Quarterly report pursuant to Section 13 or 15(d)

Note 5 - Stock Options and Warrants

Note 5 - Stock Options and Warrants

6 Months Ended

Jun. 30, 2012

Stock Options

Following is a summary of the stock option activity:

	Options Outstanding		Weighted Average Exercise Price
Outstanding as of December 31, 2011		16,078,979	$	0.19
Granted		26,384,193		0.04
Forfeited		3,679,027		0.17
Exercised		—		—
Outstanding as of June 30, 2012		38,844,145	$	0.08

Warrants

Following is a summary of the warrant activity:

	Warrants Outstanding		Weighted Average Exercise Price
Outstanding as of December 31, 2011		105,001,252	$	0.06
Granted		451,907,807		0.01
Forfeited		—		—
Exercised		—		—
Outstanding as of June 30, 2012		556,909,059	$	0.01

In April 2012, the Company agreed to an adjustment as negotiated to enable inducement of further financing of the Company. Pursuant to the anti-dilution provisions in the warrants, the exercise price of all warrants is now $0.01, and the number of shares underlying the warrants has increased such that the number of shares underlying each warrant is equal to the aggregate exercise price in effect prior to the adjustment divided by the new exercise price of $0.01.