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Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Mar. 31, 2013	Apr. 26, 2013
Document and Entity Information [Abstract]
Entity Registrant Name	AtriCure, Inc.
Entity Central Index Key	0001323885
Document Type	10-Q
Document Period End Date	Mar. 31, 2013
Amendment Flag	false
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q1
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock Shares Outstanding		20,931,827

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Mar. 31, 2013	Dec. 31, 2012
Current assets:
Cash and cash equivalents	$ 30,784	$ 7,753
Short-term investments	5,245	4,247
Accounts receivable, less allowance for doubtful accounts of $55 and $49, respectively	11,135	9,948
Inventories	5,693	5,718
Other current assets	1,500	873
Total current assets	54,357	28,539
Property and equipment, net	3,455	3,430
Intangible assets	29	32
Other assets	286	430
Total Assets	58,127	32,431
Current liabilities:
Accounts payable	5,429	5,103
Accrued liabilities	5,235	5,073
Current maturities of long-term debt and capital lease obligations	2,030	2,029
Total current liabilities	12,694	12,205
Long-term debt and capital lease obligations	5,899	6,407
Other liabilities	934	1,319
Total Liabilities	19,527	19,931
Commitments and contingencies (Note 7)
Stockholders' Equity:
Common stock, $.001 par value, 90,000 shares authorized and 20,901 and 16,896 issued and outstanding, respectively	21	17
Additional paid-in capital	151,340	123,157
Accumulated other comprehensive income (loss)	(67)	77
Accumulated deficit	(112,694)	(110,751)
Total Stockholders' Equity	38,600	12,500
Total Liabilities and Stockholders' Equity	$ 58,127	$ 32,431

Condensed Consolidated Balance Sheets (Parenthetical) (Unaudited) - USD ($) $ in Thousands	Mar. 31, 2013	Dec. 31, 2012
Condensed Consolidated Balance Sheets [Abstract]
Accounts receivable, allowance for doubtful accounts	$ 55	$ 49
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	90,000	90,000
Common stock, shares issued	20,901	16,896
Common stock, shares outstanding	20,901	16,896

Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Condensed Consolidated Statements of Operations and Comprehensive Loss [Abstract]
Revenue	$ 19,430	$ 17,476
Cost of revenue	5,344	4,724
Gross profit	14,086	12,752
Operating expenses:
Research and development expenses	3,506	3,389
Selling, general and administrative expenses	12,380	10,859
Total operating expenses	15,886	14,248
Loss from operations	(1,800)	(1,496)
Other income (expense):
Interest expense	(173)	(224)
Interest income	4	2
Other	31	101
Loss before income tax expense	(1,938)	(1,617)
Income tax expense	5	3
Net loss	$ (1,943)	$ (1,620)
Basic and diluted net loss per share	$ (0.10)	$ (0.10)
Weighted average shares outstanding - basic and diluted	19,544	16,016
Comprehensive loss:
Unrealized losses on investments	$ 0	$ (1)
Foreign currency translation adjustment	(144)	55
Other comprehensive (loss) income	(144)	54
Net loss	(1,943)	(1,620)
Comprehensive loss	$ (2,087)	$ (1,566)

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Cash flows from operating activities:
Net loss	$ (1,943)	$ (1,620)
Adjustments to reconcile net loss to net cash used in operating activities:
Share-based compensation expense	518	688
Depreciation	458	476
Loss (gain) on disposal of equipment	15	(13)
Amortization of deferred financing costs	21	52
Amortization of intangible assets	3	3
Amortization/accretion on investments	(3)	11
Change in allowance for doubtful accounts	8	14
Changes in assets and liabilities:
Accounts receivable	(1,231)	(177)
Inventories	(1)	(450)
Other current assets	(634)	(133)
Accounts payable	278	(65)
Accrued liabilities	(190)	193
Other non-current assets and non-current liabilities	127	(63)
Net cash used in operating activities	(2,574)	(1,084)
Cash flows from investing activities:
Purchases of property and equipment	(455)	(662)
Purchases of available-for-sale securities	(2,549)	(1,496)
Maturities of available-for-sale securities	1,555	1,437
Net proceeds from the sale of equipment		24
Net cash used in investing activities	(1,449)	(697)
Cash flows from financing activities:
Proceeds from sale of stock, net of offering costs of $172	26,912
Proceeds from debt borrowings		10,000
Payments on debt and capital leases	(507)	(6,552)
Payment of debt fees	(25)	(25)
Proceeds from stock option exercises	1,002	213
Shares repurchased for payment of taxes on stock awards	(245)	(198)
Net cash provided by financing activities	27,137	3,438
Effect of exchange rate changes on cash and cash equivalents	(83)	2
Net increase in cash and cash equivalents	23,031	1,659
Cash and cash equivalents - beginning of period	7,753	9,759
Cash and cash equivalents - end of period	30,784	11,418
Supplemental cash flow information:
Cash paid for interest	140	128
Cash paid for taxes	30	12
Non-cash investing and financing activities:
Accrued purchases of property and equipment	$ 72	$ 55

Condensed Consolidated Statements of Cash Flows (Parenthetical) (Unaudited) $ in Thousands	3 Months Ended
	Mar. 31, 2013 USD ($)
Condensed Consolidated Statements of Cash Flows [Abstract]
Offering cost for sale of stock	$ 172

Description of Business and Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2013

Description of Business and Summary of Significant Accounting Policies [Abstract]

DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of the Business—AtriCure, Inc. (the “Company” or “AtriCure”) was incorporated in the State of Delaware on October 31, 2000. The Company provides innovative Atrial Fibrillation (“AF”) solutions designed to produce superior outcomes that reduce the economic and social burden of AF. The Company sells its products to hospitals and medical centers globally.

Basis of Presentation—The accompanying interim financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”). The accompanying interim financial statements are unaudited, but in the opinion of the Company’s management, contain all of the normal, recurring adjustments considered necessary to present fairly the financial position, results of operations and cash flows for the periods presented in conformity with generally accepted accounting principles applicable to interim periods. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been omitted or condensed. The Company believes the disclosures herein are adequate to make the information presented not misleading. Results of operations are not necessarily indicative of the results expected for the full fiscal year or for any future period.

The accompanying Condensed Consolidated Financial Statements should be read in conjunction with the audited financial statements of the Company included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012 filed with the SEC.

Principles of Consolidation—The Condensed Consolidated Financial Statements include the accounts of the Company, AtriCure, LLC, the Company’s wholly-owned subsidiary organized in the State of Delaware, and AtriCure Europe B.V. (“AtriCure Europe”), the Company’s wholly-owned subsidiary incorporated in the Netherlands. All intercompany accounts and transactions have been eliminated in consolidation.

Cash and Cash Equivalents—The Company considers highly liquid investments with maturities of three months or less at the date of acquisition as cash equivalents.

Investments—The Company places its investments primarily in U.S. Government agencies and securities, corporate bonds and commercial paper. The Company classifies all investments as available-for-sale. Investments with maturities of less than one year are classified as short-term investments. Investments are recorded at fair value, with unrealized gains and losses recorded as a separate component of stockholders’ equity. The Company recognizes gains and losses when these securities are sold using the specific identification method and includes them in interest income or expense in the Condensed Consolidated Statements of Operations and Comprehensive Loss.

Revenue Recognition—The Company accounts for revenue in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 605, “Revenue Recognition” (“ASC 605”). The Company determines the timing of revenue recognition based upon factors such as passage of title, installation, payment terms and ability to return products. The Company recognizes revenue when all of the following criteria are met: (i) there is persuasive evidence that an arrangement exists; (ii) delivery of the products and/or services has occurred; (iii) the selling price is fixed or determinable; and (iv) collectability is reasonably assured.

Revenue is generated from the sale of the Company’s surgical devices. The Company’s surgical devices consist primarily of individual disposable handpieces and equipment generators. The Company’s customers need the combination of the generator and the handpieces to have a functional system. The Company believes that the generator and handpiece are considered a single unit of accounting under ASC 605 because neither the generator nor handpiece have value to the customer on a standalone basis. Therefore, because the customer needs both the generator and handpiece to have a functional system, revenue is recognized upon the later of delivery of the generator or the handpiece.

Pursuant to the Company’s standard terms of sale, revenue is recognized when title to the goods and risk of loss transfers to customers and there are no remaining obligations that will affect the customers’ final acceptance of the sale. Generally, the Company’s standard terms of sale define the transfer of title and risk of loss to occur upon shipment to the respective customer. The Company generally does not maintain any post-shipping obligations to the recipients of the products. No installation, calibration or testing of this equipment is performed by the Company subsequent to shipment to the customer in order to render it operational.

Product revenue includes shipping and handling revenue of $192 and $190 for the three months ended March 31, 2013 and 2012, respectively. Cost of freight for shipments made to customers is included in cost of revenue. Sales and other value-added taxes collected from customers and remitted to governmental authorities are excluded from revenue. The Company sells its products primarily through a direct sales force, with certain international markets sold through distributors. Terms of sale are generally consistent for both end-users and distributors except that payment terms are generally net 30 days for end-users and net 60 days for distributors.

Sales Returns and Allowances—The Company maintains a provision for sales returns and allowances to account for potential returns of defective or damaged products, products shipped in error and price adjustments. The Company estimates such provision quarterly based primarily on a specific identification basis, in addition to estimating a general reserve. Increases to the provision result in a reduction of revenue. The provision is included in accrued liabilities in the Condensed Consolidated Balance Sheets.

Allowance for Doubtful Accounts Receivable—The Company evaluates the collectability of accounts receivable in order to determine the appropriate reserve for doubtful accounts. In determining the amount of the reserve, the Company considers aging of account balances, historical credit losses, customer-specific information and other relevant factors. An increase to the allowance for doubtful accounts results in a corresponding increase in expense. The Company reviews accounts receivable and adjusts the allowance based on current circumstances and charges off uncollectible receivables against the allowance when all attempts to collect the receivable have failed. The Company’s history of write-offs against the allowance has not been significant.

Inventories—Inventories are stated at the lower of cost or market using the first-in, first-out cost method (“FIFO”) and consist of raw materials, work in process and finished goods. The Company’s industry is characterized by rapid product development and frequent new product introductions. Uncertain timing of product approvals, variability in product launch strategies and variation in product utilization all impact excess and obsolete inventory. An inventory reserve based on product usage is estimated and recorded quarterly for excess, slow moving and obsolete inventory, as well as inventory with a carrying value in excess of its net realizable value. Write-offs are recorded when a product is destroyed. The Company’s history of write-offs against the reserve has not been significant.

Inventories consist of the following:


	March 31, 2013		December 31, 2012
Raw materials	$	2,553	$	3,066
Work in process		1,039		675
Finished goods		2,101		1,977

Inventories	$	5,693	$	5,718

Property and Equipment—Property and equipment is stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method of depreciation for financial reporting purposes and applied over the estimated useful lives of the assets. The estimated useful life by major asset category is the following: machinery and equipment is three to seven years, computer and other office equipment is three years, furniture and fixtures is three to seven years and leasehold improvements and equipment leased under a capital lease are the shorter of their useful life or remaining lease term. The Company reassesses useful lives of property and equipment annually, and assets are retired if they are no longer being used. Maintenance and repair costs are expensed as incurred.

Included in property and equipment are generators and other capital equipment (such as the Company’s switchbox units and cryosurgical consoles) that are loaned at no cost to direct customers that use the Company’s disposable products. These generators are depreciated over a period of one to three years, which approximates their useful lives, and such depreciation is included in cost of revenue. The estimated useful lives of this equipment are based on anticipated usage by our customers and the timing and impact of expected new technology rollouts by the Company. To the extent the Company experiences changes in the usage of this equipment or introductions of new technologies, the estimated useful lives of this equipment may change in a future period. Depreciation related to these generators was $270 and $317 for the three months ended March 31, 2013 and 2012, respectively. As of March 31, 2013 and December 31, 2012, the net carrying amount of loaned equipment included in net property and equipment in the Condensed Consolidated Balance Sheets was $2,243 and $2,197, respectively.

