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Warrants

9 Months Ended

Sep. 30, 2015

9.	WARRANTS

On October 29, 2015 a 1:40 reverse split of the Company stock occurred and the effect has been applied retroactively for disclosure purposes.

For the nine month period ended September, 2015, 37,500 warrants were granted to two consultants for service provided. One consultant was granted 25,000 warrants with exercise price of $10.00, vesting over two years and the expiration date is June 16, 2018. The other consultant was granted 12,500 warrants with exercise price of $10.00, vesting over one year and the expiration date is June 25, 2018.

The Company uses the Black-Scholes warrant pricing model to estimate the fair value of warrants as of September 30, 2015.

The following table summarizes the assumptions used to estimate the fair value of warrants granted during the nine months ended September 30, 2015:

	2015
Expected dividend yield	0%
Expected volatility	124%
Risk-free interest rate	0.21 - 0.78%
Expected life of warrants	1.39 – 2.20 years

Under the Black-Scholes warrant price model, fair value of the warrants granted is estimated at $120,054. During the nine months ended September 30, 2015, $39,881 compensation expense was recognized.

The following table represents warrant activity as of and for the period ended September 30, 2015:

	Number of Warrants			Weighted Average Exercise Price	Contractual Life in Years		Intrinsic Value
Outstanding – December 31, 2014	12,129		$	206.86	2.04
Exercisable – December 31, 2014	12,129		$	206.86	2.04	$	0.00
Granted	37,500		$	10.00

Forfeited or Expired	(297	)	$	101.12
Outstanding – September 30, 2015	49,332		$	57.85	2.38
Exercisable – September 30, 2015	15,582		$	161.50	1.67	$	0.00