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INVO Bioscience, Inc.,
10-Q
--12-31
141185396
false
0001417926
Yes
No
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No
2017
Q1
2017-03-31
<div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; ">
<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Note 1 – Basis of Presentation</div><br/><div style="TEXT-ALIGN: justify; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">The accompanying consolidated balance sheet as of March 31, 2017, the consolidated statements of operations for the three months ended March 31, 2017 and 2016, changes in stockholders’ deficiency for the three months ended March 31, 2017 and cash flows for the three months ended March 31, 2017 and 2016 INVO Bioscience, Inc. (the “Company”), and the related information contained in these notes have been prepared by management and are unaudited. Certain prior year balances have been reclassified to conform to the current year presentation. These reclassifications did not affect previously reported net loss or stockholders’ deficiency. In the opinion of management, all adjustments (which include normal recurring and nonrecurring items) necessary to present fairly the Company’s financial position, results of operations and cash flows in conformity with generally accepted accounting principles for the periods presented have been made. Interim operating results are not necessarily indicative of operating results for a full year.</div><br/><div style="TEXT-ALIGN: justify; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">The preparation of our unaudited consolidated financial statements requires management 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 unaudited consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Certain information and note disclosures normally included in the Company's annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. These consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company's December 31, 2016 Annual Report on Form 10-K previously filed by the Company with the Securities and Exchange Commission.</div><br/><div style="TEXT-ALIGN: justify; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">The Company considers events or transactions that have occurred after the unaudited consolidated balance sheet date of March 31, 2017, but prior to the filing of the unaudited consolidated financial statements with the SEC on this Quarterly Report on Form 10-Q, to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure, as applicable. Subsequent events have been evaluated through the date of the filing of this Quarterly Report on Form 10-Q with the SEC.</div><br/></div>
<div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; ">
<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Note 2 – Recent Accounting Pronouncements</div><br/><div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">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="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">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="TEXT-ALIGN: justify; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt"><font style="FONT-STYLE: italic; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment: </font>In January 2017, the FASB issued ASU 2017-04, which simplifies the test for goodwill impairment. This new guidance is effective for the Company beginning in fiscal year 2021. The Company is currently in the process of assessing the impact of this ASU on its consolidated financial statements.</div><br/><div style="TEXT-ALIGN: justify; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">There were various updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to have a material impact on the Company’s financial position, results of operations or cash flow.</div><br/></div>
<div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; ">
<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Note 3 – Going Concern</div><br/><div style="TEXT-ALIGN: justify; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">As reflected in the accompanying unaudited consolidated financial statements for the quarter ended March 31, 2017, the Company is in its infancy with minimal revenues, had a net loss for the quarter of $215,000 and a cumulative net loss of $18,158,000, a working capital deficiency of $4,618,000, a stockholder deficiency of $4,715,000 and cash used in operations of $113,000 for the three months ended March 31, 2017.  This raises substantial doubt about its ability to continue as a going concern.  The unaudited consolidated 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>
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<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Note 4 – Inventory</div><br/><div style="TEXT-ALIGN: justify; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">As of March 31, 2017 and December 31, 2016, the Company recorded the following inventory balances:</div><br/><table style="WIDTH: 75%; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt; margin-left: auto; margin-right: auto;" id="z49b481736dc84db89c67c3fab4182302" border="0" cellspacing="0" cellpadding="0">
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<div style="TEXT-ALIGN: left; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt"> </div>
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<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
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<div style="TEXT-ALIGN: center; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">March 31, </div>
<div style="TEXT-ALIGN: center; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2017</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
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<div style="TEXT-ALIGN: center; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">December 31,</div>
<div style="TEXT-ALIGN: center; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2016</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="BACKGROUND-COLOR: #cceeff; WIDTH: 47%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">Work in Process</div>
</td>
<td style="BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">$</div>
</td>
<td style="TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">26,917</div>
</td>
<td style="TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
<td style="BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">$</div>
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<td style="TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">27,986</div>
</td>
<td style="TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="PADDING-BOTTOM: 2px; WIDTH: 47%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">Finished Goods</div>
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<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
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<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">52,577</div>
