10-Q/A

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

Amendment No. 1 to

FORM 10-Q

(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, 2012

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 000-54123

3PEA INTERNATIONAL, INC.

(Exact name of small business issuer as specified in its charter)

Nevada	95-4550154
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

1700 W Horizon Ridge Parkway, Suite 102,

Henderson, Nevada 89012

(Address of principal executive offices)

(702) 453-2221

(Issuer’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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-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 £ 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).    Yes £  No x

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: 38,585,891 shares as of July 16, 2012.

EXPLANATORY NOTE

This Amendment No. 1 to the Quarterly Report on Form 10-Q is being filed solely to furnish the Interactive Data files as Exhibit 101, in accordance with Rule 405 of Regulation S-T. No other changes have been made to the Form 10-Q, as originally filed on August 13, 2012.

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Item 6. Exhibits

101.INS*	XBRL Instance Document
101.SCH*	XBRL Schema Document
101.CAL*	XBRL Calculation Linkbase Document
101.DEF*	XBRL Definition Linkbase Document
101.LAB*	XBRL Label Linkbase Document
101.PRE*	XBRL Presentation Linkbase Document

* Pursuant to Rule 406T of Regulation S-T, the interactive data files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

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SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	3PEA INTERNATIONAL, INC.
Date: September 4, 2012	/s/ Mark Newcomer
	By: Mark Newcomer, Chief Executive Officer (principal executive officer)
Date: September 4, 2012	/s/ Arthur De Joya
	By: Arthur De Joya, Chief Financial Officer (principal financial and accounting officer)

4

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3. INTANGIBLE ASSETS

6 Months Ended

Jun. 30, 2012

Goodwill and Intangible Assets Disclosure [Abstract]

INTANGIBLE ASSETS

Intangible assets consist of the following:

	As of June 30, 2012			As of December 31, 2011
Patents and trademarks	$	33,465		$	33,465
Platform development		240,137			160,379
		273,602			193,844
Less: accumulated amortization		(23,610	)		(22,069	)
Intangible assets, net	$	249,992		$	171,775

Intangible assets are amortized over their useful lives ranging from periods of 5 to 15 years.

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2. FIXED ASSETS

6 Months Ended

Jun. 30, 2012

Property, Plant and Equipment [Abstract]

FIXED ASSETS

Fixed assets consist of the following:

	As of June 30, 2012			As of December 31, 2011
Equipment	$	500,205		$	477,796
Software		257,092			257,092
Furniture and fixtures		60,921			60,921
Leasehold equipment		17,721			14,780
		835,939			810,589
Less: accumulated depreciation		(749,202	)		(721,869	)
Fixed assets, net	$	86,737		$	88,720

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CONSOLIDATED BALANCE SHEET (USD $)	Jun. 30, 2012	Dec. 31, 2011
ASSETS
Cash	$ 117,621	$ 63,826
Cash Restricted	5,450,084	5,514,661
Accounts Receivable	2,107,178	1,250,320
Prepaid Expenses		3,970
Other receivables	4,125
Total current assets	7,679,008	6,832,777
Fixed assets, net	86,737	88,720
Deposits	3,551	3,551
Intangible assets, net	249,992	171,775
Total assets	8,019,288	7,096,823
LIABILITIES AND STOCKHOLDERS' DEFICIT
Accounts payable and accrued liabilities	2,578,742	2,001,047
Customer card funding	5,450,084	5,514,661
Notes payable- related parties	538,000	538,000
Convertible note payable	10,000	10,000
Notes payable	264,400	1,943,900
Total current liabilities	8,841,226	10,007,608
Notes payable, non-current portion
Total long Term liabilities
Total liabilities	8,841,226	10,007,608
Common stock; $0.001 par value; 150,000,000 shares authorized,38,585,891 and 35,250,391 issued and outstanding at June 30, 2012 and December 31, 2011, respectively	38,586	35,250
Additional paid-in capital	5,504,045	4,975,686
Treasury stock at cost, 303,450 shares	(150,000)	(150,000)
Accumulated deficit	(6,271,944)	(7,829,104)
Total 3Pea International, Inc.'s stockholders' deficit	(879,313)	(2,968,168)
Noncontrolling interest	57,375	57,383
Total stockholders' deficit	(821,938)	(2,910,785)
Total liabilities and stockholders' deficit	$ 8,019,288	$ 7,096,823

