Fair Value of Financial Assets and Liabilities

9 Months Ended

Sep. 30, 2018

Fair Value of Financial Assets and Liabilities

Fair Value of Financial Assets and Liabilities

3. Fair Value of Financial Assets and Liabilities

The following tables summarize the assets and liabilities measured at fair value on a recurring basis at September 30, 2018 and December 31, 2017 (in thousands):

	Fair Value Measurements at September 30, 2018
	Total		Level 1		Level 2		Level 3
Assets:
Money market funds, included in cash and cash equivalents	$	103,137	$	103,137	$		$
Total assets	$	103,137	$	103,137	$	—	$	—

	Fair Value Measurements at December 31, 2017
	Total		Level 1		Level 2		Level 3
Assets:
Money market funds, included in cash and cash equivalents	$	55,291	$	55,291	$	—	$	—
Marketable securities:
U.S. Treasury obligations		1,498		1,498		—		—
Total assets	$	56,789	$	56,789	$	—	$	—
Liabilities:
Warrant to purchase redeemable security	$	37	$	—	$	—	$	37
Total liabilities	$	37	$	—	$	—	$	37

There were no transfers between fair value measurements levels during the three or nine months ended September 30, 2018 or 2017.

Cash and cash equivalents and marketable securities include investments in money market funds that invest in U.S. government securities that are valued using quoted market prices. Accordingly, money market funds and government funds are categorized as Level 1 as of September 30, 2018 and December 31, 2017.

The carrying amounts reflected in the balance sheets for accounts receivable, prepaid expenses and other current assets, accounts payable, and accrued expenses approximate their fair values at September 30, 2018 and December 31, 2017, due to their short-term nature. The Company believes the terms of the loan payable reflect current market conditions for an instrument with similar terms and maturity, therefore the carrying value of the Company’s debt approximates its fair value based on Level 3 of the fair value hierarchy.

Upon the completion of the IPO, the Company’s outstanding warrant to purchase preferred stock converted into a warrant to purchase common stock and the Company reclassified the fair value of the warrant to additional paid-in capital. The following table presents activity in the preferred stock warrant during the nine months ended September 30, 2018 (in thousands):

Balance at December 31, 2017	$	(37)
Change in fair value of warrant included in other income (expense), net		(56)
Reclassification to additional paid-in capital upon consummation of the IPO		93
Balance at September 30, 2018	$	—

The change in fair value of the warrant included in other income (expense), net for the three and nine months ended September 30, 2018 was $0 and $(0.1) million, respectively.