Warrants at their approximate fair market value of $3,763,000. The value of the Class D Warrants was computed using the Black-Scholes option pricing model. Our largest stockholder, Lambda Investors LLC, received Class D Warrants in 2007 to purchase 359,541 shares of the Company’s common stock and Other Investors received Class D Warrants in 2007 to purchase 96,087 shares of the Company’s common stock. A Class D warrant holder elected to exercise 86,150 of the 455,628 Class D Warrants outstanding as of June 2009 pursuant to the cashless exercise provision of the warrant which is described below. See Issuance of Common Stock due to Class D Warrants’ Cashless Exercise Provision. | ||||||||||||||||||||||
Effect of Shareholders’ Rights Offering in 2011 | ||||||||||||||||||||||
The Class D Warrants have full-ratchet anti-dilution provisions that were activated by the Shareholders’ Rights Offering in 2011. Following the closing of the rights offering in 2011, and after giving effect to the anti-dilution provisions, Lambda Investors agreed to surrender for cancellation warrants to purchase 7,372,348 shares of our common stock. In addition, following the closing of the rights offering, Lambda Investors’ existing warrants to purchase 8,806,575 shares that remain outstanding were amended to expire at the same time as the warrants issued in the rights offering, which is March 10, 2016. | ||||||||||||||||||||||
The following table summarizes the Class D outstanding warrants at December 31, 2012 and 2011: | ||||||||||||||||||||||
Lambda Investors | Other Investors | Total Shares | ||||||||||||||||||||
to be issued | ||||||||||||||||||||||
As of December 31, 2010 | 359,541 | 9,937 | 369,478 | |||||||||||||||||||
Anti-dilution ratcheting provision | 15,819,382 | 437,260 | 16,256,642 | |||||||||||||||||||
Surrendered-rights’ offering | -7,372,348 | 0 | -7,372,348 | |||||||||||||||||||
As of December 31, 2011 | 8,806,575 | 447,197 | 9,253,772 | |||||||||||||||||||
Exercised in 2012 | — | -352,034 | -352,034 | |||||||||||||||||||
Expired in 2012 | — | -95,163 | -95,163 | |||||||||||||||||||
As of December 31, 2012 | 8,806,575 | — | 8,806,575 | |||||||||||||||||||
Issuance of Common Stock due to Class D Warrants’ Cashless Exercise Provision | ||||||||||||||||||||||
The Series D warrants have a cashless exercise provision which states, “If, and only if, at the time of exercise pursuant to this Section 1 there is no effective registration statement registering, or no current prospectus available for, the sale of the Warrant Shares to the Holder or the resale of the Warrant Shares by the Holder and the VWAP (as defined below) is greater than the Per Share Exercise Price at the time of exercise, then this Warrant may also be exercised at such time and with respect to such exercise by means of a “cashless exercise” in which the Holder shall be entitled to receive a certificate for the number of Warrant Shares equal to the quotient obtained by dividing (i) the result of (x) the difference of (A) minus (B), multiplied by (y) (C), by (ii) (A), where: | ||||||||||||||||||||||
(A) =he VWAP (as defined below) on the Trading Day (as defined below) immediately preceding the date of such election; | ||||||||||||||||||||||
(B) =he Per Share Exercise Price of this Warrant, as adjusted; and | ||||||||||||||||||||||
(C) =he number of Warrant Shares issuable upon exercise of this Warrant in accordance with the terms of this Warrant by means of a cash exercise rather than a cashless exercise. | ||||||||||||||||||||||
“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted for trading on the New York Stock Exchange, American Stock Exchange, NASDAQ Capital Market, NASDAQ Global Market, NASDAQ Global Select Market or the OTC Bulletin Board, or any successor to any of the foregoing (a “Trading Market”), the daily volume weighted average price of the Common Stock on the Trading Market on which the Common Stock is then listed or quoted for trading as reported by Bloomberg L.P. for such date if such date is a date on which the Trading Market on which the Common Stock is then listed or quoted for trading (a “Trading Day”) or the nearest preceding Trading Date (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time); (b) if the Common Stock is not then listed or quoted for trading on a Trading Market and if prices for the Common Stock are then reported in the “Pink Sheets” published by Pink Sheets, LLC (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported; or (c) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Holder and reasonably acceptable to the Company.” | ||||||||||||||||||||||
The Company did not have an effective registration statement or a current prospectus available for the sale of the warrant shares to the holder or the resale of the warrant shares by the holder and the VWAP (as defined above) was greater than the per share exercise price from June 8, 2009 through August 26, 2009. | ||||||||||||||||||||||
A Class D warrant holder elected to exercise 86,150 of the 455,628 Class D Warrants outstanding as of June 2009 pursuant to the cashless exercise provision of the warrant. As a result, 54,561 shares of common stock were issued to this Class D warrant holder in August 2009. | ||||||||||||||||||||||
Class D warrant holders elected to exercise 352,034 of the outstanding Class D Warrants in 2012. As a result, 190,326 were exercised pursuant to the cashless exercise provision of the warrant. In addition, 161,708 warrants were exercised resulting in proceeds of approximately $65,000. | ||||||||||||||||||||||
The number of shares outstanding in the December 31, 2012 balance sheet and the number of shares outstanding used in the earnings per share calculation for the twelve months ended December 31, 2012 include those shares outstanding as a result of the exercises discussed above. | ||||||||||||||||||||||
Placement Agent Warrants | ||||||||||||||||||||||
The Company issued placement agent warrants in 2007 to purchase an aggregate of 87,819 shares of the Company’s common stock to the Company’s placement agents in connection with their roles in the Company’s fall 2007 financing (“the 2007 Financing”). The Company recorded the issuance of the placement agent warrants at their approximate fair market value of $1,047,000. The value of the placement agent warrants was computed using the Black-Scholes option pricing model. | ||||||||||||||||||||||
Placement Agents elected to exercise 81,335 of the 87,819 Placement Agent Warrants outstanding in June 2009. All elected the Cashless Exercise provision of their warrants. As a result, 36,913 shares of common stock were issued to the Placement Agents in June 2009. | ||||||||||||||||||||||
Effect of Shareholders’ Rights Offering in 2011 | ||||||||||||||||||||||
The Placement Agent Warrants have full-ratchet anti-dilution provisions that were activated by the shareholders’ rights offering in 2011. The outstanding Placement Agent expired on November 12, 2012. | ||||||||||||||||||||||
Issuance of Common Stock due to Placement Agent Warrants’ Cashless Exercise Provision | ||||||||||||||||||||||
National Securities Corporation (“NSC”) and Dinosaur Securities, LLC (“Dinosaur” and together with NSC, the “Placement Agents”) acted as co-placement agents in connection with the 2007 Financing pursuant to an Engagement Letter, dated June 6, 2007 and a Placement Agent Agreement dated September 18, 2007. The Placement Agents received (i) an aggregate cash fee equal to 8% of the face amount of the notes purchased in the 2007 Financing (“the Purchased Notes”) and paid 6.25% to NSC and 1.75% to Dinosaur, and (ii) warrants (“Placement Agent Warrant”) with a term of five years from the date of issuance to purchase 10% of the aggregate number of shares of the Company’s common stock issued upon conversion of the Purchased Notes with an exercise price per share of the Company’s common stock equal to $14.10. The Company issued Placement Agents Warrants to purchase an aggregate of 87,819 shares of the Company’s common stock to the Placement Agent in November 2007 in connection with their roles in the 2007 Financing. | ||||||||||||||||||||||
The Placement Agent Warrants have a cashless exercise provision identical to that in the Series D Warrants. | ||||||||||||||||||||||
The Company did not have an effective registration statement or a current prospectus available for the sale of the warrant shares to the holders or the resale of the warrant shares by the holders and the VWAP (as defined above) was greater than the per share exercise price from June 8 through August 26, 2009. Several Placement Agents elected to exercise the cashless exercise provision of their warrants. | ||||||||||||||||||||||
July 2009 Private Placement | ||||||||||||||||||||||
On July 24, 2009, the Company raised gross proceeds of $1,251,000 through the private placement to eight accredited investors of an aggregate of 67,258 shares of its common stock and warrants to purchase an aggregate of 33,629 shares of its common stock, representing 50% of the shares of common stock purchased by each investor. The Company sold the shares to investors at a price per share equal to $18.60. The warrants have an exercise price of $22.40, are exercisable immediately and will terminate on July 24, 2014. The warrants have no anti-dilution ratcheting provision therefore; they did not increase as a result of the 2011 Shareholders’ Rights Offering. | ||||||||||||||||||||||
2011 Shareholders’ Rights Offering | ||||||||||||||||||||||
On March 10, 2011, Nephros announced the completion of its rights offering and private placement that together resulted in gross proceeds of approximately $3.2 million and net proceeds of approximately $2.3 million to Nephros after deducting the payments to Lambda Investors LLC and after estimated expenses of the rights offering. In the rights offering, Nephros sold 4,964,854 units at $0.40 per unit for gross proceeds of approximately $2.0 million, resulting in the issuance of 4,964,854 shares of common stock and warrants to purchase an aggregate of 4,590,171 shares of common stock. The warrants expire on March 10, 2016 and have an exercise price of $0.40 per share. | ||||||||||||||||||||||
On March 10, 2011, based on the completion of the rights offering, Lambda Investors LLC, the Company’s largest stockholder, purchased in a private placement 3,009,711 units at a per unit purchase price of $0.40 for aggregate gross proceeds of approximately $1.2 million, pursuant to a purchase agreement between Nephros and Lambda Investors LLC. Each unit consisted of one share of common stock and a warrant to purchase 0.924532845 shares of common stock at an exercise price of $0.40 per share for a period of five years following the issue date of the warrant, resulting in Lambda Investors LLC acquiring 3,009,711 shares of common stock and a warrant to purchase 2,782,577 shares of common stock. Net proceeds, after deducting the aggregate of $666,650 in payments due Lambda Investors LLC were approximately $537,000. | ||||||||||||||||||||||
