Document and Entity Information Document

6 Months Ended

Jun. 30, 2014

Aug. 27, 2014

Entity Information [Line Items]

Entity Registrant Name

TRUPANION INC.

Entity Central Index Key

0001371285

Current Fiscal Year End Date

--12-31

Entity Filer Category

Non-accelerated Filer

Document Type

10-Q

Document Period End Date

Jun. 30, 2014

Document Fiscal Year Focus

2014

Document Fiscal Period Focus

Q2

Amendment Flag

false

Entity Common Stock, Shares Outstanding

27,786,653

Condensed Consolidated Balance Sheet (USD $)

In Thousands, unless otherwise specified

Jun. 30, 2014

Dec. 31, 2013

Statement of Financial Position [Abstract]

Cash and cash equivalents

$ 9,288

$ 14,939

Investments in fixed maturities, at amortized cost

14,072

16,088

Accounts and other receivables

8,095

7,771

Prepaid expenses and other assets

1,059

935

Total current assets

32,514

39,733

Restricted cash

2,700

3,000

Investments in fixed maturities, at fair value

927

832

Property and equipment, net

5,167

3,124

Deferred offering costs

2,562

54

Intangible assets, net

4,880

4,910

Total assets

48,750

51,653

Accounts payable

4,179

1,263

Accrued liabilities

4,372

3,660

Claims reserve

4,393

5,612

Deferred revenue

8,771

8,468

Short-term debt

1,200

900

Warrant liabilities

4,380

4,900

Other payables

1,313

1,138

Deferred tax liabilities

82

Total current liabilities

28,690

26,023

Long-term debt

24,997

25,199

Deferred tax liabilities

1,542

1,540

Other liabilities

792

166

Total liabilities

56,021

52,928

Redeemable convertible preferred stock: $0.00001 par value per share

32,724

31,724

Common stock: $0.00001 par value per share

0

Special voting shares: $0.00001 par value per share

0

Additional paid-in capital

7,046

5,769

Accumulated other comprehensive loss

(45)

(164)

Accumulated deficit

(44,395)

(36,003)

Treasury stock, at cost

2,601

Total stockholders' deficit

(39,995)

(32,999)

Total liabilities, redeemable convertible preferred stock, and stockholders' deficit

$ 48,750

$ 51,653

Condensed Consolidated Balance Sheet Condensed Consolidated Balance Sheet Parentheticals (USD $)

In Thousands, except Share data, unless otherwise specified

Jun. 30, 2014

Dec. 31, 2013

Investment in fixed maturities, at amortized cost (fair value)

$ 14,072

$ 16,088

Investments in fixed maturities, at fair value (amortized cost)

$ 1,000

Common Stock [Member]

Common Stock, Par or Stated Value Per Share

$ 0

Common Stock, Shares Authorized

26,000,000

Common Stock, Shares, Issued

2,256,578

2,236,641

Common Stock, Shares, Outstanding

2,256,578

2,236,641

Convertible Preferred Stock [Member]

Preferred Stock, Par or Stated Value Per Share

$ 0

Preferred Stock, Shares Authorized

15,666,748

15,648,723

Preferred Stock, Shares Issued

14,944,945

14,857,989

Preferred Stock, Shares Outstanding

14,944,945

14,857,989

Treasury Stock [Member]

Treasury Stock, Shares

620,979

Special Voting Shares [Member]

Special Voting Shares, Par or Stated Value per Share

$ 0

Special Voting Shares, Shares Authorized

2,500,030

Special Voting Shares, Shares Issued

2,247,130

Special Voting Shares, Shares Outstanding

2,247,130

Condensed Consolidated Statement of Operations (USD $)

In Thousands, except Share data, unless otherwise specified

3 Months Ended

6 Months Ended

Jun. 30, 2014

Jun. 30, 2013

Jun. 30, 2014

Jun. 30, 2013

Income Statement [Abstract]

Revenue

$ 28,090

$ 19,842

$ 53,730

$ 37,684

Claims expenses

18,977

13,387

36,012

25,511

Other cost of revenue

3,963

2,626

7,812

4,736

Gross profit

5,150

3,829

9,906

7,437

Sales and marketing

2,810

2,268

5,456

4,840

Technology and development

2,553

1,152

4,753

2,035

General and administrative

3,292

2,022

6,078

3,949

Total operating expenses

8,655

5,442

16,287

10,824

Operating loss

(3,505)

(1,613)

(6,381)

(3,387)

Interest expense

726

143

1,468

266

Other (income) expense, net

(759)

73

522

181

Loss before income taxes

(3,472)

(1,829)

(8,371)

(3,834)

Income tax expense (benefit)

7

(5)

21

(84)

Net loss

$ (3,479)

$ (1,824)

$ (8,392)

$ (3,750)

Net loss per share: Basic and diluted (per share)

$ (2.25)

$ (1.32)

$ (5.47)

$ (3.03)

Weighted average shares used to compute net loss per share: Basic and diluted (in shares)

1,543,134

1,379,803

1,533,668

1,237,558

Condensed Consolidated Statement of Comprehensive Income Statement (USD $)

In Thousands, unless otherwise specified

3 Months Ended

6 Months Ended

Jun. 30, 2014

Jun. 30, 2013

Jun. 30, 2014

Jun. 30, 2013

Statement of Comprehensive Income [Abstract]

Net loss

$ (3,479)

$ (1,824)

$ (8,392)

$ (3,750)

Foreign currency translation adjustments

(27)

98

24

2

Change in unrealized losses on available-for-sale securities

60

(71)

95

(33)

Other comprehensive income (loss), net of taxes

33

27

119

(31)

Comprehensive loss

$ (3,446)

$ (1,797)

$ (8,273)

$ (3,781)

Condensed Consolidated Statement of Cash Flows (USD $)

In Thousands, unless otherwise specified

6 Months Ended

Jun. 30, 2014

Jun. 30, 2013

Statement of Cash Flows [Abstract]

Net loss

$ (8,392)

$ (3,750)

Depreciation and amortization

729

419

Amortization of debt discount

470

8

Loss on disposal of equipment

48

0

Warrant expense

480

126

Stock-based compensation expense

1,193

886

Loss from equity method investment

0

52

Net amortization on bonds

4

11

Accounts receivable

(320)

(4,623)

Prepaid expenses and other current assets

(121)

94

Accounts payable

75

(57)

Accrued liabilities

(428)

(406)

Claims reserve

(1,219)

2,123

Deferred revenue

303

3,423

Other payables

743

10

Net cash used in operating activities

(6,435)

(1,684)

Purchases of investment securities, held-to-maturity

(16,266)

(9,394)

Maturities of investment securities, held-to-maturity

18,277

9,106

Purchases of property and equipment

(2,268)

(877)

Net cash used in investing activities

(257)

(1,165)

Restricted cash

300

0

Advance on term loan

(2,000)

0

Deferred financing costs

(1,091)

0

Proceeds from exercise of stock options

46

374

(Repayments of) proceeds from line of credit

(300)

3,200

Net cash provided by financing activities

955

3,574

Effect of foreign exchange rates on cash, net

86

110

Net (decrease) increase in cash and cash equivalents

(5,651)

835

Cash and cash equivalents at beginning of period

14,939

4,234

Cash and cash equivalents at end of period

9,288

5,069

Income taxes paid

9

0

Interest paid

457

295

Warrants issued in conjunction with debt issuance

0

43

Exchange of stock and intangible asset for equity method investment

0

448

Increase in payables for property and equipment

518

36

Increase in payables for deferred financing costs

1,487

0

Cashless exercise of preferred stock warrants

$ 999

$ 0

Nature of Operations and Summary of Significant Accounting Policies

Description of Business

Trupanion, Inc. (collectively with its wholly-owned subsidiaries, the Company) is a direct-to-consumer monthly subscription service provider of a medical plan for cats and dogs throughout the United States, Canada and Puerto Rico.

