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Document And Entity Information (USD $)
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3 Months Ended | ||
|---|---|---|---|
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Mar. 16, 2012
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Nov. 15, 2011
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Mar. 31, 2011
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| Document and Entity Information [Abstract] | |||
| Entity Registrant Name | Parametric Sound Corp | ||
| Document Type | S-1 | ||
| Current Fiscal Year End Date | --09-30 | ||
| Entity Common Stock, Shares Outstanding | 19,517,027 | ||
| Entity Public Float | $ 6,790,000 | ||
| Amendment Flag | false | ||
| Entity Central Index Key | 0001493761 | ||
| Entity Current Reporting Status | Yes | ||
| Entity Voluntary Filers | No | ||
| Entity Filer Category | Smaller Reporting Company | ||
| Entity Well-known Seasoned Issuer | No | ||
| Document Period End Date | Mar. 16, 2012 | ||
| Document Fiscal Year Focus | 2011 |
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- Definition
If the value is true, then the document as an amendment to previously-filed/accepted document. No definition available.
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- Definition
End date of current fiscal year in the format --MM-DD. No definition available.
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- Definition
This is focus fiscal year of the document report in CCYY format. For a 2006 annual report, which may also provide financial information from prior periods, fiscal 2006 should be given as the fiscal year focus. Example: 2006. No definition available.
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- Definition
The end date of the period reflected on the cover page if a periodic report. For all other reports and registration statements containing historical data, it is the date up through which that historical data is presented. If there is no historical data in the report, use the filing date. The format of the date is CCYY-MM-DD. No definition available.
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- Definition
The type of document being provided (such as 10-K, 10-Q, N-1A, etc). The document type is limited to the same value as the supporting SEC submission type, minus any "/A" suffix. The acceptable values are as follows: S-1, S-3, S-4, S-11, F-1, F-3, F-4, F-9, F-10, 6-K, 8-K, 10, 10-K, 10-Q, 20-F, 40-F, N-1A, 485BPOS, 497, NCSR, N-CSR, N-CSRS, N-Q, 10-KT, 10-QT, 20-FT, POS AM and Other. No definition available.
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- Definition
A unique 10-digit SEC-issued value to identify entities that have filed disclosures with the SEC. It is commonly abbreviated as CIK. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
Indicate number of shares outstanding of each of registrant's classes of common stock, as of latest practicable date. Where multiple classes exist define each class by adding class of stock items such as Common Class A [Member], Common Class B [Member] onto the Instrument [Domain] of the Entity Listings, Instrument No definition available.
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- Definition
Indicate "Yes" or "No" whether registrants (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that registrants were required to file such reports), and (2) have been subject to such filing requirements for the past 90 days. This information should be based on the registrant's current or most recent filing containing the related disclosure. No definition available.
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- Definition
Indicate whether the registrant is one of the following: (1) Large Accelerated Filer, (2) Accelerated Filer, (3) Non-accelerated Filer, or (4) Smaller Reporting Company. Definitions of these categories are stated in Rule 12b-2 of the Exchange Act. This information should be based on the registrant's current or most recent filing containing the related disclosure. No definition available.
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| X | ||||||||||
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- Definition
State aggregate market value of voting and non-voting common equity held by non-affiliates computed by reference to price at which the common equity was last sold, or average bid and asked price of such common equity, as of the last business day of registrant's most recently completed second fiscal quarter. The public float should be reported on the cover page of the registrants form 10K. No definition available.
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- Definition
The exact name of the entity filing the report as specified in its charter, which is required by forms filed with the SEC. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Indicate "Yes" or "No" if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. No definition available.
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| X | ||||||||||
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- Definition
Indicate "Yes" or "No" if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Is used on Form Type: 10-K, 10-Q, 8-K, 20-F, 6-K, 10-K/A, 10-Q/A, 20-F/A, 6-K/A, N-CSR, N-Q, N-1A. No definition available.
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- Details
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- Details
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- Details
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| X | ||||||||||
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- Definition
Carrying value as of the balance sheet date of liabilities incurred (and for which invoices have typically been received) and payable to vendors for goods and services received that are used in an entity's business. Used to reflect the current portion of the liabilities (due within one year or within the normal operating cycle if longer). Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
Carrying value as of the balance sheet date of obligations incurred and payable, pertaining to costs that are statutory in nature, are incurred on contractual obligations, or accumulate over time and for which invoices have not yet been received or will not be rendered. Examples include taxes, interest, rent and utilities. Used to reflect the current portion of the liabilities (due within one year or within the normal operating cycle if longer). Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
Carrying value as of the balance sheet date of the obligations incurred through that date and payable for employees' services provided. Used to reflect the current portion of the liabilities (due within one year or within the normal operating cycle if longer). Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
Excess of issue price over par or stated value of the entity's capital stock and amounts received from other transactions involving the entity's stock or stockholders. Includes adjustments to additional paid in capital. Some examples of such adjustments include recording the issuance of debt with a beneficial conversion feature and certain tax consequences of equity instruments awarded to employees. Use this element for the aggregate amount of additional paid-in capital associated with common and preferred stock. For additional paid-in capital associated with only common stock, use the element additional paid in capital, common stock. For additional paid-in capital associated with only preferred stock, use the element additional paid in capital, preferred stock. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
Sum of the carrying amounts as of the balance sheet date of all assets that are recognized. Assets are probable future economic benefits obtained or controlled by an entity as a result of past transactions or events. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
Sum of the carrying amounts as of the balance sheet date of all assets that are expected to be realized in cash, sold, or consumed within one year (or the normal operating cycle, if longer). Assets are probable future economic benefits obtained or controlled by an entity as a result of past transactions or events. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
Unrestricted cash available for day-to-day operating needs, for an entity that has cash equivalents, but does not aggregate cash equivalents with cash on the balance sheet. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
Represents the caption on the face of the balance sheet to indicate that the entity has entered into (1) purchase or supply arrangements that will require expending a portion of its resources to meet the terms thereof, and (2) is exposed to potential losses or, less frequently, gains, arising from (a) possible claims against a company's resources due to future performance under contract terms, and (b) possible losses or likely gains from uncertainties that will ultimately be resolved when one or more future events that are deemed likely to occur do occur or fail to occur. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Aggregate par or stated value of issued nonredeemable common stock (or common stock redeemable solely at the option of the issuer). This item includes treasury stock repurchased by the entity. Note: elements for number of nonredeemable common shares, par value and other disclosure concepts are in another section within stockholders' equity. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Carrying amount as of the balance sheet date of obligations due all related parties. For classified balance sheets, represents the current portion of such liabilities (due within one year or within the normal operating cycle if longer). Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
Sum of the carrying amounts of all intangible assets, excluding goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
Carrying amount (lower of cost or market) as of the balance sheet date of inventories less all valuation and other allowances. Excludes noncurrent inventory balances (expected to remain on hand past one year or one operating cycle, if longer). Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
Total of all Liabilities and Stockholders' Equity items (or Partners' Capital, as applicable), including the portion of equity attributable to noncontrolling interests, if any. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Total obligations incurred as part of normal operations that are expected to be paid during the following twelve months or within one business cycle, if longer. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
Aggregate par or stated value of issued nonredeemable preferred stock (or preferred stock redeemable solely at the option of the issuer). This item includes treasury stock repurchased by the entity. Note: elements for number of nonredeemable preferred shares, par value and other disclosure concepts are in another section within stockholders' equity. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
Sum of the carrying amount for an unclassified balance sheet date of expenditures made in advance of when the economic benefit of the cost will be realized, and which will be expensed in future periods with the passage of time or when a triggering event occurs and the carrying amount as of the balance sheet date of assets not otherwise specified in the taxonomy. Also includes assets not individually reported in the financial statements, or not separately disclosed in notes. No definition available.
