10. Warrants

From time to time, the Company may issue compensation options, compensation warrants and or warrants (collectively the “Warrants”) in connection with a finance offering as an incentive to participate in such offerings. The fair value of any Warrants issued is recorded as additional paid-in capital. The fair value of the Warrants is determined using the Black-Scholes option pricing model.

Activity with respect to all Warrants is presented below for the years ended December 31, 2011, 2010 and 2009:

	2011		2010		2009
	Warrants #	Weighted Average Exercise Price $	Warrants #	Weighted Average Exercise Price $	Warrants #	Weighted Average Exercise Price $
Outstanding at the beginning of year	8,717,363	5.44	5,599,716	7.91	5,599,716	7.91
Granted	--	--	3,117,647	1.00	--	--
Expired	5,599,716	7.91	--	--	--	--
Outstanding at the end of year	3,117,647	1.00	8,717,363	5.44	5,599,716	7.91
Exercisable at the end of year	3,117,647	1.00	5,599,716	7.91	5,599,716	7.91

The weighted average remaining life and exercise price as of December 31, 2011 is summarized below:

Warrants	Outstanding Warrants #	Weighted Average Remaining Life (Months)	Exercisable Warrants #	Weighted Average Exercise Price $
Stock Purchase Warrants	3,117,647	45.5	3,117,647	1.00
	3,117,647	45.5	3,117,647	1.00

The Stock Purchase Warrants enable the holder to purchase one-half of one common share callable warrant and one-half of one common share non-callable warrant at a specified price up to October 15, 2015.

On May 26, 2009, the Board of Directors approved a two-year extension for all compensation options, Compensation Warrants and Share Purchase Warrants from June 20, 2009 to June 20, 2011. The Company has recorded the incremental difference in the fair value of the original and modified instruments on the date of modification. The resulting incremental fair value of $1,754,000 associated with the Stock Purchase Warrants was recorded as a charge to the deficit in the year ended December 31, 2009, with a corresponding entry to additional paid-in capital. The resulting incremental fair value of the Compensation Options and the Compensation Warrants of $264,000 was recorded as a charge to general and administrative expense in the year ended December 31, 2009, with a corresponding entry to additional paid-in capital.