Basis of Presentation

The condensed consolidated balance sheet data as of December 31, 2013 was derived from audited consolidated financial statements. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP) for unaudited condensed consolidated financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. These unaudited condensed consolidated financial statements and notes should be read in conjunction with the Company's audited consolidated financial statements and accompanying notes for the year ended December 31, 2013 included in the Company’s prospectus filed with the SEC pursuant to Rule 424(b) under the Securities Act of 1933 on July 18, 2014. The accompanying unaudited condensed consolidated financial statements reflect all adjustments consisting of normal recurring adjustments which, in the opinion of management, are necessary for a fair presentation of the Company's financial position and results of its operations, as of and for the periods presented. Operating results for the three and six months ended June 30, 2014 are not necessarily indicative of the results that may be expected for the year ending December 31, 2014, or for any other period.

Reclassifications

Certain prior year amounts have been reclassified within the Company’s consolidated financial statements from their original presentation to conform with the current period presentation.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingencies and the reported amounts of revenue and expenses. Significant items subject to such estimates and assumptions include the valuation of deferred tax assets, stock-based compensation, warrant liabilities, claims reserve, useful lives of software developed for internal use and income tax uncertainties. Actual results could differ from the estimates used in preparing the consolidated financial statements.

Income Taxes

The Company is subject to income taxes in the United States and in Canada. The provision for income taxes reflects the Company's estimated effective tax rate for the year. The difference between this rate and the U.S. federal income tax rate of 35% was primarily due to a full valuation allowance on its U.S. deferred tax assets. During the three and six months ended June 30, 2014, the Company reduced its accrual for its existing uncertain tax positions by $53.

Deferred Offering Costs

Deferred offering costs, including legal, accounting and other fees and costs related to our initial public offering, were capitalized and included as a noncurrent asset in the consolidated balance sheets. The deferred offering costs were offset against initial public offering proceeds upon the closing of the initial public offering. There were $2.6 million and $0.1 million of capitalized deferred offering costs as of June 30, 2014 and December 31, 2013, respectively, and no similar costs as of December 31, 2012.

Accumulated Other Comprehensive Loss

A rollforward of accumulated other comprehensive loss is as follows:



	ACCUMULATED OTHER COMPREHENSIVE LOSS
	UNREALIZED LOSSES ON AVAILABLE FOR SALE SECURITIES			FOREIGN CURRENCY GAIN
Balance at December 31, 2013	$	(168	)	$	4
Other comprehensive loss	35			51
Balance at March 31, 2014	(133		)	55
Other comprehensive loss	60			(27		)
Balance at June 30, 2014	$	(73	)	$	28

There were no reclassifications out of accumulated other comprehensive loss during the three and six months ended June 30, 2014 and 2013.

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (FASB) issued an Accounting Standard Update (ASU) amending revenue recognition guidance and requiring more detailed disclosures to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. Insurance contracts are excluded from the scope of this new guidance. The guidance is effective for annual and interim reporting periods beginning after December 15, 2016, with early adoption prohibited, and must be applied retrospectively or modified retrospectively. We are currently evaluating the impact this ASU will have on our consolidated financial statements.

Net Loss per Share

Earnings Per Share [Text Block]

Basic net loss per share is calculated by dividing the net loss by the weighted-average number of shares of common stock outstanding for the period. Excluded from the weighted-average number of shares outstanding are shares that have been issued and are subject to future vesting and unvested restricted stock. Diluted net loss per share is calculated by dividing the net loss by the weighted-average number of common stock equivalents outstanding for the period determined using the treasury-stock method. Potentially dilutive common stock equivalents are comprised of convertible preferred stock, warrants for the purchase of convertible preferred stock and common stock, exchangeable shares, unvested restricted stock and stock options. For all periods presented, there is no difference in the number of shares used to calculate basic and diluted shares outstanding due to the Company’s net loss position.

The following potential dilutive equity securities are not included in the diluted net loss per common share calculation because they would have had an antidilutive effect:



	AS OF JUNE 30,
	2014	2013
Stock options	4,959,826	4,408,170
Restricted stock	706,514	—
Warrants	784,111	135,672
Series A convertible preferred stock	7,553,239	7,466,283
Series B convertible preferred stock	3,546,384	3,546,384
Series C convertible preferred stock	3,845,322	3,845,322
Exchangeable shares	2,247,130	2,247,130

Convertible preferred stock is presented on an as converted basis to reflect the applicable conversion ratio.

Investment Securities (Notes)

Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

The amortized cost, gross unrealized holding gains and losses, and fair value of available-for-sale and held-to-maturity fixed maturity securities by major security type and class of security were as follows:



	AMORTIZED COST		GROSS UNREALIZED HOLDING GAINS		GROSS UNREALIZED HOLDING LOSSES			FAIR VALUE
As of June 30, 2014
Available-for-sale:
Municipal bond	$	1,000	$	—	$	(73	)	$	927
	$	1,000	$	—	$	(73	)	$	927
Held-to-maturity:
U.S. Treasury securities	$	5,779	$	—	$	(1	)	$	5,778
Certificates of deposit	2,700		—		—			2,700
U.S. government funds	5,593		—		—			5,593
	$	14,072	$	—	$	(1	)	$	14,071

	AMORTIZED COST		GROSS UNREALIZED HOLDING GAINS		GROSS UNREALIZED HOLDING LOSSES			FAIR VALUE
As of December 31, 2013
Available-for-sale:
Municipal bond	$	1,000	$	—	$	(168	)	$	832
	$	1,000	$	—	$	(168	)	$	832
Held-to-maturity:
U.S. Treasury securities	$	5,778	$	—	$	—		$	5,778
Certificates of deposit	2,700		—		—			$	2,700
U.S. government funds	7,610		—		—			$	7,610
	$	16,088	$	—	$	—		$	16,088

Maturities of debt securities classified as available-for-sale were as follows:



	JUNE 30, 2014
	AMORTIZED COST		FAIR VALUE
Available-for-sale:
Due under one year	$	—	$	—
Due after one year through five years	—		—
Due after five years through ten years	1,000		927
Due after ten years	—		—
	$	1,000	$	927

Maturities of debt securities classified held-to-maturity were as follows:



	JUNE 30, 2014
	AMORTIZED COST		FAIR VALUE
Held-to-maturity:
Due under one year	$	14,072	$	14,071
Due after one year through five years	—		—
Due after five years through ten years	—		—
Due after ten years	—		—
	$	14,072	$	14,071

The Company had one investment with an unrealized loss of $73 and a fair value of $927 at June 30, 2014 and an unrealized loss of $168 and a fair value of $832 at December 31, 2013. The debt security has been in the unrealized loss position for more than 12 months. The Company has assessed the bond for credit impairment and has determined that there is no intent to sell this bond and it is likely that it will hold the investment for a period of time sufficient to allow for a recovery. Furthermore, future payments on this bond are insured by a financial guarantee insurer. Therefore, the Company believes that the unrealized loss on this bond constitutes a temporary impairment.

Fair Value

Fair Value Disclosures [Text Block]

. Fair Value

The Company determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible.

When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels:


•	Level 1 inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date.


•	Level 2 inputs: Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.