Impairment of Long-Lived Assets—The Company reviews property and equipment annually for impairment using its best estimates based on reasonable and supportable assumptions and projections.

Intangible Assets—Intangible assets with determinable useful lives are amortized on a straight-line basis over the estimated periods benefited, which range from four to eight years.

Other Income—Other income consists primarily of foreign currency transaction gains and losses, grant income and non-employee option gains and losses related to the fair market value change for fully vested options outstanding for consultants which are accounted for as free-standing derivatives. The Company recorded foreign currency transaction gains of $45 and $3 for the three months ended March 31, 2013 and 2012, respectively, in connection with settlements of its intercompany balance with AtriCure Europe.

The Company periodically is awarded grants to support research and development activities. The Company recognizes grant income when the funds are earned. The Company recorded grant income of $0 and $60 during the three months ended March 31, 2013 and 2012, respectively.

The Company historically issued stock options to non-employee consultants as a form of compensation for services provided to the Company. Because the non-employee options require settlement by the Company’s delivery of registered shares and because the tax withholding provisions in the awards allow the options to be partially net-cash settled, these options, when vested, are no longer eligible for equity classification and are, thus, subsequently accounted for as derivative liabilities under FASB ASC 815, “Derivatives and Hedging” (“ASC 815”) until the awards are ultimately either exercised or forfeited. Accordingly, the vested non-employee options are classified as liabilities and remeasured at fair value through earnings at each reporting period. During the three months ended March 31, 2013 and 2012, $14 and $37, respectively, of expense was recorded as a result of the remeasurement of the fair value of these fully vested stock options.

Taxes—Income taxes are computed using the asset and liability method in accordance with FASB ASC 740, “Income Taxes” (“ASC 740”), under which deferred income taxes are provided for the temporary differences between the financial reporting basis and the tax basis of the Company’s assets and liabilities. Deferred taxes are measured using provisions of currently enacted tax laws. A valuation allowance against deferred tax assets is recorded when it is more likely than not that such assets will not be fully realized. Tax credits are accounted for as a reduction of income taxes in the year in which the credit originates.

The Company’s estimate of the valuation allowance for deferred tax assets requires it to make significant estimates and judgments about its future operating results. The Company’s ability to realize the deferred tax assets depends on its future taxable income as well as limitations on their utilization. A deferred tax asset is reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax asset will not be realized prior to its expiration. The projections of the Company’s operating results on which the establishment of a valuation allowance is based involve significant estimates regarding future demand for the Company’s products, competitive conditions, product development efforts, approvals of regulatory agencies and product cost. If actual results differ from these projections, or if the Company’s expectations of future results change, it may be necessary to adjust the valuation allowance. In evaluating whether to record a valuation allowance, the applicable accounting standards deem that the existence of cumulative losses in recent years is a significant piece of objectively verifiable negative evidence that must be overcome by objectively verifiable positive evidence to avoid the need to record a valuation allowance. The Company has recorded a full valuation allowance against its net deferred tax assets as it is more likely than not that the benefit of the deferred tax assets will not be recognized in future periods.

A provision of The Patient Protection and Affordable Care Act enacted in 2010, as amended, (the “Patient Act”) requires manufacturers of medical devices to pay a 2.3% excise tax on all U.S. medical device sales beginning in January 2013. The Company’s expense related to the medical device excise tax was $120 for the three months ended March 31, 2013 and was recorded in cost of revenue.

Net Loss Per Share—Basic and diluted net loss per share is computed in accordance with FASB ASC 260, “Earnings Per Share” (“ASC 260”) by dividing the net loss by the weighted average number of common shares outstanding during the period. Since the Company has experienced net losses for all periods presented, net loss per share excludes the effect of 2,766 and 3,083 options, restricted stock and performance-based shares as of March 31, 2013 and 2012, respectively, because they are anti-dilutive. Therefore the number of shares calculated for basic net loss per share is also used for the diluted net loss per share calculation.

Comprehensive Loss and Accumulated Other Comprehensive Income (Loss)—In addition to net losses, the comprehensive loss includes foreign currency exchange rate adjustments and unrealized gains and losses on investments.

Accumulated other comprehensive income (loss) consisted of the following:


	Unrealized Gains on Short- Term Investments		Foreign Currency Translation Adjustment			Accumulated Other Comprehensive Income (Loss)
Balance as of December 31, 2012	$	1	$	76		$	77
Other comprehensive income before reclassifications		0		(189	)		(189	)
Amounts reclassified from accumulated other comprehensive income to other income on the statement of operations		0		45			45

Net current-period other comprehensive income		0		(144	)		(144	)

Balance as of March 31, 2013	$	1	$	(68	)	$	(67	)

Research and Development—Research and development costs are expensed as incurred. These costs include compensation and other internal and external costs associated with the development and research related to new products or concepts, preclinical studies, clinical trials and the cost of products used in trials and tests.

Share-Based Compensation—The Company follows FASB ASC 718, “Compensation-Stock Compensation” (“ASC 718”) to record share-based compensation for all employee share-based payment awards, including stock options, restricted stock, performance shares and stock purchases related to an employee stock purchase plan, based on estimated fair values. The Company’s share-based compensation expense recognized under ASC 718 for the three months ended March 31, 2013 and 2012 was $518 and $688, respectively, on a before and after tax basis.

FASB ASC 718 requires companies to estimate the fair value of share-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods in the Company’s Consolidated Statement of Operations. The expense has been reduced for estimated forfeitures. FASB ASC 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

The Company estimates the fair value of time-based options on the date of grant using the Black-Scholes option-pricing model (“Black-Scholes model”). The Company’s determination of fair value of share-based payment awards on the date of grant using an option-pricing model is affected by the Company’s stock price, as well as assumptions regarding a number of highly complex and subjective variables. These variables include but are not limited to the Company’s expected stock price volatility over the term of the awards and actual and projected employee stock option exercise behaviors. For non-employee options, the fair value at the date of grant is subject to adjustment at each vesting date based upon the fair value of the Company’s common stock. The fair value of our market-based performance option grants is estimated at the date of grant using a Monte-Carlo simulation. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods in our Condensed Consolidated Statements of Operations and Comprehensive Loss. The expense has been reduced for estimated forfeitures.

The Company estimates the fair value of restricted stock based upon the grant date closing market price of the Company’s common stock. The Company’s determination of fair value is affected by the Company’s stock price as well as assumptions regarding the number of shares expected to be granted.

The Company also has an employee stock purchase plan (“ESPP” or the “Plan”) which is available to all eligible employees as defined by the Plan. Under the ESPP, shares of the Company’s common stock may be purchased at a discount. The Company estimates the number of shares to be purchased under the Plan and records compensation expense based upon the fair value of the stock at the beginning of the purchase period using the Black-Scholes model.

The Company has historically issued stock options to non-employee consultants as a form of compensation for services provided to the Company. The Company accounts for the options granted to non-employees prior to their vesting date in accordance with ASC 505-50, “Equity-Based Payments to Non-Employees” (“ASC 505-50”). Because these options do not contain specific performance provisions, there is no measurement date of fair value until the options vest. Therefore, the fair value of the options granted and outstanding prior to their vesting date is remeasured each reporting period.

Fully vested options to acquire 38 shares of common stock held by non-employee consultants remained unexercised as of both March 31, 2013 and December 31, 2012. A liability of $92 and $78 was included in accrued liabilities in the Condensed Consolidated Balance Sheets as of March 31, 2013 and December 31, 2012, respectively.

Use of Estimates—The preparation of the financial statements in conformity with 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 financial statements and the reported amounts of revenue and expense during the reporting period. Actual results could differ from those estimates.

Fair Value Disclosures—The book value of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, short-term investments, short and long-term other assets, accounts payable, accrued expenses, other liabilities and fixed interest rate debt, approximate their fair values. The Company classifies cash and short-term investments in U.S. government agencies and securities as Level 1 within the fair value hierarchy. Accounts receivable, short-term other assets, accounts payable and accrued expenses are also classified as Level 1. The carrying amounts of these assets and liabilities approximate their fair value due to their relatively short-term nature. Other assets and other liabilities are classified as Level 1 within the fair value hierarchy. Cash equivalents and short-term investments in commercial paper are classified as Level 2 within the fair value hierarchy (see Note 3 – “Fair Value” for further information). Fixed interest rate debt fair value is determined by calculating the net present value of future debt payments and is classified as Level 2. Significant unobservable inputs with respect to the fair value measurement of the Level 3 non-employee stock options are developed using Company data. When an input is changed, the Black-Scholes model is updated and the results are analyzed for reasonableness.

- Definition

The entire disclosure for the organization, consolidation and basis of presentation of financial statements disclosure, and significant accounting policies of the reporting entity. May be provided in more than one note to the financial statements, as long as users are provided with an understanding of (1) the significant judgments and assumptions made by an enterprise in determining whether it must consolidate a VIE and/or disclose information about its involvement with a VIE, (2) the nature of restrictions on a consolidated VIE's assets reported by an enterprise in its statement of financial position, including the carrying amounts of such assets, (3) the nature of, and changes in, the risks associated with an enterprise's involvement with the VIE, and (4) how an enterprise's involvement with the VIE affects the enterprise's financial position, financial performance, and cash flows. Describes procedure if disclosures are provided in more than one note to the financial statements.

+ References + Details

Recent Accounting Pronouncements

3 Months Ended

Mar. 31, 2013

Recent Accounting Pronouncements [Abstract]

RECENT ACCOUNTING PRONOUNCEMENTS

2. RECENT ACCOUNTING PRONOUNCEMENTS

In February 2013 the FASB issued FASB Accounting Standards Update (“ASU”) 2013-02, “Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income”. This new guidance requires presentation of the effect of significant amounts reclassified from each component of accumulated other comprehensive income based on its source and the income statement line items affected by the reclassification. If a component is not required to be reclassified to net income in its entirety, a cross reference to the related footnote for additional information will be required. This ASU is effective for interim and annual reporting periods beginning after December 15, 2012. The Company has evaluated the provisions of ASU 2013-02 and determined that the new guidance does not have a material impact on the Company’s financial reporting.

- Definition

The entire disclosure of changes in accounting principles, including adoption of new accounting pronouncements, that describes the new methods, amount and effects on financial statement line items.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Direct Effects of a Change in Accounting Principle
-URI http://asc.fasb.org/extlink&oid=6510796

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Change in Accounting Principle
-URI http://asc.fasb.org/extlink&oid=6507316

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6801783&loc=d3e22583-107794

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Indirect Effects of a Change in Accounting Principle
-URI http://asc.fasb.org/extlink&oid=6515603

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 270
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.10-01.(b)(6))
-URI http://asc.fasb.org/extlink&oid=6958853&loc=d3e46468-122699

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6801783&loc=d3e22580-107794

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Accounting Change
-URI http://asc.fasb.org/extlink&oid=6503790

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6801783&loc=d3e22499-107794

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Retrospective Application
-URI http://asc.fasb.org/extlink&oid=6523989

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 270
-SubTopic 10
-Section 45
-Paragraph 12
-URI http://asc.fasb.org/extlink&oid=6372559&loc=d3e725-108305

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 270
-SubTopic 10
-Section 45
-Paragraph 13
-URI http://asc.fasb.org/extlink&oid=6372559&loc=d3e765-108305

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 01
-Paragraph b
-Subparagraph 6
-Article 10

+ Details

Fair Value

3 Months Ended

Mar. 31, 2013

Fair Value [Abstract]

FAIR VALUE

3. FAIR VALUE

FASB ASC 820, “Fair Value Measurements and Disclosures” (“ASC 820”) defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are the following:

•

Level 1—Quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. An active market for the asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. The valuation under this approach does not entail a significant degree of judgment.

