Everspin (MRAM) 10-Q 15 May 17 2017 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2017	May 05, 2017
Document And Entity Information
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2017
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q1
Trading Symbol	mram
Entity Registrant Name	EVERSPIN TECHNOLOGIES INC
Entity Central Index Key	1,438,423
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		12,509,647

Condensed Balance Sheets

Condensed Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Current assets:
Cash and cash equivalents	$ 24,492	$ 29,727
Accounts receivable, net	2,657	3,170
Amounts due from related parties	523	486
Inventory	5,824	5,069
Prepaid expenses and other current assets	839	1,050
Total current assets	34,335	39,502
Property and equipment, net	3,123	1,920
Other assets	61	50
Total assets	37,519	41,472
Current liabilities:
Accounts payable	3,140	1,502
Accrued liabilities	1,926	1,811
Amounts due to related parties	2,076	1,359
Deferred income on shipments to distributors	1,470	1,827
Current portion of long-term debt	3,910	3,884
Total current liabilities	12,522	10,383
Long-term debt, net of current portion	3,517	4,218
Total liabilities	16,039	14,601
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.0001 par value per share; 5,000,000 shares authorized as of March 31, 2017 and December 31, 2016; no shares issued and outstanding as of March 31, 2017 and December 31, 2016
Common stock, $0.0001 par value per share; 100,000,000 shares authorized as of March 31, 2017 and December 31, 2016; 12,500,178 and 12,498,128 shares issued and outstanding as of March 31, 2017 and December 31, 2016	1	1
Additional paid-in capital	124,004	123,309
Accumulated deficit	(102,525)	(96,439)
Total stockholders' equity	21,480	26,871
Total liabilities and stockholders' equity	$ 37,519	$ 41,472

Condensed Balance Sheets (Paren

Condensed Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2017	Dec. 31, 2016
Statement of Financial Position [Abstract]
Preferred Stock, Par Value	$ 0.0001	$ 0.0001
Preferred Stock, Shares Authorized	5,000,000	5,000,000
Preferred Stock, Shares Issued	0	0
Preferred Stock, Shares Outstanding	0	0
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	12,500,178	12,498,128
Common stock, shares outstanding	12,500,178	12,498,128

Condensed Statements of Operati

Condensed Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Income Statement [Abstract]
Product sales (including related party sales of $572, and $734 for the three months ended March 31, 2017 and 2016)	$ 7,220	$ 6,126
Licensing and royalty revenue (including related party revenue of $569 and zero for the three months ended March 31, 2017 and 2016, respectively)	660	81
Total revenue	7,880	6,207
Cost of sales	3,663	2,545
Gross profit	4,217	3,662
Operating expenses:
Research and development	6,389	5,137
General and administrative	2,845	1,715
Sales and marketing	858	827
Total operating expenses	10,092	7,679
Loss from operations	(5,875)	(4,017)
Interest expense	(230)	(466)
Other income (expense), net	19	(57)
Net loss and comprehensive loss	$ (6,086)	$ (4,540)
Net loss per common share, basic and diluted	$ (0.49)	$ (1.78)
Weighted-average shares used to compute net loss per common share, basic and diluted	12,299,981	2,553,765

Condensed Statements of Operat5

Condensed Statements of Operations and Comprehensive Loss (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Product sales	$ 7,220	$ 6,126
Licensing and royalty revenue	660	81
Related Party
Product sales	572	734
Licensing and royalty revenue	$ 569	$ 0

Condensed Statement of Cash Flo

Condensed Statement of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Cash flows from operating activities
Net loss	$ (6,086)	$ (4,540)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	232	196
Loss on disposal of property and equipment		80
Stock-based compensation	431	111
Change in fair value of redeemable convertible preferred stock warrant liability		46
Change in fair value of derivative liability		8
Non-cash interest expense	59	266
Compensation expense related to vesting of common stock to GLOBALFOUNDRIES	255	520
Changes in operating assets and liabilities:
Accounts receivable	513	392
Amounts due from related parties	(37)	(729)
Inventory	(755)	27
Prepaid expenses and other current assets	211	(468)
Other assets	(11)	4
Accounts payable	695	(871)
Accrued liabilities	93	959
Amounts due to related parties	717	1,428
Deferred income on shipments to distributors	(357)	160
Deferred revenue		(229)
Net cash used in operating activities	(4,040)	(2,640)
Cash flows from investing activities
Purchases of property and equipment	(470)	(67)
Net cash used in investing activities	(470)	(67)
Cash flows from financing activities
Proceeds from convertible promissory notes-related party		5,000
Proceeds from debt		1,500
Payments on debt	(727)
Payments of debt issuance costs		(15)
Payments on capital lease obligation	(7)	(55)
Proceeds from exercise of stock options	9	9
Net cash (used in) provided by financing activities	(725)	6,439
Net (decrease) increase in cash and cash equivalents	(5,235)	3,732
Cash and cash equivalents at beginning of period	29,727	2,307
Cash and cash equivalents at end of period	24,492	6,039
Supplementary cash flow information:
Interest paid	171	$ 35
Non-cash investing and financing activities:
Purchase of property and equipment in accounts payable	$ 965

Organization and Nature of Busi

Organization and Nature of Business	3 Months Ended
	Mar. 31, 2017
Organization and Nature of Business
Organization and Nature of Business	1. Organization and Nature of Business Everspin Technologies, Inc. (the “Company”) was incorporated in Delaware on May 16, 2008. The Company’s MRAM solutions offer the persistence of non-volatile memory with the speed and endurance of random access memory (“RAM”) and enable the protection of mission critical data particularly in the event of power interruption or failure. The Company’s MRAM solutions allow its customers in the industrial, automotive and transportation, and enterprise storage markets to design high performance, power efficient and reliable systems without the need for bulky batteries or capacitors. Ability to continue as a going concern The Company believes that its existing cash and cash equivalents as of March 31, 2017, together with the additional borrowings available under its credit facility, will be sufficient to meet its anticipated cash requirements through May 31, 2018. The Company’s ability to access the revolving loan under its credit facility depends upon levels of its accounts receivable and, therefore, the full amount may not be available at any specific time. The Company’s future capital requirements beyond May 2018 will depend on many factors, including its growth rate, the timing and extent of its spending to support research and development activities, the timing and cost of establishing additional sales and marketing capabilities, and the introduction of new products. The Company may be required to seek additional equity or debt financing, and such additional financing may not be available on acceptable terms or at all. If the Company is unable to raise additional capital or generate sufficient cash from operations to adequately fund its operations, it will need to curtail planned activities to reduce costs. Doing so will likely harm its ability to execute on its business plan. If the Company raises additional funds through issuances of equity, convertible debt securities or other securities convertible into equity, its existing stockholders could suffer significant dilution in their percentage ownership of the Company, and any new equity securities issued could have rights, preferences and privileges senior to those of holders of common stock. If the Company is unable to obtain adequate financing or financing on satisfactory terms, when required, its ability to continue to grow or support its business and to respond to business challenges could be significantly limited.

