Stock Options

194 Months Ended

Sep. 30, 2011

Stock Options

7.	Stock Options
	In 2007, the Company's Board of Directors approved the 2007 Stock Option Plan (“the Plan”) to offer an incentive to obtain services of key employees, directors and consultants of the Company. The Plan provides for the reservation for awards of an aggregate of 10% of the total shares of Common Stock outstanding from time to time. No Plan participant may receive stock options exercisable for more than 2,500,000 shares of Common Stock in any one calendar year.  Under the Plan, the exercise price of an incentive stock option must be at least equal to 100% of the fair market value of the common stock on the date of grant (110% of fair market value in the case of options granted to employees who hold more than 10% of the Company's capital stock on the date of grant). The term of stock options granted under the Plan is not to exceed ten years and the stock options vest immediately upon granting.
	The following is a summary of stock option activity for the nine month period ended September 30, 2011 and the status of stock options outstanding and exercisable at September 30, 2011:

					Remaining		Aggregate
	Shares		Exercise		Contractual		Intrinsic
			price		Life (yrs) at		value at
					30-Sep-11		30-Sep-11
Outstanding at December 31, 2010		1,700,000	$	0.26		-	$	-
Granted		-		-		-		-
Forfeited		-		-		-		-
Outstanding and exercisable at September 30, 2011		1,700,000	$	0.26		0.85	$	-

The aggregate intrinsic value in the table above represents the total pretax intrinsic value for all “in-the-money” options (i.e., the difference between the Company’s closing stock price on September 30, 2011 and the exercise price, multiplied by the number of shares) that would have been received by the option holders had all option holders exercised their options on September 30, 2011.

Effective as of October 11, 2011, the Company’s board of directors granted 4,200,000 stock purchase options pursuant to the Company’s 2007 Stock Option Plan. Each of the Options has an issue date, effective date and vesting date of October 11, 2011, with an exercise price of $0.12 per share. The term of these Options is five years. The Options are exercisable at any time from the grant date up to and including the 10th day of October, 2016.