Note 6 - Private Placement of Common Shares

6 Months Ended

Jun. 30, 2013

Notes

Note 6 - Private Placement of Common Shares

NOTE 6 – PRIVATE PLACEMENT OF COMMON SHARES

During 2012, the Company commenced a private offering (the “October 2012 Offering) to certain investors with whom the Company, its management and/or agents have a pre-existing relationship.   The October 2012 Offering consisted of an offering of “Investment Units” to accredited investors for a purchase price of $20,000 per Investment Unit.  Each Investment Unit consists of (i) 20,000 shares of common stock priced at $1.00 per share and (ii) a five year warrant to purchase up to 10,000 shares of common stock at an exercise price of $1.50 per share.

On June 30, 2013, as part of the October 2012 Offering, the Company accepted a subscription from an accredited investor for five (5) Investment Units at a purchase price of $20,000 per Investment Unit, for gross proceeds to the Company of $100,000.   The approximate relative fair value of the warrants is $2,000.   The Black Scholes pricing model was used estimate the fair value of the 50,000 warrants issued during the period, using the assumptions of a risk free interest rate of 0.87%, dividend yield of 0.00%, volatility of 17%, and an expected like of 5 years.   No placement fees were paid in connection with this investment.