On January 10, 2011, the Company’s stockholders voted to implement a 1:20 reverse stock split of the Company’s common stock. The reverse split became effective on March 11, 2011. All of the share and per share amounts discussed in these financial statements on Form 10-K have been adjusted to reflect the effect of this reverse split. | ||||||||||||||||||||||
Warrants exercised during 2012 and 2011 | ||||||||||||||||||||||
Shareholders exercised 1,096,313 for proceeds of approximately $438,000 and 436,668 warrants for proceeds of approximately $174,000 for the years ended December 31, 2012 and 2011, respectively. | ||||||||||||||||||||||
401k_Plan
401(k) Plan | 12 Months Ended |
Dec. 31, 2012 | |
Compensation and Retirement Disclosure [Abstract] | ' |
401 (k) Plan | ' |
Note 9 — 401(k) Plan | |
The Company has established a 401(k) deferred contribution retirement plan (the “401(k) Plan”) which covers all employees. The 401(k) Plan provides for voluntary employee contributions of up to 15% of annual earnings, as defined. As of January 1, 2004, the Company began matching 100% of the first 3% and 50% of the next 2% of employee earnings to the 401(k) Plan. The Company contributed and expensed $49,000 and $28,000 in 2012 and 2011, respectively. | |
Recovered_Sheet1
Summary Of Significant Accounting Policies (Policies) | 12 Months Ended | |||||||
Dec. 31, 2012 | ||||||||
Accounting Policies [Abstract] | ' | |||||||
Principles of Consolidation and Basis of Presentation | ' | |||||||
Principles of Consolidation and Basis of Presentation | ||||||||
The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, Nephros International Limited. All intercompany accounts and transactions have been eliminated in consolidation. | ||||||||
These financial statements were approved by management and the Board of Directors and are available for issuance as of the date of the audit opinion. Subsequent events have been evaluated through this date. | ||||||||
Use of Estimates in the Preparation of Financial Statements | ' | |||||||
Use of Estimates in the Preparation of Financial Statements | ||||||||
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities, at the date of the financial statements, and the reported amount of revenues and expenses, during the reporting period. Actual results could differ materially from those estimates. | ||||||||
Going Concern and Management’s Response | ' | |||||||
Going Concern and Management’s Response | ||||||||
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company’s recurring losses and difficulty in generating sufficient cash flow to meet its obligations and sustain its operations raise substantial doubt about its ability to continue as a going concern. The Company’s consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. | ||||||||
The Company has incurred significant losses in operations in each quarter since inception. For the years ended December 31, 2012 and 2011, the Company has incurred net losses of $3,262,000 and $2,360,000, respectively. In addition, the Company has not generated positive cash flow from operations for the years ended December 31, 2012 and 2011. To become profitable, the Company must increase revenue substantially and achieve and maintain positive gross and operating margins. If the Company is not able to increase revenue and gross and operating margins sufficiently to achieve profitability, its results of operations and financial condition will be materially and adversely affected. | ||||||||
On June 27, 2011, the Company entered into a License Agreement, effective July 1, 2011, with Bellco S.r.l., as licensee (“Bellco”), an Italy-based supplier of hemodialysis and intensive care products, for the manufacturing, marketing and sale of Nephros’ patented mid-dilution dialysis filters. This Agreement provides the Company with payments of €500,000, €750,000, and €600,000 on July 1, 2011, January 15, 2012 and January 15, 2013, respectively. All payments have been received. Beginning on January 1, 2015 through and including December 31, 2016, Bellco will pay to Nephros a royalty based on the number of units of products sold per year in the territory as follows: for the first 103,000 units sold, €4.50 per unit; thereafter, €4.00 per unit. Anticipated payments from this License Agreement will be a positive source of cash flow to the Company. | ||||||||
On February 4, 2013, the Company issued a senior secured note to Lambda Investors LLC in the principal amount of $1.3 million. For a more detailed discussion of the terms of the senior secured note, see Note 12, Subsequent Events. | ||||||||
There can be no assurance that the Company’s future cash flow will be sufficient to meet its obligations and commitments. If the Company is unable to generate sufficient cash flow from operations in the future to service its commitments the Company will be required to adopt alternatives, such as seeking to raise debt or equity capital, curtailing its planned activities or ceasing its operations. There can be no assurance that any such actions could be effected on a timely basis or on satisfactory terms or at all, or that these actions would enable the Company to continue to satisfy its capital requirements. | ||||||||
Cash and Cash Equivalents | ' | |||||||
Cash and Cash Equivalents | ||||||||
The Company invests its excess cash in bank deposits and money market accounts. The Company considers all highly liquid investments purchased with original maturities of three months or less from the date of purchase to be cash equivalents. Cash equivalents are carried at fair value, which approximate cost, and primarily consist of money market funds maintained at major U.S. financial institutions. | ||||||||
Accounts Receivable | ' | |||||||
Accounts Receivable | ||||||||
The Company provides credit terms to customers in connection with purchases of the Company’s products. Management periodically reviews customer account activity in order to assess the adequacy of the allowances provided for potential collection issues and returns. Factors considered include economic conditions, each customer’s payment and return history and credit worthiness. Adjustments, if any, are made to reserve balances following the completion of these reviews to reflect management’s best estimate of potential losses. There were no allowances for doubtful accounts at December 31, 2012 or 2011. There was no allowance for sales returns at December 31, 2012 or 2011. There were no write offs of accounts receivable to bad debt expense during 2012 or 2011. | ||||||||
Inventory | ' | |||||||
Inventory | ||||||||
The Company engages third parties to manufacture and package inventory held for sale, takes title to certain inventory once manufactured, and warehouses such goods until packaged for final distribution and sale. Inventory consists of finished goods and raw materials (fiber) held at the manufacturers’ facilities, and are valued at the lower of cost or market using the first-in, first-out method. The Company’s inventory reserve requirements are based on factors including the products’ expiration date and estimates for the future sales of the product. If estimated sales levels do not materialize, the Company will make adjustments to its assumptions for inventory reserve requirements. | ||||||||
Patents | ' | |||||||
Patents | ||||||||
The Company has filed numerous patent applications with the United States Patent and Trademark Office and in foreign countries. All costs and direct expenses incurred in connection with patent applications have been expensed as incurred. | ||||||||
Property and Equipment, net | ' | |||||||
Property and Equipment, net | ||||||||
Property and equipment, net is stated at cost less accumulated depreciation. These assets are depreciated over their estimated useful lives of three to seven years using the straight line method. | ||||||||
Impairment for Long-Lived Assets | ' | |||||||
Impairment for Long-Lived Assets | ||||||||
The Company adheres to Accounting Standards Codification (“ASC”) Topic 360 and periodically evaluates whether current facts or circumstances indicate that the carrying value of its depreciable assets to be held and used may be recoverable. If such circumstances are determined to exist, an estimate of undiscounted future cash flows produced by the long-lived assets, or the appropriate grouping of assets, is compared to the carrying value to determine whether impairment exists. If an asset is determined to be impaired, the loss is measured based on the difference between the asset’s fair value and its carrying value. An estimate of the asset’s fair value is based on quoted market prices in active markets, if available. If quoted market prices are not available, the estimate of fair value is based on various valuation techniques, including a discounted value of estimated future cash flows. The Company reports an asset to be disposed of at the lower of its carrying value or its estimated net realizable market value. There were no impairment losses for long-lived assets recorded for the years ended December 31, 2012 and December 31, 2011. | ||||||||
Fair Value of Financial Instruments | ' | |||||||
Fair Value of Financial Instruments | ||||||||
The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximate fair value due to the short-term maturity of these instruments. | ||||||||
Revenue Recognition | ' | |||||||
Revenue Recognition | ||||||||
Revenue is recognized in accordance with ASC Topic 605. Four basic criteria must be met before revenue can be recognized: (i) persuasive evidence of an arrangement exists; (ii) delivery has occurred or services have been rendered; (iii) the fee is fixed or determinable; and (iv) collectability is reasonably assured. | ||||||||
The Company recognizes revenue related to product sales when delivery is confirmed by its external logistics provider and the other criteria of ASC Topic 605 are met. Product revenue is recorded net of returns and allowances. All costs and duties relating to delivery are absorbed by Nephros. All shipments are currently received directly by the Company’s customers. | ||||||||
Deferred revenue is approximately $1,414,000 and $2,094,000 on the accompanying consolidated balance sheet as of December 31, 2012 and 2011, respectively, and is related to the License Agreement with Bellco. The Company has recognized approximately $1,045,000 of revenue related to this license agreement to date, including approximately $680,000 for the year ended December 31, 2012, resulting in $1,414,000 being deferred over the remainder of the expected obligation period. The Company amortizes the deferred revenue monthly over the expected obligation period which ends on December 31, 2014. This will result in expected recognized revenue of approximately $707,000 in each of the years ending December 31, 2013 and 2014. | ||||||||
