Warrant Liabilities

9 Months Ended

Sep. 30, 2014

Warrant Liabilities [Text Block]

12.	Warrant Liabilities
	In connection with our August 30, 2012 private financing, we issued 977,063 warrants to investors and the broker. In accordance with FASB ASC 815-40-15-5, “Determining Whether an Instrument (or Embedded Feature) is Indexed to an Entity’s Own Stock”, the warrants have been characterized as derivative liabilities to be re- measured at the end of every reporting period with the change in value reported in the consolidated statement of operations. On August 30, 2012, such warrants were valued at $1,525,000 utilizing a valuation model and were initially recorded as a liability. The warrants are revalued each quarter based on the Monte Carlo valuation, however, as of September 30, 2014, we utilize the Black-Scholes Merton model as an estimate of the Monte Carlo valuation.
	As of September 30, 2014 and December 31, 2013, the warrant liability was re-valued as disclosed in Note 8, Fair Value Measurement, and was adjusted to its current fair value of approximately $620,000 and $1,344,000 as determined by the Company, resulting in a loss of approximately $656,000 for the nine months ended September 30, 2014. During the nine months ended September 30, 2014, 440,813 warrants were exercised at an exercise price $1.50 for gross proceeds received of $661,220.