Stock Options

6 Months Ended

Jun. 30, 2011

Notes to Financial Statements

Stock Options

4. Stock Options.

For the three months ended June 30, 2011 and June 30, 2010, respectively, the Company recorded stock-based compensation expense of $36,106 and $14,364, relating to unvested employee stock options.  

Stock options and warrants issued to consultants and other non-employees as compensation for services provided to the Company are accounted for based on the fair value of the services provided or the estimated fair market value of the option or warrant, whichever is more reliably measurable in accordance with FASB ASC 505, Equity, and FASB ASC 718, Compensation – Stock Compensation. The related expense is recognized over the period the services are provided.

A summary of the Company’s stock option plans as of June 30, 2011, and changes during the six-month period then ended is presented below:

	Six Months Ended June 30, 2011
	Number of Options	Weighted Average Exercise Price
Options outstanding at December 31, 2010	2,161,583	$	.42
Options granted	820,000		.28
Options exercised	—		—
Options expired	—		—
Options cancelled	40,000		.25
Options at June 30, 2011	2,941,583	$	.38
Options exercisable at June 30, 2011	1,283,541	$	.54

A summary of the Company’s stock option plans as of June 30, 2011, and changes during the three-month period then ended is presented below:

	Three Months Ended June 30, 2011
	Number of Options	Weighted Average Exercise Price
Options outstanding at March 31, 2011	2,981,583	$	.38
Options exercised	—		—
Options cancelled	40,000		.25
Options at June 30, 2011	2,941,583	$	.38
Options exercisable at June 30, 2011	1,283,541	$	.54

Changes in the Company’s unvested options for the six months ended June 30, 2011 are summarized as follows:

	Six Months Ended June 30, 2011
	Number of Options	Weighted Average Exercise Price
Non-Vested options at December 31, 2010	1,240,795	$	.23
Options granted	820,000		.28
Options vested	362,753		.23
Options cancelled	40,000		.25
Non-Vested options at June 30, 2011	1,658,042	$	.12

Changes in the Company’s unvested options for the three months ended June 30, 2011 are summarized as follows:

	Three Months Ended June 30, 2011
	Number of Options		Weighted Average Exercise Price
Non-Vested options at March 31, 2011	1,957,542		$	.14
Options granted	—			—
Options vested	(259,500	)		.47
Options cancelled	(40,000	)		.25
Non-Vested options at June 30, 2011	1,658,042		$	.12

	Options Outstanding				Options Exercisable
Range of Exercise Price	Number Outstanding	Remaining Average Contractual Life (In Years)		Weighted Average Exercise Price	Number Exercisable		Weighted Average Exercise Price
$ .14  – $ 1.70	2,893,583	5.75	$	.27	1,235,541	$	.47
1.99    –   2.60	48,000	1.58		2.32	48,000		2.32
Totals	2,941,583	4.98	$	.38	1,283,541	$	.54