Quarterly report pursuant to Section 13 or 15(d)

COMMON STOCK OPTIONS

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COMMON STOCK OPTIONS
 6 Months Ended
Mar. 31, 2013
Common Stock Options  
COMMON STOCK OPTIONS

NOTE 7 – COMMON STOCK 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, $0.40-0.65; expected term of five years, exercise price of $0.50-0.57, a risk free interest rate of 0.83-2.60 percent, a dividend yield of 0 percent and volatility of 192-277 percent.

 

During the six months ended March 31, 2013, 546,965 options were exercised (see Note 5).

 

During the six months ended March 31, 2013, the Company recognized $104,109 of expense related to vested options that were granted in prior years. Unamortized option expense as of December 31, 2012 amounted to approximately $691,000.

 

Below is a table summarizing the options issued and outstanding as of March 31, 2013:

 

Date Issued

   Number Outstanding  

Exercise Price

   Contractual Life (Years)   Expiration Date  

Value if Exercised

  
Prior 10/1/2008      -   $  -      -      -   $  -  
04/09/09      579,141      0.65      5     04/09/13      376,442  
Balance 09/30/2009      579,141      0.65      -      -      376,442  
04/12/10      1,000,000      0.50      5     04/12/15      500,000  
Expired      (32,176)      0.65      -      -      (20,914)  
Balance 9/30/2010      1,546,965   $  0.55      -      -   $  855,528  
Issued      -      -      -      -      -  
Expired      -      -      -      -      -  
Balance 9/30/2011      1,546,965   $  0.55      -      -   $  855,528  
03/09/12      1,700,000      0.57      -     3/9/2017      969,000  
Expired      -      -      -      -      -  
Balance 9/30/2012      3,246,965   $  0.56      -      -   $  1,824,528  
Exercised      (546,965)      0.65      -      -      (355,527)  
Expired      -      -      -      -      -  
Balance 3/31/13      2,700,000   $  0.54      -      -   $  1,469,001  

 

As of March 31, 2013, the outstanding options have an intrinsic value of approximately $3.07 million.