Note 7 - Change on Accounting Method

3 Months Ended

Mar. 31, 2018

Note 7 - Change On Accounting Method

Change on Accounting Method

Adoption of ASU 2017-11

In connection with the securities purchase agreements and debt transactions during and previous the year ended December 31, 2017, the Company issued warrants, to purchase common stock with a five-year term. Upon issuance of the warrants, the Company evaluated the note agreement to determine if the agreement contained any embedded components that would qualify the agreement as a derivative. The Company identified certain put features embedded in the warrants that potentially could result in a net cash settlement in the event of a fundamental transaction, requiring the Company to classify the warrants as a derivative liability. The Company changed its method of accounting for the debt and warrants through the early adoption of ASU 2017-11 during the three months ended March 31, 2018 on a retrospective basis. Accordingly, the Company recorded the warrant derivative and conversion option derivative liabilities to additional paid in capital upon issuance.

The following table provides a summary of the derivative liability activity as a result of the adoption of ASU 2017-11: 

	Consolidated Balance Sheet
	December 31, 2017
	Previously Reported			Revisions			Revised Report
Additional Paid in Capital	$	519,702,000		$	1,603,000		$	521,305,000
Accumulated Deficit	$	(267,896,000	)	$	(1,603,000	)	$	(269,499,000	)

	Consolidated Statement of Operations
	March 31, 2017
	Previously Reported			Revisions			Revised Report
Change in Warrant Liability	$	2,743,000		$	(2,743,000	)	$	—
Earnings Per Share	$	(12.07	)	$	(14.29	)	$	(26.36	)