•	Level 3 inputs: Unobservable inputs for the asset or liability 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 following table presents the placement in the fair value hierarchy of assets and liabilities that are measured at fair value on a recurring basis:



	AS OF JUNE 30, 2014
			LEVEL 1		LEVEL 2		LEVEL 3
Assets
Restricted cash	$	2,700	$	2,700	$	—	$	—
Municipal bond	927		—		927		—
Total	$	3,627	$	2,700	$	927	$	—
Liabilities
Warrant liabilities	$	4,380	$	—	$	—	$	4,380
Total	$	4,380	$	—	$	—	$	4,380

	AS OF DECEMBER 31, 2013
			LEVEL 1		LEVEL 2		LEVEL 3
Assets
Restricted cash	$	3,000	$	3,000	$	—	$	—
Municipal bond	832		—		832		—
Total	$	3,832	$	3,000	$	832	$	—
Liabilities
Warrant liabilities	$	4,900	$	—	$	—	$	4,900
Total	$	4,900	$	—	$	—	$	4,900

A rollforward of activity in investments valued using Level 3 inputs is as follows:



	WARRANT LIABILITIES
	2014			2013
Balance at January 1,	$	4,900		$	551
Issuance of warrants	—			44
Change in fair value upon remeasurement	1,219			98
Balance at March 31,	6,119			693
Settlement of warrant liability upon exercise	(999		)	—
Change in fair value upon remeasurement	(740		)	28
Balance at June 30,	$	4,380		$	721

Changes in fair value upon remeasurement are recorded in other (income) expense, net on the consolidated statement of operations.

The Company estimates fair value for its long-term debt based upon rates currently available to the Company for debt with similar terms and remaining maturities and this is a Level 3 measurement. Based upon the terms of the debt, the carrying amount of the $3,000 term loan approximates fair value at June 30, 2014 and December 31, 2013. The fair value of the $12,000 term loan was $12,078 and $12,000 at June 30, 2014 and December 31, 2013, respectively.

The Company’s accounting policy is to recognize transfers between levels of the fair value hierarchy on the date of the event or change in circumstances that caused the transfer. There were no transfers between levels for the six months ended June 30, 2014.

The following methods and assumptions were used to estimate the fair value of each class of financial instruments:

•

Investment securities: Debt securities classified as available-for-sale are measured using quoted market prices when quoted market prices are available. If quoted market prices in active markets for identical assets are not available to determine fair value, then the Company uses quoted prices of similar instruments and other significant inputs derived from observable market data obtained from third-party data providers. Held-to-maturity securities are carried at amortized cost and the fair value is disclosed in Note 3. Fair value is determined in the same manner as available-for-sale securities and are considered Level 2 measurements.

•

Warrant liabilities: These liabilities are valued using the Black-Scholes-Merton option-pricing model using certain unobservable inputs that are estimated by the Company. These inputs include a measure of volatility using an average of peer companies’ publicly traded stock volatility, expected dividend payments based on management’s assertion that no dividends will be paid in the near term, the remaining contractual term and a discount rate using an average equivalent bond yield calculation. The range of inputs used is as follows:



	THREE MONTHS ENDED JUNE 30,		SIX MONTHS ENDED JUNE 30,
	2014	2013	2014	2013
Expected volatility	39%–46%	40%–42%	34%–46%	40%–46%
Expected dividends	—%	—%	—%	—%
Risk-free rate	1.25%–1.62%	0.15%–1.96%	0.03%–1.73%	0.14%–1.96%
Term	3.5–5.8 years	0.8–6.8 years	0.1–6.0 years	0.8–7.0 years

An increase or decrease in any of these unobservable inputs would result in a change in the fair value measurement, which may be significant. The liabilities are revalued each period-end until exercised or expired. Gains and losses on revaluation of the liabilities are recorded in other (income) expense, net in the Company’s consolidated financial statements.

Debt

Debt Disclosure [Text Block]

5. Debt

The Company's outstanding debt at June 30, 2014 was as follows:



	PRINCIPAL	DISCOUNT	BALANCE	MATURITY
Line of credit	$14,900	$—	$14,900	July 23, 2015
Term loan	2,700	—	2,700	September 28, 2016
Term loan	12,000	3,403	8,597	December 23, 2016
	$29,600	$3,403	$26,197

The Company has a revolving line of credit with a bank, which is secured by any and all interest the Company has in assets that are not otherwise restricted. The revolving line of credit bears a variable interest rate as of June 30, 2014 and 2013, equal to the greater of 5.0% or 1.5% plus the prime rate. Interest expense is due monthly on the outstanding principal amount with all amounts outstanding under the revolving line of credit due upon maturity in July 2015.

On March 28, 2013, the Company obtained a term loan from the same bank of $3,000 in aggregate principal. The interest rate on the term loan was the greater of 5.5% or 2.0% plus the prime rate. All amounts outstanding under the term loan, including principal and accrued interest, were payable in 30 equal monthly installments beginning on April 28, 2014. $300 in principal was repaid on the loan during the three and six months ended June 30, 2014. The term loan would have matured in September 2016, at which time all amounts outstanding under it would have become immediately due and payable. During July 2014, the outstanding term loan was repaid in full.

Borrowings on the credit facility with the bank, inclusive of amounts under the revolving line of credit and the term loan, are limited to the lesser of $15,000 in 2014 and 2013, and the total amount of cash and securities held by American Pet Insurance Company, (APIC), less up to $500 for obligations the Company may have outstanding for other ancillary services.

On December 23, 2013, the Company obtained a term loan in an aggregate principal amount of $12,000. This note was entered into at a discount of $3,801 related to the issuance of warrants from the principal amount at maturity of $12,000. The term loan bore a fixed interest rate of 11.0% per year and was due on the earlier of three years from the issue date or certain triggering events, including a qualifying initial public offering. During July 2014, the outstanding term loan was repaid in full.

The credit agreements require the Company to comply with various financial and non-financial covenants. As of June 30, 2014, the Company was in compliance with these covenants. The credit facility with the bank also has a compensating balance requirement of $500. Substantially all of the Company's assets were pledged as collateral for the three outstanding loan facilities as of June 30, 2014.

Commitment and Contingencies

Commitments and Contingencies Disclosure [Text Block]

During 2013, the Company determined that it owes goods and services tax (GST) and harmonized sales tax (HST) in Canada for certain intercompany fees charged to its Canadian entities from 2007 through 2013. The Company began a voluntary self-disclosure with the Canada Revenue Agency for these unpaid taxes in 2014 under the Canada Revenue Agency Voluntary Disclosures Program, which would, if successful, avoid the imposition of penalties for late payment. Interest will be due on the amounts owed. The Company submitted the completed voluntary self-disclosure during the second quarter of 2014. The Company has accrued $983 of GST/HST tax for the 2007 through 2013 tax years, including interest.

The Company’s subsidiary, APIC, a New York corporation, received an inquiry from the California Department of Insurance (CDOI) in 2011 alleging APIC’s trial insurance policies issued in California are in violation of California law. The Company has disputed this assertion. In July 2014, the CDOI filed a notice of non-compliance regarding this issue. APIC received an extension to request a hearing to contest the notice. As of June 30, 2014 and December 31, 2013, the Company had accrued liabilities of $100 for this matter. While the Company intends to defend this matter vigorously, adverse outcomes beyond recorded amounts are reasonably possible. At this stage in the matter, however, the Company is unable to estimate a possible loss or range of possible loss beyond amounts previously accrued.

The Company received an inquiry from the Washington State Office of the Insurance Commissioner (OIC) in December 2012 concerning whether a subsidiary of the Company was properly licensed, and whether certain of its employees were properly licensed, under Washington law. The Company responded to this letter in January of 2013, stating that the subsidiary is licensed, and its employees are not required to be licensed under Washington law. The Company received additional correspondence from the OIC in July 2014 informing it that the OIC is scheduling a regulatory examination to further assess the Company’s compliance. Because of the inherent uncertainties of this matter, including the early stage and lack of specific claims, the Company currently believes the likelihood of a material loss is unlikely and cannot predict the impact (if any) that the matter may have on the Company’s business, results of operations, financial position or cash flows.

The Company also is subject to a variety of other claims and suits that arise from time to time in the ordinary course of its business.

