Hong Yuan Holding (HGYN) 10-Q 14 Nov 13 2013 Q3 Quarterly report Financial data

Document_and_Entity_Informatio

Document and Entity Information	9 Months Ended
	Sep. 30, 2013	Nov. 11, 2013
Document Information [Line Items]	'	'
Document Type	'10-Q	'
Amendment Flag	'false	'
Document Period End Date	30-Sep-13	'
Document Fiscal Year Focus	'2013	'
Document Fiscal Period Focus	'Q3	'
Trading Symbol	'CERP	'
Entity Registrant Name	'Cereplast Inc	'
Entity Central Index Key	'0001324759	'
Current Fiscal Year End Date	'--12-31	'
Entity Filer Category	'Smaller Reporting Company	'
Entity Common Stock, Shares Outstanding	'	994,949,093

Consolidated_Balance_Sheets

Consolidated Balance Sheets (USD $)	Sep. 30, 2013	Dec. 31, 2012
In Thousands, unless otherwise specified
Current Assets	'	'
Cash	$233	$183
Accounts Receivable, Net	1,021	149
Inventory, Net	5,722	6,941
Prepaid Expenses and Other Current Assets	199	227
Total Current Assets	7,175	7,500
Property and Equipment	'	'
Property and Equipment	11,152	11,601
Accumulated Depreciation and Amortization	-4,660	-4,004
Property and Equipment, Net	6,492	7,597
Other Assets	'	'
Restricted Cash	'	43
Deferred Loan Costs	350	750
Intangible Assets, Net	239	245
Deposits	48	47
Total Other Assets	637	1,085
Total Assets	14,304	16,182
Current Liabilities	'	'
Accounts Payable	920	803
Accrued Expenses	3,386	3,663
Capital Leases, Current Portion	97	85
Loan Payable, Current Portion	6,224	5,978
Convertible Subordinated Notes, Current Portion	1,122	891
Derivative Liability	15,142	3,189
Preferred Stock, $0.001 par value; 5,000,000 shares authorized, 490 and 92 shares issued and outstanding at September 30, 2013 and December 31, 2012, respectively	2,213	500
Total Current Liabilities	29,104	15,109
Long-Term Liabilities	'	'
Loan Payable	'	923
Convertible Subordinated Notes	7,500	10,000
Capital Leases, Long-Term	120	173
Total Long-Term Liabilities	7,620	11,096
Total Liabilities	36,724	26,205
Shareholders' Deficit	'	'
Common Stock, $0.001 par value; 2,000,000,000 shares authorized; 810,757,671 and 63,463,659 shares issued and outstanding at September 30, 2013 and December 31, 2012, respectively	811	63
Common Stock Subscribed, not issued	1,358	'
Additional Paid in Capital	96,416	76,919
Accumulated Deficit	-121,136	-87,097
Accumulated Other Comprehensive Income	127	88
Total Shareholders' Deficit	-22,424	-10,027
Noncontrolling Interests	4	4
Total Shareholders' Deficit	-22,420	-10,023
Total Liabilities and Shareholders' Deficit	$14,304	$16,182

Consolidated_Balance_Sheets_Pa

Consolidated Balance Sheets (Parenthetical) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Preferred Stock, par value (in dollars per share)	$0.00	$0.00
Preferred Stock, shares authorized	5,000,000	5,000,000
Preferred Stock, shares issued	490	92
Preferred Stock, shares Outstanding	490	92
Common Stock, par value (in dollars per share)	$0.00	$0.00
Common Stock, shares authorized	2,000,000,000	2,000,000,000
Common Stock, shares issued	810,757,671	63,463,659
Common Stock, shares outstanding	810,757,671	63,463,659

Consolidated_Statements_of_Ope

Consolidated Statements of Operations and Other Comprehensive Income (USD $)	3 Months Ended		9 Months Ended
In Thousands, except Share data, unless otherwise specified	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
GROSS SALES	$438	$481	$2,135	$786
Sales Discounts, Returns and Allowances	-2	-4	-3	-16
NET SALES	436	477	2,132	770
COST OF GOOD SOLD	382	473	1,880	861
GROSS PROFIT (LOSS)	54	4	252	-91
OPERATING EXPENSES:	'	'	'	'
Research and Development	75	115	295	371
Selling, General and Administrative	1,134	6,847	3,796	10,518
Impairment of Long-Lived Assets	547	'	547	'
Total Operating Expenses	1,756	6,962	4,638	10,889
OPERATING LOSS	-1,702	-6,958	-4,386	-10,980
Debt Extinguishment	-1,065	'	-2,821	-427
Change in Derivative Liabilities	-2,392	47	-21,629	-52
Interest and Other Income	'	'	'	18
Interest Expense	-2,112	-3,057	-5,203	-4,834
LOSS BEFORE PROVISION FOR INCOME TAXES	-7,271	-9,968	-34,039	-16,275
Provision for Income Taxes	'	'	'	'
NET LOSS	-7,271	-9,968	-34,039	-16,275
Gain (Loss) on Foreign Currency Translation	89	-95	39	26
Total Comprehensive Loss	($7,182)	($10,063)	($34,000)	($16,249)
NET LOSS PER SHARE - BASIC AND DILUTED	($0.01)	($0.40)	($0.07)	($0.77)
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING, BASIC AND DILUTED	731,817,081	24,739,449	482,042,209	21,242,115

Consolidated_Statements_of_Cas

Consolidated Statements of Cash Flows (USD $)	9 Months Ended
In Thousands, unless otherwise specified	Sep. 30, 2013	Sep. 30, 2012
CASH FLOWS FROM OPERATING ACTIVITIES:	'	'
Net Loss	($34,039)	($16,275)
Adjustment to Reconcile Net Loss to Net Cash Used in Operating Activities	'	'
Depreciation and Amortization	665	536
Allowance for Doubtful Accounts	3	5,082
Common Stock Issued for Services, Salaries and Wages	171	160
Amortization of Loan Discount	4,230	3,223
Extinguishment of Convertible Debt	2,821	368
Loss on Derivative Liabilities	21,629	52
Impairment of Long-Lived Assets	547	'
Changes in Operating Assets and Liabilities	'	'
Accounts Receivable	-875	537
Deferred Loan Costs	400	458
Inventory	1,219	814
Prepaid Expenses and Other Current Assets	28	-171
Restricted Cash	43	'
Accounts Payable	116	659
Accrued Expenses	749	288
NET CASH USED IN OPERATING ACTIVITIES	-2,293	-4,269
CASH FLOWS FROM INVESTING ACTIVITIES:	'	'
Purchase of Property, Equipment, and Intangibles	-3	-180
Proceeds from Sale of Equipment	'	15
NET CASH USED IN INVESTING ACTIVITIES	-3	-165
CASH FLOWS FROM FINANCING ACTIVITIES:	'	'
Payments on Capital Leases	-41	-50
Payments made on Notes Payable	-63	-603
Proceeds from Convertible Notes, Net of Issuance Costs	63	600
Proceeds from Issuance of Preferred Stock	2,750	400
Proceeds from Issuance of Common Stock and Subscriptions, Net of Issuance Costs	-23	400
NET CASH PROVIDED BY FINANCING ACTIVITIES	2,686	747
FOREIGN CURRENCY TRANSLATION	-340	-16
NET INCREASE (DECREASE) IN CASH	50	-3,703
CASH, BEGINNING OF PERIOD	183	3,940
CASH, END OF PERIOD	233	237
Cash Paid During the Year For:	'	'
Interest	960	460
Income Taxes	'	'

Consolidated_Statements_of_Cas1

Consolidated Statements of Cash Flows (Parenthetical) (USD $)	9 Months Ended
In Thousands, except Share data, unless otherwise specified	Sep. 30, 2013	Sep. 30, 2012
Expense related to vesting of employee stock options	$60	$51
Settlement Agreement	'	'
Number of shares issued	63,548,299	9,587
Dollar value of shares issued	342	10
Employee Service	'	'
Number of shares issued	3,200,000	84,478
Dollar value of shares issued	86	88
Vendor services	'	'
Number of shares issued	'	50,000
Dollar value of shares issued	'	$11

Organization_and_Line_of_Busin

Organization and Line of Business	9 Months Ended
	Sep. 30, 2013
Organization and Line of Business	'
	1. ORGANIZATION AND LINE OF BUSINESS
	Organization
	We were incorporated on September 29, 2001 in the State of Nevada under the name Biocorp North America Inc. On March 18, 2005, we filed an amendment to our certificate of incorporation to change our name to Cereplast, Inc.
	Line of Business
	We have developed and is commercializing proprietary bio-based resins through two complementary product families: Cereplast Compostables® resins which are compostable, renewable, ecologically sound substitutes for petroleum-based plastics, and Cereplast Sustainables™ resins (including the Cereplast Hybrid Resins product line), which replaces up to 90% of the petroleum-based content of traditional plastics with materials from renewable resources. Our resins can be converted into finished products using conventional manufacturing equipment without significant additional capital investment by downstream converters.
	The demand for non-petroleum based, clean and renewable sources for materials, such as bioplastics, and the demand for compostable/biodegradable products are being driven globally by a variety of factors, including fossil fuel price volatility, energy security and environmental concerns. These factors have led to increased spending on clean and renewable products by corporations and individuals as well as legislative initiatives at national, state and local level.
	We are a full-service resin solution provider uniquely positioned to capitalize on the rapidly increasing demand for sustainable and environmentally friendly alternatives to traditional plastic products.
	We primarily conduct our operations through two product families:
		•	Cereplast Compostables® resins are compostable and bio-based, ecologically sound substitutes for petroleum-based plastics targeting primarily compostable bags, single-use food service products and packaging applications. We offer 13 commercial grades of Compostable resins in this product line. These resins are compatible with existing manufacturing processes and equipment making them a ready substitute for traditional petroleum-based resins. We commercially introduced our Compostable line in November 2006.
		•	Cereplast Sustainables™ resins are partially or fully bio-based, ecologically sound substitutes for fully petroleum-based plastics targeting primarily durable goods, packaging applications. We offer six commercial grades of Sustainable resins in this product line. These resins are compatible with existing manufacturing processes and equipment, making them a ready substitute for traditional petroleum-based resins. We commercially introduced our Sustainable line in late 2007 under the name “Cereplast Hybrid Resins®.”
		•	Cereplast Hybrid Resins® products replace up to 55% of the petroleum content in conventional plastics with bio-based materials such as industrial starches sourced from plants. The Hybrid resins line is designed to offer similar properties to traditional polyolefins such as impact strength and heat deflection temperature, and is compatible with existing converter processes and equipment. The Cereplast Hybrid Resins® line provides a viable alternative for brand owners and converters looking to partially replace petroleum-based resins in durable goods applications. Hybrid resins address this need in a wide range of markets, including automotive, consumer goods, consumer electronics, medical, packaging, and construction. We commercially introduced our first grade of Hybrid resin, Hybrid 150, at the end of 2007. We currently offer four commercial grades in this product line.
		•	Cereplast Algae Plastic® resins. In October of 2009 we announced that we have been developing a new technology to transform algae into bioplastics and intend to launch a new resin family containing algae-based materials that will complement our existing line of resins. The first commercial product with Cereplast Algae Plastic® resin is now being produced and sold as part of our Sustainables resin family. We believe that it is important to enhance research on non-food crops as we expect a surge in demand in bioplastics in future years, thus potentially creating pressure on food crops. Algae are the first non-food crop project that we have introduced and our R&D department is contemplating the development of additional non-food crop based materials in future years. In March 2013 the Company announced the incorporation of a wholly owned subsidiary Algaeplast, Inc. This new company will serve as vehicle to develop additional research on algae based plastic with the ultimate scope to create 100% algae based polymers.
	Our patent portfolio is currently comprised of six patents in the United States (“U.S.”), one Mexican patent, and eight pending patent applications in the U.S. and abroad. Our trademark portfolio is currently comprised of approximately 45 registered marks and 21 pending applications in the U.S. and abroad.

