Note 2 - Capital Stock

9 Months Ended

Sep. 30, 2012

Notes

Note 2 - Capital Stock

NOTE 2 - CAPITAL STOCK

Common Stock - The Company has authorized 50,000,000 shares of common stock with a par value of $0.001. 

Warrants - In conjunction with the change in control in December 2009, the Company exchanged common stock purchase warrants in exchange for 270,584 shares of the Company’s common stock, which shares were being held as treasury shares.  The common stock purchase warrants allow the holders to acquire 0.4% of the outstanding common stock of the Company within two years from the date of issuance of said purchase warrants.  The warrants were valued at $.20 per share given up or $54,117.

In December 2011 the termination date of the warrants was extended to June 18, 2012.  The fair value of $1,119 for the six month extension was calculated using a Black-Scholes option pricing model with the following assumptions:

Expected life	0.5 years
Expected volatility	1%
Risk-free interest rate	1.46%
Expected dividend yield	0.00%

In June 2012 the termination date of the warrants was extended to December 18, 2012.  The fair value of $746 for the six month extension was calculated using a Black-Scholes option pricing model with the following assumptions:

Expected life	0.5 years
Expected volatility	1%
Risk-free interest rate	0.625%
Expected dividend yield	0.00%