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related to these balances. All non-interest bearing cash balances were fully insured at December 31, 2012 due to a temporary federal
program in effect from December 31, 2010 through December 31, 2012. Under the program, there is no limit to the amount of insurance
for eligible accounts. Beginning 2013, insurance coverage reverted to $250,000 per depositor at each financial institution. The
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the Company&amp;#146;s collection experience, customer credit worthiness, and current economic trends. Based on management&amp;#146;s
review of accounts receivable, we have recorded an allowance for doubtful accounts of $11,274 and $2,576 at June 30, 2013 and December
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realizable value, with appropriate consideration given to obsolescence, excessive levels, deterioration and other factors.&lt;/p&gt;</NonNumbericText><FootnoteIndexer /><CurrencyCode /><CurrencySymbol /><IsIndependantCurrency>false</IsIndependantCurrency><ShowCurrencySymbol>false</ShowCurrencySymbol><DisplayDateInUSFormat>false</DisplayDateInUSFormat></Cell></Cells><ElementDataType>nonnum:textBlockItemType</ElementDataType><SimpleDataType>na</SimpleDataType><ElementDefenition>Disclosure of accounting policy for major classes of inventories, bases of stating inventories (for example, lower of cost or market), methods by which amounts are added and removed from inventory classes (for example, FIFO, LIFO, or average cost), loss recognition on impairment of inventories, and situations in which inventories are stated above cost. If inventory is carried at cost, this disclosure includes the nature of the cost elements included in inventory.</ElementDefenition><ElementReferences>Reference 1: http://www.xbrl.org/2003/role/presentationRef

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 -Publisher AICPA

 -Name Statement of Position (SOP)

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Gains and losses upon disposition are reflected in the statement of operations in the period of disposition. Maintenance and repair
expenditures are charged to expense as incurred. Property and equipment are evaluated for impairment when events change or changes
in circumstances indicate that the carrying amount of the assets may not be recoverable.&lt;/p&gt;</NonNumbericText><FootnoteIndexer /><CurrencyCode /><CurrencySymbol /><IsIndependantCurrency>false</IsIndependantCurrency><ShowCurrencySymbol>false</ShowCurrencySymbol><DisplayDateInUSFormat>false</DisplayDateInUSFormat></Cell></Cells><ElementDataType>nonnum:textBlockItemType</ElementDataType><SimpleDataType>na</SimpleDataType><ElementDefenition>Disclosure of accounting policy for property, plant and equipment which may include the basis of such assets, depreciation methods used and estimated useful lives, the entity's capitalization policy, including its accounting treatment for costs incurred for repairs and maintenance activities, whether such asset balances include capitalized interest and the method by which such is calculated, how disposals of such assets are accounted for and how impairment of such assets is assessed and recognized.</ElementDefenition><ElementReferences>Reference 1: http://www.xbrl.org/2003/role/presentationRef

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 -Name Accounting Principles Board Opinion (APB)

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Reference 6: http://www.xbrl.org/2003/role/presentationRef

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events or changes in circumstances indicate that the carrying amount may not be recoverable. The Company&amp;#146;s existing intangible
assets consist solely of patents. Patents are amortized over their estimated useful or economic lives of 15 years. Patent amortization
expense was approximately $5,300 and $7,400 for the three months ended June 30, 2013 and 2012, respectively. Patent amortization
expense was approximately $11,300 and $11,800 for the six months ended June 30, 2013 and 2012, respectively. Total patent amortization
expense for the next five years is estimated to be approximately $24,000 per year.&lt;/p&gt;</NonNumbericText><FootnoteIndexer /><CurrencyCode /><CurrencySymbol /><IsIndependantCurrency>false</IsIndependantCurrency><ShowCurrencySymbol>false</ShowCurrencySymbol><DisplayDateInUSFormat>false</DisplayDateInUSFormat></Cell></Cells><ElementDataType>nonnum:textBlockItemType</ElementDataType><SimpleDataType>na</SimpleDataType><ElementDefenition>Disclosure of accounting policy for intangible assets. This accounting policy may address both intangible assets subject to amortization and those that are not. The following also may be disclosed: (1) a description of intangible assets (2) the estimated useful lives of those assets (3) the amortization method used (4) how the entity assesses and measures impairment of such assets (5) how future cash flows are estimated (6) how the fair values of such asset are determined.</ElementDefenition><ElementReferences>Reference 1: http://www.xbrl.org/2003/role/presentationRef

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Reference 3: http://www.xbrl.org/2003/role/presentationRef

 -Publisher FASB

 -Name Statement of Financial Accounting Standard (FAS)

 -Number 144

 -Paragraph 7-18, 22

 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009.  This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.



Reference 4: http://www.xbrl.org/2003/role/presentationRef

 -Publisher FASB

 -Name Statement of Financial Accounting Standard (FAS)

 -Number 142

 -Paragraph 11-17

 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009.  This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.



</ElementReferences><IsTotalLabel>false</IsTotalLabel><UnitID>0</UnitID><Label>Intangible assets</Label></Row><Row FlagID="0"><Id>8</Id><IsAbstractGroupTitle>false</IsAbstractGroupTitle><LabelSeparator>

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whenever events or changes in circumstances indicate that the book value of the asset may not be recoverable. The Company periodically
evaluates whether events and circumstances have occurred that indicate possible impairment. When impairment indicators exist, the
Company uses market quotes, if available or an estimate of the future undiscounted net cash flows of the related asset or asset
group over the remaining life in measuring whether or not the asset values are recoverable. There have been no significant impairments
of long-lived assets during the three and six month periods ended June 30, 2013.&lt;/p&gt;</NonNumbericText><FootnoteIndexer /><CurrencyCode /><CurrencySymbol /><IsIndependantCurrency>false</IsIndependantCurrency><ShowCurrencySymbol>false</ShowCurrencySymbol><DisplayDateInUSFormat>false</DisplayDateInUSFormat></Cell></Cells><ElementDataType>nonnum:textBlockItemType</ElementDataType><SimpleDataType>na</SimpleDataType><ElementDefenition>Disclosure of accounting policy for recognizing and measuring the impairment of long-lived assets. An entity also may disclose its accounting policy for long-lived assets to be sold. This policy excludes goodwill and intangible assets.</ElementDefenition><ElementReferences>Reference 1: http://www.xbrl.org/2003/role/presentationRef

