DERIVATIVES

General

We are exposed to certain risks relating to our ongoing business operations. However, derivative instruments are not used to hedge these risks. We are required to account for derivative instruments as a result of the issuance of the Warrants and Convertible Notes on August 31, 2010. None of our derivative contracts manage business risk or are executed for speculative purposes. Our Convertible Notes embedded derivative was written-off as of the Conversion Termination Date as discussed in Notes 8 and 9 above, as the remaining note holders no longer have conversion rights.

Our derivative instruments are summarized as follows:



		Fair Value
Derivative instruments not designated as hedging instruments under ASC 815	Balance Sheet Location	September 30, 2013		December 31, 2012
Warrants	Derivative liabilities	$	17,555	$	4,857
Convertible Notes embedded derivative	Derivative liabilities	—		17,173
		$	17,555	$	22,030

The following table presents the effect of derivative instruments on the accompanying condensed consolidated statements of operations for the three and nine months ended September 30, 2013, excluding income tax effects:



Derivative instruments not designated as hedging instruments under ASC 815	Location of Income/(Loss) Recognized	Three months ended September 30, 2013			Nine months ended September 30, 2013
Warrants	Derivative loss	$	(5,467	)	$	(12,698	)
Convertible Notes embedded derivative	Derivative loss	—			(13,131		)
		$	(5,467	)	$	(25,829	)

Warrant and Convertible Note volume positions are presented in the number of shares underlying the respective instruments. The table below presents our volume positions (in thousands) as of September 30, 2013 and December 31, 2012:



	Number of Shares
Derivative instruments not designated as hedging instruments under ASC 815	September 30, 2013	December 31, 2012
Warrants	3,000	3,000
Convertible Notes embedded derivative	—	5,238
	3,000	8,238

We do not have any derivative instruments with credit features requiring the posting of collateral in the event of a credit downgrade or similar credit event.