Quarterly report pursuant to Section 13 or 15(d)

WARRANTS

v2.4.0.8
WARRANTS
 6 Months Ended
Jun. 30, 2014
Notes to Financial Statements  
Note 11. WARRANTS

The Company has the following shares of common stock reserved for the warrants outstanding as of June 30, 2014:

 

    June 30, 2014  
          Weighted  
          Average  
          Exercise  
    Shares     Price  
Warrants outstanding – beginning of year     19,550,817     $ 0.17  
Warrants exercised     (9,367,287 )     0.19  
Warrants granted     5,701,754       0.30  
Warrants expired     -       -  
                 
Warrants outstanding – end of period     15,885,284     $ 0.21  

 

The weighted exercise price and weighted fair value of the warrants granted by the Company as of June 30, 2014, are as follows:

 

    June 30, 2014  
    Weighted        
    Average     Weighted  
    Exercise     Average  
    Price     Fair Value  
             
Weighted average of warrants granted during the three months whose exercise price exceeded fair market value at the date of grant   $ 0.30     $ 0.45  
                 
Weighted average of warrants granted during the nine months whose exercise price was equal or lower than fair market value at the date of grant   $ -     $ -  

 

The following table summarizes information about fixed-price warrants outstanding:

 

      Number     Average        
Range of     Outstanding at     Remaining     Weighted  

Exercise

Prices

    

June 30,

2014

    

Contractual

Life

    

Average

Exercise Price

  
                         
$0.33     5,540,400     13 Months     $0.33  
$0.46     600,000     13 Months     $0.46  
$ 0.46     150,000     7 Months     $0.46   
$0.85     40,000     10 Months     $0.85  
$0.40     333,333     14 Months     $0.40  
$0.33     439,637     17 Months     $0.33  
$ 0.16     750,000     21 Months     $0.16  
$0.06     7,067,002     51 Months     $0.06  
$0.30     964,912     47 Months     $0.30  
        15,885,284                

 

For the warrants issued in February 2014, the Company valued the warrants utilizing the black schools method with the following inputs: stock price of $0.57, exercise price of $0.330, volatility of 122.84%, years 4, treasury bond rate 2.5% and dividend rate of 0%.

 

For the warrants issued in March 2014, the Company valued the warrants utilizing the black schools method with the following inputs: stock price of $0.50, exercise price of $0.30, volatility of 122.61%, years 4, treasury bond rate 2.5% and dividend rate of 0%.

 

For the warrants issued in April 2014, the Company valued the warrants utilizing the black schools method with the following inputs: stock price of $0.80, exercise price of $0.30, volatility of 125.88%, years 4, treasury bond rate 2.5% and dividend rate of 0%.

 

For the warrants issued in May 2014, the Company valued the warrants utilizing the black schools method with the following inputs: stock price of $0.59, exercise price of $0.30, volatility of 127.68%, years 4, treasury bond rate 2.5% and dividend rate of 0%.

 

For the warrants issued in June 2014, the Company valued the warrants utilizing the black schools method with the following inputs: stock price of $0.68, exercise price of $0.30, volatility of 130.55%, years 4, treasury bond rate 2.5% and dividend rate of 0%.

 

The warrant expense of $2,979,953 was based on the Black Scholes calculation which was expensed during the six months ended June 30, 2014.