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Document and Entity Information - shares	6 Months Ended
Document and Entity Information - shares	Jun. 30, 2011	Aug. 01, 2011
Document and Entity Information
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2011
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2011
Entity Registrant Name	Stereotaxis, Inc.
Entity Central Index Key	0001289340
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		55,442,888

Balance Sheets - USD ($)	Jun. 30, 2011	Dec. 31, 2010
Assets
Cash and cash equivalents	$ 23,260,465	$ 35,248,819
Accounts receivable, net of allowance of $241,690 and $367,536 in 2011 and 2010, respectively	10,178,401	13,915,569
Current portion of long-term receivables	64,271	30,800
Inventories	5,915,043	5,441,475
Prepaid expenses and other current assets	3,586,186	4,557,718
Total current assets	43,004,366	59,194,381
Property and equipment, net	3,725,044	3,840,622
Intangible assets, net	2,429,070	2,578,986
Long-term receivables	79,730	109,266
Other assets	44,609	38,537
Total assets	49,282,819	65,761,792
Liabilities and stockholders' equity
Short-term debt and current maturities of long-term debt	24,533,194	20,894,091
Accounts payable	7,930,044	8,796,182
Accrued liabilities	7,851,494	6,966,571
Deferred revenue	6,699,750	6,600,313
Warrants	2,901,043	3,541,798
Total current liabilities	49,915,525	46,798,955
Long-term debt, less current maturities	6,000,000	8,000,000
Long-term deferred revenue	398,352	478,850
Other liabilities	3,848	8,741
Stockholders' equity:
Preferred stock, par value $0.001; 10,000,000 shares authorized at 2011 and 2010, none outstanding at 2011 and 2010	0	0
Common stock, par value $0.001; 100,000,000 shares authorized at 2011 and 2010, 55,431,423 and 54,746,240 shares issued at 2011 and 2010, respectively	55,431	54,746
Additional paid in capital	355,736,551	354,002,770
Treasury stock, 40,151 shares at 2011 and 2010	(205,999)	(205,999)
Accumulated deficit	(362,620,889)	(343,376,271)
Total stockholders' equity (deficit)	(7,034,906)	10,475,246
Total liabilities and stockholders' equity	$ 49,282,819	$ 65,761,792

Balance Sheets (Parenthetical) - USD ($)	Jun. 30, 2011	Dec. 31, 2010
Balance Sheets
Accounts receivable, net of allowance	$ 241,690	$ 367,536
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	55,431,423	54,746,240
Treasury stock, shares	40,151	40,151

Statements of Operations - USD ($)	3 Months Ended		6 Months Ended
Statements of Operations - USD ($)	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Revenue:
Systems Revenue	$ 5,024,543	$ 9,439,857	$ 9,312,719	$ 14,673,611
Recurring Revenue	6,577,596	5,578,221	12,514,124	10,961,076
Total revenue	11,602,139	15,018,078	21,826,843	25,634,687
Cost of revenue:
Systems Cost of Goods Sold	2,520,431	4,313,774	4,704,909	6,390,490
Disposables Service and Accessories Cost of Goods Sold	995,915	612,379	1,816,416	1,456,332
Total cost of revenue	3,516,346	4,926,153	6,521,325	7,846,822
Gross margin	8,085,793	10,091,925	15,305,518	17,787,865
Operating expenses:
Research and development	3,311,177	3,358,008	6,705,436	6,727,546
Sales and marketing	9,712,519	8,446,612	18,050,855	15,141,730
General and administrative	4,606,555	3,976,057	8,856,824	7,866,394
Total operating expenses	17,630,251	15,780,677	33,613,115	29,735,670
Operating loss	(9,544,458)	(5,688,752)	(18,307,597)	(11,947,805)
Other income	620,409	2,507,221	640,755	970,052
Interest income	2,133	2,148	5,320	4,930
Interest expense	(772,769)	(682,804)	(1,583,096)	(1,315,921)
Net loss	$ (9,694,685)	$ (3,862,187)	$ (19,244,618)	$ (12,288,744)
Net loss per common share:
Basic and diluted	$ (0.18)	$ (0.08)	$ (0.35)	$ (0.25)
Weighted average shares used in computing net loss per common share:
Basic and diluted	54,780,872	49,885,589	54,750,443	49,753,046

