Invuity (IVTY) 10-Q 20 Jul 16 2016 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2016	Jul. 14, 2016
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2016
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q2
Trading Symbol	IVTY
Entity Registrant Name	Invuity, Inc.
Entity Central Index Key	1,393,020
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		13,446,321

Condensed Balance Sheets

Condensed Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 25,456	$ 46,296
Accounts receivable, net	4,514	3,619
Inventory	5,450	5,182
Prepaid expenses and other current assets	572	923
Total current assets	35,992	56,020
Restricted Cash	1,090	1,090
Property and equipment, net	8,752	9,195
Other non-current assets	285
Total assets	46,119	66,305
Current liabilities:
Accounts payable	2,369	2,458
Accrued and other current liabilities	4,951	4,214
Short-term debt—related party	750
Total current liabilities	8,070	6,672
Deferred rent	2,771	2,810
Long-term debt—related party	13,801	14,480
Total liabilities	24,642	23,962
Commitments and contingencies
Stockholders’ equity :
Preferred stock, $0.001 par value—10,000,000 shares authorized at June 30, 2016 and December 31, 2015, respectively; no shares issued and outstanding at June 30, 2016 and December 31, 2015
Common stock, $0.001 par value—100,000,000 shares authorized at June 30, 2016 and December 31, 2015, respectively;13,444,818 and 13,392,358 shares issued and outstanding at June 30, 2016 and December 31, 2015, respectively	13	13
Additional paid-in capital	149,309	147,937
Accumulated deficit	(127,845)	(105,607)
Total stockholders’ equity	21,477	42,343
Total liabilities and stockholders’ equity	$ 46,119	$ 66,305

Condensed Balance Sheets (Paren

Condensed Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2016	Dec. 31, 2015
Statement Of Financial Position [Abstract]
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	13,444,818	13,392,358
Common stock, shares outstanding	13,444,818	13,392,358
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

Condensed Statements of Operati

Condensed Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Income Statement [Abstract]
Revenue	$ 8,223	$ 4,747	$ 14,627	$ 9,189
Cost of goods sold	2,091	1,849	4,196	3,571
Gross profit	6,132	2,898	10,431	5,618
Operating expenses:
Research and development	2,340	1,857	4,941	3,757
Selling, general and administrative	13,429	9,907	26,750	18,840
Total operating expenses	15,769	11,764	31,691	22,597
Loss from operations	(9,637)	(8,866)	(21,260)	(16,979)
Interest expense	(505)	(504)	(1,009)	(873)
Interest and other income (expense), net	13	24	30	(526)
Net loss and comprehensive loss	$ (10,129)	$ (9,346)	$ (22,239)	$ (18,378)
Net loss per common share, basic and diluted	$ (0.76)	$ (3.20)	$ (1.66)	$ (10.11)
Weighted-average shares used to compute net loss per common share, basic and diluted	13,404,007	2,919,823	13,399,775	1,817,673

Condensed Statements of Cash Fl

Condensed Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Cash flows from operating activities:
Net loss	$ (22,239)	$ (18,378)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	972	819
Stock-based compensation	1,147	561
Changes in fair value of convertible preferred stock warrant liability		472
Provision for (recovery of) doubtful accounts	(18)	89
Noncash interest expense	71	71
Changes in operating assets and liabilities:
Accounts receivable	(877)	(528)
Inventory	(268)	(555)
Prepaid expenses and other assets	100	1,386
Accounts payable	(129)	131
Accrued and other current liabilities	985	651
Deferred rent	(39)	126
Net cash used in operating activities	(20,295)	(15,155)
Cash flows from investing activities:
Purchases of property and equipment	(496)	(2,695)
Net cash used in investing activities	(496)	(2,695)
Cash flows from financing activities:
Proceeds from issuance of common stock upon initial public offering, net of issuance costs		49,755
Financing Offering Costs	(266)
Proceeds from issuance of long-term debt -related party, net of issuance costs		5,000
Proceeds from issuance of common stock upon exercise of stock options	217	33
Proceeds from issuance of convertible preferred stock, net of issuance costs		22,769
Net cash (used in) provided by financing activities	(49)	77,557
Net increase (decrease) in cash and cash equivalents	(20,840)	59,707
Cash and cash equivalents, beginning of period	46,296	6,048
Cash and cash equivalents, end of period	25,456	65,755
Supplemental disclosures of cash flow information:
Interest paid to related party	938	804
Non-cash investing and financing activities:
Purchases of property and equipment in accounts payable and accrued liabilities	124	82
Offering issuance costs in accounts payable	$ 266	2,542
Reclassification of convertible preferred stock warrant liability to additional paid-in capital upon conversion of preferred stock warrants into common stock warrants		$ 608

