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<div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; ">
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: left">NOTE 1</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: left">SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND ORGANIZATION</div>
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</table><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; FONT-STYLE: italic; TEXT-ALIGN: justify"><font style="text-decoration:underline">(A) General</font></div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">INVO Bioscience, Inc. (“the Company”) offers novel solutions in assisted reproductive technologies while expanding geographic and affordable access to the global reproductive health care community.  Our primary focus is the manufacture and sale of the INVOcell device and the INVO technology to assist infertile couples in having a baby.  We designed our INVOcell device and our INVO procedure to provide an alternative infertility treatment for the patient and the clinician.  The INVO procedure is less expensive and simpler to perform than most comparable infertility treatments currently.  The simplicity of the INVO procedure relates to the ability to potentially perform the INVO procedure in a physician’s practice rather than in a specialized facility at a much lower cost overall than current infertility treatments.  </div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">We believe that the INVO procedure will make infertility treatment more readily available throughout the world.  The INVO procedure is significantly less costly than conventional IVF.  The INVOcell device and INVO procedure facilitates conception and embryo development inside the woman’s body, rather than in a dish in a laboratory, which is an attractive feature for most couples.</div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">Through December 31, 2016, we have generated minimal revenues, have incurred significant expenses and have sustained losses.  Consequently, our operations are subject to all the risks inherent in the establishment of a new business enterprise.</div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif">In May 2008, the Company received notice that the INVOcell product meets all of the essential requirements of the relevant European Directive(s), and </font>received CE marking.  The CE marking (also known as CE mark) is a mandatory conformity mark on many products placed on the single market in the European Economic Area (EEA).  The CE marking (an acronym for the French “Conformitй Europйenne”) certifies that<font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif"> a product has met EU health, safety and environmental requirements, which ensure consumer safety.</font></div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">On November 3, 2015, the Company issued a press release reporting the U.S. Food and Drug Administration (“FDA”) has granted the Company’s de novo request for the INVOcell to allow the marketing, sale and use in the United States.</div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">With CE Marking, the Company possess the necessary regulatory authority to distribute its product in the European Economic Area (Includes: The European Union, Canada, Australia, and New Zealand); we can also distribute in India, Africa and most parts of South America and the Middle East.  </div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-STYLE: italic; TEXT-ALIGN: justify"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold"><font style="text-decoration:underline">(B) Basis of Presentation</font></font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold"> </font>(Share Exchange and Corporate Structure)</div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">On December 5, 2008, the Company completed a share exchange with Emy’s Salsa Aji Distribution Company, Inc. (“Emy’s”), a publicly registered shell corporation with no significant assets or operations.  Emy’s was incorporated on July 11, 2005, under the laws of the State of Nevada under the name Certiorari Corp.  In connection with the share exchange, INVO Bioscience became Emy’s wholly-owned subsidiary and the INVO Bioscience shareholders acquired control of Emy’s.</div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">The Company accounted for the transaction as a recapitalization and the Company is the surviving entity.  In connection with the share exchange, Emy’s shareholders retained 14,937,500 shares.  Effective with the Agreement, all previously outstanding shares of Common Stock owned by the Company’s shareholders were exchanged for an aggregate of 38,307,500 shares of Emy’s common stock.  Effective with the Agreement, Emy’s changed its name to INVO Bioscience, Inc.</div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; 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COLOR: #000000; TEXT-ALIGN: justify">The Company considers all highly liquid temporary cash investments with an original maturity of three months or less to be cash equivalents.  The Company had the following amounts of cash and cash equivalents on its balance sheets as of December 31, 2016 and 2015 of $152,404 and $492,004 respectively.</div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; FONT-STYLE: italic; TEXT-ALIGN: justify"><font style="text-decoration:underline">(E) Inventory</font></div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">Inventories consist of work in process (WIP) and finished products and are stated at the lower of cost or market; using the first-in, first-out (FIFO) method as a cost flow convention. </div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; FONT-STYLE: italic; 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Diluted earnings per share is computed similar to basic earnings per share except that the denominator is increased to include securities or other contracts to issue common stock that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. The Company’s diluted loss per share is the same as the basic loss per share for the years ended December 31, 2016 and 2015, as the inclusion of any potential shares would have had an anti-dilutive effect due to the Company generating a loss.</div><br/><table id="z3db90388792d47818f2472676c02ed82" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 75%; margin-left: auto; margin-right: auto;" cellspacing="0" cellpadding="0" border="0">
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">Twelve Months Ended December 31,</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 47%" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left"> </div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">2016</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">2015</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 47%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Loss to common shareholders (Numerator)</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">(2,124,252</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">)</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">(4,959,247</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">)</div>
</td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 47%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Basic and diluted weighted-average number of common shares outstanding (Denominator)</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">139,186,557</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">128,567,615</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
</table><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">The Company has excluded the following dilutive securities from the calculation of fully-diluted shares outstanding because the result would have been anti-dilutive:</div><br/><table id="z39f6c08a4bf34e6389ff5017a3396f6c" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 75%; margin-left: auto; margin-right: auto;" cellspacing="0" cellpadding="0">
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 47%" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left"> </div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="6">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">Twelve Months Ended December 31,</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 47%" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left"> </div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">2016</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="3">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">2015</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom" valign="bottom" colspan="4">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Effect of dilutive common stock equivalents:</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom" valign="bottom" colspan="3"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 47%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Warrants</div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">-</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">-</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 47%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Convertible notes and interest</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">3,430,547</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">3,239,180</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; WIDTH: 47%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Total</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">3,430,547</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">3,239,180</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
</tr>
</table><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: justify"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif"><font style="text-decoration:underline">(</font></font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-STYLE: italic"><font style="text-decoration:underline">I) Fair Value of Financial Instruments</font></font></div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">ASC 825-10-50, “Disclosures about Fair Value of Financial Instruments,” (formerly SFAS No. 107) requires disclosure of the fair value of certain financial instruments.  The carrying value of cash and cash equivalents, accounts payable and borrowings, as reflected in the balance sheets, approximate fair value because of the short-term maturity of these instruments.</div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">Effective January 1, 2008, the Company adopted ASC 820-10, “Fair Value Measurements” (SFAS 157), which provides a framework for measuring fair value under GAAP.  ASC 820-10 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.  ASC 820-10 requires that valuation techniques maximize the use of observable inputs and minimize the use of unobservable inputs.</div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; FONT-STYLE: italic; TEXT-ALIGN: justify"><font style="text-decoration:underline">(J) Income Taxes</font></div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">The Company accounts for income taxes under the ASC 740-10-05, “Accounting for Income Taxes” (SFAS 109).  Under ASC 740-10, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases.  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.  Under ASC 740-10, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.</div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">In July 2006, the FASB issued ASC 740-10, “Accounting for Uncertainty in Income Taxes-an interpretation of FASB Statement No. 109” (FIN 48).  ASC 740-10 clarifies the recognition threshold and measurement of a tax position taken on a tax return.  FIN 48 is effective for fiscal years beginning after December 15, 2006.  ASC 740-10 also requires expanded disclosure with respect to the uncertainty in income taxes.</div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; FONT-STYLE: italic; TEXT-ALIGN: justify"><font style="text-decoration:underline">(K) Business Segments</font></div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">The Company operates in one segment and therefore segment information is not presented.</div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; FONT-STYLE: italic; TEXT-ALIGN: justify"><font style="text-decoration:underline">(L) Concentration of Credit Risk</font></div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">Cash includes amounts deposited in financial institutions in excess of insurable Federal Deposit Insurance Corporation (FDIC) limits. As of December 31, 2015, the Company had cash balances in excess of FDIC limits of approximately $292,000.</div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; FONT-STYLE: italic; TEXT-ALIGN: justify"><font style="text-decoration:underline">(M) Revenue Recognition</font></div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">The Company will recognize revenue on arrangements in accordance with ASC 605-10 formerly Securities and Exchange Commission Staff Accounting Bulletin No. 101, “Revenue Recognition in Financial Statements” and No. 104, “Revenue Recognition.”  In all cases, revenue is recognized only when the price is fixed and determinable, persuasive evidence of an arrangement exists, the service is performed and collectability of the resulting receivable is reasonably assured.</div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; FONT-STYLE: italic; TEXT-ALIGN: justify"><font style="text-decoration:underline">(N) Long- Lived Assets</font></div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">Long-lived assets and certain identifiable assets related to those assets are periodically reviewed for impairment whenever circumstances and situations change such that there is an indication that the carrying amounts may not be recoverable.  If the non-discounted future cash flows of the enterprise are less than their carrying amount, their carrying amounts are reduced to the fair value and an impairment loss recognized.  There was no impairment recorded from January 5, 2007 (inception) to December 31, 2016.</div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; FONT-STYLE: italic; TEXT-ALIGN: left"><font style="text-decoration:underline">(O) Reclassifications</font></div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">Certain reclassifications have been made in prior year’s financial statements to conform to classifications used in the current year.</div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; FONT-STYLE: italic; TEXT-ALIGN: justify; "><font style="text-decoration:underline">(P) Recent Accounting Pronouncements</font></div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify">In November 2016, the FASB issued ASU 2016-18 (Topic 230), Statement of Cash Flows: Restricted Cash, which provides guidance on the classification of restricted cash in the statement of cash flows. The amendments in this ASU are effective for the Company’s annual reporting for fiscal 2018, with early adoption permitted. The amendments in the ASU should be adopted on a retrospective basis. The adoption of this standard is not expected to have a material impact on the Company’s financial statements.