•

Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. The valuation technique for the Company’s Level 2 assets is based on quoted market prices for similar assets from observable pricing sources at the reporting date.

•

Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Unobservable inputs shall be used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date. The fair value of the Company’s Level 3 investments are estimated on the grant date using the Black-Scholes model and they are revalued at the end of each reporting period using the Black-Scholes model.

In accordance with ASC 820, the following table represents the Company’s fair value hierarchy for its financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2013:


	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)		Total
Assets:
Money market funds	$	—	$	28,116	$	—	$	28,116
Commercial paper		—		4,244		—		4,244
U.S. government agencies and securities		1,001		—		—		1,001

Total assets	$	1,001	$	32,360	$	—	$	33,361

Liabilities:
Derivative instruments	$	—	$	—	$	92	$	92

Total liabilities	$	—	$	—	$	92	$	92

There were no changes in the levels of financial assets and liabilities during the three months ended March 31, 2013.


	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)		Total
Assets:
Money market funds	$	—	$	5,261	$	—	$	5,261
Commercial paper		—		3,247		—		3,247
U.S. government agencies and securities		1,000		—		—		1,000

Total assets	$	1,000	$	8,508	$	—	$	9,508

Liabilities:
Derivative instruments	$	—	$	—	$	78	$	78

Total liabilities	$	—	$	—	$	78	$	78

The fair value of the Level 3 liabilities is estimated using the Black-Scholes model including the following assumptions:


	As of March 31, 2013	As of December 31, 2012
Risk free interest rate	0.20%–0.74%	0.23%–0.74%
Expected life of option (years)	1.50–4.86	1.75–5.10
Expected volatility of stock	69.00%	70.00%
Dividend yield	0.00%	0.00%

The Company historically issued stock options to non-employee consultants as a form of compensation for services provided to the Company. Once these non-employee options have vested, the awards no longer fall within the scope of ASC 505-50. Because the options require settlement by the Company’s delivery of registered shares and because the tax withholding provisions in the awards allow the options to be partially net-cash settled, these vested options are no longer eligible for equity classification and are, thus, accounted for as derivative liabilities under FASB ASC 815 until the awards are ultimately either exercised or forfeited. Accordingly, the vested non-employee options are classified as liabilities and remeasured at fair value through earnings at each reporting period. In calculating the fair value of the options, they are estimated on the grant date using the Black-Scholes model subject to change in stock price utilizing assumptions of risk-free interest rate, contractual life of option, expected volatility, weighted average volatility and dividend yield. Due to the lack of certain observable market quotes, the Company utilizes valuation models that rely on some Level 3 inputs. The Company’s estimate of volatility is based on the Company’s trading history. In accordance with ASC 820, the following table represents the Company’s Level 3 fair value measurements using significant other unobservable inputs for derivative instruments as of March 31, 2013:


Beginning Balance–January 1, 2013	$	78
Total gains/losses (realized/unrealized) included in earnings		14
Purchases (exercises)		—
Reclassification from equity to liability when fully vested		—

Ending Balance–March 31, 2013	$	92

Gains included in earnings (or changes in net assets attributable to the change in unrealized gains relating to assets held at reporting date)	$	(14	)

In accordance with ASC 820, the following table represents the Company’s Level 3 fair value measurements using significant other unobservable inputs for derivative instruments as of December 31, 2012:


Beginning Balance–January 1, 2012	$	208
Total gains/losses (realized/unrealized) included in earnings		(179	)
Purchases (exercises)		(50	)
Reclassification from equity to liability when fully vested		99

Ending Balance–December 31, 2012	$	78

Losses included in earnings (or changes in net assets attributable to the change in unrealized losses relating to assets held at reporting date)	$	179

- 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

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 820
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=7578670&loc=d3e19207-110258

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 30
-URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14172-108612

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 21
-URI http://asc.fasb.org/extlink&oid=7491637&loc=d3e13537-108611

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 28
-URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14064-108612

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 16
-URI http://asc.fasb.org/extlink&oid=7491637&loc=d3e13504-108611

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=7491637&loc=d3e13433-108611

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 15B
-Subparagraph a, b
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 133
-Paragraph 44A, 44B
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 159
-Paragraph 17-22, 27, 28
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 15A
-Subparagraph a-d
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 15C, 15D
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 157
-Paragraph 32, 33, 34
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 3, 10, 14, 15
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

Intangible Assets

3 Months Ended

Mar. 31, 2013

Intangible Assets [Abstract]

INTANGIBLE ASSETS

4. INTANGIBLE ASSETS

Intangible assets with definite lives are amortized over their estimated useful lives. The following table provides a summary of the Company’s intangible assets with definite lives:


	Non-Compete Agreement
Net carrying amount as of December 31, 2011	$	45
Amortization		(13	)

Net carrying amount as of December 31, 2012		32
Amortization		(3	)

Net carrying amount as of March 31, 2013	$	29

The Company’s amortization term for a non-compete agreement is eight years. Amortization expense related to intangible assets with definite lives was $3 for both the three months ended March 31, 2013 and 2012.

Estimated future amortization expense related to intangible assets with definite lives is as follows:


Year	Amortization
2013	$	10
2014		12
2015		7

Total	$	29

Accrued Liabilities

3 Months Ended

Mar. 31, 2013

Accrued Liabilities [Abstract]

ACCRUED LIABILITIES

5. ACCRUED LIABILITIES

Accrued liabilities consisted of the following:


	March 31, 2013		December 31, 2012
Accrued commissions	$	1,553	$	1,464
Accrued settlement reserve (current portion)		1,241		1,120
Accrued bonus		411		487
Other accrued liabilities		393		386
Accrued vacation		367		349
Accrued taxes and value-added taxes payable		357		366
Stock purchase plan withholdings		197		97
Accrued payroll		189		153
Accrued royalty		140		118
Withheld payroll taxes		115		126
Sales/returns allowance—trade		105		105
Accrued non-employee stock options		92		78
Accrued severance		75		224

Total	$	5,235	$	5,073

Indebtedness

3 Months Ended

Mar. 31, 2013

Indebtedness [Abstract]

INDEBTEDNESS

6. INDEBTEDNESS

The Company has had a debt agreement with Silicon Valley Bank (“SVB”) since May 1, 2009. The agreement, as amended, restated and modified, includes a $10,000 term loan which matures on February 2, 2017 and a $10,000 revolving credit facility which matures on April 30, 2014. The agreement, as amended, restated and modified, contains covenants that include, among others, covenants that limit the Company’s and its subsidiaries’ ability to dispose of assets, enter into mergers or acquisitions, incur indebtedness, incur liens, pay dividends or make distributions on the Company’s capital stock, make investments or loans, and enter into certain affiliate transactions, in each case subject to customary exceptions for a credit facility of this size and type. Additional covenants apply when the Company has outstanding borrowings under the revolving loan facility or when the Company achieves specific covenant milestones. Financial covenants under the credit facility, as amended, include a minimum EBITDA, a limitation on capital expenditures, and a minimum liquidity ratio. Further, a minimum fixed charge ratio applies when the Company achieves specific covenant milestones. The occurrence of an event of default could result in an increase to the applicable interest rate by 3.0%, an acceleration of all obligations under the Agreement, an obligation of the Company to repay all obligations in full and a right by SVB to exercise all remedies available to it under the Agreement and related agreements including the Guaranty and Security Agreement.

Effective January 30, 2013 the Company and SVB entered into a Joinder and Loan Modification Agreement and an Export-Import Bank Joinder and Loan Modification Agreement which set forth certain amendments to the Company’s credit facility with the Bank. These Modification Agreements added the Company’s wholly-owned subsidiary, AtriCure, LLC, as a borrower, and such Loan Modification Agreement modified the Company’s timing for submitting a forecast to the Bank and decreased the EBITDA amount the Company must achieve to meet the minimum EBITDA covenant.

Effective March 29, 2013 the Company and SVB entered into a Loan Modification Agreement and an Export-Import Bank Loan Modification Agreement which set forth certain amendments to the Company’s credit facility with the Bank. These Modification Agreements provide for (i) a change in the applicable borrowing rate on the revolving credit facility from 0.25% to 1.25% above the prime rate based on the Company’s Liquidity Ratio to the prime rate during a Streamline Period and prime plus 1.25% during a Non-Streamline Period, (ii) a reduction in the collateral handling fee on the revolving credit facility, (iii) a reduction in the fixed interest rate on the term loan from 6.75% to 4.75% and (iv) modifications to the Liquidity Ratio and EBITDA financial covenants. The interest rate was 4.75% as of March 31, 2013 and 6.75% as of March 31, 2012.

As of March 31, 2013 the Company had no borrowings under the revolving credit facility and had borrowing availability of approximately $8,041. As of December 31, 2012 the Company had no borrowings under its revolving credit facility and borrowing availability of $5,303. As of March 31, 2013 and December 31, 2012, $7,833 and $8,333, respectively, was outstanding under the term loan, which included $2,000 classified as current maturities of long-term debt. The effective interest rate on borrowings under the modified term loan, including debt issuance costs, was 6.4%. As of March 31, 2013 the Company had an outstanding letter of credit of €75,000 issued to its European subsidiary’s corporate credit card program provider which expires on June 30, 2013. No letters of credit were outstanding at December 31, 2012. As of and for the period ended March 31, 2013, the Company was in compliance with all of the financial covenants of the amended and modified credit facility. In addition, if the guarantee by the Export-Import Bank of the United States ceases to be in full force and effect, the Company must repay all loans under the Export-Import agreement.

As of March 31, 2013 the Company had capital leases for computer and office equipment that expire at various terms through 2016, and the cost of the assets under lease was $226. These assets are depreciated over their estimated useful lives, which equal the terms of the leases. Accumulated amortization on the capital leases was $133 at March 31, 2013.

Maturities on long-term debt, including capital lease obligations, are as follows:


2013	$	1,522	April 1, 2013 through December 31, 2013
2014		2,032
2015		2,026
2016		2,016
2017		333

Total	$	7,929

- 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

Commitments and Contingencies

3 Months Ended

Mar. 31, 2013

Commitments and Contingencies [Abstract]

COMMITMENTS AND CONTINGENCIES

7. COMMITMENTS AND CONTINGENCIES

Operating Leases

The Company leases various types of office, manufacturing and warehouse facilities and equipment under noncancelable operating leases that expire at various terms through 2014.

Royalty Agreements

The Company has certain royalty agreements in place with terms that include payment of royalties based on product revenue from sales of current products. The royalty agreements have effective dates as early as 2003 and terms ranging from three years to at least twenty years. The royalties range from 1.5% to 5% of product sales. One of the agreements includes minimum quarterly payments of $50 through 2015 and a maximum of $2,000 in total royalties over the term of the agreement. Parties to the royalty agreements have the right at any time to terminate the agreement immediately for cause. Royalty expense of $322 and $147 was recorded as part of cost of revenue for the three months ended March 31, 2013 and 2012, respectively.

Purchase Agreements

On June 15, 2007 the Company entered into a purchase agreement with MicroPace Pty Ltd Inc. (“MicroPace”). The agreement, as amended, provides for MicroPace to produce a derivative of one of their products tailored for the cardiac surgical environment, known as the “MicroPace ORLab ^™” for worldwide distribution by the Company. Pursuant to the terms of the amended agreement, in order for the Company to retain exclusive distribution rights, the Company was required to purchase a minimum of 40 units during the period December 1, 2010 through December 31, 2011 to extend exclusivity through 2012 and an additional 40 units during 2012 to extend exclusivity through December 31, 2013. Units purchased in excess of yearly minimums reduce future minimum purchase requirements. A total of 56 units were purchased by the Company between December 1, 2010 and December 31, 2011, thereby extending exclusive distribution rights through December 31, 2012. A total of 60 units were purchased by the Company during 2012, fulfilling the purchase requirement to extend exclusive distribution rights through 2013. We purchased 25 units during the first quarter of 2013.

