Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Oct. 28, 2016 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | Invitae Corp | |
Entity Central Index Key | 1,501,134 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Trading Symbol | NVTA | |
Entity Common Stock, Shares Outstanding | 32,445,924 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 37,745 | $ 73,238 |
Marketable securities | 29,003 | 53,780 |
Prepaid expenses and other current assets | 8,216 | 4,292 |
Total current assets | 74,964 | 131,310 |
Property and equipment, net | 21,226 | 18,709 |
Restricted cash | 4,697 | 4,831 |
Other assets | 811 | 1,826 |
Total assets | 101,698 | 156,676 |
Current liabilities: | ||
Accounts payable | 2,204 | 3,500 |
Accrued liabilities | 6,350 | 4,253 |
Capital lease obligation, current portion | 1,383 | 1,588 |
Debt, current portion | 3,377 | 1,536 |
Total current liabilities | 13,314 | 10,877 |
Capital lease obligation, net of current portion | 592 | 1,576 |
Debt, net of current portion | 9,568 | 5,504 |
Other long-term liabilities | 7,380 | 343 |
Total liabilities | 30,854 | 18,300 |
Commitments and contingencies (Note 5) | ||
Stockholders’ equity: | ||
Preferred stock, $0.0001 par value: Authorized: 20,000,000 shares; Issued and outstanding: no shares as of September 30, 2016 and December 31, 2015 | ||
Common stock, $0.0001 par value: Authorized: 400,000,000 shares; Issued and outstanding: 32,445,924 and 31,935,121 shares as of September 30, 2016 and December 31, 2015, respectively | 4 | 4 |
Accumulated other comprehensive income (loss) | 18 | (15) |
Additional paid-in capital | 321,192 | 313,349 |
Accumulated deficit | (250,370) | (174,962) |
Total stockholders’ equity | 70,844 | 138,376 |
Total liabilities and stockholders’ equity | $ 101,698 | $ 156,676 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2016 | Dec. 31, 2015 |
Statement Of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, authorized shares | 20,000,000 | 20,000,000 |
Preferred stock, issued shares | 0 | 0 |
Preferred stock, outstanding shares | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 400,000,000 | 400,000,000 |
Common stock, shares issued | 32,445,924 | 31,935,121 |
Common stock, shares outstanding | 32,445,924 | 31,935,121 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Income Statement [Abstract] | ||||
Revenue | $ 6,276 | $ 2,187 | $ 15,812 | $ 5,217 |
Costs and operating expenses: | ||||
Cost of revenue | 7,242 | 3,952 | 19,705 | 11,017 |
Research and development | 11,482 | 11,134 | 32,855 | 31,426 |
Selling and marketing | 6,803 | 5,439 | 20,689 | 16,368 |
General and administrative | 5,655 | 4,118 | 17,794 | 11,592 |
Total costs and operating expenses | 31,182 | 24,643 | 91,043 | 70,403 |
Loss from operations | (24,906) | (22,456) | (75,231) | (65,186) |
Other income (expense), net | 50 | (9) | 122 | (111) |
Interest expense | (115) | (62) | (299) | (125) |
Net loss | $ (24,971) | $ (22,527) | $ (75,408) | $ (65,422) |
Net loss per share attributable to common stockholders, basic and diluted | $ (0.77) | $ (0.71) | $ (2.35) | $ (2.43) |
Shares used in computing net loss per share, basic and diluted | 32,315,038 | 31,852,796 | 32,145,806 | 26,962,821 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Statement Of Income And Comprehensive Income [Abstract] | ||||
Net loss | $ (24,971) | $ (22,527) | $ (75,408) | $ (65,422) |
Other comprehensive gain (loss): | ||||
Unrealized gain (loss) on available-for-sale marketable securities, net of tax | (14) | 7 | 33 | 11 |
Comprehensive loss | $ (24,985) | $ (22,520) | $ (75,375) | $ (65,411) |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Cash flows from operating activities: | ||
Net loss | $ (75,408) | $ (65,422) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 4,934 | 3,718 |
Stock-based compensation | 6,350 | 1,837 |
Amortization of premium on marketable securities | 253 | 545 |
Loss on disposal of assets | 933 | 15 |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other current assets | 668 | (651) |
Other assets | 1,015 | 208 |
Accounts payable | (946) | (216) |
Accrued expenses and other liabilities | 2,929 | 77 |
Net cash used in operating activities | (59,272) | (59,889) |
Cash flows from investing activities: | ||
Purchases of marketable securities | (78,915) | (186,312) |
Proceeds from sales of marketable securities | 15,891 | |
Proceeds from maturities of marketable securities | 103,472 | 71,634 |
Purchases of property and equipment | (7,117) | (5,304) |
Change in restricted cash | 134 | (4,697) |
Net cash provided by (used in) investing activities | 17,574 | (108,788) |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock upon initial public offering, net of issuance costs | 107,116 | |
Proceeds from exercise of stock options | 1,489 | 273 |
Proceeds from loan agreement | 7,500 | 5,000 |
Loan payments | (1,595) | (165) |
Capital lease principal payments | (1,189) | (1,528) |
Loan agreement financing costs | (47) | |
Net cash provided by financing activities | 6,205 | 110,649 |
Net decrease in cash and cash equivalents | (35,493) | (58,028) |
Cash and cash equivalents at beginning of period | 73,238 | 107,027 |
Cash and cash equivalents at end of period | 37,745 | 48,999 |
Supplemental cash flow information: | ||
Interest paid | 299 | 125 |
Supplemental cash flow information of non-cash investing and financing activities: | ||
Equipment acquired through capital leases | 1,639 | |
Conversion of convertible preferred stock to common stock | 202,305 | |
Purchases of property and equipment in accounts payable and accrued liabilities | $ 1,870 | $ 94 |
Organization and description of
Organization and description of business | 9 Months Ended |
Sep. 30, 2016 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Organization and description of business | 1. Organization and description of business Invitae Corporation (the “Company”) was incorporated in the state of Delaware on January 13, 2010, as Locus Development, Inc. and changed its name to Invitae Corporation in 2012. The Company utilizes an integrated portfolio of laboratory processes, software tools and informatics capabilities to process DNA-containing samples, analyze information about patient-specific genetic variation and generate test reports for clinicians and their patients. The Company’s laboratory is located in San Francisco, California. The Company currently has more than 1,000 genes in production and provides a variety of diagnostic tests that can be used in multiple indications. The Company’s tests include multiple genes associated with hereditary cancer, neurological disorders, cardiovascular disorders, pediatric disorders, metabolic disorders and other hereditary conditions. The Company operates in one segment. The Company has incurred substantial losses since its inception and expects to continue to incur operating losses in the near-term. The Company will need to raise additional capital to meet anticipated cash requirements for the 12-month period following the filing date of this report. Management regularly considers fundraising opportunities and will determine the timing, nature and amount of financings based upon various factors, including market conditions and the Company’s operating plans. However, no assurance can be given as to whether any needed financing will be available on terms acceptable to the Company, if at all. If the Company is unable to successfully raise additional capital when needed, it may have to delay, reduce the scope of or eliminate one or more research and development programs or selling and marketing initiatives. Initial public offering In February 2015, the Company completed an initial public offering (“IPO”) of its common stock. In connection with its IPO, the Company sold 7,302,500 shares of common stock at $16.00 per share for aggregate net proceeds of $105.7 million after underwriting discounts and commissions and offering expenses payable by the Company. This includes the exercise in full by the underwriters of their option to purchase up to 952,500 additional shares of common stock at the same price to cover over-allotments. Upon the closing of the IPO, all shares of convertible preferred stock then outstanding converted into 23,521,889 shares of common stock. Upon the effectiveness of the Amended and Restated Certificate of Incorporation of the Company on February 12, 2015, the number of shares of capital stock the Company is authorized to issue was increased to 420,000,000 shares, of which 400,000,000 shares are common stock and 20,000,000 shares are preferred stock. Both the common stock and preferred stock have a par value of $0.0001 per share. There were no shares of preferred stock outstanding at September 30, 2016 or December 31, 2015. Basis of presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“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 consolidated financial statements have been prepared on the same basis as the annual financial statements. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015. The results for the three and nine months ended September 30, 2016 are not necessarily indicative of the results expected for the full fiscal year or any other periods. During the quarter ended September 30, 2016, the Company identified immaterial classification errors in the condensed consolidated financial statements for the quarters ended March 31, 2016 and June 30, 2016, related to the classification of asset impairment charges. Based on a quantitative and qualitative analysis of the errors as required by authoritative guidance, management concluded the errors had no material effect on any of the Company’s previously issued financial statements, are immaterial to the Company’s results for the first and second quarters of 2016, do not affect the expected full year results for 2016, and had no material effect on the trend of financial statements. As a result of the immaterial classification errors discussed above, the unaudited condensed consolidated financial statements for the nine months ended September 30, 2016 reflect the following immaterial reclassification adjustments related to prior periods: reclassification for asset impairment charges from other income (expense) to general and administrative expense of $0.2 million for the quarter ended March 31, 2016; and reclassification for asset impairment charges from other income (expense) to general and administrative expense of $0.7 million for the quarter ended June 30, 2016. |
Summary of significant accounti