</div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">In May 2016, FASB issued accounting standards update ASU-2016-12, Revenue from Contracts with Customers (Topic 606) – Narrow-Scope Improvements and Practical Expedients. The amendments do not change the core revenue recognition principle in Topic 606. The amendments provide clarifying guidance in certain narrow areas and add some practical expedients. These amendments are effective at the same time Topic 606 is effective. Topic 606 is effective for public entities for annual reporting periods beginning after December 15, 2017, including interim reporting periods therein (i.e., January 1, 2018, for a calendar year entity). The Company is currently evaluating the impact of the adoption of ASU 2016-12 on the Company’s financial statements.</div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">In March 2016, the Financial Accounting Standards Board (FASB) issued FASB Accounting Standards Update (ASU) 2016-09, “Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting”. The amendments in this update simplify several aspects of the accounting for share-based payment transactions, including income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. This ASU is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. We are currently evaluating the effect that the adoption of this standard will have on our financial statements.</div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">In February 2016, the FASB issued FASB ASU 2016-02, “Leases (Topic 842)”. The core principle of Topic 842 is that a lessee should recognize the assets and liabilities that arise from leases. For operating leases, a lessee would be required to recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, in the statement of financial position. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. The accounting applied by a lessor is largely unchanged from that applied under previous GAAP. This ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. We are currently evaluating the effect that the adoption of this ASU will have on our financial statements.</div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">In August 2014, the FASB issued Accounting Standards Update ASU 2014-15 “Presentation of Financial Statements Going Concern (Subtopic 205-40) – Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern”. This update provides guidance about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern or to provide related footnote disclosures. The amendments require management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. The amendments contained in this update are effective for public and nonpublic entities for annual periods ending after December 15, 2016. We are currently assessing the impact of the adoption of ASU 2014-15, and we have not yet determined the effect of the standard on our ongoing financial reporting.</div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">There were various other updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on the Company’s financial position, results of operations or cash flows.</div><br/></div>
<div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; ">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-STYLE: italic; TEXT-ALIGN: justify"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold"><font style="text-decoration:underline">Basis of Presentation</font></font><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold"> </font>(Share Exchange and Corporate Structure)</div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">On December 5, 2008, the Company completed a share exchange with Emy’s Salsa Aji Distribution Company, Inc. (“Emy’s”), a publicly registered shell corporation with no significant assets or operations.  Emy’s was incorporated on July 11, 2005, under the laws of the State of Nevada under the name Certiorari Corp.  In connection with the share exchange, INVO Bioscience became Emy’s wholly-owned subsidiary and the INVO Bioscience shareholders acquired control of Emy’s.</div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">The Company accounted for the transaction as a recapitalization and the Company is the surviving entity.  In connection with the share exchange, Emy’s shareholders retained 14,937,500 shares.  Effective with the Agreement, all previously outstanding shares of Common Stock owned by the Company’s shareholders were exchanged for an aggregate of 38,307,500 shares of Emy’s common stock.  Effective with the Agreement, Emy’s changed its name to INVO Bioscience, Inc.</div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">All references to “Common Stock,” “share” and “per share” amounts have been retroactively restated to reflect the exchange ratio of 357.0197 shares of INVO Bioscience Common Stock for one share of Emy’s common stock outstanding immediately prior to the merger as if the exchange had taken place as of the beginning of the earliest period presented.</div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">The accompanying consolidated financial statements present the historical financial condition, results of operations and cash flows of the Company prior to the merger with Emys.  The accompanying consolidated financial statements present on a consolidated basis the accounts of the Company and its wholly owned subsidiaries.  All significant intercompany accounts and transactions have been eliminated in consolidation.</div></div>
14937500
38307500
357.0197
<div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; ">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; FONT-STYLE: italic; TEXT-ALIGN: justify"><font style="text-decoration:underline">Use of Estimates</font></div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">In preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reported period.  Actual results could differ from those estimates.</div></div>
<div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; ">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; FONT-STYLE: italic; TEXT-ALIGN: justify"><font style="text-decoration:underline">Cash and Cash Equivalents</font></div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">The Company considers all highly liquid temporary cash investments with an original maturity of three months or less to be cash equivalents.  The Company had the following amounts of cash and cash equivalents on its balance sheets as of December 31, 2016 and 2015 of $152,404 and $492,004 respectively.</div></div>
<div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; ">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; FONT-STYLE: italic; TEXT-ALIGN: justify"><font style="text-decoration:underline">Inventory</font></div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">Inventories consist of work in process (WIP) and finished products and are stated at the lower of cost or market; using the first-in, first-out (FIFO) method as a cost flow convention.</div></div>
<div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; ">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; FONT-STYLE: italic; TEXT-ALIGN: justify"><font style="text-decoration:underline">Property and Equipment</font></div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">The Company records property and equipment at cost.  Depreciation and amortization are provided using the straight-line method over the estimated economic lives of the assets, which are from 3 to 7 years.  The Company capitalizes the expenditures for major renewals and improvements that extend the useful lives of property and equipment.  Expenditures for maintenance and repairs are charged to expense as incurred.  The Company reviews the carrying value of long-lived assets for impairment at least annually or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.  Recoverability of long-lived assets is measured by a comparison of its carrying amount to the undiscounted cash flows that the asset or asset group is expected to generate.  If such assets are considered impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the property, if any, exceeds its fair market value.</div></div>
P3Y
P7Y
<div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; ">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; FONT-STYLE: italic; TEXT-ALIGN: justify"><font style="text-decoration:underline">Stock Based Compensation</font></div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">The Company accounts for stock-based compensation under the provisions of Accounting Standards Codification subtopic 718-10, Compensation (“ASC 718-10”).  This statement requires the Company to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award.  That cost is recognized over the period in which the employee is required to provide service in exchange for the award, which is usually the vesting period.</div></div>
<div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; ">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; FONT-STYLE: italic; TEXT-ALIGN: justify"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif"><font style="text-decoration:underline">Loss Per Share</font></font></div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">Basic loss per share calculations are computed by dividing income (loss) available to common shareholders by the weighted-average number of common shares outstanding. Diluted earnings per share is computed similar to basic earnings per share except that the denominator is increased to include securities or other contracts to issue common stock that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. The Company’s diluted loss per share is the same as the basic loss per share for the years ended December 31, 2016 and 2015, as the inclusion of any potential shares would have had an anti-dilutive effect due to the Company generating a loss.</div><br/><table id="z3db90388792d47818f2472676c02ed82" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 75%; margin-left: auto; margin-right: auto;" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 47%" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left"> </div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="6">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">Twelve Months Ended December 31,</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 47%" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left"> </div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">2016</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">2015</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 47%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Loss to common shareholders (Numerator)</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">(2,124,252</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">)</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">(4,959,247</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">)</div>
</td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 47%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Basic and diluted weighted-average number of common shares outstanding (Denominator)</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">139,186,557</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">128,567,615</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
</table><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">The Company has excluded the following dilutive securities from the calculation of fully-diluted shares outstanding because the result would have been anti-dilutive:</div><br/><table id="z39f6c08a4bf34e6389ff5017a3396f6c" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 75%; margin-left: auto; margin-right: auto;" cellspacing="0" cellpadding="0">
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 47%" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left"> </div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="6">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">Twelve Months Ended December 31,</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 47%" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left"> </div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">2016</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="3">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">2015</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom" valign="bottom" colspan="4">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Effect of dilutive common stock equivalents:</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom" valign="bottom" colspan="3"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 47%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Warrants</div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">-</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">-</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 47%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Convertible notes and interest</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">3,430,547</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">3,239,180</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; WIDTH: 47%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Total</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">3,430,547</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">3,239,180</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
</tr>
</table></div>
<div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; ">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: justify"><font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-STYLE: italic"><font style="text-decoration:underline">Fair Value of Financial Instruments</font></font></div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">ASC 825-10-50, “Disclosures about Fair Value of Financial Instruments,” (formerly SFAS No. 107) requires disclosure of the fair value of certain financial instruments.  The carrying value of cash and cash equivalents, accounts payable and borrowings, as reflected in the balance sheets, approximate fair value because of the short-term maturity of these instruments.</div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">Effective January 1, 2008, the Company adopted ASC 820-10, “Fair Value Measurements” (SFAS 157), which provides a framework for measuring fair value under GAAP.  ASC 820-10 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.  ASC 820-10 requires that valuation techniques maximize the use of observable inputs and minimize the use of unobservable inputs.</div></div>
