Annual report pursuant to Section 13 and 15(d)

Warrant Derivative Liability

v2.4.0.8
Warrant Derivative Liability
 12 Months Ended
Jun. 30, 2014
Derivative Liabilities [Abstract]  
Warrant Derivative Liability
NOTE 8 - Warrant Derivative Liability
 
At June 30, 2014 there were 2,907,347 outstanding warrants classified as derivative liabilities due to exercise price re-set provisions included in the underlying warrant agreements.
 
Warrants classified as derivative liabilities are recorded at their fair values at the issuance date and are revalued at each subsequent reporting date, using a Monte Carlo simulation model. Warrants were determined to have a fair value per share and aggregate value as of June 30, 2014 and in aggregate value as of June 30, 2013 as follows:
 
 
 
Issued Warrants
 
 
 
Fair Value Per 
Share $ as of 
June 30, 2014
 
 
Total Fair Value in 
Aggregate $ as of 
June 30, 2014
 
 
Total Fair Value in 
Aggregate $ as of 
June 30, 2013
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
June 2012 Warrants
 
 
562,551
 
$
 
 
0.20
 
 
$
110,000
 
 
$
27,000
 
July 2012 Warrants
 
 
338,013
 
$
 
 
0.20
 
 
$
67,000
 
 
$
17,000
 
August 2012 Warrants
 
 
120,719
 
$
 
 
0.20
 
 
$
24,000
 
 
$
6,000
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
October 2012 Warrants
 
 
48,287
 
$
 
 
0.20
 
 
$
10,000
 
 
$
3,000
 
Advisory Agreement Warrants
 
 
1,837,777
 
$
 
 
0.20
 
 
$
360,000
 
 
$
90,000
 
Total
 
 
2,907,347
 
 
 
 
 
 
 
$
571,000
 
 
$
143,000
 
 
Significant assumptions used to estimate the fair value of the warrants classified as derivative liabilities at June 30, 2014 are summarized below:
 
Risk-free interest rate
 
 
1.00% – 0.86
%
Expected life (average)
 
 
2.96 - 3.17 years
 
Stock price (based on prices on valuation date)
 
$
0.30
 
Exercise price
 
$
0.26
 
Expected volatility
 
 
100
%