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Stock Warrant Liability
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3 Months Ended | |||||||||||||||||||||||||||
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Jun. 30, 2012
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| Stock Warrant Liability [Abstract] | ||||||||||||||||||||||||||||
| Stock Warrant Liability |
We currently do not use hedging contracts to manage the risk of our overall exposure to interest rate and foreign currency changes. The derivative liabilities described below are not hedging instruments. Stock Warrant Liability In August 2006, we issued a $17 million senior secured note (or Note) and related warrant to purchase 1,000,000 shares of our common stock to Portside Growth and Opportunity Fund. The Note was paid in full in January 2010. The related warrant was recorded as a component of long-term liabilities. The warrant had a term of 5 years and an exercise price of $4.25 per share. In the event of a change of control, the warrant must have been settled in cash using the Black-Scholes model in accordance with the underlying terms contained in the warrant agreement. The JH Transaction triggered the antidilution provisions contained in the warrant and, as a result, became exercisable for 8,018,868 shares of our common stock at an exercise price of $0.53 per share. The initial fair value of the warrant liability was determined by using the Black-Scholes valuation method as of August 30, 2006 and this model has historically been used to determine fair value as of the end of each subsequent reporting period. The assumptions used included the closing price of our common stock on the valuation date, the strike price of the warrant, the risk-free rate equivalent to the U.S. Treasury maturities, the historical volatility of our common stock and the remaining term of the warrant. The assumptions used as of June 30, 2011 are as follows:
As the stock warrant expired in August 2011, the valuation of the stock warrant at June 30, 2011 resulted in a de minimus remaining value and there was no remaining balance at June 30, 2012. The decrease in fair value of the stock warrant liability of $72,000 was included as a component of other income during the three months ended June 30, 2011. |
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