Annual report pursuant to Section 13 and 15(d)

Significant Accounting Policies (Policies)

Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2018

Nature of Operations [Policy Text Block]

Organization and Nature of Operations:

Navidea Biopharmaceuticals, Inc. (“Navidea,” the “Company,” or “we”), a Delaware Corporation (NYSE American: NAVB), is a biopharmaceutical company focused on the development and commercialization of precision immunodiagnostic agents and immunotherapeutics. Navidea is developing multiple precision-targeted products based on our Manocept™ platform to enhance patient care by identifying the sites and pathways of undetected disease and enable better diagnostic accuracy, clinical decision-making and targeted treatment.

Navidea’s Manocept platform is predicated on the ability to specifically target the

CD206

mannose receptor expressed on activated macrophages. The Manocept platform serves as the molecular backbone of

Tc99m

tilmanocept, the

first

product developed and commercialized by Navidea based on the platform.

March 3, 2017,

pursuant to an Asset Purchase Agreement dated

November 23, 2016,

the Company completed its previously announced sale to Cardinal Health

414

of its assets used, held for use, or intended to be used in operating its business of developing, manufacturing and commercializing a product used for lymphatic mapping, lymph node biopsy, and the diagnosis of metastatic spread to lymph nodes for staging of cancer, including the Company’s radioactive diagnostic agent marketed under the Lymphoseek

trademark for current approved indications by the FDA and similar indications approved by the FDA in the future, in Canada, Mexico and the United States (giving effect to the License-Back described below and excluding certain assets specifically retained by the Company). Such assets sold in the Asset Sale consist primarily of, without limitation, (i) intellectual property used in or reasonably necessary for the conduct of the Business, (ii) inventory of, and customer, distribution, and product manufacturing agreements related to, the Business, (iii) all product registrations related to the Product, including the new drug application approved by the FDA for the Product and all regulatory submissions in the United States that have been made with respect to the Product and all Health Canada regulatory submissions and, in each case, all files and records related thereto, (iv) all related clinical trials and clinical trial authorizations and all files and records related thereto, and (v) all right, title and interest in and to the Product, as specified in the Purchase Agreement. Upon closing of the Asset Sale, the Supply and Distribution Agreement, dated

November 15, 2007,

as amended, between Cardinal Health

414

and the Company was terminated and, as a result, the provisions thereof are of

further force or effect.

Our consolidated balance sheets and statements of operations have been reclassified, as required, for all periods presented to reflect the Business as a discontinued operation. Cash flows associated with the operation of the Business have been combined with operating, investing and financing cash flows, as appropriate, in our consolidated statements of cash flows.

Other than

Tc99m

tilmanocept, which the Company has a license to distribute outside of Canada, Mexico and the United States,

none

of the Company’s drug product candidates have been approved for sale in any market.

January 2015,

MT, a majority-owned subsidiary, was formed specifically to explore immuno-therapeutic applications for the Manocept platform.

July 2011,

we established a European business unit, Navidea Biopharmaceuticals Limited, to address international development and commercialization needs for our technologies, including

Tc99m

tilmanocept. Navidea owns

100%

of the outstanding shares of Navidea Biopharmaceuticals Limited.

December 2001,

we acquired Cardiosonix Ltd. (“Cardiosonix”), an Israeli company with a blood flow measurement device product line in the early stages of commercialization. In

August 2009,

the Company’s Board of Directors decided to discontinue the operations and attempt to sell Cardiosonix. However, we were obligated to continue to service and support the Cardiosonix devices through

2013.

The Company did

not

receive significant expressions of interest in the Cardiosonix business and it was legally dissolved in

September 2017.

Consolidation, Policy [Policy Text Block]

Principles of Consolidation:

Our consolidated financial statements include the accounts of Navidea and our wholly-owned subsidiaries, Navidea Biopharmaceuticals Limited and Cardiosonix Ltd, as well as those of our majority-owned subsidiary, MT. All significant inter-company accounts were eliminated in consolidation.

