Convertible Debt At Fair Value

6 Months Ended

Jun. 30, 2016

Convertible Debt At Fair Value [Abstract]

NOTE 5: CONVERTIBLE DEBT AT FAIR VALUE

As part of the Exchange Agreement entered into on March 16, 2016 with RES (see Note 8), the Company issued to RES a Convertible Promissory Note (the “Note”), bearing interest at 6.25% per annum, in the principal amount of $1,012. If the Series D Preferred Stock is outstanding, RES at its option may at any time elect to convert the Note, in whole or part, by notice delivered to the Company, into a number of shares of Series D Preferred Stock determined by dividing the principal amount of the Note to be converted by $10.00. Any time the Series D Preferred Stock is required by its terms to be converted into common stock of the Company (see Note 8), the Note will be automatically converted into the number of shares of common stock that RES would have received had RES converted this Note into Series D Preferred Stock immediately prior to the conversion of the Series D Preferred Stock. Any such conversion shall be reduced such that RES, together with its affiliates, does not beneficially own more than 49% of the voting stock of the Company and shall reduce the principal amount of the Note proportionally.

The Company has made an irrevocable election to record this Convertible Debt in its entirety at fair value utilizing the fair value option available under U.S. GAAP in order to more accurately reflect the economic value of this Note. As such, gains and losses on the Note are included in net gain (loss) on derivatives and convertible debt within net earnings each reporting period. Gains (losses) related to this Note were recognized totaling $208 and ($179) during the three and six months ended June 30, 2016, respectively. The fair value of the Note is determined using a trinomial lattice-based model, which is a generally accepted computational model typically used for pricing options. The fair value of the Note on the date of issuance was determined to be equal to its principal amount. Interest expense related to this Note is recorded separately from other changes in its fair value within interest expense each period.

The following table represents the difference between the fair value and the unpaid principal balance of the Note as of June 30, 2016:


	Fair value as of June 30, 2016		Unpaid principal balance as of June 30, 2016		Fair value carrying amount over/(under) unpaid principal
6.25% Convertible Debt	$	1,191	$	1,012	$	179