Summary of significant accounting policies | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Summary of significant accounting policies | 2. Summary of significant accounting policies Principles of consolidation The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Use of estimates The preparation of 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 liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. The Company believes judgment is involved in determining revenue recognition; the recoverability of long-lived assets; stock-based compensation expense; and income tax uncertainties. The Company bases these estimates on historical and anticipated results, trends, and various other assumptions that the Company believes are reasonable under the circumstances, including assumptions as to future events. Actual results could differ materially from those estimates and assumptions. Concentrations of credit risk and other risks and uncertainties Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents. The Company’s cash and cash equivalents are held by financial institutions in the United States and Chile. Such deposits may exceed federally insured limits. Cash equivalents The Company considers all highly liquid investments with original maturities of three months or less from the date of purchase to be cash equivalents. Cash equivalents consist primarily of amounts invested in money market funds and U.S. government agency securities. Marketable securities All marketable securities have been classified as “available-for-sale” and are carried at estimated fair value as determined based upon quoted market prices or pricing models for similar securities. Management determines the appropriate classification of its marketable securities in debt securities at the time of purchase and reevaluates such designation at each balance sheet date. Short-term marketable securities have maturities less than 365 days at the balance sheet date. Unrealized gains and losses are excluded from earnings and are reported as a component of other comprehensive income (loss). Realized gains and losses and declines in fair value judged to be other than temporary, if any, on available-for-sale securities are included in interest and other income (expense), net. The cost of securities sold is based on the specific-identification method. Interest on marketable securities is included in interest and other income (expense), net. Restricted cash Restricted cash consists of money market funds that serve as: collateral for a security deposit for the Company’s lease agreement for a production facility entered into in September 2015; collateral for a credit card agreement at one of the Company’s financial institutions; and for securing a letter of credit as collateral for a facility sublease agreement. Internal-use software The Company capitalizes third-party costs incurred in the application development stage to design and implement internal-use software. Maintenance and training costs relating to internal-use software are expensed as incurred. Capitalized internal-use software costs are recorded as property and equipment and are amortized over estimated useful lives of up to three years on a straight line basis. Amortization of capitalized internal-use software costs is recorded as sales and marketing expense. During the nine months ended September 30, 2016 and 2015, the Company capitalized $0 and $1.5 million, respectively, of internal-use software development costs. Internal-use software amortization was $990,000 and $390,000 in the nine months ended September 30, 2016 and 2015, respectively. The carrying value of capitalized internal-use software was $440,000 and $1.4 million at September 30, 2016 and December 31, 2015, respectively. The weighted average remaining useful life of capitalized internal-use software at September 30, 2016 was 4 months. Leases The Company rents its facilities under operating lease agreements and recognizes related rent expense on a straight-line basis over the term of the applicable lease agreement. Some of the lease agreements contain rent holidays, scheduled rent increases, lease incentives, and renewal options. Rent holidays and scheduled rent increases are included in the determination of rent expense to be recorded over the lease term. Lease incentives are recognized as a reduction of rent expense on a straight-line basis over the term of the lease. Renewals are not assumed in the determination of the lease term unless they are deemed to be reasonably assured at the inception of the lease. The Company recognizes rent expense beginning on the date it obtains the legal right to use and control the leased space. Fair value of financial instruments The Company’s financial instruments consist principally of cash and cash equivalents, marketable securities, accounts payable, capital leases and debt relating to equipment financing. The carrying amounts of certain of these financial instruments, including cash and cash equivalents, and accounts payable, approximate fair value due to their short maturities. Based on borrowing rates available to the Company, the carrying value of capital leases approximates fair value. See Note 4, “Fair value measurements” for further information on the fair value of the Company’s financial instruments. Revenue recognition Revenue is generated from the sale of tests that provide analysis and associated interpretation of the sequencing of parts of the genome. Revenue associated with subsequent re-requisition services was de minimis for all periods presented. Revenue is recognized when persuasive evidence of an arrangement exists; delivery has occurred or services have been rendered; the fee is fixed or determinable; and collectability is reasonably assured. The criterion for whether the fee is fixed or determinable and whether collectability is reasonably assured are based on management’s judgments. When evaluating collectability, in situations where contracted reimbursement coverage does not exist, the Company considers whether the Company has sufficient history to reliably estimate a payer’s individual payment patterns. The Company reviews the number of tests paid against the number of tests billed over at least several months of payment history and the payer’s outstanding balance for unpaid tests to determine whether payments are being made at a consistently high percentage of tests billed and at appropriate amounts given the amount billed. For most payers, the Company has not been able to demonstrate a predictable pattern of collectability, and therefore recognizes revenue when payment is received. For payers who have demonstrated a consistent pattern of payment of tests billed at appropriate amounts, the Company recognizes revenue, at estimated realizable amounts, upon delivery of test results. Cost of revenue Cost of revenue reflects the aggregate costs incurred in delivering the genetic testing results to clinicians and includes expenses for personnel costs including stock-based compensation, materials and supplies, equipment and infrastructure expenses associated with testing and allocated overhead including rent, equipment depreciation and utilities. Costs associated with performing the Company’s test are recorded as the test is processed regardless of whether and when revenue is recognized with respect to that test. Income taxes The Company uses the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial reporting and the tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized. Stock-based compensation The Company measures its stock-based payment awards made to employees and directors based on the estimated fair values of the awards and recognizes the compensation expense over the requisite service period. The Company uses the Black-Scholes option-pricing model to estimate the fair value of its stock option awards and employee stock purchase plan (“ESPP”) purchases. The fair value of restricted stock unit (“RSU”) awards with time-based vesting terms is based on the grant date share price. The Company grants performance-based restricted stock unit (“PRSU”) awards to certain employees which vest upon the achievement of certain performance conditions, subject to the employees’ continued service relationship with the Company. The probability of vesting is assessed at each reporting period and compensation cost is adjusted based on this probability assessment. The Company recognizes such compensation expense on an accelerated vesting method. Stock-based compensation expense for awards without a performance condition is recognized using the straight-line method. Stock-based compensation expense is based on the value of the portion of stock-based payment awards that is ultimately expected to vest. As such, the Company’s stock-based compensation is reduced for the estimated forfeitures at the date of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company accounts for compensation expense related to stock options granted to non-employees based on the fair values estimated using the Black-Scholes model. Stock options granted to non-employees are re-measured at each reporting date until the award is vested. Net loss per common share Basic net loss per common share is calculated by dividing net loss by the weighted-average number of common shares outstanding during the period, without consideration of common stock equivalents. Diluted net loss per share is computed by dividing net loss by the weighted-average number of common share equivalents outstanding for the period determined using the treasury stock method. Potentially dilutive securities, consisting of options to purchase common stock, RSUs and PRSUs, are considered to be common stock equivalents and were excluded from the calculation of diluted net loss per share because their effect would be antidilutive for all periods presented. There were no shares subject to repurchase during the nine months ended September 30, 2016. Common shares subject to repurchase in the amount of 8,080 were excluded from weighted-average shares for the three and nine months ended September 30, 2015. Recent accounting pronouncements In August 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-15, Statement of Cash Flows (Topic 230) — Classification of Certain Cash Receipts and Cash Payments In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers Revenue from Contracts with Customers (Topic 606). In August 2014, the FASB issued ASU No. 2014-15 (Subtopic 205- 40), Presentation of Financial Statements—Going Concern: Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern |
Balance sheet components
Balance sheet components | 9 Months Ended |
Sep. 30, 2016 | |
Balance Sheet Related Disclosures [Abstract] | |
Balance sheet components | 3. Balance sheet components Cash equivalents and marketable securities The following is a summary of cash equivalents and marketable securities (in thousands). September 30, 2016 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Money market funds $ 22,779 $ — $ — $ 22,779 U.S. treasury notes 11,007 12 — 11,019 U.S. government agency securities 17,978 6 — 17,984 $ 51,764 $ 18 $ — $ 51,782 Reported as: Cash equivalents $ 18,082 Restricted cash 4,697 Marketable securities 29,003 Total cash equivalents, restricted cash and marketable securities $ 51,782 December 31, 2015 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Money market funds $ 39,998 $ — $ — $ 39,998 U.S. treasury notes 4,006 — — 4,006 U.S. government agency securities 65,586 1 (16 ) 65,571 $ 109,590 $ 1 $ (16 ) $ 109,575 Reported as: Cash equivalents $ 50,964 Restricted cash 4,831 Marketable securities 53,780 Total cash equivalents, restricted cash and marketable securities $ 109,575 At September 30, 2016, the remaining contractual maturities of available-for-sale securities were less than one year. For the three and nine months ended September 30, 2016, there were no realized gains or losses on available-for-sale securities. Property and equipment, net Property and equipment consisted of the following (in thousands): September 30, 2016 December 31, 2015 Leasehold improvements $ 1,259 $ 2,548 Laboratory equipment 13,492 10,461 Equipment under capital lease 5,871 8,224 Computer equipment 2,488 2,397 Software 2,489 2,368 Furniture and fixtures 238 210 Automobiles 20 20 Construction-in-progress 8,158 1,202 Total property and equipment, gross 34,015 27,430 Accumulated depreciation and amortization (12,789 ) (8,721 ) Total property and equipment, net $ 21,226 $ 18,709 Depreciation and amortization expense was $4.9 million and $3.7 million for the nine months ended September 30, 2016 and 2015, respectively. Accrued liabilities Accrued liabilities consisted of the following (in thousands): September 30, 2016 December 31, 2015 Accrued compensation and related expenses $ 2,377 $ 2,307 Accrued laboratory materials purchases 137 426 Accrued professional services 618 272 Accrued construction in progress 1,508 — Lease incentive obligation, current 468 — Other 1,242 1,248 Total accrued liabilities $ 6,350 $ 4,253 Other long-term liabilities Other long-term liabilities consisted of the following (in thousands): September 30, 2016 December 31, 2015 Lease incentive obligation, non-current $ 4,360 $ 107 Deferred rent, non-current 2,846 98 Other non-current liabilities 174 138 Total other long-term liabilities $ 7,380 $ 343 |
