As part of the reverse merger, the Company assumed a beneficial conversion feature for a vested warrant granted to a consultant on May 11, 2009, as consideration for service performed on behalf of the Company. The vested warrants have a term of seven years to purchase 1,250,000 shares of common stock with an exercise price of $0.03 per share. The Company originally recorded debt discount in the amount of $162,500 based on the estimated fair value of the warrant. In accordance with EITF No.00-27, Application of Issue No. 98-5 to Certain Convertible Instruments, the debt discount as a result of the beneficial conversion feature of the estimated fair value of the warrant was amortized as non-cash interest expense over the term of the warrant. At June 30, 2011, 110,269 of the debt discount remained unamortized. During the three months ended June 30, 2011, interest expense of $5,800 has been recorded from the debt discount amortization.