Statements of Cash Flows - USD ($)	6 Months Ended
Statements of Cash Flows - USD ($)	Jun. 30, 2011	Jun. 30, 2010
Cash flows from operating activities
Net loss	$ (19,244,618)	$ (12,288,744)
Adjustments to reconcile net loss to cash used in operating activities:
Depreciation	731,101	926,511
Amortization	149,916	66,667
Amortization of warrants	660,302	621,348
Share-based compensation	1,582,866	751,876
Loss on asset disposal	0	4,556
Non-cash royalty (income), net	(1,597,685)	(1,628,842)
Warrant adjustment	(640,755)	(970,052)
Changes in operating assets and liabilities:
Accounts receivable	3,737,168	(2,995,127)
Other receivables	(3,935)	(4,984)
Inventories	(473,568)	93,698
Prepaid expenses and other current assets	311,230	643,079
Other assets	(6,071)	0
Accounts payable	(866,138)	1,885,786
Accrued liabilities	884,923	(489,064)
Deferred revenue	18,939	255,543
Other liabilities	(4,894)	(5,879)
Net cash used in operating activities	(14,761,219)	(13,133,628)
Cash flows from investing activities
Purchase of equipment	(615,523)	(548,959)
Net cash used in investing activities	(615,523)	(548,959)
Cash flows from financing activities
Proceeds from revolving line of credit	32,909,375	25,500,000
Payments of revolving line of credit	(28,100,000)	(20,333,334)
Payments of short-term debt	(1,572,587)	0
Payments of long-term debt	0	(563,768)
Proceeds from issuance of stock and warrants, net of issuance costs	151,600	547,388
Net cash provided by financing activities	3,388,388	5,150,286
Net decrease in cash and cash equivalents	(11,988,354)	(8,532,301)
Cash and cash equivalents at beginning of period	35,248,819	30,546,550
Cash and cash equivalents at end of period	$ 23,260,465	$ 22,014,249

Basis of Presentation	6 Months Ended
Basis of Presentation	Jun. 30, 2011
Basis of Presentation
Basis of Presentation	1. Basis of Presentation The accompanying unaudited financial statements of Stereotaxis, Inc. (the "Company") have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q. Accordingly, they do not include all the disclosures required by U.S. generally accepted accounting principles for complete financial statements. In the opinion of management, they include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results for the interim periods presented. Operating results for the six month period ended June 30, 2011 are not necessarily indicative of the results that may be expected for the year ended December 31, 2011 or for future operating periods. These interim financial statements and the related notes should be read in conjunction with the annual financial statements and notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2010 as filed with the SEC on March 11, 2011.

- Definition

The entire disclosure for organization, consolidation and basis of presentation of financial statements disclosure.

+ References

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+ Details

Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2011

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Revenue and Costs of Revenue

For arrangements with multiple deliverables, the Company allocates the total revenue to each deliverable based on the provisions of general accounting principles for revenue recognition and multiple-deliverable revenue arrangements and recognizes revenue for each separate element as the criteria for revenue recognition are met. Each element is assigned an estimated selling price using vendor-specific objective evidence, third party evidence, or management's estimate.

Under our revenue recognition policy, a portion of revenue for NIOBE^®, ODYSSEY^TM VISION, and CINEMA systems is recognized upon delivery, provided that title has passed, there are no uncertainties regarding acceptance, persuasive evidence of an arrangement exists, the sales price is fixed and determinable, and collection of the related receivable is reasonably assured. Revenue is recognized for other types of ODYSSEY systems upon completion of installation, since there are no qualified third party installers. We may deliver systems to a non-hospital site at the customer's request. We evaluate whether delivery has occurred considering general accounting principles for revenue recognition with respect to "bill and hold" transactions. Amounts collected prior to satisfying the above revenue recognition criteria are reflected as deferred revenue.

