4. Litigation	6 Months Ended
Jun. 30, 2012
Notes to Financial Statements
NOTE 4 - Litigation	In March 2011, four of our shareholders filed an action in Superior Court of California, in Santa Barbara County (lead plaintiff is Howell Douglas Wood (“Wood”)), against us, our Chief Executive Officer at that time (“CEO”), Chief Financial Officer (“CFO”) and its outside directors. The complaint alleges violations of the California Corporations Code relating to the issuance of securities to the plaintiffs, fraud, breach of fiduciary duty, breach of contract, and breach of the covenant of good faith and fair dealing relating to the handling of requests by the plaintiffs to sell their shares. The complaint seeks unspecified compensatory and punitive damages, recovery of attorney fees and costs and certain equitable relief. We believe that the claims are without merit and have been aggressively defending the action. The Company is planning on filing an appropriate motion to counter the operative complaint (which is the third amended complaint). A trial has been set for April 15, 2013. In November 2011, 12 additional shareholders filed an action in Superior Court of California, in Santa Barbara County (lead plaintiff is Jeffrey Tuttle), against us, our CEO, CFO and its outside directors. This complaint was filed by the same law firms as the Wood complaint, and is similar to the Wood complaint. As with the Wood complaint, the Tuttle complaint alleges violations of the California Corporations Code relating to the issuance of securities to the plaintiffs, fraud, breach of fiduciary duty, breach of contract, and breach of the covenant of good faith and fair dealing relating to the handling of requests by the plaintiffs to sell their shares. The complaint seeks unspecified compensatory and punitive damages, recovery of attorney fees and costs and certain equitable relief. We believe that the claims are without merit and have been aggressively defending the action. The Company is planning on filing an appropriate motion to counter the operative complaint (which is the second amended complaint). By order of the Court, this matter has been consolidated with the Wood matter for purposes of trial, which has been set for April 15, 2013. In September 2011, Maier & Company, Inc., filed a lawsuit against the Company and PSEI for alleged breach of a consulting agreement. In November of 2011, a default judgment was entered for $117,165 against both the Company and PSEI. In January of 2012, the Company and PSEI filed a motion to set aside the default and default judgment. That motion was granted, and the Company and PSEI filed an answer to the complaint. The parties then entered into an agreement to stay discovery or other activity until the parties conduct a mediation. The parties have reached an agreement in principle to settle this matter, subject to reduction to mutually agreeable settlement documents, and the parties are in the process of preparing appropriate settlement documents. The Company anticipates that this matter will be dismissed in the near term. In February 2012, Maverick Apparel Printing, LLC, filed a lawsuit against the Company for alleged breach of a contract for the provision of goods, and seek $25,694, plus interest, fees and costs. The Company filed an answer to the complaint. The parties have reached an agreement in principle to settle this matter, subject to reduction to mutually agreeable settlement documents, and the parties are in the process of preparing appropriate settlement documents. The Company anticipates that this matter will be dismissed by September 30, 2012. In April 2012, Ned Sands filed a lawsuit against the Company for alleged discrimination based on religion and age in an employee termination, as well as fraud in inducing him to join the company. The plaintiff has filed his second amended complaint, which adds as additional defendants a current and former officer of the Company. The Company anticipates filing a response to the complaint shortly. The Company has not yet been required to respond to the complaint. A trial has been set for June of 2013.

4. Litigation

6 Months Ended

Jun. 30, 2012

In March 2011, four of our shareholders filed an action in Superior Court of California, in Santa Barbara County (lead plaintiff is Howell Douglas Wood (“Wood”)), against us, our Chief Executive Officer at that time (“CEO”), Chief Financial Officer (“CFO”) and its outside directors. The complaint alleges violations of the California Corporations Code relating to the issuance of securities to the plaintiffs, fraud, breach of fiduciary duty, breach of contract, and breach of the covenant of good faith and fair dealing relating to the handling of requests by the plaintiffs to sell their shares. The complaint seeks unspecified compensatory and punitive damages, recovery of attorney fees and costs and certain equitable relief. We believe that the claims are without merit and have been aggressively defending the action. The Company is planning on filing an appropriate motion to counter the operative complaint (which is the third amended complaint). A trial has been set for April 15, 2013.

In November 2011, 12 additional shareholders filed an action in Superior Court of California, in Santa Barbara County (lead plaintiff is Jeffrey Tuttle), against us, our CEO, CFO and its outside directors. This complaint was filed by the same law firms as the Wood complaint, and is similar to the Wood complaint. As with the Wood complaint, the Tuttle complaint alleges violations of the California Corporations Code relating to the issuance of securities to the plaintiffs, fraud, breach of fiduciary duty, breach of contract, and breach of the covenant of good faith and fair dealing relating to the handling of requests by the plaintiffs to sell their shares. The complaint seeks unspecified compensatory and punitive damages, recovery of attorney fees and costs and certain equitable relief. We believe that the claims are without merit and have been aggressively defending the action. The Company is planning on filing an appropriate motion to counter the operative complaint (which is the second amended complaint). By order of the Court, this matter has been consolidated with the Wood matter for purposes of trial, which has been set for April 15, 2013.

In September 2011, Maier & Company, Inc., filed a lawsuit against the Company and PSEI for alleged breach of a consulting agreement. In November of 2011, a default judgment was entered for $117,165 against both the Company and PSEI. In January of 2012, the Company and PSEI filed a motion to set aside the default and default judgment. That motion was granted, and the Company and PSEI filed an answer to the complaint. The parties then entered into an agreement to stay discovery or other activity until the parties conduct a mediation. The parties have reached an agreement in principle to settle this matter, subject to reduction to mutually agreeable settlement documents, and the parties are in the process of preparing appropriate settlement documents. The Company anticipates that this matter will be dismissed in the near term.

In February 2012, Maverick Apparel Printing, LLC, filed a lawsuit against the Company for alleged breach of a contract for the provision of goods, and seek $25,694, plus interest, fees and costs. The Company filed an answer to the complaint. The parties have reached an agreement in principle to settle this matter, subject to reduction to mutually agreeable settlement documents, and the parties are in the process of preparing appropriate settlement documents. The Company anticipates that this matter will be dismissed by September 30, 2012.

In April 2012, Ned Sands filed a lawsuit against the Company for alleged discrimination based on religion and age in an employee termination, as well as fraud in inducing him to join the company. The plaintiff has filed his second amended complaint, which adds as additional defendants a current and former officer of the Company. The Company anticipates filing a response to the complaint shortly. The Company has not yet been required to respond to the complaint. A trial has been set for June of 2013.