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Warrants

12 Months Ended

Dec. 31, 2014

NOTE 9 – WARRANTS

On January 27, 2014, in connection with a private placement (refer to “Note 8 - Stockholders’ Equity – Private Placement Proceeds”), the Company granted warrants to purchase an aggregate of 473,522 shares of common stock as follows: (i) Series A warrants to purchase 315,676 shares of common stock at an exercise price of $15.00 per share (the “Series A Warrant”) and (ii) Series B warrants to purchase 157,846 shares of common stock at an exercise price of $45.00 per share (the “Series B Warrant”). The warrants were determined to have an estimated aggregate fair value of $2,486. The Series A Warrants entitle the holders to purchase shares of common stock for a period of three years from the grant date and the Series B Warrants entitle the holders to purchase common stock for a period of five years from the grant date. The warrants can also be exercised on a cashless basis.

On November 19, 2014 in connection with a registered-direct public offering (refer to “Note 8 - Stockholders’ Equity – Public Offering”), the Company granted warrants to purchase an aggregate of 484,663 shares of common stock as follows: (i) Series C warrants to purchase 145,399 shares of common stock at an exercise price of $12.00 per share (the “Series C Warrant”), (ii) Series D warrants to purchase 193,865 shares of common stock at an exercise price of $9.37 per share (the “Series D Warrant”), (iii) Series E warrants to purchase 145,399 shares of common stock at an exercise price of $15.00 per share (the “Series E Warrant. The Series C, Series D and Series E warrants were determined to have an estimated aggregate fair value of $969, $470, and $1,048, respectively. The Series C Warrants entitle the holders to purchase shares of common stock for a period of 66-months from the grant date, The Series D Warrants entitle the holders to purchase shares of common stock for a period of 6-months from the grant date and the Series E Warrants entitle the holders to purchase shares of common stock for a period of 90-months from the grant date.In addition, the Company granted Make-Whole Shares, which provides for the issuance of up to 193,865 additional shares of common stock in the event that the closing price of our common stock is below $14.06 (subject to adjustment) on the twelve month anniversary of the date of issuance. The Make-Whole Shares, which were determined to have an estimated fair value of $1,049 as of the issuance date, qualified for equity accounting treatment since the economic characteristics of the Make-Whole Shares were determined to be clearly and closely related to the economic characteristics of our common stock under ASC 815, "Derivatives and Hedging." Accordingly the Make-Whole Shares were not bifurcated and accounted separate from the issued shares.

The following table summarizes information about warrants granted during 2014 and outstanding and exercisable at December 31, 2014.

		Number of		Shares Underlying		Shares Underlying		Shares Underlying
		Shares		Warrants		Warrants		Warrants
		Underlying		Exchanged,		Outstanding		Exercisable at				Expiration
		Warrants		Exercised		at December,		December 31,		Exercise		Term in
Description	Grant Date	Granted		or Expired		2014		2014		Price		Years
Series A	January 27, 2014		315,676		-		315,676		315,676	$	15.00		2.08
Series B	January 27, 2014		157,846		-		157,846		157,846	$	45.00		4.07
Series C	November 19, 2014		145,399		-		145,399		-	$	12.00		5.38
Series D	November 19, 2014		193,865		-		193,865		193,865	$	9.37		0.38
Series E	November 19, 2014		145,399		-		145,399		-	$	15.00		7.38
			958,185		-		958,185		667,387

The following table summarizes the activities in warrants for the years ended December 31, 2014 and 2013:

				Weighted
	Shares			Average
	Underlying			Exercise
	Warrants			Price
Balance at December 31, 2012		3,000		$	50.00
Warrants granted		-			-
Warrants exercised		-			-
Warrants cancelled/exchanged/expired		(3,000	)		50.00
Balance at December 31, 2013		-		$	-
Warrants granted		958,185			18.35
Warrants exercised		-			-
Warrants cancelled/exchanged/expired		-			-
Balance at December 31, 2014		958,185		$	18.35

The following table summarizes the assumptions used to value the warrants at the issuance date using the Black-Scholes option pricing model:

		Number of Shares		Stock
		Underlying		Price on
		Warrants		Measurement		Exercise		Expected		Expected			Dividend			Risk Free
Description	Grant Date	Granted		Date		Price		Term		Volatility			Yield			Rate
Series A	1/27/2014		315,676	$	7.00	$	15.00		3.00		150.00	%		0.00	%		0.76	%
Series B	1/27/2014		157,846	$	7.00	$	45.00		5.00		150.00	%		0.00	%		1.61	%
Series C	11/19/2014		145,399	$	9.37	$	12.00		5.50		94.60	%		0.00	%		1.64	%
Series D	11/19/2014		193,865	$	9.37	$	9.37		0.50		93.44	%		0.00	%		0.07	%
Series E	11/19/2014		145,399	$	9.37	$	15.00		7.50		94.60	%		0.00	%		1.64	%
			958,185

A Monte-Carlo Simulation Model was used to estimate the fair value of the Make-Whole Shares. The model includes subjective input assumptions that can materially affect the fair value estimates. The expected volatility is estimated based on the most recent historical period of time equal to the remaining contractual term of the instrument granted. The following table summarizes the principal assumptions used in applying the model to estimate the fair value of the Make-Whole Shares at the issuance date:

Volatility		95	%
Risk-Free Interest Rate		1.47	%
Expected Term in Years		1.00 years
Dividend Rate		0.00	%
Fair Value of Common Stock Share	$	9.37