Revenue from services and license fees, whether sold individually or as a separate unit of accounting in a multiple-deliverable arrangement, is deferred and amortized over the service or license fee period, which is typically one year. Revenue from services is derived primarily from the sale of annual product maintenance plans. We recognize revenue from disposable device sales or accessories upon shipment and establish an appropriate reserve for returns. The return reserve, which is applicable only to disposable devices, is estimated based on historical experience which is periodically reviewed and updated as necessary. In the past, changes in estimate have had only a de minimus effect on revenue recognized in the period. We believe that the estimate is not likely to change significantly in the future.

Costs of systems revenue include direct product costs, installation labor and other costs, estimated warranty costs, and initial training and product maintenance costs. These costs are recorded at the time of sale. Costs of disposable revenue include direct product costs and estimated warranty costs and are recorded at the time of sale. Cost of revenue from services and license fees are recorded when incurred.

Net Loss per Common Share

Basic and diluted net loss per common share is computed by dividing the net loss for the period by the weighted average number of common shares outstanding during the period. The largest adjustment between the shares outstanding at June 30, 2011 and the weighted average shares used for calculating basic earnings per share for the quarter ended June 30, 2011 is the deduction of unvested restricted shares, which amounted to 573,629 at June 30, 2011. In addition, the Company did not include any portion of unearned restricted shares, outstanding options, stock appreciation rights or warrants in the calculation of diluted loss per common share because all such securities are anti-dilutive for all periods presented. The application of the two-class method of computing earnings per share under general accounting principles for participating securities is not applicable because the Company's unearned restricted shares do not contractually participate in its losses.

As of June 30, 2011, the Company had 6,291,402 shares of common stock issuable upon the exercise of outstanding options and stock appreciation rights at a weighted average exercise price of $5.09 per share and 10,381,613 shares of common stock issuable upon the exercise of outstanding warrants at a weighted average exercise price of $4.20 per share. The Company had a weighted average of 552,628 and 423,214 unearned restricted shares outstanding for the three and six months ended June 30, 2011, respectively.

Fair Value Measurements

The Company measures certain financial assets and liabilities at fair value on a recurring basis, including cash equivalents and warrants. General accounting principles for fair value measurement established a fair value hierarchy 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 and liabilities ("Level 1") and the lowest priority to unobservable inputs ("Level 3").

The Company's financial assets consist of cash equivalents invested in money market funds in the amount of $3,140,313 and $12,238,932 at June 30, 2011 and December 31, 2010, respectively. These assets are classified as Level 1 as described above and total interest income recorded for these investments was approximately $200 and $1,400 during the three and six months ended June 30, 2011. There were no transfers in or out of Level 1 during the six months ended June 30, 2011.

The Company's financial liabilities consist of warrants in the amount of $2,901,043 at June 30, 2011. These liabilities are classified as Level 3 as described above and are measured using the Black-Scholes valuation model. The mark-to-market adjustment recorded in other income for these warrants was $620,409 and $640,755 during the three and six months ended June 30, 2011. There were no purchases, sales, issuances, transfers, or settlements of Level 3 financial instruments during the six months ended June 30, 2011. These warrants were transferred into Level 3 on January 1, 2009 based on the adoption of general accounting principles for determining whether an instrument (or embedded feature) is indexed to an entity's own stock. See Note 11 for additional details.

Fair Value – Other Financial Instruments

The following methods and assumptions were used by the Company in estimating its fair value disclosures for other financial instruments as of June 30, 2011 and December 31, 2010.

Cash and cash equivalents, accounts receivable, accounts payable and accrued expenses have carrying values which approximate fair value due to the short maturity or the financial nature of these instruments.

Long and short-term debt fair value estimates are based on estimated borrowing rates to discount the cash flows to their present value. See Note 9 for disclosure of the fair value of debt.

