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5. GAIN ON DEBT EXTIGUISHMENT
9 Months Ended
Sep. 30, 2012
Debt Disclosure [Abstract]  
GAIN ON DEBT EXTIGUISHMENT

On May 18, 2012, the Company negotiated the conversion of two debt holders’ promissory notes totaling $1,667,750 in exchange for 3,335,500 shares of the Company’s common stock and warrants for 3,335,500 shares of common stock with an exercise price of $0.50 expiring May 31, 2015. As a result of the conversion of the two debt holders’ notes, the Company recognized a gain on debt extinguishment of $1,136,055 during the nine months ended September 30, 2012 based on the fair value of both the common stock and warrants issued. (See Note 4).

 

In September 30, 2012, the Company wrote-off a debenture and its related accrued interest totaling $23,377 and recognized a gain on debt extinguishment in the same amount.