Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Feb. 27, 2015 | Jun. 30, 2014 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Amendment Flag | FALSE | ||
Document Period End Date | 31-Dec-14 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | HNSN | ||
Entity Registrant Name | HANSEN MEDICAL INC | ||
Entity Central Index Key | 1276591 | ||
Current Fiscal Year End Date | -19 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 133,107,916 | ||
Entity Public Float | $79,800,000 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets: | ||
Cash and cash equivalents | $24,528 | $27,995 |
Short-term investments | 1,973 | 1,945 |
Accounts receivable, net of allowance of $0 and $554 at December 31, 2014 and 2013 | 5,121 | 5,114 |
Inventories | 11,492 | 12,203 |
Prepaids and other current assets | 1,678 | 1,914 |
Total current assets | 44,792 | 49,171 |
Property and equipment, net | 2,328 | 3,641 |
Restricted cash | 5,376 | 5,394 |
Other assets | 1,179 | 2,953 |
Total assets | 53,675 | 61,159 |
Current liabilities: | ||
Accounts payable | 2,534 | 3,337 |
Accrued liabilities | 4,942 | 3,934 |
Current portion of deferred revenue | 3,422 | 2,912 |
Total current liabilities | 10,898 | 10,183 |
Deferred rent, net of current portion | 366 | 310 |
Deferred revenue, net of current portion | 105 | 203 |
Long-term debt, net of current portion | 34,385 | 33,358 |
Other long-term liabilities | 152 | 229 |
Total liabilities | 45,906 | 44,283 |
Commitments and contingencies (Note 7) | ||
Stockholders' equity: | ||
Preferred stock, par value $0.0001: Authorized: 10,000 shares Issued and outstanding: none | ||
Common stock, par value $0.0001: Authorized: 200,000 shares Issued and outstanding: 133,262 and 99,014 at December 31, 2014 and 2013 | 13 | 10 |
Additional paid-in capital | 414,361 | 369,170 |
Accumulated other comprehensive income | 305 | 360 |
Accumulated deficit | -406,910 | -352,664 |
Total stockholders' equity | 7,769 | 16,876 |
Total liabilities and stockholders' equity | $53,675 | $61,159 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, except Per Share data, unless otherwise specified | ||
Accounts receivable, allowance | $0 | $554 |
Preferred stock, par value | $0.00 | $0.00 |
Preferred stock, shares authorized | 10,000 | 10,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 200,000 | 200,000 |
Common stock, shares issued | 133,262 | 99,014 |
Common stock, shares outstanding | 133,262 | 99,014 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Revenues: | |||
Product | $13,812 | $11,790 | $12,303 |
Service | 5,683 | 5,192 | 5,333 |
Total revenues | 19,495 | 16,982 | 17,636 |
Cost of revenues: | |||
Product | 13,123 | 11,150 | 11,990 |
Service | 3,368 | 2,331 | 2,036 |
Total cost of revenues | 16,491 | 13,481 | 14,026 |
Gross profit | 3,004 | 3,501 | 3,610 |
Operating expenses: | |||
Research and development | 18,034 | 16,139 | 16,126 |
Selling, general and administrative | 31,254 | 31,765 | 25,987 |
Loss on settlement of litigation (Note 9) | 4,500 | ||
Total operating expenses | 49,288 | 52,404 | 42,113 |
Gain on licensing of intellectual property (Note 5) | 20,000 | ||
Loss from operations | -46,284 | -48,903 | -18,503 |
Interest income | 23 | 25 | 78 |
Loss on extinguishment of debt | -1,935 | ||
Interest expense | -4,789 | -3,952 | -3,511 |
Warrant exchange (Note 9) | -2,914 | ||
Other expense, net | -254 | -842 | -95 |
Loss before income taxes | -54,218 | -55,607 | -22,031 |
Income tax expense | -28 | -115 | -114 |
Net loss | ($54,246) | ($55,722) | ($22,145) |
Basic and diluted net loss per share | ($0.46) | ($0.70) | ($0.35) |
Shares used to compute basic and diluted net loss per share | 117,233 | 79,052 | 62,472 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Loss (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Net loss | ($54,246) | ($55,722) | ($22,145) |
Other comprehensive income (loss), net: | |||
Change in unrealized gains and losses on investments | 19 | 276 | -716 |
Amounts reclassified to other income (expense) | 627 | ||
Foreign currency translation adjustment | -74 | 35 | 19 |
Change in other comprehensive income (loss) | -55 | 938 | -697 |
Comprehensive loss | ($54,301) | ($54,784) | ($22,842) |
Consolidated_Statements_of_Sto
Consolidated Statements of Stockholders' Equity (USD $) | Total | Private Placemen | Common Stock | Common Stock | Additional Paid- In Capital | Additional Paid- In Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit |
In Thousands, except Share data | Private Placemen | Private Placemen | ||||||
Beginning Balances at Dec. 31, 2011 | $33,481 | $6 | $308,153 | $119 | ($274,797) | |||
Beginning Balances (in shares) at Dec. 31, 2011 | 59,981,000 | |||||||
Issuance of common stock under equity incentive plan (in shares) | 1,449,000 | |||||||
Issuance of common stock under equity incentive plan | 548 | 548 | ||||||
Withholding taxes paid on vested restricted stock units | -14 | -14 | ||||||
Issuance of common stock under employee stock purchase plan (in shares) | 357,000 | |||||||
Issuance of common stock under employee stock purchase plan | 684 | 684 | ||||||
Non-employee stock-based compensation | 9 | 9 | ||||||
Issuance of common stock and warrants pursuant to private placement (in shares) | 5,291,000 | |||||||
Issuance of common stock and warrants pursuant to private placement | 10,000 | 1 | 9,999 | |||||
Employee share-based compensation expense | 2,873 | 2,873 | ||||||
Net loss | -22,145 | -22,145 | ||||||
Change in unrealized loss on investments | -716 | -716 | ||||||
Translation adjustment | 19 | 19 | ||||||
Ending Balances at Dec. 31, 2012 | 24,739 | 7 | 322,252 | -578 | -296,942 | |||
Ending Balances (in shares) at Dec. 31, 2012 | 67,078,000 | |||||||
Issuance of common stock under equity incentive plan (in shares) | 788,000 | |||||||
Issuance of common stock under equity incentive plan | 114 | 114 | ||||||
Withholding taxes paid on vested restricted stock units | -18 | -18 | ||||||
Issuance of common stock under employee stock purchase plan (in shares) | 394,000 | |||||||
Issuance of common stock under employee stock purchase plan | 560 | 560 | ||||||
Issuance of common stock and warrants pursuant to private placement (in shares) | 28,455,000 | |||||||
Issuance of common stock and warrants pursuant to private placement | 37,126 | 3 | 37,123 | |||||
Issuance of common shares in connection with the litigation settlement, shares | 2,299,000 | |||||||
Issuance of common shares in connection with the litigation settlement | 4,250 | 4,250 | ||||||
Employee share-based compensation expense | 4,889 | 4,889 | ||||||
Net loss | -55,722 | -55,722 | ||||||
Change in unrealized loss on investments | 276 | 276 | ||||||
Amounts reclassified to other income (expense) | 627 | 627 | ||||||
Translation adjustment | 35 | 35 | ||||||
Ending Balances at Dec. 31, 2013 | 16,876 | 10 | 369,170 | 360 | -352,664 | |||
Ending Balances (in shares) at Dec. 31, 2013 | 99,014,000 | |||||||
Issuance of common stock under equity incentive plan (in shares) | 1,239,000 | 1,871,000 | ||||||
Issuance of common stock under equity incentive plan | 2,586 | 2,586 | ||||||
Withholding taxes paid on vested restricted stock units | -620 | -620 | ||||||
Issuance of common stock under employee stock purchase plan (in shares) | 553,000 | |||||||
Issuance of common stock under employee stock purchase plan | 519 | 519 | ||||||
Issuance of common stock upon exercise of Series A warrants | 14,000 | 1 | 13,999 | |||||
Issuance of common stock upon exercise of Series A warrants, shares | 11,382,000 | |||||||
Issuance of common stock upon Series B/C warrant exchange | 25,877 | 2 | 25,875 | |||||
Issuance of common stock upon Series B/C warrant exchange, shares | 20,442,000 | |||||||
Employee share-based compensation expense | 2,832 | 2,832 | ||||||
Net loss | -54,246 | -54,246 | ||||||
Change in unrealized loss on investments | 19 | 19 | ||||||
Translation adjustment | -74 | -74 | ||||||
Ending Balances at Dec. 31, 2014 | $7,769 | $13 | $414,361 | $305 | ($406,910) | |||
Ending Balances (in shares) at Dec. 31, 2014 | 133,262,000 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Cash flows from operating activities | |||
Net loss | ($54,246) | ($55,722) | ($22,145) |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Depreciation | 2,555 | 2,949 | 3,265 |
Stock-based compensation | 2,832 | 4,889 | 2,882 |
Warrant exchange | 2,914 | ||
Payment-in-kind interest on loan | 1,026 | 597 | 406 |
Write-off of discontinued product line inventory | 706 | ||
Loss on settlement of litigation | 4,500 | ||
Gain on licensing of intellectual property | -20,000 | ||
Amortization of deferred financing costs on debt | 387 | 184 | 76 |
Amortization of common stock warrants | 195 | 270 | |
(Gain) loss on disposal of fixed assets | -15 | ||
Net realized gains and losses on investments | 677 | 40 | |
Loss on extinguishment of debt | 1,935 | ||
Provision (recovery) of doubtful accounts | -100 | 554 | |
Changes in operating assets and liabilities: | |||
Accounts receivable | 93 | 120 | -296 |
Inventories | -775 | -3,069 | -2,735 |
Prepaids and other current assets | 227 | 315 | 1,522 |
Other assets | 1,387 | -1,464 | -8 |
Accounts payable | -803 | 226 | 112 |
Accrued liabilities | 1,034 | 568 | -886 |
Deferred revenue | 412 | 345 | -3,668 |
Other liabilities | -47 | -159 | |
Net cash used in operating activities | -42,398 | -42,755 | -40,785 |
Cash flows from investing activities | |||
Purchase of property and equipment | -462 | -550 | -772 |
Proceeds from sales and maturities of short-term investments | 6,704 | 17,363 | |
Purchase of investments | -10,860 | ||
Proceeds from licensing of intellectual property | 20,000 | ||
Changes in restricted cash | 19 | -5,394 | 65 |
Net cash (used) provided by investing activities | -443 | 760 | 25,796 |
Cash flows from financing activities | |||
Proceeds from issuance of common stock and warrants | 39,268 | 10,000 | |
Costs related to issuance of common stock and warrants | -137 | -2,087 | |
Proceeds from loans | 33,000 | ||
Costs related to issuance of loans | -1,538 | ||
Repayments of loan principal | -30,000 | ||
Final loan repayment fees | -2,058 | ||
Proceeds from exercise of common stock options | 2,586 | 114 | 548 |
Proceeds from employee stock purchase plan | 519 | 560 | 684 |
Withholding taxes paid on vested restricted stock units | -620 | -18 | -14 |
Net cash provided by financing activities | 39,448 | 37,241 | 11,218 |
Effect of exchange rate changes on cash and cash equivalents | -74 | ||
Net (decrease) in cash and cash equivalents | -3,467 | -4,754 | -3,771 |
Cash and cash equivalents at beginning of year | 27,995 | 32,749 | 36,520 |
Cash and cash equivalents at end of year | 24,528 | 27,995 | 32,749 |
Supplemental disclosures of cash flow information | |||
Cash paid during the period for interest | 3,763 | 5,207 | 2,599 |
Supplemental schedule of non-cash investing and financing activities | |||
Equity issuance costs not yet paid | 55 | ||
Equipment transfers from inventories to property and equipment | 779 | ||
Series A B And C Warrant | |||
Cash flows from financing activities | |||
Proceeds from exercise of Series A, B and C warrants | $37,100 |
The_Company
The Company | 12 Months Ended | |
Dec. 31, 2014 | ||
The Company | 1 | The Company |
Nature of Operations | ||
Hansen Medical, Inc. (the “Company”) develops, manufactures and markets a new generation of medical robotics designed for accurate positioning, manipulation and stable control of catheters and catheter-based technologies. The Company was incorporated in the state of Delaware in September 2002 and is headquartered in Mountain View, California. The Company has wholly-owned subsidiaries located in the United Kingdom and Germany. Both subsidiaries are engaged in marketing the Company’s products in the Europe, Middle East and Africa (“EMEA”) region. | ||
Need to Raise Additional Capital | ||
These consolidated financial statements are prepared on a going concern basis that contemplates the realization of assets and discharge of liabilities in the normal course of business. Since inception, the Company has incurred cumulative net losses of approximately $406.9 million. The Company expects such losses to continue through at least the year ending December 31, 2015 as it continues to commercialize its technologies and develop new applications and products. | ||
The Company continues to face significant uncertainties and challenges. The Company faces uncertainty related to the commercialization of its Magellan™ Robotic System and its projected revenue is heavily dependent on a successful commercialization of this system and the Sensei system. In addition, the Company is also subject to minimum liquidity requirements under its existing borrowing arrangements with White Oak Global Advisors, LLC which require the Company to maintain $15.0 million in liquidity at all times, consisting of at least $13.0 million in cash, cash equivalents and investments and the remaining $2.0 million in accounts receivable. In addition, $5.0 million investment in Certificate of Deposit along with investments in Luna Innovations, Inc., is required to be restricted subject to lenders’ control. As of December 31, 2014, the Company’s cash, cash equivalents, short-term investments and restricted cash balances were $31.9 million. On March 11, 2015, the Company raised $35 million in gross proceeds from the sale of convertible preferred stock (see Note 15). The Company anticipates that its existing available capital resources as of December 31, 2014, proceeds from funding received in March 2015 and the estimated amounts received through the sale of its products and services will be sufficient to meet its anticipated cash requirements for the next twelve months. This assumes that the company will continue to at least maintain a level of consistent sales and adhere to cost control efforts implemented near the end of 2014. The Company will need to obtain sufficient additional funding to satisfy its longer term liquidity requirements and may attempt to do so at any time by selling equity or debt securities, licensing core or non-core intellectual property assets, entering into future research and development funding arrangements, refinancing or restructuring existing debt arrangements or entering into a credit facility in order to meet its continuing cash needs. The Company cannot guarantee that future equity or debt financing or credit facilities will be available in amounts or on terms acceptable to it, if at all, nor can the Company guarantee that it will be able to license core or non-core intellectual property assets or enter into future research and development funding arrangements. If such financing, licensing, funding or credit arrangements do not meet the Company’s current longer term needs or if future sales do not meet the Company’s current forecast, the Company may be required to extend its existing cash and liquidity by adopting additional cost-cutting measures, including reductions in its work force, reducing the scope of, delaying or eliminating some or all of its planned research, development and commercialization activities and/or reducing marketing, customer support or other resources devoted to the Company’s products. Any of these factors could harm the Company’s financial condition. Failure to meet projected revenue levels, raise additional funding or manage spending may adversely impact the Company’s ability to achieve its long term intended business objectives. The Company will continue to evaluate its financial condition based upon changing future economic conditions and the achievement of estimated revenue, and will consider the implementation of cost reductions if and as circumstances warrant. | ||
Reclassification of Prior Period Balances | ||
Certain reclassifications have been made to prior period amounts to conform to the current-year presentation. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended | |||
Dec. 31, 2014 | ||||
Summary of Significant Accounting Policies | 2 | Summary of Significant Accounting Policies | ||
Basis of Presentation | ||||
The Company has prepared the accompanying consolidated financial statements in accordance with generally accepted accounting principles in the United States of America (“GAAP”). The Company’s fiscal year ends on December 31. The consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany accounts and transactions have been eliminated. | ||||
Use of Estimates | ||||
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Significant estimates relate to the recognition of revenue, the evaluation of customer credit risk, the valuation of investments, inventory valuations, warrant valuations, the determination of impairment of assets, stock-based compensation, loss contingencies and the valuation of our deferred tax assets, among others. Actual results could differ from those estimates. | ||||
Revenue Recognition | ||||
The Company’s revenues are primarily derived from the sale of the Sensei system and the Magellan Robotic System and the associated catheters as well as the sale of customer service contracts, which includes post-contract customer support (“PCS”). The Company sells its products directly to customers as well as through distributors. Under the Company’s revenue recognition policy, revenues are recognized when persuasive evidence of an arrangement exists, title and risk of loss has passed, delivery to the customer has occurred or the services have been fully rendered, the sales price is fixed or determinable and collectability is reasonably assured. | ||||
• | Persuasive Evidence of an Arrangement. Persuasive evidence of an arrangement for sales of systems is generally determined by a sales contract signed and dated by both the customer and the Company, including approved terms and conditions or the receipt of an approved purchase order. Evidence of an arrangement for the sale of disposable products is determined through an approved purchase order from the customer. Evidence of an arrangement for the sale of customer service is determined through either a signed sales contract or an approved purchase order from the customer. Sales to customers are generally not subject to any performance, cancellation, termination or return rights. | |||
• | Delivery. | |||
• | Systems and Disposable Products. Typically, ownership of systems, catheters and other disposable products passes to customers upon shipment, at which time delivery is deemed to be complete. | |||
• | Customer Service Revenue. The Company recognizes customer service revenue from the sale of its PCS contracts which includes planned and corrective maintenance services, software updates, bug fixes, and warranty. Revenue from customer services, whether sold individually or as a separate unit of accounting in a multi-element arrangement, is deferred and amortized over the service period, which is typically one year. | |||
• | Multiple-element Arrangements. It is common for the sale of Sensei and Magellan systems to include multiple elements which have standalone value and qualify as separate units of accounting. These elements commonly include the sale of the system and a product maintenance plan, in addition to installation of the system and initial training. Less commonly, these elements may include the sale of certain disposable products or other elements. For multiple-element arrangements revenue is allocated to each element based on their relative selling prices. Relative selling prices are based first on vendor specified objective evidence (“VSOE”), then on third-party evidence of selling price (“TPE”) when VSOE does not exist, and then on management’s best estimate of the selling price (“ESP”) when VSOE and TPE do not exist. Because the Company has neither VSOE nor TPE for its system, the allocation of revenue is based on ESP for the systems sold. The objective of ESP is to determine the price at which the Company would transact a sale, had the product been sold on a stand-alone basis. The Company determines ESP for its systems by considering multiple factors, including, but not limited to, features and functionality of the system, geographies, type of customer, and market conditions. The Company regularly reviews ESP and maintains internal controls over the establishment and updates of these estimates. | |||
• | Sales Price Fixed or Determinable. The Company assesses whether the sales price is fixed or determinable at the time of the transaction. Sales prices are documented in the executed sales contract or purchase order received prior to shipment The Company’s standard terms do not allow for contingencies, such as trial or evaluation periods, refundable orders, or extended payment terms payments contingent upon the customer obtaining financing or other contingencies which would impact the customer’s obligation. In situations where these or other contingencies are included, all related revenue is deferred until the contingency is resolved. In the third quarter of 2012, the Company began shipping systems under a limited commercial evaluation program to allow certain strategic accounts to install and utilize systems for a limited trial period of three to six months while the purchase opportunity is being evaluated by the hospital. Systems under this program remain the property of the Company and are recorded in inventory and a sale only occurs upon the issuance of a purchase order from the customer. | |||
• | Collectability. The Company assesses whether collection is probable based on a number of factors, including the customer’s past transaction history and credit worthiness. If collection of the sales price is not deemed probable, the revenue is deferred and recognized at the time collection becomes probable, which is usually upon receipt of cash. The Company’s sales contracts generally do not allow the customer the right of cancellation, refund or return, except as provided under the Company’s standard warranty. If such rights were allowed, all related revenues would be deferred until such rights expired. | |||
Significant management judgments and estimates are made in connection with the determination of revenue to be recognized and the period in which it is recognized. If different judgments and estimates were utilized, the amount of revenue to be recognized and the period in which it is recognized could differ materially from the amounts reported. | ||||
Concentration of Credit Risk and Other Risks and Uncertainties | ||||
Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents, short-term investments and accounts receivable. Cash and cash equivalents are deposited in demand and money market accounts at two financial institutions. At times, such deposits may be in excess of insured limits. The Company has not experienced any losses on its deposits of cash and cash equivalents. | ||||
The Company had four customers who constituted 26%, 14%, 12%, and 12%, respectively of the Company’s net accounts receivable at December 31, 2014. The Company had three customers who constituted 26%, 22%, and 10%, respectively of the Company’s net accounts receivable at December 31, 2013. The Company carefully monitors the creditworthiness of potential customers. As of December 31, 2014, the Company has not experienced any significant losses on its accounts receivable. | ||||
Two customers accounted for 13% and 10%, respectively of total revenues for fiscal year 2014. One customer accounted for 10% of total revenues for fiscal year 2013. One single customer represented 10% and 14% of the total revenue for the years ended December 31, 2014 and 2012, respectively. | ||||
