XML 32 R16.htm IDEA: XBRL DOCUMENT

5. Stockholders' Deficit (Tables)

6 Months Ended

Jun. 30, 2012

Stockholders Deficit Tables

Stockholders Deficit-Warrants issued on March 1st 2012

These warrants have contractual lives of three years and were valued at a grant date fair value of $0.13 per warrant, or $97,500, using a Black-Scholes option pricing model with the following assumptions:

Stock price	$0.50
Contractual term	3 years
Expected volatility	77.7%
Risk free interest rate	0.43%
Dividend yield	0

Stockholders Deficit- Warrants issued on March 8th 2012

On March 8, 2012, the Company issued warrants to purchase 150,000 shares of the Company’s common stock to a consultant for services to be rendered (See Note 7 – Commitments and Contingencies). These warrants have contractual lives of three years and were valued at a grant date fair value of $0.13 per warrant, or $19,500, using a Black-Scholes option pricing model with the following assumptions:

Stock price	$0.51
Contractual term	3 years
Expected volatility	77.7%
Risk free interest rate	0.44%
Dividend yield	0

Warrant Activity

The following table summarizes warrant transactions for the year ended December 31, 2011 and the six months ended June 30, 2012:

		Number of warrants				Weighted average exercise price				Weighted average remaining contracted term (years)				Aggregate intrinsic value

Outstanding at December 31, 2010						$	–
Granted			1,599,975			$	5.94

Outstanding at December 31, 2011			1,599,975			$	5.94				4.59			$	–
Granted			900,000			$	1.40

Outstanding at June 30, 2012			2,499,975			$	4.30				3.58			$	–

Exercisable at June 30, 2012			2,499,975			$	4.30				3.58			$	–

Weighted Average Grant Date Fair Value						$	2.09

Tabular disclosure of warrants or rights issued. Warrants and rights outstanding are derivative securities that give the holder the right to purchase securities (usually equity) from the issuer at a specific price within a certain time frame. Warrants are often included in a new debt issue to entice investors by a higher return potential. The main difference between warrants and call options is that warrants are issued and guaranteed by the company, whereas options are exchange instruments and are not issued by the company. Also, the lifetime of a warrant is often measured in years, while the lifetime of a typical option is measured in months. Disclose the title of issue of securities called for by warrants and rights outstanding, the aggregate amount of securities called for by warrants and rights outstanding, the date from which the warrants or rights are exercisable, and the price at which the warrant or right is exercisable.

+ References+ Details