Loan Credit Agreement with Related Party

12 Months Ended

Dec. 31, 2015

Debt Disclosure [Abstract]

Loan Credit Agreement with Related Party

Note 6. Loan Credit Agreement with Related Party

The Company entered into a credit facility with an affiliate of a stockholder, Carlson Capital, L.P. (“Carlson”), (collectively, the “Stockholder”) on September 6, 2013. The credit facility provided financing for the Company, primarily for the purchase of eligible investments. The facility matures on September 6, 2017, and provides that the loan shall accrue interest at the LIBOR rate plus a 6.50% margin. The average interest rate for the period the facility was outstanding during the year ended December 31, 2014 was 6.73%. The Company did not execute any draws during the year ended December 31, 2015. During the year ended December 31, 2014, the Company executed draws totaling $6.0 million. There was no outstanding balance under the loan credit agreement as of December 31, 2015 and 2014, respectively. The draw period expired on March 6, 2015 and, as a result, as of December 31, 2015, the Company has no availability remaining on the facility. In conjunction with the credit facility, the Company issued warrants to the Stockholder for 100,000 shares of the Company’s common stock at a strike price of $13.875. The warrants have a price dilution mechanism that was triggered by the price that shares were sold in the Rights Offering, and as a result, the strike price of the warrants was reduced to $13.48. In connection with the credit agreement, the Company and the Stockholder and certain of the Stockholder’s affiliates, including the lender entered into a Voting Rights Agreement restricting the Stockholder’s and such affiliates’ voting rights under certain circumstances and providing the Stockholder and such affiliates a right of first offer on certain future share issuances.

Due to certain provisions within the warrant agreement, the warrants meet the definition of a derivative and do not qualify for a scope exception as it is not considered indexed in the Company’s stock. As such, the warrants with a value of $0.3 million and $0.4 million at December 31, 2015 and 2014, respectively, are reflected as a warrant liability in the consolidated balance sheets. Unrealized losses of $0.2 million and $0.1 million were included in interest and other expense in the consolidated statements of operations for the years ended December 31, 2015 and 2014, respectively. The Company determined the fair value using the Black-Scholes option pricing model with the following assumptions:

	December 31, 2015			December 31, 2014
Dividend rate		0	%		0	%
Risk-free rate		1.8	%		1.7	%
Expected life (years)		4.7			5.7
Expected volatility		33.3	%		32.7	%

During the years ended December 31, 2015 and 2014, the Company recognized interest expense totaling $0.4 million and $0.6 million, respectively. Interest expense included $0.4 million and $0.1 million of debt issuance cost amortization for the years ended December 31, 2015 and 2014, respectively.