Note 2 - Long-term Debt

6 Months Ended

Jun. 30, 2019

Notes to Financial Statements

Debt Disclosure [Text Block]

N

OTE

2

–

LONG-TERM

DEBT

The carrying value of the Company’s Senior Secured Debt approximates fair value. The fair value of the Company’s Senior Secured Debt (Level

2

) is determined based on an estimation of discounted future cash flows of the debt at rates currently quoted or offered to the Company by its lenders for similar debt instruments of comparable maturities by its lenders.

The fair value of the Company's convertible debt exceeds its carrying value of approximately

$69.1

million, which includes accreted interest, by approximately

$48.1

million due to the value of its conversion feature.  The conversion feature's fair value increases as the Company's common stock price increases. The fair value of the conversion feature (Level

3

) is determined using the Black-Scholes model.  Significant inputs to the model were the conversion price (

$6.75

), the number of shares of common stock that could be acquired upon conversion as of

June 30, 2019,

the Company's stock price as of

June 30, 2019

of

$11.25

and stock volatility of

44%,

which was determined using our publicly-traded stock price over the last year.