Document_And_Entity_Informatio
Document And Entity Information | 6 Months Ended | |
Jun. 30, 2014 | Jul. 22, 2014 | |
Document Information [Line Items] | ' | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 30-Jun-14 | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q2 | ' |
Entity Registrant Name | 'NeuroMetrix, Inc. | ' |
Entity Central Index Key | '0001289850 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Trading Symbol | 'NURO | ' |
Entity Common Stock, Shares Outstanding | ' | 7,944,257 |
Balance_Sheets
Balance Sheets (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Current assets: | ' | ' |
Cash and cash equivalents | $13,693,792 | $9,195,753 |
Accounts receivable, net | 532,837 | 390,922 |
Inventories | 604,066 | 563,036 |
Prepaid expenses and other current assets | 349,926 | 416,816 |
Total current assets | 15,180,621 | 10,566,527 |
Fixed assets, net | 180,411 | 229,313 |
Other long-term assets | 674 | 923 |
Total assets | 15,361,706 | 10,796,763 |
Current liabilities: | ' | ' |
Accounts payable | 534,532 | 322,896 |
Accrued compensation | 811,155 | 386,004 |
Accrued expenses | 977,189 | 870,196 |
Current portion of deferred revenue | 49,713 | 68,812 |
Total current liabilities | 2,372,589 | 1,647,908 |
Deferred revenue, net of current portion | 11,239 | 15,277 |
Common stock warrants | 5,367,565 | 1,938,603 |
Total liabilities | 7,751,393 | 3,601,788 |
Commitments and contingencies (Note 6) | ' | ' |
Stockholders’ equity: | ' | ' |
Preferred stock, $0.001 par value; 5,000,000 shares authorized at June 30, 2014 and December 31, 2013: Convertible preferred stock; 11,083 and 4,438 shares designated at June 30, 2014 and December 31, 2013, respectively, and 6,440.216 and 0 shares issued and outstanding at June 30, 2014 and December 31, 2013, respectively | 6 | 0 |
Common stock, $0.0001 par value; 50,000,000 shares authorized; 6,759,032 and 5,945,581 shares issued and outstanding at June 30, 2014 and December 31, 2013, respectively | 676 | 595 |
Additional paid-in capital | 157,617,019 | 153,806,460 |
Accumulated deficit | -150,007,388 | -146,612,080 |
Total stockholders’ equity | 7,610,313 | 7,194,975 |
Total liabilities and stockholders’ equity | $15,361,706 | $10,796,763 |
Balance_Sheets_Parenthetical
Balance Sheets (Parenthetical) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Preferred stock, par value | $0.00 | $0.00 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 6,759,032 | 5,945,581 |
Common stock, shares outstanding | 6,759,032 | 5,945,581 |
Convertible Preferred Stock [Member] | ' | ' |
Preferred stock, shares authorized | 11,083 | 4,438 |
Preferred stock, issued | 6,440.22 | 0 |
Preferred stock, outstanding | 6,440.22 | 0 |
Statements_of_Operations
Statements of Operations (USD $) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Revenues | $1,343,770 | $1,160,472 | $2,675,307 | $2,561,926 |
Cost of revenues | 655,337 | 501,161 | 1,270,418 | 1,070,945 |
Gross profit | 688,433 | 659,311 | 1,404,889 | 1,490,981 |
Operating expenses: | ' | ' | ' | ' |
Research and development | 1,464,834 | 913,847 | 2,328,551 | 1,987,266 |
Sales and marketing | 694,664 | 880,218 | 1,140,880 | 1,660,059 |
General and administrative | 1,148,278 | 992,160 | 2,295,035 | 2,225,754 |
Total operating expenses | 3,307,776 | 2,786,225 | 5,764,466 | 5,873,079 |
Loss from operations | -2,619,343 | -2,126,914 | -4,359,577 | -4,382,098 |
Interest income | 990 | 1,394 | 2,026 | 3,163 |
Warrants offering costs | -27,618 | -376,306 | -27,618 | -376,306 |
Change in fair value of warrant liability | 475,261 | 1,155,996 | 989,861 | 1,155,996 |
Net loss | ($2,170,710) | ($1,345,830) | ($3,395,308) | ($3,599,245) |
Net loss per common share applicable to common stockholders, basic and diluted (See Note 3, Net Loss per Common Share) | ($0.85) | ($0.92) | ($1.06) | ($1.97) |
Weighted average number of common shares outstanding, basic and diluted | 6,002,330 | 2,299,463 | 5,966,929 | 2,215,658 |
Statements_of_Cash_Flows
Statements of Cash Flows (USD $) | 6 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Cash flows from operating activities: | ' | ' |
Net loss | ($3,395,308) | ($3,599,245) |
Adjustments to reconcile net loss to net cash used in operating activities: | ' | ' |
Depreciation and amortization | 66,293 | 79,299 |
Stock-based compensation | 137,164 | 96,107 |
Inventory charges | 0 | 77,642 |
Warrants offering cost | 27,618 | 376,306 |
Change in fair value of warrant liability | -989,861 | -1,155,996 |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable | -141,915 | 4,388 |
Inventories | -41,030 | 2,940 |
Prepaid expenses and other current assets | 65,028 | 156,888 |
Accounts payable | 211,636 | -48,863 |
Accrued expenses and compensation | 636,551 | 383,263 |
Deferred revenue, deferred costs, and other | -21,028 | -35,890 |
Net cash used in operating activities | -3,444,852 | -3,663,161 |
Cash flows from investing activities: | ' | ' |
Purchases of fixed assets | -17,392 | -15,968 |
Net cash used in investing activities | -17,392 | -15,968 |
Cash flows from financing activities: | ' | ' |
Net proceeds from issuance of stock and equity | 7,960,283 | 4,576,732 |
Payments on capital lease | 0 | -10,646 |
Net cash provided by financing activities | 7,960,283 | 4,566,086 |
Net increase in cash and cash equivalents | 4,498,039 | 886,957 |
Cash and cash equivalents, beginning of period | 9,195,753 | 8,699,478 |
Cash and cash equivalents, end of period | 13,693,792 | 9,586,435 |
Supplemental disclosure of cash flow information: | ' | ' |
Common stock issued to settle incentive compensation obligation | 104,402 | 285,296 |
Warrants issued under Securities Purchase Agreement recorded as a non-current liability | $4,418,824 | $4,011,205 |
Business_and_Basis_of_Presenta
Business and Basis of Presentation | 6 Months Ended | |
Jun. 30, 2014 | ||
Accounting Policies [Abstract] | ' | |
Business and Basis of Presentation | ' | |
1 | Business and Basis of Presentation | |
Our Business-An Overview | ||
NeuroMetrix, Inc., or the Company, a Delaware corporation, was founded in June 1996. The Company is an innovative health-care company that develops wearable medical technology and point-of-care diagnostic tests to help patients and physicians better manage chronic pain, nerve diseases, and sleep disorders. The Company believes that there are large and important unmet needs in the treatment of diabetic neuropathies and adjacent forms of chronic pain such as fibromyalgia, post herpetic neuropathy (shingles), and conditions with both chronic pain and disturbed sleep such as restless leg syndrome. With substantial experience in medical devices to measure and alter peripheral nerve function, the Company believes it is well positioned to address these unmet needs through the development of novel proprietary medical devices. Accordingly, the Company has a major focus on developing and marketing medical devices for diabetic neuropathies. The Company has over a decade of experience in neuropathy detection starting with approval in 1998 by the United States Food and Drug Administration, or FDA, of the NC-stat System, a point-of-care device for the performance of general purpose nerve conduction studies. | ||
In 2013 the Company launched the SENSUS™ Pain Management System, or SENSUS, a wearable transcutaneous electrical nerve stimulator indicated for management of chronic pain, and is the only device cleared by the FDA for use during sleep. It markets SENSUS to physicians managing patients with painful diabetic neuropathy and other forms of chronic pain. The Company also markets the NC-stat® DPNCheck® device, which is a fast, accurate, and quantitative nerve conduction test used to evaluate systemic neuropathies such as diabetic peripheral neuropathy, or DPN. NC-stat DPNCheck is designed to be used by physicians and other clinicians at the point-of-care to objectively detect, stage, and monitor DPN. The Company’s historical neurodiagnostic business is based on the ADVANCE™ NCS/EMG System, or the ADVANCE System, which is a comprehensive platform for the performance of traditional nerve conduction studies and invasive electromyography procedures and which is primarily used in physician offices and clinics. While the ADVANCE System contributes to the Company’s revenues, the Company is not actively managing the ADVANCE business for growth. | ||
On June 24, 2014, the Company entered into a Securities Purchase Agreement with a single institutional investor providing for the issuance of common stock, convertible preferred stock and warrants to purchase common stock, which is referred to as the 2014 Offering. The Company received net proceeds of $7.9 million from the 2014 Offering. See Note 9, Stockholders’ Equity, for additional details. | ||
