Fair Value Measurements

12 Months Ended

Dec. 31, 2015

Fair Value Measurements

Fair Value Measurements

11. Fair Value Measurements

The following table presents the Company’s 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 December 31, 2014 and December 31, 2015:

Quoted

Quoted

Prices

Prices

in

in

Active

Active

Markets

Significant

Markets

Significant

for Identical

Other

Significant

Balance

for Identical

Other

Significant

Balance

Assets and

Observable

Unobservable

as of

Assets and

Observable

Unobservable

as of

Liabilities

Inputs

Inputs

December

Liabilities

Inputs

Inputs

December

(Level 1)

(Level 2)

(Level 3)

31, 2014

(Level 1)

(Level 2)

(Level 3)

31, 2015

Derivative liabilities related to Warrants

$

—

$

—

$

172

$

172

$

—

$

—

$

322

$

322

The following table sets forth a summary of changes in the fair value of the Company’s Level 3 liabilities for the year ended December 31, 2014 and December 31, 2015.

(Gain) or

(Gain) or

loss

loss

recognized

recognized

in

in

Balance

earnings

Balance

earnings

Balance

as of

from

as of

from

Expiration

as of

December

Change in

December

Change in

of

December

31, 2013

Fair Value

31, 2014

Fair Value

warrants

31, 2015

Derivative liabilities related to Warrants

$

1,534

$

(1,362

)

$

172

$

394

$

(244

)

$

322

The unrealized gains or losses on the derivative liabilities are recorded as a change in fair value of derivative liabilities in the Company’s 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 which trade infrequently and therefore have little or no price transparency are classified as Level 3.

As of December 31, 2015 and 2014, our available-for-sale securities are classified as Level 1 per ASC 820. The value of Senior convertible debt is stated at its carrying value at December 31, 2015 and 2014. The Company believes it could obtain borrowings at December 31, 2015 at comparable interest rates as the November 2014 debentures, therefore, the carrying value approximates fair value.