Use of Estimates, Policy [Policy Text Block]

Use of Estimates:

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Fair Value of Financial Instruments, Policy [Policy Text Block]

Financial Instruments and Fair Value:

In accordance with current accounting standards, the fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value, giving the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level

measurements) and the lowest priority to unobservable inputs (Level

measurements). The

three

levels of the fair value hierarchy are described below:

Level

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

Level

– Quoted prices in markets that are

not

active or financial instruments for which all significant inputs are observable, either directly or indirectly; and

Level

– Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.

A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. In determining the appropriate levels, we perform a detailed analysis of the assets and liabilities whose fair value is measured on a recurring basis. At each reporting period, all assets and liabilities for which the fair value measurement is based on significant unobservable inputs or instruments which trade infrequently and therefore have little or

price transparency are classified as Level

See Note

The following methods and assumptions were used to estimate the fair value of each class of financial instruments:

(

)

Cash

and cash equivalents

available-for-sale securities,

accounts and other receivables,

and

accounts payable:

The carrying amounts approximate fair value because of the short maturity of these instruments.

(

)

Notes payable:

The carrying value of our debt at

December 31, 2018

and

2017

primarily consisted of the face amount of the notes plus accrued interest. At

December 31, 2018,

the fair value of our notes payable was approximately

$316,000,

equal to the carrying value of

$316,000.

December 31, 2017,

the fair value of our notes payable was approximately

$2.4

million, equal to the carrying value of

$2.4

million. See Notes

and

12.

(

)

Derivative liabilities:

Derivative liabilities are related to certain outstanding warrants which are recorded at fair value. Derivative liabilities totaling

$63,000

as of

December 31, 2018

and

2017

were included in other liabilities on the consolidated balance sheets. The assumptions used to calculate fair value as of

December 31, 2018

and

2017

included volatility, a risk-free rate and expected dividends. In addition, we considered non-performance risk and determined that such risk is minimal. Unrealized gains and losses on the derivatives are classified in other expenses as a change in the fair value of financial instruments in the statements of operations. See Note

(

)

Warrants:

March 2017,

in connection with the Asset Sale, the Company granted to each of Cardinal Health

414

and UCSD, a

five

-year warrant to purchase up to

million shares and

million shares, respectively, of the Company’s common stock at an exercise price of

$1.50

per share, each of which warrant is subject to anti-dilution and other customary terms and conditions (the “Series NN warrants”). The assumptions used to calculate fair value at the date of issuance included volatility, a risk-free rate and expected dividends. The Series NN warrants granted to Cardinal Health

414

had an estimated fair value of

$3.3

million, which was recorded as a reduction of the gain on sale in the consolidated statement of operations for the year ended

December 31, 2017.

The Series NN warrants granted to UCSD had an estimated fair value of

$334,000,

which was recorded as an intangible asset related to the UCSD license in the consolidated balance sheet at the time of issuance. See Note

(b).

Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block]

Stock-Based Compensation:

December 31, 2018,

we had instruments outstanding under

two

stock-based compensation plans; the Fourth Amended and Restated

2002

Stock Incentive Plan (the

“2002

Plan”) and the Amended and Restated

2014

Stock Incentive Plan (the

“2014

Plan”). Currently, under the

2014

Plan, we

may

grant incentive stock options, nonqualified stock options, and restricted stock awards to full-time employees and directors, and nonqualified stock options and restricted stock awards

may

be granted to our consultants and agents. Total shares authorized under each plan are

million shares and

million shares, respectively. Although instruments are still outstanding under the

2002

Plan, the plan has expired and

new grants

may

be made from it. Under both plans, the exercise price of each option is greater than or equal to the closing market price of our common stock on the date of the grant.