Organization and Description of

Organization and Description of Business	6 Months Ended
	Jun. 30, 2016
Accounting Policies [Abstract]
Organization and Description of Business	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 open minimally invasive and 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 and has an accumulated deficit of $127.8 million as of June 30, 2016. The Company expects to incur additional losses and negative cash flows for the foreseeable future. Management believes that its cash and cash equivalents at June 30, 2016 and additional borrowings available under its accounts receivable credit facility entered into in February 2015 will provide sufficient funds to enable the Company to meet its operating plan through at least the next twelve months. 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. 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 for the year ended December 31, 2015 and filed with the U.S. Securities and Exchange Commission (the “SEC”). The results for the three and six months ended June 30, 2016 are not necessarily indicative of the results expected for the full fiscal year or any other periods. Out-of-Period Adjustments In the six months ended June 30, 2015, the Company recorded an out-of-period adjustment to reverse revenue that the Company had originally recorded in the fourth quarter of 2014 associated with sales to a distributor for military facilities. The correction of this error resulted in an increase to the Company’s net loss of $302,000 for the three and six months ended June 30, 2015 and a corresponding decrease to accounts receivable. The distributor returned the underlying inventory, and the Company terminated the relationship with the distributor involved, and started working with a new distributor for military accounts. Management assessed the impact of the adjustment and did not believe the amount was material to any prior period financial statements, and the impact of correcting the error in the six months ended June 30, 2015 was not material to those financial statements and was not expected to be material to the financial statements for the year ending December 31,2015. As a result, the Company did not restate any prior period amounts. During the six months ended June 30, 2015, the Company recorded an out-of-period adjustment to increase the fair value of the convertible preferred stock warrant liability, which was incorrectly valued at December 31, 2014 due to an error in the expected term assumption. The correction of this error resulted in an increase to the Company’s net loss of $370,000 for the six months ended June 30, 2015 and a corresponding increase to the convertible preferred stock warrant liability. Management assessed the impact of the adjustment and did not believe that the amount was material to any prior period financial statements, and the impact of correcting the error in the six months ended June 30, 2015 was not material to those financial statements. As a result, the Company did not restate any prior period amounts.

Summary of Significant Accounti

Summary of Significant Accounting Policies	6 Months Ended
	Jun. 30, 2016
Accounting Policies [Abstract]
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, accounts receivable and accounts payable, approximate fair value due to their relatively short maturities. As of June 30, 2016 and December 31, 2015, 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 three and six months ended June 30, 2016, the Company had no customers that represented 10% or more of its revenue or accounts receivable balances. As of and for the three and six months ended June 30, 2015, the Company had no customers that represented 10% or more of its revenue and one customer that represented 10% of its accounts receivable balance. Convertible Preferred Stock Warrant Liability Freestanding warrants for shares that were contingently redeemable were classified as liabilities on the balance sheet at their estimated fair value because the shares underlying the warrants may obligate the Company to transfer assets to the holders at a future date under certain circumstances, such as a deemed liquidation event. The warrants were subject to remeasurement at each balance sheet date and the change in fair value, if any, was recognized as interest and other income, net in the condensed statements of operations and comprehensive loss. The Company adjusted the liability for changes in fair value until the completion of its IPO, at which time all convertible preferred stock warrants were converted into warrants to purchase common stock and the liability was reclassified to additional paid-in capital. 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 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 (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers (Topic 606) Revenue Recognition Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date 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), In April 2016 the FASB issued ASU No. 2016-10 , Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing In May 2016 the FASB issued ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients, The Company is in the process of determining the potential effects of this ASU on its financial statements. · In July 2015, the FASB issued ASU No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory · In August 2014, the FASB issued ASU No. 2014-15, Disclosure of Uncertainties About an Entity’s Ability to Continue as a Going Concern · In January 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities · In February 2016, the FASB issued ASU 2016-02 – Leases Leases · In March 2016 the FASB issued Accounting Standards Update (ASU) No. 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting · In June 2016 the FASB issued Accounting Standards Update (ASU) No. 2016-13, Measurement of Credit Losses on Financial Statements. 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 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.

