10-Q/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q/A

Amendment No. 1

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2011

or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from  _________________________  to

Commission File Number: 000-54361

BioDrain Medical, Inc.

(Exact name of registrant as specified in its charter)

Minnesota	33-1007393
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)
2060 Centre Pointe Blvd., Suite 7,	Mendota Heights, MN 55120
(Address of principal executive offices)	(Zip Code)

651-389-4800

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

x Yes  ¨ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

x Yes  ¨No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, anon-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ¨	Accelerated filer ¨
Non-accelerated filer ¨ (Do not check if a smaller reporting company)	Smaller reporting company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

o Yes x No

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. As of August 3, 2011, the registrant had 27,811,630 shares of common stock, par value $.01 per share, outstanding.

Explanatory Note

The purpose of this Amendment No. 1 to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2011, as filed with the Securities and Exchange Commission on August 15, 2011, is to furnish the interactive data files in accordance with Rule 405 of Regulation S–T.

This Form 10-Q/A should be read in conjunction with the original Form 10-Q, which continues to speak as of the date of the Form 10-Q. Except as specifically noted above, this Form 10-Q/A does not modify or update disclosures in the original Form 10-Q. Accordingly, this Form 10-Q/A does not reflect events occurring after the filing of the Form 10-Q or modify or update any related or other disclosures.

ITEM 6. Exhibits

Exhibit No.	Description
3.1 (1)	Articles of Incorporation, as amended.
3.2 (1)	Bylaws, As Amended.
31.1(2)	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2(2)	Certification of Principal Financial and Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1(2)	Certification of Principal Executive Officer and Principal Financial and Accounting Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*	XBRL Instance Document.
101.SCH*	XBRL Taxonomy Extension Schema.
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase.
101.DEF*	XBRL Taxonomy Extension Definition Linkbase.
101.LAB*	XBRL Taxonomy Extension Label Linkbase.
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase.

* In accordance with Regulation S-T, the XBRL-related information in Exhibit 101 to this Quarterly Report on Form 10-Q/A shall be deemed “furnished” and not “filed.”

(1) Filed on March 31, 2011 as an exhibit to our Annual Report on Form 10-K, and incorporated herein by reference.

(2) Filed on August 15, 2011 as an exhibit to our Quarterly Report on Form 10-Q, and incorporated herein by reference.

SIGNATURES:

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	BIODRAIN MEDICAL, INC.
Date: August 19, 2011	By:	/s/ Kevin R. Davidson
		President, Chief Executive Officer and
		Chief Financial Officer
		(Principal Executive Officer and
		Principal Financial and Accounting Officer)

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CONDENSED BALANCE SHEETS [Parenthetical] (USD $)	Jun. 30, 2011	Dec. 31, 2010
Accumulated discounts on Current portion of convertible debt (in dollars)	$ 64,388	$ 0
Accumulated discounts on Long-term debt and convertible debt (in dollars)	$ 36,380	$ 109,310
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	80,000,000	80,000,000
Common stock, shares outstanding	23,583,057	14,002,290

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CONDENSED STATEMENTS OF OPERATIONS (USD $)	3 Months Ended		6 Months Ended		111 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011
Revenue	$ 2,374		$ 2,374	$ 288	$ 18,399
Cost of goods sold	1,820		1,820	140	8,960
Gross margin	554	0	554	148	9,439
General and administrative expense	272,870	438,481	585,824	1,150,616	6,488,716
Operations expense	175,530	44,924	267,121	109,659	1,444,993
Sales and marketing expense	68,534	67,598	88,258	140,650	744,027
Interest expense	57,913	59,428	115,085	73,707	551,818
Loss (gain) on valuation of equity-linked financial instruments	(186,187)	(563,865)	(190,915)	(676,414)	(973,219)
Total expense	387,940	46,566	865,373	798,218	8,256,335
Net income (loss) available to common shareholders	$ (387,386)	$ (46,566)	$ (864,819)	$ (798,070)	$ (8,246,896)
Loss per common share basic and diluted (in dollars per share)	$ (0.02)	$ 0	$ (0.04)	$ (0.07)	$ (1.83)
Weighted average shares used in computation, basic and diluted (in shares)	22,669,526	12,353,500	19,630,580	12,056,722	4,505,163

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DOCUMENT AND ENTITY INFORMATION	6 Months Ended
	Jun. 30, 2011	Aug. 03, 2011
Entity Registrant Name	BioDrain Medical, Inc.
Entity Central Index Key	0001446159
Entity Filer Category	Smaller Reporting Company
Trading Symbol	bior
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		27,811,630
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2011
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2011

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INCOME TAXES

6 Months Ended

Jun. 30, 2011

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

NOTE 5 – INCOME TAXES

The provision for income taxes consists of an amount for taxes currently payable and a provision for tax consequences deferred to future periods. Deferred income taxes are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

There is no income tax provision in the accompanying statement of operations due to the cumulative operating losses that indicate a 100% valuation allowance for the deferred tax assets and state income taxes is appropriate.

Federal and state income tax return operating loss carryovers, as of June 30, 2011, were approximately $7,632,000 and will begin to expire in 2017.

The valuation allowance has been recorded due to the uncertainty of realization of the benefits associated with the net operating losses. Future events and changes in circumstances could cause this valuation allowance to change.

The components of deferred income taxes at June 30, 2011 and December 31, 2010 are as follows:

	June 30, 2011		December 31, 2010
Deferred Tax Asset:
Net Operating Loss	$	1,781,000	$	1,579,000
Other		49,000		56,000
Total Deferred Tax Asset		1,830,000		1,635,000
Less Valuation Allowance		1,830,000		1,635,000
Net Deferred Income Taxes	$	—

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RELATED PARTY

6 Months Ended

Jun. 30, 2011

Related Party Transactions [Abstract]

Related Party Transactions Disclosure [Text Block]

NOTE 10 – RELATED PARTY

The Company entered into agreements, in 2008, with our Chairman of the Board, Lawrence Gadbaw, and in 2009 with board member, Peter Morawetz, to pay Mr. Gadbaw $25,000 and Mr. Morawetz $30,000 upon the Company raising $3 million in new equity. Mr. Gadbaw will also be paid the balance, if any, due under his separation agreement from 2008. This amount was $46,000 upon signing the agreement in 2008, is payable at $2,000 per month, and $12,000 remains in accounts payable as of June 30, 2011. Mr. Morawetz will also receive a stock option for 75,000 shares at $.35 per share and Mr. Gadbaw will receive a stock option for 160,000 shares at $.35 per share upon the Company raising $3 million.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Jun. 30, 2011

Accounting Policies [Abstract]

Significant Accounting Policies [Text Block]

NOTE 1 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations and Continuance of Operations

BioDrain Medical, Inc. (the "Company") was incorporated under the laws of the State of Minnesota in 2002. The Company is developing an environmentally safe system for the collection and disposal of infectious fluids that result from surgical procedures and post-operative care.

