Fair Value Measurement

9 Months Ended

Sep. 30, 2019

4. Fair Value Measurement

Assets and liabilities measured at fair value on a recurring basis were as follows (in thousands):


	September 30, 2019
	Total		Level 1		Level 2		Level 3
Liabilities:
Convertible preferred stock warrant liability	$	17,008	$	—	$	—	$	17,008
Total	$	17,008	$	—	$	—	$	17,008


	December 31, 2018
	Total		Level 1		Level 2		Level 3
Liabilities:
Convertible preferred stock warrant liability	$	4,589	$	—	$	—	$	4,589
Total	$	4,589	$	—	$	—	$	4,589

The estimated fair values of the convertible preferred stock warrant liabilities (see Note 7) were determined using Level 3, or significant unobservable inputs. Changes to the estimated fair value of the warrants are recorded in other income or other expense in the statements of operations and comprehensive income (loss). The following table provides the changes in the estimated fair value of the convertible preferred stock warrants (in thousands):


	Convertible
	Preferred Stock
	Warrants
Balance as of December 31, 2018	$	4,589
Changes in estimate fair value of warrants		12,419
Balance at September 30, 2019	$	17,008

During the nine months ended September 30, 2019 and the year ended December 31, 2018, there were no transfers between Level 1, Level 2, or Level 3 assets or liabilities reported at fair value on a recurring basis and the valuation techniques used to value the Level 3 liabilities did not change.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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