Imunon, Inc.IMNN

Imunon, Inc. Fair Value Disclosure

10-KFiled Mar 27, 20183 min read
4.
FAIR VALUES OF FINANCIAL INSTRUMENTS
 
FASB Accounting Standards Codification (ASC) Section
820,
Fair Value Measurements and Disclosures,
establishes a
three
-tier level hierarchy for fair value measurements which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes
three
levels of inputs that
may
be used to measure fair value:
 
Level
1:
Quoted prices (unadjusted) or identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.
 
Level
2:
Significant other observable inputs other than Level
1
prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are
not
active; or other inputs that are observable or can be corroborated by observable market data.
 
 
Level
3:
Significant unobservable inputs that reflect a reporting entity
’s own assumptions that market participants would use in pricing an asset or liability.
 
The fair values of securities available for sale are determined by obtaining quoted prices on nationally recognized exchanges (Level
1
inputs) or matrix pricing, which is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities
’ relationship to other benchmark quoted securities (Level
2
inputs).  
 
Cash and cash equivalents, other current assets, accounts payable and other accrued liabilities are reflected in the balance sheets at their estimated fair values primarily due to their short-term nature. There were
no
transfers of assets
or liabilities between Level
1
and Level
2
and
no
transfers in or out of Level
3
during
2017
or
2016.
All changes in Level
3
liabilities were the result of changes in the fair value of the earn-out milestone liability included in earnings (see Note
12
).
 
Assets and liabilities measured at fair value are summarized below:
 
 
   
Total Fair
Value on
the
Balance
Sheet
    
Quoted Prices
In Active
Markets For
Identical
Assets/Liabilities
(Level 1)
    
Significant
Other
Observable
Inputs
(Level 2)
    
Significant
Unobservable
Inputs
(Level 3)
  
Assets:
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Recurring items as of December 31, 201
7
                                
Investment securities, available for sale
   $
12,724,020
     $
12,724,020
     $ ─     $
─
  
                                 
Recurring items as of December 31, 2016
                                
Investment securities, available for sale
   $
1,680,000
     $
1,680,000
     $ ─     $
─
  
                                 
Liabilities:
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
Recurring items as of December 31, 201
7
                                
Earn-out milestone liability (Note 12)
   $
12,538,525
     $
─
     $ ─     $
12,538,525
  
                                 
Recurring items as of December 31, 2016
                                
Earn-out milestone liability (Note 12)
   $
13,188,226
     $
─
     $ ─     $
13,188,226
  

Historical Timeline

Fiscal YearFiled
2017Mar 27, 2018Showing above
2016Mar 24, 2017
2015Mar 30, 2016

About Fair Value Disclosures

Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.

Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.

Other Available Disclosures

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