Summary of Significant Accounti

Summary of Significant Accounting Policies	3 Months Ended
	Mar. 31, 2017
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies	2. Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by GAAP have been condensed or omitted, and accordingly the balance sheet as of December 31, 2016 has been derived from the audited financial statements at that date but does not include all of the information required by GAAP for complete financial statements. These unaudited interim condensed financial statements have been prepared on the same basis as the Company’s annual financial statements and, in the opinion of management, reflect all adjustments (consisting only of normal recurring adjustments) that are necessary for a fair statement of the Company’s financial information. The results of operations for the three months ended March 31, 2017 are not necessarily indicative of the results to be expected for the year ending December 31, 2017 or for any other interim period or for any other future year. The accompanying condensed financial statements and related financial information should be read in conjunction with the audited financial statements and the related notes thereto for the year ended December 31, 2016, included in the Company’s Annual Report on Form 10-K filed with the SEC. Use of Estimates The preparation of the condensed financial statements in conformity with 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 condensed 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, common stock, and stock-based compensation. Actual results could differ from those estimates and assumptions. Concentration of Credit Risk Financial instruments that potentially expose the Company to a concentration of credit risk consist principally of cash and cash equivalents that are held by a financial institution in the United States and accounts receivable. Amounts on deposit with a financial institution may at times exceed federally insured limits. The Company maintains its cash accounts with high credit quality financial institutions and, accordingly, minimal credit risk exists with respect to the financial institutions. Significant customers are those which represent more than 10% of the Company’s total revenue or gross accounts receivable balance at each respective balance sheet date. For the purposes of this disclosure, the Company defines “customer” as the entity that is purchasing the products directly from the Company, which includes the distributors of the Company’s products in addition to end customers that the Company sells to directly. For each significant customer, revenue as a percentage of total revenue and accounts receivable as a percentage of total accounts receivable, net are as follows: Revenue Accounts Receivable, net Three Months Ended March 31, As of March 31, As of December 31, Customers 2017 2016 2017 2016 Customer A 18 % 29 % 10 % 12 % Customer B * % 12 % 16 % 13 % Customer C 13 % * % 18 % 10 % Customer D 10 % * % * % 18 % * Fair Value of Financial Instruments 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 carrying value of accounts receivable, accounts payable, and other accruals readily convertible into cash approximate fair value because of the short-term nature of the instruments. The carrying value of the Company’s variable interest rate debt, excluding unamortized debt issuance costs, approximates fair value. The Company’s financial instruments consist of Level 1 assets. 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 equivalents. The following table sets forth the fair value of the Company’s financial assets measured at fair value on a recurring basis based on the three-tier fair value hierarchy (in thousands): March 31, 2017 Level 1 Level 2 Level 3 Total Assets: Money market funds $ 24,617 $ — $ — $ 24,617 Total assets measured at fair value $ 24,617 $ — $ — $ 24,617 December 31, 2016 Level 1 Level 2 Level 3 Total Assets: Money market funds $ 29,869 $ — $ — $ 29,869 Total assets measured at fair value $ 29,869 $ — $ — $ 29,869 Revenue Recognition The Company recognizes revenue when the following criteria are met: persuasive evidence of an arrangement exists; the price is fixed or determinable; delivery has occurred and title passed; and collectability is reasonably assured. For sales to OEMs and contract manufacturers, this occurs generally upon shipment. Provisions for product returns and allowances are recorded in the same period as related revenues. The Company analyzes historical returns, current economic trends and changes in customer demand and acceptance of product when evaluating the adequacy of sales returns and other allowances, which are netted against accounts receivable, as these are processed as credits against future purchases or balances outstanding. The Company sells the majority of its products to its distributors at a uniform list price. However, distributors resell the Company’s products to end customers at a very broad range of individually negotiated price points. Distributors are provided with price concessions subsequent to delivery of product to them depending on their end customer and sales price. These concessions are based on a variety of factors, including customer, product, quantity, geography and competitive differentiation. Price protection rights grant distributors the right to a credit in the event of declines in the price of the Company’s products. Under these circumstances, the Company remits back to the distributor a portion of their original purchase price after the resale transaction is completed in the form of a credit against the distributors’ outstanding accounts receivable balance. The credits are on a per unit basis and are not given to the distributor until the distributor provides information regarding the sale to their end customer. Revenue on shipments to distributors is deferred as the price is not fixed or determinable until delivery has been made by the distributor to its customer and the final sales price has been established. At the time of shipment to distributors, the Company records a trade receivable for the selling price as there is a legally enforceable obligation of the distributor to pay for the product delivered, inventory is reduced by the carrying value of goods shipped, and the net of these amounts, the gross profit, is recorded as deferred income on shipments to distributors on the balance sheet. The amount of gross profit that will be ultimately recognized in the statements of operations on such sales could be lower than the deferred income recorded on the balance sheets as a result of credits granted to distributors from the price protection rights. The Company is unable to estimate the credits to the distributors due to the wide variability of negotiated price concessions granted to them. Thus, a portion of the “deferred income on shipments to distributors” balance represents the amount of distributors’ original purchase price that will be credited back to the distributor in the future. The wide range and variability of negotiated price concessions granted to distributors does not allow the Company to accurately estimate the portion of the balance in the deferred income on shipments to distributor accounts that will be credited back to the distributor. Therefore, the Company does not reduce deferred income on shipments to distributors or accounts receivable by anticipated future price concessions rather, price concessions are recorded against deferred income on shipments to distributors when incurred, which is generally at the time the distributor sells the product. At March 31, 2017, the Company had $2.4 million of deferred revenue and $0.9 million of deferred cost of sales, resulting in the recognition of $1.5 million of deferred income on shipments to distributors. At December 31, 2016, the Company had $2.9 million of deferred revenue and $1.1 million of deferred cost of sales, resulting in the recognition of $1.8 million of deferred income on shipments to distributors. Products returned by distributors and subsequently scrapped have historically been immaterial to the Company’s results of operations. The Company routinely evaluates the risk of impairment of the deferred cost of sales component of the deferred income on shipments to distributors account. Because of the historically immaterial amounts of inventory that have been scrapped, and historically rare instances where discounts given to a distributor result in a price less than our cost, the Company believes the deferred costs are recorded at their approximate carrying values. For licenses of technology, recognition of revenue is dependent upon whether the Company delivered rights to the technology, and whether there are future performance obligations. In some instances, the license agreements call for future milestones to be met for amounts to be due from the customer. In such scenarios, revenue is recognized using the milestone method, whereby revenue is recognized upon the completion of substantive milestones once the customers acknowledge the milestones have been met and the collection of the amounts are reasonably assured. Royalties received are recognized when reported to the Company, which generally coincides with the receipt of payment. 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 for 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 is anti-dilutive. Recently Issued Pronouncements In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014‑09, Revenue from Contracts with Customers. Areas of revenue recognition that will be affected include, but are not limited to, transfer of control, variable consideration, allocation of transfer pricing, licenses, time value of money, contract costs and disclosures. The new standard permits adoption either by using (i) a full retrospective approach for all periods presented in the period of adoption or (ii) a modified retrospective approach with the cumulative effect of initially applying the new standard recognized at the date of initial application and providing certain additional disclosures. The new standard is effective for annual reporting periods beginning after December 15, 2017, with early adoption permitted for annual reporting periods beginning after December 15, 2016. As described in the Company's significant accounting policies, the Company currently defers the revenue and cost of sales on shipments to distributors until the distributor sells the product to their end customer. Upon adoption of ASU 2014-09, and subsequent improvements including ASU 2015-14, Deferral of Effective Date, ASU 2016-08, Principal versus Agent Considerations, ASU 2016-10, Identifying Performance Obligations and Licensing, and ASU 2016-12, Narrow Scope Improvements and Practical Expedients, the Company will no longer defer revenue until sale by the distributor to the end customer, but rather, will be required to estimate the effects of returns and allowances provided to distributors and record revenue at the time of sale to the distributor. The Company plans on adopting this standard on January 1, 2018 and is currently evaluating the impact that the adoption of the standard will have on its financial statements. The Company has not yet elected a transition method. Recently Adopted Pronouncements In July 2015, the FASB issued ASU No. 2015‑11, Simplifying the Measurement of Inventory, which requires an entity to measure in scope inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. This ASU is effective for fiscal years and interim periods within those years beginning after December 15, 2016. The Company adopted this standard as of January 1, 2017 and the impact of its adoption on the Company’s financial statements was not material. In November 2015, FASB issued ASU No. 2015‑17, Balance Sheet Classification of Deferred Taxes, which is intended to simplify and improve how deferred taxes are classified on the balance sheet. The guidance in this ASU eliminates the current requirement to present deferred tax assets and liabilities as current and noncurrent in a classified balance sheet and now requires entities to classify all deferred tax assets and liabilities as noncurrent. The guidance is effective for annual periods beginning after December 15, 2016, and for interim periods within those annual periods. Early adoption is permitted. The Company adopted this standard as of January 1, 2017 and the impact of its adoption on the Company’s financial statements was not material. In March 2016, the FASB issued ASU No. 2016‑09, Compensation-Stock Compensation (Topic 718) Improvements to Employee Share-Based Payment Accounting, which is intended to simplify several aspects of the accounting for employee share-based payment transactions, including the income tax consequences, the determination of forfeiture rates, classification of awards as either equity or liabilities, and classification on the statement of cash flows. This ASU is effective for fiscal years and interim periods within those years beginning after December 15, 2016, and early adoption is permitted. The Company adopted this standard as of January 1, 2017 and the impact of its adoption on the Company’s financial statements was not material.

