Document and Entity Information (USD $) In Millions, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Mar. 21, 2014	Jun. 30, 2013
Document And Entity Information [Abstract]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	FY
Trading Symbol	NSTG
Entity Registrant Name	NANOSTRING TECHNOLOGIES INC
Entity Central Index Key	0001401708
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		18,052,694
Entity Public Float			$ 53.1

Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Current assets:
Cash and cash equivalents	$ 9,941	$ 21,692
Short-term investments	32,715
Accounts receivable, net	8,331	3,322
Inventory	6,750	5,380
Prepaid expenses and other	2,999	1,320
Total current assets	60,736	31,714
Restricted cash	201	180
Deferred offering costs	29	1,765
Property and equipment, net	3,065	3,674
Other assets	341	73
Total assets	64,372	37,406
Current liabilities:
Accounts payable	3,354	2,865
Accrued liabilities	7,088	4,481
Deferred revenue, current portion	1,462	878
Deferred rent, current portion	590	764
Long-term debt, current portion	6,136	2,789
Total current liabilities	18,630	11,777
Deferred revenue, net of current portion	803	362
Deferred rent, net of current portion	1,313	1,903
Long-term debt, net of current portion	12,157	9,970
Preferred stock warrant liability		3,532
Total liabilities	32,903	27,544
Commitments and contingencies (Note 13)
Mandatorily redeemable convertible preferred stock, value		103,622
Stockholders' equity (deficit):
Preferred stock, value
Common stock, value	1
Additional paid in capital	158,278
Other comprehensive income	22
Accumulated deficit	(126,832)	(93,760)
Total stockholders' equity (deficit)	31,469	(93,760)
Total liabilities, mandatorily redeemable convertible preferred stock and stockholders' equity (deficit)	$ 64,372	$ 37,406

Consolidated Balance Sheets (Parenthetical) (USD $)	Dec. 31, 2013	Dec. 31, 2012
Statement Of Financial Position [Abstract]
Mandatorily redeemable convertible preferred stock, par value	$ 0.0001	$ 0.0001
Mandatorily redeemable convertible preferred stock, shares authorized	8,978,672	8,978,672
Mandatorily redeemable convertible preferred stock, shares issued	0	8,118,240
Mandatorily redeemable convertible preferred stock, shares outstanding	0	8,118,240
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	15,000,000	0
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	150,000,000	150,000,000
Common stock, shares issued	14,619,818	411,226
Common stock, shares outstanding	14,619,818	411,226

Consolidated Statements of Operations (USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Income Statement [Abstract]
Revenue	$ 31,403	$ 22,973	$ 17,800
Costs and expenses:
Cost of revenue	15,009	12,361	9,777
Research and development	14,979	11,635	8,990
Selling, general and administrative	29,912	15,486	9,529
Total costs and expenses	59,900	39,482	28,296
Loss from operations	(28,497)	(16,509)	(10,496)
Other income (expense):
Interest income	68	21	10
Interest expense	(1,942)	(804)	(599)
Other income (expense)	(66)	(29)	80
Revaluation of preferred stock warrant liability	1,156	(387)	73
Total other income (expense)	(784)	(1,199)	(436)
Net loss	(29,281)	(17,708)	(10,932)
Accretion of mandatorily redeemable convertible preferred stock	(4,653)	(7,533)	(5,251)
Net loss attributable to common stockholders	$ (33,934)	$ (25,241)	$ (16,183)
Net loss per share-basic and diluted	$ (4.44)	$ (71.10)	$ (50.10)
Weighted average shares used in computing basic and diluted net loss per share	7,643	355	323

Consolidated Statements of Comprehensive Loss (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Statement Of Income And Comprehensive Income [Abstract]
Net loss	$ (29,281)	$ (17,708)	$ (10,932)
Other comprehensive income:
Unrealized gain on short-term investments	22
Comprehensive loss	$ (29,259)	$ (17,708)	$ (10,932)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

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-Name Regulation S-X (SX)

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-Section 04

-Paragraph 20

-Article 9

Reference 2: http://www.xbrl.org/2003/role/presentationRef

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Reference 4: http://www.xbrl.org/2003/role/presentationRef

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-Paragraph 19

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+ Details

Consolidated Statements of Changes in Mandatorily Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit) (USD $) In Thousands, except Share data	Total	Series A Preferred Stock [Member]	Series B Preferred Stock [Member]	Series C Preferred Stock [Member]	Series D Preferred Stock [Member]	Series E Preferred Stock [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	Other Comprehensive Income [Member]	Accumulated Deficit [Member]
Balances at beginning of period at Dec. 31, 2010	$ (53,517)									$ (53,517)
Beginning Balance at Dec. 31, 2010		13,250	11,800	32,837
Balances at beginning of period, shares at Dec. 31, 2010							322,325
Balance, Shares at Dec. 31, 2010		557,339	515,836	3,551,060
Issuance of preferred stock, shares					2,430,054
Accretion of preferred stock	(5,251)							(249)		(5,002)
Issuance of preferred stock, value					17,819
Accretion of preferred stock	5,251	1,133	993	2,777	348
Exercise of stock options, shares							2,204
Exercise of stock options	6							6
Stock-based compensation	243							243
Net loss
Net loss	(10,932)									(10,932)
Ending Balance at Dec. 31, 2011		14,383	12,793	35,614	18,167
Balances at end of period at Dec. 31, 2011	(69,451)									(69,451)
Balance, Shares at Dec. 31, 2011		557,339	515,836	3,551,060	2,430,054
Balances at end of period, shares at Dec. 31, 2011							324,529
Issuance of preferred stock, shares						1,063,951
Accretion of preferred stock	(7,533)							(932)		(6,601)
Issuance of preferred stock, value						15,132
Accretion of preferred stock	7,533	1,222	1,072	2,978	2,156	105
Conversion of preferred stock into common stock at initial public offering, shares	8,631,427
Exercise of stock options, shares							85,135
Exercise of stock options	183							183
Exercise of common stock warrant, shares							1,562
Exercise of common stock warrant
Exercise of common stock warrant, value	4							4
Stock-based compensation	745							745
Net loss
Net loss	(17,708)									(17,708)
Ending Balance at Dec. 31, 2012		15,605	13,865	38,592	20,323	15,237
Balances at end of period at Dec. 31, 2012	(93,760)									(93,760)
Balance, Shares at Dec. 31, 2012	8,118,240	557,339	515,836	3,551,060	2,430,054	1,063,951
Balances at end of period, shares at Dec. 31, 2012	411,226						411,226
Accretion of preferred stock	(4,653)							(862)		(3,791)
Accretion of preferred stock	4,653	683	577	1,604	1,140	649
Issuance of common stock from initial public offering, shares							5,400,000
Issuance of common stock from initial public offering, value	46,820							46,820
Conversion of preferred stock into common stock at initial public offering, shares	8,631,427	(557,339)	(515,836)	(3,551,060)	(2,430,054)	(1,063,951)	8,631,427
Conversion of preferred stock to common stock at initial public offering, value	108,275	(16,288)	(14,442)	(40,196)	(21,463)	(15,886)	1	108,274
Conversion of warrants from warrants for preferred stock to warrants for common stock	2,514							2,514
Exercise of stock options, shares	177,165						177,165
Exercise of stock options	387							387
Stock-based compensation	1,145							1,145
Net loss	(29,281)									(29,281)
Other comprehensive income	22								22
Ending Balance at Dec. 31, 2013
Balances at end of period at Dec. 31, 2013	$ 31,469						$ 1	$ 158,278	$ 22	$ (126,832)
Balance, Shares at Dec. 31, 2013	0
Balances at end of period, shares at Dec. 31, 2013	14,619,818						14,619,818

