Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | Apr. 28, 2017 | |
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 | Mar. 31, 2017 | |
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 | 42,314,403 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 43,439 | $ 66,825 |
Marketable securities | 53,342 | 25,798 |
Accounts receivable | 2,032 | 1,153 |
Prepaid expenses and other current assets | 8,582 | 8,024 |
Total current assets | 107,395 | 101,800 |
Property and equipment, net | 26,604 | 23,793 |
Restricted cash | 4,697 | 4,697 |
Intangible assets, net | 4,122 | |
Goodwill | 9,432 | |
Other assets | 372 | 361 |
Total assets | 152,622 | 130,651 |
Current liabilities: | ||
Accounts payable | 4,953 | 3,352 |
Accrued liabilities | 13,112 | 6,711 |
Capital lease obligation, current portion | 1,647 | 1,309 |
Debt, current portion | 3,381 | |
Total current liabilities | 19,712 | 14,753 |
Capital lease obligation, net of current portion | 1,166 | 266 |
Debt, net of current portion | 38,921 | 8,721 |
Other long-term liabilities | 10,524 | 7,837 |
Total liabilities | 70,323 | 31,577 |
Commitments and contingencies (Note 6) | ||
Stockholders’ equity: | ||
Preferred stock, $0.0001 par value: Authorized: 20,000,000 shares; Issued and outstanding: no shares as of March 31, 2017 and December 31, 2016 | ||
Common stock, $0.0001 par value: Authorized: 400,000,000 shares; Issued and outstanding: 42,307,799 and 41,143,513 shares as of March 31, 2017 and December 31, 2016, respectively | 4 | 4 |
Accumulated other comprehensive loss | (36) | |
Additional paid-in capital | 384,477 | 374,288 |
Accumulated deficit | (302,146) | (275,218) |
Total stockholders’ equity | 82,299 | 99,074 |
Total liabilities and stockholders’ equity | $ 152,622 | $ 130,651 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2017 | Dec. 31, 2016 |
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 | 42,307,799 | 41,143,513 |
Common stock, shares outstanding | 42,307,799 | 41,143,513 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Income Statement [Abstract] | ||
Revenue | $ 10,338 | $ 3,955 |
Costs and operating expenses: | ||
Cost of revenue | 9,329 | 5,987 |
Research and development | 10,023 | 10,660 |
Selling and marketing | 11,572 | 7,043 |
General and administrative | 6,751 | 5,755 |
Total costs and operating expenses | 37,675 | 29,445 |
Loss from operations | (27,337) | (25,490) |
Other income (expense), net | (691) | (16) |
Interest expense | (322) | (84) |
Net loss before taxes | (28,350) | (25,590) |
Income tax benefit | (1,422) | |
Net loss | $ (26,928) | $ (25,590) |
Net loss per share, basic and diluted | $ (0.64) | $ (0.80) |
Shares used in computing net loss per share, basic and diluted | 42,318,136 | 31,964,541 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Statement Of Income And Comprehensive Income [Abstract] | ||
Net loss | $ (26,928) | $ (25,590) |
Other comprehensive income (loss): | ||
Unrealized income (loss) on available-for-sale marketable securities, net of tax | (36) | 43 |
Comprehensive loss | $ (26,964) | $ (25,547) |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Cash flows from operating activities: | ||
Net loss | $ (26,928) | $ (25,590) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 1,733 | 1,555 |
Stock-based compensation | 3,278 | 1,465 |
Amortization of premium on marketable securities | 40 | 91 |
Loss on disposal of assets | 268 | 186 |
Changes in operating assets and liabilities net of effects of business combination: | ||
Accounts receivable | (605) | |
Prepaid expenses and other current assets | (506) | (1,969) |
Other assets | (11) | 162 |
Accounts payable | 1,858 | (394) |
Accrued expenses and other liabilities | (1,157) | 506 |
Net cash used in operating activities | (22,030) | (23,988) |
Cash flows from investing activities: | ||
Purchases of marketable securities | (45,113) | (60,319) |
Proceeds from maturities of marketable securities | 17,493 | 37,500 |
Acquisition of business, acquired cash | 54 | |
Purchases of property and equipment | (1,343) | (1,037) |
Net cash used in investing activities | (28,909) | (23,856) |
Cash flows from financing activities: | ||
Proceeds from exercise of stock options | 696 | 210 |
Proceeds from loan agreement | 2,500 | |
Proceeds from loan and security agreement | 39,661 | |
Loan payments | (12,102) | (386) |
Capital lease principal payments | (702) | (404) |
Net cash provided by financing activities | 27,553 | 1,920 |
Net decrease in cash, cash equivalents and restricted cash | (23,386) | (45,924) |
Cash, cash equivalents and restricted cash at beginning of period | 71,522 | 78,069 |
Cash, cash equivalents and restricted cash at end of period | 48,136 | 32,145 |
Supplemental cash flow information: | ||
Interest paid | 296 | 84 |
Supplemental cash flow information of non-cash investing and financing activities: | ||
Equipment acquired through capital leases | 1,940 | |
Purchases of property and equipment in accounts payable and accrued liabilities | 3,050 | $ 410 |
Warrants issued pursuant to loan and security agreement | 740 | |
Common stock issued for acquisition of business | 5,475 | |
Consideration payable for acquisition of business | $ 6,909 |
Organization and description of
Organization and description of business | 3 Months Ended |
Mar. 31, 2017 | |
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 production facility and headquarters is located in San Francisco, California. The Company currently has more than 20,000 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 future. For the year ended December 31, 2016, the Company’s net loss was $100.3 million, and for the three months ended March 31, 2017, the Company’s net loss was $26.9 million. At March 31, 2017, the Company’s accumulated deficit was $302.1 million. To date, the Company has generated only limited revenue, and it may never achieve revenue sufficient to offset its expenses. The Company believes its existing cash and cash equivalents as of March 31, 2017, and revenue from the sale of its tests will be sufficient to meet its anticipated cash requirements for the 12-month period following the filing date of this report. Beyond this 12-month period, the Company intends to generate sufficient cash from operations to fund its future operating needs, but there can be no assurance it will be able to do so. The Company may need to raise additional funding to finance operations prior to achieving profitability. Company management regularly considers fundraising opportunities and will determine the timing, nature and amount of financings based upon various factors, including market conditions and management’s operating plans. The Company may in the future elect to finance operations by selling equity or debt securities or borrowing money. If additional funding is required, there can be no assurance that additional funds will be available to the Company on acceptable terms on a timely basis, if at all. If the Company is unable to obtain additional funding when needed, it will need to curtail planned activities to reduce costs. Doing so will likely have an unfavorable effect on the Company’s ability to execute on its business plan, and have an adverse effect on its business, results of operations and future prospects. The Company has implemented the guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Update No. 2014-15, Presentation of Financial Statements – Going Concern 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, 2016. The results for the three months ended March 31, 2017 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, were immaterial to the Company’s results for the first and second quarters of 2016, did 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 three months ended March 31, 2016 reflect the following immaterial reclassification adjustment: reclassification for asset impairment charges from other income (expense) to general and administrative expense of $0.2 million. |
Summary of significant accounti
Summary of significant accounting policies | 3 Months Ended |
Mar. 31, 2017 | |
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. 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 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 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. Accounts receivable The Company receives payment for its tests from patients, institutional customers and third-party payers. 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. Accounts receivable balances primarily represent patient, institutional customer and Medicare billings. 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. Cash, cash equivalents and restricted cash The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the unaudited condensed consolidated balance sheets that sum to the total of the same amounts shown in the unaudited statements of cash flows (in thousands): March 31, 2017 March 31, 2016 Cash and cash equivalents $ 43,439 $ 27,314 Restricted cash 4,697 4,831 Total cash, cash equivalents and restricted cash $ 48,136 $ 32,145 Business combinations The tangible and identifiable intangible assets acquired and liabilities assumed in a business combination are recorded based on their estimated fair values as of the business combination date, including identifiable intangible assets which either arise from a contractual or legal right or are separable from goodwill. The Company bases the estimated fair value of identifiable intangible assets acquired in a business combination on independent valuations that use information and assumptions provided by management, which consider management’s estimates of inputs and assumptions that a market participant would use. Any excess purchase price over the estimated fair value assigned to the net tangible and identifiable intangible assets acquired and liabilities assumed is recorded to goodwill. The use of alternative valuation assumptions, including estimated revenue projections, growth rates, cash flows, discount rates, estimated useful lives and probabilities surrounding the achievement of contingent milestones could result in different purchase price allocations and amortization expense in current and future periods. In circumstances where an acquisition involves a contingent consideration arrangement that meets the definition of a liability under FASB Accounting Standards Codification (“ASC”) Topic 480, Distinguishing Liabilities from Equity Transaction costs associated with acquisitions are expensed as incurred in general and administrative expenses. Results of operations and cash flows of acquired companies are included in the Company’s operating results from the date of acquisition. Intangible Assets Amortizable intangible assets include non-compete agreements, developed technology and customer relationships acquired as part of a business combination. Intangible assets subject to amortization are amortized using the straight-line method over their estimated useful lives ranging from five to ten years and are reviewed for impairment in accordance with Accounting Standards Codification (“ASC”) 360, Property, Plant and Equipment. Goodwill In accordance with ASC 350, Intangibles-Goodwill and Other The Company acquired goodwill as part of a business combination in January 2017, and therefore has not previously tested for or recorded any goodwill impairment charges. 