Fair Value Measurements

Fair Value Measurements	6 Months Ended
	Jun. 30, 2016
Fair Value Disclosures [Abstract]
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 assets and Level 3 liabilities. Where quoted prices are available in an active market, securities are classified as Level 1. Level 1 assets consist primarily of highly liquid money market funds that are included in cash and cash equivalents and restricted cash. Level 3 liabilities that were measured at fair value on a recurring basis consisted of the convertible preferred stock warrant liability, which was measured using the probability weighted expected return method that calculated the probability of the Company going public or being acquired, and the option-pricing method for remaining private in the near to mid-term. Upon completion of the company’s IPO, the convertible preferred stock warrants were converted into common stock warrants and the fair value of the liability of $0.6 million was transferred to additional paid-in capital. The warrants are no longer subject to remeasurement. 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, 2016 Level 1 Level 2 Level 3 Total Assets Money market funds $ 23,810 $ — $ — $ 23,810 $ 23,810 $ — $ — $ 23,810 December 31, 2015 Level 1 Level 2 Level 3 Total Assets Money market funds $ 44,750 $ — $ — $ 44,750 $ 44,750 $ — $ — $ 44,750 The following table sets forth a summary of the changes in the fair value of the convertible preferred stock warrant liability, the Company’s Level 3 financial liability, which was measured on a recurring basis until the Company’s IPO in June 2015 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Beginning balance $ — $ 640 $ — $ 136 Change in fair value recorded in interest and other income (expense), net — (32 ) — 472 Reclassification from liability to additional paid-in capital upon conversion to common stock warrants at the IPO — (608 ) — (608 ) Ending balance $ — $ — $ — $ —

Balance Sheet Components

Balance Sheet Components	6 Months Ended
	Jun. 30, 2016
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Balance Sheet Components	4. Balance sheet components Inventory Inventory consisted of the following (in thousands): June 30, 2016 December 31, 2015 Raw materials $ 1,165 $ 1,000 Work-in-process 732 798 Finished goods 3,553 3,384 Total inventory $ 5,450 $ 5,182 Prepaid Expenses and Other Assets Prepaid expenses and other assets consisted of the following (in thousands): June 30, 2016 December 31, 2015 Prepaid expenses $ 576 $ 907 Other 281 16 Total prepaid expenses and other assets $ 857 $ 923 Property and Equipment, Net Property and equipment, net, consisted of the following (in thousands): June 30, 2016 December 31, 2015 Computer equipment and software $ 1,378 $ 1,081 Laboratory and manufacturing equipment 1,952 1,544 Furniture and fixtures 1,461 1,445 Leasehold improvements 7,107 7,106 Assets under construction 77 260 Total property and equipment, gross 11,975 11,436 Less: accumulated depreciation and amortization (3,223 ) (2,241 ) Total property and equipment, net $ 8,752 $ 9,195 Depreciation and amortization expense was $0.5 million and $0.4 million for the three months ended June 30, 2016 and 2015, respectively and was $1.0 million and $0.8 million for the six months ended June 30, 2016 and 2015, respectively. Accrued and Other Current Liabilities Accrued and other current liabilities consisted of the following (in thousands): June 30, 2016 December 31, 2015 Accrued payroll-related expenses $ 3,515 $ 3,052 Accrued independent sales agent commissions 185 158 Accrued professional fees 582 373 Accrued sales and marketing expenses — 45 Deferred rent 261 261 Other 408 325 Total accrued and other current liabilities $ 4,951 $ 4,214