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CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY DEFICIT (USD $)	Common Stock	Additional Paid-In Capital	Treasury Stock	Accumulated Deficit	Non-controlling Interest	Total
Beginning Balance, Amount at Dec. 31, 2011	$ 35,250	$ 4,975,686	$ (150,000)	$ (7,829,104)	$ 57,383	$ (2,910,785)
Beginning Balance, Shares at Dec. 31, 2011	35,250,391
Issuance of stock on May 18, 2012 for debt conversion at .09 share, Amount	3,336	296,859				300,195
Issuance of stock on May 18, 2012 for debt conversion at .09 share, Shares	3,335,500
Issuance of stock warrants for 1,834,525 shares of common stock for settlement of debt		127,325				127,325
Issuance of stock warrants for 1,500,975 shares of common stock for settlement of debt		104,175				104,175
Net income (loss)				1,557,160	(8)	1,557,152
Ending Balance, Amount at Jun. 30, 2012	$ 38,586	$ 5,504,045	$ (150,000)	$ (6,271,944)	$ 57,375	$ (821,938)
Ending Balance, Shares at Jun. 30, 2012	38,585,891

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1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT POLICIES

6 Months Ended

Jun. 30, 2012

Accounting Policies [Abstract]

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT POLICIES

The foregoing unaudited interim financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions for Form 10-Q and Regulation S-X as promulgated by the Securities and Exchange Commission (“SEC”). Accordingly, these financial statements do not include all of the disclosures required by generally accepted accounting principles in the United States of America for complete financial statements. These unaudited interim financial statements should be read in conjunction with the audited financial statements and the notes thereto included on Form 10-K for the year ended December 31, 2011. In the opinion of management, the unaudited interim financial statements furnished herein include all adjustments, all of which are of a normal recurring nature, necessary for a fair statement of the results for the interim period presented.

The preparation of financial statements in accordance with generally accepted accounting principles in the United States of America requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and the reported amounts of revenues and expenses during the reporting period. Uncertainties with respect to such estimates and assumption are inherent in the preparation of the Company’s financial statements; accordingly, it is possible that the actual results could differ from these estimates and assumptions that could have a material effect on the reported amounts of the Company’s financial position and results of operations.

Operating results for the six months period ended June 30, 2012 are not necessarily indicative of the results that may be expected for the year ending December 31, 2012.

About 3PEA International, Inc.

3PEA International, Inc. is a payment solutions company which currently focuses on providing prepaid debit program management and processing services. 3PEA provides a card processing platform consisting of proprietary systems and innovative software applications. 3PEA develops prepaid card programs for healthcare reimbursement payments, pharmaceutical assistance, corporate and incentive rewards, and are expanding into payroll cards, general purpose re-loadable cards, travel cards, and expense reimbursement cards. 3PEA cards are offered to end users through our relationships with bank issuers.

Principles of consolidation – The consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany balances and transactions have been eliminated.

Use of estimates - The preparation of consolidated financial statements in conformity with generally accepted accounting principles 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 consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Restricted cash – restricted cash is a cash account controlled by the Company which funds are received related to the card programs from our customers. The Company has recorded a corresponding customer card funding liability.

Revenue and expense recognition – We recognize revenue when (1) there is persuasive evidence of an arrangement existing, (2) delivery has occurred, (3) our price to the buyer is fixed or determinable and (4) collectability of the receivables is reasonably assured. We recognize the costs of these revenues at the time revenue is recognized. Any fees paid up front are deferred until such time such services have been considered rendered. As of June 30, 2012 and December 31, 2011, there are no deferred revenues recorded.

We generate the following types of revenues:

• Administration and usage fees, charged to our prepaid card clients when our programs are created, distributed or reloaded. Such revenues are recognized when such services are performed.

• Transaction fees, paid by the applicable networks and passed through by our card issuing banks when our SVCs are used in a purchase or ATM transaction. Such revenues are recognized when such services are performed.

• Maintenance, administration, transaction fees, charged to an SVC and not under any multiple element arrangements. Such revenues are recognized when such services are performed.

• Program maintenance management fees charged to our clients. Such revenues are not under any multiple element arrangements and are recognized when such services are performed.

• Software development and consulting services to our clients. Such revenues are recognized in accordance with ASC 985-605.

The Company records all revenues on gross basis in accordance with ASC 605-45 since it is the primary obligor and establishes the price in the revenue arrangement. The Company is currently under no obligation for refunding any fees or has any obligations for disputed claim settlements.

Earnings (loss) per share - Basic earnings (loss) per share exclude any dilutive effects of options, warrants and convertible securities. Basic earnings (loss) per share is computed using the weighted-average number of outstanding common stocks during the applicable period. Diluted earnings per share is computed using the weighted-average number of common and common stock equivalent shares outstanding during the period. Common stock equivalent shares are excluded from the computation if their effect is antidilutive.