The Company held cash and cash equivalents of $13.7 million as of June 30, 2014. The Company believes that these resources and the cash to be generated from expected product sales will be sufficient to meet its projected operating requirements for at least the next twelve months. The Company continues to face significant challenges and uncertainties and, as a result, the Company’s available capital resources may be consumed more rapidly than currently expected due to (a) unanticipated decreases in sales of the Company’s products and the uncertainty of future revenues from the Company’s new products; (b) changes the Company may make to the business that affect ongoing operating expenses; (c) changes the Company may make in its business strategy; (d) regulatory developments affecting the Company’s existing products and delays in the FDA approval process for products under development; (e) changes in the Company’s research and development spending plans; and (f) other items affecting the Company’s forecasted level of expenditures and use of cash resources. Accordingly, the Company will need to raise additional funds to support its future operating and capital needs beyond the next twelve months. The Company may attempt to obtain additional funding through public or private financing, collaborative arrangements with strategic partners, or through additional credit lines or other debt financing sources to increase the funds available to fund operations. However, the Company may not be able to secure such financing in a timely manner or on favorable terms, if at all. Furthermore, if the Company issues equity or debt securities to raise additional funds, its existing stockholders may experience dilution, and the new equity or debt securities may have rights, preferences and privileges senior to those of the Company’s existing stockholders. If the Company raises additional funds through collaboration, licensing or other similar arrangements, it may be necessary to relinquish valuable rights to its potential products or proprietary technologies, or grant licenses on terms that are not favorable to the Company. Without additional funds, the Company may be forced to delay, scale back or eliminate some of its sales and marketing efforts, research and development activities, or other operations and potentially delay product development in an effort to provide sufficient funds to continue its operations. If any of these events occur, the Company’s ability to achieve its development and commercialization goals would be adversely affected. | ||
Unaudited Interim Financial Statements | ||
The accompanying unaudited balance sheet as of June 30, 2014, unaudited statements of operations for the quarters and six months ended June 30, 2014 and 2013 and the unaudited statements of cash flows for the six months ended June 30, 2014 and 2013 have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, the financial statements include all normal and recurring adjustments considered necessary for a fair statement of the Company’s financial position and operating results. Operating results for the quarter ended June 30, 2014 are not necessarily indicative of the results that may be expected for the year ending December 31, 2014 or any other period. These financial statements and notes should be read in conjunction with the financial statements for the year ended December 31, 2013 included in the Company’s Annual Report on Form 10-K, as filed with the Securities and Exchange Commission, or the SEC, on February 24, 2014 (File No. 001-33351), or the Company’s 2013 Form 10-K. The accompanying balance sheet as of December 31, 2013 has been derived from audited financial statements prepared at that date, but does not include all disclosures required by accounting principles generally accepted in the United States of America. | ||
Revenues | ||
The Company recognizes revenue when the following criteria have been met: persuasive evidence of an arrangement exists, delivery has occurred and risk of loss has passed, the seller’s price to the buyer is fixed or determinable, and collection is reasonably assured. | ||
Revenues associated with the sale of the ADVANCE devices to customers and distributors are recognized upon shipment, provided that the selling price is fixed or determinable, persuasive evidence of an arrangement exists, collection of receivables is reasonably assured, product returns are reasonably estimable, and no continuing obligations exist. The revenues from the sale of an ADVANCE communication hub together with access to NeuroMetrix information systems are considered one unit of accounting and deferred and recognized on a straight-line basis over the estimated period of time that the Company provides the service associated with the information systems of three years. The resulting deferred revenue and deferred costs are presented as separate line items on the accompanying balance sheet. Revenues related to extended service agreements for the devices are recognized ratably over the term of the extended service agreement. | ||
Revenues associated with the sale of the SENSUS and NC-stat DPNCheck devices are recognized upon shipment, provided that the selling price is fixed or determinable, persuasive evidence of an arrangement exists, collection of receivables is reasonably assured, product returns are reasonably estimable, and no continuing obligations exist. | ||
Revenues also include sales of consumables, including single use nerve specific electrodes and other accessories. These revenues are recognized upon shipment provided that the selling price is fixed or determinable, persuasive evidence of an arrangement exists, collection of receivables is reasonably assured, and product returns are reasonably estimable. | ||
When multiple elements are contained in a single arrangement, the Company allocates revenue between the elements based on their relative selling prices. The Company determines selling price using vendor specific objective evidence, or VSOE, if it is available, third-party evidence, or TPE, if VSOE is not available, and best estimate of selling price, or BESP, if neither VSOE nor TPE are available. The Company generally expects that it will not be able to establish TPE due to the nature of the markets in which it competes, and, as such, it will typically determine selling price using VSOE or if not available, BESP. The objective of BESP is to determine the selling price of a deliverable on a standalone basis. The Company’s determination of BESP involves a weighting of several factors based on the specific facts and circumstances of an arrangement. Specifically, the Company considers the cost to produce the deliverable, the anticipated margin on that deliverable, the selling price and profit margin for similar parts, its ongoing pricing strategy, the value of any enhancements that have been built into the deliverable, and the characteristics of the varying markets in which the deliverable is sold. | ||
Revenue recognition involves judgments, including assessments of expected returns and expected customer relationship periods. The Company analyzes various factors, including a review of specific transactions, its historical returns, average customer relationship periods, customer usage, customer balances, and market and economic conditions. Changes in judgments or estimates on these factors could materially impact the timing and amount of revenues and costs recognized. Should market or economic conditions deteriorate, the Company’s actual return or bad debt experience could exceed its estimate. | ||
Certain product sales are made with a 30-day right of return. Since the Company can reasonably estimate future returns, it recognizes revenues associated with product sales that contain a right of return upon shipment and at the same time it records a sales return reserve, which reduces revenue and accounts receivable by the amount of estimated returns. | ||
During the quarter and six months ended June 30, 2014 one customer accounted for 13% and 12% of total revenue, respectively. No customers exceeded 10% in prior periods. | ||
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 significant estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during reporting periods. Actual results could differ from those estimates. | ||
Recent Accounting Pronouncements | ||
