PRIVATE PLACEMENT OFFERING (Tables)

12 Months Ended

Dec. 31, 2012

Private Placement Offering Tables

Allocated to the instruments as follows

The proceeds of $2,000,100 were allocated to the instruments as follows:

Warrant liabilities	$	141,027
Redeemable and Convertible Preferred Stock		1,388,367
Common Stock		470,706
Total allocated gross proceeds:	$	2,000,100

Warrants

As of December 31, 2012 and 2011, warrants to purchase 6,909,000 shares were outstanding, having exercise prices at $0.15 and an expiration date for December 31, 2011 of September 6, 2012 and an expiration date for December 31, 2012 of September 6, 2014.

	2012				2011
	Number of warrants		Weighted average exercise price		Number of warrants		Weighted average exercise price
Balance at January 1		6,909,000	$	0.15		6,909,000	$	0.15
Issued during the period		-	$	-		-	$	-
Exercised during the period		-	$	-		-	$	-
Expired during the period		-	$	-		-	$	-
Balance at December 31		6,909,000	$	0.15		6,909,000	$	0.15

Summarizes the fair value of the warrants liabilities

The following table summarizes the fair value of the warrants liability as of the balance sheet date:

Fair values	December 31, 2012		December 31, 2011		At transaction  date
September 7, 2007 financing	$	-	$	70,991	$	141,027

Assumptions for the valuation of the fair value of the warrant liability

The following are the assumptions for the valuation of the fair value of the warrant liability:

	December 31, 2012		December 31, 2011			At transaction  date
Warrants outstanding		-		6,909,000			6,909,000
Exercise price		-	$	0.15		$	0.15
Annual dividend yield		-		0.03	%		4.01	%
Expected life (years)		-		0.69			5
Risk-free interest rate		-		0.12	%		4.14	%
Expected volatility		-		77	%		53.94	%