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. The carrying amounts of certain of these financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued and other current liabilities approximate their current fair value due to the relatively short-term nature of these accounts. Based on borrowing rates available to the Company, the carrying value of capital leases approximates fair value. The Company believes the fair value of the term debt approximates recorded amounts as of March 31, 2017 as the interest rates on the term debt are variable and are based on market interest rates after consideration of default and credit risk (using level 2 inputs). See Note 5, “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 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, common stock warrants, 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. Recent accounting pronouncements In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other (Topic 350) In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of businesses. ASU 2017-01 is effective for annual and interim periods beginning after December 15, 2017 and early adoption is permitted. The Company early adopted ASU 2017-01 effective January 1, 2017 In December 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash In August 2016, the FASB issued ASU 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) |
Business Combinations
Business Combinations | 3 Months Ended |
Mar. 31, 2017 | |
Business Combinations [Abstract] | |
Business Combination | 3. Business Combinations In January 2017, the Company acquired AltaVoice (formerly Patient Crossroads), a privately-owned patient-centered data company with a global platform for collecting, curating, coordinating, and delivering safeguarded data from patients and clinicians. The acquisition, complemented by several other strategic partnerships, will expand the Company's genome network, designed to connect patients, clinicians, advocacy organizations, researchers, and therapeutic developers to accelerate the understanding, diagnosis, and treatment of hereditary disease. Pursuant to the terms of the Stock Purchase Agreement entered into on January 6, 2017, the Company acquired all of the outstanding shares of AltaVoice for total purchase consideration of $12.4 million, payable in the Company’s common stock, as follows: (a) payment of $5.5 million through the issuance of 641,126 shares of the Company’s common stock; (b) payment of $5.0 million in the Company’s common stock, payable on March 31, 2018, with the common shares deliverable equal to $5,000,000 divided by the trailing average share price of the Company’s common stock for the 30 days preceding March 31, 2018; (c) payment of $5.0 million in the Company’s common stock, contingently payable on March 31, 2018 if a milestone based on a certain threshold of revenue is achieved during 2017, with the shares deliverable equal to $5.0 million divided by the trailing average share price of Invitae common stock for the 30 days preceding March 31, 2018; or should the foregoing milestone not be achieved, then there is a new contingent milestone based on achieving a revenue target during 2017 and 2018. Should the new milestone revenue target be achieved, then on March 31, 2019, a payment of up to $5.0 million in the Company’s common stock. The actual payout is dependent upon the 2017 and 2018 revenue target (capped at $14.0 million) times 75% less $5.5 million. This formula in effect caps the possible payout amount at $5.0 million in the Company’s common shares. The number of shares to be issued will be equal to the payout amount divided by the trailing average share price of the Company’s common stock for the 30 days preceding March 31, 2019. The first payment of $5.5 million was classified as equity. The second payment was discounted to $4.7 million and recorded as a liability, and will be remeasured to fair value at each reporting date until the extinguishment of the liability on March 31, 2018. The third payment, representing contingent consideration, was determined to have a fair value of $2.2 million and was recorded as a liability. In accordance with ASC Topic 805, Business Combinations, The allocation of the purchase price is based on valuations derived from estimated fair value assessments and assumptions used by the Company. While the Company believes that its estimates and assumptions underlying the valuations are reasonable, different estimates and assumptions could result in different valuations assigned to the individual assets acquired and liabilities assumed, and the resulting amount of goodwill. The following table summarizes the fair values of assets acquired and liabilities assumed at the date of acquisition (in thousands): Cash $ 54 Accounts receivable 274 Prepaid expense and other assets 52 Non-compete agreement 286 Developed technology 570 Customer relationships 3,389 Total identifiable assets acquired 4,625 Accounts payable (28 ) Deferred revenue (202 ) Accrued expenses (21 ) Deferred tax liability (1,422 ) Total liabilities assumed (1,673 ) Net identifiable assets acquired 2,952 Goodwill 9,432 Net assets acquired $ 12,384 Acquisition-related intangibles included in the above table are finite-lived and are being amortized on a straight-line basis over their estimated lives, which approximates the pattern in which the economic benefits of the intangible assets are expected to be realized, as follows (in thousands): Gross Purchased Intangible Asset Estimated Useful Life (in Years) Non-compete agreements $ 286 5 Developed technology 570 6 Customer relationships 3,389 10 $ 4,245 The following table presents information about acquisition-related intangibles as of March 31, 2017 (in thousands): Cost Accumulated Amortization Net Estimated Remaining Useful Life (in Years) Non-compete agreements $ 286 $ (14 ) $ 272 4.8 Developed technology 570 (24 ) 546 5.8 Customer relationships 3,389 (85 ) 3,304 9.8 $ 4,245 $ (123 ) $ 4,122 Estimated future amortization expense of acquisition-related intangibles as of March 31, 2017 is as follows (in thousands): Amount Remainder of 2017 $ 368 2018 491 2019 491 2020 491 2021 491 Thereafter 1,790 $ 4,122 Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired. The acquisition of AltaVoice resulted in $9.4 million of goodwill. The Company believes this goodwill consists principally of expected synergies to be realized by combining capabilities, technology, and data to accelerate the use of genetic information for the diagnosis and treatment of hereditary diseases. In accordance with ASC 350, goodwill will not be amortized but will be tested for impairment at least annually. Goodwill created as a result of the acquisition is not deductible for tax purposes. Concurrent with the acquisition, the Company recorded additional goodwill of $1.4 million relating to the tax consequence of recognizing the fair value of the acquisition-related intangibles, with an equal offset to deferred tax liability. The results of operations of AltaVoice for the period from the acquisition date through March 31, 2017 are included in the accompanying consolidated statements of operations. Pursuant to ASC 805, the Company incurred and expensed approximately $159,000 in acquisition and transitional costs associated with the acquisition of AltaVoice during the year ended December 31, 2016 and the three months ended March 31, 2017, which were primarily general and administrative related. Pro-forma Financial Information: The unaudited financial information in the table below summarizes the combined results of operations of the Company and AltaVoice on a pro forma basis, as though the companies had been combined as of the beginning of each of the periods presented. The pro forma financial information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of each of the periods presented. The unaudited pro forma financial information for the three months ended March 31, 2017 combines the results of the Company for the three months ended March 31, 2017, which include the results of AltaVoice subsequent to January 6, 2017 (the acquisition date), with the historical results for AltaVoice for the period from January 1, 2017 to January 6, 2017. The unaudited pro forma financial information for the three months ended March 31, 2016 combines the historical results for the Company for that period, with the historical results for AltaVoice for the same period. The following table summarizes the pro forma financial information for the three months ended March 31, 2017 and 2016 (in thousands): March 31, March 31, 2017 2016 Total revenue $ 10,419 $ 4,376 Net loss $ (26,985 ) $ (25,754 ) |
Balance sheet components
Balance sheet components | 3 Months Ended |
Mar. 31, 2017 | |
Balance Sheet Related Disclosures [Abstract] | |