Most of the products developed by the Company require clearance from the FDA or corresponding foreign regulatory agencies prior to commercial sales. The Company received CE Mark approval to market its Sensei system in Europe in the fourth quarter of 2006 and received CE Mark approval to market its Artisan Control Catheter in Europe in May 2007. The Company received FDA clearance for the marketing of its Sensei system and Artisan catheters for manipulation, positioning and control of certain mapping catheters during electrophysiology procedures in the United States in May 2007. The Company received CE Mark approval to market its Lynx catheter in Europe in July 2010. The Company received CE Mark approval for its Magellan Robotic System in July 2011 and received CE Mark approval for the Magellan Robotic Catheter and related accessories designed for use with the Magellan Robotic System in October 2011. The Company received FDA clearance for marketing its Magellan Robotic System, including the catheter and accessories in June 2012 and Magellan 6Fr Robotic Catheter in February 2014. However, there can be no assurance that current products or any new products the Company develops in the future will receive the clearances necessary to allow the Company to market those products in certain desirable markets. If the Company is denied clearance or clearance is delayed, it could have a material adverse impact on the Company. | ||||
The medical device industry is characterized by frequent and extensive litigation and administrative proceedings over patent and other intellectual property rights. Whether a product infringes a patent involves complex legal and factual issues, the determination of which is often difficult to predict, and the outcome may be uncertain until the court has entered final judgment and all appeals are exhausted. The Company’s competitors may assert, and have asserted in the past, that its products or the use of the Company’s products are covered by United States or foreign patents held by them. This risk is heightened due to the numerous issued and pending patents relating to the use of catheter-based procedures in the medical technology field. | ||||
Loss Contingencies | ||||
The Company evaluates potential loss contingencies as circumstances dictate. Should a specific loss contingency meet the definition of a liability under authoritative accounting guidance, the Company would record a loss and a liability. As of December 31, 2014, the Company had not recorded any loss contingencies as liabilities. However, if estimates and assumptions change in the future, the Company may record charges to its financial statements. This could materially impact its operating results and financial position. | ||||
Foreign Currency | ||||
Assets and liabilities of non-U.S. subsidiaries that operate in a local currency environment, where that local currency is the functional currency, are translated at current exchange rates as of the end of the accounting period. The related revenues and expenses are translated at average exchange rates in effect during the period. Net exchange gains and losses resulting from translation are excluded from income and are recorded as part of accumulated other comprehensive income. Transactions denominated in a foreign currency are revalued at the current exchange rate at the transaction date and any related gains and losses are reflected in investment and other income, net in the consolidated statements of income. | ||||
Fair Value Measurements | ||||
GAAP defines fair value as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, authoritative guidance establishes a three-tier value hierarchy, which prioritizes the inputs used in measuring fair value as follows: | ||||
• Level 1 Inputs | Quoted prices (unadjusted) in active markets for identical assets or liabilities. | |||
• Level 2 Inputs | Inputs other than quoted prices in active markets that are observable either directly or indirectly. | |||
• Level 3 Inputs | Unobservable inputs in which there is little or no market data, which require the Company to develop its own assumptions. | |||
This hierarchy requires the use of observable market data when available and to minimize the use of unobservable inputs when determining fair value. | ||||
Fair Value of Financial Instruments | ||||
Carrying amounts of certain of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, and accounts payable approximate fair value due to their short maturities. | ||||
Cash and Cash Equivalents, and Restricted Cash | ||||
The Company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents. Cash and cash equivalents, and restricted cash include money market funds and various deposit accounts, which are readily convertible to cash and are stated at cost, which approximates market. Pursuant to the Company’s secured term loan agreement executed in 2013, the Company is obligated to maintain $5.0 million of restricted cash subject to lenders’ control. | ||||
Short-Term Investments | ||||
Available-for-sale investments. The Company determines the appropriate classification of investments at the time of purchase and evaluates such classification as of each balance sheet date. The Company classifies all investments with maturities greater than three months at the time of purchase as short-term investments as they are subject to use within one year in current operations. The Company makes investments based upon specific guidelines approved by its board of directors with a view to liquidity and capital preservation and regularly reviews its investments for performance. As of December 31, 2014, all of the Company’s investments have been classified as available-for-sale and are carried on the balance sheet at fair value with the unrealized gains and losses, if any, included in other comprehensive income within stockholders’ equity. Any unrealized losses which are determined to be other than temporary are included in earnings. | ||||
Other-than-temporary impairment. The Company periodically evaluates its investments for impairment. In the event that the carrying value of an investment exceeds its fair value and the decline in fair value is determined to be other than temporary, an impairment charge is recorded and a new cost basis for the investment is established. The primarily differentiating factors the Company considered to determine whether a decline in value is other than temporary are our intent and ability to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in market value, the length of the time and the extent to which the market value of the investment has been less than cost, the financial condition and near-term prospects of the issuer. Given the current market conditions, these judgments could prove to be wrong, and companies with relatively high credit ratings and solid financial conditions may not be able to fulfill their obligations. | ||||
During the year ended December 31, 2013, the Company recorded pre-tax losses of $0.6 million related to a decline in the value of our investment in Luna Innovations Incorporated common stock that the Company concluded were other-than-temporary. No impairment loss were recorded during the years ended December 31, 2014, and 2012. As of December 31, 2014, and 2013, net unrealized gains on investments of $0.02 million and $0.3 million, net of tax, respectively, were included in accumulated other comprehensive income (loss). Significant management judgment is required in determining whether an other-than-temporary decline in the fair value of an investment exists. Changes in the Company’s assessment of the valuation of investments could materially impact future operating results and financial position. | ||||
Accounts Receivable and Allowance for Doubtful Accounts | ||||
Accounts receivables primarily include amount due from hospitals and distributors. The Company establishes allowances for doubtful accounts based on a review of the credit profiles of customers, contractual terms and conditions, current economic trends and historical collection experience. The allowance for doubtful accounts is reassessed each period based on management’s assessment of historical expected net collections and other collection indicators. | ||||
Inventories | ||||
Inventory, which includes material, labor and overhead costs, is stated at standard cost, which approximates actual cost, determined on a first-in, first-out basis, not in excess of market value. The cost basis of the Company’s inventory is reduced for any products that are considered excessive or obsolete based upon assumptions about future demand and market conditions. In the event actual demand for our inventory differs from our best estimates or we fail to receive necessary regulatory approvals, further reduction in our basis of inventory may become necessary. | ||||
Property and Equipment, Net | ||||
Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation of property and equipment is computed using the straight-line method over their estimated useful lives of two to five years. Leasehold improvements are amortized on a straight-line basis over the lesser of their useful life or the term of the lease. Depreciation expense was $2.6 million, $2.9 million and $3.3 million for the years ended December 31, 2014, 2013 and 2012, respectively. | ||||
Impairment of Long-Lived Assets | ||||
The Company evaluates the recoverability of its long-lived assets in accordance with authoritative accounting guidance. When events or changes in circumstances indicate that the carrying value of long-lived assets may not be recoverable, the Company recognizes such impairment if the net book value of such assets exceeds the future undiscounted cash flows attributable to such assets. Should an impairment exist, the impairment loss would be measured based on the excess carrying value of the asset over the asset’s fair value or discounted estimates of future cash flows attributable to the assets. As of December 31, 2014, the Company had $2.3 million of property and equipment, net. If estimates or the related assumptions change in the future, the Company may record impairment charges to reduce the carrying value of certain groups of these assets. Changes in the valuation of long-lived assets could materially impact the Company’s operating results and financial position. | ||||
Advertising Expense | ||||
The Company expenses advertising costs as incurred. Advertising costs are recorded in general, sales and marketing expenses within the accompanying consolidated statements of operations was $0.7 million for fiscal year 2014 and were immaterial for fiscal years 2013 and 2012. | ||||
Stock-Based Compensation | ||||
The Company accounts for share-based compensation plan using the fair value recognition and measurement provisions under U.S. GAAP. The Company’s share-based compensation cost is measured at the grant date, based on the fair value of the award, and is recognized as expense over the requisite service period. | ||||
The Black-Scholes option valuation model is used to determine the fair value of stock-based awards with the following assumptions | ||||
• | Expected Volatility. The Company’s estimate of volatility is based on the historical volatilities of its stock price. | |||
• | Expected Term. The Company estimates the expected term based on its historical settlement experience related to vesting and contractual terms while giving consideration to awards that have life cycles less than the contractual terms and vesting schedules in accordance with authoritative guidance. | |||
• | Risk-Free Interest Rate. The risk-free interest rate that the Company uses in the Black-Scholes option valuation model is the implied yield in effect at the time of option grant based on U.S. Treasury zero-coupon issues with a remaining term equivalent to the expected term of its option grants. For ESPP grants, the Company uses the 6-month Constant Maturity Treasury (“CMT”) rate. | |||
• | Dividend Yield. The Company has never paid any cash dividends on its common stock and it does not anticipate paying any cash dividends in the foreseeable future. Consequently, the Company uses a dividend yield of zero in the Black-Scholes option valuation model. | |||
In addition to the Black-Scholes assumptions noted above, the Company also estimates a forfeiture rate for its stock-based awards. The Company estimates its forfeiture rate based on an analysis of its actual forfeitures based on actual forfeiture experience, analysis of employee turnover behavior and other factors. The impact from any forfeiture rate adjustment would be recognized in full in the period of adjustment and if the actual number of future forfeitures differs from its estimates, the Company might be required to record adjustments to its stock-based compensation in future periods. | ||||
To the extent that future evidence regarding these variables is available and provides estimates that the Company determines are more indicative of actual trends, the Company may refine or change its approach to deriving these input estimates. These changes could significantly impact the stock-based compensation expense recorded in the future. | ||||
Research and Development | ||||
Research and development costs are charged to expense as incurred. Research and development costs include, but are not limited to, payroll and other personnel expenses, prototype materials, laboratory supplies, and consulting costs. | ||||
Income Taxes | ||||
The Company accounts for income taxes using the liability method whereby deferred tax asset and liability account balances are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Valuation allowances are established to reduce deferred tax assets when management estimates, based on available objective evidence, that it is more likely than not that the benefit will not be realized for the deferred tax assets. The Company accounts for uncertainty in income taxes using a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. The Company recognizes interest and penalties related to unrecognized tax benefits as a component of income tax expense. As of December 31, 2014, the Company has no accrued interest or penalties related to uncertain tax positions. The Company does not anticipate that total unrecognized tax benefits will significantly change due to the settlement of audits and the expiration of statute of limitations periods in 2015. | ||||
Comprehensive Loss | ||||
The Company follows the accounting standards for the reporting and presentation of comprehensive income (loss) and its components. In June 2011, the Financial Accounting Standards Board (“FASB”) issued new accounting guidance that revised the manner in which entities present comprehensive income in their financial statements. The new guidance requires entities to present comprehensive income either in a continuous statement of comprehensive income, which replaces the statement of operations, or in two separate, consecutive statements. The new guidance does not change the items that must be reported in other comprehensive income, nor does it require new disclosures. On January 1, 2012 The Company adopted new accounting guidance and presents comprehensive income (loss) in a separate statement. Comprehensive loss includes all changes in stockholders’ equity during a period from non-owner sources. Comprehensive loss for each of the years ended December 31, 2014, 2013, and 2012 was equal to net loss adjusted for unrealized gains and losses on investments, reclassifications of realized gains and losses on investments to other income (expense) and foreign currency translation adjustments. | ||||
Computation of Net Loss Per Share | ||||
Basic net loss per share is computed by dividing net loss by the weighted-average number of common shares outstanding during the period. Diluted net loss per share is computed using the weighted-average number of shares and diluted potential shares outstanding during the period. Dilutive potential shares are excluded when the effect would be to reduce a net loss per share. The Company’s dilutive potential shares primarily consists of outstanding common stock options, warrants, estimated shares to be issued under the Company’s employee stock purchase plan and unvested restricted stock, which have not been included in the computation of diluted net loss per share for all yearly periods as the result would be anti-dilutive. | ||||
Recent Accounting Pronouncements | ||||
In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes the revenue recognition requirements in ASC 605, Revenue Recognition. ASU 2014-09 is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. This new guidance is effective for annual reporting periods beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption is not permitted. The Company is currently assessing the impact of the adoption of ASU 2014-09 on its consolidated financial statements. | ||||
In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. The ASU provides guidance on determining when and how to disclose going-concern uncertainties in the financial statements. The new standard requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern within one year of the date the financial statements are issued. An entity must provide certain disclosures if “conditions or events raise substantial doubt about the entity’s ability to continue as a going concern.” The ASU applies to all entities and is effective for annual periods ending after December 15, 2016, and interim periods thereafter, with early adoption permitted. The Company has been assessing the going concern issue since 2010 on an interim and annual basis and will continue to assess whether the financial conditions based on this new guidance have an impact on the Company’s consolidated financial statements or footnotes. | ||||
In November 2014, the FASB issued ASU No. 2014-16, Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity (a consensus of the FASB Emerging Issues Task Force), which requires an entity to determine the nature of the host contract by considering the economic characteristics and risks of the entire hybrid financial instrument, including the embedded derivative feature that is being evaluated for separate accounting from the host contract, when evaluating whether the host contract is more akin to debt or equity. ASU 2014-16 is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. The effects of initially adopting the ASU is required to be applied on a modified retrospective basis to existing hybrid financial instruments issued in the form of a share as of the beginning of the fiscal year for which the amendments are effective. Retrospective application to all relevant prior periods is permitted. Early adoption, including adoption in an interim period, is permitted. The Company is currently assessing the impact of the adoption of ASU 2014-16 on its consolidated financial statements. |
Fair_Value_of_Assets_and_Liabi
Fair Value of Assets and Liabilities | 12 Months Ended | ||||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||||
Fair Value of Assets and Liabilities | 3 | Fair Value of Assets and Liabilities | |||||||||||||||||||||||||||
The Company’s financial instruments consist principally of cash and cash equivalents, short-term investments, accounts receivable, accounts payable and short-term and long-term debt. Cash and cash equivalents, short-term investments and accounts receivable, net of allowance, are reported at their respective fair values on the Consolidated Balance Sheets. Short-term and long-term debt are reported at their amortized cost on our Consolidated Balance Sheets. The remaining financial instruments are reported on the Consolidated Balance Sheets at amounts that approximate current fair values. | |||||||||||||||||||||||||||||
The amortized cost and fair value of assets, along with gross unrealized gains and losses, were as follows (in thousands): | |||||||||||||||||||||||||||||
Cash, Cash Equivalents, Short-term Investments and Restricted Cash | |||||||||||||||||||||||||||||
Amortized | Gross | Gross | Fair | Balance Sheet Classification | |||||||||||||||||||||||||
Cost | Unrealized | Unrealized | Value | ||||||||||||||||||||||||||
Gains | Losses | Cash and | Short-term | Restricted | |||||||||||||||||||||||||
cash | Investments | Cash | |||||||||||||||||||||||||||
Equivalents | |||||||||||||||||||||||||||||
December 31, 2014: | |||||||||||||||||||||||||||||
Cash | $ | 3,586 | $ | — | $ | — | $ | 3,586 | $ | 3,586 | $ | — | $ | — | |||||||||||||||
Money market funds | 26,318 | — | — | 26,318 | 20,942 | — | 5,376 | ||||||||||||||||||||||
Corporate equity securities | 1,572 | 401 | — | 1,973 | — | 1,973 | — | ||||||||||||||||||||||
$ | 31,476 | $ | 401 | $ | — | $ | 31,877 | $ | 24,528 | $ | 1,973 | $ | 5,376 | ||||||||||||||||
December 31, 2013: | |||||||||||||||||||||||||||||
Cash | $ | 1,665 | $ | — | $ | — | $ | 1,665 | $ | 1,665 | $ | — | $ | — | |||||||||||||||
Money market funds | 31,724 | — | — | 31,724 | 26,330 | — | 5,394 | ||||||||||||||||||||||
Corporate equity securities | 1,572 | 373 | — | 1,945 | — | 1,945 | — | ||||||||||||||||||||||
$ | 34,961 | $ | 373 | $ | — | $ | 35,334 | $ | 27,995 | $ | 1,945 | $ | 5,394 | ||||||||||||||||
Fair Value Measurements | |||||||||||||||||||||||||||||
The fair value hierarchy of the Company’s assets and liabilities that are measured at fair value, by level, is as follows (in thousands): | |||||||||||||||||||||||||||||
Fair Value Measurements Using | |||||||||||||||||||||||||||||
Quoted Prices in | Significant other | Unobservable | Total | ||||||||||||||||||||||||||
Active Markets for | Observable | Inputs | |||||||||||||||||||||||||||
Identical Assets | Inputs | (Level 3 Inputs) | |||||||||||||||||||||||||||
(Level 1 Inputs) | (Level 2 Inputs) | ||||||||||||||||||||||||||||
December 31, 2014: | |||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||
Money market funds | $ | 26,318 | $ | — | $ | — | $ | 26,318 | |||||||||||||||||||||
Corporate equity securities | 1,973 | — | — | 1,973 | |||||||||||||||||||||||||
$ | 28,291 | $ | — | $ | — | $ | 28,291 | ||||||||||||||||||||||
December 31, 2013: | |||||||||||||||||||||||||||||
Money market funds | $ | 31,724 | $ | — | $ | — | $ | 31,724 | |||||||||||||||||||||
Corporate equity securities | 1,945 | — | — | 1,945 | |||||||||||||||||||||||||
$ | 33,669 | $ | — | $ | — | $ | 33,669 | ||||||||||||||||||||||
Investment instruments valued using Level 1 inputs include the Company’s money market securities and certain of the corporate equity securities which were obtained by the Company as part of the Luna litigation settlement for which there is now not a significant non-marketability issue. | |||||||||||||||||||||||||||||
The Company periodically assesses whether significant facts and circumstance have arisen to indicate that an impairment, which is other than temporary, of the fair value of any underlying investment has occurred. In 2013, the Company determined that there was an other than temporary impairment of its investment in Luna Innovations’, or Luna, which the Company received as part of a litigation settlement entered into in January 2010 and had recorded as an available for sale corporate equity security. As such, the Company wrote down the value of that investment and recorded a loss of $0.6 million in other expense in the consolidated statement of operations. No other investments have been in an unrealized loss position for longer than twelve months. | |||||||||||||||||||||||||||||
Long-term Debt | |||||||||||||||||||||||||||||