The Company received cash payments of approximately $709,000 in July 2011 and $951,000 in January 2012. The final guaranteed fixed payment of approximately $791,000 was received in January 2013 and is included in accounts receivables on the accompanying December 31, 2012 consolidated balance sheet. | ||||||||
Shipping and Handling Costs | ' | |||||||
Shipping and Handling Costs | ||||||||
Shipping and handling costs are recorded as cost of goods sold and are approximately $33,000 and $26,000 for the years ended December 31, 2012 and 2011, respectively. | ||||||||
Research and Development Costs | ' | |||||||
Research and Development Costs | ||||||||
Research and development costs are expensed as incurred. | ||||||||
Stock-Based Compensation | ' | |||||||
Stock-Based Compensation | ||||||||
The Company accounts for stock-based compensation in accordance with ASC Topic 718 by recognizing the fair value of stock-based compensation in the statement of operations. The fair value of the Company’s stock option awards are estimated using a Black-Scholes option valuation model. This model requires the input of highly subjective assumptions and elections including expected stock price volatility and the estimated life of each award. In addition, the calculation of compensation costs requires that the Company estimate the number of awards that will be forfeited during the vesting period. The fair value of stock-based awards is amortized over the vesting period of the award. For stock-based awards that vest based on performance conditions (e.g. achievement of certain milestones), expense is recognized when it is probable that the condition will be met. | ||||||||
Amortization of Debt Issuance Costs | ' | |||||||
Amortization of Debt Issuance Costs | ||||||||
The Company accounts for debt issuance costs in accordance with ASC 835, which requires that these costs be reported in the balance sheet as deferred charges and amortized over the term of the associated debt. Amortization of debt issuance costs of $40,000 for the year ended December 31, 2011 are associated with the senior secured note issued to Lambda Investors LLC. These capitalized costs were fully amortized by the first quarter of 2011. There were no debt issuance costs for the year ended December 31, 2012. | ||||||||
Other Income | ' | |||||||
Other Income | ||||||||
Other income in the amount of approximately $69,000 for the year ended December 31, 2012 was primarily due to approximately $55,000 arising from the sale of fully depreciated manufacturing equipment sold to Medica in October 2012. The remaining approximately $14,000 is a result of a combination of adjustments to liabilities and foreign currency losses. | ||||||||
Other expense in the amount of approximately $2,000 for the year ended December 31, 2011 was due to foreign currency loss on invoices paid to an international supplier. | ||||||||
Income Taxes | ' | |||||||
Income Taxes | ||||||||
The Company accounts for income taxes in accordance with ASC Topic 740, which requires accounting for deferred income taxes under the asset and liability method. Deferred income taxes are recognized for the tax consequences of temporary differences by applying enacted statutory tax rates applicable in future years to differences between the financial statement carrying amounts and the tax basis of existing assets and liabilities. | ||||||||
For financial reporting purposes, the Company has incurred a loss in each period since its inception. Based on available objective evidence, including the Company’s history of losses, management believes it is more likely than not that the net deferred tax assets will not be fully realizable. Accordingly, the Company provided for a full valuation allowance against its net deferred tax assets at December 31, 2012 and 2011. | ||||||||
ASC Topic 740 prescribes, among other things, a recognition threshold and measurement attributes for the financial statement recognition and measurement of uncertain tax positions taken or expected to be taken in a company’s income tax return. ASC 740 utilizes a two-step approach for evaluating uncertain tax positions. Step one, or recognition, requires a company to determine if the weight of available evidence indicates a tax position is more likely than not to be sustained upon audit, including resolution of related appeals or litigation processes, if any. Step two, or measurement, is based on the largest amount of benefit, which is more likely than not to be realized on settlement with the taxing authority. The Company is subject to income tax examinations by major taxing authorities for all tax years subsequent to 2008. The adoption of the provisions of ASC 740 did not have a material impact on the Company’s consolidated financial statements. During the years ended December 31, 2012 and 2011, the Company recognized no adjustments for uncertain tax positions. However, management’s conclusions regarding this policy may be subject to review and adjustment at a later date based on factors including, but not limited to, on-going analyses of and changes to tax laws, regulation and interpretations, thereof. | ||||||||
Loss per Common Share | ' | |||||||
Loss per Common Share | ||||||||
In accordance with ACS 260-10, net loss per common share amounts (“basic EPS”) are computed by dividing net loss attributable to common stockholders by the weighted-average number of common shares outstanding and excluding any potential dilution. Net loss per common share amounts assuming dilution (“diluted EPS”) is generally computed by reflecting potential dilution from conversion of convertible securities and the exercise of stock options and warrants. The following securities have been excluded from the dilutive per share computation as they are antidilutive. | ||||||||
2012 | 2011 | |||||||
Stock options | 2,294,714 | 747,164 | ||||||
Warrants | 14,679,971 | 16,452,368 | ||||||
Foreign Currency Translation | ' | |||||||
Foreign Currency Translation | ||||||||
Foreign currency translation is recognized in accordance with ASC Topic 830. The functional currency of Nephros International Limited is the Euro and its translation gains and losses are included in accumulated other comprehensive income. The balance sheet is translated at the year-end rate. The statement of operations is translated at the weighted average rate for the year. | ||||||||
Comprehensive Income (Loss) | ' | |||||||
Comprehensive Income (Loss) | ||||||||
Comprehensive income (loss), as defined in ASC 220, is the total of net income (loss) and all other non-owner changes in equity (or other comprehensive income (loss)) such as foreign currency translation adjustments. For the years ended December 31, 2012 and 2011, the comprehensive loss was approximately $3,235,000 and $2,333,000, respectively. | ||||||||
Recently Adopted Accounting Pronouncements | ' | |||||||
Recently Adopted Accounting Pronouncements | ||||||||
In December 2011, the FASB issued an update on comprehensive income, which pertains to the deferral of the effective date for amendments to the presentation of reclassification of items out of accumulated other comprehensive income in a previous accounting standard update that pertained to the presentation of comprehensive income. The update defers the presentation 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. All other requirements the previous accounting standard on the presentation of comprehensive income, issued in June 2011, are not affected. The previous presentation related comprehensive income standard requires entities to report components of comprehensive income in either a continuous statement of comprehensive income or two separate but consecutive statements. Under the continuous statement approach, the statement would include the components and total of net income, the components and total of other comprehensive income and the total of comprehensive income. Under the two statement approach, the first statement would include the components and total of net income and the second statement would include the components and total of other comprehensive income and the total of comprehensive income. It does not change the items that must be reported in other comprehensive income and it is effective retrospectively for interim and annual periods beginning after December 15, 2011, with early adoption permitted. The Company adopted this guidance as of January 1, 2012 and since this relates to presentation only, the adoption of this guidance did not have any other effect on the Company’s consolidated financial statements. | ||||||||
Concentration_of_Credit_Risk_T
Concentration of Credit Risk (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2013 | |||||||||
Sales Revenue [Member] | ' | ||||||||
Schedules Of Concentration Of Risk, By Risk Factor | ' | ||||||||
For the nine months ended September 30, 2013 and 2012, the following customers accounted for the following percentages of the Company’s sales, respectively. | |||||||||
Customer | 2013 | 2012 | |||||||
A | 31 | % | 18 | % | |||||
B | 36 | % | 36 | % | |||||
C | 16 | % | 15 | % | |||||
Accounts Receivable [Member] | ' | ||||||||
Schedules Of Concentration Of Risk, By Risk Factor | ' | ||||||||
As of September 30, 2013 and December 31, 2012, the following customers accounted for the following percentages of the Company’s accounts receivable, respectively. | |||||||||
Customer | 2013 | 2012 | |||||||
A | 57 | % | 4 | % | |||||
B | 31 | % | 2 | % | |||||
C | - | % | 85 | % | |||||
StockBased_Compensation_Tables
Stock-Based Compensation (Tables) | 9 Months Ended | ||||
Sep. 30, 2013 | |||||
Stock-Based Compensation [Abstract] | ' | ||||
Schedule Of Share-Based Payment Award, Employee Stock Purchase Plan, Valuation Assumptions | ' | ||||
The following assumptions were used for options granted for the nine months ended September 30, 2013: | |||||
Nine Months | |||||
Ended | |||||
September 30, | |||||
2013 | |||||
Risk-free interest rate | 1.09-1.22 | % | |||
Volatility | 127.46 - 131.79 | % | |||
Expected dividend yield | 0 | % | |||
Expected term | 5.75 - 6.25 yrs | ||||
Loss_per_Common_Share_Tables
Loss per Common Share (Tables) | 9 Months Ended | 12 Months Ended | ||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | |||||||||||||||
Loss Per Common Share [Abstract] | ' | ' | ||||||||||||||
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | ' | ' | ||||||||||||||
The following potentially dilutive securities have been excluded from the computations of diluted weighted-average shares outstanding as they would be anti-dilutive: | The following securities have been excluded from the dilutive per share computation as they are antidilutive. | |||||||||||||||
Nine Months Ended | 2012 | 2011 | ||||||||||||||
September 30, | Stock options | 2,294,714 | 747,164 | |||||||||||||
2013 | 2012 | Warrants | 14,679,971 | 16,452,368 | ||||||||||||
Shares underlying warrants outstanding | 13,888,262 | 15,325,943 | ||||||||||||||
