CAPITAL STRUCTURE (Tables)

3 Months Ended

Mar. 31, 2015

Number of outstanding common stock warrants

The number of common stock warrants outstanding as of March 31, 2015 were as follows:

	Number of Shares Exercisable		Exercise Price		Expiration Date
Issued in connection with Encode merger		233,309	$	2.87	12/13/2015
TorreyPines warrants assumed in 2009 Merger		3,503		157.08	9/26/2015
Issued to placement agent in Aug. 2010		97,952		3.08	8/12/2015
Total Warrants Outstanding		334,764	$	4.54		⁽¹⁾

(1) Weighted average exercise price

Assumptions for fair value of the warrants

A Black-Scholes option-pricing model was used to obtain the fair value of the warrant liabilities using the following assumptions at March 31, 2015 and December 31, 2014:

	August 2010 Private Placement Investors and Placement Agent
	March 31,			December 31,
	2015			2014
Fair value (in thousands)	$	766		$	711
Black-Scholes inputs:
Stock price	$	10.87		$	10.28
Exercise price	$	3.08		$	3.08
Risk free interest rate		0.12	%		0.12	%
Volatility		95.00	%		95.00	%
Expected term (years)		0.42			0.50
Dividend		-			-

- Definition

Tabular disclosure of warrants or rights issued. Warrants and rights outstanding are derivative securities that give the holder the right to purchase securities (usually equity) from the issuer at a specific price within a certain time frame. Warrants are often included in a new debt issue to entice investors by a higher return potential. The main difference between warrants and call options is that warrants are issued and guaranteed by the company, whereas options are exchange instruments and are not issued by the company. Also, the lifetime of a warrant is often measured in years, while the lifetime of a typical option is measured in months. Disclose the title of issue of securities called for by warrants and rights outstanding, the aggregate amount of securities called for by warrants and rights outstanding, the date from which the warrants or rights are exercisable, and the price at which the warrant or right is exercisable.

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