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Debt
 9 Months Ended
Sep. 30, 2015
Debt Disclosure [Abstract]  
Debt

5. DEBT

 

On November 13, 2013, the Company entered into a loan agreement (the “RCF Loan”) with Resource Capital Fund V L.P. (“RCF”), whereby RCF agreed, subject to the terms and conditions set forth in the RCF Loan, to provide a secured convertible loan facility of up to $15,000,000 to the Company, which was subsequently amended on April 29, 2014 to reduce the amount available thereunder from $15,000,000 to $8,000,000, which has been fully drawn.

 

Amounts drawn under the RCF Loan mature on December 31, 2016 and bear interest at 10% per annum, payable quarterly in arrears in shares of the Company’s common stock or, at RCF’s election, in cash. The number of shares to be issued as payment for interest is determined based upon the VWAP of the Company’s common stock for the 20 trading days preceding the last day of each quarter. Accordingly, the Company issued the following shares during 2015 related to interest expense:

 

    Amount     Shares of
common stock
issued		     VWAP     Date of issuance  
    (in thousands, except share data)  
Q4 2014 Interest payment   $ 198       102,912     $ 1.9434       January 2, 2015  
Q1 2015 Interest payment     181       136,463     $ 1.4656       April 1, 2015  
Q2 2015 Interest payment     161       169,909     $ 1.1771       July 2, 2015  
Q3 2015 Interest payment     180       225,071     $ 0.8886       October 1, 2015  
Total   $ 720       634,355                  

 

As of September 30, 2015, interest expense of $180,000 relating to the three-month period ended September 30, 2015 was included in accrued liabilities on the Company’s Consolidated Balance Sheets.

 

The following table represents the key components of the RCF Loan:

 

    September 30, 2015     December 31, 2014  
    (in thousands)  
Debt principal     8,000       8,000  
Unamortized discount     (2,301 )     (3,655 )
Carrying value of convertible loan, end of period     5,699     $ 4,345  

 

For the three- and nine-month periods ended September 30, 2015, the Company recorded amortization of the debt discount of $454,977 and $1,353,539, respectively, which has been included in interest expense in the Company’s Condensed Consolidated Statements of Operations.

 

RCF may convert amounts drawn under the RCF Loan into shares of the Company’s common stock at any time prior to maturity on December 31, 2016. The conversion price is set at $2.60 per share. As of November 10, 2015, RCF owned 7,454,223 shares or 14.7% of the Company’s outstanding common stock. If RCF were to convert the entire $8,000,000 outstanding under the RCF Loan, RCF would receive 3,076,923 shares of the Company’s common stock, and RCF’s ownership percentage in the Company would increase to 19.6%.