Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | Apr. 27, 2018 | |
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, 2018 | |
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 | 67,204,562 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 18,443 | $ 12,053 |
Marketable securities | 36,526 | 52,607 |
Accounts receivable | 21,490 | 10,422 |
Prepaid expenses and other current assets | 12,756 | 11,599 |
Total current assets | 89,215 | 86,681 |
Property and equipment, net | 30,307 | 30,341 |
Restricted cash | 5,406 | 5,406 |
Marketable securities, non-current | 225 | 5,983 |
Intangible assets, net | 34,264 | 35,516 |
Goodwill | 46,972 | 46,575 |
Other assets | 1,999 | 576 |
Total assets | 208,388 | 211,078 |
Current liabilities: | ||
Accounts payable | 7,109 | 8,606 |
Accrued liabilities | 26,257 | 22,742 |
Capital lease obligation, current portion | 1,879 | 2,039 |
Total current liabilities | 35,245 | 33,387 |
Capital lease obligation, net of current portion | 2,895 | 3,373 |
Debt | 58,554 | 39,084 |
Other long-term liabilities | 9,734 | 13,440 |
Total liabilities | 106,428 | 89,284 |
Commitments and contingencies (Note 9) | ||
Stockholders’ equity: | ||
Preferred stock, $0.0001 par value: Authorized: 20,000,000 shares; Issued and outstanding: 3,458,823 as of March 31, 2018 and December 31, 2017 | ||
Common stock, $0.0001 par value: Authorized: 400,000,000 shares; Issued and outstanding: 53,710,140 and 53,595,914 shares as of March 31, 2018 and December 31, 2017, respectively | 5 | 5 |
Accumulated other comprehensive loss | (160) | (171) |
Additional paid-in capital | 525,592 | 520,558 |
Accumulated deficit | (423,477) | (398,598) |
Total stockholders’ equity | 101,960 | 121,794 |
Total liabilities and stockholders’ equity | $ 208,388 | $ 211,078 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2018 | Dec. 31, 2017 |
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 | 3,458,823 | 3,458,823 |
Preferred stock, outstanding shares | 3,458,823 | 3,458,823 |
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 | 53,710,140 | 53,595,914 |
Common stock, shares outstanding | 53,710,140 | 53,595,914 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenue: | ||
Test revenue | $ 27,053 | $ 9,695 |
Other revenue | 618 | 643 |
Total revenue | 27,671 | 10,338 |
Costs and operating expenses: | ||
Cost of test revenue | 18,076 | 9,329 |
Research and development | 15,366 | 10,023 |
Selling and marketing | 18,924 | 11,572 |
General and administrative | 11,780 | 6,751 |
Total costs and operating expenses | 64,146 | 37,675 |
Loss from operations | (36,475) | (27,337) |
Other income (expense), net | 1,647 | (691) |
Interest expense | (1,292) | (322) |
Net loss before taxes | (36,120) | (28,350) |
Income tax benefit | (1,422) | |
Net loss | $ (36,120) | $ (26,928) |
Net loss per share, basic and diluted | $ (0.66) | $ (0.64) |
Shares used in computing net loss per share, basic and diluted | 54,381,751 | 42,318,136 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Statement Of Income And Comprehensive Income [Abstract] | ||
Net loss | $ (36,120) | $ (26,928) |
Other comprehensive income (loss): | ||
Unrealized income (loss) on available-for-sale marketable securities, net of tax | 11 | (36) |
Comprehensive loss | $ (36,109) | $ (26,964) |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Cash flows from operating activities: | |||
Net loss | $ (36,120) | $ (26,928) | $ (123,400) |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Depreciation and amortization | 3,433 | 1,733 | |
Stock-based compensation | 4,393 | 3,278 | |
Amortization of premium on marketable securities | 9 | 40 | |
Loss on disposal of assets | 268 | ||
Loss on sales of available-for-sale securities | 23 | ||
Remeasurements of liabilities associated with business combinations | 1,093 | ||
Changes in operating assets and liabilities net of effects of business combination: | |||
Accounts receivable | (224) | (605) | |
Prepaid expenses and other current assets | (1,156) | (506) | |
Other assets | (2,548) | (11) | |
Accounts payable | (1,574) | 1,858 | |
Accrued expenses and other liabilities | (231) | (1,157) | |
Net cash used in operating activities | (32,902) | (22,030) | |
Cash flows from investing activities: | |||
Purchases of marketable securities | (225) | (45,113) | |
Proceeds from sales of marketable securities | 19,965 | ||
Proceeds from maturities of marketable securities | 2,078 | 17,493 | |
Acquisition of businesses, acquired cash | 54 | ||
Purchases of property and equipment | (1,871) | (1,343) | |
Net cash used in investing activities | 19,947 | (28,909) | |
Cash flows from financing activities: | |||
Proceeds from issuance of common stock | 191 | 696 | |
Proceeds from loan and security agreement | 19,792 | 39,661 | |
Loan payments | (12,102) | ||
Capital lease principal payments | (638) | (702) | |
Net cash provided by financing activities | 19,345 | 27,553 | |
Net increase (decrease) in cash, cash equivalents and restricted cash | 6,390 | (23,386) | |
Cash, cash equivalents and restricted cash at beginning of period | 17,459 | 71,522 | 71,522 |
Cash, cash equivalents and restricted cash at end of period | 23,849 | 48,136 | $ 17,459 |
Supplemental cash flow information: | |||
Interest paid | 1,003 | 296 | |
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 | 658 | 3,050 | |
Investment in privately held company in other assets and accrued liabilities | 1,125 | ||
Warrants issued pursuant to loan and security agreement | 383 | 740 | |
Deferred offering costs included in accounts payable and accrued liabilities | $ 263 | ||
Common stock issued for acquisition of businesses | 5,475 | ||
Consideration payable for acquisition of businesses | $ 6,909 |
Organization and description of
Organization and description of business | 3 Months Ended |
Mar. 31, 2018 | |
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. In addition, and as a result of the acquisitions of Good Start Genetics (“Good Start”) in August 2017 and CombiMatrix Corporation (“CombiMatrix”) in November 2017, the Company’s tests also include preimplantation and carrier screening for inherited disorders, prenatal diagnosis, miscarriage analysis and pediatric developmental disorders. 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. For the year ended December 31, 2017, the Company’s net loss was $123.4 million, and for the three months ended March 31, 2018, the Company’s net loss was $36.1 million. At March 31, 2018, the Company’s accumulated deficit was $423.5 million. The Company may need to obtain additional funding to finance operations prior to achieving profitability. Company management regularly considers fundraising opportunities and will determine the timing, nature and size of future 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 (“ASU”) 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, 2017. The results for the three months ended March 31, 2018 are not necessarily indicative of the results expected for the full fiscal year or any other periods. |
Summary of significant accounti
Summary of significant accounting policies | 3 Months Ended |
Mar. 31, 2018 | |
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 (See Note 3, “Revenue, accounts receivable and deferred revenue” for further information); the acquisition-date fair value of intangible assets; the fair value of contingent consideration associated with acquisitions; the recoverability of long-lived assets; impairment of goodwill and intangible 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, cash equivalents, marketable securities and accounts receivable. The Company’s cash and cash equivalents are held by financial institutions in the United States. Such deposits may exceed federally insured limits. One customer represented 15% and 13% of accounts receivable in the condensed consolidated financial statements as of March 31, 2018 and December 31, 2017, respectively. One customer represented 16% of total revenue for the three months ended March 31, 2018 and no customer represented 10% or more of total revenue for the three months ended March 31, 2017. Accounts receivable The Company receives payment for its tests from partners, patients, institutional customers and third-party payers. See Note 3, “Revenue, accounts receivable and deferred revenue” for further information. 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. Goodwill In accordance with ASC 350, Intangibles-Goodwill and Other . The Company did not incur any goodwill impairment losses in any of the periods presented. Fair value of financial instruments The Company’s financial instruments consist principally of cash and cash equivalents, marketable securities, accounts payable, accrued liabilities, 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. See Note 7, “Fair value measurements” for disclosure of the fair value of debt and further information on the fair value of the Company’s financial instruments. Variable interest entity The Company has a variable interest in a variable interest entity (“VIE”) through an investment in a convertible note issued by the VIE. The convertible note does not provide the Company with current voting rights in the VIE or with power to direct the activities of the VIE which most significantly affect its economic performance. The Company is not the VIE’s primary beneficiary and does not consolidate the VIE. The Company will continue to assess its investment and future commitments to the investee. To the extent its relationship with the investee changes, the Company may be required to consolidate the investee in future periods. See Note 6, “Balance sheet components”, Note 7, “Fair value measurements” and Note 8, “Investment in privately held company” for additional disclosures related to the convertible note, which is recorded as an available-for-sale security. Revenue recognition The Company recognizes revenue when control of the promised goods or services is transferred to the customer in an amount that reflects the consideration it expects to be entitled to in exchange for those goods or services. All revenues are generated from contracts with customers. Test revenue is generated primarily 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 and family variant tests was de minimis for all periods presented. Other revenue consists primarily of revenue from genome network subscription services which is recognized on a straight-line basis over the subscription term, and revenue from collaboration agreements. Cost of test revenue Cost of test 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. 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 preferred stock, 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 Recently issued accounting pronouncements not yet adopted In February 2018, the FASB issued ASU 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220) In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) Recently adopted accounting pronouncements – Revenue recognition In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) In connection with the adoption of Topic 606, the Company amended its revenue recognition policy to provide for the recognition of certain variable consideration related to diagnostic tests that was previously deferred pending cash collection. Under Topic 606, the Company records variable consideration based on an estimate of the consideration to which it will be entitled. Revenue recognition Adoption of Topic 606, "Revenue from Contracts with Customers" On January 1, 2018, the Company adopted Topic 606 using the modified retrospective transition method. The provisions of Topic 606 were applied to all customer contracts that were not completed as of the date of adoption. Prior period amounts are not adjusted and continue to be reported under the accounting standards in effect for those periods. The Company recognizes revenue when control of the promised goods or services is transferred to the customer in an amount that reflects the consideration it expects to be entitled to in exchange for those goods or services. All revenues are generated from contracts with customers. Diagnostic tests The majority of the Company’s revenue is generated from genetic testing services that provide analysis and associated interpretation of the sequencing of parts of the genome. Test orders are placed under written requisitions signed by the patient and/or medical provider, and the Company often enters into contracts with institutions (e.g., hospitals and clinics) and insurance companies that include pricing provisions under which such tests are billed. Billing terms are generally net thirty days. While the transaction price of diagnostic tests is originally established either via contract or pursuant to the Company’s standard list price, the Company often provides concessions for tests billed to insurance carriers, and therefore the transaction price for patient insurance-billed tests is considered to be variable and revenue is recognized based on an estimate of the consideration to which the Company will be entitled at an amount for which it is probable that a reversal of cumulative consideration will not occur. Making these estimates requires significant judgments based upon such factors as length of payer relationship, historical payment patterns, changes in contract provisions and insurance reimbursement policies. These judgments are reviewed quarterly and revenue recognized is updated, as necessary, until the Company’s obligations are fully settled. In connection with some diagnostic test orders, the Company offers limited re-requisition rights (“Re-Requisition Rights”) that are considered distinct at contract inception, and therefore certain diagnostic test orders contain two performance obligations, the performance of the original test and the Re-Requisition Rights. When Re-Requisition Rights are granted, the Company allocates the transaction price to each performance obligation based on the relative estimated standalone selling prices. In order to comply with loss contract rules, the allocations are adjusted, if necessary, to ensure the amount deferred for Re-Requisition Rights is no less than the estimated cost of fulfilling the Company’s related obligations. The Company looks to transfer of control in assessing timing of recognition of revenue in connection with each performance obligation. In general, revenue in connection with diagnostic tests is recognized upon delivery of the underlying clinical report or when the report is made available on the Company’s web portal. Outstanding performance obligations pertaining to orders received but for which the underlying report has not been issued are generally satisfied within a thirty-day period. Revenue in connection with Re-Requisition Rights is recognized as the rights are exercised or expire unexercised, which is generally within ninety days of initial deferral. Other contracts The Company also enters into collaboration and genome network contracts. Collaboration agreements provide customers with diagnostic testing and related data aggregation reporting services that are provided over the contract term. Collaboration revenue is recognized as the testing and reporting services are delivered to the customer. Genome network offerings consist of subscription services related to a proprietary software platform designed to connect patients, clinicians, advocacy organizations, researchers and therapeutic developers to accelerate the understanding, diagnosis and treatment of hereditary disease. Such services are recognized on a straight-line basis over the subscription periods. Amounts due under collaboration and genome network agreements are typically billable on net thirty-day terms. Other recently adopted accounting pronouncements The Company has determined there are no other recently adopted or issued accounting standards that had, or will have, a material impact on its condensed consolidated financial statements. Prior period reclassifications Revenue amounts in prior periods have been reclassified to conform with current period presentation, which separates test revenue from other revenue. Other revenue consists principally of revenue from genome network subscription services and collaboration agreements. |
Revenue, accounts receivable an
Revenue, accounts receivable and deferred revenue | 3 Months Ended |
Mar. 31, 2018 | |
Revenue From Contract With Customer [Abstract] | |
