Quarterly report pursuant to Section 13 or 15(d)

Stock Based Compensation

 v2.3.0.11
Stock Based Compensation
 6 Months Ended
Jun. 30, 2011
Stock Based Compensation  
Note 15 - Stock Based Compensation

Effective July 20, 2005, the Board of Directors of the Company approved the 2005 Stock Option and Restricted Stock Plan (the "2005 Plan"). The 2005 Plan reserves 15,000,000 shares of common stock for grants of incentive stock options, nonqualified stock options, warrants and restricted stock awards to employees, non-employee directors and consultants performing services for the Company. Options and warrants granted under the 2005 Plan have an exercise price equal to or greater than the fair market value of the underlying common stock at the date of grant and become exercisable based on a vesting schedule determined at the date of grant. The options expire 10 years from the date of grant whereas warrants generally expire 5 years from the date of grant. Restricted stock awards granted under the 2005 Plan are subject to a vesting period determined at the date of grant.

 

On May 6, 2009, the Board of Directors adopted, subject to stockholder approval, which was obtained at the annual stockholders meeting held on June 19, 2009, an amendment to the 2005 Plan that increased the number of shares subject to the Stock Plan from 15,000,000 shares to 50,000,000 shares.

 

The Company accounts for stock-based compensation awards in accordance with the provisions of Share-Based Payment, which addresses the accounting for employee stock options which requires that the cost of all employee stock options, as well as other equity-based compensation arrangements, be reflected in the financial statements over the vesting period based on the estimated fair value of the awards.

A summary of stock option activity for the three months ended June 30, 2011 is presented below:

 

          Outstanding Options  
    Shares Available for Grant     Number of Shares     Weighted Average Exercise Price     Weighted Average Remaining Contractual Life (years)     Aggregate Intrinsic Value  
                               
December 31, 2009     9,041,667       40,958,333       0.13       9.30       -  
Stock Plan Amendment     -                                  
Grants     -       -       -       -       -  
Cancellations     50,000       (50,000 )     0.25       -       -  
December 31, 2010     9,091,667       40,908,333       0.13       8.30       -  
Stock Plan Amendment     -                                  
Grants     -       -       -       -       -  
Cancellations     -       -       -       -       -  
June 30, 2011     9,091,667       40,908,333       -       -       -  
                                         
                                         
Options exercisable at:                                        
December 31, 2010             15,037,500       0.13       8.23       -  
June 30, 2011             23,637,500       0.13       7.82          

 

During the six months ended June 30, 2011, the Company did not grant stock-based compensation awards. During the three months ended June 30, 2011, the Company had stock-based compensation expense related to issuances of stock options and warrants to the Company's employees, directors and consultants of $146,832.

 

The Company utilized the Black-Scholes options pricing model.