Quarterly report pursuant to sections 13 or 15(d)

1. Basis of Presentation, Consolidation, and Summary of Selected Significant Accounting Policies (Tables)

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1. Basis of Presentation, Consolidation, and Summary of Selected Significant Accounting Policies (Tables)
3 Months Ended
Mar. 31, 2013
Notes to Financial Statements  
Following securities were excluded in the calculation of diluted loss per share

The following securities were excluded in the calculation of diluted loss per share as of March 31, 2013 and 2012 because their inclusion would be antidilutive:

 

    2013     2012  
Warrants     93,346,219       50,607,572  
Stock options     8,776,473       6,571,886  
Convertible preferred stock     70,156,174       7,113,840  
      172,278,866       64,293,298  
Stock-based compensation expense consolidated interim statements of operations

Stock-based compensation expense is reflected in selling, general and administrative expenses in the condensed consolidated interim statements of operations, and is comprised of the following:

 

    Three Months Ended March 31,  
    2013     2012  
Expenses associated with stock options granted to employees and directors   $ 27,601     $ 6,996  
Common stock or warrants issued or issuable for services rendered     20,230       -  
    $ 47,831     $ 6,996  
The following table summarizes the stock option activity

The following table summarizes the stock option activity for the three months ended March 31, 2013:

 

   
Activity  

(unaudited)

Number of Options

   

Weighted Average Exercise

Price

 
Outstanding at December 31, 2012     8,864,261     $ 0.58  
Granted     -     $ -  
Forfeitures in 2013     (41,500 )   $ 0.11  
Expirations in 2013     (46,288 )   $ 1.87  
Outstanding at March 31, 2013     8,776,473     $ 0.58  
Exercisable at March 31, 2013     4,923,727     $ 0.95  
Calculated the fair value of each common stock option grant on the date of grant using the Black-Scholes option-pricing model

The Company calculated the fair value of each common stock option grant on the date of grant using the Black-Scholes option-pricing model method with the following assumptions:

 

    (unaudited)  
    Three Months Ended March 31,  
    2013     2012  
Dividend yield     n/a %     0.00 %
Stock volatility     n/a %     98.7 %
Average Risk-free interest rate     n/a %     0.35 %
Average option term (years)     n/a       4