Invuity (IVTY) 10-Q 26 Jul 17 2017 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2017	Jul. 24, 2017
Document And Entity Information
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2017
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q2
Entity Registrant Name	Invuity, Inc.
Entity Central Index Key	1,393,020
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		17,050,067

Condensed Balance Sheets

Condensed Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Current assets:
Cash and cash equivalents	$ 16,795	$ 28,300
Short-term investments	9,475	10,737
Restricted cash - current	181	181
Accounts receivable, net	5,602	5,782
Inventory	5,560	5,052
Prepaid expenses and other current assets	702	1,088
Total current assets	38,315	51,140
Restricted Cash	909	909
Property and equipment, net	7,821	8,286
Other long-term assets	250
Total assets	47,295	60,335
Current liabilities:
Accounts payable	2,891	2,192
Accrued and other current liabilities	6,056	6,351
Short-term debt	3,518	1,362
Total current liabilities	12,465	9,905
Deferred rent	2,650	2,721
Long-term debt	19,364	13,261
Total liabilities	34,479	25,887
Commitments and contingencies (Note 8)
Stockholders' equity :
Preferred stock, $0.001 par value - 10,000,000 shares authorized at June 30, 2017 and December 31, 2016, no shares issued and outstanding at June 30, 2017 and December 31, 2016
Common stock, $0.001 par value - 100,000,000 shares authorized at June 30, 2017 and December 31, 2016 17,041,158 and 16,950,940 shares issued and outstanding at June 30, 2017 and December 31, 2016	17	17
Additional paid-in capital	182,619	180,647
Accumulated deficit	(169,820)	(146,216)
Total stockholders' equity	12,816	34,448
Total liabilities and stockholders' equity	$ 47,295	$ 60,335

Condensed Balance Sheets (Paren

Condensed Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2017	Dec. 31, 2016
Condensed Balance Sheets
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	17,041,158	16,950,940
Common stock, shares outstanding	17,041,158	16,950,940

Condensed Statements of Operati

Condensed Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Condensed Statements of Operations and Comprehensive Loss
Revenue	$ 9,768	$ 8,223	$ 18,791	$ 14,627
Cost of goods sold	3,015	2,091	5,114	4,196
Gross profit	6,753	6,132	13,677	10,431
Operating expenses:
Research and development	2,410	2,340	4,839	4,941
Selling, general and administrative	14,204	13,429	29,057	26,750
Total operating expenses	16,614	15,769	33,896	31,691
Loss from operations	(9,861)	(9,637)	(20,219)	(21,260)
Interest expense	(527)	(505)	(1,014)	(1,009)
Interest income	53		110
Other income (expense), net	(52)	13	(178)	30
Loss on extinguishment of debt			(2,303)
Net loss and comprehensive loss	$ (10,387)	$ (10,129)	$ (23,604)	$ (22,239)
Net loss per common share, basic and diluted	$ (0.61)	$ (0.76)	$ (1.39)	$ (1.66)
Weighted-average shares used to compute net loss per common share, basic and diluted	16,986,074	13,404,007	16,972,280	13,399,775

Condensed Statements of Cash Fl

Condensed Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Cash flows from operating activities
Net loss	$ (23,604)	$ (22,239)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	1,009	972
Stock-based compensation	1,421	1,147
Non-cash interest expense	38	71
Payment of original issue discount upon extinguishment of debt	(782)
Non-cash portion of extinguishment loss	352
Accretion of premium on marketable securities	4
Recovery for doubtful accounts	(82)	(18)
Changes in operating assets and liabilities:
Accounts receivable	262	(877)
Inventory	(508)	(268)
Prepaid expenses and other assets	386	100
Accounts payable	716	(129)
Accrued and other current liabilities	(441)	985
Deferred rent	(71)	(39)
Net cash used in operating activities	(21,300)	(20,295)
Cash flows from investing activities:
Purchases of property and equipment	(558)	(496)
Purchases of marketable securities	(9,462)
Purchase of distribution license	(250)
Maturities of marketable securities	10,742
Net cash provided by (used in) investing activities	472	(496)
Cash flows from financing activities:
Proceeds from common stock offering, net of offering costs	57	(266)
Proceeds from revolving credit facility	3,518
Proceeds from issuance of long-term debt, net of issuance costs	19,701
Payments of long-term debt - related party	(14,193)
Proceeds from issuance of common stock upon exercise of stock options	240	217
Net cash provided by financing activities	9,323	(49)
Net decrease in cash and cash equivalents	(11,505)	(20,840)
Cash and cash equivalents, beginning of period	28,300	46,296
Cash and cash equivalents, end of period	16,795	25,456
Supplemental disclosures of cash flow information:
Interest paid to related party	980	938
Non-cash investing and financing activities:
Purchases of property and equipment in accounts payable and accrued liabilities at period end	$ 16	124
Capitalized Offering Costs		$ 266

Organization and Description of

Organization and Description of Business	6 Months Ended
	Jun. 30, 2017
Organization and Description of Business
Organization and Description of Business	NOTES TO CONDENSED FINANCIAL STATEMENTS (Unaudited) 1. Organization and Description of Business Invuity, Inc. (the “Company”) was incorporated in California on November 29, 2004 and reincorporated in Delaware in May 2015. The Company is a commercial-stage medical technology company that utilizes its proprietary Intelligent Photonics technology to develop single-use and reusable illuminated surgical devices, which provide surgeons with illumination and direct visualization of surgical cavities during minimal access procedures. The Company’s manufacturing, development and management facilities are located in San Francisco, California. Liquidity The Company has incurred net losses from operations since inception, including $23.6 million in the six months ended June 30, 2017, and has an accumulated deficit of $169.8 million as of June 30, 2017. The Company has $26.3 million in cash and cash equivalents and short-term investments, and $23.5 million in debt outstanding at June 30, 2017. The Company expects to incur additional losses and negative cash flows for the foreseeable future. Management believes that its cash,cash equivalents and short-term investments at June 30, 2017, and additional funding available under the revolving credit facility with MidCap Financial Trust, and their affiliates (“MidCap”), will provide sufficient funds to enable the Company to meet its operating plan through at least the next twelve months. In addition, on July 1, 2016, the Company filed a prospectus supplement for an at-the-market offering (“ATM”) program of up to $25.0 million. However, if the Company’s anticipated operating results are not achieved in future periods, additional debt or equity financing may need to be raised, or planned expenditures may need to be reduced. Basis of Presentation The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and in accordance with the instructions to Form 10‑Q and Rule 10‑01 of Regulation S‑X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The unaudited interim condensed financial statements have been prepared on the same basis as the annual financial statements. In the opinion of management, the accompanying unaudited condensed financial statements reflect all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair statement of the financial position, results of operations and cash flows for the periods presented. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Annual Report on Form 10‑K for the year ended December 31, 2016 and filed with the U.S. Securities and Exchange Commission (the “SEC”). The accompanying year-end balance sheet was derived from the audited financial statements included in the Company’s Annual Report on Form 10‑K for the year ended December 31, 2016. The results for the three months and six months ended June 30, 2017 are not necessarily indicative of the results expected for the full fiscal year or any other periods.

