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Document And Entity Information - shares	9 Months Ended
Document And Entity Information - shares	Sep. 30, 2011	Oct. 31, 2011
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2011
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	Q3
Entity Registrant Name	EnteroMedics Inc
Entity Central Index Key	0001371217
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		36,749,566

Condensed Consolidated Balance Sheets - USD ($)	Sep. 30, 2011	Dec. 31, 2010
ASSETS
Cash and cash equivalents	$ 32,438,627	$ 30,840,560
Restricted cash	200,000	6,527,031
Short-term investments available for sale	3,006,398
Prepaid expenses and other current assets	716,363	436,538
Total current assets	36,361,388	37,804,129
Property and equipment, net	568,267	741,564
Other assets	68,229	141,572
Total assets	36,997,884	38,687,265
LIABILITIES AND STOCKHOLDERS' EQUITY
Current portion of notes payable	2,271,092	921,998
Accounts payable	261,315	125,188
Accrued expenses	3,340,035	2,538,371
Accrued interest payable	434,930	411,492
Total current liabilities	6,307,372	3,997,049
Notes payable, less current portion (net discounts of $263,721 and $421,874 at September 30, 2011 and December 31, 2010, respectively)	3,425,030	4,983,159
Total liabilities	9,732,402	8,980,208
Stockholders' equity:
Common stock, $0.01 par value 85,000,000 shares authorized; 36,748,281 and 27,892,388 shares issued and outstanding at September 30, 2011 and December 31, 2010, respectively	367,483	278,924
Additional paid-in capital	195,554,395	180,143,120
Accumulated other comprehensive income	(174)
Deficit accumulated during development stage	(168,656,222)	(150,714,987)
Total stockholders' equity	27,265,482	29,707,057
Total liabilities and stockholders' equity	$ 36,997,884	$ 38,687,265

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($)	Sep. 30, 2011	Dec. 31, 2010
Condensed Consolidated Balance Sheets [Abstract]
Notes payable, less current portion, discounts	$ 263,721	$ 421,874
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	85,000,000	85,000,000
Common stock, shares issued	36,748,281	27,892,388
Common stock, shares outstanding	36,748,281	27,892,388

Condensed Consolidated Statements Of Operations - USD ($)	3 Months Ended		9 Months Ended		105 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2011
Operating expenses:
Research and development	$ 4,778,967	$ 2,342,322	$ 10,882,384	$ 7,061,187	$ 110,990,720
Selling, general and administrative	2,354,501	1,751,870	6,488,749	5,496,247	46,074,372
Total operating expenses	7,133,468	4,094,192	17,371,133	12,557,434	157,065,092
Other income (expense):
Interest income	2,303		10,634	1,489	4,034,656
Interest expense	(167,794)	(286,490)	(563,656)	(975,370)	(11,403,567)
Change in value of warrant liability				158,834	(3,840,622)
Other, net	847	(4,689)	(17,080)	(19,950)	(250,629)
Net loss	$ (7,298,112)	$ (4,385,371)	$ (17,941,235)	$ (13,392,431)	$ (168,525,254)
Net loss per share-basic and diluted	$ (0.26)	$ (0.59)	$ (0.64)	$ (1.81)
Shares used to compute basic and diluted net loss per share	28,209,522	7,478,075	27,999,412	7,390,857

