Blüm Holdings Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

WARRANTS

WARRANTS

3 Months Ended

Mar. 31, 2013

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

	March 31, 2013
	Shares		Weighted Average Exercise Price
Warrants outstanding beginning of year		6,711,733	$	0.35
Warrants exercised		-		-
Warrants granted		515,637		0.33
Warrants expired		-		-

Warrants outstanding end of period		7,227,370	$	0.33

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

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

Weighted average of warrants granted during the quarter whose exercise price exceeded fair market value at the date of grant	$	0.33	$	0.46

Weighted average of warrants granted during the quarter 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		2012		Life	Exercise Price
$	0.33		5,588,400	18 Months	$	0.33
$	0.46		600,000	29 Months	$	0.46
$	0.46		150,000	34 Months	$	0.46
$	0.85		40,000	32 Months	$	0.85
$	0.40		333,333	32 Months	$	0.40
$	0.33		515,637	58 Months	$	0.33
			7,227,370

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%.

The warrant expense of $185,630 was based on the Black Scholes calculation which was expensed during the three months ended March 31, 2013.