Fair Value Measurements

12 Months Ended

Dec. 31, 2015

Fair Value Measurements.

Fair Value Measurements

14. Fair Value Measurements

        The following table summarizes the financial instruments measured at fair value on a recurring basis in the consolidated balance sheets (in thousands):

	Total		Quoted Prices in Active Markets for Identical Items (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)
Balance at December 31, 2015
Common stock warrant liability	$	5,735	$	—	$	—	$	5,735
Balance at December 31, 2014
Common stock warrant liability	$	9,418	$	—	$	—	$	9,418

        The common stock warrant liability is measured at fair value using Level 3 inputs. Level 3 inputs are unobservable inputs and should be used to determine fair value only when observable inputs are not available. Unobservable inputs should be developed based on the best information available in the circumstances, which might include internally generated data and assumptions being used to price the asset or liability. When possible, the Company looks to active and observable markets to price identical assets, however when identical assets are not traded in active markets, the Company looks to market observable data for similar assets. Nevertheless, certain assets are not actively traded in observable markets and the Company must use alternative valuation techniques to derive a fair value measurement.

        For our common stock warrants, fair value is based on the Black-Scholes pricing model which is based, in part, upon unobservable inputs for which there is little or no market data, requiring the Company to develop its own assumptions. The Company used the following assumptions for its common stock warrants:

	At December 31, 2015	At December 31, 2014
Risk-free interest rate	0.5% - 1.28%	0.21% - 1.35%
Volatility	79.82% - 128.35%	119.16% - 136.62%
Expected average term	0.42 - 3.04	1.42 - 4.04

        There was no expected dividend yield for the warrants granted. If factors change and different assumptions are used, the warrant liability and the change in estimated fair value could be materially different. Generally, as the market price of our common stock increases, the fair value of the warrant increases, and conversely, as the market price of our common stock decreases, the fair value of the warrant decreases. Also, a significant increase in the volatility of the market price of the Company's common stock, in isolation, would result in a significantly higher fair value measurement, and a significant decrease in volatility would result in a significantly lower fair value measurement.

        The following table shows reconciliations of the beginning and ending balances for financial instruments measured at fair value on a recurring basis using significant unobservable inputs (in thousands):

	Fair Value Measurement Using Significant Unobservable Inputs
Common stock warrant liability	2015			2014
Beginning of period	$	9,418		$	28,830
Change in fair value of common stock warrants		(3,661	)		52,260
Issuance of common stock warrants		—			11,773
Exercise of common stock warrants		(22	)		(83,445	)
End of period	$	5,735		$	9,418