Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2016

Company's Financial Assets and Liability Measured at Fair Value on a Recurring Basis

The following fair value hierarchy table presents information about each major category of the Company’s financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2016 and 2015:



	December 31, 2016
($ in thousands)	Level 1		Level 2		Level 3		Total
Assets:
Cash and cash equivalents	$	17,515	$	—	$	—	$	17,515
Total Assets	$	17,515	$	—	$	—	$	17,515
Liabilities:
Warrant liability	$	—	$	—	$	6,034	$	6,034
Derivative liability	—		—		1,735		1,735
Total Liabilities	$	—	$	—	$	7,769	$	7,769



	December 31, 2015
($ in thousands)	Level 1		Level 2		Level 3		Total
Assets:
Cash and cash equivalents	$	29,268	$	—	$	—	$	29,268
Total Assets	$	29,268	$	—	$	—	$	29,268
Liabilities:
Warrant liability	$	—	$	—	$	8,275	$	8,275
Derivative liability	—		—		—		—
Total Liabilities	$	—	$	—	$	8,275	$	8,275

Reconciliation of Warrant Liability Measured at Fair Value on Recurring Basis

The reconciliation of the Company's 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, 2014	$	11,286
Exercise of warrants ⁽¹⁾	(82		)
Expiration of warrants ⁽²⁾	(276		)
Change in fair value of warrant liability	(2,653		)
Balance at December 31, 2015	$	8,275
Issuance of warrants ⁽³⁾	9,643
Expiration of warrants ⁽²⁾	(1,910		)
Change in fair value of warrant liability	(9,974		)
Balance at December 31, 2016	$	6,034

(1)

Warrants were exercised under the cashless exercise method pursuant to the corresponding warrant agreements. As a result of such exercises, the Company issued 11,584 shares of common stock. Consequently, these instruments were no longer classified as liabilities. These common stock warrants were remeasured to their fair value as of the exercise date with the change in fair value recorded to the Company's Consolidated Statement of Operations. The fair value related to the shares issued in connection with the exercised warrants was reclassified from a liability to additional paid-in capital in the Company's Consolidated Balance Sheets.


(2)	Represents the fair value as of the beginning of the year for warrants expiring during the year and has been recorded to warrant revaluation income in the Company's Consolidated Statement of Operations for the respective year end.


(3)	Represents the fair value of warrants on the issuance date.

The reconciliation of the derivative liability measured at fair value on a recurring basis using unobservable inputs

(Level 3) was as follows:



($ in thousands)	Derivative Liability
Balance at December 31, 2015	$	—
Issuance of convertible notes ⁽¹⁾	1,273
Change in fair value of derivative liability	462
Balance at December 31, 2016	$	1,735


(1)	Represents fair value of embedded derivatives on the issuance date.

- Definition

Tabular disclosure of financial instruments measured at fair value, including those classified in shareholders' equity measured on a recurring or nonrecurring basis. Disclosures include, but are not limited to, fair value measurements recorded and the reasons for the measurements, level within the fair value hierarchy in which the fair value measurements are categorized and transfers between levels 1 and 2. Nonrecurring fair value measurements are those that are required or permitted in the statement of financial position in particular circumstances.

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