Quarterly report pursuant to sections 13 or 15(d)


6 Months Ended
Jun. 30, 2011
Debt Disclosure [Text Block]

In June 2003, the Company issued $30,000 in 5% convertible debentures and in September 2003 issued an additional $100,000 in 5% convertible debentures to private investors. The total outstanding principal balance of the convertible debentures as of June 30, 2011 and December 31, 2010 was $15,000, plus accrued interest of $7,297 and $6,925.

On December 30, 2005, the Company entered into a Securities Purchase Agreement with YA Global Investments, L.P (YA Global). Pursuant to such purchase agreement, YA Global purchased $2,359,047 of secured convertible debentures, which are convertible into shares of the Company’s Class A common stock. Two such debentures were issued on December 30, 2005 for an aggregate of $1,759,047, interest payable at the rate of 7.5% per annum, and an additional debenture was issued on May 6, 2006 equal to $600,000 with interest payable at the rate of 7.5% per annum.

On November 9, 2010, the convertible debentures issued to YA Global were amended with the maturity date being extended to December 31, 2011. This amendment required an initial payment of $175,000 due on January 28, 2011 with additional monthly payments of $10,000 to be made for the following eleven months ending December 1, 2011. The remaining principal and all accrued interest was due on December 31, 2011. This agreement also modified and fixed the conversion price at $.0001, but is also subject to price protection features (see Note 5). The Debentures were not convertible during 2011, provided that the payments required by the amended agreement had been made in a timely fashion. During the first three months of 2011, the Company made payments in the amount of $205,000 in accordance with the terms of the amendment. In April 2011, the Company paid YA Global $530,000 to satisfy any and all obligations owed to YA Global, including outstanding principal, accrued interest and accrued liquidated damages.  As a result of the restructuring of the debt, the Company recorded a gain on the extinguishment  of $1,461,660, which is presented as other income in the accompanying statement of operations. Additionally, the Company recorded a gain on the extinguishment of the derivative liability associated with this convertible debenture in the amount of $767,279 (see Note 5).