NeuBase Therapeutics, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

WARRANTS

WARRANTS

9 Months Ended

Jun. 30, 2011

NOTE 9 - WARRANTS

The Company has determined the estimated value of the warrants granted to employees and non-employees in exchange for services and financing expenses using the Black-Scholes pricing model and the following assumptions: stock price at valuation, $0.21-$0.52; expected term of 3-5 years, exercise price of $0.50-$0.60, a risk free interest rate of 1.15-2.60%, a dividend yield of 0% and volatility of 132-435%.

Between October 29 and December 4, 2009, the Company issued a total of 236,000 warrants for services rendered to the Company. As a result of this issuance, the Company recognized $88,562 in consulting expense.

On April 9, 2010 the Company granted 10,000 warrants as payment for an outstanding accounts payable balance of $3,991.

On June 22, 2010 the Company authorized the issuance of 93,000 warrants for services to the Company. Of these authorized warrants, 90,000 were issued on June 23, 2010 once the contract for services was finalized. These warrants have a 5 year term with a strike price of $0.50. The remaining 3,000 warrants were issued September 2, 2010. These warrants have a 3 year term with a strike price of $0.50. The combined value of these warrants was $41,129 at the time of issuance and the value was expensed as research and development expense.

In connection with the December 30, 2010, financing, the investors received 2,520,000 five year warrants to purchase common stock at an exercise price of $0.55 per share. The exercise price of these warrants contains certain reset provisions which require the fair value of the warrants to be reported as a liability and not in permanent equity. On the date of issuance, the Company calculated the fair value of these warrants to be $528,847 (see note 7). The total cash proceeds of $1,050,000 were first applied to the warrants with the remaining $521,153 being allocated to the common shares and being recorded in additional paid-in capital.

Between May 12 and June 13, 2011, the Company issued a total of 355,000 warrants for services rendered to the Company. Of these warrants, 55,000 vest immediately and 300,000 vest over a 12 month period and will be recognized over the term of the agreement. As a result of this issuance, the Company recognized $24,350 in consulting expense.

Below is a table summarizing the warrants issued and outstanding as of June 30, 2011.

Date	Number			Exercise		Contractual		Expiration	Value if
Issued	Outstanding			Price		Life (Years)		Date	Exercised
Balance 10/1/08		13,509,857			1.18		5	Various		15,941,631
03/20/09		5,000,000			0.50		5	03/31/14		2,500,000
06/03/09		11,166,672			0.18		5	06/03/14		2,010,001
09/30/09		150,000			0.40		5	06/30/14		60,000
Expired
Balance 9/30/09		29,826,529			0.69					20,511,632
10/09/09		88,000			0.50		5	10/29/14		44,000
11/09/09		18,000			0.50		5	11/09/14		9,000
12/04/09		130,000			0.60		2	12/04/11		78,000
12/15/09		(5,583,336	)		0.18					(1,005,000	)
01/15/10		5,583,336			0.55		5	01/15/15		3,070,835
01/15/10		(5,583,336	)		0.18					(1,005,000	)
04/13/10		10,000			0.55		5	04/13/15		5,500
07/23/10		93,000			0.50		3	07/23/13		46,500
Expired
Balance 9/30/10		24,582,193			0.89					21,755,467
12/30/10		2,520,000			0.55		5	12/30/15		1,386,000
05/12/11		25,000			0.50		5	5/12/2016		12,500
05/12/11		30,000			0.50		5	5/12/2016		15,000
06/13/11		25,000			0.50		2	6/13/2013		12,500
Expired		(1,090,568	)		1.19					(1,297,776	)
Balance 6/30/11		26,091,625			0.84					21,883,691

- Definition

Tabular disclosure of warrants or rights issued. Warrants and rights outstanding are derivative securities that give the holder the right to purchase securities (usually equity) from the issuer at a specific price within a certain time frame. Warrants are often included in a new debt issue to entice investors by a higher return potential. The main difference between warrants and call options is that warrants are issued and guaranteed by the company, whereas options are exchange instruments and are not issued by the company. Also, the lifetime of a warrant is often measured in years, while the lifetime of a typical option is measured in months. Disclose the title of issue of securities called for by warrants and rights outstanding, the aggregate amount of securities called for by warrants and rights outstanding, the date from which the warrants or rights are exercisable, and the price at which the warrant or right is exercisable.

+ References + Details