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<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Property and equipment</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Property and equipment
are recorded at cost. Additions and improvements that increase the value or extend the life of an asset are capitalized. Maintenance
and repairs are expensed as incurred. Upon sale or retirement of property and equipment, the related cost and accumulated depreciation
are removed from the accounts and any gain or loss is reflected in the consolidated statement of operations. Depreciation is computed
on a straight-line basis over the following estimated useful lives of the assets:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" align="center" style="font: 10pt Times New Roman, Times, Serif; width: 6.5in; border-collapse: collapse">
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" style="width: 37%; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black">Office equipment</font></td>
<td nowrap="nowrap" style="width: 5%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="width: 58%; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black">3 years</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black">Production equipment</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black">5 to 7 years</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black">Equipment under capital lease</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black">5 to 7 years</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black">Leasehold improvements</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black">Lesser of lease term or useful life of improvement</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Advertising and promotion costs</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Costs associated with the
advertising and promotion of our products are expensed as incurred.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
415500
0.00
0.00
0.00
0.00
16639
13081
33409
8048
63493
66517
4083
6533
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Fair value measurements</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">We measure fair value as
an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants. As such, fair value is a market-based measurement that is determined based on assumptions that market
participants would use in pricing an asset or liability. We utilize a three-tier fair value hierarchy, which prioritizes the inputs
used in measuring fair value as follows:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" align="center" style="width: 9in; font: 10pt Arial Unicode MS">
<tr style="background-color: #CCFFCC">
<td style="vertical-align: top; width: 7%"><font style="font-family: Times New Roman, Times, Serif">Level 1</font></td>
<td style="width: 1%"> </td>
<td style="vertical-align: top; width: 92%"><font style="font-family: Times New Roman, Times, Serif">Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.</font></td></tr>
<tr>
<td style="vertical-align: top"> </td>
<td> </td>
<td style="vertical-align: top"> </td></tr>
<tr style="background-color: #CCFFCC">
<td style="vertical-align: top"><font style="font-family: Times New Roman, Times, Serif">Level 2</font></td>
<td> </td>
<td style="vertical-align: top"><font style="font-family: Times New Roman, Times, Serif">Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.</font></td></tr>
<tr>
<td style="vertical-align: top"> </td>
<td> </td>
<td style="vertical-align: top"> </td></tr>
<tr style="background-color: #CCFFCC">
<td style="vertical-align: top"><font style="font-family: Times New Roman, Times, Serif">Level 3</font></td>
<td> </td>
<td style="vertical-align: top"><font style="font-family: Times New Roman, Times, Serif">Unobservable inputs where there is little or no market data, which require the reporting entity to develop its own assumptions.</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">We do not have any assets
or liabilities measured at fair value on a recurring or a non-recurring basis. Consequently, we did not have any fair value adjustments
for assets and liabilities measured at fair value at March 31, 2013 or December 31, 2012, nor any gains or losses reported in the
consolidated statement of operations that are attributable to the change in unrealized gains or losses relating to those assets
and liabilities still held at the reporting date for the periods ended March 31, 2013 and December 31, 2012.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Net loss per common share</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Basic and diluted net loss
per share has been computed by dividing our net loss by the weighted average number of common shares issued and outstanding. Convertible
preferred stock, options and warrants to purchase our common stock as well as debt which are convertible into common stock are
anti-dilutive and therefore are not included in the determination of the diluted net loss per share for three months ended March
31, 2013 and 2012. The following table presents a reconciliation of basic loss per share and excluded dilutive securities:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" align="center" style="font: 10pt Times New Roman, Times, Serif; width: 9in; border-collapse: collapse">
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" colspan="3" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt">For the Three Months Ended March 31,</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" style="width: 9%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="width: 9%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="width: 35%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="width: 24%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt">2013</font></td>
<td nowrap="nowrap" style="width: 1%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="width: 22%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt">2012</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" colspan="2" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt"> Numerator: </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" colspan="2" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt"> Net loss  </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	$	(453,472)</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	$	(321,761)</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" colspan="2" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt"> Denominator: </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" colspan="3" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt"> Weighted-average common shares outstanding </font></td>
<td nowrap="nowrap" style="border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	7,444,591 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	7,171,255 </font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" colspan="3" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt"> Basic and diluted net loss per share </font></td>
<td nowrap="nowrap" style="border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	$	(0.06)</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	$	(0.04)</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" colspan="3" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt"> Common stock warrants </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	2,536,726 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	2,127,535 </font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" colspan="3" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt"> Series A convertible preferred stock </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	1,504,620 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	625,000 </font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" colspan="2" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt"> Stock options </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	1,001,363 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	498,602 </font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" colspan="3" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt"> Convertible debt including interest </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	938,512 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	854,326 </font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" colspan="3" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt"> Excluded dilutive securities </font></td>
<td nowrap="nowrap" style="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	5,981,221 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	4,105,463 </font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
P15Y
P20Y
P5Y
P20Y
2.00
2.00
.45
.45
2.00
2.00
5.00
5.00
5.00
5.00
5.00
5.00
17904
35807
3024
11507
2139
4277
772
2678
192552
304813
4760
0
18309
47964
215621
352777
1000
5000
<table cellspacing="0" cellpadding="0" align="center" style="font: 10pt Times New Roman, Times, Serif; width: 6.5in; border-collapse: collapse">
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" style="width: 58%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="width: 1%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="width: 20%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">March 31,</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">2013</p></td>
<td nowrap="nowrap" style="width: 1%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="width: 20%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">December 31,</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">2012</p></td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt"> Expected dividend yield </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt">	-</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt">	-</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt"> Expected stock price volatility </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt">236.55%</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt">183.17% - 187.30%</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt"> Risk-free interest rate </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt">1.08%</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt">1.27% - 2.80%</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt"> Expected term (in years) </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt">5 years</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt">4 - 10 years</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt"> Weighted-average granted date fair value </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt">$0.38 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt">$0.51 </font></td></tr>
</table>
<table cellspacing="0" cellpadding="0" align="center" style="font: 10pt Times New Roman, Times, Serif; width: 6.5in; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="width: 44%; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="width: 3%; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="width: 25%; border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt">March 31, 2013</font></td>
<td nowrap="nowrap" style="width: 3%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="width: 25%; border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt">March 31, 2012</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt">Risk-Free interest rate</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt">0.84% - 1.09%</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt">1.08%</font></td></tr>
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt">Expected dividend yield</font></td>
<td nowrap="nowrap" style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt">0%</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt">0%</font></td></tr>
<tr style="background-color: #CCFFCC">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt">Volatility</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt">236.81% - 248.63%</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt">202.65%</font></td></tr>
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt">Expected life</font></td>
<td nowrap="nowrap" style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt">5 - 7 years</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt">7 years</font></td></tr>
</table>
<table cellspacing="0" cellpadding="0" align="center" style="font: 10pt Times New Roman, Times, Serif; width: 9in; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="width: 34%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="width: 2%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="width: 11%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="width: 2%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="width: 11%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="width: 2%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="width: 11%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="width: 2%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="width: 14%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">Weighted </font></td>
<td nowrap="nowrap" style="width: 2%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="width: 9%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td></tr>
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">Average</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td></tr>
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">Weighted</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">Remaining</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">Aggregate</font></td></tr>
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">Number of</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">Exercise Price</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">Average Exercise  </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">Contractual Term</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">Intrinsic</font></td></tr>
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">Shares</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">Range</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">Price</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">(Years)</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">Value</font></td></tr>
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black">Outstanding, December 31, 2011</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	659,242</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">$	0.47-$1.00</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	$	0.62</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	10</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	-</font></td></tr>
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black">Granted</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	542,857</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">$	0.40-$0.50</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	$	0.45</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	9</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	-</font></td></tr>
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black">Exercised</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	-</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	-</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	-</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	-</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	-</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black">Expired</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	-</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	-</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	-</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	-</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	-</font></td></tr>
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black">Outstanding, December 31, 2012</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	1,202,099</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">$	0.40-$1.00</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	$	0.56</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	7.74</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	-</font></td></tr>
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black">Exercisable, December 31, 2012</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	830,504</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">$	0.40-$1.00</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	$	0.57</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	8.19</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	-</font></td></tr>
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black">Granted</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	55,000</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">$	0.38</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	$	0.38</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	5</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	-</font></td></tr>
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black">Exercised</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	-</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	-</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	$	-</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	-</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	-</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black">Expired</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	-</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	-</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	$	-</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	-</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	-</font></td></tr>
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black">Outstanding, March 31, 2013</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	1,257,099</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">$	0.38-$1.00</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	$	0.55</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	7.62</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	-</font></td></tr>
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black">Exercisable, March 31, 2013</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	1,001,361</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">$	0.38-$1.00</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	$	0.57</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	8.09</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	-</font></td></tr>
</table>
<p style="margin-top: 0; margin-bottom: 0"> </p>
50000
0.8737
0.50
0.325
0.2171
8499
3489
1257099
659242
1202099
830504
1001361
.55
.62
.56
.57
.57
P7Y7M
P10Y
P7Y9M
P8Y2M
P8Y1M
0
0
0
0
0
.38
.47
.40
0.40
.38
1.00
1.00
1.00
1.00
1.00
55000
542857
0
0
0
0
.38
.40
0
0
0
0
.38
.50
0
0
0
0
.38
.45
0
0
0
0
P5Y
P9Y
P0Y
P0Y
0
0
0
0
0
0
15000
20000
180000
247242
247857
254000
200000
38000
55000
.49
5.00
.70
5.00
5.00
.70
2017-06
2019-02
2017-03
2020-01
2019-02
2017-03
2013-04
2021-10
.56
.89
.38
0.51
Entia Biosciences, Inc.
