NOTE 23.

SUBSEQUENT EVENTS

Common Stock Transactions

On March 14, 2013, we entered into entered into a Securities Purchase Agreement (the "March SPA") with Kerry P. Gray, the Company's Chairman, President, and Chief Executive Officer and Terrance K. Wallberg, the Company's Vice President and Chief Financial Officer (collectively, the "Investors") relating to an equity investment of $440,000 by the Investors for 1,100,000 shares of our common stock, par value $0.001 per share (the "March Shares") and warrants to purchase up to 660,000 shares of our common stock (the "March Warrants") (the "March 2013 Offering"). Under the March SPA, the purchase and sale of the March Shares and March Warrants will take place at four closings over the next twelve months, with $88,000 being funded at the initial closing under the March SPA, $110,000 being funded on the four-month anniversary of the initial closing, $132,000 being funded on the eight-month anniversary of the initial closing, and $110,000 being funded on the one-year anniversary of the initial closing. The March Warrants have a fixed exercise price of $0.60 per share, become exercisable in tranches on each of the four funding dates, and expire on the five-year anniversary of the initial closing.

On December 21, 2012, we entered into a Securities Purchase Agreement (the "SPA") with IPMD GmbH ("IPMD") relating to an equity investment of $2,000,000 by IPMD for 5,000,000 shares of our common stock, par value $0.001 per share (the "Shares") and warrants to purchase up to 3,000,000 shares of our common stock (the "Warrants") (the "January 2013 Offering"). Under the SPA, the purchase and sale of the Shares and Warrants will take place at four closings over the next twelve months, with $400,000 being funded at the initial closing under the SPA, $500,000 being funded on the four-month anniversary of the initial closing, $600,000 being funded on the eight-month anniversary of the initial closing, and $500,000 being funded on the one-year anniversary of the initial closing. The Warrants have a fixed exercise price of $0.60 per share, become exercisable in tranches on each of the four funding dates, and expire on the one-year anniversary of the initial closing. In the SPA, we also agree to appoint up to two directors nominated by IPMD to serve on our Board of Directors.

On January 3, 2013, we closed the January 2013 Offering and received the initial tranche of $400,000.

On January 17, 2013, the Board of Directors of the Company appointed Helmut Kerschbaumer and Klaus Kuehne to each serve as a director of the Company. Messrs. Kerschbaumer and Kuehne are the designees of IPMD to serve on the Company's Board of Directors pursuant to covenants in the SPA with IPMD.

Operating Lease

On February 22, 2013, we executed an Amendment to Lease Agreement (the "Lease Amendment") that renewed and extended our lease for a period of 24 months so that the lease expires on March 31, 2015. The Lease Amendment will require a minimum monthly lease obligation of $9,038, which is inclusive of monthly operating expenses, until March 31, 2014 and at such time will increase to $9,224, which is inclusive of monthly operating expenses. The Lease Amendment includes an option whereby we may convert the term of our lease renewal from a two year term to a five year term by providing written notice on or before October 1, 2013. If so elected, the minimum monthly lease obligation for the remainder of the first year shall be reduced to $8,661, which is inclusive of monthly operating expenses, effective on the first day of the month following our election and the minimum monthly lease obligation shall increase annually every April 1st thereafter by $186 per month until March 31, 2018.