10. FAIR VALUE MEASUREMENTS (Tables)

9 Months Ended

Sep. 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 September 30, 2015 were as follows:

Original Issuance	Exercise Price		Volatility		Risk Free Interest Rate		Term (years)		Market Discount		Warrants Outstanding		Fair Value
07/3/2012	$	6.09		50.0%		0.64%		1.76		25.3%		211,000	$	355,000
12/13/2011	$	8.43		46.7%		0.33%		1.21		20.0%		138,000		146,000
													$	501,000

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 September 30, 2015 (in thousands):

	Level 1		Level 2		Level 3		Total
Assets:
Commodity contracts(1)	$	1,012	$	–	$	–	$	1,012
Total Assets	$	1,012	$	–	$	–	$	1,012
Liabilities:
Warrants(2)	$	–	$	–	$	501	$	501
Commodity contracts(3)		2,026		–		–		2,026
Total Liabilities	$	2,026	$	–	$	501	$	2,527

__________

(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

Balance, December 31, 2014	$	1,986
Exercises of warrants		(72	)
Expiration of warrants		(527	)
Adjustments to fair value for the period		(886	)
Balance, September 30, 2015	$	501