Fair Value Measurements

9 Months Ended

Sep. 30, 2011

Fair Value Measurements [Abstract]

Fair Value Measurements

Note 9 — Fair Value Measurements

Fair value is the amount at a measurement date that would be received on the sale of an asset or paid to transfer a liability in an orderly transaction between market participants. The Company categorizes financial assets and liabilities based upon the three-tiered levels of the fair value hierarchy. The hierarchy prioritizes valuation technique inputs used to measure fair value and bases the categorization within the hierarchy on the lowest level of input that is available and significant to the fair value measurement.

• Level 1 — Quoted prices in active markets for identical assets or liabilities;

• Level 2 — Observable inputs other than Level 1, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and

• Level 3 — Significant unobservable inputs supported by little or no market activity or based upon the reporting entity's assumptions about the inputs.

Liabilities Measured at Fair Value on a Recurring Basis

Liabilities required to be measured at fair value on a recurring basis, including identification of the fair value hierarchy of the valuation techniques used by the Company to determine these fair values, are as follows (in thousands):

	Fair Value Measurements
	Level 1		Level 2		Level 3		Total
Common stock warrants, September 30, 2011 (1)	$	—	$	—	$	7,584	$	7,584
Common stock warrants, December 31, 2010 (1)	$	—	$	—	$	26,193	$	26,193

(1) The fair value of common stock warrants is estimated using a Black-Scholes option-pricing model. See Note 12- Convertible Preferred Stock and Stock Warrants for additional information.

There were no significant transfers in or out of either Level 1 or Level 2 fair value measurements during the nine months ended September 30, 2011. During the nine months ended September 30, 2011, $18.6 million of non-cash gain was recognized as a fair value adjustment within Level 3 of the fair value measurement hierarchy. The change was driven by the change in the fair value per share of the Exercisable and Contingent Warrants (see Note 12), as determined utilizing the Black-Scholes option pricing model, primarily resultant from a decrease in the Company's common share price of $4.67 at September 30, 2011 from $5.45 at December 31, 2010, coupled with a decrease in the number of warrants outstanding due to the exercise of 1.0 million Exercisable Warrants and 2.8 million Contingent Warrants, respectively, during the nine months ended September 30, 2011.

During the year ended December 31, 2010, a $21.5 million non-cash loss was recognized due to fair value fluctuation within Level 3 of the fair value measurement hierarchy. The fluctuation was due to an increase in the price and associated volatility of the Company's common stock partially offset by the conversion of 1.0 million Exercisable Warrants and 3.6 million Contingent Warrants at a weighted average fair value of $1.30 per warrant. The fair value per warrant of Exercisable and Contingent Warrants for the nine months ended September 30, 2011 ranged from $3.65 to $7.45 and ranged from $0.63 to $4.48 for the year ended December 31, 2010.

For periods presented there were no new issuances of warrants or transfers in or out of the Level 3 hierarchy.

Warrant Liability	Nine Months Ended September 30, 2011			Year Ended December 31, 2010
Balance, beginning of period	$	26,193		$	4,729
Fair value adjustments, net		(18,609	)		21,464
Balance, end of period	$	7,584		$	26,193

Fair Value of Other Financial Instruments

The carrying value of certain financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued expenses, approximate fair value due to the short-term nature of these accounts. The Company had no cash equivalents at September 30, 2011 or December 31, 2010.

The carrying value and estimated fair value of the Company's convertible notes and long-term debt were as follows (in thousands):

	September 30, 2011				December 31, 2010
	Carrying Value		Fair Value		Carrying Value		Fair Value
Convertible senior notes (2008 Notes) (1)	$	64,644	$	70,148	$	65,858	$	64,688
Convertible senior secured notes (2010 Notes) (1)		33,763		37,705		32,697		32,684
Term loan		—		—		33,621		33,875
Capital lease obligations		1,649		1,647		960		942

(1) The carrying value of the convertible senior notes and senior secured notes is representative of the bifurcated debt components only, while the fair value is based on the market value of the respective notes, which includes the convertible equity component.

The estimated fair value of the 2008 Notes is based upon the quoted market price of the notes. The estimated fair value of the 2010 Notes and Term Loan are based upon rates available for instruments with similar risks and maturities. The fair value of capital lease obligations is based upon current lease rates adjusted for applicable risk premiums. The estimated fair value of the convertible notes and long-term debt are measured using Level 2 inputs.

Assets Measured at Fair Value on a Nonrecurring Basis

Non-financial assets, including property, plant and equipment as well as, goodwill and other intangible assets are measured at fair value on a non-recurring basis subject to annual and interim fair value adjustment. No fair value adjustment was required for the three or nine months ended September 30, 2011 or 2010.