Condensed Consolidated Statements Of Cash Flows - USD ($)	9 Months Ended		105 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2011
Cash flows from operating activities:
Net loss	$ (17,941,235)	$ (13,392,431)	$ (168,525,254)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	223,590	286,364	2,179,656
Loss on sale of equipment	1,269	6,274	74,127
Stock-based compensation	2,092,058	2,178,259	13,662,528
Amortization of commitment fees, debt issuance costs and original issue discount	180,672	305,395	3,832,555
Amortization of short-term investment premium or discount	1,408		(306,643)
Change in value of warrant liability		(158,834)	3,840,622
Change in operating assets and liabilities:
Prepaid expenses and other current assets	(279,825)	164,330	(716,363)
Other assets	50,824	(60,347)	(9,524)
Accounts payable	323,609	48,530	257,258
Accrued expenses	801,664	395,221	3,340,035
Accrued interest payable	23,438	98,542	600,752
Net cash used in operating activities	(14,522,528)	(10,128,697)	(141,770,251)
Cash flows from investing activities:
Decrease (increase) in restricted cash	6,327,031		(200,000)
Purchases of short-term investments available for sale	(5,007,980)		(19,890,213)
Maturities of short-term investments available for sale	2,000,000		16,854,414
Purchases of short-term investments held-to-maturity			(22,414,130)
Maturities of short-term investments held-to-maturity			22,750,000
Purchases of property and equipment	(239,044)	(2,592)	(2,817,992)
Net cash provided by (used in) investing activities	3,080,007	(2,592)	(5,717,921)
Cash flows from financing activities:
Proceeds from stock options exercised	2,164	23,697	203,018
Proceeds from warrants exercised	119,912		307,564
Proceeds from sale of common stock and warrants for purchase of common stock	14,520,000	5,259,183	114,354,439
Common stock financing costs	(1,234,300)	(339,547)	(9,498,659)
Payment to shareholders for fractional shares upon reverse stock split			(355)
Proceeds from sale of Series A, B and C convertible preferred stock		5,838,211	63,766,564
Series A non-voting convertible preferred stock proceeds receivable		(781,251)
Series A, B and C convertible preferred stock financing costs		(42,810)	(1,658,662)
Proceeds from notes payable and convertible notes payable			42,645,967
Repayments on notes payable	(367,188)	(1,889,904)	(29,871,278)
Debt issuance costs			(321,799)
Net cash provided by financing activities	13,040,588	8,067,579	179,926,799
Net increase (decrease) in cash and cash equivalents	1,598,067	(2,063,710)	32,438,627
Cash and cash equivalents:
Beginning of period	30,840,560	14,617,594
End of period	32,438,627	12,553,884	32,438,627
Supplemental disclosure:
Interest paid	$ 359,505	562,867	6,961,654
Noncash investing and financing activities:
Cancellation of Alpha Medical, Inc. Series A convertible preferred stock and common stock			(661,674)
Issuance of Beta Medical, Inc. Series A convertible preferred stock in exchange for Alpha Medical, Inc. Series A convertible preferred stock and common stock			661,674
Value of warrants issued with debt and for debt commitment		289,257	3,833,183
Value of warrants issued with sale of common and preferred stock offerings			1,684,832
Cashless exercise of warrants			5,244,778
Conversion of notes and interest payable to Series B and C convertible preferred shares			6,980,668
Options issued for deferred compensation			10,898
Common stock issued to Mayo Foundation and for deferred compensation			1,770,904
Reclassifications of warrant liability		$ 312,751	2,932,766
Conversion of convertible preferred stock to common stock			$ 51,132

Summary Of Significant Accounting Policies

9 Months Ended

Sep. 30, 2011

Summary Of Significant Accounting Policies [Abstract]

Summary Of Significant Accounting Policies

(1)

Summary of Significant Accounting Policies

Description of Business

EnteroMedics Inc. (formerly Beta Medical, Inc.) (the Company) is developing implantable systems to treat obesity, metabolic diseases and other gastrointestinal disorders. The Company was incorporated in the state of Minnesota on December 19, 2002 and was reincorporated in Delaware on July 22, 2004. The Company is in the development stage and since inception has devoted substantially all of its resources to recruiting personnel, developing its product technology, obtaining patents to protect its intellectual property and raising capital, and has not derived revenues from its primary business activity. The Company is headquartered in St. Paul, Minnesota. In January 2006, the Company established EnteroMedics Europe Sárl, a wholly-owned subsidiary located in Switzerland.

Since inception, the Company has incurred losses through September 30, 2011 totaling approximately $168.5 million and has not generated positive cash flows from operations. The Company expects such losses to continue into the foreseeable future as it continues to develop and commercialize its technologies. The Company may need to obtain additional financing and there can be no assurance that the Company will be successful in obtaining additional financing on favorable terms, or at all. If adequate funds are not available, the Company may have to delay development or commercialization of products or license to third parties the rights to commercialize products or technologies that the Company would otherwise seek to commercialize.

