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15. FAIR VALUE
 9 Months Ended
Sep. 30, 2015
Fair Value Disclosures [Abstract]  
FAIR VALUE

NOTE 15 – FAIR VALUE

 

As defined in our accounting policy on the fair value of financial instruments, financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of the fair value of assets and liabilities and their placement within the fair value hierarchy levels.

 

The following table sets forth by level within the fair value hierarchy our financial instruments that were accounted for at fair value as of September 30, 2015 (in thousands):

 

    Fair Value Measurements At September 30, 2015  
    Quoted Prices in Active Markets for Identical Assets     Significant Other Observable Inputs     Significant Unobservable Inputs     Total Carrying Value  
    (Level 1)     (Level 2)     (Level 3)        
Series A Convertible Preferred Stock   $ -     $ -     $ 28,402     $ 28,402  
                                 

 

The Company believes there is no active market or significant other market data for the Series A Preferred stock as it is held by a limited number of closely held entities, therefore the Company has determined it should use Level 3 inputs.

 

The Series A Convertible Preferred Stock was valued using a binomial lattice option pricing model for which the significant assumptions were expected term and expected volatility. The binomial lattice model used a probablistic approach in which the Company assigned percentages to each scenario based on the chance of repayment. The percentages used were as follows: the non-repayment scenario was assigned a 25% probability.