The Company makes a provision for a liability relating to legal matters when it is both probable that a liability beyond previously accrued amounts has been incurred and the amount of the loss can be reasonably estimated. These provisions are reviewed at least quarterly and adjusted to reflect the impacts of negotiations, estimated settlements, legal rulings, advice of legal counsel and other information and events pertaining to a particular matter. Although management currently believes that resolving outstanding matters, individually or in aggregate, will not have a material adverse impact on the Company’s financial statements, these matters are subject to inherent uncertainties and management’s view of these matters may change in the future.

Segments

Segment Reporting Disclosure [Text Block]

The Company has two segments, subscription business and other business. The subscription business segment includes monthly subscriptions related to the Company’s medical plan, while the other business segment includes all other business, including policies written for third parties and policies written under a federal government program. The chief operating decision maker uses two measures to evaluate segment performance: revenue and gross profit. Corporate operating expenses, interest and other expenses, and income taxes are not allocated to the segments, nor included in the measure of segment profit or loss. The Company does not analyze discrete segment balance sheet information related to long-term assets.

Revenue and gross profit of the Company’s segments were as follows:



	THREE MONTHS ENDED						SIX MONTHS ENDED
	JUNE 30,						JUNE 30,
	2014			2013			2014			2013
Revenue:
Subscription business	$	25,359		$	18,368		$	48,448		$	35,385
Other business	2,731			1,474			5,282			2,299
	28,090			19,842			53,730			37,684
Claims expenses:
Subscription business	17,819			12,696			33,923			24,440
Other business	1,158			691			2,089			1,071
	18,977			13,387			36,012			25,511
Other cost of revenue:
Subscription business	2,699			2,002			5,198			3,731
Other business	1,264			624			2,614			1,005
	3,963			2,626			7,812			4,736
Gross profit:
Subscription business	4,841			3,670			9,327			7,214
Other business	309			159			579			223
	5,150			3,829			9,906			7,437
Sales and marketing	2,810			2,268			5,456			4,840
Technology and development	2,553			1,152			4,753			2,035
General and administrative	3,292			2,022			6,078			3,949
Operating loss	$	(3,505	)	$	(1,613	)	$	(6,381	)	$	(3,387	)

The following table presents the Company’s revenue by geographic region of the member:



	THREE MONTHS ENDED				SIX MONTHS ENDED
	JUNE 30,				JUNE 30,
	2014		2013		2014		2013
United States	$	20,925	$	13,747	$	39,822	$	25,702
Canada	7,165		6,095		13,908		11,982
Total revenue	$	28,090	$	19,842	$	53,730	$	37,684

Substantially all of the Company’s long-lived assets were located in the United States as of December 31, 2013 and June 30, 2014.

Subsequent Events

Subsequent Events [Text Block]

. Subsequent Events

On July 2, 2014, the Company entered into an amended and restated credit agreement in relation to its existing $12,000 term loan entered into on December 23, 2013 for a secured subordinated term loan totaling $29,000, which reflected an increase of $17,000 from the prior agreement. The term loan accrued interest at a fixed rate of 11.0% per year and was set to mature in December 2016. The term loan, however, required repayment in full upon the completion of our initial public offering, which would result in a 1.5% prepayment premium on the $17,000 increase. In connection with the amended and restated credit agreement, the Company also issued to the new lenders warrants to purchase an aggregate of 415,646 shares of common stock, with an exercise price $12.27 per share, subject to adjustment to the price per share upon the completion of an initial public offering. Certain lenders participating in these agreements were related parties.

On July 11, 2014, the Company fully repaid the $3,000 term loan entered into on March 28, 2013 which also resulted in a release of all restricted cash on hand.

On July 16, 2014, the 2014 Equity Incentive Plan and 2014 Employee Stock Purchase Plan were adopted by the Company's board of directors, which reserved 2,000,000 shares of common stock for issuance under each plan, subject to automatic renewal increases. In addition, the shares of common stock reserved but not issued under our 2007 Equity Compensation Plan as of the effective date of our 2014 Equity Compensation Plan became available for issuance under such plan.

On July 23, 2014, the Company amended and restated its certificate of incorporation to authorize the issuance of up to 200,000,000 shares of common stock and 10,000,000 shares of preferred stock.

On July 23, 2014, the Company completed an initial public offering (IPO) whereby 8,193,750 shares of common stock were sold to the public at a price of $10.00 per share. The Company received net proceeds of approximately $72.9 million from the IPO. Upon the closing of the IPO, all shares of the outstanding convertible preferred stock and exchangeable shares automatically converted into 14,944,945 and 2,247,130 shares of common stock, respectively. In connection with this conversion, all outstanding special voting shares were redeemed and all warrants to purchase convertible preferred stock were converted into warrants to purchase common stock. Also, existing common stock warrants, including warrants granted in July 2014, were adjusted such that they became warrants to purchase 870,000 shares of common stock at an exercise price of $10.00 per share and were moved from a liability classification to all equity classification on the balance sheet.

On July 23, 2014, the Company repaid the outstanding $29,000 term loan, related accrued interest of $895 and prepayment penalty of $255 in full.

Nature of Operations and Summary of Significant Accounting Policies (Policies)

Deferred Charges, Policy [Policy Text Block]

Deferred Offering Costs

Deferred offering costs, including legal, accounting and other fees and costs related to our initial public offering, were capitalized and included as a noncurrent asset in the consolidated balance sheets. The deferred offering costs were offset against initial public offering proceeds upon the closing of the initial public offering. There were $2.6 million and $0.1 million of capitalized deferred offering costs as of June 30, 2014 and December 31, 2013, respectively, and no similar costs as of December 31, 2012.

Description of Business and Basis of Presentation

Description of Business

Trupanion, Inc. (collectively with its wholly-owned subsidiaries, the Company) is a direct-to-consumer monthly subscription service provider of a medical plan for cats and dogs throughout the United States, Canada and Puerto Rico.

Basis of Presentation

The condensed consolidated balance sheet data as of December 31, 2013 was derived from audited consolidated financial statements. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP) for unaudited condensed consolidated financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. These unaudited condensed consolidated financial statements and notes should be read in conjunction with the Company's audited consolidated financial statements and accompanying notes for the year ended December 31, 2013 included in the Company’s prospectus filed with the SEC pursuant to Rule 424(b) under the Securities Act of 1933 on July 18, 2014. The accompanying unaudited condensed consolidated financial statements reflect all adjustments consisting of normal recurring adjustments which, in the opinion of management, are necessary for a fair presentation of the Company's financial position and results of its operations, as of and for the periods presented. Operating results for the three and six months ended June 30, 2014 are not necessarily indicative of the results that may be expected for the year ending December 31, 2014, or for any other

Reclassification, Policy [Policy Text Block]

Reclassifications

Certain prior year amounts have been reclassified within the Company’s consolidated financial statements from their original presentation to conform with the current period presentation

Use of Estimates [Policy Text Block]

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingencies and the reported amounts of revenue and expenses. Significant items subject to such estimates and assumptions include the valuation of deferred tax assets, stock-based compensation, warrant liabilities, claims reserve, useful lives of software developed for internal use and income tax uncertainties. Actual results could differ from the estimates used in preparing the consolidated financial statements.

Income Tax, Policy [Policy Text Block]

Income Taxes

The Company is subject to income taxes in the United States and in Canada. The provision for income taxes reflects the Company's estimated effective tax rate for the year. The difference between this rate and the U.S. federal income tax rate of 35% was primarily due to a full valuation allowance on its U.S. deferred tax assets. During the three and six months ended June 30, 2014, the Company reduced its accrual for its existing uncertain tax positions by $53.

New Accounting Pronouncements, Policy [Policy Text Block]

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (FASB) issued an Accounting Standard Update (ASU) amending revenue recognition guidance and requiring more detailed disclosures to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. Insurance contracts are excluded from the scope of this new guidance. The guidance is effective for annual and interim reporting periods beginning after December 15, 2016, with early adoption prohibited, and must be applied retrospectively or modified retrospectively. We are currently evaluating the impact this ASU will have on our consolidated financial statements.

