Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2014

Fair Value of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis

The tables below presents the fair value of the Company’s financial assets and liabilities, by level, within the fair value hierarchy that are measured at fair value on a recurring basis (in thousands):


	June 30, 2014
	Level 1		Level 2		Level 3		Total
Assets
Money market funds	$	7,847	$	—	$	—	$	7,847

Liabilities
Contingent consideration liability	$	—	$	—	$	2,313	$	2,313
Convertible preferred stock warrants		—		—		808		808
Derivative liability related to subordinated convertible note		—		—		120		120

Total liabilities	$	—	$	—	$	3,241	$	3,241


	December 31, 2013
	Level 1		Level 2		Level 3		Total
Assets
Money market funds	$	5,204	$	—	$	—	$	5,204

Liabilities
Convertible preferred stock warrants	$	—	$	—	$	525	$	525

Estimated Fair Value of Convertible Preferred Stock Warrant Liability Determined Using Black-Scholes Option Pricing Model

The estimated fair value of the convertible preferred stock warrant liability was determined using the Black-Scholes option pricing model using the following assumptions:


	As of June 30, 2014		As of December 31, 2013
Estimated fair value of common stock	$	11.44	$	12.40
Risk-free interest rate		0.9% - 1.6%		0.8% - 2.1%
Volatility		41% - 43%		40% - 45%
Estimated term equal to the remaining contractual term		2.8 - 5.1 years		3.3 - 5.6 years
Expected dividend yield		—		—

Summary of Changes in Level 3 Financial Instruments

The following table presents the changes in the Company’s Level 3 financial instruments that are measured at fair value on a recurring basis (in thousands):


	Level 3
	Contingent Consideration Liability		Convertible Preferred Stock Warrants		Derivative Liability Related to Subordinated Convertible Note			Total
Balance as of December 31, 2013	$	—	$	525	$	—		$	525
Issuance of financial instruments		2,313		—		239			2,552
Change in fair value		—		283		(119	)		164

Balance as of June 30, 2014	$	2,313	$	808	$	120		$	3,241

- Definition

Tabular disclosure of the fair value measurement of liabilities using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets), and gains or losses recognized in other comprehensive income (loss) and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs) by class of liability.

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