Share-Based Compensation

The Company accounts for its grants of stock options, stock appreciation rights and restricted shares and for its employee stock purchase plan in accordance with the provisions of general accounting principles for share-based payments. These accounting principles require the determination of the fair value of the share-based compensation at the grant date and the recognition of the related expense over the period in which the share-based compensation vests.

The Company utilizes the Black-Scholes valuation model to determine the fair value of stock options and stock appreciation rights at the date of grant. The resulting compensation expense is recognized over the requisite service period, which is generally four years. Compensation expense is recognized only for those awards expected to vest, with forfeitures estimated based on the Company's historical experience and future expectations. Restricted shares granted to employees are valued at the fair market value at the date of grant. The Company amortizes the amount to expense over the service period on a straight-line basis. If the shares are subject to performance objectives, the resulting compensation expense is amortized over the anticipated vesting period and is subject to adjustment based on the actual achievement of objectives.

Recently Issued Accounting Pronouncements

In May 2011, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update No. 2011-04, "Fair Value Measurement: Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS". The Update amends the guidance on fair value measurements to develop common requirements for measuring fair value and for disclosing information about fair value measurements in accordance with US GAAP and International Financial Reporting Standards ("IFRS"). The Update does not require additional fair value measurements and is not intended to establish valuation standards or affect valuation practices outside of financial reporting. This guidance is effective during interim and annual periods beginning after December 15, 2011.

Inventory

6 Months Ended

Jun. 30, 2011

Inventory

Inventory

3. Inventory

Inventory consists of the following:


	June 30, 2011			December 31, 2010
Raw materials	$	1,828,060		$	1,547,020
Work in process		575,747			592,221
Finished goods		3,615,016			3,841,752
Reserve for obsolescence		(103,780	)		(539,518	)

Total inventory	$	5,915,043		$	5,441,475

Prepaid Expenses and Other Current Assets

6 Months Ended

Jun. 30, 2011

Prepaid Expense And Other Assets Abstract

Prepaid Expenses and Other Current Assets

4. Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consist of the following:


	June 30, 2011		December 31, 2010
Prepaid expenses	$	346,182	$	401,789
Deferred cost of revenue		400,851		759,271
Other assets		2,839,153		3,396,658

Total prepaid expenses and other current assets	$	3,586,186	$	4,557,718

Deferred cost of revenue represents the cost of systems for which title has transferred from the Company but for which revenue has not been recognized.

Property and Equipment

6 Months Ended

Jun. 30, 2011

Property and Equipment

Property and Equipment

5. Property and Equipment

Property and equipment consist of the following:


	June 30, 2011			December 31, 2010
Equipment	$	9,559,839		$	8,950,043
Equipment held for lease		547,416			547,416
Leasehold improvements		2,473,880			2,473,880

		12,581,135			11,971,339
Less: Accumulated depreciation		(8,856,091	)		(8,130,717	)

Net property and equipment	$	3,725,044		$	3,840,622

- Definition

The entire disclosure for long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale. Examples include land, buildings, machinery and equipment, and other types of furniture and equipment including, but not limited to, office equipment, furniture and fixtures, and computer equipment and software. This disclosure may include property plant and equipment accounting policies and methodology, a schedule of property, plant and equipment gross, additions, deletions, transfers and other changes, depreciation, depletion and amortization expense, net, accumulated depreciation, depletion and amortization expense and useful lives, income statement disclosures, assets held for sale and public utility disclosures.

