12. Warrants

During the six months ended June 30, 2013, we issued warrants to purchase 2,000,000 shares of our common stock in connection with 550,000 of the 1,375,000 shares of our common stock we issued for services provided to the Company. Of the 2,000,000 warrants issued, 1,000,000 warrants have an exercise price of $0.40 per share with a two year expiration and immediate vesting, and 1,000,000 had an exercise price of $0.20 per share with a one year expiration and immediate vesting. We estimated the value of the warrants granted at $58,892 using the Black-Scholes option pricing model and have included this amount in selling, general and administrative expenses. As of June 30, 2013, no warrants have been exercised.

We estimated the grant date fair value of the warrants using the Black-Scholes option pricing model with the following range of assumptions:

Risk-free interest rate 0.15 - 0.27%

Expencted life in years 1.0 - 2.0
Dividend yield 0%

Expected volatility 113.86 - 201.39%

A summary of warrant activity for the six months ended June 30, 2013 is presented below:


	Warrants		Weighted Average Exercise Price	Average Remaining Contractual Life		Aggregate Intrinsic Value

Outstanding, December 31, 2012	1,095,000	$	0.41	2.71	$	-
Granted	2,000,000	$	0.30	1.01		-
Expired/Cancelled	-	$	-	-		-
Exercised	-	$	-	-		-
Outstanding, June 30, 2013	3,095,000	$	0.34	1.08	$	-
Exercisable, June 30, 2013	3,095,000	$	0.34	1.08	$	-

The intrinsic values as of June 30, 2013 are based on a June 28, 2013 closing market price of our common stock of $0.04 per share.