FINANCIAL INSTRUMENTS

3 Months Ended

Mar. 31, 2012

Derivative Instruments and Hedging Activities

Derivatives and Fair Value [Text Block]

NOTE 7 - FINANCIAL INSTRUMENTS

The Company has financial instruments that are considered derivatives, or contain embedded features subject to derivative accounting.  Embedded derivatives are valued separate from the host instrument and are recognized as derivative liabilities in the Company’s balance sheet.  The Company measures these instruments at their estimated fair value, and recognizes changes in their estimated fair value in results of operations during the period of change.  The Company has estimated the fair value of the embedded derivatives for convertible debentures and associated warrants using a Multi-nomial Lattis model as of March 31, 2012 and December 31, 2011 and used the Black-Scholes model prior to that. The Company has estimated the fair value of the embedded derivatives for warrants associated with debentures that do not have a convertible feature using the Black-Scholes Model as of March 31, 2012 and December 31, 2011. The fair values of the derivative instruments are measured each quarter. As of March 31, 2012, and December 31, 2011, the fair market value of the derivatives aggregated $428,322 and $294,717, respectively.