+ References + Details

Intangible Assets

6 Months Ended

Jun. 30, 2011

Intangible Assets

Intangible Assets

6. Intangible Assets

On June 4, 2010, the Company entered into an agreement to issue 450,000 shares of its common stock to a consultant (the "Purchaser") in exchange for intellectual property rights related to the Company's products. The Company issued 200,000 shares upon execution of the agreement and will issue an aggregate of 250,000 shares in annual installments on the first three anniversaries of the agreement. The unissued shares meet the criteria for equity classification under Accounting Standards Codification 480 Distinguishing Liabilities from Equity and therefore are recorded in additional paid-in capital. There was no cash consideration paid for the securities. The securities were issued in consideration of the assignment to the Company of the Purchaser's rights in certain intellectual property, including patent applications, in all inventions and discoveries in the Company's business field (as defined in the agreement) that had been developed under various other agreements, which were terminated. The securities were sold by the Company in a private placement exempt from registration under Section 4(2) of the Securities Act of 1933 and Regulation D promulgated thereunder. There were no underwriters or placement agents involved in the transaction.

As of June 30, 2011, the Company had total intangible assets, including those described above, of $3.7 million. Accumulated amortization at June 30, 2011 is $1.3 million.

Accrued Liabilities

6 Months Ended

Jun. 30, 2011

Accrued Liabilities

Accrued Liabilities

7. Accrued Liabilities

Accrued liabilities consist of the following:


	June 30, 2011		December 31, 2010
Accrued salaries, bonus, and benefits	$	4,459,404	$	4,203,551
Accrued research and development		399,286		246,119
Accrued legal and other professional fees		162,757		170,498
Other		2,830,047		2,346,403

Total accrued liabilities	$	7,851,494	$	6,966,571

Deferred Revenue

6 Months Ended

Jun. 30, 2011

Deferred Revenue

Deferred Revenue

8. Deferred Revenue

Deferred revenue consists of the following:


	June 30, 2011			December 31, 2010
Product shipped, revenue deferred	$	712,815		$	552,692
Customer deposits		298,641			312,154
Deferred service and license fees		6,086,646			6,214,317

		7,098,102			7,079,163
Less: Long-term deferred revenue		(398,352	)		(478,850	)

Total current deferred revenue	$	6,699,750		$	6,600,313

Long-Term Debt and Credit Facilities

6 Months Ended

Jun. 30, 2011

Long-Term Debt and Credit Facilities

Long-Term Debt and Credit Facilities

9. Long-Term Debt and Credit Facilities

Debt outstanding consists of the following:


	June 30, 2011						December 31, 2010
	Carrying Amount			Estimated Fair Value			Carrying Amount			Estimated Fair Value
Revolving credit agreement, due March 2012	$	15,809,374		$	16,052,251		$	11,000,000		$	11,284,412
Term note, due December 2013		10,000,000			10,000,000			10,000,000			10,000,000
Biosense Webster Advance		4,723,820			4,760,448			7,894,091			8,005,365

Total debt		30,533,194			30,812,699			28,894,091			29,289,777
Less current maturities		(24,533,194	)		(24,812,699	)		(20,894,091	)		(21,289,777	)

Total long term debt	$	6,000,000		$	6,000,000		$	8,000,000		$	8,000,000

Revolving line of credit

In December 2010, the Company amended its agreement with its primary lender to extend the maturity of the current working capital line of credit from March 31, 2011 to March 31, 2012, retaining the $30 million total availability under the line per the 2009 amendment. The revised agreement retained the $10 million sublimit for borrowings supported by guarantees from stockholders who are affiliates of two members of its board of directors ("Lenders") and considered to be related parties. Under the revised facility the Company is required to maintain a minimum "tangible net worth" and liquidity ratio as defined in the agreement. Interest on the facility accrues at the rate of prime plus 0.5% subject to a floor of 6% for the amount under guarantee and prime plus 1.75% subject to a floor of 7% for the remaining amounts.

As of June 30, 2011, the Company had $15.8 million outstanding under the revolving line of credit and a current borrowing capacity of $17.9 million based on the Company's collateralized assets, including amounts already drawn. As such, the Company had the ability to borrow an additional $2.1 million under the revolving line of credit at June 30, 2011. As of June 30, 2011, the Company was in compliance with all covenants of the bank loan agreement and had no remaining availability on its Lender loan and guarantee. In the event that the Company does not renew or modify the terms of its existing debt facility, it is probable that the Company will not meet all covenants of its bank loan agreement as of September 30, 2011. In the event that the covenants are not met, it is possible that the primary lender could call the Company's outstanding debt, including the revolving line of credit and term note (defined below).

