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FAIR VALUE | 9 Months Ended
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Sep. 30, 2017
Fair Value Disclosures [Abstract] |
FAIR VALUE | FAIR VALUE FASB guidance on fair value measurements, which defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements for our financial assets and liabilities, as well as for other assets and liabilities that are carried at fair value on a recurring basis in our condensed consolidated financial statements. FASB guidance establishes a three-level fair value hierarchy based upon the assumptions (inputs) used to price assets or liabilities. The three levels of inputs used to measure fair value are as follows: Level 1—Unadjusted quoted prices in active markets for identical assets or liabilities; Level 2—Observable inputs other than those included in Level 1, such as quoted prices for similar assets and liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets; and Level 3—Unobservable inputs reflecting our own assumptions and best estimate of what inputs market participants would use in pricing the asset or liability. Common Stock Warrant Liabilities. Certain of our issued and outstanding warrants to purchase shares of common stock do not qualify to be treated as equity and, accordingly, are recorded as a liability. 2016 Warrant Liability The Company assumed the 2016 Warrant Liability in the Merger and it represents the fair value of Transgenomic warrants issued in January 2016, of which, 25,584 warrants remain outstanding as of September 30, 2017. We are required to record these instruments at fair value at each reporting date and changes are recorded as a non-cash adjustment to earnings. The gains or losses included in earnings are reported in other income (expense) in our condensed consolidated Statement of Operations. The 2016 Warrant Liability is considered a Level 3 financial instrument and is valued using a binomial lattice simulation model. This method is well suited to valuing options with non-standard features. Assumptions and inputs used in the valuation of the common stock warrants include: our equity value, which was estimated using our stock price of $2.16 as of September 30, 2017; volatility of 137%; and a risk-free interest rate of 1.20%. During the three and nine months ended September 30, 2017, the changes in the fair value of the liability measured using significant unobservable inputs (Level 3) were comprised of the following:
Dollars in Thousands |  |
|  | For the Three Months Ended
|  | September 30, 2017
Beginning balance at July 1 |  | $ | 618 |
Additions - liability assumed in the Merger |  | — |
Total (gains) or losses: |  |
Recognized in earnings |  | — |
Balance at September 30 |  | $ | 618 |
Dollars in Thousands |  |
|  | For the Nine Months Ended
|  | September 30, 2017
Beginning balance at January 1 |  | $ | — |
Additions - liability assumed in the Merger |  | 615 |
Total (gains) or losses: |  |
Recognized in earnings |  | 3 |
Balance at September 30 |  | $ | 618 |

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- Definition The entire disclosure for financial instruments. This disclosure includes, but is not limited to, fair value measurements of short and long term marketable securities, international currencies forward contracts, and auction rate securities. Financial instruments may include hedging and non-hedging currency exchange instruments, derivatives, securitizations and securities available for sale at fair value. Also included are investment results, realized and unrealized gains and losses as well as impairments and risk management disclosures. + References No definition available. + Details
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