In May 2014, the FASB and the International Accounting Standards Board (“IASB”) jointly issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), a comprehensive new revenue recognition standard that will supersede nearly all existing revenue recognition guidance. The objective of ASU 2014-09 is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 will be effective for the first quarter of 2017. An entity can elect to adopt ASU 2014-09 using one of two methods, either full retrospective adoption to each prior reporting period, or recognizing the cumulative effect of adoption at the date of initial application. The Company is in the process of evaluating the new standard and does not know the effect, if any, ASU 2014-09 will have on the Consolidated Financial Statements or which adoption method will be used. | ||
Comprehensive_Loss
Comprehensive Loss | 6 Months Ended | |
Jun. 30, 2014 | ||
Stockholders' Equity Note [Abstract] | ' | |
Comprehensive Loss | ' | |
2 | Comprehensive Loss | |
For the quarters ended June 30, 2014 and 2013, the Company had no components of other comprehensive income or loss other than net loss itself. | ||
Net_Loss_Per_Common_Share
Net Loss Per Common Share | 6 Months Ended | |||||||||||||
Jun. 30, 2014 | ||||||||||||||
Earnings Per Share [Abstract] | ' | |||||||||||||
Net Loss Per Common Share | ' | |||||||||||||
3 | Net Loss Per Common Share | |||||||||||||
Basic net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding during the period. Unvested restricted shares, although legally issued and outstanding, are not considered outstanding for purposes of calculating basic net income per share. Diluted net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding during the period plus the dilutive effect of the weighted average number of outstanding instruments such as options, warrants, and restricted stock. Because the Company has reported a net loss for all periods presented, diluted loss per common share is the same as basic loss per common share, as the effect of utilizing the fully diluted share count would have reduced the net loss per common share. Therefore, in calculating net loss per share amounts, shares underlying the following potentially dilutive weighted average number of common stock equivalents were excluded from the calculation of diluted net income per common share because their effect was anti-dilutive for each of the periods presented: | ||||||||||||||
Quarters Ended June 30, | Six Months Ended June 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Options | 326,390 | 50,757 | 288,395 | 50,962 | ||||||||||
Warrants | 1,229,700 | 1,457,936 | 1,143,988 | 1,121,813 | ||||||||||
Unvested restricted stock | 1,967 | 20,318 | 3,370 | 27,271 | ||||||||||
Convertible preferred stock | 138,768 | 605,082 | 69,767 | 304,212 | ||||||||||
Total | 1,696,825 | 2,134,093 | 1,505,520 | 1,504,258 | ||||||||||
The Beneficial Conversion Feature, or BCF, recorded in both the 2014 Offering and 2013 Offering has been recognized as a deemed dividend attributable to the Preferred Stock and is reflected as an adjustment in the calculation of earnings per share. See Note 9, Stockholders’ Equity, for further details. | ||||||||||||||
Net loss per common share was determined as follows: | ||||||||||||||
Quarters Ended June 30, | Six Months Ended June 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Net loss | $ | -2,170,710 | $ | -1,345,830 | $ | -3,395,308 | $ | -3,599,245 | ||||||
Deemed dividend attributable to preferred stockholders in connection with embedded conversion features | -2,955,668 | -766,872 | -2,955,668 | -766,872 | ||||||||||
Net loss applicable to common stockholders | $ | -5,126,378 | $ | -2,112,702 | $ | -6,350,976 | $ | -4,366,117 | ||||||
Net loss per common share applicable to common stockholders, basic and diluted | $ | -0.85 | $ | -0.92 | $ | -1.06 | $ | -1.97 | ||||||
Weighted average number of common shares outstanding, basic and diluted | 6,002,330 | 2,299,463 | 5,966,929 | 2,215,658 | ||||||||||
Inventories
Inventories | 6 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Inventory Disclosure [Abstract] | ' | |||||||
Inventories | ' | |||||||
4 | Inventories | |||||||
Inventories consist of the following: | ||||||||
June 30, | December 31, | |||||||
2014 | 2013 | |||||||
Purchased components | $ | 220,437 | $ | 205,320 | ||||
Finished goods | 383,629 | 357,716 | ||||||
$ | 604,066 | $ | 563,036 | |||||
Accrued_Compensation_and_Expen
Accrued Compensation and Expenses | 6 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Payables and Accruals [Abstract] | ' | |||||||
Accrued Compensation and Expenses | ' | |||||||
5 | Accrued Compensation and Expenses | |||||||
Accrued compensation includes $303,000 of severance incurred in the second quarter of 2014. | ||||||||
Accrued expenses consist of the following: | ||||||||
June 30, | December 31, | |||||||
2014 | 2013 | |||||||
Technology fees | $ | 450,000 | $ | 450,000 | ||||
Professional services | 319,651 | 263,642 | ||||||
Clinical study obligations | 37,000 | 51,424 | ||||||
Sales taxes | 32,628 | 32,688 | ||||||
Other | 137,910 | 72,442 | ||||||
$ | 977,189 | $ | 870,196 | |||||
Commitments_and_Contingencies
Commitments and Contingencies | 6 Months Ended | |
Jun. 30, 2014 | ||
Commitments and Contingencies Disclosure [Abstract] | ' | |
Commitments and Contingencies | ' | |
6 | Commitments and Contingencies | |
Operating Lease | ||
In June 2013, the Company amended the lease agreement dated October 18, 2000 between Fourth Avenue LLC and the Company for office and engineering laboratory space to extend the term of the lease through March 31, 2015. Base rent for the period from January 2014 through March 2015 is $52,917 per month. | ||
Fair_Value_Measurements
Fair Value Measurements | 6 Months Ended | ||||||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||||||
Fair Value Disclosures [Abstract] | ' | ||||||||||||||||||||
Fair Value Measurements | ' | ||||||||||||||||||||
7 | Fair Value Measurements | ||||||||||||||||||||
The Fair Value Measurements and Disclosures Topic of the Codification defines fair value, establishes a framework for measuring fair value in applying generally accepted accounting principles, and expands disclosures about fair value measurements. This Codification topic identifies two kinds of inputs that are used to determine the fair value of assets and liabilities: observable and unobservable. Observable inputs are based on market data or independent sources while unobservable inputs are based on the Company’s own market assumptions. Once inputs have been characterized, this Codification topic requires companies to prioritize the inputs used to measure fair value into one of three broad levels. Fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities. Fair values identified by Level 2 inputs utilize observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities. Fair values identified by Level 3 inputs are unobservable data points and are used to measure fair value to the extent that observable inputs are not available. Unobservable inputs reflect the Company’s own assumptions about the assumptions that market participants would use at pricing the asset or liability. | |||||||||||||||||||||
The following tables present information about the Company’s assets and liabilities that are measured at fair value on a recurring basis for the periods presented and indicates the fair value hierarchy of the valuation techniques it utilized to determine such fair value. In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities. Fair values determined by Level 2 inputs utilize data points that are observable such as quoted prices, interest rates, and yield curves. Fair values determined by Level 3 inputs are unobservable data points for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability. | |||||||||||||||||||||
Fair Value Measurements at June 30, 2014 Using | |||||||||||||||||||||
June 30, | Quoted Prices in Active Markets for | Significant | Significant Unobservable Inputs | ||||||||||||||||||
2014 | Identical Assets | Other | (Level 3) | ||||||||||||||||||
(Level 1) | Observable | ||||||||||||||||||||
Inputs | |||||||||||||||||||||
(Level 2) | |||||||||||||||||||||
Assets: | |||||||||||||||||||||
Cash equivalents | $ | 12,853,692 | $ | 12,853,692 | $ | — | $ | — | |||||||||||||
Total | $ | 12,853,692 | $ | 12,853,692 | $ | — | $ | — | |||||||||||||
Liabilities: | |||||||||||||||||||||
Common stock warrants | $ | 5,367,565 | $ | — | $ | — | $ | 5,367,565 | |||||||||||||
Total | $ | 5,367,565 | $ | — | $ | — | $ | 5,367,565 | |||||||||||||