Basis of Presentation

The Company has prepared the accompanying condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America. The Company's fiscal year ends on December 31.

The accompanying condensed consolidated financial statements and notes thereto are unaudited. In the opinion of the Company's management, these statements include all adjustments, which are of a normal recurring nature, necessary to present a fair presentation. Interim results are not necessarily indicative of results for a full year. The condensed consolidated balance sheet as of December 31, 2010 was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. The information included in this Form 10-Q should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended December 31, 2010.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Principles of Consolidation

The accompanying condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. All significant intercompany balances and transactions have been eliminated in consolidation.

Fair Value of Financial Instruments

Carrying amounts of certain of the Company's financial instruments, including cash and cash equivalents, restricted cash, prepaid expenses and other current assets, accounts payable and accrued liabilities approximate fair value due to their short maturities. The fair values of investments in debt and equity securities are disclosed in Note 2. The fair value of the Company's note payable is approximately $5.7 million as of September 30, 2011 based on the present value of estimated future cash flows using a discount rate commensurate with borrowing rates available to the Company.

The Company recorded a financial liability in 2009 and through May 18, 2010 related to warrants outstanding, which was fair valued using Level 3 inputs (see "Derivative Instruments" below and Note 4).

Restricted Cash

The Company had $200,000 and $6.5 million in a cash collateral money market account as of September 30, 2011 and December 31, 2010, respectively. $6.3 million of the December 31, 2010 balance was established per the terms of the Third Amendment to the Loan Agreement with Silicon Valley Bank dated November 12, 2010, which required the Company to have an amount equal to the principal balance outstanding in the restricted account. The restricted cash balance was eliminated per the terms of the Fourth Amendment to the Loan Agreement with Silicon Valley Bank dated March 3, 2011 (see Note 4).

Pursuant to the Lease Agreement the Company entered into with Roseville Properties Management Company in July 2008, the Company was required to deliver to Roseville Properties an irrevocable, unconditional, standby letter of credit in the amount of $200,000 on the second anniversary of the commencement of lease payments. The standby letter of credit is to be maintained through October 1, 2013. The irrevocable standby letter of credit was issued by Silicon Valley Bank, who required the Company to set up a restricted cash collateral money market account to fully secure the standby letter of credit.

Inventory

Since inception, inventory related purchases have been used for research and development related activities and have accordingly been expensed as incurred. In the event inventory is determined to be recoverable in the future, the Company will account for it at the lower of cost or market.

Comprehensive Loss

Comprehensive loss is defined as the change in equity of a company during a period from transactions and other events and circumstances excluding transactions resulting from investment owners and distributions to owners. The difference from reported net loss for the three and nine months ended September 30, 2011 related entirely to net unrealized losses on short-term investments. There was no difference from reported net loss for the three and nine months ended September 30, 2010.

Research and Development Expenses

Research and development expenses are charged to expense as incurred. Research and development expenses include, but are not limited to, product development, clinical and regulatory expenses, payroll and other personnel expenses, materials, supplies and consulting costs.

Derivative Instruments

The Company accounts for outstanding warrants that are not indexed to the Company's stock or warrants issued when the Company has insufficient authorized and unissued stock available to share settle the outstanding warrants as derivative instruments, which require that the warrants be classified as a liability and measured at fair value with changes in fair value recognized currently in earnings and recorded separately in the condensed consolidated statements of operations.

Effective January 1, 2009, as a result of a change in accounting guidance, the Company assessed any outstanding equity-linked financial instruments and concluded that warrants issued in November 2008 with a recorded value of $1.4 million on December 31, 2008 were to be reclassified from equity to a liability. The cumulative effect of the change in accounting principle on January 1, 2009 was a $130,968 increase to the deficit accumulated during development stage.

