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Debt and Fair Value of Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2017

Aggregate Fair Value and Carrying Value of Warrant Liability and Long-Term Debt

At March 31, 2017 and December 31, 2016, the carrying value and the aggregate fair value of the Company’s warrant liability and long-term debt were as follows (in thousands):

	As of March 31, 2017				As of December 31, 2016
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Liabilities:
Warrant liability, net	$	502	$	502	$	1,210	$	1,210
Long-term debt, net	$	2,124	$	2,124	$	1,934	$	1,934

Schedule of Roll Forward of Warrant Liability Classified as Level 3 and Measured at Fair Value on a Recurring Basis

A roll forward of our warrant liability classified as Level 3 and measured at fair value on a recurring basis is as follows (in thousands):

Balance, December 31, 2016 (audited)	$	1,210
Change in fair value of warrant liability		(708	)
Balance, March 31, 2017 (unaudited)	$	502

Fair Value of Warrants Determined by Using Option Pricing Model

The warrants are not traded in an active securities market and, as such, the estimated fair value as of March 31, 2017 was determined by using an option pricing model (Black-Scholes) with the following assumptions:

	As of
	March 31, 2017
Expected term	4.42
Common stock market price	$	0.93
Risk-free interest rate		2.01	%
Expected volatility		70.8	%
Resulting fair value (per warrant)	$	0.30

Aggregate Fair Value and Carrying Value of Long-term Debt

At March 31, 2017, the aggregate fair value and the carrying value of the Company’s long-term debt was as follows (in thousands):

	As of March 31, 2017				As of December 31, 2016
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Long-term debt - related party	$	1,062	$	1,062	$	967	$	967
Long-term debt		1,062		1,062		967		967
Total long-term debt	$	2,124	$	2,124	$	1,934	$	1,934

- Definition

Tabular disclosure of warrants or rights issued. Warrants and rights outstanding are derivative securities that give the holder the right to purchase securities (usually equity) from the issuer at a specific price within a certain time frame. Warrants are often included in a new debt issue to entice investors by a higher return potential. The main difference between warrants and call options is that warrants are issued and guaranteed by the company, whereas options are exchange instruments and are not issued by the company. Also, the lifetime of a warrant is often measured in years, while the lifetime of a typical option is measured in months. Disclose the title of issue of securities called for by warrants and rights outstanding, the aggregate amount of securities called for by warrants and rights outstanding, the date from which the warrants or rights are exercisable, and the price at which the warrant or right is exercisable.

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