Equity

6 Months Ended

Jun. 30, 2014

Notes to Financial Statements

Note 4 - Equity

We routinely issue warrants in exchange for services, as well as to settle long-term debt. The following is a summary of warrant activity:

	Number of Warrants			Weighted-average Exercise Price		Weighted-average Remaining Life (Years)
Outstanding, December 31, 2013		15,105,329		$	0.50		2.2
Granted		11,203,113			0.66
Exercised		(1,123,138	)		0.32
Outstanding, June 30, 2014		25,185,304			0.58		2.8
Exercisable, June 30, 2014		24,985,304			0.58		2.8

The fair value of each warrant is estimated on the date of grant using the Black-Scholes option pricing model (“Black-Scholes”). We use historical data to estimate the expected price volatility, the expected life and the expected forfeiture rate. The risk-free interest rate is based on the United States Treasury yield curve in effect at the time of the grant for the estimated life of the warrant. The following summarizes the Black-Scholes assumptions used for warrant grants that were expensed:

	Six months ended June 30,
	2014	2013
Volatility	320 – 330 %	325 – 360 %
Risk-free interest rate	0.6 – 1.6 %	0.2 – 1.0 %
Expected life (years)	2.5 – 5.0	2.5 – 5.0
Dividend yield	-	-

During the six months ended June 30, 2014, we entered into an agreement whereby we may sell up to $10,000,000 of our common stock to Lincoln Park Capital Fund LLC. As part of entering into that agreement, we issued 671,785 shares of common stock for no consideration