Summary_of_Significant_Account

Summary of Significant Accounting Policies	9 Months Ended
	Sep. 30, 2013
Summary of Significant Accounting Policies	'
	2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
	Basis of Presentation and Consolidation
	The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). The unaudited consolidated financial statements include the financial condition and results of operations of our wholly-owned subsidiary, Cereplast International, S.A., a Luxembourg company organized during the year ended December 31, 2008, for the purpose of conducting sales operations in Europe. Intercompany balances and transactions have been eliminated in consolidation. The results of operations for interim periods are not necessarily indicative of the results that may be expected for a full year. These financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012.
	Use of Estimates
	The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the accompanying financial statements. Significant estimates made in preparing these financial statements include the estimate of useful lives of property and equipment, the deferred tax valuation allowance and the fair value of stock options. Actual results could differ from those estimates.
	Cash
	We consider all highly liquid investments with an original maturity of three months or less to be cash equivalents. At various times throughout the year, we may have exceeded federally insured limits. At September 30, 2013 and December 31, 2012, balances in our cash accounts did not exceed federally insured limits of $0.25 million. We have not experienced any losses in such accounts and we do not believe we are exposed to any significant credit risk on cash and cash equivalents.
	Concentration of Credit Risk
	We had no unrestricted cash at September 30, 2013. We had unrestricted cash totaling $0.2 million at December 31, 2012. The unrestricted cash and cash equivalents are held for working capital purposes. We do not enter into investments for trading or speculative purposes. Some of the securities in which we invest, however, may be subject to market risk. This means that a change in prevailing interest rates may cause the principal amount of the investment to fluctuate. To minimize this risk, we intend to maintain our portfolio of cash equivalents and short-term investments in a variety of securities, including commercial paper, money market funds, debt securities and certificates of deposit. Due to the short-term nature of these investments, we believe that we do not have any material exposure to changes in the fair value of our investment portfolio as a result of changes in interest rates. We actively monitor changes in interest rates.
	Going Concern
	We have incurred a net loss of $34.0 million for the nine months ended September 30, 2013, and $30.2 million for the year ended December 31, 2012, and have an accumulated deficit of $121.1 million as of September 30, 2013. Based on our operating plan, our existing working capital will not be sufficient to meet the cash requirements to fund our planned operating expenses, capital expenditures and working capital requirements through December 31, 2013 without additional sources of cash. This raises substantial doubt about our ability to continue as a going concern.
	Our plan to address the shortfall of working capital is to generate additional cash through a combination of refinancing existing credit facilities, incremental product sales and raising additional capital through debt and equity financings. We are confident that we will be able to deliver on our plans, however, there are no assurances that we will be able to obtain any sources of financing on acceptable terms, or at all.
	If we cannot obtain sufficient additional financing in the short-term, we may be forced to curtail or cease operations or file for bankruptcy. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should we be forced to take such actions.
	Fair Value of Financial Instruments
	The carrying amounts of our financial instruments as of September 30, 2013 and December 31, 2012, which include cash, accounts receivable, unbilled receivable, accounts payable, accrued expenses, loans payable and convertible subordinated notes approximate their fair values due to the short-term nature of these instruments.
	Accounts Receivable
	We maintain an allowance for doubtful accounts for estimated losses that may arise if any of our customers are unable to make required payments. Management performs a quantitative and qualitative review of the receivables past due from customers on a monthly basis. Quantitative factors include customer’s past due balance, prior payment history, recent sales activity and days sales outstanding. Qualitative factors include macroeconomic environment, current product demand, estimated inventory levels and customer’s financial position. For our accounts receivable balances that have been fully reserved, we may have access to repossess unsold products held at customer locations as recourse for payment defaults. The fair market value of these products are considered as potential recovery in estimating net losses from uncollectible accounts. We record an allowance against uncollectible items for each customer after all reasonable means of collection have been exhausted, and the potential for recovery is considered remote. The allowance for doubtful accounts was approximately $0 and $15.0 million as of September 30, 2013 and December 31, 2012, respectively.
	Inventory
	Inventories are stated at the lower of cost (first-in, first-out basis) or market, and consist primarily of raw materials used in the manufacturing of bioplastic resins, finished bioplastic resins and finished goods. Inventories are reviewed for excess and obsolescence and a reserve is established accordingly. As of September 30, 2013 and December 31, 2012, inventories consisted of the following (in thousands):
			September 30, 2013			December 31, 2012
			(Unaudited)
	Raw Materials		$	1,961		$	1,950
	Bioplastic Resins			3,853			5,082
	Finished Goods			41			42
	Packaging Materials			66			66
	WIP			—			—
	Obsolescence Reserve			(199	)		(199	)
	Inventory, net		$	5,722		$	6,941
	Property and Equipment
	Property and equipment are stated at cost, and depreciation is computed on the straight-line method over the estimated useful lives of the assets. The estimated useful lives of the assets are between five and seven years. Repairs and maintenance expenditures are charged to expense as incurred. During the three months ended September 30, 2013, we recorded in an impairment of $0.5 million on our Building in Italy to adjust its net book value to equal the carrying value of its related mortgage to reflect our current dispute with the seller, as disclosed in Note 4. Property and Equipment consist of the following (in thousands):
			September 30, 2013			December 31, 2012
			(Unaudited)
	Equipment		$	5,732		$	5,732
	Building			3,835			4,218
	Construction In Progress			1,189			1,255
	Auto			12			12
	Furniture and Fixtures			297			297
	Leasehold Improvements			87			87
				11,152			11,601
	Accumulated Depreciation			(4,660	)		(4,004	)
	Property and Equipment, Net		$	6,492		$	7,597
	Intangible Assets
	Intangible assets are stated at cost and consist primarily of patents and trademarks. Amortization is computed on the straight-line method over the estimated life of these assets, estimated to be between five and fifteen years. Intangible assets consist of the following (in thousands):
			September 30, 2013			December 31, 2012
			(Unaudited)
	Intangible Assets		$	296		$	294
	Accumulated Amortization			(57	)		(49	)
	Intangible Assets, Net		$	239		$	245
	Deferred Income Taxes
	Deferred income taxes are provided using the liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of the changes in tax laws and rates of the date of enactment.
	The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination.
	Interest and penalties associated with unrecognized tax benefits are classified as additional income taxes in the statement of income.
	Revenue Recognition
	We recognize revenue at the time of shipment of products, when the following fundamental criteria are met: (i) persuasive evidence of an arrangement exists; (ii) delivery has occurred; (iii) the price to the customer is fixed or determinable; and (iv) collection of the sales price is probable.
	Certain of our product sales are made to distributors under agreements with generally the same terms of sale and credit as all other customer agreements. Revenue from product sales to our customers, including our customers who are distributors, is recognized upon shipment provided the above noted fundamental criteria of revenue recognition are met. The sale of products to our customers who are distributors is not contingent upon the distributor selling the product to the end-user, and our current agreements with distributors do not have any rights of return.
	Impairment of Long-Lived Assets
	We evaluate long-lived assets for impairment whenever events or changes in circumstances indicate the carrying value may not be recoverable. Factors we consider include:
		•		Significant changes in the operational performance or manner of use of acquired assets or the strategy for our overall business,
		•		Significant negative market conditions or economic trends, and
		•		Significant technological changes or legal factors which may render the asset obsolete.
	We evaluate long-lived assets based upon an estimate of future undiscounted cash flows. Recoverability of these assets is measured by comparing the carrying value to the future net undiscounted cash flows expected to be generated by the asset. An impairment loss is recognized when the carrying value exceeds the undiscounted future cash flows estimated to result from the use and eventual disposition of the asset. Future net undiscounted cash flows include estimates of future revenues and expenses which are based on projected growth rates. We continually use judgment when applying these impairment rules to determine the timing of the impairment tests, the undiscounted cash flows used to assess impairments and the fair value of a potentially impaired asset. The reasonableness of our judgment could significantly affect the carrying value of our long-lived assets.
	During fiscal year 2012, and continuing through the third quarter of fiscal 2013, we experienced a significant decline in sales volume due to liquidity and sales resource constraints, which we believe to be temporary. Our reduced production volume has not changed the manner in which we use our equipment, nor its physical condition. Our current estimate of future net undiscounted cash flows indicates that the carrying value of our long-lived assets is recoverable and therefore no impairment is recorded for equipment.
	During the third quarter of 2013, Cereplast Italia is in default with its mortgage payable related to our building in Italy. We have recorded an impairment of $0.5 million to adjust the carrying value of our building to equal the outstanding value of its related mortgage to reflect our potential loss exposure based on this default.
Derivative Financial Instruments
Our derivative financial instruments consist of embedded and free-standing derivatives related primarily to the convertibles notes. The embedded derivatives include the conversion features, and liquidated damages clauses in the registration rights agreement. The accounting treatment of derivative financial instruments requires that we record the derivatives and related warrants at their fair values as of the inception date of the agreement and at fair value as of each subsequent balance sheet date. The recorded value of all derivatives at September 30, 2013 totaled approximately $15.1 million. Any change in fair value of these instruments will be recorded as non-operating, non-cash income or expense at each reporting date. If the fair value of the derivatives is higher at the subsequent balance sheet date, the Company will record a non-operating, non-cash charge. If the fair value of the derivatives is lower at the subsequent balance sheet date, the Company will record non-operating, non-cash income. At September 30, 2013, derivatives were valued primarily using the Black-Scholes Option Pricing Model.
Comparative Figures
Certain of the prior year figures have been reclassified to conform to the presentation adopted in the current year.

Capital_Stock

Capital Stock

9 Months Ended

Sep. 30, 2013

Capital Stock

'

3. CAPITAL STOCK

Capital Stock Issued

During the nine months ended September 30, 2013, we issued shares of common stock as follows:

•

We issued 317,251,420 shares of common stock valued at $8.7 million, pursuant to exchange agreements.

•

We issued 361,294,293 shares of common stock valued at $12.5 million, in connection with the conversion of 141 shares of Series A Preferred Stock.

•

We issued 63,548,299 shares of common stock valued at approximately $342,000 pursuant to settlement agreements.

•

We issued 2,000,000 shares of common stock valued at approximately $60,000 in stock-based compensation.

•

We issued 3,000,000 shares of common stock valued at approximately $83,700 for consultant fees.

•

We issued 200,000 shares of common stock valued at approximately $2,000 for lender fees.

We have issued 184.2 million shares of common stock since September 30, 2013, as follows:

•

176.7 million shares of common stock pursuant to conversion of our Series A Preferred Stock.

•

7.5 million shares of common stock valued at approximately $97,500 for consultant fees.

Valuation Assumptions for Stock Options

During the year ended December 31, 2011, we granted options to our employees to purchase an aggregate of 300,000 shares of our common stock, with estimated total grant-date fair values of $0.7 million. We estimate that stock-based compensation for awards not expected to be exercised is $0.2 million. During the nine months ended September 30, 2013 and September 30, 2012, we recorded stock-based compensation related to stock options of $60,000 and $51,000, respectively. The grant date fair value was estimated at the date of grant using the Black-Scholes option pricing model, assuming no dividends and the following assumptions:

January 14, 2011

Average risk-free interest rate

2.29

%

Average expected life (in years)

6

Volatility

41.9

%

•

Expected Volatility: The fair values of stock based payments were valued using a volatility factor based on our historical stock prices.

•

Expected Term: We elected to use the “simplified method” as discussed in SAB No. 107 to develop the estimate of the expected term.

•

Expected Dividend: We have not paid any dividends and do not anticipate paying dividends in the foreseeable future.

•

Risk-Free Interest Rate: We base the risk-free interest rate used on the implied yield currently available on U.S. Treasury zero-coupon issues with remaining term equivalent to the expected term of the options.

Stock Option Activity

Under the 2004 Employee Stock Option Plan adopted by our board of directors (the “Plan”), our board of directors may issue incentive and non-qualified stock options to our employees. Options granted under the Plan generally expire at the end of five or ten years and vest in accordance with a vesting schedule determined by our board of directors, usually over three years from the grant date. As of September 30, 2013, we have 34,375 shares available for future grants under the Plan. We settle stock option exercises with newly issued shares of our common stock (in thousands except, per share data):

2013

2012

Shares

Weighted

Shares

Weighted

Average

Average

Exercise Price

Exercise Price

Outstanding—January 1

204

$

5.62

373

$

8.65

Granted at fair value

—

—

—

—

Exercised

—

—

—

—

Cancelled/forfeited

(200

)

—

—

—

Outstanding—September 30

4

22.4

373

8.65

Options exercisable at September 30

4

$

22.4

193

$

11.77

The following table summarizes information about stock options as of September 30, 2013, (in thousands, except per share data):

Options Outstanding

Options Exercisable

Range of Exercise Prices

Shares

Weighted

Weighted

Aggregate

Shares

Weighted

Weighted

Aggregate

Average

Average

Intrinsic

Average

Average

Intrinsic

Exercise

Remaining

Value

Exercise

Remaining

Value

Price

Contract

Price

Contract

Life

Life

$5.32—$22.40

4

$

22.4

1.42

$

—

4

$

22.4

1.42

$

—

The aggregate intrinsic value in the table above represents the total pretax intrinsic value, based on our closing stock price of $0.01 at September 30, 2013 which would have been received by the option holders had all option holders exercised their options as of that date.

Preferred Stock

On August 24, 2012, we entered into a Stock Purchase Agreement (“SPA”) with Ironridge Technology Co., a division of Ironridge Global IV, Ltd, for the sale of up to $5 million in shares of convertible redeemable Series A Preferred Stock (“Series A Preferred Stock”). The closing of the transactions contemplates the fulfillment of certain closing conditions. The initial closing with respect to the sale of 30 shares of Series A Preferred Stock occurred on August 24, 2012.

On August 24, 2012, we filed a Certificate of Designation of Preferences, Rights and Limitations of Series A Preferred Stock (“Certificate of Designation”) with the Secretary of State of Nevada. The Certificate of Designation provides that the Series A Preferred Stock ranks senior with respect to dividend and rights upon liquidation to the Company’s common stock and junior to all existing and future indebtedness. Except as otherwise required by law, the Series A Preferred Stock shall have no voting rights. The Certificate of Designation provides for the payment of cumulative dividends at a rate of 2.5% per annum when and if declared by the Board of Directors in its sole discretion. Dividends and any Embedded Derivative Liability (as defined in the Certificate of Designation) may be paid in cash or free trading shares of the Company as provided in the Certificate of Designation.

Unless we have received the approval of the holders of a majority of the Series A Preferred Stock then outstanding, we shall not (i) alter or change adversely the powers, preferences or rights of the holders of the Series A Preferred Stock or alter or amend the Certificate of Designation; (ii) authorize or create any class of stock ranking senior as to distribution of dividends senior to the Series A Preferred Stock; (iii) amend its certificate of incorporation in breach of any provisions of the Certificate of Designation; increase the authorized number of Series A Preferred Stock; (iv) liquidate, or wind-up the business and affaires of the Corporation or effect any Deemed Liquidation Event, as defined in the Certificate of Designation.

