Derivative Instruments
|
6 Months Ended | ||
---|---|---|---|
Jun. 30, 2011
|
|||
Derivative Instruments |
Certain
warrants to purchase our common stock are considered derivative
liabilities under current accounting standards. We do
not use derivative instruments for hedging of market risks or for
trading or speculative purposes.
In
January 2011, certain Series V warrants were modified to remove the
language that had previously required them to be classified as
derivative liabilities. As a result of the modification
of the Series V warrants, we reclassified $1.4 million in
derivative liabilities related to those warrants to additional
paid-in capital during the first quarter of 2011. Also
in January 2011, certain Series CC and Series DD warrants were
modified to remove the language that had previously required them
to be classified as derivative liabilities. As a result
of the modification of the Series CC and Series DD warrants, we
reclassified $549,000 in derivative liabilities related to those
warrants to additional paid-in capital during the first quarter of
2011.
During
the first six months of 2011, certain outside investors exercised
1,578,948 Series CC warrants, 1,194,211 Series DD warrants, 810,000
Series V warrants, and 60,000 Series Z warrants, resulting in
reclassification of $1.4 million in derivative liabilities related
to those warrants to additional paid-in capital during the first
six months of 2011.
The
net effect of marking the Company’s derivative liabilities to
market during the three-month periods ended June 30, 2011 and 2010
resulted in net increases in the estimated fair values of the
derivative liabilities of approximately $10,000 and $154,000,
respectively, which were recorded as non-cash
expense. The net effect of marking the Company’s
derivative liabilities to market during the six-month periods ended
June 30, 2011 and 2010 resulted in net increases in the estimated
fair values of the derivative liabilities of approximately $964,000
and $584,000, respectively, which were also recorded as non-cash
expense. The total estimated fair value of the remaining
derivative liabilities was $60,000 as of June 30,
2011.
|