STOCK OPTIONS, WARRANTS AND DERIVATIVE LIABILITIES (Tables)

6 Months Ended

Jun. 30, 2012

STOCK OPTIONS, WARRANTS AND DERIVATIVE LIABILITIES [Abstract]

Schedule Of Options Granted And Valuation Assumptions

Stock Option Awards

The Company grants share-based awards under the 2008 Stock and Incentive Compensation Plan ("2008 Plan") and the 2011 Non-Employee Director Stock Option Program ("Director Program"), which, among other things, (a) encourages employees and directors to help increase the profitability and growth of the Company; (b) provide competitive compensation to employees; (c) attract and retain exceptional personnel and encourage excellence in the performance of individual responsibilities; and (d) motivate key employees and directors to contribute to the Company's success.

The fair value of the share-based payments is recognized as compensation expense over the various expected lives of the different options. For the three months ended June 30, 2012 and 2011, compensation expense charged to income was $160,269 and $105,720, respectively. For the six months ended June 30, 2012 and 2011, compensation expense was $312,564 and $201,297, respectively.

The amount of unrecognized compensation expense for all share-based awards as of June 30, 2012 was approximately $2,117,801, which is expected to be recognized over a weighted-average remaining life of approximately 3.84 years.

The table below identifies the Company's June 30, 2012 and the year ended December 31, 2011 options granted for Officers, employees and Directors and the factors used to value the share-based compensation expense for each option.

Option Schedule and Valuation Assumptions for 2012 and 2011 Options
Grant Date	Expiration Date	Option Term in Years	Number of Options	Exercise Price		Market Price at Grant Date		Estimated Life for Valuation (Years)	Volatility Factor		Risk Free Return Factor		Valuation Per Option		Total Compensation Expense
2/2/2011	2/2/2021	10.00	100,000	$	2.62	$	2.62	3.5	72.15	%	1.12	%	$	1.344	$	134,350
2/2/2011	2/2/2021	10.00	100,000	$	2.62	$	2.62	4.5	72.15	%	2.10	%	$	1.523	$	152,272
2/2/2011	2/2/2021	10.00	100,000	$	2.62	$	2.62	5.5	72.15	%	2.10	%	$	1.578	$	157,843
8/15/2011	8/15/2021	10.00	50,000	$	2.96	$	2.96	3.0	78.36	%	0.34	%	$	1.496	$	74,794
8/23/2011	1/31/2013	1.44	50,000	$	1.81	$	2.96	1.44	77.821	%	0.22	%	$	1.542	$	77,078
8/23/2011	8/23/2021	10.00	125,000	$	2.96	$	2.96	3.0	77.821	%	0.38	%	$	1.488	$	186,001
12/9/2011	12/9/2021	10.00	300,000	$	2.25	$	2.25	9.95	104.088	%	0.82	%	$	1.712	$	513,480
12/9/2011	12/9/2021	10.00	275,000	$	2.25	$	2.25	9.95	104.088	%	1.82	%	$	2.045	$	562,507
3/5/2012	3/5/2022	10.00	100,000	$	2.73	$	2.73	5.0	113.393	%	0.87	%	$	2.180	$	217,910

Schedule of Share-based Compensation, Stock Options, Activity

A summary of stock option activity for 2012 and 2011 is as follows:

	Shares		Weighted average  exercise price
Outstanding at December 31, 2010	3,908,471		$2.060
Granted	1,100,000		$2.440
Exercised	(1,050,000	)	$1.810
Expired/Forfeited	(187,662	)	$2.930
Outstanding at December 31, 2011	3,770,809		$2.200
Granted	100,000		$2.725
Exercised	(33,000	)	$2.250
Outstanding at June 30, 2012	3,837,809		$2.214

Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest, Outstanding and Exercisable

The following table summarizes information about stock options outstanding and exercisable at June 30, 2012:

Exercise Price		Options outstanding	Weighted average  remaining contractual life (years)	Options exercisable
$1.81		1,950,000	0.5885	None
$1.81		100,000	0.5885	None
$3.85		122,079	6.9051	122,079
$4.24		25,974	1.9051	25,974
$3.65		47,256	7.2647	47,256
$2.70		425,500	8.2473	425,500
$2.62		100,000	3.5912	100,000
$2.62	*	100,000	3.5912	None
$2.62	*	100,000	3.5912	None
$2.96	*	50,000	9.1233	None
$2.96	*	125,000	9.1452	None
$1.81		50,000	0.5885	None
$2.25		542,000	9.4408	575,000
$2.73		100,000	9.6760	100,000
$2.21		3,837,809	3.8412	1,395,809

* - Non-vested at June 30, 2012 or December 31, 2011. Weighted average remaining life at June 30, 2012.

Summary of Nonvested Stock Options

The following table summarizes information about non-vested options for the year ended December 31, 2011 and the six months endedJune 30, 2012.