Stock Option Plans

Stock Option Plans	6 Months Ended
	Jun. 30, 2016
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Stock Option Plans	5. 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, 2016, the Company granted to employees 72,200 options with a weighted average grant date fair value of $7.02 per share and an additional 3,000 shares were granted to non-employees. During the six months ended June 30, 2016, the Company granted to employees 735,550 options with a weighted average grant date fair value of $7.37 per share and 7,000 shares were granted to non-employees. In addition, the Company granted in May, 144,500 options to the Board with a weighted average grant date fair value of $4.87 per share. There were 442,344 options granted to employees during the three and six months ended June 30, 2015 with a weighted average grant date fair value of $12.23 per share and 19,998 options granted to non-employees. In addition, 59,170 options were granted to the Board with a weighted average grant date fair value of $14.70 per share. The aggregate intrinsic value of options exercised was $0.2 million and $0.3 million for the three and six months ended June 30, 2016, and 46,000 and 59,000 for the three and six months ended June 30, 2015, respectively. The weighted-average remaining contractual life of options outstanding was 7.6 and 7.8 years at June 30, 2016 and December 31, 2015, respectively. For June 30, 2016 and December 31, 2015, the weighted-average remaining contractual life was 7.5 and 7.7 years, respectively for vested and expected to vest options. In addition, during the three months ended June 30, 2016, the Company granted 64,000 restricted stock units (“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 executive RSUs have a five year term and vest twenty percent annually each February 15 th 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 expense of $0.7million and $1.1million for the three months and six months ended June 30, 2016, and $0.4 million and $0.6 million for the three months and six months ending June 30, 2015, respectively. In addition, the Company recognized non-employee stock compensation expense of $19,000 and $42,000 for the three and six months ended June 30, 2016, respectively, and $63,600 and $73,700 for the corresponding three month and six month periods ended June 30, 2015, respectively. The following table summarizes stock‑based compensation expense related to stock options and restricted stock units for the three months ended June 30, 2016 and 2015 included in the condensed statements of operations and comprehensive loss (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Cost of goods sold $ 33 $ 24 $ 59 $ 41 Research and development 108 86 207 147 Selling, general and administrative 574 278 881 373 Total stock-based compensation expense $ 715 $ 388 $ 1,147 $ 561 As of June 30, 2016, unrecognized compensation expense related to unvested options, net of estimated forfeitures, was $4.9 million, which the Company expects to recognize on a straight‑line basis over a weighted‑average period of 3.6 years. Unrecognized compensation expense related to unvested RSUs, net of estimated forfeitures, was $0.8 million, which the Company expects to recognize on a straight‑line basis over a weighted‑average period of 4.6 years

Net Loss per Common Share

Net Loss per Common Share	6 Months Ended
	Jun. 30, 2016
Earnings Per Share [Abstract]
Net Loss per Common Share	6. 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, 2016 2015 2016 2015 Numerator: Net loss $ (10,129 ) $ (9,346 ) $ (22,239 ) $ (18,378 ) Denominator: Weighted-average common shares outstanding 13,409,696 2,934,315 13,404,822 1,833,709 Less: weighted-average unvested common shares subject to repurchase (5,689 ) (14,492 ) (5,047 ) (16,036 ) Weighted-average shares used to compute net loss per common share, basic and diluted 13,404,007 2,919,823 13,399,775 1,817,673 Net loss per common share, basic and diluted $ (0.76 ) $ (3.20 ) $ (1.66 ) $ (10.11 ) The following outstanding shares of potentially dilutive securities have been excluded from diluted net loss per share for the three and six months ended June 30, 2016 and 2015 because their inclusion would be anti‑dilutive: June 30, 2016 2015 Options to purchase common stock 2,637,031 1,866,827 Restricted Stock Units 117,000 — Warrants to purchase common stock 137,007 137,007 Total 2,891,038 2,003,834

Subsequent Events

Subsequent Events	6 Months Ended
	Jun. 30, 2016
Subsequent Events [Abstract]
Subsequent Events	7. Subsequent Events On July 1, 2016, the Company filed a shelf registration statement on Form S-3 (Registration No. 333-212395) with the SEC to offer for sale up to an aggregate of $100,000,000 of common stock, preferred stock, depositary shares, warrants and/or units in one or more offerings and in any combinations. On that date, we also filed a prospectus supplement for an at-the-market (“ATM”) Offering of up to $25,000,000. We have capitalized approximately $266,000 of offering costs in other non-current assets in association with these filings.

