STOCK-BASED COMPENSATION PLAN AND WARRANTS (Tables)

9 Months Ended

Sep. 30, 2014

STOCK-BASED COMPENSATION PLAN AND WARRANTS [Abstract]

Summary of the status of stock options

A summary of the status of stock options under the Plan as of September 30, 2014 and December 31, 2013 is as follows:

	9/30/2014					12/31/2013
	Number of Shares			Weighted Average Exercise Price		Number of Shares			Weighted Average Exercise Price
Outstanding at beginning of year		9,583,762		$	1.16		7,728,877		$	1.01
Granted		2,372,800		$	0.58		2,176,535		$	1.67
Exercised		-		$	-		(293,650	)	$	0.98
Expired and Cancelled		(922,887	)	$	0.99		(28,000	)	$	2.18
		11,033,675					9,583,762
Outstanding, end of period		11,033,675		$	1.05		9,583,762		$	1.16
Exercisable at end of period		10,372,100		$	1.09		9,536,262		$	1.17

Stock option valuation assumptions

The fair value of each stock option granted is estimated on the date of grant using the Black-Scholes option valuation model.  This model uses the assumptions listed in the table below for stock options granted in 2014.  Expected volatilities are based on the historical volatility of the Company’s stock.  The risk-free rate for periods within the expected life of the option is based on the U.S. Treasury yield curve in effect at the time of grant.

	9/30/2014
Weighted average fair value per option granted	$0.3130 - $0.4968
Risk-free interest rate	.086 - 1.75%
Expected dividend yield	0.00%
Expected lives	2.688
Expected volatility	82.11 - 98.91%

Stock options outstanding by price range

Stock options outstanding at September 30, 2014 are as follows:

Range of Exercise Prices		Options Outstanding		Weighted Average Remaining Contractual Life		Weighted Average Exercise Price		Options Exercisable
$	0.01-$1.50		8,716,807		2.1	$	0.73		8,055,232
$	1.51-$3.00		2,191,868		3.0	$	1.67		2,191,868
$	3.01-$5.00		125,000		3.1	$	3.11		125,000
			11,033,675		2.3	$	1.06		10,372,100

Summary of warrant activity

The summary of the status of the warrants issued by the Company as of September 30, 2014 and December 31, 2013 are as follows:

	9/30/2014					12/31/2013
	Number of  Warrants			Weighted Average  Exercise Price		Number of Warrants			Weighted Average Exercise Price
Outstanding at beginning of year		16,688,265		$	1.44		23,392,811		$	1.46
Granted		-		$	-		4,010,295		$	1.18
Exercised		-		$	-		(2,287,730	)	$	1.28
Cashless Exercises		-		$	-		(8,082,535	)	$	1.43
Expired and Cancelled		(241,914	)	$	0.87		(344,576	)	$	0.88
		16,446,351					16,688,265
Outstanding, end of period		16,446,351		$	1.44		16,688,265		$	1.44
Exercisable at end of period		16,446,351		$	1.44		16,688,265		$	1.44