Quarterly report pursuant to Section 13 or 15(d)

Warrant Derivative Liability

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Warrant Derivative Liability
 9 Months Ended
Mar. 31, 2013
Derivative Instruments and Hedging Activities Disclosure [Text Block]

7.    Warrant Derivative Liability


As of March 31, 2013, approximately 4.2 million of the Company’s outstanding warrants, issued in August 2008 as part of the spin-off from Integrated BioPharma, Inc. and expiring in August 2013, contained an anti-dilution provision which must be accounted for separately as a derivative liability and measured at fair value on a recurring basis. Changes in fair value are charged to other income or expense, as appropriate. The fair value of the warrant derivative liability is determined based on Level 2 inputs utilizing observable quoted prices for similar instruments in active markets and observable quoted prices for identical or similar instruments in markets that are not very active. Using the Black-Scholes option pricing model, the Company developed its own assumptions based on observable inputs and available market data to support the reported fair values of $16,668 and $519,725 as of March 31, 2013 and June 30, 2012, respectively. See Note 14 – Subsequent Events for additional information.


The following table summarizes the inputs and assumptions used to calculate the fair value of the warrant derivative liability:


    March 31,
2013 		  March 31,
2013 		  March 31,
2013 		  June 30,
2012 		  June 30,
2012 		  June 30,
2012
Common stock price       $0.54           $0.76    
Exercise price   $1.82   -   $2.34   $1.82   -   $2.34
Risk-free interest rate       0.1%           0.2%    
Dividend yield       0           0    
Volatility       98.6%           100.0%    
Remaining contractual term (in years)       0.4           1.2