In April 2012 the Company entered into a development and manufacturing services agreement with Stellartech Research Corporation (“Stellartech”). Under the terms of the agreement, Stellartech will provide development services for the next generation of the Company’s radio frequency generators and will manufacture at least the first 300 units of the product. The agreement also establishes Stellartech as the exclusive supplier of the generators during the three years after product completion. There is no minimum purchase requirement beyond the initial 300 units.

Distributor Termination

In July 2010 the Company terminated a distributor agreement with a European distributor. Under the terms of the agreement the Company paid the distributor a termination fee, repurchased saleable disposable product inventory and assigned the distributor’s capital equipment to AtriCure Europe. Additionally, the Company entered into a consulting agreement with the distributor to provide ongoing consulting services through September 30, 2012. In exchange for these services, beginning October 1, 2010, the distributor earned €50 (approximately $64) per quarter for a total of €400 (approximately $513).

Legal

The Company is not party to any material pending or threatened litigation, except as described below:

Department of Justice Investigation

In October 2008 the Company received a letter from the Department of Justice (“DOJ”) informing the Company that it was conducting an investigation for potential False Claims Act (“FCA”) and common law violations relating to its surgical ablation devices. Specifically, the letter stated that the DOJ was investigating the Company’s marketing practices utilized in connection with its surgical ablation system to treat AF, a specific use outside the FDA’s 510(k) clearance. The letter also stated that the DOJ was investigating whether the Company instructed hospitals to bill Medicare for cardiac surgical ablation using incorrect billing codes. The Company cooperated with the investigation and operated its business in the ordinary course during the investigation. In December 2009 the Company reached a tentative settlement with the DOJ to resolve the investigation and recorded a liability and charged operating expenses for a total of $3,956, which represented the net present value of the proposed settlement amount to be paid to the DOJ, the Relator, and Relator’s counsel (total payments based on the settlement inclusive of interest were estimated to be $4,350, payable over five years).

The settlement was finalized pursuant to the preliminary terms in February 2010, and the Company entered into a settlement agreement with the DOJ, the Office of the Inspector General (“OIG”), and the Relator in the qui tam complaint discussed below. The settlement agreement definitively resolved all claims related to the DOJ investigation. The Company did not admit nor will it admit to any wrongdoing in connection with the settlement. As of March 31, 2013 the Company had made $2,313 in payments (including interest), and had a liability related to this settlement totaling $1,983, of which $1,241 was classified as current.

As part of the resolution, the Company also entered into a five year Corporate Integrity Agreement with the OIG. This agreement acknowledges the existence of the Company’s corporate compliance program and provides for certain other compliance-related activities during the five year term of the agreement. Those activities include specific written standards, monitoring, training, education, independent review, disclosure and reporting requirements.

The Company may, from time to time, become a party to additional legal proceedings.

- Definition

The entire disclosure for commitments and contingencies.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 20
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6449706&loc=d3e16207-108621

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 460
-SubTopic 10
-Section 50
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=6398077&loc=d3e12565-110249

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 450
-SubTopic 20
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6952336&loc=d3e14435-108349

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.25)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 440
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6394976&loc=d3e25287-109308

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name FASB Interpretation (FIN)
-Number 14
-Paragraph 3
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 5
-Paragraph 9, 10, 11, 12
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

Income Tax Provision

3 Months Ended

Mar. 31, 2013

Income Tax Provision [Abstract]

INCOME TAX PROVISION

8. INCOME TAX PROVISION

The Company files federal, state, and foreign income tax returns in jurisdictions with varying statutes of limitations. Income taxes are computed using the asset and liability method in accordance with FASB ASC 740 under which deferred income taxes are provided for the temporary differences between the financial reporting basis and the tax basis of the Company’s assets and liabilities. Deferred taxes are measured using provisions of currently enacted tax laws. A valuation allowance against deferred tax assets is recorded when it is more likely than not that such assets will not be fully realized. The Company has recorded a full valuation allowance against its net deferred tax assets as it is more likely than not that the benefit of the deferred tax assets will not be recognized in future periods. Tax credits are accounted for as a reduction of income taxes in the year in which the credit originates. The Company does not expect any significant unrecognized tax benefits to arise over the next twelve months and is fully reserved.

The Company’s provision for income taxes for continuing operations in interim periods is computed by applying its estimated annual effective rate against its loss before income tax (expense) benefit for the period. In addition, non-recurring or discrete items are recorded during the period in which they occur. The effective tax rate for the three months ended March 31, 2013 and 2012 was (0.26%) and (0.16%), respectively.

The Company currently has not had to accrue interest and penalties related to unrecognized income tax benefits. However, when or if the situation occurs, the Company will recognize interest and penalties within the income tax expense line in the accompanying Condensed Consolidated Statements of Operations and Comprehensive Loss and within the related tax liability in the Condensed Consolidated Balance Sheets.

- 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

Equity Compensation Plans

3 Months Ended

Mar. 31, 2013

Equity Compensation Plans [Abstract]

EQUITY COMPENSATION PLANS

9. EQUITY COMPENSATION PLANS

The Company has several share-based incentive plans: the 2001 Stock Option Plan (the “2001 Plan”), the 2005 Equity Incentive Plan (the “2005 Plan”) and the 2008 Employee Stock Purchase Plan (the “ESPP”).

2001 Plan and 2005 Plan

The 2001 Plan is no longer used for granting incentives. Under the 2005 Plan, the Board of Directors may grant incentive stock options to employees and any parent or subsidiary’s employees, and may grant nonstatutory stock options, restricted stock, stock appreciation rights, performance units or performance shares to employees, directors and consultants of the Company and any parent or subsidiary’s employees, directors and consultants. The administrator (currently the Compensation Committee of the Board of Directors) has the power to determine the terms of any awards, including the exercise price of options, the number of shares subject to each award, the exercisability of the awards and the form of consideration.

Options granted under the 2001 Plan and the 2005 Plan generally expire ten years from the date of grant. Options granted from the 2001 Plan are generally exercisable beginning one year from the date of grant in cumulative yearly amounts of 25% of the shares granted. Options granted from the 2005 Plan generally vest at a rate of 25% on the first anniversary date of the grant and ratably each month thereafter. Restricted stock awards granted under the 2005 Plan vest 25% annually over four years from date of grant.

As of March 31, 2013 6,893 shares of common stock had been reserved for issuance under the 2005 Plan. The shares authorized for issuance under the 2005 Plan include: (a) shares reserved but unissued under the 2001 Plan as of August 10, 2005, (b) shares returned to the 2001 Plan as the result of termination of options or the repurchase of shares issued under such plan, and (c) annual increases in the number of shares available for issuance on the first day of each year equal to the lesser of:

•

3.25% of the outstanding shares of common stock on the first day of the fiscal year;

•

825 shares; or

•

an amount the Company’s Board of Directors may determine.

On January 1, 2013 an additional 549 shares were authorized for issuance under the 2005 Plan representing 3.25% of the outstanding shares on that date. As of March 31, 2013 there were 1,633 shares available for future grants under the plans.

Activity under the Plans during the three months ended March 31, 2013 was as follows:


Stock Options	Number of Shares Outstanding			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (years)		Aggregate Intrinsic Value
Outstanding at January 1, 2013		3,172		$	8.81
Granted		70			8.39
Exercised		(184	)		5.44
Cancelled or forfeited		(576	)		10.32

Outstanding at March 31, 2013		2,482		$	8.70		5.9	$	2,121

Vested and expected to vest		2,345		$	8.79		5.7	$	1,953

Exercisable at March 31, 2013		1,445		$	9.61		3.6	$	971


Restricted Stock	Number of Shares Outstanding			Weighted Average Grant Date Fair Value
Outstanding at January 1, 2013		504		$	7.93
Granted		—			—
Released		(73	)		9.49
Forfeited		(146	)		8.51

Outstanding at March 31, 2013		285		$	7.22

The total intrinsic value of options exercised during the three month periods ended March 31, 2013 and 2012 was $464 and $151, respectively. As a result of the Company’s tax position, no tax benefit was recognized related to the stock option exercises. For the three month periods ended March 31, 2013 and 2012, respectively, $1,002 and $213 in cash proceeds was included in the Company’s Condensed Consolidated Statements of Cash Flows as a result of the exercise of stock options. The total fair value of performance shares vested during the three month periods ended March 31, 2013 and 2012 was $0 and $99, respectively. The total fair value of restricted stock vested during the three month periods ended March 31, 2013 and 2012 was $607 and $611, respectively.

The exercise price per share of each option is equal to the fair market value of the underlying share on the date of grant. The Company issues registered shares of common stock to satisfy stock option exercises and restricted stock grants.

The Company recognized expense related to stock options and restricted stock for the three months ended March 31, 2013 and 2012 of $421 and $590, respectively. As of March 31, 2013 there was $8,112 of unrecognized compensation costs related to non-vested stock option and restricted stock arrangements ($5,215 relating to stock options and $2,897 relating to restricted stock). This cost is expected to be recognized over a weighted average period of 3.2 years for stock options and 2.8 years for restricted stock.

The Company awarded 225 performance options to its new President and CEO when he joined the Company in November 2012. The options expire ten years from the date of grant and vest in increments of 25 shares when the volume adjusted weighted average closing price of the common stock of the Company as reported by NASDAQ (or any other exchange on which the common stock of the Company is listed) for 30 consecutive days equals or exceeds each of $10.00 per share, $12.50 per share, $15.00 per share, $17.50 per share, $20.00 per share, $25.00 per share, $30.00 per share, $35.00 per share and $40.00 per share. In accordance with FASB ASC 718, a Monte Carlo simulation was performed to estimate the fair values, vesting terms and vesting probabilities for each tranche of options. Expense calculated using these estimates is being recorded over the estimated vesting terms. The Company recognized expense of $38 related to the performance options during the three months ended March 31, 2013. As of March 31, 2013 there was $594 of unrecognized compensation costs related to non-vested performance options. This cost is expected to be recognized over a weighted-average period of 2.45 to 5.22 years. None of the market conditions were met as of March 31, 2013; therefore, none of the performance options were exercisable.

The Company historically issued performance shares to certain employees and consultants to incent and reward them for the achievement of specified performance over various service periods. The participants receive awards for a specified number of shares of the Company’s common stock at the beginning of the award period, which entitles the participants to the shares at the end of the award period if achievement of the specified metrics and service requirements occurs. The Company released 0 and 10 performance shares (gross) during the three months ended March 31, 2013 and 2012, respectively, related to the participants’ achievement of certain specified metrics. As of March 31, 2013 the Company has no performance shares outstanding. In accordance with FASB ASC 718, the Company estimates the number of shares to be granted based upon the probability that the performance metric and service period will be achieved. The fair value of the estimated award, based on the market value of the Company’s stock on the date of award, is expensed over the award period. The probability of meeting the specified metrics is reviewed quarterly. The Company recognized no expense related to performance shares during the three months ended March 31, 2013 and 2012. As of March 31, 2013 there was no unrecognized compensation cost related to non-vested share-based compensation arrangements associated with performance shares.

