RELATED PARTY TRANSACTIONS

3 Months Ended

Mar. 31, 2012

Notes to Financial Statements

RELATED PARTY TRANSACTIONS

NOTE 9: RELATED PARTY TRANSACTIONS.

(a)   On January 1, 2012, the Company issued a total of 1,077,585 warrants of common stock to its five directors, including warrants issued to the Chief Executive Officer and Chief Financial Officer, each of which received 215,517 warrants for their first quarter of 2012 director fees.  The issuance is part of the annual compensation that was authorized by the Company’s Board of Directors on December 6, 2011, when the Board approved to replace directors annual compensation of $50,000 with three year warrants payable quarterly.  The Company recorded $42,000 stock-based compensation in connection with this issuance.

(b)   As discussed in Note 7, on January 23, 2012, the Company issued 1,000,000 shares of common stock to each of the Company’s Chief Executive Officer and Chief Financial Officer per grant that were approved by the Company’s Board of directors on January 11, 2012.  The shares were fully vested on the date of the grants and accordingly, the Company recorded $130,000 of stock-based compensation in connection with this issuance.