Consolidated Statements of Changes in Mandatorily Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit) (Parenthetical) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011 Series D Preferred Stock [Member]	Dec. 31, 2012 Series E Preferred Stock [Member]	Dec. 31, 2013 Additional Paid-in Capital [Member]
Issuance of preferred stock, issuance costs	$ 559	$ 185
Initial public offering, issuance cost			$ 7,180

Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Operating activities:
Net loss	$ (29,281)	$ (17,708)	$ (10,932)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization	1,777	1,947	1,454
Amortization of debt discount	213	136	330
Stock-based compensation	1,145	745	243
Revaluation of preferred stock warrant liability	(1,156)	387	(73)
Amortization of premium on short-term investments	(518)
Interest accrued on convertible promissory notes			87
Interest accrued on long-term note loan	259	90
Loss on disposal of property and equipment	1	3
Changes in operating assets and liabilities
Accounts receivable	(5,009)	(210)	(965)
Inventory	(1,370)	(1,884)	(1,338)
Prepaid expenses and other	(1,679)	221	(1,100)
Related party loans and other assets	(268)	118	(58)
Accounts payable	1,601	103	(1,231)
Accrued liabilities	2,678	1,830	781
Deferred revenue	1,025	146	624
Deferred rent	(764)	(732)	1,486
Net cash used in operating activities	(31,346)	(14,808)	(10,692)
Investing activities:
Purchases of property and equipment	(759)	(428)	(2,688)
Purchases of short-term investments	(32,175)
Increase in restricted cash	(21)		(112)
Net cash used in investing activities	(32,955)	(428)	(2,800)
Financing activities:
Proceeds from issuance of preferred stock and warrants		15,132	14,883
Proceeds from initial public offering	47,374
Proceeds from issuance of convertible promissory notes and warrants			5,000
Proceeds from issuance of long-term debt	5,000	13,000	5,004
Repayment of long-term debt	(211)	(1,706)	(4,899)
Deferred offering costs		(553)
Proceeds from exercise of stock options and warrants	387	187	6
Net cash provided by financing activities	52,550	26,060	19,994
Net increase (decrease) in cash and cash equivalents	(11,751)	10,824	6,502
Cash and cash equivalents:
Beginning of year	21,692	10,868	4,366
End of year	9,941	21,692	10,868
Supplemental disclosures:
Accretion of preferred stock	4,653	7,533	5,251
Accrual of offering costs	29	1,212
Cash paid for interest	1,474	563	167
Issuance of preferred stock warrants with debt	138	648	661
Issuance of preferred stock warrants with equity			1,867
Conversion of convertible promissory notes and accrued interest into Series D preferred stock			5,087
Conversion of convertible preferred stock to common stock	108,275
Conversion of convertible preferred stock warrants to common stock warrants	2,514
Non-cash capital lease	$ 410

Description of the Business	12 Months Ended
Description of the Business	Dec. 31, 2013
Accounting Policies [Abstract]
Description of the Business	1. Description of the Business NanoString Technologies, Inc. (the “Company”) was incorporated in the state of Delaware on June 20, 2003. The Company’s headquarters is located in Seattle, Washington. The Company’s technology enables direct detection, identification and quantification of individual target molecules in a biological sample by attaching a unique color coded fluorescent reporter to each target molecule of interest. The Company markets its proprietary nCounter Analysis System, consisting of instruments and consumables, including its Prosigna Breast Cancer Assay, to academic, government and biopharmaceutical and clinical laboratories. The Company has incurred losses to date and expects to incur additional losses in the foreseeable future. The Company continues to devote the majority of its resources to the growth of its business in accordance with its business plan. The Company’s activities have been financed primarily through the sale of equity securities and incurrence of indebtedness, and to a lesser extent, capital leases and other borrowings. Reverse Stock Split On June 12, 2013, the Company effected a 1-for-32 reverse stock split of its common stock and preferred stock. All share and per share information has been retroactively adjusted to reflect this reverse stock split. Initial Public Offering On June 25, 2013, the Company’s registration statement on Form S-1 was declared effective. This registration statement related to its initial public offering, in which the Company sold 5,400,000 shares of common stock at a price of $10.00 per share. The shares began trading on the NASDAQ Global Market on June 26, 2013. All outstanding shares of the Company’s mandatorily redeemable convertible preferred stock converted into shares of common stock in connection with the initial public offering. Following the initial public offering, there were no shares of preferred stock outstanding.

Significant Accounting Policies

12 Months Ended

Dec. 31, 2013

Accounting Policies [Abstract]

Significant Accounting Policies

2. Significant Accounting Policies

Accounting Principles

The consolidated financial statements and accompanying notes were prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

Principles of Consolidation

The accompanying consolidated financial statements reflect the accounts of the Company and its wholly-owned subsidiaries, NanoString Technologies International, Inc., NanoString Technologies Asia Pacific Limited, NanoString Technologies Europe Limited, Nanostring Technologies Germany GmbH, Nanostring Technologies Singapore Pte Limited and NanoString Technologies SAS. Each of these subsidiaries operates as a sales and support office. The functional currency of each subsidiary is the U.S. dollar. All significant intercompany balances and transactions have been eliminated.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and that affect the reported amounts of revenue and expenditures during the reporting period. Actual results could differ from those estimates. Significant estimates inherent in the preparation of the accompanying consolidated financial statements include the estimation of the fair value of the Company’s equity securities and the calculation of stock-based compensation.

Cash and Cash Equivalents

The Company considers all highly-liquid investments with purchased maturities of three months or less to be cash equivalents. The Company’s cash equivalents consist principally of funds maintained in depository accounts. The Company invests its cash and cash equivalents with major financial institutions; at times these investments exceed federally insured limits.

Investments

The Company classifies its securities as available-for-sale, which are reported at estimated fair value with unrealized gains and losses included in accumulated other comprehensive income in stockholders’ equity. Realized gains, realized losses and declines in the value of securities judged to be other-than-temporary, are included in other income (expense). The cost of investments for purposes of computing realized and unrealized gains and losses is based on the specific identification method. Amortization of premiums and accretion of discounts are included in other income (expense). Interest and dividends earned on all securities are included in other income (expense). Investments in securities with maturities of less than one year, or where management’s intent is to use the investments to fund current operations, or to make them available for current operations, are classified as short-term investments.

If the estimated fair value of a security is below its carrying value, the Company evaluates whether it is more likely than not that it will sell the security before its anticipated recovery in market value and whether evidence indicating that the cost of the investment is recoverable within a reasonable period of time outweighs evidence to the contrary. The Company also evaluates whether or not it intends to sell the investment. If the impairment is considered to be other-than-temporary, the security is written down to its estimated fair value. In addition, the Company considers whether credit losses exist for any securities. A credit loss exists if the present value of cash flows expected to be collected is less than the amortized cost basis of the security. Other-than-temporary declines in estimated fair value and credit losses are charged against other income (expense).

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable are stated at the amount management expects to collect from customers based on their outstanding invoices. Management reviews accounts receivable regularly to determine if any receivable will potentially be uncollectible and to estimate the amount of allowance for doubtful accounts necessary to reduce accounts receivable to its estimated net realizable value. This estimate was made by analyzing the status of significant past due receivables and by establishing provisions for estimated losses by analyzing current and historical bad debt trends. At December 31, 2013 and 2012, no allowance for doubtful accounts was recorded.