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| X | ||||||||||
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- Definition
Tangible assets that are held by an entity for use in the production or supply of goods and services, for rental to others, or for administrative purposes and that are expected to provide economic benefit for more than one year; net of accumulated depreciation. 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. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
The cumulative amount of the reporting entity's undistributed earnings or deficit. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
Total of all stockholders' equity (deficit) items, net of receivables from officers, directors, owners, and affiliates of the entity which are attributable to the parent. The amount of the economic entity's stockholders' equity attributable to the parent excludes the amount of stockholders' equity which is allocable to that ownership interest in subsidiary equity which is not attributable to the parent (noncontrolling interest, minority interest). This excludes temporary equity and is sometimes called permanent equity. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Details
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| X | ||||||||||
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- Definition
The portion of the carrying value of subordinated debt as of the balance sheet date that is scheduled to be repaid within one year or in the normal operating cycle, if longer. Subordinated debt places a lender in a lien position behind debt having a higher priority of repayment in liquidation of the entity's assets. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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Balance Sheets (Parentheticals) (USD $)
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Dec. 31, 2011
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Sep. 30, 2011
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Sep. 30, 2010
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|---|---|---|---|
| Discount on subordinated notes payable (in Dollars) | $ 3,312 | $ 263,272 | $ 263,272 |
| Preferred stock par value (in Dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 |
| Preferred stock shares authorized | 1,000,000 | 1,000,000 | 1,000,000 |
| Preferred stock shares issued | 0 | 0 | 0 |
| Preferred stock shares outstanding | 0 | 0 | 0 |
| Common stock par value (in Dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 |
| Common stock shares authorized | 50,000,000 | 50,000,000 | 50,000,000 |
| Common stock shares issued | 21,492,027 | 19,517,027 | 15,306,064 |
| Common stock shares outstanding | 21,492,027 | 19,517,027 | 15,306,064 |
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- Definition
Face amount or stated value of common stock per share; generally not indicative of the fair market value per share. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
The maximum number of common shares permitted to be issued by an entity's charter and bylaws. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
Total number of common shares of an entity that have been sold or granted to shareholders (includes common shares that were issued, repurchased and remain in the treasury). These shares represent capital invested by the firm's shareholders and owners, and may be all or only a portion of the number of shares authorized. Shares issued include shares outstanding and shares held in the treasury. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
Total number of shares of common stock held by shareholders. May be all or portion of the number of common shares authorized. These shares represent the ownership interest of the common shareholders. Shares outstanding equals shares issued minus shares held in treasury and other adjustments, if any. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
The amount of debt discount that was originally recognized at the issuance of the instrument that has yet to be amortized. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
Face amount or stated value per share of nonredeemable preferred stock (or preferred stock redeemable solely at the option of the issuer); generally not indicative of the fair market value per share. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
The maximum number of nonredeemable preferred shares (or preferred stock redeemable solely at the option of the issuer) permitted to be issued by an entity's charter and bylaws. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
Total number of nonredeemable preferred shares (or preferred stock redeemable solely at the option of the issuer) issued to shareholders (includes related preferred shares that were issued, repurchased, and remain in the treasury). May be all or portion of the number of preferred shares authorized. Excludes preferred shares that are classified as debt. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
Aggregate share number for all nonredeemable preferred stock (or preferred stock redeemable solely at the option of the issuer) held by stockholders. Does not include preferred shares that have been repurchased. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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Statements of Operations (USD $)
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3 Months Ended | 12 Months Ended | ||
|---|---|---|---|---|
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Dec. 31, 2011
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Dec. 31, 2010
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Sep. 30, 2011
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Sep. 30, 2010
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| Revenues: | ||||
| Product sales | $ 63,415 | $ 76,695 | $ 599,110 | |
| Other revenue | 1,366 | 2,472 | 7,927 | |
| Total revenues | 64,781 | 79,167 | 607,037 | |
| Cost of revenues | 24,916 | 35,524 | 505,576 | |
| Gross profit | 39,865 | 43,643 | 101,461 | |
| Operating expenses: | ||||
| Selling, general and administrative | 338,959 | 129,344 | 572,325 | 446,857 |
| Research and development | 230,705 | 126,397 | 619,378 | 229,400 |
| Patent and inventory impairment | 28,616 | 346,905 | ||
| Total operating expenses | 569,664 | 255,741 | 1,220,319 | 1,023,162 |
| Loss from operations | (529,799) | (255,741) | (1,176,676) | (921,701) |
| Other income (expense): | ||||
| Interest and note discount amortization | (70,276) | (308,499) | (1,477) | |
| Other | (1,218) | 77 | 717 | (19) |
| (1,218) | (70,199) | (307,782) | (1,496) | |
| Net loss | $ (531,017) | $ (325,940) | $ (1,484,458) | $ (923,197) |
| Loss per basic and diluted common share (in Dollars per share) | $ (0.03) | $ (0.02) | $ (0.09) | $ (0.06) |
| Weighted average shares used to compute net loss per basic and diluted common share (in Shares) | 19,559,961 | 15,306,064 | 16,968,005 | 15,306,064 |
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- Details
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- Definition
The component of interest expense representing the noncash expenses charged against earnings in the period to amortize debt discount and premium associated with the related debt instruments. Excludes amortization of financing costs. Alternate caption: Noncash Interest Expense. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
The aggregate cost of goods produced and sold and services rendered during the reporting period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
The amount of net income or loss for the period per each share in instances when basic and diluted earnings per share are the same amount and reported as a single line item on the face of the financial statements. Basic earnings per share is the amount of net income or loss for the period per each share of common stock or unit outstanding during the reporting period. Diluted earnings per share includes the amount of net income or loss for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period. No definition available.
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| X | ||||||||||
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- Definition
Total loss recognized during the period from the impairment of goodwill plus the loss recognized in the period resulting from the impairment of the carrying amount of intangible assets, other than goodwill. No definition available.
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| X | ||||||||||
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- Definition
Aggregate revenue less cost of goods and services sold or operating expenses directly attributable to the revenue generation activity. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
The portion of profit or loss for the period, net of income taxes, which is attributable to the parent. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
The aggregate amount of income or expense from ancillary business-related activities (that is to say, excluding major activities considered part of the normal operations of the business). Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition
Generally recurring costs associated with normal operations except for the portion of these expenses which can be clearly related to production and included in cost of sales or services. Includes selling, general and administrative expense. No definition available.
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- Details
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| X | ||||||||||
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- Definition
The net result for the period of deducting operating expenses from operating revenues. No definition available.
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| X | ||||||||||
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- Definition
The net amount of other income and expense amounts, the components of which are not separately disclosed on the income statement, resulting from ancillary business-related activities (that is, excluding major activities considered part of the normal operations of the business) also known as other nonoperating income (expense) recognized for the period. Such amounts may include: (a) dividends, (b) interest on securities, (c) net gains or losses on securities, (d) unusual costs, (e) gains or losses on foreign exchange transactions, and (f) miscellaneous other income and expense items. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
Revenues from the sale of other goods or rendering of other services, not elsewhere specified in the taxonomy; net of (reduced by) sales adjustments, returns, allowances, and discounts. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
The aggregate costs incurred (1) in a planned search or critical investigation aimed at discovery of new knowledge with the hope that such knowledge will be useful in developing a new product or service, a new process or technique, or in bringing about a significant improvement to an existing product or process; or (2) to translate research findings or other knowledge into a plan or design for a new product or process or for a significant improvement to an existing product or process whether intended for sale or the entity's use, during the reporting period charged to research and development projects, including the costs of developing computer software up to the point in time of achieving technological feasibility, and costs allocated in accounting for a business combination to in-process projects deemed to have no alternative future use. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
Aggregate revenue recognized during the period (derived from goods sold, services rendered, insurance premiums, or other activities that constitute an entity's earning process). For financial services companies, also includes investment and interest income, and sales and trading gains. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Details
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| X | ||||||||||
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- Definition
Aggregate revenue during the period from the sale of goods in the normal course of business, after deducting returns, allowances and discounts. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
The aggregate total costs related to selling a firm's product and services, as well as all other general and administrative expenses. Direct selling expenses (for example, credit, warranty, and advertising) are expenses that can be directly linked to the sale of specific products. Indirect selling expenses are expenses that cannot be directly linked to the sale of specific products, for example telephone expenses, Internet, and postal charges. General and administrative expenses include salaries of non-sales personnel, rent, utilities, communication, etc. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
Number of [basic] shares or units, after adjustment for contingently issuable shares or units and other shares or units not deemed outstanding, determined by relating the portion of time within a reporting period that common shares or units have been outstanding to the total time in that period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
Common shares issued upon exercise of warrants at applied to reduce subordinated notes No definition available.
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| X | ||||||||||
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- Definition
Common shares issued upon exercise of warrants applied to reduce subordinated notes No definition available.
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| X | ||||||||||
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- Definition
Net transfers to parent No definition available.
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| X | ||||||||||
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- Definition
Stock options issued for tooling costs No definition available.
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| X | ||||||||||
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- Definition
Increase in additional paid in capital due to warrants issued during the period. Includes also the proceeds of debt securities issued with detachable stock purchase warrants that are allocable to the warrants. These warrants qualify for equity classification and provide the holder with a right to purchase stock from the entity. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
The portion of profit or loss for the period, net of income taxes, which is attributable to the parent. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
The aggregate amount of noncash, equity-based employee remuneration. This may include the value of stock or unit options, amortization of restricted stock or units, and adjustment for officers' compensation. As noncash, this element is an add back when calculating net cash generated by operating activities using the indirect method. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
Number of shares of stock issued as of the balance sheet date, including shares that had been issued and were previously outstanding but which are now held in the treasury. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
Total of all stockholders' equity (deficit) items, net of receivables from officers, directors, owners, and affiliates of the entity which are attributable to the parent. The amount of the economic entity's stockholders' equity attributable to the parent excludes the amount of stockholders' equity which is allocable to that ownership interest in subsidiary equity which is not attributable to the parent (noncontrolling interest, minority interest). This excludes temporary equity and is sometimes called permanent equity. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
Number of shares of stock issued during the period pursuant to acquisitions. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
Number of shares issued during the period as a result of the conversion of convertible securities. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
Number of new stock issued during the period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
Number of shares of stock issued during the period that is attributable to transactions involving issuance of stock not separately disclosed. No definition available.
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| X | ||||||||||
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- Definition
Value of stock issued pursuant to acquisitions during the period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
The gross value of stock issued during the period upon the conversion of convertible securities. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
Equity impact of the value of new stock issued during the period. Includes shares issued in an initial public offering or a secondary public offering. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
Value of shares of stock issued during the period that is attributable to transactions involving issuance of stock not separately disclosed. No definition available.
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| X | ||||||||||
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- Details
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| X | ||||||||||
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- Definition
Debt discount recorded in connection with issuance of subordinated notes No definition available.
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| X | ||||||||||
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- Definition
Issuance of common stock upon warrant exercise in exchange for reduction in 8% subordinated notes No definition available.
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| X | ||||||||||
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- Definition
Issuance of common stock upon warrant exercise in exchange for reduction in subordinated notes No definition available.
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| X | ||||||||||
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- Definition
Issuance of subordinated notes to related party to reimburse startup costs No definition available.
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| X | ||||||||||
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- Details
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| X | ||||||||||
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- Definition
Stock options issued as payment for tooling deposit No definition available.
