Note 8

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, 2017 and December 31, 2016 is as follows (post reverse split):

	March 31, 2017			December 31, 2016

Number of shares underlying the warrants		403,090			403,090
Stock price	$	3.05		$	2.20
Volatility		47.00	%		47.00	%
Risk-free interest rate		1.22	%		1.22	%
Expected dividend yield		0	%		0	%
Expected warrant life	1.87 – 2.10 years			2.12 – 2.35 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, 2017 and 2016, for all financial liabilities categorized as Level 3 as of March 31, 2017 and March 31, 2016, respectively.

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

Issuance Date	December 31, 2016		Increase in Fair Value		March 31, 2017

10/31/2013	$	39	$	46	$	85
2/5/2014		66		86		152

Total	$	105	$	132	$	237

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		2,415		(621	)		1,794
7/24/2014 Series B		1,726		(638	)		1,088
6/22/2015		1,807		(440	)		1,367

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

Number of Warrants Subject to Remeasurement (post reverse split):

Issuance Date	March 31, 2017

10/31/2013	137,143
2/5/2014	265,947

Total	403,090