NOTE 8 - WARRANTS TO PURCHASE COMMON STOCK

9 Months Ended

Sep. 30, 2015

Note 8 - Warrants To Purchase Common Stock

NOTE 8 - WARRANTS TO PURCHASE COMMON STOCK

NOTE 8 – WARRANTS TO PURCHASE COMMON STOCK

During the nine months ended September 30, 2015, the Company issued, in connection with the issuance of debentures, warrants to purchase 528,500 shares of the Company’s Common Stock at an exercise price of $0.15 and $0.20. All warrants outstanding as of September 30, 2015 are scheduled to expire at various dates through 2019.

The grant-date fair value of warrants is estimated using the BSM valuation model.  The per share weighted average fair value of the warrants granted during 2015 was $0.17 and was determined using the following assumptions:  expected price volatility ranging between 38.96% to 49.60%, risk-free interest rate ranging between 0.83% to 1.13%, zero expected dividend yield, and 3.0 yearlife of warrants.  The Company makes assumptions with respect to expected stock price volatility based on the average historical volatility of peers with similar attributes. In addition, the Company determines the risk-free rate by selecting the U.S. Treasury with maturities similar to the expected terms of grants, quoted on an investment basis in effect at the time of grant for that business day.

A summary of warrants issued, exercised and expired for the nine months ended September 30, 2015 follows:  

	Common Stock Purchase Warrants	Weighted-Average Exercise Price ($)	Weighted-Average Remaining Contractual Term
Outstanding at December 31, 2014	17,308,258	0.70	2.04
Granted	528,500	0.16	3.00
Exercised	—	—	—
Expired	(9,912,169)	1.00	—
Outstanding and exercisable at September 30, 2015	7,924,589	0.31	3.69