Stockholders' Equity

9 Months Ended

Sep. 30, 2011

Stockholders Equity Note [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

NOTE 7 – STOCKHOLDERS’ EQUITY

(a)           Common stock issued for services

During the nine months ended September 30, 2011, the Company issued an aggregate of 7,500 shares of its common stock to a director pursuant to an amended director’s agreement. The shares are valued at the fair value on the grant date and the Company recorded stock-based compensation of $19,025.

During the nine months ended September 30, 2011, the Company issued an aggregate of 22,500 shares of its common stock to its chief financial officer pursuant to the employment agreement between the Company and the chief financial officer. The shares are valued at the fair value on the grant date and the Company recorded stock-based compensation of $57,225.

In March 2011, the Company issued an aggregate of 15,250 shares of its common stock to employees, of which 7,000 shares were granted to the Company’s chief executive officer.  None of the other shares were issued to executive officers or directors.  The shares are valued at the fair value on the grant date and the Company recorded stock-based compensation of $49,594.

On April 1, 2011, the Company issued 1,250 shares of its common stock to an employee pursuant to the engagement agreement between the Company and the employee. The shares are valued at the fair value on the grant date and the Company recorded stock-based compensation of $3,925.

On April 14, 2011, the Company issued 13,000 shares of common stock to an investor relations firm pursuant to an agreement with the firm for the twelve months beginning May 1, 2010.  The shares are valued at the fair value on the grant date. For the nine months ended September 30, 2011, the Company recorded stock-based professional fees of $37,440.

On May 26, 2011, the Company issued 12,500 shares of common stock to an investor relations firm pursuant to an agreement with the firm for the twelve months beginning May 1, 2011. The shares are valued at the fair value on the grant date, and the Company recorded stock-based professional fees of $9,792 and prepaid expenses of $13,708 which will be amortized over the remaining service period.

In June 2011, the Company issued an aggregate of 78,000 shares of its common stock to employees, of which 41,000 shares were granted to the Company’s chief executive officer.  None of the other shares were issued to executive officers or directors.  The shares are valued at the fair value on the grant date and the Company recorded stock-based compensation of $95,572 and prepaid expenses of $46,868 which will be amortized during the rest of service period.

On June 29, 2011, the Company issued 4,526 shares of its common stock to a director pursuant to a director’s agreement. The shares are valued at the fair value on the grant date and the Company recorded stock-based compensation of $4,526.

In July 2011, the Company issued 3,250 shares of its common stock to its employees pursuant to the engagement agreement between the Company and their employees. The shares are valued at the fair value on the grant date and the Company recorded stock-based compensation of $2,160.

On July 7, 2011, the board of directors authorized the issuance of 8,760 shares of common stock to a director pursuant to an agreement with the director, which were issuable in two installments.  The Company issued 4,380 shares of common stock in August 2011 and recorded stock-based compensation of $3,000 and prepaid expense of $3,000 which will be amortized during the rest of service period and the remaining 4,380 shares of common stock are issuable in January.  The 8,760 shares were valued at $12,000, being the fair market value of the shares on the date of the director’s election to the board.

All of the shares issued as compensation, other than the shares issued to the chief financial officer, were issued pursuant to the Company’s long-term incentive plan.

(b) Common stock issued for preferred share conversions

In February 2011, the Company issued 312,000 shares of its common stock upon the conversion of 936,000 shares of series A convertible preferred stock (“series A preferred stock”).

In July and August 2011, the Company issued 866,667 shares of its common stock upon the conversion of 2,600,000 shares of series A preferred stock.

(c)  Common stock sold for cash

On January 18, 2011, the Company sold 35,014 shares of its common stock to its chief financial officer for $125,000, representing the market price on January 18, 2011, the date of the stock purchase agreement.

(d)  Common stock issued on exercise of warrants

In May 2011, the Company issued 41,848 shares of its common stock upon the cashless exercise of warrants.

(e)  Series A preferred stock issued upon exercise of warrants

During the period from February to April 2011, the Company issued a total of 706,715 shares of series A preferred stock upon the exercise of warrants, for which the Company received total cash proceeds of $400,000.  Each share of series A preferred stock is convertible into one-third share of common stock.

(f)  Warrants

Warrant activity for the nine months ended September 30, 2011 is summarized as follows:

	Nine Months Ended September 30, 2011
	Number of Warrants			Weighted Average Exercise Price
Balance at December 31, 2010		2,524,654		$	1.57
Granted		-			-
Exercised		(323,072	)		1.56
Forfeited		-			-
Balance at September 30, 2011		2,201,582		$	1.57
Warrants exercisable at September 30, 2011		2,201,582		$	1.57

The following table summarizes the shares of the Company's common stock issuable upon exercise of warrants outstanding at September 30, 2011:

Warrants Outstanding								Warrants Exercisable
Range of Exercise Price		Number Outstanding at September 30, 2011		Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price		Number Exercisable at September 30, 2011		Weighted Average Exercise Price
$	1.698		1,649,991		1.12	$	1.698		1,649,991	$	1.698
$	1.200		551,591		1.12		1.200		551,591		1.200
			2,201,582		1.12	$	1.57		2,201,582	$	1.57