Balance sheet components | 4. Balance sheet components Cash equivalents and marketable securities The following is a summary of cash equivalents and marketable securities (in thousands): March 31, 2017 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Money market funds $ 6,942 $ — $ — $ 6,942 U.S. treasury notes 14,015 — (10 ) 14,005 U.S. government agency securities 39,363 — (26 ) 39,337 $ 60,320 $ — $ (36 ) $ 60,284 Reported as: Cash equivalents $ 2,245 Restricted cash 4,697 Marketable securities 53,342 Total cash equivalents, restricted cash and marketable securities $ 60,284 December 31, 2016 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Money market funds $ 19,457 $ — $ — $ 19,457 U.S. treasury notes 11,515 2 — 11,517 U.S. government agency securities 14,283 — (2 ) 14,281 $ 45,255 $ 2 $ (2 ) $ 45,255 Reported as: Cash equivalents $ 14,760 Restricted cash 4,697 Marketable securities 25,798 Total cash equivalents, restricted cash and marketable securities $ 45,255 The total amount of unrealized losses at March 31, 2017 was $36,000. None of the available-for-sale securities held as of March 31, 2017 has been in a continuous unrealized loss position for more than one year. At March 31, 2017, unrealized losses on available-for-sale investments are not attributed to credit risk and are considered to be temporary. The Company believes it is more likely than not that investments in an unrealized loss position will be held until maturity or the recovery of the cost basis of the investment. To date, the Company has not recorded any impairment charges on marketable securities related to other-than-temporary declines in market value. At March 31, 2017, the remaining contractual maturities of available-for-sale securities were less than one year. For the three months ended March 31, 2017, 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): March 31, 2017 December 31, 2016 Leasehold improvements $ 11,687 $ 1,256 Laboratory equipment 16,573 13,644 Equipment under capital lease 4,489 5,871 Computer equipment 2,759 2,514 Software 2,489 2,489 Furniture and fixtures 523 238 Automobiles 58 20 Construction-in-progress 3,294 12,229 Total property and equipment, gross 41,872 38,261 Accumulated depreciation and amortization (15,268 ) (14,468 ) Total property and equipment, net $ 26,604 $ 23,793 Depreciation and amortization expense was $1.7 million and $1.6 million for the three months ended March 31, 2017 and 2016, respectively. Accrued liabilities Accrued liabilities consisted of the following (in thousands): March 31, 2017 December 31, 2016 Accrued compensation and related expenses $ 3,543 $ 3,072 Accrued laboratory materials purchases 797 338 Accrued professional services 663 446 Accrued construction in progress 965 1,215 Lease incentive obligation, current 468 468 Liabilities associated with business combination 4,762 — Other 1,914 1,172 Total accrued liabilities $ 13,112 $ 6,711 Other long-term liabilities Other long-term liabilities consisted of the following (in thousands): March 31, 2017 December 31, 2016 Lease incentive obligation, non-current $ 4,126 $ 4,243 Deferred rent, non-current 4,024 3,419 Liabilities associated with business combination 2,200 — Other non-current liabilities 174 175 Total other long-term liabilities $ 10,524 $ 7,837 |
Fair value measurements
Fair value measurements | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair value measurements | 5. 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 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 March 31, 2017 and December 31, 2016 (in thousands): March 31, 2017 Level 1 Level 2 Level 3 Total Financial assets: Money market funds $ 6,942 $ — $ — $ 6,942 U.S. treasury notes 14,005 — — 14,005 U.S. government agency securities — 39,337 — 39,337 Total financial assets $ 20,947 $ 39,337 $ — $ 60,284 Financial liabilities: Contingent consideration $ $ — $ 2,200 $ 2,200 Total financial liabilities $ — $ — $ 2,200 $ 2,200 December 31, 2016 Level 1 Level 2 Level 3 Total Financial assets: Money market funds $ 19,457 $ — $ — $ 19,457 U.S. treasury notes 11,517 — — 11,517 U.S. government agency securities — 14,281 — 14,281 Total financial assets $ 30,974 $ 14,281 $ — $ 45,255 There were no transfers between Level 1, Level 2 and Level 3 during the periods presented. The following table presents the Company’s Level 3 financial instruments that are measured at fair value on a recurring basis (in thousands): Level 3 Contingent Consideration Liability Balance as of December 31, 2016 $ — Contingent consideration 2,200 Balance as of March 31, 2017 $ 2,200 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. As of March 31, 2017, the Company had a contingent obligation up to $5.0 million payable in the Company’s common stock to the former owners of AltaVoice in conjunction with the Company’s acquisition of AltaVoice in January 2017. The contingency is dependent upon future revenues attributable to AltaVoice. If such revenues are least $10 million in 2017, the Company will make a payment of $5.0 million in the Company’s common stock on March 31, 2018. If revenue attributable to AltaVoice is less than $10 million in 2017, but the combined revenue attributable to AltaVoice for the combined period of 2017 and 2018 is at least $10 million, the Company will make a payment of up to $5.0 million in the Company’s common stock on March 31, 2019. The Company estimated the fair value of the contingent consideration at $2.2 million, based on a Monte Carlo simulation, as well as estimates of the 30-day trailing price of its stock at certain dates, its volatility assumptions and its revenue forecasts, all of which were significant inputs in the Level 3 measurement not supported by market activity. The value of the liability will be subsequently remeasured to fair value at each reporting date. Changes in estimated fair value will be recorded as a component of operating expenses until the contingency is paid or expires. There was no change in the fair value of the contingent consideration between the acquisition date and March 31, 2017. 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 March 31, 2017 and December 31, 2016, are as follows (in thousands): March 31, 2017 December 31, 2016 Carrying Amount Fair Value Carrying Amount Fair Value Debt $ 38,921 $ 39,495 $ 12,102 $ 11,905 |
Commitments and contingencies
Commitments and contingencies | 3 Months Ended |
Mar. 31, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and contingencies | 6. Commitments and contingencies Operating Leases In September 2015, the Company entered into a lease agreement for a headquarters and 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 March 31, 2017, all of the lease incentive had been utilized by the Company. Aggregate future minimum lease payments for the new facility at March 31, 2017 were approximately $68.6 million. In addition to the security deposit of approximately $4.6 million for the new facility, the Company has provided, as collateral for other leases, security deposits of $0.8 million at March 31, 2017 and at December 31, 2016, which are included in other assets in the Company’s consolidated balance sheets. Future minimum payments under non-cancelable operating leases as of March 31, 2017 are as follows (in thousands): Amounts 2017 (remainder of year) $ 5,134 2018 6,898 2019 6,946 2020 6,917 2021 7,079 Thereafter 37,137 Total minimum lease payments $ 70,111 Rent expense was $2.2 million and $1.6 million for the three months ended March 31, 2017 and 2016, respectively. Debt Financing In July 2015, the Company entered into a Loan and Security Agreement (the “Loan Agreement”) with a bank under which term loans were available for purchases of equipment up to an aggregate of $15.0 million. As of December 31, 2016, obligations under the Loan Agreement were $12.1 million. On March 15, 2017, the Company entered into a Loan and Security Agreement (the “Loan and Security Agreement”) with a lender pursuant to which the Company borrowed an initial term loan of $40.0 million, and received net proceeds of approximately $39.7 million. Subject to certain conditions, the Company will also be eligible to borrow a second term loan of $20.0 million in the first quarter of 2018. In connection with entering into the Loan and Security Agreement, the Company terminated the Loan Agreement and repaid in full the balance of its obligations under such agreement, approximately $12.1 million. The payment to the lender under the Loan Agreement included a prepayment premium of $670,000, which was classified as extinguishment of debt and included in other income (expense), net. Term loans under the Loan and Security Agreement bear interest at a floating rate equal to an index rate plus 7.73%, where the index rate is the greater of 0.77% or the 30-day U.S. Dollar London Interbank Offered Rate (LIBOR) as reported in The Wall Street Journal, with the floating rate resetting monthly subject to a floor of 8.5%. The Company can make monthly interest-only payments until May 1, 2019 (or, subject to certain conditions, May 1, 2020), and thereafter monthly payments of principal and interest are required to fully amortize the borrowed amount by a final maturity date of March 1, 2022. A fee of 5% of each funded draw is due at the earlier of prepayment or loan maturity, a facility fee of 0.5% is due upon funding for each draw, and a prepayment fee of between 1% and 3% of the outstanding balance will apply in the event of a prepayment. Concurrent with each term loan, the Company will grant to the lender a warrant to acquire shares of the Company’s common stock equal to the quotient of 3% of the funded amount divided by a per share exercise price equal to the lower of the average closing price for the previous ten days of trading (calculated on the day prior to funding) or the closing price on the day prior to funding. In connection with the initial term loan, the Company granted the lender a warrant to purchase 116,845 shares of common stock at an exercise price of $10.27 per share. The Company classified the warrant as equity and determined the fair value of the warrant to be $740,000. The warrant has a term of ten years from the date of issuance and includes a cashless exercise provision. The Company’s obligations under the Loan and Security Agreement are subject to quarterly covenants to achieve certain revenue levels as well as additional covenants, including limits on 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. The Company’s obligations under the Loan and Security Agreement are secured by a security interest on substantially all the Company’s assets, excluding its intellectual property. At March 31, 2017, obligations under the Loan and Security Agreement were $40.0 million. Debt issuance costs related to the Loan and Security Agreement of $339,000 and the warrant fair value of $740,000 were recorded as a direct deduction from the debt liability and are being amortized to interest expense over the term of the Loan and Security Agreement. Future payments under the Loan and Security Agreement as of March 31, 2017 are as follows (in thousands): Amounts 2017 (remainder of year) $ 2,310 2018 3,455 2019 12,367 2020 15,843 2021 14,651 Thereafter 5,479 Total remaining debt payments 54,105 Less: amount representing debt discount (1,079 ) Less: amount representing interest (14,105 ) Present value of remaining debt payments 38,921 Less: current portion — Total non-current debt obligation $ 38,921 Interest expense related to the Loan and Security Agreement and the Loan Agreement was $306,000 and $52,000 for the three months ended March 31, 2017 and 2016, 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 4.3% to 6.3%. 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 March 31, 2017 are as follows (in thousands): Amounts 2017 (remainder of year) $ 1,377 2018 849 2019 581 2020 194 Total capital lease obligations 3,001 Less: amount representing interest (188 ) Present value of net minimum capital lease payments 2,813 Less: current portion (1,647 ) Total non-current capital lease obligations $ 1,166 Interest expense related to capital leases was $16,000 and $32,000 for the three months ended March 31, 2017 and 2016, respectively. Property and equipment under capital leases was $4.5 million and $5.9 million as of March 31, 2017 and December 31, 2016, respectively. Accumulated depreciation and amortization, collectively, on these assets was $1.8 million and $2.8 million at March 31, 2017 and December 31, 2016, 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 March 31, 2017 or December 31, 2016. Contingencies The Company was not a party to any material legal proceedings at March 31, 2017, 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 | 3 Months Ended |
