Fair Value Measurements

12 Months Ended

Dec. 31, 2014

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

The Company adopted the accounting guidance on fair value measurements for financial assets and liabilities measured on a recurring basis.  The guidance requires fair value measurements be classified and disclosed in one of the following three categories:

• Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

• Level 2: Quoted prices in markets that are not active or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability;

• Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity). 

The following fair value hierarchy table presents information about each major category of the Company’s financial assets and liability measured at fair value on a recurring basis as of December 31, 2014 and 2013:

	Fair value measurement using
($ in thousands)	Quoted prices in active markets  (Level 1)		Significant other observable inputs (Level 2)		Significant  unobservable inputs (Level 3)		Total
Balance at December 31, 2014
Assets:
Cash and cash equivalents	$	37,495	$	—	$	—	$	37,495
Liabilities:
Warrant liability	$	—	$	—	$	11,286	$	11,286

	Fair value measurement using
($ in thousands)	Quoted prices in active markets  (Level 1)		Significant other observable inputs (Level 2)		Significant  unobservable inputs (Level 3)		Total
Balance at December 31, 2013
Assets:
Cash and cash equivalents	$	60,033	$	—	$	—	$	60,033
Liabilities:
Warrant liability	$	—	$	—	$	15,216	$	15,216

The reconciliation of warrant liability measured at fair value on a recurring basis using unobservable inputs (Level 3) is as follows:

($ in thousands)	Warrant Liability
Balance at December 31, 2011	$	23,754
Issuance of additional warrants	6,766
Exercise of warrants	(11		)
Extinguishment of debt related to warrants	4,410
Change in fair value of warrant liability	(20,404		)
Balance at December 31, 2012	$	14,515
Exercise of warrants	(352		)
Cancellation of warrants	(41		)
Change in fair value of warrant liability	1,094
Balance at December 31, 2013	$	15,216
Exercise of warrants	—
Cancellation of warrants	—
Change in fair value of warrant liability	(3,930		)
Balance at December 31, 2014	$	11,286

The fair value of the warrant liability is based on Level 3 inputs.  For this liability, the Company developed its own assumptions that do not have observable inputs or available market data to support the fair value.  See Note 7 for further discussion of the warrant liability.

The reconciliation of derivative liability measured at fair value on a recurring basis using unobservable inputs (Level 3) is as follows:

	Derivative Liability
Balance at January 1, 2012	534
Issuance of additional preferred stock and other	793
Conversion of preferred stock	(1,350	)
Change in fair value of derivative liability	23
Balance at December 31, 2012	—

The fair value of the derivative liability is based on Level 3 inputs. For this liability, the Company developed its own assumptions that do not have observable inputs or available market data to support the fair value.