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CONSOLIDATED BALANCE SHEET (Parenthetical) (USD $)	Jun. 30, 2012	Dec. 31, 2011
Statement of Financial Position [Abstract]
Common stock par value (in Dollars per share)	$ 0.001	$ 0.001
Common stock shares authorized	150,000,000	150,000,000
Common stock shares issued	38,585,891	35,250,391
Common stock shares outstanding	38,585,891	35,250,391
Treasury stock shares	303,450	303,450

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3. INTANGIBLE ASSETS (Details) (USD $)	Jun. 30, 2012	Dec. 31, 2011
Intangible Assets Details
Patents and trademarks	$ 33,465	$ 33,465
Platform development	240,137	160,379
Intangible assets gross	273,602	193,844
Less: accumulated amortization	(23,610)	(22,069)
Intangible assets, net	$ 249,992	$ 171,775

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Document and Entity Information	6 Months Ended
	Jun. 30, 2012	Jul. 16, 2012
Document And Entity Information
Entity Registrant Name	3PEA INTERNATIONAL, INC.
Entity Central Index Key	0001496443
Document Type	10-Q
Document Period End Date	Jun. 30, 2012
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		38,585,891
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2012

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3. INTANGIBLE ASSETS (Details Narrative)	6 Months Ended
	Jun. 30, 2012
Intangible Assets Details Narrative
Intangible assets useful lives minimum	5 years
Intangible assets useful lives maximum	15 years

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CONSOLIDATED STATEMENT OF OPERATIONS (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Income Statement [Abstract]
Revenues	$ 2,549,003	$ 665,033	$ 4,033,595	$ 1,602,601
Cost of revenues	2,033,264	432,174	3,255,069	1,183,160
Gross profit	515,739	232,859	778,526	419,441
Operating expenses
Depreciation and amortization	11,276	12,856	28,874	23,523
Selling, general and administrative	143,995	144,490	297,096	298,262
Total operating expenses	155,271	157,346	325,970	321,785
Income from operations	360,468	75,513	452,556	97,656
Interest expense	(15,706)	(15,857)	(31,459)	(31,540)
Gain on debt extinguishment	1,136,055		1,136,055
Total other income (expense)	1,120,349	(15,857)	1,104,596	(31,540)
Income before provision for income taxes and noncontrolling interest	1,480,817	59,656	1,557,152	66,116
Provision for income taxes
Net income before noncontrolling interest	1,480,817	59,656	1,557,152	66,116
Net (loss) attributable to the noncontrolling interest	(3)	14	(8)	99
Net income attributable to 3Pea International, Inc.	$ 1,480,820	$ 59,642	$ 1,557,160	$ 66,017
Net income per common share - basic	$ 0.04	$ 0	$ 0.04	$ 0
Net income per common share - fully diluted	$ 0.04	$ 0	$ 0.04	$ 0
Weighted average common shares outstanding - basic	36,789,853	35,248,641	36,038,449	35,247,887
Weighted average common shares outstanding - fully diluted	38,329,314	35,248,641	36,826,506	35,247,887

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1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT POLICIES (Policies)

6 Months Ended

Jun. 30, 2012

Basis Of Presentation And Summary Of Significant Policies Policies

Basis Of Presentation and Summary of Significant Policies

The foregoing unaudited interim financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions for Form 10-Q and Regulation S-X as promulgated by the Securities and Exchange Commission (“SEC”). Accordingly, these financial statements do not include all of the disclosures required by generally accepted accounting principles in the United States of America for complete financial statements. These unaudited interim financial statements should be read in conjunction with the audited financial statements and the notes thereto included on Form 10-K for the year ended December 31, 2011. In the opinion of management, the unaudited interim financial statements furnished herein include all adjustments, all of which are of a normal recurring nature, necessary for a fair statement of the results for the interim period presented.

The preparation of financial statements in accordance with generally accepted accounting principles in the United States of America requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published, and the reported amounts of revenues and expenses during the reporting period. Uncertainties with respect to such estimates and assumption are inherent in the preparation of the Company’s financial statements; accordingly, it is possible that the actual results could differ from these estimates and assumptions that could have a material effect on the reported amounts of the Company’s financial position and results of operations.

Operating results for the six months period ended June 30, 2012 are not necessarily indicative of the results that may be expected for the year ending December 31, 2012.

About 3PEA International, Inc.

