Correction of Errors

3 Months Ended

Mar. 31, 2014

Accounting Changes and Error Corrections [Abstract]

Accounting Changes and Error Corrections [Text Block]

6. Correction of Errors

The Company’s previously issued March 31, 2014 financial statements have been restated to remove deemed dividends which were accrued on its preferred shares and to recognize an increase in derivative expense due to adding several features to the valuation model used to measure the compound derivatives and changing from a Black-Scholes valuation model to a Monte Carlo valuation model. Additional paid in capital and accumulated deficit have been reduced by $8,464,000 to reflect the elimination of deemed dividends. Loss on derivative liabilities increased by $1,870,000 to $9,428,000 due to the change in the valuation model.

The Company also contracted a valuation team to review the purchase price allocation of Biocontrol. As a result, in process research and development (IPR&D) was restated and a new intangible asset, patents, was recognized. For the Biocontrol acquisition, $493,000 of IPR&D was reclassified to patents. In addition, amortization expense for patents was recognized in the three month period ending March 31, 2014 and the three month period ending March 31, 2013.

As a result of these corrections, the Company’s net loss for the period ending March 31, 2014 increased by $1,885,000 to $12,029,000. The net loss per share decreased by $0.03 per share to $(0.07) per share which reflected both the increased net loss and the removal of the deemed dividends. The Company’s net loss for the period ending March 31, 2013 increased $7,000 to $1,619,000. The net loss per share remained the same.