v2.3.0.15

DERIVATIVE INSTRUMENTS: | 6 Months Ended | 12 Months Ended
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Jun. 30, 2011 | Dec. 31, 2010
DERIVATIVE INSTRUMENTS: | 10. DERIVATIVE INSTRUMENTS: The Company generally uses the Black-Scholes pricing model to estimate the fair values of its derivative instruments. Derivative instruments consist of variable conversion features from debt to common equity and variable exercise prices for warrants. As of June 30, 2011, the Company used the following inputs in this model as appropriate for each derivative instrument: no dividend yield, an expected volatility ranging from 130% to 279%, a risk-free interest rate ranging from 0.10% to 2.61%, and an expected life ranging from 0.63 to 6.05 years, the closing price of the Company’s common stock of $0.38 per share, and a conversion price or an exercise price ranging from $0.10 to $200. At dates of issuance, the Company used input values as of such date. A summary of the fair values of the Company’s derivative instruments based on this model as of June 30, 2011, respective issuance dates and as of December 31, 2010 is as follows:
|  | June 30, |  |  | At 2011 |  |  | December 31, |
|  | 2011 |  |  | Grant Date |  |  | 2010 |
Conversion features: |  |  |  |  |  |  |  |  |
First quarter 2010 issuance |  | $ | 839,624 |  |  | $ | - |  |  | $ | 301,955 |
Second quarter 2010 issuance |  |  | 450,340 |  |  |  | - |  |  |  | 141,522 |
Third quarter 2010 issuance |  |  | 310,788 |  |  |  | - |  |  |  | 126,095 |
Total conversion features |  |  | 1,600,752 |  |  |  | - |  |  |  | 569,572 |
Warrants: |  |  |  |  |  |  |  |  |  |  |  |
First quarter 2010 issuance |  |  | 37,983 |  |  |  | - |  |  |  | 87,958 |
Second quarter 2010 issuance |  |  | 14,246 |  |  |  | - |  |  |  | 32,988 |
Third quarter 2010 issuance |  |  | 9,497 |  |  |  | - |  |  |  | 21,994 |
2007 debentures - penalty warrants |  |  | 4,871 |  |  |  | 1,084 |  |  |  | 10,810 |
Total warrants |  |  | 66,597 |  |  |  | 1,084 |  |  |  | 153,750 |
Dilution warrants: |  |  |  |  |  |  |  |  |  |  |  |
May 4, 2011 issuance |  |  | 395,697 |  |  |  | 187,416 |  |  |  | - |
March 31, 2011 issuance |  |  | 593,545 |  |  |  | 624,835 |  |  |  | - |
March 4, 2011 issuance |  |  | 19,607 |  |  |  | 42,309 |  |  |  | - |
September 16, 2010 issuance |  |  | 86,658 |  |  |  | - |  |  |  | 200,702 |
November 16, 2010 issuance |  |  | 29,856 |  |  |  | - |  |  |  | 69,122 |
Total anti-dilution warrants |  |  | 1,125,363 |  |  |  | 854,560 |  |  |  | 269,824 |
Commitments to issue common shares in excess of amount authorized |  |  | - |  |  |  | - |  |  |  | 125,377 |
|  | $ | 2,792,712 |  |  | $ | 855,644 |  |  | $ | 1,118,523 |
Effective May 13, 2010, the Company committed to issue more common shares than authorized by its Articles of Incorporation. Pursuant to ASC 815-40, Derivatives and Hedging – Contracts in Entity’s Own Equity, the Company’s policy with regard to settling outstanding financial instruments is to settle those with the latest maturity date first, which essentially sets the order of preference for settling the financial instruments. Therefore, on May 13, 2010, the Company reclassified warrants to purchase common shares and recognized contracts to be settled with common stock from additional paid in capital to derivative liabilities. Subsequent to May 13, 2010 through February 11, 2011, the Company committed to issue additional shares and warrants above the amount authorized. On December 31, 2010, the fair value of derivative liabilities for contracts to be settled with the Company’s common shares in excess of common share capital authorized aggregated $125,377. On February 11, 2011, the Company increased the number of authorized shares of its common stock from 2,500,000,000 to 5,000,000,000, and accordingly wrote-off the remaining value of the derivative liability to its consolidated statement of operations. | 10. DERIVATIVE INSTRUMENTS: The Company generally uses the Black-Scholes pricing model to estimate the fair values of its derivative instruments. As of December 31, 2010, the Company used the following inputs in this model as appropriate for each derivative instrument: no dividend yield, an expected volatility ranging from 111% to 318%, a risk-free interest rate ranging from 0.29% to 2.71%, and an expected life ranging from 1.13 to 6.55 years, the closing price of the Company’s common stock at December 31, 2010 of $0.0044 per share, and a conversion price or an exercise price ranging from $0.0033 to $0.004. A summary of the fair values of the Company’s derivative instruments based on this model as of December 31, 2010, the 2010 grant date for such derivative instruments and December 31, 2009, is as follows:
|  |  |  |  | 2010 |  |  |  |
|  | 2010 |  |  | Grant Date |  |  | 2009 |
Conversion features: |  |  |  |  |  |  |  |  |
First quarter 2010 issuance |  | $ | 301,955 |  |  | $ | 940,593 |  |  | $ | - |
Second quarter 2010 issuance |  |  | 141,522 |  |  |  | 281,251 |  |  |  | - |
Third quarter 2010 issuance |  |  | 126,095 |  |  |  | 271,894 |  |  |  | - |
Total conversion features |  |  | 569,572 |  |  |  | 1,493,738 |  |  |  | - |
Warrants: |  |  |  |  |  |  |  |  |  |  |  |
First quarter 2010 issuance |  |  | 87,958 |  |  |  | 311,488 |  |  |  | - |
Second quarter 2010 issuance |  |  | 32,988 |  |  |  | 93,746 |  |  |  | - |
Third quarter 2010 issuance |  |  | 21,994 |  |  |  | 54,997 |  |  |  | - |
2007 debentures - penalty warrants |  |  | 10,810 |  |  |  | 9,787 |  |  |  | 21,124 |
Total warrants |  |  | 153,750 |  |  |  | 470,018 |  |  |  | 21,124 |
Dilution warrants: |  |  |  |  |  |  |  |  |  |  |  |
