Note 8 - Derivative Liabilities

6 Months Ended

Jun. 30, 2019

Notes to Financial Statements

Derivatives and Fair Value [Text Block]

NOTE

8

– DERIVATIVE LIABILITIES

The number of shares of common stock issuable pursuant to certain warrants issued in

2015

will be increased if our adjusted EBITDA or the market price of the Company’s common stock do

not

meet certain defined amounts. We have recorded the estimated fair value of the warrants as of the date of issuance. Due to the variable terms of the warrant agreements, the warrants are recorded as derivative liabilities with a corresponding charge to our consolidated statements of comprehensive income (loss) for changes in the estimated fair value of the warrants from the date of issuance to each balance sheet reporting date. As of

June 30, 2019,

we have estimated the total fair value of the derivative liabilities to be

$6,046

 as compared to

$4,359

as of

December 31, 2018.

We had the following activity in our derivative liabilities account for the

six

months ended

June 30, 2019:

Derivative liabilities as of December 31, 2018	$	4,359
Reclassification of derivative liabilities		(628	)
Loss on change in fair value of derivative liabilities		2,315
Derivative liabilities as of June 30, 2019	$	6,046

The value of the derivative liabilities is generally estimated using an options lattice model with multiple inputs and assumptions, including the market price of the Company’s common stock, stock price volatility and other assumptions to project EBITDA and other reset events. These inputs and assumptions are subject to management’s judgment and can vary materially from period to period.