Fair Value Measurements

9 Months Ended

Sep. 30, 2020

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

Note 16 — Fair Value Measurements

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In determining fair value, the Company uses various methods including market, income and cost approaches. Based upon these approaches, the Company often utilizes certain assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and/or the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market-corroborated, or unobservable inputs. The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. Based upon observable inputs used in the valuation techniques, the Company is required to provide information according to the fair value hierarchy. The fair value hierarchy ranks the quality and reliability of the information used to determine fair values into three broad levels as follows:

Level 1:	Valuations for assets and liabilities traded in active markets from readily available pricing sources for market transactions involving identical assets or liabilities.
Level 2:	Valuations for assets and liabilities traded in less active dealer or broker markets. Valuations are obtained from third-party pricing services for identical or similar assets or liabilities.
Level 3:	Valuations incorporate certain assumptions and projections in determining the fair value assigned to such assets or liabilities.

In instances where the determination of the fair value measurement is based upon inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based upon the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability.

The following tables summarize the Company's financial liabilities measured at fair value on a recurring basis as of September 30, 2020 and December 31, 2019 (in thousands):

	Carrying Amount as of September 30, 2020		Fair Value Measurements as of September 30, 2020
			Level 1		Level 2		Level 3
3.25% convertible senior notes due in 2023	$	38,401	$	—	$	—	$	38,401
Preferred stock derivative liability		5,871		—		—		5,871

	Carrying Amount as of December 31, 2019		Fair Value Measurements as of December 31, 2019
			Level 1		Level 2		Level 3
3.25% convertible senior notes due in 2023	$	50,753	$	—	$	—	$	50,753
Preferred stock derivative liability		5,247		—		—		5,247

The following tables provide a reconciliation of the beginning and ending balances of liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) (in thousands):

3.25% convertible senior notes due in 2023	2020			2019
Balance, January 1,	$	50,753		$	—
New issuance ($29.6 million face value)		—			37,916
New issuance ($8.0 million face value)		—			10,254
Conversion of convertible senior notes		(10,733	)		—
Change in fair value		(2,757	)		465
Payment-in-kind interest		1,138			—
Balance, September 30,	$	38,401		$	48,635

Preferred stock derivative liability	2020		2019
Balance, January 1,	$	5,247	$	—
New issuance of Series A Preferred Stock		—		4,894
Change in fair value		624		—
Balance, September 30,	$	5,871	$	4,894

The Company’s derivative liability is classified within Level 3 of the fair value hierarchy because unobservable inputs were used in estimating the fair value. The fair value of the redemption provision embedded in the Series A Preferred Stock is estimated based on a discounted cash flow model and probability assumptions based on management’s estimates of a change of control event occurring. In subsequent periods, the derivative liability is accounted for at fair value, with changes in fair value recognized as other income (expense) on the Company's condensed consolidated statements of operations.

The Company’s accounts receivable, accounts payable, and accrued expenses represent financial instruments. The carrying value of these financial instruments is a reasonable approximation of fair value.