Annual report pursuant to Section 13 and 15(d)

Derivatives (Tables)

v2.4.1.9
Derivatives (Tables)
 12 Months Ended
Dec. 31, 2014
Derivatives [Abstract]  
Schedule of derivative warrant instruments activity
    Shares subject to warrants     Fair Value  
             
Balance, December 31, 2012     5,146,338     $ 3,574,958  
                 
Transfer from liability to equity classification     (3,177,715 )     (1,047,095 )
                 
Change in fair value     -       4,179,392  
                 
Balance, December 31, 2013     1,968,623     $ 6,707,255  
                 
Transfer from liability to equity classification     (319,294 )     (2,203,443 )
                 
Change in fair value     -       2,206,099  
                 
Balance, December 31, 2014     1,649,329     $ 6,709,911  
 
Summary of fair values of derivative warrants on basis of valuation model

    December 31,     December 31,  
    2014     2013  
             
Market value of common stock on measurement date (1)   $ 5.89     $ 5.89  
Adjusted exercise price   $ 2.48     $ 2.48  
Risk free interest rate (2)     1.10 %     1.27 %
Warrant lives in years     3.0 years       0.5 years  
Expected volatility (3)     71 %     73 %
Expected dividend yield (4)     -       -  
Probability of stock offering in any period over 5 years (5)     100 %     25 %
Offering price (6)   $ 4.50     $ 9.00  

 

(1) The market value of common stock at the above measurement dates is based on the Company’s trading price quoted on the OTC Markets for December 31, 2013 and on the NYSE MKT for December 31, 2014.

  

(2) The risk-free interest rate was determined by management using the 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 determines the probability of future stock offering at each evaluation date.
   
(6) Represents the estimated offering price in future offerings as determined by management.