RESTATEMENT

9 Months Ended

Sep. 30, 2012

RESTATEMENT

RESTATEMENT

NOTE 10 – RESTATEMENT

The Company has restated its financial statements for period ended September 30, 2011.  The significant changes made are further described and summarized below.

The Company had not previously recorded the derivative liabilities associated with convertible debt, debentures, and warrants issued in the third quarter of 2011.  The Company has restated its financial statements for the period ended September 30, 2011 to record these corrections.

The following tables highlight the significant areas of change:

	Three Months Ended September 30, 2011
	As Previously
	Reported			Restated
	September 30,2011			September 30, 2011			Change
Total Assets	$	7,777,050		$	7,777,050		$	-
Total Liabilities	$	(2,964,209	)	$	(8,222,286	)	$	(5,258,077	)
Stockholders' Equity	$	(4,812,841	)	$	(445,236	)	$	5,258,077
Net Income (Loss)	$	(1,066,016	)	$	(337,837	)	$	728,179
Income (Loss) available to common stockholders	$	(1,066,016	)	$	(337,837	)	$	728,179
Basic Loss per Share	$	(0.02	)	$	(0.01	)	$	0.01

	Nine Months Ended September 30, 2011
	As Previously
	Reported			Restated
	September 30,2011			September 30, 2011			Change
Total Assets	$	7,777,050		$	7,777,050		$	-
Total Liabilities	$	(2,964,209	)	$	(8,222,286	)	$	(5,258,077	)
Stockholders' Equity	$	(4,812,841	)	$	(445236	)	$	5,258,077
Net Income (Loss)	$	(7,008,903	)	$	(7,588,460	)	$	(579,557	)
Income (Loss) available to common stockholders	$	(7,008,903	)	$	(7,588,460	)	$	(579,557	)
Basic Loss per Share	$	(0.13	)	$	(0.14	)	$	(0.01	)