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. The Company has suffered recurring losses from operations and has a shareholders’ deficit. These factors raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Management hired an investment banker in 2010 to raise an additional $3-$5 million in new equity. The banker was unable to raise the expected $500,000 by September 30, 2010 and the balance within 3 months, but the Company raised approximately $229,000 in equity and $605,000 in convertible debt in 2010 and $628,000 in equity and $213,000 in convertible debt in 2011through alternative means. Although the Company's ability to raise all of this new capital is in substantial doubt it did receive approximately $1,725,000 through private placements of equity and convertible debt in 2010 and 2011, and the Company's April 1, 2009 510(k) clearance from the FDA to authorize the Company to market and sell its FMS products is being received very positively. The Company engaged a new investment banker in May 2011 to raise approximately $2 million and if the Company is successful in raising at least $2 million in new equity it will have sufficient capital to operate its business and execute its business plan for at least the next 12 months. If the Company raises the additional capital by issuing additional equity securities, its existing shareholders will likely experience substantial dilution.

Recent Accounting Developments

Issued in January 2010, ASU Update 2010-06, Fair Value Measures and Disclosures, provides amendments to Topic 820 that will provide more robust disclosures about (1) the different classes of assets and liabilities measured at fair value, (2) the valuation techniques and inputs used, (3) the activity in level 3 fair value measurements, and (4) the transfers between levels 1, 2, and 3. ASC Update 2010-06 is effective for fiscal years beginning after December 15, 2010. The Company's adoption of ASU Update 2010-06 did not have a material effect to its financial statements or its disclosures.

In the first quarter 2011 we adopted new guidance on separating consideration in multiple-deliverable arrangements. The guidance addresses how to determine whether an arrangement involving multiple deliverables contains more than one unit of accounting and how the consideration should be allocated among the separate units of accounting. The adoption of this guidance did not have a material impact on our financial statements.

We reviewed all other significant newly issued accounting pronouncements and determined they are either not applicable to our business or that no material effect is expected on our financial position and results of our operations.

Valuation of Intangible Assets

We review identifiable intangible assets for impairment in accordance with ASC 360-Property Plan and Equipment ("ASC 360"), whenever events or changes in circumstances indicate the carrying amount may not be recoverable. Our intangible assets are currently solely the costs of obtaining trademarks and patents. Events or changes in circumstances that indicate the carrying amount may not be recoverable include, but are not limited to, a significant change in the medical device marketplace and a significant adverse change in the business climate in which we operate. If such events or changes in circumstances are present, the undiscounted cash flows method is used to determine whether the intangible asset is impaired. Cash flows would include the estimated terminal value of the asset and exclude any interest charges. If the carrying value of the asset exceeds the undiscounted cash flows over the estimated remaining life of the asset, the asset is considered impaired, and the impairment is measured by reducing the carrying value of the asset to its fair value using the discounted cash flows method. The discount rate utilized is based on management's best estimate of the related risks and return at the time the impairment assessment is made.

Our accounting estimates and assumptions bear various risks of change, including the length of the current recession facing the United States, the expansion of the slowdown in consumer spending in the U.S. medical markets despite the early expressed opinions of financial experts that the medical market would not be as affected as other markets and failure to gain acceptance in the medical market.

Accounting Policies and Estimates

The presentation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Presentation of Taxes Collected from Customers

Sales taxes are imposed on the Company’s sales to nonexempt customers. The Company collects the taxes from customers and remits the entire amounts to the governmental authorities. The Company’s accounting policy is to exclude the taxes collected and remitted from revenues and expenses.

Shipping and Handling

Shipping and handling charges billed to customers are recorded as revenue. Shipping and handling costs are recorded within cost of goods sold on the statement of operations.

Advertising

Advertising costs are expensed as incurred. There were no advertising expenses in the three months and six months ended June 30, 2011 and June 30, 2010.

Research and Development

Research and development costs are charged to operations as incurred. There were no research and development expenses in the three months and six months ended June 30, 2011 and June 30, 2010.

Revenue Recognition

The Company recognizes revenue in accordance with the SEC’s Staff Accounting Bulletin No. 101, Revenue Recognition in Financial Statements , as amended by Staff Accounting Bulletin No. 104 (together, SAB 101), and ASC 605 Revenue Recognition.

Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed and determinable and collectability is probable. Delivery is considered to have occurred upon either shipment of the product or arrival at its destination based on the shipping terms of the transaction. The Company standard terms specify that shipment is FOB BioDrain and the Company will, therefore recognize revenue upon shipment in most cases. This revenue recognition policy applies to shipments of the FMS units as well as shipments of cleaning solution kits. When these conditions are satisfied, the Company recognizes gross product revenue, which is the price it charges generally to its customers for a particular product. Under the Company’s standard terms and conditions there is no provision for installation or acceptance of the product to take place prior to the obligation of the customer. The customer’s right of return is limited only to the Company’s standard warranty whereby the Company replaces or repairs, at its option, and it would be very rare that the unit or significant quantities of cleaning solution kits may be returned. Additionally, since the Company buys both the FMS units and cleaning solution kits from “turnkey” suppliers the Company would have the right to replacements from the suppliers if this situation should occur.

Receivables

Receivables are reported at the amount the Company expects to collect on balances outstanding at fiscal year end. The Company has determined there will be no losses on balances outstanding at June 30, 2011.

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation of property and equipment is computed using the straight-line method over the estimated useful lives of the respective assets. Estimated useful asset life by classification is as follows:

	Years
Computers and office equipment	3
Furniture and fixtures	5

Upon retirement or sale, the cost and related accumulated depreciation are removed from the balance sheet and the resulting gain or loss is reflected in operations. Maintenance and repairs are charged to operations as incurred.

Intangible Assets

Intangible assets consist of patent costs. These assets are not subject to amortization until the property patented is in production. The assets are reviewed for impairment annually, and impairment losses, if any, are charged to operations when identified. No impairment losses have been identified by management.

Income Taxes

The Company accounts for income taxes in accordance with ASC 740- Income Taxes(“ASC 740”) . Under ASC 740, deferred tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities and net operating loss and credit carry forwards using enacted tax rates in effect for the year in which the differences are expected to impact taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized.

The Company reviews income tax positions expected to be taken in income tax returns to determine if there are any income tax uncertainties. The Company recognizes tax benefits from uncertain tax positions only if it is more likely than not that the tax positions will be sustained on examination by taxing authorities, based on technical merits of the positions. The Company has identified no income tax uncertainties.

Tax years subsequent to 2006 remain open to examination by federal and state tax authorities.

Patents and Intellectual Property

The Company, in June 2008, completed and executed an agreement to secure exclusive ownership of the patent from an inventor, Marshall Ryan. Mr. Ryan received a combination of cash and warrants, and he will receive a 4% royalty on FMS (the Product) sales for the life of the patent. At the signing of the agreement, Mr. Ryan received $75,000 in exchange for the exclusive assignment of the patent. In addition, on June 30, 2009, Mr. Ryan, through his Mid-State Stainless, Inc. entity, was entitled to receive $100,000 as payment (currently recorded as an account payable with the Company) for past research and development activities. Should Mr. Ryan be utilized in the future for additional product development activities, he will be compensated at a rate of ninety five dollars ($95.00) per hour.

