Quarterly report pursuant to Section 13 or 15(d)

Fair Value Measurements

v3.8.0.1
Fair Value Measurements
 9 Months Ended
Sep. 30, 2017
Fair Value Disclosures [Abstract]  
Fair Value Measurements
4.
Fair Value Measurements
 
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Three levels of inputs, of which the first two are considered observable and the last unobservable, may be used to measure fair value which are the following:
 
 
•
Level 1—Quoted prices in active markets for identical assets or liabilities. The Company considers a market to be active when transactions for the asset occur with sufficient frequency and volume to provide pricing information on an ongoing basis.
 
 
•
Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
 
 
•
Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The valuation of Level 3 investments requires the use of significant management judgments or estimation.
 
The Company’s fair value hierarchies for its financial assets and liabilities which require fair value measurement are as follows:
 
 
 
Total
 
Level 1
 
Level 2
 
Level 3
 
September 30, 2017
 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
 
 
 
 
Warrant liabilities
 
$
767
 
$
-
 
$
-
 
$
767
 
Contingent consideration liability
 
$
248
 
$
-
 
$
-
 
$
248
 
Contingent success fee liability
 
$
13
 
$
-
 
$
-
 
$
13
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
 
 
 
 
Warrant liability
 
$
3,546
 
$
-
 
$
-
 
$
3,546
 
Contingent consideration liability
 
$
217
 
$
-
 
$
-
 
$
217
 
Contingent success fee liability
 
$
116
 
$
-
 
$
-
 
$
116
 
 
The following table sets forth a summary of the changes in the fair value of the Company’s Level 3 financial liabilities for the nine months ended September 30, 2017, which were measured at fair value on a recurring basis:
 
 
 
 
 
Contingent
 
Contingent
 
 
 
Warrant
 
Consideration
 
Success Fee
 
 
 
Liabilities
 
Liability
 
Liability
 
Balance at December 31, 2016
 
$
3,546
 
$
217
 
$
116
 
Initial fair value of April 2017 Warrants
 
 
3,301
 
 
-
 
 
-
 
Revaluation of 2015 and April 2017 Warrants
 
 
(4,851)
 
 
-
 
 
-
 
Repurchase of April 2017 Warrants
 
 
(2,296)
 
 
-
 
 
-
 
Loss on repurchase of April 2017 Warrants
 
 
1,067
 
 
-
 
 
-
 
Loss on increase in fair value of obligation
 
 
-
 
 
31
 
 
-
 
Gain on decrease in fair value of obligation
 
 
-
 
 
-
 
 
(103)
 
Balance at September 30, 2017
 
$
767
 
$
248
 
$
13
 
 
Refer to Note 12 Capitalization and Equity Structure – Warrants for additional information regarding the repurchase and valuation of warrants.