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| X | ||||||||||
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- Definition
The component of interest expense representing the noncash expenses charged against earnings in the period to allocate debt discount and premium, and the costs to issue debt and obtain financing over the related debt instruments. Alternate captions include Noncash Interest Expense. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
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- Definition
Includes currency on hand as well as demand deposits with banks or financial institutions. It also includes other kinds of accounts that have the general characteristics of demand deposits in that the Entity may deposit additional funds at any time and also effectively may withdraw funds at any time without prior notice or penalty. Cash equivalents, excluding items classified as marketable securities, include short-term, highly liquid investments that are both readily convertible to known amounts of cash, and so near their maturity that they present minimal risk of changes in value because of changes in interest rates. Generally, only investments with original maturities of three months or less qualify under that definition. Original maturity means original maturity to the entity holding the investment. For example, both a three-month US Treasury bill and a three-year Treasury note purchased three months from maturity qualify as cash equivalents. However, a Treasury note purchased three years ago does not become a cash equivalent when its remaining maturity is three months. Compensating balance arrangements that do not legally restrict the withdrawal or usage of cash amounts may be reported as Cash and Cash Equivalents, while legally restricted deposits held as compensating balances against borrowing arrangements, contracts entered into with others, or company statements of intention with regard to particular deposits are not generally reported as cash and cash equivalents. Includes cash and cash equivalents associated with the entity's continuing operations. Excludes cash and cash equivalents associated with the disposal group (and discontinued operation). Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
|
- Definition
The increase (decrease) during the reporting period in cash and cash equivalents. While for technical reasons this element has no balance attribute, the default assumption is a debit balance consistent with its label. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
|
- Definition
The current period expense charged against earnings on long-lived, physical assets not used in production, and which are not intended for resale, to allocate or recognize the cost of such assets over their useful lives; or to record the reduction in book value of an intangible asset over the benefit period of such asset; or to reflect consumption during the period of an asset that is not used in production. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
|
- Definition
The amount of impairment loss recognized in the period resulting from the write-down of the carrying amount of an intangible asset (excluding goodwill) to fair value. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
|
- Definition
The amount of cash paid during the current period to foreign, federal, state, and local authorities as taxes on income. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
|
- Definition
The increase (decrease) during the reporting period in the aggregate amount of liabilities incurred (and for which invoices have typically been received) and payable to vendors for goods and services received that are used in an entity's business. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
|
- Definition
The increase (decrease) during the reporting period in amount due within one year (or one business cycle) from customers for the credit sale of goods and services. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
|
- Definition
The increase (decrease) during the reporting period in the aggregate amount of expenses incurred but not yet paid. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
|
- Definition
The increase (decrease) during the period in accrued salaries. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
|
- Definition
The increase (decrease) during the reporting period in the aggregate value of all inventory held by the reporting entity, associated with underlying transactions that are classified as operating activities. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
|
- Definition
The increase (decrease) during the reporting period in the value of prepaid expenses and other assets not separately disclosed in the statement of cash flows, for example, deferred expenses, intangible assets,or income taxes. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
|
- Definition
The amount of cash paid for interest during the period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
|
- Definition
The change in the inventory reserve representing the cumulative difference in cost between the first in, first out and the last in, first out inventory valuation methods, which change has been reflected in the statement of income during the period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
|
- Definition
Charge to cost of goods sold that represents the reduction of the carrying amount of inventory, generally attributable to obsolescence or market conditions. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
|
- Definition
The net cash inflow or outflow from financing activity for the period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
|
- Definition
The net cash inflow or outflow from investing activity. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
|
- Definition
The net cash from (used in) all of the entity's operating activities, including those of discontinued operations, of the reporting entity. Operating activities generally involve producing and delivering goods and providing services. Operating activity cash flows include transactions, adjustments, and changes in value that are not defined as investing or financing activities. While for technical reasons this element has no balance attribute, the default assumption is a debit balance consistent with its label. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
|
- Definition
The portion of profit or loss for the period, net of income taxes, which is attributable to the parent. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
|
- Definition
The amount of assets that an Entity acquires in a noncash (or part noncash) acquisition that are not presented as a separate disclosure or not otherwise listed in the existing taxonomy. Noncash is defined as information about all investing and financing activities of an enterprise during a period that affect recognized assets or liabilities but that do not result in cash receipts or cash payments in the period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
|
- Definition
The amount of payables that an Entity assumes in acquiring a business or in consideration for an asset received in a noncash (or part noncash) acquisition. Noncash is defined as transactions during a period that affect recognized assets or liabilities but that do not result in cash receipts or cash payments in the period. "Part noncash" refers to that portion of the transaction not resulting in cash receipts or cash payments in the period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
|
- Definition
Other expenses or losses included in net income that result in no cash outflows or inflows in the period and are not separately disclosed. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
|
- Definition
The total of the cash outflow during the period which has been paid to third parties in connection with debt origination, which will be amortized over the remaining maturity period of the associated long-term debt and the cost incurred directly for the issuance of equity securities. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
|
- Definition
The cash outflow for loan and debt issuance costs. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
|
- Definition
The cash outflow to acquire asset without physical form usually arising from contractual or other legal rights, excluding goodwill. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
|
- Definition
The cash outflow associated with the acquisition of long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale; includes cash outflows to pay for construction of self-constructed assets. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
|
- Definition
The cash inflow from the additional capital contribution to the entity. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
|
- Definition
The cash inflow from a debt initially having maturity due after one year or beyond the operating cycle, if longer. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
|
- Definition
The cash inflow from issuance of rights to purchase common shares at predetermined price (usually issued together with corporate debt). Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
|
- Definition
The cash inflow associated with the amount received from holders exercising their stock options. This item inherently excludes any excess tax benefit, which the entity may have realized and reported separately. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
|
- Definition
Total increases or decreases in the standard and extended product warranty liability during the period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
|
- Definition
The expense charged against earnings for the period pertaining to standard and extended warranties on the entity's goods and services granted to customers. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
|
- Definition
The cash outflow associated with security instruments that either represent a creditor or an ownership relationship with the holder of the investment security with a maturity of beyond one year or normal operating cycle, if longer. Includes repayments of (a) debt, (b) capital lease obligations, (c) mandatory redeemable capital securities, and (d) any combination of (a), (b), or (c). Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
|
- Definition
The aggregate amount of noncash, equity-based employee remuneration. This may include the value of stock or unit options, amortization of restricted stock or units, and adjustment for officers' compensation. As noncash, this element is an add back when calculating net cash generated by operating activities using the indirect method. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
|
- Definition
New liabilities assumed during the reporting period that are subordinated to claims of general creditors. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
|
- Definition
The net change in the difference between the fair value and the carrying value, or in the comparative fair values, of investments, not including unrealized gains or losses on securities separately or otherwise categorized as trading, available-for-sale, or held-to-maturity, held at each balance sheet date and included in earnings for the period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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|
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
|
3 Months Ended | 12 Months Ended |
|---|---|---|
|
Dec. 31, 2011
|
Sep. 30, 2011
|
|
| Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] |
Note
1—Description of Business and Basis of
Accounting/Presentation
Parametric
Sound Corporation (“Parametric Sound” or the
“Company”) is a
technology company focused on delivering novel audio
solutions. The Company’s HyperSonic®
Sound or "HSS®"
technology pioneered the practical application of
parametric acoustic technology for generating audible sound
along a directional ultrasonic column. The Company’s
HSS-3000 products are compatible with standard media
players and beam sound to target a specific listening area
without the ambient noise of traditional speakers. The
creation of sound using the Company’s technology also
creates a unique sound image distinct from traditional
audio systems.
The
Company was incorporated in Nevada on June 2, 2010 as a
new, wholly owned subsidiary of LRAD Corporation in order
to effect the separation and spin-off of the HSS business.
On September 27, 2010, the 100% spin-off was completed and
we became a stand-alone, independent, publicly traded
company. The Company’s corporate headquarters are
located in Henderson, Nevada and product development and
assembly is performed in San Diego, California. Principal
markets for the Company’s products are North America,
Europe and Asia.
Basis
of Accounting
The
accompanying unaudited interim financial statements have
been prepared by the Company in accordance with U.S.
generally accepted accounting principles
(“GAAP”) for interim financial information and
pursuant to the applicable rules and regulations of the
Securities and Exchange Commission. In the opinion of
management, the accompanying financial statements contain
all adjustments necessary in order make the financial
statements not misleading. The condensed balance sheet as
of September 30, 2011 was derived from the Company’s
most recent audited financial statements. The financial
statements herein should be read in conjunction with the
Company’s audited financial statements and notes
thereto for the fiscal year ended September 30, 2011,
included in the Company’s Annual Report on Form 10-K
for the year ended September 30, 2011. Operating results
for the three months ended December 31, 2011 may not
necessarily be indicative of results to be expected for any
other interim period or for the full year.
Use of
Estimates
The
preparation of financial statements in conformity with U.S.
GAAP requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities
and disclosures of contingent assets and liabilities at the
date of the financial statements, as well as the reported
amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
These estimates and assumptions include, but are not
limited to, assessing the following: valuation of
inventory, impairment of intangible assets, the fair value
of share-based compensation and warrants, valuation of
acquired intangible assets and valuation allowance related
to deferred tax assets.
Liquidity/Going
Concern
The
financial statements have been prepared on a going concern
basis contemplating the realization of assets and the
satisfaction of liabilities in the normal course of
business. The Company incurred a net loss of $531,017 for
the three months ended December 31, 2011 and $1,484,458 for
the year ended September 30, 2011 and has financed its
operations to date from debt and equity financings. As of
December 31, 2011 the Company’s working capital
balance was $16,502 and the Company currently has no other
sources of available financing. In July 2011 the Company
commenced deliveries of its HSS-3000 products. There can be
no assurance that the Company’s products will achieve
the market success necessary to achieve profitable
operations and to generate sufficient cash flow to fund the
Company’s operations. The Company will be reliant on
existing working capital or on obtaining additional debt or
equity financing sufficient to sustain operations until
profitability and positive cash flow can be
achieved.
The
continuation of the Company as a going concern is dependent
on its ability to grow revenues, and if necessary, to
obtain additional financing from outside sources.
Management’s plans include (a) increasing HSS-3000
revenues from legacy customers and by obtaining new
commercial customers, (b) developing new or improved
products and audio solutions targeted for consumer audio
markets, (c) pursuing a partnering and licensing strategy
to commercialize products in consumer markets, (d)
exercising cost controls to conserve cash, and (e)
obtaining public or private financing. The Company intends
on financing its market expansion and activities from the
sale of public securities or obtaining additional financing
from other traditional financing sources. There is no
assurance that the Company will be successful in its plans
in generating funds or obtaining additional financing to
sustain its operations for twelve months or beyond. Should
the Company be unable to generate funds from operations or
obtain required financing, it may have to curtail
operations, which may have a material adverse effect on its
financial position and results of operations. The
accompanying financial statements do not include any
adjustments that would be necessary should the Company be
unable to continue as a going concern and, therefore, be
required to liquidate its assets and discharge its
liabilities in other than the normal course of business and
at amounts different from those reflected in the
accompanying financial statements.
Financial
Instruments
At
December 31, 2011, there was no difference between the
carrying values of the Company’s cash equivalents and
fair market value. For certain financial instruments,
including accounts payable, accrued expenses and due to
related party, the carrying amounts approximate fair value
due to their relatively short maturities.
Reclassifications
Where
necessary, the prior year’s information has been
reclassified to conform to the current period’s
statement presentation.
Loss
Per Share
Basic
loss per common share is computed by dividing net loss by
the weighted-average number of shares of common stock
outstanding during the period. Diluted net loss per common
share reflects the potential dilution of securities that
could share in the earnings of an entity. The
Company’s losses for the periods presented cause the
inclusion of potential common stock instruments outstanding
to be antidilutive. Stock options and warrants for a total
of 5,665,000 and 2,955,000 shares of common stock were
outstanding at December 31, 2011 and 2010, respectively.
These securities are not included in the computation of
diluted net loss per common share as their inclusion would
be antidilutive.
Recent
Accounting Pronouncements
The
Company reviews new accounting standards as
issued. Although some of these accounting
standards issued or effective after the end of the
Company’s previous fiscal year may be applicable to
the Company, it has not identified any standards that it
believes merit further discussion. The Company
believes that none of the new standards will have a
significant impact on its financial statements.
|
1.
