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Fair Value Measurements
 12 Months Ended
Dec. 31, 2017
Fair Value Disclosures [Abstract]  
Fair Value Measurements

Note 6—Fair Value Measurements

At December 31, 2017, cash equivalents of $5.0 million consisted of money market funds, which were classified as Level 1 of the fair value hierarchy and are valued using quoted market prices in active markets. The Company had no cash equivalents at December 31, 2016. The Company had no other material financial instruments that were measured at fair value at December 31, 2016 and 2017.

 

The Company’s preferred stock warrants are recorded at fair value and were determined to be Level 3 fair value items. The changes in the fair value of preferred stock warrants are summarized below (in thousands):

 

 

 

Year Ended December 31,

 

 

 

2015

 

 

2016

 

Beginning balance

 

$

966

 

 

$

6,927

 

Change in value of preferred stock warrants recorded in other

   expense, net

 

 

5,961

 

 

 

9,458

 

Reclassification to convertible preferred stock upon net

   exercise of Series Seed warrant in February 2016

 

 

—

 

 

 

(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

)

Ending balance

 

$

6,927

 

 

$

—

 

 

In connection with the IPO, 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:

 

 

 

Series Seed

 

 

Series A-3

 

 

 

As of

 

 

As of

 

 

 

Dec 31, 2015

 

 

Sept 26, 2016

 

 

Dec 31, 2015

 

 

Sept 26, 2016

 

Contractual term (years)

 

 

5.7

 

 

 

4.9

 

 

 

7.2

 

 

 

6.5

 

Expected volatility

 

 

60.3

%

 

 

59.1

%

 

 

61.3

%

 

 

59.1

%

Risk-free interest rate

 

 

1.84

%

 

 

1.12

%

 

 

2.09

%

 

 

1.34

%

Estimated dividend yield

 

 

—

%

 

 

—

%

 

 

—

%

 

 

—

%