Due to the lack of market quotes relating to our common stock warrants, the fair value of the common stock warrants was determined at June 30, 2014 using the Black-Scholes model, which is based on Level 3 inputs. As of June 30, 2014, inputs used in the Black-Scholes model are presented below. The assumptions used may change as the underlying sources of these assumptions and market conditions change. Based on the Black-Scholes model, the Company recorded a common stock warrants liability of $5.4 million at June 30, 2014. | |||||||||||||||||||||
Black-Scholes Inputs to Warrant Liability Valuation at June 30, 2014 | |||||||||||||||||||||
Warrants: | Stock | Exercise | Expected | Risk-Free | Expected | Dividends | |||||||||||||||
Price | Price | Volatility | Interest | Term | |||||||||||||||||
2014 Offering | $ | 1.94 | $ | 2.04 | 68.27 | % | 1.62 | % | 5 yrs | none | |||||||||||
2013 Offering | $ | 1.94 | $ | 2 | 73.16 | % | 1.25 | % | 3yr 11mo | none | |||||||||||
The following table provides a summary of changes in the fair value of the Company’s Level 3 financial liabilities between the initial warrant issuances in June 2013 and June 30, 2014. | |||||||||||||||||||||
2014 Offering | 2013 Offering | Total | |||||||||||||||||||
Balance at December 31, 2012 | $ | — | $ | — | $ | — | |||||||||||||||
Initial fair value of warrants at issuance in June 2013 | — | 4,011,205 | 4,011,205 | ||||||||||||||||||
Change in fair value of warrant liability | — | 289,657 | 289,657 | ||||||||||||||||||
Reclassification of liability to additional paid-in capital upon exercise of warrants | — | -2,362,259 | -2,362,259 | ||||||||||||||||||
Balance at December 31, 2013 | $ | — | $ | 1,938,603 | $ | 1,938,603 | |||||||||||||||
Initial fair value of warrants at issuance in June 2014 | 4,418,823 | — | 4,418,823 | ||||||||||||||||||
Change in fair value of warrant liability | -150,980 | -838,881 | -989,861 | ||||||||||||||||||
Reclassification of liability to additional paid-in capital upon exercise of warrants | — | — | — | ||||||||||||||||||
Balance at June 30, 2014 | $ | 4,267,843 | $ | 1,099,722 | $ | 5,367,565 | |||||||||||||||
Fair Value Measurements at December 31, 2013 Using | |||||||||||||||||||||
December 31, | Quoted Prices in Active Markets for | Significant | Significant | ||||||||||||||||||
2013 | Identical Assets | Other | Unobservable Inputs | ||||||||||||||||||
(Level 1) | Observable | (Level 3) | |||||||||||||||||||
Inputs | |||||||||||||||||||||
(Level 2) | |||||||||||||||||||||
Assets: | |||||||||||||||||||||
Cash equivalents | $ | 3,926,600 | $ | 3,926,600 | $ | — | $ | — | |||||||||||||
Total | $ | 3,926,600 | $ | 3,926,600 | $ | — | $ | — | |||||||||||||
Liabilities: | |||||||||||||||||||||
Common stock warrants | $ | 1,938,603 | $ | — | $ | — | $ | 1,938,603 | |||||||||||||
Total | $ | 1,938,603 | $ | — | $ | — | $ | 1,938,603 | |||||||||||||
Due to the lack of market quotes relating to our common stock warrants, the fair value of the common stock warrants was determined at December 31, 2013 using the Black-Scholes model, which is based on Level 3 inputs. As of December 31, 2013, inputs used in the Black-Scholes model are presented below. The assumptions used may change as the underlying sources of these assumptions and market conditions change. Based on the Black-Scholes model, the Company recorded a common stock warrants liability of $1.9 million at December 31, 2013. | |||||||||||||||||||||
Black-Scholes Inputs to Warrant Liability Valuation at December 31, 2013 | |||||||||||||||||||||
Warrants: | Stock | Exercise Price | Expected Volatility | Risk-Free Interest | Expected Term | Dividends | |||||||||||||||
Price | |||||||||||||||||||||
2013 Offering | $ | 2.92 | $ | 2 | 67.6 | % | 1.71 | % | 4yr 5mo | none | |||||||||||
Credit_Facility
Credit Facility | 6 Months Ended | |
Jun. 30, 2014 | ||
Debt Disclosure [Abstract] | ' | |
Credit Facility | ' | |
8 | Credit Facility | |
The Company is party to a Loan and Security Agreement, or the Credit Facility, with a bank. As of June 30, 2014, the Credit Facility permitted the Company to borrow up to $2.5 million on a revolving basis. The Credit Facility was amended and extended on January 31, 2014 until January 15, 2015. Amounts borrowed under the Credit Facility will bear interest equal to the prime rate plus 0.5%. Any borrowings under the Credit Facility will be collateralized by the Company’s cash, accounts receivable, inventory, and equipment. The Credit Facility includes traditional lending and reporting covenants. These include certain financial covenants applicable to liquidity that are to be maintained by the Company. As of June 30, 2014, the Company was in compliance with these covenants and had not borrowed any funds under the Credit Facility. While the Company has not yet borrowed any amount under the Credit Facility, $225,000 of the Credit Facility limit is restricted to support a letter of credit issued in favor of the Company’s landlord in the lease of its facilities in Waltham, Massachusetts. Consequently, the amount available for borrowing under the Credit Facility as of June 30, 2014 was $2,275,000. | ||
Stockholders_Equity
Stockholders' Equity | 6 Months Ended | |
Jun. 30, 2014 | ||
Stockholders' Equity Note [Abstract] | ' | |
Stockholders' Equity | ' | |
9 | Stockholders’ Equity | |
Public Offerings of Common Stock and Warrants | ||
During June 2014 and June 2013 the Company entered into securities purchase agreements for two equity offerings that were similar in structure and in terms. The purchase agreement entered into in June 2014 (the “2014 Offering”) provided for the issuance of (i) 664,600 shares of common stock at a price of $2.04 per share, (ii) 2,621.859 shares of Series A-3 Preferred Stock at a price of $1,000 per share, (iii) 4,022.357 shares of Series A-4 Preferred Stock at a price of $1,000 per share, and (iv) five year warrants to purchase up to 3,921,569 shares of common stock with an exercise price of $2.04 per share. The 2014 Offering resulted in approximately $8.0 million in gross proceeds, before deducting expenses. Net proceeds from the 2014 Offering were approximately $7.9 million. | ||
The purchase agreement entered into in June 2013 (the “2013 Offering”) provided for the issuance of (i) 248,147 shares of common stock at a price of $2.095 per share, (ii) 1,066.254 shares of Series A-1 Preferred Stock at a price of $1,000 per share, (iii) 3,370.510 shares of Series A-2 Preferred Stock at a price of $1,000 per share, and (iv) five year warrants to purchase up to 2,365,934 shares of common stock with an exercise price of $2.00 per share. The 2013 Offering resulted in approximately $5.0 million in gross proceeds, before deducting placement agent fees and other expenses. Net proceeds from the 2013 Offering were approximately $4.5 million. | ||
In these equity offerings, each share of Preferred Stock has or had a stated value of $1,000 and is convertible at the option of the holder into the number of shares of common stock determined by dividing the stated value by the conversion price which is subject to adjustment as provided in each Certificate of Designation for the Preferred Stock. The Preferred Stock has no dividend rights, liquidation preference or other preferences over common stock and has no voting rights except as provided in each Certificate of Designation for the Preferred Stock and as required by law. | ||
The terms and conditions of the Preferred Stock were evaluated based on the guidance of the Derivatives and Hedging topic of the Codification to determine if the conversion feature was an embedded derivative requiring bifurcation. It was concluded for both equity offerings that bifurcation was not required because the conversion feature was clearly and closely related to the Preferred Stock. The conversion price at which shares of Preferred Stock were convertible into shares of common stock was determined to be lower than the fair value of common stock at the date of the Purchase Agreement. This “in-the-money” beneficial conversion feature, or BCF, required separate recognition and measurement of its intrinsic value (i.e., the amount of the increase in value that holders of Preferred Stock would realize upon conversion based on the value of the conversion shares on the date of the Purchase Agreement). For both equity offerings, the BCF measurement was limited by the transaction proceeds which had been allocated to the Preferred Stock. Because there was not a stated redemption date for the shares of Preferred Stock, the BCF was recognized as a deemed dividend attributable to the Preferred Stock and reflected as an adjustment in the calculation of earnings per share. The amounts of the BCF totaled $2,955,668 and $766,900, respectively, for the 2014 Offering and the 2013 Offering. | ||
