Related Party Transactions

12 Months Ended

Dec. 31, 2011

Related Party Transactions

Note 9. Related Party Transactions

Executive Management

 On August 27, 2010, Mr. Derek Cooper resigned from the positions of President, Chief Executive Officer, Chief Financial Officer and Director of the Company. The Company incurred $20,000 in fees paid to Mr. Cooper for the year ended December 31, 2010. At the time of his separation, certain of Mr. Cooper’s outstanding stock options were fully vested and exercisable.  The unvested stock options were immediately cancelled and the stock compensation expense of $16,710 that the Company had recognized in relation to these unvested options was reversed to general and administrative expenses. For the year ended December 31, 2010, the Company incurred ($12,047), as stock compensation expense (benefit) related to options granted to Mr. Cooper.

Immediately upon Mr. Cooper’s resignation, the Company appointed Mr. Antonino Cacace to the Board of Directors and the positions of President, Chief Executive Officer and Chief Financial Officer.  The Company has agreed to pay Mr. Cacace a monthly management fee of $3,000 for his services.  For the years ended December 31, 2011 and 2010, the Company incurred $94,000 and $15,000, respectively, in management fees paid to Mr. Cacace. Accounts payable to Mr. Cacace amounted to $36,000 at December 31, 2011.

Director Fees

On August 26, 2010, Messrs. Jeet Sidhu and Christian Hudson resigned as members of the Board of Directors. The Company incurred nil in board fees for these non-employee directors for the year ended December 31, 2010.  At the time of their separation, certain of their outstanding stock options were fully vested and exercisable.  The unvested stock options were immediately cancelled and the stock compensation expense of $33,419 that the Company had recognized in relation to these unvested options was reversed to general and administrative expenses. For the year ended December 31, 2010, the Company recorded ($24,091), as stock compensation expense (benefit) related to options granted to these non-employee directors (refer to “Note 8 Stock Options”).

In order to fill the vacancies created by the resignations of Messrs. Jeet Sidhu and Christian Hudson, the Company appointed Messrs. David Jenkins and Joseph Sierchio to the Board of Directors.  The Company has agreed to pay Messrs. Jenkins and Sierchio a monthly fee of $2,000 each for their services. For the years ended December 31, 2011 and 2010, the Company has incurred $48,000 and $20,000 in management fees paid to Messrs. Jenkins and Sierchio. Accounts payable to Mr. Sierchio amounted to $2,000 at December 31, 2011.

Legal Fees

Legal fees expensed for the years ended December 31, 2011 and 2010, totaled $47,312 and $44,188, respectively, were paid or are due to our attorney, Mr. Sierchio, who was appointed to our board effective August 26, 2010. Accounts payable to Mr. Sierchio for legal fees amounted to $7,850 at December 31, 2011.