 -Publisher FASB

 -Name Accounting Standards Codification

 -Topic 235

 -SubTopic 10

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Reference 2: http://www.xbrl.org/2003/role/presentationRef

 -Publisher SEC

 -Name Staff Accounting Bulletin (SAB)

 -Number Topic 5

 -Section CC

 -Subsection 3



Reference 3: http://www.xbrl.org/2003/role/presentationRef

 -Publisher FASB

 -Name Accounting Standards Codification

 -Topic 360

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Reference 4: http://www.xbrl.org/2003/role/presentationRef

 -Publisher FASB

 -Name Statement of Financial Accounting Standard (FAS)

 -Number 144

 -Paragraph 7-15, 26, 30-37

 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009.  This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.



</ElementReferences><IsTotalLabel>false</IsTotalLabel><UnitID>0</UnitID><Label>Long-lived assets</Label></Row><Row FlagID="0"><Id>9</Id><IsAbstractGroupTitle>false</IsAbstractGroupTitle><LabelSeparator>

</LabelSeparator><Level>2</Level><ElementName>us-gaap_RevenueRecognitionPolicyTextBlock</ElementName><ElementPrefix>us-gaap_</ElementPrefix><IsBaseElement>true</IsBaseElement><BalanceType>na</BalanceType><PeriodType>duration</PeriodType><IsReportTitle>false</IsReportTitle><IsSegmentTitle>false</IsSegmentTitle><IsCalendarTitle>false</IsCalendarTitle><IsEquityPrevioslyReportedAsRow>false</IsEquityPrevioslyReportedAsRow><IsEquityAdjustmentRow>false</IsEquityAdjustmentRow><IsBeginningBalance>false</IsBeginningBalance><IsEndingBalance>false</IsEndingBalance><IsReverseSign>false</IsReverseSign><FootnoteIndexer /><Cells><Cell FlagID="0" ContextID="From2013-01-01to2013-06-30" UnitID=""><Id>1</Id><IsNumeric>false</IsNumeric><IsRatio>false</IsRatio><DisplayZeroAsNone>false</DisplayZeroAsNone><NumericAmount>0</NumericAmount><RoundedNumericAmount>0</RoundedNumericAmount><NonNumbericText>&lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"&gt;Generally, the Company recognizes revenue for
its products upon shipment to customers, provided no significant obligations remain and collection is probable. During the six
months ended June 30, 2013 and 2012, four customers accounted for approximately 90% (73% of revenue is from a related party) and
61% of revenues, respectively.&lt;/p&gt;

&lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"&gt;&amp;#160;&lt;/p&gt;

&lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"&gt;In certain instances, our ConsERV product carries
a warranty for two years for all parts contained therein with the exception of the energy recovery ventilator core which, in such
circumstances, may carry a 10 year warranty. The warranty includes replacement of defective parts. The Company has recorded an
accrual of approximately $93,000 for future warranty expenses at June 30, 2013 and December 31, 2012.&lt;/p&gt;

&lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"&gt;&amp;#160;&lt;/p&gt;

&lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"&gt;Revenue derived from the sale of licenses is
deferred and recognized as revenue on a straight-line basis over the life of the license, or until the license arrangement is terminated.
The Company recognized revenue of approximately $50,400 and $20,500 from license agreements for the three months ended June 30,
2013 and 2012, respectively. The Company recognized revenue of $100,800 and $41,000 from license agreements for the six months
ended June 30, 2013 and 2012, respectively.&lt;/p&gt;

&lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"&gt;&amp;#160;&lt;/p&gt;

&lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"&gt;The Company accounts for revenue arrangements
with multiple elements under the provisions of the Financial Accounting Standards Board (FASB) Accounting Standards Codification
(ASC) Topic 605-25, &amp;#34;Revenue Recognition&amp;#151;Multiple-Element Arrangements,&amp;#34; In order to account for these agreements,
the Company must identify the deliverables included within the agreement and evaluate which deliverables represent separate units
of accounting based on if certain criteria are met, including whether the delivered element has stand-alone value to the licensee.
The consideration received is allocated among the separate units of accounting, and the applicable revenue recognition criteria
are applied to each of the separate units.&lt;/p&gt;</NonNumbericText><FootnoteIndexer /><CurrencyCode /><CurrencySymbol /><IsIndependantCurrency>false</IsIndependantCurrency><ShowCurrencySymbol>false</ShowCurrencySymbol><DisplayDateInUSFormat>false</DisplayDateInUSFormat></Cell></Cells><ElementDataType>nonnum:textBlockItemType</ElementDataType><SimpleDataType>na</SimpleDataType><ElementDefenition>Disclosure of accounting policy for revenue recognition. If the entity has different policies for different types of revenue transactions, the policy for each material type of transaction is generally disclosed. If a sales transaction has multiple element arrangements (for example, delivery of multiple products, services or the rights to use assets) the disclosure may indicate the accounting policy for each unit of accounting as well as how units of accounting are determined and valued. The disclosure may encompass important judgment as to appropriateness of principles related to recognition of revenue. The disclosure also may indicate the entity's treatment of any unearned or deferred revenue that arises from the transaction.</ElementDefenition><ElementReferences>Reference 1: http://www.xbrl.org/2003/role/presentationRef

 -Publisher FASB

 -Name Accounting Standards Codification

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Reference 2: http://www.xbrl.org/2003/role/presentationRef

 -Publisher FASB

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 -Topic 235

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 -Publisher SEC

 -Name Staff Accounting Bulletin (SAB)

 -Number Topic 13

 -Section B

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Reference 4: http://www.xbrl.org/2003/role/presentationRef

 -Publisher FASB

 -Name Accounting Standards Codification

 -Topic 605

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Reference 5: http://www.xbrl.org/2003/role/presentationRef

 -Publisher AICPA

 -Name Accounting Principles Board Opinion (APB)

 -Number 22

 -Paragraph 8, 12, 13

 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009.  This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.