Fair value measurements
Fair value measurements | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair value measurements | 4. Fair value measurements Financial assets and liabilities are recorded at 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 authoritative guidance establishes a three-level valuation hierarchy that prioritizes the inputs to valuation techniques used to measure fair value based upon whether such inputs are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions made by the reporting entity. The three-level hierarchy for the inputs to valuation techniques is briefly summarized as follows: Level 1—Observable inputs such as quoted prices (unadjusted) for identical instruments in active markets. Level 2—Observable inputs such as quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, or model-derived valuations whose significant inputs are observable. Level 3—Unobservable inputs that reflect the reporting entity’s own assumptions. The following tables set forth the fair value of the Company’s consolidated financial instruments that were measured at fair value on a recurring basis as of September 30, 2016 and December 31, 2015 (in thousands): September 30, 2016 Level 1 Level 2 Level 3 Total Financial assets: Money market funds $ 22,779 $ — $ — $ 22,779 U.S. treasury notes 11,019 — — 11,019 U.S. government agency securities — 17,984 — 17,984 Total financial assets $ 33,798 $ 17,984 $ — $ 51,782 December 31, 2015 Level 1 Level 2 Level 3 Total Financial assets: Money market funds $ 39,998 $ — $ — $ 39,998 U.S. treasury notes 4,006 — — 4,006 U.S. government agency securities — 65,571 — 65,571 Total financial assets $ 44,004 $ 65,571 $ — $ 109,575 The Company’s debt securities of U.S. government agency entities are classified as Level 2 as they are valued based upon quoted market prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs obtained from various third party data providers, including but not limited to, benchmark yields, interest rate curves, reported trades, broker/dealer quotes and reference data. There were no transfers between Level 1 and Level 2 during the periods presented. The fair value of the Company’s outstanding debt is estimated using the net present value of future debt payments, discounted at an interest rate that is consistent with market interest rates, which is a Level 2 input. The carrying amount and the estimated fair value of the Company’s outstanding debt at September 30, 2016 and December 31, 2015, are as follows (in thousands): September 30, 2016 December 31, 2015 Carrying Amount Fair Value Carrying Amount Fair Value Debt $ 12,946 $ 12,671 $ 7,040 $ 6,952 |
Commitments and contingencies
Commitments and contingencies | 9 Months Ended |
Sep. 30, 2016 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and contingencies | 5. Commitments and contingencies Operating Leases In September 2015, the Company entered into a lease agreement for a production facility in San Francisco, California. This lease expires in July 2026 and the Company may renew the lease for an additional ten years. The Company has determined the lease term to be a ten-year period expiring in 2026. The lease term commenced when the Company took occupancy of the facility in February 2016. In connection with the execution of the lease, the Company provided a security deposit of approximately $4.6 million which is included in restricted cash in the Company’s consolidated balance sheets. Minimum annual rent under the lease is subject to increases based on stated rental adjustment terms. In addition, per the terms of the lease, the Company will receive a $5.2 million lease incentive in the form of reimbursement from the landlord for a portion of the costs of leasehold improvements the Company makes to the facility. The assets purchased with the lease incentive are included in property and equipment, net, in the Company’s consolidated balance sheets and the lease incentive is recognized as a reduction of rental expense on a straight-line basis over the term of the lease. At September 30, 2016, all of the incentive had been utilized by the Company. Aggregate future minimum lease payments for the new facility at September 30, 2016 were approximately $70.8 million. In addition to the security deposit of approximately $4.6 million for the new production facility, the Company has provided, as collateral for other leases, security deposits of $0.8 million at September 30, 2016 and at December 31, 2015, which are included in other assets in the Company’s consolidated balance sheets. Future minimum payments under non-cancelable operating leases as of September 30, 2016 are as follows (in thousands): Year ending December 31, Amounts 2016 (remainder of year) $ 2,041 2017 7,043 2018 6,898 2019 6,946 2020 6,917 Thereafter 44,216 Total minimum lease payments $ 74,061 Rent expense was $6.3 million and $2.7 million for the nine months ended September 30, 2016 and 2015, respectively. Equipment Financing In July 2015, the Company entered into a Loan and Security Agreement (the “Loan Agreement”) with a bank under which term loans for purchases of equipment up to an aggregate of $15.0 million are available in tranches not to exceed $2.5 million. The Company may request additional tranches to finance the purchase of equipment through December 31, 2016, subject to certain restrictions. The term loans under the Loan Agreement bear interest at a floating rate equal to 0.25% below the prime rate as published in the Wall Street Journal effective on the date the change in the prime rate becomes effective. The Company is required to repay the outstanding principal and accrued but unpaid interest on each tranche in equal monthly installments beginning one month after each advance and ending on July 17, 2020 (the “Term Date”). Any then-unpaid principal and interest on advances under the Loan Agreement are payable on the Term Date. The Company may, at its option, prepay the borrowings by paying the lender a prepayment premium. The Company’s obligations under the Loan Agreement are subject to covenants, including covenants to maintain a minimum liquidity level with the bank, and additional covenants limiting the Company’s ability to dispose of assets, undergo a change in control, merge with or acquire other entities, incur debt, incur liens, pay dividends or other distributions to holders of its capital stock, repurchase stock and make investments, in each case subject to certain exceptions. At September 30, 2016, the Company was in compliance with all covenants under the Loan Agreement. The Company’s obligations under the Loan Agreement are secured by a security interest on substantially all of its assets, excluding its intellectual property and certain other assets. At September 30, 2016, obligations under the Loan Agreement were $12.9 million. Debt issuance costs related to the Loan Agreement of $47,000 were recorded as a direct deduction from the debt liability and are being amortized to interest expense over the term of the Loan Agreement. Future payments under the Loan Agreement as of September 30, 2016 are as follows (in thousands): Year ending December 31, Amounts 2016 (remainder of year) $ 945 2017 3,728 2018 3,617 2019 3,508 2020 1,997 Total remaining debt payments 13,795 Less: amount representing debt discount (36 ) Less: amount representing interest (814 ) Present value of remaining debt payments 12,945 Less: current portion (3,377 ) Total non-current debt obligation $ 9,568 Interest expense related to the Loan Agreement was $215,000 and $0 for the nine months ended September 30, 2016 and 2015, respectively. Capital leases The Company has entered into various capital lease agreements to obtain laboratory equipment. The terms of the capital leases are typically three years with interest rates ranging from 3.8% to 4.3%. The leases are secured by the underlying equipment. The portion of the future payments designated as principal repayment was classified as a capital lease obligation on the consolidated balance sheets. Future payments under capital leases at September 30, 2016 are as follows (in thousands): Year ending December 31, Amounts 2016 (remainder of year) $ 419 2017 1,350 2018 269 Total capital lease obligations 2,038 Less: amount representing interest (63 ) Present value of net minimum capital lease payments 1,975 Less: current portion (1,383 ) Total non-current capital lease obligations $ 592 Interest expense related to capital leases was $84,000 and $105,000 for the nine months ended September 30, 2016 and 2015, respectively. Property and equipment under capital leases was $5.9 million and $8.2 million as of September 30, 2016 and December 31, 2015, respectively. Accumulated depreciation and amortization, collectively, on these assets was $3.1 million and $2.8 million at September 30, 2016 and December 31, 2015, respectively. Guarantees and indemnifications As permitted under Delaware law and in accordance with the Company’s bylaws, the Company indemnifies its officers and directors for certain events or occurrences while the officer or director is or was serving in such capacity. The maximum amount of potential future indemnification is unlimited; however, the Company maintains director and officer liability insurance. This insurance allows the transfer of the risk associated with the Company’s exposure and may enable it to recover a portion of any future amounts paid. The Company believes the fair value of these indemnification agreements is minimal. Accordingly, the Company did not record any liabilities associated with these indemnification agreements at September 30, 2016 or December 31, 2015. Contingencies On September 16, 2015, GeneDx, Inc. and Bio-Reference Laboratories, Inc. filed an action against the Company in the U.S. District Court for the District of New Jersey. The Complaint alleges that the Company wrongfully solicited and hired employees away from the plaintiffs in order to acquire access to trade secrets and other confidential business information belonging to the plaintiffs. The Complaint alleges claims for relief based on legal theories of unfair competition, tortious interference with prospective economic advantage, tortious interference with contract, and trade secret misappropriation, and seeks injunctive relief; damages, including punitive damages; and attorneys’ fees and costs. On October 22, 2015, the Company filed a motion to dismiss the action for lack of personal jurisdiction or, in the alternative, to transfer the action to the U.S. District Court for the Northern District of California. On November 13, 2015, the plaintiffs filed their First Amended Complaint. On December 14, 2015, the Company responded by again filing a motion to dismiss the action for lack of personal jurisdiction or, in the alternative, to transfer the action to the U.S. District Court for the Northern District of California. Following the filing of opposition papers by the plaintiffs and reply papers by the Company, the U.S. District Court for the District of New Jersey granted the motion to dismiss by order dated July 26, 2016. The plaintiffs did not appeal the decision and the deadline to do so has passed. The Company was not a party to any other material legal proceedings at September 30, 2016, or at the date of this report. The Company may from time to time become involved in various legal proceedings arising in the ordinary course of business, and the resolution of any such claims could be material. |