Shares underlying options outstanding | 2,380,644 | 2,294,714 | ||||||||||||||
Unvested restricted stock | 150,423 | - | ||||||||||||||
Inventory_net_Tables
Inventory, net (Tables) | 9 Months Ended | 12 Months Ended | ||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | |||||||||||||||
Inventory Disclosure [Abstract] | ' | ' | ||||||||||||||
Schedule Of Inventory, Current | ' | ' | ||||||||||||||
Inventory is stated at the lower of cost or market using the first-in first-out method and consists entirely of finished goods. The Company’s inventory as of September 30, 2013 and December 31, 2012 was approximately as follows: | The Company’s inventory components as of December 31, 2012 and 2011 were as follows: | |||||||||||||||
Unaudited | Audited | December 31, | ||||||||||||||
September 30, | December 31, | 2012 | 2011 | |||||||||||||
2013 | 2012 | Total Gross Inventory, Finished Goods | $ | 581,000 | $ | 465,000 | ||||||||||
Total Gross Inventory, Finished Goods | $ | 565,000 | $ | 581,000 | Less: Inventory reserve | -269,000 | -218,000 | |||||||||
Less: Inventory reserve | -274,000 | -269,000 | Total Inventory | $ | 312,000 | $ | 247,000 | |||||||||
Total Inventory | $ | 291,000 | $ | 312,000 | ||||||||||||
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Tables) | 9 Months Ended | 12 Months Ended | ||||||||||||||
Sep. 30, 2013 | Dec. 31, 2012 | |||||||||||||||
Accounting Policies [Abstract] | ' | ' | ||||||||||||||
Schedule Of Securities Excluded From Dilutive Per Share Computation | ' | ' | ||||||||||||||
The following potentially dilutive securities have been excluded from the computations of diluted weighted-average shares outstanding as they would be anti-dilutive: | The following securities have been excluded from the dilutive per share computation as they are antidilutive. | |||||||||||||||
Nine Months Ended | 2012 | 2011 | ||||||||||||||
September 30, | Stock options | 2,294,714 | 747,164 | |||||||||||||
2013 | 2012 | Warrants | 14,679,971 | 16,452,368 | ||||||||||||
Shares underlying warrants outstanding | 13,888,262 | 15,325,943 | ||||||||||||||
Shares underlying options outstanding | 2,380,644 | 2,294,714 | ||||||||||||||
Unvested restricted stock | 150,423 | - | ||||||||||||||
Prepaid_Expenses_and_Other_Cur1
Prepaid Expenses and Other Current Assets (Tables) | 12 Months Ended | |||||||
Dec. 31, 2012 | ||||||||
Other Assets [Abstract] | ' | |||||||
Schedule Of Prepaid Expenses And Other Current Assets | ' | |||||||
Prepaid expenses and other current assets as of December 31, 2012 and 2011 were as follows: | ||||||||
December 31, | ||||||||
2012 | 2011 | |||||||
Prepaid insurance premiums | $ | 78,000 | $ | 88,000 | ||||
Security deposit | 21,000 | 21,000 | ||||||
Other | 10,000 | 4,000 | ||||||
Prepaid expenses and other current assets | $ | 109,000 | $ | 113,000 | ||||
Property_and_Equipment_Net_Tab
Property and Equipment, Net (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2012 | |||||||||||
Property, Plant and Equipment [Abstract] | ' | ||||||||||
Property and Equipment, Net | ' | ||||||||||
Property and equipment as of December 31, 2012 and 2011 was as follows: | |||||||||||
December 31, | |||||||||||
Life | 2012 | 2011 | |||||||||
Manufacturing equipment | 3 – 5 years | $ | 602,000 | $ | 1,980,000 | ||||||
Research equipment | 5 years | 37,000 | 37,000 | ||||||||
Computer equipment | 3 – 4 years | 59,000 | 59,000 | ||||||||
Furniture and fixtures | 7 years | 39,000 | 39,000 | ||||||||
Property and equipment, gross | 737,000 | 2,115,000 | |||||||||
Less: accumulated depreciation | 721,000 | 2,098,000 | |||||||||
Property and equipment, net | $ | 16,000 | $ | 17,000 | |||||||
Accrued_Expenses_Tables
Accrued Expenses (Tables) | 12 Months Ended | |||||||
Dec. 31, 2012 | ||||||||
Payables and Accruals [Abstract] | ' | |||||||
Schedule Of Accrued Expenses | ' | |||||||
Accrued expenses as of December 31, 2012 and 2011 were as follows: | ||||||||
December 31, | ||||||||
2012 | 2011 | |||||||
Accrued Legal | $ | 90,000 | $ | 52,000 | ||||
Accrued Directors’ Compensation | 77,000 | 30,000 | ||||||
Accrued Management Bonus | — | 79,000 | ||||||
Accrued Accounting | — | 15,000 | ||||||
Accrued Travel | 84,000 | — | ||||||
Accrued Other | 70,000 | 19,000 | ||||||
Accrued Expenses | $ | 321,000 | $ | 195,000 | ||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2012 | |||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||
Reconciliation Of Income Tax Provision At Statutory Rate | ' | ||||||||
A reconciliation of the income tax provision computed at the statutory tax rate to the Company’s effective tax rate is as follows: | |||||||||
2012 | 2011 | ||||||||
U.S. federal statutory rate | 35 | % | 35 | % | |||||
State & local taxes | 5.36 | % | -0.06 | % | |||||
Tax on foreign operations | -0.78 | % | -1.27 | % | |||||
State research and development credits | 1.06 | % | 1.11 | % | |||||
Other | -2.29 | % | -3.07 | % | |||||
Valuation allowance | -38.35 | % | -31.71 | % | |||||
Effective tax rate | — | — | |||||||
Significant Components Of Deferred Tax Assets | ' | ||||||||
Significant components of the Company’s deferred tax assets as of December 31, 2012 and 2011 are as follows: | |||||||||
2012 | 2011 | ||||||||
Deferred tax assets: | |||||||||
Net operating loss carry forwards | $ | 25,721,000 | $ | 24,714,000 | |||||
Research and development credits | 1,054,000 | 1,019,000 | |||||||
Nonqualified stock option compensation expense | 1,701,000 | 1,586,000 | |||||||
Other temporary book – tax differences | 441,000 | 331,000 | |||||||
Total deferred tax assets | 28,917,000 | 27,650,000 | |||||||
Valuation allowance for deferred tax assets | -28,917,000 | -27,650,000 | |||||||
Net deferred tax assets | $ | — | $ | — | |||||
Stock_Plans_ShareBased_Payment1
Stock Plans, Share-Based Payments and Warrants (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2012 | |||||||||||||||||
Schedule Of Fair Value Assumptions | ' | ||||||||||||||||
Option Pricing Assumptions | |||||||||||||||||
Grant Year | 2012 | 2011 | |||||||||||||||
Stock Price Volatility | 123.48 – 128.54 | % | 121.96 – 130.06 | % | |||||||||||||
Risk-Free Interest Rates | 0.93 – 1.32 | % | 1.08 – 2.42 | % | |||||||||||||
Expected Life (in years) | 5.75 – 6.25 | 5.00 – 5.50 | |||||||||||||||
Expected Dividend Yield | 0 | % | 0 | % | |||||||||||||
Summary Of Information About Stock Options Outstanding And Exercisable | ' | ||||||||||||||||
Options Outstanding | Options Exercisable | ||||||||||||||||
Range of Exercise Price | Number Outstanding as | Weighted Average Remaining | Weighted Average | Number Exercisable as of | Weighted Average | ||||||||||||
of December 31, 2012 | Contractual Life in Years | Exercise Price | December 31, 2012 | Exercise Price | |||||||||||||
$0.41 – $2.60 | 2,251,700 | 9.01 | $ | 0.94 | 736,635 | $ | 0.77 | ||||||||||
$15.00 – $29.80 | 28,853 | 5.63 | $ | 17.74 | 27,240 | $ | 17.78 | ||||||||||
$34.20 – $96.00 | 14,161 | 1.36 | $ | 52.99 | 14,160 | $ | 52.99 | ||||||||||
Total Outstanding | 2,294,714 | $ | 1.46 | 778,035 | $ | 2.26 | |||||||||||
Summary Of Option Activity | ' | ||||||||||||||||
Shares | Weighted Average Exercise Price | ||||||||||||||||
Outstanding at December 31, 2011 | 747,164 | $ | 2.14 | ||||||||||||||
Options granted | 1,547,550 | 1.13 | |||||||||||||||
Options exercised | — | — | |||||||||||||||
Options forfeited | — | — | |||||||||||||||
Outstanding at December 31, 2012 | 2,294,714 | 1.46 | |||||||||||||||
Expected to vest at December 31, 2012 | 778,035 | $ | 2.26 | ||||||||||||||
Exercisable at December 31, 2012 | 2,206,747 | $ | 1.47 | ||||||||||||||
Summary Of Terms Of Outstanding Warrants | ' | ||||||||||||||||
Total Common Shares Issuable | |||||||||||||||||
Title of Warrant | Date Issued | Expiry Date | Exercise Price | 2012 | 2011 | ||||||||||||
Class D Warrants – Lambda | 11/14/07 | 3/10/16 | $ | 0.4 | 8,806,575 | 8,806,575 | |||||||||||
Class D Warrants – Other | 11/14/07 | 11/14/12 | $ | 0.4 | — | 447,197 | |||||||||||
Placement Agent Warrants | 11/14/07 | 11/14/12 | $ | 0.4 | — | 228,887 | |||||||||||
July 2009 Warrants | 7/24/09 | 7/24/14 | $ | 22.4 | 33,629 | 33,629 | |||||||||||
Shareholder Rights Offering Warrants | 3/10/11 | 3/10/16 | $ | 0.4 | 3,057,190 | 4,153,503 | |||||||||||
March 2011 Lambda Warrants | 3/10/11 | 3/10/16 | $ | 0.4 | 2,782,577 | 2,782,577 | |||||||||||
14,679,971 | 16,452,368 | ||||||||||||||||
Class D Warrants [Member] | ' | ||||||||||||||||
Summary Of Terms Of Outstanding Warrants | ' | ||||||||||||||||
Lambda Investors | Other Investors | Total Shares | |||||||||||||||
to be issued | |||||||||||||||||
As of December 31, 2010 | 359,541 | 9,937 | 369,478 | ||||||||||||||
Anti-dilution ratcheting provision | 15,819,382 | 437,260 | 16,256,642 | ||||||||||||||
Surrendered-rights’ offering | -7,372,348 | 0 | -7,372,348 | ||||||||||||||
As of December 31, 2011 | 8,806,575 | 447,197 | 9,253,772 | ||||||||||||||
Exercised in 2012 | — | -352,034 | -352,034 | ||||||||||||||
Expired in 2012 | — | -95,163 | -95,163 | ||||||||||||||
As of December 31, 2012 | 8,806,575 | — | 8,806,575 | ||||||||||||||
Commitments_And_Contingencies_
Commitments And Contingencies (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2012 | |||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | ' | ||||||||||||||||
Contractual Obligations and Commercial Commitments | ' | ||||||||||||||||
The following tables summarize our approximate minimum contractual obligations and commercial commitments as of December 31, 2012: | |||||||||||||||||
Payments Due in Period | |||||||||||||||||
Total | Within | Years | Years | More than | |||||||||||||
1 Year | 1– 3 | 4 – 5 | 5 Years | ||||||||||||||
Leases | $ | 113,000 | $ | 99,000 | $ | 14,000 | $ | — | $ | — | |||||||
Employment Contracts | 1,402,000 | 550,000 | 852,000 | — | — | ||||||||||||
Total | $ | 1,515,000 | $ | 649,000 | $ | 866,000 | $ | — | $ | — | |||||||
Basis_of_Presentation_and_Goin1
Basis of Presentation and Going Concern (Details Textual) (USD $) | 0 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | 1 Months Ended | 0 Months Ended | 0 Months Ended | ||||||||||||||
Mar. 04, 2013 | 22-May-13 | Apr. 17, 2013 | Feb. 28, 2013 | Mar. 31, 2011 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | Feb. 04, 2013 | Mar. 10, 2011 | Nov. 12, 2013 | Feb. 04, 2013 | Mar. 31, 2011 | Oct. 30, 2013 | Apr. 17, 2013 | Feb. 04, 2013 | Nov. 12, 2013 | Nov. 12, 2013 | Feb. 04, 2013 | |
Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Warrant [Member] | Lambda Investors LLC [Member] | Lambda Investors LLC [Member] | Lambda Investors LLC [Member] | Lambda Investors LLC [Member] | ||||||||||||||
Product Recall [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | |||||||||||||||||||
Senior Notes [Member] | Senior Notes [Member] | |||||||||||||||||||||