Balance Sheet Components

Balance Sheet Components	3 Months Ended
	Mar. 31, 2017
Balance Sheet Components
Balance Sheet Components	3. Balance Sheet Components Inventory Inventory consisted of the following (in thousands): March 31, December 31, 2017 2016 Raw materials $ 685 $ 853 Work-in-process 3,739 3,152 Finished goods 1,400 1,064 Total inventory $ 5,824 $ 5,069 Accrued Liabilities Accrued liabilities consisted of the following (in thousands): March 31, December 31, 2017 2016 Accrued payroll-related expenses $ 733 $ 1,045 Accrued manufacturing-related costs 120 — Deferred licensing revenue 167 229 Deferred rent 258 248 Accrued sales commissions payable to sales representatives 87 193 Other 561 96 Total accrued liabilities $ 1,926 $ 1,811

Commitments and Contingencies

Commitments and Contingencies	3 Months Ended
	Mar. 31, 2017
Commitments and Contingencies.
Commitments and Contingencies	4. Commitments and Contingencies Operating Leases The Company leases office space for its corporate headquarters located in Chandler, Arizona and for its design facility located in Austin, Texas. The leases expire in October 2018 and January 2022, respectively. Rent expense is recognized on a straight-line basis over the term of the leases and accordingly, the Company records the difference between cash rent payments and the recognition of rent expense as a deferred rent liability. In January 2017, the Company entered into a five-year sublease agreement with Freescale, a related party, to rent 6,560 square feet of office and laboratory space in Chandler, Arizona, and in March 2017, the Company amended the sublease to increase the space to 10,023 square feet. The Company has an operating lease for its Arizona manufacturing facility, as amended, for certain of the fabrication, laboratory and office premises of Freescale. In March 2017, the Company extended the lease through January 28, 2019 and amended the premises covered to remove laboratory space, decrease fabrication space and expand office space.

Debt and Related Warrants

Debt and Related Warrants	3 Months Ended
	Mar. 31, 2017
Debt and Related Warrants
Debt and Related Warrants	5. Debt and Related Warrants The carrying value of the Company’s 2015 Credit Facility at March 31, 2017 was as follows (in thousands): Current Long-Term Portion debt Total Debt, including end of term fee $ 4,054 3,574 $ 7,628 Less: Discount attributable to warrants, end of term fee and debt issuance costs (144) (57) (201) Net carrying value of debt $ 3,910 $ 3,517 $ 7,427 The carrying value of the Company’s 2015 Credit Facility at December 31, 2016 was as follows (in thousands): Current Long-Term Portion debt Total Debt, including end of term fee $ 4,054 $ 4,301 $ 8,355 Less: Discount attributable to warrants, end of term fee and debt issuance costs (177) (83) (260) Net carrying value of debt $ 3,877 $ 4,218 $ 8,095

Stock-Based Compensation

Stock-Based Compensation	3 Months Ended
	Mar. 31, 2017
Stock-Based Compensation
Stock-Based Compensation	6. Stock-Based Compensation The following table summarizes the stock option activity for the three months ended March 31, 2017: Options Outstanding Weighted- Weighted- Average Average Options Exercise Remaining Aggregate Available for Number of Price Per Contractual Intrinsic Grant Options Share Life (years) Value (In thousands) Balance—December 31, 2016 342,500 1,414,730 $ 5.28 7.6 $ 4,267 Options granted (74,000) 74,000 7.88 Options exercised — (2,050) 4.42 $ 8 Options cancelled/forfeited 5,048 (5,048) 4.97 Balance—March 31, 2017 273,548 1,481,632 $ 5.41 7.5 $ 4,406 Options exercisable—March 31, 2017 773,583 $ 4.55 6.0 $ 2,963 Options vested and expected to vest—March 31, 2017 1,481,634 $ 5.41 7.5 $ 4,406 The total grant date fair value of options vested was $107,000 and $103,000 during the three months ended March 31, 2017 and 2016, respectively. The weighted-average grant date fair value of employee options granted during the three months ended March 31, 2017 was $3.69 per share. The Company did not grant any options in the three months ended March 31, 2016. 2016 Employee Incentive Plan The Company’s board of directors adopted the 2016 Equity Incentive Plan (the “2016 Plan”) on April 25, 2016, which was subsequently approved on September 20, 2016 by the Company’s stockholders. The 2016 Plan became effective on October 7, 2016, the date the Company’s registration statement was declared effective by the SEC. No further grants will be made under the Company’s 2008 Equity Incentive Plan (the “2008 Plan”). However, any outstanding stock awards granted under the 2008 Plan will remain outstanding, subject to the terms of the Company’s 2008 Plan and the applicable stock award agreements, until such outstanding stock awards that are stock options are exercised or until they terminate or expire by their terms, or until such stock awards are fully settled, terminated or forfeited. The Company’s 2016 Plan provides for the grant of incentive stock options (“ISOs”), non-statutory stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, performance-based stock awards, and other forms of equity compensation to employees, directors and consultants. In addition, the Company’s 2016 Plan provides for the grant of performance cash awards to employees, directors and consultants. The maximum number of shares of common stock that may be issued under the Company’s 2016 Plan is 500,000. The number of shares of common stock reserved for issuance under the Company’s 2016 Plan will automatically increase on January 1 of each year, beginning on January 1, 2017, and continuing through and including January 1, 2024, by 3% of the total number of shares of capital stock outstanding on December 31 of the preceding calendar year, or a lesser number of shares determined by the Company’s board of directors. 2016 Employee Stock Purchase Plan The Company’s board of directors adopted the 2016 Employee Stock Purchase Plan (the “ESPP”) on April 25, 2016, which was subsequently approved on September 20, 2016 by the Company’s stockholders. The purpose of the ESPP is to secure the services of new employees, to retain the services of existing employees and to provide incentives for such individuals to exert maximum efforts toward the Company’s success and that of the Company’s affiliates. The ESPP is intended to qualify as an “employee stock purchase plan” within the meaning of Section 423 of the Internal Revenue Code. The board of directors, or a duly authorized committee thereof, will administer the Company’s ESPP. The maximum aggregate number of shares of common stock that may be issued pursuant to the exercise of purchase rights under the Company’s ESPP that are granted to employees or to employees of any of the Company’s designated affiliates is 96,153 shares. Additionally, the number of shares of common stock reserved for issuance under the Company’s ESPP will increase automatically each year, beginning on January 1, 2017, and continuing through and including January 1, 2026, by 1% of the total number of shares of common stock outstanding on December 31 of the preceding calendar year, or a lesser number as determined by the board of directors. Shares subject to purchase rights granted under the Company’s ESPP that terminate without having been exercised in full will not reduce the number of shares available for issuance under the Company’s ESPP. The first purchase period under the 2016 ESPP commenced on October 12, 2016 and ended on April 12, 2017. Stock-based Compensation Expense The Company recognized stock-based compensation expense from options granted to employees and non-employees and from its ESPP as follows, exluding amounts related to GLOBALFOUNDRIES, Inc. (“GF”) (in thousands): Three Months Ended March 31, 2017 2016 Research and development $ 172 $ 45 General and administrative 226 54 Sales and marketing 33 12 Total $ 431 $ 111 As of March 31, 2017, there was $3.2 million of total unrecognized compensation expense related to unvested options which is expected to be recognized over a weighted-average period of 2.8 years. Employee Stock-based Compensation Stock-based compensation expense for employees was $384,000 and $105,000 for the three months ended March 31, 2017 and 2016, respectively. The Company estimated the fair value of each option using the Black-Scholes option-pricing model. The fair value of employee stock options is being amortized on a straight-line basis over the requisite service period of the awards. The fair value of employee stock options was estimated using the assumptions below. Each of these inputs is subjective and its determination generally requires significant judgment. Three Months Ended March 31, 2017 2016 Expected volatility 47.2 - 47.3 % — Risk-free interest rate 2.0 - 2.1 % — Expected term (in years) 5.8 - 6.0 — Dividend yield — % — Non-employee Stock-based Compensation Stock-based compensation expense related to stock options granted to non-employees is recognized as the stock options vest. No stock options were granted to non-employees during the three months ended March 31, 2017 and 2016. As of March 31, 2017, options to purchase 31,990 shares of common stock were outstanding with a weighted-average exercise price of $5.26 per share. Stock-based compensation expense for non-employees was $11,000 and $6,000 for the three months ended March 31, 2017 and 2016, respectively.