Stock options granted under the

2002

Plan and the

2014

Plan generally vest on an annual basis over

one

four

years. Outstanding stock options under the plans, if

not

exercised, generally expire

ten

years from their date of grant or up to

days following the date of an optionee’s separation from employment with the Company. We issue new shares of our common stock upon exercise of stock options.

Stock-based payments to employees and directors, including grants of stock options, are recognized in the consolidated statement of operations based on their estimated fair values. The fair value of each stock option award is estimated on the date of grant using the Black-Scholes option pricing model. Expected volatilities are based on the Company’s historical volatility, which management believes represents the most accurate basis for estimating expected future volatility under the current circumstances. Navidea uses historical data to estimate forfeiture rates. The expected term of stock options granted is based on the vesting period and the contractual life of the options. The risk-free rate is based on the U.S. Treasury yield in effect at the time of the grant. The assumptions used to calculate the fair value of stock option awards granted during the years ended

December 31, 2018

and

2017

are noted in the following table:

	2018			2017
Expected volatility	64%	-	76%	66%	-	79%
Weighted-average volatility	69%			75%
Expected dividends	—			—
Expected term (in years)	5.5	-	6.0	5.0	-	6.0
Risk-free rate	2.6%	-	2.7%	1.8%	-	2.1%

The portion of the fair value of stock-based awards that is ultimately expected to vest is recognized as compensation expense over either (

) the requisite service period or (

) the estimated performance period. Restricted stock awards are valued based on the closing stock price on the date of grant and amortized ratably over the estimated life of the award. Restricted stock

may

vest based on the passage of time, or upon occurrence of a specific event or achievement of goals as defined in the grant agreements. In such cases, we record compensation expense related to grants of restricted stock based on management’s estimates of the probable dates of the vesting events. Stock-based awards that do

not

vest because the requisite service period is

not

met prior to termination result in reversal of previously recognized compensation cost. See Note

Cash and Cash Equivalents, Policy [Policy Text Block]

Cash and Cash Equivalents:

Cash equivalents are highly liquid instruments such as U.S. Treasury bills, bank certificates of deposit, corporate commercial paper and money market funds which have maturities of less than

three

months from the date of purchase.

Investment, Policy [Policy Text Block]

Available-for-Sale Securities:

Available-for-sale securities are liquid instruments such as U.S. Treasury bills, bank certificates of deposit, corporate commercial paper and money market funds which have maturities of

three

months or more from the date of purchase.

Receivables, Policy [Policy Text Block]

Accounts

and Other

Receivable

Accounts and other receivables are recorded net of an allowance for doubtful accounts. We estimate an allowance for doubtful accounts based on a review and assessment of specific accounts and other receivables and write off accounts against the allowance account when deemed uncollectible. See Note

Property, Plant and Equipment, Policy [Policy Text Block]

Property and Equipment:

Property and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation is generally computed using the straight-line method over the estimated useful lives of the depreciable assets. Depreciation and amortization related to equipment under capital leases and leasehold improvements is recognized over the shorter of the estimated useful life of the leased asset or the term of the lease. Maintenance and repairs are charged to expense as incurred, while renewals and improvements are capitalized. See Note

Intangible Assets, Finite-Lived, Policy [Policy Text Block]

Intangible Assets:

Intangible assets consist primarily of license agreements. Intangible assets are stated at cost, less accumulated amortization. License agreements and patent costs are amortized using the straight-line method over the estimated useful lives of the license agreements and patents of approximately

years. Patent application costs are deferred pending the outcome of patent applications. Costs associated with unsuccessful patent applications and abandoned intellectual property are expensed when determined to have

recoverable value. We evaluate the potential alternative uses of all intangible assets, as well as the recoverability of the carrying values of intangible assets, on a recurring basis.

Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block]

Impairment or Disposal of Long-Lived Assets:

Long-lived assets and certain identifiable intangibles are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset

may

not

be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets.

impairment was recognized during the years ended

December 31, 2018

2017.

Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.

