Quarterly report pursuant to Section 13 or 15(d)

Fair Value Measurements

v3.10.0.1
Fair Value Measurements
9 Months Ended
Sep. 30, 2018
Fair Value Disclosures [Abstract]  
Fair Value Measurements Fair Value Measurements
Financial instruments consist of cash and cash equivalents, accounts receivable, security deposits, accounts payable and derivative instruments. These financial instruments are stated at their respective historical carrying amounts, which approximate fair value due to their short term nature.

The value of Senior Convertible Notes and the Term Loan is stated at carrying value at September 30, 2018. The Company determined that it is probable that it may not be in compliance with certain debt covenants in the near term, and as a result classified debt as a current liability. Due to the short-term nature of the expected term of the Senior Convertible Notes and the Term Loan, the carrying value approximates fair value.
The following table presents the Company’s liabilities that are measured and recognized at fair value on a recurring basis classified under the appropriate level of the fair value hierarchy as of December 31, 2017 and September 30, 2018:

($ in thousands)
Description  Quoted Prices
in
Active
Markets
for Identical
Assets and
Liabilities
(Level 1) 
Significant
Other
Observable
Inputs
(Level 2) 
Significant
Unobservable
Inputs
(Level 3) 
Balance as of
December 31, 2017 
Quoted Prices
in
Active
Markets
for Identical
Assets and
Liabilities
(Level 1) 
Significant
Other
Observable
Inputs
(Level 2) 
Significant
Unobservable
Inputs
(Level 3) 
Balance as of
September 30, 2018 
Derivative liabilities related to Warrants  $ —  $ —  $ 17,582  $ 17,582  $ —  $ —  $ 9,767  $ 9,767 

The following table sets forth a summary of changes in the fair value of the Company’s Level 3 liabilities for the nine months ended September 30, 2018:

($ in thousands)
Description  Balance as of
December 31, 2017 
(Gain) or loss
recognized in
earnings from
Change in Fair
Value 
Expiration of
warrants 
Balance as of
September 30, 2018
Derivative liabilities related to Warrants  $ 17,582  $ (7,815) $ —  $ 9,767 

The unrealized gains or losses on the derivative liabilities are recorded as a change in fair value of derivative liabilities in the Company’s condensed consolidated statement of operations. 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. At each reporting period, Synergy reviews the assets and liabilities that are subject to ASC Topic 815-40. 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 no price transparency are classified as Level 3.