The Revolving Credit Agreement and the Company's term notes (collectively, the "Credit Agreements") are secured by substantially all of the Company's assets. The Company is also required under the Credit Agreements to maintain its primary operating account and the majority of its cash and investment balances in accounts with the primary lender.

Term note

Under the 2010 amendment to the loan agreement, the Company entered into a $10 million term loan maturing on December 31, 2013 with $2 million of principal due in 2011 and $4 million of principal due in each of 2012 and 2013. Interest on the term loan accrues at the rate of prime plus 3.5%.

Biosense Webster Advance

In July 2008, the Company and Biosense Webster entered into an amendment to their existing agreements relating to the development and sale of catheters. Pursuant to the amendment, Biosense Webster agreed to pay to the Company $10.0 million as an advance on royalty amounts that were owed at the time the amendment was executed or would be owed in the future by Biosense Webster to the Company pursuant to the royalty provisions of one of the existing agreements. The Company and Biosense Webster also agreed that an aggregate of up to $8.0 million of certain agreed upon research and development expenses that were owed at the time the amendment was executed or may be owed in the future by the Company to Biosense Webster pursuant to the existing agreement would be deferred and will be due, together with any unrecouped portion of the $10.0 million royalty advance, on the Final Payment Date (as defined below). Interest on the outstanding and unrecouped amounts of the royalty advance and deferred research and development expenses will accrue at an interest rate of the prime rate plus 0.75%. Outstanding royalty advances and deferred research and development expenses and accrued interest thereon will be recouped by Biosense Webster by deductions from royalty amounts otherwise owed to the Company from Biosense Webster pursuant to the existing agreement. The Company has the right to prepay any amounts due pursuant to the Amendment at any time without penalty. Approximately $18.0 million had been advanced by Biosense Webster to the Company pursuant to the amendment. As of June 30, 2011, $11.6 million of royalty payments owed by Biosense and $3.6 million in supplemental payments had been used to reduce the advances together with the accrued interest thereon and the remaining approximately $4.7 million of amounts owed to Biosense Webster has been classified as short-term debt in the accompanying balance sheet. The Company recorded interest expense of $0.1 million and $0.2 million and disposables, service and accessories revenue of $0.9 million and $1.8 million for the three and six months ended June 30, 2011, related to this agreement.

All funds owed by the Company to Biosense Webster must be repaid on the sooner of December 31, 2011 or the date of an Accelerating Recoupment Event as defined below (the "Final Payment Date"). Commencing on May 15, 2010 the Company is required to make quarterly payments (the "Supplemental Payments") to Biosense Webster equal to the difference between the aggregate royalty payments recouped by Biosense Webster from the Company (other than royalty amounts attributable to Biosense Webster's sales of irrigated catheters) in such quarter and $1 million, until the earlier of (1) the date all funds owed by the Company to Biosense Webster pursuant to the Amendment are fully repaid or (2) the Final Payment Date. An "Accelerating Recoupment Event" means any of the following: (i) the closing of any equity-based registered public financing transaction or in the event of convertible debt, the conversion of such debt into equity which raises at least $50 million for the Company; (ii) the failure of the Company to make any Supplemental Payment; or (iii) a change of control of the Company (as defined in the amendment).

- 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

Stockholders' Equity

6 Months Ended

Jun. 30, 2011

Stockholders' Equity

Stockholders' Equity

10. Stockholders' Equity

Stock Award Plans

The Company has various stock plans that permit the Company to provide incentives to employees and directors of the Company in the form of equity compensation that are described in both the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2010 and the Company's definitive Proxy Statement on Schedule 14A filed with the SEC on April 15, 2011. At June 30, 2011, the Board of Directors had reserved a total of 6,935,624 shares of the Company's common stock to provide for current and future grants under its various equity plans.

