Fair Value Measurements and Marketable Securities (Tables)

6 Months Ended

Jul. 31, 2019

Fair Value Measurements and Marketable Securities

Schedule of Company's fair value hierarchy for its financial assets and liabilities that are measured at fair value on a recurring basis


	July 31, 2019								January 31, 2019
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
	(in thousands)								(in thousands)
Assets
Cash equivalents⁽¹⁾
Money market funds	$	698,945	$	—	$	—	$	698,945	$	42,132	$	—	$	—	$	42,132
Corporate debt securities		—		15,008		—		15,008		—		27,941		—		27,941
Total cash equivalents		698,945		15,008		—		713,953		42,132		27,941		—		70,073
Marketable securities
Corporate debt securities		—		79,985		—		79,985		—		91,796		—		91,796
U.S. treasury securities		14,018		—		—		14,018		11,451		—		—		11,451
Total marketable securities		14,018		79,985		—		94,003		11,451		91,796		—		103,247
Total assets	$	712,963	$	94,993	$	—	$	807,956	$	53,583	$	119,737	$	—	$	173,320
Liability
Contingent consideration related to business combinations⁽²⁾		—		—		—		—		—		—	$	474	$	474
Redeemable convertible preferred stock warrant liability ⁽³⁾		—		—		—		—		—		—		4,537		4,537
Total liabilities	$	—	$	—	$	—	$	—	$	—	$	—	$	5,011	$	5,011

(1)	Included in “Cash and cash equivalents” on the condensed consolidated balance sheets.

(2)

The contingent consideration consists of development milestone payments. The fair value of the contingent consideration was estimated by developing the risk-adjusted discounted value as well as discounted probability-weighted expected payments. That measure is based on Level 3 inputs which are significant inputs that are not observable in the market. Key assumptions at the acquisition date included (a) a discount rate range of 3%-3.02% and (b) three probability-adjusted milestone payments, each $0.2 million. As of January 31, 2019, the first milestone payment of $0.2 million had been made. During the three months ended April 30, 2019, the remaining milestones were deemed not probable of being paid and the remaining contingent consideration of $0.5 million was written off to Other expense, net.

(3)

Immediately prior to the closing of the IPO on June 14, 2019, the redeemable convertible preferred stock warrants also converted into 336,386 warrants to purchase Class B common stock on a one-to-one basis. The redeemable convertible preferred stock warrant liability was reclassified to additional paid-in capital. Within the same month, the Company received notice from the holders of 336,386 shares as to their intentions to convert the warrants into shares of common stock of the Company. Such shares were settled via net settlement method, which was elected by the holders to reduce the number of shares issued upon exercise to reflect net settlement of the exercise price, resulting in the issuance of 322,278 shares of the Company’s common stock.

Summary of changes in the redeemable convertible preferred stock warrant liability


	Three Months Ended July 31,				Six Months Ended July 31,
	2019		2018		2019		2018
	(in thousands)				(in thousands)

Balance at beginning of period	$	5,704	$	961	$	4,537	$	961
Adjustment resulting from change in fair value recognized in the condensed consolidated statements of operations		4,855		2,055		6,022		2,055
Reclassification of liability for redeemable convertible preferred stock warrants to additional paid-in capital upon initial public offering		(10,559)		—		(10,559)		—
Balance at end of period	$	—	$	3,016	$	—	$	3,016