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OPTIONS AND WARRANTS
 6 Months Ended
Jun. 30, 2011
Notes to Financial Statements  
OPTIONS AND WARRANTS

NOTE 10 – OPTIONS AND WARRANTS

 

Share-based Compensation:

 

The 2009 Stock Incentive Plan (the “Incentive Plan”) authorizes the issuance of various forms of stock-based awards, including incentive or non-qualified options, restricted stock awards, performance shares and other securities as described in greater detail in the Incentive Plan, to the Company’s employees, officers, directors and consultants.  Options to purchase a total of 5 million shares are authorized to be issued under the Incentive Plan.  As of June 30, 2011, 2 million shares have been granted under this plan.

 

Options

In February 2011, options to purchase an aggregate of 2 million shares were granted to certain named executives and non-executive members of the management team at an exercise price of $0.09 per share.  The options have a ten year term and vested immediately upon the date of grant.  A fair value of $169,369 was recorded using the Black-Scholes option-pricing model.  Variables used in the Black-Scholes option-pricing model for the options issued during the three month period ended June 30, 2011 include (1) discount rate of 3.52%, (2) expected term of 5 years, (3) expected volatility of 369.75% and (4) zero expected dividends.

 

During the six month period ended June 30, 2011, the Company recognized share-based compensation expense of $171,997. The remaining amount of unamortized options expense at June 30, 2011 is $-0-.  The intrinsic value of outstanding as well as exercisable options at June 30, 2011 was $-0-.

 

Activity in options during the six month period ended June 30, 2011 and related balances outstanding as of that date are reflected below:

 

  Number of Shares   Weighted Average Exercise Price   Weighted Average Remaining Contract Term (# years)
Outstanding at January 1, 2011 2,358,792   $ 0.61    
Granted 2,000,000   0.09    
Exercised -   -    
Forfeited and cancelled -   -    
           
Outstanding at June 30, 2011 4,358,792   $ 0.37   6.3
           
Exercisable at June 30, 2011 4,350,459   $ 0.37   6.3

 

Warrants

 

In February 2011, 2,000,000 warrants with an exercise price of $0.10 per share expired without being exercised.

 

On May 18, 2011, Blast agreed with Trident Partners to amend their placement agreement as it pertains to Trident’s 10% share of the royalty offered to the Investor introduced to Blast by Trident. In lieu of a share in the royalty interest and as consideration for entering into the amendment, Blast agreed to grant to certain principals of Trident fully vested warrants, exercisable for two years to purchase up to 400,000 shares of Blast’s common stock at an exercise price of $0.01 per share.

 

The fair value of the warrants granted of $44,528 was expensed during the three months ended June 30, 2011 and the warrants were valued using the Black-Scholes option-pricing model. Variables used in the Black-Scholes pricing model for the 400,000 warrants include: (1) discount rate of 0.42%, (2) expected term of 2 years, (3) expected volatility of 164.80% and (4) zero expected dividends. The warrants vested immediately, have an exercise price of $0.01 per share and are exercisable for a period of two years from the grant date.

 

During the six month period ended June 30, 2011, the Company recognized share-based compensation expense of $44,528. The remaining amount of unamortized warrant expense at June 30, 2011 was $-0-.  The intrinsic value of outstanding as well as exercisable warrants at June 30, 2011 was $117,315.

 

Activity in warrants during the six months ended June 30, 2011 and related balances outstanding as of that date are reflected below. The intrinsic value of the exercisable warrants at June 30, 2011 was $117,305.

 

  Number of Shares   Weighted Average Exercise Price   Weighted Average Remaining Contract Term (# years)
Outstanding at January 1, 2011 12,245,089   $ 0.84    
Granted 400,000   0.01    
Exercised (750,000)   0.01    
Expired (2,000,000)   0.10    
Forfeited and cancelled -   -    
           
Outstanding at June 30, 2011 9,895,089   $ 0.84   2.1
           
Exercisable at June 30, 2011 9,895,089   $ 0.84   2.1