Stock incentive plans
Stock incentive plans | 9 Months Ended |
Sep. 30, 2016 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock incentive plans | 6. Stock incentive plans Stock incentive plans In 2010, the Company adopted the 2010 Incentive Plan (the “2010 Plan”). The 2010 Plan provides for the granting of stock-based awards to employees, directors, and consultants under terms and provisions established by the Board of Directors. Under the terms of the 2010 Plan, options may be granted at an exercise price not less than fair market value. For employees holding more than 10% of the voting rights of all classes of stock, the exercise prices for incentive and nonstatutory stock options must be at least 110% of fair market of the common stock on the grant date, as determined by the Board of Directors. The terms of options granted under the 2010 Plan may not exceed ten years. In January 2015, the Company adopted the 2015 Stock Incentive Plan, (the “2015 Plan”), which became effective upon the closing of the IPO. The 2015 Plan had 4,370,452 shares of common stock reserved for future issuance at the time of its effectiveness, which included 120,452 shares under the 2010 Plan which were transferred to the 2015 Plan upon effectiveness of the 2015 Plan. The 2015 Plan provides for automatic annual increases in shares available for grant, beginning on January 1, 2016 through January 1, 2025. In addition, shares subject to awards under the 2010 Plan that are forfeited or terminated will be added to the 2015 Plan. The 2015 Plan provides for the grant of incentive stock options, nonstatutory stock options, restricted stock awards, stock units, stock appreciation rights and other forms of equity compensation, all of which may be granted to employees, including officers, non-employee directors and consultants. Additionally, the 2015 Plan provides for the grant of cash-based awards. Options granted generally vest over a period of four years. Typically, the vesting schedule for options granted to newly hired employees provides that 1/4 of the award vests upon the first anniversary of the employee’s date of hire, with the remainder of the award vesting monthly thereafter at a rate of 1/48 of the total shares subject to the option. All other options typically vest in equal monthly installments over the four-year vesting schedule. RSUs generally vest over a period of three years. Typically, the vesting schedule for RSUs provides that one third of the award vests upon each anniversary of the grant date. In February 2016, the Company granted PRSUs under the 2015 Plan, which PRSUs may be earned based on the achievement of specified performance conditions measured over a period of approximately 12 months. Holders of PRSUs may receive 0% to 100% of the target number of PRSUs originally granted. Stock-based compensation expense associated with PRSU grants is recorded when the performance conditions are determined to be probable. Fully vested restricted stock units will be awarded upon the Board of Directors’ determination of the level of achievement. At September 30, 2016, 546,746 PRSUs were outstanding, with a total grant date fair value of $3.6 million. Based on the its evaluation of the probability of achieving performance conditions at September 30, 2016, the Company has not recorded stock-based compensation expense for the three and nine months ended September 30, 2016 related to the PRSUs. The Company will continue to evaluate the probability of achieving the performance conditions for the PRSUs at each reporting period and will record compensation expense related to the PRSUs accordingly. Activity under the 2010 Plan and the 2015 Plan is set forth below (in thousands, except share and per share amounts and years): Shares available for grant Stock options outstanding Weighted- average exercise price Weighted- average remaining contractual life (years) Aggregate intrinsic value Balances at December 31, 2015 2,268,938 3,659,713 $ 7.38 8.89 $ 7,099 Additional shares reserved 1,277,442 — $ — Options granted (1,400,461 ) 1,400,461 $ 9.87 Options cancelled 312,258 (312,258 ) $ 9.69 Options exercised (181,893 ) $ 2.38 RSUs granted (652,267 ) PRSUs granted (567,717 ) RSUs cancelled 72,143 PRSUs cancelled 20,971 Balances at September 30, 2016 1,331,307 4,566,023 $ 8.18 8.38 $ 6,834 Options exercisable at September 30, 2016 1,362,560 $ 6.13 6.88 $ 4,491 Options vested and expected to vest at September 30, 2016 4,012,377 $ 8.02 8.28 $ 6,551 The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying stock options and the fair value of the Company’s common stock for stock options that were in-the-money. The weighted-average fair value of options to purchase common stock granted was $6.26 and $7.02 in the nine months ended September 30, 2016 and 2015, respectively. The weighted-average fair value of RSUs granted in the nine months ended September 30, 2016 was $9.83. The weighted average fair value of PRSUs granted in the nine months ended September 30, 2016 was $6.50. No RSUs or PRSUs were granted in the nine months ended September 30, 2015. The fair value of options to purchase common stock vested was $4.0 million and $1.1 million in the nine months ended September 30, 2016 and 2015, respectively. The intrinsic value of options to purchase common stock exercised was $1.2 million and $1.2 million in the nine months ended September 30, 2016 and 2015, respectively. The following table summarizes RSU and PRSU activity for the nine months ended September 30, 2016: Number of Shares Weighted-Average Grant Date Fair Value Balance at December 31, 2015 482,818 $ 10.71 RSUs granted 652,267 $ 9.83 PRSUs granted 567,717 $ 6.50 RSUs vested (143,710 ) $ 10.79 RSUs cancelled (72,143 ) $ 10.51 PRSUs cancelled (20,971 ) $ 6.47 Balance at September 30, 2016 1,465,978 $ 8.75 2015 employee stock purchase plan In January 2015, the Company adopted the 2015 Employee Stock Purchase Plan (the “ESPP”), which became effective upon the closing of the IPO. Employees participating in the ESPP may purchase common stock at 85% of the lesser of the fair market value of common stock on the purchase date or last trading day preceding the offering date. The initial ESPP purchase period commenced in November 2015 and in May 2016, 186,741 shares of common stock were purchased pursuant to the ESPP. At September 30, 2016, cash received from payroll deductions pursuant to the ESPP was $1.0 million. The ESPP provides for automatic annual increases in shares available for grant, beginning on January 1, 2016 and continuing through January 1, 2025. At September 30, 2016, a total of 457,889 shares of common stock are reserved for issuance under the ESPP. Stock-based compensation The Company uses the grant date fair value of its common stock to value both employee and non-employee options when granted. The Company revalues non-employee options each reporting period using the fair market value of the Company’s common stock as of the last day of each reporting period. In determining the fair value of stock options and ESPP purchases, the Company uses the Black-Scholes option-pricing model and, for stock options, the assumptions discussed below. Each of these inputs is subjective and its determination generally requires significant judgment. The fair value of RSU and PRSU awards is based on the grant date share price. Compensation cost is recognized as expense on a straight-line basis over the vesting period for options and RSUs and on an accelerated basis for PRSUs. Expected term —The expected term represents the period that the Company’s stock-based awards are expected to be outstanding and is determined using the simplified method (based on the midpoint between the vesting date and the end of the contractual term). Expected volatility —Because the Company was privately held until February 2015 and did not have any trading history for its common stock prior to its IPO, the expected volatility was estimated based on the average volatility for comparable publicly traded biopharmaceutical companies over a period equal to the expected term of the stock option grants. When selecting comparable publicly traded companies in a similar industry on which it has based its expected stock price volatility, the Company selected companies with comparable characteristics to it, including enterprise value, risk profiles, position within the industry, and with historical share price information sufficient to meet the expected life of the stock-based awards. The historical volatility data was computed using the daily closing prices for the selected companies’ common stock during the equivalent period of the calculated expected term of the stock-based awards. The Company will continue to apply this process until a sufficient amount of historical information regarding the volatility of its own stock price becomes available. Risk-free interest rate —The risk-free interest rate is based on the U.S. Treasury zero coupon issues in effect at the time of grant for periods corresponding with the expected term of the option. Dividend yield —The Company has never paid dividends on its common stock and has no plans to pay dividends on its common stock. Therefore, the Company used an expected dividend yield of zero. The fair value of share-based payments for options granted to employees and directors was estimated on the date of grant using the Black-Scholes option- pricing valuation model based on the following assumptions: Three months ended, Nine months ended, September 30, 2016 September 30, 2015 September 30, 2016 September 30, 2015 Expected term (in years) 6.03 6.03 6.03 6.03 Expected volatility 73.91 % 68.9 – 69.0 % 71.09 % 68.9 –79.7 % Risk-free interest rate 1.20 % 1.67 – 1.73 % 1.36 % 1.28 – 1.73 % Dividend yield — — — — Stock-based compensation related to stock options granted to non-employees is recognized as the stock options vest. The fair value of the stock options granted is calculated at each reporting date using the Black-Scholes option pricing model based on the following assumptions: As of September 30, 2016 2015 Expected term (in years) 6.51 – 10.00 7.51 – 9.27 Expected volatility 74.39% 68.9 – 90.27% Risk-free interest rate 1.28 – 1.55% 1.72 – 1.82% Dividend yield — — The following table summarizes stock-based compensation expense for the three and nine months ended September 30, 2016 and 2015, included in the consolidated statements of operations (in thousands): Three months ended September 30, Nine months ended September 30, 2016 2015 2016 2015 Cost of revenue $ 683 $ 61 $ 1,257 $ 195 Research and development 1,124 373 2,391 823 Selling and marketing 424 144 1,000 403 General and administrative 777 184 1,702 416 Total stock-based compensation expense $ 3,008 $ 762 $ 6,350 $ 1,837 At September 30, 2016, unrecognized compensation expense related to unvested stock options, net of estimated forfeitures, was $14.2 million, which the Company expects to recognize on a straight-line basis over a weighted-average period of 3.0 years. Unrecognized compensation expense related to RSUs at September 30, 2016 was $6.8 million, which the Company expects to recognize on a straight-line basis over a weighted-average period of 2.4 years. At September 30, 2016, there was no unrecognized compensation expense related to PRSUs and no capitalized stock-based employee compensation. |
