OPTIONS
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Sep. 30, 2011
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Notes to Financial Statements | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Options |
Note 10 Options
The Company has determined the estimated value of the options granted to employees and non-employees in exchange for services and financing expenses using the Black-Scholes pricing model and the following assumptions: stock price at valuation, $0.40; expected term of five years, exercise price of $0.50, a risk free interest rate of 2.60 percent, a dividend yield of 0 percent and volatility of 277 percent.
On April 12, 2010 the Company granted 1,000,000 options to employees as part of its 2009 stock option plan. The Company calculated a fair value of $0.40 per option. Of the 1,000,000 options issued, 520,000 vested upon issuance and the remaining 480,000 vest over the five year life of the options. As of September 30, 2011 and 2010, 670,000 options have vested resulting in compensation expense of $47,900 and $219,541 for the years ended September 30, 2011 and 2010, respectively.
Below is a table summarizing the options issued and outstanding as of September 30, 2011.
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