Stockholders' Deficit (Tables)

9 Months Ended

Sep. 30, 2017

Schedule of Activity Under Equity Incentive Plan

Activity under the Company’s equity incentive plans is as follows:

	Shares Available for Grant			Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)		Weighted Average Grant Date Fair Value Per Share
Balance, December 31, 2016		409,582			22,334,508			3.66		6.6		—
Increase authorization		6,250,000			—					—		—
Granted		(6,013,312	)		6,013,312			7.47		—	$	3.48
Exercised		—			(445,995	)		3.91		—		—
Forfeited and expired		575,554			(575,554	)		5.49		—		—
Balance, September 30, 2017		1,221,824			27,326,271			4.46		6.7		—

Schedule of Convertible Preferred Stock

Convertible Preferred Stock— As of September 30, 2017 and December 31, 2016 convertible preferred stock consisted of the following (in thousands, except share and per share data):

	September 30, 2017 and December 31,2016
Series	Price		Shares Authorized		Shares Outstanding		Liquidation Preference
A	$	0.36312		23,020,000		23,019,997	$	8,359
B		0.93808		6,396,071		6,396,068		6,000
C-1		0.54109		9,240,560		9,240,558		5,000
C-2		0.64931		8,950,467		7,700,466		5,000
D		2.37840		4,685,755		4,204,505		10,000
E		4.35679		11,160,733		11,074,655		48,250
F		5.43396		11,041,671		11,041,667		60,000
G		7.79730		3,206,239		3,206,234		25,000
H		9.17340		6,666,667		4,959,988		45,500
Total				84,368,163		80,844,138	$	213,109

Schedule of Reserved Shares of Common Stock for Issuance

The Company had reserved shares of common stock for issuance as follows:

	September 30, 2017		December 31, 2016
Conversion of:
Series A convertible preferred stock		23,019,997		23,019,997
Series B convertible preferred stock		6,396,068		6,396,068
Series C-1 convertible preferred stock		9,240,558		9,240,558
Series C-2 convertible preferred stock		7,700,466		7,700,466
Series C-2 convertible preferred stock warrants		1,250,000		1,250,000
Series D convertible preferred stock		4,204,505		4,204,505
Series D convertible preferred stock warrants		481,246		481,246
Series E convertible preferred stock		11,074,655		11,074,655
Series E convertible preferred stock warrants		86,072		86,072
Series F convertible preferred stock		11,041,667		11,041,667
Series G convertible preferred stock		3,206,234		3,206,234
Series H convertible preferred stock		4,959,988		4,959,988
Series H convertible preferred stock warrants		408,648		—
Conversion of common stock warrants		—		375,000
Common stock options issued under stock option plan		27,326,277		22,334,508
Common stock options available for grant under stock    option plan		1,221,824		409,582
Total		111,618,205		105,780,546

Summary of Assumptions Used to Value Stock-Based Awards Granted

The assumptions used to value stock-based awards granted are as follows:

	Three Months Ended				Nine Months Ended
	September 30, 2017		October 1, 2016		September 30, 2017		October 1, 2016
Dividend rate	$	—		—		—		—
Expected term (in years)	5.3 - 6.5			—	5.3 - 6.5		5.3 - 6.5
Risk-free interest rate	1.84 - 2.03%			—	1.84% - 2.25%		1.32% - 1.50%
Expected volatility	39%  - 43%			—	39%  - 44%		44%  - 46%
Fair value of common stock	$	8.82		—	$5.70 - $8.82		$	6.60

Summary of Recognized Employee Stock-Based Compensation Expense

As a result of the Company’s Black-Scholes option-valuation fair value calculations and the Company’s use of the straight-line vesting attribution method, the Company recognized employee stock-based compensation expense as follows (in thousands):

	Three Months Ended				Nine Months Ended
	September 30, 2017		October 1, 2016		September 30, 2017		October 1, 2016
Cost of player revenue	$	25	$	30	$	99	$	88
Cost of platform revenue		18		63		58		165
Research and development		1,197		651		3,078		1,924
Sales and marketing		808		580		2,099		1,737
General and administrative		876		687		2,183		2,102
Total	$	2,924	$	2,011	$	7,517	$	6,016

Preferred Stock Warrants

Summary of Assumptions Used to Value Stock-Based Awards Granted

The assumptions used to value the preferred stock warrants using the Black-Scholes model are as follows:

	September 30, 2017		December 31, 2016
Dividends	$	—	$	—
Expected term (in years)	3.0-9.7		3.2-3.9
Risk-free interest rate	1.5%—2.3%		0.7%—1.6%
Volatility	43.5%—50.7%		46.2%—47.8%

Schedule of Convertible Preferred Stock Warrants

Outstanding preferred stock warrants were as follows:

Series	Number Outstanding September 30, 2017		Number Outstanding December 31, 2016		Issuance Date	Exercise Price		Original Term
C-2		1,250,000		1,250,000	July 13, 2011	$	0.64931	10 years
D		249,999		249,999	October 17, 2011		2.37840	10 years
D		168,180		168,180	March 12, 2012		2.37840	10 years
D		63,067		63,067	April 27, 2012		2.37840	10 years
E		86,072		86,072	April 27, 2012		3.48546	10 years
H		408,648		—	June 9, 2017		9.17340	10 years
Total		2,225,966		1,817,318