Nature of the Business, Basis of Presentation, and Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2012

Nature of the Business, Basis of Presentation, and Significant Accounting Policies

Schedule of assets measured at fair value on a recurring basis and the input categories associated with those assets

The following tables show assets measured at fair value on a recurring basis and the input categories associated with those assets (in thousands):

			As of December 31, 2011
	Fair Value at December 31, 2011		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Asset:
Money market funds	$	160,944	$	160,944	$	—	$	—

			As of September 30, 2012
	Fair Value at September 30, 2012		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Money market funds	$	15,950	$	15,950	$	—	$	—
Embedded derivative asset(1)	$	44	$	—	$	—	$	44
Liabilities:
Warrant derivative liability	$	14,574	$	—	$	—	$	14,574
Embedded derivative liability	$	1,195	$	—	$	—	$	1,195

(1) Included in Other Current Assets.

Schedule of roll forward of the fair value of the assets, where fair value is determined by Level 3 inputs

Assets Measured as Level 3 Inputs

	Three Months Ended September 30, 2012
Balance at June 30, 2012	$	—
Embedded derivatives associated with the Hudson Bay Note	1,456
Change in fair value (loss)	(1,412		)
Balance at September 30, 2012	$	44

	Nine Months Ended September 30, 2012
Balance at January 1, 2012	$	—
Embedded derivatives associated with the Hudson Bay Note	1,456
Change in fair value (loss)	(1,412		)
Balance at September 30, 2012	$	44

Schedule of roll forward of the fair value of the liabilities, where fair value is determined by Level 3 inputs

Liabilities Measured as Level 3 Inputs

	Three Months Ended September 30, 2012
Balance at June 30, 2012	$	22,274
Warrants issued July 10, 2012	4,937
Wanxiang Warrants issued August 8, 2012	14,147
Embedded derivatives associated with the Wanxiang Warrants	1,072
Change in fair value (gain)	(26,661		)
Balance at September 30, 2012	$	15,769

	Nine Months Ended September 30, 2012
Balance at January 1, 2012	$	—
Warrants issued January 25, 2012	11,901
Warrants issued May 24, 2012	7,712
Warrants issued July 10, 2012	4,937
Wanxiang Warrants issued August 8, 2012	14,147
Embedded derivatives associated with the 2013 Senior Notes	2,841
Embedded derivatives associated with the Wanxiang Warrants	1,072
Change in fair value (gain)	(26,841		)
Balance at September 30, 2012	$	15,769

Schedule of assets measured at fair value on a nonrecurring basis and the input categories associated with those assets

The following tables show assets measured at fair value on a non-recurring basis and the input categories associated with those assets (in thousands):

			As of December 31, 2011
	Fair Value at December 31, 2011		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Asset:
Investment in Fisker	$	8,873	$	—	$	—	$	8,873
Goodwill	$	9,581	$	—	$	—	$	9,581

As of September 30, 2012

Fair Value at
September 30,
2012

Quoted Prices in
Active Markets for
Identical Assets
(Level 1)

Significant Other
Observable
Inputs
(Level 2)

Significant
Unobservable
Inputs
(Level 3)

Assets:

Investment in Fisker

—

Goodwill

—

Schedule of roll forward of the fair value of the assets, fair value is determined by Level 3 inputs

The following table provides a roll forward of the fair value of these assets, where fair value is determined by Level 3 inputs (in thousands):

Assets Measured as Level 3 Inputs

	Three Months Ended September 30, 2012
Balance at June 30, 2012	$	15,533
Change in fair value (loss)	(15,533		)
Balance at September 30, 2012	$	—

	Nine Months Ended September 30, 2012
Balance at January 1, 2012	$	18,464
Change in fair value (loss)	(18,464		)
Balance at September 30, 2012	$	—

Schedule of potentially dilutive securities excluded from the calculation of diluted net loss per share, as the effect would be anti-dilutive

The following potentially dilutive securities were excluded from the calculation of diluted net loss per share, as the effect would have been anti-dilutive (in thousands):

	September 30,
	2011	2012
2016 Notes upon conversion to common stock	19,965	19,965
2013 Senior Notes upon conversion to common stock(1)	—	39,938
Warrants to purchase common stock	45	25,257
Options to purchase common stock	11,219	11,687
Unvested restricted stock units	1,361	6,215
	32,590	103,062

(1) The number of potentially dilutive shares attributable to the 2013 Senior Notes was calculated based on the principal outstanding as of September 30, 2012 and the initial conversion price of $1.18 per share. The conversion price is subject to change as outlined in Note 2, Private Placement.

- Definition

Tabular disclosure of assets and liabilities by class, including financial instruments measured at fair value that are classified in shareholders' equity, if any, that are measured at fair value on a nonrecurring basis in periods after initial recognition (for example, impaired assets). Disclosures may include, but are not limited to: (a) the fair value measurements recorded and the reasons for the measurements and (b) the level within the fair value hierarchy in which the fair value measurements are categorized in their entirety (levels 1, 2, 3).

+ References+ Details

- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

+ References+ Details

- Definition

Tabular disclosure of the fair value measurement of liabilities using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets), and gains or losses recognized in other comprehensive income (loss) and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs) by class of liability.

+ References+ Details

B456 SYSTEMS, INC. 10-Q