Warrants

3 Months Ended

Mar. 31, 2012

Warrants and Rights Note Disclosure [Abstract]

9. Warrants

In conjunction with a private placement in October 2010 (the “2010 Private Placement”), the Company issued warrants to Ladenburg, the placement agent for the 2010 Private Placement. The warrants entitle Ladenburg to purchase up to a total of 1,044,584 shares of common stock, for $0.25 per share. The warrants expire October 28, 2015. The warrants are exercisable, at the option of the holder, at any time prior to their expiration. The fair value of warrants issued to placement agents was calculated utilizing the probability weighted binomial method. The warrants issued to the placement agent contain provisions that make them redeemable for cash by the holder of the warrant under certain circumstances that are not within the control of the Company. Accordingly, the fair market value of the warrants as of the date of issuance has been classified as liabilities.

At March 31, 2012 the change in fair value of the warrants of $10,446 is included in the accompanying statement of operations as other income.

In conjunction with March Private Placement, the Company issued warrants to Ladenburg in March 2012. The warrants entitle Ladenburg to purchase up to a total of 86,323 shares of common stock, for $0.35 per share. The warrants expire March 27, 2017. The warrants are exercisable, at the option of the holder, at any time prior to their expiration. The fair value of warrants issued to placement agents were calculated utilizing the probability weighted binomial method. The warrants issued to the placement agent contain provisions that make them redeemable for cash by the holder of the warrant under certain circumstances that are not within the control of the Company. Accordingly, the fair market value of the warrants as of the date of issuance has been classified as liabilities. The value of the warrants at March 31, 2012 was $14,675.

The significant assumptions which the Company used to measure the fair value of warrants at March 31, 2012 is as follows:

Stock price	$	0.37
Term	3.58-4.99 Years
Volatility		50	%
Risk-free interest rate		0.51	%
Exercise prices	$	0.25-0.35
Dividend yield		0.00	%
Return		0.51-1.04	%
Delta		1/12
Up ratio		1.144
Down ratio		0.857-0.858
Up transition probability		0.5000