Lessee, Leases [Policy Text Block]

Leases:

Leases are categorized as either operating or capital leases at inception. Operating lease costs are recognized on a straight-line basis over the term of the lease. An asset and a corresponding liability for the capital lease obligation are established for the cost of capital leases. The capital lease obligation is amortized over the life of the lease. See Note

14.

Derivatives, Policy [Policy Text Block]

Derivative Instruments:

Derivative instruments embedded in contracts, to the extent

not

already a free-standing contract, are bifurcated from the debt instrument and accounted for separately. All derivatives are recorded on the consolidated balance sheet at fair value in accordance with current accounting guidelines for such complex financial instruments. Derivative liabilities with expiration dates within

one

year are classified as current, while those with expiration dates in more than

one

year are classified as long term. We do

not

use derivative instruments for hedging of market risks or for trading or speculative purposes.

Revenue Recognition, Policy [Policy Text Block]

Revenue Recognition:

We currently generate revenue primarily from grants to support various product development initiatives. We generally recognize grant revenue when expenses reimbursable under the grants have been paid and payments under the grants become contractually due.

We also earn revenues related to our licensing and distribution agreements. The consideration we are eligible to receive under our licensing and distribution agreements typically includes upfront payments, reimbursement for research and development costs, milestone payments, and royalties. Each licensing and distribution agreement is unique and requires separate assessment in accordance with current accounting standards. See Note

Research and Development Expense, Policy [Policy Text Block]

Research and Development Costs:

Research and development (“R&D”) expenses include both internal R&D activities and external contracted services. Internal R&D activity expenses include salaries, benefits, and stock-based compensation, as well as travel, supplies, and other costs to support our R&D staff. External contracted services include clinical trial activities, manufacturing and control-related activities, and regulatory costs. R&D expenses are charged to operations as incurred. We review and accrue R&D expenses based on services performed and rely upon estimates of those costs applicable to the stage of completion of each project.

Income Tax, Policy [Policy Text Block]

Income Taxes:

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Due to the uncertainty surrounding the realization of the deferred tax assets in future tax returns, all of the deferred tax assets have been fully offset by a valuation allowance at

December 31, 2018

and

2017.

Current accounting standards include guidance on the accounting for uncertainty in income taxes recognized in the financial statements. Such standards also prescribe a recognition threshold and measurement model for the financial statement recognition of a tax position taken, or expected to be taken, and provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company believes that the ultimate deductibility of all tax positions is highly certain, although there is uncertainty about the timing of such deductibility. As a result,

liability for uncertain tax positions was recorded as of

December 31, 2018

2017

and we do

not

expect any significant changes in the next

twelve

months. Should we need to accrue interest or penalties on uncertain tax positions, we would recognize the interest as interest expense and the penalties as a selling, general and administrative expense. As of

December 31, 2018,

tax years

2015

2018

remained subject to examination by federal and state tax authorities. See Note

17.

New Accounting Pronouncements, Policy [Policy Text Block]

Recently Adopted Accounting Standards:

May 2014,

the Financial Accounting Standards Board (“FASB”) issued ASU

2014

09,

Revenue from Contracts with Customers (Topic

606

)

, which supersedes existing revenue recognition guidance under U.S. GAAP. The core principle of ASU

2014

is that a company should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. ASU

2014

defines a

five

-step process that requires companies to exercise more judgment and make more estimates than under the previous guidance. These

may

include identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price, and allocating the transaction price to each separate performance obligation. Since the issuance of ASU

2014

09,

several additional ASUs have been issued and incorporated within Topic

606

to clarify various elements of the guidance. We adopted ASU

2014

09,

along with additional related ASUs

2016

08,

2016

10,

2016

and

2016

20,

effective

January 1, 2018,

using the modified retrospective method of adoption. The adoption of ASU

2014

and related ASUs resulted in increases in deferred revenue and a corresponding offset to accumulated deficit of

700,000

See Note

November 2016,

the FASB issued ASU

No.

