Warrants

The following is a summary of warrant activity for the six months ended June 30, 2016 (in thousands):



	January 2016 Warrants	March 2015 Warrants	September 2013 Warrants	December 2012 Warrants	Other Equity Financing Warrants		Warrants issued to Consultants and Debtors	Total
Outstanding, January 1, 2016	—	14,006	3,973	3,031	816		482	22,308
Issued	13,643	—	—	—	—		2,000	15,643
Exercised	—	—	—	—	(502	)	—	(502	)
Expired	—	—	—	—	(31	)	—	(31	)
Outstanding, June 30, 2016	13,643	14,006	3,973	3,031	283		2,482	37,418
Expiration	January 2021	March 2020	September 2018	December 2017	Varies 2016-2017		Varies 2014-2021

Warrants consist of warrants potentially settleable in cash, which are liability-classified warrants, and equity-classified warrants.

Warrants classified as liabilities

Liability-classified warrants consist of warrants to purchase common stock issued in connection with equity financings in January 2016, March 2015, September 2013, December 2012, April 2011, March 2011, and March 2010. These warrants are potentially settleable in cash and were determined not to be indexed to our common stock.

The estimated fair value of outstanding warrants accounted for as liabilities is determined at each balance sheet date. Any decrease or increase in the estimated fair value of the warrant liability since the most recent balance sheet date is recorded in the condensed consolidated statement of operations as other income (expense). The fair value of the warrants is estimated using an appropriate pricing model with the following inputs:



	As of June 30, 2016
	January 2016 Warrants			March 2015 Warrants			September 2013 Warrants			December 2012 Warrants			April 2011 Warrants			March 2010 Warrants
Strike price	$	1.42		$	2.08		$	2.50		$	1.75		$	0.65		$	1.92
Expected term (years)	4.52			3.72			2.22			1.48			0.81			0.25
Volatility %	113.70		%	122.36		%	139.26		%	167.41		%	218.93		%	218.93		%
Risk-free rate %	0.94		%	0.82		%	0.61		%	0.51		%	0.42		%	0.19		%



	As of December 31, 2015
	March 2015 Warrants			September 2013 Warrants			December 2012 Warrants			April 2011 Warrants			March 2011 Warrants*			March 2010 Warrants
Strike price	$	2.08		$	2.50		$	1.83		$	0.65		$	0.65		$	2.02
Expected term (years)	4.22			2.72			1.98			1.31			0.18			1.00
Volatility %	75.85		%	74.70		%	76.37		%	65.60		%	47.98		%	71.41		%
Risk-free rate %	1.58		%	1.24		%	1.05		%	0.77		%	—		%	—		%

*The March 2011 warrants expired in March 2016. The March 2010 warrants do not expire until September 2016.

The expected volatility assumptions are based on the Company's implied volatility in combination with the implied volatilities of similar publicly traded entities. The expected life assumption is based on the remaining contractual terms of the warrants. The risk-free rate is based on the zero coupon rates in effect at the time of valuation. The dividend yield used in the pricing model is zero, because the Company has no present intention to pay cash dividends.

The changes in fair value of the warrant liability for the six months ended June 30, 2016 were as follows (in thousands):



	January 2016 Warrants			March 2015 Warrants			September 2013 Warrants			December 2012 Warrants			April 2011 Warrants			Other Equity Financing Warrants			Total
Warrant liability, January 1, 2016	$	—		$	10,337		$	1,933		$	1,565		$	537		$	146		$	14,518
Fair value of warrants issued	5,590			—			—			—			—			—			5,590
Fair value of warrants exercised	—			—			—			—			(278		)	(46		)	(324		)
Change in fair value of warrants	(1,515		)	(6,668		)	(1,148		)	(909		)	(184		)	(96		)	(10,520		)
Warrant liability, June 30, 2016	$	4,075		$	3,669		$	785		$	656		$	75		$	4		$	9,264

Warrants classified as equity

Equity-classified warrants consist of warrants issued in connection with consulting services provided to us and warrants issued in connection with debt financings. On May 10, 2016 upon closing on the sale of Debentures, we granted the holder warrants to purchase up to 1,000,000 shares of common stock at an exercise price of $1.51. The warrants were valued using an appropriate pricing model. The fair value assumptions for the grant included a volatility of 77.13%, expected term of five and five tenths years, risk-free rate of 1.26%, and a dividend rate of 0.00%. The fair value of the warrants granted was $0.87 per share. These warrants are recorded in equity at fair value upon issuance. Additionally, on June 29, 2016 upon closing on the public announcement of the interim analysis of the PRESENT trial, we granted the holder warrants to purchase up to 1,000,000 shares of common stock at an exercise price of $0.43.The warrants were valued using an appropriate pricing model. The fair value assumptions for the grant included a volatility of 106.63%, expected term of 5.5 years, risk-free rate of 1.35%, and a dividend rate of 0.00%. The fair value of the warrants granted was $0.27 per share. These warrants are recorded in equity at fair value upon issuance.