COMMON STOCK, WARRANTS AND OPTIONS

9 Months Ended

Sep. 30, 2012

COMMON STOCK, WARRANTS AND OPTIONS [Abstract]

COMMON STOCK, WARRANTS AND OPTIONS

NOTE6 — COMMON STOCK, WARRANTS AND OPTIONS:

In March 2012 and June 2012 and September 2012, the Company issued 938 shares of common stock on each date to a consultant as part of the consultant's compensation.  As long as the consultant continues with the Company, the consultant will receive one more tranche in December of 2012 of 938 shares. 

In March 2012, the Company issued 3,750 options to purchase shares of the Company's common at an exercise price of $4.00 per share to consultant's compensation. On each of March 19,2012, June 19, 2012 and September 19,2012, 938 of these options vested. These options were valued using a Black-Scholes model at $8,570, of which $2,448 and $4959 was expensed in the three- and nine-month periods, respectively, ended September 30, 2012.  The options are being accounted for under the variable method as per ITF-96-18 and $279 of the expense was attributable to this method.

On February 16, 2012, the Company issued 25,391 options to purchase common stock to executives of the Company as part of their 2011 bonus.  The options are exercisable immediately at $4.00 per share, which was the last traded price of the common stock traded on that day, and they expire five years from date of issue.

During the third quarter of 2012, the Company issued 72,000 options to purchase common stock to newly hired executives of the Company.  The options are exercisable in three equal annual installments on the anniversary of the issuance starting one year from date of issue.  An allotment of 36,000 options issued to one of the new vice presidents and have an exercise price of $5.11 per share, and the 36,000 options were issued to the other new vice president have an exercise price of $4.45 per share, which  in each case was the last traded price of the common stock on the day issued. The options expire five years from date of issue.

As of September 30, 2012, the Company had no warrants outstanding to purchase shares of common stock.