The Series A-3 Preferred Stock is convertible into an aggregate of 1,285,225 shares of common stock and the Series A-4 Preferred Stock is convertible into an aggregate of 1,971,744 shares of common stock. During June 2014, 204 shares of the Series A-3 Preferred Stock were converted into a total of 100,000 shares of common stock. During July 2014, the remaining 2,417.859 shares of the Series A-3 Preferred Stock were converted into 1,185,225 shares of common stock. All of the Series A-1 Preferred Stock and the Series A-2 Preferred Stock issued in the 2013 Offering was converted in 2013 into a total of 2,117,787 shares of common stock. | ||
The warrants issued in connection with the 2013 Offering and the 2014 Offering are within the scope of the Derivatives and Hedging topic of the Codification. This Codification topic requires issuers to classify as liabilities (or assets under certain circumstances) financial instruments which require an issuer to settle in registered shares. As the warrants are required to be settled in registered shares when exercised, and since the Company is required to pay cash in the event it does not make timely filings with the SEC, the Company reflected the warrants as a liability in the balance sheet. | ||
The Company will continue to revalue unexercised warrants from both offerings at each reporting period over the life of the warrants using the Black-Scholes model and the changes in the fair value of the warrants will be recognized in the Company's statement of operations. The fair value of the warrants issued in connection with the 2014 Offering was estimated to be $4.4 million on the offering date using a Black-Scholes model with the following assumptions: stock price of $2.00, exercise price of $2.04, expected volatility of 67.48%, risk free interest rate of 1.64%, expected term of five years, and no dividends. These warrants remain outstanding. They were revalued at June 30, 2014 in the amount of $4.3 million using the same Black-Scholes model and the liability was reflected in the June 30, 2014 balance sheet. | ||
The 2013 Offering warrants were estimated at a fair value of $4.0 million on the offering date using a Black-Scholes model with the following assumptions: stock price of $2.60, exercise price of $2.00, expected volatility of 73.6%, risk free interest rate of 1.05%, expected term of five years, and no dividends. These warrants were revalued at each subsequent reporting period using the same Black-Scholes model. The liability for the remaining 1,057,323 warrants from the 2013 Offering was reflected in the balance sheet at June 30, 2014 in the amount of $1.1 million. | ||
In 2014 and 2013, the Company issued shares of fully vested common stock in partial settlement of management incentive compensation. The 2014 issuance totaled 42,615 shares with a value of $104,400 reflecting the $2.45 closing price of the Company’s common stock as reported on the NASDAQ Capital Market on February 25, 2014. The 2013 issuance totaled 119,370 shares with a value of $285,300 reflecting the $2.39 NASDAQ Capital Market closing price on June 4, 2013. | ||
Business_and_Basis_of_Presenta1
Business and Basis of Presentation (Policies) | 6 Months Ended |
Jun. 30, 2014 | |
Accounting Policies [Abstract] | ' |
Our Business-An Overview | ' |
Our Business-An Overview | |
NeuroMetrix, Inc., or the Company, a Delaware corporation, was founded in June 1996. The Company is an innovative health-care company that develops wearable medical technology and point-of-care diagnostic tests to help patients and physicians better manage chronic pain, nerve diseases, and sleep disorders. The Company believes that there are large and important unmet needs in the treatment of diabetic neuropathies and adjacent forms of chronic pain such as fibromyalgia, post herpetic neuropathy (shingles), and conditions with both chronic pain and disturbed sleep such as restless leg syndrome. With substantial experience in medical devices to measure and alter peripheral nerve function, the Company believes it is well positioned to address these unmet needs through the development of novel proprietary medical devices. Accordingly, the Company has a major focus on developing and marketing medical devices for diabetic neuropathies. The Company has over a decade of experience in neuropathy detection starting with approval in 1998 by the United States Food and Drug Administration, or FDA, of the NC-stat System, a point-of-care device for the performance of general purpose nerve conduction studies. | |
In 2013 the Company launched the SENSUS™ Pain Management System, or SENSUS, a wearable transcutaneous electrical nerve stimulator indicated for management of chronic pain, and is the only device cleared by the FDA for use during sleep. It markets SENSUS to physicians managing patients with painful diabetic neuropathy and other forms of chronic pain. The Company also markets the NC-stat® DPNCheck® device, which is a fast, accurate, and quantitative nerve conduction test used to evaluate systemic neuropathies such as diabetic peripheral neuropathy, or DPN. NC-stat DPNCheck is designed to be used by physicians and other clinicians at the point-of-care to objectively detect, stage, and monitor DPN. The Company’s historical neurodiagnostic business is based on the ADVANCE™ NCS/EMG System, or the ADVANCE System, which is a comprehensive platform for the performance of traditional nerve conduction studies and invasive electromyography procedures and which is primarily used in physician offices and clinics. While the ADVANCE System contributes to the Company’s revenues, the Company is not actively managing the ADVANCE business for growth. | |
On June 24, 2014, the Company entered into a Securities Purchase Agreement with a single institutional investor providing for the issuance of common stock, convertible preferred stock and warrants to purchase common stock, which is referred to as the 2014 Offering. The Company received net proceeds of $7.9 million from the 2014 Offering. See Note 9, Stockholders’ Equity, for additional details. | |
The Company held cash and cash equivalents of $13.7 million as of June 30, 2014. The Company believes that these resources and the cash to be generated from expected product sales will be sufficient to meet its projected operating requirements for at least the next twelve months. The Company continues to face significant challenges and uncertainties and, as a result, the Company’s available capital resources may be consumed more rapidly than currently expected due to (a) unanticipated decreases in sales of the Company’s products and the uncertainty of future revenues from the Company’s new products; (b) changes the Company may make to the business that affect ongoing operating expenses; (c) changes the Company may make in its business strategy; (d) regulatory developments affecting the Company’s existing products and delays in the FDA approval process for products under development; (e) changes in the Company’s research and development spending plans; and (f) other items affecting the Company’s forecasted level of expenditures and use of cash resources. Accordingly, the Company will need to raise additional funds to support its future operating and capital needs beyond the next twelve months. The Company may attempt to obtain additional funding through public or private financing, collaborative arrangements with strategic partners, or through additional credit lines or other debt financing sources to increase the funds available to fund operations. However, the Company may not be able to secure such financing in a timely manner or on favorable terms, if at all. Furthermore, if the Company issues equity or debt securities to raise additional funds, its existing stockholders may experience dilution, and the new equity or debt securities may have rights, preferences and privileges senior to those of the Company’s existing stockholders. If the Company raises additional funds through collaboration, licensing or other similar arrangements, it may be necessary to relinquish valuable rights to its potential products or proprietary technologies, or grant licenses on terms that are not favorable to the Company. Without additional funds, the Company may be forced to delay, scale back or eliminate some of its sales and marketing efforts, research and development activities, or other operations and potentially delay product development in an effort to provide sufficient funds to continue its operations. If any of these events occur, the Company’s ability to achieve its development and commercialization goals would be adversely affected. | |
Unaudited Interim Financial Statements | ' |
Unaudited Interim Financial Statements | |