Mar. 31, 2017 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock incentive plans | 7. 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 Company’s initial public offering (“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 could be earned based on the achievement of specified performance conditions measured over a period of approximately 12 months. Holders of PRSUs were eligible to receive 0% to 100% of the target number of PRSUs originally granted. Stock-based compensation expense associated with PRSU grants would be recorded when the performance conditions were determined to be probable and fully vested restricted stock units would be awarded upon the Audit Committee’s determination of the level of achievement. In February, 2017, upon the Audit Committee’s determination of the level of achievement, 352,045 fully vested stock units were awarded to holders of PRSUs. Based on its evaluations of the probability of achieving performance conditions, the Company recorded stock-based compensation expense of $0.4 million and zero, for the three months ended March 31, 2017 and 2016, respectively, related to the PRSUs. 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, 2016 1,375,766 4,490,662 $ 8.21 8.11 $ 5,312 Additional shares reserved 2,923,183 Options granted (443,648 ) 443,648 $ 8.97 Options cancelled 108,418 (108,418 ) $ 9.87 Options exercised (157,799 ) $ 4.57 RSUs granted (1,668,965 ) RSUs cancelled 27,607 PRSUs cancelled 177,960 Balances at March 31, 2017 2,500,321 4,668,093 $ 8.37 8.20 $ 12,846 Options exercisable at March 31, 2017 1,723,431 $ 6.89 7.17 $ 7,351 Options vested and expected to vest at March 31, 2017 4,212,145 $ 8.27 8.12 $ 12,036 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 $5.85 and $6.29 in the three months ended March 31, 2017 and 2016, respectively. The weighted-average fair value of RSUs granted was $10.22 and $10.00 in the three months ended March 31, 2017 and 2016. No PRSUs were granted in the three months ended March 31, 2017 and the weighted average fair value of PRSUs granted in the three months ended March 31, 2016 was $6.33. The total grant date fair value of options to purchase common stock vested was $1.1 million and $1.3 million in the three months ended March 31, 2017 and 2016, respectively. The intrinsic value of options to purchase common stock exercised was $856,000 and $507,000 in the three months ended March 31, 2017 and 2016, respectively. The following table summarizes RSU and PRSU activity for the three months ended March 31, 2017: Number of Shares Weighted- Average Grant Date Fair Value Balance at December 31, 2016 1,421,757 $ 8.77 RSUs granted 1,668,965 $ 10.22 RSUs vested (13,316 ) $ 8.99 PRSUs vested (352,045 ) $ 6.54 RSUs cancelled (27,607 ) $ 9.98 PRSUs cancelled (177,960 ) $ 6.53 Balance at March 31, 2017 2,519,794 $ 10.18 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. At March 31, 2017, 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 March 31, 2017, a total of 686,121 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, March 31, 2017 March 31, 2016 Expected term (in years) 6.03 6.13 Expected volatility 72.94% 71.05% Risk-free interest rate 2.05% 1.34% 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 March 31, 2017 2016 Expected term (in years) 6.00 – 9.00 7.00 – 9.57% Expected volatility 72.29 – 77.36% 71.05% Risk-free interest rate 2.02 – 2.31% 1.44 – 1.73% Dividend yield — — The following table summarizes stock-based compensation expense for the three months ended March 31, 2017 and 2016, included in the consolidated statements of operations (in thousands): Three months ended March 31, 2017 2016 Cost of revenue $ 317 $ 201 Research and development 1,295 538 Selling and marketing 716 241 General and administrative 950 485 Total stock-based compensation expense $ 3,278 $ 1,465 At March 31, 2017, unrecognized compensation expense related to unvested stock options, net of estimated forfeitures, was $16.3 million, which the Company expects to recognize on a straight-line basis over a weighted-average period of 2.8 years. Unrecognized compensation expense related to RSUs at March 31, 2017 was $19.3 million, which the Company expects to recognize on a straight-line basis over a weighted-average period of 2.8 years. At March 31, 2017, 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 | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Net loss per common share | 8. Net loss per common share The following table presents the calculation of basic and diluted net loss per share for the three months ended March 31, 2017 and 2016 (in thousands, except share and per share amounts): Three months ended March 31, 2017 2016 Net loss $ (26,928 ) $ (25,590 ) Shares used in computing net loss per share, basic and diluted 42,318,136 31,964,541 Net loss per share, basic and diluted $ (0.64 ) $ (0.80 ) The following common stock equivalents have been excluded from diluted net loss per share for the three months ended March 31, 2017 and 2016 because their inclusion would be anti-dilutive: Three months ended March 31, 2017 2016 Shares of common stock subject to outstanding options 4,668,093 4,570,714 Shares of common stock subject to outstanding warrants 116,845 — Shares of common stock subject to outstanding RSUs 2,519,794 998,837 Shares of common stock pursuant to ESPP 174,204 130,049 Total shares of common stock equivalents 7,478,936 5,699,600 |
Geographic information
Geographic information | 3 Months Ended |
Mar. 31, 2017 | |
Segments Geographical Areas [Abstract] | |
Geographic information | 9 . Geographic information Revenue by country is determined based on the billing address of the customer. The following presents revenue by country for the three months ended March 31, 2017 and 2016 (in thousands): Three Months Ended March 31, 2017 2016 United States $ 9,208 $ 2,964 Canada 597 782 Rest of world 533 209 Total revenue $ 10,338 $ 3,955 All long-lived assets, at March 31, 2017 and December 31, 2016, were located in the United States. |
Summary of significant accoun16
Summary of significant accounting policies (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
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. 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 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 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. |
Accounts receivable | Accounts receivable The Company receives payment for its tests from patients, institutional customers and third-party payers. 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. Accounts receivable balances primarily represent patient, institutional customer and Medicare billings. |
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. Cash, cash equivalents and restricted cash The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the unaudited condensed consolidated balance sheets that sum to the total of the same amounts shown in the unaudited statements of cash flows (in thousands): March 31, 2017 March 31, 2016 Cash and cash equivalents $ 43,439 $ 27,314 Restricted cash 4,697 4,831 Total cash, cash equivalents and restricted cash $ 48,136 $ 32,145 |
Business combinations | Business combinations The tangible and identifiable intangible assets acquired and liabilities assumed in a business combination are recorded based on their estimated fair values as of the business combination date, including identifiable intangible assets which either arise from a contractual or legal right or are separable from goodwill. The Company bases the estimated fair value of identifiable intangible assets acquired in a business combination on independent valuations that use information and assumptions provided by management, which consider management’s estimates of inputs and assumptions that a market participant would use. Any excess purchase price over the estimated fair value assigned to the net tangible and identifiable intangible assets acquired and liabilities assumed is recorded to goodwill. The use of alternative valuation assumptions, including estimated revenue projections, growth rates, cash flows, discount rates, estimated useful lives and probabilities surrounding the achievement of contingent milestones could result in different purchase price allocations and amortization expense in current and future periods. In circumstances where an acquisition involves a contingent consideration arrangement that meets the definition of a liability under FASB Accounting Standards Codification (“ASC”) Topic 480, Distinguishing Liabilities from Equity Transaction costs associated with acquisitions are expensed as incurred in general and administrative expenses. Results of operations and cash flows of acquired companies are included in the Company’s operating results from the date of acquisition. |
Intangible assets | Intangible Assets Amortizable intangible assets include non-compete agreements, developed technology and customer relationships acquired as part of a business combination. Intangible assets subject to amortization are amortized using the straight-line method over their estimated useful lives ranging from five to ten years and are reviewed for impairment in accordance with Accounting Standards Codification (“ASC”) 360, Property, Plant and Equipment. |
Goodwill | Goodwill In accordance with ASC 350, Intangibles-Goodwill and Other The Company acquired goodwill as part of a business combination in January 2017, and therefore has not previously tested for or recorded any goodwill impairment charges. |
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. The carrying amounts of certain of these financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued and other current liabilities approximate their current fair value due to the relatively short-term nature of these accounts. Based on borrowing rates available to the Company, the carrying value of capital leases approximates fair value. The Company believes the fair value of the term debt approximates recorded amounts as of March 31, 2017 as the interest rates on the term debt are variable and are based on market interest rates after consideration of default and credit risk (using level 2 inputs). See Note 5, “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 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, common stock warrants, 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. |
