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Document And Entity Information - shares	3 Months Ended
Document And Entity Information - shares	Mar. 31, 2012	Apr. 30, 2012
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2012
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q1
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		39,038,786

Condensed Consolidated Balance Sheets - USD ($)	Mar. 31, 2012	Dec. 31, 2011
ASSETS
Cash and cash equivalents	$ 20,518,245	$ 28,487,688
Restricted cash	200,000	200,000
Short-term investments available for sale	1,003,204	1,005,411
Accounts receivable	123,093
Inventory	1,002,768	1,068,623
Prepaid expenses and other current assets	775,992	804,799
Total current assets	23,623,302	31,566,521
Property and equipment, net	625,164	630,354
Other assets	305,076	288,980
Total assets	24,553,542	32,485,855
LIABILITIES AND STOCKHOLDERS' EQUITY
Current portion of notes payable	189,295	2,307,162
Accounts payable	262,631	434,436
Accrued expenses	4,031,931	6,373,370
Accrued interest payable	460,253	448,821
Total current liabilities	4,944,110	9,563,789
Notes payable, less current portion (net discounts of $174,105 and $216,711 at March 31, 2012 and December 31, 2011, respectively)	4,478,088	2,881,161
Total liabilities	9,422,198	12,444,950
Commitments and contingencies (note 4)
Stockholders' equity:
Common stock, $0.01 par value 85,000,000 shares authorized; 36,758,741 and 36,752,746 shares issued and outstanding at March 31, 2012 and December 31, 2011, respectively	367,587	367,527
Additional paid-in capital	197,108,547	196,384,995
Accumulated other comprehensive income	520	692
Deficit accumulated during development stage	(182,345,310)	(176,712,309)
Total stockholders' equity	15,131,344	20,040,905
Total liabilities and stockholders' equity	$ 24,553,542	$ 32,485,855

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($)	Mar. 31, 2012	Dec. 31, 2011
Condensed Consolidated Balance Sheets [Abstract]
Notes payable, less current portion, discounts	$ 174,105	$ 216,711
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	85,000,000	85,000,000
Common stock, shares issued	36,758,741	36,752,746
Common stock, shares outstanding	36,758,741	36,752,746

Condensed Consolidated Statements Of Operations - USD ($)	3 Months Ended		111 Months Ended
	Mar. 31, 2012	Mar. 31, 2011	Mar. 31, 2012
Condensed Consolidated Statements Of Operations [Abstract]
Sales	$ 123,093		$ 123,093
Cost of goods sold	85,511		85,511
Gross profit	37,582		37,582
Operating expenses:
Research and development	2,710,235	$ 2,788,252	119,491,809
Selling, general and administrative	2,813,827	2,068,554	50,982,797
Total operating expenses	5,524,062	4,856,806	170,474,606
Operating loss	(5,486,480)	(4,856,806)	(170,437,024)
Other income (expense):
Interest income	1,552	7,234	4,037,815
Interest expense	(143,605)	(231,600)	(11,706,375)
Change in value of warrant liability			(3,840,622)
Other, net	(4,468)	(4,846)	(268,136)
Net loss	$ (5,633,001)	$ (5,086,018)	$ (182,214,342)
Net loss per share - basic and diluted	$ (0.15)	$ (0.18)
Shares used to compute basic and diluted net loss per share	36,756,637	27,892,388

Condensed Consolidated Statements Of Comprehensive Loss - USD ($)	3 Months Ended		111 Months Ended
	Mar. 31, 2012	Mar. 31, 2011	Mar. 31, 2012
Condensed Consolidated Statements Of Comprehensive [Abstract]
Net loss	$ (5,633,001)	$ (5,086,018)	$ (182,214,342)
Change in unrealized gain (loss) on available for sale investments	(172)	40	520
Comprehensive loss	$ (5,633,173)	$ (5,085,978)	$ (182,213,822)

- Definition

The change in equity [net assets] of a business enterprise during a period from transactions and other events and circumstances from non-owner sources which are attributable to the reporting entity. It includes all changes in equity during a period except those resulting from investments by owners and distributions to owners, but excludes any and all transactions which are directly or indirectly attributable to that ownership interest in subsidiary equity which is not attributable to the parent.

+ References

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-Publisher AICPA
-Name Accounting Research Bulletin (ARB)
-Number 51
-Paragraph 8, 9, 10, 11, 12, 13, 14
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+ Details

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
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-Name Emerging Issues Task Force (EITF)
-Number 87-21
-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.

