LEASE OBLIGATION

12 Months Ended

Dec. 31, 2011

4.	LEASE OBLIGATIONS

On October 1, 2011 the Company began leasing operating facilities under an agreement expiring on September 30, 2018. Future minimum monthly lease payments under the agreement are $11,875 for the first year and increase 3% each year. Prepaid expenses and deposits include a security deposit equal to $12,275 and prepaid rent of $23,750. Aggregate maturities of lease obligations are as follows:

2012	$	143,213
2013		147,509
2014		151,934
2015		156,492
2016		161,187
2017 and thereafter		307,816
	$	1,068,151

The Company also leases office space for approximately $1,000 per month on a month to month agreement. Through January 2012 the Company also leased two apartments for approximately $2,200 per month on month to month agreements. Prior to October 2011 the Company leased operating facilities under terms of an operating type lease with monthly payments of $8,500. Prior to December 2009 the Company leased office/warehouse space under terms of an operating type lease with monthly payments of $1,650. Total rent expense under these operating type leases for the years ended December 31, 2011 and 2010 was $139,894 and $100,585, respectively, and was $303,429 for the period from inception to December 31, 2011.

- Definition

The entire disclosure for lessee entity's leasing arrangements including, but not limited to, all of the following: (a.) The basis on which contingent rental payments are determined, (b.) The existence and terms of renewal or purchase options and escalation clauses, (c.) Restrictions imposed by lease agreements, such as those concerning dividends, additional debt, and further leasing.

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