Note 3 - Fair Value Measurements

3 Months Ended

Mar. 31, 2017

Notes to Financial Statements

Fair Value Disclosures [Text Block]

NOTE

3.

FAIR VALUE MEASUREMENTS

The Company measures the fair value of financial assets and liabilities based on authoritative guidance which defines fair value, establishes a framework consisting of

three

levels for measuring fair value, and requires disclosures about fair value measurements. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

The Company’s warrant liability is classified within Level

3

of the fair value hierarchy because the value is calculated using significant judgment based on the Company’s own assumptions in the valuation of this liability.

The following table presents the Company’s assets and liabilities measured at fair value on a recurring basis as of

March

31,

2017:

	Fair Value Measurements Using
(in thousands)	Balance at March 31, 2017		Quoted Prices in Active Markets for Identical Items (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets
Cash equivalents	$	100	$	100	$	—	$	—
Restricted cash held as a certificate of deposit		324		324		—		—
Deposit held as a certificate of deposit		150		150		—		—
Total assets	$	574	$	574	$	—	$	—
Liabilities
Warrant liability	$	1,681	$	—	$	—	$	1,681
Total liabilities	$	1,681	$	—	$	—	$	1,681

The following table presents the Company’s assets and liabilities measured at fair value on a recurring basis as of

December

31,

2016:

	Fair Value Measurements Using
(in thousands)	Balance at December 31, 2016		Quoted Prices in Active Markets for Identical Items (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets
Cash equivalents	$	100	$	100	$	—	$	—
Restricted cash held as a certificate of deposit		324		324		—		—
Deposit held as a certificate of deposit		150		150		—		—
Total assets	$	574	$	574	$	—	$	—
Liabilities
Warrant liability	$	1,446	$	—	$	—	$	1,446
Total liabilities	$	1,446	$	—	$	—	$	1,446

For the

three

-month period ended

March

31,

2017,

as a result of the fair value adjustment of the warrant liability, the Company recorded a non-cash expense on an increase in the fair value of the warrants of

$235

thousand, in its consolidated statement of operations and comprehensive loss. See Note

10

for further discussion of the calculation of the fair value of the warrant liability.

(in thousands)	Warrant liability
Fair value of warrant liability at December 31, 2016	$	1,446
Increase in fair value at March 31, 2017		235
Fair value of warrant liability at March 31, 2017	$	1,681