Reference 6: http://www.xbrl.org/2003/role/presentationRef

 -Publisher FASB

 -Name Accounting Standards Codification

 -Topic 235

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</ElementReferences><IsTotalLabel>false</IsTotalLabel><UnitID>0</UnitID><Label>Revenue recognition</Label></Row><Row FlagID="0"><Id>10</Id><IsAbstractGroupTitle>false</IsAbstractGroupTitle><LabelSeparator>

</LabelSeparator><Level>2</Level><ElementName>us-gaap_ShareBasedCompensationOptionAndIncentivePlansPolicy</ElementName><ElementPrefix>us-gaap_</ElementPrefix><IsBaseElement>true</IsBaseElement><BalanceType>na</BalanceType><PeriodType>duration</PeriodType><IsReportTitle>false</IsReportTitle><IsSegmentTitle>false</IsSegmentTitle><IsCalendarTitle>false</IsCalendarTitle><IsEquityPrevioslyReportedAsRow>false</IsEquityPrevioslyReportedAsRow><IsEquityAdjustmentRow>false</IsEquityAdjustmentRow><IsBeginningBalance>false</IsBeginningBalance><IsEndingBalance>false</IsEndingBalance><IsReverseSign>false</IsReverseSign><FootnoteIndexer /><Cells><Cell FlagID="0" ContextID="From2013-01-01to2013-06-30" UnitID=""><Id>1</Id><IsNumeric>false</IsNumeric><IsRatio>false</IsRatio><DisplayZeroAsNone>false</DisplayZeroAsNone><NumericAmount>0</NumericAmount><RoundedNumericAmount>0</RoundedNumericAmount><NonNumbericText>&lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"&gt;The Company recognizes all share-based awards
to employees, including grants of employee stock options, as compensation expense in the financial statements based on their fair
values. That expense will be recognized over the period during which an employee is required to provide services in exchange for
the award, known as the requisite service period (usually the vesting period).&lt;/p&gt;

&lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"&gt;&amp;#160;&lt;/p&gt;

&lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"&gt;The value of each award is estimated at the
grant date using the Black-Scholes option model with the following assumptions for awards granted during the six months ended June
30, 2013. There were no awards granted during the six months ended June 30, 2012.&lt;/p&gt;

&lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0"&gt;&amp;#160;&lt;/p&gt;

&lt;table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"&gt;
&lt;tr style="vertical-align: bottom"&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;
    &lt;td colspan="2" style="border-bottom: black 1.5pt solid"&gt;
        &lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"&gt;&lt;b&gt;Six Months&lt;/b&gt;&lt;/p&gt;
        &lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"&gt;&lt;b&gt;Ended June 30,&lt;/b&gt;&lt;/p&gt;
        &lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"&gt;&lt;b&gt;2013&lt;/b&gt;&lt;/p&gt;&lt;/td&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;&lt;/tr&gt;
&lt;tr style="vertical-align: bottom; background-color: #CCEEFF"&gt;
    &lt;td style="width: 89%"&gt;&lt;font style="font-size: 10pt"&gt;Dividend rate&lt;/font&gt;&lt;/td&gt;
    &lt;td style="width: 1%"&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="width: 1%"&gt;&amp;#160;&lt;/td&gt;
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&lt;tr style="vertical-align: bottom; background-color: white"&gt;
    &lt;td&gt;&lt;font style="font-size: 10pt"&gt;Risk free interest rate&lt;/font&gt;&lt;/td&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;
    &lt;td nowrap="nowrap" style="text-align: right"&gt;&lt;font style="font-size: 10pt"&gt;2.03% &amp;#150; 2.20&lt;/font&gt;&lt;/td&gt;
    &lt;td&gt;&lt;font style="font-size: 10pt"&gt;%&lt;/font&gt;&lt;/td&gt;&lt;/tr&gt;
&lt;tr style="vertical-align: bottom; background-color: #CCEEFF"&gt;
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    &lt;td&gt;&amp;#160;&lt;/td&gt;
    &lt;td colspan="2" style="text-align: right"&gt;&lt;font style="font-size: 10pt"&gt;10 years&lt;/font&gt;&lt;/td&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;&lt;/tr&gt;
&lt;tr style="vertical-align: bottom; background-color: white"&gt;
    &lt;td&gt;&lt;font style="font-size: 10pt"&gt;Expected volatility&lt;/font&gt;&lt;/td&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="text-align: right"&gt;&lt;font style="font-size: 10pt"&gt;177&lt;/font&gt;&lt;/td&gt;
    &lt;td&gt;&lt;font style="font-size: 10pt"&gt;%&lt;/font&gt;&lt;/td&gt;&lt;/tr&gt;
&lt;/table&gt;
&lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0"&gt;&amp;#160;&lt;/p&gt;

&lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"&gt;The basis for the above assumptions are as
follows: the dividend rate is based upon the Company&amp;#146;s history of dividends; the risk-free interest rate for periods within
the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of grant; the expected term was
calculated based on the Company&amp;#146;s historical pattern of options granted and the period of time they are expected to be outstanding;
and expected volatility was calculated by review of the Company&amp;#146;s and a peer Company&amp;#146;s historical activity.&lt;/p&gt;</NonNumbericText><FootnoteIndexer /><CurrencyCode /><CurrencySymbol /><IsIndependantCurrency>false</IsIndependantCurrency><ShowCurrencySymbol>false</ShowCurrencySymbol><DisplayDateInUSFormat>false</DisplayDateInUSFormat></Cell></Cells><ElementDataType>nonnum:textBlockItemType</ElementDataType><SimpleDataType>na</SimpleDataType><ElementDefenition>Disclosure of accounting policy for stock option and stock incentive plans. This disclosure may include (1) the types of stock option or incentive plans sponsored by the entity (2) the groups that participate in (or are covered by) each plan (3) significant plan provisions and (4) how stock compensation is measured, and the methodologies and significant assumptions used to determine that measurement.</ElementDefenition><ElementReferences>Reference 1: http://www.xbrl.org/2003/role/presentationRef

 -Publisher FASB

 -Name Accounting Standards Codification

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Reference 2: http://www.xbrl.org/2003/role/presentationRef

 -Publisher FASB

 -Name Statement of Financial Accounting Standard (FAS)

 -Number 123R

 -Paragraph A240

 -Subparagraph a

 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009.  This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.



