STOCKHOLDERS' DEFICIT (Tables)

6 Months Ended

Jun. 30, 2012

Weighted-Average Assumptions Used for Estimating Fair Value of Warrants

The Company estimated the fair value of the warrants on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions:

	Series C Warrants			Series D Warrants			Series E Warrants
Number of warrants issued		4,582,500			167,500			2,000,000
Exercise price	$	0.16		$	0.30		$	0.10
Black-Scholes option pricing model assumptions:
Risk-free interest rate		0.60	%		0.23	%		0.72	%
Expected term (in years)		1.8			1.6			4.5
Expected volatility (*)		152.86	%		267.38	%		216.50	%
Dividend per share	$	0		$	0		$	0
Expiration date		December 31, 2012			December 31, 2013			December 31, 2016

* As a newly formed entity it is not practicable for it to estimate the expected volatility of its share price. The Company selected two comparable public companies listed on OTC Markets Group Inc. QB tier engaged in similar activities to calculate the expected volatility. The Company calculated the comparable companies’ historical volatility over the expected life and averaged them as its expected volatility.

Warrant Activity

The following table summarizes warrant activity during the six months ended June 30, 2012:

	Number of Warrants			Weighted Average Exercise Price per Share
Outstanding at December 31, 2011		4,982,500		$	0.27
Expired		(400,000	)	$	1.50
Granted		2,167,500		$	0.12
Outstanding at June 30, 2012		6,750,000		$	0.15

- Definition

Tabular disclosure of warrants or rights issued. Warrants and rights outstanding are derivative securities that give the holder the right to purchase securities (usually equity) from the issuer at a specific price within a certain time frame. Warrants are often included in a new debt issue to entice investors by a higher return potential. The main difference between warrants and call options is that warrants are issued and guaranteed by the company, whereas options are exchange instruments and are not issued by the company. Also, the lifetime of a warrant is often measured in years, while the lifetime of a typical option is measured in months. Disclose the title of issue of securities called for by warrants and rights outstanding, the aggregate amount of securities called for by warrants and rights outstanding, the date from which the warrants or rights are exercisable, and the price at which the warrant or right is exercisable.

+ References+ Details

Ceres Ventures, Inc. 10-Q/A