<div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; ">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; FONT-STYLE: italic; TEXT-ALIGN: justify"><font style="text-decoration:underline">Income Taxes</font></div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">The Company accounts for income taxes under the ASC 740-10-05, “Accounting for Income Taxes” (SFAS 109).  Under ASC 740-10, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases.  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.  Under ASC 740-10, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.</div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">In July 2006, the FASB issued ASC 740-10, “Accounting for Uncertainty in Income Taxes-an interpretation of FASB Statement No. 109” (FIN 48).  ASC 740-10 clarifies the recognition threshold and measurement of a tax position taken on a tax return.  FIN 48 is effective for fiscal years beginning after December 15, 2006.  ASC 740-10 also requires expanded disclosure with respect to the uncertainty in income taxes.</div></div>
<div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; ">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; FONT-STYLE: italic; TEXT-ALIGN: justify"><font style="text-decoration:underline">Business Segments</font></div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">The Company operates in one segment and therefore segment information is not presented.</div></div>
1
<div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; ">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; FONT-STYLE: italic; TEXT-ALIGN: justify"><font style="text-decoration:underline">Concentration of Credit Risk</font></div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">Cash includes amounts deposited in financial institutions in excess of insurable Federal Deposit Insurance Corporation (FDIC) limits. As of December 31, 2015, the Company had cash balances in excess of FDIC limits of approximately $292,000.</div></div>
292000
<div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; ">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; FONT-STYLE: italic; TEXT-ALIGN: justify"><font style="text-decoration:underline">Revenue Recognition</font></div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">The Company will recognize revenue on arrangements in accordance with ASC 605-10 formerly Securities and Exchange Commission Staff Accounting Bulletin No. 101, “Revenue Recognition in Financial Statements” and No. 104, “Revenue Recognition.”  In all cases, revenue is recognized only when the price is fixed and determinable, persuasive evidence of an arrangement exists, the service is performed and collectability of the resulting receivable is reasonably assured.</div></div>
<div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; ">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; FONT-STYLE: italic; TEXT-ALIGN: justify"><font style="text-decoration:underline">Long- Lived Assets</font></div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">Long-lived assets and certain identifiable assets related to those assets are periodically reviewed for impairment whenever circumstances and situations change such that there is an indication that the carrying amounts may not be recoverable.  If the non-discounted future cash flows of the enterprise are less than their carrying amount, their carrying amounts are reduced to the fair value and an impairment loss recognized.  There was no impairment recorded from January 5, 2007 (inception) to December 31, 2016.</div></div>
<div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; ">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; FONT-STYLE: italic; TEXT-ALIGN: left"><font style="text-decoration:underline">Reclassifications</font></div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">Certain reclassifications have been made in prior year’s financial statements to conform to classifications used in the current year.</div></div>
<div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; ">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; FONT-STYLE: italic; TEXT-ALIGN: justify; "><font style="text-decoration:underline">Recent Accounting Pronouncements</font></div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; TEXT-ALIGN: justify">In November 2016, the FASB issued ASU 2016-18 (Topic 230), Statement of Cash Flows: Restricted Cash, which provides guidance on the classification of restricted cash in the statement of cash flows. The amendments in this ASU are effective for the Company’s annual reporting for fiscal 2018, with early adoption permitted. The amendments in the ASU should be adopted on a retrospective basis. The adoption of this standard is not expected to have a material impact on the Company’s financial statements.</div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">In May 2016, FASB issued accounting standards update ASU-2016-12, Revenue from Contracts with Customers (Topic 606) – Narrow-Scope Improvements and Practical Expedients. The amendments do not change the core revenue recognition principle in Topic 606. The amendments provide clarifying guidance in certain narrow areas and add some practical expedients. These amendments are effective at the same time Topic 606 is effective. Topic 606 is effective for public entities for annual reporting periods beginning after December 15, 2017, including interim reporting periods therein (i.e., January 1, 2018, for a calendar year entity). The Company is currently evaluating the impact of the adoption of ASU 2016-12 on the Company’s financial statements.</div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">In March 2016, the Financial Accounting Standards Board (FASB) issued FASB Accounting Standards Update (ASU) 2016-09, “Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting”. The amendments in this update simplify several aspects of the accounting for share-based payment transactions, including income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. This ASU is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. We are currently evaluating the effect that the adoption of this standard will have on our financial statements.</div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">In February 2016, the FASB issued FASB ASU 2016-02, “Leases (Topic 842)”. The core principle of Topic 842 is that a lessee should recognize the assets and liabilities that arise from leases. For operating leases, a lessee would be required to recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, in the statement of financial position. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. The accounting applied by a lessor is largely unchanged from that applied under previous GAAP. This ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. We are currently evaluating the effect that the adoption of this ASU will have on our financial statements.</div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">In August 2014, the FASB issued Accounting Standards Update ASU 2014-15 “Presentation of Financial Statements Going Concern (Subtopic 205-40) – Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern”. This update provides guidance about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern or to provide related footnote disclosures. The amendments require management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. The amendments contained in this update are effective for public and nonpublic entities for annual periods ending after December 15, 2016. We are currently assessing the impact of the adoption of ASU 2014-15, and we have not yet determined the effect of the standard on our ongoing financial reporting.</div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">There were various other updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on the Company’s financial position, results of operations or cash flows.</div></div>
<div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; ">
Basic loss per share calculations are computed by dividing income (loss) available to common shareholders by the weighted-average number of common shares outstanding. Diluted earnings per share is computed similar to basic earnings per share except that the denominator is increased to include securities or other contracts to issue common stock that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. The Company’s diluted loss per share is the same as the basic loss per share for the years ended December 31, 2016 and 2015, as the inclusion of any potential shares would have had an anti-dilutive effect due to the Company generating a loss.<br /><br /><table id="z3db90388792d47818f2472676c02ed82" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 75%; margin-left: auto; margin-right: auto;" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 47%" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left"> </div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="6">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">Twelve Months Ended December 31,</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 47%" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left"> </div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">2016</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">2015</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 47%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Loss to common shareholders (Numerator)</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">(2,124,252</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">)</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">(4,959,247</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">)</div>
</td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 47%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Basic and diluted weighted-average number of common shares outstanding (Denominator)</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">139,186,557</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">128,567,615</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
</table></div>
-2124252
-4959247
139186557
128567615
<div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; ">
<table id="z39f6c08a4bf34e6389ff5017a3396f6c" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 75%; margin-left: auto; margin-right: auto;" cellspacing="0" cellpadding="0">
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 47%" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left"> </div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="6">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">Twelve Months Ended December 31,</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 47%" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left"> </div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">2016</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="3">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">2015</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom" valign="bottom" colspan="4">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Effect of dilutive common stock equivalents:</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom" valign="bottom" colspan="3"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 47%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Warrants</div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">-</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">-</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 47%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Convertible notes and interest</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">3,430,547</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">3,239,180</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; WIDTH: 47%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Total</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">3,430,547</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">3,239,180</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
</tr>
</table></div>
0
0
3430547
3239180
3430547
3239180
<div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; ">
<table id="z21b7448b5c5c4ba6a9bfc5fc979091f4" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr>
<td style="VERTICAL-ALIGN: top; WIDTH: 10%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: left">NOTE 2</div>
</td>
<td style="VERTICAL-ALIGN: top; WIDTH: 90%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: left">GOING CONCERN</div>
</td>
</tr>
</table><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">The Company commenced operations in December 2008.  In During the year ended December 31, 2016, the Company had a net loss of $2,124,252  and cash used in operations $323,900.  At December 31, 2016, the Company had a working capital deficiency of $4,520,762 and a stockholder deficiency of $4,617,646. This raises substantial doubt about its ability to continue as a going concern.  The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.  The ability of the Company to continue as a going concern is dependent on the Company’s ability to raise additional capital and implement its business plan.</div><br/></div>
-4520762
<div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; ">
<table id="z980bae75dba94b40baa78f4cf3117770" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr>
<td style="VERTICAL-ALIGN: top; WIDTH: 10%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: left">NOTE 3</div>
</td>
<td style="VERTICAL-ALIGN: top; WIDTH: 90%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: left">INVENTORY</div>
</td>
</tr>
</table><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">The Company had inventory in the following amounts:</div><br/><table id="zc0fff63b414a4b6b8ce1b2f2a822b1ba" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 75%; margin-left: auto; margin-right: auto;" cellspacing="0" cellpadding="0">
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 47%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: right; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom" colspan="6">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">December 31,</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 47%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: right; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">2016</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: right; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">2015</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 47%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Work in Process</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">27,986</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">31,997</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 47%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Finished Goods</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: right; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">57,224</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: right; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">33,423</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; WIDTH: 47%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Total Inventory</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; TEXT-ALIGN: right; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">85,210</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; TEXT-ALIGN: right; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">65,420</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