Reference 3: http://www.xbrl.org/2003/role/presentationRef

 -Publisher FASB

 -Name Accounting Standards Codification

 -Topic 718

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Reference 4: http://www.xbrl.org/2003/role/presentationRef

 -Publisher FASB

 -Name Accounting Standards Codification

 -Topic 718

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Reference 5: http://www.xbrl.org/2003/role/presentationRef

 -Publisher FASB

 -Name Emerging Issues Task Force (EITF)

 -Number 06-11

 -Paragraph 7

 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009.  This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.



</ElementReferences><IsTotalLabel>false</IsTotalLabel><UnitID>0</UnitID><Label>Employee stock based compensation</Label></Row><Row FlagID="0"><Id>11</Id><IsAbstractGroupTitle>false</IsAbstractGroupTitle><LabelSeparator>

</LabelSeparator><Level>2</Level><ElementName>us-gaap_ShareBasedCompensationOptionAndIncentivePlansDirectorPolicy</ElementName><ElementPrefix>us-gaap_</ElementPrefix><IsBaseElement>true</IsBaseElement><BalanceType>na</BalanceType><PeriodType>duration</PeriodType><IsReportTitle>false</IsReportTitle><IsSegmentTitle>false</IsSegmentTitle><IsCalendarTitle>false</IsCalendarTitle><IsEquityPrevioslyReportedAsRow>false</IsEquityPrevioslyReportedAsRow><IsEquityAdjustmentRow>false</IsEquityAdjustmentRow><IsBeginningBalance>false</IsBeginningBalance><IsEndingBalance>false</IsEndingBalance><IsReverseSign>false</IsReverseSign><FootnoteIndexer /><Cells><Cell FlagID="0" ContextID="From2013-01-01to2013-06-30" UnitID=""><Id>1</Id><IsNumeric>false</IsNumeric><IsRatio>false</IsRatio><DisplayZeroAsNone>false</DisplayZeroAsNone><NumericAmount>0</NumericAmount><RoundedNumericAmount>0</RoundedNumericAmount><NonNumbericText>&lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"&gt;The Company&amp;#146;s accounting policy for equity
instruments issued to consultants and vendors in exchange for goods and services follows the provisions of ASC 505-50, &lt;i&gt;Equity-Based&amp;#160;Payments&amp;#160;to&amp;#160;Non-Employees&lt;/i&gt;.
Stock based compensation related to non-employees is accounted for based on the fair value of the related stock or options or the
fair value of the services, whichever is more readily determinable. The measurement date for the fair value of the equity instruments
issued is determined at the earlier of (i) the date at which a commitment for performance by the consultant or vendor is reached
or (ii) the date at which the consultant or vendor&amp;#146;s performance is complete. In the case of equity instruments issued to
consultants, the fair value of the equity instrument is recognized over the term of the consulting agreement. During the six months
ended June 30, 2013 the Company issued 168,000 options valued at $19,105 for consulting services rendered. During the six months
ended June 30, 2012, the Company did not issue any non-employee stock based compensation.&lt;/p&gt;

&lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"&gt;&amp;#160;&lt;/p&gt;

&lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"&gt;The fair value of stock options issued to consultants
during the six months ended June 30, 2013 was calculated using the Black-Scholes model with the following assumptions: Expected
life in years: 2 years; Estimated volatility 165%; Risk-free interest rate: 0.26%; Dividend yield: 0%.&lt;/p&gt;</NonNumbericText><FootnoteIndexer /><CurrencyCode /><CurrencySymbol /><IsIndependantCurrency>false</IsIndependantCurrency><ShowCurrencySymbol>false</ShowCurrencySymbol><DisplayDateInUSFormat>false</DisplayDateInUSFormat></Cell></Cells><ElementDataType>nonnum:textBlockItemType</ElementDataType><SimpleDataType>na</SimpleDataType><ElementDefenition>Disclosure of accounting policy for director stock option and stock incentive plans. This disclosure may include (1) the types of director stock option or incentive plans sponsored by the entity (2) significant plan provisions and (3) how stock compensation is measured, and the methodologies and significant assumptions used to determine that measurement.</ElementDefenition><ElementReferences>Reference 1: http://www.xbrl.org/2003/role/presentationRef

 -Publisher FASB

 -Name Accounting Standards Codification

 -Topic 235

 -SubTopic 10

 -Section 50

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Reference 2: http://www.xbrl.org/2003/role/presentationRef

 -Publisher FASB

 -Name Statement of Financial Accounting Standard (FAS)

 -Number 123R

 -Paragraph 4, 9-15

 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009.  This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.



Reference 3: http://www.xbrl.org/2003/role/presentationRef

 -Publisher FASB

 -Name Accounting Standards Codification

 -Topic 718

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 -URI http://asc.fasb.org/subtopic&amp;trid=2228939



</ElementReferences><IsTotalLabel>false</IsTotalLabel><UnitID>0</UnitID><Label>Non-employee stock-based compensation</Label></Row><Row FlagID="0"><Id>12</Id><IsAbstractGroupTitle>false</IsAbstractGroupTitle><LabelSeparator>