Net loss per common share
Net loss per common share | 9 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share [Abstract] | |
Net loss per common share | 7. Net loss per common share The following table presents the calculation of basic and diluted net loss per share for the three and nine months ended September 30, 2016 and 2015 (in thousands, except share and per share amounts): Three months ended September 30, Nine months ended September 30, 2016 2015 2016 2015 Net loss $ (24,971 ) $ (22,527 ) $ (75,408 ) $ (65,422 ) Shares used in computing net loss per share, basic and diluted 32,315,038 31,852,796 32,145,806 26,962,821 Net loss per share, basic and diluted $ (0.77 ) $ (0.71 ) $ (2.35 ) $ (2.43 ) The following common stock equivalents have been excluded from diluted net loss per share for the three and nine months ended September 30, 2016 and 2015 because their inclusion would be anti-dilutive: Three and nine months ended September 30, 2016 2015 Shares of common stock subject to outstanding options 4,566,023 3,072,473 Shares of common stock subject to outstanding RSUs 920,232 440,568 Shares of common stock subject to outstanding PRSUs 556,712 — Shares of common stock pursuant to ESPP 145,780 — Shares of common stock subject to unvested early exercise of outstanding options subject to repurchase — 8,080 Total shares of common stock equivalents 6,188,747 3,521,121 |
Geographic information
Geographic information | 9 Months Ended |
Sep. 30, 2016 | |
Segments Geographical Areas [Abstract] | |
Geographic information | 8. Geographic information Revenue by country is determined based on the billing address of the customer. The following presents revenue by country for the three and nine months ended September 30, 2016 and 2015 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 United States $ 5,245 $ 1,601 $ 12,768 $ 3,493 Canada 508 341 1,868 1,081 Rest of world 523 245 1,176 643 Total revenue $ 6,276 $ 2,187 $ 15,812 $ 5,217 Long-lived assets, net, by location are summarized as follows (in thousands): September 30, 2016 December 31, 2015 United States $ 21,226 $ 17,180 Chile — 1,529 Total long-lived assets, net $ 21,226 $ 18,709 |
Summary of significant accoun15
Summary of significant accounting policies (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Principles of consolidation | Principles of consolidation The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. |
Use of estimates | Use of estimates The preparation of 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 liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. The Company believes judgment is involved in determining revenue recognition; the recoverability of long-lived assets; stock-based compensation expense; and income tax uncertainties. The Company bases these estimates on historical and anticipated results, trends, and various other assumptions that the Company believes are reasonable under the circumstances, including assumptions as to future events. Actual results could differ materially from those estimates and assumptions. |
Concentrations of credit risk and other risks and uncertainties | Concentrations of credit risk and other risks and uncertainties Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents. The Company’s cash and cash equivalents are held by financial institutions in the United States and Chile. Such deposits may exceed federally insured limits. |
Cash equivalents | Cash equivalents The Company considers all highly liquid investments with original maturities of three months or less from the date of purchase to be cash equivalents. Cash equivalents consist primarily of amounts invested in money market funds and U.S. government agency securities. |
Marketable securities | Marketable securities All marketable securities have been classified as “available-for-sale” and are carried at estimated fair value as determined based upon quoted market prices or pricing models for similar securities. Management determines the appropriate classification of its marketable securities in debt securities at the time of purchase and reevaluates such designation at each balance sheet date. Short-term marketable securities have maturities less than 365 days at the balance sheet date. Unrealized gains and losses are excluded from earnings and are reported as a component of other comprehensive income (loss). Realized gains and losses and declines in fair value judged to be other than temporary, if any, on available-for-sale securities are included in interest and other income (expense), net. The cost of securities sold is based on the specific-identification method. Interest on marketable securities is included in interest and other income (expense), net. |
Restricted cash | Restricted cash Restricted cash consists of money market funds that serve as: collateral for a security deposit for the Company’s lease agreement for a production facility entered into in September 2015; collateral for a credit card agreement at one of the Company’s financial institutions; and for securing a letter of credit as collateral for a facility sublease agreement. |
Internal-use software | Internal-use software The Company capitalizes third-party costs incurred in the application development stage to design and implement internal-use software. Maintenance and training costs relating to internal-use software are expensed as incurred. Capitalized internal-use software costs are recorded as property and equipment and are amortized over estimated useful lives of up to three years on a straight line basis. Amortization of capitalized internal-use software costs is recorded as sales and marketing expense. During the nine months ended September 30, 2016 and 2015, the Company capitalized $0 and $1.5 million, respectively, of internal-use software development costs. Internal-use software amortization was $990,000 and $390,000 in the nine months ended September 30, 2016 and 2015, respectively. The carrying value of capitalized internal-use software was $440,000 and $1.4 million at September 30, 2016 and December 31, 2015, respectively. The weighted average remaining useful life of capitalized internal-use software at September 30, 2016 was 4 months. |
Leases | Leases The Company rents its facilities under operating lease agreements and recognizes related rent expense on a straight-line basis over the term of the applicable lease agreement. Some of the lease agreements contain rent holidays, scheduled rent increases, lease incentives, and renewal options. Rent holidays and scheduled rent increases are included in the determination of rent expense to be recorded over the lease term. Lease incentives are recognized as a reduction of rent expense on a straight-line basis over the term of the lease. Renewals are not assumed in the determination of the lease term unless they are deemed to be reasonably assured at the inception of the lease. The Company recognizes rent expense beginning on the date it obtains the legal right to use and control the leased space. |
Fair value of financial instruments | Fair value of financial instruments The Company’s financial instruments consist principally of cash and cash equivalents, marketable securities, accounts payable, capital leases and debt relating to equipment financing. The carrying amounts of certain of these financial instruments, including cash and cash equivalents, and accounts payable, approximate fair value due to their short maturities. Based on borrowing rates available to the Company, the carrying value of capital leases approximates fair value. See Note 4, “Fair value measurements” for further information on the fair value of the Company’s financial instruments. |
Revenue recognition | Revenue recognition Revenue is generated from the sale of tests that provide analysis and associated interpretation of the sequencing of parts of the genome. Revenue associated with subsequent re-requisition services was de minimis for all periods presented. Revenue is recognized when persuasive evidence of an arrangement exists; delivery has occurred or services have been rendered; the fee is fixed or determinable; and collectability is reasonably assured. The criterion for whether the fee is fixed or determinable and whether collectability is reasonably assured are based on management’s judgments. When evaluating collectability, in situations where contracted reimbursement coverage does not exist, the Company considers whether the Company has sufficient history to reliably estimate a payer’s individual payment patterns. The Company reviews the number of tests paid against the number of tests billed over at least several months of payment history and the payer’s outstanding balance for unpaid tests to determine whether payments are being made at a consistently high percentage of tests billed and at appropriate amounts given the amount billed. For most payers, the Company has not been able to demonstrate a predictable pattern of collectability, and therefore recognizes revenue when payment is received. For payers who have demonstrated a consistent pattern of payment of tests billed at appropriate amounts, the Company recognizes revenue, at estimated realizable amounts, upon delivery of test results. |
Cost of revenue | Cost of revenue Cost of revenue reflects the aggregate costs incurred in delivering the genetic testing results to clinicians and includes expenses for personnel costs including stock-based compensation, materials and supplies, equipment and infrastructure expenses associated with testing and allocated overhead including rent, equipment depreciation and utilities. Costs associated with performing the Company’s test are recorded as the test is processed regardless of whether and when revenue is recognized with respect to that test. |
Income taxes | Income taxes The Company uses the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial reporting and the tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized. |
Stock-based compensation | Stock-based compensation The Company measures its stock-based payment awards made to employees and directors based on the estimated fair values of the awards and recognizes the compensation expense over the requisite service period. The Company uses the Black-Scholes option-pricing model to estimate the fair value of its stock option awards and employee stock purchase plan (“ESPP”) purchases. The fair value of restricted stock unit (“RSU”) awards with time-based vesting terms is based on the grant date share price. The Company grants performance-based restricted stock unit (“PRSU”) awards to certain employees which vest upon the achievement of certain performance conditions, subject to the employees’ continued service relationship with the Company. The probability of vesting is assessed at each reporting period and compensation cost is adjusted based on this probability assessment. The Company recognizes such compensation expense on an accelerated vesting method. Stock-based compensation expense for awards without a performance condition is recognized using the straight-line method. Stock-based compensation expense is based on the value of the portion of stock-based payment awards that is ultimately expected to vest. As such, the Company’s stock-based compensation is reduced for the estimated forfeitures at the date of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company accounts for compensation expense related to stock options granted to non-employees based on the fair values estimated using the Black-Scholes model. Stock options granted to non-employees are re-measured at each reporting date until the award is vested. |
