9. FAIR VALUE MEASUREMENTS (Tables)

6 Months Ended

Jun. 30, 2015

Fair Value Disclosures [Abstract]

Assumptions used and related fair value for conversion feature

Significant assumptions used and related fair values for the warrants as of June 30, 2015 were as follows:

Original Issuance	Exercise Price		Volatility		Risk Free Interest Rate		Term (years)		Market Discount		Warrants Outstanding		Fair Value
09/26/2012	$	8.85		38.7%		0.01%		0.24		27.5%		432,000	$	527,000
07/3/2012	$	6.09		48.8%		0.64%		2.01		26.2%		211,000		795,000
12/13/2011	$	8.43		49.4%		0.46%		1.46		23.0%		138,000		381,000
													$	1,703,000

Significant assumptions used and related fair values for the warrants as of December 31, 2014 were as follows:

Original Issuance	Exercise Price		Volatility		Risk Free Interest Rate		Term (years)		Market Discount		Warrants Outstanding		Fair Value
09/26/2012	$	8.85		51.0%		0.19%		0.74		37.0%		473,000	$	748,000
07/3/2012	$	6.09		56.1%		0.89%		2.51		32.8%		211,000		811,000
12/13/2011	$	8.43		54.3%		0.67%		1.95		28.7%		138,000		427,000
													$	1,986,000

Summary of fair value measurements by level

The following table summarizes fair value measurements by level at June 30, 2015 (in thousands):

	Level 1		Level 2		Level 3		Total
Assets:
Commodity contracts(1)	$	180	$	–	$	–	$	180
Total Assets	$	180	$	–	$	–	$	180
Liabilities:
Warrants(2)	$	–	$	–	$	1,703	$	1,703
Commodity contracts(3)		369		–		–		369
Total Liabilities	$	369	$	–	$	1,703	$	2,072

__________

(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.

The following table summarizes fair value measurements by level at December 31, 2014 (in thousands):

	Level 1		Level 2		Level 3		Total
Assets:
Commodity contracts(1)	$	1,586	$	–	$	–	$	1,586
Total Assets	$	1,586	$	–	$	–	$	1,586
Liabilities:
Warrants(2)	$	–	$	–	$	1,986	$	1,986
Commodity contracts(3)		1,149		–		–		1,149
Total Liabilities	$	1,149	$	–	$	1,986	$	3,135

__________

(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

The changes in the Company’s fair value of its Level 3 inputs with respect to its warrants were as follows (in thousands):

Balance, December 31, 2014	$	1,986
Exercises of warrants		(72	)
Adjustments to fair value for the period		(211	)
Balance, June 30, 2015	$	1,703