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<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
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<div style="TEXT-ALIGN: left; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Total Inventory</div>
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<td style="BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">$</div>
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<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">79,494</div>
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<td style="PADDING-BOTTOM: 4px; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">$</div>
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<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">85,210</div>
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<div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; ">
As of March 31, 2017 and December 31, 2016, the Company recorded the following inventory balances:<br /><br /><table style="WIDTH: 75%; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt; margin-left: auto; margin-right: auto;" id="z49b481736dc84db89c67c3fab4182302" border="0" cellspacing="0" cellpadding="0">
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<div style="TEXT-ALIGN: left; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt"> </div>
</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
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<div style="TEXT-ALIGN: center; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">March 31, </div>
<div style="TEXT-ALIGN: center; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2017</div>
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<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
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<div style="TEXT-ALIGN: center; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">December 31,</div>
<div style="TEXT-ALIGN: center; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2016</div>
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<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
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<tr>
<td style="BACKGROUND-COLOR: #cceeff; WIDTH: 47%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">Work in Process</div>
</td>
<td style="BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">$</div>
</td>
<td style="TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">26,917</div>
</td>
<td style="TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
<td style="BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">$</div>
</td>
<td style="TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">27,986</div>
</td>
<td style="TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="PADDING-BOTTOM: 2px; WIDTH: 47%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">Finished Goods</div>
</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">52,577</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">57,224</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="PADDING-BOTTOM: 4px; BACKGROUND-COLOR: #cceeff; WIDTH: 47%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Total Inventory</div>
</td>
<td style="PADDING-BOTTOM: 4px; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">$</div>
</td>
<td style="BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">79,494</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
<td style="PADDING-BOTTOM: 4px; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">$</div>
</td>
<td style="BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">85,210</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
</tr>
</table></div>
26917
27986
52577
57224
<div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; ">
<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Note 5 – Property and Equipment</div><br/><div style="TEXT-ALIGN: justify; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">The estimated useful lives and accumulated depreciation for furniture, equipment and software are as follows as of March 31, 2017 and December 31, 2016:</div><br/><table style="WIDTH: 75%; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt; margin-left: auto; margin-right: auto;" id="zaa9991fc812a440092efd7aee763cacc" border="0" cellspacing="0" cellpadding="0">
<tr>
<td style="WIDTH: 40%; VERTICAL-ALIGN: bottom">
<div style="TEXT-ALIGN: left; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt"> </div>
</td>
<td style="WIDTH: 35%; VERTICAL-ALIGN: bottom">
<div style="TEXT-ALIGN: center; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Estimated Useful Life</div>
</td>
</tr>
<tr>
<td style="WIDTH: 40%; VERTICAL-ALIGN: bottom">
<div style="TEXT-ALIGN: left; LINE-HEIGHT: 11.4pt; BACKGROUND-COLOR: #cceeff; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">Molds</div>
</td>
<td style="WIDTH: 35%; VERTICAL-ALIGN: bottom">
<div style="TEXT-ALIGN: center; LINE-HEIGHT: 11.4pt; BACKGROUND-COLOR: #cceeff; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">3 to 7 years</div>
</td>
</tr>
</table><br/><table style="WIDTH: 75%; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt; margin-left: auto; margin-right: auto;" id="z703c63bf71c840d3a4196efaf2b5a6bc" cellspacing="0" cellpadding="0">
<tr>
<td style="PADDING-BOTTOM: 2px; WIDTH: 47%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt"> </div>
</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 2px solid; VERTICAL-ALIGN: bottom" valign="bottom" colspan="2">
<div style="TEXT-ALIGN: center; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">March 31,</div>
<div style="TEXT-ALIGN: center; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2017</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 2px solid; VERTICAL-ALIGN: bottom" valign="bottom" colspan="2">
<div style="TEXT-ALIGN: center; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">December 31,</div>
<div style="TEXT-ALIGN: center; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2016</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="BACKGROUND-COLOR: #cceeff; WIDTH: 47%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">Manufacturing Equipment- Molds</div>
</td>
<td style="BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">$</div>
</td>
<td style="TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">50,963</div>
</td>
<td style="TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
<td style="BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">$</div>
</td>
<td style="TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">50,963</div>
</td>
<td style="TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="PADDING-BOTTOM: 2px; WIDTH: 47%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">  Accumulated Depreciation</div>
</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">(35,263</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">)</div>
</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">(35,263</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">)</div>