Revenue, accounts receivable and deferred revenue | 3. Revenue, accounts receivable and deferred revenue As described in Note 2, the Company adopted Topic 606 effective January 1, 2018. In connection with the adoption t he Company utilized the following practical expedients and exemptions: • Certain information about remaining performance obligations is not disclosed because the underlying contracts have an original expected duration of one year or less. • Sales commissions are expensed when incurred because the amortization period would have been one year or less. Commission costs are recorded as a component of sales and marketing expenses. • No adjustments to promised consideration were made for financing as the Company expects, at contract inception, that the period between the transfer of a promised good or service and when the customer pays for that good or service will be one year or less. The adoption of Topic 606 resulted in a cumulative-effect adjustment of $11.2 million to accounts receivable and accumulated deficit as of January 1, 2018, primarily related to the recognition of uncollected diagnostic test variable consideration as of the date of adoption. Test revenue without adoption of Topic 606 for the three months ended March 31, 2018 includes cash collections related to accounts receivable recorded as of January 1, 2018 in connection with the Topic 606 cumulative-effect adjustment. The effect of the adoption of Topic 606 upon financial statement line items in the Company’s condensed consolidated statement of operations for the three months ended March 31, 2018, and the Company’s condensed consolidated balance sheet as of March 31, 2018 was as follows (in thousands, except per share amounts): Three Months Ended March 31, 2018 Without Effect of Adoption of Adoption As Reported Topic 606 Higher/(Lower) Test revenue $ 27,053 $ 26,980 $ 73 Net loss $ (36,120 ) $ (36,193 ) $ 73 Net loss per share, basic and diluted $ (0.66 ) $ (0.67 ) $ 0.01 As of March 31, 2018 Without Effect of Adoption of Adoption As Reported Topic 606 Higher/(Lower) Accounts receivable, net $ 21,490 $ 10,486 $ 11,004 Accumulated deficit $ (423,477 ) $ (434,790 ) $ 11,313 Stockholders' equity $ 101,960 $ 90,647 $ 11,313 Disaggregation of revenue Diagnostic test revenues are generated from three groups of customers: institutions, such as hospitals and clinics, patients who pay directly, and patient’s insurance carriers. Amounts billed and collected, and the timing of collections, vary based on whether the payer is an institution, an insurance carrier or a patient. Accordingly, for purposes of complying with the disclosure requirements of Topic 606, diagnostic test revenues are disaggregated between these three payer groups. Further, revenue recognized under collaboration and genome network agreements is disaggregated from diagnostic test revenue. The following table includes the Company’s revenues as disaggregated by payer category (in thousands, unaudited): Three Months Ended March 31, 2018 2017 (1) Diagnostic tests: Institutions $ 7,231 $ 2,600 Patient - direct 2,850 757 Patient - insurance 16,972 6,338 Total diagnostic tests 27,053 9,695 Collaboration and genome network 618 643 Total revenues $ 27,671 $ 10,338 (1) Included in revenue in the Company’s condensed consolidated statement of operations for the three months ended March 31, 2018 was $139,000 that was included in deferred revenue at January 1, 2018. There were no adjustments to variable consideration for performance obligations satisfied in prior periods. Accounts receivable, net The majority of the Company’s accounts receivable represents amounts billed to institutions (e.g., hospitals, clinics) and estimated amounts to be collected from third-party insurance payers for diagnostic test revenue recognized. Also included is amounts due under the terms of collaboration and genome network agreements for diagnostic testing and data aggregation reporting services provided and proprietary platform access rights transferred. Deferred revenues The Company records deferred revenues when cash payments are received or due in advance of its performance related to one or more performance obligations. The amounts deferred to date primarily consist of consideration received pertaining to the estimated exercise of certain Re-Requisition Rights. In order to comply with loss contract rules, the Company’s Re-Requisition Rights revenue deferral is no less than the estimated cost of fulfilling its related obligations. The Company recognizes revenue related to Re-Requisition Rights as the rights are exercised or expire unexercised, which is generally within 90 days of initial deferral. |
Business combinations
Business combinations | 3 Months Ended |
Mar. 31, 2018 | |
Business Combinations [Abstract] | |
Business combinations | 4. Business combinations AltaVoice On January 6, 2017, the Company acquired AltaVoice (formerly Patient Crossroads, Inc.), 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 $5.0 million divided by the trailing average share price of the Company’s common stock for the 30 days preceding March 31, 2018. This payment was made on April 2, 2018 (see Note 13, “Subsequent events”); (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 was achieved during 2017, with the shares deliverable equal to $5.0 million divided by the trailing average share price of the Company’s common stock for the 30 days preceding March 31, 2018. As the foregoing milestone was not achieved, 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 would be payable. 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 was accreted to fair value at each reporting date until the extinguishment of the liability on April 2, 2018 (see Note 13, “Subsequent events”). 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, For the second payment, whose acquisition-date fair value was $4.7 million, the Company recorded accretion gains (losses) of $1.6 million and $(53,000) in other income (expense), net, for the three months ended March 31, 2018 and 2017, respectively. The accretion gain in 2018 resulted from an adjustment to the value of the second payment as of March 31, 2018, and principally reflected the difference between the value of the common shares deliverable, based upon the closing price of the Company’s stock on March 29, 2018, and the value per share used to calculate the number of common shares deliverable. The accretion loss in 2017 resulted from an adjustment to the discounted value of the second payment, reflecting the passage of time. For the third payment, whose contingent acquisition-date fair value was $2.2 million, the Company recorded remeasurement losses of $488,000 and $0 in operating expense for the three months ended March 31, 2018 and 2017, respectively. The remeasurement losses recorded in 2018 reflect updated estimations of fair value of the third payment, based upon achieving a revenue target during 2017 and 2018, as the milestone based on a certain threshold of revenue to be achieved during 2017 was not met. The principal inputs affecting that estimation were updates to the Company’s revenue forecasts and the passage of time. Assets acquired and liabilities assumed are recorded 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. Customer relationships are being amortized on an accelerated basis, utilizing free cash flows, over a period of ten years. All other acquisition-related intangibles 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 Assets Estimated Useful Life (in Years) Non-compete agreement $ 286 5 Developed technology 570 6 Customer relationships 3,389 10 $ 4,245 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 Company’s condensed consolidated statements of operations for the three months ended March 31, 2017. 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 three months ended March 31, 2017, which were primarily general and administrative related. Ommdom On June 11, 2017, the Company acquired Ommdom, Inc. (“Ommdom”), a privately-held company that develops, commercializes and sells hereditary risk assessment and management software, including CancerGene Connect, a cancer genetic counseling platform. The acquisition expands Invitae’s suite of genome management offerings designed to help patients and clinicians use genetic information as part of mainstream medical care. CancerGene Connect is a platform for collecting and managing genetic family histories. The platform uses a cloud-based, mobile friendly patient interface to gather family history information from patients prior to a clinician appointment. Then, analysis tools analyze patients’ predisposition to disease and provide actionable analysis to inform therapeutic decisions, such as genetic testing or treatment approaches. In addition, the platform provides clinicians with the ability to look beyond the individual to understand trends across all of their patients. Pursuant to the terms of a Stock Exchange Agreement, the Company acquired all of the outstanding shares of Ommdom for consideration of $6.1 million, payable entirely in the Company’s common stock. There was no cash consideration nor any contingent payments associated with the acquisition, other than a hold-back amount of $613,000. Per the terms of the agreement, the Company will issue shares of its common stock as follows: (a) payment of $5.5 million through the issuance of 600,108 shares of the Company’s common stock; and (b) payment of $0.6 through the issuance of 66,582 shares of the Company’s common stock, representing a hold-back amount, and payable on the twelve-month anniversary of the acquisition date. The first payment of $5.5 million was classified as equity. The second payment of $613,000 was recorded as a stock payable liability and will be reclassified to equity upon the issuance of the Company’s common stock on the twelve-month anniversary of the acquisition date. Assets acquired and liabilities assumed are recorded 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 $ 53 Accounts receivable 10 Prepaid expense and other assets 4 Trade name 13 Developed technology 2,335 Customer relationships 147 Total identifiable assets acquired 2,562 Accounts payable (16 ) Accrued expenses (17 ) Deferred tax liability (434 ) Total liabilities assumed (467 ) Net identifiable assets acquired 2,095 Goodwill 4,045 Net assets acquired $ 6,140 Finite-lived intangibles included in the above table 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 Assets Estimated Useful Life (in Years) Trade name $ 13 5 Developed technology 2,335 5 Customer relationships 147 5 $ 2,495 Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired. The acquisition of Ommdom resulted in the recognition of $4.0 million of goodwill. The Company believes this goodwill consists principally of expected synergies to be realized by expanding the Company’s suites of genome management offerings designed to help patients and clinicians use genetic information as part of mainstream medical care. In accordance with ASC 350, goodwill will not be amortized but rather 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 $434,000 relating to the tax consequence of recognizing the fair value of the acquisition-related intangibles, with an equal offset to deferred tax liability. Good Start Genetics On August 4, 2017, the Company acquired 100% of the fully diluted equity of Good Start, a privately-held molecular diagnostics company focused on preimplantation and carrier screening for inherited disorders. The acquisition of Good Start is intended to further Invitae’s intention to create a comprehensive genetic information platform providing high-quality, affordable genetic information coupled with world-class clinical expertise to inform healthcare decisions throughout every stage of an individual’s life. The purchase consideration for the Good Start acquisition consisted of the assumption of the net liabilities of Good Start of $24.4 million at the acquisition date. Immediately subsequent to the acquisition of Good Start, the Company paid $18.4 million in cash to settle outstanding notes payable, accrued interest and related costs. In addition, and immediately subsequent to the acquisition, the Company settled outstanding convertible promissory notes payable through: (a) payment of $11.9 million through the issuance of 1,148,283 shares of the Company’s common stock; and (b) payment of $3.6 million through the issuance of 343,986 shares of the Company’s common stock, representing a hold-back amount payable on the one-year anniversary of the acquisition date. Also in connection with the acquisition of Good Start and immediately subsequent to the acquisition, the Company paid bonuses to certain members of Good Start’s management team through: (a) payment of $0.9 million through the issuance of 83,025 shares of the Company’s common stock; and (b) payment of $0.4 million through the issuance of 37,406 shares of the Company’s common stock, representing a hold-back amount payable on the one-year anniversary of the acquisition date. These bonus payments were recorded as general and administrative expense. Assets acquired and liabilities assumed are recorded based on valuations derived from estimated fair value assessments and assumptions used by the Company. The amount recorded as accounts receivable is provisional as the Company expects to receive future cash collections pertaining to Good Start revenue activities completed but not recognized at the acquisition date. The amount recorded as deferred tax liability, zero as of December 31, 2017, is provisional because certain information and analysis related to Good Start’s historical net operating losses that may affect the Company’s valuation is still being obtained or reviewed. Thus, the provisional measurement of fair value discussed above is subject to change. The Company expects to finalize the valuation as soon as practicable, but not later than one year from the acquisition date. 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. At acquisition date, the Company also recorded $4.8 million as a provisional amount for a deferred tax liability because certain information and analysis related to Good Start’s historical net operating losses that may affect the Company’s initial valuation was still being obtained or reviewed at that time. This provisional amount for the deferred tax liability was subsequently reversed during the fourth quarter of 2017 based on the results of further analysis of Good Start’s historical net operating losses. The following table summarizes the fair values of assets acquired and liabilities assumed at the date of acquisition (in thousands): Cash and restricted cash $ 1,381 Accounts receivable 2,507 Prepaid expense and other assets 1,579 Property and equipment 1,320 Trade name 460 Developed technology 5,896 Customer relationships 7,830 Total identifiable assets acquired 20,973 Accounts payable (5,418 ) Accrued expenses (6,802 ) Notes payable (17,904 ) Convertible promissory notes payable (15,430 ) Other liabilities (222 ) Total liabilities assumed (45,776 ) Net identifiable assets acquired (24,803 ) Goodwill 24,803 Net assets acquired $ — In March 2018, the Company recorded an adjustment to its accounting for the amount recorded as accounts receivable at acquisition. Accordingly, the fair value of accounts receivable was decreased by $397,000 on March 31, 2018, with a corresponding increase to goodwill. Customer relationships are being amortized on an accelerated basis, utilizing free cash flows, over a period of eight years. All other finite-lived intangibles included in the above table 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 Assets Estimated Useful Life (in Years) Trade name $ 460 3 Developed technology 5,896 5 Customer relationships 7,830 8 $ 14,186 Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired. The acquisition of Good Start resulted in the recognition of $24.8 million of goodwill. The Company believes this goodwill consists principally of expected synergies to be realized by expanding the Company’s suite of genome management offerings designed to help patients and clinicians use genetic information as part of mainstream medical care. In accordance with ASC 350, goodwill will not be amortized but rather will be tested for impairment at least annually. Goodwill created as a result of the acquisition is not deductible for tax purposes. CombiMatrix On November 14, 2017, the Company completed its acquisition of CombiMatrix in accordance with the terms of the Agreement and Plan of Merger and Reorganization, dated as of July 31, 2017 (the “Merger Agreement”), by and among the Company, Coronado Merger Sub, Inc., a wholly-owned subsidiary of the Company (“Merger Sub”), and CombiMatrix, pursuant to which Merger Sub merged with and into CombiMatrix, with CombiMatrix surviving as a wholly-owned subsidiary of the Company (the “Merger”). At the closing of the Merger, the Company issued shares of its common stock to (i) CombiMatrix’s common stockholders, at an exchange ratio of 0.8692 of a share of the Company’s common stock (the “Merger Exchange Ratio”) for each share of CombiMatrix common stock outstanding immediately prior to the