Quarterly report pursuant to Section 13 or 15(d)

OPTIONS

 v2.3.0.11
OPTIONS
 9 Months Ended
Jun. 30, 2011
Notes to Financial Statements  
Options

NOTE 10 – OPTIONS

 

On April 12, 2010 the Company granted 1,000,000 options to employees as part of its 2009 stock option plan.  The Company used the Black-Scholes option pricing model to calculate the fair market value of these options.  Using the assumptions in the table below, 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 will vest over the 5 year life of the options.  In the nine month period ended June 30, 2011, the Company recognized compensation expense of $35,925 for the vested options.

 

Stock Price at Valuation Date   $ 0.40  
Exercise (Strike) Price   $ 0.50  
Dividend Yield     0.00 %
Years to Maturity     5.00  
Risk-free Rate     2.60 %
Volatility     277 %

 

Below is a table summarizing the options issued and outstanding as of June 30, 2011.

 

Date   Number     Exercise     Contractual     Expiration     Value if  
Issued   Outstanding     Price     Life (Years)     Date     Exercised  
Prior 10/1/2008     —     $ —       —       —     $ —  
04/09/09     579,141       0.65       5     04/09/13       376,442  
Balance 09/30/09     579,141       0.65       —       —       376,442  
04/12/10     1,000,000       0.50       5     04/12/15       500,000  
Balance 09/30/10     1,579,141     $ 0.56       —       —     $ 876,442  
Issued     —       —       —       —       —  
Expired     (32,176 )     0.65       —       —       (20,914 )
Balance 6/30/11     1,546,965     $ 0.55       —       —     $ 855,528