3PEA International, Inc. is a payment solutions company which currently focuses on providing prepaid debit program management and processing services. 3PEA provides a card processing platform consisting of proprietary systems and innovative software applications. 3PEA develops prepaid card programs for healthcare reimbursement payments, pharmaceutical assistance, corporate and incentive rewards, and are expanding into payroll cards, general purpose re-loadable cards, travel cards, and expense reimbursement cards. 3PEA cards are offered to end users through our relationships with bank issuers.

Principles of consolidation

The consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany balances and transactions have been eliminated.

Use of estimates

The preparation of consolidated financial statements in conformity with generally accepted accounting principles 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 consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Restricted cash

Restricted cash is a cash account controlled by the Company which funds are received related to the card programs from our customers. The Company has recorded a corresponding customer card funding liability.

Revenue and expense recognition

We recognize revenue when (1) there is persuasive evidence of an arrangement existing, (2) delivery has occurred, (3) our price to the buyer is fixed or determinable and (4) collectability of the receivables is reasonably assured. We recognize the costs of these revenues at the time revenue is recognized. Any fees paid up front are deferred until such time such services have been considered rendered. As of June 30, 2012 and December 31, 2011, there are no deferred revenues recorded.

We generate the following types of revenues:

• Administration and usage fees, charged to our prepaid card clients when our programs are created, distributed or reloaded. Such revenues are recognized when such services are performed.

• Transaction fees, paid by the applicable networks and passed through by our card issuing banks when our SVCs are used in a purchase or ATM transaction. Such revenues are recognized when such services are performed.

• Maintenance, administration, transaction fees, charged to an SVC and not under any multiple element arrangements. Such revenues are recognized when such services are performed.

• Program maintenance management fees charged to our clients. Such revenues are not under any multiple element arrangements and are recognized when such services are performed.

• Software development and consulting services to our clients. Such revenues are recognized in accordance with ASC 985-605.

The Company records all revenues on gross basis in accordance with ASC 605-45 since it is the primary obligor and establishes the price in the revenue arrangement. The Company is currently under no obligation for refunding any fees or has any obligations for disputed claim settlements.

Earnings (loss) per share

Basic earnings (loss) per share exclude any dilutive effects of options, warrants and convertible securities. Basic earnings (loss) per share is computed using the weighted-average number of outstanding common stocks during the applicable period. Diluted earnings per share is computed using the weighted-average number of common and common stock equivalent shares outstanding during the period. Common stock equivalent shares are excluded from the computation if their effect is antidilutive.

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5. GAIN ON DEBT EXTIGUISHMENT

6 Months Ended

Jun. 30, 2012

Debt Disclosure [Abstract]

GAIN ON DEBT EXTIGUISHMENT

On May 30, 2012, the Company negotiated the conversion of two debt holders’ promissory notes totaling $1,667,750 in exchange for 3,335,500 shares of the Company’s common stock and warrants for 3,335,500 shares of common stock with an exercise price of $0.50 expiring May 31, 2015. As a result of the conversion of the two debt holders’ notes, the Company recognized a gain on debt extinguishment of $1,136,055 during the three and six months ended June 30, 2012 based on the fair value of both the common stock and warrants issued. The warrants were valued at approximately $231,500 using the Black-Scholes options pricing model under the following assumptions: stock price at issuance of $0.09 per share; 3 year life; discount rate of 4.29%; and volatility rate of 228%.

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4. COMMON STOCK (Details) (USD $)	Jun. 30, 2012
Number of warrants	3,335,500
Number of Shares Exercisable	3,335,500
Warrant1Member
Date of Issuance	May 31, 2012
Number of warrants	1,834,525
Exercise Price	0.5
Contractual Life	3 years
Number of Shares Exercisable	1,834,525
Warrant2Member
Date of Issuance	May 31, 2012
Number of warrants	1,500,975
Exercise Price	0.5
Contractual Life	3 years
Number of Shares Exercisable	1,500,975

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4. COMMON STOCK (Tables)

6 Months Ended

Jun. 30, 2012

Common Stock Tables

Warrants Activity

The Company issued the following warrants at corresponding exercise price as of June 30, 2012.