Concentration of Credit Risks

Cash, cash equivalents and short-term investments are invested in accordance with the Company’s investment policy. The policy includes guidelines for the investment of cash reserves and is reviewed periodically to minimize credit risk. The Company also has credit risk related to the collectability of its accounts receivable. The Company performs initial and ongoing evaluations of its customers’ financial position and generally extends credit on account without collateral.

The Company did not have any customers that individually represented more than 10% of total revenue during the years ended December 31, 2013, 2012 and 2011.

The Company had no customers that represented more than 10% of total accounts receivable at December 31, 2013 and 2012.

The Company is also subject to supply chain risks related to the outsourcing of the manufacturing of its instruments to sole suppliers. Although there are a limited number of manufacturers for instruments of this type, the Company believes that other suppliers could provide similar products on comparable terms. A change in suppliers, however, could cause a delay in manufacturing and a possible loss of sales, which would adversely affect operating results.

Fair value of financial instruments

The recorded amounts of certain financial instruments, including cash and cash equivalents, accounts receivable, prepaid expenses and other assets, accounts payable and accrued liabilities approximate fair value due to their relatively short maturities. Investments that are classified as available-for-sale are recorded at fair value. The fair value for securities held is determined using quoted market prices, broker or dealer quotations, or alternative pricing sources with reasonable levels of price transparency. The recorded amount of the Company’s long-term debt approximates fair value because the related interest rates approximate rates currently available to the Company.

Inventory

Inventory consists of finished goods, work in process, raw materials and certain component parts to be used in manufacturing the Company’s products. Inventory is stated at the lower of cost or market. Cost is determined using a standard cost system, whereby the standard costs are updated periodically to reflect current costs and market represents the lower of replacement cost or estimated net realizable value. The Company records adjustments to inventory for potentially excess, obsolete, slow-moving or impaired items.

The Company outsources the manufacturing of its instruments to third-party contract manufacturers who manufacture them to certain specifications and source certain raw materials from sole source providers. Major delays in shipments, inferior quality, insufficient quantity or any combination of these or other factors may harm the Company’s business and results of operations. In addition, the inability of one or more of these suppliers to provide the Company with an adequate supply of its products or raw materials or the loss of one or more of these suppliers may cause a delay in the Company’s ability to fulfill orders while it obtains a replacement supplier and may harm the Company’s business and results of operations.

Property and Equipment

Property and equipment are recorded at cost, net of accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the assets. Manufacturing equipment is amortized over five years, computer equipment is generally depreciated over three years, furniture and fixtures are depreciated over five years and leasehold improvements are amortized over the life of the related assets or the term of the lease, whichever is less. Expenditures for additions are capitalized and expenditures for maintenance and repairs are expensed as incurred. Gains and losses from the disposal of property and equipment are reflected in the consolidated statements of operations in the year of disposition.

Leases and Leasehold Improvements

Rent expense for leases that provide for scheduled rent increases during the lease term is recognized on a straight-line basis over the term of the related lease. Leasehold improvements that are funded by landlord incentives or allowances are recorded in property and equipment and as a component of deferred rent and are amortized as a reduction of rent expense over the term of the related lease.

Impairment of Long-Lived Assets

The Company recognizes impairment losses on long-lived assets when indicators of impairment are present and the anticipated undiscounted cash flows to be generated by those assets are less than the asset’s carrying values. The Company has not experienced any impairment losses on its long-lived assets during the periods presented.

Deferred Offering Costs

Deferred offering costs represent legal, accounting and other direct costs related to the Company’s efforts to raise capital through public offerings of the Company’s common stock. Costs are deferred until the completion of the applicable offering, at which time they are reclassified to additional paid-in capital as a reduction of the proceeds. The Company accrued approximately $29,000 and $1.8 million of deferred offering costs as a non-current asset in the consolidated balance sheet as of December 31, 2013 and 2012, respectively.

Segments

The Company follows the authoritative literature that established annual and interim reporting standards for enterprises’ operating segments and related disclosures about its products and services, geographic regions and major customers. Operating segments are defined as components of an entity for which separate financial information is available and evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company’s chief operating decision maker is the chief executive officer, who manages the operations and evaluates the financial performance on a total Company basis. The Company’s principal operations and decision-making functions are located at its corporate headquarters in the United States.

Until the fourth quarter of 2013, the Company operated in two reportable segments, its life sciences business and its diagnostics business. In November 2013, the Company’s nCounter Dx Analysis System FLEX Configuration was launched, enabling customers to perform both research and clinical testing on the same instrument. The Company has one sales force that now sells these systems to both research and diagnostic testing labs, and has launched its first product, nCounter Elements GPRs, that can be used for both research and diagnostic testing. As a result of these fundamental changes to its business, the Company began operating as a single reportable segment during the fourth quarter of 2013.

Revenue Recognition

The Company recognizes revenue when (1) persuasive evidence of an arrangement exists, (2) delivery has occurred or services have been rendered, (3) the price to the customer is fixed or determinable and (4) collectability is reasonably assured. The Company generates revenue from the sale of products and services. The Company’s products consist of its proprietary nCounter Analysis System and related consumables. Services consist of extended warranties and service fees for assay processing. A delivered product or service is considered to be a separate unit of accounting when it has value to the customer on a stand-alone basis. Products or services have value on a stand-alone basis if they are sold separately by any vendor or the customer could resell the delivered product.

Systems product revenue is recognized upon installation and calibration in geographic regions where such services are only available from the Company’s specialized technicians. In these regions, systems and related installation and calibration are considered to be one unit of accounting, as systems are required to be professionally installed and calibrated before use. In certain geographic regions, installation and calibration services are available from other vendors, and in such regions they are considered separate revenue elements. Consumables are considered to be separate units of accounting as they are sold separately. Consumables product revenue is recognized upon shipment.

Service revenue is recognized when earned, which is generally upon the rendering of the related services. Service contracts and service fees for assay processing are each considered separate units of accounting as they are sold separately. The Company offers service contracts on its nCounter Analysis System for periods ranging from 12 to 36 months after the end of the standard 12-month warranty period. Service contracts are generally separately priced. Revenue from service contracts is deferred and recognized in income on a straight-line basis over the service period.

For arrangements with multiple deliverables, the Company allocates the contract consideration at the inception of the contract to the deliverables based upon their relative selling prices. To date, selling prices have been established by reference to vendor specific objective evidence based on stand-alone sales transactions for each deliverable. Vendor specific objective evidence is considered to have been established when a substantial majority of individual sales transactions within the previous 12 month period fall within a reasonably narrow range, which the Company has defined to be plus or minus 15% of the median sales price of actual stand-alone sales transactions. The Company uses its best estimate of selling price for individual deliverables when vendor specific objective evidence or third-party evidence is unavailable. Allocated revenue is only recognized for each deliverable when the revenue recognition criteria have been met.

Cost of Revenue

Cost of revenue consists primarily of costs incurred in the production process, including costs of purchasing instruments from third-party contract manufacturers, consumable component materials and assembly labor and overhead, installation, warranty, service and packaging and delivery costs. In addition, cost of revenue includes royalty costs for licensed technologies included in the Company’s products, provisions for slow-moving and obsolete inventory and stock-based compensation expense. Cost of revenue for instruments and consumables is recognized in the period the related revenue is recognized. Shipping and handling costs incurred for product shipments are included in cost of revenue in the consolidated statements of operations.