Related Party Transactions

Related Party Transactions	3 Months Ended
	Mar. 31, 2017
Related Party Transactions
Related Party Transactions	7. Related Party Transactions Joint Development Agreement—GLOBALFOUNDRIES On October 17, 2014, the Company entered into a Joint Development Agreement (“JDA”) with GF, a related party due to its equity ownership in the Company, for the joint development of the Company’s Spin Torque MRAM (“ST-MRAM”) technology. The term of the agreement is the later of four years from the effective date or until the completion, termination or expiration of the last statement of work entered into pursuant to the JDA. The JDA also states that the specific terms and conditions for the production and supply of the developed ST-MRAM technology would be pursuant to a separate manufacturing agreement entered into between the parties. Under the JDA, each party licenses its relevant intellectual property to the other party. For certain jointly developed works, the parties have agreed to follow an invention allocation procedure to determine ownership. In addition, GF possesses the exclusive right to manufacture the Company’s discrete and embedded ST-MRAM devices developed pursuant to the agreement until the earlier of three years after the qualification of the MRAM device for a particular technology node or four years after the completion of the relevant statement of work under which the device was developed. For the same exclusivity period associated with the relevant device, GF agreed not to license intellectual property developed in connection with the JDA to named competitors of the Company. Generally, unless otherwise specified in the agreement or a statement of work, the Company and GF share project costs, which do not include personnel or production qualification costs, equally under the JDA. If GF manufactures, sells or transfers to customers wafers containing production quantified ST-MRAM devices that utilize certain design information, GF will be required to pay the Company a royalty. The term of the agreement is four years and is extended until the completion of any development work, if later. In May 2016, the Company entered into an amendment to the JDA to modify the payment schedule and clarify its payment obligations for certain past project costs. Under the amendment, GF has the right to terminate the JDA if the Company does not pay the project costs, with interest, by December 15, 2016. Such project costs were paid in December 2016. As of March 31, 2017, $24,000 was receivable from GF. There were no amounts receivable from GF as of December 31, 2016. As of March 31, 2017 and December 31, 2016, $1.3 million and $979,000, respectively, were payable to GF for the Company’s share of the project costs under the JDA. The Company incurred project costs, recognized as research and development expense, of $1.9 million and $880,000 for the three months ended March 31, 2017 and 2016 respectively. The Company recognized revenue of $569,000 from GF for the three months ended March 31, 2017, for a milestone that was earned in the first quarter of 2017. There was no revenue from GF for the three months ended March 31, 2016. On October 21, 2014, GF participated, along with other investors, in the Company’s Series B redeemable convertible preferred stock financing and purchased 192,307 shares at $26.00 per share. Contemporaneously, the Company sold 461,538 shares of its common stock to GF at a discounted price of $0.00026 per share. The common shares vest upon the achievement of a goal as set forth in the Statement of Work #1 (the “SOW”) under the JDA. The unvested common shares are subject to repurchase by the Company, if the JDA is terminated for any reason, for a one-year period after such termination, at a price that is the lower of the original price paid by GF or the fair value of the Company’s common stock as of the date of repurchase. The Company has determined that the issuance of these shares of common stock to GF represents compensation for services to be provided under the JDA. Accordingly, the shares are accounted for similar to a stock award granted to a non-employee of the Company and are remeasured to their fair value as they vest. Although the shares issued do not commence vesting until the achievement of the product qualification (the “Initial Measurement Date”), the Company has deemed it probable that the qualification requirement will be met and compensation expense related to the shares issued is being recognized prior to the Initial Measurement Date. Due to the vesting conditions, there will be multiple measurement dates, occurring on the Initial Measurement Date and at the end of each month thereafter. The fair value of vesting shares is effectively fixed at each measurement date while the fair value of the remaining unvested shares will be remeasured each subsequent measurement date until the shares are fully vested. During the year ended December 31, 2016, GF achieved the product qualification as set forth under the SOW. As such, a total of 211,538 shares of common stock became vested on August 21, 2016, the designated Initial Measurement Date. Subsequent to the Initial Measurement Date through March 31, 2017, an additional 28,846 shares of common stock became vested. As of March 31, 2017, there were 182,692 shares unvested that were subject to repurchase. The Company recognized non-cash compensation expense of $255,000 and $520,000 during the three months ended March 31, 2017 and 2016, respectively, in research and development expense related to the vesting of the shares of common stock. The Company recognizes compensation expense based on the estimated fair value of the common stock at each reporting period, which was $8.38 and $8.29 per share as of March 31, 2017 and December 31, 2016, respectively. Transactions with Freescale The Company has entered into various transactions with Freescale (a wholly-owned subsidiary of NXP), a related party due to its equity ownership in the Company. The Company leases its manufacturing facility in Chandler, Arizona, from Freescale and total rent payments made were $289,000 and $257,000 during the three months ended March 31, 2017 and 2016, respectively. Freescale also performs processing of the Company’s products in its facility which are capitalized as part of the cost of inventory. The total processing costs incurred by the Company were $427,000 and $709,000 for the three months ended March 31, 2017 and 2016. In addition, Freescale is one of the Company’s largest customers for the sale of embedded wafers, and total revenue from Freescale was $572,000 and $734,000 during the three months ended March 31, 2017 and 2016, respectively. In the three months ended March 31, 2017, the Company purchased wafers for its Condor product from Freescale for $168,000 which are included in inventory as of March 31, 2017. Amounts due from Freescale were $499,000 and $486,000 at March 31, 2017 and December 31, 2016, respectively. Amounts due to Freescale were $759,000 and $380,000 at March 31, 2017, and December 31, 2016, respectively.

