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WARRANTS

12 Months Ended

Jun. 30, 2015

13. WARRANTS

All warrants outstanding as of June 30, 2015 were exercisable. The following table shows exercise prices and expiration dates for warrants outstanding as of June 30, 2015:

		Exercise
Warrants		Price		Expiration
Outstanding		Per Share		Date
	4,264,000	$	2.61	September 18, 2016
	45,000	$	2.10	December 31, 2017
	4,309,000

Warrant activity for the years ended June 30, 2015, 2014, and 2013 was as follows:

	Warrants
Outstanding at June 30, 2012		8,045,619
Issued		45,000
Exercised		(399,597	)
Expired		(329,314	)
Outstanding at June 30, 2013		7,361,708
Issued		-
Exercised		(2,090,226	)
Expired		(962,482	)
Outstanding at June 30, 2014		4,309,000
Issued		-
Exercised		-
Expired		-
Outstanding at June 30, 2015		4,309,000

On May 12, 2010, in conjunction with a public offering, the Company issued warrants to purchase 2,753,454 shares of Common Stock, exercisable at $1.13 per share at any time prior to December 31, 2013. During the years ended June 30, 2014 and 2013, 2,090,226 and 369,287 of these warrants were exercised at $1.13 per share for cash proceeds of $2,361,956 and $417,294, respectively. Warrants to purchase 58,527 shares of Common Stock expired unexercised on December 31, 2013.

In conjunction with this public offering, the Company also issued to the placement agent warrants to purchase 165,207 and 15,717 shares of Common Stock, exercisable at $1.13 per share at any time prior to May 12, and July 7, 2013, respectively. During the year ended June 30, 2013 the placement agent elected cashless exercises of 36,186 warrants resulting in the issuance of 17,094 shares of Common Stock and exercised warrants to purchase 13,216 shares of Common Stock at $1.13 per share for cash proceeds of $14,934. Warrants to purchase 1,258 shares of Common Stock expired unexercised in May 2013.

On March 17, 2011, in conjunction with a private placement offering the Company issued warrants to purchase up to 3,900,000 shares of Common Stock, exercisable at $2.6058 per share. Additionally, the Company issued the placement agent in this offering warrants to purchase 364,000 shares of common stock at $2.6058 per share. The 4,264,000 warrants are exercisable from September 18, 2011 through September 18, 2016. As of June 30, 2015, no warrants have been exercised under this offering.

The 3,900,000 warrants issued under this private placement offering contain a provision that if a Fundamental Transaction occurs, notably a change in control, the warrant holder may require the Company to pay the Black-Scholes calculated value of the then unexercised warrant to the warrant holder in cash. As such the Company has recorded a liability of $978,353 and $585,209 at June 30, 2015 and 2014, respectively, for the estimated fair value of the warrants in its Consolidated Balance Sheet (see Note 9). Period to period changes in the fair value of these warrants are reflected through income.

In conjunction with the Loan and Security agreement (Note 7) and as a condition of the Bank entering into the First Amendment, the Company issued to the Bank warrants to purchase up to 45,000 shares of Common Stock of the Company. The warrants are exercisable at any time prior to December 31, 2017 at an exercise price of $2.10 per share. Upon the issuance of the warrants, the fair value of the warrants was $55,962 using a Black Scholes model, which was recorded as prepaid interest and included in other assets on the Consolidated Balance Sheet, and is being amortized as non-cash interest expense over the remaining term of the Line of Credit as amended in January 2013. Non-cash interest of $0, $2,095 and $53,867 has been recognized for the years ended June 30, 2015, 2014 and 2013, respectively. As of June 30, 2015 none of these warrants has been exercised.