DERIVATIVE WARRANT LIABILITY

9 Months Ended

Sep. 30, 2017

Disclosure Text Block [Abstract]

Derivatives and Fair Value [Text Block]

NOTE 7.  DERIVATIVE WARRANT LIABILITY

On September 21, 2016, in connection with the 12% Notes, we issued the 12% Warrants, which are treated as a derivative liability and adjusted to fair value at the end of each period.  The underlying assumptions used in the binomial model to determine the fair value of the derivative warrant liability were:

	Three months ended
	September 30, 2017	June 30, 2017	March 31, 2017
Stock price on valuation date	$1.43	$1.37 – 2.20	$2.21 – 3.25
Risk-free interest rate	1.5%	1.3 – 1.4%	1.3 – 1.5%
Expected dividend yield	–	–	–
Expected term (in years)	2.0	2.2 – 2.5	2.5 – 2.7
Expected volatility	128%	131 – 134%	146 – 153%
Number of iterations	5	5	5

Changes in the derivative warrant liability were as follows:

December 31, 2016	$	23,120,000
Decrease in fair value		(10,580,000)
Reclassification to additional paid-in capital upon exercise of warrants		(7,301,000)
September 30, 2017	$	5,239,000