</tr>
</table><br/></div>
<div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; ">
The Company had inventory in the following amounts:<br /><br /><table id="zc0fff63b414a4b6b8ce1b2f2a822b1ba" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 75%; margin-left: auto; margin-right: auto;" cellspacing="0" cellpadding="0">
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 47%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: right; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom" colspan="6">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">December 31,</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 47%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: right; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">2016</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: right; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">2015</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 47%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Work in Process</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">27,986</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">31,997</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 47%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Finished Goods</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: right; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">57,224</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: right; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">33,423</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; WIDTH: 47%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Total Inventory</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; TEXT-ALIGN: right; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">85,210</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; TEXT-ALIGN: right; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">65,420</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
</tr>
</table></div>
27986
31997
57224
33423
<div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; ">
<table id="z728f81b336fd4492a623539aaa7cd76e" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr>
<td style="VERTICAL-ALIGN: top; WIDTH: 10%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: left">NOTE 4</div>
</td>
<td style="VERTICAL-ALIGN: top; WIDTH: 90%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: left">PROPERTY AND EQUIPMENT</div>
</td>
</tr>
</table><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">The estimated useful lives and accumulated depreciation for furniture, equipment and software are as follows:</div><br/><table id="z7206c22dfe9b4894afa301d38143f1e1" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 75%; margin-left: auto; margin-right: auto;" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 25%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left"> </div>
</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; WIDTH: 50%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">Estimated Useful Life</div>
</td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 25%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff">Molds</div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 50%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: center; BACKGROUND-COLOR: #cceeff">3 to 7 years</div>
</td>
</tr>
</table><br/><table id="zf075426ad53c4f06850f4e0de5451419" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 75%; margin-left: auto; margin-right: auto;" cellspacing="0" cellpadding="0">
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 47%" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left"> </div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="6">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">December 31,</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 47%" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left"> </div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">2016</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">2015</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 47%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Manufacturing Equipment - Molds</div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">50,963</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">35,263</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 47%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Less: Accumulated Depreciation</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">(35,263</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">)</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">(35,263</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">)</div>
</td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; WIDTH: 47%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Total Property and Equipment, net</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">15,700</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">-</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
</tr>
</table><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">The Company recorded $0 depreciation expense in 2016 and 2015 as its earlier equipment was fully depreciated. The 2016 asset addition has not been put into production  as of December 31, 2016.</div><br/></div>
0
0
<div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; ">
The estimated useful lives and accumulated depreciation for furniture, equipment and software are as follows:<br /><br /><table id="z7206c22dfe9b4894afa301d38143f1e1" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 75%; margin-left: auto; margin-right: auto;" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 25%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left"> </div>
</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; WIDTH: 50%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">Estimated Useful Life</div>
</td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 25%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff">Molds</div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 50%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: center; BACKGROUND-COLOR: #cceeff">3 to 7 years</div>
</td>
</tr>
</table></div>
P3Y
<div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; ">
<table id="zf075426ad53c4f06850f4e0de5451419" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 75%; margin-left: auto; margin-right: auto;" cellspacing="0" cellpadding="0">
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 47%" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left"> </div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="6">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">December 31,</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 47%" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left"> </div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">2016</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">2015</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 47%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Manufacturing Equipment - Molds</div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">50,963</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">35,263</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 47%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Less: Accumulated Depreciation</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">(35,263</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">)</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">(35,263</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">)</div>
</td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; WIDTH: 47%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Total Property and Equipment, net</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">15,700</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">-</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
</tr>
</table></div>
50963
35263
35263
35263
<div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; ">
<table id="zb40f1718bc624bbab2886e44959da564" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr>
<td style="VERTICAL-ALIGN: top; WIDTH: 10%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: left">NOTE 5</div>
</td>
<td style="VERTICAL-ALIGN: top; WIDTH: 90%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: left">PATENTS</div>
</td>
</tr>
</table><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">The Company capitalizes the initial expense related to establishing the patent by country and then amortizes the expense over the life of the patent, typically 20 years.  It then expenses annual filing fees to maintain the patents.  The Company regularly reviews the value of the patent in the market place in proportion to the expense it must spend to maintain the patent.</div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">The Company has recorded the following patent costs:</div><br/><table id="z4a265e3d355c460ea275430ad78dc8f5" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 75%; margin-left: auto; margin-right: auto;" cellspacing="0" cellpadding="0">
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 47%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: right; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom" colspan="6">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">December 31,</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr style="HEIGHT: 12px">
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 47%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: right; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">2016</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: right; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">2015</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 47%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Patent Costs</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">77,743</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">77,743</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 47%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Less: Accumulated Depreciation</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: right; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">(58,605</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">)</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: right; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">(56,727</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">)</div>
</td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; WIDTH: 47%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Patent Costs, net</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; TEXT-ALIGN: right; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">19,138</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; TEXT-ALIGN: right; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">21,016</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
</tr>
</table><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">The Company recorded amortization expense as follows:</div><br/><table id="z8c76a55fb65d4901ae8ad3453f0b3e6f" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 34%; margin-left: auto; margin-right: auto;" cellspacing="0" cellpadding="0">
<tr>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="7">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">Twelve Months Ended December 31,</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="3">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">2016</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="3">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">2015</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 14%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">1,878</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 14%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">5,633</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
</tr>
</table><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">In 2011, the decision was made to not to pay the renewal fees and expedite the amortization of the original patent which expired in 2012.  It was also decided to not spend its limited funds in defending the INVO Block patent as it only has value to the Company. The Company continues to pay the annual renewal fees on its active patents.</div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">Estimated amortization expense as of December 31, 2016 is as follows:</div><br/><table id="z52e55987cdd741de9bd327b0c60a71b3" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 50%; margin-left: auto; margin-right: auto;" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 36%" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: right">Years ended December 31,</div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom" valign="bottom" colspan="2"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 36%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: right">2017</div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">4,536</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 36%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: right">2018</div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">4,536</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 36%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: right">2019</div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">4,536</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 36%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: right">2020</div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">4,536</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 36%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: right">2021 and thereafter</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">994</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; WIDTH: 36%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: right">Total</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">19,138</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
</table><br/></div>
P20Y
<div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; ">
The Company has recorded the following patent costs:<br /><br /><table id="z4a265e3d355c460ea275430ad78dc8f5" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 75%; margin-left: auto; margin-right: auto;" cellspacing="0" cellpadding="0">