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+ Details

Condensed Consolidated Statements Of Cash Flows - USD ($)	3 Months Ended		111 Months Ended
	Mar. 31, 2012	Mar. 31, 2011	Mar. 31, 2012
Cash flows from operating activities:
Net loss	$ (5,633,001)	$ (5,086,018)	$ (182,214,342)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	68,029	71,338	2,328,067
Loss on sale of equipment	1,095	266	75,222
Stock-based compensation	710,483	660,411	15,173,649
Amortization of commitment fees, debt issuance costs and original issue discount	49,664	70,545	3,936,287
Amortization of short-term investment premium or discount	2,035		(302,755)
Change in value of warrant liability			3,840,622
Change in operating assets and liabilities:
Accounts receivable	(123,093)		(123,093)
Inventory	65,855		(1,002,768)
Prepaid expenses and other current assets	28,807	(282,379)	(775,992)
Other assets	(23,154)		(260,487)
Accounts payable	(187,637)	387,644	113,503
Accrued expenses	(2,341,439)	(613,049)	4,031,931
Accrued interest payable	11,432	(8,106)	626,075
Net cash used in operating activities	(7,370,924)	(4,799,348)	(154,554,081)
Cash flows from investing activities:
Decrease (increase) in restricted cash		6,327,031	(200,000)
Purchases of short-term investments available for sale		(2,000,000)	(19,890,213)
Maturities of short-term investments available for sale			18,854,414
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	(48,102)		(2,879,324)
Net cash (used in) provided by investing activities	(48,102)	4,327,031	(3,779,253)
Cash flows from financing activities:
Proceeds from stock options exercised			203,018
Proceeds from warrants exercised	13,129		330,470
Proceeds from sale of common stock and warrants for purchase of common stock			114,354,439
Common stock financing costs		(45,745)	(9,478,430)
Payment to shareholders for fractional shares upon reverse stock split			(355)
Proceeds from sale of Series A, B and C convertible preferred stock			63,766,564
Series A, B and C convertible preferred stock financing costs			(1,658,662)
Proceeds from notes payable and convertible notes payable			42,645,967
Repayments on notes payable	(563,546)	(367,188)	(30,989,633)
Debt issuance costs			(321,799)
Net cash (used in) provided by financing activities	(550,417)	(412,933)	178,851,579
Net (decrease) increase in cash and cash equivalents	(7,969,443)	(885,250)	20,518,245
Cash and cash equivalents:
Beginning of period	28,487,688	30,840,560
End of period	20,518,245	29,955,310	20,518,245
Supplemental disclosure:
Interest paid	$ 82,509	$ 169,121	7,135,409
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 for debt commitment			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
Reclassification of warrant liability			2,932,766
Conversion of convertible preferred stock to common stock			$ 51,132

Summary Of Significant Accounting Policies

3 Months Ended

Mar. 31, 2012

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 only recently has 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 March 31, 2012 totaling approximately $182.2 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, 2011 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, 2011.

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 long-term debt is approximately $4.8 million as of March 31, 2012 based on the present value of estimated future cash flows using a discount rate commensurate with borrowing rates available to the Company. If measured at fair value in the condensed consolidated financial statements, long-term debt (including the current portion) would be classified as Level 2 in the fair value hierarchy.

Restricted Cash

The Company had $200,000 in a cash collateral money market account as of March 31, 2012 and December 31, 2011. 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

The Company accounts for inventory at the lower of cost or market and records any long-term inventory as other assets in the condensed consolidated balance sheets.

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 months ended March 31, 2012 and 2011 related entirely to changes in unrealized gains (losses) on available for sale investments.

Revenue Recognition

The Company recognizes revenue when persuasive evidence of an arrangement exists, title or risk of loss has passed, the selling price is fixed or determinable and collection is reasonably assured. The Company sells products internationally through distributors and recognizes revenue upon sale to the distributor as these sales are considered to be final and no right of return or price protection exists. Terms of sales to international distributors are generally EXW, reflecting that goods are shipped "ex works," in which risk of loss is assumed by the distributor at the shipping point. The Company does not provide for rights of return to customers on product sales and therefore does not record a provision for returns.

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 trial expenses, including supplies and devices, regulatory expenses, payroll and other personnel expenses, materials 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.

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 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 months ended March 31, 2012 and 2011:


	Three months ended March 31,
	2012			2011
Numerator:
Net loss	$	(5,633,001	)	$	(5,086,018	)

Denominator for basic and diluted net loss per share:
Weighted-average common shares outstanding		36,756,637			27,892,388
Weighted-average unvested common shares subject to repurchase		—			—

Denominator for net loss per common share—basic and diluted		36,756,637			27,892,388

Net loss per share—basic and diluted	$	(0.15	)	$	(0.18	)

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:


	March 31,
	2012		2011
Stock options outstanding		3,576,804		1,828,360
Warrants to purchase common stock		23,917,306		22,224,718

Recently Issued Accounting Standards

In June 2011, the Financial Accounting Standards Board issued guidance on the presentation of comprehensive income in financial statements. Entities are required to present total comprehensive income either in a single, continuous statement of comprehensive income or in two separate, but consecutive, statements. The Company adopted this standard during the first quarter of 2012 and presents net loss and other comprehensive loss in two separate, but consecutive, statements. The adoption of this standard did not have a material effect on the Company's financial statement disclosures.