0001408299
10-Q
2013-03-31
false
--12-31
No
No
Yes
Smaller Reporting Company
Q1
2013
-249285
-426111
309462
493788
204430
313117
10552
87338
88199
46937
6281
46396
60177
67677
6453
28579
66630
96256
-0.04
-0.06
-72476
-29811
0
2450
7171255
7444591
91277
162732
0
-2450
9314
2913
-7150
13433
27900
-13260
69723
140904
66422
23066
4921
6035
274
581
-8591
20328
85632
182052
-9368
-4948
95000
187000
-34869
-41625
-33122
-10810
-1747
-30815
-59354
-120099
0
15750
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 12 – SUBSEQUENT EVENTS</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">There have been no subsequent
events as of the date of this filing.</p>
<p style="font: 10pt/115% Times New Roman, Times, Serif; margin: 0 0 10pt"><b>NOTE 1 – ORGANIZATION AND OPERATIONS</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Generic Marketing Services,
Inc. was incorporated on July 19, 2007 under the laws of the State of Nevada as a subsidiary of Basic Services, Inc., also a Nevada
corporation. On December 31, 2007, Basic Services, Inc. spun off Generic Marketing Services and on October 8, 2008, Generic Marketing
Services changed its name to Total Nutraceutical Solutions, Inc.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On January 9, 2012, the
Nevada Secretary of State accepted an amendment to our Articles of Incorporation to change the name again to Entia Biosciences,
Inc. (Entia, the Company, us, we or our) and to form a wholly owned subsidiary named Total Nutraceutical Solutions, Inc. (TNS).
Entia is an emerging biotechnology company engaged in the discovery, formulation and marketing of natural compounds and whole foods
that can be used in branded medical foods, nutraceuticals, cosmetics and other products sold by us, our TNS subsidiary and by third
parties.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On May 15, 2012, Entia
moved to its current location in order to increase its in-house research and manufacturing capability, increase its warehouse storage
capacity, and accommodate anticipated increases in order fulfillment and staffing. By moving to the larger facility, Entia was
able to vertically integrate its Vitamin D enhancement technology and the milling, blending, encapsulating, bottling, labeling,
packaging and fulfillment of its products. This move resulted in a significant improvement in production efficiencies and the cost
of its final products. Production of cosmetic products and certain nutraceuticals are still being outsourced.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">We have a history of incurring
net losses and net operating cash flow deficits. We are continually researching and developing new technologies related to our
organic nutraceutical products, including the production of medical foods for clinical studies in diabetes, anemia and Parkinson’s
disease. At March 31, 2013, we had cash and cash equivalents of $33,409. These conditions raise substantial doubt about our ability
to continue as a going concern. As a result, we anticipate that our cash and cash equivalent balances, anticipated cash flows from
operations and anticipated operating cash flows will be sufficient to meet our cash requirements through June 30, 2013.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">In order for us to continue
as a going concern beyond this point and ultimately to achieve profitability, we may be required to obtain capital from external
sources, increase revenues and reduce operating costs. The issuance of equity securities will also cause dilution to our shareholders.
If external financing sources of financing are not available or are inadequate to fund our operations, we will be required to reduce
operating costs including personnel costs, which could jeopardize our future strategic initiatives and business plans. The accompanying
consolidated financial statements have been prepared assuming that the company continues as a going concern.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The consolidated financial
statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets
or the amounts and classification of liabilities that may result from the matters discussed herein.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
43500
109900
7171175
7444591
150462
7444591
57400
37400
57
286942
286999
187000
37
186963
27704
27704
50
25451
25501
100
39900
40000
1
170456
170456
69791
69791
128540
-128540
9082
-9082
231413
231413
2000
3162
2
9998
10000
15750
3
15747
7000
7
34993
35000
21400
-21400
122500
122
48878
-49000
916
48533
48533
71113
71113
50000
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Basis of presentation and principles
of consolidation</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The accompanying consolidated
unaudited interim financial statements and related notes have been prepared in accordance with U.S. Generally Accepted Accounting
Principles (GAAP) for interim financial information, and with the rules and regulations of the United states Securities and Exchange
Commission (“SEC”) to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by U.S. GAAP for complete financial statements. The unaudited interim financial statements furnished reflect
all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to a fair statement
of the results for the interim periods presented. Unaudited interim results are not necessarily indicative of the results for the
full year. These unaudited interim financial statements should be read in conjunction with the financial statements of the Company
for the year ended December 31, 2012 and notes thereto contained in the Company’s Annual Report on Form 10-K filed with the
SEC.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">All intercompany accounts
have been eliminated for the purpose of the consolidated financial statement presentation.</p>
<p style="font: 10pt Arial Unicode MS; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Use of estimates</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The preparation of consolidated
financial statements in conformity with U.S. GAAP 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 consolidated financial
statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those
estimates.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Cash</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">We consider all highly
liquid, short-term investments with original maturities of three months or less when purchased to be cash equivalents.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Accounts receivable</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Accounts receivable are
recorded at the invoiced amount, net of allowance for doubtful accounts. The allowance for doubtful accounts is our best estimate
of the amount of probable credit losses based on specific identification of accounts in our existing accounts receivable. Outstanding
account balances are reviewed individually for collectibility. We determine the allowance based on historical write-off experience,
customer specific facts and economic conditions. Bad debt expense is included in general and administrative expenses, if any. We
consider all accounts greater than 30 days old to be past due. Account balances are charged off against allowance after all means
of collection have been exhausted and the potential for recovery is considered remote. The allowance for doubtful accounts was
$2,526 at both March 31, 2013 and December 31, 2012.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Inventory</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Inventory, which consists
primarily of raw materials to be used in the production of our dietary supplement products, is stated at the lower of cost or market
using the first-in, first-out method. We regularly review our inventory on hand and, when necessary, record a provision for excess
or obsolete inventory.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i> </i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Property and equipment</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Property and equipment
are recorded at cost. Additions and improvements that increase the value or extend the life of an asset are capitalized. Maintenance
and repairs are expensed as incurred. Upon sale or retirement of property and equipment, the related cost and accumulated depreciation
are removed from the accounts and any gain or loss is reflected in the consolidated statement of operations. Depreciation is computed
on a straight-line basis over the following estimated useful lives of the assets:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" align="center" style="font: 10pt Times New Roman, Times, Serif; width: 6.5in; border-collapse: collapse">
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" style="width: 37%; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black">Office equipment</font></td>
<td nowrap="nowrap" style="width: 5%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="width: 58%; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black">3 years</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black">Production equipment</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black">5 to 7 years</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black">Equipment under capital lease</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black">5 to 7 years</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black">Leasehold improvements</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black">Lesser of lease term or useful life of improvement</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><i> </i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><i><u>Patents</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Patents, once issued or
purchased, are amortized using the straight-line method over their economic remaining useful lives. All internally developed process
costs incurred to the point when a patent application is to be filed are expensed as incurred and classified as research and development
costs. Patent application costs, generally legal costs, are capitalized pending disposition of the individual patent application,
and are subsequently either amortized based on the initial patent life granted, generally 15 to 20 years for domestic patents and
5 to 20 years for foreign patents, or expensed if the patent application is rejected. The costs of defending and maintaining patents
are expensed as incurred. Upon becoming fully amortized, the related cost and accumulated amortization are removed from the accounts.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Impairment of long-lived assets</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Our long-lived assets,
which include property and equipment, patents and licenses of patents, are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be recoverable.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">We assess the recoverability
of our long-lived assets by comparing the projected undiscounted net cash flows associated with the related long-lived asset or
group of long-lived assets over their remaining estimated useful lives against their respective carrying amounts. Impairment, if
any, is based on the excess of the carrying amount over the fair value of those assets. Fair value is generally determined using
the asset’s expected future discounted cash flows or market value, if readily determinable. If long-lived assets are determined
to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book
values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives.</p>
<p style="font: 10pt Arial Unicode MS; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Discount on convertible notes payable</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">We allocate the proceeds
received from convertible notes between convertible notes payable and warrants, if applicable. The resulting discount for warrants
is amortized using the effective interest method over the life of the debt instrument. After allocating a portion of the proceeds
to the warrants, the effective conversion price of the convertible note payable can be determined. If the effective conversion
price is lower than the market price at the date of issuance, a beneficial conversion feature is recorded as an additional discount
to the convertible note payable. The beneficial conversion feature discount is amortized using the effective interest method over
the life of the debt instrument. The amortization is recorded as interest expense on the consolidated statements of operations.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Fair value of financial instruments</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The carrying amounts of
our financial assets and liabilities, such as cash, accounts receivable and accounts payable, approximate their fair values because
of the short maturity of these instruments. Due to conversion features and other terms, it is not practical to estimate the fair
value of notes payable and convertible notes.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Fair value measurements</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">We measure fair value as
an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants. As such, fair value is a market-based measurement that is determined based on assumptions that market
participants would use in pricing an asset or liability. We utilize a three-tier fair value hierarchy, which prioritizes the inputs
used in measuring fair value as follows:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" align="center" style="width: 9in; font: 10pt Arial Unicode MS">
