Fair Value Measurements

12 Months Ended

Dec. 31, 2016

Fair Value Measurements.

Fair Value Measurements

15.  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):

			Quoted Prices		Significant		Significant
			in Active		Other		Other
			Markets for		Observable		Unobservable
			IdenticalItems		Inputs		Inputs
	Total		(Level 1)		(Level 2)		(Level 3)
Balance at December 31, 2016
Common stock warrant liability	$	11,387	$	—	$	—	$	11,387
Balance at December 31, 2015
Common stock warrant liability	$	5,735	$	—	$	—	$	5,735

The Company’s common stock warrant liability represents the only financial instrument measured at fair value on a recurring basis in the consolidated balance sheets.  The fair value measurement is determined by using Level 3 inputs due to the lack of active and observable markets that can be used to price identical assets.  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. 

Fair value of the common stock warrant liability 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:

	December 31, 2016	December 31, 2015
Risk-free interest rate	0.87% - 1.96%	0.5% - 1.28%
Volatility	49.0% - 103.41%	79.82% - 128.35%
Expected average term	1.14 - 5.47	0.42 - 3.04

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 the activity related to financial instruments measured at fair value on a recurring basis using significant unobservable inputs for the years ended December 31, 2016 and 2015 (in thousands):

Common stock warrant liability	2016		2015
Beginning of period	$	5,735	$	9,418
Change in fair value of common stock warrants		(4,344)		(3,661)
Issuance of common stock warrants		10,137		—
Exercise of common stock warrants		(141)		(22)
End of period	$	11,387	$	5,735