There have been no other significant changes in recent accounting pronouncements during the three months ended March 31, 2012 as compared to the recent accounting pronouncements described in the Company's Annual Report on Form 10-K for the year ended December 31, 2011.

Short-Term Investments And Fair Value Measurements

3 Months Ended

Mar. 31, 2012

Short-Term Investments And Fair Value Measurements [Abstract]

Short-Term Investments And Fair Value Measurements

(2) Short-term Investments and Fair Value Measurements

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 March 31, 2012. 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 March 31, 2012 are classified as Level 2 and are as follows:


	Significant Other Observable Inputs Level 2
U.S. agency securities	$	1,003,204

Total	$	1,003,204

The short-term investments available for sale at March 31, 2012 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 March 31, 2012:


			Gross Unrealized
	Cost		Gains		Losses		Fair value
U.S. agency securities	$	1,002,684	$	520	$	—	$	1,003,204

Total	$	1,002,684	$	520	$	—	$	1,003,204

Inventory

3 Months Ended

Mar. 31, 2012

Inventory [Abstract]

Inventory

(3) Inventory

Since inception, inventory related purchases have been used for research and development related activities and have accordingly been expensed as incurred. In December 2011, the Company began receiving Australian Register of Therapeutic Goods (ARTG) listings for components of the Maestro Rechargeable System from the Australian Therapeutic Goods Administration (TGA), with the final components being listed on the ARTG in January 2012. As a result, the Company determined certain assets were recoverable as inventory beginning in December 2011. The Company accounts for inventory at the lower of cost or market and records any long-term inventory as other assets in the condensed consolidated balance sheets. There was approximately $251,000 and $228,000 of long-term inventory as of March 31, 2012 and December 31, 2011, respectively.

Current inventory consists of the following as of:


	March 31, 2012		December 31, 2011
Raw materials	$	294,399	$	376,580
Work-in-process		708,369		692,043
Finished goods		—		—

Inventory	$	1,002,768	$	1,068,623

Commitments And Contingencies

3 Months Ended

Mar. 31, 2012

Commitments And Contingencies [Abstract]

Commitments And Contingencies

(4) Commitments and Contingencies

Operating Lease

The Company rents its office, warehouse and laboratory facilities under an operating lease, which expires on September 30, 2015. At March 31, 2012, future minimum payments under the lease are as follows:


Years ending December 31:
Remaining nine months in 2012	$	210,389
2013		285,656
2014		291,369
2015		221,789

	$	1,009,203

The Company is exposed to product liability claims that are inherent in the testing, production, marketing and sale of medical devices. Management believes any losses that may occur from these matters are adequately covered by insurance, and the ultimate outcome of these matters will not have a material effect on the Company's financial position or results of operations. The Company is not currently a party to any litigation and is not aware of any pending or threatened litigation that could have a material adverse effect on the Company's business, operating results or financial condition.

- Definition

The entire disclosure for commitments and contingencies.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name FASB Interpretation (FIN)
-Number 14
-Paragraph 3
-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 FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 5
-Paragraph 9, 10, 11, 12
-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 FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.25)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 450
-SubTopic 20
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6952336&loc=d3e14435-108349

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 460
-SubTopic 10
-Section 50
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=6398077&loc=d3e12565-110249

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 440
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6394976&loc=d3e25287-109308

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 20
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6449706&loc=d3e16207-108621

+ Details

Notes Payable

3 Months Ended

Mar. 31, 2012

Notes Payable [Abstract]

Notes Payable

(5) Notes Payable

On November 18, 2008 the Company entered into a 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.

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 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 started to amortize over 30 equal payments of principal and interest, 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. 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.

On April 16, 2012, the Company entered into a new loan agreement with SVB pursuant to which a term loan was funded in the aggregate principal amount of $10.0 million on April 23, 2012 (see Note 7). A portion of the aggregate principal amount received was used to repay in full the outstanding debt of approximately $4.7 million. As required by generally accepted accounting principles, the classification of both the condensed consolidated balance sheet as of March 31, 2012 and the debt principal payment table below, have been adjusted to reflect the Company's obligations under the terms of the new loan agreement.

