Quarterly report pursuant to sections 13 or 15(d)

6. Stock Options and warrants (Tables)

6. Stock Options and warrants (Tables)

9 Months Ended

Sep. 30, 2012

Stock option activity for the period January 1, 2012 to September 30, 2012, was as follows:

Options	Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term		Aggregate Intrinsic Value
Outstanding at January 1, 2012		24,067,892		$	0.30
Granted		4,850,000			0.26
Exercised		(58,334	)		0.27
Forfeited or expired
Outstanding at September 30, 2012		28,859,558		$	0.30		8.1	$	13,980,449
Vested and exercisable at September 30, 2012		11,279,558		$	0.37		7.3	$	4,838,849

		Outstanding Options						Exercisable Options
Option Exercise Price Per Share		Shares		Life (Years)		Weighted Average Exercise Price		Shares		Weighted Average Exercise Price
	$ 0.21 - $ 0.99		28,532,012		8.1	$	.28		10,952,012	$	0.34
	$ 1.00 - $ 1.99		327,546		2.6		1.25		327,546		1.25
			28,859,558		8.1	$	0.30		11,279,558	$	0.37

Black-Scholes-Merton pricing model with the following average assumptions

During the nine months ended September 30, 2012 and 2011, the Company valued options at the grant date using the Black-Scholes-Merton pricing model with the following average assumptions:

	September 30,
	2012	2011

Expected life (years)	5.0 7.0	6
Risk free interest rate	.75% - 1.27%	1.95%
Volatility	125%-132%	135.00%
Expected dividend yield	0.00%

Stock purchase warrants

The following table summarizes certain information about the Companys stock purchase warrants from January 1, 2012 to September 30, 2012:

Warrants	Shares			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term		Aggregate Intrinsic Value
Outstanding at January 1, 2012		49,106,280		$	0.28
Granted		9,255,716			0.31
Exercised		(6,347,393	)		0.35
Forfeited or expired		(4,062,910	)		0.49
Outstanding at September 30, 2012		47,951,693		$	0.31		1.5	$	22,351,154
Vested and exercisable at September 30, 2012		46,585,026		$	0.31		1.1	$	21,708,821

		Outstanding Warrants						Exercisable Warrants
Warrant Exercise Price Per Share		Shares		Life (Years)		Weighted Average Exercise Price		Shares		Weighted Average Exercise Price
	$ 0.25 - $ 0.99		47,451,693		1.5	$	.30		46,085,026	$	.30
	$ 1.00 - $ 1.99		500,000		1.8		1.00		500,000		1.00
			47,951,693		1.5	$	0.31		46,585,026	$	0.31

- Definition

Tabular disclosure of warrants or rights issued. Warrants and rights outstanding are derivative securities that give the holder the right to purchase securities (usually equity) from the issuer at a specific price within a certain time frame. Warrants are often included in a new debt issue to entice investors by a higher return potential. The main difference between warrants and call options is that warrants are issued and guaranteed by the company, whereas options are exchange instruments and are not issued by the company. Also, the lifetime of a warrant is often measured in years, while the lifetime of a typical option is measured in months. Disclose the title of issue of securities called for by warrants and rights outstanding, the aggregate amount of securities called for by warrants and rights outstanding, the date from which the warrants or rights are exercisable, and the price at which the warrant or right is exercisable.

+ References + Details