Stock-Based Compensation

9 Months Ended

Sep. 30, 2011

Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

Note 4 – Stock-Based Compensation

A total of 1,022,605 stock options were issued to employees during the nine months ended September 30, 2011, exercisable at strike prices ranging from $0.017 to $0.14 per share.

Total stock-based compensation expense recorded in the statement of operations was $6,000 and $40,200 for the three months ended September 30, 2011 and 2010 and $58,000 and $137,700 for the nine months ended September 30, 2011 and 2010, respectively.

We used the following assumptions to value the stock options granted during the nine months ended September 30, 2011 and 2010:

	Nine Months Ended September 30,
	2011	2010
Volatility	148%-210%	145%-210%
Expected dividends	-	-
Expected term (in years)	5.77	6.5
Risk-free rate	0.90%-2.89%	1.85%-2.68%

A summary of the transactions and status of our granted, vested and exercisable options during the nine months ended September 30, 2011 with respect to our stock option plans follows:

								Weighted-
								Average
				Weighted-				Contractual
				Average		Aggregate		Life
				Exercise		Intrinsic		Remaining
	Shares			Price		Value		in Years
	(in thousands)					(in thousands)
Outstanding at December 31, 2010		702		$	1.23
Granted		1,023		$	0.03
Exercised		-		$	-
Forfeited		(648	)	$	1.15
Outstanding at September 30, 2011		1,077		$	0.34	$	-	8.7
Exercisable at September 30, 2011		801		$	0.45	$	-	8.4

A summary of the status of our non-vested options as of September 30, 2011 and changes during the nine months ended is presented below:

				Weighted
				Average
				Grant Date
Nonvested Shares	Shares			Fair Value
	(in thousands)
Nonvested at December 31, 2010		120		$	0.71
Granted		1,023		$	0.04
Vested		(432	)	$	0.01
Forfeited		(435	)	$	0.84
Nonvested at September 30, 2011		276		$	0.01

The following table summarizes information about our stock options outstanding at September 30, 2011:

Options Outstanding				Options Exercisable
Exercise Prices	Number of Shares	Weighted-Average Remaining Life	Weighted-Average Exercise Price	Number of Shares	Weighted-Average Exercise Price
	(in thousands)	(in years)		(in thousands)
$0.017 to $0.39	737	9.5	$             0.03	461	$        0.03
$1.00	331	6.9	$             1.00	331	$        1.00
$2.00	9	7.6	$             2.00	9	$        2.00
	1,077	8.7	$             0.34	801	$        0.45

There were no stock options exercised during the nine months ended September 30, 2011.

Subsequent Event

On October 3, 2011, the Board approved and issued option agreements with three members of our Board for a total of 450,000 shares of our common stock from our 2011 Stock Incentive Plan at an exercise price of $0.014 per share.