Warrant activity. We issued 266,667 warrants in connection with the sale of common stock during the quarter ended June 30, 2011. We have accounted for these warrants as equity instruments in accordance with EITF 00-19 (ASC 815-40), Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock, and as such, will be classified in stockholders’ equity as they meet the definition of “…indexed to the issuer’s stock” in EITF 01-06 (ASC 815-40) The Meaning of Indexed to a Company’s Own Stock. We have estimated the fair value of the warrants issued in connection with the sale of common stock at $42,549 for the year ended December 31, 2011, using the Black-Scholes option pricing model with the following assumptions:

A summary of changes in share purchase warrants during the six months ended June 30, 2012 is as follows:

Stock options. We issued 138,740 stock options to members of our Board of Directors during each six months ended June 30, 2012 and 2011, respectively. The stock options were valued at the fair market value of the services performed that resulted in an expense of $8,000 and $12,000 for each six months ended June 30, 2012 and 2011, respectively. The cost of the options issued to the members of our Board of Directors have been classified as share based compensation for the six months ended June 30, 2012 and 2011, respectively.

A summary of changes in stock options during the six months ended June 30, 2012 is as follows: