Fair Value Measurement

12 Months Ended

Dec. 31, 2018

Fair Value Disclosures [Abstract]

Fair Value Measurement

3. Fair Value Measurement

Fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or aliability.

The Company classifies fair value measurements in one of the following three categories for disclosure purposes:

Level 1: Quoted prices in active markets for identical assets orliabilities.

Level 2: Inputs other than Level 1 prices for similar assets or liabilities that are directly or indirectly observable in the marketplace.

Level 3: Unobservable inputs which are supported by little or no market activity and values determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation.

The Company’s cash equivalents are classified using Level 1 inputs within the fair value hierarchy because they are valued using quoted market prices, broker or dealer quotations, or alternative pricing sources with reasonable levels of price transparency. None of the Company’s non-financial assets or liabilities are recorded at fair value on a non-recurring basis. No transfers between levels have occurred during the periods presented.

The Company estimated the fair value of redeemable convertible preferred stock warrants at the time of issuance and subsequent remeasurement using the Black-Scholes option pricing model at each reporting date, based on the following inputs: the risk-free interest rate; the expected dividend rate; the remaining contractual life of the warrants; the fair value of the underlying stock; and the expected volatility of the price of the underlying common stock. The estimates were based, in part, on subjective assumptions.

The following table summarizes the Company’s assets and liabilities that require fair value measurements on a recurring basis and their respective input levels based on the fair value hierarchy (in thousands):

			Fair Value Measurements at Reporting Date
	Total		Level 1		Level 2		Level 3
As of December 31, 2018:
Assets
Cash equivalents	$	59,357	$	59,357	$	—	$	—
As of December 31, 2017:
Assets
Cash equivalents	$	12,472	$	12,472	$	—	$	—
Liabilities
Derivative liability	$	3,028	$	—	$	—	$	3,028
Preferred stock warrant liability		1,656		—		—		1,656
Total liabilities	$	4,684	$	—	$	—	$	4,684

The following weighted-average assumptions were used in determining the fair value of the preferred stock warrant liability valued using the Black-Scholes option pricing model as of December 31, 2017:

	December 31, 2017
Expected volatility		68.0	%
Risk-free interest rate		2.2	%
Contractual term (in years)		5.9
Expected dividend yield		—

The following estimated fair values per share of the Company’s underlying redeemable convertible preferred stock were used to determine the estimated fair value of the preferred stock warrant liability:

	December 31, 2017
Series AA	$	5.75
Series B	$	3.76
Series C-1	$	3.76

The following tables present activity for the preferred stock warrant liability and the derivative liability measured at fair value using significant unobservable Level 3 inputs during the year ended December 31, 2017 and 2018 (in thousands):

	Preferred Stock
	Warrant Liability
Balance at December 31, 2016	$	880
Issuance of warrants		1,795
Changes in fair value reflected as change in fair    value of warrant liability		(1,019	)
Balance at December 31, 2017		1,656
Issuance of warrants		2,822
Exercise of warrants		(1,197	)
Changes in fair value reflected as change in fair    value of warrant liability		(11	)
Conversion to common stock warrants upon    IPO		(3,270	)
Balance at December 31, 2018	$	—

	Derivative Liability
Balance at December 31, 2016	$	—
Issuance of derivative		2,971
Changes in fair value reflected as change in    fair value of derivative liability		57
Balance at December 31, 2017		3,028
Changes in fair value reflected as change in    fair value of derivative liability		676
Extinguishment of derivative upon conversion    of convertible promissory notes		(3,704	)
Balance at December 31, 2018	$	—