STOCK OPTIONS AND STOCK WARRANTS

12 Months Ended

Dec. 31, 2011

STOCK OPTIONS AND STOCK WARRANTS

STOCK OPTIONS AND STOCK WARRANTS

9.STOCK OPTIONS AND STOCK WARRANTS:

The Company has a stock option plan under which options to purchase shares of common stock may be granted to certain officers, directors and service providers.  

In February 2007, the Company adopted a new Stock Option Plan (the “2005 Plan”).  The 2005 Plan authorizes the issuance of up to 1,158,333 of the Company's common shares (adjusted for reverse stock split), subject to adjustment under certain circumstances.  The Company is listed on the TSX Venture Exchange ("TSX") and is subject to a limitation on the number of options a company may have. The 2005 Plan provides for the issuance of both incentive stock options and nonqualified options as those terms are defined in the Internal Revenue Code of 1986, as amended (the "Code").  The Company's previous option plan terminated in 2011, when all granted stock options were exercised, expired or canceled.  In December 2011, the Company adopted a new Stock Option Plan (the “2011 Plan”).  The 2011 Plan authorizes the issuance of up to 1,250,000 of the Company's common shares, subject to adjustment under certain circumstances.  The Company is listed on the TSX Venture Exchange ("TSX") and is subject to a limitation on the number of options a company may have. The 2011 Plan provides for the issuance of both incentive stock options and nonqualified options as those terms are defined in the Internal Revenue Code of 1986, as amended (the "Code").  

A summary of the status of the Company's options and changes during the years is presented below:

Year  ended December 31	2011		2010
	Number of Shares	Weighted Average Exercise Price	Number of Shares	Weighted Average Exercise Price
Outstanding at  beginning of year	26,666	$1.50	93,333	$1.50
Granted	-0-	$N/A	-0-	$N/A
Exercised	-0-	$N/A	-0-	$N/A
Cancelled/expired	26,666	$1.50	66,667	$1.50
Outstanding at  end of year	-0-	$ N/A	26,666	$1.50
Options exercisable at year end	-0-	$ N/A	26,666	$1.50
Weighted average  fair value of  options exercisable  during the year		$1.50		$1.50

The aggregate intrinsic value at December 31, 2011was $-0-.

There is no future unrecognized compensation since all of the options granted are immediately exercisable and fully vested.  No options are outstanding as of December 31, 2011.

Warrants to purchase shares of common stock are as follows:

Year ended December 31,	2011		2010
	Number of Warrants	Range of Exercise Price	Number of Warrants	Range of Exercise Price
Outstanding at beginning of year	462,000	$1.380	1,066,667	$0.675-$1.380
Issued	-0-	N/A	-0-	N/A
Exercised	-0-	N/A	204,667	$0.675
Expired	462,000	$1.380	400,000	$1.335
Outstanding at end of year	-0-	$N/A	462,000	$1.380

Warrants issued in 2009 have a contractual life of two years from the date of issuance.