At June 30, 2011, the total compensation cost related to options, stock appreciation rights and non-vested stock granted to employees under the Company's stock award plans but not yet recognized was approximately $6.5 million, net of estimated forfeitures of approximately $2.1 million. This cost will be amortized over a period of up to four years on a straight-line basis over the underlying estimated service periods and will be adjusted for subsequent changes in estimated forfeitures and anticipated vesting periods.

A summary of the option and stock appreciation rights activity for the six months ended June 30, 2011 is as follows:


	Number of Options/SARs			Range of Exercise Price	Weighted Average Exercise Price per Share
Outstanding, December 31, 2010		4,711,082		$1.37 - $12.55	$	5.80
Granted		1,861,250		$3.23 - $4.03	$	3.51
Exercised		(4,682	)	$1.37 - $1.62	$	1.54
Forfeited		(276,248	)	$1.37 - $12.03	$	6.58

Outstanding, June 30, 2011		6,291,402		$1.62 - $12.55	$	5.09

A summary of the restricted share grant activity for the six months ended June 30, 2011 is as follows:


	Number of Shares			Weighted Average Grant Date Fair Value per Share
Outstanding, December 31, 2010		33,514		$	8.19
Granted		604,550		$	3.50
Vested		(16,643	)	$	9.31
Forfeited		(47,792	)	$	3.83

Outstanding, June 30, 2011		573,629		$	3.58

A summary of the restricted stock outstanding as of June 30, 2011 is as follows:


	Number of Shares
Time based restricted shares		224,429
Performance based restricted shares		349,200

Outstanding, June 30, 2011		573,629

- Definition

The entire disclosure for shareholders' equity, comprised of portions attributable to the parent entity and noncontrolling interest, if any, including other comprehensive income (as applicable). Including, but not limited to: (1) balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings; (2) accumulated balance for each classification of other comprehensive income and total amount of comprehensive income; (3) amount and nature of changes in separate accounts, including the number of shares authorized and outstanding, number of shares issued upon exercise and conversion, and for other comprehensive income, the adjustments for reclassifications to net income; (4) rights and privileges of each class of stock authorized; (5) basis of treasury stock, if other than cost, and amounts paid and accounting treatment for treasury stock purchased significantly in excess of market; (6) dividends paid or payable per share and in the aggregate for each class of stock for each period presented; (7) dividend restrictions and accumulated preferred dividends in arrears (in aggregate and per share amount); (8) retained earnings appropriations or restrictions, such as dividend restrictions; (9) impact of change in accounting principle, initial adoption of new accounting principle and correction of an error in previously issued financial statements; (10) shares held in trust for Employee Stock Ownership Plan (ESOP); (11) deferred compensation related to issuance of capital stock; (12) note received for issuance of stock; (13) unamortized discount on shares; (14) description, terms, and number of warrants or rights outstanding; (15) shares under subscription and subscription receivables, effective date of new retained earnings after quasi-reorganization and deficit eliminated by quasi-reorganization and, for a period of at least ten years after the effective date, the point in time from which the new retained dates; and (16) retroactive effective of subsequent change in capital structure.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Principles Board Opinion (APB)
-Number 12
-Paragraph 10
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Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 04
-Article 3

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Article 4
-Section 08
-Paragraph d

Reference 4: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Research Bulletin (ARB)
-Number 43
-Chapter 1
-Section B
-Paragraph 7, 11A
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Reference 5: http://www.xbrl.org/2003/role/presentationRef
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-Name Statement of Financial Accounting Standard (FAS)
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Reference 6: http://www.xbrl.org/2003/role/presentationRef
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Reference 7: http://www.xbrl.org/2003/role/presentationRef
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Reference 8: http://www.xbrl.org/2003/role/presentationRef
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Reference 9: http://www.xbrl.org/2003/role/presentationRef
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+ Details

Warrants Liability

6 Months Ended

Jun. 30, 2011

Warrants Liability

Warrants Liability

11. Warrants Liability

The Company currently does not have derivative instruments to manage its exposure to currency fluctuations or other business risks. The Company evaluates all of its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. All derivative financial instruments are recognized in the balance sheet at fair value.

