NOTE 6: WARRANTS

Below is a table summarizing the Company’s outstanding warrants as of March 31, 2015 and December 31, 2014:

	Number of Warrants	Wtd Avg. Exercise Price		Wtd Avg. Remaining Term	Exercisable	Intrinsic Value of Exercisable Warrants
Outstanding at December 31, 2014	16,527,989	$	0.46	3.69	12,604,407	$	309,821

Exercised	109,855	0.40		—		—
Granted	353,125	0.52		—		—


Outstanding at March 31, 2015	16,771,259	$	0.44	3.45	14,071,488	$	467,316

The warrant grants during the three months ended March 31, 2015 were valued using the Black-Scholes pricing model. Significant assumptions used in the valuation include expected term of 1.50 to 3.26 years, expected volatility of 100%, risk free interest rate of 0.29% to 1.63%, and expected dividend yield of 0%.

On January 15, 2015, the Company sold an additional 812,500 units under the December 2014 Private Placement to one institutional investor for gross proceeds of $325,000 with no commission payable. Each unit in the December 2014 Private Placement consisted of one share of the Company’s common stock and warrants to purchase ¼ of a share for every common share purchased. The warrants consisted of warrants to purchase up to 203,125 shares of the Company’s common stock. The warrants have a term of five years and an exercise price of $0.60 per share. The fair value on the grant date of the warrants was $76,629 and the expense for the three months ended March 31, 2015 was determined to be $0. As of March 31, 2015, these warrants have not been exercised.

On January 29, 2015, the Company issued three-year fully-vested warrants to purchase 150,000 shares of the Company’s common stock with an exercise price of $0.40 per share. The fair value on the grant date of the warrants was $61,066 and the expense for the three months ended March 31, 2015 was determined to be $3,393. As of March 31, 2015, these warrants have not been exercised.

For the three months ended March 31, 2015 and 2014, the Company has incurred warrant-based expense of $54,741 and $405,569, respectively. For the three months ended March 31, 2015 and 2014, stock compensation expense related to the options, warrants and performance stock units totaled $559,793 and $807,356, respectively. The total stock compensation expense related to the options, warrants and performance stock units to be amortized through March 2018 is $2,110,036 as of March 31, 2015.