8. STOCK OPTIONS

In May 2008 our board of directors approved the CrowdGather, Inc. 2008 Stock Option Plan (the "Plan"). The Plan permits flexibility in types of awards, and specific terms of awards, which will allow future awards to be based on then-current objectives for aligning compensation with increasing long-term shareholder value.

During the three months ended July 31, 2011, we issued stock options for 50,000 shares of our common stock, exercisable at various dates through May 2016 at fair market value at the date of grant of $0.85 per share to consultants pursuant to the Plan.

For the three months ended July 31, 2011, we recognized $150,000 of stock-based compensation costs as a result of the issuance of stock options to employees, directors and consultants. These costs were calculated in accordance with ASC 505 and are reflected in operating expenses for the period.

Stock option activity was as follows for the three months ended July 31, 2011:


	Number of Options	Weighted-Average Exercise Price		Weighted-Average Remaining Contract Term (Years)	Aggregate Intrinsic Value

Outstanding, May 1, 2011	3,678,750	$	1.13	2.68	$	1,967,015
Granted	50,000		0.85	5.00		45,500
Forfeited/Expired	-		-	-		-
Exercised	-		-	-		-

Outstanding, July 31, 2011	3,728,750	$	1.36	2.21	$	2,012,515
Exercisable, July 31, 2011	1,193,188	$	1.21	1.52	$	1,402,794

A summary of the status of our unvested shares as of July 31, 2011 is presented below:

	Number of Shares		Weighted-Average Grant-Date Fair Value

Non-vested balance, May 1, 2011		2,624,062	$	1,13
Granted		50,000		0.85
Vested		(138,500)		0.91
Forfeited/Expired		-		-


Non-vested balance, July 31, 2011		2,535,562	$	1.13

As of July 31, 2011, total unrecognized stock-based compensation cost related to unvested stock options was $1,747,448, which is expected to be recognized over a weighted-average period of approximately 2.21 years.

The fair value of each option grant is estimated on the date of the grant using the Black-Scholes option-pricing model based on the following weighted-average assumptions:

	July 31, 2011

Risk-free interest rate		0.78% to 1.03%
Expected volatility		100.00%
Expected option life (in years)		4.00
Expected dividend yield		0.00

The risk-free interest rate is based on the implied yield currently available on U.S. Treasury zero coupon issues. The expected volatility is primarily based on historical volatility levels of our public company peer group. The expected option life of each award granted was calculated using the “simplified method” in accordance with ASC 718.