Management has valued warrants at their date of issue utilizing the Black-Scholes Option Pricing Model. The risk-free interest rate is based on the implied yield available on U.S. Treasury issues with an equivalent term approximating the expected life of the warrants depending on the date of the issue and their expected life. The expected life of warrants used was based on the term of the warrant. The Company determined the expected dividend rate based on the assumption and expectation that earnings generated from operations are not expected to be adequate to allow for the payment of dividends in the near future. The following weighted-average assumptions were utilized in the fair value calculations for warrants granted:

	Year ended			Year ended
	December 31, 2011			December 31, 2010
Expected dividend yield		0	%		0	%
Expected stock price volatility		95-98	%		86-102	%
Risk-free interest rate		2.34-4.24	%		2.80-4.36	%
Expected life of warrants	9.2-9.9 years			9.3-10 years

	Number of Shares Remaining Warrants		Weighted Average Exercise Price		Weighted-Average Remaining Contractual Term		Aggregate Intrinsic Value
Outstanding at January 1, 2011		1,492,000	$ 5.00		8.3
Warrants granted during 2011		159,250		10.00	9.5
Warrants expired/cancelled during 2011		0

Outstanding at December 31, 2011		1,651,250	$	5.61		8.5	$	0
Exercisable at December 31, 2011		1,087,500	$	5.00		8.3	$	0

All share and per share data have been adjusted to give effect to the one-for-twenty reverse stock split in December 2011, as described in Note 5 to these consolidated financial statements.

The weighted average fair value of warrants issued during twelve months ended December 31, 2011 was $10.00. During the year ended December 31, 2011, 725,000 warrants vested, none expired or were cancelled, and no warrants were exercised. For the year ended December 31, 2010, 362,500 warrants vested, none expired or were cancelled, and no warrants were exercised.