Convertible Instruments	12 Months Ended
Dec. 31, 2012
Notes to Financial Statements
Convertible Instruments	6. Convertible Instruments During the year ended December 31, 2010, the Company sold convertible debentures for aggregate cash proceeds of $150,000. Each convertible debenture carried a term of two years and bore a 10% per annum interest rate payable annually. The convertible debentures were convertible into an aggregate of 75,000 shares of the Company‘s common stock. The Lenders had customary “piggy-back” registration rights with respect to the common stock issued or issuable upon the exercise of the convertible debentures (See Note 9). As of December 31, 2011 all of these convertible debentures had been converted into shares of the Company’s common stock, as disclosed in Note 9. In connection with these notes for the years ended December 31, 2011 and 2010, the Company recorded $9,658 and $21,079, respectively, as amortization of deferred debt discount, which is included within interest expense on the consolidated statements of operations. As of December 31, 2010, the Company had an aggregate of $225,000 in outstanding convertible debentures. On November 8, 2010, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with investors (the “Investors”) and sold certain securities to the Investors (the “2010 Private Placement”). Under the terms of the Purchase Agreement, the Company sold a total of 365,265 newly authorized shares of $0.001 Par Value Series B preferred stock (the “Series B Preferred Stock”) to the Investors at $9.45 per share, for an aggregate price of approximately $3,450,000. Each share of the Series B Preferred Stock may be converted at any time, in whole or in part, into five shares of the Company’s Common Stock, as adjusted. The Company also entered into a separate Loan and Security Agreement dated November 8, 2010 with two of the Investors (the “2010 Loan Agreement”). Under the terms of the 2010 Loan Agreement and the Purchase Agreement, the Company exchanged $1,015,000 of short-term debt with these investors ("Old Convertible Notes") for convertible promissory notes in the aggregate principal amount of $1,000,000 (the “Convertible Notes”). The Convertible Notes bear interest at the rate of 7% per annum compounded annually (effective interest rate of 47% per annum when taking into account the stated interest rate plus the impact of warrants given as additional compensation). The principal amount and all accrued interest on the Convertible Notes are payable on December 31, 2012, or earlier on an event of default or a sale or liquidation of the Company. The principal amount and accrued interest on the Convertible Notes may be converted at any time into shares of Series B Preferred Stock at a conversion price of $9.45 per share, as adjusted. Under the terms of the Purchase Agreement, the Company also issued warrants to the Investors, to purchase an aggregate of 1,271,590 shares of the Company’s Common Stock at an exercise price of $3.00 per share and a term of five years from its grant date. The aggregate deferred debt discount related to the Convertible Notes was estimated at $660,930 using the Black Scholes model. The debt discount amortization associated with the Convertible Notes was $324,966 and $60,578 for the years ended December 31, 2011 and 2010, respectively. The Company recorded a deemed dividend of $1,666,967 in the year ended December 31, 2010 for the issued portion of the Series B convertible preferred stock not attributable to the Convertible Notes. The Company incurred transaction costs to advisors in the amount of approximately $320,000 (of which $245,000 was deducted from net proceeds) and received net proceeds of approximately $3,205,000 (gross proceeds of approximately $3,450,000), exclusive of certain accrued expenses of approximately $73,000 as of December 31, 2010. As part of the November 8, 2010 financing transaction, the balance of Old Convertible Notes aggregating $1,015,000 and accrued interest of approximately $87,000 were satisfied. The remaining debt discount at the time of repayment and after issuance of the convertible notes on November 8, 2010 was recorded to interest expense in the year ended December 31, 2010 for $172,589. The total debt discount amortized on these notes during the year ended December 31, 2010 was $461,750. The balance of the Convertible Notes as of December 31, 2011 and 2010 was $1,000,000.

6. Convertible Instruments

During the year ended December 31, 2010, the Company sold convertible debentures for aggregate cash proceeds of $150,000. Each convertible debenture carried a term of two years and bore a 10% per annum interest rate payable annually. The convertible debentures were convertible into an aggregate of 75,000 shares of the Company‘s common stock. The Lenders had customary “piggy-back” registration rights with respect to the common stock issued or issuable upon the exercise of the convertible debentures (See Note 9). As of December 31, 2011 all of these convertible debentures had been converted into shares of the Company’s common stock, as disclosed in Note 9. In connection with these notes for the years ended December 31, 2011 and 2010, the Company recorded $9,658 and $21,079, respectively, as amortization of deferred debt discount, which is included within interest expense on the consolidated statements of operations. As of December 31, 2010, the Company had an aggregate of $225,000 in outstanding convertible debentures.

On November 8, 2010, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with investors (the “Investors”) and sold certain securities to the Investors (the “2010 Private Placement”). Under the terms of the Purchase Agreement, the Company sold a total of 365,265 newly authorized shares of $0.001 Par Value Series B preferred stock (the “Series B Preferred Stock”) to the Investors at $9.45 per share, for an aggregate price of approximately $3,450,000. Each share of the Series B Preferred Stock may be converted at any time, in whole or in part, into five shares of the Company’s Common Stock, as adjusted. The Company also entered into a separate Loan and Security Agreement dated November 8, 2010 with two of the Investors (the “2010 Loan Agreement”). Under the terms of the 2010 Loan Agreement and the Purchase Agreement, the Company exchanged $1,015,000 of short-term debt with these investors ("Old Convertible Notes") for convertible promissory notes in the aggregate principal amount of $1,000,000 (the “Convertible Notes”). The Convertible Notes bear interest at the rate of 7% per annum compounded annually (effective interest rate of 47% per annum when taking into account the stated interest rate plus the impact of warrants given as additional compensation). The principal amount and all accrued interest on the Convertible Notes are payable on December 31, 2012, or earlier on an event of default or a sale or liquidation of the Company. The principal amount and accrued interest on the Convertible Notes may be converted at any time into shares of Series B Preferred Stock at a conversion price of $9.45 per share, as adjusted. Under the terms of the Purchase Agreement, the Company also issued warrants to the Investors, to purchase an aggregate of 1,271,590 shares of the Company’s Common Stock at an exercise price of $3.00 per share and a term of five years from its grant date. The aggregate deferred debt discount related to the Convertible Notes was estimated at $660,930 using the Black Scholes model. The debt discount amortization associated with the Convertible Notes was $324,966 and $60,578 for the years ended December 31, 2011 and 2010, respectively. The Company recorded a deemed dividend of $1,666,967 in the year ended December 31, 2010 for the issued portion of the Series B convertible preferred stock not attributable to the Convertible Notes. The Company incurred transaction costs to advisors in the amount of approximately $320,000 (of which $245,000 was deducted from net proceeds) and received net proceeds of approximately $3,205,000 (gross proceeds of approximately $3,450,000), exclusive of certain accrued expenses of approximately $73,000 as of December 31, 2010. As part of the November 8, 2010 financing transaction, the balance of Old Convertible Notes aggregating $1,015,000 and accrued interest of approximately $87,000 were satisfied. The remaining debt discount at the time of repayment and after issuance of the convertible notes on November 8, 2010 was recorded to interest expense in the year ended December 31, 2010 for $172,589. The total debt discount amortized on these notes during the year ended December 31, 2010 was $461,750. The balance of the Convertible Notes as of December 31, 2011 and 2010 was $1,000,000.