Accrued Expenses

3 Months Ended

Mar. 31, 2014

Notes to Financial Statements

Note 6. ACCRUED EXPENSES

Accrued expenses consisted of the following at March 31, 2014 and December 31, 2013:

	March 31,		December 31,
	2014		2013
Accrued payroll	$	18,271	$	9,471
Accrued interest		160,745		160,398
Warrant liability		148,280		159,330
Miscellaneous accrued expenses		55,823		46,989
	$	383,119	$	376,188

As more fully described in footnote 8, the Company has recorded a warrant liability of $148,280 and $159,330 as of March 31, 2014 and December 31, 2013, respectively, which is based on the Black-Scholes valuation model to estimate the fair value of the warrants. The significant assumptions considered by the model were the remaining term of the warrants, the fair value per share stock price of $.16 and $.17, a risk free treasury rate for 1.25 years and 1.5 years of .2075% and .2600% at March 31, 2014 and December 31, 2013, respectively and an expected volatility of 60%.