Letter of Credit

3 Months Ended

Jun. 30, 2012

Letter of Credit:

Letter of Credit

NOTE 4 - LETTER OF CREDIT

On November 30, 2011, the Company entered into an agreement with two individuals pursuant to which such individuals agreed to act as sureties in connection with a combined $500,000 line of credit from a financial institution and certain extensions of credit by critical vendors which are necessary for the Company’s business.  Pursuant to such agreements, in consideration of the assisting parties’ extension of credit thereunder, the Company agreed to pay a total of $200,000 to the assisting parties or, at the assisting parties’ election, the assisting parties may each elect to receive 757,576 shares of common stock in the Company.    The assisting parties agreed to make assistance available to the Company within 10 business days of the Company’s written request and provide a guaranty to a financial institution.  The Company recorded a deferred financing cost that is being amortized over the life of the agreements.

Pursuant to such agreements, on May 10, 2012, the Company secured an irrevocable stand-by letter of credit in the amount of $50,000 with a financial institution for the benefit of ERCOT.  The letter of credit, which expires on May 10, 2013, is subject to automatic extension and renewal provisions.