</td>
</tr>
<tr>
<td style="PADDING-BOTTOM: 4px; BACKGROUND-COLOR: #cceeff; WIDTH: 47%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt"> </div>
</td>
<td style="PADDING-BOTTOM: 4px; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">$</div>
</td>
<td style="BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">15,700</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
<td style="PADDING-BOTTOM: 4px; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">$</div>
</td>
<td style="BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">15,700</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
</tr>
</table><br/><div style="TEXT-ALIGN: justify; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">During the three months ended March 31, 2017 and 2016 the Company recorded $0 in depreciation expense during both periods as the new mold has not been put into service as of these dates.</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 as of March 31, 2017 and December 31, 2016:<br /><br /><table style="WIDTH: 75%; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt; margin-left: auto; margin-right: auto;" id="zaa9991fc812a440092efd7aee763cacc" border="0" cellspacing="0" cellpadding="0">
<tr>
<td style="WIDTH: 40%; VERTICAL-ALIGN: bottom">
<div style="TEXT-ALIGN: left; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt"> </div>
</td>
<td style="WIDTH: 35%; VERTICAL-ALIGN: bottom">
<div style="TEXT-ALIGN: center; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Estimated Useful Life</div>
</td>
</tr>
<tr>
<td style="WIDTH: 40%; VERTICAL-ALIGN: bottom">
<div style="TEXT-ALIGN: left; LINE-HEIGHT: 11.4pt; BACKGROUND-COLOR: #cceeff; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">Molds</div>
</td>
<td style="WIDTH: 35%; VERTICAL-ALIGN: bottom">
<div style="TEXT-ALIGN: center; LINE-HEIGHT: 11.4pt; BACKGROUND-COLOR: #cceeff; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">3 to 7 years</div>
</td>
</tr>
</table></div>
P3Y
P7Y
<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 as of March 31, 2017 and December 31, 2016:<br /><br /><table style="WIDTH: 75%; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt; margin-left: auto; margin-right: auto;" id="z703c63bf71c840d3a4196efaf2b5a6bc" cellspacing="0" cellpadding="0">
<tr>
<td style="PADDING-BOTTOM: 2px; WIDTH: 47%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt"> </div>
</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 2px solid; VERTICAL-ALIGN: bottom" valign="bottom" colspan="2">
<div style="TEXT-ALIGN: center; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">March 31,</div>
<div style="TEXT-ALIGN: center; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2017</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 2px solid; VERTICAL-ALIGN: bottom" valign="bottom" colspan="2">
<div style="TEXT-ALIGN: center; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">December 31,</div>
<div style="TEXT-ALIGN: center; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2016</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="BACKGROUND-COLOR: #cceeff; WIDTH: 47%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">Manufacturing Equipment- Molds</div>
</td>
<td style="BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">$</div>
</td>
<td style="TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">50,963</div>
</td>
<td style="TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
<td style="BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">$</div>
</td>
<td style="TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">50,963</div>
</td>
<td style="TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="PADDING-BOTTOM: 2px; WIDTH: 47%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">  Accumulated Depreciation</div>
</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">(35,263</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">)</div>
</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">(35,263</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">)</div>
</td>
</tr>
<tr>
<td style="PADDING-BOTTOM: 4px; BACKGROUND-COLOR: #cceeff; WIDTH: 47%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt"> </div>
</td>
<td style="PADDING-BOTTOM: 4px; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">$</div>
</td>
<td style="BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">15,700</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
<td style="PADDING-BOTTOM: 4px; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">$</div>
</td>
<td style="BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">15,700</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
</tr>
</table></div>
50963
50963
35263
35263
15700
15700
<div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; ">
<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Note 6 – Patents</div><br/><div style="TEXT-ALIGN: justify; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">As of March 31, 2017 and December 31, 2016, the Company recorded the following patent balances:</div><br/><table style="WIDTH: 75%; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt; margin-left: auto; margin-right: auto;" id="z7a4ecbaf213e4865a43009d0eefaf4ea" cellspacing="0" cellpadding="0">
<tr>
<td style="PADDING-BOTTOM: 2px; WIDTH: 47%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt"> </div>
</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 2px solid; VERTICAL-ALIGN: bottom" valign="bottom" colspan="2">
<div style="TEXT-ALIGN: center; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">March 31,</div>
<div style="TEXT-ALIGN: center; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2017</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 2px solid; VERTICAL-ALIGN: bottom" valign="bottom" colspan="2">
<div style="TEXT-ALIGN: center; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">December 31,</div>
<div style="TEXT-ALIGN: center; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2016</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="BACKGROUND-COLOR: #cceeff; WIDTH: 47%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Total Patents</div>
</td>
<td style="BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">$</div>
</td>
<td style="TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">77,743</div>
</td>
<td style="TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
<td style="BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">$</div>
</td>
<td style="TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">77,743</div>
</td>
<td style="TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="PADDING-BOTTOM: 4px; WIDTH: 47%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">Accumulated Amortization</div>
</td>
<td style="PADDING-BOTTOM: 4px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">(58,605</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">)</div>
</td>
