Quarterly report pursuant to Section 13 or 15(d)

COMMON STOCK WARRANTS

v2.4.0.6
COMMON STOCK WARRANTS
 6 Months Ended
Mar. 31, 2013
Common Stock Warrants  
COMMON STOCK WARRANTS

NOTE 6 – COMMON STOCK WARRANTS

 

For all warrants included within permanent equity, the Company has determined the estimated value of the warrants granted to 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-$1.44; expected term of 3-5 years, exercise price of $0.50-$1.44, a risk free interest rate of 0.21-2.90 percent, a dividend yield of 0 percent and volatility of 114-276 percent. All warrants accounted for as a derivative liability have been valued using a Lattice Model as described in Note 2.

 

On October 30, 2012, the Company agreed to extend the term of the 11,985,367 common stock warrants issued to investors which were scheduled to expire on October 31, 2012, to April 30, 2013. The warrants were also amended to remove the cashless exercise provision and provided for the early termination of the extension period, at the sole discretion of the Company, in the event that the Company’s common stock trades at or above $1.50 for 5 consecutive days. The warrants are exercisable at $1.19.

 

On March 21, 2013, the Company issued a total of 170,000 warrants with a fair market value of $232,374 for services yet to be rendered to the Company. 120,000 warrants vest equally over the next four quarters from the date of issuance. 50,000 warrants vest equally over the next two quarters from the date of issuance. As of March 31, 2013, the Company has recorded $6,027 in consulting expense related to these warrants.

 

During the six months ended March 31, 2013, 2,757,136 warrants were exercised (see Note 5).

 

During the six months ended March 31, 2013, the Company recognized $178,697 of expense related to vested warrants that were granted in the prior year. Unamortized warrant expense as of December 31, 2012 amounted to approximately $23,000.

 

Below is a table summarizing the warrants issued and outstanding as of March 31, 2013:

 

 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)
04/09/10    10,000    0.55   5   4/9/2015    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    55,000    0.50   5   05/12/16    27,500
06/13/11    300,000    0.50   2   06/13/13    150,000
07/15/11    100,000    0.54   5   07/15/16    54,000
07/15/11    120,000    0.54   5   07/15/16    64,800
08/23/11    50,000    0.67   3   08/23/14    33,500
Expired    (1,090,568)    1.19   -   -    (1,297,776)
Balance 9/30/11    26,636,625    0.83   -   -    22,173,491
12/16/11    916,678    0.65   5   12/16/16    595,841
12/21/12    3,125    0.65   5   12/21/12    2,031
03/03/12    350,000    0.65   5   03/03/17    227,500
04/10/12    (43,392)    0.60   -   -    (26,035)
04/12/12    15,000    0.90   3   4/12/2015    13,500
05/18/12    350,000    0.95   3   5/18/2015    332,500
06/28/12    (5,299,002)    0.55   -   -    (2,914,451)
06/28/12    3,179,410    1.20   5   06/28/17    3,815,292
07/11/12    50,000    0.95   3   07/11/15    47,500
07/17/12    (30,000)    0.50   -   -    (15,000)
09/07/12    75,000    1.00   5   09/07/17    75,000
Expired    (620,530)    0.79   -   -    (490,219)
Balance 9/30/12    25,582,914    0.93   -   -    23,836,950
10/24/2012    (200,000)    0.50   -   -    (100,000)
3/7/2013    (20,988)    1.19   -   -    (24,976)
3/11/2013    (5,037)    1.19   -   -    (5,994)
3/21/2013    120,000    1.44   5   3/21/2018    172,800
3/21/2013    50,000    1.44   3   3/21/2016    72,000
3/22/2013    (11,111)    0.55   -   -    (6,112)
3/27/2013    (2,520,000)    0.55   -   -    (1,386,000)
Expired    -    -   -   -    -
Balance 3/31/2013    22,995,778    0.98   -   -    22,558,668

 

The outstanding warrants as of March 31, 2013 have an intrinsic value of approximately $7.5 million.