Mr. Ryan also received a warrant, with immediate vesting, to purchase 150,000 shares of the Company's common stock at a price of $.35 per share. The warrant has a term of five years, ending on June 30, 2013 and is assigned a value of $28,060 using a Black-Scholes formula and this amount was expensed as consulting expense in 2008 using a 5-year expected life, a 3.73% risk free interest rate, an expected 59% volatility and a zero dividend rate. Should there be a change in control of the Company (defined as greater than 50% of the Company’s outstanding stock or substantially all of its assets being transferred to one independent person or entity), Mr. Ryan will be owed a total of $2 million to be paid out over the life of the patent if the change in control occurs within 12 months of the first sale of the product; or $1 million to be paid out over the life of the patent if the change in control occurs between 12 and 24 months of the first sale of the product; or $500,000 to be paid out over the life of the patent if the change in control occurs between 24 and 36 months of the first sale of the product. There will be no additional payment if a change in control occurs more than 36 months after the first sale of the product.

Subsequent Events

The Company has evaluated subsequent events through the date of this filing. The Company does not believe there are subsequent events that require disclosure.

Interim Financial Statements

The Company has prepared the unaudited interim financial statements and related unaudited financial information in the footnotes in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial statements. These interim financial statements reflect all adjustments consisting of normal recurring accruals, which, in the opinion of management, are necessary to present fairly the Company’s financial position, the results of its operations and its cash flows for the interim periods. These interim financial statements should be read in conjunction with the annual financial statements and the notes thereto contained in the Form 10-K filed with the SEC on March 31, 2011. The nature of the Company’s business is such that the results of any interim period may not be indicative of the results to be expected for the entire year.

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LONG-TERM DEBT

6 Months Ended

Jun. 30, 2011

Long Term Debt [Abstract]

Long-term Debt [Text Block]

NOTE 7 – LONG-TERM DEBT

Long-term debt is as follows:

	June 30, 2011		December 31, 2010
Note payable to bank in monthly installments of $1,275/including variable interest at 2% above the prevailing prime rate (3.25% at December 31, 2010) to August 2011 when the remaining balance is payable. The note is personally guaranteed by former executives of the Company.	$	2,805	$	10,267
Notes payable to two individuals, net of discounts of $5,366 and $9,390 with interest only payments at 12% to March 2012 when the remaining balance is payable. The notes are convertible into 285,715 shares of common stock in the Company at $.35 per share.		94,634		90,610
Note payable issued on October 26, 2009 to the parents of one the Company's officers, net of a discount of $4,822 and $12,360 discount, with interest at 8% to March 31, 2012 and convertible into shares of common stock at $.35 per share.		95,178		87,640
Notes payable issued to two individuals in January, 2010. The notes bear interest at 8%, mature March 31, 2012 and are convertible into shares of common stock, at 50% of the weighted average closing bid price over any 10 consecutive days of trading.		100,000		100,000
Note payable issued on June 12, 2010 to the parents of one of the Company's officers, net of a discount of $41,280 and $67,629. The note bears interest at 12% to March 31, 2012, and is convertible into common stock at $.18 per share.		158,720		132,371
Note payable issued on August 2, 2010 to an institutional investor.  The note bears interest at 8%, matures May 4, 2011 and is convertible into common stock at 50% of the average of the three lowest closing prices in any 10 day trading period. $20,000 was converted in the three months ended March 31, 2011 and $30,000, plus accrued interest, was converted in the three months ended June 30, 2011.		-		50,000
Note payable issued on June 14, 2011 to an institutional investor.  The note bears interest at 8%, matures May 4, 2011 and is convertible into common stock at 50% of the average of the five lowest closing prices in any 10 day trading period.		63,000		-
Note payable issued on September 16, 2010 to an institutional investor.  The note bears interest at 10%, matures March 15, 2012 and is convertible into common stock at $.18 per share.		100,000		100,000
Note payable issued on December 23, 2010 to the parents of one of our officers, net of a discount of $5,402 and $7,229.  The note bears interest at 12%, matures December 23, 2012 and is convertible into common stock at $.084 per share.		11,398		9,571
Note payable issued December 31, 2010 to a law firm that accepted this note in full payment of their past due legal fees.  The Note bears interest at 6%, matures December 31, 2014 and is convertible into common stock at $.15 per share.		457,300		457,300
Note payable issued on December 23, 2010 to a private investor. The Note matures April 30, 2011 and bears interest at 10%.		6,000		6,000
Note payable issued on September 21, 2010 to the parents of one of our officers, net of a discount of $7,517 and $12,702.  The note bears interest at 12%, matures December 23, 2012 and is convertible into common stock at $.18 per share.		24,483		19,298
Notes payable issued in January 2011 to three individuals, net of a debt discount of $36,381. The notes bear interest at 10%, have a 24 month term and are convertible into common stock at $0.084 to $0.10 per share.		113,619		—
Note payable issued January 1, 2011 to a law firm that accepted this note in full payment of their past due legal fees.  The Note bears interest at 6%, matures December 31, 2014 and is convertible into common stock at $.15 per share.		89,300		—
Total	$	1,316,435	$	1,063,056
Less amount due within one year		656,217		66,267
Long-Term Debt	$	660,218	$	996,789

Cash payments for interest were $187 for the six months ended June 30, 2011 and $556 for the six months ended June 30, 2010.

Principal payments required during the 12 month periods ended June 30:

2012	$	730,605
2013	$	150,000
2014	$	0
2015	$	546,600

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RENT OBLIGATION

6 Months Ended

Jun. 30, 2011

Leases [Abstract]

Leases of Lessee Disclosure [Text Block]

NOTE 8 – RENT OBLIGATION

The Company leases its principal office under a non-cancelable lease that extends five years. In addition to rent, the Company pays real estate taxes and repairs and maintenance on the leased property. Rent expense was $24,293 in the six months ended June 30, 2011 and $24,187 in the six months ended June 30, 2010.

The Company’s rent obligation for the years 2011 to 2015 is as follows:

2011	$	30,000
2012	$	31,000
2013	$	26,000
2014	$	0
2015	$	0

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CONVERTIBLE DEBENTURE

6 Months Ended

Jun. 30, 2011

Cash Flow, Noncash Investing and Financing Activities Disclosure [Abstract]

Cash Flow, Supplemental Disclosures [Text Block]

NOTE 6 - CONVERTIBLE DEBENTURE

The Company issued a convertible debenture to Andcor Companies, Inc. (“Andcor”) with principal of $10,000 and interest at 10.25% that originally matured in 2007. The debenture is convertible into shares of the Company’s common stock at the lower of $0.90 per share or the price per share at which the next equity financing agreement is completed, and is now re-set to $.35 per share. The convertible debenture has not yet been paid, but the maturity of the note was extended, in May 2010, to March 31, 2012.

