NOTE 8 - SHAREHOLDERS' EQUITY

12 Months Ended

Dec. 31, 2012

NOTE 8 - SHAREHOLDERS' EQUITY

COMMON STOCK

The authorized common stock of the Company consists of 300,000,000 shares with a par value of $0.0000001. There were 124,575,000 and 121,940,000 shares of common stock issued and outstanding at December 31, 2012 and at December 31, 2011, respectively.

On July 5, 2011, Titan Holding Group, Inc. entered into a Subscription Agreement with Evpatoria Holdings, Ltd., an entity maintaining its principal address at Trust Company Complex, Ajeltake Road, Ajeltake Island, Marshall Islands to issue 1,680,000 Units of the Company’s unregistered Securities (as hereinafter defined) at the aggregate price of US $30,000.00. Each Unit consists of one share of common stock of the Company and one common share purchase warrant subject to adjustment. One Warrant shall be non-transferable and shall entitle the holder thereof to purchase one share of common stock of the Company, as presently constituted, for a period of three (3) years commencing from the purchase date of July 5, 2011, at a price per Warrant Share of US $17.50 per Warrant Share.

On September 13, 2011, Titan Holding Group, Inc. entered into a Subscription Agreement with Evpatoria Holdings, Ltd., an entity maintaining its principal address at Trust Company Complex, Ajeltake Road, Ajeltake Island, Marshall Islands to issue 1,400,000 Units of the Company’s unregistered Securities (as hereinafter defined) at the aggregate price of US $25,000.00. Each Unit consists of one share of common stock of the Company and one common share purchase warrant subject to adjustment. One Warrant shall be non-transferable and shall entitle the holder thereof to purchase one share of common stock of the Company, as presently constituted, for a period of three (3) years commencing from the purchase date of September 13, 2011, at a price per Warrant Share of US$17.50 per Warrant Share.

On October 20, 2011, Titan Holding Group, Inc filed a Certificate of Amendment of Certificate of Incorporation with the Florida Division of Corporations, and (i) changed its name to Powder River Coal Corp. (“Powder River Coal Corp.” of “The Company”) upon the acquisition of certain coal properties; (ii) designated a new principal office and mailing address for the Company which is 123 W. 1^st Street, Suite 675, Casper, Wyoming; (iii) reduced the number of authorized shares of our common stock to three hundred million (300,000,000).

On October 20, 2011 Andrew D. Grant, President, CEO and principal shareholder of the Company surrendered 1,750,000 shares of Company common stock owned by him, thus reducing his ownership from 6,000,000 shares to 4,250,000 shares and reducing the Company’s issued and outstanding common shares from 10,300,000 shares to 8,550,000 shares, at that time.

On November 18, 2011, Powder River Coal Corp. entered into a Subscription Agreement with Evpatoria Holdings, Ltd., an entity maintaining its principal address at Trust Company Complex, Ajeltake Road, Ajeltake Island, Marshall Islands to issue 2,240,000 Units of the Company’s unregistered Securities (as hereinafter defined) at the aggregate price of US $40,000.00. Each Unit consists of one share of common stock of the Company and one common share purchase warrant subject to adjustment. One Warrant shall be non-transferable and shall entitle the holder thereof to purchase one share of common stock of the Company, as presently constituted, for a period of three (3) years commencing from the purchase date of November 18, 2011, at a price per Warrant Share of US $17.50 per Warrant Share.

On February 15, 2012, Powder River Coal Corp. entered into a Subscription Agreement with Evpatoria Holdings, Ltd., to issue 240,000 Units of the Company’s unregistered Securities (as hereinafter defined) at the aggregate price of $60,000 ($0.25 per Unit). Each Unit consists of one share of common stock of the Company and one common share purchase warrant subject to adjustment. One Warrant shall be non-transferable and shall entitle the holder thereof to purchase one share of common stock of the Company, as presently constituted, for a period of three (3) years commencing from the purchase date of February 15, 2012, at a price per Warrant Share of $1.25 per Warrant Share.

On May 18, 2012, Powder River Coal Corp. entered into a Subscription Agreement with Evpatoria Holdings, Ltd., to issue 400,000 Units of the Company’s unregistered Securities (as hereinafter defined) at the aggregate price of $100,000 ($0.25 per Unit). Each Unit consists of one share of common stock of the Company and one common share purchase warrant subject to adjustment. One Warrant shall be non-transferable and shall entitle the holder thereof to purchase one share of common stock of the Company, as presently constituted, for a period of three (3) years commencing from the purchase date of May 18, 2012, at a price per Warrant Share of $1.25 per Warrant Share.