	Shares		Weighted Average Grant Date Fair Value			Per Share Fair Value
Outstanding Non-Vested Options 1/1/2011	—		—			—
Granted 2011	1,100,000		$	1,858,535		$1.690
Vested 2011	(725,000	)	$	(1,285,168	)	$1.773
Forfeited 2011	—		$	—
Outstanding Non-Vested Options at 12/31/2011	375,000		$	573,367		$1.529
Granted 2012	100,000		$	272,500		$2.725
Vested 2012	(100,000	)	$	(272,500	)	$2.725
Forfeited 2012	—
Outstanding Non-Vested Options at 6/30/2012	375,000		$	573,367		$1.529

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions

The weighted average fair value per share of options granted was $2.440 for 2011 and $2.725 for the six months ended June 30, 2012. The fair value of each grant is estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions:

	June 30, 2012		2011
Dividend yield	—	%	—	%
Expected volatility	98.533	%	90.03	%
Expected lives	5.00		5.63
Risk-free interest rate	0.41	%	1.23	%

Schedule of Nonvested Share Activity

The following table summarizes our outstanding non-vested stock options:

Grant	Number	Exercise	Contractual
Date	of Shares	Price	Life in Years
2/2/2011	200,000	$2.62	3.59
8/15/2011	50,000	$2.96	9.12
8/23/2011	125,000	$2.96	9.15
Totals	375,000	$2.78	6.18

Schedule Of Unearned Compensation To Be Expensed

	2012		2013		2014		2015		2016
Unearned Compensation to be Expensed by Year	$	149,816	$	149,816	$	118,434	$	49,254	$	17,496

Warrant Valuation Assumptions

The following factors were used to value the warrants which were issued beginning in the first quarter of 2010 through the current date:

	Warrants Issue with Debt
Grant Date	2/26/2010			3/31/2010			4/30/2010		6/3/2010		6/30/2010		8/5/2010		Totals
Stock Price at Issue	$	3.40		$	3.10		$	3.00	$	3.00	$	3.00	$	2.70
Exercise Price	$	4.00		$	4.00		$	3.00	$	3.00	$	3.00	$	3.00
Warrants Granted in Connection with Debt	212,500			112,500			208,334		50,001		75,002		83,335		741,672
Warrant Term in Years	5			5			5		5		5		5
3/31/2010
Volatility	48.000		%	48.000		%
Risk Free Rate of Return	2.3		%	2.3		%

Value at Issue	$	284,868		$	128,086														$	412,954
Change in Value During the Quarter	$	(42,928	)	—															$	(42,928	)
Value at Quarter End	$	241,940		$	128,086														$	370,026
6/30/2010
Volatility	42.26		%	42.26		%	42.26		%	42.26		%	42.26		%
Risk Free Rate of Return	1.79		%	1.79		%	1.79		%	1.79		%	1.79		%
Value at Issue/Prior Quarter End	$	241,940		$	128,086		$	261,803		$	60,901		$	88,199					$	780,929
Change in Value During the Quarter	$	(58,660	)	$	(29,840	)	$	(20,796	)	$	(2,578	)	—						$	(111,874	)
Value at Quarter End	$	183,280		$	98,246		$	241,007		$	58,323		$	88,199					$	669,055
9/30/2010
Volatility	34.79		%	34.79		%	34.79		%	34.79		%	34.79		%	34.79		%
Risk Free Rate of Return	1.27		%	1.27		%	1.27		%	1.27		%	1.27		%	1.27		%
Value at Issue/Prior Quarter End	$	183,280		$	98,246		$	241,007		$	58,323		$	88,199		$	82,631		$	751,686
Change in Value During the Quarter	$	(82,378	)	$	(43,907	)	$	(87,004	)	$	(20,966	)	$	(31,577	)	$	(19,071	)	$	(284,903	)
Value at Quarter End	$	100,902		$	54,339		$	154,003		$	37,357		$	56,622		$	63,560		$	466,783
12/31/2010
Volatility	69.618		%	69.618		%	69.618		%	69.618		%	69.618		%	69.618		%
Risk Free Rate of Return	2.01		%	2.01		%	2.01		%	2.01		%	2.01		%	2.01		%
Change in Value	$	200,987		$	107,237		$	190,699		$	46,040		$	68,472		$	77,605		$	691,040
Value at Quarter End	$	301,889		$	161,576		$	344,702		$	83,397		$	125,094		$	141,165		$	1,157,823
3/31/2011
Volatility	72.148		%	72.148		%	72.148		%	72.148		%	72.148		%	72.148		%
Risk Free Rate of Return	2.24		%	2.24		%	2.24		%	2.24		%	2.24		%	2.24		%
Change in Value	$	(108,199	)	$	(57,508	)	$	(117,557	)	$	(28,279	)	$	(42,416	)	$	(47,338	)	$	(401,297	)
Value at Quarter End	$	193,690		$	104,068		$	227,145		$	55,118		$	82,678		$	93,827		$	756,526
6/30/2011