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Organization
and Business Description
Parametric
Sound Corporation (“Parametric Sound” or the
“Company”) is a
technology company focused on delivering novel directed audio
solutions. The Company’s HyperSonic Sound or
“HSS” technology pioneered the practical
application of parametric acoustic technology for
generating audible sound along a directional ultrasonic
column. The Company’s HSS-3000 products are compatible
with standard media players and beam sound to target a
specific listening area without the ambient noise of
traditional speakers. The Company’s principal markets
are North America, Europe and Asia.
In
April 2010, the board of directors of LRAD Corporation
approved a plan to separate its HSS product line into a new
independent, stand-alone company. In a special meeting of
stockholders held June 2, 2010, the proposal to separate the
HSS business from LRAD was approved, and on June 2, 2010,
LRAD created a new wholly owned subsidiary, Parametric Sound,
into which the HSS business and substantially all of the
assets of the business and associated intellectual property
rights were contributed.
All
outstanding shares of Parametric Sound common stock were
distributed to the stockholders of LRAD Corporation on
September 27, 2010 (“Spin-Off”), at a ratio of
one share of Parametric Sound common stock for each two
shares of LRAD Corporation’s common stock held as of
the record date of September 10, 2010. LRAD Corporation
retained no ownership or other form of interest in Parametric
Sound subsequent to the Spin-Off. Following the Spin-Off, the
Company’s operations consist solely of the operations
described herein.
In
connection with the Spin-Off, Parametric Sound and LRAD
Corporation entered into a separation agreement and a tax
sharing agreement. See Note 2 for further discussion
regarding these agreements.
Basis of
Accounting
The
balance sheets as of September 30, 2011 and 2010 reflect the
balances of Parametric Sound as an independent company. The
statement of operations for the year ended September 30, 2011
reflects the activity of Parametric Sound as a stand-alone
company. Amounts included in the statement of operations for
the year ended September 30, 2010 reflect LRAD
Corporation’s HSS business activities through September
27, 2010 adjusted for activity through September 30, 2010
including reimbursement of certain start-up, Spin-Off and
technology costs expenditures on the Company’s behalf
during its startup and development (see Note 2). The
Company’s financial statements for the year ended
September 30, 2010 include activity derived from LRAD
Corporation’s historical consolidated financial
statements using LRAD Corporation’s historical cost
basis of assets and liabilities of the various activities
that reflect the results of operations, financial condition
and cash flows of Parametric Sound as a component of LRAD
Corporation. Historically, the HSS business in LRAD
Corporation operated as a product line and not a separate
segment and not as an independent stand-alone business. For
purposes of preparing the financial statements in the period
prior to the September 27, 2010 Spin-Off, Parametric Sound
was allocated certain expenses from LRAD Corporation with
such expenses reflected in the statements of operations as
expense allocations from LRAD Corporation. Until the
Spin-Off, Parametric Sound was fully integrated with LRAD
Corporation, including product development, production, sales
and distribution, accounting, finance, treasury, payroll,
legal services and investor relations.
Management
believes that the assumptions and allocation methods
underlying such prior year financial statements are
reasonable in all material respects. However, the costs
allocated to the Company are not necessarily indicative of
the costs that would have been incurred if the Company
operated as a stand-alone entity during the year ended
September 30, 2010.
Going
Concern
The
financial statements have been prepared on a going concern
basis contemplating the realization of assets and the
satisfaction of liabilities in the normal course of business.
The Company had a net loss of $1,484,458 for the year ended
September 30, 2011 and has financed its operations from debt
and equity financing. As of September 30, 2011 our working
capital balance was approximately $428,000 and the Company
has no other sources of financing. In July 2011 the Company
commenced deliveries of new products based on improved HSS
technology. Prior historical revenues are no indication of
future revenues and there can be no assurance that the
Company’s new products will achieve market success. The
Company will be reliant on existing working capital or
obtaining additional debt or equity financing sufficient to
sustain operations until profitability can be
achieved.
The
continuation of the Company as a going concern is dependent
on its ability to grow revenues, and if necessary, to obtain
additional financing from outside sources. Management’s
plans include (a) increasing HSS-3000 revenues from legacy
customers and by obtaining new customers, (b) developing and
introducing new products targeted for new directed audio
markets, (c) exercising cost controls to conserve cash, and
(d) if necessary, obtaining additional financing. There is no
assurance that the Company will be successful in its plans or
in generating or raising funds, if necessary, to sustain its
operations for twelve months or beyond. Should the Company be
unable to generate funds from operations or obtain required
financing, it may have to curtail operations, which may have
a material adverse effect on its financial position and
results of operations. The accompanying financial statements
do not include any adjustments that would be necessary should
the Company be unable to continue as a going concern and,
therefore, be required to liquidate its assets and discharge
its liabilities in other than the normal course of business
and at amounts different from those reflected in the
accompanying financial statements.
LRAD
Corporation Net Investment
Because
historically, the HSS business in LRAD Corporation operated
as a product line and not a separate segment and not as an
independent stand-alone business LRAD Corporation’s
investment in Parametric Sound is shown in lieu of
stockholder’s equity in the financial statements for
periods prior to September 27, 2010. The net investment
account represents cumulative investments in, distributions
from and losses of the HSS business.
No
cash or accounts receivable were transferred at the Spin-Off
and Parametric Sound paid for all Spin-Off related costs and
reimbursed technology development costs. LRAD Corporation
retained certain inventory for outstanding customer orders
and to support outstanding warranty obligations (See Note
2).
Loss Per
Share
Basic
loss per common share is computed by dividing net loss by the
weighted-average number of shares of common stock outstanding
during the period. Diluted net loss per common share reflects
the potential dilution of securities that could share in the
earnings of an entity. The Company’s losses for the
periods presented cause the inclusion of potential common
stock instruments outstanding to be antidilutive. Stock
options and warrants for a total of 3,335,000 and 1,400,000
shares of common stock were outstanding at September 30, 2011
and 2010, respectively. These securities are not included in
the computation of diluted net loss per common share as their
inclusion would be antidilutive.
For
the year ended September 30, 2010 the net loss per basic and
diluted share and the weighted-average shares outstanding
were calculated based on the 15,306,064 shares issued in
connection with the Spin-Off.
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 (e.g., inventory valuation, valuation of
intangible assets, warranty reserves, allocations of expenses
incurred by LRAD Corporation and the fair value of financial
instruments) that affect the reported amounts of assets and
liabilities, and disclosure of contingent assets and
liabilities at the date of the financial statements and
affect the reported amounts of revenues and expenses during
the reporting period. Actual results could materially differ
from those estimates.
Fair
Value of Financial Instruments
The
carrying amounts of cash, accounts payable and accrued
liabilities approximate fair values due to the short maturity
of these instruments. The fair value of warrants issued in
September 2010 were estimated using a Black-Scholes valuation
model (See Note 7).
Concentrations
of Credit Risk
Financial
instruments, which potentially subject the Company to
concentrations of credit risk, consist primarily of cash
equivalents. Due to the relative short nature of such
investments, the carrying amount approximates fair value. The
Company places its cash in demand deposit and money market
accounts at one bank and such balances may at times be in
excess of amounts insured by federal agencies, which is
$250,000 as of September 30, 2011. The Company does not
believe that it is subject to any unusual financial risk
beyond the normal risk associated with commercial banking
relationships. The Company performs periodic evaluations of
the relative credit standing of these financial institutions.
The Company has not experienced any significant losses on its
cash equivalents.
Accounts
Receivable and Allowance for Doubtful Accounts
The
Company had no accounts receivable or allowance for doubtful
accounts at September 30, 2011 due to a policy of payment
prior to shipment. The Company may make sales on credit in
future periods whereupon it will make periodic
evaluations of the creditworthiness of its customers and
manage its exposure to losses from bad debts by limiting the
amount of credit extended.
Contract
Manufacturers
The
Company uses contract manufacturers for production of certain
components and sub-assemblies. The Company may provide parts
and components to such parties from time to time but
recognizes no revenue or markup on such transactions. The
Company performs assembly of products in-house using
components and sub-assemblies from a variety of contract
manufacturers and suppliers.
Inventories
Inventories
are valued at the lower of cost or net realizable value. The
cost of substantially all of the Company’s inventory is
determined by the weighted average cost method.
Inventory is comprised of raw materials, assemblies and
finished products intended for sale to customers. The
Company evaluates the need for reserves for excess and
obsolete inventories determined primarily based upon
estimates of future demand for the Company’s
products. At September 30, 2011 and 2010, the reserve
for obsolescence related to certain raw materials obtained at
the Spin-Off, some of which are being used to produce the
Company’s HSS-3000 products.
Equipment,
Tooling and Depreciation
Equipment
and tooling is stated at cost. Depreciation on equipment and
tooling is computed over the estimated useful lives of two to
three years using the straight-line method. Upon retirement
or disposition of equipment or tooling, the related cost and
accumulated depreciation or amortization is removed and a
gain or loss is recorded.
Intangibles
Patents,
licenses and trademarks are carried at cost less accumulated
amortization. Legal cost incurred to file, renew, or extend
the term of recognized intangible assets are capitalized.
Intangible assets are amortized over their estimated useful
lives, which have been estimated to be 15 years for patents,
licenses and trademarks protecting the Company’s
products. The Company amortizes certain patents acquired in
the Spin-Off, classified as defensive patents, over a
weighted average of three years. The carrying value of
intangibles is periodically reviewed and impairments, if any,
are recognized when the expected future benefit to be derived
from an individual intangible asset is less than its carrying
value.
Revenue
Recognition
The
Company derives its revenue primarily from product sales.
Product sales are recognized in the periods that products are
shipped to customers (FOB shipping point) or when product is
received by the customer (FOB destination), when the fee is
fixed and determinable, when collection of resulting
receivables is probable and there are no remaining
obligations on the part of the Company.
Shipping
and Handling Costs
Shipping
and handling costs are included in cost of revenues. The
amount of shipping and handling costs invoiced to customers
is included in revenue. Shipping and handling costs were $628
and $9,469 for the fiscal years ended September 30, 2011
and 2010, respectively.
Research
and Development Costs
Research
and development costs are expensed as incurred.
Warranty
Reserves
The
Company warrants its products to be free from defects in
materials and workmanship for a period of one year from the
date of purchase. The warranty is generally a limited
warranty. The Company currently provides direct warranty
service. The Company establishes a warranty reserve based on
anticipated warranty claims at the time revenue from product
sales is recognized. Factors affecting warranty reserve
levels include the number of units sold and anticipated cost
of warranty repairs and anticipated rates of warranty claims.