The fair value of the Company’s long-term debt was estimated to be $34.2 million as of December 31, 2014 based on an internal valuation model that utilized the then-current rates available to the Company for debt of a similar term and remaining maturity, which constitutes Level 2 inputs under the fair value hierarchy. Considerable judgment is required in interpreting market data to develop estimates of fair value. Accordingly, the fair value estimate presented herein is not necessarily indicative of the amount that the Company or holders of the instruments could realize in a current market exchange. The use of different assumptions and/or estimation methodologies may have a material effect on the estimated fair value. See Note 8 for further information regarding the Company’s long-term debt. |
Balance_Sheet_Components
Balance Sheet Components | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Balance Sheet Components | 4 | Balance Sheet Components | |||||||||||
Allowance for Doubtful Accounts (in thousands) | |||||||||||||
December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Balance at Beginning of the Year | $ | 554 | $ | 554 | $ | — | |||||||
Additions Charges to Cost and Expenses | 21 | — | 554 | ||||||||||
Write-offs | (475 | ) | — | — | |||||||||
Balance Before Recoveries | $ | 100 | $ | 554 | $ | 554 | |||||||
Less: Recoveries | (100 | ) | — | — | |||||||||
Balance at the End of the Year | $ | — | $ | 554 | $ | 554 | |||||||
Inventories, net (in thousands) | |||||||||||||
December 31, | |||||||||||||
2014 | 2013 | ||||||||||||
Raw materials | $ | 4,996 | $ | 4,167 | |||||||||
Work in process | 4,571 | 5,285 | |||||||||||
Finished goods | 1,925 | 2,751 | |||||||||||
Inventories | $ | 11,492 | $ | 12,203 | |||||||||
Property and equipment, net (in thousands) | |||||||||||||
December 31, | |||||||||||||
2014 | 2013 | ||||||||||||
Furniture and leasehold improvements | $ | 11,455 | $ | 11,466 | |||||||||
Laboratory equipment | 11,374 | 10,209 | |||||||||||
Computer equipment and software | 2,911 | 2,850 | |||||||||||
25,740 | 24,525 | ||||||||||||
Less: Accumulated depreciation and amortization | (23,412 | ) | (20,884 | ) | |||||||||
Property and equipment, net | $ | 2,328 | $ | 3,641 | |||||||||
Accrued liabilities (in thousands) | |||||||||||||
December 31, | |||||||||||||
2014 | 2013 | ||||||||||||
Accrued salaries, commission, bonus and benefits | $ | 2,835 | $ | 1,867 | |||||||||
Accrued royalties | 594 | 796 | |||||||||||
Accrued legal and other professional fees | 169 | 183 | |||||||||||
Clinical related accruals | 394 | 290 | |||||||||||
Tax accruals | 274 | 261 | |||||||||||
Other accrued expenses | 676 | 537 | |||||||||||
Total | $ | 4,942 | $ | 3,934 | |||||||||
Agreements_with_Intuitive_Surg
Agreements with Intuitive Surgical | 12 Months Ended | |
Dec. 31, 2014 | ||
Agreements with Intuitive Surgical | 5 | Agreements with Intuitive Surgical |
In October 2012, the Company signed an updated license agreement with Intuitive Surgical Operations, Inc. and Intuitive Surgical, Inc. (collectively, “Intuitive Surgical”), under which Intuitive Surgical paid the Company a $20 million licensing fee, and a stock purchase agreement to sell 5,291,005 shares of the Company’s common stock to Intuitive Surgical for an aggregate purchase price of $10 million. The amendment of the license agreement is an update to the co-exclusive cross license agreement signed by the companies in 2005. Under the terms of the amended agreement, Intuitive Surgical’s existing co-exclusive rights to the Company’s patent portfolio to certain non-vascular procedures have been extended to include patents filed or conceived by the Company subsequent to the original 2005 agreement up to and including the period three years subsequent to the amendment. However, the Company has no obligations to conduct any research activities under the amendment. The Company retains the right to use its intellectual property for all clinical applications, both vascular and non-vascular. The Company has concluded that the value associated with patents filed or conceived in the three years subsequent to the amendment is de minimis and therefore the $20.0 million upfront payments for the licensing of intellectual property was recognized in the statement of operations in fiscal year 2012. The $10.0 million associated with the stock purchase agreement was recorded to common stock and additional paid-in capital on the balance sheet in 2012. | ||
The Company has minimum royalty obligations of $0.2 million per year under the terms of its cross license agreement with Intuitive Surgical. For fiscal years 2014, 2013 and 2012, the Company incurred cost in the amount of $0.3 million, $0.2 million and $0.2 million, respectively related to the royalty obligations to Intuitive Surgical. |
Agreements_with_Philips
Agreements with Philips | 12 Months Ended | |
Dec. 31, 2014 | ||
Agreements with Philips | 6 | Agreements with Philips |
In February 2011, the Company entered, directly and through a wholly-owned subsidiary, into patent and technology license, sublicense and purchase agreements with Philips to allow them to develop and commercialize the non-robotic applications of the Company’s Fiber Optic Shape Sensing and Localization (“FOSSL”) technology. Under the terms of the FOSSL agreements, Philips has the exclusive right to develop and commercialize the FOSSL technology in the non-robotic vascular, endoluminal and orthopedic fields. Philips also receives non-exclusive rights in other non-robotic medical device fields, but not to any multi-degree of freedom robotic applications. If Philips does not meet certain specified commercialization obligations, the Company has the rights to re-acquire the licenses granted to Philips for pre-determined payments, which payments in the aggregate would be greater than the upfront payment amounts received by the Company from Philips in connection with the agreements related to the FOSSL technology. The FOSSL agreements also contain customary representations, warranties and indemnification provisions by each party. Each party may terminate the agreements for material breach by the other party. Philips also has the right to terminate the agreement and its rights under the agreement if the Company is acquired by a competitor of the relevant business unit of Philips. | ||
Also in February 2011, the Company amended its extended joint development agreement with Philips, increasing the amount of funding provided by Philips for the development of the Vascular System and potentially extending and increasing certain royalty fees to be paid to Philips based on sales of the Vascular System, subject to caps based on the amounts Philips contributes to the development of the system. Under the amendment, the Company will be eligible to receive up to an additional $78.0 million in future payments associated with the successful commercialization by Philips or its collaborators of products containing FOSSL technology. Approximately two-thirds of these potential future payments could arise from Philips’ sublicensing the FOSSL technology and approximately one-third of the potential future payments are based on Philips’ royalty obligations on its sales of products containing the FOSSL technology. The Company would receive less than half of Philips’ proceeds for its sublicensing FOSSL technology, if and following Philips entering into an applicable sublicensing transaction. Philips’ FOSSL-related royalty obligations are calculated on a consistent annual basis between 2014 and 2020 and arise in any year only to the extent that Philips achieves a substantial number of commercial placements of FOSSL-enabled products in the calendar year. The Company has royalty obligations under the amended joint development agreement with Philips which provides for the payment of royalties to Philips through October 2017. Under the terms of the agreement, the Company has no minimum obligation with Philips, the royalty obligation is based on per unit sales of the Magellan systems and vascular catheters. For fiscal years 2014, 2013 and 2012, the Company incurred cost in the amount of $1.2 million, $0.9 million and $0.6 million, respectively related to the royalty obligations to Philips. |
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Commitments and Contingencies | 7 | Commitments and Contingencies | |||||||||||
Operating Leases | |||||||||||||
The Company rents its office and laboratory facilities in Mountain View, California under an operating lease which has been extended until January 2020, with an option to extend the lease for another five years. The Company also leases approximately 3,300 square feet of office space in London, England, lease of which ends in June 2020. As of December 31, 2014, the Company has exercised the option to exit the London lease in 2015 and incurred $0.1 million exit cost recorded on the consolidated statement of operations. The Company’s London’s office is currently in the process of locating a smaller office space. Rent expense on a straight-line basis was as follows (in thousands): | |||||||||||||
Years Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Rent expense | $ | 2,613 | $ | 2,310 | $ | 2,280 | |||||||
At December 31, 2014, future minimum payments under the leases are as follows (in thousands): | |||||||||||||
Years ended December 31, | Future Minimum | ||||||||||||
Lease Payments | |||||||||||||
2015 | $ | 2,162 | |||||||||||
2016 | 2,141 | ||||||||||||
2017 | 2,205 | ||||||||||||
2018 | 2,271 | ||||||||||||
2019 | 2,144 | ||||||||||||
Thereafter | — | ||||||||||||
Total | $ | 10,923 | |||||||||||
Warranties | |||||||||||||
The Company generally provides one year of post-contract customer service on the sale of its systems. Post-contract customer service revenue is recognized ratably over the term of the service period and associated expenses are charged to cost of revenues as incurred. The Company provides a limited warranty on the sale of robotic systems and records a warranty reserve at the time of sale to cover the estimated warranty costs. The Company’s warranty obligation may be impacted by product failure rates, material usage and service costs associated with its warranty obligations. The Company periodically evaluates and adjusts the warranty reserve to the extent actual warranty expense differs from the original estimates. Movement in the warranty liability have not been significant for the years ended December 31, 2014 and 2013, respectively. | |||||||||||||
Other Royalty Obligations | |||||||||||||
The Company has minimum royalty obligations of $100,000 per year under a license agreement with Mitsubishi Electric Research Laboratories, Inc. which reduces to $55,000 per year if the license becomes non-exclusive. The royalty obligation expires in 2018 The Company incurred cost in the amount of $0.1 million related to the royalty obligations to Mitsubishi in each of the fiscal years 2014, 2013 and 2012. | |||||||||||||
Indemnification | |||||||||||||
The Company has agreements with each member of its Board of Directors, its Chief Executive Officer, its former President and its Interim Chief Financial Officer indemnifying them against liabilities arising from actions taken against the Company. To date, the Company has not incurred any material costs as a result of such indemnifications and has not accrued any liabilities related to such obligations in the accompanying financial statements. | |||||||||||||
The Company has agreements with certain customers indemnifying them against liabilities arising from legal actions relating to the customer’s use of intellectual property owned by the Company. To date, the Company has not incurred any material costs as a result of such indemnifications and has not accrued any liabilities related to such obligations in the accompanying financial statements. | |||||||||||||
Legal Proceedings | |||||||||||||
Following the Company’s October 19, 2009 announcement that it would restate certain of its financial statements, a securities class action lawsuit was filed on October 23, 2009 in the United States District Court for the Northern District of California, naming the Company and certain of its now former officers. Curry v. Hansen Medical, Inc. et al., Case No. 09-05094. The complaint asserted claims for violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 on behalf of a putative class of purchasers of Hansen stock between May 1, 2008 and October 18, 2009, inclusive, and alleged, among other things, that defendants made false and/or misleading statements and/or failed to make disclosures regarding the Company’s financial results and compliance with GAAP while improperly recognizing revenue; that these misstatements and/or nondisclosures resulted in overstatement of Company revenue and financial results and/or artificially inflated the Company’s stock price; and that following the Company’s October 19, 2009 announcement, the price of the Company’s stock declined. On November 4, 2009 and November 13, 2009, substantively identical complaints were filed in the Northern District of California by other purported Hansen stockholders asserting the same claims on behalf of the same putative class of Hansen stockholders. Livingstone v. Hansen Medical, Inc. et al., Case No. 09-05212 and Prenter v. Hansen Medical, Inc., et al., Case No. 09-05367. All three complaints sought certification as a class action and unspecified compensatory damages plus interest and attorneys’ fees. On December 22, 2009, two purported Hansen stockholders, Mina and Nader Farr, filed a joint application for appointment as lead plaintiffs and for consolidation of the three actions. On February 25, 2010, the Court issued an order granting Mina and Nader Farr’s application for appointment as lead plaintiffs and consolidating the three securities class actions. On July 15, 2010, the Court entered an order granting lead plaintiffs’ motion for leave to file a second amended complaint. Lead plaintiffs’ second amended complaint, in addition to alleging that shareholders suffered damages as a result of the decline in the Company’s stock price following the October 19, 2009 announcement, also alleged that shareholders suffered additional damages as the result of share price declines on July 28, 2009, July 31, 2009, January 8, 2009, July 6, 2009, and August 4, 2009, all of which lead plaintiffs alleged were caused by the disclosure of what they claim was previously misrepresented information. The Defendants filed their motion to dismiss the second amended complaint on October 13, 2010. The Court granted Defendants’ motion to dismiss with leave to amend on August 25, 2011. Plaintiffs’ third amended complaint was filed on October 18, 2011. Defendants filed their motions to dismiss on January 9, 2012. On August 10, 2012, the Court denied in part and granted in part Defendants’ motions to dismiss. On January 4, 2013, lead plaintiffs sought leave to amend their complaint to add certain of Hansen’s current and former directors and Hansen’s former auditor. Hansen filed an opposition to lead plaintiffs’ motion on February 11, 2013. | |||||||||||||
On May 9, 2013, the parties entered a stipulation of settlement pursuant to which the plaintiffs would receive an aggregate of $8.5 million, $4.0 million of which would be funded in cash by the Company’s insurer and other sources. The Company would fund the remaining portion by issuing $4.25 million worth of the Company’s common stock, the number of shares to be determined based on the average closing price of the common stock for the 10 trading days preceding final Court approval of the settlement of the class action, and paying $250,000 in cash. The Company recorded a loss on litigation settlement of $4.5 million in its first quarter ended March 31, 2013. On December 5, 2013, the U.S. District Court for the Northern District of California granted final approval of a settlement. On December 19, 2013, the Company issued 2,298,539 shares, as determined by the average closing price of the Company’s common stock for the 10 trading days preceding final court approval of the settlement, which average was $1.8490 per share. |
Longterm_Debt
Long-term Debt | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Long-term Debt | 8 | Long-term Debt | |||
Oxford Loan | |||||
In December 2011, the Company entered into a $30.0 million loan and security agreement with Oxford Finance LLC and Silicon Valley Bank (the “Oxford Loan”). Under the loan agreement, the Company was obligated to pay interest only payments on the Oxford Loan through June 30, 2013, following which time the Oxford Loan required interest and principal payments through January 1, 2016. The Oxford Loan accrued interest at a stated rate of 9.45% and included an additional final interest payment of 3.95% of the original principal amount. The Oxford Loan provided for a prepayment option that allowed the Company to prepay all of the outstanding principal balance, subject to a pre-payment fee. In connection with the Oxford Loan, the Company issued warrants to purchase 660,793 shares of common stock. The warrants have an exercise price of $2.27 per share and expire in December 2018. | |||||
In August 2013, the Oxford Loan was fully repaid and extinguished under the loan agreement’s prepayment option. The Company paid a final interest balloon of $1.2 million plus accrued interest and a prepayment penalty. Following the repayment of the Oxford Loan, the Company recognized a loss on extinguishment of debt of $1.9 million, which included $0.9 million prepayment penalty, $0.5 million additional end of term payment and $0.5 million unamortized discount from warrants and issuance costs. | |||||
White Oak Loan | |||||
In July 2013, the Company executed a secured term loan agreement with White Oak Global Advisors, LLC (“White Oak”), as a lender and agent for several lenders. On August 23, 2013, the loan agreement was amended and restated and the loan was funded. The amended loan agreement provides for term loan debt financing of $33.0 million with a single principal balloon payment due at maturity on December 30, 2017. Cash interest accrues at an 11.0% per annum rate and is payable quarterly. Additionally, a 3.0% per annum payment-in-kind accrues quarterly and is accretive to the principal amount owed under the agreement. Substantially all of the proceeds from the loan were used to fully repay and extinguish the prior Oxford Loan. In connection with the loan, the Company incurred costs of approximately $1.5 million including payments to the lender agent totaling $0.7 million and the placement agent totaling $0.3 million that in aggregate are amortized to interest expense over the life of the loan. Under the amended loan agreement, the Company is obligated to pay White Oak certain servicing, administration and monitoring fees of $32,000 annually. The Company may prepay all or a portion of the outstanding principal balance, subject to paying a prepayment fee of 3.5% of the principal amount of the loan prepaid if the prepayment is made on or before the third anniversary of the funding of the loan or 1.0% of the principal amount of the loan prepaid if the prepayment is made after the third anniversary and on or before the fourth anniversary of the funding of the loan. The Company is also required to make mandatory prepayments upon certain events of loss and certain dispositions of the Company’s assets as described in the amended loan agreement. For fiscal years 2014 and 2013, the Company recognized expense of $0.4 million and 0.1 million, respectively, for the amortization of debt issuance costs related to the White Oak loan. | |||||
The loan is collateralized by substantially all of the Company’s assets then owned or thereafter acquired, other than its intellectual property, and all proceeds and products thereof. Two of the Company’s wholly-owned subsidiaries, AorTx, Inc. and Hansen Medical International, Inc., have entered into agreements to guarantee the Company’s obligations under the amended loan agreement and have granted first priority security interests in their assets, excluding any of their intellectual property, to secure their guarantee obligations. Under the amended loan agreement, neither the Company nor AorTx, Inc. and Hansen Medical International, Inc. may grant a lien on any intellectual property to third parties. The Company additionally agreed to pledge to lenders shares of each of its direct and indirect subsidiaries as collateral for the loan. Pursuant to the loan agreement, the Company is subject to certain affirmative and negative covenants and also to minimum liquidity requirements which require the Company to maintain $15.0 million in liquidity at all times, consisting of at least $13.0 million in cash, cash equivalents and investments, and the remaining $2.0 million in accounts receivable. In addition, $5.0 million investment in Certificate of Deposit along with investments in Luna Innovations, Inc. is required to be restricted subject to lenders’ control. The loan also limits the Company’s ability to (a) undergo certain change of control events; (b) convey, sell, lease, transfer, assign or otherwise dispose of any of its assets; (c) create, incur, assume, or be liable with respect to certain indebtedness, not including, among other items, subordinated debt; (d) grant liens; (e) pay dividends and make certain other restricted payments; (f) make certain investments; (g) make payments on any subordinated debt; or (h) enter into transactions with any of its affiliates outside of the ordinary course of business, or permit its subsidiaries to do the same. The Company is also required to make mandatory prepayments upon certain events of losses and certain dispositions of our assets as described in the amended loan agreement. In the event the Company were to violate any covenants or if White Oak has reason to believe that the Company has violated any covenants including a significant adverse event clause, and such violations are not cured pursuant to the terms of the loan and security agreement, the Company would be in default under the loan and security agreement, which would entitle lenders to exercise their remedies, including the right to accelerate the debt, upon which the Company may be required to repay all amounts then outstanding under the loan and security agreement. As of December 31, 2014, the Company was in compliance with all financial covenants. | |||||
Future annual payments due on the debt outstanding as of December 31, 2014 are as follows (in thousands): | |||||
2015 | $ | 3,879 | |||
2016 | 4,009 | ||||
2017 | 41,782 | ||||
Total remaining payments | 49,670 | ||||
Less: Amount representing interest | (15,285 | ) | |||
34,385 | |||||
Less: Current portion of long-term debt | — | ||||
Long-term debt, net of current portion | $ | 34,385 | |||
Stockholders_Equity
Stockholders' Equity | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Stockholders' Equity | 9 | Stockholders’ Equity | |||||||||||
2013 Private Placement Transaction | |||||||||||||
In March 2013, the Company executed an “at the market” agreement pursuant to which the Company may have offered to sell shares of common stock up to an aggregate offering price of up to $25.0 million. In July 2013, the Company exercised its right to terminate the agreement. No shares were offered or sold pursuant to the agreement. | |||||||||||||
