Common Stock

6 Months Ended

Jun. 30, 2011

Common Stock

(11) Common Stock

Common stock consists of $0.0001 par value, 500,000,000 shares authorized, 348,096,215 shares issued and outstanding as of June 30, 2011 and 310,345,811 shares issued and outstanding as of December 31, 2010.

During the six months ended June 30, 2011, 337,000 shares that were previously issued as a finder’s fee were returned to the Company.

During the six months ended June 30, 2011, the Company issued 14,630,004 shares of common stock for services with a total value of $582,935. The number of shares issued for the services was based upon the fair market value of the stock on the date of issuance, with the differences between the fair market value of the stock and the fair market value of the services, or $476,027, recognized as loss on extinguishment of debt of $106,907.

During the six months ended June 30, 2011, the Company issued 5,394,997 shares of common stock for conversion of debt or payment of accounts payable with a total value of $250,825. The number of shares issued for the conversion of debt and payment of accounts payable was based upon the fair market value of the stock on the date of conversion or payment, with differences between the fair market value of the stock and the fair market value of the debt recognized, or $191,163, as loss on extinguishment of debt of $59,662.

In January, 2011, the Company’s S-1 filing became effective with 41,000,000 shares available pursuant to the Dutchess Opportunity Fund agreement.  Of such shares, (i) Dutchess has agreed to purchase 41,000,000 pursuant to the investment agreement dated January 12, 2010, between Dutchess and the Company, and (ii) NO shares were issued to Dutchess in consideration for the investment. Subject to the terms and conditions of such investment agreement, we have the right to put up to $5,000,000 in shares of our common stock to Dutchess.  This arrangement is sometimes referred to as an Equity Line.

We will not receive any proceeds from the resale of these shares of common stock offered by Dutchess. We will, however, receive proceeds from the sale of shares to Dutchess pursuant to the Equity Line. When we put an amount of shares to Dutchess, the per share purchase price that Dutchess will pay to us in respect of such put will be determined in accordance with a formula set forth in the Investment Agreement. Generally, in respect of each put, Dutchess will pay us a per share purchase price equal to ninety-five percent (95%) of the daily volume weighted average price of our common stock during the five (5) consecutive trading day period beginning on the trading day immediately following the date of delivery of the applicable put notice.

Dutchess may sell the shares of common stock from time to time at the prevailing market price on the Over-the Counter (OTC) Bulletin Board, or on an exchange if our shares of common stock become listed for trading on such an exchange, or in negotiated transactions. Dutchess is an underwriter within the meaning of the Securities Act of 1933, as amended (the “Securities Act”) in connection with the resale of our common stock under the Equity Line.

Pursuant to the agreement, the Company sold 18,062,403 shares of the Company’s common stock during the first six months of 2011 to Dutchess Opportunity Fund for $412,733, resulting in net proceeds to the Company of $402,733 after costs.