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SEC Filings

10-Q
LIQUIDITY SERVICES INC filed this Form 10-Q on 02/01/2018
Entire Document
 
Liquidity Services, Inc. and Subsidiaries
Notes to the Unaudited Consolidated Financial Statements — (Continued)



Restricted Share Activity
 
A summary of the Company’s restricted share activity for the three months ended December 31, 2017 and year ended September 30, 2017 is as follows:
 
 
 
Restricted
Shares
 
Weighted-
Average
Fair Value
Unvested restricted shares at September 30, 2016
 
2,661,245

 
$
9.34

Restricted shares granted
 
849,352

 
8.78

Restricted shares vested
 
(748,266
)
 
11.04

Restricted shares canceled
 
(571,900
)
 
9.81

Unvested restricted shares at September 30, 2017
 
2,190,431

 
8.42

Restricted shares granted
 
77,600

 
3.66

Restricted shares vested
 
(386,330
)
 
9.19

Restricted shares canceled
 
(280,997
)
 
10.18

Unvested restricted shares at December 31, 2017
 
1,600,704

 
7.70

 
The intrinsic value and weighted average remaining contractual life in years of unvested restricted stock units at December 31, 2017 was approximately $7.8 million and 8.37 years, respectively, based on a stock price per share of $4.85 on December 31, 2017.


8.
Fair Value Measurement
 
The Company measures and records in the accompanying consolidated financial statements certain assets and liabilities at fair value on a recurring basis. Authoritative guidance issued by the FASB establishes a fair value hierarchy for those instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company’s assumptions (unobservable inputs). The hierarchy consists of three levels:
 
Level 1
Quoted market prices in active markets for identical assets or liabilities;
Level 2
Inputs other than Level 1 inputs that are either directly or indirectly observable; and
Level 3
Unobservable inputs developed using estimates and assumptions developed by the Company, which reflect those that a market participant would use.
 
As of December 31, 2017, and September 30, 2017, the Company had no Level 1 or Level 2 assets or liabilities measured at fair value. As of December 31, 2017, and September 30, 2017, the Company had financial assets that are measured at fair value and are classified as Level 3 assets within the fair value hierarchy. The Company has elected to record the financial assets using the fair value option under ASC 825, Financial Instruments. These financial assets represent the value of rights the Company holds from its participation in certain principal transactions in the Company's commercial business, where a third-party partner owns the underlying assets to be sold, and the Company has contributed funds to the partner towards purchasing those underlying assets. These assets are included in Prepaid expenses and other current assets in the Consolidated Balance Sheets. The changes in financial assets measured at fair value for which the Company has used Level 3 inputs to determine fair value for the quarter ended December 31, 2017 are as follows ($ in thousands):
 
Level 3 Assets
 
 
Balance at September 30, 2017
$
491

Acquisition of financial assets

Settlements
(375
)
Change in fair value of financial assets
(110
)
Balance at December 31, 2017
$
6


During the three months ended December 31, 2017, the Company recognized a loss of approximately $0.1 million on its financial assets.

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