Summary of Significant Accounti

Summary of Significant Accounting Policies	6 Months Ended
	Jun. 30, 2017
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies	2. Summary of Significant Accounting Policies Use of Estimates The Company’s financial statements have been prepared in conformity with U.S. GAAP. The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, management evaluates its estimates, including those related to revenue recognition, fair value of assets and liabilities, inventory, income taxes and stock-based compensation. Actual results could differ from those estimates and assumptions. Cash Equivalents Cash equivalents consist of short-term, highly liquid investments with original maturities of three months or less from the date of purchase. Cash equivalents consist primarily of amounts invested in money market funds. Restricted Cash Restricted cash represents a certificate of deposit held at a financial institution as collateral for a letter of credit related to the Company’s facility lease in San Francisco, California. Fair Value of Financial Instruments The carrying amounts of the Company’s financial instruments, including cash equivalents, short-term investments, accounts receivable and accounts payable, approximate fair value due to their relatively short maturities. As of June 30, 2017 and December 31, 2016, based on Level 2 inputs and the borrowing rates available to the Company for loans with similar terms and consideration of the Company’s credit risk, the carrying value of the Company’s long-term debt approximates its fair value. Customer Concentration Significant customers are those which represent 10% or more of the Company’s total revenue for each period presented in the condensed statements of operations and comprehensive loss or 10% or more of the Company’s net accounts receivable balance at each respective balance sheet date. As of and for the year ended December 31, 2016 and as of and for the three and six months ended June 30, 2017 and 2016, the Company had no customers that represented 10% or more of its revenue or accounts receivable balances. Revenue Recognition The Company’s revenue is generated from the sale of its products to hospitals and medical centers through direct sales representatives and independent sales agents. The Company recognizes revenue when all of the following criteria are met:  persuasive evidence of an arrangement exists;  the sales price is fixed or determinable;  collection of the relevant receivable is reasonably assured at the time of sale; and  delivery has occurred. The Company recognizes revenue when title to the goods and risk of loss transfers to the customer, which is upon shipment of the product under the Company’s standard terms and conditions. Shipping and handling costs billed to the customer are recorded in revenue. Segment Reporting The Company manages its operations as a single operating segment for the purposes of assessing performance and making operating decisions. All of the Company’s assets are maintained in the United States. The Company derives the majority of its revenue from sales to customers in the United States, based upon the billing address of the customer. Net loss per Common Share Basic net loss per common share is calculated by dividing the net loss by the weighted-average number of shares of common stock outstanding during the period, without consideration of potentially dilutive securities. Diluted net loss per common share is the same as basic net loss per common share since the effect of potentially dilutive securities are anti-dilutive. Shares subject to repurchase are excluded from the weighted-average shares. Recent Accounting Pronouncements · In May 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2014‑09, Revenue from Contracts with Customers (Topic 606) , which supersedes the revenue recognition requirements in ASC 605, Revenue Recognition . This ASU is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The ASU also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. In August 2015, FASB issued ASU No. 2015‑14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date , which effectively delayed the adoption date by one year, to an effective date for public entities for annual and interim periods beginning after December 15, 2017. · In March 2016, the FASB issued ASU No. 2016‑08, Revenue from Contracts with Customers (Topic 606): Principal Versus Agent Considerations (Reporting Revenue Gross Versus Net), to clarify certain aspects of the principal-versus-agent guidance in its new revenue recognition standard. · In April 2016 the FASB issued ASU No. 2016‑10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing to clarify on how to identify the performance obligations and the licensing implementation guidance in its new revenue recognition standard. · In May 2016, the FASB issued ASU No. 2016‑12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients, to address certain issues identified by the Transition Resource Group, (the “TRG”) in the guidance on assessing collectability, presentation of sales tax, noncash consideration, and completed contracts and contracts modifications at transition. The Company is in the process of evaluating the impact of the new revenue guidance on its financial statements. · In July 2015, the FASB issued ASU No. 2015‑11, Inventory (Topic 330): Simplifying the Measurement of Inventory , which permits companies to measure inventory at the lower of cost and realizable value. ASU 2015‑11 applies to all business entities and is effective for public business entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2016. The adoption of this standard in the first quarter of 2017 did not have a material impact on the Company’s financial statements. · In January 2016, the FASB issued ASU No. 2016‑01, Recognition and Measurement of Financial Assets and Financial Liabilities (Topic 825) , which addresses certain aspects of recognition, measurement, presentation and disclosure of financial instruments. ASU No. 2016‑01 is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2016. The adoption of this standard in the first quarter of 2017 did not have a material impact on the Company’s financial statements. · In February 2016, the FASB issued ASU No. 2016‑02— Leases (“ASC 842”), which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e. lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. ASC 842 supersedes the previous leases standard, ASC 840 Leases . The standard is effective on January 1, 2019, with early adoption permitted. The Company is in the process of evaluating the impact of this new guidance on its financial statements. · In March 2016 the FASB issued ASU No. 2016‑09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting . This update simplifies the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. ASU No. 2016‑09 is effective for public entities for annual periods beginning after December 15, 2016. As a result of adopting ASU No. 2016‑09, the Company has made an accounting policy election to account for forfeitures as they occur. This change has been applied on a modified retrospective basis, with no material impacts on the Company’s financial statements. The adoption of ASU No. 2016‑09 also requires excess tax benefits and tax deficiencies be recorded in the income statement as opposed to additional paid‑in capital when the awards vest or are settled, and has been applied on a prospective basis with no impact on the financial statements as of and for the three and six months ended June 30, 2017. As a result of the adoption, the Company's increased its total NOLs by $1.0 million on January 1, 2017 related to deferred tax assets that arose directly from tax deductions related to equity compensation greater than compensation recognized for financial reporting purposes. This amount is fully offset by the valuation allowance. The adoption of ASU No. 2016‑09 related to the accounting for minimum statutory withholding tax requirements and cash paid by an employer when directly withholding shares for tax-withholding purposes had no impact on the Company's current consolidated financial statements or on any prior period financial statements presented. · In June 2016, the FASB issued ASU No. 2016‑13, Measurement of Credit Losses on Financial Statements (Topic 326) . This update provides financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. The update replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. ASU No. 2016‑13 is effective for public entities for annual periods beginning after December 15, 2019. The Company is in the process of evaluating the impact of this new guidance on its financial statements. · In August 2016, the FASB issued ASU No. 2016‑15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (a consensus of the FASB Emerging Issues Task Force) . The new guidance is intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. This update addresses the following eight specific cash flow issues: debt prepayment or debt extinguishment costs; settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing; contingent consideration payments made after a business combination; proceeds from the settlement of insurance claims; proceeds from the settlement of corporate-owned life insurance policies (“COLIs”) (including bank-owned life insurance policies (“BOLIs”); distributions received from equity method investees; beneficial “interests in securitization transactions; and separately identifiable cash flows and application of the predominance principle. ASU No. 2016‑15 is effective for public entities for annual periods beginning after December 15, 2017. The Company is in the process of evaluating the impact of this new guidance on its financial statements. · In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. The amendments in this Update require that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company is in the process of evaluating the impact of this new guidance on its financial statements.