On July 30, 2013, the Company entered into a securities purchase agreement to sell an aggregate of 28,455,284 shares of its common stock at a per share price of $1.23 and warrants to purchase an aggregate of 34,146,339 shares of common stock at a per warrant price of $0.125 in a private placement transaction. The warrants were comprised of the following three series: Series A warrants exercisable for an aggregate 11,382,113 shares of common stock, with an exercise price equal to $1.23; Series B warrants exercisable for an aggregate 11,382,113 shares of common stock, with an exercise price equal to $1.50 per share; and Series C warrants exercisable for an aggregate 11,382,113 shares of common stock, with an exercise price equal to $2.00 per share. Series A warrants were subject to mandatory exercise subsequent to the receipt of regulatory approval for the new 6Fr Magellan catheter in the U.S., which occurred in February 2014. The financing resulted in gross proceeds to the Company of approximately $39.3 million prior to placement fees and offering costs of approximately $2.1 million. At the closing of the private placement financing, the Company entered into an investor rights agreement with the purchasers of the shares and warrants in which the Company agreed to file a registration statement covering resale of the shares and the purchasers agreed not to transact in any shares of the Company’s common stock for a one-year period following the closing, subject to certain exceptions. In the first quarter of 2014, subsequent to the receipt of regulatory approval for the new Magellan 6Fr Robotic Catheter in the U.S., Series A warrants for 11.4 million shares of the Company’s common stock were exercised for total proceeds of $14.0 million in accordance with the terms and conditions of a securities purchase agreement dated July 30, 2013. All of the Series A Warrants were mandatorily exercised in the first quarter of 2014 pursuant to the Company’s achievement of a regulatory milestone as set forth in the Series A Warrants. | |||||||||||||
2014 Warrant Exchange | |||||||||||||
On July 30, 2014, the Company entered into a definitive agreement (the “Exchange Agreement”) with certain warrantholders to cancel and exchange (the “Exchange”) an aggregate of 10,221,173 of the Company’s outstanding Series B Warrants and an aggregate of 10,221,173 of the Company’s outstanding Series C Warrants. In exchange, the Company issued warrants (the “Exchange Warrants”) to purchase an aggregate of 26,728,369 shares of common stock. The Exchange was completed in August 2014. | |||||||||||||
The Exchange Warrants are comprised of the following two tranches: (a) Series B/C Exchange Warrants (“Series B/C Exchange Warrants”) exercisable for an aggregate of 20,442,346 shares of common stock, with an exercise price equal to $1.13 per share, the NASDAQ consolidated closing bid price for the Common Stock on July 29, 2014, the last completed trading day before the Exchange Agreement was executed (the “Closing Bid Price”); and (b) Series D Warrants (“Series D Warrants”) exercisable for an aggregate of 6,286,023 shares of common stock, with an exercise price equal to the Closing Bid Price. The Series B/C Exchange Warrants were subject to mandatory exercise within 14 days of issuance and were exercised in August 2014, resulting in gross proceeds to the Company of approximately $23.1 million. The Series D Warrants have an exercise period of five years, and if fully exercised, would result in additional gross proceeds to the Company of approximately $7.1 million. The Series B Warrants and Series C Warrants previously carried an expiration date of August 2015. The remaining Series B Warrants and Series C Warrants not included in the Exchange will remain outstanding until their exercise or expiration. | |||||||||||||
As a result of a change in the terms and conditions of the Series B and C Warrants, the transaction was treated as a modification of the original award using the accounting guidance in ASC 718-20-35-3, this guidance implies that the entity repurchases the original instrument by issuing a new instrument of equal or greater value, incurring additional incremental value. Incremental cost shall be measured as the excess, if any, of the fair value of the modified award over the fair value of the original award immediately before its terms are modified, measured based on the share price, Black-Scholes options pricing model and other pertinent factors at that date. These variables include the Company’s expected stock price volatility over the term of the award, expected term, risk-free interest rate and expected dividend rate. The Company recorded $2.9 million warrant exchange charge in the condensed consolidated statement of operations during the year ended December 31, 2014 based upon the difference between the fair value of the Series B and C Warrants immediately prior to the exchange and the fair value of the newly issued Series B/C Exchange Warrants and Series D Warrants. | |||||||||||||
Accumulated Other Comprehensive Income (Loss) | |||||||||||||
The component of accumulated other comprehensive income (loss), net of tax for years ended December 31, 2014 and 2013 are as follows (in thousands): | |||||||||||||
Unrealized | Foreign | Total | |||||||||||
Gains | Currency | ||||||||||||
(Losses) | Translation | ||||||||||||
on | Gains | ||||||||||||
Securities | (Losses) | ||||||||||||
December 31, 2014: | |||||||||||||
Beginning balance | $ | 373 | $ | (13 | ) | $ | 360 | ||||||
Other comprehensive income before reclassification | 19 | (74 | ) | (55 | ) | ||||||||
Reclassification from accumulated other comprehensive income | — | — | — | ||||||||||
Net current-period other comprehensive loss | 19 | (74 | ) | (55 | ) | ||||||||
Ending Balance | $ | 392 | $ | (87 | ) | $ | 305 | ||||||
December 31, 2013: | |||||||||||||
Beginning balance | $ | (530 | ) | $ | (48 | ) | $ | (578 | ) | ||||
Other comprehensive income before reclassification | 276 | 35 | $ | 311 | |||||||||
Reclassification from accumulated other comprehensive income | 627 | — | 627 | ||||||||||
Net current-period other comprehensive loss | 903 | 35 | 938 | ||||||||||
Ending Balance | $ | 373 | $ | (13 | ) | $ | 360 | ||||||
The reclassification primarily relates to an other-than-temporary impairment loss of $0.6 million on the Company’s investment in Luna common stock as discussed in Note 3. This amount was reclassified to interest and other expense, net in the condensed consolidated statements of operations for the quarter ended March 31, 2013. |
Stockbased_Compensation
Stock-based Compensation | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Stock-based Compensation | 10 | Stock-based Compensation | |||||||||||||||||||
Stock Option and Equity Incentive Plans | |||||||||||||||||||||
2002 Stock Option Plan | |||||||||||||||||||||
The Company’s 2002 Stock Option Plan (the “2002 Plan”) was created for the purpose of issuing stock options to employees, directors and consultants of the Company. Options granted under the 2002 Plan were either incentive stock options (“ISO”) or nonqualified stock options (“NSO”). ISOs may be granted only to Company employees (including officers and directors), whereas NSOs may be granted to Company employees and consultants. Options expire on terms as determined by the board of directors but not more than ten years after the date of grant. The Company reserved a total of 4,579,009 shares of its common stock for issuance under its 2002 Plan. Upon effectiveness of the Company’s IPO in November 2006, the Company ceased issuing stock options under the 2002 Plan. At that time, all shares remaining available for grant under the 2002 Plan became available for grant instead under the 2006 Equity Incentive Plan. However, cancelled shares under the 2002 Plan do not become available for grant under the 2006 Equity Incentive Plan. All outstanding options granted under the 2002 Plan continue to be administered under the 2002 Plan. | |||||||||||||||||||||
Stock options granted under the 2002 Plan provided employee option holders the right to elect to exercise unvested options in exchange for restricted common stock. Unvested shares were subject to a repurchase right held by the Company at the original issuance price in the event the optionees’ employment is terminated either voluntarily or involuntarily. For exercises of employee options, this right usually lapsed 25% on the first anniversary of the vesting start date and in 36 equal monthly amounts thereafter. These repurchase terms were considered to be a forfeiture provision and did not result in variable accounting. As of December 31, 2014, there were no unvested shares outstanding. | |||||||||||||||||||||
2006 Equity Incentive Plan | |||||||||||||||||||||
In August 2006, the Company’s board of directors approved the 2006 Equity Incentive Plan (the “2006 Plan”) to be effective on the date of the Company’s IPO. The 2006 Plan provides for the grant of ISOs, nonstatutory stock options, restricted stock awards, restricted stock unit awards, stock appreciation rights, performance-based stock awards, and other forms of equity compensation, or collectively, stock awards, and performance-based cash awards, all of which may be granted to employees, including officers, non-employee directors and consultants. Options expire on terms as determined by the board of directors but not more than ten years after the date of grant. | |||||||||||||||||||||
The Company initially reserved a total of 2,000,000 shares for issuance under the 2006 Plan in addition to those shares which remained available for grant under the 2002 Plan. In addition, the number of shares of common stock reserved for issuance under the 2006 Plan automatically increases on January 1st each year by the lowest of (a) 4% of the total number of shares of our common stock outstanding on December 31st of the preceding calendar year, (b) 3,500,000 shares, or (c) a number determined by the board of directors that is less than (a) or (b). At December 31, 2014, 2,950,101 shares were available for grant under the 2006 Plan. | |||||||||||||||||||||
Option activity under both the 2002 Plan and the 2006 Plan for 2014 is as follows: | |||||||||||||||||||||
Shares | Weighted- | Weighted- | Aggregate | ||||||||||||||||||
Average | Average | Intrinsic | |||||||||||||||||||
Exercise | Remaining | Value | |||||||||||||||||||
Price | Contractual | ||||||||||||||||||||
Term | |||||||||||||||||||||
(in thousands) | (in years) | (in thousands) | |||||||||||||||||||
Balance at January 1, 2014 | 7,779 | $ | 3.24 | 4.76 | $ | 169 | |||||||||||||||
Granted | 6,199 | $ | 1.1 | ||||||||||||||||||
Exercised | (1,239 | ) | $ | 2.09 | |||||||||||||||||
Cancelled | (3,548 | ) | $ | 3.94 | |||||||||||||||||
Balance at December 31, 2014 | 9,191 | $ | 1.69 | 7.8 | $ | — | |||||||||||||||
Options vested and expected to vest at December 31, 2014 | 8,995 | $ | 1.66 | 7.82 | $ | — | |||||||||||||||
Options vested at December 31, 2014 | 2,669 | $ | 2.98 | 4.77 | $ | — | |||||||||||||||
The weighted-average grant-date fair value of options granted in 2014, 2013, and 2012 was $0.62, $1.25 and $1.31 per share, respectively. The total fair value of options that vested in 2014, 2013 and 2012 was $1.9 million, $2.6 million and $1.5 million, respectively. | |||||||||||||||||||||
The estimated grant date fair values of the employee stock options were calculated using the following assumptions: | |||||||||||||||||||||
Years Ended December 31, | |||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||
Expected volatility | 72%-74% | 77%-89% | 61%-90% | ||||||||||||||||||
Risk-free interest rate | 1.1%-1.5% | 0.6%-1.5% | 0.5%-1.0% | ||||||||||||||||||
Expected term (in years) | 4.00-4.34 | 4.38-4.57 | 4.29-4.75 | ||||||||||||||||||
Dividend yield | 0% | 0% | 0% | ||||||||||||||||||
As of December 31, 2014, total unamortized stock-based compensation related to unvested stock options was $3.9 million, with a weighted-average remaining recognition period of 2.84 years. | |||||||||||||||||||||
The intrinsic value of exercised stock options is calculated based on the difference between the exercise price and the quoted closing market price of the Company’s common stock on the exercise date. The total intrinsic value of stock options exercised in 2014, 2013 and 2012 was $0.6 million, $19,000, and $0.1 million, respectively. | |||||||||||||||||||||
The options outstanding, vested and currently exercisable by exercise price under both the 2002 Plan and the 2006 Plan at December 31, 2014 are as follows (share options in thousands): | |||||||||||||||||||||
Options Outstanding | Options Exercisable and Vested | ||||||||||||||||||||
Exercise Price | Number of | Weighted- | Number of | Weighted- | Weighted- | ||||||||||||||||
Options | Average | Options | Average | Average | |||||||||||||||||
Remaining | Exercise Price | Remaining | |||||||||||||||||||
Contractual | Contractual | ||||||||||||||||||||
Life | Life | ||||||||||||||||||||
(in years) | (in years) | ||||||||||||||||||||
$0.40-$1.96 | 5,835 | 9.09 | 664 | $ | 1.59 | 5.16 | |||||||||||||||
$2.01-$4.88 | 3,189 | 5.78 | 1,838 | $ | 2.6 | 4.98 | |||||||||||||||
$7.75-$12.15 | 99 | 1.3 | 99 | $ | 8.7 | 1.3 | |||||||||||||||
$15.25-$18.95 | 68 | 0.21 | 68 | $ | 18.52 | 0.21 | |||||||||||||||
9,191 | 7.79 | 2,669 | $ | 2.98 | 4.77 | ||||||||||||||||
Restricted stock unit activity under the 2006 Plan is as follows: | |||||||||||||||||||||
Restricted Stock | Weighted- | ||||||||||||||||||||
Units | Average Grant- | ||||||||||||||||||||
Date Fair Value | |||||||||||||||||||||
(in thousands) | |||||||||||||||||||||
Balance at January 1, 2014 | 1,318 | $ | 1.99 | ||||||||||||||||||
Awarded | 1,014 | $ | 1.89 | ||||||||||||||||||
Vested | (896 | ) | $ | 1.99 | |||||||||||||||||
Cancelled | (595 | ) | $ | 2.1 | |||||||||||||||||
Balance at December 31, 2014 | 841 | $ | 1.8 | ||||||||||||||||||
The fair value of restricted stock units is the quoted market price of the Company’s common stock as of the close of the grant date. The total fair value of shares vested pursuant to restricted stock units in 2014, 2013, and 2012 was $2.5 million, $2.6 million and $2.4 million, respectively. As of December 31, 2014, total unamortized stock-based compensation related to unvested restricted stock units was $0.7 million, with a weighted-average remaining recognition period of 3.28 years. | |||||||||||||||||||||
2006 Employee Stock Purchase Plan | |||||||||||||||||||||
In August 2006, the Company’s board of directors approved the 2006 Employee Stock Purchase Plan (the “Stock Purchase Plan”) which became effective upon the Company’s IPO. Commencing on January 1, 2007, the Stock Purchase Plan allows participating employees to contribute up to 15% of their earnings, up to a maximum of $25,000, to purchase shares of the Company’s stock at a price per share equal to the lower of (a) 85% of the fair market value of a share of our common stock on the first date of the offering period, or (b) 85% of the fair market value of a share of our common stock on the date of purchase. The Company’s board of directors may specify offerings with durations of not more than 27 months, and may specify shorter purchase periods within each offering. Each offering will have one or more purchase dates on which shares of the Company’s common stock will be purchased for employees participating in the offering. | |||||||||||||||||||||
The Company initially reserved a total of 625,000 shares of common stock for issuance under the Stock Purchase Plan. In addition, the plan provides for automatic increases on January 1st, from January 1, 2007 through January 1, 2016, by the lesser of (a) 2% of the total number of shares of common stock outstanding on December 31st of the preceding calendar year, (b) 750,000 shares of common stock or (c) a number determined by the board of directors that is less than (a) and (b). | |||||||||||||||||||||
The estimated fair values of the shares issued under the Stock Purchase Plan were calculated using the following assumptions: | |||||||||||||||||||||
Years Ended December 31, | |||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||
Expected volatility | 75%-111% | 57%-99% | 62%-110% | ||||||||||||||||||
Risk-free interest rate | 0.10% | 0.10% | 0.10% | ||||||||||||||||||
Expected term (in years) | 0.5 | 0.5 | 0.5 | ||||||||||||||||||
Dividend yield | 0% | 0% | 0% | ||||||||||||||||||
Total Stock-based Compensation | |||||||||||||||||||||
Total stock-based compensation expense was allocated to cost of revenues, research and development and selling, general and administrative expense as follows (in thousands): | |||||||||||||||||||||
Years Ended December 31, | |||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||
Cost of revenues | $ | 230 | $ | 402 | $ | 319 | |||||||||||||||
Research and development | 704 | 1,320 | 444 | ||||||||||||||||||
Selling, general and administrative | 1,898 | 3,167 | 2,119 | ||||||||||||||||||
Total | $ | 2,832 | $ | 4,889 | $ | 2,882 | |||||||||||||||
Stock-based compensation expense related to stock options granted to non-employees is recognized on an accelerated basis as the stock options are earned. The final measurement occurs at the later of a performance commitment or when performance is complete. The Company believes that the fair value of the stock options is more reliably measurable than the fair value of the services received. The fair value of the stock options granted is calculated at each reporting date using the Black-Scholes option valuation model. Stock-based compensation expense charged to operations for options granted to non-employees for the years ended December 31, 2014 and 2013, 2012 was immaterial. | |||||||||||||||||||||
In fiscal 2014, the Company awarded 414,070 restricted stock units to certain executives, which are subject to certain financial performance targets for the year ending December 31, 2015 and their continued employment, before vesting can occur. Of these awards, 111,940 awards were cancelled as a result of employee terminations. No compensation cost related to these awards was recorded in 2014. The Company records compensation expense related to these performance-based awards based on the estimated probability of achieving the financial performance targets. Total stock-based compensation for the year ended December 31, 2012 includes a $0.7 million reduction in expense recorded in the first quarter of 2012 resulting from an out of period adjustment related to compensation recorded in 2011 and prior periods for the Company’s employee stock purchase plan. This out of period correction was not material to the year ended December 31, 2012 or to prior periods. |
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Income Taxes | 11 | Income Taxes | |||||||||||
The Company’s pre-tax loss consists of the following (in thousands): | |||||||||||||
Years Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Domestic | $ | (54,457 | ) | $ | (55,877 | ) | $ | (22,343 | ) | ||||
Foreign | 239 | 270 | 312 | ||||||||||
Pre-tax loss | $ | (54,218 | ) | $ | (55,607 | ) | $ | (22,031 | ) | ||||
The Company had significant losses in 2014 and as such the $28,000 tax expense for fiscal year 2014 relates to foreign taxes. The Company’s effective tax rate differs from the U.S. federal statutory rate as follows: | |||||||||||||
Years Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Federal tax benefit at statutory rate | (34 | )% | (34 | )% | (34 | )% | |||||||
Permanent difference due to non-deductible expenses | 2 | % | 1 | % | 1 | % | |||||||
State tax benefit, net of federal impact | — | % | — | % | — | % | |||||||
Change in deferred tax asset valuation allowance | 33 | % | 33 | % | 32 | % | |||||||
General business credits | (1 | )% | — | % | — | % | |||||||
Effective tax rate | — | % | — | % | (1 | )% | |||||||
The tax effects of temporary differences and carryforwards that give rise to significant portions of the deferred tax assets are as follows (in thousands): | |||||||||||||
December 31, | |||||||||||||
2014 | 2013 | ||||||||||||
Net operating loss carryforwards | $ | 108,245 | $ | 93,744 | |||||||||
Research and development credits | 10,564 | 9,682 | |||||||||||
Capitalized research and development | 19,926 | 19,107 | |||||||||||
Fixed assets | 2,464 | 2,222 | |||||||||||
Stock-based compensation | 3,214 | 2,478 | |||||||||||
Accruals, reserves and other | 2,259 | 2,061 | |||||||||||
Intangibles | 857 | 1,092 | |||||||||||
147,529 | 130,386 | ||||||||||||
Less: Valuation allowance | (147,529 | ) | (130,386 | ) | |||||||||
Net deferred tax asset | $ | — | $ | — | |||||||||
At December 31, 2014, the Company has federal and state net operating loss carryforwards of approximately $285.7 million and $179.5 million, respectively, available to offset future taxable income. These net operating loss carryforwards will expire in varying amounts from 2015 through 2034 if not utilized. The net operating loss carryforwards include $1.9 million which relates to stock option deductions that will be recognized through additional paid-in capital when utilized. As such, these deductions are not reflected in our deferred tax assets. The Company also has federal and California research and development tax credit carryforwards of $8.9 million and $7.9 million, respectively, available to offset future taxes payable. The federal credits begin to expire in 2023, while the state credits have no expiration. | |||||||||||||
Due to uncertainty surrounding realization of the deferred tax assets in future periods, the Company has placed a 100% valuation allowance against its net deferred tax assets. The valuation allowance increased by $17.1 million, $21.4 million and $5.9 million during the years ended December 31, 2014, 2013 and 2012, respectively. At such time as it is determined that it is more likely than not that the deferred tax assets are realizable, the valuation allowance will be reduced. Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, provide for annual limitations on the utilization of net operating loss and research and experimentation credit carryforwards if the Company were to undergo an ownership change, as defined in Section 382. In general, an ownership change occurs whenever the percentage of the shares of a corporation owned, directly or indirectly, by 5-percent shareholders, as defined in Section 382, increases by more than 50 percentage points over the lowest percentage of the shares of such corporation owned, directly or indirectly, by such 5-percent shareholders at any time over the preceding three years. As the result of the sale of 11,700,000 shares of common stock in April 2009, the sale of 16,100,000 shares of common stock in April 2010, the sale of 4,785,000 shares of common stock in November 2011, the sale of 5,291,005 shares of common stock in October 2012, the sale of 28,455,284 shares of common stock in August 2013, the issuance of 26,728,369 shares of common stock upon warrant exchange in August 2014, such an ownership change may have occurred. Accordingly, the Company’s utilization of net operating loss and credit carryforwards which existed at that time could be limited. The Company has not completed a study to assess whether an ownership change has occurred or whether there have been multiple ownership changes since the Company became a “loss corporation” under the Code. The Company has and will continue to evaluate alternative analyses permitted under Section 382 and IRS notices to determine whether or not any ownership changes have occurred and may occur (and if so, when they occurred) that would result in limitations on its net operating losses (“NOLs”) or certain other tax attributes. | |||||||||||||
