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

WARRANTS

v2.4.0.8
WARRANTS
 9 Months Ended 12 Months Ended
Sep. 30, 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 September 30, 2014:

 

    September 30, 2014  
 
 
 
 		  
 
 
 		  
 
 
Shares 		 
 
 
 		  
 
 
 		 Weighted Average Exercise Price  
 
 
 
Warrants outstanding – beginning of year     19,550,817     $ 0.17  
Warrants exercised     (9,367,287 )     0.19  
Warrants granted     11,491,227       0.30  
Warrants expired     -       -  
                 
Warrants outstanding – end of period     21,674,757     $ 0.23  

 

The weighted exercise price and weighted fair value of the warrants granted by the Company as of September 30, 2014, are as follows:

 

    September 30, 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:

 

 
Range of Exercise Prices 		 
 
 
 		 Number Outstanding at September 30, 2014  
 
 
 		 Average Remaining Contractual Life  
 
 
 		  
Weighted Average Exercise Price
$ 0.33       5,540,400       10 Months     $ 0.33  
$ 0.46       600,000       10 Months     $ 0.46  
$ 0.46       150,000       4 Months     $ 0.46  
$ 0.85       40,000       7 Months     $ 0.85  
$ 0.40       333,333       11 Months     $ 0.40  
$ 0.33       439,637       14 Months     $ 0.33  
$ 0.16       750,000       18 Months     $ 0.16  
$ 0.06       7,067,002       48 Months     $ 0.06  
$ 0.30       964,912       44 Months     $ 0.30  
$ 0.30       964,912       45 Months     $ 0.30  
$ 0.30       4,824,561       46 Months     $ 0.30  
          21,674,757                  

 

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%.

 

For the warrants issued in April 2014, the Company valued the warrants utilizing the black schools method with the following inputs: stock price of $0.80, exercise price of $0.30, volatility of 125.88%, years 4, treasury bond rate 2.5% and dividend rate of 0%.

 

For the warrants issued in May 2014, the Company valued the warrants utilizing the black schools method with the following inputs: stock price of $0.59, exercise price of $0.30, volatility of 127.68%, years 4, treasury bond rate 2.5% and dividend rate of 0%.

 

For the warrants issued in June 2014, the Company valued the warrants utilizing the black schools method with the following inputs: stock price of $0.68, exercise price of $0.30, volatility of 130.55%, years 4, treasury bond rate 2.5% and dividend rate of 0%.

 

For the warrants issued in July 2014, the Company valued the warrants utilizing the black schools method with the following inputs: stock price of $0.55, exercise price of $0.30, volatility of 130.71%, years 4, treasury bond rate 2.5% and dividend rate of 0%.

 

For the warrants issued in July 2014, the Company valued the warrants utilizing the black schools method with the following inputs: stock price of $0.40, exercise price of $0.30, volatility of 131.05%, years 4, treasury bond rate 2.5% and dividend rate of 0%.

 

The warrant expense of $5,038,986 was based on the Black Scholes calculation which was expensed during the nine months ended September 30, 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 Scholes 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 Scholes 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 Scholes 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 Scholes 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 Scholes 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 Scholes 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 Scholes 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.