STOCK-BASED COMPENSATION

3 Months Ended

Sep. 30, 2011

Stock-BasedCompensationAbstract

STOCK-BASED COMPENSATION

F. STOCK-BASED COMPENSATION

Stock options

The Company has agreements with certain of its employees and independent contractor consultants that provide grants of options to purchase the Company’s common stock.

A summary of stock options as of September 30, 2011 is as follows:

	Number of		Weighted - Average
	Shares		Exercise Price
Outstanding at June 30, 2011	824,249			$0.47
Expired	(40,000	)		$0.25
Outstanding at September 30, 2011	784,249			$0.48
Exercisable at September 30, 2011	784,249			$0.48

The weighted-average remaining contractual life of stock options outstanding and exercisable at September 30, 2011 is 2.6 years. The aggregate intrinsic value of stock options outstanding as of September 30, 2011 was $29,800.

The weighted-average fair value of options granted for the three months ended September 30, 2011 and 2010 was $0.00 and $0.14, respectively.

Stock-based compensation expense was $2 and $532 during the three months ended September 30, 2011 and 2010, respectively. As of September 30, 2011, there was no unrecognized compensation costs related to stock options.

Warrants

In connection with the issuance of certain convertible notes payable, the Company has outstanding 275,000 fully invested warrants to acquire its common stock at an exercise price of $2 per share. The warrants expire in 2014. The warrants have no intrinsic value at September 30, 2011.