Fair Value Measurements

Fair Value Measurements	6 Months Ended
	Jun. 30, 2017
Fair Value Measurements
Fair Value Measurements	3. Fair Value Measurements The Company discloses and recognizes the fair value of its assets and liabilities using a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The hierarchy gives the highest priority to valuations based upon unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to valuations based upon unobservable inputs that are significant to the valuation (Level 3 measurements). The guidance establishes three levels of the fair value hierarchy as follows: Level 1 —Inputs are unadjusted quoted prices in active markets for identical assets or liabilities at the measurement date. Level 2 —Inputs (other than quoted market prices included in Level 1) are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life. Level 3 —Inputs 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 and 2 assets. Level 1 assets consist primarily of highly liquid money market funds that are included in cash, cash equivalents, and restricted cash. Commercial paper and corporate debt securities are classified in Level 2 of the fair value hierarchy because these valuation inputs are observable or market-corroborated. The following table sets forth the fair value of the Company’s financial assets and liabilities measured at fair value on a recurring basis based on the three-tier fair value hierarchy (in thousands): June 30, 2017 Level 1 Level 2 Level 3 Total Assets Money market funds $ 10,463 $ — $ — $ 10,463 Commercial paper — 11,272 — 11,272 Corporate debt securities — 753 — 753 Agency bonds — 2,497 — 2,497 $ 10,463 $ 14,522 $ — $ 24,985 December 31, 2016 Level 1 Level 2 Level 3 Total Assets Money market funds $ 18,755 $ — $ — $ 18,755 Commercial paper — 9,582 — 9,582 Corporate debt securities — 9,533 — 9,533 $ 18,755 $ 19,115 $ — $ 37,870 As of June 30, 2017 and December 31, 2016, the carrying value of the Company’s short term investments approximates their fair value.

Balance Sheet Components

Balance Sheet Components	6 Months Ended
	Jun. 30, 2017
Balance Sheet Components
Balance Sheet Components	4. Balance sheet components Inventory Inventory consisted of the following (in thousands): June 30, December 31, 2017 2016 Raw materials $ 889 $ 699 Work-in-process 1,129 1,144 Finished goods 3,542 3,209 Total inventory $ 5,560 $ 5,052 Prepaid Expenses and Other Assets Prepaid expenses and other assets consisted for the following (in thousands): June 30, December 31, 2017 2016 Prepaid expenses $ 661 $ 1,004 Other 41 84 Total prepaid expenses and other current assets $ 702 $ 1,088 Property and Equipment, Net Property and equipment, net, consisted of the following (in thousands): June 30, December 31, 2017 2016 Computer equipment and software $ 1,468 $ 1,377 Laboratory and manufacturing equipment 2,801 2,422 Furniture and fixtures 1,516 1,442 Leasehold improvements 7,153 7,153 Total property and equipment, gross 12,938 12,394 Less: accumulated depreciation and amortization (5,117) (4,108) Total property and equipment, net $ 7,821 $ 8,286 Depreciation and amortization expense was $0.5 million for each of the three months ended June 30, 2017 and 2016, and $1.0 million for each of the six months ended June 30, 2017 and 2016. Accrued and Other Current Liabilities Accrued and other current liabilities consisted of the following (in thousands): June 30, December 31, 2017 2016 Accrued payroll-related expenses $ 4,248 $ 5,301 Accrued professional fees 1,026 246 Deferred rent 261 261 Other 521 543 Total accrued and other current liabilities $ 6,056 $ 6,351

Debt

Debt	6 Months Ended
	Jun. 30, 2017
Debt
Debt	5. Debt On March 10, 2017, the Company entered into a credit and security agreement with MidCap, as agent, for up to $30.0 million in term loans. Under the terms of the agreement, the Company borrowed the first term loan of $20.0 million (“Tranche 1”) at closing and will be eligible for an additional term loan of $10.0 million (“Tranche 2”) which can be drawn down prior to December 31, 2018, subject to the Company meeting a certain revenue target prior to that date, which the Company has not met, and does not expect to meet in the next twelve months. The term loans accrue interest at a floating rate equal to 6.50% per annum, plus the greater of (i) 1.5% or (ii) one month Libor. Interest shall accrue on the date of the commencement of funding and is payable in arrears on the first day of each month. Principal is payable in 36 equal monthly installments beginning April 1, 2019 until paid in full on March 1, 2022. The Company used $17.2 million of the $20.0 million Tranche 1 term loan to pay off in full the outstanding $15.0 million loan with Health Care Royalty Partners including a $1.8 million prepayment fee and $0.4 million in interest. The Company also entered into a separate credit and security agreement with MidCap that provides for a revolving credit facility of up to $10.0 million based on the eligible accounts receivable and inventory balances. The Company may increase the total commitments under the revolving credit facility by up to an additional $10.0 million, subject to the company meeting a certain revenue target prior to that date. Loans under the revolving credit facility accrue interest at a floating rate equal to 3.25% per annum, plus the greater of (i) 1.5% or (ii) one month LIBOR. Interest is payable in arrears on the first day of each month subsequent to the draw down date. The facility terminates in full on March 1, 2022 unless terminated earlier. As of June 30, 2017, the Company had drawn down $3.5 million under the revolving credit facility. This revolving credit facility replaced the Company’s $7.5 million accounts receivable credit facility that existed with Silicon Valley Bank (“SVB”), which the Company terminated in March 2017 and paid a termination fee of $150,000. The term loan facility and the revolving credit facility are secured by substantially all of the Company’s assets, including intellectual property. In addition, under the terms of the agreement, the Company is required to meet certain covenants which if the Company is unable to meet, or if the Company does not make its payments, the Company may be found in default and all obligations may be accelerated and become immediately due and payable upon the sole election of the lenders. The Company must also comply with a financial covenant relating to certain quarterly minimum Net Revenue (as defined in the credit agreements) requirements on a trailing twelve month basis. As of June 30, 2017, the Company was in compliance with all required covenants. In connection with the term loan facility, the Company agreed to issue to each lender warrants to purchase shares of the Company’s common stock upon the drawdown of each tranche in an aggregate amount equal to 2.0% of the amount drawn, divided by the exercise price per share for that tranche. In connection with the Tranche 1 term loan, the Company issued warrants to purchase an aggregate of 50,618 shares of the Company’s common stock, at an exercise price equal to $7.90 per share. If the Company borrows the Tranche 2 term loan, it must issue additional warrants to the Tranche 2 lenders in accordance with the formula used to calculate the number of shares subject to the Tranche 1 warrants. These warrants, which were recorded within stockholders’ equity, were fair valued at $279,000 upon issuance using a Black-Scholes valuation model. The assumptions used in the Black-Scholes model consisted of a 10 year contractual term, interest free rate of 2.58%, dividend yield of 0.0% and volatility of 60.0%. The fair value was recorded as a discount to the initial $20.0 million term loan and will be amortized as interest expense over the term of the agreement, which is approximately five years.