<td style="PADDING-BOTTOM: 4px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">(58,605</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">)</div>
</td>
</tr>
<tr>
<td style="PADDING-BOTTOM: 4px; BACKGROUND-COLOR: #cceeff; WIDTH: 47%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Patent costs, net</div>
</td>
<td style="PADDING-BOTTOM: 4px; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">$</div>
</td>
<td style="BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">19,138</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
<td style="PADDING-BOTTOM: 4px; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">$</div>
</td>
<td style="BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">19,138</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
</tr>
</table><br/><div style="TEXT-ALIGN: justify; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">During the three months ended March 31, 2017 and 2016, the Company recorded $0 and $1,409 in amortization expenses respectively.</div><br/><div style="TEXT-ALIGN: justify; LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">Estimated amortization expense as of March 31, 2017 is as follows:</div><br/><table style="WIDTH: 75%; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt; margin-left: auto; margin-right: auto;" id="z3c3ac7654a2045a89f0dd262313bf623" border="0" cellspacing="0" cellpadding="0">
<tr>
<td style="WIDTH: 61%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: right; LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">Years ended December 31,</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom" valign="bottom" colspan="2"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="BACKGROUND-COLOR: #cceeff; WIDTH: 61%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: right; LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">2017</div>
</td>
<td style="BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">$</div>
</td>
<td style="TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">4,536</div>
</td>
<td style="TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style=" WIDTH: 61%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: right; LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">2018</div>
</td>
<td style=" WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: right; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">4,536</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="BACKGROUND-COLOR: #cceeff; WIDTH: 61%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: right; LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">2019</div>
</td>
<td style="BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">4,536</div>
</td>
<td style="TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style=" WIDTH: 61%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: right; LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">2020</div>
</td>
<td style=" WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: right; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">4,536</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="PADDING-BOTTOM: 2px; BACKGROUND-COLOR: #cceeff; WIDTH: 61%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: right; LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">2021 and thereafter</div>
</td>
<td style="PADDING-BOTTOM: 2px; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">994</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="PADDING-BOTTOM: 4px; WIDTH: 61%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: right; LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">Total</div>
</td>
<td style="PADDING-BOTTOM: 4px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">$</div>
</td>
<td style="BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">19,138</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
</tr>
</table><br/></div>
0
1409
<div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; ">
As of March 31, 2017 and December 31, 2016, the Company recorded the following patent balances:<br /><br /><table style="WIDTH: 75%; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt; margin-left: auto; margin-right: auto;" id="z7a4ecbaf213e4865a43009d0eefaf4ea" cellspacing="0" cellpadding="0">
<tr>
<td style="PADDING-BOTTOM: 2px; WIDTH: 47%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt"> </div>
</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 2px solid; VERTICAL-ALIGN: bottom" valign="bottom" colspan="2">
<div style="TEXT-ALIGN: center; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">March 31,</div>
<div style="TEXT-ALIGN: center; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2017</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 2px solid; VERTICAL-ALIGN: bottom" valign="bottom" colspan="2">
<div style="TEXT-ALIGN: center; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">December 31,</div>
<div style="TEXT-ALIGN: center; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2016</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="BACKGROUND-COLOR: #cceeff; WIDTH: 47%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Total Patents</div>
</td>
<td style="BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">$</div>
</td>
<td style="TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">77,743</div>
</td>
<td style="TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
<td style="BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">$</div>
</td>
<td style="TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">77,743</div>
</td>
<td style="TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="PADDING-BOTTOM: 4px; WIDTH: 47%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">Accumulated Amortization</div>
</td>
<td style="PADDING-BOTTOM: 4px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">(58,605</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">)</div>
</td>
<td style="PADDING-BOTTOM: 4px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">(58,605</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">)</div>
</td>
</tr>
<tr>
<td style="PADDING-BOTTOM: 4px; BACKGROUND-COLOR: #cceeff; WIDTH: 47%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Patent costs, net</div>
</td>
<td style="PADDING-BOTTOM: 4px; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">$</div>
</td>
<td style="BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">19,138</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
<td style="PADDING-BOTTOM: 4px; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">$</div>
</td>
<td style="BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">19,138</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
</tr>
</table></div>
77743
77743
58605
58605
<div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; ">
Estimated amortization expense as of March 31, 2017 is as follows:<br /><br /><table style="WIDTH: 75%; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt; margin-left: auto; margin-right: auto;" id="z3c3ac7654a2045a89f0dd262313bf623" border="0" cellspacing="0" cellpadding="0">
