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Warrants and Options | 12 Months Ended
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Dec. 31, 2011
Warrants and Options |
Warrants and Options | 9. Warrants and Options During the year ended December 31, 2011, the Company issued 300,000 warrants attached to the issuance of 370,000 shares. The Company has allocated $73,791 of the total $150,000 in proceeds to the value of the warrants. The warrants are exercisable immediately for five years at an exercise price of $0.50, and do not contain any anti-dilution provisions. The Company also issued 450,000 warrants valued at $390,530 for services rendered to the Company. The warrants are exercisable immediately for five years at exercise prices of $0.50 and $1.05. The Company has calculated the estimated fair market value of the warrants granted to employees and non-employees in exchange for services using the Black-Scholes Option Pricing model and the following assumptions: stock price at valuation, $0.50-$1.00; expected term of five years, exercise price of $0.50-$1.05, a risk free interest rate of 1.45%-2.24%, a dividend yield of 0% and volatility of 190%. Below is a table summarizing the warrants issued and outstanding as of December 31, 2011.
Date |  | Number |  | Exercise |  | Contractual |  | Expiration |  | Value if
Issued |  | Outstanding |  | Price |  | Life (Years) |  | Date |  | Exercised
12/31/10 |  | - |  | $ | - |  | - |  | - |  | $ | -
03/15/11 |  | 200,000 |  |  | 0.50 |  | 5 |  | 3/15/2016 |  |  | 100,000
03/24/11 |  | 100,000 |  |  | 0.50 |  | 5 |  | 3/24/2016 |  |  | 50,000
04/01/11 |  | 100,000 |  |  | 0.50 |  | 5 |  | 4/1/2016 |  |  | 50,000
06/21/11 |  | 100,000 |  |  | 0.50 |  | 5 |  | 6/21/2016 |  |  | 50,000
07/13/11 |  | 250,000 |  |  | 1.05 |  | 5 |  | 07/13/16 |  |  | 262,500
12/31/11 |  | 750,000 |  |  | 0.68 |  | - |  | - |  |  | 512,500
On November 17, 2011, the Company adopted and approved the 2011 Equity Incentive Plan for the directors, officers, employees and key consultants of the Company. Pursuant to the Plan, the Company is authorized to issue 900,000 restricted shares, $0.001 par value, of the Company’s common stock. Options over 720,000 shares were granted on November 25, 2011. The options vest in equal six monthly installments over three years from the date of grant, and expire three years after the vesting dates. The exercise prices are $3 for options vesting in the first year, $4 for options vesting in the second year, and $5 for options vesting in the third year. The Company has calculated the estimated fair market value of the options granted to employees and non-employees in exchange for services using the Black-Scholes Option Pricing model and the following assumptions: stock price at valuation, $1.20; expected term of 3.5 to 6 years, exercise prices of $3.00-$5.00, a risk free interest rate of 0.41%-0.93%, a dividend yield of 0% and volatility of 174%. Below is a table summarizing the options issued and outstanding as of December 31, 2011.
Date |  | Number |  | Exercise |  | Contractual |  | Expiration |  | Value if
Issued |  | Outstanding |  | Price |  | Life (Years) |  | Date |  | Exercised
12/31/10 |  | - |  | $ | - |  | - |  | - |  | $ | -
11/25/11 |  | 720,000 |  |  | 3.00-5.00 |  | 3.5-6 |  | 5/25/15-11/25/17 |  |  | 2,880,000
12/31/11 |  | 720,000 |  |  | 4.00 |  | - |  | - |  |  | 2,880,000

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