Upon any liquidation, dissolution or winding up of the Company, after payment or provision for payment of debts and other liabilities of the Company, the holders of Series A Preferred Stock shall be entitled to receive, pari passu with any distribution to the holders of Common Stock of the Company, an amount equal to $10,000 per share of Series A Preferred Stock plus any accrued and unpaid dividends.

Upon or after 18 years after the Issuance Date, the Corporation will have the right to redeem 100% of the Series A Preferred Stock at a price of $10,000 per share plus any accrued and unpaid dividends (the “Corporation Redemption Price”). We are also permitted to redeem the Series A Preferred Stock at any time after issuance as provided in the Certificate of Designation. The Certificate of Designation also provides for mandatory redemption if the Company determines to liquidate, dissolve or wind-up its business and affects or effect any Deemed Liquidation Event as such term is defined in the Certificate of Designation.

The Series A Preferred Stock may be converted into shares of common stock of the Company at the option of the Company or the holder. In the event of a conversion by the holder at a price per share equal to the sum of (a) the Corporation Redemption Price plus the Embedded Derivative Liability (as defined in the Certificate of Designation) less any dividends paid, multiplied by (b) the number of shares being converted, divided by (c) the conversion price of $0.25. On February 27, 2013, the holder elected to convert 50 shares of Series A Preferred Stock into shares of common stock. In accordance with the formula discussed above, 50 shares of Series A Preferred Stock converted into 190,888,889 shares of common stock. On June 17, 2013, the holder elected to convert 42 shares of Series A Preferred Stock into shares of common stock. In accordance with the formula discussed above, 42 shares of Series A Preferred Stock converted into 115,631,700 shares of common stock. On September 4, 2013, the holder elected to convert 49 shares of Series A Preferred Stock into shares of common stock. In accordance with the formula discussed above, 49 shares of Series A Preferred Stock converted into 134,821,492 shares of common stock. As of September 30, 2013, we issued 54,000,000 shares of common stock, while the remaining 80,821,492 shares were subscribed to the holder. In connection with the conversion, the Derivative Liability related to the 141 shares of Series A Preferred Stock, with a total value at the conversion date of $12.3 million, was reclassified into equity as a component of the common stock issued and subscribed. We estimated the fair value of the Series A Preferred Stock Embedded Derivative Liability and Series A Preferred Stock conversion option was $6.7 million and $30,000, respectively, at September 30, 2013. We estimated the fair value of the Embedded Derivative Liability using the Black-Scholes option pricing model using the following assumptions:

Assumptions:

September 30, 2013

Expected life

0.6 years

Expected volatility

270.2

%

Dividends

None

Risk-free interest rate

0.04

%

We estimated the fair value of the conversion option using the Black-Scholes option pricing model using the following assumptions:

Assumptions:

September 30, 2013

Expected life

0.3 years

Expected volatility

125

%

Dividends

None

Risk-free interest rate

0.02

%

Loans_Payable_and_Convertible_

Loans Payable and Convertible Subordinated Notes	9 Months Ended
	Sep. 30, 2013
Loans Payable and Convertible Subordinated Notes	'
	4. LOANS PAYABLE AND CONVERTIBLE SUBORDINATED NOTES
	Venture Loan Payable
	On December 21, 2010, we entered into a Venture Loan and Security Agreement (the “Loan Agreement”) with Compass Horizon Funding Company, LLC (the “Lender” or “Horizon”). The Loan Agreement provides for a total loan commitment of $5.0 million (“the Loan”) comprising of Loan A and Loan B, each in the amount of $2.5 million. Loan A was funded at closing on December 21, 2010 and matures 39 months after the date of advance. Loan B was funded on February 17, 2011 and also matures 39 months after the date of advance. We are obligated to pay interest per annum equal to the greater of (a) 12% or (b) 12% plus the difference between (i) the one month LIBOR Rate in effect on the date preceding the funding of such loan by five business days and (ii) .30%. We are required to make interest only payments for the first nine months of each loan and equal payments of principal over the final thirty months of each loan. We granted a security interest in all of our assets to the Lender.
	In connection with Loan Agreements, we issued a seven year warrant to the Lender to purchase 140,000 shares of our common stock at an exercise price of $4.40. The relative fair value of the warrants was $0.2 million and is being recorded as interest expense over the term of the Loan. We estimated the fair value of the warrants using the Black-Scholes option pricing model using the following assumptions:
			December 22, 2010
	Assumptions:
	Expected Life			7 years
	Expected volatility			39.9	%
	Dividends			None
	Risk-free interest rate			2.74	%
	Also in connection with the Loan Agreement, we incurred $0.4 million of debt issue costs which were deferred and are being amortized to interest expense over the term of the loan.
	On June 29, 2012, we amended the Loan Agreement (the “Amendment”) to change the Maturity Date to the earlier to occur of (i) August 1, 2014, or (ii) the date of acceleration of a Loan following an event of default or the date of prepayment of the Loan. In addition, the definition of Scheduled Payments was amended. The definition of Events of Default was expanded to include the failure to pay certain late fees and amendment fees, which were agreed upon among the parties.
	In connection with the Amendment, we issued a warrant to Horizon representing the right to purchase 225,000 shares of our common stock at an exercise price of $0.01 per share (the “New Warrant”). In addition, we issued a restated and amended warrant to purchase 140,000 shares of the Company’s common stock at an exercise price of $0.26 (the “Amended Warrant”). The relative fair value of the New Warrant was $117,000. The difference between the fair value of the Amended Warrant immediately before and after the modification was $32,000. These amounts were recorded as a debt discount and are being recorded as interest expense over the remaining term of the loan. We estimated the fair value of the New and Amended Warrants using the Black-Scholes option pricing model using the following assumptions:
	Assumptions:		May 1, 2012
	Expected life			7 years
	Expected volatility			88.2	%
	Dividends			None
	Risk-free interest rate			1.35	%
	Convertible Subordinated Notes
	On May 24, 2011, we issued $12.5 million in aggregate principal amount of 7% Senior Subordinated Convertible Notes due June 1, 2016 (the “Notes”). The Notes were issued pursuant to an indenture (the “Indenture”), entered into between us and Wells Fargo Bank, National Association, as trustee, on May 24, 2011. In connection with the issuance of the Notes, we entered into a Waiver to our Venture Loan and Security Agreement with Horizon, dated May 18, 2011 pursuant to which Horizon provided its consent to the offering of the Notes and waived any restrictions in the Loan Agreement.
	The Notes are senior subordinated unsecured obligations which will rank subordinate in right to payment to all of our existing and future senior secured indebtedness and bear interest at a rate of 7% per annum payable semi-annually in arrears on June 1 and December 1 of each year, commencing on December 1, 2011. The Notes mature on June 1, 2016, with an early repurchase date of June 15, 2014 at the option of the purchaser. The Notes are convertible into shares of our common stock in accordance with the terms of the Notes and the Indenture, at the initial conversion rate of 172.4138 shares of our common stock per $1,000 principal amount of Notes, equivalent to a conversion price of approximately $5.80 per share, subject to adjustment. If the Notes are converted into shares of our common stock prior to June 2, 2014, an interest make-whole payment will be due based on the conversion date up until June 2, 2014. Upon a non-stock change in control, additional shares of our common stock may need to be issued upon conversion, with a maximum additional shares of 25.606 per $1,000 in principal amount of Notes being issuable thereunder, for a total maximum of 198.0198 shares per $1,000 Note. Certain customary anti-dilution provisions included in the Indenture and/or the Notes could adjust the conversion rate.
	The conversion feature within the Notes is not considered to be a beneficial conversion feature within the meaning of Accounting Standards Codification (“ASC”) 470, Debt, and therefore all of the gross proceeds from the Notes have been classified as long term debt. In connection with the issue of the Notes, we incurred approximately $1.3 million of debt issue costs which were deferred and are being amortized to interest expense over the term to the early repurchase date of June 15, 2014.
	Also in connection with the issuance of the Notes, we entered into a Securities Purchase Agreement dated May 18, 2011 pursuant to which we agreed to prepare and file a registration statement with the Securities and Exchange Commission (the “SEC”) registering the resale of the Notes and the shares of common stock underlying the Notes. The registration statement was declared effective on August 10, 2011.
	On June 1, 2012, we entered into an Exchange Agreement and a Forbearance Agreement with certain of the holders of our Notes. Pursuant to the terms of the Exchange Agreement, certain of the holders agreed to exchange the Notes for shares at an exchange rate of one share of our common stock for each $1.00 amount of the Notes exchanged.
	Pursuant to the terms of the Forbearance Agreement, certain of the holders agreed to forbear from exercising their rights to require us to pay accrued interest on June 1, 2012 until the earlier of December 1, 2012 or our failure to meet certain milestones. In addition, pursuant to the terms of the Forbearance Agreement, we agreed to amend the conversion rate of the Notes as set forth in the Indenture to provide for an effective conversion rate of $1.00.
	On January 25, 2013, we entered into an Exchange Agreement with IBC Funds, LLC (“IBC Funds”) in connection with Purchase Agreements between IBC Funds and certain Noteholders, to purchase up to $2.0 million of Notes through November 2013. Total purchases by IBC Funds in the nine months ended September 30, 2013 were $2.5 million.
	At September 30, 2013 the Notes were convertible into 7,500,000 shares of our common stock.
	Short-Term Convertible Notes
	The total amount of Short-Term Convertible Notes Payable as of September 30, 2013 was $2.1 million, offset by discounts totalling $977,000. The total amount of Short-Term Convertible Notes Payable as of December 31, 2012 was $1.3 million, offset by discounts totalling $451,000. These Notes are comprised of the following:
		•		From June 1, 2012 through January 17, 2013, we issued Convertible Promissory Notes to Asher Enterprises, Inc. (the “Asher Notes”) with a remaining principal amount of $213,000 and bearing 8% annual interest. The Asher Notes have maturity dates between September 13, 2013 and October 17, 2013 with repayment options from 100% to 135% of the principal amount beginning 90 days from each issuance date. The holder has the option to convert the principal and accrued interest into shares of our Company stock at a conversion price calculated as 70% of the average of the five lowest trading prices for our common stock during the 90 days prior to the conversion date. Proceeds from the Asher Notes were used to fund Company operations.
		•		On June 26, 2012, we issued a Promissory Note to JMJ Financial (the “JMJ Note”) of up to $1.1 million, which bears 0% interest if repaid at maturity. The JMJ Note has a maturity date of 180 days from the effective date of each funding. The principal amount due to JMJ Financial (“JMJ”) was prorated based on the consideration actually paid by JMJ, plus an approximate 10% Original Issue Discount (“OID”) that is prorated based on the consideration actually paid by JMJ as well as any other interest or fees. In addition, we will issue 100% warrant coverage for each amount funded under the JMJ Note. In addition, JMJ has the right, at any time at its election, to convert all or part of the outstanding and unpaid principal and any other fees, into shares of fully paid and non-assessable shares of our common stock. The conversion price is a variable calculation of 80% of the average of the three lowest closing prices for our common stock during the 20 days prior to the conversion date. We are only required to repay the amount funded and we are not required to repay any unfunded portion of the JMJ Note.
		•		The consideration received as through September 30, 2013 is $400,000, in exchange for a principal amount of $440,000 and issuance of 1,886,792 warrants (“the JMJ Warrants”) with an exercise price of $0.21, which may be reset if securities are issued for less than $0.21. For financial accounting purposes, the JMJ Warrants and conversion feature embedded in the JMJ Note were considered derivatives. The fair values of the JMJ Warrants and JMJ Note conversion features were estimated at inception and recorded as a debt discount and is being recorded to interest expense over the life of the JMJ Note. The derivatives will be valued at each reporting date and the change in estimated fair value will result in a gain or loss recorded in the statement of operations. The estimated grant date fair value of the JMJ Warrants and JMJ Note conversion were $198,113 and $187,195, respectively. We estimated the fair value of the JMJ Warrants and JMJ Note conversion features using the Black-Scholes option pricing model using the following assumptions:
	Assumptions:		June 26, 2012			August 9, 2012
	Expected life			4 years			4 years
	Expected volatility			95.4	%		97.7	%
	Dividends			None			None
	Risk-free interest rate			0.59	%		0.66	%
		•		The estimated fair value of the JMJ Warrants and JMJ Note conversion features was $1.2 million and $153,393, respectively, at September 30, 2013. We estimated the fair value of the JMJ Warrants and JMJ Note conversion feature at September 30, 2013 using the Black-Scholes option pricing model using the following assumptions:
	Assumptions:		September 30, 2013
	Expected life			2.7 years
	Expected volatility			180.7	%
	Dividends			None
	Risk-free interest rate			0.63	%
		•		On October 15, 2012, we entered into an Exchange Agreement (the “Exchange Agreement”) with Magna Group LLC (“Magna”), pursuant to which we agreed to issue to Magna convertible notes (the “Magna Notes”), in the aggregate principal amount of up to $4.6 million, in exchange for an equal amount of participation interests in certain secured promissory notes (the “Secured Notes”) issued by us to Horizon to be acquired by Magna. Pursuant to a participation purchase agreement dated as of October 15, 2012 (the “Magna Purchase Agreement”), Magna agreed to acquire, in tranches through on or around February 15, 2013, participation interests in the Secured Notes from Horizon up to the maximum amount of the principal outstanding, together with accrued interest and fees. The total issuances in 2012 were $1.0 million under the Exchange Agreement, pursuant to which we issued a Magna Note in exchange for a participation interest in a Secured Note. The Magna Notes bear interest at the rate of 6% per annum and mature 12 months after the date of issuance. The Magna Notes are convertible at the option of the holder at a conversion price equal to 75% of the average of the three lowest volume weighted average prices during the ten consecutive trading day period immediately prior to the date of conversion. The Magna Notes contain standard default provisions and provisions for adjustment of the conversion price in the event of subsequent equity sales. For financial accounting purposes, the conversion feature embedded in the Magna Notes were considered derivatives. The fair values of the Magna Notes conversion features were estimated at inception and recorded as a debt discount and is being recorded to interest expense over the life of the Magna Notes. The derivatives will be valued at each reporting date and the change in estimated fair value will result in a gain or loss recorded in the statement of operations. The estimated fair value of the Magna Notes conversion were $198,113. We estimated the fair value of the Magna Notes conversion feature using the Black-Scholes option pricing model using the following assumptions:
	Assumptions:		October 15, 2012			November 8, 2012
	Expected life			1 year			1 year
	Expected volatility			155.6	%		125.9	%
	Dividends			None			None
	Risk-free interest rate			0.19	%		0.2	%
		•		The estimated fair value of the Magna Notes conversion features was $35,000 at September 30, 2013. We estimated the fair value of the Magna Notes conversion feature at September 30, 2013 using the Black-Scholes option pricing model using the following assumptions:
	Assumptions:		September 30, 2013
	Expected life			0.3 years
	Expected volatility			125	%
	Dividends			None
	Risk-free interest rate			0.02	%
		•		On October 15, 2012, we entered into a Note Purchase Agreement (the “Hanover Purchase Agreement”) with Hanover Holding I, LLC (“Hanover”), pursuant to which Hanover agreed to purchase from us, and we agreed to sell to Hanover (subject to the terms and conditions set forth therein), an aggregate of $0.8 million of convertible promissory notes (the “Hanover Notes”). Subject to the terms and conditions set forth in the Hanover Purchase Agreement, the Hanover Notes will be sold in tranches of $100,000 through on or around February 15, 2013. The total issuances in 2012 were $0.3 million under the Hanover Purchase Agreement. The Hanover Notes bear interest at the rate of 12% per annum and mature eight months after issuance. The Hanover Notes are convertible at the option of the holder at a price equal to 75% of the average of the three lowest volume weighted average prices during the ten consecutive trading day period immediately prior to the date of conversion. The Hanover Notes contain standard default provisions and provisions for adjustment for the conversion price in the event of subsequent equity sales. For financial accounting purposes, the conversion feature embedded in the Hanover Notes were considered derivatives. The fair values of the Hanover Notes conversion features were estimated at inception and recorded as a debt discount and is being recorded to interest expense over the life of the Hanover Notes. The derivatives will be valued at each reporting date and the change in estimated fair value will result in a gain or loss recorded in the statement of operations. The estimated fair value of the Hanover Notes conversion were $204,498. We estimated the fair value of the Hanover Notes conversion feature using the Black-Scholes option pricing model using the following assumptions:
	Assumptions:		October 15, 2012			November 8, 2012			November 8, 2012
	Expected life			0.7 years			0.7 years			0.7 years
	Expected volatility			133.3	%		138	%		163.9	%
	Dividends			None			None			None
	Risk-free interest rate			0.15	%		0.15	%		0.1	%
		•		The estimated fair value of the Hanover Notes conversion features was $152,000 at September 30, 2013. We estimated the fair value of the Hanover Notes conversion feature at September 30, 2013 using the Black-Scholes option pricing model using the following assumptions:
	Assumptions:		September 30, 2013
Expected life			0.3 years
Expected volatility			125	%
Dividends			None
Risk-free interest rate			0.02	%
	•		On January 28, 2013, we entered into an Exchange Agreement (the “Exchange Agreement”) with IBC Funds LLC (“IBC”), pursuant to which we agreed to issue to IBC convertible notes (the “IBC Notes”), in the aggregate principal amount of up to $2.0 million, in exchange for an equal amount of participation interests in certain subordinated convertible debentures (the “Subordinated Notes”). Pursuant to various note purchase agreements dated as of January 25, 2013 (the “IBC Purchase Agreement”), IBC agreed to acquire, in tranches through on or around November 28, 2013, participation interests in the Subordinated Notes up to $2.0 million. The total issuances in 2013 were $2.0 million under the Exchange Agreement, pursuant to which we issued an IBC Note in exchange for a participation interest in a Subordinated Notes. The IBC Notes bear interest at the rate of 8% per annum and mature 9 months after the date of issuance. The IBC Notes are convertible at the option of the holder at a conversion price equal to 65% of the three lowest bid price during the ten consecutive trading day period immediately prior to the date of conversion. The IBC Notes contain standard default provisions and provisions for adjustment of the conversion price in the event of subsequent equity sales. We are in default under the Exchange Agreement on the conversion of our outstanding promissory note with IBC on April 23, 2013 as there are no available shares to complete IBC’s request to convert the debt into non restricted stock. For financial accounting purposes, the conversion features embedded in the IBC Notes were considered derivatives. The fair values of the IBC Notes conversion features were estimated at inception and recorded as a debt discount and is being recorded to interest expense over the life of the IBC Notes. The derivatives will be valued at each reporting date and the change in estimated fair value will result in a gain or loss recorded in the statement of operations. The estimated fair value of the IBC Notes conversion feature were $2.8 million. We estimated the fair value of the IBC Notes conversion feature using the Black-Scholes option pricing model using the following assumptions:
Assumptions:		January 28, 2013			February 8, 2013
Expected life			1 year			1 year
Expected volatility			226.5	%		247.4	%
Dividends			None			None
Risk-free interest rate			0.16	%		0.14	%
	•		The estimated fair value of the IBC Notes conversion features was $182,000 at September 30, 2013. We estimated the fair value of the IBC Notes conversion feature at September 30, 2013 using the Black-Scholes option pricing model using the following assumptions:
Assumptions:		September 30, 2013
Expected life			0.9 years
Expected volatility			270.2	%
Dividends			None
Risk-free interest rate			0.1	%
	•		On March 8, 2013, we entered into an Exchange Agreement (the “Exchange Agreement”) with Ironridge Global IV, Ltd. (“Ironridge”), pursuant to which we agreed to issue to Ironridge convertible notes (the “Ironridge Notes”), in the aggregate principal amount of up to $4.0 million, in exchange for an equal amount of participation interests in certain secured promissory notes (the “Secured Notes”) issued by us to Horizon to be acquired by Ironridge. Pursuant to a participation purchase agreement dated as of March 8, 2013 (the “Ironridge Purchase Agreement”), Ironridge agreed to acquire, in tranches through on or around June 1, 2014, participation interests in the Secured Notes from Horizon up to the maximum amount of the principal outstanding, together with accrued interest and fees. The total issuances in 2013 were $250,000 under the Exchange Agreement, pursuant to which we issued an Ironridge Note in exchange for a participation interest in a Secured Note. The Ironridge Notes do not bear interest and mature 12 months after the date of issuance. The Ironridge Notes are convertible at the option of the holder at a conversion price equal to 70% of the closing bid price on the trading day prior to the date of conversion, subject to certain conversion price limitations. For financial accounting purposes, the conversion feature embedded in the Ironridge Note was considered a derivative. The fair values of the Ironridge Notes conversion features were estimated at inception and recorded as a debt discount and is being recorded to interest expense over the life of the Ironridge Notes. The derivatives will be valued at each reporting date and the change in estimated fair value will result in a gain or loss recorded in the statement of operations. The estimated fair value of the Ironridge Notes conversion feature was $588,095. We estimated the fair value of the Ironridge Notes conversion feature using the Black-Scholes option pricing model using the following assumptions:
Assumptions:		March 8, 2013
Expected life			1 year
Expected volatility			249	%
Dividends			None
Risk-free interest rate			0.15	%
	•		The estimated fair value of the Ironridge Notes conversion features was $1.8 million at September 30, 2013. We estimated the fair value of the Ironridge Notes conversion feature at September 30, 2013 using the Black-Scholes option pricing model using the following assumptions:
Assumptions:		September 30, 2013
Expected life			0.7 years
Expected volatility			214.6	%
Dividends			None
Risk-free interest rate			0.1	%
Mortgage Payable
Effective October 24, 2011, Cereplast Italia S.p.A (“Cereplast Italia”), our wholly owned subsidiary, completed its acquisition of an industrial plant and the real estate on which the industrial plant is located in Cannara, Italy. The Deed of Sale between Cereplast Italia and Societa Regionale Per Lo Sviluppo Economico Dell’Umbria — Sviluppumbria S.p.A, provided for an aggregate purchase price of approximately $6.5 million. The acquisition had previously been secured by a mortgage loan with Banca Monte Dei Paschi Di Sienna S.p.A for the principal of $4.5 million.
Effective October 25, 2012, Cereplast Italia renegotiated the terms of the acquisition of the industrial plant located in Cannara, Italy with Societa Regionale Per Lo Sviluppo Economico Dell’Umbria — Sviluppumbria S.p.A In connection with our renegotiation, the sale of the land was rescinded and Cereplast Italia retained the existing building, reducing the value of the purchase price to approximately $4.2 million. In exchange, Cereplast Italia rescinded the Mortgage loan with Banca Monte Dei Paschi Di Sienna S.p.A for the principal of $4.5 million in paying a limited rescission fee and cancelled all credit facility. Sviluppumbria S.p.A accepted to carry over a Note secured by the building, in amount of $3.2 million with an annual interest rate of 5.5%, until a new lender is secured. During that period of time Cereplast Italia agreed to negotiate the refurbishment of the building by a third party at no cost. Svilluppumprbia requested Cereplast Italia to represent a plan of development to occur within a longer period of time.
In July 2013, Cereplast Italia was unable to secure a new lender to repay the Note owed to Sviluppumbria S.p.A and is in default. However, during the refurbishment due diligence process, Cereplast Italia identified significant undisclosed environmental issues and requested additional time to clarify the situation. We are continuing an ongoing discussion to explore mutually acceptable alternatives with Sviluppumbria S.p.A. Potential resolutions include, but are not limited to, a revised payment plan with significant financial concessions. If we are unable to reach an agreement with Sviluppumbria S.p.A,,Cereplast Italia may abandon the property and pursue recovery of its full investment.

