12. SUBSEQUENT EVENTS	6 Months Ended
Jun. 30, 2013
Notes to Financial Statements
NOTE 12. SUBSEQUENT EVENTS	In July, 2013 the Company sold 4 Units of its securities. Each Unit is comprised of (i) one 10% senior secured callable convertible promissory note, par value $25,000 (each, a “Note”) and (ii) one warrant (each, a “Warrant”) to purchase 37,500 shares of the Company’s common stock (the “Common Stock”). The Note shall be secured by the Company’s intellectual property such as the Patents, royalties, receivables of the Company and all equipment except for the new equipment acquired with the proceeds from any future financing that is initially secured by this new equipment. The purchase price of a Unit was $25,000, resulting in gross proceeds to the Company of $200,000. The Note also calls for the establishment of a sinking fund. Net proceeds amounted to $178,000 after expenses of offering totaling $22,000. In addition, the Placement Agent received 40,000 common stock purchase warrants with an initial exercise price of $.30 per share and expiring July 31, 2018. Interest is payable on the Notes at a rate of 10% per annum, compounded annually, and payable in arrears on July 31st and January 31st. The Notes mature and become due and payable on July 31, 2015 (the “Maturity Date”). At the option of each Note holder, the principal amount of the Note (plus accrued but unpaid interest) is convertible into shares of Common Stock (the “Note Shares”) at any time prior to the Maturity Date at an initial conversion price of $0.29 (which may be subject to certain adjustments as set forth in the Notes). The Notes will rank senior to all other unsecured debt of the Company. The Warrants are exercisable into shares of Common Stock (the “Warrant Shares”) at an initial exercise price of $0.30 (which may be subject to certain adjustments as set forth in the Warrants). The Warrants will expire on July 31, 2018. *Other* During the period July 1, 2013 through August 5, 2013, the Company issued an aggregate of 358,834 shares of common stock valued at $124,076 to various parties as payment for services rendered.

12. SUBSEQUENT EVENTS

6 Months Ended

Jun. 30, 2013

In July, 2013 the Company sold 4 Units of its securities. Each Unit is comprised of (i) one 10% senior secured callable convertible promissory note, par value $25,000 (each, a “Note”) and (ii) one warrant (each, a “Warrant”) to purchase 37,500 shares of the Company’s common stock (the “Common Stock”). The Note shall be secured by the Company’s intellectual property such as the Patents, royalties, receivables of the Company and all equipment except for the new equipment acquired with the proceeds from any future financing that is initially secured by this new equipment. The purchase price of a Unit was $25,000, resulting in gross proceeds to the Company of $200,000. The Note also calls for the establishment of a sinking fund. Net proceeds amounted to $178,000 after expenses of offering totaling $22,000. In addition, the Placement Agent received 40,000 common stock purchase warrants with an initial exercise price of $.30 per share and expiring July 31, 2018.

Interest is payable on the Notes at a rate of 10% per annum, compounded annually, and payable in arrears on July 31st and January 31st. The Notes mature and become due and payable on July 31, 2015 (the “Maturity Date”). At the option of each Note holder, the principal amount of the Note (plus accrued but unpaid interest) is convertible into shares of Common Stock (the “Note Shares”) at any time prior to the Maturity Date at an initial conversion price of $0.29 (which may be subject to certain adjustments as set forth in the Notes). The Notes will rank senior to all other unsecured debt of the Company.

The Warrants are exercisable into shares of Common Stock (the “Warrant Shares”) at an initial exercise price of $0.30 (which may be subject to certain adjustments as set forth in the Warrants). The Warrants will expire on July 31, 2018.

Other

During the period July 1, 2013 through August 5, 2013, the Company issued an aggregate of 358,834 shares of common stock valued at $124,076 to various parties as payment for services rendered.