Quarterly report pursuant to Section 13 or 15(d)

13. Warrants

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13. Warrants
3 Months Ended
Mar. 31, 2015
Notes to Financial Statements  
Note 13. Warrants

Unless sold and issued warrants are subject to the provisions of FASB ASC 815-10, the Company utilized a Black-Scholes options pricing model to value the warrants sold and issued. This model requires the input of highly subjective assumptions such as the expected stock price volatility and the expected period until the warrants are exercised. When calculating the value of warrants issued, the Company uses a volatility factor of 72.8%, a risk free interest rate and the life of the warrant for the exercise period. When sold and issued warrants were valued in accordance with FASB ASC 815-10, the fair value was determined using a Monte Carlo Simulation Model.

 

On February 20, 2015, the Company issued 8,151 warrants to purchase shares of common stock upon the conversion of a note principal and accrued interest totaling $32,603 (see Note 11).

 

On March 16, 2015, the Companies entered into a Waiver and Amendment to Financing Agreement, and Reaffirmation of Guaranty (the “Amendment”) with the Lender. Pursuant to the Amendment, the exercise price of the five year warrant previously issued to the Lender to purchase up to 12,500,000 shares of common stock was decreased to $0.50 per share, subject to adjustment in a manner similar to the adjustments on the Note.

 

The following table summarizes information about common stock warrants outstanding at March 31, 2015:

 

  Outstanding     Exercisable  
  Exercise
Price
    Number
Outstanding
    Weighted
Average
Remaining
Contractual
Life (years)
    Weighted
Average
Exercise
Price
    Number
Exercisable
    Weighted
Average
Exercise
Price
 
  $ 3.30       11,364       1.12     $ 3.30       11,364     $ 3.30  
    1.25       40,252       1.10       1.25       40,252       1.25  
    1.00       24,000       1.57       1.00       24,000       1.00  
    0.88 (1)     1,303,300       4.11       0.88       1,303,300       0.88  
    0.84 (2)     959,508       4.38       0.84       959,508       0.84  
    0.75       435,271       0.28       0.75       435,271       0.75  
    0.67 (3)     3,805,000       3.53       0.67       3,805,000       0.67  
    0.50       14,077,750       4.34       0.50       14,077,750       0.50  
  $ 0.50 - $3.30       20,656,445       4.33               20,656,445          

  

Note (1) On March 16, 2015, per the anti-dilution adjustment impact of an amendment to the Financing Agreement executed on that date, the conversion price for these warrants was decreased from $1.05 to $0.88.

 

Note (2) On March 16, 2015, per the anti-dilution adjustment impact of an amendment to the Financing Agreement executed on that date, the number of shares to be purchased with these warrants was increased from 809,974 to 959,508 shares and the conversion price was decreased from $0.99 to $0.84.

 

Note (3) On March 16, 2015, per the anti-dilution adjustment impact of an amendment to the Financing Agreement executed on that date, the conversion price for these warrants was decreased from $0.75 to $0.67.