Nature of Operations and Summary of Significant Accounting Policies (Tables)

Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]

Accumulated Other Comprehensive Loss

A rollforward of accumulated other comprehensive loss is as follows:



	ACCUMULATED OTHER COMPREHENSIVE LOSS
	UNREALIZED LOSSES ON AVAILABLE FOR SALE SECURITIES			FOREIGN CURRENCY GAIN
Balance at December 31, 2013	$	(168	)	$	4
Other comprehensive loss	35			51
Balance at March 31, 2014	(133		)	55
Other comprehensive loss	60			(27		)
Balance at June 30, 2014	$	(73	)	$	28

There were no reclassifications out of accumulated other comprehensive loss during the three and six months ended June 30, 2014 and 2013.

Net Loss per Share (Tables)

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block]

The following potential dilutive equity securities are not included in the diluted net loss per common share calculation because they would have had an antidilutive effect:



	AS OF JUNE 30,
	2014	2013
Stock options	4,959,826	4,408,170
Restricted stock	706,514	—
Warrants	784,111	135,672
Series A convertible preferred stock	7,553,239	7,466,283
Series B convertible preferred stock	3,546,384	3,546,384
Series C convertible preferred stock	3,845,322	3,845,322
Exchangeable shares	2,247,130	2,247,130

Investment Securities Available-for-Sale (Tables)

Investment [Table Text Block]

The amortized cost, gross unrealized holding gains and losses, and fair value of available-for-sale and held-to-maturity fixed maturity securities by major security type and class of security were as follows:



	AMORTIZED COST		GROSS UNREALIZED HOLDING GAINS		GROSS UNREALIZED HOLDING LOSSES			FAIR VALUE
As of June 30, 2014
Available-for-sale:
Municipal bond	$	1,000	$	—	$	(73	)	$	927
	$	1,000	$	—	$	(73	)	$	927
Held-to-maturity:
U.S. Treasury securities	$	5,779	$	—	$	(1	)	$	5,778
Certificates of deposit	2,700		—		—			2,700
U.S. government funds	5,593		—		—			5,593
	$	14,072	$	—	$	(1	)	$	14,071

	AMORTIZED COST		GROSS UNREALIZED HOLDING GAINS		GROSS UNREALIZED HOLDING LOSSES			FAIR VALUE
As of December 31, 2013
Available-for-sale:
Municipal bond	$	1,000	$	—	$	(168	)	$	832
	$	1,000	$	—	$	(168	)	$	832
Held-to-maturity:
U.S. Treasury securities	$	5,778	$	—	$	—		$	5,778
Certificates of deposit	2,700		—		—			$	2,700
U.S. government funds	7,610		—		—			$	7,610
	$	16,088	$	—	$	—		$	16,088

Available-for-sale Securities [Table Text Block]

Maturities of debt securities classified as available-for-sale were as follows:



	JUNE 30, 2014
	AMORTIZED COST		FAIR VALUE
Available-for-sale:
Due under one year	$	—	$	—
Due after one year through five years	—		—
Due after five years through ten years	1,000		927
Due after ten years	—		—
	$	1,000	$	927

Held-to-maturity Securities [Table Text Block]

Maturities of debt securities classified held-to-maturity were as follows:



	JUNE 30, 2014
	AMORTIZED COST		FAIR VALUE
Held-to-maturity:
Due under one year	$	14,072	$	14,071
Due after one year through five years	—		—
Due after five years through ten years	—		—
Due after ten years	—		—
	$	14,072	$	14,071

Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]

Accumulated Other Comprehensive Loss

A rollforward of accumulated other comprehensive loss is as follows:



	ACCUMULATED OTHER COMPREHENSIVE LOSS
	UNREALIZED LOSSES ON AVAILABLE FOR SALE SECURITIES			FOREIGN CURRENCY GAIN
Balance at December 31, 2013	$	(168	)	$	4
Other comprehensive loss	35			51
Balance at March 31, 2014	(133		)	55
Other comprehensive loss	60			(27		)
Balance at June 30, 2014	$	(73	)	$	28

There were no reclassifications out of accumulated other comprehensive loss during the three and six months ended June 30, 2014 and 2013.

Fair Value (Tables)

Fair value, asset & liabilities measured on recurring basis [Table Text Block]

The following table presents the placement in the fair value hierarchy of assets and liabilities that are measured at fair value on a recurring basis:



	AS OF JUNE 30, 2014
			LEVEL 1		LEVEL 2		LEVEL 3
Assets
Restricted cash	$	2,700	$	2,700	$	—	$	—
Municipal bond	927		—		927		—
Total	$	3,627	$	2,700	$	927	$	—
Liabilities
Warrant liabilities	$	4,380	$	—	$	—	$	4,380
Total	$	4,380	$	—	$	—	$	4,380

	AS OF DECEMBER 31, 2013
			LEVEL 1		LEVEL 2		LEVEL 3
Assets
Restricted cash	$	3,000	$	3,000	$	—	$	—
Municipal bond	832		—		832		—
Total	$	3,832	$	3,000	$	832	$	—
Liabilities
Warrant liabilities	$	4,900	$	—	$	—	$	4,900
Total	$	4,900	$	—	$	—	$	4,900

Fair value, assets measured on recurring basis, unobservable input reconciliation [Table Text Block]

A rollforward of activity in investments valued using Level 3 inputs is as follows:



	WARRANT LIABILITIES
	2014			2013
Balance at January 1,	$	4,900		$	551
Issuance of warrants	—			44
Change in fair value upon remeasurement	1,219			98
Balance at March 31,	6,119			693
Settlement of warrant liability upon exercise	(999		)	—
Change in fair value upon remeasurement	(740		)	28
Balance at June 30,	$	4,380		$	721

Fair value inputs, warrant liabilities, quantitative information [Table Text Block]

•

Warrant liabilities: These liabilities are valued using the Black-Scholes-Merton option-pricing model using certain unobservable inputs that are estimated by the Company. These inputs include a measure of volatility using an average of peer companies’ publicly traded stock volatility, expected dividend payments based on management’s assertion that no dividends will be paid in the near term, the remaining contractual term and a discount rate using an average equivalent bond yield calculation. The range of inputs used is as follows:



	THREE MONTHS ENDED JUNE 30,		SIX MONTHS ENDED JUNE 30,
	2014	2013	2014	2013
Expected volatility	39%–46%	40%–42%	34%–46%	40%–46%
Expected dividends	—%	—%	—%	—%
Risk-free rate	1.25%–1.62%	0.15%–1.96%	0.03%–1.73%	0.14%–1.96%
Term	3.5–5.8 years	0.8–6.8 years	0.1–6.0 years	0.8–7.0 years

Debt Debt (Tables)

Schedule of Debt [Table Text Block]

The Company's outstanding debt at June 30, 2014 was as follows:



	PRINCIPAL	DISCOUNT	BALANCE	MATURITY
Line of credit	$14,900	$—	$14,900	July 23, 2015
Term loan	2,700	—	2,700	September 28, 2016
Term loan	12,000	3,403	8,597	December 23, 2016
	$29,600	$3,403	$26,197

Stock-based Compensation (Tables)

Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]

The following table presents information regarding options granted, exercised and forfeited for the periods presented:



	NUMBER OF OPTIONS		WEIGHTED- AVERAGE EXERCISE PRICE		AGGREGATE INTRINSIC VALUE
December 31, 2013	4,663,445		$	2.12	$	30,406
Granted	376,100		10.51
Exercised	(19,937	)	2.31		141
Forfeited	(59,782	)	5.66
June 30, 2014	4,959,826		2.72		33,151

As of June 30, 2014, the stock options outstanding had a remaining contractual life of 7.0 years.



