I like the concept of the game, and the single play-test session revealed the concept will probably work, but for now I am suspending any further development on the game.
I need to stay focused, and for the foreseeable future that means staying focused on the development of REFORM SCHOOL NINJA GIRLS. Since the girls are set in the DINO-PIRATES OF NINJA ISLAND universe, that means developing the universe further is worthwhile, but building a brand-new set of rules for running games here is just not a good use of my time. I've already got three entirely separate rule sets for games in this world, so maybe a fourth just isn't super necessary.
That said, I believe Initiative! is a unique game concept and captures a really fun model for conflict and story-telling. So I'm releasing it under a Creative Commons Share-Alike Attribution license, which means you can copy it and do whatever you want with it.
Have fun! And please let me know if you end up using it for anything; I'd love to hear about it.