Quarterly report pursuant to Section 13 or 15(d)

WARRANT DERIVATIVE LIABILITY

v3.4.0.3
WARRANT DERIVATIVE LIABILITY
 9 Months Ended
Mar. 31, 2016
Derivative Liabilities [Abstract]  
WARRANT DERIVATIVE LIABILITY
NOTE 7 - WARRANT DERIVATIVE LIABILITY
 
At March 31, 2016 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 estimated fair values at the issuance date and are revalued at each subsequent reporting date, using the Black-Scholes valuation model. These warrants were determined to have an estimated fair value per share and aggregate value as of March 31, 2016 and an aggregate value as of June 30, 2015 as follows:
 
 
 
Issued Warrants
 
Estimated
Fair Value Per
Share $
as of
March 31,
2016
 
Estimated
Total Fair Value in
Aggregate $
as of
March 31,
2016
 
Estimated
Total Fair Value in
Aggregate $
as of
June 30,
2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
June 2012 Warrants
 
 
562,551
 
$
0.008
 
$
1,000
 
$
4,000
 
July 2012 Warrants
 
 
338,013
 
 
0.008
 
 
1,000
 
 
3,000
 
August 2012 Warrants
 
 
120,719
 
 
0.009
 
 
1,000
 
 
1,000
 
October 2012 Warrants
 
 
48,287
 
 
0.009
 
 
-
 
 
1,000
 
Advisory Agreement Warrants
 
 
1,837,777
 
 
0.011
 
 
4,000
 
 
14,000
 
Total
 
 
2,907,347
 
 
 
 
$
7,000
 
$
23,000
 
 
Significant assumptions used to estimate the fair value of the warrants classified as derivative liabilities are summarized below:
 
 
 
As of
March 31, 2016
 
 
As of
June 30, 2015
 
Risk-free interest rate
 
 
0.25% - 0.65
%
 
 
0.62% - 0.76
%
Expected life (average)
 
 
1.20 – 2.58 years
 
 
 
1.96 - 2.34 years
 
Stock price (based on prices on valuation date)
 
$
0.045
 
 
$
0.05
 
Exercise price
 
$
0.18
 
 
$
0.27
 
Expected volatility
 
 
100
%
 
 
100
%
 
The change in the estimated fair value of warrants classified as derivative liabilities during the nine months ended March 31, 2016 and 2015 was $16,000 and $498,000, respectively, and is included as a component of other income (expense) in the accompanying condensed consolidated statements of operations.