Employee Stock Purchase Plan (ESPP)

During 2008 the Company established its 2008 Employee Stock Purchase Plan (“ESPP”) which is available to eligible employees as defined in the ESPP. Under the ESPP, shares of the Company’s common stock may be purchased at a discount (currently 15%) of the lesser of the closing price of the Company’s common stock on the first trading day or the last trading day of the offering period. The offering period (currently six months) and the offering price are subject to change. Participants may not purchase more than $25 of the Company’s common stock in a calendar year and, effective January 1, 2009, may not purchase more than 1.5 shares during an offering period. Beginning on January 1, 2009 and on the first day of each fiscal year thereafter during the term of the ESPP, the number of shares available for sale under the ESPP shall be increased by the lesser of (i) two percent (2%) of the Company’s outstanding shares of common stock as of the close of business on the last business day of the prior calendar year, not to exceed 600 shares, or (ii) a lesser amount determined by the Board of Directors. At March 31, 2013 there were 774 shares available for future issuance under the ESPP. Share-based compensation expense with respect to the ESPP was $59 and $98 for the three months ended March 31, 2013 and 2012, respectively.

Valuation and Expense Information Under FASB ASC 718

The following table summarizes share-based compensation expense related to employee share-based compensation under FASB ASC 718 for the three months ended March 31, 2013 and 2012. This expense was allocated as follows:


	Three Months Ended March 31,
	2013		2012
Cost of revenue	$	58	$	66
Research and development expenses		41		41
Selling, general and administrative expenses		419		581

Total share-based compensation expense related to employees	$	518	$	688

In calculating compensation expense, the fair value of the options is estimated on the grant date using the Black-Scholes model including the following assumptions:


	Three Months Ended March 31,
	2013	2012
Risk free interest rate	0.89%–1.51%	1.33%
Expected life of option (years)	5.31–7.38	7.0
Expected volatility of stock	69.00%	71.00%
Weighted-average volatility	69.00%	71.00%
Dividend yield	0.00%	0.00%

The Company’s estimate of volatility is based solely on the Company’s trading history. The risk-free interest rate assumption is based upon the U.S. treasury yield curve at the time of grant for the expected option life. The Company estimates the expected terms of options using historical employee exercise behavior adjusted for abnormal activity.

The fair value of restricted stock awards is based on the market value of the Company’s stock on the date of the awards.

Based on the assumptions noted above, the weighted average estimated fair value per share of the stock options and restricted stock granted for the respective periods was as follows:


	Three Months Ended March 31,
	2013		2012
Stock options	$	5.43	$	6.62
Restricted stock		—		9.92

In calculating compensation expense for performance options, the fair value of the options was estimated on the grant date using a Monte Carlo simulation including the following assumptions:


Strike price	$	5.91
Contractual term		10.00
Expected volatility of stock		69.60	%
Expected rate of return		1.75	%
Dividend yield		0.00	%

The estimated contractual term is estimated considering that the performance options were issued to a high ranking executive of the Company and that they will be held until expiration. Expected volatility is estimated based on the Company’s trading history. The expected rate of return assumption is based upon the U.S. treasury yield curve at the time of grant for the expected option life.

Based on the assumptions noted above, the estimated grant date fair value per share of the performance options granted in 2012 was as follows:


	Price Target		Fair Value
Tranche 1	$	10.00	$	4.32
Tranche 2		12.50		4.30
Tranche 3		15.00		4.27
Tranche 4		17.50		4.23
Tranche 5		20.00		4.19
Tranche 6		25.00		4.10
Tranche 7		30.00		4.01
Tranche 8		35.00		3.92
Tranche 9		40.00		3.83

Non-Employee Stock Compensation

The Company historically issued nonstatutory common stock options to consultants to purchase shares of common stock as a form of compensation for services provided to the Company. Such options vest over a service period ranging from immediately to four years. After January 1, 2006 all stock options granted to non-employee consultants have a four year vesting period and vest at a rate of 25% on the first anniversary date of the grant and ratably each month thereafter.

The Company accounts for the options granted to non-employees prior to their vesting date in accordance with ASC 505-50. Because these options do not contain specific performance provisions, there is no measurement date of fair value until the options vest. Therefore, the fair value of the options granted and outstanding prior to their vesting date is remeasured each reporting period. The fair value was determined using the Black-Scholes model. No non-employee stock options have been granted since 2008. The values attributable to the non-vested portion of the non-employee stock options have been amortized over the service period on a graded vesting method and the vested portion of these stock options was remeasured at each vesting date. As of March 31, 2013 all non-employee consultant options were fully vested.

Once these non-employee consultant stock options have vested, the awards no longer fall within the scope of ASC 505-50. Because the stock options require settlement by the Company’s delivery of registered shares and because the tax withholding provisions in the awards allow the stock options to be partially net-cash settled, these vested stock options are no longer eligible for equity classification and are, thus, accounted for as derivative liabilities under FASB ASC 815 until the stock options are ultimately either exercised or forfeited. Accordingly, the vested non-employee consultant stock options are classified as liabilities and remeasured at fair value through earnings at each reporting period. During the three months ended March 31, 2013 and 2012, $14 and ($37), respectively, of expense (income) was recorded as a result of the remeasurement of the fair value of these stock options. As of both March 31, 2013 and December 31, 2012, fully vested stock options to acquire 38 shares of common stock held by non-employee consultants remained unexercised and a liability of $92 and $78 was included in accrued liabilities in the Condensed Consolidated Balance Sheets as of March 31, 2013 and December 31, 2012, respectively.

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 50
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6406099&loc=d3e25284-112666

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 718
-SubTopic 40
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6418621&loc=d3e17540-113929

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 718
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 718
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 718
-SubTopic 10
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Staff Accounting Bulletin (SAB)
-Number Topic 14

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 123R
-Paragraph 64, 65, A240
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Statement of Position (SOP)
-Number 93-6
-Paragraph 53
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

Segment and Geographic Information

3 Months Ended

Mar. 31, 2013

Segment and Geographic Information [Abstract]

SEGMENT AND GEOGRAPHIC INFORMATION

10. SEGMENT AND GEOGRAPHIC INFORMATION

The Company considers reporting segments in accordance with FASB ASC 280, “Segment Reporting”. The Company develops, manufactures, and sells devices designed primarily for the surgical ablation of cardiac tissue and systems designed for the exclusion of the left atrial appendage. These devices are developed and marketed to a broad base of medical centers in the United States and internationally. Management considers all such sales to be part of a single reportable segment.

Geographic revenue was as follows:


	Three Months Ended March 31,
	2013		2012
United States	$	14,639	$	13,193
International		4,791		4,283

Total	$	19,430	$	17,476

Revenue by product type was as follows:


	Three Months Ended March 31,
Revenue:	2013		2012
Open-heart	$	9,121	$	8,486
Minimally Invasive		3,132		2,948
AtriClip		2,386		1,759

Total United States		14,639		13,193
International		4,791		4,283

Total	$	19,430	$	17,476

The majority of the Company’s long-lived assets are located in the United States.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 34
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8981-108599

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 41
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9038-108599

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 33
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8971-108599

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 12
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8595-108599

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8380-108599

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8933-108599

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 26
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8844-108599

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 35
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Reference 9: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 40
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9031-108599

Reference 10: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
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-SubTopic 10
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-Paragraph 42
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Reference 11: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
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-SubTopic 10
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-Paragraph 10
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Reference 12: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
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-SubTopic 10
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Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
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-Paragraph 31
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8924-108599

Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
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-Paragraph 30
-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8906-108599

Reference 15: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 131
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

Public Offering of Common Stock

3 Months Ended

Mar. 31, 2013

Public Offering of Common Stock [Abstract]

PUBLIC OFFERING OF COMMON STOCK

11. PUBLIC OFFERING OF COMMON STOCK

In January 2013 the Company completed a public offering of common stock under its July 2011 shelf registration. The Company sold 3,996 shares of common stock, par value $0.001 per share, at a price of $7.25 per share to generate proceeds of $26,912 after expenses. Offering costs were recorded in additional paid in capital to offset proceeds. The Company intends to use the proceeds from the offering for general corporate purposes and working capital.

- Definition

The entire disclosure for shareholders' equity, comprised of portions attributable to the parent entity and noncontrolling interest, if any, including other comprehensive income (as applicable). Including, but not limited to: (1) balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings; (2) accumulated balance for each classification of other comprehensive income and total amount of comprehensive income; (3) amount and nature of changes in separate accounts, including the number of shares authorized and outstanding, number of shares issued upon exercise and conversion, and for other comprehensive income, the adjustments for reclassifications to net income; (4) rights and privileges of each class of stock authorized; (5) basis of treasury stock, if other than cost, and amounts paid and accounting treatment for treasury stock purchased significantly in excess of market; (6) dividends paid or payable per share and in the aggregate for each class of stock for each period presented; (7) dividend restrictions and accumulated preferred dividends in arrears (in aggregate and per share amount); (8) retained earnings appropriations or restrictions, such as dividend restrictions; (9) impact of change in accounting principle, initial adoption of new accounting principle and correction of an error in previously issued financial statements; (10) shares held in trust for Employee Stock Ownership Plan (ESOP); (11) deferred compensation related to issuance of capital stock; (12) note received for issuance of stock; (13) unamortized discount on shares; (14) description, terms, and number of warrants or rights outstanding; (15) shares under subscription and subscription receivables, effective date of new retained earnings after quasi-reorganization and deficit eliminated by quasi-reorganization and, for a period of at least ten years after the effective date, the point in time from which the new retained dates; and (16) retroactive effective of subsequent change in capital structure.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(d),(e))
-URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21484-112644

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 310
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB TOPIC 4.E)
-URI http://asc.fasb.org/extlink&oid=6228006&loc=d3e74512-122707

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21488-112644

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.29-31)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section S99
-Paragraph 4
-Subparagraph (SAB TOPIC 4.C)
-URI http://asc.fasb.org/extlink&oid=6959260&loc=d3e187143-122770

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 6
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21506-112644

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.3-04)
-URI http://asc.fasb.org/extlink&oid=6959260&loc=d3e187085-122770

Reference 9: 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

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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-SubTopic 10
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-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Preferred Stock
-URI http://asc.fasb.org/extlink&oid=6521494

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21463-112644

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 11
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21564-112644

Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Research Bulletin (ARB)
-Number 43
-Section B
-Paragraph 7, 11A
-Chapter 1
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 15: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Principles Board Opinion (APB)
-Number 12
-Paragraph 10
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 16: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 5
-Paragraph 15
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 17: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 08
-Paragraph d
-Article 4

Reference 18: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 02
-Paragraph 29, 30, 31
-Article 5

Reference 19: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Staff Accounting Bulletin (SAB)
-Number Topic 4
-Section E

Reference 20: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 08
-Article 4

Reference 21: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Staff Accounting Bulletin (SAB)
-Number Topic 4
-Section C

Reference 22: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 129
-Paragraph 2, 3, 4, 5, 6, 7, 8
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 23: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 04
-Article 3

+ Details

Description of Business and Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2013

Description of Business and Summary of Significant Accounting Policies [Abstract]

Nature of the Business

Basis of Presentation

Principles of Consolidation

Cash and Cash Equivalents

Cash and Cash Equivalents—The Company considers highly liquid investments with maturities of three months or less at the date of acquisition as cash equivalents.

Investments

Revenue Recognition

Sales Returns and Allowances

Allowance for Doubtful Accounts Receivable

Inventories

Inventories consist of the following:


	March 31, 2013		December 31, 2012
Raw materials	$	2,553	$	3,066
Work in process		1,039		675
Finished goods		2,101		1,977

Inventories	$	5,693	$	5,718

Property and Equipment

Impairment of Long-Lived Assets

Impairment of Long-Lived Assets—The Company reviews property and equipment annually for impairment using its best estimates based on reasonable and supportable assumptions and projections.

Intangible Assets

Intangible Assets—Intangible assets with determinable useful lives are amortized on a straight-line basis over the estimated periods benefited, which range from four to eight years.