Fair_Value_Measurements

Fair Value Measurements	9 Months Ended
	Sep. 30, 2013
Fair Value Measurements	'
	5. FAIR VALUE MEASUREMENTS
	We have certain financial instruments that are measured at fair value on a recurring basis. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-tier fair value hierarchy has been established which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). These tiers include:
		•		Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets;
		•		Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and
		•		Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
	We measure certain financial instruments at fair value on a recurring basis. Assets and liabilities measured at fair value on a recurring basis are as follows at September 30, 2013 (in thousands):
			Total			Quoted Prices in		Significant		Significant
						Active Markets		Other		Unobservable
						for Identical		Observable		Inputs
						Assets		Inputs		(Level 3)
						(Level 1)		(Level 2)
	Assets
	None		$	—		$	—	$	—	$	—
	Total assets measured at fair value		$	—		$	—	$	—	$	—
	Liabilities
	Derivative liability (1)		$	15,142		$	—	$	—	$	15,142
	Total liabilities measured at fair value		$	15,142		$	—	$	—	$	15,142
	-1	See Note 4 for additional discussion.
	The table below presents our assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) at September 30, 2013. We classify financial instruments in Level 3 of the fair value hierarchy when there is reliance on at least one significant unobservable input to the valuation model.
	(in thousands)		Derivative
			Liability
	Balance at December 31, 2012		$	3,189
	Total gains or losses (realized and unrealized)
	Included in net loss			21,629
	Valuation adjustment			(9,676	)
	Purchases, issuances, and settlements, net			—
	Transfers to Level 3			—
	Balance at September 30, 2013		$	15,142

Leases

Leases	9 Months Ended
	Sep. 30, 2013
Leases	'
	6. LEASES
	We currently operate out of our manufacturing facility in Seymour, IN. The lease underlying this facility is summarized below:
		•	Indiana Facility — The Seymour facility consists of approximately 105,000 square feet used as a manufacturing and distribution facility for our products. The lease commenced in January 2008, with a ten year term expiring in January 2018. Our current monthly rent is $25,000.

Major_Customers_and_Foreign_Sa

Major Customers and Foreign Sales	9 Months Ended
	Sep. 30, 2013
Major Customers and Foreign Sales	'
	7. MAJOR CUSTOMERS AND FOREIGN SALES
	The following customers accounted for 10% or more of net revenue in the periods presented:
		Three Months Ended Sept 30,						Nine Months Ended Sept 30,
		2013			2012			2013			2012
	Customer A		—			80.3	%		—			49.8	%
	Customer B		—			14.5	%		—			18	%
	Customer C		—			—			—			10.5	%
	Customer D		22.6	%		—			31	%		—
	Customer E		18.7	%		—			19.8	%		—
	Customer F		15.9	%		—			—			—
	Our net sales were made up of sales to customers in the following geographic regions (in thousands):
		Three Months Ended September 30,
		2013						2012
	North America	$	139			31.9	%	$	94			19.7	%
	International
	Italy		297			68.1	%		383			80.3	%
	Net sales	$	436			100	%	$	477			100	%
		Nine Months Ended September 30,
		2013						2012
	North America	$	203			9.5	%	$	338			44	%
	International
	Italy		1,887			88.5	%		389			50.6	%
	Germany		21			1	%		14			1.8	%
	India		21			1	%		—			—
	Other		—			—			29			3.6	%
	Net sales	$	2,132			100	%	$	770			100	%

Income_Tax

Income Tax	9 Months Ended
	Sep. 30, 2013
Income Tax	'
	8. INCOME TAX
	We are subject to U.S. and California income tax. Subject to limited statutory exceptions, we are no longer subject to federal, state and local or non-U.S. income tax examinations by tax authorities for years before 2006. We are not presently liable for any income taxes nor are we undergoing any tax examinations by the Internal Revenue Service. No Deferred Tax Assets or Deferred Tax Liabilities are included in our balance sheets at September 30, 2013 or December 31, 2012.
	Our policy is to recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses.

