Note 12

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) and those that contain cash settlement 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. As of June 22, 2016, the down-round provision expired on 12,083,821 warrants and as such $1,541 of value associated with these warrants was reclassified to equity.

For those that do contain such provisions, the Company recognizes such warrants as liabilities at the fair value on each reporting date. The Company measured the fair value of these warrants as of December 31, 2015, and recorded other income of $1,814 resulting from the decrease of the liability associated with the fair value of the warrants for the year ended December 31, 2015. 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 December 31, 2016, June 22, 2016 and December 31, 2015 is as follows:

	December 30, 2016			June 22, 2016			December 31, 2015

Number of shares underlying the warrants		2,015,446			12,083,821			14,099,267
Stock price	$	0.44		$	0.65		$	1.11
Volatility		47.00	%		35.00 - 50.00	%		35.90 – 50.00	%
Risk-free interest rate		1.22	%		0.25% – 1.04	%		0.02% - 1.63	%
Expected dividend yield		0	%		0	%		0	%
Expected warrant life	2.12 – 2.35 years			0.09– 4.0 years			0.07 – 4.48 years

Recurring Level 3 Activity and Reconciliation

The table below provides 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 years ended December 31, 2016 and 2015, for all financial liabilities categorized as Level 3 as of December 31, 2016 and 2015, respectively.

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

Issuance Date	December 31, 2015		Decrease in Fair Value			Reclassification to Equity			December 31, 2016

10/31/2013	$	379	$	(340	)	$	-		$	39
2/5/2014		715		(649	)		-			66
7/24/2014 Series A		2,415		(1,573	)		(842	)		-
7/24/2014 Series B		1,726		(1,713	)		(13	)		-
6/22/2015		1,807		(1,121	)		(686	)		-

Total	$	7,042	$	(5,396	)	$	(1,541	)	$	105

Issuance Date	January 1, 2015		Initial Measurements		Reclassed from Equity		Increase (Decrease) in Fair Value			December 31, 2015

10/31/2013	$	233	$	-	$	-	$	146		$	379
2/5/2014		266		-		-		449			715
7/24/2014 Series A		-		-		3,452		(1,037	)		2,415
7/24/2014 Series B		-		-		1,947		(221	)		1,726
6/22/2015		-		2,958		-		(1,151	)		1,807

Total	$	499	$	2,958	$	5,399	$	(1,814	)	$	7,042

Number of Warrants Subject to Remeasurement:

Issuance Date	December 31, 2015	Reductions	December 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	(12,083,821)	2,015,446