</LabelSeparator><Level>2</Level><ElementName>us-gaap_ResearchAndDevelopmentExpensePolicy</ElementName><ElementPrefix>us-gaap_</ElementPrefix><IsBaseElement>true</IsBaseElement><BalanceType>na</BalanceType><PeriodType>duration</PeriodType><IsReportTitle>false</IsReportTitle><IsSegmentTitle>false</IsSegmentTitle><IsCalendarTitle>false</IsCalendarTitle><IsEquityPrevioslyReportedAsRow>false</IsEquityPrevioslyReportedAsRow><IsEquityAdjustmentRow>false</IsEquityAdjustmentRow><IsBeginningBalance>false</IsBeginningBalance><IsEndingBalance>false</IsEndingBalance><IsReverseSign>false</IsReverseSign><FootnoteIndexer /><Cells><Cell FlagID="0" ContextID="From2013-01-01to2013-06-30" UnitID=""><Id>1</Id><IsNumeric>false</IsNumeric><IsRatio>false</IsRatio><DisplayZeroAsNone>false</DisplayZeroAsNone><NumericAmount>0</NumericAmount><RoundedNumericAmount>0</RoundedNumericAmount><NonNumbericText>&lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"&gt;Expenditures for research, development and
engineering of products are expensed as incurred. For the three and six months ended June 30, 2013, the Company incurred research
and development costs of approximately $206,800 and $326,700 respectively. For the three and six months ended June 30, 2012, the
Company incurred research and development costs of approximately $143,400 and $302,200, respectively. The Company accounts for
proceeds received from government grants for research as a reduction in research and development costs. For the three and six months
ended June 30, 2012, the Company recorded approximately $0 and $67,200, respectively, in grant proceeds against research and development
expenses on the statement of operations. For the three and six months ended June 30, 2013, the Company did not receive any grant
proceeds.&lt;/p&gt;</NonNumbericText><FootnoteIndexer /><CurrencyCode /><CurrencySymbol /><IsIndependantCurrency>false</IsIndependantCurrency><ShowCurrencySymbol>false</ShowCurrencySymbol><DisplayDateInUSFormat>false</DisplayDateInUSFormat></Cell></Cells><ElementDataType>nonnum:textBlockItemType</ElementDataType><SimpleDataType>na</SimpleDataType><ElementDefenition>Disclosure of accounting policy for costs it has incurred (1) in a planned search or critical investigation aimed at discovery of new knowledge with the hope that such knowledge will be useful in developing a new product or service, a new process or technique, or in bringing about a significant improvement to an existing product or process; or (2) to translate research findings or other knowledge into a plan or design for a new product or process or for a significant improvement to an existing product or process.</ElementDefenition><ElementReferences>Reference 1: http://www.xbrl.org/2003/role/presentationRef

 -Publisher FASB

 -Name Accounting Standards Codification

 -Topic 235

 -SubTopic 10

 -Section 50

 -Paragraph 3

 -URI http://asc.fasb.org/extlink&amp;oid=6367646&amp;loc=d3e18780-107790



Reference 2: http://www.xbrl.org/2003/role/presentationRef

 -Publisher FASB

 -Name Accounting Standards Codification

 -Topic 730

 -SubTopic 10

 -URI http://asc.fasb.org/subtopic&amp;trid=2127266



Reference 3: http://www.xbrl.org/2003/role/presentationRef

 -Publisher FASB

 -Name Accounting Standards Codification

 -Glossary Research and Development

 -URI http://asc.fasb.org/extlink&amp;oid=6523717



Reference 4: http://www.xbrl.org/2003/role/presentationRef

 -Publisher FASB

 -Name Statement of Financial Accounting Standard (FAS)

 -Number 2

 -Paragraph 8, 12, 13

 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009.  This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.



Reference 5: http://www.xbrl.org/2003/role/presentationRef

 -Publisher FASB

 -Name FASB Interpretation (FIN)

 -Number 6

 -Paragraph 5, 6, 8

 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009.  This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.



Reference 6: http://www.xbrl.org/2003/role/presentationRef

 -Publisher FASB

 -Name Statement of Financial Accounting Standard (FAS)

 -Number 141

 -Paragraph 42

 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009.  This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.



</ElementReferences><IsTotalLabel>false</IsTotalLabel><UnitID>0</UnitID><Label>Research and development expenses and grant proceeds</Label></Row><Row FlagID="0"><Id>13</Id><IsAbstractGroupTitle>false</IsAbstractGroupTitle><LabelSeparator>

</LabelSeparator><Level>2</Level><ElementName>us-gaap_GovernmentContractorsPolicyPolicyTextBlock</ElementName><ElementPrefix>us-gaap_</ElementPrefix><IsBaseElement>true</IsBaseElement><BalanceType>na</BalanceType><PeriodType>duration</PeriodType><IsReportTitle>false</IsReportTitle><IsSegmentTitle>false</IsSegmentTitle><IsCalendarTitle>false</IsCalendarTitle><IsEquityPrevioslyReportedAsRow>false</IsEquityPrevioslyReportedAsRow><IsEquityAdjustmentRow>false</IsEquityAdjustmentRow><IsBeginningBalance>false</IsBeginningBalance><IsEndingBalance>false</IsEndingBalance><IsReverseSign>false</IsReverseSign><FootnoteIndexer /><Cells><Cell FlagID="0" ContextID="From2013-01-01to2013-06-30" UnitID=""><Id>1</Id><IsNumeric>false</IsNumeric><IsRatio>false</IsRatio><DisplayZeroAsNone>false</DisplayZeroAsNone><NumericAmount>0</NumericAmount><RoundedNumericAmount>0</RoundedNumericAmount><NonNumbericText>&lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"&gt;Grants are recognized when there is reasonable
assurance that the grant will be received and that any conditions associated with the grant will be met. When grants are received
related to property and equipment, the Company reduces the basis of the assets resulting in lower depreciation expense over the
life of the associated asset. Grants received related to expenses are reflected as a reduction of the associated expense in the
period in which the expense is incurred.&lt;/p&gt;</NonNumbericText><FootnoteIndexer /><CurrencyCode /><CurrencySymbol /><IsIndependantCurrency>false</IsIndependantCurrency><ShowCurrencySymbol>false</ShowCurrencySymbol><DisplayDateInUSFormat>false</DisplayDateInUSFormat></Cell></Cells><ElementDataType>nonnum:textBlockItemType</ElementDataType><SimpleDataType>na</SimpleDataType><ElementDefenition>Disclosure of accounting policy for government contractors.</ElementDefenition><ElementReferences>Reference 1: http://www.xbrl.org/2003/role/presentationRef

