Quarterly report pursuant to Section 13 or 15(d)

Fair Value Hierarchy

v2.4.0.8
Fair Value Hierarchy
 9 Months Ended
Sep. 30, 2013
Fair Value Disclosures [Abstract]  
Fair Value Hierarchy
Fair Value Hierarchy

Under certain circumstances, beginning in the second quarter of 2013, Platinum-Montaur Life Sciences, Inc. (Montaur) has the right to convert all or any portion of the unpaid principal or unpaid interest accrued on any future draws under the Montaur credit facility. Montaur’s option to convert future draws into common stock was determined to meet the definition of a liability and is included as part of the value of the related notes payable on the consolidated balance sheet. The estimated fair value of the Montaur notes payable is $4.6 million at September 30, 2013, and will be measured on a recurring basis. See Note 6.

In September 2013, in connection with a Securities Purchase Agreement with Crede CG III, Ltd. (Crede), we issued warrants containing certain features that, although they do not require the warrants to be settled in cash, do require the warrants to be classified as liabilities under applicable accounting rules. As a result, the Company recorded derivative liabilities with an estimated fair value of $7.7 million on the date the warrants were issued. The estimated fair value remained at $7.7 million as of September 30, 2013, and will be measured on a recurring basis. See Note 7.


The following tables set forth, by level, financial liabilities measured at fair value on a recurring basis:
 
 
Liabilities Measured at Fair Value on a Recurring Basis as of September 30, 2013
 
 
 
 
 
 
 
 
 
Description
 
Quoted Prices in Active Markets for Identical Liabilities(Level 1)
 
Significant Other Observable Inputs
(Level 2)
 
Significant Unobservable Inputs
(Level 3)
 
Balance as of September 30, 2013
Montaur notes payable
 
$
—

 
$
—

 
$
4,550,104

 
$
4,550,104

 
 
 
 
 
 
 
 
 
Derivative liabilities
   related to warrants
 
—

 
7,675,446

 
—

 
7,675,446



There were no financial assets or liabilities measured at fair value on a recurring basis as of December 31, 2012. There were no Level 1 liabilities outstanding at any time during the three-month or nine-month periods ended September 30, 2013 and 2012. There were no transfers in or out of our Level 2 liabilities during the three-month or nine-month periods ended September 30, 2013 or 2012.