Common_Stock_Warrants

Common Stock Warrants	9 Months Ended
	Sep. 30, 2013
Common Stock Warrants	'
	9. COMMON STOCK WARRANTS
	In connection with the registered direct offering of 3,125,000 Units effective November 2011, we issued warrants to purchase 2,343,750 of our common stock. The per share exercise price of the warrants is $2.20. The warrants are exercisable at any time on or after the date that is 180 days after the initial issuance on the date of closing and will expire on a date that is five years from the date of closing.
	In connection with the issue of 2,596,500 shares of common stock to accredited investors pursuant to the Securities Purchase Agreement entered into on January 26, 2011, we issued warrants to purchase 649,128 shares of the Company’s common stock. The warrants have an exercise price of $6.35 per share and are exercisable for a period of five years commencing August 1, 2011.
	In connection with the issue of 1,000,000 shares of common stock pursuant to a Subscription Agreement entered into on April 30, 2012, we issued a warrant to purchase 100,000 shares of our common stock for offering costs. The warrants have an exercise price of $0.50 per share and are exercisable for a period of seven years.
	In connection with the Amendment with Compass Horizon Funding Company, LLC, we issued a warrant representing the right to purchase 225,000 shares of our common stock at an exercise price of $0.01 per share. In addition, we issued a restated and amended warrant to purchase 140,000 shares of the Company’s common stock at an exercise price of $0.26.
	In connection with our JMJ Note, we issued a warrant to purchase 1,886,792 shares of our common stock. The warrants had an initial exercise price of $0.21 per share and are exercisable for a period of four years. The warrants also contained a reset provision that was triggered upon conversion of debts during the fourth quarter of 2012 and again during the first quarter of 2013. As a result, the number of warrants issued increased to 30,769,231 and the exercise price decreased to $0.013 in connection with the JMJ Note as of December 31, 2012 and 64,102,564 warrants with an exercise price of $0.0062 as of September 30, 2013.
	A summary of warrant activity for the period ending September 30, is as follows (in thousands except per share data):
		2013				2012
		Number of		Weighted		Number of		Weighted
		Warrants		Average		Warrants		Average
				Exercise Price				Exercise Price
	Outstanding—January 1,		35,313	$	0.41		4,219	$	5.09
	Issued		33,333		0.006		—		—
	Exercised		—		—		—		—
	Outstanding—September 30,		68,646		0.22		4,219		5.09
	Warrants exercisable at end of period		68,646	$	0.22		4,219	$	5.09

Summary_of_Significant_Account1

Summary of Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2013
Basis of Presentation and Consolidation	'
	Basis of Presentation and Consolidation
	The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). The unaudited consolidated financial statements include the financial condition and results of operations of our wholly-owned subsidiary, Cereplast International, S.A., a Luxembourg company organized during the year ended December 31, 2008, for the purpose of conducting sales operations in Europe. Intercompany balances and transactions have been eliminated in consolidation. The results of operations for interim periods are not necessarily indicative of the results that may be expected for a full year. These financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012.
Use of Estimates	'
	Use of Estimates
	The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the accompanying financial statements. Significant estimates made in preparing these financial statements include the estimate of useful lives of property and equipment, the deferred tax valuation allowance and the fair value of stock options. Actual results could differ from those estimates.
Cash	'
	Cash
	We consider all highly liquid investments with an original maturity of three months or less to be cash equivalents. At various times throughout the year, we may have exceeded federally insured limits. At September 30, 2013 and December 31, 2012, balances in our cash accounts did not exceed federally insured limits of $0.25 million. We have not experienced any losses in such accounts and we do not believe we are exposed to any significant credit risk on cash and cash equivalents.
Concentration of Credit Risk	'
	Concentration of Credit Risk
	We had no unrestricted cash at September 30, 2013. We had unrestricted cash totaling $0.2 million at December 31, 2012. The unrestricted cash and cash equivalents are held for working capital purposes. We do not enter into investments for trading or speculative purposes. Some of the securities in which we invest, however, may be subject to market risk. This means that a change in prevailing interest rates may cause the principal amount of the investment to fluctuate. To minimize this risk, we intend to maintain our portfolio of cash equivalents and short-term investments in a variety of securities, including commercial paper, money market funds, debt securities and certificates of deposit. Due to the short-term nature of these investments, we believe that we do not have any material exposure to changes in the fair value of our investment portfolio as a result of changes in interest rates. We actively monitor changes in interest rates.
Going Concern	'
	Going Concern
	We have incurred a net loss of $34.0 million for the nine months ended September 30, 2013, and $30.2 million for the year ended December 31, 2012, and have an accumulated deficit of $121.1 million as of September 30, 2013. Based on our operating plan, our existing working capital will not be sufficient to meet the cash requirements to fund our planned operating expenses, capital expenditures and working capital requirements through December 31, 2013 without additional sources of cash. This raises substantial doubt about our ability to continue as a going concern.
	Our plan to address the shortfall of working capital is to generate additional cash through a combination of refinancing existing credit facilities, incremental product sales and raising additional capital through debt and equity financings. We are confident that we will be able to deliver on our plans, however, there are no assurances that we will be able to obtain any sources of financing on acceptable terms, or at all.
	If we cannot obtain sufficient additional financing in the short-term, we may be forced to curtail or cease operations or file for bankruptcy. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should we be forced to take such actions.
Fair Value of Financial Instruments	'
	Fair Value of Financial Instruments
	The carrying amounts of our financial instruments as of September 30, 2013 and December 31, 2012, which include cash, accounts receivable, unbilled receivable, accounts payable, accrued expenses, loans payable and convertible subordinated notes approximate their fair values due to the short-term nature of these instruments.
Accounts Receivable	'
	Accounts Receivable
	We maintain an allowance for doubtful accounts for estimated losses that may arise if any of our customers are unable to make required payments. Management performs a quantitative and qualitative review of the receivables past due from customers on a monthly basis. Quantitative factors include customer’s past due balance, prior payment history, recent sales activity and days sales outstanding. Qualitative factors include macroeconomic environment, current product demand, estimated inventory levels and customer’s financial position. For our accounts receivable balances that have been fully reserved, we may have access to repossess unsold products held at customer locations as recourse for payment defaults. The fair market value of these products are considered as potential recovery in estimating net losses from uncollectible accounts. We record an allowance against uncollectible items for each customer after all reasonable means of collection have been exhausted, and the potential for recovery is considered remote. The allowance for doubtful accounts was approximately $0 and $15.0 million as of September 30, 2013 and December 31, 2012, respectively.
Inventory	'
	Inventory
	Inventories are stated at the lower of cost (first-in, first-out basis) or market, and consist primarily of raw materials used in the manufacturing of bioplastic resins, finished bioplastic resins and finished goods. Inventories are reviewed for excess and obsolescence and a reserve is established accordingly. As of September 30, 2013 and December 31, 2012, inventories consisted of the following (in thousands):
			September 30, 2013			December 31, 2012
			(Unaudited)
	Raw Materials		$	1,961		$	1,950
	Bioplastic Resins			3,853			5,082
	Finished Goods			41			42
	Packaging Materials			66			66
	WIP			—			—
	Obsolescence Reserve			(199	)		(199	)
	Inventory, net		$	5,722		$	6,941
Property and Equipment	'
	Property and Equipment
	Property and equipment are stated at cost, and depreciation is computed on the straight-line method over the estimated useful lives of the assets. The estimated useful lives of the assets are between five and seven years. Repairs and maintenance expenditures are charged to expense as incurred. During the three months ended September 30, 2013, we recorded in an impairment of $0.5 million on our Building in Italy to adjust its net book value to equal the carrying value of its related mortgage to reflect our current dispute with the seller, as disclosed in Note 4. Property and Equipment consist of the following (in thousands):
			September 30, 2013			December 31, 2012
			(Unaudited)
	Equipment		$	5,732		$	5,732
	Building			3,835			4,218
	Construction In Progress			1,189			1,255
	Auto			12			12
	Furniture and Fixtures			297			297
	Leasehold Improvements			87			87
				11,152			11,601
	Accumulated Depreciation			(4,660	)		(4,004	)
	Property and Equipment, Net		$	6,492		$	7,597
Intangible Assets	'
	Intangible Assets
	Intangible assets are stated at cost and consist primarily of patents and trademarks. Amortization is computed on the straight-line method over the estimated life of these assets, estimated to be between five and fifteen years. Intangible assets consist of the following (in thousands):
			September 30, 2013			December 31, 2012
			(Unaudited)
	Intangible Assets		$	296		$	294
	Accumulated Amortization			(57	)		(49	)
	Intangible Assets, Net		$	239		$	245
Deferred Income Taxes	'
	Deferred Income Taxes
	Deferred income taxes are provided using the liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of the changes in tax laws and rates of the date of enactment.
	The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination.
	Interest and penalties associated with unrecognized tax benefits are classified as additional income taxes in the statement of income.
Revenue Recognition	'
	Revenue Recognition
	We recognize revenue at the time of shipment of products, when the following fundamental criteria are met: (i) persuasive evidence of an arrangement exists; (ii) delivery has occurred; (iii) the price to the customer is fixed or determinable; and (iv) collection of the sales price is probable.
	Certain of our product sales are made to distributors under agreements with generally the same terms of sale and credit as all other customer agreements. Revenue from product sales to our customers, including our customers who are distributors, is recognized upon shipment provided the above noted fundamental criteria of revenue recognition are met. The sale of products to our customers who are distributors is not contingent upon the distributor selling the product to the end-user, and our current agreements with distributors do not have any rights of return.
Impairment of Long-Lived Assets	'
	Impairment of Long-Lived Assets
	We evaluate long-lived assets for impairment whenever events or changes in circumstances indicate the carrying value may not be recoverable. Factors we consider include:
		•		Significant changes in the operational performance or manner of use of acquired assets or the strategy for our overall business,
		•		Significant negative market conditions or economic trends, and
		•		Significant technological changes or legal factors which may render the asset obsolete.
	We evaluate long-lived assets based upon an estimate of future undiscounted cash flows. Recoverability of these assets is measured by comparing the carrying value to the future net undiscounted cash flows expected to be generated by the asset. An impairment loss is recognized when the carrying value exceeds the undiscounted future cash flows estimated to result from the use and eventual disposition of the asset. Future net undiscounted cash flows include estimates of future revenues and expenses which are based on projected growth rates. We continually use judgment when applying these impairment rules to determine the timing of the impairment tests, the undiscounted cash flows used to assess impairments and the fair value of a potentially impaired asset. The reasonableness of our judgment could significantly affect the carrying value of our long-lived assets.
	During fiscal year 2012, and continuing through the third quarter of fiscal 2013, we experienced a significant decline in sales volume due to liquidity and sales resource constraints, which we believe to be temporary. Our reduced production volume has not changed the manner in which we use our equipment, nor its physical condition. Our current estimate of future net undiscounted cash flows indicates that the carrying value of our long-lived assets is recoverable and therefore no impairment is recorded for equipment.
	During the third quarter of 2013, Cereplast Italia is in default with its mortgage payable related to our building in Italy. We have recorded an impairment of $0.5 million to adjust the carrying value of our building to equal the outstanding value of its related mortgage to reflect our potential loss exposure based on this default.
Derivative Financial Instruments	'
	Derivative Financial Instruments
	Our derivative financial instruments consist of embedded and free-standing derivatives related primarily to the convertibles notes. The embedded derivatives include the conversion features, and liquidated damages clauses in the registration rights agreement. The accounting treatment of derivative financial instruments requires that we record the derivatives and related warrants at their fair values as of the inception date of the agreement and at fair value as of each subsequent balance sheet date. The recorded value of all derivatives at September 30, 2013 totaled approximately $15.1 million. Any change in fair value of these instruments will be recorded as non-operating, non-cash income or expense at each reporting date. If the fair value of the derivatives is higher at the subsequent balance sheet date, the Company will record a non-operating, non-cash charge. If the fair value of the derivatives is lower at the subsequent balance sheet date, the Company will record non-operating, non-cash income. At September 30, 2013, derivatives were valued primarily using the Black-Scholes Option Pricing Model.
Comparative Figures	'
	Comparative Figures
	Certain of the prior year figures have been reclassified to conform to the presentation adopted in the current year.