 -Publisher FASB

 -Name Accounting Standards Codification

 -Topic 235

 -SubTopic 10

 -Section 50

 -Paragraph 3

 -URI http://asc.fasb.org/extlink&amp;oid=6367646&amp;loc=d3e18780-107790



Reference 2: http://www.xbrl.org/2003/role/presentationRef

 -Publisher FASB

 -Name Accounting Standards Codification

 -Topic 912

 -SubTopic 235

 -Section 50

 -Paragraph 1

 -URI http://asc.fasb.org/extlink&amp;oid=6471718&amp;loc=d3e53972-109395



</ElementReferences><IsTotalLabel>false</IsTotalLabel><UnitID>0</UnitID><Label>Government grants</Label></Row><Row FlagID="0"><Id>14</Id><IsAbstractGroupTitle>false</IsAbstractGroupTitle><LabelSeparator>

</LabelSeparator><Level>2</Level><ElementName>us-gaap_FairValueOfFinancialInstrumentsPolicy</ElementName><ElementPrefix>us-gaap_</ElementPrefix><IsBaseElement>true</IsBaseElement><BalanceType>na</BalanceType><PeriodType>duration</PeriodType><IsReportTitle>false</IsReportTitle><IsSegmentTitle>false</IsSegmentTitle><IsCalendarTitle>false</IsCalendarTitle><IsEquityPrevioslyReportedAsRow>false</IsEquityPrevioslyReportedAsRow><IsEquityAdjustmentRow>false</IsEquityAdjustmentRow><IsBeginningBalance>false</IsBeginningBalance><IsEndingBalance>false</IsEndingBalance><IsReverseSign>false</IsReverseSign><FootnoteIndexer /><Cells><Cell FlagID="0" ContextID="From2013-01-01to2013-06-30" UnitID=""><Id>1</Id><IsNumeric>false</IsNumeric><IsRatio>false</IsRatio><DisplayZeroAsNone>false</DisplayZeroAsNone><NumericAmount>0</NumericAmount><RoundedNumericAmount>0</RoundedNumericAmount><NonNumbericText>&lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"&gt;Fair value is defined as the price that would
be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement
date. The fair value hierarchy distinguishes between (1) market participant assumptions developed based on market data obtained
from independent sources (observable inputs) and (2) an entity&amp;#146;s own assumptions about market participant assumptions developed
based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three
broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities
(Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described
below:&lt;/p&gt;

&lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"&gt;&amp;#160;&lt;/p&gt;

&lt;table cellspacing="0" cellpadding="0" style="width: 100%"&gt;
&lt;tr style="vertical-align: top"&gt;
    &lt;td style="width: 8%; font: 10pt Times New Roman, Times, Serif; text-align: center"&gt;&lt;font style="font-size: 10pt"&gt;&amp;#149;&amp;#160;&lt;/font&gt;&lt;/td&gt;
    &lt;td style="width: 92%; font: 10pt Times New Roman, Times, Serif; text-align: justify"&gt;&lt;font style="font-size: 10pt"&gt;Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.&lt;/font&gt;&lt;/td&gt;&lt;/tr&gt;
&lt;/table&gt;
&lt;p style="font: 12pt Times New Roman, Times, Serif; margin: 0"&gt;&lt;/p&gt;

&lt;table cellspacing="0" cellpadding="0" style="width: 100%"&gt;
&lt;tr style="vertical-align: top"&gt;
    &lt;td style="width: 8%; font: 10pt Times New Roman, Times, Serif; text-align: center"&gt;&lt;font style="font-size: 10pt"&gt;&amp;#149;&lt;/font&gt;&lt;/td&gt;
    &lt;td style="width: 92%; font: 10pt Times New Roman, Times, Serif; text-align: justify"&gt;&lt;font style="font-size: 10pt"&gt;Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means.&lt;/font&gt;&lt;/td&gt;&lt;/tr&gt;
&lt;/table&gt;
&lt;p style="font: 12pt Times New Roman, Times, Serif; margin: 0"&gt;&lt;/p&gt;

&lt;table cellspacing="0" cellpadding="0" style="width: 100%"&gt;
&lt;tr style="vertical-align: top"&gt;
    &lt;td style="width: 8%; font: 10pt Times New Roman, Times, Serif; text-align: center"&gt;&lt;font style="font-size: 10pt"&gt;&amp;#149;&amp;#160;&lt;/font&gt;&lt;/td&gt;
    &lt;td style="width: 92%; font: 10pt Times New Roman, Times, Serif; text-align: justify"&gt;&lt;font style="font-size: 10pt"&gt;Level 3 - Inputs that are both significant to the fair value measurement and unobservable.&lt;/font&gt;&lt;/td&gt;&lt;/tr&gt;
&lt;/table&gt;
&lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"&gt;&amp;#160;&lt;/p&gt;

&lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"&gt;Fair value estimates discussed herein are based
upon certain market assumptions and pertinent information available to management as of June 30, 2013. The Company uses the market
approach to measure fair value for its Level 1 financial assets and liabilities, which include cash equivalents of $300 at June
30, 2013. The market approach uses prices and other relevant information generated by market transactions involving identical or
comparable assets and liabilities.&lt;/p&gt;

&lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"&gt;&amp;#160;&lt;/p&gt;

&lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"&gt;The respective carrying value of certain on-balance
sheet financial instruments approximated their fair values due to the short-term nature of these instruments. These financial instruments
include cash, accounts receivable, accounts payable, accrued compensation and accrued expenses.&lt;/p&gt;</NonNumbericText><FootnoteIndexer /><CurrencyCode /><CurrencySymbol /><IsIndependantCurrency>false</IsIndependantCurrency><ShowCurrencySymbol>false</ShowCurrencySymbol><DisplayDateInUSFormat>false</DisplayDateInUSFormat></Cell></Cells><ElementDataType>nonnum:textBlockItemType</ElementDataType><SimpleDataType>na</SimpleDataType><ElementDefenition>Disclosure of accounting policy for determining the fair value of financial instruments.</ElementDefenition><ElementReferences>Reference 1: http://www.xbrl.org/2003/role/presentationRef

 -Publisher FASB

 -Name Accounting Standards Codification

 -Topic 235

 -SubTopic 10

 -Section 50

 -Paragraph 3

 -URI http://asc.fasb.org/extlink&amp;oid=6367646&amp;loc=d3e18780-107790



Reference 2: http://www.xbrl.org/2003/role/presentationRef

 -Publisher FASB

 -Name Accounting Standards Codification

 -Topic 820

 -SubTopic 10

 -URI http://asc.fasb.org/subtopic&amp;trid=2155942



Reference 3: http://www.xbrl.org/2003/role/presentationRef

 -Publisher FASB

 -Name Statement of Financial Accounting Standard (FAS)

 -Number 107

 -Paragraph 8, 10, 12, 13, 14

 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009.  This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.