The accompanying unaudited balance sheet as of June 30, 2014, unaudited statements of operations for the quarters and six months ended June 30, 2014 and 2013 and the unaudited statements of cash flows for the six months ended June 30, 2014 and 2013 have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, the financial statements include all normal and recurring adjustments considered necessary for a fair statement of the Company’s financial position and operating results. Operating results for the quarter ended June 30, 2014 are not necessarily indicative of the results that may be expected for the year ending December 31, 2014 or any other period. These financial statements and notes should be read in conjunction with the financial statements for the year ended December 31, 2013 included in the Company’s Annual Report on Form 10-K, as filed with the Securities and Exchange Commission, or the SEC, on February 24, 2014 (File No. 001-33351), or the Company’s 2013 Form 10-K. The accompanying balance sheet as of December 31, 2013 has been derived from audited financial statements prepared at that date, but does not include all disclosures required by accounting principles generally accepted in the United States of America. | |
Revenues | ' |
Revenues | |
The Company recognizes revenue when the following criteria have been met: persuasive evidence of an arrangement exists, delivery has occurred and risk of loss has passed, the seller’s price to the buyer is fixed or determinable, and collection is reasonably assured. | |
Revenues associated with the sale of the ADVANCE devices to customers and distributors are recognized upon shipment, provided that the selling price is fixed or determinable, persuasive evidence of an arrangement exists, collection of receivables is reasonably assured, product returns are reasonably estimable, and no continuing obligations exist. The revenues from the sale of an ADVANCE communication hub together with access to NeuroMetrix information systems are considered one unit of accounting and deferred and recognized on a straight-line basis over the estimated period of time that the Company provides the service associated with the information systems of three years. The resulting deferred revenue and deferred costs are presented as separate line items on the accompanying balance sheet. Revenues related to extended service agreements for the devices are recognized ratably over the term of the extended service agreement. | |
Revenues associated with the sale of the SENSUS and NC-stat DPNCheck devices are recognized upon shipment, provided that the selling price is fixed or determinable, persuasive evidence of an arrangement exists, collection of receivables is reasonably assured, product returns are reasonably estimable, and no continuing obligations exist. | |
Revenues also include sales of consumables, including single use nerve specific electrodes and other accessories. These revenues are recognized upon shipment provided that the selling price is fixed or determinable, persuasive evidence of an arrangement exists, collection of receivables is reasonably assured, and product returns are reasonably estimable. | |
When multiple elements are contained in a single arrangement, the Company allocates revenue between the elements based on their relative selling prices. The Company determines selling price using vendor specific objective evidence, or VSOE, if it is available, third-party evidence, or TPE, if VSOE is not available, and best estimate of selling price, or BESP, if neither VSOE nor TPE are available. The Company generally expects that it will not be able to establish TPE due to the nature of the markets in which it competes, and, as such, it will typically determine selling price using VSOE or if not available, BESP. The objective of BESP is to determine the selling price of a deliverable on a standalone basis. The Company’s determination of BESP involves a weighting of several factors based on the specific facts and circumstances of an arrangement. Specifically, the Company considers the cost to produce the deliverable, the anticipated margin on that deliverable, the selling price and profit margin for similar parts, its ongoing pricing strategy, the value of any enhancements that have been built into the deliverable, and the characteristics of the varying markets in which the deliverable is sold. | |
Revenue recognition involves judgments, including assessments of expected returns and expected customer relationship periods. The Company analyzes various factors, including a review of specific transactions, its historical returns, average customer relationship periods, customer usage, customer balances, and market and economic conditions. Changes in judgments or estimates on these factors could materially impact the timing and amount of revenues and costs recognized. Should market or economic conditions deteriorate, the Company’s actual return or bad debt experience could exceed its estimate. | |
Certain product sales are made with a 30-day right of return. Since the Company can reasonably estimate future returns, it recognizes revenues associated with product sales that contain a right of return upon shipment and at the same time it records a sales return reserve, which reduces revenue and accounts receivable by the amount of estimated returns. | |
During the quarter and six months ended June 30, 2014 one customer accounted for 13% and 12% of total revenue, respectively. No customers exceeded 10% in prior periods. | |
Use of Estimates | ' |
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 significant estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during reporting periods. Actual results could differ from those estimates. | |
Recent Accounting Pronouncements | ' |
Recent Accounting Pronouncements | |
In May 2014, the FASB and the International Accounting Standards Board (“IASB”) jointly issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), a comprehensive new revenue recognition standard that will supersede nearly all existing revenue recognition guidance. The objective of ASU 2014-09 is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 will be effective for the first quarter of 2017. An entity can elect to adopt ASU 2014-09 using one of two methods, either full retrospective adoption to each prior reporting period, or recognizing the cumulative effect of adoption at the date of initial application. The Company is in the process of evaluating the new standard and does not know the effect, if any, ASU 2014-09 will have on the Consolidated Financial Statements or which adoption method will be used. | |
Net_Loss_Per_Common_Share_Tabl
Net Loss Per Common Share (Tables) | 6 Months Ended | |||||||||||||
Jun. 30, 2014 | ||||||||||||||
Earnings Per Share [Abstract] | ' | |||||||||||||
Potentially Calculation of Diluted Net Income Per Common | ' | |||||||||||||
the following potentially dilutive weighted average number of common stock equivalents were excluded from the calculation of diluted net income per common share because their effect was anti-dilutive for each of the periods presented: | ||||||||||||||
Quarters Ended June 30, | Six Months Ended June 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Options | 326,390 | 50,757 | 288,395 | 50,962 | ||||||||||
Warrants | 1,229,700 | 1,457,936 | 1,143,988 | 1,121,813 | ||||||||||
Unvested restricted stock | 1,967 | 20,318 | 3,370 | 27,271 | ||||||||||
Convertible preferred stock | 138,768 | 605,082 | 69,767 | 304,212 | ||||||||||
Total | 1,696,825 | 2,134,093 | 1,505,520 | 1,504,258 | ||||||||||
Schedule of Earnings Per Share, Basic and Diluted | ' | |||||||||||||
Net loss per common share was determined as follows: | ||||||||||||||
Quarters Ended June 30, | Six Months Ended June 30, | |||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||
Net loss | $ | -2,170,710 | $ | -1,345,830 | $ | -3,395,308 | $ | -3,599,245 | ||||||
Deemed dividend attributable to preferred stockholders in connection with embedded conversion features | -2,955,668 | -766,872 | -2,955,668 | -766,872 | ||||||||||
Net loss applicable to common stockholders | $ | -5,126,378 | $ | -2,112,702 | $ | -6,350,976 | $ | -4,366,117 | ||||||
Net loss per common share applicable to common stockholders, basic and diluted | $ | -0.85 | $ | -0.92 | $ | -1.06 | $ | -1.97 | ||||||
Weighted average number of common shares outstanding, basic and diluted | 6,002,330 | 2,299,463 | 5,966,929 | 2,215,658 | ||||||||||
Inventories_Tables
Inventories (Tables) | 6 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Inventory Disclosure [Abstract] | ' | |||||||
