CONVERTIBLE PROMISSORY NOTES PAYABLE

9 Months Ended

Sep. 30, 2013

Convertible Promissory Note Payable [Abstract]

Convertible Promissory Note Payable [Text Block]

NOTE 5 – CONVERTIBLE PROMISSORY NOTES PAYABLE

On September 30, 2013, the Company issued and sold to two accredited investors for $100,000 four units of securities, each unit consisting of a $25,000 convertible promissory note and warrants to purchase 50,000 shares of the Company’s common stock until December 31, 2019. The notes bear interest at 10% per annum and are due on the earlier of the close of a $100,000 financing or May 31, 2014.  The note payable can be converted into common shares of the Company at $0.125 per share. The conversion price on the warrants is $0.15 per share.   The estimated grant date fair value of the warrants granted during the period to December 31, 2012 of $15,567 was estimated using the Black-Scholes option pricing model with the following assumptions: our stock price on date of grant, expected dividend yield of 0%, expected volatility of 116.51%, risk-free interest rate of 1.43%, and expected term of 6.25 years. The Company recorded a debt discount of $15,567 related to the issuance of the convertible note. Pursuant to the issuance of the notes payable, the Company incurred financing costs of $10,000 which have been deferred and will be amortized over the life of the note.