Stock Options and Warrants

9 Months Ended

Sep. 30, 2011

Stock Options and Warrants [Abstract]

NOTE 6 STOCK OPTIONS AND WARRANTS

Stock Options Granted May 2011

In May 2011, the Company granted stock options to two employees to purchase a total of 100,000 and 50,000 shares of common stock exercisable at $3.02 and $3.55 per share, respectively. The total fair value of the options was calculated using the Black-Scholes valuation model based on factors present at the time the options were granted. The options vest over one year with all of the options vesting on the anniversary date of the grant.

The following assumptions were used for the Black-Scholes model:

	May
	2011
Risk free rates		1.84	%
Dividend yield		0	%
Expected volatility		71.96	%
Weighted average expected stock options life	3Years

The “fair market value” at the date of grant for stock options granted is as follows:

Weighted average fair value per share	$	2.05
Total stock options granted		150,000
Total weighted average fair value of stock options granted	$	308,017

Stock Options

The following summarizes activities concerning outstanding options to purchase shares of the Company’s common stock as of and for the period ending September 30, 2011:

· Options covering 4,000 shares were exercised during the nine months ended September 30, 2011.

· Options covering 150,000 shares were forfeited during the nine months ended September 30, 2011.

· Options covering 50,000 shares expired during the nine months ended September 30, 2011.

· The Company recognized $250,411 of expense and capitalized $65,539 related to outstanding options for the nine-month period ended September 30, 2011.

· The Company will recognize $804,485 of compensation expense in future periods relating to options that have been granted as of September 30, 2011.

· There were 600,000 unvested options at September 30, 2011.

Warrants Granted February 2011

In February 2011, in conjunction with the sale of 12,500,000 shares of common stock (see Note 5), the Company issued investors warrants to purchase a total of 6,250,000 shares of common stock exercisable at $7.10 per share.

The table below reflects the status of warrants outstanding at September 30, 2011:

Issue Date	Warrants		Exercise Price		Expiration Date
December 1, 2009		260,509	$	0.98	December 1, 2019
December 31, 2009		1,302,542	$	0.98	December 31, 2019
February 8, 2011		6,250,000	$	7.10	February 8, 2016
		7,813,051

No warrants were forfeited or expired during the nine month period ended September 30, 2011. The Company recorded expense related to these warrants of $210,580 and capitalized $151,731 for the nine-month period ended September 30, 2011. Unamortized compensation cost relating to warrants previously granted totals $114,124 as of September 30, 2011. There were 6,250,000 warrants exercisable at September 30, 2011, and 1,563,051 that become exercisable during December 2011.