Common Stock Options and Warrants

9 Months Ended

Sep. 30, 2012

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

NOTE 9. COMMON STOCK OPTIONS AND WARRANTS

Common Stock Option Plan

The Company has reserved 6,500,000 common shares for the exercise of stock options to be issued pursuant to the 2006 Stock Option Plan. Information relating to options issued under this plan is as follows:

	Options and Stock Awards Available for Grant		Number of Shares		Weighted Average Option Exercise Price
Outstanding as of January 1, 2012		742,500		5,757,500	$	0.10
Shares reserved		-		-		-
Options granted		-		-		-
Stock awards granted		-		-		n/a
Options exercised		-		-		-
Options canceled		-		-		-

Outstanding as of September 30, 2012		742,500		5,757,500	$	0.10

The following table summarizes information about stock options outstanding and exercisable at September 30, 2012:

Stock Options Outstanding
Number of Options Outstanding	Weighted- Average Remaining Contractual Life in Years		Weighted- Average Exercise Price
1,887,500		0.82	$	0.10

Stock Options Exercisable
Number of Options Exercisable	Weighted- Average Remaining Contractual Life in Years		Weighted- Average Exercise Price
1,887,500		0.82	$	0.10

The assumptions used in computing fair value of options is as follows:

Expected stock price volatility		186.0	%
Risk-free interest rate		4.7	%
Expected term (years)		7.00
Weighted-average fair value of stock options granted	$	0.099

Common Stock Warrants

The following is a summary of the status of all the Company’s stock warrants as of September 30, 2012:

	Number of Warrants		Weighted Average Exercise Price
Outstanding, January 1, 2012		18,949,334	$	0.10
Granted		1,937,500		0.15
Exercised		-		-
Cancelled		-		-
Outstanding, September 30, 2012		20,886,834	$	0.10

The following table summarizes information about stock warrants outstanding and exercisable at September 30, 2012:

Stock Warrants Outstanding
Number of Warrants Outstanding		Weighted- Average Remaining Contractual Life in Years		Exercise Price
	210,000		4.00	$	0.50
	1,771,834		3.59	$	0.25
	5,452,500		1.17	$	0.15
	13,452,500		3.69	$	0.05
	20,886,834

Stock Warrants Exercisable
Number of Warrants Exercisable		Weighted- Average Remaining Contractual Life in Years		Exercise Price
	210,000		4.00	$	0.50
	1,771,834		3.59	$	0.25
	5,452,500		1.17	$	0.15
	13,452,500		3.69	$	0.05
	20,886,834

Warrants were valued and recorded pursuant to the Black-Scholes Method. Assumptions used were an average risk-free rate of return of .12% to .15%, average expected stock price volatility of 347%, weighted average expected term of 6.01 years, and a weighted average fair value of $.01 per warrant.

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Staff Accounting Bulletin (SAB)

-Number Topic 14

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Reference 5: http://www.xbrl.org/2003/role/presentationRef

-Publisher AICPA

-Name Statement of Position (SOP)

-Number 93-6

-Paragraph 53

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 6: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

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Reference 7: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 123R

-Paragraph 64, 65, A240

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 8: http://www.xbrl.org/2003/role/presentationRef

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-Name Accounting Standards Codification

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+ Details

SMOKY MARKET FOODS INC 10-Q/A