The Company evaluates the adequacy of the provision for
warranty costs each reporting period.
Deferred
Financing Costs
Costs
related to the issuance of debt are capitalized and amortized
to interest expense over the life of the related debt on a
straight line basis which is not materially different from
the results obtained using the effective interest
method.
Classification
of Warrants
The
Company accounts for warrants as either equity or liabilities
based upon the characteristics and provisions of each
particular instrument. Warrants valued and classified as
equity are recorded as additional paid-in capital on the
Company’s balance sheet and no further adjustment to
valuation is made. The Company has no warrants or other
derivative financial instruments that require separate
accounting as liabilities and periodic revaluation.
Income
Taxes
The
Company accounts for its income taxes under the asset and
liability method. Under this method, deferred tax assets and
liabilities are determined based on temporary differences
between financial statement and tax basis of assets and
liabilities and net operating loss and credit carry-forwards
using enacted tax rates in effect for the year in which the
differences are expected to reverse. Valuation allowances are
established when it is more likely than not that some portion
of the deferred tax assets will not be realized.
The
Company’s operations were included in LRAD
Corporation’s consolidated U.S. federal and state
income tax returns prior to the Spin-Off, therefore, the
Company was not subject to taxation by federal and state
authorities for the tax periods before the Spin-Off.
The Company filed a separate return for the short year
tax period ended September 30, 2010. The provision for income
taxes through the Spin-Off was determined on a separate
return basis and based on earnings reported in the Company's
statement of operations and comprehensive income. The
historical net operating loss carryforwards and tax credits
generated by Parametric Sound prior to the Spin-Off remained
with LRAD Corporation subsequent to the separation.
Comprehensive
Loss
Comprehensive
loss consists of net loss and other gains and losses
affecting stockholders’ equity that under U.S.
generally accepted accounting principles are excluded from
reported net loss. There were no differences between net loss
and comprehensive loss for any of the periods
presented.
Impairment
of Long-Lived Assets
Long-lived
assets and identifiable intangibles held for use are reviewed
for impairment whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable. If
the sum of undiscounted expected future cash flows is less
than the carrying amount of the asset or if changes in facts
and circumstances indicate, an impairment loss is recognized
and measured using the asset’s fair value.
Share-Based
Compensation
The
Financial Accounting Standards Board (“FASB”)
Accounting Standards Codification
(“ASC”) 718, Compensation-Stock
Compensation (“ASC 718”) and
ASC 505-50, Equity-Based
Payments to Non-Employees (“ASC
505-50”). ASC
718 requires
measurement of all employee stock-based awards using a
fair-value method and recording of related compensation
expense in the financial statements over the requisite
service period. Further, as required under ASC 718, the
Company estimates forfeitures for stock-based awards that are
not expected to vest.
Share-Based
Payments for Goods and Services
Under
ASC 505-50 options or stock awards issued to non-employees
who are not directors of the Company are recorded at the fair
value of the consideration received, when more reliably
measurable, otherwise at the estimated value of the stock
options issued at the measurement date. Non-employee options
are periodically revalued as the options vest so the cost
ultimately recognized is equivalent to the fair value on the
date performance is complete with such expense recognized
over the related service period on a graded vesting
method.
Reclassifications
Where
necessary, the prior year’s information has been
reclassified to conform to the fiscal 2011 statement
presentation.
Recent
Accounting Pronouncements
In
September 2011, the FASB issued Accounting Standards Update
("ASU") 2011-08, Intangibles -
Goodwill and Other which allows an entity to first
assess qualitative factors to determine whether it is
necessary to perform the two-step quantitative
goodwill impairment test. Under these amendments,
an entity would not be required to calculate the fair value
of a reporting unit unless the entity determines, based on a
qualitative assessment, that it is more likely than not that
its fair value is less than its carrying amount. ASU 2011-08
will be effective for the Company in fiscal 2013, with early
adoption permitted. The Company does not expect the adoption
of this update will have a material effect on its financial
statements.
In
June 2011, the FASB issued ASU 2011-05, Comprehensive
Income providing guidance regarding the presentation
of comprehensive income. The new standard requires the
presentation of comprehensive income, the components of net
income and the components of other comprehensive income
either in a single continuous statement of comprehensive
income or in two separate but consecutive statements. The new
standard also requires presentation of adjustments for items
that are reclassified from other comprehensive income to net
income in the statement where the components of net income
and the components of other comprehensive income are
presented. The updated guidance of ASU 2011-05 is effective
on a retrospective basis for financial statements issued for
fiscal years, and interim periods within those fiscal years,
beginning with the Company’s fiscal 2012 year. The
Company does not expect the adoption of this update will have
a material effect on its financial statements.
In
May 2011, the FASB issued ASU 2011-04, Fair Value
Measurement providing additional guidance on fair
value measurements that clarifies the application of existing
guidance and disclosure requirements, changes certain fair
value measurement principles and requires additional
disclosures about fair value measurements. The updated
guidance of ASU 2011-04 is effective on a prospective basis
for financial statements issued for fiscal years, and interim
periods within those fiscal years, beginning with the
Company’s fiscal 2012 year. The
Company does not expect the adoption of this update will have
a material effect on its financial statements.
Subsequent
Events
Management
has evaluated events subsequent to September 30, 2011 through
the date that the accompanying financial statements were
filed with the Securities and Exchange Commission for
transactions and other events which may require adjustment of
and/or disclosure in such financial statements.
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- Definition
The entire disclosure for organization, consolidation and basis of presentation of financial statements disclosure. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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2. SPIN-OFF OF HSS BUSINESS
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12 Months Ended |
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Sep. 30, 2011
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| Mergers, Acquisitions and Dispositions Disclosures [Text Block] |
2.
SPIN-OFF OF HSS BUSINESS
On
September 27, 2010, LRAD Corporation separated its HSS
business through the Spin-Off of Parametric Sound. LRAD
Corporation contributed most of its HSS business assets to
Parametric Sound. All outstanding shares of the Company were
distributed to LRAD Corporation’s stockholders of
record at the close of business on September 10, 2010 as a
pro-rata, tax-free dividend of one share of Parametric Sound
common stock for every two shares of LRAD Corporation common
stock.
On
September 27, 2010, the Company entered into a Separation and
Distribution Agreement (“Separation Agreement”)
with LRAD Corporation that set forth the terms and conditions
of the separation of the Company from LRAD Corporation,
provided the framework for the relationship between the
Company and LRAD Corporation following the separation and
provided for the allocation of assets, liabilities and
obligations between the Company and LRAD Corporation in
connection with the separation. The Separation Agreement
provided for a transition related to HSS business and
customers with LRAD
Corporation fulfilling orders received through
September 27, 2010.
Thereafter LRAD Corporation could fulfill continuing purchase
orders for one project with customer Cardinal Health through
the completion of the project and through December 31, 2010
could accept unsolicited follow-on orders for HSS products
from prior customers. LRAD Corporation retained
inventory and supplies to fulfill such anticipated orders and
retained responsibility for warranty, returns and related
liabilities for such customers and sales. On September 27,
2010 the Company also entered into a Tax Sharing Agreement
with LRAD Corporation that generally governs the
parties’ respective rights, responsibilities and
obligations after the separation with respect to
taxes.
The
total value of the LRAD Corporation stock dividend of
$454,006 was based on the net book value of the net assets
that were transferred from LRAD Corporation in connection
with the Spin-Off in accordance with ASC 845-10-30-10, Nonreciprocal
Transfers with Owners.
In
connection with the Spin-Off, on September 27, 2010, the
Company entered into a License and Royalty Agreement with
related party Syzygy Licensing LLC (“Syzygy”)
relating to new technology invented by the Company’s
President and CEO, Elwood G. Norris. This technology has been
implemented in the Company’s new HSS-3000 product line.
In connection with the new technology the Company reimbursed
$91,415 of prior technology and patent costs paid by Syzygy
and assumed $90,500 of technology and product development
costs incurred prior to the Spin-Off including $25,000 owed
to Mr. Norris for product development services.
On
September 27, 2010, the Company also agreed to reimburse
$160,580 of Parametric Sound related Spin-Off and startup
costs paid by Syzygy and assumed $62,037 of Spin-Off and
startup costs and expenses incurred prior to the Spin-Off
including $25,000 owed to Sunrise Capital, Inc. for the
services of Treasurer, Secretary and CFO, Mr. Barnes.
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- Definition
The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings. No definition available.
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3. INVENTORIES, NET
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Dec. 31, 2011
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Sep. 30, 2011
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| Inventory Disclosure [Text Block] |
2.
Inventories, net
Inventory
is recorded at the lower of cost and net realizable value.
The cost of substantially all of the Company’s
inventory is determined by the weighted average cost
method. Inventories consisted of the following:
The
Company relies on one supplier for film for its HSS
products. The Company’s ability to manufacture its
HSS products could be adversely affected if it were to lose
a sole source supplier and was unable to find an
alternative supplier.
The
reserve for obsolescence was reduced by a $3,650 non-cash
inventory reserve reduction in the three months ended
December 31, 2011 through the use of such parts in the
production of HSS-3000 products and prototypes. The Company
may continue to incur non-cash inventory reserve reductions
through the use of previously reserved legacy HSS
parts.
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3.
INVENTORIES, NET
Inventories
consist of the following:
The
Company relies on one supplier for film for its HSS products.
The Company’s ability to manufacture its HSS product
could be adversely affected if it were to lose a sole source
supplier and was unable to find an alternative
supplier.
The
reserve for obsolescence increased by $63,094 in the year
ended September 30, 2010 due to obsolete legacy HSS parts and
components. The reserve for obsolescence was reduced by a
$32,062 non-cash inventory reserve reduction in the year
ended September 30, 2011 through the use of such parts in the
production of prototypes and HSS-3000 products. The Company
may continue to incur non-cash inventory reserve reductions
through the use of reserved legacy HSS parts obtained in
connection with the Spin-Off.
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- Definition
The entire disclosure for inventory. This may include, but is not limited to, the basis of stating inventory, the method of determining inventory cost, the major classes of inventory, and the nature of the cost elements included in inventory. If inventory is stated above cost, accrued net losses on firm purchase commitments for inventory and losses resulting from valuing inventory at the lower-of-cost-or-market may also be included. For LIFO inventory, may disclose the amount and basis for determining the excess of replacement or current cost over stated LIFO value and the effects of a LIFO quantities liquidation that impacts net income. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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4. EQUIPMENT AND TOOLING, NET
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Dec. 31, 2011
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Sep. 30, 2011
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| Property, Plant and Equipment Disclosure [Text Block] |
3.