Summary_of_Significant_Account2

Summary of Significant Accounting Policies (Tables)	9 Months Ended
	Sep. 30, 2013
Schedule of Inventories	'
	As of September 30, 2013 and December 31, 2012, inventories consisted of the following (in thousands):
		September 30, 2013			December 31, 2012
		(Unaudited)
	Raw Materials	$	1,961		$	1,950
	Bioplastic Resins		3,853			5,082
	Finished Goods		41			42
	Packaging Materials		66			66
	WIP		—			—
	Obsolescence Reserve		(199	)		(199	)
	Inventory, net	$	5,722		$	6,941
Schedule of Property and Equipment	'
	Property and Equipment consist of the following (in thousands):
		September 30, 2013			December 31, 2012
		(Unaudited)
	Equipment	$	5,732		$	5,732
	Building		3,835			4,218
	Construction In Progress		1,189			1,255
	Auto		12			12
	Furniture and Fixtures		297			297
	Leasehold Improvements		87			87
			11,152			11,601
	Accumulated Depreciation		(4,660	)		(4,004	)
	Property and Equipment, Net	$	6,492		$	7,597
Schedule of Intangible Assets	'
	Intangible assets consist of the following (in thousands):
		September 30, 2013			December 31, 2012
		(Unaudited)
	Intangible Assets	$	296		$	294
	Accumulated Amortization		(57	)		(49	)
	Intangible Assets, Net	$	239		$	245

Capital_Stock_Tables

Capital Stock (Tables)	9 Months Ended
	Sep. 30, 2013
Schedule of Assumptions Used in Estimation of Grant Date Fair Value of Options Using Black-Scholes Option Pricing Model, Assuming No Dividends	'
	The grant date fair value was estimated at the date of grant using the Black-Scholes option pricing model, assuming no dividends and the following assumptions:
		January 14, 2011
	Average risk-free interest rate		2.29	%
	Average expected life (in years)		6
	Volatility		41.9	%
Summary of Stock Option Activity	'
	We settle stock option exercises with newly issued shares of our common stock (in thousands except, per share data):
		2013					2012
		Shares			Weighted		Shares		Weighted
					Average				Average
					Exercise Price				Exercise Price
	Outstanding—January 1		204		$	5.62		373	$	8.65
	Granted at fair value		—			—		—		—
	Exercised		—			—		—		—
	Cancelled/forfeited		(200	)		—		—		—
	Outstanding—September 30		4			22.4		373		8.65
	Options exercisable at September 30		4		$	22.4		193	$	11.77
Summary of Information About Stock Options	'
	The following table summarizes information about stock options as of September 30, 2013, (in thousands, except per share data):
		Options Outstanding									Options Exercisable
	Range of Exercise Prices	Shares			Weighted		Weighted		Aggregate		Shares		Weighted		Weighted		Aggregate
					Average		Average		Intrinsic				Average		Average		Intrinsic
					Exercise		Remaining		Value				Exercise		Remaining		Value
					Price		Contract						Price		Contract
							Life								Life
	$5.32—$22.40		4		$	22.4		1.42	$	—		4	$	22.4		1.42	$	—
Schedule of Assumptions Used in Estimating Fair Value of Embedded Derivatives Liability Using Black-Scholes Option Pricing Model	'
	We estimated the fair value of the Embedded Derivative Liability using the Black-Scholes option pricing model using the following assumptions:
	Assumptions:	September 30, 2013
	Expected life		0.6 years
	Expected volatility		270.2	%
	Dividends		None
	Risk-free interest rate		0.04	%
Schedule of Assumptions Used in Estimating Fair Value of Conversion Options Using Black-Scholes Options Pricing Model	'
	We estimated the fair value of the conversion option using the Black-Scholes option pricing model using the following assumptions:
	Assumptions:	September 30, 2013
	Expected life		0.3 years
	Expected volatility		125	%
	Dividends		None
	Risk-free interest rate		0.02	%

Loans_Payable_and_Convertible_1

Loans Payable and Convertible Subordinated Notes (Tables)	9 Months Ended
	Sep. 30, 2013
Schedule of Assumptions Used in Estimating Fair Value of Warrants Using Black-Scholes Option Pricing Model	'
	We estimated the fair value of the warrants using the Black-Scholes option pricing model using the following assumptions:
		December 22, 2010
	Assumptions:
	Expected Life		7 years
	Expected volatility		39.9	%
	Dividends		None
	Risk-free interest rate		2.74	%
	We estimated the fair value of the New and Amended Warrants using the Black-Scholes option pricing model using the following assumptions:
	Assumptions:	May 1, 2012
	Expected life		7 years
	Expected volatility		88.2	%
	Dividends		None
	Risk-free interest rate		1.35	%
			We estimated the fair value of the JMJ Warrants and JMJ Note conversion features using the Black-Scholes option pricing model using the following assumptions:
	Assumptions:	June 26, 2012			August 9, 2012
	Expected life		4 years			4 years
	Expected volatility		95.4	%		97.7	%
	Dividends		None			None
	Risk-free interest rate		0.59	%		0.66	%
			We estimated the fair value of the JMJ Warrants and JMJ Note conversion feature at September 30, 2013 using the Black-Scholes option pricing model using the following assumptions:
	Assumptions:	September 30, 2013
	Expected life		2.7 years
	Expected volatility		180.7	%
	Dividends		None
	Risk-free interest rate		0.63	%
			We estimated the fair value of the Magna Notes conversion feature using the Black-Scholes option pricing model using the following assumptions:
	Assumptions:	October 15, 2012			November 8, 2012
	Expected life		1 year			1 year
	Expected volatility		155.6	%		125.9	%
	Dividends		None			None
	Risk-free interest rate		0.19	%		0.2	%
			We estimated the fair value of the Magna Notes conversion feature at September 30, 2013 using the Black-Scholes option pricing model using the following assumptions:
	Assumptions:	September 30, 2013
	Expected life		0.3 years
	Expected volatility		125	%
	Dividends		None
	Risk-free interest rate		0.02	%
			We estimated the fair value of the Hanover Notes conversion feature using the Black-Scholes option pricing model using the following assumptions:
	Assumptions:	October 15, 2012			November 8, 2012			November 8, 2012
	Expected life		0.7 years			0.7 years			0.7 years
	Expected volatility		133.3	%		138	%		163.9	%
	Dividends		None			None			None
	Risk-free interest rate		0.15	%		0.15	%		0.1	%
			We estimated the fair value of the Hanover Notes conversion feature at September 30, 2013 using the Black-Scholes option pricing model using the following assumptions:
	Assumptions:	September 30, 2013
	Expected life		0.3 years
	Expected volatility		125	%
	Dividends		None
	Risk-free interest rate		0.02	%
			We estimated the fair value of the IBC Notes conversion feature using the Black-Scholes option pricing model using the following assumptions:
	Assumptions:	January 28, 2013			February 8, 2013
	Expected life		1 year			1 year
	Expected volatility		226.5	%		247.4	%
	Dividends		None			None
	Risk-free interest rate		0.16	%		0.14	%
			We estimated the fair value of the IBC Notes conversion feature at September 30, 2013 using the Black-Scholes option pricing model using the following assumptions:
	Assumptions:	September 30, 2013
	Expected life		0.9 years
	Expected volatility		270.2	%
	Dividends		None
	Risk-free interest rate		0.1	%
			We estimated the fair value of the Ironridge Notes conversion feature using the Black-Scholes option pricing model using the following assumptions:
	Assumptions:	March 8, 2013
Expected life		1 year
Expected volatility		249	%
Dividends		None
Risk-free interest rate		0.15	%
		We estimated the fair value of the Ironridge Notes conversion feature at September 30, 2013 using the Black-Scholes option pricing model using the following assumptions:
Assumptions:	September 30, 2013
Expected life		0.7 years
Expected volatility		214.6	%
Dividends		None
Risk-free interest rate		0.1	%

Fair_Value_Measurements_Tables

Fair Value Measurements (Tables)	9 Months Ended
	Sep. 30, 2013
Schedule of Fair Value of Assets and Liabilities Measured on Recurring Basis	'
	We measure certain financial instruments at fair value on a recurring basis. Assets and liabilities measured at fair value on a recurring basis are as follows at September 30, 2013 (in thousands):
			Total			Quoted Prices in		Significant		Significant
						Active Markets		Other		Unobservable
						for Identical		Observable		Inputs
						Assets		Inputs		(Level 3)
						(Level 1)		(Level 2)
	Assets
	None		$	—		$	—	$	—	$	—
	Total assets measured at fair value		$	—		$	—	$	—	$	—
	Liabilities
	Derivative liability (1)		$	15,142		$	—	$	—	$	15,142
	Total liabilities measured at fair value		$	15,142		$	—	$	—	$	15,142
	-1	See Note 4 for additional discussion.
Fair Value of Assets Measured on Recurring Basis Using Significant Unobservable Input Reconciliation	'
	The table below presents our assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) at September 30, 2013. We classify financial instruments in Level 3 of the fair value hierarchy when there is reliance on at least one significant unobservable input to the valuation model.
	(in thousands)		Derivative
			Liability
	Balance at December 31, 2012		$	3,189
	Total gains or losses (realized and unrealized)
	Included in net loss			21,629
	Valuation adjustment			(9,676	)
	Purchases, issuances, and settlements, net			—
	Transfers to Level 3			—
	Balance at September 30, 2013		$	15,142

Major_Customers_and_Foreign_Sa1

Major Customers and Foreign Sales (Tables)	9 Months Ended
	Sep. 30, 2013
Schedule of Customers Accounting for 10% or More of Net Revenue	'
	The following customers accounted for 10% or more of net revenue in the periods presented:
		Three Months Ended Sept 30,						Nine Months Ended Sept 30,
		2013			2012			2013			2012
	Customer A		—			80.3	%		—			49.8	%
	Customer B		—			14.5	%		—			18	%
	Customer C		—			—			—			10.5	%
	Customer D		22.6	%		—			31	%		—
	Customer E		18.7	%		—			19.8	%		—
	Customer F		15.9	%		—			—			—
Summary of Sales by Geographic Area as Percentage of Net Sales	'
	Our net sales were made up of sales to customers in the following geographic regions (in thousands):
		Three Months Ended September 30,
		2013						2012
	North America	$	139			31.9	%	$	94			19.7	%
	International
	Italy		297			68.1	%		383			80.3	%
	Net sales	$	436			100	%	$	477			100	%
		Nine Months Ended September 30,
		2013						2012
	North America	$	203			9.5	%	$	338			44	%
	International
	Italy		1,887			88.5	%		389			50.6	%
	Germany		21			1	%		14			1.8	%
	India		21			1	%		—			—
	Other		—			—			29			3.6	%
	Net sales	$	2,132			100	%	$	770			100	%

Common_Stock_Warrants_Tables

Common Stock Warrants (Tables)	9 Months Ended
	Sep. 30, 2013
Summary of Warrant Activity	'
	A summary of warrant activity for the period ending September 30, is as follows (in thousands except per share data):
		2013				2012
		Number of		Weighted		Number of		Weighted
		Warrants		Average		Warrants		Average
				Exercise Price				Exercise Price
	Outstanding—January 1,		35,313	$	0.41		4,219	$	5.09
	Issued		33,333		0.006		—		—
	Exercised		—		—		—		—
	Outstanding—September 30,		68,646		0.22		4,219		5.09
	Warrants exercisable at end of period		68,646	$	0.22		4,219	$	5.09

Organization_and_Line_of_Busin1

Organization and Line of Business - Additional Information (Detail)	9 Months Ended
	Sep. 30, 2013
	Item
Product Information [Line Items]	'
Number of product families through which operations are conducted	2
Number of pending patent applications in the U.S. and abroad	8
Number of registered marks	45
Number of pending trademark applications in the U.S. and abroad	21
U.S.	'
Product Information [Line Items]	'
Number of registered patents	6
Mexican	'
Product Information [Line Items]	'
Number of registered patents	1
Cereplast Compostables resins	'
Product Information [Line Items]	'
Number of commercial grades offered	13
Cereplast Sustainables resins	'
Product Information [Line Items]	'
Maximum replacement of petroleum-based content of traditional plastics with materials from renewable resources (as a percent)	90.00%
Number of commercial grades offered	6
Cereplast Hybrid resins	'
Product Information [Line Items]	'
Number of commercial grades offered	4
Maximum replacement of petroleum content in conventional plastics with bio-based materials (as a percent)	55.00%

Summary_of_Significant_Account3

Summary of Significant Accounting Policies - Additional Information (Detail) (USD $)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012
Summary Of Significant Accounting Policies [Line Items]	'	'	'	'	'
Federally insured limits	$250,000	'	$250,000	'	$250,000
Net Loss	-7,271,000	-9,968,000	-34,039,000	-16,275,000	-30,200,000
Accumulated Deficit	-121,136,000	'	-121,136,000	'	-87,097,000
Allowance for doubtful accounts	0	'	0	'	15,000,000
Impairment on building in Italy	500,000	'	'	'	'
Derivative recorded value	15,100,000	'	15,100,000	'	'
Minimum	'	'	'	'	'
Summary Of Significant Accounting Policies [Line Items]	'	'	'	'	'
Estimated useful lives of assets	'	'	'5 years	'	'
Estimated life	'	'	'5 years	'	'
Maximum	'	'	'	'	'
Summary Of Significant Accounting Policies [Line Items]	'	'	'	'	'
Estimated useful lives of assets	'	'	'7 years	'	'
Estimated life	'	'	'15 years	'	'
Cash | Credit Risk	'	'	'	'	'
Summary Of Significant Accounting Policies [Line Items]	'	'	'	'	'
Unrestricted cash	$0	'	$0	'	$200,000

Schedule_of_Inventories_Detail

Schedule of Inventories (Detail) (USD $)	Sep. 30, 2013	Dec. 31, 2012
In Thousands, unless otherwise specified
Inventory [Line Items]	'	'
Raw Materials	$1,961	$1,950
Bioplastic Resins	3,853	5,082
Finished Goods	41	42
Packaging Materials	66	66
WIP	'	'
Obsolescence Reserve	-199	-199
Inventory, net	$5,722	$6,941