<tr style="background-color: #CCFFCC">
<td style="vertical-align: top; width: 7%"><font style="font-family: Times New Roman, Times, Serif">Level 1</font></td>
<td style="width: 1%"> </td>
<td style="vertical-align: top; width: 92%"><font style="font-family: Times New Roman, Times, Serif">Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.</font></td></tr>
<tr>
<td style="vertical-align: top"> </td>
<td> </td>
<td style="vertical-align: top"> </td></tr>
<tr style="background-color: #CCFFCC">
<td style="vertical-align: top"><font style="font-family: Times New Roman, Times, Serif">Level 2</font></td>
<td> </td>
<td style="vertical-align: top"><font style="font-family: Times New Roman, Times, Serif">Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.</font></td></tr>
<tr>
<td style="vertical-align: top"> </td>
<td> </td>
<td style="vertical-align: top"> </td></tr>
<tr style="background-color: #CCFFCC">
<td style="vertical-align: top"><font style="font-family: Times New Roman, Times, Serif">Level 3</font></td>
<td> </td>
<td style="vertical-align: top"><font style="font-family: Times New Roman, Times, Serif">Unobservable inputs where there is little or no market data, which require the reporting entity to develop its own assumptions.</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">We do not have any assets
or liabilities measured at fair value on a recurring or a non-recurring basis. Consequently, we did not have any fair value adjustments
for assets and liabilities measured at fair value at March 31, 2013 or December 31, 2012, nor any gains or losses reported in the
consolidated statement of operations that are attributable to the change in unrealized gains or losses relating to those assets
and liabilities still held at the reporting date for the periods ended March 31, 2013 and December 31, 2012.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Revenue recognition</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">We recognize revenue when
(i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been performed, (iii) amounts are
fixed or determinable and (iv) collectibility of amounts is reasonably assured.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Revenues from the sale
of products, including shipping and handling fees but excluding statutory taxes collected from customers, as applicable, are recognized
when shipment has occurred. We sell our products directly to customers. Persuasive evidence of an arrangement is demonstrated via
order and invoice, product delivery is evidenced by a bill of lading from the third party carrier and title transfers upon shipment,
the sales price to the customer is fixed upon acceptance of the order and there is no separate sales rebate, discount, or volume
incentive.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Shipping and handling costs</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Amounts charged to customers
for shipping products are included in revenues and the related costs are classified in cost of goods sold as incurred.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Advertising and promotion costs</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Costs associated with the
advertising and promotion of our products are expensed as incurred.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Equity instruments issued to parties
other than employees for acquiring goods or services</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">We account for all transactions
in which goods or services are the consideration received for the issuance of equity instruments based on the fair value of the
consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. The measurement
date used to determine the fair value of the equity instrument issued is the earlier of the date on which the performance is complete
or the date on which it is probable that performance will occur. Currently such transactions are primarily awards of warrants to
purchase common stock.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The fair value of each
warrant award is estimated on the date of grant using a Black-Scholes option-pricing valuation model.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The assumptions used to determine the fair
value of our warrants are as follows:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" align="center" style="width: 9in; font: 10pt Arial Unicode MS">
<tr style="vertical-align: top; background-color: #CCFFCC">
<td style="width: 7%; text-align: center"><font style="font-family: Times New Roman, Times, Serif"><b>-</b></font></td>
<td style="width: 93%"><font style="font-family: Times New Roman, Times, Serif">The expected life of warrants issued represents the period of time the warrants are expected to be outstanding.</font></td></tr>
<tr>
<td style="text-align: center"> </td>
<td> </td></tr>
<tr style="vertical-align: top; background-color: #CCFFCC">
<td style="text-align: center"><font style="font-family: Times New Roman, Times, Serif"><b>-</b></font></td>
<td><font style="font-family: Times New Roman, Times, Serif">The expected volatility is generally based on the historical volatility of comparable companies’ stock over the contractual life of the warrant.</font></td></tr>
<tr>
<td style="text-align: center"> </td>
<td> </td></tr>
<tr style="vertical-align: top; background-color: #CCFFCC">
<td style="text-align: center"><font style="font-family: Times New Roman, Times, Serif"><b>-</b></font></td>
<td><font style="font-family: Times New Roman, Times, Serif">The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods within the contractual life of the warrant.</font></td></tr>
<tr>
<td style="text-align: center"> </td>
<td> </td></tr>
<tr style="vertical-align: top; background-color: #CCFFCC">
<td style="text-align: center"><font style="font-family: Times New Roman, Times, Serif"><b>-</b></font></td>
<td><font style="font-family: Times New Roman, Times, Serif">The expected dividend yield is based on our current dividend yield as the best estimate of projected dividend yield for periods within the contractual life of the warrant.</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><i><u>Income taxes</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">We recognize deferred tax
assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or
tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement
and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to
reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not
that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply
to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred
tax assets and liabilities of a change in tax rates is recognized in our consolidated statements of income in the period that includes
the enactment date.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">We recognize the tax benefit
from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the
taxing authorities, based on the technical merits of the position. The tax benefits recognized in our consolidated financial statements
from such a position should be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon
ultimate settlement. Should they occur, our policy is to classify interest and penalties related to tax positions as income tax
expense.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Net loss per common share</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Basic and diluted net loss
per share has been computed by dividing our net loss by the weighted average number of common shares issued and outstanding. Convertible
preferred stock, options and warrants to purchase our common stock as well as debt which are convertible into common stock are
anti-dilutive and therefore are not included in the determination of the diluted net loss per share for three months ended March
31, 2013 and 2012. The following table presents a reconciliation of basic loss per share and excluded dilutive securities:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" align="center" style="font: 10pt Times New Roman, Times, Serif; width: 9in; border-collapse: collapse">
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" colspan="3" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt">For the Three Months Ended March 31,</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" style="width: 9%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="width: 9%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="width: 35%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="width: 24%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt">2013</font></td>
<td nowrap="nowrap" style="width: 1%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="width: 22%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt">2012</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" colspan="2" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt"> Numerator: </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" colspan="2" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt"> Net loss  </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	$	(453,472)</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	$	(321,761)</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" colspan="2" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt"> Denominator: </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" colspan="3" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt"> Weighted-average common shares outstanding </font></td>
<td nowrap="nowrap" style="border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	7,444,591 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	7,171,255 </font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" colspan="3" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt"> Basic and diluted net loss per share </font></td>
<td nowrap="nowrap" style="border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	$	(0.06)</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	$	(0.04)</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" colspan="3" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt"> Common stock warrants </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	2,536,726 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	2,127,535 </font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" colspan="3" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt"> Series A convertible preferred stock </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	1,504,620 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	625,000 </font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" colspan="2" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt"> Stock options </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	1,001,363 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	498,602 </font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" colspan="3" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt"> Convertible debt including interest </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	938,512 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	854,326 </font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" colspan="3" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt"> Excluded dilutive securities </font></td>
<td nowrap="nowrap" style="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	5,981,221 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	4,105,463 </font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><i><u>Reclassifications</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Certain reclassifications
have been made to prior period financial statements and footnotes in order to conform to the current period's presentation.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i> </i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Segments</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">We have determined that
we operate in one segment for financial reporting purposes.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Recently issued accounting pronouncements</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Management does not believe
that any recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying
financial statements.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p>
-321761
-453472
4105463
5981221
854326
938512
498602
1001363
625000
1504620
2127535
2536726
P3Y
P5Y
P7Y
P5Y
P7Y
Lesser of lease term or useful life of improvement
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Use of estimates</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The preparation of consolidated
financial statements in conformity with U.S. GAAP 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 consolidated financial
statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those
estimates.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Cash</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">We consider all highly
liquid, short-term investments with original maturities of three months or less when purchased to be cash equivalents.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Inventory</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Inventory, which consists
primarily of raw materials to be used in the production of our dietary supplement products, is stated at the lower of cost or market
using the first-in, first-out method. We regularly review our inventory on hand and, when necessary, record a provision for excess