Merger, (ii) CombiMatrix’s Series F preferred stockholders, at the Merger Exchange Ratio for each share of CombiMatrix common stock underlying Series F preferred stock outstanding immediately prior to the Merger, (iii) holders of outstanding and unexercised in-the-money CombiMatrix stock options, which were fully accelerated to the extent of any applicable vesting period and converted into the right to receive the number of shares of the Company’s common stock equal to the Merger Exchange Ratio multiplied by the number of shares of CombiMatrix common stock issuable upon exercise of such option, minus the number of shares of the Company’s common stock determined by dividing the aggregate exercise price for such option by $9.491 (the “Invitae Trailing Average Share Value”), and (iv) holders of outstanding and unsettled CombiMatrix restricted stock units, which were fully accelerated to the extent of any applicable vesting period and converted into the right to receive a number of shares of the Company’s common stock determined by multiplying the number of shares of CombiMatrix common stock that were subject to such restricted stock unit by the Merger Exchange Ratio. In addition, at the closing of the Merger, (a) all outstanding and unexercised out-of-the money CombiMatrix stock options were cancelled and terminated without the right to receive any consideration, (b) all CombiMatrix Series D Warrants and Series F Warrants outstanding and unexercised immediately prior to the closing of the Merger were assumed by the Company and converted into warrants to purchase the number of shares of the Company’s common stock determined by multiplying the number of shares of CombiMatrix common stock subject to such warrants by the Merger Exchange Ratio, and with the exercise price adjusted by dividing the per share exercise price of the CombiMatrix common stock subject to such warrants by the Merger Exchange Ratio, and (c) certain entitlements under CombiMatrix’s executive compensation transaction bonus plan (the “Transaction Bonus Plan”) were paid in shares of the Company’s common stock or RSUs to be settled in shares of the Company’s common stock. All outstanding and unexercised CombiMatrix Series A, Series B, Series C, Series E, and PIPE warrants were repurchased by CombiMatrix prior to closing pursuant to that certain CombiMatrix Common Stock Purchase Warrants Repurchase Agreement dated July 11, 2016. Pursuant to the Merger Agreement, the Company issued an aggregate of 2,703,389 shares of its common stock as follows: (a) payment of $20.5 million through the issuance of 2,611,703 shares of the Company’s common stock to holders of CombiMatrix common stock outstanding; (b) payment of $0.7 million through the issuance of 85,219 shares of the Company’s RSUs to holders of outstanding and unsettled CombiMatrix restricted stock units; (c) payment of $26,000 through the issuance of 3,323 shares of the Company’s common stock to holders of outstanding and unexercised in-the-money CombiMatrix stock options; and (d) payment of $25,000 through the issuance of 3,144 shares of the Company’s common stock to holders of CombiMatrix Series F preferred stock. In addition, and pursuant to the Merger Agreement, the Company issued warrants to purchase an aggregate of 2,077,273 shares of its common stock as follows: (a) payment of $7.4 million through the issuance of warrants to purchase a total of 1,739,689 shares of the Company’s common stock in exchange for all outstanding CombiMatrix Series F warrants; and (b) payment of $1,000 through the issuance of warrants to purchase a total of 337,584 shares of the Company’s common stock in exchange for all outstanding CombiMatrix Series D warrants. In connection with the acquisition of CombiMatrix, the Company paid bonuses to certain members of CombiMatrix’s management team through: (a) payment of $1.7 million through the issuance of common stock and RSUs totaling 214,976 shares of the Company’s common stock to settle payments pursuant to CombiMatrix’s executive compensation transaction bonus plan (the “Transaction Bonus Plan”), recorded as post-combination compensation expense and included in general and administrative expense; and (b) payment of $0.2 million through the issuance of 22,966 shares of the Company’s common stock to settle payments pursuant to the Transaction Bonus Plan, recorded as an assumed liability at the acquisition date. Assets acquired and liabilities assumed are recorded based on valuations derived from estimated fair value assessments and assumptions used by the Company. The amount recorded as deferred tax liability, $0 at December 31, 2017, is provisional because certain information and analysis related to CombiMatrix’s tax attributes and ownership change history that may affect the Company’s valuation is still being obtained or reviewed. Thus, the provisional measurement of fair value discussed above is subject to change. The Company expects to finalize the valuation as soon as practicable, but not later than one year from the acquisition date. 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 and restricted cash $ 1,333 Accounts receivable 4,118 Prepaid expense and other assets 1,299 Property and equipment 437 Other assets - non current 30 Favorable leases 247 Trade name 103 Patent licensing agreement 496 Developed technology 3,162 Customer relationships 12,397 Total identifiable assets acquired 23,622 Accounts payable (276 ) Accrued expenses (3,925 ) Other liabilities (180 ) Total liabilities assumed (4,381 ) Net identifiable assets acquired 19,241 Goodwill 8,692 Net assets acquired $ 27,933 Customer relationships are being amortized on an accelerated basis, utilizing free cash flows, over a period of 11 years. All other finite-lived intangibles included in the above table 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 Assets Estimated Useful Life (in Years) Favorable leases $ 247 2 Trade name 103 1 Patent licensing agreement 496 15 Developed technology 3,162 4 Customer relationships 12,397 11 $ 16,405 Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired. The acquisition of CombiMatrix resulted in the recognition of $8.7 million of goodwill. The Company believes this goodwill consists principally of expected synergies to be realized by expanding the Company’s suite of genome management offerings designed to help patients and clinicians use genetic information as part of mainstream medical care. In accordance with ASC 350, goodwill will not be amortized but rather will be tested for impairment at least annually. Goodwill created as a result of the acquisition is not deductible for tax purposes. Pro-forma Financial Information The unaudited financial information in the table below summarizes the combined results of operations of the Company, AltaVoice, Ommdom, Good Start and CombiMatrix on an unaudited pro forma basis, as though the companies had been combined as of the beginning of the period presented. The unaudited pro forma financial information has been calculated after adjusting the results of the Company, AltaVoice, Ommdom, Good Start and CombiMatrix to reflect the business combination accounting effects resulting from the acquisitions. These accounting effects consist of income tax benefits relating to the tax consequences of recognizing fair value of acquired intangible assets, amortization expense from acquired intangible assets and stock-based compensation expense relating to acquisitions. The unaudited 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 acquisitions had taken place at the beginning of the period presented. The pro forma financial information for the three months ended March 31, 2017 combines the adjusted results of the Company for the three months ended March 31, 2017, which include the adjusted results of AltaVoice subsequent to January 6, 2017 with the historical results for AltaVoice for the period from January 1, 2017 to January 6, 2017, and the adjusted historical results of Ommdom, Good Start and CombiMatrix for the three months ended March 31, 2017. The following table summarizes the pro forma financial information for the three months ended March 31, 2017 (in thousands): Three Months Ended March 31, Actual Pro Forma 2018 2017 Total revenue $ 27,671 $ 18,903 Net loss $ (36,120 ) $ (29,120 ) |
Goodwill and intangible assets
Goodwill and intangible assets | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and intangible assets | 5. Goodwill and intangible assets Goodwill Details of the Company’s goodwill for the three months ended March 31, 2018 are as follows (in thousands): AltaVoice Ommdom Good Start CombiMatrix Total Balance as of December 31, 2017 $ 9,432 $ 4,045 $ 24,406 $ 8,692 $ 46,575 Goodwill adjustment — — 397 — 397 Balance as of March 31, 2018 $ 9,432 $ 4,045 $ 24,803 $ 8,692 $ 46,972 Intangible Assets The following table presents details of the Company’s finite-lived intangible assets as of March 31, 2018 (in thousands): Cost Accumulated Amortization Net Weighted Average Useful Life (in Years) Weighted Average Estimated Remaining Useful Life (in Years) Customer relationships $ 23,763 $ (1,221 ) $ 22,542 10.0 9.4 Developed technology 11,963 (1,581 ) 10,382 4.8 4.2 Non-compete agreement 286 (72 ) 214 5.0 3.8 Trade name 576 (143 ) 433 2.7 2.1 Patent licensing agreement 496 (12 ) 484 15.0 14.7 Favorable leases 247 (38 ) 209 2.0 1.8 $ 37,331 $ (3,067 ) $ 34,264 8.2 7.6 Acquisition-related intangibles included in the above table are finite-lived and are being amortized on an accelerated basis over their estimated lives, which approximates the pattern in which the economic benefits of the intangible assets are realized. Amortization expense was $1.3 million and $0.1 million for the three months ended March 31, 2018 and 2017, respectively. Intangible assets are carried at cost less accumulated amortization. Amortization expense is recorded to research and development, sales and marketing and general and administrative expense. The following table summarizes the Company’s estimated future amortization expense of intangible assets with finite lives as of March 31, 2018 (in thousands): Amount 2018 $ 3,800 2019 5,250 2020 5,525 2021 5,829 2022 4,123 Thereafter 9,737 $ 34,264 |
Balance sheet components
Balance sheet components | 3 Months Ended |
Mar. 31, 2018 | |
Balance Sheet Related Disclosures [Abstract] | |
Balance sheet components | 6. Balance sheet components Cash equivalents and marketable securities The following is a summary of cash equivalents and marketable securities (in thousands): March 31, 2018 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Money market funds $ 6,860 $ — $ — $ 6,860 Certificates of deposit 300 — — 300 U.S. treasury notes 4,999 — (14 ) 4,985 U.S. government agency securities 31,387 — (146 ) 31,241 Convertible note 225 — — 225 $ 43,771 $ — $ (160 ) $ 43,611 Reported as: Cash equivalents $ 1,454 Restricted cash 5,406 Marketable securities 36,751 Total cash equivalents, restricted cash and marketable securities $ 43,611 December 31, 2017 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Money market funds $ 5,998 $ — $ — $ 5,998 Certificates of deposit 300 — — 300 U.S. treasury notes 12,010 — (19 ) 11,991 U.S. government agency securities 46,451 — (152 ) 46,299 $ 64,759 $ — $ (171 ) $ 64,588 Reported as: Cash equivalents $ 592 Restricted cash 5,406 Marketable securities 58,590 Total cash equivalents, restricted cash and marketable securities $ 64,588 The total amount of unrealized losses at March 31, 2018 was $160,000. The total fair value of investments with unrealized losses at March 31, 2018 was $36.2 million. None of the available-for-sale securities held as of March 31, 2018 has been in a continuous unrealized loss position for more than one year. At March 31, 2018, 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, 2018, the remaining contractual maturities of available-for-sale securities ranged from five to ten months. For the three months ended March 31, 2018, there were $23,000 realized losses on available-for-sale securities. Property and equipment, net Property and equipment consisted of the following (in thousands): March 31, 2018 December 31, 2017 Leasehold improvements $ 12,778 $ 12,623 Laboratory equipment 20,934 17,705 Equipment under capital lease 8,595 11,446 Computer equipment 4,023 4,023 Software 2,553 2,520 Furniture and fixtures 569 569 Automobiles 20 20 Construction-in-progress 2,470 965 Total property and equipment, gross 51,942 49,871 Accumulated depreciation and amortization (21,635 ) (19,530 ) Total property and equipment, net $ 30,307 $ 30,341 Depreciation expense was $2.1 million and $1.7 million for the three months ended March 31, 2018 and 2017, respectively. Other assets Other assets consisted of the following (in thousands): March 31, 2018 December 31, 2017 Asset associated with investment in privately held company $ 1,125 $ — Capitalized financing costs 463 170 Security deposits 411 406 Total other assets $ 1,999 $ 576 Accrued liabilities Accrued liabilities consisted of the following (in thousands): March 31, 2018 December 31, 2017 Liabilities associated with business combinations $ 12,116 $ 9,497 Accrued compensation and related expenses 6,827 7,406 Accrued professional services 1,389 1,077 Liability associated with investment in privately held company 1,125 — Accrued laboratory materials purchases 735 1,242 Deferred revenue 550 307 Lease incentive obligation, current 491 489 Accrued outsourced services 253 142 Other 2,771 2,582 Total accrued liabilities $ 26,257 $ 22,742 Other long-term liabilities Other long-term liabilities consisted of the following (in thousands): March 31, 2018 December 31, 2017 Lease incentive obligation, non-current $ 3,709 $ 3,831 Deferred rent, non-current 5,272 5,153 Liabilities associated with business combination — 3,779 Other non-current liabilities 753 677 Total other long-term liabilities $ 9,734 $ 13,440 |
Fair value measurements
Fair value measurements | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair value measurements | 7. 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, 2018 and December 31, 2017 (in thousands): March 31, 2018 Level 1 Level 2 Level 3 Total Financial assets: Money market funds $ 6,860 $ — $ — $ 6,860 Certificates of deposit — 300 — 300 U.S. treasury notes 4,985 — — 4,985 U.S. government agency securities — 31,241 — 31,241 Convertible note — — 225 225 Total financial assets $ 11,845 $ 31,541 $ 225 $ 43,611 Financial liabilities: Contingent consideration $ — $ — $ 4,267 $ 4,267 Total financial liabilities $ — $ — $ 4,267 $ 4,267 December 31, 2017 Level 1 Level 2 Level 3 Total Financial assets: Money market funds $ 5,998 $ — $ — $ 5,998 Certificates of deposit — 300 — 300 U.S. treasury notes 11,991 — — 11,991 U.S. government agency securities — 46,299 — 46,299 Total financial assets $ 17,989 $ 46,599 $ — $ 64,588 Financial liabilities: Contingent consideration $ — $ — $ 3,779 $ 3,779 Total financial liabilities $ — $ — $ 3,779 $ 3,779 There were no transfers between Level 1, Level 2 and Level 3 during the periods presented. The following tables present 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, 2017 $ 3,779 Change in estimate of fair value 488 Balance as of March 31, 2018 $ 4,267 Level 3 Convertible Note Balance as of December 31, 2017 $ — Convertible note 225 Balance as of March 31, 2018 $ 225 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. The Company’s convertible note receivable is classified as Level 3 as it is valued based upon market interest rates for similar debt instruments, estimates of the debtor’s ability to repay the note and estimates of the likelihood of future events occurring which would trigger repayment of the note, all of which were significant inputs in the Level 3 measurement not supported by market activity. As of March 31, 2018, 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 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 at the acquisition date of January 6, 2017, 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 to revenue forecasts can significantly affect the estimated fair value of the contingent consideration. Changes in estimated fair value will be recorded as general and administrative expense until the contingency is paid or expires. The change in the fair value of the contingent consideration between the acquisition date and March 31, 2018 was an increase of $2.1 million. 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, 2018 and December 31, 2017, are as follows (in thousands): March 31, 2018 December 31, 2017 Carrying Amount Fair Value Carrying Amount Fair Value Debt $ 58,554 $ 59,006 $ 39,084 $ 40,526 |
Investment in Privately Held Co
Investment in Privately Held Company | 3 Months Ended |
