XML 22 R11.htm IDEA: XBRL DOCUMENT

Fair Value Measurement

3 Months Ended

Mar. 31, 2019

4. Fair Value Measurement

The estimated nonrecurring fair value measurements associated with fixed asset purchases recorded as right-of-use asset finance lease obligations totaling approximately $149,000 during the three months ended March 31, 2019 were calculated as the present value of the lease payments based on contractual payment amounts and estimated market rates. Upon adoption of guidance in ASC Topic 842 Leases, the estimates fair value of the right-of-use operating lease asset was recorded based on present value of future lease payments based contractual payment amounts and estimated market rates in effect.

Other Fair Value Measurements

As of the closing of the Company’s January 30, 2018 offering, the estimated grant date fair value of approximately $8.82 per share associated with the warrants to purchase up to 1,095,153 shares of common stock issued in this offering, or a total of approximately $9.7 million, was recorded as an offset to additional paid-in capital on a relative fair value basis. All warrants sold in this offering had an exercise price of $1.20 per share, subject to down round adjustment, are exercisable immediately and expire five years from the date of issuance. The fair value of the warrants was estimated using a Monte Carlo simulation valuation model using Geometric Brownian Motion, incorporating anticipated future financing events, with the following assumptions:

Beginning stock price	$	10.17
Exercise price	$	15.00
Expected dividend yield		0.00	%
Discount rate-bond equivalent yield		2.48	%
Expected life (in years)		5.00
Expected volatility		99.0	%

As of the closing of the Company’s February 12, 2019 offering, the estimated grant date fair value of approximately $0.95 per share associated with the warrants to purchase up to 7,165,000 shares of common stock issued in this offering, or a total of approximately $6.8 million, was recorded as an offset to additional paid-in capital on a relative fair value basis. All warrants sold in this offering have an exercise price of $1.20 per share, are exercisable immediately and expire five years from the date of issuance. The fair value of the warrants was estimated using a Black-Scholes model with the following assumptions:

Beginning stock price	$	1.05
Exercise price	$	1.20
Expected dividend yield		0.00	%
Discount rate-bond equivalent yield		2.49	%
Expected life (in years)		5.00
Expected volatility		147.7	%

As of the closing of the Company’s March 19, 2019 offering, the estimated grant date fair value of approximately $1.01 per share associated with the warrants to purchase up to 5,950,000 shares of common stock issued in this offering, or a total of approximately $6.0 million, was recorded as an offset to additional paid-in capital on a relative fair value basis. All warrants sold in this offering have an exercise price of $1.25 per share, are exercisable immediately and expire 5.5 years from the date of issuance. The fair value of the warrants was estimated using a Black-Scholes model with the following assumptions:

Beginning stock price	$	1.12
Exercise price	$	1.25
Expected dividend yield		0.00	%
Discount rate-bond equivalent yield		2.44	%
Expected life (in years)		5.50
Expected volatility		140.0	%

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details