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 47%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: right; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom" colspan="6">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">December 31,</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr style="HEIGHT: 12px">
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 47%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: right; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">2016</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: right; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">2015</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 47%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Patent Costs</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">77,743</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">77,743</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 47%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Less: Accumulated Depreciation</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: right; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">(58,605</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">)</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: right; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">(56,727</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">)</div>
</td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; WIDTH: 47%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Patent Costs, net</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; TEXT-ALIGN: right; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">19,138</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; TEXT-ALIGN: right; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">21,016</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
</tr>
</table></div>
77743
77743
58605
56727
<div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; ">
The Company recorded amortization expense as follows:<br /><br /><table id="z8c76a55fb65d4901ae8ad3453f0b3e6f" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 34%; margin-left: auto; margin-right: auto;" cellspacing="0" cellpadding="0">
<tr>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="7">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">Twelve Months Ended December 31,</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="3">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">2016</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="3">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">2015</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 14%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">1,878</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 14%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">5,633</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
</tr>
</table></div>
1878
5633
<div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; ">
Estimated amortization expense as of December 31, 2016 is as follows:<br /><br /><table id="z52e55987cdd741de9bd327b0c60a71b3" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 50%; margin-left: auto; margin-right: auto;" cellspacing="0" cellpadding="0" border="0">
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 36%" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: right">Years ended December 31,</div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom" valign="bottom" colspan="2"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 36%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: right">2017</div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">4,536</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 36%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: right">2018</div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">4,536</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 36%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: right">2019</div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">4,536</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 36%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: right">2020</div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">4,536</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 36%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: right">2021 and thereafter</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">994</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; WIDTH: 36%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: right">Total</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">19,138</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
</table></div>
4536
4536
4536
4536
994
<div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; ">
<table id="zf3170ddb22c2491bb029a00851d5d2ca" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr>
<td style="VERTICAL-ALIGN: top; WIDTH: 10%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: left">NOTE 6</div>
</td>
<td style="VERTICAL-ALIGN: top; WIDTH: 90%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: left">CONVERTIBLE NOTES AND NOTES PAYABLE</div>
</td>
</tr>
</table><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify; "><font style="text-decoration:underline"><font style="text-decoration:underline">Convertible Notes - Bridge Notes</font></font></div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">During 2009, the Company issued senior secured convertible notes (“Bridge Notes”) payable to investors in the aggregate amount of $545,000.  The Bridge Notes carry interest rates ranging between 10-12% and were due in full one year from the date of issuance and are past due.  Both the Bridge Notes and the accrued interest thereon are convertible into Restricted Common Stock of the Company at a conversion price of $0.10 per share (the “Original Conversion Price”).  If the Company were to issue any new shares of common stock within 24 months of the date of the Bridge Notes at a price below the Original Conversion Price, then the conversion price of the Bridge Notes would be adjusted to reflect the new lower price.  In addition to the Bridge Notes, the Company issued warrants to purchase 5,750,000 shares of the Company’s Common Stock at a price of $0.20 per share as of the date of this filing. All the warrants have expired.  The Company valued the conversion feature of the Bridge Notes and the warrants issued via the Black-Scholes valuation method.  The total fair value calculated for the conversion feature was $1,473,710; $151,826 was allocated to discount on the Bridge Notes, and $1,341,884 was charged to operations.   The total fair value calculated for the warrants was $1,719,666; $393,174 was allocated to discount on the Bridge Notes, and $1,326,492 was charged to operations. The aggregate discount on the Bridge Notes for the conversion feature and the warrants was $545,000, and the aggregate amount charged to operations was $2,668,371 which was recorded as a derivative liability on the Company’s consolidated balance sheet.  </div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">In November and December 2009, principal in the aggregate amount of $235,000 of the Bridge Notes was  converted into shares of Common Stock and the fair value of the derivative liability was recalculated and reduced to $108,000 with adjustments to revaluation expense of $486,000.  The remaining discount of $545,000 was amortized to interest expense over the original one-year term of the Bridge Notes using the effective interest method; as of September 30, 2010 the full amount has been amortized.</div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">In July 2010, INVO Bioscience reached an agreement with one of the investors who had converted his bridge notes into shares to cancel those related 1,750,000 shares and the corresponding 1,750,000 warrants and apply the proceeds to the open subscription receivable balance he carried with the company.</div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify; ">In May 2015, the Company negotiated the conversion of certain of the Bridge Notes and accrued interest into shares of common stock.  The Company negotiated these conversions at a price lower than the conversion price stated in the original Bridge Note documents because the Bridge Notes were past due.  These conversions were treated as a restructure of debt on the Company’s financial statements for the twelve months ended December 31, 2015.  $300,000 of the Bridge Notes and accrued interest were converted into 12,470,900 shares of restricted common stock resulting in a loss on debt settlement in the amount of $4,332,155.</div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">The principal balances of the Convertible Notes was $10,000 for both 2016 and 2015. This last note was converted in March 2017.  The related interest for the twelve months ended December 31, 2016 and 2015 was $750  and $14,286 respectively.</div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">In August 2016, INVO Bioscience converted a long time vendor’s outstanding accounts payable balance of $131,722 into a three (3) year 5% notes payable. The note provides for interest only payments on the first and second anniversaries of the note. The note is payable in full along with any outstanding accrued interest on the third anniversary. The Company has the right to prepay the note at any time without a premium or penalty.  The interest on this note for the year ended December 31, 2016 was $2,760.  </div><br/></div>
545000
0.10
0.12
P1Y
0.10
If the Company were to issue any new shares of common stock within 24 months of the date of the Bridge Notes at a price below the Original Conversion Price, then the conversion price of the Bridge Notes would be adjusted to reflect the new lower price.
5750000
0.20
1473710
151826
1341884
1719666
393174
1326492
545000
545000
2668371
235000
108000
486000
1750000
1750000
300000
12470900
4332155
10000
10000
750
750
14286
14286
131722
P3Y
0.05
2760
<div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; ">
<table id="z1307adc0a5254843a37e7a0a6725e735" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr>
<td style="VERTICAL-ALIGN: top; WIDTH: 10%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: left">NOTE 7</div>
</td>
<td style="VERTICAL-ALIGN: top; WIDTH: 90%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: left">NOTE PAYABLE AND OTHER RELATED PARTY TRANSACTIONS</div>
</td>
</tr>
</table><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">On September 18, 2008, the Company entered into a related party transaction with Dr. Claude Ranoux.  Dr. Ranoux was then the President, Director and Chief Scientific Officer of the Company; as of the date of this filing he is a Director.  Dr. Ranoux had loaned funds to the Company to sustain its operations since January 5, 2007 (inception).  Dr. Ranoux’s total original cumulative investment as of December 31, 2008 was $96,462, as of December 31, 2016 it is $21,888  (“the Principal Amount”) in INVO Bioscience.  On March 26, 2009, the Company and Dr. Ranoux agreed to re-write the agreement to a non-convertible note payable bearing interest at 5% per annum, the term of the note had been extended, and has been extended a couple of additional times, the current repayment date is October 31, 2018.  The Company and Dr. Ranoux can jointly decide to repay the loan earlier without prepayment penalties.  During the twelve months ended December 31, 2016 and 2015, $0 and $20,000 respectively were repaid on the principal of the loan.</div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">On March 5, 2009, the Company entered into a related party transaction with Kathleen Karloff, the Chief Executive Officer and a Director of the Company.  Ms. Karloff provided a short-term loan in the amount of $75,000 bearing interest at 5% per annum to the Company to fund operations.  In May 2009, Ms. Karloff loaned to the Company an additional $13,000, making her total cumulative loan $88,000 as of December 31, 2011.  This note was due on September 15, 2009, which has since been extended a few times to its current date of October 31, 2018.   During the twelve months ended December 31, 2014, Ms. Karloff loaned the Company an additional $66,000 at an interest rate of 0% by entering into a note payable agreement in satisfaction of expenses incurred by her for amounts previously advanced to the Company. This note currently has the same expiration date as the others which is October 31, 2018.</div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">On December 28, 2009 James Bowdring, the brother of Director Robert Bowdring invested $100,000 acquiring 666,667 shares of restricted common stock.  In April 2011, the Company issued a new short term convertible note (“Q211 Note”) payable to James Bowdring in the amount of $50,000.  The Q211 Note carries a 10% interest rate and was due in full, two months from the date of issuance.  The note was past due and is partially still open, as of this date the balance is $25,000. The Q211 Note is convertible into Common Stock of the Company at a conversion price of $0.03 per share, subject to adjustments.  In addition to the Q211 Note, the Company issued warrants to purchase 1,666,667 shares of the Company’s Common Stock at a price of $0.03 per share, as of this date the warrants have expired.  The Company valued the Q211 Note’s warrants issued as consideration for the notes payable via the Black-Scholes valuation method.  The total fair value calculated for the conversion was approximately $39,500, and for the warrants was approximately $45,500 both of which were recorded as a derivative liability on the Company’s balance sheet.  In September 2011, the Company made a principal payment on the Q211 Note in the amount of $25,000.</div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">In November 2011, the Company issued a new convertible note (“Q411 Note”) payable to James Bowdring in the amount of $10,000.  The Q411 Note carries a 10% interest rate and is due in full, two months from the date of issuance.  The Q411 Note is convertible into Common Stock of the Company at a conversion price of $0.01 per share, subject to adjustments.  In addition to the Q411 Note, the Company issued warrants to purchase 500,000 shares of the Company’s Common Stock at a price of $0.02 per share, as of this date the warrants have expired.  The Company valued the Bridge Note’s warrants issued as consideration for the notes payable via the Black-Scholes valuation method.  The total fair value calculated for the conversion option was $2,345, and for the warrants was $4,076 both of which were recorded as a derivative liability on the Company’s balance sheet. </div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">In Other Related Party Transactions, we have been renting our corporate office from Forty Four Realty Trust which is owned by James Bowdring, the brother of Director, Robert Bowdring since November 2012. It is a month to month rental arrangement for less than the going fair market real estate rental rate. We have been paying $4,800 annually since 2012. In addition the Company purchases stationary supplies and marketing items at discounted rates from Superior Printing & Promotions which is also owned by James Bowdring and is in the same building as our corporate office. INVO Bioscience spent $4,100 and $5,000 with Superior during 2016 and 2015 respectively.</div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Principal balances of the Related Party loans were as follows:</div><br/><table id="z2613fa9482834a3dbf2ccdf26f4988fb" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 75%; margin-left: auto; margin-right: auto;" cellspacing="0" cellpadding="0">