Other Income

Taxes

Net Loss Per Share

Comprehensive Loss and Accumulated Other Comprehensive Income (Loss)

Accumulated other comprehensive income (loss) consisted of the following:


	Unrealized Gains on Short- Term Investments		Foreign Currency Translation Adjustment			Accumulated Other Comprehensive Income (Loss)
Balance as of December 31, 2012	$	1	$	76		$	77
Other comprehensive income before reclassifications		0		(189	)		(189	)
Amounts reclassified from accumulated other comprehensive income to other income on the statement of operations		0		45			45

Net current-period other comprehensive income		0		(144	)		(144	)

Balance as of March 31, 2013	$	1	$	(68	)	$	(67	)

Research and Development

Share-Based Compensation

Use of Estimates

Fair Value Disclosures

Description of Business and Summary of Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2013

Description of Business and Summary of Significant Accounting Policies [Abstract]

Summary of Inventories


	March 31, 2013		December 31, 2012
Raw materials	$	2,553	$	3,066
Work in process		1,039		675
Finished goods		2,101		1,977

Inventories	$	5,693	$	5,718

Accumulated other comprehensive income (loss)


	Unrealized Gains on Short- Term Investments		Foreign Currency Translation Adjustment			Accumulated Other Comprehensive Income (Loss)
Balance as of December 31, 2012	$	1	$	76		$	77
Other comprehensive income before reclassifications		0		(189	)		(189	)
Amounts reclassified from accumulated other comprehensive income to other income on the statement of operations		0		45			45

Net current-period other comprehensive income		0		(144	)		(144	)

Balance as of March 31, 2013	$	1	$	(68	)	$	(67	)

Fair Value (Tables)

3 Months Ended

Mar. 31, 2013

Fair Value [Abstract]

Financial assets and liabilities measured at fair value on a recurring basis


	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)		Total
Assets:
Money market funds	$	—	$	28,116	$	—	$	28,116
Commercial paper		—		4,244		—		4,244
U.S. government agencies and securities		1,001		—		—		1,001

Total assets	$	1,001	$	32,360	$	—	$	33,361

Liabilities:
Derivative instruments	$	—	$	—	$	92	$	92

Total liabilities	$	—	$	—	$	92	$	92


	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)		Total
Assets:
Money market funds	$	—	$	5,261	$	—	$	5,261
Commercial paper		—		3,247		—		3,247
U.S. government agencies and securities		1,000		—		—		1,000

Total assets	$	1,000	$	8,508	$	—	$	9,508

Liabilities:
Derivative instruments	$	—	$	—	$	78	$	78

Total liabilities	$	—	$	—	$	78	$	78

Assumptions used for estimating fair value of Level 3 liabilities


	As of March 31, 2013	As of December 31, 2012
Risk free interest rate	0.20%–0.74%	0.23%–0.74%
Expected life of option (years)	1.50–4.86	1.75–5.10
Expected volatility of stock	69.00%	70.00%
Dividend yield	0.00%	0.00%

Level 3 fair value measurements using significant other unobservable inputs for derivative instruments


Beginning Balance–January 1, 2013	$	78
Total gains/losses (realized/unrealized) included in earnings		14
Purchases (exercises)		—
Reclassification from equity to liability when fully vested		—

Ending Balance–March 31, 2013	$	92

Gains included in earnings (or changes in net assets attributable to the change in unrealized gains relating to assets held at reporting date)	$	(14	)


Beginning Balance–January 1, 2012	$	208
Total gains/losses (realized/unrealized) included in earnings		(179	)
Purchases (exercises)		(50	)
Reclassification from equity to liability when fully vested		99

Ending Balance–December 31, 2012	$	78

Losses included in earnings (or changes in net assets attributable to the change in unrealized losses relating to assets held at reporting date)	$	179

- Definition

Tabular disclosure of liabilities, including [financial] instruments measured at fair value that are classified in stockholders' equity, if any, by class that are measured at fair value on a recurring basis. The disclosures contemplated herein include the fair value measurements at the reporting date by the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3). Where the quoted price in an active market for the identical liability is not available, the Level 1 input is the quoted price of an identical liability when traded as an asset.

+ References + Details

Intangible Assets (Tables)

3 Months Ended

Mar. 31, 2013

Intangible Assets [Abstract]

Summary of Company's intangible assets with definite lives


	Non-Compete Agreement
Net carrying amount as of December 31, 2011	$	45
Amortization		(13	)

Net carrying amount as of December 31, 2012		32
Amortization		(3	)

Net carrying amount as of March 31, 2013	$	29

Estimated future amortization expense related to intangible assets with definite lives


Year	Amortization
2013	$	10
2014		12
2015		7

Total	$	29

Accrued Liabilities (Tables)

3 Months Ended

Mar. 31, 2013

Accrued Liabilities [Abstract]

Accrued liabilities


	March 31, 2013		December 31, 2012
Accrued commissions	$	1,553	$	1,464
Accrued settlement reserve (current portion)		1,241		1,120
Accrued bonus		411		487
Other accrued liabilities		393		386
Accrued vacation		367		349
Accrued taxes and value-added taxes payable		357		366
Stock purchase plan withholdings		197		97
Accrued payroll		189		153
Accrued royalty		140		118
Withheld payroll taxes		115		126
Sales/returns allowance—trade		105		105
Accrued non-employee stock options		92		78
Accrued severance		75		224

Total	$	5,235	$	5,073

Indebtedness (Tables)

3 Months Ended

Mar. 31, 2013

Indebtedness [Abstract]

Maturities on long-term debt, including capital lease obligations


2013	$	1,522	April 1, 2013 through December 31, 2013
2014		2,032
2015		2,026
2016		2,016
2017		333

Total	$	7,929

Equity Compensation Plans (Tables)

3 Months Ended

Mar. 31, 2013

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Activity under the stock based compensation plans


Stock Options	Number of Shares Outstanding			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (years)		Aggregate Intrinsic Value
Outstanding at January 1, 2013		3,172		$	8.81
Granted		70			8.39
Exercised		(184	)		5.44
Cancelled or forfeited		(576	)		10.32

Outstanding at March 31, 2013		2,482		$	8.70		5.9	$	2,121

Vested and expected to vest		2,345		$	8.79		5.7	$	1,953

Exercisable at March 31, 2013		1,445		$	9.61		3.6	$	971


Restricted Stock	Number of Shares Outstanding			Weighted Average Grant Date Fair Value
Outstanding at January 1, 2013		504		$	7.93
Granted		—			—
Released		(73	)		9.49
Forfeited		(146	)		8.51

Outstanding at March 31, 2013		285		$	7.22

Summary of share-based compensation expense related to employee share-based compensation


	Three Months Ended March 31,
	2013		2012
Cost of revenue	$	58	$	66
Research and development expenses		41		41
Selling, general and administrative expenses		419		581

Total share-based compensation expense related to employees	$	518	$	688

Assumptions used for determining fair value of options


	Three Months Ended March 31,
	2013	2012
Risk free interest rate	0.89%–1.51%	1.33%
Expected life of option (years)	5.31–7.38	7.0
Expected volatility of stock	69.00%	71.00%
Weighted-average volatility	69.00%	71.00%
Dividend yield	0.00%	0.00%

Weighted average estimated fair value per share of the stock options and restricted stock granted


	Three Months Ended March 31,
	2013		2012
Stock options	$	5.43	$	6.62
Restricted stock		—		9.92

Estimated grant date fair value per share of the performance options granted


	Price Target		Fair Value
Tranche 1	$	10.00	$	4.32
Tranche 2		12.50		4.30
Tranche 3		15.00		4.27
Tranche 4		17.50		4.23
Tranche 5		20.00		4.19
Tranche 6		25.00		4.10
Tranche 7		30.00		4.01
Tranche 8		35.00		3.92
Tranche 9		40.00		3.83

Performance Shares [Member]

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Assumptions used for determining fair value of options


Strike price	$	5.91
Contractual term		10.00
Expected volatility of stock		69.60	%
Expected rate of return		1.75	%
Dividend yield		0.00	%

Segment and Geographic Information (Tables)

3 Months Ended

Mar. 31, 2013

Segment and Geographic Information [Abstract]

Summary of geographic revenue


	Three Months Ended March 31,
	2013		2012
United States	$	14,639	$	13,193
International		4,791		4,283

Total	$	19,430	$	17,476

Revenue by product


	Three Months Ended March 31,
Revenue:	2013		2012
Open-heart	$	9,121	$	8,486
Minimally Invasive		3,132		2,948
AtriClip		2,386		1,759

Total United States		14,639		13,193
International		4,791		4,283

Total	$	19,430	$	17,476

Description of Business and Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands	Mar. 31, 2013	Dec. 31, 2012
Summary of inventories
Raw materials	$ 2,553	$ 3,066
Work in process	1,039	675
Finished goods	2,101	1,977
Inventories	$ 5,693	$ 5,718

Description of Business and Summary of Significant Accounting Policies (Details 1) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Accumulated other comprehensive income (loss)
Unrealized Gains on Short-Term Investments, Beginning	$ 1
Foreign Currency Translation Adjustment, Beginning	76
Accumulated Other Comprehensive Income (Loss), Beginning	77
Other comprehensive income before reclassifications, Unrealized Gains on Short-Term Investments	0
Other comprehensive income before reclassifications, Foreign Currency Translation Adjustment	(189)
Other comprehensive income before reclassifications, Accumulated Other Comprehensive Income (Loss)	(189)
Amounts reclassified from accumulated other comprehensive income to other income on the statement of operations, Unrealized Gains (Losses) on Short-Term Investments	0
Amounts reclassified from accumulated other comprehensive income to other income on the statement of operations, Foreign Currency Translation Adjustment	45
Amounts reclassified from accumulated other comprehensive income to other income on the statement of operations, Accumulated Other Comprehensive Income (Loss)	45
Unrealized Gains on Short-Term Investments	0	$ (1)
Foreign currency translation adjustment	(144)	55
Accumulated Other Comprehensive Income (Loss)	(144)	$ 54
Unrealized Gains on Short-Term Investments, Ending	1
Foreign Currency Translation Adjustment, Ending	(68)
Accumulated Other Comprehensive Income (Loss), Ending	$ (67)

Description of Business and Summary of Significant Accounting Policies (Details Textual) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Dec. 31, 2012
Description of Business and Summary of Significant Accounting Policies (Textual) [Abstract]
Foreign currency transaction (losses) gains	$ (144)	$ 55
Description of Business and Summary of Significant Accounting Policies (Additional Textual) [Abstract]
Maturity period of highly liquid investments	3 months
Maturity period of short term investment	1 year
Shipping and handling revenue	$ 192	190
Payment terms for end-users	30 days
Payment terms for distributors	60 days
Cost of lending disposable products to direct customers	$ 0
Grant income	0	60
Income (expense) related to remeasurement of fair value of fully vested stock options	$ 14	$ 37
Percentage of excise tax to be paid by manufacturers of medical devices	2.30%
Company's expense related to the medical device excise tax	$ 120
Options, restricted stock and performance based shares excluded from calculation of net loss per share	2,766	3,083
Recognized expense related to stock options and restricted stock	$ 518	$ 688
Unexercised shares of common stock held by non-employee consultants	38		38
Accrued non-employee stock options	$ 92		$ 78
Subsidiaries [Member]
Description of Business and Summary of Significant Accounting Policies (Textual) [Abstract]
Foreign currency transaction (losses) gains	$ 45	3
Maximum [Member]
Description of Business and Summary of Significant Accounting Policies (Textual) [Abstract]
Estimated useful lives of intangible assets	8 years
Minimum [Member]
Description of Business and Summary of Significant Accounting Policies (Textual) [Abstract]
Estimated useful lives of intangible assets	4 years
Machinery, equipment and vehicles [Member] \| Maximum [Member]
Description of Business and Summary of Significant Accounting Policies (Textual) [Abstract]
Estimated useful life by major asset category	7 years
Machinery, equipment and vehicles [Member] \| Minimum [Member]
Description of Business and Summary of Significant Accounting Policies (Textual) [Abstract]
Estimated useful life by major asset category	3 years
Computer and other office Equipment [Member]
Description of Business and Summary of Significant Accounting Policies (Textual) [Abstract]
Estimated useful life by major asset category	3 years
Furniture and fixtures [Member] \| Maximum [Member]
Description of Business and Summary of Significant Accounting Policies (Textual) [Abstract]
Estimated useful life by major asset category	7 years
Furniture and fixtures [Member] \| Minimum [Member]
Description of Business and Summary of Significant Accounting Policies (Textual) [Abstract]
Estimated useful life by major asset category	3 years
Generators [Member]
Description of Business and Summary of Significant Accounting Policies (Textual) [Abstract]
Depreciation	$ 270	$ 317
Generators [Member] \| Maximum [Member]
Description of Business and Summary of Significant Accounting Policies (Textual) [Abstract]
Estimated useful life by major asset category	3 years
Generators [Member] \| Minimum [Member]
Description of Business and Summary of Significant Accounting Policies (Textual) [Abstract]
Estimated useful life by major asset category	1 year
Carrying amount of loaned equipment [Member]
Description of Business and Summary of Significant Accounting Policies (Textual) [Abstract]
Net carrying amount of loaned equipment	$ 2,243		$ 2,197