or obsolete inventory.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Accounts receivable</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Accounts receivable are
recorded at the invoiced amount, net of allowance for doubtful accounts. The allowance for doubtful accounts is our best estimate
of the amount of probable credit losses based on specific identification of accounts in our existing accounts receivable. Outstanding
account balances are reviewed individually for collectibility. We determine the allowance based on historical write-off experience,
customer specific facts and economic conditions. Bad debt expense is included in general and administrative expenses, if any. We
consider all accounts greater than 30 days old to be past due. Account balances are charged off against allowance after all means
of collection have been exhausted and the potential for recovery is considered remote. The allowance for doubtful accounts was
$2,526 at both March 31, 2013 and December 31, 2012.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Basis of presentation and principles
of consolidation</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The accompanying consolidated
unaudited interim financial statements and related notes have been prepared in accordance with U.S. Generally Accepted Accounting
Principles (GAAP) for interim financial information, and with the rules and regulations of the United states Securities and Exchange
Commission (“SEC”) to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by U.S. GAAP for complete financial statements. The unaudited interim financial statements furnished reflect
all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to a fair statement
of the results for the interim periods presented. Unaudited interim results are not necessarily indicative of the results for the
full year. These unaudited interim financial statements should be read in conjunction with the financial statements of the Company
for the year ended December 31, 2012 and notes thereto contained in the Company’s Annual Report on Form 10-K filed with the
SEC.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">All intercompany accounts
have been eliminated for the purpose of the consolidated financial statement presentation.</p>
<p style="font: 10pt Arial Unicode MS; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Patents</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Patents, once issued or
purchased, are amortized using the straight-line method over their economic remaining useful lives. All internally developed process
costs incurred to the point when a patent application is to be filed are expensed as incurred and classified as research and development
costs. Patent application costs, generally legal costs, are capitalized pending disposition of the individual patent application,
and are subsequently either amortized based on the initial patent life granted, generally 15 to 20 years for domestic patents and
5 to 20 years for foreign patents, or expensed if the patent application is rejected. The costs of defending and maintaining patents
are expensed as incurred. Upon becoming fully amortized, the related cost and accumulated amortization are removed from the accounts.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Impairment of long-lived assets</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Our long-lived assets,
which include property and equipment, patents and licenses of patents are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be recoverable.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">We assess the recoverability
of our long-lived assets by comparing the projected undiscounted net cash flows associated with the related long-lived asset or
group of long-lived assets over their remaining estimated useful lives against their respective carrying amounts. Impairment, if
any, is based on the excess of the carrying amount over the fair value of those assets. Fair value is generally determined using
the asset’s expected future discounted cash flows or market value, if readily determinable. If long-lived assets are determined
to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book
values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Discount on convertible notes payable</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">We allocate the proceeds
received from convertible notes between convertible notes payable and warrants, if applicable. The resulting discount for warrants
is amortized using the effective interest method over the life of the debt instrument. After allocating a portion of the proceeds
to the warrants, the effective conversion price of the convertible note payable can be determined. If the effective conversion
price is lower than the market price at the date of issuance, a beneficial conversion feature is recorded as an additional discount
to the convertible note payable. The beneficial conversion feature discount is amortized using the effective interest method over
the life of the debt instrument. The amortization is recorded as interest expense on the consolidated statements of operations.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Fair value of financial instruments</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The carrying amounts of
our financial assets and liabilities, such as cash, accounts receivable and accounts payable, approximate their fair values because
of the short maturity of these instruments. Due to conversion features and other terms, it is not practical to estimate the fair
value of notes payable and convertible notes.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Revenue recognition</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">We recognize revenue when
(i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been performed, (iii) amounts are
fixed or determinable and (iv) collectibility of amounts is reasonably assured.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Revenues from the sale
of products, including shipping and handling fees but excluding statutory taxes collected from customers, as applicable, are recognized
when shipment has occurred. We sell our products directly to customers. Persuasive evidence of an arrangement is demonstrated via
order and invoice, product delivery is evidenced by a bill of lading from the third party carrier and title transfers upon shipment,
the sales price to the customer is fixed upon acceptance of the order and there is no separate sales rebate, discount, or volume
incentive.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Amounts charged to customers
for shipping products are included in revenues and the related costs are classified in cost of goods sold as incurred. In 2012
and 2011, we incurred $26,059 and $32,784, respectively, in shipping costs included in cost of goods sold.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Shipping and handling costs</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Amounts charged to customers
for shipping products are included in revenues and the related costs are classified in cost of goods sold as incurred.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><i><u>Equity instruments issued to parties other than employees
for acquiring goods or services</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">We account for all transactions
in which goods or services are the consideration received for the issuance of equity instruments based on the fair value of the
consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. The measurement
date used to determine the fair value of the equity instrument issued is the earlier of the date on which the performance is complete
or the date on which it is probable that performance will occur. Currently such transactions are primarily awards of warrants to
purchase common stock.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">The fair value of each
warrant award is estimated on the date of grant using a Black-Scholes option-pricing valuation model.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The assumptions used to determine the fair
value of our warrants are as follows:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<table align="center" cellspacing="0" cellpadding="0" style="width: 6.5in; font-family: Times New Roman, Times, Serif">
<tr style="vertical-align: top; background-color: #CCFFCC">
<td style="width: 7%; font-weight: bold; text-align: center"><font style="font-size: 10pt">-</font></td>
<td style="width: 93%"><font style="font-size: 10pt">The expected life of warrants issued represents the period of time the
warrants are expected to be outstanding.</font></td></tr>
<tr>
<td style="font-weight: bold; text-align: center"><font style="font-size: 10pt"> </font></td>
<td><font style="font-size: 10pt"> </font></td></tr>
<tr style="vertical-align: top; background-color: #CCFFCC">
<td style="font-weight: bold; text-align: center"><font style="font-size: 10pt">-</font></td>
<td><font style="font-size: 10pt">The expected volatility is generally based on the historical volatility of comparable companies’
stock over the contractual life of the warrant.</font></td></tr>
<tr>
<td style="font-weight: bold; text-align: center"><font style="font-size: 10pt"> </font></td>
<td><font style="font-size: 10pt"> </font></td></tr>
<tr style="vertical-align: top; background-color: #CCFFCC">
<td style="font-weight: bold; text-align: center"><font style="font-size: 10pt">-</font></td>
<td><font style="font-size: 10pt">The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time
of grant for periods within the contractual life of the warrant.</font></td></tr>
<tr>
<td style="font-weight: bold; text-align: center"><font style="font-size: 10pt"> </font></td>
<td><font style="font-size: 10pt"> </font></td></tr>
<tr style="vertical-align: top; background-color: #CCFFCC">
<td style="font-weight: bold; text-align: center"><font style="font-size: 10pt">-</font></td>
<td><font style="font-size: 10pt">The expected dividend yield is based on our current dividend yield as the best estimate
of projected dividend yield for periods within the contractual life of the warrant.</font></td></tr>
</table>
<p style="margin-top: 0; margin-bottom: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><i><u>Income taxes</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">We recognize deferred tax
assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or
tax returns. Under this method, deferred tax assets and liabilities are based on the differences between the financial statement
and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to
reverse. Deferred tax assets are reduced by a valuation allowance to the extent management concludes it is more likely than not
that the assets will not be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply
to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred
tax assets and liabilities of a change in tax rates is recognized in our consolidated statements of income in the period that includes
the enactment date.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">We recognize the tax benefit
from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the
taxing authorities, based on the technical merits of the position. The tax benefits recognized in our consolidated financial statements
from such a position should be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon
ultimate settlement. Should they occur, our policy is to classify interest and penalties related to tax positions as income tax
expense.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><i><u>Reclassifications</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Certain reclassifications
have been made to prior period financial statements and footnotes in order to conform to the current period's presentation.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Segments</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">We have determined that
we operate in one segment for financial reporting purposes.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Recently issued accounting pronouncements</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Management does not believe
that any recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying
financial statements.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
P30D
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 3 – INVENTORY</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Inventory consists of the
following:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" align="center" style="font: 10pt Times New Roman, Times, Serif; width: 6.5in; border-collapse: collapse">
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" style="width: 13%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="width: 9%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="width: 34%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="width: 22%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">March 31,</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">2013</p></td>