Reserve for Product Warranties

The Company generally provides a one-year warranty on its nCounter Analysis Systems and establishes an accrual based on historical product failure rates and actual warranty costs incurred. Warranty expense is recorded as a component of cost of revenue in the consolidated statements of operations.

Changes in the Company’s warranty reserve and related costs were as follows:


	(In thousands)
Warranty reserve, December 31, 2010	$	63
Cost of warranty claims		(518	)
Warranty accrual		622

Warranty reserve, December 31, 2011		167
Cost of warranty claims		(244	)
Warranty accrual		325

Warranty reserve, December 31, 2012		248
Cost of warranty claims		(191	)
Warranty accrual		301

Warranty reserve, December 31, 2013	$	358

Research and Development

Research and development expenses, consisting primarily of salaries and benefits, occupancy costs, laboratory supplies, clinical study costs, contracted services, consulting fees and related costs, are expensed as incurred.

Selling, General and Administrative

Selling expenses consist primarily of personnel related costs for sales and marketing, contracted services, and service fees and are expensed as the related costs are incurred. Advertising costs are charged to operations as incurred and are included in sales and marketing expenses. Advertising costs totaled approximately $3.3 million, $590,000 and $417,000 during the years ended December 31, 2013, 2012 and 2011, respectively.

General and administrative expenses consist primarily of personnel related costs for the Company’s finance, human resources, business development, legal and general management, as well as professional fees for services such as legal and accounting services. General and administrative expenses are expensed as they are incurred.

Income Taxes

The Company accounts for income taxes under the liability method. Under the liability method, deferred tax assets and liabilities are determined based on the differences between the financial reporting and income tax bases of assets and liabilities and are measured using the tax rates that will be in effect when the differences are expected to reverse. A valuation allowance is recorded when it is more likely than not that some of the deferred tax assets will not be realized.

The Company determines whether a tax position is more likely than not to be sustained upon examination based on the technical merits of the position. For tax positions meeting the more-likely-than-not threshold, the tax amount recognized in the financial statements is reduced by the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority.

Stock-Based Compensation

The Company accounts for stock-based compensation under the fair value method. Stock-based compensation costs are based on option awards granted and vested based on their grant-date fair value, estimated using the Black-Scholes option pricing model. The Company uses the straight-line attribution method for recognizing compensation expense.

The Company recognizes compensation expense for only the portion of options expected to vest. Therefore, management applied an estimated forfeiture rate that was derived from historical employee termination behavior. If the actual number of forfeitures differs from these estimates, adjustments to compensation expense may be required in future periods.

Guarantees and Indemnifications

In the normal course of business, the Company guarantees and/or indemnifies other parties, including vendors, lessors and parties to transactions with the Company, with respect to certain matters. The Company has agreed to hold the other parties harmless against losses arising from breach of representations or covenants, or out of intellectual property infringement or other claims made against certain parties. It is not possible to determine the maximum potential amount the Company could be required to pay under these indemnification agreements, since the Company has not had any prior indemnification claims, and each claim would be based upon the unique facts and circumstances of the claim and the particular provisions of each agreement. In the opinion of management, any such claims would not be expected to have a material adverse effect on the Company’s consolidated results of operations, financial condition or cash flows. The Company did not have any related liabilities recorded at December 31, 2013 and 2012.

Comprehensive Income

Comprehensive loss includes certain changes in equity that are excluded from net loss. Specifically, unrealized gains and losses on short-term investments are included in comprehensive income.

Recent Accounting Pronouncements

As an “emerging growth company,” the Jumpstart Our Business Startups Act allows the Company to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies.

- Definition

The entire disclosure for all significant accounting policies of the reporting entity.

+ References+ Details

Short-term Investments

12 Months Ended

Dec. 31, 2013

Investments Debt And Equity Securities [Abstract]

Short-term Investments

3. Short-term Investments

Short-term investments consisted of available-for-sale securities at December 31, 2013 as follows:


Type of security	Amortized cost		Gross unrealized gains		Gross unrealized losses			Fair value
	(In thousands)
U.S. government-related debt securities	$	1,565	$	1	$	—		$	1,566
Corporate debt securities		31,128		24		(3	)		31,149

Total available-for-sale securities	$	32,693	$	25	$	(3	)	$	32,715

The Company did not have available-for-sale securities at December 31, 2012.

The fair values of available-for-sale securities by contractual maturity at December 31, 2013 were as follows (in thousands):


Maturing in one year or less	$	26,725
Maturing after one year through three years		5,990

Total available-for-sale securities	$	32,715

- Definition

The entire disclosure for investments in certain debt and equity securities.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 320

-SubTopic 10

-Section 50

-Paragraph 6

-URI http://asc.fasb.org/extlink&oid=27724398&loc=d3e27290-111563

Reference 2: http://www.xbrl.org/2003/role/presentationRef

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-Name Accounting Standards Codification

-Topic 320

-SubTopic 10

-Section 50

-Paragraph 9

-URI http://asc.fasb.org/extlink&oid=27724398&loc=d3e27357-111563

Reference 3: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 320

-Glossary Debt Security

-URI http://asc.fasb.org/extlink&oid=6509901

Reference 4: http://www.xbrl.org/2003/role/presentationRef

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-Name Accounting Standards Codification

-Topic 310

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-Paragraph 2

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Reference 6: http://www.xbrl.org/2003/role/presentationRef

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-Name Accounting Standards Codification

-Topic 942

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Reference 8: http://www.xbrl.org/2003/role/presentationRef

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Reference 9: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 320

-Glossary Equity Security

-URI http://asc.fasb.org/extlink&oid=6511694

+ Details

Fair Value Measurements

12 Months Ended

Dec. 31, 2013

Fair Value Disclosures [Abstract]

Fair Value Measurements

4. Fair Value Measurements

The Company establishes the fair value of its assets and liabilities using the price that would be received to sell an asset or paid to transfer a financial liability in an orderly transaction between market participants at the measurement date. A fair value hierarchy is used to measure fair value. The three levels of the fair value hierarchy are as follows:

Level 1 Quoted prices in active markets for identical assets and liabilities.

Level 2 Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets.

Level 3 Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

The Company’s available-for-sale securities by level within the fair value hierarchy were as follows:


As of December 31, 2013	Fair value measurement using:
As of December 31, 2013	Level 1		Level 2		Level 3		Total
	(In thousands)
Cash equivalents:
Money market fund	$	8,454	$	—	$	—	$	8,454
Short-term investments:
U.S. government-related debt securities		—		1,566		—		1,566
Corporate debt securities		—		31,149		—		31,149

Total	$	8,454	$	32,715	$	—	$	41,169


As of December 31, 2012	Fair value measurement using:
As of December 31, 2012	Level 1		Level 2		Level 3		Total
	(In thousands)
Cash equivalents:
Money market fund	$	20,510	$	—	$	—	$	20,510

Prior to the Company’s initial public offering, the Company had mandatorily redeemable convertible preferred stock which contained certain redemption provisions that precluded equity classification. Accordingly, warrants to purchase this mandatorily redeemable convertible preferred stock were classified as liabilities for the periods presented. These preferred stock warrants were subject to re-measurement at each balance sheet date and any change in fair value was recognized as a component of other income (expense).

