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STOCKHOLER' EQUITY (DEFICIT)

12 Months Ended

Dec. 30, 2011

Issuance of Common Stock: In the fiscal year ending December 30, 2011, we issued 2,750,000 shares of common stock for the exercise of warrant at a price of $0.08 per share.

We issued 192,000 shares of common stock valued at approximately $72,000 to our investor relations firm as partial payment for their investor relations fees. The average price of the shares issued was $0.37. The shares were recorded as an expense when earned and issuable.

We issued 40,000 shares of common stock to two employees for compensation valued at $15,600.

In the fiscal year ended December 31, 2010, we issued 5,250,000 shares of common stock in a private placement at a price of $0.08 per unit. Units consisted of one share of common stock and one-half of one common stock purchase warrant. Our CEO purchased 2,750,000 of those units. A detail of the warrant term and exercise price follows:

Exercise Price		Ending Period of Exercise Price
$ 0.08		March 15, 2011
$ 0.16		March 15, 2012
$ 0.32		March 15, 2013
$ 0.50		March 15, 2014
$ 1.00		March 15, 2015

We issued 250,000 shares of common stock to our former CFO pursuant to an employment agreement dated October 20, 2010, at a price of $0.32 per share.

We issued 10,000,000 shares of common stock to a lender and its affiliates in connection with an amendment agreement relating to a short-term note payable. These shares were valued at $1.5 million, based on the closing price of our common stock on March 24, 2010.

We issued 240,000 shares of common stock to our investor relations firm as partial payment for their investor relations fees. The average price of the shares issued was $0.23. The shares were recorded as an expense when earned and issuable.

We issued 400,000 shares of common stock to our CFO; 250,000 shares were issued for the exercise of warrants he held and 150,000 shares were issued as compensation. The warrants and common stock were awarded as employment compensation. We determined the warrants had a nominal fair value as issuance. The warrants were exercised at a price of $0.08 on October 1, 2009 but were not issued until March 15, 2010.

We issued 1,271,446 shares to a former Director and owner of our Post Falls, ID office building for rent during the year. The shares were issued at an average market price of $0.13 and were expensed in the period in which rent was due.

The following warrants for our common stock were issued and outstanding on December 31, 2010 and December 25, 2009, respectively:

	2011	2010
Warrants outstanding at beginning of year	14,887,803	10,762,803
Issued	-	4,125,000
Exercised	(2,750,000)	-
Cancelled	-	-
Warrants outstanding at end of year	12,137,803	14,887,803

A detail of warrants outstanding at December 30, 2011 is as follows:	Number	Expiration Date
Exercisable at $1.50 per share	250,000	4/14/2012
Exercisable at $1.25 per share	6,312,803	6/20/2013
Exercisable at $0.08 per share	4,200,000	4/1/2014
Exercisable at between $0.16 and $1.00 per share	1,375,000	4/15/12 to 4/15/15
	12,137,803

The fair value of outstanding warrants defined as a derivative instrument per the Accounting Standards Codification are estimated each period using the Black-Scholes pricing model. The change in fair value is presented as a line item in our Statement of Operations and amounted to approximately $179,000 for the fiscal year ending December 30, 2011.