Annual report pursuant to Section 13 and 15(d)

Fair Value Measurements

v3.4.0.3
Fair Value Measurements
12 Months Ended
Mar. 31, 2016
Fair Value Measurements  
Fair Value Measurements

10. Fair Value Measurements

The FASB has established a framework for measuring fair value in generally accepted accounting principles. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy are described as follows:

Level 1.  Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets.

Level 2.  Inputs to the valuation methodology include:

·

Quoted prices for similar assets or liabilities in active markets

·

Quoted prices for identical or similar assets or liabilities in inactive markets

·

Inputs other than quoted prices that are observable for the asset or liability

·

Inputs that are derived principally from or corroborated by observable market data by correlation or other means

If the asset or liability has a specified (contractual) term, the level 2 input must be observable for substantially the full term of the asset or liability.

Level 3.  Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

The asset or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.

The table below presents our assets and liabilities that are measured at fair value on a recurring basis during Fiscal 2015 and are categorized using the fair value hierarchy (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair Value Measurements at March 31, 2016

 

 

 

 

 

 

Quoted Prices in

 

 

 

 

 

 

 

 

 

 

Active Markets for

 

Significant Other

 

Significant

 

 

 

 

 

 

for

 

Observable

 

Unobservable

 

 

 

 

 

 

Identical Assets

 

Inputs

 

Inputs

 

 

    

Total

    

(Level 1)

    

(Level 2)

    

(Level 3)

 

Cash equivalents

    

$

3,002

    

$

3,002

    

$

 —

    

$

 —

 

Restricted Cash

    

$

5,002

    

$

5,002

    

$

 

    

$

 

 

 

Cash equivalents includes cash held in money market and U.S. Treasury Funds at March 31, 2016.

The table below presents our assets and liabilities that are measured at fair value on a recurring basis during Fiscal 2015 and are categorized using the fair value hierarchy (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair Value Measurements at March 31, 2015

 

 

 

 

 

 

 

 

Quoted Prices in

 

 

 

 

 

 

 

 

 

Quoted Prices in

 

Active Markets for

 

Significant

 

 

 

 

 

 

Active Markets for

 

for

 

Unobservable

 

 

 

 

 

 

Identical Assets

 

Identical Assets

 

Inputs

 

 

    

Total

    

(Level 1)

    

(Level 2)

    

(Level 3)

 

Cash equivalents

    

$

13,737

    

$

13,737

    

$

 —

    

$

 —

 

 

Basis for Valuation

The carrying values reported in the consolidated balance sheets for cash and cash equivalents, restricted cash, accounts receivable and accounts payable approximate fair values because of the immediate or short-term maturities of these financial instruments. As the Company’s obligations under the Credit Facility are based on adjustable market interest rates, the Company has determined that the carrying value approximates the fair value. The carrying values and estimated fair values of these obligations are as follows (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of

 

As of

 

 

 

March 31, 2016

 

March 31, 2015

 

 

 

Carrying

 

Estimated

 

Carrying

 

Estimated

 

 

    

Value

    

Fair Value

    

Value

    

Fair Value

 

Obligations under the credit facility

    

$

9,459

    

$

9,459

    

$

12,953

    

$

12,953

 

 

The Company calculated the estimated fair value of warrants on the date of issuance and at each subsequent reporting date using the following assumptions:

 

 

 

 

 

    

Fiscal Year Ended

 

 

    

March 31, 2014

 

Risk-free interest rates range

 

0.1% to 0.2  %

 

Contractual term (in years)

 

0.5 years to 1.2 years

 

Expected volatility range

 

37.2% to 65.8%

 

 

The Company has issued common stock warrants at times in the past and recently issued common stock warrants in its April 2016 underwritten public offering; however, no warrants were outstanding as of March 31, 2016. The Company does not enter into speculative derivative agreements and does not enter into derivative agreements for the purpose of hedging risks.