Mar. 31, 2018 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Investment in Privately Held Company | 8. Investment in privately-held company On March 15, 2018, the Company entered into a collaboration agreement with KEW, Inc. (“KEW”), a privately-held comprehensive genomic profiling company . . The Company’s maximum exposure to fund losses of the VIE at March 31, 2018 is the amortized cost of the convertible note of $225,000. In addition, and from the inception of the collaboration agreement, the Company must continue to purchase incremental $225,000 convertible notes each month for a minimum term of six months, make monthly payments of $225,000 for the right of first refusal for a minimum term of six months, and make payments for the use of the proprietary technologies under the licensing agreement for a minimum term of one year. |
Commitments and contingencies
Commitments and contingencies | 3 Months Ended |
Mar. 31, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and contingencies | 9. 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 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 condensed 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 received 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 made to the facility. The assets purchased with the lease incentive are included in property and equipment, net, in the Company’s condensed 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. Aggregate future minimum lease payments for the San Francisco facility at March 31, 2018 were approximately $62.6 million. In addition to the security deposit of approximately $4.6 million for the headquarters and production facility, the Company has provided, as collateral for other leases, security deposits of $0.4 million at March 31, 2018 and December 31, 2017, which are included in other assets in the Company’s condensed consolidated balance sheets. Security deposits relating to Good Start facilities were $0.4 million at both March 31, 2018 and December 31, 2017 and are included in restricted cash in the Company’s condensed consolidated balance sheet as of that date. Future minimum payments under non-cancelable operating leases as of March 31, 2018 are as follows (in thousands): Amounts 2018 (remainder of year) $ 7,237 2019 9,633 2020 9,512 2021 9,727 2022 9,676 Thereafter 29,847 Total minimum lease payments $ 75,632 Rent expense was $2.4 million and $2.2 million for the three months ended March 31, 2018 and 2017, 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. 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. Subject to certain conditions, the Company was eligible to borrow a second term loan pursuant to the Loan and Security Agreement of $20.0 million in the first quarter of 2018 and did so on March 12, 2018, receiving net proceeds of approximately $19.8 million. In February 2018, the Company entered into an agreement (the “Amended 2017 Loan Agreement”) to modify the Loan and Security Agreement pursuant to which the Company is eligible to borrow a third term loan of $20.0 million in the second quarter of 2018. If the third term loan becomes available and is not fully drawn, a line fee of 1% will be applied to the difference between $20.0 million and the amount drawn. The Amended 2017 Loan Agreement adds a quarterly covenant to achieve certain accession volumes. Substantially all other terms off the Amended 2017 Loan Agreement are consistent with the terms of the Loan and Security Agreement. Term loans under the Amended 2017 Loan 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 The Company’s obligations under the Amended 2017 Loan Agreement are subject to quarterly covenants to achieve certain revenue and accession volume 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 Amended 2017 Loan Agreement are secured by a security interest on substantially all the Company’s assets, excluding its intellectual property. At March 31, 2018, obligations under the Amended 2017 Loan Agreement were $60.0 million. Debt issuance costs related to the Amended 2017 Loan Agreement totaling $0.6 million and the fair value of warrants totaling $1.1 million were recorded as direct deductions from the debt liability and are being amortized to interest expense over the term of the Amended 2017 Loan Agreement. Future payments under the Amended 2017 Loan Agreement as of March 31, 2018 are as follows (in thousands): Amounts 2018 (remainder of year) $ 4,146 2019 19,050 2020 24,094 2021 22,123 2022 8,225 Thereafter — Total remaining debt payments 77,638 Less: amount representing debt discount (1,446 ) Less: amount representing interest (17,638 ) Present value of remaining debt payments 58,554 Less: current portion — Total non-current debt obligation $ 58,554 Interest expense related to the Amended 2017 Loan Agreement, the Loan and Security Agreement and the Loan Agreement totaled $1.2 million and $0.3 million for the three months ended March 31, 2018 and 2017, 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 6.4%. 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 condensed consolidated balance sheets. Future payments under capital leases at March 31, 2018 are as follows (in thousands): Amounts 2018 (remainder of year) $ 1,652 2019 2,087 2020 1,394 2021 21 Total capital lease obligations 5,154 Less: amount representing interest (380 ) Present value of net minimum capital lease payments 4,774 Less: current portion (1,879 ) Total non-current capital lease obligations $ 2,895 Interest expense related to capital leases was $77,000 and $16,000 for the three months ended March 31, 2018 and 2017, respectively. Property and equipment under capital leases was $8.6 million and $11.4 million as of March 31, 2018 and December 31, 2017, respectively. Accumulated depreciation on these assets was $1.8 million and $3.0 million at March 31, 2018 and December 31, 2017, respectively. Guarantees and indemnifications As permitted under Delaware law and in accordance with the Company’s bylaws, the Company indemnifies its directors and officers 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, 2018 or December 31, 2017. Contingencies The Company was not a party to any material legal proceedings at March 31, 2018, 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, 2018 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock incentive plans | 10. 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. 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 and $0.4 million for the three months ended March 31, 2018 and 2017, 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 (000's) Balances at December 31, 2017 1,119,792 4,114,874 $ 8.51 7.63 $ 5,128 Additional shares reserved 2,143,836 — Options granted — — $ — Options cancelled 28,581 (28,581 ) $ 9.26 Options exercised (10,811 ) $ 1.99 RSUs granted (177,319 ) RSUs cancelled 74,205 Balances at March 31, 2018 3,189,095 4,075,482 $ 8.52 7.41 $ 1,268,717 Options exercisable at March 31, 2018 2,497,055 $ 7.95 7.02 $ 1,268,213 Options vested and expected to vest at March 31, 2018 3,834,023 $ 8.47 7.36 $ 1,268,546 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 Company did not grant options to purchase common stock in the three months ended March 31, 2018. The weighted-average fair value of options to purchase common stock granted was $5.85 in the three months ended March 31, 2017. The weighted-average fair value of RSUs granted was $7.81 and $10.22 in the three months ended March 31, 2018 and 2017, respectively. The total grant-date fair value of options to purchase common stock vested was $1.8 million and $1.1 million in the three months ended March 31, 2018 and 2017, respectively. The intrinsic value of options to purchase common stock exercised was $51,000 and $0.9 million in the three months ended March 31, 2018 and 2017, respectively. The following table summarizes RSU activity for the three months ended March 31, 2018: Number of Shares Weighted- Average Grant Date Fair Value Balance at December 31, 2017 2,387,120 $ 9.91 RSUs granted 177,319 $ 7.81 RSUs vested (66,389 ) $ 10.15 RSUs cancelled (74,205 ) $ 10.85 Balance at March 31, 2018 2,423,845 $ 9.72 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, 2018, cash received from payroll deductions pursuant to the ESPP was $1.3 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, 2018, a total of 843,497 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 life sciences companies, including molecular diagnostic companies, over a period equal to the expected term of the stock option grants. When selecting comparable companies 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 model based on the following assumptions: Three Months Ended March 31, 2018 2017 Expected term (in years) — 6.03 Expected volatility — 72.94% Risk-free interest rate — 2.05% Dividend yield — — No stock options were granted in the three months ended March 31, 2018. 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, 2018 2017 Expected term (in years) — 6.00 – 9.00 Expected volatility — 72.29 – 77.36% Risk-free interest rate — 2.02 – 2.31% Dividend yield — — No stock options granted to non-employees vested in the three months ended March 31, 2018. The following table summarizes stock-based compensation expense for the three months ended March 31, 2018 and 2017, included in the condensed consolidated statements of operations (in thousands): Three Months Ended March 31, 2018 2017 Cost of revenue $ 491 $ 317 Research and development 1,483 1,295 Selling and marketing 1,048 716 General and administrative 1,371 950 Total stock-based compensation expense $ 4,393 $ 3,278 At March 31, 2018, unrecognized compensation expense related to unvested stock options, net of estimated forfeitures, was $7.0 million, which the Company expects to recognize on a straight-line basis over a weighted-average period of 2.0 years. Unrecognized compensation expense related to RSUs at March 31, 2018, net of estimated forfeitures, was $13.7 million, which the Company expects to recognize on a straight-line basis over a weighted-average period of 1.9 years. At March 31, 2018, there was no capitalized stock-based employee compensation. |
Net loss per common share
Net loss per common share | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Net loss per common share | 11. 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, 2018 and 2017 (in thousands, except share and per share amounts): Three Months Ended March 31, 2018 2017 Net loss $ (36,120 ) $ (26,928 ) Shares used in computing net loss per share, basic and diluted 54,381,751 42,318,136 Net loss per share, basic and diluted $ (0.66 ) $ (0.64 ) The following common stock equivalents have been excluded from diluted net loss per share for the three months ended March 31, 2018 and 2017 because their inclusion would be anti-dilutive: March 31, 2018 2017 Shares of common stock subject to outstanding options 4,075,482 4,668,093 Shares of common stock subject to outstanding warrants 2,019,099 116,845 Shares of common stock subject to outstanding RSUs 2,423,845 2,519,794 Shares of common stock pursuant to ESPP 327,161 174,204 Shares of common stock underlying Series A convertible preferred stock 3,458,823 — Total shares of common stock equivalents 12,304,410 7,478,936 |
Geographic information
Geographic information | 3 Months Ended |
Mar. 31, 2018 | |
Segments Geographical Areas [Abstract] | |
Geographic information | 12. 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, 2018 and 2017 (in thousands): Three Months Ended March 31, 2018 2017 United States $ 25,907 $ 9,208 Canada 1,008 597 Rest of world 756 533 Total revenue $ 27,671 $ 10,338 All long-lived assets, at March 31, 2018 and December 31, 2017, were located in the United States. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | 13. Subsequent events Public offering On April 2 and April 4, 2018, the Company sold, in an underwritten public offering, an aggregate of 12,777,777 shares of its common stock at a price of $4.50 per share, for gross proceeds of approximately $57.5 million and estimated net proceeds of $53.5 million. Stock issuance On April 2, 2018, the Company issued 716,332 shares of common stock pursuant to the terms of the Stock Purchase Agreement dated January 6, 2017, in partial payment for the acquisition of AltaVoice (see Note 4, “Business combinations”). |
Summary of significant accoun20
Summary of significant accounting policies (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
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 (See Note 3, “Revenue, accounts receivable and deferred revenue” for further information); the acquisition-date fair value of intangible assets; the fair value of contingent consideration associated with acquisitions; the recoverability of long-lived assets; impairment of goodwill and intangible 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, cash equivalents, marketable securities and accounts receivable. The Company’s cash and cash equivalents are held by financial institutions in the United States. Such deposits may exceed federally insured limits. One customer represented 15% and 13% of accounts receivable in the condensed consolidated financial statements as of March 31, 2018 and December 31, 2017, respectively. One customer represented 16% of total revenue for the three months ended March 31, 2018 and no customer represented 10% or more of total revenue for the three months ended March 31, 2017. |
Accounts receivable | Accounts receivable The Company receives payment for its tests from partners, patients, institutional customers and third-party payers. See Note 3, “Revenue, accounts receivable and deferred revenue” for further information. |
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. |
Goodwill | Goodwill In accordance with ASC 350, Intangibles-Goodwill and Other . The Company did not incur any goodwill impairment losses in any of the periods presented. |
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, accrued liabilities, 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. See Note 7, “Fair value measurements” for disclosure of the fair value of debt and further information on the fair value of the Company’s financial instruments. |
Variable interest entity | Variable interest entity The Company has a variable interest in a variable interest entity (“VIE”) through an investment in a convertible note issued by the VIE. The convertible note does not provide the Company with current voting rights in the VIE or with power to direct the activities of the VIE which most significantly affect its economic performance. The Company is not the VIE’s primary beneficiary and does not consolidate the VIE. The Company will continue to assess its investment and future commitments to the investee. To the extent its relationship with the investee changes, the Company may be required to consolidate the investee in future periods. See Note 6, “Balance sheet components”, Note 7, “Fair value measurements” and Note 8, “Investment in privately held company” for additional disclosures related to the convertible note, which is recorded as an available-for-sale security. |
Revenue recognition | Revenue recognition The Company recognizes revenue when control of the promised goods or services is transferred to the customer in an amount that reflects the consideration it expects to be entitled to in exchange for those goods or services. All revenues are generated from contracts with customers. Test revenue is generated primarily 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 and family variant tests was de minimis for all periods presented. Other revenue consists primarily of revenue from genome network subscription services which is recognized on a straight-line basis over the subscription term, and revenue from collaboration agreements. |
Cost of test revenue | Cost of test revenue Cost of test 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. |