<td nowrap="nowrap" style="width: 2%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="width: 20%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">December 31,</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">2012</p></td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" colspan="2" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt"> Raw materials </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	$	257,426 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	$	271,312 </font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" colspan="2" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt"> Finished goods </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	12,338 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	11,885 </font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	269,764 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	283,197 </font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" colspan="3" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt"> Less:  reserve for excess and obsolete inventory </font></td>
<td nowrap="nowrap" style="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	(151,064)</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	(151,064)</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	$	118,700 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	$	132,133 </font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><b>NOTE 4 – PROPERTY AND EQUIPMENT</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Property and equipment, stated at cost, consists
of the following:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" colspan="2" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">March 31,</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">2013</p></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">December 31,</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">2012</p></td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" colspan="3" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt"> Office equipment </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	$	24,585 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	$	24,584 </font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" colspan="4" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt"> Production equipment </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	69,903 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	39,791 </font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" colspan="4" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt"> Leasehold improvements </font></td>
<td nowrap="nowrap" style="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	13,946 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	13,946 </font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" colspan="2" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	108,434 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	78,321 </font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" colspan="4" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt"> Less:  accumulated depreciation </font></td>
<td nowrap="nowrap" style="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	(47,939)</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	(42,694)</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" colspan="2" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	$	60,495 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	$	35,627 </font></td></tr>
<tr>
<td style="width: 9%"> </td>
<td style="width: 9%"> </td>
<td style="width: 22%"> </td>
<td style="width: 9%"> </td>
<td style="width: 27%; text-align: right"> </td>
<td style="width: 3%"> </td>
<td style="width: 21%; text-align: right"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" colspan="2" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">March 31,</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">2013</p></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">December 31,</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">2012</p></td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" colspan="3" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt"> Office equipment </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	$	24,585 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	$	24,584 </font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" colspan="4" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt"> Production equipment </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	69,903 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	39,791 </font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" colspan="4" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt"> Leasehold improvements </font></td>
<td nowrap="nowrap" style="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	13,946 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	13,946 </font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" colspan="2" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	108,434 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	78,321 </font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" colspan="4" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt"> Less:  accumulated depreciation </font></td>
<td nowrap="nowrap" style="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	(47,939)</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	(42,694)</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" colspan="2" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	$	60,495 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	$	35,627 </font></td></tr>
<tr>
<td style="width: 9%"> </td>
<td style="width: 9%"> </td>
<td style="width: 22%"> </td>
<td style="width: 9%"> </td>
<td style="width: 27%; text-align: right"> </td>
<td style="width: 3%"> </td>
<td style="width: 21%; text-align: right"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><b>NOTE 5 - PATENTS AND LICENSES, NET</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Our identifiable long-lived intangible assets
are patents and prepaid licenses. Patent and license amortization is $790 for both the three months ended March 31, 2013 and
2012.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">The licenses are being amortized over an economic
useful life of 17 years. The gross carrying amounts and accumulated amortization related to these intangible assets consist
of the following at:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" align="center" style="font: 10pt Times New Roman, Times, Serif; width: 6.5in; border-collapse: collapse">
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" style="width: 9%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="width: 9%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="width: 36%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="width: 24%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">March 31,</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">2013</p></td>
<td nowrap="nowrap" style="width: 1%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="width: 21%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">December 31,</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">2012</p></td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" colspan="3" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt"> Gross carrying amounts-patents and licenses </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	$	199,380 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	$	188,570 </font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" colspan="3" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt"> Accumulated amortization </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	(6,254)</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	(5,464)</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" colspan="3" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt"> Patents and Licenses, net </font></td>
<td nowrap="nowrap" style="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	$	193,126 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	$	183,106 </font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"> </p>
P17Y
<table cellspacing="0" cellpadding="0" align="center" style="font: 10pt Times New Roman, Times, Serif; width: 6.5in; border-collapse: collapse">
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" style="width: 9%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="width: 9%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="width: 36%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="width: 24%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">March 31,</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">2013</p></td>
<td nowrap="nowrap" style="width: 1%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="width: 21%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">December 31,</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">2012</p></td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" colspan="3" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt"> Gross carrying amounts-patents and licenses </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	$	199,380 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	$	188,570 </font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" colspan="3" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt"> Accumulated amortization </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	(6,254)</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	(5,464)</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" colspan="3" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt"> Patents and Licenses, net </font></td>
<td nowrap="nowrap" style="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	$	193,126 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	$	183,106 </font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><b>NOTE 6 – ACCRUED EXPENSES</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><b> </b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Accrued expenses consists of the following at:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" align="center" style="font: 10pt Times New Roman, Times, Serif; width: 6.5in; border-collapse: collapse">
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" style="width: 42%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="width: 30%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">March 31,</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">2013</p></td>
<td nowrap="nowrap" style="width: 2%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="width: 26%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">December 31,</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">2012</p></td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black">Executive compensation</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt; color: black">	$	304,813</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt; color: black">	$	192,552</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black">Royalties</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt; color: black">	-</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt; color: black">	4,760</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black">Other accruals</font></td>
<td nowrap="nowrap" style="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt; color: black">	47,964</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt; color: black">	18,309</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt; color: black">	$	352,777</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt; color: black">	$	215,621</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"> </p>
<table cellspacing="0" cellpadding="0" align="center" style="font: 10pt Times New Roman, Times, Serif; width: 6.5in; border-collapse: collapse">
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" style="width: 42%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="width: 30%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">March 31,</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">2013</p></td>
<td nowrap="nowrap" style="width: 2%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="width: 26%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">December 31,</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">2012</p></td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black">Executive compensation</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt; color: black">	$	304,813</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt; color: black">	$	192,552</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black">Royalties</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt; color: black">	-</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt; color: black">	4,760</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black">Other accruals</font></td>
<td nowrap="nowrap" style="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt; color: black">	47,964</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt; color: black">	18,309</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt; color: black">	$	352,777</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt; color: black">	$	215,621</font></td></tr>
</table>
<table cellspacing="0" cellpadding="0" align="center" style="font: 10pt Times New Roman, Times, Serif; width: 6.5in; border-collapse: collapse">
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" style="width: 13%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="width: 9%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="width: 34%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="width: 22%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">March 31,</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">2013</p></td>
