NOTE 3- RESTATEMENT

During the second quarter of 2012, in valuing its warrant derivative, as described in Note 10, the Company utilized a binomial lattice model after previously utilizing a Black-Scholes model for its warrants issued on December 22, 2011. This new valuation resulted in a restatement of the Company's first quarter 2012 condensed consolidated financial statements for the following adjustments: a $2,249,500 adjustment to Gain/Loss on revaluation of warrants and the Warrant derivative, and a $780,000 reclassification between the Warrant derivative and Additional Paid-In-Capital. The aforementioned adjustments are non-cash and do not affect the Company's operating income.

A summary of the effects of the restatement for the first quarter of 2012 is set forth below:

	March 31, 2012					Three months Ended March 31, 2012
	Warrant derivative			Additional Paid-In- Capital		Net income (loss)			Net income (loss) per share
As previously reported	$	4,614,500		$	48,437,438	$	(4,058,540	)	$	(0.05	)
Valuation adjustment		(2,249,500	)		--		2,249,500			0.03
Reclassification		(780,000	)		780,000		--			--
As adjusted	$	1,585,000		$	49,217,438	$	(1,809,040	)	$	(0.02	)

The valuation utilizing the binomial lattice model produced a lower liability value mainly due to the call option on the warrant. The key assumptions underlying this model are disclosed in Note 4.