Quarterly report pursuant to Section 13 or 15(d)

WARRANT DERIVATIVE LIABILITY

v2.4.0.8
WARRANT DERIVATIVE LIABILITY
 3 Months Ended
Mar. 31, 2014
Derivative Liabilities [Abstract]  
WARRANT DERIVATIVE LIABILITY
NOTE 7 – Warrant Derivative Liability
 
At March 31, 2014, there were 2,907,347 outstanding warrants classified as derivative liabilities due to adjustment in exercise price as a result of an anti-dilution provision included in the underlying warrant agreements.
 
Repricing of Warrants
 
On March 13, 2014, our Board of Directors approved to amend the exercise price of 2,907,347 common share purchase warrants issued in connection with the completed 2012 Private Placements. As a result of a certain anti-dilution provision in the outstanding warrants, the exercise price of the 2,907,347 common share purchase warrants were reduced to $0.27 from $0.41 per warrant share and applies to all warrants issued in our 2012 Private Placements. The remaining terms, including expiration dates, of all warrants remain unchanged. The modified exercise price of the warrants to $0.27 resulted in a repricing modification charge of $98,000.
 
Warrants classified as derivative liabilities are recorded at their estimated fair values at the issuance date and are revalued at each subsequent reporting date. Warrants were determined to have an estimated fair value per share and aggregate value as of March 31, 2014, and in aggregate value as of June 30, 2013 as follows:
 
 
 
Issued Warrants
 
Estimated Fair
Value Per Share
as of March 31,
2014
 
 
Estimated Total
Fair Value in
Aggregate $ as
of March 31,
 2014
 
 
Estimated Total
Fair Value in
Aggregate $ as 
of June 30,
 2013
 
 
 
 
 
 
 
 
 
 
 
 
 
 
June 2012 Warrants
 
562,551
 
$
0.28
 
$
156,000
 
$
27,000
 
July 2012 Warrants
 
338,013
 
 
0.28
 
 
94,000
 
 
17,000
 
August 2012 Warrants
 
120,719
 
 
0.28
 
 
34,000
 
 
6,000
 
October 2012 Warrants
 
48,287
 
 
0.28
 
 
14,000
 
 
3,000
 
Advisory Agreement Warrants
 
1,837,777
 
 
0.28
 
 
510,000
 
 
90,000
 
 
 
2,907,347
 
 
 
 
$
808,000
 
$
143,000