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 preferred stock, 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 Recently issued accounting pronouncements not yet adopted In February 2018, the FASB issued ASU 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220) In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) Recently adopted accounting pronouncements – Revenue recognition In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) In connection with the adoption of Topic 606, the Company amended its revenue recognition policy to provide for the recognition of certain variable consideration related to diagnostic tests that was previously deferred pending cash collection. Under Topic 606, the Company records variable consideration based on an estimate of the consideration to which it will be entitled. Revenue recognition Adoption of Topic 606, "Revenue from Contracts with Customers" On January 1, 2018, the Company adopted Topic 606 using the modified retrospective transition method. The provisions of Topic 606 were applied to all customer contracts that were not completed as of the date of adoption. Prior period amounts are not adjusted and continue to be reported under the accounting standards in effect for those periods. The Company recognizes revenue when control of the promised goods or services is transferred to the customer in an amount that reflects the consideration it expects to be entitled to in exchange for those goods or services. All revenues are generated from contracts with customers. Diagnostic tests The majority of the Company’s revenue is generated from genetic testing services that provide analysis and associated interpretation of the sequencing of parts of the genome. Test orders are placed under written requisitions signed by the patient and/or medical provider, and the Company often enters into contracts with institutions (e.g., hospitals and clinics) and insurance companies that include pricing provisions under which such tests are billed. Billing terms are generally net thirty days. While the transaction price of diagnostic tests is originally established either via contract or pursuant to the Company’s standard list price, the Company often provides concessions for tests billed to insurance carriers, and therefore the transaction price for patient insurance-billed tests is considered to be variable and revenue is recognized based on an estimate of the consideration to which the Company will be entitled at an amount for which it is probable that a reversal of cumulative consideration will not occur. Making these estimates requires significant judgments based upon such factors as length of payer relationship, historical payment patterns, changes in contract provisions and insurance reimbursement policies. These judgments are reviewed quarterly and revenue recognized is updated, as necessary, until the Company’s obligations are fully settled. In connection with some diagnostic test orders, the Company offers limited re-requisition rights (“Re-Requisition Rights”) that are considered distinct at contract inception, and therefore certain diagnostic test orders contain two performance obligations, the performance of the original test and the Re-Requisition Rights. When Re-Requisition Rights are granted, the Company allocates the transaction price to each performance obligation based on the relative estimated standalone selling prices. In order to comply with loss contract rules, the allocations are adjusted, if necessary, to ensure the amount deferred for Re-Requisition Rights is no less than the estimated cost of fulfilling the Company’s related obligations. The Company looks to transfer of control in assessing timing of recognition of revenue in connection with each performance obligation. In general, revenue in connection with diagnostic tests is recognized upon delivery of the underlying clinical report or when the report is made available on the Company’s web portal. Outstanding performance obligations pertaining to orders received but for which the underlying report has not been issued are generally satisfied within a thirty-day period. Revenue in connection with Re-Requisition Rights is recognized as the rights are exercised or expire unexercised, which is generally within ninety days of initial deferral. Other contracts The Company also enters into collaboration and genome network contracts. Collaboration agreements provide customers with diagnostic testing and related data aggregation reporting services that are provided over the contract term. Collaboration revenue is recognized as the testing and reporting services are delivered to the customer. Genome network offerings consist of subscription services related to a proprietary software platform designed to connect patients, clinicians, advocacy organizations, researchers and therapeutic developers to accelerate the understanding, diagnosis and treatment of hereditary disease. Such services are recognized on a straight-line basis over the subscription periods. Amounts due under collaboration and genome network agreements are typically billable on net thirty-day terms. Other recently adopted accounting pronouncements The Company has determined there are no other recently adopted or issued accounting standards that had, or will have, a material impact on its condensed consolidated financial statements. |
Prior period reclassifications | Prior period reclassifications Revenue amounts in prior periods have been reclassified to conform with current period presentation, which separates test revenue from other revenue. Other revenue consists principally of revenue from genome network subscription services and collaboration agreements. |
Revenue, accounts receivable 21
Revenue, accounts receivable and deferred revenue (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Revenue From Contract With Customer [Abstract] | |
Summary of impact of adoption of topic 606 on condensed consolidated statement of operations and balance sheet | The effect of the adoption of Topic 606 upon financial statement line items in the Company’s condensed consolidated statement of operations for the three months ended March 31, 2018, and the Company’s condensed consolidated balance sheet as of March 31, 2018 was as follows (in thousands, except per share amounts): Three Months Ended March 31, 2018 Without Effect of Adoption of Adoption As Reported Topic 606 Higher/(Lower) Test revenue $ 27,053 $ 26,980 $ 73 Net loss $ (36,120 ) $ (36,193 ) $ 73 Net loss per share, basic and diluted $ (0.66 ) $ (0.67 ) $ 0.01 As of March 31, 2018 Without Effect of Adoption of Adoption As Reported Topic 606 Higher/(Lower) Accounts receivable, net $ 21,490 $ 10,486 $ 11,004 Accumulated deficit $ (423,477 ) $ (434,790 ) $ 11,313 Stockholders' equity $ 101,960 $ 90,647 $ 11,313 |
Schedule of disaggregated revenue by payer category | The following table includes the Company’s revenues as disaggregated by payer category (in thousands, unaudited): Three Months Ended March 31, 2018 2017 (1) Diagnostic tests: Institutions $ 7,231 $ 2,600 Patient - direct 2,850 757 Patient - insurance 16,972 6,338 Total diagnostic tests 27,053 9,695 Collaboration and genome network 618 643 Total revenues $ 27,671 $ 10,338 |
Business combinations (Tables)
Business combinations (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Summary of pro forma financial information | The following table summarizes the pro forma financial information for the three months ended March 31, 2017 (in thousands): Three Months Ended March 31, Actual Pro Forma 2018 2017 Total revenue $ 27,671 $ 18,903 Net loss $ (36,120 ) $ (29,120 ) |
AltaVoice | |
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. Customer relationships are being amortized on an accelerated basis, utilizing free cash flows, over a period of ten years. All other acquisition-related intangibles 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 Assets Estimated Useful Life (in Years) Non-compete agreement $ 286 5 Developed technology 570 6 Customer relationships 3,389 10 $ 4,245 |
Ommdom, Inc. | |
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 $ 53 Accounts receivable 10 Prepaid expense and other assets 4 Trade name 13 Developed technology 2,335 Customer relationships 147 Total identifiable assets acquired 2,562 Accounts payable (16 ) Accrued expenses (17 ) Deferred tax liability (434 ) Total liabilities assumed (467 ) Net identifiable assets acquired 2,095 Goodwill 4,045 Net assets acquired $ 6,140 |
Schedule of economic benefits of intangible assets are expected to be realized | Finite-lived intangibles included in the above table 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 Assets Estimated Useful Life (in Years) Trade name $ 13 5 Developed technology 2,335 5 Customer relationships 147 5 $ 2,495 |
Good Start Genetics | |
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 and restricted cash $ 1,381 Accounts receivable 2,507 Prepaid expense and other assets 1,579 Property and equipment 1,320 Trade name 460 Developed technology 5,896 Customer relationships 7,830 Total identifiable assets acquired 20,973 Accounts payable (5,418 ) Accrued expenses (6,802 ) Notes payable (17,904 ) Convertible promissory notes payable (15,430 ) Other liabilities (222 ) Total liabilities assumed (45,776 ) Net identifiable assets acquired (24,803 ) Goodwill 24,803 Net assets acquired $ — |
Schedule of economic benefits of intangible assets are expected to be realized | Customer relationships are being amortized on an accelerated basis, utilizing free cash flows, over a period of eight years. All other finite-lived intangibles included in the above table 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 Assets Estimated Useful Life (in Years) Trade name $ 460 3 Developed technology 5,896 5 Customer relationships 7,830 8 $ 14,186 |
CombiMatrix | |
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 and restricted cash $ 1,333 Accounts receivable 4,118 Prepaid expense and other assets 1,299 Property and equipment 437 Other assets - non current 30 Favorable leases 247 Trade name 103 Patent licensing agreement 496 Developed technology 3,162 Customer relationships 12,397 Total identifiable assets acquired 23,622 Accounts payable (276 ) Accrued expenses (3,925 ) Other liabilities (180 ) Total liabilities assumed (4,381 ) Net identifiable assets acquired 19,241 Goodwill 8,692 Net assets acquired $ 27,933 |
Schedule of economic benefits of intangible assets are expected to be realized | Customer relationships are being amortized on an accelerated basis, utilizing free cash flows, over a period of 11 years. All other finite-lived intangibles included in the above table 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 Assets Estimated Useful Life (in Years) Favorable leases $ 247 2 Trade name 103 1 Patent licensing agreement 496 15 Developed technology 3,162 4 Customer relationships 12,397 11 $ 16,405 |
Goodwill and intangible assets
Goodwill and intangible assets (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Summary of goodwill | Details of the Company’s goodwill for the three months ended March 31, 2018 are as follows (in thousands): AltaVoice Ommdom Good Start CombiMatrix Total Balance as of December 31, 2017 $ 9,432 $ 4,045 $ 24,406 $ 8,692 $ 46,575 Goodwill adjustment — — 397 — 397 Balance as of March 31, 2018 $ 9,432 $ 4,045 $ 24,803 $ 8,692 $ 46,972 |
Schedule of finite-lived intangible assets | The following table presents details of the Company’s finite-lived intangible assets as of March 31, 2018 (in thousands): Cost Accumulated Amortization Net Weighted Average Useful Life (in Years) Weighted Average Estimated Remaining Useful Life (in Years) Customer relationships $ 23,763 $ (1,221 ) $ 22,542 10.0 9.4 Developed technology 11,963 (1,581 ) 10,382 4.8 4.2 Non-compete agreement 286 (72 ) 214 5.0 3.8 Trade name 576 (143 ) 433 2.7 2.1 Patent licensing agreement 496 (12 ) 484 15.0 14.7 Favorable leases 247 (38 ) 209 2.0 1.8 $ 37,331 $ (3,067 ) $ 34,264 8.2 7.6 |
Summary of estimated future amortization expense of intangible assets with finite lives | The following table summarizes the Company’s estimated future amortization expense of intangible assets with finite lives as of March 31, 2018 (in thousands): Amount 2018 $ 3,800 2019 5,250 2020 5,525 2021 5,829 2022 4,123 Thereafter 9,737 $ 34,264 |
Balance sheet components (Table
Balance sheet components (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
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, 2018 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Money market funds $ 6,860 $ — $ — $ 6,860 Certificates of deposit 300 — — 300 U.S. treasury notes 4,999 — (14 ) 4,985 U.S. government agency securities 31,387 — (146 ) 31,241 Convertible note 225 — — 225 $ 43,771 $ — $ (160 ) $ 43,611 Reported as: Cash equivalents $ 1,454 Restricted cash 5,406 Marketable securities 36,751 Total cash equivalents, restricted cash and marketable securities $ 43,611 December 31, 2017 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Money market funds $ 5,998 $ — $ — $ 5,998 Certificates of deposit 300 — — 300 U.S. treasury notes 12,010 — (19 ) 11,991 U.S. government agency securities 46,451 — (152 ) 46,299 $ 64,759 $ — $ (171 ) $ 64,588 Reported as: Cash equivalents $ 592 Restricted cash 5,406 Marketable securities 58,590 Total cash equivalents, restricted cash and marketable securities $ 64,588 |
Schedule of Property and equipment | Property and equipment consisted of the following (in thousands): March 31, 2018 December 31, 2017 Leasehold improvements $ 12,778 $ 12,623 Laboratory equipment 20,934 17,705 Equipment under capital lease 8,595 11,446 Computer equipment 4,023 4,023 Software 2,553 2,520 Furniture and fixtures 569 569 Automobiles 20 20 Construction-in-progress 2,470 965 Total property and equipment, gross 51,942 49,871 Accumulated depreciation and amortization (21,635 ) (19,530 ) Total property and equipment, net $ 30,307 $ 30,341 |
Summary of other assets | Other assets consisted of the following (in thousands): March 31, 2018 December 31, 2017 Asset associated with investment in privately held company $ 1,125 $ — Capitalized financing costs 463 170 Security deposits 411 406 Total other assets $ 1,999 $ 576 |
Schedule of Accrued liabilities | Accrued liabilities consisted of the following (in thousands): March 31, 2018 December 31, 2017 Liabilities associated with business combinations $ 12,116 $ 9,497 Accrued compensation and related expenses 6,827 7,406 Accrued professional services 1,389 1,077 Liability associated with investment in privately held company 1,125 — Accrued laboratory materials purchases 735 1,242 Deferred revenue 550 307 Lease incentive obligation, current 491 489 Accrued outsourced services 253 142 Other 2,771 2,582 Total accrued liabilities $ 26,257 $ 22,742 |
Schedule of Other long-term liabilities | Other long-term liabilities consisted of the following (in thousands): March 31, 2018 December 31, 2017 Lease incentive obligation, non-current $ 3,709 $ 3,831 Deferred rent, non-current 5,272 5,153 Liabilities associated with business combination — 3,779 Other non-current liabilities 753 677 Total other long-term liabilities $ 9,734 $ 13,440 |
Fair value measurements (Tables
Fair value measurements (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
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, 2018 and December 31, 2017 (in thousands): March 31, 2018 Level 1 Level 2 Level 3 Total Financial assets: Money market funds $ 6,860 $ — $ — $ 6,860 Certificates of deposit — 300 — 300 U.S. treasury notes 4,985 — — 4,985 U.S. government agency securities — 31,241 — 31,241 Convertible note — — 225 225 Total financial assets $ 11,845 $ 31,541 $ 225 $ 43,611 Financial liabilities: Contingent consideration $ — $ — $ 4,267 $ 4,267 Total financial liabilities $ — $ — $ 4,267 $ 4,267 December 31, 2017 Level 1 Level 2 Level 3 Total Financial assets: Money market funds $ 5,998 $ — $ — $ 5,998 Certificates of deposit — 300 — 300 U.S. treasury notes 11,991 — — 11,991 U.S. government agency securities — 46,299 — 46,299 Total financial assets $ 17,989 $ 46,599 $ — $ 64,588 Financial liabilities: Contingent consideration $ — $ — $ 3,779 $ 3,779 Total financial liabilities $ — $ — $ 3,779 $ 3,779 |
Financial instruments measured at fair value on a recurring basis | The following tables present 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, 2017 $ 3,779 Change in estimate of fair value 488 Balance as of March 31, 2018 $ 4,267 Level 3 Convertible Note Balance as of December 31, 2017 $ — Convertible note 225 Balance as of March 31, 2018 $ 225 |
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, 2018 and December 31, 2017, are as follows (in thousands): March 31, 2018 December 31, 2017 Carrying Amount Fair Value Carrying Amount Fair Value Debt $ 58,554 $ 59,006 $ 39,084 $ 40,526 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
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, 2018 are as follows (in thousands): Amounts 2018 (remainder of year) $ 7,237 2019 9,633 2020 9,512 2021 9,727 2022 9,676 Thereafter 29,847 Total minimum lease payments $ 75,632 |
Schedule of future payments under amended 2017 loan agreement | Future payments under the Amended 2017 Loan Agreement as of March 31, 2018 are as follows (in thousands): Amounts 2018 (remainder of year) $ 4,146 2019 19,050 2020 24,094 2021 22,123 2022 8,225 Thereafter — Total remaining debt payments 77,638 Less: amount representing debt discount (1,446 ) Less: amount representing interest (17,638 ) Present value of remaining debt payments 58,554 Less: current portion — Total non-current debt obligation $ 58,554 |
