Quarterly report pursuant to Section 13 or 15(d)

Basis of Presentation

Basis of Presentation

3 Months Ended

Mar. 31, 2012

Note 1. Basis of Presentation

The accompanying unaudited consolidated financial statements presented herein have been prepared in accordance with the instructions to Form 10-Q and do not include all the information and note disclosures required by accounting principles generally accepted in the United States. The consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011 filed with the Securities and Exchange Commission (the “SEC”) on April 16, 2012. In the opinion of management, this interim information includes all material adjustments, which are of a normal and recurring nature, necessary for fair presentation.

The preparation 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. Estimates that are particularly susceptible to change include assumptions used in determining the fair value of securities owned and non-readily marketable securities.

The results of operations for the three months ended March 31, 2012 are not necessarily indicative of the results to be expected for the entire year or for any other period.

Restatement of March 31, 2012 Financial Statement: During the Company’s review of the financial statements for the three and six months ended June 30, 2012, previously filed on form 10-Q on August 14, 2012 the Company determined that the financial statements filed for the period ended June 30, 2012 contained a misstatement relating to its accounting treatment of a beneficial conversion feature associated with convertible notes issued on February 24, 2012. Specifically, the Company did not need to record a beneficial conversion feature because the amount exceeded the amount of proceeds allocated to the convertible notes. ASC 470-20-30-8 states that if the intrinsic value of the beneficial conversion feature is greater than the proceeds allocated to the convertible instrument, the amount of the discount assigned to the beneficial conversion feature shall be limited to the amount of the proceeds allocated to the convertible instrument.

Background

During the Company’s review of the financial statements for the three months ended March 31, 2012, previously filed on form 10-Q/A on August 17, 2012 the Company determined that the financial statements filed for the period ended March 31, 2012 contained a misstatement relating to its accounting treatment of a beneficial conversion feature associated with convertible notes issued on February 24, 2012. Specifically, the Company did not need to record a beneficial conversion feature because the amount exceeded the amount of proceeds allocated to the convertible notes. ASC 470-20-30-8 states that if the intrinsic value of the beneficial conversion feature is greater than the proceeds allocated to the convertible instrument, the amount of the discount assigned to the beneficial conversion feature shall be limited to the amount of the proceeds allocated to the convertible instrument

Effects of Restatement

The tables below present the effect of the financial statement adjustments related to the restatement of our previously reported financial statements as of and for the three month period ended March 31, 2012. The effect of the restatement on the condensed consolidated balance sheet as of March 31, 2012 is as follows:

March 31, 2012	As Reported			Adjustments			As Restated
Additional paid-in capital	$	9,737,416		$	(5,750,000	)	$	3,987,416
Accumulated deficit		(15,559,513	)		5,750,000			(9,809,513	)

The effect of the restatement on the consolidated income statement for the three months ended March 31, 2012 is as follows:

	As Reported		Adjustments		As Restated
Interest Expense		(9,222,845)		5,750,000		(3,472,845)
Loss before income taxes		(9,396,036)		5,750,000		(3,646,036)
Net loss		(9,396,036)		5,750,000		(3,646,036)
Net loss per common share	$	(0.17)	$	0.11	$	(0.06)

The effect of the restatements on the consolidated statement of cash flows for the three months ended March 31, 2012 is as follows:

2012	As Reported		Adjustments			As Restated
Net loss	$	(9,396,036)	$	5,750,000			$(3,646,036)
Non-cash interest expense		5,777,397		(5,750,000	)		27,397

Consistent with the information above, the Company has revised the following items in this Form 10-Q/A:

Part I

Item 1- Financial Statements (Unaudited) including notes 1and 7 to the condensed consolidated financial statements

Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations

Additionally, in this Amendment, the Company is including currently dated certifications from the Company’s Principal Executive officer and Principal Financial officer as required by Section 302 of the Sarbanes-Oxley Act of 2002 in Exhibits 31.1 and a currently dated certification from the Company’s Principal Executive Officer and Principal Financial Officer as require by Section 906 of the Sarbanes-Oxley Act of 2002 in Exhibit 32.1.

Except to the extent described above and set forth herein, the financial statements and other disclosures in the Form 10-Q initially filed on May 21, 2012 (the initial Form 10-Q) are unchanged and this amendment does not reflect any events that have occurred after the initial Form 10-Q was filed. Accordingly, this amendment should be read in conjunction with the Company’s initial Form 10-Q and the Company’s subsequent filings with the United States Securities and Exchange Commission.