The Company’s board of directors approved a stock option plan on August 11, 2009. The purpose of the Plan is to provide employees and consultants of the Corporation and its Subsidiaries with an increased incentive to make significant and extraordinary contributions to the long-term performance and growth of the Corporation and its Subsidiaries, to join the interests of employees and consultants with the interests of the shareholders of the Corporation, and to facilitate attracting and retaining employees and consultants of exceptional ability. The total number of shares available for grant under the terms of the Plan is 4,000,000. The stock option price is the market price of the share at the date of issuance, but may be changed by the Board of Directors or designee from time to time. The stock options are non-transferable and expire not more than five (5) years from the date of the granting.

The Company recognizes compensation expense straight-line over the vesting term. Historically, the Company has issued new shares to satisfy exercises of stock options and the Company expects to issue new shares to satisfy any future exercises of stock options.

At December 31, 2012, and September 30, 2012, the Company had 2,040,000 options granted and outstanding. The outstanding options have a weighted average remaining term of 1.75 years.

There was no grant, exercise or forfeiture of stock options during the three months ended December 31, 2012 nor during the year ended September 30, 2012. As of December 31, 2012 and September 30, 2012, there are 2,040,000 stock options outstanding with a weighted average exercise price of $0.20 per share. The weighted average fair value of the options outstanding is $408,000. There is no aggregate intrinsic value for the options outstanding.

A summary of the status of the Company’s nonvested stock options outstanding at September 30, 2012 is presented as follows:

		Number of options			Weighted Average Per Share			Weighted Average Fair Value
Nonvested, September 30, 2011			160,000	$		0.16	$		25,169
	Granted		-			-			-
	Vested		(80,000)			0.16			(12,585)
	Forfeited					-
Nonvested, September 30, 2012			80,000	$		0.16	$		12,584
	Granted		-			-			-
	Vested
	Forfeited		-			-			-
Nonvested, December 31, 2012			80,000	$		0.16	$		12,584

As of December 31, 2012, there was $9,438 of total unrecognized compensation cost related to nonvested share-based compensation arrangements granted under the Plan. That cost is expected to be recognized over a weighted-average period of .75 years.