COMMON STOCK

12 Months Ended

Dec. 31, 2012

Notes to Financial Statements

Note 9. COMMON STOCK

As of December 31, 2012, the Company had 26,661,499 shares of Common Stock issued and outstanding. As of December 31, 2012, the Company had outstanding warrants to purchase 175,000 shares of the Company’s Common Stock.

As of December 31, 2011, the Company had 25,690,402 shares of Common Stock issued and outstanding and 3,456,647 shares of Series B Convertible Preferred Stock issued and outstanding, including (i) 2,000,000 shares held in escrow as make good escrow shares in connection with our 2008 private placement, which were cancelled on July 17, 2012; and (ii) 1,456,647 shares, which were converted into Common Stock during twelve months ended December 31, 2012.

The following table reconciles the number of Common Stock and Series B Convertible Preferred Stock as to the date of this report.

Date			B Series Preferred Stock			Common Stock
December 31, 2011		Issued and outstanding		3,456,647			25,690,402
May 17, 2012		Conversion of shares of Series B Preferred Stock into shares of Common Stock		(405,000	)		270,000
July 17, 2012		Cancellationof Series B Preferred Stock		(2,000,000	)		-
July 25, 2012		Conversion of shares of Series B Preferred Stock into shares of Common Stock		(410,000	)		273,333
August 28, 2012		Conversion of shares of Series B Preferred Stock into shares of Common Stock		(411,500	)		274,333
October 1, 2012		Conversion of shares of Series B Preferred Stock into shares of Common Stock		(230,147	)		153,431
December 31, 2012				-			26,661,499