Date of Issuance	Number of Warrants	Exercise Price	Contractual Life	Number of  Shares Exercisable
5/31/2012	1,834,525	0.50	3 years	1,834,525
5/31/2012	1,500,975	0.50	3 years	1,500,975
	3,335,500			3,335,500

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2. FIXED ASSETS (Tables)

6 Months Ended

Jun. 30, 2012

Fixed Assets Tables

Fixed assets

Fixed assets consist of the following:

	As of  June 30, 2012			As of  December 31, 2011
Equipment	$	500,205		$	477,796
Software		257,092			257,092
Furniture and fixtures		60,921			60,921
Leasehold equipment		17,721			14,780
		835,939			810,589
Less: accumulated depreciation		(749,202	)		(721,869	)
Fixed assets, net	$	86,737		$	88,720

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3. INTANGIBLE ASSETS (Tables)

6 Months Ended

Jun. 30, 2012

Intangible Assets Tables

Intangible Assets

Intangible assets consist of the following:

	As of June 30, 2012			As of December 31, 2011
Patents and trademarks	$	33,465		$	33,465
Platform development		240,137			160,379
		273,602			193,844
Less: accumulated amortization		(23,610	)		(22,069	)
Intangible assets, net	$	249,992		$	171,775

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2. FIXED ASSETS (Details) (USD $)	Jun. 30, 2012	Dec. 31, 2011
Fixed Assets Details
Equipment	$ 500,205	$ 477,796
Software	257,092	257,092
Furniture and fixtures	60,921	60,921
Leasehold equipment	17,721	14,780
Fixed Assets Gross	835,939	810,589
Less: accumulated depreciation	(749,202)	(721,869)
Fixed assets, net	$ 86,737	$ 88,720

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5. GAIN ON DEBT EXTIGUISHMENT (Details Narrative) (USD $)	3 Months Ended	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2012
Gain On Debt Extiguishment Details Narrative
Gain on debt extinguishment	$ 1,136,055	$ 1,136,055
Warrants value		$ 231,500
Warrants per share		$ 0.09
Warrants useful life		3 years
Warrants discount rate		4.29%
Warrants volatility rate		228.00%

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CONSOLIDATED STATEMENT OF CASH FLOWS (USD $)	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Cash flows from operating activities:
Net income	$ 1,557,160	$ 66,017
Change in noncontrolling interest	8	(99)
Depreciation and amortization	28,874	23,523
Gain on extinguishment of debt- stock based	(1,136,055)	7,759
Change in restricted cash	(64,577)	1,135,294
Change in other receivables	(4,125)
Change in prepaid expenses	3,970
Change in accounts receivable	(856,857)	1,599,383
Change in accounts payable and accrued liabilities	577,678	(1,518,794)
Change in customer card funding	64,577	(1,135,294)
Net cash provided by operating activities	170,653	177,789
Purchase of fixed assets	(25,350)	(36,130)
Purchase of intangible assets	(79,758)	(83,675)
Net cash used in investing activities	(105,108)	(119,805)
Proceeds from borrowings on notes payable
Payments on notes payable	(11,750)	(3,500)
Net cash used in financing activities	(11,750)	(3,500)
Net change in cash	53,795	54,484
Cash, beginning of period	63,826	42,214
Cash, end of period	117,621	96,698
Non Cash financing transactions:
Issuance of 3,335,500 shares of common stock and warrants in satisfaction of notes payable	$ 1,728,016

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4. COMMON STOCK

6 Months Ended

Jun. 30, 2012

Equity [Abstract]

COMMON STOCK

At June 30, 2012, the Company's authorized capital stock was 150,000,000 shares of common stock, par value $0.001 per share, and 10,000,000 shares of preferred stock, par value $0.001 per share. On that date, the Company had outstanding 38,585,891 shares of common stock, and no shares of preferred stock.

2012 Transactions: During the six months ended June 30, 2012, the Company issued 3,335,500 shares of common stock for extinguishment of debts valued at $0.09 per share (see Note 5 for further discussions). The shares were valued at the market price of our common stock on the date of issuance.

Warrants

The Company issued the following warrants at corresponding exercise price as of June 30, 2012.

Date of Issuance	Number of Warrants	Exercise Price	Contractual Life	Number of  Shares Exercisable
5/31/2012	1,834,525	0.50	3 years	1,834,525
5/31/2012	1,500,975	0.50	3 years	1,500,975
	3,335,500			3,335,500

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4. COMMON STOCK (Details Narrative) (USD $)	6 Months Ended
	Jun. 30, 2012	Dec. 31, 2011
Common Stock Details Narrative
Authorized capital stock	150,000,000	150,000,000
Authorized capital stock par value	$ 0.001	$ 0.001
Preferred stock	10,000,000
Preferred stock par value	$ 0.001
Common stock outstanding	38,585,891	35,250,391
Common stock issued	3,335,500
Common stock issued per share	$ 0.09