Quarterly report pursuant to Section 13 or 15(d)

Note 5 - Fair Value

v3.10.0.1
Note 5 - Fair Value
 6 Months Ended
Jun. 30, 2018
Notes to Financial Statements  
Fair Value Disclosures [Text Block]
5.
Fair Value
 
MT issued warrants to purchase MT Common Stock with certain characteristics including a net settlement provision that require the warrants to be accounted for as a derivative liability at fair value on the consolidated balance sheets. The estimated fair value of the MT warrants is
$
63,000
at both
June 30, 2018
and
December 31, 2017,
is included in other liabilities on the accompanying consolidated balance sheets, and will continue to be measured on a recurring basis. See Note
1
(b).
 
The following table sets forth, by level, financial liabilities measured at fair value on a recurring basis: 
 
Liabilities Measured at Fair Value on a Recurri
ng Basis as of
June 30, 2018 and December 31, 2017
  
Description
  
Quoted Prices in
Active Markets
for Identical
Liabilities
(Level 1)
    
Significant
Other
Observable
Inputs (Level 2)
    
Significant
Unobservable
Inputs (Level 3)
    
Total
  
Liability related to MT warrants
   $
—
     $
—
     $
63,000
     $
63,000
  
 
 
a.
Valuation Processes-Level
3
Measurements:
The Company utilizes
third
-party valuation services that use complex models such as Monte Carlo simulation to estimate the value of our financial liabilities.
 
 
b.
Sensitivity Analysis-Level
3
Measurements:
Changes in the valuation of MT as a whole
may
cause material changes in the fair value of the MT warrants. Significant increases (decreases) in the valuation of MT, such as
may
be the result of additional financing, could result in a higher (lower) fair value measurement. A change in the valuation of MT would
not
necessarily result in a directionally similar change in the value of the MT warrants.
 
There were
no
Level
1
or Level
2
liabilities outstanding at any time during the
three
-month and
six
-month periods ended
June 30, 2018
and
2017.
There were
no
transfers in or out of our Level
1
or Level
2
liabilities during the
three
-month and
six
-month periods ended
June 30, 2018
and
2017.
Changes in the estimated fair value of our Level
3
liabilities relating to unrealized gains (losses), if any, are recorded as changes in fair value of financial instruments in the consolidated statements of operations. The change in the estimated fair value of our Level
3
liabilities during the
three
-month periods ended
June 30, 2018
and
2017
was
$0
and a decrease of
$13,000,
respectively. The change in the estimated fair value of our Level
3
liabilities during the
six
-month periods ended
June 30, 2018
and
2017
was
$0
and a decrease of
$153,000,
respectively.