Quarterly report pursuant to Section 13 or 15(d)

WARRANTS

v3.10.0.1
WARRANTS
6 Months Ended
May 31, 2016
Warrants  
WARRANTS
  5. WARRANTS 

 

During the six months ended May 31, 2016, the Company issued a total of 175,000 warrants at an average exercise price of $0.13 per share.

 

  (i) On December 2, 2015, the Company issued warrants to purchase an aggregate of 100,000 shares of common stock at an exercise price equal to $0.01 per share of common stock in connection with the issuance of a promissory note in the aggregate principal amount of $125,000 (See Note 8d).

  

  (ii) On January 20, 2016, the Company entered into an agreement with LG Capital Funding, LLC to amend the terms of a convertible promissory note in the principal amount of $50,000. Pursuant to the amendment, the Company granted LG Capital 75,000 warrants with an exercise price of $0.30 per share (See Note 7f).

  

The following table summarizes information about common stock warrants outstanding at May 31, 2016:

 

Outstanding           Exercisable  
          Weighted                    
          Average     Weighted           Weighted  
          Remaining     Average           Average  
Exercise   Number     Contractual     Exercise     Number     Exercise  
Price   Outstanding     Life (Years)     Price     Exercisable     Price  
$0.01     100,000       0.51     $ 0.01       100,000     $ 0.01  
$0.30     75,000       2.64     $ 0.30       75,00     $ 0.30  
$0.01 - $0.30     175,000       1.42     $ 0.13       175,000     $ 0.13  

 

The Company has valued the warrants at their date of grant utilizing the Black-Scholes option pricing model. This model is dependent upon several variables such as the warrants’ term, exercise price, current stock price, risk-free interest rate and estimated volatility of our stock over the contractual term of the warrants. The risk-free interest rate used in the calculations is based on the implied yield available on U.S. Treasury issues with an equivalent term approximating the contractual life of the warrants.

 

The following weighted average assumptions were used for grants during the six months ended May 31, 2016:

 

    May 31, 2016  
Weighted average risk-free interest rate     0.52%  
Weighted average life (in years)     2.0  
Volatility     167.9% — 184.9%  
Expected dividend yield     0%  
Weighted average grant-date fair value per
share of warrants granted
  $ 0.41