Stock Option Plans

Stock Option Plans	6 Months Ended
	Jun. 30, 2017
Stock Option Plans
Stock Option Plans	6. Stock Option Plans In April 2015, the Company’s board of directors and stockholders approved the 2015 Equity Incentive plan (the “2015 Plan”), effective June 11, 2015, covering incentive stock options, nonstatutory stock options and restricted stock awards that may be granted to employees, directors and consultants. During the three months ended June 30, 2017 and 2016, the Company granted 125,525 and 72,200 options, respectively, to employees, with a weighted average grant date fair value of $7.32 per share and $7.02 per share respectively. During the six months ended June 30, 2017 and 2016, the Company granted 734,705 and 735,550 options, respectively, to employees, with a weighted average grant date fair value of $6.65 per share and $7.37 per share, respectively. The options granted in 2017 included 268,000 options granted to certain executive officers with a market-based condition. The 268,000 options were valued at an aggregate value of $0.7 million using the Monte Carlo Simulation model, which will be amortized over three years from the date of grant. The aggregate intrinsic value of options exercised was $0.3 million for both of the three and six months ended June 30, 2017, and $0.2 million and $0.3 million for the three and six months ended June 30, 2016, respectively. The weighted-average remaining contractual life of options outstanding was 7.6 and 7.5 years at June 30, 2017 and December 31, 2016, respectively. For vested and expected to vest options, the weighted-average remaining contractual life as of June 30, 2017 and December 31, 2016, was 7.6 and 7.5 years, respectively. For the three months ended June 30, 2017, the Company granted approximately 72,000 restricted stock units (“RSUs”) to non-employee board members (“Outside Directors”) with a grant date fair value, in the aggregate, of $0.5 million. Under the Company’s Restricted Stock Unit Deferral Program for Outside Directors, Outside Directors may elect to defer the receipt of shares upon vesting of RSUs granted under the 2015 Plan. A deferral election will apply to the entirety of the particular RSU award and no partial elections may be made. A deferral election is irrevocable once made. In the event an Outside Director makes a deferral election, the shares of common stock underlying the deferred RSUs will not be distributed to such Outside Director until the earlier of his or her separation of service as a board member or upon a “Change in Control” (as defined in the 2015 Plan) of the Company. Three out of four of the Company’s Outside Directors elected to defer receipt of the RSUs granted to them on the date of the Company’s 2017 Annual Meeting (the “2017 Annual Meeting”) under the 2015 Plan. For the six months ended June 30, 2017, the total RSUs granted were 153,000 with a fair value of $1.0 million, including the RSUs granted to Outside Directors described above and 71,500 RSUs granted to executive officers with a fair value of $0.5 million. The RSUs granted to executive officers have a four-year term and vest 25% annually. The RSUs granted to Outside Directors on the date of the 2017 Annual Meeting will vest 100% on the earlier of the 2018 Annual Meeting of Stockholders or the one year anniversary of the 2017 Annual Meeting, with the exception of any RSUs that an Outside Director elected to defer, which RSUs generally will vest 100% on the first anniversary of the date that the Outside Director elected to defer such RSUs. During the three months ended June 30, 2016, the Company granted 64,000 RSUs to board members with a grant date fair value of $0.3 million. For the six months ended June 30, 2016, the Company granted a total of 207,000 RSUs with a grant date fair value of $1.4 million. The RSU awards granted to executive officers have a five year term and vest 20% annually while the RSU awards granted to board members vested 100% on June 19, 2016. Stock‑Based Compensation The fair value of stock options granted to employees is amortized on a straight-line basis over the requisite service period of the award. Stock‑based compensation related to stock options granted to non-employees is recognized as the stock options are earned. The Company recognized total employee-related stock compensation expenses of $0.7 million and $1.3 million for the three and six months ended June 30, 2017, respectively, and $0.7 million and $1.1 million for the three months and six months ended June 30, 2016, respectively. In addition, the Company recognized non-employee stock compensation expenses of $44,000 and $111,000 for the three and six months ended June 30, 2017, respectively, and $19,000 and $42,000 for the three and six months ended June 30, 2016, respectively. The following table summarizes stock‑based compensation expense related to stock options and restricted stock units included in the condensed statements of operations and comprehensive loss (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Cost of goods sold $ 51 $ 33 $ 96 $ 59 Selling, general and administrative 475 574 1,007 881 Research and development 173 108 318 207 Total stock-based compensation expense $ 699 $ 715 $ 1,421 $ 1,147 As of June 30, 2017, unrecognized compensation expense related to unvested options was $5.7 million, which the Company expects to recognize on a straight‑line basis over a weighted‑average period of 3.1 years. Unrecognized compensation expense related to unvested RSUs was $ 1.4 million, which the Company expects to recognize on a straight‑line basis over a weighted‑average period of 2.9 years.