Schedule of future minimum lease payments under capital leases | Future payments under capital leases at March 31, 2018 are as follows (in thousands): Amounts 2018 (remainder of year) $ 1,652 2019 2,087 2020 1,394 2021 21 Total capital lease obligations 5,154 Less: amount representing interest (380 ) Present value of net minimum capital lease payments 4,774 Less: current portion (1,879 ) Total non-current capital lease obligations $ 2,895 |
Stock incentive plans (Tables)
Stock incentive plans (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
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 (000's) Balances at December 31, 2017 1,119,792 4,114,874 $ 8.51 7.63 $ 5,128 Additional shares reserved 2,143,836 — Options granted — — $ — Options cancelled 28,581 (28,581 ) $ 9.26 Options exercised (10,811 ) $ 1.99 RSUs granted (177,319 ) RSUs cancelled 74,205 Balances at March 31, 2018 3,189,095 4,075,482 $ 8.52 7.41 $ 1,268,717 Options exercisable at March 31, 2018 2,497,055 $ 7.95 7.02 $ 1,268,213 Options vested and expected to vest at March 31, 2018 3,834,023 $ 8.47 7.36 $ 1,268,546 |
Summary of RSU activity | The following table summarizes RSU activity for the three months ended March 31, 2018: Number of Shares Weighted- Average Grant Date Fair Value Balance at December 31, 2017 2,387,120 $ 9.91 RSUs granted 177,319 $ 7.81 RSUs vested (66,389 ) $ 10.15 RSUs cancelled (74,205 ) $ 10.85 Balance at March 31, 2018 2,423,845 $ 9.72 |
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, 2018 and 2017, included in the condensed consolidated statements of operations (in thousands): Three Months Ended March 31, 2018 2017 Cost of revenue $ 491 $ 317 Research and development 1,483 1,295 Selling and marketing 1,048 716 General and administrative 1,371 950 Total stock-based compensation expense $ 4,393 $ 3,278 |
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 model based on the following assumptions: Three Months Ended March 31, 2018 2017 Expected term (in years) — 6.03 Expected volatility — 72.94% Risk-free interest rate — 2.05% 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, 2018 2017 Expected term (in years) — 6.00 – 9.00 Expected volatility — 72.29 – 77.36% Risk-free interest rate — 2.02 – 2.31% Dividend yield — — |
Net loss per common share (Tabl
Net loss per common share (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
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, 2018 and 2017 (in thousands, except share and per share amounts): Three Months Ended March 31, 2018 2017 Net loss $ (36,120 ) $ (26,928 ) Shares used in computing net loss per share, basic and diluted 54,381,751 42,318,136 Net loss per share, basic and diluted $ (0.66 ) $ (0.64 ) |
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, 2018 and 2017 because their inclusion would be anti-dilutive: March 31, 2018 2017 Shares of common stock subject to outstanding options 4,075,482 4,668,093 Shares of common stock subject to outstanding warrants 2,019,099 116,845 Shares of common stock subject to outstanding RSUs 2,423,845 2,519,794 Shares of common stock pursuant to ESPP 327,161 174,204 Shares of common stock underlying Series A convertible preferred stock 3,458,823 — Total shares of common stock equivalents 12,304,410 7,478,936 |
Geographic information (Tables)
Geographic information (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
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, 2018 and 2017 (in thousands): Three Months Ended March 31, 2018 2017 United States $ 25,907 $ 9,208 Canada 1,008 597 Rest of world 756 533 Total revenue $ 27,671 $ 10,338 |
Organization and description 30
Organization and description of business - Additional Information (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018USD ($)genesegment | Mar. 31, 2017USD ($) | Dec. 31, 2017USD ($) | |
Number of operating segments | segment | 1 | ||
Net loss | $ 36,120 | $ 26,928 | $ 123,400 |
Accumulated deficit | $ 423,477 | $ 398,598 | |
Minimum | |||
Number of genes | gene | 20,000 |
Summary of significant accoun31
Summary of significant accounting policies - Additional Information (Details) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018USD ($)Customer | Mar. 31, 2017Customer | Dec. 31, 2017Customer | |
Summary Of Significant Accounting Policies [Line Items] | |||
Goodwill impairment losses | $ | $ 0 | ||
Billing term of diagnostic tests | 30 days | ||
Period of revenue recognition in connection with re-requisition rights of initial deferral | 90 days | ||
Collaboration and genome network contracts | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Billing term of diagnostic tests | 30 days | ||
Customer Concentration Risk | Accounts Receivable | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Number of customer | 1 | 1 | |
Concentration risk | 15.00% | 13.00% | |
Customer Concentration Risk | Total Revenue | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Number of customer | 1 | 0 | |
Concentration risk | 16.00% | 10.00% |
Revenue, accounts receivable 32
Revenue, accounts receivable and deferred revenue - Additional Information (Details) | Jan. 01, 2018USD ($) | Mar. 31, 2018USD ($)Group | Jan. 01, 2017USD ($) |
Disaggregation Of Revenue [Line Items] | |||
Number of groups generating diagnostic test revenues | Group | 3 | ||
Number of payer groups | Group | 3 | ||
Deferred revenue | $ 139,000 | ||
Adjustments in performance obligations satisfied in prior periods | $ 0 | ||
Revenue re-requisition rights period | 90 days | ||
ASC 606 | |||
Disaggregation Of Revenue [Line Items] | |||
Cumulative effective adjustment to accounts receivable and accumulated deficit | $ 11,200,000 | ||
Maximum | |||
Disaggregation Of Revenue [Line Items] | |||
Performance obligations underlying contracts period | 1 year | ||
Sales commissions amortization period | 1 year | ||
Period of payments to be received for goods or service | 1 year |
Revenue, accounts receivable 33
Revenue, accounts receivable and deferred revenue - Summary of impact of adoption of topic 606 on condensed consolidated statement of operations and balance sheet (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||
Test revenue | $ 27,053 | $ 9,695 | |
Net loss | $ (36,120) | $ (26,928) | $ (123,400) |
Net loss per share, basic and diluted | $ (0.66) | $ (0.64) | |
Accounts receivable | $ 21,490 | 10,422 | |
Accumulated deficit | (423,477) | (398,598) | |
Stockholders' equity | 101,960 | $ 121,794 | |
Topic 606 | Without Adoption of Topic 606 | |||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||
Test revenue | 26,980 | ||
Net loss | $ (36,193) | ||
Net loss per share, basic and diluted | $ (0.67) | ||
Accounts receivable | $ 10,486 | ||
Accumulated deficit | (434,790) | ||
Stockholders' equity | 90,647 | ||
Topic 606 | Effect of Adoption Higher/(Lower) | |||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||
Test revenue | 73 | ||
Net loss | $ 73 | ||
Net loss per share, basic and diluted | $ 0.01 | ||
Accounts receivable | $ 11,004 | ||
Accumulated deficit | 11,313 | ||
Stockholders' equity | $ 11,313 |
Revenue, accounts receivable 34
Revenue, accounts receivable and deferred revenue - Schedule of disaggregated revenue by payer category (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Disaggregation Of Revenue [Line Items] | ||
Test revenue | $ 27,053 | $ 9,695 |
Collaboration and genome network, revenue | 618 | 643 |
Total revenues | 27,671 | 10,338 |
Institutions | ||
Disaggregation Of Revenue [Line Items] | ||
Test revenue | 7,231 | 2,600 |
Patient - direct | ||
Disaggregation Of Revenue [Line Items] | ||
Test revenue | 2,850 | 757 |
Patient - insurance | ||
Disaggregation Of Revenue [Line Items] | ||
Test revenue | $ 16,972 | $ 6,338 |
Business combinations - Additio
Business combinations - Additional Information (Details) - USD ($) | Mar. 31, 2018 | Aug. 04, 2017 | Jul. 31, 2017 | Jun. 11, 2017 | Jan. 06, 2017 | Nov. 14, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | Mar. 31, 2019 | Dec. 31, 2017 |
Business Acquisition [Line Items] | ||||||||||
Intangible assets estimated useful lives | 8 years 2 months 12 days | |||||||||
Goodwill | $ 46,972,000 | $ 46,972,000 | $ 46,575,000 | |||||||
Decrease in accounts receivable | $ (224,000) | $ (605,000) | ||||||||
Customer relationships | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Intangible assets estimated useful lives | 10 years | |||||||||
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 acquisition contingently payable amount | 5,000,000 | $ 5,000,000 | ||||||||
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 | |||||||||
Change in fair value of contingent consideration | 2,200,000 | |||||||||
Goodwill | 9,432,000 | 9,432,000 | $ 9,432,000 | 9,432,000 | ||||||
Additional goodwill acquired | $ 1,400,000 | |||||||||
Acquisition and transitional costs | 159,000 | |||||||||
AltaVoice | Customer relationships | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Intangible assets estimated useful lives | 10 years | |||||||||
AltaVoice | Other Income Expense | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Business combination, accretion gains (losses) | 1,600,000 | (53,000) | ||||||||
AltaVoice | Operating Expense | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Business combination, remeasurement losses | 488,000 | $ 0 | ||||||||
AltaVoice | Milestone Based on Certain Threshold of Revenue Achieved During 2017 [Member] | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Business acquisition common stock issued, value | 5,000,000 | $ 5,000,000 | ||||||||
AltaVoice | 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 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. | |||||||||
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 | New Contingent Milestone Based On Achieving Revenue Target During 2017 And 2018 | Maximum | Scenario, Forecast | ||||||||||
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 | 5,000,000 | $ 5,500,000 | ||||||||
Business acquisition common stock issued, shares | 641,126 | |||||||||
Business acquisition common stock issued, value | 5,000,000 | $ 5,000,000 | ||||||||
AltaVoice | Common Stock | Maximum | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Business acquisition contingently payable amount | 5,000,000 | $ 5,000,000 | ||||||||
Ommdom, Inc. | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Business combination, agreement date | Jun. 11, 2017 | |||||||||
Business combination, total purchase consideration | $ 6,100,000 | |||||||||
Business acquisition payment through issuance of shares company's common stock | 5,500,000 | |||||||||
Business acquisition contingently payable amount | 0 | |||||||||
Purchase consideration, second payment discounted and recorded as liability | 613,000 | |||||||||
Goodwill | 4,045,000 | 4,045,000 | $ 4,045,000 | 4,045,000 | ||||||
Additional goodwill acquired | 434,000 | |||||||||
Business combination, cash consideration | 0 | |||||||||
Business combination, hold-back consideration amount | $ 613,000 | |||||||||
Ommdom, Inc. | Customer relationships | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Intangible assets estimated useful lives | 5 years | |||||||||
Ommdom, Inc. | 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 | 600,108 | |||||||||
Business combination, hold-back consideration amount | $ 600,000 | |||||||||
Business acquisition common stock issued, shares related to hold back | 66,582 | |||||||||
Good Start Genetics | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Business combination, agreement date | Aug. 4, 2017 | |||||||||
Business combination, total purchase consideration | $ 24,400,000 | |||||||||
Goodwill | 24,803,000 | 24,803,000 | $ 24,803,000 | 24,406,000 | ||||||
Business combination, cash consideration | $ 18,400,000 | |||||||||
Percentage of diluted interest acquired | 100.00% | |||||||||
Provisional deferred tax liability | $ 4,800,000 | 0 | ||||||||
Decrease in accounts receivable | 397,000 | |||||||||
Good Start Genetics | Customer relationships | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Intangible assets estimated useful lives | 8 years | |||||||||
Good Start Genetics | Common Stock | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Business combination consideration transferred equity interests issued and issuable for settlement of convertible debt | $ 11,900,000 | |||||||||
Business acquisition equity interests issued or issuable number of shares for settlement of convertible debt | 1,148,283 | |||||||||
Business combination sale of hold back stock for payment of bonus | $ 3,600,000 | |||||||||
Business acquisition number of hold back shares Issued or Issuable for payment of bonus | 343,986 | |||||||||
Good Start Genetics | Common Stock | General and Administrative Expense | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Business acquisition payment through issuance of shares company's common stock | $ 900,000 | |||||||||
Business acquisition common stock issued, shares | 83,025 | |||||||||
Business combination, hold-back consideration amount | $ 400,000 | |||||||||
Business acquisition common stock issued, shares related to hold back | 37,406 | |||||||||
CombiMatrix | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Business acquisition common stock issued, shares | 2,703,389 | |||||||||
Goodwill | $ 8,692,000 | $ 8,700,000 | $ 8,692,000 | $ 8,692,000 | 8,692,000 | |||||
Provisional deferred tax liability | $ 0 | |||||||||
Date of acquisition | Nov. 14, 2017 | |||||||||
Trailing average share value | $ 9.491 | |||||||||
CombiMatrix | Series F Preferred Stock | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Business acquisition payment through issuance of shares company's common stock | $ 25,000 | |||||||||
Business acquisition common stock issued, shares | 3,144 | |||||||||
CombiMatrix | Series F Warrants | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Business acquisition payment through issuance of shares company's common stock | $ 7,400,000 | |||||||||
Business acquisition common stock issued, shares | 1,739,689 | |||||||||
CombiMatrix | Series D Warrants | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Business acquisition payment through issuance of shares company's common stock | $ 1,000 | |||||||||
Business acquisition common stock issued, shares | 337,584 | |||||||||
CombiMatrix | Restricted Stock Units (RSUs) | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Business acquisition payment through issuance of shares company's common stock | $ 700,000 | |||||||||
Business acquisition common stock issued, shares | 85,219 | |||||||||
CombiMatrix | Options | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Business acquisition payment through issuance of shares company's common stock | $ 26,000 | |||||||||
Business acquisition common stock issued, shares | 3,323 | |||||||||
CombiMatrix | Common Stock | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Business combination common stock conversion ratio | 86.92% | |||||||||
CombiMatrix | Warrants | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Business acquisition common stock issued, shares | 2,077,273 | |||||||||
CombiMatrix | Customer relationships | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Intangible assets estimated useful lives | 11 years | 11 years | ||||||||
CombiMatrix | General and Administrative Expense | Common Stock | Restricted Stock Units (RSUs) | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Business acquisition payment through issuance of shares company's common stock | $ 1,700,000 | |||||||||
Business acquisition common stock issued, shares | 214,976 | |||||||||
CombiMatrix | Common Stock | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Business acquisition payment through issuance of shares company's common stock | $ 20,500,000 | |||||||||
Business acquisition common stock issued, shares | 2,611,703 | |||||||||
CombiMatrix | Common Stock | General and Administrative Expense | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Business acquisition payment through issuance of shares company's common stock | $ 200,000 | |||||||||
Business acquisition common stock issued, shares | 22,966 | |||||||||
Coronado Merger Sub, Inc | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Date of merger agreement | Jul. 31, 2017 |
Business combinations - Summary
Business combinations - Summary of fair values of assets acquired and liabilities assumed (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | Nov. 14, 2017 | Aug. 04, 2017 | Jul. 31, 2017 | Jun. 11, 2017 | Jan. 06, 2017 |
Business Acquisition [Line Items] | |||||||
Goodwill | $ 46,972 | $ 46,575 | |||||
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 | 9,432 | 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 | ||||||
Ommdom, Inc. | |||||||
Business Acquisition [Line Items] | |||||||
Cash | $ 53 | ||||||
Accounts receivable | 10 | ||||||
Prepaid expense and other assets | 4 | ||||||
Total identifiable assets acquired | 2,562 | ||||||
