XML 58 R12.htm IDEA: XBRL DOCUMENT

7. Outstanding Warrants

9 Months Ended

Sep. 30, 2013

Text Block [Abstract]

7. Outstanding Warrants

During the three and nine months ended September 30, 2013, the Company issued 2,150,000 and 5,818,439 common stock warrants, which have the potential to enhance returns for accredited investors who entered into additional Notes, Warrant Purchase Agreements, equity offering agreements as well as provide incentives to certain employees and board members. The accredited investors received 2 to 10 year warrants exercisable between $0.01 and $0.50 per share in the equity offering agreements as part of debt or fees payment agreements. Employee and board members were offered common stock warrants at $0.40 per share during the three months ended September 30, 2013.

For the three and nine months ended September 30, 2013, Equity and Note investors exercised 5,855 and 2,638,636 warrant shares at the weighted average exercise price of $0.13 to $0.01, respectively, per share.

A summary of warrant activity for the three and nine months ended September 30, 2013 follows:

		Warrants Outstanding & Exercisable				Weighted - Average Exercise Price				Average Remaining Term in Years
Outstanding December 31, 2012			1,806,923			$	0.27				2.67
Expired			(1,390	)			0.001
Granted			1,253,101				0.001
Exercised			(1,448,610	)			0.001
Outstanding March 31, 2013			1,610,024			$	0.30				2.14
Expired			(285,234	)			1.20
Granted			2,415,338				0.26
Exercised			(1,184,171	)			0.03
Outstanding June 30, 2013			2,555,957			$	0.29				5.57
Expired			(2,378	)			0.13
Granted			2,150,000				0.40
Exercised			(5,855	)			0.13
Outstanding September 30, 2013			4,697,724			$	0.34				5.11

Tabular disclosure of warrants or rights issued. Warrants and rights outstanding are derivative securities that give the holder the right to purchase securities (usually equity) from the issuer at a specific price within a certain time frame. Warrants are often included in a new debt issue to entice investors by a higher return potential. The main difference between warrants and call options is that warrants are issued and guaranteed by the company, whereas options are exchange instruments and are not issued by the company. Also, the lifetime of a warrant is often measured in years, while the lifetime of a typical option is measured in months. Disclose the title of issue of securities called for by warrants and rights outstanding, the aggregate amount of securities called for by warrants and rights outstanding, the date from which the warrants or rights are exercisable, and the price at which the warrant or right is exercisable.

+ References+ Details