Annual report pursuant to Section 13 and 15(d)

Prior Period Effect of 2009 Restatement

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Prior Period Effect of 2009 Restatement
 12 Months Ended
Dec. 31, 2011
Prior Period Effect of 2009 Restatement  
Prior Period Effect of 2009 Restatement
2. 
Prior Period Effect of 2009 Restatement

As disclosed in the Company's 2010 Annual Report on Form 10-K, Management restated the Company's financial statements to reflect a prior period adjustment effective January 1, 2009, which resulted in a decrease to additional paid-in capital of $6,399,805, an increase of the accumulated deficit of $1,092,021, and an increase in warrant and put feature on common stock liabilities of $5,307,784.  Management had determined that the warrants and anti-dilution make whole provisions, as described in Notes 13 and 14, respectively, issued to investors from offerings occurring in December 2007 and March, 2008, were misclassified as equity, and should have been treated as liabilities at inception.

The Company has recorded this adjustment for the years ended December 31, 2008 and 2007 on the Statement of Stockholders' Equity (Deficit) and Comprehensive Loss, as follows:
 
   
For the Year Ended December 31,
        
   
2008
    
2007
    
Total
  
Common stock issued-adjustment to Additional paid in capital
                  
As originally reported
   $ 899,936     $ 6,799,538        
Effect of restatement
     (744,486 )     (5,655,319 )     (6,399,805 )
As restated
     155,450       1,144,219          
                         
Net loss-adjustment to Accumulated deficit during the development stage
                       
As originally reported
     (4,912,148 )     (4,304,005 )        
Effect of restatement
     1,230,347       (138,326 )     1,092,021  
As restated
     (3,681,801 )     (4,442,331 )