PIPE TRANSACTION (Tables)

9 Months Ended

Sep. 30, 2015

Equity and Temporary Equity Disclosure [Abstract]

Schedule of allocation of proceeds from the Purchase Agreement based on relative fair values

The proceeds from the Purchase Agreement were allocated among the instruments based on their relative fair values as follows (in thousands):



	Relative Fair Value Allocation
Financial instruments:	March 9, 2015
Series A Preferred Stock ¹	$	59,355
PIPE Warrants ²	3,145
Total Investment	$	62,500

¹ The fair value of the Series A Preferred Stock was determined using a binomial lattice model using the following assumptions: volatility of 55%, risk-free rate of 0.92%, and a dividend rate of 11.5%. The model also utilized various assumptions about the time to maturity and conditions under which conversion features would be exercised.

² The fair value of the PIPE Warrants was determined using the Black Scholes model using the following assumptions: volatility of 55%, risk-free rate of 0.92%, and stated exercise prices. The model also utilized various assumptions about the time to maturity and conditions under which exercise would occur.

Carrying value of Series A Preferred Stock

The following sets forth the initial carrying value of the Series A Preferred Stock which is classified as temporary equity (mezzanine equity) on the Consolidated Balance Sheet (in thousands):



	Carrying Value
Series A Preferred Stock:	March 9, 2015
Issuance date liquidation preference	$	62,500
Discount related to warrant value ¹	(3,145		)
Discount related to beneficial conversion feature ²	(3,145		)
Discount related to issuance costs ³	(3,830		)
Initial carrying value of Series A Preferred Stock	$	52,380

¹The discount related to the PIPE Warrants represents the difference between the redemption value of the Series A Preferred Stock and its allocated proceeds. The discount is accreted over the period from issuance to first available redemption and are presented as a deemed dividend on the Statement of Operations.

² The value assigned to the Beneficial Conversion Feature (BCF) reflects the difference between the initial fair value assigned to the Series A Preferred Stock and the conversion value. The BCF value is accreted over the period from issuance date to first date conversion to common shares may take place and is presented as a deemed dividend on the Statement of Operations.

³ The Company incurred issuance costs of $4.0 million associated with the PIPE Transaction. The issuance costs were allocated to the Series A Preferred Stock and PIPE Warrants based on the relative fair value of each instrument or $3.8 million and $0.2 million, respectively. The issuance costs are accreted over the period from issuance to first available redemption and are presented as a deemed dividend on the Statement of Operations.

The following table sets forth the activity recorded during the nine months ended September 30, 2015 related to the Series A Preferred Stock (in thousands).



Series A Preferred Stock carrying value at issuance	$	52,902
Accretion of discount related to issuance costs	109
Accretion of discount related to warrant value	96
Accretion of discount related to beneficial conversion feature	3,519
Dividends recorded through September 30, 2015¹	4,157
Series A Preferred Stock carrying value September 30, 2015	$	60,783

¹Dividends recorded reflect the increase in the Liquidation Preference associated with unpaid dividends.

Carrying value of 2015 Warrants

The following sets forth the carrying value of the PIPE Warrants which is classified as equity on the Consolidated Balance Sheet (in thousands):



	Carrying Value
PIPE Warrants	March 9, 2015
Fair value allocated to PIPE Warrants	$	3,145
Discount related to issuance costs ¹	(203		)
Carrying value of PIPE Warrants	$	2,942

¹The Company incurred issuance costs of $4.0 million associated with the PIPE Transaction. The issuance costs were allocated to the Series A Preferred Stock and PIPE Warrants based on the relative fair value of each instrument or $3.8 million and $0.2 million, respectively.

- Definition

Tabular disclosure of warrants or rights issued. Warrants and rights outstanding are derivative securities that give the holder the right to purchase securities (usually equity) from the issuer at a specific price within a certain time frame. Warrants are often included in a new debt issue to entice investors by a higher return potential. The main difference between warrants and call options is that warrants are issued and guaranteed by the company, whereas options are exchange instruments and are not issued by the company. Also, the lifetime of a warrant is often measured in years, while the lifetime of a typical option is measured in months. Disclose the title of issue of securities called for by warrants and rights outstanding, the aggregate amount of securities called for by warrants and rights outstanding, the date from which the warrants or rights are exercisable, and the price at which the warrant or right is exercisable.

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