RESTATEMENT

9 Months Ended

Sep. 30, 2011

RESTATEMENT [Text Block]

NOTE 9- RESTATEMENT

On August 2, 2011, management of the Company concluded that the financial statements for the year ended December 31, 2010, contained an error relating to the recording of financing-related expenses incurred during 2010.   Financing expenses in the amount of $466,281 were expensed in total during the year ended December 31, 2010.   Management subsequently determined that the financing expenses should have been recorded as a discount to the associated note payable and amortized over the term of the related note.  As a result, the previously issued financial statements for the year ended December 31, 2010 have been restated to reflect the appropriate accounting.  Of the $466,281 adjustment at December 31, 2011, financing costs of $416,281 and related debt discount of $87,434 are attributable to the three and nine month periods ending September 30, 2010.  This adjustment at September 30, 2010, results in a net reduction in loss of $328,847, reducing the net loss for the three and nine month periods to $1,535,868 and $2,153,046, respectively.  

The effect on the previously issued financial statements for the year ended December 31, 2010, is summarized as follows:

		As
		Initially Reported				As Restated at
		December 31, 2010		Correcting Entries		December 31, 2010
Total Assets	$	1,871,558	$	-	$	1,871,558
Current Liabilities	$	2,385,346	$	(374,236)	$	2,011,110
Long Term Liabilities		496,189		-		496,189
Equity		(1,009,977)		374,236		(635,741)
Total Liabilities and Shareholder’s Equity	$	1,871,558	$	-	$	1,871,558
For the year ended December 31, 2010
Operating Loss	$	(2,304,272)	$	-	$	(2,304,272)
Other Income (Expense)		(929,574)		374,236		(555,338)
Net Loss	$	(3,233,846)	$	374,236	$	(2,859,610)
Basic and Diluted Loss Per Share	$	(0.44)	$	0.05	$	(0.39)