Fair Value (Details) - Fair Value Measurements, Recurring [Member] - USD ($) $ in Thousands	Mar. 31, 2013	Dec. 31, 2012
Assets:
Total assets	$ 33,361	$ 9,508
Liabilities:
Derivative instruments	92	78
Total liabilities	92	78
Money market funds [Member]
Assets:
Total assets	28,116	5,261
Commercial paper [Member]
Assets:
Total assets	4,244	3,247
U.S. government agencies and securities [Member]
Assets:
Total assets	1,001	1,000
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Assets:
Total assets	1,001	1,000
Liabilities:
Derivative instruments
Total liabilities
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] \| Money market funds [Member]
Assets:
Total assets
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] \| Commercial paper [Member]
Assets:
Total assets
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] \| U.S. government agencies and securities [Member]
Assets:
Total assets	1,001	1,000
Significant Other Observable Inputs (Level 2) [Member]
Assets:
Total assets	32,360	8,508
Liabilities:
Derivative instruments
Total liabilities
Significant Other Observable Inputs (Level 2) [Member] \| Money market funds [Member]
Assets:
Total assets	28,116	5,261
Significant Other Observable Inputs (Level 2) [Member] \| Commercial paper [Member]
Assets:
Total assets	4,244	3,247
Significant Other Observable Inputs (Level 2) [Member] \| U.S. government agencies and securities [Member]
Assets:
Total assets
Significant Other Unobservable Inputs (Level 3) [Member]
Assets:
Total assets
Liabilities:
Derivative instruments	92	78
Total liabilities	92	$ 78
Significant Other Unobservable Inputs (Level 3) [Member] \| Money market funds [Member]
Assets:
Total assets
Significant Other Unobservable Inputs (Level 3) [Member] \| Commercial paper [Member]
Assets:
Total assets
Significant Other Unobservable Inputs (Level 3) [Member] \| U.S. government agencies and securities [Member]
Assets:
Total assets

Fair Value (Details 1)	3 Months Ended	12 Months Ended
Fair Value (Details 1)	Mar. 31, 2013	Dec. 31, 2012
Assumptions used for estimating fair value of the Level 3 liabilities
Expected volatility of stock	69.00%	70.00%
Dividend yield	0.00%	0.00%
Maximum [Member]
Assumptions used for estimating fair value of the Level 3 liabilities
Risk-free interest rate	0.74%	0.74%
Expected life of option (years)	4 years 10 months 10 days	5 years 1 month 6 days
Minimum [Member]
Assumptions used for estimating fair value of the Level 3 liabilities
Risk-free interest rate	0.20%	0.23%
Expected life of option (years)	1 year 6 months	1 year 9 months

Fair Value (Details 2) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
Fair Value (Details 2) - USD ($) $ in Thousands	Mar. 31, 2013	Dec. 31, 2012
Level 3 fair value measurements using significant other unobservable inputs for derivative instruments
Beginning Balance	$ 78	$ 208
Total gains/losses (realized/unrealized) included in earnings	14	(179)
Purchases (exercises)		(50)
Reclassification from equity to liability when fully vested		99
Ending Balance	92	78
Gains/Losses included in earnings (or changes in net assets attributable to the change in unrealized losses relating to assets held at reporting date)	$ (14)	$ 179

Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
Intangible Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2013	Mar. 31, 2012	Dec. 31, 2012	Dec. 31, 2011
Summary of intangible assets with definite lives
Net carrying amount	$ 29		$ 32
Amortization	(3)	$ (3)
Non-Compete Agreement [Member]
Summary of intangible assets with definite lives
Net carrying amount	29		32	$ 45
Amortization	$ (3)		$ (13)

Intangible Assets (Details 1) $ in Thousands	Mar. 31, 2013 USD ($)
Estimated future amortization expense related to intangible assets with definite lives
2013	$ 10
2014	12
2015	7
Total	$ 29

Intangible Assets (Details Textual) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Intangible Assets (Textual) [Abstract]
Amortization of intangible assets	$ 3	$ 3
Trade Name [Member]
Intangible Assets (Textual) [Abstract]
Amortization period	8 years

Accrued Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2013	Dec. 31, 2012
Accrued liabilities
Accrued commissions	$ 1,553	$ 1,464
Accrued settlement reserve (current portion)	1,241	1,120
Accrued bonus	411	487
Other accrued liabilities	393	386
Accrued vacation	367	349
Accrued taxes and value-added taxes payable	357	366
Stock purchase plan withholdings	197	97
Accrued payroll	189	153
Accrued royalty	140	118
Withheld payroll taxes	115	126
Sales/returns allowance - trade	105	105
Accrued non-employee stock options	92	78
Accrued severance	75	224
Total	$ 5,235	$ 5,073

Indebtedness (Details) $ in Thousands	Mar. 31, 2013 USD ($)
Maturities on long-term debt, including capital lease obligations
2013	$ 1,522
2014	2,032
2015	2,026
2016	2,016
2017	333
Total	$ 7,929

Indebtedness (Details Textual) € in Thousands, $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2013 USD ($)	Dec. 31, 2012 USD ($)	Mar. 31, 2013 EUR (€)	Mar. 31, 2013 USD ($)	Mar. 29, 2013	Dec. 31, 2012 EUR (€)	Dec. 31, 2012 USD ($)	Mar. 31, 2012
Indebtedness (Textual) [Abstract]
Interest on the revolving loan accrued at a fluctuating above the prime rate					0.25%
Credit facility				$ 10,000
Indebtedness (Additional Textual) [Abstract]
Term loan arrangements				$ 10,000
Increase to the applicable interest rate	3.00%
Prime rate					1.25%
Interest rate on term loan			4.75%	4.75%				6.75%
Letter of credit outstanding \| €			€ 75,000			€ 0
Expiry of outstanding letter of credit	Jun. 30, 2013
Capital lease expiration period			2016	2016
Cost of assets under lease				$ 226
Accumulated amortization on the capital leases				133
Term loan modification agreement [Member]
Indebtedness (Textual) [Abstract]
Reduction of fixed interest rate on the term loan					4.75%
Term loan [Member]
Indebtedness (Textual) [Abstract]
Revolving credit facility maturity date	Feb. 02, 2017
Reduction of fixed interest rate on the term loan					6.75%
Credit facility				7,833
Amount outstanding under line of credit							$ 8,333
Current maturities of long-term debt				$ 2,000
Interest on the term loan portion accrued			6.40%	6.40%
Revolving credit facility [Member]
Indebtedness (Textual) [Abstract]
Revolving credit facility maturity date	Apr. 30, 2014
Borrowings under the revolving credit facility	$ 0	$ 0
Credit facility				$ 8,041			$ 5,303
Revolving credit facility modification agreement [Member]
Indebtedness (Textual) [Abstract]
Interest on the revolving loan accrued at a fluctuating above the prime rate					1.25%

Commitments and Contingencies (Details) € in Thousands, $ in Thousands	1 Months Ended	3 Months Ended				12 Months Ended			13 Months Ended
	Apr. 30, 2012 Units	Mar. 31, 2013 USD ($) Units	Mar. 31, 2012 USD ($)	Dec. 31, 2010 EUR (€)	Dec. 31, 2010 USD ($)	Dec. 31, 2012 USD ($) Units	Dec. 31, 2010 EUR (€)	Dec. 31, 2010 USD ($)	Dec. 31, 2011 Units	Dec. 31, 2009 USD ($)
Commitments and Contingencies (Additional Textual) [Abstract]
Operating leases expire at various terms		2014
Royalty expense		$ 322	$ 147
Minimum units the company was required to purchase \| Units									40
Purchases of additional units \| Units		40
Total quantity purchased \| Units									56
Actual quantity purchased \| Units		25				60
Number of radio frequency generators manufacture \| Units	300
Parties signed a Definitive Stipulation of Settlement agreement		October 1, 2010
Distributor earnings				€ 50	$ 64		€ 400	$ 513
Operating expenses related to investigation										$ 3,956
Definitive stipulation of settlement agreement										$ 4,350
Interest payment term		5 years
Settlement agreement payments (including interest)		$ 2,313
Liability related settlement		1,983
Liability related settlement current		$ 1,241				$ 1,120
Company integrity agreement with office of inspector general		5 years
Minimum [Member]
Commitments and Contingencies (Textual) [Abstract]
Royalty agreement term		3 years
Royalty rates		1.50%
Royalty payments		$ 50
Maximum [Member]
Commitments and Contingencies (Textual) [Abstract]
Royalty agreement term		20 years
Royalty rates		5.00%
Royalty payments		$ 2,000

Income Tax Provision (Details)	3 Months Ended
Income Tax Provision (Details)	Mar. 31, 2013	Mar. 31, 2012
Income Tax Provision (Textual) [Abstract]
Effective tax rate	(0.26%)	(0.16%)

Equity Compensation Plans (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Activity under the stock based compensation plans
Beginning balance, Number of Shares Outstanding, Stock Options	3,172
Beginning balance, Weighted Average Exercise Price, Stock Options	$ 8.81
Granted, Number of Shares Outstanding, Stock Options	70
Granted, Weighted Average Exercise Price, Stock Options	$ 8.39
Exercised, Number of Shares Outstanding, Stock Options	(184)
Exercised, Weighted Average Exercise Price, Stock Options	$ 5.44
Cancelled or forfeited, Number of Shares Outstanding, Stock Options	(576)
Cancelled or Forfeited, Weighted Average Exercise Price, Stock Options	$ 10.32
Ending balance, Number of Shares Outstanding, Stock Options	2,482
Ending balance, Weighted Average Exercise Price, Stock Options	$ 8.70
SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsOutstandingWeightedAverageRemainingContractualTerm2	5 years 10 months 24 days
Outstanding at March 31, Aggregate Intrinsic Value, Stock Options	$ 2,121
Vested and expected to vest, Number of Shares Outstanding, Stock Options	2,345
Vested And expected to vest, Weighted Average Exercise Price, Stock Options	$ 8.79
Vested and expected to vest, Weighted Average Remaining Contractual Term, Stock Options	5 years 8 months 12 days
Vested and expected to vest, Aggregate Intrinsic Value, Stock Options	$ 1,953
Exercisable at March 31, Number of Shares Outstanding, Stock Options	1,445
Exercisable at March 31, Weighted Average Exercise Price, Stock Options	$ 9.61
SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsExercisableWeightedAverageRemainingContractualTerm1	3 years 7 months 6 days
Exercisable at March 31, Aggregate Intrinsic Value, Stock Options	$ 971
Restricted Stock [Member]
Activity under the stock based compensation plans
Beginning balance, Number of Shares Outstanding	504
Beginning balance, Weighted Average Grant Date Fair Value	$ 7.93
Granted, Number of Shares Outstanding
Granted, Weighted Average Grant Date Fair Value		$ 9.92
Released, Number of Shares Outstanding	(73)
Released, Weighted Average Grant Date Fair Value	$ 9.49
Forfeited, Number of Shares Outstanding	(146)
Forfeited, Weighted Average Grant Date Fair Value	$ 8.51
Ending balance, Number of Shares Outstanding	285
Ending balance, Weighted Average Grant Date Fair Value	$ 7.22

Equity Compensation Plans (Details 1) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Summary of share-based compensation expense related to employee share-based compensation
Total share-based compensation expense related to employees	$ 518	$ 688
Cost of revenue [Member]
Summary of share-based compensation expense related to employee share-based compensation
Total share-based compensation expense related to employees	58	66
Research and development expenses [Member]
Summary of share-based compensation expense related to employee share-based compensation
Total share-based compensation expense related to employees	41	41
Selling, general and administrative expenses [Member]
Summary of share-based compensation expense related to employee share-based compensation
Total share-based compensation expense related to employees	$ 419	$ 581

- Definition

Represents the expense recognized during the period arising from equity-based compensation arrangements (for example, shares of stock, unit, stock options or other equity instruments) with employees, directors and certain consultants qualifying for treatment as employees.