The Company’s preferred stock warrants were categorized as Level 3 because they were valued based on unobservable inputs and management judgment due to the absence of quoted market prices, inherent lack of liquidity and the long-term nature of such financial instruments. The Company performed a fair value assessment of the preferred stock warrant inputs on a quarterly basis using the Black-Scholes option pricing model. The assumptions used in the Black-Scholes option pricing model are inherently subjective and involve significant judgment. Any change in fair value was recognized as a component of other income (expense) in the consolidated statements of operations. Upon the closing of the Company’s initial public offering, all warrants to purchase preferred stock were converted to warrants to purchase common stock and these warrants are no longer re-measured to fair value at each reporting date.

The Company’s preferred stock warrant liabilities by level within the fair value hierarchy were as follows:


As of December 31, 2012	Fair value measurement using:
As of December 31, 2012	Level 1		Level 2		Level 3		Total
	(In thousands)
Preferred stock warrant liability	$	—	$	—	$	3,532	$	3,532

The Company may elect to apply fair value to its financial assets and liabilities on an instrument-by-instrument basis. The Company has not elected to apply the fair value option to any eligible financial assets or liabilities in 2013, 2012 or 2011.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References+ Details

Inventory

12 Months Ended

Dec. 31, 2013

Inventory Disclosure [Abstract]

Inventory

5. Inventory

Inventory consisted of the following at December 31:


	2013		2012
	(In thousands)
Raw materials	$	2,164	$	2,120
Work in process		2,198		962
Finished goods		2,388		2,298

	$	6,750	$	5,380

- Definition

The entire disclosure for inventory. This may include, but is not limited to, the basis of stating inventory, the method of determining inventory cost, the major classes of inventory, and the nature of the cost elements included in inventory. If inventory is stated above cost, accrued net losses on firm purchase commitments for inventory and losses resulting from valuing inventory at the lower-of-cost-or-market may also be included. For LIFO inventory, may disclose the amount and basis for determining the excess of replacement or current cost over stated LIFO value and the effects of a LIFO quantities liquidation that impacts net income.

+ References+ Details

Property and Equipment

12 Months Ended

Dec. 31, 2013

Property Plant And Equipment [Abstract]

Property and Equipment

7. Property and Equipment

Property and equipment consisted of the following at December 31:


	Useful Life (Years)	2013			2012
		(In thousands)
Manufacturing equipment	5	$	3,333		$	2,854
Prototype systems	2		1,893			1,893
Computer equipment	3		1,325			651
Furniture and fixtures	5		543			517
Leasehold improvements	Various		4,713			4,713
Construction in progress			—			14

			11,807			10,642
Less: Accumulated depreciation and amortization			(8,742	)		(6,968	)

		$	3,065		$	3,674

Prototype systems consist of digital imagers and liquid handling robots used in internal testing and other development activities.

Depreciation and amortization expense for the years ended December 31, 2013, 2012 and 2011 totaled approximately $1.8 million, $1.9 million and $1.5 million, respectively.

- Definition

The entire disclosure for long-lived, physical assets used in the normal conduct of business and not intended for resale. Includes, but is not limited to, accounting policies and methodology, roll forwards, depreciation, depletion and amortization expense, including composite depreciation, accumulated depreciation, depletion and amortization expense, useful lives and method used, income statement disclosures, assets held for sale and public utility disclosures.

+ References+ Details

Accrued Liabilities

12 Months Ended

Dec. 31, 2013

Payables And Accruals [Abstract]

Accrued Liabilities

8. Accrued Liabilities

Accrued liabilities consisted of the following at December 31:


	2013		2012
	(In thousands)
Salaries and bonuses	$	4,701	$	2,071
Clinical study costs		539		847
Accounting and legal		272		491
Other accrued liabilities		1,576		1,072

	$	7,088	$	4,481

Long-Term Debt

12 Months Ended

Dec. 31, 2013

Debt Disclosure [Abstract]

Long-Term Debt

9. Long-Term Debt

In 2012, the Company entered into a credit facility, as amended, that consists of up to $23.0 million in term loan borrowings and a $2.0 million accounts receivable revolving line of credit. All borrowings under the credit facility have a maturity date of July 2016. The term loans bear interest at fixed rates based on the three-month LIBOR rate plus 8.39% (subject to a LIBOR floor of 0.50%) at the time of borrowing and borrowings under the revolving line of credit bear interest at the Prime Rate plus 3.70% (subject to a floor of 6.95%). At December 31, 2013, the Prime Rate was equal to 3.25%. We are also required to pay a fee of 0.075% per month on the unused portion of the revolver borrowings. Through January 2014, the Company is required to only pay interest on all outstanding term borrowings. Following the expiration of the interest only payment period, the Company is required to pay principal and interest in 30 equal monthly payments, plus an end of term payment equal to 5.5% of the amount borrowed. The Company may at its option prepay all of the term loan borrowings by paying the lender, among other things, all principal and accrued interest, the end of term payment plus a make-whole premium.

During 2012, the Company incurred $13.0 million in term loan borrowings at an interest rate of 8.89%. In connection with the credit facility, the Company issued warrants to purchase an aggregate of 76,940 shares of Series D preferred stock at an exercise price of $8.45 per share and 20,837 shares of Series E preferred stock at an exercise price of $14.40 per share. The warrants have a ten-year term and an aggregate fair value at issuance of $648,000. The warrants were valued at the date of issuance using the Black-Scholes option pricing model with the following assumptions: fair value of preferred stock equal to exercise price of warrant, volatility of 58.0 to 61.0% and a risk free interest rates of 1.63 to 2.20%. The warrants were treated as debt discount and are being amortized over the term of the debt. In connection with the Company’s initial public offering, these warrants became exercisable for shares of the Company’s common stock.

In April 2013, the Company incurred an additional $5.0 million in term loan borrowings under the credit facility at an interest rate of 8.89%. In connection with this borrowing, the Company issued warrants to purchase an aggregate of 10,418 shares of Series E preferred stock, which were valued at the date of issuance at $138,000 using the Black-Scholes option pricing model with the following assumptions: fair value of preferred stock equal to the exercise price of the warrants, volatility of 57.0% and a risk-free interest rate of 1.7%. In connection with the Company’s initial public offering, these warrants became exercisable for shares of the Company’s common stock.

The credit facility contains customary conditions to borrowing, events of default and covenants, including covenants that restrict the Company’s ability to dispose of assets, merge with or acquire other entities, incur indebtedness, incur encumbrances, make distributions to holders of the Company’s capital stock, make investments or engage in transactions with its affiliates. In addition, the Company must comply with a financial covenant based on non-Prosigna revenue. This financial covenant is measured monthly on a trailing three month basis. The Company was in compliance with all covenants as of December 31, 2013. The Company’s obligations under the credit facility are collateralized by substantially all of its assets other than intellectual property.

In August 2013, the Company entered into an equipment lease of hardware, software and capitalized installation costs over a lease term of three years expiring July 2016. The amount financed totaled approximately $410,000 and is being repaid over the term of the lease. The lease is interest free and ownership of the property transfers to the Company at the end of the term.

Pursuant to an office building lease, the owner of the building financed a portion of tenant improvements under an arrangement in which the Company is obligated to pay the amount financed over the term of the lease. The amount financed totaled $843,000 and is being repaid over the original five-year term of the lease. Interest accrues on the unpaid balance at a rate of 10% per annum.