Basis Of Presentation And Going Concern [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net loss | ' | ' | ' | ' | ' | ($611,000) | ($853,000) | ($2,523,000) | ($2,164,000) | ($3,262,000) | ($2,360,000) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Offering price per share | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.40 | ' | ' | ' | ' | $0.60 | ' | ' | ' | ' |
Senior notes issued | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,300,000 | ' | ' | 1,300,000 | ' | ' | ' | ' | ' | ' | ' |
Proceeds from issuance of common stock | 3,000,000 | 3,000,000 | ' | ' | 206,000 | ' | ' | 2,771,000 | 0 | 0 | 3,189,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 12.00% | ' | ' | ' | ' | ' | ' | ' | ' | 12.00% | 12.00% |
Maturity date | ' | ' | ' | 4-Aug-13 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 12-May-14 | 4-Aug-13 |
Debt instrument rights offering description | ' | ' | 17-May-13 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of shares available for purchase per each subscription | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.18776 | ' | ' | ' | ' |
Sourcing and transaction fee percentage | ' | 8.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Sourcing and transaction fee | ' | 104,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Legal fees and other expenses | ' | 100,000 | ' | ' | ' | ' | ' | ' | ' | 50,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Proceeds from issuance of secured debt | ' | 1,400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Repayments of senior debt | ' | 1,300,000 | ' | ' | ' | ' | ' | 1,300,000 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Accrued interest | ' | 46,800 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Sales Revenue, Goods, Gross | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 127,000 | ' | ' | ' | ' | ' |
Cost of Goods Sold, Total | ' | ' | ' | ' | ' | 189,000 | 191,000 | 610,000 | 448,000 | 737,000 | 1,346,000 | ' | ' | ' | ' | ' | 27,000 | ' | ' | ' | ' | ' |
Debt Instrument, Face Amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,500,000 | 1.3 |
Debt Instrument, Interest Rate, Increase (Decrease) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 16.00% | 16.00% |
Rights Offering Of Common Stock ,Shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,750,000 | 3 | ' | ' | ' | ' | ' | ' | ' |
Offering Price Per share | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.30 | $0.60 | ' | ' | ' | ' | ' | ' | ' |
Transaction Fees | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 120,000 | 104,000 |
Percentage Of Sourcing Fees | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8.00% | 8.00% |
Legal Fees | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $50,000 | ' | $75,000 | $50,000 |
Class of Warrant or Right, Exercise Price of Warrants or Rights | ' | ' | ' | ' | 0.4 | ' | ' | ' | ' | 0.45 | 0.45 | ' | ' | ' | ' | 0.3 | ' | ' | ' | 0.4 | ' | ' |
Concentration_of_Credit_Risk_D
Concentration of Credit Risk (Details) | 12 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | 9 Months Ended | 12 Months Ended | |||||||
Dec. 31, 2012 | Dec. 31, 2011 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | |
Sales Revenue [Member] | Sales Revenue [Member] | Sales Revenue [Member] | Sales Revenue [Member] | Sales Revenue [Member] | Sales Revenue [Member] | Sales Revenue [Member] | Sales Revenue [Member] | Accounts Receivable [Member] | Accounts Receivable [Member] | Accounts Receivable [Member] | Accounts Receivable [Member] | Accounts Receivable [Member] | Accounts Receivable [Member] | Accounts Receivable [Member] | Accounts Receivable [Member] | |
Customer A [Member] | Customer A [Member] | Customer B [Member] | Customer B [Member] | Customer C [Member] | Customer C [Member] | Customer A [Member] | Customer A [Member] | Customer B [Member] | Customer B [Member] | Customer C [Member] | Customer C [Member] | |||||
Concentration Of Credit Risk [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Concentration Risk, Percentage | 79.00% | 83.00% | 31.00% | 18.00% | 36.00% | 36.00% | 16.00% | 15.00% | 98.00% | 89.00% | 57.00% | 4.00% | 31.00% | 2.00% | 0.00% | 85.00% |
Number Of Major Customers | 4 | 4 | ' | ' | ' | ' | ' | ' | 4 | 4 | ' | ' | ' | ' | ' | ' |
Revenue_Recognition_Details_Te
Revenue Recognition (Details Textual) (USD $) | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2014 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Subsequent Event [Member] | Subsequent Event [Member] | License Agreement [Member] | License Agreement [Member] | License Agreement [Member] | License Agreement [Member] | ||
Bellco [Member] | Bellco [Member] | Bellco [Member] | |||||
Deferred Revenue Arrangement [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Deferred revenue | $1,414,000 | ' | ' | $878,000 | $1,580,000 | $1,414,000 | $2,094,000 |
Revenue recognized | ' | $176,000 | $702,000 | ' | $535,000 | ' | ' |
StockBased_Compensation_Detail
Stock-Based Compensation (Details Textual) (USD $) | 1 Months Ended | 9 Months Ended | 12 Months Ended | 0 Months Ended | 9 Months Ended | ||||||||
Aug. 20, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | Jun. 15, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | |
Mr. Kochanski [Member] | Mr. Kochanski [Member] | Selling, General and Administrative Expenses [Member] | Selling, General and Administrative Expenses [Member] | Selling, General and Administrative Expenses [Member] | Research and Development Expense [Member] | Research and Development Expense [Member] | Research and Development Expense [Member] | ||||||
Restricted Stock [Member] | Employee Stock Option [Member] | Employee Stock Option [Member] | Restricted Stock [Member] | Employee Stock Option [Member] | Employee Stock Option [Member] | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock options granted in period | ' | 176,875 | ' | 1,547,550 | 702,500 | ' | 25,000 | ' | ' | ' | ' | ' | ' |
Fair value of stock-based awards granted during period, approximately | ' | $96,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Noncash stock-based compensation, including stock options and restricted stock | ' | 401,000 | 335,000 | 443,000 | 256,000 | ' | ' | 53,000 | 275,000 | 314,000 | 48,000 | 25,000 | 21,000 |
Unrecognized share based compensation cost | ' | 832,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted average remaining requisite service period for unrecognized compensation cost, years | ' | '2 years 6 months | ' | '3 years | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Expected recognition of unrecognized compensation costs due in current year | ' | 11.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Expected recognition of unrecognized compensation costs due in one year | ' | 40.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Expected recognition of unrecognized compensation costs due in two years | ' | 38.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Expected recognition of unrecognized compensation costs due in three years | ' | 10.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Expected Recognition Of Unrecognized Compensation Costs Due In Four Years | ' | 1.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock issued during period, shares, restricted stock award, gross | 28,329 | 339,028 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Employee service share-based compensation, non vested awards, total compensation cost not yet recognized, share-based awards other than options | ' | 14,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period | ' | ' | ' | ' | ' | 90,945 | ' | ' | ' | ' | ' | ' | ' |
Stock Issued During Period, Shares, Restricted Stock Award, Forfeited | ' | ' | ' | ' | ' | 45,929 | ' | ' | ' | ' | ' | ' | ' |
Restricted Stock Award, Forfeitures, Dividends | ' | 43,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share-based Compensation, Total | ' | 217,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Restricted stock issued to settle liability | ' | 116,000 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share-based compensation expense | ' | $300,000 | $335,000 | $443,000 | $256,000 | ' | ' | ' | ' | ' | ' | ' | ' |
StockBased_Compensation_Detail1
Stock-Based Compensation (Details) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Maximum [Member] | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Risk-free interest rate | 1.22% | ' | ' |
Volatility | 131.79% | ' | ' |
Expected term | '6 years 3 months | '6 years 3 months | '5 years 6 months |
Minimum [Member] | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Risk-free interest rate | 1.09% | ' | ' |
Volatility | 127.46% | ' | ' |
Expected term | '5 years 9 months | '5 years 9 months | '5 years |
Warrants_Details_Textual
Warrants (Details Textual) (USD $) | 0 Months Ended | 1 Months Ended | 9 Months Ended | 12 Months Ended | |||
Mar. 04, 2013 | 22-May-13 | Mar. 31, 2011 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | |
Warrants [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Class of warrant or right exercise price of warrants or rights | ' | ' | 0.4 | ' | ' | 0.45 | 0.45 |
Warrants exercised | ' | ' | 14,879,708 | 2,248,222 | ' | ' | ' |
Stock issued during period, shares, new issues | ' | ' | 687,793 | ' | ' | ' | ' |
Proceeds from issuance of common stock | $3,000,000 | $3,000,000 | $206,000 | $2,771,000 | $0 | $0 | $3,189,000 |
Incremental fair value of inducement | ' | ' | ' | 14,000 | ' | ' | ' |
Warrant [Member] | ' | ' | ' | ' | ' | ' | ' |
Warrants [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Stock issued during period, shares, new issues | ' | ' | ' | 103,916 | ' | ' | ' |
Rights Offering [Member] | ' | ' | ' | ' | ' | ' | ' |
Warrants [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Proceeds from issuance of common stock | ' | ' | ' | $42,000 | ' | ' | ' |
Amended [Member] | ' | ' | ' | ' | ' | ' | ' |
Warrants [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Class of warrant or right exercise price of warrants or rights | ' | ' | 0.3 | ' | ' | ' | ' |
Comprehensive_Income_Loss_Deta
Comprehensive Income (Loss) (Details Textual) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
In Thousands, unless otherwise specified | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ' | ' | ' | ' | ' | ' |
Comprehensive loss | ($611) | ($836) | ($2,525) | ($2,157) | ($3,235) | ($2,333) |
Loss_per_Common_Share_Details
Loss per Common Share (Details) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | |
Warrant [Member] | ' | ' | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' | ' |
Excluded anti-dilutive stock options and warrants | 13,888,262 | 15,325,943 | 14,679,971 | 16,452,368 |
Employee Stock Option [Member] | ' | ' | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' | ' |
Excluded anti-dilutive stock options and warrants | 2,380,644 | 2,294,714 | ' | ' |
Restricted Stock [Member] | ' | ' | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' | ' |
Excluded anti-dilutive stock options and warrants | 150,423 | 0 | ' | ' |
Inventory_net_Details
Inventory, net (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Inventory [Line Items] | ' | ' | ' |
