12.

WARRANTS

As described above in Footnote #3 – Related Party Transactions, on September 26, 2018, the Company issued 100,000 warrants outside its 2015 Equity Plan to Global Security Innovative Strategies, LLC (“GSIS”) with an exercise price of $1.00 per share and an expiration date of September 26, 2022 and which were immediately vested. The Company recognized $36,150 in compensation for the nine months ended September 30, 2018.

The following table summarizes the assumptions used to estimate the fair value of the 560,000 stock warrants granted during the nine months ended September 30, 2018 on the date of grant.

	2018

Expected dividend yield		0	%
Expected volatility		91	%
Risk-free interest rate		2.89	%
Expected life of options		4.00 years

Under the Black-Scholes option pricing model, the fair value of the 100,000 warrants granted during the nine months ended September 30, 2018 is estimated at $36,150 on the date of grant. During the nine months ended September 30, 2018, $36,150 compensation expense was recognized on these 100,000 warrants.

The following table represents warrant activity as of and for the period ended September 30, 2018:

	Number of Warrants			Weighted Average Exercise Price per Share		Weighted Average Contractual Life in Years		Aggregate Intrinsic Value
Outstanding – December 31, 2017		2,232,500		$	1.36		4.34
Exercisable – December 31, 2017		2,232,500		$	1.36		4.34	$	0
Granted		100,000		$	1.00
Forfeited or Expired		(37,500	)	$	10.00
Outstanding – September 30, 2018		2,295,000		$	1.20		3.67	$	0
Exercisable – September 30, 2018		2,295,000		$	1.20		3.67	$	0