Net Loss Per Common Share

Net Loss Per Common Share	3 Months Ended
	Mar. 31, 2017
Net Loss Per Common Share
Net Loss Per Common Share	8. Net Loss Per Common Share The following table sets forth the computation of basic and diluted net loss per share (in thousands, except share and per share amounts): Three Months Ended March 31, 2017 2016 Numerator: Net loss $ (6,086) $ (4,540) Denominator: Weighted-average common shares outstanding 12,498,698 3,015,303 Less: weighted-average unvested common shares subjected to repurchase (198,717) (461,538) Weighted-average common shares outstanding used to calculate net loss per common share, basic and diluted 12,299,981 2,553,765 Net loss per common share, basic and diluted $ (0.49) $ (1.78) The following outstanding shares of potentially dilutive securities have been excluded from diluted net loss per common share for the periods presented, because their inclusion would be anti-dilutive: Three Months Ended March 31, 2017 2016 Redeemable convertible preferred stock on an as-converted basis — 2,486,199 Options to purchase common stock 1,481,632 878,948 Common stock subject to repurchase 182,692 461,538 Redeemable convertible preferred stock warrants on an as-converted basis — 27,690 Common stock warrants 27,690 — Total 1,692,014 3,854,375

Subsequent Events

Subsequent Events	3 Months Ended
	Mar. 31, 2017
Subsequent Events
Subsequent Events	9. Subsequent Events In April 2017, the Company repaid the outstanding balance of $1.5 million on the revolving loan included in the 2015 Credit Facility. In May 2017, the Company executed a Loan and Security Agreement with Silicon Valley Bank for a $12.0 million term loan. The term of the loan is three years, and will be extended by one year if the Company achieves a revenue target of $4.0 million for its Spin-Torque product. The loan bears interest at a floating rate equal to the prime rate minus 0.75% and is payable monthly. The outstanding balance of the loan is to be repaid monthly beginning on May 1, 2018 over the remaining term of the loan. The loan is secured by a first priority perfected security interest in the Company’s assets excluding any intellectual property. A portion of the proceeds was used to pay off the outstanding balance on the Amended 2015 Credit Facility.

Summary of Significant Accoun16

Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2017
Summary of Significant Accounting Policies
Basis of Presentation	Basis of Presentation The accompanying unaudited condensed financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by GAAP have been condensed or omitted, and accordingly the balance sheet as of December 31, 2016 has been derived from the audited financial statements at that date but does not include all of the information required by GAAP for complete financial statements. These unaudited interim condensed financial statements have been prepared on the same basis as the Company’s annual financial statements and, in the opinion of management, reflect all adjustments (consisting only of normal recurring adjustments) that are necessary for a fair statement of the Company’s financial information. The results of operations for the three months ended March 31, 2017 are not necessarily indicative of the results to be expected for the year ending December 31, 2017 or for any other interim period or for any other future year. The accompanying condensed financial statements and related financial information should be read in conjunction with the audited financial statements and the related notes thereto for the year ended December 31, 2016, included in the Company’s Annual Report on Form 10-K filed with the SEC.
Use of Estimates	Use of Estimates The preparation of the condensed financial statements in conformity with 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 condensed 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, common stock, and stock-based compensation. Actual results could differ from those estimates and assumptions.
Concentration of Credit Risk	Concentration of Credit Risk Financial instruments that potentially expose the Company to a concentration of credit risk consist principally of cash and cash equivalents that are held by a financial institution in the United States and accounts receivable. Amounts on deposit with a financial institution may at times exceed federally insured limits. The Company maintains its cash accounts with high credit quality financial institutions and, accordingly, minimal credit risk exists with respect to the financial institutions. Significant customers are those which represent more than 10% of the Company’s total revenue or gross accounts receivable balance at each respective balance sheet date. For the purposes of this disclosure, the Company defines “customer” as the entity that is purchasing the products directly from the Company, which includes the distributors of the Company’s products in addition to end customers that the Company sells to directly. For each significant customer, revenue as a percentage of total revenue and accounts receivable as a percentage of total accounts receivable, net are as follows: Revenue Accounts Receivable, net Three Months Ended March 31, As of March 31, As of December 31, Customers 2017 2016 2017 2016 Customer A 18 % 29 % 10 % 12 % Customer B * % 12 % 16 % 13 % Customer C 13 % * % 18 % 10 % Customer D 10 % * % * % 18 % *
Fair Value of Financial Instruments	Fair Value of Financial Instruments 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 carrying value of accounts receivable, accounts payable, and other accruals readily convertible into cash approximate fair value because of the short-term nature of the instruments. The carrying value of the Company’s variable interest rate debt, excluding unamortized debt issuance costs, approximates fair value. The Company’s financial instruments consist of Level 1 assets. 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 equivalents. The following table sets forth the fair value of the Company’s financial assets measured at fair value on a recurring basis based on the three-tier fair value hierarchy (in thousands): March 31, 2017 Level 1 Level 2 Level 3 Total Assets: Money market funds $ 24,617 $ — $ — $ 24,617 Total assets measured at fair value $ 24,617 $ — $ — $ 24,617 December 31, 2016 Level 1 Level 2 Level 3 Total Assets: Money market funds $ 29,869 $ — $ — $ 29,869 Total assets measured at fair value $ 29,869 $ — $ — $ 29,869
Revenue Recognition	Revenue Recognition The Company recognizes revenue when the following criteria are met: persuasive evidence of an arrangement exists; the price is fixed or determinable; delivery has occurred and title passed; and collectability is reasonably assured. For sales to OEMs and contract manufacturers, this occurs generally upon shipment. Provisions for product returns and allowances are recorded in the same period as related revenues. The Company analyzes historical returns, current economic trends and changes in customer demand and acceptance of product when evaluating the adequacy of sales returns and other allowances, which are netted against accounts receivable, as these are processed as credits against future purchases or balances outstanding. The Company sells the majority of its products to its distributors at a uniform list price. However, distributors resell the Company’s products to end customers at a very broad range of individually negotiated price points. Distributors are provided with price concessions subsequent to delivery of product to them depending on their end customer and sales price. These concessions are based on a variety of factors, including customer, product, quantity, geography and competitive differentiation. Price protection rights grant distributors the right to a credit in the event of declines in the price of the Company’s products. Under these circumstances, the Company remits back to the distributor a portion of their original purchase price after the resale transaction is completed in the form of a credit against the distributors’ outstanding accounts receivable balance. The credits are on a per unit basis and are not given to the distributor until the distributor provides information regarding the sale to their end customer. Revenue on shipments to distributors is deferred as the price is not fixed or determinable until delivery has been made by the distributor to its customer and the final sales price has been established. At the time of shipment to distributors, the Company records a trade receivable for the selling price as there is a legally enforceable obligation of the distributor to pay for the product delivered, inventory is reduced by the carrying value of goods shipped, and the net of these amounts, the gross profit, is recorded as deferred income on shipments to distributors on the balance sheet. The amount of gross profit that will be ultimately recognized in the statements of operations on such sales could be lower than the deferred income recorded on the balance sheets as a result of credits granted to distributors from the price protection rights. The Company is unable to estimate the credits to the distributors due to the wide variability of negotiated price concessions granted to them. Thus, a portion of the “deferred income on shipments to distributors” balance represents the amount of distributors’ original purchase price that will be credited back to the distributor in the future. The wide range and variability of negotiated price concessions granted to distributors does not allow the Company to accurately estimate the portion of the balance in the deferred income on shipments to distributor accounts that will be credited back to the distributor. Therefore, the Company does not reduce deferred income on shipments to distributors or accounts receivable by anticipated future price concessions rather, price concessions are recorded against deferred income on shipments to distributors when incurred, which is generally at the time the distributor sells the product. At March 31, 2017, the Company had $2.4 million of deferred revenue and $0.9 million of deferred cost of sales, resulting in the recognition of $1.5 million of deferred income on shipments to distributors. At December 31, 2016, the Company had $2.9 million of deferred revenue and $1.1 million of deferred cost of sales, resulting in the recognition of $1.8 million of deferred income on shipments to distributors. Products returned by distributors and subsequently scrapped have historically been immaterial to the Company’s results of operations. The Company routinely evaluates the risk of impairment of the deferred cost of sales component of the deferred income on shipments to distributors account. Because of the historically immaterial amounts of inventory that have been scrapped, and historically rare instances where discounts given to a distributor result in a price less than our cost, the Company believes the deferred costs are recorded at their approximate carrying values. For licenses of technology, recognition of revenue is dependent upon whether the Company delivered rights to the technology, and whether there are future performance obligations. In some instances, the license agreements call for future milestones to be met for amounts to be due from the customer. In such scenarios, revenue is recognized using the milestone method, whereby revenue is recognized upon the completion of substantive milestones once the customers acknowledge the milestones have been met and the collection of the amounts are reasonably assured. Royalties received are recognized when reported to the Company, which generally coincides with the receipt of payment.
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 for 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 is anti-dilutive.
Recent Accounting Pronouncements	Recently Issued Pronouncements In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014‑09, Revenue from Contracts with Customers. Areas of revenue recognition that will be affected include, but are not limited to, transfer of control, variable consideration, allocation of transfer pricing, licenses, time value of money, contract costs and disclosures. The new standard permits adoption either by using (i) a full retrospective approach for all periods presented in the period of adoption or (ii) a modified retrospective approach with the cumulative effect of initially applying the new standard recognized at the date of initial application and providing certain additional disclosures. The new standard is effective for annual reporting periods beginning after December 15, 2017, with early adoption permitted for annual reporting periods beginning after December 15, 2016. As described in the Company's significant accounting policies, the Company currently defers the revenue and cost of sales on shipments to distributors until the distributor sells the product to their end customer. Upon adoption of ASU 2014-09, and subsequent improvements including ASU 2015-14, Deferral of Effective Date, ASU 2016-08, Principal versus Agent Considerations, ASU 2016-10, Identifying Performance Obligations and Licensing, and ASU 2016-12, Narrow Scope Improvements and Practical Expedients, the Company will no longer defer revenue until sale by the distributor to the end customer, but rather, will be required to estimate the effects of returns and allowances provided to distributors and record revenue at the time of sale to the distributor. The Company plans on adopting this standard on January 1, 2018 and is currently evaluating the impact that the adoption of the standard will have on its financial statements. The Company has not yet elected a transition method. Recently Adopted Pronouncements In July 2015, the FASB issued ASU No. 2015‑11, Simplifying the Measurement of Inventory, which requires an entity to measure in scope inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. This ASU is effective for fiscal years and interim periods within those years beginning after December 15, 2016. The Company adopted this standard as of January 1, 2017 and the impact of its adoption on the Company’s financial statements was not material. In November 2015, FASB issued ASU No. 2015‑17, Balance Sheet Classification of Deferred Taxes, which is intended to simplify and improve how deferred taxes are classified on the balance sheet. The guidance in this ASU eliminates the current requirement to present deferred tax assets and liabilities as current and noncurrent in a classified balance sheet and now requires entities to classify all deferred tax assets and liabilities as noncurrent. The guidance is effective for annual periods beginning after December 15, 2016, and for interim periods within those annual periods. Early adoption is permitted. The Company adopted this standard as of January 1, 2017 and the impact of its adoption on the Company’s financial statements was not material. In March 2016, the FASB issued ASU No. 2016‑09, Compensation-Stock Compensation (Topic 718) Improvements to Employee Share-Based Payment Accounting, which is intended to simplify several aspects of the accounting for employee share-based payment transactions, including the income tax consequences, the determination of forfeiture rates, classification of awards as either equity or liabilities, and classification on the statement of cash flows. This ASU is effective for fiscal years and interim periods within those years beginning after December 15, 2016, and early adoption is permitted. The Company adopted this standard as of January 1, 2017 and the impact of its adoption on the Company’s financial statements was not material.