Summary of Significant Accoun13

Summary of Significant Accounting Policies (Policies)	6 Months Ended
	Jun. 30, 2016
Accounting Policies [Abstract]
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, accounts receivable and accounts payable, approximate fair value due to their relatively short maturities. As of June 30, 2016 and December 31, 2015, 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 three and six months ended June 30, 2016, the Company had no customers that represented 10% or more of its revenue or accounts receivable balances. As of and for the three and six months ended June 30, 2015, the Company had no customers that represented 10% or more of its revenue and one customer that represented 10% of its accounts receivable balance.
Convertible Preferred Stock Warrant Liability	Convertible Preferred Stock Warrant Liability Freestanding warrants for shares that were contingently redeemable were classified as liabilities on the balance sheet at their estimated fair value because the shares underlying the warrants may obligate the Company to transfer assets to the holders at a future date under certain circumstances, such as a deemed liquidation event. The warrants were subject to remeasurement at each balance sheet date and the change in fair value, if any, was recognized as interest and other income, net in the condensed statements of operations and comprehensive loss. The Company adjusted the liability for changes in fair value until the completion of its IPO, at which time all convertible preferred stock warrants were converted into warrants to purchase common stock and the liability was reclassified to additional paid-in capital.
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 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 (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers (Topic 606) Revenue Recognition Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date 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), In April 2016 the FASB issued ASU No. 2016-10 , Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing In May 2016 the FASB issued ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients, The Company is in the process of determining the potential effects of this ASU on its financial statements. · In July 2015, the FASB issued ASU No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory · In August 2014, the FASB issued ASU No. 2014-15, Disclosure of Uncertainties About an Entity’s Ability to Continue as a Going Concern · In January 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities · In February 2016, the FASB issued ASU 2016-02 – Leases Leases · In March 2016 the FASB issued Accounting Standards Update (ASU) No. 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting · In June 2016 the FASB issued Accounting Standards Update (ASU) No. 2016-13, Measurement of Credit Losses on Financial Statements. 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 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.

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	6 Months Ended
	Jun. 30, 2016
Fair Value Disclosures [Abstract]
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, 2016 Level 1 Level 2 Level 3 Total Assets Money market funds $ 23,810 $ — $ — $ 23,810 $ 23,810 $ — $ — $ 23,810 December 31, 2015 Level 1 Level 2 Level 3 Total Assets Money market funds $ 44,750 $ — $ — $ 44,750 $ 44,750 $ — $ — $ 44,750
Summary of Changes in Fair Value of Convertible Preferred Stock Warrant Liability	The following table sets forth a summary of the changes in the fair value of the convertible preferred stock warrant liability, the Company’s Level 3 financial liability, which was measured on a recurring basis until the Company’s IPO in June 2015 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Beginning balance $ — $ 640 $ — $ 136 Change in fair value recorded in interest and other income (expense), net — (32 ) — 472 Reclassification from liability to additional paid-in capital upon conversion to common stock warrants at the IPO — (608 ) — (608 ) Ending balance $ — $ — $ — $ —

