STOCKHOLDERS' EQUITY

12 Months Ended

Dec. 31, 2011

STOCKHOLDERS' EQUITY [Abstract]

STOCKHOLDERS' EQUITY

NOTE 8 – STOCKHOLDERS' EQUITY

Preferred Stock

The Company is authorized to issue 10,000,000 shares of noncumulative, non-voting, nonconvertible preferred stock, $0.001 par value per share.  At December 31, 2011, 2010 and 2009, no shares of preferred stock were outstanding.

Common Stock

The Company is authorized to issue 120,000,000 shares of common stock, $0.001 par value per share.  At December 31, 2011, 2010 and 2009, 89,119,405, 69,704,393 and 69,781,351 shares were issued and outstanding, respectively.

2011

During the year ended December 31, 2011, the Company issued a total of 97,612 shares of restricted, common stock to directors and consultants as payment of fees.  The value of such was recorded at $118,436.  During the year ended December 31, 2011, a warrant holder received 5,570 shares of the Company's common stock through a cashless exercise.  During the year ended December 31, 2011 an option holder received 41,935 shares of the Company's common stock through a cashless exercise.  Also during the year ended December 31, 2011, the Company sold a total of 14,250,000 shares of common stock at pricing between $1.25 and $1.53 per share, collecting a total of $10,805,000 less $230,000 of expenses related to the capital raised.  A portion of these shares was purchased by a related party. (See Note 13)

2010

During the year ended December 31, 2010, the Company issued a total of 40,606 shares of common stock to directors as payment of director's fees.  The value of such shares was recorded at $30,000.

During the year ended December 31, 2010, the Company issued a total of 41,305 shares of common stock to outside consultants for the performance of services.  The value of such shares was recorded at $35,079.

During the year ended December 31, 2010, the Company exercised its ability to mandatorily convert portions of its convertible debt and unpaid interest to 2,457,500 shares of common stock.

During the year ended December 31, 2010, the Company issued 427,714 shares of common stock to related parties as part of a forbearance agreement signed in connection with the shareholders' class action lawsuit.  The value of such shares was recorded at $320,786.  See Note 13.

During the year ended December 31, 2010, the Company received shares from its former CEO who relinquished his rights to them as part of the settlement of the shareholders' class action lawsuit.  The 3,044,083 shares of common stock were considered forfeited and returned to unissued shares.  The Company paid $170,000 related to the finalization of the share forfeiture and cancellation.  See Note 13.

During the year ended December 31, 2010, the Company filed an S-1 registration statement allowing for the registration of 12,981,412 shares of common stock some of which are issuable upon the conversion of 10% PIK Convertible Notes due 2018.

During the year ended December 31, 2010, the Company hired an outside firm to assist with the placement of convertible debt.  As a result, $150,000 of cash was paid as a finder's fee and was recorded as a discount on debt and was being amortized over the term of the related debt. During 2011, 2010 and 2009 the discount on debt was expensed in the amount of $146,939, $3,061 and $-0-, respectively.

2009

During the year ended December 31, 2009, the Company issued a total of 78,497 shares of restricted, common stock to directors as payment of director fees.  The value of such shares was recorded at $ 17,250.

During the year ended December 31, 2009, the Company exercised its ability to mandatorily convert portions of its convertible debt and unpaid interest to 10,487,226 shares of common stock.

During the year ended December 31, 2009, the Company filed an S-1 registration statement allowing for the registration of 23,407,964 shares of common stock some of which are issuable upon the exercise of options and warrants and the conversion of 10% PIK Convertible Notes due 2018.