Inventories | ' | |||||||
Inventories consist of the following: | ||||||||
June 30, | December 31, | |||||||
2014 | 2013 | |||||||
Purchased components | $ | 220,437 | $ | 205,320 | ||||
Finished goods | 383,629 | 357,716 | ||||||
$ | 604,066 | $ | 563,036 | |||||
Accrued_Compensation_and_Expen1
Accrued Compensation and Expenses (Tables) | 6 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Payables and Accruals [Abstract] | ' | |||||||
Accrued Compensation and Expenses | ' | |||||||
Accrued expenses consist of the following: | ||||||||
June 30, | December 31, | |||||||
2014 | 2013 | |||||||
Technology fees | $ | 450,000 | $ | 450,000 | ||||
Professional services | 319,651 | 263,642 | ||||||
Clinical study obligations | 37,000 | 51,424 | ||||||
Sales taxes | 32,628 | 32,688 | ||||||
Other | 137,910 | 72,442 | ||||||
$ | 977,189 | $ | 870,196 | |||||
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 6 Months Ended | ||||||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||||||
Fair Value Disclosures [Abstract] | ' | ||||||||||||||||||||
Fair Value Measurements | ' | ||||||||||||||||||||
Fair values determined by Level 3 inputs are unobservable data points for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability. | |||||||||||||||||||||
Fair Value Measurements at June 30, 2014 Using | |||||||||||||||||||||
June 30, | Quoted Prices in Active Markets for | Significant | Significant Unobservable Inputs | ||||||||||||||||||
2014 | Identical Assets | Other | (Level 3) | ||||||||||||||||||
(Level 1) | Observable | ||||||||||||||||||||
Inputs | |||||||||||||||||||||
(Level 2) | |||||||||||||||||||||
Assets: | |||||||||||||||||||||
Cash equivalents | $ | 12,853,692 | $ | 12,853,692 | $ | — | $ | — | |||||||||||||
Total | $ | 12,853,692 | $ | 12,853,692 | $ | — | $ | — | |||||||||||||
Liabilities: | |||||||||||||||||||||
Common stock warrants | $ | 5,367,565 | $ | — | $ | — | $ | 5,367,565 | |||||||||||||
Total | $ | 5,367,565 | $ | — | $ | — | $ | 5,367,565 | |||||||||||||
Fair Value Measurements at December 31, 2013 Using | |||||||||||||||||||||
December 31, | Quoted Prices in Active Markets for | Significant | Significant | ||||||||||||||||||
2013 | Identical Assets | Other | Unobservable Inputs | ||||||||||||||||||
(Level 1) | Observable | (Level 3) | |||||||||||||||||||
Inputs | |||||||||||||||||||||
(Level 2) | |||||||||||||||||||||
Assets: | |||||||||||||||||||||
Cash equivalents | $ | 3,926,600 | $ | 3,926,600 | $ | — | $ | — | |||||||||||||
Total | $ | 3,926,600 | $ | 3,926,600 | $ | — | $ | — | |||||||||||||
Liabilities: | |||||||||||||||||||||
Common stock warrants | $ | 1,938,603 | $ | — | $ | — | $ | 1,938,603 | |||||||||||||
Total | $ | 1,938,603 | $ | — | $ | — | $ | 1,938,603 | |||||||||||||
Black-Scholes Inputs to Warrant Liability Valuation | ' | ||||||||||||||||||||
Based on the Black-Scholes model, the Company recorded a common stock warrants liability of $5.4 million at June 30, 2014. | |||||||||||||||||||||
Black-Scholes Inputs to Warrant Liability Valuation at June 30, 2014 | |||||||||||||||||||||
Warrants: | Stock | Exercise | Expected | Risk-Free | Expected | Dividends | |||||||||||||||
Price | Price | Volatility | Interest | Term | |||||||||||||||||
2014 Offering | $ | 1.94 | $ | 2.04 | 68.27 | % | 1.62 | % | 5 yrs | none | |||||||||||
2013 Offering | $ | 1.94 | $ | 2 | 73.16 | % | 1.25 | % | 3yr 11mo | none | |||||||||||
Based on the Black-Scholes model, the Company recorded a common stock warrants liability of $1.9 million at December 31, 2013. | |||||||||||||||||||||
Black-Scholes Inputs to Warrant Liability Valuation at December 31, 2013 | |||||||||||||||||||||
Warrants: | Stock | Exercise Price | Expected Volatility | Risk-Free Interest | Expected Term | Dividends | |||||||||||||||
Price | |||||||||||||||||||||
2013 Offering | $ | 2.92 | $ | 2 | 67.6 | % | 1.71 | % | 4yr 5mo | none | |||||||||||
Fair Value, Liabilities Measured on Recurring Basis | ' | ||||||||||||||||||||
The following table provides a summary of changes in the fair value of the Company’s Level 3 financial liabilities between the initial warrant issuances in June 2013 and June 30, 2014. | |||||||||||||||||||||
2014 Offering | 2013 Offering | Total | |||||||||||||||||||
Balance at December 31, 2012 | $ | — | $ | — | $ | — | |||||||||||||||
Initial fair value of warrants at issuance in June 2013 | — | 4,011,205 | 4,011,205 | ||||||||||||||||||
Change in fair value of warrant liability | — | 289,657 | 289,657 | ||||||||||||||||||
Reclassification of liability to additional paid-in capital upon exercise of warrants | — | -2,362,259 | -2,362,259 | ||||||||||||||||||
Balance at December 31, 2013 | $ | — | $ | 1,938,603 | $ | 1,938,603 | |||||||||||||||
Initial fair value of warrants at issuance in June 2014 | 4,418,823 | — | 4,418,823 | ||||||||||||||||||
Change in fair value of warrant liability | -150,980 | -838,881 | -989,861 | ||||||||||||||||||
Reclassification of liability to additional paid-in capital upon exercise of warrants | — | — | — | ||||||||||||||||||
Balance at June 30, 2014 | $ | 4,267,843 | $ | 1,099,722 | $ | 5,367,565 | |||||||||||||||
Business_and_Basis_of_Presenta2
Business and Basis of Presentation - Additional Information (Detail) (USD $) | 1 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | ||||
Jun. 24, 2014 | Jun. 04, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2013 | Dec. 31, 2012 | Jun. 30, 2014 | Jun. 30, 2014 | |
Customer One | Customer One | |||||||
Organization And Basis Of Presentation [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Cash and cash equivalents | ' | ' | $13,693,792 | $9,195,753 | $9,586,435 | $8,699,478 | ' | ' |
Entity Date Of Incorporation | ' | ' | '1996-06 | ' | ' | ' | ' | ' |
Concentration risk, percentage | ' | ' | ' | ' | ' | ' | 13.00% | 12.00% |
Proceeds from Issuance or Sale of Equity, Total | $7,900,000 | $4,500,000 | ' | ' | ' | ' | ' | ' |
Comprehensive_Loss_Additional_
Comprehensive Loss - Additional Information (Detail) (USD $) | 3 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Other Comprehensive Income Loss [Line Items] | ' | ' |
Other comprehensive income (loss), net of tax | $0 | $0 |
Antidilutive_Common_Stock_Equi
Anti-dilutive Common Stock Equivalents Excluded from Calculation of Diluted Net Income Per Common Share (Detail) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' | ' |
Potentially dilutive common stock equivalents excluded from calculation of diluted net income per common share | 1,696,825 | 2,134,093 | 1,505,520 | 1,504,258 |
Options | ' | ' | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' | ' |
Potentially dilutive common stock equivalents excluded from calculation of diluted net income per common share | 326,390 | 50,757 | 288,395 | 50,962 |
Warrants | ' | ' | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' | ' |
Potentially dilutive common stock equivalents excluded from calculation of diluted net income per common share | 1,229,700 | 1,457,936 | 1,143,988 | 1,121,813 |
Unvested Restricted Stock | ' | ' | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' | ' |
Potentially dilutive common stock equivalents excluded from calculation of diluted net income per common share | 1,967 | 20,318 | 3,370 | 27,271 |
Convertible Preferred Stock | ' | ' | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' | ' |
Potentially dilutive common stock equivalents excluded from calculation of diluted net income per common share | 138,768 | 605,082 | 69,767 | 304,212 |
Determination_of_Net_Loss_Per_
Determination of Net Loss Per Common Share (Detail) (USD $) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Determination of net loss per common share [Line Items] | ' | ' | ' | ' |
Net loss | ($2,170,710) | ($1,345,830) | ($3,395,308) | ($3,599,245) |
Deemed dividend attributable to preferred stockholders in connection with embedded conversion features | -2,955,668 | -766,872 | -2,955,668 | -766,872 |
Net loss applicable to common stockholders | ($5,126,378) | ($2,112,702) | ($6,350,976) | ($4,366,117) |
Net loss per common share applicable to common stockholders, basic and diluted | ($0.85) | ($0.92) | ($1.06) | ($1.97) |
Weighted average number of common shares outstanding, basic and diluted | 6,002,330 | 2,299,463 | 5,966,929 | 2,215,658 |
Inventories_Detail
Inventories (Detail) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Inventory Disclosure [Line Items] | ' | ' |
Purchased components | $220,437 | $205,320 |
Finished goods | 383,629 | 357,716 |
Inventories | $604,066 | $563,036 |
Accrued_Compensation_and_Expen2
Accrued Compensation and Expenses - Additional Information (Detail) (USD $) | 3 Months Ended |