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STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT) [Parentheticals] (USD $)	6 Months Ended	9 Months Ended	12 Months Ended
	Jun. 30, 2011	Dec. 31, 2002	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2008	Dec. 31, 2007	Dec. 31, 2006	Dec. 31, 2005	Dec. 31, 2004	Dec. 31, 2003
Issuance of common stock to Founders , par value		$ 0.0167
Issuance of common stock new issues, par value		$ 1.67			$ 0.35
Issuance of common stock, compensation for loan guarantees by management, par value								$ 0.0167		$ 0.0167
Issuance of common stock, investment including finders fee, par value										$ 1.67
Issuance of common stock,payment of patent legal fees, par value									$ 0.0167
Issuance of common stock, vendor contractual consideration,par value							$ 0.0167
Issuance of common stock, employment agreements, par value							$ 0.0167
Issuance of common stock, investment, par value							$ 1.67
Issuance of common stock, conversion of convertible securities, par value				$ 0.35		$ 1.67
Issuance of common stock, investor relations, par value					$ 0.35
Issuance of common stock, under PMM in April 2009, par value				$ 0.5
Issuance of common stock, under PPM in May 2009, par value				$ 0.5
Issuance of common stock, under PPM in June 2009, par value				$ 0.5
Issuance of common stock, under PPM in August 2009, par value				$ 0.5
Issuance of common stock, under PPM in September 2009, par value				$ 0.5
Issuance of common stock to directors, management and consultant in August 2009, par value				$ 0.5
Issuance of common stock to finder in September 2009, par value				$ 0.5
Issuance of common stock, under PPM in November 2009, par value				$ 0.5
Issuance of common stock upon conversion of debt and interest, par value				$ 0.27
Issuance of common stock, under PPM in March 2010, par value			$ 0.5
Issuance of common stock to consultants for IR and consulting, par value			$ 0.5
Issuance of common stock, under PPM in April 2010, par value			$ 0.5
Issuance of common stock to consultants, in May 2010, par value			$ 0.5
Issuance of common stock to investors as a penalty for late registration, par value			$ 0.5
Issuance of common stock to investors as a penalty for late registration, Number of shares			4,552,862
Issuance of common stock, under PPM in September 2010, par value			$ 0.1
Issuance of common stock to consultants, in third quarter, par value			$ 0.22
Issuance of common stock, upon exercise of warrants			$ 0.135
Issuance of common stock, to directors as compensation			$ 0.15
Issuance of common stock, under PPM one in first quarter	$ 0.075
Issuance of common stock, under PPM two in first quarter	$ 0.085
Issuance of common stock, under PPM three in first quarter	$ 0.09
Issuance of common stock, under PPM four in first quarter	$ 0.10
Issuance of common stock, under PPM one in second quarter	$ 0.085
Issuance of common stock, under PPM two in second quarter	$ 0.07

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DEVELOPMENT STAGE OPERATIONS

6 Months Ended

Jun. 30, 2011

Development Stage Enterprises [Abstract]

Development Stage Enterprise General Disclosures [Text Block]

NOTE 2 – DEVELOPMENT STAGE OPERATIONS

The Company was formed April 23, 2002. Since inception to August 3, 2011, 27,811,630 shares of common stock have been issued between par value and $1.67. Operations since incorporation have been devoted to raising capital, obtaining financing, development of the Company’s product, and administrative services.

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STOCKHOLDERS' DEFICIT, STOCK OPTIONS AND WARRANTS

6 Months Ended

Jun. 30, 2011

Stockholders' Equity Note [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

NOTE 3 – STOCKHOLDERS’ DEFICIT, STOCK OPTIONS AND WARRANTS

In connection with the financing completed in October 2008, the Company has effected two reverse stock splits, one on June 6, 2008 and another on October 20, 2008. In accordance with SAB Topic 4C, all stock options and warrants and their related exercise prices are stated at their post-reverse stock split values.

The Company has an equity incentive plan, which allows issuance of incentive and non-qualified stock options to employees, directors and consultants of the Company, where permitted under the plan. The exercise price for each stock option is determined by the board of directors. Vesting requirements are determined by the board of directors when granted and currently range from immediate to three years. Options under this plan have terms ranging from three to ten years.

Accounting for share-based payment

The Company applies ASC 718- Compensation-Stock Compensation ("ASC 718"). Under ASC 718 stock-based employee compensation cost is recognized using the fair value based method for all new awards granted after January 1, 2006 and unvested awards outstanding at January 1, 2006. Compensation costs for unvested stock options and non-vested awards that were outstanding at January 1, 2006, are being recognized over the requisite service period based on the grant-date fair value of those options and awards as previously calculated under SFAS 123 for pro forma disclosures, using a straight-line method. We elected the modified-prospective method under which prior periods are not retroactively restated.

ASC 718 requires companies to estimate the fair value of stock-based payment awards on the date of grant using an option-pricing model or other acceptable means. The Company uses the Black-Scholes option valuation model which requires the input of significant assumptions including an estimate of the average period of time employees will retain vested stock options before exercising them, the estimated volatility of th Company's common stock price over the expected term, the number of options that will ultimately be forfeited before completing vesting requirements, the expected dividend rate and the risk-free interest rate. Changes in the assumptions can materially affect the estimate of fair value of stock-based compensation and, consequently, the related expense recognized. The assumptions the Company uses in calculating the fair value of stock-based payment awards represent the Company's best estimates, which involve inherent uncertainties and the application of management's judgment. As a result, if factors change and the Company uses different assumptions, the Company's equity-based compensation expense could be materially different in the future.

Since the Company's common stock has no significant public trading history, and the Company has experienced no significant option exercises in its history, the Company is required to take an alternative approach to estimating future volatility and estimated life and the future results could vary significantly from the Company's estimates. The Company compiled historical volatilities over a period of 2-7 years of 15 small-cap medical companies traded on major exchanges and 10 mid-range medical companies on the OTC Bulletin Board and combined the results using a weighted average approach. In the case of ordinary options to employees the Company determined the expected life to be the midpoint between the vesting term and the legal term. In the case of options or warrants granted to non-employees the Company estimated the life to be the legal term unless there was a compelling reason to make it shorter.

When an option or warrant is granted in place of cash compensation for services the Company deems the value of the service rendered to be the value of the option or warrant. In most cases, however, an option or warrant is granted in addition to other forms of compensation and its separate value is difficult to determine without utilizing an option pricing model. For that reason the Company also uses the Black-Scholes-Merton option-pricing model to value options and warrants granted to non-employees, which requires the input of significant assumptions including an estimate of the average period the investors or consultants will retain vested stock options and warrants before exercising them, the estimated volatility of the Company's common stock price over the expected term, the number of options and warrants that will ultimately be forfeited before completing vesting requirements, the expected dividend rate and the risk-free interest rate. Changes in the assumptions can materially affect the estimate of fair value of stock-based consulting and/or compensation and, consequently, the related expense recognized.

Since the Company has limited trading history in its stock and no first-hand experience with how its investors and consultants have acted in similar circumstances, the assumptions the Company uses in calculating the fair value of stock-based payment awards represent its best estimates, which involve inherent uncertainties and the application of management's judgment. As a result, if factors change and the Company uses different assumptions, the Company's equity-based consulting and interest expense could be materially different in the future.

