STOCK OPTIONS AND WARRANTS

12 Months Ended

Dec. 31, 2013

Stock Options And Warrants

STOCK OPTIONS AND WARRANTS

Warrants

A summary of the Company’s warrant activity for the years ended December 31, 2013 and 2012 is presented below:

	Warrants Outstanding			Weighted Average Exercise Price
Outstanding, January 19, 2012		-		$	-
Outstanding Warrants Assumed with Merger on October 15, 2012		145,185			52.00
Exercised		-			-
Expired		(12,845	)		154.00
Outstanding, December 31, 2012		132,340		$	43.00
Granted		12,470,514			0.30
Exercised		-			-
Expired		(12,387	)		3.20
Outstanding, December 31, 2013		12,590,467		$	0.55

As of December 31, 2013, the Company had the following outstanding warrants to purchase its Common Stock:

Warrants Outstanding		Weighted Average Exercise Price Per Share		Weighted Average Remaining Life (Yrs)
	62,453	$	30.00		2.06
	57,500	$	25.00		0.50
	3,038,243	$	0.25		4.56
	9,432,271	$	0.30		4.90
	12,590,467	$	0.55		4.79

Non-Qualified Stock Options

In 2013, the Company granted 245,739 stock options pursuant to an option agreement with one employee.  The grant date fair value of the options granted during the year ended December 31, 2013 was $0.35 per share for a total of $86,009 to be expensed over the vesting periods of the options.  Such fair values were estimated using the Black-Scholes stock option pricing model and the following weighted average assumptions.

	2013
Expected life	2.5 years
Estimated volatility		75.0	%
Risk-free interest rate		0.65	%
Dividends		-

The weighted average estimated fair value per share of the stock options at grant date was $0.35 during the year ended December 31, 2013.  The expected life of options granted is based on the “simplified method” described in ASC 718-10 due to changes in the vesting terms and the contractual life of current option grants.  Assumed volatility is based on the historical volatility of companies within the similar industry.  The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods corresponding to the expected term of the options.

Stock option activity during the years ended December 31, 2013 and 2012 is summarized as follows:

	Number of Shares			Weighted-Average Exercise Price
Options outstanding at January 19, 2012		-		$	-
Exercised		-			-
Granted		3,870,387			0.69
Forfeited		-			-
Expired		-			-
Options outstanding at December 31, 2012		3,870,387		$	0.69
Exercised		-			-
Granted		245,739			1.10
Forfeited		(122,868	)		1.02
Expired		-			-
Options outstanding at December 31, 2013		3,993,258		$	0.70

The following table summarizes information about the Company’s stock options outstanding as of December 31, 2013:

		Outstanding Options
				Weighted Average				Exercisable Options
				Remaining		Aggregate				Aggregate
Range of				Contractual Life		Intrinsic				Intrinsic
Exercise Prices		Number		(Years)		Value		Number		Value
$	0.61		3,133,172		3.17	$	-		1,310,610	$	-
$	1.10		245,739		4.50		-		-		-
$	1.017		614,347		3.60		-		245,740	$	-
Totals			3,993,258		3.32	$	-		1,556,350	$	-