NOTE 2 - PRIOR PERIODS ADJUSTMENTS:

The financial statements of the Company as of and for the three months ended March 31, 2011 and for the period from January 1, 1999 (inception) to March 31, 2011 have been restated as a result of management's determination that the Company had misclassified warrants and convertible preferred stock issued to investors in the private placement offering occurring on September 7, 2007. The warrants and convertible preferred stock were previously reported as equity. Upon further review of the terms of the respective private placement agreements, management concluded that the warrants should have been classified as a liability and the preferred stock should have been classified as mezzanine equity at inception. The warrants should be reported at fair value at the balance sheet date. The convertible preferred stock should be adjusted to its maximum redemption amount at each balance sheet date.

The restatement of these errors increased the Company's net loss attributable to common stockholders, as originally reported for the three months ended March 31, 2011 by $4,379 ($0.00 per basic and diluted share) to a loss of $26,391. The restated balances at January 1, 2011 also include a reduction of additional paid-in capital of $1,516,060, an increase in deficit accumulated during the development stage of $369,048, and an increase in warrant liabilities and the convertible preferred stock of $87,240 and $1,816,643, respectively. The restatement had no effect on the Company's cash and loss from operations or net cash used in operating activities for the three months ended March 31, 2011. After reviewing the circumstances leading up to the restatement, management believes that the errors were inadvertent and unintentional. In addition, following the discovery of these errors, the Company began implementing procedures intending to strengthen its internal control processes and prevent a recurrence of these errors.

The effects of the restatement on the Company's financial statements as of and for the three months ended March 31, 2011 and for the period from January 1, 1999 (inception) to March 31, 2011 are as follows:

BALANCE SHEET AS OF MARCH 31, 2011
		As Previously Reported		Effect of Restatement		As restated
Warrant liability	$	-	$	58,284	$	58,284
Redeemable and convertible preferred stock (under mezzanine)	$	-	$	1,849,978	$	1,849,978
Preferred Stock	$	18,775	$	(18,775)	$	-
Common stock	$	1,553,628	$	-	$	1,553,628
Additional paid-in capital	$	4,077,068	$	(1,516,060)	$	2,561,008
Accumulated deficit	$	(3,626,121)	$	-	$	(3,626,121)
Deficit accumulated during the development stage	$	(464,761)	$	(373,427)	$	(838,188)
Stockholders' equity (deficit)	$	1,558,589	$	(1,908,262)	$	(349,673)

STATEMENT OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 2011
			As Previously Reported			Effect of Restatement				As restated
Change in warrant liability expense	$		-		$	28,956			$	28,956
Net (loss) income for the period	$		(22,012)		$	28,956			$	6,944
Accretion of preferred stock to redemption value	$		-		$	(33,335)			$	(33,335)
Net loss attributable to common stockholders	$		(22,012)		$	(4,379)			$	(26,391)
Net loss per share – basic and diluted attributable to common stockholders	$		-		$	(0.00)			$	(0.00)

STATEMENT OF OPERATIONS FROM JANUARY 1, 1999 (INCEPTION) TO MARCH 31, 2011
				As Previously Reported			Effect of Restatement				As restated
Change in warrant liability expense	$			-	$		82,743	$			82,743
Net (loss) income for the period	$			(464,761)	$		82,743	$			(382,018)
Accretion of preferred stock to redemption value	$			-	$		(456,170)	$			(456,170)
Net loss attributable to common stockholders	$			(464,761)	$		(373,427)	$			(838,188)

STATEMENT OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 2011
		As Previously Reported					Effect of Restatement				As restated
Net (loss) income	$	(22,012)			$		28,956	$			6,944
Change in warrant liability	$	-			$		(28,956)	$			(28,956)
Net cash used in operating activities	$	(8,625)			$		-	$			(8,625)

STATEMENT OF CASH FLOWS FROM JANUARY 1, 1999 (INCEPTION) TO MARCH 31, 2011
		As Previously Reported					Effect of Restatement				As restated
Net (loss) income	$	(464,761)			$		82,743	$			(382,018)
Change in warrant liability	$	-			$		(82,743)	$			(82,743)
Net cash used in operating activities	$	(465,165)			$		-	$			(465,165)