Fair Value Measurements

3 Months Ended

Oct. 28, 2017

Fair Value Disclosures [Abstract]

Fair Value Measurements

3. Fair Value Measurements

We disclose and recognize the fair value of our assets and liabilities using a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. The guidance establishes three levels of the fair value hierarchy as follows:

Level 1: Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date;

Level 2: Inputs are observable, unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities; and

Level 3: Unobservable inputs that are significant to the measurement of the fair value of the assets or liabilities that are supported by little or no market data.

Our financial instruments consist of cash, accounts payable, accrued liabilities and the preferred stock warrant liability. At October 28, 2017 and July 29, 2017, the carrying values of cash, accounts payable and accrued liabilities approximated fair value due to their short-term maturities.

The following table sets forth our financial instruments that were measured at fair value on a recurring basis based on the fair value hierarchy (in thousands):

	October 28, 2017
	Level 1		Level 2		Level 3		Total
Financial Liabilities:
Preferred stock warrant liability	$	—	$	—	$	17,608	$	17,608
Total	$	—	$	—	$	17,608	$	17,608

	July 29, 2017
	Level 1		Level 2		Level 3		Total
Financial Liabilities:
Preferred stock warrant liability	$	—	$	—	$	26,679	$	26,679
Total	$	—	$	—	$	26,679	$	26,679

There were no transfers of financial assets or liabilities into or out of Level 1, Level 2 or Level 3 for the three months ended October 28, 2017 and October 29, 2016. The key assumptions used in the Black-Scholes option-pricing model for the valuation of the preferred stock warrant liability upon remeasurement were as follows:

	Three Months Ended
	October 28, 2017			October 29, 2016
Expected term (in years)		2.0			5.3
Fair value of underlying shares	$	16.53		$	8.89
Volatility		39.2	%		40.2	%
Risk free interest rate		1.6	%		1.4	%
Dividend yield		—	%		—	%

Generally,increasesor decreasesin the fairvalue of the underlyingconvertiblepreferredstock would resultin a directionallysimilarimpactin the fairvalue measurementof the associatedwarrantliability.

The following table sets forth a summary of the changes in the fair value of the preferred stock warrant liability (in thousands):

	Three Months Ended
	October 28, 2017
Balance at July 29, 2017	$	26,679
Change in fair value		(9,071	)
Ending Balance at October 28, 2017	$	17,608