| Accounting Changes and Error Corrections [Text Block] |
12.
Restatements
Subsequent
to filing its Annual Report on Form 10-K for the year ended
December 31, 2012 with the SEC on March 11, 2013, the Company
determined that it should have used derivative liability
accounting to account for the fair value of the warrants
issued in the Company’s July PIPE Financing. The
Company previously recorded all of the net proceeds from the
July PIPE Financing as equity. In recording the net proceeds
received, due to the down round provision associated with the
exercise price of the warrants, the fair value of the
warrants should have been recorded as a derivative liability
as of the transaction date with a corresponding decrease to
equity. Changes in the fair value of these warrants should
have been recognized as other income or expense in the
statements of operations.
The
Company has calculated the fair value of the warrants issued
in the July PIPE Financing at the transaction date and for
each relevant reporting period using the Monte Carlo
simulation valuation method. The Company has restated its
previously issued financial statements to correct the
non-cash errors related to derivative liability accounting
for warrants issued in the July PIPE Financing.
The
impact of the restatements is reflected below for the periods
indicated:
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As of December 31, 2012
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As of September 30, 2012
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As
previously
reported
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Adjustment
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Restated
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As previously
reported
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Adjustment
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Restated
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Balance sheet:
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Total assets
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$
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5,551,746
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$
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-
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$
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5,551,746
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$
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7,493,553
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$
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-
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$
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7,493,553
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Current liabilities:
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Derivative liabilities
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$
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789
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$
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2,128,302
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$
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2,129,091
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$
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7,439
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$
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3,644,458
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$
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3,651,897
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All other current liabilities
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4,179,186
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-
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4,179,186
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6,235,291
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-
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6,235,291
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Total current liabilities
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4,179,975
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2,128,302
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6,308,277
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6,242,730
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3,644,458
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9,887,188
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All other liabilities
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7,108,872
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-
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7,108,872
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7,028,098
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-
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7,028,098
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Total liabilities
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11,288,847
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2,128,302
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13,417,149
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13,270,828
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3,644,458
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16,915,286
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Additional paid-in capital
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60,953,692
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(1,957,720
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)
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58,995,972
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60,357,805
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(1,957,720
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)
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58,400,085
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Accumulated deficit
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(65,495,746
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)
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(170,582
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)
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(65,666,328
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)
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(64,937,533
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)
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(1,686,738
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)
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(66,624,271
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)
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Other stockholders' equity
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(1,195,047
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)
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-
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(1,195,047
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)
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(1,197,547
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)
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-
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(1,197,547
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)
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Total deficit
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(5,737,101
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)
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(2,128,302
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)
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(7,865,403
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)
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(5,777,275
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)
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(3,644,458
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)
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(9,421,733
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)
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Total liabilities and stockholders' deficit
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$
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5,551,746
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$
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-
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$
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5,551,746
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$
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7,493,553
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$
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-
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$
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7,493,553
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Year Ended December 31, 2012
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Three Months Ended September 30, 2012
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Nine Months Ended September 30, 2012
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As previously
reported
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Adjustment
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Restated
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As previously
reported
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Adjustment
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Restated
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As previously
reported
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Adjustment
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Restated
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Statements of operations:
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Operating loss
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$
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(3,129,278
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)
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$
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-
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$
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(3,129,278
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)
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$
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(1,017,039
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)
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$
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-
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$
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(1,017,039
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)
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$
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(2,648,008
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)
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$
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-
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$
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(2,648,008
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)
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Gain (loss) on change in fair value of derivative
liabilities
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(789
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)
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(170,582
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)
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(171,371
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)
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19,106
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(1,686,738
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)
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(1,667,632
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)
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(7,439
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)
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(1,686,738
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)
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(1,694,177
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)
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All other income (expense)
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(2,577,069
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)
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-
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(2,577,069
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)
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(76,622
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)
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-
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(76,622
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)
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(2,493,476
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)
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-
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(2,493,476
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)
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Net Loss
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$
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(5,707,136
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)
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$
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(170,582
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)
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$
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(5,877,718
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)
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$
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(1,074,555
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)
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$
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(1,686,738
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)
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$
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(2,761,293
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)
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$
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(5,148,923
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)
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$
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(1,686,738
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)
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$
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(6,835,661
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)
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Net loss per share (basic and diluted)
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$
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(0.14
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)
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$
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(0.01
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)
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$
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(0.15
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)
|
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$
|
(0.02
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)
|
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$
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(0.04
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)
|
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$
|
(0.06
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)
|
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$
|
(0.14
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)
|
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$
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(0.04
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)
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$
|
(0.18
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)
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Certain amounts in the related statements of cash flows have
been corrected, but those changes do not impact the net cash
provided from or used in operating, investing or
financing activities.
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