<td nowrap="nowrap" style="width: 2%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="width: 20%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">December 31,</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">2012</p></td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" colspan="2" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt"> Raw materials </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	$	257,426 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	$	271,312 </font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" colspan="2" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt"> Finished goods </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	12,338 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	11,885 </font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	269,764 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	283,197 </font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" colspan="3" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt"> Less:  reserve for excess and obsolete inventory </font></td>
<td nowrap="nowrap" style="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	(151,064)</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	(151,064)</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	$	118,700 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	$	132,133 </font></td></tr>
</table>
<table cellspacing="0" cellpadding="0" align="center" style="font: 10pt Times New Roman, Times, Serif; width: 6.5in; border-collapse: collapse">
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" style="width: 37%; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black">Office equipment</font></td>
<td nowrap="nowrap" style="width: 5%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="width: 58%; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black">3 years</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black">Production equipment</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black">5 to 7 years</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black">Equipment under capital lease</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black">5 to 7 years</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black">Leasehold improvements</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black">Lesser of lease term or useful life of improvement</font></td></tr>
</table>
<p style="margin-top: 0; margin-bottom: 0"> </p>
<table cellspacing="0" cellpadding="0" align="center" style="font: 10pt Times New Roman, Times, Serif; width: 9in; border-collapse: collapse">
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" colspan="3" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt">For the Three Months Ended March 31,</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" style="width: 9%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="width: 9%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="width: 35%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="width: 24%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt">2013</font></td>
<td nowrap="nowrap" style="width: 1%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="width: 22%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt">2012</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" colspan="2" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt"> Numerator: </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" colspan="2" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt"> Net loss  </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	$	(453,472)</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	$	(321,761)</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" colspan="2" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt"> Denominator: </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" colspan="3" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt"> Weighted-average common shares outstanding </font></td>
<td nowrap="nowrap" style="border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	7,444,591 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	7,171,255 </font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" colspan="3" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt"> Basic and diluted net loss per share </font></td>
<td nowrap="nowrap" style="border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	$	(0.06)</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	$	(0.04)</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" colspan="3" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt"> Common stock warrants </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	2,536,726 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	2,127,535 </font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" colspan="3" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt"> Series A convertible preferred stock </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	1,504,620 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	625,000 </font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" colspan="2" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt"> Stock options </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	1,001,363 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	498,602 </font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" colspan="3" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt"> Convertible debt including interest </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	938,512 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	854,326 </font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" colspan="3" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt"> Excluded dilutive securities </font></td>
<td nowrap="nowrap" style="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	5,981,221 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt">	4,105,463 </font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><b>NOTE 7 – NOTES PAYABLE</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><b> </b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">Notes payable consists of the following:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" align="center" style="font: 10pt Times New Roman, Times, Serif; width: 9in; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td nowrap="nowrap" colspan="3" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">March 31,</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">2013</p></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">March 31,</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">2012</p></td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" colspan="3" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black"><b><u>Notes payable - current</u></b></font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" colspan="3" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black">7.85% unsecured, $772 due monthly</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt; color: black">	$	4,322</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt; color: black">	$	1,426</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" colspan="3" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black">4.15% unsecured, $2,678 due monthly</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt; color: black">	13,251</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt; color: black">	21,095</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" style="width: 17%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="width: 17%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="width: 17%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="width: 27%; border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt; color: black">	$	17,573</font></td>
<td nowrap="nowrap" style="width: 1%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="width: 21%; border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt; color: black">	$	22,521</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" colspan="3" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black"><b><u>Convertible notes payable, net</u></b></font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td colspan="3" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black">5% unsecured due June 2013, convertible into preferred stock at $5.00 per share</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt; color: black">	$	15,000</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt; color: black">	$	15,000</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td colspan="3" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black">5%, unsecured due June 2013  (net of discount related to beneficial conversion feature of $17,904 in 2013 and $35,807 in 2012), convertible into common stock at $0.45 per share</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt; color: black">	294,596</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt; color: black">	276,693</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td colspan="3" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black">6% unsecured due June 2013 (net of discount related to beneficial conversion feature of $2,139 in 2013 and $4,277 in 2012), convertible into preferred stock at $5.00 per share</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt; color: black">	10,862</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt; color: black">	8,723</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td colspan="3" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black">5% unsecured due June 2013, convertible into preferred stock at $5.00  per share</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt; color: black">	-</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt; color: black">	15,000</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td colspan="3" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black">6% unsecured, convertible into common stock at $2.00 per share, due on demand</font></td>
<td nowrap="nowrap" style="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt; color: black">	50,000</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt; color: black">	50,000</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt; color: black">	370,458</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt; color: black">	365,416</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" colspan="3" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black"><b><u>Convertible notes payable related party, net</u></b></font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td colspan="3" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black">6% unsecured due December 2013 (net of discount related to beneficial conversion feature of $3,024 in 2013 and $11,507 in 2012), convertible into common stock at $2.00 per share</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt; color: black">	$	66,517</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt; color: black">	$	63,493</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Entia has debt in the principal
amount of $415,500 in the form of convertible notes payable of which, $340,500 is due on June 30, 2013 and $75,000 matures on December
31, 2013. Entia also has $50,000 of debt that is due on demand, and as such, all is classified as short-term on the balance sheet.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p>
340500
75000
50000
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 8 – RELATED PARTY TRANSACTIONS</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Debt agreements from board member</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i> </i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Entia entered into a promissory
note with a board member on May 17, 2012, for a 6% note for $25,000 maturing on December 31, 2013. An additional $50,000 note from
two board members is maturing on December 31, 2013. These notes are reflected on the balance sheet, net of discount in the short-term
liabilities.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Preferred stock purchase from board member</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i> </i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">During the first quarter
2013, a board member purchased 1,000 shares of Series A preferred stock for $5,000 cash.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
2012-12-31
0.06
25000
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 9 – STOCKHOLDERS’ EQUITY
(DEFICIT)</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Preferred Stock</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i> </i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On May 26, 2011, our board
of directors designated 350,000 shares of preferred stock as Series A preferred stock, $0.001 par value. The Series A preferred
stock is entitled to a liquidation preference in the amount of $5 per share, votes on an as converted basis with the common stock
on all matters as to which holders of common stock shall be entitled to vote, and is currently convertible into common stock on
a one-for-ten basis.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">During the first quarter
2013, we issued 36,400 shares of Series A Preferred stock for $182,000 cash and a note holder converted their $15,000 note along
with $750 of accrued interest for 3,162 shares of Series A Preferred stock. The note was unsecured, accruing interest at 5% per
annum and was due to mature on June 30, 2013.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Common stock</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">There were no transactions
related to common stock during the first quarter 2013 and 666 shares of common stock were issued during the same period in 2012.