<tr>
<td style="WIDTH: 61%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: right; LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">Years ended December 31,</div>
</td>
<td style="WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="VERTICAL-ALIGN: bottom" valign="bottom" colspan="2"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="BACKGROUND-COLOR: #cceeff; WIDTH: 61%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: right; LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">2017</div>
</td>
<td style="BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">$</div>
</td>
<td style="TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">4,536</div>
</td>
<td style="TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style=" WIDTH: 61%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: right; LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">2018</div>
</td>
<td style=" WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: right; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">4,536</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="BACKGROUND-COLOR: #cceeff; WIDTH: 61%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: right; LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">2019</div>
</td>
<td style="BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">4,536</div>
</td>
<td style="TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style=" WIDTH: 61%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: right; LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">2020</div>
</td>
<td style=" WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: right; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">4,536</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="PADDING-BOTTOM: 2px; BACKGROUND-COLOR: #cceeff; WIDTH: 61%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: right; LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">2021 and thereafter</div>
</td>
<td style="PADDING-BOTTOM: 2px; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">994</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="PADDING-BOTTOM: 4px; WIDTH: 61%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: right; LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">Total</div>
</td>
<td style="PADDING-BOTTOM: 4px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">$</div>
</td>
<td style="BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">19,138</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px; WIDTH: 1%; VERTICAL-ALIGN: bottom; 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; ">
<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Note 7 – Convertible Notes and Notes Payable</div><br/><div style="TEXT-ALIGN: justify; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt"><font style="text-decoration:underline">Convertible Notes</font></div><br/><div style="TEXT-ALIGN: justify; LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">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="TEXT-ALIGN: justify; LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">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="TEXT-ALIGN: justify; LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">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="TEXT-ALIGN: justify; LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">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="TEXT-ALIGN: justify; LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">In March 2017, the Company converted the last Bridge Note in the amount of $10,000 and accrued interest into shares of common stock. The Company negotiated this conversion at a price lower than the conversion price stated in the original Bridge Note documents because the Bridge Note was past due.  This conversion was treated as a restructure of debt on the Company’s financial statements for the three months ended March 31, 2017.  $10,000 of the Bridge Notes and accrued interest were converted into 341,000 shares of restricted common stock resulting in a loss on debt settlement in the amount of $40,869.</div><br/><div style="TEXT-ALIGN: justify; LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">The principal balances of the Convertible Notes was $0 and $10,000 as of March 31, 2007 and 2016 respectively.  The related interest for the three months ended March 31, 2017 and 2016 was $0 and $250 respectively.</div><br/><div style="TEXT-ALIGN: justify; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt"><font style="text-decoration:underline">Notes Payable</font></div><br/><div style="TEXT-ALIGN: justify; LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">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 related interest for the three months ended March 31, 2017 and 2016 was $4,391 and $0 respectively.</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
341000
0
10000
0
250
131722
P3Y
0.05
<div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; ">
<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Note 8 – Notes Payable and Other Related Party Transactions</div><br/><div style="TEXT-ALIGN: justify; LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">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="TEXT-ALIGN: justify; LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">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="TEXT-ALIGN: justify; LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">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="TEXT-ALIGN: justify; LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">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="TEXT-ALIGN: justify; LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">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 $0 with Superior Printing during both of the three months ended March 31, 2017 and 2016 respectively.</div><br/><div style="TEXT-ALIGN: justify; LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">Principal balances of the Related Party loans were as follows:</div><br/><table style="WIDTH: 75%; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt; margin-left: auto; margin-right: auto;" id="zecaeca522a0645cb860c6a0d67005e74" cellspacing="0" cellpadding="0">
<tr>
<td style="PADDING-BOTTOM: 2px; WIDTH: 47%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt"> </div>
</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 2px solid; VERTICAL-ALIGN: bottom" valign="bottom" colspan="2">
<div style="TEXT-ALIGN: center; LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold">March 31, 2017</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 2px solid; VERTICAL-ALIGN: bottom" valign="bottom" colspan="2">
<div style="TEXT-ALIGN: center; LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold">December 31, 2016</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="BACKGROUND-COLOR: #cceeff; WIDTH: 47%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">Claude Ranoux Note</div>