Total Gross Inventory, Finished Goods | $565,000 | $581,000 | $465,000 |
Less: Inventory reserve | -274,000 | -269,000 | -218,000 |
Total Inventory | $291,000 | $312,000 | $247,000 |
Recovered_Sheet2
Commitments and Contingencies (Details Textual) | 9 Months Ended | 12 Months Ended | 0 Months Ended | 9 Months Ended | 12 Months Ended | 1 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||
Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | Nov. 30, 2012 | Jan. 15, 2013 | Jan. 15, 2012 | Jul. 01, 2011 | Sep. 30, 2013 | Dec. 31, 2012 | 23-May-13 | Jan. 25, 2013 | Apr. 23, 2012 | Sep. 30, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | |
USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | Bellco [Member] | Bellco [Member] | Bellco [Member] | Bellco [Member] | Bellco [Member] | Medica S.p.A [Member] | Medica S.p.A [Member] | Medica S.p.A [Member] | Medica S.p.A [Member] | Medica S.p.A [Member] | Medica S.p.A [Member] | Medica S.p.A [Member] | Mr.Houghton's [Member] | |
EUR (€) | EUR (€) | EUR (€) | EUR (€) | EUR (€) | EUR (€) | USD ($) | EUR (€) | USD ($) | EUR (€) | USD ($) | ||||||||
Commitments And Contingencies [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
License agreement revenue paid year one | ' | ' | ' | ' | ' | ' | ' | € 500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
License agreement revenue paid year two | ' | ' | ' | ' | ' | ' | 750,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
License agreement revenue paid in current year | ' | ' | ' | ' | ' | 600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of units under first tier royalty receivable | ' | ' | ' | ' | ' | ' | ' | ' | 103,000 | 103,000 | ' | ' | ' | ' | ' | ' | ' | ' |
First tier royalty per unit | ' | ' | ' | ' | ' | ' | ' | ' | 4.5 | 4.5 | ' | ' | ' | ' | ' | ' | ' | ' |
Second tier royalty per unit | ' | ' | ' | ' | ' | ' | ' | ' | 4 | 4 | ' | ' | ' | ' | ' | ' | ' | ' |
Minimum quarterly unit sales targets | ' | ' | ' | ' | ' | ' | ' | ' | 15,000 | 15,000 | ' | ' | ' | ' | ' | ' | ' | ' |
License agreement product purchases in year one | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 300,000 | ' | 300,000 | ' |
License agreement product purchases in year two | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 500,000 | ' | 500,000 | ' |
License agreement product purchases in year three | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 750,000 | ' | 750,000 | ' |
License agreement first installment payment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 500,000 | ' | ' | ' | ' | ' |
License agreement second installment payment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,000,000 | ' | ' | ' | ' | ' | ' |
License agreement final installment payment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 400,000 | ' | ' | ' | ' | ' | ' | ' |
License and supply agreement fee payable | 0 | ' | 1,318,000 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total installment payments | ' | ' | 1,978,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
License agreement options to purchase shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 300,000 | ' | ' | ' | ' | ' |
Purchase commitment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 477,000 | ' | 585,000 | ' |
Stock options granted | 176,875 | ' | 1,547,550 | 702,500 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 300,000 | 300,000 | ' |
Fair value of stock options granted to Medica | 0 | 273,000 | 273,000 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 273,000 | ' | 273,000 | ' | ' |
Other assets, net of accumulated amortization | 1,947,000 | ' | 2,109,000 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Accumulated amortization | 303,000 | ' | 142,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amortization of Other Deferred Charges | 162,000 | ' | 142,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amortization expense, remainder of year | 53,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amortization expense, years two and three | 210,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amortization expense, next three years | ' | ' | 208,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Royalty rate | 3.00% | ' | 3.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Employment Agreement term | ' | ' | '4 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Employee Agreement, annual base salary | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 350,000 |
Employee Agreement, discretionary bonus percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 30.00% |
Monthly rent expense | ' | ' | ' | ' | 7,813 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Lease extension term | ' | ' | '1 year | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Future renewed monthly rent expense | ' | ' | 8,399 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Rent expense | ' | ' | $109,000 | $104,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Subsequent_Event_Details_Textu
Subsequent Event (Details Textual) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | 0 Months Ended | 1 Months Ended | 0 Months Ended | ||||||||||||||
22-May-13 | Feb. 28, 2013 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | Feb. 04, 2013 | Mar. 31, 2011 | Mar. 31, 2011 | Feb. 04, 2013 | Feb. 04, 2013 | Nov. 12, 2013 | Feb. 04, 2013 | Mar. 31, 2011 | Dec. 31, 2012 | Oct. 30, 2013 | Nov. 12, 2013 | Nov. 12, 2013 | Feb. 04, 2013 | |
USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | Lambda Investors LLC [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | Subsequent Event [Member] | |||||
USD ($) | EUR (€) | USD ($) | USD ($) | Scenario Forecast [Member] | Product Recall [Member] | Lambda Investors LLC [Member] | Lambda Investors LLC [Member] | Lambda Investors LLC [Member] | |||||||||||||
EUR (€) | USD ($) | Senior Notes [Member] | Senior Notes [Member] | ||||||||||||||||||
USD ($) | USD ($) | ||||||||||||||||||||
Sales Revenue, Goods, Gross | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $127,000 | ' | ' | ' |
Cost of Goods Sold, Total | ' | ' | 189,000 | 191,000 | 610,000 | 448,000 | 737,000 | 1,346,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 27,000 | ' | ' | ' |
Debt Instrument, Face Amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,500,000 | 1.3 |
Debt Instrument, Interest Rate, Stated Percentage | ' | ' | ' | ' | ' | ' | ' | ' | 12.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 12.00% | 12.00% |
Debt Instrument, Maturity Date | ' | 4-Aug-13 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 12-May-14 | 4-Aug-13 |
Debt Instrument, Interest Rate, Increase (Decrease) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 16.00% | 16.00% |
Rights Offering Of Common Stock ,Shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,750,000 | 3 | ' | ' | ' | ' | ' | ' |
Offering Price Per share | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.30 | $0.60 | ' | ' | ' | ' | ' | ' |
Transaction Fees | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 120,000 | 104,000 |
Legal Fees | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50,000 | ' | ' | ' | ' | ' | ' | ' | 75,000 | 50,000 |
Class of Warrant or Right, Exercise Price of Warrants or Rights | ' | ' | ' | ' | ' | ' | 0.45 | 0.45 | ' | 0.4 | 0.4 | ' | ' | ' | ' | 0.3 | ' | ' | 0.4 | ' | ' |
Percentage Of Sourcing Fees | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8.00% | 8.00% |
Legal Fees And Other Expenses | 100,000 | ' | ' | ' | ' | ' | 50,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
License Agreement Second Installment Payment Outstanding | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 400,000 | ' | ' | ' | ' |
License agreement second installment payment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | € 600,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Warrant Extension Term | ' | ' | ' | ' | ' | ' | '1 year | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Organization_and_Nature_of_Ope1
Organization and Nature of Operations (Details Textual) | 12 Months Ended |
Dec. 31, 2012 | |
Organization And Nature Of Operations [Line Items] | ' |
Number of products in development | 2 |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Details Textual) | 0 Months Ended | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | 0 Months Ended | |||||||||||||||||||
Jul. 01, 2011 | Oct. 31, 2012 | Jan. 31, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | Feb. 04, 2013 | Feb. 04, 2013 | Dec. 31, 2011 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Jan. 15, 2013 | Jan. 15, 2012 | Jul. 01, 2011 | Sep. 30, 2013 | Dec. 31, 2012 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | EUR (€) | USD ($) | USD ($) | Subsequent Event [Member] | Lambda Investors [Member] | Scenario Forecast [Member] | Scenario Forecast [Member] | Nonsoftware License Arrangement [Member] | Nonsoftware License Arrangement [Member] | Maximum [Member] | Minimum [Member] | Bellco [Member] | Bellco [Member] | Bellco [Member] | Bellco [Member] | Bellco [Member] | Bellco [Member] | Bellco [Member] | Bellco [Member] | |
USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | EUR (€) | EUR (€) | EUR (€) | Nonsoftware License Arrangement [Member] | Nonsoftware License Arrangement [Member] | Nonsoftware License Arrangement [Member] | ||||||||||||||||
USD ($) | USD ($) | USD ($) | |||||||||||||||||||||||||
Summary of Significant Accounting Policies [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net loss | ' | ' | ' | ($611,000) | ($853,000) | ($2,523,000) | ($2,164,000) | ($3,262,000) | ' | ($2,360,000) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
License agreement revenue paid year one | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 500,000 | ' | ' | ' | ' | ' |
License agreement revenue paid year two | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 750,000 | ' | ' | ' | ' | ' | ' |
License agreement revenue paid in current year | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 600,000 | ' | ' | ' | ' | ' | ' | ' |
Number of units under first tier royalty receivable | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 103,000 | 103,000 | ' | ' | ' |
First tier royalty Per unit price | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4.5 | ' | ' | ' |
Second tier royalty per unit | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4 | 4 | ' | ' | ' |
Senior notes issued | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,300,000 | 1,300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Estimated useful lives | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '7 years | '3 years | ' | ' | ' | ' | ' | ' | ' | ' |
Deferred revenue | ' | ' | ' | ' | ' | ' | ' | 1,414,000 | ' | ' | ' | ' | ' | ' | ' | ' | 878,000 | ' | ' | ' | ' | ' | ' | ' | 1,580,000 | 1,414,000 | 2,094,000 |
