Secured Debt and Convertible Notes (Tables)

6 Months Ended

Jun. 30, 2014

Inputs to Lattice Model used to Value Term Loan and 2017 Notes for which Fair Value Option was Elected

The following table sets forth the inputs to the lattice model that were used to value the Term Loan and 2017 Notes for which the fair value option was elected.  

	June 30,
	2014
Stock price	$	0.86
Conversion Rate		863.3
Conversion Price	$	1.16
Maturity date	March 15, 2017
Risk-free interest rate		0.76	%
Estimated stock volatility		80.0	%
Estimated credit spread		20.0	%

Information Pertaining to Convertible Notes

The following table sets forth information pertaining to the Term Loan and 2017 Notes which is included in the Company’s consolidated balance sheets (in thousands).

	Principal Amount of Term Loans			Principal Amount of 2017 Notes		Change in Estimated Fair Value		Total
Balance - December 31, 2013	$	-		$	-	$	-	$	-
Issuance of Term Loan		25,907			-		-		25,907
Exchange of Term Loan for 2017 Notes		(25,907	)		25,907		-		-
Non-cash paid-in-kind interest expense		-			201		-		201
Loss from change in fair value of debt		-			-		5,129		5,129
Balance - June 30, 2014	$	-		$	26,108	$	5,129	$	31,237

Changes in certain inputs into the lattice model can have a significant impact on changes in the estimated fair value of the Term Loan and 2017 Notes. For example, the estimated fair value will generally decrease with; (1) a decline in the stock price; (2) increases in the estimated stock volatility; and (3) increase in the estimated credit spread. The change in the estimated fair value of the 2017 Notes during the three and six months ended June 30, 2014 represents an unrealized loss which has been recorded as loss from change in fair value of 2017 Notes in the consolidated statements of operations.

Secured Debt Included in Consolidated Balance Sheets

The following table sets forth information pertaining to the Company’s secured debt issued to TriplePoint Capital LLC (“TriplePoint”) which is included in the Company’s consolidated balance sheets (in thousands).

	June 30,			December 31,
	2014			2013
Secured debt
TriplePoint - September 2010 Advance	$	-		$	917
TriplePoint - October 2011 Advance		-			6,657
TriplePoint - January 2012 Advance		-			3,495
TriplePoint - May 2014 Advance		970			-
Total secured debt		970			11,069
Less:
Unamortized debt discounts		(68	)		(942	)
		902			10,127
Less current portion of debt		(268	)		(788	)
Long-term portion of debt	$	634		$	9,339

2022 Notes

Information Pertaining to Convertible Notes

The following table sets forth information pertaining to the 2022 Notes which is included in the Company’s consolidated balance sheets (in thousands).

	Embedded Derivatives			Principal Amount of 2022 Notes		Debt Discount			Total
Balance - December 31, 2013	$	3,470		$	26,900	$	(15,869	)	$	14,501
Amortization of debt discount		-			-		1,199			1,199
Gain from change in fair value of embedded derivatives		(2,744	)		-		-			(2,744	)
Balance - June 30, 2014	$	726		$	26,900	$	(14,670	)	$	12,956