On January 31, 2011 the Company issued a total of 7,500 warrants to a broker dealer as commissions for raising funds in the Companys private placement offering. The warrants have a two-year expected term and are exercisable at the lower of (i) one dollar and ninety-five cents ($1.95) per share, or (ii) one hundred thirty percent (130%) of the per share price paid by any investor in a private placement by the Company of shares of its common stock at any time in the next twelve months. The warrants had no value using the Black-Scholes pricing model.
During the nine months ended September 30, 2011, the Company issued a total of 125,000 warrants relating to bridge loans obtained during the period. The warrants have a three year term and an exercise price of $.50 per share. The warrants were valued at $3,316 and are being amortized over the respective terms of the loan agreements.
During the nine months ended September 30, 2011, the Company issued an additional 132,500 warrants relating to its private placement. None of the 132,500 warrants are currently exercisable.
As of September 30, 2011 the Company had outstanding warrants to purchase a total of 774,500 shares of the Companys common stock at a weighted average exercise price of $1.72.