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 47%" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left"> </div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="6">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">December 31,</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 47%" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left"> </div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">2016</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">2015</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 47%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Claude Ranoux Note</div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">21,888</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">21,888</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 47%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left"> </div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 47%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">James Bowdring – Q211 Note</div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">25,000</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">25,000</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 47%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left"> </div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 47%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">James Bowdring- Q411 Note</div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">10,000</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">10,000</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 47%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left"> </div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 47%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Kathleen Karloff Note</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">154,000</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">154,000</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 47%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left"> </div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; WIDTH: 47%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Total</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">210,888</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">210,888</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
</tr>
</table><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify; ">Interest expense on the Related Party loans was $13,088 and $20,195 for the years ended December 31, 2016 and 2015, respectively.</div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">Accounts payable and accrued liabilities balances include expenses reports for Ms. Karloff, Dr. Ranoux and Mr. Bowdring for expenses they paid for personally related to travel or normal business expenses and are represented in the following table:</div><br/><table id="z8d237bad64614f839313992ad1725195" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 75%; margin-left: auto; margin-right: auto;" cellspacing="0" cellpadding="0">
<tr>
<td style="VERTICAL-ALIGN: top; PADDING-BOTTOM: 2px; WIDTH: 47%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: right; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom" colspan="6">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">December 31,</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: top; PADDING-BOTTOM: 2px; WIDTH: 47%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: right; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">2016</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: right; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">2015</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: top; PADDING-BOTTOM: 4px; WIDTH: 47%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Accounts payable and accrued liabilities</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; TEXT-ALIGN: right; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">39,000</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; TEXT-ALIGN: right; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">68,002</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
</tr>
</table><br/></div>
96462
21888
0.05
2018-10-31
0
20000
75000
0.05
13000
88000
2018-10-31
66000
0.00
100000
666667
50000
0.10
P2M
25000
0.03
1666667
0.03
39500
45500
25000
10000
0.10
P2M
0.01
500000
0.02
2345
4076
4800
4100
5000
13088
20195
<div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; ">
Principal balances of the Related Party loans were as follows:<br /><br /><table id="z2613fa9482834a3dbf2ccdf26f4988fb" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 75%; margin-left: auto; margin-right: auto;" cellspacing="0" cellpadding="0">
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 47%" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left"> </div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="6">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">December 31,</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 47%" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left"> </div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">2016</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">2015</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 47%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Claude Ranoux Note</div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">21,888</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">21,888</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 47%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left"> </div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 47%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">James Bowdring – Q211 Note</div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">25,000</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">25,000</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 47%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left"> </div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 47%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">James Bowdring- Q411 Note</div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">10,000</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">10,000</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 47%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left"> </div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 47%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Kathleen Karloff Note</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">154,000</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">154,000</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 47%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left"> </div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; WIDTH: 47%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Total</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">210,888</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">210,888</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
</tr>
</table></div>
21888
21888
25000
25000
10000
10000
154000
154000
210888
210888
<div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; ">
Accounts payable and accrued liabilities balances include expenses reports for Ms. Karloff, Dr. Ranoux and Mr. Bowdring for expenses they paid for personally related to travel or normal business expenses and are represented in the following table:<br /><br /><table id="z8d237bad64614f839313992ad1725195" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 75%; margin-left: auto; margin-right: auto;" cellspacing="0" cellpadding="0">
<tr>
<td style="VERTICAL-ALIGN: top; PADDING-BOTTOM: 2px; WIDTH: 47%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: right; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom" colspan="6">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">December 31,</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: top; PADDING-BOTTOM: 2px; WIDTH: 47%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: right; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">2016</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: right; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">2015</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: top; PADDING-BOTTOM: 4px; WIDTH: 47%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Accounts payable and accrued liabilities</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; TEXT-ALIGN: right; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">39,000</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; TEXT-ALIGN: right; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">68,002</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
</tr>
</table></div>
39000
68002
<div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; ">
<table id="z2ccb331f18a04922a87d023c7e0b324d" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr>
<td style="VERTICAL-ALIGN: top; WIDTH: 10%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left"> <font style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold">NOTE 8</font></div>
</td>
<td style="VERTICAL-ALIGN: top; FONT-WEIGHT: bold; WIDTH: 90%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">STOCKHOLDERS’ EQUITY</div>
</td>
</tr>
</table><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify"><font style="text-decoration:underline">Twelve Months Ended December 31, 2016</font></div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">In May 2016, the Company issued 3,000,000 shares of common stock with a fair value of $1,080,000 to officers for compensation.</div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">In May 2016, the Company issued 511,000 shares of common stock with a fair value of $183,608 to service providers for services performed.</div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify"><font style="text-decoration:underline">Twelve Months Ended December 31, 2015</font></div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">In February 2015, the Company sold 125,000 shares of common stock for cash of $25,000.</div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">In May 2015, investors requested the conversion of principal of convertible notes (Bridge Notes) with the Company in the amount of $300,000 and accrued interest and 12,470,900 shares of Common Stock were issued.  The Company recorded a loss on settlement of debt in the amount of $4,322,155 with regard to this transaction.</div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">In June 2015, the Company issued 750,000 shares of common stock for cash proceeds of $60,000 pursuant to the exercise of warrants by an investor.</div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">In September 2015, the Company issued 1,000,000 shares of common stock for cash proceeds of $60,000 pursuant to the exercise of warrants by an investor.</div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">In October 2015, the Company issued 119,000 shares of common stock with a fair value of $53,548 to service providers.</div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">In October 2015, the Company sold 1,000,000 shares of common stock for cash of $500,000.</div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">In December 2015, the Company issued 1,888,476 shares of common stock with a fair value of $37,770 to service providers.</div><br/></div>
3000000
1080000
511000
183608
125000
25000
300000
12470900
4322155
750000
60000
1000000
60000
119000
53548
1000000
500000
1888476
37770
<div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; ">
<table id="zbb280bbc1c424d03a02f54361125a485" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr>
<td style="VERTICAL-ALIGN: top; WIDTH: 9.88%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: left">NOTE  9</div>
</td>
<td style="VERTICAL-ALIGN: top; WIDTH: 90.12%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: left">STOCK OPTIONS AND WARRANTS</div>
</td>
</tr>
</table><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left"><font style="text-decoration:underline">Stock Options</font></div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">As of December 31, 2016 and 2015, the Company does not have any outstanding or committed and unissued stock options.  </div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify"><font style="text-decoration:underline">Warrants</font></div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">As of December 31, 2016 and 2015, the Company does not have any outstanding or committed and unissued warrants.  </div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Transactions involving warrants are summarized as follows: </div><br/><table id="zcb9ae43e20ae4eff86491c3b56c27230" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 75%; margin-left: auto; margin-right: auto;" cellspacing="0" cellpadding="0">