+ References + Details

Equity Compensation Plans (Details 2)	3 Months Ended
Equity Compensation Plans (Details 2)	Mar. 31, 2013	Mar. 31, 2012
Assumptions used to estimate fair value of options on grant date using Black-Scholes model
Risk free interest rate		1.33%
Expected life of option (years)		7 years
Expected volatility of stock	69.00%	71.00%
Weighted-average volatility	69.00%	71.00%
Dividend yield	0.00%	0.00%
Maximum [Member]
Assumptions used to estimate fair value of options on grant date using Black-Scholes model
Risk free interest rate	1.51%
Expected life of option (years)	7 years 4 months 17 days
Minimum [Member]
Assumptions used to estimate fair value of options on grant date using Black-Scholes model
Risk free interest rate	0.89%
Expected life of option (years)	5 years 3 months 22 days

Equity Compensation Plans (Details 3) - $ / shares	3 Months Ended
Equity Compensation Plans (Details 3) - $ / shares	Mar. 31, 2013	Mar. 31, 2012
Weighted average estimated fair value per share of the stock options and restricted stock granted
Weighted average estimated grant date fair value per share of the stock options granted	$ 5.43	$ 6.62
Restricted Stock [Member]
Weighted average estimated fair value per share of the stock options and restricted stock granted
Weighted average estimated grant date fair value per share of the restricted stock granted		$ 9.92

Equity Compensation Plans (Details 4) - $ / shares	3 Months Ended
Equity Compensation Plans (Details 4) - $ / shares	Mar. 31, 2013	Mar. 31, 2012
Assumptions used to estimate fair value of options on grant date using Monte Carlo simulation
Contractual term		7 years
Expected volatility of stock	69.00%	71.00%
Expected rate of return		1.33%
Dividend yield	0.00%	0.00%
Performance Shares [Member]
Assumptions used to estimate fair value of options on grant date using Monte Carlo simulation
Strike price	$ 5.91
Contractual term	10 years
Expected volatility of stock	69.60%
Expected rate of return	1.75%
Dividend yield	0.00%

Equity Compensation Plans (Details 5) - $ / shares	3 Months Ended		12 Months Ended
Equity Compensation Plans (Details 5) - $ / shares	Mar. 31, 2013	Mar. 31, 2012	Dec. 31, 2012
Estimated grant date fair value per share of the performance options granted
Fair Value	$ 5.43	$ 6.62
Tranche 1 [Member]
Estimated grant date fair value per share of the performance options granted
Price Target			$ 10.00
Fair Value			4.32
Tranche 2 [Member]
Estimated grant date fair value per share of the performance options granted
Price Target			12.50
Fair Value			4.30
Tranche 3 [Member]
Estimated grant date fair value per share of the performance options granted
Price Target			15.00
Fair Value			4.27
Tranche 4 [Member]
Estimated grant date fair value per share of the performance options granted
Price Target			17.50
Fair Value			4.23
Tranche 5 [Member]
Estimated grant date fair value per share of the performance options granted
Price Target			20.00
Fair Value			4.19
Tranche 6 [Member]
Estimated grant date fair value per share of the performance options granted
Price Target			25.00
Fair Value			4.10
Tranche 7 [Member]
Estimated grant date fair value per share of the performance options granted
Price Target			30.00
Fair Value			4.01
Tranche 8 [Member]
Estimated grant date fair value per share of the performance options granted
Price Target			35.00
Fair Value			3.92
Tranche 9 [Member]
Estimated grant date fair value per share of the performance options granted
Price Target			40.00
Fair Value			$ 3.83

Equity Compensation Plans (Details Textual) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended	3 Months Ended
	Nov. 30, 2012	Mar. 31, 2013	Mar. 31, 2012	Dec. 31, 2012
Equity Compensation Plans (Textual) [Abstract]
Recognized expense related to stock options and restricted stock		$ 518	$ 688
Performance options awarded to President and CEO		70,000
Recognized expense related to performance options		$ 518	688
Performance options exercisable		1,445,000
Unrecognized compensation costs related to non-vested share-based compensation arrangements with performance shares		$ 8,112
Liability included in accrued liabilities		$ 92		$ 78
Equity Compensation Plans (Additional Textual) [Abstract]
Restricted stock awards granted annual vest rate		25.00%
Total intrinsic value of options exercised		$ 464	151
Tax benefit recognized		0	0
Cash proceeds		$ 1,002	$ 213
Offering period		6 months
Description of participants purchase limit		Participants may not purchase more than $25 of the Company’s common stock in a calendar year and, effective January 1, 2009, may not purchase more than 1.5 shares during an offering period.
Participants purchase limit shares		1.5
Nonstatutory common stock options vest period maximum		4 years
Stock options granted to non-employee consultants vesting period		4 years
Non-employee Vesting stock rate		25.00%
Non-employee consultant stock options granted		0	0
Income (expense)		$ 14	$ 37
Fully vested stock options to acquire		38,000		38,000
Common Stock, Shares, Issued		20,901		16,896
Maximum [Member]
Equity Compensation Plans (Textual) [Abstract]
Weighted average period of recognizing cost		5 years 2 months 19 days
Minimum [Member]
Equity Compensation Plans (Textual) [Abstract]
Weighted average period of recognizing cost		2 years 5 months 12 days
2001 Plan [Member]
Equity Compensation Plans (Textual) [Abstract]
Options granted, expiry period		10 years
Expiry of options from the date of grant		10 years
2005 Plan [Member]
Equity Compensation Plans (Textual) [Abstract]
Options granted, expiry period		10 years
Common stock reserved for issuance		6,893,000		549,000
Percentage of outstanding shares of common stock on the first day		3.25%
Outstanding shares of common stock on the first day		825,000
Additional shares authorized for issuance		6,893,000		549,000
Outstanding shares authorized on that date				3.25%
Shares available for future grants		1,633,000
Expiry of options from the date of grant		10 years
Stock Options [Member]
Equity Compensation Plans (Textual) [Abstract]
Exercisable period beginning		1 year
Recognized expense related to stock options and restricted stock		$ 421
Stock options compensation costs		$ 5,215
Weighted average period of recognizing cost		3 years 2 months 12 days
Stock Options [Member] \| 2001 Plan [Member]
Equity Compensation Plans (Textual) [Abstract]
Options granted exercisable cumulative		25.00%
Stock Options [Member] \| 2005 Plan [Member]
Equity Compensation Plans (Textual) [Abstract]
Options granted exercisable cumulative		25.00%
Restricted Stock [Member]
Equity Compensation Plans (Textual) [Abstract]
Total fair value of restricted stock vested		$ 607	611
Recognized expense related to stock options and restricted stock			590
Restricted stock compensation costs		2,897
Unrecognized compensation costs related to non-vested performance options		$ 2,897
Weighted average period of recognizing cost		2 years 9 months 18 days
Restricted Stock [Member] \| 2005 Plan [Member]
Equity Compensation Plans (Textual) [Abstract]
Options granted from the 2005 Plan generally vest		4 years
Performance Shares [Member]
Equity Compensation Plans (Textual) [Abstract]
Options granted, expiry period		10 years
Total fair value of performance shares vested		$ 0	99
Recognized expense related to stock options and restricted stock		0	$ 0
Restricted stock compensation costs		$ 594
Performance options awarded to President and CEO	225,000
Expiry of options from the date of grant		10 years
Number of shares options vest in		25,000
Period of considering closing price of common stock		30 days
Price by which volume adjusted weighted average closing price exceeds under vesting condition 1		$ 10.00
Price by which volume adjusted weighted average closing price exceeds under vesting condition 2		12.50
Price by which volume adjusted weighted average closing price exceeds under vesting condition 3		15.00
Price by which volume adjusted weighted average closing price exceeds under vesting condition 4		17.50
Price by which volume adjusted weighted average closing price exceeds under vesting condition 5		20.00
Price by which volume adjusted weighted average closing price exceeds under vesting condition 6		25.00
Price by which volume adjusted weighted average closing price exceeds under vesting condition 7		30.00
Price by which volume adjusted weighted average closing price exceeds under vesting condition 8		35.00
Price by which volume adjusted weighted average closing price exceeds under vesting condition 9		$ 40.00
Recognized expense related to performance options		$ 38
Unrecognized compensation costs related to non-vested performance options		$ 594
Performance options exercisable		0
Performance shares (gross) released		0	10,000
Unrecognized compensation costs related to non-vested share-based compensation arrangements with performance shares		$ 0
Performance Shares outstanding		0
ESPP [Member]
Equity Compensation Plans (Textual) [Abstract]
Recognized expense related to stock options and restricted stock		$ 59	$ 98
Company's common stock may be purchased at a discount		15.00%
Shares available for sale under the ESPP increased		2.00%
Outstanding shares of common stock exceed		600
Shares available for future issuance under the ESPP		774
ESPP [Member] \| Maximum [Member]
Equity Compensation Plans (Textual) [Abstract]
Participants purchase limit value		$ 25
Non-Employee Stock Compensation [Member]
Equity Compensation Plans (Textual) [Abstract]
Liability included in accrued liabilities		$ 92		$ 78

Segment and Geographic Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Summary of geographic revenue
Revenue	$ 19,430	$ 17,476
United States [Member]
Summary of geographic revenue
Revenue	14,639	13,193
International [Member]
Summary of geographic revenue
Revenue	$ 4,791	$ 4,283

Segment and Geographic Information (Details 1) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Schedule of Revenue by Product Type
Revenue	$ 19,430	$ 17,476
Open-heart [Member]
Schedule of Revenue by Product Type
Revenue	9,121	8,486
Minimally Invasive [Member]
Schedule of Revenue by Product Type
Revenue	3,132	2,948
Atriclip [Member]
Schedule of Revenue by Product Type
Revenue	2,386	1,759
United States [Member]
Schedule of Revenue by Product Type
Revenue	14,639	13,193
International [Member]
Schedule of Revenue by Product Type
Revenue	$ 4,791	$ 4,283

Public Offering of Common Stock (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	1 Months Ended	3 Months Ended
	Jan. 31, 2013	Mar. 31, 2013	Dec. 31, 2012
Public Offering of Common Stock (Textual) [Abstract]
Common stock sold	3,996
Common stock, par value	$ 0.001	$ 0.001	$ 0.001
Common stock , price per share	$ 7.25
Proceeds from issuance of common stock	$ 26,912	$ 26,912