Recent accounting pronouncements | Recent accounting pronouncements In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other (Topic 350) In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of businesses. ASU 2017-01 is effective for annual and interim periods beginning after December 15, 2017 and early adoption is permitted. The Company early adopted ASU 2017-01 effective January 1, 2017 In December 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash In August 2016, the FASB issued ASU 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) |
Summary of significant accoun17
Summary of significant accounting policies (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Reconciliation of cash, cash equivalents and restricted cash | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the unaudited condensed consolidated balance sheets that sum to the total of the same amounts shown in the unaudited statements of cash flows (in thousands): March 31, 2017 March 31, 2016 Cash and cash equivalents $ 43,439 $ 27,314 Restricted cash 4,697 4,831 Total cash, cash equivalents and restricted cash $ 48,136 $ 32,145 |
Business Combinations (Tables)
Business Combinations (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Business Combinations [Abstract] | |
Summary of fair values of assets acquired and liabilities assumed | The following table summarizes the fair values of assets acquired and liabilities assumed at the date of acquisition (in thousands): Cash $ 54 Accounts receivable 274 Prepaid expense and other assets 52 Non-compete agreement 286 Developed technology 570 Customer relationships 3,389 Total identifiable assets acquired 4,625 Accounts payable (28 ) Deferred revenue (202 ) Accrued expenses (21 ) Deferred tax liability (1,422 ) Total liabilities assumed (1,673 ) Net identifiable assets acquired 2,952 Goodwill 9,432 Net assets acquired $ 12,384 |
Schedule of economic benefits of intangible assets are expected to be realized | Acquisition-related intangibles included in the above table are finite-lived and are being amortized on a straight-line basis over their estimated lives, which approximates the pattern in which the economic benefits of the intangible assets are expected to be realized, as follows (in thousands): Gross Purchased Intangible Asset Estimated Useful Life (in Years) Non-compete agreements $ 286 5 Developed technology 570 6 Customer relationships 3,389 10 $ 4,245 The following table presents information about acquisition-related intangibles as of March 31, 2017 (in thousands): Cost Accumulated Amortization Net Estimated Remaining Useful Life (in Years) Non-compete agreements $ 286 $ (14 ) $ 272 4.8 Developed technology 570 (24 ) 546 5.8 Customer relationships 3,389 (85 ) 3,304 9.8 $ 4,245 $ (123 ) $ 4,122 |
Schedule of estimated future amortization expense of acquisition-related intangibles | Estimated future amortization expense of acquisition-related intangibles as of March 31, 2017 is as follows (in thousands): Amount Remainder of 2017 $ 368 2018 491 2019 491 2020 491 2021 491 Thereafter 1,790 $ 4,122 |
Summary of pro forma financial information | The following table summarizes the pro forma financial information for the three months ended March 31, 2017 and 2016 (in thousands): March 31, March 31, 2017 2016 Total revenue $ 10,419 $ 4,376 Net loss $ (26,985 ) $ (25,754 ) |
Balance sheet components (Table
Balance sheet components (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
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): March 31, 2017 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Money market funds $ 6,942 $ — $ — $ 6,942 U.S. treasury notes 14,015 — (10 ) 14,005 U.S. government agency securities 39,363 — (26 ) 39,337 $ 60,320 $ — $ (36 ) $ 60,284 Reported as: Cash equivalents $ 2,245 Restricted cash 4,697 Marketable securities 53,342 Total cash equivalents, restricted cash and marketable securities $ 60,284 December 31, 2016 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Money market funds $ 19,457 $ — $ — $ 19,457 U.S. treasury notes 11,515 2 — 11,517 U.S. government agency securities 14,283 — (2 ) 14,281 $ 45,255 $ 2 $ (2 ) $ 45,255 Reported as: Cash equivalents $ 14,760 Restricted cash 4,697 Marketable securities 25,798 Total cash equivalents, restricted cash and marketable securities $ 45,255 |
Schedule of Property and equipment | Property and equipment consisted of the following (in thousands): March 31, 2017 December 31, 2016 Leasehold improvements $ 11,687 $ 1,256 Laboratory equipment 16,573 13,644 Equipment under capital lease 4,489 5,871 Computer equipment 2,759 2,514 Software 2,489 2,489 Furniture and fixtures 523 238 Automobiles 58 20 Construction-in-progress 3,294 12,229 Total property and equipment, gross 41,872 38,261 Accumulated depreciation and amortization (15,268 ) (14,468 ) Total property and equipment, net $ 26,604 $ 23,793 |
Schedule of Accrued liabilities | Accrued liabilities consisted of the following (in thousands): March 31, 2017 December 31, 2016 Accrued compensation and related expenses $ 3,543 $ 3,072 Accrued laboratory materials purchases 797 338 Accrued professional services 663 446 Accrued construction in progress 965 1,215 Lease incentive obligation, current 468 468 Liabilities associated with business combination 4,762 — Other 1,914 1,172 Total accrued liabilities $ 13,112 $ 6,711 |
Schedule of Other long-term liabilities | Other long-term liabilities consisted of the following (in thousands): March 31, 2017 December 31, 2016 Lease incentive obligation, non-current $ 4,126 $ 4,243 Deferred rent, non-current 4,024 3,419 Liabilities associated with business combination 2,200 — Other non-current liabilities 174 175 Total other long-term liabilities $ 10,524 $ 7,837 |
Fair value measurements (Tables
Fair value measurements (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
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 March 31, 2017 and December 31, 2016 (in thousands): March 31, 2017 Level 1 Level 2 Level 3 Total Financial assets: Money market funds $ 6,942 $ — $ — $ 6,942 U.S. treasury notes 14,005 — — 14,005 U.S. government agency securities — 39,337 — 39,337 Total financial assets $ 20,947 $ 39,337 $ — $ 60,284 Financial liabilities: Contingent consideration $ $ — $ 2,200 $ 2,200 Total financial liabilities $ — $ — $ 2,200 $ 2,200 December 31, 2016 Level 1 Level 2 Level 3 Total Financial assets: Money market funds $ 19,457 $ — $ — $ 19,457 U.S. treasury notes 11,517 — — 11,517 U.S. government agency securities — 14,281 — 14,281 Total financial assets $ 30,974 $ 14,281 $ — $ 45,255 |
Financial instruments measured at fair value on a recurring basis | The following table presents the Company’s Level 3 financial instruments that are measured at fair value on a recurring basis (in thousands): Level 3 Contingent Consideration Liability Balance as of December 31, 2016 $ — Contingent consideration 2,200 Balance as of March 31, 2017 $ 2,200 |
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 March 31, 2017 and December 31, 2016, are as follows (in thousands): March 31, 2017 December 31, 2016 Carrying Amount Fair Value Carrying Amount Fair Value Debt $ 38,921 $ 39,495 $ 12,102 $ 11,905 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Schedule of future minimum payments under operating leases | Future minimum payments under non-cancelable operating leases as of March 31, 2017 are as follows (in thousands): Amounts 2017 (remainder of year) $ 5,134 2018 6,898 2019 6,946 2020 6,917 2021 7,079 Thereafter 37,137 Total minimum lease payments $ 70,111 |
Schedule of future payments under loan and security agreement | Future payments under the Loan and Security Agreement as of March 31, 2017 are as follows (in thousands): Amounts 2017 (remainder of year) $ 2,310 2018 3,455 2019 12,367 2020 15,843 2021 14,651 Thereafter 5,479 Total remaining debt payments 54,105 Less: amount representing debt discount (1,079 ) Less: amount representing interest (14,105 ) Present value of remaining debt payments 38,921 Less: current portion — Total non-current debt obligation $ 38,921 |
Schedule of future minimum lease payments under capital leases | Future payments under capital leases at March 31, 2017 are as follows (in thousands): Amounts 2017 (remainder of year) $ 1,377 2018 849 2019 581 2020 194 Total capital lease obligations 3,001 Less: amount representing interest (188 ) Present value of net minimum capital lease payments 2,813 Less: current portion (1,647 ) Total non-current capital lease obligations $ 1,166 |
Stock incentive plans (Tables)
Stock incentive plans (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
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, 2016 1,375,766 4,490,662 $ 8.21 8.11 $ 5,312 Additional shares reserved 2,923,183 Options granted (443,648 ) 443,648 $ 8.97 Options cancelled 108,418 (108,418 ) $ 9.87 Options exercised (157,799 ) $ 4.57 RSUs granted (1,668,965 ) RSUs cancelled 27,607 PRSUs cancelled 177,960 Balances at March 31, 2017 2,500,321 4,668,093 $ 8.37 8.20 $ 12,846 Options exercisable at March 31, 2017 1,723,431 $ 6.89 7.17 $ 7,351 Options vested and expected to vest at March 31, 2017 4,212,145 $ 8.27 8.12 $ 12,036 |
Summary of RSU and PRSU activity | The following table summarizes RSU and PRSU activity for the three months ended March 31, 2017: Number of Shares Weighted- Average Grant Date Fair Value Balance at December 31, 2016 1,421,757 $ 8.77 RSUs granted 1,668,965 $ 10.22 RSUs vested (13,316 ) $ 8.99 PRSUs vested (352,045 ) $ 6.54 RSUs cancelled (27,607 ) $ 9.98 PRSUs cancelled (177,960 ) $ 6.53 Balance at March 31, 2017 2,519,794 $ 10.18 |
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 months ended March 31, 2017 and 2016, included in the consolidated statements of operations (in thousands): Three months ended March 31, 2017 2016 Cost of revenue $ 317 $ 201 Research and development 1,295 538 Selling and marketing 716 241 General and administrative 950 485 Total stock-based compensation expense $ 3,278 $ 1,465 |
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, March 31, 2017 March 31, 2016 Expected term (in years) 6.03 6.13 Expected volatility 72.94% 71.05% Risk-free interest rate 2.05% 1.34% 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 March 31, 2017 2016 Expected term (in years) 6.00 – 9.00 7.00 – 9.57% Expected volatility 72.29 – 77.36% 71.05% Risk-free interest rate 2.02 – 2.31% 1.44 – 1.73% Dividend yield — — |
Net loss per common share (Tabl
