Annual report pursuant to Section 13 and 15(d)

Fair Value Measurements

v3.10.0.1
Fair Value Measurements
12 Months Ended
Dec. 31, 2018
Fair Value Disclosures [Abstract]  
Fair Value Measurements

Note 4. Fair Value Measurements

Prior to the IPO, the Company’s convertible preferred stock warrant liability was measured on a recurring basis and was classified within Level III of the fair value hierarchy because some of the inputs used in its measurement were neither directly or indirectly observable. The valuation methodology and underlying assumptions in the fair value determination are discussed in Note 3, Basis of Presentation and Summary of Significant Accounting Policies, and Note 14, Convertible Preferred Stock Warrants and Common Stock Warrants.  

Immediately prior to the IPO, the convertible preferred stock warrant liability was remeasured to fair value, resulting in a loss of $3.7 million which was recorded in other expense, net. Upon the closing of the IPO, the entire balance of $5.7 million in convertible preferred stock warrant liability was reclassified to additional paid-in capital.

There were no transfers into or out of Level III during the year ended December 31, 2018. The changes in the fair value of the convertible preferred stock warrant liability and changes in the fair value of contingent consideration are summarized below (in thousands):

 

 

 

Fair Value

Measurements at

Reporting Date

Using Level III Inputs

 

Fair value at December 31, 2015

 

$

1,351

 

Change in fair value recorded in other expense,

   net

 

 

524

 

Fair value at December 31, 2016

 

$

1,875

 

Issuance of convertible preferred stock warrants

 

 

111

 

Change in fair value recorded in other expense,

   net

 

 

3,725

 

Reclassification of unexercised warrant into

   additional paid-in capital upon the IPO

 

 

(5,711

)

Fair value at December 31, 2017

 

$

 

Contingent consideration

 

 

750

 

Fair value at December 31, 2018

 

$

750

 

 

As of the acquisition date of HunchLab (see Note 7, Business Acquisitions) and at December 31, 2018, the Company estimated, based on management’s estimates of (i) the probability of achieving the relevant revenue targets and (ii) the timing of achieving such targets, that the fair value of the contingent consideration approximates the maximum amount payable.