Borrowings, including current portion, consisted of the following at December 31:


	2013			2012
	(In thousands)
Landlord payable	$	49		$	235
Capital lease		410			—
Term loans payable		18,348			13,115

		18,807			13,350
Less: Unamortized debt discount		(514	)		(591	)
Current portion		(6,136	)		(2,789	)

Non-current portion	$	12,157		$	9,970

Scheduled future payments for principal obligations under outstanding debt facilities were as follows at December 31:


	2013
	(In thousands)
2014	$	6,342
2015		7,458
2016		5,007
2017		—
2018		—

	$	18,807

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References+ Details

Common Stock and Preferred Stock

12 Months Ended

Dec. 31, 2013

Equity [Abstract]

Common Stock and Preferred Stock

10. Common Stock and Preferred Stock

Prior to the completion of its initial public offering in July 2013, the Company was authorized to issue common stock and Series A, Series B, Series C, Series D and Series E convertible preferred stock. Immediately prior to the completion of the Company’s initial public offering, all of the outstanding shares of convertible preferred stock automatically converted into 8,631,427 shares of common stock.

Common Stock

Each share of common stock is entitled to one vote. The holders of common stock are also entitled to receive dividends whenever funds are legally available and when declared by the board of directors, subject to the prior rights of holders of other classes of stock outstanding.

Preferred Stock

Pursuant to the amended and restated certificate of incorporation filed by the Company immediately prior to the completion of its initial public offering, the Company’s board of directors is authorized to issue up to 15,000,000 shares of preferred stock in one or more series and to fix the rights, preferences, privileges and restrictions thereof. These rights, preferences and privileges could include dividend rights, conversion rights, voting rights, redemption rights, liquidation preferences, sinking fund terms and the number of shares constituting any series or the designation of such series, any or all of which may be greater than the rights of common stock. The issuance of preferred stock could adversely affect the voting power of holders of common stock and the likelihood that such holders will receive dividend payments and payments upon liquidation. In addition, the issuance of preferred stock could have the effect of delaying, deferring or preventing change in the Company’s control or other corporate action. As of December 31, 2013, no shares of preferred stock were issued or outstanding, and the board of directors has not authorized or designated any rights, preferences, privileges and restrictions for any class of preferred stock.

Mandatorily Redeemable Convertible Preferred Stock

Prior to the completion of the Company’s initial public offering, the Company issued Series A, Series B, Series C, Series D and Series E convertible preferred stock (collectively, the “Preferred Stock”).

The convertible preferred stock contained a provision that at any time after November 29, 2017 and upon 30 day notice from the holders of 65% of the outstanding Preferred Stock, such holders could compel the Company to redeem, from any funds legally available, all or part of the Preferred Stock and any accumulated or declared but unpaid dividends thereon. The Company accordingly recorded the Preferred Stock as mandatorily redeemable securities.

The redemption value of the Preferred Stock was equal to the original issue price with interest compounded from the original issuance date to the first installment redemption date at a rate of 8% compounded quarterly. The Company recorded accretion related to issue costs and dividends of Series A, Series B, Series C, Series D and Series E preferred stock totaling approximately $4.7 million, $7.5 million and $5.3 million for the years ended December 31, 2013 and 2012 and 2011, respectively. The Company also accreted any related issuance costs or discounts.

Mandatorily redeemable convertible preferred stock at December 31, 2012 was as follows:


Mandatorily Redeemable Convertible Preferred Stock	Shares Authorized		Shares Outstanding		Liquidation Preference		Book Value
					(Amounts in thousands)
Series A		564,083		557,339	$	15,628	$	15,605
Series B		520,839		515,836		14,045		13,865
Series C		3,659,375		3,551,060		38,709		38,592
Series D		3,125,000		2,430,054		22,510		20,323
Series E		1,109,375		1,063,951		23,078		15,237

		8,978,672		8,118,240	$	113,970	$	103,622

Immediately prior to the completion of the Company’s initial public offering, each share of Series A preferred stock was converted into common stock on a 1.403030-for-one basis, each share of Series B preferred stock was converted into common stock on a 1.559429-for-one basis and each share of Series C, D and E preferred stock was converted into common stock on a one-for-one basis. The aggregate outstanding shares of convertible preferred stock automatically converted into 8,631,427 shares of common stock.

Warrants

As of December 31, 2012, there were a total of 604,563 warrants to purchase preferred stock outstanding. In April 2013, the Company issued warrants to purchase an aggregate of 10,418 shares of its Series E preferred stock with a term of 10 years. Prior to the completion of the initial public offering, the warrants to purchase preferred stock were recorded as liabilities and measured at fair value at each reporting date. The following information summarizes the carrying value of the warrants to purchase shares of the Company’s preferred stock:


	(In thousands)
Balance at December 31, 2010	$	42
Issuance of preferred stock warrants		2,528
Warrant revaluation		(73	)

Balance at December 31, 2011		2,497
Issuance of preferred stock warrants		648
Warrant revaluation		387

Balance at December 31, 2012		3,532
Issuance of preferred stock warrants		138
Warrant revaluation		(1,156	)
Reclassification to common stock warrants		(2,514	)

Balance at December 31, 2013	$	—

All preferred stock warrants were converted into warrants to purchase common stock upon the effectiveness of the initial public offering. The preferred stock warrant liability was reclassified to stockholders’ equity and recorded as common stock warrants upon the closing of the Company’s initial public offering. These warrants are no longer re-measured to fair value at each reporting date. As of December 31, 2013 there were 617,605 common stock warrants outstanding with a weighted average exercise price of $8.78 per common stock warrant.

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

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-Name Accounting Standards Codification

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-Article 4

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-Section 50

-Paragraph 4

-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21484-112644

Reference 18: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Regulation S-X (SX)

-Number 210

-Section 08

-Paragraph d

-Article 4

Reference 19: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 505

-SubTopic 30

-Section 50

-Paragraph 2

-URI http://asc.fasb.org/extlink&oid=6405834&loc=d3e23285-112656

+ Details

Stock Based Compensation

12 Months Ended

Dec. 31, 2013

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock Based Compensation

11. Stock Based Compensation

Stock Option Plans

The Company’s 2004 Stock Option Plan and 2013 Equity Incentive Plan authorize the grant of options to employees and consultants for up to 3,948,533 shares of the Company’s common stock as of December 31, 2013. All options granted have a ten-year term and generally vest and become exercisable over four years of continued employment or service as defined in each option agreement. The Board of Directors determines the option exercise price and may designate stock options granted as either incentive or nonstatutory stock options. The Company generally grants stock options to employees with exercise prices equal to the estimated fair value of the Company’s common stock on the date of grant.

A summary of the Company’s employee stock option activity and related information follows:


	Shares			Weighted- average exercise price per share		Weighted- average remaining contractual term (in years)		Aggregate intrinsic value (in thousands)
Outstanding at December 31, 2012		1,686,179		$	2.28		8.59	$	7,486
Granted		669,030			9.17
Canceled		(65,410	)		2.24
Exercised		(177,165	)		2.16

Outstanding at December 31, 2013		2,112,632		$	4.47		8.12	$	26,968

December 31, 2013:
Options vested and expected to vest		2,087,810		$	4.46		8.11	$	26,687
Options exercisable		872,414		$	2.48		7.39	$	12,875

The total fair value of stock options vested during the year ended December 31, 2013 was $920,000.

