XML 15 R10.htm IDEA: XBRL DOCUMENT
v3.20.1

Fair Value | 12 Months Ended
--- | ---
Dec. 31, 2019
Fair Value Disclosures [Abstract] |
Fair Value |
3. | Fair Value
Measurements Fair value measurements are market-based measurements, not entity-specific measurements. Therefore, fair value measurements are determined based on the assumptions that market participants would use in pricing the asset or liability. We follow a three-level hierarchy to prioritize the inputs used in the valuation techniques to derive fair values. The basis for fair value measurements for each level within the hierarchy is described below:
| • | Level 1: Quoted prices in active markets for identical assets or liabilities.
| • | Level 2: Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are observable in active markets.
| • | Level 3: Valuations derived from valuation techniques in which one or more significant inputs are unobservable in active markets.
Warrants issued by the Company in connection with the 2018 Rights Offering in July 2018 (“Series T Warrants”) and in September 2019 Offering (“Series U Warrants”) are classified as liabilities instruments. Because some of the inputs to our valuation model are either not observable or are not derived principally from or corroborated by observable market data by correlation or other means, the warrant liability is classified as Level 3 in the fair value hierarchy. The Series T Warrants are not traded in an active securities market, and as such the estimated the fair value as of December 31, 2019 and 2018 was determined by using an option pricing model with the following assumptions:
|  | As of December 31, 2019 |  |  | As of December 31, 2018 |
Expected term |  | 1.1 years |  |  | 2.1 years |
Common stock market price |  | $ | 2.40 |  |  | $ | 14.50 |
Risk-free interest rate |  |  | 1.59 | % |  |  | 2.48 | %
Expected volatility |  |  | 168 | % |  |  | 125 | %
Resulting fair value (per warrant) |  | $ | 1.47 |  |  | $ | 6.50 |
The warrants issued in connection with the 2018 Rights Offering may be redeemed by the Company at $0.01 per warrant prior to their expiration if the Company’s common stock closes above $3.63 per share, subject to adjustment, for 20 consecutive trading days. The initial fair value of the liability associated with these warrants was $3.1 million, and the fair value decreased to $0.1 million as of December 31, 2019. The main driver for the change in the fair value of warrants at December 31, 2019 and 2018, was related to the change in our stock price. The Company estimated the fair value of the Series U Warrants on the issuance date as well as at December 31, 2019 with the Black Scholes model. The Series U warrants will be marked to market as of each balance sheet date until they are exercised or upon expiration, with the changes in fair value recorded as non-operating income or loss in the statement of operations and comprehensive income (loss).
|  | As of December 31, 2019 |  |  | As of September 25, 2019 |
Expected term |  | 4.75 years |  |  | 5 years |
Common stock market price |  | $ | 2.40 |  |  | $ | 3.42 |
Risk-free interest rate |  |  | 1.68 | % |  |  | 1.60 | %
Expected volatility |  |  | 134.5 | % |  |  | 134.9 | %
Resulting fair value (per warrant) |  | $ | 1.94 |  |  | $ | 2.90 |
The following table summarizes the change in our Level 3 warrant liability value (in thousands):
|  | Years ended December 31, |
Warrant liability |  | 2019 |  |  | 2018 |
Beginning balance |  | $ | 916 |  |  | $ | 3,148 |
Issuance of warrants |  |  | 10,214 |  |  |  | — |
Exercises |  |  | (794 | ) |  |  | — |
Change in fair value |  |  | (3,407 | ) |  |  | (2,233 | )
Ending balance |  | $ | 6,929 |  |  | $ | 916 |
Financial Instruments Fair value information is disclosed about all financial instruments, whether or not recognized in the balance sheets, for which it is practicable to estimate fair value. The disclosures of estimated fair value of financial instruments at December 31, 2019 and 2018, were determined using available market information and appropriate valuation methods. Considerable judgment is necessary to interpret market data and develop estimated fair value. The use of different market assumptions or estimation methods may have a material effect on the estimated fair value amounts. The carrying amounts for cash and cash equivalents, accounts receivable, other current assets, accounts payable, accrued expenses and other liabilities approximate fair value due to the short-term nature of these instruments. At December 31, 2019 and 2018, the aggregate fair value and the carrying value of the Company’s term loan were as follows (in thousands):
|  | December 31, 2019 |  |  | December 31, 2018 |
|  | Fair Value |  |  | Carrying Value |  |  | Fair Value |  |  | Carrying Value |
Debt |  | $ | 10,761 |  |  | $ | 11,060 |  |  | $ | 14,043 |  |  | $ | 14,202 |
Carrying value is net of debt discount of $0.4 million and $0.6 million as of December 31, 2019 and 2018, respectively. The fair value of debt is classified as Level 3 in the fair value hierarchy as some of the inputs, primarily the effective interest rate, to the valuation model are either not observable quoted prices or are not derived principally from or corroborated by observable market data by correlation or other means. Nonfinancial Assets and Liabilities The Company applies fair value techniques on a non-recurring basis, if and when necessary, associated with: (1) valuing potential impairment losses related to goodwill which are accounted for pursuant to the authoritative guidance for intangibles—goodwill and other; and (2) valuing potential impairment losses related to long-lived assets which are accounted for pursuant to the authoritative guidance for property, plant and equipment.

X
- References No definition available. + Details
Name: | us-gaap_FairValueDisclosuresAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure of the fair value measurement of assets and liabilities, which includes financial instruments measured at fair value that are classified in shareholders' equity, which may be measured on a recurring or nonrecurring basis. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -URI http://asc.fasb.org/topic&trid=2155941 + Details
Name: | us-gaap_FairValueMeasurementInputsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration