Convertible note payable, Net	3 Months Ended
Mar. 31, 2016
Convertible note payable, net
Convertible note payable	11. Convertible Note Payable, Net On October 27, 2015, the Company borrowed $5.0 million from Sentient, pursuant to the terms of the Sentient Note and a related loan agreement (the "Sentient Loan"), with principal and accrued interest due on October 27, 2016. To comply with security regulations and stock exchange rules in the United States and Canada, the Company received stockholder approval on January 19, 2016 to allow the Sentient Note principal and accrued interest to be converted, solely at Sentient's option, into shares of the Company's common stock at a price equal to the lowest of: 1) $0.29, 90 percent of the 15-day volume weighted average price ("VWAP") for the period immediately preceding the Loan closing date, 2) 90 percent of the 15-day VWAP for the period immediately preceding the loan conversion date, or 3) an anti-dilution adjusted price based on the lowest price for which the Company has sold its stock following the loan closing date. The loan bears interest at a rate of 9.0% per annum, compounded monthly. The beneficial conversion feature of the Sentient Note represents an embedded derivative as defined by ASC 815 "Derivatives and Hedging" ("ASC 815"). ASC 815 provides that a derivative instrument's fair value must be bifurcated from the note and separately recorded on the Company's Consolidated Balance Sheet. The Company used a third party consultant to value the embedded derivative in the Sentient Note employing a Monte Carlo type probability analysis, which falls within Level 3 of the fair value hierarchy (see Note 13). For purposes of valuing the embedded derivative as of the Sentient Loan closing date, at December 31, 2015, at February 11, 2016 (conversion date), and at March 31, 2016 the valuation model takes into account, among other items: 1) the probability of successfully achieving stockholder approval of the Sentient Notes’ conversion feature, 2) future variations in the Company’s stock price, and 3) the probability of entering into an equity transaction prior to the Sentient Loan maturity date that would lower the conversion price. It was determined that the embedded derivative had a fair value of approximately $1.1 million at October 27, 2015, the date the Company entered into the Sentient Loan. Subsequent mark-to-market changes in the value of the derivative are recorded as income or loss in the Consolidated Statements of Operations and Comprehensive Loss. The Sentient Note was recorded net of the bifurcated embedded derivative at October 27, 2015 with the $1.1 million difference between the face value and the recorded value of the note representing a loan discount that is being amortized to interest expense over the life of the loan using the effective interest method. The Company also incurred approximately $0.3 million in legal and other costs associated with the Sentient Loan. Per the guidance of ASU 2015-03 the loan costs are presented as a reduction to the note payable on the accompanying Consolidated Balance Sheets and will be amortized to interest expense over the life of the Sentient Note using the interest rate method. Because the Sentient Loan has been recorded net of the bifurcated embedded derivative and loan costs, both of which will be amortized to interest expense over the life of the loan, the effective rate of interest on the recorded loan obligation is higher than the stated nominal rate of interest. The effective interest rate on the Sentient Note is approximately 36%, compounded monthly, compared to the stated nominal rate of 9% per annum, compounded monthly. On February 11, 2016, Sentient converted approximately $3.9 million of principal and $0.1 million of accrued interest (representing the total amount of accrued interest at the conversion date) on the Sentient Note into 23,355,000 shares of the Company's common stock at an exercise price of approximately $0.172 per share, equal to 90% of the 15-day VWAP immediately preceding the conversion date (the “Conversion”). Following the Conversion, approximately $1.1 million of principal remained outstanding on the Sentient Note. If the remaining principal and additional accrued interest from February 11, 2016 is not converted into the Company's common stock, the Company would owe approximately $1.2 million to Sentient on the October 27, 2016 maturity date. The Company adjusted the recorded value of the Sentient Loan as of the Conversion date to reflect the amortization of the loan discount and loan costs, shown as interest expense in the Consolidated Statements of Operations and Comprehensive Loss. The Company then recorded a loss on debt extinguishment of $2.2 million reflecting the difference between the value of the shares issued to Sentient as a result of the Conversion and the portion of the recorded value of the Sentient Loan, including related loan costs and loan discount that was converted. The Company also determined that the value of the embedded derivative at February 11, 2016, the date of the Conversion, was $0.6 million. The mark-to-market increase in the value of the derivative, as compared to its value at December 31, 2015, was recorded as a derivative loss in the Consolidated Statements of Operations and Comprehensive Loss. Following the mark-to market adjustment, $0.5 million, reflecting the portion of the derivative value eliminated as a result of the Conversion, was offset against the loss on debt extinguishment described above, resulting in a net loss on debt extinguishment related to the Conversion of $1.7 million. The loss on debt extinguishment has been recorded as a separate line item in the Consolidated Statements of Operations and Comprehensive Loss. Following the Conversion date and through the end of the first quarter 2016 the Company recorded additional amortization of the loan costs and discount related to the remaining Sentient Loan, shown as interest expense in the Consolidated Statements of Operations and Comprehensive Loss. At March 31, 2016 approximately $41,000 of unamortized loan costs and $136,000 of unamortized loan discount remains. The remaining embedded derivative related to the Sentient Note was determined to have a fair value of $0.7 million at March 31, 2016 (see note 13), resulting in a total mark-to-market derivative loss for the first quarter 2016 of $0.6 million, recorded on a separate line in the Consolidated Statements of Operations and Comprehensive Loss.