The following table summarizes information about the Company’s options outstanding at December 31, 2013:


	Options Outstanding				Options Exercisable
Exercise Price	Number of Shares		Weighted- Average Remaining Contractual Life in Years		Number of Shares		Weighted- Average Remaining Contractual Life in Years
$0.32 – 1.92		862,856		8.18		416,309		8.13
2.24 – 3.84		457,740		6.48		369,142		6.41
5.12 – 6.72		418,030		8.35		85,309		7.92
8.96 – 12.50		374,006		9.73		1,654		9.79

		2,112,632				872,414

The fair value of each employee option grant as of December 31 was estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions:

2013

2012

2011

Risk-free interest rates

1.05%–1.95%

0.85%–1.44%

2.2%–3.14%

Expected term (years)

6.25

Expected dividend yield

—

Volatility

57.0%–58.0%

54.0%–61.0%

73.0%

The risk-free interest rates are based on the implied yield currently available in U.S. Treasury securities at maturity with an equivalent term. For purposes of determining the expected term of the awards in the absence of sufficient historical data relating to stock-option exercises, the Company applies a simplified approach in which the expected term of an award is presumed to be the mid-point between the vesting date and the expiration date of the award. The Company has not declared or paid any dividends and does not currently expect to do so in the foreseeable future. The Company based its expected volatility on the estimated volatility of similar companies whose share prices are publicly available.

Options granted during the years ended December 31, 2013, 2012, 2011 were granted at exercise prices that the Company’s board of directors believed to be equal to the fair value of the common stock underlying such options on the date of grant. Prior to completion of its initial public offering, the Company assessed its estimate of fair value of its common stock for financial reporting purposes given the Company’s improving financial performance and prospects, evolving belief that an initial public offering was increasingly viable and the generally improving conditions in the capital markets. Following this assessment, it was determined that for financial reporting purposes the fair value of the Company’s common stock was higher than the board of directors’ fair market value estimate for certain options previously granted. In 2013 and 2012, the Company granted options of 101,487 and 988,268, respectively, that were subsequently determined to be granted at exercise prices that were less than the estimated per share value of the underlying common stock on the date of grant. The valuations of these stock options were adjusted to reflect the increase in estimated fair value of the underlying stock options. The weighted-average grant date fair value of options granted during the years ended December 31, 2013, 2012 and 2011 was $5.30, $1.59 and $1.83, respectively.

The aggregate intrinsic value for options exercised during the years ended December 31, 2013, 2012 and 2011 was $681,000, $161,000 and $0, respectively, determined as of the date of option exercise.

Stock compensation expense for the years ended December 31 was as follows:


	2013		2012		2011
	(In thousands)
Cost of revenue	$	49	$	71	$	4
Research and development		273		204		26
Selling, general and administrative		823		470		213

Total stock-based compensation expense	$	1,145	$	745	$	243

At December 31, 2013, the total unrecognized compensation cost was approximately $4.1 million and will be recognized on a straight-line basis over the weighted-average remaining service period of approximately three years.

- Definition

Tabular disclosure of components of a stock option or other award plan under which equity-based compensation is awarded to employees, typically comprised of the amount of unearned compensation (deferred compensation cost), compensation expense, and changes in the quantity and fair value of the shares (or other type of equity) granted, exercised, forfeited, and issued and outstanding pertaining to that plan. Disclosure may also include nature and general terms of such arrangements that existed during the period and potential effects of those arrangements on shareholders, effect of compensation cost arising from equity-based payment arrangements on the income statement, method of estimating the fair value of the goods or services received, or the fair value of the equity instruments granted, during the period, cash flow effects resulting from equity-based payment arrangements and, for registrants that accelerate vesting of out of the money share options, reasons for the decision to accelerate.

+ References+ Details

Income Taxes

12 Months Ended

Dec. 31, 2013

Income Tax Disclosure [Abstract]

Income Taxes

12. Income Taxes

Loss before income taxes for the years ended December 31 consisted of the following:


	2013			2012			2011
	(In thousands)
Domestic	$	(28,746	)	$	(17,618	)	$	(10,966	)
Foreign		(535	)		(90	)		34

Loss before income taxes	$	(29,281	)	$	(17,708	)	$	(10,932	)

Income tax expense (benefit) differed from the amounts computed by applying the statutory federal income tax rate of 34% to pretax loss as a result of the following for the years ended December 31:


	2013			2012			2011
	(In thousands)
Income tax provision at statutory rate	$	(9,955	)	$	(6,021	)	$	(3,717	)
Nondeductible items		(32	)		349			25
Change in tax credits		(893	)		39			(202	)
Change in valuation allowance		10,965			5,894			3,963
Other		(85	)		(261	)		(69	)

	$	—		$	—		$	—

At December 31, 2013, the Company had net operating loss carryforwards of approximately $92.6 million which will begin to expire in 2023 through 2033. In addition, at December 31, 2013, the Company had research and development tax credit carryforwards of approximately $2.2 million.

The Company does not expect to utilize any of its net operating loss and tax credit carryforwards in the near term. The Company may have already experienced one or more ownership changes. Depending on the timing of any future utilization of its carryforwards, the Company may be limited as to the amount that can be utilized each year as a result of such previous ownership changes. However, the Company does not believe such limitations will cause its carryforwards to expire unutilized. Future changes in the Company’s stock ownership as well as other changes that may be outside the Company’s control could potentially result in further limitations on the Company’s ability to utilize its net operating loss and tax credit carryforwards.

The effect of temporary differences and carryforwards that give rise to deferred tax assets for the years ended December 31 were as follows:


	2013			2012
	(In thousands)
Net operating loss carryforwards	$	31,989		$	21,569
Research and development tax credit carryforwards		1,654			761
Other		2,369			2,717

Total deferred tax assets		36,012			25,047
Less: Valuation allowance		(36,012	)		(25,047	)

Net deferred tax assets	$	—		$	—

The Company has recorded a full valuation allowance related to its deferred tax assets due to the uncertainty of the ultimate realization of the future benefits from those assets.

The table below summarizes changes in the deferred tax asset valuation allowance:


	Balance at Beginning of Year		Charged to Costs and Expenses		Write-offs		Balance at End of Year
	(In thousands)
Deferred tax valuation allowance:
For year ended December 31, 2011	$	15,190	$	3,963	$	—	$	19,153
For year ended December 31, 2012		19,153		5,894		—		25,047
For year ended December 31, 2013		25,047		10,965		—		36,012

The total balance of unrecognized gross tax benefits for the years ended December 31 was as follows:


	2013		2012			2011
	(In thousands)
Unrecognized tax benefits at beginning of year	$	253	$	267		$	199
Additions (reductions) based on current year tax positions		298		(14	)		68

Unrecognized tax benefits at end of year	$	551	$	253		$	267

The Company classifies applicable interest and penalties on amounts due to tax authorities as a component of the provision for income taxes. The amount of accrued interest and penalties recorded in 2013, 2012 or 2011 was not material. We do not anticipate that the amount of our existing unrecognized tax benefits will significantly increase or decrease within the next 12 months. Due to the presence of net operating loss carryforwards in most jurisdictions, our tax years remain open for examination by U.S. taxing authorities back to 2004.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References+ Details

Commitments and Contingencies

12 Months Ended

Dec. 31, 2013

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

13. Commitments and Contingencies

The Company leases its office space and certain office equipment under noncancelable operating leases. During 2011, the Company amended its existing office space lease to take additional space and extend the term of the office lease through August 2016. In December 2013, the Company entered into an additional office building lease. The initial term of the thirty-one month lease commences February 2014. The Company is obligated to pay approximately $264,000 in annual base rent in the first year, which shall increase by approximately 2.5% each year. Rent expense totaled approximately $1.2 million, $856,000 and $807,000 for the years ended December 31, 2013, 2012 and 2011, respectively.

The Company has purchase obligations totaling $3.0 million at December 31, 2013 related to binding commitments to purchase inventory.

