Property and Equipment, Net

6 Months Ended

Jun. 30, 2014

Property Plant And Equipment [Abstract]

Property and Equipment, Net

5. PROPERTY AND EQUIPMENT, NET

The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An asset is considered to be impaired when the sum of the undiscounted future net cash flows expected to result from the use of the asset and its eventual disposition exceeds its carrying amount. The amount of impairment loss, if any, is measured as the difference between the net book value of the asset and its estimated fair value.

In December 2013, the Company changed its business model for the MelaFind^® system from a rental-based to a sales-based model. In accordance with this new sales model, the Company reclassified approximately $5.4 million of MelaFind^® systems from property and equipment into inventory at December 31, 2013. The systems reclassified into inventory represent systems available for sale. Systems that have been leased under the rental-based model remain in property and equipment.

During the quarter, the Company reclassified $725,598 of accumulated depreciation related to MelaFind system components that were previously leased and are now available for sale that were included in inventory at December 31, 2013.

Property and equipment, at cost, consists of the following:

	June 30,			December 31,			Estimated
	2014			2013			Useful Life
Leasehold improvements	$	905,888		$	905,888			Lease Term
Laboratory and research equipment		1,083,661			1,083,661			3-5 years
Office furniture and equipment		2,005,344			2,022,833			3-5 years
MelaFind® Systems		5,185,073			5,081,816
		9,179,966			9,094,198
Accumulated depreciation and amortization		(5,307,392	)		(5,403,414	)
	$	3,872,574		$	3,690,784

Depreciation expense for the three and six months ended June 30, 2014 was $183,466 and $878,997, respectively, and June 30, 2013 was $609,007 and $1,104,034, respectively.