Net loss per common share | Net loss per common share Basic net loss per common share is calculated by dividing net loss by the weighted-average number of common shares outstanding during the period, without consideration of common stock equivalents. Diluted net loss per share is computed by dividing net loss by the weighted-average number of common share equivalents outstanding for the period determined using the treasury stock method. Potentially dilutive securities, consisting of options to purchase common stock, RSUs and PRSUs, are considered to be common stock equivalents and were excluded from the calculation of diluted net loss per share because their effect would be antidilutive for all periods presented. There were no shares subject to repurchase during the nine months ended September 30, 2016. Common shares subject to repurchase in the amount of 8,080 were excluded from weighted-average shares for the three and nine months ended September 30, 2015. |
Recent accounting pronouncements | Recent accounting pronouncements In August 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-15, Statement of Cash Flows (Topic 230) — Classification of Certain Cash Receipts and Cash Payments In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers Revenue from Contracts with Customers (Topic 606). In August 2014, the FASB issued ASU No. 2014-15 (Subtopic 205- 40), Presentation of Financial Statements—Going Concern: Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern |
Balance sheet components (Table
Balance sheet components (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Balance Sheet Related Disclosures [Abstract] | |
Schedule cash, cash equivalents, short-term investments, and long-term investments | The following is a summary of cash equivalents and marketable securities (in thousands). September 30, 2016 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Money market funds $ 22,779 $ — $ — $ 22,779 U.S. treasury notes 11,007 12 — 11,019 U.S. government agency securities 17,978 6 — 17,984 $ 51,764 $ 18 $ — $ 51,782 Reported as: Cash equivalents $ 18,082 Restricted cash 4,697 Marketable securities 29,003 Total cash equivalents, restricted cash and marketable securities $ 51,782 December 31, 2015 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Money market funds $ 39,998 $ — $ — $ 39,998 U.S. treasury notes 4,006 — — 4,006 U.S. government agency securities 65,586 1 (16 ) 65,571 $ 109,590 $ 1 $ (16 ) $ 109,575 Reported as: Cash equivalents $ 50,964 Restricted cash 4,831 Marketable securities 53,780 Total cash equivalents, restricted cash and marketable securities $ 109,575 |
Schedule of Property and equipment | Property and equipment consisted of the following (in thousands): September 30, 2016 December 31, 2015 Leasehold improvements $ 1,259 $ 2,548 Laboratory equipment 13,492 10,461 Equipment under capital lease 5,871 8,224 Computer equipment 2,488 2,397 Software 2,489 2,368 Furniture and fixtures 238 210 Automobiles 20 20 Construction-in-progress 8,158 1,202 Total property and equipment, gross 34,015 27,430 Accumulated depreciation and amortization (12,789 ) (8,721 ) Total property and equipment, net $ 21,226 $ 18,709 |
Schedule of Accrued liabilities | Accrued liabilities consisted of the following (in thousands): September 30, 2016 December 31, 2015 Accrued compensation and related expenses $ 2,377 $ 2,307 Accrued laboratory materials purchases 137 426 Accrued professional services 618 272 Accrued construction in progress 1,508 — Lease incentive obligation, current 468 — Other 1,242 1,248 Total accrued liabilities $ 6,350 $ 4,253 |
Schedule of Other long-term liabilities | Other long-term liabilities consisted of the following (in thousands): September 30, 2016 December 31, 2015 Lease incentive obligation, non-current $ 4,360 $ 107 Deferred rent, non-current 2,846 98 Other non-current liabilities 174 138 Total other long-term liabilities $ 7,380 $ 343 |
Fair value measurements (Tables
Fair value measurements (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Financial instruments at fair value on a recurring basis | The following tables set forth the fair value of the Company’s consolidated financial instruments that were measured at fair value on a recurring basis as of September 30, 2016 and December 31, 2015 (in thousands): September 30, 2016 Level 1 Level 2 Level 3 Total Financial assets: Money market funds $ 22,779 $ — $ — $ 22,779 U.S. treasury notes 11,019 — — 11,019 U.S. government agency securities — 17,984 — 17,984 Total financial assets $ 33,798 $ 17,984 $ — $ 51,782 December 31, 2015 Level 1 Level 2 Level 3 Total Financial assets: Money market funds $ 39,998 $ — $ — $ 39,998 U.S. treasury notes 4,006 — — 4,006 U.S. government agency securities — 65,571 — 65,571 Total financial assets $ 44,004 $ 65,571 $ — $ 109,575 |
Carrying amount and the estimated fair value of the Company's outstanding debt | The carrying amount and the estimated fair value of the Company’s outstanding debt at September 30, 2016 and December 31, 2015, are as follows (in thousands): September 30, 2016 December 31, 2015 Carrying Amount Fair Value Carrying Amount Fair Value Debt $ 12,946 $ 12,671 $ 7,040 $ 6,952 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Commitments And Contingencies Disclosure [Abstract] | |
Schedule of future minimum payments under operating leases | Future minimum payments under non-cancelable operating leases as of September 30, 2016 are as follows (in thousands): Year ending December 31, Amounts 2016 (remainder of year) $ 2,041 2017 7,043 2018 6,898 2019 6,946 2020 6,917 Thereafter 44,216 Total minimum lease payments $ 74,061 |
Schedule of future payments under loan agreement | Future payments under the Loan Agreement as of September 30, 2016 are as follows (in thousands): Year ending December 31, Amounts 2016 (remainder of year) $ 945 2017 3,728 2018 3,617 2019 3,508 2020 1,997 Total remaining debt payments 13,795 Less: amount representing debt discount (36 ) Less: amount representing interest (814 ) Present value of remaining debt payments 12,945 Less: current portion (3,377 ) Total non-current debt obligation $ 9,568 |
Schedule of future minimum lease payments under capital leases | Future payments under capital leases at September 30, 2016 are as follows (in thousands): Year ending December 31, Amounts 2016 (remainder of year) $ 419 2017 1,350 2018 269 Total capital lease obligations 2,038 Less: amount representing interest (63 ) Present value of net minimum capital lease payments 1,975 Less: current portion (1,383 ) Total non-current capital lease obligations $ 592 |
Stock incentive plans (Tables)
Stock incentive plans (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Schedule of activity under the plans | Activity under the 2010 Plan and the 2015 Plan is set forth below (in thousands, except share and per share amounts and years): Shares available for grant Stock options outstanding Weighted- average exercise price Weighted- average remaining contractual life (years) Aggregate intrinsic value Balances at December 31, 2015 2,268,938 3,659,713 $ 7.38 8.89 $ 7,099 Additional shares reserved 1,277,442 — $ — Options granted (1,400,461 ) 1,400,461 $ 9.87 Options cancelled 312,258 (312,258 ) $ 9.69 Options exercised (181,893 ) $ 2.38 RSUs granted (652,267 ) PRSUs granted (567,717 ) RSUs cancelled 72,143 PRSUs cancelled 20,971 Balances at September 30, 2016 1,331,307 4,566,023 $ 8.18 8.38 $ 6,834 Options exercisable at September 30, 2016 1,362,560 $ 6.13 6.88 $ 4,491 Options vested and expected to vest at September 30, 2016 4,012,377 $ 8.02 8.28 $ 6,551 |
Summary of RSU and PRSU activity | The following table summarizes RSU and PRSU activity for the nine months ended September 30, 2016: Number of Shares Weighted-Average Grant Date Fair Value Balance at December 31, 2015 482,818 $ 10.71 RSUs granted 652,267 $ 9.83 PRSUs granted 567,717 $ 6.50 RSUs vested (143,710 ) $ 10.79 RSUs cancelled (72,143 ) $ 10.51 PRSUs cancelled (20,971 ) $ 6.47 Balance at September 30, 2016 1,465,978 $ 8.75 |
Summary of stock based compensation expense related to stock options included in consolidated statements of operations | The following table summarizes stock-based compensation expense for the three and nine months ended September 30, 2016 and 2015, included in the consolidated statements of operations (in thousands): Three months ended September 30, Nine months ended September 30, 2016 2015 2016 2015 Cost of revenue $ 683 $ 61 $ 1,257 $ 195 Research and development 1,124 373 2,391 823 Selling and marketing 424 144 1,000 403 General and administrative 777 184 1,702 416 Total stock-based compensation expense $ 3,008 $ 762 $ 6,350 $ 1,837 |
Options | |
Schedule of assumptions used in determination of fair value of options using Black-Scholes model | The fair value of share-based payments for options granted to employees and directors was estimated on the date of grant using the Black-Scholes option- pricing valuation model based on the following assumptions: Three months ended, Nine months ended, September 30, 2016 September 30, 2015 September 30, 2016 September 30, 2015 Expected term (in years) 6.03 6.03 6.03 6.03 Expected volatility 73.91 % 68.9 – 69.0 % 71.09 % 68.9 –79.7 % Risk-free interest rate 1.20 % 1.67 – 1.73 % 1.36 % 1.28 – 1.73 % Dividend yield — — — — |
Non-Employee Options | |
Schedule of assumptions used in determination of fair value of options using Black-Scholes model | The fair value of the stock options granted is calculated at each reporting date using the Black-Scholes option pricing model based on the following assumptions: As of September 30, 2016 2015 Expected term (in years) 6.51 – 10.00 7.51 – 9.27 Expected volatility 74.39% 68.9 – 90.27% Risk-free interest rate 1.28 – 1.55% 1.72 – 1.82% Dividend yield — — |
Net loss per common share (Tabl
Net loss per common share (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings per share, basic and diluted | The following table presents the calculation of basic and diluted net loss per share for the three and nine months ended September 30, 2016 and 2015 (in thousands, except share and per share amounts): Three months ended September 30, Nine months ended September 30, 2016 2015 2016 2015 Net loss $ (24,971 ) $ (22,527 ) $ (75,408 ) $ (65,422 ) Shares used in computing net loss per share, basic and diluted 32,315,038 31,852,796 32,145,806 26,962,821 Net loss per share, basic and diluted $ (0.77 ) $ (0.71 ) $ (2.35 ) $ (2.43 ) |
Schedule of Antidilutive securities excluded from computation of earnings per share | The following common stock equivalents have been excluded from diluted net loss per share for the three and nine months ended September 30, 2016 and 2015 because their inclusion would be anti-dilutive: Three and nine months ended September 30, 2016 2015 Shares of common stock subject to outstanding options 4,566,023 3,072,473 Shares of common stock subject to outstanding RSUs 920,232 440,568 Shares of common stock subject to outstanding PRSUs 556,712 — Shares of common stock pursuant to ESPP 145,780 — Shares of common stock subject to unvested early exercise of outstanding options subject to repurchase — 8,080 Total shares of common stock equivalents 6,188,747 3,521,121 |
