| Schedule of derivative warrant instruments activity |
| |
|
Units |
|
|
Fair Value |
|
| |
|
|
|
|
|
|
Balance, December 31, 2010 |
|
|
- |
|
|
$ |
- |
|
Warrants issued with Convertible Notes (See Note 5) |
|
|
287,061 |
|
|
|
377,150 |
|
Placement agent warrants related to issuance of Convertible Notes (See Note 5) |
|
|
143,532 |
|
|
|
188,579 |
|
Warrants issued with Stock Offering (See Note 9) |
|
|
1,972,785 |
|
|
|
2,591,900 |
|
Placement agent warrants related to issuance of stock (See Note 9) |
|
|
986,393 |
|
|
|
1,295,950 |
|
Change in fair value |
|
|
- |
|
|
|
(13,966 |
) |
| |
|
|
|
|
|
|
|
|
Balance, December 31, 2011 |
|
|
3,389,771 |
|
|
|
4,439,613 |
|
| |
|
|
|
|
|
|
|
|
Warrants issued with Stock Offering (See Note 9) |
|
|
242,190 |
|
|
|
318,087 |
|
Placement agent warrants related to Stock Offering (See Note 9) |
|
|
121,095 |
|
|
|
159,044 |
|
Warrants issued with 2012 Common Stock Offering-A (See Note 9) |
|
|
3,118,988 |
|
|
|
1,409,554 |
|
Warrants issued with 2012 Common Stock Offering-B (See Note 9) |
|
|
1,559,505 |
|
|
|
1,665,697 |
|
Placement agent warrants related to 2012 Common Stock Offering (See Note 9) |
|
|
467,845 |
|
|
|
499,707 |
|
Transfer from liability classification to equity classification |
|
|
(3,753,056 |
) |
|
|
(4,231,324 |
) |
Change in fair value |
|
|
- |
|
|
|
(685,420 |
) |
| |
|
|
|
|
|
|
|
|
Balance, December 31, 2012 |
|
|
5,146,338 |
|
|
$ |
3,574,958 |
|
|
| Summary of fair values of derivative warrants on basis of valuation model |
| |
December 31, |
|
January 31, |
|
December 19, |
|
December 27, |
|
December 31, |
| |
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
Market value of common stock on measurement date (1) |
$0.37 |
|
$0.37 |
|
$0.39 |
|
$0.39 |
|
$0.39 |
Adjusted exercise price |
$0.24 - $0.26 |
|
$0.23 - $0.26 |
|
$0.41 - $0.83 |
|
$0.22 - $0.26 |
|
$0.41 - $0.83 |
Risk free interest rate (2) |
1.35% |
|
1.24% |
|
0.10% - 0.77% |
|
0.94% |
|
0.10% - 0.77% |
Warrant lives in years |
7 years |
|
7 years |
|
4 months/5years |
|
6 years |
|
4 months/5years |
Expected volatility (3) |
156% |
|
157% |
|
125% - 161% |
|
161% |
|
125% - 161% |
Expected dividend yield (4) |
- |
|
- |
|
- |
|
- |
|
- |
Probability of stock offering in any period over 5 years (5) |
25% |
|
25% |
|
25% |
|
25% |
|
25% |
Range of percentage of existing shares offered (6) |
35% |
|
35% |
|
35% |
|
35% |
|
35% |
Offering price range (7) |
$0.18 - $0.55 |
|
$0.13 - $0.56 |
|
$0.01 - $0.55 |
|
$0.12 - $0.60 |
|
$0.01 - $0.55 |
(1) |
The market value of common stock is based on an enterprise valuation. |
(2) |
The risk-free interest rate was determined by management using the average of 5 and 7 year and the 3-month Treasury Bill as of the respective measurement date. |
(3) |
Because the Company does not have adequate trading history to determine its historical trading volatility, the volatility factor was estimated by management using the historical volatilities of comparable companies in the same industry and region. |
(4) |
Management determined the dividend yield to be 0% based upon its expectation that it will not pay dividends for the foreseeable
future. |
(5) |
Management has determined that the probability of a stock offering is 25% for each quarter of the next five years. |
(6) |
Management estimates that the range of percentages of existing shares offered in each stock offering will be between 35% of the shares outstanding. |
(7) |
Represents the estimated offering price range in future offerings as determined by management. |
|