Supplemental Cash Flow Disclosures

12 Months Ended

Dec. 31, 2011

Notes to Financial Statements

Supplemental Cash Flow Disclosures

9. Supplemental Cash Flow Disclosures

Actual cash payments

No cash was paid for either interest expense or income taxes for the years ended December 31, 2011 and 2010.

Non-cash investing and financing activities

During the years ended December 31, 2011 and December 31, 2010, the Company issued a total of 2,000,000 warrants each year to the current note holders in consideration for financing fees related to the restructuring of the existing promissory notes. The warrants were valued using the Black-Scholes option pricing model resulting in a total value of $89,225 in 2011 and $97,220 in 2010, which was recorded as deferred financing costs and is being amortized to expense over the term of the notes.