In conjunction with its December 29, 2008 registered direct offering, the Company issued warrants to purchase 1,792,408 shares of the Company's common stock that contained a provision that required a reduction of the exercise price if certain equity events occurred. Under the provisions of general accounting principles for derivatives and hedging activities and determining whether an instrument (or embedded feature) is indexed to an entity's own stock, such a reset provision does not meet the exemptions for equity classification and as such, the Company accounts for these warrants as derivative instruments. The calculated fair value of the warrants is classified as a liability and is periodically remeasured with any changes in value recognized in "Other income" in the Statement of Operations. General accounting principles for determining whether an instrument (or embedded feature) is indexed to an entity's own stock became effective for the Company as of January 1, 2009. Accordingly, the fair value of the warrants as of that date was reclassified from stockholders' equity into current liabilities.

In accordance with general accounting principles for fair value measurement, the Company's warrants in the amount of $2,901,043 were measured at fair value on a recurring basis as of June 30, 2011 and were valued using Level 3 valuation inputs. A Black-Scholes model was used to value the Company's warrants at June 30, 2011 using the following assumptions: 1) dividend yield of 0%; 2) volatility of 65%; 3) risk-free interest rate of 0.81%; and 4) expected life of 3 years. The fair value of the outstanding derivative instrument and the effect on the Statement of Operations is as follows:


	Fair Value of Warrants
Balance, December 31, 2010	$	3,541,798
Change in fair value		(640,755	)

Balance, June 30, 2011	$	2,901,043

- Definition

The entire disclosure for hybrid instruments and embedded derivatives, including discussion of the process used in evaluating whether a hybrid instrument in the form of a share constitutes a debt or equity security, and on what basis an embedded derivative was deemed to be separable or inseparable from the host instrument.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 133
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-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
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-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 Emerging Issues Task Force (EITF)
-Number D-109
-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 4: http://www.xbrl.org/2003/role/presentationRef
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Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Embedded Derivative
-URI http://asc.fasb.org/extlink&oid=6511375

Reference 10: http://www.xbrl.org/2003/role/presentationRef
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-Publisher FASB
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-Topic 235
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+ Details

Product Warranty Provisions

6 Months Ended

Jun. 30, 2011

Product Warranty Provisions

Product Warranty Provisions

12. Product Warranty Provisions

The Company's standard policy is to warrant all NIOBE and ODYSSEY systems against defects in material or workmanship for one year following installation. The Company's estimate of costs to service the warranty obligations is based on historical experience and current product performance trends. A regular review of warranty obligations is performed to determine the adequacy of the reserve and adjustments are made to the estimated warranty liability as appropriate.

Accrued warranty, which is included in other accrued liabilities, consists of the following:


	June 30, 2011
Warranty accrual, December 31, 2010	$	469,837
Warranty expense incurred		487,476
Payments made		(256,015	)

Warranty accrual, June 30, 2011	$	701,298

Commitments and Contingencies

6 Months Ended

Jun. 30, 2011

Commitments and Contingencies

Commitments and Contingencies

13. Commitments and Contingencies

The Company at times becomes a party to claims in the ordinary course of business. Management believes that the ultimate resolution of pending or threatened proceedings will not have a material effect on the financial position, results of operations or liquidity of the Company.

- 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
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Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
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+ Details

Subsequent Events	6 Months Ended
Subsequent Events	Jun. 30, 2011
Subsequent Events
Subsequent Events	14. Subsequent Events On August 8, 2011, the Company announced a plan to rebalance and reduce operating expenses. The purpose of this plan is to reduce cash burn while continuing to fund R&D investment in key growth areas. The Company is in the process of evaluating the financial statement impact of this plan and will accrue any related expenses, such as severance costs, as incurred.