</td>
<td style="BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">$</div>
</td>
<td style="TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">21,888</div>
</td>
<td style="TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
<td style="BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">$</div>
</td>
<td style="TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">21,888</div>
</td>
<td style="TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style=" WIDTH: 47%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt"> </div>
</td>
<td style=" WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: right; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
<td style=" WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: right; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="BACKGROUND-COLOR: #cceeff; WIDTH: 47%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">James Bowdring – Q211 Note</div>
</td>
<td style="BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">25,000</div>
</td>
<td style="TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
<td style="BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">25,000</div>
</td>
<td style="TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style=" WIDTH: 47%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt"> </div>
</td>
<td style=" WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: right; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
<td style=" WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: right; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="BACKGROUND-COLOR: #cceeff; WIDTH: 47%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">James Bowdring- Q411 Note</div>
</td>
<td style="BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">10,000</div>
</td>
<td style="TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
<td style="BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">10,000</div>
</td>
<td style="TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style=" WIDTH: 47%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt"> </div>
</td>
<td style=" WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: right; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
<td style=" WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: right; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="PADDING-BOTTOM: 2px; BACKGROUND-COLOR: #cceeff; WIDTH: 47%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">Kathleen Karloff Note</div>
</td>
<td style="PADDING-BOTTOM: 2px; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">154,000</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
<td style="PADDING-BOTTOM: 2px; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">154,000</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style=" WIDTH: 47%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt"> </div>
</td>
<td style=" WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: right; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
<td style=" WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: right; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="PADDING-BOTTOM: 4px; BACKGROUND-COLOR: #cceeff; WIDTH: 47%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">Total</div>
</td>
<td style="PADDING-BOTTOM: 4px; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">$</div>
</td>
<td style="BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">210,888</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
<td style="PADDING-BOTTOM: 4px; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">$</div>
</td>
<td style="BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">210,888</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
</tr>
</table><br/><div style="TEXT-ALIGN: justify; LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">Interest expense on the Related Party loans was $2,912 and $648 for the quarter ended March 31, 2017 and 2016, respectively.</div><br/><div style="TEXT-ALIGN: justify; LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; 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 interest owed on their notes to the Company are $123,000 and $120,000 as of March 31, 2017 and December 31, 2016 respectively.</div><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
0
0
2912
648
123000
120000
<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 style="WIDTH: 75%; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt; margin-left: auto; margin-right: auto;" id="zecaeca522a0645cb860c6a0d67005e74" cellspacing="0" cellpadding="0">
<tr>
<td style="PADDING-BOTTOM: 2px; WIDTH: 47%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt"> </div>
</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 2px solid; VERTICAL-ALIGN: bottom" valign="bottom" colspan="2">
<div style="TEXT-ALIGN: center; LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold">March 31, 2017</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 2px solid; VERTICAL-ALIGN: bottom" valign="bottom" colspan="2">
<div style="TEXT-ALIGN: center; LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt; FONT-WEIGHT: bold">December 31, 2016</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="BACKGROUND-COLOR: #cceeff; WIDTH: 47%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">Claude Ranoux Note</div>
</td>
<td style="BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">$</div>
</td>
<td style="TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">21,888</div>
</td>
<td style="TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
<td style="BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">$</div>
</td>
<td style="TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">21,888</div>
</td>
<td style="TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style=" WIDTH: 47%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt"> </div>
</td>
<td style=" WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: right; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
<td style=" WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: right; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="BACKGROUND-COLOR: #cceeff; WIDTH: 47%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">James Bowdring – Q211 Note</div>
</td>
<td style="BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">25,000</div>
</td>
<td style="TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
<td style="BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">25,000</div>
</td>
<td style="TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style=" WIDTH: 47%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt"> </div>
</td>
<td style=" WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: right; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
<td style=" WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: right; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="BACKGROUND-COLOR: #cceeff; WIDTH: 47%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">James Bowdring- Q411 Note</div>
