v3.5.0.2
Fair Value Measurements
 9 Months Ended
Sep. 30, 2016
Fair Value Measurements  
Fair Value Measurements

 

Note 4—Fair Value Measurements

 

The financial instruments that are measured at fair value on a recurring basis were (in thousands):

 

 

 

 

 

Fair Value Measurements at Reporting Date Using

 

 

 

 

 

Quoted Prices in

 

Significant Other

 

Significant Other

 

 

 

As of

 

Active Markets for

 

Observable

 

Unobservable

 

 

 

December 31,

 

Identical Assets

 

Inputs

 

Inputs

 

 

 

2015

 

(Level 1)

 

(Level 2)

 

(Level 3)

 

Convertible preferred stock warrant liabilities

 

$
6,927 

 

$

—

 

$

—

 

$
6,927 

 

 

The changes in the fair value of preferred stock warrants are summarized below (in thousands):

 

 

 

Three Months

 

Nine Months

 

 

 

Ended September 30,

 

Ended September 30,

 

 

 

2016

 

2015

 

2016

 

2015

 

Beginning balance

 

$
7,943

 

$
1,455

 

$
6,927

 

$
966

 

Change in value of preferred stock warrants recorded in other expense, net

 
4,653

 
673

 
9,458

 
1,162

 

Reclassification to convertible preferred stock upon net exercise of Series Seed warrant

 

—

 

—

 
(3,789

)

—

 

Conversion of preferred stock warrants to common stock warrants upon the closing of the Company’s IPO on September 26, 2016

 
(12,596

)

—

 
(12,596

)

—

 

 

 

 

 

 

 

 

 

 

 

Ending balance

 

$

—

 

$
2,128

 

$

—

 

$
2,128

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In connection with the Company’s IPO during September 2016, the outstanding warrants exercisable for 1,382,505 shares of convertible preferred stock were automatically converted into warrants exercisable for 460,834 shares of Class B common stock and net exercised resulting in the issuance of 448,545 shares of Class B common stock based on the IPO price of $18.00 per share and taking into account the 1-for-3 reverse stock split. The aggregate fair value of these warrants upon the closing of the IPO was $12.6 million, which was reclassified from liabilities to additional paid-in capital.

 

The Company determined the fair value of the preferred stock warrants utilizing the Black-Scholes model with the following assumptions:

 

 

 

As of September 26, 2016

 

As of September 30, 2015

 

 

 

Series Seed

 

Series A3

 

Series Seed

 

Series A3

 

Contractual term (years)

 
4.9 

 
6.5 

 
5.9 

 
7.5 

 

Expected volatility

 
59.1 

%
59.1 

%
59.2 

%
62.5 

%

Risk-free interest rate

 
1.12 

%
1.34 

%
1.56 

%
1.80 

%

Estimated dividend yield

 

—

%

—

%

—

%

—

%