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 47%" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left"> </div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom" valign="bottom" colspan="2"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">Weighted-</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 47%" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left"> </div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">Number of</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">Average Price</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 47%" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left"> </div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">Shares</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">per Share</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 47%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Outstanding at December 31, 2014</div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">1,750,000</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">0.15</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 47%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Granted</div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">-</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">-</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 47%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Exercised</div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">-</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">-</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 47%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Cancelled or Expired</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">(1,750,000</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">)</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">0.15</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 47%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Outstanding at December 31, 2015</div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">-</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">-</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 47%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Granted</div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">-</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">-</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 47%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Exercised</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">-</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">-</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; WIDTH: 47%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Outstanding at December 31, 2016</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">-</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">-</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
</table><br/></div>
<div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; ">
Transactions involving warrants are summarized as follows:<br /><br /><table id="zcb9ae43e20ae4eff86491c3b56c27230" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 75%; margin-left: auto; margin-right: auto;" cellspacing="0" cellpadding="0">
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 47%" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left"> </div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom" valign="bottom" colspan="2"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">Weighted-</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 47%" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left"> </div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">Number of</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">Average Price</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 47%" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left"> </div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">Shares</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">per Share</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 47%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Outstanding at December 31, 2014</div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">1,750,000</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">0.15</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 47%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Granted</div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">-</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">-</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 47%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Exercised</div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">-</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">-</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 47%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Cancelled or Expired</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">(1,750,000</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">)</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">0.15</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 47%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Outstanding at December 31, 2015</div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">-</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">-</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 47%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Granted</div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">-</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">-</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 47%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Exercised</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">-</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">-</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; WIDTH: 47%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Outstanding at December 31, 2016</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">-</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">-</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
</table></div>
1750000
0.15
0
0
-1750000
0.15
0
0
0
0
0
0
0
<div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; ">
<table id="z542493266de24454a85906ae4f73cb51" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr>
<td style="VERTICAL-ALIGN: top; WIDTH: 10%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: left">NOTE  10</div>
</td>
<td style="VERTICAL-ALIGN: top; WIDTH: 90%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: left">INCOME TAXES</div>
</td>
</tr>
</table><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">The Company has adopted ASC 740-10, which requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statements or tax returns.  Under this method, deferred tax liabilities and assets are determined based on the difference between financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.</div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">The Company’s total deferred tax liabilities, deferred tax assets, and deferred tax asset valuation allowances are as of December 31 are as follows:</div><br/><table id="z102f332cc5dd4841a29d5da186b53568" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 75%; margin-left: auto; margin-right: auto;" cellspacing="0" cellpadding="0">
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 47%" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left"> </div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="6">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">December 31,</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 47%" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left"> </div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">2016</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">2015</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 47%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Total deferred tax assets</div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">7,177,000</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">6,327,000</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 47%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left"> </div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 47%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Less valuation allowance</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">(7,177,000</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">)</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">(6,327,000</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">)</div>
</td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 47%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left"> </div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; WIDTH: 47%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Net deferred tax asset</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">-</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">-</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
</tr>
</table><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">Those amounts have been presented in the company’s financial statements as of December 31, as follows:</div><br/><table id="z17f6c09fc8d741de8f8bf5728283eec3" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 75%; margin-left: auto; margin-right: auto;" cellspacing="0" cellpadding="0">
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 47%" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left"> </div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="6">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">December 31,</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 47%" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left"> </div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">2016</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">2015</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 47%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Noncurrent deferred tax asset</div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">-</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">-</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 47%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left"> </div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 47%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Current deferred tax liability</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">-</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">-</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 47%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left"> </div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; WIDTH: 47%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Net deferred tax asset (liability)</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">-</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">-</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
</tr>
</table><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">The company has a loss carry forward of $17,943,000 that may be offset against future taxable income. Substantially all of the carry forwards expire in 2036.</div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Income tax provision (benefit) consists of the following components:</div><br/><table id="z1f2e7bb2641b40a59f4f8d7893e06422" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 75%; margin-left: auto; margin-right: auto;" cellspacing="0" cellpadding="0">
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 47%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; FONT-WEIGHT: bold; PADDING-BOTTOM: 2px; TEXT-ALIGN: center; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" valign="bottom" colspan="6">December 31,</td>
<td style="VERTICAL-ALIGN: bottom; FONT-WEIGHT: bold; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 47%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: right; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">2016</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: right; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">2015</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 47%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Noncurrent deferred tax asset</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">-</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">-</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 47%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left"> </div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 47%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Current deferred tax liability</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: right; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">-</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: right; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">-</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 47%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left"> </div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; WIDTH: 47%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Net deferred tax asset (liability)</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; TEXT-ALIGN: right; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">-</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; TEXT-ALIGN: right; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">-</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
</tr>
</table><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">Realization of deferred tax assets is dependent on future earnings, if any, the timing and amount of which is uncertain.  Those amounts are therefore presented on the Company’s balance sheets as a non-current asset.  Utilization of the net operating loss carry forwards may be subject to substantial annual limitations, which may result in the expiration of net operating loss carry forwards before utilization.</div><br/></div>
17943000
2036
<div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; ">
The Company’s total deferred tax liabilities, deferred tax assets, and deferred tax asset valuation allowances are as of December 31 are as follows:<br /><br /><table id="z102f332cc5dd4841a29d5da186b53568" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 75%; margin-left: auto; margin-right: auto;" cellspacing="0" cellpadding="0">
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 47%" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left"> </div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="6">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">December 31,</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 47%" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left"> </div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">2016</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">2015</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 47%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Total deferred tax assets</div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">7,177,000</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">6,327,000</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 47%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left"> </div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 47%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Less valuation allowance</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">(7,177,000</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">)</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">(6,327,000</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">)</div>
</td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 47%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left"> </div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; WIDTH: 47%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Net deferred tax asset</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">-</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">-</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
