Stockholders Deficiency

3 Months Ended

Mar. 31, 2012

Equity [Abstract]

Stockholders Deficiency

4. Stockholders’ Deficiency

Common Stock

During the three months ended March 31, 2012, the Company entered into securities purchase agreements with investors who agreed to invest an aggregate of $125,000 for 27,779 shares of common stock at $4.50 per share. The Company received $125,000 in cash proceeds and recorded the transaction as shares issuable since the shares had not been issued as of March 31, 2012 due to delays in issuing the stock certificates.

Preferred Stock

On January 1, 2012, the Company issued 25,823 shares of Series B convertible preferred stock valued at $244,001 to the Series B convertible preferred stock owners as payment in kind for dividends. Additionally, during the three months ended March 31, 2012, the Company recorded $65,271 and $92,916 as contractual and deemed dividends, respectively, in connection with the outstanding preferred stock.

Stock Options

On January 6, 2012, the Company’s Chief Financial Officer was issued 92,858 shares of common stock per a cashless exercise of a stock option with an exercise price of $0.80 to purchase 105,450 shares of common stock.

On March 30, 2012, the Company granted four Directors options to purchase an aggregate of 60,000 shares of common stock under a previously approved plan with an exercise price of $6.99, which is the approximate fair value of a share of common stock on the grant date.  The options have an aggregate grant date fair value of $391,028, vest over a three year period and have a term of ten years.

On March 30, 2012, the Company granted employees options to purchase an aggregate of 30,000 shares of common stock under a previously approved plan with an exercise price of $6.99, which is the approximate fair value of a share of common stock on the grant date.  The options have an aggregate grant date fair value of $195,514, vest over a three year period and have a term of ten years.

Details of the options outstanding under all plans are as follows:

	Shares			Weighted Average Exercise Price		Weighted- Average Remaining Contractual Term		Aggregate Intrinsic Value
Options outstanding at January 1, 2012		2,165,925		$	2.89		6.25		-
Granted		90,000		$	6.99		--		-
Expired		--			--		--		-
Canceled		(116,668	)	$	3.97		--		-
Exercised		(105,450	)	$	0.80		--		-
Options outstanding at March 31, 2012		2,033,807		$	3.11		6.22	$	7,403,655
Options exercisable at March 31, 2012		835,471		$	2.24		5.24	$	3,764,194

Range of Exercise	Number Outstanding		Weighted Average Remaining Years of Contractual Life		Weighted Average Exercise Price		Number Exercisable		Weighted Average Exercise Price
$0.80 – 2.00		253,475		5.05	$	0.92		236,349	$	0.88
$2.00 – 6.99		1,780,332		6.19	$	3.43		599,122	$	2.78
$0.80 – $6.99		2,033,807		6.05	$	3.11		835,471	$	2.24