Net Loss Per Share

Basic net loss per share is computed by dividing net loss by the weighted-average number of common shares outstanding during the period. Diluted net loss per share is based on the weighted-average number of common shares outstanding during the period plus dilutive potential common shares calculated using the treasury stock method. Such potentially dilutive shares are excluded when the effect would be to reduce a net loss per share. The Company's potential dilutive shares, which include outstanding common stock options, unvested common shares subject to repurchase, convertible preferred stock and warrants, have not been included in the computation of diluted net loss per share for all periods as the result would be anti-dilutive.

The following table sets forth the computation of basic and diluted net loss per share for the three and nine months ended September 30, 2011 and 2010:


	Three months ended September 30,						Nine months ended September 30,
	2011			2010			2011			2010
Numerator:
Net loss	$	(7,298,112	)	$	(4,385,371	)	$	(17,941,235	)	$	(13,392,431	)

Denominator for basic and diluted net loss per share:
Weighted-average common shares outstanding		28,209,522			7,478,075			27,999,412			7,390,857
Weighted-average unvested common shares subject to repurchase		—			—			—			—

Denominator for net loss per common share—basic and diluted		28,209,522			7,478,075			27,999,412			7,390,857

Net loss per share—basic and diluted	$	(0.26	)	$	(0.59	)	$	(0.64	)	$	(1.81	)

The following table sets forth the potential shares of common stock that are not included in the calculation of diluted net loss per share because to do so would be anti-dilutive as of the end of each period presented:


	September 30,
	2011		2010
Stock options outstanding		2,799,908		911,220
Warrants to purchase common stock		23,927,766		4,903,728
Series A non-voting convertible preferred stock		—		3,394,309

Recently Issued Accounting Standards

In April 2011, the Financial Accounting Standards Board (FASB) issued amendments to achieve common fair value measurement and disclosure requirements between accounting principles generally accepted in the United States of America and International Financial Reporting Standards. This new guidance amends current fair value measurement and disclosure guidance to include increased transparency around valuation inputs and investment categorization. This new guidance is effective for fiscal years and interim periods beginning after December 15, 2011. The Company does not expect the adoption of these amendments to have a material impact on the preparation of the consolidated financial statements.

In June 2011, the FASB issued new guidance on the presentation of comprehensive income. Specifically, the new guidance allows an entity to present components of net income and other comprehensive income in one continuous statement, referred to as the statement of comprehensive income, or in two separate, but consecutive statements. The new guidance eliminates the current option to report other comprehensive income and its components in the statement of changes in equity. While the new guidance changes the presentation of comprehensive income, there are no changes to the components that are recognized in net income or other comprehensive income under current accounting guidance. The new guidance is effective for fiscal years beginning after December 15, 2011. The Company does not expect the adoption of this new guidance to have a material impact on the preparation of the consolidated financial statements.

There have been no other significant changes in recent accounting pronouncements during the nine months ended September 30, 2011 as compared to the recent accounting pronouncements described in the Company's Annual Report on Form 10-K for the year ended December 31, 2010.

Short-Term Investments And Fair Value Measurements

9 Months Ended

Sep. 30, 2011

Short-Term Investments And Fair Value Measurements [Abstract]

Short-Term Investments And Fair Value Measurements

(2)

Short-term Investments and Fair Value Measurements

Effective January 1, 2008, the Company adopted fair value measurement and disclosure provisions for its financial assets and liabilities as described below.

Fair value of financial assets and liabilities is defined as the price that would be received to sell an asset or transfer a liability in an orderly transaction between market participants at the measurement date. A fair value hierarchy has been established that prioritizes the inputs to valuation techniques used to measure 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). The three levels of the fair value hierarchy are described below:

•

Level 1—Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

•

Level 2—Quoted prices for similar assets and liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active or model-derived valuations for which all significant inputs are observable, either directly or indirectly.

•

Level 3—Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable.

The Company's assets that are measured at fair value on a recurring basis are classified within Level 1 or Level 2 of the fair value hierarchy. The Company does not hold any assets that are measured at fair value using Level 3 inputs. The types of instruments the Company invests in that are valued based on quoted market prices in active markets include U.S. treasury securities. Such instruments are classified by the Company within Level 1 of the fair value hierarchy. U.S. treasuries are valued using unadjusted quoted prices for identical assets in active markets that the Company can access.

