Equity-Based Compensation

9 Months Ended

Sep. 30, 2012

Equity-Based Compensation [Abstract]

Equity-Based Compensation

5. Equity-Based Compensation

On January 1, 2010, the Company's board of directors approved a stock plan. The stock plan known as the 2010 Stock Plan (the "Plan") reserves up to 15,000,000 shares of the Company's authorized common stock for issuance to officers, directors, employees and consultants under the terms of the Plan. The Plan permits the board of directors to issue stock options and restricted stock.

The stock options were valued based on the Black Scholes option pricing model and the inputs and expenses associated with the options are detailed in the December 31, 2011 year end financial statements filed with the SEC on April 16, 2012.

A summary of option activity for the nine months ended September 30, 2012 is presented below:

	Options		Weighted Average Exercise Price		Aggregate Intrinsic Value
Outstanding, December 31, 2011	13,267,000	$	0.17	$	-
Granted	-	$	-
Expired/Cancelled	2,590,000	$	0.23
Exercised	-	$	-
Outstanding, September 30, 2012	10,677,000	$	0.16	$	73,440
Exercisable, September 30, 2012	7,841,828	$	0.12	$	73,440

The aggregate intrinsic values in the table above represent the total pretax intrinsic value (the difference between Company's closing stock price on September 28, 2012 of $0.06 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options on September 30, 2012. The intrinsic value amount changes based on the fair market value of the Company's stock.

	Exercise Prices	Options Outstanding September 30, 2012	Remaining Contractual Life	Options Exercisable September 30, 2012
$	0.04	4,896,000	3.83	4,896,000
$	0.25	5,765,000	1.38	2,938,203
$	0.75	8,000	1.40	4,125
$	1.10	8,000	1.75	3,500
		10,677,000		7,841,828

Option-based compensation expense totaled $42,312 and $57,562 for the three months ended September 30, 2012 and 2011, respectively. Option-based compensation expense totaled $155,063 and $1,116,624 for the nine months ended September 30, 2012 and 2011, respectively. As of September 30, 2012 the Company had $215,904 in unrecognized compensation costs related to non-vested stock options granted under the Plan.