Net Loss per Common Share

Net Loss per Common Share	6 Months Ended
	Jun. 30, 2017
Net Loss per Common Share
Net Loss per Common Share	7. Net Loss per Common Share As the Company generated net losses for all the periods presented, all potentially dilutive common securities are determined to be anti-dilutive. The following table sets forth the computation of the basic and diluted net loss per share(in thousands, except share and per share data): Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Numerator: Net loss $ (10,387) $ (10,129) $ (23,604) $ (22,239) Denominator: Weighted-average common shares outstanding 16,986,628 13,409,696 16,973,473 13,404,822 Less: weighted-average unvested common shares subject to repurchase (554) (5,689) (1,193) (5,047) Weighted-average shares used to compute net loss per common share, basic and diluted 16,986,074 13,404,007 16,972,280 13,399,775 Net loss per common share, basic and diluted $ (0.61) $ (0.76) $ (1.39) $ (1.66) The following outstanding shares of potentially dilutive securities have been excluded from diluted net loss per share because their inclusion would be anti‑dilutive: June 30, June 30, 2017 2016 Options to purchase common stock 2,949,908 2,637,031 Restricted stock units 250,447 117,000 Warrants to purchase common stock 187,625 137,007 Total 3,387,980 2,891,038

Commitments & Contingencies

Commitments & Contingencies	6 Months Ended
	Jun. 30, 2017
Commitments and Contingencies.
Commitments & Contingencies	8. Commitments and Contingencies On February 27, 2017, a purported stockholder class action titled Paciga v. Invuity, Inc., et al., Case No. 3:17‑cv‑01005, was filed in the United States District Court for the Northern District of California against the Company, its Chief Executive Officer, and its Chief Financial Officer. The complaint alleges that the defendants made false or misleading statements to investors regarding the Company’s business prospects. The complaint purports to assert claims for violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and the Securities Exchange Commission Rule 10b-5 on behalf of a purported class consisting of all purchasers of the Company’s common stock between July 19, 2016 and November 3, 2016, and seeks unspecified compensatory damages, attorney fees and costs, and other relief. On May 30, 2017, the Court appointed Mike Paciga as lead plaintif. The led plantiff has until July 31, 2017 to either file an amended complaint or designate the current complaint as the operative complaint. The Company intends to defend the litigation vigorously. Based on information currently available, the Company has determined that the amount of any possible loss or range of possible loss is not reasonably estimable. The Company is, and from time to time may become, involved in legal proceedings arising from the ordinary course of its business. Management is currently not aware of any matters that will have a material adverse effect on the financial position, results of operations or cash flows of the Company.

Organization and Description 14

Organization and Description of Business (Policies)	6 Months Ended
	Jun. 30, 2017
Organization and Description of Business
Liquidity	Liquidity The Company has incurred net losses from operations since inception, including $23.6 million in the six months ended June 30, 2017, and has an accumulated deficit of $169.8 million as of June 30, 2017. The Company has $26.3 million in cash and cash equivalents and short-term investments, and $23.5 million in debt outstanding at June 30, 2017. The Company expects to incur additional losses and negative cash flows for the foreseeable future. Management believes that its cash,cash equivalents and short-term investments at June 30, 2017, and additional funding available under the revolving credit facility with MidCap Financial Trust, and their affiliates (“MidCap”), will provide sufficient funds to enable the Company to meet its operating plan through at least the next twelve months. In addition, on July 1, 2016, the Company filed a prospectus supplement for an at-the-market offering (“ATM”) program of up to $25.0 million. However, if the Company’s anticipated operating results are not achieved in future periods, additional debt or equity financing may need to be raised, or planned expenditures may need to be reduced.
Basis of Presentation	Basis of Presentation The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and in accordance with the instructions to Form 10‑Q and Rule 10‑01 of Regulation S‑X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The unaudited interim condensed financial statements have been prepared on the same basis as the annual financial statements. In the opinion of management, the accompanying unaudited condensed financial statements reflect all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair statement of the financial position, results of operations and cash flows for the periods presented. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Annual Report on Form 10‑K for the year ended December 31, 2016 and filed with the U.S. Securities and Exchange Commission (the “SEC”). The accompanying year-end balance sheet was derived from the audited financial statements included in the Company’s Annual Report on Form 10‑K for the year ended December 31, 2016. The results for the three months and six months ended June 30, 2017 are not necessarily indicative of the results expected for the full fiscal year or any other periods.