Equipment and Tooling, net
Equipment
and tooling consisted of the following:
Depreciation
expense was $16,646 and $992 for the three months ended
December 31, 2011 and 2010, respectively.
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4.
EQUIPMENT AND TOOLING, NET
Equipment
and tooling consist of the following:
Depreciation
expense was $23,400 and $231 for the years ended
September 30, 2011 and 2010, respectively.
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- 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. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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5. INTANGIBLE ASSETS, NET
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Dec. 31, 2011
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Sep. 30, 2011
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| Goodwill and Intangible Assets Disclosure [Text Block] |
4.
Intangible Assets, net
Intangible
assets consist of the following:
Purchased
technology consists of patent applications and intellectual
property acquired from a related party (see Note 9).
Aggregate
amortization expense for the Company’s intangible
assets was $10,354 and $10,161 during the three months
ended December 31, 2011 and 2010, respectively. In addition
to amortization, the Company wrote off $14,242 of
impaired patent costs during the three months ended
December 31, 2010.
As
of December 31, 2011 estimated intangible assets
amortization expense for each of the next five fiscal years
and thereafter are as follows:
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5.
INTANGIBLE ASSETS, NET
Intangible
assets consist of the following:
Aggregate
amortization expense for the Company’s intangible
assets was $39,557 and $71,762 during the years ended
September 30, 2011 and 2010, respectively. In addition
to amortization, the Company wrote off $28,616 and $325,818
of impaired patent costs during the years ended
September 30, 2011 and 2010, respectively.
The
following table shows the estimated amortization expense for
intangible assets for each of the five succeeding fiscal
years and thereafter:
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- Definition
The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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6. DEFERRED COMPENSATION AND ACCRUED LIABILITIES
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Dec. 31, 2011
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Sep. 30, 2011
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| Other Liabilities Disclosure [Text Block] | 5.
Deferred Compensation, Accrued and Other Related Party
Liabilities
Deferred
Compensation
Effective
October 1, 2010 the Company began accruing monthly
compensation for the services of its two executive officers
in the aggregate amount of $17,500 per
month. The balance accrued as of December 31,
2011 of $280,500 includes related employment taxes and
accrues without interest until the Board of Directors
determines there are sufficient funds available to pay the
accrued balances.
Accrued
Liabilities
Accrued
liabilities consists of the following:
Due to
Related Party
The
Company is obligated to related party Syzygy Licensing, LLC
(“Syzygy”) for $250,000 due on or before June
30, 2012 as partial consideration for assignment of patents
and intellectual property (see Note 9).
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6.
DEFERRED COMPENSATION AND ACCRUED LIABILITIES
Deferred
Compensation
Effective
October 1, 2010 the Company began accruing monthly
compensation for the services of its two executive officers
in the aggregate amount of $17,500 per month. The
balance accrued as of September 30, 2011 of $224,400 includes
related employment taxes and accrues without interest until
the Board of Directors determines there are sufficient funds
available to pay the accrued balances.
Accrued
Liabilities
Accrued
liabilities consist of the following:
The
Company establishes a warranty reserve based on anticipated
warranty claims at the time product revenue is recognized.
Factors affecting warranty reserve levels include the number
of units sold, anticipated cost of warranty repairs and
anticipated rates of warranty claims. The Company evaluates
the adequacy of the provision for warranty costs each
reporting period. In accordance with the Separation
Agreement, LRAD Corporation is obligated for warranty claims
related to sales prior to the Spin-Off and any subsequent HSS
related product sales made by LRAD in accordance with the
Separation Agreement.
Details
of the estimated warranty liability are as follows:
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- Definition
The entire disclosure for other liabilities. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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7. SUBORDINATED NOTES PAYABLE AND WARRANTS
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12 Months Ended |
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Sep. 30, 2011
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| Debt Disclosure [Text Block] |
7.
SUBORDINATED NOTES PAYABLE AND WARRANTS
In
September 2010 the Company sold $700,000 of 8% Subordinated
Promissory Notes, due September 28, 2011 (the
“Notes”), and accompanying warrants to purchase
an aggregate of 1,400,000 shares of common stock exercisable
at $0.30 per common share (“Warrants”). Of the
total Notes and Warrants issued, $260,000 of the Notes and
520,000 Warrants were purchased by Syzygy, a company owned
and controlled by the Company’s President and CEO (Mr.
Norris) and its Chief Financial Officer (“CFO”)
(James A. Barnes). An additional $100,000 of the Notes and
200,000 Warrants were purchased by an entity owned by the
Company’s President and CEO, Mr. Norris.
The
relative fair value of the Warrants of $264,427 was estimated
by management using the Black-Scholes pricing model and
estimates of expected investor discount rates (the
Company’s effective market borrowing rate) on the Note
and Warrant financing. Significant Level 3 inputs used to
calculate the fair value of the Warrants included stock
price, peer company volatility (99%), risk-free interest rate
(1.22%) and management’s assumption regarding effective
market borrowing rates (30%). The
relative fair value of the Warrants was recorded as a note
discount and was amortized as additional interest expense
using the effective interest method over the term of the
Notes. During the years ended September 30, 2011 and
2010, $263,272 and $1,155, respectively,
was amortized.
On
June 30, 2011, all 1,400,000 Warrants were exercised by the
holders, and pursuant to the terms of the Note agreement, the
Company exercised its right to offset the purchase price of
the Warrants against the outstanding Note principal
amount. Accordingly, as a result of the Warrant
exercise, the principal balance of the Notes was reduced by
$420,000 (See Note 9). The Warrants exercised included an
aggregate 720,000 Warrants held by the companies controlled
by the Company’s President and its CFO as described
above, resulting in the reduction of the Note principal
amounts held by these companies of $216,000.
Also
on June 30, 2011 the Company and certain Note holders entered
into an agreement pursuant to which the Note holders agreed
to convert an additional $250,000 of Note principal plus
$37,674 of accrued interest on the Notes into 410,963 shares
of the Company’s common stock based on a conversion
price of $0.70 per share. As the addition of the
conversion feature to the Note was deemed to be a substantial
modification of the Note agreement, this transaction was
accounted for as a debt extinguishment. The Company
determined that the reacquisition price of the debt was equal
to the outstanding Note principal plus accrued interest, and
accordingly, no gain or loss on the debt extinguishment
transaction was recorded. The Notes and accrued interest
converted pursuant to this agreement included aggregate Note
principal and accrued interest of $144,000 and $21,698,
respectively, relating to Notes held by the companies
controlled by the Company’s President and CFO.
On
September 28, 2011 the Company paid the remaining balance of
Notes of $30,000 and related accrued interest. The
Company incurred interest expense of $42,477 and $307,
respectively for the years ended September 30, 2011 and 2010
in connection with the Notes.
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- 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. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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8. INCOME TAXES
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Sep. 30, 2011
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| Income Tax Disclosure [Text Block] |
8.
INCOME TAXES
The
Company’s operations have historically been included in
LRAD Corporation’s consolidated U.S. federal and state
income tax returns. The income tax provision included in
these financial statements has been determined as if the
Company had filed separate income tax returns under its
existing structure for the periods presented. The Company
recorded no income tax expense in 2011 or 2010 due to losses
incurred. LRAD Corporation's tax filings for 2010 included
Parametric Sounds operations prior to the Spin-Off. The net
operating losses (NOL’s) and research and development
credits generated prior to the Spin-Off, remain with LRAD
Corporation.
The
Company generated federal tax net operating loss
carryforwards related to expenditures incurred after
September 27, 2010 including technology costs reimbursed to
Syzygy Licensing and other expenses incurred after
incorporation and paid after the Spin-Off. At September 30,
2011 the Company had a federal and state net operating
loss carryforward of approximately $1,400,000 that will
expire beginning in 2030 unless previously utilized.
The
provision for income taxes consists of the following:
A
reconciliation of income taxes at the federal statutory rate
of 34% to the effective tax rate for the years ended
September 30, 2011 and 2010 is as follows:
Upon
the Spin-Off, Parametric Sound did not benefit from any of
the carryforward tax attributes from prior periods including
net operating loss carryforwards. A valuation allowance has
been established to offset the deferred tax assets as
realization of such assets is uncertain. The components of
the net deferred tax assets are as follows:
The
Company adopted FASB ASC 740-10-25, Income
Taxes—Recognition (formerly FIN 48) as of the
date of incorporation. As of the date of the adoption, the
Company had no unrecognized tax benefits and there were no
material changes during the years ended September 30, 2011
and 2010. Due to the existence of the valuation allowance,
future changes in the Company’s unrecognized tax
benefits will not impact its effective tax rate. The
Company’s practice is to recognize interest and/or
penalties related to income tax matters in income tax
expense. Upon adoption of ASC 740-10-25, the Company did not
record any interest or penalties. The
Company is subject to income tax in the U.S. federal
jurisdiction and the state of California. All years since the
Company’s 2010 organization remain subject to
examination but there are currently no ongoing exams in any
taxing jurisdiction.
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- Definition
The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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9. CAPITAL STOCK
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Dec. 31, 2011
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Sep. 30, 2011
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| Stockholders' Equity Note Disclosure [Text Block] |
7.
Stockholders’ Equity
Summary
The
following table summarizes stockholders’ equity
activity for the three months ended December 31,
2011:
Stock
Purchase Warrants
There
was no warrant activity during the three months ended
December 31, 2011 and the Company has outstanding share
warrants as of December 31, 2011 held by related parties,
as follows:
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9.
CAPITAL STOCK
Pursuant to the
Spin-Off, effective on September 27, 2010 a total of
15,306,064 shares of common stock were distributed as a stock
dividend to the stockholders of LRAD Corporation, the
Company’s then sole stockholder. Parametric Sound was
incorporated on June 2, 2010 with authorized capital stock
consisting of 50,000,000 shares of common stock, par value
$0.001, and 1,000,000 shares of preferred stock, par value
$0.001.
The Company is
authorized under its certificate of incorporation and bylaws
to issue shares of preferred stock without any further action
by the stockholders. The board of directors has the authority
to divide any and all shares of preferred stock into series
and to fix and determine the relative rights and preferences
of the preferred stock, such as the designation of series and
the number of shares constituting such series, dividend
rights, redemption and sinking fund provisions, liquidation
and dissolution preferences, conversion or exchange rights
and voting rights, if any. Issuance of preferred stock by the
board of directors could result in such shares having
dividend and or liquidation preferences senior to the rights
of the holders of common stock and could dilute the voting
rights of the holders of common stock. No shares of preferred
stock have been issued and none were outstanding at September
30, 2011 or 2010.
