Blüm Holdings Inc. General form of registration statement for all companies including face-amount certificate companies

General form of registration statement for all companies including face-amount certificate companies

WARRANTS

WARRANTS

3 Months Ended

12 Months Ended

Mar. 31, 2014

Dec. 31, 2013

Notes to Financial Statements

Note 12. WARRANTS

The Company has the following shares of common stock reserved for the warrants outstanding as of March 31, 2014:

	March 31, 2014
				Weighted
				Average
				Exercise
	Shares			Price
Warrants outstanding beginning of year		19,550,817		$	0.17
Warrants exercised		(2,838,777	)		0.06
Warrants granted		2,807,018			0.30
Warrants expired		-			-

Warrants outstanding end of period		19,519,058		$	0.21

The weighted exercise price and weighted fair value of the warrants granted by the Company as of March 31, 2014, are as follows:

	March 31, 2014
	Weighted Average Exercise Price		Weighted Average Fair Value

Weighted average of warrants granted during the three months whose exercise price exceeded fair market value at the date of grant	$	0.30	$	0.45

Weighted average of warrants granted during the nine months whose exercise price was equal or lower than fair market value at the date of grant	$	-	$	-

The following table summarizes information about fixed-price warrants outstanding:

		Number		Average
Range of		Outstanding at		Remaining	Weighted
Exercise		March 31,		Contractual	Average
Prices		2014		Life	Exercise Price
$	0.33		5,540,400	6 Months	$	0.33
$	0.46		600,000	17 Months	$	0.46
$	0.46		150,000	22 Months	$	0.46
$	0.85		40,000	13 Months	$	0.85
$	0.40		333,333	17 Months	$	0.40
$	0.33		439,637	45 Months	$	0.33
$	0.16		875,000	48 Months	$	0.16
$	0.06		8,733,670	54 Months	$	0.06
$	0.30		1,403,509	46 Months	$	0.30
$	0.30		1,403,509	47 Months	$	0.30
			19,519,058

For the warrants issued in February 2014, the Company valued the warrants utilizing the black schools method with the following inputs: stock price of $0.57, exercise price of $0.330, volatility of 122.84%, years 4, treasury bond rate 2.5% and dividend rate of 0%.

For the warrants issued in March 2014, the Company valued the warrants utilizing the black schools method with the following inputs: stock price of $0.50, exercise price of $0.30, volatility of 122.61%, years 4, treasury bond rate 2.5% and dividend rate of 0%.

The warrant expense of $1,249,123 was based on the Black Scholes calculation which was expensed during the quarter ended March 31, 2014.

The Company has the following shares of common stock reserved for the warrants outstanding as of December 31, 2013:

	December 31, 2013
			Weighted
			Average
			Exercise
	Shares		Price
Warrants outstanding beginning of year		6,711,733	$	0.35
Warrants exercised		-		-
Warrants granted		12,839,084		0.08
Warrants expired		-		-

Warrants outstanding end of period		19,550,817	$	0.17

The weighted exercise price and weighted fair value of the warrants granted by the Company as of December 31, 2013, are as follows:

	December 31, 2013
	Weighted Average Exercise Price		Weighted Average Fair Value

Weighted average of warrants granted during the nine months whose exercise price exceeded fair market value at the date of grant	$	0.32	$	0.46

Weighted average of warrants granted during the nine months whose exercise price was equal or lower than fair market value at the date of grant	$	-	$	-

The following table summarizes information about fixed-price warrants outstanding:

		Number		Average
Range of		Outstanding at		Remaining	Weighted
Exercise		December 31,		Contractual	Average
Prices		2013		Life	Exercise Price
$	0.33		5,588,400	9 Months	$	0.33
$	0.46		600,000	20 Months	$	0.46
$	0.46		150,000	25 Months	$	0.46
$	0.85		40,000	16 Months	$	0.85
$	0.40		333,333	20 Months	$	0.40
$	0.33		515,637	48 Months	$	0.33
$	0.13		352,978	51 Months	$	0.13
$	0.16		875,000	51 Months	$	0.16
$	0.12		116,674	52 Months	$	0.12
$	0.11		102,733	52 Months	$	0.11
$	0.05		267,391	55 Months	$	0.05
$	0.06		10,608,671	57 Months	$	0.06
			19,550,817

For the warrants issued in January 2013, the Company valued the warrants utilizing the black schools method with the following inputs: stock price of $0.46, exercise price of $0.33, volatility of 106.26%, years 5, treasury bond rate 2.5% and dividend rate of 0%.

For the warrants issued in March 2013, the Company valued the warrants utilizing the black schools method with the following inputs: stock price of $0.19, exercise price of $0.1324, volatility of 116.46%, years 5, treasury bond rate 2.5% and dividend rate of 0%.

For the warrants issued in April 2013, the Company valued the warrants utilizing the black schools method with the following inputs: stock price of $0.19, exercise price of $0.16, volatility of 115.70%, years 5, treasury bond rate 2.5% and dividend rate of 0%.

For the warrants issued in April 2013, the Company valued the warrants utilizing the black schools method with the following inputs: stock price of $0.19, exercise price of $0.1178, volatility of 115.04%, years 5, treasury bond rate 2.5% and dividend rate of 0%.

For the warrants issued in May 2013, the Company valued the warrants utilizing the black schools method with the following inputs: stock price of $0.16, exercise price of $0.1071, volatility of 114.54%, years 5, treasury bond rate 2.5% and dividend rate of 0%.

For the warrants issued in July 2013, the Company valued the warrants utilizing the black schools method with the following inputs: stock price of $0.08, exercise price of $0.0514, volatility of 115.61%, years 5, treasury bond rate 2.5% and dividend rate of 0%.

For the warrants issued in October 2013, the Company valued the warrants utilizing the black schools method with the following inputs: stock price of $0.07, exercise price of $0.06, volatility of 118.45%, years 5, treasury bond rate 2.5% and dividend rate of 0%.

The warrant expense of $1,355,990 was based on the Black Scholes calculation which was expensed during the year ended December 31, 2013.