</td>
<td style="BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">10,000</div>
</td>
<td style="TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
<td style="BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">10,000</div>
</td>
<td style="TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style=" WIDTH: 47%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt"> </div>
</td>
<td style=" WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: right; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
<td style=" WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: right; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="PADDING-BOTTOM: 2px; BACKGROUND-COLOR: #cceeff; WIDTH: 47%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">Kathleen Karloff Note</div>
</td>
<td style="PADDING-BOTTOM: 2px; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">154,000</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
<td style="PADDING-BOTTOM: 2px; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 2px solid; TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">154,000</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style=" WIDTH: 47%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt"> </div>
</td>
<td style=" WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: right; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
<td style=" WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: right; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="PADDING-BOTTOM: 4px; BACKGROUND-COLOR: #cceeff; WIDTH: 47%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">Total</div>
</td>
<td style="PADDING-BOTTOM: 4px; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">$</div>
</td>
<td style="BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">210,888</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
<td style="PADDING-BOTTOM: 4px; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">$</div>
</td>
<td style="BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">210,888</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom; 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; ">
<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Note 9 – Stockholders’ Equity</div><br/><div style="TEXT-ALIGN: justify; LINE-HEIGHT: 11pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">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 $59,242 to service providers.</div><br/><div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">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>
196000
59242
10000
341000
<div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; ">
<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Note 10 – Stock Options and Warrants</div><br/><div style="TEXT-ALIGN: justify; LINE-HEIGHT: 13.7pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt"><font style="FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt">As of March 31, 2017 and 2016, the Company did not have any options or warrants to acquire shares of Common Stock outstanding.</font><font style="FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt"> </font></div><br/></div>
<div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; ">
<div style="TEXT-ALIGN: justify; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Note 11 – Income Taxes</div><br/><div style="TEXT-ALIGN: justify; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">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="TEXT-ALIGN: justify; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">The Company’s total deferred tax liabilities, deferred tax assets and deferred tax asset valuation allowances at March 31, 2017 and December 31, 2016 are as follows:</div><br/><table style="WIDTH: 75%; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt; margin-left: auto; margin-right: auto;" id="z4884c74ad2024ec29e2332dc19d2fa6f" cellspacing="0" cellpadding="0">
<tr>
<td style="PADDING-BOTTOM: 2px; WIDTH: 47%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt"> </div>
</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 2px solid; VERTICAL-ALIGN: bottom" valign="bottom" colspan="2">
<div style="TEXT-ALIGN: center; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">March 31,</div>
<div style="TEXT-ALIGN: center; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2017</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 2px solid; VERTICAL-ALIGN: bottom" valign="bottom" colspan="2">
<div style="TEXT-ALIGN: center; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">December 31,</div>
<div style="TEXT-ALIGN: center; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2016</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="BACKGROUND-COLOR: #cceeff; WIDTH: 47%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">Total deferred tax assets</div>
</td>
<td style="BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">$</div>
</td>
<td style="TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">7,263,000</div>
</td>
<td style="TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
<td style="BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">$</div>
</td>
<td style="TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">7,177,000</div>
</td>
<td style="TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style=" WIDTH: 47%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">Less valuation allowance</div>
</td>
<td style=" WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: right; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">(7,263,000</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">)</div>
</td>
<td style=" WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: right; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">(7,177,000</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">)</div>
</td>
</tr>
<tr>
<td style="PADDING-BOTTOM: 4px; BACKGROUND-COLOR: #cceeff; WIDTH: 47%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">Total deferred tax liabilities</div>
</td>
<td style="PADDING-BOTTOM: 4px; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">-</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
<td style="PADDING-BOTTOM: 4px; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">-</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="PADDING-BOTTOM: 4px; WIDTH: 47%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">Net deferred tax asset (liability)</div>
</td>
<td style="PADDING-BOTTOM: 4px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">$</div>
</td>
<td style="BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">-</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
<td style="PADDING-BOTTOM: 4px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">$</div>
</td>
<td style="BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">-</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
</tr>