</ElementReferences><IsTotalLabel>false</IsTotalLabel><UnitID>0</UnitID><Label>Financial instruments</Label></Row><Row FlagID="0"><Id>15</Id><IsAbstractGroupTitle>false</IsAbstractGroupTitle><LabelSeparator>

</LabelSeparator><Level>2</Level><ElementName>us-gaap_IncomeTaxPolicyTextBlock</ElementName><ElementPrefix>us-gaap_</ElementPrefix><IsBaseElement>true</IsBaseElement><BalanceType>na</BalanceType><PeriodType>duration</PeriodType><IsReportTitle>false</IsReportTitle><IsSegmentTitle>false</IsSegmentTitle><IsCalendarTitle>false</IsCalendarTitle><IsEquityPrevioslyReportedAsRow>false</IsEquityPrevioslyReportedAsRow><IsEquityAdjustmentRow>false</IsEquityAdjustmentRow><IsBeginningBalance>false</IsBeginningBalance><IsEndingBalance>false</IsEndingBalance><IsReverseSign>false</IsReverseSign><FootnoteIndexer /><Cells><Cell FlagID="0" ContextID="From2013-01-01to2013-06-30" UnitID=""><Id>1</Id><IsNumeric>false</IsNumeric><IsRatio>false</IsRatio><DisplayZeroAsNone>false</DisplayZeroAsNone><NumericAmount>0</NumericAmount><RoundedNumericAmount>0</RoundedNumericAmount><NonNumbericText>&lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"&gt;Income taxes are accounted for under the asset
and liability method. Deferred income tax assets and liabilities are computed on the basis of differences between the financial
statement and tax basis of assets and liabilities that will result in taxable or deductible amounts in the future based upon enacted
tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances
are established when necessary to reduce deferred tax assets to the amount expected to be realized.&lt;/p&gt;

&lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"&gt;&amp;#160;&lt;/p&gt;

&lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"&gt;The Company identifies and evaluates uncertain
tax positions, if any, and recognizes the impact of uncertain tax positions for which there is a less than more-likely-than-not
probability of the position being upheld when reviewed by the relevant taxing authority. Such positions are deemed to be unrecognized
tax benefits and a corresponding liability is established on the balance sheet. The Company has not recognized a liability for
uncertain tax positions. If there were an unrecognized tax benefit, the Company would recognize interest accrued related to unrecognized
tax benefits in interest expense and penalties in operating expenses. The Company&amp;#146;s remaining open tax years subject to examination
by the Internal Revenue Service include the years ended December 31, 2009 through 2012.&lt;/p&gt;</NonNumbericText><FootnoteIndexer /><CurrencyCode /><CurrencySymbol /><IsIndependantCurrency>false</IsIndependantCurrency><ShowCurrencySymbol>false</ShowCurrencySymbol><DisplayDateInUSFormat>false</DisplayDateInUSFormat></Cell></Cells><ElementDataType>nonnum:textBlockItemType</ElementDataType><SimpleDataType>na</SimpleDataType><ElementDefenition>Disclosure of accounting policy for income taxes, which may include its accounting policies for recognizing and measuring deferred tax assets and liabilities and related valuation allowances, recognizing investment tax credits, operating loss carryforwards, tax credit carryforwards, and other carryforwards, methodologies for determining its effective income tax rate and the characterization of interest and penalties in the financial statements.</ElementDefenition><ElementReferences>Reference 1: http://www.xbrl.org/2003/role/presentationRef

 -Publisher AICPA

 -Name Accounting Principles Board Opinion (APB)

 -Number 4

 -Paragraph 11

 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009.  This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.



Reference 2: http://www.xbrl.org/2003/role/presentationRef

 -Publisher FASB

 -Name FASB Interpretation (FIN)

 -Number 48

 -Paragraph 20

 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009.  This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.



Reference 3: http://www.xbrl.org/2003/role/presentationRef

 -Publisher FASB

 -Name Accounting Standards Codification

 -Topic 235

 -SubTopic 10

 -Section 50

 -Paragraph 3

 -URI http://asc.fasb.org/extlink&amp;oid=6367646&amp;loc=d3e18780-107790



Reference 4: http://www.xbrl.org/2003/role/presentationRef

 -Publisher FASB

 -Name Accounting Standards Codification

 -Topic 740

 -SubTopic 10

 -Section 45

 -Paragraph 25

 -URI http://asc.fasb.org/extlink&amp;oid=21917399&amp;loc=d3e32247-109318



Reference 5: http://www.xbrl.org/2003/role/presentationRef

 -Publisher FASB

 -Name Accounting Standards Codification

 -Topic 740

 -SubTopic 10

 -Section 50

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 -URI http://asc.fasb.org/extlink&amp;oid=6907707&amp;loc=d3e32840-109319



Reference 6: http://www.xbrl.org/2003/role/presentationRef

 -Publisher FASB

 -Name Accounting Standards Codification

 -Topic 740

 -SubTopic 30

 -URI http://asc.fasb.org/subtopic&amp;trid=2144749



Reference 7: http://www.xbrl.org/2003/role/presentationRef

 -Publisher FASB

 -Name Accounting Standards Codification

 -Topic 954

 -SubTopic 740

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Reference 8: http://www.xbrl.org/2003/role/presentationRef

