Quarterly report pursuant to Section 13 or 15(d)

Note 4 - Fair Value

v3.19.2
Note 4 - Fair Value
6 Months Ended
Jun. 30, 2019
Notes to Financial Statements  
Fair Value Disclosures [Text Block]
4
.
Fair Value
 
The Company’s available-for-sale securities consist of certificates of deposit which are measured using Level
2
inputs.
 
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, 2019
and
December 31, 2018,
is included in other liabilities on the accompanying consolidated balance sheets and will continue to be measured on a recurring basis.
 
The following tables set forth, by level, financial assets and liabilities measured at fair value on a recurring basis.
 
Assets and
Liabilities Measured at Fair Value on a Recurring Basis as of
June 30
, 2019
 
Description
 
Quoted Prices in
Active Markets for Identical
Liabilities
(Level 1)
   
Significant
Other
Observable
Inputs
(Level 2)
   
Significant
Unobservable
Inputs
(Level 3)
   
Total
 
Assets:
                               
Certificates of deposit
  $
    $
200,188
    $
    $
200,188
 
Liabilities:
                               
Liability related to MT warrants
  $
    $
    $
63,000
    $
63,000
 
 
Assets and
Liabilities Measured at Fair Value on a Recurring Basis as of December 31,
2018
 
Description
 
Quoted Prices in
Active Markets for Identical
Liabilities
(Level 1)
   
Significant
Other
Observable
Inputs
(Level 2)
   
Significant
Unobservable
Inputs
(Level 3)
   
Total
 
Assets:
                               
Certificates of deposit
  $
    $
799,270
    $
    $
799,270
 
Liabilities:
                               
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
six
-month periods ended
June 30, 2019
and
2018.
There were
no
transfers in or out of our Level
1
or Level
2
liabilities during the
six
-month periods ended
June 30, 2019
or
2018.
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. There was
no
change in the estimated fair value of our Level
3
liabilities during the
six
-month periods ended
June 30, 2019
and
2018.