9. Warrants

12 Months Ended

Dec. 31, 2015

Notes to Financial Statements

Warrants - Note 9

9. WARRANTS

The warrants to purchase 2.1 million shares of our common stock that we sold in our March 2014 offering have an exercise price of $2.47 per share and expire on the fifth anniversary of the date of issuance.

In combination with our registered direct offerings of common stock in May 2013 and September 2013, we issued warrants to purchase common stock. At each balance sheet date that the warrants were outstanding, we evaluated the fair value of the warrants and any change in value was recorded as a non-operating gain or loss on the statement of operations. Due to the conditional exchange provision of the warrants, the determination of the fair value of the warrant liability varied depending on our common stock price.

In February 2014, we issued 3.7 million shares of our common stock under the exchange provision of our then-outstanding warrants. We did not receive additional cash consideration in the exchange transaction. We recorded a loss of $5.0 million during the year ended December 31, 2014 on the exchange, as the fair market value of the common stock issued was greater than the obligation recorded due to the increase in stock price from December 31, 2013 to the date the warrants were exchanged. During 2013, we recorded non-operating gains of $1.9 million related to the change in fair value of the warrants.

The following table summarizes activity with respect to our common stock warrants for the periods shown below (in thousands):

	Warrants to		Weighted-
	purchase		average
	common		exercise
	shares		price
Outstanding at December 31, 2012	5,131	$	7.28
Granted:
Exercise price less than intrinsic value	2,216		2.71
Exercise price greater than intrinsic value	1,855		2.44
Exercised	(358)		1.77
Canceled/expired	(753)		28.80
Outstanding at December 31, 2013	8,091		3.07
Granted:
Exercise price less than intrinsic value	-		-
Exercise price greater than intrinsic value	2,148		2.47
Exercised	(3,713)		2.67
Canceled/expired	-		-
Outstanding at December 31, 2014	6,526		3.08
Granted:
Exercise price less than intrinsic value	-		-
Exercise price greater than intrinsic value	-		-
Exercised	(1,487)		2.19
Canceled/expired	-		-
Outstanding at December 31, 2015	5,039	$	3.34
Exercisable at December 31, 2015	5,039	$	3.34

With the exception of common stock warrants that included the conditional exchange provision described above, we estimate the fair value of our common stock warrants using the Black-Scholes option pricing model with the following weighted-average assumptions used for grants in 2014: dividend yield of zero percent; expected volatility of 100%; risk-free interest rates of 1.6%, and contractual lives of five years. There were no common stock warrants issued in 2015.

The following table summarizes information about our common stock warrants outstanding and exercisable at December 31, 2015 (in thousands):

	Warrants outstanding				Warrants exercisable
		Weighted-
		average		Weighted-			Weighted-
	Outstanding at	remaining		average	Exercisable at		average
	December 31,	contractual term		exercise	December 31,		exercise
Range of exercise prices	2015	(in years)		price	2015		price
$2.01-$3.08	3,761	2.39	$	2.36	3,761	$	2.36
$6.24-$10.24	1,278	0.88		6.24	1,278		6.24
$2.01-$10.24	5,039				5,039