</table><br/><div style="TEXT-ALIGN: justify; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">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>
<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 at March 31, 2017 and December 31, 2016 are as follows:<br /><br /><table style="WIDTH: 75%; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt; margin-left: auto; margin-right: auto;" id="z4884c74ad2024ec29e2332dc19d2fa6f" cellspacing="0" cellpadding="0">
<tr>
<td style="PADDING-BOTTOM: 2px; WIDTH: 47%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt"> </div>
</td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 2px solid; VERTICAL-ALIGN: bottom" valign="bottom" colspan="2">
<div style="TEXT-ALIGN: center; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">March 31,</div>
<div style="TEXT-ALIGN: center; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2017</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
<td style="PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 2px solid; VERTICAL-ALIGN: bottom" valign="bottom" colspan="2">
<div style="TEXT-ALIGN: center; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">December 31,</div>
<div style="TEXT-ALIGN: center; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">2016</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 2px; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="BACKGROUND-COLOR: #cceeff; WIDTH: 47%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">Total deferred tax assets</div>
</td>
<td style="BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">$</div>
</td>
<td style="TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">7,263,000</div>
</td>
<td style="TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
<td style="BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">$</div>
</td>
<td style="TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">7,177,000</div>
</td>
<td style="TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style=" WIDTH: 47%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">Less valuation allowance</div>
</td>
<td style=" WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: right; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">(7,263,000</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">)</div>
</td>
<td style=" WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="TEXT-ALIGN: right; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">(7,177,000</div>
</td>
<td style="TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">)</div>
</td>
</tr>
<tr>
<td style="PADDING-BOTTOM: 4px; BACKGROUND-COLOR: #cceeff; WIDTH: 47%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">Total deferred tax liabilities</div>
</td>
<td style="PADDING-BOTTOM: 4px; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">-</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
<td style="PADDING-BOTTOM: 4px; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; BACKGROUND-COLOR: #cceeff; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">-</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px; BACKGROUND-COLOR: #cceeff; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
</tr>
<tr>
<td style="PADDING-BOTTOM: 4px; WIDTH: 47%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="TEXT-ALIGN: left; LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">Net deferred tax asset (liability)</div>
</td>
<td style="PADDING-BOTTOM: 4px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">$</div>
</td>
<td style="BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">-</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
<td style="PADDING-BOTTOM: 4px; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom"> </td>
<td style="BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: left; WIDTH: 1%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">$</div>
</td>
<td style="BORDER-BOTTOM: #000000 4px double; TEXT-ALIGN: right; WIDTH: 11%; VERTICAL-ALIGN: bottom" valign="bottom">
<div style="LINE-HEIGHT: 11.4pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">-</div>
</td>
<td style="TEXT-ALIGN: left; PADDING-BOTTOM: 4px; WIDTH: 1%; VERTICAL-ALIGN: bottom; white-space: nowrap;" valign="bottom"> </td>
</tr>
</table></div>
7263000
7177000
7263000
7177000
0
0
0
0
<div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; ">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Note 12 – Commitments and Contingencies</div><br/><table style="WIDTH: 100%; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt" id="zf4ab4b8304c649349d1c75c116340260" class="DSPFListTable" cellspacing="0" cellpadding="0">
<tr>
<td style="WIDTH: 27pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: top; align: right">A)</td>
<td style="TEXT-ALIGN: justify; WIDTH: auto; VERTICAL-ALIGN: top">
<div style="FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">Operating Leases</div>
</td>
</tr>
</table><br/><div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">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 style="WIDTH: 100%; FONT-FAMILY: 'Times New Roman', Times, serif; FONT-SIZE: 10pt" id="z35dbcba561eb42a0b7089ee97a3b3b2d" class="DSPFListTable" cellspacing="0" cellpadding="0">
<tr>
<td style="WIDTH: 27pt; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; VERTICAL-ALIGN: top; align: right">B)</td>
<td style="TEXT-ALIGN: justify; WIDTH: auto; VERTICAL-ALIGN: top">
<div style="FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">Litigation</div>
</td>
</tr>
</table><br/><div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">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="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">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="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">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="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">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; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">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="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">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="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">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="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">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/></div>
<div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt; ">
<div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt; FONT-WEIGHT: bold">Note 13 – Subsequent Events</div><br/><div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">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</div><br/><div style="TEXT-ALIGN: justify; FONT-FAMILY: 'Times New Roman', Times, serif; COLOR: #000000; FONT-SIZE: 10pt">The Company has evaluated subsequent events through the date the financial statements were released and there were no others.<br style="LINE-HEIGHT: 13.7pt" />
</div><br/></div>
51750
17201