Annual report pursuant to Section 13 and 15(d)

Stockholders' Equity

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Stockholders' Equity
 12 Months Ended
Jun. 30, 2013
Stockholders Equity Note [Abstract]  
Stockholders Equity Note Disclosure [Text Block]
11.
Stockholders’ Equity
 
Preferred Stock
The Company’s Board of Directors is authorized to issue, at any time, without further stockholder approval, up to 1 million shares of preferred stock. The Board of Directors has the authority to fix and determine the voting rights, rights of redemption and other rights and preferences of preferred stock. As of June 30, 2013, there were no shares of preferred stock issued and outstanding.
 
Common Stock
As of June 30, 2013, the Company was authorized to issue up to 100 million shares of common stock, of which approximately 56.7 million shares were issued and outstanding. As of June 30, 2013, the Company had reserved up to 10 million shares of common stock for incentive compensation (stock options and restricted stock) and approximately 25.4 million shares of common stock for the exercise of warrants.
 
Warrants
The Company has historically financed its operations through the sale of common stock and warrants, sold together as units. The financing transactions reflected in the accompanying financial statements are described in detail below.
 
The following table summarizes all warrant activity for the year ended June 30, 2013:
 
 
 
Warrants
 
Weighted-
average
Exercise
Price
 
Outstanding as of June 30, 2012
 
 
20,940,796
 
$
1.39
 
Granted - consulting services
 
 
100,000
 
$
1.00
(1)
Granted - April 2013 equity offering
 
 
3,570,000
 
$
0.53
 
Granted – Anti-dilution adjustment on August 2008 warrants
 
 
785,144
 
$
1.75
 
Outstanding as of June 30, 2013
 
 
25,395,940
 
$
1.23
(2)
 
 
 
 
 
 
 
 
Exercisable as of June 30, 2013
 
 
25,395,940
 
$
1.23
(2)
 
(1) See Note 13 – Share-based Compensation
(2) Includes the effect of reduction in exercise price for previously granted August 2008 warrants.
 
April 2013 Equity Offering
On April 26, 2013, the Company, under its effective Registration Statement on Form S-3 (File No. 333-175420) (the “Registration Statement”), raised approximately $3.8 million in net proceeds by issuing 8,925,000 shares of common stock and warrants to purchase up to 3,570,000 shares of common stock. The common stock and warrants were sold together as units (the “2013 Units”), with each 2013 Unit consisting of one share of common stock and 0.40 (or 4/10ths) of one warrant to purchase one share of common stock. The public offering price of each 2013 Unit was $0.48. The warrants have an exercise price of $0.53 per share, are immediately exercisable and will expire on the third anniversary of the date of issuance.
 
Prior to this offering, there were outstanding approximately 4.2 million August 2008 Warrants. In connection with this offering, the anti-dilution provision was triggered and the Company was required to both increase the number of shares issuable upon exercise and decrease the exercise prices of the August 2008 Warrants. As a result, the number of August 2008 Warrants outstanding increased by approximately 0.8 million and the exercise prices decreased from $1.82 and $2.34 per share to $1.53 and $1.97 per share, respectively. After this adjustment, there were outstanding approximately 2.5 million warrants with an exercise price of $1.53 per share and approximately 2.5 million warrants with an exercise price of $1.97 per share. There was no change in the expiration date of the August 2008 Warrants as a result of this adjustment. See Note 17 – Subsequent Events regarding the expiration of the August 2008 Warrants in August 2013.
 
January 2013 ATM Facility
On January 31, 2013, the Company entered into an At-the-Market Equity Offering Sales Agreement (the “ATM Facility”) with Further Lane Securities, L.P. (“Further Lane”) pursuant to which the Company could sell, at its option, up to an aggregate of $10 million in shares of its common stock through Further Lane, as sales agent. The Company agreed to pay Further Lane a commission equal to 3% of the gross proceeds from the sale of shares of its common stock under the ATM Facility, if any. The Company also agreed to reimburse Further Lane for certain expenses incurred in connection with entering into the ATM Facility and provided Further Lane with customary indemnification rights.
 
There were no sales of the Company’s common stock pursuant to the ATM Facility during the year ended June 30, 2013. The Company incurred legal, accounting and filing fees of approximately $121,000, including expenses reimbursed to Further Lane, in connection with entry into the ATM Facility. As a result of the Company’s decision to move forward with an alternate financing strategy that effectively eliminated the capacity under the Registration Statement necessary to utilize the ATM Facility, these costs were charged to general and administrative expenses for the three months ended March 31, 2013. On April 26, 2013, the Company voluntarily terminated the ATM Facility prior to making any sales of its common stock under such agreement.
 
January 2012 Equity Offering
On January 13, 2012, the Company, under its effective Registration Statement, raised approximately $9.0 million in net proceeds by issuing 15,385,000 shares of common stock and warrants to purchase up to 11,538,750 shares of common stock. The common stock and warrants were sold together as units (the “2012 Units”), with each 2012 Unit consisting of one share of common stock and 0.75 (or 3/4ths) of one warrant to purchase one share of common stock. The public offering price of each 2012 Unit was $0.65. The warrants have an exercise price of $0.88 per share, became exercisable on the first anniversary of the date issuance and will expire on the second anniversary of the date of issuance, which is January 13, 2014.
 
Prior to this offering, there were outstanding approximately 2.8 million August 2008 Warrants. In connection with this offering, the anti-dilution provision was triggered and the Company was required to both increase the number of shares issuable upon exercise and decrease the exercise prices of the August 2008 Warrants. As a result, the number of August 2008 Warrants outstanding increased by approximately 1.4 million and the exercise prices decreased from $2.68 and 3.45 per share to $1.82 and $2.34 per share, respectively. After this adjustment, there were outstanding approximately 2.1 million warrants with an exercise price of $1.82 and approximately 2.1 million warrants with an exercise price of $2.34 per share. There was no change in the expiration date of the August 2008 Warrants as a result of this adjustment. See Note 17 – Subsequent Events regarding the expiration of the August 2008 Warrants in August 2013.