STOCKHOLDERS DEFICIT
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Sep. 30, 2012
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STOCKHOLDERS DEFICIT |
NOTE 8 - STOCKHOLDERS DEFICIT
Board of Directors fees
As compensation for serving as a member of the board of directors, the Company granted warrants to purchase 200,000 shares of common stock to Philip M. Rice (CFO and a Director) in January, 2012, at an exercise price of $.12 per share. The warrants have a term of three years and vested as follows: 50,000 vested on the grant date, 50,000 vested on April 1, 2012, 50,000 vested on July 1, 2012, and the remaining 50,000 shall vest on October 1, 2012. The warrants vested during the three quarters ended March 31, 2012, June 30, 2012 and September 30, 2012, respectively. The warrants were valued at $21,442 using the Black Scholes pricing model relying on the following assumptions: volatility 125.11%; annual rate of dividends 0%; discount rate 0.33%.
As compensation for joining the board of directors in June of 2012, the Company granted warrants to purchase 50,000 shares of common stock to Brian Young. The warrants were granted with an exercise price of $.12 per share, have a term of three years and vested or will vest as follows: 12,500 vested on the grant date, 12,500 vested on September 30, 2012, and the remaining 25,000 will vest in pro rata on December 31, 2012 and March 31, 2013. The warrants were valued at $8,858 using the Black Scholes pricing model relying on the following assumptions: volatility 114.66%; annual rate of dividends 0%; discount rate 0.25%. In addition, Mr. Young will receive $10,000 for each annual term served, paid quarterly.
A summary of the status of the Companys warrants is presented below.
Warrants outstanding and exercisable by price range as of September 30, 2012 were as follows:
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