Schedule_of_Property_and_Equip

Schedule of Property and Equipment (Detail) (USD $)	Sep. 30, 2013	Dec. 31, 2012
In Thousands, unless otherwise specified
Property, Plant and Equipment [Line Items]	'	'
Property and Equipment, Gross	$11,152	$11,601
Accumulated Depreciation	-4,660	-4,004
Property and Equipment, Net	6,492	7,597
Equipment	'	'
Property, Plant and Equipment [Line Items]	'	'
Property and Equipment, Gross	5,732	5,732
Building	'	'
Property, Plant and Equipment [Line Items]	'	'
Property and Equipment, Gross	3,835	4,218
Construction In Progress	'	'
Property, Plant and Equipment [Line Items]	'	'
Property and Equipment, Gross	1,189	1,255
Auto	'	'
Property, Plant and Equipment [Line Items]	'	'
Property and Equipment, Gross	12	12
Furniture and Fixtures	'	'
Property, Plant and Equipment [Line Items]	'	'
Property and Equipment, Gross	297	297
Leasehold Improvements	'	'
Property, Plant and Equipment [Line Items]	'	'
Property and Equipment, Gross	$87	$87

Schedule_of_Intangible_Assets_

Schedule of Intangible Assets (Detail) (USD $)	Sep. 30, 2013	Dec. 31, 2012
In Thousands, unless otherwise specified
Finite-Lived Intangible Assets [Line Items]	'	'
Intangible Assets	$296	$294
Accumulated Amortization	-57	-49
Intangible Assets, Net	$239	$245

Capital_Stock_Additional_Infor

Capital Stock - Additional Information (Detail) (USD $)

9 Months Ended

12 Months Ended

9 Months Ended

1 Months Ended

9 Months Ended

Sep. 30, 2013

Sep. 30, 2012

Dec. 31, 2011

Dec. 31, 2012

Sep. 30, 2013

Sep. 30, 2013

Sep. 30, 2013

Sep. 04, 2013

Jun. 17, 2013

Feb. 27, 2013

Aug. 31, 2012

Sep. 30, 2013

Sep. 30, 2013

Sep. 30, 2013

Lender fees

Minimum

Maximum

Series A Preferred Stock

Series A Preferred Stock

Series A Preferred Stock

Series A Preferred Stock

Series A Preferred Stock

Series A Preferred Stock

Common Stock

Derivative Liability, Current

Capital Stock [Line Items]

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Issuance of common stock pursuant to exchange agreements (in shares)

317,251,420

'

'

'

'

'

'

'

'

'

'

'

'

'

Issuance of common stock pursuant to exchange agreements

$8,700,000

'

'

'

'

'

'

'

'

'

'

'

'

'

Shares of common stock issued in connection with conversion of shares

'

'

'

'

'

'

'

'

'

'

'

361,294,293

'

'

Value of shares of common stock issued in connection with conversion of shares

'

'

'

'

'

'

'

'

'

'

'

12,500,000

'

'

Conversion of preferred shares to common shares

141

'

'

'

'

'

'

'

'

'

'

'

'

'

Shares of common stock issued pursuant to settlement agreement

63,548,299

'

'

'

'

'

'

'

'

'

'

'

'

'

Value of shares of common stock issued pursuant to a settlement agreement

342,000

'

'

'

'

'

'

'

'

'

'

'

'

'

Shares of common stock issued in stock-based compensation

2,000,000

'

'

'

'

'

'

'

'

'

'

'

'

'

Value of shares of common stock issued in stock-based compensation

60,000

'

'

'

'

'

'

'

'

'

'

'

'

'

Shares of common stock issued for consultant fees

3,000,000

'

'

'

'

'

'

'

'

'

'

'

'

7,500,000

Value of shares of common stock issued for consultant fees

83,700

'

'

'

'

'

'

'

'

'

'

'

'

97,500

Shares of common stock issued

'

'

'

'

200,000

'

'

'

'

'

'

'

'

'

Value of shares of common stock issued

'

'

'

'

2,000

'

'

'

'

'

'

'

'

'

Common stock issued

'

'

'

'

'

'

'

'

'

'

'

'

'

184,200,000

Common stock issued for conversion of Series A Preferred Stock

'

'

'

'

'

'

'

134,821,492

115,631,700

190,888,889

'

'

12,300,000

176,700,000

Options granted

'

'

300,000

'

'

'

'

'

'

'

'

'

'

'

Grant-date fair values

'

'

700,000

'

'

'

'

'

'

'

'

'

'

'

Stock-based compensation for awards not expected to be exercised

'

'

200,000

'

'

'

'

'

'

'

'

'

'

'

Stock-based compensation

60,000

51,000

'

'

'

'

'

'

'

'

'

'

'

'

Expiration period

'

'

'

'

'

'5 years

'10 years

'

'

'

'

'

'

'

Vesting period

'3 years

'

'

'

'

'

'

'

'

'

'

'

'

'

Shares available for future grants under the Plan

34,375

'

'

'

'

'

'

'

'

'

'

'

'

'

Closing stock price (in dollars per share)

$0.01

'

'

'

'

'

'

'

'

'

'

'

'

'

Convertible redeemable preferred stock, shares authorized

2,213,000

'

'

500,000

'

'

'

'

'

'

5,000,000

'

'

'

Convertible redeemable preferred stock, shares issued

490

'

'

92

'

'

'

'

'

'

30

'

'

'

Cumulative dividends rate per annum

'

'

'

'

'

'

'

'

'

'

2.50%

'

'

'

Liquidation, dissolution or winding up of company, amount received per share

'

'

'

'

'

'

'

'

'

'

$10,000

'

'

'

Preferred Stock redemption, percentage

'

'

'

'

'

'

'

'

'

'

100.00%

'

'

'

Preferred Stock redemption, period

'

'

'

'

'

'

'

'

'

'

'Upon or after 18 years after the Issuance Date

'

'

'

Preferred Stock redemption, price

'

'

'

'

'

'

'

'

'

'

$10,000

'

'

'

Preferred stock conversion in to share of common stock, price

'

'

'

'

'

'

'

'

'

'

$0.25

'

'

'

Conversion of number of preferred stock into common stock shares

'

'

'

'

'

'

'

'On September 4, 2013, the holder elected to convert 49 shares of Series A Preferred Stock into shares of common stock.

'On June 17, 2013, the holder elected to convert 42 shares of Series A Preferred Stock into shares of common stock.

'On February 27, 2013, the holder elected to convert 50 shares of Series A Preferred Stock into shares of common stock.

'

'

'In connection with the conversion, the Derivative Liability related to the 141 shares of Series A Preferred Stock

'

Common stock share issued

810,757,671

'

'

63,463,659

'

'

'

'

'

'

'

54,000,000

'

'

Remaining common stock shares subscribed to the holder

'

'

'

'

'

'

'

'

'

'

'

80,821,492

'

'

Estimated fair value of embedded derivative

'

'

'

'

'

'

'

'

'

'

'

6,700,000

'

'

Estimated fair value of conversion option

'

'

'

'

'

'

'

'

'

'

'

$30,000

'

'

Schedule_of_Assumptions_Used_i

Schedule of Assumptions Used in Estimation of Grant Date Fair Value of Options Using Black-Scholes Option Pricing Model, Assuming No Dividends (Detail)	1 Months Ended
	Jan. 14, 2011
Assumptions used to Determine Fair Value Options [Line Items]	'
Average risk-free interest rate (as a percent)	2.29%
Average expected life (in years)	'6 years
Volatility (as a percent)	41.90%

Summary_of_Stock_Option_Activi

Summary of Stock Option Activity (Detail) (USD $)	9 Months Ended		12 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2011
Shares	'	'	'
Outstanding at the beginning of the period (in shares)	204,000	373,000	'
Granted at fair value (in shares)	'	'	300,000
Exercised (in shares)	'	'	'
Cancelled/forfeited (in shares)	-200,000	'	'
Outstanding at the end of the period (in shares)	4,000	373,000	373,000
Options exercisable at the end of the period (in shares)	4,000	193,000	'
Weighted Average Exercise Price	'	'	'
Outstanding at the beginning of the period (in dollars per share)	$5.62	$8.65	'
Granted at fair value (in dollars per share)	'	'	'
Exercised (in dollars per share)	'	'	'
Cancelled/forfeited (in dollars per share)	'	'	'
Outstanding at the end of the period (in dollars per share)	$22.40	$8.65	$8.65
Options exercisable at the end of the period (in dollars per share)	$22.40	$11.77	'

Summary_of_Information_About_S

Summary of Information About Stock Options (Detail) ($5.32 - $22.40, USD $)	9 Months Ended
In Thousands, except Per Share data, unless otherwise specified	Sep. 30, 2013
$5.32 - $22.40	'
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]	'
Exercise price, low end of the range (in dollars per share)	$5.32
Exercise price, high end of the range (in dollars per share)	$22.40
Options Outstanding, Shares (in dollars per share)	4
Options Outstanding, Weighted Average Exercise Price (in dollars per share)	$22.40
Options Outstanding, Weighted Average Remaining Contract Life	'1 year 5 months 1 day
Options Exercisable, Aggregate Intrinsic Value	'
Options Exercisable, Shares	4
Options Exercisable, Weighted Average Remaining Contract Life (in dollars per share)	$22.40
Options Exercisable, Weighted Average Remaining Contractual Life	'1 year 5 months 1 day
Options Exercisable, Aggregate Intrinsic Value	'

Recovered_Sheet1

Schedule of Assumptions Used In Estimating Fair Value of Embedded Derivative Liability Using Black-Scholes Options Pricing Model (Detail) (Embedded Derivative Liability)	9 Months Ended
	Sep. 30, 2013
Embedded Derivative Liability	'
Assumptions:	'
Expected Life	'7 months 6 days
Expected volatility	270.20%
Dividends	'
Risk-free interest rate	0.04%

Schedule_of_Assumptions_Used_i1

Schedule of Assumptions Used in Estimating Fair Value of Conversion Options Using Black-Scholes Option Pricing Model (Detail) (Conversion Options)	9 Months Ended
	Sep. 30, 2013
Conversion Options	'
Assumptions:	'
Expected Life	'3 months 18 days
Expected volatility	125.00%
Dividends	'
Risk-free interest rate	0.02%

Loans_Payable_and_Convertible_2

Loans Payable and Convertible Subordinated Notes - Additional Information (Detail) (USD $)

1 Months Ended

9 Months Ended

1 Months Ended

12 Months Ended

1 Months Ended

12 Months Ended

12 Months Ended

9 Months Ended

1 Months Ended

1 Months Ended

1 Months Ended

9 Months Ended

9 Months Ended

1 Months Ended

9 Months Ended

9 Months Ended

1 Months Ended

1 Months Ended

9 Months Ended

1 Months Ended

1 Months Ended

Jan. 25, 2013

Sep. 30, 2013

Oct. 24, 2011

Dec. 31, 2010

Dec. 31, 2011

Dec. 21, 2010

Dec. 31, 2010

Dec. 21, 2010

Dec. 31, 2011

Dec. 21, 2010

Dec. 31, 2011

Dec. 21, 2010

Jun. 30, 2012

Jun. 29, 2012

Sep. 30, 2013

Jun. 30, 2012

Oct. 15, 2012

Sep. 30, 2013

Dec. 31, 2012

Oct. 15, 2012

Oct. 15, 2012

Sep. 30, 2013

Dec. 31, 2012

Oct. 15, 2012

Oct. 25, 2012

Oct. 31, 2011

Sep. 30, 2013

Dec. 31, 2012

Sep. 30, 2013

Jan. 17, 2013

Sep. 30, 2013

Sep. 30, 2013

31-May-11

Sep. 30, 2013

Dec. 31, 2012

Sep. 30, 2013

Jun. 30, 2012

Jun. 02, 2012

Jun. 30, 2012

Sep. 30, 2013

Dec. 31, 2012

Jun. 26, 2012

Sep. 30, 2013

Jun. 26, 2012

Jan. 28, 2013

Sep. 30, 2013

Jan. 28, 2013

Mar. 08, 2013

Sep. 30, 2013

Mar. 08, 2013

Cereplast Italia

Venture Loan Payable

Venture Loan Payable

Venture Loan Payable

Venture Loan Payable

Venture Loan Payable

Loan A

Loan A

Loan B

Loan B

Amended Venture Loan Payable

Amended Venture Loan Payable

Amended Venture Loan Payable

Amended Venture Loan Payable

Magna Notes

Magna Notes

Magna Notes

Magna Notes

Hanover Notes

Hanover Notes

Hanover Notes

Hanover Notes

Mortgage Payable

Mortgage Payable

Short-Term Convertible Notes

Short-Term Convertible Notes

Asher Note

Asher Note

Asher Note

Asher Note

Convertible Subordinated Notes

Convertible Subordinated Notes

Convertible Subordinated Notes

Convertible Subordinated Notes

Convertible Subordinated Notes

Convertible Subordinated Notes

JMJ Note

JMJ Note

JMJ Note

JMJ Note

JMJ Warrants

JMJ Warrants

Convertible Notes To IBC Funds L L C

Convertible Notes To IBC Funds L L C

Convertible Notes To IBC Funds L L C

Convertible Notes To Iron ridge Global IV Ltd

Convertible Notes To Iron ridge Global IV Ltd

Convertible Notes To Iron ridge Global IV Ltd

Industrial plant and real estate

Warrant

Warrant

Restated and amended warrant

Restated and amended warrant

Item

Maximum

Item

Maximum

Industrial plant and real estate

Cereplast Italia

Item

Maximum

Minimum

Maximum

Exchange Agreement

Exchange Agreement

Item

Item

Maximum

Maximum

Industrial plant and real estate

Debt Instrument [Line Items]

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Total loan commitment

'

'

'

'

'

$5,000,000

'

'

'

$2,500,000

'

