Alto Ingredients, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

8. FAIR VALUE MEASUREMENTS (Tables)

8. FAIR VALUE MEASUREMENTS (Tables)

3 Months Ended

Mar. 31, 2015

Assumptions used and related fair value for conversion feature

Significant assumptions used and related fair values for the warrants as of March 31, 2015 were as follows:

Original Issuance	Exercise Price	Volatility	Risk Free Interest Rate	Term (years)	Market Discount		Warrants Outstanding		Fair Value
09/26/2012	$8.85	54.6%	0.20%	0.49		32.0%		452,000	$	815,000
07/3/2012	$6.09	53.9%	0.56%	2.26		30.6%		211,000		855,000
12/13/2011	$8.43	54.8%	0.56%	1.71		27.3%		138,000		450,000
									$	2,120,000

Significant assumptions used and related fair values for the warrants as of December 31, 2014 were as follows:

Original Issuance	Exercise Price	Volatility	Risk Free Interest Rate	Term (years)	Market Discount		Warrants Outstanding		Fair Value
09/26/2012	$8.85	51.0%	0.19%	0.74		37.0%		473,000	$	748,000
07/3/2012	$6.09	56.1%	0.89%	2.51		32.8%		211,000		811,000
12/13/2011	$8.43	54.3%	0.67%	1.95		28.7%		138,000		427,000
									$	1,986,000

Summary of fair value measurements by level

The following table summarizes fair value measurements by level at March 31, 2015 (in thousands):

	Level 1		Level 2		Level 3		Total
Assets:
Commodity contracts⁽¹⁾	$	812	$	–	$	–	$	812
Total Assets	$	812	$	–	$	–	$	812

Liabilities:
Warrants⁽²⁾	$	–	$	–	$	2,120	$	2,120
Commodity contracts⁽³⁾		449		–		–		449
Total Liabilities	$	449	$	–	$	2,120	$	2,569

__________

(1) Included in other current assets in the consolidated balance sheets.

(2) Included in warrant liabilities at fair value in the consolidated balance sheets.

(3) Included in accrued liabilities in the consolidated balance sheets.

The following table summarizes fair value measurements by level at December 31, 2014 (in thousands):

	Level 1		Level 2		Level 3		Total
Assets:
Commodity contracts⁽¹⁾	$	1,586	$	–	$	–	$	1,586
Total Assets	$	1,586	$	–	$	–	$	1,586

Liabilities:
Warrants⁽²⁾	$	–	$	–	$	1,986	$	1,986
Commodity contracts⁽³⁾		1,149		–		–		1,149
Total Liabilities	$	1,149	$	–	$	1,986	$	3,135

__________

(1) Included in other current assets in the consolidated balance sheets.

(2) Included in warrant liabilities at fair value in the consolidated balance sheets.

(3) Included in accrued liabilities in the consolidated balance sheets.

Changes in fair value of Level 3 inputs

The changes in the Company’s fair value of its Level 3 inputs with respect to its warrants were as follows (in thousands):

Balance, December 31, 2014	$	1,986
Exercises of warrants		(39	)
Adjustments to fair value for the period		173
Balance, March 31, 2015	$	2,120

- Definition

Tabular disclosure of financial instruments measured at fair value, including those classified in shareholders' equity measured on a recurring or nonrecurring basis. Disclosures include, but are not limited to, fair value measurements recorded and the reasons for the measurements, level within the fair value hierarchy in which the fair value measurements are categorized and transfers between levels 1 and 2. Nonrecurring fair value measurements are those that are required or permitted in the statement of financial position in particular circumstances.

+ References + Details

- Definition

Tabular disclosure of the fair value measurement of liabilities using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets), and gains or losses recognized in other comprehensive income (loss) and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs) by class of liability.

+ References + Details