Note 7: Warrants

On October 29, 2012, in connection with a consulting agreement, the Company issued 90,973 warrants to purchase common stock at an exercise price of $4.90 per share with a term of 5 years. The warrants vest according to the following schedule: 15,163 shares vest immediately and 15,163 shares vest at the end of every thirty day period thereafter until the warrant is 100% vested. For the years ended December 31, 2013 and 2012, the Company recognized an expense of $130,298 and $115,162, respectively. The fair value of the warrants was determined using the Black-Scholes option valuation model. The warrants expire on October 29, 2017 and have a remaining contractual life of 3.83 years as of December 31, 2013. As of December 31, 2013, all warrants were exercisable.

On August 1, 2013, in connection with a consulting agreement, the Company issued 30,000 warrants to purchase common stock at an exercise price of $5.00 per share with a term of 3 years. For the year ended December 31, 2013, the Company recognized an expense of $57,779 associated with these awards. The fair value of the warrants was determined using the Black-Scholes option valuation model. The warrants expire on August 1, 2016 and have a remaining contractual life of 2.59 years as of December 31, 2013. As of December 31, 2013, all warrants were exercisable.

The following table summarizes information about the Company's warrants at December 31, 2013:


					Weighted
					Average
			Weighted		Remaining
			Average		Contractual
	Number		Exercise		Term		Intrinsic
	of Units		Price		(in years)		Value

Outstanding at December 31, 2012		90,973	$	4.90

Granted		30,000		5.00

Outstanding at December 31, 2013		120,973	$	4.92		3.5		-

Exercisable at December 31, 2013		120,973	$	4.92		3.5		-

The warrants were valued using the Black-Scholes pricing model with the following assumptions:


	Year Ended December 31,
	2013			2012
Volatility		56	%		57% - 68	%
Risk-free interest rate		0.35	%		0.31% - 2.07	%
Expected term	1.5 years			2.5 - 5 years