Valuation and accounting for options and warrants

The Company determines the grant date fair value of options and warrants using a Black-Scholes-Merton option valuation model based upon assumptions regarding risk-free interest rate, expected dividend rate, volatility and estimated term. For grants during 2008, the Company used a 2.0 to 4.5% risk-free interest rate, 0% dividend rate, 53-66% volatility and estimated term of 2.5 to 7.5 years. Values computed using these assumptions ranged from $.102 per share to $.336 per share. Warrants or options awarded for services rendered are expensed over the period of service (normally the vesting period) as compensation expense for employees or an appropriate consulting expense category for awards to consultants and directors. Warrants granted in connection with a common equity financing are included in shareholders’ equity, provided that there is no re-pricing provision that requires they be treated as a liability (See Note 10) and warrants granted in connection with a debt financing are treated as a debt discount and amortized using the interest method as interest expense over the term of the debt. Warrants issued in connection with the $100,000 convertible debt that closed March 1, 2007 created a debt discount of $40,242 that is being amortized as additional interest over its 5-year term.

Warrants issued in connection with the $170,000 in convertible “bridge” debt that closed in July 2007 created a calculated debt discount of $92,700 that was fully expensed over its loan term that matured April 30, 2008. The Company issued $100,000 in convertible debt in October 2009 and issued a warrant, in connection with the debt, for 200,000 shares of common stock at $.65 per share. The Company determined that the warrant had an initial value of $30,150 that was treated as a debt discount and is being amortized as additional interest expense over the 24-month term of the note. The Company also issued $200,000 in convertible debt in June 2010 and issued a warrant, in connection with the debt, to purchase 1,111,112 shares at $.46 per share.

The Company determined that the value of the June 2010 warrant is $96,613.This value is treated as a debt discount and amortized as additional interest expense over the 22-month term of the note. The Company also issued $32,000 in convertible debt in September, 2010 and issued a warrant to purchase 320,000 shares at $.46 per share.  The Company determined that this warrant has a value of $15,553 that was treated as a debt discount and amortized as additional interest expense over the 18 month term of the note. In January, 2011 the Company issued three convertible notes of $50,000 each and also issued warrants to purchase 1,595,239 common shares at $.20 per share. The value of the warrants was determined to be $47,908 and this amount is being treated as a debt discount and amortized as additional interest expense over the 24 month term of the notes.

During June 2011 the Company issued stock options to buy 300,000 shares each at $.01 per share to two employees and a consultant.  The options have a term of ten years and vested immediately.  The estimated life of the options was determined to be five years for the employees and ten years for the consultant.  The Company determined the value of these options, using the Black-Scholes valuation model, to be $65,204 and this amount was expensed in June 2011.  

The Company also issued warrants, with a three year term, to purchase 1,338,236 shares at $.12 to $.17 per share.  The value of the warrants was determined to be $20,694 and that value was initially added to liability for Equity-Linked Financial Instruments and re-valued at the end of June 2011 to be $19,740.  The decline in the liability was included in the total gain on valuation of equity linked financial instruments during the quarter.

The following summarizes transactions for stock options and warrants for the periods indicated:

Stock Options (1)						Warrants (1)
	Number of Shares			Average Exercise Price			Number of Shares			Average Exercise Price
Outstanding at December 31, 2005		17,956		$	1.67			20,950		$	2.62
Issued		23,942			1.67			71,826			0.85
Outstanding at December 31, 2006		41,898			1.67			92,776			1.25
Issued		5,984			1.67			28,502			0.35
Outstanding at December 31, 2007		47,882			1.67			121,278			1.04
Issued		1,243,292			0.20			5,075,204			0.45
Expired								(11,971	)		3.76
Outstanding at December 31, 2008		1,291,174			0.26			5,184,511			0.45
Issued		205,000			0.37			2,188,302			0.65
Outstanding at December 31, 2009		1,496,174			0.27			7,372,813			0.49
Issued		2,210,000			0.17			3,435,662			0.34
Expired		(207,956	)		0.43			(8,979	)		1.67
Exercised								(128,571	)		0.46
Outstanding at December 31, 2010		3,498,218			0.19			10,670,925			0.44
Issued		900,000			0.10			11,372,691			0.16
Expired		(60,000	)		0.35			(1,702,146)			0.46
Outstanding at June 30, 2011		4,338,218		$	0.15			20,341,470		$	0.28

(1) Adjusted for the reverse stock splits in total at June 6, 2008 and October 20, 2008.

At June 30, 2011, 4,338,218 stock options are fully vested and currently exercisable with a weighted average exercise price of $.15 and a weighted average remaining term of 7.64 years. There are 20,341,470 warrants that are fully vested and exercisable. Stock based compensation recognized in the six months ended June 30, 2011 was $65,204 and was $82,000 in the six months ended June 30, 2010.

The following summarizes the status of options and warrants outstanding at June 30, 2011:

Range of Exercise Prices		Shares		Weighted Average Remaining Life
Options
$	0.01		1,443,292		8.82
$	0.15		2,060,000		9.10
$	0.35		775,000		2.06
$	0.50		30,000		1.38
$	1.67		29,926		0.52
Total			4,338,218
Warrants
$	0.01		200,000		4.44
$	0.02		71,826		2.95
$	0.075		400,000		2.64
$	0.10		1,700,000		1.86
$	0.12		500,000		2.21
$	0.15		5,333,334		2.84
$	0.16		500,000		2.77
$	0.17		1,544,118		2.99
$	0.18		200,000		2.61
$	0.20		2,445,239		2.55
$	0.35		998,597		0.99
$	0.46		4,572,893		1.31
$	0.65		1,839,550		1.17
$	1.67		35,913		0.45
Total			20,341,470

Stock options and warrants expire on various dates from July 2011 to November 2020.

Under the terms of the Company's agreement with investors in the October 2008 financing, 1,920,000 shares of common stock were the maximum number of shares allocated to the Company's existing shareholders at the time of the offering (also referred to as the original shareholders or the "Founders"). Since the total of the Company's fully-diluted shares of common stock was greater than 1,920,000 shares, in order for the Company to proceed with the offering, the board of directors approved a reverse stock split of 1-for-1.2545. After this split was approved, additional options and warrants were identified, requiring a second reverse stock split in order to reach the 1,920,000 shares. The second reverse stock split on the reduced 1-for-1.2545 balance was determined to be 1-for 1.33176963. Taken together, if only one reverse stock were performed, the number would have been a reverse stock split of 1-for 1.670705.

On June 6, 2008, the board of directors approved the first reverse stock split. The authorized number of common stock of 20,000,000 shares was proportionately divided by 1.2545 to 15,942,607.

On October 20, 2008, the board of directors (i) approved the second reverse stock split pursuant to which the authorized number of shares of common stock of 15,942,607 was proportionately divided by 1.33177 to 11,970,994 shares and (ii) approved a resolution to increase the number of authorized shares of the Company's common stock from 11,970,994 to 40,000,000, which was approved by the Company’s shareholders holding a majority of the shares entitled to vote thereon at a special meeting of shareholders held on December 3, 2008.

