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8. STOCK WARRANTS

3 Months Ended

Mar. 31, 2015

Summary of Investments, Other than Investments in Related Parties [Abstract]

8. STOCK WARRANTS

NOTE 8 – STOCK WARRANTS

On March 24, 2014, the Company issued warrants to a third party for the purchase of 4,050,000 and 2,375,000 shares of common stock, at an exercise price of $0.001 and $0.40 per share, respectively. The warrants may be exercised any time after issuance through and including the third (3^rd) anniversary of its original issuance. The Company recorded an expense of $555,598 equal to the estimated fair value of the warrants at the date of grants. The fair market value was calculated using the Black-Scholes options pricing model, assuming approximately 0.75% risk-free interest, 0% dividend yield, 150% volatility, and expected life of 3 years

On March 24, 2014, in connection to the issuance of convertible debentures of $269,100 to certain investors, which are convertible into shares of the Company’s common stock at $0.10 per share, the Company granted to the same investors three−year warrants to purchase an aggregate of up to 1,345,500 shares of the Company’s common stock at $0.40 per share. The warrants may be exercised any time after the issuance through and including the third (3^rd) anniversary of its original issuance.

On March 24, 2014, in connection to the issuance of 2,059,000 shares of common stock, the Company granted to the same investors three−year warrants to purchase an aggregate of 1,029,500 shares of the Company’s common stock at $0.40 per share. The warrants may be exercised any time after the issuance through and including the third (3^rd) anniversary of its original issuance. The warrants have a fair market value of $66,712. The fair market value was calculated using the Black-Scholes options pricing model, assuming approximately 0.75% risk-free interest, 0% dividend yield, 150% volatility, and expected life of 3 years. See Note 4 for further discussion.

During the four months ended December 31, 2014, in connection to the sale of 1,048,000 shares of common stock, the Company granted to the same investors three−year warrants to purchase an aggregate of 524,000 shares of the Company’s common stock at $1.00 per share. The warrants may be exercised any time after the issuance through and including the third (3^rd) anniversary of its original issuance. The warrants have a fair market value of $42,650. The fair market value was calculated using the Black-Scholes options pricing model, assuming approximately 1% risk-free interest, 0% dividend yield, 150% volatility, and expected life of 3 years. See Note 4 for further discussion.

During the three months ended March 31, 2015, in connection to the sale of 684,000 shares of common stock, the Company granted to the same investors three−year warrants to purchase an aggregate of 342,000 shares of the Company’s common stock at $1.00 per share. The warrants may be exercised any time after the issuance through and including the third (3^rd) anniversary of its original issuance. The warrants have a fair market value of $125,708. The fair market value was calculated using the Black-Scholes options pricing model, assuming approximately 1% risk-free interest, 0% dividend yield, 150% volatility, and expected life of 3 years. See Note 4 for further discussion.

On February 27, 2015, in conjunction with one-year services agreement, the Company issued warrants to purchase 100,000 shares of common stock at $0.50 per share.

Stock warrants outstanding and exercisable on March 31, 2015 are as follows:


				Exercise Price per Share				Shares Under Warrants				Remaining Life in Years
	Outstanding
				$	0.001				4,050,000			2
				$	0.4				4,750,000			2
				$	0.5				100,000			5
				$	1				866,000			3

	Exercisable
				$	0.001				4,050,000			2
				$	0.4				4,750,000			2
				$	0.5				100,000			5
				$	1				866,000			3

No other stock warrants have been issued or exercised during the three months ended March 31, 2015.

The entire disclosure for the schedule applicable to insurance companies summarizing investments held as of the most recent audited balance sheet. At a minimum, such summary is by three major categories of investments including: (1) fixed maturities primarily consisting of bonds, including convertibles and bonds with warrants, and redeemable preferred stocks, (2) equity securities primarily consisting of common stocks and nonredeemable preferred stocks, and (3) other investments including mortgage loans on real estate, real estate held for investment, real estate acquired in satisfaction of debt, policy loans, other long-term investments, and short-term investments not otherwise categorized. The information provided with respect to each item within each category includes: (A) the original cost of equity securities and, as to fixed maturity securities, original cost reduced by repayments and adjusted for amortization of premiums or accrual of discounts, (B) fair value as of the reporting date, and (C) the amount at which the item within each category is shown in the statement of financial position; with respect to (C), if the amount at which shown in the statement of financial position is different from the items original [amortized] cost or fair value, an explanation of the difference may be included herein.

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