Fair Value Measurements [Text Block] |
Note 11. Fair Value Measurements
The Company adopted the accounting guidance on fair value measurements for financial assets and liabilities measured on a recurring basis. The guidance requires fair value measurements be classified and disclosed in one of the following three categories:
|
• |
Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;
|
|
|
|
|
• |
Level 2: Quoted prices in markets that are not active or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability;
|
|
|
|
|
• |
Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).
|
The following fair value hierarchy table presents information about each major category of the Company’s financial assets and liability measured at fair value on a recurring basis as of September 30, 2015 and December 31, 2014:
|
|
|
Fair value measurement using
|
|
|
|
|
|
|
|
Significant
|
|
|
Significant
|
|
|
|
|
|
|
|
Quoted prices in
|
|
|
other
|
|
|
unobservable
|
|
|
|
|
|
|
|
active markets
|
|
|
observable
|
|
|
inputs
|
|
|
|
|
($ rounded to nearest thousand)
|
|
|
(Level 1)
|
|
|
inputs (Level 2)
|
|
|
(Level 3)
|
|
|
Total
|
|
Balance at Sept. 30, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
1,676,000
|
|
$ |
—
|
|
$ |
—
|
|
$ |
1,676,000
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warrant liability |
|
$ |
—
|
|
$ |
—
|
|
$ |
1,892,000
|
|
$ |
1,892,000
|
|
|
|
|
Fair value measurement using
|
|
|
|
|
|
|
|
Significant
|
|
|
Significant
|
|
|
|
|
|
|
|
Quoted prices in
|
|
|
other
|
|
|
unobservable
|
|
|
|
|
|
|
|
active markets
|
|
|
observable
|
|
|
inputs
|
|
|
|
|
($ rounded to nearest thousand)
|
|
|
(Level 1)
|
|
|
inputs (Level 2)
|
|
|
(Level 3)
|
|
|
Total
|
|
Balance at December 31, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
4,220,000
|
|
$ |
—
|
|
$ |
—
|
|
$ |
4,220,000
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warrant liability |
|
$ |
—
|
|
$ |
—
|
|
$ |
4,633,000
|
|
$ |
4,633,000
|
|
The reconciliation of warrant liability measured at fair value on a recurring basis using unobservable inputs (Level 3) is as follows:
($ rounded to nearest thousand)
|
|
Warrant Liability
|
|
Balance at December 31, 2013 |
$ |
1,711,000
|
|
Issuance of additional warrants |
|
4,416,000
|
|
Exercise of warrants |
|
(331,000
|
) |
Change in fair value of warrant liability |
|
(1,163,000
|
) |
Balance at December 31, 2014 |
|
4,633,000
|
|
Issuance of additional warrants |
|
-
|
|
Exercise of warrants |
|
-
|
|
Change in fair value of warrant liability |
|
(2,741,000
|
) |
Balance at September 30, 2015 |
$ |
1,892,000
|
|
The fair value of the warrant liability is based on Level 3 inputs. For this liability, the Company developed its own assumptions that do not have observable inputs or available market data to support the fair value. See Note 8 for further discussion of the warrant liability.
The Company believes that the fair values of its current assets and current liabilities approximate their reported carrying amounts. There were no transfers between Level 1, 2 and 3.
|