FAIR VALUE MEASUREMENT (Tables)

12 Months Ended

Dec. 31, 2012

FAIR VALUE MEASUREMENT [Abstract]

Fair values by input hierarchy of items measured at fair value on a recurring basis

The following tables summarize the fair values by input hierarchy of items measured at fair value on a recurring basis on our consolidated balance sheets (in thousands):

			Level 1		Level 2		Level 3			Total
December 31, 2012
Derivative warrant liabilities	(1	)	$	-	$	-	$	(4,520	)	$	(4,520	)
Derivative conversion liabilities	(2	)		-		-		(2,199	)		(2,199	)
Total liabilities at fair value			$	-	$	-	$	(6,719	)	$	(6,719	)
December 31, 2011
Derivative warrant liabilities	(1	)	$	-	$	-	$	(1,296	)	$	(1,296	)
Total liabilities at fair value			$	-	$	-	$	(1,296	)	$	(1,296	)

(1) These warrants are valued using the lattice model each reporting period and the resultant change in fair value is recorded in the statements of operations.  The lattice model requires us to assess the probability of future issuance of equity instruments at a price lower than the current exercise price of the warrants.  The risk-free interest rate is determined by reference to the treasury yield curve rate of instruments with the same term as the warrant.  Additional assumptions that were used to calculate fair value follow.

	December 31, 2012	December 31, 2011
Risk-free interest rate	0.1% - 0.7%	0.1% - 0.8%
	(0.6% weighted average)	(0.2% weighted average)
Expected volatility	93%	84%

(2) These conversion liabilities are valued using a lattice model each reporting period and the resultant change in fair value is recorded in the statements of operations.  The lattice model requires us to assess the probability of future issuance of equity instruments at a price lower than the current conversion price of the debt.  The risk-free interest rate is determined by reference to the treasury yield curve rate of instruments with the same term as the underlying debt.  Additional assumptions that were used to calculate fair value follow.

	December 31, 2012
Risk-free interest rate	0.2-0.3%
	(0.3% weighted average)
Expected volatility	93%

Additional assumptions used to calculate fair value

(1) These warrants are valued using the lattice model each reporting period and the resultant change in fair value is recorded in the statements of operations.  The lattice model requires us to assess the probability of future issuance of equity instruments at a price lower than the current exercise price of the warrants.  The risk-free interest rate is determined by reference to the treasury yield curve rate of instruments with the same term as the warrant.  Additional assumptions that were used to calculate fair value follow.

	December 31, 2012	December 31, 2011
Risk-free interest rate	0.1% - 0.7%	0.1% - 0.8%
	(0.6% weighted average)	(0.2% weighted average)
Expected volatility	93%	84%

(2) These conversion liabilities are valued using a lattice model each reporting period and the resultant change in fair value is recorded in the statements of operations.  The lattice model requires us to assess the probability of future issuance of equity instruments at a price lower than the current conversion price of the debt.  The risk-free interest rate is determined by reference to the treasury yield curve rate of instruments with the same term as the underlying debt.  Additional assumptions that were used to calculate fair value follow.

	December 31, 2012
Risk-free interest rate	0.2-0.3%
	(0.3% weighted average)
Expected volatility	93%

Changes in level 3 items measured at fair value

The following tables summarize the changes in level 3 items measured at fair value on a recurring basis (in thousands):

	Fair Value as of Beginning of Period			Total Realized and Unrealized Gains (Losses)		Issuance of New Instruments				Net Transfers (Into) Out of  Level 3				Fair Value, at End of Period			Change in Unrealized Gains (Losses) on Instruments Still Held
2012					(1)
Derivative warrant liability	$	(1,296	)	$	3,048	$	(6,983	)	$	711		(2	)	$	(4,520	)	$	3,320
Derivative conversion liability		-			2,372		(4,466	)		(105	)	(3	)		(2,199	)		2,372
Total Level 3 fair value	$	(1,296	)	$	5,420	$	(11,449	)	$	606				$	(6,719	)	$	5,692
2011
Derivative warrant liability	$	(1,628	)	$	332	$	-		$	-				$	(1,296	)	$	332
Total Level 3 fair value	$	(1,628	)	$	332	$	-		$	-				$	(1,296	)	$	332

(1)  Included in change in fair value of derivative warrant and conversion liabilities in our consolidated statements of operations.

(2)  Represents transfers to equity as a result of a holder exercising a warrant.

(3)  Represents an adjustment to loss on extinguishment as a result of issuing the replacement senior convertible debenture.

Summary of fair values by input hierarchy measured at fair value on a nonrecurring basis

The following tables summarize the fair values by input hierarchy of items measured at fair value in our balance sheets on a nonrecurring basis (in thousands):

											2012
			As of December 31, 2012								Impairment
			Level 1		Level 2		Level 3		Total		Losses
												(1)
Property, net	(1	)	$	-	$	-	$	1,058	$	1,058	$	1,069
Property, net			$	-	$	-	$	1,058	$	1,058	$	1,069

(1) During 2012, machinery and equipment not currently in use was evaluated for impairment and as a result was written down to estimated fair value.  Fair value is an estimate of net realizable value comprised of an estimate of proceeds from sale, based on an internal evaluation of market conditions, less estimated costs to sell.  The estimate of net realizable value is subject to change.