Licensing revenues | ' | ' | ' | 176,000 | 166,000 | 535,000 | 509,000 | 680,000 | ' | 365,000 | ' | ' | ' | ' | ' | 1,045,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Recognition of deferred revenue | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 707,000 | 707,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash payments received | 709,000 | ' | 951,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Receivable related to license agreement | ' | ' | ' | ' | ' | ' | ' | 791,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shipping and handling costs | ' | ' | ' | ' | ' | ' | ' | 33,000 | ' | 26,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amortization of debt issuance costs | ' | ' | ' | ' | ' | ' | ' | 0 | ' | 40,000 | ' | ' | 40,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Other income (expense) | ' | ' | ' | 1,000 | 0 | -25,000 | 55,000 | 69,000 | ' | -2,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Proceeds from the sale of manufacturing equipment | ' | 55,000 | ' | ' | ' | ' | ' | 55,000 | 42,500 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Adjustments to liabilities and foreign currency losses | ' | ' | ' | ' | ' | ' | ' | 14,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Comprehensive loss | ' | ' | ' | ($611,000) | ($836,000) | ($2,525,000) | ($2,157,000) | ($3,235,000) | ' | ($2,333,000) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Schedule Of Securities Excluded From Dilutive Per Share Computation) (Details) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | |
Stock options [Member] | ' | ' | ' | ' |
Summary of Significant Accounting Policies [Line Items] | ' | ' | ' | ' |
Excluded anti-dilutive stock options and warrants | ' | ' | 2,294,714 | 747,164 |
Warrant [Member] | ' | ' | ' | ' |
Summary of Significant Accounting Policies [Line Items] | ' | ' | ' | ' |
Excluded anti-dilutive stock options and warrants | 13,888,262 | 15,325,943 | 14,679,971 | 16,452,368 |
Prepaid_Expenses_and_Other_Cur2
Prepaid Expenses and Other Current Assets (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Prepaid Expenses and Other Current Assets [Line Items] | ' | ' | ' |
Prepaid insurance premiums | ' | $78,000 | $88,000 |
Security deposit | ' | 21,000 | 21,000 |
Other | ' | 10,000 | 4,000 |
Prepaid expenses and other current assets | $37,000 | $109,000 | $113,000 |
Property_and_Equipment_Net_Det
Property and Equipment, Net (Details Textual) | 1 Months Ended | 12 Months Ended | ||
Oct. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | |
USD ($) | USD ($) | EUR (€) | USD ($) | |
Property, Plant and Equipment [Line Items] | ' | ' | ' | ' |
Depreciation expense | ' | $9,000 | ' | $91,000 |
Proceeds from sales of property and equipment | 55,000 | 55,000 | 42,500 | ' |
Proceeds from the sale of manufacturing equipment, amount recognized in other income | ' | $55,000 | € 42,500 | ' |
Property_and_Equipment_Net_Sch
Property and Equipment, Net (Schedule Of Property and Equipment, Net) (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2011 |
Maximum [Member] | Minimum [Member] | Manufacturing equipment [Member] | Manufacturing equipment [Member] | Manufacturing equipment [Member] | Manufacturing equipment [Member] | Research equipment [Member] | Research equipment [Member] | Computer equipment [Member] | Computer equipment [Member] | Computer equipment [Member] | Computer equipment [Member] | Furniture and fixtures [Member] | Furniture and fixtures [Member] | ||||
Maximum [Member] | Minimum [Member] | Maximum [Member] | Minimum [Member] | ||||||||||||||
Property, Plant and Equipment [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Property and equipment, Life | ' | ' | ' | '7 years | '3 years | ' | ' | '5 years | '3 years | '5 years | ' | ' | ' | '4 years | '3 years | '7 years | ' |
Property and equipment, gross | ' | $737,000 | $2,115,000 | ' | ' | $602,000 | $1,980,000 | ' | ' | $37,000 | $37,000 | $59,000 | $59,000 | ' | ' | $39,000 | $39,000 |
Less: accumulated depreciation | ' | 721,000 | 2,098,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Property and equipment, net | $9,000 | $16,000 | $17,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Accrued_Expenses_Details
Accrued Expenses (Details) (USD $) | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Accrued Expenses [Line Items] | ' | ' | ' |
Accrued Legal | ' | $90,000 | $52,000 |
Accrued Directors’ Compensation | ' | 77,000 | 30,000 |
Accrued Management Bonus | ' | 0 | 79,000 |
Accrued Accounting | ' | 0 | 15,000 |
Accrued Travel | ' | 84,000 | 0 |
Accrued Other | ' | 70,000 | 19,000 |
Accrued Expenses | $183,000 | $321,000 | $195,000 |
Income_Taxes_Details_Textual
Income Taxes (Details Textual) (USD $) | Dec. 31, 2012 | Dec. 31, 2011 |
Federal And New Jersey [Member] | ' | ' |
Operating loss carryforwards | $81,616,000 | ' |
Foreign [Member] | ' | ' |
Operating loss carryforwards | 8,233,000 | ' |
Research [Member] | Federal [Member] | ' | ' |
Tax credit carryforwards | $1,054,000 | $1,020,000 |
Income_Taxes_Details
Income Taxes (Details) | 12 Months Ended | |
Dec. 31, 2012 | Dec. 31, 2011 | |
U.S. federal statutory rate | 35.00% | 35.00% |
State & local taxes | 5.36% | -0.06% |
Tax on foreign operations | -0.78% | -1.27% |
State research and development credits | 1.06% | 1.11% |
Other | -2.29% | -3.07% |
Valuation allowance | -38.35% | -31.71% |
Effective tax rate | 0.00% | 0.00% |
Income_Taxes_Details_1
Income Taxes (Details 1) (USD $) | Dec. 31, 2012 | Dec. 31, 2011 |
Deferred tax assets: | ' | ' |
Net operating loss carry forwards | $25,721,000 | $24,714,000 |
Research and development credits | 1,054,000 | 1,019,000 |
Nonqualified stock option compensation expense | 1,701,000 | 1,586,000 |
Other temporary book - tax differences | 441,000 | 331,000 |
Total deferred tax assets | 28,917,000 | 27,650,000 |
Valuation allowance for deferred tax assets | -28,917,000 | -27,650,000 |
Net deferred tax assets | $0 | $0 |
Stock_Plans_ShareBased_Payment2
Stock Plans, Share-Based Payments and Warrants (Details Textual) (USD $) | 0 Months Ended | 1 Months Ended | 9 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 12 Months Ended | |||||||||||||||||||||||||
Mar. 10, 2011 | Mar. 31, 2011 | Sep. 30, 2013 | Sep. 30, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2007 | Aug. 31, 2009 | Jun. 30, 2009 | Dec. 31, 2012 | Dec. 31, 2007 | Dec. 31, 2007 | Dec. 31, 2007 | Jun. 30, 2009 | Dec. 31, 2007 | Jul. 24, 2009 | Dec. 31, 2012 | Dec. 31, 2011 | Mar. 10, 2011 | Dec. 31, 2012 | Dec. 31, 2007 | Dec. 31, 2007 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2012 | Dec. 31, 2011 | Jan. 31, 2011 | Jun. 30, 2008 | 31-May-07 | Jun. 30, 2005 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2012 | Dec. 31, 2011 | |
Class D Warrant [Member] | Class D Warrant [Member] | Class D Warrant [Member] | Class D Warrant [Member] | Class D Warrant Lambda [Member] | Class D Warrant Other [Member] | Placement Agent Warrant [Member] | Placement Agent Warrant [Member] | July Two Thousand Nine Warrant [Member] | Shareholder Rights Offering Warrant [Member] | Shareholder Rights Offering Warrant [Member] | Lambda Investor [Member] | Lambda Investor [Member] | National Securities Corporations [Member] | Dinosaur Securities Llc [Member] | Ceo Stock Options [Member] | 2000 Plan [Member] | 2000 Plan [Member] | 2000 Plan [Member] | 2000 Plan [Member] | 2000 Plan [Member] | 2004 Plan [Member] | 2004 Plan [Member] | 2004 Plan [Member] | 2004 Plan [Member] | 2004 Plan [Member] | 2004 Plan [Member] | 2004 Plan [Member] | 2004 Plan [Member] | 2004 Plan [Member] | 2004 Plan [Member] | ||||||||
Class D Warrant [Member] | Employee Stock Option [Member] | Employee Stock Option [Member] | Non Employee Stock Options [Member] | Non Employee Stock Options [Member] | Employee Stock Option [Member] | Employee Stock Option [Member] | Non Employee Stock Options [Member] | Non Employee Stock Options [Member] | ||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of shares authorized for issuance | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 106,538 | ' | ' | ' | ' | ' | ' | 1,990,717 | 134,849 | 65,000 | 40,000 | ' | ' | ' | ' |
Options outstanding | ' | ' | ' | ' | 2,294,714 | 747,164 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 7,230 | 7,230 | 2,053 | 2,053 | ' | ' | ' | ' | ' | ' | 1,316,628 | 443,128 | 637,253 | 294,753 |
Immediate vesting period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '2 years | '2 years | '2 years | '2 years |
Straight line vesting period | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '4 years | '4 years | '4 years | '4 years |
Shares available for future grants | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 19,904 | 1,235,904 | ' | ' | ' | ' | ' | ' | ' | ' |
Shares issued | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 331,550 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock options life | ' | ' | ' | ' | '10 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share-based compensation expense | ' | ' | $300,000 | $335,000 | $443,000 | $256,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock based compensation expense per share | ' | ' | ' | ' | 0.04 | 0.03 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair value of options vested | ' | ' | ' | ' | 506,000 | 249,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares, Options granted | ' | ' | 176,875 | ' | 1,547,550 | 702,500 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted-average fair value of options granted | ' | ' | ' | ' | $1.03 | $0.45 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Intrinsic value of options outstanding | ' | ' | ' | ' | 793,000 | 126,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Intrinsic value of options vested or expected to vest | ' | ' | ' | ' | 768,000 | 121,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted-average remaining contractual life of options vested or expected to vest | ' | ' | ' | ' | '8 years 10 months 24 days | '9 years 1 month 6 days | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unrecognized compensation cost related to non-vested options | ' | ' | ' | ' | 1,074,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Weighted average remaining requisite service period for unrecognized compensation cost | ' | ' | '2 years 6 months | ' | '3 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Exercise price of outstanding warrants | ' | 0.4 | ' | ' | 0.45 | 0.45 | ' | ' | ' | ' | ' | ' | ' | ' | 14.1 | 22.4 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Shares purchased through warrant | 4,590,171 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 455,628 | 359,541 | 96,087 | 87,819 | 87,819 | ' | ' | ' | 2,782,577 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Proceeds from Issuance of Warrants | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,763,000 | ' | ' | ' | 1,047,000 | 1,251,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Warrants Exercised | ' | 14,879,708 | 2,248,222 | ' | ' | ' | ' | ' | ' | 161,708 | ' | ' | ' | 81,335 | ' | ' | 1,096,313 | 436,668 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Warrants cancelled | ' | ' | ' | ' | ' | 7,372,348 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Warrants outstanding | 4,964,854 | ' | ' | ' | 14,679,971 | 16,452,368 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8,806,575 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock, shares issued | ' | 687,793 | ' | ' | ' | ' | ' | 54,561 | ' | ' | ' | ' | ' | 36,913 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding warrants exercised | ' | ' | ' | ' | ' | ' | ' | ' | ' | 352,034 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Proceeds from the exercise of warrants | ' | ' | 248,000 | ' | 503,000 | 174,000 | ' | ' | ' | 65,000 | ' | ' | ' | ' | ' | ' | 438,000 | 174,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Warrants Exercised Under Cashless Exercise Provision | ' | ' | ' | ' | ' | ' | ' | ' | 86,150 | 190,326 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Warrants Issued, Shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 33,629 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Warrants Issued As Percentage Of Common Stock Purchased | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 50.