Quarterly report pursuant to Section 13 or 15(d)

10. Warrants

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10. Warrants
9 Months Ended
Dec. 31, 2016
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Warrants

During the nine months ended December 31, 2016, we issued warrants in connection with two financing arrangements. The first warrant issuance during the nine month period was the issuance of 30,000 warrants with an exercise price of $5.00 per share in June 2016. Those 30,000 warrants were issued in connection with the Amendment of November 2014 Investment Documents (see Note 6).

 

The second warrant issuance was the issuance of 127,575 warrants with an exercise price of $4.50 per share in December 2016. Those 127,575 warrants were issued in connection with the issuance of our December 2016 10% Convertible Notes (see Note 6).

 

A summary of warrant activity during the nine months ended December 31, 2016 is presented below:

 

    Amount     Range of
Exercise
Price
    Weighted
Average
Exercise
Price
 
Warrants outstanding at March 31, 2016     2,164,094       $2.10 - $15.00     $ 6.68  
Exercised     (2,660 )     $6.25     $ 6.25  
Issued     157,575       $4.60     $ 4.60  
Cancelled/Expired     (43,163 )     $6.25     $ 6.25  
Warrants outstanding at December 31, 2016     2,275,846       $2.10 - $15.00     $ 5.27  
Warrants exercisable at December 31, 2016     2,275,846       $2.10 - $15.00     $ 5.27  

   

The following outlines the significant weighted average assumptions used to estimate the fair value information presented, with respect to warrants utilizing the Binomial Lattice option pricing models at, and during the nine months ended December 31, 2016:

 

Risk free interest rate 0.70% - 1.93%  
Average expected life  3.5 years – 5 years
Expected volatility   91.5% -- 93.7%
Expected dividends  None

 

The expected volatility was based on the historic volatility. The expected life of options granted was based on the "simplified method" as described in the SEC's guidance due to changes in the vesting terms and contractual life of current option grants compared to our historical grants.

 

Based on the above assumptions, we valued the warrants issued during the nine months ended December 31, 2016 as follows:

 

· The 30,000 warrants issued in June 2016 were valued at $111,900 and classified that fair value as equity.
· The 127,575 warrants issued in December 2016 were valued at $380,174 and we classified $232,718 of that fair value as debt discount and the remainder as equity.