Fair Value of Financial Instruments

6 Months Ended

Jun. 30, 2018

Disclosure Text Block

Fair Value of Financial Instruments

3. FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company categorizes assets and liabilities recorded or disclosed at fair value on our condensed consolidated balance sheets based upon the level of judgment associated with inputs used to measure their fair value. The categories are as follows:

• Level 1—Inputs are unadjusted quoted prices in active markets for identical assets or liabilities.

• Level 2—Inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the assets or liabilities, either directly or indirectly.

• Level 3—Inputs are unobservable inputs based on our own assumptions used to measure assets and liabilities at fair value. The inputs require significant management judgment or estimation.

The following tables present information about the Company's financial assets and liabilities measured at fair value on a recurring basis and indicate the level of the fair value hierarchy utilized to determine such fair values:

	June30,2018
	Level1		Level2		Level3		Total
Assets:
Cash equivalents	$	166,173	$	—	$	—	$	166,173
	$	166,173	$	—	$	—	$	166,173
Liabilities:
SeriesD preferred stock warrant liability		—		—		—		—
Common stock warrant liability		—		—		—		—
	$	—	$	—	$	—	$	—

	December31,2017
	Level1		Level2		Level3		Total
Assets:
Cash equivalents	$	21,597	$	—	$	—	$	21,597
	$	21,597	$	—	$	—	$	21,597
Liabilities:
SeriesD preferred stock warrant liability	$	—	$	—	$	992	$	992
Common stock warrant liability		—		—		1,774		1,774
	$	—	$	—	$	2,766	$	2,766

As of June 30, 2018 and December 31, 2017, the Company's cash equivalents, which were invested in money market funds, were valued based on Level1 inputs.

Changes in the fair values of the Company's preferred stock warrant liabilities and common stock warrant liability for the six months ended June 30, 2018 were as follows:

	SeriesD
	PreferredStock		CommonStock
	WarrantLiability		WarrantLiability
Fair value at December31,2017		992		1,774
Change in fair value		1,378		7,460
Exercise of common stock warrant		—		(9,234)
Conversion to common stock warrant		(2,370)		—
Fair value at June30,2018	$	—	$	—

Upon the closing of the IPO, the warrants for the purchase of Series D preferred stock became warrants to purchase common stock. The Company valued the Series D preferred stock liability as of the IPO closing date using the Black-Scholes option pricing-model and recorded a change in the fair value of the preferred stock warrants through that date. The Series D preferred stock warrant liability was then reclassified to additional paid-in capital. Additionally, the warrants for the purchase of common stock were exercised to purchase 485,985 shares of common stock upon the closing of the IPO. The Company valued the common stock warrant liability as of the IPO date using the $19 per share offering price and recorded a change in the fair value of the common stock warrants through that date. The common stock warrant liability was then reclassified to common stock and additional paid-in capital.