Net loss per common share (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
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 months ended March 31, 2017 and 2016 (in thousands, except share and per share amounts): Three months ended March 31, 2017 2016 Net loss $ (26,928 ) $ (25,590 ) Shares used in computing net loss per share, basic and diluted 42,318,136 31,964,541 Net loss per share, basic and diluted $ (0.64 ) $ (0.80 ) |
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 months ended March 31, 2017 and 2016 because their inclusion would be anti-dilutive: Three months ended March 31, 2017 2016 Shares of common stock subject to outstanding options 4,668,093 4,570,714 Shares of common stock subject to outstanding warrants 116,845 — Shares of common stock subject to outstanding RSUs 2,519,794 998,837 Shares of common stock pursuant to ESPP 174,204 130,049 Total shares of common stock equivalents 7,478,936 5,699,600 |
Geographic information (Tables)
Geographic information (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
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 months ended March 31, 2017 and 2016 (in thousands): Three Months Ended March 31, 2017 2016 United States $ 9,208 $ 2,964 Canada 597 782 Rest of world 533 209 Total revenue $ 10,338 $ 3,955 |
Organization and description 25
Organization and description of business (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2017USD ($)segment | Mar. 31, 2016USD ($) | Dec. 31, 2016USD ($) | |
Number of operating segments | segment | 1 | ||
Net loss | $ 26,928 | $ 25,590 | $ 100,300 |
Accumulated deficit | $ (302,146) | $ (275,218) | |
Immaterial Error Correction | |||
Reclassification of asset impairment charges from other income expense to general and administrative expense | $ 200 |
Summary of significant accoun26
Summary of significant accounting policies - Reconciliation of cash, cash equivalents and restricted cash (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 | Mar. 31, 2016 | Dec. 31, 2015 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 43,439 | $ 66,825 | $ 27,314 | |
Restricted cash | 4,697 | 4,697 | 4,831 | |
Total cash, cash equivalents and restricted cash | $ 48,136 | $ 71,522 | $ 32,145 | $ 78,069 |
Summary of significant accoun27
Summary of significant accounting policies - Additional Information (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended |
Mar. 31, 2016 | Mar. 31, 2017 | |
Summary Of Significant Accounting Policies [Line Items] | ||
Intangible assets amortization method | Intangible assets subject to amortization are amortized using the straight-line method over their estimated useful lives ranging from five to ten years and are reviewed for impairment in accordance with Accounting Standards Codification (“ASC”) 360, Property, Plant and Equipment | |
ASU 2016-09 | ||
Summary Of Significant Accounting Policies [Line Items] | ||
New accounting pronouncement or change in accounting principle, deferred tax asset cumulative effect adjustment to retained earnings | $ 0.4 | |
New accounting pronouncement or change in accounting principle, offset deferred tax asset valuation allowance percentage | 100.00% | |
Minimum | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Intangible assets estimated useful lives | 5 years | |
Maximum | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Intangible assets estimated useful lives | 10 years |
Business Combinations - Additio
Business Combinations - Additional Information (Details) - USD ($) | Mar. 31, 2018 | Jan. 06, 2017 | Jan. 31, 2017 | Mar. 31, 2017 | Mar. 31, 2019 |
Business Acquisition [Line Items] | |||||
Goodwill | $ 9,432,000 | ||||
AltaVoice | |||||
Business Acquisition [Line Items] | |||||
Business combination, agreement date | Jan. 6, 2017 | ||||
Business combination, total purchase consideration | $ 12,400,000 | ||||
Business acquisition payment through issuance of shares company's common stock | $ 5,500,000 | ||||
Business combination basis of shares to be issued description | The number of shares to be issued will be equal to the payout amount divided by the trailing average share price of the Company’s common stock for the 30 days preceding March 31, 2019. | ||||
Purchase consideration, second payment discounted and recorded as liability | 4,700,000 | ||||
Purchase consideration, third payment contingent consideration liability | 2,200,000 | ||||
Goodwill | 9,432,000 | ||||
Additional goodwill acquired | 1,400,000 | ||||
Acquisition and transitional costs | $ 159,000 | ||||
AltaVoice | New Contingent Milestone Based On Achieving Revenue Target During 2017 And 2018 | |||||
Business Acquisition [Line Items] | |||||
Business combination actual payout description | The actual payout is dependent upon the 2017 and 2018 revenue target (capped at $14.0 million) times 75% less $5.5 million. | ||||
AltaVoice | Scenario, Forecast | |||||
Business Acquisition [Line Items] | |||||
Business acquisition contingently payable amount | $ 5,000,000 | ||||
AltaVoice | Scenario, Forecast | Milestone Based on Certain Threshold of Revenue Achieved During 2017 [Member] | |||||
Business Acquisition [Line Items] | |||||
Business acquisition common stock issued, value | 5,000,000 | ||||
AltaVoice | Scenario, Forecast | New Contingent Milestone Based On Achieving Revenue Target During 2017 And 2018 | |||||
Business Acquisition [Line Items] | |||||
Business combination, contingent consideration, actual revenue target for payout | $ 14,000,000 | ||||
Business combination contingent consideration, percentage of actual revenue target | 75.00% | ||||
Business combination contingent consideration, amount deducted on actual revenue target | $ 5,500,000 | ||||
Business combination possible payout amount | 5,000,000 | ||||
AltaVoice | Scenario, Forecast | New Contingent Milestone Based On Achieving Revenue Target During 2017 And 2018 | Maximum | |||||
Business Acquisition [Line Items] | |||||
Business acquisition common stock issued, value | $ 5,000,000 | ||||
AltaVoice | Common stock | |||||
Business Acquisition [Line Items] | |||||
Business acquisition payment through issuance of shares company's common stock | $ 5,500,000 | ||||
Business acquisition common stock issued, shares | 641,126 | ||||
AltaVoice | Common stock | Maximum | |||||
Business Acquisition [Line Items] | |||||
Business acquisition contingently payable amount | $ 5,000,000 | ||||
AltaVoice | Common stock | Scenario, Forecast | |||||
Business Acquisition [Line Items] | |||||
Business acquisition payment through issuance of shares company's common stock | 5,000,000 | ||||
Business acquisition common stock issued, value | $ 5,000,000 |
Business Combinations - Summary
Business Combinations - Summary of fair values of assets acquired and liabilities assumed (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Jan. 31, 2017 |
Business Acquisition [Line Items] | ||
Goodwill | $ 9,432 | |
AltaVoice | ||
Business Acquisition [Line Items] | ||
Cash | $ 54 | |
Accounts receivable | 274 | |
Prepaid expense and other assets | 52 | |
Total identifiable assets acquired | 4,625 | |
Accounts payable | (28) | |
Deferred revenue | (202) | |
Accrued expenses | (21) | |
Deferred tax liability | (1,422) | |
Total liabilities assumed | (1,673) | |
Net identifiable assets acquired | 2,952 | |
Goodwill | 9,432 | |
Net assets acquired | 12,384 | |
AltaVoice | Non-compete agreement | ||
Business Acquisition [Line Items] | ||
Intangible Assets | 286 | |
AltaVoice | Developed technology | ||
Business Acquisition [Line Items] | ||
Intangible Assets | 570 | |
AltaVoice | Customer relationships | ||
Business Acquisition [Line Items] | ||
Intangible Assets | $ 3,389 |
Business Combinations - Schedul
Business Combinations - Schedule of economic benefits of intangible assets are expected to be realized (Details) - AltaVoice - USD ($) $ in Thousands | 1 Months Ended | |
Jan. 31, 2017 | Mar. 31, 2017 | |
Business Acquisition [Line Items] | ||
Gross Purchased Intangible Asset | $ 4,245 | $ 4,245 |
Non-compete agreements | ||
Business Acquisition [Line Items] | ||
Gross Purchased Intangible Asset | $ 286 | 286 |
Estimated Useful Life (in Years) | 5 years | |
Customer relationships | ||
Business Acquisition [Line Items] | ||
Gross Purchased Intangible Asset | $ 3,389 | 3,389 |
Estimated Useful Life (in Years) | 10 years | |
Developed technology | ||
Business Acquisition [Line Items] | ||
Gross Purchased Intangible Asset | $ 570 | $ 570 |
Estimated Useful Life (in Years) | 6 years |
Business Combinations - Sched31
Business Combinations - Schedule of acquisition related intangibles (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Jan. 31, 2017 | |
Business Acquisition [Line Items] | ||
Acquisition-related intangible,net | $ 4,122 | |
AltaVoice | ||
Business Acquisition [Line Items] | ||
Acquisition-related intangible,cost | 4,245 | $ 4,245 |
Acquisition-related intangible,accumulated amortization | (123) | |
Acquisition-related intangible,net | 4,122 | |
AltaVoice | Customer relationships | ||
Business Acquisition [Line Items] | ||
Acquisition-related intangible,cost | 3,389 | 3,389 |
Acquisition-related intangible,accumulated amortization | (85) | |
Acquisition-related intangible,net | $ 3,304 | |
Acquisition-related intangible estimated remaining useful life (in Years) | 9 years 9 months 18 days | |
AltaVoice | Developed technology | ||
Business Acquisition [Line Items] | ||
Acquisition-related intangible,cost | $ 570 | 570 |
Acquisition-related intangible,accumulated amortization | (24) | |
Acquisition-related intangible,net | $ 546 | |
Acquisition-related intangible estimated remaining useful life (in Years) | 5 years 9 months 18 days | |
AltaVoice | Non-compete agreement | ||
Business Acquisition [Line Items] | ||
Acquisition-related intangible,cost | $ 286 | $ 286 |
Acquisition-related intangible,accumulated amortization | (14) | |
Acquisition-related intangible,net | $ 272 | |
Acquisition-related intangible estimated remaining useful life (in Years) | 4 years 9 months 18 days |
Business Combinations - Sched32
Business Combinations - Schedule of estimated future amortization expense of acquisition-related intangibles (Details) $ in Thousands | Mar. 31, 2017USD ($) |
Business Acquisition [Line Items] | |
Acquisition-related intangible,net | $ 4,122 |
AltaVoice | |
Business Acquisition [Line Items] | |
Remainder of 2017 | 368 |
2,018 | 491 |
2,019 | 491 |
2,020 | 491 |
2,021 | 491 |
Thereafter | 1,790 |
Acquisition-related intangible,net | $ 4,122 |
Business Combinations - Summa33
Business Combinations - Summary of pro forma financial information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Business Combinations [Abstract] | ||
Total revenue | $ 10,419 | $ 4,376 |
Net loss | $ (26,985) | $ (25,754) |
Balance sheet components - Cash