 -Publisher FASB

 -Name Accounting Standards Codification

 -Topic 740

 -SubTopic 10

 -URI http://asc.fasb.org/subtopic&amp;trid=2144681



Reference 9: http://www.xbrl.org/2003/role/presentationRef

 -Publisher FASB

 -Name Accounting Standards Codification

 -Topic 740

 -SubTopic 10

 -Section 50

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 -Subparagraph (b)

 -URI http://asc.fasb.org/extlink&amp;oid=6907707&amp;loc=d3e32809-109319



Reference 10: http://www.xbrl.org/2003/role/presentationRef

 -Publisher FASB

 -Name Accounting Standards Codification

 -Topic 740

 -SubTopic 10

 -Section 45

 -Paragraph 28

 -URI http://asc.fasb.org/extlink&amp;oid=21917399&amp;loc=d3e32280-109318



Reference 11: http://www.xbrl.org/2003/role/presentationRef

 -Publisher FASB

 -Name Statement of Financial Accounting Standard (FAS)

 -Number 109

 -Paragraph 6-34, 43, 47, 49

 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009.  This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.



</ElementReferences><IsTotalLabel>false</IsTotalLabel><UnitID>0</UnitID><Label>Income taxes</Label></Row><Row FlagID="0"><Id>16</Id><IsAbstractGroupTitle>false</IsAbstractGroupTitle><LabelSeparator>

</LabelSeparator><Level>2</Level><ElementName>us-gaap_EarningsPerSharePolicyTextBlock</ElementName><ElementPrefix>us-gaap_</ElementPrefix><IsBaseElement>true</IsBaseElement><BalanceType>na</BalanceType><PeriodType>duration</PeriodType><IsReportTitle>false</IsReportTitle><IsSegmentTitle>false</IsSegmentTitle><IsCalendarTitle>false</IsCalendarTitle><IsEquityPrevioslyReportedAsRow>false</IsEquityPrevioslyReportedAsRow><IsEquityAdjustmentRow>false</IsEquityAdjustmentRow><IsBeginningBalance>false</IsBeginningBalance><IsEndingBalance>false</IsEndingBalance><IsReverseSign>false</IsReverseSign><FootnoteIndexer /><Cells><Cell FlagID="0" ContextID="From2013-01-01to2013-06-30" UnitID=""><Id>1</Id><IsNumeric>false</IsNumeric><IsRatio>false</IsRatio><DisplayZeroAsNone>false</DisplayZeroAsNone><NumericAmount>0</NumericAmount><RoundedNumericAmount>0</RoundedNumericAmount><NonNumbericText>&lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"&gt;Basic income (loss) per share is computed by
dividing net income (loss) attributable to common stockholders by the weighted average common shares outstanding for the period.
Diluted income (loss) per share is computed giving effect to all potentially dilutive common shares. Potentially dilutive common
shares may consist of incremental shares issuable upon the exercise of stock options and warrants and the conversion of notes payable
to common stock. In periods in which a net loss has been incurred, all potentially dilutive common shares are considered anti-dilutive
and thus are excluded from the calculation. For each of the three and six months ended June 30, 2013, the Company had 36,881,319
potentially dilutive common shares that were not included in the computation of income (loss) per share. For the three and six
months ended June 30, 2012, the Company had 53,864,169 and 55,463,847 potentially dilutive common shares that were not included
in the computation of income (loss) per share.&lt;/p&gt;

&lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"&gt;&amp;#160;&lt;/p&gt;

&lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"&gt;The following sets forth the computation of
basic and diluted net (loss) earnings per common share for the three and six months ended June 30, 2013 and 2012:&lt;/p&gt;

&lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0"&gt;&amp;#160;&lt;/p&gt;

&lt;table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%"&gt;
&lt;tr style="vertical-align: bottom"&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;
    &lt;td colspan="6" style="border-bottom: black 1.5pt solid"&gt;
        &lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"&gt;&lt;b&gt;For the Three Months&lt;/b&gt;&lt;/p&gt;
        &lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"&gt;&lt;b&gt;Ended June 30,&lt;/b&gt;&lt;/p&gt;&lt;/td&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;
    &lt;td colspan="6" style="border-bottom: black 1.5pt solid"&gt;
        &lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"&gt;&lt;b&gt;For the Six Months&lt;/b&gt;&lt;/p&gt;
        &lt;p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"&gt;&lt;b&gt;Ended June 30,&lt;/b&gt;&lt;/p&gt;&lt;/td&gt;
    &lt;td&gt;&amp;#160;&lt;/td&gt;&lt;/tr&gt;
&lt;tr style="vertical-align: bottom"&gt;
    &lt;td style="width: 52%"&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="width: 1%"&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="width: 1%; border-bottom: black 1.5pt solid"&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="width: 9%; border-bottom: black 1.5pt solid; text-align: center"&gt;&lt;font style="font-size: 10pt"&gt;&lt;b&gt;2013&lt;/b&gt;&lt;/font&gt;&lt;/td&gt;
    &lt;td style="width: 1%"&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="width: 1%"&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="width: 1%; border-bottom: black 1.5pt solid"&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="width: 9%; border-bottom: black 1.5pt solid; text-align: center"&gt;&lt;font style="font-size: 10pt"&gt;&lt;b&gt;2012&lt;/b&gt;&lt;/font&gt;&lt;/td&gt;
    &lt;td style="width: 1%"&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="width: 1%"&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="width: 1%; border-bottom: black 1.5pt solid"&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="width: 9%; border-bottom: black 1.5pt solid; text-align: center"&gt;&lt;font style="font-size: 10pt"&gt;&lt;b&gt;2013&lt;/b&gt;&lt;/font&gt;&lt;/td&gt;
    &lt;td style="width: 1%"&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="width: 1%"&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="width: 1%; border-bottom: black 1.5pt solid"&gt;&amp;#160;&lt;/td&gt;
    &lt;td style="width: 9%; border-bottom: black 1.5pt solid; text-align: center"&gt;&lt;font style="font-size: 10pt"&gt;&lt;b&gt;2012&lt;/b&gt;&lt;/font&gt;&lt;/td&gt;
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&lt;tr style="vertical-align: bottom"&gt;
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 -Publisher FASB

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