Scheduled debt principal payments, as modified on April 16, 2012 are as follows:


Years Ending December 31:
Remaining nine months in 2012	$	189,295
2013		3,000,000
2014		4,000,000
2015		3,000,000

Notes payable	$	10,189,295

- 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

3 Months Ended

Mar. 31, 2012

Stock-Based Compensation [Abstract]

Stock-Based Compensation

(6) 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 for the three months ended March 31, 2012 and 2011 was allocated to operating expenses and employee and nonemployees as follows:


	Three months ended March 31,
	2012		2011
Research and development	$	146,281	$	236,695
Selling, general and administrative		564,202		423,716

Total	$	710,483	$	660,411


	Three months ended March 31,
	2012		2011
Employees	$	679,445	$	660,411
Nonemployees		31,038		—

Total	$	710,483	$	660,411

As of March 31, 2012 there was approximately $5.5 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 2.80 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 months ended March 31, 2012 and 2011:


	Employees		Nonemployees
	Three months ended March 31,		Three months ended
	2012	2011	March 31, 2012
Risk-free interest rates	1.09%	2.68%	0.24%-2.05%
Expected life	6.25 years	6.25 years	2.00-9.25 years
Expected dividends	0%	0%	0%
Expected volatility	123.18%	124.40%	83.05%-122.05%

There was no nonemployee stock option expense for the three months ended March 31, 2011.

Option activity under the Company's 2003 Stock Incentive Plan for the three months ended March 31, 2012 was as follows:


				Outstanding Options
	Shares Available For Grant			Number of Shares			Weighted-Average Exercise Price
Balance, December 31, 2011		763,829			3,470,908		$	3.17
Shares reserved		—			—			—
Options granted		(111,000	)		111,000			2.19
Options exercised		—			—			—
Options cancelled		5,104			(5,104	)		3.36

Balance, March 31, 2012		657,933			3,576,804			3.14

- 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

Subsequent Events	3 Months Ended
Subsequent Events	Mar. 31, 2012
Subsequent Events [Abstract]
Subsequent Events	(7) Subsequent Events *Securities Purchase Agreement* On April 16, 2012, the Company entered into a securities purchase agreement with a current investor for the sale of 2,271,705 shares of its common stock in a registered direct offering, at a purchase price of $2.223 per share. On April 20, 2012, the offering closed and the Company received gross proceeds of $5.0 million before deducting estimated offering expenses. No warrants were issued with the offering. *Loan and Security Agreement* On April 16, 2012, the Company entered into a new Loan and Security Agreement (the Loan Agreement) with SVB, pursuant to which SVB agreed to make term loans to the Company in an aggregate principal amount of up to $20.0 million, on the terms and conditions set forth in the Loan Agreement. The Loan Agreement amends and restates the Loan and Security Agreement, dated November 18, 2008, between the Company and SVB, Compass Horizon Funding Company LLC, and Venture Lending & Leasing V, Inc., as amended (the Prior Loan Agreement). Pursuant to the Loan Agreement, a term loan was funded in the aggregate principal amount of $10.0 million on April 23, 2012, a portion of which was used to repay in full the outstanding debt of approximately $4.7 million. The additional $10.0 million available under the Loan Agreement will be funded if the Company meets the primary endpoints of the ReCharge trial as well as certain financial objectives for 2012 prior to February 15, 2013. The term loans require interest only payments monthly through March 31, 2013 followed by 30 equal payments of principal in the amount of $333,333 plus accrued interest beginning on April 1, 2013 and ending on September 1, 2015, payable monthly. Amounts borrowed under the Loan Agreement bear interest at a fixed annual rate equal to 8.0%. The final payment fee from the Prior Loan Agreement will be due on September 1, 2015. The Company may voluntarily prepay the term loans in full, but not in part, and any voluntary or mandatory prepayment is subject to applicable prepayment premiums and will also include the final payment fee. The Company is required to comply with certain financial covenants that require the Company to generate certain minimum amounts of revenue from the sale of its Maestro System and to implant certain minimum numbers of Maestro Systems during cumulative quarterly measurement periods beginning with the period ended March 31, 2013 and ending with the period ended June 30, 2015. The Company has granted SVB a security interest in all of the Company's assets, excluding intellectual property except with respect to all license, royalty fees and other revenues and income arising out of or relating to any of the intellectual property and all proceeds of the intellectual property. The Company also has entered into a negative pledge arrangement with SVB pursuant to which it has agreed not to encumber any of its intellectual property without SVB's prior written consent. If the Company does not meet the primary endpoints of the ReCharge trial or does not fully disclose the results of the trial to the public prior to February 15, 2013, and/or if the second term loan has been funded and the Company does not raise a minimum amount of new equity by a specified date, the Company will be required to place certain amounts of cash in a restricted account at SVB. Pursuant to the Loan Agreement, on April 16, 2012 the Company issued SVB a warrant to purchase 106,746 shares of common stock, exercisable for ten years from the date of grant, at an exercise price of $2.34 per share. If the additional term loan is funded, the Company will be required to issue SVB a second warrant to purchase common stock, which will be exercisable for ten years from the date of grant, at an exercise price per share equal to the average closing price of the Company's common stock for the ten days immediately preceding the funding date. The number of shares issuable pursuant to the warrant will be determined by dividing $250,000 by such price per share.