Stock, Stock Options and Warrants Granted by the Company

The following table is the listing of stock options and warrants as of June 30, 2011 by year of grant:

Stock Options:
Year	Shares		Price
2006		23,941	$	1.67
2007		5,985		.35-1.67
2008		1,243,292		.01-.35
2009		105,000		.35-.50
2010		2,060,000		.15
2011		900,000		.01
		4,338,218	$	.01-1.67
Warrants:
Year	Shares		Price
2006		71,826	$	.02-1.67
2007		28,502		.35
2008		3,244,487		.02-.46
2009		2,188,302		.35-.65
2010		3,435,662		.01-.65
2011		11,372,691		.075-.20
Total		20,341,470	$	.01-1.67

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LOSS PER SHARE

6 Months Ended

Jun. 30, 2011

Earnings Per Share [Abstract]

Earnings Per Share [Text Block]

NOTE 4 - LOSS PER SHARE

The following table presents the shares used in the basic and diluted loss per common share computations:

													From
	Three Months Ended						Six Months Ended						April 23, 2002
	June 30,						June 30,						(Inception) To
	2011			2010			2011			2010			June 30, 2011
Numerator
Net Loss available in basic and diluted calculation	$	(387,386	)	$	(46,566	)	$	(864,819	)	$	(798,070	)	$	(8,246,896	)
Denominator
Weighted average common shares oustanding-basic		22,669,526			12,353,500			19,630,580			12,056,722			4,505,163
Effect of dilutive stock options and warrants (1)		-			-			-			-			-
Weighted average common shares outstanding-diluted		22,669,526			12,353,500			19,630,580			12,056,722			4,505,163
Loss per common share-basic and diluted	$	(0.02	)	$	(0.00	)	$	(0.04	)	$	(0.07	)	$	(1.83	)

(1) The number of shares underlying options and warrants outstanding as of June 30, 2011 and June 30, 2010 are 24,679,688 and 11,173,537, respectively. The effect of the shares that would be issued upon exercise of such options and warrants has been excluded from the calculation of diluted loss per share because those shares are anti-dilutive.

