FAIR VALUE Fair Value (Tables)

9 Months Ended

Sep. 30, 2014

Fair Value, Estimate Not Practicable [Table Text Block]

As described elsewhere in this Form 10-Q, during the three and nine months ended September 30, 2014, we issued certain redeemable preferred convertible stock, repurchased certain common stock and issued certain common stock warrants in connection with the restructure of the NW Capital convertible debt and other transactions described elsewhere in this Form 10-Q. In order to estimate the fair value of the securities subject to these transactions pursuant to applicable accounting standards, we utilized the transaction price as negotiated with unrelated third-parties, along with other information provided by an independent third-party valuation firm incorporating financial and other information, including prospective financial information, provided by us, as well as information obtained from various public, financial, and industry sources. Based on this analysis, management estimated the fair value of the equity securities issued or granted in connection with transaction completed July 24, 2014 as follows:



Subject Securities		Estimated Fair Value per Share
Preferred Stock		3.22
Common Stock		1.72
ITH Warrants		1.19
Juniper Warrants		1.14
Options to former CEO		1.19

Fair Value Inputs, Instruments Classified in Shareholders' Equity, Quantitative Information [Table Text Block]

Stock-based compensation expense for stock-based awards granted is based on the grant date fair value. For stock option and warrant awards, the fair value was estimated at the date of grant using the Black-Scholes option-pricing model based on the exercise price of the award and other assumptions relating to expected dividend yield, expected stock price volatility, risk-free interest rate, and expected life of options granted which are as follows:



Expected stock price volatility		79%
Risk-free interest rate		2%
Expected life of options/warrants		5 years
Expected dividend yield		—%
Discount for lack of marketability		35%