Summary of Significant Accoun15

Summary of Significant Accounting Policies (Policies)	6 Months Ended
	Jun. 30, 2017
Summary of Significant Accounting Policies
Use of Estimates	Use of Estimates The Company’s financial statements have been prepared in conformity with U.S. GAAP. The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, management evaluates its estimates, including those related to revenue recognition, fair value of assets and liabilities, inventory, income taxes and stock-based compensation. Actual results could differ from those estimates and assumptions.
Cash Equivalents	Cash Equivalents Cash equivalents consist of short-term, highly liquid investments with original maturities of three months or less from the date of purchase. Cash equivalents consist primarily of amounts invested in money market funds.
Restricted Cash	Restricted Cash Restricted cash represents a certificate of deposit held at a financial institution as collateral for a letter of credit related to the Company’s facility lease in San Francisco, California.
Fair Value of Financial Instruments	Fair Value of Financial Instruments The carrying amounts of the Company’s financial instruments, including cash equivalents, short-term investments, accounts receivable and accounts payable, approximate fair value due to their relatively short maturities. As of June 30, 2017 and December 31, 2016, based on Level 2 inputs and the borrowing rates available to the Company for loans with similar terms and consideration of the Company’s credit risk, the carrying value of the Company’s long-term debt approximates its fair value.
Customer Concentration	Customer Concentration Significant customers are those which represent 10% or more of the Company’s total revenue for each period presented in the condensed statements of operations and comprehensive loss or 10% or more of the Company’s net accounts receivable balance at each respective balance sheet date. As of and for the year ended December 31, 2016 and as of and for the three and six months ended June 30, 2017 and 2016, the Company had no customers that represented 10% or more of its revenue or accounts receivable balances.
Revenue Recognition	Revenue Recognition The Company’s revenue is generated from the sale of its products to hospitals and medical centers through direct sales representatives and independent sales agents. The Company recognizes revenue when all of the following criteria are met:  persuasive evidence of an arrangement exists;  the sales price is fixed or determinable;  collection of the relevant receivable is reasonably assured at the time of sale; and  delivery has occurred. The Company recognizes revenue when title to the goods and risk of loss transfers to the customer, which is upon shipment of the product under the Company’s standard terms and conditions. Shipping and handling costs billed to the customer are recorded in revenue.
Segment Reporting	Segment Reporting The Company manages its operations as a single operating segment for the purposes of assessing performance and making operating decisions. All of the Company’s assets are maintained in the United States. The Company derives the majority of its revenue from sales to customers in the United States, based upon the billing address of the customer.
Net loss per Common Share	Net loss per Common Share Basic net loss per common share is calculated by dividing the net loss by the weighted-average number of shares of common stock outstanding during the period, without consideration of potentially dilutive securities. Diluted net loss per common share is the same as basic net loss per common share since the effect of potentially dilutive securities are anti-dilutive. Shares subject to repurchase are excluded from the weighted-average shares.
Recent Accounting Pronouncements	Recent Accounting Pronouncements · In May 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2014‑09, Revenue from Contracts with Customers (Topic 606) , which supersedes the revenue recognition requirements in ASC 605, Revenue Recognition . This ASU is based on the principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The ASU also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. In August 2015, FASB issued ASU No. 2015‑14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date , which effectively delayed the adoption date by one year, to an effective date for public entities for annual and interim periods beginning after December 15, 2017. · In March 2016, the FASB issued ASU No. 2016‑08, Revenue from Contracts with Customers (Topic 606): Principal Versus Agent Considerations (Reporting Revenue Gross Versus Net), to clarify certain aspects of the principal-versus-agent guidance in its new revenue recognition standard. · In April 2016 the FASB issued ASU No. 2016‑10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing to clarify on how to identify the performance obligations and the licensing implementation guidance in its new revenue recognition standard. · In May 2016, the FASB issued ASU No. 2016‑12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients, to address certain issues identified by the Transition Resource Group, (the “TRG”) in the guidance on assessing collectability, presentation of sales tax, noncash consideration, and completed contracts and contracts modifications at transition. The Company is in the process of evaluating the impact of the new revenue guidance on its financial statements. · In July 2015, the FASB issued ASU No. 2015‑11, Inventory (Topic 330): Simplifying the Measurement of Inventory , which permits companies to measure inventory at the lower of cost and realizable value. ASU 2015‑11 applies to all business entities and is effective for public business entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2016. The adoption of this standard in the first quarter of 2017 did not have a material impact on the Company’s financial statements. · In January 2016, the FASB issued ASU No. 2016‑01, Recognition and Measurement of Financial Assets and Financial Liabilities (Topic 825) , which addresses certain aspects of recognition, measurement, presentation and disclosure of financial instruments. ASU No. 2016‑01 is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2016. The adoption of this standard in the first quarter of 2017 did not have a material impact on the Company’s financial statements. · In February 2016, the FASB issued ASU No. 2016‑02— Leases (“ASC 842”), which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e. lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. ASC 842 supersedes the previous leases standard, ASC 840 Leases . The standard is effective on January 1, 2019, with early adoption permitted. The Company is in the process of evaluating the impact of this new guidance on its financial statements. · In March 2016 the FASB issued ASU No. 2016‑09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting . This update simplifies the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. ASU No. 2016‑09 is effective for public entities for annual periods beginning after December 15, 2016. As a result of adopting ASU No. 2016‑09, the Company has made an accounting policy election to account for forfeitures as they occur. This change has been applied on a modified retrospective basis, with no material impacts on the Company’s financial statements. The adoption of ASU No. 2016‑09 also requires excess tax benefits and tax deficiencies be recorded in the income statement as opposed to additional paid‑in capital when the awards vest or are settled, and has been applied on a prospective basis with no impact on the financial statements as of and for the three and six months ended June 30, 2017. As a result of the adoption, the Company's increased its total NOLs by $1.0 million on January 1, 2017 related to deferred tax assets that arose directly from tax deductions related to equity compensation greater than compensation recognized for financial reporting purposes. This amount is fully offset by the valuation allowance. The adoption of ASU No. 2016‑09 related to the accounting for minimum statutory withholding tax requirements and cash paid by an employer when directly withholding shares for tax-withholding purposes had no impact on the Company's current consolidated financial statements or on any prior period financial statements presented. · In June 2016, the FASB issued ASU No. 2016‑13, Measurement of Credit Losses on Financial Statements (Topic 326) . This update provides financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. The update replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. ASU No. 2016‑13 is effective for public entities for annual periods beginning after December 15, 2019. The Company is in the process of evaluating the impact of this new guidance on its financial statements. · In August 2016, the FASB issued ASU No. 2016‑15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (a consensus of the FASB Emerging Issues Task Force) . The new guidance is intended to reduce diversity in practice in how certain transactions are classified in the statement of cash flows. This update addresses the following eight specific cash flow issues: debt prepayment or debt extinguishment costs; settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing; contingent consideration payments made after a business combination; proceeds from the settlement of insurance claims; proceeds from the settlement of corporate-owned life insurance policies (“COLIs”) (including bank-owned life insurance policies (“BOLIs”); distributions received from equity method investees; beneficial “interests in securitization transactions; and separately identifiable cash flows and application of the predominance principle. ASU No. 2016‑15 is effective for public entities for annual periods beginning after December 15, 2017. The Company is in the process of evaluating the impact of this new guidance on its financial statements. · In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. The amendments in this Update require that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company is in the process of evaluating the impact of this new guidance on its financial statements.

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	6 Months Ended
	Jun. 30, 2017
Fair Value Measurements
Financial Assets and Liabilities Measured at Fair Value on Recurring Basis Based on Three-Tier Fair Value Hierarchy	The following table sets forth the fair value of the Company’s financial assets and liabilities measured at fair value on a recurring basis based on the three-tier fair value hierarchy (in thousands): June 30, 2017 Level 1 Level 2 Level 3 Total Assets Money market funds $ 10,463 $ — $ — $ 10,463 Commercial paper — 11,272 — 11,272 Corporate debt securities — 753 — 753 Agency bonds — 2,497 — 2,497 $ 10,463 $ 14,522 $ — $ 24,985 December 31, 2016 Level 1 Level 2 Level 3 Total Assets Money market funds $ 18,755 $ — $ — $ 18,755 Commercial paper — 9,582 — 9,582 Corporate debt securities — 9,533 — 9,533 $ 18,755 $ 19,115 $ — $ 37,870