On September 19, 2012, Powder River Coal Corp. entered into a Subscription Agreement with Evpatoria Holdings, Ltd., to issue 300,000 Units of the Company’s unregistered Securities (as hereinafter defined) at the aggregate price of $75,000 ($0.25 per Unit). Each Unit consists of one share of common stock of the Company and one common share purchase warrant subject to adjustment. One Warrant shall be non-transferable and shall entitle the holder thereof to purchase one share of common stock of the Company, as presently constituted, for a period of three (3) years commencing from the purchase date of September 19, 2012, at a price per Warrant Share of $1.25 per Warrant Share.

On December 3, 2012, Powder River Coal Corp. entered into a Subscription Agreement with Evpatoria Holdings, Ltd., to issue 300,000 Units of the Company’s unregistered Securities (as hereinafter defined) at the aggregate price of $75,000 ($0.25 per Unit). Each Unit consists of one share of common stock of the Company and one common share purchase warrant subject to adjustment. One Warrant shall be non-transferable and shall entitle the holder thereof to purchase one share of common stock of the Company, as presently constituted, for a period of three (3) years commencing from the purchase date of December 3, 2012, at a price per Warrant Share of $1.25 per Warrant Share.

During 2012, 275,000 shares of common stock were issued for board advisory services. These shares were recorded at fair market value which totaled $68,750. $10,000 of the total was recorded as prepaid expense for advisory services to be rendered in the first quarter of 2013.

Warrants issued in connection with sale of common shares

Description of warrants

(i) Warrants issued during quarterly period ended March 31, 2012

For the period ended March 31, 2012, in connection with the sale of 240,000 shares of its common stock at $0.25 per share $60,000 in gross proceeds to the investor, the Company issued warrants to purchase 240,000 shares of its common stock exercisable at $1.25 per share earned and exercisable upon issuance expiring three (3) years from the date of issuance.

The fair value of the warrant grant estimated on the date of grant uses the Black-Scholes Option-Pricing Model with the following assumptions:

Expected life (year)	3.00

Expected volatility	87.48%	*

Risk-free interest rate	0.75%

Dividend yield	0.00%

* As a thinly traded public entity it is not practicable for the Company to estimate the expected volatility of its share price. The Company selected five (5) comparable public traded coalmine companies to calculate the expected volatility. The reason for selecting comparable public traded coalmine companies is that the Company plans to engage in coalmine business. The Company calculated five (5) comparable public traded coalmine companies’ historical volatility over the expect life of the warrants and averaged the five (5) comparable public traded coalmine companies’ historical volatility as its expected volatility.

The Company allocated the gross proceeds of $60,000 between common stock and warrants based on their relative fair value, estimated on the date of grant, valued common stock and the warrant at $48,000 and $12,000, respectively, using the Black-Scholes Option-Pricing Model with the above assumptions.

(ii) Warrants issued during quarterly period ended June 30, 2012

For the period ended June 30, 2012, in connection with the sale of 400,000 shares of its common stock at $0.25 per share $100,000 in gross proceeds to the investor, the Company issued warrants to purchase 400,000 shares of its common stock exercisable at $1.25 per share earned and exercisable upon issuance expiring three (3) years from the date of issuance.

The fair value of the warrant grant estimated on the date of grant uses the Black-Scholes Option-Pricing Model with the following assumptions:

Expected life (year)	3.00

Expected volatility	77.51%	*

Risk-free interest rate	0.42%

Dividend yield	0.00%

The Company allocated the gross proceeds of $100,000 between common stock and warrants based on their relative fair value, estimated on the date of grant, valued common stock and the warrant at $72,393 and $27,607, respectively, using the Black-Scholes Option-Pricing Model with the above assumptions.

(iii) Warrants issued during quarterly period ended September 30, 2012

For the period ended September 30, 2012, in connection with the sale of 300,000 shares of its common stock at $0.25 per share $75,000 in gross proceeds to the investor, the Company issued warrants to purchase 300,000 shares of its common stock exercisable at $1.25 per share earned and exercisable upon issuance expiring three (3) years from the date of issuance.

