6. Warrants

In connection with the March 16, 2015 private placement of 78,787,880 shares of the Company’s common stock at a price per share of $0.165, the Company issued an aggregate of warrants to purchase 19,696,971 shares of common stock at an exercise price of $0.215 per share to the purchasers of the common stock. In addition, the Company issued warrants to purchase an aggregate of 4,727,273 shares of common stock to the placement agents. These warrants expire in March 2020 and contain certain provisions that contain a contingent cash payment of $2.5 million in liquidated damages to the holders of the warrants in the event the Company fails to take such action to either (i) increase the number of shares of Common Stock the Company is authorized to issue or (ii) effect a reverse split of the Common Stock, in either event sufficient to permit the exercise in full of the Warrants in accordance with their terms. Due to these provisions, the Company accounted for these warrants as liability instruments. The Company measured the fair value of these warrants on March 16, 2015 and recorded an initial warrant liability of $4,211,000, of which $3,396,000 represented the initial fair value of the warrants issued to investors and $815,000 as the initial fair value of the warrants issued to the placement agents. The Company recorded other expenses of $213,000 in the quarter ended March 31, 2015 related to the portion of the initial fair value of the placement agent attributable to the initial fair value of the warrants issued to investors in the quarter.

In connection with the December 2013 private placement of 72,007,000 shares of the Company’s common stock at a price per share of $0.25, the Company issued an aggregate of warrants to purchase 4,320,420 shares of common stock at an exercise price of $0.25 per share to the placement agents. These warrants, which expire December 2018, contain provisions that protect holders from a decline in the issue price of the Company’s common stock (“down-round” provision) and contain net settlement provisions. Due to these provisions, the Company accounted for these warrants as liability instruments. As a result of the March 16, 2015 private placement of common stock at a price of $0.165 per share, the “down-round” provision of these warrants resulted in an adjustment to their exercise price to $0.165 as of March 16, 2015.

In connection with the private placement of Series B redeemable convertible preferred stock, which occurred through two closings on June 26, 2013 and July 15, 2013, the Company issued an aggregate of warrants to purchase 30,040,194 shares of common stock at an exercise price of $0.14 per share. These warrants, which expire in June 2018 and in July 2018, respectively, contain provisions that protect holders from a decline in the issue price of the Company’s common stock (“down-round” provision) and contain net settlement provisions. Due to these provisions, the Company accounts for these warrants as liability instruments. The Company measured the fair value of these warrants on June 26, 2013 and July 15, 2013 and recorded initial warrant liabilities of $4,285,000 and $674,000, respectively, as part of the private placement proceeds and expensed $759,000 for warrants issued to the placement agent.

On December 22, 2011, in connection with the Biocontrol business combination, the Company issued warrants to purchase up to 1,355,164 shares of its common stock. These warrants expire in December 2016 and are exercisable at a price of $0.46 per share. As the terms of these warrants require that they be settled in registered shares of common stock, the Company accounts for these warrants as liability instruments.

The Company estimates the fair values of all warrants accounted for as liability instruments using a Monte Carlo valuation model.

From February through May 2013, in connection with the issuance of new convertible promissory notes, the Company issued warrants to purchase up to 7,030,387 shares of its common stock. These warrants expire February through May 2018 and are exercisable at a price of $0.14 per share. The Company classifies these warrants as equity instruments.

The following table provides the number of warrants, exercise price and aggregate proceeds to the Company if exercised as of March 31, 2015 and December 31, 2014:

	March 2015				2013 Series B Warrants				December 2013				2013 Convertible Notes				2011				Totals
																							Weighted
																							Average
			Exercise				Exercise				Exercise				Exercise				Exercise				Exercise
	Shares		Price		Shares		Price		Shares		Price		Shares		Price		Shares		Price		Shares		Price
Balance, December 31, 2014		—	$	—		26,184,480	$	0.14		4,320,420	$	0.25		7,030,387	$	0.14		1,355,164	$	0.46		38,890,452	$	0.16
Issuances		24,424,244		0.22		—		—		—		—		—		—		—		—		24,424,244		0.22
Exercises		—		—		—		—		—		—		—		—		—		—		—		—
Balance, March 31, 2015		24,424,244	$	0.22		26,184,480	$	0.14		4,320,420	$	0.17		7,030,387	$	0.14		1,355,164	$	0.46		63,314,696	$	0.18

Aggregate proceeds if exercised	$	5,251,213			$	3,665,827			$	712,869			$	984,254			$	623,375			$	11,237,538

The Company re-measured the fair value of the warrant liability and recorded a loss of $4,690,000 for the quarter ended March 31, 2015, reflecting an increase in the liability associated with the warrants at their estimated fair value, which totaled $14,727,000 as of March 31, 2015.