Balance Sheet Components (Table

Balance Sheet Components (Tables)	6 Months Ended
	Jun. 30, 2016
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Schedule of Inventory	Inventory consisted of the following (in thousands): June 30, 2016 December 31, 2015 Raw materials $ 1,165 $ 1,000 Work-in-process 732 798 Finished goods 3,553 3,384 Total inventory $ 5,450 $ 5,182
Schedule of Prepaid Expenses and Other Assets	Prepaid Expenses and Other Assets Prepaid expenses and other assets consisted of the following (in thousands): June 30, 2016 December 31, 2015 Prepaid expenses $ 576 $ 907 Other 281 16 Total prepaid expenses and other assets $ 857 $ 923
Schedule of Property and Equipment, Net	Property and equipment, net, consisted of the following (in thousands): June 30, 2016 December 31, 2015 Computer equipment and software $ 1,378 $ 1,081 Laboratory and manufacturing equipment 1,952 1,544 Furniture and fixtures 1,461 1,445 Leasehold improvements 7,107 7,106 Assets under construction 77 260 Total property and equipment, gross 11,975 11,436 Less: accumulated depreciation and amortization (3,223 ) (2,241 ) Total property and equipment, net $ 8,752 $ 9,195
Schedule of Accrued and Other Current Liabilities	Accrued and other current liabilities consisted of the following (in thousands): June 30, 2016 December 31, 2015 Accrued payroll-related expenses $ 3,515 $ 3,052 Accrued independent sales agent commissions 185 158 Accrued professional fees 582 373 Accrued sales and marketing expenses — 45 Deferred rent 261 261 Other 408 325 Total accrued and other current liabilities $ 4,951 $ 4,214

Stock Option Plans (Tables)

Stock Option Plans (Tables)	6 Months Ended
	Jun. 30, 2016
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Summary of Stock-based Compensation Expense Related to Stock Options and Restricted Stock Units Included in Condensed Statements of Operations and Comprehensive Loss	The following table summarizes stock‑based compensation expense related to stock options and restricted stock units for the three months ended June 30, 2016 and 2015 included in the condensed statements of operations and comprehensive loss (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Cost of goods sold $ 33 $ 24 $ 59 $ 41 Research and development 108 86 207 147 Selling, general and administrative 574 278 881 373 Total stock-based compensation expense $ 715 $ 388 $ 1,147 $ 561

Net Loss per Common Share (Tabl

Net Loss per Common Share (Tables)	6 Months Ended
	Jun. 30, 2016
Earnings Per Share [Abstract]
Schedule of Computation of Basic and Diluted Net Loss per Share	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, 2016 2015 2016 2015 Numerator: Net loss $ (10,129 ) $ (9,346 ) $ (22,239 ) $ (18,378 ) Denominator: Weighted-average common shares outstanding 13,409,696 2,934,315 13,404,822 1,833,709 Less: weighted-average unvested common shares subject to repurchase (5,689 ) (14,492 ) (5,047 ) (16,036 ) Weighted-average shares used to compute net loss per common share, basic and diluted 13,404,007 2,919,823 13,399,775 1,817,673 Net loss per common share, basic and diluted $ (0.76 ) $ (3.20 ) $ (1.66 ) $ (10.11 )
Schedule of Potentially Dilutive Securities Outstanding Excluded from Computation of Diluted Shares Outstanding	The following outstanding shares of potentially dilutive securities have been excluded from diluted net loss per share for the three and six months ended June 30, 2016 and 2015 because their inclusion would be anti‑dilutive: June 30, 2016 2015 Options to purchase common stock 2,637,031 1,866,827 Restricted Stock Units 117,000 — Warrants to purchase common stock 137,007 137,007 Total 2,891,038 2,003,834

Organization and Description 18

Organization and Description of Business - Additional Information (Detail) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Organization And Nature Of Operations [Line Items]
Accumulated deficit	$ (127,845,000)		$ (127,845,000)		$ (105,607,000)
Net loss	(10,129,000)	$ (9,346,000)	(22,239,000)	$ (18,378,000)
Accounts receivable, net	$ 4,514,000		$ 4,514,000		$ 3,619,000
Error Corrections That Reverse Revenue Recorded [Member] | Restatement Adjustment [Member]
Organization And Nature Of Operations [Line Items]
Net loss		(302,000)		(302,000)
Accounts receivable, net		$ (302,000)		(302,000)
Error Corrections That Increase Fair Value Of Warrant Liability [Member] | Restatement Adjustment [Member]
Organization And Nature Of Operations [Line Items]
Net loss				(370,000)
Convertible preferred stock warrant liability				$ 370,000

