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Share warrants
A summary of warrant activity during the years ended March 31, 2007 and 2008 is presented below:
|
|
Number
|
|
Average Purchase
Price Per Share $
|
||||
|
Shares purchasable under outstanding warrants at March 31, 2006
|
14,082,500
|
0.09
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|||||
|
Stock purchase warrants issued
|
2,331,572
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0.15
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|||||
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Stock purchase warrants exercised
|
(11,236,500
|
)
|
0.09
|
||||
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Shares purchasable under outstanding warrants at March 31, 2007
|
5,177,572
|
0.11
|
|||||
|
Stock purchase warrants issued
|
-
|
-
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|||||
|
Stock purchase warrants exercised
|
(2,681,000
|
)
|
0.08
|
||||
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Stock purchase warrants expired
|
(165,000
|
)
|
0.08
|
||||
|
Shares purchasable under outstanding warrants at March 31, 2008
|
2,331,572
|
0.15
|
In August and September 2006, as an inducement for early warrant exercise, the Company offered to holders of outstanding “A” and “B” Warrants (issued in connection with a common stock offering in February 2006) a new warrant exercisable for 25% of the shares issued exercisable at $.15 per share through August 31, 2009 (“New Warrant”). A total of 9,218,750 warrants were exercised for cash proceeds of $786,719 and debt reduction of $89,062 and the Company issued 2,304,692 New Warrants.
Two officers exercised 500,000 warrants for cash of $47,500 and were granted 125,000 New Warrants on the same terms as other investors.
In August and September 2006, as an inducement for early warrant exercise of Series EE Warrants, the Company offered holders a New Warrant equal to 12% of the shares issued upon exercise. A total of 224,000 warrants were exercised for cash proceeds of $17,920 and the Company issued 26,880 New Warrants.
The Company recorded a non-cash other expense in the statement of operations for $230,709 during fiscal 2007 representing the fair value of the 2,331,572 New Warrants issued as an inducement for early exercise. Fair value was determine using the Black-Scholes option pricing model assuming no expected dividends, 120% volatility, expected life of 3 years and a risk-free interest rate of 4.85%.
During the year ended March 31, 2007 a total of 1,793,750 other warrants were exercised for cash proceeds of $129,844 and debt reduction of $16,000. During the year ended March 31, 2008 a total of 2,681,000 warrants were exercised for cash proceeds of $214,480. No inducement was granted in connection with these warrant exercises.
At March 31, 2008 the Company had 2,331,572 outstanding share warrants exercisable through August 31, 2009, entitling the holders to purchase one common share at $0.15 per common share for each warrant held (subject to certain future antidilution price protection):
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