Stockholders' Equity

3 Months Ended

Mar. 31, 2012

Stockholders' Equity

7. Stockholders’ Equity

(a) The Company has an authorized capital of 200,000,000 shares of $0.00001 par value common stock, of which 63,075,122 shares are outstanding as of March 31, 2012.

(b) Share issuances and warrants

On July 28, 2008, the Company completed a self-directed private placement of 6,450,000 units at a price of $0.50 per unit or $3,225,000 in the aggregate. Each unit consists of one share of the Company’s common stock and a total of 12,900,000 warrants to purchase common stock. The warrants had an original term expiring in 2011 and the term was subsequently extended to December 31, 2011. The warrants included a provision for the adjustment of the exercise price and did not meet the conditions for equity classification. As such, the warrants were measured at the fair value and recorded as liabilities on the Company’s balance sheet with the changes in fair value recorded as income or loss until they expired on December 31, 2011. No warrants were exercised prior to December 31, 2011, when they expired. The change in value of the warrant liability during the period from January 1, 2011 to March 31, 2011 resulted in a non-cash gain amounting to $5,836.

(c) Stock options

The Company has an active stock option plan that provides shares available for option grants to employees, directors and others. A total of 120,000,000 shares of the Company’s common stock have been reserved for award under the stock option plan, of which 120,000,000 were available for future issuance as of March 31, 2012. Options granted under the Company’s option plan generally vest over five years or as otherwise determined by the Board of Directors, have exercise prices equal to the fair market value of the common stock on the date of grant, and expire no later than ten years after the date of grant.

During the three month period ended March 31, 2012 and the year ended December 31, 2011, the Company did not grant any stock option awards.