Annual report pursuant to Section 13 and 15(d)

Warrant Derivative Liability

v2.4.0.8
Warrant Derivative Liability
 12 Months Ended
Jun. 30, 2013
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Instruments and Hedging Activities Disclosure [Text Block]
10.
Warrant Derivative Liability
 
As of June 30, 2013, approximately 5.0 million outstanding warrants for the purchase of the Company’s common stock, issued in August 2008 as part of the spin-off from Integrated BioPharma, Inc. and expired in August 2013 (the “August 2008 Warrants”), 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 approximately $0 and $520,000 as of June 30, 2013 and 2012, respectively.
 
The following table summarizes the inputs and assumptions used to calculate the fair value of the warrant derivative liability:
 
 
 
June 30,
 
June 30,
 
 
 
2013
 
2012
 
Common stock price
 
 
$0.42
 
 
$0.76
 
Exercise price
 
 
$1.53 - $1.97
 
 
$1.82 - $2.34
 
Risk-free interest rate
 
 
0.04%
 
 
0.2%
 
Dividend yield
 
 
0%
 
 
0%
 
Volatility
 
 
97.9%
 
 
100.0%
 
Remaining contractual term (in years)
 
 
0.2
 
 
1.2