The types of instruments the Company invests in that are valued based on quoted prices in less active markets, broker or dealer quotations, or alternative pricing sources with reasonable levels of price transparency include the Company's U.S. agency securities, commercial paper, U.S. corporate bonds and municipal obligations. Such instruments are classified by the Company within Level 2 of the fair value hierarchy. The Company values these types of assets using consensus pricing or a weighted average price, which is based on multiple pricing sources received from a variety of industry standard data providers (e.g. Bloomberg), security master files from large financial institutions, and other third-party sources. The multiple prices obtained are then used as inputs into a distribution-curve-based algorithm to determine the daily market price.

The following table sets forth by level, within the fair value hierarchy, the Company's financial assets accounted for at fair value as of September 30, 2011. Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

All short-term investments at September 30, 2011 are classified as Level 2 and are as follows:


	Significant Other Observable Inputs Level 2
U.S. agency securities	$	3,006,398

Total	$	3,006,398

The short-term investments available for sale at September 30, 2011 had effective maturities of less than one year. The amortized cost and fair value of short-term investments available for sale, and the related gross unrealized gains and losses, were as follows at September 30, 2011:


			Gross Unrealized
	Cost		Gains		Losses		Fair value
U.S. agency securities	$	3,006,571	$	270	$	443	$	3,006,398

Total	$	3,006,571	$	270	$	443	$	3,006,398

Commitments

9 Months Ended

Sep. 30, 2011

Commitments [Abstract]

Commitments

(3)

Commitments

Operating Lease

The Company rents its office, warehouse and laboratory facilities under an operating lease, which expires on September 30, 2015. At September 30, 2011, future minimum payments under the lease were as follows:


Years ending December 31:
Remaining three months in 2011	$	69,665
2012		280,055
2013		285,656
2014		291,369
2015		221,789

	$	1,148,534

Notes Payable

9 Months Ended

Sep. 30, 2011

Notes Payable [Abstract]

Notes Payable

(4)

Notes Payable

On November 18, 2008 the Company entered into a new Loan and Security Agreement (the Loan Agreement) with Silicon Valley Bank (SVB), Venture Lending & Leasing V, Inc. (a private equity fund under the management of Western Technology Investment (WTI)) and Compass Horizon Funding Company LLC (Horizon and, collectively with SVB and WTI, the Lenders), in an aggregate principal amount of up to $20.0 million. On November 21, 2008, SVB and WTI each funded a Term Loan in the aggregate principal amount of $10.0 million and $5.0 million, respectively. The additional $5.0 million Term Loan was automatically funded by Horizon on April 28, 2009 when the trading price of the Company's common stock on the NASDAQ Global Market exceeded a target amount specified in the Loan Agreement. On December 1, 2009, the Company repaid the outstanding principal amount due to WTI and Horizon pursuant to the Loan Agreement.

Warrants were issued with the November 18, 2008 Loan Agreement that contained down round protection provisions through May 18, 2010. As of September 30, 2011, Horizon had outstanding 141,025 common stock warrants with an exercise price of $3.90 per share. The fair value of the warrant liability associated with these warrants was $312,751 as of May 18, 2010, the date on which the warrants' down round protection expired. This Level 3 fair value was calculated using a weighted-average Black-Scholes valuation model and the following assumptions: volatility between 113.25% and 113.33%, dividend rate of 0%, risk-free interest rate of 3.38% and a remaining life between 8.51 and 8.95 years. As a result of the down round protection expiring, on May 18, 2010 the Company recorded a net decrease of $158,834 for the nine months ended September 30, 2010, and reclassified the warrant liability to equity.

During 2010, the Company and SVB entered into three amendments to the Loan Agreement, which modified the payment terms, annual interest rate and financial covenants. A brief summary of the three amendments is provided below.

On February 8, 2010, the Company and SVB entered into the First Amendment to the Loan Agreement, which reduced the annual interest rate from 11.0% to a fixed annual rate of 10.0%, payable monthly, revised the liquidity financial covenant and added a New Capital Transaction covenant.