	NUMBER OF OPTIONS	WEIGHTED- AVERAGE FAIR VALUE		WEIGHTED- AVERAGE EXERCISE PRICE		WEIGHTED- AVERAGE REMAINING CONTRACTUAL TERM (IN YEARS)	AGGREGATE INTRINSIC VALUE
Vested and exercisable at December 31, 2013	2,719,609	$	1.32	$	1.38	6.03	$	19,908
Vested and exercisable at June 30, 2014	3,328,493	$	1.37	$	1.49	6.16	$	26,326

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

The following table presents information regarding options granted, exercised and forfeited for the periods presented:



	NUMBER OF OPTIONS		WEIGHTED- AVERAGE EXERCISE PRICE		AGGREGATE INTRINSIC VALUE
December 31, 2013	4,663,445		$	2.12	$	30,406
Granted	376,100		10.51
Exercised	(19,937	)	2.31		141
Forfeited	(59,782	)	5.66
June 30, 2014	4,959,826		2.72		33,151

As of June 30, 2014, the stock options outstanding had a remaining contractual life of 7.0 years.



	NUMBER OF OPTIONS	WEIGHTED- AVERAGE FAIR VALUE		WEIGHTED- AVERAGE EXERCISE PRICE		WEIGHTED- AVERAGE REMAINING CONTRACTUAL TERM (IN YEARS)	AGGREGATE INTRINSIC VALUE
Vested and exercisable at December 31, 2013	2,719,609	$	1.32	$	1.38	6.03	$	19,908
Vested and exercisable at June 30, 2014	3,328,493	$	1.37	$	1.49	6.16	$	26,326

Stock-based compensation expense includes stock options and restricted stock granted to employees and non-employees and has been reported in the Company’s statements of operations in claims expenses, other cost of revenue, sales and marketing, technology and development, and general and administrative expenses depending on the function performed by the employee or non-employee. As of June 30, 2014, the Company had unrecognized stock-based compensation of $8,850 related to stock options and restricted stock held by employees and non-employees, which is expected to vest over a weighted-average period of approximately 1.7 years. As of June 30, 2014, the Company had 1,631,333 unvested stock options and 706,514 restricted stock awards that are expected to vest. No net tax benefits related to the stock-based compensation costs have been recognized since the Company’s inception. The expense recognized in each category is provided in the table below:



	THREE MONTHS ENDED JUNE 30,				SIX MONTHS ENDED JUNE 30,
	2014		2013		2014		2013
Claims expenses	$	51	$	39	$	108	$	71
Other cost of revenue	13		9		37		17
Sales and marketing	144		202		293		345
Technology and development	98		94		196		165
General and administrative	320		141		559		288
Total stock-based compensation	$	626	$	485	$	1,193	$	886

Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Table Text Block]

Stock-based compensation expense includes stock options and restricted stock granted to employees and non-employees and has been reported in the Company’s statements of operations in claims expenses, other cost of revenue, sales and marketing, technology and development, and general and administrative expenses depending on the function performed by the employee or non-employee. As of June 30, 2014, the Company had unrecognized stock-based compensation of $8,850 related to stock options and restricted stock held by employees and non-employees, which is expected to vest over a weighted-average period of approximately 1.7 years. As of June 30, 2014, the Company had 1,631,333 unvested stock options and 706,514 restricted stock awards that are expected to vest. No net tax benefits related to the stock-based compensation costs have been recognized since the Company’s inception. The expense recognized in each category is provided in the table below:



	THREE MONTHS ENDED JUNE 30,				SIX MONTHS ENDED JUNE 30,
	2014		2013		2014		2013
Claims expenses	$	51	$	39	$	108	$	71
Other cost of revenue	13		9		37		17
Sales and marketing	144		202		293		345
Technology and development	98		94		196		165
General and administrative	320		141		559		288
Total stock-based compensation	$	626	$	485	$	1,193	$	886

Segments (Tables)

Revenue and Gross Profit from Segments [Table Text Block]

The Company has two segments, subscription business and other business. The subscription business segment includes monthly subscriptions related to the Company’s medical plan, while the other business segment includes all other business, including policies written for third parties and policies written under a federal government program. The chief operating decision maker uses two measures to evaluate segment performance: revenue and gross profit. Corporate operating expenses, interest and other expenses, and income taxes are not allocated to the segments, nor included in the measure of segment profit or loss. The Company does not analyze discrete segment balance sheet information related to long-term assets.

Revenue and gross profit of the Company’s segments were as follows:



	THREE MONTHS ENDED						SIX MONTHS ENDED
	JUNE 30,						JUNE 30,
	2014			2013			2014			2013
Revenue:
Subscription business	$	25,359		$	18,368		$	48,448		$	35,385
Other business	2,731			1,474			5,282			2,299
	28,090			19,842			53,730			37,684
Claims expenses:
Subscription business	17,819			12,696			33,923			24,440
Other business	1,158			691			2,089			1,071
	18,977			13,387			36,012			25,511
Other cost of revenue:
Subscription business	2,699			2,002			5,198			3,731
Other business	1,264			624			2,614			1,005
	3,963			2,626			7,812			4,736
Gross profit:
Subscription business	4,841			3,670			9,327			7,214
Other business	309			159			579			223
	5,150			3,829			9,906			7,437
Sales and marketing	2,810			2,268			5,456			4,840
Technology and development	2,553			1,152			4,753			2,035
General and administrative	3,292			2,022			6,078			3,949
Operating loss	$	(3,505	)	$	(1,613	)	$	(6,381	)	$	(3,387	)

Revenue from External Customers by Geographic Areas [Table Text Block]

The following table presents the Company’s revenue by geographic region of the member:



	THREE MONTHS ENDED				SIX MONTHS ENDED
	JUNE 30,				JUNE 30,
	2014		2013		2014		2013
United States	$	20,925	$	13,747	$	39,822	$	25,702
Canada	7,165		6,095		13,908		11,982
Total revenue	$	28,090	$	19,842	$	53,730	$	37,684

Nature of Operations and Summary of Significant Accounting Policies (Details) Narrative (USD $)

In Thousands, unless otherwise specified

6 Months Ended

Jun. 30, 2014

Dec. 31, 2013

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Deferred offering costs

$ 2,562

$ 54

Uncertain tax position reduction

$ 53

Nature of Operations and Summary of Significant Accounting Policies (Details) OCI (USD $)

In Thousands, unless otherwise specified

3 Months Ended

6 Months Ended

Jun. 30, 2014

Mar. 31, 2014

Jun. 30, 2013

Jun. 30, 2014

Jun. 30, 2013

Dec. 31, 2013

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Accumulated other comprehensive loss: unrealized loss on available for sale securities

$ (73)

$ (133)

$ (73)

$ (168)

Accumulated other comprehensive loss: foreign currency gain

28

55

28

4

Available-for-sale securities, gross unrealized loss

60

35

Unrealized foreign currency gain (loss)

$ (27)

$ 51

$ 98

$ 24

$ 2

Net Loss per Share (Details) Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share

Jun. 30, 2014

Jun. 30, 2013

Stock options

Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]

Common shares attributable to dilutive effect of stock options

4,959,826

4,408,170

Restricted stock

Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]

Common shares attributable to dilutive effect of restricted stock

706,514

0

Warrants

Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]

Common shares attributable to dilutive effect of warrants

784,111

135,672

Series A convertible preferred stock

Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]

Common shares attributable to dilutive effect of preferred stock

7,553,239

7,466,283

Series B convertible preferred stock

Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]

Common shares attributable to dilutive effect of preferred stock

3,546,384

Series C convertible preferred stock

Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]

Common shares attributable to dilutive effect of preferred stock

3,845,322

Exchangeable shares

Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]

Common shares attributable to dilutive effect of exchangeable shares

2,247,130

Investment Securities (Details) Investment Schedule (USD $)