This stock had a fair market value of $400.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Stock incentive plan</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On September 17, 2010,
our Board of Directors adopted the 2010 Stock Incentive Plan (“Plan”). The Plan provides for the grant of options to
purchase shares of our common stock, and stock awards consisting of shares of our common stock, to eligible participants, including
directors, executive officers, employees and consultants of the Company. We have reserved 1,600,000 shares of common stock for
issuance under the Plan with an annual increase in shares of 50,000 as of January 1 of each year; commencing January 1, 2012. Stock
options are granted at or below the closing price of our stock on the date of grant for terms ranging from four to fifteen years
and generally vest over a five year period. The fair value of option grants were calculated at the date of the grants using the
Black-Scholes option pricing model with the following assumptions:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" align="center" style="font: 10pt Times New Roman, Times, Serif; width: 6.5in; border-collapse: collapse">
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" style="width: 58%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="width: 1%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="width: 20%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">March 31,</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">2013</p></td>
<td nowrap="nowrap" style="width: 1%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="width: 20%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">December 31,</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">2012</p></td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt"> Expected dividend yield </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt">	-</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt">	-</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt"> Expected stock price volatility </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt">236.55%</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt">183.17% - 187.30%</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt"> Risk-free interest rate </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt">1.08%</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt">1.27% - 2.80%</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt"> Expected term (in years) </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt">5 years</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt">4 - 10 years</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt"> Weighted-average granted date fair value </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt">$0.38 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt">$0.51 </font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">A summary of option activity under the stock
option plan as of March 31, 2013 and changes during the quarter then ended is presented below:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" align="center" style="font: 10pt Times New Roman, Times, Serif; width: 9in; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="width: 34%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="width: 2%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="width: 11%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="width: 2%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="width: 11%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="width: 2%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="width: 11%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="width: 2%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="width: 14%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">Weighted </font></td>
<td nowrap="nowrap" style="width: 2%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="width: 9%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td></tr>
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">Average</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td></tr>
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">Weighted</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">Remaining</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">Aggregate</font></td></tr>
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">Number of</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">Exercise Price</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">Average Exercise  </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">Contractual Term</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">Intrinsic</font></td></tr>
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">Shares</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">Range</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">Price</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">(Years)</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">Value</font></td></tr>
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black">Outstanding, December 31, 2011</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	659,242</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">$	0.47-$1.00</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	$	0.62</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	10</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	-</font></td></tr>
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black">Granted</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	542,857</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">$	0.40-$0.50</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	$	0.45</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	9</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	-</font></td></tr>
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black">Exercised</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	-</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	-</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	-</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	-</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	-</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black">Expired</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	-</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	-</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	-</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	-</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	-</font></td></tr>
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black">Outstanding, December 31, 2012</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	1,202,099</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">$	0.40-$1.00</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	$	0.56</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	7.74</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	-</font></td></tr>
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black">Exercisable, December 31, 2012</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	830,504</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">$	0.40-$1.00</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	$	0.57</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	8.19</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	-</font></td></tr>
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black">Granted</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	55,000</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">$	0.38</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	$	0.38</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	5</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	-</font></td></tr>
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black">Exercised</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	-</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	-</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	$	-</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	-</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	-</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black">Expired</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	-</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	-</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	$	-</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	-</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	-</font></td></tr>
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black">Outstanding, March 31, 2013</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	1,257,099</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">$	0.38-$1.00</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	$	0.55</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	7.62</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	-</font></td></tr>
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black">Exercisable, March 31, 2013</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	1,001,361</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">$	0.38-$1.00</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	$	0.57</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	8.09</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	-</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">The range of exercise prices for options outstanding
under the 2010 Stock Incentive Plan at March 31, 2013 are as follows:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" align="center" style="font: 10pt Times New Roman, Times, Serif; width: 6.5in; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="width: 47%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">Number of</font></td>
<td nowrap="nowrap" style="width: 9%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="width: 44%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">Exercise </font></td></tr>
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">shares</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">Price</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	55,000</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	$	0.38</font></td></tr>
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	15,000</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	$	0.40</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	20,000</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	$	0.44</font></td></tr>
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	180,000</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	$	0.45</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	247,242</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	$	0.47</font></td></tr>
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	247,857</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	$	0.49</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	254,000</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	$	0.50</font></td></tr>
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	200,000</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	$	0.85</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	38,000</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	$	1.00</font></td></tr>
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	1,257,099</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">At March 31, 2013, the
Company had 342,901 unissued shares available under the Plan. Also, at March 31, 2013, the Company had $125,361 of total unrecognized
compensation cost related to unvested stock options, which is expected to be recognized over a weighted average period of 7 years.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Warrants – Consulting Agreements</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Outstanding warrants to
purchase common stock are as follows:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" align="center" style="font: 10pt Times New Roman, Times, Serif; width: 9in; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="width: 35%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">Date of Issue</font></td>
<td nowrap="nowrap" style="width: 23%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">March 31, 2013</font></td>
<td nowrap="nowrap" style="width: 2%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="width: 17%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">Exercise Price</font></td>
<td nowrap="nowrap" style="width: 2%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="width: 21%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">Expiration</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">March-13</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt; color: black">	88</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">$0.70 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">03/2017</font></td></tr>
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">February-13</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt; color: black">	35</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">$5.00 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">02/2019</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">January-13</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt; color: black">	20,201</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">$0.49 - $5.00</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">06/2017 - 01/2020</font></td></tr>
<tr style="vertical-align: bottom">
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">As of December 2012</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt; color: black">	2,516,402</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">$0.36 - $10.00</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">04/2013 - 10/2021</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black">Total</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt; color: black">	2,536,726</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">We use the Black-Scholes option-pricing model