Summary of Significant Accoun17

Summary of Significant Accounting Policies (Tables)	3 Months Ended
	Mar. 31, 2017
Summary of Significant Accounting Policies
Schedule of Revenue and Accounts Receivable for Each Significant Customer	Revenue Accounts Receivable, net Three Months Ended March 31, As of March 31, As of December 31, Customers 2017 2016 2017 2016 Customer A 18 % 29 % 10 % 12 % Customer B * % 12 % 16 % 13 % Customer C 13 % * % 18 % 10 % Customer D 10 % * % * % 18 % *
Schedule of Fair Value of Financial Assets Measured on Recurring Basis	The following table sets forth the fair value of the Company’s financial assets measured at fair value on a recurring basis based on the three-tier fair value hierarchy (in thousands): March 31, 2017 Level 1 Level 2 Level 3 Total Assets: Money market funds $ 24,617 $ — $ — $ 24,617 Total assets measured at fair value $ 24,617 $ — $ — $ 24,617 December 31, 2016 Level 1 Level 2 Level 3 Total Assets: Money market funds $ 29,869 $ — $ — $ 29,869 Total assets measured at fair value $ 29,869 $ — $ — $ 29,869

Balance Sheet Components (Table

Balance Sheet Components (Tables)	3 Months Ended
	Mar. 31, 2017
Balance Sheet Components
Schedule of Inventory	Inventory consisted of the following (in thousands): March 31, December 31, 2017 2016 Raw materials $ 685 $ 853 Work-in-process 3,739 3,152 Finished goods 1,400 1,064 Total inventory $ 5,824 $ 5,069
Schedule of Accrued Liabilities	Accrued liabilities consisted of the following (in thousands): March 31, December 31, 2017 2016 Accrued payroll-related expenses $ 733 $ 1,045 Accrued manufacturing-related costs 120 — Deferred licensing revenue 167 229 Deferred rent 258 248 Accrued sales commissions payable to sales representatives 87 193 Other 561 96 Total accrued liabilities $ 1,926 $ 1,811

Debt and Related Warrants (Tabl

Debt and Related Warrants (Tables)	3 Months Ended
	Mar. 31, 2017
Debt and Related Warrants
Summary of 2015 Credit Facility	The carrying value of the Company’s 2015 Credit Facility at March 31, 2017 was as follows (in thousands): Current Long-Term Portion debt Total Debt, including end of term fee $ 4,054 3,574 $ 7,628 Less: Discount attributable to warrants, end of term fee and debt issuance costs (144) (57) (201) Net carrying value of debt $ 3,910 $ 3,517 $ 7,427 The carrying value of the Company’s 2015 Credit Facility at December 31, 2016 was as follows (in thousands): Current Long-Term Portion debt Total Debt, including end of term fee $ 4,054 $ 4,301 $ 8,355 Less: Discount attributable to warrants, end of term fee and debt issuance costs (177) (83) (260) Net carrying value of debt $ 3,877 $ 4,218 $ 8,095