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STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT) (USD $)		Common Stock	Paid in Capital	Deficit	Total
Balance at Apr. 22, 2002		$ 0	$ 0	$ 0	$ 0
Balance (in shares) at Apr. 22, 2002		0
Issuance of common stock 9/1/02, $.0167 (1)	[1]	5,985	4,015	0	10,000
Issuance of common stock 9/1/02, $.0167 (1) (in shares)	[1]	598,549
Issuance of common stock, new issues		30	4,970		5,000
Issuance of common stock, new issues (in shares)		2,993
Net loss				(51,057)	(51,057)
Balance at Dec. 31, 2002		6,015	8,985	(51,057)	(36,057)
Balance (in shares) at Dec. 31, 2002		601,542
Issuance of common stock 2/12/03, $.0167 and 12/14/05, $.0167	[2]	239	161		400
Issuance of common stock 2/12/03, $.0167 and 12/14/05, $.0167 (in shares)	[2]	23,942
Issuance of common 6/11 and 12,$1.67 (3)	[3]	216	34,784		35,000
Issuance of common 6/11 and 12,$1.67 (3) (in shares)	[3]	21,548
Net loss				(90,461)	(90,461)
Balance at Dec. 31, 2003		6,470	43,930	(141,518)	(91,118)
Balance (in shares) at Dec. 31, 2003		647,032
Issuance of common 5/25/04, $.0167 (4)	[4]	66	44		110
Issuance of common 5/25/04, $.0167 (4) (in shares)	[4]	6,567
Net loss				(90,353)	(90,353)
Balance at Dec. 31, 2004		6,536	43,974	(231,871)	(181,361)
Balance (in shares) at Dec. 31, 2004		653,599
Issuance of common stock 2/12/03, $.0167 and 12/14/05, $.0167	[5]	150	100		250
Issuance of common stock 2/12/03, $.0167 and 12/14/05, $.0167 (in shares)	[5]	14,964
Vested stock options and warrants			2,793		2,793
Net loss				(123,852)	(123,852)
Balance at Dec. 31, 2005		6,686	46,867	(355,723)	(302,170)
Balance (in shares) at Dec. 31, 2005		668,563
Issuance of common 5/16 and 8/8, $.0167 (6)	[6]	869	582		1,451
Issuance of common 5/16 and 8/8, $.0167 (6) (in shares)	[6]	86,869
Issuance of common 10/19 and 23, $.0167 (7)	[7]	389	261		650
Issuance of common 10/19 and 23, $.0167 (7) (in shares)	[7]	38,906
Issuance of common 12/01, $1.67 (8)	[8]	287	44,523		44,810
Issuance of common 12/01, $1.67 (8) (in shares)	[8]	28,739
Vested stock options and warrants			13,644		13,644
Net loss				(273,026)	(273,026)
Balance at Dec. 31, 2006		8,231	105,877	(628,749)	(514,641)
Balance (in shares) at Dec. 31, 2006		823,077
Vested stock options and warrants			73,907		73,907
Capital contributions resulting from waivers of debt			346,714		346,714
Issuance of common stock, conversion of convertible securities (9)	[9]	6	994		1,000
Issuance of common stock, conversion of convertible securities (9) (in shares)	[9]	599
Value of equity instruments issued with debt			132,938		132,938
Net loss				(752,415)	(752,415)
Balance at Dec. 31, 2007		8,237	660,430	(1,381,164)	(712,497)
Balance (in shares) at Dec. 31, 2007		823,676
Issuance of common stock, new issues	[10]	45,528	1,547,974		1,593,502
Issuance of common stock, new issues (in shares)	[10]	4,552,862
Shares issued to finders, agents		20,127	(20,127)		0
Shares issued to finders, agents (in shares)		2,012,690
Shares issued to pay direct legal fees		2,857	(2,857)
Shares issued to pay direct legal fees (in shares)		285,714
Issuance of common due to antidilution provisions		2,059	(2,059)		0
Issuance of common due to antidilution provisions (in shares)		205,899
Shares issued to pay investor relations services 6/23/08, $.35		2,500	85,000		87,500
Shares issued to pay investor relations services 6/23/08, $.35 (in shares)		250,000
Vested stock options and warrants			354,994		354,994
Capital contributions resulting from waivers of debt			129,684		129,684
Net loss				(1,762,628)	(1,762,628)
Balance at Dec. 31, 2008		81,308	2,753,039	(3,143,792)	(309,445)
Balance (in shares) at Dec. 31, 2008		8,130,841
Issuance of common stock, new issues		1,250	(1,250)		0
Issuance of common stock, new issues (in shares)		125,000
Shares issued to finders, agents		1,000	49,000		50,000
Shares issued to finders, agents (in shares)		100,000
Cumulative effect of adoption of ASC 815			(486,564)	6,654	(479,910)
Vested stock options and warrants			111,835		111,835
Shares issued under PMM in April 2009, $.50		7,000	343,000		350,000
Shares issued under PMM in April 2009, $.50 (in shares)		700,000
Shares issued under PPM in May 2009, $.50		2,200	107,800		110,000
Shares issued under PPM in May 2009, $.50 (in shares)		220,000
Shares issued under PPM in June 2009, $.50		500	24,500		25,000
Shares issued under PPM in June 2009, $.50 (in shares)		50,000
Shares issued under PPM in August 2009, $.50		800	39,200		40,000
Shares issued under PPM in August 2009, $.50 (in shares)		80,000
Shares issued under PPM in September 2009, $.50		1,500	73,500		75,000
Shares issued under PPM in September 2009, $.50 (in shares)		150,000
Shares issued to directors, management and consultant in August 2009, $.50		7,978	390,927		398,905
Shares issued to directors, management and consultant in August 2009, $.50 (in shares)		797,810
Capital contributions resulting from waivers of debt			84,600		84,600
Value of equity-linked financial instruments issued in connection with PPMs			(222,296)		(222,296)
Shares issued to consultant for fund raising		300	(300)		0
Shares issued to consultant for fund raising (in shares)		30,000
Shares issued under PPM in November 2009, $.50		500	24,500		25,000
Shares issued under PPM in November 2009, $.50 (in shares)		50,000
Shares issued upon conversion of debt and interest, $.27		9,354	247,100		256,454
Shares issued upon conversion of debt and interest, $.27 (in shares)		935,446
Issuance of common stock, conversion of convertible securities (9)		140	4,766		4,906
Issuance of common stock, conversion of convertible securities (9) (in shares)		14,024
Value of equity instruments issued with debt			30,150		30,150
Net loss				(2,892,230)	(2,892,230)
Balance at Dec. 31, 2009		113,830	3,573,507	(6,029,368)	(2,342,030)
Balance (in shares) at Dec. 31, 2009		11,383,121
Vested stock options and warrants			11,382		11,382
Shares issued in March 2010 under PPM, $.50		1,746	85,529		87,275
Shares issued in March 2010 under PPM, $.50 (in shares)		174,550
Shares issed to consultants for IR and consulting, $.50		3,741	183,304		187,045
Shares issed to consultants for IR and consulting, $.50 (in shares)		374,090
Value of equity instruments issued for consulting services			354,602		354,602
Value of equity-linked financial instruments issued in connection with PPM in first quarter			(25,553)		(25,553)
Shares issued in April 2010 under PPM, $.50		1,800	88,200		90,000
Shares issued in April 2010 under PPM, $.50 (in shares)		180,000
Shares issed in May 2010 to consultant, $.50		129	6,296		6,425
Shares issed in May 2010 to consultant, $.50 (in shares)		12,850
Shares issued in May 2010 to 2008 investors as a penalty for late registration of 4,552,862 shares, $.50		7,102	348,022		355,124
Shares issued in May 2010 to 2008 investors as a penalty for late registration of 4,552,862 shares, $.50 (in shares)		710,248
Value of equity instruments issued with debt in second quarter			96,613		96,613
Value of equity-linked financial instruments issued in connection with PPM in second quarter			(31,332)		(31,332)
Value of equity-linked financial instruments issued in connection with PPM in third quarter			(31,506)		(31,506)
Value of equity instruments issued with debt in third quarter			15,553		15,553
Shares issued in September 2010 under PPM, $.10		2,500	22,500		25,000
Shares issued in September 2010 under PPM, $.10 (in shares)		250,000
Shares issued to consultants in third quarter at $.22 per share		4,889	102,660		107,549
Shares issued to consultants in third quarter at $.22 per share (in shares)		488,860
Shares issued, November 2010, upon exercise of warrants at $.135 per share		1,286	16,071		17,357
Shares issued, November 2010, upon exercise of warrants at $.135 per share (in shares)		128,571
Shares issued to directors as compensation at $.15 per share		3,000	42,000		45,000
Shares issued to directors as compensation at $.15 per share (in shares)		300,000
Value of equity instruments issued with debt in fourth quarter			7,308		7,308
Vested stock options in fourth quarter			161,107		161,107
Equity instruments issued to consultants in fourth quarter			26,234		26,234
Net loss				(1,352,709)	(1,352,709)
Balance at Dec. 31, 2010		140,023	5,052,497	(7,382,077)	(2,189,557)
Balance (in shares) at Dec. 31, 2010		14,002,290
Value of equity instruments issued with debt			47,908		47,908
Equity instruments issued to consultants in fourth quarter			85,916		85,916
Value of equity-linked financial instruments issued in connection with stock in first quarter			(265,815)		(265,815)
Value of equity-linked financial instruments issued in connection with stock in second quarter			(20,695)		(20,695)
Shares issued in first quarter at $.075 per share under PPM		53,334	346,666		400,000
Shares issued in first quarter at $.075 per share under PPM (in shares)		5,333,334
Shares issued in first quarter at $.085 per share under PPM		12,941	97,059		110,000
Shares issued in first quarter at $.085 per share under PPM (in shares)		1,294,117
Shares issued in first quarter at $.09 per share under PPM		2,000	16,000		18,000
Shares issued in first quarter at $.09 per share under PPM (in shares)		200,000
Shares issued in first quarter at $.10 per share under PPM		1,500	13,500		15,000
Shares issued in first quarter at $.10 per share under PPM (in shares)		150,000
Stock issued upon conversion of debt in first quarter		4,160	15,840		20,000
Stock issued upon conversion of debt in first quarter (in shares)		416,010
Stock issued to pay interest on debt in second quarter		1,583	20,917		22,500
Stock issued to pay interest on debt in second quarter (in shares)		158,333
Shares issued in second quarter at $.085 per share under PPM		5,882	44,118		50,000
Shares issued in second quarter at $.085 per share under PPM (in shares)		588,236
Shares issued in second quarter at $.07 per share under PPM		5,000	30,000		35,000
Shares issued in second quarter at $.07 per share under PPM (in shares)		500,000
Stock issued upon conversion of debt and interest		9,407	22,593		32,000
Stock issued upon conversion of debt and interest (in shares)		940,737
Stock options issued to management in second quarter			65,204		65,204
Net loss				(864,819)	(864,819)
Balance at Jun. 30, 2011		$ 235,830	$ 5,571,708	$ (8,246,896)	$ (2,439,358)
Balance (in shares) at Jun. 30, 2011		23,583,057

[1] Founders shares, 1,000,000 pre-split

[2] 23,492 (40,000 pre-split) shares valued at $.0167 per share as compensation for loan guarantees by management

[3] Investment including 670 shares issued as a 10% finders fee

[4] For payment of patent legal fees

[5] Compensation for loan guarantees by management

[6] For vendor contractual consideration

[7] Employment agreements

[8] Investment

[9] Conversion of convertible notes by management

[10] Investment, "October 2008 financing".

