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8. FAIR VALUE MEASUREMENTS (Tables)

6 Months Ended

Jun. 30, 2014

Fair Value Disclosures [Abstract]

Assumptions used and related fair value for conversion feature

Significant assumptions used and related fair values for the Company’s warrants as of June 30, 2014 were as follows:

Original Issuance		Exercise Price		Volatility		Risk-Free Interest Rate		Term (years)		Discount for marketability restrictions				Warrants Outstanding				Fair Value
06/21/2013		$7.59		52.6%		0.11%		0.99			20.6%				1,051,200			$	6,636,500
03/28/2013		$7.59		55.1%		0.09%		0.70			18.7%				295,700				1,891,800
09/26/2012		$8.85		52.0%		0.11%		1.24			38.7%				1,637,500				7,078,200
07/3/2012		$6.09		56.3%		0.88%		3.01			35.7%				831,200				5,515,000
12/13/2011		$8.43		54.3%		0.68%		2.46			31.8%				281,500				1,641,900
															4,097,100			$	22,763,400

Significant assumptions used and related fair values for the Company’s warrants as of December 31, 2013 were as follows:

Original Issuance		Exercise Price		Volatility		Risk-Free Interest Rate		Term (years)		Discount for marketability restrictions				Warrants Outstanding				Fair Value
03/28/2013		$7.59		52.4%		0.13%		1.20			22.7%				788,000			$	495,000
06/21/2013		$7.59		52.4%		0.13%		1.24			22.7%				1,051,000				660,000
01/11/2013		$6.32		63.3%		1.27%		4.03			43.8%				1,709,000				2,892,000
09/26/2012		$8.85		58.5%		0.38%		1.74			42.3%				1,771,000				702,000
07/3/2012		$6.09		61.2%		1.27%		3.51			40.2%				1,812,000				3,008,000
07/3/2012		$5.47		52.8%		0.01%		0.01			42.3%				804,000				3,000
12/13/2011		$8.43		60.4%		0.78%		2.95			37.9%				306,000				455,000
															8,241,000			$	8,215,000

Summary of fair value measurements by level

The following table summarizes fair value measurements by level at June 30, 2014 (in thousands):

		Level 1				Level 2				Level 3				Total
Assets:
Commodity contracts⁽¹⁾		$	405			$	–			$	–			$	405
Total Assets		$	405			$	–			$	–			$	405

Liabilities:
Warrants⁽²⁾		$	–			$	–			$	22,763			$	22,763
Commodity contracts⁽³⁾			336				–				–				336
Total Liabilities		$	336			$	–			$	22,763			$	23,099

__________

(1) Included in other current assets in the consolidated balance sheets.

(2) Included in warrant liabilities at fair value in the consolidated balance sheets.

(3) Included in other current liabilities in the consolidated balance sheets.

The following table summarizes fair value measurements by level at December 31, 2013 (in thousands):

		Level 1				Level 2				Level 3				Total
Assets:
Commodity contracts⁽¹⁾		$	961			$	–			$	–			$	961
Total Assets		$	961			$	–			$	–			$	961

Liabilities:
Warrants⁽²⁾		$	–			$	–			$	8,215			$	8,215
Commodity contracts⁽³⁾			859				–				–				859
Total Liabilities		$	859			$	–			$	8,215			$	9,074

__________

(1) Included in other current assets in the consolidated balance sheets.

(2) Included in warrant liabilities at fair value in the consolidated balance sheets.

(3) Included in accrued liabilities in the consolidated balance sheets.

Changes in fair value of Level 3 inputs

Fair value of warrants, December 31, 2013		$	8,215
Adjustments to fair value for the period			34,559
Exercises of warrants			(20,008	)
Expiration of warrants			(3	)
Fair value of warrants, June 30, 2014		$	22,763

Tabular disclosure of financial instruments measured at fair value, including those classified in shareholders' equity measured on a recurring or nonrecurring basis. Disclosures include, but are not limited to, fair value measurements recorded and the reasons for the measurements, level within the fair value hierarchy in which the fair value measurements are categorized and transfers between levels 1 and 2. Nonrecurring fair value measurements are those that are required or permitted in the statement of financial position in particular circumstances.

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Tabular disclosure of the fair value measurement of liabilities using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets), and gains or losses recognized in other comprehensive income (loss) and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs) by class of liability.

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