Future minimum lease payments under noncancelable capital and operating leases as of December 31, 2013 were as follows:


	(In thousands)
2014	$	2,167
2015		2,295
2016		1,520
2017		—
2018		—

	$	5,982

From time to time, the Company may become involved in litigation relating to claims arising from the ordinary course of business. Management believes that there are no claims or actions pending against the Company currently, the ultimate disposition of which would have a material adverse effect on the Company’s consolidated results of operation, financial condition or cash flows.

- Definition

The entire disclosure for commitments and contingencies.

+ References+ Details

Net Loss Per Share

12 Months Ended

Dec. 31, 2013

Earnings Per Share [Abstract]

Net Loss Per Share

14. Net Loss Per Share

Net loss attributable to common stockholders per share is computed by dividing the net loss allocable to common stockholders by the weighted-average number of shares of common stock outstanding. Outstanding stock options, warrants and preferred stock, have not been included in the calculation of diluted net loss attributable to common stockholders per share because to do so would be anti-dilutive. Accordingly, the numerator and the denominator used in computing both basic and diluted net loss per share for each period are the same.

The following table as of December 31 provides a reconciliation of the numerator and denominator used in computing basic and diluted net loss per share:


	2013			2012			2011
	(In thousands)
Numerator:
Net loss	$	(29,281	)	$	(17,708	)	$	(10,932	)
Accretion of mandatorily redeemable convertible preferred stock		(4,653	)		(7,533	)		(5,251	)

Net loss attributable to common stockholders	$	(33,934	)	$	(25,241	)	$	(16,183	)

Denominator:
Weighted-average common shares outstanding-basic and diluted		7,643			355			323

The following outstanding options, warrants and preferred stock as of December 31 were excluded from the computation of diluted net loss per share for the periods presented because their effect would have been anti-dilutive:


	2013		2012		2011
	(In thousands)
Options to purchase common stock		2,113		1,686		686
Convertible preferred stock (as converted)		—		8,631		7,567
Convertible preferred stock warrants (as converted)		—		607		509
Common stock warrant		618		—		1

- Definition

The entire disclosure for earnings per share.

+ References+ Details

Information about Geographic Areas

12 Months Ended

Dec. 31, 2013

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Information about Geographic Areas

15. Information about Geographic Areas

The following table is based on the geographic location of distributors or end users who purchased products and services. For sales to distributors, their geographic location may be different from the geographic locations of the ultimate end user. Revenue by geography as of December 31 was as follows:


	2013		2012		2011
	(In thousands)
North America	$	21,855	$	15,906	$	14,044
Europe & Middle East		5,775		4,167		2,918
Asia Pacific		3,773		2,900		838

Total revenue	$	31,403	$	22,973	$	17,800

Total revenue in the United States was $19.3 million, $14.9 million and $13.5 million for the years ended December 31, 2013, 2012 and 2011, respectively.

The Company’s assets are primarily located in the United States and not allocated to any specific geographic region. All of the Company’s long-lived assets are located in the United States.

Condensed Quarterly Financial Data

12 Months Ended

Dec. 31, 2013

Quarterly Financial Information Disclosure [Abstract]

Condensed Quarterly Financial Data

16. Condensed Quarterly Financial Data (unaudited)

The following table contains selected unaudited financial data for each quarter of 2013 and 2012. The unaudited information should be read in conjunction with the Company’s financial statements and related notes included elsewhere in this report. The Company believes that the following unaudited information reflects all normal recurring adjustments necessary for a fair presentation of the information for the periods presented. The operating results for any quarter are not necessarily indicative of results for any future period.


	Three months ended
	March 31,			June 30,			September 30,			December 31,
	(in thousands, except per share data)
2013
Total revenue	$	5,676		$	7,218		$	8,389		$	10,120
Net loss attributable to common stockholders	$	(9,601	)	$	(7,806	)	$	(7,700	)	$	(8,827	)
Net loss per share—basic and diluted	$	(17.88	)	$	(13.69	)	$	(0.53	)	$	(0.60	)
2012
Total revenue	$	4,502		$	5,943		$	6,035		$	6,493
Net loss attributable to common stockholders	$	(5,403	)	$	(5,415	)	$	(6,544	)	$	(7,879	)
Net loss per share—basic and diluted	$	(16.52	)	$	(16.02	)	$	(18.28	)	$	(19.85	)

- Definition

The entire disclosure for the quarterly financial data in the annual financial statements. The disclosure may include a tabular presentation of financial information for each fiscal quarter for the current and previous year, including revenues, gross profit, income or loss before extraordinary items and earnings per share data. It also includes an indication if the information in the note is unaudited, comments on the aggregate effect of year-end adjustments, and an explanation of matters or transactions that affect comparability or are pertinent to an understanding of the information furnished.

+ References+ Details

Subsequent Events	12 Months Ended
Subsequent Events	Dec. 31, 2013
Subsequent Events [Abstract]
Subsequent Events	17. Subsequent Events In January 2014, the Company completed an underwritten public offering of 2,972,972 shares of common stock for total gross proceeds of $55.0 million. In February 2014, the underwriters partially exercised an overallotment option, purchasing 345,945 additional shares from the Company for additional gross proceeds of $6.4 million. After underwriters’ fees and commissions and other expenses of the offering, the Company’s aggregate net proceeds were approximately $57 million. In January 2014, the Company entered into a non-binding letter of intent for a term loan agreement with a lender which would allow it to refinance its existing credit facility and potentially incur up to an aggregate of $45 million in term loan borrowings or up to an aggregate of approximately $52 million if it elected to exercise in full an option to pay in kind a portion of the interest that would accrue on the borrowings under the term loan agreement. The Company expects this term loan agreement will contain customary conditions to borrowings, events of default and negative covenants, including covenants that could limit its ability to, among other things, incur additional indebtedness, liens or other encumbrances, make dividends or other distributions, and buy, sell or transfer assets. The Company also expects that the term loan agreement will include liquidity and revenue-based financial covenants. The Company’s obligations under the term loan agreement will be secured by substantially all of its assets. However, there can be no assurance that the Company will successfully enter into this term loan agreement.

Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2013

Accounting Policies [Abstract]

Accounting Principles

Accounting Principles

The consolidated financial statements and accompanying notes were prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

Principles of Consolidation

Principles of Consolidation

Use of Estimates

Use of Estimates

Cash and Cash Equivalents

Cash and Cash Equivalents

Investments

Investments

Accounts Receivable and Allowance for Doubtful Accounts

Accounts Receivable and Allowance for Doubtful Accounts

Concentration of Credit Risks

Concentration of Credit Risks

The Company did not have any customers that individually represented more than 10% of total revenue during the years ended December 31, 2013, 2012 and 2011.

The Company had no customers that represented more than 10% of total accounts receivable at December 31, 2013 and 2012.

Fair Value of Financial Instruments

Fair value of financial instruments

Inventory

Inventory

Property and Equipment

Property and Equipment

Leases and Leasehold Improvements

Leases and Leasehold Improvements

Impairment of Long-Lived Assets

Impairment of Long-Lived Assets

Deferred Offering Costs

Deferred Offering Costs

Segments

Segments

Revenue Recognition

Revenue Recognition

Cost of Revenue

Cost of Revenue

Reserve for Product Warranties

Reserve for Product Warranties

Changes in the Company’s warranty reserve and related costs were as follows:


	(In thousands)
Warranty reserve, December 31, 2010	$	63
Cost of warranty claims		(518	)
Warranty accrual		622

Warranty reserve, December 31, 2011		167
Cost of warranty claims		(244	)
Warranty accrual		325