The Company has not provided for U.S. federal income and foreign withholding taxes on any undistributed earnings from non-U.S. operations because such earnings are intended to be reinvested indefinitely outside of the United States. If these earnings were distributed, foreign tax credits may become available under current law to reduce or eliminate the resulting U.S. income tax liability. As of December 31, 2014, there is $1.5 million in cumulative foreign earnings upon which U.S. income taxes have not been provided. | |||||||||||||
The Company files income tax returns in the United States, various state jurisdictions and in the countries of United Kingdom and Germany. As of December 31, 2014, the Company’s federal tax returns for years ended 2011 through the current period and most state returns for the years ended 2010 through the current period are still open to examination. In addition, all of the net operating loss and research and development credit carryforwards that may be used in future years are still subject to adjustment. The Company is also subject to examination in the United Kingdom and Germany beginning in 2010 through the current period. There are no tax examinations currently in progress. | |||||||||||||
A reconciliation of the beginning and ending balance of unrecognized tax benefits is as follows (in thousands): | |||||||||||||
Years Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Balance at beginning of period | $ | 3,864 | $ | 3,358 | $ | 1,697 | |||||||
Additions based on tax positions related to the current year | 384 | 301 | 122 | ||||||||||
Additions based on tax positions related to prior years | — | 205 | 1,539 | ||||||||||
Reduction based on tax positions of prior years | (28 | ) | — | — | |||||||||
Balance at end of period | $ | 4,220 | $ | 3,864 | $ | 3,358 | |||||||
As of December 31, 2014, the company had a total of $4.2 million unrecognized tax benefits, none of which would affect the effective tax rate upon realization. While it is often difficult to predict the final outcome of any particular uncertain tax position, management does not believe that it is reasonably possible that the estimates of unrecognized tax benefits will change significantly in the next twelve months. | |||||||||||||
We recognize interest and penalties related to uncertain tax positions in income tax expense. As of December 31, 2014, we have no accrued interest or penalties related to uncertain tax positions. The Company does not anticipate that total unrecognized tax benefits will significantly change due to the settlement of audits and the expiration of statute of limitations period to December 31, 2015. |
Net_Loss_per_Share
Net Loss per Share | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Net Loss per Share | 12 | Net Loss per Share | |||||||||||
The following table sets forth the computation of basic and diluted net loss per share (in thousands, except per share data): | |||||||||||||
Years Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Net loss | $ | (54,246 | ) | $ | (55,722 | ) | $ | (22,145 | ) | ||||
Shares used to calculated basic and diluted net loss per share | 117,233 | 79,052 | 62,472 | ||||||||||
Basic and diluted net loss per share | $ | (0.46 | ) | $ | (0.70 | ) | $ | (0.35 | ) | ||||
The following securities that could potentially dilute basic net loss per share are not included in the calculation of diluted net loss per share because to do so would be anti-dilutive as of the end of each period presented (in thousands): | |||||||||||||
December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Stock options outstanding | 9,191 | 7,779 | 7,176 | ||||||||||
Unvested restricted stock units | 841 | 1,318 | 1,365 | ||||||||||
Estimated shares to be issued under the employee stock purchase plan | 126 | 41 | 31 | ||||||||||
Warrants | 9,269 | 34,807 | 661 |
Segment_Information
Segment Information | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Segment Information | 13 | Segment Information | |||||||||||
The Company operates its business in one operating segment: the development and marketing of medical devices. The Company’s chief operating decision maker is its Chief Executive Officer who reviews the financial information presented on a consolidated basis for the purpose of making operating decisions and assessing financial performance. | |||||||||||||
The Company’s medical robotics systems are developed and marketed to a broad base of hospitals and distributors in the United States and internationally. The Company considers all such sales to be part of a single operating segment. Information regarding total revenue is as follows (in thousands): | |||||||||||||
Years ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Revenues: | |||||||||||||
United States | $ | 10,041 | $ | 8,580 | $ | 8,197 | |||||||
International (1) | 9,454 | 8,402 | 9,439 | ||||||||||
Total revenues | $ | 19,495 | $ | 16,982 | $ | 17,636 | |||||||
All of the Company’s long-lived assets are located in the United States. Revenues are attributed to countries based on the location of the customer. | |||||||||||||
-1 | For fiscal year 2014, only Japan within international accounted for 13% of total revenues. No single location within international accounted for greater than 10% of total revenues in fiscal years 2013 and 2012. |
Quarterly_Data_unaudited
Quarterly Data (unaudited) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Quarterly Data (unaudited) | 14 | Quarterly Data (unaudited) | |||||||||||||||
The following table represents certain unaudited quarterly information for the eight quarters ended December 31, 2014. This data has been derived from unaudited consolidated financial statements that, in the opinion of the Company’s management, include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of such information when read in conjunction with the Company’s annual audited consolidated financial statements and notes thereto appearing elsewhere in this report. These operating results are not necessarily indicative of results for any future period (in thousands, except per share data): | |||||||||||||||||
First | Second | Third | Fourth | ||||||||||||||
Quarter | Quarter | Quarter | Quarter | ||||||||||||||
-2 | -1 | ||||||||||||||||
2014:00:00 | |||||||||||||||||
Revenues | $ | 3,699 | $ | 6,887 | $ | 3,877 | $ | 5,032 | |||||||||
Gross profit | 398 | 1,902 | 702 | 2 | |||||||||||||
Net loss | (14,445 | ) | (12,290 | ) | (15,594 | ) | (11,917 | ) | |||||||||
Basic net loss per share | (0.14 | ) | (0.11 | ) | (0.13 | ) | (0.09 | ) | |||||||||
Diluted net loss per share | (0.14 | ) | (0.11 | ) | (0.13 | ) | (0.09 | ) | |||||||||
2013:00:00 | |||||||||||||||||
Revenues | $ | 2,951 | $ | 3,343 | $ | 5,068 | $ | 5,620 | |||||||||
Gross profit | 469 | 576 | 1,340 | 1,116 | |||||||||||||
Net loss | (17,187 | ) | (13,446 | ) | (13,201 | ) | (11,888 | ) | |||||||||
Basic net loss per share | (0.26 | ) | (0.20 | ) | (0.16 | ) | (0.12 | ) | |||||||||
Diluted net loss per share | (0.26 | ) | (0.20 | ) | (0.16 | ) | (0.12 | ) | |||||||||
-1 | Net income and basic and diluted net income per share for the third quarter of 2014 include the impact of the warrant exchange of $2.9 million. | ||||||||||||||||
-2 | Net income and basic and diluted net income per share for the first quarter of 2013 include the impact of the loss on settlement of litigation of $4.5 million. |
Subsequent_event
Subsequent event | 12 Months Ended | |
Dec. 31, 2014 | ||
Subsequent event | 15 | Subsequent event |
On March 11, 2015, the Company raised $35 million in gross proceeds from the sale of 53,846 shares of convertible preferred stock at a per share price of $650. Each share of preferred stock will be convertible into the number of shares of Common Stock at a conversion price equal to the lesser of $0.65 per share or the per share trailing weighted average share price of the Common Stock on NASDAQ for the ten trading days ending on the day prior to conversion. Investors would also receive warrants to purchase 53,846,000 shares of Common Stock with an exercise period of two years. The exercise price for the warrants will be the lesser of $0.975 per share or a 50% premium on the per share trailing weighted average share price of the Common Stock on NASDAQ for the ten trading days ending on dates specified in the form of warrants filed with the SEC. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended | |||
Dec. 31, 2014 | ||||
Basis of Presentation | Basis of Presentation | |||
The Company has prepared the accompanying consolidated financial statements in accordance with generally accepted accounting principles in the United States of America (“GAAP”). The Company’s fiscal year ends on December 31. The consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany accounts and transactions have been eliminated. | ||||
Use of Estimates | Use of Estimates | |||
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Significant estimates relate to the recognition of revenue, the evaluation of customer credit risk, the valuation of investments, inventory valuations, warrant valuations, the determination of impairment of assets, stock-based compensation, loss contingencies and the valuation of our deferred tax assets, among others. Actual results could differ from those estimates. | ||||
Revenue Recognition | Revenue Recognition | |||
The Company’s revenues are primarily derived from the sale of the Sensei system and the Magellan Robotic System and the associated catheters as well as the sale of customer service contracts, which includes post-contract customer support (“PCS”). The Company sells its products directly to customers as well as through distributors. Under the Company’s revenue recognition policy, revenues are recognized when persuasive evidence of an arrangement exists, title and risk of loss has passed, delivery to the customer has occurred or the services have been fully rendered, the sales price is fixed or determinable and collectability is reasonably assured. | ||||
• | Persuasive Evidence of an Arrangement. Persuasive evidence of an arrangement for sales of systems is generally determined by a sales contract signed and dated by both the customer and the Company, including approved terms and conditions or the receipt of an approved purchase order. Evidence of an arrangement for the sale of disposable products is determined through an approved purchase order from the customer. Evidence of an arrangement for the sale of customer service is determined through either a signed sales contract or an approved purchase order from the customer. Sales to customers are generally not subject to any performance, cancellation, termination or return rights. | |||
• | Delivery. | |||
• | Systems and Disposable Products. Typically, ownership of systems, catheters and other disposable products passes to customers upon shipment, at which time delivery is deemed to be complete. | |||
• | Customer Service Revenue. The Company recognizes customer service revenue from the sale of its PCS contracts which includes planned and corrective maintenance services, software updates, bug fixes, and warranty. Revenue from customer services, whether sold individually or as a separate unit of accounting in a multi-element arrangement, is deferred and amortized over the service period, which is typically one year. | |||
• | Multiple-element Arrangements. It is common for the sale of Sensei and Magellan systems to include multiple elements which have standalone value and qualify as separate units of accounting. These elements commonly include the sale of the system and a product maintenance plan, in addition to installation of the system and initial training. Less commonly, these elements may include the sale of certain disposable products or other elements. For multiple-element arrangements revenue is allocated to each element based on their relative selling prices. Relative selling prices are based first on vendor specified objective evidence (“VSOE”), then on third-party evidence of selling price (“TPE”) when VSOE does not exist, and then on management’s best estimate of the selling price (“ESP”) when VSOE and TPE do not exist. Because the Company has neither VSOE nor TPE for its system, the allocation of revenue is based on ESP for the systems sold. The objective of ESP is to determine the price at which the Company would transact a sale, had the product been sold on a stand-alone basis. The Company determines ESP for its systems by considering multiple factors, including, but not limited to, features and functionality of the system, geographies, type of customer, and market conditions. The Company regularly reviews ESP and maintains internal controls over the establishment and updates of these estimates. | |||
• | Sales Price Fixed or Determinable. The Company assesses whether the sales price is fixed or determinable at the time of the transaction. Sales prices are documented in the executed sales contract or purchase order received prior to shipment The Company’s standard terms do not allow for contingencies, such as trial or evaluation periods, refundable orders, or extended payment terms payments contingent upon the customer obtaining financing or other contingencies which would impact the customer’s obligation. In situations where these or other contingencies are included, all related revenue is deferred until the contingency is resolved. In the third quarter of 2012, the Company began shipping systems under a limited commercial evaluation program to allow certain strategic accounts to install and utilize systems for a limited trial period of three to six months while the purchase opportunity is being evaluated by the hospital. Systems under this program remain the property of the Company and are recorded in inventory and a sale only occurs upon the issuance of a purchase order from the customer. | |||
• | Collectability. The Company assesses whether collection is probable based on a number of factors, including the customer’s past transaction history and credit worthiness. If collection of the sales price is not deemed probable, the revenue is deferred and recognized at the time collection becomes probable, which is usually upon receipt of cash. The Company’s sales contracts generally do not allow the customer the right of cancellation, refund or return, except as provided under the Company’s standard warranty. If such rights were allowed, all related revenues would be deferred until such rights expired. | |||
Significant management judgments and estimates are made in connection with the determination of revenue to be recognized and the period in which it is recognized. If different judgments and estimates were utilized, the amount of revenue to be recognized and the period in which it is recognized could differ materially from the amounts reported. | ||||
Concentration of Credit Risk and Other Risks and Uncertainties | Concentration of Credit Risk and Other Risks and Uncertainties | |||
Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents, short-term investments and accounts receivable. Cash and cash equivalents are deposited in demand and money market accounts at two financial institutions. At times, such deposits may be in excess of insured limits. The Company has not experienced any losses on its deposits of cash and cash equivalents. | ||||
The Company had four customers who constituted 26%, 14%, 12%, and 12%, respectively of the Company’s net accounts receivable at December 31, 2014. The Company had three customers who constituted 26%, 22%, and 10%, respectively of the Company’s net accounts receivable at December 31, 2013. The Company carefully monitors the creditworthiness of potential customers. As of December 31, 2014, the Company has not experienced any significant losses on its accounts receivable. | ||||
Two customers accounted for 13% and 10%, respectively of total revenues for fiscal year 2014. One customer accounted for 10% of total revenues for fiscal year 2013. One single customer represented 10% and 14% of the total revenue for the years ended December 31, 2014 and 2012, respectively. | ||||
Most of the products developed by the Company require clearance from the FDA or corresponding foreign regulatory agencies prior to commercial sales. The Company received CE Mark approval to market its Sensei system in Europe in the fourth quarter of 2006 and received CE Mark approval to market its Artisan Control Catheter in Europe in May 2007. The Company received FDA clearance for the marketing of its Sensei system and Artisan catheters for manipulation, positioning and control of certain mapping catheters during electrophysiology procedures in the United States in May 2007. The Company received CE Mark approval to market its Lynx catheter in Europe in July 2010. The Company received CE Mark approval for its Magellan Robotic System in July 2011 and received CE Mark approval for the Magellan Robotic Catheter and related accessories designed for use with the Magellan Robotic System in October 2011. The Company received FDA clearance for marketing its Magellan Robotic System, including the catheter and accessories in June 2012 and Magellan 6Fr Robotic Catheter in February 2014. However, there can be no assurance that current products or any new products the Company develops in the future will receive the clearances necessary to allow the Company to market those products in certain desirable markets. If the Company is denied clearance or clearance is delayed, it could have a material adverse impact on the Company. | ||||
The medical device industry is characterized by frequent and extensive litigation and administrative proceedings over patent and other intellectual property rights. Whether a product infringes a patent involves complex legal and factual issues, the determination of which is often difficult to predict, and the outcome may be uncertain until the court has entered final judgment and all appeals are exhausted. The Company’s competitors may assert, and have asserted in the past, that its products or the use of the Company’s products are covered by United States or foreign patents held by them. This risk is heightened due to the numerous issued and pending patents relating to the use of catheter-based procedures in the medical technology field. | ||||
Loss Contingencies | Loss Contingencies | |||
The Company evaluates potential loss contingencies as circumstances dictate. Should a specific loss contingency meet the definition of a liability under authoritative accounting guidance, the Company would record a loss and a liability. As of December 31, 2014, the Company had not recorded any loss contingencies as liabilities. However, if estimates and assumptions change in the future, the Company may record charges to its financial statements. This could materially impact its operating results and financial position. | ||||
Foreign Currency | Foreign Currency | |||
Assets and liabilities of non-U.S. subsidiaries that operate in a local currency environment, where that local currency is the functional currency, are translated at current exchange rates as of the end of the accounting period. The related revenues and expenses are translated at average exchange rates in effect during the period. Net exchange gains and losses resulting from translation are excluded from income and are recorded as part of accumulated other comprehensive income. Transactions denominated in a foreign currency are revalued at the current exchange rate at the transaction date and any related gains and losses are reflected in investment and other income, net in the consolidated statements of income. | ||||
Fair Value Measurements | Fair Value Measurements | |||
GAAP defines fair value as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, authoritative guidance establishes a three-tier value hierarchy, which prioritizes the inputs used in measuring fair value as follows: | ||||
• Level 1 Inputs | Quoted prices (unadjusted) in active markets for identical assets or liabilities. | |||
• Level 2 Inputs | Inputs other than quoted prices in active markets that are observable either directly or indirectly. | |||
• Level 3 Inputs | Unobservable inputs in which there is little or no market data, which require the Company to develop its own assumptions. | |||
This hierarchy requires the use of observable market data when available and to minimize the use of unobservable inputs when determining fair value. | ||||
Fair Value of Financial Instruments | Fair Value of Financial Instruments | |||
Carrying amounts of certain of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, and accounts payable approximate fair value due to their short maturities. | ||||
Cash and Cash Equivalents, and Restricted Cash | Cash and Cash Equivalents, and Restricted Cash | |||
The Company considers all highly liquid investments with maturities of three months or less at the time of purchase to be cash equivalents. Cash and cash equivalents, and restricted cash include money market funds and various deposit accounts, which are readily convertible to cash and are stated at cost, which approximates market. Pursuant to the Company’s secured term loan agreement executed in 2013, the Company is obligated to maintain $5.0 million of restricted cash subject to lenders’ control. | ||||
Short-Term Investments | Short-Term Investments | |||
Available-for-sale investments. The Company determines the appropriate classification of investments at the time of purchase and evaluates such classification as of each balance sheet date. The Company classifies all investments with maturities greater than three months at the time of purchase as short-term investments as they are subject to use within one year in current operations. The Company makes investments based upon specific guidelines approved by its board of directors with a view to liquidity and capital preservation and regularly reviews its investments for performance. As of December 31, 2014, all of the Company’s investments have been classified as available-for-sale and are carried on the balance sheet at fair value with the unrealized gains and losses, if any, included in other comprehensive income within stockholders’ equity. Any unrealized losses which are determined to be other than temporary are included in earnings. | ||||
Other-than-temporary impairment. The Company periodically evaluates its investments for impairment. In the event that the carrying value of an investment exceeds its fair value and the decline in fair value is determined to be other than temporary, an impairment charge is recorded and a new cost basis for the investment is established. The primarily differentiating factors the Company considered to determine whether a decline in value is other than temporary are our intent and ability to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in market value, the length of the time and the extent to which the market value of the investment has been less than cost, the financial condition and near-term prospects of the issuer. Given the current market conditions, these judgments could prove to be wrong, and companies with relatively high credit ratings and solid financial conditions may not be able to fulfill their obligations. | ||||