2016

18,

Statement of Cash Flows – Restricted Cash

. ASU

2016

requires that the statement of cash flows explain the change during the period in the total of cash, cash equivalents, and restricted cash or equivalents. Therefore, restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. ASU

2016

is effective for public business entities for fiscal years beginning after

December 15, 2017,

and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. If an entity early adopts ASU

2016

in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes the interim period. We adopted ASU

2016

effective

January 1, 2018.

The adoption of ASU

2016

resulted in reclassification of

$5.0

million of restricted cash in the consolidated statement of cash flows for the year ended

December 31, 2017.

January 2017,

the FASB issued ASU

No.

2017

01,

Business Combinations (Topic

805

), Clarifying the Definition of a Business

. ASU

2017

provides a screen to determine when a set of assets and activities (collectively, a “set”) is

not

a business. The screen requires that when substantially all of the fair market value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is

not

a business. If the screen is

not

met, ASU

2017

(

) requires that to be considered a business, a set must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create output, and (

) removes the evaluation of whether a market participant could replace missing elements. ASU

2017

is effective for public business entities for annual periods beginning after

December 15, 2017,

including interim periods within those periods. ASU

2017

should be applied prospectively on or after the effective date.

disclosures are required at transition. Early adoption is permitted for certain transactions as described in ASU

2017

01.

We adopted ASU

2017

effective

January 1, 2018.

The adoption of ASU

2017

did

not

have a material effect on our consolidated financial statements.

May 2017,

the FASB issued ASU

No.

2017

09,

Compensation-Stock Compensation (Topic

718

), Scope of Modification Accounting

. ASU

2017

provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. An entity should account for the effects of a modification unless all of the following criteria are met: (

) The fair value of the modified award is the same as the fair value of the original award immediately before the original award is modified. If the modification does

not

affect any of the inputs to the valuation technique that the entity uses to value the award, the entity is

not

required to estimate the value immediately before and after the modification. (

) The vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified. (

) The classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified. Disclosure requirements remain unchanged. ASU

2017

is effective for all entities for annual periods, and interim periods within those annual periods, beginning after

December 15, 2017.

Early adoption is permitted as described in ASU

2017

09.

We adopted ASU

2017

effective

January 1, 2018.

The adoption of ASU

2017

did

not

have a material effect on our consolidated financial statements.

March 2018,

the FASB issued ASU

No.

2018

05,

Income Taxes (Topic

740

) – Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin

No.

118

. ASU

2018

amends Accounting Standards Codification (“ASC”) Topic

740

to provide guidance on accounting for the tax effects of the Tax Cuts and Jobs Act (the “Tax Act”) pursuant to Staff Accounting Bulletin

No.

118.

ASU

2018

addresses situations where the accounting under ASC Topic

740

is incomplete for certain income tax effects of the Tax Act upon issuance of the entity’s financial statements for the reporting period in which the Tax Act was enacted. The adoption of ASU

2018

March 2018

did

not

have a material effect on our consolidated financial statements.

Recent

ly Issued

Accounting

Standards

February 2016,

the FASB issued ASU

No.

2016

02,

Leases (Topic

842

)

. ASU

2016

requires the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous U.S. GAAP. The core principle of Topic

842

is that a lessee should recognize the assets and liabilities that arise from leases. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. ASU

2016

is effective for public business entities for fiscal years beginning after

December 15, 2018,

including interim periods within those fiscal years. Early adoption is permitted. We have completed our assessment of the impact of adopting ASU

2016

02,

and expect the adoption of ASU

2016

to result in an increase in right-of-use assets and related liabilities of approximately

286,000

on our balance sheet related to our leases that are currently classified as operating leases, primarily for office space.

June 2018,

the FASB issued ASU

No.

