The Company has issued multiple warrant series, of which the 2017 PIPE Warrants and the 2018 PIPE Warrants (the “Warrants”) remain outstanding at June 30, 2020 and are considered liabilities pursuant to the guidance established by ASC 815 Derivatives and Hedging.

The Company accounts for the Warrants in accordance with the guidance in ASC 815. As indicated below, the Company may be obligated to settle Warrants in cash. The Company classified the Warrants as long-term liabilities at their fair value and will re-measure the warrants at each balance sheet date until they are exercised or expire. Any change in the fair value is recognized as other income (expense) in the Company’s condensed consolidated statements of operations.

As of June 30, 2020, the fair value of the Series C Warrants was zero as the warrants had expired. This balance is consistent with the balance as of December 31, 2019.

The Company calculated the fair value of the Series C Warrants as of December 31, 2019 using a Black-Scholes pricing model. The Black-Scholes pricing model requires the input of highly subjective assumptions including the expected stock price volatility. The Company used the following inputs.

	December 31, 2019
Volatility		90	%
Contractual term (years)		0.17
Expected dividend yield		—	%
Risk-free rate		1.52	%

The 2017 PIPE Warrants were issued on December 15, 2017 in the 2017 PIPE Offering, pursuant to a Warrant Agreement with each of the investors in the 2017 PIPE Offering, and entitle the holder of each of the 8,141,116 units to purchase 0.74 shares of the Company’s common stock at an exercise price equal to $2.00 per share, subject to adjustment as discussed below, at any time commencing upon issuance of the 2017 PIPE Warrants and terminating on December 15, 2020.

The exercise price and number of shares of common stock issuable upon exercise of the 2017 PIPE Warrants may be adjusted in certain circumstances, including the event of a stock split, stock dividend, extraordinary dividend, or recapitalization, reorganization, merger or consolidation. However, the exercise price of the 2017 PIPE Warrants will not be reduced below $1.72.

In the event of a change of control of the Company, the holders of unexercised warrants may present their unexercised warrants to the Company, or its successor, to be purchased by the Company, or its successor, in an amount equal to the per share value determined by the Black Scholes methodology.

As of June 30, 2020, the fair value of the 2017 PIPE Warrants was estimated at $4.2 million. The decrease in the fair value of the liability for the 2017 PIPE Warrants of $3.4 million during the three months ended June 30, 2020 and the decrease in the fair value of $6.6 million during the six months ended June 30, 2020 were recorded as other income (expense) in the condensed consolidated statements of operations.

The Company has calculated the fair value of the 2017 PIPE Warrants as of June 30, 2020 using a Black-Scholes pricing model, and the fair value as of December 31, 2019 using a Monte Carlo simulation of a geometric Brownian motion model. Both models requires the input of highly subjective assumptions including the expected stock price volatility. The following summarizes certain key assumptions used in estimating the fair values.

	June 30, 2020			December 31, 2019
Volatility		115	%		99	%
Contractual term (years)		0.5			1.0
Expected dividend yield		—	%		—	%
Risk-free rate		0.20	%		1.60	%

The 2018 PIPE Warrants were issued on December 19, 2018 in the 2018 PIPE Offering, pursuant to a Warrant Agreement with each of the investors in the 2018 PIPE Offering, and entitle the holders of each of the 10,272,375 units to purchase 0.05 shares of the Company’s common stock at an exercise price equal to $2.00 per share, subject to adjustment as discussed below, at any time commencing upon issuance of the 2018 PIPE Warrants and terminating on December 21, 2023.

The exercise price and number of shares of common stock issuable upon exercise of the 2018 PIPE Warrants may be adjusted in certain circumstances, including the event of a stock split, stock dividend, extraordinary dividend, or recapitalization, reorganization, merger or consolidation. However, the exercise price of the 2018 PIPE Warrants will not be reduced below $2.00.

As of June 30, 2020, the fair value of the 2018 PIPE Warrants was estimated at $0.7 million. The $0.4 million decrease in the fair value of the liability for the 2018 PIPE Warrants during the three months ended June 30, 2020 and the decrease in the fair value of $0.6 million during the six months ended June 30, 2020 were recorded as other income (expense) in the condensed consolidated statements of operations.

The Company has calculated the fair value of the 2018 PIPE Warrants as of June 30, 2020 using a Black-Scholes pricing model, and the fair value as of December 31, 2019 using a Monte Carlo simulation of a geometric Brownian motion model. Both models require the input of highly subjective assumptions including the expected stock price volatility. The following summarizes certain key assumptions used in estimating the fair values.

	June 30, 2020			December 31, 2019
Volatility		94	%		99	%
Contractual term (years)		3.5			4.0
Expected dividend yield		—	%		—	%
Risk-free rate		0.20	%		1.56	%

The Black-Scholes pricing model and the Monte Carlo simulation of a geometric Brownian motion model require the use of highly subjective assumptions to estimate the fair value of stock-based awards. These assumptions include the following estimates.