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	3 Months Ended
	Mar. 31, 2017
Stock-Based Compensation
Summary of Stock Option Activity	Options Outstanding Weighted- Weighted- Average Average Options Exercise Remaining Aggregate Available for Number of Price Per Contractual Intrinsic Grant Options Share Life (years) Value (In thousands) Balance—December 31, 2016 342,500 1,414,730 $ 5.28 7.6 $ 4,267 Options granted (74,000) 74,000 7.88 Options exercised — (2,050) 4.42 $ 8 Options cancelled/forfeited 5,048 (5,048) 4.97 Balance—March 31, 2017 273,548 1,481,632 $ 5.41 7.5 $ 4,406 Options exercisable—March 31, 2017 773,583 $ 4.55 6.0 $ 2,963 Options vested and expected to vest—March 31, 2017 1,481,634 $ 5.41 7.5 $ 4,406
Summary of Stock-Based Compensation Expense	The Company recognized stock-based compensation expense from options granted to employees and non-employees and from its ESPP as follows, exluding amounts related to GLOBALFOUNDRIES, Inc. (“GF”) (in thousands): Three Months Ended March 31, 2017 2016 Research and development $ 172 $ 45 General and administrative 226 54 Sales and marketing 33 12 Total $ 431 $ 111
Schedule of Fair Value Assumptions of Stock Options	Three Months Ended March 31, 2017 2016 Expected volatility 47.2 - 47.3 % — Risk-free interest rate 2.0 - 2.1 % — Expected term (in years) 5.8 - 6.0 — Dividend yield — % —

Net Loss Per Common Share (Tabl

Net Loss Per Common Share (Tables)	3 Months Ended
	Mar. 31, 2017
Net Loss Per Common Share
Computation of Basic and Diluted Net Loss Per Share	The following table sets forth the computation of basic and diluted net loss per share (in thousands, except share and per share amounts): Three Months Ended March 31, 2017 2016 Numerator: Net loss $ (6,086) $ (4,540) Denominator: Weighted-average common shares outstanding 12,498,698 3,015,303 Less: weighted-average unvested common shares subjected to repurchase (198,717) (461,538) Weighted-average common shares outstanding used to calculate net loss per common share, basic and diluted 12,299,981 2,553,765 Net loss per common share, basic and diluted $ (0.49) $ (1.78)
Schedule of Potentially Dilutive Securities Excluded from Diluted Net Loss Per Common Share	Three Months Ended March 31, 2017 2016 Redeemable convertible preferred stock on an as-converted basis — 2,486,199 Options to purchase common stock 1,481,632 878,948 Common stock subject to repurchase 182,692 461,538 Redeemable convertible preferred stock warrants on an as-converted basis — 27,690 Common stock warrants 27,690 — Total 1,692,014 3,854,375

Summary of Significant Accoun22

Summary of Significant Accounting Policies - Schedule of Revenue and Accounts Receivable for Each Significant Customer (Details) - Customer Concentration Risk	3 Months Ended		12 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Revenue | Customer A
Concentration risk
Concentration risk percentage	18.00%	29.00%
Revenue | Customer B
Concentration risk
Concentration risk percentage		12.00%
Revenue | Customer B | Maximum
Concentration risk
Concentration risk percentage	10.00%
Revenue | Customer C
Concentration risk
Concentration risk percentage	13.00%
Revenue | Customer C | Maximum
Concentration risk
Concentration risk percentage		10.00%
Revenue | Customer D | Maximum
Concentration risk
Concentration risk percentage	10.00%	10.00%
Accounts Receivable, net | Customer A
Concentration risk
Concentration risk percentage	10.00%		12.00%
Accounts Receivable, net | Customer B
Concentration risk
Concentration risk percentage	16.00%		13.00%
Accounts Receivable, net | Customer C
Concentration risk
Concentration risk percentage	18.00%		10.00%
Accounts Receivable, net | Customer D
Concentration risk
Concentration risk percentage			18.00%
Accounts Receivable, net | Customer D | Maximum
Concentration risk
Concentration risk percentage	10.00%

Summary of Significant Accoun23

Summary of Significant Accounting Policies - Schedule of Fair Value of Financial Assets and Liabilities Measured on Recurring Basis (Details) - Recurring - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Fair Value
Total assets measured at fair value	$ 24,617	$ 29,869
Level 1
Fair Value
Total assets measured at fair value	24,617	29,869
Money Market Funds
Fair Value
Money market funds	24,617	29,869
Money Market Funds | Level 1
Fair Value
Money market funds	$ 24,617	$ 29,869

Summary of Significant Accoun24

Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Summary of Significant Accounting Policies
Deferred revenue	$ 2,400	$ 2,900
Deferred cost of sales	900	1,100
Deferred income on shipments to distributors	$ 1,470	$ 1,827

Balance Sheet Components - Sche

Balance Sheet Components - Schedule of Inventory (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Inventory
Raw materials	$ 685	$ 853
Work-in-process	3,739	3,152
Finished goods	1,400	1,064
Total inventory	$ 5,824	$ 5,069

Balance Sheet Components - Sc26

Balance Sheet Components - Schedule of Accrued Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Accrued liabilities
Accrued payroll-related expenses	$ 733	$ 1,045
Accrued manufacturing-related costs	120
Deferred licensing revenue	167	229
Deferred rent	258	248
Accrued sales commissions payable to sales representatives	87	193
Other	561	96
Total accrued liabilities	$ 1,926	$ 1,811

Commitments and Contingencies (

Commitments and Contingencies (Details) - Office and Laboratory Space - Freescale - ft²	1 Months Ended
	Mar. 31, 2017	Jan. 31, 2017
Term of lease (in years)		5 years
Area of operating lease (in sq feet)	10,023	6,560

Debt and Related Warrants - Sum

Debt and Related Warrants - Summary of 2015 Credit Facility (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
2015 Credit Facility
Net carrying value of debt, Current Portion	$ 3,910	$ 3,884
Net carrying value of debt, Long-term debt	3,517	4,218
2015 Credit Facility
2015 Credit Facility
Debt, including end of term fee, Current Portion	4,054	4,054
Less: Discount attributable to warrants, end of term fee and debt issuance costs, Current Portion	(144)	(177)
Net carrying value of debt, Current Portion	3,910	3,877
Debt, including end of term fee, Long-term debt	3,574	4,301
Less: Discount attributable to warrants, end of term fee and debt issuance costs, Long-term debt	(57)	(83)
Net carrying value of debt, Long-term debt	3,517	4,218
Debt, including end of term fee, Total	7,628	8,355
Less: Discount attributable to warrants, end of term fee and debt issuance costs, Total	(201)	(260)
Net carrying value of debt, Total	$ 7,427	$ 8,095

Stock-Based Compensation - Addi

Stock-Based Compensation - Additional Information (Details) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Share-based Compensation
Total grant date fair value of options vested	$ 107,000	$ 103,000
Number of stock options granted	74,000
Total unrecognized compensation expense related to unvested options	$ 3,200,000
Unrecognized compensation expense, weighted-average period expected to be recognized	2 years 9 months 18 days
Options remained outstanding	1,481,632		1,414,730
Weighted-average exercise price (per share)	$ 5.41		$ 5.28
Stock-based compensation expense	$ 431,000	111,000
Employees
Share-based Compensation
Weighted-average grant date fair value of options granted	$ 3.69
Stock-based compensation expense	$ 384,000	$ 105,000
Non-Employee
Share-based Compensation
Number of stock options granted	0	0
Options remained outstanding	31,990
Weighted-average exercise price (per share)	$ 5.26
Stock-based compensation expense	$ 11,000	$ 6,000
2016 Employee Incentive Plan
Share-based Compensation
Maximum number of common stock shares may be issued under the plan	500,000
Annual increases in the number of shares available for issuance, percentage of outstanding capital stock	3.00%
2016 Employee Stock Purchase Plan
Share-based Compensation
Maximum number of common stock shares may be issued under the plan	96,153
Annual increases in the number of shares available for issuance, percentage of outstanding capital stock	1.00%

