Quarterly report pursuant to Section 13 or 15(d)

Derivatives (Tables)

v2.4.0.8
Derivatives (Tables)
 3 Months Ended
Mar. 31, 2014
Derivatives [Abstract]  
Schedule of derivative warrant instruments activity
   
Units
    
Fair Value
  
             
Balance, December 31, 2013
    
1,968,623
    
$
6,707,255
  
                 
Transfer from liability classification to equity classification
    
(46,025
)
    
(139,565
)
                 
Change in fair value
    
-
      
12,561,071
  
                 
Balance, March 31, 2014
    
1,922,598
    
$
19,128,761
 
Summary of fair values of derivative warrants on basis of valuation model
   
March 31,
    
December 31,
  
   
2014
    
2013
  
             
Market value of common stock on measurement date (1)
   $ 12.45     $ 5.89  
Adjusted exercise price
   $ 9.95     $ 2.48  
Risk free interest rate (2)
     1.32 %     1.27 %
Warrant lives in years
  
0.5 years
    
0.5 years
  
Expected volatility (3)
     71 %     73 %
Expected dividend yield (4)
     -       -  
Probability of stock offering in any period over 5 years (5)
     -       25 %
Range of percentage of existing shares offered (6)
     -       35 %
Offering price range (7)
   $ 9     $ 9  
 
 
(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 March 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)  
Management estimates that the range of percentages of existing shares offered in each stock offering will be 0% and 35% of the shares outstanding at March 31, 2014 and December 31, 2013, respectively.
 
 
(7)  
Represents the estimated offering price range in future offerings as determined by management.