XML 59 R13.htm IDEA: XBRL DOCUMENT v2.4.0.8
Common Stock and Warrants
3 Months Ended
Dec. 31, 2013
Stockholders' Equity Note [Abstract]  
Common Stock and Warrants

Common stock

 

During the three months ended December 31, 2013, the company issued 17,689 shares of common stock, at $2.94 per share, and the Company recognized expense of $52,000 for services rendered.

 

On December 13, 2012, the Company entered into subscription agreements (“Subscription Agreement”) with fifty-five accredited investors pursuant to which the Company issued 427,998 shares of our common stock, $0.001 par value (the “Common Shares”) at a purchase price of $6.00 per share (the “Offering”). Pursuant to the terms of the Offering, the Company issued five year warrants to purchase up to an additional 83,333 shares of our common stock in the aggregate, at an exercise price of $7.50 per share, to one investors, and five year warrants to purchase up to 86,166 shares of our common stock in the aggregate, at an exercise price of $9.00 per share, to fifty-four investors. The Offering resulted in net proceeds to the Company of approximately $2,285,692 after deducting fees and expenses totaling $282,299.

 

On March 20, 2013, the Company amended its warrant and registration rights agreement whereby removing all terms that required net cash settlement. As a result, the Company reclassed 1,699,415 shares or $2,777,433 from redeemable common stock to common stock (classified as equity).

 

On July 15, 2013, the Company issued to a service provider 450,000 shares of common stock, at $2.25 per share, with a fair value of $1,012,500. During the period ended March 2013, the Company issued 11,167 shares of common stock to a contractor in exchange for programming services performed, at $6.00 per share, with a fair value of $67,002.

 

During the year ended September 30, 2012, the company issued 18,000 shares of common stock, at $6.00 per share, and the Company recognized expense of $108,000 for services rendered.

 

During the year ended September 30, 2013, the company issued 461,167 shares of common stock, at $2.34 per share, and the Company recognized expense of $1,079,502 for services rendered.

 

During the three months ended December 31, 2013, the company issued 17,639 shares of common stock, at $2.95 per share, and the Company recognized expense of $52,000 for services rendered.

 

Warrants

 

On June 10, 2013, the Company announced its intention to exercise certain classes of outstanding warrants that were initially issued to investors participating in private placement financings in 2010, 2011 and 2012 consisting of the following classes: (i) outstanding warrants to purchase an aggregate of 634,916 shares of the Company’s common stock issued to investors participating in the Company’s private placement financing completed on December 13, 2012 and November 30, 2012, of which 541,667 are exercisable at an exercise price of $7.50 per share (the “$7.50 December Warrants”) and 93,249 are exercisable at an exercise price of $9.00 per share (the “$9.00 December Warrants”); (ii) outstanding warrants to purchase an aggregate of 1,016,518 shares of the Company’s common stock issued to investors participating in the Company’s private placement financings closed on July 19, 2012, June 20, 2012, May 24, 2012 and March 31, 2012, of which 833,333 are exercisable at an exercise price of $7.50 per share (the “$7.50 Investor Warrants”) and 183,185 are exercisable at an exercise price of $9.00 per share (the “$9.00 Investor Warrants”); (iii) outstanding warrants to purchase an aggregate of 446,188 shares of the Company’s common stock issued to investors participating in the Company’s private placement financing completed on October 21, 2011 and November 21, 2011, of which 333,334 are exercisable at an exercise price of $7.50 per share (the “$7.50 2011 Warrants”) and 112,854 are exercisable at an exercise price of $9.00 per share (the “$9.00 2011 Warrants”); and (iv) outstanding warrants to purchase an aggregate of 431,950 shares of the Company’s common stock issued to investors participating in the Company’s private placement financings closed on November 16, 2010, of which 125,000 are exercisable at an exercise price of $6.00 per share (the “$6.00 2010 Warrants”) and 306,950 are exercisable at an exercise price of $9.00 per share (the “$9.00 2010 Warrants”).The warrant redemption was intended to raise non-dilutive capital.

 

A Notice of Election to Participate was provided to the affected warrant holders on June 10, 2013. These warrant holders had until 5:00 p.m. ET on July 15, 2013, to exercise their outstanding warrants at $2.25 per share. Pursuant to the Offer to Amend and Exercise, on July 15, 2013 an aggregate of 662,540 warrants were tendered by their holders and were amended and exercised in connection therewith for an aggregate exercise price of approximately $1,490,715, including the following warrants: 85,974 $9.00 December Warrants; 99,703 $9.00 Investor Warrants; 83,334 $7.50 Investor Warrants; 82,408 $9.00 2011 Warrants; 93,751 $7.50 2011 Warrants; 154,870 $9.00 2010 Warrants; and 62,500 $6.00 2010 Warrants.

 

In accordance with ASC 718- 20-35, short-term inducement modifications shall be treated as an exchange of the original award for a new award. In substance, the Company repurchases the original instrument by issuing a new instrument of equal or greater value, incurring additional expense for any incremental value. The effects of this modification (incremental cost) shall be measured as the excess, if any, of the fair value of the modified award determined over the fair value of the original award immediately before its terms are modified, measured based on the share price and other pertinent factors at that date. Total recognized cost for an equity award shall at least equal the fair value of the award at the grant date. As a result of this modification, there was no incremental cost.

 

In recompense for services performed on our behalf, we issued warrants to purchase up to 138,333 shares of our common stock during the three months ended December 31, 2013, including a five-year warrant to purchase up to 133,333 shares (exercise price of $2.00 per share) to a member of our Board of Directors and a five-year warrant to purchase up to 5,000 shares at $2.00 to our CFO (Chord Advisors, LLC).  The expense recorded for the three months ended December 31, 2013 for both of these items was $29,452.  In recompense for services performed on our behalf, we issued warrants to purchase up to 6,300,000 shares of our common stock during the three months ended December 31, 2012, including a five year warrant to purchase up to 2,000,000 shares (exercise price of $10.35 per share) to a member of our Board of Directors. During the three months ended December 31, 2013, we have not issued any warrants to advisors, consultants and in connection with the purchase of intellectual property.  Warrants to purchase up to 150,000 shares of common stock have expired.  Warrants to purchase up to 3,881,325 shares of common stock remain outstanding at December 31, 2013, of which 3,279,367 have vested.

 

For the three months ended December 31, 2013, we issued 200,000 warrants to new investors.  Through December 31, 2013, we have also issued warrants to purchase up to 4,917,276 shares of our common stock to investors (and as compensation to third parties in connection with investments) related to the sale of our common stock, 4,096,665 of which remain outstanding net of exercises, cancellations and expirations (all of which are fully vested).