Summary Of Significant Accounting Policies | NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation In the opinion of management, our accompanying unaudited Condensed Consolidated Financial Statements (“Financial Statements”) have been prepared on a consistent basis with our December 31, 2015 audited Consolidated Financial Statements and include all adjustments, consisting of only normal recurring adjustments, necessary to fairly state the information set forth herein. The Financial Statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) and, as permitted by such rules and regulations, omit certain information and footnote disclosures necessary to present the statements in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). These Financial Statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2015. The results of operations for the nine -month period ended September 30 , 2016 are not necessarily indicative of the results to be expected for the entire year or any future periods. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes to the financial statements. Our estimates include, but are not limited to, the valuation of inventory, revenue valuation, the valuation of a financing derivative and long-term notes, the valuation and recognition of share-based compensation, the delivery period for collaboration agreements, the useful lives assigned to long-lived assets, and the computation provisions for income taxes. Actual results could differ materially from these estimates . Fair Value of Financial Instruments Assets and liabilities measured at fair value on a recurring basis The following table sets forth the fair value of our financial assets and liabilities measured on a recurring basis as of September 30, 2016 and December 31, 2015, respectively: (in thousands) September 30, 2016 December 31, 2015 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets Cash and cash equivalents: Cash and money market funds $ 10,850 $ — $ — $ 10,850 $ 22,034 $ — $ — $ 22,034 Commercial paper — 11,944 — 11,944 — 8,595 — 8,595 US government & agency securities — — — — — 3,000 — 3,000 Total cash and cash equivalents 10,850 11,944 — 22,794 22,034 11,595 — 33,629 Investments: Commercial paper — 26,486 — 26,486 — 15,903 — 15,903 Corporate debt securities — 11,977 — 11,977 — 1,265 — 1,265 US government & agency securities — 24,465 — 24,465 — 28,136 — 28,136 Asset backed securities — 1,611 — 1,611 — 3,337 — 3,337 Total investments — 64,539 — 64,539 — 48,641 — 48,641 Long-term restricted cash: Cash 4,500 — — 4,500 4,500 — — 4,500 Total assets measured at fair value $ 15,350 $ 76,483 $ — $ 91,833 $ 26,534 $ 60,236 $ — $ 86,770 Liabilities Financing derivative $ — $ — $ 218 $ 218 $ — $ — $ 600 $ 600 Total liabilities measured at fair value $ — $ — $ 218 $ 218 $ — $ — $ 600 $ 600 We classify our cash deposits and money market funds within Level 1 of the fair value hierarchy because they are valued using bank balances or quoted market prices. We classify our investments as Level 2 instruments based on market pricing and other observable inputs. We did not classify any of our investments within Level 3 of the fair value hierarchy. During the nine- month periods ended September 30, 2016 and 2015, there were no impairments of our investments. The estimated fair value of the Financing Derivative liability (as defined in Note 6 Notes Payable) was determined using Level 3 inputs, or significant unobservable inputs. Refer to Note 6 Notes Payable for a detailed description and valuation approach. Changes to the estimated fair value of the Financing Derivative are recorded in “Other income (expense), net” in the condensed consolidated statements of operations and comprehensive income ( loss ) . The following table provides the changes in the estimated fair value of the Financing Derivative during the nine-month period ended September 30, 2016 (in thousands): Financing Derivative Amount Balance as of December 31, 2015 $ 600 Gain on change in estimated fair value (382) Balance as of September 30, 2016 $ 218 During the nine -month period ended September 30 , 2016 there were no transfers between Level 1, Level 2, or Level 3 assets or liabilities reported at fair value on a recurring basis and the valuation techniques used did not change compared to our established practice. Financial assets and liabilities not measured at fair value on a recurring basis The carrying amount of our accounts receivable, prepaid expenses, other current assets, accounts payable, accrued expenses and other liabilities, current, approximate fair value due to their short maturities. The carrying value of our other liabilities, non-current, approximates fair value due to the time to maturity and prevailing market rates. We determined the estimated fair value of the Notes (as defined in Note 6 Notes Payable) using Level 3 inputs, or significant unobservable inputs. The estimated fair value of the Notes was determined by comparing the difference between the estimated