On July 8, 2010, the Company and SVB entered into a Second Amendment to the Loan Agreement, which modified the repayment terms of the loan such that interest only payments were required through December 31, 2010 followed by 30 equal payments of principal and interest, increased the annual interest rate from 10.0% to a fixed annual rate of 11.0%, payable monthly, revised the liquidity financial covenant and added additional New Capital Transaction requirements. On July 8, 2010, per the terms of the Second Amendment to the Loan Agreement, SVB was issued a warrant to purchase 150,642 shares of the Company's common stock with an exercise price of $2.10 per share.

On November 4, 2010, the Company and SVB entered into a Third Amendment (the Third Amendment) to the Loan Agreement, which modified the New Capital Transaction covenant, suspended the liquidity financial covenant and required the Company to maintain a blocked cash collateral account with funds equal to the principal balance outstanding.

On March 3, 2011 the Company entered into a Fourth Amendment (the Fourth Amendment) to the Loan Agreement with SVB. The Fourth Amendment modified the repayment terms of the Term Loan such that beginning April 1, 2011 through September 30, 2011, the Company was only required to make interest only monthly payments on the Term Loan. Then, beginning on October 1, 2011, the remaining balance due on the Term Loan amortizes over 30 equal payments of principal and interest, which is payable monthly. In addition, the Fourth Amendment amended the interest rate due effective March 1, 2011 on the remaining principal amount of the Term Loan from 11.0% to a fixed annual rate of 6.25% if the liquidity ratio is greater than 1.50:1.00 and no Event of Default (as defined in the Loan Agreement) has occurred or is continuing or 9.00% if the liquidity ratio is less than 1.50:1.00 or an Event of Default has occurred or is continuing, payable monthly. The Fourth Amendment also reinstated the financial covenant related to the liquidity ratio, which is not permitted to be less than 1.00:1.00, and added an EBITDA test should the liquidity ratio fall below 1.50:1.00. The EBITDA test requires that the trailing 90 day actual EBITDA be more favorable than 110% of the projected EBITDA for the same period if the projected EBITDA for such period was less than zero or at least 90% of the projected EBITDA for the same period if the projected EBITDA for such period was greater than or equal to zero. In addition, the Fourth Amendment amended the prepayment terms of the Loan Agreement such that a Make-Whole Premium equal to 1% of the amount of the Term Loan being prepaid will be due for any voluntary or required prepayment of the Term Loan occurring before the first anniversary of the Fourth Amendment, unless the Term Loan is being voluntarily prepaid and replaced with a new SVB facility. Lastly, the Fourth Amendment eliminated SVB's springing lien on the Company's intellectual property, the New Capital Transactions requirement and the requirement of the Third Amendment to maintain a blocked cash collateral account with funds equal to the principal balance outstanding.

Scheduled debt principal payments are as follows as of September 30, 2011:


Years Ending December 31:
Remaining three months in 2011	$	554,810
2012		2,307,161
2013		2,458,599
2014		639,273

		5,959,843
Less: Original issue discount		(263,721	)

Notes payable, net	$	5,696,122

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References + Details

Stock-Based Compensation

9 Months Ended

Sep. 30, 2011

Stock-Based Compensation [Abstract]

Stock-Based Compensation

(5)

Stock-based Compensation

The fair value method of accounting for share-based payments is applied to all share-based payment awards issued to employees and where appropriate, nonemployees, unless another source of literature applies. When determining the measurement date of a nonemployee's share-based payment award, the Company measures the stock options at fair value and remeasures such stock options to the current fair value until the performance date has been reached.