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash Fee, Percentage | ' | ' | ' | ' | ' | ' | 8.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6.25% | 1.75% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage Of Company's Common Stock Available For Purchase To Placement Agents | ' | ' | ' | ' | ' | ' | 10.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock distributed private placement | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 67,258 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock sold, price per share | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $18.60 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Gross proceeds from private placement | 3,200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net proceeds from private placement | 2,300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 537,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Subscribed units | 4,964,854 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Per unit purchase price | $0.40 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0.40 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Proceeds from the sale of rights, approximate | 2,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Private placement sale of common stock, shares | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,009,711 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number Of Shares Per Unit | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number Of Shares Per Warrant | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0.924532845 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Due to Lambda | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $666,650 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stockholders Equity, Reverse Stock Split | ' | ' | ' | ' | ' | '1:20 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock_Plans_ShareBased_Payment3
Stock Plans, Share-Based Payments and Warrants (Details) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Stock Price Volatility, Minimum | ' | 123.48% | 121.96% |
Stock Price Volatility, Maximum | ' | 128.54% | 130.06% |
Risk-Free Interest Rates, Minimum | ' | 0.93% | 1.08% |
Risk-Free Interest Rates, Maximum | ' | 1.32% | 2.42% |
Expected Dividend Yield | 0.00% | 0.00% | 0.00% |
Maximum [Member] | ' | ' | ' |
Expected Life (in years) | '6 years 3 months | '6 years 3 months | '5 years 6 months |
Minimum [Member] | ' | ' | ' |
Expected Life (in years) | '5 years 9 months | '5 years 9 months | '5 years |
Stock_Plans_ShareBased_Payment4
Stock Plans, Share-Based Payments and Warrants (Summary Of Information About Stock Options Outstanding And Exercisable) (Details) (USD $) | 12 Months Ended |
Dec. 31, 2012 | |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ' |
Options Outstanding, Number Outstanding as of December 31, 2012 | 2,294,714 |
Options Outstanding, Weighted Average Exercise Price | $1.46 |
Options Exercisable, Number Exercisable as Of December 31, 2012 | 778,035 |
Options Exercisable, Weighted Average Exercise Price | $2.26 |
$0.41 - $2.60 [Member] | ' |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ' |
Range of Exercise Price, Lower Range | $0.41 |
Range of Exercise Price, Upper Range | $2.60 |
Options Outstanding, Number Outstanding as of December 31, 2012 | 2,251,700 |
Options Outstanding, Weighted Average Remaining Contractual Life In Years | '9 years 4 days |
Options Outstanding, Weighted Average Exercise Price | $0.94 |
Options Exercisable, Number Exercisable as Of December 31, 2012 | 736,635 |
Options Exercisable, Weighted Average Exercise Price | $0.77 |
$15.00 - $29.80 [Member] | ' |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ' |
Range of Exercise Price, Lower Range | $15 |
Range of Exercise Price, Upper Range | $29.80 |
Options Outstanding, Number Outstanding as of December 31, 2012 | 28,853 |
Options Outstanding, Weighted Average Remaining Contractual Life In Years | '5 years 7 months 17 days |
Options Outstanding, Weighted Average Exercise Price | $17.74 |
Options Exercisable, Number Exercisable as Of December 31, 2012 | 27,240 |
Options Exercisable, Weighted Average Exercise Price | $17.78 |
$34.20 - $96.00 [Member] | ' |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ' |
Range of Exercise Price, Lower Range | $34.20 |
Range of Exercise Price, Upper Range | $96 |
Options Outstanding, Number Outstanding as of December 31, 2012 | 14,161 |
Options Outstanding, Weighted Average Remaining Contractual Life In Years | '1 year 4 months 10 days |
Options Outstanding, Weighted Average Exercise Price | $52.99 |
Options Exercisable, Number Exercisable as Of December 31, 2012 | 14,160 |
Options Exercisable, Weighted Average Exercise Price | $52.99 |
Stock_Plans_ShareBased_Payment5
Stock Plans, Share-Based Payments and Warrants (Summary Of Option Activity) (Details) (USD $) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Shares, Outstanding at beginning of year | 2,294,714 | 747,164 | ' |
Shares, Options granted | 176,875 | 1,547,550 | 702,500 |
Shares, Outstanding at end of year | ' | 2,294,714 | 747,164 |
Shares, Expected to vest at end of year | ' | 778,035 | ' |
Shares, Exercisable at end of year | ' | 2,206,747 | ' |
Weighted Average Exercise Price, Outstanding at beginning of year | $1.46 | $2.14 | ' |
Weighted Average Exercise Price, Options granted | ' | $1.13 | ' |
Weighted Average Exercise Price, Outstanding at end of year | ' | $1.46 | $2.14 |
Weighted Average Exercise Price, Expected to vest at end of year | ' | $2.26 | ' |
Weighted Average Exercise Price, Exercisable at end of year | ' | $1.47 | ' |
Stock_Plans_ShareBased_Payment6
Stock Plans, Share-Based Payments and Warrants (Summary Of Terms Of Outstanding Warrants) (Details) | Dec. 31, 2012 | Dec. 31, 2011 | Mar. 31, 2011 | Mar. 31, 2011 | Mar. 10, 2011 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | Dec. 31, 2012 | Dec. 31, 2011 |
July 2009 Warrants [Member] | July 2009 Warrants [Member] | March 2011 Lambda Warrants [Member] | March 2011 Lambda Warrants [Member] | Shareholder Rights Offering Warrants [Member] | Shareholder Rights Offering Warrants [Member] | Class D Warrants - Lambda [Member] | Class D Warrants - Lambda [Member] | Class D Warrants - Lambda [Member] | Class D Warrants - Other [Member] | Class D Warrants - Other [Member] | Class D Warrants - Other [Member] | Placement Agent Warrants [Member] | Placement Agent Warrants [Member] | ||||||
Class of Warrant or Right [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Date Issued | ' | ' | ' | ' | ' | 24-Jul-09 | ' | 10-Mar-11 | ' | 10-Mar-11 | ' | 14-Nov-07 | ' | ' | 14-Nov-07 | ' | ' | 14-Nov-07 | ' |
Expiry Date | ' | ' | ' | ' | ' | 24-Jul-14 | ' | 10-Mar-16 | ' | 10-Mar-16 | ' | 10-Mar-16 | ' | ' | 14-Nov-12 | ' | ' | 14-Nov-12 | ' |
Exercise Price | 0.45 | 0.45 | 0.4 | 0.4 | ' | 22.4 | ' | 0.4 | ' | 0.4 | ' | 0.4 | ' | ' | 0.4 | ' | ' | 0.4 | ' |
Total Common Shares Issuable | 14,679,971 | 16,452,368 | ' | ' | 4,964,854 | 33,629 | 33,629 | 2,782,577 | 2,782,577 | 3,057,190 | 4,153,503 | 8,806,575 | 8,806,575 | 359,541 | 0 | 447,197 | 9,937 | 0 | 228,887 |
Stock_Plans_ShareBased_Payment7
Stock Plans, Share-Based Payments and Warrants (Summary Of Terms Of Outstanding Warrants (Class D Warrants)) (Details) | Dec. 31, 2012 | Dec. 31, 2011 | Mar. 10, 2011 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2012 | Dec. 31, 2011 |
Class D Warrants [Member] | Class D Warrants [Member] | Class D Warrants - Lambda [Member] | Class D Warrants - Lambda [Member] | Class D Warrants - Other [Member] | Class D Warrants - Other [Member] | ||||
Class of Warrant or Right [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding warrants at beginning of year | 14,679,971 | 16,452,368 | 4,964,854 | 9,253,772 | 369,478 | 8,806,575 | 359,541 | 447,197 | 9,937 |
Anti-dilution ratcheting provision | ' | ' | ' | ' | 16,256,642 | ' | 15,819,382 | ' | 437,260 |
Surrendered - rights' offering | ' | ' | ' | ' | -7,372,348 | ' | -7,372,348 | ' | 0 |
Exercised in 2012 | ' | ' | ' | -352,034 | ' | 0 | ' | -352,034 | ' |
Expired in 2012 | ' | ' | ' | -95,163 | ' | 0 | ' | -95,163 | ' |
Outstanding warrants at end of year | 14,679,971 | 16,452,368 | 4,964,854 | 8,806,575 | 9,253,772 | 8,806,575 | 8,806,575 | 0 | 447,197 |
401k_Plan_Details_Textual
401(k) Plan (Details Textual) (USD $) | 12 Months Ended | 1 Months Ended | ||
Dec. 31, 2012 | Dec. 31, 2011 | Jan. 01, 2004 | Jan. 01, 2004 | |
3% Employee Contribution [Member] | 2% Employee Contribution [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | ' | ' | ' | ' |
Maximum employee contribution, percentage | 15.00% | ' | ' | ' |
Contribution expense | $49,000 | $28,000 | ' | ' |
Employer matching contribution, percentage | ' | ' | 100.00% | 50.00% |
Percent of employee contributions matched by employer | ' | ' | 3.00% | 2.00% |
Commitments_and_Contingencies_1
Commitments and Contingencies (Schedule Of Contractual Obligations and Commercial Commitments) (Details) (USD $) | Dec. 31, 2012 |
Commitments And Contingencies [Line Items] | ' |
Payments Due, Total | $1,515,000 |
Payments DueWithin 1 Year | 649,000 |
Payments Due Within 1 - 3 Years | 866,000 |
Payments Due Within 4 - 5 Years | 0 |
Payments Due More Than 5 Years | 0 |
Employment Contracts [Member] | ' |
Commitments And Contingencies [Line Items] | ' |
Payments Due, Total | 1,402,000 |
Payments DueWithin 1 Year | 550,000 |
Payments Due Within 1 - 3 Years | 852,000 |
Payments Due Within 4 - 5 Years | 0 |
Payments Due More Than 5 Years | 0 |
Leases [Member] | ' |
Commitments And Contingencies [Line Items] | ' |
Payments Due, Total | 113,000 |
Payments DueWithin 1 Year | 99,000 |
Payments Due Within 1 - 3 Years | 14,000 |
Payments Due Within 4 - 5 Years | 0 |
Payments Due More Than 5 Years | $0 |