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Stock Option Plans

9 Months Ended

Sep. 30, 2012

Note 13 — Stock Option Plans

A summary of stock option activity for the nine months ended September 30, 2012 is as follows.

				Weighted
				Average
	Number of Shares			Exercise Price		Exercise Price Range

Outstanding at December 31, 2011		20,089,216		$	0.1301		$ 0.0061 – $ 0.2334
Granted		—		$	—	$	—
Exercised		—		$	—	$	—
Expired or Forfeited		(3,412,676	)	$	0.1629		$ 0.0015 – $ 0.2334

Outstanding at September 30, 2012		16,676,540		$	0.1247		$ 0.0061 – $ 0.2334

As of September 30, 2012, there were 13,909,248 options that were fully vested and exercisable at a weighted average exercise price of $0.1191 per share. The weighted average remaining contractual term on the vested options is 4.80 years.

As of September 30, 2012 there were 2,767,292 unvested options exercisable at a weighted average exercise price of $0.1420 per share. The weighted average remaining contractual term on the unvested options is 8.0 years.

No cash was received from option exercises for the nine months ended September 30, 2012 and 2011.

The table below summarizes the impact of outstanding stock options on the results of operations for the three and nine months ended September 30, 2012 and 2011:

	Three Months Ended				Nine Months Ended
	September 30, 2012		September 30, 2011		September 30, 2012		September 30, 2011

Stock-based compensation expense: - - Stock Options	$	32,782	$	85,070	$	139,451	$	223,899
Income tax benefit		—		—		—		—
Net Decrease in Net Income	$	32,782	$	85,070	$	139,451	$	223,899

Per share increase in Loss Per Share:

Basic and Diluted	$	0.0002	$	0.0003	$	0.0004	$	0.0008

The weighted average fair value of option grants was calculated using the Black-Scholes-Merton option pricing method. At September 30, 2012, the Company had approximately $199,386 of unrecognized stock compensation expense, which will be recognized over a weighted average period of approximately 1.6 years.