Quarterly report pursuant to Section 13 or 15(d)

Fair Value Measurements

v3.10.0.1
Fair Value Measurements
9 Months Ended
Sep. 30, 2018
Fair Value Disclosures [Abstract]  
Fair Value Measurements

10.

Fair Value Measurements

The carrying amounts of certain financial instruments, including cash and cash equivalents, restricted cash, accounts receivable, prepaid expenses and other current assets, accounts payable, and accrued expenses approximate their respective fair values due to the short-term nature of such instruments.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The Company evaluates its financial assets and liabilities subject to fair value measurements on a recurring basis to determine the appropriate level in which to classify them for each reporting period, pursuant to the policy described in Note 2. This determination requires significant judgments to be made. The following table summarizes the conclusions reached as of September 30, 2018 and December 31, 2017 for financial instruments measured at fair value on a recurring basis (in thousands):

 

 

 

 

 

 

 

Fair Value Hierarchy Classification

 

 

 

Balance

 

 

Quoted

Prices in

Active

Markets for

Identical

Assets

(Level 1)

 

 

Significant

Other

Observable

Inputs

(Level 2)

 

 

Significant

Unobservable

Inputs (Level 3)

 

December 31, 2017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash on deposit

 

$

1,316

 

 

$

1,316

 

 

 

 

 

 

 

Money market funds

 

 

10,153

 

 

 

10,153

 

 

 

 

 

 

 

Total assets

 

$

11,469

 

 

$

11,469

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Warrant liability

 

$

3,872

 

 

 

 

 

 

 

 

$

3,872

 

Total liabilities

 

$

3,872

 

 

 

 

 

 

 

 

$

3,872

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30, 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash

 

$

97

 

 

$

97

 

 

 

 

 

 

 

Restricted cash

 

 

328

 

 

 

328

 

 

 

 

 

 

 

Money market funds

 

 

15,983

 

 

 

15,983

 

 

 

 

 

 

 

Total assets

 

$

16,408

 

 

$

16,408

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Warrant liabilities

 

$

5,242

 

 

 

 

 

 

 

 

$

5,242

 

Total liabilities

 

$

5,242

 

 

 

 

 

 

 

 

$

5,242

 

 

The Company measures cash equivalents at fair value on a recurring basis. The fair value of cash equivalents is determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets.

Level 3 financial liabilities consist of the warrant liability for which there is no current market such that the determination of fair value requires significant judgment or estimation. Changes in fair value measurements categorized within Level 3 of the fair value hierarchy are analyzed each period based on changes in estimates or assumptions and recorded as appropriate. The Company uses the Black-Scholes option valuation model to value the Level 3 warrant liability at inception and on subsequent valuation dates. This model incorporates transaction details such as the Company’s stock price, contractual terms, maturity, risk free rates, as well as volatility.

A reconciliation of the beginning and ending balances for liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) is as follows (in thousands):

Balance - January 1, 2018

 

$

3,872

 

March 2018 Public Offering - Series 1 Warrants

 

 

3,481

 

March 2018 Public Offering - Series 2 Warrants

 

 

5,500

 

Gain adjustment to fair value

 

 

(7,611

)

Balance - September 30, 2018

 

$

5,242