Volatility	82.902		%	82.902		%	82.902		%	82.902		%	82.902		%	82.902		%
Risk Free Rate of Return	0.81		%	0.81		%	0.81		%	0.81		%	0.81		%	0.81		%
Change in Value	$	59,469		$	31,755		$	59,873		$	14,459		$	23,142		$	26,025		$	214,723
Value at Quarter End	$	253,159		$	135,823		$	287,018		$	69,577		$	105,820		$	119,852		$	971,249
9/30/2011
Volatility	76.266		%	76.266		%	76.266		%	76.266		%	76.266		%	76.266		%
Risk Free Rate of Return	0.42		%	0.42		%	0.42		%	0.42		%	0.42		%	0.42		%
Change in Value	$	(39,820	)	$	(21,214	)	$	(38,454	)	$	(9,270	)	$	(15,360	)	$	(17,227	)	$	(141,345	)
Value at Quarter End	$	213,339		$	114,609		$	248,564		$	60,307		$	90,460		$	102,625		$	829,904
12/31/2011
Volatility	106.735		%	106.735		%	106.735		%	106.735		%	106.735		%	106.735		%
Risk Free Rate of Return	0.36		%	0.36		%	0.36		%	0.36		%	0.36		%	0.36		%
Change in Value	$	133,395		$	71,258		$	128,210		$	30,980		$	47,727		$	52,280		$	463,850
Value at Quarter End	$	346,734		$	185,867		$	376,774		$	91,287		$	138,187		$	154,905		$	1,293,754
3/31/2012
Volatility	113.393		%	113.393		%	113.393		%	113.393		%	113.393		%	113.393		%
Risk Free Rate of Return	0.51		%	0.51		%	0.51		%	0.51		%	0.51		%	0.51		%
Change in Value	$	48,329		$	26,145		$	50,069		$	12,241		$	18,361		$	20,848		$	175,993
Value at Quarter End	$	395,063		$	212,012		$	426,843		$	103,528		$	156,548		$	175,753		$	1,469,747
6/30/2012
Volatility	98.53		%	98.53		%	98.53		%	98.53		%	98.53		%	98.53		%
Risk Free Rate of Return	0.41		%	0.41		%	0.41		%	0.41		%	0.41		%	0.41		%
Change in Value	$	(161,017	)	$	(85,543	)	$	(158,492	)	$	(38,116	)	$	(57,260	)	$	(63,742	)	$	(564,170	)
Value at Quarter End	$	234,046		$	126,469		$	268,351		$	65,412		$	99,288		$	112,011		$	905,577

Fair Value, Liabilities Measured on Recurring and Nonrecurring Basis

Liabilities measured at fair value on a recurring or non-recurring basis as of June 30, 2012 and December 31, 2011 were as follows:

	Level 1		Level 2		Level 3		Total
2012
Derivative liabilities	$	—	$	905,577	$	—	$	905,577
Total Liabilities at Fair Value	$	—	$	905,577	$	—	$	905,577
2011
Derivative liabilities	$	—	$	1,293,754	$	—	$	1,293,754
Total Liabilities at Fair Value	$	—	$	1,293,754	$	—	$	1,293,754

Note- No assets or other liabilities were measured at fair value during 2012 or 2011.

Schedule of Stock Purchase Warrants Outstanding

The following table summarizes the terms and values of the Company’s stock purchase warrants outstanding at June 30, 2012 and December 31, 2011:

Warrant Holder	Exercise Price		Warrants Outstanding	Weighted Average Remaining Life	Shares Exercisable	Black-Scholes Valuation
2012 Warrant Details
February 26, 2010	$	4.00	212,500	2.91	212,500	$	395,063
March 31, 2010	$	4.00	112,500	3.00	112,500	$	212,012
April 30, 2010	$	3.00	208,334	3.08	208,334	$	426,844
June 3, 2010	$	3.00	50,001	3.18	50,001	$	103,527
June 30, 2010	$	3.00	75,002	3.25	75,002	$	156,548
August 5, 2010	$	3.00	83,335	3.35	83,335	$	175,753
A Warrants	$	1.81	512,941	0.75	512,941	$	203,777
B Warrants	$	1.99	512,941	0.75	512,941	$	164,994
AA Warrants	$	1.81	453,795	0.75	453,795	$	180,280
June 30, 2012			2,221,349	1.50	2,221,349	$	2,018,798
Weighted average exercise price						$	2.40
2011 Warrant Details
February 26, 2010	$	4.00	212,500	3.17	212,500	$	346,734
March 31, 2010	$	4.00	112,500	3.25	112,500	$	185,867
April 30, 2010	$	3.00	208,334	3.33	208,334	$	376,774
June 3, 2010	$	3.00	50,001	3.42	50,001	$	91,286
June 30, 2010	$	3.00	75,002	3.50	75,002	$	138,188
August 5, 2010	$	3.00	83,335	3.58	83,335	$	154,905
A Warrants	$	1.81	512,941	1.00	512,941	$	203,777
B Warrants	$	1.99	512,941	1.00	512,941	$	164,994
AA Warrants	$	1.81	533,458	1.00	533,458	$	211,928
December 31, 2011			2,301,012	1.74	2,301,012	$	1,874,453
Weighted average exercise price						$	2.37