Sale of
Common Stock and Warrants
On February 22,
2011, the Company entered into a Securities Purchase
Agreement with existing institutional shareholders
(considered related parties due to greater than 10%
ownership) and entities affiliated with its two executive
officers, pursuant to which the Company issued and sold for
cash 2,000,000 shares of common stock at a purchase price of
$0.50 per share. In connection with the financing, the
Company also issued warrants to the investors exercisable for
an aggregate of 2,000,000 shares of common stock at an
exercise price of $0.75 per share. The warrants are
exercisable until February 22, 2016. On September 30, 2011,
entities affiliated with the two executive officers exercised
400,000 of the warrants for cash of $300,000.
In
connection with the financing, the Company also entered into
a registration rights agreement with the investors, pursuant
to which the Company agreed to prepare, file and effect a
registration statement covering the resale of the shares of
common stock sold in the financing and the shares of common
stock issuable upon the exercise of the warrants. The
required registration statement became effective on March 28,
2011 and the Company has agreed to use commercially
reasonable efforts to maintain effectiveness. If the
registration statement becomes ineffective other than for
certain allowable periods, the Company will be obligated to
pay liquidated damages to the purchasers in the amount of
1.5% of the invested amount for each 30-day period
thereafter with the obligation terminating when the
securities are sold or otherwise available for unrestricted
sale. The Company evaluates this registration payment
arrangement under ASC 825-20 Financial
Instruments - Registration Payment Arrangements and
has determined no obligation for future potential penalties
is accruable under ASC 450-20 Contingencies -
Loss Contingencies as of September 30, 2011.
Warrant
Exercise
On
June 30, 2011 a total of 1,400,000 warrants issued in
September 2010 were exercised at a price of $0.30 per
share. Pursuant to the terms of the 8% Subordinated
Promissory Note agreement entered into in September 2010, the
Company exercised its right to offset the purchase price of
the Warrants against the outstanding Note principal
amount. Accordingly, as a result of the warrant
exercise, the principal balance of the Notes was reduced by
$420,000 (See Note 7).
As
described above, on September 30, 2011, entities affiliated
with the two executive officers exercised 400,000 warrants
for cash of $300,000.
Conversion
of Subordinated Promissory Notes and Accrued
Interest
On
June 30, 2011, subordinated promissory notes with an
outstanding principal balance of $250,000 plus related
accrued interest of $37,674 were converted into an aggregate
of 410,963 shares of common stock (See Note 7).
Summary
of Stock Purchase Warrants
The
following table summarizes information on warrant activity
during the years ended September 30, 2010 and 2011:
The
Company has outstanding share warrants as of September 30,
2011 all held by related parties, as follows:
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- 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. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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10. SHARE-BASED COMPENSATION
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Dec. 31, 2011
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Sep. 30, 2011
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| Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] |
6.
Share-Based Compensation
On
September 27, 2010 the Company adopted the 2010 Stock
Option Plan (the “2010 Plan”). The 2010 Plan
authorized the grant of options to purchase up to 3,000,000
shares of the Company’s common stock to directors,
officers, employees and consultants. On December 29, 2011
the Company adopted the 2012 Stock Option Plan (the
“2012 Plan”) providing authority to grant
options on 1,265,000 shares of common stock remaining
available for issuance under the 2010 Plan and new
authority for an additional 3,000,000 shares of common
stock. The 2012 Plan replaced the 2010 Plan but
awards previously granted under the 2010 Plan remain
outstanding in accordance with their terms. Any
outstanding option grants that expire or terminate, other
than through exercise or share settlement, under the 2010
Plan will also become eligible for grant under the 2012
Plan. Options
granted under the 2012 Plan may not be exercised
until stockholder approval or twelve months,
whereupon if approval has not been obtained, any incentive
options will be treated as non-qualified options.
The
Company uses the Black-Scholes option pricing model to
determine the estimated fair value of each option as of its
grant date or any revaluation date. These inputs are
subjective and generally require significant analysis and
judgment to develop. The following table sets forth the
significant weighted-average assumptions used in the
Black-Scholes model and the
calculation of stock-based compensation cost
(annualized percentages):
As
the Company’s stock only commenced trading in October
2010, management estimated its expected volatility for
fiscal 2011 by reviewing the historical volatility of the
common stock of a group of selected peer public companies
that operate in similar industries and are similar in terms
of stage of development or size and then projecting this
information toward its future expected results. Judgment
was used in selecting these companies, as well as in
evaluating the available historical volatility for these
peer companies. In the current fiscal year the Company
commenced using its historical volatility which did not
vary significantly from prior estimates. The risk-free
interest rate is based on rates published by the Federal
Reserve Board. The dividend yield of zero is based on the
fact that the Company has never paid cash dividends and has
no present intention to pay cash dividends. The Company has
a small number of option grants and limited exercise
history and accordingly has for all new option grants
applied the simplified method prescribed by SEC Staff
Accounting Bulletin 110, Share-Based
Payment: Certain Assumptions Used in Valuation Methods -
Expected Term, to estimate expected life (computed
as vesting term plus contractual term divided by two). An
estimated forfeiture rate was determined to be zero as the
number of grantees is limited and all are currently
expected to serve in their capacities during the vesting
period. Forfeitures are estimated at the time of the grant
and revised in subsequent periods if actual forfeitures
differ from those estimates or if the Company updates its
estimated forfeiture rate. Such amounts, if any, will be
recorded as a cumulative adjustment in the period in which
the estimate is changed.
The
Company recorded share-based compensation in its statements
of operations for the relevant periods as follows:
As
of December 31, 2011 total estimated compensation cost
relating to stock options granted but not yet vested was
$1,409,500. This cost is expected to be recognized over the
weighted average period of 1.1 years.
The
following table summarizes stock option activity for the
period:
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10.
SHARE-BASED COMPENSATION
Pursuant
to LRAD Corporation’s 2005 Equity Incentive Plan, the
Company recorded $5,521 of share-based compensation expense
for the year ended September 30, 2010 related to personnel
whose salary and benefit costs were allocated to the Company.
No stock options were granted to such allocated personnel
during fiscal 2010 and no legacy options were assumed by the
Company in connection with the Spin-Off.
On
September 27, 2010 the Company adopted the 2010 Stock Option
Plan (the “2010 Plan”). The 2010 Plan authorizes
the grant of options to purchase up to 3,000,000 shares of
the Company’s common stock to directors, officers,
employees and consultants. During the year ended
September 30, 2011 the Company granted options on 1,735,000
shares of common stock under the 2010 Plan.
The
Company uses the Black-Scholes option pricing model to
determine the estimated fair value of each option as of its
grant date or any revaluation date. These inputs are
subjective and generally require significant analysis and
judgment to develop. The following table sets forth the
significant weighted-average assumptions used in the
Black-Scholes model and the
calculation of stock-based compensation cost
(annualized percentages):
Since
the Company’s stock only commenced trading after the
Spin-Off, the Company’s management estimated its
expected volatility by reviewing the historical volatility of
the common stock of a group of selected peer public companies
that operate in similar industries and are similar in terms
of stage of development or size and then projecting this
information toward its future expected results. Judgment was
used in selecting these companies, as well as in evaluating
the available historical volatility for these peer companies.
The risk-free interest rate is based on rates published by
the Federal Reserve Board. The dividend yield of zero is
based on the fact that the Company has never paid cash
dividends and has no present intention to pay cash dividends.
The Company has a small number of option grants and no
exercise history and accordingly has for all new option
grants applied the simplified method prescribed by SEC Staff
Accounting Bulletin 110, Share-Based
Payment: Certain Assumptions Used in Valuation Methods -
Expected Term, to estimate expected life (computed as
vesting term plus contractual term divided by two). An
estimated forfeiture rate was determined to be zero as the
number of grantees is limited and all are currently expected
to serve in their capacities during the vesting period.
Forfeitures are estimated at the time of the grant and
revised in subsequent periods if actual forfeitures differ
from those estimates or if the Company updates its estimated
forfeiture rate. Such amounts, if any, will be recorded as a
cumulative adjustment in the period in which the estimate is
changed.
F-17
The
Company recorded share-based compensation in its statements
of operations for the relevant periods as follows:
In
addition the Company issued stock options valued at $20,000
during the year ended September 30, 2011 to a vendor as
payment for tooling costs which was capitalized and included
in equipment and tooling at September 30, 2011. The recorded
value of these options was determined based on the value of
the services provided as this was deemed to be a more
reliable measurement of the consideration received.
As
of September 30, 2011 total estimated compensation cost
relating to stock options granted but not yet vested was
$234,857. This cost is expected to be recognized over the
weighted average period of 1.1 years.
The
following table summarizes stock option activity for the
period:
The
following table summarizes information about stock options
outstanding at September 30, 2011:
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- Definition
Disclosure of accounting policy for stock option and stock incentive plans. This disclosure may include (1) the types of stock option or incentive plans sponsored by the entity (2) the groups that participate in (or are covered by) each plan (3) significant plan provisions and (4) how stock compensation is measured, and the methodologies and significant assumptions used to determine that measurement. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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11. COMMITMENTS, CONTINGENCIES AND CONFLICTS OF INTEREST
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3 Months Ended | 12 Months Ended |
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| Commitments and Contingencies Disclosure [Text Block] | 8. Commitments and Contingencies
Facility
Leases
Commencing
June 1, 2011 the Company leased 3,498 square feet of
improved assembly and warehouse space in Poway, California
for a period of 25 months terminating June 30, 2013. The
gross monthly base rent is $3,498 through May 31, 2012,
thereafter increasing to $3,603 per month for the term of
the lease, subject to certain future adjustments. The
Company’s President and CEO, Mr. Norris, executed a
personal guarantee of the lease without
compensation.
The
Company’s executive office in Henderson, Nevada was
occupied in July 2011 under a lease agreement that expired
on June 30, 2011. The Company is continuing month-to-month
rental at $500 per month for reduced space of approximately
500 square feet.
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11.
COMMITMENTS, CONTINGENCIES AND CONFLICTS OF INTEREST
Facility
Lease
Commencing
June 1, 2011 the Company leased 3,498 square feet of improved
assembly and warehouse space in Poway, California for a
period of 25 months terminating June 30, 2013. The gross
monthly base rent is $3,498 through May 31, 2012 thereafter
increasing to $3,603 per month for the term of the lease,
subject to certain future adjustments. The Company’s
President and CEO, Mr. Norris, executed a personal guarantee
of the lease without compensation.
