CONVERTIBLE NOTES PAYABLE

9 Months Ended

Sep. 30, 2011

CONVERTIBLE NOTES PAYABLE [Abstract]

CONVERTIBLE NOTES PAYABLE

As of September 30, 2011, the Company had $1,904,000 worth of Convertible notes outstanding, all of which comes due in 2012.

Amortization on Convertible Notes

For the period ended September 30, 2011 and December 31, 2010, the Company recorded a debt discount in the amount of $0 and $1,816,000, respectively. The warrants value and the beneficial conversion value are discounted against the Notes and are being amortized as interest expense using the effective interest method over the term of the Notes. The warrant and beneficial conversion feature exceeded the face value of the note. The total debt discount as of September 30, 2011 and December 31, 2010, was $611,203 and $2,660,015, respectively, net of total amortization.  The Company recognized debt discount amortization related to the convertible notes in the amount of $2,048,812for the nine months ended September 30, 2011 and $3,316,914 for the twelve months ended December 31, 2010.  An interest charge of $1,004,852 included in the total of $1,779,411 represents the remaining discount associated with the converted notes.