During the year ended December 31, 2013, the Company recorded pre-tax losses of $0.6 million related to a decline in the value of our investment in Luna Innovations Incorporated common stock that the Company concluded were other-than-temporary. No impairment loss were recorded during the years ended December 31, 2014, and 2012. As of December 31, 2014, and 2013, net unrealized gains on investments of $0.02 million and $0.3 million, net of tax, respectively, were included in accumulated other comprehensive income (loss). Significant management judgment is required in determining whether an other-than-temporary decline in the fair value of an investment exists. Changes in the Company’s assessment of the valuation of investments could materially impact future operating results and financial position. | ||||
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts | |||
Accounts receivables primarily include amount due from hospitals and distributors. The Company establishes allowances for doubtful accounts based on a review of the credit profiles of customers, contractual terms and conditions, current economic trends and historical collection experience. The allowance for doubtful accounts is reassessed each period based on management’s assessment of historical expected net collections and other collection indicators. | ||||
Inventories | Inventories | |||
Inventory, which includes material, labor and overhead costs, is stated at standard cost, which approximates actual cost, determined on a first-in, first-out basis, not in excess of market value. The cost basis of the Company’s inventory is reduced for any products that are considered excessive or obsolete based upon assumptions about future demand and market conditions. In the event actual demand for our inventory differs from our best estimates or we fail to receive necessary regulatory approvals, further reduction in our basis of inventory may become necessary. | ||||
Property and Equipment, Net | Property and Equipment, Net | |||
Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation of property and equipment is computed using the straight-line method over their estimated useful lives of two to five years. Leasehold improvements are amortized on a straight-line basis over the lesser of their useful life or the term of the lease. Depreciation expense was $2.6 million, $2.9 million and $3.3 million for the years ended December 31, 2014, 2013 and 2012, respectively. | ||||
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets | |||
The Company evaluates the recoverability of its long-lived assets in accordance with authoritative accounting guidance. When events or changes in circumstances indicate that the carrying value of long-lived assets may not be recoverable, the Company recognizes such impairment if the net book value of such assets exceeds the future undiscounted cash flows attributable to such assets. Should an impairment exist, the impairment loss would be measured based on the excess carrying value of the asset over the asset’s fair value or discounted estimates of future cash flows attributable to the assets. As of December 31, 2014, the Company had $2.3 million of property and equipment, net. If estimates or the related assumptions change in the future, the Company may record impairment charges to reduce the carrying value of certain groups of these assets. Changes in the valuation of long-lived assets could materially impact the Company’s operating results and financial position. | ||||
Advertising Expense | Advertising Expense | |||
The Company expenses advertising costs as incurred. Advertising costs are recorded in general, sales and marketing expenses within the accompanying consolidated statements of operations was $0.7 million for fiscal year 2014 and were immaterial for fiscal years 2013 and 2012. | ||||
Stock-Based Compensation | Stock-Based Compensation | |||
The Company accounts for share-based compensation plan using the fair value recognition and measurement provisions under U.S. GAAP. The Company’s share-based compensation cost is measured at the grant date, based on the fair value of the award, and is recognized as expense over the requisite service period. | ||||
The Black-Scholes option valuation model is used to determine the fair value of stock-based awards with the following assumptions | ||||
• | Expected Volatility. The Company’s estimate of volatility is based on the historical volatilities of its stock price. | |||
• | Expected Term. The Company estimates the expected term based on its historical settlement experience related to vesting and contractual terms while giving consideration to awards that have life cycles less than the contractual terms and vesting schedules in accordance with authoritative guidance. | |||
• | Risk-Free Interest Rate. The risk-free interest rate that the Company uses in the Black-Scholes option valuation model is the implied yield in effect at the time of option grant based on U.S. Treasury zero-coupon issues with a remaining term equivalent to the expected term of its option grants. For ESPP grants, the Company uses the 6-month Constant Maturity Treasury (“CMT”) rate. | |||
• | Dividend Yield. The Company has never paid any cash dividends on its common stock and it does not anticipate paying any cash dividends in the foreseeable future. Consequently, the Company uses a dividend yield of zero in the Black-Scholes option valuation model. | |||
In addition to the Black-Scholes assumptions noted above, the Company also estimates a forfeiture rate for its stock-based awards. The Company estimates its forfeiture rate based on an analysis of its actual forfeitures based on actual forfeiture experience, analysis of employee turnover behavior and other factors. The impact from any forfeiture rate adjustment would be recognized in full in the period of adjustment and if the actual number of future forfeitures differs from its estimates, the Company might be required to record adjustments to its stock-based compensation in future periods. | ||||
To the extent that future evidence regarding these variables is available and provides estimates that the Company determines are more indicative of actual trends, the Company may refine or change its approach to deriving these input estimates. These changes could significantly impact the stock-based compensation expense recorded in the future. | ||||
Research and Development | Research and Development | |||
Research and development costs are charged to expense as incurred. Research and development costs include, but are not limited to, payroll and other personnel expenses, prototype materials, laboratory supplies, and consulting costs. | ||||
Income Taxes | Income Taxes | |||
The Company accounts for income taxes using the liability method whereby deferred tax asset and liability account balances are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Valuation allowances are established to reduce deferred tax assets when management estimates, based on available objective evidence, that it is more likely than not that the benefit will not be realized for the deferred tax assets. The Company accounts for uncertainty in income taxes using a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. The Company recognizes interest and penalties related to unrecognized tax benefits as a component of income tax expense. As of December 31, 2014, the Company has no accrued interest or penalties related to uncertain tax positions. The Company does not anticipate that total unrecognized tax benefits will significantly change due to the settlement of audits and the expiration of statute of limitations periods in 2015. | ||||
Comprehensive Loss | Comprehensive Loss | |||
The Company follows the accounting standards for the reporting and presentation of comprehensive income (loss) and its components. In June 2011, the Financial Accounting Standards Board (“FASB”) issued new accounting guidance that revised the manner in which entities present comprehensive income in their financial statements. The new guidance requires entities to present comprehensive income either in a continuous statement of comprehensive income, which replaces the statement of operations, or in two separate, consecutive statements. The new guidance does not change the items that must be reported in other comprehensive income, nor does it require new disclosures. On January 1, 2012 The Company adopted new accounting guidance and presents comprehensive income (loss) in a separate statement. Comprehensive loss includes all changes in stockholders’ equity during a period from non-owner sources. Comprehensive loss for each of the years ended December 31, 2014, 2013, and 2012 was equal to net loss adjusted for unrealized gains and losses on investments, reclassifications of realized gains and losses on investments to other income (expense) and foreign currency translation adjustments. | ||||
Computation of Net Loss Per Share | Computation of Net Loss Per Share | |||
Basic net loss per share is computed by dividing net loss by the weighted-average number of common shares outstanding during the period. Diluted net loss per share is computed using the weighted-average number of shares and diluted potential shares outstanding during the period. Dilutive potential shares are excluded when the effect would be to reduce a net loss per share. The Company’s dilutive potential shares primarily consists of outstanding common stock options, warrants, estimated shares to be issued under the Company’s employee stock purchase plan and unvested restricted stock, which have not been included in the computation of diluted net loss per share for all yearly periods as the result would be anti-dilutive. | ||||
Recent Accounting Pronouncements | Recent Accounting Pronouncements | |||
In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606), which supersedes the revenue recognition requirements in ASC 605, Revenue Recognition. ASU 2014-09 is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. This new guidance is effective for annual reporting periods beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption is not permitted. The Company is currently assessing the impact of the adoption of ASU 2014-09 on its consolidated financial statements. | ||||
In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements—Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. The ASU provides guidance on determining when and how to disclose going-concern uncertainties in the financial statements. The new standard requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern within one year of the date the financial statements are issued. An entity must provide certain disclosures if “conditions or events raise substantial doubt about the entity’s ability to continue as a going concern.” The ASU applies to all entities and is effective for annual periods ending after December 15, 2016, and interim periods thereafter, with early adoption permitted. The Company has been assessing the going concern issue since 2010 on an interim and annual basis and will continue to assess whether the financial conditions based on this new guidance have an impact on the Company’s consolidated financial statements or footnotes. | ||||
In November 2014, the FASB issued ASU No. 2014-16, Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity (a consensus of the FASB Emerging Issues Task Force), which requires an entity to determine the nature of the host contract by considering the economic characteristics and risks of the entire hybrid financial instrument, including the embedded derivative feature that is being evaluated for separate accounting from the host contract, when evaluating whether the host contract is more akin to debt or equity. ASU 2014-16 is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. The effects of initially adopting the ASU is required to be applied on a modified retrospective basis to existing hybrid financial instruments issued in the form of a share as of the beginning of the fiscal year for which the amendments are effective. Retrospective application to all relevant prior periods is permitted. Early adoption, including adoption in an interim period, is permitted. The Company is currently assessing the impact of the adoption of ASU 2014-16 on its consolidated financial statements. |
Fair_Value_of_Assets_and_Liabi1
Fair Value of Assets and Liabilities (Tables) | 12 Months Ended | ||||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||||
Amortized Cost and Fair Value of Assets, with Gross Unrealized Gains and Losses | The amortized cost and fair value of assets, along with gross unrealized gains and losses, were as follows (in thousands): | ||||||||||||||||||||||||||||
Cash, Cash Equivalents, Short-term Investments and Restricted Cash | |||||||||||||||||||||||||||||
Amortized | Gross | Gross | Fair | Balance Sheet Classification | |||||||||||||||||||||||||
Cost | Unrealized | Unrealized | Value | ||||||||||||||||||||||||||
Gains | Losses | Cash and | Short-term | Restricted | |||||||||||||||||||||||||
cash | Investments | Cash | |||||||||||||||||||||||||||
Equivalents | |||||||||||||||||||||||||||||
December 31, 2014: | |||||||||||||||||||||||||||||
Cash | $ | 3,586 | $ | — | $ | — | $ | 3,586 | $ | 3,586 | $ | — | $ | — | |||||||||||||||
Money market funds | 26,318 | — | — | 26,318 | 20,942 | — | 5,376 | ||||||||||||||||||||||
Corporate equity securities | 1,572 | 401 | — | 1,973 | — | 1,973 | — | ||||||||||||||||||||||
$ | 31,476 | $ | 401 | $ | — | $ | 31,877 | $ | 24,528 | $ | 1,973 | $ | 5,376 | ||||||||||||||||
December 31, 2013: | |||||||||||||||||||||||||||||
Cash | $ | 1,665 | $ | — | $ | — | $ | 1,665 | $ | 1,665 | $ | — | $ | — | |||||||||||||||
Money market funds | 31,724 | — | — | 31,724 | 26,330 | — | 5,394 | ||||||||||||||||||||||
Corporate equity securities | 1,572 | 373 | — | 1,945 | — | 1,945 | — | ||||||||||||||||||||||
$ | 34,961 | $ | 373 | $ | — | $ | 35,334 | $ | 27,995 | $ | 1,945 | $ | 5,394 | ||||||||||||||||
Fair Value Hierarchy of Company's Assets and Liabilities | The fair value hierarchy of the Company’s assets and liabilities that are measured at fair value, by level, is as follows (in thousands): | ||||||||||||||||||||||||||||
Fair Value Measurements Using | |||||||||||||||||||||||||||||
Quoted Prices in | Significant other | Unobservable | Total | ||||||||||||||||||||||||||
Active Markets for | Observable | Inputs | |||||||||||||||||||||||||||
Identical Assets | Inputs | (Level 3 Inputs) | |||||||||||||||||||||||||||
(Level 1 Inputs) | (Level 2 Inputs) | ||||||||||||||||||||||||||||
December 31, 2014: | |||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||
Money market funds | $ | 26,318 | $ | — | $ | — | $ | 26,318 | |||||||||||||||||||||
Corporate equity securities | 1,973 | — | — | 1,973 | |||||||||||||||||||||||||
$ | 28,291 | $ | — | $ | — | $ | 28,291 | ||||||||||||||||||||||
December 31, 2013: | |||||||||||||||||||||||||||||
Money market funds | $ | 31,724 | $ | — | $ | — | $ | 31,724 | |||||||||||||||||||||
Corporate equity securities | 1,945 | — | — | 1,945 | |||||||||||||||||||||||||
$ | 33,669 | $ | — | $ | — | $ | 33,669 | ||||||||||||||||||||||
Balance_Sheet_Components_Table
Balance Sheet Components (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts (in thousands) | ||||||||||||
December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Balance at Beginning of the Year | $ | 554 | $ | 554 | $ | — | |||||||
Additions Charges to Cost and Expenses | 21 | — | 554 | ||||||||||
Write-offs | (475 | ) | — | — | |||||||||
Balance Before Recoveries | $ | 100 | $ | 554 | $ | 554 | |||||||
Less: Recoveries | (100 | ) | — | — | |||||||||
Balance at the End of the Year | $ | — | $ | 554 | $ | 554 | |||||||
Components of inventories, Net | Inventories (in thousands) | ||||||||||||
December 31, | |||||||||||||
2014 | 2013 | ||||||||||||
Raw materials | $ | 4,996 | $ | 4,167 | |||||||||
Work in process | 4,571 | 5,285 | |||||||||||
Finished goods | 1,925 | 2,751 | |||||||||||
Inventories | $ | 11,492 | $ | 12,203 | |||||||||
Property and equipment, net | Property and equipment, net (in thousands) | ||||||||||||
December 31, | |||||||||||||
2014 | 2013 | ||||||||||||
Furniture and leasehold improvements | $ | 11,455 | $ | 11,466 | |||||||||
Laboratory equipment | 11,374 | 10,209 | |||||||||||
Computer equipment and software | 2,911 | 2,850 | |||||||||||
25,740 | 24,525 | ||||||||||||
Less: Accumulated depreciation and amortization | (23,412 | ) | (20,884 | ) | |||||||||
Property and equipment, net | $ | 2,328 | $ | 3,641 | |||||||||
Accrued liabilities | Accrued liabilities (in thousands) | ||||||||||||
December 31, | |||||||||||||
2014 | 2013 | ||||||||||||
Accrued salaries, commission, bonus and benefits | $ | 2,835 | $ | 1,867 | |||||||||
Accrued royalties | 594 | 796 | |||||||||||
Accrued legal and other professional fees | 169 | 183 | |||||||||||
Clinical related accruals | 394 | 290 | |||||||||||
Tax accruals | 274 | 261 | |||||||||||
Other accrued expenses | 676 | 537 | |||||||||||
Total | $ | 4,942 | $ | 3,934 | |||||||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Rent expense on a straight-line basis | Rent expense on a straight-line basis was as follows (in thousands): | ||||||||||||
Years Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Rent expense | $ | 2,613 | $ | 2,310 | $ | 2,280 | |||||||
Future Minimum Payments under Operating Leases | At December 31, 2014, future minimum payments under the leases are as follows (in thousands): | ||||||||||||
Years ended December 31, | Future Minimum | ||||||||||||
Lease Payments | |||||||||||||
2015 | $ | 2,162 | |||||||||||
2016 | 2,141 | ||||||||||||
2017 | 2,205 | ||||||||||||
2018 | 2,271 | ||||||||||||
2019 | 2,144 | ||||||||||||
Thereafter | — | ||||||||||||
Total | $ | 10,923 | |||||||||||
Longterm_Debt_Tables
Long-term Debt (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Future Annual Payments Due on Amounts Outstanding | Future annual payments due on the debt outstanding as of December 31, 2014 are as follows (in thousands): | ||||
2015 | $ | 3,879 | |||
2016 | 4,009 | ||||
2017 | 41,782 | ||||
Total remaining payments | 49,670 | ||||
Less: Amount representing interest | (15,285 | ) | |||
34,385 | |||||
Less: Current portion of long-term debt | — | ||||
Long-term debt, net of current portion | $ | 34,385 | |||
Stockholders_Equity_Tables
Stockholders' Equity (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Component of Accumulated Other Comprehensive Income (Loss), Net of Tax | The component of accumulated other comprehensive income (loss), net of tax for years ended December 31, 2014 and 2013 are as follows (in thousands): | ||||||||||||
Unrealized | Foreign | Total | |||||||||||
Gains | Currency | ||||||||||||
(Losses) | Translation | ||||||||||||
on | Gains | ||||||||||||
Securities | (Losses) | ||||||||||||
December 31, 2014: | |||||||||||||
Beginning balance | $ | 373 | $ | (13 | ) | $ | 360 | ||||||
Other comprehensive income before reclassification | 19 | (74 | ) | (55 | ) | ||||||||
Reclassification from accumulated other comprehensive income | — | — | — | ||||||||||
Net current-period other comprehensive loss | 19 | (74 | ) | (55 | ) | ||||||||
Ending Balance | $ | 392 | $ | (87 | ) | $ | 305 | ||||||
December 31, 2013: | |||||||||||||
Beginning balance | $ | (530 | ) | $ | (48 | ) | $ | (578 | ) | ||||
Other comprehensive income before reclassification | 276 | 35 | $ | 311 | |||||||||
Reclassification from accumulated other comprehensive income | 627 | — | 627 | ||||||||||
Net current-period other comprehensive loss | 903 | 35 | 938 | ||||||||||
Ending Balance | $ | 373 | $ | (13 | ) | $ | 360 | ||||||
Stockbased_Compensation_Tables
Stock-based Compensation (Tables) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Summary of Option Activity Under Company's 2002 Stock Option Plan and 2006 Plan for 2014 | Option activity under both the 2002 Plan and the 2006 Plan for 2014 is as follows: | ||||||||||||||||||||
Shares | Weighted- | Weighted- | Aggregate | ||||||||||||||||||
Average | Average | Intrinsic | |||||||||||||||||||
Exercise | Remaining | Value | |||||||||||||||||||
Price | Contractual | ||||||||||||||||||||
Term | |||||||||||||||||||||
(in thousands) | (in years) | (in thousands) | |||||||||||||||||||
Balance at January 1, 2014 | 7,779 | $ | 3.24 | 4.76 | $ | 169 | |||||||||||||||
Granted | 6,199 | $ | 1.1 | ||||||||||||||||||
Exercised | (1,239 | ) | $ | 2.09 | |||||||||||||||||
Cancelled | (3,548 | ) | $ | 3.94 | |||||||||||||||||
Balance at December 31, 2014 | 9,191 | $ | 1.69 | 7.8 | $ | — | |||||||||||||||
Options vested and expected to vest at December 31, 2014 | 8,995 | $ | 1.66 | 7.82 | $ | — | |||||||||||||||
Options vested at December 31, 2014 | 2,669 | $ | 2.98 | 4.77 | $ | — | |||||||||||||||
Assumptions Used to Estimate Grant Date Fair Values of Stock Options | The estimated grant date fair values of the employee stock options were calculated using the following assumptions: | ||||||||||||||||||||
Years Ended December 31, | |||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||
Expected volatility | 72%-74% | 77%-89% | 61%-90% | ||||||||||||||||||
Risk-free interest rate | 1.1%-1.5% | 0.6%-1.5% | 0.5%-1.0% | ||||||||||||||||||
Expected term (in years) | 4.00-4.34 | 4.38-4.57 | 4.29-4.75 | ||||||||||||||||||
Dividend yield | 0% | 0% | 0% | ||||||||||||||||||
Options Outstanding, Vested and Currently Exercisable By Exercise Price under Both 2002 Plan And 2006 Plan | The options outstanding, vested and currently exercisable by exercise price under both the 2002 Plan and the 2006 Plan at December 31, 2014 are as follows (share options in thousands): | ||||||||||||||||||||
Options Outstanding | Options Exercisable and Vested | ||||||||||||||||||||
Exercise Price | Number of | Weighted- | Number of | Weighted- | Weighted- | ||||||||||||||||
Options | Average | Options | Average | Average | |||||||||||||||||
Remaining | Exercise Price | Remaining | |||||||||||||||||||
Contractual | Contractual | ||||||||||||||||||||
Life | Life | ||||||||||||||||||||
(in years) | (in years) | ||||||||||||||||||||
$0.40-$1.96 | 5,835 | 9.09 | 664 | $ | 1.59 | 5.16 | |||||||||||||||
$2.01-$4.88 | 3,189 | 5.78 | 1,838 | $ | 2.6 | 4.98 | |||||||||||||||
$7.75-$12.15 | 99 | 1.3 | 99 | $ | 8.7 | 1.3 | |||||||||||||||
$15.25-$18.95 | 68 | 0.21 | 68 | $ | 18.52 | 0.21 | |||||||||||||||
9,191 | 7.79 | 2,669 | $ | 2.98 | 4.77 | ||||||||||||||||
Summary of Restricted Stock Unit Activity | Restricted stock unit activity under the 2006 Plan is as follows: | ||||||||||||||||||||
Restricted Stock | Weighted- | ||||||||||||||||||||
Units | Average Grant- | ||||||||||||||||||||
Date Fair Value | |||||||||||||||||||||
(in thousands) | |||||||||||||||||||||
Balance at January 1, 2014 | 1,318 | $ | 1.99 | ||||||||||||||||||
Awarded | 1,014 | $ | 1.89 | ||||||||||||||||||
Vested | (896 | ) | $ | 1.99 | |||||||||||||||||
Cancelled | (595 | ) | $ | 2.1 | |||||||||||||||||
Balance at December 31, 2014 | 841 | $ | 1.8 | ||||||||||||||||||
Assumptions Used to Estimate Grant Date Fair Values of Shares Issued Under the ESPP | The estimated fair values of the shares issued under the Stock Purchase Plan were calculated using the following assumptions: | ||||||||||||||||||||
Years Ended December 31, | |||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||
Expected volatility | 75%-111% | 57%-99% | 62%-110% | ||||||||||||||||||
Risk-free interest rate | 0.10% | 0.10% | 0.10% | ||||||||||||||||||
Expected term (in years) | 0.5 | 0.5 | 0.5 | ||||||||||||||||||
Dividend yield | 0% | 0% | 0% | ||||||||||||||||||
Total Stock-based Compensation | Total stock-based compensation expense was allocated to cost of revenues, research and development and selling, general and administrative expense as follows (in thousands): | ||||||||||||||||||||
Years Ended December 31, | |||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||
