FAIR VALUE MEASUREMENTS

12 Months Ended

Dec. 31, 2019

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

NOTE 10:    FAIR VALUE MEASUREMENTS

Financial assets and liabilities measured at fair value on a recurring basis are summarized below and disclosed on the balance sheet under warrant liability:

	Fair value measured at December 31, 2019
	Quoted prices in active		Significant other		Significant
	markets		observable inputs		unobservable inputs		Fair value at
	(Level 1)		(Level 2)		(Level 3)		December 31, 2019
Warrant liability	$	—	$	—	$	31,000	$	31,000

	Fair value measured at December 31, 2018
	Quoted prices in active		Significant other		Significant
	markets		observable inputs		unobservable inputs		Fair value at
	(Level 1)		(Level 2)		(Level 3)		December 31, 2018
Warrant liability	$	—	$	—	$	49,000	$	49,000

There were no transfers between Level 1, 2 or 3 during the years ended December 31, 2019 and 2018, respectively.

The valuation of warrants is subjective and is affected by changes in inputs to the valuation model including the price per share of common stock, the historical volatility of the stock price, risk-free rates based on U. S. Treasury security yields, the expected term of the warrants and dividend yield. Changes in these assumptions can materially affect the fair value estimate. The Company could ultimately incur amounts to settle the warrant at a cash settlement value that is significantly different than the carrying value of the liability on the financial statements. The Company will continue to classify the fair value of the warrants as a liability until the warrants are exercised, expire, or are amended in a way that would no longer require these warrants to be classified as a liability. Changes in the fair value of the common stock warrants liability are recognized as a component of other income (expense) in the Statements of Operations.

The net cash settlement value at the time of any future transactions, where the Company consolidates or merges with another entity, will depend upon the value of the following inputs at that time: the consideration value per share of the Company’s common stock, the volatility of the Company’s common stock, the remaining term of the warrant from announcement date, the risk-free interest rate based on U. S. Treasury security yields, and the Company’s dividend yield. The warrant requires use of a volatility assumption equal to the greater of 100% and the 100‑day volatility function determined as of the trading day immediately following announcement of a Fundamental Transaction.