Stockholders' Deficiency

6 Months Ended

Jun. 30, 2012

6.	Stockholders' Deficiency

Options

The Company's Stock Option Plan is intended to provide incentives for key employees, directors, consultants and other individuals providing services to the Company by encouraging their ownership of the common stock of the Company and to aid the Company in retaining such key employees, directors, consultants and other individuals upon whose efforts the Company's success and future growth depends and in attracting other such employees, directors, consultants and individuals.

The fair value of each option award is estimated on the date of grant using the Black-Scholes option valuation model, using the following assumptions. Expected volatility is based on the historical volatility of the Company's stock, and other factors. The Company uses historical data to estimate employee termination within the valuation model. The Company has assumed that the life of the options will be equal to one-half of the combined vesting period and contractual life. The risk-free rates used to value the options are based on the U.S. Treasury yield curve in effect at the time of grant. The expected dividend yield is 0%.

At June 30, 2012, options to purchase 260,000 shares of common stock were outstanding. These options vest ratably in annual installments, over the four year period from the date of grant. As of June 30, 2012, there was $15,216 of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the Plan. That cost is expected to be recognized over a remaining weighted average period of 2.36 years. The cost recognized for the six months ended June 30, 2012 was $1,500 (2011: $6,169) which was recorded as general and administrative expenses.

A summary of option activity under the Plan during the six months ended June 30, 2012 is presented below:

	Options			Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Term		Intrinsic Value
Outstanding at December 31, 2011		360,000		$	0.72		1.93		-
Granted		-			-		-		-
Exercised		-			-		-		-
Forfeited or expired		(100,000	)	$	0.90		-		-
Outstanding at June 30, 2012		260,000		$	0.65		2.11		-

Exercisable at June 30, 2012		167,500		$	0.66		2.08		-

As of June 30, 2012, the aggregate intrinsic value of all stock options outstanding and expected to vest was $0 and the aggregate intrinsic value of currently exercisable stock options was $0. The intrinsic value of each option is the difference between the fair market value of the common stock and the exercise price of such option to the extent it is "in-the-money". Aggregate intrinsic value represents the value that would have been received by the holders of in-the-money options had they exercised their options on the last trading day of the year and sold the underlying shares at the closing stock price on such day. The intrinsic value calculation is based on the $0.01 closing stock price of the common stock on June 30, 2012. There were no in-the-money options outstanding and exercisable as of June 30, 2012.

Because there were no options exercised during the six months ended June 30, 2012, there was no intrinsic value of options exercised.

The total fair value of options granted during the six months ended June 30, 2012 was $0, as no options were granted in 2012.

The following table summarizes information about fixed price stock options outstanding at June 30, 2012:

Exercise Price		Number Outstanding		Weighted Average Contractual Life		Weighted Average Exercise Price		Number Exercisable		Exercise Price
$	0.63		250,000		2.16	$	0.63		160,000	$	0.63
$	1.12		10,000		0.98	$	1.12		7,500	$	1.12
			260,000						167,500

The number and weighted average grant-date fair value of options non-vested at the beginning of the year, non-vested at the end of June 30, 2012 and granted, vested or canceled during the six month period ended June 30, 2012 was as follows:

	Number of Options			Weighted-Average Grant Date Fair Values
Non-vested at January 1, 2012		127,500		$	0.17
Granted		-			-
Vested		(35,000	)	$	0.22
Canceled		-			-
Non-vested at June 30, 2012		92,500		$	0.14

Warrants

The Company uses a binomial option pricing model to value warrants issued to non-employees, based on the market price of its common stock at the time the warrants are issued. All outstanding warrants may be exercised by the holder at any time. Total outstanding warrants as of June 30, 2012 were 200,000 at an exercise price of $0.03 per share, issued to a non-employee for consulting service with an expiry date of December 31, 2014.

- Definition

The entire disclosure for shareholders' equity, comprised of portions attributable to the parent entity and noncontrolling interest, if any, including other comprehensive income (as applicable). Including, but not limited to: (1) balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings; (2) accumulated balance for each classification of other comprehensive income and total amount of comprehensive income; (3) amount and nature of changes in separate accounts, including the number of shares authorized and outstanding, number of shares issued upon exercise and conversion, and for other comprehensive income, the adjustments for reclassifications to net income; (4) rights and privileges of each class of stock authorized; (5) basis of treasury stock, if other than cost, and amounts paid and accounting treatment for treasury stock purchased significantly in excess of market; (6) dividends paid or payable per share and in the aggregate for each class of stock for each period presented; (7) dividend restrictions and accumulated preferred dividends in arrears (in aggregate and per share amount); (8) retained earnings appropriations or restrictions, such as dividend restrictions; (9) impact of change in accounting principle, initial adoption of new accounting principle and correction of an error in previously issued financial statements; (10) shares held in trust for Employee Stock Ownership Plan (ESOP); (11) deferred compensation related to issuance of capital stock; (12) note received for issuance of stock; (13) unamortized discount on shares; (14) description, terms, and number of warrants or rights outstanding; (15) shares under subscription and subscription receivables, effective date of new retained earnings after quasi-reorganization and deficit eliminated by quasi-reorganization and, for a period of at least ten years after the effective date, the point in time from which the new retained dates; and (16) retroactive effective of subsequent change in capital structure.

+ References

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+ Details

CREATIVE VISTAS INC 10-Q