Note 9. Warrants

As of December 31, 2017, the Company had outstanding warrants to purchase 2,099,149 shares of common stock. The following table summarizes warrant activity as of December 31, 2017, 2016 and 2015:


		Weighted
		average
	Warrants	exercise price
Outstanding at December 31, 2014	230,409	$	1.30
Issued	42,059		5.94
Outstanding at December 31, 2015	272,468		2.02
Issued	65,228		7.41
Outstanding at December 31, 2016	337,696		3.06
Issued	1,890,602		5.33
Exercised	(129,149)		1.30
Outstanding at December 31, 2017	2,099,149	$	5.21

In connection with the the Registered Direct Offering, the Company issued Common Warrants and Placement Agent Warrants to purchase 1,783,587 shares and 107,015 shares of common stock, respectively, with an exercise price of $5.25 per share and $6.6562 per share, respectively, which are exercisable from the date of issuance until December 11, 2018. The Common Warrants and Placement Agent Warrants were classified as warrant liabilitity. See Note 3, “Fair Value Measurements”, for the fair value calculations of the warrant liability.

In connection with the Company’s debt financing which was completed on November 9, 2016, the Company issued warrants to purchase 65,228 shares of common stock with an exercise price of $7.41 per share, which are exercisable upon issuance. The warrants were classified as a component of stockholders' equity.

On November 3, 2014, the Company issued warrants to purchase 42,059 shares of common stock with an exercise price of $5.94 per share to the placement agent in connection with the issuance of the September 2014 Notes, which were exercisable upon issuance. The warrants were initially classified as a liability in the consolidated financial statements, as upon a qualified financing, as defined in the September 2014 Notes, the warrant price would automatically adjust to a 10% premium to the conversion price of the September 2014 Notes in such mandatory conversion. The initial fair value of the warrant liability was $79,129 which was recorded as a discount to the notes and amortized over the term of the original September 2014 Notes. Upon the note amendment that occurred in September 2015, the discount was included in the carrying amount in the calculation of a loss on extinguishment. In connection with the automatic conversion of the September 2014 Notes upon the close of the Company’s IPO in November 2015, the warrant liability was reclassified to equity. See Note 3, “Fair Value Measurements”, for the fair value calculations of the warrant liability.

On October 29, 2013, the Company issued warrants to purchase 230,409 shares of common stock with an exercise price of $1.30 per share to the placement agent in connection with the June 2013 Notes, which were exercisable upon issuance. The warrants were classified as a component of stockholders’ equity.

The value of the warrants issued in 2016 of $264,365 was determined using the Black-Scholes option-pricing model with the following assumptions:


Black-Scholes option valuation assumptions	2016
Risk-free interest rate	1.8	%
Dividend yield	—
Volatility	73	%
Weighted average contractual term	7 years