Accounts payable | (16) | ||||||
Accrued expenses | (17) | ||||||
Deferred tax liability | (434) | ||||||
Total liabilities assumed | (467) | ||||||
Net identifiable assets acquired | 2,095 | ||||||
Goodwill | 4,045 | 4,045 | 4,045 | ||||
Net assets acquired | 6,140 | ||||||
Ommdom, Inc. | Developed technology | |||||||
Business Acquisition [Line Items] | |||||||
Intangible Assets | 2,335 | ||||||
Ommdom, Inc. | Trade name | |||||||
Business Acquisition [Line Items] | |||||||
Intangible Assets | 13 | ||||||
Ommdom, Inc. | Customer relationships | |||||||
Business Acquisition [Line Items] | |||||||
Intangible Assets | $ 147 | ||||||
Good Start Genetics | |||||||
Business Acquisition [Line Items] | |||||||
Cash and restricted cash | $ 1,381 | ||||||
Accounts receivable | 2,507 | ||||||
Prepaid expense and other assets | 1,579 | ||||||
Property and equipment | 1,320 | ||||||
Total identifiable assets acquired | 20,973 | ||||||
Accounts payable | (5,418) | ||||||
Accrued expenses | (6,802) | ||||||
Notes payable | (17,904) | ||||||
Convertible promissory notes payable | (15,430) | ||||||
Other liabilities | (222) | ||||||
Total liabilities assumed | (45,776) | ||||||
Net identifiable assets acquired | (24,803) | ||||||
Goodwill | 24,803 | 24,406 | 24,803 | ||||
Good Start Genetics | Developed technology | |||||||
Business Acquisition [Line Items] | |||||||
Intangible Assets | 5,896 | ||||||
Good Start Genetics | Trade name | |||||||
Business Acquisition [Line Items] | |||||||
Intangible Assets | 460 | ||||||
Good Start Genetics | Customer relationships | |||||||
Business Acquisition [Line Items] | |||||||
Intangible Assets | $ 7,830 | ||||||
CombiMatrix | |||||||
Business Acquisition [Line Items] | |||||||
Cash and restricted cash | $ 1,333 | ||||||
Accounts receivable | 4,118 | ||||||
Prepaid expense and other assets | 1,299 | ||||||
Property and equipment | 437 | ||||||
Other assets - non current | 30 | ||||||
Total identifiable assets acquired | 23,622 | ||||||
Accounts payable | (276) | ||||||
Accrued expenses | (3,925) | ||||||
Other liabilities | (180) | ||||||
Total liabilities assumed | (4,381) | ||||||
Net identifiable assets acquired | 19,241 | ||||||
Goodwill | $ 8,692 | $ 8,692 | 8,692 | $ 8,700 | |||
Net assets acquired | 27,933 | ||||||
CombiMatrix | Favorable leases | |||||||
Business Acquisition [Line Items] | |||||||
Intangible Assets | 247 | ||||||
CombiMatrix | Developed technology | |||||||
Business Acquisition [Line Items] | |||||||
Intangible Assets | 3,162 | ||||||
CombiMatrix | Trade name | |||||||
Business Acquisition [Line Items] | |||||||
Intangible Assets | 103 | ||||||
CombiMatrix | Customer relationships | |||||||
Business Acquisition [Line Items] | |||||||
Intangible Assets | 12,397 | ||||||
CombiMatrix | Patent licensing agreement | |||||||
Business Acquisition [Line Items] | |||||||
Intangible Assets | $ 496 |
Business combinations - Schedul
Business combinations - Schedule of economic benefits of intangible assets are expected to be realized (Details) - USD ($) $ in Thousands | Aug. 04, 2017 | Jul. 31, 2017 | Jun. 11, 2017 | Jan. 06, 2017 | Nov. 14, 2017 | Mar. 31, 2018 |
Business Acquisition [Line Items] | ||||||
Gross Purchased Intangible Assets | $ 37,331 | |||||
Intangible assets estimated useful lives | 8 years 2 months 12 days | |||||
Non-compete agreement | ||||||
Business Acquisition [Line Items] | ||||||
Gross Purchased Intangible Assets | $ 286 | |||||
Intangible assets estimated useful lives | 5 years | |||||
Developed technology | ||||||
Business Acquisition [Line Items] | ||||||
Gross Purchased Intangible Assets | $ 11,963 | |||||
Intangible assets estimated useful lives | 4 years 9 months 18 days | |||||
Customer relationships | ||||||
Business Acquisition [Line Items] | ||||||
Gross Purchased Intangible Assets | $ 23,763 | |||||
Intangible assets estimated useful lives | 10 years | |||||
Trade name | ||||||
Business Acquisition [Line Items] | ||||||
Gross Purchased Intangible Assets | $ 576 | |||||
Intangible assets estimated useful lives | 2 years 8 months 12 days | |||||
Patent licensing agreement | ||||||
Business Acquisition [Line Items] | ||||||
Gross Purchased Intangible Assets | $ 496 | |||||
Intangible assets estimated useful lives | 15 years | |||||
AltaVoice | ||||||
Business Acquisition [Line Items] | ||||||
Gross Purchased Intangible Assets | $ 4,245 | |||||
AltaVoice | Non-compete agreement | ||||||
Business Acquisition [Line Items] | ||||||
Gross Purchased Intangible Assets | $ 286 | |||||
Intangible assets estimated useful lives | 5 years | |||||
AltaVoice | Developed technology | ||||||
Business Acquisition [Line Items] | ||||||
Gross Purchased Intangible Assets | $ 570 | |||||
Intangible assets estimated useful lives | 6 years | |||||
AltaVoice | Customer relationships | ||||||
Business Acquisition [Line Items] | ||||||
Gross Purchased Intangible Assets | $ 3,389 | |||||
Intangible assets estimated useful lives | 10 years | |||||
Ommdom, Inc. | ||||||
Business Acquisition [Line Items] | ||||||
Gross Purchased Intangible Assets | $ 2,495 | |||||
Ommdom, Inc. | Developed technology | ||||||
Business Acquisition [Line Items] | ||||||
Gross Purchased Intangible Assets | $ 2,335 | |||||
Intangible assets estimated useful lives | 5 years | |||||
Ommdom, Inc. | Customer relationships | ||||||
Business Acquisition [Line Items] | ||||||
Gross Purchased Intangible Assets | $ 147 | |||||
Intangible assets estimated useful lives | 5 years | |||||
Ommdom, Inc. | Trade name | ||||||
Business Acquisition [Line Items] | ||||||
Gross Purchased Intangible Assets | $ 13 | |||||
Intangible assets estimated useful lives | 5 years | |||||
Good Start Genetics | ||||||
Business Acquisition [Line Items] | ||||||
Gross Purchased Intangible Assets | $ 14,186 | |||||
Good Start Genetics | Developed technology | ||||||
Business Acquisition [Line Items] | ||||||
Gross Purchased Intangible Assets | $ 5,896 | |||||
Intangible assets estimated useful lives | 5 years | |||||
Good Start Genetics | Customer relationships | ||||||
Business Acquisition [Line Items] | ||||||
Gross Purchased Intangible Assets | $ 7,830 | |||||
Intangible assets estimated useful lives | 8 years | |||||
Good Start Genetics | Trade name | ||||||
Business Acquisition [Line Items] | ||||||
Gross Purchased Intangible Assets | $ 460 | |||||
Intangible assets estimated useful lives | 3 years | |||||
CombiMatrix | ||||||
Business Acquisition [Line Items] | ||||||
Gross Purchased Intangible Assets | $ 16,405 | |||||
CombiMatrix | Developed technology | ||||||
Business Acquisition [Line Items] | ||||||
Gross Purchased Intangible Assets | $ 3,162 | |||||
Intangible assets estimated useful lives | 4 years | |||||
CombiMatrix | Customer relationships | ||||||
Business Acquisition [Line Items] | ||||||
Gross Purchased Intangible Assets | $ 12,397 | |||||
Intangible assets estimated useful lives | 11 years | 11 years | ||||
CombiMatrix | Trade name | ||||||
Business Acquisition [Line Items] | ||||||
Gross Purchased Intangible Assets | $ 103 | |||||
Intangible assets estimated useful lives | 1 year | |||||
CombiMatrix | Favorable leases | ||||||
Business Acquisition [Line Items] | ||||||
Gross Purchased Intangible Assets | $ 247 | |||||
Intangible assets estimated useful lives | 2 years | |||||
CombiMatrix | Patent licensing agreement | ||||||
Business Acquisition [Line Items] | ||||||
Gross Purchased Intangible Assets | $ 496 | |||||
Intangible assets estimated useful lives | 15 years |
Business combinations - Summa38
Business combinations - Summary of pro forma financial information (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Business Combinations [Abstract] | |||
Actual, Total revenue | $ 27,671 | $ 10,338 | |
Actual, Net loss | $ (36,120) | (26,928) | $ (123,400) |
Pro Forma, Total revenue | 18,903 | ||
Pro Forma, Net loss | $ (29,120) |
Goodwill and intangible asset39
Goodwill and intangible assets - Summary of goodwill (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Goodwill [Line Items] | |
Beginning Balance | $ 46,575 |
Goodwill adjustment | 397 |
Ending Balance | 46,972 |
AltaVoice | |
Goodwill [Line Items] | |
Beginning Balance | 9,432 |
Ending Balance | 9,432 |
Ommdom | |
Goodwill [Line Items] | |
Beginning Balance | 4,045 |
Ending Balance | 4,045 |
Good Start | |
Goodwill [Line Items] | |
Beginning Balance | 24,406 |
Goodwill adjustment | 397 |
Ending Balance | 24,803 |
CombiMatrix | |
Goodwill [Line Items] | |
Beginning Balance | 8,692 |
Ending Balance | $ 8,692 |
Goodwill and intangible asset40
Goodwill and intangible assets - Schedule of finite-lived intangible assets (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Finite Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Cost | $ 37,331 | |
Finite-Lived Intangible Assets, Accumulated Amortization | (3,067) | |
Finite-Lived Intangible Assets, Net | $ 34,264 | $ 35,516 |
Finite-Lived Intangible Assets, Weighted Average Useful Life (in Years) | 8 years 2 months 12 days | |
Finite-Lived Intangible Assets, Weighted Average Estimated Remaining Useful Life (in Years) | 7 years 7 months 6 days | |
Customer relationships | ||
Finite Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Cost | $ 23,763 | |
Finite-Lived Intangible Assets, Accumulated Amortization | (1,221) | |
Finite-Lived Intangible Assets, Net | $ 22,542 | |
Finite-Lived Intangible Assets, Weighted Average Useful Life (in Years) | 10 years | |
Finite-Lived Intangible Assets, Weighted Average Estimated Remaining Useful Life (in Years) | 9 years 4 months 24 days | |
Developed technology | ||
Finite Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Cost | $ 11,963 | |
Finite-Lived Intangible Assets, Accumulated Amortization | (1,581) | |
Finite-Lived Intangible Assets, Net | $ 10,382 | |
Finite-Lived Intangible Assets, Weighted Average Useful Life (in Years) | 4 years 9 months 18 days | |
Finite-Lived Intangible Assets, Weighted Average Estimated Remaining Useful Life (in Years) | 4 years 2 months 12 days | |
Non-compete agreement | ||
Finite Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Cost | $ 286 | |
Finite-Lived Intangible Assets, Accumulated Amortization | (72) | |
Finite-Lived Intangible Assets, Net | $ 214 | |
Finite-Lived Intangible Assets, Weighted Average Useful Life (in Years) | 5 years | |
Finite-Lived Intangible Assets, Weighted Average Estimated Remaining Useful Life (in Years) | 3 years 9 months 18 days | |
Trade name | ||
Finite Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Cost | $ 576 | |
Finite-Lived Intangible Assets, Accumulated Amortization | (143) | |
Finite-Lived Intangible Assets, Net | $ 433 | |
Finite-Lived Intangible Assets, Weighted Average Useful Life (in Years) | 2 years 8 months 12 days | |
Finite-Lived Intangible Assets, Weighted Average Estimated Remaining Useful Life (in Years) | 2 years 1 month 6 days | |
Patent licensing agreement | ||
Finite Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Cost | $ 496 | |
Finite-Lived Intangible Assets, Accumulated Amortization | (12) | |
Finite-Lived Intangible Assets, Net | $ 484 | |
Finite-Lived Intangible Assets, Weighted Average Useful Life (in Years) | 15 years | |
Finite-Lived Intangible Assets, Weighted Average Estimated Remaining Useful Life (in Years) | 14 years 8 months 12 days | |
Favorable leases | ||
Finite Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Cost | $ 247 | |
Finite-Lived Intangible Assets, Accumulated Amortization | (38) | |
Finite-Lived Intangible Assets, Net | $ 209 | |
Finite-Lived Intangible Assets, Weighted Average Useful Life (in Years) | 2 years | |
Finite-Lived Intangible Assets, Weighted Average Estimated Remaining Useful Life (in Years) | 1 year 9 months 18 days |
Goodwill and intangible asset41
Goodwill and intangible assets - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Goodwill And Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 1.3 | $ 0.1 |
Goodwill and intangible asset42
Goodwill and intangible assets - Summary of estimated future amortization expense of intangible assets with finite lives (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Goodwill And Intangible Assets Disclosure [Abstract] | ||
2,018 | $ 3,800 | |
2,019 | 5,250 | |
2,020 | 5,525 | |
2,021 | 5,829 | |
2,022 | 4,123 | |
Thereafter | 9,737 | |
Finite-Lived Intangible Assets, Net | $ 34,264 | $ 35,516 |
Balance sheet components - Cash
Balance sheet components - Cash equivalents and marketable securities (Details) | 3 Months Ended | |
Mar. 31, 2018USD ($)item | Dec. 31, 2017USD ($) | |
Investment Holdings | ||
Cash equivalents | $ 1,454,000 | $ 592,000 |
Restricted cash | 5,406,000 | 5,406,000 |
Marketable securities, Estimated Fair Value | 36,751,000 | 58,590,000 |
Total cash equivalents, restricted cash and marketable securities | 43,611,000 | 64,588,000 |
Amortized Cost | 43,771,000 | 64,759,000 |
Gross Unrealized Losses | (160,000) | (171,000) |
Total amount of unrealized losses on available-for-sale securities | 160,000 | |
Total fair value of investments with unrealized losses | $ 36,200,000 | |
Available for sale securities minimum remaining contractual maturity | 5 months | |
Available for sale securities maximum remaining contractual maturity | 10 months | |
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 | $ 23,000 | |
Certificate of deposits | ||
Investment Holdings | ||
Amortized Cost | 300,000 | 300,000 |
Marketable securities, Estimated Fair Value | 300,000 | 300,000 |
Money market funds | ||
Investment Holdings | ||
Estimated Fair Value | 6,860,000 | 5,998,000 |
U.S. treasury notes | ||
Investment Holdings | ||
Amortized Cost | 4,999,000 | 12,010,000 |
Gross Unrealized Losses | (14,000) | (19,000) |
Marketable securities, Estimated Fair Value | 4,985,000 | 11,991,000 |
U.S. government agency securities | ||
Investment Holdings | ||
Amortized Cost | 31,387,000 | 46,451,000 |
Gross Unrealized Losses | (146,000) | (152,000) |
Marketable securities, Estimated Fair Value | 31,241,000 | $ 46,299,000 |
Convertible note | ||
Investment Holdings | ||
Amortized Cost | 225,000 | |
Marketable securities, Estimated Fair Value | $ 225,000 |
Balance sheet components - Prop
Balance sheet components - Property and equipment (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Property and equipment | |||
Total property and equipment, gross | $ 51,942 | $ 49,871 | |
Accumulated depreciation and amortization | (21,635) | (19,530) | |
Total property and equipment, net | 30,307 | 30,341 | |
Depreciation | 2,100 | $ 1,700 | |
Leasehold improvements | |||
Property and equipment | |||
Total property and equipment, gross | 12,778 | 12,623 | |
Laboratory equipment | |||
Property and equipment | |||
Total property and equipment, gross | 20,934 | 17,705 | |
Equipment under capital lease | |||
Property and equipment | |||
Total property and equipment, gross | 8,595 | 11,446 | |
Computer equipment | |||
Property and equipment | |||
Total property and equipment, gross | 4,023 | 4,023 | |
Software | |||
Property and equipment | |||
Total property and equipment, gross | 2,553 | 2,520 | |
Furniture and fixtures | |||
Property and equipment | |||
Total property and equipment, gross | 569 | 569 | |
Automobiles | |||
Property and equipment | |||
Total property and equipment, gross | 20 | 20 | |
Construction-in-progress | |||
Property and equipment | |||
Total property and equipment, gross | $ 2,470 | $ 965 |
Balance sheet components - Summ
Balance sheet components - Summary of other assets (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Balance Sheet Related Disclosures [Abstract] | ||
Asset associated with investment in privately held company | $ 1,125 | |
Capitalized financing costs | 463 | $ 170 |
Security deposits | 411 | 406 |
Total other assets | $ 1,999 | $ 576 |
Balance sheet components - Accr
Balance sheet components - Accrued liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Balance Sheet Related Disclosures [Abstract] | ||
Liabilities associated with business combinations | $ 12,116 | $ 9,497 |
Accrued compensation and related expenses | 6,827 | 7,406 |
Accrued professional services | 1,389 | 1,077 |
Liability associated with investment in privately held company | 1,125 | |
Accrued laboratory materials purchases | 735 | 1,242 |
Deferred revenue | 550 | 307 |
Lease incentive obligation, current | 491 | 489 |
Accrued outsourced services | 253 | 142 |
Other | 2,771 | 2,582 |
Total accrued liabilities | $ 26,257 | $ 22,742 |
Balance sheet components - Othe
Balance sheet components - Other long-term liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Balance Sheet Related Disclosures [Abstract] | ||
Lease incentive obligation, non-current | $ 3,709 | $ 3,831 |
Deferred rent, non-current | 5,272 | 5,153 |
Liabilities associated with business combination | 3,779 | |
Other non-current liabilities | 753 | 677 |