The fair value of the warrant grant estimated on the date of grant uses the Black-Scholes Option-Pricing Model with the following assumptions:

Expected life (year)	3.00

Expected volatility	77.15%	*

Risk-free interest rate	0.35%

Dividend yield	0.00%

The Company allocated the gross proceeds of $75,000 between common stock and warrants based on their relative fair value, estimated on the date of grant, valued common stock and the warrant at $56,126 and $18,874, respectively, using the Black-Scholes Option-Pricing Model with the above assumptions.

(iv) Warrants issued during quarterly period ended December 31, 2012

For the period ended December 31, 2012, in connection with the sale of 300,000 shares of its common stock at $0.25 per share $75,000 in gross proceeds to the investor, the Company issued warrants to purchase 300,000 shares of its common stock exercisable at $1.25 per share earned and exercisable upon issuance expiring three (3) years from the date of issuance.

The fair value of the warrant grant estimated on the date of grant uses the Black-Scholes Option-Pricing Model with the following assumptions:

Expected life (year)	3.00

Expected volatility	78.09%	*

Risk-free interest rate	0.34%

Dividend yield	0.00%

The Company allocated the gross proceeds of $75,000 between common stock and warrants based on their relative fair value, estimated on the date of grant, valued common stock and the warrant at $56,113 and $18,887, respectively, using the Black-Scholes Option-Pricing Model with the above assumptions

Exercise of warrants and warrants outstanding

For the year ended December 31, 2012, none of the warrants have been exercised and as of December 31, 2012 warrants to purchase 1,620,000 shares of Company common stock remain outstanding.

Summary of warrant activities

The table below summarizes the Company’s non-derivative warrant activities through December 31, 2012:

	Number of Warrant Shares		Exercise Price Range Per Share			Weighted Average Exercise Price			Fair Value at Date of Issuance		Aggregate Intrinsic Value
Balance, December 31, 2011		5,320,000		$	17.50		$	17.55	$	79,000		$	-

Granted		1,240,000		$	1.25		$	1.25	$	77,367			-

Canceled for cashless exercise		-			-			-		-			-

Exercised (Cashless)		-			-			-		-			-

Exercised		-			-			-		-			-

Expired		-			-			-		-			-

Balance, December 31, 2012		6,560,000		$	17.50-1.25		$	14.43	$	156,367		$	-

Earned and exercisable, December 31, 2012		6,560,000		$	17.50-1.25		$	14.43	$	156,637		$	-

Unvested, December 31, 2012		-		$	-		$	-	$	-		$	-

The following table summarizes information concerning outstanding and exercisable warrants as of December 31, 2012:

	Warrants Outstanding						Warrants Exercisable
Range of Exercise Prices	Number Outstanding		Average Remaining Contractual Life (in years)		Weighted Average Exercise Price		Number Exercisable		Average Remaining Contractual Life (in years)		Weighted Average Exercise Price

$1.25		6,560,000		21.87	$	14.43		6,560,000		1.87	$	14.43

- Definition

The entire disclosure for shareholders' equity, comprised of portions attributable to the parent entity and noncontrolling interest, if any, including other comprehensive income (as applicable). Including, but not limited to: (1) balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings; (2) accumulated balance for each classification of other comprehensive income and total amount of comprehensive income; (3) amount and nature of changes in separate accounts, including the number of shares authorized and outstanding, number of shares issued upon exercise and conversion, and for other comprehensive income, the adjustments for reclassifications to net income; (4) rights and privileges of each class of stock authorized; (5) basis of treasury stock, if other than cost, and amounts paid and accounting treatment for treasury stock purchased significantly in excess of market; (6) dividends paid or payable per share and in the aggregate for each class of stock for each period presented; (7) dividend restrictions and accumulated preferred dividends in arrears (in aggregate and per share amount); (8) retained earnings appropriations or restrictions, such as dividend restrictions; (9) impact of change in accounting principle, initial adoption of new accounting principle and correction of an error in previously issued financial statements; (10) shares held in trust for Employee Stock Ownership Plan (ESOP); (11) deferred compensation related to issuance of capital stock; (12) note received for issuance of stock; (13) unamortized discount on shares; (14) description, terms, and number of warrants or rights outstanding; (15) shares under subscription and subscription receivables, effective date of new retained earnings after quasi-reorganization and deficit eliminated by quasi-reorganization and, for a period of at least ten years after the effective date, the point in time from which the new retained dates; and (16) retroactive effective of subsequent change in capital structure.

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+ Details

Powder River Coal Corp. 10-K