NOTE 7 – Share Purchase Warrants
In conjunction with retaining a consultant, Vitello Capital, Ltd., the Company issued an aggregate of 3,000,000 share purchase warrants enabling the consultant to purchase 1,000,000 shares of the Company’s common stock at a price of $0.005 a share, $0.01 a share, and $0.015 a share, respectively. The fair value of the warrants was estimated to be $13,109 on the date of the grant using the Black-Scholes option-pricing model. Expected volatility was determined through the average of a peer group of public companies. The risk-free rate for periods within the contractual life of the warrants is based on the U.S. Treasury yield in effect at the time of the grant. The Company has never declared or paid cash dividends and has no plans to do so in the foreseeable future. The following weighted-average assumptions were utilized for the calculations:
| Expected life (in years) |
| 1.0 |
| Weighted average volatility |
| 167.82% |
| Weighted average risk-free interest rate |
| 0.13% |
| Expected dividend rate |
| -0- |
The following table summarizes the number of warrants, weighted average exercise price, and weighted average life (in years) by price for both total outstanding warrants and total exercisable warrants as of December 31, 2013:
|
|
| Total Outstanding Warrants | ||||
|
Exercise Price |
|
Warrants |
| Weighted Average Exercise Price |
| Life (in years) |
|
|
|
|
|
|
|
|
| $0.005 |
| 1,000,000 |
| $0.005 |
| 1.0 |
| $0.01 |
| 1,000,000 |
| $0.01 |
| 1.0 |
| $0.015 |
| 1,000,000 |
| $0.015 |
| 1.0 |