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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2013

Fair Value of Outstanding Preferred Stock Warrants

The fair value of the outstanding preferred stock warrants at December 31, 2012 was estimated using the Black-Scholes option pricing model with the following assumptions:


	December 31, 2012
Assumed risk-free interest rate		0.25 – 1.78	%
Assumed volatility		80	%
Expected warrant life		2.08 – 9.50 years
Expected dividend yield		0.0	%

Liabilities Measured at Fair Value on Recurring Basis

Liabilities measured at fair value on a recurring basis as of December 31, 2012 are as follows:


			Fair Value Measurements at Reporting Date Using
	Balance as of December 31, 2012		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Preferred stock warrant liability	$	56,000	$	0	$	0	$	56,000

Total liabilities	$	56,000	$	0	$	0	$	56,000

Reconciliation of Company's Liabilities Measured Using Significant Unobservable Inputs

The following table is a reconciliation of all the Company’s liabilities measured using significant unobservable inputs (Level 3) for the year ended December 31, 2012 and the nine months ended September 30, 2013:


	Warrant Liability
Balance at December 31, 2011	$	39,000
Warrants issued in connection with loan and security agreement		24,250
Change in fair value of warrant liability		(7,250	)

Balance at December 31, 2012		56,000
Warrants issued in connection with loan and security agreement		49,000
Change in fair value of warrant liability		82,000
Reclassification to additional paid-in capital upon closing of IPO		(187,000	)

Balance at September 30, 2013	$	—

- 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.

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- Definition

Tabular disclosure of the fair value measurement of liabilities using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets), and gains or losses recognized in other comprehensive income (loss) and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs) by class of liability.

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