2018

07,

Compensation—Stock Compensation (Topic

718

) – Improvements to Nonemployee Share-Based Payment Accounting

. ASU

2018

expands the scope of Topic

718

to include share-based payment transactions for acquiring goods and services from nonemployees. An entity should apply the requirements of Topic

718

to nonemployee awards except for specific guidance on inputs to an option pricing model and the attribution of cost. ASU

2018

specifies that Topic

718

applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards, and that Topic

718

does

not

apply to share-based payments used to effectively provide (

) financing to the issuer or (

) awards granted in conjunction with selling goods or services to customers as part of a contract accounted for under Topic

606,

Revenue from Contracts with Customers

. ASU

2018

is effective for public business entities for fiscal years beginning after

December 15, 2018,

including interim periods within that fiscal year. The adoption of ASU

2018

not

expected to have a significant impact on our consolidated financial statements.

July 2018,

the FASB issued ASU

No.

2018

09,

Codification Improvements

. ASU

2018

updates a variety of topics in order to clarify, correct errors, or make minor improvements to the Codification, making it easier to understand and easier to apply by eliminating inconsistencies and providing clarifications. Certain amendments in ASU

2018

are effective upon issuance, others are effective for annual periods beginning after

December 15, 2018

for public business entities, and some have been made to recently issued guidance and will be subject to the effective dates within the relevant guidance. The adoption of ASU

2018

not

expected to have a significant impact on our consolidated financial statements.

Also in

July 2018,

the FASB issued ASU

No.

2018

10,

Codification Improvements to Topic

842,

Leases

, and ASU

No.

2018

11,

Targeted Improvements to Topic

842,

Leases

. ASU

2018

updates Topic

842

in order to clarify narrow aspects of the guidance issued in ASU

2016

02,

Leases (Topic

842

)

. ASU

2018

provides entities with an additional (and optional) transition method to adopt the new leases standard. Under this new transition method, an entity initially applies the new leases standard at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. Consequently, an entity’s reporting for the comparative periods presented in the financial statements in which it adopts the new leases standard will continue to be in accordance with current GAAP (Topic

840,

Leases

). An entity that elects this transition method must prove the required Topic

840

disclosures for all periods that continue to be in accordance with Topic

840.

The amendments in ASU

2018

and ASU

2018

are effective when ASU

2016

is effective, for fiscal years beginning after

December 15, 2018.

We do

not

expect the adoption of ASU

2018

and ASU

2018

to have a significant impact on our consolidated financial statements.

August 2018,

the FASB issued ASU

No.

2018

13,

Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement

. ASU

2018

modifies the disclosure requirements on fair value measurements in Topic

280,

Fair Value Measurement, including the consideration of costs and benefits. ASU

2018

removes the requirements to disclose (

) the amount of and reasons for transfers between Level

and Level

of the fair value hierarchy, (

) the policy for timing of transfers between levels, (

) the valuation processes for Level

fair value measurements, and (

) for nonpublic entities, the changes in unrealized gains and losses for the period included in earnings for recurring Level

fair value measurements held at the end of the reporting period. ASU

2018

also modifies certain disclosure requirements as follows: (

) in lieu of a rollforward for Level

fair value measurements, a nonpublic entity is required to disclose transfers into and out of Level

and purchase and issuances of Level

assets and liabilities, (

) for investments in certain entities that calculate net asset value, an entity is required to disclose the timing of liquidation of an investee’s assets and the date when restrictions from redemption might lapse only if the investee has communicated the timing to the entity or announced the timing publicly, and (

) the amendments clarify that the measurement uncertainty disclosure is to communicate information about the uncertainty in measurement as of the reporting date. Finally, ASU

2018

adds the requirements to disclose (

) the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level

fair value measurements held at the end of the reporting period, and (

) the range and weighted average of significant unobservable inputs used to develop Level

fair value measurements. The amendments in ASU

2018

are effective for fiscal years, and interim periods within those fiscal years, beginning after

December 15, 2019.

We do

not

expect the adoption of ASU

2018

to have any impact on our consolidated financial statements, however it

may

have an impact on our fair value disclosures.