Balance Sheet Components (Table

Balance Sheet Components (Tables)	6 Months Ended
	Jun. 30, 2017
Balance Sheet Components
Schedule of Inventory	Inventory consisted of the following (in thousands): June 30, December 31, 2017 2016 Raw materials $ 889 $ 699 Work-in-process 1,129 1,144 Finished goods 3,542 3,209 Total inventory $ 5,560 $ 5,052
Schedule of Prepaid Expenses and Other Assets	Prepaid expenses and other assets consisted for the following (in thousands): June 30, December 31, 2017 2016 Prepaid expenses $ 661 $ 1,004 Other 41 84 Total prepaid expenses and other current assets $ 702 $ 1,088
Schedule of Property and Equipment, Net	Property and equipment, net, consisted of the following (in thousands): June 30, December 31, 2017 2016 Computer equipment and software $ 1,468 $ 1,377 Laboratory and manufacturing equipment 2,801 2,422 Furniture and fixtures 1,516 1,442 Leasehold improvements 7,153 7,153 Total property and equipment, gross 12,938 12,394 Less: accumulated depreciation and amortization (5,117) (4,108) Total property and equipment, net $ 7,821 $ 8,286
Schedule of Accrued and Other Current Liabilities	Accrued and other current liabilities consisted of the following (in thousands): June 30, December 31, 2017 2016 Accrued payroll-related expenses $ 4,248 $ 5,301 Accrued professional fees 1,026 246 Deferred rent 261 261 Other 521 543 Total accrued and other current liabilities $ 6,056 $ 6,351

Stock Option Plans (Tables)

Stock Option Plans (Tables)	6 Months Ended
	Jun. 30, 2017
Stock Option Plans
Summary of Stock-based Compensation Expense Related to Stock Options and Restricted Stock Units Included in Condensed Statements of Operations and Comprehensive Loss	Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Cost of goods sold $ 51 $ 33 $ 96 $ 59 Selling, general and administrative 475 574 1,007 881 Research and development 173 108 318 207 Total stock-based compensation expense $ 699 $ 715 $ 1,421 $ 1,147

Net Loss per Common Share (Tabl

Net Loss per Common Share (Tables)	6 Months Ended
	Jun. 30, 2017
Net Loss per Common Share
Schedule of Computation of Basic and Diluted Net Loss per Share	Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Numerator: Net loss $ (10,387) $ (10,129) $ (23,604) $ (22,239) Denominator: Weighted-average common shares outstanding 16,986,628 13,409,696 16,973,473 13,404,822 Less: weighted-average unvested common shares subject to repurchase (554) (5,689) (1,193) (5,047) Weighted-average shares used to compute net loss per common share, basic and diluted 16,986,074 13,404,007 16,972,280 13,399,775 Net loss per common share, basic and diluted $ (0.61) $ (0.76) $ (1.39) $ (1.66)
Schedule of Potentially Dilutive Securities Outstanding Excluded from Computation of Diluted Shares Outstanding	June 30, June 30, 2017 2016 Options to purchase common stock 2,949,908 2,637,031 Restricted stock units 250,447 117,000 Warrants to purchase common stock 187,625 137,007 Total 3,387,980 2,891,038

Organization and Description 20

Organization and Description of Business - Additional Information (Detail) - USD ($)	Jul. 01, 2016	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016
Organization And Nature Of Operations
Net loss		$ 10,387,000	$ 10,129,000	$ 23,604,000	$ 22,239,000
Accumulated deficit		169,820,000		169,820,000		$ 146,216,000
Cash and cash equivalents and short-term investments		26,300,000		26,300,000
Face value of debt outstanding		$ 23,500,000		23,500,000
Gross proceeds from issuance of shares				$ 57,000	$ (266,000)
Maximum
Organization And Nature Of Operations
ATM Offering	$ 25

Summary of Significant Accoun21

Summary of Significant Accounting Policies - Additional Information (Detail) $ in Millions	Jan. 01, 2017USD ($)	Jun. 30, 2017segmentcustomer	Dec. 31, 2016customer
Significant Accounting Policies
Number of operating segments | segment		1
ASU 2016-09
Significant Accounting Policies
Amount recognized related to deferred tax assets arose directly from tax deductions related to equity compensation | $	$ 1
Customer Concentration Risk
Significant Accounting Policies
Number of Customers | customer		0	0
Revenue | Customer Concentration Risk
Significant Accounting Policies
Concentration risk, percentage		10.00%	10.00%
Accounts Receivable, Net | Customer Concentration Risk
Significant Accounting Policies
Concentration risk, percentage		10.00%	10.00%

Fair Value Measurements - Finan

Fair Value Measurements - Financial Assets and Liabilities Measured at Fair Value on Recurring Basis Based on Three-Tier Fair Value Hierarchy (Detail) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Assets
Assets	$ 24,985	$ 37,870
Level 1
Assets
Assets	10,463	18,755
Level 2
Assets
Assets	14,522	19,115
Money Market Funds
Assets
Assets	10,463	18,755
Money Market Funds | Level 1
Assets
Assets	10,463	18,755
Commercial Paper
Assets
Assets	11,272	9,582
Commercial Paper | Level 2
Assets
Assets	11,272	9,582
Corporate Debt Securities
Assets
Assets	753	9,533
Corporate Debt Securities | Level 2
Assets
Assets	753	$ 9,533
Agency Bonds
Assets
Assets	2,497
Agency Bonds | Level 2
Assets
Assets	$ 2,497

Balance Sheet Components - Sche

Balance Sheet Components - Schedule of Inventory (Detail) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Balance Sheet Components
Raw materials	$ 889	$ 699
Work-in-process	1,129	1,144
Finished goods	3,542	3,209
Total inventory	$ 5,560	$ 5,052

Balance Sheet Components - Sc24

Balance Sheet Components - Schedule of Prepaid Expenses and Other Assets (Detail) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Balance Sheet Components
Prepaid expenses	$ 661	$ 1,004
Other	41	84
Total prepaid expenses and other current assets	$ 702	$ 1,088

Balance Sheet Components - Sc25

Balance Sheet Components - Schedule of Property and Equipment, Net (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016
Property, Plant and Equipment
Total property and equipment, gross	$ 12,938		$ 12,938		$ 12,394
Less: accumulated depreciation and amortization	(5,117)		(5,117)		(4,108)
Total property and equipment, net	7,821		7,821		8,286
Depreciation and amortization	500	$ 500	1,009	$ 972
Computer Equipment and Software
Property, Plant and Equipment
Total property and equipment, gross	1,468		1,468		1,377
Laboratory and Manufacturing Equipment
Property, Plant and Equipment
Total property and equipment, gross	2,801		2,801		2,422
Furniture and Fixtures
Property, Plant and Equipment
Total property and equipment, gross	1,516		1,516		1,442
Leasehold Improvements
Property, Plant and Equipment
Total property and equipment, gross	$ 7,153		$ 7,153		$ 7,153