Summary of Significant Accoun19

Summary of Significant Accounting Policies - Additional Information (Detail)	3 Months Ended		6 Months Ended
	Jun. 30, 2016Customer	Jun. 30, 2015Customer	Jun. 30, 2016CustomerSegment	Jun. 30, 2015Customer
Significant Accounting Policies [Line Items]
Number of operating segments | Segment			1
Revenue [Member]
Significant Accounting Policies [Line Items]
Number of Customers	0	0	0	0
Revenue [Member] | Customer Concentration Risk [Member]
Significant Accounting Policies [Line Items]
Concentration risk, percentage	10.00%	10.00%	10.00%	10.00%
Accounts Receivable, Net [Member]
Significant Accounting Policies [Line Items]
Number of Customers	0	1	0	1
Accounts Receivable, Net [Member] | Customer Concentration Risk [Member]
Significant Accounting Policies [Line Items]
Concentration risk, percentage	10.00%	10.00%	10.00%	10.00%

Fair Value Measurements - Addit

Fair Value Measurements - Additional Information (Detail) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Reclassification of convertible preferred stock warrant liability to additional paid-in capital upon conversion of preferred stock warrants into common stock warrants		$ 608
Level 3 [Member] | Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Reclassification of convertible preferred stock warrant liability to additional paid-in capital upon conversion of preferred stock warrants into common stock warrants	$ 600

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, 2016	Dec. 31, 2015
Assets
Assets	$ 23,810	$ 44,750
Level 1 [Member] | Recurring [Member]
Assets
Assets	23,810	44,750
Money Market Funds [Member]
Assets
Assets	23,810	44,750
Money Market Funds [Member] | Level 1 [Member] | Recurring [Member]
Assets
Assets	$ 23,810	$ 44,750

Fair Value Measurements - Summa

Fair Value Measurements - Summary of Changes in Fair Value of Convertible Preferred Stock Warrant Liability (Detail) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2015
Fair Value Disclosures [Abstract]
Beginning balance	$ 640	$ 136
Change in fair value recorded in interest and other income (expense), net	(32)	472
Reclassification from liability to additional paid-in capital upon conversion to common stock warrants at the IPO	$ (608)	$ (608)

Balance Sheet Components - Sche

Balance Sheet Components - Schedule of Inventory (Detail) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Inventory Disclosure [Abstract]
Raw materials	$ 1,165	$ 1,000
Work-in-process	732	798
Finished goods	3,553	3,384
Total inventory	$ 5,450	$ 5,182

Balance Sheet Components - Sc24

Balance Sheet Components - Schedule of Prepaid Expenses and Other Assets (Detail) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Abstract]
Prepaid expenses	$ 576	$ 907
Other	281	16
Total prepaid expenses and other assets	$ 857	$ 923

Balance Sheet Components - Sc25

Balance Sheet Components - Schedule of Property and Equipment, Net (Detail) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Property, Plant and Equipment [Line Items]
Total property and equipment, gross	$ 11,975	$ 11,436
Less: accumulated depreciation and amortization	(3,223)	(2,241)
Total property and equipment, net	8,752	9,195
Computer Equipment and Software [Member]
Property, Plant and Equipment [Line Items]
Total property and equipment, gross	1,378	1,081
Laboratory and Manufacturing Equipment [Member]
Property, Plant and Equipment [Line Items]
Total property and equipment, gross	1,952	1,544
Furniture and Fixtures [Member]
Property, Plant and Equipment [Line Items]
Total property and equipment, gross	1,461	1,445
Leasehold Improvements [Member]
Property, Plant and Equipment [Line Items]
Total property and equipment, gross	7,107	7,106
Assets Under Construction [Member]
Property, Plant and Equipment [Line Items]
Total property and equipment, gross	$ 77	$ 260

Balance Sheet Components - Addi

Balance Sheet Components - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Property Plant And Equipment [Abstract]
Depreciation and amortization	$ 0.5	$ 0.4	$ 1	$ 0.8