$2,500,000

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Maturity period of loan

'

'

'

'

'

'

'

'

'39 months

'

'39 months

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Interest rate (as a percent)

'

'

'

'

12.00%

'

'

'

'

'

'

'

'

'

'

'

6.00%

'

'

'

12.00%

'

'

'

'

'

'

'

8.00%

'

'

'

'

'

7.00%

'

'

'

'

'

'

0.00%

'

'

8.00%

'

'

'

'

'

Variable rate basis

'

'

'

'

'One month LIBOR

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Maximum rate used in calculation of variable rate (as a percent)

'

'

'

'

12.00%

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Number of business days preceding the funding of loan used for determination of the variable rate

'

'

'

'

'5 days

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Percentage deducted from variable rate

'

'

'

'

0.30%

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Period of payment of interest

'

'

'

'9 months

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Period of payment of principal

'

'

'

'

'30 months

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Term of warrants

'

'

'

'

'

'

'7 years

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Shares of common stock that can be purchased in exercise of warrants

'

'

'

'

'

'

'

140,000

'

'

'

'

225,000

'

'

140,000

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

1,886,792

64,102,564

30,769,231

1,886,792

'

'

'

'

'

'

'

'

Exercise price of warrants (in dollars per share)

'

'

'

'

'

'

'

4.4

'

'

'

'

'

0.01

'

0.26

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

0.21

0.0062

0.013

0.21

'

'

'

'

'

'

'

'

Estimated fair value

'

'

'

'

'

'

'

200,000

'

'

'

'

'

'

'

117,000

198,113

35,000

'

'

204,498

152,000

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

153,393

'

187,195

1,200,000

198,113

2.8

182,000

'

588,095

1,800,000

'

Deferred debt issuance costs

'

'

'

400,000

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

1,300,000

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Change in relative fair value of the amended Warrant

'

'

'

'

'

'

'

'

'

'

'

'

'

'

32,000

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Total loan commitment

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

4,500,000

'

'

'

'

'

'

12,500,000

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Conversion rate (in shares per USD)

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

0.1724138

'

0.1980198

1

'

'

'

'

'

'

'

'

'

'

'

'

'

Conversion price (in dollars per share)

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

$5.80

'

'

'

$1

'

'

'

'

'

'

'

'

'

'

'

'

Rate of conversion for issuance of additional shares (in shares per USD)

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

0.025606

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Purchase notes

2,000,000

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Date of notes purchase

'Through November 2013

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Total debt purchase amount

'

2,500,000

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Number of shares of common stock into which notes convertible

'

7,500,000

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Debt payable

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

2,100,000

1,300,000

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Discount (in dollars)

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

977,000

451,000

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Notes issued

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

1,000,000

'

'

'

300,000

'

'

'

'

'

'

213,000

'

'

'

'

'

'

'

'

'

'

'

1,100,000

'

'

'

2,000,000

'

'

250,000

'

Repayment options, percentage of principal amount beginning 90 days from the issuance date

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

135.00%

100.00%

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Minimum period for exercising repayment options of debt

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'90 days

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Conversion price as percentage of average of the lowest trading prices for common stock

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

75.00%

'

'

'

75.00%

'

'

'

'

'

'

'

70.00%

'

'

'

'

'

'

'

'

'

'

80.00%

'

'

'

'

65.00%

'

'

70.00%

'

'

Number of lowest trading prices of common stock considered for conversion price calculation

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

3

'

'

'

3

'

'

'

'

'

'

'

5

'

'

'

'

'

'

'

'

'

'

3

'

'

'

'

3

'

'

'

'

'

Number of days prior to conversion date used for calculating conversion price

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'10 days

'

'

'

'10 days

'

'

'

'

'

'

'

'90 days

'

'

'

'

'

'

'

'

'

'

'20 days

'

'

'

'

'10 days

'

'

'

'

'

Debt term

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'12 months

'

'

'

'8 months

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'180 days

'

'

'

'

'

'9 months

'

'

'12 months

'

'

Original issue discount

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

10.00%

'

'

'

'

'

'

'

'

'

'

'

Warrant issued (as a percent)

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

100.00%

'

'

'

'

'

'

'

'

'

'

'

Consideration received

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

400,000

'

'

'

'

'

'

'

'

'

'

Principal sum

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

440,000

'

'

'

'

'

'

'

'

'

'

Aggregate principal amount of debt instrument

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

4,600,000

'

'

'

800,000

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

2,000,000

'

'

4,000,000

Amount of tranches in which loans are sold

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

100,000

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Aggregate purchase price

'

'

6,500,000

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Decrease in aggregate purchase price

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

4,200,000

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Total loan commitment, rescinded

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

4,500,000

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Note secured by real estate carried over by Sviluppumbria

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

$3,200,000

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Mortgage note interest rate

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

5.50%

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Schedule_of_Assumptions_Used_i2

Schedule of Assumptions Used in Estimating Fair Value of Warrants Using Black-Scholes Option Pricing Model (Detail)

1 Months Ended

9 Months Ended

1 Months Ended

9 Months Ended

1 Months Ended

9 Months Ended

1 Months Ended

9 Months Ended

1 Months Ended

9 Months Ended

Aug. 31, 2012

Jun. 30, 2012

Sep. 30, 2013

31-May-12

Dec. 31, 2010

Nov. 08, 2012

Oct. 15, 2012

Sep. 30, 2013

Dec. 19, 2012

Nov. 08, 2012

Oct. 15, 2012

Sep. 30, 2013

Jan. 28, 2013

Feb. 08, 2013

Sep. 30, 2013

Mar. 08, 2013

Sep. 30, 2013

JMJ Note

JMJ Note

JMJ Note

Amended Venture Loan Payable

Venture Loan Payable

Magna Notes

Magna Notes

Magna Notes

Hanover Notes

Hanover Notes

Hanover Notes

Hanover Notes

Convertible Notes To IBC Funds L L C

Convertible Notes To IBC Funds L L C

Convertible Notes To IBC Funds L L C

Convertible Notes To Iron ridge Global IV Ltd

Convertible Notes To Iron ridge Global IV Ltd

JMJ Warrants and JMJ Note

JMJ Warrants and JMJ Note

JMJ Warrants and JMJ Note

Restated and amended warrant

Warrant

Assumptions:

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Expected Life

'4 years

'4 years

'2 years 8 months 12 days

'7 years

'7 years

'1 year

'1 year

'3 months 18 days

'8 months 12 days

'8 months 12 days

'8 months 12 days

'3 months 18 days

'1 year

'1 year

'10 months 24 days

'1 year

'8 months 12 days

Expected volatility

97.70%

95.40%

180.70%

88.20%

39.90%

125.90%

155.60%

125.00%

163.90%

138.00%

133.30%

125.00%

226.50%

247.40%

270.20%

249.00%

214.60%

Dividend

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Risk-free interest rate

0.66%

0.59%

0.63%

1.35%

2.74%

0.20%

0.19%

0.02%

0.10%

0.15%

0.15%

0.02%

0.16%

0.14%

0.10%

0.15%

0.10%

Schedule_of_Assets_and_Liabili

Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) (Recurring basis, USD $)	Sep. 30, 2013
In Thousands, unless otherwise specified
Total	'
Assets	'
Total assets measured at fair value	'
Liabilities	'
Derivative liability	15,142	[1]
Total liabilities measured at fair value	15,142
Quoted Prices in Active Markets for Identical Assets (Level 1)	'
Assets	'
Total assets measured at fair value	'
Significant Other Observable Inputs (Level 2)	'
Assets	'
Total assets measured at fair value	'
Significant Unobservable Inputs (Level 3)	'
Assets	'
Total assets measured at fair value	'
Liabilities	'
Derivative liability	15,142	[1]
Total liabilities measured at fair value	$15,142
[1]	See Note 4 for additional discussion.

Schedule_of_Assets_and_Liabili1

Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis Using Significant Unobservable Inputs (Level 3) (Detail) (Derivative Liability, USD $)	9 Months Ended
In Thousands, unless otherwise specified	Sep. 30, 2013
Derivative Liability	'
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]	'
Balance at the beginning of the period	$3,189
Total gains or losses (realized and unrealized)	'
Included in net loss	21,629
Valuation adjustment	-9,676
Purchases, issuances, and settlements, net	'
Transfers to Level 3	'
Balance at the ending of the period	$15,142

Leases_Additional_Information_

Leases - Additional Information (Detail) (Indiana Facility, USD $)	9 Months Ended
	Sep. 30, 2013
	sqft
Indiana Facility	'
Leases [Line Items]	'
Area of facility subject to lease (in square feet)	105,000
Lease term	'10 years
Current monthly rent	$25,000

Schedule_of_Customers_Accounti

Schedule of Customers Accounting for 10% or More of Net Revenue (Detail) (Revenue, Customer)	3 Months Ended	9 Months Ended	3 Months Ended	9 Months Ended		3 Months Ended	9 Months Ended	3 Months Ended	9 Months Ended	3 Months Ended
	Sep. 30, 2012	Sep. 30, 2012	Sep. 30, 2012	Sep. 30, 2012	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2013	Sep. 30, 2013	Sep. 30, 2013	Sep. 30, 2013
	Customer A	Customer A	Customer B	Customer B	Customer C	Customer D	Customer D	Customer E	Customer E	Customer F
Concentration Risk [Line Items]	'	'	'	'	'	'	'	'	'	'
Percentage of net revenue	80.30%	49.80%	14.50%	18.00%	10.50%	22.60%	31.00%	18.70%	19.80%	15.90%

Summary_of_Sales_by_Geographic

Summary of Sales by Geographic Area as Percentage of Net Sales (Detail) (USD $)	3 Months Ended		9 Months Ended
In Thousands, unless otherwise specified	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Concentration Risk [Line Items]	'	'	'	'
Net Sales	$436	$477	$2,132	$770
Revenue | Geographic area	'	'	'	'
Concentration Risk [Line Items]	'	'	'	'
Net Sales	436	477	2,132	770
Percentage of net revenue	100.00%	100.00%	100.00%	100.00%
Revenue | Geographic area | North America	'	'	'	'
Concentration Risk [Line Items]	'	'	'	'
Net Sales	139	94	203	338
Percentage of net revenue	31.90%	19.70%	9.50%	44.00%
Revenue | Geographic area | International, Germany	'	'	'	'
Concentration Risk [Line Items]	'	'	'	'
Net Sales	'	'	21	14
Percentage of net revenue	'	'	1.00%	1.80%
Revenue | Geographic area | International, Italy	'	'	'	'
Concentration Risk [Line Items]	'	'	'	'
Net Sales	297	383	1,887	389
Percentage of net revenue	68.10%	80.30%	88.50%	50.60%
Revenue | Geographic area | International, India	'	'	'	'
Concentration Risk [Line Items]	'	'	'	'
Net Sales	'	'	21	'
Percentage of net revenue	'	'	1.00%	'
Revenue | Geographic area | International, Other	'	'	'	'
Concentration Risk [Line Items]	'	'	'	'
Net Sales	'	'	'	$29
Percentage of net revenue	'	'	'	3.60%

Common_Stock_Warrants_Addition

Common Stock Warrants - Additional Information (Detail)

Sep. 30, 2013

Dec. 31, 2012

Jun. 30, 2012

Jun. 29, 2012

Jun. 30, 2012

Jun. 30, 2012

Sep. 30, 2013

Dec. 31, 2012

Jun. 26, 2012

Jan. 31, 2011

Jan. 26, 2011

Apr. 30, 2012

Nov. 30, 2011

Amended Venture Loan Payable

Amended Venture Loan Payable

Amended Venture Loan Payable

JMJ Note

JMJ Note

JMJ Note

JMJ Note

Warrants issued to accredited investors

Warrants issued to accredited investors

Warrants issued pursuant to a Subscription Agreement

Warrants issued as part of a registered direct offering

Restated and amended warrant

Common Stock Warrant [Line Items]

'

'

'

'

'

'

'

'

'

'

'

'

'

Common Stock, shares issued

810,757,671

63,463,659

'

'

'

'

'

'

'

'

2,596,500

1,000,000

3,125,000

Number of warrants issued

'

'

225,000

'

140,000

1,886,792

64,102,564

30,769,231

1,886,792

649,128

'

100,000

2,343,750

Exercise price of warrants (in dollars per share)

'

'

'

0.01

0.26

0.21

0.0062

0.013

0.21

'

6.35

0.5

2.2

Number of days after initial issuance on date of closing after which warrants are exercisable

'

'

'

'

'

'

'

'

'

'

'

'

'180 days

Expiration period from the date of closing

'

'

'

'

'

'

'

'

'

'

'

'

'5 years

Exercisable period

'

'

'

'

'

'4 years

'

'

'

'5 years

'

'7 years

'

Summary_of_Warrant_Activity_De

Summary of Warrant Activity (Detail)	9 Months Ended
In Thousands, unless otherwise specified	Sep. 30, 2013	Sep. 30, 2012
Number of Warrants	'	'
Outstanding at the beginning of the period (in shares)	35,313	4,219
Issued (number of warrants)	33,333	'
Exercised (number of warrants)	'	'
Outstanding at the end of the period (in shares)	68,646	4,219
Warrants exercisable at end of period (in shares)	68,646	4,219
Weighted Average Exercise Price	'	'
Outstanding at the beginning of the period (in dollars per share)	0.41	5.09
Issued (in dollars per share)	0.006	'
Exercised (in dollars per share)	'	'
Outstanding at the end of the period (in dollars per share)	0.22	5.09
Warrants exercisable at end of period (in dollars per share)	0.22	5.09