Note 5 - Common Stock and Warrants Issued For Services

12 Months Ended

Dec. 31, 2012

Notes

Note 5 - Common Stock and Warrants Issued For Services

NOTE 5 - COMMON STOCK AND WARRANTS ISSUED FOR SERVICES

During 2011, we entered into an advisory agreement (the “2011 Advisory Agreement”) with Cambria Capital, LLC (“Cambria”) with respect to certain financial advisory, investment banking and related matters.  As compensation for these services, we granted Cambria a retainer warrant (“Warrant”) allowing Cambria the right to purchase 400,000 shares of our common stock at an exercise price of $0.60 per share for a term of 5 years, which is fully assignable. The 400,000 warrants granted to Cambria for advisory services were estimated to have a fair value of approximately $525 using the Black Scholes option pricing model based on the following assumptions: expected dividend yield 0%, expected volatility 17%, risk-free interest rate 0.90%, and expected life of 5 years.

We issued 150,000 shares of our common stock for services valued at $150,000 during 2012.

On December 28, 2012, each non-employee director was issued 25,000 shares of common stock for services valued at $20,000.  Total number of shares issued to non-employees was 125,000 shares valued at a total of $100,000.  The shares were appropriated from the 2012 Stock Option and Stock Award Plan (see Note 6).