In Thousands, unless otherwise specified

Jun. 30, 2014

Mar. 31, 2014

Dec. 31, 2013

Investment [Line Items]

Held-to-maturity securities, amortized cost

$ 14,072

$ 16,088

Held-to-maturity securities, gross unrealized holding gains

0

Held-to-maturity securities, gross unrealized holding losses

(1)

0

Held-to-maturity securities, fair value

14,071

16,088

Available-for-sale securities, amortized cost

1,000

Available-for-sale securities, gross unrealized holding losses

0

Available-for-sale securities, gross unrealized holding losses

(73)

(133)

(168)

Available-for-sale securities, fair value

927

832

Municipal bond

Investment [Line Items]

Available-for-sale securities, amortized cost

1,000

Available-for-sale securities, gross unrealized holding losses

0

Available-for-sale securities, gross unrealized holding losses

(73)

(168)

Available-for-sale securities, fair value

927

832

U.S. Treasury securities

Investment [Line Items]

Held-to-maturity securities, amortized cost

5,779

5,778

Held-to-maturity securities, gross unrealized holding gains

0

Held-to-maturity securities, gross unrealized holding losses

(1)

0

Held-to-maturity securities, fair value

5,778

Certificates of deposit

Investment [Line Items]

Held-to-maturity securities, amortized cost

2,700

Held-to-maturity securities, gross unrealized holding gains

0

Held-to-maturity securities, gross unrealized holding losses

0

Held-to-maturity securities, fair value

2,700

US government debt securities

Investment [Line Items]

Held-to-maturity securities, amortized cost

5,593

7,610

Held-to-maturity securities, gross unrealized holding gains

0

Held-to-maturity securities, gross unrealized holding losses

0

Held-to-maturity securities, fair value

$ 5,593

$ 7,610

Investment Securities (Details) Narrative (USD $)

In Thousands, unless otherwise specified

Jun. 30, 2014

Dec. 31, 2013

Investments, Debt and Equity Securities [Abstract]

Available-for-sale securities, debt maturities, fair value

$ 927

$ 832

Available-for-sale securities, continuous unrealized loss position, fair value

$ 73

$ 168

Investment Securities (Details) Held-to-Maturity (USD $)

In Thousands, unless otherwise specified

Jun. 30, 2014

Dec. 31, 2013

Investments, Debt and Equity Securities [Abstract]

Held-to-maturity securities, debt maturities, within one year, net carrying amount

$ 14,072

Held-to-maturity securities, debt maturities, within one year, fair value

14,071

Held-to-maturity securities, debt maturities, year two through five, net carrying amount

0

Held-to-maturity securities, debt maturities, year two through five, fair value

0

Held-to-maturity securities, debt maturities, year six through ten, net carrying amount

0

Held-to-maturity securities, debt maturities, year six through ten, fair value

0

Held-to-maturity securities, debt maturities, after ten years, net carrying amount

0

Held-to-maturity securities, debt maturities, after ten years, fair value

0

Held-to-maturity securities, amortized cost

14,072

16,088

Held-to-maturity securities, fair value

$ 14,071

$ 16,088

Investment Securities (Details) Available-for-Sale (USD $)

In Thousands, unless otherwise specified

Jun. 30, 2014

Dec. 31, 2013

Investments, Debt and Equity Securities [Abstract]

Available-for-sale securities, debt maturities, next twelve months, amortized cost basis

$ 0

Available-for-sale securities, debt maturities, next twelve months, fair value

0

Available-for-sale securities, debt maturities, year two through five, amortized cost basis

0

Available-for-sale securities, debt maturities, year two through five, fair value

0

Available-for-sale securities, debt maturities, year six through ten, amortized cost basis

1,000

Available-for-sale securities, debt maturities, year six through ten, fair value

927

Available-for-sale securities, debt maturities, after ten years, amortized cost basis

0

Available-for-sale securities, debt maturities, after ten years, fair value

0

Available-for-sale securities, amortized cost basis

1,000

Available-for-sale securities, debt maturities, fair value

$ 927

$ 832

Fair Value (Details) Unobservable (USD $)

In Thousands, unless otherwise specified

Jun. 30, 2014

Dec. 31, 2013

Jun. 30, 2013

Mar. 31, 2013

Dec. 31, 2012

Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]

Restricted cash and cash equivalents

$ 2,700

$ 3,000

Marketable securities, noncurrent

927

832

Total

3,627

3,832

Warrant liabilities

4,380

4,900

721

693

551

Total

4,380

4,900

Level 1

Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]

Restricted cash and cash equivalents

2,700

3,000

Marketable securities, noncurrent

0

Total

2,700

3,000

Warrant liabilities

0

Total

0

Level 2

Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]

Restricted cash and cash equivalents

0

Marketable securities, noncurrent

927

832

Total

927

832

Warrant liabilities

0

Total

0

Level 3

Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items]

Restricted cash and cash equivalents

0

Marketable securities, noncurrent

0

Total

0

Warrant liabilities

4,380

4,900

Total

$ 4,380

$ 4,900

Fair Value (Details) Narrative (USD $)

In Thousands, unless otherwise specified

Jun. 30, 2014

Dec. 31, 2013

Fair Value Disclosures [Abstract]

Fair value, term loan 1

$ 3,000

Term loan 2

12,000

Fair value, term loan 2

$ 12,078

$ 12,000

Fair Value (Details) Rollforward of Level 3 (USD $)

In Thousands, unless otherwise specified

3 Months Ended

6 Months Ended

Jun. 30, 2014

Mar. 31, 2014

Jun. 30, 2013

Mar. 31, 2013

Jun. 30, 2014

Jun. 30, 2013

Dec. 31, 2013

Dec. 31, 2012

Fair Value Disclosures [Abstract]

Warrant liabilities

$ 4,380

$ 721

$ 693

$ 4,380

$ 721

$ 4,900

$ 551

Stock and warrants issued during period (in shares)

0

44

Settlement of warrant liability awards

(999)

0

999

0

Fair Value Adjustment of Warrants

$ (740)

$ 1,219

$ 28

$ 98

$ 480

$ 126

Fair Value (Details) Parenthetical (USD $)

In Thousands, unless otherwise specified

3 Months Ended

6 Months Ended

Jun. 30, 2014

Jun. 30, 2013

Jun. 30, 2014

Jun. 30, 2013

Dec. 31, 2013

Fair Value Disclosures [Abstract]

Fair value assumptions, expected volatility rate, minimum (percentage)

39.00%

40.00%

34.00%

40.00%

Fair value assumptions, expected volatility rate, maximum (percentage)

46.00%

42.00%

46.00%

Fair value assumptions, expected dividend rate (percentage)

0.00%

Fair value assumptions, risk-free interest rate, minimum (percentage)

1.25%

0.15%

0.03%

0.14%

Fair value assumptions, risk-free interest rate, maximum (percentage)

1.62%

1.96%

1.73%

1.96%

Fair value input minimum term

3 years 6 months 11 days

9 months 11 days

1 month 11 days

9 months 11 days

Fair value input, maximum term

5 years 9 months 11 days

6 years 9 months 11 days

6 months 11 days

7 months 11 days

Fair value, term loan 1

$ 3,000

Fair value, term loan 2

12,078

12,000

Carrying value, term loan 1

3,000

Carrying value, term loan 2

$ 12,000

Debt (Details) Schedule of Debt (USD $)

In Thousands, unless otherwise specified

6 Months Ended

Jun. 30, 2014

Dec. 31, 2013

Jun. 30, 2014

Line of credit

Jun. 30, 2014

Term loan

Jun. 30, 2014

Term loan

Debt Instrument [Line Items]

