Warrants	9 Months Ended
Sep. 30, 2016
Warrants	14. Warrants In May 2016, the Company sold in a registered offering an aggregate of 48,543,687 shares of common stock together with A Warrants exercisable for up to an aggregate of 36,407,765 shares of common stock and B Warrants exercisable for up to an aggregate of 12,135,921 shares of common stock with a total fair value of $44.7 million. Each of the warrants has an exercise price of $1.50 per share. The A Warrants became exercisable upon issuance and will expire two years thereafter. The B Warrants will become exercisable beginning in May 2017 and will expire 30 months after the date of issuance. The shares of common stock and the warrants are immediately separable and issued separately. There have been no warrants exercised as of September 30, 2016. The Company determined that the A Warrants require liability classification primarily due to a price-protection clause that applies in the event of certain dilutive financings. The fair value of the A Warrants was recorded as warrant liability in the condensed consolidated balance sheet at issuance and is adjusted to fair value at each reporting period until exercise or expiration. The Company determined that the B Warrants met the criteria for equity classification and has accounted for such warrants in additional paid-in capital. As of September 30, 2016 and May 12, 2016, the fair value of the A Warrants liability was $4.9 million and $12.8 million, respectively. As of May 12, 2016, the fair value of the B Warrants at issuance was $5.0 million. The fair value of the A Warrants liability as of September 30, 2016 was estimated using a Monte Carlo valuation pricing model with the following underlying assumptions: (a) a risk-free interest rate of 0.66%; (b) an assumed dividend yield of zero percent; (c) an expected term of 1.6 years; and (d) an expected volatility of 90%. The fair value of the A Warrants liability as of May 12, 2016 was estimated using a Monte Carlo valuation pricing model with the following underlying assumptions: (a) a risk-free interest rate of 0.76%; (b) an assumed dividend yield of zero percent; (c) an expected term of 2.0 years; and (d) an expected volatility of 95%. The significant unobservable input used in measuring the fair value of the common stock warrant liabilities is the expected volatility. Significant increases in volatility would result in a higher fair value measurement (Level 3 in the fair value hierarchy). For the three and nine months ended September 30, 2016, the Company recognized a change in fair value of warrant liability of $13.2 million and $7.9 million, respectively, in the condensed consolidated statements of operations to reflect the fair value adjustments of the A Warrant liability from the date of issuance.

Warrants

9 Months Ended

Sep. 30, 2016

14. Warrants

In May 2016, the Company sold in a registered offering an aggregate of 48,543,687 shares of common stock together with A Warrants exercisable for up to an aggregate of 36,407,765 shares of common stock and B Warrants exercisable for up to an aggregate of 12,135,921 shares of common stock with a total fair value of $44.7 million. Each of the warrants has an exercise price of $1.50 per share. The A Warrants became exercisable upon issuance and will expire two years thereafter. The B Warrants will become exercisable beginning in May 2017 and will expire 30 months after the date of issuance. The shares of common stock and the warrants are immediately separable and issued separately. There have been no warrants exercised as of September 30, 2016.

The Company determined that the A Warrants require liability classification primarily due to a price-protection clause that applies in the event of certain dilutive financings. The fair value of the A Warrants was recorded as warrant liability in the condensed consolidated balance sheet at issuance and is adjusted to fair value at each reporting period until exercise or expiration. The Company determined that the B Warrants met the criteria for equity classification and has accounted for such warrants in additional paid-in capital.

As of September 30, 2016 and May 12, 2016, the fair value of the A Warrants liability was $4.9 million and $12.8 million, respectively. As of May 12, 2016, the fair value of the B Warrants at issuance was $5.0 million. The fair value of the A Warrants liability as of September 30, 2016 was estimated using a Monte Carlo valuation pricing model with the following underlying assumptions: (a) a risk-free interest rate of 0.66%; (b) an assumed dividend yield of zero percent; (c) an expected term of 1.6 years; and (d) an expected volatility of 90%. The fair value of the A Warrants liability as of May 12, 2016 was estimated using a Monte Carlo valuation pricing model with the following underlying assumptions: (a) a risk-free interest rate of 0.76%; (b) an assumed dividend yield of zero percent; (c) an expected term of 2.0 years; and (d) an expected volatility of 95%. The significant unobservable input used in measuring the fair value of the common stock warrant liabilities is the expected volatility. Significant increases in volatility would result in a higher fair value measurement (Level 3 in the fair value hierarchy).

For the three and nine months ended September 30, 2016, the Company recognized a change in fair value of warrant liability of $13.2 million and $7.9 million, respectively, in the condensed consolidated statements of operations to reflect the fair value adjustments of the A Warrant liability from the date of issuance.