Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit)

12 Months Ended

Dec. 31, 2016

Statement Of Stockholders Equity [Abstract]

Redeemable Convertible Preferred Stock and Stockholders' Equity (Deficit)

Note 7. Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)

Upon the effectiveness of the registration statement related to the initial public offering on July 20, 2016, all of our previously outstanding shares of redeemable convertible preferred stock automatically converted into 8,531,146 of common stock at the conversion rate of 1- to-1 and shares of Series 2 redeemable convertible preferred stock automatically converted into common stock at the conversion ratio of 1-to-1.25. The related carrying value of the redeemable convertible preferred stock of $106.1 million was reclassified to common stock and additional paid-in capital.

Our previously outstanding Series 1 and Series 2 preferred stock included certain redemption provisions which prevented us from including these amounts in stockholders’ equity (deficit). Holders of our Series 1 and Series 2 redeemable convertible preferred stock were entitled to accretion equal to 7% annual interest (non-compounded) on the original price paid per share of the applicable series of preferred stock. We recorded accretion of $6.3 million and $11.3 million during 2016 and 2015, respectively, in respect of our outstanding Series 1 and Series 2 redeemable convertible preferred stock. Accretion is generally recorded against distributable earnings. Since we have accumulated losses, we record accretion against additional paid-in capital until there is no remaining capital. Thereafter, accretion is recorded against our accumulated deficit.

Common Stock

As of December 31, 2016, we had authorized 495,000,000 shares of voting $0.001 par value common stock. Each holder of the common stock is entitled to one vote per common share. At its discretion, the Board of Directors may declare dividends on shares of common stock, subject to the prior rights of our preferred stockholders. Upon liquidation or dissolution, holders of common stock will receive distributions only after preferred stock preferences have been satisfied.

As of December 31, 2015, 25,000 common stock warrants were outstanding with an exercise price of $2.52 per share. These common stock warrants were exercised in July 2016.

Preferred Stock Warrants

The following table presents the preferred stock warrants outstanding, all with exercise prices of $9.318 per share, as of December 31, 2015, all such balances as of December 31, 2016 were $0:

	ISSUANCE			FAIR VALUE AT DECEMBER 31
	DATE	SHARES		2015
				(in thousands)
Series 2 preferred stock (1)	June 2, 2010		2,004	$	24
Series 2 preferred stock (1)	February 1, 2011		1,458		18
Series 2 preferred stock (1)	July 13, 2012		41,666		548
Series 2 preferred stock (2)	June 30, 2010		218,523		2,275
Total Series 2 redeemable convertible preferred stock			263,651	$	2,865

⁽¹⁾ These warrants exercised on a net exercise basis in July 2016.

⁽²⁾ These warrants either were exercised prior to our initial public offering or automatically exercised on a net exercise basis as the per share price of common stock sold to the public in our initial public offering exceeded the exercise price of the warrants.