11. Convertible Note Payable, Net

On October 27, 2015, the Company borrowed $5.0 million from Sentient, pursuant to the terms of the Sentient Note and a related loan agreement (the "Sentient Loan"), with principal and accrued interest due on October 27, 2016. To comply with security regulations and stock exchange rules in the United States and Canada, the Company received stockholder approval on January 19, 2016 to allow the Sentient Note principal and accrued interest to be converted, solely at Sentient's option, into shares of the Company's common stock at a price equal to the lowest of: 1) $0.29, 90 percent of the 15-day volume weighted average price ("VWAP") for the period immediately preceding the Loan closing date, 2) 90 percent of the 15-day VWAP for the period immediately preceding the loan conversion date, or 3) an anti-dilution adjusted price based on the lowest price for which the Company has sold its stock following the loan closing date. The loan bears interest at a rate of 9.0% per annum, compounded monthly.

The beneficial conversion feature of the Sentient Note represents an embedded derivative as defined by ASC 815 "Derivatives and Hedging" ("ASC 815"). ASC 815 provides that a derivative instrument's fair value must be bifurcated from the note and separately recorded on the Company's Consolidated Balance Sheet. The Company used a third party consultant to value the embedded derivative in the Sentient Note employing a Monte Carlo type probability analysis, which falls within Level 3 of the fair value hierarchy (see Note 13). For purposes of valuing the embedded derivative as of the Sentient Loan closing date, at December 31, 2015, at February 11, 2016 (conversion date), and at March 31, 2016 the valuation model takes into account, among other items: 1) the probability of successfully achieving stockholder approval of the Sentient Notes’ conversion feature, 2) future variations in the Company’s stock price, and 3) the probability of entering into an equity transaction prior to the Sentient Loan maturity date that would lower the conversion price. It was determined that the embedded derivative had a fair value of approximately $1.1 million at October 27, 2015, the date the Company entered into the Sentient Loan. Subsequent mark-to-market changes in the value of the derivative are recorded as income or loss in the Consolidated Statements of Operations and Comprehensive Loss. The Sentient Note was recorded net of the bifurcated embedded derivative at October 27, 2015 with the $1.1 million difference between the face value and the recorded value of the note representing a loan discount that is being amortized to interest expense over the life of the loan using the effective interest method.

The Company also incurred approximately $0.3 million in legal and other costs associated with the Sentient Loan. Per the guidance of ASU 2015-03 the loan costs are presented as a reduction to the note payable on the accompanying Consolidated Balance Sheets and will be amortized to interest expense over the life of the Sentient Note using the interest rate method.

Because the Sentient Loan has been recorded net of the bifurcated embedded derivative and loan costs, both of which will be amortized to interest expense over the life of the loan, the effective rate of interest on the recorded loan obligation is higher than the stated nominal rate of interest. The effective interest rate on the Sentient Note is approximately 36%, compounded monthly, compared to the stated nominal rate of 9% per annum, compounded monthly.

On February 11, 2016, Sentient converted approximately $3.9 million of principal and $0.1 million of accrued interest (representing the total amount of accrued interest at the conversion date) on the Sentient Note into 23,355,000 shares of the Company's common stock at an exercise price of approximately $0.172 per share, equal to 90% of the 15-day VWAP immediately preceding the conversion date (the “Conversion”). Following the Conversion, approximately $1.1 million of principal remained outstanding on the Sentient Note. If the remaining principal and additional accrued interest from February 11, 2016 is not converted into the Company's common stock, the Company would owe approximately $1.2 million to Sentient on the October 27, 2016 maturity date.

The Company adjusted the recorded value of the Sentient Loan as of the Conversion date to reflect the amortization of the loan discount and loan costs, shown as interest expense in the Consolidated Statements of Operations and Comprehensive Loss. The Company then recorded a loss on debt extinguishment of $2.2 million reflecting the difference between the value of the shares issued to Sentient as a result of the Conversion and the portion of the recorded value of the Sentient Loan, including related loan costs and loan discount that was converted. The Company also determined that the value of the embedded derivative at February 11, 2016, the date of the Conversion, was $0.6 million. The mark-to-market increase in the value of the derivative, as compared to its value at December 31, 2015, was recorded as a derivative loss in the Consolidated Statements of Operations and Comprehensive Loss. Following the mark-to market adjustment, $0.5 million, reflecting the portion of the derivative value eliminated as a result of the Conversion, was offset against the loss on debt extinguishment described above, resulting in a net loss on debt extinguishment related to the Conversion of $1.7 million. The loss on debt extinguishment has been recorded as a separate line item in the Consolidated Statements of Operations and Comprehensive Loss.

Following the Conversion date and through the end of the first quarter 2016 the Company recorded additional amortization of the loan costs and discount related to the remaining Sentient Loan, shown as interest expense in the Consolidated Statements of Operations and Comprehensive Loss. At March 31, 2016 approximately $41,000 of unamortized loan costs and $136,000 of unamortized loan discount remains.

The remaining embedded derivative related to the Sentient Note was determined to have a fair value of $0.7 million at March 31, 2016 (see note 13), resulting in a total mark-to-market derivative loss for the first quarter 2016 of $0.6 million, recorded on a separate line in the Consolidated Statements of Operations and Comprehensive Loss.