Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2011

Summary of Significant Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying condensed consolidated financial statements have been prepared in accordance with the accounting principles generally accepted in the United States of America (“GAAP”) and the applicable rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information. Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to these rules and regulations. In the opinion of the Company, these financial statements contain all adjustments necessary to present fairly its financial position, results of its operations, and changes in its cash flows for the periods presented. All such adjustments represent normal recurring items, except as noted herein. These condensed consolidated financial statements are unaudited and should be read in conjunction with the financial statements as of and for the year ended December 31, 2010 and the notes thereto included in the Company’s prospectus filed with the SEC on June 24, 2011.

Use of Estimates

The preparation of the condensed consolidated financial statements 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 condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Accordingly, the three and nine months ended September 30, 2011, are not necessarily indicative of the results to be expected for the year ending December 31, 2011 or for any other interim period or for any future year.

Comprehensive Income/Loss

The Company did not have any items of other comprehensive income/loss during the nine months ended September 30, 2011. During the nine months ended September 30, 2010, the Company recognized a cumulative translation loss of $58,000.

Stock Split

On June 9, 2011, the Company authorized a 2-for-1 split of all common stock and convertible preferred stock authorized, issued and outstanding at that time. On April 16, 2010, the Company authorized a 4-for-1 split on all common stock and convertible preferred stock authorized, issued and outstanding at that time. All share and per share amounts in the condensed consolidated financial statements and related notes have been restated to reflect the 2-for-1 and 4-for-1 splits.

Net Loss per Share of Common Stock

Basic net loss per share of common stock is computed by dividing the Company’s net loss attributable to its stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted net loss per share of common stock is computed by giving effect to all potentially dilutive securities, including stock options, warrants and convertible preferred stock. Basic and diluted net loss per share of common stock attributable to the Company’s stockholders was the same for all periods presented on the Condensed Consolidated Statements of Operations, as the inclusion of all potentially dilutive securities outstanding would have been antidilutive. As such, the numerator and the denominator used in computing both basic and diluted net loss per share are the same for each period presented.

In April 2011, the Company issued Series C convertible preferred stock with a beneficial conversion feature (See Note 9 — Convertible Preferred Stock) and recorded deemed dividends relating to the beneficial conversion feature of $19.7 million for the nine month period ended September 30, 2011. While it was outstanding, all of the Company’s preferred stock participated in earnings or losses of the Company. Consequently, net losses were adjusted for the deemed distributions relating to the beneficial conversion feature and losses attributable to preferred stockholders to calculate the net loss attributable to common stockholders.

The following table presents the calculation of historical basic and diluted net loss per share of common stock attributable to the Company’s common stockholders:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2011			2010			2011			2010
	(Amounts in thousands, except per share data)
Net loss per share:
Numerator:
Net loss	$	(14,770	)	$	(10,617	)	$	(49,114	)	$	(36,257	)
Deemed dividend related to the beneficial conversion feature of Series C convertible preferred stock		—			—			(19,669	)		—
Net loss attributable to stockholders		(14,770	)		(10,617	)		(68,783	)		(36,257	)
Net loss attributable to preferred stockholders		—			8,620			35,127			28,488
Net loss attributable to Class A common stockholders and Class B common stockholders — basic and diluted	$	(14,770	)	$	(1,997	)	$	(33,656	)	$	(7,769	)
Net loss attributable to Class A common stockholders — basic and diluted	$	(5,790	)		—		$	(10,058	)		—
Net loss attributable to Class B common stockholders — basic and diluted		(8,980	)		(1,997	)		(23,598	)		(7,769	)
Net loss attributable to Class A common stockholders and Class B common stock holders — basic and diluted	$	(14,770	)	$	(1,997	)	$	(33,656	)	$	(7,769	)
Denominator:
Weighted-average Class A common shares used in computing net loss per share of Class A common stock — basic and diluted		39,875			—			13,776			—
Weighted-average Class B common shares used in computing net loss per share of Class B common stock — basic and diluted		61,849			15,580			32,320			15,315
Weighted-average Class A common stock and Class B common stock — basic and diluted		101,724			15,580			46,096			15,315
Net loss per share of Class A common stock — basic and diluted	$	(.15	)	$	—		$	(.73	)	$	—
Net loss per share of Class B common stock — basic and diluted	$	(.15	)	$	(.13	)	$	(.73	)	$	(.51	)

The following outstanding shares on a weighted average basis of potentially dilutive securities were excluded from the computation of diluted net loss per share of common stock for the periods presented because including them would have been antidilutive:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2011		2010		2011		2010
	(Amounts in thousands)
Convertible preferred stock (as converted basis)		—		67,255		48,111		56,158
Convertible preferred stock warrants (as converted basis)		—		721		506		678
Common stock warrants (as converted basis)		768		111		359		37
Stock options		14,776		13,241		15,322		10,997
Total		15,544		81,328		64,298		67,870

Recent Accounting Pronouncements

In May 2011, the Financial Accounting Standards Board (FASB) issued a new accounting standard update, which amends the fair value measurement guidance and includes some enhanced disclosure requirements. The most significant change in disclosures is an expansion of the information required for Level 3 measurements based on unobservable inputs. The standard is effective for fiscal years beginning after December 15, 2011. The Company will adopt this standard in the first quarter of 2012 and is currently evaluating its impact on its financial statements and disclosures.

In June 2011, the FASB issued a new accounting standard, which eliminates the current option to report other comprehensive income and its components in the statement of stockholders’ equity. Instead, an entity will be required to present items of net income and other comprehensive income in one continuous statement or in two separate, but consecutive, statements. The standard is effective for fiscal years beginning after December 15, 2011. The Company will adopt this standard in the first quarter of 2012.