Debt Issuance Costs

6 Months Ended

Jun. 30, 2012

Debt Issuance Costs [Abstract]

Debt Issuance Costs

NOTE 8 -   Debt Issuance Costs

Debt issuance costs (i.e. placement agent costs) are capitalized when the expense is incurred and are amortized equally over a 24 month period. In connection with the issuance of convertible debt on February 24, 2010, the Company paid its placement agent fees through the issuance of 1,117,000 stock warrants and cash of $403,500.

On February 24, 2010, the Company determined the fair value of these warrants to be $1,213,062. The fair value was determined by using the Black-Scholes-Merton option-pricing model based on the following assumptions: 

Number of Warrants	% of Warrants Issued	Initial Vesting Date
1,117,000	100%	February 24, 2010
	Dividend Yield	0.00%
	Expected Volatility	270.21%
	Risk-Free Interest Rate	2.69%
	Contractual term	5 years
	Estimated term	1.875 years
	Stock Price at Date of Grant	$1.25
	Exercise Price	$1.00

Debt issuance costs as of June 30, 2012 and December 31, 2011 were as follows: 

	June 30, 2012			December 31, 2011
Debt Issuance Cost	$	1,695,362		$	1,695,362
Accumulated amortization		(1,695,362	)		(1,560,649	)
Debt Issuance, end of period	$	-0-		$	134,713

Amortization of debt issuance expense for the periods ended June 30, 2012 and June 30, 2011 was $134,713 and $423,840, respectively.