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CONDENSED STATEMENTS OF CASH FLOWS (USD $)	6 Months Ended		111 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011
Cash flow from operating activities:
Net loss	$ (864,819)	$ (798,070)	$ (8,246,896)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	1,214	1,215	7,604
Vested stock options and warrants	0	11,382	729,642
Equity instruments issued for management and consulting	151,120	548,073	1,414,379
Stock based registration payments	0	0	355,124
Conversion of accrued liabilites to capital	0	0	560,998
Amortization of debt discount	56,449	14,196	229,702
(Gain)Loss on valuation of equity-linked instruments	(190,915)	(676,414)	(973,219)
Changes in assets and liabilities:
Accounts receivable	(792)	15,737	(792)
Prepaid expense and other	(36,860)	732	(44,986)
Notes payable to shareholders	0	0	(14,957)
Accounts payable	52,437	220,459	1,278,458
Accrued expenses	24,383	124,192	523,090
Net cash used in operating activities:	(807,783)	(538,498)	(4,181,853)
Cash flow from investing activities:
Purchase of fixed assets	0	0	(12,258)
Purchase of intangibles	0	0	(142,495)
Net cash used in investing activities	0	0	(154,753)
Cash flow from financing activities:
Proceeds from long term and convertible debt	213,000	400,000	1,339,305
Repayment of convertible debt		(100,000)	(100,000)
Principal payments on long term debt	(7,462)	(7,075)	(293,726)
Restricted cash in escrow	0	60,500	0
Debt converted to common stock			174,000
Accrued interest converted to stock	22,500		109,860
Issuance of common stock	628,000	177,275	3,164,805
Net cash provided by (used in) financing activities	856,038	530,700	4,394,244
Net increase (decrease) in cash	48,255	(7,798)	57,638
Cash at beginning of period	9,383	16,632	0
Cash at end of period	57,638	8,834	57,638
Non cash transactions:
Conversion of debt and accrued interest into common stock	52,000		52,000
Conversion of accounts payable to convertible debt	89,300	0	546,599
Total non cash transactions	$ 141,300	$ 0	$ 598,599

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LIABILITY FOR EQUITY-LINKED FINANCIAL INSTRUMENTS

6 Months Ended

Jun. 30, 2011

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments and Hedging Activities Disclosure [Text Block]

NOTE 9 – LIABILITY FOR EQUITY-LINKED FINANCIAL INSTRUMENTS

The Company adopted ASC 815- Derivatives and Hedging (“ASC 815”) on January 1, 2009. ASC 815 mandates a two-step process for evaluating whether an equity-linked financial instrument or embedded feature is indexed to the entity's own stock. It is effective for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years, which was the Company's first quarter of 2009. Most of the warrants issued by the Company contain a strike price adjustment feature, which upon adoption of ASC 815, changed the classification (from equity to liability) and the related accounting for warrants with a $479,910 estimated fair value of as of January 1, 2009. An adjustment was made to remove $486,564 from paid-in capital (the cumulative values of the warrants on their grant dates), a positive adjustment of $6,654 was made to accumulated deficit, representing the gain on valuation from the grant date to January 1, 2009, and booked $479,910 as a liability.

The January 1, 2009 valuation was computed using the Black-Scholes valuation model based upon a 2.5-year expected term, an expected volatility of 63%, an exercise price of $.46 per share, a stock price of $.35, a zero dividend rate and a 1.37% risk free interest rate. Subsequent to January 1, 2009 these warrants were revalued at the end of each quarter and a gain or loss was recorded based upon their increase or decrease in value during the quarter. Likewise, new warrants that were issued during 2009 and 2010 were valued, using the Black-Scholes valuation model on their date of grant and an entry was made to reduce paid-in capital and increase the liability for equity-linked financial instruments. These warrants were also re-valued at the end of each quarter based upon their expected life, the stock price, the exercise price, assumed dividend rate, expected volatility and risk free interest rate. A significant reduction in the liability was realized in 2010 primarily due to a reduction from $.50 to $.22 per share in the underlying share price. The Company realized a slight increase in the liability for existing warrants during the first quarter of 2011 primarily due to a reduction in the spread between the exercise price and the market price of the underlying shares, but this was more than offset by a decrease in the liability for new warrants that were issued during the quarter as a result of a reduction in the underlying market price of the stock.

The inputs to the Black-Scholes model during 2011 and 2010 were as follows:

Stock price	$	.08 to $.50
Exercise price	$	.01 to $.65
Expected life	2.00 to 6.5		years
Expected volatility	53% to 68		%
Assumed dividend rate		-	%
Risk free interest rate	.221% to 2.97		%

The original valuations, annual gain/(loss) and end of year valuations are shown below:

	Initial Value		2009 Gain (Loss)			2010 Gain(Loss)		YTD 2011 Gain(Loss)		Value at 6/30/2011
January 1, 2009 Adoption	$	479,910	$	(390,368	)	$	868,772		1,498		8
Warrants issued in quarter ended 6/30/2009		169,854		20,847			149,007		1,521		82
Warrants issued in quarter ended 9/30/2009		39,743		(738	)		40,419		61		1
Warrants issued in quarter ended 12/31/2009		12,698		617			12.053		28		0
Subtotal	$	702,205
Warrants issued in quarter ended 3/31/2010		25,553					25,014		469		69
Warrants issued in quarter ended 6/30/2010		31,332					30,740		508		84
Warrants issued in quarter ended 9/30/2010		31,506					20,811		5,508		5,107
Warrants issued in quarter ended 3/31/2011		265,815							180,367		85,448
Warrants issued in quarter ended 6/30/2011		20,692							954		19,740
Total	$	1,077,104		(369,642	)	$	1,145,292	$	190,915	$	110,539

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CONDENSED BALANCE SHEETS (USD $)	Jun. 30, 2011	Dec. 31, 2010
ASSETS
Cash	$ 57,638	$ 9,383
Accounts receivable	792	0
Prepaid expense and other assets	44,986	8,126
Total Current Assets	103,416	17,509
Fixed assets, net	5,617	6,831
Intangibles, net	141,532	141,532
Total Assets	250,565	165,872
LIABILITIES AND SHAREHOLDERS' DEFICIT
Current portion of long term debt (See Note 7)	2,805	10,267
Current portion of convertible debt, net of discounts of $64,388 and $0 (See Notes 6 and 7)	663,412	56,000
Accounts payable	731,857	768,720
Accrued expenses	521,091	498,707
Total Current Liabilites	1,919,165	1,333,694
Long term debt and convertible debt, net of discounts of $36,380 and $109,310 (See Notes 6 and 7)	660,218	1,006,789
Liability for equity-linked financial instruments (See Note 11)	110,539	14,946
Stockholders Deficit:
Common stock, $.01 par value, 80,000,000 authorized, 23,583,057 and 14,002,290 outstanding	235,830	140,023
Additional paid-in capital	5,571,708	5,052,497
Deficit accumulated during development stage	(8,246,896)	(7,382,077)
Total Shareholder' Deficit	(2,439,358)	(2,189,557)
Total Liabilities and Shareholders' Deficit	$ 250,565	$ 165,872