Geographic information (Tables)
Geographic information (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Segments Geographical Areas [Abstract] | |
Schedule of Revenue by country | Revenue by country is determined based on the billing address of the customer. The following presents revenue by country for the three and nine months ended September 30, 2016 and 2015 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 United States $ 5,245 $ 1,601 $ 12,768 $ 3,493 Canada 508 341 1,868 1,081 Rest of world 523 245 1,176 643 Total revenue $ 6,276 $ 2,187 $ 15,812 $ 5,217 |
Schedule of long-lived assets by location | Long-lived assets, net, by location are summarized as follows (in thousands): September 30, 2016 December 31, 2015 United States $ 21,226 $ 17,180 Chile — 1,529 Total long-lived assets, net $ 21,226 $ 18,709 |
Organization and description 22
Organization and description of business (Details) $ / shares in Units, $ in Millions | Feb. 12, 2015$ / sharesshares | Feb. 28, 2015USD ($)$ / sharesshares | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Sep. 30, 2016segment$ / sharesshares | Dec. 31, 2015$ / sharesshares |
Number of operating segments | segment | 1 | |||||
Number of common stock shares issued | 32,445,924 | 31,935,121 | ||||
Shares authorized | 420,000,000 | |||||
Common stock, shares authorized | 400,000,000 | 400,000,000 | ||||
Preferred stock, authorized shares | 20,000,000 | 20,000,000 | ||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | ||||
Preferred stock, shares outstanding | 0 | 0 | ||||
Immaterial Error Correction | ||||||
Reclassification of asset impairment charges from other income expense to general and administrative expense | $ | $ 0.7 | $ 0.2 | ||||
IPO | ||||||
Number of common stock shares issued | 7,302,500 | |||||
Sale price on common stock (in dollars per share) | $ / shares | $ 16 | |||||
Net proceeds from issue of common stock | $ | $ 105.7 | |||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.0001 | |||||
Common stock | ||||||
Number of common stock shares converted from preferred stock | 23,521,889 | |||||
Common stock, shares authorized | 400,000,000 | |||||
Preferred Stock | ||||||
Preferred stock, authorized shares | 20,000,000 | |||||
Maximum | Common stock | IPO | ||||||
Number additional shares on common stock can be purchased by underwriters | 952,500 |
Summary of significant accoun23
Summary of significant accounting policies - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Internal-use software development costs incurred and capitalized | $ 0 | $ 1,500,000 | |||
Internal-use software amortization | 990,000 | $ 390,000 | |||
Carrying value of capitalized software | $ 440,000 | $ 440,000 | $ 1,400,000 | ||
Weighted average remaining useful life of internal-use software | 4 months | ||||
Shares subject to repurchase | 0 | ||||
Shares subject to repurchase, excluded from basic loss per share calculation | 6,188,747 | 3,521,121 | 6,188,747 | 3,521,121 | |
Unvested early exercise of outstanding options subject to repurchase | |||||
Shares subject to repurchase, excluded from basic loss per share calculation | 8,080 | 8,080 | |||
Software | |||||
Useful lives | 3 years |
Balance sheet components - Cash
Balance sheet components - Cash equivalents and marketable securities (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2016 | Dec. 31, 2015 | |
Investment Holdings | |||
Amortized Cost | $ 51,764,000 | $ 51,764,000 | $ 109,590,000 |
Gross Unrealized Gains | 18,000 | 18,000 | 1,000 |
Gross Unrealized Losses | (16,000) | ||
Estimated Fair Value | 51,782,000 | 51,782,000 | 109,575,000 |
Cash equivalents | 18,082,000 | 18,082,000 | 50,964,000 |
Restricted cash | 4,697,000 | 4,697,000 | 4,831,000 |
Marketable securities | 29,003,000 | 29,003,000 | 53,780,000 |
Realized gains or losses on available-for-sale securities | 0 | 0 | |
Money market funds | |||
Investment Holdings | |||
Amortized Cost | 22,779,000 | 22,779,000 | 39,998,000 |
Estimated Fair Value | 22,779,000 | 22,779,000 | 39,998,000 |
U.S. treasury notes | |||
Investment Holdings | |||
Amortized Cost | 11,007,000 | 11,007,000 | 4,006,000 |
Gross Unrealized Gains | 12,000 | 12,000 | |
Estimated Fair Value | 11,019,000 | 11,019,000 | 4,006,000 |
U.S. government agency securities | |||
Investment Holdings | |||
Amortized Cost | 17,978,000 | 17,978,000 | 65,586,000 |
Gross Unrealized Gains | 6,000 | 6,000 | 1,000 |
Gross Unrealized Losses | (16,000) | ||
Estimated Fair Value | $ 17,984,000 | $ 17,984,000 | $ 65,571,000 |
Balance sheet components - Prop
Balance sheet components - Property and equipment (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Property and equipment | |||
Total property and equipment, gross | $ 34,015 | $ 27,430 | |
Accumulated depreciation and amortization | (12,789) | (8,721) | |
Total property and equipment, net | 21,226 | 18,709 | |
Depreciation and amortization | 4,934 | $ 3,718 | |
Leasehold improvements | |||
Property and equipment | |||
Total property and equipment, gross | 1,259 | 2,548 | |
Laboratory equipment | |||
Property and equipment | |||
Total property and equipment, gross | 13,492 | 10,461 | |
Equipment under capital lease | |||
Property and equipment | |||
Total property and equipment, gross | 5,871 | 8,224 | |
Computer equipment | |||
Property and equipment | |||
Total property and equipment, gross | 2,488 | 2,397 | |
Software | |||
Property and equipment | |||
Total property and equipment, gross | 2,489 | 2,368 | |
Furniture and fixtures | |||
Property and equipment | |||
Total property and equipment, gross | 238 | 210 | |
Automobiles | |||
Property and equipment | |||
Total property and equipment, gross | 20 | 20 | |
Construction-in-progress | |||
Property and equipment | |||
Total property and equipment, gross | $ 8,158 | $ 1,202 |
Balance sheet components - Accr
Balance sheet components - Accrued liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Balance Sheet Related Disclosures [Abstract] | ||
Accrued compensation and related expenses | $ 2,377 | $ 2,307 |
Accrued laboratory materials purchases | 137 | 426 |
Accrued professional services | 618 | 272 |
Accrued construction in progress | 1,508 | |
Lease incentive obligation, current | 468 | |
Other | 1,242 | 1,248 |
Total accrued liabilities | $ 6,350 | $ 4,253 |
Balance sheet components - Othe
Balance sheet components - Other long-term liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Balance Sheet Related Disclosures [Abstract] | ||
Lease incentive obligation, non-current | $ 4,360 | $ 107 |
Deferred rent, non-current | 2,846 | 98 |
Other non-current liabilities | 174 | 138 |
Total other long-term liabilities | $ 7,380 | $ 343 |
Fair value measurements (Detail
Fair value measurements (Details) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Total financial assets | $ 51,782,000 | $ 109,575,000 |
Transfers from Level 1 to Level 2 | 0 | 0 |
Transfers from Level 2 to Level 1 | 0 | 0 |
Recurring basis | ||
Total financial assets | 51,782,000 | 109,575,000 |
Recurring basis | Level 1 | ||
Total financial assets | 33,798,000 | 44,004,000 |
Recurring basis | Level 2 | ||
Total financial assets | 17,984,000 | 65,571,000 |
Recurring basis | Level 2 | Carrying Amount | ||
Debt | 12,946,000 | 7,040,000 |
Recurring basis | Level 2 | Fair Value | ||
Debt | 12,671,000 | 6,952,000 |
Recurring basis | Money market funds | ||
Total financial assets | 22,779,000 | 39,998,000 |
Recurring basis | Money market funds | Level 1 | ||
Total financial assets | 22,779,000 | 39,998,000 |
U.S. treasury notes | ||
Total financial assets | 11,019,000 | 4,006,000 |
U.S. treasury notes | Recurring basis | ||
Total financial assets | 11,019,000 | 4,006,000 |
U.S. treasury notes | Recurring basis | Level 1 | ||
Total financial assets | 11,019,000 | 4,006,000 |
U.S. government agency securities | ||
Total financial assets | 17,984,000 | 65,571,000 |
U.S. government agency securities | Recurring basis | ||
Total financial assets | 17,984,000 | 65,571,000 |
U.S. government agency securities | Recurring basis | Level 2 | ||
Total financial assets | $ 17,984,000 | $ 65,571,000 |
Commitments and contingencies -
Commitments and contingencies - Operating Leases (Details) - USD ($) $ in Thousands | 1 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Future minimum lease payments under operating leases | ||||
2016 (remainder of year) | $ 2,041 | |||
2,017 | 7,043 | |||
2,018 | 6,898 | |||
2,019 | 6,946 | |||
2,020 | 6,917 | |||
Thereafter | 44,216 | |||
Total minimum lease payments | 74,061 | |||
Rent expense | 6,300 | $ 2,700 | ||
Other Noncurrent Assets | ||||
Security Deposit | 800 | $ 800 | ||
Office Facility In San Francisco | New Leases | ||||
Additional term of lease | 10 years | |||
Actual lease expiration term | 2026-07 | |||
Lease term | 10 years | |||
Security Deposit | $ 4,600 | 4,600 | ||
Lease incentive in form of lease improvements | $ 5,200 | $ 5,200 | ||
Future minimum lease payments under operating leases | ||||
Total minimum lease payments | $ 70,800 |
Commitments and contingencies30
Commitments and contingencies - Equipment Financing (Details) - USD ($) | 1 Months Ended | 9 Months Ended | ||
Jul. 31, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Future payments under the Loan Agreement | ||||
2016 (remainder of year) | $ 945,000 | |||
2,017 | 3,728,000 | |||
2,018 | 3,617,000 | |||
2,019 | 3,508,000 | |||
2,020 | 1,997,000 | |||
Total remaining debt payments | 13,795,000 | |||
Less: amount representing debt discount | (36,000) | |||
Less: amount representing interest | (814,000) | |||
Present value of remaining debt payments | 12,945,000 | |||
Less: current portion | (3,377,000) | $ (1,536,000) | ||
Total non-current debt obligation | 9,568,000 | $ 5,504,000 | ||
Loan and Security Agreement | ||||
Maximum borrowing capacity | $ 2,500,000 | |||
Loan and Security Agreement | Secured Debt | ||||
Maximum borrowing capacity | $ 15,000,000 | |||
Obligations under Loan Agreement | 12,900,000 | |||
Debt issuance cost | 47,000 | |||
Future payments under the Loan Agreement | ||||
Interest expense | $ 215,000 | $ 0 | ||
Loan and Security Agreement | Prime Rate | Secured Debt | ||||
Basis reduction on variable rate (as a percent) | 0.25% |
Commitments and Contingencies31
Commitments and Contingencies - Capital Leases (Details) - USD ($) | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Lease term | 3 years | ||
Future payments under the capital lease | |||
2016 (remainder of year) | $ 419,000 | ||
2,017 | 1,350,000 | ||
2,018 | 269,000 | ||
Total capital lease obligations | 2,038,000 | ||
Less: amount representing interest | (63,000) | ||
Present value of net minimum capital lease payments | 1,975,000 | ||
Less: current portion | (1,383,000) | $ (1,588,000) | |
Total non-current capital lease obligations | 592,000 | 1,576,000 | |
Interest expense | 84,000 | $ 105,000 | |
Property and equipment under capital lease | 5,900,000 | 8,200,000 | |
Accumulated depreciation and amortization | $ 3,100,000 | $ 2,800,000 | |
Minimum | |||
Interest rate (as a percent) | 3.80% | ||
Maximum | |||
Interest rate (as a percent) | 4.30% |
Stock incentive plans - Additio
Stock incentive plans - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 9 Months Ended | |||
Feb. 29, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Jan. 31, 2015 | |
RSUs | |||||
Stock incentive plan | |||||
Number of shares outstanding | 1,465,978 | 482,818 | |||
