Quarterly report pursuant to Section 13 or 15(d)

Derivatives (Tables)

v2.4.0.6
Derivatives (Tables)
 3 Months Ended
Mar. 31, 2013
Derivatives [Abstract]  
Schedule of derivative warrant instruments activity
 
Units
    
Fair Value
  
             
Balance, December 31, 2012
    
5,146,338
     $
3,574,958
  
                 
Change in fair value
    
-
      
(1,334,512
)
                 
Balance, March 31, 2013
    
5,146,338
    
$
2,240,446
  
 
Summary of fair values of derivative warrants on basis of valuation model
 
 
     
 December 31,
    
 March 31,
     
 2012
    
 2013
             
Market value of common stock on measurement date (1)
    
$1.17
    
$1.17
Adjusted exercise price
    
$0.48 - $0.81
    
$0.78 - $2.475
Risk free interest rate (2)
    
$0.10 - $0.77
    
 1.24%
Warrant lives in years
    
4 months/5 years
    
 1 months/4.7 years
Expected volatility (3)
    
125% - 161%
    
161%
Expected dividend yield (4)
    
 -
    
 -
Probability of stock offering in any period over 5 years (5)
    
25%
    
25% - 40%
 
(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 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% - 40% for each quarter of the next five years.