The
Company’s executive office in Henderson, Nevada was
occupied in July 2011 under a lease agreement that expired on
June 30, 2011. The Company is continuing month-to-month
rental at $500 per month for reduced space of approximately
500 square feet.
The
Company has no other operating leases and the remaining
future annual minimum lease payment obligation under the
foregoing facility lease is $42,396 and $32,427 for the years
ending September 30, 2012 and 2013, respectively.
Technology
License Agreement
The Company is
obligated to pay royalties and make certain future
expenditures pursuant to a license and royalty agreement
dated September 27, 2010 with Syzygy, a company owned and
controlled by executive officers Mr. Norris and Mr.
Barnes. The agreement provides for royalties of 5%
of revenues from products employing the licensed parametric
sound technology and a term of 20 years or the life of any
resulting patent, whichever is greater. In the event no
patent covering the licensed technology is issued after four
years, then the royalty rate reduces to 3% in any territory
until or if a patent is issued for any such territory. The
Company may not sublicense without the permission of Syzygy,
and sublicense royalty rates are subject to future
negotiation in good faith. The license may terminate if the
Company does not use commercially reasonable efforts to
pursue the parametric sound business. The Company incurred
and accrued $3,835 as royalties pursuant to this agreement
for the year ended September 30, 2011.
In addition to
the reimbursed costs paid as outlined in Note 2, the Company
is obligated to reimburse Syzygy’s future costs, in
filing for, prosecuting and maintaining any of the licensed
patents in the United States. The Company incurred and
capitalized $28,237 and $6,486 related to such licensed
patents during the fiscal year ended September 30, 2011 and
2010, respectively. The Company may request that Syzygy file
patent applications in additional territories, in which case
the Company shall reimburse Syzygy for all costs associated
therewith.
Conflicts
of Interest
Certain conflicts
of interest now exist and will continue to exist between the
Company and its executive officers and directors due to the
fact that they have other employment, business and investment
interests to which they devote some attention and they are
expected to continue to do so. Company executive officers
also manage and control Syzygy a licensing company that owns
and is licensing to the Company certain technology for
producing parametric sound (see the discussion above and Note
2) and certain conflicts could arise in future dealings
between Syzygy and the Company. The Company has not
established policies or procedures for the resolution of
current or potential conflicts of interest between the
Company and management or management-affiliated entities
including Syzygy. There can be no assurance that members
of management will resolve all conflicts of interest in the
Company’s favor. Officers and directors are
accountable to the Company as fiduciaries, which means that
they are legally obligated to exercise good faith and
integrity in handling the Company’s
affairs. Failure by them to conduct the
Company’s business in its best interests may result in
liability to them. While the Company’s directors and
officers may be excluded from liability for certain actions
(see Indemnification below), there is no assurance that the
Company’s officers and directors would be excluded from
liability or indemnified if they breached their loyalty to
the Company.
Guarantees
and Indemnifications
Our officers and
directors are indemnified as to personal liability as
provided by the Nevada Revised Statutes, the Company’s
articles of incorporation and bylaws and by indemnification
agreements with the Company. The Company may also undertake
indemnification obligations in the ordinary course of
business related to its products and the issuance of
securities with customers, investors, vendors and business
parties. The Company is unable to estimate with any
reasonable accuracy the liability that may be incurred
pursuant to any such indemnification obligations now or in
the future. Because of the uncertainty surrounding these
circumstances, the Company’s current or future
indemnification obligations could range from immaterial to
having a material adverse impact on its financial position
and its ability to continue in the ordinary course of
business. The Company has no liabilities recorded for such
indemnities.
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- Definition
The entire disclosure for commitments and contingencies. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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12. MAJOR CUSTOMERS AND SUPPLIERS
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12.
MAJOR CUSTOMERS AND SUPPLIERS
Major
Customers
For
the fiscal year ended September 30, 2011, revenues from
two customers accounted for 46% and 35% of total revenues. No
other single customer represented more than 10% of total
revenues. For the fiscal year ended September 30, 2010,
revenues from three customers accounted for 34%, 13% and 11%
of total revenues. No other single customer represented more
than 10% of total revenues.
Suppliers
The
Company has a number of components and sub-assemblies
produced by outside suppliers, some of which are sourced from
a single supplier, which can magnify the risk of shortages
and decrease the Company’s ability to negotiate with
suppliers on the basis of price. In particular, the Company
depends on its HSS piezo-film supplier to provide expertise
and materials used in the Company’s proprietary HSS
emitters. If supplier shortages occur, or quality problems
arise, then production schedules could be significantly
delayed or costs significantly increased, which could in turn
have a material adverse effect on the Company’s
financial condition, results of operation and cash
flows.
At
September 30, 2011 the Company was committed for
approximately $125,000 for future inventory deliveries that
are generally subject to modification or rescheduling in the
normal course of business.
Segment
and Related Information
The
Company business consists of only one product line.
Accordingly, the Company operates in one reportable
segment.
The
following table summarizes revenues by geographic region.
Revenues are attributed to countries based on customer
location.
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- Definition
The entire disclosure for any concentrations existing at the date of the financial statements that make an entity vulnerable to a reasonably possible, near-term, severe impact. This disclosure informs financial statement users about the general nature of the risk associated with the concentration, and may indicate the percentage of concentration risk as of the balance sheet date. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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13. RELATED PARTY TRANSACTIONS
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Dec. 31, 2011
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Sep. 30, 2011
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| Related Party Transactions Disclosure [Text Block] |
9.
Related Party Transactions
On
December 29, 2011 the Company entered into an Assignment
Agreement (“Assignment”) with Syzygy whereupon
the Company acquired all technology and intellectual
property covered by the License and Royalty Agreement
(“License”) dated September 27, 2010 previously
executed by the parties. The Assignment terminated the License
and all future royalty obligations. Pending patent
applications comprising part of the intellectual property
were assigned
to the Company. Syzygy is owned by the Company’s two
executive officers who are both also significant
stockholders. Elwood G. Norris,
CEO and President, owns 65% and James A. Barnes, Chief
Financial Officer, Treasurer and Secretary, owns 35%
of Syzygy and serves as managing member.
In
consideration for the Assignment the Company issued
1,500,000 shares of common stock to
Syzygy (valued at $975,000) and agreed to pay $250,000 by
June 30, 2012. The Company valued the technology in
accordance with Financial Accounting Standards Board
(“FASB”) Accounting Standards Codification
(“ASC”) 350-30-30, Intangible -
Goodwill and Other - General Intangibles Other than
Goodwill - Initial Measurement, and ASC 805-50-30,
Business
Combinations – Related Issues – Initial
Measurement, which require that intangible assets
acquired through a transaction that is not a business
combination shall be measured based on the cash
consideration paid plus either the fair value of the
non-cash consideration given or the fair value of the
assets acquired, whichever is more clearly evident. As the
Company has only recently begun selling products based on
the acquired technology and intellectual property,
management determined that the fair value of the common
stock issued was more clearly evident, and accordingly,
recorded the acquired intangible assets at the aggregate
amount of $1,225,000. The Company incurred $3,194 of
royalties for the three months
ended December 31, 2011 prior to termination of the License
and owed Syzygy an aggregate of $7,028 in royalties
included in accounts payable.
On
December 29, 2011 the Company appointed Kenneth F.
Potashner as a director and engaged him as a consultant and
advisor. He has agreed in principle to become the
Company’s full-time Executive Chairman at a future
date to be agreed between Mr. Potashner and the
Company’s Board of Directors but expected to be
before March 15, 2012. The consultancy, unless amended or
extended, will terminate on the earlier of March 15, 2012
or his formal appointment as Executive Chairman. Mr.
Potashner was granted a stock option, pursuant to the 2012
Plan, to purchase 2,050,000 shares of the Company’s
common stock with an exercise price of $0.65 per share. The
option has a five-year term with 10% of the options vesting
on the grant date, and the balance becoming exercisable
quarterly commencing March 31, 2012 over eight quarters.
Other than the grant of stock options Mr. Potashner will
not receive any cash remuneration for his consulting and
advisory services. Mr. Potashner was also granted an
additional five-year option on 50,000 shares of common
stock with an exercise price of $0.65 per share vesting
quarterly commencing December 31, 2011 for his role as a
director of the Company.
See
Notes 4, 5 and 7 for additional related party transactions
and information.
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13.
RELATED PARTY TRANSACTIONS
The
financial statements have been prepared on a stand-alone
basis and results through September 27, 2010 were derived
from the consolidated financial statements and accounting
records of LRAD Corporation.
Allocation
of Expenses
For
the period ended September 30, 2010, the Company’s
operations were fully integrated with LRAD Corporation,
including, but not limited to, general corporate expenses
related to finance, legal, information technology, human
resources, employee benefits and incentives. These expenses
were allocated to the Company on the basis of direct usage
when identifiable, with the remainder allocated on the basis
of revenue or other measure. During the fiscal years ended
September 30, 2010, the Company was allocated $215,667 of
general corporate expenses incurred by LRAD Corporation
included within selling, general and administrative expenses
in the statements of operations. During the fiscal year ended
September 30, 2010, the Company was allocated $62,798 of
research and development expenses incurred by LRAD
Corporation included within research and development expenses
in the statements of operations. During the fiscal years
ended September 30, 2010, the Company was allocated $56,462
of manufacturing overhead expenses for warehousing, materials
management and production management, included within cost of
sales. Operating expenses for the year ended September 30,
2011, reflect the costs associated with being an independent
publicly traded company.
Other
Related Party Transactions
See Notes 2, 5,
6, 7, 9 and 11 for additional related party transactions and
information.
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- Definition
The entire disclosure for related party transactions, including the nature of the relationship(s), a description of the transactions, the amount of the transactions, the effects of any change in the method of establishing the terms of the transaction from the previous period, stated interest rate, expiration date, terms and manner of settlement per the agreement with the related party, and amounts due to or from related parties. If the entity and one or more other entities are under common ownership or management control and this control affects the operating results or financial position, disclosure includes the nature of the control relationship even if there are no transactions between the entities. Disclosure may also include the aggregate amount of current and deferred tax expense for each statement of earnings presented where the entity is a member of a group that files a consolidated tax return, the amount of any tax related balances due to or from affiliates as of the date of each statement of financial position presented, the principal provisions of the method by which the consolidated amount of current and deferred tax expense is allocated to the members of the group and the nature and effect of any changes in that method. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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