Equity Credit Agreement	6 Months Ended
Jun. 30, 2011
Equity Credit Agreement	On September 16, 2010, the Company entered into a Private Equity Credit Agreement (the “Equity Credit Agreement”) with Southridge Partners II, LP (the “Investor”), a limited partnership organized and existing under the laws of the State of Delaware and an affiliate of Southridge. Pursuant to this Equity Credit Agreement, the Investor shall commit to purchase upon to $25 million of the Company’s common stock over the course of thirty-six months commencing the effective date of the initial Registration Statement covering the Registrable Securities pursuant to the Equity Credit Agreement. The put option price is 95% of the average of three lowest closing bid price (the “Bid Price”) of any two applicable trading days, consecutive or inconsecutive, during the five trading day period (the “Valuation Period”) commencing the date a put notice (the “Put Notice”) is delivered to the Investor (the “Put Date”) in a manner provided by the Equity Credit Agreement. In addition, pursuant to the Equity Credit Agreement, in each Put Notice, the Company is required to specify a minimum stock price which in no event shall be less than 80% of the average of the closing Bid Price for the five trading days ending immediately prior to the Put Date (the “Floor Price”). In the event the Bid Price decreases below the Floor Price during the Valuation Period, the Investors obligation to fund one-fifth of the put amount for each such trading day shall terminate and the put amount shall be adjusted accordingly. The “Registrable Securities” include the Put Shares, any Blackout Shares (as defined in the Equity Credit Agreement) and any securities issued or issuable with respect to any of the foregoing by way of exchange, stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization or otherwise. Upon execution of the Equity Credit Agreement, the Company issued 820,856 warrants to the Investor in accordance with the Transaction Management Agreement (as defined herein) with Southridge. The exercise price is equal to 120% of the average closing price of the Company’s stock for the previous 20 days or $1.52. The fair value of the warrants totaling $881 thousand have been recognized as prepaid financing costs as of the agreement date and are amortized over the life of the agreement or 36 months. On December 7, 2011, the Company filed a Registration of Form S-1 which was subsequently amended on January 13, 2011 to register 13,000,000 shares of the Company’s common stock to be issued under the terms of the Equity Credit Agreement. The Registration Statement was declared effective January 26, 2011. From January 26, to June 30, 2011, the Investor purchased 703 thousand shares of common stock pursuant to the terms of the Equity Credit Agreement, for which the proceeds to the Company totaled $109 thousand. These proceeds are net of expenses of $126 thousand associated with the warrants issued to the Investor upon execution of the Equity Credit Agreement.

Equity Credit Agreement

6 Months Ended

Jun. 30, 2011

On September 16, 2010, the Company entered into a Private Equity Credit Agreement (the “Equity Credit Agreement”) with Southridge Partners II, LP (the “Investor”), a limited partnership organized and existing under the laws of the State of Delaware and an affiliate of Southridge. Pursuant to this Equity Credit Agreement, the Investor shall commit to purchase upon to $25 million of the Company’s common stock over the course of thirty-six months commencing the effective date of the initial Registration Statement covering the Registrable Securities pursuant to the Equity Credit Agreement. The put option price is 95% of the average of three lowest closing bid price (the “Bid Price”) of any two applicable trading days, consecutive or inconsecutive, during the five trading day period (the “Valuation Period”) commencing the date a put notice (the “Put Notice”) is delivered to the Investor (the “Put Date”) in a manner provided by the Equity Credit Agreement.

In addition, pursuant to the Equity Credit Agreement, in each Put Notice, the Company is required to specify a minimum stock price which in no event shall be less than 80% of the average of the closing Bid Price for the five trading days ending immediately prior to the Put Date (the “Floor Price”). In the event the Bid Price decreases below the Floor Price during the Valuation Period, the Investors obligation to fund one-fifth of the put amount for each such trading day shall terminate and the put amount shall be adjusted accordingly.

The “Registrable Securities” include the Put Shares, any Blackout Shares (as defined in the Equity Credit Agreement) and any securities issued or issuable with respect to any of the foregoing by way of exchange, stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization or otherwise.

Upon execution of the Equity Credit Agreement, the Company issued 820,856 warrants to the Investor in accordance with the Transaction Management Agreement (as defined herein) with Southridge. The exercise price is equal to 120% of the average closing price of the Company’s stock for the previous 20 days or $1.52. The fair value of the warrants totaling $881 thousand have been recognized as prepaid financing costs as of the agreement date and are amortized over the life of the agreement or 36 months.

On December 7, 2011, the Company filed a Registration of Form S-1 which was subsequently amended on January 13, 2011 to register 13,000,000 shares of the Company’s common stock to be issued under the terms of the Equity Credit Agreement. The Registration Statement was declared effective January 26, 2011. From January 26, to June 30, 2011, the Investor purchased 703 thousand shares of common stock pursuant to the terms of the Equity Credit Agreement, for which the proceeds to the Company totaled $109 thousand. These proceeds are net of expenses of $126 thousand associated with the warrants issued to the Investor upon execution of the Equity Credit Agreement.

CURAXIS PHARMACEUTICAL Corp 10-Q