Fair Value Measurements

3 Months Ended

Mar. 31, 2017

The following table presents the Company’s assets and liabilities that are measured and recognized at fair value on a recurring basis classified under the appropriate level of the fair value hierarchy as of March 31, 2017 and December 31, 2016:



	Fair Value Measurements at March 31, 2017
	Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Assets:
Money market fund (1)	$	8,707,706	$	—	$	—	$	8,707,706
Corporate debt securities (2)	—		3,743,945		—		3,743,945
Commercial paper (3)	—		7,272,879		—		7,272,879
U.S. treasury securities (2)	—		8,602,627		—		8,602,627
Total Assets	$	8,707,706	$	19,619,451	$	—	$	28,327,157
Liabilities:
Derivative financial instruments—warrants	$	—	$	—	$	279,434	$	279,434
Total Liabilities	$	—	$	—	$	279,434	$	279,434



	Fair Value Measurements at December 31, 2016
	Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Assets:
Money market fund (1)	$	12,095,620	$	—	$	—	$	12,095,620
Corporate debt securities (2)	—		14,160,686		—		14,160,686
Commercial paper (3)	—		2,393,948		—		2,393,948
U.S. treasury securities (2)	—		8,621,892		—		8,621,892
Total Assets	$	12,095,620	$	25,176,526	$	—	$	37,272,146
Liabilities:
Derivative financial instruments—warrants	$	—	$	—	$	834,940	$	834,940
Total Liabilities	$	—	$	—	$	834,940	$	834,940

(1) Included as a component of cash and cash equivalents on the accompanying condensed consolidated balance sheets.

(2) Included in short-term investments on the accompanying condensed consolidated balance sheets.

(3) $999,739 and $1,198,504 of commercial paper was included as a component of cash and cash equivalents at March 31, 2017 and December 31, 2016, respectively, and the remaining amount was included in short-term investments on the accompanying consolidated balance sheets.

The following table sets forth a summary of changes in the fair value of the Company’s Level 3 liabilities for the three months ended March 31, 2017:



Description	Balance at December 31, 2016		Unrealized Gain			Balance at March 31, 2017
Derivative financial instruments—warrants	$	834,940	$	(555,506	)	$	279,434

The unrealized gains or losses on the derivative financial instruments—warrants are recorded as a change in fair value of derivative financial instruments—warrants in the Company’s consolidated statement of operations. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. At each reporting period, the Company reviews the assets and liabilities that are subject to ASC Topic 815-40. At each reporting period, all assets and liabilities for which the fair value measurement is based on significant unobservable inputs or instruments that trade infrequently and therefore have little or no price transparency are classified as Level 3.

- 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.

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