Equity Facilities

12 Months Ended

Sep. 30, 2011

Equity Facilities [Abstract]

Equity Facilities [Text Block]

Equity Facilities

2009 Equity Facility

In October 2009, we entered into a committed equity line financing facility (2009 Equity Facility) with Commerce Court Small Cap Value Fund, Ltd. (Commerce Court) pursuant to which we may, upon the terms and subject to the conditions set forth therein, require Commerce Court to purchase up to $25.0 million in shares of our common stock over the 24-month term. In consideration for Commerce Court’s execution and delivery of the 2009 Equity Facility, we issued Commerce Court 185,085 shares of our common stock, paid $45,000 of Commerce Court’s legal fees and expenses, and issued three warrants representing the right to purchase up to an aggregate of 1,600,000 shares of our common stock, as follows: 

• a warrant, pursuant to which Commerce Court may purchase up to 666,667 shares of common stock at an exercise price of $1.69;

• a warrant, pursuant to which Commerce Court may purchase from up to 666,667 shares of common stock at an exercise price of $2.02; and,

• a warrant, pursuant to which Commerce Court may purchase up to 266,666 shares of common stock at an exercise price of $2.36.

These warrants are still outstanding and expire on April 1, 2015.  If our common stock trades at a price greater than 140% of the exercise price of any warrant for a period of 10 consecutive trading days and we meet certain equity conditions, then we have the right to affect a mandatory exercise of such warrant.

On October 1, 2009, we recorded $0.2 million related to the issuance of the 185,185 shares of common stock. The fair value of the common stock was based on a closing price of $1.23 per share on October 1, 2009. In March 2010, we sold 1,870,042 shares of our common stock to Commerce Court pursuant to the 2009 Equity Facility at an average price of approximately $1.07 per share. We received $2.0 million from the sale of common stock; with the total discount to volume weighted average price calculated on a daily basis totaling $0.1 million, which was recorded as a non-operating expense within the consolidated statement of operations and comprehensive loss. The 2009 Equity Facility was terminated in August 2011.

2011 Equity Facility

In August 2011, we entered into a committed equity line financing facility (2011 Equity Facility) with Commerce Court pursuant to which we may, upon the terms and subject to the conditions set forth therein, require Commerce Court to purchase up to $50.0 million in shares of our common stock over the 24-month term.

Once presented with a draw down notice, Commerce Court is required to purchase a pro-rata portion of the shares on each trading day during the trading period on which the daily volume weighted average price for our common stock exceeds a threshold price determined solely by us for such draw down. The per share purchase price for these shares will equal the daily volume weighted average price of our common stock on each date during the draw down period on which shares are purchased, less a discount of 5%. If the daily volume weighted average price of our common stock falls below the threshold price on any trading day during a draw down period, Commerce Court will not purchase the pro-rata portion of shares of common stock allocated to that day. We agreed to a placement agent fee equal to 1% of the aggregate dollar amount of common stock purchased by Commerce Court upon settlement of each such sale.

In consideration for Commerce Court’s execution and delivery of the 2011 Equity Facility, we issued Commerce Court 110,947 shares of our common stock and also paid $25,000 of Commerce Court’s legal fees and expenses.

We entered into a registration rights agreement with Commerce Court, pursuant to which we granted to Commerce Court certain registration rights related to the shares of our common stock that are issuable in accordance with the 2011 Equity Facility. We filed the registration statement on Form S-1 with the SEC on September 13, 2011 and we received a Notice of Effectiveness from the SEC on September 28, 2011. As of September 30, 2011, there were no draw down transactions completed under the 2011 Equity Facility.