Vested and expected to vest | |||||
Weighted-average grant date fair value (in dollars per share) | $ 9.83 | ||||
Units granted | (652,267) | 0 | |||
PRSU | |||||
Vested and expected to vest | |||||
Weighted-average grant date fair value (in dollars per share) | $ 6.50 | ||||
Units granted | (567,717) | 0 | |||
2010 Plan | |||||
Stock incentive plan | |||||
Additional shares reserved | 120,452 | ||||
2015 Plan | |||||
Stock incentive plan | |||||
Additional shares reserved | 4,370,452 | ||||
2015 Plan | PRSU | |||||
Stock incentive plan | |||||
Vesting period | 12 months | ||||
Number of shares outstanding | 546,746 | ||||
Total grant date fair value of shares outstanding | $ 3.6 | ||||
Vested and expected to vest | |||||
Units granted | (567,717) | ||||
Stock incentive plans | |||||
Stock incentive plan | |||||
Vesting period | 4 years | ||||
Vesting rate upon anniversaries (as a percent) | 25.00% | ||||
Monthly vesting rate thereafter (as a percent) | 2.08% | ||||
Stock incentive plans | RSUs | |||||
Stock incentive plan | |||||
Vesting period | 3 years | ||||
Vested and expected to vest | |||||
Units granted | (652,267) | ||||
Stock incentive plans | Options | |||||
Stock incentive plan | |||||
Additional shares reserved | 1,277,442 | ||||
Vested and expected to vest | |||||
Weighted-average grant date fair value (in dollars per share) | $ 6.26 | $ 7.02 | |||
Fair value of options granted | $ 4 | $ 1.1 | |||
Exercised, aggregate intrinsic value | $ 1.2 | $ 1.2 | |||
Stock incentive plans | First anniversary | RSUs | |||||
Stock incentive plan | |||||
Vesting rate upon anniversaries (as a percent) | 33.33% | ||||
Stock incentive plans | Second anniversary | RSUs | |||||
Stock incentive plan | |||||
Vesting rate upon anniversaries (as a percent) | 33.33% | ||||
Stock incentive plans | Third anniversary | RSUs | |||||
Stock incentive plan | |||||
Vesting rate upon anniversaries (as a percent) | 33.33% | ||||
Minimum | 2010 Plan | |||||
Stock incentive plan | |||||
Employees holding voting rights of all classes of stock (as a percent) | 10.00% | ||||
Exercise price of options on common stock (as a percent) | 110.00% | ||||
Minimum | 2015 Plan | PRSU | |||||
Stock incentive plan | |||||
Target number to holders (in percent) | 0.00% | ||||
Maximum | 2010 Plan | |||||
Stock incentive plan | |||||
Term of options granted | 10 years | ||||
Maximum | 2015 Plan | PRSU | |||||
Stock incentive plan | |||||
Target number to holders (in percent) | 100.00% |
Stock incentive plans - Stock i
Stock incentive plans - Stock incentive plans (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Jan. 31, 2015 | |
RSUs | ||||
Activity under the plan | ||||
Units granted | (652,267) | 0 | ||
Units cancelled | 72,143 | |||
PRSU | ||||
Activity under the plan | ||||
Units granted | (567,717) | 0 | ||
Units cancelled | 20,971 | |||
Stock incentive plans | Options | ||||
Activity under the plan | ||||
Shares available for grant | 2,268,938 | |||
Balance at the beginning of the period | 3,659,713 | |||
Additional shares reserved | 1,277,442 | |||
Options granted (in shares) | 1,400,461 | |||
Option cancelled (in shares) | (312,258) | |||
Options exercised (in shares) | (181,893) | |||
Shares available for grant | 1,331,307 | 2,268,938 | ||
Balance at the end of the period | 4,566,023 | 3,659,713 | ||
Weighted-average exercise price | ||||
Balance at the beginning of the period (in dollars per share) | $ 7.38 | |||
Options granted (in dollars per share) | 9.87 | |||
Options cancelled (in dollars per share) | 9.69 | |||
Options exercised (in dollars per share) | 2.38 | |||
Balance at the end of the period (in dollars per share) | $ 8.18 | $ 7.38 | ||
Additional information | ||||
Exercisable, Number of shares | 1,362,560 | |||
Exercisable, weighted-average exercise price (in dollars per share) | $ 6.13 | |||
Weighted-average remaining contractual life | 8 years 4 months 17 days | 8 years 10 months 21 days | ||
Exercisable, weighted-average remaining contractual life | 6 years 10 months 17 days | |||
Aggregate intrinsic value | $ 6,834 | $ 7,099 | ||
Exercisable, aggregate intrinsic value | $ 4,491 | |||
Vested and expected to vest | ||||
Number of shares | 4,012,377 | |||
Weighted-average exercise price (in dollars per share) | $ 8.02 | |||
Weighted-average remaining contractual life | 8 years 3 months 11 days | |||
Aggregate intrinsic value | $ 6,551 | |||
Stock incentive plans | RSUs | ||||
Activity under the plan | ||||
Units granted | (652,267) | |||
Units cancelled | 72,143 | |||
2015 Plan | ||||
Activity under the plan | ||||
Additional shares reserved | 4,370,452 | |||
2015 Plan | PRSU | ||||
Activity under the plan | ||||
Units granted | (567,717) | |||
Units cancelled | 20,971 |
Stock incentive plans - RSU and
Stock incentive plans - RSU and PRSU Activity (Details) - $ / shares | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
RSUs | ||
Number of Shares | ||
Balance at the beginning of the period (in shares) | 482,818 | |
Granted (in shares) | 652,267 | 0 |
Vested (in shares) | (143,710) | |
Cancelled (in shares) | (72,143) | |
Balance at the end of the period (in shares) | 1,465,978 | |
Weighted-Average Grant Date Fair Value | ||
Balance at the beginning of the period (in dollars per share) | $ 10.71 | |
Granted (in dollars per share) | 9.83 | |
Vested (in dollars per share) | 10.79 | |
Cancelled (in dollars per share) | 10.51 | |
Balance at the end of the period (in dollars per share) | $ 8.75 | |
PRSU | ||
Number of Shares | ||
Granted (in shares) | 567,717 | 0 |
Cancelled (in shares) | (20,971) | |
Weighted-Average Grant Date Fair Value | ||
Granted (in dollars per share) | $ 6.50 | |
Cancelled (in dollars per share) | $ 6.47 |
Stock incentive plans - Risk-fr
Stock incentive plans - Risk-free interest rate & Dividend yield (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Jan. 31, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Non-Employee Options | |||||
Assumptions used in determination of fair value of options using the Black-Scholes option pricing valuation model | |||||
Expected volatility | 74.39% | ||||
Non-Employee Options | Minimum | |||||
Assumptions used in determination of fair value of options using the Black-Scholes option pricing valuation model | |||||
Expected term (in years) | 6 years 6 months 4 days | 7 years 6 months 4 days | |||
Expected volatility | 68.90% | ||||
Risk-free interest rate | 1.28% | 1.72% | |||
Non-Employee Options | Maximum | |||||
Assumptions used in determination of fair value of options using the Black-Scholes option pricing valuation model | |||||
Expected term (in years) | 10 years | 9 years 3 months 7 days | |||
Expected volatility | 90.27% | ||||
Risk-free interest rate | 1.55% | 1.82% | |||
Employees and directors stock options | Options | |||||
Assumptions used in determination of fair value of options using the Black-Scholes option pricing valuation model | |||||
Expected term (in years) | 6 years 11 days | 6 years 11 days | 6 years 11 days | 6 years 11 days | |
Expected volatility | 73.91% | 71.09% | |||
Risk-free interest rate | 1.20% | 1.36% | |||
Employees and directors stock options | Options | Minimum | |||||
Assumptions used in determination of fair value of options using the Black-Scholes option pricing valuation model | |||||
Expected volatility | 68.90% | 68.90% | |||
Risk-free interest rate | 1.67% | 1.28% | |||
Employees and directors stock options | Options | Maximum | |||||
Assumptions used in determination of fair value of options using the Black-Scholes option pricing valuation model | |||||
Expected volatility | 69.00% | 79.70% | |||
Risk-free interest rate | 1.73% | 1.73% | |||
ESPP | |||||
Assumptions used in determination of fair value of options using the Black-Scholes option pricing valuation model | |||||
Purchase price of common stock of the lesser of fair market value on the purchase date or the last trading day preceding the offering date (as a percent) | 85.00% | ||||
Number of shares purchased | 186,741 | ||||
Cash received from payroll deductions | $ 1 | ||||
Common stock reserved for future issuance | 457,889 | 457,889 |
Stock incentive plans - Stock-b
Stock incentive plans - Stock-based compensation expense (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Stock-based compensation | ||||
Total stock-based compensation expense | $ 3,008,000 | $ 762,000 | $ 6,350,000 | $ 1,837,000 |
Unrecognized stock-based compensation | 14,200,000 | $ 14,200,000 | ||
Expected period to recognize on a straight-line basis | 3 years | |||
Capitalized stock-based employee compensation | $ 0 | |||
RSUs | ||||
Stock-based compensation | ||||
Unrecognized stock-based compensation | 6,800,000 | $ 6,800,000 | ||
Expected period to recognize on a straight-line basis | 2 years 4 months 24 days | |||
PRSU | ||||
Stock-based compensation | ||||
Unrecognized stock-based compensation | 0 | $ 0 | ||
Cost of revenue | ||||
Stock-based compensation | ||||
Total stock-based compensation expense | 683,000 | 61,000 | 1,257,000 | 195,000 |
Research and development | ||||
Stock-based compensation | ||||
Total stock-based compensation expense | 1,124,000 | 373,000 | 2,391,000 | 823,000 |
Selling and marketing | ||||
Stock-based compensation | ||||
Total stock-based compensation expense | 424,000 | 144,000 | 1,000,000 | 403,000 |
General and administrative | ||||
Stock-based compensation | ||||
Total stock-based compensation expense | $ 777,000 | $ 184,000 | $ 1,702,000 | $ 416,000 |
Net loss per common share (Deta
Net loss per common share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Net loss per common share | ||||
Net loss | $ (24,971) | $ (22,527) | $ (75,408) | $ (65,422) |
Shares used in computing net loss per share, basic and diluted | 32,315,038 | 31,852,796 | 32,145,806 | 26,962,821 |
Net loss per share, basic and diluted | $ (0.77) | $ (0.71) | $ (2.35) | $ (2.43) |
Antidilutive shares excluded from diluted net loss per share | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 6,188,747 | 3,521,121 | 6,188,747 | 3,521,121 |
Options | ||||
Antidilutive shares excluded from diluted net loss per share | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 4,566,023 | 3,072,473 | 4,566,023 | 3,072,473 |
RSUs | ||||
Antidilutive shares excluded from diluted net loss per share | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 920,232 | 440,568 | 920,232 | 440,568 |
PRSU | ||||
Antidilutive shares excluded from diluted net loss per share | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 556,712 | 556,712 | ||
ESPP | ||||
Antidilutive shares excluded from diluted net loss per share | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 145,780 | 145,780 | ||
Unvested early exercise of outstanding options subject to repurchase | ||||
Antidilutive shares excluded from diluted net loss per share | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 8,080 | 8,080 |
Geographic information (Details
Geographic information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Geographic information | |||||
Revenue | $ 6,276 | $ 2,187 | $ 15,812 | $ 5,217 | |
Total Long-lived assets, net | 21,226 | 21,226 | $ 18,709 | ||
United States | |||||
Geographic information | |||||
Revenue | 5,245 | 1,601 | 12,768 | 3,493 | |
Total Long-lived assets, net | 21,226 | 21,226 | 17,180 | ||
Canada. | |||||
Geographic information | |||||
Revenue | 508 | 341 | 1,868 | 1,081 | |
Rest of World | |||||
Geographic information | |||||
Revenue | $ 523 | $ 245 | $ 1,176 | $ 643 | |
Chile | |||||
Geographic information | |||||
Total Long-lived assets, net | $ 1,529 |