Balance sheet components - Cash equivalents and marketable securities (Details) | 3 Months Ended | ||
Mar. 31, 2017USD ($)item | Dec. 31, 2016USD ($) | Mar. 31, 2016USD ($) | |
Investment Holdings | |||
Amortized Cost | $ 60,320,000 | $ 45,255,000 | |
Gross Unrealized Gains | 2,000 | ||
Gross Unrealized Losses | (36,000) | (2,000) | |
Estimated Fair Value | 60,284,000 | 45,255,000 | |
Cash equivalents | 2,245,000 | 14,760,000 | |
Restricted cash | 4,697,000 | 4,697,000 | $ 4,831,000 |
Marketable securities | 53,342,000 | 25,798,000 | |
Total amount of unrealized losses on available-for-sale securities | $ 36,000 | ||
Available-for-sale Securities, Continuous Unrealized Loss Position | |||
Number of securities that are in continuous unrealized loss position for more than one year | item | 0 | ||
Realized gains or losses on available-for-sale securities | $ 0 | ||
Money market funds | |||
Investment Holdings | |||
Amortized Cost | 6,942,000 | 19,457,000 | |
Estimated Fair Value | 6,942,000 | 19,457,000 | |
U.S. treasury notes | |||
Investment Holdings | |||
Amortized Cost | 14,015,000 | 11,515,000 | |
Gross Unrealized Gains | 2,000 | ||
Gross Unrealized Losses | (10,000) | ||
Estimated Fair Value | 14,005,000 | 11,517,000 | |
U.S. government agency securities | |||
Investment Holdings | |||
Amortized Cost | 39,363,000 | 14,283,000 | |
Gross Unrealized Losses | (26,000) | (2,000) | |
Estimated Fair Value | $ 39,337,000 | $ 14,281,000 |
Balance sheet components - Prop
Balance sheet components - Property and equipment (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Property and equipment | |||
Total property and equipment, gross | $ 41,872 | $ 38,261 | |
Accumulated depreciation and amortization | (15,268) | (14,468) | |
Total property and equipment, net | 26,604 | 23,793 | |
Depreciation and amortization | 1,733 | $ 1,555 | |
Leasehold improvements | |||
Property and equipment | |||
Total property and equipment, gross | 11,687 | 1,256 | |
Laboratory equipment | |||
Property and equipment | |||
Total property and equipment, gross | 16,573 | 13,644 | |
Equipment under capital lease | |||
Property and equipment | |||
Total property and equipment, gross | 4,489 | 5,871 | |
Computer equipment | |||
Property and equipment | |||
Total property and equipment, gross | 2,759 | 2,514 | |
Software | |||
Property and equipment | |||
Total property and equipment, gross | 2,489 | 2,489 | |
Furniture and fixtures | |||
Property and equipment | |||
Total property and equipment, gross | 523 | 238 | |
Automobiles | |||
Property and equipment | |||
Total property and equipment, gross | 58 | 20 | |
Construction-in-progress | |||
Property and equipment | |||
Total property and equipment, gross | $ 3,294 | $ 12,229 |
Balance sheet components - Accr
Balance sheet components - Accrued liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Balance Sheet Related Disclosures [Abstract] | ||
Accrued compensation and related expenses | $ 3,543 | $ 3,072 |
Accrued laboratory materials purchases | 797 | 338 |
Accrued professional services | 663 | 446 |
Accrued construction in progress | 965 | 1,215 |
Lease incentive obligation, current | 468 | 468 |
Liabilities associated with business combination | 4,762 | |
Other | 1,914 | 1,172 |
Total accrued liabilities | $ 13,112 | $ 6,711 |
Balance sheet components - Othe
Balance sheet components - Other long-term liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Balance Sheet Related Disclosures [Abstract] | ||
Lease incentive obligation, non-current | $ 4,126 | $ 4,243 |
Deferred rent, non-current | 4,024 | 3,419 |
Liabilities associated with business combination | 2,200 | |
Other non-current liabilities | 174 | 175 |
Total other long-term liabilities | $ 10,524 | $ 7,837 |
Fair value measurements - Finan
Fair value measurements - Financial instruments at fair value on a recurring basis (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Total financial assets | $ 60,284 | $ 45,255 |
Recurring basis | ||
Total financial assets | 60,284 | 45,255 |
Total financial liabilities | 2,200 | |
Recurring basis | Contingent consideration | ||
Total financial liabilities | 2,200 | |
Recurring basis | Level 1 | ||
Total financial assets | 20,947 | 30,974 |
Recurring basis | Level 2 | ||
Total financial assets | 39,337 | 14,281 |
Recurring basis | Level 3 | ||
Total financial liabilities | 2,200 | |
Recurring basis | Level 3 | Contingent consideration | ||
Total financial liabilities | 2,200 | |
Recurring basis | Money market funds | ||
Total financial assets | 6,942 | 19,457 |
Recurring basis | Money market funds | Level 1 | ||
Total financial assets | 6,942 | 19,457 |
U.S. treasury notes | ||
Total financial assets | 14,005 | 11,517 |
U.S. treasury notes | Recurring basis | ||
Total financial assets | 14,005 | 11,517 |
U.S. treasury notes | Recurring basis | Level 1 | ||
Total financial assets | 14,005 | 11,517 |
U.S. government agency securities | ||
Total financial assets | 39,337 | 14,281 |
U.S. government agency securities | Recurring basis | ||
Total financial assets | 39,337 | 14,281 |
U.S. government agency securities | Recurring basis | Level 2 | ||
Total financial assets | $ 39,337 | $ 14,281 |
Fair value measurements - Addit
Fair value measurements - Additional Information (Details) - USD ($) | Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2016 |
Transfers from Level 1 to Level 2 | $ 0 | $ 0 | |||
Transfers from Level 2 to Level 1 | 0 | 0 | |||
Transfers from Level 1 to Level 3 | 0 | 0 | |||
Transfers from Level 3 to Level 1 | 0 | 0 | |||
Transfers from Level 2 to Level 3 | 0 | 0 | |||
Transfers from Level 3 to Level 2 | 0 | $ 0 | |||
AltaVoice | Scenario, Forecast | |||||
Business acquisition contingently payable amount | $ 5,000,000 | ||||
AltaVoice | Contingent consideration | Level 3 | Recurring basis | |||||
Estimated fair value for contingent consideration | 2,200,000 | ||||
AltaVoice | Common stock | Scenario, Forecast | |||||
Business acquisition common stock issued, value | $ 5,000,000 | ||||
AltaVoice | Maximum | Common stock | |||||
Business acquisition contingently payable amount | $ 5,000,000 | ||||
AltaVoice | Maximum | Common stock | Scenario, Forecast | |||||
Contingent revenue threshold | $ 10,000,000 | ||||
AltaVoice | Maximum | New Contingent Milestone Based On Achieving Revenue Target During 2017 And 2018 | Scenario, Forecast | |||||
Business acquisition common stock issued, value | $ 5,000,000 | ||||
AltaVoice | Minimum | Common stock | Scenario, Forecast | |||||
Contingent revenue threshold | $ 10,000,000 | ||||
AltaVoice | Minimum | New Contingent Milestone Based On Achieving Revenue Target During 2017 And 2018 | Scenario, Forecast | |||||
Contingent revenue threshold | $ 10,000,000 |
Fair value measurements - Fin40
Fair value measurements - Financial instruments measured at fair value on a recurring basis (Details) - Contingent consideration - Recurring basis - Level 3 $ in Thousands | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Contingent consideration | $ 2,200 |
Balance as of March 31, 2017 | $ 2,200 |
Fair value measurements - Carry
Fair value measurements - Carrying amount and the estimated fair value of the Company's outstanding debt (Details) - Recurring basis - Level 2 - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Carrying Amount | ||
Debt | $ 38,921 | $ 12,102 |
Fair Value | ||
Debt | $ 39,495 | $ 11,905 |
Commitments and contingencies -
Commitments and contingencies - (Operating Leases) - Additional Information (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | ||
Sep. 30, 2015 | Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Future minimum lease payments under operating leases | ||||
Total minimum lease payments | $ 70,111 | |||
Rent expense | 2,200 | $ 1,600 | ||
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 | |||
Lease incentive in form of lease improvements | $ 5,200 | |||
Future minimum lease payments under operating leases | ||||
Total minimum lease payments | $ 68,600 |
Commitments and contingencies43
Commitments and contingencies - Schedule of future minimum payments under operating leases (Details) $ in Thousands | Mar. 31, 2017USD ($) |
Future minimum lease payments under operating leases | |
2017 (remainder of year) | $ 5,134 |
2,018 | 6,898 |
2,019 | 6,946 |
2,020 | 6,917 |
2,021 | 7,079 |
Thereafter | 37,137 |
Total minimum lease payments | $ 70,111 |
Commitments and contingencies44
Commitments and contingencies - (Debt Financing) - Additional Information (Details) - USD ($) | Mar. 15, 2017 | Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2018 | Dec. 31, 2016 | Jul. 31, 2015 |
Term loan, borrowing amount | $ 38,921,000 | |||||
Net proceeds from term loan | 39,661,000 | |||||
Loan and Security Agreement | Initial term loan | ||||||
Term loan, borrowing amount | $ 40,000,000 | |||||
Net proceeds from term loan | 39,700,000 | |||||
Loan and Security Agreement | Second Term Loan | Scenario, Forecast | ||||||
Term loan, borrowing amount | $ 20,000,000 | |||||
Loan and Security Agreement | Secured Debt | ||||||
Maximum borrowing capacity | $ 15,000,000 | |||||
Obligations under Loan Agreement | 40,000,000 | $ 12,100,000 | ||||
Repayment of balance debt obligations | $ 12,100,000 | |||||
Term loans, variable interest rate | 7.73% | |||||
Term loans, index interest rate, minimum | 0.77% | |||||
Term loans, floor interest rate | 8.50% | |||||
Term loans, variable interest rate description | Term loans under the Loan and Security Agreement bear interest at a floating rate equal to an index rate plus 7.73%, where the index rate is the greater of 0.77% or the 30-day U.S. Dollar London Interbank Offered Rate (LIBOR) as reported in The Wall Street Journal, with the floating rate resetting monthly subject to a floor of 8.5%. | |||||
Term loans, payment description | The Company can make monthly interest-only payments until May 1, 2019 (or, subject to certain conditions, May 1, 2020), and thereafter monthly payments of principal and interest are required to fully amortize the borrowed amount by a final maturity date of March 1, 2022. | |||||
Term loans, frequency of periodic payment | monthly | |||||
Term loans, maturity date | Mar. 1, 2022 | |||||
Term loans, fee percentage of funded draw | 5.00% | |||||
Term loans, facility fee percentage | 0.50% | |||||
Warrants granted to acquire shares, percentage of funded amount | 3.00% | |||||
Warrants granted to acquire shares description | the Company will grant to the lender a warrant to acquire shares of the Company’s common stock equal to the quotient of 3% of the funded amount divided by a per share exercise price equal to the lower of the average closing price for the previous ten days of trading (calculated on the day prior to funding) or the closing price on the day prior to funding. | |||||