</tr>
</table></div>
7177000
6327000
7177000
6327000
0
0
<div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; ">
Those amounts have been presented in the company’s financial statements as of December 31, as follows:<br /><br /><table id="z17f6c09fc8d741de8f8bf5728283eec3" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 75%; margin-left: auto; margin-right: auto;" cellspacing="0" cellpadding="0">
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 47%" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left"> </div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="6">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">December 31,</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 47%" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left"> </div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">2016</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">2015</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 47%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Noncurrent deferred tax asset</div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">-</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">-</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 47%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left"> </div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 47%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Current deferred tax liability</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">-</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">-</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 47%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left"> </div>
</td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; WIDTH: 47%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Net deferred tax asset (liability)</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">-</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">-</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
</tr>
</table></div>
0
0
0
0
<div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; ">
Income tax provision (benefit) consists of the following components:<br /><br /><table id="z1f2e7bb2641b40a59f4f8d7893e06422" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 75%; margin-left: auto; margin-right: auto;" cellspacing="0" cellpadding="0">
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 47%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; FONT-WEIGHT: bold; PADDING-BOTTOM: 2px; TEXT-ALIGN: center; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; FONT-WEIGHT: bold; TEXT-ALIGN: center" valign="bottom" colspan="6">December 31,</td>
<td style="VERTICAL-ALIGN: bottom; FONT-WEIGHT: bold; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 47%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: right; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">2016</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: right; WIDTH: 1%" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right" valign="bottom" colspan="2">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: center">2015</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 47%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Noncurrent deferred tax asset</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">-</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">-</div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 47%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left"> </div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; WIDTH: 47%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Current deferred tax liability</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: right; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">-</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: right; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">-</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 2px; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; WIDTH: 47%; " valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left"> </div>
</td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: right; WIDTH: 11%; " valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; TEXT-ALIGN: left; WIDTH: 1%; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; WIDTH: 47%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: left">Net deferred tax asset (liability)</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; TEXT-ALIGN: right; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">-</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; TEXT-ALIGN: right; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">$</div>
</td>
<td style="VERTICAL-ALIGN: bottom; BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; WIDTH: 11%; BACKGROUND-COLOR: #cceeff" valign="bottom">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">-</div>
</td>
<td style="VERTICAL-ALIGN: bottom; PADDING-BOTTOM: 4px; TEXT-ALIGN: left; WIDTH: 1%; BACKGROUND-COLOR: #cceeff; white-space: nowrap;" valign="bottom"> </td>
</tr>
</table></div>
0
0
0
0
<div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; ">
<table id="z57b0d08b47ce4a53994a6787e0329b86" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr>
<td style="VERTICAL-ALIGN: top; WIDTH: 10%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: left">NOTE 11</div>
</td>
<td style="VERTICAL-ALIGN: top; WIDTH: 90%">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: left">COMMITMENTS AND CONTINGENCIES</div>
</td>
</tr>
</table><br/><table id="zd7aff6fa95e84154b9682dfc7feb55c2" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr>
<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; VERTICAL-ALIGN: top; COLOR: #000000; WIDTH: 27pt; align: right">A)</td>
<td style="VERTICAL-ALIGN: top; TEXT-ALIGN: justify; WIDTH: auto">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">Operating Leases</div>
</td>
</tr>
</table><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">In November 2012, INVO Bioscience entered into a below market, month to month rental agreement with Forty Four Realty Trust with for the space it requires.  Forty Four Realty Trust is owned by investor James Bowdring, the brother of Director Robert Bowdring.</div><br/><table id="z4169d098fcbb4e53b4e7713b78a74f03" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
<tr>
<td style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; VERTICAL-ALIGN: top; COLOR: #000000; WIDTH: 27pt; align: right">B)</td>
<td style="VERTICAL-ALIGN: top; TEXT-ALIGN: justify; WIDTH: auto">
<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">Litigation</div>
</td>
</tr>
</table><br/><div style="TEXT-ALIGN: justify">INVO Bioscience, Inc., and two of its directors have been, since 2010, defending litigation brought by investors in an alleged predecessor of INVO Bioscience.  On March 24, 2010, INVO Bioscience, Inc. and its corporate affiliate, Bio X Cell, Inc., Claude Ranoux, and Kathleen Karloff were served an Amended Complaint, the original of which was filed on December 31, 2009 at the Suffolk Superior Court Business Litigation Session by two terminated employees of Medelle Corporation (also named as a co-defendant but no longer active), who are also attorneys, and a former investor in and creditor of Medelle.  These plaintiffs allege various claims of wrongdoing relating to the sale of assets of Medelle to Dr. Ranoux.  Plaintiffs claim that Dr. Ranoux, Ms. Karloff, and Medelle (and therefore INVO Bioscience as an alleged successor corporation) violated alleged duties owed to plaintiffs in connection with the sale.  Separate claims were also alleged against INVO Bioscience.</div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">Dr. Ranoux, Ms. Karloff, and INVO Bioscience have challenged these allegations, which they believe are baseless.  The transfer of the assets of Medelle was professionally handled by an independent third party, after approval by the Medelle Board of Directors, representing a majority of its shareholders.  Medelle’s Board voted to proceed with an assignment for the benefit of creditors (AFBC) and gave complete authority to the President & CEO at that time (neither Dr. Ranoux nor Ms. Karloff) to work with the third-party assignee and to get the best possible price for those assets.  The third party was responsible for notifying all the appropriate parties and for filing notices in various professional publications and newspapers of Medelle’s intention to sell its assets.  The third party also contacted numerous large medical device and bio-pharma companies to learn if they would be interested in acquiring the assets.  After a private sale was deemed unlikely, the assignee of the assets elected to proceed with a sealed-bid auction of the assets.  On the day of the auction, Dr. Ranoux submitted the only bid and was awarded the assets, upon full payment. </div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">During 2010, Dr. Ranoux, Ms. Karloff, and INVO Bioscience filed Motions to Dismiss as to all claims, pursuant to M.R.Civ. P. 12(b)(6).  In a written Decision rendered on November 12, 2010, the judge dismissed all claims against INVO, Bio X Cell, and Ms. Karloff, and also dismissed the claims against Dr. Ranoux alleging civil conspiracy and breach of M.G.L. c. 93A.  The judge denied Dr. Ranoux’s motion to dismiss the remaining breach of fiduciary duty and fraud claims.  The plaintiffs allege in their Amended Complaint that Dr. Ranoux committed fraud by failing to inform them of the details of the Medelle auction. </div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">The claims against Dr. Ranoux that survived the November 2010 dismissal order were submitted to binding arbitration.  On February 15, 2013, the mutually-agreed arbitrator ruled in favor of Dr. Ranoux. The award held that Dr. Ranoux did not withhold information about the auction of Medelle’s assets and expressed doubt that the plaintiffs would have invested the resources necessary to make a beneficial use of the assets.  The arbitrator’s award then was confirmed by the Superior Court on August 21, 2013.  The Superior Court’s confirmation of the award was affirmed on appeal on October 20, 2013 by the Massachusetts Appeals Court.  The Massachusetts Supreme Judicial Court then denied further appellate review.  </div><br/><div style="TEXT-ALIGN: justify">On October 18, 2016, following motions and argument, the Superior Court issued a memorandum of decision and order denying plaintiffs’ motion for entry of default judgment and assessment of damages against Medelle and allowed the motion of INVO Bioscience, Bio X Cell, and Ms. Karloff for entry of final judgment of dismissal.  The foregoing order was converted to a final judgment dismissing all claims against all defendants and entered on the docket on October 27, 2016.</div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">On November 28, 2016, plaintiffs filed an amended notice of appeal from the Superior Court’s decision of October 17, 2016 and the subsequent judgment entered on October 27, 2016.  The appeal further challenges the order of dismissal from November, 2010.  Plaintiffs did not appeal from the dismissal of the claims against Ms. Karloff, so the judgment in her favor is now final, leaving claims against INVO Bioscience, Bio X Cell, Medelle, and Dr. Ranoux.</div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">INVO Bioscience and Bio X Cell intend a vigorous opposition to the current appeal, consistent with their previous positions that no breach of duty occurred in the sale of Medelle’s assets. It is assumed that Dr. Ranoux will oppose the appeal as well.</div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">Outside of the above-mentioned litigation, neither INVO Bioscience nor Bio X Cell, our wholly-owned subsidiary, either directly or indirectly, are involved in any lawsuit outside the ordinary course of business, the disposition of which would have a material effect upon either our results of operation, financial position, or cash flows.</div><br/><table id="z45db796417e44e1baada7ddd7faeac39" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">Employee Agreements</div>
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</table><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">The Company had employment agreements for officers, executives and employees of the Company in place. The agreements have since expired and have not been renewed as the Company has not had the proper funds to meet its commitment but has continued to accrue amounts annually for the work that has been performed.  The employees and directors are continuing to work based on good faith and belief in the Company and the INVOcell product.  </div><br/><table id="zda477fcf9a764e7f8f0638c7d5825b22" class="DSPFListTable" style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; WIDTH: 100%" cellspacing="0" cellpadding="0">
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000">Consulting Agreements</div>
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</table><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">The Company has a verbal agreement beginning in March, 2013 with its former CFO, Robert Bowdring, who is currently a Director, to assist where necessary in the financial and administrative areas of the Company for compensation to be equivalent to the others working in the organization.</div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">The Company had an agreement beginning in August, 2011 with an Advisory Board Member who assisted the Company in its sales and marketing areas for stock compensation.   This members’ agreement was not renewed in September 2016 when it expired.</div><br/></div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: left">NOTE 12</div>
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<div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-WEIGHT: bold; COLOR: #000000; TEXT-ALIGN: left">SUBSEQUENT EVENTS</div>
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</table><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">In March 2017, pursuant to Section 4(2) of the Securities Act, the company issued 196,000 shares of restricted common stock with a fair value of $37,770 to service providers.</div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">In March 2017, pursuant to Section 4(2) of the Securities Act, we negotiated the conversion of $10,000 of past due Bridge Notes and accrued interest into 341,000 shares of restricted common stock.</div><br/><div style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; TEXT-ALIGN: justify">In April 2017, pursuant to Section 4(2) of the Securities Act, the company issued 51,750 shares of restricted common stock with a fair value of $17,201 to service providers.<br />
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196000
37770
10000
341000
51750
17201