Fair Value Measurement

6 Months Ended

Jul. 31, 2015

Fair Value Disclosures [Abstract]

Fair Value Measurement

3. Fair Value Measurement

The Company records its financial assets and liabilities at fair value. The inputs used in the valuation methodologies in measuring fair value are defined in the fair value hierarchy as follows:

Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets or liabilities.

Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data

Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities and which reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.

The Company’s financial instruments consist of Level 1 assets and Level 3 liabilities. Money market funds have been classified as Level 1 because these securities are valued based upon quoted prices in active markets. The money market funds are classified as cash equivalents.

As of January 31, 2015, the Level 3 liabilities consists of the Company’s convertible preferred stock warrant liability and acquisition-related contingent consideration. As of July 31, 2015, the Level 3 liabilities consisted of acquisition-related contingent consideration.

There were no transfers into or out of the Level 3 category during the six months ended July 31, 2015 and during the year ended January 31, 2015.

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

	Balance as of July 31, 2015
	Level 1		Level 2		Level 3		Total
Assets:
Cash	$	156	$	—	$	—	$	156
Money market fund		59,017		—		—		59,017
Total Cash and Cash Equivalents	$	59,173	$	—	$	—	$	59,173
Liabilities:
Acquisition-related contingent consideration	$	—	$	—	$	798	$	798
Convertible preferred stock warrant liability		—		—		—		—
Total liabilities	$	—	$	—	$	798	$	798

	Balance as of January 31, 2015
	Level 1		Level 2		Level 3		Total
Assets:
Cash	$	115	$	—	$	—	$	115
Money market fund		9,018		—		—		9,018
Total Cash and Cash Equivalents	$	9,133	$	—	$	—	$	9,133
Liabilities:
Acquisition-related contingent consideration	$	—	$	—	$	1,695	$	1,695
Convertible preferred stock warrant liability		—		—		1,217		1,217
Total liabilities	$	—	$	—	$	2,912	$	2,912

Changes in the Level 3 fair value category for the periods presented are as follows (in thousands):

	Convertible Preferred Stock Warrant Liability			Acquisition-Related Contingent Consideration
Balance at January 31, 2015	$	1,217		$	1,695
Payout of consideration		—			(570	)
Issuance of shares		—			(451	)
Changes in fair value		442			124
Payment of preferred warrant liability upon IPO		(584	)		—
De-recognition of preferred warrant liability to additional paid-in capital		(1,075	)		—
Balance at July 31, 2015	$	—		$	798

Level 3 instruments consisted of the Company’s preferred stock warrant liability. Prior to the Company’s IPO, outstanding warrants to purchase shares of the Company’s convertible preferred stock were classified as other liabilities. At every reporting date the warrants were remeasured and the change in the fair value was recorded as a component of other (expense) income, net, in the condensed consolidated statement of operations and liabilities on the balance sheet.

Upon the closing of the Company’s IPO, warrant to purchase 70,287 shares of Series Alpha convertible preferred stock was remeasured at the initial offering price of $13.00 per share less the exercise price of $4.70 per share. The total warrant liability of $0.6 million related to this warrant was cash settled. The aggregate fair value of the other warrants was de-recognized and reclassified from liabilities to additional paid-in capital, a component of stockholders’ equity (deficit), and the Company ceased recording any further changes.

The carrying value of the Company’s accounts receivable, inventory and other current assets and current liabilities approximates fair value due to short maturities.