Warrants granted to purchase shares of common stock | 116,845 | |||||
Warrants granted to purchase common stock exercise price | $ 10.27 | |||||
Fair value of warrant | $ 740,000 | 740,000 | ||||
Warrants term | 10 years | |||||
Debt issuance cost | 339,000 | |||||
Interest expense | $ 306,000 | $ 52,000 | ||||
Loan and Security Agreement | Secured Debt | Minimum | ||||||
Term loans, prepayment fee percentage of outstanding balance | 1.00% | |||||
Loan and Security Agreement | Secured Debt | Maximum | ||||||
Term loans, prepayment fee percentage of outstanding balance | 3.00% | |||||
Loan and Security Agreement | Secured Debt | Other Income (Expense), Net | ||||||
Prepayment premium classified as extinguishment of debt | $ 670,000 |
Commitments and contingencies45
Commitments and contingencies - Schedule of future payments under loan and security agreement (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Future payments under the Loan Agreement | ||
2017 (remainder of year) | $ 2,310 | |
2,018 | 3,455 | |
2,019 | 12,367 | |
2,020 | 15,843 | |
2,021 | 14,651 | |
Thereafter | 5,479 | |
Total remaining debt payments | 54,105 | |
Less: amount representing debt discount | (1,079) | |
Less: amount representing interest | (14,105) | |
Present value of remaining debt payments | 38,921 | |
Less: current portion | $ (3,381) | |
Total non-current debt obligation | $ 38,921 | $ 8,721 |
Commitments and Contingencies46
Commitments and Contingencies - (Capital Leases) - Additional Information (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Lease term | 3 years | ||
Interest expense | $ 16,000 | $ 32,000 | |
Property and equipment under capital lease | 4,500,000 | $ 5,900,000 | |
Accumulated depreciation and amortization | $ 1,800,000 | $ 2,800,000 | |
Minimum | |||
Interest rate (as a percent) | 4.30% | ||
Maximum | |||
Interest rate (as a percent) | 6.30% |
Commitments and Contingencies47
Commitments and Contingencies - Schedule of future minimum lease payments under capital leases (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Future payments under the capital lease | ||
2017 (remainder of year) | $ 1,377 | |
2,018 | 849 | |
2,019 | 581 | |
2,020 | 194 | |
Total capital lease obligations | 3,001 | |
Less: amount representing interest | (188) | |
Present value of net minimum capital lease payments | 2,813 | |
Less: current portion | (1,647) | $ (1,309) |
Total non-current capital lease obligations | $ 1,166 | $ 266 |
Stock incentive plans - Additio
Stock incentive plans - Additional Information (Details) - USD ($) | 1 Months Ended | 3 Months Ended | |||
Feb. 28, 2017 | Feb. 29, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | Jan. 31, 2015 | |
Stock incentive plan | |||||
Stock-based compensation | $ 3,278,000 | $ 1,465,000 | |||
RSUs | |||||
Stock incentive plan | |||||
Vested stock units awarded | 13,316 | ||||
Vested and expected to vest | |||||
Weighted-average grant date fair value (in dollars per share) | $ 10.22 | $ 10 | |||
PRSU | |||||
Stock incentive plan | |||||
Vested stock units awarded | 352,045 | ||||
Vested and expected to vest | |||||
Weighted-average grant date fair value (in dollars per share) | $ 0 | $ 6.33 | |||
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 | ||||
Vested stock units awarded | 352,045 | ||||
Stock-based compensation | $ 400,000 | $ 0 | |||
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 | ||||
Stock incentive plans | Options | |||||
Vested and expected to vest | |||||
Weighted-average grant date fair value (in dollars per share) | $ 5.85 | $ 6.29 | |||
Total grant date fair value of options to purchase common stock vested | $ 1,100,000 | $ 1,300,000 | |||
Exercised, aggregate intrinsic value | $ 856,000 | $ 507,000 | |||
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 | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2016 | |
RSUs | ||
Activity under the plan | ||
Units granted | (1,668,965) | |
Units cancelled | 27,607 | |
PRSU | ||
Activity under the plan | ||
Units cancelled | 177,960 | |
Stock incentive plans | Options | ||
Activity under the plan | ||
Shares available for grant | 1,375,766 | |
Balance at the beginning of the period | 4,490,662 | |
Additional shares reserved | 2,923,183 | |
Options granted (in shares) | 443,648 | |
Option cancelled (in shares) | (108,418) | |
Options exercised (in shares) | (157,799) | |
Shares available for grant | 2,500,321 | 1,375,766 |
Balance at the end of the period | 4,668,093 | 4,490,662 |
Weighted-average exercise price | ||
Balance at the beginning of the period (in dollars per share) | $ 8.21 | |
Options granted (in dollars per share) | 8.97 | |
Options cancelled (in dollars per share) | 9.87 | |
Options exercised (in dollars per share) | 4.57 | |
Balance at the end of the period (in dollars per share) | $ 8.37 | $ 8.21 |
Additional information | ||
Exercisable, Number of shares | 1,723,431 | |
Exercisable, weighted-average exercise price (in dollars per share) | $ 6.89 | |
Weighted-average remaining contractual life | 8 years 2 months 12 days | 8 years 1 month 10 days |
Exercisable, weighted-average remaining contractual life | 7 years 2 months 1 day | |
Aggregate intrinsic value | $ 12,846 | $ 5,312 |
Exercisable, aggregate intrinsic value | $ 7,351 | |
Vested and expected to vest | ||
Number of shares | 4,212,145 | |
Weighted-average exercise price (in dollars per share) | $ 8.27 | |
Weighted-average remaining contractual life | 8 years 1 month 13 days | |
Aggregate intrinsic value | $ 12,036 | |
Stock incentive plans | RSUs | ||
Activity under the plan | ||
Units granted | (1,668,965) | |
Units cancelled | 27,607 | |
2015 Plan | PRSU | ||
Activity under the plan | ||
Units cancelled | 177,960 |
Stock incentive plans - RSU and
Stock incentive plans - RSU and PRSU Activity (Details) | 3 Months Ended |
Mar. 31, 2017$ / sharesshares | |
RSUs | |
Number of Shares | |
Balance at the beginning of the period (in shares) | shares | 1,421,757 |
Granted (in shares) | shares | 1,668,965 |
Vested (in shares) | shares | (13,316) |
Cancelled (in shares) | shares | (27,607) |
Balance at the end of the period (in shares) | shares | 2,519,794 |
Weighted-Average Grant Date Fair Value | |
Balance at the beginning of the period (in dollars per share) | $ / shares | $ 8.77 |
Granted (in dollars per share) | $ / shares | 10.22 |
Vested (in dollars per share) | $ / shares | 8.99 |
Cancelled (in dollars per share) | $ / shares | 9.98 |
Balance at the end of the period (in dollars per share) | $ / shares | $ 10.18 |
PRSU | |
Number of Shares | |
Vested (in shares) | shares | (352,045) |
Cancelled (in shares) | shares | (177,960) |
Weighted-Average Grant Date Fair Value | |
Vested (in dollars per share) | $ / shares | $ 6.54 |
Cancelled (in dollars per share) | $ / shares | $ 6.53 |
Stock incentive plans - Risk-fr
Stock incentive plans - Risk-free interest rate & Dividend yield (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | |
Jan. 31, 2015 | Mar. 31, 2017 | Mar. 31, 2016 | |
Non-Employee Options | |||
Assumptions used in determination of fair value of options using the Black-Scholes option pricing valuation model | |||
Expected volatility | 71.05% | ||
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 | 7 years | |
Expected volatility | 72.29% | ||
Risk-free interest rate | 2.02% | 1.44% | |
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) | 9 years | 9 years 6 months 26 days | |
Expected volatility | 77.36% | ||
Risk-free interest rate | 2.31% | 1.73% | |
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 1 month 17 days | |
Expected volatility | 72.94% | 71.05% | |
Risk-free interest rate | 2.05% | 1.34% | |
2015 Employee Stock Purchase Plan | |||
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% | ||
Cash received from payroll deductions | $ 1 | ||
Common stock reserved for future issuance | 686,121 |
Stock incentive plans - Stock-b
Stock incentive plans - Stock-based compensation expense (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Stock-based compensation | ||
Total stock-based compensation expense | $ 3,278,000 | $ 1,465,000 |
Unrecognized stock-based compensation | $ 16,300,000 | |
Expected period to recognize on a straight-line basis | 2 years 9 months 18 days | |
Capitalized stock-based employee compensation | $ 0 | |
RSUs | ||
Stock-based compensation | ||
Unrecognized stock-based compensation | $ 19,300,000 | |
Expected period to recognize on a straight-line basis | 2 years 9 months 18 days | |
PRSU | ||
Stock-based compensation | ||
Unrecognized stock-based compensation | $ 0 | |
Cost of revenue | ||
Stock-based compensation | ||
Total stock-based compensation expense | 317,000 | 201,000 |
Research and development | ||
Stock-based compensation | ||
Total stock-based compensation expense | 1,295,000 | 538,000 |
Selling and marketing | ||
Stock-based compensation | ||
Total stock-based compensation expense | 716,000 | 241,000 |
General and administrative | ||
Stock-based compensation | ||
Total stock-based compensation expense | $ 950,000 | $ 485,000 |
Net loss per common share - Sch
Net loss per common share - Schedule of Earnings per share, basic and diluted (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |||
Net loss | $ (26,928) | $ (25,590) | $ (100,300) |
Shares used in computing net loss per share, basic and diluted | 42,318,136 | 31,964,541 | |
Net loss per share, basic and diluted | $ (0.64) | $ (0.80) |
Net loss per common share - S54
Net loss per common share - Schedule of Antidilutive securities excluded from computation of earnings per share (Details) - shares | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Antidilutive shares excluded from diluted net loss per share | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 7,478,936 | 5,699,600 |
Options | ||
Antidilutive shares excluded from diluted net loss per share | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 4,668,093 | 4,570,714 |
Warrants | ||
Antidilutive shares excluded from diluted net loss per share | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 116,845 | |
RSUs | ||
Antidilutive shares excluded from diluted net loss per share | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 2,519,794 | 998,837 |
ESPP | ||
Antidilutive shares excluded from diluted net loss per share | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 174,204 | 130,049 |
Geographic information (Details
Geographic information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Geographic information | ||
Revenue | $ 10,338 | $ 3,955 |
United States | ||
Geographic information | ||
Revenue | 9,208 | 2,964 |
Canada | ||
Geographic information | ||
Revenue | 597 | 782 |
Rest of World | ||
Geographic information | ||
Revenue | $ 533 | $ 209 |