Cost of revenues | $ | 230 | $ | 402 | $ | 319 | |||||||||||||||
Research and development | 704 | 1,320 | 444 | ||||||||||||||||||
Selling, general and administrative | 1,898 | 3,167 | 2,119 | ||||||||||||||||||
Total | $ | 2,832 | $ | 4,889 | $ | 2,882 | |||||||||||||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Summary of Company's Pre-tax Loss | The Company’s pre-tax loss consists of the following (in thousands): | ||||||||||||
Years Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Domestic | $ | (54,457 | ) | $ | (55,877 | ) | $ | (22,343 | ) | ||||
Foreign | 239 | 270 | 312 | ||||||||||
Pre-tax loss | $ | (54,218 | ) | $ | (55,607 | ) | $ | (22,031 | ) | ||||
Summary of Company's Effective Tax Rate Differs from U.S. Federal Statutory Rate | The Company’s effective tax rate differs from the U.S. federal statutory rate as follows: | ||||||||||||
Years Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Federal tax benefit at statutory rate | (34 | )% | (34 | )% | (34 | )% | |||||||
Permanent difference due to non-deductible expenses | 2 | % | 1 | % | 1 | % | |||||||
State tax benefit, net of federal impact | — | % | — | % | — | % | |||||||
Change in deferred tax asset valuation allowance | 33 | % | 33 | % | 32 | % | |||||||
General business credits | (1 | )% | — | % | — | % | |||||||
Effective tax rate | — | % | — | % | (1 | )% | |||||||
Summary of Tax Effects of Temporary Differences and Carryforwards That Give Rise to Significant Portions of Deferred Tax Assets | The tax effects of temporary differences and carryforwards that give rise to significant portions of the deferred tax assets are as follows (in thousands): | ||||||||||||
December 31, | |||||||||||||
2014 | 2013 | ||||||||||||
Net operating loss carryforwards | $ | 108,245 | $ | 93,744 | |||||||||
Research and development credits | 10,564 | 9,682 | |||||||||||
Capitalized research and development | 19,926 | 19,107 | |||||||||||
Fixed assets | 2,464 | 2,222 | |||||||||||
Stock-based compensation | 3,214 | 2,478 | |||||||||||
Accruals, reserves and other | 2,259 | 2,061 | |||||||||||
Intangibles | 857 | 1,092 | |||||||||||
147,529 | 130,386 | ||||||||||||
Less: Valuation allowance | (147,529 | ) | (130,386 | ) | |||||||||
Net deferred tax asset | $ | — | $ | — | |||||||||
Reconciliation of Beginning and Ending Balance of Unrecognized Tax Benefits | A reconciliation of the beginning and ending balance of unrecognized tax benefits is as follows (in thousands): | ||||||||||||
Years Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Balance at beginning of period | $ | 3,864 | $ | 3,358 | $ | 1,697 | |||||||
Additions based on tax positions related to the current year | 384 | 301 | 122 | ||||||||||
Additions based on tax positions related to prior years | — | 205 | 1,539 | ||||||||||
Reduction based on tax positions of prior years | (28 | ) | — | — | |||||||||
Balance at end of period | $ | 4,220 | $ | 3,864 | $ | 3,358 | |||||||
Net_Loss_per_Share_Tables
Net Loss per Share (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Computation of Basic and Diluted Net Income (Loss) Per Share | The following table sets forth the computation of basic and diluted net loss per share (in thousands, except per share data): | ||||||||||||
Years Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Net loss | $ | (54,246 | ) | $ | (55,722 | ) | $ | (22,145 | ) | ||||
Shares used to calculated basic and diluted net loss per share | 117,233 | 79,052 | 62,472 | ||||||||||
Basic and diluted net loss per share | $ | (0.46 | ) | $ | (0.70 | ) | $ | (0.35 | ) | ||||
Common Stock Equivalents that are Not Included In the Calculation of Diluted Net Loss Per Share | The following securities that could potentially dilute basic net loss per share are not included in the calculation of diluted net loss per share because to do so would be anti-dilutive as of the end of each period presented (in thousands): | ||||||||||||
December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Stock options outstanding | 9,191 | 7,779 | 7,176 | ||||||||||
Unvested restricted stock units | 841 | 1,318 | 1,365 | ||||||||||
Estimated shares to be issued under the employee stock purchase plan | 126 | 41 | 31 | ||||||||||
Warrants | 9,269 | 34,807 | 661 |
Segment_Information_Tables
Segment Information (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Information Regarding Total Revenue | Information regarding total revenue is as follows (in thousands): | ||||||||||||
Years ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Revenues: | |||||||||||||
United States | $ | 10,041 | $ | 8,580 | $ | 8,197 | |||||||
International (1) | 9,454 | 8,402 | 9,439 | ||||||||||
Total revenues | $ | 19,495 | $ | 16,982 | $ | 17,636 | |||||||
-1 | For fiscal year 2014, only Japan within international accounted for 13% of total revenues. No single location within international accounted for greater than 10% of total revenues in fiscal years 2013 and 2012. |
Quarterly_Data_unaudited_Table
Quarterly Data (unaudited) (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Summary of certain unaudited quarterly information for the eight quarters | The following table represents certain unaudited quarterly information for the eight quarters ended December 31, 2014. This data has been derived from unaudited consolidated financial statements that, in the opinion of the Company’s management, include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of such information when read in conjunction with the Company’s annual audited consolidated financial statements and notes thereto appearing elsewhere in this report. These operating results are not necessarily indicative of results for any future period (in thousands, except per share data): | ||||||||||||||||
First | Second | Third | Fourth | ||||||||||||||
Quarter | Quarter | Quarter | Quarter | ||||||||||||||
-2 | -1 | ||||||||||||||||
2014:00:00 | |||||||||||||||||
Revenues | $ | 3,699 | $ | 6,887 | $ | 3,877 | $ | 5,032 | |||||||||
Gross profit | 398 | 1,902 | 702 | 2 | |||||||||||||
Net loss | (14,445 | ) | (12,290 | ) | (15,594 | ) | (11,917 | ) | |||||||||
Basic net loss per share | (0.14 | ) | (0.11 | ) | (0.13 | ) | (0.09 | ) | |||||||||
Diluted net loss per share | (0.14 | ) | (0.11 | ) | (0.13 | ) | (0.09 | ) | |||||||||
2013:00:00 | |||||||||||||||||
Revenues | $ | 2,951 | $ | 3,343 | $ | 5,068 | $ | 5,620 | |||||||||
Gross profit | 469 | 576 | 1,340 | 1,116 | |||||||||||||
Net loss | (17,187 | ) | (13,446 | ) | (13,201 | ) | (11,888 | ) | |||||||||
Basic net loss per share | (0.26 | ) | (0.20 | ) | (0.16 | ) | (0.12 | ) | |||||||||
Diluted net loss per share | (0.26 | ) | (0.20 | ) | (0.16 | ) | (0.12 | ) | |||||||||
-1 | Net income and basic and diluted net income per share for the third quarter of 2014 include the impact of the warrant exchange of $2.9 million. | ||||||||||||||||
-2 | Net income and basic and diluted net income per share for the first quarter of 2013 include the impact of the loss on settlement of litigation of $4.5 million. |
The_Company_Additional_Informa
The Company - Additional Information (Detail) (USD $) | 0 Months Ended | |||
Mar. 11, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Aug. 23, 2013 | |
Description of Business [Line Items] | ||||
Accumulated net profit or loss from inception | ($406,910,000) | ($352,664,000) | ||
Cash, cash equivalents, short-term investments and restricted cash | 31,900,000 | |||
Subsequent Event | ||||
Description of Business [Line Items] | ||||
Gross proceed from sale of convertible preferred stock | 35,000,000 | |||
White Oak Loan Agreement | ||||
Description of Business [Line Items] | ||||
Minimum liquidity requirement amount | 15,000,000 | 15,000,000 | ||
White Oak Loan Agreement | Cash, Cash Equivalents and Investments | ||||
Description of Business [Line Items] | ||||
Minimum liquidity requirement amount | 13,000,000 | 13,000,000 | ||
White Oak Loan Agreement | Accounts Receivable | ||||
Description of Business [Line Items] | ||||
Minimum liquidity requirement amount | 2,000,000 | 2,000,000 | ||
Luna Innovations Incorporated | Restricted Cash and Cash Equivalents | ||||
Description of Business [Line Items] | ||||
Minimum liquidity requirement amount | $5,000,000 | $5,000,000 |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies - Additional Information (Detail) (USD $) | 12 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Aug. 23, 2013 | |
Entity | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Deferred and amortized service period | 1 year | |||
Number of financial institutions in which cash deposited | 2 | |||
Depreciation expense | $2,600,000 | $2,900,000 | $3,300,000 | |
Property and equipment, net | 2,328,000 | 3,641,000 | ||
Advertising costs | 700,000 | |||
Accrued interest or penalties | 0 | |||
Luna Innovations Incorporated | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Pre-tax losses related to a decline in the value of our investment | 600,000 | |||
Available-for-sale securities, other than temporary impairment recorded loss in other expense | 0 | 600,000 | 0 | |
Net unrealized gains on investments | 20,000 | 300,000 | ||
Restricted Cash and Cash Equivalents | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Minimum liquidity requirement amount | $5,000,000 | |||
Minimum | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Estimated useful lives | 2 years | |||
Maximum | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Estimated useful lives | 5 years | |||
Customer concentration risk | Accounts Receivable | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Number of major customers | 4 | 3 | ||
Customer concentration risk | Accounts Receivable | Customer 1 | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Concentration risk, percentage | 26.00% | 26.00% | ||
Customer concentration risk | Accounts Receivable | Customer 2 | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Concentration risk, percentage | 14.00% | 22.00% | ||
Customer concentration risk | Accounts Receivable | Customer 3 | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Concentration risk, percentage | 12.00% | 10.00% | ||
Customer concentration risk | Accounts Receivable | Customer 4 | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Concentration risk, percentage | 12.00% | |||
Customer concentration risk | Sales | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Number of major customers | 2 | 1 | ||
Customer concentration risk | Sales | Customer 1 | Minimum | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Concentration risk, percentage | 13.00% | 10.00% | ||
Customer concentration risk | Sales | Customer 2 | Minimum | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Concentration risk, percentage | 10.00% | |||
Customer concentration risk | Sales | Single Customer | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Number of major customers | 1 | 1 | ||
Concentration risk, percentage | 10.00% | 14.00% |
Amortized_Cost_and_Fair_Value_
Amortized Cost and Fair Value of Assets, with Gross Unrealized Gains and Losses (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Thousands, unless otherwise specified | ||||
Cash Cash Equivalents And Short Term Investments [Line Items] | ||||
Amortized Cost | $31,476 | $34,961 | ||
Gross Unrealized Gains | 401 | 373 | ||
Gross Unrealized Losses | 0 | 0 | ||
Fair Value | 31,877 | 35,334 | ||
Cash and cash equivalents | 24,528 | 27,995 | 32,749 | 36,520 |
Short-term investments | 1,973 | 1,945 | ||
Restricted cash | 5,376 | 5,394 | ||
Cash | ||||
Cash Cash Equivalents And Short Term Investments [Line Items] | ||||
Amortized Cost | 3,586 | 1,665 | ||
Gross Unrealized Losses | 0 | 0 | ||
Fair Value | 3,586 | 1,665 | ||
Cash and cash equivalents | 3,586 | 1,665 | ||
Money Market Funds | ||||
Cash Cash Equivalents And Short Term Investments [Line Items] | ||||
Amortized Cost | 26,318 | 31,724 | ||
Gross Unrealized Losses | 0 | 0 | ||
Fair Value | 26,318 | 31,724 | ||
Cash and cash equivalents | 20,942 | 26,330 | ||
Restricted cash | 5,376 | 5,394 | ||
Corporate Equity Securities | ||||
Cash Cash Equivalents And Short Term Investments [Line Items] | ||||
Amortized Cost | 1,572 | 1,572 | ||
Gross Unrealized Gains | 401 | 373 | ||
Gross Unrealized Losses | 0 | 0 | ||
Fair Value | 1,973 | 1,945 | ||
Short-term investments | $1,973 | $1,945 |
Fair_Value_Hierarchy_of_Compan
Fair Value Hierarchy of Company's Assets (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | $28,291 | $33,669 |
Money Market Funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 26,318 | 31,724 |
Corporate Equity Securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 1,973 | 1,945 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 28,291 | 33,669 |
Level 1 | Money Market Funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | 26,318 | 31,724 |
Level 1 | Corporate Equity Securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets | $1,973 | $1,945 |
Fair_Value_of_Assets_and_Liabi2
Fair Value of Assets and Liabilities - Additional Information (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Fair Value, Measurement Inputs, Disclosure [Line Items] | |||
Securities in loss position for longer than 12 months | 0 | ||
Long term debt, fair value | $34.20 | ||
Luna Innovations Incorporated | |||
Fair Value, Measurement Inputs, Disclosure [Line Items] | |||
Available-for-sale securities, other than temporary impairment recorded loss in other expense | $0 | $0.60 | $0 |
Allowance_for_Doubtful_Account
Allowance for Doubtful Accounts (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Allowance for Doubtful Accounts | |||
Balance at Beginning of the Year | $554 | $554 | |
Additions Charges to Cost and Expenses | 21 | 554 | |
Write-offs | -475 | ||
Balance Before Recoveries | 100 | 554 | 554 |
Less: Recoveries | -100 | ||
Balance at the End of the Year | $0 | $554 | $554 |
Components_of_Inventories_Net_
Components of Inventories, Net (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Inventory [Line Items] | ||
Raw materials | $4,996 | $4,167 |
Work in process | 4,571 | 5,285 |
Finished goods | 1,925 | 2,751 |
Inventories | $11,492 | $12,203 |
Property_and_Equipment_Net_Det
Property and Equipment, Net (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $25,740 | $24,525 |
Less: Accumulated depreciation and amortization | -23,412 | -20,884 |
Property and equipment, net | 2,328 | 3,641 |
Furniture and leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 11,455 | 11,466 |
Laboratory equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 11,374 | 10,209 |
Computer equipment and software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $2,911 | $2,850 |
Components_of_Accrued_Liabilit
Components of Accrued Liabilities (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Schedule of Accrued Liabilities [Line Items] | ||
Accrued salaries, commission, bonus and benefits | $2,835 | $1,867 |
Accrued royalties | 594 | 796 |
Accrued legal and other professional fees | 169 | 183 |
Clinical related accruals | 394 | 290 |
Tax accruals | 274 | 261 |
Other accrued expenses | 676 | 537 |
Total | $4,942 | $3,934 |
Agreements_with_Intuitive_Surg1
Agreements with Intuitive Surgical - Additional Information (Detail) (USD $) | 0 Months Ended | 1 Months Ended | 12 Months Ended | ||
Jul. 30, 2013 | Oct. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2012 | Dec. 31, 2013 | |
Licenses Agreements [Line Items] | |||||
Proceeds from licensing fees | $20,000,000 | ||||
Stock purchase agreement to sell shares | 28,455,284 | 5,291,005 | |||
Common stock agreement purchase price | 10,000,000 | ||||
Agreement amendment period | 3 years | ||||
Payment for licensing of intellectual property | 20,000,000 | ||||
Stock purchase agreement recorded in common stock and additional paid-in capital | 10,000,000 | ||||
Intuitive Surgical Inc | |||||
Licenses Agreements [Line Items] | |||||
Cost related to royalty obligations | 300,000 | 200,000 | 200,000 | ||
Intuitive Surgical Inc | Minimum | |||||
Licenses Agreements [Line Items] | |||||
Royalty obligations per year | 200,000 |
Agreements_with_Philips_Additi
Agreements with Philips - Additional Information (Detail) (USD $) | 12 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Feb. 28, 2011 | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||
Technology commercialization cash payments to be received in future | $78,000,000 | |||
Potential future payment from sublicensing technology under agreement | Two-thirds | |||
Potential future payment based on royalty obligation under agreement | One-third | |||
FOSSL-related royalty obligations | Between 2014 and 2020 | |||
Koninklijke Philips Electronics Nv | ||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||
Royalty payment obligation | 2017-10 | |||
Cost related to royalty obligations | 1,200,000 | 900,000 | 600,000 | |
Koninklijke Philips Electronics Nv | Minimum | ||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||
Royalty obligations | 0 |
Commitments_and_Contingencies_1
Commitments and Contingencies - Additional Information (Detail) (USD $) | 0 Months Ended | 3 Months Ended | 12 Months Ended | |||
Dec. 19, 2013 | 9-May-13 | Mar. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2012 | |
Other Commitments [Line Items] | ||||||
Loss contingency settlement agreement consideration | $8,500,000 | |||||
Loss contingency settlement value funded by insurer and other sources | 4,000,000 | |||||
Settlement paid in stock | 4,250,000 | |||||
Settlement paid in cash | 250,000 | |||||
Paid in common stock for settlement | The Company would fund the remaining portion by issuing $4.25 million worth of the Company's common stock, the number of shares to be determined based on the average closing price of the common stock for the 10 trading days preceding final Court approval of the settlement of the class action, and paying | |||||
Loss on settlement of litigation | -4,500,000 | -4,500,000 | ||||
Issuance of common shares in connection with the litigation settlement | 2,298,539 | |||||
Number of trading days | 10 days | |||||
Common stock issued related to legal settlement per share | $1.85 | |||||
Mitsubishi | ||||||
Other Commitments [Line Items] | ||||||
Reduction royalty obligation | 55,000 | |||||
Royalty obligation expiration Year | 2018 | |||||
Cost related to royalty obligations | 100,000 | 100,000 | 100,000 | |||
Mitsubishi | Minimum | ||||||
Other Commitments [Line Items] | ||||||
Royalty obligations per year | 100,000 | |||||
California | ||||||
Other Commitments [Line Items] | ||||||
Operating lease expiration year | 31-Jan-20 | |||||
Operating lease extended period | 5 years | |||||
London, England | ||||||
Other Commitments [Line Items] | ||||||
Operating lease expiration year | 30-Jun-20 | |||||
Operating lease area leased for office space | 3,300 | |||||
Operating lease expiration year | 2015 | |||||
Exit cost | $100,000 |
Rent_Expense_Detail
Rent Expense (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Leases [Line Items] | |||
Rent expense | $2,613 | $2,310 | $2,280 |
Future_Minimum_Payments_under_
Future Minimum Payments under Operating Leases (Detail) (USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Operating Leased Assets [Line Items] | |
2015 | $2,162 |
2016 | 2,141 |
2017 | 2,205 |
2018 | 2,271 |
2019 | 2,144 |
Thereafter | 0 |
Total | $10,923 |
Long_Term_Debt_Additional_Info
Long - Term Debt - Additional Information (Detail) (USD $) | 12 Months Ended | 1 Months Ended | 12 Months Ended | 0 Months Ended | ||
Dec. 31, 2013 | Aug. 31, 2013 | Dec. 31, 2014 | Aug. 23, 2013 | Jul. 30, 2013 | Dec. 31, 2011 | |
Debt Instrument [Line Items] | ||||||
Exercise price of common stock warrants | $0.13 | |||||
Loss on extinguishment of debt | ($1,935,000) | |||||
Oxford | ||||||
Debt Instrument [Line Items] | ||||||
Loan and security agreement | 30,000,000 | |||||
Interest rate on pay off obligation | 9.45% | |||||
Interest payment on the original principal | 3.95% | |||||
Common stock warrants issued | 660,793 | |||||
Exercise price of common stock warrants | $2.27 | |||||
Expiration date of warrants | Dec-18 | |||||
Payment of final interest balloon | 1,200,000 | |||||
Loss on extinguishment of debt | -1,900,000 | |||||
Unamortized discount from warrants and issuance costs | 500,000 | |||||
Oxford | Prepayment Penalty | ||||||
Debt Instrument [Line Items] | ||||||
Loss on extinguishment of debt before write-off of unamortized costs | -900,000 | |||||
Oxford | Accrued Balloon Payment | ||||||
Debt Instrument [Line Items] | ||||||
Loss on extinguishment of debt before write-off of unamortized costs | -500,000 | |||||
White Oak Loan Agreement | ||||||
Debt Instrument [Line Items] | ||||||
Loan and security agreement | 33,000,000 | |||||
Loan and security agreement, due date | 30-Dec-17 | |||||
Capitalized debt issue costs | 1,500,000 | |||||
Administration and monitoring fee | 32,000 | |||||
Amortization of debt issuance costs | 100,000 | 400,000 | ||||
Minimum liquidity requirement amount | 15,000,000 | 15,000,000 | ||||
White Oak Loan Agreement | Cash, Cash Equivalents and Investments | ||||||
Debt Instrument [Line Items] | ||||||
Minimum liquidity requirement amount | 13,000,000 | 13,000,000 | ||||
White Oak Loan Agreement | Accounts Receivable | ||||||
Debt Instrument [Line Items] | ||||||
Minimum liquidity requirement amount | 2,000,000 | 2,000,000 | ||||
White Oak Loan Agreement | Interest Payment in Cash | ||||||
Debt Instrument [Line Items] | ||||||
Loan and security agreement, interest rate | 11.00% | |||||
White Oak Loan Agreement | Payment in Kind (PIK) | ||||||
Debt Instrument [Line Items] | ||||||
Loan and security agreement, interest rate | 3.00% | |||||
White Oak Loan Agreement | Payment to Lender Agent | ||||||
Debt Instrument [Line Items] | ||||||
Capitalized debt issue costs | 700,000 | |||||
White Oak Loan Agreement | Payment to Placement Agent | ||||||
Debt Instrument [Line Items] | ||||||
Capitalized debt issue costs | 300,000 | |||||
White Oak Loan Agreement | Principal Prepaid Before Third Anniversary | ||||||
Debt Instrument [Line Items] | ||||||
Prepayment fee of the principal | 3.50% | |||||
White Oak Loan Agreement | Principal Prepaid After Third Anniversary | ||||||
Debt Instrument [Line Items] | ||||||
Prepayment fee of the principal | 1.00% | |||||
Luna Innovations Incorporated | Restricted Cash and Cash Equivalents | ||||||
Debt Instrument [Line Items] | ||||||
Minimum liquidity requirement amount | 5,000,000 | $5,000,000 |
Future_Annual_Payments_Due_on_
Future Annual Payments Due on Amounts Outstanding (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Debt Instrument [Line Items] | ||
2015 | $3,879 | |
2016 | 4,009 | |
2017 | 41,782 | |
Total remaining payments | 49,670 | |
Less: Amount representing interest | -15,285 | |
Long-term debt, Net Total | 34,385 | |
Total remaining payments | 49,670 | |
Less: Current portion of long-term debt | 0 | |
Long-term debt, net of current portion | $34,385 | $33,358 |
Stockholders_Equity_Additional
Stockholders' Equity - Additional Information (Detail) (USD $) | 0 Months Ended | 1 Months Ended | 3 Months Ended | 12 Months Ended | 3 Months Ended | 0 Months Ended | 1 Months Ended | |||
Jul. 30, 2013 | Mar. 31, 2013 | Oct. 31, 2012 | Sep. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Mar. 31, 2014 | Jul. 30, 2014 | Aug. 31, 2014 | |
Stockholders Equity Note [Line Items] | ||||||||||
Maximum common stock offering amount under equity sale agreement | $25,000,000 | |||||||||
Securities purchase agreement to sell shares | 28,455,284 | 5,291,005 | ||||||||
Common stock per warrant price | $1.23 | |||||||||