Total other long-term liabilities | $ 9,734 | $ 13,440 |
Fair value measurements - Finan
Fair value measurements - Financial instruments at fair value on a recurring basis (Details) - Recurring basis - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Total financial assets | $ 43,611 | $ 64,588 |
Total financial liabilities | 4,267 | 3,779 |
Contingent consideration | ||
Total financial liabilities | 4,267 | 3,779 |
Level 1 | ||
Total financial assets | 11,845 | 17,989 |
Level 2 | ||
Total financial assets | 31,541 | 46,599 |
Level 3 | ||
Total financial assets | 225 | |
Total financial liabilities | 4,267 | 3,779 |
Level 3 | Contingent consideration | ||
Total financial liabilities | 4,267 | 3,779 |
Money market funds | ||
Estimated Fair Value | 6,860 | 5,998 |
Money market funds | Level 1 | ||
Estimated Fair Value | 6,860 | 5,998 |
Certificate of deposits | ||
Certificates of deposit | 300 | 300 |
Certificate of deposits | Level 2 | ||
Certificates of deposit | 300 | 300 |
U.S. treasury notes | ||
Total financial assets | 4,985 | 11,991 |
U.S. treasury notes | Level 1 | ||
Total financial assets | 4,985 | 11,991 |
U.S. government agency securities | ||
Total financial assets | 31,241 | 46,299 |
U.S. government agency securities | Level 2 | ||
Total financial assets | 31,241 | $ 46,299 |
Convertible note | ||
Total financial assets | 225 | |
Convertible note | Level 3 | ||
Total financial assets | $ 225 |
Fair value measurements - Addit
Fair value measurements - Additional Information (Details) - USD ($) | Jan. 06, 2017 | Mar. 31, 2018 | Mar. 31, 2019 | Dec. 31, 2017 |
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 | ||||
Business acquisition contingently payable amount | 5,000,000 | |||
Increase in fair value of contingent consideration | $ 2,200,000 | |||
AltaVoice | Contingent consideration | Level 3 | Recurring basis | ||||
Estimated fair value for contingent consideration | $ 2,200,000 | |||
Increase in fair value of contingent consideration | 2,100,000 | |||
AltaVoice | Common Stock | ||||
Business acquisition common stock issued, value | 5,000,000 | |||
AltaVoice | Maximum | Common Stock | ||||
Business acquisition contingently payable amount | $ 5,000,000 | |||
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 | New Contingent Milestone Based On Achieving Revenue Target During 2017 And 2018 | Scenario, Forecast | ||||
Contingent revenue threshold | $ 10,000,000 |
Fair value measurements - Fin50
Fair value measurements - Financial instruments measured at fair value on a recurring basis (Details) - Level 3 $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Convertible note | |
Convertible note | $ 225 |
Balance as of March 31, 2018 | 225 |
Contingent consideration | Recurring basis | |
Balance as of December 31, 2017 | 3,779 |
Change in estimate of fair value | 488 |
Balance as of March 31, 2018 | $ 4,267 |
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, 2018 | Dec. 31, 2017 |
Carrying Amount | ||
Debt | $ 58,554 | $ 39,084 |
Fair Value | ||
Debt | $ 59,006 | $ 40,526 |
Investment in Privately Held 52
Investment in Privately Held Company - Additional Information (Details) | 3 Months Ended |
Mar. 31, 2018USD ($) | |
KEW | |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |
Collaboration agreement entering period | Mar. 15, 2018 |
Licensing Agreement | |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |
Licensing agreement minimum term | 1 year |
Licensing Agreement | Minimum | |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |
Licensing agreement right of first refusal term | 6 months |
Convertible Notes | KEW | |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |
Amortized cost of convertible note | $ 225,000 |
Convertible notes incremental purchase required amount | $ 225,000 |
Convertible notes incremental purchase, periodic payment | each month |
Convertible notes incremental purchase, monthly payments | $ 225,000 |
Convertible Notes | Minimum | KEW | |
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items] | |
Incremental convertible notes purchase term | 6 months |
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, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Security Deposit | $ 411 | $ 406 | ||
Total minimum lease payments | 75,632 | |||
Future minimum lease payments under operating leases | ||||
Rent expense | 2,400 | $ 2,200 | ||
Other Noncurrent Assets | ||||
Security Deposit | 400 | 400 | ||
Good Start Facilities | ||||
Security Deposit | 400 | $ 400 | ||
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 | |||
Total minimum lease payments | $ 62,600 |
Commitments and contingencies54
Commitments and contingencies - Schedule of future minimum payments under operating leases (Details) $ in Thousands | Mar. 31, 2018USD ($) |
Future minimum lease payments under operating leases | |
2018 (remainder of year) | $ 7,237 |
2,019 | 9,633 |
2,020 | 9,512 |
2,021 | 9,727 |
2,022 | 9,676 |
Thereafter | 29,847 |
Total minimum lease payments | $ 75,632 |
Commitments and contingencies55
Commitments and contingencies - (Debt Financing) - Additional Information (Details) - USD ($) | Mar. 12, 2018 | Feb. 26, 2018 | Mar. 15, 2017 | Mar. 31, 2018 | Mar. 31, 2017 | Jun. 30, 2018 | Dec. 31, 2016 | Jul. 31, 2015 |
Net proceeds from term loan | $ 19,792,000 | $ 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 | ||||||||
Term loan, borrowing amount | 20,000,000 | |||||||
Net proceeds from term loan | $ 19,800,000 | |||||||
Loan and Security Agreement | Secured Debt | ||||||||
Maximum borrowing capacity | $ 15,000,000 | |||||||
Obligations under Loan Agreement | $ 12,100,000 | |||||||
Repayment of balance debt obligations | 12,100,000 | |||||||
Loan and Security Agreement | Secured Debt | Other Income (Expense), Net | ||||||||
Prepayment premium classified as extinguishment of debt | $ 670,000 | |||||||
Amended 2017 Loan Agreement | Third Term Loan | ||||||||
Term loan, line fee percentage on unused commitment amount | 1.00% | |||||||
Amended 2017 Loan Agreement | Third Term Loan | Scenario, Forecast | ||||||||
Term loan, borrowing amount | $ 20,000,000 | |||||||
Amended 2017 Loan Agreement | Secured Debt | ||||||||
Obligations under Loan Agreement | 60,000,000 | |||||||
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 Amended 2017 Loan 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 | 1,100,000 | ||||||
Debt issuance cost | 600,000 | |||||||
Amended 2017 Loan Agreement | Secured Debt | Minimum | ||||||||
Term loans, prepayment fee percentage of outstanding balance | 1.00% | |||||||
Amended 2017 Loan Agreement | Secured Debt | Maximum | ||||||||
Term loans, prepayment fee percentage of outstanding balance | 3.00% | |||||||
Amended 2017 Loan Agreement | Secured Debt | Second Term Loan | ||||||||
Warrants granted to purchase shares of common stock | 85,482 | |||||||
Warrants granted to purchase common stock exercise price | $ 7.02 | |||||||
Fair value of warrant | $ 383,000 | |||||||
Warrants term | 10 years | |||||||
Amended 2017 Loan Agreement, Loan and Security Agreement | Secured Debt | ||||||||
Interest expense | $ 1,200,000 | $ 300,000 |
Commitments and contingencies56
Commitments and contingencies - Schedule of future payments under amended 2017 loan agreement (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Future payments under the Loan Agreement | ||
Total non-current debt obligation | $ 58,554 | $ 39,084 |
Amended 2017 Loan Agreement | ||
Future payments under the Loan Agreement | ||
2018 (remainder of year) | 4,146 | |
2,019 | 19,050 | |
2,020 | 24,094 | |
2,021 | 22,123 | |
2,022 | 8,225 | |
Total remaining debt payments | 77,638 | |
Less: amount representing debt discount | (1,446) | |
Less: amount representing interest | (17,638) | |
Present value of remaining debt payments | 58,554 | |
Total non-current debt obligation | $ 58,554 |
Commitments and Contingencies57
Commitments and Contingencies - (Capital Leases) - Additional Information (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Lease term | 3 years | ||
Interest expense | $ 77,000 | $ 16,000 | |
Property and equipment under capital lease | 8,600,000 | $ 11,400,000 | |
Accumulated depreciation | $ 1,800,000 | $ 3,000,000 | |
Minimum | |||
Interest rate (as a percent) | 4.30% | ||
Maximum | |||
Interest rate (as a percent) | 6.40% |
Commitments and Contingencies58
Commitments and Contingencies - Schedule of future minimum lease payments under capital leases (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Future payments under the capital lease | ||
2018 (remainder of year) | $ 1,652 | |
2,019 | 2,087 | |
2,020 | 1,394 | |
2,021 | 21 | |
Total capital lease obligations | 5,154 | |
Less: amount representing interest | (380) | |
Present value of net minimum capital lease payments | 4,774 | |
Less: current portion | (1,879) | $ (2,039) |
Total non-current capital lease obligations | $ 2,895 | $ 3,373 |
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, 2018 | Mar. 31, 2017 | Jan. 31, 2015 | |
Stock incentive plan | |||||
Stock-based compensation | $ 4,393,000 | $ 3,278,000 | |||
RSUs | |||||
Stock incentive plan | |||||
Vested stock units awarded | 66,389 | ||||
Vested and expected to vest | |||||
Weighted-average grant date fair value (in dollars per share) | $ 7.81 | $ 10.22 | |||
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 | $ 0 | $ 400,000 | |||
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 | |||||
Options granted (in shares) | 0 | ||||
Weighted-average grant date fair value (in dollars per share) | $ 5.85 | ||||
Total grant date fair value of options to purchase common stock vested | $ 1,800,000 | $ 1,100,000 | |||
Exercised, aggregate intrinsic value | $ 51,000 | $ 900,000 | |||
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% | ||||
Maximum | 2010 Plan | |||||
Stock incentive plan | |||||
Term of options granted | 10 years |
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, 2018 | Dec. 31, 2017 | |
RSUs | ||
Activity under the plan | ||
Units granted | (177,319) | |
Units cancelled | 74,205 | |
Stock incentive plans | Options | ||
Activity under the plan | ||
Shares Available For Grant | 1,119,792 | |
Balance at the beginning of the period | 4,114,874 | |
Additional shares reserved | 2,143,836 | |
Options granted (in shares) | 0 | |
Option cancelled (in shares) | (28,581) | |
Options exercised (in shares) | (10,811) | |
Shares Available For Grant | 3,189,095 | 1,119,792 |
Balance at the end of the period | 4,075,482 | 4,114,874 |
Weighted-Average Exercise Price | ||
Balance at the beginning of the period (in dollars per share) | $ 8.51 | |
Options cancelled (in dollars per share) | 9.26 | |
Options exercised (in dollars per share) | 1.99 | |
Balance at the end of the period (in dollars per share) | $ 8.52 | $ 8.51 |
Additional information | ||
Exercisable, Number of shares | 2,497,055 | |
Exercisable, Weighted-Average Exercise Price (in dollars per share) | $ 7.95 | |
Weighted-Average Remaining Contractual Life | 7 years 4 months 28 days | 7 years 7 months 17 days |
Exercisable, Weighted-Average Remaining Contractual Life | 7 years 7 days | |
Aggregate Intrinsic Value | $ 1,268,717 | $ 5,128 |
Exercisable, Aggregate Intrinsic Value | $ 1,268,213 | |
Vested and expected to vest | ||
Number of shares | 3,834,023 | |
Weighted-Average Exercise Price (in dollars per share) | $ 8.47 | |
Weighted-Average Remaining Contractual Life | 7 years 4 months 9 days | |
Aggregate Intrinsic Value | $ 1,268,546 | |
Stock incentive plans | RSUs | ||
Activity under the plan | ||
Units granted | (177,319) | |
Units cancelled | 74,205 |
Stock incentive plans - RSU Act
Stock incentive plans - RSU Activity (Details) - RSUs | 3 Months Ended |
Mar. 31, 2018$ / sharesshares | |
Number of Shares | |
Balance at the beginning of the period | shares | 2,387,120 |
Granted | shares | 177,319 |
Vested | shares | (66,389) |
Cancelled | shares | (74,205) |
Balance at the end of the period | shares | 2,423,845 |
Weighted-Average Grant Date Fair Value | |
Balance at the beginning of the period | $ / shares | $ 9.91 |
Granted | $ / shares | 7.81 |
Vested | $ / shares | 10.15 |
Cancelled | $ / shares | 10.85 |
Balance at the end of the period | $ / shares | $ 9.72 |
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, 2018 | Mar. 31, 2017 | |
Non-Employee Options | |||
Assumptions used in determination of fair value of options using the Black-Scholes option pricing valuation model | |||
Options granted (in shares) | 0 | ||
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) | 0 years | 6 years | |
Expected volatility | 72.29% | ||
Risk-free interest rate | 2.02% | ||
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 | ||
Expected volatility | 77.36% | ||
Risk-free interest rate | 2.31% | ||
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) | 0 years | 6 years 10 days | |
Expected volatility | 72.94% | ||
Risk-free interest rate | 2.05% | ||
Options granted (in shares) | 0 | ||
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 | $ 1.3 | ||
Common stock reserved for future issuance | 843,497 |
Stock incentive plans - Stock-b
Stock incentive plans - Stock-based compensation expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Stock-based compensation | ||
Total stock-based compensation expense | $ 4,393 | $ 3,278 |
Unrecognized stock-based compensation | $ 7,000 | |
Expected period to recognize on a straight-line basis | 2 years | |
Capitalized stock-based employee compensation | $ 0 | |
RSUs | ||
Stock-based compensation | ||
Unrecognized stock-based compensation | $ 13,700 | |
Expected period to recognize on a straight-line basis | 1 year 10 months 24 days | |
Cost of revenue | ||
Stock-based compensation | ||
Total stock-based compensation expense | $ 491 | 317 |
Research and development | ||
Stock-based compensation | ||
Total stock-based compensation expense | 1,483 | 1,295 |
Selling and marketing | ||
Stock-based compensation | ||
Total stock-based compensation expense | 1,048 | 716 |
General and Administrative Expense | ||
Stock-based compensation | ||
Total stock-based compensation expense | $ 1,371 | $ 950 |
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, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |||
Net loss | $ (36,120) | $ (26,928) | $ (123,400) |
Shares used in computing net loss per share, basic and diluted | 54,381,751 | 42,318,136 | |
Net loss per share, basic and diluted | $ (0.66) | $ (0.64) |
Net loss per common share - S65
Net loss per common share - Schedule of Antidilutive securities excluded from computation of earnings per share (Details) - shares | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Antidilutive shares excluded from diluted net loss per share | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 12,304,410 | 7,478,936 |
Options | ||
Antidilutive shares excluded from diluted net loss per share | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 4,075,482 | 4,668,093 |
Warrants | ||
Antidilutive shares excluded from diluted net loss per share | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 2,019,099 | 116,845 |
RSUs | ||
Antidilutive shares excluded from diluted net loss per share | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 2,423,845 | 2,519,794 |
ESPP | ||
Antidilutive shares excluded from diluted net loss per share | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 327,161 | 174,204 |
Series A convertible preferred stock | ||
Antidilutive shares excluded from diluted net loss per share | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 3,458,823 |
Geographic information - Schedu
Geographic information - Schedule of Revenue by country (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Geographic information | ||
Revenue | $ 27,671 | $ 10,338 |
United States | ||
Geographic information | ||
Revenue | 25,907 | 9,208 |
Canada | ||
Geographic information | ||
Revenue | 1,008 | 597 |
Rest of World | ||
Geographic information | ||
Revenue | $ 756 | $ 533 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | Apr. 04, 2018 | Apr. 02, 2018 | Mar. 31, 2018 | Mar. 31, 2017 |
Subsequent Event [Line Items] | ||||
Gross proceeds from underwritten public offering | $ 191 | $ 696 | ||
AltaVoice | ||||
Subsequent Event [Line Items] | ||||
Business combination, agreement date | Jan. 6, 2017 | |||
Subsequent Event | Common Stock | AltaVoice | ||||
Subsequent Event [Line Items] | ||||
Common stock, shares issued | 716,332 | |||
Subsequent Event | Underwritten Public Offering | ||||
Subsequent Event [Line Items] | ||||
Gross proceeds from underwritten public offering | $ 57,500 | |||
Estimated net proceeds from underwritten public offering | $ 53,500 | |||
Subsequent Event | Underwritten Public Offering | Common Stock | ||||
Subsequent Event [Line Items] | ||||
Number of shares sold in underwritten public offering | 12,777,777 | |||
Shares issued price per share | $ 4.50 |