6. Warrant Liabilities

Liabilities measured at market value on a recurring basis include warrant liabilities resulting from the Company’s past equity financings. In accordance with ASC 815-40, Derivatives and Hedging – Contracts in Entity’s Own Equity (“ASC 815-40”), the warrant liabilities are being marked to market until they are completely settled. The warrants are valued using the Black-Scholes method, using assumptions consistent with our application of ASC 505-50, Equity-Based Payments to Non-Employees (“ASC 505-50”). The gain or loss resulting from the marked to market calculation is shown on the Condensed Statements of Operations as gain (loss) on warrant derivative liabilities. The Company recognized a loss of $4.0 million and a gain of $6.4 million for the three-month periods ended September 30, 2013 and 2012, respectively, and a loss of $3.2 million and $6.0 million for the nine-month periods ended September 30, 2013 and 2012, respectively. The following reflects the weighted-average assumptions for each of the nine-month periods indicated:

	Nine Months Ended September 30,
	2013			2012

Risk-free interest rate		0.59	%		0.44	%
Expected dividend yield		0	%		0	%
Expected lives		2.71			3.65
Expected volatility		66.7	%		80.4	%
Loss on warrant liabilities	$	(3,172,324	)	$	(5,980,016	)

The dividend yield assumption of zero is based upon the fact that the Company has never paid and presently has no intention of paying cash dividends. The risk-free interest rate used for each warrant classified as a derivative is equal to the U.S. Treasury rates in effect at September 30th of each year presented. The expected lives are based on the remaining contractual lives of the related warrants at the valuation date.