Common Stock issuable upon exercise of warrants | 34,146,339 | 26,728,369 | ||||||||
Common stock per warrant price | $0.13 | |||||||||
Proceeds from issuance of common stock and warrants | 39,300,000 | 39,268,000 | 10,000,000 | |||||||
Placement fees and offering costs related to issuance of common stock and warrants | 2,100,000 | |||||||||
Restricted period for resales of common stock | 1 year | |||||||||
Warrant exchange | 2,900,000 | 2,914,000 | ||||||||
Luna Innovations Incorporated | ||||||||||
Stockholders Equity Note [Line Items] | ||||||||||
Available-for-sale securities, other than temporary impairment recorded loss in other expense | 0 | 600,000 | 0 | |||||||
Exchange Agreement | ||||||||||
Stockholders Equity Note [Line Items] | ||||||||||
Common Stock issuable upon exercise of warrants | 26,728,369 | |||||||||
Series A Warrants | ||||||||||
Stockholders Equity Note [Line Items] | ||||||||||
Common Stock issuable upon exercise of warrants | 11,382,113 | |||||||||
Common stock per warrant price | $1.23 | |||||||||
Number of warrants exercised | 11,400,000 | |||||||||
Gross proceed from exercise of warrants | 14,000,000 | |||||||||
Series B Warrant | ||||||||||
Stockholders Equity Note [Line Items] | ||||||||||
Common Stock issuable upon exercise of warrants | 11,382,113 | |||||||||
Common stock per warrant price | $1.50 | |||||||||
Expiration date of warrants | Aug-15 | |||||||||
Series B Warrant | Exchange Agreement | ||||||||||
Stockholders Equity Note [Line Items] | ||||||||||
Common Stock issuable upon exercise of warrants | 10,221,173 | |||||||||
Series C Warrant | ||||||||||
Stockholders Equity Note [Line Items] | ||||||||||
Common Stock issuable upon exercise of warrants | 11,382,113 | |||||||||
Common stock per warrant price | $2 | |||||||||
Expiration date of warrants | Aug-15 | |||||||||
Series C Warrant | Exchange Agreement | ||||||||||
Stockholders Equity Note [Line Items] | ||||||||||
Common Stock issuable upon exercise of warrants | 10,221,173 | |||||||||
Series B/C Exchange Warrants | Exchange Agreement | ||||||||||
Stockholders Equity Note [Line Items] | ||||||||||
Common Stock issuable upon exercise of warrants | 20,442,346 | |||||||||
Common stock per warrant price | 1.13 | |||||||||
Gross proceed from exercise of warrants | 23,100,000 | |||||||||
Period at which warrants subject to mandatory exercise after issuance | 14 days | |||||||||
Series D Warrants | Exchange Agreement | ||||||||||
Stockholders Equity Note [Line Items] | ||||||||||
Common Stock issuable upon exercise of warrants | 6,286,023 | |||||||||
Common stock per warrant price | 1.13 | |||||||||
Gross proceed from exercise of warrants | 7,100,000 | |||||||||
Warrants exercise period | 5 years |
Component_of_Accumulated_Other
Component of Accumulated Other Comprehensive Income (Loss), Net of Tax (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Accumulated other comprehensive income (loss), beginning balance | $360 | ($578) | |
Other comprehensive income before reclassification | -55 | 311 | |
Reclassification from accumulated other comprehensive income | 627 | ||
Change in other comprehensive income (loss) | -55 | 938 | -697 |
Accumulated other comprehensive income (loss), ending balance | 305 | 360 | -578 |
Unrealized Gains (Losses) on Securities | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Accumulated other comprehensive income (loss), beginning balance | 373 | -530 | |
Other comprehensive income before reclassification | 19 | 276 | |
Reclassification from accumulated other comprehensive income | 627 | ||
Change in other comprehensive income (loss) | 19 | 903 | |
Accumulated other comprehensive income (loss), ending balance | 392 | 373 | |
Foreign Currency Translation Gains (Losses) | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Accumulated other comprehensive income (loss), beginning balance | -13 | -48 | |
Other comprehensive income before reclassification | -74 | 35 | |
Change in other comprehensive income (loss) | -74 | 35 | |
Accumulated other comprehensive income (loss), ending balance | ($87) | ($13) |
StockBased_Compensation_Additi
Stock-Based Compensation - Additional Information (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percentage of common shares outstanding | 4.00% | ||
Weighted-average grant-date fair value of options granted | $0.62 | $1.25 | $1.31 |
Total fair value of options vested | $1,900,000 | $2,600,000 | $1,500,000 |
Total unamortized stock-based compensation related to unvested stock options | 3,900,000 | ||
Weighted-average recognition period, unvested stock options | 2 years 10 months 2 days | ||
Total intrinsic value of stock options exercised | 600,000 | 19,000 | 100,000 |
Stock-based compensation | 2,832,000 | 4,889,000 | 2,882,000 |
Reduction in Stock based compensation expense | 700,000 | ||
Executive Officer | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Restricted Stock Units, Awarded | 414,070 | ||
Restricted Stock Units, Cancelled | 111,940 | ||
Stock-based compensation | 0 | ||
Employee Stock Purchase Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Employees to contribute, Percent | 15.00% | ||
Employees to contribute, Amount | 25,000 | ||
Maximum range of company's board of directors offerings | 27 months | ||
Percentage of fair market value of share for participated by employee | 85.00% | ||
Company initially reserved | 625,000 | ||
Percentage of share outstanding for automatic increase in share reserve for issuance | 2.00% | ||
Number of share increase in share reserve for issuance | 750,000 | ||
Restricted Stock Units (RSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted-average recognition period, unvested stock options | 3 years 3 months 11 days | ||
Total fair value of shares vested pursuant to restricted stock units | 2,500,000 | 2,600,000 | 2,400,000 |
Unamortized stock-based compensation related to unvested restricted stock units | $700,000 | ||
Restricted Stock Units, Awarded | 1,014,000 | ||
Restricted Stock Units, Cancelled | 595,000 | ||
2002 Stock Option Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Common stock for issuance under its stock option plan, initial reserve | 4,579,009 | ||
Share-based compensation arrangement by share-based payment award, expiration period maximum | 10 years | ||
Exercises of employee options on the first anniversary | 25.00% | ||
2006 Equity Incentive Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Common stock for issuance under its stock option plan, initial reserve | 2,000,000 | ||
Share-based compensation arrangement by share-based payment award, expiration period maximum | 10 years | ||
Equity Incentive Plan automatically increases by total number of share outstanding | 3,500,000 | ||
Shares of common stock were available for grant under 2006 Equity Incentive Plan | 2,950,101 |
Summary_of_Option_Activity_Und
Summary of Option Activity Under 2002 Plan and 2006 Plan (Detail) (USD $) | 12 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options Outstanding, Balance at December 31, 2013 | 7,779 | |
Options Outstanding, granted | 6,199 | |
Options Outstanding, exercised | -1,239 | |
Options Outstanding, cancelled | -3,548 | |
Options Outstanding, Balance, December 31, 2014 | 9,191 | 7,779 |
Options Outstanding, Options vested and expected to vest at December 31, 2014 | 8,995 | |
Options Outstanding, Options vested at December 31, 2014 | 2,669 | |
Weighted- Average Exercise Price, Balance at December 31, 2013 | $3.24 | |
Weighted- Average Exercise Price, granted | $1.10 | |
Weighted- Average Exercise Price, exercised | $2.09 | |
Weighted- Average Exercise Price, cancelled | $3.94 | |
Weighted- Average Exercise Price, Balance, December 31, 2014 | $1.69 | $3.24 |
Weighted- Average Exercise Price, Options vested and expected to vest at December 31, 2014 | $1.66 | |
Weighted- Average Exercise Price, Options vested at December 31, 2014 | $2.98 | |
Weighted- Average Remaining Contractual Term, Balance | 7 years 9 months 18 days | 4 years 9 months 4 days |
Weighted- Average Remaining Contractual Term, Options vested and expected to vest at December 31, 2014 | 7 years 9 months 26 days | |
Weighted- Average Remaining Contractual Term, Options vested at December 31, 2014 | 4 years 9 months 7 days | |
Aggregate Intrinsic Value, beginning balance | $169 | |
Aggregate Intrinsic Value, Options vested and expected to vest at December 31, 2014 | 0 | |
Aggregate Intrinsic Value, Options vested at December 31, 2014 | $0 |
Assumptions_Used_to_Estimate_G
Assumptions Used to Estimate Grant Date Fair Values of Stock Options (Detail) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Stock Options | |||
Estimated grant date fair values | |||
Expected volatility, minimum | 72.00% | 77.00% | 61.00% |
Expected volatility, maximum | 74.00% | 89.00% | 90.00% |
Risk-free interest rate, minimum | 1.10% | 0.60% | 0.50% |
Risk-free interest rate, maximum | 1.50% | 1.50% | 1.00% |
Dividend yield | 0.00% | 0.00% | 0.00% |
Stock Options | Minimum | |||
Estimated grant date fair values | |||
Expected term (in years) | 4 years | 4 years 4 months 17 days | 4 years 3 months 15 days |
Stock Options | Maximum | |||
Estimated grant date fair values | |||
Expected term (in years) | 4 years 4 months 2 days | 4 years 6 months 26 days | 4 years 9 months |
Employee Stock Purchase Plan | |||
Estimated grant date fair values | |||
Expected volatility, minimum | 75.00% | 57.00% | 62.00% |
Expected volatility, maximum | 111.00% | 99.00% | 110.00% |
Risk-free interest rate | 0.10% | 0.10% | 0.10% |
Expected term (in years) | 6 months | 6 months | 6 months |
Dividend yield | 0.00% | 0.00% | 0.00% |
Options_outstanding_vested_and
Options outstanding, vested and currently exercisable by exercise price under both the 2002 Plan and the 2006 Plan (Detail) (USD $) | 12 Months Ended |
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Options Outstanding, Number of Options | 9,191 |
Options Outstanding, Weighted-Average Remaining Contractual Life | 7 years 9 months 15 days |
Options Exercisable and Vested, Number of Options | 2,669 |
Options Exercisable and Vested, Weighted-Average Exercise Price | $2.98 |
Options Exercisable and Vested, Weighted- Average Remaining Contractual Life | 4 years 9 months 7 days |
$0.40-$1.96 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Options Outstanding, Exercise Price, Lower Limit | $0.40 |
Options Outstanding, Exercise Price, Upper Limit | $1.96 |
Options Outstanding, Number of Options | 5,835 |
Options Outstanding, Weighted-Average Remaining Contractual Life | 9 years 1 month 2 days |
Options Exercisable and Vested, Number of Options | 664 |
Options Exercisable and Vested, Weighted-Average Exercise Price | $1.59 |
Options Exercisable and Vested, Weighted- Average Remaining Contractual Life | 5 years 1 month 28 days |
$2.01-$4.88 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Options Outstanding, Exercise Price, Lower Limit | $2.01 |
Options Outstanding, Exercise Price, Upper Limit | $4.88 |
Options Outstanding, Number of Options | 3,189 |
Options Outstanding, Weighted-Average Remaining Contractual Life | 5 years 9 months 11 days |
Options Exercisable and Vested, Number of Options | 1,838 |
Options Exercisable and Vested, Weighted-Average Exercise Price | $2.60 |
Options Exercisable and Vested, Weighted- Average Remaining Contractual Life | 4 years 11 months 23 days |
$7.75-$12.15 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Options Outstanding, Exercise Price, Lower Limit | $7.75 |
Options Outstanding, Exercise Price, Upper Limit | $12.15 |
Options Outstanding, Number of Options | 99 |
Options Outstanding, Weighted-Average Remaining Contractual Life | 1 year 3 months 18 days |
Options Exercisable and Vested, Number of Options | 99 |
Options Exercisable and Vested, Weighted-Average Exercise Price | $8.70 |
Options Exercisable and Vested, Weighted- Average Remaining Contractual Life | 1 year 3 months 18 days |
$15.25-$18.95 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Options Outstanding, Exercise Price, Lower Limit | $15.25 |
Options Outstanding, Exercise Price, Upper Limit | $18.95 |
Options Outstanding, Number of Options | 68 |
Options Outstanding, Weighted-Average Remaining Contractual Life | 2 months 16 days |
Options Exercisable and Vested, Number of Options | 68 |
Options Exercisable and Vested, Weighted-Average Exercise Price | $18.52 |
Options Exercisable and Vested, Weighted- Average Remaining Contractual Life | 2 months 16 days |
Summary_of_Restricted_Stock_Un
Summary of Restricted Stock Unit Activity (Detail) (Restricted Stock Units (RSUs), USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Restricted Stock Units (RSUs) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Restricted Stock Units Outstanding, Balance at December 31, 2013 | 1,318,000 |
Restricted Stock Units Outstanding, Awarded | 1,014,000 |
Restricted Stock Units Outstanding, Vested | -896,000 |
Restricted Stock Units Outstanding, Cancelled | -595,000 |
Restricted Stock Units Outstanding, Balance at December 31, 2014 | 841,000 |
Weighted-Average Grant-Date Fair Value, Balance, December 31, 2013 | $1.99 |
Weighted-Average Grant-Date Fair Value, Awarded | $1.89 |
Weighted-Average Grant-Date Fair Value, Vested | $1.99 |
Weighted-Average Grant-Date Fair Value, Cancelled | $2.10 |
Weighted-Average Grant-Date Fair Value, Balance, December 31, 2014 | $1.80 |
Total_StockBased_Compensation_
Total Stock-Based Compensation (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation | $2,832,000 | $4,889,000 | $2,882,000 |
Cost of goods sold | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation | 230,000 | 402,000 | 319,000 |
Research and development | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation | 704,000 | 1,320,000 | 444,000 |
Selling, general and administrative | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Stock-based compensation | $1,898,000 | $3,167,000 | $2,119,000 |
Summary_of_Companys_Pre_Tax_Lo
Summary of Company's Pre Tax Loss (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Summary of Company's Pre Tax Loss | |||
Domestic | ($54,457) | ($55,877) | ($22,343) |
Foreign | 239 | 270 | 312 |
Pre-tax loss | ($54,218) | ($55,607) | ($22,031) |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) (USD $) | 1 Months Ended | 12 Months Ended | ||||||||
Aug. 31, 2013 | Oct. 31, 2012 | Nov. 30, 2011 | Apr. 30, 2010 | Apr. 30, 2009 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Aug. 31, 2014 | Jul. 30, 2013 | |
Income Tax Disclosure [Line Items] | ||||||||||
Foreign Taxes | $28,000 | |||||||||
Net operating loss carryforwards expiry | From 2015 through 2034 | |||||||||
Tax credit carryforwards | 10,564,000 | 9,682,000 | ||||||||
Percentage of valuation allowance against net deferred tax assets | 100.00% | |||||||||
Increase in valuation allowance | 17,100,000 | 21,400,000 | 5,900,000 | |||||||
Ownership change occurrence from percentage of corporation owned increases by specified percentage | 5.00% | |||||||||
Percentage increase over minimum percentage of corporation owned shares | 50.00% | |||||||||
Number of years considered in ownership change occurrence | 3 years | |||||||||
Sale of common stock shares | 28,455,284 | 5,291,005 | 4,785,000 | 16,100,000 | 11,700,000 | |||||
Common Stock issuable upon exercise of warrants | 26,728,369 | 34,146,339 | ||||||||
Cumulative foreign earnings upon which U.S. income taxes have not been provided | 1,500,000 | |||||||||
Unrecognized benefit that none affect Company's effective tax rate | 4,200,000 | |||||||||
Accrued interest or penalties related to uncertain tax positions | 0 | |||||||||
Stock Options | ||||||||||
Income Tax Disclosure [Line Items] | ||||||||||
Net operating loss carryforwards | 1,900,000 | |||||||||
State | ||||||||||
Income Tax Disclosure [Line Items] | ||||||||||
Net operating loss carryforwards | 179,500,000 | |||||||||
State | California | ||||||||||
Income Tax Disclosure [Line Items] | ||||||||||
Tax credit carryforwards | 7,900,000 | |||||||||
Federal | ||||||||||
Income Tax Disclosure [Line Items] | ||||||||||
Tax credit carryforwards expiration year | 2023 | |||||||||
Net operating loss carryforwards | 285,700,000 | |||||||||
Tax credit carryforwards | $8,900,000 |
Effective_Tax_Rate_Differs_Fro
Effective Tax Rate Differs From Federal Statutory Rate (Detail) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Summary of company's effective tax rate differs from the U.S. federal statutory rate | |||
Federal tax benefit at statutory rate | -34.00% | -34.00% | -34.00% |
Permanent difference due to non-deductible expenses | 2.00% | 1.00% | 1.00% |
State tax benefit, net of federal impact | 0.00% | 0.00% | 0.00% |
Change in deferred tax asset valuation allowance | 33.00% | 33.00% | 32.00% |
General business credits | -1.00% | ||
Effective tax rate | -1.00% |
Significant_Portions_of_the_De
Significant Portions of the Deferred Tax Assets (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Deferred Tax Assets [Line Items] | ||
Net operating loss carryforwards | $108,245 | $93,744 |
Research and development credits | 10,564 | 9,682 |
Capitalized research and development | 19,926 | 19,107 |
Fixed assets | 2,464 | 2,222 |
Stock-based compensation | 3,214 | 2,478 |
Accruals, reserves and other | 2,259 | 2,061 |
Intangibles | 857 | 1,092 |
Gross deferred tax asset | 147,529 | 130,386 |
Less: Valuation allowance | -147,529 | -130,386 |
Net deferred tax asset | $0 | $0 |
Reconciliation_of_the_Beginnin
Reconciliation of the Beginning and Ending Balance of Unrecognized Tax Benefits (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Reconciliation of the beginning and ending balance of unrecognized tax benefits | |||
Balance at beginning of period | $3,864 | $3,358 | $1,697 |
Additions based on tax positions related to the current year | 384 | 301 | 122 |
Additions based on tax positions related to prior years | 205 | 1,539 | |
Reduction based on tax positions of prior years | -28 | ||
Balance at end of period | $4,220 | $3,864 | $3,358 |
Computation_of_Basic_and_Dilut
Computation of Basic and Diluted Net Income (Loss) per Share (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | ||
Computation of basic and diluted net income (loss) per share | |||||||||||||
Net loss | ($11,917) | ($15,594) | [1] | ($12,290) | ($14,445) | ($11,888) | ($13,201) | ($13,446) | ($17,187) | [2] | ($54,246) | ($55,722) | ($22,145) |
Shares used to calculated basic and diluted net loss per share | 117,233 | 79,052 | 62,472 | ||||||||||
Basic and diluted net loss per share | ($0.46) | ($0.70) | ($0.35) | ||||||||||
[1] | Net income and basic and diluted net income per share for the third quarter of 2014 include the impact of the warrant exchange of $2.9 million. | ||||||||||||
[2] | Net income and basic and diluted net income per share for the first quarter of 2013 include the impact of the loss on settlement of litigation of $4.5 million. |
Securities_That_could_Potentia
Securities That could Potentially Dilute Basic Net Loss Per Share Not Included In Calculation of Diluted Net Loss per Share (Detail) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Stock Options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share | 9,191 | 7,779 | 7,176 |
Unvested restricted stock units | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share | 841 | 1,318 | 1,365 |
Estimated shares issuable under the employee stock purchase plan | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share | 126 | 41 | 31 |
Warrants | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share | 9,269 | 34,807 | 661 |
Segment_Information_Additional
Segment Information - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2014 | |
Segment | |
Segment Reporting Information [Line Items] | |
Number of operating segments | 1 |
Information_Regarding_Total_Re
Information Regarding Total Revenue (Detail) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||||
Revenue, Major Customer [Line Items] | ||||||||||||||||
Revenues | $5,032 | $3,877 | [1] | $6,887 | $3,699 | $5,620 | $5,068 | $3,343 | $2,951 | [2] | $19,495 | $16,982 | $17,636 | |||
United States | ||||||||||||||||
Revenue, Major Customer [Line Items] | ||||||||||||||||
Revenues | 10,041 | 8,580 | 8,197 | |||||||||||||
International | ||||||||||||||||
Revenue, Major Customer [Line Items] | ||||||||||||||||
Revenues | $9,454 | [3] | $8,402 | [3] | $9,439 | [3] | ||||||||||
[1] | Net income and basic and diluted net income per share for the third quarter of 2014 include the impact of the warrant exchange of $2.9 million. | |||||||||||||||
[2] | Net income and basic and diluted net income per share for the first quarter of 2013 include the impact of the loss on settlement of litigation of $4.5 million. | |||||||||||||||
[3] | For fiscal year 2014, only Japan within international accounted for 13% of total revenues. No single location within international accounted for greater than 10% of total revenues in fiscal years 2013 and 2012. |
Information_Regarding_Total_Re1
Information Regarding Total Revenue (Parenthetical) (Detail) (Geographic Concentration Risk, Japan, Sales) | 12 Months Ended |
Dec. 31, 2014 | |
Geographic Concentration Risk | Japan | Sales | |
Revenue, Major Customer [Line Items] | |
Concentration risk, percentage | 13.00% |
Quarterly_Data_unaudited_Detai
Quarterly Data (unaudited) (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | ||
Summary of certain unaudited quarterly information for the eight quarters | |||||||||||||
Revenues | $5,032 | $3,877 | [1] | $6,887 | $3,699 | $5,620 | $5,068 | $3,343 | $2,951 | [2] | $19,495 | $16,982 | $17,636 |
Gross profit | 2 | 702 | [1] | 1,902 | 398 | 1,116 | 1,340 | 576 | 469 | [2] | 3,004 | 3,501 | 3,610 |
Net loss | ($11,917) | ($15,594) | [1] | ($12,290) | ($14,445) | ($11,888) | ($13,201) | ($13,446) | ($17,187) | [2] | ($54,246) | ($55,722) | ($22,145) |
Basic net loss per share | ($0.09) | ($0.13) | [1] | ($0.11) | ($0.14) | ($0.12) | ($0.16) | ($0.20) | ($0.26) | [2] | |||
Diluted net loss per share | ($0.09) | ($0.13) | [1] | ($0.11) | ($0.14) | ($0.12) | ($0.16) | ($0.20) | ($0.26) | [2] | |||
[1] | Net income and basic and diluted net income per share for the third quarter of 2014 include the impact of the warrant exchange of $2.9 million. | ||||||||||||
[2] | Net income and basic and diluted net income per share for the first quarter of 2013 include the impact of the loss on settlement of litigation of $4.5 million. |
Quarterly_Data_unaudited_Paren
Quarterly Data (unaudited) (Parenthetical) (Detail) (USD $) | 3 Months Ended | 12 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 |
Quarterly Financial Information [Line Items] | ||||
Warrant exchange | $2,900 | $2,914 | ||
Loss on settlement of litigation | ($4,500) | ($4,500) |
Subsequent_Event_Additional_In
Subsequent Event - Additional Information (Detail) (USD $) | 0 Months Ended | ||||
In Millions, except Share data, unless otherwise specified | Mar. 11, 2015 | Dec. 31, 2014 | Aug. 31, 2014 | Dec. 31, 2013 | Jul. 30, 2013 |
D | |||||
Subsequent Event [Line Items] | |||||
Convertible preferred stock sold | 0 | 0 | |||
Common Stock issuable upon exercise of warrants | 26,728,369 | 34,146,339 | |||
Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Gross proceed from sale of convertible preferred stock | $35 | ||||
Convertible preferred stock sold | 53,846 | ||||
Convertible preferred stock Price | $650 | ||||
Common stock at conversion price | $0.65 | ||||
Number of trading days | 10 | ||||
Common Stock issuable upon exercise of warrants | 53,846,000 | ||||
Warrants exercise period | 2 years | ||||
Warrants exercise price | $0.98 |