Principal

$ 29,600

$ 14,900

$ 2,700

$ 12,000

Discount

3,403

3,801

0

3,403

Balance

$ 26,197

$ 14,900

$ 2,700

$ 8,597

Maturity

Jul. 23, 2015

Sep. 28, 2016

Dec. 23, 2016

Debt (Details) Narrative (USD $)

In Thousands, unless otherwise specified

3 Months Ended

6 Months Ended

Jun. 30, 2014

Dec. 31, 2013

Debt Disclosure [Abstract]

Line of credit facility, interest rate description

greater of 5.0% or 1.5% plus the prime rate

Term loan 2

$ 12,000

Term loan, interest rate description

greater of 5.5% or 2.0% plus the prime rate

Repayments of debt

300

Line of credit facility, maximum borrowing capacity

15,000

Discount

3,403

3,801

Debt instrument, interest rate, stated percentage (interest rate)

0.00%

Compensating balance, amount

$ 500

Commitment and Contingencies (Details) Narrative (USD $)

In Thousands, unless otherwise specified

Jun. 30, 2014

Commitments and Contingencies Disclosure [Abstract]

GST/HST tax accrual

$ 983

Loss contingency accrual

$ 100

Stock-based Compensation (Details) Options Granted, Exercised and Forfeited (USD $)

In Thousands, except Share data, unless otherwise specified

6 Months Ended

Jun. 30, 2014

Dec. 31, 2013

Stock-based Compensation

Stock-based compensation, options, forfeited, weighted-average exercise price

$ 5.66

Stock-based compensation, options, outstanding, number of shares

4,959,826

4,663,445

Stock-based compensation, options, outstanding, weighted-average exercise price

$ 2.72

$ 2.12

Stock-based compensation, options, outstanding, aggregate intrinsic value

$ 33,151

$ 30,406

Stock-based compensation, options, granted, number of options

376,100

Stock-based compensation, options, granted, weighted-average exercise price

$ 10.51

Stock-based compensation, options, exercised, weighted-average exercise price

$ 2.31

Stock-based compensation, options, exercised

(19,937)

Stock-based compensation, options, exercised, aggregate intrinsic value

$ 141

Stock-based compensation, options, forfeited

(59,782)

Stock-based Compensation (Details) Vested and Expected to Vest (USD $)

In Thousands, except Share data, unless otherwise specified

6 Months Ended

12 Months Ended

Jun. 30, 2014

Dec. 31, 2013

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Number of options

3,328,493

2,719,609

Weighted-average fair value

$ 1.37

$ 1.32

Weighted-average exercise price

$ 1.49

$ 1.38

Weighted-average remaining contractual term (in years)

6 years 1 month 28 days

6 years 0 months 11 days

Aggregate intrinsic value

$ 26,326

$ 19,908

Stock-based Compensation (Details) Percentage (USD $)

In Thousands, unless otherwise specified

3 Months Ended

6 Months Ended

Jun. 30, 2014

Jun. 30, 2013

Jun. 30, 2014

Jun. 30, 2013

Stock-based Compensation

Share-based compensation arrangement by share-based payment award, compensation cost

$ 626

$ 485

$ 1,193

$ 886

Claims expense

Stock-based Compensation

Share-based compensation arrangement by share-based payment award, compensation cost

51

39

108

71

Other cost of revenue

Stock-based Compensation

Share-based compensation arrangement by share-based payment award, compensation cost

13

9

37

17

Sales and marketing

Stock-based Compensation

Share-based compensation arrangement by share-based payment award, compensation cost

144

202

293

345

Technology and development

Stock-based Compensation

Share-based compensation arrangement by share-based payment award, compensation cost

98

94

196

165

General and administrative

Stock-based Compensation

Share-based compensation arrangement by share-based payment award, compensation cost

$ 320

$ 141

$ 559

$ 288

Stock-based Compensation (Details) Narrative (USD $)

In Thousands, except Share data, unless otherwise specified

6 Months Ended

Jun. 30, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Employee service share-based compensation, nonvested awards, compensation cost not yet recognized

$ 8,850

Remaining contractual life, share-based payments, weighted average

7 years 0 months 5 days

Share-based compensation arrangement , non-employee, weighted average remaining vesting period

1 year 8 months 6 days

Share-based compensation arrangement by share-based payment award, options, nonvested, number of shares

1,631,333

Restricted stock, expected to vest

706,514

Segments (Details) Business Segment (USD $)

In Thousands, unless otherwise specified

3 Months Ended

6 Months Ended

Jun. 30, 2014

Jun. 30, 2013

Jun. 30, 2014

Jun. 30, 2013

Segment Reporting Information [Line Items]

Revenue

$ 28,090

$ 19,842

$ 53,730

$ 37,684

Claims expenses

18,977

13,387

36,012

25,511

Other cost of revenue

3,963

2,626

7,812

4,736

Gross profit

5,150

3,829

9,906

7,437

Sales and marketing

2,810

2,268

5,456

4,840

Technology and development

2,553

1,152

4,753

2,035

General and administrative

3,292

2,022

6,078

3,949

Operating loss

(3,505)

(1,613)

(6,381)

(3,387)

Subscription business

Segment Reporting Information [Line Items]

Revenue

25,359

18,368

48,448

35,385

Claims expenses

17,819

12,696

33,923

24,440

Other cost of revenue

2,699

2,002

5,198

3,731

Gross profit

4,841

3,670

9,327

7,214

Other business

Segment Reporting Information [Line Items]

Revenue

2,731

1,474

5,282

2,299

Claims expenses

1,158

691

2,089

1,071

Other cost of revenue

1,264

624

2,614

1,005

Gross profit

$ 309

$ 159

$ 579

$ 223

Segments (Details) Revenue by Geography (USD $)

In Thousands, unless otherwise specified

3 Months Ended

6 Months Ended

Jun. 30, 2014

Jun. 30, 2013

Jun. 30, 2014

Jun. 30, 2013

Segment Reporting Information [Line Items]

Revenues

$ 28,090

$ 19,842

$ 53,730

$ 37,684

CANADA

Segment Reporting Information [Line Items]

Revenues

7,165

6,095

13,908

11,982

UNITED STATES

Segment Reporting Information [Line Items]

Revenues

$ 20,925

$ 13,747

$ 39,822

$ 25,702

Subsequent Events (Details) Narrative (USD $)

6 Months Ended

0 Months Ended

Jun. 30, 2014

Jun. 30, 2013

Dec. 31, 2013

Jul. 23, 2014

Subsequent Event [Member]

Jul. 23, 2014

Subsequent Event [Member]

Jul. 16, 2014

Subsequent Event [Member]

Jul. 11, 2014

Subsequent Event [Member]

Jul. 2, 2014

Subsequent Event [Member]

Subsequent Event [Line Items]

Term loan 2

$ 12,000,000

Additional Term Loan Assumed Subsequent to Quarter End

17,000,000

Warrants Issued (in shares)

415,646

Debt instrument, interest rate, stated percentage (interest rate)

0.00%

Prepayment Penalty Rate on Term Loan (interest rate)

1.50%

Prepayment Penalty on Term Loan

255,000

Investment Warrants, Exercise Price

$ 10.00

$ 12.27

Term loan 1

3,000,000

Stock Repurchase Program, Authorized Amount

2,000,000

Common Stock, Shares Authorized

200,000,000

Preferred Stock, Shares Authorized

10,000,000

Per Share Offer Price in Initial Public Offering (per share)

$ 10.00

Shares Offered in Initial Public Offering (in shares)

8,193,750

Proceeds from Issuance Initial Public Offering

72,873,000

Conversion of Stock, Shares Issued (in shares)

14,944,945

Exchangeable Shares Converted into Common Shares (in shares)

2,247,130

Class of Warrant or Right, Outstanding (in shares)

870,000

Long-term Debt, Gross

29,600,000

29,000,000

Subordinated Debt

29,000,000

Interest paid

$ 457,000

$ 295,000

$ 895,000