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WARRANT LIABILITY
9 Months Ended
Sep. 30, 2013
Warrant Liability [Abstract]  
WARRANT LIABILITY

NOTE 8 – WARRANT LIABILITY

 

On December 31, 2012, the Company entered into an Investment Agreement, a Technology and Services Agreement, a Technology and Services Agreement with Zaah Technologies, Inc. (“Zaah”)., a Patent and Technology License Agreement, and an Asset Purchase Agreement (collectively the “Agreements”). Included in these Agreements were Warrants to purchase shares of the Company’s common stock.

 

The warrants associated with these Agreements are subject to anti-dilution adjustments outlined in the Agreements. In accordance with FASB ASC 815, the warrants were classified as a liability in the total amount of $2.4 million at December 31, 2012. In addition, the warrants must be valued every reporting period and adjusted to market with the increase or decrease being adjusted through earnings. As of September 30, 2013, the value of the warrants increased to $5,200,000 resulting in a charge to income of $5,984,749 for the three months ended September 30, 2013 and a charge to expense of $2,800,000 for the nine months ended September 30, 2013.