Balance Sheet Components - Sc26

Balance Sheet Components - Schedule of Accrued and Other Current Liabilities (Detail) - USD ($) $ in Thousands	Jun. 30, 2017	Dec. 31, 2016
Balance Sheet Components
Accrued payroll-related expenses	$ 4,248	$ 5,301
Accrued professional fees	1,026	246
Deferred rent	261	261
Other	521	543
Total accrued and other current liabilities	$ 6,056	$ 6,351

Debt - Additional Information (

Debt - Additional Information (Detail) - USD ($)	Mar. 10, 2017	Jun. 30, 2017
Mid Cap | Revolving Credit Facility
Debt
Maximum loan amount	$ 10,000,000
Additional loan amount	$ 10,000,000
Drawn amount		$ 3,500,000
Term loan rate (as a percent)	3.25%
Applicable margin (as a percent)	1.50%
Silicon Valley Bank | Accounts Receivable Credit Facility
Debt
Drawn amount		7,500,000
Termination fee		$ 150,000
Term loan
Debt
Common stock drawdown percent of amount drawn	2.00%
Term loan | HealthCare Royalty Partners
Debt
Repayments Of Debt	$ 15,000,000
Payments Of Debt Extinguishment Costs	1,800,000
Interest Paid	400,000
Term loan | Mid Cap
Debt
Maximum loan amount	$ 30,000,000
Term loan rate (as a percent)	6.50%
Applicable margin (as a percent)	1.50%
Loan term period	36 months
Frequency periodic payment of loan	monthly
Tranche 1
Debt
Warrants issued to purchase of shares	50,618
Exercise price of warrants	$ 7.90
Tranche 1 | Mid Cap
Debt
Drawn amount	$ 20,000,000
Tranche 1 | Mid Cap | HealthCare Royalty Partners
Debt
Loan paid off	$ 17,200,000
Tranche 2
Debt
Loan term period	5 years
Tranche 2 | Level 3
Debt
Warrants liability	$ 279,000
Assumptions used in Black-Sholes model
Contractual term	10 years
Interest free rate	2.58%
Dividend yield	0.00%
Volatility	60.00%
Tranche 2 | Mid Cap
Debt
Maximum loan amount	$ 10,000,000

Stock Option Plans - Additional

Stock Option Plans - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016
Aggregate intrinsic value of options exercised	$ 0.3	$ 0.2	$ 0.3	$ 0.3
Weighted-average remaining contractual life of options outstanding			7 years 7 months 6 days		7 years 6 months
Weighted-average remaining contractual life of options outstanding, vested and expected to vest			7 years 7 months 6 days		7 years 6 months
Employees
Stock options granted	125,525	72,200	734,705	735,550
Weighted average grant date fair value of options, granted	$ 7.32	$ 7.02	$ 6.65	$ 7.37
Aggregate intrinsic value of options exercised			$ 0.7
Amortized period			3 years
Executive
Stock options granted			268,000
Restricted Stock Units | Executive
Stock options granted			71,500
Aggregate intrinsic value of options exercised			$ 0.5
Restricted stock units, vesting term			4 years	5 years
Restricted stock units, vesting percentage			25.00%	20.00%
Restricted Stock Units | Board Members
Stock options granted		64,000		207,000
Aggregate intrinsic value of options exercised		$ 0.3		$ 1.4
Restricted stock units, vesting percentage				100.00%
Restricted Stock Units | Outside Directors
Stock options granted	72,000		153,000
Aggregate intrinsic value of options exercised	$ 0.5		$ 1
Restricted stock units, vesting percentage			100.00%

Stock Option Plans - Stock-base

Stock Option Plans - Stock-based Compensation (Detail) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost
Total stock-based compensation expense	$ 699,000	$ 715,000	$ 1,421,000	$ 1,147,000
Unrecognized compensation expense
Unrecognized compensation expense related to unvested options	5,700,000		$ 5,700,000
Weighted-average expected period to recognize of compensation expense, term			3 years 1 month 6 days
Unrecognized compensation expense related to RSUs	1,400,000		$ 1,400,000
Cost of Goods Sold
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost
Total stock-based compensation expense	51,000	33,000	96,000	59,000
Selling, General and Administrative
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost
Total stock-based compensation expense	475,000	574,000	1,007,000	881,000
Research and Development
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost
Total stock-based compensation expense	173,000	108,000	318,000	207,000
Non-employees
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost
Total stock-based compensation expense	$ 44,000	$ 19,000	$ 111,000	$ 42,000
Restricted Stock Units
Unrecognized compensation expense
Weighted-average expected period to recognize of compensation expense, term			2 years 10 months 24 days

Net Loss per Common Share - Sch

Net Loss per Common Share - Schedule of Computation of Basic and Diluted Net Loss per Share (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Numerator:
Net loss	$ (10,387)	$ (10,129)	$ (23,604)	$ (22,239)
Denominator:
Weighted-average common shares outstanding	16,986,628	13,409,696	16,973,473	13,404,822
Less: weighted-average unvested common shares subject to repurchase	(554)	(5,689)	(1,193)	(5,047)
Weighted-average shares used to compute net loss per common share, basic and diluted	16,986,074	13,404,007	16,972,280	13,399,775
Net loss per common share, basic and diluted	$ (0.61)	$ (0.76)	$ (1.39)	$ (1.66)

Net Loss per Common Share - S31

Net Loss per Common Share - Schedule of Potentially Dilutive Securities Outstanding Excluded from Computation of Diluted Shares Outstanding (Detail) - shares	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Antidilutive Securities Excluded from Computation of Earnings Per Share
Antidilutive securities excluded from computation of diluted net loss per share	3,387,980	2,891,038
Options to Purchase Common Stock
Antidilutive Securities Excluded from Computation of Earnings Per Share
Antidilutive securities excluded from computation of diluted net loss per share	2,949,908	2,637,031
Restricted Stock Units
Antidilutive Securities Excluded from Computation of Earnings Per Share
Antidilutive securities excluded from computation of diluted net loss per share	250,447	117,000
Warrants to Purchase Common Stock
Antidilutive Securities Excluded from Computation of Earnings Per Share
Antidilutive securities excluded from computation of diluted net loss per share	187,625	137,007