to determine the fair value of warrants on the date of grant. In determining the fair value of warrants, we employed the following
key assumptions:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" align="center" style="font: 10pt Times New Roman, Times, Serif; width: 6.5in; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="width: 44%; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="width: 3%; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="width: 25%; border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt">March 31, 2013</font></td>
<td nowrap="nowrap" style="width: 3%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="width: 25%; border-bottom: windowtext 1pt solid; background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt">March 31, 2012</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt">Risk-Free interest rate</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt">0.84% - 1.09%</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt">1.08%</font></td></tr>
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt">Expected dividend yield</font></td>
<td nowrap="nowrap" style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt">0%</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt">0%</font></td></tr>
<tr style="background-color: #CCFFCC">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt">Volatility</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt">236.81% - 248.63%</font></td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="vertical-align: bottom; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt">202.65%</font></td></tr>
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt">Expected life</font></td>
<td nowrap="nowrap" style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt">5 - 7 years</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="background-color: white; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt">7 years</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">At March 31, 2013 and 2012,
the weighted-average Black-Scholes value of warrants granted was $0.56 and $0.89, respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" align="center" style="font: 10pt Times New Roman, Times, Serif; width: 6.5in; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="width: 47%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">Number of</font></td>
<td nowrap="nowrap" style="width: 9%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="width: 44%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">Exercise </font></td></tr>
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">shares</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">Price</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	55,000</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	$	0.38</font></td></tr>
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	15,000</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	$	0.40</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	20,000</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	$	0.44</font></td></tr>
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	180,000</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	$	0.45</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	247,242</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	$	0.47</font></td></tr>
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	247,857</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	$	0.49</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	254,000</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	$	0.50</font></td></tr>
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	200,000</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	$	0.85</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	38,000</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	$	1.00</font></td></tr>
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">	1,257,099</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td></tr>
</table>
<p style="margin-top: 0; margin-bottom: 0"> </p>
<table cellspacing="0" cellpadding="0" align="center" style="font: 10pt Times New Roman, Times, Serif; width: 9in; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="width: 35%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">Date of Issue</font></td>
<td nowrap="nowrap" style="width: 23%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">March 31, 2013</font></td>
<td nowrap="nowrap" style="width: 2%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="width: 17%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">Exercise Price</font></td>
<td nowrap="nowrap" style="width: 2%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="width: 21%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">Expiration</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">March-13</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt; color: black">	88</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">$0.70 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">03/2017</font></td></tr>
<tr style="vertical-align: bottom">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">February-13</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt; color: black">	35</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">$5.00 </font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">02/2019</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">January-13</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt; color: black">	20,201</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">$0.49 - $5.00</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">06/2017 - 01/2020</font></td></tr>
<tr style="vertical-align: bottom">
<td style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">As of December 2012</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt; color: black">	2,516,402</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">$0.36 - $10.00</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><font style="font-size: 10pt; color: black">04/2013 - 10/2021</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black">Total</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt; color: black">	2,536,726</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td></tr>
</table>
<p style="margin-top: 0; margin-bottom: 0"> </p>
1257099
0.36
10.00
2516402
2536726
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 10 - COMMITMENTS AND CONTINGENCIES</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Leases</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">On April 4, 2012, Entia
Biosciences, Inc. entered into a Commercial Lease agreement with Lanz Properties, LLC for 13,081 square feet of office and warehouse
space located at 13565 S.W. Tualatin-Sherwood Road, Suite 800, Sherwood, Oregon 97140. The new lease commenced May 15, 2012 and
will terminate on July 31, 2015. No rent was payable until October 2012. The base monthly rental rate started at $3,160, increasing
to $3,260 in October 2013, and then $3,343 in June 2014.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Management believes that
the new facility offers a better location and configuration for its biotechnology activities and provides significantly more space
for manufacturing, fulfillment, and administration over the next three years.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">Entia calculated the deferred
rent amount related to the long-term lease agreement and recorded additional rent expense of $3,489 and deferred rent accrual of
$3,489 and $8,499 at March 31, 2013 and December 31, 2012, respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
13081
P3Y
3489
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b>NOTE 11 – CONCENTRATIONS AND CREDIT
RISK</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Customers and Credit Concentrations</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">During the first quarter
2013, 21.71% of our net sales were to two customers compared to 32.5% during first quarter 2012. As of March 31, 2013, accounts
receivable for these customers accounted for 87.37% of total accounts receivable as compared to 50% during first quarter 2012.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><i><u>Vendor Concentrations</u></i></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">During the first quarter
2013, 33.4% of our purchases were from one vendor as compared to 68% during first quarter 2012.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b> </b></p>
1:10
750
2013-06-30
0.05
125361
P7Y
342901
666
400
<table cellspacing="0" cellpadding="0" align="center" style="font: 10pt Times New Roman, Times, Serif; width: 9in; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td nowrap="nowrap" colspan="3" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">March 31,</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">2013</p></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">March 31,</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">2012</p></td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" colspan="3" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black"><b><u>Notes payable - current</u></b></font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" colspan="3" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black">7.85% unsecured, $772 due monthly</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt; color: black">	$	4,322</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt; color: black">	$	1,426</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" colspan="3" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black">4.15% unsecured, $2,678 due monthly</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt; color: black">	13,251</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt; color: black">	21,095</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" style="width: 17%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="width: 17%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="width: 17%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="width: 27%; border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt; color: black">	$	17,573</font></td>
<td nowrap="nowrap" style="width: 1%; padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="width: 21%; border-top: windowtext 1pt solid; border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt; color: black">	$	22,521</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" colspan="3" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black"><b><u>Convertible notes payable, net</u></b></font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td colspan="3" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black">5% unsecured due June 2013, convertible into preferred stock at $5.00 per share</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt; color: black">	$	15,000</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt; color: black">	$	15,000</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td colspan="3" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black">5%, unsecured due June 2013  (net of discount related to beneficial conversion feature of $17,904 in 2013 and $35,807 in 2012), convertible into common stock at $0.45 per share</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt; color: black">	294,596</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt; color: black">	276,693</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td colspan="3" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black">6% unsecured due June 2013 (net of discount related to beneficial conversion feature of $2,139 in 2013 and $4,277 in 2012), convertible into preferred stock at $5.00 per share</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt; color: black">	10,862</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt; color: black">	8,723</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td colspan="3" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black">5% unsecured due June 2013, convertible into preferred stock at $5.00  per share</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt; color: black">	-</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt; color: black">	15,000</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td colspan="3" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black">6% unsecured, convertible into common stock at $2.00 per share, due on demand</font></td>
<td nowrap="nowrap" style="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt; color: black">	50,000</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt; color: black">	50,000</font></td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt; color: black">	370,458</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt; color: black">	365,416</font></td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCFFCC">
<td nowrap="nowrap" colspan="3" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black"><b><u>Convertible notes payable related party, net</u></b></font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td colspan="3" style="padding-right: 5.4pt; padding-left: 5.4pt"><font style="font-size: 10pt; color: black">6% unsecured due December 2013 (net of discount related to beneficial conversion feature of $3,024 in 2013 and $11,507 in 2012), convertible into common stock at $2.00 per share</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt; color: black">	$	66,517</font></td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt"> </td>
<td nowrap="nowrap" style="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right"><font style="font-size: 10pt; color: black">	$	63,493</font></td></tr>
</table>