September 16, 2010 issuance |  |  | 200,702 |  |  |  | 410,592 |  |  |  | - |
November 16, 2010 issuance |  |  | 69,122 |  |  |  | 72,274 |  |  |  | - |
Total anti-dilution warrants |  |  | 269,824 |  |  |  | 482,866 |  |  |  | - |
|  | $ | 993,146 |  |  | $ | 2,446,622 |  |  | $ | 21,124 |
Effective May 13, 2010, the Company committed to issue more common shares than authorized by its Article of Incorporation. If the Company would have been required to settle all of its outstanding warrants and liabilities (including contingent liabilities to be settled with equity not previously recorded) with common shares as of May 13, 2010, the Company would have been required to issue up to 377,460,076 common shares over its authorized amount of 2,500,000,000 common shares, assuming all targets and contingencies were met, representing 1,200,000 shares for the settlement of warrants and 376,260,076 shares for the settlement of liabilities including contingent liabilities not previously recorded (of which all but 26,978,022 shares have been recorded as liabilities). Pursuant to ASC 815-40, Derivatives and Hedging – Contracts in Entity’s Own Equity, the Company’s policy with regard to settling outstanding financial instruments is to settle those with the latest maturity date first, which essentially sets the order of preference for settling the financial instruments. Therefore, on May 13, 2010, the Company reclassified warrants to purchase 1,200,000 common shares with a fair value of $3,862 and recognized contracts to be settled with common stock (previously considered contingent liabilities not meeting recognition criteria) for 26,978,022 shares with a fair value of $337,225, from additional paid in capital to derivative liabilities. Subsequent to May 13, 2010 through December 31, 2010, the Company committed to issue an additional 507,712,302 shares and warrants above the amount authorized of which all but 2,240,657 had been recorded as liabilities. The fair value of the 2,240,657 shares on the day the Company committed to issue the additional shares was $15,719 (shares prior to our 200-to-1 reverse split). On December 31, 2010, the fair value of derivative liabilities for contracts to be settled with the Company’s common shares in excess of common share capital authorized aggregated $125,377. As of December 31, 2010, if the Company would be required to settle all of its outstanding warrants and liabilities (including contingent liabilities to be settled with equity) with common shares, the Company would be required to issue up to 885,172,378 common shares beyond the amount authorized as of December 31, 2010 of 2,500,000,000 common shares. As of December 31, 2010, liabilities and derivative liabilities have been recorded for all 885,172,378 shares. On February 11, 2011, the Company increased the number of authorized shares of its common stock from 2,500,000,000 to 5,000,000,000.

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- Definition The entire disclosure for the entity's entire derivative instruments and hedging activities. Describes an entity's risk management strategies, derivatives in hedging activities and non-hedging derivative instruments, the assets, obligations, liabilities, revenues and expenses arising therefrom, and the amounts of and methodologies and assumptions used in determining the amounts of such items. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 133 -Paragraph 44 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 1B -URI http://asc.fasb.org/extlink&oid=6935481&loc=SL5580258-113959 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(n)) -URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4A -URI http://asc.fasb.org/extlink&oid=6935481&loc=SL5618551-113959 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4B -URI http://asc.fasb.org/extlink&oid=6935481&loc=SL5624163-113959 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4J -URI http://asc.fasb.org/extlink&oid=6935481&loc=SL5708773-113959 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6935481&loc=d3e41638-113959 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4C -URI http://asc.fasb.org/extlink&oid=6935481&loc=SL5624171-113959 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6935481&loc=d3e41620-113959 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=6935481&loc=d3e41641-113959 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 30 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6887037&loc=d3e80748-113994 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 30 -Section 45 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6441202&loc=d3e80720-113993 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6887037&loc=d3e80784-113994 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6935481&loc=SL5579240-113959 Reference 15: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6935481&loc=d3e41635-113959 Reference 16: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4E -URI http://asc.fasb.org/extlink&oid=6935481&loc=SL5624181-113959 Reference 17: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4H -URI http://asc.fasb.org/extlink&oid=6935481&loc=SL5624258-113959 Reference 18: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 1A -URI http://asc.fasb.org/extlink&oid=6935481&loc=SL5579245-113959 Reference 19: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 25 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6886632&loc=d3e76258-113986 Reference 20: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 133 -Paragraph 45 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. 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