Note 10

Warrants:

The Company accounts for warrants that have provisions that protect holders from a decline in the issue price of its common stock (or "down-round" provisions) as liabilities instead of equity. Down-round provisions reduce the exercise or conversion price of a warrant or convertible instrument if a company either issues equity shares for a price that is lower than the exercise or conversion price of those instruments or issues new warrants or convertible instruments that have a lower exercise or conversion price. Net settlement provisions allow the holder of the warrant to surrender shares underlying the warrant equal to the exercise price as payment of its exercise price, instead of physically exercising the warrant by paying cash. The Company evaluated whether warrants to acquire its common stock contain provisions that protect holders from declines in the stock price or otherwise could result in modification of the exercise price and/or shares to be issued under the respective warrant agreements based on a variable that is not an input to the fair value of a "fixed-for-fixed" option.

The Company recognizes such warrants as liabilities at the fair value on each reporting date. The Company computed the value of the warrants using the binomial method. A summary of quantitative information with respect to the valuation methodology and significant unobservable inputs used for the Company's warrant liabilities that are categorized within Level 3 of the fair value hierarchy as of March 31, 2016 and December 31, 2015 is as follows:

	March 31, 2016			December 31, 2015

Number of shares underlying the warrants		14,099,267			14,099,267
Stock price	$	0.95		$	1.11
Volatility		50.00	%		35.90 – 50.00	%
Risk-free interest rate		0.26% – 1.07	%		0.02% - 1.63	%
Expected dividend yield		0	%		0	%
Expected warrant life	0.32 – 4.23 years			0.07 – 4.48 years

Recurring Level 3 Activity and Reconciliation

The tables below provide a reconciliation of the beginning and ending balances for the liability measured at fair value using significant unobservable inputs (Level 3). The table reflects gains and losses for the three month periods ended March 31, 2016 and 2015, for all financial liabilities categorized as Level 3 as of March 31, 2016 and March 31, 2015, respectively.

Fair Value Measurements Using Significant Unobservable Inputs (Level 3):

Issuance Date	December 31, 2015		Decrease in Fair Value			March 31, 2016

10/31/2013	$	379	$	(99	)	$	280
2/5/2014		715		(187	)		528
7/24/2014 Series A (1)		2,415		(621	)		1,794
7/24/2014 Series B (1)		1,726		(638	)		1,088
6/22/2015		1,807		(440	)		1,367

Total	$	7,042	$	(1,985	)	$	5,057

(1) These warrants were modified on September 30, 2015 and as a result of the modification these warrants met the definition of a derivative and were reclassified to a warrant liability.

Issuance Date	December 31, 2014		Increase in Fair Value		March 31, 2015

10/31/2013	$	233	$	377	$	610
2/5/2014		266		957		1,223

Total	$	499	$	1,334	$	1,833

Number of Warrants Subject to Remeasurement:

Issuance Date	December 31, 2015	Additions	Reductions	March 31, 2016

10/31/2013	685,715	-	-	685,715
2/5/2014	1,329,731	-	-	1,329,731
7/24/2014 Series A	4,288,500	-	-	4,288,500
7/24/2014 Series B	4,795,321	-	-	4,795,321
6/22/2015	3,000,000	-	-	3,000,000

Total	14,099,267	-	-	14,099,267