6. Warrant Liabilities

Liabilities measured at market value on a recurring basis include warrant liabilities resulting from the Company’s past equity financings, including the underwritten public offering that closed on August 1, 2011. In accordance with ASC 815-40, Derivatives and Hedging – Contracts in Entity’s Own Equity (“ASC 815-40”), the warrant liabilities are being marked to market until they are completely settled. The warrants are valued using the Black-Scholes method, using assumptions consistent with our application of ASC 505-50, Equity-Based Payments to Non-Employees (“ASC 505-50”). The gain or loss resulting from the marked to market calculation is shown on the Consolidated Statements of Operations as gain (loss) on warrant derivative liability. The Company recognized a gain (loss) of $2.9 million and ($8.5) million for the three-month periods ended June 30, 2013 and 2012, respectively, and a gain (loss) of $0.8 million and ($12.4) million for the six-month periods ended June 30, 2013 and 2012, respectively.

The following reflects the weighted-average assumptions for each of the six-month periods indicated:


	Six Months			Ended June 30,
	2013			2012

Risk-free interest rate		0.63	%		0.54	%
Expected dividend yield		0	%		0	%
Expected lives		2.96			3.90
Expected volatility		67.3	%		86.3	%
Warrants classified as liabilities	$	3,133,743		$	19,155,292
Gain (loss) on warrant liabilities	$	838,487		$	(12,416,358	)

The dividend yield assumption of zero is based upon the fact that the Company has never paid and presently has no intention of paying cash dividends. The risk-free interest rate used for each warrant classified as a derivative is equal to the U.S. Treasury rates in effect at June 30th. The expected lives are based on the remaining contractual lives of the related warrants at the valuation date.