Balance Sheet Components - Sc27

Balance Sheet Components - Schedule of Accrued and Other Current Liabilities (Detail) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Payables And Accruals [Abstract]
Accrued payroll-related expenses	$ 3,515	$ 3,052
Accrued independent sales agent commissions	185	158
Accrued professional fees	582	373
Accrued sales and marketing expenses		45
Deferred rent	261	261
Other	408	325
Total accrued and other current liabilities	$ 4,951	$ 4,214

Stock Option Plans - Additional

Stock Option Plans - Additional Information (Detail) - USD ($)	1 Months Ended	3 Months Ended		6 Months Ended		12 Months Ended
	May 31, 2016	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Weighted average grant date fair value of options, granted		$ 7.02	$ 12.23	$ 7.37	$ 12.23
Aggregate intrinsic value of options exercised		$ 200,000	$ 46,000	$ 300,000	$ 59,000
Weighted-average remaining contractual life of options outstanding				7 years 7 months 6 days		7 years 9 months 18 days
Weighted-average remaining contractual life of options outstanding, vested and expected to vest				7 years 6 months		7 years 8 months 12 days
Stock-based compensation		715,000	$ 388,000	$ 1,147,000	$ 561,000
Unrecognized compensation expense related to unvested options		4,900,000		$ 4,900,000
Weighted-average expected period to recognize of compensation expense, term				3 years 7 months 6 days
Restricted Stock Units (RSUs) [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Restricted stock units, granted				207,000
Restricted stock units, granted fair value		300,000		$ 1,400,000
Weighted-average expected period to recognize of compensation expense, term				4 years 7 months 6 days
Unrecognized compensation expense related to RSUs		$ 800,000		$ 800,000
Employees [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock options granted		72,200	442,344	735,550	442,344
Stock-based compensation		$ 700,000	$ 400,000	$ 1,100,000	$ 600,000
Non-employees [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock options granted		3,000	19,998	7,000	19,998
Stock-based compensation		$ 19,000	$ 63,600	$ 42,000	$ 73,700
Board Members [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock options granted	144,500			59,170
Weighted average grant date fair value of options, granted	$ 4.87			$ 14.70
Board Members [Member] | Restricted Stock Units (RSUs) [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Restricted stock units, granted		64,000
Restricted stock units, vesting percentage				100.00%
Executive [Member] | Restricted Stock Units (RSUs) [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Restricted stock units, expiration term				5 years
Restricted stock units, vesting percentage				20.00%

Stock Option Plans - Summary of

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 (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation expense	$ 715	$ 388	$ 1,147	$ 561
Cost of Goods Sold [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation expense	33	24	59	41
Research and Development [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation expense	108	86	207	147
Selling, General and Administrative [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total stock-based compensation expense	$ 574	$ 278	$ 881	$ 373

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, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Numerator:
Net loss	$ (10,129)	$ (9,346)	$ (22,239)	$ (18,378)
Denominator:
Weighted-average common shares outstanding	13,409,696	2,934,315	13,404,822	1,833,709
Less: weighted-average unvested common shares subject to repurchase	(5,689)	(14,492)	(5,047)	(16,036)
Weighted-average shares used to compute net loss per common share, basic and diluted	13,404,007	2,919,823	13,399,775	1,817,673
Net loss per common share, basic and diluted	$ (0.76)	$ (3.20)	$ (1.66)	$ (10.11)

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	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of diluted net loss per share	2,891,038	2,003,834	2,891,038	2,003,834
Options to Purchase Common Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of diluted net loss per share	2,637,031	1,866,827	2,637,031	1,866,827
Restricted Stock Units [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of diluted net loss per share	117,000		117,000
Warrants to Purchase Common Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of diluted net loss per share	137,007	137,007	137,007	137,007

Subsequent Events - Additional

Subsequent Events - Additional Information (Detail) - Subsequent Event [Member]	Jul. 01, 2016USD ($)
Subsequent Event [Line Items]
Maximum aggregate offering price	$ 100,000,000
Other Non-Current Assets [Member]
Subsequent Event [Line Items]
Offering costs	266,000
Maximum [Member]
Subsequent Event [Line Items]
Maximum aggregate offering price of common stock	$ 25,000,000