fair value of the Notes with and without the Financing Derivative by calculating the respective present values from future cash flows using a weighted average market yield of 11.4% and 13.5% at September 30 , 2016 and December 31, 2015, respectively. The estimated fair value and carrying value of the Notes are as follows (in thousands): September 30, 2016 December 31, 2015 Fair Value Carrying Value Fair Value Carrying Value Notes payable $ 19,381 $ 15,794 $ 18,037 $ 14,948 Net Income (loss) per Share Basic net income (loss) per share and diluted net income (loss) per share are presented in conformity with ASC 260 Earnings per Share , for all periods presented. Basic net income (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted net income (loss) per share is computed using the weighted average number of shares of common stock outstanding and potential shares assuming the dilutive effect of outstanding stock options, warrants and common stock issuable pursuant to our employee stock purchase plan, or ESPP, using the treasury stock method. The following table presents the calculation of weighted average number of shares of common stock used in the computations of basic and diluted net income (loss) per share amounts presented in the accompanying condensed consolidated statements of operations and comprehensive income (loss) (in thousands, except per share amounts): Three-Month Periods Ended Nine-Month Periods Ended September 30, September 30, 2016 2015 2016 2015 Net income (loss) $ (17,494) $ 1,821 $ (55,345) $ (30,287) Basic Weighted average number of shares used in computing basic net income (loss) per share 92,110 75,205 87,969 74,699 Basic net income (loss) per share $ (0.19) $ 0.02 $ (0.63) $ (0.41) Diluted Weighted average number of shares used in computing basic net income (loss) per share 92,110 75,205 87,969 74,699 Add: weighted average stock options — 2,733 — — Add: weighted average warrants — 2,541 — — Weighted average number of shares used in computing diluted net income (loss) per share 92,110 80,479 87,969 74,699 Diluted net income (loss) per share $ (0.19) $ 0.02 $ (0.63) $ (0.41) The following outstanding common stock options and warrants to purchase common stock were excluded from the computation of diluted net income(loss) per share for the periods presented because including them would have had an anti-dilutive effect (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Options to purchase common stock 22,635 11,959 22,635 18,469 Warrants to purchase common stock — — — 5,500 Recent Accounting Pronouncements Recently Adopted Accounting Standards In July 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-11, Simplifying the Measurement of Inventory , which simplifies the subsequent measurement of inventory by replacing the lower of cost or market test with a lower of cost and net realizable value test. ASU 2015-11 is effective for annual report periods beginning after December 15, 2016 and is effective for us in the first quarter of 2017. We have elected to early adopt ASU 2015-11 effective beginning with the three-month period ended March 31, 2016, as permitted by the standard. The early adoption of this update did not have a material impact on our condensed consolidated financial statements. Recently Issued Accounting Standards In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting , which amends the current stock compensation guidance. The amendments simplify the accounting for the taxes related to stock based compensation, including adjustments to how excess tax benefits and a company's payments for tax withholdings should be classified. The standard is effective for fiscal periods beginning after December 15, 2016, with early adoption permitted. We are currently evaluating the impact of the adoption of this standard on our consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases. The guidance in ASU 2016-02 supersedes the lease recognition requirements in ASC Topic 840, Leases . ASU 2016-02 requires an entity to recognize assets and liabilities arising from a lease for both financing and operating leases, along with additional qualitative and quantitative disclosures. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. We are currently evaluating the impact of the adoption of this standard on our consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers , requiring an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The updated standard will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective and permits the use of either the retrospective or the cumulative effect transition method. ASU 2014-09 is effective for periods beginning after December 15, 201 7 , 2017, with early adoption permitted but not earlier than the original effective date. Accordingly, the updated standard is effective for us in the first quarter of 2018. We are currently evaluating the new guidance to determine the impact it may have to our condensed consolidated financial statements. |