Based on the application of these standards, stock-based compensation expense for stock-based awards under the Company's 2003 Stock Incentive Plan (the Plan) for the three and nine months ended September 30, 2011 and 2010 was allocated to operating expenses and to employees and nonemployees as follows:


	Three months ended September 30,				Nine months ended September 30,
	2011		2010		2011		2010
Research and development	$	208,942	$	232,622	$	680,431	$	767,022
Selling, general and administrative		488,821		452,006		1,411,627		1,411,237

Total	$	697,763	$	684,628	$	2,092,058	$	2,178,259


	Three months ended September 30,				Nine months ended September 30,
	2011		2010		2011		2010
Employees	$	682,733	$	681,117	$	2,060,581	$	2,143,388
Nonemployees		15,030		3,511		31,477		34,871

Total	$	697,763	$	684,628	$	2,092,058	$	2,178,259

As of September 30, 2011 there was approximately $5.7 million of total unrecognized compensation costs, net of estimated forfeitures, related to employee unvested stock option awards granted after January 1, 2006, which are expected to be recognized over a weighted-average period of 2.85 years.

The estimated grant-date fair values of the stock options were calculated using the Black-Scholes valuation model, based on the following assumptions for the three and nine months ended September 30, 2011 and 2010:


	Employees				Employees
	Three months ended September 30,				Nine months ended September 30,
	2011		2010		2011		2010
Risk-free interest rates		1.20%-2.16%		1.87%		1.20%-2.68%		1.87%-2.62%
Expected life		6.25 years		6.25 years		5.42-6.25 years		6.00-6.25 years
Expected dividends		0%		0%		0%		0%
Expected volatility		116.75%-119.35%		124.78%		116.75%-124.40%		113.20%-124.78%


	Nonemployees				Nonemployees
	Three months ended September 30,				Nine months ended September 30,
	2011		2010		2011		2010
Risk-free interest rates		0.66%-1.91%		2.82%		0.66%-3.45%		2.82%-3.81%
Expected life		3.75-9.95 years		9.54 years		3.75-9.95 years		9.01-9.87 years
Expected dividends		0%		0%		0%		0%
Expected volatility		116.40%-120.50%		127.93%		116.40%-123.80%		113.25%-127.93%

Option activity under the Plan for the nine months ended September 30, 2011 was as follows:


	Shares Available For Grant			Outstanding Options
	Shares Available For Grant			Number of Shares			Weighted-Average Exercise Price
Balance, December 31, 2010		1,423,361			812,515		$	5.60
Shares reserved		2,000,000			—			—
Options granted		(2,033,964	)		2,033,964			2.62
Options exercised		—			(1,139	)		1.90
Options cancelled		45,432			(45,432	)		3.45

Balance, September 30, 2011		1,434,829			2,799,908		$	3.47

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 123R
-Paragraph 64, 65, A240
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Statement of Position (SOP)
-Number 93-6
-Paragraph 53
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Staff Accounting Bulletin (SAB)
-Number Topic 14

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 50
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6406099&loc=d3e25284-112666

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 718
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 718
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 718
-SubTopic 10
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 718
-SubTopic 40
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6418621&loc=d3e17540-113929

+ Details

Stock Sale

9 Months Ended

Sep. 30, 2011

Stock Sale [Abstract]

Stock Sale

(6)

Stock Sale

On September 28, 2011, the Company closed a public offering, selling 8,800,000 shares of common stock together with warrants to purchase an additional 1,760,000 shares of common stock at an aggregate price of $1.65 per share and corresponding warrant, for gross proceeds of approximately $14.5 million before deducting offering expenses.

The warrants have an exercise price of $1.90 per share of common stock and are exercisable for a period of five years from September 28, 2011. Holders of the warrants are not permitted to exercise those warrants for an amount of common stock that would result in the holder owning more than 19.99% of the Company's common stock. The warrants may be redeemed in whole or in part at the option of the Company, at a redemption price of $0.01 per warrant at any time after any date on which the closing sale price of the common stock, as reported on the principal exchange or trading facility on which it is then traded, has equaled or exceeded $1.00 more than the exercise price of the warrants for 10 consecutive trading days. The Company is required to provide 30 days' prior written notice to the warrantholder of the Company's intention to redeem the warrant; provided, that the Company may not provide this notice until the earlier of (i) 30 days following the date the Company initially releases the results of the blinded portion of the ReCharge trial or (ii) June 30, 2013. The Company may not redeem any portion of a warrant if, had the holder exercised that portion of the warrant in lieu of redemption, it would have resulted in such holder owning more than 19.99% of the common stock outstanding after such exercise.