Stock-Based Compensation - Summ

Stock-Based Compensation - Summary of Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2017	Dec. 31, 2016
Stock-Based Compensation
Options Available for Grant, Outstanding, Beginning balance	342,500
Options Available for Grant, Outstanding, Ending balance	273,548	342,500
Number of Options, Outstanding, Beginning balance	1,414,730
Number of Options, Options granted	74,000
Number of Options, Options exercised	(2,050)
Number of Options, Options cancelled/forfeited	(5,048)
Number of Options, Outstanding, Ending balance	1,481,632	1,414,730
Number of Options, exercisable	773,583
Number of Options, vested and expected to vest	1,481,634
Weighted - Average Exercise Price Per Share, Options outstanding, Beginning balance	$ 5.28
Weighted - Average Exercise Price Per Share, Options granted	7.88
Weighted - Average Exercise Price Per Share, Options exercised	4.42
Weighted - Average Exercise Price Per Share, Options cancelled/forfeited	4.97
Weighted - Average Exercise Price Per Share, Options outstanding, Ending balance	5.41	$ 5.28
Weighted - Average Exercise Price Per Share, Options exercisable	4.55
Weighted - Average Exercise Price Per Share, Options vested and expected to vest	$ 5.41
Weighted - Average Remaining Contractual Life, Options outstanding	7 years 6 months	7 years 7 months 6 days
Weighted - Average Remaining Contractual Life, Options exercisable	6 years
Weighted - Average Remaining Contractual Life, Options vested and expected to vest	7 years 6 months
Aggregate Intrinsic Value, Options outstanding	$ 4,406	$ 4,267
Aggregate Intrinsic Value, Options exercised	8
Aggregate Intrinsic Value, Options exercisable	2,963
Aggregate Intrinsic Value, Options vested and expected to vest	$ 4,406

Stock-Based Compensation - Su31

Stock-Based Compensation - Summary of Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Share-based compensation expense
Stock-based compensation expense	$ 431	$ 111
Research and Development
Share-based compensation expense
Stock-based compensation expense	172	45
General and Administrative
Share-based compensation expense
Stock-based compensation expense	226	54
Sales and Marketing
Share-based compensation expense
Stock-based compensation expense	$ 33	$ 12

Stock-Based Compensation - Sche

Stock-Based Compensation - Schedule of Fair Value of Employee Stock Options (Details) - Employees	3 Months Ended
	Mar. 31, 2017
Share-based Compensation
Expected volatility, Minimum	47.20%
Expected volatility, Maximum	47.30%
Risk-free interest rate, Minimum	2.00%
Risk-free interest rate, Maximum	2.10%
Expected term (in years)	5 years 9 months 18 days
Dividend yield	6.00%

Related Party Transactions (Det

Related Party Transactions (Details) - USD ($)	Aug. 21, 2016	Oct. 21, 2014	Oct. 17, 2014	Mar. 31, 2017	Mar. 31, 2016	Mar. 31, 2017	Dec. 31, 2016
Related Party Transactions
Amounts due to related parties				$ 2,076,000		$ 2,076,000	$ 1,359,000
Research and development expense				6,389,000	$ 5,137,000
Non-cash compensation expense (income)				255,000	520,000
Inventory				5,824,000		5,824,000	5,069,000
Due from related party				523,000		523,000	486,000
Freescale
Related Party Transactions
Amounts due to related parties				759,000		759,000	380,000
Rent paid				289,000	257,000
Related party sales				572,000	734,000
Due from related party				499,000		499,000	486,000
Freescale | Processing Services
Related Party Transactions
Inventory				427,000	709,000	427,000
Freescale | Wafers
Related Party Transactions
Inventory				168,000		168,000
Joint Development Agreement | Global Foundries
Related Party Transactions
Amounts due to related parties				1,300,000		1,300,000	$ 979,000
Research and development expense				1,900,000	880,000
Agreement Term			4 years
Period to Repurchase Shares		1 year
Period of possession of exclusive right to manufacture after qualification of device			3 years
Period of possession of exclusive right to manufacture after completion of device development work			4 years
Related party sales				569,000	0
Due from related party				$ 24,000		$ 24,000
Joint Development Agreement | Global Foundries | Common Stock
Related Party Transactions
Number of shares sold		461,538
Shares sold, price per share		$ 0.00026
Number of shares of common stock, vested	211,538					28,846
Number of shares of common stock, unvested				182,692		182,692
Estimated fair value of common stock per share				$ 8.38		$ 8.38	$ 8.29
Joint Development Agreement | Global Foundries | Research and Development
Related Party Transactions
Non-cash compensation expense (income)				$ 255,000	$ 520,000
Joint Development Agreement | Global Foundries | Series B Redeemable Convertible Preferred Stock
Related Party Transactions
Number of shares sold		192,307
Shares sold, price per share		$ 26

Net Loss Per Common Share - Com

Net Loss Per Common Share - Computation of Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Numerator:
Net loss	$ (6,086)	$ (4,540)
Denominator:
Weighted-average common shares outstanding	12,498,698	3,015,303
Less: weighted-average unvested common shares subjected to repurchase	(198,717)	(461,538)
Weighted-average common shares outstanding used to calculate net loss per common share, basic and diluted	12,299,981	2,553,765
Net loss per common share, basic and diluted	$ (0.49)	$ (1.78)

Net Loss Per Common Share - Sch

Net Loss Per Common Share - Schedule of Potentially Dilutive Securities Excluded from Diluted Net Loss Per Common Share (Details) - shares	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Antidilutive Securities
Potentially dilutive securities excluded from diluted net loss per common share	1,692,014	3,854,375
Redeemable Convertible Preferred Stock
Antidilutive Securities
Potentially dilutive securities excluded from diluted net loss per common share		2,486,199
Options to purchase common stock
Antidilutive Securities
Potentially dilutive securities excluded from diluted net loss per common share	1,481,632	878,948
Common stock subject to repurchase
Antidilutive Securities
Potentially dilutive securities excluded from diluted net loss per common share	182,692	461,538
Redeemable Convertible Preferred Stock Warrants
Antidilutive Securities
Potentially dilutive securities excluded from diluted net loss per common share		27,690
Common Stock Warrants
Antidilutive Securities
Potentially dilutive securities excluded from diluted net loss per common share	27,690

Subsequent Events (Details)

Subsequent Events (Details) - USD ($) $ in Thousands	May 12, 2017	Apr. 30, 2017	Mar. 31, 2017	Mar. 31, 2016
Subsequent events
Product sales			$ 7,220	$ 6,126
SVB Loan and Security Agreement | Subsequent Events
Subsequent events
Debt amount	$ 12,000
Agreement term	3 years
Agreement term extension	1 year
SVB Loan and Security Agreement | Spin-Torque Product | Subsequent Events
Subsequent events
Product sales	$ 4,000
SVB Loan and Security Agreement | Prime Rate | Subsequent Events
Subsequent events
Interest rate, negative basis spread percentage	0.75%
Revolving loan 2015 Credit Facility | Subsequent Events
Subsequent events
Repayment of loan		$ 1,500