Stock Based Compensation

9 Months Ended

Sep. 30, 2012

Stock Based Compensation [Text Block]

9.	Stock-based Compensation
	The Company adopted a Stock Option Plan dated November 7, 2005 under which the Company is authorized to grant stock options to acquire up to a total of 10,000,000 shares of common stock. No options shall be issued under the Stock Option Plan at a price per share less than the defined Market Price. On June 11, 2008, the Company modified the Stock Option Plan to define Market Price as the volume weighted average trading price of the Company’s common shares for the five trading days before the date of grant on the Toronto Stock Exchange or American Stock Exchange, now the NYSE MKT, whichever has the greater trading volume. On June 15, 2011, the Company amended the 2005 Non-Qualified Stock Option Plan to increase the number of shares authorized for issuance under the plan from 10,000,000 to 30,000,000 and extend the plan termination date for an additional 10 years.
	During the nine months ended September 30, 2012, the Company recorded $247,434 for the vesting of previously granted stock options, as general and administrative expense.
	During the nine months ended September 30, 2011, the Company granted 1,979,500 stock options with immediate vesting to directors, officers, employees and consultants to acquire 1,045,000 common shares at an exercise price of $3.98 per share expiring in 5 – 10 years, 884,500 common shares at an exercise price of $3.21 per share for 10 years, and 50,000 common shares at $2.87 per share for 2 years. During the nine months ended September 30, 2011, the Company recorded stock-based compensation for the vested options of $5,060,501, as general and administrative expense.
	The fair values of stock options granted were estimated at the date of grant using the Black-Scholes option- pricing model and the weighted average grant date fair values of stock options granted and vested during the nine months ended September 30, 2012 and 2011 were $nil and $2.54 per share, respectively.
	The weighted average assumptions used for each of the nine months ended September 30, are as follows:

	2012	2011
Expected dividend yield	–	0%
Risk-free interest rate	–	1.83%
Expected volatility	–	98%
Expected option life (in years)	–	4.43

The total intrinsic value of stock options exercised during the nine months ended September 30, 2012 and 2011 was $159,894, and $6,753,095, respectively.

The following table summarizes the continuity of the Company’s stock options:

				Weighted-
			Weighted	Average
			Average	Remaining	Aggregate
	Number of		Exercise	Contractual	Intrinsic
	Options		Price	Term (years)	Value
			$		$
Outstanding, December 31, 2011	7,751,180		2.54	7.08	1,162,421
Exercised	(116,300	)	0.81
Expired	(45,000	)	3.05
Outstanding, September 30, 2012	7,589,880		2.56	6.39	803,911
Exercisable, September 30, 2012	7,108,380		2.61	6.20	803,911

A summary of the status of the Company’s non-vested stock options outstanding as of December 31, 2011, and changes during the nine months ended September 30, 2012 is presented below:

		Weighted Average
	Number of	Grant Date
Non-vested stock options	Options	Fair Value
		$
Non-vested at December 31, 2011 and September 30, 2012	481,500	1.37

As at September 30, 2012, there was $395,532 of unrecognized compensation cost related to non-vested stock option agreements. This cost is expected to be recognized over a weighted average period of 1.20 years.