Jun. 30, 2014 | |
Accrued Compensation and Expenses [Line Items] | ' |
Severance Costs | $303,000 |
Accrued_Expenses_Detail
Accrued Expenses (Detail) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Schedule of Accrued Liabilities [Line Items] | ' | ' |
Technology fees | $450,000 | $450,000 |
Professional services | 319,651 | 263,642 |
Clinical study obligations | 37,000 | 51,424 |
Sales taxes | 32,628 | 32,688 |
Other | 137,910 | 72,442 |
Accrued expenses | $977,189 | $870,196 |
Commitments_and_Contingencies_
Commitments and Contingencies - Additional Information (Detail) (USD $) | 6 Months Ended |
Jun. 30, 2013 | |
Commitments and Contingencies Disclosure [Line Items] | ' |
Lease expiration date | 31-Mar-15 |
January 2014 through March 2015 | ' |
Commitments and Contingencies Disclosure [Line Items] | ' |
Base rent, per month | 52,917 |
Fair_Value_Measurements_Additi
Fair Value Measurements - Additional Information (Detail) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Fair Value Disclosures [Line Items] | ' | ' |
Common stock warrants liability | $5,367,565 | $1,938,603 |
Assets_and_Liabilities_Measure
Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Assets: | ' | ' |
Cash equivalents | $12,853,692 | $3,926,600 |
Total | 12,853,692 | 3,926,600 |
Liabilities: | ' | ' |
Common stock warrants | 5,367,565 | 1,938,603 |
Total | 5,367,565 | 1,938,603 |
Fair Value, Inputs, Level 1 | ' | ' |
Assets: | ' | ' |
Total | 12,853,692 | 3,926,600 |
Liabilities: | ' | ' |
Total | 0 | 0 |
Fair Value, Inputs, Level 1 | Fair Value, Measurements, Recurring | ' | ' |
Assets: | ' | ' |
Cash equivalents | 12,853,692 | 3,926,600 |
Liabilities: | ' | ' |
Common stock warrants | 0 | 0 |
Fair Value, Inputs, Level 2 | ' | ' |
Assets: | ' | ' |
Total | 0 | 0 |
Liabilities: | ' | ' |
Total | 0 | 0 |
Fair Value, Inputs, Level 2 | Fair Value, Measurements, Recurring | ' | ' |
Assets: | ' | ' |
Cash equivalents | 0 | 0 |
Liabilities: | ' | ' |
Common stock warrants | 0 | 0 |
Fair Value, Inputs, Level 3 | ' | ' |
Assets: | ' | ' |
Total | 0 | 0 |
Liabilities: | ' | ' |
Total | 5,367,565 | 1,938,603 |
Fair Value, Inputs, Level 3 | Fair Value, Measurements, Recurring | ' | ' |
Assets: | ' | ' |
Cash equivalents | 0 | 0 |
Liabilities: | ' | ' |
Common stock warrants | $5,367,565 | $1,938,603 |
BlackScholes_Inputs_to_Warrant
Black-Scholes Inputs to Warrant Liability Valuation (Detail) (USD $) | Jun. 24, 2014 | Jun. 04, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 |
2014 Offering | 2013 Offering | 2013 Offering | |||
Stock Price | $2.04 | $2.10 | $1.94 | $1.94 | $2.92 |
Exercise price | ' | ' | $2.04 | $2 | $2 |
Expected volatility | ' | ' | 68.27% | 73.16% | 67.60% |
Risk free interest rate | ' | ' | 1.62% | 1.25% | 1.71% |
Expected Term | ' | ' | '5 years | '3 years 11 months | '4 years 5 months |
Dividends | ' | ' | 0.00% | 0.00% | 0.00% |
Summary_of_changes_in_fair_val
Summary of changes in fair value of company's level 3 financial liabilities (Details) (Warrants, USD $) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2014 | Dec. 31, 2013 | |
Summary of changes in the fair value [Line Items] | ' | ' |
Balance | $1,938,603 | $0 |
Initial fair value of warrants at issuance in June | 4,418,823 | 4,011,205 |
Change in fair value of warrant liability | -989,861 | 289,657 |
Reclassification of liability to additional paid-in capital upon exercise of warrants | 0 | -2,362,259 |
Balance | 5,367,565 | 1,938,603 |
2014 Offering | ' | ' |
Summary of changes in the fair value [Line Items] | ' | ' |
Balance | 0 | 0 |
Initial fair value of warrants at issuance in June | 4,418,823 | 0 |
Change in fair value of warrant liability | -150,980 | 0 |
Reclassification of liability to additional paid-in capital upon exercise of warrants | 0 | 0 |
Balance | 4,267,843 | 0 |
2013 Offering | ' | ' |
Summary of changes in the fair value [Line Items] | ' | ' |
Balance | 1,938,603 | 0 |
Initial fair value of warrants at issuance in June | 0 | 4,011,205 |
Change in fair value of warrant liability | -838,881 | 289,657 |
Reclassification of liability to additional paid-in capital upon exercise of warrants | 0 | -2,362,259 |
Balance | $1,099,722 | $1,938,603 |
Credit_Facility_Additional_Inf
Credit Facility - Additional Information (Detail) (USD $) | 6 Months Ended |
Jun. 30, 2014 | |
Line of Credit Facility [Line Items] | ' |
Revolving credit facility, maximum borrowing capacity | $2,500,000 |
Credit Facility expiration date | 15-Jan-15 |
Credit Facility limit restricted to support letter of credit | 225,000 |
Line of credit facility, remaining borrowing capacity | $2,275,000 |
Prime Rate | ' |
Line of Credit Facility [Line Items] | ' |
Interest rate over prime rate | 0.50% |
Stockholders_Equity_Additional
Stockholders' Equity - Additional Information (Detail) (USD $) | 1 Months Ended | 1 Months Ended | 1 Months Ended | 6 Months Ended | 1 Months Ended | 6 Months Ended | 1 Months Ended | 6 Months Ended | ||||||||||||
Jun. 24, 2014 | Jun. 04, 2013 | Jun. 30, 2014 | Feb. 25, 2014 | Dec. 31, 2013 | Jun. 04, 2013 | Jun. 04, 2013 | Jun. 30, 2013 | Jul. 31, 2014 | Jun. 24, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 24, 2014 | Jun. 30, 2014 | Jun. 24, 2014 | Jun. 04, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | |
Series A One Convertible Preferred Stock | Series A Two Convertible Preferred Stock | Series A One and Two Convertible Preferred Stock | Series A Three Convertible Preferred Stock | Series A Three Convertible Preferred Stock | Series A Three Convertible Preferred Stock | Series A Three Convertible Preferred Stock | Series A Four Convertible Preferred Stock | Series A Four Convertible Preferred Stock | Warrants | Warrants | 2014 Offering | 2013 Offering | 2014 Issuance | 2013 Issuance | ||||||
Public Offering Of Common Stock and Warrants [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net proceed from offering common stock and warrants | $7,900,000 | $4,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Period over which warrants become exercisable | ' | '5 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '5 years | '5 years | ' | ' | ' | ' |
Fair Value of Warrants | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,400,000 | 4,000,000 | ' | ' | ' | ' |
Exercise price | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $2.04 | $2 | ' | ' | ' | ' |
Expected volatility | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 67.48% | 73.60% | ' | ' | ' | ' |
Risk free interest rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.64% | 1.05% | ' | ' | ' | ' |
Stock issued during period, shares, other | 664,600 | 248,147 | ' | ' | ' | 1,066.25 | 3,370.51 | ' | ' | 2,621.86 | ' | ' | 4,022.36 | ' | ' | ' | ' | ' | ' | ' |
Share price | $2.04 | $2.10 | ' | ' | ' | $1,000 | $1,000 | ' | ' | $1,000 | ' | ' | $1,000 | ' | $2 | $2.60 | ' | ' | ' | ' |
Preferred stock, stated value | ' | ' | $1,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Gross proceeds from issuance or sale of equity | 8,000,000 | 5,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Class of warrant or right, Number of securities called by warrants or rights | 3,921,569 | 2,365,934 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Common stock warrants liability | ' | ' | 5,367,565 | ' | 1,938,603 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,100,000 | ' | ' |
Common stock warrants remaining liability | ' | ' | 1,057,323 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock Issued During Period, Shares, New Issues | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 42,615 | 119,370 |
Closing Price Of Shares | ' | $2.39 | ' | $2.45 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Class of Warrant or Right, Exercise Price of Warrants or Rights | $2.04 | $2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt Instrument, Convertible, Beneficial Conversion Feature | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,955,668 | 766,900 | ' | ' |
Revalued Warrants | ' | ' | 4,300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock Issued During Period, Value, New Issues | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $104,400 | $285,300 |
Convertible Preferred Stock, Shares Issued upon Conversion | ' | ' | ' | ' | ' | ' | ' | 2,117,787 | 1,185,225 | ' | 100,000 | 100,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Number Of Convertible Preferred Stock Shares | ' | ' | ' | ' | ' | ' | ' | ' | 2,417.86 | ' | 204 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock Issued During Period, Shares, Conversion of Convertible Securities | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,285,225 | ' | 1,971,744 | ' | ' | ' | ' | ' | ' |